The Economy

Dual mandates stimulus 2 percent target plenty of ammo in the toolbox prepared to bring all of our resources

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Hertz shouldn't have survived the financial crisis, but this is what a central planning authority fixing the price of money does. It pushes anyone with the temerity to want to save (which is how you really create a strong economy -- savings and investment) into absurdly speculative things to try to earn the yield being robbed of them. And we all pay for it when things go badly, the way they now are.

It's how a company that continually was seeing its earnings degrade, while its expenses were skyrocketing, was able to go from being dumped by Ford on some private equity firms, which used the "prosperity" that Ben Bernake and Janet Yellen were giving us to take the oodles of free money they could access to buy a turd and sell it to the public markets. ... which were distorted by mispriced interest rates and debt markets that couldn't price risk thanks to the nirvana of quantitative easing destroying all price discovery in debt.

But my 401(k)! Weeeeeeee.

Once public, there was no way Hertz should have been able to borrow a penny without having to resort to a loanshark, but nah, it was doing debt offerings that were overscribed several times over at fairly low yields, to the tune of almost $21 billion. $21 billion of phoniness, on top of the trillions of dolllars of similar phoniness that Yellen, Bernanke and Powell have patted themselves on the back for creating, while they told everyone they hda created an economic nirvana.

And what did Hertz (and lots of other companies) do with all of that capital -- that has pulled growth from the future forward for? It misallocated it relative to what that capital would have found in a free market, including billions of dollars of stock buybacks (they borrowed money to way overpay for their own stock -- making the cost of that borrowed money even greater) and dividend payouts.

It should be criminal, but 95 percent of people in this country seem to have no clue what is really creating the misery that we're experiencing now and that won't be going away quickly because of the amount of deleveraging that is necessary (that they STILL aren't allowing to happen -- they are answering their own debt bubble by trying to prop it up with exponentially more debt, ensuring that the depression they caused is going to be even worse).