Recession

Reggie Middleton's picture

Professor Espouses 2+2=4, Lauded with Accolades And Wins Nobel Prize For Real Estate Bubbles





I like Professor Shiller and respect his work. Really, I do, but... Massive bubbles, the sort of the proportion of the 2008 crisis, are nigh impossible to miss if you can add single digits successfully and are able to keep your eyes open for a few minutes at a time. Yes, I truly do feel its that simple. I saw the property bubble over a year in advance, cashed out and came back in shorting - all for a very profitable round trip. Was I a genius soothsayer? Well, maybe in my own mind, but the reality of the situation is I was simply paying attention. Let's recap:

 
Tyler Durden's picture

5 Things To Ponder For The Rest Of The Week





Despite the ongoing antics in Washington the market remains less than 5 points (at the time of this writing) from its all-time closing high.  If the markets were concerned about economics, fundamentals or potential default; stock prices would be significantly lower.  The reality is that as long as the Federal Reserve remains convicted to its accommodative policies the argument for rationality is trumped by the delusions of Mo' Money. We have seen these "Teflon" markets before - do we really need to remind you what happens to a Teflon pan when you finally scratch the surface? In the meantime here are 5 things to ponder as the week progresses...

 
Tyler Durden's picture

Guest Post: Puerto Rico's Debt Crisis – Another Domino Keels Over





If one looks at various sovereign states, it seemingly doesn't matter that their public debts continue to rise at a hefty clip. The largest ones are considered to have economies that are big and resilient enough to be able to support the growing debt load. Part of the calculus is no doubt the notion that they contain enough accumulated wealth to allow their governments to confiscate even more of their citizens property and income in order to make good on their debts. Then there are the small and mid-sized states in the EU that are getting bailed out by their larger brethren, or rather, the tax payers of their larger brethren. However, things are different when the territories or municipalities concerned are considered too small and have no such back-up. Detroit was a recent case in point, and it seems that the US territory of Puerto Rico is the next domino to fall.

 
Tyler Durden's picture

"What Politicians Want Is A World Of Pure Beta And Zero Alpha"





What politicians want from their regulatory efforts is a world of pure beta and zero alpha. This is the ultimate “level playing field”, where no one knows anything that everyone else doesn’t also know. The presumption within regulatory bodies today is that you must be cheating if you are generating alpha. How’s that? Alpha generation requires private information. Private information, however acquired, is defined as insider information. Insider information is cheating. Thus, alpha generation is cheating. QED. Why would politicians want an alpha-free market? Because a “fair” market with a “level playing field” is an enormously popular Narrative for every US Attorney who wants to be Attorney General, every Attorney General who wants to be Governor, and every Governor who wants to be President … which is to say all US Attorneys and all Attorneys General and all Governors. Because criminalizing private information in public markets ensures a steady stream of rich criminals for show trials in the future. Because the political stability of the American regime depends on a widely dispersed, non-zero-sum price appreciation of all financial assets – beta – not the concentrated, zero-sum price appreciation of idiosyncratic securities. Because public confidence in the government’s control of public institutions like the market must be restored at all costs, even if that confidence is misplaced and even if the side-effects of that restoration are immense.

 
Tyler Durden's picture

Frontrunning: October 14





  • Headline of the day: U.S. Risks Joining 1933 Germany in Pantheon of Deadbeat Defaults (BBG)
  • As Senate wrestles over debt ceiling, Obama stays out of sight (Reuters)
  • The "Truckers Ride for the Constitution" that threatened to gum up traffic in the capital was a dud as of Friday afternoon (WSJ)
  • China New Yuan Loans Top Estimates as Money-Supply Growth Slows (BBG)
  • Vegetable prices fuel Chinese inflation (FT)
  • China Slowing Power Use Growth Points To Weaker Output Data (MNI)
  • London Wealthy Leave for Country Life as Prices Rise (BBG)
  • Gulf oil production hits record (FT)
  • Every year like clockwork, analysts start out bizarrely optimistic about future results, then “walk down” their forecasts  (WSJ)
  • Weak Exports Show Limits of China’s Growth Model (WSJ)
 
Tyler Durden's picture

Mark Spitznagel Warns "Interventionist Policies Cause Of, Not Cure For, Busts"





Time is nearly up for Ben Bernanke, the chairman of the Federal Reserve who supposedly applied his scholarly knowledge of the Great Depression to steer the U.S. to safety after the financial crisis. In truth, Bernanke navigated a monetarist course that favored intensive intervention, following in the footsteps of many mainstream economists who grossly misunderstood the lessons of the Crash of 1929 and the ensuing malaise. That lesson is that when corrective crashes occur, intervention is far from the cure — it is the cause.

