Thu JUL 19 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
La debacle económica
sigue su curso
The White House after Trump's
comments...
Dow breaks 5-day win streak.
Biggest drop in FANGs since July
3rd...All FANG stocks red today...
See Chart:
Bank stocks faded today...
See Chart:
Bonds and stocks remain notably
decoupled..
See Chart:
Treasury yields tumbled back to
almost unchanged on the week today...
See Chart:
10Y yields fell just over 2bps on
the day - still the biggest drop since July 3rd.
See Chart:
This is the 21st session in a row that 10Y yields are closing in the
2.80s.
The yield curve flattened once
again..
See Chart:
The big headlines were made by
President Trump's comments on higher rates and The Fed, which slammed the
dollar lower - only to be rescued by The White House..
See Chart:
If President Trump really wants a
weaker dollar, start doing more terrible stuff and lower your approval
rating...
See Chart:
Finally, we note that the price of
crash protection for the stock market is soaring...
See Chart:
Comment:
Im expecting to have a bowell movement by Saturday. What
your point? Volatility has been missing for so long. There never is any at
all. The market has always been very predictable. But volatility, now
that right there is fucking scary. At what point does the every day up and down
of market prices change from normal to “volatility”? I am going to wait
for it and then buy in exactly when the volatility stops. Makensure you post
and let us know when you dont see it any more. I will double up my position in
super duper volatility resistent special stocks. Sorry to be a smartass,
but why state the fucking obvious?
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Both equity
and credit institutional investors appear to be buying protection against a major market downturn...
See Chart:
See more charts at:
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Nice art : here only a
selected extracts
"The facade will end when
balance sheet cuts expand to a point at which buybacks cannot keep up and the slack in markets grows too
fast. Or when stock buyback cash
runs out (probably by the end of this year). "
In reality,
headlines never actually dictated stock prices; it was always the Federal
Reserve among other central banks.
As I and others have noted consistently, stock market valuations for the past several years have
tracked almost perfectly with the Fed’s balance sheet. That is to say, every
time the Fed purchased more assets and increased the balance sheet, stocks went
up.
See Chart:
After
years of the notorious “Fed Put,” we now have an entire generation of investors
and market writers that have never experienced a stock environment in which
equities actually fall according to the health of their corresponding companies
or the economy at large. The past year has been a bit of a shock for them, and
it’s only going to get worse.
The Fed’s large scale interventions in stocks are now
essentially over, which is exactly why stocks are no longer hitting new
historic highs every month as they used to. The massive bull market rally of the post credit crash world of 2008 has
stalled, and here are the reasons why.
Central Banks Tapering
QE
Now that QE is ending around the world and rates are rising along with
yields, bonds are becoming a competing asset, luring investors away from stocks
once more.
Central Banks
Raising Interest Rates
The
Federal Reserve has been raising rates consistently since the end of 2016,
exactly as I predicted they would before the U.S. election. Interest
rates are a direct influencing factor in stocks — low interest rates and cheap
overnight loans to corporations by the Fed allowed these companies to
continually buy back their own stocks, thereby decreasing the number of stock
offerings available on the market and artificially boosting the value of the
stocks that were left circulating.
Corporation
have taken on a historic level of debt not seen since 2007 in order to keep
their stocks prices high. Now that interest rates are rising, the party is
almost over.
Federal Reserve
Cutting Balance Sheet (And Hiding The Effects)
The Fed has been the single most important trigger for stock
markets. Period. As noted above, it was the Fed that created the historic bull
market rally after the derivatives collapse. Jerome Powell, the current chairman
of the Fed, stated back in 2012 that this was the case, and also made
statements on what would happen if the Fed ever raised interest rates and cut
asset purchases, ending the central bank’s “short volatility position.”
What did Powell predict in 2012? Essentially, a stock market
crash. And, yet, as the new Fed chair he is implementing the exact
measures he
warned about back in 2012.
With every new
balance sheet cut and rate hike, the Dow Jones in particular tends to lose
1,000 points or more. The damages have been mitigated by continued stock
buybacks from corporations as well as smaller asset purchases by the Fed after
the fact, but as already mentioned, the buyback stop gap will be ending
shortly.
If we look at a 2018
year-to-date chart of the performance of the Dow Jones side by side
with the St. Louis FRED
chart of balance sheet cuts before the Fed discontinued it, we can see
for example that on January 24th the Fed made a dramatic cut in their balance
sheet, and two days later on the 26th the Dow began to drop
precipitously. On February 7th the Fed increased asset purchases
slightly, and only two days later stocks began to recover. .. On February
21st the Fed cut dramatically once again, and once again stocks plunged.
