DEC 27 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 is indeed the start of a new bear market, here is
what may come next.
While McElligott can't answer
that particular question, which can only find a response in hindsight, the
Nomura strategist has shared an updated chart of the current selloff to the
Oct. 2007/2008 bear market analog so readers can get a sense of what may happen
next if this is indeed just the start of the first bear market in the past 10 years.
It is shown below.
See Chart:
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SOURCE:
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Americans are suddenly not feeling
all that confidence about the economic outlook as a result of plunging
sentiment about the labor market.
See Chart:
One possible reason for the
collapse is Americans' take on the job market which appears to have reversed
abruptly, with those expecting more jobs in the months ahead falling to 16.6% from 22.7%, with the 6.1% pt drop is the
biggest in over 41 years.
See Chart:
American
Expecting More Jobs in 6 Months
Of note, the richest Americans,
those whose incomes are higher than $50,000 saw their
confidence tumble from an 18 year high in October to the lowest level since
Sept. 2017 in December.
See Chart:
One
possible reason: the number of Americans expecting stocks to drop has surged in
the past two months to the highest level since April 2018.
See Chart:
And yet the poor data presented
above makes little sense because in light of yesterday's spending news, it
would appear that Americans
somehow spent the most money on holiday shopping on record in the month when their outlooks on the
economy collapsed and fears about job prospects surged the most on record?
In retrospect, it all makes
sense.
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January will be hit with the double
whammy of not only being the first month following the end of the ECB’s
bond-buying program, but will also see some major Fed balance sheet shrinkage.
See Chart:
Actual Fed Redemptions ($ Bll) : 36.2 Bll
With traders finally accepting
the reality that Quantitative Tightening means collapsing liquidity, tighter
financial conditions and - obviously - lower asset prices, especially in the
aftermath of Powell's "autopilot" comment regarding the Fed's balance sheet runoff which sent markets tumbling
during the last FOMC meeting...
See Chart:
Central Ban Liquidity
Nomura's Charlie McElligott
reminds us of his October call anticipating a "financial conditions
tightening tantrum" which was based-upon the enormous "global QT
impulse" that month (and which proved to be accurate) for one simple
reason: January 2019 should see
similar "tightening" as the Fed’s balance-sheet run-off
continues (including two heavy weekly QT periods during the first-
and third- weeks of January). And that's not all: in a
world of fungible global liquidity, January will be hit with the double whammy
of it being the first month following the cessation of the ECB’s bond-buying
program.
So for
those who - correctly - view the shrinking Fed balance sheet as one of the most
important drivers of (declining) asset prices, and who also expect a
self-fulfilling prophecy to emerge as traders avoid buying stocks on major QT
days (which would likely result in aggressive selling) here is the calendar of January -
and 2019 - days that have the
largest balance sheet shrinkage, courtesy of Nomura's George
Concalves. Will it be right? We'll know as soon as the
first trading day of 2019, when $18.2BN in TSYs are set to mature.
See Table
QT Calendar Projected FED
Balance Sheet
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SOURCE:
https://www.zerohedge.com/news/2018-12-27/beware-these-january-days-when-fed-soaks-market-liquidity
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"What is safe to say is that
there is something driving equities lower, which is not impacting rates. Or
there is something keeping long rates high, which is not impacting
equities."
See Chart: Something is wrong.. US Long Rates are to high
or S&P500 is too Low
See
Chart:
Another indication of the
failure of bonds to keep up with stocks: the S&P 500 is down 8% YTD, while
the 10-year note yield is up more than 30 bps to 2.77% leaving the bond market
also nursing negative returns this year. As a result, investors with a balanced
portfolio of stocks and bonds (usually in a 60/40 ratio) have been saddled with
unexpectedly deep losses, which have also hit such "balanced"
entities as risk-parity funds.
What is
behind this odd divergence?
According to Slok, the
uncharacteristic weakness in bonds may have taken hold after bond traders began
to see a gradual increase in auction sizes after Trump signed off on tax cuts,
bringing the reality of trillion-dollar deficits much closer and a surge in
bond supply in coming years. That may have pushed bond yields higher this year,
when they should have fallen along with equities if their classic relationship
had held up.
"What happened in January 2018
was that the corporate tax cut had to be financed by a significant increase in
Treasury supply, and maybe the reason why long rates remain so high is because
the market is beginning to price a U.S. fiscal premium into U.S. government
bonds," said Slok.
Furthermore, according to Slok
anyone expecting this divergence to collapse shortly may be disappointed since the breakdown of the positive correlation between
stocks and bond yields may not just be a temporary problem as the federal
government is projected to notch annual trillion dollar deficits for a “very
long time,” said Slok, prompting traders to
demand even higher bond yields in the future regardless if stocks underperform.
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SOURCE: https://www.zerohedge.com/news/2018-12-27/something-wrong-deutsche-bank-spots-odd-market-divergence
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NOTE 1:
In Spanish: cual es la relacion entre bonds & stocks. In
general bond prices fall as interest rates rise since there is an inverse relationship between interest
rates and bond prices. [Es acceptable el desbalance 40 for
stoks y 20 for bonds, pero cuando pasa de 30 la diferencia (Estamos en 59.21%
for stoks & less tan 40 for Bonds ) es signo de crisis & crash por
venir. Lo ideal es que suban ambos.. que haya positiva correlacion.
