Today, additional evidence that recession — or worse — is in sight.
But first, it appears the “Powell put” may extend the countdown clock…
Since Jerome Powell’s dovish comments on Friday, the Dow Jones has been up and away… as an addict thrills to the promise of additional stimulant.
It leaped another 256 points today. Continue reading
It looks like Ben Bernanke is a Bridgewater client.
Recall that earlier this week we reported that in the May 31 “Daily Observations” letter to select clients, authored by Bridgewater co-CIO Greg Jensen, the world’s biggest hedge had an ominous, if not dire appraisal of the current economic and financial situation facing the US, and concluded that “We Are Bearish On Almost All Financial Assets” Continue reading
(Shutterstock)
Is the Fed ready for the next recession?
The answer is no.
Extensive research shows that it takes between 300 and 500 basis points of interest rate cuts by the Fed to pull the U.S. economy out of a recession. (One basis point is 1/100th of 1 percentage point, so 500 basis points of rate reduction means the Fed would have to cut rates 5 percentage points.)
Right now the Fed’s target rate for fed funds, the so-called “policy rate,” is 1.75%. How do you cut rates 3–5% when you’re starting at 1.75%? You can’t. Continue reading
Markets were up again big today and volatility was down. But we haven’t seen the last of rising volatility, nor of the central banks’ attempts to thwart it.
This week, new Fed Chair Jerome Powell will be giving his first congressional testimony, and you can be sure that markets are waiting on his words with bated breath.
Before his testimony, the Fed will be releasing its Monetary Policy Report, which will also give an indication to the direction of Fed policy. Continue reading
WakingTimes.com
Spoiler alert! It’s already here.
In the past, I’ve warned about the coming Great Wealth Transfer. But now we need to talk about it in the present tense, because it’s here.
And it will only accelerate from here on out. The Rich will get richer at the expense of everybody else.
This isn’t personal. It’s simply a feature of what happens near the end of a debt-based monetary system run by corruptible humans. Continue reading
The Federal Open Market Committee, in its latest meeting Wednesday, reiterated the same message to spellbound investors that’s been in place the last eight years: The Fed is committed to maintaining a massive balance sheet through bond buying, but someday that balance sheet and near-zero interest rates will revert to normal levels. Continue reading
(Source)
As we’ve been warning for quite a while (too long for my taste): the world’s grand experiment with debt has come to an end. And it’s now unraveling.
Just in the two weeks since the start of 2016, the US equity markets are down almost 10%. Their worst start to the year in history. Many other markets across the world are suffering worse.
If you watched stock prices today, you likely had flashbacks to the financial crisis of 2008. At one point the Dow was down over 500 points, the S&P cracked below key support at 1,900, and the price of oil dropped below $30/barrel. Scared investors are wondering: What the heck is happening? Many are also fearfully asking: Are we re-entering another crisis?
Sadly, we think so. While there may be a market rescue that provide some relief in the near term, looking at the next few years, we will experience this as a time of unprecedented financial market turmoil, political upheaval and social unrest. The losses will be staggering. Markets are going to crash, wealth will be transferred from the unwary to the well-connected, and life for most people will get harder as measured against the recent past. Continue reading
With interest rates at a 5,000-year low, are we really surprised that a crash is coming?
The International Monetary Fund (imf) is warning that a financial crisis is practically guaranteed, and it’s just a matter of time before it strikes. The organization’s newly released Global Financial Stability report is sobering reading. The flaws in the global financial system have not been fixed, it says.
It highlights soaring global debt, particularly in emerging markets. The implication is that we could see a repeat of the 1997 currency crisis also known as the “Asian Flu,” which saw massive currency devaluations, contractions in global trade, economic turmoil, and social instability.
But conditions are much more dangerous today than back then. Virtually the whole world is teetering on recession, the West and Russia are back in Cold War mode, the Middle East is engaged in actual war in Syria, and the world is more interconnected than ever—potentially making the transmission of financial diseases much quicker. Continue reading
As the market drops 200 to 300 points daily on a fairly frequent basis these days, and has now dropped 13% in the last four months, John Hussman’s valuation analysis based upon historical facts is proving to be accurate. He’s not an “I told you so” type of person, but I am. The MSM stories follow the same old storyline – this is just a correction, time to buy the dip, stocks are undervalued, the Fed won’t let the market fall. We’ve been here before, twice in the last fifteen years. Wall Street and their media mouthpieces attempted to spread misinformation about the nature of the markets in 2000 and 2007, as epic bear markets were just getting underway. John Hussman cut through their crap then and he is cutting through it now. Continue reading
America’s banking crisis will reshape Europe financially—and politically.
