Thu JUL 12 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 Economic debacle today:
Investors
chose to 'barbell' their portfolios today (if you want to believe that
such a thing as 'investors' exist) - seeking protection from trade wars by
buying bonds and buying the biggest cap, highest valuation, tech behemoths -
makes perfect sense really...
Once again
- as futures show - the US equity market open sparked a ridiculous
panic-buying spree in Nasdaq (mega-tech) stocks...
See Chart:
VIX was
monkeyhammered lower as S&P 2800 was once again the target for the machines
but failed (NOTE - the pre-market signaling that we have seen before in those
VIX tails)
See Chart:
And The
Dow extended its bounce off the 50/100DMA...(NOTE, it may be a small thing but
this was a lower high in the dow)
See Chart:
FANG
Stocks surged to a new record high...
See chart:
Does anyone else
get the feeling these markets are being 'helped' to ensure the policies of the
countries' officials appear to be working (or not hurting)?
And so
while investors sought the safe-haven of mega-cap tech stocks, they also bid
the long-end of the bond curve...
See Chart:
30Y Yields rebounded to pre-Tariff
levels then fell back...
See Chart:
Notably, following CPI's print this
morning, real 30Y yield are once again almost negative.
See Chart:
Oh, and while the longer-dated yield
curve continued to collapse...
See Chart:
Transitory... the transition is very clear:
See Chart:
The dollar chopped around intraday
but ended practically unchanged...
See Chart:
PMs managed small gains on the day,
as did copper, but crude kept tumbling...
See Chart:
In fact WTI traded back below $70
for a while today
See Chart:
….
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“This is a
very scary scenario. There’s going to be real financial distress.”
"Even if there is not a recession or credit correction,
with the sheer volume of issuance there are going to be defaults that take
place," said Neil Augustine, co-head of the restructuring practice at
Greenhill & Co. He is right: as we showed recently
using the following chart from Credit Suisse, after languishing around 1%-2%
for years, default rates have jumped the most in 5 years, and are now "ticking
higher."
See Charts:
“This is a
very scary scenario,” .. “There’s going
to be real financial distress.”
To those unfamiliar
with the dynamic, here is what happened: since 2009, the amount of debt
accumulated by global, non-financial junk-rated companies has soared by 58%
representing $3.7 trillion in outstanding debt, the highest ever, with 40%, or
$2 trillion, rated B1 or lower. Putting this in contest, since 2009, US
corporate debt has increased by 49%, hitting a record total of $8.8 trillion,
much of that debt used to fund stock repurchases. As
a percentage of GDP, corporate debt is at a level which on ever prior occasion,
a financial crisis has followed.
See Chart:
The coming
debt deluge is also the reason why Guggenheim was eager to purchase Millstein's
restructuring advisory firm: when the next recession hits, traditional banking
revenue streams will collapse leaving restructuring advisories as the only
winner.
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How the
market structure weakened progressively in recent years reaching the point
where it now looks as bad as after a flash crash.
Positive vs. fake markets
Analysis
of Market Structure: Towards A Low-Diversity Trap
Ever since early-2017, our theory has been that multiple
years of monumental Quantitative Easing
/ Negative Interest Rate monetary policies affected the behavioral
patterns of investors and changed the structure itself of the market,
in what accounts as self-amplifying
positive feedback loops.
See Graph:
Fake markets, where artificial money
flows killed data dependency, affected market functioning and changed the
structure itself of the market (May 2017).
See Graph:
ANALYSIS
OF THE MARKET STRUCTURE: WEAKEST LINKS
As we try to substantiate the view with hard data, we now
further analyze the market structure across the two dimensions which may well
represent its fault lines:
- Concentration of size on few top players: we use as proxy the top 22 asset managers globally
- Size of ‘passive’ or ‘quasi passive’: we use as proxy the top 2000 ETFs, as represented by their largest 350 since 2007
We focus on largest ETFs and largest Asset Managers as we
believe them to be the cracks in the financial system, the fault lines that
lead to market fragility, hence our focus on them as a meaningful proxy for the
broader financial market.
We provide a visualisation
of the market structure as modelled by a graph where each node
represents an ETF, and the length of the edge represents the strength of
interaction (inversely proportional). Please note the density/crowding of the
nodes (market concentration) in September 2008, and how it looks after the
pressure is released, in the healthier conditions of 2010. The stiffness of the market
increases again after 2015, leading to a current situation of high density and
potential danger as the market is no longer able to absorb shocks.
See Figure below:
All in
all, we observe signals that a phase transition in the passive investment
industry might be approaching, as shown by our analysis of the Asset Management
and ETFs segments of the industry, which give similar results. When
coupled with their size, and the tight ties with financial markets at large, we
believe systemic risk are at or close to the cliff, ready to transition.
