Yes she will.
India looks like a trial run to us.
Sadly it really has been a trial for the Indian citizenry.
No reason eh? It’s perfectly OK for a central bank to buy the market. Price discovery? Reality? Such things are so passe. So pre-2008.
Remember when people used to talk about this sort of thing in hushed tones? It wasn’t that long ago. Now? Right out in the open. Heck in some places it’s already DONE right out in the open.
Goldman is in the top 5 crony capitalist companies based in the USA. It might be number 1 but there are contenders.
In another life I wanted to work at Goldman.
As we’ve said before Puerto Rico is Detroit with palm trees. Its massive patronage system, its army of “public” employees and big government generally bankrupted the island. Now the Dems want the government employees to get the pensions for which there is no money, all the while stiffing the people who lent Puerto Rico the money it now owes.
There are pretty much no good guys here. The government workers are to blame. The bondholders knew they were buying sketchy stuff but assumed they’d be indemnified.
The refrain from politicians and Wall Street has now become all too familiar.
Bail us out or the world will blow up! Financial dysfunction will catch like wildfire. If you don’t give us piles and piles of money (taxpayer money of course) you may just wake up to a world which is a smoldering cinder. It will be Mad Max in the streets. The sun will go down and never come up. In short, do YOU Mr.
This definitely adds some perspective on current market conditions.
Flat as your returns.
It is no secret that we at ACC believe there are deep systemic problems in the economy. All the current cronyism, economic obfuscation, over spending, over taxation, government intrusion, and most importantly Keynesian central bank meddling does not bode well for the future. (Though we can and must correct our ways in an historic way.)
Will 2015 be looked upon as the year the “recovery” began to completely stall? Will 2016 be worse than a stall?
Many think that junk bonds now are similar in some respects to the subprime housing debt bulge of a few years ago. (Junk by definition is subprime.) It is possible that the distressed bond market which is seeing challenges currently indicates serious challenges to come in the short term for the economy in general.
Junk bonds are highly exposed to economic trouble (they are distressed debt) and the market is large.
Think of them as a bluff on the economic sea which feels the effects of an approaching storm first in a similar way to how no doc mortgages were the first to be buffeted in 2006/2007.
You might not think you have too much to worry about if junk bonds go kablooey. You’d be wrong.
And remember, this is facilitated fundamentally by our all-wise Federal Reserve. I love those guys.
It’s funny how words and names flash up out of the darkness and suddenly become important. Friday’s was Third Avenue, a mutual fund company whose junk bond fund just blew up. The fear is that there are other bond mines out there. Cashin says that it reminds him of the early part of the financial crisis in 2007.
Here’s an alternative solution to the “radical” one the Obama administration is proposing for Puerto Rico. It is significantly more sane. Not too keen on the “public/private partnerships” though. That’s just code for sanctioned cronyism.
That’s not Uncle Sam’s money he’s giving away. He actually doesn’t have any money. That’s YOUR money.
Watch this. Many states with large union presences, with exorbitant pension obligations for state employees, don’t really see a way out of their situation without cutting pension payouts. No one will say it officially but the promises made many of these people by politicians (who were funded by state employee unions by the way) won’t be honored because they were BS from the very beginning.
It happens. It hasn’t for a while. But it happens.
Still, pretty crazy if you think about it.