Monday, May 27, 2019

Learn Economics Topic Twelve

12.  Government Shocks and Interventions:

John Mauldin Discusses What Could Go Wrong

John Mauldin published an article about the economics of Donald Trump. I share many of his views. The article deserves to be discussed further.

Meng's Arrest Vs. the Rule of Law

Trade wars, even without arresting a key player like Meng, can contribute to all three results of economic shocks.

Belt and Road: the Sri Lanka Port

Most nations embrace the Belt and Road Initiative in varying degrees.

China PPP, Asian Infrastructure Investment Bank & Powerhouse Economics

Purchasing Power Parity is another way of measuring Gross Domestic Product. This measurement of GDP puts China in the lead as the most powerful economic engine in the world. AIIB is a bank that can help the world.

Are Policy "Refugees" Jumping the Trump Tariff Ship?

Japan's Abe and Israel's Netanyahu have signaled more cooperation with China as both realize that Asia is where it's at economically.

Four Signs Trump Could Ignite a Cold War with China

Here are four indications that we are headed toward a serious breakdown in the relationship between the US and China.

Trade War; Easier for Chinese Than Americans

Steve Bannon is to China what John Bolton is to Iran. He wants a full-blown trade war

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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Thursday, May 23, 2019

Learn Economics Topic Eleven

11. Liquidation by the Fed,  Obsessed with Pruning Wages!

Fed Great Depression and Great Recession Liquidations Go Unexplained

The Fed has a secret policy over the decades and centuries. We just want be told why and how this policy is good for America, when it appears the liquidations were very bad for America.

Central Banker Procyclical Craziness

One wonders if the central banks will have the will to actually stop their procyclical behavior, or will we just be fooled again. It is time to help with a monetary infusion in the very next downturn.

Kashkari Reveals Dark Secret Fed Plan for Wages

The dark secret of the Fed which reveals the inner working of the Fed, and its motives, can be seen through the charts. Also, a study made by Matthew Yglesias and a comment on disposable income reveal a disturbing result of Fed policy.

Ron Feldman's Fed Secret and Treasury Bond Behavior

Bank bonds, especially TBTF bank bonds are safe and risk free, because the Fed will protect them as a matter of policy. So says Ron Feldman of the Minneapolis Federal Reserve Bank.

Fed's Andolfatto, Powell, and the Secret Goal of the Fed

What is the real goal of the Fed? It may surprise many, but creating a foolproof system for insiders is key to understanding its experimental behavior.

Is the Fed Wrong in Caring About Wages, Not Inflation?

The GDP appears to be slowing. Charts show this is consistent with the sentiment in the business world.

Attacking the Everything Bubble without Destroying the Economy

Now the Fed is in the process of popping the bubbles all at once. Dire consequences for workers will follow. It could be deflationary in the way that Mish Shedlock rightly abhors. We are facing long term secular deflation, and new ideas are needed.

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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Sunday, May 19, 2019

Learn Economics Topic Ten

10. Edward Lambert Effective Demand Limit (meaning growth is limited by labor share of GDP):

Economist Edward Lambert

Edward Lambert on Bond Demand, the Coming Recession and the New Normal

Dr. Edward Lambert has come up with an equation to measure effective demand and predict recessions. His calculations indicate we are on the path to recession already.

Dr. Lambert's Effective Demand Recession Indicator

There is much that serious students of economics will find useful as they continue to study Edward Lambert's effective demand breakthroughs. Predicting recessions can be a complex endeavor.

Trump Shock; Selgin: Coppola and Lambert

We have the potential Trump Shock. And this Trump shock will be laid on top of that capacity utilization decline. And the decline has always led to recession from the '70s onward, according to the chart.

Edward Lambert's Recession Equation Warning

Edward Lambert has important mathmatical contributions to make in the battle of ideas between Tim Duy and Daniel Tarullo versus Janet Yellen and John Williams.

Is USA Low Capacity Utilization Low Enough to Prevent Recession?

