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Tag Archives: Depression

The Reason For So Many Lies: He Finally Realizes He’s In Way Over His Head

This is not a man who’s comfortable thrust into a position of leadership. Say what you want about Ben Bernanke, and there’s a lot that still needs to be said, he at least carried on with the arrogance through thick and thin (almost entirely the latter). Jay Powell sounds like a boxer who just realized the lightweight he thought he was fighting put on 75 lbs of muscle and has been practicing by sparring with world champs.So, when he still says he’ll be the champ the words instead come out of...

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America’s Bearish Day At The Beach

Summary  We are growing increasingly bearish on America’s prospect to arrest the spread of COVID-19 due to growing restlessness over the shelter-in-place rules leading to quarantine fatigue, weak political leadership, and lack of uniform measures to mitigate the spread across, and within, all fifty states. This increases the probability that only herd immunity, 60-70 percent of the U.S. population being infected, will arrest the coronavirus That would put COVID deaths north of 600k,...

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The Real Diseased Body

Another day, another new Federal Reserve “bailout.” As these things go by, quickly, the details become less important. What is the central bank doing today? Does it really matter?For me, twice was enough. All the way back in 2010 I had expected other people to react as I did to QE2. If you have to do it twice, it doesn’t work. And if Ben Bernanke grew so concerned he felt a second dose was required…Put another way, if a central bank keeps doing “bigger” things, that isn’t a basis for...

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Shedlock: Recession Will Be Deeper Than The Great Financial Crisis

Economists at IHS Markit downgraded their economic forecast to a deep recession. Please consider COVID-19 Recession to be Deeper Than That of 2008-2009 Our interim global forecast is the second prepared in March and is much more pessimistic than our 17 March regularly scheduled outlook. It is based on major downgrades to forecasts of the US economy and oil prices. The risks remain overwhelmingly on the downside and further downgrades are almost assured.IHS Markit now believes the...

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Shedlock: Fed Trying To Save The Bond Market As Unemployment Explodes

Bond market volatility remains a sight to behold, even at the low end of the curve. Bond Market Dislocations Remain The yield on a 3-month T-Bill fell to 1.3 basis points then surged to 16.8 basis points in a matter of hours. The yield then quickly crashed to 3 basis points and now sits at 5.1 basis points. The Fed is struggling even with the low end of the Treasury curve. $IRX 3-Month Yield Stockcharts shows the 3-month yield ($IRX) dipping below zero but Investing.Com does...

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Shedlock: Supply And Demand Shocks Coming Up

Dual economic shocks are underway simultaneously. There are shortages of some things and lack of demand for others. Rare Supply-Demand Shocks Bloomberg has an excellent article on how the Global Economy Is Gripped by Rare Twin Supply-Demand Shock. The coronavirus is delivering a one-two punch to the world economy, laying it low for months to come and forcing investors to reprice equities and bonds to account for lower company earnings.From one side, the epidemic is hammering the...

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Dallas Fed President Sees “No Move” In Fed Funds Rate

Dallas Fed President Robert Kaplan made some interesting comments today on interest rates, repos, and the coronavirus. Dallas Fed President Robert Kaplan was on panel discussion today at the University of Texas McCombs School of Business on the “2020 Business Outlook: Real Estate and the Texas Economy” in Austin, Texas. Bloomberg Econoday Synopsis Dallas Fed President Robert Kaplan is neutral right now on monetary policy, saying neither a rate cut nor a rate hike are necessary in...

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Recession Arithmetic: What Would It Take?

David Rosenberg explores Recession Arithmetic in today’s Breakfast With Dave. I add a few charts of my own to discuss. Rosenberg notes “Private fixed investment has declined two quarters in a row as of 2019 Q3. Since 1980, this has only happened twice outside of a recession.” Here is the chart he presented. Fixed Investment, Imports, Government Share of GDP Since 1980 there have been five recessions in the U.S.and only once, after the dotcom bust in 2001, was there a recession...

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Gold: How High Will It Go In 2020?

Gold broke out of a six year consolidation. Things look up in 2020. Gold Monthly Chart 2004-Present Gold Monthly Chart 2010-Present Smart Money Shorts I ignore short-term COT “smart money” warnings although I would prefer there to be fewer bulls. For discussion of “smart money“, please see Investigating Alleged Smart Money Positions in Gold. Pater Tenebrarum at the Acting Man blog pinged me with this idea: The only caveat remains the large net speculative long position, but...

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Hussman Agrees With Powell: It’s Not QE4

A debate over a sudden dramatic surge in Repos is raging. Is it or isn’t it QE4? Organic Growth On October 9, Powell discussed “Organic Growth” of its balance sheet. “Going forward, we’re going to be very closely monitoring market developments and assessing their implications for the appropriate level of reserves,” Powell said at a news conference. “And we’re going to be assessing the question of when it will appropriate to resume the organic growth of our balance sheet.” Not...

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