Business

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.

Timing the end of a major bubble is extraordinarily difficult as it entails figuring out when a critical mass of investors shift from greed to fear.

Having said that, we’ve recently seen a number of developments that would suggest we’re near the end of the current Bond Bubble.

Back in June the world saw the unveiling of perhaps the single most insane investment of all time: the 100-year bond.

To make matters more insane, the countries that were issuing these bonds (Argentina and Austria) both have experienced numerous sovereign dent crises in the last 100 years.

The rationale for creating WeWork, the eco-friendly serviced workspace provider, was simple as co-founder Adam Neumann explained to the New York Daily News.

“During the economic crises, there were these empty buildings and these people freelancing or starting companies. I knew there was a way to match the two. What separates us, though, is community.”