Freddie Mac

How Jamie Dimon Became A Billionaire

Two years ago, bank analyst Mike Mayo asked JPM chief Jamie Dimon a simple question: why should affluent customers not pick UBS over JPM due to a mismatch in capital ratios, to which Dimon's response was even simpler: "that's why I'm richer than you." To which we then added: "No logic, no rationale: all about the bottom line, which to Jamie at least is all that matters. The bottom line was indeed all, because as Bloomberg calculated overnight, over the past several years, Jamie Dimon quietly became not just "richer than you", but "much" richer: his net worth is now well over $1 billion!

Housing Recovery - Real Or Memorex

The rising risk to the housing recovery story lies in the Fed's ability to continue to keep interest rates suppressed. It is important to remember that individuals "buy payments" rather than houses. With each tick higher in mortgage rates so goes the monthly mortgage payment. With wages remaining suppressed, 1 out of 3 Americans no longer counted as part of the work force or drawing on a Federal subsidy, the pool of potential buyers remains tightly constrained. While there are many hopes pinned on the housing recovery as a "driver" of economic growth in 2015 and beyond - the lack of recovery in the home ownership data suggests otherwise.

Frontrunning: May 12

  • Bonds Extend Global Rout as Europe Stocks Slide, Dollar Weakens (BBG)
  • Verizon Communications to Buy AOL for $4.4 Billion (BBG)
  • Fresh Nepal earthquake kills dozens, triggers panic (Reuters)
  • Sen. Shelby to Unveil Legislation Heightening Fed Scrutiny (WSJ)
  • Bill Gross: The Amount of Money I'll Give Away 'Is Staggering, Even to Me' (BBG)
  • U.S. rejects notion that Gulf rulers snubbing Obama summit (Reuters)... what about AIIB?
  • In Asia, Debt Market Gets Tougher (WSJ)
  • Iran’s Mahan airline defies sanctions in shadowy aircraft deal (FT)

Government Using Subprime Mortgages To Pump Housing Recovery - Taxpayers Will Pay Again

To paraphrase H.L. Mencken, anyone who wants the government and Federal Reserve to create a housing recovery, deserves to get it good and hard, like a four by four to the side of their head. Subprime mortgages, subprime auto loans, and subprime student loans driven by preposterously low interest rates are the liquefying foundation of this fake economic recovery. Most rational people would agree that loaning money to people who will eventually default is not a good idea. But it is the underpinning of everything the Fed and government apparatchiks have done to keep this farce going a little while longer. It will not end well – Again.

The Third And Final Transformation Of Monetary Policy

The law of unintended consequences is becoming ever more prominent in the economic sphere, as the world becomes exponentially more complex with every passing year. Just as a network grows in complexity and value as the number of connections in that network grows, the global economy becomes more complex, interesting, and hard to manage as the number of individuals, businesses, governmental bodies, and other institutions swells, all of them interconnected by contracts and security instruments, as well as by financial and information flows. It is hubris to presume, as current economic thinking does, that the entire economic world can be managed by manipulating one (albeit major) subset of that network without incurring unintended consequences for the other parts of the network.

Multibillion Hedge Fund Manager: "Ultimately QE Will Fail; US And China Might Enter Recession At The Same Time"

"Ultimately, the current QE programs will fail. I think most likely through a large devaluation in the emerging market currencies.  Having dodged and parried so many blows from Central Bank QE programs, the market is seemingly failing to break higher. Breadth is narrowing in the US stock market, and credit spreads widening. Economic data, with the exception of jobs, which is a lagging indicator, indicate the US economy is peaking. To me it looks like the US and China might go into recession at the same time."

Frontrunning: April 15

  • China growth slowest in six years, more stimulus expected soon (Reuters)
  • EU charges Google over shopping searches, to probe Android (Reuters)
  • A Chinese Paradox: Slow Growth Is Good, Stock Bubbles Welcome (BBG)
  • Draghi Seen Dispelling Duration Doubts About QE Program (BBG)
  • IEA Sees OPEC Supply Jumping Most in Four Years on Saudi Surge (BBG)
  • SEC Reaches Settlement with Former Freddie Mac  (WSJ)
  • Kerry says confident Obama can get final deal on Iran (Reuters)
  • Regulators Call for Short-Term Loan Changes to Handle ‘Too-Big-to-Fail’ (WSJ)
  • Florida Doctor Linked to Sen. Robert Menendez Indicted for Medicare Fraud (WSJ)

One Last Look At The Real Economy Before It Implodes - Part 4

The implosion of America serves a very particular purpose. It is not a product of blind coincidence, fate, political stupidity or corporate greed. It is an engineered event meant to clear the way for an even more sinister economic environment designed to establish a final economic empire with the purpose of permanently enslaving us all.

Warren Buffett, Slumlord – Predatory Loans, Kickbacks & Preying On The Poor

In so many ways, Warren Buffett and modern America are the same thing. An idea packaged and marketed so brilliantly, most of humanity unquestionably believes the myth.  However, when you look beneath the surface, it becomes increasingly clear that neither of them actually come close to what’s printed on the package.

Ben Bernanke Pens First Blog Post, Defends Fed, Says He "Was Concerned About Seniors"

"When I was chairman, more than one legislator accused me and my colleagues on the Fed’s policy-setting Federal Open Market Committee of “throwing seniors under the bus” (to use the words of one senator) by keeping interest rates low. The legislators were concerned about retirees living off their savings and able to obtain only very low rates of return on those savings. I was concerned about those seniors as well."

- Ben Bernanke first blog post

The American Dream Part 3 - Moonshine, Scam, & The Delusion Of Democracy

When we left you yesterday, we were trying to connect the bloated, cankerous ankles of the US economy (Part 1) to the sugar rush of its post-1971 credit-based money system (Part 2). Today, we look at the face of our government. It is older... with more worry lines and wrinkles. But whence cometh that pale and stupid look? That is also the result of the same advanced diabetic epizootic that has infected American society.