Election season is one of the more entertaining aspects of politics. While many people today may not take these events seriously, they certainly provide a unique spectacle. The antics of candidates often reveal a level of absurdity that surpasses anything Hollywood could script. We witness a parade of clowns, cads, and cons vying for your vote.
With the mid-term elections looming, the political theater has gifted us a variety of amusing characters. One highlight comes from former Secretary of State Hillary Clinton, who recently made a remarkable statement.
“Don’t let anyone tell you it’s corporations and businesses that create jobs,”
said Clinton
during her campaign for Martha Coakley, the gubernatorial candidate from Massachusetts. “You know that old theory, trickle-down economics? That has been tried, and it has failed. It has failed rather spectacularly.”
Continue reading
This month marks the planned termination of quantitative easing. The Federal Reserve aims to taper its bond-buying program from $85 billion monthly down to zero by reducing it by $10 billion each month.
However, this does not mean the Fed will abandon its extreme monetary interventions. The federal funds rate remains nearly at zero, a phenomenon that began in 2008.
Six years later, that rate is still firmly held down, with the Fed indicating that they won’t consider raising it for another six months. Naturally, this timeline could shift depending on prevailing economic conditions.
The Fed has shown an inclination to adjust their approach on the fly, leading to uncertainty about their course of action regarding interest rates and the expansion of the money supply.
Continue reading
What a Correction Feels Like
By Jared Dillian, Editor, Bull’s Eye Investor
Back in the summer of 2007, when I was associated with Lehman Brothers, I had an unusual vacation planned in the Bahamas. Throughout my six years with the firm, I had taken a mere five vacation days. This trip was to a semi-primitive resort on Cat Island, known to be one of the most remote islands in the Bahamas, where the August heat can be quite intense.
Sensing potential trouble on the horizon, I bought 30-strike call options on the CBOE Market Volatility Index (VIX) prior to my trip. My gamble was that volatility would spike significantly during my absence. These options, costing over $100,000, would only hold value if a market panic ensued. I instructed my colleagues to sell the options if the VIX surpassed 35.
Continue reading
The world economy faces significant challenges. Europe’s economic growth is faltering, while Japan’s economy has shrunk at an annualized rate of 7.1 percent. Today, however, our focus shifts to China, whose previously unstoppable growth engine seems to be hitting a wall.
When an economy decelerates, underlying issues that were masked by growth begin to surface. After years of stimulating the Chinese economy with borrowed capital, the accumulated mistakes and economic distortions are now glaringly apparent.
For instance, there’s an alarming overcapacity of real estate. According to Chinese statistics, cities have constructed enough housing for 97 million new urban residents, yet only 35 million have actually relocated over the last five years—leaving a staggering surplus of 62 million potential “ghost” cities.
Typically, ghost cities emerge after a prolonged period of economic success. However, as the conditions that sustained that success change, demographic shifts occur, reminiscent of the situation in Detroit. Once home to 1.8 million residents in 1950, its population has dwindled to just 688,000 today.
Continue reading
In summary, the articles provided a humorous take on the absurdities of election season, insights into Federal Reserve policies, personal experiences in the finance sector during a critical time, and an analysis of China’s economic challenges. Each piece highlights the unpredictability of political and economic landscapes, urging readers to remain curious and vigilant amidst the chaos.
