Wednesday, November 23, 2011

Activision's Record Sales Driven By Unique Corporate Partnerships

Activision Blizzard (ATVI) announced that sales of Call of Duty: Modern Warfare 3(MW3) set the entertainment record for the highest grossing first five-day period. Full Article

Sunday, October 9, 2011

Activision's Promising New Franchise: 'Skylanders'

Activision Blizzard (ATVI) will release "Skylanders Spyro’s Adventure" on October 16. The concept of Skylanders merges physical action figures, such as a purple dragon called Spyro, with a video game realm built for children. Full Article

Saturday, August 20, 2011

Friday, July 15, 2011

Bernanke disingenuous about QE2, money supply and creating reserves.

Ben Bernanke was disingenuous when he testified before the House Financial Services Committee on Wednesday. He again put forward the idea that quantitative easing does not increase the money supply. Please take a look at the following clip:

Quantitative easing is a little convoluted and many of our leaders seem confused with the process. Here is what actually happens: Congress and the President spend more money than they receive. They then sell Treasury bonds to raise money to pay these bills. These Treasury bonds are purchased by primary dealers such as J.P. Morgan and Goldman, Sachs. The Federal Reserve goes to these primary dealers and repurchases some of these Treasury bonds.

Bernanke states the Fed pays a primary dealer for Treasury bonds by increasing its funds held on reserve with the Fed; this is a direct increase of money supply because money is fungible. The primary dealer can now lend out a multiple of this money as normal, a secondary increase of supply.

To further explain, banks take the money they receive and lend it out to others. This means that the money the bank holds (its reserves) is only a portion of what is on deposit with the bank. We call this system fractional reserve banking and recognize that banks increase the money supply and are said to create money.

When the Fed increases a primary dealer’s reserves it is creating money. Bernanke needs to do a better job of explaining the aforementioned to our leaders and better make his arguments about why he believes this monetary policy is sound. He could also admit that we are, to some degree, monetizing the debt through this process.