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I hate the word confidence in relation to economics. I’m not disputing IM when I say that it isn’t confidence with drives spending and velocity, it’s money. Confidence doesn’t drive spending, it is the other way around. Money in hand raises confidence.
One is falling into a trap when you bring “confidence” into the discussion. The very trap Economics has fallen into. Again I don’t want to argue with IM but I think it is more than just semantics to raise this point. “Confidence” is a red herring, as we say in the USA. It is a show me the money economy.The money is trapped in the financial economy. In the old days when bank loans were the largest source of credit by far then the credit cycle did first see financial asset prices turn up first as credit expanded but the real people economy soon followed. Now so much credit goes directly into financial and other assets, and stays there. It isn’t a ‘confidence’ economy it is a show me the money economy. Confidence is the result of more money, not the other way around.
On a deeper level it would be insane to want people in the rich developed world to want to spend more on stuff. We have enough stuff, poorly distributed to be sure. Evan at that however, and sadly borrowing a page from the reactionary right, even our poor are rich, by any historic standard. Economics isn’t going to save us.
From the Reuters story; “The prevailing view is that the U.S. central bank’s $4.5 trillion portfolio, vastly expanded by bond purchases aimed at stimulating the economy, will have to shrink once rates are on their way up,” has it backwards.
In order to raise rates the Fed may well have to shrink its balance sheet. It might be able to effect the quarter point raise in the Fed Funds rate without it simply by their sacred words and the assistance of their partners the banking giants.
The Fed will probably never sell out of its holdings. In all likelihood they will be adding to them soon enough.
While everyone was obsessed with the possible Fed Funds rate hike, which by the way is barely used anymore since the banks have $2.5Tn in ‘excess’ reserves, other short term rates have been rising already.
https://wallstreetexaminer.com/wp-content/uploads/2015/12/Capture-2.pngAnd then don’t forget the Brazils of the world or the frackers who simply can’t borrow anymore.
Angela Merkel wins Time magazines Person of the Year award.
Sure Time is below irrelevant but still……….
Illargi, I hope you appreciate that your quest is Quixotic. Your words that is. May they not remain so too much longer.
Turkey has an odd history as the military has continually thrown out governments and taken over. My take, which may be wrong, is they have done it in order to keep the government secular in the name of Ataturk. While only Pepe Escobar was starting to call Erdogan Sultan there was just an article in the NY Review of Books calling him that. I’ve theorized that the neocons have fallen in love with the idea that Turkey can be the the centralizing power in the whole region, as in sort of resurrecting the Caliphate. I also think that Turkey’s attacks on Russia have those same neocons in a state of ecstasy.
As to deflation the number one signal for Americans about everything economic is the stock market. Oddly nobody views stocks as inflating, when stock prices increase they only ‘increase in value’. When they fall however it is understood as deflation, even if it isn’t called that. Heaven and earth are going to be moved to keep any stock correction in the 20% range max.
The chaos everywhere else helps in that regard making the US the last Ponzi standing. (A Lee Adler term) The chaos the US is actively spreading could be via ignorance or error or by design, a tactical gambit or a strategic goal. No matter the motives or lack of same it contributes to keeping US financial and real estate asset inflated. For all practical purposes keeping assets inflated is now the reason for Americas existence. That at least is the driving force of all governance, if you want to call what we have here governance anymore. The populists on the right have zero clue about such things so their growing discontent has up till now helped the elites. They may hate the government for all the wrong reasons but the political center is not going to hold much longer here.
It’s a fine mess all ultimately due to the very reasons AE proscribes.
In the US wind generation is to my knowledge not subsidized and in any case is done only by for profit firms, many of which are what here are called regulated utilities. In any case none of them are ‘leftist’. Texas of all places has by far the largest proportion of it’s energy from renueables mostly wind but it is truly a special case as the state has an independent grid. If Texas is leftist then I may be the king of Sweden.
As a gear head I like the giant wind generators and view them as monoliths but of course they have their place which is away from homes. If they make economic or thermodynamic sense is another matter. In general I suspect wind is best applied on a smaller scale for more localized production.
The NY Times op ed is a bit late. Let’s say 35 years too late but still, it is a watershed moment so mark it well. It’s the beginning of the end of the monarchy and so too officially sponsored Salafi Jihad.
