JAN 10 18 SIT EC y
POL
ND denounce Global-neoliberal debacle y propone State-Social
+ Capit-compet in Econ
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they
documented with graphics
The Economy today:
The day started off
with some excitement... But by the close all was
forgotten...
See chart 1…
China put the fear
of god into a few bond traders this morning...(30Y
spiked 5bps higher only to close down 1bps on the day) [[ Does China rules the US market? ..
This delusion may come from ...]]
See chart 2…
And prompted the herd-like response proclaiming that this is
it - bond yields are blowing out. However, thanks to a super-strong 10Y auction, bonds were bid back
into the green leaving 10Y yields lower on the day... See
chart 3…
And the yield curve flattened dramatically... See chart 4…
All the major US equity indices
closed lower (except for Trannies which ramped into the close), but were well off the lows...
High yield bond prices continue to
tumble... See chart 5
The Dollar
Index ended lower but followed the same pattern
as everything else today as it plunged
See chart 6
Gold
gained on the day.. and is outperforming Bitcoin YTD... See 7: 3 charts…
Finally, Rudy Havenstein summed it up perfectly...SP
VIX (VXX) 25.96 DOWN
…
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Is Mr Powell becoming a wish-tinker
master?: Fact vs Conclus.. 2+2= 5 is Orwellian
dystopia
"The public is being conditioned to view Powell as Trump's guy... This could not be further from the
truth. ... Trump, and by extension
all the conservatives that support him, are meant to take the blame when the 'everything'
bubble vaporizes our financial structure..."
Many people do not realize that
America is not only entering a new year, but within the next month we will also be entering a new economic era.
In early February, Janet Yellen is set to leave the Federal Reserve and
be replaced by the new Fed chair nominee, Jerome Powell. Now, to be clear, the
Fed chair along with the bank governors do not set central bank policy. Policy
for most central banks around the world is dictated in Switzerland by the Bank for International Settlements. Fed chairmen
like Janet Yellen are mere mascots implementing policy initiatives as ordered. This is why we
are now seeing supposedly separate central banking institutions around the
world acting in unison, first with stimulus, then with fiscal tightening.
Here are
some of the most astonishing quotes by Powell from those transcripts along with
my commentary. These quotes are yet
another piece of evidence that vindicates my position on the Fed as an
economic saboteur and my position on the historic market bubble the bank has
created:
Powell: "I have concerns about more purchases. As
others have pointed out, the dealer community is now assuming close to a $4
trillion balance sheet and purchases through the first quarter of 2014. I admit
that is a much stronger reaction than I anticipated, and I am uncomfortable
with it for a couple of reasons.
First, the question, why stop at $4 trillion?
The market in most cases will cheer us for doing more. It will never be enough
for the market. Our models will always tell us that we are helping the economy,
and I will probably always feel that those benefits are overestimated. And we
will be able to tell ourselves that market function is not impaired and that
inflation expectations are under control. What is to stop us, other than much
faster economic growth, which it is probably not in our power to produce?"
Assessment: By all indications the Fed
did do more, MUCH more. Including QE3, various
stimulus packages and incessantly low interest rates for years, the Fed
has essentially stepped in every time stock markets in
particular were about to crash back to their natural state of decline.
Powell is being rather honest in his estimation here that these stopgaps are in
fact temporary and that the Fed cannot produce true economic growth to support
the market optimism they have created through their interventions. He is
stating openly that markets will only remain optimistic so long as they are assured
that the Fed will continue to intervene.
This is probably why it took almost six years before these
transcripts were released.
Powell: "When it
is time for us to sell, or even to stop buying, the response could be quite
strong; there is every reason to expect a strong response. So there are a
couple of ways to look at it. It is about $1.2 trillion in sales; you take 60
months, you get about $20 billion a month. That is a very doable thing, it
sounds like, in a market where the norm by the middle of next year is $80
billion a month. Another way to look at it, though, is that it's not so much
the sale, the duration; it's also unloading our short volatility
position."
Assessment: And here we have Powell's shocking admission,
clarifying his previous point — the "strong response" that Powell is
referring to is a market reversal, or bubble implosion.
He even admits the existence of the Fed's "short position on
volatility." This explains the strange behavior of the VIX index, which has plunged
to record lows as "someone" continually shorts VIX stocks in order to
interfere with any decline in markets.
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The Only
Benchmark Of Wealth is more wealth?
"Matching the performance
of the S&P 500 is cheap and easy for a reason. It is also
irrelevant to compounding wealth
as it ignores important aspects of the wealth management process such as avoiding large and wealth-debilitating drawdowns."
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"If this relationship is meaningful there’s a singularity where rising yields will
hurt stocks as the cost of carry of the
debt will grind everything to a halt."
Correlation does not imply causation
but as you know I’ve been floating my theory of everything a bit lately (see: 2018 Market Outlook) and
it relates to the relationship between yields and stock
prices. Not just as a causal relationship, but as THE relationship to
watch. My basic premise is that low yields have been the primary function
with which the US, and
the world for that matter, has been keeping itself on
an artificial growth path as one bubble after another has burst. Unprecedented debt has been the result and low yields keep masking and delaying the eventual reckoning (see
also The Debt Beneath).