…
SOURCE: https://www.zerohedge.com/news/2018-07-12/towards-low-diversity-trap-visualizing-dna-market-crash
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According
to survey data by Bank of America Merrill Lynch, investors have never been so bearish of Asian bonds in history...
See Chart:
See more charts & graphs at:
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"There’s no question we’ll see a financial crisis sooner or later
because we must remember we’re
coming off from a period of cheap money..."
While the US and China will suffer a degree of economic
blowback from their aggressive trade-war tit-for-tat, emerging-market economies
will quickly see the worst of the collateral damage, as Mobius expects the MSCI
Emerging Markets Index will fall another 10% from current levels by year's end.
Such a drop would send the index into bear-market
territory, as it is already down 16% so far this year. Meanwhile, the MSCI EM
Currency Index is already down 6% on the year.
See Chart:
Since free trade has been an economic default for so long,
the fact that we're entering "uncharted waters" will likely stoke a
bout of risk aversion that will make life difficult for investors in emerging
and developed markets. Back in April, Mobius warned that the US market is on
the verge of a 30% collapse that will wipe out the equity market's
gains from the past two years.
"We're
in uncharted waters. The previous American administrations pretty much endorsed
freedom of trade, the WTO and these multilateral agreements. Trump is going in
the opposite direction...he's really upsetting the apple cart...therefore the
uncertainty will grow not just in the US but in emerging markets as well.
But once the dust has settled, shrewd investors will find
unprecedented opportunities, particularly in emerging
markets - the focus of Mobius's recently launched EM bond fund.
See Chart:
Over the next year or two, Mobius said he'll be scanning for
opportunities to become a buyer as EM assets slide: "We'll need to focus
on individual countries and individual companies to see where the winners and
losers will be. But it will be
an interesting time in the next year or two years."
Watch the
full interview below:
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US
DOMESTIC POLITICS
Seudo democ y sist
duopolico in US is obsolete; it’s
full of frauds & corruption. Urge cambiarlo
A month ago, judge Leon declared that seeking a stay would be a
"manifest injustice."
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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
"The surveillance photographs evenshowed the names of the ships"
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"Trump's
interview will pour nitroglycerine on the already raging Tory Brexiteer revolt
against the PM."
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SPUTNIK and RT SHOWS
US inside GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
Trump on Thursday repeated his suggestion that NATO
members should increase the defense budget to 4 percent of GDP.
"I think in years in advance we
should be at 4 percent, I think 4 percent is the right number," the
US president told reporters at a news conference during the NATO
summit in Brussels.
Trump added that some NATO leaders had agreed
to increase spending to 2 percent of GDP, while others would
have to consult their countries' legislatures in order to boost
spending.
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RT SHOWS
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NOTICIAS IN SPANISH
Lat Am NEW FOCUS: alternat to neo-fascist regimes, breaks to
HR, Peace & support to US-terrorism
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Srtas: Dejen que las TS decidan
su vida. Apoyemos su derecho a
Chequeo médico y otras condic de
trabajo. No dejemos que damitas
de derecha apedreen su local
junto a curas del Opus Dei como lo
hicieron en Perú. Entonces los
Estud Univ se solidarizaron con las TS
y devolvieron el apedreo. La
mayoría de TS son madres y como otra
mujeres, condenadas a trabajos
no decentes. Este NO es un asunto
moral, esta es una condición social a la que hay
responder mas allá d
moralismos medievales e hipócritas. Los curas que
organizan a las
cucufatas de buen vivir contra las TS son los mismos
que ayer con
la Santa Inquisición quemaron sin piedad a mujeres que
denunciaron
la podredumbre moral de los curas. En 1970 en Arequip-Peru
se hallo
un sin número de fetos en los túneles que comunicaban
el convento
Sta Catalina con una Iglesia cristiana a dos cuadras
de distancia. La
promiscuidad moral de estas gentes que supuestamente
defiende los
“vientres en alquiler” quedo al descubierto. Y los
estudiantes que
fueron en la
cárcel por la paliza que le dieron al cura, salieron en
Libertad gracias al sindicato de las TS. En suma, este no es un
probl d
Izquierd ni de derechas cavernarias. Este es un prob
sociolog que si
merece la atención que desde los tiempos M Gorki se le
dio al tema.
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism & internal
conflicts that favor WW3
Trump Beats Up NATO Members By Finian Cunningham Continue
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Media’s Brazen Dishonesty About North Korean
Nuclear Violations By Gareth
Porter
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
British
Collusion and Criminality. Triggering Anti-Russian Sentiment. Creating a
Pretext for War? By Margaret Kimberley,
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DEMOCRACY NOW
Focus on Trump policies & the Econ & Pol crisis he
creates
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PRESS TV
Resume of Global News described by Iranian observers..
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