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12 Reasons Why The Federal Reserve May Have Just Made The Biggest Economic Mistake Since The Last Financial Crisis

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Wrong Way Signs - Public DomainHas the Federal Reserve gone completely insane?  On Wednesday, the Fed raised interest rates for the second time in three months, and it signaled that more rate hikes are coming in the months ahead.  When the Federal Reserve lowers interest rates, it becomes less expensive to borrow money and that tends to stimulate more economic activity.  But when the Federal Reserve raises rates , that makes it more expensive to borrow money and that tends to slow down economic activity.  So why in the world is the Fed raising rates when the U.S. economy is already showing signs of slowing down dramatically?  The following are 12 reasons why the Federal Reserve may have just made the biggest economic mistake since the last financial crisis…

#1 Just hours before the Fed announced this rate hike, the Federal Reserve Bank of Atlanta’s projection for U.S. GDP growth in the first quarter fell to just 0.9 percent.  If that projection turns out to be accurate, this will be the weakest quarter of economic growth during which rates were hiked in 37 years.

#2 The flow of credit is more critical to our economy than ever before, and higher rates will mean higher interest payments on adjustable rate mortgages, auto loans and credit card debt.  Needless to say, this is going to slow the economy down substantially

The Federal Reserve decision Wednesday to lift its benchmark short-term interest rate by a quarter percentage point is likely to have a domino effect across the economy as it gradually pushes up rates for everything from mortgages and credit card rates to small business loans.

Consumers with credit card debt, adjustable-rate mortgages and home equity lines of credit are the most likely to be affected by a rate hike, says Greg McBride, chief analyst at Bankrate.com. He says it’s the cumulative effect that’s important, especially since the Fed already raised rates in December 2015 and December 2016.

#3 Speaking of auto loans, the number of people that are defaulting on them had already been rising even before this rate hike by the Fed…

The number of Americans who have stopped paying their car loans appears to be increasing — a development that has the potential to send ripple effects through the US economy.

Losses on subprime auto loans have spiked in the last few months, according to Steven Ricchiuto, Mizuho’s chief US economist. They jumped to 9.1% in January, up from 7.9% in January 2016.

“Recoveries on subprime auto loans also fell to just 34.8%, the worst performance in over seven years,” he said in a note.

#4 Higher rates will likely accelerate the ongoing “retail apocalypse“, and we just recently learned that department store sales are crashing “by the most on record“.

#5 We also recently learned that the number of “distressed retailers” in the United States is now at the highest level that we have seen since the last recession.

#6 We have just been through “the worst financial recovery in 65 years“, and now the Fed’s actions threaten to plunge us into a brand new crisis.

#7 U.S. consumers certainly aren’t thriving, and so an economic slowdown will hit many of them extremely hard.  In fact, about half of all Americans could not even write a $500 check for an unexpected emergency expense if they had to do so right now.

#8 The bond market is already crashing.  Most casual observers only watch stocks, but the truth is that a bond crash almost always comes before a stock market crash.  Bonds have been falling like a rock since Donald Trump’s election victory, and we are not too far away from a full-blown crisis.  If you follow my work on a regular basis you know this is a hot button issue for me, and if bonds continue to plummet I will be writing quite a bit about this in the weeks ahead.

#9 On top of everything else, we could soon be facing a new debt ceiling crisis.  The suspension of the debt ceiling has ended, and Donald Trump could have a very hard time finding the votes that he needs to raise it.  The following comes from Bloomberg

In particular, the markets seem to be ignoring two vital numbers, which together could have profound consequences for global markets: 218 and $189 billion. In order to raise or suspend the debt ceiling (which will technically be reinstated on March 16), 218 votes are needed in the House of Representatives. The Treasury’s cash balance will need to last until this happens, or the U.S. will default.

The opening cash balance this month was $189 billion, and Treasury is burning an average of $2 billion per day – with the ability to issue new debt. Net redemptions of existing debt not held by the government are running north of $100 billion a month. Treasury Secretary Steven Mnuchin has acknowledged the coming deadline, encouraging Congress last week to raise the limit immediately.

If something is not done soon, the federal government could be out of cash around the beginning of the summer, and this could create a political crisis of unprecedented proportions.

#10 And even if the debt ceiling is raised, that does not mean that everything is okay.  It is being reported that U.S. government revenues just experienced their largest decline since the last financial crisis.

#11 What do corporate insiders know that the rest of us do not?  Stock purchases by corporate insiders are at the lowest level that we have seen in three decades

It’s usually a good sign when the CEO of a major company is buying shares; s/he is an insider and knows what’s going on, so their confidence is a positive sign.

Well, according to public data filed with the Securities and Exchange Commission, insider buying is at its LOWEST level in THREE DECADES.

In other words, the people at the top of the corporate food chain who have privileged information about their businesses are NOT buying.

#12 A survey that was just released found that corporate executives are extremely concerned that Donald Trump’s policies could trigger a trade war

As business leaders are nearly split over the effectiveness of Washington’s new leadership, they are in unison when it comes to fears over trade and immigration. Nearly all CFOs surveyed are concerned that the Trump administration’s policies could trigger a trade war between the United States and China.

A decline in global trade could deepen the economic downturns that are already going on all over the planet.  For example, Brazil is already experiencing “its longest and deepest recession in recorded history“, and right next door people are literally starving in Venezuela.

After everything that you just read, would you say that the economy is “doing well”?

Of course not.

But after raising rates on Wednesday, that is precisely what Federal Reserve Chair Janet Yellen told the press

“The simple message is — the economy is doing well.” Federal Reserve Chair Janet Yellen said at a news conference. “The unemployment rate has moved way down and many more people are feeling more optimistic about their labor prospects.”

However, after she was challenged with some hard economic data by a reporter, Yellen seemed to change her tune somewhat

Well, look, our policy is not set in stone. It is data- dependent and we’re — we’re not locked into any particular policy path. Our — you know, as you said, the data have not notably strengthened. I — there’s noise always in the data from quarter to quarter. But we haven’t changed our view of the outlook. We think we’re on the same path, not — we haven’t boosted the outlook, projected faster growth. We think we’re moving along the same course we’ve been on, but it is one that involves gradual tightening in the labor market.

Just like in 2008, the Federal Reserve really doesn’t understand the economic environment.  At that time, Federal Reserve Chair Ben Bernanke assured everyone that there was not going to be a recession, but when he made that statement a recession was actually already underway.

And as I have said before, I wouldn’t be surprised in the least if it is ultimately announced that GDP growth for the first quarter of 2017 was negative.

Whether it happens now or a bit later, the truth is that the U.S. economy is heading for a new recession, and the Federal Reserve has just given us a major shove in that direction.

Is the Fed really so clueless about the true state of the economy, or could it be possible that they are raising rates just to hurt Donald Trump?

I don’t know the answer to that question, but clearly something very strange is going on…

 
  • aldownunder

    Yellen probably believes what she says. After all, she lives in a little bubble of Keynesian PhD groupthink that uses flawed models to make their predictions. What could possibly go wrong?

    • socalbeachdude

      Actually nothing as the only 3 interest rates set by the Federal Reserve are totally irrelevant.

      • Gassius Maximus

        It’s called perception Dude and I think you have lost yours staring at the sun too long.

        • socalbeachdude

          You hit the nail on the head with all of the FALSE PERCEPTIONS which are totally bogus regarding the Federal Reserve.

          • Spatial Memory

            Rotflmao

        • Spatial Memory

          Regulation T and Regulation U clearly set by frb may seem perception only to blog site comments by certainly reality to all financial and capital markets on earth.

          • Gassius Maximus

            WTF does that mean? What do I care about Brokers and Dealers and buying on margin? But that is inherently a big part of the corruption game that is bought and paid for with our Congress critters. They give financial institutions whatever the hell they want. Why do Reg. F & U apply only to individuals but not brokers and dealers? We all know why. The game is rigged. Globally.

          • socalbeachdude

            What of them? All Regulation T did (does) was to set MARGIN REQUIREMENTS and that wasn’t changed from 1948 to 2014 and is irrelevant. As to Regulation U it is also about margin requirements and applies to parties who are not broker dealers.

            Regulation U: Credit by Banks or Persons other than Brokers or Dealers for the Purpose of Purchasing or Carrying Margin Stocks 12 CFR 221

            http://www.federalreserve.gov/bankinforeg/regucg.htm

          • Spatial Memory

            Keep guessing. ROFL

  • GetReal4U2

    perhaps the rates are being raised to destroy America and usher in a new “one world” currency…the feds will do anything now to destroy Trump…

    • socalbeachdude

      It doesn’t matter the slightest bit of a hoot to the US economy what the only 3 interest rates set by the Federal Reserve are.

      • Gassius Maximus

        Yeah yeah yea. Go pound sand, sandman.

      • Spatial Memory

        One TARGET RANGE for Fed Funds RATE – Not 3 set and WITHOUT DOUBT matter hoots to the US economy.
        Set RATES are SET in capital markets per Reg T and U not limited to 🙂 matter hoots to US markets…. not limited to.
        Hoot!

        • socalbeachdude

          What part about the fact that the Federal Reserve only sets 3 interest rates do you not comprehend?

          The only 3 rates that the Federal Reserve is involved with setting are:

          1) Federal Discount Rate – currently 1.50%

          2) Federal Funds Rate (which it influences) – currently in the range of 0.75% to 1.00%

          3) Federal Reserve IOER (Interest On Excess Reserves) – currently 1.00%

          Regulations T and U of the Federal Reserve have NOTHING WHATSOEVER to do with interest rate and both relate to MARGIN REQUIREMENTS on stock purchases bought with borrowed funds.

    • William Lutz

      And you know what? God willing. We all know here that our total debt is unsustainable and we are facing an irreversible crisis propped up by the Fed and government. With this amount of liabilities, we will never get back on our feet.

      • socalbeachdude

        The Federal Reserve is not “propping up” anything in the US economy.

        • nobody

          YOU DON.T GET IT’ GOD HAVE MERCY ON you. I would welcome you at my fire. This is so above us and eternal.

          • socalbeachdude

            You are TOTALLY CLUELESS and utterly ignorant if you think otherwise from exactly what I have very clearly stated. You apparently have no comprehension regarding the Federal Reserve and I would suggest you learn about it at:

            http://www.FederalReserve.gov

          • nobody

            You’ll see as surely as you are reading this. God bless and have a good evening.

          • socalbeachdude

            Nope, please do attempt to learn about what the Federal Reserve is and what it does and how it is structured and who owns and the fact that 94% of its annual profits are rebated to the US Treasury.

          • Gassius Maximus

            Oh that is a great source to learn about the Fed, from the Fed, right from the horses mouth. How stupid can you be?

          • socalbeachdude

            The Federal Reserve web site is the best and most comprehensive information available on the Federal Reserve and our Federal Reserve is the most transparent central bank in the world and their web site clearly explains everything there is to know regarding the Federal Reserve.

          • Gassius Maximus

            If you are so well read, why don’t you reference “The Creature from Jekyll Island” by Edward Griffin? Eh?

          • socalbeachdude

            That “creature” book was originally written by G. Edwards Griffin in 1994 and is nothing but a piece of bogus and blatantly false propaganda garbage and little else. Its absurd assertions have been thorough and totally debunked and what is left of the 1% of factoids remaining there are of no significance whatsoever and the entire point of the book is to promote fantastical and inane and false conspiracy theories about the Federal Reserve System.

