Late last month, depending on how you look at it, either something wonderful happened - or the feds continued their cowardly, conniving ways.
A group of federal prosecutors met in Washington and in New York with various financial regulators to discuss filing criminal charges against and coercing guilty pleas out of two giant banks. This looks to be a historic occurrence.
But two things say we shouldn’t pop open the champagne just yet...
Janet Yellen's Speech on Monetary Policy: Three Big Questions Answered
Janet Yellen gave her first speech on monetary policy today (Wednesday) since assuming her position as chair of the U.S. Federal Reserve on Feb. 3, 2014.
While cautioning that the economy still needs the central bank's support, Yellen stated that the nation's economic recovery will be nearing completion within two years.Get the full text of Janet Yellen's speech here.
Today's FOMC Meeting: Data-Dependent and Dovish
The end of today's Federal Open Market Committee (FOMC) meeting included fresh dovish language in its policy statement - but the market-friendly attitude failed to excite investors who were hoping for more.
As widely expected, the U.S. Federal Reserve announced it will stay the course on its bond tapering. Anticipated - but not as expected - the policy statement shed some light on eventual interest rate hikes.To continue reading, please click here...
Janet Yellen Testimony: Key Takeaways as Fed Stays the Course
What stands out most from the Janet Yellen testimony Thursday to the Senate Banking Committee is that her remarks mirrored comments made on Feb. 11 in her first monetary policy testimony to a House panel.
Speaking on Capitol Hill about the Semiannual Monetary Report, Yellen repeated that the central bank is likely to maintain its approach of progressively trimming asset purchases. The taper will continue even as policy makers monitor data to determine if the recent spate of soft economy data is temporary or something more serious.To continue reading, please click here...
The Five Most Ridiculous Revelations from the Fed Hearings
On Friday, the U.S. Federal Reserve released the transcripts from its vital meetings over the state of the U.S. economy from 2007 through 2009.
The transcripts provide a staggering glimpse into the world of a central bank in crisis, or at least the inability for all parties concerned to grasp the problems at hand.
Here are the five most ridiculous takeaways from the Fed Reports.To continue reading, please click here...
Janet Yellen Testimony to Congress
U.S. Federal Reserve Chair Janet Yellen delivered the semiannual Monetary Policy Report Tuesday morning before the House of Representatives. This was Yellen's first public address since assuming the role as head of the U.S. central bank after predecessor Ben Bernanke on Feb. 3, 2014.
Yellen, who until last week served as vice chair of the Fed, testified on the health of the U.S. economy, her commitment to the central bank's ongoing stimulus efforts, and regulatory needs for the financial system.
The full text of Yellen's remarks follows.To continue reading, please click here...
Today's Stock Market News and Earnings Calendar
Today's stock market news, Feb. 10, 2014: The markets recovered last week after a choppy start to February trading. On Thursday and Friday, the markets dismissed disappointing unemployment numbers and tepid economic data. The S&P 500 increased 2.6% over the two days.To continue reading, please click here...
- This Has Been Making Investors Rich for 140 Years People are viewing the end of stimulus as a sunset. "My, what a wonderful day we've had," they say. What they should be doing is investing for tomorrow's dawn - the turmoil we're seeing now as part of Yellen's arrival is actually par for the course. It's also a great time to lock your sights on four companies that will lead the way when the smoke clears... Full Story Read More...
- This Chart Will Save You from a Dangerously Popular Delusion There's a very dangerous meme making the rounds. It goes something like this: The economy is improving, therefore the Fed's going to taper... and, when it does, the economy is strong enough to endure the withdrawals that will come with it. Don't fall for it. Nothing could be farther from the truth. Any amount of stimulus reduction will indeed trigger a "taper tantrum." This chart is all the proof we need...
- Why the Fed's 100th Birthday Could Be Its Last On December 23rd, the Federal Reserve will turn 100 years old. We can look back on its few successes... but its many failures far outweigh any positives it may have achieved. What's at stake now is the Fed's future. And it looks bleak. In fact, the Fed won't even exist in 100 years...
Deflation Is Coming (and It's Not What You Think)
Be careful out there.
The stock market rally that started in March 2009... The one that's taken us out of the Great Recession and to new highs... The rally that's driving sentiment indicators of people who benefit from rising financial assets directly, peripherally, or because they hope all boats rise with the market...
