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Who’s Profited Most from 7 Years of Fed Policy…. Well the Fed of Course!

October 9, 2015

Who’s Profited Most from 7 Years of Fed Policy…. Well the Fed of Course!

So I’m often asked whether I really believe that government and policymakers intentionally create laws and policies that hurt the people and help themselves.  My answer is typically that “if you’re asking me this question you know I do but you don’t believe me; so either do your own research or continue to live in the world as you wish to perceive it.  I’m not here to beg you to open your fucking eyes”.

I started this blog about 18 months ago and I have chosen to provide my research with no income attached to it.  It means I have no axe but the truth.  I spent 13 years in major international banks and have been on both sides of the double edged sword that makes the financial services sector a place to reap riches and also to be thrown to the wolves.  That is, I am intimately familiar with the system.  That said, what I’ve discovered is that really very little effort is required to see the world for what it is.

The closest analogy is probably best left to Orwell with Animal Farm.  Humans around the world have been molded to believe they are part of a system to enable them to get ahead.  While some do manage to find a path that has substantial monetary rewards the vast majority (and growing) have, whether they realise it or not, succumb to a role of Boxer, the cart-horse.

That is, our lives revolve around putting in 8 to 10 hours of labour each day for which we receive enough to feed ourselves and our families, have a warm place to sleep and some of us are able to obtain some credit from which we can enjoy things like new cars every few years (while rarely actually owning them).

…click on the above link to read the rest of the article…

A Wolf in Sheep’s Clothing

September 11, 2015

A Wolf in Sheep’s Clothing

This is a piece I wrote last year for Ron Paul’s Voices of Liberty.  Now although mainstream media has all but put a gag order on 9/11 memorial coverage, I believe this article’s message has never been more relevant and so I’m posting again at what is obviously poignant time.  I find it odd that we have 10 Hollywood blockbusters made each year about the holocaust 75 years on, but only 14 years after the event American media will no longer discuss 9/11, even upon the anniversary.  It is perhaps the most telling phenomenon about the secretiveness and mystery surrounding the horrific tragedy.

It was the sixth week of my first job fresh out of college. I was still eagerly excited for each new day. Having moved stateside from a small town in Canada to finish up university and then on to the big city of Chicago, I was still in awe of America. I was working in the north building of the Chicago Mercantile Exchange on the corner of Madison and Wacker. It was early morning and I was on the phone with Paul Salvio from our New York office when

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the phone went dead.

The day was September 11, 2001. Our New York office was on the 92nd floor of the World Trade Center Tower 1. None of the employees who had arrived to work that day survived. It is a moment that elicits strong emotions within me to this day and I know I’m not alone.

In the days and weeks that followed, while the world came together to mourn those lost and to condemn those responsible, our policymakers in Washington were working feverishly to find opportunity in this tragedy. Forty-five days after 9/11, President Bush signed into law the U.S. Patriot Act.

…click on the above link to read the rest of the article…

 

Why Don’t You Explain this to Me Like I’m 5….

September 10, 2015

Why Don’t You Explain this to Me Like I’m 5….

Soc Gen’s global head of research, Patrick Legland, has gone on record, according to a MarketWatch article yesterday as saying that the selloff in developed equity markets has gone too far, and he provides reasons to support his claim.  First, he suggests the Chinese market rout has further to go but believes the fallout will be limited to EM and commodities.  Second, Legland believes that the US and other developed nations are protected by “well-armed central banks” evident by the 3.7% economic growth and the 5.1% unemployment rate and the Eurozone’s 3 year low unemployment.  Lastly, he suggests that due to central banks having created a bond market bubble bonds are no longer a safe haven and thus no longer a viable alternative to equities.  I will point out that Leon Cooperman also discussed on CNBC yesterday morning the fact that there are no viable alternatives to equities anymore and so equities remain in the secular bull.

Let me explain this to Legland like he is an 8 year old.

Ok like he’s 5.

While I admire Legland’s optimism I simply do  not accept his claims.  They are full of tragic flaws.  Allow me to colour code this for all those market ‘pros’ and PhD ‘economists’ who haven’t been able to follow the premise over the past several months.

Screen Shot 2015-09-10 at 6.35.46 AM

The chart depicts that this rout has just begun.  As EPS rolled over in the first half of this year, it signaled that ‘The Tide has Finally Turned‘ as I explained in a recent piece published Aug 2nd (just weeks before the selloff began).  In that research piece I told readers to “prepare for an imminent equity valuation reset” and explained why it would occur.  The above chart provides an explanation as if we are a 5 year old.

…click on the above link to read the rest of the article…

 

An Almost Perfect Predictor of GDP Growth and Bernie Lays the Boots…

August 19, 2015

An Almost Perfect Predictor of GDP Growth and Bernie Lays the Boots…

I recently watched a video clip of Bernie Sanders laying the boots to Alan Greenspan back in 2003, for Greenspan’s seemingly out of touch perspective of the average American.  Now while we do have a repentant banker in Greenspan, a rare phenomenon for sure, I found the scolding interesting in that essentially every accusation Sanders lays on Greenspan could be repeated today to our subsequent central banking gods.  During the video notice that all the figures Sanders explicates not only remain true today but have gotten far worse.  Particularly note the national debt figure which has now increased by more than 400% since then!!!  The clip is well worth the 5 minutes.

But so let’s dig in a little to what Bernie is really saying to Greenspan.  The overall theme of the trouncing is that the Federal Reserve, the keeper of American monetary policy, had implemented policies that clearly had done significant damage to the vast majority of Americans.  Specifically Sanders is suggesting that the policies were a cancer to the economic prosperity of Americans and all the while creating extreme wealth for a select few.  And while that is bad in and of itself, what Sanders finds despicable is that the Fed seems to not only deny the harm they were responsible for but Greenspan seemed to be alleging success by focusing solely on the massive wealth it had provided to the very few on top.

Now in a recent whitepaper by Stephen Williams, VP of the St. Loius Fed, a case is made that the Fed’s ‘recovery’ policies have not helped to boost the economy.  And while I agree with that conclusion, I feel the paper is a fraud.  

…click on the above link to read the rest of the article…

 

 

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