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Moments ago, as traditionally is the case, the Chinese central bank caught the world by surprise and cut rates, notably the deposit rate by 25 bps and the lending rate by 40 bps.

According to the press release posted moments ago (google translated):

The People’s Bank of China decided to cut financial institutions RMB benchmark interest rate loans and deposits with effect from November 22, 2014. The one-year benchmark lending rate down 0.4 percentage points to 5.6%; one-year benchmark deposit rate down 0.25 percentage point to 2.75%, while the combination of market-oriented reforms to promote the interest rate, the upper limit of the floating range of interest rates on deposits of financial institutions by the benchmark deposit 1.1 times the adjusted interest rate is 1.2 times; other grades adjusted accordingly benchmark interest rate loans and deposits, and to make appropriate benchmark interest rate maturities degenerate.

The summary table:

This happens as many analysts had been calling for more easing from China for months to help stabilize the faltering economy, but also happens a day after as Bloomberg reported, “Distressed Debt in China? Ain’t Seen Nothing, DAC Says.” Bascially well over a year after promising deleveraging reforms and a lower trendline growth rate, one which would not see incremental monetary stimulus, Xi Jinping threw in the towel and joined Japan and Europe in aggressively pursuing greener grass. It also means that, as expected, China is now clearly paying attention to Japan’s unprecedented currency destruction and as Albert Edwards noted a few weeks ago, it is now only a matter of time before China devalues its currency outright.

The good news for the liquidity addicts, is that the S&P futures are now 12 points higher on what is clearly the only growth strategy left in a centrally-planned world, and are approaching 2070 and just 30 points away from Goldman’s 2015 year end target.!

via Zero Hedge http://ift.tt/14WbCuF Tyler Durden

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

The interesting thing about America in 2014, is that the worship of our own domestic criminals just doesn’t cut it anymore. In order to ensure our celebration of corruption is crystal clear to the entire planet, our “leaders” have eagerly opened the floodgates to criminals from all over the world. The most recent focus has targeted corrupt Chinese officials and their children, which makes sense as China is cracks down on corruption. While capital moves to where it is treated best, apparently so does criminality.

I have been highlighting this trend all year, with the post: Open the Floodgates – Chinese Inquiries on U.S. Real Estate Soar 35% After Easing of Visa Rules, being the latest. In that piece, we learned that:

Chinese inquiries about real estate investment in the United States surged 35 percent this week after the two countries agreed to extend the terms of short-term visas, China’s top international property portal said on Friday.

This is a win-win for the corrupt establishment. Housing prices continue to go up, which benefits the financial oligarchs who poured billions into real estate only to find out they killed the buy-to-rent trade in the process as impoverished Americans can barely afford leases anymore. It also benefits University Administrators, who wish to continue jacking up tuition but are running into a serious problem: American youth a flat broke. No worries, just import foreigners to fill the gap.

Don’t take it from me though. The Wall Street Journal published a post titled: U.S. Graduate Schools Rely More on Asia. Here are some excerpts:

Applications to U.S. graduate schools from Asia, led by India, have jumped in recent years, but total enrollment at programs has only inched up as mounting debt appears to be suppressing the number of American applicants.

 

International students now make up 17% of all U.S. graduate students, with more than half studying engineering, science and business, according to a report to be released Wednesday by the Council of Graduate Schools. This year has seen an 8% uptick in overseas students, while enrollment from U.S. students has stayed flat, the report said.

 

Graduate-school debt may be keeping U.S. students away, said Jason Delisle, an education analyst at the New American Foundation, a left-leaning Washington think tank.

 

That debt has weighed on prospective students. Between 2008 and 2013, total graduate enrollment increased by just 0.7%, according to a 2013 report by the Council of Graduate Schools, but growth in the number of international students is up between 7% and 10% for each of the past four years.

 

That growth was fueled by Chinese students until 2012, when their numbers plateaued. In the past two years, the offers of admission to Indian students have climbed 30% and 24%, respectively.

On a related note, remember former head of the the Department of Homeland Security, Janet Napolitano, aka “Big Sis”? Well she is now President of the University of California system, and is using that position to push through a 28% tuition hike so that administrators can get huge pay raises. Bloomberg reports that:

A University of California regents committee approved a 28 percent tuition increase amid protests by as many as 400 people who stormed metal barricades and broke glass at a meeting in San Francisco.

400 hundred American slaves? So what. Talk to the Maserati.