The rally has never been loved.
The thing is, equity markets don't need love to go twice as high from here, or three times as high in the next 20 years. If they get what else they need, they'll keep going higher.
We could be on the verge of a generational bull market. That's if deficit-plagued, interconnected global sovereigns deleverage and, at the same time, re-capitalize middle and rising classes by making "recourse-sound" capital available and simultaneously reconstituting entirely the notion of taxation.
Too bad the likelihood of that happening is somewhere between slim and none.
That's one reason why I'm an increasingly reluctant bull.
But there's another reason too.
And it has to do with deflation...
Time to Buy These "Out of Print" Assets
From the Editor: We've been tracking this threat for years, ever since Keith Fitz-Gerald brought it to your attention back in January 2010. Today, Resources Specialist Peter Krauth weighs in on some recent developments in this story, because three of the commodities he covers can protect you. The Fed can't print these things... Here's Peter:
Central banks may have foolish policies, but central bankers are no dummies.
They know exactly what they're doing. They even comprehend a few of the implications, too.
Which is why it's interesting that some American central bankers have suggested doing away with the debt ceiling altogether.
Famed investor Marc Faber recently said, "The question is not tapering. The question is at what point will they increase the asset purchases to say $150 [billion], $200 [billion], a trillion dollars a month."
Faber expects the Fed's current QE4 to become "QE4-ever."
That could mean years of money printing and ultra-low rates.
Even bond king Bill Gross recently chimed in his latest monthly outlook that "The United States (and global economy) may have to get used to financially repressive - and therefore low policy rates - for decades to come."
Either way, don't depend on the Fed to save you. You can save yourself
And now you'll need to...
- Fed Strategy from Mohammed Ali Bernanke's actions last week - failing to taper, yet still trying to maintain the illusion that QE is a good thing - are setting up a one-two punch that's not unlike boxing champion Mohammed Ali's famous "float like a butterfly, sting like a bee" approach. If you recall, Ali was a master of the combination - some say the best ever. He loved to bring his opponents in close. Ali could see through the duplicity of his opponents' strategy and land punches that won decisively. Ali did that using combinations that were based in fighting terms on two contrasts: high-low or short-long, or even left and right. He pressed every advantage he could find, even when others thought there were none to be had. Knowing he wanted to go the full 15 rounds, Ali developed a strategy that would become known as the "rope-a-dope" as a means of tiring out his opponents early on, then vanquishing them in later rounds when the fight really began. I think we should take a page from Ali's playbook and split the "fight" Bernanke's presented us with into two distinct time zones: the current "round," and those that happen down the line. One short. One long. Is that possible? Absolutely. What's more, it's easy to do. First, though, put yourself in Bernanke's place...
- Why the Falling U.S. Dollar Is Just a Hint of What's to Come The dollar's recent hiccup against other major world currencies is just a taste of what lies ahead for the fatally wounded greenback. Soon, we will all pay the price for decades of short-sighted government policies. But before that happens, there are several things you need to do... Read more...
The Greatest Criminal Enterprise in the World
From the Editor: Shah Gilani is one of the few people who can show you how it really is. In this case, he's going to show you the real reason the Fed chose not to taper. If you're overly idealistic, don't read this. It will only anger you. That, of course, is why Shah's naming names today...
Ben Bernanke is the don of the greatest criminal enterprise in the world.
And yesterday his made monsters, the Five Families, lined up to kiss his ring, again.
By not "tapering" or reducing the $85 billion a month ($45 billion in Treasuries and $40 billion in agency mortgage-backed securities) the Fed is buying from banks, the Fed is saying to its hit men, "We are family, and as long as Johnny Law is coming after you, we've got your back."
The "legal and litigation costs" (that means lawyers and fines) racked up by America's Five Families since the credit crisis gently (not) ushered in the Great Recession is over $103 billion, by some estimates. That doesn't include actual losses from related activities.
The Five Families, according to the Federal Reserve, are big, very big bosses in their territories, which means America and a good part of the world.
Let's name names... and then I'll tell you the REAL reason the Fed didn't taper yesterday
Is This What Happens When the QE Taper Starts?
You know that members of the Fed have been hinting since June that the central bank wants to scale back on its $85 billion a month bond-buying program, the third round of what's known officially as quantitative easing.Read More...