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ECB's failure in one graph
Cognitive dissonance in politics, markets and monetary policy

Cognitive dissonance in politics, markets and monetary policy

For a while I have wanted to write something about what psychologists call “cognitive dissonance”. The way I think about cognitive dissonance is that individuals tend to look for confirmation of their already held views.

Celebrating Friedman and Hetzel

Celebrating Friedman and Hetzel

Today Milton Friedman would have turned 102 years. Happy birthday Uncle Milty!

Lars's Law - I blame the ECB

Lars's Law - I blame the ECB

My colleague Arne Rasmussen put it well in a comment on Facebook today:

European central bankers are obsessing about everything else than monetary policy

European central bankers are obsessing about everything else than monetary policy

While it is becoming increasingly clear that Europe is falling into a Japanese style deflationary trap European central bankers continue to refuse to talk about the need for monetary easing to curb deflationary pressures. Instead they seem to be focused on everything else. We have been through it all – the ECB has concerned itself with who was Prime Minister in Greece and Italy about Spanish fiscal policy, rising oil prices in 2011 and about “financial stability”. And believe it or not it has become fashionable for European central bankers to call for higher wages in Germany!

The stock market has reached "a permanently high plateau" (if the Fed does not mess up again...)

The stock market has reached "a permanently high plateau" (if the Fed does not mess up again...)

Last week I wrote a post criticizing Fed chair Janet Yellen for apparently becoming a "stock picker". Later later in the week she spoke before the US House Financial Services Committee in Washington she seemed to tone down a bit her "stock picking" comments, but she nonetheless commented on the general valuation of the US stock market.

Stock picker Janet Yellen

Stock picker Janet Yellen

If you are looking for a new stock broker look no further! This is Fed chair Janet Yellen at her testimony in the US Senate yesterday:

Never reason from a price change - version #436552

Never reason from a price change - version #436552

This is ECB's chief economist Peter Praet in an interview with Les Echos:

The un-anchoring of inflation expectations - 1970s style monetary policy, but now with deflation

The un-anchoring of inflation expectations - 1970s style monetary policy, but now with deflation

In country after country it is now becoming clear that we are heading for outright deflation. This is particularly the case in Europe - both inside and outside the euro area - where most central banks are failing to keep inflation close to their own announced inflation targets.

Hollande's Danish spectacles - Is France the next trouble spot in the euro zone?

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