ND JAN 18 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
World Context:
The last three cycles all ended when the leading indicator dropped
to where it is now
See Chart:
OECD Total: Total Leading
Indicators
What the chart clearly shows is that the last three cycles all ended
when the leading indicator dropped to where it is now (even though there have also been two
false signals in that timeframe—during the Asian crisis in 1998, and during the
Euro crisis in 2012).
Morgan Stanley showed the following
chart which confirms that every
time M1 has dipped negative - as central bank liquidity injection either slowed
or went into reverse - there has been a financial crisis: whether the 2015 EM and
Manufacturing Commodity Recession, the Sovereign Debt Crisis of 2011, the
Global Financial Crisis and US Housing bubble burst of 2007/2008, the Tech
Bubble burst of 2000 and so on.
See Chart:
So the question what happens next,
will have to be answered by policymakers who have no choice but to try and push
higher the blue line in the chart above. In other words, the fate of this cycle will be determined by how policymakers
now respond, and how markets and consumer/business sentiment hold up in coming
weeks.
And since it
is all up to central banks once again to boost liquidity, something they
won't be doing during the current QT phase unless
something drastically changes over the next 12 months...
See Chart:
Quantitative Tightening increasingly
last year’s theme
... the above charts confirm that the key variable for the global economy is not whether the
Fed stops hiking or starts cutting rates (although any further rate
hikes will surely have an adverse impact on global liquidity), but whether the Fed - and other central banks - pause their
balance sheet shrinkage, and once again start actively injecting liquidity into
the global system, or soon enough we will be
looking for the best description of "[insert here] crisis of
2019." [
recession crisis of 2019 ]
….
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"... if this is going to continue, we would test lower at some point and
hold. That’s how great-looking charts get created."
With stocks set for their
4th weekly gain in a row - despite tumbling earnings expectations and macro
data...
See Chart: US MACRO SURPRISE
Questions remain as to what
(or who) is behind this extreme rebound...
See Chart:
Globlal Central Banks Balance Sheet
In
a world where we are told there is no inflation, the Bloomberg Commodity Index
has been trading like a champ. In classic January fashion it made the YTD low
on the first trading day and hasn’t looked back. A nice 6% move with no pain
and a lot of gain. Both WTI and copper have done the easy work and now it
becomes really interesting. What happens from right here will do a lot to
influence narratives about the global economy.
See Chart:
Three
weeks into the year and the trading landscape has been evolving quickly. Mostly,
it’s fair to say, toward the optimistic. Or maybe the
bears are just all twisted around with badly located positions. Forget
narratives and intuition. The flows have been telling you everything you need to have known. Or at
least the Fed has.
…
SOURCE: https://www.zerohedge.com/news/2019-01-18/gift-keeps-giving-trader-warns-market-gains-just-too-easy
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The ebbs and flows of “labor shortage”
citations are Federal Reserve officials
becoming desperate trying to talk themselves into what they only hope could be
the real case...
Guess which
interpretation ended up being more accurate?
THIS?:
Labor
Shortage Fed Res Beige Book
See
Chart:
OR
THIS:
The FOMC
models trimmed the inflation forecasts even this late in the year and the final
Beige Book for 2018 cited “labor shortage” fewer than half the
number of times as in September.
See Chart
Labor Shortage Fed Res Beige Book
PCE Deflator; Central Tendency
FACTS:
Minnesota
businesses are so desperate to find enough workers they refuse to pay the
market-clearing wage to obtain them? If you are confused, like Jay Powell,
don’t be. The unemployment rate isn’t an accurate
measure of the economy.
Even if there was a labor shortage,
businesses that can’t afford to pay for workers to clear it up indicate
collectively the economy really isn’t doing all that well to begin with. In an actually booming economy, a labor shortage would never
happen – wages would easily adjust to clear the market. Business and the
profit outlook would be genuinely positive, so any firm would more easily
balance higher input costs to book growing opportunities.
If
they don’t, the outlook is not genuinely positive so how can
the economy be booming?
The ebbs and flows of “labor
shortage” citations are Federal Reserve officials
becoming desperate trying to talk themselves into what they only hope could be
the real case, and then
disappointed when it turns out, again, it isn’t. Full circle, we are back toward “isn’t.”
See Chart:
US TREASURY YIELD CURVE
It
may be a lagging indication, but it’s still an indication and one actually more
consistent with the curves.
…
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Most investors – except algo players – now seem to be wary of the
future “pitfalls” of such a machine-led stock rebound because of past
experiences, are maintaining a conservative approach at present.
