Free Republic

While everyone fixates on the U.S. election, developments in the world economy threaten to create problems for the next president and, possibly, trigger a major financial crisis. A little-noticed study by the International Monetary Fund (IMF) delivers the bad news. It finds that global debt -- including the debts of governments, households and non-financial businesses -- reached a record $152 trillion in 2015, an amount much higher than before the 2008-09 financial crisis. What's worrisome about this is that the global economic recovery has assumed widespread "deleveraging" -- the repayment of debt by businesses and households. Initially, the theory went,...

<p>Bank of America has a recession warning that's downright 'scary'</p> <p>There's a chilling trend in the market, and it could wreak havoc on your portfolio, a top market watcher said.</p> <p>"We are seven years into a full-fledged, all out, central bankers doing everything they can to stimulate demand," Bank of America-Merrill Lynch's head of U.S. equity and quantitative strategy Savita Subramanian recently warned on CNBC's " Fast Money ."</p>

Julian Robertson, the legendary hedge fund manager behind Tiger Management, thinks central banks are fueling bubbles throughout financial markets. "We don't have negative rates here in the States yet, but I think it's tragic that we've taken rates down this far," Robertson said this week at Bloomberg's Surveillance Primetime event. "I know the Federal Reserves all over the world are trying to ensure prosperity, but in doing so I think they are ensuring a huge bubble, which will be pricked, and we will all be hurt by it." Negative and near-zero interest rates from central banks have allowed increased borrowing......

You probably aren't aware because it isn't a topic that gets discussed much if at all on the outside, but increasingly even monetary policymakers are coming around to the idea that we are in a depression. What choice do they have, really, since practically any chart of any economic account in any economy shows as much. The gathering in Jackson Hole late last month was really an internal discussion in how to think about keeping current central bank frameworks alive in such a world. Earlier this week, San Francisco Fed President (and CEO) John C. Williams spoke in Nevada on...

Darryl R Schoon August 8, 2016 If the thunder don’t get you, then the lightning will… The Grateful Dead, The Wheel(lyrics) In the world of phenomena, everything has a beginning and an end; and today, the bankers’ endgame is moving closer to its inevitable resolution and demise. The question is no longer if, it is when and how. The relationship between paper money and gold is causal in central banking’s collapse. When paper money was backed by gold, it (1) gave the bankers’ paper money its value and (2) constrained the ability of governments to print limitless amounts of money,...

Negative interest rates are spreading like a virus. Central banks in the Eurozone, Switzerland, Sweden, and Japan all have below-zero policy rates. “NIRP,” as economists call a negative interest rate policy, is a desperation move—but the only move those central banks have. The Federal Reserve hasn’t followed—yet. When the next recession strikes, I believe Janet Yellen will choose to break the zero lower bound. The rationale was laid out in Jackson Hole. Look behind the headlines and you’ll see the Fed already preparing for NIRP. In theory, negative rates should encourage consumers and businesses to spend more freely and stimulate...

UK rates may be at an all time low, but they are even lower elsewhere, particularly on the Continent, where the European Central Bank has been so busy buying up government debt that in Germany and Holland the stock of available bonds has been almost completely exhausted. There is virtually no yield left at all on 10 year German bunds, against which their UK equivalent look positively bountiful. So utterly desperate has this hunger for yield become that there are now an astonishing $10 trillion of government bonds worldwide trading on a negative interest rate. Some corporate borrowers too have...

was talking about the bond bubble earlier this week. Seems I’m not the only one who’s a bit worried. Bill Gross, founder of Pimco (now at Janus Capital), tweeted “Global yields lowest in 500 years of recorded history… This is a supernova that will explode one day.” Aside from making the pedantic point that a supernova is itself an explosion (according to my limited knowledge of astronomy at least), I find little to disagree with here. The big question is – when will the bubble burst? We discussed that on Monday. But in the meantime, it’s worth asking – what...

Today’s Wall Street Journal report on record levels of credit-card and auto-loan debt sound like a stroll down Memory Lane: U.S. credit-card balances are on track to hit $1 trillion this year, as banks aggressively push their plastic and consumers grow more comfortable carrying debt. That sum would come close to the all-time peak of $1.02 trillion set in July 2008, just before the financial crisis intensified, and could signal an easing of frugal habits ingrained by the recession. The boom has been driven by steady economic conditions and an improving job market that have made creditworthy consumers less reluctant...

The U.S. Federal Reserve may need more powers to provide emergency funding to securities firms in times of extreme stress in order to deal with a liquidity crunch, New York Federal Reserve President William Dudley said on Sunday. "Providing these firms with access to the discount window might be worth exploring," Dudley said in prepared remarks at a financial markets conference in Amelia Island, Florida organized by the Atlanta Fed. The discount window is a credit facility through which banks borrow directly from the U.S. central bank in order to cope with liquidity shortages. The Fed currently has limited ability...