One of the greatest prophecies in the Bible is about the union of European nations. More specifically, it’s about the political union of 10 European nations.
For decades, people in Europe have tried to forge a cohesive political union. To that end, they have created the present, loosely hinged 28-nation European Union. Yet Revelation 17 says there are going to be 10 kings there that will unite politically and form a real superpower: a modern-day Holy Roman Empire.
Bible prophecy also reveals that this European superpower will be led by a strong German leader who will essentially hijack the European Union. Continue reading
Unless the continent changes course, Europe is likely to transform from a harbinger of prosperity and democracy into a far less hospitable and more dangerous place.
Czech police intercepted a group of Syrian asylum-seekers on a train headed for Germany. Upon being detained, the 200 or so refugees were marked with ink numbers on their forearms. While clearly a mishap, it was not the first time that Europeans were reminded of a period many would rather forget.
In July, a Polish member of the European Parliament, Janusz Korwin-Mikke, used the Nazi salute in a parliamentary debate. Two years earlier, members of the Greek Parliament for the far-right Golden Dawn party shouted “Heil Hitler” as their colleague Panagiotis Iliopoulos was being ejected from the chamber for unparliamentary language.
Ali and Frazier, Laurel and Hardy, Mayweather and Pacquiao, Liesman and Santelli, and now Schiff and Maloney. Peter and Mike join clash of the titan-like to discuss their investment strategies and expose the charts the government doesn’t want you to see as “people like Bernanke are taken seriously still and the people that did predict [the crisis] are dismissed as lunatics half the time.” The wide-reaching conversation covers everything from gold and stocks to The Fed and The Dollar – Bernanke “took the coward’s way out because all he did was exacerbate the problems to postpone the day of reckoning.” The air is coming out of the bubble, they warn, “Bernanke and Greenspan have absolutely destroyed America. People don’t realize what is coming…”
Full transcript below: Continue reading
Just 2 short months ago we warned of the rising voice among the cognoscenti tilting their windmills towards the concept of “helicopter money,” as Deutsche bank noted, “perhaps there’s an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock.” Committing what Commerzbank calls “the ultimate sin” is now reaching the mainstream as Germany’s Der Spiegel notes it is becoming increasingly clear that Draghi and his fellow central bank leaders have exhausted all traditional means for combatting deflation; and many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy.
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It seems perhaps tomorrow is… today… As Der Spiegel explains…
Fears that the euro zone is heading for deflation refuse to abate. Now, many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy. But would it work?
It sounds at first like a crazy thought experiment: One morning, every resident of the euro zone comes home to find a check in their mailbox worth over €500 euros ($597) and possibly as much as €3,000. A gift, just like that, sent by the European Central Bank (ECB) in Frankfurt. Continue reading
While the entire financial world is hanging on to every Mario Draghi word in hope Europe finally improves the market’s (if not the economy’s) “fundamentals” to new record highs, and joins the rest of the “developed” world’s central banks in injecting trillions of liquidity into the Div/0 P/E stocks “whatever it takes” (because in a world where only multiple expansion is left, the ECB is the last wildcard at least until the US is dragged right back into the global recession and the Fed admits any pipe dreams of a rate hike in 2015 were just that), something far more different may be taking place behind the scenes. According to at least one journalist, the Fiscal Times’ Patrick Smith, “Draghi appears set to leave Frankfurt and return to his native Italy the first chance he gets.”
Has the former Bank of Italy exec and Goldman employee had enough of fighting Germany tooth and nail over every proposal, if mostly for dramatic media consumption? “Impossible” most would say, and yet…
[Draghi’s departure] could be as soon as January, depending on a variety of circumstances in Frankfurt and Rome, according to well-placed sources who include a prominent private investor and a senior journalist in Rome. “Draghi wants out, fed up and stymied by Berlin,” one of these sources wrote in a note just before the weekend. In a subsequent message: “I am hearing from several [official] sources that he is entirely fed up with the monetary politics he confronts.” Continue reading
And he’s right about the FDIC having less funds available than what it needs to cover its obligations.
Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.
Why am I getting in line to take my money out of Bank of America? Because of Ben Bernanke and Janet Yellen, who officially begins her term as chairwoman on Feb. 1.
Before I explain, let me disclose that I have been a stopped clock of criticism of the Federal Reserve for half a decade. That’s because I believe that when the Fed intervenes in markets, it has two effects — both negative. First, it decreases overall wealth by distorting markets and causing bad investment decisions. Second, the members of the Fed become reverse Robin Hoods as they take from the poor (and unsophisticated) investors and give to the rich (and politically connected). These effects have been noticed; a Gallup poll taken in the last few days reports that only the richest Americans support the Fed. (See the table.) Continue reading
Global Geopolitics 