Central Banks Are the PROBLEM, Not the Solution ... the DISEASE, Not the Cure
"We are very bearish for the first half of the year. In the second half, every tank and swimming pool in the world is going to fill."
Investment expert, Harry Markopolos, wrote detailed letters to the SEC for years, raising red flags that Bernie Madoff was running a Ponzi scheme – only to be ignored by the SEC as Madoff fleeced more and more victims out of their life savings. Today, there are two equally erudite scribes who have jointly been flooding the SEC with explosive evidence that some Exchange Traded Funds (ETFs) that trade on U.S. stock exchanges and are sold to a gullible public, may be little more than toxic waste dumped there by Wall Street firms eager to rid themselves of illiquid securities.
Enterprise Products Partners has told at least some counterparties that it is experiencing delays in delivering crude from its tanks, according to three sources who were informed of unspecified "terminalling and pump" issues. The hiccups may be a sign of things to come as traders fear a further increase in stocks at Cushing would test the upper limits of tanks and cause the next leg of an 18-month rout.
As much as economists talk about the independence that the Fed holds from Congress, remittances represent a strong link. In fact, since they enable federal spending they create a form of quasi-fiscal policy for the Fed to use, in addition to its more common monetary policy options. Without Fed remittances, retirees might see their monthly check cut by about 12 percent.
Mass immigration is continuing to claim victims in Sweden. Murder, assaults and rape have become everyday occurrences in this small country, with a population just short of ten million, which last year opened its doors to almost 163,000 immigrants. The atmosphere on Swedish social media is now almost revolutionary.
Do you remember when Greenspan was befuddled when natural market rates wouldn't obey his commands in the previous decade? Well, I sure hope Yellen does. Even if she doesn't the high yield financed US energy probably won't be around long enough to find out.
"... if interest rates go negative, the incentives reverse: people receiving payments will prefer checks (which can be held back from collection) to electronic transfers. Such a reversal could impose novel burdens on payment systems that have evolved in an environment of positive interest rates.... that if interest rates go negative, we may see an epochal outburst of socially unproductive—even if individually beneficial—financial innovation."
Two weeks ago we, in collaboration with several readers, requested an official response from the Fed through a Freedom Of Information Act submission. Surely if the Fed would go so far as to call us liars, it would have no problem either responding or providing the required information. This is what we got back.
If the eurodollar and wholesale banking system had been sliced to such a thin margin again by 2011 so as to so heavily depend on the modern duality of gold, it not only would not survive it literally could not survive. The paper dilution we see now may just be that judgement finally seeking open admission.
... if analysts, like those at Autonomous are to be believed, China’s banks could require up to $7.7tn of new capital and funding over the next three years. State bailouts could send the government debt to GDP ratio spiralling from 22 per cent to 122 per cent. That kind of shock would be a challenge for any country, even one of China’s vast might.
Moments ago the effective Fed Funds rate tumbled from yesterday's 0.35% to just 0.12%, confirming that indeed the rate hike corridor can and has been breached at least once, and only two weeks into the Fed's rate hike experiment.