Federal Reserve

The Hazardous Hunt For Carry – Why The EM Rebound Isn’t Real

by David Stockman •  • Comments Off on The Hazardous Hunt For Carry – Why The EM Rebound Isn’t Real

The monetary plumbers keep banging money market rates to zero, thereby ignoring what the money market rate really is in a financialized, debt-ridden system: the price of hot money, the single most important price in all of capitalism.

When $1.2 Trillion In Foreign Bank Funds In The US Dissipate

by Wolf Richter •  • Comments Off on When $1.2 Trillion In Foreign Bank Funds In The US Dissipate

It fits the pattern of gratuitous bank enrichment perfectly. This time, the big beneficiaries of the Fed are foreign banks. An unintended consequence, with big impact on the “recovery.”

Who Is Getting Crushed in This Bull Market?

by Wolf Richter •  • Comments Off on Who Is Getting Crushed in This Bull Market?

By now, this wondrous bull market constantly gets benchmarked against the dotcom bubble. It’s different this time, we’re told, even on NPR. But the wholesale destruction of financial assets has already started, one pocket at a time.

This Chart Is A True Picture of The Bank Credit Bubble In America, Now Bigger Than The Last One (Which Blew Up)

by Wolf Richter •  • Comments Off on This Chart Is A True Picture of The Bank Credit Bubble In America, Now Bigger Than The Last One (Which Blew Up)

For a while, rumor had it that banks weren’t lending, and that this was the reason the recovery has been so crummy. There was no demand for loans, and banks were too tight with their lending standards. Or so the story went.

Biggest Credit Bubble in History Runs Out Of Time

by Wolf Richter •  • Comments Off on Biggest Credit Bubble in History Runs Out Of Time

Yield investors, driven to insanity by the Fed’s interest-rate repression, hold their noses and close their eyes to scrape up even the crappiest paper just to get a little extra yield. “On the way in, there’s insatiable demand.” Alas, “it’s going to be a disaster on the way out.”

Richest 200 Moguls Made $13.9 Billion Today

by Wolf Richter •  • Comments Off on Richest 200 Moguls Made $13.9 Billion Today

Bernanke doesn’t regret any of the Fed’s actions, he said, except not explaining them to the people. They “really don’t understand why we did what we did,” he said. But there are a few people who do understand.

Housing Bubble 2.0 Veers Elegantly

by Wolf Richter •  • Comments Off on Housing Bubble 2.0 Veers Elegantly

They’re not even trying to blame the weather this time. “Housing affordability is really taking a bite out of the market,” is how Leslie Appleton-Young, chief economist for the California Association of Realtors explained the March home sales fiasco. “We haven’t seen this issue since 2007.” In Southern California, the median price soared to a…

What the Heck is Going on With US Treasuries In Belgium?

by Wolf Richter •  • Comments Off on What the Heck is Going on With US Treasuries In Belgium?

The tiny country of Belgium with a GDP of $484 billion, a country that became famous to the chagrin of some people because it did just fine for a couple of years without a national government – well, it’s growing an enormous mountain of US Treasuries.

What Happens When ‘All Assets Have Become Too Expensive?’

by Wolf Richter •  • Comments Off on What Happens When ‘All Assets Have Become Too Expensive?’

A report from the asset management and investment banking division of Groupe BPCE, the second largest bank in France, predicts what daredevil voices at the maligned margin of financial analysis have worried about for a while: another global financial panic.

Biggest Credit Bubble in History Flashes Warning: ‘Seek Cover’

by Wolf Richter •  • Comments Off on Biggest Credit Bubble in History Flashes Warning: ‘Seek Cover’

Hidden in the IMF’s Global Financial Stability Report is a doozie of a chart. “Seek cover, implosion in sight,” it screams. It depicts the bubble in covenant-lite and second-lien loans, the same that helped blow up the banks in 2008. Only this time, they’re even worse.