Author Archives

  • Doug Noland: Heels Dislodged

    The bottom line: global Bubbles are fragile and increasingly vulnerable. In particular, China is a Credit accident in the making. And Fed policy certainty has been the glue holding things together – keeping the mania raging, keeping the leveraged players playing, keeping all the options and derivatives speculators betting on the long side, and keeping the weak dollar supportive of levered “carry trades” the world over.

  • TSP Smart: The US FUBAR Balance Sheet Update

    I am going to pull the salient data out and print it up front… So my more simple conclusion is that our financial system is FUBAR.

  • Doug Noland: [Labor] Turned Tight

    In other words, the labor market is tight today. Are we really worried about filling all the below-living-wage burger-flipping unfilled jobs? For reference, 5 million jobs paying $20K a year ($10/hr) comes to $100 Billion in wages a year – the Fed is printing $120 billion per month to monetize the stock market.

  • Doug Noland: History Screams

    Michael Bond comment: Just read it. Term “coup de whiskey” means in 1927 with over heating markets the Federal Reserve lowered interest rates instead of raising them. The 1929 stock market bubble top took 30 years to be topped after… Read More ›

  • Doug Noland: Un-Anchored

    The financial sphere is not driven by inflation, but “inflation expectations”. The Fed will say whatever it takes to attempt to manage expectations, but the market may not listen. Higher inflation pushes interest rates higher, higher interest rates will bring down stocks… and bubbles do not work in reverse. This is the risk of 2021.

  • Doug Noland: Generational Turning Point?

    Everyone is prepared for unchecked monetary and fiscal stimulus as far as the eye can see. But is existing market structure sustainable in a backdrop of unrelenting non-productive debt growth, rising inflation, waning central bank flexibility and shifting political priorities?

  • Doug Noland: Fed Guessing

    hear no, speak no, say no

    Our central bank has its heels firmly dug in. Monetary policy will remain ultra-loose, while their communications strategy at this point is little more than rationalization and justification. I can only assume they are fearful of the consequences of puncturing Bubbles. It’s been only 13 months since a near financial meltdown.

  • Doug Noland: Peak Monetary Stimulus

    Over the years, I’ve relied upon a “Core vs. Periphery” model of market instability as a key facet of my analytical framework. Instability and financial crises typically emerge at the “periphery” – at the fringe where the structurally weakest and most vulnerable to risk aversion and tightening financial conditions – reside.

  • TSP Investing: The Last Dance

    Probably the most surprising part of credit-driven market tops is how long they take to play out. The early crash, the central bank pushes back, the highly-leveraged speculative melt-up, then the initial blow ups (Archegos) that force banks to pull back.

  • Doug Noland: When Ponzi Finance Goes Boom

    Minsky witnessed a lot, but he surely never imagined an environment of zero rates and endless Trillions of Fed monetization, and how such a backdrop – the perpetual “bonanza” – would extend the “deviation amplifying” Ponzi phase.