Alan Greenspan

The Humungous Depression

We are not in a recession. We are in a depression, and have been since the turn of the century.

Bill Clinton Confirms "Wants Economic Role" In Hillary's Administration

Is this why stocks are slipping? Following Hillary's hint last night that she would like to put her husband in "charge of revitalising the economy, because you know he knows how to do it," Bill confirmed the farce this morning, admitting he has asked for an "economic role" in his wife's adminstration. As Yves Smith so eloquently noted, after having institutionalized the neoliberal economic policies that have enriched the 1% and particularly the 0.1% at the expense of everyone else, Hillary Clinton wants to give the long-suffereing citizenry an even bigger dose. Good luck America.

June 2003 - The Fed's Brief Moment Of Clarity

We have referred to the June 2003 FOMC meeting many times before and we suspect that we will continue to do so long into the future. It was one of those events that should be marked in history, truly relevant to the future developments that became panic and now sustained economic decay. It’s as if the committee members at that time anticipated their current powerlessness – yet did nothing about it. Their preferred course from that moment until August 2007 was relieved ignorance, as Greenspan admitted at the time, " I don’t think we know enough about how the private financial system works under these conditions [sub-1% rates],  I don’t believe, that we can construct an effective preemption strategy. Well, we can construct a strategy, but I’m fearful that it would not be very useful."

Albert Edwards: "Let Me Tell You How This All Ends"

The dollar's recent rapid slide has been accompanied by a constant backdrop of dovish cooing from the Fed. Until this week, SocGen's Albert Edwards notes that both equity and commodity markets had embraced the weak dollar as the elixir to solve all their ills. That relief, however, has now proved fleeting as fear of weak economic activity has reasserted its influence on investors. The weak dollar, Edwards warns, should be seen as merely a shuffling of deckchairs on the Titanic before the global economy sinks below the icy waves.

Trumped! Why It Happened And What Comes Next, Part 3 - The Jobs Deal

Donald Trump’s patented phrase “we aren’t winning anymore” lies beneath the tidal wave of anti-establishment sentiment propelling his campaign and, to some considerable degree, that of Bernie Sanders, too. What’s winning is Washington, Wall Street and the bicoastal elites. But most of America’s vast flyover zone has been left behind. Thus, the bottom 90% of families have no more real net worth today than they had 30 years ago and earn lower real household incomes and wages than they did 25 years ago. Needless to say, the lack of good jobs lies at the bottom of the wealth and income drought on main street, and this week’s April jobs report provided still another reminder.

America's Plunging Worker Productivity Explained (In 1 Depressing Chart)

The US became an unsustainable service sector based economy from the 1970s onward when service sector employment diverged from manufacturing without a corresponding boost in productivity. Even Alan Greenspan has warned that America is "in trouble basically because productivity is dead in the water..." There are numerous reasons for this plunge in worker-productivity, from perverted inventives not to work to unintended consequences of monetary policy enabling zombies, but perhaps the most critical driver is exposed in the following dismal chart...

Boston Fed Says "Markets Are Wrong," Rates Are Going Higher, Sooner

Gold and bond prices dropped and stocks popped as yet another open-mouth operation went underway this evening from none other than Boston Fed president Eric Rosengren. Ahead of next week's FOMC meeting, and just days after another Fed president said no April hike, Rosengren spewed firth that "I don't think financial markets have it right." Of course, what this preacher means is that while stock markets are perfectly efficient (and correct), bonds and rate futures areclearly inefficient and "investor outlooks for Fed rate hikes are too pessimistic," because "the US economy is fundamentally sound."

Former Fed Advisor Asks "Has The Fed Bankrupted The Nation"

In 1977, the total indebtedness of U.S. government, corporate and household borrowers was $323 billion. By 1985, that figure had grown to $7 trillion. Volcker left the Fed in August of 1987 after handing the reins over to Alan Greenspan. By year’s end 2015, U.S. indebtedness had swelled to $45.2 trillion. Tack on financials, which few do, and it’s $64.5 trillion and unabashedly growing. We are a nation transformed. What has today’s vast store of debt purchased? Certainly not freedom.

"Feeding The Monster" - The Complete Bear Case, In Charts

In Greek mythology there was a monster called Cerberus, the hound of Hades, a monstrous multi-headed dog who guarded the gates of the underworld, preventing the dead from leaving. Today central banks have taken on the role of feeding our own modern version of Cerberus to keep all the troubles away. This hound of Hades has 3 heads that are named debt, deflation and demographics. Together they make a deadly combination that will result in a massive reset of asset prices...and central bankers are running out of food to feed the monster.

Ben Bernanke: "Helicopter Money May Be The Best Available Alternative"

"Money-financed fiscal programs (MFFPs), known colloquially as helicopter drops, are very unlikely to be needed in the United States in the foreseeable future. They also present a number of practical challenges of implementation, including integrating them into operational monetary frameworks and assuring appropriate governance and coordination between the legislature and the central bank. However, under certain extreme circumstances—sharply deficient aggregate demand, exhausted monetary policy, and unwillingness of the legislature to use debt-financed fiscal policies—such programs may be the best available alternative."

The Global Bubble Has Burst - "Will Tear At The Threads Of Society"

Over time, Bubble Economies become increasingly vulnerable to economic stagnation, Credit degradation and asset price busts. Bubbles are fueled by Credit excesses that distort risk perceptions and resource allocation. Credit and asset price inflation will incentivize speculation, another key dynamic ensuring misallocation and malinvestment. In the end, Bubbles redistribute and destroy wealth. Major Bubbles will tear at the threads of society.