DIC 9 16 SIT EC y POL 1
ZERO HEDGE
ECONOMICS
World context:
As the WSJ
reports, these prominent hedge fund managers join an increasingly
bigger and louder chorus which says central bank bond buying programs that are
pumping trillions of dollars into global markets will end badly.
In yesterday's main event, the ECB said it would extend
its asset purchase program to the end of next year, buying bonds at a reduced
rate. As the following chart from BBG
projects, at the ECB's revised rate of bond purchases, its balance
sheet will soon surpass that of the Fed.
So what happens next? Prominent managers have told The
Wall Street Journal in recent interviews of their doubts about the endgame for
quantitative easing around the world.
“There’s
no non-messy way out of this,” said Luke Ellis, chief executive of Man
Group, one of the world’s biggest hedge-fund firms with $80.7 billion in
assets.
This is what, according to
the hedge fund managers interviewed by the WSJ, will
happen:
Damage to economic growth …
Damage to society …
Deflation …
Hard stop Finally, hedge-fund managers see
difficulty in ending quantitative easing.
“Central banks are sadly helping
to create the ‘black hole,’ and the sucking noise and pull is getting bigger,”
said Aberdeen’s Mr. McCaffery, “but you just have to keep going as your
alternative options as a central banker are just too unpalatable to consider
The punchline:
“In the long term, it implies
rates can never go up, as the damage will be extraordinary in nature,”
he said, as they struggle with their debt loads. For now, however, the market
which moments ago hit new all time highs, is blissfully ignoring all of the
above.
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Defying consensus, JPM found
retail spending activity trends "worsened post the
election contrary to stock market moves and color from some management
teams" when analyzing satellite image car counts at parking lots. It finds
that this is "interesting as it is counter to prevailing thought."
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Back to SMALL IS BEAUTIFUL: Towns & cities,
can create their own currency.. later states & regions
Although this transition may
feel to some like a natural progression into the digital age, the real
motivation to go cashless is downright sinister.
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In a
genuinely free market, the profitability of firms is a good reflection of their
ability to better satisfy the wants of consumers. In a world of this sort of
crony capitalism, profits are de-linked
from a connection with consumers and we cannot say with confidence that
any given firm’s profits reflect value creation.
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ONE WAY STREET
Why does this...
BUT..
"Most Shorted" stocks soared this week,
though we note Friday saw the first down day in over a week...
Stocks are now the handy leaders on the year with the
long-bond back to unch...
See all graphs at: http://www.zerohedge.com/news/2016-12-09/another-day-another-melt-stocks-gold-hits-10-month-lows
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As momentum feeds on itself, it appears Trumphoria is in full swing...
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“Lesson number one: Don’t underestimate the other guy’s greed.” - Scarface
“Around 11:45, a series of electronic buy programs helped lift the
Dow and S&P out of the morning’s narrow range. I noted that in an email to
some friends around noon:
What many of us did not realize at the moment was the probability
that the buy programs may have been triggered by events in another sector. Just
before the buy programs kicked in, the rally in the Dow Transports was shifting
up a gear as the index was on the verge of punching through to a new record
high. If the Transports made a new
record high, it would confirm the record high in the Industrials, thus giving a
Dow Theory buy signal.
As that realization spread,
the algorithms kicked in with buy program after buy program and the race was
on.”
The problem with the
breakout and advance on Wednesday is the exacerbation of the market’s deviation
from its longer term mean. As I noted on Tuesday:
“The
importance of understanding the nature of reversions is critical for investors.
Markets rarely move in one direction for very long, notwithstanding overall
trends, without a correction process along the way. While the chart
below shows this clearly for the overall market, it applies to individual sectors
of the market as well.”
see graph at : http://realinvestmentadvice.com/wp-content/uploads/2016/12/SP500-MarketUpdate-120816.png
READINGS for this weekend.
Trump, Economy & More Trump
- Don’t Trust Unemployment Rate by Doug Short via Financial Sense
- Sustaining The Trump Rally by Mohamed El-Erian via Project Syndicate
- 2 Reasons Trumponomics Will Not Deliver by Greg Silberman CFA via Harvest (HVST.com)
- No Recovery In U.S. Economy by Jim Clifton via Gallup
- Trump Will Send U.S. Into Recession by Avi Tiomkin via Forbes
- Taxes: Trump Should Copy Reagan by Larry Summers via Washington Post
- Economic Stupidity Of Carrier Handout by Kevin Williamson via National Review
- Forget The Trade Deficit by Greg Mankiw via NYT
- Why Trump Boom Is A Real Possibility by Ken Rogoff via Project Syndicate
- The Trouble With Trump’s Infrastructure Plan by Michelle Chen via The Nation
- Trump Doesn’t Herald New Paradigm Of Growth by Joachim Fels via PIMCO
- Trump Inherits Best Economy In A Generation by Chris Matthews via Fortune
- Donald Trump & The New Economic Order by Michael Spence via Project Syndicate
- Political Spin In Full Spin On Obama Economy by Ray Keating via Real Clear Markets
- To Save 800 Jobs, Trump Potentially Costs More by John Tamny via RCM
- What Trump Didn’t Learn From The Financial Crisis by Noah Smith via Bloomberg
….
Markets
- Wall Street Leading Sheep To Slaughter by David Stockman via Daily Reckoning
- Scariest Chart I’ve Seen In A Long Time by Bob Bryan via Business Insider
- Why Won’t The Fed Raise Rates? by Norman Mogil via SoberLook
- Rosenberg Throws Up ON “Trump Rally” by David Rosenberg via ZeroHedge
- Has Trump Unleashed The Dollar Bull by Alan Kohler via The Australian
- Bond Sell-Off Could Boost Stocks by Lee Jackson via 24/7 WallStreet
- Time To Take Profits From Oil Trade by Thomas Kee via MarketWatch
- Time To Party by Crystal Kim via Barron’s
- Market’s Love Trump Agenda by Charles Calomiris via E21.com
- 5 Reasons Stocks Are In Melt-Up Mode by Adam Shell via USA Today
- An Old Indicator Flashes A Red Light by Brett Arends via MarketWatch
- Where To Find Yield Now by Michael Kahn via Barron’s
- Trump Unleashes Market’s Animal Spirits by Marc DeCambre via MarketWatch
- Is Trump Rally Turning Into A Bubble by Sue Chang via MarketWatch
- Don’t Get Used To The Trump Rally by Bill Gross via Janus Capital
- Now Is The Time For More Credit Risk by John Coumarianos vis WSJ
- Euphoric Market Rally Could Be Derailed, Unless… by Paul La Monica via CNN Money
- Goldman Sachs’ Covert Scheme To Raise Oil Prices by Michael Covel via Daily Reckoning
….
Interesting Reads
- Best Investing Books Of All Time by R.J. Weiss, CFP via The Ways To Wealth
- CRE: Towers Of Gold To Pillars Of Salt by Danielle DiMartino-Booth via Money Strong
- Behavioral Insights On Financial Advice by Shreenivas Kunte, CFA via Enterprising Investor
- Just How Overvalued Is The Market? by Tyler Durden via ZeroHedge
- A Better Theory To Explain Manias by Noah Smith via Bloomberg
- Don’t Confuse Italy with Brexit by Therese Raphael via Bloomberg
- Passive Investors’ Pain Is About To Begin by Conor Sen via Bloomberg
- Obama Recovery Has Been A Myth by Terry Jones via IBD
- Repeating All The Mistakes Of The Great Depression by Scott Sumner via EconLog
- American Dream May Be Hard To Revive by Bob Davis via WSJ
- Dividends – The Good & Bad by Ironman via Political Calculations
- Corporate Taxes In A Trump World by Ed Yardeni via Dr. Ed’s Blog
- Amazon Unveils Major Job Killer by Golding, Massarella & Covert via NY Post
- It’s The “Fat Left Tail” That Gets You by John Hussman via Hussman Funds
- Stocks & Volatility Both Jump – Who’s Right? by Dana Lyons via Tumblr
- Corporate Valuations Back To Dot.Com Bubble Peak by Jesse Felder via The Felder Report
…
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POLITICS
According to leaked documents released by
Edward Snowden, British intelligence spied on Israeli diplomats and military
officials in 2008 and 2009, warning that "the Israelis constitute a true threat to regional security, notably
because of the country’s position on the Iran issue."
