ND APR 14 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
The gaps
in narratives and in price action are becoming ever more plentiful
and they will have to be
reconciled...
Bears
are rapidly losing the will to live, underinvested bulls are desperately
waiting for a dip, any dip, to emerge to buy and the most complacent are
rewarded with handsome gains. Welcome to every bubble.
Lowest unemployment claims in 50 years,
3.8% unemployment and $JPM reports record earnings with Jamie Dimon, $JPM’s CEO, declaring everything is wonderful but
$SPX closed Friday a mere 1.1% off of the all time human history highs.
No wonder the Fed caved
All joking aside there’s
a widening gap between sentiment and reality.
Here’s sentiment:
See Chart:
Sentiment Indic: <10= LOW
net position
Yet here’s the Citi economic
surprise index:
See Chart:
-62.30 … -6.60
… -11.85%
Not
even a hint of improvement, yet buyers assume all negatives already to be a
thing of the past. After all $JPM just reported record earnings and $DIS will offer
streaming services at $6.99 that won’t be profitable for 5 years, but that’s
apparently worth adding over $23B market cap to the stock in one day.
The economy is not the stock market, the
stock market is not the economy. The stock market of 2019 is dovish central
banks, buybacks and China trade deal jawboning.
“By one measure, the amount of investment-grade bonds has doubled to $52 trillion since
the financial crisis. And yields have, on average, fallen to
roughly 1.8 percent, less than half the level in 2007. If they were to rise by a mere
half-percentage point, investors could be looking at almost $2 trillion in
losses.
“This is an element of
hidden leverage that is not appreciated,” says Jeffrey Snider, global head of research at Alhambra
Investments. “We are eventually going to have a shock.”
The current situation is a legacy of the easy-money polices enacted by
central banks following the financial crisis. With interest rates at or near zero, governments and
corporations went on a historic borrowing binge — and investors gorged on debt
that yielded little in return.
These worries aren’t new, of course, but they’ve attracted fresh
attention as the amount of negative-yielding debt has climbed past $10
trillion. To some, it’s a sign investors have gotten a little too complacent
and could easily get blindsided once growth and inflation start to pick up.
“The debt
load in the world is so high now that it can’t withstand any
historically-normal size of interest rate increases anymore,” says Stephen Jen, chief executive
officer of Eurizon SLJ Capital”.
The world is trapped in debt. Central bankers are trapped by the very construct
they helped enable. And now, after a torrent 16% rally in the first 3.5
months of 2019 investors are finally turning bullish. The chase
is on.
See
any signs of unidirectional chasing?
Look no further than high
yield:
See Chart:
Speaking of unidirectional
chasing: Stocks go up forever now, don’t you know?
As outlined in Icarus Warning, it is precisely at these points of historic disconnects, courtesy
forever dovish central banks, that investors are
embracing complacency once again with the $VIX back at 12. The $VIX on
Friday filling the open gap left on the heels of the October swoon when people
were saying a low $VIX is bullish:
See Chart:
NormanTrader.com
..while markets are running
from open gap to open gap:
See Chart:
While markets are ignoring these gaps now
they represent target zones for when volatility reawakens from its compressed
slumber. It is precisely these open gaps that represent the achilles heel of
this levitating market as they will become magnets for a future market seeking
to find balance.
But as long as momentum drives price
investor psychology will seek to dismiss all negatives and warning signs.
Case in point: The yield curve
“scare” a few weeks ago? Already long forgotten:
See Chart:
The “scare” was barely worth a dip in
markets. With all negatives ignored it is precisely the type of environment
that could lead to the blowing off top scenario I described in Combustion.
But because memories are short it may be
worth keeping an eye on the lessons of history. That short yield curve
inversion that is being dismissed as a false positive?
That has happened before as
well:
See Chart:
Recession Start
Note that little “false signal” in April
2000? Dismissed as a false positive for 3 months. The yield curve then
inverted again and the recession hit a mere 11 months following the original
signal.
