The Institutional Risk Analyst

Xi Jinping in China and Putin in Russia have turned their backs on the global economy to retain power

If you consider QE “stimulus” inflationary, then Fed policy actually accelerated inflation in the November-January period.

Amidst the yelling and screaming of Elizabeth Warren, we suspect that Jay Powell will survive the crisis

When Treasury market yields trade and stay negative, look for the Federal Reserve Board to come to the rescue of MM funds and banks.

Banks and the Fed's Duration Trap

The Yellen Put & Market Risk

Last week financials continued their relentless march toward the sky as investors chased the happy prospect of higher interest rates from the Federal Open Market Committee and maybe even tax cuts from Congress. In a world with too much debt and regulation, and too little economic growth as a result, driving financials (and all other asset classes) up to valuations not seen since the roaring 2000s is a fool’s errand, especially when you notice that credit spreads remain large

In this issue, The Institutional Risk Analyst looks at the most recent bank portfolio data from the Federal Deposit Insurance Corp for Q2 2017 to see what it says about asset prices and inflation. For some quarters now, the credit statistics for the $16 trillion asset banking system has been too good to be true, in some cases suggesting that credit events have no cost. The last time that this circumstances existed was the mid-2000s, when several large mortgage banks were re

In fact, since WWII home prices in the US have gone up four times the official inflation rate. “Houses weren't always this expensive,” notes CNBC. “In 1940, the median home value in the U.S. was just $2,938. In 1980, it was $47,200, and by 2000, it had risen to $119,600. Even adjusted for inflation, the median home price in 1940 would only have been $30,600 in 2000 dollars, according to data from the U.S. Census.”

"[F]rom early spring throughout 2009 and until mid-year 2010, the Fed engaged in the first major quantitative easing program of purchases of government agency debt and agency-guaranteed mortgage-backed securities. The Fed’s purchases reached a cumulative total of $1.285 trillion, and excess reserves reached nearly $1 trillion. Essentially, the new reserves provided by the purchases program enabled the banking system to fund the repayment of about $1 trillion of various forms

April 6, 2017 | JPMorgan (JPM) boss Jamie Dimon says there’s something wrong with the US economy and he is obviously right. Here’s our short list: * too much public and private debt * too little income and growth * monopolies in banking and other industries * oppressive regulation for all businesses * political muddle and lack of national purpose * confused, irrational monetary policy A couple of weeks before Mr. Dimon was waxing effusive on the state of the American pol

David Einhorn of Greenlight Capital recently proposed that General Motors (NYSE:GM) divide its common equity into two parts, one that pays a dividend and another that captures the appreciation potential of the automaker. This is a demonstrably bad idea from one of the smarter people on Wall Street, thus we ask: What Is David’s game?