Abby Joseph Cohen on the stop and go economy

It looks to us as if the economy is growing more slowly than it was at the beginning of the year but we just don't see the preconditions for double-dip. So, our judgment is real GDP growth of about 1.5% for the next several months, followed by re-acceleration.

~Abby Joseph Cohen, president and senior investment strategist of Global Markets Institute, Goldman Sachs, CNBC, October 4th, 2010

Brian Belski on the transitioning secular market

The premise is that stocks lead earnings which lead the economy. I think we're in the process of a transition from a secular bear market in equities to a secular bull market in equities.

~Brian Belski, chief investment strategist, Oppenheimer & Co., CNBC Asia, October 19th, 2010

Rick Santelli on the noble purpose of the Fed

I'm not going to stand here and tell you I think the Fed ought to be disbanded but I certainly think there's some middle ground between how far they've extended into the gray versus disbanding them. There's got to be something in the middle that makes more sense. I personally think this Fed's heart is in the right place but they're out of control in terms of trying to accomplish what their noble purpose is.

~Rick Santelli, CNBC's Squawk Box, October 28th, 2010

Independent Senate Candidate Warren Mosler Bets $100M Federal Government Can Not Run Out Of Money

I am running for U.S. Senate to see my policies implemented to create the 20 million jobs we need. And to do this it must be understood that there is simply no such thing as the U.S. Federal government running out of money, nor is the Federal government operationally dependent on borrowing from China or anyone else. U.S. states, individuals, and companies can indeed become insolvent, but U.S. government checks will never bounce.

Yes, large Federal deficits that push the economy beyond the point of full employment can lead to inflation or currency devaluation, but not bankruptcy and not bounced checks. If lawmakers today understood this fact, they would not be looking to cut Social Security and we would not still be mired in this disastrous recession.

~Warren Mosler, Connecticut Independent candidate for US Senate, "Senate Candidate Bets Congress $100 Million That the U.S. Government Cannot Run out of Money", BusinessWire.com, October 23rd, 2010

VP Joe Biden on the $814B stimulus package

It’s the best-run federal program there’s ever been.

~ Joe Biden, US Vice President, Bloomberg.com, October 22nd, 2010

Fed chief Richard Fisher on why QE1 failed to stimulate an economic recovery

The vexing question is: Why isn’t this liquidity being utilized to hire new workers and reduce unemployment? Why is it that, as pointed out in Alan Greenspan’s op-ed in the Oct. 7 edition of the Financial Times, the share of liquid cash flow allocated to long-term fixed asset investment has fallen to its lowest level in the 58 years for which data are available? If current dramatically high levels of liquidity and low interest rates are not being harnessed to add to payrolls or expand capital expenditures, would driving interest rates further down and adding more liquidity to the system through Fed purchases of Treasury securities induce U.S. businesses and consumers to get on with spending it?

The intrepid theoretical economist would argue in the affirmative, the logic being that there is a tipping point at which the market becomes convinced that money held in reserve earning negligible returns is at risk of being debased through some inflation and, thus, should be spent rather than hoarded. Hence, the appeal of the Fed’s showing a little leg of inflationary permissiveness.

There is some valid theory behind this approach. Yet, my soundings among those who actually do the work of creating sustainable jobs and making productive capital investments―private businesses, big and small―indicate that few are willing to commit to expanding U.S. payrolls or to undertaking significant commitments to expand capital expenditures in the U.S. other than in areas that enhance the productivity of the current workforce. Without exception, all the business leaders I interview cite nonmonetary issues―fiscal policy and regulatory constraints or, worse, uncertainty going forward―and better opportunities for earning a return on investment elsewhere as factors inhibiting their willingness to commit to expansion in the U.S. As the CEO of one medium-size business put it to me shortly before the last FOMC, “Part of it is uncertainty: We just don’t know what the new regulations [sic] like health care are going to cost and what the new rules will be. Part of it is certainty: We know that taxes are eventually going to have to increase to get us out of the fiscal hole Republicans and Democrats alike have dug for us, and we know that regulatory intervention will be getting more intense.” Small wonder that most business leaders I survey, including those at small businesses, remain fixated on driving productivity and lowering costs, budgeting to “get fewer people to wear more hats.” Tax and regulatory uncertainty―combined with a now well-inculcated culture of driving all resources, including labor, to their most productive use at least cost―does not bode well for a rapid diminution of unemployment and the concomitant expansion of demand.

So, it is indeed true that some economic theories would lead one to believe we can shake job creation from the trees if we were to further expand our balance sheet, and/or induce greater final demand if people and businesses with money in their pockets believe the central bank will tolerate inflation somewhat “above” levels consistent with our mandate. Yet, to paraphrase the early 20th century progressive Clarence Day―the once-ubiquitous contributor to my favorite magazine, The New Yorker―“Too many (theorists) begin with a dislike of reality.” The reality of fiscal and regulatory policy inhibiting the transmission mechanism of monetary policy is most definitely present and is vexing to monetary policy makers. It is indisputably a significant factor holding back the economic recovery.


~ Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas, "Rangers, Yankees and Federal Open Market Committee: One Game at a Time", Remarks before the New York Association for Business Economics, New York, NY, October 19th, 2010

Armored Wolf hedgefund director dispels the currency war "myth"

The phrase is used by those who think the world is ruled by an intellectual consensus among the elites, but it’s not that complicated. The idea in a post-Bretton Woods world is variable [currency] exchanges. It’s ludicrous to talk about manipulation.

~ John Brynjolfsson, managing director, Armored Wolf, "Brynjolfsson bets on inflation, sees gold at $2,000", MarketWatch.com, October 21st, 2010