The Mess That Greenspan Made - Part 9

Ron Paul: The End (of the EU) is Near

The CNBC click-bait headline for their Ron Paul interview surely had some readers thinking they needed to check to see if they were stocked up on bullion and bullets, but, the former Congressman from Texas was just talking about the European Union.

Familiar themes here – rampant central bank money creation, serial financial bubbles, widespread malinvestment, goverment overreach, too much debt – that will someday gain wider acceptance as the cause, not the cure, for many of the world’s ills.

Thursday Morning Links

Boris Johnson rules out bid to be UK PM – BBC
Obama: Brexit a Threat to Global Growth – IBT
Brexit and the Norway Model – At A Glance – WSJ
Why elections are bad for democracy – Guardian
It’s Time for the Elites to Rise Up Against the Ignorant Masses – FP
Pushed Around and Left Out. The Frightening US Parallels to Brexit – Fiscal Times
Poll: Vladimir Putin gets higher marks from Europeans than Donald Trump – Vox
Yes, Gary Johnson Could Make It Into the Debates. Here’s How. –
GOP Donor Paul Singer: Trump Would Cause ‘Global Depression’ – Newsmax
Mitt Romney: My Conscience Won’t Allow Me to Vote for Trump or Clinton – Atlantic
Weed legalization to be on November California Ballot – Vice News
Grizzly bear kills mountain biker in Montana –

Stocks: 5 things to know at the open – CNN/Money
Oil Is Still Heading to $10 a Barrel – Bloomberg
Fund Managers Flocked To Energy, Materials in 2Q – Barron’s
1 Chart That Shows Why Bank Stocks are Getting Crushed – Motley Fool
Why the worst of the Brexit storm is yet to come for markets – MarketWatch
Was Brexit fear a giant hoax or is this the calm before the next storm? – Telegraph
Soros Says Brexit Has ‘Unleashed’ a Financial-Markets Crisis – Bloomberg
Gold set for best month since February after Brexit shock – Reuters
Brexit Vote Sees Stampede by Banks Into Higher Gold Targets – Bloomberg
2016 already best year ever for world’s largest gold ETF –

Economic implications of Brexit – Bernanke Blog
Americans’ anxiety around the economy grows – Marketplace
GDP Corporate Profits And Cash Flows Rebound in Q1, But Not Really – Alhambra Partners
Millions of Boomers Are Too Young to Retire, Too Old to Get a New Job – Fiscal Times
The Slow-Motion Crisis in Saudi Arabia, in Two Minutes – Bloomberg
UK current account gap remained near record high before EU vote – Reuters
India’s first female Uber driver has been found dead in her home in Bengaluru – Quartz
How the U.S. housing boom hid weaknesses in the labor market – WCEG
Why Negative Interest Rates are Ineffective and Dangerous – Thomas Palley
The Curse Of ‘Wealth Effects’ Central Banking – Contra Corner


Jim Rogers on Brexit

As might be expected, 73-year old billionaire investor Jim Rogers isn’t hopeful about what the Brexit vote portends for the global economy and financial markets.

It’s hard to believe that this will be “worse than any bear market you’ve seen in your lifetime”, particularly after the little episode of eight or nine years ago, but you never know.

Wednesday Morning Links

Istanbul airport attack kills 41 – AP
UK shares and pound continue to recover – BBC
Brexit on Ice: More Emotion Please, Angie – Spiegel
The Refugee Question: Is Merkel To Blame for Brexit? – Spiegel
Cameron Makes Emotional Adieu as Sun Sets on U.K. EU Membership – Bloomberg
A Classic Case of Failed Socialism: What’s Next After the Brexit? – U.S. Global Investors
London’s standing in global finance at risk as City faces loss of ‘EU passport’ – Guardian
Here’s how much it will cost the UK if bankers start quitting the City after Brexit – Telegraph
Why America loves Wendy’s and Sonic more than McDonald’s – USA Today
This little town has the worst income inequality in America – MarketWatch
Trump Bets It All on the Brand – Bloomberg
How Obama will campaign for Clinton – Politico

Stocks: 3 things to know before the open – CNN/Money
Did Wall Street witness the Brexit bottom? – USA Today
Calculate The Odds Of A Portfolio Disaster – Forbes
What are ’safe haven’ investments in stormy markets? – BBC
Oil prices rise after Brexit shock; Norway strike threat supports – Reuters
Richard Branson: investors pulling out of UK after Brexit vote – Guardian
Summer crash of 2016 is about more than the Brexit – MarketWatch
Gold edges higher on dollar, appetite for security – Reuters
China Joins Gold Rush After Brexit Turmoil – Bloomberg
Has The Last Gold Bear Left The Woods? – Kitco

An Inside Look at the Q1 Third Estimate – Advisor Perspectives
Brexit likely to exact a modest toll on U.S. economy – USA Today
Brexit Economic Fallout Worries Americans in Bloomberg Poll – Bloomberg
On Ireland’s border, Britain’s EU exit threatens jobs, peace – AP
‘Welcome to Hell’: Rio police greet visitors five weeks before the Olympics – Vice News
House prices up in June in ‘calm before the storm’ of post-Brexit economy – Telegraph
Denver home prices frothy, but risk of a reversal remains low – Denver Post
Brexit: What Will It Mean for the US Housing Market? – Builder Online
Forget December. Forget Next Year. Fed Done Hiking Until 2018 – Bloomberg
The Warning Embedded Within The Interest Rate Fallacy – Alhambra Partners


The Rubes Are On to the Rig

David Stockman details The End Game Of Bubble Finance – Political Revolt:

By the eve of the great financial crisis, the GOP was actually controlled by the racketeers of the Beltway and the Wall Street gamblers, not the red state voters who had elected it.

In fact, Goldman’s Sach’s plenipotentiary to Washington, Hank Paulson, was in complete command of the elected side of government. At the same time, the Bush White House had populated the central banking branch of the state with proponents of monetary activism, who were more than ready to authorize “heroic” measures to reflate the bubble.

Needless to say, the leader of the pack, Ben Bernanke, had been groomed for the role of chief bailster by none other than Milton Freidman. The latter, in turn, had led Nixon astray at Camp David 37 year earlier when he persuaded Tricky Dick to default on the dollar’s link to gold, thereby opening the door to fiat money, massive credit expansion and the modern era of Bubble Finance.

There is a straight line of linkage from that great historical inflection point to Friday’s Brexit uprising. Namely, Nixon’s abandonment of the Bretton Woods gold exchange standard, as deficient as it had been, was also a profoundly political act.

It resulted in the abdication of economic and financial policy to an unelected elite and their eventual capture by Wall Street and the forces of speculation and financialization unleashed by unanchored central bank money and credit.

Nixon’s destruction of Bretton Woods was the enabling event. It turned central bankers and financial officialdom loose to operate a dictatorship of bailouts, bubbles and financialization of economic life. And to spread this baleful regime to Europe, Japan and the rest of the world, too.

One of the big things being missed in all the Brexit blather is that, as with Trump in the U.S., voters are not so much voting FOR Brexit as they are voting AGAINST the status quo.

People don’t really understand what’s gone wrong (and are increasingly distrustful of policy makers who claim they do understand) – but they know that something has definitely gone wrong and see no reason to continue down the same path.

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