Bruce Krasting's Blog

Bkrasting [at] gmail [dot] com ()

I worked on Wall Street for twenty five years. This blog is my take on the financial issues of the day. I was an FX trader during the early days of the 'snake' and the EMS. Derivatives on currencies were new then. I was part of that. That was with Citi. Later I worked for Drexel and got to understand a bit about balance sheet structure and corporate bonds from Mike Milken. I was involved with a Macro hedge fund later. That worked out all right, but it is not an easy road. There was one tough week and I thought, "Maybe I should do something else for a year or two." That was fifteen years ago. I love the markets. How they weave together. For twenty five years I woke up thinking, "What am I going to do today to make some money in the market". I don't do that any longer. But I miss it.

Results of this Weekend’s G-20 Meeting Could be Huge for the Market

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Europe is cracking up (again), and the IMF and big guns of the G-20 will spout about “expanded firewalls” and “global co-ordination” in the final communique Sunday evening. If we don’t get a big dose of “happy talk” then the markets will crap out.

Betting on the Race to the Bottom

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On Monday and Tuesday the market’s attention will be on the USA and the negative economic implications of the Nonfarm payroll (NFP) miss. Market eyes will also be focused on the bond markets in Italy and Spain.

Bernanke - I’m Slowing Down the Ship

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I’m not surprised. Bernanke understands that upping the anti with more QE would send the price of crude through the roof. The deflationary effect on the consumer economy of another dollar increase for gas would far outweigh any positive consequences that another LSAP would have produced.

Bernanke Leaks, Spoils the Punch

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Jon Hilsenrath, at the WSJ, must have had a phone call with Ben Bernanke on Saturday. Accordingly, Jon put an article out just in time to influence the market on Monday morning.

On Israel and Iran

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A very big question mark hanging over the global table is what is going to happen between Iran and Israel. I spoke with a fellow in Europe I know who has an informed opinion. There were no secrets discussed, but his thoughts on some of the variables including Syria, bunker bombs and timing were interesting.

Remaking the Mistakes of the Great Depression

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Ben Bernanke has said many times that Marriner Eccles, the head of the Federal Reserve in 1936/37 made a mistake by tightening credit (raising reserve requirements). Bernanke blames Eccles’s actions for the 50% stock market collapse in 1937 and the second leg of the depression that followed.

Bernanke Talks His Book, Omits Key Information from Testimony

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Bernanke’s testimony to the House last week and to the Senate yesterday held no surprises. Ben has promised to maintain monetary policy at DEFCON 4 levels for as far into the future as we can see.

CBO: Take Away All Tax Breaks

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As of today, there is an economic firestorm that is programmed to hit on January 1, 2013. It’s the kitchen sink - the Bush tax cuts (all of them), the payroll tax cuts, the AMT patch, the ending of extended unemployment benefits, the Sequestered Amounts (11’ budget deal), the debt ceiling, the need to pass a continuing resolution to fund the government and a bunch of other landmines.

CBO Report - OMG!

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The Congregational Budget Office (CBO) is out with its annual report. It’s a blockbuster. This 165 page monster is filled with dozens of charts, graphs and detailed projections. It will be talked about for weeks. The report provides a dismal outlook for the economy. There is one data point I'd like to focus on.

Bernanke Goes All In

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Well, we got an inflation target from the Fed. Basically, thinking at the Fed has been eliminated. The process has been automated. Bernanke has convinced the Fed board to adopt Core PCE as a determinate of monetary policy. So long as CPCE stays below 2%, Ben is going to have his foot planted on the monetary metal.

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