Author Archive | NotQuant

Mega-banks get hit with mega $250 billion lawsuit. Is the party over?

It’s one thing when angry homeowners attempt to stare-down $1000/hr corporate lawyers over fraud-related losses during the housing bust.  The analogy of bringing a squirt-gun to a gun-fight comes to mind. But it’s quite another when a group of heavy-hitters led by BlackRock and PIMCO fire off a massive $250 Billion lawsuit in the New York State Supreme […]

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Bank of England: Raising rates is outside of “political reality”. Wait… what?

Mark Carney shot back a direct refusal to the BIS’ recommendation to raise rates today, saying “Raising rates is outside of political and economic reality”. Mark Carney has rejected calls by the Bank for International Settlements (BIS) for a swift return to normal interest rates, lambasting the lauded Swiss institution for operating “in a vacuum” and “outside political and […]

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Central banks speculating in equity-markets: What could possibly go wrong?

Yesterday, in Congressional testimony Janet Yellen apparnetly felt it was within her mandate as Chair of the Federal Reserve to slap a “sell rating” on social media stocks and bio-techs. The smack-down of two sectors certainly raised eyebrows. Why?  Because it was one more disturbing sign of increasing Federal Reserve involvement in equity markets.  The big question […]

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The West African Ebola outbreak is out of control

It’s bad enough that the worst Ebola outbreak in history is spreading across national borders and evading the best efforts at containment, but now doctors are facing a new problem:  Angry, scared and dangerous villagers who don’t want doctors’ help. International and local medics were struggling to get access to communities as many residents feared outsiders […]

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Must Watch: Warren destroys Yellen’s position on “Too Big to Fail”.

This dialogue hasn’t received nearly as much attention as it deserves. As we predicted this morning, Warren would grill Yellen over TBTF.  And Yellen would do little more than say the Fed is “looking into it”. Sure enough, Yellen repeatedly attempted to deflect the issue.  Warren was having none of it. This single clip summarizes the entire […]

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Did Janet Yellen just step out-of-bounds?

A strange thing happened during today’s Federal Reserve testimony in front of Congress:  Janet Yellen told the world that she felt a particular sector on the equity markets was overvalued.  More specifically:  Janet Yellen decided it was in the Federal Reserve’s authority to knock some of the wind out of social media and biotech stocks.  We’ve re-read […]

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The Israel-Palestine Conflict: Do we care about it too much?

We receive lots of emails asking us to post or re-print political articles.   A sizable percentage of them concern that perennial favorite:  The Israeli-Palestinian conflict. Our short answer is: No.  We’re not going there. We’re not here to weigh-in on who’s right and who’s wrong the world’s most popular conflict.  Everyone else is already doing that ad nauseum.  But […]

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Rick Santelli vs. the Talking Heads

Today’s pro-Fed vs. anti-Fed showdown on CNBC was highly entertaining and highly infuriating all at the same time. Here’s the problem with the closing argument: Those that argue that ‘the market has risen ergo the Fed has succeeded’ not only misunderstand the role of the Federal Reserve (as Santelli pointed out), or to whom the benefits […]

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They learned nothing: The Bank of England is already pushing for more banking deregulation

Even though the Basel banking-regulations are adhered to by all European banks, England’s largest banks have special permissions to use custom “bespoke” models when calculating their loan-loss reserve requirements rather than the standard Basel risk-weights that smaller banks are forced to use. What does this mean?  It means large UK banks have an enormous advantage over smaller banks as they don’t […]

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Please help us raise funds to visit Paul Krugman’s home planet.

We’re asking for your support to help crowd-fund a purpose-built spacecraft. We haven’t gotten around to making a page on StartJoin yet, but it’s coming. Why, you ask?   Because after reading Paul Krugman’s editorial defending Fed policies last week, we have become intensely interested in visiting his planet. So if you’re ready to hear our “pitch”, please sit […]

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NotQuant’s response to Mish’s Response to NotQuant

Yesterday, we read Mike Shedlock’s response to our piece Is the Fed Going to Initiate A Controlled Collapse with interest. He called our piece “complete silliness” and then attempted to deconstruct our logic with this silliness: Mish wrote: Does the Fed know the difference between an asset bubble and my mom’s tuna casserole? Does the Fed know the […]

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What would mainstream economists have advised Bernie Madoff to do?

Just over two weeks ago, Bernie Madoff’s accountant finally plead guilty to fraud after six years of defending himself. He was sentenced to 30 years in prison at the age of 78. While he admits to falsifying records, to this day he claims he had no idea that Madoff was running a ponzi scheme. The prosecution has called […]

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Is the Fed going to attempt a controlled collapse?

As most Fed watchers know, last week was interesting because Janet Yellen, speaking at IMF came out and said something quite surprising.  In a nutshell, she said “It’s not the Fed’s job to pop bubbles”.   While many market participants immediately took this to mean, “To the moon, Alice!” and started buying equities hand over fist, there’s […]

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European Bank Kabuki Preview: Spoiler alert!

European banks are bracing themselves for another slap on the wrist and stern language, as the next round of sham “stress tests” begins.   We’re not quite sure who exactly is stressed, but our inkling is that it should be the taxpayers.  Thankfully, the ECB is hoping to avoid actually penalizing any banks by “prepping” them for the […]

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