The full board is scheduled to vote tomorrow on the plan, which would end a three-year tuition freeze at the 10-campus system. The proposal set UC President Janet Napolitano, 56, the former secretary of Homeland Security, at odds with Governor Jerry Brown, a 76-year-old Democrat who won election to an unprecedented fourth term this month.

 

The plan calls for raising tuition as much as 5 percent annually for five years. The increase would push undergraduate tuition to $15,564 a year by 2019 from $12,192 now.

 

Napolitano’s tuition proposal comes two months after the regents approved pay increase of as much as 20 percent for four chancellors and increased the base salary for a new chancellor by 23 percent from his predecessor, said Lieutenant Governor Gavin Newsom, who is an ex-officio member of the board.

 

“The University of California can’t bestow pay raises on its top earners with one hand, while continually taking more from students and their families with the other and deflecting criticism by laying its solution at the door of taxpayers,” Newsom said.

Sure they can. Just enroll more foreign students who can actually pay. American plebs lose again.

Here are some additional articles on how U.S. officials are welcoming criminal Chinese funds into the states:

Welcome to Arcadia – The California Suburb Where Wealthy Chinese Criminals are Building Mansions to Stash Cash

Chinese Purchases of U.S. Real Estate Jump 72% as The Bank of China Facilitates Money Laundering

Zillow Opens the Floodgates to Chinese Buyers in Order to Keep Housing Bubble 2.0 Inflated

Corrupt Chinese Politicians are Buying Billions in U.S. Real Estate

With all that in mind, watch the video below. While it’s certainly not the fault of these “students,” it’s nevertheless very concerning to see a kid with barely any peach fuzz on his face talking about how he owns three Ferraris. Where did this money come from? Nobody seems to care as long as the status quo gets paid.

We should just get it over with an change the words on the base of the Statue of Liberty. I propose:

Give me your corrupt, your crony, your oligarch masses yearning to launder money free,

 

The criminal masterminds of your destroyed environment and police state.

 

Send these, the pampered, the private jet setter to me, I open my hands to your golden yuan.

via Zero Hedge http://ift.tt/1uZZqmo Tyler Durden

The impossible is possible. Never say never. Wall Street bankers are staring agog at headlines coming from Europe where, in Iceland, the former chief executive of one of the largest banks in the country which was involved in crashing the economy in 2008 has been sentenced to jail time. As Valuewalk reports, in receiving a one year prison sentence, Sigurjon Arnason officially became the first bank executive to be convicted of manipulating the bank’s stock price and deceiving investors, creditors and the authorities between Sept. 29 and Oct. 3, 2008, as the bank’s fortunes unwound, crashing the economy with it. It appears he was as shocked by the verdict as Wall Street-ers are, “this sentence is a big surprise to me as I did not nothing wrong.” It was likely all for the people’s own good…

 

 

Via ValueWalk,

Some thought it would never happen. But in Iceland, the former chief executive of one of the largest banks in the country which was involved in crashing the economy in 2008 has been sentenced to jail time.

 

Iceland banker the first to manipulate bank’s stock price

 

In receiving a one year prison sentence, Sigurjon Arnason officially became the first bank executive to be convicted of manipulating the bank’s stock price and deceiving investors, creditors and the authorities between Sept. 29 and Oct. 3, 2008, as the bank’s fortunes unwound, crashing the economy with it.  Landsbanki was one of three banks that had tallied nearly $75 billion in debt before the final curtain was drawn.

 

What, me guilty? was the bank executive’s response upon learning of his fate. “This sentence is a big surprise to me as I did not nothing wrong,” Arnason was quoted as saying in a Reuters article after he learned of his punishment.  Amason had not decided if he was going to appeal the decision to the supreme court, as the appeal process might take longer than his sentence.

 

Other Iceland bank executives also convicted

 

The Reykjavik District Court had lopped off nine months of Arnason’s sentence, saying they were suspended.  Other bank executives involved in the situation were convicted: Ivar Gudjonsson, the former director of proprietary trading at the bank, along with Julius Heidarsson, a former broker at the bank. They each received nine-month sentences and six of those nine months were immediately suspended by the court.

 

All pleaded innocent to the charges, as the the fallout from the 2008 crisis continues to this day in the north Atlantic island and around the world.  As a sign of thawing in the crisis, Reuters reported that earlier in the week Landsbanki, the successor to the failed Landsbankinn, agreed to extend a deadline to restructure bonds to the end of the year. If a bond restructuring agreement is reached, it could help the government lift capital controls which were imposed due to the crisis.

