Jesse's Café Américain Tue 2009-09-22 09:15 EDT

Confessions of a 'Flationary Agnostic

Jesse

I have no particular allegiance to either the hyperinflation or the deflationary camps. Both outcomes are possible, but not yet probable. Rather than being a benefit, occupying the middle ground too often just puts one in the middle, being able to see the merits in both arguments and possibilities, and being unwilling to ignore the flaws in each argument...The growth rate of dollars is slowing at the same time that the 'demand' for dollars, the velocity of money and the creation of new commercial credit, is slowing. GDP is negative, and the growth rate of money supply is still positive, and rather healthy. This is not a monetary deflation, but rather the signs of an emerging stagflation fueled by slow real economic activity and monetization, or hot money, from the Fed. The monetary authority is trying to lead the economic recovery through unusual monetary growth. All they are doing is creating more malinvestment, risk addiction, and asset bubbles...Using money as a 'tool' to stimulate or retard economic activity is a dangerous game indeed, fraught with unintended consequences and unexpected bubbles and imbalances, with a spiral of increasingly destabilizing crises and busts. The Obama Administration bears a heavy responsibility for this because of their failure to reform the system and restore balance to the economy in any meaningful way.

confessed; Flationary Agnostic; Jesse's Café Américain.

zero hedge Mon 2009-09-21 15:41 EDT

Federal Reserve Accounts For 50% Of Q2 Treasury Purchases

The degree of intermediation by the Federal Reserve in the issuance of US Treasuries hit a record in Q2, accounting for just under 50% of all net UST issuance absorption. This is a startling number, as the Fed's $164 billion in Q2 Treasury purchases dwarfs the combined foreign/household UST purchases of $101 billion and $29 billion, respectively, over the same time period. In fact, the Fed was a greater factor in UST demand than all three traditional players combined: Foreigners, Households and Primary Dealers, which amounted to a $158 billion in net Q2 purchases. This dramatic imbalance puts a lot of question marks over how the upcoming hundreds of billions in incremental Treasury purchases will be soaked up, now that QE only has $15 billion of capacity for USTs...

50; Federal Reserve Accountable; Q2 Treasury Purchases; Zero Hedge.

The Economic Populist - Speak Your Mind 2 Cents at a Time Mon 2009-09-21 14:33 EDT

Fed accounts for 50% of treasury purchases

There once was a time when the Federal Reserve abhorred the idea of monetizing debt. That day is long over. In the second quarter, the most recent for which data is available, the Fed bought $164 billion out of the $339 billion in net new Treasurys sold. In the mortgage-backed debt markets, the Fed has been buying upward of 80% of the bonds issued by agencies such as Freddie Mac and Fannie Mae. ZeroHedge helps to put this number into perspective: the Fed was a greater factor in UST demand than all three traditional players combined: Foreigners, Households and Primary Dealers, which amounted to a $158 billion in net Q2 purchases.

50; economic populist; Fed Accountable; Mind 2 Cents; speaking; Time; Treasury purchases.

Sun 2009-09-20 14:12 EDT

America's Exhausted Paradigm: Macroeconomic Causes of the Financial Crisis and Great Recession | The New America Foundation

Thomas Palley

This report traces the roots of the current financial crisis to a faulty U.S. macroeconomic paradigm. One flaw in this paradigm was the neo-liberal growth model adopted after 1980 that relied on debt and asset price inflation to drive demand. A second flaw was the model of U.S. engagement with the global economy that created a triple economic hemorrhage of spending on imports, manufacturing job losses, and off-shoring of investment. Deregulation and financial excess are important parts of the story, but they are not the ultimate cause of the crisis. Instead, they facilitated the housing bubble and are actually part of the neo-liberal model, their function being to fuel demand growth based on debt and asset price inflation. The old post-World War II growth model based on rising middle-class incomes has been dismantled, while the new neo-liberal growth model has imploded. The United States needs a new economic paradigm and a new growth model, but as yet this challenge has received little attention from policymakers or economists.

America's Exhausted Paradigm; Financial Crisis; Great Recession; Macroeconomic Causes; New America Foundation.

