Nov 4 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
"If this trend continues, the extra boost that US repatriation
provided to US equity and bond markets via share buybacks and corporate bond
redemptions is largely behind us"
[[ The sacking money from
rich countries of the world is not working anymore ]]
After an initial record surge in the amount of US corporate
cash repatriated from offshore jurisdictions following Trump's tax law overhaul
and tax repatriation holiday, the movement of foreign
cash has slowed sharply.
See chart:
The second piece of evidence comes directly from the amount
of announced US buybacks, which also shows a similarly decelerating
pattern. The next chart shows the monthly trajectory for announced buybacks for S&P500
index companies. Following an accelerating pattern
during the first seven months of the year and a peak in July, alongside the
market hitting new all time highs, the flow of announced buybacks has been very
small for three months in a row.
See Chart:
And, as JPMorgan concludes, if this trend of slowing
buybacks continues, "the extra boost that US repatriation provided to US equity and bond
markets via share buybacks and corporate bond redemptions is largely behind us."
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Market Stalls At Resistance (Selling The Rally)
This past Tuesday, I wrote “A
Sellable Rally” in which I laid out the 4-reasons for a rally
based on the psychological, fundamental, technical, and seasonal underpinnings.
That rally came to fruition over the last few days.
For us, it has been the technical backdrop which remains the
most compelling. To wit:
“Unlike the February lows, the
recent sell-off fell
4-standard deviations below the 50-dma which is a rare event historically
speaking. Such deviations do not last long as such an extreme move away from
the average price tend to be corrected in fairly short order.“
See Chart:
With
portfolios reduced to 50% equity, we have a bit of breathing room to watch the
elections next week. There is more than a
decent chance the currently Republican-controlled House of Representatives switches to Democratic control which would likely lead to
further market volatility. However, Kevin
Giddis from Raymond James laid out three
likely scenarios last week.
“What could a potential change do for bonds and stocks? There are many possible scenarios, so the
devil is in the details. I will lay out a couple of them for you:
1) The Republicans
could lose the House, or the House and Senate. Either of these possibilities could
derail the President’s agenda, leading us back to a period of gridlock that has
plagued this country in the past. This would likely be good for bond prices and
bad for equity prices.
2) The Republican majority
remains intact, and the President pushes forward his plans of
another tax cut, among other items as well. This would likely be good for stocks and bad for
bond prices.
3) A complete
rout that not only gives the majority of both the House and the Senate, it gives them the power and the votes to take on the
President. If this happens, bonds
could rally in price, the economy could lose its momentum, and the Fed would
likely alter its monetary policy.
In the end, however, this turns out, the
markets are likely poised for some big changes come next Wednesday.”
On a more bullish
note, once we get past the election next week, we do start to deal with
the “seasonal” bias that comes with the end of the year. As Stocktraders Almanac noted last week:
“This past midterm-year October that ended yesterday finished well
below expectations and historical averages. DJIA declined 5.1%, S&P 500
dropped 6.9% and NASDAQ was off 9.2%. October’s losses were the seventh worst
decline for DJIA since 1950, fourth worst for S&P 500 and fifth worst for
NASDAQ since 1971. Historically, November and December
market performance did hold up following a negative October.”
See Table:
Importantly, it
should be noted that while the markets do tend to improve in November and December,
following the 7% decline in October, an average gain of 3-3.5% does not get you back to even.
It is this
seasonally positive bias that keeps us from a more restrictive equity
allocation currently. However, it is our intention to use seasonal strength to reposition
portfolios for a much weaker market environment going into 2019 as the bull
market officially comes to its end.
Actions To Take Next Week
As I stated last
week:
“With the market exceeding 3-standard deviations below the 50-dma
currently, the extreme oversold condition still sets the market up for a fairly
strong bounce. That bounce SHOULD be sold into.”
Portfolio management processes have now been switched from “buying
dips” to “selling rallies” until the technical backdrop changes.
See more chart in the full article below:
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"...capital goods that are generated for these activities are in fact a waste of real wealth..."
The annual rate for US non-military capital goods orders excluding
aircraft fell to 1.9% in September from 7.8% in August
to stand at $69.6 billion.
Observe that after closing at $60.2 billion in December 2015
capital goods orders have been trending up.
See Chart:
These
individuals are now engaging in the exchange of nothing for something. (Individuals that are engage in
bubble activities do not produce any meaningful real wealth; they however by
means of the pumped money take a slice from the pool of real wealth.)
Now bubble activities like any non-bubble activity also
require tools and machinery (i.e., capital goods).
Therefore, capital
goods that are generated for these activities are in fact a waste of real
wealth. These
activities do not add to the pool of real wealth, they are in fact draining
it. (This amounts to economic
impoverishment).
