Business

Sanctions, schmanctions...

After imposing various sanctions for whatever the neocon establishment can make up next, Washington must be shocked to see that their economic warmongery agains Russia has led to... lower and lower bond yields.

Russian five-year bond yields dropped to the lowest level since January 2014, even as Bloomberg reports that the U.S. Treasury prepares a report on the possible effect of sanctioning the nation’s sovereign debt.

Authored by Jesus Huerta de Soto via The Mises Institute,

It is interesting to note that Marx, in his analysis of the capitalist economic system, basically concentrates on the study of the imbalances and maladjustments which occur in the market.

Authored by James Howard Kunstler via Kunstler.com,

The hidden agenda in the so-called tax reform bill is to act as stop-gap quantitative easing to plug the “liquidity” hole that is opening up as the Federal Reserve (America’s central bank) makes a few gestures to winding down its balance sheet and “normalizing” interest rates. Thus, the aim of the tax bill is to prop up capital markets, and the apprehension of this lately is what keeps stocks making daily record highs. Okay, sorry, a lot to unpack there.

In his latest flow show report, BofA's Michael Hartnett finds that while inflows into markets in the past week continued, with $3.1bn going into stocks - of which $13.7bn went into ETFs, and $10.6bn was redeemed from active managers, $1.2bn into bond and $0.3bn into gold (unfortunately EPFR doesn't track inflows into bitcoin yet), although he noticed something peculiar: the “yield” trade appears to be fading, with the smallest IG inflows in 50 weeks ($1.4bn), while the revulsion to junk continued after the 6th consecutive week of HY outflows.

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.