Great Depression
Will It Be Inflation Or Deflation? The Answer May Surprise You
Submitted by Tyler Durden on 05/23/2013 22:33 -0400
Is the coming financial collapse going to be inflationary or deflationary? Are we headed for rampant inflation or crippling deflation? This is a subject that is hotly debated by economists all over the country. Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation. Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts. So what is the truth? Well, for the reasons listed below, we believe that we will see both.
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And The Band Played On...
Submitted by Tyler Durden on 05/22/2013 22:26 -0400
Our country has entered a period of Crisis. We may or may not successfully navigate our way through the visible icebergs and more dangerous icebergs just below the surface. The similarities between the course of our country and the maiden voyage of the Titanic are eerily allegorical...
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Dudley Terrified By "Over-Reaction" To QE End, Says Fed Could Do "More Or Less" QE
Submitted by Tyler Durden on 05/21/2013 13:12 -0400- Agency MBS
- Asset-Backed Securities
- Bank of Japan
- Bill Dudley
- Bond
- Borrowing Costs
- Central Banks
- Federal Reserve
- Great Depression
- Housing Bubble
- Japan
- Market Conditions
- Monetary Base
- Monetary Policy
- Mortgage Backed Securities
- Personal Consumption
- Quantitative Easing
- Real estate
- Real Interest Rates
- Recession
- recovery
- REITs
- Risk Management
- Russell 2000
- TARP
- Unemployment
- Yield Curve
Up until today, the narrative was one trying to explain how a soaring dollar was bullish for stocks. Until moments ago, when Bill Dudley spoke and managed to send not only the dollar lower, but the Dow Jones to a new high of 15,400 with the following soundbites.
- DUDLEY: FED MAY NEED TO RETHINK BALANCE SHEET PATH, COMPOSITION
- DUDLEY SAYS FISCAL DRAG TO U.S. ECONOMY IS `SIGNIFICANT'
- DUDLEY: FED MAY AVOID SELLING MBS IN EARLY STAGE OF EXIT
- DUDLEY: IMPORTANT TO SEE HOW WELL ECONOMY WEATHERS FISCAL DRAG
- DUDLEY SAYS HE CAN'T BE SURE IF NEXT QE MOVE WILL BE UP OR DOWN
And the punchline:
- DUDLEY SEES RISK INVESTORS COULD OVER-REACT TO 'NORMALIZATION'
Translated: the Fed will never do anything that could send stocks lower - like end QE - ever again, but for those confused here is a simpler translation: Moar.
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Bernanke and the Central Bankers's Worst Nightmare
Submitted by Phoenix Capital Research on 05/21/2013 11:15 -0400If this plan fails to bring about economic growth in Japan, or worse still fails to bring about growth and unleashes inflation, then it’s GAME OVER for Central Bankers. Their one great claim “we’re not doing enough QE” will have been proven to be total bunk.
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Two Issues for the Fed: When and How
Submitted by Marc To Market on 05/21/2013 10:27 -0400Preview of tomorrow's Bernanke testimony and FOMC minutes.
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The New New York Housing Bubble: Park Avenue "Maids Quarters" Studio For $3.9 Million
Submitted by Tyler Durden on 05/19/2013 14:40 -0400
To those who have already submitted their applications to launder their cash buy an apartment or better yet, have already wired the money to purchase any of the still to be built residences at 432 Park, the 84-story giant that is set to become the tallest residential building in the Western hemisphere, congratulations. Although that is technically inappropriate: for full effect we would have to say "congratulations" in the buyers' native tongue, be it Russian, Mandarin, Spanish or Arabic, because it sure won't be English in the ongoing scramble to park trillions in cash away from a global banking system now hell bent on confiscating it, especially away from Europe's insolvent and massively levered banks as shown yesterday, and in the Cyprus template aftermath, the cleanest dirty shirt has once again emerged as midtown Manhattan real estate just as we said would happen last September. However, to call the emerging, full-blown panic scramble to park cash sight unseen, with zero regard for asking price "a bubble", would a slap in the face of all calm, cool and collected bubbles everywhere. Because any time someone is willing to pay $95 million for a non-duplex one-floor apartment, $44.8 million for a 4-bedroom apartment, $10 million for a two-bedroom, or a paltry $3.9 million for a maid's quarters studio (no really), something far more profound is going on beneath the surface than a simple asset bubble.
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More Foreclosures and Suicides than During the Great Depression
Submitted by George Washington on 05/17/2013 11:31 -0400Read 'Em and Weep
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2007 Deja Vu As Bond Issuers Game Rating Agencies Once Again
Submitted by Tyler Durden on 05/14/2013 15:25 -0400
With home prices rising at near-record paces in SoCal, corporate debt yields at record-lows, equity markets surging at near-record rates, and high quality assets dwindling by the minute under the heel of a central bank jack boot; it is perhaps no surprise that investors have switched from finding leverage through the balance sheet (i.e. crappy quality firms) to finding leverage through the instrument (i.e. structured credit). The trouble this time is that yields (and spreads) being so low, the creators of the new-normal ABS, CDOs, and CLOs have to stoop to the old tricks to make their money (as we noted here). As Bloomberg reports, bond issuers are once again exploiting the credit rating agency pay-for-performance business model to create "high-quality" collateralizable assets from utter garbage - such as auto loans.
