Many people see the federal government as not reflecting their views at all. Some see the unending expansion of the state into every nook and cranny of life, and the gaming of the government by powerful corporate and political interests, as a real threat. Indeed that our massive government is encroaching on the things many Americans hold particularly dear, independence, for some – faith, economic liberty, liberty generally, privacy, and so on.
Abenomics is failing. The world’s third largest economy is now in recession, yet again. The massive “printing” of yen has not helped as we (and many others) predicted it wouldn’t. The Japanese threw all in and now the country is staring at a stark winter.
This speaks to the “financialization” of the modern economy we referenced in a post yesterday. In a fiat currency world the banks truly, and almost totally run the show. The central banks particularly. And the American Federal Reserve most of all. If one is riding the financial asset train one is likely better off than one was in 2000. If however one is not on that train, if one lives in the real economy as most middle class Americans do,
Sure, now they say it.
We’ll see how the rest of the day pans out. At this moment we’ve got an hour and a quarter to go. But medium term sentiment on Wall Street appears to be be shifting as we see yet another day of broad selling.
It’s been a weird ride since midsummer. Mostly down but with a few big pops up. The Dow is off 2000 points or so from its high. People are starting to look around with a little more adrenaline in thier veins.
It has been getting a bit warm around here. I thought it was just that the air conditioner was getting a little long in the tooth.
3 bold statements just in the headline, but even CNBC granted that Schiff deserved to take what it called a “victory lap.”
Schiff argues that the Fed does not plan to raise rates at all because it can’t raise rates. 7 years ago with the start of ZIRP and QE Schiff says the Federal Reserve entered a “monetary roach motel.” That the Fed is now stuck. Which is of some concern to say the least.
It should be noted also that there seems to be a lot of talk about less than 0% interest rates as of late (LZIRP).
There is some debate around here as to the world’s most crony company. There are many candidates but consistently in the top 5 or so is Goldman Sachs, Government Sachs.
Few companies have exploited the taxpayer and political connections to the extent Goldman has. Truly it is a company built fundamentally on cronyism.
In 2008 Goldman Sachs was leveraged more than 100 to 1 on its assets. (That is probably a conservative estimate.) When the economic tide turned it was fully exposed.
The reason we had the Crash in 2008 was because the Fed kept rates too low for too long. In response to the tech implosion and then the 9-11 attacks Allan Greenspan and the FOMC panicked and ended up inflating a worldwide housing boom which morphed into the disaster (to put it mildly) which is the Great Recession. There’s more to it than that but that’s basically what happened.
Consider now that Ben Bernanke (and Janet Yellen) have kept interest rates much lower for even longer than Greenspan did.
Well yeah. But sadly this is a revolutionary idea for many of the world’s old school Keynesian economists.
Absurdity, Bizzaro World, whatever. The financial realm has become a distorted fantasy. What is up is down. What made sense now does not. Market mechanism? Don’t harsh my buzz dude. Here, have a few mushrooms more.
“Bolt the doors! They’re from the Federal Reserve!”
We are 6 years out from the Crash and everything still feels weird. The economy hasn’t come back. It’s a strange new beast. Alive and not alive. A zombie. Feasting on the last scraps of the real economy.
Call it the new abnormal.
Since 2008 the world has been turned upside down. In our collective panic we have disrupted whatever used to pass for economic homeostasis. Now the globe is moving (moved) toward a negative interest rate environment for government bonds.
Please, take my money. I’ll pay you to take my money! Why am I paying a government to hold my money? Well, because the economy is so healthy of course.
Oh, it’s a bull market alright. Can nothing stop the QE induced party? The sun has come up and set a few times on this market, yet the DJ is still pumping the music and most importantly the drug dealers are still milling about the crowd.
Ibiza in pinstripes. Or if you prefer Las Vegas in pinstripes.