So the Rich Get Richer…here’s how.
As I have been telling you, the Fed is pumping money creation at a 10% annual rate (M1 Seasonally adjusted H.6 Money stocks) while supposedly running a responsible center bank.
The reality always was that the Fed wouldn’t do anything prior to the election, because we’ve been saying, because the pseudo-libs who are mostly D’s know which way the bidding will run in November.
As a result, Asia was up overnight, Europe is following suit.
If it seems like the markets are on crystal meth, it’s because the Big Boyz at the top are having a field day while the distractions play out (Charlotte, Tulsa, Syria etc.) and the twin illusions of a functioning democracy and an honestly priced market play out.
The Considerate Analyst (I’ll play that part) tripped on this part of the Wednesday Fed statement:
“The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way.”
Yeah, been a while since we looked ate Fed-held MBS. (Mortgage-backed securities)
People tend to forget that the Fed (going from memory here) has what? Almost $2-trillion of mortgages they own as fallout from the Housing Bubble Collapse.
I kid you not.
According to the Fed’s own balance sheet over here, they’re holding as of last week $1.763 TRILLION of mortgage-backed securities.
Since MBO’s is just a collection of mortgages (discounted to perform like a bond, but they’re not), we can take a wild stab at just how much real estate the Fed owns by dividing their Big Number by the average home price in America.
Rather than wait for this month’s real number (due next Tuesday from the Case-Shiller, S&P, CoreLogic, and whoever delivered the bagels), we will estimate using $175,000 per mortgage. (That’s probably high…but follow my core logic, lol…)
Divide this into the Fed MBS dough ($1.76 Trillion) and we are nudged to conclude that the Fed is the mortgage holder on how many homes?
Yep: Fed seems to own 10-million homes which would make them what, the biggest real estate owner in the world?
That’s what it looks like from here.
When does it all get marked-to-market and what are the default rates and are they foreclosing on poor-pays….and….
Wait! Nothing to see here folks, just move along. Forget I mentioned it.
It’s maybe a couple of the clay feet under the economy, though, from where I sit.
Distracted Voting: Charlotte Smolders, Tulsa Next?
To be sure the incidents in both Tulsa and Charlotte are regrettable and sad.
But they are also – along with the re-fire of conflict in Syria – oddly timed.
That is because Monday night (9 PM to 10:30 PM) we are scheduled to see the first presidential “debate” although the format will be pretty lame, from what I have read so far.
Not that it will matter: The American public has been conditioned to accept third-party accounts of what happens in politics, despite having seen the reality as little as a minute or two earlier from the candidates themselves.
Elaine and I have been endless amused (did I mention disappointed?) by the caliber of the “kids” on the MSM. We would watch Trump or Hillary speak. Then, biased talking heads would come on and allege the candidates said this, or that, when nothing of the sort was ever uttered.
Poster Kids for Bias.
There’s a reason why the MSM is losing it to the Alt-Media: The MSM lie. No kinder way to put it.
Still, even the well-bribed MSM (which is what we consider huge national political advertising buys – bribes with clothes on) can not be trusted with something as critical as throwing an election.
For that we cue other distractions.
Take the female cop shooting the black fellow up in Tulsa. We are confident that there will be more trouble in Tulsa by simply looking at the travel plans of Al Sharpton who is organizing a “day of justice” for next Tuesday.
Would you take a nickel side bet on “cutaway for live coverage” of either Tulsa or Charlotte on pseudo-debate night?
Not that the debate itself will matter.
All it will take Tuesday will be the MSM passing-off Hillary as the “winner” and Trump being labeled the “loser” to bump Clinton II (the unimpeached one) back up to top the poles.
Even THAT may not be enough: So let’s resume bombing – in support of ISIS – in Syria.
There is a problem with this – and yet-another one the MSM has screwed the pooch on: Al Nusra and ISIS are both attacking the Shi’ite Assad regime where they can – and we have what’s perhaps best described as a schizophrenic foreign policy break going on.
At the State Department, the nasty nest of neocons has yet to renounce regime change while at least on the public face of it, the American public is being told by the Golfer in Chief that we are “fighting ISIS… “ No, not if they’re near Assad…
Which is why when stories about the latest air strikes come out, most neglect to mention whose jets are bombing during the ceease-fire (ours) and the whole thing slides into the fog of war.
Here is a fine example story of what I’m talking about. Eventually, way down deep in the story, your read that:
“Humanitarian deliveries had been a condition of the truce, now in tatters, negotiated by the White House and the Kremlin, but the government of Bashar al-Assad has consistently refused to allow aid into besieged eastern Aleppo. A US airstrike during the truce also inadvertently killed more than 60 Syrian army soldiers, prompting condemnations and fury in Moscow.”
This is not to be critical of the reporter, certainly editors play into this. Besides, there’s fewer of them to influence. Still, the point is that WE – the USA – violated the truce/ceasefire.
One clear-cut reason we would do that kind of thing? The Obama administration is still tied to the Clinton/Bush/Cheney/Obama neocon scum who have lost half a dozen countries due to their bankrupt policies. (Libya, Egypt, Yemen, Afghanistan, Iraq, and now Syria…)
Arab Spring sounded good in headlines, but it’s about as durable as Styrofoam which is what the post-modern “set” is made of.
Depending on how the other distractions work out, expect Syria to escalate front and center if the other distractions don’t get enough traction and Trump continues to actually pose a threat to the powersthatbe.
Don’t think we’re really THAT distracted? Well, Google News search shows 4.58 million page hits on the word [Jolie]…and that’s the pits, is it not?
Why the Market Rally?
Crack? Payoffs? Free Money? Don’t ask me.
Still, it’s odd to see when the Chicago Fed National Activity Index came out this morning:
“Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.55 in August from +0.24 in July. All four broad categories of indicators that make up the index decreased from July, and all four categories made negative contributions to the index in August.
The index’s three-month moving average, CFNAI-MA3, ticked up to –0.07 in August from –0.09 in July. August’s CFNAI-MA3 suggests that growth in national economic activity was slightly below its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year.”
No sir, that doesn’t sound like a recovery to me, but I’m a crazy man in the Outback.
Futures are up 68. Our Peoplenomics Oscillator was right…again.
Thursday is garbage day here at the ranch…so I think I’ll go play in the street now.
More tomorrow…see you then.