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Perfect. Now let's just hope Gold and ES continue to go their separate ways.
Strange indeed... from virtually +1 to -1.
I think they turned off the bots that saw them both as inverse to the dollar.
I wouldn't bet on it. The correlation will snap back to in-line with historical levels. Much like the 10Y-yield and the market is now coming back in line http://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p81971659116
Google "carmen reinhart financial repression"
I think that declining auto production being blamed on supply chain problems is BS. If GM has stuffed its dealers so full of inventory that they parking cars in abandoned strip malls, this "supply chain" problem is just cover.
'Supply chain problem' insinuates demand for cars cant be met because their production is being hindered by lack of supplies? Total garbage, dealer lots are stuffed to bursting with GM vehicles.
Anecdote: Last month, we went to see Chevy Tahoes here in Houston. There were 2 rows of Tahoes as far as the eye could see. (I told my wife about channel stuffing before we went) I asked what incentives they had, and the salesman gave us some piddly amount (less than 2k from sticker). I asked what the cash incentive was, and he said that was it ... b/c ... they just can't keep them on the lot. Said it with a straight face too, as I looked down the long rows of cars. We thanked him and left. It's cheaper to buy a luxury brand.
Government Motors isn't serious about selling cars. Here's another laugher - their EPA rating. 15 MPG city driving for a v8 5.3 liter. No way that's even close.
Fed In A Box
Economist Lawrence B. Lindsey writing in the Weekly Standard, June 13:
Right now, thanks in large part to Federal Reserve policy, Uncle Sam can borrow at an average cost of just 2.5 percent. The average borrowing cost over the last three decades was 5.7 percent. Our debt is now $14 trillion and scheduled to grow to $25 trillion by the end of the decade. If interest rates normalize over that period the added interest costs in 2021 alone will be $800 billion—more than 20 times the mere $37 billion in budget cuts that tore up Congress in March. It would take virtually all of the cuts in the Ryan budget just to cover that added interest, much less to start bringing down the national debt. Unfortunately, the Fed is now in a fiscal box. A normalization of interest rates would break the Treasury. Hence, a normalization of rates really can't happen—we're stuck in a world in which the Fed must keep rates artificially low in order to prevent a budget disaster.
LOL..... Krugman said of Financial Repression....
"I have seen the past.. and it worked."
Cant somebody just choke out Krugman the butthole once and for all?
go troll him like I do every once in a while.
But I troll respectfully on the NYT because I want the sheeple to see that there is an alternative viewpoint.
Everybody on zero hedge should troll the krugman. that would be funny if there were multiple erudite explanations of how these solutions he proposes won't work anymore. The transmission mechanism is broken, so pushing harder may just cause crazy shit to happen
So I suppose "Hey Paul, does The Bernanke's beard tickle your balls?" wouldn't help our cause....
HOW could industrial production miss? We're america the industrial superpower! Oh wait I forgot, we sold all those factories and manufacturing off for money borrowing over the last few decades.
yeah...cause running up the credit card that China and Japan provided was a lot easier than actually working and saving for what people want.
The politicians promised that free money would continue forever! What happened?
Oh, they just failed to mention only a few percent of the population is given access to the free money.
Gold/silver just popped higher.
More signs that the economy is going into the toilet and will need more QE is the likely culprit.
Each QE just serves to put a firm floor under gold a few hundred higher.
ZH should run a poll: Agree or Disagree with the Iranian President?
Reminds me of the movie Love and Dealth..woody allen, (big fan of Woody) when his charactor confronts Napolian and says "you're a tyrannt, brutal dictator", ... " and Napolian replies, "why are you reciting my credits?"
the 10am housing market index report should send the /ES off the 1270 cliff to test 1261-1265 range...then petroleum status at 10:30 could make today a truly gorgeous blood bath.
Tornados. What a joke
Isn't stagflation made worse by QE? A lack of decent yielding assets plus a desire to devalue the currency, with no transmission mechanism to the consumer, can only result in higher commodity prices, margin compression, lower disposable incomes and therefore constrained hiring, spending.
But then I don't have an economics PhD, so perhaps I should just be quiet and leave it to the experts.
They can only juggle price stability (if you can call wildly higher food and gas prices stable) and vast money printing for so long, I think theyre at their end right before it all comes crashing down.
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."
The banks prefer option 2, because at least that way they live to fight another day. Option 1, will mean certain collapse of the banking system...
Stagflation seems too polite; "fuckflation" better describes the situation.
I think fuckflation is what happens when one has been married for longer than 10 years.
Pure guess on my part.
I thought dating was fuckflation, and marriage is defuckflation.
Decrease in supply so increase in value? Hmmm. Deep. I think the price elasticity of supply and demand is variable, too.
Increase in the supply, so decrease in the value?
Hence open marriages. Increased demand from new markets drives the price back up.
Anyone see any 'smoothing mechanisms' yet today?
Someone's gone through and junked every comment on this thread, except this one - which would suggest the junker has constipation or maybe hemorrhoids...
Interesting that with 'miss' in industrial production and spy 10 handles lower that the steel stocks are green. copper is barely lower even as the dollar soars.
the markets at least for today are not jiving with the headlines.
Stagflation: those on the inside (aka crony capitalists) win and economic death and despair for everyone else.
it has only been 3 months, so far. "they" are still calling it the "earthquake in japan" rather than an ongoing horrible nuclear disaster. they got the supply chain disruption right...
the implication seems to be that the "disruptions from the events" are economically manageable.
but: clusterflocks tend toward gnarly now and again, too.
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