~by Sean Paul Kelley Courtest my alma mater Morgan Stanley, we have this graphic that perfectly depicts what the AI-Ponzi scheme looks like and just how incestuous it truly is: Is any other comment necessary?
financial crisis
~by Sean Paul Kelley Headwinds: “a headwind blows against the direction of travel of an object . . . decreases the object’s speed and increases the time required to reach its destination.” Rip Tide: “A rip is a strong, localized, and narrow current of water that moves directly away from the shore, cutting through the […]
~by Sean Paul Kelley I’ll begin, as usual, with the economy. JP Morgan lays odds for a global recession at 60% now. Causes? According to JPMorgan it’s threefold: the conflict in Iran, the tariffs and AI. But JP Morgan is forgetting another huge variable, the private credit/shadow credit unwind happening in real time. Blackrock halted […]
~by Sean Paul Kelley Every credit cycle is different: they don’t repeat, but they do rhyme at the end. Phase One: the Expansion The credit cycle begins when intense speculation drives asset prices into bubble territory. This time around AI is the prime mover. AI stocks have clearly inflated, irrationally, and dangerously market averages. Nvidia’s […]
Roughly speaking there are two types of corporations in China. State owned (SOE) and private. During the policy driven real-estate bust, the countries biggest builder, Evergrande, went under. But there was an assumption that the government would bail out real-estate SOEs. Well the largest one, Vanke, is going under, and the central government is going […]
I’ll keep this mercifully short. One commenter in my Friday night econ news post asked, in a kind of oblique way, what would I do in this environment. Okay, I’ll play — but not without stating firmly and loudly that I am not dispensing investment advice, nor am I licensed any longer to do so. […]
~by Sean Paul Kelley Good heavens, the economic bad news is piling up like a bad car wreck. So, let’s do some serious rubbernecking, folks, because there is a lot of fucked up shit to watch. Just don’t step in it, okay? We begin with widepsread reports of large institutional investors (hedge funds, investment banks, […]
Ever since Greenspan took over the Fed and the 87 crash when they figured out their playbook, the US has only had unavoidable stock market crashes. The Fed is always there to juice markets higher and to jump in at the least sign of a normal (pre-Greenspan) market correction. But sometimes the irrational stupidity overwhelms […]
by Patrick Honohan*, Governor of the Central Bank of Ireland (2009-15) That politicians should leave it to central banks to set interest rates in such a way that price stability is maintained (and restored whenever it is lost), has been an article of faith with most economists, especially since the stagflation of the 1970s given […]
by Basak Kus* It has now been almost two decades since the 2007-10 financial crisis shattered the exuberance that surrounded American capitalism in the 1990s. The immediate issues the crisis posed—negative growth rates, rising unemployment, and falling stock prices—were addressed long ago. Crises like the Great Recession, however, are more than temporary setbacks; they necessitate […]