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Tag Archives: liquidity
Something’s Gone Horribly Awry
Something’s Gone Horribly Awry The S&P 500 has fallen 7.37 percent so far this year. What to make of it… Naturally, some people find falling stock prices to be unpleasant. Others find them distressing. Another way to look at falling stock prices, however, is like a high-fiber diet. The effect is necessary to a healthy […]
The Chart That Explains Everything
The Chart That Explains Everything Why is the economy barely growing after seven years of zero rates and easy money? Why are wages and incomes sagging when stock and bond prices have gone through the roof? Why are stocks experiencing such extreme volatility when the Fed increased rates by a mere quarter of a percent? […]
The Shale Defaults Begin Here: Banks Quietly Shrink These 25 Companies’ Credit Facilities
The Shale Defaults Begin Here: Banks Quietly Shrink These 25 Companies’ Credit Facilities Everyone knows that at $35/barrel oil, virtually every US shale company is cash flow negative and is therefore burning through cash and other forms of liquidity such as bank revolvers and term loans, just as everyone knows that should oil remain at […]
My Financial Road Map For 2016
My Financial Road Map For 2016 Happy New Year to All! May 2016 bring peace to you and your loved ones. Over the holidays, I had the opportunity to stay away from airports and hike Runyon Canyon with my dogs. For those of you that have never traversed Runyon’s peaks and dips, they are nature’s respite […]
Money Velocity Is Crashing–Here’s Why
Money Velocity Is Crashing–Here’s Why The inescapable conclusion is that Fed policies have effectively crashed the velocity of money. That the velocity of money has been crashing while the money supply has been exploding doesn’t seem to bother the mainstream pundits. There is always a fancy-footwork explanation of why whatever is crashing no longer matters. Take […]
There’s No Upside Left
There’s No Upside Left The upside is ephemeral, illusory or wishful thinking; the downside is real and lasting. There’s no upside left–not just in the real economy, but in jobs, politics or policy tweaks. Yes, there will be huge relief rallies in the stock market–relief that the Fed is still omnipotent, that the Fed didn’t destroy […]
This Is What A Financial Crisis Looks Like
This Is What A Financial Crisis Looks Like Just within the past few days, three major high yield funds have completely imploded, and panic is spreading rapidly on Wall Street. Funds run by Third Avenue Management and Stone Lion Capital Partners have suspended payments to investors, and a fund run by Lucidus Capital Partners has […]
Salting the Economy to Death
Salting the Economy to Death One popular delusion that won’t seem to go away is the notion that policy makers can stimulate robust economic growth by setting interest rates artificially low. The general theory is that cheap credit compels individuals and businesses to borrow more and consume more. Before you know it, the good times […]
Confirmation: China As Brazil
Confirmation: China As Brazil There is always some chicken and egg to any financial irregularity; as in does a crisis cause a panic or is it the panic that causes the crisis? Though the evidence of the past eight years is decidedly on the side of the irregularity, central banks continue to press as if […]
Short Squeeze, Liquidity, Margin Debt and Deflation
Short Squeeze, Liquidity, Margin Debt and Deflation Some things you CAN see coming, in life and certainly in finance. Quite a few things, actually. Once you understand we’re on a long term downward path, also both in life and in finance, and you’re not exclusively looking at short term gains, it all sort of falls […]
Another petro-state throws in the towel – the last nail in the petrodollar coffin
Another petro-state throws in the towel – the last nail in the petrodollar coffin Source: Norwegian Ministry of Finance, Bawerk.net According to the proposed budget submitted by the current ‘blue-blue’ government the Norwegian deficit will reach another record high in 2016. Mainland taxes are expected to bring in 1,008 billion NOKs, while expenditures are estimated […]
The Boundaries and Future of Solution Space – Part 3
The Boundaries and Future of Solution Space – Part 3 Energy – Demand Collapse Followed by Supply Collapse As we have noted many times, energy is the master resource, and has been the primary driver of an expansion dating back to the beginning of the industrial revolution. In fossil fuels humanity discovered the ‘holy grail’ […]
Oil Re-Bloodies the “Smart Money”
Oil Re-Bloodies the “Smart Money” The “liquidity death spiral.” Oil plunged again on Monday, with West Texas Intermediate down over 4%. At $45.17 a barrel, it’s just a hair away from this year’s oil-bust low. During 8 weeks in a row of relentless declines, WTI had plunged 26%. July’s 21% drop was the largest monthly decline since […]
The Tenth Man: Floor Monkeys and the Decentralization of Risk
The Tenth Man: Floor Monkeys and the Decentralization of Risk As most of you know, I used to be a clerk on the floor of the old P. Coast options exchange in San Francisco. What a place. I could tell stories about that floor for weeks. The craziest things you ever heard. But let’s keep […]
The Stock Market Will Start To Fall In July? The Dow Plummeted More Than 500 Points Last Week
The Stock Market Will Start To Fall In July? The Dow Plummeted More Than 500 Points Last Week Was last week a preview of things to come? There are quite a few people out there that believe that the stock market would begin to decline in July, and that appears to be precisely what is […]
