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Jan 31, 2022 - 12:16:12 PST
'The six trillion dollars of U.S. government deficit spending that has occurred over the last twenty-one months necessitated the Fed to do something called debt monetization. And when it comes to asset prices, it has indeed worked magic.'
For almost a half-century, value-investing icon Jeremy Grantham has been calling market bubbles. Now, he says U.S. stocks are in a “super bubble,” only the fourth in history, and poised to collapse. In this interview, Grantham, co-founder of Boston’s GMO, goes further, explaining his bubble analysis and discussing what he sees as multiple threats to the economy and the planet, including persistent inflation and climate change.
You’re no doubt confused by the market’s action of the last week. Are we about to see a waterfall crash… or are stocks about to explode higher to new highs? The answer is probably neither. Markets are tricky things. More often than not, their goal is to induce the maximum amount of suffering to the maximum number of investors.
Technically speaking, the rebound from the 2020 recession wasn’t strictly a supply shock. That was a huge part of it, no doubt, but a near-concurrent demand shock, if you will, also materialized. The combination of the two left the public bewildered, believing it an actual inflationary impasse which could only be further passed on into this year.
Federal Reserve Bank of Kansas City President Esther George said the central bank could take less aggressive actions in raising interest rates by shrinking the balance sheet more forcefully, which she said could help to avoid dangerous financial imbalances.
(They got there in starkly contrasting ways, but Latin America’s two biggest economies have found themselves in a similar and unenviable place two years into the pandemic: Back in recession.
The Fed is very wary of shrinking its ill-gotten assets this time around.
On Wednesday, the Federal Open Market Committee (FOMC) held true to its monetary-tightening timeline despite last week’s 10 percent drawdown in most major indices, effectively saying, “10 percent is not enough.” With retail sales numbers that will surely return to trend without more stimulus (see chart), a gridlocked Senate...
Here we go again. Since the original Gulf War in 1991, a certain pattern has emerged. Every few years, the regime in Washington attempts to whip the American people into a frenzy so that they will support the latest American invasion “necessary” for regime change, “spreading democracy,” or some other agenda item.
China’s ambassador to the US on Friday warned that the two countries could face a potential “military conflict” over the status of Taiwan. Ambassador Qin Gang made the bold claim in an interview with NPR on Thursday, accusing the US of encouraging Taiwan to seek independence.
Live Updates: U.S. Faces Off With Russia at U.N. as Ukraine Standoff Continues: NYTJan 31, 2022 - 09:26:09 PST
Russia, in opening remarks before the U.N. Security Council, called the meeting “an attempt to mislead the international community” and an example of “megaphone diplomacy.” The U.S. representative responded, saying, “Imagine how uncomfortable you would be if you had 100,000 troops sitting at your border.”
"At this stage, two things seem pretty clear: Inflation is high and will likely remain above target for a few years. My own view is that the FOMC is painting a rather rosy picture, and that market expectations provide a better guide for estimating inflation."
"The fact that PPP was poorly thought through, recklessly implemented and administered, and ended up benefiting those who are least likely to need it is, for politicians and bureaucrats, a feature, not a bug."
FOMC meeting made for a hawkish week, at least within the headlines. “Banks Scramble to Change Fed Rate Calls After Hawkish Shift.” “Rate Traders See Risk of More Than Four U.S. Fed Hikes This Year After Hawkish Powell.” “US Stocks Drop in Wake of Hawkish Federal Reserve.” “Hawkish Fed Shakes Investors”...
American families are feeling the financial squeeze of soaring inflation and a persistent pandemic as fractious Democrats return to Washington this week no closer to a deal on a tax and spending bill party leaders hoped would by now provide relief.
Raphael Bostic and Goldman Sachs are both calling for dramatic rate increases to fight inflation … that they helped cause with their monetary stimulypto. I call this The Fed’s March of the Toreadors as The Fed now attempts to kill the bull market.
Jan 31, 2022 - 07:40:11 PST
Nothing has been the same since the financial crisis of 2008 (except we still have insider-trading superstar Nancy Pelosi as US House Speaker). What has changed is that US Public Debt to GDP (nominal dollars) has doubled.
Jan 31, 2022 - 07:37:48 PST
The misery index is traditionally inflation rate plus U-3 unemployment rate. The RENTER misery index is the Zillow Rent Index YoY + U-3 unemployment rate to demonstrate the hardship of renters because of soaring home prices. Notice that because of rising home prices, the Renter misery index has overwhelmed the improvement in unemployment.
Jan 31, 2022 - 07:35:34 PST
Well if the Atlanta Fed’s GDPNow forecast is accurate, The Federal Reserve is going to have to think about its 5 upcoming rate cuts. Because its Crying Time for the Biden Administration.
Dear Mr. Fed Chair Powell Sir, Rents Are Blowing Out and People are HurtingJan 31, 2022 - 07:33:20 PST
In 34 of the largest 100 cities, rents spiked by 15%-28%. Tenants get to pay for your reckless monetary policies that made the wealthy far wealthier.