Hasbro, second largest toymaker in the US, confessed it would miss revenue estimates. Christmas wasn’t kind. Despite “double digit growth” in emerging markets, revenues fell by 2% for 2012 and by 3.8% for the quarter. Other corporations are in a similar predicament. But substantive inflation would have covered it up—not that the Fed hasn’t been trying.
Federal Reserve
The Currency Wars: Now US Automakers Are Squealing
by Wolf Richter • • Comments Off on The Currency Wars: Now US Automakers Are Squealing
Japan’s LDP went all out last year to re-grab power. Its platform: print and borrow with utter abandon to create asset bubbles and inflation, and to demolish the yen. Phenomenally successful! So far. But now, US automakers are squealing; they want President Obama to fight back—though the US has been printing and borrowing with utter abandon for years.
How Big Is “BIG”
by Wolf Richter • • Comments Off on How Big Is “BIG”
“Repression” is what Richard Fisher, President of the Dallas Fed, called “the injustice of being held hostage to large financial institutions considered ‘too big to fail.’” He sketched out the destructive impact of these TBTF banks that, as “everyone and their sister knows,” were “at the epicenter” of the financial crisis. And he offered a “simple” plan for coming to grips with them. But he did something else: he defined BIG.
Making Heroes of Those Who Slash Jobs
by Wolf Richter • • 3 Comments
Especially of CEOs who parachute into the executive office. Wall Street’s knee-jerk reaction can be phenomenal. Citigroup’s massacre of 11,000 souls caused its stock to jump. But the same day, we learn that wages adjusted for inflation dropped 1.4% in the third quarter—a continuation of 12 years of declines that has hollowed out the middle class, pushed people into the lower classes, and devastated the poor.
Bundesbank Slaps Fed In The Face
by Wolf Richter • • 2 Comments
“Yellen and Cisco lift US stock futures,” the headline read enticingly in the morning. Priceless. Their pronouncements were driving up the markets. But by the time the markets closed, the manipulative power of Fed Vice Chairman Janet Yellen had dissipated; the DOW was down 1.45%. And across the Atlantic, the German Bundesbank issued a tough warning about the very policies Yellen was propagating.
“The Fed’s Sole Purpose: Keeping The Banks Afloat”
by Contributor • • 1 Comment
Is the Federal Reserve really doing such a bad job… or does it actually do exactly what it’s supposed to do, but the average American is in the dark about what that is? In this explosive video, G. Edward Griffin talks about the Fed’s real role in the US economy and why – contrary to common belief – it is not this banking cartel’s mission to act in the best interest of the American public.
The Miraculous Decoupling Of Reality, For Now
by Wolf Richter • • 1 Comment
CEOs believe the next six months are going to be tough; and they’re reacting to it by slashing capital expenditures and jobs. These ugly trends “reflect global demand flattening out, particularly in Europe and China,” said Boeing CEO Jim McNerney. The numbers are evoking the dark days of 2009 and double-digit unemployment. It’s been a steep and bumpy slide.
“Forceful And Timely Action” To Nowhere
by Wolf Richter • • 2 Comments
“Japan’s experience is a sobering real-world reminder of why forceful and timely action is appropriate,” said the Fed’s Eric Rosengren in his desperation to rationalize QE3. It would be a flood of money, not the “muted” response from Japan to two decades of stagnation. “Appropriate fiscal policies”—even larger deficits—should be used to battle Japanese-style stagnation. Alas, no developed country has done that for longer and to a greater extent than … Japan. And no developed country is in deeper trouble.
QE, Zimbabwe, And The Surreptitious 30% Haircut Every Decade
by Wolf Richter • • Comments Off on QE, Zimbabwe, And The Surreptitious 30% Haircut Every Decade
Dizzying QE gobbledygook is upon us once again. It would restart its big 480-volt money printer, in addition to the desktop machine it had been using recently, the Fed said, in order “to help ensure that inflation, over time, is at the rate most consistent with its dual mandate,” namely “maximum employment and price stability.” Thus, more inflation magically creates more jobs, and “price stability” requires more inflation in order to become more … stable maybe?
The Pauperization Of America
by Wolf Richter • • 8 Comments
It’s been an unrelenting process. Survey after survey has shown that wages haven’t kept up with inflation since the wage peak in 2000. Families earned less at the end of the decade than at the beginning, a phenomenon not seen since World War II—the process of hollowing out the middle class. But now there is a new phenomenon: the unmentionable class, the class that doesn’t exist in America, is ballooning.