Home Equity

The Great Hollowing Out Of The Middle Class: New Business Formation Collapses

For a country that prides itself (or used to at least) on the success of the entrepreneur and small business creation, a disturbing trend has developed. According to according to a new analysis by the Economic Innovation Group, fewer new businesses were created in the last five years than any other period since at least 1980..."It's hard to put into scale the collapse of new business formation. We have no precedent for that rapid and steep of a decline. It will have a ripple effect in the economy."

Losing Ground In Flyover America, Part 3

The Fed’s crusade to pump-up inflation toward its 2.00% target by hammering-down interest rates to the so-called zero bound is economically lethal. The former destroys the purchasing power of main street wages while the latter strip mines capital from business and channels it into Wall Street financial engineering and the inflation of stock prices.

We're In The Eye Of A Global Financial Hurricane

The global financial system is in the eye of an unprecedented hurricane. While central bankers are congratulating themselves on their god-like mastery of Nature, and secretly praying to the idols of the Keynesian Cargo Cult every night, the inevitable consequence of borrowing from the future, the obsession with "growth" at any cost and financialization /monetary stimulus, a.k.a. the rich get richer thanks to central banks is systemic collapse.

A Nation Of Housing 'Haves' & 'Have-Nots'

Everyone who follows the statistics of rising income and wealth inequality knows we're becoming a nation of haves and have-nots. What's not being discussed is the role of housing.

2016: The End Of The Global Debt Super Cycle

The credit markets are signaling that the debt fueled expansion that began in 2010 is turning to bust. This is the most precarious moment in financial market history because as the world slides into recession global central banks have no ability to soften the oncoming recession with debt creation. The world economy is on the precipice of another Great Depression.

This Is The Last Stage Before Recession

The probability of recession is increasing. Contrary to popular belief, the beginning of a recession is not deflationary but the exact opposite. We expect a recession by the end of 2016, and if that projection turns out to be wrong due to a massive turnaround in Fed policy, the cataclysmic event will only be postponed till 2017.

Fear The Smell Of (Monetary) Napalm In The Morning

If central bankers think that "helicopter money" might be an option to combat deflationary pressures and sluggish economies, the right time to launch the choppers is before consumers realize they need them. As history shows, after that, it is too late.

"How Bad Can Texas Get?" Goldman Answers

As we put it on Friday, "the Texas recession is only in its early innings," because we are just now beginning to witness the bankruptcies and shut-ins that will soon become endemic and sweep across the entire US oil patch as revolvers are reigned in and Wall Street suddenly refuses to finance uneconomic producers' funding gaps. So how bad can things get in Texas, you ask? Goldman has ventured a guess.

What Benefits To Savers? Banks Rush To Hike Prime Rate To 3.50%, Forget To Increase Deposit Rate

Someone forgot to give the banks the memo that the Fed's first rate hike since 2006 was supposed to, at least on paper, benefit the savers of America and not so much the, well, banks.. Because the ink hadn't even dried on the Fed's statement and one after another banks revealed that they would promptly boost their Prime lending rate from the current benchmark of 3.25% to the new Fed Funds-implied prime rate of 3.50%.

Here's Why Housing Must Be Propped Up

If housing tanks, the last prop under the veneer of middle class wealth collapses. No wonder the Powers That Be are so desperate to prop up housing. But the bubbles and busts they've engineered are integral to credit/asset booms; their goal--a steady, permanent rise in prices that never falters--simply isn't possible.