You may have seen this chart from my
writings: See chart 1…
The primary premise: If this relationship is meaningful there’s a
singularity where rising yields will hurt stocks as the cost of carry of the
debt will grind everything to a halt.
Yesterday a
couple of odd things happened. Firstly as I outlined internals were
negative all day:
See chart 2…
Since the beginning of the year we’ve had virtually zero
selling and cumulative internals always ended the day in the positive. Except yesterday when the 10 year jumped above 2.5%. Negative internals prevailed all day long: See chart 3…
Let’s zoom in on my 10 year trend chart: See chart 4…
If this trend line
is the relevant one, we just did something we haven’t
done since 2007: Bust above the trend line.
2017 saw a
tag of the trend line and then a renewed rejection. The pattern is eerily
similar to 2006 and 2007. Are we repeating this pattern here? Or are
yields about to break out? I can’t say, but
if central banks wish for inflation I say be careful
what you wish for.
Were
yesterday’s negative internals (strength
in banks notwithstanding) already an indication that
the larger stock market is already sensitive to higher rates?
What is that point of the singularity?
Jeffrey Gundlach seems to think it’s at 2.63%:
“if the 10Year goes to 2.63% stocks will be negative impacted.”
Jeffrey also is
watching yields in relation to trend lines and his are different to mine which
is fine:
See chart 5…
Ultimately the market will let us know which trend line is
relevant here.
But the main message is the same:
Yields are rising: See chart 6…
And like us Gundlach is highlighting the complete lack of corrective
activity, the one way action in equity prices
and unprecedented volatility compression:
See 3 charts on this arg…
Overnight we see
flushing in markets for the first time in 2018 as yields rose even further:
see chart
7… Guess markets didn’t like that.
Is 2.5% the singularity?
- If the 10 year drops back below 2.5% and stocks rally I think we have our answer.
- If it extends above 2.6% and stocks continue to drop I think we also may have our answer. In which case the answer is 2.5% not 2.63%.
- If stocks rally and the 10 year keeps moving higher then 2.63% is the next level to watch.
For now the 30 year
track record is yields dropping following a tag of the
trend line, or fake out above.
….
Source: See all chart here: https://www.zerohedge.com/news/2018-01-10/bond-market-singularity
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On the same day as Chinese
officials, reviewing the nation’s foreign-exchange holdings have recommended
slowing or halting purchases of U.S. Treasuries, Moody's warns that US tax cuts are seen as a
credit negative for the USA Sovereign rating.
…
See chart at this source: https://www.zerohedge.com/news/2018-01-10/moodys-warns-washington-usa-credit-rating-risk-over-trump-tax-cuts
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"Do you think Gross and Gundlach still
have some selling to do? Not a chance. If
anything, they are leaning short duration (at least versus their benchmark) and
talking their book... and if China had
selling to do, would they jawbone down the price of US
treasuries ahead of their sales? Do you think they are that naive?"
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POLITICS
Seudo democ y sist
duopolico in US is obsolete; it’s
full of frauds & corruption. Urge cambiarlo
Good news:
One condition:
Julian Assange, at the request of
the Government of Ecuador, undertook not to intervene in matters unrelated to
his asylum status...
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Bad news:
"It’s midnight in America
right now. But the real question is, will there
be a dawn? That’s up to you and me. The future is in our hands."
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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
Piracy
without borders.. les compraron el oro a precio de banana
The robbery occurred on December 6
and remains under investigation. The customer affected
by the theft has been fully reimbursed by Brink’s.
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"We are also aware of the news through some media reports. We think the report might have
cited wrong sources or may be fake news."
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When the Chinese Treasury selloff
begins, we will know. For now - and contrary
to what Bill Gross said earlier - IT CERTAINLY HAS NOT.
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"It is important for China and Russia to contain and defeat the
terrorist phenomenon in the Middle East, as well as to defang the strategists in the US deep state
who are unceasing in their efforts to employ jihadism as a
weapon to destabilize Eurasia’s integration projects."
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DEMOCRACY NOW
US politics crisis: Trump captured by Deep state to
reproduce old cronyism without alter-plan
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars: its profiteers US-NATO
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INFORMATION CLEARING HOUSE
Deep on the US political crisis, their internal conflicts n
chances of WW3
Shadow Armies: The Unseen, But Real US War In
Africa By Ramzy Baroud
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Arab Violence, Volatility, and Vulnerability
in the Era of Trump By Rami
G. Khouri
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Finding the Answer to a Riddle Shrouded in a
Mystery By Pepe Escobar
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USA: A Different Strategy For A Different
Ambition By Christopher Black
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SPUTNIK and RT SHOWS
Geopolitics & the nasty business of US-NATO-Global-wars
uncovered ..
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RT SHOWS
Keiser
Report Episode
1174 Max and Stacy discuss bitcoin
boosting Japan’s GDP . In 2nd half Max interviews Jim Rickards
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NOTICIAS IN SPANISH
Latino America looking for alternatives to neoliberalism to
break with Empire:
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COL -Comunicado del ELN: Pactar un nuevo cese
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PRESS TV
Global situation described by Iranian observers..
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US
may have been involved in raids on RU in Syria
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