There are probably thousands of Americans, a tiny tiny minority to be sure, who see Saudi Arabia in the terms the article does, and worse, but we are nobodies. If perhaps there are a few somebodies who have had those ideas they dared not say it out-loud until now. Now they have permission. It is the Times after all that defines the boundaries of respectable debate on the great foreign policy (and monetary/financial) matters of the day. Think of the Times not as the old Pravda but as Americas Izvestia.
“1917–1991[edit]
Old Izvestia logo. It uses two letters that are no longer used in the Russian language (see Reforms of Russian orthography).
During the Soviet period, while Pravda served as the official mouthpiece of the Communist Party, Izvestia expressed the official views of the Soviet government as published by the Presidium of the Supreme Soviet of the USSR.[3] The full name was Izvestiya Sovetov Narodnykh Deputatov SSSR (in Russian, Известия Советов народных депутатов СССР, the Reports of Soviets of Peoples’ Deputies of the USSR).”https://en.wikipedia.org/wiki/Izvestia
On the end of the monarchy it is not all good news. Millions upon millions are going to die I believe. Oh well we got every drop of oil they could pump for 40 years so that the American way of life could go on unchanged.
Pepe Escobar’s preview of the now concluded Vienna talks. I don’t always agree with Pepe by any means but as an antidote to the conventional view he is great.
https://atimes.com/2015/11/and-heres-the-top-ten-terrorist-list-escobar/
The article posted here, right on cue, says “Seventeen nations, spurred on by Friday’s deadly attacks in Paris, overcame their differences on how to end Syria’s civil war and adopted a timeline that will let opposition groups help draft a constitution and elect a new government by 2017.”
Sure, various flavors of ‘good’ jihadis are going to participate in a democratic remaking of Syria. And I’m the king of Sweden.
His archive
““Islam is not a religion nor is it a cult. It is a complete system. Islam has religious, legal, political, economic and military components. ”
This is putting the cart before the horse. There is a shared culture in the Arabic speaking areas of the Middle East and North Africa that have integrated Islam into the culture. There was an Arabic speaking world that shared certain legal, political, economic, military, family and social arrangements long before there was Islam.
Dominant religions always become part of the culture, especially the political culture. Leaders be they kings or Presidents associate their power with the dominant religion in order to claim legitimacy and/or to consolidate and increase their power.
The ridiculous Saudi monarchy may well never have survived not sitting on the worlds greatest oil field but it would never have survived either without instituting a fundamentalist Islamic sect as the state religion. It is from that sect that jihad was nurtured until it now is exploding. The Saudis, officially via the monarchy or indirectly via citizens who are proponents of Salafi Islam, have financed every one of the menagerie of jihadi groups, including ISIS and let’s not forget al Queda and the 19 9/11 hijackers.
Well such ideas, theories, or is it semantics, makes no real difference on the ground. The well worn dynamics of call and response are certain to intensify with ordinary people who just want to live quiet lives with their families caught in the middle as victims.
It is best to try and view this all within the context of the end of modern industrial civilization, to use a term to try and sum up the views of AE. Things fall apart. The center does not hold. Each call and each response by political actors sure to hasten the demise of the current order.
There isn’t as much sea ice in the South because the South Pole is land, while the north pole is sea. So your right the North is far more important but what “these matters” means seems to be a loaded phrase whose meaning isn’t clear.
Common sense said drought ravaged and then civil war plagued Syria was a refugee factory in the making 2 years ago. Not that many people think in those terms but the US National Security state leaders surely did. Which leads to the question did Obama know or was he uninterested to the point of missing the common sense to see it coming.
Well the question of leaders are stupid or evil arises a lot and can never be answered and then one is always left trying to figure out which you would prefer leaders to be, ignorant/stupid or evil. It makes little difference really, for the victims.
I see zero regret in Obama about the millions of displaced and killed with his policies which favors the evil conclusion. At this point who could not see the “get rid of Assad” idea was bound to destroy an entire country.
Canada has plenty of problems with the oil and commodity bear markets and I believe the great neo liberal corporate/financial/banking world is going to squeeze Canada and Trudeau as much as possible to make things worse. I’ve got no clue what interest rate Canada is paying now for new borrowing but I think it is going significantly higher.
