Tues
SEP 11 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
BE –LIE- VE
“In terms of
people leaving the labor force, it
sure looks like earlier data was was manipulated to hell and back and
the BLS just couldn’t hide it any longer. The deltas are f***ing crazy.”
“Today’s job numbers might be the biggest disaster I’ve ever seen
reported. This Fall could get real ugly real fast. The deterioration of the
participation rate is so big it makes me suspicious of earlier numbers.” – John Titus, producer
of Best Evidence videos.
Titus goes on to say, “”The Household Survey” is showing a net loss of 1.47 million jobs year-over-year and
a Labor Force reduction north of 2 million [YoY].
CNBC headline:
‘Economy adds more jobs than expected.'
The
employment report is unquestionably the most manipulated economic report issued
by the Government. The content of the the headline on which the mainstream media bases
its broadcast and analysis of the report is entirely disconnected from
the actual data contained in the report. The damning data that no one in the
financial media or Wall Street seems to be able to find is at the top of
the BLS’ report:
See Chart:
As you can see, the “civilian labor force”declined by
469,000 people in August from July. The number of “employed” dropped 423,000.
The “not in labor force” increased by nearly 700,000.
Based on the numbers in the details of the BLS
report, it looks like, between the decline in the number of people employed and
the decline in those not counted as part of the labor force, the economy shed over 1 million
jobs.
Titus remarked to me that, in terms of
manipulating the data to make the headline report look positive, this is the
worst report he’s ever scrutinized:
“In terms of people leaving the labor force, it sure looks like earlier
data was was manipulated to hell and back and the BLS just couldn’t hide it any
longer. The deltas are f***ing crazy.”
By the way, has anyone besides me noticed that
the BLS calls this report the, “Employment Situation
Report?” What does that even mean?
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Again: chances of manipulation of finances in
neoliberal economy:
“To assume that all investors behave
the same way in times of market stress is not grounded in reality. We have
repeatedly seen ETF volumes grow dramatically during times of stress as
investors utilize them as a tool for price discovery.”
[[ DEFINITION or 'Exchange-Traded Fund (ETF)' An ETF,
is a marketable security that tracks an index, a commodity, bonds, or a basket
of assets like an index fund.
... ETFs experience
price changes throughout the day as they are bought and sold. See Exchange-Traded
Fund (ETF) Definition | Investopedia
https://www.investopedia.com/terms/e/etf.asp ]]
The threat of concentrated ETF holdings
in single name stocks is hardly new. Back in April 2017, One River CIO Eric Peters warned about the
dangers lying in wait for capital markets in a world dominated by passive
investing.
Each day since the
election $1bln has moved from active to passive management. When you buy the
S&P 500, you pay the prevailing price for every one of those stocks. There
is no such thing as price discovery in index investing. And there will be no
price discovery on the downside either. The stocks that have been blindly bought on the way up will be blindly
sold. When these markets do finally have a correction there will be no bid for
many of these stocks.
I don’t know when the
next major crisis will hit, no one does. But I do know that even in the next normal
correction, the market’s losses will be amplified enormously by this move away
from active management. $500bln has
shifted to index investments, distorting the way equities are valued and the
historical relationship between short sellers and buyers. This flow creates
artificial demand for poor-quality securities that have few natural buyers. And
now even Warren Buffett is telling investors to shift to passive.
Shortly thereafter, Horseman Global's Russell
Clark pitched a new bear
thesis: go short all the names that have an
disproportionately heavy ETF ownership. Citing the
transition from active to passive as a catalyst that makes markets even more
inefficient, Clark repeated a lament made by many short sellers, stating that
there "are complaints from some quarters about it
being harder to short sell as flows of money push up stocks."
But it was the downside that he was focused on:
The long
bull market in passive investment has made them wilfully blind to the liquidity
risk that they are running. Passive
investments are concentrated in the US market...
Since then many more pundits joined the chorus of warnings against
ETFs, and the danger their "blind flows" pose to stocks, if not on
the upside then certainly on the way down. And yet, so far it has been largely
so good, with only an occasional hiccup in what has otherwise been an
increasingly ETF dominated marketplace.
One week ago, SocGen analyst Sebastien Lemaire
stress-tested the fragility of 16,000 stocks, and concluded that small caps, dividend shares and gold miners are all
especially vulnerable in market drop as a result of outsized ownership among passive/ETF investors. In
turn, those positions could prove more difficult, and certainly costly, to exit.
Furthermore, given the BOJ's massive purchases -
which now owns nearly 80% of all Japanese ETF holdings, the Nikkei 225 Index is
also especially fragile to a reversal of the constant passive buying.
See Graft:
"Crowdedness exists but is limited
to a few stocks and strategies," Lemaire warned, and while his warning wasn't
nearly as dire as that of Warren Buffett or Howard
Marks, both of whom have similarly cautioned about the liquidity shortage that
ETFs have inspired, SocGen did caution that small caps would be whipsawed
by this dynamic - since the same stocks in the sector make an appearance in
multiple indexes tracked by ETFs, according to the report.
And, as Bloomberg noted, the conclusion
provides more ammo for regulators and ETF detractors on
Wall Street, who charge the post-crisis flood of passive money has led to an
investing-herd mentality and even more crowding risk (something hedge
funds felt acutely in July when Facebook tumbled).
That's probably also why the world's largest
issuer of ETFs - BlackRock - felt compelled to respond, dismissing the
warnings.
“This research is
underpinned by two assumptions that don’t reflect the historic behavior of
investors or ETFs,” the firm said in an emailed statement.
“To assume that all investors behave the same way in times of market
stress is not grounded in reality. Additionally,
we have repeatedly seen ETF volumes grow dramatically during times of stress as
investors utilize them as a tool for price discovery.”
