JAN 16
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
As
stocks slumped this afternoon, mainstream media turned into farce...
No News Was Great News as The Dow topped 26k at the
open - rallying that last 1000
points at a record-smashing pace of 0.57% per day (just seven days). This is the most-aggressive rise in The Dow ever... triple the pace of the 24k to 25k advance
Bonds and Stocks traded in sync
with one another today - which is out of the norm - with investors buying both
together early and selling both together after...Until
stocks started to get really hammered...
As
we noted earlier, S&P options skew reached a record low (greed) level today...
The
yield curve continued to flatten to new cycle lows..
The Dollar Index gave up its early gains, down for
the 5th day in a row...
….
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ADONDE VA la barca
neoliberal? Unos a las mandíbulas
de tiburones? Los otros al abismo?
"The shrinking club of those in ownership of assets truly will
need a bigger boat(s)" to haul around all their increased wealth... and the rest will
more likely need an ark to figure out how to shelter themselves from that debt
deluge on a shrinking population of potential consumers, workers, and tax
payers..."
In the movie Jaws, upon seeing the massive size of the shark and
inadequacy of the boat they have chosen to hunt the monster, one of the
great understated lines of cinema is uttered, "we're
gonna need a bigger boat".
I think any of these is appropriate to keep in mind if you take a
gander at the charts below.
Only two charts and four variables (plus a bonus chart):
- Annual change in the 0-55yr/old global population, excluding Africa (millions persons annually)
- Why excluding Africa? Explained HERE.
- The chart below shows the UN medium estimate variant through 2035...which is likely far too optimistic about future birth rates...reality is likely somewhat less population growth than shown.
- Wilshire 5000 ($'s)
- The Wilshire represents all publicly traded US stocks and has grown in excess of 7% compounded annually since 1971.
- The estimate through 2035 maintains that same rate of compounded growth.
- If pensions are to have any hope of making good on their promised payouts, they will need this 7% (and better) to make up for their colossal underfunding and underperforming bond portfolios.
- Global Debt ($'s)
- While different nations or regions have led the rise in global debt during different periods, the rate has been roughly consistent to that of the Wilshire, rising about 7% compounded annually.
- Federal Funds Rate (%)
- The Federal Reserve set rate of overnight lending to the largest of banks that ultimately attempts to set the foundation for all longer duration interest rates across the yield curve.
- The Fed believes this rate follows inflation but in truth, it simply mimics the change in the global child bearing population and the changing aggregate demand they represent (detailed HERE). Thus Fed attempts to artificially create inflation are contrary to the natural state of deflation underway. The Fed and CB actions will only continue to accelerate the growing imbalance between economic activity and asset prices likely setting up a calamity that will challenge the current financial, economic, and social order.
A quick peak at all four together.
Decelerating annual
population growth and interest rates and accelerating debt and asset valuations.
See
chart here:
If you'd like to see how this looks but from
a US income versus asset valuation perspective...check the chart
below. The chart shows household net worth versus
disposable income, as a %. We have gone where no man has gone
before. If a decline were to start,
historically speaking, a 20% to 30% decline in household net worth should be
expected. I expect nothing of
the sort and fully believe free markets ceased to exist
long ago...and the PTB will only further the
disconnect between economic reality and asset prices.
See chart here:
The chart below has the same variables as the first chart but extends the current trends a mere seventeen
years into the future. The chart should overjoy
asset holders and bring tears to whomever it is that is on the hook
for all that debt (detailed HERE). It is the imminent moment when assets
and debt, which have been compounded annually for decades, plow into a global population of under 55 year
olds (excluding Africa) that will almost
surely be declining. Multiplying components of growth by zero (let
alone a negative number) will not be a positive
experience.
See chart:
The shrinking
club of those in ownership of assets truly "will need a
bigger boat(s)" to haul around all their increased wealth...and
the rest will more likely need an ark to figure out how
to shelter themselves from that debt deluge on a shrinking population
of potential consumers, workers, and tax payers.
….
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Cuando la debacle empiece… los millonarios van
a ser asaltados.. Get a knife!
...the legendary investor said he’s
not keeping most of his money in cash, largely
because low inflation has made carrying cash much less expensive.
Years
ago, Zell said, the Fed’s quantitative easing would’ve been called something
else: debasing the currency.
"We have flooded the world with money...every
other time we didn’t call it quantitative easing we called it debasing the
currency and it resulted in the dollar going down. We just did it, and it didn’t
happen. Will it happen? I don’t know."
In summary, now is a good time to hold cash. Wait for equity and real estate prices to plunge, and be
ready to try and catch that falling knife.
….
Source https://www.zerohedge.com/news/2018-01-16/sam-zell-sees-irrational-exuberance-us-stocks
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Stock
Buybacks Are Nothing But Margin Speculation They won’t save US Econ nor its
speculators
Not only individual speculators are all-in the stock market; companies are, too...
Apple, which previously did not
have any long-term debt, has issued more than
$100 billion to buy-back shares as it waits to repatriate $269 billion in cash
sitting abroad. Microsoft borrowed $17 billion in a single bond issue in
January 2017. IBM boosted its long-term debt from $42 billion to $45
billion in 2017 but added $3 billion to its share repurchase program.
The
whole process is convenient for companies because equity is more expensive to finance than
debt in a zero interest environment, and it artificially boosts earnings per
share by keeping earnings the same but reducing the number of shares.
