The Meek Shall Inherit the Earth

Guest Post by Tim Knight

These videos are not “news”, but they are quite interesting.

The first one, from early in 2009, shows Congressman Alan Grayson grilling Donald Kohn (of the Federal Reserve, in case it wasn’t screamingly obvious already) about where the $1.2 trillion of taxpayer money was sent (we all know the answer – Goldman Sachs – but it’s fun watching Kohn-head squirm anyway).

The more interesting video is below, in which the same Congressman Grayson queries the most evil-of-evil attorneys Scott Alvarez about whether the Fed manipulates the stock and futures markets (ha! ha ha!). I’m shocked to listen to Alvarez’s voice; I thought he would be a gritty, gruff, rough-and-tumble, go-to-hell kind of personality.

Instead, he sounds like an insecure hairdresser whose employment at a Castro Street styling salon is in question. Do all members of the Fed have these quivering voices, such as, famously, Ben Bernanke’s? In their tiny, blackened souls, do they know deep down they are evil liars, and what’s left of their conscience is tugging at their vocal cords? I’d say the answer is an irrefutable “yes.”

US Stock Market Indexes

Guest Post by

Indexes Snapshot
Symbol Last Change %
DJ 30 INDUSTRIALS 16817.94 +12.53 +0.07%
S&P 500 CASH 1961.63 -2.95 -0.15%
SPDR S&P 500 196.12 -0.31 -0.16%
QQQQ VOLATILITY INDEX 10.48 +0.33 +3.16%
iShares RUSSELL 2000 INDEX 110.985 -0.085 -0.08%


GENERAL STOCK MARKET COMMENT: The U.S. stock indexes closed mixed today. There were no major, unsettling news developments occurred over the weekend, which limited selling interest in stock indexes. Focus is turning to the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve’s regular meeting Tuesday and Wednesday. As usual, the Wednesday afternoon statement from the FOMC at the conclusion of the meeting will be very closely scrutinized by the market place. Most believe the Fed will formally end its monthly bond-buying program, called quantitative easing. Attention is also on the two key “outside markets” that impact many other markets: the U.S. dollar and crude oil. The dollar index was weaker Monday but still hovering not far below its recent four-year high. Meantime, Nymex crude oil prices were lower and hovering near a two-year low. The next downside technical target for nearby crude oil is $75.00 a barrel, which I believe will be reached in the coming weeks. The much-anticipated stress test results on European Union financial institutions were released over the weekend. While there were some EU banks that failed the tests, overall the results were not deemed threatening to the EU financial system. There was another downbeat economic report coming out of the EU Monday, as Germany’s Ifo business confidence index came in at 103.2 in October, versus 104.7 in September. The Ifo reading this month was at a two-year low.

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George W. Obama

Guest Post by Bill Bonner

Among the many things still to be discovered is the effect of QE and ZIRP on the markets and the economy. We can’t wait to find out.

The Fed has bought nearly $4 trillion of bonds over the last five years. You’re bound to get some kind of reaction to that kind of money.

But what?

Higher stocks? More GDP growth? Higher incomes? More inflation?

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Biiwii Raison d’être

[post sticks to top of page for a while; new content directly below!]

Well, I am settling in on the idea that will be used for subscriber oriented activity like interim updates, but also provide plenty of public content as Biiwii has done.  This will tend to be the more technical content, often dovetailing well with NFTRH themes.  Charts, geeky economic graphs and of course market ratios and indicators.

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Economic Snapshot

Excerpted from this week’s Notes From the Rabbit Hole, NFTRH 314:

Note; the post also appears at, which is 90+% ready for prime time!

Our view has been that a stronger US dollar would eventually start to eat away at corporate results, especially in the manufacturing sector and at US based companies with a global customer base. The decline in revenues thus far is something to be watched because where revenues go, earnings eventually follow.

[edit: the segment previous to this one reviewed a contrast between strong earnings and sagging revenues with companies that have reported earnings thus far]

An article by Doug Short published at Business Insider on Friday illustrates how the Economic Cycle Research Institute (ECRI) called for a recession in 2011 and was promptly made to eat that call first by Operation Twist and then by balls out QE3. All the while as ZIRP has quietly whirred along in the background for 6 years.

ECRI’s weekly Leading Index is flashing warnings again…


…while the St. Louis Fed’s Leading Index (incl. ISM data, Treasury spreads and State level housing permits and unemployment data) continues to slog around its 30 year average after the big recovery out of 2009.

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Tapering, Exiting or Just Punting?

Guest Post by James Howard Kunstler

Oh, that sound you hear this morning is the distant roar of European equity markets puking after the latest round of phony bank “stress tests” — another exercise in pretend by financial authorities who understand, at least, the bottomless credulity of the news media and the complete mystification of the general public in monetary matters. I rather expect that roar to grow Niagara-like as US markets catch the urge to upchuck violently. Problem is, unlike Ebola victims, they can’t be quarantined.

The end of the “taper” is upon us like the night of the hunter, conveniently just a week before the US election. If the Federal Reserve is politicized, the indoctrination must have been conducted by the Three Stooges. America’s central bank never did explain the difference between tapering and exiting their purchases of US treasury paper. I guess that’s because it has other interventionary tricks up its sleeves. Three-card Monte with reverse repos… ventures into direct stock purchases… the setting up of new Maiden Lane type companies for scarfing up securities with that piquant dead carp aroma. Who knows what’s next? It’s amazing what you can do with money in a desperate polity with a few dozen lawyers.

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Hi folks, is coming along but is not quite ready.

We’ll be using Biiwii quite a bit going forward as it will probably carry most or all guest posting and maybe some of my content as well.  So keep it bookmarked.

In the meantime, I am hoping to have running along smoothly within 24 to 48 hours.

Thank you for your patience!


More Wackoism

Guest Post by Doug Noland

Central banks win the day and week.

October 21 – Reuters (Andreas Framke, Eva Taylor and Paul Carrel): “The European Central Bank is considering buying corporate bonds on the secondary market and may decide on the matter as soon as December with a view to begin buying early next year, several sources familiar with the situation told Reuters. The ECB has already carried out work on such purchases, which would widen out the private-sector asset-buying program it began on Monday – stimulus it is deploying to try to foster lending to businesses and thereby support the euro zone economy. ‘The pressure in this direction is high,’ said one person familiar with the work inside the ECB, speaking on condition of anonymity.”

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Pivotal Events

Guest Analysis by Bob Hoye
Click for full report


Wall St. is One Sick Puppy

Guest Post by David Stockman via Stealthflation

Wall Street Is One Sick Puppy—–Thanks To Even Sicker Central Banks

Last Wednesday the markets plunged on a vague recognition that the central bank promoted recovery story might not be on the level. But that tremor didn’t last long.

Right on cue the next day, one of the very dimmest Fed heads—James Dullard of St Louis—-mumbled incoherently about a possible QE extension, causing the robo-traders to erupt with buy orders. By the end of the day Friday, with the market off just 5% from its all-time highs, the buy-the-dips crowd was back, proclaiming that the “bottom is in”. This week the market has been energetically retracing what remains of the October correction.

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Deflation is Getting Too Popular

Guest Post by Tom McClellan

Google Trends plot of deflation versus T-Bond prices
October 24, 2014

I cannot believe the volume of the news stories I am seeing in the financial media, with people worrying about impending deflation.  And as any card-carrying contrarian knows, when a topic gets too popular, you are near a turning point.

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