JAN 2
19 SIT EC y POL
ND denounce Global-neoliberal
debacle y propone State-Social + Capit-compet in Econ
ZERO
DEBT FOR US STUDENTS
If this is true & if I
understand well
THIS IS
THE BEST GIFT from TRUMP
TO OUR ENTIRE NATION in this
NEW YEAR
…
…
ZERO HEDGE ECONOMICS
Neoliberal globalization is
over. Financiers know it, they documented with graphics
Exiting 2018, Goldman's economic team
published a series of its "favorite" chart meant to "illustrate
the key themes of the global economy that stood out in 2018." Here are the
key observations from Jan Hatzius and team...
See Chart:
Global Growth Momentum Softened
in 2018
The US
Financial Condition Index FCI has
tightened by 150bp Since the start o 2018
See Chart:
Positive
Impulses have turned negative
See charts:
Fiscal
Policy is now the main positive driver of Global Growth
See Charts:
In the
Euro Area thing are moving slowly in the right direction
See Chart:
Wage
pressures are picking up
Which feed
prices inflation in some countries
See Charts
The
trade war threat became a reality
See Charts:
The US
will feel the Inflationary effects hardest
See Charts:
Continue seeing more charts at:
….
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"probably just a little glitch"
[[ Meaning: Currency
Pair – Investopedia https://www.investopedia.com › Trading › Forex
& Currencies. A
currency pair is the quotation of one currency against the other. ... There are
as many currency pairs as there are currencies in the world.
What are the major FX pairs? In forex trading, four major currency pairs
are the most popular:
- EUR/USD: The euro and the U.S. dollar.
- USD/JPY: The U.S. dollar and the Japanese yen.
- GBP/USD: The British pound sterling and the U.S. dollar.
- USD/CHF: The U.S. dollar and the Swiss franc.
What are the 7 major currency pairs? The four most popular, also known as
"the majors" are:
- EUR/USD (euro/dollar) – "euro"
- USD/JPY (U.S. dollar/Japanese yen) – "gopher"
- GBP/USD (British pound/dollar) - "cable"
- USD/CHF (U.S. dollar/Swiss franc) – "swissie"
What are the most traded currency pairs? Here are the most traded currency pairs.
- AUD/USD.
- EUR/USD.
- USD/JPY.
- GBP/USD.
- USD/CAD.
- EUR/JPY.
- EUR/GBP.
- USD/CHF.
See Chart: Forex Average Daily Trading Range
The most volatile currency pairs are GBP/JPY, EUR/NZD and
GBP/AUD.
The least volatile currency pairs are EUR/GBP, NZD/USD and EUR/CHF.
The least volatile currency pairs are EUR/GBP, NZD/USD and EUR/CHF.
Of course State Nations & Investors will chose the least volatile
currency pair ]]
….
Back to the article:
In what some have suggested is a chained liquidation stemming
from the collapse of AAPL shares after-hours, multiple FX pairs are
flash-crashing across the globe amid still low liquidity conditions ..
USDJPY just flash-crashed a stunning 4 handles (the
biggest drop since 2009 according to Reuters) to its lowest in over two years, as the JPY was suddenly panic bid
against the USD, as the pair tumbled from 109 to as low
as 104.87.
See Chart:
Pushing JPY to its strongest against the USD since
Nov 2016...
See Chart:
In addition to JPY, AUD also crashed...
See Chart:
And TRY plunged, as the stench of a major carry
trade unwind hits.
See Chart:
And so did Cable.
See Chart:
Keep in mind that Japan remains closed for the rest of the week, adding
to the illiquidity of the market; even so it may be prudent for the BOJ to say
something in light of these sharp moves.
Notably, the multiple flash crashed occurred while FX
futures were closed suggesting it is cash market driven rather than exchange
margin calls.
Though they quickly caught
on once they reopened...
The sharp moves have prompted contagious buying in
safe havens.
Gold spiked...
See Chart:
AND 10Y US TREASURY YIELDS TUMBLING..
See Chart:
…
…
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[[
Here only extracts: go to the source below to read full art ]]
All
around is crashing: Can the centre hold?
