In a poker game, the rake is the cut that the casino dealer takes out of every pot. It’s usually a couple of dollars per hand … barely noticeable, certainly not noticeable to a casual poker player like me. But what if the dealer started taking 18-25% out of every pot as his rake? Would […]
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The Fed Has Created the Big Lie for Congress on its Repo Loans while the New York Fed Blocks Freedom of Information Requests…
Yesterday Federal Reserve Chairman Jerome Powell testified before the Joint Economic Committee of Congress. Only one Congressman, Kenny Marchant (R-TX), had the courage to ask Powell about the Fed’s intervention in the repo loan market beginning on September 17. Since that time the Fed has been pumping hundreds of billions of dollars each week (that […]
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JPMorgan Has Radically Changed Its Balance Sheet, Shrinking Its Cash at the Fed by $145 Billion…
JPMorgan Chase is not a bank that federal regulators can simply put on autopilot and hope for the best. When the U.S. Senate’s Permanent Subcommittee on Investigations conducted a formal probe into how the bank lost $6.2 billion of its federally-insured bank’s deposits by gambling in derivatives in London in 2012, the Chair of the […]
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Weak 2019 Earnings Growth Paves the Way for Strong 2020 Earnings Picture, Boosting Stocks…
Earnings in 2019 are setting a low bar to clear in 2020, paving the way for stocks to continue their record-setting rally, according to Wall Street strategists. Third-quarter earnings are slated to see a 2.4% drop from last year’s third quarter, according to DataTrek Research. The first and second quarter saw 0.4% declines in earnings […]
The Fed’s Repo Bailout and JPMorgan’s 38 Trading Floors…
Since September 17 of this year, the central bank of the United States, the Federal Reserve, has been pumping hundreds of billions of dollars each week to unnamed trading firms on Wall Street. We know the loans are going to trading firms because the loans are being made to the 24 primary dealers (see list […]
Small Business ‘Optimism’ at Record High, Up 160 Percent…
A national economic optimism index of small business owners is at its highest level ever, up 162% since the final months of President Obama’s two terms. The Wells Fargo/Gallup Small Business Index is at +142 compared to +54 at the end of the Obama administration. “When owners are asked a broad question about their financial […]
U.S. Dollar Faces the Threat of Being Displaced by China’s Digital Currency…
From a dictation of a blanket ban on all crypto activities and digital currencies as tools for retail payments, including access to international exchange platforms in 2018, to recent declaration of the People’s Bank of China (PBOC) to launch a central bank-backed digital currency (CBDC) by November 11, 2019, China has come a long way. […]
The Fed’s Wall Street Bailout May Go into Overdrive in December…
The Fed is in deep fear, while also in deep denial, about what happened last December. Its fear is that it could happen again this December. Its denial is that its lax supervision of the Wall Street mega banks is largely responsible for the mess. The stock market news on December 24 of last year […]
As the Fed Throws Hundreds of Billions a Week at Wall Street Banks for Liquidity, JPMorgan’s IIF Can Afford to Buy El Paso Electric…
David Dayen of American Prospect has a must-read article. The headline and subhead read: “JPMorgan Gets Back Into the Electricity Business: An El Paso, Texas, electric utility is being purchased by an investment fund with deep, undisclosed ties to the big bank.” Dayen is not buying into the idea that it’s an investment fund at […]
“It’s Incredible. The Scale of What JPMorgan Is Doing Is Mind-Boggling”…
Shortly after our latest discussion how JPM’s drain of liquidity via Money Markets and reserves parked at the Fed may have prompted the September repo crisis and subsequent launch of “Not QE” by the Fed in order to reduce its at risk capital and potentially lower its G-SIB charge – currently the highest of all […]
‘Blowout Numbers’ as Black Unemployment Reaches Record Low, Beating Forecasts…
The Bureau of Labor Statistics (BLS) on Friday released its monthly Employment Situation Report (pdf), which showed continued employment growth and near record unemployment rates in October. Employment gains among African-American women and Latinos were particularly impressive. The unemployment rate for African Americans reached a record low of 5.4 percent—a fall of 2.6 percent since […]
China Says It’s Reached a Consensus in Principle with the U.S. During This Week’s Trade Talks…
China said Friday that it has reached a consensus with the U.S. in principle after a phone call among high-level trade negotiators this week. The Chinese Ministry of Commerce said Vice Premier Liu He had a phone call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Friday. It said the two […]
Stupendously Splendid Jobs Report – October Jobs +128,000, Aug/Sept Revisions +95,000, Wage Growth +3.0%…
Jumpin’ ju-ju bones, the October jobs report has blown away all expectations in every possible metric. It’s not just the top-line job gains, the two month revisions are huge. The Bureau of Labor Statistics (BLS) report for October shows 128,000 job gains; and that number includes absorption for negative impacts due to -20,000 census workers […]
DoJ Strikes Deal to Recover $1 Billion from Mysterious Fugitive Mastermind Behind 1MDB Fraud…
The U.S. Justice Department has struck a deal with fugitive financier Jho Low – the mysterious financier who allegedly masterminded the theft of more than $4 billion from Malaysia’s 1MDB development fund – to recoup almost a billion dollars from Malaysian investment fund 1MDB – “I am very pleased” that a global settlement has been […]
What in the World Is the Federal Reserve Thinking???…
You don’t use up all of your ammunition before the battle even begins. The U.S. economy has not even officially entered recession territory yet, although many experts are definitely anticipating one in 2020. When that recession arrives, the Federal Reserve is going to want as much ammunition to fight it as possible. So I was […]
New York Fed’s Repo Loans Are Foaming the Hedge Fund Runways…
There is growing evidence that the New York Fed, the Wall Street feeding tube team of the Federal Reserve Board of Governors, is using its massive new repo loan operations to securities firms (primary dealers) to foam the Wall Street runways to try to avoid a crash landing as money gushes out of hedge funds […]
China’s IP Theft Remains a Thorny Issue in Trade Talks…
Whether the United States and China will sign the first part of a trade deal at the APEC meetings in Chile isn’t yet certain, and one obstacle in the ongoing talks is China’s stance on intellectual property. This is one of the most problematic issues in the trade talks, as Beijing wouldn’t “move the needle” […]
‘A Government of the Millionaires, by the Millionaires, for the Millionaires…
Way back in 1863 Abraham Lincoln gave his famed ‘Gettysburg Address’. In it he described ‘a government of the people, by the people, for the people’. Great words. But words are all they were. Fast forward 250 years or so and those famous words have now mutated into ‘government of the millionaires, by the millionaires, […]
Krugman Admits He and Mainstream Economists Got Globalization Wrong…Ya Think?…
Paul Krugman, Nobel-prize winning economist and avowed champion of free trade, admits he and his colleagues got a few things seriously wrong about globalization, in particular around its downside impact on local labor markets. “We missed a crucial part of the story,” Krugman wrote in a Bloomberg article in October, referring to members of the […]
The Fed Fears an Explosion on Wall Street: Here’s How JPMorgan Lit the Fuse…
JPMorgan Chase is the largest bank in the United States with $1.6 trillion in deposits from more than 5,000 retail bank branches spread across the country. When it withdraws liquidity from the U.S. financial system, that has a reverberating impact. According to the filings that JPMorgan Chase makes annually with the Securities and Exchange Commission […]