DEC 2 17 SIT EC y POL
ND denuncia debacle d Globaliz neoliberal y
propone State-Social + Capit-compet in Econ
ZERO HEDGE ECONOMICS
Neoliberal globalization is
over. Financiers know it, they documented with graphics
Global context:
"We have a contrarian view on global growth in 2018
and consider that the consensus is a bit too rosy. We
expect lower GDP growth in the second
and third quarters due to the contraction in the credit impulse in China.
"
1-
As mentioned by the
International Monetary Fund, China still represents one-third of the global growth
impulse. In Q2'17, China’s credit
impulse declined by 25% year-on-year, therefore reaching a new post-crisis low.
Since this index leads the real economy by nine to 12 months, we expect worse
data next year for China, but also for the global economy.
2-
The global economic situation
has been improving over the past years. Global trade but also non-construction
investment in Western countries has been catching up with the pre-crisis
long-term trend. However, growth is not as solid as most believe
and could derail anytime soon due to the following headwinds:
What we
call growth is a recovery driven by debt and property bubbles. There
exist serious concerns about increasing global corporate debt, which represents
93.5% of global GDP versus 84.5% in 2008. As a result of cheap money, many
companies have increased their indebtedness, sometimes unwisely. In the US, corporate debt is at its highest level relative
to GDP since the financial crisis (45.2%) but, at the same time, the spread on US corporate bonds is at the lowest historical
level, around 1%. This is clearly a market anomaly that could be one of
the triggers of the next crisis
In addition, the credit impulse leads to a lower growth impulse than before 2008. Based on Bank for International Settlements data, before the crisis, the euro area needed on average 0.9 units of credit to create one unit of GDP. After the crisis, 1.06 unit of credit is required to create one unit of GDP.
3-
Expectations concerning Trump’s
fiscal reform remain high but it is unlikely that an agreement will be reached
by end-of-year. If the bill goes to Q1'18, the Democrats and the Republicans
will certainly be motivated by the mid-term elections to make cuts favourable
to voters... and less favourable for businesses.
If this
occurs, the positive momentum created by the reform could vanish and the hopes
of extending the business cycle could also fade away. See image at: https://www.tradingfloor.com/images/article/max608w/a32bf0ed-d8ee-4a10-8360-4358382d0919.png
4-
Will inflation ever come back?
Lowflation has been one of the
main macroeconomic issues in recent years and it is expected to remain a thorn
in the foot of central bankers for longer yet. Since
September 2016, China – the main exporter of deflation – has started to export
inflation along with higher global commodity prices (up 3% in October 2017
year-on-year, based on data from the World Bank), but global inflation
still remains subdued.
Central bankers, and
particularly European Central Bank president Mario Draghi, consider that low inflation is only a transitory phenomenon linked to
hysteresis and underemployment and that job gains will eventually push
inflation to target. Those elements certainly play a role in the short
and medium terms but as pointed out by Benoit Coeuré, the
problem is that the Phillips curve is “flatter, non-linear,
mid-specified”.
See image at: https://www.tradingfloor.com/images/article/max608w/ed305d42-165d-43e1-83ae-4f9a299cbc3e.png
5-
Should we fear higher bond yields?
Since the Fed has mentioned a
switch towards a more restrictive monetary policy, the market fears higher bond yields. As
a matter of fact, global market conditions remain very accommodative. Yield
on global government bonds (all maturities included) have stabilised in a range
between 1.1% and 1.4% in 2017 after dropping to a bottom at 0.65% in July 2016.
See image at: https://www.tradingfloor.com/images/article/max608w/08857107-5c01-40d3-9076-3aebd62eb722.png
Contrary to common belief, an exit from lax monetary policy does not mean
an end to the bond market madness. The most striking
financial event of end-year, though one of the less commented-upon, is that the
French BBB Veolia is getting paid to borrow.
This is
not a normal market condition at all. We are in "la la land". Tighter monetary conditions are not expected to
change this situation to any significant degree since
central banks are actually not the main drivers of low yields.
The
borrowers hold the cards in today’s lending market, so the cost of capital can
only remain low to encourage more borrowing. This trend is particularly noticeable in
countries that are in an advanced phase of demographic decline such as Japan as
well as some CEE countries.
What could go wrong?
a- Geopolitical risk is still on the radar in
2018 due to the upcoming elections in Italy and in the US,
the complicated Brexit process, and persistent tensions
in the Middle East and in the Korean peninsula.
b-We are in a world of excess liquidity leading
to the creation of bubbles. This is the most dangerous
financial and macroeconomic risk for the debt-driven recovery. A market is in a bubble situation when prices become
super-exponential, which is currently happening in many markets all over
the world: property, virtual currency, FANG, and the
negative-yielding part of the bond market that accounts for around $8 trillion.
c- The
U.S. tech rally may not have that much further to run, so some traders
are looking abroad to find growth. “BAT” stocks—Baidu,
Alibaba and Tencent—are fast becoming a favorite buy. Click here for more.
Read More
….
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According
to JPMorgan, since 2009, the cumulative inflow into cryptos has been a paltry
$6bn, well below the current market cap of $330bn. This means that as new capital flows into the crypto space, the
potential price gains are unprecedented...
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RELATED 1: The
Government Is Coming For Your Bitcoin
The same day Bitcoin cracked its all-time high above $11,000,
the government dealt its
first blow to the crypto world...
