History Repeating

Mark Thornton on Skyscrapers in ‘Le Monde’

"In a feature from the business section entitled 'Les villes chinoises veulent toutes leurs gratte-ciel géants,' Le Monde takes note of the phenomenon that is the skyscraper-dense Chinese city, and specifically, the completion of Shanghai Tower, now one of the tallest buildings in Asia. Mark Thornton, economist at the Mises Institute in Auburn (United States), and author of research on the correlation between the race skyward and the advent of large crises, warns: 'The construction of skyscrapers is a precursor to economic disorders'…'The skyscrapers are just one symptom of the government’s extravagant economic policies.'" Continue reading →

Continue ReadingMark Thornton on Skyscrapers in ‘Le Monde’

The Economic Philosopher’s Outcast: Mises

"SS Gestapo Chief Henrich Himmler's agents sped through the streets of Vienna on an early morning, March 11, 1938, to capture and eliminate Nazi Germany's enemies. One of his prime targets lived in a middle-class Jewish neighborhood at 28 Weihoffen St. Apartment 7. Ludwig Von Mises, a 58-year-old political philosopher, was Jewish and defenseless. Hitler deemed this man an enemy of the state and one of the top targets to be seized during the Nazi takeover of Austria. Fleeing from the city the day before, Professor Mises narrowly escaped to Switzerland. Despite attempts on his life, Mises spent the 92 years of his life fighting totalitarianism." Continue reading →

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The Chart of the Century

"In the late 1970s, when did we see the critical tipping point that marked the beginning of the surge? It was after three things happened: First, we witnessed two periods of real interest rates below zero (same as recent years) … Second, we experienced an initial collapse in bond markets that began to drive yields higher (same as now) … Third, we saw a cross-over into the black, as interest rates rose above the inflation rate (same as just happened earlier this year). And THAT’s when interest rates went through the roof, carrying the U.S. Treasury-bond yield to 13% and the Treasury-bill rate to 17%." Continue reading →

Continue ReadingThe Chart of the Century

18 Signs That Global Financial Markets Are Entering A Horrifying Death Spiral

"The much anticipated 'financial correction' is rapidly approaching, and investors are starting to race for the exits. We have not seen so many financial trouble signs all come together at one time like this since just prior to the last major financial crisis. It is almost as if a 'perfect storm' is brewing, and a lot of the 'smart money' has already gotten out of stocks and bonds. Could it be possible that we are heading toward another nightmarish financial crisis? Could we see a repeat of 2008 or potentially even something worse?" Continue reading →

Continue Reading18 Signs That Global Financial Markets Are Entering A Horrifying Death Spiral

Analysts: Muni-Bond Selloff Looks Like Lehman All Over Again

"It's wrong to just take to periods and look at empirical data to forecast out. You need theory to explain the moves and any similarities. The similarities come about based on Austrian Business Cycle Theory, which says a slowdown in money printing results in a shrinking in the capital structure of the economy. As a result there is upward pressure on interest rates, as those seeking funds must bid up rates to entice investors. It such a slowdown in money growth occurring? It sure is. Just like it did in 1929, 1987 and 2008." Continue reading →

Continue ReadingAnalysts: Muni-Bond Selloff Looks Like Lehman All Over Again

Debt of One Quadrillion Yen? Not a Problem

"Haruhiko Kuroda doesn’t wear a wizard’s hat when he arrives at Bank of Japan headquarters each morning. Kuroda has done something truly supernatural in his five months as governor of the central bank. The more yen he conjures up to produce inflation, the more he mesmerizes markets. Yet a week after Japan’s IOUs reached the 1 quadrillion yen ($10.28 trillion) mark, yields have actually declined. What is Kuroda’s secret? The first is what economists call 'financial repression' -- essentially transferring money via monetary policy from citizens to the government. The second is outright monetization of public debt." Continue reading →

Continue ReadingDebt of One Quadrillion Yen? Not a Problem

Treasury chief says U.S. again perilously close to breaching the debt ceiling

"Treasury Secretary Jacob Lew urged Congress on Thursday to raise the US borrowing ceiling, warning that not doing so could jeopardize Washington’s creditworthiness and raise fears of a default. With the US closing on the point where spending will surpass available funds, Lew said it was crucial for Congress to raise the debt cap as soon as it comes back into session at the beginning of September. Failure to raise the ceiling would force cuts to many parts of the government, including the military and social security benefit payouts, and 'have disastrous effects for our nation,' Lew told an audience in Mountain View, California." Continue reading →

Continue ReadingTreasury chief says U.S. again perilously close to breaching the debt ceiling

Wells Fargo Lays Off Mortgage Workers. Why? Rising Rates.

"Wells Fargo & Co. ( WFC ), the fourth-largest bank in the U.S. by assets, will cut 2,300 mortgage-related jobs across the U.S. as higher interest rates slow down refinancing activity. Wells Fargo has reportedly provided a 60-day layoff notice to 2,300 employees in its home-lending unit based in Iowa as it braces for a further drop in demand for new mortgages. The San Francisco-based company had 274,300 employees at the end of the recent second quarter. Wells Fargo is the largest originator of home mortgages in the U.S. and under a federal program, has the mandate to originate, underwrite, and certify mortgages for FHA insurance." Continue reading →

Continue ReadingWells Fargo Lays Off Mortgage Workers. Why? Rising Rates.

Wells Fargo Lays Off Mortgage Workers. Why? Rising Rates.

"Wells Fargo & Co. ( WFC ), the fourth-largest bank in the U.S. by assets, will cut 2,300 mortgage-related jobs across the U.S. as higher interest rates slow down refinancing activity. Wells Fargo has reportedly provided a 60-day layoff notice to 2,300 employees in its home-lending unit based in Iowa as it braces for a further drop in demand for new mortgages. The San Francisco-based company had 274,300 employees at the end of the recent second quarter. Wells Fargo is the largest originator of home mortgages in the U.S. and under a federal program, has the mandate to originate, underwrite, and certify mortgages for FHA insurance." Continue reading →

Continue ReadingWells Fargo Lays Off Mortgage Workers. Why? Rising Rates.

Greece will need third bailout, German minister says

"A month before general elections in Germany, finance minister Wolfgang Schaeuble has broken the taboo of admitting that Greece will need a third bailout when the current one runs out, in 2014. 'There will have to be another programme in Greece,' Schaeuble said on Tuesday during a campaign rally in the northern-German town of Ahrensburg. As part of a third programme, he mentioned another lowering of the interest rates on the loans the eurozone has given to Greece. So far, the German government has steered clear of admitting that the current bailout, worth €130 billion, will not suffice to get Greece out of the vicious spiral of deficit and debt." Continue reading →

Continue ReadingGreece will need third bailout, German minister says