Some thoughts on China blasting a Congressional Report

Here is what drives me nuts about international politics and politics in general: there doesn’t seem to be any no real, genuine, honest discussion between parties. Maybe behind closed doors, though there doesn’t seem to be evidence of it. If so, the people of the world are apparently deemed too stupid to handle the truth. Perhaps they are? Regardless, here is another example of blatant hypocrisy and lying.

BitCoin: Can this work?

A reader of The Long Run Blog sent Brett an email asking what he thought about a site called BitCoin. His question:

I know you’all aren’t software engineers (I am), so you can’t comment on whether or not the underlying cryptography that makes Bitcoin work is solid (it is, as far as I can tell). But I would be curious to know what you think of the general idea: could a currency not backed by a government take off? What do you think of Bitcoin’s economic design (21million bitcoins total, created over the next 100 or so years, with more created in earlier years)?

America’s Top Financial Planners Part II

I just received another solicitation from SLD! Not only was it the same deceptive promotion, but I noticed another trick. In order to get advisers to open the mail, the return address reads “State License Documentation”. Now, any adviser will tell you that mail which appears from any regulatory body is opened immediately. Impersonating a regulator, sleazy indeed.

COTD: Curious Reaction to QE2

The Fed’s big announcement yesterday has been dubbed “QE2” which short for “quantitative easing part II”. QE is Fed-speak for monetizing the national debt, otherwise known as “printing money”. It is not actually equivalent to printing money, at least until the program becomes permanent. But this post is not about the implications of QE. Rather it is about the strange trading activity around the announcement.

You see, QE2 has been rumored, floated, leaked, discussed, debated and reported on since before Labor Day. That the Fed was planning some quantitative easing was confirmed and well known before the actual announcement. Thus the only thing “new” in the announcement was the exact dollar size of the program, the exact timing and the wording of the Fed’s intensions. Even here, the size of the program was pretty well known by Wall Street. So, the financial markets expected this event with stronger than usual conviction in what it would entail. In fact, “everyone” claimed that QE2 was already “baked in to” expectations with traders having positioned themselves well ahead of the actual announcement.

Instead of a yawn, we got incredible volatility in yields. Bond yields typically don’t move much in one day’s trading session, but yields moved a week’s worth in just a few minutes. Why the surprise? To make matters even more interesting, that spike in yields reversed entirely and fell even further at today’s opening. I’m puzzled as to why the violent trading reaction took place. Have a look: