Author Archives: Matt Busigin

Say ‘Good-bye!’ to the “New Normal”

“Secular Stagnation.” “The New Normal.”. “The New Neutral.” “Lower for Longer.” These are the phrases which have been used to characterize the U.S. economic situation, and by proxy, interest rates. The thinking is both reactionary and rational: the after-math of the … Continue reading

Posted in Uncategorized | 7 Comments

Only Bernanke knew Oil is not inflation

In April of 2011, Ben Bernanke was universally lambasted and lampooned for claiming that inflation, which was accelerating and running above 3%, was “transitory”. He used this view to justify loosening monetary policy. The next few months of CPI were not … Continue reading

Posted in Uncategorized | 3 Comments

Why do the Japanese want growth?

It seems to be a universal truth that growth is good. There almost can be no bad growth. But what exactly is the purpose of growth, and why do we want it? Instead of viewing economic growth as the objective, … Continue reading

Posted in Uncategorized | 4 Comments

Why do stock markets crash?

With the S&P 500 off 5% from all-time highs, and the 10-day volatility in the 87th percentile, some observers are anticipating a 1987-style market correction. In this piece, we analyze the conditions that presaged prior violent corrections. Starting with what the … Continue reading

Posted in Uncategorized | 13 Comments

Dear Ms Yellen: Raise the inflation target

Dear Ms Yellen: Congratulations on both your appointment as well as becoming the first woman to head the Federal Reserve. This will potentially make you, at times, the most powerful and important person in the world. We are more alike … Continue reading

Posted in Uncategorized | 2 Comments

Estimating the impact of monetary policy normalisation on assets

A New Age of Policy Transparency The Federal Reserve, beginning in 2011, began a new era of transparency that began with the publishing of economic and monetary policy projections from Open Market Committee members.  Along with projections for unemployment and GDP, they … Continue reading

Posted in Uncategorized | Leave a comment

Will this be a lost decade for profits?

On Memorial Day this year, we lost our best friend, Godiva.  This piece is dedicated to the wonderful memories she gave us. It seems absurd to consider that 2013-2023 will be a decade of lost profits when they have grown … Continue reading

Posted in Uncategorized | 2 Comments

Unemployment in the Age of Capital Abundance

I – The Nominal and the Real In economics, there are two kinds of problems:  real problems and nominal problems. The deforestation on Easter Island destroyed most of the Rapa Nui.  When it was necessary to leave the island and … Continue reading

Posted in Uncategorized | 9 Comments

The Three Types of Marginal Capital Allocation

As we discovered before, the marginal decision on cashflow re-allocation drives cyclicality. There are principally three types of capital allocation transactions. If you are expanding capital stock, or you are funding the expansion of capital stock, you are investing.  This … Continue reading

Posted in Uncategorized | 4 Comments

The State of Rentierism

Interest in rentierism has begun to percolate in the last few years.  I propose a framework for analysing and discussing the modern state of rentierism in the terms of behaviours, incentives and empirical impact on the economy. Both the capitalist and … Continue reading

Posted in Uncategorized | 5 Comments