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Worst Recession in 150 Years
Worst Recession in 150 Years The stock market had another big day today, spurred by the Fed’s massive recent liquidity injections. But you really shouldn’t be terribly surprised by the rally. Even the worst bear markets see substantial bouncebacks. And you can expect the market to give back all of its recent gains in the […]
Markets and Black Swans
Markets and Black Swans I began studying complexity theory as a consequence of my involvement with Long-Term Capital Management, LTCM, the hedge fund that collapsed in 1998 after derivatives trading strategies went catastrophically wrong. After the collapse and subsequent rescue, I chatted with one of the LTCM partners who ran the firm about what went […]
Rickards: It’ll Get Worse it Before It Gets Better
Rickards: It’ll Get Worse it Before It Gets Better We’re well into the coronavirus pandemic at this point. As of this writing, there are 360,765 reported infections and 15,491 deaths worldwide. Over the next few days, you may be certain that those numbers will be significantly higher. That’s how pandemics work. The cases and fatalities […]
Helicopter Money Is No Panacea
Helicopter Money Is No Panacea In recent decades, the Fed has engaged in a series of policy interventions and market manipulations that have paradoxically left it more powerful even as those interventions left a trail of crashes, collapses and calamities. This contradiction between Fed omnipotence and Fed incompetence is coming to a head. The economy […]
“Last Hurrah” for Central Bankers
“Last Hurrah” for Central Bankers We’ve all seen zombie movies where the good guys shoot the zombies but the zombies just keep coming because… they’re zombies! Market observers can’t be blamed for feeling the same way about former Fed Chair Ben Bernanke. Bernanke was Fed chair from 2006–2014 before handing over the gavel to Janet […]
Rickards: World on Knife Edge of Debt Crisis
Rickards: World on Knife Edge of Debt Crisis Herbert Stein, a prominent economist and adviser to presidents Richard Nixon and Gerald Ford, once remarked, “If something cannot go on forever, it will stop.” The fact that his remark is obvious makes it no less profound. Simple denial or wishful thinking tends to dominate economic debate. […]
Major Recession Alarm Sounds
Major Recession Alarm Sounds Red, red, in every direction we turn today… red. The Dow Jones shed 800 scarlet points on the day. Percentage wise, both S&P and Nasdaq took similar whalings. The S&P lost 86 points. And the Nasdaq… 242. And so the market paid back all of yesterday’s trade-induced gains — with heaps […]
New Multi-year Gold Rally Has Emerged
New Multi-year Gold Rally Has Emerged The dollar price of gold has been on a roller-coaster ride for the past six years. But the past six weeks have been a turbocharged version of that. Investors should expect more of the same for reasons explained below. The six-year story is the more important for investors and […]
Over 50? The Important Investment you NEED to Make…
Over 50? The Important Investment you NEED to Make… What do you call an investment that has no risk, requires little — if any — money to start, is available equally to the rich and poor, is proven to improve your career prospects… can generate hundreds of thousands of dollars in savings over a lifetime? I […]
Prepare for Trench Warfare
Prepare for Trench Warfare What if China isn’t half so desperate for a deal as the president believes? Are we in for an extended siege of economic trench warfare? Today we explore possibilities… and their implications. We first direct our gaze to Wall Street. Investors came crouching from their shelters this morning… as if expecting […]
Central Banks Don’t Matter
Central Banks Don’t Matter “There is no money in monetary policy.” Could it be true? Is there no money in monetary policy? Yesterday we argued the Federal Reserve cannot even define money… much less measure it to any reasonable satisfaction. Today we venture upon a heresy deeper still — that central bank “monetary” policy has […]
The Fed’s Dangerous Inflation Game
The Fed’s Dangerous Inflation Game By now you’ve heard that the U.S. economy expanded at an annualized rate of 3.2% in the first quarter of 2019. That was reported by the Commerce Department last Friday morning. That strong growth coming on top of 4.2% in Q2 2018 and 3.4% in Q3 2018 means that in […]
GDP: Fake News
GDP: Fake News The first-quarter GDP number was released this morning. And at 3.2%, it came in far above estimates. Consensus was about 2.3%. It was also the highest Q1 GDP print since 2015. But there’s probably less here than meets the eye. About half the GDP gain came from a surge in inventories and […]
Dollar Dominance Under Multiple, Converging Threats
Dollar Dominance Under Multiple, Converging Threats For years, currency analysts have looked for signs of an international monetary “reset” that would diminish the dollar’s role as the leading reserve currency and replace it with a substitute agreed upon at some Bretton Woods-style monetary conference. That push has been accelerated by Washington’s use of the dollar […]
