Monthly Archives: December 2013

My Fed Forecast Was Right on Target — What to Look for Next

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“Outgoing Fed Chairman Ben Bernanke sounded a much more confident tone on the economy in his post-meeting press conference. And he indicated that the incoming chairman, Janet Yellen, fully supported the day’s action.  Furthermore, he said that barring some economic catastrophe, the $10 billion reduction in the QE program we’ll get in January is just the first of many steps. It should be followed by cuts of roughly an equivalent size — or more — at every single meeting in 2014.  That, in turn, sets the stage for the next major surprise. (At least to the Wall Street crowd.) I’m talking about the first actual short-term interest-rate hike in 2014.”

http://www.moneyandmarkets.com/my-fed-forecast-was-right-on-target-what-to-look-for-next-57114

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Housing “Bubble 2.0″; Same as “Bubble 1.0″, only different actors

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“Why a ‘strong economy‘ is negative for this housing market;  houses are far ‘more expensive‘ today then from 2003-2007 (i.e., ‘affordability‘ much worse); and how everybody has been ‘fooled by stimulus‘ and unprecedented monetary policy, yet again.  This housing market is ‘resetting‘ right now;  for the third time in six years. It might look and feel a little different, but as I detail in this note, it’s not really different this time around.”

http://mhanson.com/archives/1546

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Why Mortgages Will Soon Be More Expensive

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“This week, the mortgage giants Fannie Mae and Freddie Mac announced new guidelines that could add as much as a half point to the interest rate that a fixed-rate borrower pays. The tougher lending rules are set for March. But banks will begin phasing them in next month, when another set of federal rules known as ability-to-repay and the qualified mortgage also kick in. That means banks have less wiggle room to work with borrowers that may be self employed, at a new job or paid on commission. On top of all this, the Fed in January will begin winding down its bond-buying program, which has helped keep mortgage rates low.”

http://business.time.com/2013/12/19/fannie-and-freddie-make-mortgages-more-expensive/

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What Happened to the Fed’s Trillions? Back on Deposit…at the Fed!

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“So you can understand why they wanted to have the tool. Now the question is whether or not this tool as it was implemented throughout this financial crisis, and aftermath, has exacerbated the problems with the credit channel. A bank can decide, ‘Do I want to give a three-year loan to a risky borrower, or do I want to get 25 basis points at the Federal Reserve? I’m really risk averse right now. I don’t really want to lend to anybody so I’d rather take my 25 basis points.’ So I believe that at the margin, this has affected the credit channel, the effectiveness of the credit channel.”

http://www.pbs.org/newshour/businessdesk/2013/12/what-happened-to-the-feds-tril.html

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David Stockman: Lunatic Fed Engineering Global Collapse

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“Yellen has been part of this Fed system since the 1990s.  Just start with the year 2000:  The balance sheet of the Fed was $500 billion.  Today it’s pushing $4 trillion.  That’s an eight-fold increase just in this century.  She’s been part of it all along, and if that isn’t monetizing the debt, (then) I don’t know what the word means.   It is only the top 1% that has experienced a huge windfall from the serial bubbles that the Fed has created.  So, if you go right to the core of what this is all about — what the Fed’s mission is, what the new chairman of the Fed will be doing and saying, I think we had a pretty good indication that she’s going to take this lunatic policy that we’ve had for years now right over the edge.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/11/15_David_Stockman_-_Lunatic_Fed_Engineering_Global_Collapse.html

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2013/11/17_David_A._Stockman_files/David%20Stockman%2011%3A17%3A2013.mp3

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Yellen Strikes Out

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“Mrs. Yellen insisted that she supports ‘transparency and openness on the part of the Fed.’ She claimed that in terms of the ‘range of information and the timeliness of that information, we are one of the most transparent central banks in the world.’ That’s not only irrelevant but wan. She then declared that she would not support ‘a requirement — any requirement — that would diminish the independence of the Federal Reserve in implementing, and deciding on implementing, monetary policy.'”

http://www.nysun.com/editorials/yellen-strikes-out/88490/

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The FED’s New Normal: $900 Billion a Year . . . Indefinitely

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“This is the Federal Reserve System at 100 years. The economy is now addicted to an emergency monetary policy.  The FOMC has made it clear: the bubble conditions of the financial markets will not deliberately be popped by a return to 2007. This is the new normal — endless addiction to monetary expansion.  Meanwhile, the banks refuse to lend into the economy. They pile up excess reserves. The FOMC clearly does not expect this to cease. That is why $900 billion a year is the new normal.”

http://www.garynorth.com/public/11906.cfm

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BitTorrent serverless chat replaces usernames with crypto keys

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“BitTorrent, Inc. is developing a serverless instant messaging system that relies on public key encryption to protect the privacy of communications, identifying users not with traditional usernames but with cryptographic key pairs.  The company, which develops the BitTorrent peer-to-peer protocol as well as the BitTorrent and μTorrent file sharing software, announced the forthcoming chat software in September and revealed some details on how it will work in a blog post today.  Underlying this system is a Distributed Hash Table (DHT) which finds IP addresses, removing the need for a central server to route messages, the company explained.”

http://arstechnica.com/information-technology/2013/12/bittorrent-serverless-chat-replaces-usernames-with-crypto-keys/

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Report Suggests NSA Engaged In Bank Account Manipulation

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“Governments should not use their offensive cyber capabilities to change the amounts held in financial accounts or otherwise manipulate the financial system.’  While there have been plenty of reports about the US running hundreds of offensive cyberattacks on others, outside of things like Stuxnet, not many have been directly identified. And I’m unaware of any claims suggesting attempts to ‘manipulate the financial system’ of any particular country and/or to ‘change the amounts held in financial accounts.’ It seems a bit odd to come out of the blue like that, and certainly suggests that this particular bullet point likely came as a result of a rather specific thing that came up during the task force’s review. ”

http://www.techdirt.com/articles/20131218/14533925607/intelligence-task-force-hints-nsa-manipulating-financial-systems-changing-amounts-bank-accounts.shtml

Governments should not use their offensive cyber capabilities to change the amounts held in financial accounts or otherwise manipulate the financial system.

While there have been plenty of reports about the US running hundreds of offensive cyberattacks on others, outside of things like Stuxnet, not many have been directly identified. And I’m unaware of any claims suggesting attempts to “manipulate the financial system” of any particular country and/or to “change the amounts held in financial accounts.” It seems a bit odd to come out of the blue like that, and certainly suggests that this particular bullet point likely came as a result of a rather specific thing that came up during the task force’s review.

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GCHQ and NSA targeted charities, Germans, Israeli PM and EU chief

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“British and American intelligence agencies had a comprehensive list of surveillance targets that included the EU’s competition commissioner, German government buildings in Berlin and overseas, and the heads of institutions that provide humanitarian and financial help to Africa.  The papers show GCHQ, in collaboration with NSA, was targeting organisations such as the United Nations development programme, the UN’s children’s charity Unicef and Médecins du Monde.  Britain’s targeting of Germany may prove awkward for the prime minister, David Cameron: in October, he endorsed an EU statement condemning NSA spying on world leaders, including Merkel.”

http://www.theguardian.com/uk-news/2013/dec/20/gchq-targeted-aid-agencies-german-government-eu-commissioner

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