Home » Posts tagged 'QTR’s Fringe Finance'
Tag Archives: QTR’s Fringe Finance
Matt Taibbi Uncensored: Finance Nothing More Than A ‘Street Scam’
Matt Taibbi Uncensored: Finance Nothing More Than A ‘Street Scam’
The opportunity to secure an exclusive interview with Matt Taibbi is something I thought I’d never get…but alas, here we are.
Taibbi is the head of Racket News and his reputation as a fearless investigative journalist precedes him. From his groundbreaking coverage of the 2008 financial crisis to his more recent explorations of censorship with the Twitter Files, politics, systemic inequality and the inner workings of Congress, Taibbi’s body of work reflects a deep commitment to uncovering truths and challenging conventional narratives.
To have the opportunity to pick his brain is a rare privilege that I’m happy to bring my readers.
First, I asked Matt about why more people on main street don’t know about how the Fed works. He told me: “They also do a tremendous job of keeping people like Nomi Prins or whoever else who might be trying to explain some of these issues, keeping them from the public. It was very frustrating after 2008 trying to get anyone at all to comment on, you know, what exactly QE was, you know, or give an explanation that would make sense to an ordinary person.”
He added: “You just, it’s almost like there’s been a proclamation that these issues are sort of out of bounds for the ordinary person, which is unfortunate because they have critical importance for every single person on the planet, which, I mean, as you know, it’s just very frustrating, that dichotomy.”
“And I think that’s true of a lot of sort of high finance stories. I was originally supposed to do just one story about the 2008 crash and what happened and to try to translate that for presumably a young college audience…
…click on the above link to read the rest of the article…
If Treasury Bonds Hit 5%, You’re Gonna See Some Serious Sh*t
If Treasury Bonds Hit 5%, You’re Gonna See Some Serious Sh*t
Almost as if all of us Austrian Economists (read: any carbon based life form using common sense when it comes to finance) live in an echo chamber together, a third expert I respect came out over the last few days and has warned that 5% on the 10 year treasury would be the breaking point for markets and the economy.
If my calculations are correct, when this thing hits 5%…you’re going to see some serious sh*t.
Peter Schiff now argues that the Federal Reserve and US Treasury are being forced to confront the reality that inflation is persistent, which has led to an increase in yields, recently reaching 4.7% on the 10 year, the highest since November.
The thought process, for financial neophytes, is that bond traders will continue to sell bonds, driving yields up, in order to make it difficult for the Fed to cut rates — and essentially forcing the Fed to fight inflation head-on instead of capitulating to the economy and markets (should they crash).
This follows Jack Boroudjian’s analysis from last week, stating that rates will keep drifting higher and that 5% to 5.5% is the danger zone: Yields To Trigger “Serious Earthquakes” Across Economy: Jack Boroudjian
It also follows Harris Kupperman’s similar take: Bond Market About To Have An “Aneurism”: Harris Kupperman
Put simply, the Fed faces a dilemma: it needs to raise rates to combat inflation and make Treasuries more appealing, but higher rates would exacerbate the already burdensome debt servicing costs and threaten industries reliant on borrowing. Or, to use the parlance of my recent interview with Matt Taibbi, higher rates simply serve up another day of “sh*t burgers” to the economy, whereas lower rates act as rocket fuel for economic activity (and market confidence).
…click on the above link to read the rest of the article…
Sick Of It All
Sick Of It All
Every week, usually once or twice, I sit down to put onto paper my thoughts about the market. And every week, my disgust not only for the rigged system that encompasses our equity markets, but also for the sound of my own whining, grows exponentially.
When I sit down to perfunctorily prattle on about how nothing makes sense and how I constantly see things the polar opposite of 99% of everybody else in the world of finance every week, I usually wonder two things.
First, I wonder whether or not today will finally be the day that I capitulate, get bullish on the stock market, and start bowing religiously to a statue of Stephanie Kelton.
“I should know, I’ve followed a few!” – Arthur
After all, the incessant price moves higher in Bitcoin are part of what triggered me to eventually reassess my thought process on the cryptocurrency. And even though I got bullish for reasons other than price, why couldn’t the same happen with equities?
Second, I try to conceptualize exactly how fast the universe can, and will, make a total ass out of me by crashing markets 50% in 15 minutes in the days, hours, minutes, or probably even seconds after I’d have such a shift in sentiment.
Which is why, like the Black Knight in Monty Python and the Holy Grail, I will continue to forge forward, exasperated, regardless of the inconvenient fact that I have no arms or legs left. But don’t let anybody ever tell you that my spirit was easy to break.
“The Black Knight always triumphs!”
…click on the above link to read the rest of the article…
Cracks In The World Economy Are Starting To Show
Cracks In The World Economy Are Starting To Show
Friend of Fringe Finance Lawrence Lepard released his most recent investor letter this week, with his updated take on the monetary miasma spreading across the globe.
For those that missed it, Larry also talked with me on my podcast just days ago. I believe him to truly be one of the muted voices that the investing community would be better off for considering. He’s the type of voice that gets little coverage in the mainstream media, which, in my opinion, makes him someone worth listening to twice as closely.
Larry was kind enough to allow me to share his thoughts heading into Q4 2022. The letter has been edited ever-so-slightly for formatting, grammar and visuals.
This is Part 1 of his letter. Part 2 can be found here.
In the third quarter, virtually all asset classes went for a roller coaster ride – a sharp bear market rally in July and August, followed by a vicious sell off in September as the Fed continued its Hawkish tone at Jackson Hole in late August and then raised the Fed Funds rate in September to 3.00-3.25%. Recall that as recently as February 2022 Fed Funds was at 0.0-0.25%.
Year to date through 9/30/22, the S&P 500 and Nasdaq are down -24% and – 33%, respectively. Gold and Gold Miners (GDXJ) are down -9% and -30% year to date, respectively. Bloomberg’s US Aggregate Bond Index is down -15%. Only the Bloomberg Commodity Index (broad commodities like oil that are benefiting from inflation) is up year to date (+13.5%).
The Fed’s hawkishness has caused an enormous amount of wealth destruction. As the chart below shows, US stocks and bonds have created a drawdown of $18 Trillion in the US equity and fixed income markets, far worse than 2008 and 2020’s market value destruction….
…click on the above link to read the rest…
