Commentary The recent stock market rally is a trap. This is because Wall Street is vastly underestimating how hawkish the Federal Reserve will have to get in order to fight inflation, and how much weaker earnings and GDP growth will become as a result. The fact is Federal Reserve Chairman Jerome Powell has finally become…
Fade the Post Rate Hike Rally
March 28, 2022
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Business & EconomyBusiness Columnistseconomic policieseconomyinflationMarketsOpinionrate hikesU.S. Federal ReserveViewpoints
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Waging War On Fossil Fuels Enflames Inflation
When you pull aside the curtain of its moral pretensions, the green movement of global warming fanatics is just another socialist scheme to replace the free enterprise’s real-world judgment of how to navigate the economic long term with coerced, illegitimately law-enforced faith in government control. There is one preeminent tool that players in the economy—meaning…
China’s Economy Remains ‘Uninvestable’; Liu He’s ‘Promises’ Are Fatuous Under CCP’s Criminal Rule
Commentary Earlier this month, Liu He, China’s vice premier for economic affairs, stepped up to offer some nebulous assurances of “reforms” to try to reverse what had been an earlier rout in Chinese equities. Western investors bought the messaging, and the markets recovered, but Liu’s assurances are illusory. Liu’s intervention was necessitated by what Bloomberg…
The Fed Increased Rates—Now What?
March 27, 2022
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AnalysisBusiness & EconomyBusiness Columnistseconomic policiesFedFederal Reserveinflationinterest ratesOpinion
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News Analysis With inflation running well above the Fed’s stated target, earlier this month the Fed made its first steps in an attempt to quell inflation, raising the federal funds rate by 25 basis points. A 25 basis point interest rate increase on its own is unlikely to make a dent in inflation. But the…
What Lies Ahead for the US Housing Market
Commentary The historically hot U.S. real estate market is at a crossroads. The Federal Reserve finally raised interest rates in March in an effort to combat soaring inflation. The average mortgage interest rate has, unsurprisingly, also increased to the highest level since 2019. After average 30-year rates hovered in the 3 percent range in 2021,…
China’s Insider Influence Over Metals Trading Creates Advantage for Its Domestic Enterprises
March 27, 2022
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Business & EconomyBusiness ColumnistsChinaChina Business & EconomyCompaniesInvestmentMarketsMetals TradingNickelTHGTsingshan
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Commentary Chinese stainless steel giant Tsingshan Holding Group (THG) has for many years relied on short selling to reduce its future costs for nickel, a key component of stainless steel and a major ingredient in lithium-ion batteries. But rather than nickel prices falling as hoped, the price skyrocketed to over $100,000 per ton on March…
The Slow Motion Evergrande Wreck
March 25, 2022
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auditingBusiness & EconomyBusiness Columnistsdefaultevergrandeexcess leverageOpinionThinking About China
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Commentary Corporate bankruptcies in the United States work under very well-defined laws and procedures about who gets paid, in what order, and based upon contractual or implied understanding. In China, bankruptcies remain the largely wild rule of the jungle matters that can take years of behind-closed-door fighting to divvy up corporate carcasses. Evergrande and the…
The Failure of Central Banking: Quantitative Easing
Commentary The world economy has been on a perilous road for over a decade. The Global Financial Crisis (GFC) that hit the world in full force in September 2008 led central bankers and the government to issue extra-ordinary measures to stop the financial sector from melting down. Governments, for example, issued blank guarantees to bank…
A New Arms Race
Commentary “When Russia annexed Crimea and meddled in Ukraine’s Donets Basin, or Donbas, region in 2014, its military revealed new technology, organization and tactics—and upended much of the U.S. military’s thinking about modern warfare.”— Jason Sherman, Scientific American Defense. By most accounts, the annual military budget of the Russian Federation is a small fraction of…
China’s Economy Hits a Wall
March 25, 2022
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Business & EconomyBusiness ColumnistsChinaChina Business & EconomyeconomyOpinionThinking About China
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News Analysis While the Chinese Communist Party (CCP) predicted 5.5 percent economic growth in 2022, the indicators say that Beijing is under the illusion of wishful thinking. COVID-19, a failing property market, sanctions from the Uyghur genocide, secondary sanctions from the Russian invasion, Xi Jinping’s reforms, and regulatory crackdowns are hitting China’s economy and leading…
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