Bullard: Fed will act if economy weakens further

Eric De Groot at Eric De Groot - 8 minutes ago

QE to ∞ (infinity) = QE(1)+QE(2)+QE(3)...QE(n) as the economy weakness and social unrest organizes across the globe. Headline: Bullard: Fed will act if economy weakens further (Reuters) - The Federal Reserve will act if the economy weakens further and has the tools to do so, a top Fed official said on Friday. St. Louis Fed President James Bullard said he expects the economy to grow... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]





NEIN, NEIN, NEIN, and the death of EU Fiscal Union

David Stockman: Blame The Fed!

David Stockman, former US Representative and Director of the Office of Management and Budget under Reagan, does not mince words. He sees the monetary systems of the world coming apart. How did we get here? He identifies the root cause as the intentional over-leveraging of world economies by central planners in a misguided effort to enjoy growth without consequence.

I blame it on the Fed. I blame it on the 1971 decision by Nixon to close the gold window and let the dollar float. Because out of that has evolved -- or morphed -- a central banking policy in the world that absorbs unlimited amounts of government debt. And so we went on what I call the "T-bill standard" or the "federal debt standard." And the other central banks of the emerging mercantilist Asian economies -- Japan, Korea, and now, especially, the People’s Printing Press of China -- have absorbed this massive emission of debt that otherwise would’ve created powerful negative consequences that would’ve forced politicians to act long ago. In other words, higher interest rates, pressure for inflationary monetary policy, and the actual appearance of price inflation. But because all the bonds on the margin were being absorbed by the central banks, we got away for twenty or twenty five years with “deficits without tears.”

And he's just getting started. The only thing more impressive than Stockman's CV of insider roles in public economics and private finance is his talent for colorful metaphor.

Reuter Video Interview: Global Economy & markets

Admin at Marc Faber Blog - 1 hour ago

Latest video interview, Reuters. *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

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Gold Correction: Watching 1,500/oz Support

Admin at Marc Faber Blog - 1 hour ago

'If $1,500/oz support doesn't hold, Gold will bottom out at $1,000 - $1,200' - in CNBC Europe *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

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Can Gold Trade Over 10,000?

Admin at Jim Rogers Blog - 1 hour ago

Gold back in the ‘70s has not gone up ten years in a row. It has only gone up two years, three years, four years max. So things are all a little bit different now than what they were then. Can gold trade at over 10,000? Of course it can and it might. But not this year. - *in GoldSeek radio* Related: SPDR Gold Trust ETF (GLD), Novagold (NG), Newmont Mining (NEM), Barrick Gold (ABX) *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The F... more » 

Morgan Stanley CDS - Is China Part Of The Problem?

The move in Morgan Stanley CDS has been grabbing some attention.  It has moved wider than any of the other banks.  Its exposure to French banks in particular has been part of the reason.  Potential hedging of counterparty exposure has also been listed as a reason. (Once again I can’t help but wonder why derivatives in general, and CDS in particular, didn’t get forced into clearing or exchanges after Lehman). I don’t know whether Morgan Stanley is rich or cheap at these levels, but I think there is more digging that needs to be done and it should focus on Asian exposures because that seems to correlate best to the recent moves.

Corn Price Plunges To Lowest Since July 1, Hits Revised Daily Limit As Sellers Outnumber Buyers By 2000 To 1

Back in April, when we first discussed the hike in daily corn trading limits from $0.30 to $0.40, we had some cynical observations, namely that "inviting not only more vol (read bottom line for the business) but more margin, the CME is exposing speculators to far greater impacts from margin hikes (and drops). Which of course means a far great capacity and ability to kill any commodity rally dead in its tracks." Well, there is no margin hike today (yet), although based on today's action we fully expect one. The reason, we are currently at today's down 40 cent limit, a price of $5.925 a bushel, the lowest since July 1, and by the looks of things it will get far worse: as the chart below demonstrates right now sellers outnumber buyers by a ratio of 2000 to 1. Expect this ratio to get even bigger once the CME hikes corn (and who knows what other commodity) margins as soon as today.

SEC Report On Credit Raters Finds Leaks And Conflicts Of Interest

In what is perhaps the biggest face-palm moment of the day, the SEC's summary report on credit raters found 22 pages worth of supervisory failure and conflicts of interest concerns at each and every one of our NRSROs. However, perhaps the most notable headline, via Bloomberg was potentially much more litigiously serious:

*SEC SAYS `LARGE' CREDIT RATER APPEARED TO LEAK PENDING RATING
*SEC DECLINED TO IDENTIFY WHICH RATER MAY HAVE LEAKED DECISION

Now who could it be?

Will Start Of Landesbank Mortgage Litigation Against Bank Of America Push Stock To New 52 Week Lows?

When all is said and done, Bank of America will have no choice but to charge its 6 to 8 remaining clients about one million dollars each time an ATM transaction is executed because the bank will be so deep in mortgage putback litigation it will have a negative market cap. The latest news for the bank is about the worst possible kind: the wave of lawsuits filed against the Countrywide toxic mortgage receptacle has just jumped across the Atlantic, and after the Norwegian sovereign wealth fund recently started proceedings, the real threat, German banks, have just realized that Bank of America is nothing but a legal liability piggy bank and have sued Moynihan's house that taxpayers built. Furthermore, since it is precisely purchases of toxic MBS and RMBS from BAC and other banks that caused the collapse of the Landesbanken system, with Germany going on the offensive and now trying to recoup as much money as they can, look for gray market putback estimates to soar by another $20-40 billion, which will result in BAC selling the other half of its stake in the Chinese Construction Bank any minute, especially with Chinese banks starting to tumble like dominoes on Chinese slow down concerns.





Robert Eisenbeis | Do the math

Posted by: rcwhalen

Post date: 09/30/2011 - 11:36

These back-of-the-envelope calculations suggests that the current attempts to deal with the nation’s fiscal problems are at best a sham and assume that the general public will be fooled into... 

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