Jan 6 DOES THE ECONOMIC DISASTER START?
ZERO HEDGE
Will
2015 Be A Year Of Economic Disaster? 11 Perspectives. by
Michael Snyder via The Economic Collapse blog, Submitted by Tyler
Durden on 01/06/2015. Will 2015 be a year of financial crashes, economic
chaos and the start of the next great worldwide depression? Over the past
couple of years, we have all watched as global financial bubbles have gotten
larger and larger. Despite predictions that they could burst at any time, they
have just continued to expand. But just like we witnessed in 2001 and 2008, all
financial bubbles come to an end at some point, and when they do implode the
pain can be extreme. // The following are 11 predictions of economic disaster
in 2015 from top experts all over the globe…
#1 Bill Fleckenstein: “They are
trying to make the stock market go up and drag the economy along with it. It’s
not going to work. #2 John Ficenec: The Shiller CAPE – for
the S&P 500 is currently at 27.2, some 64pc above the historic average of
16.6. On only three occasions since 1882 has it been higher – in 1929. #3 Ambrose Evans-Pritchard, “The
eurozone will be in deflation by February, forlornly trying to ignite its damp
wood by rubbing stones. .. #4 The Jerome Levy
Forecasting Center “Clearly the
direction of most of the recent global economic news suggests movement toward a
2015 downturn.” . #5 Paul Craig Roberts: There are no
economic fundamentals that support stock prices — the Dow Jones. There are no
economic fundamentals that support the strong dollar… #6 David Tice: This is going to end badly. #7
Liz Capo
McCormick and Susanne Walker: “Get ready for a disastrous year for U.S.
government bonds. #8 Phoenix Capital Research: #8
Phoenix Capital Research: you’re
going to see more and more ‘risk assets’ (read: projects or investments fueled
by borrowed Dollars) blow up. Oil is just the beginning.. When both Germany and
Japan exploded you’ve got a decent idea
of the size of the potential impact on the financial system. #9 Rob Kirby: the crude oil price is going
to spawn another financial crisis. It will be tied to the junk debt that
has been issued to finance the shale oil plays in North America… It is ..
half a trillion dollars worth of junk debt that is held largely on the books of
large financial institutions in the western world. When these bonds start
to fail,.. will be the signal for the Fed .. QE4. The QE4 is likely going to be
accompanied by bank bail-ins.. all western world countries have adopted bail-in
legislation in their most recent budgets… The financial elites are engineering
the excuse for their next round of money printing . . . and they will be
confiscating money out of savings accounts and pension accounts… #10 John Ing: “The 2008 collapse was just a
dress rehearsal compared to what the world is going to face this time around… this
time the collapse will be on a scale that is many magnitudes greater than what
the world witnessed in 2008.”. #11 Gerald Celente: “What does the word
confidence mean? Break it down. In this case confidence = con men and con game…
So people will lose confidence in the con men because they have already shown
their cards. It’s a Ponzi scheme. So the con game is running out and they don’t
have any more cards to play. What are they going to do? They can’t raise
interest rates… it will be a loss of confidence in the con game and the con
game is soon coming to an end. That is when you are going to see panic on Wall
Street and around the world.” See my
article entitled “The
Seven Year Cycle Of Economic Crashes That Everyone Is Talking About“, said
Snyder, OR GO TO theories in my article entitled “If
Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The
United States“. SUMMING UP: our economic
fundamentals continue to get worse, our debt levels continue to grow and every
objective measurement shows that Wall Street is more reckless and more
vulnerable to collapse than ever before. http://www.zerohedge.com/news/2015-01-06/will-2015-be-year-economic-disaster-11-perspectives
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Bild
Warns German Govt Fears Greek Bank Runs, Financial System Collapse; Prepares
For Grexit. Submitted by Tyler
Durden on 01/06/2015. Germany, have warned Greece "there will be no
blackmail," Syriza IS
demanding ECB QE to buy Greek bonds (or
else) - which
Germany has flatly ruled out . Syriza
is practically guaranteed to win a "decisive victory" at the
forthcoming snap election. SO, German government is preparing for a
possible Greek exit, warning of financial system collapse, bank runs, and huge
costs for the rest of the EU.
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How
Do You Say "Death Cross" In French?. Submitted by Tyler Durden on 01/06/2015. joblessness is the
symptom of the 'death cross' that is occurring in France as bankrupticies
soar to record highs and firms' profitability craters. And as Bloomberg's
Maxime Sbaihi notes, French households continue to use rising real wages to
increase savings rather than consumption. There’s no reason why this should
change as surveys indicate that consumers remain worried by the near-term
outlook.
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Worst
Start To A Year Ever, Stocks Down 5 Days In A Row. Submitted by Tyler
Durden on 01/06/2015
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The Last Bubble.
Submitted by Tyler Durden on 01/06/2015. as China
unleashed its own QE-Lite and the Fed confirmed the end of QE, tidal waves of
fresh speculative capital flooded a small, illiquid market on the other side of
the planet... and hey presto, The Last Bubble market was created.
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ISIS
Now Hiring Bankers: In Bid For Legitimacy, Rogue State Opens Bank. Submitted by Tyler
Durden on 01/06/2015. "A strategy to make concrete decisions and
actions to create a nation state is in place," notes one professor, but as
another analyst explains, "ISIS is financing itself partly through a
pyramid scheme, and this has begun to falter.”
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Murderous
Son, Who Killed His Hedge Fund Father Over $200 Allowance, Was A
Mentally-Disturbed Princeton Economics Grad. Submitted by Tyler Durden on 01/06/2015
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US
Selling Another 170 M-1 Abrams Tanks To Iraq After ISIS Captured 40 Last Summer. Submitted by Tyler
Durden on 01/06/2015
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Guest
Post: 2015 - Grounds For Optimism?. Submitted by Tyler Durden on 01/06/2015. the really
interesting development of 2014 is that the world as a whole (with a few minor
exceptions) has become quite lucid on the topic of what the United States, as a
global empire, is and stands for. Another major shift we have observed is that a
significant percentage of the thinking people in the US no longer trusts their
national media.
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Spot
The Ridiculous Outlier. Submitted
by Tyler Durden on 01/06/2015. Presented with
absolutely no biased, judgmental, cognitively dissonant comments at all...
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Caught
On Camera: Albuquerque Police Officer Shot Numerous Times, Survives. Submitted by Tyler
Durden on 01/06/2015
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This Oil
Thing Is The Real Deal. Submitted by Tyler
Durden on 01/06/2015. There will be blood. It’s no longer about which
factors bring down oil prices, that’s old news; it’s about what oil prices
bring down. The oil price drop is a much bigger event than the US subprime
housing crisis, it’s bigger than everything put together that happened in 2008.
And this time, central banks are lame sitting ducks. Omnipotence is a harsh
mistress. She tends to backfire.
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Bill
Gross' 2015 Outlook: "The Good Times Are Over, The Time For Risk Taking
Has Passed". Submitted by Tyler
Durden on 01/06/2015
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Seven
Reasons To Be Fearful. Submitted by Tyler
Durden on 01/06/2015. Hope springs eternal that 2015 is the year that the
US economy stretches its escape velocity growth as consensus growth
expectations at 2.9% are still at their highest since 2005 (although world GDP
expectations are falling rapidly). However, as Bloomberg's Rich Yamarone
explains, with 5
of the Top 10 economies in the world in or near recession, the wall of worry
can be constructed as follows...
1) Strong Dollar. A strong dollar is in the best interests of the U.S. Until it isn’t. Dollar strength can carry some costs, particularly for investors. Corporate profits usually get crimped by a rising currency. Recently U.S. companies have started commenting on the dollar’s earnings impact.
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2) Emerging Markets. For the developing world, persistent dollar strengthening invites a great deal of instability. In the past, this has led to revaluations, pegging and de-coupling from the dollar.
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3) Cheap Oil. The dollar rally has also resulted in lower-priced commodities. This is welcomed by businesses in general, but hurts a good number of oil-producing companies and nations that depend on those revenues. Savings at the pump are positive for most households. Economic costs of cheap oil are more unevenly distributed. North American oil corporations’ capital expenditure plans are getting slashed for 2015.
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4) The Federal Reserve. The least likely risk is that the Fed adopts a severely restrictive policy stance that precipitates a recession. Historically, it’s always been the Fed that trips up the economy. That’s probably not the case with Fed Chair Janet Yellen. She has total support of the Fed governors. Rates will rise when the data support a full employment and stable price environment. Yet the rate increase won’t happen if the situation regarding key world economies, the stronger dollar or oil unfolds in an unpleasant manner.
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5) China. In the Chinese Zodiac, 2014 was the Year of the Horse, China’s current pace of aggregate demand is the same as during the global crisis and market meltdown in 2008. Today, rumors are running through the market of a Chinese devaluation. Don’t look for China to be the hero. We’re entering the Year of the Goat.
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6) Japan. When a country is stuck in a liquidity trap, monetary policy prescriptions of lower interest rates are ineffective. If it adopts a fiscally restrictive policy such as a consumption tax increase when things are just barely improving, it tends to send the economy into a tailspin. That’s exactly what occurred for Japan, as its economy slipped into its third recession since 2008 and entered its third lost decade. Japan cannot even benefit from the plunge in oil prices since the massive devaluation of the yen has negated much of the price decline in purchase terms.
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7) Europe. Multinational companies complain about Europe, where too many economies are on very thin ice. A collapse in Greece or Russia could precipitate a global crisis. If Russia implodes, the likelihood of a severe European recession increases sharply. Essentially all companies in the Bloomberg Orange Book of CEO Comments that dealings in Russia have already made mention of the drag on their performance because of the sanctions imposed internationally.
Source: Bloomberg Briefs. http://www.zerohedge.com/news/2015-01-06/seven-reasons-be-fearful
1) Strong Dollar. A strong dollar is in the best interests of the U.S. Until it isn’t. Dollar strength can carry some costs, particularly for investors. Corporate profits usually get crimped by a rising currency. Recently U.S. companies have started commenting on the dollar’s earnings impact.
----
2) Emerging Markets. For the developing world, persistent dollar strengthening invites a great deal of instability. In the past, this has led to revaluations, pegging and de-coupling from the dollar.
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3) Cheap Oil. The dollar rally has also resulted in lower-priced commodities. This is welcomed by businesses in general, but hurts a good number of oil-producing companies and nations that depend on those revenues. Savings at the pump are positive for most households. Economic costs of cheap oil are more unevenly distributed. North American oil corporations’ capital expenditure plans are getting slashed for 2015.
----
4) The Federal Reserve. The least likely risk is that the Fed adopts a severely restrictive policy stance that precipitates a recession. Historically, it’s always been the Fed that trips up the economy. That’s probably not the case with Fed Chair Janet Yellen. She has total support of the Fed governors. Rates will rise when the data support a full employment and stable price environment. Yet the rate increase won’t happen if the situation regarding key world economies, the stronger dollar or oil unfolds in an unpleasant manner.
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5) China. In the Chinese Zodiac, 2014 was the Year of the Horse, China’s current pace of aggregate demand is the same as during the global crisis and market meltdown in 2008. Today, rumors are running through the market of a Chinese devaluation. Don’t look for China to be the hero. We’re entering the Year of the Goat.
----
6) Japan. When a country is stuck in a liquidity trap, monetary policy prescriptions of lower interest rates are ineffective. If it adopts a fiscally restrictive policy such as a consumption tax increase when things are just barely improving, it tends to send the economy into a tailspin. That’s exactly what occurred for Japan, as its economy slipped into its third recession since 2008 and entered its third lost decade. Japan cannot even benefit from the plunge in oil prices since the massive devaluation of the yen has negated much of the price decline in purchase terms.