*  *  *

It appears he needs to ‘donate’ more to the nation’s leaders.

via Zero Hedge http://ift.tt/14UrkXa Tyler Durden

Submitted by Michael Snyder of The Economic Collapse blog,

Are you waiting for the next major wave of the global economic collapse to strike?  Well, you might want to start paying attention again.  Three of the ten largest economies on the planet have already fallen into recession, and there are very serious warning signs coming from several other global economic powerhouses.  Things are already so bad that British Prime Minister David Cameron is comparing the current state of affairs to the horrific financial crisis of 2008.  In an article for the Guardian that was published on Monday, he delivered the following sobering warning: “Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.”  For the leader of the nation with the 6th largest economy in the world to make such a statement is more than a little bit concerning.

So why is Cameron freaking out?

Well, just consider what is going on in Japan.  The economy of Japan is the 3rd largest on the entire planet, and it is a total basket case at this point.  Many believe that the Japanese will be on the leading edge of the next great global economic crisis, and that is why it is so alarming that Japan has just dipped into recession again for the fourth time in six years…

Japan’s economy unexpectedly fell into recession in the third quarter, a painful slump that called into question efforts by Prime Minister Shinzo Abe to pull the country out of nearly two decades of deflation.

 

The second consecutive quarterly decline in gross domestic product could upend Japan’s political landscape. Mr. Abe is considering dissolving Parliament and calling fresh elections, people close to him say, and Monday’s economic report is seen as critical to his decision, which is widely expected to come this week.

Of course Japan is far from alone.

Brazil has the 7th largest economy on the globe, and it has already been in recession for quite a few months.

And the problems that the national oil company is currently experiencing certainly are not helping matters…

In the past five days, 23 powerful Brazilians have been arrested, with even more warrants still outstanding.

 

The country’s stock market has become a whipsaw, and its currency, the real, has hit a nine-year low.

 

All of this is due to a far-reaching corruption scandal at one massive company, Petrobras.

 

In the last month the company’s stock has fallen by 35%.

The 9th largest economy in the world, Italy, has also fallen into recession…

Italian GDP dropped another 0.1% in the third quarter, as expected.

 

That’s following a 0.2% drop in Q2 and another 0.1% decline in Q1, capping nine months of recession for Europe’s third-largest economy.

Like Japan, there is no easy way out for Italy.  A rapidly aging population coupled with a debt to GDP ratio of more than 132 percent is a toxic combination.  Italy needs to find a way to be productive once again, and that does not happen overnight.

Meanwhile, much of the rest of Europe is currently mired in depression-like conditions.  The official unemployment numbers in some of the larger nations on the continent are absolutely eye-popping.  The following list of unemployment figures comes from one of my previous articles…

• France: 10.2%
• Poland: 11.5%
• Italy: 12.6%
• Portugal: 13.1%
• Spain: 23.6%
• Greece: 26.4%

Are you starting to get the picture?

The world is facing some real economic problems.

Another traditionally strong economic power that is suddenly dealing with adversity is Israel.

In fact, the economy of Israel is shrinking for the first time since 2009…

Israel’s economy contracted for the first time in more than five years in the third quarter, as growth was hit by the effects of a war with Islamist militants in Gaza.

 

Gross domestic product fell 0.4 percent in the July-September period, the Central Bureau of Statistics said on Sunday. It was the first quarterly decline since a 0.2 percent drop in the first three months of 2009, at the outset of the global financial crisis.

And needless to say, U.S. economic sanctions have hit Russia pretty hard.

The rouble has been plummeting like a rock, and the Russian government is preparing for a “catastrophic” decline in oil prices…

President Vladimir Putin said Russia’s economy, battered by sanctions and a collapsing currency, faces a potential “catastrophic” slump in oil prices.

 

Such a scenario is “entirely possible, and we admit it,” Putin told the state-run Tass news service before attending this weekend’s Group of 20 summit in Brisbane, Australia, according to a transcript e-mailed by the Kremlin today. Russia’s reserves, at more than $400 billion, would allow the country to weather such a turn of events, he said.

 

Crude prices have fallen by almost a third this year, undercutting the economy in Russia, the world’s largest energy exporter.

It is being reported that Russian President Vladimir Putin has been hoarding gold in anticipation of a full-blown global economic war.

I think that will end up being a very wise decision on his part.

