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The New Cartel Running the Oil Sector
The New Cartel Running the Oil Sector As oil prices wallow near multi-year lows, it’s becoming increasingly clear that the new cartel controlling oil prices is not OPEC but world credit markets. From Saudi Arabia’s record $100 billion deficit to shale oil’s continuing reliance on cheap credit funding, it’s clear that no major oil producer or company in the […]
“Fed Policy Is Toxic,” Michael Burry Warns “The Little Guy Will Pay” For The Next Crisis
“Fed Policy Is Toxic,” Michael Burry Warns “The Little Guy Will Pay” For The Next Crisis We are sure, just as many of the so-called “smartest men in the room” ignored him last time, so every status-quo-maintaining, asset-gathering, commission-taker will be quick to dissonantly shrug off Michael Burry’s (the economic soothsayer from Michael Lewis’ book […]
The Credit Crunch Is Back: Banks Scramble To Collateralize Loans To Record Levels
The Credit Crunch Is Back: Banks Scramble To Collateralize Loans To Record Levels One of the biggest quandaries of this cycle for the US economy has been the amount and growth of commercial bank loans. Virtually non-existent for the first three years of the centrally-planned new normal, something changed in 2012 at which point US […]
David Collum: The Next Recession Will Be A Barn-Burner
David Collum: The Next Recession Will Be A Barn-Burner With very few places for capital to hide For those who enjoyed his encyclopedic 2015: Year In Review, this week we spend an hour with David Collum to ask: After processing through all of that information, what do you think the future is most likely to bring? Perhaps it […]
Oil Bankruptcies Hit Highest Level Since Crisis And There’s “More To Come”, Fed Warns
Oil Bankruptcies Hit Highest Level Since Crisis And There’s “More To Come”, Fed Warns “Two things become clear in an analysis of the financial health of US hydrocarbon production: 1) the sector is not at all homogenous, exhibiting a range of financial health; 2) some of the sector indeed looks exposed to distress [and] lifelines […]
The Fed Has Created A “Monster” And Just Made A “Dangerous Mistake,” Stephen Roach Warns
The Fed Has Created A “Monster” And Just Made A “Dangerous Mistake,” Stephen Roach Warns Stephen Roach is worried that the Fed has set the world up for another financial market meltdown. Lower for longer rates and the proliferation of unconventional monetary policy have created “a breeding ground for asset bubbles, credit bubbles, and all-too […]
Why the Fed Will Never Succeed
Why the Fed Will Never Succeed The Fed will never succeed in its attempt to manage inflation and unemployment by varying interest rates. This is because it and its economists do not accept the relationship between, on one side, the money it creates and the bank credit its commercial banks issue out of thin air, […]
Is the US Heading for an Economic Bust
Is the US Heading for an Economic Bust On Wednesday December 16 2015 Federal Reserve Bank policy makers raised the federal funds rate target by 0.25% to 0.5% for the first time since December 2008. There is the possibility that the target could be lifted gradually to 1.25% by December next year. Fed policy makers have justified this […]
The Political Consequences of Financial Crises
The Political Consequences of Financial Crises LONDON – I may not be the only finance professor who, when setting essay topics for his or her students, has resorted to a question along the following lines: “In your view, was the global financial crisis caused primarily by too much government intervention in financial markets, or by […]
No Courage, Feckless Experiments and the Deep State
No Courage, Feckless Experiments and the Deep State Hosannas and Hat-Tipping Today’s post is about you dear reader… and the world you live in. That world got notice last week that henceforth short-term interest rates would be more than zilch. From all over the planet came hosannas and hat-tipping. Some commentators congratulated the Yellen Fed […]
What Fresh Horror Awaits The Economy After Fed Rate Hike?
What Fresh Horror Awaits The Economy After Fed Rate Hike? There is one predominant reality that must be understood before a person can grasp the nature of the Federal Reserve and the decisions it makes, and that reality is this: The Fed’s purpose is not to defend or extend American markets or the dollar; the […]
The Keynesian Recovery Meme Is About To Get Mugged, Part 2
The Keynesian Recovery Meme Is About To Get Mugged, Part 2 Our point yesterday was that the Fed and its Wall Street fellow travelers are about to get mugged by the oncoming battering rams of global deflation and domestic recession. When the bust comes, these foolish Keynesian proponents of everything is awesome will be caught like deer in the […]
The Keynesian Recovery Meme Is About To Get Mugged, Part 1
The Keynesian Recovery Meme Is About To Get Mugged, Part 1 Yellen said at least one thing of importance last week, but not in a good way. She confessed to the frightening truth that the FOMC formulates its policies and actions based on forecasts of future economic developments. My point is not simply that our monetary politburo couldn’t […]
A Free Market in Interest Rates
A Free Market in Interest Rates Unless you’re living under a rock, you know that we have an administered interest rate. This means that the bureaucrats at the Federal Reserve decide what’s good for the little people. Then they impose it on us. In trying to return to freedom, many people wonder why couldn’t we […]
Bank Counterparty Risk Surges To 4-Year High
Bank Counterparty Risk Surges To 4-Year High The TED Spread is the difference between the interest rates on interbank loans and on short-term U.S. government debt and as such offers a proxy for how banks themselves perceive the relative creditworthiness of the financial system. The last time TED spread was surging to this level was late […]
