I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Thursday, October 22, 2009

PSW: Interview with Jesse at the Café Américain

Here is a new post by ilene from Phil's Stock World

Interview with Jesse at the Café Américain

This is a fantastic interview, I highly recommend reading it. Here is an excerpt:

"... I had started to study bubbles and crashes in 1998. One of the benefits of traveling for business is that one can become a voracious reader, and so I read quite a few books on bubbles and crashes to supplement what I already had known.

In 2000 I discovered the world of financial chat boards. It was interesting to find a group of people who also did not believe in ‘the bubble.’ This was a chat board at a place online called ‘Fall Street.’ I had been studying technical charting for some time, and looked into most of the methods. I liked the classic charting method, and gained quite a bit of knowledge from Ken Shaleen. I found my own style of charting with what I called ‘the Babson method’ which had been used by the economist, Roger Babson. ...

... It is always difficult to forecast the short term direction of the US equity and bond markets, but it is especially so now because the Fed and Treasury have provided unprecedented amounts of liquidity to a relatively small number of Wall Street banks. The Fed is openly monetizing debt, and buying the long end of the curve! Because of the way in which rescue has been structured, the banks have little or no incentive to lend the money to commercial interests, but have plenty of incentive to chase beta by speculating in the markets.

The government and associated pundits and analysts also have an incentive to see the bond and equity markets rally because this is viewed as a ‘good sign,’ a way for the economy to rebound and carry the US past its financial crisis and the collapsing credit bubble.

Without a reform of the financial system and a rebalancing of the economy there can be no sustained recovery. The Fed and Treasury are debasing the dollar in the hopes of masking their past policy errors. This is shaking the global currency regime which has been in place since World War II to its foundations. ..."

Jesse's Café Américain - Ilene
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