Meltdown

Tim Knight from Slope of Hope's picture

The Great Deformation





Although I never thought it was possible, it makes me angry to write this book review. I'm not angry because I don't like the book. On the contrary, this is the best economics book I've ever read. Indeed, it may be the best and most influential book I've ever read in my life. I only wish I had read it the moment it was published in April 2013. 

 
Tyler Durden's picture

5 Things To Ponder: Interesting Stuff





As a reminder, this kind of market action is neither normal or healthy longer term and has only seen near historical major market peaks. Of course, timing is everything. With the current influx of liquidity coming to an end in October, combined with a plan to start to increasing interest rates in 2015, the Fed has clearly begun to signal the end of 5 years of ultra-accommodative policies. The question that remains to be answered is whether or not the economy is actually strong enough to be removed from "life support?" This weekend's "Things To Ponder" is just a smattering of interesting articles cover a wide range of topics that I hope you will find interesting, informative and contemplative.

 
Tyler Durden's picture

Are Capital Inflows Propping Up U.S. Markets?





Nobody really believes the official narrative that the "recovery" is powering the remarkable strength of U.S. stocks, bonds and real estate. The real Main Street economy is quite obviously struggling, outside the energy and Federal government sectors, and so many see the Federal Reserve's free money for financiers (a.k.a. quantitative easing) bond and mortgage-buying programs as the real reason bond yields have declined and stocks have soared. This leads us to wonder if capital inflows into the U.S. aren't a largely overlooked driver of rising U.S. markets.

 
Tyler Durden's picture

Don't Think It Won't Happen Just Because It Hasn't Happened Yet: Loss Of Faith In The Fed





Much of the supposedly godlike power of central banks is participants' faith in their powers to control not just finance but the real world that can be leveraged by finance. Implicit in this narrative is the notion that there are no hard limits on credit or central bank money creation. Equally implicit is the assumption that the central banks repressing interest rates and creating trillions of dollars out of thin air can control any blowback or unintended consequences triggered by the free money for financiers tsunami.

 
Tyler Durden's picture

Japan’s Keynesian Demise: A Cautionary Tale For Our Times





The ragged Keynesian excuse that all will be well in Japan once the jump in the consumption tax from 5% to 8% is fully digested is false. Here’s the problem: this is just the beginning of an endless march upwards of Japan’s tax burden to close the yawning fiscal gap left after the current round of tax increases, and to finance its growing retirement colony. There is no possibility that Abenomics will result in “escape velocity” Japan style and that Japan can grow its way out of it enormous fiscal trap. Instead, nominal and real growth will remain pinned to the flatline owing to peak debt, soaring retirements, a shrinking tax base and a tax burden which will rise as far as the eye can see. Call that a Keynesian dystopia. It is a cautionary tale for our times. And Japan, unfortunately, is just patient zero.

 
Tyler Durden's picture

The Gold & Silver Morning Smackdown Is Back





Despite NATO's warnings of Russian escalation in Ukraine, 8amET was a far bigger catalyst for precious metals this morning as the once ubiquitous morning meltdown is back. With gold relatively flat and Treasury yields down 10bps after a 60 point S&P surge, maybe this is catch-down but the heavy-volume plunge in Gold and Silver is notable in that USDJPY appeared to jerk higher at the same time.

 
Tyler Durden's picture

The Ice-Wall Go-eth - Japan Scraps Fukushima Freezing Plan





On the heels of our previous aggregation of all things Fukushima, we were 'shocked' to see the flashing red headline tear across the Bloomberg exclaiming that "The Japanese government has decided to abandon the 'frozen water wall' solution to Fukushima's meltdown." When they unveiled this "Game of Thrones"-esque 1.4km long ice-wall a year ago, we snarkily wished them luck, questioning their sanity. Of course, we got a hint when 2 months ago, TEPCO admitted that "we have yet to form an ice plug because we can’t get the temperature low enough to freeze the water." For now, there is no Plan B - though we 'wasting' JPY 32 billion on so far is helping GDP.

 
Tyler Durden's picture

Frontrunning: August 14





  • Police fire tear gas, stun grenades at Missouri protesters (Reuters)
  • Putin’s Pipeline Bypassing Ukraine at Risk Amid Conflict (BBG)
  • Russia's Largest Oil Company Seeks $42 billion to Weather Sanctions (WSJ)
  • Shells hit central Donetsk, Russian aid convoy heads towards border (Reuters)
  • U.S. Tightens Sanctions, Putting More Russian Companies at Risk (BBG)
  • How to Blindly Score 43% Profit Overnight in China Stocks (BBG)
  • Tears guaranteed: San Diego Pension Dials Up the Risk to Combat a Shortfall (WSJ)
  • Euro Recovery Halts as Germany Shrinks, France Stagnates (BBG)
  • Billionaire Found in Middle of Bribery Case Avoids U.S. Probe (BBG)
  • Hillary Clinton, Barack Obama 'Hug It Out' on Martha's Vineyard (WSJ)
 
George Washington's picture

We’ve Opened the Gates of Hell





Fukushima Spews Radiation World-Wide

 
Phoenix Capital Research's picture

The Coming Tectonic Shift That 99% of Investment Professionals Are Unprepared For





For 40 years, the financial world has experienced a bull market in bonds. What this means is that for 40 years, bond prices have risen while yields fell.  As yields fell, it became easier and easier for investors to borrow money.

 
Tyler Durden's picture

Guest Post: How The Destruction Of The Dollar Threatens The Global Economy





The failure to understand money is shared by all nations and transcends politics and parties. The destructive monetary expansion undertaken during the Democratic administration of Barack Obama by then Federal Reserve chairman Ben Bernanke began in a Republican administration under Bernanke’s predecessor, Alan Greenspan. Republican Richard Nixon’s historic ending of the gold standard was a response to forces set in motion by the weak dollar policy of Democrat Lyndon Johnson. For more than 40 years, one policy mistake has followed the next.  Each one has made things worse. What they don’t understand is that money does not “create” economic activity.

 
Tyler Durden's picture

Wall Street Isn't Fixed: TBTF Is Alive And More Dangerous Than Ever





Practically since the day Lehman went down in September 2008 Washington has been conducting a monumental farce. It has been pretending to up-root the causes of the thundering financial crisis which struck that month and to enact measures insuring that it would never happen again. In fact, however, official policy has done just the opposite. The Fed’s massive money printing campaign has perpetuated and drastically enlarged the Wall Street casino, making the pre-crisis gamblers in CDOs, CDS and other derivatives appear like pikers compared to the present momentum chasing madness. In a nutshell, the Fed’s prolonged regime of ZIRP and wealth effects based “puts” under risk assets has destroyed two-way markets.

 
Tyler Durden's picture

Three Years later, Japan Finally Tells The Truth: More Fuel Melted At Fukushima





After years of obfuscation and, simply put, lies; TEPCO has admitted in a new report that more nuclear fuel had melted at the Fukushima nuclear reactor than previously stated. While this is dreadful news, it gets worse, as the report further confirms that despite Abe's promises and TEPCO's state-funded efforts to build ice-walls, it may miss an important deadline binding it to clean radioactive water stored inside the Fukushima nuclear plant. Bloomberg reports officials commenting "we are doing everything we can do," but it appears, that is not enough as tens of thousands of tons of toxic water are expected to remain at the site by the imposed deadline.

 
EconMatters's picture

Jackson Hole Will Signal Hawkish Tone for Financial Markets





Look for a speech on Friday August 22nd by Janet Yellen where she officially signals financial markets that they better start finding their respective chairs.

 
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