ND
MAR 5 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
fun-durr-mentals...
1-Stocks decoupled from Earnings expectations...
See
Chart:
S&P
500 vs. S&P forward EPS Expectations
2-Stocks decoupled from Macro data...
See
Chart: S&P vs. US MAcro
3-Global Stocks decoupled from global bonds...
See
Chart:
Global
Money supply
Global Stocks perfectly coupled with Global Money Supply (and Global
Central Bank balance sheets)...
See
Chart:
S&P vs Global Money supply
At what point does Jay Powell look himself
in the mirror and realize what a farce his entire life's work has become.
…
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GE shares have suddenly tumbled over 7%
this morning, erasing the big short-squeeze spike from last week after CEO
Larry Culp discussed the power unit's future and said free cash flow will be "in negative
territory" this year.
See
Chart:
But, but, but, Cramer said GE was fixed?
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"The Fed
generated an unsustainable boom. It followed up with a severe monetary
contraction. And it swapped out its traditional operating procedures for a new regime, reducing economic growth
and increasing systemic risk in the process..."
A decade ago, Americans found themselves living
through the greatest economic downturn since the 1930s. In the time since, much ink has
been spilled about it. What caused the Great Recession?
Why was it so severe? Were the policy responses effective?
Read
these subtitles:
1. The Great
Recession was preceded by monetary expansion.
In
other words, poor monetary policy fueled an unsustainable boom.
See Chart:
From
January 1991 to 2001, the product of M2 and velocity of M2 grew at a
continuously compounding annual rate of roughly 5.50 percent. From January 2003
to 2007, it grew more rapidly, at a rate of 5.97 percent. Faster money growth
relative to money demand fueled a boom.
2. The Great
Recession was exacerbated by monetary contraction.
When monetary expansion generates an unsustainable
boom, a period of correction must follow. Resources, having been misallocated, must be
reallocated. Machines will be repurposed, retooled, or relocated. .. In brief: monetary
mismanagement. Having grown rapidly in the mid-2000s, the growth
rate of M2 times velocity of M2 fell over the first three quarters of 2008 and
then turned negative. The Fed allowed nominal
spending to contract. And, since the price level does not adjust instantaneously, real
output fell as well.
3. The Great
Recession resulted in a radical change to the day-to-day conduct of monetary
policy.
Perhaps
least appreciated in all of this is the change in the Federal Reserve’s
operating regime. Prior to the Great Recession, the Fed engaged in open market
operations — largely limited to short-term Treasuries — in an effort to influence the effective federal funds
rate. Since October 2008, the Fed has maintained a floor system, in
which the interest it pays on reserves functions as the primary policy tool.
The size of its balance sheet has exploded, and the composition has changed to include much riskier
assets.
The Fed’s new operating regime is worse in
several respects.
First, maintaining a floor system requires setting the interest on
reserves at or above the rate that would clear the federal funds market. That means monetary policy will
tend to be tight on average, as the Fed fears setting the interest on reserve
rate too low and seeing all of the new money it has created pour out into the
economy.
Second, to maintain a larger balance sheet, the Fed must bid savings
away from the private banking system. That reduces the extent to which valuable financial
intermediation takes place and, correspondingly, the extent to which valuable
investments and expenditures on research and development take place.
Third, since paying banks to hold reserves causes overnight-lending
markets to dry up, banks no longer need to incur the costs to monitor one
another. That
means banks can take on excessive risks with little fear of reprisal.
Finally, the new operating regime has made the Fed more vulnerable to
short-sighted political influence. It is hard to say precisely how much
of the growth slowdown since the Great Recession can be attributed to the Fed’s
new operating regime, but it almost certainly accounts for some of it.
Much like the Great Depression of the
1930s and the Great Inflation of the 1970s, the Great Recession of the 2000s
shaped a generation of macro- and monetary economists.
We can debate the details. But three things warrant
widespread agreement. The Fed generated an
unsustainable boom. It followed up with a severe monetary contraction. And
it swapped out its traditional operating procedures for a new regime, reducing economic growth and increasing systemic risk in
the process.
…
SOURCE: https://www.zerohedge.com/news/2019-03-05/three-things-you-should-know-about-great-recession
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RELATED:
"The tale of the tape since 2009 is
mixed, at best...but one thing is certain, the Financial Crisis and Great
Recession made the Federal Reserve even more beholden to financial asset
prices..."
See
Chart:
We’re coming up to the 10-year anniversary of that
nadir on the S&P 500 this Saturday, so today we will reflect on the last
decade and what is says about the world today. Past performance may not be
indicative of future results, but what happened from 2009 to 2019 deeply
informs the investment climate today.
Three points on this:
#1: Only US equities show
positive returns since the prior global equity market peak in 2007;
major rest-of-world indices are still in the red, almost 12 years on. The data here: Open this source: https://www.zerohedge.com/news/2019-03-05/10-years-devils-low
#2. While this is the 10th
anniversary of the March 2009 lows, the prior year’s negative 36.6% total
return on the S&P 500 casts a still-noticeably shadow on long-term returns.
Conclusion: Long run S&P
500 returns have been dreadful, the 10-year comps to the March 2009 lows
notwithstanding. When
investors see a 5.5% compounded return over 2 decades, they naturally look for
low cost products like ETFs and robo-advisors and invest in alternative asset
classes like private equity and venture capital.
