About a year ago, Argentina – which has inflated away and/or defaulted on its currency every few decades for the past century – issued 100-year government bonds. And the issue was oversubscribed, with yield-crazed developed-world institutions throwing money at the prospect of a lifetime of 7% coupon payments. A contemporaneous media account of the deal: […]
A recurring pattern of the past few decades involves governments promising to limit their borrowing, only to discover that hardly anyone cares. So target dates slip, bonds are issued, and the debts keep rising. This time around the timing is especially notable, since eight years of global growth ought to be producing tax revenues sufficient […]
US equities have entered the final, blow-out stage of their bull market. As in 1999 and 2006, investors have decided that it’s different this time and are willing to buy at pretty much any price. Like those previous bubbles, today’s will end badly, probably in 2017. Gold, on the other hand should do just fine.
The world’s central banks clearly have no idea what they’re doing. Yet they keep on making threats, promises and predictions, most either nonsensical or contradictory, while acting in ways that make their countries’ problems worse rather than better. The end of their credibility is in sight.
Brexit is dominating this week’s headlines, but the event itself is less important than what it signifies, which is the increasing loss of faith in governments and central banks. Voters no longer trust big institutions to act in their best interest and are voting for alternatives of various kinds. When this lack of trust spreads […]
“Of course there are true copper bottomed mistakes, like spelling the word “rabbit” with three m’s, or wearing a black bra under a white blouse, or, to make a more masculine example, starting a land war in Asia.” — John Cleese We all make mistakes, but some are bigger than others. An example of a […]
The Panama papers claim more victims. US growth slows further. Corporate earnings are still falling. Gold continues to shine, with both central banks and individuals buying it aggressively. Oil jumps, the yen soars and the dollar falls. The Economy 3/09 The new danger from derivatives – Bloomberg 3/09 The new danger from derivatives – Bloomberg […]
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It seems that at least some OPEC members are starting to panic: War of words breaks out among OPEC members (CNN Money) – Is the pain of low oil prices becoming unbearable for OPEC? After watching the price of crude oil collapse by more than 65% to a 12-year low, there are signs that OPEC […]
When oil prices fell out of bed last winter there was much hand-wringing over the fate of the former beneficiaries of high-priced crude. Trillions of dollars of junk bonds issued by frackers, for instance, might default, oil field services companies could fail, and layoffs in the oil patch might swamp the nascent employment recovery. Some […]
Reporters and their editors (and the corporations that employ them) have the power to shape readers’ perceptions by, for instance, choosing what fact to put first in a story or which expert to quote in what context. But the most powerful tool is the simplest: the headline. Because many people read only that, and many […]
The following chart tells two stories. The first is that the deficit spending and debt monetization of the past few years has calmed the markets. Volatility (more accurately fear), as measured by the VIX index of S&P 500 options, has meandered back below 20, implying that most financial market players are pretty relaxed about the […]
Film maker Mark Dice has been having some fun lately at Americans’ expense by wandering around with a camera and microphone, asking people questions that the typical high school freshman would know – if they lived in a country that had its act together. Here’s a video where he asks a lot of healthy-looking, seemingly-non-brain-damaged […]
To understand how close many US universities are to catastrophic failure, let’s start with the story of Robert (not his real name, but all the rest is true). He’s 19, a freshman at a state university, a smart kid with eclectic interests but no sense of what he wants to be when he grows up. […]
In market parlance, volatility is another word for fear. That’s why a volatility index like the S&P 500 VIX Short-Term Futures — aka the VIX — rises when stocks fall but falls when stocks spike. Lately, the VIX has been sending an all-clear signal by gradually falling. It’s not at record lows, but it is […]