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Danielle DiMartino Booth: An Insider Exposes The Evils Of The Fed

Killing savers, pensions & ultimately the bond market
Sunday, February 12, 2017, 1:01 PM

Danielle DiMartino Booth, former analyst at the Federal Reserve Bank of Dallas, has just released the book Fed Up: An Insider's Take On Why The Federal Reserve Is Bad For America.

In it, Danielle describes how the Federal Reserve is controlled by 1,000 PhD economists and run by an unelected West Coast radical with no direct business experience. The Fed continues to enable Congress to grow our nation’s ballooning debt and avoid making hard choices, despite the high psychological and monetary costs. And our addiction to the "heroin" of low interest rates is pushing our economy towards yet another collapse.

This reckless monetary policy pursued by the Fed has resulted in the rich elite becoming markedly richer, while savers and retirees are being absolutely gutted. All while risking a coming conflagration in the bond markets that will destroy a painful percentage of the world's financial wealth: » Read more

Insider

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The Pension Time Bomb

Devastating shortfalls are manifesting everywhere
Monday, August 29, 2016, 7:39 PM

Among the many losers picked by the Fed (in favor of rewarding a very tiny and wealthy minority), perhaps the greatest victims are pensions.

Pensions have to make a couple of key assumptions.  One is how long you expect your cohort of pensioners to live. The second is the rate of return on the funds.  On both counts, pensions have been wrong, and wrong again.

People keep living longer and pension fund returns keep underperforming.  » Read more

Insider

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Why The Fed’s Efforts Will End Badly

We've been down this road before. Quite recently, in fact
Wednesday, June 1, 2016, 2:26 PM

It’s no secret that I've taken the contrarian position for seven long (and frequently frustrating) years.

Look, we’ve been down this road before, and the sheer stupidity of our current situation is that we’ve been down it recently enough to know better.  It worked out poorly for us in 2000, again in 2008, and will soon enough again. That's why I'm currently short the US stock market and plan to increase that short position as time goes on.

I'm quite familiar with, and even sympathetic to, the idea that the central banks will not... » Read more

Insider

How the Market Failure Will Happen

Get out or get short
Thursday, February 28, 2013, 11:34 AM

Executive Summary

  • The central-planning Status Quo will fight to the bitter end in order to keep stock and housing prices elevated
  • HFT algorithms dramatically increase the odds of immediate "air pockets" in stock prices
  • Persistently high gasoline prices are choking economic growth
  • A parade of economic headwinds (weakening GDP growth, higher taxes, the impact of Obamacare, sequester cuts, chronic unemployment) are blowing increasingly stronger
  • Powerful TBTF ("too-big-to-fail') interests are likely supporting the Fed's current efforts to boost asset prices
  • Both near-term and long-term history tell us that the more asset prices are artificially increased, the farther they eventually fall, as intervention hits its point of diminishing returns
  • Why you don't want to be long in this market when that happens

If you have not yet read Part I: Warning: Stocks Likely to Crater from Here, available free to all readers, please click here to read it first.

Hey, Where's My Cheap Gasoline?

Expensive energy is a serious drag on economic growth.  It always has been and always will be, for obvious reasons.

The average person can be forgiven for being confused by the recent spike in gasoline prices. Since early 2012, there has been a concerted effort to tell the tale that the U.S. is producing more oil than it has in a long time and is on track to rival Saudi Arabia.  

Literally hundreds of articles have breathlessly repeated the same information over and over again, like all good marketing programs should.  But here in 2013, gasoline is on track to set price records and possibly make this year the most expensive one in history for gas prices: 

How can this be? What is going on? How do we reconcile all the reports of record-breaking advances in U.S. oil production with these concurrent record-high gasoline prices?

The answer starts with the fact that the U.S. still imports 40% of its daily oil supply and is nowhere near energy independence when it comes to petroleum. This means that the U.S. remains wedded to the world price of oil, which remains quite elevated in price with Brent crude remaining stubbornly elevated between $110 and $120 a barrel over the majority of the past year... » Read more