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Gary North On The Coming Inflation
The Federal Reserve System faces a dilemma of its own creation: the doubling of the monetary base. You can see it here.
The only thing that is keeping this from creating mass inflation is the decision of commercial bankers to deposit the bulk of this increase with the Federal Reserve. The banks are not lending out this money. Neither is the FED. This money does not legally belong to the FED.
There is a reason why the banks are not lending money to the public. Instead of taking the risk of lending, the banks are depositing hundreds of billions of…
Fed to Cut Rates at Next FOMC Meeting as U.S. Recession Appears Likely
The U.S. Federal Reserve is likely to cut rates tomorrow (Wednesday), possibly in conjunction with central bank counterparts in Europe, as fears of a global recession have intensified. However, the Fed has little room to maneuver as its benchmark Federal Funds rate is already at 2% and analysts remain skeptical that reducing it any further keep the United States from sliding into a prolonged recession.
The next meeting of the Federal Open Market Committee is scheduled for tomorrow Wednesday Oct. 29. There is no doubt that growth will be the central issue of the committee’s discussion, as fears of a global…
28Oct2008 | Money Morning | Comments Off | ContinuedFinancials Rally Back
“You know, you saw subprime go first, and then, on a slight lag, you saw home equity, and now in the lag, you’re seeing prime go. And it’s exactly the same loss factors. But remember, the components of where we are in the states…[are] very different. And we started doing more jumbos in ‘07, so a lot of that is — part of that is ‘07 vintage, which I think I told you at the time we were going to do and grow our balance sheet and gain share. And we were wrong. You know, we, obviously, wish we hadn’t…
22Aug2008 | Whiskey and Gunpowder | Comments Off | ContinuedNew Report Says Feds Growing Increasingly Likely to Recapitalize Fannie and Freddie
By availing itself of a new housing bill signed into law last month, the U.S. Treasury Department is growing increasingly likely to recapitalize Fannie Mae (FNM) and Freddie Mac (FRE) in the months to come – all on the taxpayer’s dime, the weekly financial newspaper Barron’s reports in its edition yesterday (Monday).
Both shares took another beating yesterday, as Fannie Mae’s stock slid over 22% with a decline of $1.76 to close at $6.15. Freddie Mac, seen by many as the weaker of the two, fared even worse with a decline of over 24%, as shares shed $1.43 to close at…
19Aug2008 | Money Morning | Comments Off | ContinuedAnnual Reports: How to Understand the Financial Picture of any Company
Each April, flimsy paperback “books” wrapped in plastic flood investor mailboxes. Hidden within these darkly covered annual reports is where the rubber meets the road in terms of profitable investing.
Earnings season offers us a deep look into the views of management. We have thousands of Form 10-Ks, which all publicly traded companies file with the SEC, at our disposal. By reading these annual reports, you can uncover awesome opportunities. Equally as important, they can give you clear indicators of when to sell a stock.
A lot of people glaze over when these large packages arrive. But it’s actually an excellent use…
14Aug2008 | Investment U | Comments Off | ContinuedEconomic Schools of Thought
Two Schools of Thought
There are two ways of studying economic theory. One approach is mathematical, and has been much enhanced by the computing power available to the individual economist. The other is historical and relies on the accumulated understanding of economic theory and practice.
The events of 2007 and 2008 have shown the limitations of the mathematical method. The credit crunch was not foreseen by anyone that I read, but it came as a shock to the number crunchers — it took them completely by surprise.
It did not come as a shock to the economic historians, who happily settled down to…
18Jul2008 | Whiskey and Gunpowder | Comments Off | Continued
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