miércoles, 20 de marzo de 2019

ND MAR 20 19 SIT EC y POL



ND MAR 20  19  SIT EC y POL 
ND denounce Global-neoliberal debacle y propone State-Social + Capit-compet in Eco


ZERO HEDGE  ECONOMICS
Neoliberal globalization is over. Financiers know it, they documented with graphics

Are you not entertained: Enjoy this US ECON SITUATION TODAY
We don’t need WW3  to take Trump out.. We need a Nation in streets demand resigna IF Trump doesn’t  resign & use Fascist violence: REV is the solution. No more fake Dem Que se vayan todos!  The financial parasites in Wall St must be jailed & confiscated.
Why he should leave: Autorit-fascism, Inefic & lies, War crimes & crimes agst humanity
This is what it looks like when doves cry...Watch later  https://youtu.be/UG3VcCAlUgE
The Fed folded entirely to the market today, slashing its rate trajectory dramatically lower nearer the market's implied dovishness...
See Chart:
Implied Fed Funds Target Rate

Bloomberg's Ye Xie noted that if we take the dot plot at face value (which, mind you, may not be a wise thing to do), then it seems the Fed will hold rates steady this year before raising one more time in 2020. If that pans out, it would be unprecedented. Since the 1970s, there have been three times when the Fed held rates steady for more than a year after raising them in the previous three months: 2006, 2000 and 1997. Invariably, the next move was a rate cut.
However, the market has shifted even more dovish, pricing in almost an entire rate-cut in 2019 now...
See  Chart:

Stocks initially surged on the dovish surprise, dragging the Dow green, but as the last hour went on, traders wondered just how much fear The Fed must be feeling about growth to take such a machete to its rate forecasts and started to sell stocks...
See Chart:

Only Nasdaq managed to cling to gains on the day...
See Chart:

TICK gives us a sense of the flow as programs charged in long as The Fed statement hit but sellers dominated the last hour... (NOTE the drop earlier in the day when Trump commented on China tariffs)
See Chart:

Regional Banks were battered...

S&P Buyback-related stocks pumped-and-dumped after The Fed...

The Dollar Index crashed to its lowest since early Feb - perfectly back to the Jan FOMC meeting levels...
See Chart:

And finally, one wonders at the irony of a massively dovish Fed's action driving the yield curve to collapse sparking the highest recession risk of the cycle...
See Chart:
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Despite doubling down on dovish, things today did not pan out quite as Powell had expected...
Looking ahead, while the overall Fed portfolio will be flat after September, the Fed should be buying roughly $45bn per quarter to offset the liquidation of MBS. Annualized, the Fed should be a net buyer of about $180bn per year of Treasury securities. If the Treasury is financing $1.0tn deficits annually, purchases by the Fed become a meaningful source of funding, which according to Socgen "will enhance its ability to offer fiscal stimulus when or if a slowdown takes place."
See Chart:
FED expected to be net buyer of Treasuries by late 2019

Does the Fed know something Others don't?
The policy prescription is therefore for the Fed to hold policy and be "patient" for inflation to move up. This also means that the only gating factor for a reversal to a more hawkish Fed will be a jump in inflation, something Morgan Stanley expects will take place in late 2019 and early 2020, at which point the Fed will resume hiking an additional three times in 2020.
See Chart:
Exhibit 1: Outlook of GDP Growth
Exhibit 2: Outlook for Inflation:  2019 and 2020

The Fed also tweaked its projection forecasts, looking for weaker growth this year and next and a slightly higher unemployment rate. The forecast for inflation did not change as the Fed looks for core PCE to hold at 2.0% through the forecast horizon. This shows that the Fed believes that the Phillips Curve is flat, penciling in no inflation response despite the unemployment rate persistently sub-NAIRU and easy monetary policy.
See Chart:
As Powell said, the key tools for managing financial stability are "regulatory" rather than rates. How regulation will bail out the financial system once this current bubble pops, remains unclear.
Market implications
Since this was an unexpectedly dovish statement, the reaction was abrupt and violent: the rates market viewed Fed communications, especially through the SEP fed funds projections, as signaling a very dovish stance by the FOMC. This was manifest in the rates market rallying sharply following the release of the SEP led by the front end given the expectation the Fed will not hike rates any time in the near future. In fact, the yield curve is now inverted between the effective Fed Funds rate (2.40%) all the way to the 5 Year.
See Chart:
Effective FED Funds Rate

