Tag Archives: Ben Bernanke

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    Off the Cuff: The Turning of the Tide?

    Are we witnessing the beginning of a secular reversal?
    by Adam Taggart

    Thursday, May 23, 2013, 4:17 PM

    3

    In this week's Off the Cuff podcast, Chris and Charles discuss:

    • Bubbles Everywhere
      • How worried should we be?
    • Shaky Sovereigns
      • Will Japan or Europe stumble first? (looks like Japan)
    • Gold's Gilded Future
      • Down for all the wrong reasons
    • Cui bono?
      • Who is reaping the gains of the current market monkeying?

    This is a must-listen Off the Cuff episode given the events of the past 24 hours.

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    Marking the 4-Year Reflationary Rally: How Much Better Off Are We Really?

    Growing amounts of data show a failure to thrive
    by Gregor Macdonald

    Monday, May 6, 2013, 3:31 PM

    0

    The U.S. stock market rally has recently passed its fourth anniversary after the terrifying lows of March 9, 2009.

    During that time, massive and unconventional reflationary policy from the Federal Reserve has managed to lift the S&P 500 by nearly 70%. But perhaps even more improbably, it has finally (?) built a floor under U.S. residential real estate prices.

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    This Gold Slam is a Massive Wealth Transfer from Our Pockets to the Banks

    It likely signals a big downdraft in the stock market, too
    by Chris Martenson

    Monday, April 15, 2013, 7:55 PM

    79

    I am very disappointed by, but not surprised at, the latest transfer of wealth to the bankers from everyone else.  The most recent gold bear raid has vastly enriched the bullion bankers, once again, at the expense of everyone trying to protect their wealth from global central bank money printing.

    The central plank of Bernanke's magic recovery plan has been to get everybody back borrowing, spending, and "investing" in stocks, bonds, and other financial assets.  But not equally so, as he has been instrumental in distorting the landscape towards risk assets and away from safe harbors.

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    Say Goodbye to the Purchasing Power of the Dollar

    Mr. Bernanke goes to Crazytown
    by Adam Taggart

    Monday, March 25, 2013, 3:29 AM

    108

    On a long solo car trip this past weekend, I downloaded several podcasts to listen to as the miles passed. One was a classic: The Invention of Money, originally released by NPR's Planet Money team back in January of 2011. I highly recommend listening (or re-listening) to it in full.

    The podcast is a great reminder of how any currency in a monetary system is a fabricated construct. A simpler way to explain this is to say it has value simply because we believe it does.

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    How to Survive the Mother of All Bubble Burstings: A Collapse of the Bond Market

    It's time to batten down the hatches
    by Chris Martenson

    Thursday, March 21, 2013, 8:43 PM

    50

    Executive Summary

    • The three main signs presaging a bond-bubble collapse are now evident
    • Why the Fed will fail to get new credit debt growth at the rate it needs
    • The return of CDOs and other risky tactics that show market participants have returned to reckless thinking
    • How a bond market collapse will play out
    • How to product yourself and your wealth during the extreme pain of a bond market collapse

    If you have not yet read Part I: Investors Beware: Market Risks Today Are Higher Than Ever, available free to all readers, please click here to read it first.

    The dangers growing in the bond market are, of course, all the result of the Fed, et al., cramming the real rate of interest on Treasury bonds into negative territory, starving investors for income, and forcing them to chase yield whenever and wherever it can be found.  Given a long enough time without a serious disruption in the markets, you eventually find yourself exactly where we are, with everyone chasing yield because they have to. Hey, everybody else is, and nothing bad has happened yet, right?

    Of course, the odds of this ending well are practically zero.

    How ridiculous has it become?  How about a company currently in bankruptcy proceedings able to sell bonds at investment-grade yields?

    AMR Bankruptcy Yields Record-Low Bond Coupon

    Mar 13, 2013

    American Airlines is selling investment-grade debt even as it spends a 15th month in bankruptcy while bond buyers look ahead to the merger with US Airways Group Inc. (LCC) that will create the world’s largest carrier.

    The AMR Corp. (AAMRQ) unit issued $663 million of so-called enhanced equipment trust certificates yesterday that included a portion paying 4 percent, matching the record low coupon for similar airline debt, which was first awarded to United Continental Holdings Inc. in September, according to data compiled by Bloomberg. American is also seeking to refinance about $1.3 billion of bonds backed by aircraft after receiving court approval to do so in January.

