Moon Kil Woong is currently a VP at a SME. Previously he was a tech stock consultant, VP of Research at ING, and sell side Director at Crédit Agricole Indosuez. Moon Kil Woong has a Masters in Public Administration from SJSU.
He contributes to both TalkMarkets and Seeking Alpha. You ...
more Moon Kil Woong is currently a VP at a SME. Previously he was a tech stock consultant, VP of Research at ING, and sell side Director at Crédit Agricole Indosuez. Moon Kil Woong has a Masters in Public Administration from SJSU.
He contributes to both TalkMarkets and Seeking Alpha. You can see his articles on TalkMarkets
here, and on Seeking Alpha
here.
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Latest Comments
The Fed Did One Thing Right In The Great Recession. But It Wasn't Enough
It has become extravagantly clear the Fed's actions only stabilized and made TBTF banks and their executives richer while potentially purposefully killing economic growth to ensure QE and zirp rates that enable TBTF banks to prey on other banks and grow bigger. The Fed should never be given the right to create liquidity again, because they clearly can't even manage interest rates let alone distribute wealth and liquidity through QE in any way that isn't obviously corrupt in nature.
The Fed Prepares To Dive
Agreed, except in food, housing, education, and medical care. Or otherwise, everywhere it counts. Even so, as Federal Reserve policies further weaken our capitalist instincts, our growth and economy will even curtail economic growth further which will kill inflation even there as well.
The sad fact is debt is swelling even as growth is poor and is getting even worse. This is a recipe for disaster.
Dogs Of The Dow Continue To Exhibit Strength
The bottoming of commodities is usually the alarm bell for the next wave of a economic decline as it reaches into the service sector and credit. If it gets worse from there it will pummel asset prices including the stock market and housing which if artificially propped up fall the worst when the succumb.
Remain vigilant. Most of the downturn affected overseas, but the rest of it will hit home if it continues. Commodities didn't cause the downturn, they are just the first to react as economists already know.
Biweekly Economic Review
The real picture is YoY not week to week, especially leading in March which is typically always better than prior. The worrisome picture is the continued rise in housing against a drop in everything else reminiscent of the last downturn. Not only does high rent and housing deprive people the ability to spend money and worsens credit scores, it also often leads to gross inaccuracies of wealth and leads to overleveraging. This is almost always the case of horrible Federal Reserve policies which have been in operation for years now.
Given the massive investment in gambling on real estate trusts and the massive re-influx of flippers, cash purchases, and low money down players banks will once again get hit even though they dump much of the future bad home loans on taxpayers through Fannie and Freddie Mac.
The Fed Prepares To Dive
Lending to decreasingly credit worthy people is no financial utopia. It is a recipe for disaster because its unsustainable and usually those people can not borrow or spend more. Without a real increase in earnings potential and thus creditworthiness, it is all just a great way to screw people who can't afford to borrow by loaning zirpish money to people at ever increasing rates as their credit falls lower and lower.
TBTF banks want QE and zirp forever because in essence it lets them borrow for nothing, not care about depositors, and lend at a decent spread. If they can raise rates and keep it they love it which is sort of happening already. The rise in lending rates far exceeds the.25% rate increase by the Federal Reserve.
The downside is the junk market which has been already lending at absurdly high rates and lent to businesses and people who had been deemed to be overly leveraged in the first place is crashing. Banks are doing all they can to quiet the markets so they can dump it off on clients much like they did in the last downturn. The Fed pushing fake arguments about a strong recovery is just part of the game.
It behooves us all to read actual financial data that points to a weak economy that is getting increasingly volatile and stretched. Your point about recent massive lending is insightful and scary. They sound like they will lend money to your dog these days. Unless your dog can earn money and real credit it will do no good. The Federal Reserve needs to study economics and rather than messing with the monetary system, realize the main purpose of money is to enable the creation and exchange of real goods and services which QE and zirp does not make.
Jobs Report Reveals A Lot About U.S. Economy - Mostly Not Good
The attack on imports is misfounded. The reason why the US has moved so heavily towards imports is due to the US misfounded policy of running massive debts and the Federal Reserve's easy money policies that would otherwise create inflation. In order to counter act that US businesses have had to constantly find cheaper ways to produce to counteract that.