What is surprising, is that despite the Fed's express desire to increase future growth and potentially allow the economy/inflation to run hot, the 10Y yield also tumbled, as the bond market is now growing concerned the Fed committed another policy error, with a curve inversion once again imminent.
Finally, and perhaps related to this, was the surprise reaction in stocks: after initially spiking higher, as risks always does when the Fed surprises dovishly, the market then sold off, and while the drop wasn't substantial, the fact that the day's biggest sell program hit at precisely 3:30pm and pulled stocks sharply lower, indicates that at least one player decided that - for one reason or another - the top was in. Whether that has to do with the recurrent concern of "what does the Fed know about the economy if it is doubling down on dovish", and is signaling an imminent recession, or because of growing conviction that the Fed is now powerless and has committed a policy error will be revealed in due time.
See Chart:
Emini

However, the most disturbing feature of today's late-day selloff, is that after the aggressive seller emerged, not only major investor had the conviction to reverse the late-day drop in what appears to have been a major hit to the "dovish Fed is bullish" narrative.
If today's late day swing lower is not reversed tomorrow now that traders have had time to digest the FOMC decision, it will be a concerning indication that all the market upside that can be extracted from monetary policy has now been priced in, and would suggest that another retest of the December lows would be required to force Powell to commence rate cuts or even launch QE4.
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Huge dovish surprise as Fed folds - seesno rate-hikes in 2019, one rate-hike in 2020, and will end balance sheet normalization in September.
Summary:
  • Fed leaves rates unchanged, says economic growth has slowed form Q4, even as labor market still strong, job gains solid
  • As expected, the Fed will taper its balance-sheet rolloff, sees it ending by the of September
  • Fed signals no rate hike this year with one increase in 2020
    • 11 officials for zero 2019 hikes, four for one hike
  • Fed says median funds rate 2.4% in 2019, 2.6% in 2020-2021
  • But, the median estimate for the neutral funds rate remains unchanged at 2.8%
The Fed has some 'splaining to do. The market is pricing in 16bps of rate-cuts in 2019 while they are forecasting - at last call - 2 rate-hikes...
See Chart:
Implied Fed Funds Target rate

One of the big issues the Fed's wrestling with is what constitutes neutral, and while there's a lot of false precision in the r* framework, by one popular measure the funds rate is already bang on neutral. Bloomberg notes that if we compare the real policy rate (deflated by the core PCE price index) with the Laubach-Williams estimate of the real neutral rate, we find a perfect match.
See Chart:
AS Neutral as it Gets?

And furthermore, 10Y yields have been glued to the Fed's long-term dot-plot rate forecast since the start of 2018...
See Chart:
FED Long Term Dot  vs. 10Y UST Yield

Expectations are that the FOMC will maintain its more dovish "patient" stance and shift from two hikes to one (zero would likely scare the markets) in 2019. Currently, there is a 73% chance that the Fed doesn't hike in 2019. This will be evident in the SEP with a lowered inflation and growth outlook. As of December, the Fed was anticipating 2.3% growth in 2019 and 2.0% in 2020.
The focus is going to be entirely on their dot plot and whether or not the Fed has taken any chance of a rate hike out of their own internal forecast,” said Lara Rhame, chief U.S. economist at FS Investments, which manages $24 billion.
It’s going to be interesting to see if any of the Fed has priced in a rate cut, which I doubt they have, and then how many are thinking they may still need to adjust rates higher once or twice more throughout the year -- because I think it’s been a little premature for the market to discount any rate hike.”
And, along with when to stop shrinking its asset portfolio, the Fed faces another decision - what mix of Treasurys it holds, with implications for the economy.
Of course, The Fed's biggest issue is being perceived as dovish enough - the rates market is priced for 16bps of cuts... and how dovish is too dovish (what does Powell know that we don't?) and too hawkish risks a violent repricing in bonds and stocks which are expecting the Fed to be patient, data-dependent and on hold.
See Chart:

So what did the Fed do today to bridge the gap between their hawkish, optimistic forecasts for growth and their pessimistic narrative for rate trajectories. Well, Jay Powell went full dovetard:
  • *FED LEAVES RATES UNCHANGED, SAYS ECONOMIC GROWTH HAS SLOWED
  • *FED SIGNALS NO RATE HIKE THIS YEAR WITH ONE INCREASE IN 2020
As expected, Fed officials reaffirmed their commitment to being “patient” on future rate moves, while downgrading their assessment of the U.S. economy. They left the fed funds rate target at 2.25%-2.50% and kept much of the statement relatively unchanged since January.
  • ECONOMY: Policy makers now say economic activity has slowed from a solid rate in 4Q, say labor market remains strong; job gains still seen as strong on average amid low unemployment rate. Recent indicators point to "slower growth of household spending and business fixed investment in 1Q."
  • GUIDANCE: Federal Open Market Committee still sees a sustained economic expansion, strong labor market conditions, and inflation near 2% objective as the most likely outcomes; will be “patient” in determining what rate moves may be appropriate, given global economic and financial developments and “muted” inflation pressures
  • RISKS: Fed makes no reference to balance of risks
  • INFLATION: Now says overall inflation on a 12-month basis has declined, largely due to lower energy prices, while core gauge remains close to 2 percent; now says market-based measures of inflation compensation have remained low in recent months; continues to see survey-based measures of longer-term inflation expectations as little changed
  • VOTE: The decision was unanimous
On the balance sheet, the Fed provided more specificity and detail than most had expected. The Fed announced that they would:
  • End the securities portfolio unwind at end Sept '19.
  • Taper the Treasury unwind by reducing the cap on monthly redemptions from the current level of $30 billion to $15 billion beginning in May '19.
  • Reinvest maturing MBS across the UST curve, not towards the front end as some expected.
  • Cap MBS redemptions at $20 bn/month, which would limit impact of a large pre-pay wave.
  • Prepayments above this amount would be reinvested into MBS.
  • Hold their aggregate securities holdings constant for a time and allow for a continued shrinking of reserves via non-reserve liability growth (i.e. currency in circulation).
Looking at the dots, the median assessment of appropriate pace of policy was slashed as the Fed's "dots" lose all credibility:
  • 2019 2.375% (range 2.375% to 2.875%); prior 2.875%
  • 2020 2.625% (range 2.375% to 3.375%); prior 3.125%
  • 2021 2.625% (range 2.375% to 3.625%); prior 3.125%
  • Longer Run 2.75% (range 2.500% to 3.500%); prior 2.75%
Compare December vs March:
See Charts:
December dots  vs.  March dots

And simplified:
See Chart:
Implied  Fed Funds Target Rate

The Fed has entirely folded to the market (but the market is still pricing more dovishness)...
See Chart:
Implied FED Funds Target Rate

As expected, to justify its Dovishness, the Fed cut its economic outlook, now seeing 2.1% GDP in 2019 (from 2.3% in Dec) and 1.9% in 2020 (from 2.0%). The unemploymen rate is projected to rise modestly to 3.8% by the end of 2020, from 2.6% in 2019, while inflation remains subdued, rising from 1.8% to 2.0% in 2020 vs 1.9% and 2.1% in the previous forecast.  Finally, as noted above, the median Fed Funds rate was slashed from 2.9% in 2019 to 2.4% and from 3.1% in 2020 to 2.6%
See Graph
GDP, Unemployment & Inflation
Additionally, The Fed plans to end balance sheet normalization in September.
Read the Full Red line below:
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       Very usefull
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US  DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio

We talk about the 'Deep State'...
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“We’re on really risky ground when we’re trying to place conditions on a federal election.”
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The US is formally committed to dominating the world by the year 2020...
 “Full spectrum dominance” is not only a danger to the world, it is a danger to US citizens who would also suffer the consequences, if and when something goes wrong with their leaders’ complicated space weapons.
See Chart:
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"Today we will launch a criminal investigation about this and we will give legal assessment of this information."
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Governments have lost control of the narrative that they are in control of events... and they are scared to death...
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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

WORLD investors in big trouble..
For investors, one of the most important pieces of information is understanding where we are in the economic cycle as it offers a critical gauge in risk-taking...
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Citibank plans to sell the gold held as a guarantee... and deposit the excess of roughly $258 million in a bank account in New York... out of reach of Maduro.
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... the Trump administration’s coup-by-narrative has not gone as planned...
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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
ISR          Israel encarcela cientos de niños palestinos cada año  Netta Ahituv
EU          “El imperio europeo se hunde”   Miguel Mora
COL        Fraude e ilegalidad institucionalizada   Varios autores
Ecua       Coyuntura: marzo 2019  Francisco Muñoz Jaramillo 
USA       Alitas que migran  Ilka Oliva Corado
Cult         “Latinoamérica, una sola patria”   Wilkins Román
ECOL      A sangre fría   Salvador López Arnal
Machis    “Un hombre blanco hetero”  Miguel Lorente
Opin      K Lucas   ¿Que hay detrás del debilitamiento de Unasur?  FC
Kurd      El colapso capitalista y la Rev kurda  Alberto Colin
                El derrumbe del régimen político peruano César Zelada
                Urug : Gral Manini, democracia y reacción fascista  Enzo M
                Arg: Las deudas son nuestras, las vaquitas son ajenas
                Arg: La república podrida   Fernando Rosso 
                Boliv:  Seguridad para mujeres  de El Alto  
Siria        Recuperando sin nostalgia el 2011  Coordin-Libertad
Españ    El peligro de la abstención   Olivia Carballar  
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ALAI ORG
                Entrevista sobre Ven que nunca se publicó   Jorge Majfud 
                "Que pase lo que tenga que pasar"  Ana Cristina Bracho
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COUNTER PUNCH
Analysis on US Politics & Geopolitics

Binoy Kampmark   Global Kids Strike
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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’  team

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PRESS TV
Resume of Global News described by Iranian observers..


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