• Tim Knight from...
    09/01/2014 - 12:24
    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...

Quantitative Easing

Tyler Durden's picture

"We All Lost"





“I say to all those who bet against Greece and against Europe: you lost and Greece won. You lost and Europe won.” - Jean-Claude Juncker...

[Spoiler Alert: No, it's not over yet]

 
Tyler Durden's picture

Here Comes QE In Financial Drag: Draghi's New ABCP Monetization Ploy





You can smell this one coming a mile away... the ECB is now energetically trying to revive the a market for asset-backed commercial paper (ABCP) - the very kind of “toxic-waste” that allegedly nearly took down the financial system during the panic of September 2008. The ECB would have you believe that getting more “liquidity” into the bank loan market for such things as credit card advances, auto paper and small business loans will somehow cause Europe’s debt-besotted businesses and consumers to start borrowing again - thereby reversing the mild (and constructive) trend toward debt reduction that has caused euro area bank loans to decline by about 3% over the past year. What they are really up to, however, is money-printing and snookering the German sound money camp.

 
Tyler Durden's picture

5 Things To Ponder: Yogi-Isms





As we wrap up a holiday shortened trading week, there are several things to ponder this weekend.  Will the breakout of the S&P 500 of the trading range it has been stuck in since February hold? Is the negative print of GDP in the first quarter simply a weather related anomaly, or something else?  Is the decline in interest rates telling us something important? Are the currently high levels of complacency and bullishness in the markets a warning sign?  Or, is this just a continuation of the bull market cycle that started over five years ago with plenty of room left to run. "I always thought that record would stand until it was broken?" - Yogi Berra

 
Tyler Durden's picture

Still Think The Fed Isn't Fueling Inflation?





Just as we can't eat iPods, we can't subsist on official reassurances that the Fed and inflation are both benign.

 
Phoenix Capital Research's picture

The Epic Failure of Keynesianism in Japan





The Keynesians have failed. Japan has proved it. It’s only a matter of time before the rest of the world… and the markets catch on.

 
 
Tyler Durden's picture

Frontrunning: May 30





  • Ukraine Rebels Outfox Army to Dent Poroshenko Troop Goal (BBG)
  • Russia Withdraws Most of Forces From Ukraine Border: U.S. (BBG)
  • Super-Size Me! China’s ’Mini’ Stimulus Starts Expanding (BBG)
  • Option B: The blueprint for Thailand's coup (Reuters)
  • Big investors replace banks in $4.2tn repo market (FT)
  • Draghi Shields Catalan Independence Bid From Market (BBG)
  • U.S. companies seek cyber experts for top jobs, board seats (Reuters)
  • Parsley CEO Emerges as One of Youngest U.S. Billionaires (BBG)
 
Tyler Durden's picture

Stephen Roach Warns "The US Is Trapped In Perils Of Linear Thinking"





The temptations of extrapolation are hard to resist. The trend exerts a powerful influence on markets, policymakers, households, and businesses. But discerning observers understand the limits of linear thinking, because they know that lines bend, or sometimes even break. That is the case today in assessing two key factors shaping the global economy: the risks associated with America’s policy gambit and the state of the Chinese economy. It is often said that a crisis should never be wasted: Politicians, policymakers, and regulators should embrace the moment of deep distress and take on the heavy burden of structural repair. China seems to be doing that; America is not. Codependency points to an unavoidable conclusion: The US is about to become trapped in the perils of linear thinking.

 
Tyler Durden's picture

US Economy Shrank By 1% In The First Quarter: First Contraction Since 2011





Bottom line: for whatever reason, in Q1 the US economy contracted not only for the first time in three years, but at the fastest pace since Q1 of 2011. It probably snowed then too.

 
Tyler Durden's picture

Frontrunning: May 29





  • Snowden: 'no relationship' with Russian government (Reuters)
  • Bond Surge Worldwide Drives Index Yield to One-Year Low (BBG)
  • Shares flirt with record highs on ECB easing bets (Reuters)
  • Goldman Shuns Bonds Pimco’s Gross Favors in ‘New Neutral’  (BBG)
  • Porn may be messing with your head (Reuters)
  • Dish to Become Largest Company to Accept Bitcoin (AP)
  • To Make a Killing on Wall Street, Start Meditating (BBG)
  • Apple to get Beats, music mogul Iovine for $3 billion (Reuters)
  • Fink Says Leveraged ETFs May ‘Blow Up’ Industry  (BBG)
 
Tyler Durden's picture

John Hussman's Rant: "Someone Is Going To Have To Hold Stocks At These Prices"





"...for those who find our work to be a constant source of irritation to be regarded with open disdain, I am retracting all of it herewith – for you alone mind you – and I leave you free to buy with both hands to whatever extent you are inclined. Not that I encourage it really – that would be bad Karma – but someone is going to have to hold equities at these prices. It would best be those who are fully aware of our concerns and prefer to reject them. So the more you dislike my work, and particularly if you are nasty about it, I have no objection to you accumulating – perhaps on margin – as much stock from other investors as possible."

 
Tyler Durden's picture

Kyle Bass On China's "Contraction" And "The Fed's Worst Nightmare"





With the Fed tapering and both China “I don't think the markets are discounting what’s really happening in China,” and Japan’s currencies likely to weaken, the net impact on the U.S. will be deflationary, Kyle Bass warned in a recent presentation. That trend will be accelerated by the improvement in the balance of trade for the U.S., which had its current account deficit shrink due to increased hydrocarbon production. Bass warns, the crucial moment will come when the U.S. reports a sub-6% unemployment rate, meeting the target it has set for normalizing its monetary policy by ending QE and raising rates. He predicted that will come in July. That will be the Fed’s “worst nightmare,” he said. Raising rates would stifle growth and recreate unemployment problems, which would be disastrous politically, according to Bass.

 
tedbits's picture

Edge of a knife! Eurozone: Countdown to Crisis? Yes or No?









TedBits - Newsletter

 
Tyler Durden's picture

The Connection Between Oil Prices, Debt Levels, And Interest Rates





If oil is “just another commodity,” then there shouldn’t be any connection between oil prices, debt levels, interest rates, and total rates of return. But there clearly is a connection. As we have seen, rising interest rates will bring an end to our current equilibrium, by raising costs in many ways, without raising salaries. It will also reduce equity values and bond prices. A rise in the cost of extraction of oil, if it isn’t accompanied by high oil prices, will also put an end to our equilibrium, because oil producers will stop drilling the number of wells needed to keep production up.  If oil prices rise (regardless of reason), this will tend to put the economy into recession, leading to job loss and debt defaults. The only way to keep things going a bit longer might be negative interest rates. But even this seems “iffy.” We truly live in interesting times.

 

 
Tyler Durden's picture

Echoes Of 1937 In The Current Economic Cycle





It is not too early to ask how the present US business cycle expansion, already more than five years old, will end. The history of the last great US monetary experiment in “quantitative easing” (QE) from 1934-7 suggests that the end could be violent. Autumn 1937 featured one of the largest New York stock market crashes ever accompanied by the descent of the US economy into the notorious Roosevelt Recession. As we noted previously - it's never different this time...

 
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