Archive for the Interest Rates Category

Seeing 2020:  Federal Reserve Logic:  QE =/= QE.  Print, Lie, Print, Lie, Print, Lie.  The Great Financial Coup D’état Rages On. (January 6, 2020)

Posted in Banks and Banking System, Federal Reserve, Interest Rates, Kleptocracy, Repurchase Agreement on January 6, 2020 by e-commentary.org

. . .

K          “A year ago, Federal Reserve Chairman Powell repudiated a noble but doomed experiment.  After he raised interest rates in an effort to reach a normal, rational and traditional level, he and many others realized that interest rates can never ever ever ever ever be raised again and must be reduced to zero or less than zero to avoid financial collapse.”

J          “On January 30, as I recall, Powell relented because the Federal Reserve realized that the economic and financial system was again on the edge of collapse.  On September 17, as I recall, when the Federal Reserve again recognized that collapse was immanent, it opened up the coffers via the overnight repurchase market and shoveled free money to the banks and hedge funds.  And the free money is still flowing freely.”

. . .

K          “The entire financial and the political system is built on a deep and abiding faith in and reliance upon distrust.  Everyone in the banking and hedge fund world possesses enough self-awareness to know that she and he are corrupt and dishonest to the core.  And everyone in the banking and hedge fund world knows that the others in the banking and hedge fund world are corrupt and dishonest to the core.  Perfect knowledge in a world of otherwise imperfect knowledge.  Profound and well-founded distrust undergirds all decisions.”

J          “Actions and behavior are predictable, if one seeks to predict actions and behavior.  No banker or hedge funder wants to lend to another banker or hedge funder because each if given half an opportunity will not pay the money back.  Thus, they simply steal the money that is given freely by the Federal Reserve.  And the free money is still flowing freely.”       

. . .

K          “Now going on a dozen years, the Great Financial Coup D’état rages on and on and on.”

J          “And on and on and on and on and on without public input or congressional approval or MSM comment.  And the free money is still flowing freely.”

. . .

J          “Print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print. print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, print, and then rinse and repeat.”

K          “And then lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie, lie and then rinse and repeat.”

. . .

[See the incisive and insightful commentary in “Wall Street On Parade” researched and written by Pam Martens and Russ Martens; David B. Collum, the other Dave who provides a review of the events of the departing year, delivers his written “2019 Year in Review” in two parts and a podcast titled “Pandemonium” in his own inimitable way available at Peak Prosperity.]

[See the e-commentary at “Quantitative Easing = Money Printing (January 19, 2015)” published five years ago discussing the ongoing Quantitative Easing currently in overdrive and part of the Second Great Bank Bailout taking place without public input, congressional approval or MSM comment; “Coups d’état, Bail Outs And Bail Ins:  Clio’s Diary/Chronology.  Oh, And Happy Constitution Day! (September 17, 2018)” published on the ten year anniversary of the Great Financial Coup D’état; and “Twenty Sixteen (January 4, 2016)” published four years ago at the dawn of the year on the prospects for economic collapse in the near future.]

Bumper stickers of the week:

Print, baby, print

Lie, baby, lie

Not all debt is repaid, but all debt is paid

And the free money is still flowing freely

To Be (In Debt), Or Not To Be (In Debt), what is the answer? (July 23, 2018)

Posted in Banks and Banking System, Debt/Deficits, Interest Rates, LIBOR, Wall Street on July 23, 2018 by e-commentary.org

. . .

K          “The argument and the aspiration is that there will be a debt jubilee relieving them of debt.  Acquire the debt now and be ready for the great debt reset.”

J          “Yet someone else expects to be paid on that debt and may not be jubilant if there is a jubilee.  Few will voluntarily release the debt of another.  That is the dreaded counterparty risk.” 

K          “I remind others that foreclosures continued unabated throughout the First Great Depression.”

. . .

J          “Another observation is that the government’s only solution to debilitating debt and deficits is to keep printing money and then in desperation to inflate the economy and prices.  The debtors who can maintain their cash flow may be able to ride the government’s coat tails and pay their debts with dollars worth substantially less.”

K          “The dollars may be worth less, but the homeowner/renters will be forced to pay more dollars.  I am confident that even someone who has a fixed rate mortgage will discover that the interest rate is nonetheless cranked upward unilaterally by the financial players.  The scandalous LIBOR interest rate scheme is disappearing which may vitiate some loan agreements.  And sure enough, the courts will not offer any hope or redress to the homeowner.”

J          “But the judges will make their tee times.”

. . .

J          “Student loan debt is expressly not dischargeable in bankruptcy and serves to enslave the kids who may be the ones to spearhead a jubilee.”

. . .

K          “If you are in debt, you are in servitude to someone else.”

J          “No question.  But not everyone is free to make the choice to be debt free.”

. . .

[See the e-commentary at “National Financial Literacy Month: Teaching Financial Literacy In The ‘Debt Age’ (April 25, 2016)”.]

[See “The Most Important Number in Finance Is Going Away.  Wall St. Isn’t Prepared” in “The New York Times” by Matt Phillips dated July 19, 2018.]

Bumper stickers of the week:

Debt is not so good

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”  Ogden Nash 

To Raise Or Not To Raise? (December 14, 2015)  

Posted in Bureaucracy, Federal Reserve, Interest Rates, Movie Reference, Sports, Wall Street on December 14, 2015 by e-commentary.org

. . .

1          “That is the answer.”

2          “They can’t raise it, they can’t maintain it, they can’t lower it.  They are not in a stalemate because they are in checkmate.”

1          “Game over?”

. . .

2          “A decision not to decide is a decision.  The Fed has been deciding not to decide and has decided to destroy the real economy since at least 2008.  If they decide to raise the rate a nominal .125 or .250 percent, they may be able to get away with it.  Anything more substantial will tip over this unreal and surreal economy of their contriving.  Interest rate derivative swaps will strain, fragile emerging markets will sag and the federal government will be forced to spend more of the budget on interest payments.”

1          “They are said to need to show that they are tough guys and gals who are trying to return to a real economy.  They are said to need to establish ‘Wall Street cred’.”

2          “They have no ‘Main Street cred’.  At least among the few dozen folks who give a cred.”

. . .

1          “So will they raise the interest rate?  Yes or no?  If they do, how much?  .125?  .250?”

2          “The question is not ‘will’ they but ‘should’ they raise the interest rate.”

. . .

1          “A betting pool.  There you go.  We might as well have fun.”

2          “No they should not.  .125 to appear to be doing something.  The effective rate now may hover near an average of .100, so they may be able to do something without doing anything.”

1          “Maybe.  .250 to feign cred.  And then be able to reverse gears.”

2          “See we shall.”

. . .

[See the e-commentary at Interest Rates ‘risin (March 30, 2015).]

Bumper stickers of the week:

“Do.  Or do not do.  There is no try.”  Yoda

What happens when you run out of altitude, airspeed and ideas all at the same time?

Otter:  “I think this situation absolutely requires a really futile and stupid gesture be done on somebody’s part.”

Bluto:  “We’re just the guys to do it.”

                                                    “Animal House” movie (1978)

Fed up yet?

“In life, unlike chess, the game continues after checkmate.”  Isaac Asimov