Actually, it is somewhat safe to say that as
traditional, carbon-based traders have been replaced by
algos and computers, most investors behave in precisely the same way. It
also explains why for the past decade virtually every single dip has been
collectively bought, as there is no longer any adverse response to behaving
just as the herd has behaved on so many prior occasions.
Meanwhile, SocGen's theory is that a tumbling
market, secondary liquidity in the ETF would likely evaporate, forcing traders
to shift to the primary venue, with the liquidity of assets underlying the
passive instrument subject to increased selling pressure. This is precisely what happened in
August 2015 when ETFs traded with massive disconnects to the underlying during
a market wide cross-asset decoupling, allowing many quick traders to arb the
divergence and make substantial profits.
According to the French bank, a whopping 90% of global equities are not subject to heightened
risk of a liquidity squeeze because they’re owned 10% or less by ETFs.
See Chart:
Meanwhile, recent market volatility suggests that
the "tipping point" for ETF risk has not yet been hit, after passive
funds passed what Bloomberg calls the year's stress test:
BlackRock points to
action in its iShares MSCI Turkey ETF, ticker TUR, last month when the
country’s assets were roiled by increasing tensions with the U.S. The ETF’s
underlying index plummeted 16 percent on Aug. 10, but trading in the
fund remained orderly, with no discernible impact on the underlying shares.
“TUR saw its
highest amount of daily trading volume ever, with 13.3 million shares
exchanging hands that day, compared to its previous average daily volume of
500K shares,” according to the statement.
Which is good news for retail investors
- the biggest users of ETFs - but the observation merely indicates that the
pain threshold of ETFs has not yet been hit, the way it was in August 2015.
At the same time, regulators continue to warn of
liquidity challenges spurred by the ETF revolution. The latest was the European
Systemic Risk Board. In a report this month, it warned that market
stress could "create first-mover advantages if, for instance, primary markets offer
stale prices, while the underlying markets are turning illiquid.”
The result?
The report concluded that
"Investors may expect there to be greater liquidity than that available
during times of stress." We are confident that BlackRock would
dispute that as well, and retail investors will
be happy to believe it, at least until all the ETF liquidity warnings come are validated once again.
…
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TWO RELATED ARTICLES
1-
A father’s advice: There’s no
information advantage when investing on short-term events. MFS looks for
opportunities to create positive Fixed Income outcomes for clients through
rigorous research.
2-
And the
next downturn will be even worse than the last...
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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
purpose of remembering 9/11 is not
merely a history lesson. Like remembering the Holocaust,the purpose is never again..."
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"Life on earth is faced with a
situation in which Washington is so determined to overthrow Assad and to leave
Syria in the same chaos as Libya and Iraq that Washington is willing to risk war with Russia."
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Bob
Woodward’s book and the ‘resistance’ op-ed look increasingly like a sophisticated psy-ops scheme and
a prelude for a ‘Deep State’
coup..
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Executive action to address big tech’s
censorship of conservative voices is being blocked by Trump administration
insiders who have convinced the President to place the issue aside, according
to a new report.
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North and South Carolina nuclear power
plants are in line for a possible direct hit from Hurricane Florence.
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President Trump will sign an executive
order as soon as Wednesday that will slap sanctions on any foreign companies or
people who interfere in U.S. elections, based on intelligence agency findings.
…
[[ GOOD: Place in the UN for immediate attention.. and
make it global this policy in all Sovereigns States .. with
special focus on US meddling on foreign Elections.. The UN can add
another special remark: US embassies abroad in which the CIA is doing so, must
be closed ]]
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“The FBI is refusing to tell us what’s going
on.We’ve got people up there (at Sunspot) that requested us to standby
while they evacuate it.Nobody would
really elaborate on any of the circumstances as to why..."
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"Censorship reflects a society’s lack of
confidence in itself. It is a hallmark of an authoritarianregime... There is no 'hate speech' exception to the First
Amendment of the U.S Constitution."
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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
American
defense analysts are disputing the size of the Russian deployment.
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SPUTNIK and RT SHOWS
US
inside GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
[[ GOOD: Place in the UN for immediate
attention.. and make it global this policy in all Sovereigns States .. with special focus on US meddling on foreign Elections.. The
UN can add another special remark: US embassies abroad in which the CIA is
doing so, must be closed ]]
RELATED:
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Ken Starr: Hillary
Was Pathological Liar, ‘Enabler’ of Bill Clinton's Affairs Pedo-H is not a liar,
said CIA’a
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RU Special Envoy
for Syria: Terrorists' Surrender Could Resolve Idlib Issue Does the ‘T’
includes US’ t?
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US Warns Iran It
Will Respond to Any Attacks on Its Diplomatic Missions in Iraq Even if don’t, US
will
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US Shuttering PLO
Offices Part of Plan ‘to End Palestine Altogether’ False, we’re no
fascist but neo naz
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RT SHOWS
Politicking Obama re-enters
political fray; Bashes Trump and GOP OB-Trp: same poli-DNA..super-pack..
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Keiser Report The next potential
superpower (E1278) Max and Stacy look at the
question of “whether or not China
has what it takes to be a superpower?” In 2nd half, Max
interviews Dr. Michael Hudson.
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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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Y yo comiendo las bananas d corazón podrido
por Monsanto
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-refor
tribut Más gananc para capital y menos ingres para
trabaj
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Keiser Report China, una amenaza existencial para EE.UU.
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism &
internal conflicts that favor WW3
Explosive Skripal
allegations may blow up in Syria - George Galloway By George Galloway
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to
more business-wars from US-NATO allies
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PRESS TV
Resume of Global News described by Iranian
observers..
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