Low capacity utilization and weak labor are with us in full force. Capacity utilization still runs below the fifty year average of 80.31 percent in the United State. We may be at the point where our low capacity utilization may not be low enough.

For All You Inflation Fearmongers, Dr Lambert Has an Answer

Fear of inflation and hyperinflation finds its way into many articles about economics. But for those confused by those who are predicting that inflation is just around the corner, Dr. Edward Lambert has a rational and data driven response.

Capitalism: Problem, Solution or Both? 

There are problems with government and capitalist responses to the challenges faced by the economy. It isn't a problem of fairness, as Fox News would lead you to believe. It is about real demand and the health of the economy.


***Dr. Edward Lambert's system shows when labor is financially weak, due to lack of labor participation in total GDP earnings. The recession predictions are based upon this equation. Dr Lambert's articles are noteworthy and show a general weakness and decline of labor prosperity over the years, which has weakened the very fiber of the United States society. Recessions are not the only evidence of this weakness. So too is the weakness in retail sales and housing starts, which are far lower than before the Great Recession.

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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)





Saturday, May 18, 2019

Learn Economics Topic Nine

9. Will Rogers:

Traditional money theory posits that the velocity of money increases if interest rates rise. But Will Rogers understood that money trickles up, not down.

Fed Chicken and Egg Conundrum; Dimon Proves Will Rogers Right; Banks Broke

Jamie Dimon proves Will Rogers was right about banks being broke in a deflationary environment. Now we add derivatives collateral demand to the mix. The Fed seems boxed in about what comes first, the chicken or the egg.

Jamie Dimon Is Janet Yellen, Proving Will Rogers Right

Jamie Dimon hopes rates will rise and the economy will recover. But then he says if the real economy does recover, and fewer treasuries are to be bought, then the result will not be smooth sailing.

Capitalism: Problem, Solution or Both?

There are problems with government and capitalist responses to the challenges faced by the economy. It isn't a problem of fairness, as Fox News would lead you to believe. It is about real demand and the health of the economy.

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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Sunday, May 12, 2019

Learn Economics Topic Eight


Everyone jumped on the bandwagon of higher interest rates, after QE ended. Some have no understanding of new bond demand even now.


The tantrum boys are back in force. The list includes the ever present king of tantrums, Alan Greenspan, as well as Paul Singer, Jonathan Garber from Business Insider, and a few others.

Bond Vigilantes, Liberty Street Fed Collateral Study, and Art Cashin

With the decline of asset backed collateral, like MBSs, interest rate collateral has taken over and is the largest derivative market. If that collateral fails on a massive scale, all hell really could break loose.


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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Thursday, May 9, 2019

Learn Economics Topic Seven

7. Helicopter Money:

Helicopter money has been called QE for the people but that is not quite right. I will list some important points I have found from reading Lonergan regarding this subject. Turns out, HM is the opposite of QE.


Kyle Bass discusses QE, but more importantly, he opts for helicopter money as the only way out of our worldwide financial malaise.

Helicopter Money, Not Bond Destruction, Must Replace Debt Forgiveness

Bonds could not be retired until and unless a substitute could be found for them in the financial markets. That is just reality.

Fiat Money, Helicopter Drops, Zuckerberg and the Big Myth

How do we weigh the debate about money, whether it is fiat or something else? This question has been at the forefront of economic debate since President Richard M. Nixon took US currency off of the gold standard.


What I do hear is a lot of talk about helicopter money, and we should at least get that discussion correct. When Bill Gross speaks, people listen.


You want fiscal responsibility? Then understand and promote the concept of helicopter money as it was meant to be.


We face the threat of an expanded Fed balance sheet, zero lower bound in the next downturn, and the inequality of wealth, seemingly ever increasing. Helicopter money will simply have to be considered as a means to evening out the money supply.

