Submitted by Daniel Bier via The Foundation for Economic Education,
Willie Sutton was one of the most infamous bank robbers in American history. Over three decades, the dashing criminal robbed a hundred banks, escaped three prisons, and made off with millions. Today, he is best known for Sutton’s Law: Asked by a reporter why he robbed banks, Sutton allegedly quipped, “Because that’s where the money is.”
US monetary conditions are the tightest since 2009, financial conditions the tightest since 2009, and as Moody's reports today Liquidity Stress is at its worst since February 2010 - all forewarning of a notable rise in defaults in 2016... and what can the Fed do?
Worryingly, as Credit Suisse explains, US monetary conditions are now the tightest that they have been since 2009...
In mid-January, just as the market was crashing due to among other things concerns that the economy was prolapsing, we had a brief exchange with the Atlanta Fed asking them why they waited until the after the close of trading to report that its Q1 GDP estimate had crashed to the lowest yet, at 0.6% (incidentally almost exactly what the final Q1 GDP print was), a number that is traditionally revealed at or before noon. The Fed's answer: "Apologies for the late-day data release. Nothing more nefarious than technical difficulties, which we believe have been resolved."
Via GEFIRA,
The Bank of Japan’s unexpected rate cuts to negative are a desperate attempt to help out the FED and to support the dollar at the expense of the aging Japanese population.
The negative market reaction to the FED’s rate hike of December shows that investors do not believe an economic recovery in the US is underway. Two reasons make central banks start to raise interest rates.
The US military faces five “big challenges,” Ash Carter told the Economic Club of Washington on Tuesday.
Those challenges are: Russia, China, North Korea, Iran, and ISIS.
So essentially, the exact same “challenges” Washington has been trotting out for years to justify hundreds upon hundreds of billions in defense spending, only with one CIA pet project gone horribly awry added to the list.