JAN 1 19 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 story of the 21st century is... debt
is soaring while earned income is stagnating for the bottom 95%.
See Chart:
Americans’ paychecks are bigger than 40 years ago, but their purchasing
power has hurdly budget
Best
wishes to all my readers and correspondents for a safe, healthy and productive
2019. Thank you, longstanding
supporters, for renewing your financial support at the new year without any
pathetic begging on my part. (The pathetic begging will commence shortly.)
While I
don't have any predictions for 2019 (why look any dumber than I have to?), I do
have a couple of thoughts on the economy, markets, globalization, etc. Here are a few of the key issues confronting
humanity:
1. The war being waged by Corporate Power (Globalization / Open
Borders) to eradicate democracy and the power of nation-states to control their
own destiny. Democracy ceases
to exist in a corporate-controlled globalized system of governance; the sole
structure that enables a citizen to have political and economic agency is the
nation-state.
Try voting
for a U.N. resolution or E.U. regulation. Sorry,
pal, there are no elections or representation of the rabble in globalized
governance. Globalization destroys democracy and the agency of the citizenry.
That's its goal.
Global corporations seek to destroy any and all barriers to
their power and profits, and globalization / tax havens / Open Borders are the
means to co-opt, marginalize and neuter nation-states and the political and
economic agency of the citizenry. The net result of
Corporate Power controlling the machinery of governance is neo-feudalism.
2. Energy and capital flows. The status quo holds that energy flows don't
matter very much because energy represents a shrinking percentage of economic
activity. In other words, capital is what matters, not energy, because capital
can always buy whatever it wants.
Try
pushing your car or truck uphill for a mile. How
many humans would you need to push your 3,000 pound "compact" vehicle
up a slight incline for a mile or two? How about 20 miles, or 100 miles?
Take away liquid fuels and the global economy grinds to a
halt, and capital loses its scarcity and value. So-called
renewable energy is around 3% of total global energy consumption.
3. Volatility, liquidity and price discovery. Central
banks have labored diligently for the past decade to eradicate volatility and
price discovery while providing almost unlimited liquidity.
For a variety of reasons (including the political blowback
of the 90% who have been stripmined by central bank policies, corporate
cartels, taxation and globalization), central banks are now attempting to
"normalize" by reducing or withdrawing their distorting,
perverse-incentives policies.
As a result, what they've
suppressed--price discovery and volatility--have erupted. What they've
pimped--liquidity--is sagging.
As I explained last month, capital gets skittish when
certainty evaporates. When big blocks of assets hit the market, liquidity dries
up due to the mismatch between sellers trying to unload hundreds of billions of
dollars of assets and the few buyers willing to nibble on a couple of billion
dollars of these assets.
Central banks can fill the mismatch
by becoming buyers of last resort, but the political leeway
to engage in this sort of manipulation is evaporating along with liquidity.
4. 2018-19 is not a repeat of 2008-09. While many have observed the similarity of the
stock market meltdown in 2008 and 2018, the fundamentals are not as close a
match. There is no analog to subprime mortgages this time around. That doesn't
mean there won't be turmoil and asymmetries, but it does suggest we shouldn't
put too much weight on expectations that 2019 will follow the template of 2009.
I'll have more to say on this soon.
5. The predictably outsized returns on capital have ended. There's
more on this in The Crisis
of Capital.
6. Debt and stagnant income. Rising debt is supposed to be matched by rising
income to service the debt, but the story of the 21st
century is debt is soaring while
earned income is stagnating for the bottom 95%. That
asymmetry eventually matters, for example, when zombie corporations finally
default and marginal household borrowers default. The losses can't be
socialized this time around; the stripmined masses have finally awakened to the
skims and scams of central states and banks.
7. The much-desired de-dollarization of the global economy has
yet to materialize. Personally, I believe a profusion of
competing currencies in a transparent, open market is the ideal arrangement,
but here's the current arrangement: the USD and euro are dominant.
See
Chart:
US Dollar’s Share of Global
Payments, Loans and Reserves
https://www.zerohedge.com/sites/default/files/inline-images/USD-other-currencies_0.jpg?itok=w1tUu4u1
8. Global harvests of grain and other essential food commodities
have been good. Our luck may
run out in the years ahead.
9. Cultural Revolutions are becoming more extreme and divisive. I'll have more to say on this soon.
10. The topics covered here in December are key issues in 2019: in case you missed these:
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Two short News
The closure of an additional 80
Sears and Kmart stores will be completed by late March 2019.
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We
continue to ignore the coming
economic tsunami caused by the approximately 22 trillion dollars (and rapidly
increasing) federal debt...
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Here are
the trends which, according to the IMF, drove the world economy in the past
year.
1. The global economy started 2018 on an upbeat note, buoyed
by a pickup in global manufacturing and trade through 2017. As investors’
confidence in theglobal
economic outlook lost steam, so did the upswing.
