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Weekly Commentary: Breaking And The Q1 2022 Z.1

Doug Noland profile picture
Doug Noland


  • The week was ugly. Things look bad.
  • I found myself on Friday pondering how many Trillions of additional liquidity the world’s central bankers would be compelled to create these days in the event of a synchronized global crash – in yet another round of desperate measures to thwart financial collapse.
  • Things are breaking badly in periphery Europe – with the ECB yet to even nudge the policy rate off negative 50 bps.

economyis bad

tiero/iStock via Getty Images

No mincing words; no need for sophisticated prose. The week was ugly. Things look bad. There are elements similar to the year 2000 bursting of the “Dot-com” Bubble. There are parallels to the much more systemic 2008 mortgage finance Bubble collapse. Yet, for me, this

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Doug Noland profile picture
I'm at about 30 years persevering as a “professional bear.” My lucky break came in late-1989, when I was hired by Gordon Ringoen to be the trader for his short-biased hedge fund in San Francisco. Working as a short-side trader, analyst and portfolio manager during the great nineties bull market – for one of the most brilliant individuals I’ve met – was an exciting, demanding and, in the end, a grueling and absolutely invaluable learning experience. Later in the nineties, I had stints at Fleckenstein Capital and East Shore Partners. In January 1999, I began my 16 year run with PrudentBear (that concluded at the end of 2014), working as strategist and portfolio manager with David Tice in Dallas until the bear funds were sold in December 2008. In the early-nineties, I became an impassioned reader of The Richebacher Letter. The great Dr. Richebacher opened my eyes to Austrian economics and solidified my lifetime passion for economics and macro analysis. I had the good fortune to assist Dr. Richebacher with his publication from 1996 through 2001. Prior to my work in investments, I worked as a treasury analyst at Toyota’s U.S. headquarters. It was working at Toyota during the Japanese Bubble period and the 1987 stock market crash where I first recognized my love for macro analysis. Fresh out of college I worked as a Price Waterhouse CPA. I graduated summa cum laude from the University of Oregon (Accounting and Finance majors, 1984) and later received an MBA from Indiana University (1989). By late in the nineties, I was convinced that momentous developments were unfolding in finance, the markets and policymaking that were going unrecognized by conventional analysis and the media. I was inspired to start my blog, which became the Credit Bubble Bulletin, by the desire to shed light on these developments. I believe there is great value in contemporaneous analysis, and I’ll point to Benjamin Anderson’s brilliant writings in the “Chase Economic Bulletin” during the Roaring Twenties and Great Depression era. Ben Bernanke has referred to understanding the forces leading up to the Great Depression as the “Holy Grail of Economics.” I believe “The Grail” will instead be discovered through knowledge and understanding of the current extraordinary global Bubble period.

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Comments (7)

30 Jul. 2023
Sad. Sad that world bankers et al can 'control' the rest of humanity as they do. Given the fiscal situation as it is, few will be able to weather the typhoon that is evolving, again all for the bankers [not so] great reset...
I’ve just completed reading both your analysis and compilation of information from around the globe.

I just discovered your weekly this month and quickly made it required reading for myself.

The sense I get is that we’re in the initial stage of “a world of hurt” coming our way. I also think it’s due, since we’ve been living inside a system that didn’t allow a good financial and economic cleansing to take place, because of the systemic manipulation by the “best and the brightest”.

I for one am securing my base against the coming storm and will be ready for the new opportunities that arise afterward.
Doug Noland profile picture
@Texasdad I'm happy you found my analysis. We seem to see the world similarly. Thank you for commenting. doug
A superior wake-up call read. A good title would be “The deer in the headlights feeling!”

Question: how are NIRP and ZIRP bonds doing? How do they mark these financial fur balls to the market. A while back I read that there were $17TRILLION of these outstanding.

I think the prevailing investment strategy is based on luck and Gen X metaverse digital reality. The Fed’s/CBs dance of dilettantes dilemma can be compared to a 10 foot tail on a two foot dog, soon to be a 20 foot tail on a one foot dog. I also think that fwd earnings estimates are too optimistic and credit problems are very underestimated. Note the CDS numbers for banks.
Doug Noland profile picture
@Lipstick43 Lots of deer in the headlights these days. Much of the negative rate bonds were in Europe, and they've had really tough go of it lately (i.e. crushed). The $17 TN is quickly on its way to zero. I agree on earnings, and wouldn't be surprised if S&P500 earnings get cut by at least half (big bank earnings even worse). Thanks for reading and commenting. doug
Again Doug, thank you very much for your important work compiling and summarizing these critically important news items. I have become very reliant on your weekly post.
Doug Noland profile picture
@PhantomII Thank you! Always feels good to know readers find value in my work. doug
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