Showing posts from December, 2015

Even The Big Banks Now Admit It: "This Is How The Fed's 'Massive Manipulation' Broke The Market"

Tyler Durden Blog | Even The Big Banks Now Admit It: "This Is How The Fed's 'Massive Manipulation' Broke The Market" | Talkmarkets

From Bank of America

Central bank’s risk manipulation well explains local tails

A good way to explain why we have seen local tail risks arise so
frequently since central banks began to heavily manipulate asset prices
is with the following analogy, illustrated in Exhibit 1. Essentially
central banks, by unfairly inflating asset prices have compressed risk
like a spring to unfairly tight levels. Unfortunately, the market is
aware the price of risk is not correct, but they can’t fight it, and
everyone is forced to crowd into the same trade. By manipulating markets
they have also reduced investors’ inherent conviction by rendering
fundamentals less relevant.

This then creates a highly unstable (fragile) situation that breaks
violently when a sufficient catalyst causes risk to rise – overly
crowded positioning meets a market with l…

Scott Sumner and Friends Want Unbridled Growth-Chicago School Update

 This article was first published by me on Talkmarkets:

We know this is true, girls just want some fun. Cyndi Lauper had it right. But what does the new cabal of economists want? Seems like there is a not so secret cabal of them, maybe lead by Scott Sumner, and they come from the University of Chicago, or have friends from there, and study neo-Keynesian thought and Libertarian thought. So what do they want?

Well, although they are complex thinkers, figuring out some of what they want it is doable. They want unlimited, or nearly unlimited, and unbridled economic growth. That is an oversimplification of course. They no doubt require a set of circumstances for this growth to happen, and they may even disagree on what those circumstances should be. They don't seem concerned with economic bubbles and even seem to deny they exist!

So, it is easy to look back and…

Swedish Cashless Negative Rate Ponzi Real Estate Society-Still a Good Investment

 This article was first published by me on Talkmarkets:

What could possibly go wrong in a cashless, negative interest rate, ponzi real estate society? We can use Sweden as a potential example since Sweden is closest to a cashless society. Is this a conspiracy by the elite? Finance economist Kevin Erdmann says the economy and real estate are randomly determined. See his quote at the end of this article.

It seems that not much has gone wrong in Sweden, except that household debt is out of control. Real estate is massively overvalued, but there has not been a crash.

Well, that is what economists want, the management of bubbles to limit crashes. Negative interest rates will give the government a tool for making money available in the society, and for getting people to spend money.

  Negative rates may, the economists hope, force people to spend m…

Demand for Swaps Collateral Could Bolster Bonds

Demand for Swaps Collateral Could Bolster Bonds

This was an important article. There is much talk about shortages of pristine, top collateral for the derivatives markets. The pristine collateral used are treasury bonds. The need for them in this usage alone is estimated to be 800 billion to 4 trillion dollars. Since there are 12 trillion dollars of treasury bonds in circulation, this is a massive addition to demand and will force the long bond rate down and the price of the bonds up. 

See also my articles at Talkmarkets on the subject:

Some of the above articles have the symbol TLT attached. Read those and all that speak about bonds. Also connected are articles dealing with the zero lower bound, negative interest rates and a cashless society.

A Whole Lot of Gold Hoarding Going On

This article was first published by me on Talkmarkets:

Martin Armstrong is a libertarian but very thought provoking. He recently came out with an article which found its way toTalkmarkets as most of his articles do that explained the power of fiat money.

He gave strong evidence as to the rise of many economies that only had fiat money and not a gold standard. He is likely right about this ability of fiat money to establish confidence in the users of that money if the governments that issue fiat money are trustworthy.

And certainly I am not for a gold standard, which always seems to leach gold off the standard! I am drawn to this awesome study of how the gold standard worked over time.

As it turns out, the gold standard collapsed in 1933, because of the Great Depression, although it had been modified previously, so it was not the classic gold standard that was originally designed. Money was too … SDR Indemnification Removal: A Good Step Forward SDR Indemnification Removal: A Good Step Forward |...: SDR Indemnification Removal: A Good Step Forward | derivatiViews Gary here: Pretty scary stuff. Counterparties in swaps deals don't ha...

Did the Turkey and Russian Spat Change the Fake War on ISIS into the Real Deal?


​ This article was first published by me on Talkmarkets:

Common sense and Turkey's behavior tells us that the war on ISIS is fake. Figuring out the war on ISIS is like figuring out the war on terror before it. There are bits and pieces of a puzzle, that come to light from time to time. We are not in the field, but not all information is hidden.

One wonders, for example, why John Kerry would put a condition on the destruction of ISIS? That condition is a cease fire in Syria leading to regime change. That shows where the heart of the American government is, for regime change and not for taking out ISIS! American pilots have acknowledged that three quarters of their bombs are not dropped on ISIS because missions are blocked. Environmental reasons for not dropping bombs are clearly flimsy in the wake of the pilot accusations tha…

Is America Fighting a Phony War on ISIS?

 This article was first published by me on Talkmarkets:

Truth can be stranger than fiction. Is America fighting a phony war against ISIS? We have some evidence that this could be true. I am not making a judgement that it is true, but my judgement is that it is likely true. How will a fake war affect oil prices in the future? I will discuss this at the end of the article.

I wrote a recent article on my personal Talkmarkets blog showing that the war on terror was really a war fostering regime change. In the article West Point Prof Bradford Says If you Oppose the War on Terror You are the Enemy, I state that the war on terror was a massive hoax and that the policy of the United States has always been about regime change. If it can be shown that America is faking the fight against ISIS, that is proof that my conclusions were correct.

Well, we have three proofs that…