ND JAN 29 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
Econ
situation today:
Investors
clung to the positivity of The Dow today, ignoring the recessionary indications
from sentiment indicators, tumble in earnings expectations, Nasdaq slump, and
bod for safe-haven bonds and bullion... remember again "The Dow was
green... Don't forget the FOMC 'Drift'"...
US markets were very mixed with The Dow positively diverging from
Nasdaq at the cash open, then all tumbling together into the European close...
See
Chart:
The Dow desperately clung to green into the close as Small Caps,
S&P and Nasdaq all ended red...Trannies outperformed
See
Chart:
It appears for now that the squeeze has run out of ammo...
See
Chart:
Bonds were bid today safe-havens rallied on Nasdaq weakness.
Notably, the long-end continues to underperform...
See
Chart:
Credit spreads compressed today but VIX was flat...
For the second day in a row, the dollar trod water in a very narrow
range...
See
Chart:
And as The Fed prepares to tell us how everything is still awesome
BUT they want to be cautious - or some such bollocks - we note the Conference Board's expectations index has
crashed in the last 3 months by an amount that has always been associated with
recession...
See Chart:
And the spread
between current sentiment and expectations is the widest since
March 2001, the first month of the U.S. recession that year.
See Chart:
And Jeff
Gundlach agrees:
The most recessionary signal at present is consumer future
expectations relative to current conditions. It’s one of the worst readings
ever.
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"We suspect risk assets may react negatively to the lack of
balance-sheet guidance and contribute to a further flattening of the rates
curve."
Fed's
balance sheet, which after expanding for the better part of the past decade has
been shrinking at an "autopilot" pace of roughly
$36 billion per month ever since it hit its
"peak shrinkage" in Q4 of 2018...
See
Chart:
Actual
FED Redemptions ($BN)
The
market has already signaled to the Fed an expectation that it will need to
maintain a relatively abundant reserve regime and that the
unwind likely will not last beyond 2020 with around $1tn in reserves...
See
Charts:
To summarize: the Fed will likely be challenged
to deliver a sufficiently dovish message vs market expectations, which risks a
sharply negative reaction in stocks, a flatter rates curve and a risk off USD
reaction.
And in keeping with the reflexive nature of the market which has
rebounded sufficiently in recent weeks to push rate hike odds for 2019 back
into the green, and away from an expected rate cut...
See
Chart:
...
Nomura's Charlie McElligott provides yet another reason why the Fed may
disappoint markets tomorrow, and it has to do with the
ongoing "standoff" between markets and monetary policy:
As the
data stabilizes (which it is currently attempting now, with Citi U.S. Economic
Surprise Index pivoting back “positive” to+1 from -25 on Jan 3rd) or even
accelerates higher, we re-enter that "tighter financial conditions" negative
feedback loop, as the Fed is ultimately forced back-into the picture;
Conversely,
if the data were to again slow further from here, it confirms that “glass
half-empty” current investor view that “the best is behind us” and that we have
“overtightened ourselves into a slowdown”
Essentially, for the Fed to "get more dovish" at this
point - which also includes potentially conceding on balance sheet tapering
- it would require a major
downdraft in U.S. economic data or another market volatility spasm—which is NOT something that is
going to help the mood. BofA agrees with this, and notes that "a
broader decline in risk assets could also cause the Fed to reconsider its
balance-sheet plans, particularly if it believes that the balance sheet policy
is a culprit for market stress."
Stated
simply, for the Fed to be ready to announce a pause, or
end, to Quantitative Tightening, stocks have to tumble once again, just so they
can then be then rescued again by the Fed during the next
sharp market drop.
…
SOURCE: https://www.zerohedge.com/news/2019-01-29/fed-will-massively-disappoint-markets-tomorrow-heres-why
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"A remarkable 87% of all MSCI World stocks are up to
year-to-date" which would rank January as one of one of the best months
ever for positive stock performance; this leaves investors facing a difficult
dilemma...
See
Charts:
….
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"Central bankers still don’t understand bonds because they don’t do money. They
remain devoted to their outdated textbook. Don’t take my word for it, trust the curves inverted or not..."
It was
the most common catchphrase of 2017, interest rates have nowhere to go but up. Maybe it was doomed from the
start given that Alan Greenspan was among the more prominent commentators
expressing this view. In his mind, the bond market was in a bubble and the
party was already over.