Despite all of this global chaos, things are still pretty stable in the United States for the moment.  The stock market keeps setting new all-time highs and much of the country is preparing for an orgy of Christmas shopping.

Unfortunately, the number of children that won’t even have a roof to sleep under this holiday season just continues to grow.

A stunning report that was just released by the National Center on Family Homelessness says that the number of homeless children in America has soared to an astounding 2.5 million.

That means that approximately one out of every 30 children in the United States is homeless.

Let that number sink in for a moment as you read more about this new report from the Washington Post…

The number of homeless children in the United States has surged in recent years to an all-time high, amounting to one child in every 30, according to a comprehensive state-by-state report that blames the nation’s high poverty rate, the lack of affordable housing and the effects of pervasive domestic violence.

 

Titled “America’s Youngest Outcasts,” the report being issued Monday by the National Center on Family Homelessness calculates that nearly 2.5 million American children were homeless at some point in 2013. The number is based on the Education Department’s latest count of 1.3 million homeless children in public schools, supplemented by estimates of homeless preschool children not counted by the agency.

 

The problem is particularly severe in California, which has about one-eighth of the U.S. population but accounts for more than one-fifth of the homeless children, totaling nearly 527,000.

This is why I get so fired up about the destruction of the middle class.  A healthy economy would mean more wealth for most people.  But instead, most Americans just continue to see a decline in the standard of living.

And remember, the next major wave of the economic collapse has not even hit us yet.  When it does, the suffering of the poor and the middle class is going to get much worse.

Unfortunately, there are already signs that the U.S. economy is starting to slow down too.  In fact, the latest manufacturing numbers were not good at all…

The Federal Reserve’s new industrial production data for October show that, on a monthly basis, real U.S. manufacturing output has fallen on net since July, marking its worst three-month production stretch since March-June, 2011. Largely responsible is the automotive sector’s sudden transformation from a manufacturing growth leader into a serious growth laggard, with combined real vehicles and parts production enduring its worst three-month stretch since late 2008 to early 2009.

A lot of very smart people are forecasting economic disaster for next year.

Hopefully they are all wrong, but I have a feeling that they are going to be right.

via Zero Hedge http://ift.tt/1F8P1Ic Tyler Durden

By: Chris at http://ift.tt/12YmHT5

Bernie Madoff promised investors above average, consistent year after year mathematically impossible returns. Investors fell for the high returns but what they REALLY fell for was the apparent consistency. The stability or returns, the certainty.

Bond funds appeal to investors because they offer stable returns each year. Quantifiable and certain. Mutual funds tend to stuff portfolios full of bonds which themselves offer a set return allowing mutual fund managers the ability to promise more consistent returns. That most of them are terrible is not the point.

The corporate job offered stability of returns. I say offered because like the horse and buggy they’re destined for the scrap heap of history as mentioned in “Cubicle Jobs are Over” and the “March of Technology”.

Marriage offers stability of affection and love. Looking around me I feel like the odd one out. I’ve only got one wife, no ex.

Humans love stability and certainty. It’s why Volkswagen sold 9.7 million units last year and AVTOVAS, owner of the iconic Lada brand, sold 533,634 vehicles globally. The Lada, people have figured out, is both ugly as well as unreliable.

Millions of people get divorced each year, bond funds blow up, currencies move against investors. Corporate jobs disappear and about the only thing I’m willing to rely on is that Volkswagens won’t break down. Stability is a myth yet it’s what we humans strive for.

Stability is also NOT where the home runs lie. Jack Ma never became a billionaire through a corporate position, and Kyle Bass and Mark Hart never bought into the “stable” housing market. Instead, they shorted it. Definitely not considered a sure thing at the time. Nope, the payoffs exist outside of the norm.

I recently found myself speaking with a group of gents. One an insurance salesman, another an accountant and the third a partner in a law firm. I know, sounds like the start to a joke.

When they found out that what do for a living is invest in private companies including a healthy smattering of very early stage start-ups the response was overwhelming, “You’re mad, how can you do that? That’s so risky. Who do you sell your shares to? What happens if you need to sell?”.

They really lost it when I suggested it is completely normal and in fact expected to have a good number of these investments go to zero. They wanted stability.

To them what I do was more reprehensible than launching a drone attack on a wedding party or clubbing a seal pup to death in front of a kindergarten class. Clearly they would sooner see their children taken away for medical experiments than invest their capital into private equity.