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RELATED
2:
After 'crashing' earlier in the week,
Bitcoin soared in the last 24 hours following confirmation from the CFTC that it has approved regulated futures
(and options) trading on CME, CBOE, and Cantor. This
sent the price back above $11,000 and shifted the crypto-currency to become the sixth most-circulated currency in the world.
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Not even
close...
…
So now we are at the apex of the most incredible
nest of financial bubbles in all of human history.
One of
my favorite charts is below, which shows that even the smartest minds among us
(Sir Isaac Newton, in this case) can succumb to the mania of a bubble:
That means the remaining 90% don’t. For these
bagholders, the losses will range from 'painful' to 'financially fatal'.
Which
brings us to the conclusion that a similar proportion
of people will be emotionally unprepared for the bursting of these bubbles.
Again, playing the odds, I'm talking about you.
Understanding 'Real' Wealth
In
order to fully understand this story, we have to start right at the beginning
and ask “What is wealth?”
Most
would answer this by saying “money”, and then maybe add “stocks and bonds”. But
those aren't actually wealth.
All financial assets are just claims on real
wealth, not actually wealth itself. A pile of money
has use and utility because you can buy stuff with it. But real wealth is
the "stuff" -- food, clothes, land, oil, and so forth. If you
couldn't buy anything with your money/stocks/bonds, their worth would revert to
the value of the paper they're printed on (if you're lucky enough to hold an
actual certificate). It’s that simple.
Which
means that keeping a tight relationship between 'real wealth' and the claims on
it should be job #1 of any central bank. But not the Fed, apparently. It's has increased the number of claims by a
mind-boggling amount over the past several years. Same with the BoJ, the
ECB, and the other major central banks around the world. They've embarked on a
very different course, one that has disrupted the
long-standing relationship between the markers of wealth and real wealth
itself.
They
are aided and abetted by both the media and our educational institutions, which
reinforce the idea that the claims on wealth are the same as real wealth
itself. It’s a handy system, of course, as long
as everyone believes it. It has proved a great system for keeping the poor
people poor and the rich people rich.
But trouble begins when the system gets seriously out of whack. People begin to question why their money has any value at all
if the central banks can just print up as much as they want. Any time they
want. And hand it out for free in unlimited quantities to the banks. Who have
their own mechanism (i.e., fractional reserve banking) for creating even more
money out of thin air.
Let's express this visually.
“GDP” is a measure of the amount of goods and services available and
financial asset prices represent the claims (it's not a very accurate measure of real wealth,
but it's the best one we’ve got, so we’ll use it). Look
at how divergent asset prices get from GDP as bubbles develop:
What
we see in the above chart is that the claims on the economy should, quite
intuitively, track the economy itself. Bubbles occurred whenever the
claims on the economy, the so-called financial assets (stocks, bonds and
derivatives), get too far ahead of the economy itself.
This is a very important point. The claims on the economy are just that: claims. They are not the
economy itself!
…
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POLITICS
La seudo democ y sist duopolico es obsoleto por fraudulento y
corrupto. Urge cambiarlo
Shortly before 2am, the Senate passed "the most sweeping rewrite of
the U.S. tax code in three decades" slashing the corporate tax rate
and providing temporary tax cuts for most Americans, handing Republicans
a badly needed victory. As usual, nobody actually read
what's in the bill, so here is a quick breakdown.
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The Path To
Impeachment [[ The poll is not reliable. A real one may chow
more than 50% ]]
What
constitutes an impeachable offense?
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"The
move is really an attempt by Washington's neoconservatives to prevent any criticism of US interventionist
foreign policy..."
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WORLD
ISSUES and M-East
Global depression is on…China,
RU, Iran search for State socialis+K- compet. D rest in limbo
As Russia and China spearhead a cross-border gold trading system, a
new physical gold pricing benchmark looks to be on the horizon...
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Israel is the first country in the world to use unmanned ground vehicles (UGVs) to not only
patrol its borders but also to replace soldiers on missions, as well.
[[ It is not the 1st one ]]
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GLOBAL
RESEARCH
Global Econ-Pol crisis leads to
more business-wars: profiteers US-NATO
under screen
The
Coming War on Lebanon: Israel, Saudi Arabia and the U.S. Prepare for a
Long-Planned Middle East War By Timothy
Alexander Guzman,
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INFORMATION
CLEARING HOUSE The best!
Progress Report on the US-Russian War By The Saker
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Another Empty “Bombshell” Russiagate Story By Caitlin Johnstone
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The Curious Case of Jared Kushner and the
Israel Lobby By Richard
Silverstein
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Obama’s Crimes are Revealed Under Trump By Margaret Kimberley
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A President Made for a Zombie Apocalypse
Media World By Tom Engelhardt
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From the Caucasus to the Balkans, China’s
Silk Roads are Rising By Pepe
Escobar
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America's Monetary Imperialism By Michael Hudson In case you miss it
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Sen. Chuck Schumer Shames GOP Tax Bill: It's
A 'Stunning Deception By
Carla Herreria
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When White People Riot: GOP Tax Reform By Nina Burleigh
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Killing the Biosphere to Fast-track Human
Extinction By Robert J.
Burrowes
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SPUTNIK
and RT SHOWS
The nasty business of
US-NATO-Global-wars uncovered ..
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RT SHOWS
The Great American Pilgrimage Southern
boarders
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NOTICIAS
IN SPANISH
Latino America fight to break
with collapsing Empire: leftist view on
alternatives
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PRESS
TV
Global situation described by
Iranian observers.. Titles distorted n incomplete sentences
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