            The Story Behind ‘The Creature From Jekyll Island,’ the Anti-Fed Conspiracy Theory Bible

            The Fed was secretly created to enact vicious cycles of genocide. Or so this popular book would have you believe.

            It’s the kind of conspiracy theory so all-encompassing that it explains the very roots of all modern American wars, depression, economic boom, and (most importantly!) the darkest, best-kept secrets of international banking.

            Typically, the Federal Reserve is a government entity that frustrated high schoolers in America are forced to learn about before entering adulthood and forgetting exactly what it is or why it exists. The Fed is our central banking system that was created at the tail end of 1913 as a response to a string of financial crises. It is responsible for implementing the United States’s monetary policy, and is routinely and aptly described as “boring.”

            It’s all fairly mundane and unsexy (though hugely consequential) stuff. The Fed doesn’t bomb anything, invade anything, or even tax anything.

            The fatal flaw in Griffin’s analysis and breathless fear-mongering is, as is the case with so many prevalent conspiracy theories, that it takes a grain of truth and turns it into a salt mine of utterly laughable BS.

            http://www.thedailybeast.com/articles/2015/11/26/the-story-behind-the-creature-from-jekyll-island-the-anti-fed-conspiracy-theory-bible.html

            The US government is in debt to the tune of around $20 trillion because CONGRESS is grossly profligate and financially irresponsible and that has nothing to do with the Federal Reserve, its operations, its policies, or its structure.

          • Dean

            In 1967, the CIA created the label “Conspiracy Theorists” to attack anyone who challenged the “Official” narrative.

          • Gassius Maximus

            So it is not beyond belief that someone would write “blatantly false propaganda” about the Fed, but no one should believe that a creation of special interests, not even beholding to the US Government (who appoints the FED Chairman? It isn’t the President!) and does not get audited by any independent firms. And we are supposed to believe the PR BS that is on “their” website about just how altruistic and patriotic they are? No, they are part and parcel of the globalist efforts to destroy our country for the benefit of few, and to rape the individual citizen while they are at it.

            Answer me this. After all these years, with interest rates near zero and bank profits soaring, why are bank fees at an all time high, why haven’t they retreated like gas prices do at the pump when oil prices decline? This is crony capitalism and the US Congress is bought and paid for with taxpayer money. Simple as that. So you can take your precious FED and stuff it where you obviously need some sun boy!

          • socalbeachdude

            The Federal Reserve is a CREATION OF THE FEDERAL GOVERNMENT and is a quasi public-private central bank in the US which is owned by its member banks and which rebates 94% of its annual profits each ear to the US Treasury for the benefit of the US taxpayers.

            Each and every year, as has been the case for 100+ years, the Federal Reserve issues FULLY INDEPENDENTLY AUDITED Annual Financial Statements which are extremely detailed and run around 500 pages each year. They are fully publicly available for you and anyone else who is interested in them to fully read and review at:

            http://www.federalreserve.gov/publications/annual-report/

            What more do you want to know?

            The Federal Reserve does not cost the US government and taxpayers a single penny and is the LARGEST SINGLE PAYER OF REVENUES TO THE US GOVERNMENT each year and those rebates now amount to around $100 billion a year.

            Bank profits are not soaring at all and banks have been slammed with hundreds of billions of dollars of fines by the US government over the past 8 years and are reeling from that and closing many parts of their operations and firing tens of thousands of employees in the banking industry.

            Bank fees haven’t changed much at all over the years and banks do not charge fees on most things. Banks fees have no similarity whatsoever to commodities which fluctuate enormously in price and you assertion that bank fees should move up and down like oil or gold or grains is truly laughable!

          • Gassius Maximus

            So you think banks being fined for their unscrupulous and illegal actions against the interests of their “customers” is a bad thing? And my example of oil prices is only an example of the cost of electronic funds transfers and the cost reductions banks make pushing more and more functions back on customers and never do customers see a savings in return. EFT transactions over time continue to drop and yet the fees banks charge are relatively “astronomical” and are allowed with the blessings of the US Congress. You take those fees multiplied by the millions of daily transactions, the floats held by banks for holidays and weekends when fund should be in customers accounts ‘immediately’ and other scams that benefit financial institutions. The list goes on. It is all crony capitalism. I’m sure you must have a FED teddy bear or pillow you hug every night when you go to sleep. A real koolaid drinker.

          • socalbeachdude

            Banks in the US do not charge a single penny for EFT (Electronic Funds Transfer) transactions, and I do a number of those from my various banks every single month at no charge. Where do you come up with the nonsense that banks charge for EFTs?

            As to floats, there must be a reasonable period of time before funds clear between banks and any attempt to use funds before they clear is known as “KITING.” Banks now have the fastest clearance of interbank transfers of funds in the history of banking which is a great thing due to technology and proper management. No funds are “immediately” transferred at all as there must always be an appropriate time frame for proper clearance.

            No, the list does not go on and on at all, except in your own “mind.”

          • Gassius Maximus

            Can I ask a question? What is your background and why are you such a fan of the Fed?

          • socalbeachdude

            The Federal Reserve is the most excellent central bank in the world.

          • Spatial Memory

            R O F L !!!!!!!!!!!

          • Cinderella Man

            Something only an idiot troll would say

          • Spatial Memory

            Too funny for words. Thank you again for all the excellent comedy and laughs you provide!!!

          • socalbeachdude

            Again, what I stated is 100% correct.

    • Gassius Maximus

      You know this is just the opening salvo from the anti-Trumpers to kill any recovery in the economy that is happening. It will take time for all the businesses that have committed to hiring , building plants, buying equipment, etc. to not only put things into motion but to finalize them. These kinds of moves will only make that more difficult for those businesses. I hope Trump can change the tax laws to make it less costly for companies to bring their foreign profits back home for reinvestment. All the banks are raising fees, even on the little guy just when they are winning in the stock market. Greedy bastards one and all.

      • socalbeachdude

        THERE IS NO RECOVERY IN THE ECONOMY AT ALL AND NEVER HAS BEEN SINCE THE GRAND GLOBAL DEPRESSION STARTED IN AUGUST 2007.

        • Gassius Maximus

          On that we agree! All the Obama statements to the contrary, and the manipulation of “statistics” didn’t show anything resembling a real economic recovery. We never left the recession. It is still with us and Trump is trying to fix things for what that’s worth.

  • aldownunder

    ‘Trump said that [Janet] Yellen should be “ashamed of herself” for keeping interest rates low and creating a “false stock market.” — CNN Money, 12 September 2016.

    ‘Believe me. We’re in a bubble right now. We are in a big, fat, ugly bubble.” — Donald Trump, 26 September, 2016.

  • ALWAYSTOMORROW

    I just do not see the slowdown in business the way that you do Mike.

    Maybe the slowdown is just in the prepping supply sector.

    My company can not keep up with demand and has implemented a monthly bonus program on top of our yearly bonus program to try to motivate the employees.

    Mike you can send me your resume and I will see what I can do for you.

    • Guest

      Your company’s product is destroying the planet.

      • ALWAYSTOMORROW

        There are many entities involved in sharing your accusation.

    • socalbeachdude

      So, just what product and/or service do you sell?

  • wtnss4Jesus

    THE TYPE OF PEOPLE WHO WILL SURVIVE ALL THIS

    Jesus says, “I will remove all the proud and arrogant people from among you. There will be no pride on my holy mountain. Those who are left will be the lowly and the humble, for it is they who trust in the name of the Lord.

    The people of Israel who survive will do no wrong to each other, never telling lies or deceiving one another. They will live
    peaceful lives, lying down to sleep in safety; there will be no one to make them afraid…And the Lord himself, the King of Israel, will live among you! At last your troubles will be over, and you will fear disaster no more.

    On that day the announcement to Jerusalem will be, ‘Cheer up, Zion! Don’t be afraid! For the Lord your God has arrived
    to live among you. He is a mighty savior. He will rejoice over you with great gladness. With his love, he will calm all your fears. He will exult over you by singing a happy song. I will gather you who mourn for the appointed festivals, you will be disgraced no more.

    And I will deal severely with all who have oppressed you. I will save the weak and helpless ones; I will bring together those who were chased away.

    I will give glory and renown to my former exiles, who have been
    mocked and shamed. On that day I will gather you together and bring you home again. I will give you a good name, a name of distinction among all the nations of the earth. They will praise you as I restore your fortunes before their very eyes. I, the Lord, have spoken.” (Zephaniah 3:9-20 NLT)

    • aldownunder

      Totally off topic

  • socalbeachdude

    The Federal Reserve should NEVER HAVE CUT the Federal Funds Rate from 5.25% back in August 2007 and should have kept it constant at that level straight through present. The sooner the Federal Funds Rate which only even applies to interbank borrowing which PRACTICALLY NEVER EVEN USED BY BANKS gets back to 5.25%, the better.

    The only other 2 interest rates the Federal Reserve sets are the Federal Discount Rate which applies to bank borrowing directly from the Federal Reserve and which is priced 0.50% higher than the Federal Funds Rate and the IOER (Interest On Excess Reserves) which applies to the vast excess reserves of more than $2.5 trillion that the banks have inside the Federal Reserve in their excess reserves accounts. Increasing IOER will help banks with better returns.

  • aldownunder

    ‘ There are three methods to gaining wisdom. The first is reflection, which is the highest. The second is limitation, which is the easiest. The third is experience, which is the bitterest.’

    Confucius

    • nobody

      He didn’t have a clue What we are being besieged with.?.

  • socalbeachdude

    Fed raises rates for the second time in three months as job gains and firming inflation stoke confidence

    The U.S. Federal Reserve raised interest rates on Wednesday for the second time in three months, a move spurred by steady economic growth, strong job gains and confidence that inflation is rising.

    http://www.dailymail.co.uk/news/article-4317316/Fed-raises-rates-job-gains-firming-inflation-stoke-confidence.html

  • socalbeachdude

    The Federal Reserve only sets 3 interest rates and none of them have anything to do with the US economy where all interest rates are keyed off the yields (interest rates) on US Treasuries. The Federal Reserve is NOT setting interest rates “appropriate for the US economy” but is merely changing OVERNIGHT BANK LOAN RATES which are practically NEVER UTILIZED as the banks are awash in vast excess trillions of dollars and have no need to borrow from each other. The only other rate set by the Federal Reserve is IOER which is Interest On Excess Reserves held by banks inside the Federal Reserve where the banks currently have nearly $2.6 trillion in their excess reserves accounts.

    IT DOESN’T MATTER A HOOT WHAT THE FEDERAL RESERVE DOES WITH ANY OF THE THREE INTEREST RATES THEY SET as all interest rates that matter in the US economy are SET IN THE US TREASURIES MARKETS.

    The BOND MARKETS SET INTEREST RATES IN THE US ECONOMY AND NOT THE FEDERAL RESERVE. The yields (interest rates) in the bond markets have been SOARING EVER SINCE JULY and that is where all interest rates that affect the US economy are keyed off, and NOT the only 3 interest rates set by the Federal Reserve which simply do not matter a hoot in the US economy.

    The only 3 rates that the Federal Reserve is involved with setting are:

    1) Federal Discount Rate – currently 1.25%

    2) Federal Funds Rate (which it influences) – currently in the range of 0.50% to 0.75%

    3) Federal Reserve IOER (Interest On Excess Reserves) – currently 0.75%

    The IOER (Interest On Excess Reserves) interest rate does have an immediate beneficial impact for banks as it is the interest paid to banks on their excess reserves accounts inside the Federal Reserve and those accounts now have more than $2.5+ trillion sitting in them.

