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John M. Mason

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  • There Is Virtually No Demand For Bank Reserves [View article]
    When so much money is "kicking around" some of it is going to leak out into asset prices. As asset prices rise more money is attracted into these markets which drive up asset prices even more...hence a bubble is formed. Primarily when funds start chasing prices in asset markets (like commodities, houses, stocks), not in "flow" markets (like the purchase of consumer goods).

    The production of more consumer goods leads to more employment. The purchase of an existing house leads to little or no reduction in unemployment.

    Hope this helps a little.

    Oct 1, 2012. 04:01 PM | 4 Likes Like |Link to Comment
  • There Is Virtually No Demand For Bank Reserves [View article]

    Money has been cheap ever since late 2009. No argument. That is why people have been moving money out of money funds, etc., and putting the funds into demand deposits for the past three years or so. Nothing new here.

    Bubbles are created when people move funds around to take advantage of price increases in housing, commodities, stocks, and foreign exchange. The funds pass by productive uses and move right into asset markets. Given the current electronic funds technology, funds can move from here to there and create bubbles and do it in real time.

    I don't believe the bubble in housing in the 2000s was a case of resource depletion.

    There was a small bubble earlier last year as the price of natural gas moved down below $2.00 in March, April and May this year. It is now back up to more than $3.00.

    The increase in bank lending is primarily in the largest 25 banks and not the other 5,750 or so banks. Most of this lending is not going into the production of goods.

    All I care about the money stock measures is how people are moving funds from one type of asset to another. I don't really care what the definition of money is. I know what demand deposits are and time and savings accounts and so forth. Tracking where people are putting there money is important.

    Hope these responses answer some of your questions.
    Oct 1, 2012. 03:56 PM | 4 Likes Like |Link to Comment
  • Mr. Bernanke Has It Wrong [View article]
    Bernanke can remain at the Fed for the remainder of his term...but a new president can appoint another member of the Board as the Chairman.
    Aug 31, 2012. 08:04 PM | 4 Likes Like |Link to Comment
  • The Fed: Never Have I Seen Such Inadequate Leadership [View article]
    Hey, guys, this post is about the ability of the Fed to communicate.
    Mr. Bernanke has put four press conferences on the schedule to help clearify Federal Reserve policy.
    Testimony in front of Congress, speeches, board minutes, and appearing on 60 minutes are apparently not sufficient to explain what the Fed is doing.
    To me, there seems to be a big disconnect between what is coming out of the mouth and what we are seeing in the statistics.
    As my friends say, "watch the hips, not the lips."
    The concern is that there is something else going on that the Fed (and the FDIC) doesn't want to comment on.
    That leaves one to think that something must be really wrong if they don't want to talk about it.
    But, then, "Loose lips, sink ships!"
    Mar 25, 2011. 02:33 PM | 4 Likes Like |Link to Comment
  • Should Bernanke Be Reappointed? [View article]
    Mr. Thoma writes: "Here's the question I ask myself. If I were to suddenly come down with the same disease, would I want the current group with its current leadership in charge of bringing me back to health, or would I want a different group led by someone new who thinks they know what to do, but has never actually been through it? I'd want this group, the one with experience."

    I remember listening to many thrift managements taking their institutions public in the 1980s telling potential investors..."Give me tens of millions of dollars to run my thrift institution. Sure, I was the one that got it into the mess it is in, but I have learned from my experience!"

    What did Barnum say?
    Jul 27, 2009. 08:35 AM | 4 Likes Like |Link to Comment
  • A First Interview: Microsoft's Satya Nadella [View article]
    I agree, management is not in charge of the stock price.
    Management is only in charge of its actions.
    Investors place value on what the management does.
    From the summer of 2000 until the current time...Microsoft stock price has basically remained constant.
    For thirteen years, investors have concluded that Microsoft management has not been adding any more value to the company than what existed in the summer of 2000.
    This is the grade that the investment community has given Microsoft...
    The management of Microsoft over this time period took the test...the market did not think that it did very well.
    Feb 22, 2014. 01:43 PM | 3 Likes Like |Link to Comment
  • China The Impressive: A Personal View [View article]
    Thanks for the comment.

    China believes in stability. I don't believe that they will turn the yuan free. Hence it will change modestly over time with government adjustments from time-to-time. That said, the US $ will continue to decline against most major currencies.
    May 28, 2013. 12:00 PM | 3 Likes Like |Link to Comment
  • The Federal Reserve: A Scenario For Raising Short-Term Interest Rates [View article]
    All I meant was that as the Fed reduces the size of its balance sheet, this will reduce the supply of funds in the money market and this should put upward pressure on short-term interest rates.

    I have no problem with your substituting "unprecedented" for "extreme" and the rest of your comment.


    Nov 3, 2014. 08:25 AM | 2 Likes Like |Link to Comment
  • Mr. Nadella Makes His First Major Move At Microsoft [View article]
    Tell that to Mr. Ballmer! Maybe that's why he is not CEO anymore.
    Jul 17, 2014. 03:00 PM | 2 Likes Like |Link to Comment
  • General Electric And Alstom And Jeff Immelt [View article]
    Thanks for the heads-up...the change has been made.
    May 2, 2014. 09:32 AM | 2 Likes Like |Link to Comment
  • Bond Market Bubble? [View article]
    User 447425:

    I have only argued that the Fed may have a concern over the health of the banking system and this is just one more reason for the QE although they have not explicitly stated it. The banking system is still losing around 200 commercial banks a year. My reasoning is that QE allows the FDIC to arrange for solutions other than that of closing a bank. We are still getting bank closings but more and more banks are now leaving the banking system thorough being acquired. The Fed does not want "these banks to fail all of a sudden" hence it provides sufficient liquidity to allow the FDIC to "smoothly" shrink the banking system.
    If interest rates go up too rapidly, this game plan will be in jeopardy.
    So, there are several reasons, spoken and unspoken, for keeping QE going.
    I believe that this is very intentional on the part of the Fed.
    Nov 15, 2013. 12:10 PM | 2 Likes Like |Link to Comment
  • Europe A Major Factor In Higher Treasury Bond Yields [View article]

    Yes, it is time to taper...

    Aug 9, 2013. 04:43 AM | 2 Likes Like |Link to Comment
  • The New GDP Numbers And What They Tell Us [View article]

    Thanks for your "hearty" agreement this time around. Nice to be on the same page on this issue.

    I always enjoy and appreciate your comments.

    Jul 31, 2013. 06:23 PM | 2 Likes Like |Link to Comment
  • The Federal Reserve Loses Its Cool [View article]
    You obviously have not read my blogposts. Furthermore, full disclosure, the guy I voted for in the past two elections is the guy that now lives in the White House. A "Republican" is not the worst thing I have ever been called. Being called a"conservative" is much worse!
    Jun 28, 2013. 12:21 PM | 2 Likes Like |Link to Comment
  • The Federal Reserve Loses Its Cool [View article]
    Maybe Ben created many of the problems. Maybe Ben is "tone deaf" when it comes to reading the financial markets. Maybe one learns to create a monetary policy called " throw all the 's--t' you can against the wall" from reading books on the Great Depression.
    I understand that Ben was a very good Chairman of the Princeton economics department. At least President Obama can correctly argue..."well, he was a Republican, after all."
    Jun 28, 2013. 11:14 AM | 2 Likes Like |Link to Comment