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Zombified Economy: What Will the Next Recession Look Like?
Zombified Economy: What Will the Next Recession Look Like? The short answer is nothing like the last. If you search for “next recession” numerous ideas pop up. Many believe there will not be a recession soon. Condition Comparison Conditions are radically different than in 2007 and 2000. The Fed re-blew a housing price bubble but […]
Is Turkey “City Zero” in Global Contagion
Is Turkey “City Zero” in Global Contagion Last year Turkey’s lira crisis quickly morphed into a Euro-zone crisis as Italian bond yields blew higher and the euro quickly reversed off a major Q1 high near $1.25. It nearly sparked a global emerging market meltdown and subsequent melt-up in the dollar. This week President Erdogan of […]
The Federal Reserve’s Controlled Demolition Of The Economy Is Almost Complete The Federal Reserve is an often misunderstood entity, not only in the mainstream, but also in alternative economic circles. There is this ever pervasive fantasy on both sides of the divide that the central bank actually “cares” about forever protecting the US economy, or […]
The Most Important Chart in Economics?
The Most Important Chart in Economics? Earlier this month, the U.S. Federal Reserve quietly released the Financial Accounts of the United States. Like most government data, the 198-page report (known to insiders as the Z1) is almost impossible to understand. However, to the economists and accountants who wade their way through the mess, the implications are […]
Why The Fed Should Not Stop Raising Rates
Why The Fed Should Not Stop Raising Rates A very smart and wealthy friend always reminds me that you have to invest in the market landscape that exists today—not the one you wish for. That said, I like to think of myself as a pragmatist who views the capital markets through the lens of financial […]
Over $10 Trillion In Debt Now Has A Negative Yield
Over $10 Trillion In Debt Now Has A Negative Yield NIRP is back. On Friday, when Germany reported disastrous mfg and service PMI prints, the 10Y German Bund finally threw in the towel, with the yield sliding back under zero for the first time in three years. When that happened, and when the 3M-10Y yield […]
The Capitulation of Jerome Powell and the Fed
The Capitulation of Jerome Powell and the Fed This past week, on March 20, 2019, Federal Reserve chairman Jerome Powell announced the US central bank would not raise interest rates in 2019. The Fed’s benchmark rate, called the Fed Funds rate, is thus frozen at 2.375% for the foreseeable future, i.e. leaving the central bank […]
Weekly Commentary: Doing Harm with Uber-Dovish
Weekly Commentary: Doing Harm with Uber-Dovish This week’s FOMC meeting will be debated for years – perhaps even decades. The Fed essentially pre-committed to no rate hike in 2019. The committee downgraded both its growth and inflation forecasts. Having all at once turned of little consequence, we can now dismiss the 3.8% unemployment rate and […]
The Fed Has Given Up: Get Ready for More QE
The Fed Has Given Up: Get Ready for More QE The Federal Reserve’s Federal Open Market Committee on Wednesday voted unanimously to keep the federal funds rate unchanged. Overall, the FOMC signaled it has made a dovish turn away from the promised normalization of monetary policy which the Fed has promised will be implemented “some day” for […]
A Major Bank Capitulates: “This May Be The Time For Helicopter Money Drops”
A Major Bank Capitulates: “This May Be The Time For Helicopter Money Drops” Long before the Fed was humiliated into reversing its hawkish rate hike policy in January and then again in March, we published – back in June 2015 – “The Blindingly Simple Reason Why The Fed Is About To Engage In Policy Error“, […]
The Neutered Fed Is Politically Trapped
The Neutered Fed Is Politically Trapped Everyone now knows that the only meaningful goal of Fed policy is propping up the world’s greatest credit-asset bubble. In this era of fake news and deep-fake digital recordings and images, it’s important to use unedited images. With this firmly in mind, here is an unedited photo of Federal Reserve Chair Jay Powell and […]
Don’t Be So Negative
DON’T BE SO NEGATIVE “FED’S WILLIAMS SAYS IN A DOWNTURN WE COULD CONSIDER QUANTITATIVE EASING, NEGATIVE RATES.” Tweet by Reuters’ Jennifer Ablan, reporting on a speech by John Williams of the Federal Reserve Bank of New York at the Economic Club of New York, 6 March 2019. “Because NIRP worked so well in Europe and […]
Weekly Commentary: No One Knows How Monetary Policy Works
Weekly Commentary: No One Knows How Monetary Policy Works My interest was piqued by a Friday Bloomberg article (Ben Holland), “The Era of Cheap Money Shows No One Knows How Monetary Policy Works.” “Monetary policy is supposed to work like this: cut interest rates, and you’ll encourage businesses and households to borrow, invest and spend. […]
How Asset Inflation Will End — This Time
How Asset Inflation Will End — This Time Life after death for asset inflation: this is what happens when “speculative fever” remains high even after monetary inflation has paused. This may well have been the situation in global markets during 2019 so far. But history and principle suggest that life after death in this monetary […]
