Jesse's Café Américain Sat 2010-09-25 09:55 EDT

FOMC: Sound the Bell. School's In, Suckas

Jesse

...What the Fed cannot do is breathe vitality into a zombie economy, and provoke a sustained recovery not tied to some sort of credit bubble. That is why stagflation remains the most likely outcome until the nation obtains the will and the determination to reform the financial system and restore a balance to trade and the real economy through a commitment to sound and practical public policy not driven by self-serving economic quackery. The dollar and bonds are made stronger through a vibrant underlying economy with the ability to generate taxable income and real returns to their holders. But in the meanwhile the special interests will be served. A profound deflation and hyperinflation remain as possibilities for the future, but they will most likely be seen on the horizon in advance of their arrival as the result of some exogenous event or catastrophic failure. So far, not a glimpse...

bell; FOMC; Jesse's Café Américain; school's; sounds; SUCKAS.

Mon 2010-09-20 10:12 EDT

Mish's Global Economic Trend Analysis: Fiat World Mathematical Model

...Conditions today are essentially the same as during the great depression...It is the destruction of credit, coupled with the fact that what the Fed is printing is not even being lent that matters...we are in deflation based on the following definitions: Inflation is a net expansion of money and credit. Deflation is a net contraction of money and credit. In both definitions, credit needs to be marked to market...the mark to market value of credit is contracting faster than base money is rising...The Fed tries to hide the contraction in the market value of bank credit by its Don't Ask, Don't Sell policy...The credit bubble that just popped exceeded that preceding the great depression, not just in the US but worldwide. Thus, it is unrealistic to expect the deflationary bust to be anything other than the biggest bust in history. Those looking for hyperinflation or even strong inflation in light of the above, are simply looking at the wrong model...

Fiat World Mathematical Model; Mish's Global Economic Trend Analysis.

Mish's Global Economic Trend Analysis Sat 2010-05-22 13:55 EDT

Richard Koo On Why This Recession Is Different; Mish On What To Do About It

Michael Shedlock

The Business Insider has a very interesting presentation by Richard Koo on The Real Reason Why This Recession Is Completely Different...The reason the recession is different is this is credit bubble busting depression not a recession. The effects are masked because of food stamps, unemployment insurance, and because of foreclosure policy...Koo blames cutbacks in fiscal stimulus in 1999 and 2001 as the reason Japan remains mired in deflation. I do not buy it...The real lesson is no matter how much money you throw around, economies cannot recover until noncollectable debts are written off...The moment fiscal stimulus stops economies are virtually guaranteed to relapse until the core problem is resolved. The problem is Asset Bubbles, Malinvestments, and debts that cannot possibly be collected...

different; Mish; Mish's Global Economic Trend Analysis; Recession; Richard Koo.

zero hedge Fri 2009-12-18 13:20 EST

Focusing On (And Profiting From) The Upcoming Chinese Financial Crisis

Today's piece of contrarian economic insight comes once again from the strategists at SocGen, this time Dylan Grice, whose piece entitled "Popular Delusions: China's looming financial crisis will provide the next buying opportunity" is somewhat self explanatory. Not surprisingly, Dylan, who quotes the NBER, focuses on the overabundance of cheap credit as the catalyst that will ultimately topple the economy. Mr. Grice's conclusion: buy if you must, but wait for the credit bubble pop.

focused; profits; Upcoming Chinese Financial Crisis; Zero Hedge.

Mish's Global Economic Trend Analysis Wed 2009-11-25 12:05 EST

What Is Inflation and How Does One Measure It?

Michael Shedlock

...Inflation is a net expansion of money supply and credit, where credit is marked to market. Deflation is the opposite: a net contraction of money supply and credit, where credit is marked to market...Credit (and credit problems) dwarf monetary concerns at the present...I still expect the US to slip in and out of deflation and recession for years to come just as happened in Japan...banks aren't lending, consumer credit is contracting, credit writeoffs are likely to exceed monetary printing, and symptoms like treasury yields are in generally in agreement...To bail out the banks' poor bets on Dot-Com companies and Latin America in 2001-2002, Greenspan purposely ignited a credit bubble that led to the mother of all housing crashes. In response to the housing bust, the Fed refused to let failed banks go out of business and is attempting to force another credit bubble...However, this is the end of the line. Housing was the bubble of last resort, nothing can come close to the number of jobs created by the global housing bubble. Further attempts to reflate will do nothing but create a currency crisis, crash the economy, and add to future liabilities that cannot be paid back.

Inflation; measured; Mish's Global Economic Trend Analysis.

zero hedge Fri 2009-08-28 17:03 EDT

One Man's Critique Of A Loose Monetary Policy

It seems these days everyone is happy to blame Greenspan for creating the biggest housing/credit bubble in American history, yet few have the same problem when it comes to voicing their support of Ben Bernanke, who is repeating exactly the same monetary steps (mistakes) as performed by his predecessor. Proponents will say that this time the justification was to prevent a full financial systemic collapse, and the trillions of excess liquidity (an approach that even Greenspan did not embark on full bore) that drowned the capital markets were just what the doctor ordered. Whether that is true or not will be debated by historians who analyze the 2009 as the year when China, the US and the Eurozone let loose the most unprecedented monetary loosening in the history of...

loose monetary policy; Man's Critique; Zero Hedge.

Tue 2009-06-16 00:00 EDT

Jesse's Café Américain: The Credit Bubble Was a Ponzi Scheme Enabled by the US Dollar

Jesse's Café Américain: The Credit Bubble Was a Ponzi Scheme Enabled by the US Dollar

credit bubble; Dollar; Jesse's Café Américain; Ponzi scheme enabler.

Thu 2009-05-07 00:00 EDT

Mish's Global Economic Trend Analysis: Case Against the Fed and Fractional Reserve Lending

``Fractional Reserve Lending (FRL)...in conjunction with micro-mismanagement of interest rates by the Fed is the root cause of the financial crisis''; ``FRL is the enabler for credit bubbles. Given enough time, credit bubbles are guaranteed to implode in deflationary fashion.'' austrian economic libertarian critique

Case; Fed; fractional reserves lending; Mish's Global Economic Trend Analysis.

Fri 2008-11-07 00:00 EST

Jesse's Café Américain: A Credit Bubble of Historic Proportions

Jesse's Café Américain: A Credit Bubble of Historic Proportions; 2008-10-13

credit bubble; historic proportions; Jesse's Café Américain.

Sun 2008-01-06 00:00 EST

Mish's Global Economic Trend Analysis: Asymmetrical Unwind of the Credit Bubble

investing for muddle-through

Asymmetrical Unwind; credit bubble; Mish's Global Economic Trend Analysis.

Sun 2007-11-25 00:00 EST

Mish's Global Economic Trend Analysis: How Much Will The Credit Crunch Cost?

"not only...the biggest credit bubble in history, ...also he biggest transfer of wealth from the poor and middle class to the already enormously wealthy"

credit crunch cost; Mish's Global Economic Trend Analysis.

Mon 2007-11-05 00:00 EST

PrudentBear

Road to Ruin: Credit Bubble Bulletin, by Doug Noland; "subprime and the SIVs were peanuts in comparison to the CDO market. Well, the CDO marketplace is chump change compared to Credit Default Swaps and other over-the-counter (OTC) Credit derivatives that...have never been tested in a Credit or economic downturn"; CDS debacle looming

Prudentbear.

Tue 2007-09-25 00:00 EDT

Mish's Global Economic Trend Analysis: Is the Fed Deflating?

"credit bubbles end in deflation"

Fed Deflating; Mish's Global Economic Trend Analysis.