Archive - Sep 16, 2015 - Story

For those wondering about the extent to which falling discount rates have served to create a giant, multi-hundred billion dollar underfunded liability for S&P companies, look no further...

"If only The Fed would get out of the way... Monetary policy designed to spare us from pain has instead made the system more vulnerable to a crash."

According to TIC, China, between its mainland and Euroclear holdings, sold a record $83 billion in Treasurys in the month of July. It also means that China has liquidated a whopping $184 billion notional in US Treasurys in 2015. Finally, and here it the punchline: the sale of ~$83 billion took place in July. This is before China announced its devaluation on August 11 and before, as we also first reported, it sold another $100 billion in Treasurys in August.

Blankfein's biggest nightmare? "The image of Trump "with his finger on the button blows my mind," he added, drawing laughter from the audience." Surely a far scarier prospect for Blankfein and his peers is coming to Washington after the next crash and demanding another bailout, and coming back empty handed.

Here's the American Disease in a nutshell: entitlement and power means you never have to apologize for anything. Public relations might require a grudging, insincere quasi-apology, but the person with power can't evince humility or shame--he or she doesn't have any. What the American with power does have in nearly limitless abundance is a grandiose yet unacknowledged sense of entitlement and a volcanic sense of indignation.

Fool me once... or twice.. or four times?

"A couple of days there is no currency. Only buy dollars and euros, in the tenge no changes, so there is no currency. People go, constantly ask dollars or euros."

"Every day brings another reason why the Federal Reserve should hold off before raising interest rates... First and foremost there was the recent plunge in stock prices."

The inflation-adjusted household income for half the US population is back at 1989 levels. Meanwhile the S&P500, which impacts the net worth of about 10% of the US population is six times higher than where it was in 1989. America has a problem.

A perfect storm of Islamophobia and technophobia (as Wired.com's Marcus Wohlsen so eloquently put it) has erupted in Texas where high-school freshman Ahmed Mohamed was arrested Monday after bringing a homemade digital clock to MacArthur High. A teacher at the Irving school exclaimed "it looks like a bomb,"  resulting in a call to police. By mid-afternoon, police were leading the boy out of school in handcuffs and taking him to juvenile detention on suspicion of making a "hoax bomb." As Mike Krieger sums up so perfectly, America is a deeply fallen nation. I don’t know how obvious it has to become before people come to grips and start to do something about it.

"If you are worried about them, stop supporting terrorists. Can you feel sad for a child's death in the sea and not for thousands of children who have been killed by the terrorists in Syria?"

The Fed may have noble mandates to help the real economy, but it will in the end always decide to do what’s best for Wall Street banks. And these banks could well make a huge killing off a rate hike. They can profit from trouble and volatility in emerging markets as well as domestic markets, provided they’re well-positioned. Given that they’ve had ample time, and it’s hard to answer the question who else is in a good position, we may have an idea which wind the wind will blow. Increasing credibility for the Fed and increasing profits for Wall Street banks. Might be a winning combination. And if Yellen is realistic about the potential for a recovery in the American economy, why would she not pick it?