By the standards of previous generations, the middle class has been stripmined of income, assets and purchasing power. What does it take to be middle class nowadays? Defining the middle class is a parlor game, with most of the punditry referring to income brackets as the defining factor. People tend to self-report that they belong to… Read More
Converting used passenger-planes to freighters is a booming business, but overcapacity looms. By MC01, a frequent commenter on WOLF STREET: Air freight has been hot over the past few years. Just to give an example AirBridgeCargo, the wholly-owned subsidiary of Russia’s Volga-Dnepr Group set up to operate Western-made aircraft, has seen its volume grow from… Read More
Here’s the difference between a recession and a depression: you can’t get blood from a stone, or make an insolvent entity solvent with more debt. There are two basic differences between a recession and a depression: 1. Duration: a recession typically lasts between 6 and 18 months, while a depression drags on for years or… Read More
What’s behind the “Americans for Carbon Dividends” scheme? By Leonard Hyman and Bill Tilles for WOLF STREET: It’s not every day that two former Republican US Senators, currently full-time oil lobbyists, advocate for a carbon tax. When one of their main clients, Exxon Corp., also decides to publicly and financially support this effort for $1… Read More
This post 4 Pillars of Debt in Danger of Collapse appeared first on Daily Reckoning. Last month I was in a series of high-level meetings with members of Congress and the Senate in Washington. While there’s been major news about the Supreme Court, my discussions were on something that both sides of the aisle are… Read More
This post Learn How to Earn… and Actually Keep Your Earnings appeared first on Daily Reckoning. In the U.S. we are obsessed with football—the American kind. Every year, each of the 32 professional teams perform a draft where they pick the best player from college teams across the country and pay them extraordinary amounts of… Read More
This post The Real Reason the Market’s Crashing appeared first on Daily Reckoning. 832 points the Dow Jones lost yesterday — its third-largest point drop in history. The S&P and Nasdaq were also knocked flat. Markets peeped out of their foxholes this morning, apprehensively… like battle-shocked troops after an artillery siege. Down rained another barrage…… Read More
What many in 2016 thought would never happen again is now reality. It finally happened – a line in the sand has been breached. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment did what people had thought in 2016 we’d never see again: It… Read More
This post Why the Middle Class Is Screwed appeared first on Daily Reckoning. Last December, Congress passed the largest U.S. tax system overhaul in more than 30 years—a $1.5 trillion tax cut, but America’s middle class will see less than a quarter of the savings under the legislation. In 2018, middle-income households—those earning $20,000-$100,000—will see… Read More
This post INSIDE: The Holiday Shopping List That Pays YOU! appeared first on Daily Reckoning. If there’s one thing I hate more than shopping, it’s last minute shopping. Last year, I did most of the holiday shopping for the family online. So I thought I had all my ducks in a row. But when one… Read More
How to prevent its shares from dropping below €0.01? By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Abengoa, the Spanish green energy giant — with big entities in the US, Canada, Mexico, and other countries — famed for cooking its books with Enron-esque aplomb before collapsing in spectacular fashion a few years ago, is… Read More
The price of cheap dollar-debt. Just when you think Argentina’s financial crisis can’t get worse, it gets a whole lot worse. In order to halt the peso from collapsing further, the IMF, after some serious begging from the government, had agreed to a $50-billion bailout package in June, to be disbursed in increments. In addition,… Read More
Caveats apply. Grain of salt helpful. So I’m going to quantify the Fed’s increasing hawkishness. This isn’t going to be perfect. Caveats apply. And a grain of salt is helpful. But here we go. About three weeks after the Federal Open Markets Committee (FOMC) meets to decide on monetary policy – currently eight times a… Read More
The uncomfortable reality is all Bull Markets, no matter how lengthy or robust, all expire. As you have undoubtedly heard, the current Bull Market in U.S. stocks (S&P 500) is the longest in recent history–though some historians claim that Rome’s SPQR Index rose steadily though most of Emperor Augustus’ 40-year reign from 27 B.C. to… Read More
This post “Buy [XXX XXXXXX] Now!” appeared first on Daily Reckoning. Buy oil stocks now! That’s what DoubleLine Capital’s Jeff Gundlach recommended on stage during the closely watched Ira Sohn Investment Conference earlier this week. For a few months now, Gundlach has been making a bullish case for commodities in general. In fact, bullish may… Read More
This post America’s “Actual” GDP: The Shocking Truth appeared first on Daily Reckoning. Saturday last we offended the pieties. We reckoned that democracies — being shortsighted — tend toward vast accumulations of debt. In response, reader Tom B. dealt with us as follows: The committed ignorance of pseudointellectual arrogance and their refusal to take an… Read More
This post Matt Badiali’s Freedom Checks Exposed! appeared first on Daily Reckoning. Investment expert Matt Badiali recently released a viral video called “Freedom Checks” that has many scratching their heads, wondering what these investments are exactly. In the video, now viewed by millions of Americans, Matt says these “freedom checks” are not a government program… Read More
This post The Great Bitcoin Crash of 2018 appeared first on Daily Reckoning. A bitcoin “flash crash” briefly rattled cryptocurrency traders last night. Bitcoin lost more than $3,500 before quickly recovering. As of early this morning, the digital currency is back above $17,000. Speculators may have gobbled up this brief bitcoin dip. But it isn’t… Read More
As central bank policies are increasingly fingered by the mainstream as the source of soaring wealth-income inequality, policies supporting credit/asset bubbles will either be limited or cut off, and at that point all the credit/asset bubbles will pop. http://ads.investingchannel.com/adtags/OfTwoMinds/alternativeinvesting/300×250.js I’ve long held that if a problem can be solved by creating $1 trillion out of… Read More
Authored by Andy Xie via The South China Morning Post,
Central banks continue to focus on consumption inflation, not asset inflation, in their decisions. Their attitude has supported one bubble after another. These bubbles have led to rising inequality and made mass consumer inflation less likely.
Since the 2008 financial crisis, asset inflation has fully recovered, and then some. The US household net worth is 34 per cent above the peak in 2007, versus 30 per cent for nominal GDP. China’s property value may have surpassed the total in the rest of the world combined. The world is stuck in a vicious cycle of asset bubbles, low consumer inflation, stagnant productivity and low wage growth.
The US Federal Reserve has indicated that it will begin to unwind its QE (quantitative easing) assets this month and raise the interest rate by another 25 basis points to 1.5 per cent. China has been clipping the debt wings of grey rhinos and pouring cold water on property speculation. They are..