Thu JUL 05 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
Recession looms
Policy error?
Stocks and the yield curve are lower - potentially signaling 'policy error' -
after the minutes confirmed a Fed set on hiking rates
no matter what...
Bonds, the dollar, and gold are
relatively unchanged as stocks sink.
See Chart:
And the yield curve is pushing new
lows
See Chart:
But as is always the case, stocks
are bouncing back (Russell 2000 now positive post-Fed)
See chart:
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Small Caps went vertical in the last
few minutes...
See Chart:
And all major US equity indices are
up on the week...
See Chart:
The Dow miraculously managed to
close 1 point above its 200DMA... ending a a 7 day streak below it..
See Chart:
Another tough day for Tesla as Elon
Musk's warnings to the 'bears' are losing right now...
See Chart:
The Mega-Tech stocks rebounded on
the day...
See Chart:
Treasury yields were very mixed
today with everything but 30Y higher in yield on the day (and dramatically
flattening)..
2s30s tumbles below 40bps for the first time since July 2007...today was the biggest
absolute flattening in the curve in two months...
See Chart:
2018 HAS BEEN A ONE-WAY STREET OF
COLLAPSE IN THE YIELD CURVE...
See Chart:
The Dollar Index fell for 3rd day in
a row (5th of last 6) to 3-week lows - and closed at the spike high of the June
Fed day...
See Chart:
PMs were flat as the dollar slipped
lower but Copper and Crude tumbled..
See Chart:
Some relatively high volatility in
the energy complex today but WTI/RBOB ended the day below the close from
Tuesday...
See Chart:
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"While everyone is debating the effects of possible trade
sanctions on the global economy, few
are paying attention to a far more serious issue. Enormous global debt,
combined with low-interest rates, have set the stage for a global recession that
has the potential for economic chaos."
READ this:
One would expect
central banks to be aware of this and show more concern. One would expect
central banks to be aware of this and show more concern. However, the overall silence has been astonishing.
An
exception to this is the Bank for International Settlements (BIS), which has been making loud noises about the
toxic level of global debt and the anticipated bubble.
It recently reported that the global debt of 2008 was $60 trillion, small when
compared to the current debt of $170 trillion. To make matters worse, today’s global debt is 40 percent higher in relation to GDP
than it was in 2008, just prior to the Lehman Bros. downfall.
According toMcKinsey
& Company, a global consulting firm, two-thirds of U.S.
corporate debt are from corporations that pose a high default risk.
In short:
At the moment, the global economy is filled with a number of sharp
pins, and no one knows which pin will be the first to prick the debt bubble.
But a burst is almost certain.
Continue reading at this source..
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“It might be that companies are
anticipating trade becoming more difficult with China or with the U.S.
and are adjusting their supply chains,”
While the US prepares to unleash its latest salvo in the
trade war against China at midnight tonight, business surveys suggest that global trade is already collapsing.. JPMorgan's
Global Purchasing Managers' Index (PMI) data suggest that trade growth has already slowed
dramatically this year, as tensions over tariffs
have escalated.
See Chart:
One thing seems certain, it is not about to improve anytime
soon as 'actual' tariffs are enacted...and retaliated to.
“If the trade dispute becomes more
complicated, if both sides are not willing to change their stance, you could
end up with a much more serious disruption,” said William Yuen,
investment director at Invesco.
All of which seems to be increasingly
priced into the bond market..
See Chart:
..
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Look who is talking:
"Cryptocurrencies
do not fulfil any of the three purposes of money... My message to young people: stop trying to create
money..."
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"The U.S. is not an
island. The U.S. is not going to have 4% GDP growth while the rest of the world implodes... I look
at the data, and data says this is the
most dangerous market ever..."
“Why do I care if the yield curve
inverts?"
"Because 9 out of the last 10 times the yield curve
inverted, we had a recession... The spread with the yield curve is the
narrowest it has been since outside of the start of the Great Recession that
commenced in December of 2007... The last two times the yield curve inverted, we had a stock market drop
of 50%. The market dropped, and the S&P 500 lost 50% of its value.”
