Archive For: July 2015

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Wall Street Hits A Dry Hole In The Shale Patch: Debt Is Tearing up the Fracking Revolution

Time and again, despite the collapsed prices of oil and gas, the players in the shale revolution have gotten more funding from Wall Street, whose ZIRP-blinded clients kept gobbling up the newly issued junk bonds, leveraged loans, and shares, taking on huge risks and hoping to make a little extra money in a Fed-laid minefield where all decent assets are way overpriced......

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Wall Street Prepares To Reap Billions From Another Main Street Wipe Out

Meanwhile, artificially suppressed borrowing costs and the attendant hunt for yield have led to record corporate issuance and voracious investor demand. In short, the primary market is booming while the secondary market has become a veritable no man’s land. If you need an analogy, try this: the crowded theatre is getting larger and more crowded while the exit keeps getting smaller.

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Why Systemic Function and ‘Dollar’ Matters

In case it isn’t clear, and it really isn’t, the lack of bank capacity matters in ways both indirect and direct. Indirectly, banking and the “dollar” are supposed to support the global economy. Instead, the eurodollar system came to dominate and now we live in its absence as economic trends developed from that domination (hello...

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Zombie Companies And The Anti-Schumpeterian Toxin------How Printing Press Money Is Deforming The US Shale Patch

Access to cheap cash via capital markets allows otherwise insolvent producers to keep drilling even as prices collapse, creating what are effectively zombie companies on the way to delaying the Schumpeterian endgame and embedding an enormous amount of risk in HY credit by flooding the market with supply just as demand from investors (who are delirious from hunger after being starved of yield by the Fed) peaks and secondary market liquidity continues to dry up. This dynamic has served to create a supply glut in a number of industries and has suppressed commodity prices in a self-feeding deflationary loop.

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Presenting America's $900 Billion Auto Loan Bubble In 6 Charts

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It Must Be All Fixed---------St. Warren Buffett Buys A Greek Island

If you want to see what unrestrained parasitic financial oligarchy ultimately looks like, look no further than the humanitarian crisis in Greece turned unprecedented billionaire opportunity. With global wealth becoming more and more systemically concentrated in the hands of “insiders,” empty flats bought for tens of millions of dollars in London and Manhattan no longer cut it. These guys […]

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Dodd-Frank At Five: It Has Frozen-In A Broken Banking System And Made It Worse

Today is the fifth anniversary of Dodd-Frank, the erstwhile government response to assure that the Panic of 2008 does not repeat. It was an ill-advised task to begin with as the panic itself took care of repetition. It is not, and never has been, past panic that should worry our future. Along with the legislation...

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Free Markets Are Determined to Fix This Franken-Economy!

You’ve probably seen the Jack Link’s Beef Jerky commercials where unsuspecting campers think it would be fun to mess with Sasquatch – an eight-foot tall, 400-lb. freak of nature. I

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Dotcom Redux: Meet Jet.com With Negligible Revenues, Big Losses, Amazon as Chief Competitor And A $3 Billion Valuation

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Mind The Dow Divergence-----Transports Are Signaling A Slump

  A Possible Economic Red Alert We have already remarked on the growing divergence between the Dow Jones Transportation Average (TRAN) and the Dow Jones Industrials Average (DJIA) on previous occasions. These two stock averages marked the beginning of technical analysis as we know it today. Charles Dow compared the action in the averages over […]

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