• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

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November 8th, 2013

Tyler Durden's picture

No Car, No FICO Score, No Problem: The NINJAs Have Taken Over The Subprime Lunatic Asylum





One of the most trumpeted stories justifying the US economic "recovery" is the resurgence in car sales, which have now returned to an annual sales clip almost on par with that from before the great depression. What is conveniently left out of all such stories is what is the funding for these purchases (funnelling through to the top and bottom line of such administration darling companies as GM) comes from. The answer: the same NINJA loans, with non-existent zero credit rating requirements that allowed anything with a pulse to buy a McMansion during the peak day of the last credit bubble.  Bloomberg reports on an issue we have been reporting for over a year, namely the 'stringent' credit-check requirements for new car purchasers by recounting the story of Alan Helfman, a car dealer in Houston, who served a woman in his showroom last month with a credit score lower than 500 and a desire for a new Dodge Dart for her daily commute. She drove away with a new car.

 

 

Tyler Durden's picture

5(+1) Things To Ponder This Weekend





This past week saw the initial public offering of the single most anticipated IPO of 2013 - Twitter. If you tweeted about it then you are not alone as the news dominated the media headlines and the market. With Twitter already sporting a 11x price-to-sales ratio, and no earnings, what could possibly go wrong? However, it is that growing complacency among investors that should be the most concerning as the general sentiment has become that nothing can stop the markets as long as the Fed is in the game. This week's issue of things to ponder over the weekend provides some thoughts in this regard...

 

Tyler Durden's picture

Gartman Does It Again: "The Game Changed Utterly In The Capital Markets Yesterday"





The "commodity king" author of the "world renowned" Gartman momentum chasing and perpetual contrarian fade newsletter, if not so much of an ETF under the same name anymore, does it again. From this morning.

Now with the S&P forging a massive reversal to the downside, we not only must abandon being bullish we must become bearish... and very so.... Our bearish friends, having been wrong for so long, are now right; it is time to be bearish of stocks, while the time for having been bullish is now past... We trust we are clear. The game’s changed and when the game changes, we change.... We had heretofore consistently erred bullishly of simple things… of coal; of steel; of railroads; of ships and shipping… but we are not now.

And... wrong again. Or said otherwise, short of subscribers in breaking even terms.

 

Tyler Durden's picture

Late Day Panic Buying Vertical Ramp Sends Dow Jones To Record High





It seems like the last 2 days have been a massive NASDAQ-TWTR pairs trade... Today saw broad stock indices best day in a month despite the early "good news is bad news" sell-off as newly minted TWTR heads towards its first bear market threshold off the highs. The Dow managed to get back to a record high close by the end of the day. Treasury prices were clubbed like a baby seal with yields jumping their most in over 4 months. Shorts were grossly squeezed today ("most shorted +2.9% vs Russell +1.1%). Gold was down 1.4% on the day (oil and copper flat) and 2% on the week. VIX was banged back under 13% and the JPY weakness sparked by the taper-on-driven USD strength kept carry traders alive. All in all - only equity markets reacted "positively" to the good news with a panic-buying-frenzy in the last 30 minutes as rates, FX, and precious metals all shifted in a "taper-on" trend...

 

Tyler Durden's picture

Guest Post: Can We Support 75 Million Retirees in 2020?





At the heart of the matter, money is after all a claim on real-world resources, goods and services. Printing or borrowing money into existence does not create more resources, goods or services to exchange for the money. In this sense, all financial schemes for retirement are misdirections of the real challenge, which is creating enough real-world surplus to support 75 million retirees (not to mention the other 75 million people drawing government benefits). Printing or borrowing money are both attempts to get a free lunch; alas, there is no free lunch. We can only spend what we extract or generate in surplus, i.e. what's left after subtracting the costs of production, labor and capital.

 

Tyler Durden's picture

How To Make Money From Facebook In 3 Simple Steps





It's quite simple.

 

Tyler Durden's picture

Too Much Faith Is Being Placed In Untested Theories





We are growing more concerned by the day by the actions of the central banks.  It isn’t just that markets popped and dropped dramatically before and after Draghi’s rate cut, or that any policy seems particularly bad, just that the policies don’t seem to be working great, and are leaving a changed landscape that will need to be corrected, somehow, in the future.  We are quite simply concerned that too much faith is being placed in untested theories that may or may not work, or may or may not even be correct.

 

Tyler Durden's picture

BofAML Warns "Treasury Bears Beware"





The reaction to the non-farm payrolls report in the US Treasury complex has the bond bears out en masse this morning. A 10-12bps jerk higher in yield is nothing to sneeze at and certainly flushed more than a few uncomfortable longs out - but BofAML's MacNeil Curry warns "treasury bears beware." The completing 5 wave advance and confluence of support between 2.738%/2.759% says further yield upside is limited. Don't be max short into these levels. There should be better levels to sell in the days ahead.

 

Tyler Durden's picture

Guest Post: Obama's 'Socialism' Experiment Brought Home





An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on Obama's plan." Here are the 5 key points about such an experiment...

 

 

Tyler Durden's picture

Deutsche Bank: "Yellen May Actually Have To Increase QE" - Here's Why





With what few vacuum tube-based trading algos are left and reacting with rabid kneejerkiness to every flashing red headline, one would get the impression that what matters to the Fed's decision on how to adjust its balance sheet flow depends on the US economy. But if Deutsche Bank is correct, the next source of global economic contraction, which it will be up to the Fed to offset (just like China was the marginal growth dynamo in the months after Lehman filed), and result in an increase in QE nevermind taper, is not in the US at all, but in China where things are about to go bump in the night. Which means that just like that we have moved into the "New Normal paradigm" where the worse the news out of China, the better for stocks.

 

Tyler Durden's picture

Obama To Say "Sorry" Again? - Live Webcast





Speaking in New Orleans, the President is expected to discuss the economy and we are sure say "sorry" again for that... Perhaps the most interesting thing is that the local Democratic senator - up for re-election - will be skipping the speech. As USA Today notes, Sen. Mary Landrieu who is expected to face a tough re-election battle next year because of her support of Obama's health care law, has a long-standing commitment that will force her to miss the speech (but some political analysts suggest that the decision to skip the speech might be motivated in part by a desire to avoid images of her standing side-by-side with Obama).

 

Tyler Durden's picture

GREcovery Interrupted: Greek Deflation Worst In 50 Years





Attention this week was focused on Europe's overall (disappointing) 0.7% inflation print - which sent Draghi back to drawing board - despite the world of sell-side strategists exclaiming that Europe has turned the corner and now is the time to load the boat. However, quietly out of sight for the mainstream, Greece just printed its worst deflation data on record. Consumer prices fell 2.0% on an annual basis as a combination of deep recession, wage cuts, and substantial spare capacity squeeze prices lower. Additionally, we already showed the dismal demise of the macro picture across the European union - heading in a very different direction that the stock markets.. but now, bottom-up, earnings are collapsing too... so remind us again why Europe is a "strong buy?"

 

Phoenix Capital Research's picture

The Definitive Proof That QE Doesn't Create Jobs





 

QE failed for Japan. It has failed for the UK. It ha failed for the US. Collectively, countries comprising over a third of the world’s GDP have proven QE doesn’t work.

 
 
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