See Chart:
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Against the current.. a wishful thinking: there won’t be recession
Let me offer up a one-word summary
of
how I see the second half of 2018
for equities: “RECESSION”.
READ THIS
Here’s our
thinking:
#1)
Corporate managers live at the margin when it comes to planning incremental
hiring and capital expenditures.
Tax reform is baked into their numbers for 2018 and 2019, making the
uncertainty around trade and tariffs their primary planning headache.
Conclusion: the current administration may win some trade
battles, but it will be up to the private sector to determine the economic outcome
of a trade war. Markets will have their hands full assessing that trade-off of
political headlines and micro fundamentals in the second half of 2018.
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#2) “As
good as it gets” syndrome.
Expect someone to come up with a FOMO-like acronym for this one – the notion
that US economic and corporate earnings growth both hit their peaks in the
first half of 2018. Q2 earnings, for example, will likely show “only” 20%
earnings growth versus 25% in Q1. Back half GDP will not likely be as strong as
the +3.0% number most expect for Q2. And when growth
slows, multiples contract. Stock prices decline, corporate managers start to
fire, and the cycle we mentioned in #1 kicks into high gear.
Conclusion: for such a squishy concept, we
do worry about this one. The offsetting positive for US
stocks is that European growth is even slower, and Emerging Markets will
struggle with the trade war issue. So investors with fixed equity
exposure will still have to own something, and this calculus points to US
stocks. This limits the damage to domestic equity prices, and the US could be spared a
recession as a result.
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#3)
Federal Reserve policy. The decline in
the difference between 2 and 10 Year Treasuries since the start of the year is
remarkable. The spread today – just 31 basis points – is the tightest since
July 2007. History is clear about what happens when
that number goes to zero: a recession is on the way. In cases where
there is a geopolitical shock, the combination
of that event and a flat yield curve makes the contraction
in economic output even worse.
Conclusion: expect to hear the chorus
warning of a “Fed Mistake” in the second half of 2018 to grow as loud as the
finale of an Italian opera. What they may be missing: how would the US stock
market respond if Chair Powell did admit to concerns about the economy and
slowed the pace of rate hikes? Our prior points describe one potential negative
feedback loop that makes this a potentially risky option. Which means this debate will rage through 2H 2018.
Summing up: we don’t see a recession in 2018 or 2019, but we believe the dominant market narrative will revolve around this topic in the back half of 2018
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US
DOMESTIC POLITICS
Seudo democ y sist
duopolico in US is obsolete; it’s
full of frauds & corruption. Urge cambiarlo
The trade
war between the US and China begins tonight at midnight.
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"Everyone is almost
certain it is not going to happen..."
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US-WW ISSUES (Geo Econ, Geo Pol
& global Wars)
Global depression is on…China, RU, Iran search for State
socialis+K- compet. D rest in limbo
SPUTNIK and RT SHOWS
US inside GEO-POL n GEO-ECO ..News
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RELATED:
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RT SHOWS
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USA Remembering
Ed Schultz - RT America He passed away today 5
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NOTICIAS IN SPANISH
Latino America looking for alternatives to neoliberalism to
break with Empire:
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--Presidente Duque, con
usted, ¿volverá la guerra? Cecilia Orozco
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INFORMATION CLEARING HOUSE
Deep on the US political crisis, their internal conflicts n
chances of WW3
Battle in the South of Syria is Coming to an
End: Israel Bowed To Russia’s Will. By Elijah J Magnier
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America Bombs, Europe Gets the Refugees.
That’s Evil By Eric Zuesse Continue
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The Skripal Incident Big Lie Won’t Die By Stephen Lendman Continue
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The Institutions Americans Trust Most And
Least By Tyler Durden Continue
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Donald Trump and the U.S. Piggy Bank By Duncan Cameron Continue
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars: its profiteers US-NATO
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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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PRESS TV
Resume of Global News described by Iranian observers..
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