Then, is said that Bond prices and stocks are generally correlated to one
another. (Solo ocurrió con FDR) When bond prices begin to fall, stocks will eventually
follow suit and head down as well. Apr 20, 2018 Source:
Investopedia in Español: https://www.google.com/search?ei=I08lXPGQBs3Z5gLAo524Ag&q=investopedia+en+español
NOTE 2:
Is it
better to invest in bonds or stocks? Bonds
rinden menos pero seguro
So the main reasons to invest in bonds include steady,
predictable income, as well as capital preservation. The downside is that the
long-term growth potential is significantly less than that of stocks. ... Here's a primer on some of
the risk factors all investors should know about bond investing. May 28, 2017
Better Buy for the Average American: Stocks or
Bonds?
Hint: It’s a trick question
When it comes to investing your
money, two of the most common choices are stocks, which
are also known as equities, and bonds, which are also known as fixed-income investments. One of the most
common questions I hear from new investors is along the lines of "I don't
want to take too much risk, but I also want to grow my money. Which is the
better investment for me -- stocks or bonds?"
Here's a discussion of the pros
and cons of each type of investment, and what the ideal choice is for the
average new investor.
Better Buy for the Average American: Stocks or
Bonds?
Hint: It’s a trick question
Matthew Frankel, CFP
May 28, 2017 at 6:53AM
When it comes to investing your
money, two of the most common choices are stocks, which are also known as
equities, and bonds, which are also known as fixed-income investments. One of
the most common questions I hear from new investors is along the lines of
"I don't want to take too much risk, but I also
want to grow my money. Which is the better investment for me -- stocks or bonds?"..
es el comun pensar de los
usureros. Y NO ARRIESGAN SU DINERO, sino el del FED que les creo los QEs y Bailouts
para seguir reproduciendo el dollar “del
thing air”.
…
Pros and
cons of stocks
You may have heard that stocks
outperform every other major asset class over long periods, and that's true.
Stocks are a smart choice for investors who want to maximize their long-term
growth potential, as overall, stocks have produced annualized total returns of
nearly 10% historically.
However, the downside is
volatility. Stocks can be rather volatile investments and are therefore only
appropriate for investment capital that you're not going to need anytime soon
-- say for at least five years. To illustrate why this is important, consider
that over the past 10 years, the S&P 500, perhaps the most representative
index of the overall performance of stocks, has increased by 59%.
See
Chart: S&P 500 Level 59.21%. in 2016
The best bet: a combination of both
The answer to the question of
which is better is both. However, the right amount of each depends of
certain factors, particularly age.
Here's a quick but thorough guide to asset allocation. A
general rule of thumb is that if you subtract your age from the number 110,
you'll find the percentage of your investments that should be in stocks, with
the remainder in bonds. For example, I'm 35, so that
implies that 75% of my portfolio should be in stocks and the other 25% in
bonds.
==
Por Oscar Ugarteche y Armando Negrete
Analisis de la Politca Economica de Trump:
sigue el mal ejemplo de Herbert Hoover, el peor momento de la Historia Econ
Americana. ABRE: http://www.obela.org/book/export/html/190
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Dow
futures plunged over 760 points after tagging yesterday's highs overnight, but
the market higher in the last hour erasing the entire drop... with
the biggest buy program since
February and biggest reversal since 2010
See Chart
https://www.zerohedge.com/sites/default/files/inline-images/2018-12-27_13-09-22.jpg?itok=ADC6h8_c Where
is the Dow Chart?
And
the 4th biggest buy program of all time...
See Chart:
In words...
And pictures... Dow futs
exploded over 900 points higher, taking out yesterday's
highs and ending like yesterday at the highs of the day...
See Chart:
Quite a
wild ride this week so far...
This is reliable
See Chart:
The plunge was not a total
surprise after economic confidence crumbled and job
expectations crashed, but the buying panic had the same short squeeze
and pension panic reallocation fingerprints from yesterday. The graph
doesn’t fit the message
…
However,
gold and bonds remain green since the Fed hike and stocks still down over 4%...
See Chart:
It
certainly has the smell of a massive pension reallocation as the moment stocks
started to surge, bonds were dumped...
Where is the chart?
…
While the USD and stocks were
correlated today, the former plunged and was unable to rip back with the
magnitude of stocks...
See
Chart: Bloomberg Dollar Index This
chart is reliable
In fact
the USD fell well short... see
the red line
But
finally, no matter how much lipstick they put on December, it is still a pig...
See Chart:
S&P 500 Dec-to-date
Performance
….
SOURCE: https://www.zerohedge.com/sites/default/files/inline-images/2018-12-27_12-09-41_0.jpg?itok=ZyAtw4pn
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On any other day, a 1.5% drop in the
S&P futures would be cause for alarm; however after yesterday's historic 5%
surge in US stocks it barely prompts a shrug, because even with ES sliding -36
points, it is roughly where it was trading at 3:35pm yesterday.
