The Mess That Greenspan Made - Part 18

BTFD?

The “glass half empty” folks over at Zero Hedge hoisted this item back up the other day, no doubt aimed at anyone basking in the schadenfreude, now coming in wave after wave, associated with the ongoing global stock market swoon.

Of course, this classic Quantitative Easing Explained xtranormal offering pops up as a related item when viewing the video above at YouTube, helping to explain why BTFD may not be working so well anymore, that is, until QE4 arrives.

Friday Morning Links

MUST READS
Swedish Bank Move Creates a Global Shudder – NY Times
What’s behind the global stock market selloff? – Reuters
This is a global stock market rout worth celebrating – Telegraph
Oil prices jump but weekly losses and physical excess loom – CNBC
The Oil Industry Thinks Things May Never Get Better – Bloomberg
Is this the week central banks lost their market credibility? – MarketWatch
Yellen and ‘negative interest rates’: The last nail in a saver’s coffin – Fox News
This Is What Central Bank Failure Looks Like (Part 4) – Zero Hedge
Dimon Just Spent a Year’s Pay on JPMorgan Stock After Bank Rout – Bloomberg
Syria plan: Cessation of hostilities, humanitarian airdrops, peace talks – RT News
Saudi decision to send troops to Syria ‘final’ – Saudi Gazette
Bloomberg vs. Trump? – Pat Buchanan

MARKETS/INVESTING
Japan stocks fall nearly 5% – CNN/Money
What we’re telling clients today – Reformed Broker
The Dow’s downtrend is now official – MarketWatch
Asian shares slide as bank fears add to global gloom – Reuters
Here are 5 signs we might already be in a bear market – MarketWatch
Investors flee health, bank and tech funds in search of safety: Lipper – Reuters
Investors fall prey to ‘death spiral’ as faith in central banks wavers – Telegraph
Gold eyes best week in 4 years as stock market turmoil lifts haven appeal – Reuters
London Bleeds 184t Of Gold as China Imports At Least 217t – BullionStar
Gold stocks rocket as investors seek safe haven – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
JPM: Upcoming Recession Could Be Comparable To 2008 – Zero Hedge
Why Amazon May Want Hundreds of Brick-and-Mortar Stores – Fiscal Times
Euro zone GDP grows as expected, December industrial output falls – Reuters
Families of Americans killed by Mexican cartels sue HSBC – Guardian
Seoul, US to open talks on missile defense aimed at N. Korea – AP
Rajan on the chaos in India’s state-owned banks: Keep calm and carry on – Quartz
What Fewer Vacant Homes Say About the Housing Market – realtor.com
Why NIRP (Negative Interest Rates) Will Fail Miserably – of two minds
Takeaways from Janet Yellen’s visit to Capitol Hill – CBS News
Yellen’s dilemma: A downturn with no easy response – Reuters

 

Debt: The First Five Thousand Years

Long-time favorite of this blog former BIS head William White (see William White Channels His Inner-Austrian along with the embedded links) shares some thoughts about central bank policies in a financial world that increasingly looks like it’s about to become unhinged.

At about the 2:20 mark, the discussion turns to a subject that few other economists ever mention in public – that combating economic difficulties that were fueled by a reckless expansion of debt with even more debt might not be a good approach:

As debts become too large to be serviced, then they have to be restructured or forgiven because the alternative … the longer you put this whole thing off, the smaller the proportion of the money you’re going to recover.

So, the question is, do you want 50 cents on the dollar or do you want nothing, because one dollar on the dollar is not on the table.

White has similarly grim news for anyone thinking negative interest rates will save us.

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Thursday Morning Links

MUST READS
The crash of 2016? – Washington Post
The Fed is making a huge mistake – Quartz
Negative rates in US? Why it could happen – CNBC
Sweden cuts interest rates further below zero – Marketwatch
Hyperinflation Paranoia Continues to Guides the Fed – Bloomberg
Dow futures sink more than 200 points as global rout gains pace – MarketWatch
Gold Surges Most in a Year as Global Turmoil Boosts Haven Demand – Bloomberg
William White on the Failure of QE, Danger of Negative Rates – Naked Capitalism
Here’s Why Our National Parks Are Billions of Dollars in the Hole – Fiscal Times
Here’s Donald Trump’s best strategy for winning the White House – Vox
It Gets Harder From Here For Bernie Sanders – Five Thirty Eight
Priebus on Bloomberg run: ‘We’ll take it’ – Politico

MARKETS/INVESTING
U.S. stocks poised for sharp sell-off – CNN/Money
Markets Don’t Work as Well as We Thought – Bloomberg
Oil falls on U.S. supply record, weak demand outlook – Reuters
Stock Rout Deepens, Bonds Surge as Faith in Central Banks Fails – Bloomberg
Just one thing can cushion investors as markets hit bottom – MarketWatch
Another financial crash could destroy capitalism as we know it – Telegraph
The simple rule at the heart of finance is being broken – Quartz
Gold jumps 2.6 percent on U.S. interest rate outlook – Reuters
Gold Above $1,200 As Yellen Waffles During Testimony – Kitco
China is on a massive gold buying spree – CNN/Money

ECONOMY/WORLD/HOUSING/BANKING
So this is what ‘full employment’ looks like? – CNBC
Real Jobless Rate Is 42%? Trump Has a Point, Sort Of – NY Times
What Slowdown? Chinese Consumer Confidence Still Strong – WSJ
It’s Italy’s Turn – George Friedman Soundss the Alarm on European Banking Crisis – FSO
Canada Wants to Legalize Weed, But First It Needs to Deal With the UN – Vice News
This Is Why China’s Housing Market Is Such a Mess – Fortune
Home-Price Growth Sped Up Last Year, Realtors Say – WSJ
These Renters Were Hit Hardest by the Financial Crisis – Bloomberg
4 takeaways from Janet Yellen’s testimony – CNN/Money
ECB Gets Ready for More Easy Money – Value Walk

 

They’ll Probably Ask About This…

Federal Reserve Chair Janet Yellen just released her semi-annual Monetary Policy Report to Congress and will soon trudge up to Capitol Hill where, based on the chart below, she’ll have some ’splainin’ to do.

Question number one for those elected officials who aren’t otherwise preoccupied with such things as auditing the Fed will likely be, “Do you regret raising interest rates two months ago?”, for which Yellen will surely have an eloquent prepared response.

© 2010-2011 The Mess That Greenspan Made