Network Archives

Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash

"This means that, as we expected several months ago, the only recipient of ongoing Fed money printing are not US banks, but foreign banks operating in the US. For those confused about the big picture, here is a chart showing the breakdown of cash held by big and small US banks as well as foreign banks, superimposed to total reserves created by the Fed since the start of the Great Financial Crisis. The correlation is 100%. We are confident that we speak for all when we say: 'Thank you Ben - insolvent foreign banks appreciate your ongoing QE2 and QEternity-funded generosity'." Continue reading →

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‘The Fed Is Trying Like Crazy, But Nothing It’s Doing Can Save The Economy’

"David Rosenberg, the veteran Wall Street economist and bearish strategist at Gluskin Sheff, gave an intense presentation on Friday at John Mauldin's Strategic Investment Conference. Titled 'Bernanke: The Wizard Of Potemkin,' this presentation offers a sobering look at the anemic U.S. economy, the labor market mess, and the Federal Reserve's controversial efforts to get everything back on track. Before you can even think about getting bullish, you must consider the eye-opening charts from Rosenberg's presentation." Continue reading →

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Ugly Americans Book: Eight Rules of Carney

"I’ve been falling behind on my book reviews. Here’s an older book I found that made for good airplane reading – Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions by Ben Mezrich. The book is supposedly based on the true story of young, male hedge fund traders during the mid-1990s Asian stock market boom who take big risks, make big money, meet beautiful women, don’t care about ethics… and after all that testosterone there’s the usual bit of self-reflection at the end. A major part of the plot even managed to involve boring ole’ index funds! One of the main characters was head trader Dean Carney, who had his '8 Rules of Carney'." Continue reading →

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Cody Willard: Game plan for a completely corrupted market

"So, what’s the game plan? It remains the same. You want to remain net long those inflated stocks for at least a while longer, but much less aggressively long than we were two and three years ago when stock prices were much lower. You want to keep buying and scaling into more real physical gold and silver (and a tiny position in Bitcoins too). Coins and bullion that you have stored yourself somewhere safe (not a paper promise, but the real stuff that you can hold). You want to start shorting Treasurys, but not rush into a big position anytime soon. The trends and systems and bubbles we’re seeing in front of us presently can last much longer than most bears thinks possible." Continue reading →

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How Bad Can Things Get?

"The typical American household has made no preparation for anything but the state-debt-feudal Status Quo: they have essentially no food, cash or energy in reserve, leaving the household extremely vulnerable to the slightest disruptions in income, energy and food delivery. How bad can things get? I confess to following Andy Grove's dictum that 'only the paranoid survive.' Clearly, a healthy appreciation for risk and the benefits of advance planning should obstacles arise offers selective advantages. Even if 9 of 10 problems run into the ditch, it pays to look ahead and think about what responses are likely to be the lowest cost and most successful should any of the 10 reach us." Continue reading →

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Present Shock and the Fantasy of Change

"Millennials (born 1982-2004) are pursuing high-cost university educations in the belief that multiple degrees are now essential to being offered a job. Even as evidence piles up that the economy has changed in fundamental ways such that even advanced degrees no longer inoculate the owner against financial insecurity, millions of young people feel they have no choice but to indebt themselves and spend scarce family resources on a questionable-value education. The underlying assumption here is the present will endure, and change will be marginal. The idea that the narrative of history suggests major disruptions of the status quo are cyclical and thus inevitable doesn't register." Continue reading →

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An Important History Lesson: Hyperinflation in the Weimar Republic

"Why did the German government not act to halt the inflation? It was a shaky, fragile government…More than inflation, the Germans feared unemployment. In 1919 the Communists had tried to take over, and severe unemployment might give the Communists another chance. The great German industrial combines — Krupp, Thysen, Farben, Stinnes — condoned the inflation and survived it well. A cheaper mark, they reasoned, would make German goods cheap and easy to export, and they needed the export earnings to buy raw materials abroad. Inflation kept everyone working. So the printing presses ran, and once they began to run, they were hard to stop." Continue reading →

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The Recession That Never Ended: 2008-2013 (and Counting)

"Huge leaps in the income and wealth of the top 5% mask the decline of income and wealth of the bottom 95%. Average all wealth and income and it appears that the economy is expanding to the benefit of all, when it fact only the top 5% have escaped the recession; the recession never ended for the bottom 95%. An even better way to create an illusory expansion is to simply not measure trends that would reveal a deepening recession. For example, what percentage of student loans are purposefully taken out as a substitute for income, i.e. used to pay basic living expenses rather than education?" Continue reading →

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Lengthy, costly trail to Bay Bridge’s eastern span

"The $6.4 billion eastern span of the bridge costs roughly five times its original estimate and took at least seven years longer than expected. It took Caltrans officials 7 1/2 years and $1 million in research before they decided to replace the eastern span rather than retrofit it. In March, as contractors were tightening huge bolts attaching seismic safety devices to the bridge deck, the rods cracked. The surprising discovery of the cracked rods, some as long as 17 feet, led to an intensive investigation into how and why it happened and who was responsible, how the embarrassing problem could be fixed and whether - and when - it would be safe to open the bridge." Continue reading →

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The Italian government really screwed this poor woman

"They’ve jacked tax rates to the moon. And governments have forced banks to become unofficial tax collectors… limiting the amount of money that can be withdrawn and scrutinizing international wire transfers. Then the government went and, practically overnight, made her agricultural operations unprofitable. The home is another story altogether. The villa was awarded a special status as a sort of national monument years ago. This meant that she was able to make upgrades, improvements, and maintenance investments on a tax-free basis. The government revoked this status, retroactively. And they’ve now presented her with a big tax bill that she was never expecting before." Continue reading →

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