On March 2nd the Fed added a smaller level of assets and stocks
recovered. I would also note that when the Fed
does not cut, but simply keeps assets mostly static as in May, stock
rise. Like clockwork, only when
the Fed dumps its balance sheet do stock markets fall.
See Chart:
Trade War
Distraction
The trade
war continues as the most effective possible distraction from central bank
activities. In every
instance of a stock market decline, which takes place after every instance of a
Federal Reserve cut in the balance sheet or an interest rate hike, Donald Trump
also seems to make yet another trade war announcement.
I’ve said it before
and I’ll say it again — what we are witnessing is a
controlled demolition of the U.S. economy, and stock markets are merely an
extension of this process.
The facade
will end when balance sheet cuts expand to a point at which buybacks cannot
keep up and the slack in markets grows too fast. Or when stock buyback
cash runs out (probably by the end of this year). The trade war can and
will cause various problems within the global economy, but the greater cause of
fiscal distress will always be central banks. They are to blame for any future
crisis.
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READ THE FULL ARTICLE AT:
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US
DOMESTIC POLITICS
Seudo democ y sist
duopolico in US is obsolete; it’s
full of frauds & corruption. Urge cambiarlo
"I
look forward to our second meeting so that we can start implementing some of
the many things discussed"
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...another
reason why there will be no 'blue
wave' in November.
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Unfortunately
it takes a professor emeritus at Princeton to point out what ought to be obvious in any History 101 survey
course...
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"The post-war order is
crumbling before our very eyes... Political and geopolitical risk is
rising rapidly. The warning lights are
flashing..."
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Happy Days are not here again...
Here’s my theory for the big countries:
See Table:
Fonzie–Ponzi
versus Minsky. The Fonzie–Ponzi theory is
more lenient than Hyman Minsky’s financial instability
hypothesis. Minsky proposed a “Ponzi finance” threshold for private
debt, but we can just as easily apply it to the public sector. He said that
borrowing qualifies as Ponzi finance whenever fresh issuance is needed to fund
interest on existing debt. According to the common assumption that America would
miss interest payments without regular increases in the statutory debt limit,
we long ago triggered Minsky’s threshold.
Now here’s the data:
See Chart:
The chart
shows the IMF’s projected 2018 public debt ratios for the ten largest advanced
economies, ordered from highest to lowest GDP. It
shows three economies in the transition range and one full Ponzi, and these
include the two largest economies and three of the largest six. Meanwhile,
private debt has grown nearly as fast as public debt on a global basis. The
Bank for International Settlements compiled data showing global borrowing by
households and corporations jumping from 126% of global GDP in 1999 to 151% in
2008 and 159% at the end of 2017. That growth in the
private debt burden—33% of GDP so far this millennium—has to eventually stall
or reverse. Soaring private debt makes it even more important to heed the Ponzi
point for public debt.
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READ this full art at:
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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
When US press talks on China we have to read what is in
between the lines
On the heels
of its 'stealthy' easing.. and not so stealthy The PBOC just lowered the ax
on the Yuan Fix - slashing their
reference rate by the most since June 2016. Offshore Yuan is tumbling to new cycle lows
after the fix...
Thesis here is that: "China’s
economic growth was largely driven by debt and ‘its
corporate debt looks like a Ponzi scheme’." .. a very controversial statement.
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SPUTNIK and RT SHOWS
US inside GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
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RT SHOWS
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Keiser
Report Episode
1255 Max n Stacy discuss how
former Treasury Secretary and ex-head of the NY Fed Timothy Geithner is
now ‘monetizing poor people’ in the dismal American economy he
helped engineer. Max interv Dan Collins ofTheChinaMoneyReport.com about
the US-China trade war.
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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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INFORMATION
CLEARING HOUSE
Deep on the US political crisis: neofascism & internal
conflicts that favor WW3
Aftermath Of Helsinki Summit: American
‘Democracy’ In Action By F
Cunningham Continue
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Coming Coup to Overthrow Pres Trump: Sedition
at Highest Levels By Paul
Craig Roberts
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The Russian US Election Meddling Big Lie
Won’t Die By Stephen Lendman Continue
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The Untouchable Mr. Browder? By Israel Shamir Continue
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Israel Declares Itself Apartheid State By Moon Of Alabama Continue
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PRESS TV
Resume of Global News described by Iranian observers..
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