ND
JUL 8 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
DOWN GRADE?
The biggest market news, on a slow
news day ahead of Powell's testimony to Congress, was the downgrade of AAPL -
which for once actually sparked some selling (down over 2% and back below $200)...
See Chart:
Apple fell after Rosenblatt
Securities downgraded the iPhone maker to sell. That brought the total number of bearish analysts
up to five among the 57 ratings tracked by Bloomberg, the highest number since
at least 1997.
This weighed down Nasdaq immediately...
See Chart:
On the day, The Dow (weighed down by
Boeing) and S&P outperformed the major US peers but all major US equity
indices were down...
See Chart:
NOTE - the machines tried to ignite
momentum off the opening lows but, for once, it failed.
Defensive stocks dominated trading
today (just as they did on Friday)...
US equities erased all those
ridiculous rebound gains and caught back down to bonds, gold, and the dollar..
See Chart:
Most of the Treasury curve was
modestly higher in yield today but the longer-end outperformed..
See Chart:
UST 2s30s continues to flatten hard,
now below the pre-FOMC levels...
See Chart:
And Debt Ceiling anxiety is starting
to impact the T-Bill curve...
See Chart:
US Treasure BiLL Curve
The dollar inched higher on the day
but remains well off Friday's spike highs...
See Chart:
Bloomberg Dollar Index
Silver surprised with some
outperformance as copper and gold dipped...oil dropped notably into the NYMEX
close...
See Chart:
Gold fell back below $1400...
See Chart:
WTI snapped back below $58 as the
NYMEX settle loomed...
See Chart:
WTI Crude Futs
Finally, in case you're fed up with
hearing about how awesome the economy is BUT we still need an "insurance
cut" - here's Gluskin-Sheff's David Rosenberg to explain just how bad it
actually is...
See Chart:
Probability of US Recession
12-Months ahead
One more chart:
But, of course, we know
fun-durr-mentals don't matter anymore...
See Chart:
S&P Global Liquidity Proxi
Powell better deliver or this entire
ponzi will collapse…
See Chart:
July Rates-Cuts Odds
….
SOURCE: https://www.zerohedge.com/news/2019-07-08/idowngrade-sparks-stock-selling-dollar-gold-bonds-flatline
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[The $15 option] would boost
workers’ earnings through higher wages, (offset by higher rates of joblessness), reduce business income and raise prices;
and reduce the nation’s output
slightly...
See Chart:
….
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"The idea that we ’re now a captive of the market — is somewhat chilling to me....
because if the economy doesn’t cooperate, I don’t know what we do..."
In a note published
by Goldman's chief economist Jan Hatzius, he asks rhetorically "Why Cut?" and provides
several good fundamental, economic reasons why there is
no reason whatsoever for Powell to announce at the end of this month that the
US central bank has commenced an easing process. Some of the key
arguments are the following:
- Fears of a sharp labor market slowdown have proven unfounded so far. Following the 224k rebound in June, both the 3- and 6-month averages for nonfarm payroll growth are now back above 170k. This is 50k below the 2018 pace but still 70k above the breakeven rate consistent with stable unemployment.
- While there has been a sharp slowdown in various manufacturing surveys, Goldman continues to believe that "much of this weakness reflects the ongoing inventory adjustment, which is likely to subtract 1.7pp from Q2 GDP growth" and adds that "we are now probably near the end of this process, as the level of inventory investment seems to have fallen to a below-trend pace and the economywide inventory/sales ratio appears to be peaking." According to Hatzius, "these observations typically set the stage for a rebound in orders and employment before too long."
- The US Consumer has rarely been stronger: according to Goldman, prospects for final demand look good, as private domestic final sales probably grew almost 3% in Q2, "and even beyond Q2, we are relatively optimistic, because the easing in financial conditions implies that the FCI impulse to growth should go from about -1pp around yearend 2018 to a modestly positive number around year-end 2019."
- Inflation is far from recessionary: while core PCE inflation remains at 1.6% year-on-year, significantly below the Fed’s 2% target, in Powell’s May 1 FOMC press conference, he characterized the weakness as “transient” and emphasized the stability at 2% in the Dallas Fed’s trimmed-mean index, and to Goldman this still looks like the right take on the issue: "In fact, both the core PCE and the trimmed-mean PCE remain at the same year-on-year levels as two months ago, and each has risen at sequential rates of more than 2% since then."
- Trade war has taken a step back: with most dovish Fedspeak over the past several weeks emphasizing the increased uncertainty(especially with regard to trade policy) around a fairly optimistic central case as a reason for potential rate cuts, while the trade uncertainty has not gone away, the decision by Presidents Trump and Xi to return to the negotiating table and suspend the next tariff increase has reduced it, at least in the near term.
This reveals the key
question - if the economy, both domestic and international - are not pushing
the Fed to cut, then what is? According to Goldman, the answer is simple - the
market. To wit, despite the recently encouraging news on jobs, growth,
inflation and trade, "the bond market is still
priced for nearly 50bp of cumulative cuts over the next two meetings, even
after Friday’s selloff. Whether or not this is “justified” by the
fundamentals, it probably matters for the near-term monetary policy outlook
because it raises the cost of doing nothing."
By pricing in so
much easing, the market has basically trapped the Fed: according to Goldman
estimates of the link between monetary policy shocks and financial conditions
imply that failing to deliver 50bp of cuts could
tighten our FCI by 50bp as well, via a combination of higher bond yields, lower
stock prices, wider credit spreads, and a stronger dollar. Translation: the
market would tumble and prompt the Fed to cut rates anyway to avoid a crash.
