Taper Nervous Breakdown

The next time the Fed reduces its bond purchase program the market reaction should be more like a nervous breakdown rather than just a tantrum.

First let’s review a bit of the historical histrionics surrounding the initial Taper Tantrum. Back … Read More

Take The Under On 2021 GDP

Wall Street is universally bullish on the economy and stock market for 2021. For example, Morgan Stanley is on record predicting the U.S. economy will expand by 5.9% next year. The stock market has front-run this optimism. The most … Read More

Beware Market Land Mines: Stimulus, Vaccine Failure, Interest Rates

When the market cap of equities reaches 183% of GDP and gov’t bonds yield near 0%, or even less overseas, the notion that one can just buy and hold a balanced portfolio is extremely dangerous. The minefield is not packed … Read More

Inflation By Fiat

The Fed has now officially changed its inflation target from 2%, to one that averages above 2% in order to compensate for the years where inflation was below its target. First off, the Fed has a horrific track record with … Read More

The Economy Needs More Than A Vaccine

The hype and hope being promulgated by Wall Street and D.C. is that the imminent and well-advertised approval of vaccines will bring the economy back to what they characterize as its pre-pandemic state of health. However, even if these … Read More

Will Vaccines Become A Bridge To Nowhere?

The monthly U.S. budget deficit for June 2020 was a heart-stopping record $864 billion. For reference, last year’s deficit for all of fiscal 2019 was just under $1 trillion. In other words, the June deficit was almost as much … Read More

Fiscal Cliffs And The Self-Destructing Treasury

We can all be very confident that there will be no change to monetary policy for a very, very long time. But there is a fiscal cliff coming—and indeed has already begun.

It is clear that Mr. Powell is all-in … Read More

Trampoline Cliff Diving

We start this week’s commentary with some rather depressing news from Reuters:

The ratio of downgrades to upgrades in the credit ratings of leveraged loans has spiked to a record level, five times above that hit during the last global … Read More

What People Don’t Know About Gold

The sad truth is that few people really know very much about gold, especially when it comes to investing in the metal. They don’t understand what makes it so valuable and unique, and they know even less what moves its … Read More

Fed Now Owns All Markets

Since the Great Recession hit in 2008, central banks have been in the business of keeping insolvent governments from defaulting through the process of pegging borrowing costs near zero. These money printers are now in the practice of propping up … Read More

Money Printing Is The New Mother’s Milk Of Stocks

My friend Larry Kudlow always says that Profits are the mother’s milk of stocks. That used to be true when we had a real economy. But sadly, that is no longer factual because we now have a global equity market … Read More

Inflationary And Insolvency Implosion Of The Bond Market

We are all praying for the Wuhan virus to die. But there is something the virus can actually “cure” itself: deflation. I put the word cure in quotes because it’s not an actual issue in reality. Low inflation and disinflation are … Read More

Debt Be Damned

The U.S. National Debt is about to surge like never before, along with the rest of the entire planet’s gigantic pile of sovereign IOUs. America started with a $23.5 trillion debt before the Wuhan virus outbreak, with annual deficits … Read More

Permanently Addicted To Zero

In Fed Chair Jerome Powell’s appearance before Congress on February 11th, formerly known as The Humphrey-Hawkins testimony, he asserted that the U.S. economy was, “In a very good place” and “There’s nothing about this expansion that is unstable or unsustainable.” … Read More

Priced For Perfection

The stock market has now priced in a perfect resolution for all of its erstwhile perils. Wall Street Shills would have you believe that since the Fed has turned dovish it will always be able to push stocks higher. The … Read More

Gold: It’s All About Real Rates, Not The Dollar

The Federal Reserve’s recent need to supply $100’s of billions in new credit for the overnight repo market underscores the condition of dollar scarcity in the global financial system. This dearth of dollars and its concomitant strength has left most … Read More

The Central Banks’ Time Machine Is Broken

I recently wrote about how global central banks have created an economic time machine by forcing $17 trillion worth of bond yields below zero percent, which is now 30% of the entire developed world’s supply. Now it’s time to explain … Read More

What The World Doesn’t Need Now Is Lower Rates

The Q2 earnings season is upon us and the risks to the rally that started after the worst December on record at the close of last year is in serious jeopardy. We received a glimpse of this with some of … Read More

Will Fed Easing Turn Out Like ’95 Or ‘07?

You should completely understand that the market is dangerously overvalued and that global economic growth has slowed to a crawl along with S&P 500 earnings. However, you must also be wondering when the massive overhang of unprecedented debt levels, artificial … Read More

Today’s Pets.com And NINJA Loan Economy

The NASDAQ bubble that existed two decades ago contained a plethora of internet companies, such as Pets.com, that proved in the end to having a non-viable business model. Yet, because they enjoyed access to cheap credit, it allowed them to … Read More

Why The Market Crash Is Just Beginning

Wall Street’s playbook stipulates that every down tick in the market is just another buying opportunity. While that is most often true, peak margins, a slowing global economy and the bond bubble collapse makes this time more like 2008 than … Read More

Fiat Currencies Collapsing In Turkey, Venezuela, And Iran: What About A Major Economy?

Two drones filled with explosives were recently deployed in a failed assassination attempt to take out Venezuelan President Nicolas Maduro. Chaos filled the streets as the military ran for their lives. But this sort of pandemonium is commonplace in Venezuela … Read More