Monetary Policy
Why You Can't Trust The Fed (In 1 Simple Chart)
Submitted by Tyler Durden on 12/31/2015 10:27 -0500The Fed’s crystal ball is in serious need of a recalibration. Fed governors simply haven’t a flippin’ clue what to really expect from the economy. The gold market knows that. It knows that the U.S. economy is like an obese American who has taken up jogging to get into shape... only after the first lap around the track, it’s bent at the knees, huffing and puffing, and feeling like it’s gonna keel over.
Will 2016 Bring About a 2008 Type Crisis? Pt 1
Submitted by Phoenix Capital Research on 12/30/2015 19:36 -0500Between these two banking systems alone, you’ve got the makings of a global financial crisis at least on par with 2008.
IMF Chief Pours Cold Water On Optimistic Yellen, Says Growth "Will Be Disappointing"
Submitted by Tyler Durden on 12/30/2015 10:22 -0500In a guest article for Handelsblatt, Christine Lagarde warns that 2016 is likely to be a disappointment as the Fed hike and China's transition to a consumer-driven economy continue to weigh on global growth prospects. Sorry Janet, it looks like the IMF doesn't agree with your justification for liftoff.
Falling Interest Causes Falling Profits
Submitted by Gold Standard Institute on 12/29/2015 01:45 -0500Most people assume that prices move as a result of changes in the money supply. Instead, let’s look at the effect of changes in interest.
Howard Marks Warns "Investor Behavior Has Entered A Zone Of Imprudence"
Submitted by Tyler Durden on 12/28/2015 17:00 -0500"Security prices are not low. I wouldn’t say high, but full. So people are thinking cautiously but they’re acting bullish and they’re behaving in a pro-risk fashion. While investor behavior hasn’t sunk to the depths seen just before the crisis, in many ways I feel it has entered the zone of imprudence... The market is not an accommodating machine. It will not go where you want it to go just because you need it to go there."
Even The Big Banks Now Admit It: "This Is How The Fed's 'Massive Manipulation' Broke The Market"
Submitted by Tyler Durden on 12/28/2015 12:16 -0500"Essentially central banks, by unfairly inflating asset prices have compressed risk like a spring to unfairly tight levels. Unfortunately, the market is aware the price of risk is not correct, but they can’t fight it, and everyone is forced to crowd into the same trade. By manipulating markets they have also reduced investors’ inherent conviction by rendering fundamentals less relevant."
Everything Central Banks Have Tried Has Failed: According To Citi's Buiter Just One Thing Remains
Submitted by Tyler Durden on 12/26/2015 14:53 -0500"If, as seems possible, the ECB will increase, in H1 2016, the scale of its monthly asset purchases from €60bn to, say, €75bn, and if these additional purchases are concentrated on public debt, the euro area will benefit from a ‘backdoor’ helicopter money drop –something long overdue."
Europe Enters New Year With Nearly $2 Trillion In Sub-Zero Interest Debt
Submitted by Tyler Durden on 12/26/2015 12:36 -0500With EU inflation still stuck in Japan mode and with GDP bumping along at the "new normal" pace of what might as well be 0%, the market expects more from Draghi going forward. Need proof? Just look at yields.
Oil Bankruptcies Hit Highest Level Since Crisis And There's "More To Come", Fed Warns
Submitted by Tyler Durden on 12/25/2015 11:30 -0500"Oil and gas sector bankruptcies have reached quarterly levels last seen in the Great Recession. At least nine U.S. oil and gas companies, accounting for more than $2 billion in debt, have filed for bankruptcy so far in the fourth quarter."
The Fed Has Created A "Monster" And Just Made A "Dangerous Mistake," Stephen Roach Warns
Submitted by Tyler Durden on 12/24/2015 20:12 -0500"By now, it’s an all-too-familiar drill. After an extended period of extraordinary monetary accommodation, the US Federal Reserve has begun the long march back to normalization. A majority of financial market participants applaud this strategy. In fact, it is a dangerous mistake."
Bernie Sanders: We Need A "Full And Independent Audit" Of The Federal Reserve
Submitted by Tyler Durden on 12/24/2015 16:20 -0500"Unfortunately, an institution that was created to serve all Americans has been hijacked by the very bankers it regulates.” 2016 Democratic presidential candidate and Senator from Vermont Bernie Sanders said in an op-ed on Wednesday that a full independent audit of the Federal Reserve is necessary “to reign in Wall Street."
Why The Fed Will Never Succeed
Submitted by Tyler Durden on 12/24/2015 11:35 -0500The Fed will never succeed in its attempt to manage inflation and unemployment by varying interest rates. This is because it and its economists do not accept the relationship between, on one side, the money it creates and the bank credit its commercial banks issue out of thin air, and on the other the disruption unsound money causes in the economy. This has been going on since the Fed was created, which makes the question as to whether the Fed was right to raise interest rates recently irrelevant.
BofAML Fears "Violent" Unwinds As Central Bank 'Put' Expires
Submitted by Tyler Durden on 12/23/2015 15:35 -0500The market is well aware the price of risk is not correct, but they can’t fight it, and everyone is forced to crowd into the same trade by central bank (CB) intervention. By manipulating markets they have also reduced investors’ inherent conviction by rendering fundamentals less relevant, creating a highly unstable (fragile) situation that breaks violently when a sufficient catalyst causes risk to rise – overly crowded positioning meets a market with little conviction. Catalysts From BofAML's global equity derivatives desk's vantage point, it becomes clear that the biggest visible risk to financial markets is a loss of confidence in this omnipotent CB put.
The Dollar Shortage Has Arrived: Africa Runs Out Of Dollars
Submitted by Tyler Durden on 12/23/2015 13:58 -0500In an unexpected turn of events, the disappearance of not just synthetic but very physical dollars has hit one region much harder and much faster than we expected. Africa.
Equity Markets Will Be Increasingly Accident Prone In 2016
Submitted by Tyler Durden on 12/22/2015 20:55 -0500Having anticipated 2015 as the starting point to a turn in volatility for the last two years, BofAML warns that from here on, based on the 'Economics of Volatility framework', they expect to see a rising trend in equity volatility levels, a trend that could last 1-2 years, transporting us from the low volatility regime of the last 3 years towards a sustained high volatility regime.




