All in Economics
The world’s central bankers and white shoe financial firms have created a mystical never-never land where nothing is real or that can be trusted.
I don’t pretend to have any answers as to the results of this trade kerfuffle, should it happen. However, Jim Grant wrote a couple weeks ago in Grant’s Interest Rate Observer, “The whole world lives at the end of the whip of China’s credit growth.”
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 easy money chickens are ready to come home to roost. Zero Hedge reports, “legendary trader Paul Tudor Jones (PTJ) argues that US inflation is set to accelerate sharply, making bonds a very poor investment, and that the Fed must act swiftly to tackle financial bubbles created by prolonged monetary easing.”
According to Buckles, et al, exuberance in the bedroom, irrational or otherwise, begins to wane prior to a recession.
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.
The end of quantitative easing (QE) and the beginning of quantitative tightening (QT) reflects a much tighter Fed today. Peshut writes, “In response to the Fed’s increasingly tighter monetary stance, the growth rate of TMS has decelerated dramatically, from 11.15% YOY in October of 2016 to 3.10% YOY in December of 2017.”
Toby Bozzuto says "That being said, it is a tale of two cities. In the middle income and the lower income markets, people are spending proportionally more on their rent — so much so I believe there's an acute crisis headed our way."
The NYT pair writes, “The fear now is that inflation will start to rise more quickly, potentially crimping global growth or forcing borrowing costs higher,” making it sound like inflation comes and goes with the wind.
Yes, the economy is putty in the skilled hands toiling at the Eccles Building. Meanwhile, the St. Louis outpost of America’s central bank just published in its latest monthly report “Why is Inflation so Low?”
However, Tesla is the catalyst for all of this development, despite being structurally bankrupt, “which is to say it depends completely on continued capital infusions for its survival,” Montana Skeptic writes on Seeking Alpha.
“Trump had a Clintonesque aura around him,” Smith wrote, “the effervescent divinity of a studied deal-maker, and a categorical ability to communicate and inspire the belief of others in his personal vision. He could no doubt have been an evangelist.”
Reversing trillions of dollars worth of securities purchases will create market turmoil. And now that price inflation has entered the equation, the ride is bound to be bumpy. So, who should 401k investors be worried about and keeping an eye on? Bianco and Santelli agree, that person is ECB head man Mario Draghi.
Financial basket case Greece, has 10-year bonds yielding 3.69%, 69 basis points is all Germany is paying and France’s bonds are yielding 96 basis points. These rates are as fabricated and detached from reality as the silicone sex doll brothels now opening throughout Europe.
Habib told the packed room, “if builders would have consulted their inner Iacocca's, they wouldn’t have built so many homes.” A significant number of future home buyers had been aborted.
“What if there isn’t actually any use for a distributed ledger at all? What if, ten years after it was invented, the reason nobody has adopted a distributed ledger at scale is because nobody wants it?”
BPO prices have fallen from $50 to $25, with one Indian company, AbVin Ventures LLP, offered to do the work for $10 a house.
Not surprisingly, most of this wrongdoing involved Presidents and Secretary-Treasurers of local unions stealing from their own members. The thefts ranged from thousands to millions of dollars, with the thieves spending the money on cruises, tickets to Carrie Underwood and Sesame Street Live concerts.
The way Beijing-based Dagong Global, a Chinese rating agency, sees it, Uncle Sam’s paper deserves, “a ‘negative outlook’ because of the US federal government’s declining capacity to repay debt, a situation worsened by tax cuts.”
The current price swings across seemingly every cryptocurrency are bringing to the fore a question that has loomed over the industry since its inception: to what extent can a virtual asset be a store of value? By swapping out of digital gold and into the real thing, some investors may be providing an answer.