Wed 2009-09-16 19:21 EDT

Corrosive, stinking Chinese drywall may be radioactive - Los Angeles Times

The final years of the U.S. housing boom and a disastrous series of Gulf Coast hurricanes created a golden opportunity for Chinese drywall manufacturers. With domestic suppliers unable to keep up with demand, imports of Chinese drywall to the U.S. jumped 17-fold in 2006 from the year before. That imported drywall is now at the center of complaints of foul odors seeping from walls. Hundreds of homeowners, most in Florida, have also reported corrosion to their air conditioners, mirrors, electrical outlets and even jewelry. State and federal authorities have traced the problems to Chinese-made drywall but haven't yet fully determined the causes. Some Chinese experts, however, suspect that the culprit is a radioactive phosphorus substance -- phosphogypsum -- that is banned for construction use in the U.S. but has been used by Chinese manufacturers for almost a decade.(china, building materials, defective products, health hazards)

corrosive; Los Angeles Times; Radioactive; stinking Chinese drywall.

Zero Hedge Wed 2009-08-26 15:52 EDT

The Goldman VaR Exemption Question Escalates

Tyler Durden

It seems only yesterday that Zero Hedge had some questions in regard to Goldman's VaR Fed exemption. No response was received from 85 Broad. Today it appears several Congressmen, lead by Alan Grayson, are willing to drive a sharp stick pretty deep into the hornets' nest, by sending a letter directly to Wall Street Don Ben Bernanke, demanding an explanation exactly to the question of Goldman's VaR Exemption. Posted 2009-07-27.

Goldman VaR Exemption Question Escalates; Zero Hedge.

Thu 2009-07-30 00:00 EDT

Zero Hedge: Guest Post: Tax Revenues Tanking

-- ``the lions share of the planned sales of Treasuries in 2009 cannot be met by demand from the market..Auctions will fail and the Fed will step in...the 2009 budget deficit is more likely to widen to levels between $2.5 and $3 trillion rather than the CBOs $1.8 trillion forecast. We also believe that inflation could start setting in as early as Q3 of 2009 and will accelerate sharply by 2010.''

Guest Post; Tax Revenues Tanking; Zero Hedge.

Tue 2009-06-16 00:00 EDT

Jesse's Café Américain: Collapsing US Aggregate Demand Strikes Imports Hardest

Jesse's Café Américain: Collapsing US Aggregate Demand Strikes Imports Hardest

Aggregate Demand Strikes Imports Hardest; Collapse; Jesse's Café Américain.

Mon 2009-01-19 00:00 EST

Mish's Global Economic Trend Analysis: Bank of America Threatens Fed, Demands More Cash From Taxpayers

America Threatens Fed; bank; cash; demanded; Mish's Global Economic Trend Analysis; Taxpayers.

Fri 2009-01-16 00:00 EST

Mish's Global Economic Trend Analysis: Consumer Demand For Nearly Everything Plunges

consumer demand; Mish's Global Economic Trend Analysis; plunge.

Thu 2009-01-15 00:00 EST

Mish's Global Economic Trend Analysis: Huge Demand For Treasuries As Banks Refuse To Lend

bank refusal; Huge demand; Lends; Mish's Global Economic Trend Analysis; Treasury.

Sun 2008-11-23 00:00 EST

Winter (Economic & Market) Watch >> Observation on the Crack Up Boom Crash

Winter (Economic & Market) Watch >> Observation on the Crack Up Boom Crash; ``a Mad Max speculative boom created false demand, and now there is a Panic liquidation...the pieces will be picked up, and more sustainable, balanced and less speculative growth will be maintained.''

Boom Crash; crack; economic; Market; Observations; watch; winter.

Tue 2008-09-02 00:00 EDT

naked capitalism: EIA Revises Down June Oil Demand by "Stunning" Amount

amount; EIA Revises; June Oil Demand; naked capitalism; stunning.

Wed 2008-07-02 00:00 EDT

naked capitalism: Oil: Goldman Versus Faber, Data on Improving Supply/Demand Conditions

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data; Goldman Versus Faber; Improving Supply/Demand Conditions; naked capitalism; Oil.

Wed 2008-07-02 00:00 EDT

Peak Oil Debunked: 365. MASSIVE DROP IN U.S. DEMAND IN APRIL

"supply outstripping demand theory of the feverish price action since March s emanating an extremely fish-like odor. U.S. demand down by a whopping 0.8mbd year-on-year."

365; April; massive drop; Peak Oil Debunked; U. S. demand.

Mon 2007-12-03 00:00 EST

Winter (Economic & Market) Watch >> Ministry of Truth to Rectify Key Economic Data

Winter (Economic & Market) Watch >> Ministry of Truth to Rectify Key Economic Data; understating inflation; overstating growth; truck tonnage, container traffic confirm slack demand and recessionary conditions

economic; Market; ministries; Rectify Key Economic Data; truth; watch; winter.