Reality

Financialization & The Erosion Of Growth

"As fees go up by half-a-percent, we reach into the client’s balance sheet, snatch the half-a-percent, and turn it into income; it’s almost magic - capital into income... but we lower the savings rate of our clients (savings and investment rate) by half-a-percent as our fees go up, so we get short term GDP kick from our income, at the expense of lower long-term growth on the part of the system."

Knave Dave's picture

After years of trying to create a "wealth effect", the Federal Reserve is slowly dialing down its special-effects machine. Yet, this week, the stock market provided dot-com-era proof of completely iirrational exuberance -- the kind of stupid stuff that happens when cheap money follows free money.

"The Fed Is Once Again Making A Policy Error"

"I must admit, I am a little surprised the Fed's goal of withdrawing accommodation without having the whole financial system come crashing down has gone so smoothly. But I wonder if the Federal Reserve isn’t pushing their luck..."

Traders "Swoop" On Stocks, Oil Rises For 8th Day But Bonds Still Don't Buy It

S&P futures are unchanged and Asian stocks closed mixed, however European stocks rebounded for first time this week, led by auto stocks after Daimler’s quarterly profit, as a break in alarming political news prompted traders to "swoop" - as Reuters puts it - on equities, cooling a safe-haven rally that saw the yen and gold at five-month highs and bond yields to drop their lowest this year.

Breslow Turns Bullish: "Don't Assume Each Event Will End Badly"

"Too many commentators have fallen into the “everything is binary” trap and decided that if you assume each event will end badly, there’s material to turn out a good rant. The reality is, actual investors have learned that all binary outcomes won’t resolve themselves in the same way and they have to find more than one way to deconstruct events."

Monumental Gridlock Meets Blind Euphoria

"To me, this situation feels like a slow-motion train wreck where all you can do is watch... Washington’s monumental gridlock is on a collision course with investors’ blind euphoria. We’re all on one train or the other. Hold on tight."

TDB's picture

I just read an article from what the mainstream considers a reputable source of news, the New York Times. The article talked all about monetary policy and didn’t say a thing about the real world.

Because the Federal Reserve is not operating in the real world. They are operating in a world of currency manipulation that they pass off as saving the economy. They act like they are guardians of the dollar when in fact they are just bandits for the government.

Populism In Our Time - "The Status Quo Is The Fundamental Problem"

"Reality ultimately resides in popular will, not in the narrative wealth-funded institutions foster. Diverse societies with a plurality of political ideals, social mores and economic goals are great. We should all watch out when they coalesce around a general sense of helplessness."

Shale Hotspot Draws In Another Big Oil Player

The lower-for-longer oil price reality is prompting both Exxon and Chevron to invest in quicker returns in shale-on-home-soil instead of pursuing huge costly projects that take years to create and years more to yield returns on investment.

Luring Trump Into Mideast Wars

"Tuesday’s poison-gas incident in Idlib thus offered a way out regardless of who was actually responsible. Trump decided to fire away before the facts were in because the enemy he is most worried about is not the one half a world away in Syria, but the Democratic-neocon alliance in his own backyard.  The only way for Trump to make peace with the “deep state” in Washington was by waging war on Syria."

Great Debt Unwind: Personal And Commercial Bankruptcies Surge In March

The Fed’s monetary policies have purposefully encouraged businesses and consumers to borrow. But debt doesn’t just go away. It accumulates. By now, an increasing number of businesses and consumers are suffocating under this debt overhang in an economy that never developed the “escape velocity” needed – and hyped by Wall Street for years – to outgrow this debt. Rising bankruptcies are a turning point in the “credit cycle.”