Is the stock market rigged? That is to say, are there shadowy hidden forces influencing market prices, in a manner that most investors don’t understand and often aren’t even aware of? The answer to that question is yes. Absolutely and without question, the stock market is rigged. But perhaps not in the way one might think, and not for the reasons one might think. To understand why the stock market is rigged — and what that means exactly — we
Read nowAn infinite policy response is like infinite morphine. The pain hurts, but the morphine overwhelms the pain, to the point of generating bliss. This can create a twisted Pavlovian response, in which injury or illness is something to be happy about, because new pain means a new morphine dose. This can continue deep into the throes of addiction. It can continue until smiling death. It appears the stock market has become addicted to the blissed-out high of fiscal and monetary
Read nowFor more than 80 million Americans, a replay of the 1930s is not a hypothetical possibility. It is already starting to happen. According to a May poll from the Kaiser Family Foundation (KFF), 26% of Americans — more than one in four — have experienced food insecurity in the past few months. That means skipping meals, reducing meal size due to a lack of money for food, or visiting a food bank or charity in order to eat. Also, according
Read nowModern Monetary Theory, or “MMT” for short, is a hot topic — or at least it was before 2020 exploded. Prior to the pandemic, there was a lively, ongoing debate about whether MMT was a good thing or a bad thing; whether MMT makes sense, or whether it’s a bunch of nonsense; and how soon deeply indebted Western governments might implement variations of MMT. As of June 2020, we can say that MMT is no longer a hypothetical. It is
Read nowThe 2020 lockdown mania — our term for the ripping rally off the March lows, which went completely off the rails in the end — was the worst kind of bubble. It was born of greed and hubris, with little of value left behind. It was powered by ill-considered government stimulus, adding weight to a deficit topping $26 trillion. And it set up the markets, and the economy, for greater pain in its aftermath. Note we say the lockdown mania
Read nowA fair number of people believe the Federal Reserve has control over the U.S. money supply. They also assume, by natural extension, that the Fed is responsible for the total amount of money in circulation. Neither of those assumptions are true. It’s important to understand why, as we will shortly explain. The Chairman of the Federal Reserve, in certain ways, is like a jockey riding an elephant. The jockey appears to have control over the elephant. Through various actions and
Read nowOn June 15, the 2020 Lockdown Mania reached new heights of insanity. With the milestone achieved on that day, the mania cemented its place in financial history books. And speaking of history books: If you’ve been around markets long enough, you have likely heard about wacky schemes from centuries past, designed to fleece speculators at the peak of a frenzy. For example, near the peak of the South Sea Bubble in the early 1700s — a mania that pulled in
Read nowOn June 15, a deadly fight broke out in a disputed border region between India and China. It was reportedly an actual, literal fight — with fists and iron rods — between dozens of Chinese and Indian soldiers. It was not the first fight of its kind, nor even the first one this year. In May 2020, another large-scale fistfight broke out in the same disputed area. This time, though, at least 20 soldiers died on India’s side, some of
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