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All Bad at 0%

All Bad at 0% We call on central banks to abolish their zero interest rate policy (ZIRP) framework before more harm is done. In our assessment, ZIRP is bad for all stakeholders and may even lead to war. ZIRP: Bad for Business? At first blush, it may appear great for business to have access to […]

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The Echo Bubble in Housing Is About to Pop

The Echo Bubble in Housing Is About to Pop  And here’s the knife in the heart of the Echo Housing bubble: declining household income. The Federal Reserve-induced Echo Housing Bubble is finally starting to roll over, and the bubble’s pop won’t be pretty. Why is the bubble finally popping now? All the factors that inflated the […]

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No Brains In Washington

No Brains In Washington Washington’s IQ follows the Fed’s interest rate — it is negative. Washington is a black hole into which all sanity is sucked out of government deliberations. Washington’s failures are everywhere visible. We can see the failures in Washington’s wars and in Washington’s approach to China and Russia. The visit of Chinese […]

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What the Heck’s Happening to the Global Stock Markets?

What the Heck’s Happening to the Global Stock Markets? According to our soothsayers, when the Fed decided to keep interest rates where they’ve been since 2008, at near zero, rather than raise them, it should have triggered a big stock-market rally. But that’s not what happened. Or rather, it triggered some rallies, but soon the […]

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The Next Thing Might Be Helicopter Money

The Next Thing Might Be Helicopter Money «I dare to say that we have not yet seen the most radical brainwaves of the mandarins running our central banks.» (Bild: Roderick Aichinger) James Grant, Wall Street expert and editor of the investment journal «Grant’s Interest Rate Observer», warns of ever more extreme central bank policies and bets […]

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“Everyone’s Praying But No One’s Believing” – The ‘Fed Put’ Is Dead

“Everyone’s Praying But No One’s Believing” – The ‘Fed Put’ Is Dead Chalk Outline Yellen’s detailed speech initially triggered an out-sized market reaction.  Unfortunately, it was mainly due to shallow market depth and weak-hand positions. The ‘risk-on’ trades that ensued seem driven by positional unwinds from short-term traders. These markets will likely reverse back to lower prices […]

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From ZIRP to NIRP

From ZIRP to NIRP The sudden end of the Fed’s ambition to raise interest rates above the zero bound, coupled with the FOMC’s minutes, which expressed concerns about emerging market economies, has got financial scribblers writing about negative interest rate policies (NIRP). Coincidentally, Andrew Haldane, the chief economist at the Bank of England, published a […]

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Two Outs in the Bottom of the Ninth

Two Outs in the Bottom of the Ninth The housing market peaked in 2005 and proceeded to crash over the next five years, with existing home sales falling 50%, new home sales falling 75%, and national home prices falling 30%. A funny thing happened after the peak. Wall Street banks accelerated the issuance of subprime […]

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Goldman Warns On Limits Of Central Bank Policy: “The Road To Hell Is Paved With Good Intentions”

Goldman Warns On Limits Of Central Bank Policy: “The Road To Hell Is Paved With Good Intentions” Back in May, we noted that minutes from the ECB’s April 14-15 policy meeting seem to reveal that the central bank is either obtuse or else suffering from a frightening bout of willful ignorance. Here’s are the excerpts which led […]

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The Fed Can’t Fix It: “All That’s Left is a Reset, Shutdown of the System”

The Fed Can’t Fix It: “All That’s Left is a Reset, Shutdown of the System” Did Janet Yellen make the right decision in delaying a Federal Reserve rate hike? Did the United States dodge a bullet? Of course not. And the system is on course for a dangerous, hard landing. As far as many experts […]

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Low Interest Rates Cannot Save a House of Cards

Low Interest Rates Cannot Save a House of Cards When is the price of some marketable good or service at or near zero? When either the supply of it is so plentiful that virtually any demand, no matter how great, can be satisfied. Or when no matter how large or small the supply of it […]

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The US Bond Market is far Larger than the Stock Market: If Even Part of it Blows, it’ll Dig a Magnificent Crater

The US Bond Market is far Larger than the Stock Market: If Even Part of it Blows, it’ll Dig a Magnificent Crater “So, if rates rise, we get nervous. If rates fall, we get nervous. If rates stay the same, we get nervous. When don’t we get nervous? Raise the rates already! We are talking […]

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Fed’s “Doom Loop” Locks Us On Course for Another Crisis

Fed’s “Doom Loop” Locks Us On Course for Another Crisis Too Much of a Good Thing PARIS – We’ve seen at least three articles explaining why the Fed failed to increase interest rates last Thursday. One says Goldman Sachs is calling the shots now. Another says China has the Fed under its thumb. Still another […]

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A Currency War That Few Economists and Analysts Notice, Much Less Understand

A Currency War That Few Economists and Analysts Notice, Much Less Understand  “The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology.” Michael Parenti Most economists and financial analysts think that ‘currency war’ merely […]

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“Emerging Markets Are On The Verge Of Liquidation” Top Performing Hedge Fund Manager Warns; “QE4 Is Coming”

“Emerging Markets Are On The Verge Of Liquidation” Top Performing Hedge Fund Manager Warns; “QE4 Is Coming” Until recently, John Burbank’s Passport Capital was one of the top 15 performing hedge funds in 2015. Recent events have only led to an even higher YTD P&L making Burbank one of the top performing managers of 2015: […]

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Olduvai IV: Courage
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Olduvai II: Exodus
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