The Past Two Weeks Were A Preview Of The ‘Horror Movie’ Coming To The Bond Market This Summer
Over the past few weeks, attention in financial markets has once again turned to the prospect of the Federal Reserve tapering back its monetary stimulus, spurred on by public speeches from Fed presidents and articles fromWSJ reporter Jon Hilsenrath, who is viewed as close to the central bank.
As concerns that the Fed may begin [...]
April 26 (Bloomberg) — Aegis Capital CIO Stanley Crouch and The Philadelphia Trust Company President and CEO Mike Crofton discuss the economy, stocks and bonds with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)
RED ALERT: BOND MARKET CRASH DEAD AHEAD!
WATCH OUT! Up ~ 30bp for the 10 year!
Bill Gross said the three-decade bull run in bonds ended last week when the 10-year Treasury yield hit 1.67%, in his latest attempt [...]
by Charles Hugh-Smith
Bernanke’s Neofeudal Rentier Economy (May 7, 2013)
The Fed has directly created a neofeudal rentier economy and society.
Federal Reserve Chairman Bernanke is a Reverse Robin Hood, robbing from the lower 95% and giving to the financier class. The Real Reverse Robin Hood: Ben Bernanke and his Merry Band of Thieves (August 31, 2012).
It’s worth understanding the mechanisms of this wealth transfer: in essence, the Fed extends low-cost credit (i.e. “free money”) [...]
by Jimmy Mengel, Wealth Wire:
The equity time bomb has starting ticking, and investors may have just a small window to ride it before things blow up.
With a name like Dr. Doom, we’ve come to rely on Nouriel Roubini to lay the gloom on pretty thick.
But this week he tossed in a little sweet with his sour…
He’s actually advising people to buy stocks.
Roubini is the same economist who warned of the S&P dropping to [...]
Fed Keeps Interest Rates Low, Continues Bond Buying Program
The Federal Reserve held fast to its ultra-accommodative monetary policy Wednesday, solidified by what board members described as an economy weakened by fiscal policy.
Interest rates will remain at historically low levels while the U.S. central bank will not alter its $85 billion a month asset purchasing program, the Fed’s Open Markets Committee decided at this week’s meeting.
While recent meetings have been remarkable [...]
by Charles Hugh-Smith of OfTwoMinds blog,
Inflating phantom assets to collateralize expanding debt is failing due to diminishing returns on stimulus, zero-interest rates, money-printing and monetization of Federal debt.
That the policies of central states and banks have led to one disastrous asset bubble after another over the past 15 years is undeniable. This poses the question: is this serial bubble-blowing intentional, or are the bubbles merely unintended consequences of the neoliberal, neofeudal model [...]
The Chairman of China Securities Regulatory Commission (similar to the US SEC) said that China can increase by 10-fold the size of the two main channels by which foreign investors buy mainland financial assets.
It can, Guo Shuqing said, increase quotas under the Qualified Foreign Institutional Investors and the Renminbi Qualified Foreign Institutional Investors. The latter would make it easier for the yuan in Hong Kong (CNH) to be used to [...]
Sitting onstage in Washington’s Ronald Reagan Building in July, Lloyd C. Blankfein saidGoldman Sachs Group Inc. (GS) had stopped using its own money to make bets on the bank’s behalf.
“We shut off that activity,” the chief executive officer told more than 400 people at a lunch organized by the Economic Club of Washington, D.C., slicing the air with his hand. The bank no longer had proprietary traders who “just put on risks that [...]
GLOBAL markets are on a journey into the unknown, with asset prices increasingly determined by a handful of politicians and technocrats without the bedrock once provided by risk-free sovereign debt.
UBS head of global sovereign research Michael Dow said that the explosion in public debt, and the frantic efforts by politicians and policymakers to deal with the consequences, had produced an environment where “policy risk” now determined asset prices.
“The actions of [...]
When financial markets in the United States crash, so does the U.S. economy. Just remember what happened back in 2008. The financial markets crashed, the credit markets froze up, and suddenly the economy went into cardiac arrest. Well, there are very few things that could cause the financial markets to crash harder or farther than a derivatives panic. Sadly, most Americans don’t even understand what derivatives are. Unlike stocks [...]
Sales stumbles raise fresh worry for corporate America
Reuters: A flagging world economy took a toll on much of Corporate America in the third quarter, leading the likes of eBay Inc, American Express, IBM and Textron Inc to miss Wall Street’s sales targets or warn that spending was slowing into the holidays.
Those misses sparked concerns among investors that corporate America’s year-long streak of profit growth could be nearing an end as [...]
From The Reformed Broker:
In a market meltup, it’s difficult for an advisor to make the case to certain clients that bonds have a place in their portfolios. They look at their bond holdings with disdain during periods where they drag against a runaway stock market. These are the same clients who are furious that they’re fully invested through a correction, but that’s a whole other blog post…
Fidelity Investments is out [...]
When Barack Obama started his Presidency, there was much discussion of how Sweden in the early 1990s had briefly nationalized and then sold off its failing banks and quickly restored its economy, while Japan had instead bailed out its failed banks’ stockholders and bondholders, and never recovered. Why is the United States copying the Japanese failure, instead of the Swedish success?
President Obama started his Presidency with the opportunity to try the [...]
In his new note, PIMCO’s Bill Gross revisits his widely-panned letter from August about how equities were screwed.
