In Grant’s case, he sees risks multiplying as the S&P 500 index SPX, -0.52% Dow Jones Industrial Average DJIA, -0.35% and Nasdaq Composite Index COMP, -0.81% trading around record highs as government paper has been hitting record-low yields. It is a dichotomy in the market that has many pundits on edge. On Tuesday, the S&P 500 and Nasdaq touched all-time intraday high before closing modestly in the green, while the 10-year benchmark Treasury note TMUBMUSD10Y, +0.05% was offering a yield of 1.55%.
A paranoid culture is not a healthy culture. Merkel is using fear to destroy Germany (along with other methods planned or already implemented). This doesn’t get much coverage in the mainstream media, but it is part of an underground narrative with which Europeans are increasingly familiar.
A Global Research article, recently pointed out that the German political opposition is well aware of what Merkel is trying to accomplish. Her recent alarmist statements, the article informs us, have been “strongly condemned by the opposition party Die Linke (the Left Party).”
Going Cash-Free Can Make the World Richer (richcabot)
Some countries, however, are doing away with cash altogether. Somalia, South Korea, and Sweden are transitioning to cash-free systems such as Apple Pay, which allows purchases to be made with a smart device held near a terminal. Denmark proposed a law that makes it illegal for certain shops to accept cash payments, and automated teller machines and banks have already closed in some small towns. Citizens in developing nations, like Kenya and India, rely on mobile payment systems to make purchases and money transfers. Meanwhile China is leading the way in mobile payments for commerce.
While the minutes from the Federal Reserve’s July meeting showed divisions within the rate-setting committee, New York Fed President William Dudley and San Francisco Fed President John Williams have signaled that a hike may be coming by year-end. Amid the mixed messages, investors are taking to the sidelines, leaving benchmark 10-year yields stuck in their narrowest range in a decade.
Assume these are background “noisy” existential risks (i.e. also gray swans but not clear and present dangers front-and-center): strategic nuclear war between nuclear club nations; a nuclear device detonated on sovereign soil by a non-state actor (nuclear terrorism); release of a biological agent of Category A in a large city; electromagnetic pulse (EMP) detonation at altitude; financial warfare (e.g. an unexpected aggressive devaluation of the yuan; politically-induced massive short-selling directed at vulnerable strategic assets or systemic disruption of markets using algorithmic proxies or hijacking market-controlling software (i.e. cyberwarfare); aftermath of US fracking energy sector derivatives exposure to the banking system as a nonlinear function of a declining crude oil price; the Fukushima nuclear disaster of March 2011 causing a marked rise in cancer occurrence in the greater Tokyo region and/or qualitative losses of maritime ecosystems like fish populations in the pan-Pacific ocean regions that provide staple and mandatory dietary requirements for large human populations; severe water shortages in US western states beyond the scope of rationing; bank runs across Europe due to threat of bail-in.
To put it in a broader context, the chart below shows annual growth in the 20-69yr/old population (red line) vs. annual growth in the 70+yr/old population (blue line) since 1980. That unprecedented, impending crossover in the lines means everything for real estate and the economy in general.
The Market’s Breaking Point (Tiffany D.)
“OK, think of it this way,” he said. “When a test pilot takes a new prototype plane up in the sky for the first time, engineers may look at their calculations for wing surface and atmospheric air density, and state that the jet can safely fly up to, say, an altitude of 60,000 feet.”
“But they don’t know exactly,” he said. “It could be 61,000 feet or 65,000 feet. That’s the test pilot’s job — to find out where the air is too thin to support the weight and wing surface of the aircraft.”
Millennials: The Mobile and the Stuck (jdargis)
It’s become en vogue to argue that young people’s turn against homeownership might be a good thing. After all, houses are not always dependable investment vehicles, a lesson the country learned all too painfully after the Great Recession. Without being anchored to any one city from their mid-20s and into their 30s, young people who don’t own are free to roam about the country in search of the best jobs. What’s more, given the copious advantages of a college degree in this economy, perhaps many young people could be commended for investing in their intelligence, professional networks, and abilities rather than devote that same income to a roof, floor, and furniture.
“All present-day governments are fanatically committed to an easy money policy, ” Ludwig von Mises observed in 1949 in “Human Action”, and to this day, little seems to have changed. Ever since governments, represented by their central banks, monopolized the production of money, and accordingly fractional reserve banking – our markets have never been free from government intervention. Monetary expansion happens all the time, not just in crises. In fact, the world has grown accustomed to this monetary policy, the new normal – and here is why:
There are several possible reasons for this, Bloomberg said: There’s more demand for smaller, more modest starter homes as a huge wave of millennials reaches home-buying age, and McMansions that were slapped together in a hurry at the peak of the market don’t have the kind of quality construction to command sky-high prices.
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