The Federal Reserve Faces Insolvency As It Attempts Impossibile Rate Hikes

As has been posited here on Money Daily and elsewhere, the Federal Reserve is facing a severe solvency crisis, due primarily to the bank bailouts from 2008-09.

In a headline story on - of all places - Yahoo! Finance, the Fed faces a real, dangerous situation if and when they try to normalize rates - something many economists say is nearly impossible to do without destroying the entire monetary system of the United States, and, ostensibly, the world.

The article fleshes out how US taxpayers could be on the hook for the Fed's bad debts, stemming from overpayment on mortgage and treasury note, bills and bonds in years past, specifically during the various QE sessions from 2009-2014.

It's long been held that the Fed was buying bad mortgage notes and bonds at par, when the true value of these slips of counterfeit are more than 30-70% lower. This effectively puts the Fed itself in a condition known to many in the world of finance as either insolvent or bankrupt.

Insolvent is the operative term here, since there is no functioning body by which the Fed can go to for a reorganization or liquidation, as do businesses or individuals in bankruptcy.

The solution would be to dissolve the Federal Reserve, extinguish all debts (which is anything numerated in US dollars), and have the US government - as is required by the constitution - issue a new currency, with gold and/or silver as backing, as opposed to the "full faith and credit" backing to which Americans have become accustomed.

This, as the presidential race looks to be one which a certain maverick billionaire, Donald J. Trump, has a solid chance of winning, could be the beginning of the end to the financial repression initiated by the Fed and its member banks and a start toward a return to honest money.

Capping off the week was a speech by Fed Chair Janet Yellen, characterized by the media as being "hawkish" for a rate hike in June or July.

Apparently, investors either disagreed or threw caution to the wind in the face of the three-day Memorial Day weekend, boosting stocks late in the session, ending what was a banner week for US stocks, especially the high-leverage, high-flying NASDAQ.

On the week:
Dow: +372.28 (+2.13%)
S&P 500: +46.74 (+2.28%)
NASDAQ: +163.95 (+3.44%)

For the day:
S&P 500: 2,099.06, +8.96 (0.43%)
Dow: 17,873.22, +44.93 (0.25%)
NASDAQ: 4,933.50, +31.74 (0.65%)

Crude Oil 49.42 -0.12% Gold 1,213.20 -0.78% EUR/USD 1.1114 -0.71% 10-Yr Bond 1.85 +1.54% Corn 412.25 +0.98% Copper 2.11 +0.38% Silver 16.21 -0.81% Natural Gas 2.16 +0.65% Russell 2000 1,150.45 +0.94% VIX 13.08 -2.61% BATS 1000 20,677.17 0.00% GBP/USD 1.4613 -0.37% USD/JPY 110.3725 +0.56%

Flat Is Good Says Yahoo! Finance, Which Should Know

"Why a flat day is good for the markets" screams the headline on Yahoo! Finance at the close of trading on Thursday.

Of course closing flat is good. Up is good, down is good, flat is good. Darn, the markets are even good when they're closed.

It's all about the narrative, with the financial media desperately trying to keep convincing an ever-shrinking number of "home-gamers" (trtaders with their own individual accounts), 401k holders, and other interested parties that the economy - and the stock market in particular - have never been better, or at least to convince themselves that they are convincing somebody.

It's a complete crock.

The global economy is, and has been, on its knees since the fall of 2008. Everything after that is a facade, made possible by trillions of dollars spent by the Federal Reserve and matching amounts of yen, yuan, euros and rupees by corresponding central banks, stock buybacks, income sheet fraud, mark-to-fantasy accounting, high valuations and the lack of any real price discovery mechanism.

It's a sham.

Central bankers are idiots who have walled themselves off from the general population and can't seem to find their way out of the boxed-in condition they've created for themselves.

So, we have Trump and Sanders (forget Clinton, she's a has-been, and a poor candidate who cannot win in a general election) vying to be the most powerful man in the world (don't tell Mario Draghi or Janet Yellen, though), an economy that can't produce nominal growth of more then two percent, stupid wars, uncontrollable mass migration, and a host of other problems.

But, a flat day is all good, all the time. Glad Yahoo Got the memo. They've been flat (or down) for a long time. Love ya some Marissa Mayer (Yahoo CEO). She's cute. She's smart. She's blonde. She's... no, don't go there.

She's an idiot, a poser, a fraud. Just take a look at Yahoo's performance since she became CEO. Courtiers to the company are looking at a take-under sometime late this year or early next. The $35-ish share price is a bit rich for their tastes. Something more like $18-24 may be more like it.

