Tag Archives: Pretense Of Knowledge

Want to play the market? Count the Fed leak weeks

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“U.S. central bankers not only regularly leak secret information about monetary policy, but the leaks are so predictably timed that a savvy investor without access to the leaked information could make money just by buying stocks in certain weeks.  The weeks that have excess stock-market returns are generally the same in which there are closed Fed Board meetings, and increased volatility in short-term interest-rate futures contracts suggests that it is information on monetary policy from those meetings that is driving the pattern.”

http://in.reuters.com/article/2015/11/22/usa-stocks-fed-leaks-idINKCN0TB01120151122

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Meet China’s Stock Savior, Who Never Saw the Crash Coming

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“After China’s stocks crashed in June, the government put more than $400 billion at the disposal of a little-known state agency, the China Securities Finance Corp., headed by an academic and bureaucrat named Nie Qingping. Four weeks into the new role, the picture emerging from Nie’s published books and commentaries, as well as interviews with fellow academics, is of a professor with 25 years of experience watching stock manias — who still got blindsided by China’s latest crisis.  Since China Securities Finance started buying on July 6, a measure of volatility in stocks has surged to nearly a 20-year high. On July 27, the Shanghai Composite Index plunged 8.5 percent, the most since February 2007.”

http://www.bloomberg.com/news/articles/2015-08-02/meet-china-s-stock-rescue-chief-he-never-saw-the-crisis-coming

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U.S. Homeownership Rate Falls to 20-Year Low

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“The U.S. homeownership fell to its lowest level in 20 years at the end of 2014—levels last seen when national leaders embarked on a broad push to expand homeownership in the mid-1990s.  Over the past year, President Barack Obama and other administration officials have voiced alarm that lending has gone from one extreme during the bubble—too loose —to the other—too tight—in the aftermath of the bust.  Officials have walked a fine line in attempting to bar a return of the reckless products and practices that allowed the bubble to inflate 10 years ago while loosening some standards elsewhere to provide broader access to homeowners without perfect credit or big down payments.”

http://blogs.wsj.com/economics/2015/01/29/u-s-homeownership-rate-falls-to-20-year-low/

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Fed rate-hike speculation lifts U.S. dollar to three-month high

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“The dollar reached its highest in nearly three months against a basket of currencies on Monday on a rise in U.S. bond yields as traders built bets the Federal Reserve would raise interest rates later this year.  A plummet in gold prices to five-year lows under $1,100 an ounce also increased the appeal of the greenback, the world’s reserve currency.  Last week, U.S. Fed Chair Janet Yellen testified before Congress, reiterating U.S. interest rates will go up later this year if the economy continues to expand.  St. Louis Fed chief James Bullard told Fox Business network on Monday there was a higher than 50 percent chance the U.S. central bank will raise rates in September.”

 

http://www.reuters.com/article/2015/07/20/us-markets-forex-idUSKCN0PU01920150720

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Loads of Debt: A Global Ailment With Few Cures

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“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

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Ron Paul: Janet Yellen is Right, She Can’t Predict the Future

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American Exceptionalism: Putin, the Neocons, and Ron Paul

“This week I found myself in rare agreement with Janet Yellen when she admitted that her economic predictions are likely to be wrong. Sadly, Yellen did not follow up her admission by handing in her resignation and joining efforts to end the Fed. An honest examination of the Federal Reserve’s record over the past seven years clearly shows that the American people would be better off without it. Some say that eliminating the welfare-warfare state and the fiat currency system that props it up will cause the people pain. The truth is the only people who will feel any long-term pain from returning to limited, constitutional government are the special interests that profit from the current system.”

http://www.thedailybell.com/editorials/36314/Ron-Paul-Janet-Yellen-is-Right-She-Cant-Predict-the-Future/

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John Hussman: Recognizing the Risks to Financial Stability

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“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

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Follow-the-Data Fed May Play Follow-the-Markets to Avoid Shock

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“The Federal Reserve may be about to discover that letting the data drive its decisions on raising interest rates is easier said than done.  Fed Chair Janet Yellen’s new strategy, a departure from six years of explicit guidance, calls for adjusting policy according to how the economy evolves. That will make it harder for investors to predict the Fed’s decisions, and risks hurting growth if a surprise triggers a surge in bond yields that stifles business investment and starves the housing recovery.”

http://www.bloomberg.com/news/articles/2015-05-11/follow-the-data-fed-may-play-follow-the-markets-to-avoid-shock

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There They Go Again: Fed Officials Give Rate Timetables

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“Federal Reserve officials insist that the outlook for interest rates depends on how economic data evolves and isn’t driven by the calendar. They are nevertheless offering various views on the probable timing of the first increase since 2006.  The Fed’s pledge that interest rates will stay low for a ‘considerable time’ could mean anything from two months to one year, Vice Chairman Stanley Fischer said today.  New York Fed President William C. Dudley said this week that forecasts for an increase in mid-2015 are ‘reasonable.’ Today, San Francisco Fed President John Williams said that timeframe is a ‘reasonable guess to my mind.'”

http://www.bloomberg.com/news/2014-10-09/fischer-says-considerable-time-is-2-months-to-a-year.html

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Bill Bonner: Get Ready for QE4

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Bill-Bonner2

“Stocks have barely begun to correct (the S&P 500 is down about 7% from its September high) and the St. Louis Fed president is already preparing for QE4.  But where is the proof – from logic or experience – that QE pays off?  It is a shame that quack philosophers, politicians and central bankers are not subject to penalty. After all, bridge builders and hedge fund managers suffer shame and ruin when their projects fall to pieces.  Fed officials are promising more cash and credit, neither of which they actually possess.  You’ll recall that stocks fell when QE1 and QE2 ended. Why shouldn’t they fall now that QE3 is ending too?”

http://bonnerandpartners.com/get-ready-qe4/

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