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Articles by Greenwich Endeavors

Federal Reserve Created Bitcoin and Other Percolating Bubbles – Michael Carino, Greenwich Endeavors

December 8, 2017

The Federal Reserve’s tools for achieving its dual mandate
of low inflation and full employment manipulate interest rates and therefore
markets.  This manipulation of rates reverberates
globally. Their manipulation historically had been more light handed and
invisible to most of the public.  However, over the last decade, their impact on
interest rates and yield levels have been the most dramatic in the history of
the Federal Reserve. 
Whenever you have policies that are extreme, it is best to
stay at extremes for the shortest time possible.  Newly employed policies always have unknown
and unexplored side effects that can prove to be harmful and detrimental.  For instance, pharmaceutical companies have a
long testing period before new products can be offered to the public.  But monetary

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Fed’s Massive QE is Ending – Here Comes the Boom! By Michael Carino

September 20, 2017

The Federal Reserve has manipulated bond prices for the last
10 years.  Yields in the US and abroad
are lower now than during the Great Depression – a period in time that could
justify such low yields.  For those with
short memories, bond markets are more expensive than before and right after the
financial crisis of 2008.  Longer dated
yields are at least 300 basis points richer than typical when inflation is
running around 2% as it is today.  Yes,
the bond market in the US and globally are the most overpriced ever.  We are now on the precipice of the catalyst
for the greatest bond market trade unwind ever – the end of the Fed’s quantitative
easing program.
I have heard all the arguments for why yields are so
low.  Inflation is low, growth is slow,
the Fed is raising rates or lowering

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“Fire” in the Bond Market – Fed Raising Rates and US Issuing Ultra Long Bonds – by Michael Carino

June 14, 2017

The bond market is on fire and you are about to get
burned!!!  Bond yields are lower and interest
spreads as tight or tighter than that of the bond market crisis of 2008.  This will lead to a catastrophic financial
train wreck that can happen at any moment. 
Why do I feel like I’m the only one sounding the alarms?  Where is the media to help warn and prepare
the marketplace?  Why are investors going
along and playing in what seems to be a rigged and tragically destructive game?
 It reminds me of the story of a frog
jumping into a boiling pot of water. Once the frog hits the hot water, it jumps
right out.  But the frogs that is in the
pot when the water starts out cold slowly gets cooked.  The Fed has excessively accommodated financial
markets for almost a decade. This has been such a

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Obama, Bernanke and Yellen Rigged the Bond Market. Now it’s Trump Turn to Dance or be their Dunce! – By Michael Carino

March 20, 2017

Government dysfunction is at its worst.  We voted them in.  We have no one to blame but ourselves.
Granted, the choices were abysmal. But the Republican and Democratic parties,
with no third party competition, can continue to run dysfunctional governments,
whittling away our dominant global position until the cracks of our broken government
becomes abundantly clear.  As a society,
we play right into their subterfuge of keeping us so upset at the other party,
we don’t see right in front of our own eyes the decay of policies created to reflect
the success and desires of just one party.  Polarized politics that take the best and
worst policies of one party instead of the best of both parties is destined to
end in a deep, painful recession and possibly a global depression.  Pathetically, America is chained to a wall in
Plato’s cave with half watching MSNBC and the other half Fox News since birth.  I fear changing the channel would be like Zhuangzi’s
seventh hole in Wonton instead of enlightenment.  We are stuck with the landscape in front of us
for now.
Since the dawn of politics, politicians have tried to
balance keeping themselves in office and destroying the competing politicians
while keeping the economy healthy and vibrant to ensure reelections.

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The Seven Stages to a Bear Market for Bonds – by Michael Carino

March 9, 2017

We have just lived through the most spectacular global bull
market run for the fixed income markets.  This bull market rallied the bond market to
the lowest yields ever!  Over a third of
all global fixed income was trading with a negative yield.  The most accommodative central bank policies
made heroes out of bond fund managers. Bond investors that stayed fully
invested with fingers crossed, hoping for the greater fool theory to eventually
take them out of their overvalued position were rewarded handsomely.  These bond managers are now managing hundreds
of billions in assets, have attained rock star status in the investment
community and are living the life of Riley.  After such a spectacular run that has spanned
a decade, most fixed income participants have never witnessed losses in their
bond portfolios, never mind a bear market that lasts some time and delivers a
good amount of pain.
This recent back-up in yields has left many bond investors
confused, nervous and unsure what to expect. Well, rest assured, I’m here to
assist. After 25 years managing bond portfolios and trading trillions of
dollars in the bond market, I believe I have perfected my timing model that identifies
when a bond market selloff has run its course.
This proprietary model stands out for being unique,
intuitive and void of the quantitative modeling mistakes and biases.

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