All in Economics

Trumping to Serfdom

Hayek wrote that psychopaths, er politicians, have to “weld together a closely coherent body of supporters”...appealing “to a common human weakness. It seems to be easier for people to agree on a negative programme – on the hatred of an enemy, on the envy of the better off – than on any positive task.”


Problem Canary in Bank Coal Mine?

The number of problem banks was only 92 at quarter end, the assets of problem banks more than tripled to more than $60 billion. That means two or three banks of considerable size are now considered “problem” banks.  The regulator doesn’t say which banks, so lines don’t form outside.

Demand for Gold Coins Crashes

When the public was worried the end of the modern financial world was near, they were stocking up on gold, and presumably canned goods.  However, the last few years has proven the coast is clear: paper and computer generated “assets” will do just fine.

Running out of Dr. Copper

Leigh Goehring told Jim Grant copper is headed to $7 a pound, given how many electric vehicles will be built. EVs require three to four times the copper as traditional vehicles. He told Grant it will add 50 percent to the amount of copper demand.

Not Such a Wonderful Life: Mortgage Liquidity Crisis

These vulnerabilities are very real, should there be a sudden increase in interest rates or other significant change in the market that causes collateral values to drop. Most nonbank lenders have multiple warehouse lines.  However, cross default provisions will trigger a scramble amongst warehouse lenders for a mortgage originator’s assets should it default on one of its lines.

The Fed says Expectations Cause Inflation

In the heads of the Fed heads, it’s the expectations of us pawns on the Fed’s chessboard which cause the general price level to increase or decrease.  Through their Keynesian-colored glasses, in the view of Fed economists, the supply of money has nothing to do with price inflation. The problem is us.