Tag Archives: Money For Nothing

Desperate Finland Set To Unleash Helicopter Money Drop To All Citizens

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“With Citi’s chief economist proclaiming ‘only helicopter money can save the world now,’ and the Bank of England pre-empting paradropping money concerns, it appears that Australia’s largest investment bank’s forecast that money-drops were 12-18 months away was too conservative.  Over the last few months, in a prime example of currency failure and euro-defenders’ narratives, Finland has been sliding deeper into depression. As The Telegraph reports, this is a deeper and more protracted slump than the post-Soviet crash of the early 1990s, or the Great Depression of the 1930s. And so, having tried it all, Finnish authorities are giving every citizen a tax-free payout of around $900 each month!”

http://www.zerohedge.com/news/2015-12-06/it-begins-desperate-finland-set-unleash-helicopter-money-drop-all-citizens

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We Haven’t Seen This Big Red Flag since the Great Recession

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“When the economy slows down, companies in poor financial shape feel the pain first. That’s why junk bonds often point out problems before other assets do.   On Monday, one of the biggest junk bond ETFs hit its lowest level in over six years.  Yesterday, Financial Times reported that half of all corporate bonds have a junk rating, and that companies are defaulting on bond payments at the highest rate since the financial crisis. Last month, The Wall Street Journal reported that corporate downgrades are at their highest level since the Great Recession. The Federal Reserve has encouraged companies to borrow obscene amounts of money, which is a big reason for this mess…”

http://www.caseyresearch.com/articles/we-havent-seen-this-big-red-flag-since-the-great-recession

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John Hussman: Psychological Whiplash

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“Investors who refused to take the speculative bait may have been the first casualties of the Fed’s policies. But now, it is investors who remain fully invested in obscenely overvalued equities and junk credit that have become the unwitting dupes in this game. If the Fed cannot force people to abandon saving behavior with zero interest rates, some members of the FOMC have openly talked about driving interest rates to negative rates to ‘stimulate’ spending. This is not economics, it is megalomaniacal sociopathy. Centuries of economic history warn that this speculative episode, too, will end in a collapse.”

http://www.hussmanfunds.com/wmc/wmc151109.htm

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Yellen Says Negative Rates On The Table “If Outlook Worsened”

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“As the market now diligently calculates the suddenly surging odds of a December rate hike, here’s Yellen with a preview of what will happen once the rate hike cycle is aborted,  just as it was aborted in Japan in August of 2000 when the BOJ also decided to send a signal how much stronger the economy is by hiking 25 bps, only to cut 7 months later and to proceed to monetize not only all net Japanese debt issuance a decade later, but to hold half of all equity ETFs. The good news: YELLEN SAYS SHE DOESN’T SEE NEED FOR NEGATIVE RATES NOW;  YELLEN SAYS FED SEES ECONOMY ON STEADY PATH OF IMPROVEMENT;  Because when have the Fed’s forecasts before ever been wrong.”

http://www.zerohedge.com/news/2015-11-04/yellen-says-negative-rates-table-if-outlook-worsened

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Chinese Brokers Now Selling Margin Loan-Backed Securities

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“Now, the PBoC will look to supercharge efforts to re-engineer a stock market bubble via leverage by pushing brokerages to issue ABS backed by margin loans.  If brokerages simply offload the margin loan risk to investors and use the proceeds to fund still more margin lending which can also be turned into still more ABS, and so on, then the effect will be to pile leverage on top of leverage. What happens in the event the underlying stocks become completely illiquid (i.e. Beijing decides to suspend trading on three quarters of the market again)?  The punchline: the senior tranche (which accounts for CNY475 million of the total CNY500 million deal) is rated AAA.”

http://www.zerohedge.com/news/2015-08-08/peak-insanity-chinese-brokers-now-selling-margin-loan-backed-securities

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Bank of Canada Admits Recession, The Solution: More Bubbles

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“What made the Canadian recession easy to spot was the Canadian yield curve inverted out to three years following a surprise rate cut by the Bank of Canada on January 21.  It remains to be seen if the US follows. The US contracted in the first quarter, but the second quarter rebound was a bit stronger than I expected.  I awarded Canada the ‘Blue Ribbon’ for the first yield curve inversion of any major country following the great financial crisis. I smell an ‘Operation Twist‘ type move by the Canadian central bank to rectify this horrific ‘recession-signaling’ condition.  If so, the sweet spot for banks and hedge funds to front-run the trade appears to be 5Y or 7Y notes.  Some banks may already be in on it.”

http://globaleconomicanalysis.blogspot.com/2015/07/bank-of-canada-admits-recession-shades.html

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European Car Sales Jump As ECB Stimulus Takes Effect

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“European car-sales growth accelerated to the fastest pace in 5 1/2 years in June.  The jump was the biggest since a 16 percent surge in December 2009, when governments in the region offered incentives on trade-ins of older cars to help the industry recover from the global recession.  The economy of the 19 countries using the euro is in its longest stretch of growth since the 2008 worldwide credit crunch, while unemployment in the U.K. is at close to a seven-year low. The European Central Bank’s monetary stimulus measures have helped economic revival in most euro-zone countries, partly offsetting the effects of the Greek sovereign-debt crisis.”

http://www.bloomberg.com/news/articles/2015-07-16/european-car-sales-rise-most-in-5-1-2-years-as-economy-helps-vw

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‘It’s time to hold physical cash,’ says British senior fund manager

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“Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a ‘systemic event’ could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.  The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some ‘physical cash’, an unusual suggestion from a mainstream fund manager.”

http://www.telegraph.co.uk/finance/personalfinance/investing/11686199/Its-time-to-hold-physical-cash-says-one-of-Britains-most-senior-fund-managers.html

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Google Stock Surge Adds Record $52 Billion to its Market Value

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“Google shares surged at the opening of Friday trading a day after the company reported earnings, adding a total of $52 billion in market capitalization in the largest single-day gain ever, according to S&P Dow Jones Indices.  Google’s gain of about 15 percent in early trading was having an outsized effect on the S&P 500 as well, adding 7 points at the open, according to Howard Silverblatt, an index analyst for S&P Dow Jones Indices.  That beats Apple’s April 2012 gain of $46.4 billion, the prior record holder for biggest increase in market cap.”

http://www.nbcnews.com/business/markets/google-stock-surge-adds-record-52-billion-its-market-value-n393826

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Living with Venezuela’s high inflation

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“As the world watches the Greek debt crisis unfold, the economy of a country in another corner of the planet is also struggling, and some experts are even trying to draw similarities.  Venezuela has the world’s highest inflation, leaving many facing shortages and soaring prices.  While the government of president Nicolas Maduro says this is the result of an ‘economic war by capitalists and the United States against the country’s socialist revolution’, critics say the high inflation rate is simply showing the government’s economic incompetence.  The BBC’s Daniel Pardo explains how inflation affects what Venezuelans buy every day, like the popular snack called Arepa.”

http://www.bbc.com/news/world-latin-america-33427761

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