    By the time you have 'investors' offering money to a perpetual basket-case like AMR a company that also happens to be in bankruptcy proceedings at present at investment-grade 4% yields, you know you are in the midst of a crazy bubble. Consider this anecdote to be the bond market equivalent of a hairdresser from Las Vegas buying her 19th house…

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    Off the Cuff: We’re in Danger of an Unwind of Everything

    Sick economy + printing press = collapse risk
    by Adam Taggart

    Thursday, December 13, 2012, 1:07 AM

    11

    In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

    • QE4
      • NOT a sign of a 'recovering' economy
    • Asset overpricing
      • The liquidity flood is making nearly every asset class overvalued now
    • No exit
      • The Fed has no plan on how eventually to remove this liquidity from the market
    • Potential for a monster upward move in gold
      • It's relatively undervalued, and it's the only safe haven left
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    The Future of Gold, Oil & the Dollar

    An outlook for the next twelve months
    by Gregor Macdonald

    Tuesday, October 16, 2012, 3:12 PM

    14

    The ability of reflationary policy to mute the worst risks of debt deflation has been a source of enormous frustration for stock market bears ever since the 2008 collapse. Yes, the initial moderate rally out of the S&P500’s black hole was perhaps not so surprising in 2009. Bombed-out stock markets can always manage some sort of rally. But the ability of the rally to continue through 2010, and then 2011, and now 2012 has been quite vexing and painful for bearish investors.

    Indeed, the entire post-2008 market phase has now produced an era of consistently poor performance for hedge funds. Recent data, for example, shows that an incredible 90% of hedge funds are underperforming the S&P500 through mid-September.

    Will the pain continue?

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    The Trouble with Printing Money

    QE3 reflects a colossal failure to address our predicament
    by Chris Martenson

    Tuesday, September 18, 2012, 11:04 PM

    26

    For a while now, I have been expecting a coordinated, global central bank action that would seek to print more money out of thin air, or "QE" (quantitative easing), as it is now called.  Now we have two of the most important central banks, that of the U.S. and in Europe (ECB) having committed to open-ended, limitless QE.

    In Part I of this report, we analyze the actions themselves, and then in Part II we discuss the implications to individuals and those with responsibilities to manage money.

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    Off the Cuff: The Plot Thickens

    Developments are happening faster now
    by Adam Taggart

    Thursday, September 13, 2012, 5:11 AM

    20

    In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris tackle

    • The German Constitutional Court decision
      • What importance does it have? Any?
    • America is back in recession
      • More hard-to-refute data
    • Whither the Fed?
      • Why markets will be disappointed by Bernanke

    Surprising to those who don't read this site, a number of notable announcements are happening this week besides Apple's unveiling of the iPhone 5…

    Today, the German Constitutional Court made its ruling on the legality of Mario Drahgi's plans to flood European banks with liquidity. The court has the power to block the ECB's profligacy; but it seems that once again, politics trumps justice. Draghi will be allowed to proceed with some tissue-thin restraints. 

    Meanwhile, new data show North America's economies are slowing down. Indeed, more and more analysts are coming to the conclusion that the US has slipped back into recession (even though to many it feels as if America had never left it). Jabbering of 'recovery' and slight declines in the official employment rate – which is a complete farce, as those unable to find work after a time are removed from the lists of those counted as 'unemployed' – are fooling no one at this point.

    Which leads all eyes to the Fed. What will it do (or better asked, what can it do) to combat this dismal data?

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    Off the Cuff: Winter is Coming

    Prepare for a starker investing climate
    by Adam Taggart

    Thursday, September 6, 2012, 4:35 AM

    1

    In this week's Off the Cuff with Mish & Chris podcast, Mish and Chris discuss:

    • No wonder people are confused
      • Sloppy journalism abounds in the general media
    • The world's addiction to low rates
      • Prolonging & worsening our predicament
    • Spanish storm clouds
      • Insolvency is becoming increasingly clear 
    • Predicting the Fed's next move
      • Will there be action before the election?

    Summer's calm is now ancient history, and a foreboding instability is growing in the markets. The protracted, suppressed-interest-rate environment has lasted so long that market forces are beginning to boil over in points of weakness faster than central planners can contain them (e.g., Spain). Not only have financial exchanges become addicted to low rates, they have also become dependent upon expectations of ever more liquidity. If one of these two fails to materialize, markets will go into withdrawal shock – with drastic implications.

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