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bernorange

Our monetary system is insane

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https://www.theatlantic.com/magazine/archive/2020/07/coronavirus-banks-collapse/612247/

 

"Even before the pandemic struck, the credit-rating agencies may have been underestimating how vulnerable unrelated industries could be to the same economic forces. A 2017 article by John Griffin, of the University of Texas, and Jordan Nickerson, of Boston College, demonstrated that the default-correlation assumptions used to create a group of 136 CLOs should have been three to four times higher than they were, and the miscalculations resulted in much higher ratings than were warranted. “I’ve been concerned about AAA CLOs failing in the next crisis for several years,” Griffin told me in May. “This crisis is more horrifying than I anticipated.”

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Yeah, that's the problem with the Fed's ZIRP.  It's created a massive bubble of "zombie companies" that should have died (gone bankrupt) a long time ago.  But the undead were given unlife by cheap corporate debt.  I talked about this subject in my zombies thread.

 

 

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Posted (edited)

I feel I was given a lie. I didn't see her bust at all on the coin. Just a head!

 

"Antoniniani depicting women (usually the emperor's wife) featured the bust resting upon a crescent moon.?

Edited by workswithseed
I wish I was just given a pie.

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Quote

As central banks pump trillions into the world economy, investors are setting their sights on what could be the next big thing in global monetary policy: yield curve control.

The strategy, which involves using bond purchases to pin down yields on certain maturities to a specific target, was once deemed an extreme and unusual measure, only deployed by the Bank of Japan four years ago after it became clear that a two-decade deflationary spiral wasn’t going away.

No longer. This year, the Reserve Bank of Australia adopted its own version. And despite officials’ attempts to cool it, speculation is rife that the U.S. Federal Reserve and Bank of England will follow later this year.

Should yield curve control go global, it would cement markets’ perception of central banks as the buyers of last resort, boosting risk appetite, lowering volatility and intensifying a broader hunt for yield. While money managers caution that such an environment could fuel reckless investment already stoked by a flood of fiscal and monetary stimulus, they nonetheless see benefits rippling across credit, equities, gold and emerging markets.

“It depends on the form and the price but broadly speaking it’s the green light to carry on with the QE trade -- buy everything regardless of valuation,” said James Athey, who manages $3.1 billion at Aberdeen Standard Investments in London.
...

More:  https://www.bloomberg.com/news/articles/2020-06-21/a-buy-everything-rally-beckons-in-world-of-yield-curve-control

The US financial markets are entirely owned by the Fed now.  A small group of people decide winners and losers.  Rules, logic, "sound investment strategies" really have no bearing in our financial markets.

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Kind of cool thread from a NBA player. Unfortunately he’s tested positive for Covid. Hope he can play with the Trillion on his back.

 

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13 hours ago, Rusty Shackelford said:

Gold hit $1,800, looks like ATH will be set in 2020.

I was reading something the other day where the author was claiming that once 1800 was breached, there would be a bit of a short squeeze propelling gold higher.

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22 minutes ago, bernorange said:

I was reading something the other day where the author was claiming that once 1800 was breached, there would be a bit of a short squeeze propelling gold higher.

I think you can take your pick of reasons why, but I see a new multi-year gold bull market starting.

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3 hours ago, bernorange said:

I was reading something the other day where the author was claiming that once 1800 was breached, there would be a bit of a short squeeze propelling gold higher.

I'm glad I started buying gold, if only at 1/10 of an ounce.

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mpu


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