This time he takes a more moderate tone, but still insists that equities are not good to perform as well in the future as they have in the past.
That being said, he recommends a fairly normal portfolio balance for most investors, and he actually says stocks will do better than bonds.
If you’re curious about his reaction to all [...]
* Public pensions have record assets in alternatives
* Alternatives are high-risk and have high fees
* Pensions still face high funding deficits
* Alternatives viewed as better than stocks and bonds
By Sam Forgione
NEW YORK, Aug 16 (Reuters) – Faced with growing obligations and shrinking returns, many of the largest U.S. public pensions have raised their exposure to alternative investments to record levels this year, despite ongoing criticism of the risks and costs.
There are now 1.5 quadrillion in derivatives floating around. The banks said the US government must bail them out in 2008. Now there are 3 times the derivatives as in 2008.
By the end of 2012 there might be 2 quadrillion in derivatives, I don’t see how we can continue much longer with this massive bubble being blown up by the banks. When it pops it will take down the whole [...]
Draghi said yesterday the ECB would do “whatever it takes to preserve the euro,” comments that helped boost European stocks and bonds.
“The typical pattern right through this crisis has been one where they make certain statements that get markets excited and then we unfortunately have to grapple with the detail,” Wadhwani, founder of Wadhwani Asset Management LLP, said on Bloomberg Television in London today. “And when the markets realize that [...]
(Bloomberg) — Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., forecasts real growth in the U.S. will be about 1.5% a year for at least the next 10 years.
Slower labor-force expansion, overextended credit and potential geopolitical or environmental shocks will limit growth as the economy struggles to duplicate previous productivity gains, Gross said in a July 11 telephone interview.
“Slower growth means lower returns on [...]
VENICE — Concerns grew on Monday that Italy could be the next victim of Europe’s financial infection, leading nervous investors to sell Italian stocks and bonds and damping euphoria over a weekend deal to bail out Spain’s banks.
Italian officials privately expressed concern that the 100 billion euros, or $125 billion, that Europe pledged to Spanish banks might not stop the troubles from spreading.
Italy’s main stock index was Europe’s worst performer on Monday, [...]
When $500,000 was discovered hidden in the walls of one home a dispute as to who rightfully owned the money quickly broke out.
The contraction company who found the cash – hidden inside military-style ammunition cans – thought they should keep it while the new-homeowners argued the money was rightfully theirs.
But neither of those parties won the windfall after an Arizona court ruled that the money should be returned to the [...]
Economic Collapse Blog
May 12, 2012
When news broke of a 2 billion dollar trading loss by JP Morgan, much of the financial world was absolutely stunned. But the truth is that this is just the beginning. This is just a very small preview of what is going to happen when we see the collapse of the worldwide derivatives market. When most Americans think of Wall Street, they think of a bunch [...]
Via Simon Black of Sovereign Man blog,
[Editor's note: Tim Price, a frequent Sovereign Man contributor and Director of Investment at PFP Wealth Management in London, is filling in for Simon today.]
Roy Ward Baker’s 1958 classic film A Night To Remember, recounts the final night of the RMS Titanic based on survivor interviews from Walter Lord’s 1955 book of the same name.
One scene from the movie depicts a lounge in one of [...]
By David Galland, Casey Research
It seems that the mainstream investment community only takes a break from ignoring gold to berate it: one of gold’s most outspoken critics, uber-investor Warren Buffett, did so recently in his Latest Shareholder Letter. The indictments were familiar; gold is an inanimate object “incapable of producing anything,” so any investor holding it instead of stocks is acting out of irrational fear.
How can it be that Buffett, perhaps the [...]
by Bill Sardi
Recently by Bill Sardi: Stealth Withdrawal Of Wealth From China By Its Entrepreneurs Unwittingly Helped China Avert Runaway Inflation. But That Practice Is About To Be Halted.
Prior to the housing market collapse of 2008, about 70% of the revenues of US banks were comprised of profits made off of real estate loans. But with a self-induced real estate bubble where lenders relaxed loan [...]
Courtesy of Lee Adler of the Wall Street Examiner
The following is an extended excerpt from the Wall Street Examiner Professional Edition weekly Treasury update.
Last week was a light auction week with a net of just $3 billion in new supply settling on Thursday. That took the pressure off stock and bond prices. The fact that neither market could mount a sustained rally suggests that markets are weak. Stocks and bonds gyrated [...]
It’s Time to Think in Terms of Gold
By Jeff Clark, BIG GOLD
A young woman – let’s call her Andrea – inherited some money from her father in late 1997. She was only nineteen at the time. Not knowing the first thing about investing, she kept the money in stocks and bonds as her father had, wanting to hold on to it until she really needed it. She played it “safe.”
She got [...]
ASPO-USA Conference Takeaways
Here’s what I included as an off-topic comment I put in my weekly report at my not-related-to-investing-or-energy day job to try to give some of the people I work with a bit of a wake-up call:
“Off topic: I attended the Peak Oil conference downtown last week. Here’s the key results:
Peak oil is proceeding right on schedule with growing oil supply/demand tightness leading up to the Peak around 2015.
THE END OF AN ERA
“All paper assets are either worthless now or will become worthless in the very near future including paper fiat currencies. If you want to help bring down this corrupt system the best way is to opt out.
Do not play their game, you cannot win. Sell your stocks and bonds and use the funds to buy real hard assets.”
[Editor's Note: As my readers know, [...]