The gaps in narratives and in price
action are becoming ever more plentiful and they will have to be reconciled.
Mind
the gaps.
Some of these charts and many others
discussed in more depth in the video below:
….
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...even the upper-middle-class is starting to feel the pain of income
stagnation...
THE ISSUE : being "left behind"
has now spread to all Americans aside from the top 10%, according to Bloomberg.
This means that even the upper middle class is starting
to feel the pain of income stagnation. The growth of upper middle class income continues to lag behind that
of those both lower and higher than them on the socioeconomic ladder, according
to the data.
The cost of many items purchased by the
upper middle class, including things like college education and cars, is
outpacing inflation. That is causing upper middle class households to tap into
more expensive forms of debt. The debt these households
is taking on is shifting from mortgages to credit with higher financing
costs.
See Chart:
Change in Debt composition
In addition, the overall middle class'
share of total income is falling while home prices have
increased faster than median incomes.
The Organization for Economic Cooperation
and Development said: “The middle class is increasingly only a dream for many. This bedrock of our democracies and economic growth is not as
stable as in the past.”
See Chart:
Squeezed Middle
Credit card rates recently hit a
"generational high" despite the low prime rate. The spread between the prime rate and credit card interest
rates is at its highest point in almost 10 years.
See Chart:
Debt Service Costs
2018 property taxes rose by 4% annually,
on average, according to an analysis of more than 87 million U.S. single
family homes by ATTOM Data Solutions.
Todd Teta, chief product officer for
ATTOM Data Solutions said:
“Property
taxes levied on homeowners rose again in 2018 across most of the country. While
many states across the country have imposed caps on how much taxes can go up,
which probably contributed to a slower increase in 2018 versus 2017. There are
still many factors at play that can contribute to local property tax hikes, and
without major changes in the way a community runs public services, tax rates
must rise to pay for them.”
Only incomes in the top 25% were able to
outpace this rate on an annual basis, according to the Atlanta Fed. For everyone else, a greater share of income must be
allocated to property taxes, leaving less to spend on everything else.
See Chart:
Luckluster Gains:
Median 12 Months Wage Grows for
those in the 2nd tier flat-lines
Equity ownership in companies, both
public and private, is also sliding for the upper middle class. The share of equity ownership for citizens in the 50th to
90th percentile of net worth has fallen and the top 1% of Americans still own
the majority of shares.
See Chart:
Equity Shrinkage
By the end of 2018, net worth
as a share of the U.S. total had shrunk considerably for the upper middle
class. During the course of just one generation, U.S. wealth held by households
from the 50th to the 90th percentile fell from 35.2% of the total to 29.1%.
Most of this wealth has been transferred to the top 1% of U.S.
households.
See Chart:
Smaller slice of the pie
The OECD defines middle class as households with incomes between 75% and and 200% of the
national median. Over the last 3 decades, incomes have increased 33%
less than the average of the richest 10%, according to the OECD. Real
income of the middle class has grown only 0.3% a year since the financial
crisis.
Stefano Scarpetta, OECD director of
employment, labor and social affairs said: "There
is a risk of a spiral to the extent that the middle class is the one main
sources of political and economic stability."
See Chart:
Middling Millennials
Rising to the middle class is also
getting tougher. More skills are needed, as more than 50% of middle income
workers are now in high skilled occupations, up from about 33% two decades
ago.
“It’s a wake up call. Overall
there is a need to really focus on targeted policy intervention for those with
specific problems. General policies may not work very well,” Scarpetta concluded.
….
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... the Fed’s
present interest rate policy is nearly 50 basis points too high and
getting wider by the day... too tight for too long, slower growth, lower rates.
In the
Hoisington First Quarter Review, Lacy Hunt blasts MMT as "self-perpetuating" inflation.