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Guest Post: A Brief History Of Cycles And Time, Part 2
Submitted by Tyler Durden on 05/14/2013 14:31 -0400
History never changes. Or, at least it changes very slowly indeed. So here we are, like those before us, warning of our own Great Depression, of our own World War, or of even larger cycles like the fall of the English, Spanish, or Roman empires. And so far as we can tell, few listen and nothing changes. Why? Because it isn’t time. Understanding long-term cycles, and how they shape our spectrum of responses in periods of crisis and transformation is key to comprehending what is to come (and how we will allow it to affect us). Do you really think your ancestors didn’t see the Depression coming in 1921 or in 1929? Of course they did. The Balloon Option-ARM mortgage had just been invented, creating a housing boom larger and even more groundless as our own, immortalized by the Marx Brothers in The Cocoanuts. They warned the world then just as we do now, and no one listened then, just as they don’t now. Why? It wasn’t time.
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5 Reasons that Both Mainstream Media – and Gatekeeper “Alternative” Websites – Are Pro-War
Submitted by George Washington on 05/14/2013 12:56 -0400Why There Is So Much Pro-War Reporting
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Ben Bernanke's eHarmony Profile
Submitted by wallstreetfool on 05/13/2013 17:21 -0400I'm a selfish prick. A hot, rich, pampered intellectual with a big dick and a marathon tongue. I'm young enough to do it often and old enough to do it right.
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David Stockman On The New Deal Myths Of Recovery
Submitted by Tyler Durden on 05/12/2013 19:27 -0400
In chapter 8 of David Stockman's new book The Great Deformation, the power-that-be-turned-anti-establishment-reality-seeker explains his perspective on the myths of the New Deal Recovery: "The new deal was a political gong show, not a golden era of enlightened economic policy. It shattered the foundation of sound money and inaugurated a régime of capricious fiscal and regulatory activism that inexorably fueled the growth of state power and the crony capitalism which thrives on it. But it did not end the Great Depression or save capitalism from the alleged shortcomings which led to the crash. In fact, the New Deal introduced a severe dose of economic nationalism and autarky at a time when the only hope for speedy recovery was a reopening of world trade and reestablishment of a stable international monetary régime.... in reality, the notion that the New Deal had pioneered a road map to recovery by means of countercyclical fiscal policy is mostly a postwar academic legend."
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Ben Bernanke Speaks - Live Webcast
Submitted by Tyler Durden on 05/10/2013 09:22 -0400- Ben Bernanke
- Ben Bernanke
- Bond
- Commercial Paper
- Consumer protection
- Counterparties
- Credit Default Swaps
- default
- Equity Markets
- Federal Reserve
- Financial Regulation
- Great Depression
- Monetary Policy
- Prudential
- ratings
- Real estate
- Recession
- Repo Market
- Reserve Primary Fund
- Securities and Exchange Commission
- Shadow Banking
- Stress Test
- Subprime Mortgages
- Transparency
The Chairman is about to take the lectern to discuss bank structure and competition at the SIFI conference at the Chicago Fed. His prepared remarks are likely to be a little less exciting than the Q&A where the world will be watching for the words "buy, buy, buy", "mission accomplished", or "taper". Charles Evans will be his lead out man. Finally, since Bernanke will be discussing shadow banking, or the source of some $30 trillion in shadow money always ignored by Keynesians, Monetarists and Magic Money Tree (MMT) growers, a topic we have discussed over the past three years, here is the TBAC's own summary on how Modern Money really works.
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11 Reasons Why The Federal Reserve Should Be Abolished
Submitted by Tyler Durden on 05/07/2013 22:11 -0400- Barack Obama
- Ben Bernanke
- Ben Bernanke
- Bond
- Chicago Cubs
- China
- Citigroup
- Excess Reserves
- Fail
- Fannie Mae
- Federal Reserve
- Ford
- Freddie Mac
- Great Depression
- Gross Domestic Product
- Housing Bubble
- Housing Prices
- International Monetary Fund
- Money Supply
- National Debt
- New York Times
- Reality
- Recession
- Subprime Mortgages
- Too Big To Fail
- Turkey
If the American people truly understood how the Federal Reserve system works and what it has done to us, they would be screaming for it to be abolished immediately. It is a system that was designed by international bankers for the benefit of international bankers, and it is systematically impoverishing the American people. The Federal Reserve system is the primary reason why our currency has declined in value by well over 95 percent and our national debt has gotten more than 5000 times larger over the past 100 years. The Fed creates our "booms" and our "busts", and they have done an absolutely miserable job of managing our economy. So why is the Federal Reserve doing it? Sadly, this is the way it works all over the globe today. In fact, all 187 nations that belong to the IMF have a central bank. But the truth is that there are much better alternatives.
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Guest Post: Debunking The Keynesian Policy Framework: The Myth Of The Magic Pendulum
Submitted by Tyler Durden on 05/07/2013 19:13 -0400
The policy approach that no one dares to question - "In the long-term, we need to fix our public finances. We’re on an unsustainable path that needs to be corrected to protect younger and future generations. But in the short-term, we need to focus on growth. The economy stinks and people are suffering. Any attempt to lower debt in these conditions would be folly. On the contrary, the government needs to provide more stimulus to promote growth" has no support to its key premise in business cycle history, the idea that the economy will return to full employment and stick there, allowing ample time for debt reduction. Once stimulus is removed, expansions often struggle to continue for much longer. And if the stimulus is replaced with restraint, it seems logical that the expansion’s expected life shortens further. In other words, there is no Magic Pendulum. What’s the typical life of an unassisted expansion? Based on the data presented here, I’ll call it two years.
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