Shadowtraders

Access to money at a reasonable interest rate is what businesses and consumers have come to rely on to spur the economy. For this purpose, the Feds have lowered interest rates to bargain basement levels, hoping that this will serve as a catalyst for the country’s lethargic business investment/hiring. By reducing borrowing costs for machinery and equipment, the Feds assume that new factories will be built, more stores opened and apartment buildings constructed, all leading to additional employment. Short-term reduction of interest rates as a stimulus to business spending is normal operating procedure for the Feds. But when interest rates hover at nearly zero for long-term, there are “unintended” side affects that do not benefit all. (more…)

This last week we saw the coming and going of Quantitative Easing 3. The age old Hamlet soliloquy, circa 2012, “To be or not to be — that is the question,” became the daily mantra. Shakespeare would have been pleased to watch the play unfold. (more…)

In the film, Collateral Damage, a bomb is detonated killing 9 people in the Colombian Consulate building plaza in Los Angeles. Among those killed are the wife and son of LAFD firefighter, Gordon Brewer (Arnold Schwarzenegger). They just happen to be in the wrong place at the wrong time. They were collateral damage, incidental to the intended target during the attack. Today, trading has become a similar war zone, with retail buyers and sellers being offered up as sacrificial collateral. (more…)