Hold tight, wait 'til the party's over. Hold tight, we're in for nasty weather. There has got to be a way Burning down the house. By now, it should be obvious to the observant that the 'scoundrels-looting-the-treasury' phase of our economic arc is about played out, and before the entire rotten financial edifice collapses, there will be a war ignited across Europe and the Middle East which will serve as a distraction for the masses, while the very worst of the scoundrels take to ground to wait for the smoke to clear before they emerge. The gangsters actually directing the...

More than a quarter of a million truckers, retirees and their families could soon see their pension benefits severely cut — even though their pension fund is still years away from running out of money. Within the next few weeks, the Treasury Department is expected to announce a crucial decision on whether it will approve reductions to one of the country’s largest multi-employer pension plans. The potential cuts are possible under legislation passed by Congress in 2014 that for the first time allowed financially distressed multi-employer plans to reduce benefits for retirees if it would improve the solvency of the...

A dark storm is brewing in the world of private pensions, and all hell could break loose when it finally hits. As the Washington Post reports, the Central States Pension Fund, which handles retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York, and Minnesota, and is one of the largest pension funds in the nation, has filed an application to cut participant benefits, which would be effective July 1 2016, as it "projects" it will become officially insolvent by 2025. In 2015, the fund returned -0.81%, underperforming the 0.37%...

Stan Druckenmiller ... when I look at the current picture of expected tax revenues combined with benefits promised to future generations, this is the most unsustainable situation I have seen ever in my career. The disaster that Druckenmiller sees coming for the United States is all about changing demographics and entitlement spending. They don’t add up to a sustainable situation. In 1940, entitlement payments, which include everything from disability payments to Social Security to Medicare, amounted to just over 20% of annual government spending in the United States. Today, entitlement spending has swelled to nearly 70% of the annual federal...

The two leading Republican candidates for president warn the U.S. stock market is trading at an alarming level. On Friday, Ted Cruz predicted a stock market "crash will be coming." Donald Trump calls it a "terrible time" to invest. "We're in a bubble right now," Trump says. It's a high degree of fear from a party that is normally viewed as pro-business and pro Wall Street. Trump recently told The Washington Post that America is on track for a "very massive recession."

Some of the US’s biggest banks still lack a proper plan for bankruptcy, in the event of another major financial crisis, US regulators said on Wednesday. In the wake of the great recession banks were required to come up with “living wills” to prove they had a credible plan for bankruptcy that would not require another bailout from the taxpayers. But after reviewing the plans of five institutions – JP Morgan Chase, Wells Fargo, Bank of America, Bank of New York Mellon and State Street Corp – the Federal Reserve and the Federal Deposit Insurance Corp (FDIC) have determined that...

  When we last looked at order of heavy, or Class 8, truck one quarter ago - that all-important, forward looking barometer of domestic trade - we said that even with 2015 in the history books, and as we start 2016 where the base effect was supposed to make the annual comps far more palatable, the latest, January data, as abysmal: "the drop continues to be one of Great Recession proportions, manifesting in yet another massive 48% collapse in truck orders in the first month of the year as demand appears to have gone in a state of deep hibernation."Fast...

While we all very capable of discerning the 'recovery' facts from the peddled recovery fiction throughout President Obama's reign... ...a close up over the last six months suggests things are getting worse in a hurry. As The Economic Collapse blog's Michael Snyder details, while most people seem to think that since the stock market has rebounded significantly in recent weeks that everything must be okay, that is not true at all. Has the U.S. economy gotten better over the past six months or has it gotten worse?  In this article, you will find solid proof that the U.S. economy has continued...

Jeffrey Gundlach, the widely followed investor who runs DoubleLine Capital, foresees a “global growth scare” between now and the end of the summer, triggered by a presidential nomination of Donald Trump. “That is where I see the vulnerabilities,” Gundlach said in a telephone interview on Monday. Trump’s protectionist policies could mean negative global growth, Gundlach warned. “As he gets the nomination, the markets and investors are going to worry about it more. You will see a downgrading of global growth based on geopolitical risks. You must factor this into your risk-management.”

Fracking accounts for close to 50 percent of all natural gas and oil production. Our production of natural gas from shale fields and tight gas has increased by 40 billion cubic feet per day since 2002. Our production of shale and tight oil from fracking has increased by 4 million barrels a day since 2002. Fracking is one of the main reasons why oil and natural gas prices are so low. That also makes it one of the main reasons why gasoline and diesel prices are so low, and electricity prices have dropped in many areas. Crude oil is the...