Tag Archives: Money For Nothing

Loads of Debt: A Global Ailment With Few Cures

Posted on by

“As central banks like the Federal Reserve and the European Central Bank have printed trillions of dollars and euros, markets in stocks and bonds, as well as other types of assets, have responded optimistically, sometimes reaching highs that were unthinkable seven years ago in the depths of the financial crisis.  Central banks can make debt less expensive by pushing down interest rates. Crucially, though, they cannot slash debt levels to bring much quicker relief to borrowers. In fact, lower interest rates can persuade some borrowers to take on more debt. Many countries are now in a position where their governments and companies live in fear of an increase in interest rates.”

http://www.nytimes.com/2015/06/30/business/dealbook/trillions-spent-but-crises-like-greeces-persist.html

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

The $4 Trillion Money Printing Press

Posted on by

“One pandemic, two great depressions, 11 major wars, and 44 recessions. Four U.S. presidents were assassinated while in office. Hundreds of thousands of businesses went bankrupt; tens of millions of Americans lost their jobs.  Did the U.S. government respond to many of these events with countermeasures? Of course.  But never once had the U.S. government resorted to such extreme abuses of its money-printing power as it did in 2008-10. Now, all that tradition of leadership and discipline was abandoned — all for the sake of perpetuating America’s addiction to spending, borrowing, and speculative bubbles.”

https://www.moneyandmarkets.com/72020-72020

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

John Hussman: All Their Eggs in Janet’s Basket

Posted on by

“Investors whose strategy is to follow the Fed – in the belief that stocks will advance as long as the Fed does not raise interest rates – are free to place all their eggs in Janet’s basket. On the other hand, for investors whose strategy is historically informed by factors that have reliably distinguished market advances from collapses over a century of history, our suggestion is to consider a stronger defense. Our greatest successes have been when our investment outlook was aligned with valuations and market internals, and our greatest disappointments have been when it was not. Both factors are unfavorable at present, and our outlook is aligned accordingly.”

http://www.hussmanfunds.com/wmc/wmc150622.htm

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

John Hussman: Recognizing the Risks to Financial Stability

Posted on by

“The past several years have featured little more than a gigantic asset swap, the short description being that massive volumes of government debt have been swapped by central banks for massive volumes of idle bank reserves, while massive volumes of low-yielding, covenant-lite debt have been issued into the hands of yield-seeking investors, in order to retire massive volumes of corporate equities at elevated valuations through buybacks. This has left the U.S. economy with a much more leveraged balance sheet than before the last crisis, and with much greater sensitivity to equity risk and debt default than at any point in history.”

http://www.hussmanfunds.com/wmc/wmc150511.htm

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

ECB’s Celebration of Its New $1.4 Billion Tower Is Spoiled by Protesters

Posted on by

“Anti-austerity protesters seeking to spoil the inauguration of the European Central Bank’s new headquarters in Frankfurt’s east end set vehicles alight, erected barricades and left a trail of destruction across the city.  Police deployed water cannons to restore calm and keep the demonstrators at bay in the area surrounding the 1.3 billion-euro ($1.4 billion) tower, after setting up barbed wire and road blocks. Nine days after the ECB started buying sovereign debt in a 1.1 trillion-euro plan to revive inflation and rescue the economy, protesters are laying the blame for recession and unemployment in the 19-nation euro area at the doors of Draghi and German Chancellor Angela Merkel.”

http://www.bloomberg.com/news/articles/2015-03-18/ecb-besieged-by-protests-as-draghi-celebrates-1-4-billion-tower

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

How Long Can Central Banks Push Bonds to Absurdity?

Posted on by

“By throwing free money around that has to go somewhere,and by making leverage essentially free, central banks have catapulted asset prices into absurdity. They have created a mechanism by which governments and corporations can load up on debt without paying the otherwise normal costs of capital, and sometimes at an outright profit, while at the same time depriving those whose money this is – regular investors, pension funds, savers, and others – of a return. Confiscation comes to mind.  But there are costs. It saddles these governments and corporations with a future problem: debt doesn’t just go away. It has to be rolled over (or be paid off, a novel concept in these circles).”

http://wolfstreet.com/2015/02/04/how-long-can-central-banks-push-bonds-to-absurdity/

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

Negative mortgage rates in Denmark; $3.6 trillion of negative yield debt

Posted on by

“With negative interest rates in Germany, Switzerland, Ireland, Belgium, and Denmark, it was about time that we saw negative mortgage rates in Europe as well. In January, as much as $3.6 trillion of debt in Europe and Japan traded at negative yields. Unprecedented bond buying by the European Central Bank (the ECB) and Bank of Japan (the BOJ) has resulted in a manipulation of global capital markets that could lead to another major asset bubble.  The situation has gotten so out of hand that not only are interest rates -0.2% at the ECB’s overnight deposit facility, but commercial banks are also lending to individuals at negative rates.”

http://finance.yahoo.com/news/negative-mortgage-rates-denmark-3-210020766.html

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

Corporate bond rates go negative

Posted on by

“In an unprecedented event, the yield on Nestle’s corporate debt went negative this week.  That means investors are essentially willing to pay for the right to park their cash in the safety of the Swiss chocolate company. The bonds might as well come with a note saying: ‘In Nestle we trust.’ All of this is a sign of the unusual times we all live in thanks to never-seen-before central bank policy. After all, normally bond investors are paid to provide financing, not the other way around. So what’s sparking this latest fad in finance? Central bankers around the world are experimenting with new recipes aimed at jump starting sluggish economies.”

http://money.cnn.com/2015/02/05/investing/nestle-corporate-bonds-negative-rates/

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

Negative Yields on Eurozone Sovereign Bonds Becoming New Normal

Posted on by

“On Wednesday, Finland became the first nation in the region to pay a negative yield on five-year debt sold at auction, suggesting that investors are unperturbed by the country’s weak economic expansion and its dependence on troubled Eastern Europe.  German government bonds offer negative yields on maturities up to six years, according to Tradeweb, as do bonds issued by Denmark. Five-year government debt carries a negative yield in the Netherlands, Austria, Sweden and Finland, and four-year government debt in France and Belgium.  In Switzerland, bonds with a maturity of up to a staggering 13 years offer less than zero in terms of yield.”

http://www.wsj.com/articles/finland-pays-negative-yield-on-five-year-debt-1423057657

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

ECB unveils massive QE boost for eurozone

Posted on by

“The European Central Bank (ECB) will inject at least €1.1 trillion (£834bn) into the ailing eurozone economy.  The ECB will buy €60bn bonds each month from banks until the end of September 2016, or even longer, in what is called quantitative easing (QE).  QE in theory increases the supply of money, something that keeps interest rates low and encourages borrowing and therefore spending.  The news sent the euro to an 11-year low against the against the US dollar.  The ECB also said it would keep eurozone interest rates at 0.05%, a record low.  Mr Draghi said the programme would be conducted ‘until we see a sustained adjustment in the path of inflation’.”

http://www.bbc.com/news/business-30933515

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