Wednesday, September 07, 2016

Legend Art Cashin Warns 
We Are In A Terrifying Cycle, 
‘A World Not Seen Before’
Podcast with UBS' Art Cashin .. "What is eerie is if you go back and look at the speeches at Jackson Hole, none of them were talking about the vulnerability of products (derivatives and various other Frankenstein financial instruments). None of them were talking about the interconnectivity that could spill over. And as you know, you’ve been doing this for a long time, I’ve been doing it a bit longer, the time you begin to worry is when nobody talks about the problems. That’s when they sneak up on you because nobody is watching out for them .. We’re in a world that not only has no one ever seen before, but in many cases we are doing things that no one ever thought of before. I mean, Sydney Homer’s book The History of Interest Rates covers 5,000 years of interest rates, back to when the Sumerians were trading grain .. And nowhere (in that book covering 5,000 years) is there any extensive discussion of negative interest rates. And yet there is some $23 trillion or $24 trillion worth of securities that are now involved in negative interest rates. So it is a world not seen before .. The Bank of Japan is busy buying ETFs and in some cases common stocks. There are reports that the largest holder of Facebook may in fact be the Swiss National Bank. This is a world no one ever dreamed of. And it only tells you, with rates as low as they are, should something happen to the economies and/or the financial systems, they will have to resort to crazier and crazier things .. And if you go back to Jackson Hole and look at some of these things, they were putting in the intellectual foundry to go perhaps beyond negative rates, into buying assets never thought of before. So that’s as close they come to concern — knowing that if something happened, the fire truck has flat tires." .. 15 minutes
LINK HERE to the article & podcast

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