Trudeau isn’t a team player unlike Harper who came straight out of neo liberal central casting. Not to mention his slavish devotion to the American national security state. I mean he signed a ‘free trade’ agreement with Ukraine. How silly is that?
I suppose the wild card is Chinese money continuing to flow there especially the West.
In some future I expect Western Canada to be part of the US or whatever the Western part of America becomes if the US federal system breaks down.
US bank lending is on fire. It is now running at an annual rate of 8% higher year over year. It is likely the US is the only significant place in the world where bank lending is growing at all but this is an important fact.
Just a heads up. The US Treasury is essentially now at the debt limit and so net new supply is approaching zero. On Thursday the Treasury announced it would not hold its typical month end auction of 2 year notes which have typically been approximately equal to the expiring notes, so meant to roll over the debt. That leaves $32 billion that are expiring at the end of the month with nowhere to go or rather needing a place to go. 4 week bill offerings have fallen from $40bn a month to $5bn as well.
The point is that this is liquidity for the markets and stocks are feeling the love. When the debt ceiling theater comes to an end the process will reverse. The Treasury is going to hit the market for huge amounts and this will hurt the markets badly. There are endless stories that are written about why the stock market moves, both bull and bear, consensus or alt., but there is only one real story why and that is money. Liquidity drives stocks, period.
Ilargi always tweaking Nicole about her single minded and relentlessly logical public speaking is a hoot. I challenge anyone to be upbeat on these topics which are probably the most hope-less stories in human history. At least if your considering human life since there are now 7 billion of them.
There is no such thing as race, there is only culture. Obama was never part of US black culture. Obama has black skin and so is black but that has no meaning. He was only vaguely part of US black culture.
The CIA thing is hilarious. That isn’t how the world works. The CIA can’t plan anything much less a president 50+ years in the future.
Obama has a social talent for ingratiating himself to those with influence and power and a drive to do so, ie entry to Harvard, president of the Law Review. Thus equipped, along with a personal and rhetorical style that appeals to many he was plucked out of Chicago by the remnants of the old Chicago Democratic machine, mostly in the person of Rahm Emanuel, and made an Illinois State Senator. The rest is history.
l linked to Lee Adler’s explaination of the Feds reverse repo operation last week but it needs repeating.
“There has been so much misinformation and gnashing of teeth in the financial blogosphere about the spike in the Fed’s RRPs outstanding last week, that I must set the record straight. The RRP spike is a non-event.
The spike in RRPs is not evidence of a mushrooming financial catastrophe and crisis under way. It’s not that there isn’t a mushrooming financial crisis under way. There is. It’s just that last week’s RRP spike has absolutely nothing to do with it. It has to do with a Fed stupid parlor trick and the temporary shortage of short term T-bills along with the resulting excess of cash.”
https://wallstreetexaminer.com/wp-content/uploads/2015/10/Capture1.png
Those spikes have been happening at the end of quarters. It’s a stupid trick to help banks dress up their balance sheets. It was exaggerated last month because of one time factors. The number crashed on Oct. 1st.
The CIA backed fighters include al Queda associated groups. Moderates compared to ISIS I guess. Show me a case in history when irregular warfare was ever carried out by “moderates”. The entire concept is insane. The moderates opposition to Assad in Syria are those who are leaving for Europe so the term moderate Syrians is past tense.
It’s astounding that people are buying what is being sold here 30 years after Osama and the al Queda boys were on our payroll in Afghanistan. International jihad was invented by the US and the the Saudis. Of all the things that can be said about Salafi jihadists the term moderate isn’t among them.
Catch 22 ages very very well. So does the movie which left me cold back in the day but now I love it. Catch 22 was about bureaucracy and today’s world of corporations and institutions, government and NGO is vastly more bureaucratic than the WWII era was, except for the US military that is. The birth of our world springs as much as anything else from the seemingly almost spontaneous emergence of a vast military bureaucracy in WWII and then that experience fanning out to envelop corporations and institutions of all sorts.
Yossarian the individual caught in the wheels of the great bureaucracy.
The massive Fed reverse repo thing is not what the linked article says it is.
“The spike in RRPs is not evidence of a mushrooming financial catastrophe and crisis under way. It’s not that there isn’t a mushrooming financial crisis under way. There is. It’s just that last week’s RRP spike has absolutely nothing to do with it. It has to do with a Fed stupid parlor trick and the temporary shortage of short term T-bills along with the resulting excess of cash.”
