credit

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Hoping For A Market Crash

If we inflate much higher, the fall is likely to kill us
Thursday, July 28, 2016, 1:32 AM

We desperately need to have new national and global conversations about everything from how we’ll feed everyone in 2050, to developing a coherent sustainable energy policy, to the fact that each year is hotter than the year before, to the idea that we’re living with a soul crushing sense of scarcity in a world of abundance.

There’s lots that needs addressing, and the process should begin with letting go of the old narrative so that we can make space for assembling the new one. » Read more

Podcast

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David Collum: The Next Recession Will Be A Barn-Burner

With very few places for capital to hide
Saturday, December 26, 2015, 9:05 PM

For those who enjoyed his encyclopedic 2015: Year In Review, this week we spend an hour with David Collum to ask: After processing through all of that information, what do you think the future is most likely to bring?

Perhaps it comes as little surprise that he sees the global economy headed back down into recession, one that will be deeper and more damaging than the 2008 crisis. » Read more

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Off The Cuff: Rate Hike!

What does it portend?
Friday, December 18, 2015, 1:00 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • Rate Hike!
    • The Fed raises interest rates for the 1st time in a decade
  • Shock Wave
    • Even a small rate increase can disrupt today's highly-leveraged economy
  • The Beginning Of The End
    • The 'Debt Is Good' Era May Finally Be Ending
  • Modern Game Of Thrones
    • How The Power Structure Clings To Its Control

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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Devastating Shale Oil Losses

Coming soon to a bank near you
Monday, October 19, 2015, 4:12 PM

Sometimes it helps to examine one narrow slice of the pie as a means to understanding the entire pie. In the case of the shale oil Ponzi scheme, we can both wrap our minds around the scale of the predicament and also answer the question of who the losses will be foisted on.

Once we’ve done that, you should be able to simply apply the same logic and learning to other sectors of the financial universe.  Learn one sub-bubble, learn them all; like a fractal foam of misadventure. » Read more

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Greece Humiliated

The Troika wants Greece to be a warning to the other PIIGS
Monday, July 13, 2015, 7:50 PM

Well, that went badly. For the Greeks in general and for Tsipras specifically. After many years and rumors and brinksmanship, and a powerful "No" referendum from the people of Greece, Tsipras managed to ‘secure’ for Greece a deal worse than any other offered to date. » Read more

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The Global Credit Market Is Now A Lit Powderkeg

And markets are totally unprepared
Friday, June 26, 2015, 12:53 PM

Although the Street seems to agonize over equity valuations and recent price volatility, as I see it the real issue is the global bond market. Why?

Globally, the value of outstanding credit instruments is three times the total value of publicly traded equities. Just which do you imagine is more important to institutional investors? » Read more

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As Goes The Credit Market, So Goes The World

When confidence cracks, we'll see it there first
Friday, June 5, 2015, 11:46 AM

During the prior economic cycle of 2003-2007, one question I asked again and again was: Is the US running on a business cycle or a credit cycle?

That question was prompted by a series of data I have tracked for decades; data that tells a very important story about the character of the US economy. Specifically, that data series is the relationship of total US Credit Market Debt relative to US GDP. » Read more

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The Central Banks Are Losing Control Of The System

Evidence is multiplying
Friday, June 5, 2015, 11:46 AM

Executive Summary

  • What the NACM Index and the Atlanta GDPNow are telling us about the odds of returning to recession
  • Bond market volatility is picking up
  • Are central banks are losing their control?
  • Why monitoring credit markets will be our best indicator of the next downturn

If you have not yet read Part 1: As Goes The Credit Market, So Goes The World available free to all readers, please click here to read it first.

That indicator is the current level of the National Association of Credit Managers Index.  Although not wildly well known, the National Association of Credit Managers Index is an indicator deserving of attention and monitoring immediately ahead.

As per the National Association of Credit Management (NACM), the Credit Managers Index is a monthly survey of responses from US credit and collections professionals rating factors such as sales, credit availability, new credit applications, accounts placed on collection, etc.  The NACM tells us that numeric response levels above 50 represent an economy in expansionary mode, which means readings below 50 connote economic contraction.  For now, the index rests in territory connoting economic expansion, but the index is also sitting quite near a 6 year low.  We’ve been here before in the current cycle as the economy has moved in fits and starts in terms of the character of growth:

In a prior discussion, I mentioned the slowing in the US economy in the first quarter of 2015.  I highlighted the Atlanta Fed GDPNow model that turned out to be very correct in its assessment of Q1 US GDP.  While the Atlanta Fed was predicting a 0.1% Q1 GDP growth rate number, the Blue Chip Economists were expecting 1.4% growth.  When the 0.2% number was reported, it turns out the Atlanta Fed GDPNow model was virtually right on the mark.  As of now, the Atlanta Fed GDPNow model is predicting a... » Read more

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The Fatal Flaw Of Centrally-Issued Money

Why the world's current money regimes will fail
Thursday, April 9, 2015, 2:03 PM

Centrally issued money centralizes wealth and generates systemic inequality. This is equally true of all centrally issued currencies.  But the inequity that is intrinsic to this system is politically and financially destabilizing, and so this system is unsustainable. » Read more

Podcast

Richard Duncan: The Real Risk Of A Coming Multi-Decade Global Depression

One that unwinds the past 50 years of globalization
Sunday, April 5, 2015, 12:42 PM

Richard Duncan, author of The Dollar Crisis and The New Depression: The Breakdown Of The Paper Money Economy, isn't mincing words about the risks he sees ahead for the world economy.

Essentially, he sees the past 50 years of economic prosperity fueled by globalization and easy credit in serious danger of being unwound, as the doomed monetary policies currently being pursued by the word's central banks result in a massive multi-decade depression that spans the globe. » Read more