Janet Yellen

Somewhere Janet Yellen is smiling a "told you so" grin as she watches the "stretched valuations" of the Biotech index get slashed. Biotechs are now down 22% from the highs  - officially a bear market - and just broke the crucial 200-day moving average for the first time in 10 months...

When we see guys like Bernie Sanders get visibly angry at guys like Alan Greenspan it behooves all of us to go beyond the entertainment of it or some prima facie agreement and to truly understand why the anger is justified. If we were to all take the responsibility to understand the lifeblood of our American existence i.e. the economy, we will most certainly be moved to remove not only the policymakers but the system that together serve only those at the top of the economic food chain and at a cost to the rest of us. When we do we will be asking why in the hell is no one yelling at Janet Yellen??

With the confused FOMC still stuck on the fence of raising rates (or not), here are ten reasons why they won't.. and a caveat in case we're wrong...

Seconds ago, someone accidentally (we hope) pulled a Janet Yellen as the following just came across the wires

FOMC MINUTES: MEMB 'GENERALLY AGREED' MORE INFO NEEDED TO HIKE
FOMC MINUTES: NO TIP TOWARDS SEPT LIFTOFF, DOESN'T RULE IT OUT

But the bottom line is that the Fed just admitted things are going from bad to worse: "The risks to the forecast for real GDP and inflation were seen as tilted to the downside." The question now is what comes first: QE4 or the first rate hike in nearly a decade.

“Over the past five years, our businesses have created more than 11 million new jobs. Our economy is growing and creating jobs at the fastest pace since 1999.” - President Obama

Despite those feel-good headlines, the average American is far, far from solid financial footing.

The US and world economies are frauds that are coming unraveled. The Greek bailout is the most recent example of “kick the can down the road” solutions. The US housing bubble was an attempt to cover up/recover from the dot-com bust. Now the US is in a financial bubble engineered to recover from the housing bubble debacle. Soon this bubble will burst. Only the date is unknown.

The Fed is too scared to raise interest rates in the middle of an already weak recovery and risk sending the U.S. economy back into recession, or worse... The Fed chief "does not want to be responsible for the depression that I think we’ve been in the midst of all along," Paul added, "everything is vulnerable, so we’re living in very dangerous times."

It was a relatively quiet weekend out of China, where FX warfare has taken a back seat to evaluating the full damage from the Tianjin explosion which as we reported on Saturday has prompted the evacuation of a 3 km radius around the blast zone, and instead it was Japan that featured prominently in Sunday's headlines after its Q2 GDP tumbled by 1.6% (a number which would have been far worse had Japan used a correct deflator), and is now halfway to its fifth recession in the past 6 year, underscoring Abenomics complete success in desrtoying Japan's economy just to get a few rich people richer. Of course, economic disintegration is great news for stocks, and courtesy of the latest Yen collapse driven by the bad GDP data which has raised the likelihood of even more Japanese QE, the Nikkei closed 100 points, or 0.5% higher. 

How did Tepper do in Q2? In a word: lousy. In another word: the man who recently was on CNBC pitching a 20x P/E multiple as the new normal, may have just called the market top.

There is an economic and financial trainwreck rumbling through the world economy. Namely, the Great China Ponzi. In all of economic history there has never been anything like it. It is only a matter of time before it ends in a spectacular collapse, leaving the global financial bubble of the last two decades in shambles. The resulting deflationary spiral will suck the global economy into its vortex. And Wall Street will go down for the count because this time the Fed will be utterly powerless to reverse the tide.

The ratio of hires to job openings has been steadily falling.  The analysts the WSJ cited all felt that the growing number of job openings was a bullish sign, and that employers can’t find workers to fill the jobs they are offering because workers don’t have the skills employers need. However, The Journal failed to mention the other cause - that the jobs being offered are so crappy and so low paying, nobody wants to take them. More troubling though is the rise in layoffs, just as we saw in 2007...just before stocks turned down.

Asset price inflation, a disease whose source always lies in monetary disorder, is not a new affliction. It was virtually inevitable that the present wild experimentation by the Federal Reserve - joined by the Bank of Japan and ECB - would produce a severe outbreak. And indications from the markets are that the disease is in a late phase, though still short of the final deadly stage characterized by pervasive falls in asset markets, sometimes financial panic, and the onset of recession.

Printing-press money is fertile ground for expanding world crisis. Crisis is excellent cover for national and international chicanery. How can anyone who is paying attention not recognize these tremors for what they are?

Well, pretty much anyone who is not an economist or Wall Street "strategist" because a mercantilist, export-dominated nation pegged to a currency that has appreciated by an unprecedented amount in the past year, is grounds for nothing short of disaster, or using the parlance of our times, a "hard-landing." Case in point: this is what we said just two days ago when the news of China's dramatic trade collapse hit in a post titled: "Chinese Trade Crashes, And Why A Yuan Devaluation Is Now Just A Matter Of Time"...

Confused if the Fed will hike rates in September, or December, or never? Don't worry, the Fed is just as confused, at least until NY Fed's Bill Dudley has his biweekly meeting with Goldman's chief economist Jan Hatzius at the Pound & Pence, where over a lobster club, the current Goldmanite tells the former Goldmanite what to do. Which, if the most recent note just released by Goldman is any indication, means that the Fed will sorely disappoint all the "Septemberists", as Janet Yellen will opt for a December rate hike instead.