DEC 16 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 hurdle for capital to flow back into emerging markets is high
and a significant macro catalyst is required to turn the narrative
around."
In his Dec.
11 webcast, Gundlach noted that the cyclically adjusted
price-earnings (CAPE) ratio for emerging-market stocks is less than half that
of the S&P 500. But, in the last two decades, there were times when it was
much higher. Based on that metric alone, Gundlach said emerging-market
equities [ EM ] could outperform U.S. stocks by
100%.
See Chart:
Others however disagree, among them those who correctly
predicted the 2018 crash in emerging markets. One such skeptic is SocGen's Jason Daw, who warns
that some of the world’s biggest investors are setting themselves up for a
major disappointment.
See Chart:
Disappointing Decade
According to ScGen's Daw, the time to get back in
emerging-market assets would be when the Fed starts to
cut rates, and that could be 18 months away.
“I get the feeling consensus is on the more optimistic side,” he said. “We have believed that EM FX could
weaken since the end of last year.”
He sees some value in Argentina, which led emerging-market
currency declines this year. The Societe Generale
strategist also recommends shorting the Brazilian real against Mexico’s peso as
the initial market euphoria following Jair Bolsonaro’s election wanes.
See Chart:
Turning Tide
Meanwhile, as we reported
previously, the biggest concern for BofA's head of global rates, David Woo,
is that Xi Jinping’s government has no incentive to make concessions on trade,
especially with Donald Trump hobbled by congressional gridlock. Domestically,
Chinese authorities must juggle the need for stimulus with the desire to rein
in runaway home prices. Woo recommends shorting the Indian rupee and Mexican
peso as the slowdown in China weighs on assets across the developing world.
"You want to
buy EM?" he said. "I wouldn’t touch EM with a
10-foot pole until there’s a resolution between the U.S. and China."
See Chart:
The China Effect
At the same time, Ecstrat founder and China bear, John-Paul
Smith, said he’s confident that a slowdown will hurt
emerging-market equities. He recommends being underweight or zero-weight
Chinese shares, Russian stocks and South Korea’s won, given their sensitivity
to trade and commodities.
“I expect all three to have
significant downside in dollar terms between now and the end of 2019,” Smith
said.
See Chart:
KOSPI Indicates Weak Global Economy
Last but not least, there is the biggest reason of them all
to be short EMs: the dollar is strong - in fact it is just shy of 2018 highs -
and will likely remain strong for the foreseeable future even as bears continue
to rise, expecting the dollar to tumble as the Fed suggests its rate hiking
cycle is over. According to Schwab's Kathy Jones,
"it’s best to remain underweight emerging-market bonds as spreads
potentially widen to 450 basis points over U.S. Treasuries." She
also expects the dollar to remain strong in the near term, while additional Fed tightening, slowing Chinese growth and lower
commodity prices also prevent a big rally.
See Chart:
Rising Risks
"There is a case for a rebound in EM sometime in 2019 once the peak in tightening
financial conditions has been reached,” Jones said. “We just aren’t seeing it
in the near term."
We now eagerly look forward to the
EM bulls' response. And considering that Gundlach is among them, we won't have
long to wait.
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"What we’re seeing now is pretty typical for end-of-credit-cycle
behaviour."
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RELATED:
IT WAS ALMOST PREVISIBLE:
This reveal that all economics are close interrelated
Most hedge
funds have produced pretty awful returns for the past few years—a time when the
S&P has shot the lights out. There’s an obvious reason for this
underperformance and it comes down to the demands put upon most hedge fund
managers.
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Slowing
population growth combined with increasing technological innovation would mean
perpetually low capital investment. Secular stagnation, disinflation, and underemployment
were inescapable. Within months
World War II? began.
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
What’s important to note is that the reported $133.5 billion in debt is the rosy scenario for
Illinois...
See Chart:
The teachers’ fund earned 8.3 percent on its investments and
the state employees’ fund earned 7.7 percent, both exceeding their 7 percent
return targets. The university employee fund earned 8.3 percent, outpacing its
expected return target of 6.75 percent.
See Chart:
State Pension Debt Grows Despite
above-target Investment returns
Insolvent
Collectively, the five pension systems have just 40.2
percent of the funds they need today to be able to meet their
obligations in the future, up slightly from 39.8 percent the year before. The university employee fund, SURS, is the best funded of
the five pension funds, but its funded ratio fell by nearly 2 percentage points
to 42.6 percent.
