ND FEB 20 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
"Inflation-proxies are on the move", notes Nomura's
Charlie McElligott who posits that "something is happening" in US
equities, highlighting some notable shifts compared to 2018.
See
Chart
Value vs. Growth
See more INTERESTING
charts at:
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The
market's hopes that today's snow-delayed Fed minutes would resolve the debate
over the fate of the balance sheet unwind, were dashed with the Fed confirming
what traders already knew: the Fed would remain patient, data dependent,
focused on the fading inflation impulse, and would seek a plan for when the
Fed's balance sheet unwind end by the end of 2019 suggesting that the QT may
continue well into 2020 depending on what the Fed concludes is a "sufficient"
amount of bank reserves.
Following the ambivalent minutes, rate hike expectations were
broadly unchanged, with the Fed Funds still pricing in a rate cut in 2020 as
the divergence with the Fed's hawkish dots continues.
See
Chart:
Implied FED Funds target rate
As a result, stocks initially slumped, then rebounded, and traded
modestly in the green, with the nasdaq hugging the flatline, as banks, small
caps and energy stocks outperforming, offset by losses in homebuilders.
See
Chart:
Treasurys were mixed, with the long end taking on water and the
curve initially steepening led by 30Y yields higher, even as the short end and
10Ys were more or less flat for the day...
See
Chart:
Despite today's modest appetite, the scramble into safe havens
observed in late December remains a distant memory, and the short end continued
to trade about 10bps higher than Fed Funds.
See
Chart:
In commodities, WTI crude rose to 2019 highs, up roughly a dollar on
the day...
See
Chart:
helping to push 5Y breakevens similarly to 2019 highs...
See
Chart:
And so, with the Minutes coming and going, the critical 2,800 level
in the S&P remains untouched, with the broader index trading about 15
points away, and facing massive resistance to break out above what has now been
called a "quadruple top."
See
Chart:
When and how the S&P can breach this level remains a question
for another day after today's sleepy, snowy, stock drift.
…
SOURCE: https://www.zerohedge.com/news/2019-02-20/sleepy-stocks-drift-fed-minutes-fail-ignite-buying-boost
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Have the collective curves already sounded the alarm, but everyone
is too focused on a flat 2s/10s curve to hear it?
The
graph below plainly shows that when 2-year Treasury yields exceed 10-year
Treasury yields, otherwise known as “a curve inversion,” a recession has always
followed. Following the inflection point of the
inversion, as circled, the curve steepens through a recession and for some time
afterward.
See
Chart:
2S/
10S Yield Curve
For those of you that are stubborn and waiting on the curve to go to
zero to sound the recession warnings, we share the graph below, courtesy of
Crescat Capital LLC.
See
Chart:
% of
Invesion in US Yield Curve
The
graph looks at numerous yield curves and computes the percentage of them that
were inverted at various points of time. Note that about 40% of curves are
currently inverted. Have the
collective curves already sounded the alarm, but everyone is too focused on a
flat 2s/10s curve to hear it?
…
SOURCE:
https://www.zerohedge.com/news/2019-02-20/yesterdays-perfect-recession-warnings-may-be-failing-you
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Goldman now expects an announcement at the March meeting that runoff
will stop at the end of Q3.
See
Chart:
Blocked
….
Finally
the punchline: according to Goldman, the Fed will end its balance sheet unwind
before the end of the year, long before primary dealers and the buy side had
expected (which according to the majority, was some
time in 2020).
See
Charts:
Survey
responses suggest unwind will need to
end in 20th
…
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Did Bloomberg just make a big mistake in its snap take on the Fed
minutes?
READ
THIS:
Key
highlights from a Plan proposal: Focus in 5 issues
1- DOWNSIDE RISKS HAD INCREASED
2 CONTINUED SUSTAINED EXPANSION
3 HOUSEHOLD DATA HAVE BEEN STRONG
4 STRONG LABOR MARKET, INFLATION NEAR TARGET
5 BUSINESS INVESTMENT HAD MODERATED
On the increase in "downside risks": "the decline in
inflation compensation might reflect in large part declines in risk
premiums or increased concerns about downside risks to the outlook for
inflation. This interpretation was seen as consistent with the behavior of
the most recent survey-based measures of expected inflation, which were
little changed."
