Debt | timiacono.com - Part 6

The Next Big Risk

This CNBC poll contradicts the views of those at the Davos World Economic Forum where inequality was seen as the biggest risk to the global economy and financial markets.

At the moment, China tops the list of possible flashpoints for the next fiscal or monetary crisis, though there are plenty of other parts of the world that could cause similar trouble.

QE Prisons, Fed Endgames, etc.

After catching up a bit on all the commentary related to the Federal Reserve’s ongoing money printing effort such as this item from yesterday and today’s offering from Jim Jubak at MSN Money where it was concluded that “The Fed has no endgame“,  refreshing the simplified graphic of the central bank’s balance sheet below seemed like a good idea, particularly since they are rapidly closing in on the $4 trillion mark.

Fed Balance Sheet

Of course, there is a growing consensus that this is all benign (or at least irrelevant as long as stock prices are rising) and that argument is lent some credence by the low rates of inflation for consumer prices reported in the West (inflation in developing nations is an entirely different matter). Somehow, it seems the quadrupling of the Fed’s balance sheet (and then some) will prove to be anything but benign.

Angst Over Park Closures

Living so close to Yellowstone (“the park” as they call it around here), we’ve been hearing a lot about the impact of the government shutdown on local businesses as well as on those visiting from far away, the latest being this story in the local paper about newlyweds who were planning to take some wedding photos inside the park but, instead, had to settle for the Roosevelt Arch at the North entrance.

Roosevelt Arch wedding

The park superintendent’s daughter is supposed to be married inside the park on Sunday and, based on this report about the Federal government allowing state governments to pay for keeping the parks open, she’s probably hopeful about this weekend.

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The Stock Trading Computers are Happy

In this interview with Reuters from a short time ago (when they were talking about a six week delay), Steve Bell, senior director for economic policy at the Bipartisan Policy Center tosses a little cold water on the stock market euphoria about a deal to temporarily raise the debt ceiling, noting that this is anything but a done deal in the Republican House.

According to this related report, there has been no progress in ending the government shutdown and, as such, I’d have to agree with Bell that what you see in the stock market today is just one computer’s high-frequency trading algorithm bidding against another.

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