Tag Archives: Money For Nothing

John Hussman: Bearishness Is Strictly For Informed Optimists

Posted on by

“When the primary use of fiscal policy is to wipe up the catastrophe of weak productivity, lost income, unemployment, and malinvestment created in the repeated aftermath of collapsed financial bubbles, the endgame is going to be stagnant living standards and a debased currency.  Ultimately, QE may finally create inflation by provoking a loss of fiscal control.  Central banks have risked just that by encouraging yet another speculative bubble, heavy issuance of low-grade debt, and the diversion of savings toward unproductive investment. The inevitable fiscal consequences are likely to include bailouts, income-replacement and transfer payment programs as the third bubble since 2000 collapses.”

http://www.hussmanfunds.com/wmc/wmc160314.htm

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

After QE failure, BOJ’s Kuroda says no plan to ease policy now

Posted on by

“Bank of Japan Governor Haruhiko Kuroda said on Friday he had no plan to expand monetary stimulus now, blaming sharp declines in oil costs for keeping consumer inflation distant from the bank’s ambitious 2 percent target.  While he maintained his optimistic view of the economy, Kuroda stressed his resolve to ease monetary policy further if risks threaten achievement of the BOJ’s price target.  The remarks, made in response to a question by an opposition lawmaker, pushed down Japanese stocks on disappointment that no immediate monetary stimulus was forthcoming.”

http://www.reuters.com/article/us-japan-economy-boj-idUSKCN0UT0C3

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

In Copenhagen, Apartment Prices Jump 60% After Rates Go Negative

Posted on by

“Denmark’s biggest mortgage bank says there’s a ‘real risk’ Copenhagen is heading into a property bubble.  Property prices in Copenhagen have risen 40-60 percent since the middle of 2012, when the central bank first resorted to negative interest rates to defend the krone’s peg to the euro. The benchmark deposit rate has been minus 0.75 percent since February as Denmark’s currency war intensified, and most analysts surveyed by Bloomberg see negative rates lasting at least through 2017.  The Danish regulator this month warned Danske Bank against pursuing a growth strategy in Sweden as the housing market there shows signs of imbalances.”

http://www.bloomberg.com/news/articles/2015-10-21/60-house-price-surge-in-copenhagen-adds-to-bubble-drum-beat

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Fed ends ‘too big to fail’ lending to collapsing banks, with caveats

Posted on by

“The Fed’s new restrictions come from the Dodd-Frank Act of 2010, which brought in a wave of reforms after the financial crisis.  Under the new rule, banks that are going bankrupt — or appear to be going bankrupt — can no longer receive emergency funds from the Fed under any circumstances.  However, it’s important to note that the new rule allows the Fed to judge by its own measures whether a firm qualifies for its emergency aid.  The idea is the Fed can still lend to banks during times of emergency, but the bank must be able to pay it back. Yet the true health of a bank in turmoil can be very difficult to assess.”

http://money.cnn.com/2015/11/30/news/economy/fed-adopts-rule-to-end-too-big-to-fail/

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Households lost from quantitative easing; gov’ts, big business won [2013]

Posted on by

“The big winners, to the tune of $1.6 trillion by the end of 2012, were the governments of the US, the UK and eurozone, from the reduced costs of servicing their debts and from the increased profits made by the their respective central banks (who magically create money to buy government debts which pay them interest).  McKinsey believes that households have been significant losers from cheap money. How much have they lost? Well McKinsey says that from 2007 to 2012, the cumulative net loss of interest income for American households was $360bn, compared with a cumulative net loss of $160bn for eurozone citizens and $110bn (£70bn) for British people.”

http://www.bbc.com/news/business-24939396

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Societé General Strategist: Yellen’s Dithering Fed Is Destined for Infamy

Posted on by

“The Federal Reserve’s failure to recognize its role in driving the third dangerous asset bubble in 15 years will destroy the central bank’s reputation for good, said Albert Edwards, global strategist at Societe Generale. Edwards said it’s too late to avoid another massive collapse in asset prices.  ‘This time the Fed’s largesse has fueled another corporate debt explosion,’ he said. ‘The real rate of corporate borrowing is even greater than was seen during the late 1990s tech bubble. This is 100 percent attributable to the Fed’s excessively loose monetary policy.'”

http://www.newsmax.com/Finance/StreetTalk/Albert-Edwards-Janet-Yellen-Ben-Bernanke-Alan-Greenspan/2015/12/17/id/706234/

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

US auto loans hit $1 trillion for first time

Posted on by

“The loan balances have been driven up by a combination of three factors — strong car sales, rising car prices and low interest rates.  Interest rates are low. Borrowers with top credit scores can get loans for less than 3%.  But the amount owed is up 11%, a sign of the increase in the size of car loans due to rising prices.  The average amount borrowed is about $21,700, and buyers owe nearly $18,000 on average. The average new car purchase price now stands at $32,529, according to sales tracker TrueCar. The average car loan balance is rising faster than it is for mortgage loans, according to TransUnion.  The average payment now stands at just under $400 a month.”

http://money.cnn.com/2015/11/16/autos/car-loans-trillion-dollars/

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Puerto Rico Defaults On Bonds: Return Does Not Come Without Risk

Posted on by

“Many American investors bought Puerto Rican bonds over the past five years as we all searched desperately for yield in the face of the Federal Reserve pushing interest rates down to historic lows. Normally, investors understand that higher yields come with greater risks. However, during the past six years of extraordinary interventions by the Fed into all sorts of financial markets, many investors may have decided that those higher yield investments weren’t really all that risky.  Puerto Rico’s problems may serve as a much-needed wake up call to investors. As rates rise, capital will move back toward safety and the risk premium demanded of higher risk projects is likely to increase.”

http://www.forbes.com/sites/jeffreydorfman/2016/01/04/puerto-rico-bond-defaults-early-reminder-to-investors-return-does-not-come-without-risk/

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

John Hussman: Reversing the Speculative Effect of QE Overnight

Posted on by

logo

“Last week, without taking any care to reduce the size of its balance sheet, the Federal Reserve instantly changed the monetary environment to one that is observationally equivalent to the one that prevailed in 2009. By raising interest rates artificially (through interest payments on reserves and reverse repurchases) and applying those payments to everything but currency in circulation, the Fed has neutralized the misguided speculative prop it created through 6 years of policy distortion, and it did so in one fell swoop. From the standpoint of investors, the overall effect is just as if the Fed had suddenly reversed every dollar of quantitative easing since 2009 ($1.7 trillion).”

http://www.hussmanfunds.com/wmc/wmc151221.htm

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Bill Gross: Central bank ‘casinos’ to run out of luck

Posted on by

“Investors should cut risk heading into 2016 as central banks trying to pump up their respective economies make losing bets, bond guru Bill Gross says.  Institutions like the Federal Reserve and the European Central Bank are like ‘casinos’ that create money instead of chips ‘they’ll never have to redeem,’ said Gross, founder of bond giant Pimco who now runs the $1.4 billion Janus Global Unconstrained Fund.  Furthering the gambling analogy, he said central bankers are using a familiar ploy — doubling down on losing bets until they break even.  ‘How long can this keep going on? Well, theoretically as long as there are financial assets (including stocks) to buy,’ Gross said.”

http://www.cnbc.com/2015/12/03/bill-gross-central-bank-casinos-to-run-out-of-luck.html

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet