Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at the housing market in 2020. (See the Tangibles Investing section.)
Economy & Finance:
“Party Like It’s 1998”: A Quarter Of $3.2 Trillion In BBB-Rated Bonds May Be Junk
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At Zero Hedge: Mauldin: A Crisis Has Already Begun… We Just Don’t Know It Yet
Here is an excerpt:
“The Fed now has also become a big part of the monetization process via its purchases of T-bills which also drives banks into buying notes. The Fed’s balance sheet is now $335b higher than it was in September at $4.095 trillion. Again, however the Fed wants to define what it’s doing, market participants view this as QE4 with all the asset price inflation that comes along with QE programs.
It will be real interesting to see what happens in 2020 to the repo market when the Fed tries to end its injections and how markets respond when its balance sheet stops increasing in size. It’s so easy to get involved and so difficult to leave.
Declining foreign purchases are, in part, a consequence of the trade war.
The dollars China and Japan use to buy our T-bills are the same dollars we pay them for our imported goods. But interest and exchange rates also matter. With rates negative or lower than ours in most of the developed world, the US had been the best parking place.
But in the last year, other central banks started looking for a NIRP exit. Higher rate expectations elsewhere combined with stable or falling US rates give foreign buyers—who must also pay for currency hedges—less incentive to buy US debt.”
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How to strangle an economy: In 2020 record number of states cities and counties raise minimum wage