    The ONLY applicability of the Federal Funds Rate is INTERBANK BORROWING to clear nightly transaction balances which is now practically NEVER UTILIZED as the banks are awash in trillions of dollars of EXCESS RESERVES and have no need to borrow from each other.

    As to interest rates on savings accounts, BANKS ARE AWASH WITH EXCESS CUSTOMER DEPOSITS AT A TIME WHEN DEMAND FOR BORROWING IS VERY LOW which is why interest on savings rates is so low and that is not likely to change much.

    The only 3 interest rates set by the Federal Reserve have NOTHING WHATSOEVER TO DO WITH THE INTEREST RATES ON THE US GOVERNMENT DEBT as those yields (interest rates) are all set in the $12.8 trillion a year US Treasuries market and have nothing to do with the Federal Reserve.

    • Spatial Memory

      Someone is unfamiliar with FRB, Regulations T and U, not limited to- and their applications across capital and capital markets. ROFL

      • socalbeachdude

        Those 2 regulations are of no significant at all and have very little to do with anything.

        • Spatial Memory

          The can be no better proof than that to demonstrate your 100% lack of any knowledge nor experience whatsoever regarding capital markets.

          • socalbeachdude

            Your EXTREME IGNORANCE is beyond mind boggling. The Federal Reserve on sets 3 interest rates and has no control whatsoever of any interest rates across any other assets at all and never has as those are all established by the US Treasuries markets from which all interest rates that matter in the US economy are keyed by banks and other financial institutions.

            The only 3 rates that the Federal Reserve is involved with setting are:

            1) Federal Discount Rate – currently 1.50%

            2) Federal Funds Rate (which it influences) – currently in the range of 0.75% to 1.00%

            3) Federal Reserve IOER (Interest On Excess Reserves) – currently 1.00%

            Regulations T and U of the Federal Reserve have NOTHING WHATSOEVER to do with interest rate and both relate to MARGIN REQUIREMENTS on stock purchases bought with borrowed funds.

    • Stuey

      Then why have the FED at all? One second you post about how important the FED is and what all they do, then your next post above says the FED has very little control over interest rates. So which is it?

      • socalbeachdude

        About the least important thing done by the Federal Reserve is setting the three interest rates that get so much undue press focus. The Federal Reserve is a central bank and the the CLEARING HOUSE FOR ALL US BANK TRANSACTIONS amount the 6,200+ banks in the US which it does through its 12 regional banks which is by far its most important function. I would suggest you learn about the Federal Reserve and what it does and why it does it at:

        http://www.FederalReserve.gov

        • Stuey

          Oh, i know what they do….hell you have only posted it on this board a couple hundred times with your spam posts. So you are saying that the FED is VERY important and a must for the USA to survive economically, but the interest rates they set aren’t important at all and have no bearing on anything. The problem is all the financial institutions watch closely what the FED does on interest rates. But of course, i know you are smarter than all of those people.

          • socalbeachdude

            Obviously, you have NO CLUE AT ALL as to what the Federal Reserve is or does as is evidenced by each and every inane comment you make regarding the Federal Reserve and I would suggest you learn about the Federal Reserve at:

            http://www.FederalReserve.gov

            What all the financial institutions do with their interest rates is to WATCH THE YIELDS (INTEREST RATES) ON US TREASURIES which is how they key all of the interest rates they charge to borrowers in the US economy.

      • K2

        Seems to me that socal dude has aspergers.

  • nobody

    the fed knows exactly what they are doing. On purpose for thier master.

    • socalbeachdude

      The Federal Reserve is an independent central bank that has no “master” at all and always keys the only 3 interest rates they set to the YIELDS (INTEREST RATES) ON 3 MONTH US TREASURIES and they are significant behind the curve on moving rates up to match those yields. We need to see multiple further increases by the Federal Reserve in a rapid succession and the very same thing will happen in the US Treasuries markets.

      • nobody

        YOU DON’T GET IT, GOD HAVE MERCY.

        • socalbeachdude

          No, it is YOU who doesn’t “get it” at all regarding the Federal Reserve.

          • nobody

            Give me control of a nations currency, and I care not who writes their laws. ROTHCHILD

          • socalbeachdude

            So what as to that assertion? The Rothchild family has nothing whatsoever to do with the Federal Reserve at all and is a very minor player in US banking with a small boutique wealth management bank in the US.

          • Spatial Memory

            Rothschild. Rotflmao

          • socalbeachdude

            The Rothschilds have nothing whatsoever to do with banking in the US these days except for their small boutique banking operation being one of the 6,200 member banks of the Federal Reserve and a very tiny one at that among those 6,200 banks.

            The Rothschilds have very limited boutique banking operations in the US and are not even major players in the banking industry. Are you somehow not aware of that?

            The Rothschild family banking concern is called N M Rothschild & Sons and does very little commercial banking these days but is a leader in the M&A (Mergers & Acquisitions) field where it is in the top 6 of global investment banks. It only has about 50 offices worldwide. It is based in the UK in the City of London and does most of its business in Europe. It does very little in the way of retail banking operations except for very limited Private Client Banking.

            The firm competes against a wide range of investment banks, from conglomerates like JPMorgan Chase, Goldman Sachs and Morgan Stanley, to other mergers and acquisitions specialists like Lazard, Moelis and Greenhill & Co. in M&A, valuation and restructuring advisory services.

            Rothschild operates through three divisions:

            Global Financial Advisory (GFA) (Rothschild’s investment banking practice)
            Corporate Banking
            Private Banking and Trust

            Next to these three main divisions, Rothschild is also active in real estate, venture capital, and asset management.

            https://en.wikipedia.org/wiki/N_M_Rothschild_%26_Sons

            There US operations web site which has more information on their limited US operations is at:

            https://www.rothschild.com/usa/

          • Spatial Memory

            Doubling down on foolishness. ROFL

          • socalbeachdude

            Everything I have stated above is 100% true, accurate, and correct. Hellloooo?

          • HE WILL NOT DIVIDE US

            Come one dude…you need a vacation. The fed is up to no good and you ought to know this.

          • socalbeachdude

            Laughably false.

        • Dean

          Don’t waste your keystrokes buddy. He/She/It will never listen to an opposing viewpoint.

      • Spatial Memory

        You have zero clue what you’re typing. ROFL!!!

        • socalbeachdude

          I do, but you certainly do not at all.

      • Dean

        The Fed Just Initiated ‘Operation Rate Increase’ To Begin The Collapse Of The Economy – Episode 1229 (X22Report)

        • socalbeachdude

          What utterly absurd nonsensical assertions. The only 3 interest rates set by the Federal Reserve are totally IRRELEVANT to the US economy. Moreover, all interest rates need to normalize to the 5.25% range ASAP.

  • socalbeachdude

    GDPNow Q1 forecast plunges to 1.3% with vehicle sales, factory orders reports

    https://mishtalk.com/2017/03/07/gdpnow-1st-quarter-forecast-plunges/

  • socalbeachdude

    Much of the borrowing in the United States has SHIFTED AWAY FROM THE REGULATED BANKING SYSTEM and is now being done through the $25+ TRILLION SHADOW BANKING SYSTEM.

    The biggest amount of money sloshing around is the HOT MONEY consisting of more than $25 trillion in the SHADOW BANKING SYSTEM in the US. Regulated banks themselves are less involved than ever in the economy of the US and their loans outstanding to their customer deposits ratio has now hit an aggregate record low of 67%.

    100% of the Federal Reserve QE funds have always remained inside the Federal Reserve which is where they sit parked today in the excess reserves accounts of the banks there from whom the Federal Reserve purchased securities.

    The biggest issue with the US and global financial systems is the ENORMOUS SHADOW BANKING SYSTEM which in the US alone is more than $25 trillion in size which is more than 5 times larger than the Federal Reserve and the shadow banking system is largely unregulated and very opaque.

    The SHADOW BANKING SYSTEM in the US which is largely OUTSIDE OF REGULATIONS now controls MORE THAN $25 TRILLION which is more than the entire regulated banking system and 5 TIMES THE SIZE OF THE FEDERAL RESERVE. Are you really not aware of that?

    The Federal Reserve certainly does not control economic activity by adjusting that supply through interest rate levels at all and the only 3 interest rates they set (Federal Funds Rate, Federal Discount Rate, and IOER) have nothing whatsoever to do with any interest rates that matter in the US economy.

    At this stage, BANKS ARE AWASH IN VAST EXCESS RESERVES AMOUNTING TO ABOUT 33% OF CUSTOMER DEPOSITS IN THE US and there is NO PRACTICAL APPLICABILITY OF RESERVE REQUIREMENTS AT ALL.

    Presently, stocks have a MARKET VALUE of around $27 trillion in the US alone. Tens of trillions of dollars will SIMPLY VANISH AS THE EQUITIES MARKETS CRASH dead ahead. There is no way whatsoever to cashier people out of stocks at anywhere close to where stocks have been bid up to on margin. Stock values DO NOT REPRESENT REAL MONEY AT ALL and many very ignorant people will soon be learning that lesson the hard way.

    The total aggregate debt outstanding across all sectors of the US economy is just slightly less than $60 trillion and that is comprised of about $18 trillion of federal government debt, about $14 trillion of corporate debt, about $12 trillion of consumer debt with the rest spread around the rest of the economic sectors in the US.

  • socalbeachdude

    The Federal Reserve REBATES 94% OF ITS PROFITS EACH YEAR TO THE US TREASURY and always has done so for 103 years.

    The Federal Reserve does not cost US taxpayers a single penny. In fact, the Federal Reserve acts essentially as a NOT-FOR-PROFIT entity and REBATES NEARLY $100 BILLION A YEAR TO THE US TREASURY and is the single biggest source of revenues for the US government each year.

    Federal Reserve Press Release 01/09/2015

    “The Federal Reserve Board on Friday announced preliminary unaudited results indicating that the Reserve Banks provided for payments of approximately $98.7 billion of their estimated 2014 net income to the U.S. Treasury. Under the Board’s policy, the residual earnings of each Federal Reserve Bank are distributed to the U.S. Treasury, after providing for the costs of operations, payment of dividends, and the amount necessary to equate surplus with capital paid-in.”

    http://www.federalreserve.gov/newsevents/press/other/20150109a.htm

    The Federal Reserve ONLY OWNS ABOUT 12% OF OUTSTANDING US GOVERNMENT DEBT (US TREASURIES) WHILE 88% OF THAT OUTSTANDING DEBT IS OWNED BY PARTIES OTHER THAN THE FEDERAL RESERVE.

    The current federal government interest expenses are around 6% of the annual federal budget in Fiscal 2016 which has total spending of around $4 trillion.

    The Federal Reserve does not “issue loans to banks and collect revenues” other than on an extremely limited basis through the Federal Discount Window at the Federal Discount Rate which in reality is PRACTICALLY NEVER USED AT ALL and accounts for less than 0.00001% of any revenues to the Federal Reserve.

    The primary sources of revenues to the Federal Reserve are EARNINGS ON ITS HUGE AMOUNT OF ASSETS WHICH NOW NOW TOTAL AROUND $4.4 TRILLION and those earnings are nearly totally responsible for the more than $100 billion a year now in total annual earnings for the Federal Reserve.

  • socalbeachdude

    All of the focus on the Federal Reserve in this article and by the financial press is totally misconceived as the Federal Reserve has very little to no influence at all over actual interest rates in the US economy where all interest rates that matter are keyed off the yields (interest rates) in the nearly $13 trillion a year US Treasuries markets.

