ND FEB 24 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 only thing that’s “well anchored” is
the stupidity of the belief that inflation
expectations matter...
The amount of sheer nonsense written about inflation
expectations is staggering.
Let’s
take a look at some recent articles before making a mockery of them with a
single picture.
See Graft:
CPI Percentage Weights
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"...markets have gotten way ahead of the underlying fundamentals..."
Last
weekend, we discussed the two things driving the markets currently:
The
first is the Fed.
As we discussed
with our RIA PRO
subscribers (use code PRO30 for a 30-day free trial) last week,
“Today,
[Cleveland Fed Reserve Governor Loretta Mester] all but put the kibosh on
further rate hikes and, per Mester’s comments, will end balance sheet reduction
(QT) in the months ahead.”
The
second is “hope.”
On Friday, on
headlines that talks are continuing with China, the market pushed through those
resistance levels as shown below. “
See Chart:
Not Stuck in the Middle
It is EXACTLY the same story this
week.
- The release of the Fed minutes showed a broad consensus by the Fed to end “Quantitative Tightening” or “QT” by the end of 2019 as well as a removal of any effort to normalize the Fed’s balance sheet.
- The markets rallied on continued hopes of a resolution to the ongoing trade dispute between China and the U.S.
However,
the Fed’s actions should actually make you question the significance of any
resolution on trade.
“Why do you say that? Everyone knows the trade dispute was a big
factor in the sell-off last year?”
Maybe.
But, if
that was indeed the case, then the economic turmoil should be primarily tied
between the U.S. and China. However, as I
discussed in “The
‘There Is No Recession In Sight’ Chartbook,” the economic disintegration has gone global.
See
Chart 1:
South Korea Imports change from Previous year
See
Chart2:
The negative surprise in Q4 so far is…
And as David Rosenberg noted:
The Citi Global Economic Surprise index, at -21.6, is nearly the
same as it was at the Dec 24th market low. It's now 227 days below zero -- only
exceeded by the Great Recession of 2008-09. Markets totally devoid of economic
realities.
See
Chart at:
https://www.zerohedge.com/news/2019-02-24/bulls-charge-ahead-economic-slowdown
In other
words, there is more going on globally which has very little, if anything, to
do with U.S. trade wars with China.
Which
brings us back to the Fed.
“Participants supported the removal of
the hiking bias and its replacement with a sentence emphasizing a ‘patient and
flexible approach.’ Participants pointed
to tighter financial conditions, softer inflation, slower foreign growth, and
trade policy uncertainty as justifying a patient approach to policy. However,
a range of views were expressed on what adjustments to the funds rate may be
appropriate later this year. ‘Several’ participants argued rates increases were
necessary ‘only if’ inflation was higher than in their baseline, but ‘several’
other participants indicated that hikes would be appropriate if the economy
evolved as they expected. In addition, ‘many participants noted that if
‘uncertainty abated,’ the FOMC could alter the ‘patient’ statement language.”
Why the
sudden switch from “hawkish” to “dovish?”
Was it just the market correction that sent Jerome Powell scurrying for cover,
or, despite still optimistic views on U.S. economic data, is there more to the
story than they are currently saying.
If such is the case, then the recent rally
in the markets may NOT be justified and further deterioration in forward
earnings may become more problematic. This is particularly the case as
valuations have quickly reverted back to near 30x earnings.
The bull
charge into an economic slowdown is not a trivial matter.
Historically,
it is the point where Fed has stopped their monetary policy interventions that
things have gone wrong.
See Chart:
Effective FED Funs Rate vs. S&P500
But that
is not necessarily a bad thing. As we discussed with our Pro-Subscribers last
week, this is where opportunity also lives:
“Those who see that the last 10-years of
experimental stimulus has been on par with, or arguably exceeded, policies
historically reserved for major wars gain a unique and valuable perspective of
the current monetary mirage. The
demise of those policies, as they are bound to unravel, will reveal a multitude
of investment opportunities left behind in the ill-advised euphoria of
anti-capitalism.”
There
is nothing wrong with “hoping” for a
positive outcome from “trade talks.” We should
be hoping for that. The
problem is the rush to “buy” equities has effectively “priced in” the
best of all possible outcomes which suggests any resolution could be
disappointing.
The Technical Backdrop Is No Longer
Optimal
Continue reading
What To Expect Next
Continue reading
This
analysis also corresponds to the extremely rapid reversion of both technical
and sentiment measures, as well as the level of short-interest in the market
which has now fallen to levels not seen since 2008.
See Chart courtesy of Zero
Hedge
S&P 500 short Interest is lowest since 2007
As of Jan 31, 2019
Let me
reiterate from last week:
“The important
point here is that from a contrarian standpoint, markets have gotten way ahead
of the underlying fundamentals. While the market may indeed end the
year on a higher note, it will most likely not do that without lower prices
first.”
While
our portfolios remain primarily long -biased currently, we are holding a higher
level than normal of cash and have added small levels of “hedges” to
portfolios which we will begin building into as the market reverses.
Statements like these are always
misinterpreted to mean that we are “bearish,” hiding in cash,
and have 6-cases of spam and a carton of Twinkies sitting on our desk.
Our job
as investors, and portfolio managers, is to navigate the market capitalizing on
opportunity when they are available, and preserving capital when risks exceed
our thresholds.
Currently, risk exceeds our
threshold.
….
Read the
full article at:
…
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US DOMESTIC POLITICS
Seudo
democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge
cambio
WE'RE
LIVING IN 'THE GROUNDHOG SHOW' MUST READ!
...in which our leaders make the same mistakes over &
over...
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"The terms ‘gang association’ or ‘gang membership’ have become
a form of criminalizing mostly young
people of color"
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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
"@SecPompeo and their assassins are desperate to fabricate a pretext for war."
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It is a
request of US military attack en VEN
Opposit leader seeks outside help for "the liber of our
homeland"
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President Maduro addressed the nation on state-owned TV
urging his supporters to revolt if he is harmed and telling Trump
"Yankee, go home!"
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SPUTNIK and RT SHOWS
GEO-POL
n GEO-ECO ..Focus on neoliberal
expansion via wars & danger of WW3
Lo que necesita el SUR es la liberación del neo-nazi
Bolsonaro en BRA.
RELATED
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Tendria que sacar de la carcel a su padre por juicios
pendientes que viene acumul
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NOTICIAS IN SPANISH
Lat Am
search f alternatives to neo-fascist regimes & terrorist imperial chaos
VIENTO
SUR
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RT EN ESPAÑOL
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Keiser Report "El bitcóin es como oro
sintético, nuevo oro o oro 2.0"
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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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