2009 Was Not the Bottom

2009 Was Not the Bottom


Eureka Perspectives

March 17, 2017 Big Picture, Fed Comments No Comments


Nothing Really Happened


This week’s Federal Reserve meeting should be a wake up call to investors, economists, traders, and in reality, to everyone in the world.  What Janet Yellen said, after you tear away the happy talk, was “we threw 5 trillion dollars and zero interest rates at the US economy, central bankers around the world jumped in behind us,  and nothing real happened”.


What did Occur ?


Speculators had a party, zero interest rates created imaginary assets, and corporate buybacks pushed the money back out to the speculators and Corporate CEO’s who rode the tail of this party animal.


So Nothing Happened for the Workers of the World


Is it any wonder we have seen the wave of populism around the world.  Global trading is not the problem, the problem is that the money in the world is in the wrong place.  It is in a sense ironic the that new President of the world, Donald Trump is a prime example of the type of player in this phenomenon.  He played with other peoples money, had a number of bankruptcies, used US tax policy to spin the money around and then took even bigger risks.  Is it any wonder that he will not release his Income Tax Records and has tied himself to essentially the number one PR “Fake News” firm of the past 25 years, a firm that has spawned a bunch of copycats like Breitbart, i.e. I am talking about Fox News.


Where do thing go from Here ?


This is not the start of making “America Great Again”, this is the start of “Cleaning America Out”.  Hopefully after this cleanout we can do a real “Make America Great”.

Comments

Jeffry Gilbert Added Mar 18, 2017 - 2:13am
This is not the start of making “America Great Again”, this is the start of “Cleaning America Out”.
 
A little behind the curve. It started with the creation of the Federal Reserve. Its almost complete.
George N Romey Added Mar 18, 2017 - 7:28am
This Don will ultimately crash the global economy when the world of financial gimmicks gives out and the US can no longer play strong man forcing the world to keep the dollar as the reserve currency.  The latter in fact may lead to WW3.
Eureka-Perspectives Added Mar 18, 2017 - 9:25pm
George, I don't disagree, Presidents usually reflect the times and population. The Don is just a reflection of where things are now.
Dino Manalis Added Mar 19, 2017 - 11:25am
Central banks can't fix the economy, we need pro-growth policies, that's why Trump won the election, people prefer pro-growth policies over higher taxes.  That's why business tax cuts should be prioritized, as well as a territorial tax, to bring trillions from abroad back to America for investments; jobs; higher employee salaries; and tax revenues.  The Fed was stuck all these years, it's been encouraged with pro-growth promises and has begun raising interest rates.  Trump should prioritize business tax cuts, because health care is complex and will take time.
Eureka-Perspectives Added Mar 19, 2017 - 12:36pm
In my mind, pro-growth has little but headline value, pro-demand is where the equation has to start, and that only happens if the wealth becomes in-trapped from the top.
Patrick Writes Added Mar 19, 2017 - 8:31pm
Don't we need Glass-Steagall back? It would force commercial banks to loan money to people to make money (instead of getting interest from the Fed of hoarding cash) or gambling in the stock market. 
Eureka-Perspectives Added Mar 19, 2017 - 8:47pm
I agree, I believe Glass-Steagall should be reinstated. 
Billy Roper Added Mar 20, 2017 - 9:25am
What really happened is that Federal Reserve, which put interest rates through the floor to boost the appearance of Obama's efforts' results, are now planning on smearing Trump. They'll do this by raising interest rates three times, at least, this year alone. That will purposefully slow economic growth. Having a corrupt private bank issuing fiat currency on which our standard of living depends is criminal. Some people might note that there hasn't been a non-Jewish Chairman of the Federal Reserve Bank in about thirty years. Heck, that's probably just a Cohen-cidence, though.
George N Romey Added Mar 20, 2017 - 11:03am
Not only do we not have Glass Steagall but investment banks are now FDIC insured and can get all kinds of goodies from the Fed.  I agree with Billy the Fed will take down the economy as a way to take down and destroy Trump.
Eureka-Perspectives Added Mar 20, 2017 - 11:42am
I doubt the FED is thinking about taking down Trump, their biggest concern is getting short term rates up to a more normal rate of 2.5 % so they have ammo for the next down turn, and if they don't get the Balance Sheet normalized, we will see $ 10,000 gold when the fan gets hit.
Autumn Cote Added Mar 20, 2017 - 2:09pm
Please note, the best way to draw more attention to your work is to comment on the work of others.  I know this to be true because if you do I'll do everything in my power to draw more attention to your work.  PS - One sentence comments are not what I'm looking for. 
Peter Corey Added Mar 24, 2017 - 2:19am
 
>I agree, I believe Glass-Steagall should be reinstated
 
https://www.forbes.com/sites/objectivist/2012/11/12/why-the-glass-steagall-myth-persists/#4b14e68041b4
 
"Glass-Steagall was enacted in 1933 to create a firewall between commercial and investment banks: commercial banks could not underwrite or deal in securities, and investment banks could not accept deposits. The Act also restricted commercial banks from being affiliated with any company that underwrote or dealt in securities.
 
But by the 1990s, the affiliation provision was widely viewed as unnecessary and even harmful to financial institutions. In 1999, President Clinton signed GLB into law. Although it left the bulk of Glass-Steagall in place, it ended the affiliation restrictions, freeing up holding companies to own both commercial and investment banks.
 
There is zero evidence this change unleashed the financial crisis. If you tally the institutions that ran into severe problems in 2008-09, the list includes Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, and Fannie Mae and Freddie Mac, none of which would have come under Glass-Steagall’s restrictions. Even President Obama has recently acknowledged that “there is not evidence that having Glass-Steagall in place would somehow change the dynamic.
 
As for the FDIC-insured commercial banks that ran into trouble, the record is also clear: what got them into trouble were not activities restricted by Glass-Steagall. Their problems arose from investments in residential mortgages and residential mortgage-backed securities—investments they had always been free to engage in."
 
* * *
 
With the previous firewall or without it, there STILL would have been a major recession starting in 2008-2009.
 
Get over it.