Money-Supply Growth Falls to 8-Month Low as Mortgage Rates Rise
Showing posts with label Interest Rates. Show all posts
Showing posts with label Interest Rates. Show all posts
Sunday, November 25, 2018
Tuesday, February 16, 2016
Ominous Banking Event Taking Place
Over at The Wall Street Journal, they have discovered an ominous event taking place; identifying a "NIRP (negative interest rate policy) "Doom Loop" that threatens to wipeout banks and the global economy".
Europe has just passed #8 while the US just passed #5. Once an "event" takes place, hypothecation reigns supreme and the loop begins to swirl at exponential speed. As the WSJ noted, "the consequences are deeply worrying" and Zero Hedge is correct in advising to "buckle up".
As painful as it will no doubt be, the correct course of action would be to allow a crash and reset rather than extending quantitative easing with bailouts, or God forbid, a new idea of bailing IN.
This Is The NIRP "Doom Loop" That Threatens To Wipeout Banks And The Global Economy--Zero Hedge
Europe has just passed #8 while the US just passed #5. Once an "event" takes place, hypothecation reigns supreme and the loop begins to swirl at exponential speed. As the WSJ noted, "the consequences are deeply worrying" and Zero Hedge is correct in advising to "buckle up".
As painful as it will no doubt be, the correct course of action would be to allow a crash and reset rather than extending quantitative easing with bailouts, or God forbid, a new idea of bailing IN.
This Is The NIRP "Doom Loop" That Threatens To Wipeout Banks And The Global Economy--Zero Hedge
Tuesday, August 18, 2015
The Coming Storm
By a slew of market data, a crash in the capital markets appears imminent. The market is extremely toppy, and as Doug Ross notes in analysis of John Hussman's weekly letter, "When weak participation, rich valuations and scarce bearish sentiment accompanied a record high in the same week, the handful of instances diminish to surround the precise market highs of 1973, 2000, and 2007, as well as 1929 on imputed sentiment data – and the week ended July 17, 2015".
From earlier instances of The Hindenburg Omen, to a recent death cross formation and an increasing disconnect between the worlds of equity and fixed income, multiple and increasing signals within the capital markets indicate trouble on the horizon.
Interest rates should have been hiked over ten quarters ago, even with the putrid economic status. The raising of the rates would have had a serious negative ripple effect on the overall economy, but this would have been healthy, an opportunity to cleanse the market of excesses and establish true points of equilibrium.
It will not happen now, as multiple, far more significant issues have arisen that threaten to torpedo the not only the capital markets, but the overall economy as well. Of particular note in this well crafted piece is the collapse in the price of oil, which would not be happening in a healthy environment with normal and reasonably efficient supply and demand levels. Rather, it signals great weakness, which in this case, could be catastrophic.
The collapse in oil is documentation of a contracting economy. Despite the propaganda and data manipulation, as eloquently stated in the Investment Research Dynamics piece, "It’s hard to hide the truth when there’s still checks and balances around to counter-balance the Orwellian fog that is engulfing our system."
As Jim Quinn, who runs truly outstanding blog The Burning Platform, points out, department store sales are imploding, noting "What is revealed when you look under the hood of this economic recovery is that it is a complete and utter fraud. The recovery is nothing but smoke and mirrors, buoyed by subprime auto debt, really subprime student loan debt, corporate stock buybacks, and Fed financed bubbles in stocks, real estate, and bonds."
Add in the massive expansion of the FED balance sheet increasing inflation, and you indeed have an unsustainable mirage of a recovery. No doubt; the storm is coming ashore.
In the aftermath of this impending collapse, engulfed with smoldering evidence of failure of a slew of centralized government programs, most notably Dodd-Frank, perhaps it will dawn on the minds of those placed in command of governance to all to unwind the centralized government programs, reduce taxation and regulation, unleash the great entrepreneurial spirit of America and embrace the power of free market capitalism, which in the words of noted economist Larry Kudlow, is the best path to prosperity.
From earlier instances of The Hindenburg Omen, to a recent death cross formation and an increasing disconnect between the worlds of equity and fixed income, multiple and increasing signals within the capital markets indicate trouble on the horizon.
Interest rates should have been hiked over ten quarters ago, even with the putrid economic status. The raising of the rates would have had a serious negative ripple effect on the overall economy, but this would have been healthy, an opportunity to cleanse the market of excesses and establish true points of equilibrium.
It will not happen now, as multiple, far more significant issues have arisen that threaten to torpedo the not only the capital markets, but the overall economy as well. Of particular note in this well crafted piece is the collapse in the price of oil, which would not be happening in a healthy environment with normal and reasonably efficient supply and demand levels. Rather, it signals great weakness, which in this case, could be catastrophic.
 |
| Historical Oil Chart/InvestmentResearchDynamics.com |
As Jim Quinn, who runs truly outstanding blog The Burning Platform, points out, department store sales are imploding, noting "What is revealed when you look under the hood of this economic recovery is that it is a complete and utter fraud. The recovery is nothing but smoke and mirrors, buoyed by subprime auto debt, really subprime student loan debt, corporate stock buybacks, and Fed financed bubbles in stocks, real estate, and bonds."
Add in the massive expansion of the FED balance sheet increasing inflation, and you indeed have an unsustainable mirage of a recovery. No doubt; the storm is coming ashore.
In the aftermath of this impending collapse, engulfed with smoldering evidence of failure of a slew of centralized government programs, most notably Dodd-Frank, perhaps it will dawn on the minds of those placed in command of governance to all to unwind the centralized government programs, reduce taxation and regulation, unleash the great entrepreneurial spirit of America and embrace the power of free market capitalism, which in the words of noted economist Larry Kudlow, is the best path to prosperity.
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