Archive - Apr 2015 - Story

Now we can see the real tragedy of negative interest rates: they not only have the perverse effect of reversing the flow of time, but they demonstrate that borrowers are not acting with the good faith incentives normally associated with someone who needs money. Rather than paying forward, borrowers are paying backwards because they are effectively trying to return something they don’t want. Such an arrangement renders it impossible for an economy to grow. By destroying the temporal and moral structure of money, negative interest rates destroy the economy. When tomorrow cannot be paid, the current regime must fail. The only question to be determined is the form that failure will assume. This may sound like philosophy but it is cold, hard reality.

Not only did Q1 mark a record quarter for issuance, March supply also hit a record at $143 billion, tying the total put up in May of 2008. It should come as no surprise that Q1 was a banner quarter for corporate debt issuance as struggling oil producers tapped HY markets to stay afloat and companies scrambled to max out the stock-buyback-via-balance-sheet re-leveraging play before the Fed hike rates.

Now that the Atlanta Fed has determined that the US economy did not grow in the first quarter of the year - because, well,  it snowed - even though said snow did not prevent the US from raking up $100 billion in public debt through March 30 (and likely much more, however since the US has again hit its debt ceiling we won't know the real level of US debt until some time in October), we can formally summarize the two most important changes in the US economy in the first three months of the year. Here they are.

Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament.

For Q1 2015, only 16 companies issued positive EPS guidance, the lowest count in nearly a decade and not only do investors seemingly not care, they have, in their infinite wisdom, bid up shares by nearly 2%!

When gaming the old score wasn't sufficient to expand the pool of elligible borrowers, creativity was necessary. The result: an entirely new score is born...

One just has to laugh at this point.

Barron’s should have published its gushing cover story on Jamie Dimon’s stewardship of JPMorgan today – as an April Fool’s joke.

For the first time in the state's history, Governor Jerry Brown has directed the State Water Resources Control Board to implement mandatory water reductions across California, in an effort to reduce water usage by 25 percent.

With both channel stuffing and subprime out of the window if only for the time being, GM, whose China sales are falling off a cliff, had to come up with some urgent source of end demand. And thanks to recently disclosed data, we now know that "once a Government Motors, always a Government Motors", because just the first quarter of 2015, the average annual increase in sales to Uncle Sam, aka the Government was a whopping 24%, just  about 100% higher than GM's headline rate of sales increase!

It's the debt-saturated "worst since Lehman" economy!

Blogger Ben’s work is already done. In his very first substantive post as a civilian he gave away all the secrets of the monetary temple. The Bernank actually refuted the case for modern central banking in one blog. The truth is the real world of capitalism is far, far too complex and dynamic to be measured and assessed with the exactitude implied by Bernanke’s gobbledygook. In fact, what his purported necessity for choosing a rate “somewhere” actually involves is the age old problem of socialist calculation.