domingo, 18 de agosto de 2019

ND AUG 18 19 SIT EC y POL



ND  AUG 18  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


Economists don’t understand bonds. But they know just enough of them to understand that they had better change the subject...

Should anyone ask if QE was effective, Bernanke (and Yellen) would always answer with “TERM PREMIUMS.” Not recovery, accelerating growth, or robust inflation. Just Term premiums!

Why?
Because these are just complicated enough so that no one really understands what anyone referring to them might be talking about. ..SO,  ‘Term premiums’  was “The perfect getaway setup”

The thing about term premiums is really two things; first, forgetting the fact that they are a ridiculous made up idea so that Economists can try (and fail) to plug interest rates into econometric models (in the few cases they do), simulations already suggest term premiums have fallen more without QE than with it. Even on its own terms, term premiums fail to live up.

Bernanke in 2015 conceded that point:
What about the decline in longer-term yields since early 2014? In the US at least, that decline is somewhat surprising, as economic fundamentals have recently seemed more consistent with rising, not falling, longer-term yields… By the process of elimination, with fundamentals stable or improving, much of the decline in yields over the past year must reflect a sharp drop in term premiums. [emphasis added]

What did he blame solely term premiums

The reason it has to be term premiums is because Bernanke, Janet Yellen, or Jay Powell ALL SAY INFLATION IS GOING TO RISE AND SO WILL SHORT-TERM INTEREST RATES. GUARANTEED. TAKE IT TO THE BANK. The Fed will therefore be hiking short-term rates and since they don’t believe the bond market would ever, ever disagree with them, process of elimination, it therefore must be term premiums that are causing yields to fall (when these same people say they should be rising).

See Chart:
Eurodollar: Futures Curve history


US Treasyry; Real Yields:
She chart

Whether in 2015 or more recently, the market evidence for the other two pieces of the yield picture are pretty unequivocal. The market is obviously expecting a very different set of circumstances than policymakers, an increasingly dangerous scenario OF LOWER INFLATION, not higher, at the same time it is thinking lower short-term rates, not rate hikes.

It actually isn’t all that difficult to challenge the assertion, especially with market prices in hand. And it’s becoming even more of a necessity now that people are (finally) paying attention to the yield curve.

This week Janet Yellen said:
I would be relying on the yield curve as the best signal of that risk given the yield curve has obviously not got the same sort of structure that it’s had historically.

Term premiums are not science nor really math. They are made up and more than that they are rationalizationstruly Orwellian, intended to deny the obvious and straightforward signals coming from the very fundamental building blocks of all finance and economy. The entire notion is purposefully shrouded in unnecessarily complex concepts whose only true use is to attempt to answer for the otherwise inexcusable. 

SEE Charts:
US TREASURY CURVE 1

And chart:
US TREASYRY CURVE 2

As I often write, Economists don’t understand bonds. But they know just enough to understand that they had better change the subject.
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The spread differential between illiquid and liquid bonds, has been drifting wider in both the IG and HY markets, reaching its highest level in two years

See Chart:
The underperformance of illiquid bonds has been pronounced in NY
The liquid bonds outperformed  by 2% over the past two weeks.

As with the relative value of high vs. low price bonds, Goldman thinks the risk-reward in being long illiquid bonds remains poor despite the new highs made by the illiquidity premium, especially when considering recent market repricing events of illiquid securities such as those of Woodford, H2) Asset Management, GAM and so on.

See Graphic:
The Liquidity Illusion


Of course, if the market is finally starting to correctly account for an illiquidity premium, one will expect a violent bond dispersion in both IG and HY, and that is precisely what is happening because as the chart below shows, dispersion is surging from rock-bottom levels, with Goldman warning to "brace for a new regime."

See Charts:
We  expect dispersion will further increase in both IG and HY

Goldman writes, "headlines about bankruptcies and restructuring plans have recently intensified. And while the 12-month trailing issuer-weighted default rate remains at a benign level, higher frequency indicators show a notable acceleration in the pace of defaults. This is illustrated in Exhibit 4, which shows that the 12-month issuer-weighted default rate stands at 3%. The 3-month trailing HY default rate (annualized) now stands above 5% and has been steadily rising since bottoming out at 1.3% in November 2018."

See Exhibit 4
The 3-month trailing default rate points to higher point headline default rate ahead


What may come as a surprise to most is that on a dollar basis, 2019 has been a banner year for default volumes with over $36 billion notional of defaulted bonds year to datewhich is on track to surpass the $43 billion in 2016 as the highest year for notional default volumes in the post-crisis era (Exhibit 5).

See Chart:
On  a dollar basis, 2019 is on track to surpass the 2016 post crisis default peak

In short a default tide has already appeared, however thus far, defaults have been highly concentrated among Energy issuers, a trend that reflects structural as opposed to cyclical challenges. The lingering weakness in oil prices coupled with weak growth sentiment may push issuers in other structurally-challenged sectors towards defaults.
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RELATED
"For these producers, the game clock has run out of time to keep playing 'kick the can' with their creditors and other stakeholders." 
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US  DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio

La violencia de los pedofilos va de la mano con las guerras del terrorism imperial

Bombing Serbia was a family affair in the Clinton White House: “I urged him to bomb,” Hillary told an interviewer.
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Ahora reconocen que el chantaje ‘tarifas’ agrava la Ec USA y las pastergan: Ridículo

"The inventory glut reflects a continued cooling of the US auto market." 
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La real historia es que se publicó esto “China prepares its nuclear option in Trade-war  Lealo:  https://rt.com/business/4667-china-nuc . Un tit for tat destinado a agravar la crisis interna del US.. una respuesta económica a la ingerencia política del US en Hong Kong. China es la horma del zapato US.

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In addition to being money for thousands of years, the price of gold is primarily a measure of faith in central banks. If you believe central banks have everything under control, don't buy gold...
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Si los billonarios no creen en central Banks, por que tendrían que creer en ellos los inversores medios del sector productivo. El empresario pequeño que maneja la economía de la ciudad tampoco cree en central Banks y cuando llegue la REV se aliaran con el mediano empresario para crean Banco Propio.
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See Chart:
Gold vs. Fe en Central Banks
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...automation is going to accelerate and jobs in Walmart nation are going to continue to disappear at an exponential rate...
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"They pointed to three key advantages for Trump: He’s the incumbent, the U.S. economy is strong and the Democrats have no definitive front-runner to challenge him."
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Point 1: many incumbents have been  defeated. P.2: it is totally false that the Economy is strong. P.3: Elizabeth Warren is ahead in electoral polls today. In short:  A. foreign diplomats are paid to support trump. B. One thing is right today more than ever: 'PEOPLE DON'T WANT TO BE STUPID TWICE'
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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



This reckoning with Beijing’s authority was baked into the cake 22 years ago when the Union Jack came down over Government House...
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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

RT EN ESPAÑOL

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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more business-wars from US-NATO  allies

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

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