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Tag Archives: interest rate policy
The Lowest Interest Rates in 5,000 Years…
The Lowest Interest Rates in 5,000 Years… A Dangerous Spot SANTORINI, Greece – “Gods were gods. Men were men,” explained our tour guide, Spiros. “The ancient Greeks thought there was a difference. Men had to realize they weren’t gods. They couldn’t do the things gods could do. If they tried, it provoked a disaster. The […]
Debt Déjà Vu
Debt Déjà Vu For two years, financial markets have repeated the same error – predicting that US interest rates will rise within about six months, only to see the horizon recede. This serial misjudgment is the result not of unforeseeable events, but of a failure to grasp the strength and global nature of the deflationary […]
IMF downgrades Canadian growth outlook to 1% for 2015
IMF downgrades Canadian growth outlook to 1% for 2015 Risks for the world include low commodities prices, China’s slowdown and rate hikes The IMF has downgraded its outlook for Canadian growth to one per cent this year because of the impact of lower oil and commodities prices. It also has revised its expectations for global […]
US Economy Flies into “Coffin Corner,” But We Don’t Mind!
US Economy Flies into “Coffin Corner,” But We Don’t Mind! Every year, Wall Street economists see a spike in a few indicators and announce an imminent boom. This slowly fades away, leaving another year of slow growth — preventing full recovery from the crash. Readers of the FM website have seen this accurately reported since […]
Failure to Launch
Failure to Launch The popular belief that the U.S. economy has been steadily recovering has endured months of disappointing data without losing much of its appeal. A deep bench of excuses, ranging from the weather to the Chinese economy, has been called on to justify why the economy hasn’t built up any noticeable steam, and […]
Why NIRP may trump QE4
Why NIRP may trump QE4 The Fed unsurprisingly chickened out from the much touted September hike. International conditions and a disapproval from Mr. Market was enough to unnerve an increasingly bewildered FOMC board. Less well known is the fact that the FOMC gave a strong, and unexpected, signal to the Pavlovian world of central bank […]
U.S. jobs and global gloom may mean more mortgage relief: Don Pittis
U.S. jobs and global gloom may mean more mortgage relief: Don Pittis Interest rate hikes fade into the future as economic recovery appears to go flat It seems a terrible thing to cheer about, but a new feeling of gloom may be good for Canadians weighed down by mortgage debt. A worse-than-expected U.S. jobs report and increasing fears […]
Dammit, Janet
Dammit, Janet According to Einstein, time is affected by gravity. Clocks far from strong gravitational fields run more quickly; those close by run more slowly. We can only assume, then, that Janet Yellen has the density of a neutron star. Under her leadership of the US Federal Reserve, time seems to have stopped altogether. It […]
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 […]
Look Out Below: Corporate Debt In Emerging Markets Has QUADRUPLED Since 2004
Look Out Below: Corporate Debt In Emerging Markets Has QUADRUPLED Since 2004 Debt has skyrocketed globally. And see this. Governments have – of course – dramatically increased their debt since 2008 to fund questionable actions. But 141 years of history shows that excessive private debt in and of itself can cause depressions. American corporations are piling on record amounts of debt. And see this. Private debt […]
The Peak in Government? A Low in Interest Rates?
The Peak in Government? A Low in Interest Rates? We have warned that capital is in a flight to quality, therefore creating the bubble in government paper. We also warned that the bond market on the long-term peaked in April/May and that we should expect a further rally in the short-end. This significant move has unfolded right […]
India “Surprises” 51 Out Of 52 “Experts”, Slashes Rates More Than Expected As Easing Bonanza Continues
India “Surprises” 51 Out Of 52 “Experts”, Slashes Rates More Than Expected As Easing Bonanza Continues Late last month, we asked how long it would be before the RBI hit back in the wake of China’s yuan deval. The Indian government’s chief economic advisor Arvind Subramanian had just told ET Now television that India may need to […]
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 […]
This is When Bonds Go Kaboom!
This is When Bonds Go Kaboom! The toxic miasma of “distressed debt.” It’s getting tougher out there for our QE and ZIRP-coddled corporate junk-bond heroes. Unisys, whose revenues and profits decline year after year and whose stock dropped from over $400 a share during the prior tech bubble to $13 a share now, withdrew its […]
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 […]