    • Spatial Memory

      Rotflmao

      • socalbeachdude

        I would suggest you learn about the US Treasuries markets in which more than $7 trillion a year in new US Treasuries are issue and which are a $13 trillion a year market at:

        http://www.TreasuryDirect.gov

  • socalbeachdude
    • Gassius Maximus

      so why have a FED at all?

      • socalbeachdude

        The Federal Reserve is a central banks the the CLEARING HOUSE FOR ALL US BANK TRANSACTIONS amount the 6,200+ banks in the US which it does through its 12 regional banks which is by far its most important function. I would suggest you learn about the Federal Reserve and what it does and why it does it at:

        http://www.FederalReserve.gov

  • socalbeachdude

    The only mistake made by the Federal Reserve was ever cutting the Federal Funds Rate from 5.25% in August 2007 and both it the 3 month US Treasury yield (interest rate) needs to get back to that NORMAL LEVEL as soon as possible and without further delay.

    • littlebit43

      Not sure they can afford it. 5.25 on twenty trillion would destroy the budget. They have got themselves between a rock and a hard place.

      • socalbeachdude

        Yes, our federal government politicians certainly do. An average 5.25% interest on the $20 trillion federal debt would be a little more than $1 trillion a year interest.

  • socalbeachdude

    1) GDP growth has nothing whatsoever to do with the only 3 interest rates set by the Federal Reserve and they have no affect on GDP.

    2) The flow of credit is nearly irrelevant with demand for borrowing near record lows and banks having loans outstanding only equal to around 67% of the amount of customer deposits.

    3) Auto loans will continue to increase in default rates because they were made for high amounts of unqualified buyers and there is very little collateral value in the vehicles on which the loans are based.

    4) The only 3 interest rates set by the Federal Reserve have nothing whatsoever to do with retail sales and the fact of the matter is that credit card rates have been at RECORD HIGH LEVELS of around 14% to 24% for a very long time for anyone even with excellent credit who carries any sort of balance on their credit card(s).

    5) The number of distressed retailers will continue to decrease quite substantially as many of them simply go bankrupt and out of business including some rather large department stores.

    6) There has been no “recovery” at all since the Grand Global Depression began in August 2007 and it will simply continue to intensify in the years ahead.

    7) Anyone who says they can’t write a $500 check is outright lying as average rents and house payments alone are now more than $1000 per month nearly everywhere.

    8) The “crashing bond market” is PRECISELY WHERE ALL INTEREST RATES THAT MATTER IN THE US ECONOMY ARE SET and bond prices are inverse to yields (interest rates). The more that bond prices crash the higher the yields (interest rates) go and the US TREASURIES MARKETS ARE WHERE ALL INTEREST RATES IN THE US ECONOMY ARE DIRECTED KEYED OFF.

    9) The debt ceiling will either be SUSPENDED AGAIN or increased to $24 trillion or higher and likely a total non issue on an immediate standpoint, but is certainly a worrisome issue as the higher that yields (interest rates) move on US Treasuries the more interest the US government will have to pay on its debt.

    10) US government revenues in terms of tax collection are at RECORD HIGH LEVELS presently and US government debt has in fact decreased by more than $60 billion since the Trump inauguration in January.

    11) Corporate insiders are cashing out of stocks at record high levels and are astutely aware of the trillion of dollars in corporate financed stock buybacks of shares that are the primary reason for equities (stock) markets being at preposterously elevated and unsustainable levels.

    12) Likely we will see a trade war on certain classes of goods but that has nothing whatsoever to do with the only 3 interest rates set by the Federal Reserve but rather to do with the huge trade imbalances in the world result in a massive US TRADE DEFICIT that is growing enormously as exports continue to decline and imports into the US continue to rise.

    • Gassius Maximus

      Dude, I think your brain has been sun bleached a bit too much. Go get some shade and a cooler.

      • socalbeachdude

        What I stated is 100% true, accurate, ad correct.

        • Spatial Memory

          ROFL

    • Spatial Memory

      Compound Nonsense

      • socalbeachdude

        Yes, that is precisely what your comments always are with very few exceptions. Sad.

  • socalbeachdude
  • socalbeachdude

    Interest Rates Soar as Yields Rise on US Treasuries

    BREAKING: US Treasury yields rise after hawkish comments from NY Fed’s Dudley

    http://www.cnbc.com/2017/02/28/us-treasurys-mixed-as-investors-await-trumps-speech-to-congress.html

  • socalbeachdude

    $611,318,000,000: Individual Income Taxes Set Record Through February

    The federal government collected a record of approximately $611,318,000,000 in individual income tax revenues through the first five months of fiscal 2017 (Oct. 1, 2016 through the end of February), according to the Monthly Treasury Statement released today.

    That is about $6,733,300,000 more than the $604,584,700,000 in individual income taxes (in constant 2017 dollars) that the federal government collected through the first five months of fiscal 2016.

    Despite collecting a record amount in individual income taxes, the Treasury still ran a $348,984,000,000 deficit in the first five months of this fiscal year.

    http://www.cnsnews.com/news/article/611318000000-feds-collect-record-income-taxes-through-february-still-run-348984000000

  • socalbeachdude

    Amazing: US Debt Decreased by More Than $60 Billion Since Trump Inauguration

    The US debt reduced by more than $60 Billion since the Trump Inauguration!

    On January 20th, the day of the Trump Inauguration, the US Debt stood at $19,947 billion. On March 8th, more than a month later, the US Debt load stood at $19,879 billion. Trump has cut the US Debt burden by $68 billion and 0.3% in since his inauguration!

    By comparison, under President Obama, the US Debt burden increased by more than $320 billion after his inauguration through March 8th 2009. Obama increased the US Debt by 3.1% during this time period and signed the trillion dollar ‘Stimulus’ bill which is widely considered a colossal failure and waste of US tax dollars as well. The failed ‘Stimulus’ did not kick in till later in Obama’s first year leading to Obama’s first year deficit of $1.4 trillion. Overall Obama doubled the US Debt during his Presidency and set records for highest deficits and the largest debt increase by any President ever.

    One month after the Trump Inauguration US Debt was down $12 billion now it is down $68 billion.

    http://www.thegatewaypundit.com/2017/03/amazing-us-debt-decreased-60-billion-since-trump-inauguration/

  • Spatial Memory

    Greatest comedy EVER!! They say the definition of insanity is doing the same thing over expecting different results. Doubling down 12 reasons at a time now- regardless of economic reality and markets price action. Too funny!! ROTFLMAO!!!

    • socalbeachdude

      The preposterously elevated stock and commodities and real estate markets are the very definition of insanity and headed for massive downturns.

      • Spatial Memory

        Between the ludicrous hyperbole in the articles and the volumes of inaccuracies and misinformation foisted by you in the comments anyone following such foolishness surely has be absolutely decimated by capital markets. Why continue?

        • socalbeachdude

          There is NEVER any misinformation of any kind in any of my comments. Your utter lack of comprehension of the facts and of the articles I post is mind boggling.

  • socalbeachdude
  • socalbeachdude
  • socalbeachdude

    BlackRock’s Larry Fink sees ‘dark shadows’ in markets

    High consumer confidence and stock prices ‘horrifying’

    One chart that Fink calls “horrifying” is the climb of consumer confidence along with the S&P 500 index SPX, +0.07% reasoning that the time to buy stocks was when both the S&P 500 and consumer confidence were at lows, like in 2009. Now with both at highs, investors are saying, “Maybe you should be selling now,” he said.

    “I believe we’re in the midst of a slowdown as we speak, because of all the uncertainty,” he said.

    Additionally, if the promise of President Donald Trump’s pro-business policies get delayed — say, if it takes Congress a full year to get anything pushed through — then markets are ahead of themselves, Fink said.

    http://www.marketwatch.com/story/blackrocks-larry-fink-sees-dark-shadows-in-markets-2017-02-08

  • socalbeachdude

    The Crash Will Be Violent – David Stockman

    It is almost impossible to overstate the level of unhinged mania in the stock market, but still the robo-machines and knucklehead day traders just can’t seem to let go.

    They are essentially 12-year-olds on a bicycle defiantly screaming, look ma — no hands and a blindfold, too!

    Worse still, these daredevils have been indulged by the Fed and other central banks so long that they surely have come to believe flying blind is completely safe. After all, we can count at least 60 “dips” since March 2009 that resolved to the upside over and again.

    Altogether the S&P 500 now stands at 3.4X its post-crisis low, having generated an 18% annual return (including dividends) for nearly eight years running.

    To be sure, in an honest free market that very fact would be a flashing red light, warning that exceptionally high gains over an extended period necessitate a regression to the mean in the period ahead.

    But we have a central bank medicated market, not a free or honest one, so at the end of the day fundamentals don’t count. Instead, on the margin the stock market is driven by momentum, central bank liquidity and trader presumption that it will never be withdrawn.

    The reflexive dip buyers have ratcheted the market higher 45% without any plausible or sustainable case for it. Economic growth rates are deflating, productivity has slumped and corporate earnings have been sinking for nearly eight quarters.

    https://dailyreckoning.com/crash-will-violent/

    • Kochvilledi

      Stockman has been saying this for so many years, he’s like the boy who cried wolf one too many times.

      • socalbeachdude

        And the situation has been getting DRASTICALLY WORSE EACH AND EVER YEAR FOR THE PAST 36 YEARS since 1981 making the RESULTING INEVITABLE CRASHES ABSOLUTELY CATASTROPHIC DEAD AHEAD.

        • Kochvilledi

          Could very well be. But I’ve been reading predictions of imminent crashes since 2010. Seven years later and hundreds of articles later, no crash.

          • socalbeachdude

            Huh? The Chinese markets collapsed by 50% just 2 years ago. Didn’t you get the many memos?

          • Zenithon

            That’s right and here are the numbers:
            Gold June 30, 2010: $1,122.25
            S&P June 30, 2010: $1,030.71

            Gold March 17, 2017: $1,228.98
            S&P March 17, 2017: $2,378.25

            Pick what investment would have been better to be in over that time? A gold investment would have increased by about 9.5%, while the S&P investment would have increased by 230.7%. Note that that doesn’t even include the dividends that would have been paid from an S&P fund over that time.

            I know that we can all pick and choose different times and come up with different scenarios, but reading the advise given so often on this site would lead many to stay out of the stock market and only buy precious metals, which obviously would have been a big mistake lately.

            There will always be a crisis coming and someday it will be the big one. In the mean time, getting out of debt should be everyones first priority. Then investing in a wide variety of assets, including the stock market, property, bonds, and precious metals should all be included in your diversified portfolio. That way when a crisis hits, you & your family will have the best chance to get through it with the least amount of pain. So don’t just listen to the gold bugs. Like a broken clock, they are only right every once in awhile.

          • socalbeachdude

            Gold has plummeted nearly $700 per ounce from its manic speculative high reached nearly 6 years ago and is down nearly 40% since September 5, 2011. Are you somehow not aware of that fact?

          • Zenithon

            I’m completely aware of that fact. My response was to Kochvilledi’s point and I was using his timeline of 2010, not the gold high in 2011. But since you bought it up, all I was saying is that as of late, investing in the S&P 500 would have been a much better investment than gold. Thanks for making my point even stronger. Why are you compelled to respond to everyone on this site, even when they are not addressing you? Did you know there are therapists and pills for that.