See Chart: Slowing Down
2. One reason behind this loss in momentum is the
implementation of tariffs by major economies—especially the United States—and
retaliatory measures taken by others, including China. The
increasingly protectionist rhetoric on trade has meant higher uncertainty about
trade policy, which weighs on future investment decisions.
See Chart: Trade
Tension
3. Despite these actions, the US economy expanded at a fast
pace in 2018, as tax cuts and spending increases stimulated demand. The US
Federal Reserve has continued to raise the policy interest rate as a result. Interest rates on US long-term bonds have increased less,
as investors see risks to future growth and value the safety of US Treasury
securities.
See Chart: Gradually Increasing
4. As growth and interest rates in the United States have
outpaced those in other major economies, the US dollar
has appreciated against most other currencies in 2018.
See Chart: Stronger than the Rest
5. Some vulnerable emerging market
economies have come under strain as the US dollar gained value and the level of
risk that global financial investors were prepared to accept dropped.
Most of these countries have seen increases in their external borrowing costs,
but the extent of these increases varied widely.
See Chart: Higher Borrowing Costs
What happens in 2019? For the
answer, tune in on January 21, when the IMF's World Economic Outlook
Update will present the IMF’s view on where the global economy is
headed next.
…
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After Monday's
panic-buying spree at the close, tonight's opening session of 2019 is more of
the same as US equity futures have popped on the open and are extending
gains...
Dow Futures are up 130 points
See Chart:
but the Nasdaq is leading for now...
See Chart:
The dollar is unchanged for now.
…
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The last
day of the year held some surprises for traders who were already in a festive
mood: from an odd 15 spike in the S&P in the last second of trading, to a
record surge in the overnight repo rate, to a bizarre inversion in the Treasury
curve.
In fact, the closing print of 6.125% was the highest GC repo rate observed since
January 2001, and just under 400 bps higher than the Fed funds rate.
See Chart:
Meanwhile, in yet another bizarre manifestation of year-end
liquidity events, on Monday shortly after a 52-week Bill auction priced amid
unremarkable results, the short-end of the curve
inverted dramatically, with the yield on the 1Y finding itself more than 10bps
higher than the 2Y.
See Chart:
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“QE has done something much more damaging than the Fed could have imagined. It changed the very nature of the market, destroying the
diversity of the market ecosystem, and making it incredibly vulnerable to the
smallest change in the macro environment”
Revisemos algunos conceptos antes de ir al
artículo.
1-YIELDS : refer rate of return
for an investment. For example, a yield on
bonds, such as the coupon yield is the annual interest paid on the
principal amount of the bond. ... “The current yield” refers to the annual payments divided by the
current market price.
To Investopedia Yield is the
return a company gives back to investors for investing in a stock, bond or
other security.
[[ More on Definition: In Spanish =
produce, rinde. More in Spanish at: english
spanish financial glossary. In Eng: Yield has 2 diff meanings: A-"an amount" (cantidad) or "to give way." (pago)
Ex. The yield of the receipe was $12. B-Yield can also mean the rate of return on an investment. Ex :
A bond yields an interest rate of 2%, or gives an investor $2.00 for every $100
invested. So, in Econ : “is a financial ratio
that indicates how much a company pays in dividend/ or interest to investors,
each year, relative to the security price”. This is a tech definition ]]
Let’s go to the ART now:
"Bond guys think they
know what they want, but they're wrong," my first boss told me. "They
think they want lower yields because they drive up bond prices.
But that's a short-term gain collected at the expense of future returns. Client
inflows surge, chasing those high returns, but they're not repeatable unless yields continue falling.
What bond guys should really want is high yields, the kind that create
long term returns that are attractive to clients. Rising rates are painful in the short-term but higher rates are better in
the long run."
2- FED PUT
[[ Definition: According to
Investopedia it was Greenspan the 1st
to initiate this strategy PUT in 1990s to help
support the U.S. economy by actively using the federal funds rate.
According to Wikipedia the Fed added monetary liquidity and encouraged
risk-taking in the financial markets to avert further deterioration. The term "put" refers to a put option,
a contractual obligation giving its holder the right to sell an asset at a
particular price to a counterparty. The put option can be exercised if asset
prices decline below that put price, protecting the holder from further losses.
During Greenspan's chairmanship, when a crisis arose and the stock market fell
more than about 20%, the Fed would lower the Fed
Funds rate, often resulting in a negative real yield. In essence, the Fed
added monetary liquidity and encouraged risk-taking in the financial markets to
avert further deterioration.
