Federal Reserve

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.

America’s Structural Unemployment Crisis in Two Charts

by Wolf Richter •  • Comments Off on America’s Structural Unemployment Crisis in Two Charts

It didn’t even start with the financial crisis. It started before the 2001 recession. But the strategy exploded in 2009, and it’s still getting worse.

Dollar Hegemony Under Attack By Export-Superpowers Germany and China

by Wolf Richter •  • Comments Off on Dollar Hegemony Under Attack By Export-Superpowers Germany and China

The word dollar didn’t even come up when the Bundesbank signed the agreement with the People’s Bank of China. President Xi Jinping and Chancellor Angela Merkel looked on. It was serious business. Everyone knew what this was about. No one had to say it.

Paul “Contrafactual” Krugman: The Laureate of Keynesian Babble

by David Stockman •  • Comments Off on Paul “Contrafactual” Krugman: The Laureate of Keynesian Babble

The Fed prints $4 trillion and the national debt jumps $9 trillion in six years. We’re now in month 57 of the expansion, beyond the average 53 months – already on borrowed time. Now comes Professor Krugman proposing to “do something.”

The Risk of Stock-Market Vertigo

by Wolf Richter •  • Comments Off on The Risk of Stock-Market Vertigo

What can possibly go wrong with stocks these days? Five years of the Fed’s QE and zero-interest-rate policy, and look what happened: risks no longer exist. They’ve been priced out of the equation. But now the illusion is ending.

Will The Last Bear Please Turn Out The Lights

by Wolf Richter •  • Comments Off on Will The Last Bear Please Turn Out The Lights

When BlackRock CEO Larry Fink grumbled about “way too much optimism” in the markets, he wasn’t kidding. An entire mindset is benchmarking today’s record metrics against the splendor of 2000 and 2007: not to warn, but to prove that this time it won’t end in tears.

What Caused The Glorious Jump In Household Wealth (In One Insanely Good Chart) And Who Will Blow It Up Again?

by Wolf Richter •  • Comments Off on What Caused The Glorious Jump In Household Wealth (In One Insanely Good Chart) And Who Will Blow It Up Again?

The stock market has soared for five years, risks have ballooned, home prices have jumped. Gains built on the quicksand of endless liquidity and a lackluster economy. “Irrational exuberance” is back in the Fed’s vocabulary. As the Fed’s Fisher said, it may end “in tears.”

NASDAQ 10,000 – Or Something

by Wolf Richter •  • Comments Off on NASDAQ 10,000 – Or Something

“Paranormal liquidity stimulus” leads to “paranormal activity” to deliver that “parabolic overshoot” in asset prices. And there is no bubble in sight, not even in the Nasdaq Biotech index, which is up a cool 375%. Money is once again growing on trees.