Additionally, the
combination of a hawkish Fed surprise and falling stock prices would
undoubtedly trigger another bout of criticism from President Trump. Besides, it would play into the perception by many market
participants that the Fed’s policy and communications since last October’s
“long way from neutral” comment have been unusually unpredictable.
Although Fed officials likely view this criticism as unfair, at the margin it
probably makes them more eager to avoid yet another major policy surprise. So
25bp cuts in July and September remain our base case.
By contrast, if Goldman's economic forecast of renewed
declines in unemployment and a rebound in core PCE inflation to 2%+ proves
correct, "Fed officials would normally be looking to reverse any near-term
cuts, as they did following the 1995-1996 and 1998 “insurance“
episodes." That said, hikes in the runup to the 2020
presidential election are unlikely as Hatzius concedes, but his forecast
remains a rebound in the funds rate to the 2½-3% range in the medium term
Which brings is the
punchline - the same punchline that Powell uncovered back in 2013 - that the
Fed is now a slave to the market. As Hatzius concludes, "ultimately, the
uncertainty around the future path of policy probably revolves as much around
the Fed’s reaction function as around the economic outlook." But what is most stunning is Goldman's own admission that
"bond market pricing may be playing a bigger role in driving policy
decisions than in the past, via the cost of not delivering on near-term policy
expectations, the slope of the yield curve, and the signal contained in
breakeven inflation compensation."
In short, Powell is now terrified to disappoint the market!
This is a disaster
for the future of the Fed for two reasons - first, here is Goldman's
explanation, noting that while "such reliance on the “wisdom of the
crowds” has some potential advantages for policymakers, it also raises the risk that monetary policy—in the words of
former Chair Bernanke—“degenerates into a hall of mirrors” and takes the funds
rate far away from the level justified by economic fundamentals."
This is Goldman's
way of admitting the Fed may be blowing a massive asset bubble.
Well, in just three
weeks the market expects - with 100% certainty - that the Fed will indeed cut
rates at least once. Ironically, as even Goldman now
admits, by doing so Powell will start the countdown to not only the final
reflationary phase of what will be the last asset bubble, but also a financial,
economic and social crash that will make the Global Financial Crisis seems like
a dress rehearsal.
….
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"Bitcoin is well on the
way to being accepted as money. I think it will succeed. Remember,
money is just a medium of exchange and a store of value. Almost anything can be
used as money. Some things are
just much better than others..."
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
"Because this goes directly to the heart of the
matter. Trump left the
Clintons’ social circle in disgust and I’m convinced he ran
to stop her corrupt sell out of
the U.S."
====
"We
should double it now and use that number to double it or quadruple it for the next time."
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There is reason to believe that a majority of voters are good and goddam sick of identity
hustling and the tiresome racket of political correctness that
spawned it. They see its bottomless
appetite for grievance and complaint...
====
"The Deep State almost always wins. But if AG Barr leans hard on Trump to unfetter
investigators, all hell may break lose, because the evidence against
those who took serious liberties
with the law is staring them all in the face..."
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"It's something that would happen relatively instantaneously... Probably today if it happened, you would see seawater
rushing in..."
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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
In recent
weeks, dealers have slashed their prices by as much as 50%, according to local
media reports, to help liquidate inventory before a July 1 emissions
standard deadline.
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The US
State Department approved the possible sale to Taiwan of M1A2T Abrams tanks,
Stinger missiles and related equipment at an estimated value of $US2.2 billion
despite vocal Chinese criticism of the deal
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Reached the
level needed for the Bushehr reactor, but the measures are
"reversible" - Tehran's leaders have informed Europe.
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The lesson that the Venezuelans
themselves are the best agents of history to address their own destiny has
yet to be learned by the world’s hegemon and its media apologists...
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The official has also reportedly raised the issue of the need to draw a distinction between the
production of cryptocurrencies and its trading...
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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
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ALAI ORG
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RT EN
ESPAÑOL
- China acusa de la crisis nuclear iraní al "bullying" de EE.UU.
- La justicia italiana condena a cadena perpetua a 24 represores por el Plan Cóndor
- ¿A qué se debe un aumento global de los homicidios?
- 'Viviendo Quito con sentidos': ¿cómo es un recorrido turístico con guías con discapacidad visual?
- La Guardia Rev de Irán: "EE.UU. es una potencia militar y política en declive"
- EE.UU. aprueba posible venta de armas a Taiwán por 2.200 mill de dólares
- Podrían los sismos del sur de CA causar megaterremoto en la falla de San Andrés?
- Jesús era palestino? activista genera polémica al abordar la nacion de Cristo
- El paro docente en Chile entra en 6ta semana, ¿qué piden los profesores?
- Trump compara a Ocasio-Cortez con Eva Perón y la congresista le responde
- Hijo de destacado desertor S-Corea llega a Pionyang para vivir en C-Norte
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism & internal
conflicts that favor WW3
- China's Economic Record Vs USA By Professor Richard Wolf
- Future Resource Wars By Pepe Escobar and Eddie Conway
- How The US Govt Legally Stole Millions From
Kim Dotcom By Mike Masnick
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COUNTER PUNCH
Analysis on US Politics & Geopolitics
Nick Pemberton Reparations
for Millennials
Renee Parsons 5G
Complexities and National Security
Hakim Young In
Afghanistan, We Have Three Dreams
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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
- Charges Dropped Against
Pregnant Shooting Victim Amid Outcry over the Criminalization of Pregnancy
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PRESS TV
Resume of Global News described
by Iranian observers..
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