Showing posts from April, 2016

Did the Fed Want the Houses Back for Wall Street?

 This article was first published by me on Talkmarkets:

The Fed wanted the houses back for Wall Street. It is hard to prove, but could be the truth. We see that the banks made money on toxic loans in the housing bubble, and then on loans to high powered investors on Wall Street, to buy houses that became available when the toxic loans failed. The conclusion for me is as follows:

1. Wall Street first made money on granting dubious mortgages, which had default risk, but the risk was mispriced.

2. This mispriced risk caused investors who were deceived, to grant more money for lending, and house prices soared due to easy money demand.

3. Then with the help of the Fed, Wall Street crashed the prices of subprime properties in mid 2007, knowing they could not be sustained once securitization was destroyed. Securitization was destroyed when the investors reali…

Federal Reserve Mandates Slow Growth. So Fed Must Finance American Infrastructure

 This article was first published by me on Talkmarkets:

My hope is that you follow this article closely, if you are interested in Federal Reserve matters, because we have uncovered more proof that the Fed will not allow a booming economy, period. So, knowing this we need to take Ellen Brown's article and Bernanke's quotes towards the end of this article seriously, because without sufficient taxation from a booming economy, we will need other means of financing the nation's crumbling infrastructure problem or it will not be financed.

Ellen Brown, a contributor to Talkmarkets, recently covered Congress' efforts to use the Federal Reserve to fund the highway bill. In this instance the Congress actually tapped dividends that the Fed pays to member banks.

But there is an even more ambitious way to use the …

Fed Great Depression and Great Recession Liquidations Go Unexplained

 This article was first published by me on Talkmarkets:

Andrew Mellon made a statement that is in dispute as to its origin. It was found in the writings of Herbert Hoover. While many say it was not a legitimate expression of Andrew Mellon's opinions, I believe it was the expression of Hoover's understanding of the Federal Reserve Bank and that it applies to our times as well.

George Selgin of CATO said regarding the quote:
The famous Mellon “statement” is itself a caricature, made up after the fact by Hoover himself. There is actually no direct evidence that Mellon favored all-out “liquidation.” As an ex-officio member of the FRB, he supported rate cuts. For details see the abstract at
The statement as found in Hoover's writings that Hoover attributed to Andrew Mellon was as follows:

 “…liquidate labor, liquidate stocks, l…

My Fast Food Gripes and Praises. Links to Healthy Eating

 This little article was first published to my personal blog at Talkmarkets:

At my age I probably should not eat too much fast food. I try not to. I run my dogs and try to stay healthy. But going into fast food restaurants has definitely been an eye opener lately. I have a few gripes and praises. This is not an exhaustive study, as I included only 10 franchises. For example, I don't cover Five Guys or Smashburger, both tasty but pretty rich.

I didn't cover a nice fast food franchise, Chick fil A which will finally locate in Las Vegas. The founder, Mr Cathy, passed on and had a thing against Nevada because of gambling. Las Vegas is a regular place, except for the strip. Well, that is unless you have taken Abilify, which makes some people gamble uncontrollably. I kid you not. 

Do not think that fast food restaurants are all bad…

Clouds Ahead for Real Estate Worldwide, But It Is a Mixed Bag

 This article was first published by me on Talkmarkets:

There are clouds ahead for real estate worldwide, while it remains a mixed bag. As oil prices soften, it appears to most people, the Fed chairman included, that demand is slowing in the world and that oil is simply a gauge of that decline in demand.

So, while there are limited access cities, where tech and growth are strong, and economies that are rising globally, other places are dependent on exports of raw materials. They were high flyers once. They could be the first nations to see real estate price destruction. States in the USA that rely on oil production are likely to see the same unless there is a serious reversal of commodity pricing.

One of the strongest real estate markets in the world is the Australian market. It is a market that is driven by strict land use requirements, a…

Draghi and Germany Have a Secret Plan to Save the Eurozone

This article was first published by me on Talkmarkets:

Draghi of the ECB, and Germany must have a secret plan to save the Eurozone. One cannot make sense of their actions without contemplating this plan.

After all, Germany introduced a plan to weigh bonds, with bondholders potentially taking a haircut before bailout money can be approved for periphery banks. On the surface that would seem to indicate that Germany and the central bank are seeking to weaken bond prices in the weaker nations and destroy the Eurozone. This is causing a flight to safety, with German bonds being the primary beneficiary. See articles regarding this plan here and here. The chart is a bit out of date but trust me, yields are even lower after a short bump, and are going to go negative even on the long term bond:

Main Economic Indicators - complete database", Main Economic Indicators…

Clearing Up Negative Interest Rate Confusion. Kocherlakota Weighs In

This article was first published by me on Talkmarkets:

With all the talk of negative interest rates, we have to determine why they are considered so important. They are obviously very important to bankers, economists and central bankers. This article is not an attempt to encourage these folks because of the danger of cashless regulations once a negative regime is put into place. But looking into motives becomes quite helpful to see where central banks are going with all this since they do not consult with us. I call the plunge into minor negativity the Office Space scheme. The dangers of too much reliance on negative rates will be shown.

There are three categories of negative rates. As you read articles this breakdown is helpful since the authors don't always make clear which they are speaking to:

1. Minor negative rates on bank reserves that would…