The flaw in this thinking is that stability and consistency in mainstream investments are stable and consistent. Stability in markets all too often predates violent counter moves. Everything is fine, until it isn’t.

Take the yen which I’ve written so much about my fingers bled. We’ve also prepared a complimentary special report detailing how to trade it and Brad has outlined an asymmetric way to play it to the subscribers.

When we first began badgering you dear readers with the story it was 2012. The yen was in the 70s and we were building short positions. It had been stable for so long. Well, my gut is things are getting a little out of control. Certainly there are some folks unwinding their carry trade.

Feel free to read the free report here. We don’t think this trade is over by a long shot and everything we wrote about in that report is valid to this day.

This brings me back to private equity.

If you’re curious as to where the biggest returns have been in history let me give you a sampling.

• We all know about Peter Thiel’s $500,000 investment into what eventually became Facebook. Thiel sold 80% of his shares 7 years later they netted him in excess of $400 Million.
• Henry Flagler invested $100,000 into Standard oil in 1867 and by 1913 this investment was worth $75 Million, over 75,000% ROI.
• Benchmark Capital invested US$6.7 million into what became known as eBay. In just 4 years this investment was worth $5 billion.

What you’ll find is that the big profits have been made by investing when these companies were PRIVATE.

The first lesson here is that investing for stability without a solid understanding of whether that stability is justified is as foolish as expecting your Lada to perform like a Volkswagen.

And secondly one is that balancing a portfolio with “opportunity” driven from understanding asymmetry such as the yen trade, and/or investing some portion of capital into well researched private equity deals actually makes a ton of sense. I can’t promise that you’ll not be viewed as insane by the average investor buying mutual funds, and CDs but who cares what others think?

Speaking of opportunity…

One of our investments is in a company which is looking for an entrepreneurial online marketing manager. If you’re a self starter seeking an exciting opportunity contact us here.

Have a great weekend.

– Chris

 

“Never think that lack of variability is stability. Don’t confuse lack of volatility with stability, ever.” – Nassim Nicholas Taleb

via Zero Hedge http://ift.tt/1xTGHbS Capitalist Exploits

A sinkhole 20 by 30 meters (65 by 98 feet) in size has been found near a Uralkali mine in Russia’s Perm region. As Mining.com reports, while stunningly no casualties have been reported so far, the situation is expected to worsen as locals fear that the hole could get bigger and swallow their houses.

 

As RT reports,

The sinkhole was first discovered by Uralkali’s Solikamsk-2 mine workers on November 18. According to local emergency services, it’s located some two miles from the mine itself, in an old abandoned mine.

 

 

Old, out-of-use garden patches were affected by the accident, and there is no danger to locals, as the sinkhole is in no close proximity to any residential buildings, the company said.

 

 

There are no “catastrophic” effects of the sinkhole neither for the company, nor for the locals, Uralkali CEO Dmitry Osipov said, adding that the incident has been localised.

 

 

Before the giant hole appeared near the town of Solikamsk, the company, which is Russia’s biggest potash miner, evacuated workers at the Solikamsk-2 mine, due to the inflow of saline water. Operations at the site have been halted, and the level of underground water is being monitored.

 

 

Locals fear that the hole could get bigger and swallow their houses, which are some 2 miles from the sinkhole now. Regional authorities say the sinkhole could get bigger, but would still be of no danger to people.

 

The flooded mine, Solikamsk-2, is connected to another mine, Solikamsk-1, which is causing concerns among people in the region. The underground tunnels linking the two were walled up decades ago, but water would only need time to break through, people fear.

*  *  *

The mine’s location…

*  *  *

On the bright side, now Putin has somewhere big enough to store his gold and imagine the GDP growth from fillingh the hole back in!!

 

h/t Vladimir Basov … Source: Mining.com and RT

via Zero Hedge http://ift.tt/14UcakM Tyler Durden

First the Japanese central bank proceeds to monetize all new debt issuance and is on route to holding 50% of all 10 Year bond equivalents within 2 years, sending the Yen year plummeting to 7 years lows daily, and then – just like Europe – Japan gets cold feet and realizes that the next steps are USDJPY 145+, meaning a complete collapse of the Japanese economy and a full on FX, if not shooting, war in Asia. So what does Japan’s finance minister Aso do? Why he talks the Yen higher, in the process completely confounding the FX algos, and risking a full blown collapse in the Nikkei just 3 weeks ahead of the Japanese snap elections.