On inflation expectations,
the Fed appears to be turning more dovish; in fact according to the last
bullet, the Fed may finally be realizing that Japanification is coming:"many participants commented that upward pressures on inflation appeared to be more muted than they appeared to
be last year despite strengthening
labor market conditions and rising input costs for some industries."The upside risk that inflation could
increase more than expected in an economy that was projected to move
further above its potential was
counterbalanced by the downside risk that longer-term inflation
expectations may be lower than was assumed in the staff forecast, as well
as the possibility that the dollar could appreciate if foreign economic
conditions deteriorated."
"In
their discussion of indicators of inflation expectations, participants
noted that market-based measures of inflation compensation had moved lower
in recent months. Participants expressed a range of views in interpreting
the decline in inflation compensation. On the one hand, that decline could
stem from a decrease in expected inflation on the part of market
participants. In that case, the current low levels of
inflation compensation could suggest that inflation expectations are below
the Committee's 2 percent inflation objective."
"A few participants expressed concern that
longer-run inflation expectations may be lower than levels consistent with
the Committee's 2 percent inflation objective. Several participants
judged that risks that could lead to higher-than-expected inflation had
diminished relative to downside risks. The potential that various sources
of uncertainty might abate more quickly than expected was mentioned as a
potential upside risk for the economic outlook."
On the market's influence over the Fed: FOMC communications were reportedly perceived by market participants
as not fully appreciating the implications of tighter financial
conditions and softening global data over recent months for the U.S.
economic outlook
Market
participants pointed
to a number of factors as contributing to the heightened volatility and
sustained declines in risk asset prices and interest rates over recent
months including a weaker outlook and greater uncertainties for foreign
economies (particularly for Europe and China), perceptions of greater
policy risks, and the partial shutdown of the federal government.
Market
participants appeared
to interpret FOMC communications at the time of the December meeting as
not fully appreciating the tightening of financial conditions and the
associated downside risks to the U.S. economic outlook that had emerged
since the fall.
Participants agreed that it
was important to continue to monitor financial market developments and
assess the implications of these developments for the economic outlook.
On the key issue of balance sheet reduction:
- Consistent with recent communications that the FOMC would be flexible in its approach to balance sheet normalization, the survey results also suggested that the respondents anticipated that the Committee would slow the balance sheet runoff in scenarios that involved a reduction in the target range for the federal funds rate.
- Some market reports suggested that investors perceived the FOMC to be insufficiently flexible in its approach to adjusting the path for the federal funds rate or the process for balance sheet normalization participants raised a number of questions about market reports that the Federal Reserve's balance sheet runoff and associated "quantitative tightening" had been an important factor contributing to the selloff in equity markets in the closing months of last year
- some other investors reportedly held firmly to the belief that the runoff of the Federal Reserve's securities holdings was a factor putting significant downward pressure on risky asset prices, and the investment decisions of these investors, particularly in thin market conditions around the year-end, might have had an outsized effect on market prices for a time
On the Fed balance sheet's composition in the future, the Fed appears willing to
shift its MBS holdings to zero:
- "Participants commented that, in light of the Committee's longstanding plan to hold primarily Treasury securities in the long run, it would be appropriate once asset redemptions end to reinvest most, if not all, principal payments received from agency MBS in Treasury securities"
On the dot plot:
- “A few participants expressed concerns that in the current environment of increased uncertainty, the policy rate projections prepared as part of the Summary of Economic Projections (SEP) do not accurately convey the Committee's policy outlook. These participants were concerned that, although the individual participants' projections for the federal funds rate in the SEP reflect their individual views of the appropriate path for the policy rate conditional on the evolution of the economic outlook, at times the public had misinterpreted the median or central tendency of those projections as representing the consensus view of the Committee or as suggesting that policy was on a preset course.”
- “However, some other participants noted that the policy rate projections in the SEP are a valuable component of the overall information provided about the monetary policy outlook.”
