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Showing posts from November, 2016

Economists Reveal Massive Market Forces in Bonds Before and After QE

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This article was first published by me on Talkmarkets:http://www.talkmarkets.com/content/bonds/economists-reveal-massive-market-forces-in-bonds-before-and-after-qe?post=102509&uid=4798

The debate over Market Monetarism and long bond demand continues. The problem is that few economists, including market monetarists, address the issue of massive demand for long government bonds that I have written about more than once on Talkmarkets. Economists are technicians, and it is often difficult to get them to think outside their boxes.

But there are a few encouraging signs that economists are at least starting to think about massive bond demand and/or the roll of clearinghouses in the new normal system we face. And with the new LCR requirement for banks for short duration bonds and notes, studies, like one cited at the end of this article, from Gary Gorton and Tyler Muir, are now being done. The study by Gorton and Muir that shows some bond yields declining arises from the need for better …

Greenspan on Yields, Slow Growth and Hyperinflation.

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This article was first published by me on Talkmarkets: http://www.talkmarkets.com/content/bonds/greenspan-on-yields-slow-growth-and-hyperinflation?post=101845&uid=4798

Alan Greenspan occasionally rolls out his dog and pony show, presumably to move the markets. He has, on more than one occasion, said that investors want better yields on their government bonds, and most recently, that government bond yields are so low that they stifle economic growth. But he says more. That is what is explored in this article.

I showed in a recent article, entitled Hoarding the New Gold: Early History About Structured Finance, that the march towards diminished yields, in both good and bad times, corresponded to his tenure as head of the Fed. Alan Greenspan succeeded in his goal of stabilizing banking, pushing risk off the balance sheet of banks. But he created an environment where bonds are hoarded, where bond yields relentlessly decline. He now looks at the system and sees the threat of hyperinfla…

Hoarding the New Gold. Early History About Structured Finance and Greenspan

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This article was first published by me on Talkmarkets: http://www.talkmarkets.com/content/bonds/hoarding-the-new-gold-early-history-about-structured-finance?post=101531&uid=4798 

Structured finance is best known for taking real world assets, or debt backed by assets, and pushing them off the balance sheet of the banks. Alan Greenspan and others looked for ways to keep banks lending in the face of the need to carry loans on the books. But debt backed by assets was only part of the scheme to pass risk on to counterparties. Treasury debt backed by only faith in the United States allowed counterparties to collateralize risk with a new valuable tool, bonds as collateral. This new gold was hoarded early as you will see.

Alan Greenspan was obsessed with pushing risk off of the banks and placing it into the hands of someone else. He worked in the S&L industry and saw the S&L's get crushed.He said in a speech in 2005:


Derivatives have permitted the unbundling of financial ri…

CIA Was Responsible for JFK Assassination and More

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It is pretty much acknowledged by most that the CIA was instrumental in the assassination of John Fitzgerald Kennedy, perhaps the most popular president in the history of the USA. Kennedy wanted to make the nation a better place. Failure to take out the CIA has lead to Israel controlling much of what the USA does, leading to 9/11/2001, and the regime change in the middle east. Not taking out the CIA has lead to the central bank establishment of structured finance and slow growth, and as a result, Donald Trump's presidency, which will likely lead to the destruction of the Palestinian state.

JFK had something to say about the CIA and these quotes together represent strong evidence that the CIA does what it wants, and that no one can stop it, well, until God almighty destroys America with a vengeance. Fighting the CIA is futile, but knowing what goes on in the world is important. Empires always end, always. JFK wanted to stop the empire and failed. But not even the Roman Empire surv…

Hope for the Real Economy, Pigou Effect, TLTRO Helicopter Money

This article was first published by me on Talkmarkets: http://www.talkmarkets.com/content/education/hope-for-the-real-economy-pigou-effect-tltro-helicopter-money?post=101055&uid=4798

Eric Lonergan defined, precisely, direct applications of helicopter money sans fiscal burden on governments. Now Mr Lonergan is defining a new kind of helicopter money, with the same principle of base money but through a lending mechanism from the ECB to banks that has a perpetual quality to it.

Lonergan explains a mechanism by which the ECB is actually involved in a program of helicopter money. Certainly, the Eurozone, in my opinion, is not the ideal venue for this process, because of issues regarding the fusion European State. But as things quiet down to a sort of equilibrium and status quo there, it appears that the central bank, the ECB, is really on the ball when it comes to monetarism.

Lonergan has said that other central banks have not taken monetarism and helicopter money seriously enough. So,…

Donald Trump Is President. What Will He Fix? Hold Him to It.

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So, the Aryan Supremacist and cult leader with unseemly urges has won the presidency of the United States. Yet, in his acceptance speech, he promised to be a president of all the people. So, what did he promise and what can we hold him to?

Here is the most important thing: will he stop the neocon quest for world domination or will he hate Muslims so much that he plays into the hands of the neocons?

Here are other promises we will see that he keeps or not.

1. He promised to make allies pay for our protection. Let's see if he carries through. It could put the world in danger trying this stunt, but he promised it.

2. He said he would create many jobs. Let's hold him to it. We need more jobs and better paying jobs. He hates high tech, where those jobs exist. I am no fan of the abuses of globalization, but closing America off to trading partners will mean his once deplorable supporters could be the first ones laid off.

3. He said he would not go to war in the middle east. Let's …

Central Bank Victory and Negative Bond Rates

This article was first published by me on Talkmarkets:  http://www.talkmarkets.com/content/global-markets/central-bank-victory-and-negative-bond-rates?post=100707&uid=4798

Before discussing negative bond rates, and Martin Armstrong's article, it is becoming clear that the central banks in Europe, the USA and Japan are victorious in their plan to stabilize the world financial system.

All I hear about is people saying the Fed is a failure and the Fed has no control of things and collapse is imminent. They are usually talking about collapse of the bond market. I don't see it. That doesn't mean the central banks have not hurt people in order to prevail. Saving the economy was not the mandate of the central banks. If you want the economy first, you probably would have to ban or take over central banks. And even then you may not get what you want. 

I don't see negative bonds being the endgame of the financial system as Addison Quale says.  I don't see negative bon…