See Chart:
…
SOURCE: https://www.zerohedge.com/news/2019-04-14/lacy-hunt-blasts-mmt-fears-hyperinflation-if-implemented
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In recent weeks, retail investors have become
convinced that a market crash is imminent while institutional investors have
rarely been more complacent. Who will be right?
See Chart:
VIX Futures Net Specs
…
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Population growth in America has shifted to the
elderly, that have very low labor force participation rates. Presently,
and for at least the next decade,
there is no clear impetus for further growth in employment...
See Chart:
America’s
elderly by age segment
See many more RELATED
charts at the source below:
…
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...the message
from lumbershould be paid attention to.
See Chart:
Lumber vs Cooper
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US DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete;
it’s full of frauds & corruption. Urge cambio
"Buybacks were
illegal throughout most of the 20th century because they were considered
a form of stock market manipulation. But in 1982, the Securities and
Exchange Commission passed rule 10b-18..."
====
"There are all sorts of crazy stuff.The craziest, of course, is that
around 20% or $11 trillion worth of bonds worldwide are priced to yield less
than zero...This is thegreatest non
sequitur in finance..."
====
But
never has China been such a big part of the global economy. Its influence
dwarfs all else. Which renders history mostly meaningless. China is all that
matters.
====
RELATED:
The controversial claim stems from capital gains treatment
of options...
====
"The difference
is solely legal and one of scale. Private counterfeiters are
punished, and rightly so, whereas the Fed is lauded for its actions..."
====
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
Assange's
arrest represents anabuse of power, highlighting
not only how true journalism has
now been banished in the West, but also how politicians,
journalists, news agencies and think-tanks collude with each other to silence people...
====
Trade war is becoming ugly.. Tit for Tat
expected.. Tax only affect output..Finan: In-D
Chen
Mailin’s son, Ding Chen, posted a message on Instagram complaining about
US$680,000 in taxes on the new supercar, saying they made his ‘heart feel
tired’
[[
We arrived to the end of neoliberal
globalization: USD will collapse soon ]]
====
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
VIENTO SUR
Demo Claudio
Katz: “Conquistas democráticas van a estar
en gran peligro”
Niklas
Olsen : Cómo el neoliberalismo reinventó la democracia
RT EN ESPAÑOL
- Periodista destapa una reunión secreta en EE.UU. sobre el "uso de la fuerza militar en Venezuela" y publica la lista de participantes
- Irán critica a Europa por "retrasarse" en lanzamiento del canal de pagos que permita sortear las sanciones de EE.UU.
- VIDEO: Israel creará otra sonda Beresheet tras estrellarse la primera en la Luna
- Kim Jong-un advierte sobre un futuro "sombrío y muy peligroso" a menos que EE.UU. adopte la "postura correcta"
- Sistemas S-300 rusos repelen un "ataque masivo con misiles" de un enemigo durante simulacros militares
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INFORMATION CLEARING HOUSE
Deep on the US political crisis:
neofascism & internal conflicts that favor WW3
- The US Charge Against Assange Is Fraudulent By Caitlin Johnstone
- The Killing of Journalism By Pepe Escobar
- Pardoning Assange: First Step Back Toward
Rule of Law By Thomas Knapp
- Rogue State? – Britain railing against
internat norms and laws By TruePublica:
- Time for Russia to Prepare for War By Paul Craig Roberts
- U.S. Just Declared War on Iran and Nobody
Blinked By Scott Ritter
- Libya: Fruits of US-NATO Regime Change By Tony Cartalucci
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that
leads to more business-wars from US-NATO
allies
- Major
Revelation: Assange
Was Bought for $4.2 Billion – Former Ecuadorian President Confirms IMF Loan In
Exchange For Assange By Paul Antonopoulos,
- Mairead
Maguire Requests Permission to Visit Assange, Nominated for Nobel Prize
By Mairead Maguire,
- Solidarity
with Venezuela: 60 Countries Create Group for the Defense of Peace and the
Principles of the UN Charter By Simon Garcia
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PRESS TV
Resume of Global News described by
Iranian observers..
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