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WORLD ISSUES and ME
Forecasting the future of currencies is a notoriously risky business.
Forces may push them in a particular direction, but in the ever-changing
environment of the foreign exchange market, events anywhere in the world, at
any point in time, can alter their course. Nevertheless, the dollar
is steadily strengthening, and it could
create headaches in other parts of the world.
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India continues to stagger from bad to worse
followinhg Modi's demonetization. With just 35% of ATMs nationwide operational, Goldman warns the shortage of
cash continues to incentivize the use of alternate payments, including
extension of informal credit and a return
to barter systems. Addtionally, the slowdown in activity is dramatically
reflected in lower tax collections and
discounts offered by luxury car companies.
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GLOBAL RESEARCH
Jeff Sessions, Trump’s Attorney General
Pick, Introduced First Bill to Exempt Fracking from Drinking Water Rules By Steve Horn
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The
Billionaire Energy Investor Who Vetted Trump’s EPA Pick Has Long List of EPA
Violations by Steve Horn
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INFORMATION CLEARING HOUSE
UK
Govt-Funded Propaganda for Syrian Rebels By
Rania Khalek
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Blacklist
Promoted by the Washington Post Has Apparent Ties to Ukrainian Fascism and CIA
Spying
By Mark Ames
By Mark Ames
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Nuclear
Deal Opponents Urge Military Confrontation with Iran By National
Iranian American Council
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COUNTER PUNCH
Michael Hudson - Sharmini Peries Orwellian
Economics
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Margaret Kimberley Black Fear of Trump
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Eamonn Fingleton U.S.
China Policy: Is Obama Schizoid?
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SPUTNIK and RT SHOWS
Trump’s Transition Team Mocks Reports of Russia's Alleged
Election Meddling
https://sputniknews.com/us/201612101048389112-trump-russian-interference-elections/
https://sputniknews.com/us/201612101048389112-trump-russian-interference-elections/
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Pentagon Preparing Proposals for Trump's Gov't to Intensify
Fight Against Daesh
https://sputniknews.com/middleeast/201612101048390448-pentagon-trump-daesh-fight/
https://sputniknews.com/middleeast/201612101048390448-pentagon-trump-daesh-fight/
Related
Daesh 'Would Have Received US Weapons in Syria if They Had
Better PR'
https://sputniknews.com/middleeast/201612091048380524-us-weapons-syria-daesh/
https://sputniknews.com/middleeast/201612091048380524-us-weapons-syria-daesh/
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US Decision on Arms Supplies to Syria Not to Seriously Affect
Aleppo Situation – Lavrov https://sputniknews.com/politics/201612091048368036-us-arms-supplies-syria/
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France's Fillon May Dramatically Change EU's Stance on Russia
if Wins Presidency
https://sputniknews.com/europe/201612101048387766-fillon-president-eu-russia/
https://sputniknews.com/europe/201612101048387766-fillon-president-eu-russia/
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RT SHOWS
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NOTICIAS IN SPANISH
Diez propuestas para no repetir la capitulación que hemos conocido en
Grecia sobre empoderamiento popular. Éric Toussaint
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Vídeos rebeldes doc que no puedes perder [51.35 min.] Investigación Médica:
Houston, tenemos un problema Álvaro Toepke
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Una salida “a la brasileña” Eric Nepomuceno
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Trump: Keynes contra Hayek ¿? Miguel Ángel Ferrer
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PRESS TV
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Rudy won’t be US secretary of state: Bolton is the
worse, why changing?
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Obama orders full review of Russia 2016 hacking
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‘Israel sending a message to US with new settlement plan
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