          • socalbeachdude

            There are no rules whatsoever regarding any member upvoting their own comments and all member are welcome to do so. The bottom line with gold is that it is down about 36% over the past nearly 6 years from its manic speculative high of $1927 per ounce reached on September 5, 2011.

  • socalbeachdude

    3 Reasons Why the New Dow Record Is No Reason to Celebrate

    Record highs are giving Wall Street an excuse to pop open the champagne, but economists say we should curb our enthusiasm.

    On January 25, the Dow Jones Industrial Average broke 20,000 points for the first time in history. Traders are celebrating and financial media is buzzing with speculation that 25,000 could be just around the corner. But history and fundamental research say otherwise.

    Here’s why…

    1. Stocks are painfully overvalued

    2. Previous Dow milestones preceded major drops

    3. This rally has been fueled by emotion instead of reason

    http://www.birchgold.com/news/3-reasons-to-not-celebrate-dow-record

    • FirstGarden

      How about a revolving door market. People get in.. then out real quick.

      • socalbeachdude

        Attempting to time the markets can be very dangerous, particularly in extremely irrational markets as we now have in the US and globally.

        • FirstGarden

          I was not suggesting this, but rather saying that we have this already. Nothing new, but perhaps more dangerous now than ever before.

          On a different note, the disparity of wealth was very high in the late 20s as well.

  • socalbeachdude
  • socalbeachdude

    The Most “Horrifying” Chart in the World

    Larry Fink is terrified.

    Fink runs BlackRock, the world’s largest asset manager. The company manages a whopping $5.1 trillion. That’s more than Goldman Sachs, Bank of America, or Wells Fargo. It’s more than the annual economic output of Japan, the world’s third-largest economy.

    This makes Fink one of the most powerful people on the planet.

    Obviously, you don’t climb to the top in Wall Street by being easily rattled. But right now, Fink’s nervous.

    He’s worried about “a lot of dark shadows that could impact the direction of the marketplace.”

    Today, consumer confidence is even higher than it was in 2007. And we all know how that ended.

    The S&P 500 plunged 57% over the next two years. The Russell 2000, which tracks 2,000 small U.S. stocks, dropped 60%.

    Sir John Templeton, one of the greatest stock pickers ever, famously said:

    Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.

    http://www.caseyresearch.com/articles/the-most-horrifying-chart-in-the-world

  • socalbeachdude

    From a risk-of-bankruptcy standpoint, the retail business is the new oil and gas

    Move over, oil and gas.

    Retail is set to replace the troubled energy sector as the most distressed sector this year, according to ratings agencies, lawyers and analysts, beaten down by the strain of competition from juggernaut Amazon.com Inc. AMZN, +0.75% and a range of other issues.

    The sector’s future is looking increasingly gloomy, with the cost of digital investments, trimming excessive store locations and lagging revenue amid declining traffic setting the stage for a spate of bankruptcies and restructurings in 2017 and 2018, experts say. The sector is grappling with changing consumer behavior and shrinking discretionary spending as consumers are faced with higher prices for everything from rent to prescriptions to gasoline.

    Fitch Ratings’ “Bonds of Concern” list is filled with retailers, and the agency is expecting the default rate for the sector to jump to 9% in 2017 from 1% over the last 12 months. The retail sector had $38.9 billion in outstanding debt as of December. Research firm CreditSights has an underperform rating on the sector’s bonds.

    http://www.marketwatch.com/story/retail-industry-is-expected-to-replace-oil-and-gas-as-2017s-distressed-sector-2017-02-15?siteid=YAHOOB

  • socalbeachdude

    Hedge Funds Continue to Chase the Herd With Record Momentum Bets

    Hedge funds can’t get enough of momentum — even if it means embracing an investing strategy they hate.

    Loosely defined as betting on shares that went up the fastest over the preceding nine-to-12 months, hedge funds are the most reliant on momentum strategies since at least 2010, according to an Evercore ISI analysis of 13F filings with the Securities and Exchange Commission. Meanwhile, they’ve reduced their bearish bet on value stocks, which are priced at deep discounts to earnings and assets, for the first time in nine quarters, the study shows.

    Investors rarely take on momentum and value positions at the same time, which is what’s happening now.

    https://www.bloomberg.com/news/articles/2017-02-21/hedge-funds-continue-to-chase-the-herd-in-record-momentum-wager

    • Spatial Memory

      Momentum is quantified along multiple timeframes; obviously most significant is weekly (on percentage closing basis).
      “Loosely defined as …” = ROFL

      • socalbeachdude

        More meaningless drivel from you, I see.

  • socalbeachdude
  • socalbeachdude

    The “Everything Bubble”

    That is what economist John Hussman calls it. Here is the chart he uses, which includes most of the major categories of the S&P 500 index. It doesn’t include the rise this year, which has now brought the market to the edge of a “Super Bubble.”

    http://bertdohmen.com/the-everything-bubble/?utm_source=BD&utm_campaign=The_Everything_Bubble&cmp=1&utm_medium=HTMLEmail

  • socalbeachdude

    WATCH OUT BELOW…

    Mom and pop investors are behind this historic market rally

    https://www.bloomberg.com/news/articles/2017-02-28/bullish-mom-and-pop-behind-u-s-stock-market-rifling-off-records

    • Spatial Memory

      R O T F L M A O !!!!!!

      • socalbeachdude

        If you don’t comprehend that, you are clueless.

        • Spatial Memory

          If you believe such an absurd notion then you have zero knowledge nor experience how capital markets function and price discovery machination.

          • socalbeachdude

            You are the one with zero knowledge, dude.

          • HE WILL NOT DIVIDE US

            MOM and POP! lol…..

  • socalbeachdude

    ‘Pure exuberance’: Investor sentiment hasn’t been this high since two bubbles ago

    Forget the dot-com boom with its “irrational exuberance” and the real estate bubble that was supposed to be invincible: Current market sentiment eclipses all of that.

    In fact, bullishness has never been this high going all the way back to 1987.

    That’s through three rousing bull markets, a couple of crashes, the “Great Moderation” of the 1990s and all sorts of other history-making events. A market that was supposed to flounder this year under a new president instead has taken off, and investors are pumped.

    http://www.cnbc.com/2017/03/01/investor-sentiment-hasnt-been-this-high-since-1987.html

  • socalbeachdude

    SNAP, CRACKLE AND DROP: POST-IPO GAINS DISAPPEAR FOR TECH STOCK

    Snap’s Stock Price Plunges, Closes Below $24

    Loss leaves stock price below the price of its first trade on the NYSE

    http://blogs.wsj.com/moneybeat/2017/03/06/snaps-stock-price-plunges-closes-below-24/

    SNAP DOWN 20% FROM IPO PRICE DAYS AGO…

    SNAP stock has left bunch of millennial investors under water…

    http://nypost.com/2017/03/13/snaps-stock-has-left-a-bunch-of-millennial-investors-under-water/

  • socalbeachdude

    This is the most overvalued stock market on record — even worse than 1929

    This is the most dangerous and overvalued stock market on record — worse than 2007, worse than 2000, even worse than 1929.

    Or so warns Wall Street soothsayer John Hussman in his scariest jeremiad yet.

    “Presently, we observe the broadest market valuation extreme in history,” writes the chairman of the cautious Hussman Funds investment group, “with the steepest median valuations on record, and the most reliable capitalization-weighted measures within a few percent of their 2000 peaks.”

    http://www.marketwatch.com/story/this-is-the-most-overvalued-stock-market-on-record-even-worse-than-1929-2017-03-13?mod=MW_story_top_stories

    • 2 Cents

      i have been hearing for 2 years how the sky will fall tomorrow

      • Spatial Memory

        He literally posts that one daily for at least the past two years. ROFL

        • Rick

          Can somebody limit the number of posts allowed by idiots? He monopolizes. Must be on the doles and not working. Who has time to post that much?

          • socalbeachdude

            Trust fund babies!

          • Voice Over

            You want censorship, in other words?

      • socalbeachdude

        Tomorrow will be here very soon.

        • Spatial Memory

          And your predictions will again be proven HILARIOUSLY INACCURATE !

      • FirstGarden

        Crying wolf doesn’t mean that the wolf never shows up.

      • DeathtoFiat

        I’ve been hearing for over 5 years that the end is nigh. And some people have been hearing the same for 30 or more. MICHAEL, you REALLY need to do something about this “socalbeachdude” spamming the crap outta your blog. It makes you look less credible, and discourages real comments.

        • Voice Over

          As I inferred above, I don’t think he’s spamming. He’s giving a considered & intelligent pov.

          That you may disagree does not make it spamming.

          Indeed, his comments may inspire more ‘real’ comments rather than deter them.

          But you’d need to be on top of your facts, lest the ‘ Dude blows you out of the water…

          Maybe that’s your concern?

        • socalbeachdude

          What utter nonsense, dude.

  • socalbeachdude

    Store closures wreak havoc on shopping malls

    Macy’s and Sears collectively announced 218 store closures within the last week in a move that could cripple dozens of shopping malls across the US — and the problem is only getting worse. On Sunday, The Limited, another mall-based retailer, suddenly shut down all 250 of its stores and laid off 4,000 employees.

    http://www.businessinsider.com/store-closures-wreak-havoc-on-shopping-malls-2017-1

    • Spatial Memory

      Retail= Zero Sum. Educate yourself.

      • socalbeachdude

        How is retail in any way a zero sum matter? That assertion just amplifies your extreme stupidity.

        • Spatial Memory

          Educate yourself. Your homespun guesswork is completely inaccurate and excellent comedy!!

          • socalbeachdude

            Your ignorance is beyond mind boggling.

  • Spatial Memory

    12 More PROOFS of complete lack of experience and knowledge of how economies and capital markets function followed by the usual bombardment of ADDITIONAL misnomers and misinformation by socal replying to comments seeking factual data and experience.

    Obviously neither has experience WITHIN the industry and likely NEVER bought nor sold ANY bonds whatsoever-

    Yet, despite factual data and daily market confirmations and rejectioning the misconceptions, CONTINUOUSLY berate many that have – extensively- including not limited to the United States Federal Reserve Banks and Chairwoman.

    • socalbeachdude

      Markets are TOTALLY IRRATIONAL but that mess is now in the process of being corrected.

      • Spatial Memory

        The diminished carry cost which enabled the protracted TIME CORRECTION with multiple cyclical price pull backs and CORRECTIONS have been continuous throughout the UPTREND juxtaposed to your IRRATIONAL IRRELEVANT INCORRECT guesswork and predictions. Possibly the most hilarious capital markets related parody EVER!!

        • socalbeachdude

          Absurdly false and incredibly stupid and bogus assertions.

  • Spatial Memory

    More importantly the REPEATED INACCURACIES and doubling down in both articles and comments seem to be “self reinforcing” and “evolving” despite CLEARLY being REJECTED by both CAPITAL MARKETS PRICE ACTION and REAL WORLD DATA over such a protracted timeframe.

    J.M.H.O.

    • socalbeachdude

      There is nothing even slightly inaccurate about any of the comments I make including posts of relevant key articles on financial matters.

      • Spatial Memory

        You’ve literally predicted HUNDREDS of crashes, collapses or calamities in nearly EVERY asset class and economic benchmark while data and price action have CONFIRMED otherwise. Had your efforts been 180 degree opposite or even balanced / adequately diversified you’d likely have had much more ‘constructive’ results since the price action / event / trigger and articulatory control process breakdown and aftermath. Nonetheless thanks for the laughs. 🙂

        • socalbeachdude

          Your blathering pumperism nonsense is really getting very tiring, dude, and I would suggest you start getting a clue about the enormous disasters going on in the US and global economies.