No large corporation is American or French or any other nationality. The location of their incorporation a fluke of history. Corporations are becoming sovereign essentially. They still have to go through the motions of being subservient to law and states. This is ending as they write the laws, TPP, and politicians are owned by them. This is the arrow of history and the opponent of we alt thinkers. Will the arrow fall short short. Sure but when is the issue.
On Thursday $62bn of Treasury bills expired and so were paid off. Typically the Treasury just issues new ones and holders just buy them, it is called rolling over. Now however as the borrowing limit approaches the Treasury is constrained from issuing more. When bills expire like this and are not rolled over the cash must go somewhere else. The holders of those bills are the banking giants and their big customers. So if your wondering why the market soared on Friday part of the reason was that $62bn needed a home and obviously stocks became the place.
This dynamic of bill and even note paydowns will periodically flood the accounts of the big boys with no home until the debt limit is raised and the Treasury can begin to borrow more again.
All in all the slow down and then possible freeze on Treasury borrowing is a positive for financial markets as the world, which is desperate for more Treasury paper to buy since it is still the worlds benchmark financial instrument the very best collateral, will have to buy something else. Stocks typically or maybe longer term Treasury paper, or corporate debt or derivatives of various flavors. Of course everyone will be wringing their hands over how the debt limit will hurt ‘confidence’ but confidence doesn’t move markets, money does.
In the unlikely event that the debt ceiling theater stretches out most all Treasury bills will be paid down and the dynamic of cash needing a new home will end.
Regional sessions in developed and democratic countries at least always has a dark side. That is such things are stoked by politicians so that they can gain power. As the process develops the regions representation in national legislatures and governments wanes leading to essentially minority governments in parliamentary systems leading to further political dysfunction. It’s understandable that a Catalonia or Quebec has an independent streak but independence does not guarantee that much of anything will be better, except for the new national leaders, if and when separation takes place.
Well larger forces are driving many things in the direction of decentralization as all here at AE should know. Decentralization of sovereign states, or groups of them like the EU represents just a different aspect of a huge secular trend which has only just begun.
One oddity or is it an irony is that VW’s machinations were as I understand it meant to increase MPG’s at the expense of increasing Nitrogen oxide emissions. The irony is that by increasing MPG’s they were reducing CO2 emissions. It only stands to reason since less fuel used per mile means less CO2 per mile. The NO’s are a more immediate form of pollution which among other things produces smog and and all the attendant respiratory stress. CO2 is benign in those health regards but add inexorably to more greenhouse gas accumulation.
There is going to be all sorts of issues with people not bringing their cars in for reprogramming because they don’l want to lose the MPG’s.
Of course the sun heats the earths surface. It should go without saying but I will say it that the amount of input is a prime determinate of the globes temperature. After that how much of that heat is radiated back into space is a determinant of global temperature. Atmospheric density and composition determines the rate of radiation away from a planet. Increased CO2 in the atmosphere inhibits that radiation. The physics of this is not as straight forward as one might think but it is still simple physics. The issue of global warming from increased atmospheric CO2 is of no interest to physicists because it is a settled fact of physics.
Climate Science is primarily about measuring the amounts of CO2 and really all other inputs into the atmosphere from historic data and correlating that with temperatures and making predictions. That is a vastly complex job which serves to satisfy the curiosity of those involved which generates a lot of mental heat but very little light. As an alt economics student I’m skeptical of Climate Science models. The whens and how much of global climate are for me of little interest because it’s unknowable so I’m with the physicists. It’s getting warmer because of increased CO2 in the atmosphere.
Next question.
Martin Armstrong is a kook. A glorious one perhaps, but a kook.
The Feds mandate refers the Humphrey Hawkins law passed in 1978 which directs the Fed to adopt policies which promote job growth, low inflation and a stable currency. It should be noted that there are 3 mandates but the last, a stable currency is forgotten and so it’s now always called the dual mandate.
