Fakeconomics . . . .

[Austrian Economics]

Look at Sears...investor groups raided them instead of making them more competitive against Amazon ....then the retirees got shit on....and recently they sold some logistics to Costco for a billion ,,,,doubt they are funding the retirees.

Sears got into trouble to a large extent due to their defined benefit pension plans. These work in a stable and sustainable interest rate environment. We haven't had that since 1971. In an environment where interest rates are going to zero and beyond defined benefit pensions will simply collapse.

[AlbertaFarmer5]

Sears got into trouble to a large extent due to their defined benefit pension plans. These work in a stable and sustainable interest rate environment. We haven't had that since 1971. In an environment where interest rates are going to zero and beyond defined benefit pensions will simply collapse.

But only after the unions bankrupt the taxpayers and the companies who they forced into funding them.

[farmaholic]

Was FCL employees on a defined benefit plan and fully funded by Federated?

I know who was funding it was an issue but unsure of what type of plan it was

[errolanderson]

WHEN DESPERATION MEETS GREED . . . .

JP Morgan stated this past week . . . The world is drowning in so-much debt that there is 'no chance' of the stock market going down. Now, this is actually a major U.S. bank making this statement . . . .

The U.S. Federal Reserve has now totally erased all signals to the market. The Fed rules everything, at the cost of everything (IMO). Nothing matters economically. Stocks will simply continue to go up widening the income gap, because the Fed is only focused on liquidity, not jobs or actual economic growth. Stock market indexes now appear to be the key metric of success for the White House.

Meanwhile, the USD is at-risk of losing its reserve status. Some commodities may no longer be priced in USD. And Powell caved despite unavoidable incoming consequences of 'desperation now meeting greed' (IMO) . . . .

These changes are now coming-in-strong. Meanwhile, the NASDAQ is again at record highs . . . .

[jazz]

JP Morgan stated this past week . . . The world is drowning in so-much debt that there is 'no chance' of the stock market going down. Now, this is actually a major U.S. bank making this statement . . . .
. .

Go at that from a different angle Errol, the major pension plans are all invested in the markets including our own CPP.

I would say asking for a reality check in the markets would be a disaster of biblical proportions at this stage.

[macdon02]

Which commodities and which currency are you hearing Errol? That's a fun scenario to run, just not sure it's possible without a default of sort by govt of insurance and then it'll likely require a replacement for the swift system, which has been talked about forever

[Hamloc]

Errol at present there are many industries like the Airline industry, the retail industry, the restaurant industry even oil exploration that are all in serious trouble with questionable paths to recovery. The stock markets are certainly disconnected from reality as is our federal government and its illustrious leader!

[errolanderson]

Go at that from a different angle Errol, the major pension plans are all invested in the markets including our own CPP.

I would say asking for a reality check in the markets would be a disaster of biblical proportions at this stage.

jazz . . . yes

[macdon02]

jazz . . . yes

Easy fix, nationalize everything. Welcome to mother Russia. Ottawa wants the crash so they can seize it all. Banks, pensions, oil, pipelines, everything. "We don't need no stinking private investment, we got a printer." Stay at home and watch netflix, that's what we are paying you for.

[jazz]

Which commodities and which currency are you hearing Errol? That's a fun scenario to run, just not sure it's possible without a default of sort by govt of insurance and then it'll likely require a replacement for the swift system, which has been talked about forever

Oil is the only commodity proxy for the reserve currency of significance and it wont matter anymore because the US soon wont be buying any outside NA ever again. Who cares what currency Russia and china trade in.

US is about to take top spot in the oil market and not look back. Not great news for Canada. If I was Kenny I would be making a trip to Washington very soon.
----
In its latest annual report of world recoverable oil resources, Rystad Energy finds that the United States currently holds 293 billion barrels of recoverable oil resources. This is 20 billion barrels more than Saudi Arabia and almost 100 billion barrels more than Russia. Rystad Energy’s estimate of US recoverable oil is also five times more than officially reported proven reserves as published in the BP Statistical Review of World Energy 2019.

[errolanderson]

Rumblings now . . . the U.S. Fed might enter the market as a major buyer of stocks soon. The target: maintain the artificial support of the S &P 500 at any cost. The Fed must maintain the VIX volatilty index artificially low, at the expense of market integrity.
There is really no need for stock market analysts anymore. Valuations mean little.

The Fed will effectively own the entire U.S. financial market. Zombie companies can rejoice and continue to maintain-a-lifeline to nowhere . . . .

What we all learned in Economics 101, doesn’t apply in today’s manipulated financial world. The only thing that will hold true is the final outcome.

The rules of this game keep changing at the whim of the Fed . . . .

[errolanderson]

As David Rosenberg (economist) stated this week: "The stock market no longer thinks it needs the economy, if it has the Fed"

But economic reality does have a say. Strap-in. Equity markets may be in for some rough August waters . . . .

[macdon02]

As David Rosenberg (economist) stated this week: "The stock market no longer thinks it needs the economy, if it has the Fed"

But economic reality does have a say. Strap-in. Equity markets may be in for some rough August waters . . . .

I give USD to about 93.2 max and it's gonna look pretty ripe for a long term buy and hold, looking for a macro shift, gold topping out and equities flush, might be all she wrote for this grain rally as well. Wait and see.

[jazz]

As David Rosenberg (economist) stated this week: "The stock market no longer thinks it needs the economy, if it has the Fed"

But economic reality does have a say. Strap-in. Equity markets may be in for some rough August waters . . . .

Errol in March 2009 in the height of the financial crisis, the fed pumped in big liquidity and bailouts and that continued for several yrs even thought the real economy didn't recover until 5 or 6 later. The equity market barely noticed and kept rising. Inflation in consumer essentials already locked in.

[Austrian Economics]

The biggest concern of any central bank is the solvency of the banking system. They really don't care if stocks (or gold) rise steeply in value. Their principal concern is to avoid having the credit system lock up, as it did in 2008 and again in early 2020. They will buy stocks (or more likely ETFs) if they think that by doing so they can avoid solvency problems with large companies and the banks that they borrow from. They won't do it just to see stocks go up.

The end game comes when the central banks have to absorb so much bad debt that they themselves become insolvent (liabilities dwarf assets).