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Tag Archives: Federal Reserve
To Hell in a Handcart
To Hell in a Handcart $5 Trillion up in Smoke POITOU, France – Pessimism is a sin against God, said money manager Charles Gave. It suggests ingratitude. And a lack of faith. After all, this is God’s world. What, not good enough for you? That’s why we are always optimistic at the Diary. Things don’t always […]
Why We Need a Recession
Why We Need a Recession According to the National Bureau of Economic Research (NBER), a recession is defined as a “significant decline in economic activity spread across the economy, lasting more than a few months.” Often, this is understood as two consecutive quarters of negative economic growth as measured by a country’s GDP. Public opinion is generally […]
Bear Necessities
BEAR NECESSITIES “At first sign of crisis, the ignorant don’t panic because they don’t know what’s going on. Then later they panic precisely because they don’t know what’s going on.” – Jarod Kintz. In a crisis, it helps to have good counsel. Investment strategist Mike Tyson is pretty good at summing up the problem: “Everyone […]
Another Reason Why the Middle Class and the Velocity of Money Are in Terminal Decline
Another Reason Why the Middle Class and the Velocity of Money Are in Terminal Decline This has three extremely negative consequences. In response to a recent post on the structural decline in the velocity of money, correspondent Mike Fasano described a key dynamic in both the decline of money velocity and the middle class. “There […]
The Fed’s Phony Boom Is Becoming a Real Bust …
The Fed’s Phony Boom Is Becoming a Real Bust … No More Juice Friday’s 391-point drop in the Dow – a nearly 2.5% fall – ended the worst 10-day start to a year in U.S. market history. The average stock in the S&P 1500 – which includes about 90% of all stocks in listed in the […]
US Bank Counterparty Risk Soars After Energy MTM Debacle
US Bank Counterparty Risk Soars After Energy MTM Debacle A few dots are starting to be connected now that we have exposed the debacle of The Fed’s decision to allow banks to mark-to-unicorn their energy loans. “Something” was wrong in recent weeks as the TED-Spread surged (implying rising counterparty uncertainty among banks) and then the last week – since The […]
Weekly Commentary: Cracks at the Core of the Core
Weekly Commentary: Cracks at the Core of the Core January 15 – Bloomberg (Matthew Boesler): “The U.S. economy should continue to grow faster than its potential this year, supporting further interest-rate increases by the Federal Reserve, New York Fed President William C. Dudley said. ‘In terms of the economic outlook, the situation does not appear […]
Mid-East Massacre: Qatar Crashes, Saudi Stocks Plunge Most Since Black Monday
Mid-East Massacre: Qatar Crashes, Saudi Stocks Plunge Most Since Black Monday Broad middle-east and african stock markets crashed over 5%, erasing any gains back to November 2008 as the carnage from last week continues. From Kuwait (-4.3%) to Qatar (-8%) it was a bloodbath as Saudi Arabia Tadawul Index plunged 5.4% – the most since Black Monday (now down […]
The Fed’s Stunning Admission Of What Happens Next
The Fed’s Stunning Admission Of What Happens Next Following an epic global stock rout, one which has wiped out trillions in market capitalization, it has rapidly become a consensus view (even by staunch Fed supporters such as the Nikkei Times) that the Fed committed a gross policy mistake by hiking rates on December 16, so much […]
The Citadel Is Breached: Congress Taps the Fed for Infrastructure Funding
The Citadel Is Breached: Congress Taps the Fed for Infrastructure Funding In a landmark infrastructure bill passed in December, Congress finally penetrated the Fed’s “independence” by tapping its reserves and bank dividends for infrastructure funding. The bill was a start. But some experts, including Congressional candidate Tim Canova, say Congress should go further and authorize funds […]
Austrians get (some) mainstream credibility
Austrians get (some) mainstream credibility Well, well: who would have believed it. First the Bank for International Settlements comes out with a paper that links credit booms to the boom-bust business cycle, then Britain’s Adam Smith Institute publishes a paper by Anthony Evans that recommends the Bank of England should ditch its powers over monetary […]
The Deflation Monster Has Arrived
Lukiyanova Natalia / frenta/Shutterstock The Deflation Monster Has Arrived And it sure looks angry As we’ve been warning for quite a while (too long for my taste): the world’s grand experiment with debt has come to an end. And it’s now unraveling. Just in the two weeks since the start of 2016, the US equity markets are […]
Let The Bail-Ins Begin
Let The Bail-Ins Begin Portugal is starting to bail-in banks. The fascinating aspect that nobody seems to see is that this is a total failure of socialism. The U.S. Federal Reserve was formed in 1913, with the shareholders being the banks, to provide the cash needed to prevent bank failures. To stimulate the economy when […]
Amazon And The Fantastic FANGs——A Bubblicious Breakfast Of Unicorns And Slippery Accounting
Amazon And The Fantastic FANGs——A Bubblicious Breakfast Of Unicorns And Slippery Accounting At year end we posted a rant about the “Brobdingnagian” bubble embedded in Amazon’s market cap. On December 29th it was valued at $325 billion and had gained $180 billion or 55% of that towering figure in just the previous 12 months. Self-evidently this was a flashing red warning signal that the end of the […]