Of course the goals are contradictory and on a deeper level the goals are beyond the powers of the Fed deliver. So politicians gave the Fed mandate to do things beyond its powers and it enshrined monetarism and the Fed as the all powerful tools to regulate the economy. This was great for politicians since it relived them of making hard choices and fighting hard political battles. It was also great for the Fed because it obviously it gave it power. It was great for orthodox Economics for the same reason, it gave them power. To this day, despite 37 years of evidence that the Fed cannot fulfill its ‘mandates’ you will never hear anyone suggest that in fact it is impossible for the Fed to fulfill them. The orthodoxy is all powerful.
Humphrey Hawkins was and is a bit of foolish make believe given the power of law. The law itself didn’t cause our subsequent problems but rather marked an official intellectual/cultural/political turning point which ushered in the current era. In large part because it marked the retirement of the traditional Liberal elites from pushing back against ‘free market capitalist’ ideology and ushering in neo liberalism as our guiding philosophy.
The rule for anyone who has a hand in policy or in finance now is, and has been increasingly for 30 years, that in every possible short term lower rates are better. The increasing part is obvious now in that it’s impossible to find anyone mainstream who thinks it is a good idea.
That said how is the Fed going to raise rates? Words, or do they have a magic wand.
It’s best to read this to get a handle on the mechanisms involved. Words or magic wands won’t do it.
New York Times Describes New Fed BaBIRP Policy In Its Fed Interest Rate Explainer
The “zionist” thing is becoming endemic in these alt economic forums, not to mention anything coming out of Russia in relation to Ukraine and many other things as well. The word has many meanings, but in this context it’s about banking.
A brief history is in order. Lending at interest was almost unheard of Christendom until the Reformation.What lending there was often was done by Jews who had no strictures against lending. It was absolute Roman Catholic dogma that lending at interest was forbidden. Jews notably never followed the ban and so Jews tended to dominate banking as it grew.
That was then, For at least 400 years European Christians entered banking enthusiastically. Sure, up into the 20th century Jewish dominated banks were a significant part of the worlds banking giants but hardly all of them. The worlds banking giants today cannot be considered Jewish in any sense. Good old WASPS totally dominate the banking giants now and in no sense can they be called Jewish. Well save one. That being lending at interest, banking, 500 years ago was a significantly Jewish dominated enterprise. That’s ancient history folks.
Our current problems suggest that at least wariness about credit was in fact a well founded belief in moral philosophy. But credit and banking were not somehow thrust upon European Christians. No, the embraced it all on their own.
Neo liberalisms foundation is not banking but a belief in the God like powers of markets. In fact for neo liberals the market is God. Not that banks don’t play their part. Please be wary of falling into ancient prejudices. Our high priests of money and banking now are the ‘whitest’ people on the face of the earth.
For the most part the US opinion makers have not connected the dots between the US and it’s Gulf monarchies partners plan to oust Assad and the refugee crisis. They probably never will.
Dots that are being connected is that among the throngs entering Europe are Jihadists . One crackpot theory I have held for a long time, since 2000 to be exact and Bush vs Gore, is that ultimately it will be anarchists of various sorts that are going to be the catalyst for systematic dislocation. It turns out that to this day there is not a hint of domestic anarchism in the US or Europe but now from out of the blue there is another source. It may be a stretch to call the latest iteration of radical so called Islam anarchist but functionally it will do.
Epic migration into the US?
Legal immigration is high but epic, I don’t think so and as the chart shows non approved immigrants from the South have been leaving faster than they have been entering
Neo Liberalism at its finest. Well finest but not prototypical in that neo liberalism always proposes market solutions to problems caused by markets but in this case the ‘market’ didn’t cause the destruction of the Syrian and Libyan states. That was caused by, and it must be mentioned, their inherent instability with their borders established by the West, but then caused by the US and NATO, one in the same, with the insertion of mercenary and often foreign jihadis by the Gulf monarchies and presto, failed states.
Some whiffs of the fact that Obama is ultimately the prime actor has finally reached the mainstream, in dribs and drabs. Three years late of course and it won’t stick. He has presided over the advancement of some sexual rights and that’s good enough for liberals. That and the fact he won, just like Bill Clinton, is good enough for them.
This book is a must read.
https://www.barnesandnoble.com/w/never-let-a-serious-crisis-go-to-waste-philip-mirowski/1113507173
Neo Liberalism is a slippery thing and one can quibble about or critique if it is as unified as the author tries to advance but by attempting to unify the author provides a valuable insight into what is driving our world, over the cliff.
