That should read widely anticipated Quantitative Easing (QE) is not enough to save the economy from a contraction in the larger credit cycle, however titles need to be catchy. And that’s basically what sparked the sell-off in stocks yesterday, reflected in a reversal of high yield bonds, which as you know we have been expecting to lead equities (hot money) lower. We were of course not disappointed in this regard, however sentiment readings still leave scope for increasing volatility (both up and down) over the next week or so, as options expiry approaches on the 20th.
There’s been plenty of bleak news coming out of the equity markets and the U.S. economy as a whole. Are there opportunities hidden within that bad news? Are we now in one of those “blood in the streets” scenarios that Rothschild (and many investors after him) found so appealing?
Our leadership quietly asks: " Where is the hat?"
The time for decisive action is upon us. The November election is just over 60 days away. Where are the solutions? Uncle $ugar is issuing more debt and buying it himself with more freshy printed fiat money.
Bad News For Economy!
Much of the hope for the economic recovery picking up momentum again has been driven by expectations that the technology sector will lead the way, the key expectation being that it’s about time for the ‘computer replacement cycle’ to kick in.
The disgustingly rich Wall Street wheeler dealers who live in Greenwich CT and NYC and summer in the Hamptons have created nothing. Their immense wealth has been created through draining the economic system of its lifeblood. Their financial innovations have created no lasting benefit for our society.
Gold and the new Fed policy
What if you earned half of what you spent in a month and put the other half on your credit card? What if you did that month after month, year after year until your debt was six times your annual income? Would you consider yourself to be in deep financial trouble? As daunting as that might seem, it is precisely the situation in which the U.S. federal government finds itself as we enter the second decade of the 21st century.
The artificial nature of the U.S. economic recovery from the recession lows has always been obvious. In recent months, judging from media coverage, it is now mainstream. While there are a few lingering signs that support some modest optimism, it is getting difficult to find much to cheer about.
Thank the Federal Reserve & Washington DC!
Tsunami Warning, Is It Time?, was the title of my last editorial I wrote back on August 16, 2010. The TSUNAMI WARNING now has been officially issued here at PSTL. We know all of the arguments many are making as to why the economy will be fine but are they really legit?