- Global Liquidity falling at its fastest rate since 2007/08 Crisis
"The future looks especially bad for
those economies, firms and institutions that have spent the last decade kicking the proverbial debt can down
the road..."
See Chart: [[ Long way kicking the same can.. and now is
flat.. we can’t continue kicking it ]]
G4 Yield Curve and Global Liquidity 1986 -
2018
We will enter 2019 with Global Liquidity tumbling at
its fastest rate since the 2007/08 Financial Crisis. Yet again
investors are learning the hard lesson that low nominal
interest rates are a dangerously
ambiguous guide to monetary conditions.
Already risk asset markets are
skidding, in response to tight liquidity, and economic slowdown and probable
recessions lie ahead. The
future looks especially bad for those economies, firms and institutions that
have spent the last decade kicking the proverbial debt can down the road. High debt levels always demand
high liquidity to facilitate re-financing. Systemic risks rise if debt cannot
be re-scheduled.
See Figure
1: Global Liquidity Net Expansion by Source
What to Watch?
We monitor Global Liquidity by closely watching three channels:
- Central Bank liquidity injections
- Private sector liquidity provision
- Cross-border capital flows
The
first channel is now fashionably dubbed ‘QE’ or quantitative easing and
measures the activities of policy makers in the money, repo and debt markets. The second looks beyond credit at all forms of cash
generation by the private sector. It embraces bank credit, shadow bank
credit and household and corporate savings flows in retail and, particularly,
wholesale markets, and covers a history of financial engineering that extends
back to the UK fringe banks in the 1970s and Japanese zaitech in the 1980s.
Cross-border
flows include all forms of net investment, but they are noteworthy
because foreign currency borrowings, e.g. Eurodollars, are often used as
collateral and levered up by domestic credit providers. It follows that Central
Bank liquidity and cross-border flows represent what we term primary liquidity,
while banks and shadow banks provide secondary liquidity.
We define Liquidity broadly to include ‘global’ or cross-border effects,
and deeply, insofar that it extends beyond the traditional financial sector, to
include corporate cash flows, and beyond retail banking by embracing wholesale
money and repo markets.
The link between the volume of
liquidity and interest rates was anyway never one-to-one: a fact that is
especially true in the post-2008 period. Moreover, the link between bank
reserves, money and liquidity has been similarly blurred; with the size of
Central Bank balance sheets playing a more complex role in the funding
structure since they simultaneously affect both the supply of cash and the
availability of collateral.
According to Adrian and Shin
(2009):“The money stock is a measure of the liabilities
of deposit-taking banks, and so may have been useful before the advent of the
market-based financial system. However, the money stock will be of less
use in a financial system such as that in the US. More useful may be measures
of collateralized borrowing, such as the weekly series of primary dealer
repos.”
Central Banks have an outsized-effect in deregulated
financial systems, where retail deposits are not the sole funding source,
because what matters most is the ability to re-finance positions and at the
margin Central Banks are the marginal suppliers of liquidity. Put another way liquidity is not fungible in
crises, the very times that it matters most, and so Central Bank interventions
are required. Since the supply of liquidity to
roll-over existing positions matters more than the demand for finance for new
projects, the size of the Central Bank balance sheet often outweighs the impact
of interest rates. It follows that the relationship between interest
rates and the supply of liquidity is rarely one-to-one. Central Bank interventions into the money markets significantly affect the
elasticity of the financial system: in short,
quantities matter and Central Banks increasingly determine the volume of
funding liquidity and often directly impact the amount of market liquidity in
modern financial systems.
See Charts:
Figure
2-US Money Market -By Instruments
Figure
3 Growth in Size of US Money Market & FED Reserve Balance Sheet
Figure 2 shows the dramatic expansion in the size of
the US dollar money markets to around US$9 trillion and the dominant role
played by the US Federal Reserve in the period since 1980. These
markets have increasingly supplemented retail deposits and now fund a rising
proportion of US credit and liquidity, notably wholesale lending activity. Admittedly, following the 2007/08 Crisis, they have
essentially flat-lined in size. Although the money markets are exploited
by both traditional banks and shadow banks as financing pools, what sets
traditional banks apart from all other financial institutions is their ability
to issue liabilities, e.g. demand deposits, that serve the non-bank sector as a
means of payment.