Any type of commune is almost certain to fail in the US. Most other places too but especially here. To choose a word a commune might be called a tribe and tribes just don’t happen spontaneously. It’s hard enough to get along with families living in close quarters or in situations with interlocking dependencies, much less an ad hoc one like some sort of communal arrangement. For better or for worse the modern world and further back the American way of life has always been arranged so that such dependencies are reduced to a minimum and that is all bound up with the American concepts of freedom and individuality. Actually that kind of freedom and individuality has terrible costs, that is if you think the American way of life is sort of nuts. As most here surely do.
Of course in the heydays of hippie communes the main objection was how they were communistic and wouldn’t work because of the resentments against the slackers but the worst problem really was just getting along with each other.
I thought back around 75 the whole commune thing was way too early. I think these sorts or social arrangements will only work by necessity, not choice.
Unless there is a picture the vast majority of Americans, or maybe it’s all people I don’t know, are incapable of imagining the ravages of war. Nothing is cheaper than mourning one dead child because there is a picture while the US has done absolutely nothing to prevent war in the Middle East and in fact everything possible to bring it on. All with a huge plurality of support for it.
In an extra sickening display today’s online NY Times allows that Syria is a mess and “A rising tide of Syrian refugees would sooner or later head for Europe. Yet little was done in Western capitals to stop or mitigate the slow-motion disaster that was befalling Syrian citizens and sending them on the run.” No shit Sherlock and where was the NY TImes by the way?
No pictures of dead Ukrainan babies or the million refugees by the way there so you can count on them continuing to support the ‘war’ against those ‘terroists’ in the Donbass.
9/11 was a teeny tiny speck of the human suffering that came after. Not that the US is responsible for all of it but certainly a lot of it and it has certainly been guilty ignoring the human cost and doing nothing to alleviate it.
And then there is America’s love of bombing cities, civilians. Everyone just loves it. So clean. Death by remote control. No messy beheadings like the savages. As long as there are no pictures of the headless babys, and there never are, Americans can pretend we are pure.
As you can see above hard attitudes are hardly just a European problem. As a general thing I doubt that any people at any time or any place in human history have had much tolerance for outsiders moving in. In the US as the frontier ended and the industrial revolution took hold at the same time that Europe was seeing the death throws of monarchies and the old order waves of immigrant flowed to the US and each group in their turn was disliked or hated. Italians, Irish, Germans somewhat, Poles and Slavs and Jews of various origins found themselves subject to dislike to distrust to hatred but the US had no quotas or bans as to the origin of immigrants until 1921. There was a blanket ban on Chinese immigration passed in 1882.
The current flood into Europe now is chiefly the direct result of the collapse of nations such as Libya, Syria and its vicinity, where the US and NATO decided that regime change was desirable so we helped bring in the bastard cousins of the Saudi version of Islam, jihadis, to do the job. Freeing their people from Qaddafi and Assad so they could enjoy the freedom of anarchy. No surprise they don’ like it.
In the bigger picture as economies and states devolve more and more people will be on the move. Such is the certain outcome of this time in history and the specific political circumstances in each case can make for satisfying exercises in blame but in the end it’s bound to happen as economies and states devolve. The actors in each place simply playing their parts and in each case the migrants/refugees are going to find precious little succor.
It needs mention the US has the vast oceans to ward off mass movements in and the steady flow north has already reversed. More Mexicans have left the US than have entered the last 6 years. Not that you could guess it by the latest frenzy about immigration in US politics. Wherein politicians and their fans devote themselves to the symptoms of all the things they can’t or won’t understand about the world now. With the US thus protected from mass movements it actually serves the interests of our elites to have the rest of the world descend into chaos. Spreading chaos is in fact a tactic that has been adopted to keep the US #1. If we can no longer rise in absolute terms or even rise at all then we can help insure all other places decline faster and so we will still be #1.
One problem the Fed has is they already have too much Treasury paper. The rest of the world wants that paper and buying up more even as the supply shrinks and shrinks, the deficit is now down to 2% of GDP, presents a serious problem. But that’s just technical stuff.