________________________________

Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Wednesday, May 8, 2019

Learn Economics Topic Six

6. New Normal and Economic Theory:

Before I get into John Mauldin's timely comments about this sorry state of affairs, we can look to see if monetary theory still applies. John Maynard Keynes was right about monetary theory in his time. But that was then and this is now.

M is not broad money, and doesn't get into the real economy. Coppola believes asset inflation, as a way of increasing M in the equation, is futile. But there may be another way that an increase in M could help.

Timid Fed and Jeremy Stein and Potholes

Society would be better off appointing a central banker who cares less about the bond market.

Trumponomics: Increase Exports, Slow Imports, Bludgeon the New Normal

Unless we are prepared to cut wages, housing costs and the cost of living to the bone, it makes no sense for us to try to make things that others can make more cheaply.

Trump Tax Cuts and Yellen's New Normal

This discussion will get to trump's tax cuts and how they fit in with the present day financial situation. But first it is necessary to report on Janet Yellen.


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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Saturday, May 4, 2019

Learn Economics Topic Five

5. History of Hoarding the New Gold (Treasury Bonds):

The history of structured finance under Alan Greenspan includes both asset backed securities used as collateral and a new gold, US government debt also becoming valuable as collateral. Greenspan pushed risk off the banks and onto counterparties.

A Whole Lot of Gold Hoarding Going On

Gold hoarding has been replaced by bond hoarding. The system could break and we need to treat bonds differently to avoid bad things from happening.

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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Friday, May 3, 2019

Learn Economics Topic Four

4. Tracking a Potential New Housing Bubble:

How to Track the Trump Housing Bubble

Some things will have to change in order for a housing bubble to occur under Donald Trump. This may not be an exhaustive guide to tracking a potential housing bubble but certainly could help many do so.

This Is What Jamie Dimon Wants for Housing

Jamie Dimon says the mortgage market is sick. Read about what he wants out of the housing market as we approach 10 years from the big credit crisis past.

We Cannot Trust Big Market Rigging Banks to Replace the GSE's

Big banks who have been involved in multiple market manipulations should not be allowed to replace the GSE's. The temptation to manipulate housing and mortgages is simply too great for banks involved in other market maniipulation.

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Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)

Thursday, May 2, 2019

Learn Economics Topic Three

3. Great Recession causes:


I created this chart which shows the Great Recession Started when LIBOR rates became greater than fixed swaps rates. Banks could not pay out interest as the tables were reversed!


The Fed knew LIBOR was rocketing higher in yield, yet did little to stop it until the LIBOR rate exceeded the Swaps rate.


The Fed tightened or ignored crisis warnings. LIBOR destroyed subprime, but the Federal Reserve Bank clearly deepened the Great Recession by inaction or by active policy.


The Fed put the CP market at massive risk, then ignored the signs that it had done so. The Fed is culpable for the housing bubble and Great Recession. And there is proof this was the case.

Did the Fed Want the Houses Back for Wall Street?

HR 1424 providing for use of excess reserves to buy bad paper at TBTF banks, was introduced into the House of Representatives on 3/9/2007, and the subprime crash took place in the summer following.

LIBOR Triple Damages Loom; Chart Shows How the Banks Won Bets

The biggest banks in the world are in real trouble. They may have won too much when they won their derivatives bets. At issue is whether these big banks manipulated the LIBOR rate downward. A chart explains it all.

The Lowdown Federal Reserve Bank

The Fed made the Great Recession far worse on purpose but says it was all about providing accommodation!

_____________________________


Articles are exclusive to Talkmarkets if they are published on the site before being published elsewhere for 48 hours. Most of my articles on Talkmarkets are written to be considered "evergreen", or intended to be fresh articles even as time passes. Most subjects I have written about have proven to lend themselves to considerable lasting effect.


While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

Additional Resources:

Talkmarkets Homepage

Talkmarkets New Educational Center (Free to Join!) 

Gary Anderson Talkmarkets Personal Blog (Non Vetted Posts)

Gary Anderson Talkmarkets Articles (Vetted Articles Listed by Date of Publication)