And the one section that the market will be mostly focused on: the
Fed is actively contemplating ending QT in the second half: "the staff presented options for substantially slowing
the decline in reserves by ending the reduction in asset holdings at some
point over the latter half of this year and thereafter holding the
size of the SOMA portfolio roughly constant for a time so that the average
level of reserves would fall at a very gradual pace reflecting the trend
growth in other Federal Reserve liabilities."
And this:
- Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year
Amusingly,
as Bloomberg economics analyst Ben Baris notes, there was a discussion on the
efficacy of the SEP projections, and whether they are conveying a useful
message to the public. Some
participants were concerned that the point estimates were being misinterpreted
as committee members' consensus view on the appropriate policy path -- they are
not. The projections look to be caught up
in the larger discussion of appropriate communication strategies as we hover
near the neutral rate.
….
….
See the full plan and debate at this source:
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Just like in 2016, the Fed shocked markets by its recent dovish
reversal. But - like in 2016 - what can force the Fed to kickstart rate hikes
again, and how will it communicate this decision to the markets? Here are the three key things to watch for.
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US DOMESTIC POLITICS
Seudo
democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge
cambio
And Bernie's donors aren't "millionaihs and billionaihs."
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The bill will raise the state minimum wage incrementally to $9.25 on
Jan. 1, 2020, then to $10 an hour the following July, and it will continue to
increase by $1 a year until 2025...
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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
FACT IS that we are using US military planes to deliver guns and mercenaries to create violent chaos inside
VEN. Of course VEN Gvt will defend their
sovereignity We Americans are responsible for
whatever happens in VEN ]]
...the opposition would have to pass over "our dead bodies" to
impose a new government...
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China's Foreign Minister said Wednesday
said that China "doesn't engage in competitive currency devaluation"
and reportedly hopes that the US doesn't politicize exchange-rate issues.
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Beijing has poured cold water over expectations of an imminent trade
deal, saying on Wednesday that China will not allow the use of the yuan’s
exchange rate as a bargaining chip to resolve the trade war with the United
States.
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"If the US imposes more tariffs on Chinese products while China
responds with fiercer countermeasures, it would be a catastrophic strike to
global stock markets."
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SPUTNIK and RT SHOWS
GEO-POL
n GEO-ECO ..Focus on neoliberal
expansion via wars & danger of WW3
RELATED:
…
Since US missiles are already surrounding RU & China, as reported in RT, then Tit x Tat
proceeds. The US is creating in VEN the same type
of Nuke apocalypse of 1962 in Cuba. RU
must use the possible US attack on Ven not only to stop US mercenaries’
intervention, but to wipe out all US-NATO
threats to RU-China & to the
whole world PEACE. It is now or never. If RU allows this attack, the
US-NATO will continue doing so &
worse. Now is the time to stop them. IF RU-China don’t
do it, they will be seen as world traitors. “Eres
libre de quedarte en la trinchera y sentarte sobre la bayoneta del fusil, pero si
te veo hacerlo, tu caso no va a una Corte Marcial, seré yo quien te fusile, le
dijo un capitan Bonapartista a un soldado traidor. En buena hora lo dicho: los dos
enfrentaron al enemigo y vencieron”. From: ‘Anécdotas Bonapartistas’. von
Clausewitz
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RELATED:
another BOL.shit
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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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Que
hacer en repudio al Imp en tu país?: Piénsalo, Organiza y actúa
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Que
hacer en repudio al Imp en tu país?: Piénsalo, Organiza y actúa
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Españ España acaba donde empieza el rey Miguel Pastrana
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ALAI ORG
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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
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Mapping the American War on Terror By Stephanie Savell
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Venezuela Under Washington’s Gun By Paul Craig Roberts
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Venezuela and the Left By Gabriel Hetland
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Trump’s Demagoguery Goes Off the Rails By Finian Cunningham
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A step towards presidential dictatorship By Patrick Martin
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Women’s Critical Role in Saving the
Environment By Cesar Chelala
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COUNTER PUNCH
Analysis
on US Politics & Geopolitics
Dean Baker Modern
Monetary Theory and Taxing the Rich
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Michael T. Klare War
With China? It’s Already Under Way
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Norman Solomon What
the Bernie Sanders 2020 Campaign Means for Progressives
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Matthew Johnson Why
Protest Trump When We Can Impeach Him?
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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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