If such policy
persists for too long this could slow or even shrink
the pool of real wealth and set in motion a severe economic crisis.
Meanwhile, because of a downtrend in the yearly growth rate
of US AMS ("Austrian Money Supply") since October 2011, US economic
activity is likely to follow this downtrend. Note that a downtrend in the AMS
growth undermines various bubble activities.
See Chart:
We can conclude that an increase in capital goods in a free
economic environment is likely to be supportive of a genuine economic
growth. This is however,
not going to be the case in an environment where the central bank manipulates
interest rates and engages in monetary pumping.
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SOURCE: https://www.zerohedge.com/news/2018-11-04/bubble-economy-capital-goods-arent-always-good-thing
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For Morgan.. the only solution is to continue doing same
farce: they’re full of money and they claim: not cash.. no growth. IF the FED
don’t stop them using FDR-N-Deals.. this system will collapse. The FED must pinch their belly with Tobin tax
or similar. We can’t afford their gluttony. IF President Trump can’t do it.. RESIGN! That will
means we need a new President.
"We now have fundamental
drivers: higher interest rates, slowing economic growth next year, margin risk,
and tighter financial conditions. Without incremental
money flows, this new primary downtrend will [won’t ] likely take time to reverse."
See Chart:
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HEDGE
FUND CIO: IF THE 'MOST IMPORTANT MARKET CORRELATION' DOES NOT FLIP, IT WOULD BE
"CATASTROPHIC"
How can the
losses be so universal, he wondered? Are there no contrarians? Or is it that
after so many years of policy-induced endless summer, there are only a few ways
left to make money?
Coincidentally the correlation between bonds & stocks
flipped in February 18, just one month before the liquidity supernova peaked,
and for the first time since the Global Financial Crisis.
See Chart:
See more charts at:
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
“We have met the enemy and
he is us...”
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Don’t trust polls: they’re financed by Super-packs (billionaires
and big Corp) since Obama gave them power .. of course the corrupt-Hillary
‘foundation’ is inside. Their press is Elect-Fraud
"...all pollsters from
back then are still in force... Same work this go around. Not much
different. Polls currently indicate that the Democrats have an 80%-85% 'probability' of overtaking Congress..."
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Overall,
Democrats are focusing on healthcare
while
Republicans are focusing on taxes
[[ Health care deal with
HR that is mostly privatized –very touchy issue- since there are monsters
associated and supported by both parties (Dems & Reps) .. so it is and
issue easy to be manipulated at convenience. Taxes
is the key of the Economy and if Trump announce a relief for working and middle
classes he can change in his favor the chances to win election. All that he has to do is announcing FDR type of taxes to the
super rich.. He will of course lose their political support but win the
electorate. I doubt he will do it, because the
big monsters against the Nation are inside the military industrial complex.
They are the ones who control de “deep state”, starting with the Penta: the
base of his power. Not even the DEMs will mention such association. So: real taxing rich= zero ]]
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"I can confirm that the
Democratic Party of Georgia is under investigation for possible cyber-crimes.."
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"Those appealing for more
civility and a return to polite discourse can save their
breath... It’s much, much too late
for that..."
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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-, D rest in limbo
[[ It is the US that is gona be
sanctioned for war-crimes & crimes against humanity, plus their piracy-sanctions.. This may be the chance for
a UN Gral Assembly & Resolut to cut foreign debts in USD across Asia,
Africa & America Latina. No more fake USD, no more sad Migrac ]]
"We
have advised SWIFT that it must disconnect any Iranian financial institutions
that we designate as soon as technologically feasible to avoid sanctions
exposure."
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"If Iran decides, a single drop of this region's oil will not be
exported" - Ayatollah Ahmad Alamolhoda
[[ That
will be a big geopolical hit to the US.. Oil-prices-up not only save VEN that
can buy top of the art missiles from RU, & not in USD, but in Ven currency.
Let’ see w/h. It will also affect the power of Israel in the Middle East and
save the Syrian power. ]]
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"Barbed wire used properly can be a beautiful sight."
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“As Twitter
users and activists and citizens, we don’t have power abroad, but we have
simple things like boycotting."
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
RELATED 1
RELATED 2
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RT SHOWS
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
VIENTO SUR
BRA Rud Rafael “Va a haber represión, censura,
también resist popular”
La nueva potencia de la derecha mutante José Natanson
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RT EN
ESPAÑOL
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
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Hillary can’t be
trusted: Saudis kill Gadafi & paid Hillary for training while other Yijad group
killed the personal in Bengazy Embassy. They were demanding Hillary help & help
never came. How much is Hillary getting from the Saudis to say that NATO –not Saudis-
killed Gadaffi?
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PRESS TV
Resume of Global News described by Iranian observers..
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