Most notable is the funding ratio for the state lawmaker
pensions. It’s just 15.1 percent funded. Any way you
measure it, it’s broke. Only a yearly bailout by taxpayers keeps that plan
afloat.
See Graph
Illinois State Unfunded Pensions Liabilities rise to $134
Billion
Uncontrolled
benefits
Lawmakers typically blame the current pension crisis on a
lack of taxpayer dollars. But the pension funds are
crisis today due to
over 30 years of uncontrolled benefit growth,
not a lack of funds.
What COGFA’s report fails to mention – and what the media
has failed to report on – is that total pension
benefits owed to state workers grew
1,061 percent between 1987 and 2016, swamping
the state’s economy and taxpayers ability to pay for them.
Total benefits promised (the accrued liability) have grown
4.5 times more than personal incomes (238 percent) and six times more than
state revenues (176 percent) over the period.
See Chart:
Growth in total State Pension
benefits overwhelms Ill-Econ, State Revenues
A
period of collapse
Illinois’ pension funds have collapsed – putting both state
workers and taxpayers at risk – during one of the longest bull
markets in history.
Since the
end of the Great Recession, the S&P 500 index has recovered and grown by
200 percent.
During that
same time, Illinois’ pension shortfall worsened by 72 percent, or $56 billion. In fiscal year 2009, the unfunded liability was
“just” $78 billion. Today, it’s nearly $134 billion.
See Chart:
Markets Boom 200 % since Great Recession but Ill-Pension
worsen by $56 Billion
Illinois
needs comprehensive reforms more than ever
If Illinois
properly paid its debt according to actuarial standards, 50 percent of the
state’s budget would be consumed by retirement debts alone. Illinois is the outlier when it comes to that statistic and
it’s one of the key reasons why the state is just one notch away from
a junk rating.
See Chart
Ill-true State workers retirement costs consume 50% of
Budget, the most in US
Until then, the crises will only get worse.
Read more about Illinois’ state and local public retirement
crisis:
- Illinois’ other debt disaster: $73 B in unfunded state retiree health benefits
- Illinois state pensions: Overpromised, not underfunded
- Overpromising has crippled public pensions: A 50-state survey
- Beyond Harvey: Many Illinois municipalities running out of options
- Illinois constitutional pension amendment is long overdue
- $125,000: The pension debt each Chicago household is really on the hook for
Read all of Wirepoints’ major work on pensions here.
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"We
should not let a temper
tantrum threat push us to do something wrong"
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"such
information could be used by individuals or entities who might seek to harm or intimidate the
defendant"
[[ It
was expected RU might do the same.. RU may have more than 1 target]]
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The past few years have seen more than the usual amount of political
upheaval. But, interestingly, most regime changes have
resulted in pretty much the same thing: Higher government
spending and bigger deficits.
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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
"For those countries that seek to ingratiate themselves to the US
without regard to China's interests, China should firmly fight back, causing a heaving price for them."
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READ THIS:
"...people fall in love
with their own heterodoxies and double down when their wrong ideas come under
attack.Ideology begins to replace reality, and their focus gets ever
more distorted. Once
that ideology is lodged deeply in the mind, it takes control of all
perceptions."
[[ The
worse comes when religious ideologies are mixed with politics. When the Jews
became Zionist they terrorize the middle
East and do on Palestine similar horrible thing done by Nazis to them during
the Holocaust. When the muslims became
Wahhabi they’re turned into the most horrible terrorists of current time .. Nonetheless
the Zionist and Wahhabi are protected by Presid
Trump.. shame of us ]]
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
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RELATED 1:
RELATED 2:
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Look who is talking of insults.. he was accomplic in war
crimes & crimes agst Hum
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Analyst
Explains If China Would Be Able to Pay Its National Debt Obligations: 'There
Are No Risks' Foreign
central banks are buying Chinese government debt securities on a massive scale,
according to a Morgan Stanley report.
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SHOWS RT
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
VIENTO SUR
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Justicia 15-D: frente al Tribunal Supr-Madrid NO HAY JUSTICIA
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PRESS TV
Resume of Global News described by Iranian observers..
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