What shadow banks do is to transform these bank
assets and liabilities and refinance them as longer and more complex
intermediation chains, e.g. A lends
to B who lends to C, etc. In doing this they provide alternative stores of
value, e.g. asset backed securities, to institutional investors that do not
want to hold all of their liquid assets as (uninsured) demand deposits. However, shadow banks largely
repackage and recycle existing savings. By lengthening intermediation chains they became involved in large
volumes of wholesale funding, without creating much new lending. The data show that they are involved in 66% of gross funding,
but directly account for barely 15% of new lending. Shadow banks,
therefore, increase the elasticity of the traditional banking system by
relaxing banks’ capital requirements, through,
say, selling loans externally to GSEs or internally to
off balance sheet vehicles, so boosting the credit multiplier.
[[ Meaning:
Here the official definition of shadow banks: Shadow banking is a term that is used to describe all financial
institutions that perform bank-like
transactions, but are not regulated by one. Some of these institutions that
make up shadow banking include mobile payment systems, pawnshops,
hedge funds, peer-to-peer lending sites.
(https://www.google.com/search?ei=rmQtXIGYAuug5wKHvYnIDA&q=Dictionary+of+Economics..) Any Dictionary of Econ said: A shadow bank
performs bank-like activities, but is not always regulated and insured like one.
.. Paul McCulley,
an American economist defined as: The shadow
banking system consists of many non-deposit-taking, & non-regulated intermediaries
that provide traditional banking-like services. However, they do so outside the
traditional system of regulated depository financial institutions. .. According to https://marketbusinessnews.com/ They are institutions that look like banks,
act like banks, but are not mainstream banks.
.. The shadow banking system
consists of securitization vehicles, money
market mutual funds, mortgage companies, investment
banks, asset-backed commercial paper (ABCP) conduits,
hedge funds, monoline insurance firms (that provide
guarantees to issuers), and markets for repurchase agreements (repos). See
Chart at: https://i0.wp.com/marketbusinessnews.com/wp-content/uploads/2015/08/Shadow-banking-system.jpg?resize=500%2C344&ssl=1
… According to the International
Monetary Fund (IMF): Shadow banking is huge. .. “Estimating
the size of the shadow banking system is particularly difficult because many of
its entities do not report to government regulators. The shadow banking system
appears to be largest in the United States, but nonbank credit intermediation
is present in other countries—and growing.”.. Bryan Noeth and Rajdeep Sengupta,
of the Federal Reserve Bank of St. Louis, wrote that the size of the shadow banking sector in the US reached nearly
$20 trillion in 2007, and shrank to about $15 trillion in 2007, making it “at
least as big as, if not bigger than, the traditional banking system.”.. In
China is particularly large: Forty
percent of the increase in total debt in China from 2008 to 2014 came from shadow bank lending. … The term ‘shadow banking’ may also refer to
the unregulated activities of regulated financial institutions such as credit
default swaps. … VIDEO: 5 facts about Shadow Banking at: https://youtu.be/hxxMIeO-cs0 ]]
…
Back to the art: why-has-global-liquidity-crashed-again?
This Is A Different
Crisis To 2007/08
Therefore, we suggest that, unlike the 2007/08 Crisis which was more
about a broken banking system involving the sudden collapse of leverage among
over-extended banks and shadow banks, the current
credit squeeze looks more like the 1997/98 Asian Crisis when Central Banks, led
by the US Fed, tightened the supply of primary liquidity and cross-border flows
rapidly retreated. This time around financial markets are probably even more
interconnected and more global. Consequently, this could be an Asian
Crisis-like sell-off, but one not only confined to Asia. This is shown in Figure 4, which
depicts the two moving-parts that explain fluctuations in total credit –
changes in the credit multiplier (black line) and growth in the monetary base
(orange line).