          • Spatial Memory

            Too funny!!!

          • socalbeachdude

            Not to those who lost most of their money by being in the stock markets back then.

        • socalbeachdude

          “Stock prices have reached what looks like a permanently high plateau and can only go UP from here…” — Irving Fisher, September 1929

          And then the markets did go UP…

          UP in FLAMES and SMOKE!

  • Spatial Memory

    Metrics used to benchmark and quantify traditional ‘Demand Economies’ may differ from those integral to ‘Command Economies’…. or intermediate ‘quasi-command economy’. Jmho

    • socalbeachdude

      What utterly bogus and inane nonsense.

  • Spatial Memory

    Markets appear to REMAIN focused of FRB BRILLIANCE in policy and abilities to navigate ahead of and away from potential LIQUIDITY TRAP – homeschooled “Economists” watch and learn…again. ROFL

  • Cinderella Man

    Socalbeachdude/Twaatblossom nobody reads your links…nobody cares stop regurgitating news that you can find anywhere…you are NOT special

    • socalbeachdude

      What utter nonsense.

  • Cinderella Man

    Socalbeachdude/Twaatblossom is an attention whore who gets off destroying a comment thread with their mindless boring rants and irrelevant articles that no one reads

    • SnodtBlossom

      DirtBag#1,,,GET A JOB!

      • Mark

        Hillary Clinton to “Rikers Island” 2017. Lock her up, Lock her up, Lock her up.

  • Spatial Memory

    QQQ triple top ???

  • Mr.Cipher

    Radio shack just bit the dust here recently.

    • socalbeachdude

      It’s their second major bankruptcy.

  • Rick

    But doesn’t the Fed action actually help Trump speed up the recession/crash on his watch? Weren’t you the one just a few weeks ago who said that would be the best scenario for President Trump? So by that reasoning, isn’t the Fed actually doing a good thing here?

  • Fred Smith

    The author wrote, “Just like in 2008, the Federal Reserve really doesn’t understand the economic environment.” IMHO, nothing could be further from the truth. The Fed knows exactly what they are doing. They hate America, liberty, freedom – and certainly the Trump agenda – and they are a large part of the globalist machine. They have already stolen trillions from America, and while there still might be more financial fruit for them to pick; I believe that they are going to crash our economy, so that they can blame it on Trump, and by association blame all patriotic Americans. The Fed should be abolished and kicked out of America and out of our government, just as our Founding Fathers kicked out the former National Banks in their day. Then restore the production of our money to Congress, as our Constitution mandates. Of course as I recall, the last time a President tried going against the Fed was JFK – and look what he got for his intention.

    • HadItWithThem

      You’ve been paying attention Fred:)

      • socalbeachdude

        Obviously not and neither have you, and I would suggest you learn about the Federal Reserve at:

        http://www.FederalReserve.gov

      • Fred Smith

        HadItWithThem: Thank you for your kind comment. I have actually been paying attention for decades.

    • socalbeachdude

      Absolutely false. There is nothing even slightly political about decisions made by the FOMC at the Federal Reserve which are all based on data points. The Federal Reserve certainly does not “steal” anything from anybody and is the single largest contributor each year to US government revenues as it rebates 94% of its annual profits – now amounting to about $100 billion a year – to the US Treasury for the benefit of its taxpayers.

      • Fred Smith

        Socialbeachdude: I have read this and your many other comments. It appears to me that you have a vastly different understanding of the Fed, counter to what has been reported ad infinitum for decades by thousands of journalists and authors. Might I recommend for enlightenment the classic tome “Creature from Jeckyl Island” by G. Edward Griffin? It is a real eye-opener, and there are many many others. As has been said, the mind is like a parachute – it only works when it’s open. Or beyond all of this, perhaps you are a paid disinformation government internet troll? As has been repeatedly reported, our government spends hundreds of millions, if not trillions, annually, spreading disinformation; and employs numerous individuals to do just that.

        • socalbeachdude

          That inane “creature” book is the VERY EPITOME OF BOGUS DISINFORMATION.

          That “creature” book was originally written by G. Edwards Griffin in 1994 and is nothing but a piece of bogus and blatantly false propaganda garbage and little else. Its absurd assertions have been thorough and totally debunked and what is left of the 1% of factoids remaining there are of no significance whatsoever and the entire point of the book is to promote fantastical and inane and false conspiracy theories about the Federal Reserve System.

          The Story Behind ‘The Creature From Jekyll Island,’ the Anti-Fed Conspiracy Theory Bible

          The Fed was secretly created to enact vicious cycles of genocide. Or so this popular book would have you believe.

          It’s the kind of conspiracy theory so all-encompassing that it explains the very roots of all modern American wars, depression, economic boom, and (most importantly!) the darkest, best-kept secrets of international banking.

          Typically, the Federal Reserve is a government entity that frustrated high schoolers in America are forced to learn about before entering adulthood and forgetting exactly what it is or why it exists. The Fed is our central banking system that was created at the tail end of 1913 as a response to a string of financial crises. It is responsible for implementing the United States’s monetary policy, and is routinely and aptly described as “boring.”

          It’s all fairly mundane and unsexy (though hugely consequential) stuff. The Fed doesn’t bomb anything, invade anything, or even tax anything.

          The fatal flaw in Griffin’s analysis and breathless fear-mongering is, as is the case with so many prevalent conspiracy theories, that it takes a grain of truth and turns it into a salt mine of utterly laughable BS.

          http://www.thedailybeast.com/articles/2015/11/26/the-story-behind-the-creature-from-jekyll-island-the-anti-fed-conspiracy-theory-bible.html

          The US government is in debt to the tune of nearly $20 trillion because CONGRESS is grossly profligate and financially irresponsible and that has nothing to do with the Federal Reserve, its operations, its policies, or its structure.

  • David

    when the Great crash comes & the Great Deppression 2 is underway those that are homeless & have had to learn to live without the comforts of life, new car every year, eating in fancy restaurants daily, loads of cash /credit will do just fine… the rich & spoiled will be committing suicide just like 1929 all over again.

  • Zlatko Milanovic

    “I don’t know the answer to that question, but clearly something very strange is going on…” …and I’m going to fan the flames of crazy conspiracy theories so the poorly educated readers on this blog will buy it – hook, line and sinker….

    • socalbeachdude

      Huh?

  • LIZ THE SHIZ

    this site should be named the “socalbeachdude’s mental collapse” and cut/copy/paste blog : VOTE NOW

    • SnodtBlossom

      Du Schwein. Du gemeine kleine Maden Du wertloser Dreck Wie sie in Texas sagen. Ich wette, du könntest nicht gießen! @ # $ Aus einem Stiefel mit Anweisungen auf der Ferse. Du bist ein Krebs. Eine Wunde, die nicht weggehen wird. Ich würde lieber einen Anwalt küssen als mit dir gesehen zu werden.

      Du bist eine Pendelmasse, ein gehendes Erbrochenes. Du bist ein spineless kleiner Wurm, der nichts als die tiefste Verachtung verdient. Du bist ein Ruck, ein Cad, ein Wiesel. Dein Leben ist ein Denkmal der Dummheit. Du bist ein Gestank, eine Abscheu, ein großer Saugen auf eine saure Zitrone.

      Sie sind ein blödender Fohlen, ein geronnener, taumelnder, mutierter Zwerg, der reich mit der Effluvia und dem Innereien verschmiert ist, die Ihre angebliche Geburt in diese Welt begleiten. Ein unverschämtes, blinzelndes Kalb, das für niemanden aussagekräftig war, das von den kotzenfischen, kichernden Tieren aufgegeben wurde, die dich gezeugt hatten und sich dann in der Anerkennung dessen, was sie getan hatten, töteten.

      • LIZ THE SHIZ

        I think your lederhausen is on too tight and they’re squeezing your weinerschnitzel !!!

      • Guest

        Ich Bin Madame President Hillary Clinton. Bwahahahahaha!!!!

      • Mark

        Hillary Clinton to “Petak Island” 2017. Lock Her Up, Lock Her Up, Lock Her Up.

      • Mark

        Impeach Madame President Hillary Clinton. Oh………………….wait…………….bwahahahahaha!!!

      • Mark

        Sie sind selbstmörderisch, suchen Sie Hilfe, während Sie noch können

    • socalbeachdude

      You should read the posts and start comprehending the financial system issues facing Americans today.

    • retired22

      Maybe this site pays this guy as a ringer to produce activity to bring in the advertisers & their money!

      • LIZ THE SHIZ

        I’ve been saying this for a long time “click bait”

        • socalbeachdude

          What utterly false and bogus assertions.

    • Voice Over

      Well, as a ‘lurker’ here for a while, I find socalbeachdude’s comments intelligent & well thought through (though not being American i don’t follow all of the intricacies of US personalities & politics).

      He does C & P but always ‘on topic’ – and I’ve found most of the links I’ve followed instructive & useful.

      And whilst he doesn’t resort to abuse, you can be sure you’ll get a pretty direct response if you mess with him…

      Keep it up ‘ dude!!

  • retired22

    Maybe the establishment elites,in which the Central Bank is a basic member,wants to wreck an already failing economy in order to wreck the Trump Administration?

    • Spatial Memory

      Remaining ahead of the curve of potential Liquidity Trap risks is imperative. Potential transformation back to Demand Economy ‘style’ parameters from Quasi – Command Economy may NOT be possible. After the protracted period of misallocating resources and lost R&D cycle(s), output gap compounding outstips natural / neutral real rate shenanigans. Jmho

      • socalbeachdude

        More meaningless mumbo jumbo from you, I see.

  • FirstGarden

    It’s a hit on Trump.

    • socalbeachdude

      Nope. The Federal Reserve has nothing to do with politics and is just moving the only 3 interest rates it sets to correspond with the yield (interest rate) on 3 month US Treasuries which is what it always does.

      • FirstGarden

        It’s true that the globalists are not primarily political.

        “Give me control of a nation’s money and I care not who makes the laws.” — Mayer Amschel Bauer Rothschild

        However, if the TPTB / NWO, in lockstep with the FED (not a U.S. agency) do not see “Make America Great Again” as fitting with their ultimate agenda, then I can see some cause in stifling the Trump administration. It depends on who’s giving orders to who.

        Your thoughts?

        • socalbeachdude

          The Federal Reserve does not “take orders” from anyone and makes all of its decisions by CONSENSUS OF THE 12 MEMBER FOMC (Federal Open Market Committee) which is comprised of the 7 members of the Federal Reserve Board Of Governors and 5 of 12 Federal Reserve Regional Bank Presidents.

          • FirstGarden

            “The Federal Reserve does not ‘take orders’ from anyone..”

            How do you know that?

          • socalbeachdude

            Because of the structure of the FOMC.

            Yellen: Partisan politics plays ‘no role’ in Fed decisions

            WASHINGTON—Federal Reserve Chairwoman Janet Yellen on Wednesday dismissed suggestions from Republican presidential nominee Donald Trump that the Fed is playing politics with its interest-rate decisions.

            Yellen, referring to prepared notes and not mentioning Trump by name, said the Fed doesn’t discuss politics at its policy meetings, nor does it take politics into account. Its decision to hold rates steady on Wednesday was based on economic factors, not political ones, she said.