----
7) Europe. Multinational companies complain about Europe, where too many economies are on very thin ice. A collapse in Greece or Russia could precipitate a global crisis. If Russia implodes, the likelihood of a severe European recession increases sharply. Essentially all companies in the Bloomberg Orange Book of CEO Comments that dealings in Russia have already made mention of the drag on their performance because of the sanctions imposed internationally.
Source: Bloomberg Briefs. http://www.zerohedge.com/news/2015-01-06/seven-reasons-be-fearful
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Precious
Metals Dealer To Pay Employees In Bitcoin Even As "Go-To" Bitcoin
Exchange Is Massively Hacked. Submitted by Tyler
Durden on 01/06/2015
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Russian
Default Risk Surges To New 6-Year Highs As Ruble Rubble Returns. Submitted
by Tyler Durden on 01/06/2015. Russian macro data
provided just the impetus for a re-plunge in the Ruble (back above 63.5/USD)
and surge in Russian bond yields (back to 14%). While Russian stocks are
also retesting towards recent lows, it is Russian CDS that is the most telling
as it closed to day at 595bps - the widest since March 2009. While these
violent gyrations are new for recent history, they are not a new phenomenon,
but are quite characteristic of the country’s financial history.
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Canada
Heavy Oil Drops Below $35 As Rig Count Hits Record Low For January. Submitted
by Tyler Durden on 01/06/2015. the Canadian oil
rig count has never been lower for the first week of January. Will
the Canadian housing bubble be next?
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2015:
Now That The Fed Drove Everyone Into Ruinously Risky Bets.... by
Charles Hugh-Smith of OfTwoMinds blog, Submitted by Tyler
Durden on 01/06/2015. The more capital that is driven into risk assets,
the greater the financial devastation when the asset bubbles all pop, which
they inevitably will--and not in some distant future. It is impossible for
everyone to sell at the top before the implosion; the assets are owned by
someone all the way down.// http://www.zerohedge.com/news/2015-01-06/2015-now-fed-drove-everyone-ruinously-risky-bets
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Treasury
Yield Plunge Approaches Flash Crash Pace. Submitted by Tyler
Durden on 01/06/2015
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Recovery
Off: S&P 500 Loses 2,000 Level. Submitted by Tyler
Durden on 01/06/2015. We are going to need another Central Bank speaker
stat!! The S&P 500 (cash) index just broke below 2,000, 30Y
Yields are testing 2.50% yields (just 5bps from all-time record lows) and 10Y
well below 2.00%, gold is surging, and oil is plunging... The
question for The White House is - should we still blame Europe?
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Crude
Crash Crushes Credit Risk: WTI Hits $47 Handle, Energy Spreads Top 1000bps. Submitted by Tyler
Durden on 01/06/2015. As energy stocks continue to catch down to
oil-price's incessant weakness, US energy company credit risk has surged
back above 1000bps for the first time in 3 weeks. WTI Crude oil prices just
traded to a $47 handle - the lowest since April 2009.
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Stock
Slump Erases All Post-FOMC Gains. Submitted by Tyler
Durden on 01/06/2015. But, but, but... low oil prices are awesome and
Yellen was kinda sorta dovish... right? After ripping 5 to 6% off the
Yellen FOMC lows in thin illiquid holiday trading, US equities have
roundtripped (just as Treasury yields already had) - erasing all that
'hard-earned wealth'.
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The
ECB "Leaks" Its 3 QE Choices. Submitted by Tyler
Durden on 01/06/2015.
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Greek
Bonds Tumble As Report Sees "Decisive Victory" For Syriza. Submitted
by Tyler Durden on 01/06/2015 As
The FT reports, forecasting group Oxford Economics says it has carried out
an "in-depth" analysis of opinion polls ahead of Greece's snap
general election on January 25, which shows that the radical Syriza
party is on course to win a "clear mandate" to push through
anti-austerity policies. Will German worry now?
