Rosenberg: Bank on Banks?

For a guy who’s been touting the de-leveraging over the last few years, this is some pretty bullish commentary (via David Rosenberg):

“I said several months ago that the financials were screening rather well in our sector work.

This was the one sector that underpinned overall profit growth in the revised Q3 national accounts data that were released last week.

Well, the FDIC just reported that US bank profits rose 6.6% on a YoY basis in Q3, to a six year high.  Revenues eked out a 3% gain, the best top-line performance in three years.  Loan loss provisioning was also down by one-fifth – a reflection of improved loan quality.”

Source: Gluskin Sheff


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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • SS

    Cullen, off topic, but it looks like MMT is gnawing on a Cullen Roche bone over the MNE.

  • Cullen Roche

    I know. Here come all the standard MMT lies about my stances. I rejected MMT because I am political, evil, hate the JG, don’t “understand” MMT (I love that default explanation as to why someone else’s positions are wrong), etc.

    Of course, I have said repeatedly that I could support the JG, but that I don’t support the MMT justification for the JG. Ie, they build a false argument around the govt as the money monopolist and then say “there is no alternative” to full employment via govt.

    If you view the world for what it is (and not what they wish it was) then you understand that the govt doesn’t actually have a money monopoly so the central logic around the whole theory begins to fall apart and their justification for the JG falls apart. I’ve said repeatedly that I would support a JG if they could show that it was actually the optimal economic policy to implement. I don’t know why they insist on twisting my words. They just look dishonest when they keep regurgitating the same comments time and time again (even though I’ve been saying otherwise since the day this all started). Ironically, they’re the ones who have continually misunderstood our positions. The nonsense around S=I made that clear. Many of them still don’t understand that.

    But here I go again. I don’t know why I bother with them. They continually misconstrue everything anyone else says so they can feel better about the fact that their theory doesn’t apply to the actual way the USA is currently structure.

  • Cullen Roche

    And this is a fun comment:

    “Pragcap MR argues that banks like Goldman Sachs and JP Morgan defend our liberty by controlling the money system and the Fed is their slave and the Treasury can only spend by borrowing money created by JP Morgan and Goldman Sachs and thats all fantastic because “that’s the system we have, the system we designed…. that’s just the way it is…”

    I never said the govt could “only spend” by borrowing from banks. I said that’s the current design. I also never said the current system was optimal. I said it was what we have. This writer totally misrepresents my position intentionally. MMTers are the ones who distort it by claiming that the system we have is the system they WANT.

    “Therefore there is no reason to change anything, and there is definitely no rationale for the JG, because that would turn us into Zimbabwe because output is the most important thing and anyway JP Morgan would never stand for it and hyperinflation won’t happen because JP Morgan will cut off funding to the Treasury, though the Treasury can always spend as much as it wants to but that’s not good because it’s like dropping nuclear bombs all over the place, but there is definitely no rationale for the JG whatsoever for the reasons outlined above. “

    I have said, for a long time that there could be a rationale for the JG. What is not a rationale for the JG is this incorrect “money monopolist” argument. You can understand MR and advocate for a JG. That’s not unreasonable. I also never said there was “no reason to change anything”. Again, I just describe what we have. I don’t say it’s optimal or not.

    “Pragcap MR is gibberish, a lame attempt at providing some justification for Pragcap’s opinions about stuff.”

    As evidenced above, this commenter clearly has no idea what he’s talking about and is distorting the facts to make his own argument sound more plausible. Who cares really. What a waste of time.

  • Geoff

    Yeah, that was a pretty nasty comment, but there were many other ones that were quite positive towards MR, or at least fair minded. Look at the glass as half full, man :)

  • JK

    I think it’s really unfortunate that some MMTers are hostile toward MR. My feelings on the two are in the comments section over there. Keep doing what you’re doing Cullen. I find it helpful.

  • witt

    Haters gonna hate, CR. And I beg you always remember how much your efforts have contributed to advancing this discussion. It’s moved so far so fast.

  • SS

    MMTers hate what you guys have done because you’ve taken the best of their understandings and applied it to the actual real workings of our system. Something they spent 20 years trying to do and couldn’t. They probably wish they could go back in time and reframe the entire MMT discussion so that it looked more like MR and less like MMT, but it’s too late for that.

  • Cullen Roche

    This isn’t “us versus them”. It never was. It never should be. So it’s time to get over it and move on.

  • Geoff

    Great comments over there, JK.

  • Greg

    “This isn’t “us versus them”

    Right. Thanks Cullen

    Mikes been on a roll over at MR lately.(JKH had a pretty epic post, will need a month for that one) Nice to see more posting there.
    Maybe its the fiscal cliff fever or people with more time around holidays but there seems to be more activity, at least at the sites I frequent. Lots of commenting it seems

  • LVG

    MMTers are too funny over there. They sound like a bunch of little girls who just broke up with their boyfriend and can’t stop whining about it. On the bright side Cullen – you must have quite the influence since all these girls are so upset about your break-up with them. So there’s your glass half full!