            “I can say, emphatically that partisan politics plays no role in our decisions about the appropriate stance of monetary policy,” she said. “We are trying to decide what the best policy is to foster price stability and maximum employment and to manage the variety of risks that we see is affecting the outlook.”

            http://www.marketwatch.com/story/yellen-partisan-politics-plays-no-role-in-fed-decisions-2016-09-21?mod=MW_story_latest_news

          • FirstGarden

            I wonder what the fly on the wall hears.
            🙂

          • socalbeachdude

            The Federal Reserve has NOTHING WHATSOEVER to do with politics.

            Fed’s Mester: Politics never factor in decisions

            http://www.marketwatch.com/story/feds-mester-says-politics-never-a-factor-in-monetary-policy-decisions-2015-10-16?dist=afterbell

          • FirstGarden

            You seem to have implicit trust in what they say. I wish I could share such optimism.

  • “Who controls the issuance of money controls the government!” Nathan Meyer Rothschild

    June 13, 2016 Which Corporations Control The World?

    A surprisingly small number of corporations control massive global market shares. How many of the brands below do you use?

    http://www.informationclearinghouse.info/article44864.htm

  • Marc

    For goodness sakes man, make your mind up. It was a crisis because people, companies and the government are borrowing too much money, now it’s a crisis because people won’t be able to borrow enough money. I guess in your book, no matter what happens it’s all just one big crisis. Let’s all just PANIC! Lol.

    • K2

      My thoughts exactly.

  • Marc

    Just.block the idiot losers. All I see when they write is ‘this user is blocked’. It’s great

  • socalbeachdude

    TRUMP BUDGET TAKES AX TO WASTEFUL SPENDING…

    Trump’s ‘America First’ budget: President promises ‘a new chapter of greatness’ as he wields the ax across government to pay for the wall and the military

    President Donald Trump’s first budget blueprint lived up to the administration’s promise that it would be a ‘hard power’ document, slashing spending in every federal department except Defense, Homeland Security and the VA.

    Trump’s proposal makes significant cuts to the Health and Human Services’ and the State Department’s budgets to fund his border wall and the military build-up he’s been promising. State is being slapped with a nearly 29 percent reduction that’s intended for its foreign aid division, a 10.9 billion dollar decrease from the current fiscal year. HHS will lose out on $15.1 billion in funds, a 17.9 percent overall decrease, if Trump’s budget is approved in its current form by Congress.

    Trump is proposing the dramatic cuts to some agencies so he can put $2.8 billion more toward immigration enforcement in 2018, $2.6 billion of which is being set aside for his border wall, and appropriate an additional $54 billion to defense spending without adding to the federal deficit.

    http://www.dailymail.co.uk/news/article-4319866/Trump-calls-cuts-pay-wall-defense.html

  • socalbeachdude

    Why do you have such poor credit ratings?

  • socalbeachdude

    Especially to people like whackazoidal John McCain…

    MCCAIN UNCHAINED: RAND PAUL WORKING FOR PUTIN…

    http://www.thedailybeast.com/cheats/2017/03/15/mccain-rand-paul-is-now-working-for-vladimir-putin.html

    Rand Paul: McCain ‘Unhinged,’ ‘Past His Prime’…

    http://www.realclearpolitics.com/video/2017/03/16/rand_paul_john_mccain_unhinged_and_past_his_prime.html

  • socalbeachdude

    Trumponomics Will Collapse Under a Mountain of Debt

    Financial markets are heading straight into a perfect storm of central bank failure, bond market carnage, a worldwide recession and a spectacular fiscal bloodbath in Washington. Investors should be heading for the hills with all deliberate speed.

    What is going to stop Trumponomics cold is debt — roughly $64 trillion of it. That’s what is crushing the American economy, and until the mechanics of its relentless growth are stopped and reversed, the odds of achieving and sustaining the 3–4% real economic growth that Trump’s economics team is yapping about is somewhere between slim and none.

    Here’s the newsflash. The nation’s monumental debt problem wasn’t newly created by the Obama Administration or the fact that Nancy Pelosi never met a spending program she couldn’t embrace. The last eight years have surely made the problem far worse and the Democrats are culpable without question.

    But quite frankly the debt problem is a thoroughly bipartisan creation that is completely immune to the fact that the White House and both sides of Capitol Hill are now under GOP control. In fact, the nation’s debt affliction actually goes back to August 1971 when Nixon closed the gold window and launched the world on the current destructive experiment with massive central bank driven credit expansion.

    However, it was after 1980 that the wraps really started coming off the debt monster that was spawned by the world’s unshackled central banks. In that context, Paul Volcker was the last honest central banker, and with Ronald Reagan’s acquiescence he did break the back of the virulent commodity and consumer goods inflation that had been unleashed by his immediate predecessors during the 1970s.

    Total U.S. public and private debt outstanding in Q4 1980 amounted to just $4.8 trillion or slightly more than 150% of the $3.0 trillion level of GDP.

    Since then, total debt has exploded to nearly $64 trillion or 13X. It now stands at 350% of GDP, meaning that these two extra turns of debt (3.5X vs. 1.5X) amount to $35 trillion and constitute a giant economic millstone on the American economy.

    Accordingly, there is not a snowballs chance in the hot place that policies designed to pile still more debt on top of the mountains we already have can rejuvenate the U.S. economy. The key to recovery is firing the debt addicted money printers at the Fed, not passing the baton to fiscal stimulators on Capitol Hill.

    https://dailyreckoning.com/trumponomics-will-collapse-mountain-debt/

    • John

      The Federal Reserve debt money scheme is about to fall flat on its face! When we had a gold and silver money standard, new money was created when new gold and silver ore supplies were found. That’s why we had paper money that could be “backed by precious metals”. This was a standard like an inch or a pound are units of measure. That new ore was produced with HARD WORK! No debt was formed when new coins were produced from it. Fed debt money is nothing more than a bunch of gangsters creating credit out of nothing and LOANING it into the economy in the form of the “PRINCIPLE” of a loan. No one created the INTEREST to pay that loan. The federal government creates the illusion that people are paying their principle plus interest loans by deficit spending to cover the new interest costs. The problem is that now the government can’t possibly pay the interest without “borrowing” even more money and spending it into the economy. Money has to be created without debt in order for “debts” to be paid in full. Abe Lincoln created the United States Notes rather than borrow from the Rothchild central bankers to finance the American Civil War. Lincoln’s US Notes lost out in a political war to the central bankers because the bankers bluffed that they could back their currencies with gold and silver, and Lincoln’s notes couldn’t, causing their eventual failure. What are the central bankers backing their currency with now? Nothing, except chaos if we don’t continue with their scheme? It’s amazing the way Obama’s “Quantitative Stimulus” could give the bankers $85 billion a month for 6 and a half years, and everything was supposedly fine and dandy with his economy. But if Trump wants to build a $12 billion wall, we just “don’t have the money”. The challenge is to create new money that doesn’t directly affect the free market system. An example would be to create US Notes to pay for our disabled veterans. Who would want to be in their position?

      • socalbeachdude

        What totally false and utterly absurd and ignorant assertions. All currencies are backed by the current and future assets and labor and production of the citizens of the country issuing its currency. “Backing” any currency with any thingy like beaver pelts, or racoon pelts, or glass beads, or bird feathers, or metals, or whatever is UTTER NONSENSE and incredible stupidity.

        All money has a time value which is called INTEREST. Nobody – including governments – can run up debt to perpetuity without properly managing it and the repayment of that debt, but that issue in the US has nothing whatsoever to do with the Federal Reserve, but rather the US government and other profligate borrowers in the US which have run up more than $67 trillion of debt in the USA.

        • John

          The American people have had enough of the bullsh&t from the shills of the Fed. Real money of gold and silver coins will be accepted by people of any language, Your line of BS will be rejected as easily as hitting the DELETE key as to your account. The government backing of the miracle of compound interest is only guaranteeing the part people owe to the central bankers, not the part they think they are going to collect! Too bad the confiscation of personal weapons wasn’t successful during the last administration. Debt slaves AIN’T gonna happen in the USA!

          • socalbeachdude

            What American people are you talking about? All intelligent American people know and understand the huge importance of the fine Federal Reserve in the United States. Your notions regarding interest are totally bogus and you simply do not understand how money is created and expanded in an economy through the transactions in an economy.

            As to the federal government debt the representatives of the American people created it and the American people are now stuck with that debt and the interest on that debt regardless as to how high interest rates rise on it.

            The best thing to do now is to dramatically cut federal spending starting with the absurd amount spent on SOCIAL WELFARE SPENDING which accounts for 63% of the annual federal budget. I would suggest that all federal spending be ROLLED BACK TO THE $2.7 TRILLION A YEAR LEVEL OF 2007 in lieu of today’s $4 trillion a year federal budget.

      • littlebit43

        Since when has “Don’t have the money” ever stopped them.

        • John

          “Don’t have the money” is what democrats have to say about republican policies, not the other way around!

    • Nick Reynolds

      What is crushing America’s economy is low paying jobs, a lack of americans that can qualify for hi-tech jobs, and the fact that economic and money expansion is based on debt. The country and the people are strangling in debt.
      What goes up, must go down…simple economics

  • socalbeachdude

    NPR will soon have its federal funding entirely cut!

    • Rick

      Let’s hope so.

  • socalbeachdude
  • socalbeachdude

    Countdown To Crisis – David Stockman

    During the run-up to the election, the deep state bureaucrats at the Treasury built up what I described Friday as Hillary’s debt ceiling “war chest,” sending the cash balance to $425 billion shortly before election day.

    By contrast, shortly after the election the Treasury stopped selling new debt, and began to actually pay down maturing bills and notes. The Treasury has burned over $338 billion of cash since then. That depleted Hillary’s war chest since she wouldn’t be around to benefit from it.

    Or rather, it pumped a veritable tsunami of cash into the canyons of Wall Street.

    In a word, the Treasury took its boot off the neck of the bond dealers, thereby enabling the 15% frolic higher in the stock market that has become known as the Trump Reflation Trade.

    And that gets me to the countdown to crisis beginning March 15…

    https://dailyreckoning.com/countdown-to-crisis/

  • aldownunder

    As of this moment 88 of the180 posts on this article = socalbeachdude
    A bit over the top Dude

  • 1234

    you have been predicting an economic collapse for about 10 years now,…where is it?. I could of made about 15% interest by now if I would have keep my money in the market

    • aldownunder

      Micheal only supplies information…..not financial advice
      What you decide to do is your business

      • Spatial Memory

        One man’s information is another man’s inverse trade data source

    • socalbeachdude

      Equities (stocks) do not pay interest and the yields (interest rates) in the bond markets have been very low and are only now rising. Any money in equities is always at risk of up to 100% losses. Risk of crashes is now at the highest levels since 1929 for equities, bonds, commodities, and real estate.

      • Spatial Memory

        Stocks in general do pay dividends and sophisticated bond or fixed income participants understand bond swaps and current yield: tax event benefits. Your homespun misconceptions are hilarious !!!

        • socalbeachdude

          Stocks do not pay interest and are always at risk of up to 100% losses of any funds you put in them as each and every equity prospectus clearly discloses.

      • K2

        You can always pull out if its going to crash.

    • aldownunder

      Do you stay with the ‘share market always goes up’ story and remain overweight in shares…or opt to protect capital in a more defensive portfolio (one with higher weightings of cash and term deposits) and wait for better buying opportunities?
      To answer these questions, you need to ignore the investment industry’s propaganda and make your own informed choices. The quality of your retirement depends on it.

      • Spatial Memory

        Traditionally one hundred minus your age is percentage equity allocation. Jmho

    • Spatial Memory

      The shelf life on his prep can goods expiring before any meaningful Correction!