See Figure 4 Credit Multiplier
in World Central Banks
And
F.5 Shadow Monetary Base &
Cumulative Cross Border Flows to Emerging Markets
The Collapse of World Central Bank Money
In contrast, today’s monetary
problem is more about the other component, namely tight primary liquidity. This
has four dimensions:
- US Federal Reserve tightening
- Tightening by other major Central Bank (e.g. ECB and BoJ)
- USD Area tightening (e.g. Emerging Market Central Banks)
- Legislative onslaught against the Eurodollar/ off-shore wholesale markets
See Fig
6: Central Bank Balance Sheet Growth by
Major Regions
& F-7: Emerging Markets
Central Bank Liquidity Growth & Changes Forex Reserves
The fourth component of tightening is harder to pin-down because data is scarce.
However, we suggest that the offshore wholesale markets are under fire from the
US Federal Authorities, who seem keen to regain control of US dollar liquidity.
The
Eurodollar markets, which lie outside of US Fed or Treasury control, were a major factor behind the wayward shadow banking boom
ahead of the 2007/08 Crisis. There have been three moves made to regain
control: (1) the planned replacement of
(uncollateralised) LIBOR with the new secured SOFR on-shore money market
interest rate; (2) the 2018 tax amnesty that
facilitated the repatriation of off-shore US corporate deposits, and (3) the recent removal of the tax allowance for
interest payments on off-shore inter-bank loans. These
official directives should substantially reduce the future attractions of using
the Eurodollar markets. One way to show their impact is in Figure 8, which plots the
amount of net funding that US-based banks receive from international banks.
Since this represents dollar funding, the likely foreign sources are the
Eurodollar markets. Figure 8 highlights
the sizeable decline from the US$750 billion peak in 2015.
See charts:
See
Figure 8: Net US Borrowing from offshore Funding Markets
&
F-9: FED Fund Rate and “Real”
Term-Premia 10 Year US Treasury Monthly
Conclusion
We expect a major policy easing in 2019. However, only China’s PBoC (People’s Bank) among
the majors is so far easing monetary policy. We anyway see China as leading
this cycle. The US Fed is likely to follow given the scale of tightness in
domestic and Global Liquidity and this must involve greater liquidity
injections, rather than simply interest rate cuts. We have no view
whether this takes the formal shape of an explicit ‘QE4’ policy or if it
involves an unannounced increase in the size of the Fed’s balance sheet.
Whichever, the immediate
implications will be a yield curve steepening and
ultimately a weaker US dollar. Financial shares and Emerging Markets may prove
the main beneficiaries.
…
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US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
While it
will come as a surprise to no one, Congressional leaders were unable to strike
a deal to end the ongoing shutdown of the federal government, now in its 12th
day, at a meeting with Donald Trump on Wednesday, and the president invited
them to return to the White House on Friday for more negotiations.
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Too soon?
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'Mike Pence will be president by
the end of 2019'...
[[ Do you really think Trump & Pence will be
alive by the mid of 2019? With WW3 ticking up.. they may be the first victims
of war-mongerism.. The anti-war Mov have armed zealots too.]]
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Is this 'Freaky Friday'
politics, or has the left always
been pro-war?
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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
2018 was
marked by notable and sometimesalarming political,
military and security developments around the world...there are no more “safe havens” in today’s world.
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“Syria was
lost long ago. we’re not talking about vast wealth. We’re talking about sand
and death.”
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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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NOTICIAS
IN SPANISH
Lat Am search f alternatives to
neo-fascist regimes & terrorist imperial chaos
REBELION
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USA Luces David Brooks
Las guerras del US contra los débiles Manuel
Yepe
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ALAI NET
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RT EN ESPAÑOL
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Cual tiempo? El del impeachmt o el de negocios
sucios con Turk, ISR y Saudis
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INFORMATION
CLEARING HOUSE
Deep on the US political
crisis: neofascism & internal conflicts that favor WW3
US Rage for Endless Wars Threatens World
Peace in 2019 By Stephen
Lendman
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Worse than Obsolete: NATO Creates Enemies By John Laforge
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This Lie Called Democracy By Philip A Farruggio
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The World Known Is Fading Away By Paul Craig Roberts
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The Problem with Border "Security" By Joseph Nevins
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Justice for Julian Assange, Test of Western
Democracy By Nozomi Hayase
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COUNTER
PUNCH
Analysis on US Politics &
Geopolitics
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John
Perry The
True Nature of US Interventions
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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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