Is Turkey “City Zero” in Global Contagion

Last year Turkey's lira crisis quickly morphed into a Euro-zone crisis as Italian bond yields blew higher and the euro quickly reversed off a major Q1 high near $1.25. It nearly sparked a global emerging market meltdown and subsequent melt-up in the dollar. This week President Erdogan of Turkey banned international short-selling of the Turkish … Continue reading Is Turkey “City Zero” in Global Contagion

Meet the New Merkel, Same as the Old Merkel

So Angela Merkel is out as leader of the Christian Democratic Union (CDU).  In comes Annegret Kramp-Karrenbauer, Merkel's close ally who won the party's support with a very narrow victory over more conservative Friedrich Merz. The goal , as always in Europe, was to maintain the status quo politically. Change needed to change nothing.  Brexit negotiations … Continue reading Meet the New Merkel, Same as the Old Merkel

Recession Incoming or Something Worse? 2/10 Spread Collapses

UPDATE: Now stocks are selling off and the 2/10 spread is less than 10 basis points.  Gold, however, refuses to sell off while the euro pulls back versus the dollar. Mike Shedlock over at Mishtalk noted yesterday that there have been a couple of troubling inversions in the U.S. yield curve recently.  They happened in … Continue reading Recession Incoming or Something Worse? 2/10 Spread Collapses

Preparation is More than Buying Bottled Water

Hurricane Michael caught a lot of people unprepared.  What looked like an uneventful gulf storm turned into a raging monster by the time it made landfall in the Florida panhandle. Michael missed us completely this year.  I never really worried about it because there was so little error in the track and it was a … Continue reading Preparation is More than Buying Bottled Water

Is Gold Decoupling from Debt?

When I went outside this morning to wrangle my goats to milk them, I noticed something had changed.  All of a sudden it was October.  It was chilly in a way that only fall in North Florida could be, slightly drier and more temperate.  While it was a cold, wet summer for the most part, … Continue reading Is Gold Decoupling from Debt?

The Death of the “Death of Contagion” Central Bank Meme

Last year now-former FOMC Chair Janet Yellen downplayed the possibility of another financial crisis.  In her hubris she believes the central banks have walled off the financial system from 'contagion risks' brought on by over-investment in synthetic derivative market products. Like generals, however, central planners are always fighting the last war. We're experiencing a major … Continue reading The Death of the “Death of Contagion” Central Bank Meme