Tag Archive for Unintended Consequences

Various Distorted, “Unintended” Consequences

“Inventories of manufactured durable goods in February, up twenty-six consecutive months, increased $1.6 billion or 0.4 percent to $373.7 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.6 percent January increase. Machinery, up twenty-three consecutive months, had the largest increase, $0.6 billion or 0.9 percent to $62.2 billion. This was also at the highest level since the series was first published on a NAICS basis.” Europe banks are using funds to cut lending to firms, and increase holdings of Ponzi government bonds. As I reported yesterday one insolvent Italian bank, Unicredit is doing neither. With natural gas at extreme lows, it is not too surprising to read about some kind of industrial boom budding around this energy source. Even the government is pushing this theme. What participants fail to understand is that today’s cheap nat gas came about because producers were willing to destroy most of their capital developing the stuff to sell at a loss. I wonder if a boat load of bad lending sinks along side this distortion? Only in a Soviet Union ad hoc centrally planned sistema would participants think this was sound business [...]

The Bad News Is That Market is Celebrating What Was, Not What’s To Come

The cash generated by the ECB’s second big LTRO operation hit the US banking system last week. At the same time the Fed is still pumping cash into Primary Dealer trading accounts, and it just completed a big mid month cash infusion. This was all part of the master manipulators’ master plan, of which they…