The big problem is that the sophisticated have known all along that QE only boosts asset prices not the economy. Not the economy directly anyway. Bernanke himself said QE was meant to raise asset prices and thus sacred sentiment, that new age trope so loved by our high priests of money, which would then boost the economy. Of course it isn’t sentiment which brings GDP expansion, it’s money. In this case the money went into the financial system to buy financial assets, and stayed there, as it had to. Anyway if they try QE again everyone will know it is only to boost stocks and that’s a dangerous political thing or will be, eventually. The Fed had better not do it. They will but they better not.
I understand a few things very well and many more I think I understand but I am at a complete loss of understanding about what Alexis Tsipras has done. I can think of no explanation for things like his depression over the no vote on the referendum to his trumpeting the latest bailout as a good deal.
He just as well could have been an agent of the powers that be for how he has presided over a situation and a deal that was horrible when he came in and yet he somehow made it worse. I simply can’t get my mind around it. I can’t understand it.
Raul, help me out here. Is there some strategy which will allow Tsipras to suddenly use a judo move that would turn defeat into victory, perhaps based upon an understanding about the precarious nature of the Euro financial and political system? Or if not victory exactly , because we know nobody is going to win as the system devolves, but at least cutting neoliberal juggernaut down to size?
The US stock market has had the volatility bled out of it the last several years under QE and with the other forces like HFT, the dominance of ETF’s over individual stocks and the retreat of the public. The rise since 09 is I think the longest without a 10% correction ever. The old Dow Theory signaled a bear market a couple of weeks ago.
What I am saying is a significant correction or an official bear market which is usually defined as a 20% drop are way overdue and that it is possibly a mistake to read too much into it if an actual drop of that magnitude happens. Yes, because of the many reasons covered here pertaining to the fragility and falsities of the financial world it is right to look for a dislocation that would be historic, but first things first. A bear market doesn’t mean the end of the world as we know it. It could but it almost surely will not happen in some great crash where everyone suddenly gets it.
Whatever the mechanisms of China’s PPT are it is a great example of socialism in action. Just not one that any old fashioned socialist would could conceive of. Here in the US the home of the PPT were socialism is an epithet you are never going to hear about how the vast army of Conservatives decrying the PPT as socialist. Everyone knows how their bread is buttered.
I am assuming instead that with China as an example the PPT mechanisms will grow larger and larger. After all how can we let the Chinese beat us at this capitalism thing if we let all that wealth evaporate in a stock bear market?
It should be noted that the Fed encouraged and really guaranteed the 08 09 stock market plunge when they let their balance sheet shrink and thus starve the Primary Dealers. It’s hard to believe they did this out of ignorance but equally hard to believe that they did it for nefarious reasons, ie to gain power for themselves and the banks but take your pick, it happened.
Don’t count on a serious sudden plunge in the US stock market any time soon. Buying in the stock derivatives, futures, options and ETF’s is certain to halt sudden plunges.
The RNB was pegged to the dollar and that became too large a burden. Not only was the dollar rising but the RNB was rising vs the dollar. It became stupid. It served to advertise how strong China is and supported the dream that the RNB would someday achieve reserve currency status but those are matters of perception and politics, not day to day economics.
The smart guys are now questioning whether Chinese officials know what they are doing. As if they ever did. They blew serial bubbles and as Doug Noland says that makes genius. When bubbles pop genius becomes scarce.
https://creditbubblebulletin.blogspot.com/2015/08/weekly-commentary-china.html
The US presidential sweepstakes to me is a reflection of our decadence and ignorance. A freak show on the right and in the center, what’s called the liberal side, a woman running a shell game.
It’s now forgotten but the Clinton’s when they left Arkansas for the White House were probably the poorest people ever to take up occupancy there. (George Washington was possibly the richest man in America when he took office) Their net worth in 1992 was $88,000. They didn’t even have a home and their car was 4 years old. The wages of neoliberalism then paid well. Their income the last 6 years or something was like $150 million. Little wonder she thinks the status quo is great. Their daughter, a perfectly nice young woman, displaying an almost perfect ignorance said after quitting a ‘job’ at NBC that paid her almost a million dollars over a couple of years of doing nothing I can discern actually said that she didn’t care about money. The mind boggles.
The rising star is one Donald Trump, a PT Barnum like character who is I think the president America deserves. Not a one of the candidates, not even the fringe lefty Sanders, actually has a clue about the nature of our situation. None have a plan B or think we could possibly need one.