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Service
ISM Tumbles To Lowest Since June, Biggest Miss Since 2013, Prices Crash To 2009
Level. Submitted by Tyler
Durden on 01/06/2015. While the details were just as atrocious, with every
single ISM component declining in December - something that has not
happened since the Great Financial Crisis - a report which literally said
"Obamacare and wages are still the biggest enemies to profitability",
all eyes are focused not so much on the tumble in Business Activity and New
Orders, but on Prices, which at 49.5, posted their first contraction since
September 2009.
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US
Factory Orders Drop Most YoY In 19 Months. Submitted by Tyler
Durden on 01/06/2015. For the 4th month in a row, US Factory Orders have
fallen MoM. November's 0.7% drop is worse than the 0.5% decline expected
and leads to the biggest yearly drop since March 2013. Capital Goods New
Orders tumbled 0.8% as did non-defense capital goods shipments (down 0.9%).
Having risen for 3 months, November saw a 8.2% plunge in defense new orders but
it was the across-the-board slide in consumer goods orders and shipments, IT
new orders, and Computers & Electronics (despite the massive tax cut
from low oil prices!!??) that weighed heavily.
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December
Jobs "Significantly Below 200,000", Q4 GDP Tumbles To 2%, Markit
Warns. Submitted by Tyler
Durden on 01/06/2015. Markit's US Services PMI missed expectations of 53.7,
priting at 53.3, its lowest since Feb 2014 (mid Polar Vortex). From record
highs in June, PMI has plunged non-stop for six months leaving Markit
noting Q4 growth is looking more like 2.0% than the 5.0% exuberance in
Q3.
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Low
Oil Prices Are "Unequivocally" Bad For 756 US Steel Workers, 2 Plants
Idled. Submitted by Tyler
Durden on 01/06/2015. Citing "softening market conditions
influenced by oil," US Steel has issued lay-off warnings to 756
workers in the US... Layoffs will begin in early March as both Ohio and
Texas plants will be idled.
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Wrong
Again: Hedge Funds Start 2015 Most Long The S&P Since 2013; Most Short The
10 Year Since 2010. Submitted by
Tyler
Durden on 01/06/2015
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Submitted by Tyler
Durden on 01/06/2015 - 07:39
- Average 10-year yield of U.S., Japan and Germany dropped below 1% for the first time ever: Free Money in Bond Markets Shows Global Economy Still Struggling (BBG)
- Brent falls below $52 as oil hits new five and a half year lows (Reuters)
- China Fast-Tracks $1 Trillion in Projects to Spur Growth (BBG)
- Saudi Arabia Raises Price of Main Oil Grade for Asian Buyers (BBG)
- Oilfield Writedowns Loom as Crude Slump Guts Drilling Values (BBG)
- Biggest Oil-Rig Drop Since 2009 Spells Tough Year Ahead (BBG)
- CIA says its inspector general is resigning at end of month (Reuters)
- Pipeline IPOs Climb on Demand for Returns Immune to Oil (BBG)
- Natural Gas No Savior for Investors Seeking Oil Refuge (BBG)
- Euro zone economy ended 2014 in poor shape (Reuters)
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The
Crunch Continues: WTI Tumbles Under $49, 10Y Dips Below 2%. Submitted by Tyler
Durden on 01/06/2015
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Jeff
Gundlach: "If Oil Drops To $40 The Geopolitical Consequences Could Be
Terrifying". Submitted by Tyler
Durden on 01/05/2015. "Oil is incredibly important right now. If
oil falls to around $40 a barrel then I think the yield on ten year treasury
note is going to 1%. I hope it does not go to $40 because then something is
very, very wrong with the world, not just the economy. The geopolitical
consequences could be – to put it bluntly – terrifying."
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