Covid bestowed end-of-cycle excess a hardy additional lease on life.
Doug Noland
Doug Noland: Well, That’s Some Weird… Stuff
At this point, markets are scary dysfunctional. Melt-ups lay the groundwork for breakdowns. And the longer markets disregard reality, the more destabilizing the eventual reckoning. There’s a major economic crisis shoe to drop when market Bubbles succumb.
Doug Noland: Critical Juncture
But if an adverse outcome didn’t materialize, the unwind of hedges could spur markets higher while stoking speculative excess.
Doug Noland: Very Dangerous
And don’t get me going on the Federal Reserve’s buying Apple’s corporate bonds when credit card rates are 17%.
Doug Noland’s: Moral Hazard Pinnacle (infinite money printing announced)
At an event sponsored by the Institute of International Finance, Randal Quarles offered an admission: “It may be that there is a simple macro fact that the Treasury market, being so much larger than it was even a few years ago, much larger than it was a decade ago, and now really much larger than it was even a few years ago, that the sheer volume there may have outpaced the ability of the private-market infrastructure to kind of support stress of any sort there. …Will there be some indefinite need for the Fed to provide — not as a way of supporting the issuance of Treasuries, but as a way of supporting a functioning market in Treasuries — to participate as a purchaser for some period of time.”
Doug Noland: Weird
The President is diagnosed with COVID-19, with rapidly worsening symptoms prompting a Friday evening Marine One flight to Walter Reed Medical Center. By Monday, he is back to the White House apparently feeling spryer than when he was a man… Read More ›
TSP Smart: The Stock Market’s Tinderbox
The November 3rd election could be the most heavily hedged-against event in market history. Moreover, the most hedged event comes in the most speculative of market backdrops – which follows history’s greatest expansion of central bank liquidity. Tinderbox.
TSP Smart: “The numbers are just monstrous”
The numbers are just monstrous. The Fed’s own data illuminate the historic Monetary Disorder that today runs wild. In short, finance has completely run amuck, with the data corroborating the super cycle “end game” thesis.
Doug Noland: State-Directed Credit Splurge
With 2020 GDP estimates in the 2.0 to 3.0% range, the divergence between Chinese Credit and economic output is unprecedented. China’s “Terminal Phase” excess – including rapid acceleration of late-cycle loans of deteriorating quality – is unparalleled in terms of both degree and duration.
Doug Noland: Summer of 2020
QE fundamentally changed finance. What commenced at the Federal Reserve with a post-mortgage finance Bubble, $1 TN Treasury buying operation morphed into open-ended purchases of Treasuries, MBS, corporate bonds and even corporate ETFs holding high-yield “junk” bonds. Markets assume it’s only a matter of time before the Federal Reserve adds equities to its buy list.