ND APR 2 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
US Economic situation today:
The
Jaws of death between bonds and stocks has never widened so fast...
See Chart:
BLOCKED
The
Bloomberg Dollar Index broke above the key 1200 level once again... and
reversed once again...
See Chart:
The
yield curve remains non-inverted in 3m10Y but flattened notably on the day...
See
Chart
FOMC down
The Mexican
Peso pumped and dumped
See
Chart:
Just
after midnight ET, Cryptos were suddenly panic-bid and while some suggested
this was driven by April Fools' headlines about Bitcoin ETFs, that has been
widely disregarded as the extended gains during the day session suggest two
larger buyers...
See Chart:
“The Bitcoin market and crypto market in general continues to be small relative
to the rest of the markets -- and emotional,” said Jehan Chu, managing
partner at blockchain investment and advisory firm Kenetic Capital. “It’s still very much subject to waves of enthusiasm. I don’t
think today is anything special.”
Bitcoin
spiked above $5000 for the first time since Nov 2018, and broke above its
200DMA - the biggest one-day gains since Dec 26th 2017...
See Chart:
WTI
surged above its 200DMA on the day... BUT
How
quickly will the jaws snap shut?
See Chart:
….
SOURCE:
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US and China officials
have "resolved
most of trade deal issues."
There's just one thing...
US equity futures are up along with bond
yields as the dollar fades (and yuan gains) following misleading headlines
from The
FT reporting US and China officials have "resolved most of trade deal
issues."
“We’re getting into the end-game stage,” said Myron Brilliant, executive
vice-president for international affairs at the US Chamber of Commerce.
All sounds awesome right? Bond
prices are down (yields up) ...
See Chart:
And stocks are surging...
See Chart:
There's
just one big thing wrong: Both countries have yet to agree on what happens to existing
U.S. duties on Chinese goods and the terms of an enforcement mechanism to
ensure China keeps to the trade deal, Financial
Times reports, citing people briefed on the talks.
“Ninety per cent of the deal is done, but the last
10 per cent is the hardest part, it’s the trickiest part and it will require
trade-offs on both sides,” he told reporters on Tuesday.
So, in
other words - no progress whatsoever as enforcement is all that matters and
Trump's threats of maintaining the tariffs as a mechanism of enforcement is
certainly something the Chinese - whose economy is awesome again, remember -
will not stand for.
Nasdaq futs just took out the
highs of the year...
See Chart:
https://www.zerohedge.com/s3/files/inline-images/2019-04-02_17-59-18.jpg?itok=jDZUdGBY Look at the bottom graphs
We suspect
once the humans read The FT article, things might fade.
As we note AUD already is - a
currency that should be jubilant on this...
See Chart:
US-China
trade vs. Record Trade surplus
So finally - summarizing The
FT article - besides the sticking points that US and China have
been unable to resolve for the past 4 months, everything else is resolved.
Trade Accordingly.
…
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The government would
effectively have to somehow value every single asset at every single moment.
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...putting
your faith in central bankers is probably a mistake. We can’t know
how much worse the last decade would have been without their “help,” but does this feel like success?
….
SIGNS everywhere? .. like the signs requesting
Trump impeachment?
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US DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete;
it’s full of frauds & corruption. Urge cambio
Conservative calls to put a stop to this process are a
throwback to the old Cold War mindset that the Reds were coming to
get us as part of the supposed
worldwide communist conspiracy that was supposedly based in Moscow...
====
...risk losing credibility with voters who are not racist or xenophobic but
who suspect that Democrats care
more about protecting people who cross the border illegally than
they do about securing it...
====
"
Yes, they made a few mistakes,
and got a little carried away, but
they’re only human, after all. I’m
sure they’re all very, very sorry, and will never, ever, do it again..."
====
""Chris Hayes is what
every man would be if feminists ever achieved absolute power in this country:
apologetic, bespectacled and deeply, deeply concerned about global warming and
the patriarchal systems that cause it."
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Holy Guacamole...
====
“There's
a huge difference between a
colonial, which is our mascot, and anyone who lived during colonial times,
and colonialism, which is what students are saying this mascot is
representative of, which is not the case at all."
====
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
COMING CREDIT MELTDOWN WILL BE AS BAD AS THE GREAT DEPRESSION AND THE FINANCIAL
CRISIS: DEUTSCHE
"It's quite possible the
next recession will see the third-worst spread peak in history (behind only the
Depression and the GFC) due to these market dynamics."
With
investor attention increasingly focusing on what most believe will be the
catalyst for the next financial crisis, namely a tsunami in corporate defaults
as a result of the disastrous combination of record leverage, higher rates and
an economic slowdown, overnight we presented the
view of FTI global co-leader of corporate finance and restructuring, Carlyn
Taylor, who predicted that "a spike in defaults is on the way, sooner or
later."
The
expansion is pretty long in the tooth and there's definitely a lot of buildup.
The activity level of restructuring is rising, maybe not at the rate of
bankruptcies, but the pipeline of companies we think are going to end up in
restructuring, based on metrics that we analyze, that volume has gone up. And
we're so busy, which we don't think is just market share, because we think our
competitors are also very busy.
Yet while investor worries have
centered on record corporate leverage...
See Chart:
...
a growing number of strategists are warning that corporate bond market
illiquidity is an even greater risk factor.
Not long
after Goldman
most recently warned that the biggest threat facing the broader market
in general, as well as corporate bonds in particular, is a sudden collapse in
liquidity, overnight UBS credit strategist Steve Caprio and his team laid out
four major reasons why global corporate bond market liquidity has deteriorated
over time.
