Tag Archives | Economy

The Mantra on Wall Street Is ‘Don’t Fight the Fed’, but Do You Know What the Fed Is Doing? And Where Did Belgium Get $141 Billion to Purchase U.S. Treasury Bonds?

via chycho

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The main mantra on Wall Street is ‘Don’t Fight the Fed’, implying that if monetary policy is geared towards easing – lowering of interest rates – then riskier markets are the game in town, and if monetary policy is geared towards tightening – rising interest rates – then volatile markets are to be avoided. But do we know what the Fed is up to?

I. DOW, S&P 500, QE, and Tapering

Both the DOW and S&P 500 are sitting at all-time highs. Since bottoming out in early March 2009 (DOW, S&P 500), the DOW is up approximately 150% and the S&P 500 approximately 180%. Astronomical returns no matter what period you compare this to.

It’s no secret that the only reason the markets have been soaring is because of unlimited quantitative easing [QE], i.e., stimulus, stimulus, and indefinite-stimulus – “fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy.”

By December 2012, funds were being pumped into the markets to the tune of $85 billion a month – a last resort, desperate measure that the FOMC began so that their ‘growth’ targets could be met.

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Why Riot?

PIC: Bryan Tong Minh (CC)

PIC: Bryan Tong Minh (CC)

A thought provoking must read on a largely misunderstood topic:

Via Ultra

So I’m writing here for simple reasons: to defend the riot as a general tactic and to explain why one might engage in a riot. By this I mean to defend and explain not just the window breaking, not just “non-injurious violence,” and certainly not just the media spectacle it generates, but the riot itself—that dangerous, ugly word that sounds so basically criminal and which often takes (as in London in 2011) a form so fundamentally unpalatable for civil society that it can only be understood as purely irrational, without any logic, and without possible defense.

I aim, nonetheless, to defend and explain the riot, because we live in a new era of riots. Riots have been increasing in absolute number globally for the past thirty years. They are our immediate future, and this future will spare Seattle no less than Athens or London, Guangzhou or Cairo.

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Fragmentation of Bitcoin Community Begins after the Collapse of Mt. Gox and Secondmarket’s Wall Street Exchange Proposal

bitcoin wall streetvia chycho

A few comments regarding Bitcoin and the recent developments with Mt. Gox (2, 3, 4, 5, 6, 7, 8, 9) and the announcement that SecondMarket is stepping into the game and planning to launch the “first New York-based Bitcoin exchange” (emphasis added):

“SecondMarket CEO Barry Silbert says that he’s modeling it after the early days of The IntercontinentalExchange (ICE), and that he hopes to have a set of founding members in place by the end of March (i.e., a ‘seat’ model). These members are expected to include Wall Street banks and well-funded Bitcoin startups (think Circle and Coinbase). Non-member firms or individuals would not be allowed to trade — at least at the outset — but likely could do business via the member firms.

When Wall Street insiders announce that they are joining your game, but not allowing you to play on their field, which is what is implied with “Non-member firms or individuals would not be allowed to trade”, one should be concerned that the fundamental rules of the game may be changing, but, unfortunately, with fear running rampant within the Bitcoin community due to the collapse of Mt.

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The One Percent Is Hogging so Much of Our Income That It’s Holding the Economy Back

meanlifeAre the rich intentionally trying to make the rest of us poor, thus preserving their own power?  Anthony W. Orlando writes at Informed Comment:

We all know that inequality has been rising and the average American household has been suffering. There is a myth that says all this suffering is necessary, that extreme inequality is the by-product of a rapidly growing economy—or worse, that it’s a good thing because it motivates everyone to work hard and climb the long ladder to the One Percent.

Even a brief glance at the historical record reveals just how perverted this hypothesis is.

For one thing, the economy has not been growing rapidly since inequality started climbing. From 1950 to 1980, “real gross domestic product (GDP)”—the output of the economy, adjusted for inflation—grew by 3.8 percent per year. From 1980 to 2010, it grew by 2.7 percent per year. (Since then, it’s been even worse.)

So income inequality hasn’t been “growth-enhancing” at all.

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America: Afraid of Shadows in the Dark While Ignoring the Elephants in the Room

via chycho
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What baffles the mind about the United States of America is that many of its citizens have been conditioned to fear shadows in the dark while ignoring the elephants in the room.

I. Homelessness and Bankruptcies

For example, in the last few years anti-homelessness laws have been passed across the United States, some going as far as making it illegal to feed the homeless. As if that wasn’t enough, to deal with America’s homelessness problem (2), some government representatives have turned to violence:

“Remarkably, this vigilante isn’t just some random Hawaiian, but five-term State Rep. Tom Brower (D).

“Noting that he’s ‘disgusted’ with homeless people, Brower told the Honolulu Star-Advertiser about his own personal brand of ‘justice’: ‘If I see shopping carts that I can’t identify, I will destroy them so they can’t be pushed on the streets.’ Brower has waged this campaign for two weeks, estimating that he’s smashed about 30 shopping carts in the process.

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The Bitcoin Bubble, Or Is It? Two Charts, Historical Price Movement, and the Conspiracy

via chycho

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I wish I wasn’t making this post and I hope I’m wrong. I love the concept of Bitcoin and the prospect of the decentralization of power brought about by the introduction of “an open source peer-to-peer electronic money and payment network” and the inevitable collapse of fiat currencies that are controlled by central banks which are in the business of transferring wealth from main street to Wall Street.

I’ve been tracking bitcoin for almost three years, since it was trading for less than a dollar. I even mined it a little a couple of years ago and recommended friends to buy them. Now that bitcoin has breached $1,200 and counting, would I still be giving it a buy recommendation? Absolutely not. Would I be recommending friends to keep most of their bitcoins at these valuations? Absolutely not. I would be telling them to sell almost all of their holdings, letting 1% ride.

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