Inflation? I’m hard-pressed to think of a time in my life, outside of my early childhood, where people have been more convinced that we are going to experience inflation. Little proof is needed from my early childhood because mortgage rates were 12%+ with a variable rate – some of you may remember those days. For … Read more
Last Week’s 10% Drop Was a Preview After rumors that the stock market would rally as much as 50% this year by a “blow-off top,” last week the stock market suddenly reversed course and dropped 10%. In the past, the Federal Reserve would have injected liquidity into the banking system to minimize the downturn, but … Read more
The Fed’s $1.2 Trillion Short Volatility Position Ten years ago, this year, the mortgage bubble nearly led to the collapse of the entire banking system. The Federal Reserve (or Fed) responded with an unprecedented level of monetary and fiscal stimulus to save the banking industry which cost American taxpayers nearly $4 trillion that we will … Read more
Rising Bond Yields Crash Stock Markets Investors have been selling bonds to buy stocks this past year as they anticipate ever-increasing stock prices and higher inflation. It is important to understand that rising bond yields triggered the dot-com bust in 2000 and led to the unraveling of the mortgage bubble in 2008. The Federal Reserve … Read more