It was the day when Private Equity firms – the smart money, the great beneficiaries of the Fed’s bond-buying binge – announced their intentions to the rest of the world. The heavy hitters were there, and they let fly some pungent words. In short, they were “selling everything that’s not nailed down.” Turns out, they weren’t kidding.
Federal Reserve
The Big Four Central Banks Muddy The Same Sea Of Liquidity, And Then There’s China
by Lee Adler • • Comments Off on The Big Four Central Banks Muddy The Same Sea Of Liquidity, And Then There’s China
Contributed by Lee Adler, of The Wall Street Examiner. The Fed, ECB, BoJ, and BoE all deal with the same banks. Of the Fed’s 21 Primary Dealers, its sole counterparties, only seven are US domiciled. Three are Canadian, eight are European, including three British banks, and three are Japanese. All of them are major players in Europe and Japan.
David Stockman: When The Fed Capitulated To Financial Hoodlums
by David Stockman • • Comments Off on David Stockman: When The Fed Capitulated To Financial Hoodlums
“The market had been taken over by white-collar financial hoodlums who needed a trading fix every day,” writes David Stockman, Director of the OMB under President Reagan. “These punters and speculators were asserting an entitlement to any and all government policy actions which might be needed to keep the casino running at full tilt.”
Controlling The Implosion Of The Biggest Bond Bubble In History
by Wolf Richter • • Comments Off on Controlling The Implosion Of The Biggest Bond Bubble In History
In theory, the Fed could continue to print money and buy Treasuries and mortgage-backed securities, even pure junk, until the bitter end. But the bitter end would be unpleasant for those that the Fed represents – and now they’re speaking up publicly. They’re worried that their system might break down. It would threaten their empires. It would be the bitter end.
Biggest Bond Bubble In History Is Turning Into Carnage
by Wolf Richter • • Comments Off on Biggest Bond Bubble In History Is Turning Into Carnage
“We’ve intentionally blown the biggest government bond bubble in history,” confessed Andy Haldane, Director of Financial Stability at the Bank of England. The bursting of that bubble was a risk he felt “acutely.” He saw “a disorderly reversion” as the “biggest risk to global financial stability.” Seatbelts are being fastened; the clicks can be heard around the world.
The Day The Big Fat Junk-Bond Bubble Blew Up
by Wolf Richter • • Comments Off on The Day The Big Fat Junk-Bond Bubble Blew Up
Junk bonds had a phenomenal run. With each truckload of money that the Fed delivered to the markets, valuations soared and yields plunged. Desperate investors, mauled by the Fed’s zero-interest-rate policy, took on risks no questions asked. But suddenly the feeding frenzy turned into a brutal rout – a harbinger of things to come in other markets.
Jobs Barely Keep Up With Population Growth
by Wolf Richter • • Comments Off on Jobs Barely Keep Up With Population Growth
So, 175,000 jobs were created in May. The gains for March and April were revised down by 12,000. The unemployment rate ticked up to 7.6%, from 7.5%, or as the BLS said in its politically correct manner “was essentially unchanged.” With disturbing racial disparities that we’ve become inured to. A showcase of the dreary impact of the Fed’s policies on jobs!
Fed’s Fisher Hilariously Slams Fiscal-Policy Chaos, Slugs QE, And Throws In Funny Video Spoof of Congress
by Wolf Richter • • Comments Off on Fed’s Fisher Hilariously Slams Fiscal-Policy Chaos, Slugs QE, And Throws In Funny Video Spoof of Congress
Every President His Bubble – And Its Aftermath
by Wolf Richter • • Comments Off on Every President His Bubble – And Its Aftermath
During their second term, Presidents become obsessed with “legacy.” One of the yardsticks to measure success is the stock market. Many people can relate to it. Retirement depends on it. It’s mentioned even on NPR several times a day. Outside of a few shorts, everyone wants it to go up. But President Obama must now be biting his fingernails down to the quick.
“The Mother Of All Shorts”
by Wolf Richter • • Comments Off on “The Mother Of All Shorts”
The Dow and S&P 500 are stumbling like drunken but determined sailors from one all-time high to the next, despite lousy employment and economic data, and declining corporate revenues. Bonds have done the same, and their 100-year graph has assumed the terrifying shape of open crocodile jaws, worse even than in 1999 and 2007.