See Chart:
Top Overnight News from Bloomberg
- Donald Trump said that he has no plans to withdraw American troops from Iraq, speaking to reporters at Joint Base al Asad in Iraq on Wednesday, making his first visit to troops in a combat zone as commander-in-chief a week after dismissing his defense secretary in a dispute over Middle East strategy
- Japanese shares rallied for a second day, with the Topix index climbing more than 5% and poised for its biggest advance in two years
- Oil held its biggest gain in two years, after being swept up in a rebound across risk assets spurred by optimism about the global economy
- A U.S. government delegation will travel to Beijing in the week of Jan. 7 to hold trade talks with Chinese officials, two people familiar with the matter said
- President Donald Trump won’t try to fire Federal Reserve Chairman Jerome Powell, a top White House economic adviser said. Kevin Hassett told reporters “yes, of course, a hundred percent” on Wednesday after he was asked whether Powell’s job is safe
- President Trump said he won’t relent on the partial government shutdown unless Congress funds his proposed border wall, and wouldn’t say whether he’d accept less than $5 billion for the project
- Profits of Chinese industrial companies fell for the first time in almost three years, highlighting the effects of slowing economic growth, falling prices, and the trade war with the U.S.
- Replenishing capital of Chinese banks is key to boost lending growth and support the economy, People’s Bank of China adviser Ma Jun was cited as saying in a front-page report in China Securities Journal
See more chart & tables at:
…
SOURCE:
https://www.zerohedge.com/news/2018-12-27/sp-futures-tumble-epic-one-day-rally-fizzles
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All the problems there before the holiday didn’t just go away
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READ THIS:
As we look ahead to 2019, what can we be certain
of? Maybe your list is
long, but mine has only one item: certainty is fraying.
Confidence in financial policies intended to
eliminate recessions is fraying,
confidence in political processes that are supposed to actually solve problems
rather than make them worse is fraying, confidence in the objectivity of the
corporate media is fraying, and confidence in society's ability to maintain any
sort of level playing field is fraying.
When certainty frays, capital gets skittish. Predicting increased volatility is an easy call
in this context, as capital will not want to stick around to see how the movie
ends if things start unraveling. The move out of stocks into government bonds
is indicative of how capital responds to uncertainty.
The coordinated efforts of global central banks to
backstop and boost markets also backstopped confidence in the banks' monetary
policies. Regardless of the
long-term impact of the policies of quantitative easing and repression of
interest rates, capital could count on the policies remaining in force and act
accordingly.
With the Federal Reserve
apparently ending the Fed Put and normalizing interest rates after a decade of
near-zero rates, certainty about global central bank policies and the impacts
of those policies has dissipated.
With valuations at historic highs and real estate
rolling over, confidence that gains are essentially permanent is also fading. Buying at the top and holding onto the asset as
it loses value is a predictable way to destroy capital, and so capital's
willingness to exit is rising, as is its preference for deep, liquid markets
such as U.S. Treasury bonds, markets where big chunks of capital can be safely
parked until clarity and confidence return.
But clarity and confidence might become scarce for an extended period of
time. Capital will remain skittish until
there is some clarity and confidence, not just in official policies but in the
political and financial contexts of those policies.
This generates a
self-reinforcing feedback loop: capital seeks safety and gains, and seeks to
avoid catastrophic losses. As markets become more volatile, capital becomes
increasingly skittish and risk-averse. This generates the very volatility that
is making capital skittish.
The net result is capital is impaired in eras of
uncertainty. Uncertainty also leads
to polarization, as people cling with irrational certainty to ideologies and
policies that are failing.
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US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
NOBODY TRUST GOV’t words.. better give cash to them to return their
countries
Nielsen has
asked experts from the Centers for Disease Control and Prevention to investigate
"the uptick in sick children crossing our borders"
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"I’ve not been involved in those
discussions but I can say that I think that if they did meet it would be a very
favorable thing..."
For Powell is the best
time to abandon Trump.. not more idiocies from T
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...a few
weeks from now, approximately 38
million people could be suddenly cut off from the food stamp program. If
that scenario were to unfold, there is no telling what could happen.
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"Do the Dems realize that most
of the people not getting paid are Democrats?" - Donald Trump
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US-W
ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China,
RU, Iran search for State socialis+K-, D rest in limbo
Assad's "normalization" begins in earnest.
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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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SHOWS
RT
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NOTICIAS
IN SPANISH
Lat Am search f alternatives to
neo-fascist regimes & terrorist imperial chaos
RT EN
ESPAÑOL
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Keiser Report "Estamos volvien a ver a US como
un país pobre"
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Todo templo que recibe luz Solar está iluminado
por Dios: Panteismo Incaico
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DEMOCRACY
NOW
ND denounce Global-neoliberal
debacle y propone State-Social + Capit-compet in Econ
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PRESS
TV
Resume of Global News described
by Iranian observers..
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‘US
might continue Afghan war for centuries’ opium’ delusion
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