Gloves off on Federal Reserve Intervention … “Hitting a Skunk with a Tennis Racket” …. That Skunk is a Nobel Laureate

Here is how the big boys fight … Not with fist punches, but public  jabs  … This fight shows what a “Black Ice” investment landscape we are in !

Quantitative Easing (QE 1,2,3)  AKA Federal Reserve Purchases of Government and Mortgage Backed bonds to lower interest rates, has been a lightening rod since introduced. We agreed with QE 1 and maybe QE 2, but not QE 3 ….

Nobel Laureate and Famed Hedge Fund Manager take the gloves off

Cliff Asness: Famed Hedge Fund founder of AQR Capital:

….Responding to Krugman is as productive as smacking a skunk with a tennis racket. But, sometimes, like many unpleasant tasks, it’s necessary. I will, at least partially, make that error here ….

Paul Krugman: NY Time Op Ed columnist, Princeton Economics professor and 1998 Nobel Prize Winner:

His recent column in the NY Times:

…..Clearly, Asness has never read anything at all on the subject — not what I’ve written, not what Mike Woodford has written, not what Ben Bernanke has written …..

… if you’re one of those people who don’t have time to understand the monetary debate, I have a simple piece of advice: Don’t lecture the chairman of the Fed on monetary policy.

Sounds like fighting words to me …    Guys … Let’s be orderly and nice!

Bottom Line:

This continued “Strong Federal Reserve” hand (buying assets to lower interest rates),  and now more importantly the exit, has even the big boys sparring over the outcome … and a “Black Ice” investment landscape

Have a Friendly and “Nice“ Monday !

John A. Kvale CFA, CFP