Fictional Reserve Barking invites Keynes and Godley  to Dinner 

Fictional Reserve Barking (FRB), not yet completed its first anniversary from inception, has assumed the role of one of the most daring commentaries on national and international political and economic policy on the B-sphere. Admittedly sympathetic to post keynesian monetary theory, FRB has again challenged the reasonableness and timeliness of everyman's expectation that Central Bankers cause and hence should solve all the problems of Government and Public Finance. In its December 31, 2011 issue, FRB has demonstrated again why it is considered a must and best read for economic policymakers and pundits alike. Never faltering from its underlying prescriptive mission, FRB continuously substantiates the empirical legitimacy of its optics, realigning and calibrating vision as the facts require, but never wavering on the paradigm invoked.

To say that Fictional Reserve Barking and its prolific author Circuit, is merely a keynesian sounding board is to demean the intellectual prowess of its endeavor. To even suggest is to stunt the brilliant insights that Circuit and moreso the FRB's Wall of Fame profess. And Wall of Fame it is! Among the cherished heritage FRB preserves and promotes, one finds classic Keynes, Galbraith, Godley in continuous medley with such contemporary classicists Lavoie, Seccareccia, Volcker, Bernanke, Wolf, Wray, Krugman, Mosler, Lerner,  the BIS. Never admonishing, always respectful, FRB is a classical Podium of Great Policy in the making.

As one of its readers noted a while back, FRB never assumes as own the merit of others: it is by far the most serious and integral online conversation in political economy in the language, similar to Martin Wolf of the Financial Times for both scope and depth, and come the day, as notorious.

You may not agree with the script , but you never move on offended. Accessing FRB is like sitting back for a brilliant and enjoyable conversation over the dull-made-glamorous. There was a time when accountants and investment bankers were boring. Then they became glamorous-pin-up persons for the young and ambitious. History has shown them rich yet infamous and forever dull. FRB makes policymakers, economists and central bankers the new pin-ups: exciting, audacious, bright and magnanimous when they have courage, but not necessarily rich. Therein lies the rub! or is it the crux?

The latest FRB commentary on the role of the Bank of Canada in defining economic policy and delimiting monetary responsibility from fiscal initiatives, and then going on to analyze the impact of deficit spending on household and business investment is a superb application of Godley's sectoral balance to Canadian political economy and the planning process for 2012 Canadian public finance.

Take the time to savor the latest Classic on Carney, Household Debt, Bank of Canada and Government spending:

It'll change the way you look at economic policy.

Happy New Year.

Black Monday? No. A BLACK WEEK!!

A regular reader to my favorite webpage FRB or Fictional Reserve Barking commented after a polemic that a squall is coming the likes of which we had never seen. The structure of that phrase clicked a neuron and plucked a memory chord. I'm still trying to figure out where I heard or saw it, and it keeps on slipping. This morning's opening on Wall Street affects in a like manner. Deja vu! but I can't remember when or where. Was I young or was it more recent? In any case, for the pundits that ponder their stats looking for a pattern, this time around there is no precedent from the regressions. It's the Mule breaking out the maths: the coeffcient of error that can't be contained systemically. There are only two players that can restrain the overflow, contain the explosion and both are trading partners, both have their own tensions and both are in search of an author.

One snickers listening to Mr. Cameron highlighting some punctual anomaly in the economic figures just released. It's unreal to finger out the semblance of sunlight amidst a hurricane. That's it, the phrase comes from Dune-the book and the movie!!! It's a variant in a dialogue when the Fremen note a 'wormsign'...

Well, Monday won't be Black, it'll be bleak. Losses will range between 250-325pts. Treasuries will gain and most commodities will fall. Gold, it should fall (except for those that see a backstop international standard on the horizon). Tuesday, some profit at the beginning of the day and then for another 'swerve...towards the bend of bay'. Wednesday figures will be mixed and by the end of this week, Wall Street will be flattening out with losses between 750-800 points, unless the FOMC minutes reveal some silver lining. There will be no Thanksgiving for most investors; there will be one for those holding CASH.

CASH is King!! and whether you like the sound or not, the USD is the only currency worth its logo. I guess there's something providential underscoring the dictum.

The Week will be Black!!!

 In Memoriam:Steve Jobs







                                           Steve Jobs

                                                  Promethean 

                                                   1955-2011

                                              

       Conceiving the Unbelievable, and Delivering it to the World

                                                         with

                                      Courage and Compassion 

                                          One of Two no Third

Credit to Fictional Reserve Barking for the last line 

Market Analysts and Managers Irresponsible 

There's an argument circulating through the marketplace that Chair Bernanke was irresponsible by suggesting  that

there are significant downside risks to the economic outlook, including strains in global financial markets

Supposedly, the Federal Reserve made a mistake by evoking the above, and should restrain its judgement on economic conditions that affect monetary policy. Avowed is the delicately obtuse cynicism that for market analysts, managers and strategists to properly advise their clients, the Fed should be silent and keep the public ignorant of matters that affect the public's respective wealth and future. Disclosure of pertinent content is the investment manager's discretion, seems to be the underscored presumption.

It can only be a relief that some men like Chair Ben Bernanke are still around and that they have the required courage to tell it as it is. As if no one ever knew that there was an economic maelstrom, or squall as my favorite columnist and commentators from Fictional Reserve Barking characterize it, evolving on globalscapes.

Fellas, give yourselves a break. The majority of you are certainly confused, and justly so.  Consider, since when do the analysts, strategists and managers dictate appropriate communication guidelines. Basic deontology suggests that these advisors have a responsibility to seek out relevant data and give comprehensive information that will permit the client to respond appropriately to the situation.

Moreover, when the public buys and owns stocks or corporates bonds the public are shareholders and stakeholders in those companies.  The public has the right to know whether there's exposure to risk out there. It is not the discretion of the advisor to weigh the call on disclosure or not. Get real guys!

A  lot of people would never have received the floats if Mr. Bernanke had not sounded the warning of the imminent squall. Maybe some of the public were in those sell-offs. Good for them, if that was best for their visions.

One should be very pleased that individual Chair Bernanke and institutions like the Federal Reserve are unconstrained by political considerations, originating in Washington or New York. One also hopes that most cynics and whiners get canned under the circumstances not for ill-advising clients but for suggesting that the Federal Reserve had no reason to come out with their caution. That is professionally unethical. The narrative certainly makes a case for passing the buck for their own incompetence and lack of market insight. It certainly translates into a good show; but it should not be produced at the expense of the public.