Submitted by CARPE DIEM

WASHINGTON - The Supreme Court on Monday (December 10) said judges may impose shorter prison terms for crack cocaine crimes, enhancing judicial discretion to reduce the disparity between sentences for crack and cocaine powder.
WASHINGTON — The U.S. Sentencing Commission voted unanimously Tuesday (December 11) to allow some 19,500 federal prison inmates, […]

continue reading.....

Submitted by CARPE DIEM

From the Minneapolis Fed’s interview with University of Chicago economist Eugene Fama (pictured above):
Fama’s work transformed Wall Street, and later Main Street, by giving rise to a proliferation of low-cost index funds, as many questioned the value of paying for active portfolio management. “If one takes into account the higher initial loading […]

continue reading.....

Submitted by CARPE DIEM

“Inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output.”
~Milton Friedman in his book “Monetary History of the United States 1867-1960,” (co-authored with Anna Schwartz)
Exhibit A: See chart above, click to enlarge. Monthly […]

continue reading.....

Submitted by CARPE DIEM

The top chart above (click to enlarge), shows the one-year percentage forward premiums and discounts for the USD vs. other currencies, based on current quotes for one-year forward exchange rates. The USD is now selling at a one-year forward premium vs. at least a dozen currencies, suggesting that the value of the […]

continue reading.....

Submitted by CARPE DIEM
Challenge: If taxes increases for “the rich” are a good thing, members of Congress and presidential candidates (all part of either “the rich” or “super-rich”) don’t have wait for the Bush tax cuts to expire or for Congress to pass new tax legislation, they can immediately raise taxes on themselves voluntarily by […]

continue reading.....

Submitted by CARPE DIEM
Update: I’ll be appearing on Larry Kudlow’s radio program this morning (Saturday), you can listen live here at WABC, should be between 10:30 a.m. and 11 a.m. EST.
Stumble It! • Digg This! • Reddit!
Visit 1800blogger to see all of our industry leading blogs.

Rating 3.00 out of 5

[?]

continue reading.....

Submitted by CARPE DIEM

The graph above shows that the M1 money supply has been flat for three years, and is actually lower now than it was a year ago, suggesting that Fed policy has been TOO TIGHT.
See previous post where I suggested that the Fed Funds rate should be about 3-3.25%.
Stumble It! • Digg […]

continue reading.....

Submitted by CARPE DIEM

Inflation vs. M1 Growth with a 3-year Lag

The top chart above (click to enlarge) shows the relationship between M1 Money Supply and the effective Fed Funds rate from 1999-2007. Notice that there was a 25% increase in M1 that was required to get the Fed Funds rate to fall from 6.5% in […]

continue reading.....

Submitted by CARPE DIEM

Tune in to CNBC’s “Kudlow and Company” on Monday night (7 p.m. EST) for an economic smackdown between Robert Reich, former labor secretary under Clinton, and free-market Austrian economist Mark Skousen, on the question, “What drives the economy–consumer spending or business investment?” It should be an interesting debate between a demand-side Keynesian […]

continue reading.....

Submitted by A Dash of Insight
After posting our own analysis of the Fed’s approach to liquidity issues, we found this article by Stephen Cecchetti. Should you read this?
It all depends upon how you feel about the source. If you think that someone who has a PhD from Berkeley, holds an endowed chair at […]

continue reading.....

Submitted by A Dash of Insight
How the world has changed! Marty Zweig’s 1986 book, Winning on Wall Street, gained a lot of popularity after he famously called the market crash of 1987. One of the most noted Zweig precepts was the following:

Don’t Fight the Fed!
What has […]

continue reading.....

Submitted by EconWeekly
A YouTube video is worth more than a thousand words. The website of the National Association of Theatre Owners, the other NATO, greets its visitors with an animated feature of theater food singing “Let’s all go to the lobby to get ourselves a treat.” (Watch it below.) No MGM lion or flashy presentation […]

continue reading.....

Submitted by Econbrowser
An interesting trend has developed in the Federal Reserve’s asset holdings, a trend that the newly created term auction facility is designed to accelerate.
The Fed seems to have become in some people’s minds an institution with immense and mysterious abilities to solve all our current economic problems. But we should not forget that […]

continue reading.....