By: Francis Cianfrocca (Diary)  |  February 10th at 12:02 PM  | 

The case of the Obama Administration vs. the Catholic Church goes far beyond the fraught question of women’s reproductive rights. It’s also the clearest defining moment that I can think of in our lifetimes, on the question of the proper role of government. It’s glaringly obvious to many people that abortion, sterilization, and similar procedures are a strictly-required component of women’s health. These people often | Read More »

By: Francis Cianfrocca (Diary)  |  October 31st at 09:52 AM  | 

When you’ve been on the edge of having a convulsion for months, you could be excused for clutching at anything to convince yourself at least temporarily that you’ve turned the corner. Today, this is looking like a fair characterization of last week’s big relief rally at the euro “rescue” plan that was “agreed” in Brussels. Markets are trading significantly lower this morning, and much is | Read More »

By: Francis Cianfrocca (Diary)  |  August 10th at 08:34 AM  | 

If you were watching capital markets closely yesterday, you saw a phenomenon that has rarely been seen before. I certainly never have. And it was linked to the Federal Reserve’s policy statement, released about 2:15pm Eastern time. This was an extraordinary statement, containing several rarely-seen features. The first one, of course, was the commitment by the Fed to keep policy interest rates at or near | Read More »

By: Francis Cianfrocca (Diary)  |  August 9th at 09:10 AM  | 

So this year’s fiscal-policy code word is “balanced approach.” This means nothing more or less than higher taxes on high earners, business income, and capital gains. Congressman Eric Cantor remarked at one point in the debt-ceiling debate that the Democrats (including Obama) were totally stuck on the idea of raising taxes. But Cantor stressed that they never presented an economic rationale for higher taxes. It | Read More »

By: Francis Cianfrocca (Diary)  |  August 8th at 06:20 AM  | 

Jean-Claude Trichet, the outgoing governor of the European Central Bank, just announced that the ECB will engage in purchases of euro-denominated bonds issued by Spain and Italy. This long-resisted move is intended to stem the latest flareup of the sovereign-debt heartburn that is a far greater threat to financial-market stability than the US debt downgrade. If the ECB manage to sustain this, it probably will | Read More »

By: Francis Cianfrocca (Diary)  |  August 1st at 04:20 PM  | 

This isn’t Monday-morning quarterbacking. For one thing, it’s not football season yet. For another, the game wasn’t played on Sunday afternoon. It’s been going on for weeks, with twists and turns more reminiscent of comic opera than football. Even so, today’s media game has been all about deciding who got the better deal. Many of the partisans think they came up short, and are looking | Read More »

By: Francis Cianfrocca (Diary)  |  July 24th at 06:09 PM  | 

Currency markets are open in the Far East as I write this, and the dollar is a little weaker. No interest rates or commodity prices yet, but I’ll update you if anything exciting materializes. I must say that I found it weird to hear John Boehner and others talking about making a deal before the trading week starts. (And if you’re a long-time RedState reader, | Read More »

By: Francis Cianfrocca (Diary)  |  July 19th at 09:57 AM  | 

Ok, let’s look at both the politics and the economics of this issue. The underlying politics is as follows: the American people are sick and tired of deficit spending. The pundits are completely wrong when they downplay this issue, because deficits are FAR worse now than they ever have been in peacetime (10+% of GDP). And they got far worse at almost the exact moment | Read More »

By: Francis Cianfrocca (Diary)  |  July 8th at 09:39 AM  | 

Noted briefly: the BLS report on June employment conditions was sharply disappointing. Non-farm payrolls rose by only 18,000 jobs. This is far below the +200,000 jobs we were seeing monthly earlier this year. It undershot the expectations of private economists, some of whom were expecting at least +50,000. And it varies from the considerably more-optimistic ADP report issued earlier this week. The June number has | Read More »

By: Francis Cianfrocca (Diary)  |  July 5th at 01:45 PM  | 

While you were watching imported Chinese fireworks yesterday, the Europeans were shooting off some home-grown ones. The euro has been trading down for most of the last 24 hours, as S&P and Fitch announced that they would consider the French-led rollover plan for Greek debt a “selective” default. What’s really going on is that a negotiation is taking place over what should be the credit | Read More »

