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Fed Official: ‘We Need to Be Cautious’ on Raising Rates After Bank Failures: WSJApr 11, 2023 - 12:19:03 PDT
“At moments like this of financial stress, the right monetary approach calls for prudence and patience,” said Chicago Fed President Austan Goolsbee.
Higher interest rates could force the Federal Reserve to incur greater operating losses on its portfolio of assets and pause remittance payments to the US Treasury Department for “some time,” undercutting a source of government revenue, according to new projections from the New York Fed.
The following chart, via The Daily Shot, highlights the record move by US banks to dump low yielding mortgage backed securities.
The statutory deadline for Congress to complete action on a concurrent budget resolution for Fiscal Year (FY) 2024 is April 15.
In the United States, though, "money" has a constitutional basis so firm that, despite its name, a US government CBDC would not be "money" or even "currency." It could exist as one payment system among many, but without violating the US Constitution it could not be forced on Americans as the sole final means of payment…
"Given the increasing use of the dollar as a means of imposing sanctions, some foreign powers see a pressing need to develop the capability to transact outside of US-dollar-based systems. We are witnessing the development of financial contingency plans." ~ Peter C. Earle
Companies on the S&P 500 index are expected to report a 6.8 per cent decline in first-quarter earnings compared with the same period a year earlier, according to analyst estimates compiled by FactSet. That would be the biggest fall since the more than 30 per cent plunge in the second quarter of 2020, which came as the rapid spread of Covid-19 led to a widespread economic shutdown.
I captured those charts early this morning. The odds have shifted a bit but the result is still a hike in May and a cut in July.
Inside The Credit Crunch: Biggest Drop For Small Business Credit Availability In Over 20 YearsApr 11, 2023 - 11:42:36 PDT
Over the weekend we reported that the credit crunch had entered the crash phase when we showed that in the last two weeks of April, a record $105 billion in commercial bank loans and leases were either sold, discharged or otherwise transferred from bank balance sheets...
Fed Budget Deficit Hits $1.1 Trillion First Half of Fiscal 2023, $430 Billion Higher Than Last YearApr 11, 2023 - 08:31:18 PDT
Government spending was 13% higher so far this year compared to 2022, while revenues dropped 3%, the CBO said. Higher interest rates are a main driver of this year's higher deficit, as the government paid $90 billion more in interest payments in the first half of fiscal year 2023 compared to 2022.
Still, the world is saying to the U.S.: “Dollars? We don’t need no stinking dollars.” Indeed.
The basic problem, as we will be reviewing is that we have a number of fundamental risks and problems that have been building for many years when it comes to elevated asset prices, interest rates, inflation, the safety of the banking system, and the value of the dollar.
Apr 11, 2023 - 07:52:16 PDT
As I have also outlined in many past articles, now is the time you want to be preparing for what will likely be the most difficult bear market we have seen since the Great Depression.
The Fed is OK with this development and will be until there are more bank failures.
Apr 11, 2023 - 07:48:26 PDT
Between inflation under Biden and The Fed’s counterattack to get inflation to 2%, I call this the Biden Blitz. Unlike what the elites in Washington DC think, small business are the cornerston…
"Risk Of Harder Landing": IMF Cuts Global GDP Outlook, Warns Of "Heavy Downside Risks" Due To Banking CrisisApr 11, 2023 - 07:45:54 PDT
The IMF trimmed its global-growth projections in its latest World Economic Outlook report (link), warning of high uncertainty and risks as sticky inflation and financial-sector stress adds to pressures emanating from tighter monetary policy. GDP will likely expand 2.8% this year and 3% next year, each 0.1% less than forecast in January, the fund said in its latest forecast; That...
Historically, classical banking functioned as a way to safeguard people’s money—banks charged a fee to depositors for holding money and administering transfers. Today, banks generate enormous profits from making loans to borrowers—by lending out far more than they hold on reserve. How has the relationship between the depositor and the bank changed over time?
Once the gold price breaks above the prior highs, the next move higher in gold -- the bubble phase -- will move a lot faster than most people will expect. None of your prior tools is going to work. Too many will sell too early ...
Gold Prices Climb, on Track to Finish Above $2,000 per Ounce for Sixth Day: MWApr 11, 2023 - 06:01:18 PDT
Gold futures advanced on Tuesday as the most-active futures contract was on track to settle above the $2,000 level for the sixth straight session as a softer U.S. Dollar and Lower Treasury yields...
US gold giant Newmont Corp. has made a fresh bid for Australian rival Newcrest Mining Ltd., sweetening its record offer to A$29.4 billion ($19.5 billion) to bring closer the prospect of a precious metal behemoth.