At the end of the day, however, this is nothing but
margin speculation.
Company Margin Speculation
Similar to the individual stock speculator in the
example above, a company has a certain amount of equity it can leverage. Of
course, with big companies, there is not one number like the 30 percent margin
requirement for the individual. However, the dynamics are similar.
As long as the total value of
the equity of a company keeps going up in a rising market, the company can keep
issuing bonds against ever-rising equity values.
Nevertheless, the total debt-to-equity ratio for large
companies has increased from 50 percent in 2007 to a record high of 83 percent
in spite of the rising market.
In
a low-interest rate environment and a functioning economy, the companies can easily pay the interest on the bonds they issue
out of the cash flow, as the total interest payments are low. Refinancing
is also not a problem.
However, what happens
if the market starts falling because interest rates rise or there is a
recession, or both? No, companies won’t receive a margin call—there is
no such provision in most company debt.
This will squeeze cash
flows, especially in a tight economic environment, and it won’t be long until
companies start selling shares again—at much lower prices this time—just to survive. The biggest companies in the United
States run the risk of ending up like speculators
caught in a margin call.
….
[[In
short: neoliberal-game comes with a suicide pill Inc.. speculat don’t need to jump a precipice]]
…
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Nothing will compensate the
inflation?
"Taking the
announced scope and magnitude of these bonuses - often $1,000 per worker - at face value suggests an approximately $1bn one-time boost to compensation."
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POLITICS
Seudo democ y sist duopolico in US is obsolete; it’s full of frauds & corruption. Urge
cambiarlo
"Nobody wants to think about this because it
doesn’t fit in with America’s stale partisan models: Democrats would have to admit that their best shot at getting
a rival president impeached is pure gibberish, and Trump supporters would have
to acknowledge that their swamp-draining populist hero is actually just one
more corrupt globalist neocon like his predecessors."
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Que viva la Democ!.. American style: dicen los neo-nazis from Germany
Nielsen confirmed Tuesday that her
department has asked federal
prosecutors to see if they can lodge criminal charges against sanctuary cities
that refuse to cooperate with federal deportation efforts
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A los pilgrims los votaron de Europa por
motivos religiosos y los de aquí pronto se
van a patear el culo por lo mismo. En democracia, la religión no une a nadie, LOS
DIVIDE. Why? .. same insane genes.
"Trump is saying so with words, as he has with
policies, that in taking in a million people a year; race, religion and national origin matter, if we
are to preserve our national unity and national character..."
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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
“The virtual solvency of the US government would be likely to become the
detonator of the next financial crisis... The market’s reversing
recognition of the value of U.S. Treasury bonds and U.S. dollar will be
a powerful force in destroying the fragile debt chain of the federal
government." - Dagong.
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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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Threat
of Nuclear War and Reckless Acts of US Gov: Amnesty International Is Barking Up the Wrong
Tree By Dr. Paul Craig
Roberts,
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INFORMATION
CLEARING HOUSE
Deep on the US political
crisis, their internal conflicts n chances of WW3
Open Letter To ICH Readers
By John Pilger, Paul Craig Roberts, Pepe Escobar, Peter Koenig & Finian Cunningham
By John Pilger, Paul Craig Roberts, Pepe Escobar, Peter Koenig & Finian Cunningham
In this time, when alternative
voices and viewpoints are being shut down – it is all the more vital for
readers to help sustain ICH.
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Syria - U.S. Traps Itself , Commits To Occupation,
Helps To Sustain The Astana Agreement
By Moon Of Alabama Trump administration policy in Syria is finally coming into daylight.
By Moon Of Alabama Trump administration policy in Syria is finally coming into daylight.
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Erdogan’s accused the US of creating an “army of terror” in Syria
along the border with Turkey. He vowed to crush the force
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The World According to Trump Or How to Build
a Wall and Lose an Empire By Alfred W. McCoy
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It’s Nato that’s empire-building, not Putin By Peter Hitchins
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You Don’t Need a Telescope to Find a
‘Shithole Country’ By Chris
Hedges
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SPUTNIK
and RT SHOWS
Geopolitics & the nasty
business of US-NATO-Global-wars uncovered ..
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The
End of a Dream? Bitcoin Plunges 20 Percent
or start of a new cycle?
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RT SHOWS
Keiser Report
Episode
1176 Max and Stacy look at all the
scandal behind the financial news headlines
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NOTICIAS
IN SPANISH
Latino America looking for
alternatives to neoliberalism to break with Empire:
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FEM Amarlas,
no solo abrazarlas: "Los hombres a abrazar los
feminismos"
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Atacar
N-K sigue siendo plan central del US.. Salir de la región es lo mas sensato y
posib
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Otra nación latinoamericana le pone
freno al bitcóin la tecnologia de punta no la detiene 1 nacion
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Keiser Report Distopías
financieras
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PRESS
TV
Global situation described by
Iranian observers..
Trump
is healthy thanks to ‘good genes’ So: no more wars & nuke blackmails?
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Pope
Francis' visit draws protests in Chile He support
Pinoch & US dictat in Arg
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Rouhani
warns of new US plot against Syria Is Trump really
healthy?
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'US
seeks to create complex situation for Iran' Urge no
bias psychiat test to T
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Trump absent for US embassy opening in London
Obvious reason: the tests
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