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Karen Parker Feld

Articles by Karen Parker Feld

There’s a Significant Risk of Cascading Defaults in Form of a “Debtors’ Strike”

April 17, 2020

The bailouts are better described as organized protection racket run by banks, hedge funds, private equity investors & large corporations.
By Karen Parker Feld, The Irreverent Economist at Paladin Advisors:
The Fed has used the coronavirus crisis to double down on a failed strategy of supporting financial markets while the real economy declines. Our latest Quarterly Market Outlook & Strategy letter describes the consequences that are likely to result. It’s called, “Through the Looking-Glass,” because whenever Alice (aka Karen) peers through the mirror at our financial markets, she sees that everything is reversed.  We are definitely running the Red Queen’s Race now.
Our cyclical models suggest we are, perhaps, a third of the way through the stock market’s re-pricing, although the

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Corruption in the Time of Coronavirus

March 29, 2020

Now even the fig leaf is gone. 
By Karen Parker Feld, The Irreverent Economist at Paladin Advisors:
On March 23, the Fed announced its largest-ever intervention in the financial markets. Bazooka is too timid a word to describe it. More like a neutron bomb. Our central bank, supposed defender of the currency and the stability of markets, can now purchase an unlimited amount of US Treasury and agency mortgage-backed securities (now running at the unheard-of rate of $625 billion per week). That’s on top of $1 trillion per week in repurchase operations. As amazing as it sounds, that’s not where the real action lies.
As part of Congress’s CARES act (ha, nice try!), the Treasury will create (or resuscitate) a series of special-purpose vehicles (SPVs) to buy all manner of financial assets,

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We Anticipate a Period of Severe Market Turbulence that Will Create New Opportunities for Patient Investors

March 9, 2020

It’s the combination of disease attributes and systemic fragility that makes the situation so dangerous, yet difficult for most people to comprehend.
By Karen Parker Feld, The Irreverent Economist, Paladin Advisors:
We have been closely monitoring developments related to the coronavirus since late January, and concluded several weeks ago that it poses a potentially significant risk to human life, global supply chains and economies around the world.  Paladin has long considered the possibility that some geopolitical event of unknown origin might disrupt asset markets that are broadly overvalued and at risk of an abrupt change in sentiment.
Investors are having a difficult time processing the onslaught of new information about this virus; we do not think it’s fully priced into

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