St. Louis Fed

With The IMF (and Germany to a less extent) apparently peeing in the Greek Deal pool, perhaps it is worth considering what happens next if this "Greece is rescued" deal is not done. Who can save Greece? Who will pay The IMF? Why, that's simple, the good ol' American taxpayer thanks to The Fed's lifeline...

One hoary old myth claims the interest rate you see isn't real. You see, it’s only nominal. To calculate the real rate, you're supposed to adjust the nominal rate by inflation.

Underneath the Propaganda, the Economy Is In BAD Shape …

FTW (For Those Who Say I Just Don't Get It... Get This!) There seems a shift showing itself in dramatic fashion unseen since the 2008 financial meltdown. Not only are some key players, or institutions beginning to notice some troubling signs; but rather; those very signs that everyone was told 'won’t or shouldn’t happen', not only are, they’re starting to rear their ugly heads in much greater frequency.

For once Mario Draghi was right. A day after the European central bank head warned of a spike in volatility, volatility did just that, with markets everywhere from China to Europe seeing volatility explode.

One might be predisposed to thinking that monetary policies aimed explicitly at inflating prices for the assets most likely to be concentrated in the hands of the wealthy would have a high likelihood of exacerbating the wealth divide. Not so, says Ben Bernanke in a new blog post. "Certainly, inequality and lack of social mobility are issues of first-order significance for economic policy in general. Should they also be first-order considerations for the making of monetary policy? I have my doubts."

When the "very serious people" start to admit that the entire house of cards was held together with nothing but bullshit and propaganda, it may be a time to panic...

The most prominent market event overnight was once again the action in China's penny-index, which after tumbling at the open and briefly entering a 10% correction from the highs hit just two days ago, promptly saw the BTFDers rush in, whether retail, institutional or central bankers, and after rebounding strongly from the -3% lows, the SHCOMP closed practically unchanged following a 2% jump to complete yet another 5% intraday swing on absolutely no news, but merely concerns what the PBOC is doing with liquidity, reverse repos, margin debt, etc. Needless to say, this is one of the world's largest stock markets, not the Pink Sheets.

Put simply: the market is quickly running out of props. Eventually we’re going to get a correction. But with so little buying power in the markets that could correction would very easily become a Crash.

The Economist is a quintessential establishment publication. Keynesian shibboleths about “market failure” and the need to prevent it, as well as the alleged need for governments to provide “public goods” and to steer the economy in directions desired by the ruling elite with a variety of taxation and spending schemes as well as monetary interventionism, are dripping from its pages in generous dollops.  The magazine has one of the very best records as a contrary indicator whenever it comments on markets. While gold hasn’t yet made it to the front page, but the Economist has sacrificed some ink in order to declare it “dead” (or rather, “buried”).

It's not easy being a millionaire in the New Normal.

Democrats are moving on a “$12 by ‘20” pitch, whereby they hope to have the minimum wage hiked to $12 within the next five years. The rationale is simple: restore the purchasing power Americans once had and you will restore robust economic growth. Ok, maybe it's not that simple, because as Republicans note, raising the pay floor by nearly 70% may well cost America jobs, thus making things worse for the very people the wage hike was meant to help.

Not long ago we noted that contrary to the old adage, money can indeed buy happiness. Given this, it stands to reason that the converse is likely true as well. That is, no money probably contributes to unhappiness. Sure enough...

Some borrowers are allowed to remain in a perpetual state of default even as they avoid actual payment default and in the end, their loans are legally discharged at the expense of the US taxpayer. Meanwhile, the payments they aren't making appear to be classified by the Department of Education as both "in repayment" and "current."