As the dash-for-trash continues in US equities, Neuberger Berman sums up the state of investing currently, “there has certainly been little reward for owning high-return, superior business models that are conservatively financed,” as Bloomberg notes, Fed policy has had the “unintended consequence” of boosting the stocks of companies with heavy debt and little or no earnings. Typically after a recession, such companies lose out to firms that generate more cash and have better balance sheets; this time, no “Darwinian” shakeout happened and low-quality stocks ruled. Managers say they haven’t changed, the market has. The Fed’s QE/ZIRP world has artificially inflated prices of lower-quality U.S. stocks, punishing those who focus on businesses with the best fundamentals, “if the next five years are the same, there won’t be any active managers left.” Continue reading
Tag Archives: the Fed
Ukraine Admits Its Gold Is Gone: “There Is Almost No Gold Left In The Central Bank Vault”
Much like Lybia’s after Ghadaffi was overthrown and killed… gone. If one had to guess, it’s sitting either in an American or European vault. The New York Federal Reserve, or Bundesbank — take your pick. Please see the source link for additional informative charts.
Back in March, at a time when the IMF reported that Ukraine’s official gold holdings as of the end of February, so just as the State Department-facilitated coup against former president Victor Yanukovich was concluding, amounted to 42.3 tonnes or 8% of reserves…
…and notably under the previous “hated” president, Ukraine gold’s reserves had constantly increased hitting a record high just before the presidential coup… Continue reading
“Major Shortage Of Physical Gold” Has Fed Greatly Concerned
As the world awaits the Fed’s decision, today a 42-year market veteran told King World News there will be no tapering and that the gold will soar “after the Fed has surprised the market tomorrow.” Greyerz also warned KWN that to further complicate matters for the Fed, there is a “major shortage of physical gold” ahead of their decision. Below is what Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say.
Greyerz: “Eric, it is important to consider what the truly important factors are that will determine what will happen to the world, its people, and to the global economy. If we look around, what do we find? We find a world that is financially, politically, and morally bankrupt. Continue reading
Fallout from Fed tightening will be worse than 1994, warns ECB policymaker
BRUSSELS — The spillover effects of the U.S. central bank unwinding its policy stimulus risk being greater now than in 1994, and that episode highlights the importance of clearly communicating exit strategies from expansionary policies, an ECB policymaker said.
The Federal Reserve is expected to start slowly reducing its bond purchases when it meets later this month, beginning to unwind a policy that has helped foster recovery in the world’s largest economy and buoyed financial markets.
“In early 1994, when the U.S. recovery gained strength, the Fed started a tightening cycle and bond markets crashed not only in the U.S. but also around the world,” European Central Bank Executive Board member Joerg Asmussen said on Tuesday. Continue reading
Federal Reserve hacked
US central bank confirms intrusion after hacktivist group Anonymous was claimed to have stolen 4,000 bankers’ details
“The Federal Reserve system is aware that information was obtained by exploiting a temporary vulnerability in a website vendor product,” a spokeswoman for the US central bank said. Continue reading