Flat Is In... Again!
S&P 500: 2,090.10, -0.44 (0.02%)
Dow: 17,828.29, -23.22 (0.13%)
NASDAQ: 4,901.77, +6.88 (0.14%)

Crude Oil 49.33 -0.46% Gold 1,220.00 -0.31% EUR/USD 1.1193 +0.31% 10-Yr Bond 1.82 -2.51% Corn 407.75 +0.74% Copper 2.10 -0.05% Silver 16.34 +0.52% Natural Gas 2.15 -1.51% Russell 2000 1,140.39 -0.06% VIX 13.67 -1.65% BATS 1000 20,677.17 0.00% GBP/USD 1.4665 -0.25% USD/JPY 109.7650 -0.39%

Smooth Sailing As Stocks Approach Top Of Range

It's such a sham, there's little to say other than 18,000 on the Dow approaches, a level the genii marketeers have yet been able to surpass.

The likelihood is that any rally over 18,000 will be sold off within days, if not minutes.

Tomorrow's headline will scream about the Fed raising rates, thus scaring investors. Friday, Federal Reserve Chairwoman, Janet Yellen, speaks at Harvard, which should provide what the talking heads are calling "clarity."

Harumph.

Happy Motoring!
S&P 500: 2,090.54, +14.48 (0.70%)
Dow: 17,851.51, +145.46 (0.82%)
NASDAQ: 4,894.89, +33.84 (0.70%)

Crude Oil 49.74 +2.30% Gold 1,224.20 +0.03% EUR/USD 1.1154 -0.03% 10-Yr Bond 1.87 +0.59% Corn 404.00 +1.64% Copper 2.10 +0.02% Silver 16.33 +0.42% Natural Gas 2.16 +0.75% Russell 2000 1,141.02 +0.50% VIX 13.90 -3.61% BATS 1000 20,677.17 0.00% GBP/USD 1.4701 -0.01% USD/JPY 110.2160 +0.01%

Stocks Rock, Regain 17,500+ Range

Why not?

Presented without commentary.


S&P 500: 2,076.06, +28.02 (1.37%)
Dow: 17,706.05, +213.12 (1.22%)
NASDAQ: 4,861.06, +95.27 (2.00%)

Crude Oil 49.24 +1.28% Gold 1,227.50 -0.14% EUR/USD 1.1142 +0.01% 10-Yr Bond 1.86 +1.14% Corn 398.50 +0.19% Copper 2.07 +0.05% Silver 16.24 -0.09% Natural Gas 2.14 -0.19% Russell 2000 1,135.31 +2.15% VIX 14.42 -8.85% BATS 1000 20,677.17 0.00% GBP/USD 1.4622 -0.02% USD/JPY 110.0165 +0.04%

Stocks Finish Red As Global Economic Data Exhibits Slowdown

News out of Japan, Europe and the US put a negative spin on markets to open the week.

After the Dow closed exactly at 17,500 on Friday, there was fear that a further decline below the level - which had held for more than two months (March 17 was the last time the Dow closed under 17,500) - might trigger a more precipitous decline.

However, with bad news all around, traders figured that the Fed would have enough sense to pause on a rate hike at their June meeting.

Japan experienced deep declines in both imports and exports to major trading partners such as the USA and China. It was the seventh consecutive monthly decline in exports from Japan.

Europe's Manufacturing PMI was below estimates; the US had similar results, with the lowest Markit Manufacturing PMI (50.5) since the financial crisis in 2009.

Stock traders put on a stern face, keeping the major averages in the green most of the day, but stocks slumped in he final hour of trading, with all three majors losing ground.

Now, it appears that not only is the Federal reserve intent on raising rates sooner rather than later, but it is also becoming crystal clear that the general global economy is ailing as well and may be approaching recessionary levels.

This is not exactly how the masters of the universe wanted to start the week, though they have nobody except themselves to blame for whatever erosion of the global economy and their precious stock certificates occurs in coming months.

Stormy Monday:
S&P 500: 2,048.04, -4.28 (0.21%)
Dow: 17,492.93, -8.01 (0.05%)
NASDAQ: 4,765.78, -3.78 (0.08%)

Crude Oil 48.12 -0.60% Gold 1,249.50 -0.27% EUR/USD 1.1222 +0.03% 10-Yr Bond 1.84 -0.59% Corn 397.75 +0.82% Copper 2.06 +0.02% Silver 16.41 -0.77% Natural Gas 2.06 +0.05% Russell 2000 1,111.37 -0.08% VIX 15.82 +4.08% BATS 1000 20,677.17 0.00% GBP/USD 1.4484 -0.16% USD/JPY 109.2430 -0.81%