Debt Bomb Archive
It’s a good thing that the BLS ignores things like the recent rise in real estate and gas prices when it generates its official inflation numbers… Why? Because if the BLS didn’t do this we might actually see that inflation is exploding higher. This is not conspiracy theory, it is fact. And if you don’t
Stocks are now in very serious trouble. The S&P 500 has fallen to test its “election rally” trendline. If the market breaks down here, there’s essentially one giant “air pocket” down to 2,200 or so. The bad news is that high yield credit (HYG), which leads the S&P 500, has already broken its respective trendline.
As we noted yesterday, the world’s Central Banks have begun sending signals that the price of money in the financial system (bond yields) is going to be rising. Why is this a big deal? Because globally the world has packed on $68 TRILLION in debt since 2007. And ALL of this was issued based on
Since 2008 the financial media has been proclaiming that the US was in a “recovery.” This argument was used to justify the insane monetary policy of the Federal Reserve, which maintained ZIRP for seven years and spent over $3 trillion in QE. Well, it turns out there was no recovery to speak of when it
Corporate profits are rolling over again. Two years ago, corporations posted their first year of negative profit growth since the Great Crisis. We had a bounce from those depressed levels, which suckered a lot of investors into believing that fundamentals were improving. They were wrong. That bounce has now ended. Year over year profits are
SubPrime 2.0 is proving far worse than even we suspected. If you’ve not been following this story, our view is that the auto-loan industry is Subprime 2.0: the riskiest, worst area in a massive debt bubble, much as subprime mortgage lending was the riskiest worst part of the housing bubble from 2003 to 2008. In
The election night bull market trendline is about to break. The only reason stocks have held up is hype and hope for Trump’s economic agenda. With the entire MSM, establishment shills, and deep state operatives trying to derail this, the market is about to lose this prop. More worrisome for the financial system: the long-term
Janet Yellen is playing with matches next to a $20 Trillion Debt Bomb. During her speech at the Gerald R. Ford School of Public Policy in Michigan, Yellen stated that the biggest risk to monetary policy is for the Fed to “get behind the curve” regarding inflation. To that end, the Yellen Fed has already
Globally bonds are collapsing. Germany’s 10-Year Bund has seen yields spike out of their downtrend. As have Japan’s 10-Year Government Bonds. Long-Term US Treasuries have taken out their trendline. As have Junk Bonds. Folks, the bond markets are flashing DANGER DANGER. Globally the bond bubble is now well over $100 Trillion. And to top it
For over six years, the markets have been moving based on Central Banker actions and words. The first phase (2009 to 2013) was dominated by action (ZIRP and QE). The second phase (2013 to the present) was increasingly reliant on words (verbal intervention) as most Central Banks had by then used up 90% of their
As we outlined last week, the bursting of the bond bubble has begun. CNBC and the financial media may spend 99% of their time talking about stocks, but bonds are the single most important issue for Central Banks. When you consider everything in the context of the bond bubble, every Central Bank policy begins to
Last night the Bank of Japan implemented Negative Interest Rate Policy, or NIRP. It is the second Central Bank to do so. The European Central Bank or ECB first went to NIRP in June 2014. Thus, between Japan and Europe, over 20% of the world’s GDP is being managed by a Central Bank with NIRP.
As we wrote earlier this week, bursting of the bond bubble has begun. The decision by Central Banks to “inflate” the system’s debts away post-2008 has resulted in the misallocation of trillions of Dollars of capital. The worst offenders were Chinese corporates. China has created the single largest mountain of bad debt in the world.
The bursting of the bond bubble has begun. As I’ve outlined previously the primary concern for Central Banks is the bond bubble. CNBC and other financial media focus on stocks because the asset class is more volatile and so makes for better content, but the foundation of the financial system is bonds. And bonds are
Central Bankers are flummoxed. Having cut interest rates over 600 times since 2009 (and printed over $15 trillion), they’ve yet to generate the expected economic growth. Despite these failures, the ECB, and the Bank of Japan are currently engaging massive QE programs. The Fed is the only major Central Bank not rapidly expanding its balance
Yesterday, the Fed has hiked interest rates from 0.25% to 0.5%. It is the first rate hike in 10 years. And it is now clear that the Fed is not only behind the ball in terms of raising rates… but that it has now primed the financial system for another 2008-type meltdown. By way of
The global bond bubble has begun bursting. This process will not be fast by any means. Central Banks and the political elite will fight tooth and nail to maintain the status quo, even if this means breaking the law (freezing bank accounts or funds to stop withdrawals) or closing down the markets (the Dow was