Federal Reserve

Perception Vs. Reality

M.C. Escher’s famous painting “Ascending and Descending”, and recent market trends have a lot in common. They both portray a lot of up and down movement and what many may perceive to be trends. However, when studied closely, they both show little to no absolute change in direction.

Past Is Prologue: New Secular Bull Or A Repeat Of The 70s

Despite much hope that the current breakout of the markets is the beginning of a new secular “bull” market – the economic and fundamental variables suggest otherwise. Valuations and sentiment are at very elevated levels which are the opposite of what has been seen previously. Interest rates, inflation, wages and savings rates are all at historically low levels which are normally seen at the end of secular bull market periods, not the beginning of one.

Key Events In The Coming Week

The key economic releases this week include industrial production on Monday, CPI on Tuesday, and housing starts on Wednesday. There are several scheduled speeches from Fed officials this week. The Beige Book for the November FOMC period will be released on Wednesday.

The Floodgates Begin To Open

It’s now clear that what governments did to counter the Great Recession may have delayed systemic collapse, but did not resurrect the old normal.

The (Dollar) Straw That Breaks The Camel's Back Of Political Correctness

Political risks in Europe are on the rise as the once prosperous middle class are forgotten, both financially (cannot compete with low cost Chinese workers) and culturally (if you do not like what is happening to your neighborhood you are a deplorable and irredeemable racist bigot and we do not need to listen to you). Losing life savings as deposits are bailed in left and right will be the straw that bring down any pretense of political correctness.

Drowning In Debt: 35% Of Americans Have Debt That Is At Least 180 Days Past Due

More than a third of all Americans can’t pay their debts. This is happening during the “economic recovery” that the mainstream media keeps touting. If this many Americans are having trouble paying their bills right now, what are things going to look like when the economy becomes extremely unstable once again?

5 Urgent Warnings From Big Banks That The "Economy Has Gone Suicidal"

The economy has gone suicidal. It is working against the very people who need its energy to survive. It is collapsing on its own weight, and the weight of literally incalculable levels of toxic debt. And it is going to create the greatest disaster of our time, if the warnings from the world’s most powerful bankers are any indication.

Weekend Reading: Market Breaks Support, Time To Worry?

“The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.”

Brace Yourself For The Quadrillion-Dollar Reckoning

"...debt is simply everywhere, at least to the extent we can see and measure it. Corporate and sovereign debt, of both the developed world and emerging market varieties, are at record levels. China’s debts certainly add to that record but who really knows to what extent? It’s the ultimate black box of leverage on Planet Earth... You cannot NOT worry about the Fed in this world...The simple truth is ending reinvestment would bring the bond market to its knees.

Global Stocks, Futures Jump On Strong China Inflation; Oil Rises Above $51

One day after a slump in Chinese trade sparked a global market selloff on concerns the world's second biggest economy had once again hit a downward inflection point, overnight China surprised once again, this time to the upside when the latest inflationary data printed hotter than expected, sending European and Asian stocks higher and pushing the yen lower after China’s producer price index rose for the first time since March 2012.