#3. The Financial
Crisis/Great Recession and the subsequent 10 years cemented central bankers’
positions as the western world’s most important non-democratically
elected government officials, but also left them more beholden to capital
markets than before.
Conclusion: central bankers
were a necessary bulwark against greater economic uncertainty 10 years ago, but
the current (and likely near-future) political climate means they will remain
in the spotlight.
Continuing our “10 years since the S&P lows”
conversation in this section with a look at 5 economic data points that show
how the last decade has developed in the wake of the Great Recession.
#1: Long-term Treasury rates
are lower now than pre-Crisis, in part due to a meaningful shift in inflation
expectations.
#2: US Federal Debt as a percent of GDP took a step
function higher in the aftermath of the Great Recession and never looked back.
#3: The size of the US
Federal Reserve’s balance sheet is also much larger than pre-Crisis levels.
#4: While the overall US labor market is strong, the
Great Recession’s impact is still visible among younger college-educated
workers.
#5: Big moves in the dollar
came long after the Great Recession was over.
Summing up: some of the
Great Recession’s impact was immediate, but most of it took years to play out
even as equity markets began to recover.Some of these effects, such as lower long-term
interest rates, are generally good for stocks whenever they occur. But most –
higher Federal debt levels, large central bank balance sheets, and young grad
unemployment - are new to this cycle. These risk
factors – and many others we did not have space to mention – are the lasting
effects of the events of 10 years ago.
….
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Authored by philip marey of rabobank
After
being suspended for about a year, the debt limit returned on March 2. However, the Treasury Department will take extraordinary measures that
could delay a federal government
default to September or October.
Consequently, raising
the debt limit could become tied to the budget negotiations for fiscal year
2020, which starts on October 1, 2019.
Therefore, we
may be heading toward a game of chicken between Republicans and Democrats with the threat of a government
default and either sequestration or another government shutdown.
Debt limit
Since
then the debt ceiling has been increased about 100 times. Sometimes, the debt
limit is temporarily suspended. In fact, in early 2018, the Bipartisan Budget
Act of 2018 suspended the debt limit through March 1, 2019. Consequently, the
amount of debt on March 2, about $22 trillion, will be the new debt limit.
See Chart
Sequestration
The
existence of a debt limit did not do much to slow down the accumulation of public
debt. In fact, in terms of GDP, total public debt has risen from 30% in the
1980s to well over 100% in recent years. The Budget Control Act of 2011 made
significant spending cuts over a ten year period and introduced spending
limits, in addition to the debt limit.
Conclusion
The
extraordinary measures available to the Treasury are expected to delay a
government default to the turn of the fiscal year. This means that the debt
limit may become entangled with the budget for the next fiscal year. Therefore a game of chicken between Democrats and Republicans
may arise in September with the threat of a government default and either
automatic spending cuts or a government shutdown.
…
Read
the full article at:
SOURCE https://www.zerohedge.com/news/2019-03-05/return-debt-limit-and-sequestration-what-happens-next
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US DOMESTIC POLITICS
Seudo
democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge
cambio
"... this is unsustainable because
the growth came at a heavy cost."
Analysts
are trying to figure out what the numbers mean. Peter had a pretty simple
explanation. Americans have stopped spending because they’re broke.
They’ve
already borrowed so much money to pay for the spending of the past that they’re
just done. That expression, ‘Shop ’till you drop,’
well, maybe a lot of Americans have finally dropped and they’re no longer
shopping.”
This could be a bad sign that Americans
are at the end of their rope.
See
Chart:
Consumer
confidence vs. Savings rate
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"I wish I could say I was surprised.But after years of experiencing
liberal bias, both at Boston University as well as Lehigh University, where I
attended before I transferred, it
felt like just another day on campus..."
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"targeting hundreds of legislators and regulators in an attempt to procure influence across
the world"
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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 Pakistan Navy used its specialised skills to ward off the
submarine, successfully keeping it from entering Pakistani waters,"
[[ I
guess this conflict is being dangerously hitting in order to sell US weapons]]
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The
business of war doesn’t pay off…
"the bill would have the federal government pay, within one
year, a $2,500 bonus to
the more than 3 million military service members who have served in the
war"
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SPUTNIK and RT SHOWS
GEO-POL
n GEO-ECO ..Focus on neoliberal
expansion via wars & danger of WW3
Financial
imperial terrorism will continue, the aim is WW3
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RT
SHOWS
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NOTICIAS IN SPANISH
Lat
Am search f alternatives to neo-fascist regimes & terrorist imperial chaos
REBELION
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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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Are we sleepwalking into nuclear disaster? By
Edward Lozansky
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Jared Kushner and the triumph of Saudi Arabia By Edward Luce
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UK sells $445m of arms to Israel, including
sniper rifles By Jamie
Merrill-
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Why Won’t Maduro Let US Aid Into Venezuela? By Ted Snider
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COUNTER PUNCH
Analysis
on US Politics & Geopolitics
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Jeffrey St. Clair Badge
of Impunity: the Killing of Stephon Clark
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David D’Amato Abolish
the Prison System
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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..
Clinton
officially rules out running in 2020
no one likes this corrupt lady
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