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Fed Warns Of Crackdown On Leveraged-Buyout Deals

"The Federal Reserve warned it may need to take additional action to rein in banks' funding of corporate takeovers after observing continued deterioration of lending standards this year. The statements were the latest warning that U.S. regulators want banks to end practices they see as risky in so-called leveraged lending markets. The Fed and the Office of the Comptroller told banks in March 2013 to avoid funding takeover deals that would leave companies with high levels of debt. Federal Reserve Chairwoman Janet Yellen said that some bank-underwriting standards had loosened as a response to investor appetite for additional risk, a byproduct of low interest rates." Continue reading →

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Yellen: How High Is Up?

"Yellen seems to be setting the table for continued monetization not industrialization. The Fed under Yellen, as under Bernanke, is concerned mainly with the 'monetary economy' because that benefits globalist strategies. A healthy 'normal' economy helps working class people. A monetized economy boosts stock markets, upscale real estate, high-end luxury goods, speculative investments, etc. From my point of view, this is no coincidence and it's one reason High Alert continues to present our 'Wall Street Party' meme. A slow economy awash in currency that is gradually trickled into stock and bond markets is an 'investor's' economy." Continue reading →

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Yellen Concerned Fed Models Fail to Predict Price Moves

"Federal Reserve Chair Janet Yellen is concerned that the standard models central banks use to forecast inflation may be broken. Behind her disquiet: the failure of the models to foresee the path of prices in the U.S. during the last recession and its aftermath and in Japan during its deflationary period from 1998 to 2012. U.S. inflation has been higher than the simulations suggested, while Japanese price declines proved more persistent. Yellen alluded to her concerns in a speech last week, saying the Fed has to 'watch carefully' to see if inflation picks up as the central bank projects -- and hopes -- during the next few years." Continue reading →

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Doug French: The Market Is Rigged

"In the end, the controversy surrounding high-frequency trading is likely much ado about nothing. For one thing, the industry peaked five years ago, pulling in $5 billion in profits. In 2012, it pulled in $1 billion. That might sound like a lot, but JPMorgan Chase made $5 billion just last quarter. As far as influencing markets and costing the average person money, HFT doesn’t compare to the Fed’s quantitative easing and zero interest rate policy. A more sound currency, whether metallic or digital, would spread a healthier culture: one not so obsessed with speculation, wealth, material goods, and nanoseconds." Continue reading →

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Bill Bonner: Here’s Proof That Wealthy Elites Control Washington

"We had no proof. Just an observation. But it looks to us as though government always begins and ends as a tool for those who control it. It is not the product of a 'social contract.' It is not an expression of the 'general will.' It is not the 'price we pay for civilization.' It is not 'captured by wealthy special interests.' On the contrary, it is as blunt and stupid as a crowbar. It is used by the elite to pry wealth, status and power away from everyone else. Few victims of the public school system believed us, but now cometh a study from Princeton and Northwestern universities proving we were right." Continue reading →

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Oligarchy in the 21st Century … Get Used to It?

"Alan Greenspan no doubt would have answered in a way that allowed for multiple interpretations. But Yellen took the question with little equivocation. We can see that Yellen is being cautious, even as she is granting the possibility that the US is an oligarchy. Sanders has an agenda, but Yellen is certainly not about to discount it outright. That this question came up at all is the result of a Princeton study on the subject. A TalkingPoints post back in April reported on the study, which asks 'who really rules the US.' The study concludes that in the past few decades America's political system has evolved from democracy to oligarchy." Continue reading →

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Cyprus lifts almost all domestic capital controls

"Cyprus has reached another milestone in getting rid of capital controls it put in place after being bailed out last year, saying all domestic controls have been lifted except the opening of new bank accounts. The Finance Ministry said in a statement Friday that a prohibition on cashing checks as well as caps on domestic transactions and payments that don't require central bank vetting have now been removed. However, restrictions on unfettered money transfers abroad remain in place. Authorities said they hope to lift them by year's end. Authorities imposed restrictions to prevent a run after international creditors last year forced the seizure of uninsured deposits in its two largest lenders." Continue reading →

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DOJ’s ‘Operation Choke Point’ Closing Legal Websites’ Bank Accounts

"Under 'Operation Choke Point,' the DOJ and its allies are going after legal but subjectively undesirable business ventures by pressuring banks to terminate their bank accounts or refuse their business. The very premise is clearly chilling—the DOJ is coercing private businesses in an attempt to centrally engineer the American marketplace based on it's own politically biased moral judgements. Targeted business categories so far have included payday lenders, ammunition sales, dating services, purveyors of drug paraphernalia, and online gambling sites." Continue reading →

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Bill Bonner: What You NEED to Know about Wealth Inequality

"After the 1970s, real capital played a smaller and smaller role. It was replaced by credit and its sinister twin: debt. The r in Piketty’s now famous annotation r > g is supposed to represent the return on capital investment. But where did the wad come from? Savings rates went down. Real earnings went down. Growth rates went down. So how could there be more capital available and how could it produce higher rates of return (compared to economic growth)? The whole thing is a headache for a thoughtful man. Capital investments with no real capital behind them. Profits that outstrip the economic growth from which they must come. What to make of it?" Continue reading →

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Bill Bonner: Don’t Be Fooled By the Wealth Inequality Debate

"QE is supposed to be the weapon in the Fed’s fight against unemployment. The Fed is still buying $45 billion of bonds via QE every month… in addition to holding short-term interest rates to the floor. Where does that $45 billion go? The insurance companies and pension funds that sell bonds to the Fed use this newly created money to buy the real assets of America – houses, companies, commercial property, resources, farmland… everything. And that drives up the prices of everything for everyone else. The Fed says QE is meant to help create jobs… and 'stimulate' the economy. It does nothing of the sort. Instead, it lines the pockets of those at the top of the heap." Continue reading →

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