Bloodletting among retailers, the Snap IPO that turns stockholders into zombies, China’s credit bubble that makes the whole world jittery (video).
“Fake prices” and “fake price discovery” in the financial markets, derivatives that have “metastasized” and are far larger than the underlying economy, creating a false paradigm that governments use for their policies…. Stacy Herbert and Max Keiser have at it in the first section of the Keiser Report.
My part starts 12:40 minutes into the video. We discuss the bloodletting among retailers and the misbegotten IPO of Snap whose shares — they plunged 33% in 9 trading days — turn shareholders into zombies. I call for a rebellion by institutional investors, which is exactly what happens. And I vivisect the credit bubble in China. It’s so huge even the New York Fed gets jittery. When will it implode and how will it impact the rest of the world?
The Fed is way behind the curve. Its target for the fed funds rate is still low despite three mini-rate hikes since December 2015. It’s still highly stimulative. And it has been outpaced by inflation. But at least it now has acknowledged seeing the curve. Read… Inflation Hits Consumers, Mortgage Rates Take Off, “Financial Repression” for Bondholders and Savers