These are:
- Rising investment fund ownership of corporate debt,
- Low interest rates,
- A lack of dealer intermediation, particularly in periods of rising credit risk, and
- Potential new EU regulation on trade settlement failures.
UBS notes that credit investors were
shocked by the spread blowout in Q4'18, followed by major spread tightening in
Q1'19, and notes that "these
spread moves are worrying in that they are somewhat divorced from fundamentals,
as default risks remain low." The bank then notes that it
believes these shifts in risk premia are likely to remain with us for the
foreseeable future, and as evidence is uses a novel liquidity tracker by the Intercontinental Exchange which highlights that global HY bond liquidity has been deteriorating steadily
since 2016, while the bank's own simple measure of gauging HY
liquidity, through the beta of spread changes to flows, is also elevated.
See Charts:
There are two other critical
reasons for the collapse in liquidity, one of which is central banks
themselves. As Caprio notes, credit returns will be more negative in the future
when fundamental stress arises, because
there is less (US) or no (EU) room for sovereign yields to fall further. The % of index yield that is spread ranges from 31% and 58% in US IG
and US HY, to 100%+ in EU IG and EU HY. This makes global credit a less
diversifying asset. The empirics bear this out, with rising correlations of
credit to equity returns. In addition, EU HY finds itself behind US HY in terms
of reversing the QE-led portfolio rebalancing effect. Lastly,
while US IG credit can receive risk-off inflows from broad bond funds, given
Treasury yields are attractive as a portfolio hedge; EU IG flows are more
dependent on credit-specific funds.
See Chart:
Echoing
UBS, Deutsche Bank's credit strategist Jim Reid published an almost identical
report at almost the same time, in which he agreed that it's not so much
default risk and deteriorating fundamentals, but rather liquidity that will
precipitate the next crisis.
Reid writes
that a look at long-term credit fundamentals shows corporates are levering up
in this cycle "but that this is more of an IG than HY story and therefore
reduces the default implications", although one could counter that with
over $3 trillion in BBB-rated debt just waiting to be downgraded to junk, it is
only a matter of time before this becomes a bigly HY story.
Deutsche also notes that while leveraged loans are a concern ,it’s not clear the increase in
cov-lite issuance will bring large-scale defaults in the next cycle as without
covenants there are fewer triggers. As a
result the German bank doesn’t think corporate fundamentals will cause this
cycle to turn but will clearly deteriorate when it does.
See Charts:
So what will cause the cycle to
turn? As Reid suggests, echoing what UBS warned above, the next recession will
be not so much about default risk (outside of the natural increase) but instead about liquidity risk. Just like UBS, Deutsche writes that since the financial crisis, the
size of the credit market has increased dramatically, but regulation has
sharply cut dealer liquidity, and "in a recession
we will likely see one-way selling and large gap risk for spreads."
See Chart:
US Corporate Bond Market vs. US Dealers Inventory
The next chart looks at US IG,
HY and Treasury daily trading levels relative to the size of the market:
See Charts:
How bad
would this self-fulfilling liquidity crisis be? The
answer:
It's quite possible the next recession will see the
third-worst spread peak in history (behind only the Depression and the GFC) due
to these market dynamics.
But don't
worry folks: central banks will bail you out, as usual:
... these
peaks may not last long as central
banks will probably be forced to buy to ease pressure on the market. In
fact, this is probably a more traditional function of
central banks: to lend money to solvent entities when there is a liquidity
problem. Companies are unlikely to have liquidity problems, but those holding
the bond might well do.
Meanwhile, keep an eye on the tsunami of
fallen angles: "a large BBB market vs. HY will
also exacerbate the technicals when downgrades occur." Finally
as to timing, Reid warns that "as many indicators
are late cycle, this is a real risk over the next couple of years."
….
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False
flag? Or Bolton dream? THOUSANDS
OF VENEZUELANS BREAK THROUGH BORDER BARRICADES - BOLTON CHEERS MAYHEM
Desperate Venezuelans seen
breaking through to Colombian side to grab humanitarian aid...
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...CENAPRED has warned people to keep away from
Popocatépetl after 200 eruptions
were recorded in just 24 hours. A level three yellow alert has been issued
meaning the chance of volcanic
activity is immediate to high.
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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
ECON neofascismo
y altern ¿La “gran transformación” del siglo XXI?
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ALAI ORG
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RT EN ESPAÑOL
- VEN allana inmunidad parlamenta de Guaidó y autoriza juicio en su contra
- Embaj ruso en Col: 'polémica' por carta al Cong: " asunto creado de la nada"
- Trump dice que está listo para cerrar la frontera entre EE.UU. y México
- Descubren en el lago Titicaca los restos de una religión anterior a los incas
- Las atrocidades españolas en la Conquista de América
- Moscú dialoga con Bogotá y Caracas para solucionar la crisis de Venezuela
- Keiser Report "Nos encontramos al borde de una revolución"
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INFORMATION CLEARING HOUSE
Deep on the US political crisis:
neofascism & internal conflicts that favor WW3
-Video shows horrowing journey asylum seekers
take to enter US By Matt Gutman
-How the U.S. Creates ‘Sh*thole’ Countries: A
Review By Danny Haiphong
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COUNTER PUNCH
Analysis on US Politics & Geopolitics
Clark T. Scott “The
More Effective Evil”
Adolf Alzuphar Los
Angeles Diary: The Politics of Secular Faith
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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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