    • K2

      Well said. This is why i feel angry when people try to talk other people away from investing in the stock market just because of their own beliefs.

  • socalbeachdude

    Bill Gross: This could cause ‘hell’ to break loose in the global bond market

    While the Federal Reserve is gradually raising interest rates in the U.S., the actions by two other central banks are actually the most important thing to watch right now, bond guru Bill Gross told CNBC on Wednesday.

    And it is something that could possibly wreak havoc on the bond market, he said.

    That’s because monetary policy in both Europe and Japan is causing international investors to buy U.S. Treasurys, he explained.

    http://www.cnbc.com/2017/03/15/bill-gross-this-could-cause-hell-to-break-loose-in-the-global-bond-market.html

  • Spatial Memory

    yw:)

  • Perhaps we should be asking why a small cabal of PhDs is setting rates in the first place?

    • Spatial Memory

      Got any better ideas? – send your resumes to 1600 Pennsylvania Ave and 20+ Construction Ave DC – ASAP!

      • Let a truly free market establish rates?

        • Spatial Memory

          No person alive today has ever experienced one single day of truly free markets. For now automated financial engineering and ‘dovish’ carry costs likely remain focused on nominal natural rates and real natural rates / output gap until an exogenous event knocks the stuffing out that piñata!

          • socalbeachdude

            Laughably false!

        • socalbeachdude

          THEY DO AND THEY ARE CALLED THE US TREASURIES MARKETS.

    • socalbeachdude

      The Federal Reserve only sets 3 interest rates none of which matter a hoot in the US economy and all interest rates that do matter are KEYED OFF THE YIELDS (INTEREST RATES) OF US TREASURIES in the $13 trillion a year US Treasuries markets.

  • brad

    I agree with almost all of your points, but rates should rise (should have been years ago back to at least 2%) and we should go through a market correction and perhaps a recession. Postponing the day of reckoning just makes it that much worse when it happens – the problems of subprime should have been slowed stopped YEARS before crash in 08!

    Sadly, Fed learned nothing from that experience except to print more $ and DEBT. This time global economy way more leveraged than last crisis. Without rates rising we and rest of world are following Japan – no growth for decades as we supposedly work thru ZOMBIE debt across the globe.

    • socalbeachdude

      The Federal Reserve DOES NOT CREATE ANY DEBT at all and never has.

  • Richard O. Mann

    Please return to your seats. Be sure your seat belt is buckled, your seat back is in the upright position and your tray is up and locked. We are expecting a rough landing. Pay no attention to those crew members who are exiting the aircrafts doors with parachutes. Nothing to be concerned about. We hope you have enjoyed flying with us.

  • chekmate2

    I find it hard to get upset about a .25 point raise in the interest rate. I’m older than most of you so I remember what it used to be like. I bought my first house in 1985. The interest rate was 15.5%. My credit card had an interest rate of 19%. My savings account was paying me 14%. I was able to purchase a new Chrysler Newport with cash. No, I can’t get too upset. Maybe people should think before they go in to so much debt that they can’t get out.

  • Pete Okuhira

    “Bonds have been falling like a rock since Donald Trump’s election victory, and we are not too far away from a full-blown crisis.”

    Define irony. Let’s order pizzas from Pizza Hut and some apple juice and just a movie from Netflex.

    • socalbeachdude

      Huh?

  • CactusPatch

    Let’s see, in 2008 the fed helped get Obama, with his message of hope and change, elected. In 2012, what political mischief do you suppose they are up to?

    • socalbeachdude

      The Federal Reserve did no such thing at all and has nothing whatsoever to do with partisan politics.

      • CactusPatch

        Say, I’ve got some ocean front property in Arizona. Are you interested in a great deal on it?

        • socalbeachdude

          You are absolutely clueless regarding the Federal Reserve and I would suggest you learn about this very fine central bank at:

          http://www.FederalReserve.gov

  • jj

    Actually it does make sense as rates have been too low for too long
    which has devastated savors and pensioners and this is capital that
    would normally flow into the real economy which is one reason why GDP
    has been so low.
    Another reason is that there are trillions in pension funds that are in serious trouble because there is no yield and some have already started to cut benefits to retirees and this is even more capital that is being removed and not flowing into the real economy.
    The FED is going to move rates up slowly and over a period of time.
    The Idea that the FED is intentionally attempting to collapse the economy and make Trump look bad is nonsense. Most people know the debt and other problems that he inherited from Obama and the FED and the democrats would be blamed along with those republicans who voted for the debt increases and Obamacare.
    Again the S&P P/E ratio peaked in the 87 crash at 50/1, dot com bust 46.5/1 and in the 2008/9 crisis at 122/1. Today we are only at 24/1 so with the S&P at this ratio level the Dow cannot collapse. The worst is a normal correction before moving higher.

    • socalbeachdude

      This is the most overvalued stock market on record — even worse than 1929

      This is the most dangerous and overvalued stock market on record — worse than 2007, worse than 2000, even worse than 1929.

      Or so warns Wall Street soothsayer John Hussman in his scariest jeremiad yet.

      “Presently, we observe the broadest market valuation extreme in history,” writes the chairman of the cautious Hussman Funds investment group, “with the steepest median valuations on record, and the most reliable capitalization-weighted measures within a few percent of their 2000 peaks.”

      http://www.marketwatch.com/story/this-is-the-most-overvalued-stock-market-on-record-even-worse-than-1929-2017-03-13?mod=MW_story_top_stories

  • socalbeachdude

    What utter nonsense. The Federal Reserve does not set any interest rates that matter a hoot in the US economy and simply FOLLOWS THE INTEREST RATES SET IN THE US TREASURIES MARKETS for the only 3 interest rates they set and they are FAR BEHIND THE CURVE at this stage in doing that.

  • Warren

    The Federal Reserve IS “The Bilderberg Group” (NWO) and for the first time in 53 years they do not have a Puppet in Office does anyone believe they want Trump to look good???

    • socalbeachdude

      Absolutely false. The Federal Reserve has nothing whatsoever to do with the the Bilderberg Group at all.

  • Ed

    1 Reason Why The Federal Reserve May Have Just Made The Biggest Economic Mistake Since The Last Financial Crisis – Because they think that Trump will be blamed.

    • socalbeachdude

      The Federal Reserve did not make any mistake at all in raising the only 3 interest rates they set other than not doing that 3 or 4 or 8 years ago.

  • themacabre

    Rate increases are way over due…should have happened years ago…one reason is the precarious positions of pension funds nation wide.

    • socalbeachdude

      Indeed, the Federal Reserve should have raised the only 3 interest rates it set – none of which have any impact at all on the US economy except for “perception” long ago- and in fact, should never have decreased the Federal Funds Rate from 5.25% starting in August 2007.

      However, pension funds BENEFIT FROM INTEREST RATES MOVING UP as then earnings from US Treasuries and other interest sensitive instruments go up. Presently most pension funds base their funding for benefits on an assumption of around 8% per year earnings which is absolutely impossible to achieve in a 1% of less interest rate environment which is a key reason why so many pension funds are in huge trouble and failing.

      Collapsing pensions will fuel America’s next financial crisis

      http://www.marketwatch.com/story/collapsing-pensions-will-fuel-americas-next-financial-crisis-2017-03-14

  • socalbeachdude

    1) GDP growth has nothing whatsoever to do with the only 3 interest rates set by the Federal Reserve and they have no affect on GDP. GDP growth never reached more than 3% during any of the prior 8 years from 2008-2016.

    2) The only 3 interest rates set by the Federal Reserve are IRRELEVANT to the flow of credit and demand for borrowing is near record lows with US banks having loans outstanding only equal to around 67% of the amount of customer deposits.

    3) Auto loans will continue to increase in default rates because they were made for high amounts of unqualified buyers and there is very little collateral value in the vehicles on which the loans are based.

    4) The only 3 interest rates set by the Federal Reserve have nothing whatsoever to do with retail sales and the fact of the matter is that credit card rates have been at RECORD HIGH LEVELS of around 14% to 24% for a very long time for anyone even with excellent credit who carries any sort of balance on their credit card(s).

    5) The number of distressed retailers will continue to decrease quite substantially as many of them simply go bankrupt and out of business including some rather large department stores.

    6) There has been no “recovery” at all since the Grand Global Depression began in August 2007 and it will simply continue to intensify in the years ahead.

    7) Anyone who says they can’t write a $500 check is outright lying as average rents and house payments alone are now more than $1000 per month nearly everywhere with rents and housing payments being much closer to $5000 per month in major urban areas including throughout Southern California.

    8) The “crashing bond market” is PRECISELY WHERE ALL INTEREST RATES THAT MATTER IN THE US ECONOMY ARE SET and bond prices are inverse to yields (interest rates). The more that bond prices crash the higher the yields (interest rates) go and the US TREASURIES MARKETS ARE WHERE ALL INTEREST RATES IN THE US ECONOMY ARE DIRECTED KEYED OFF.

    9) The debt ceiling will either be SUSPENDED AGAIN or increased to $24 trillion or higher and likely a total non issue on an immediate standpoint, but is certainly a worrisome issue as the higher that yields (interest rates) move on US Treasuries the more interest the US government will have to pay on its debt.

    10) US government revenues in terms of tax collection are at RECORD HIGH LEVELS presently in 2017 and US government debt has in fact decreased by more than $60 billion since the Trump inauguration in January 2017.

    11) Corporate insiders are cashing out of stocks at record high levels and are astutely aware of the trillion of dollars in corporate financed stock buybacks of shares that are the primary reason for equities (stock) markets being at preposterously elevated and unsustainable levels.

    12) Likely we will see a trade war on certain classes of goods but that has nothing whatsoever to do with the only 3 interest rates set by the Federal Reserve but rather to do with the huge trade imbalances in the world result in a massive US TRADE DEFICIT that is growing enormously as exports continue to decline and imports into the US continue to rise.

  • socalbeachdude

    There are 3 components to interest rates.

    Interest rates are comprised of:

    1) real rate (typically around 3% historically)

    2) inflation adjustment (now correctly at zero)

    3) risk of default (now rising astronomically)

    The risk of DEFAULT is higher than ever and will continue to rise.

    All interest rates that matter to the US economy are SET BY THE US TREASURIES MARKETS which are a $13 trillion a year market. The reason that yields (interest rates) are so low there is because DEMAND FOR US TREASURIES IS AT RECORD HIGH LEVELS and the greater the demand the lower the yields (interest rates) as prices of bonds are inverse to their yields.

  • Leif Erickson

    Go back to the gold standard. End of discussion.

    • socalbeachdude

      The so-called “gold standard” in the US was a very brief 60 year totally failed experiment in the US from 1873 until 1933 at which time it was totally discarded and private ownership of any form of bullion gold for other than industrial uses was made illegal.

      The total value of all of the 180,000 or so metric tonnes of gold ever mined – even at today’s preposterous elevated levels for that fungible commodity – is less than 1% of all of the assets in the world and 70% of all gold is in the form of privately held jewelry widely distributed among the 7.5 billion people of the world. As a financial asset, gold is totally irrelevant and just a tiny little speck of dust.

  • socalbeachdude

    Huh? As I said, the Federal Reserve has nothing whatsoever to do with Bilderberg.

  • End the Federal Reserve

    the federal reserve is neither federal nor has any reserve. they are private and concerned with themselves above all. end the federal reserve is the first step to cleansing our country for the federal reserve is behind most of the world’s problems at the higher end.

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