US economic SURPRISE
INDEX (which is missing a lot of recent
components) which Nomura views as one of the most important indicators in
gauging the sustainability of the current market rally, improved to -3
yesterday (although it tipped back down to -6.90 after today's big miss in the
UMich Sentiment) which more importantly was followed by
a gradual increase in overall exposure
to US equity markets by hedge funds.
See Chart:
Citi US Eco Surprise In dex
Indeed, this stacked waterfall effect
of investors following other bullish investors into risk assets, which some
call simply FOMO, is what Nomura defines as the "histeresis
effect" on hedge fund behavior, and is as follows:
- Trend-followers' systemic buying pushes US stocks up
- Other hedge fund start to buy the market, chasing CTAs buying programs
- As buying pressure gets "overheated", upward momentum of the market becomes unstable
- US market sharply drops as such crowded long become rapidly liquidated.
This is shown schematically
in the chart below:
See Chart:
CTA S&P500 futures position and
oveall HFs’ exposure to US equity
What is surprising, according to the
Japanese bank, is that a recovery in sentiment into
positive territory (i.e., risk-seeking phase) "appears
so close yet so far away." Specifically, unlike CTAs and other
systematic funds, many US equity investors - especially macro hedge funds and
risk parity funds - remain
hesitant to impatiently begin following an equity market rally that is not sufficiently
justified in the context of fundamentals.
Going back to the "histeresis
example", Takada notes that we
experienced a similar situation in which algo investors, mainly in
trend-following programs, led the significant upturn of the market last January,
March and September. What happened next is that other investors –
including major hedge funds – rushed to jump in the stock market uptrend.. before subsequently
experiencing sharp drops.
So going
back to the question we asked in the headline, why do investors - or rather
human investors - refuse to buy into this rally, the reason according to Nomura
is that most investors – except algo players – now seem
to be wary of the future “pitfalls” of such a machine-led stock rebound because
of past experiences, are maintaining a conservative approach at present.
What this means, somewhat ironically,
is that while everyone was blaming the algos for the
December meltdown, even though nobody has "accused" the algos of
creating the ongoing meltup, investors and traders know very well that
the move higher is not organic, but is purely the
result of systematic -algo and various other quant traders- forcibly buying as a result of key technical market levels
being hit. Unfortunately for the few humans left trading stocks, this is not a buying signal, which likely means that
just like in January of 2018 when retail investors finally capitulate and
rushed into stocks just ahead of the February 2018 correction, so this time too it is likely that the algos will keep buying until everyone else jumps into the pool...
at that point the market will once
again take the elevator down.
[[ in tramposos epoch whatever Econ move done by
big billonaries affect small 'babosos' below ]]
…
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After
surging 200k b/d in the last week to a
new record for US crude production, Baker Hughes reports that the US oil rig count has plunged by 21 in the
last week - the biggest drop since Feb 2016.
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US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
Sen. Lindsey Graham had visited the restaurant on a trip in July
while wearing no body armor.
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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
"Modern Monetary Theory – which is neither modern nor a theory – makes us
feel better about all the bad stuff
we’ve done with money and debt for the political efficacy of Team Elite...And
all the bad stuff we’re going to do."
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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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Crisis global del capital bajo la
égida US y UE Diego Olivera
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Pablo
Beltrán: “El Gob está dedicado a hacer trizas la paz”
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Nuevo escenario de confrontac
internac? Carlos Carcione
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ALAI NET
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RT EN ESPAÑOL
Esta no sería la 1ra
vez que el asesino acusa a sus victimas. Ocurrió en Perú
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Vamos a ejecutar 300 Mill con el WW3 y los duenios del aparato bélico no
sient nada
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El Zoom Brexit: ¿Ser o no ser?
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INFORMATION CLEARING HOUSE
Deep on the US political crisis:
neofascism & internal conflicts that favor WW3
A Convenient Killing of US Troops in Syria
Who benefit? By
Finian Cunningham
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Let's Expose Congress Members for the
Warhawks They Are By Danny
Sjursen
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U.S. Has Its Gunsights on Venezuela By Vijay Prashad
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COUNTER PUNCH
Analysis on US Politics &
Geopolitics
Melvin Goodman Star
Wars Revisited: One More Nightmare From Trump
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Louisa Willcox Sky
Bears, Earth Bears: Finding and Losing True North
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Robert Fantina Pompeo,
the U.S. and Iran
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S Early - S Gordon Trump’s
VA Secretary Denounces ‘Veteran as Victim’ Stereotyping
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Dave Lindorff Shut
Down the War Machine!
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Paul Edwards War Whores
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that
leads to more business-wars from US-NATO
allies
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DEMOCRACY NOW
Amy Goodman’s team
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PRESS TV
Resume of Global News described by
Iranian observers..
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