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Yellen says case for interest rate hike is stronger.
Fischer says yes to possible September rate hike.
GDP estimate lowered to 1.1%.
Which do I believe? I read on CNBC that "THE BANKS ARE PREPARING FOR A NUCLEAR WINTER". Does NIRP cause Nuclear Winter? Will higher interest rates save us from a Nuclear Winter?
I see a FED (and a coterie of Central Bankers) all painted into a corner, wanting to talk gold down as an alternative currency. A lot of talk. And then more talk. But not much mustard in their collective gut. (Not much stomach anywhere for recession, deflation, default, revolution, civil war, debt control.) Do we NEED higher interest rates? We needed them beginning in 2001. Greenspan raised them, got scare, retired. Bernanke was so dull he didn't even know he should be raising interest rates. Fischer is whispering in Yellen's ear. Yellen is whispering in the president's ear. The president is wringing his hand. Suddenly we are going to DEFEND the dollar, after all these years of killing it. It won't be easy to sell to a world clamoring for an alternative to the dollar (and NOT a GOLD alternative).
Maybe if Trump wins, and then appoints Fischer, then, and may then, we might need our hardhats.
If Fischer moves up, we might finally get the higher rates we have needed for 16 years.
In the mean time I'm LONG CHINA RALLY.
Long Brazil; long Russia.
Long Oil -- so short the US Dollar, and the FED.
Long gold and silver.
Maybe Mizzzz Yellen is looking at the real estate bubbles now expanding in most of California and in Greater Boston, New York City and other places? The breaking of those early 21st century R.E. bubbles along with the absurd proliferation of highly speculative derivative instruments caused the 2007 financial disaster.
LOL! Derivatives themselves are not a problem. The proximate cause of the 2007 credit crisis and ensuing financial disaster was the inability of investment bankers to stop securitizing mortgages into secondary markets once there were no more good mortgages left to slice and dice. They just couldn't climb off the gravy train of 2002-2004, so they kept on pouring worse and worse paper -- notes that they knew full well were destined to fail -- into the system until it choked on them. And all this happened right under the nose of Bush administration regulators who did nothing about it, even though it was their job to. Markets are wise enough to regulate themselves, don't you know.
While it would have been very expensive and there was not the political will for it at the time, the larger crisis could have been averted in late Summer of 2007. Strategies and proposals were put forward to get what would become known as "toxic assets" off the books and quarantined. What we ended up with instead was the useless Hope Now Alliance, and with that spineless response, it became obvious and inevitable that credit availability would continue to decline, that foreclosure rates would continue to climb, that investment banks would begin to fail, and that asset markets would ultimately collapse as home, job, and income losses began to undermine the health of the economy as a whole.
In the mean time I'm LONG CHINA RALLY.
Long Brazil; long Russia.
Long Oil -- so short the US Dollar, and the FED. Long gold and silver.
Good Luck!!!
You told us a few weeks ago that you had exited your gold positions despite your earlier trumpeting "gold and silver on a two year run Guaranteed". What little credibility you had is rapidly evaporating. Your apocalyptic prophesy message will probably be more readily received over at Zerohedge or doomsdayprep.com
I think this topic keeps being rehashed is because so many of us feel that these fed policies are creating artificial bubbles & many would like to grow on solid earnings/ valuations rather than just cheaper debt. The fed has manipulated the equities and housing markets long enough and wouldn't you rather have a fiscally responsible path then these boom & bust cycles.
The fed has had ample opportunity to start "slowly" raise rates- how stretched (how high) do the market valuations have to get before the fed is fooled into thinking the "economy" is on solid footing?? The fed has lost it's independence and relies on the street to dictate it's policies. I say screw the stock market and do what is best for our economic system in the long run. As disclosure: I am in the stock market and willing to have my portfolio's value decrease if it means avoiding a complete meltdown in the future.
The Feds are crooked people. One set of people will say interest ate should be raised and then Yellen will counter balance. Rates will not be raised until Clinton is elected. It's rigged.
LOL! Derivatives themselves are not a problem. The proximate cause of the 2007 credit crisis and ensuing financial disaster was the inability of investment bankers to stop securitizing mortgages into secondary markets once there were no more good mortgages left to slice and dice. They just couldn't climb off the gravy train of 2002-2004, so they kept on pouring worse and worse paper -- notes that they knew full well were destined to fail -- into the system until it choked on them. And all this happened right under the nose of Bush administration regulators who did nothing about it, even though it was their job to. Markets are wise enough to regulate themselves, don't you know.
While it would have been very expensive and there was not the political will for it at the time, the larger crisis could have been averted in late Summer of 2007. Strategies and proposals were put forward to get what would become known as "toxic assets" off the books and quarantined. What we ended up with instead was the useless Hope Now Alliance, and with that spineless response, it became obvious and inevitable that credit availability would continue to decline, that foreclosure rates would continue to climb, that investment banks would begin to fail, and that asset markets would ultimately collapse as home, job, and income losses began to undermine the health of the economy as a whole.
Children playing with matches.
the cdo's and credit default markets were a huge influence on 2008-2009 . the laddered method of bringing cdo's to market is what triggered the credit markets to freeze .
no one just woke up one morning and said today i can't pay my mortgage . when the credit markets froze it took business's and jobs with it .
the loan packages were nothing out of the ordinary . they were the same good and bad mixes they always were . they were just marketed in tiered fashion paying different rates of returns to different investor groups based on those before them getting paid first .
that was one reason the rating company's could not rate these things . it was the marketing that was different not the loans .
the loans only went bad as a result of the credit markets being frozen when people lost their jobs and sources of income failed . .
personally i have no idea of what a bubble is supposed to mean yet you all use it . . investors were sure stocks were in a bubble in 1982 when pe's were at 12 and interest rates were double digits since they went from 7 to 12 in one year . every day things just looked worse and worse .
well things not even on the radar altered the course of events everyone thought was a given and the greatest bull market in history was born ..most investors missed out on the biggest gains being so pessimistic .
A .25 raise in the rate means 5 billion dollars in added income for banks.
The equity market is at the top of the range.
The Fed is comfortable with the equity market staying within the range.
The US dollar is at the bottom of the range.
Both Japan and the Fed would be content with a higher US dollar.
The Fed is also comfortable with other central banks purchasing US securities, if not actively encouraging them to do so to provide a buffer against rising rates.
The speed at which short-term rates can be raised is constrained by the very low yields on longer maturities at the 1 and 2 year.
how many of those points do you you think will actually turn out to be untrue and pan out differently ?
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