• ASO:  YEN WEAKENING OVER THE PAST WEEK HAS BEEN TOO RAPID: RTRS
• JAPAN’S ASO: SPEED OF YEN WEAKENING HAS BEEN TOO FAST: BBG
• ASO: FX RATES UP TO MARKET, NOT SOMETHING WHERE WE INTERVENE… at least he is still insane
• YEN GAINS ACCELERATE; ASO SAYS YEN WEAKENING BEEN TOO FAST

And this is not how you win the reitrees’ vote:

• ASO: HAVE TO RECONSIDER SOCIAL WELFARE FUNDING AFTER TAX DELAY

Then again, considering Abe may really just want to get the hell out of Dodge before he is forced out (and before all the Imodium runs out again) a market crash may be just what the Prime Minister ordered…

Yen:

via Zero Hedge http://ift.tt/1uFZWo5 Tyler Durden

Authored by Charles Schwab (yes, that Charles Schwab), originally posted op-ed at The Wall Street Journal,

For America’s 44 million senior citizens, plus tens of millions of others who are on the threshold of retirement, last month marked a watershed moment that is worth celebrating. At the end of October, the Federal Reserve announced the first step in returning to a more normal monetary policy. After nearly six years of near-zero interest rates and quantitative easing, the Fed is ending its bond-buying program and has signaled a plan to eventually begin raising the federal-funds rate, raising interest rates to more normal levels by 2017.

U.S. households lost billions in interest income during the Fed’s near-zero interest rate experiment. Because they are often reliant on income from savings, seniors were hit the hardest. Households headed by seniors 65-74 years old lost on average $1,900 in annual income over the past six years, according to a November 2013 McKinsey Global Institute report. For households headed by seniors 75 and older, the loss was $2,700 annually.

With a median income for senior households in the U.S. of roughly $25,000, these are significant losses. In total, according to my company’s calculations, approximately $58 billion in annual income has been lost by America’s seniors since 2008.

Retirees depend on income from their savings for basic living expenses. Without that income, many seniors have taken on greater risk to increase the potential yield on their savings, or simply spent down their nest eggs. After decades of playing by the rules, putting off spending and socking away money, seniors have taken it on the chin. This strikes a blow at the core American principles of self-reliance, individual responsibility and fairness.

Their lost income affects all Americans. Seniors make up 13% of the U.S. population and spend about $1.2 trillion annually—a big chunk of America’s $11.5 trillion consumer economy. In general, seniors spend more than their income, withdrawing each year from accumulated savings, and so their interest earnings get spent right back into the economy.

This makes for a potent multiplier effect. My company estimates that the $58 billion in annual interest income lost by seniors over the past six years would have boosted GDP by $115 billion a year during this period. In a $17 trillion economy that amounts to an additional 0.7% of GDP growth, by no means inconsequential—a 1% increase in GDP typically leads to an increase of more than a million jobs.

Normalized interest rates are also good for the economy broadly. Total short-term interest-bearing assets are today close to $11 trillion. Based on that, a 1% increase in interest rates will generate over $100 billion in increased income. And there is ample room to raise rates. Today the one-year return on a CD is just north of 1%. In a more normal environment, the annual return on a one-year CD has been about 6.15%. As interest rates begin to normalize, increased personal income will drive spending, economic growth and jobs.

Will more historically normal interest rates have negative impacts on others? The cost of homeownership may be higher and borrowing in general will be more expensive. But these costs are largely born by middle-class and higher-income families and they will see that impact lessened over time through inflation. But is it fair that seniors subsidize cheaper credit for others? Most people wouldn’t think so.

So celebration is in order. First, because the famine for savers and seniors over the past six years may soon be over. And second, because good news for savers is good news for the economy and job seekers. Savings are closely tied to investment and growth. The more savings people have, the more money there is to spend or invest, and the faster the economy grows.

Because it creates a direct shot of consumer income that in turn becomes consumer spending, the return of normal market-based interest rates will increase the velocity of money in ways that the policies of the past six years have not. That is a good reason to encourage the Fed to be even more aggressive and normalize monetary policy as quickly as possible. But today, let’s celebrate the Fed’s first steps in that direction and the monetary benefits they’ll have for seniors and savers.

*  *  *

While we agree 'normalization' is healthy (and the wealth distributive impact of QE has crushed seniors/savers), we wonder if Mr. Schwab has calculated the loss in AUM when higher rates destroy the only bid under stocks from corporate buybacks?

via Zero Hedge http://ift.tt/1vuA3v0 Tyler Durden