At the CPAC, as Republicans struggled with the future, some speakers drew crowds of over 1,000 people. But Dallas Fed President Richard Fisher was shuffled off to “an out-of-the-way ballroom” with barely two dozen people showing up; yet he’d talk about “the injustice of operating our economy under the thumb” of too-big-to-fail banks.
Federal Reserve
Dow Hits New High, 59% of Americans Feel A Recession
by Wolf Richter • • Comments Off on Dow Hits New High, 59% of Americans Feel A Recession
By the irony of timing, the Dow hit an all-time high as markets opened. Exuberance wafted through the air. Hype was flowing thickly. Happy days were back. New highs beget new highs. And everyone knew why: the Fed’s money-printing and asset-purchase operations. By the irony of timing… because 30 minutes later, kitchen-table reality polluted the scene.
The Great Backpedal: The World Has NOT Come To An End
by Wolf Richter • • Comments Off on The Great Backpedal: The World Has NOT Come To An End
Now that the “sequester” is in effect, horrid budget cuts would hit the US. 750,000 people would lose their jobs, planes would stop flying, children would go hungry, the Navy would no longer be able to operate its ships, according to the media. Fear-mongering that the White House drove to shameless heights. But suddenly, furious backpedalling has commenced.
The Fed Is Blowing A Dangerous Bank Deposit Bubble
by Lee Adler • • Comments Off on The Fed Is Blowing A Dangerous Bank Deposit Bubble
Contributed by Lee Adler, The Wall Street Examiner. The Fed is growing deposits far faster than banks can deploy them, or than the economy can use them. It is growing them far faster than anybody wants or needs. And so, there are “hundreds of billions of dollars of potential fuel unused.” Therein lies the potential for big problems.
What Do They Know That We Don’t?
by Wolf Richter • • Comments Off on What Do They Know That We Don’t?
Friday evening when no one was supposed to pay attention, Google announced that Executive Chairman Eric Schmidt would sell 3.2 million of his shares in 2013, after having already sold 1.8 million in 2012—suddenly dumping 53% of his Google shares, though he’d sold practically nothing from 2008 through 2011. And Google’s reasons don’t make sense.
Corporations Are Begging: We Need More Inflation!
by Wolf Richter • • Comments Off on Corporations Are Begging: We Need More Inflation!
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.
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.