Inside Out Bubble

What is that sucking sound?  Why is inflation not in the picture, why does deflation  loom on the horizon?  So many questions and maybe the answer is so simple, the global easy money is going to the paper asset speculators, not the savers who build the asset base.

See today’s blog by Larry Levine at Trading Advantage:

Larry’s Morning Commentary

For whom does the Zero Interest Rate Policy (ZIRP) benefit most, if at all?  The regular press are a bunch of useful idiots that have no clue; so they couldn’t tell you. The financial press are in on the scam and do not want to upset those that pay their advertising budgets.

Sadly, the media will flat-out lie to the public and regurgitate what any flunky low-level  economist from the FED told them, or any lackey economist from the NYT.  If the ZIRP policy seems good, the press will recall the data like the good lap-dogs that they are.  If bad, the data will be ignored or put in to a ridiculously-small time slot that will nevertheless be shouted down by an opposing “journalist.”  Fools.

So over time, the aforementioned FED flunkies and nearly all others that could benefit, told us that the Zero Interest Rate Policy (ZIRP) of the FED was nirvana; it was perfect. When asked how this would affect those who needed the interest rate payments most, as well as many companies, the answer was one of scoff: “you’re too simple to understand..” and such.

Those of us asking, however, were neither simple nor uninformed; we knew what was coming.  The lack of any interest paid to the “market” would catch up to everyone – eventually.  The Fed, to be sure, doesn’t give a rat’s ass about any individual American who may suffer or die because of ZIRP…but the following from MetLife may get its attention.

The plan is to reduce annual costs by about $1 billion by the end of 2019 and will include job cuts, Chief Executive Officer Steve Kandarian said Thursday in a conference call without specifying how many workers will be dismissed by the New York-based company. The insurer had 69,000 employees at the end of 2015, according to its most recent annual report.

Central bank policies to suppress interest rates have reduced the income MetLife makes on a bond-dominated investment portfolio valued at more than $500 billion. The company said late Wednesday that second-quarter profit tumbled 90 percent to $110 million on a review of the prospects of a variable-annuity business that the CEO is seeking to exit as part of a proposed separation of a U.S. retail operation.

“In light of the significant headwinds our industry is facing, MetLife must do even more to avoid simply running in place,” Kandarian said. “We know this will require us to reduce headcount, which is never an easy step for an organization to take. Our overall goal is to be more efficient, so that we can better serve our customers and provide a fair return to shareholders.”

So Janet Yellen, ZIRP is flat-out NOT working.  Moreover, as you can read from the statement above from MetLife – it is KILLING some businesses. What’s your next move?  Nothing again, right…because ZIRP is “working” so well?



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