Decoding curves is essential to framing
actual conditions, therefore the start of any rational analysis.
An excerpt from my presentation in Vancouver last weekend:
See
Chart:
A yield curve isn’t a single thing. It is a spectrum that coalesces
in competing directions, a bipolar mechanism for setting probabilities about
two very complex arrangements.
See
Chart:
In
academia, the Fed sets the money rate and then banks perform based on it. This is called maturity transformation, which simply means
that banks borrow funds short-term and lend them long-term. It is therefore
expected that short-term money rates...
See
Chart:
The interaction between the short end and long end is therefore not
always direct and immediate. The long end can and does interpret the conditions
of the short end independently of what has become mainstream convention.
See
Chart:
The short end of the UST curve is highly
influenced by the Federal Reserve’s monetary policies while the long end
clarifies those policies through the prism of risk/return.
A steep
yield curve, like the one picture here, is one that suggests a low rate,
accommodative monetary policy that is likely to work over time. This accounts
for the curve’s steepness. A flat and inverted curve is the opposite. Whatever monetary policy is being conducted, the long end is
interpreting that policy as well as other conditions as being highly suspect.
See
Chart:
When we
look back on the curve history through the middle 2000’s, we find these
competing dynamics in perfect practice. The Fed set the federal funds target,
one form of self-fulfilled monetary alternate at the short end, the 2-year US
Treasury yield more closely aligned with it, while the long end rates moved
independently from either of them.
What
sticks out is how no matter what happened during this period, the long end, in
this case represented by the benchmark 10-year yield, barely moved. The maestro
didn’t appear to have much if any influence, the curve flattening dramatically
before ultimately inverting.
See Chart:
US Treasury Yield Curve
Policymakers were all too ready to dismiss several years of this
contrary signal because in their view the world was getting better. That’s why
Greenspan was raising rates in the first place.
…
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US DOMESTIC POLITICS
Seudo
democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge
cambio
"This certification will help
Venezuela's legitimate government safeguard those assets for the
benefit of the Venezuelan people."
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"ISIS is intent on resurging and
still commands thousands of fighters."
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"We
have many young people in our country, and in the state of
Indiana, who do not know a lot of simple information on our
government and on our country and some of our history,"
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Washington state recently introduced bills for some of the strictest
gun laws in the country but they have some very important opponents: the sheriffs...
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US-WORLD ISSUES (Geo Econ,
Geo Pol & global Wars)
Global
depression is on…China, RU, Iran search for State socialis+K-, D rest in limbo
"The US government and its assorted client states have no business
whatsoever issuing orders and ultimatums decreeing that a
government of a sovereign nation must restructure itself, but here we are..."
My own
Australia has of course joined
the chorus of US lackeys who are refusing to recognize Venezuela’s
only legitimate and elected government,recognizing instead the
presidency of some guy named Juan who decided to name himself Venezuela’s
president with the blessing of the United States government.
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The "arm the moderate rebels"
campaign is off to a slow start...
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PDVSA's creditors already looking to
seize oil over unpaid bills...
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Similar abuses to VEN could happen to other
countries
Mexico is in
the midst of a crisis again...And no, it doesn’t have anything to do
with the border wall... Or the economy. Or murders and violence. Or drug
trafficking. Or bird flu.
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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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USA DEBATE IMPERIAL David Brooks
La “tienda” de Trump está en quiebra Patricio Montesinos
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ALAI NET
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RT EN ESPAÑOL
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INFORMATION CLEARING HOUSE
Deep on
the US political crisis: neofascism & internal conflicts that favor WW3
86% of Ven Oppose Military Intervention By Ben Norton
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‘5,000 troops to Colombia’: By Eli Rosenberg and Dan Lamothe
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US Sanctions Against
Ven Caus Econ and Humanit Crisis Must Read - By Staff
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Bernie and Dems Flunk
Trump’s Test On Ven’s Coup By
Shamus Cooke
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In Case You
Missed it
Why We're at War? Confessions of a USA Economic Hit Man By Sam Elfassy
Why We're at War? Confessions of a USA Economic Hit Man By Sam Elfassy
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Has the Arms Industry
Captured Trump’s Pentagon? By Mandy
S & William H
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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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