 
Tyler Durden's picture

Guest Post: They’re Coming For Your Savings





Another of history’s many lessons is that governments under pressure become thieves. And today’s governments are under a lot of pressure.

 
Tyler Durden's picture

Peter Schiff On The Debt Ceiling Delusions





The popular take on the current debt ceiling stand-off is that the Tea Party wing of the Republican Party has a delusional belief that it can hit the brakes on new debt creation without bringing on an economic catastrophe. While Republicans are indeed kidding themselves if they believe that their actions will not unleash deep economic turmoil, there are much deeper and more significant delusions on the other side of the aisle. Democrats, and the President in particular, believe that continually taking on more debt to pay existing debt is a more responsible course of action. Even worse, they appear to believe that debt accumulation is the equivalent of economic growth.

 
Tyler Durden's picture

The Ultimate "What Would Janet Yellen Do?" Cheatsheet





Pulling from an extensive record of public speeches and FOMC meeting transcripts, Goldman Sachs reviews Fed Chair-nominee Janet Yellen's views on a number of policy-relevant issues.

 
Reggie Middleton's picture

Lies, Damn Lies and the EU Confiscation Of Greek Sovereignty Masked As The Bailout That Never Happened





Two bailouts, a default and a half later, it should be obvious that Greece was stripped of its sovereignty for nothing. Should I say "I told you so"???

 
Pivotfarm's picture

Obamacare: I’ve Started So I’ll Finish





As Warren Buffet openly states that he believes that a default on US debt will be catastrophic and that lawmakers in Congress need to get their act together and get the federal government back to work by passing the budget we might well wonder if it’s just for show or if he really believes that.

 
Sprout Money's picture

Meanwhile, in Europe...





While all eyes are on 'pretty woman' at the head of the Fed, things are taking a turn for the worse on the European continent.

 
Tyler Durden's picture

12 Ominous Warnings Of What A US Default Would Mean For The Global Economy





As we have discussed previously, the "partial government shutdown" that we are experiencing right now is pretty much a non-event - especially with the un-furloughing of The Pentagon.  Yeah, some national parks are shut down and some federal workers will have their checks delayed, but it is not the end of the world.  In fact, only about 17% of the federal government is actually shut down at the moment.  This "shutdown" could continue for many more weeks and it would not affect the global economy too much. On the other hand, if the debt ceiling deadline (approximately October 17th) passes without an agreement that would be extremely dangerous. A U.S. debt default that lasts for more than a couple of days could potentially cause a financial crash that would make 2008 look like a Sunday picnic. If a debt default were to happen before the end of this year, that would bring a tremendous amount of future economic pain into the here and now, and the consequences would likely be far greater than any of us could possibly imagine.

 
Tyler Durden's picture

Guest Post: Five Years In Limbo (And Counting)





Five years later, while some are congratulating themselves on avoiding another depression, no one in Europe or the United States can claim that prosperity has returned. The financial system may be more stable than it was five years ago, but that is a low bar – back then, it was teetering on the edge of a precipice. Those in government and the financial sector who congratulate themselves on banks’ return to profitability and mild – though hard-won – regulatory improvements should focus on what still needs to be done. Some are pleased that the economy may have bottomed out. But, in any meaningful sense, an economy in which most people’s incomes are below their pre-2008 levels is still in recession. An The glass is, at most, only one-quarter full; for most people, it is three-quarters empty.

 
Tyler Durden's picture

Frontrunning: October 8





  • Hilsenrath: Tense Negotiations Inside the Fed Produced Muddled Signals to Markets (WSJ)
  • Biggest US Foreign Creditors Show Concern on Default Risk (BBG)
  • Shutdown Costs at $1.6 Billion With $160 Million Each Day (BBG)
  • What default? Republicans downplay impact of U.S. debt limit (Reuters)
  • Top Bankers Warn on U.S. Debt Proposal (WSJ)
  • India to stick with austerity despite looming election (Reuters)
  • Japan's Current-Account Surplus Plunges (WSJ)
  • Amazon Wins Ruling for $600 Million CIA Cloud Contract (BBG)
  • German Factory Orders Unexpectedly Fall on Weak Recovery (BBG)
  • Britain's Higgs, Belgium's Englert win 2013 physics Nobel prize (Reuters)
  • Supreme Owner Made a Billionaire Feeding U.S. War Machine (BBG)
 
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