By: Francis Cianfrocca (Diary)  |  June 13th at 08:30 AM  | 

Watching the Europeans go through their gyrations over Greece, it’s striking that so little of the commentary focuses on the true issue that is at stake for policymakers: the financial health of the holders of current Greek debt. Stay with me on this, because I’ll show you how it impacts current policy in the US. There is something afoot called the “Vienna alternative” under which | Read More »

By: Francis Cianfrocca (Diary)  |  June 6th at 08:09 AM  | 

Peter A. Diamond, a professor of economics at MIT, has just published a hissy fit in the NY Times titled “When a Nobel Prize isn’t enough.” I won’t link the piece because of the Times’s paywall, so I’ll just tell you what he says. Diamond wants to be a governor of the Federal Reserve. Barack Obama wants the same thing, having nominated Diamond three times | Read More »

By: Francis Cianfrocca (Diary)  |  June 2nd at 10:34 AM  | 

Just when you thought US Treasury debt couldn’t get more overpriced, it gets… more overpriced. The 10-year yield fell all the way to 2.95% yesterday. It held that level for part of this morning, and now is just under 3%. At least some of this has to be due to the supply disruption caused by the US hitting its debt ceiling. (Existing debt can be | Read More »

By: Francis Cianfrocca (Diary)  |  April 27th at 10:10 AM  | 

Dave Leonhardt has a piece in today’s New York Times (“Holding Bernanke Accountable,” no link due to paywall). I’m sad about this piece because Leonhardt is a very knowledgeable guy whom I always enjoy reading. But I find that he has a tendency to fall back on conventional wisdom. At times I feel that his research is limited to what he reads in his own | Read More »

By: Francis Cianfrocca (Diary)  |  December 7th at 10:12 AM  | 

My observations on the tax-cut deal: I don’t have a problem with extending the UI benefits. As I’ve said elsewhere, I think there are a few million people out there, mostly middle-aged, who will never see another job at their old rate of pay, and this is because the economy is changing, not because of recession. We’re going to eventually end up with permanent income | Read More »

By: Francis Cianfrocca (Diary)  |  November 29th at 10:23 AM  | 

Yesterday afternoon, Ireland finalized terms of a bailout valued at 85 billion euros, from the ECB, the IMF, a government pension fund, and several European states. (Details here.) So far, the bailout is NOT having a calming effect on Europe’s capital markets. Credit spreads on so-called “peripheral” European sovereigns are blowing out this morning, and government bonds of Portugal and Spain are falling sharply. Italy | Read More »

By: Francis Cianfrocca (Diary)  |  November 8th at 10:07 AM  | 

I’ve been asked to give some basic perspective on what the Fed’s “quantitative easing” actually is. Since writing this piece, I’ve become more convinced that I was on the right track. So far, three different QE models have been observed in the wild: the Japanese (2001-06), the British (2008-09), and Bernanke I (2008-10). We’re about to see Bernanke II. All of them are forms of | Read More »

By: Francis Cianfrocca (Diary)  |  November 5th at 02:09 PM  | 

It’s been clear enough to everyone with eyes that the most visible effect of the Fed’s QE2 program would be to inflate the stock market, and possibly (because of the weaker dollar) commodities too. A view is starting to emerge that this is what Bernanke actually had in mind. Creating a huge amount of new "bank money" obviously did nothing to stimulate the creation of | Read More »

By: Francis Cianfrocca (Diary)  |  November 3rd at 07:31 AM  | 

If you’re a Republican partisan, tonight was a very, very good night. If you’re an ordinary person trying to suss out the business and financial outlook, tonight was basically a non-event. Nothing that happened on Election Day 2010 was a surprise. The results basically match what non-political junkies been expecting for months. We’re going to get no fundamental change in the overall approach to policy. | Read More »

By: Francis Cianfrocca (Diary)  |  November 1st at 08:17 AM  | 

Pretty much everything Yves Smith says in this New York Times op-ed piece is true, although she elides a lot of details, probably to fit in the available space. (It’s not for lack of knowledge. She’s totally up on this situation and has been from nearly the beginning.) She doesn’t really tie all the threads together, though. Mechanically, the problem is that many people who | Read More »