Still the US has sun out of control debt which has now made it almost impossible for the US to self fund its own debt and made us dependent on China and others to carry our massive federal government debt load. The underpinning of a strong government, strong economy, and strong defense lays first in economic strength and financial soundness. This we have been giving up and the bad results are starting to take their toll as the Federal Reserve plumbs new financial lows to fight the fundamentals of capitalism which we all now suffer from in ever increasing amounts.
If it were the Federal Reserve's choice they would be screaming, France, Japan, and China here we come. We disavow capitalism and have nothing to do with democracy, ethicalness, or anything else but enriching the big banks we are elected from. Socialism and programmed economics all the way. We must do something about this unelected part of our government before it gets any worse. They are more financially reckless than anyone else in America besides maybe the fat financial firms they enrich who lie to clients and dump losses on them before every downturn and then gleefully buy it back from them only to try to do it again to them in the next cycle.
Solid Gains-Small Loss
We aren't out of the woods yet. This still counts only as a recovery although the duration is much better than recent blips upwards. Inflation increased which is good the Fed is indication but if it remain in housing, rents, and food it is liable to push down actual consumption not increase it. It looks good on paper but it may not look good anywhere else and may actually prevent the Fed from not raising rates further. Basically, rates should rise until rents and housing stop rising meaning a real estate collapse.
Watch out banks. Higher rates may not be as good as you are telling investors.
Gold-Silver Ratio Breakout Report, 28 Feb, 2016
If you live in a negative interest rate part of the world, gold will look pretty good to have. Even if the EU bans big bills they can't keep people from buying gold and giving them back the increasingly worthless money they print.
The Fed Prepares To Dive
Japan is where the US is heading thanks to a foolish central bank. QE is horrific because it doesn't stimulate the economy and it enriches the few without work and arguably encourages banks to gamble even more. Negative rates is yet more of the same taking money from savers and depositing it into the banking sector either to banks or the central bank. As such their are clear indications it's unconstitutional for a good reason. It is a tax by a non-government agency without representation. It is also corrupt as is QE as well. And monetary alignment that deprives value from one and redistributes it to another without providing goods or services and without public support through a vote by a democratically elected government is corruption besides, maybe interest rate policy.
However, clearly the Fed's use of interest rate policy to zirp constantly is even questionable, artificially depriving the retired interest on income. The Fed was given the power to modify interest rates to help the economy when it goes into recession or depression. What it is doing now is more managed economy socialist than a rational economic policy. Given no one gets to votes in Federal Reserve members it makes sense that it has become corrupt and supports socialism because they benefit most from it. What they are supporting is not capitalism but socialism in monetary policy thereby making whomever you vote into government irrelevant.
This is why our founders gave Congress the power to create money not a central bank. And why our forefathers banned the last two central banks because they played politics, ruined the economy, misused their power, and were corrupt. It is best for us to wake up and reign in the Fed before its too late.
Sadly, even Bernie Sanders can see the corruption the Federal Reserve is currently embarked on. Negative interest rates guarantees you and your kids will live in a monetary dystopia where capitalism is more akin to socialism and you will have no way to move up because what matters is how close you are to the one who mints money than gaining or having any amount of the evaporating money.
"Trump Must Be Stopped" Plead 'The Economist' And CFR As Financial Establishment Panics
This is if you believe Trump to be speaking what he believes. Last time he ran for President, less than 10 years ago, he supported universal healthcare, gun control, identified himself as a democrat and thought Hillary was the best in foreign policies. One should not vote for Trump because one can not trust him first and foremost and is either an outright liar or goes from extreme to extreme like a kid on crack cocaine even if you discount his sayings about marrying his daughter except she is his daughter and the alleged sexual harassment case.
Secondly, then one should not vote for him because he is corrupt. He has a long history of bankrupting investors in his businesses to protect himself, starting frauds like Trump University, trying to use eminent domain on private citizens for personal gain, etc. There is a reason his father refused to be in business with him and the reason why he could sell the Trump name was because of his father not himself. It doesn't matter how you got wealthy if you did it by screwing people like he did save his inheritance from his father.
I dislike entitled dynasties by heirs that don't deserve what their family's did like most Americans apparently. This includes not just the Clintons and Bush's, but also Trump. Unfortunately, I feel lots of them are looking to become president for the benefits of personal wealth more than to help America. Shameful.
Last; his policies to win the Republican nomination are not just uneducated, they are odious. I don't think it takes a lot to figure that out which is why he's at huge negatives with voters with college degrees. What needs to be done is educating others about what he is besides rich.