Bernanke Put In 2007 and early
2008, the new Federal Reserve Board chairman, Ben
Bernanke continued the practice of reducing interest rates to fight market
falls. The decision by the Fed to lower short-term interest rates to 50
basis points (0.5%) on October 8, 2008,[7][8]
and thereafter a range from 0.00-0.25% rate in December 2008 suggests attempts
to create a Bernanke put similar to the Greenspan put. New steps in quantitative easing further illustrate the
Fed's attempt to moderate the business
cycle. Recent (post March 2011)
declines in measures of velocity and related declines in monetary growth
measures suggest there is a limit to market manipulation. ]]
Back to the Article:
"Why did Powell reset the Fed
put lower?" he asked "I don't think
Powell saw it that way," I responded, "but I'm surprised people think a central bank PUT still exists."
If we have a
recession with overnight rates still at 2.50%, what can the Fed do? They can't
ease 500bps like in past recessions, there's no room. Coordinated
easing with the ECB and BOJ is off the table -- their rates are negative and
they're running out of assets to buy for QE. At least the Fed won't have that
issue. With surging
budget deficits, the Fed will have plenty of Treasuries to buy. And that's only just begun, because the next put for the markets is really from fiscal, not
monetary policy.
3- ASSUME
"What do you think about big data models?" the
analyst asked. "There's a fascination with having ever more data, but
quantity can't make up for quality," I responded. Some
things are easy to model but others are much harder because there's just not
good data. Anyone can build a decent model with great data. The hard part is knowing what to do with bad or incomplete
data. The hardest yet is knowing when to pull your model because the data it was built with isn't representative of the
current environment.
How would you build a robust model
for a bond bear market? There's
just not great data. Most quants compensate by creating a data
series and then treating this made-up data as real. But
to create a data series you must make assumptions. Success will come not to those who build the best machines but to those
who make the best assumptions.
…
[ SO,
regresamos al punto ZERO en la línea cartesiana y lo que viene en real Econ Is –ZERO ]]
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
"It's a mini jubilee..."
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Border
Security and the Wall “thing” and Shutdown is not where Nancy Pelosi wanted to
start her tenure as Speaker! Let’s make a deal?
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"Based upon history, the resolution will not be based on compromise, civility, reason, or peaceful
means. The combustible combination of unpayable debt, civic
anarchy, and global chaos are set to detonate, creating an era of maximum darkness, death, destruction, and decisions..."
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"'Hamilton68' is probably the single most successful media fraud & US propaganda campaign I've seen since
I've been writing about politics. It's truly shocking."
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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
Yes: most
global markets closed the year in the red, but there were two surprising
outliers - in dollar terms, two Gulf nations enjoyed a positive return in 2018.
See Chart 1:
2018 Return in USD
Meanwhile, in local currency terms,
the picture was even brighter, with at least 7 major markets generating positive
returns last year, among them Brazil, Russia, UAE, Saudi Arabia, New Zealand,
India and Argentina.
See Chart 2:
2018 Return in Local Currency
https://www.zerohedge.com/sites/default/files/inline-images/2018%20returns%20local.jpg?itok=LcGT2l2w
So to anyone who correctly read the
tea leaves and invested in these outperforming markets, congratulations. To
everyone else, better luck next year.
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Iraqi jets
target ISIS commanders in Syria after Assad gives carte blanche...
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"We’ll see how frightened
America is."
[[ In my opinion CHINA is the less advocator of WW3.. Su Presidente
NO tienen problemas de impeachment como le ocurrió a Clinton (case Monica Lewinsky y bombardeo de Yugoslavia,-a fake enemy of the US) - o como
le ocurre hoy a Trump con los Dems, quienes vienen sacando provecho de la
estupidez llama “Wall”. China ya tiene la guerra Económica ganada, no
necesita el WW3, pero es cierto que
están listos para duplicar un Tit for Tat si son atacados. Con China estamos
creando un falso enemigo como ocurrió con Yugoslavia. Este país se atrevió
a crear un sistema Econ que combino Socialismo con Capitalismo como lo hizo FDR
en el US. Los únicos que podían responder el ataque USA en Yugoslavia eran los Rusos, pero no lo hicieron porque no
había interés Econ –oil- que defender allí, NO los apoyaron, ni Europa lo hizo.
Hoy el mundo entero SI apoyaría a China si los atacamos.
]]
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"I am willing to sit with the U.S. president any time in the
future and will strive to produce outcomes that would be welcomed by the
international community..."
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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
REBELION
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RT EN ESPAÑOL
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Keiser
Report y 2019 Desplome
del mercado, alternat al SWIFT, oro a 600 dólares: 2019
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COUNTER PUNCH
Analysis on US Politics & Geopolitics
Richard Falk – Daniel Falcone On
Trump’s Syrian Pullout
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Jeffrey St. Clair 2018:
Year of the Rats and the Sinking Ships
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Dan Corjescu Thinking
about American Totalitarianism
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John Laforge Worse
than Obsolete: NATO Creates Enemies
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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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‘US
will continue to work with Israel over Iran’ Shame of us
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