ND
AUG 22 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
most concerning aspect of the latest data is a slowdown in new business growth
to its weakest in a decade, driven by a sharp loss of momentum across the
service sector."
See Chart:
….
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In what was mostly a very quiet day, with traders refusing
to trade in size ahead of tomorrow's main event, J-Powell's J-Hole speech, we
got a glimpse of what will happen if the Fed chair disappoints the market's
expectations for committing to further rate cuts.
After spiking in early trading,
stocks slumped to session lows and the VIX jumped back over the key 16
threshold, after Philly Fed's Harker joined other regional Fed presidents
in pouring cold water on hopes for more rate cuts, and instead saying that he
expects not to vote for more easing.
See Chart:
VIX
vs. Emini
The drift higher in short-term
yields came even as Markit reported the first contractionary manufacturing PMI
in ten years, at 49.9, while the services PMI stumbled as well, making the case
for a recession that much more likely.
See Chart:
In any case, the surprising
hawkishness out of Fed presidents, and the spike in 2Y yields, meant that the
2s10s yield curve inverted again - yet another recessionary indicator - and was
flipping between negative and positive for much of the day.
See Chart:
And so with the S&P closing flat, Chris Zaccarelli, CIO
for Independent Advisor Alliance, summarized it best: "The big question mark is just going to be Jackson Hole --
what’s Powell going to say You’re seeing the market going higher and lower this
week heading into tomorrow, where we could get some market-moving commentary
out of Powell’s speech."
For those curious what Powell may say, and why he will
likely disappoint, read
our preview of tomorrow's J-Hole main event here.
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"A
global deflationary bust will wreak havoc with financial markets. Does anyone
seriously believe that in the next global recession equity markets will not
collapse?"
Earlier this week we
wrote that after decades of waiting, for Albert Edwards vindication
was finally here - if only outside the US for now - because as per BofA
calculations, average
non-USD sovereign yields on $19 trillion in global debt had, as of Monday, turned
negative for the first time ever at -3bps.
See Fig 1
Globsl IG
fixed income
What does he mean?
As Albert explains, "when you see the creeping advance
of negative bond yields throughout the investment universe, you really start to
doubt your sanity. For me it is not so much that 10y+
government bond yields are increasingly negative, but when European junk bonds go negative I really start to scratch my
head." And as we wrote in "Redefining
"High" Yield: There Are Now 14 Junk Bonds With Negative Yields",
there certainly is a lot of scratching to do.
One thing Edwards isn't scratching his head over is whether
this is a bond bubble: as he explains, his "own view is that this government bond
rally is not a bubble but an appropriate reaction to the market discounting the
next recession hitting the global economy from all overleveraged corners of the
world (including China), with close to zero core inflation
and precious few working tools left at policymakers’ disposal."
This means that "the bubbles are not in the government bond
market in my view. They are in corporate equities and corporate bonds."
If Edwards is correct about the locus of the next
mega-bubble, it is very bad news for risk assets as the "global
deflationary bust will wreak havoc with financial markets", prompting
Edwards to ask a rhetorical question:
Does anyone seriously believe that in the next
global recession equity markets will not collapse? Do market participants
really believe fiscal stimulus and helicopter money will save us from a
gutwrenching global bust that will make 2008 look like a picnic? Has the longest US economic cycle in history beguiled investors into
soporific complacency? I hope not.
So to validate his point that the
rates market is not a bubble, Edwards goes on to show that "US and even eurozone government bond yields are not in
fact overextended – certainly not on a technical level – but also that
fundamentals should carry government bond yields still lower."
See Chart:
In his note, Edwards launches into an extended analysis of the declining workweek for both manufacturing and total
workers, and explains why sharply higher recession odds (which we recently
discussed here), are far higher than consensus
expected.
See Chart:
But what we found most notable was his
technical analysis of the ongoing collapse in 10Y Bund yields. As
Edwards writes, "looking at the chart for German 10y yields (monthly plot)
their decline to close to minus 0.7% does not seem so extraordinary – merely the continuation of a downtrend within very clearly
defined upper and lower bounds”
See chart below
As Edwards explains referring to the chart above, "the
bund yield has remained in the lower half of that band since 2011, but there is
good reason for that as the ECB has struggled with a moribund eurozone economy
and core inflation consistently undershooting its 2% target."
His conclusion: "This market certainly doesn’t look like a
bubble to me."
Shifting attention from Germany to the US, Edwards writes
that unlike the 10y German bund yield, "the US 10y
has mostly occupied the top half of its wide downtrend band since 2013."
See Chart:
It is Edwards' opinion that "we
are on autopilot until we get" to 0.5%.
But wait, there's more, because in
referring to the charting of Pictet's Julien Bittle (shown below), Edwards
points out the right-hand panel which demonstrates how far US 10y yields might
fall over various time periods after hitting a cyclical peak. "He shows that on average we should expect a decline of 1-1½ pp from the trendline, which takes us
pretty much to zero (see slide)." Personally, Edwards says, he
is even "more bullish than that!"
See Chart:
Edwards then points us to the work of Gaurav Saroliya,
Director of Macro Strategy at Oxford Economics who "certainly doesn’t
think that QE is depressing bond yields." In this particular case,
Saroliya uses a simple model which fits US 10y bond yields with trend growth
and inflation reasonably accurately (see left hand chart below). As Edwards
notes, "given the demographic situation, inflation
is likely to remain subdued."
See Charts:
In conclusion Edwards presents one final and classic Ice Age chart to finish off.
As the bearish - or is that bullish... for bonds -
strategist notes, "the last few cycles have seen a sequence of lower lows
and highs for nominal quantities (along with bond yield and Fed Funds). I have used a 4-year moving average and have added where I
think we may be heading in the next downturn and rebound - and more importantly
where I think the market is now thinking where we are heading."
See Chart:
US Nominal GDP and wage Bill
[ Be nice with your patient, please ]
Referring to the implied upcoming plunge in nominal GDP,
Edwards explains that "that
is why this is not a bond bubble. It is the next phase of The Ice Age. And it
is here."
[ Come on,
be nice.. say a lie please ]
One last note: is it possible that
Edwards' apocalyptic view is wrong? As he admits, "of course" he could be wrong: "And given my
dystopian vision for the global economy, equity and corporate bond investors, I sincerely hope I am."
[ Bravo!
Better than Trump’ team lies: “You sincerely
hope” so. ]
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Sorry baby: If there is not milk in my breast is not your
fault. You have the right to cry
The latest
deal to get pulled was a loan by Vewd Software, which joined peers such as
Golden Hippo, Glass Mountain Pipeline Holdings, Chief Power Finance and
fitness-center builder Life Time, all of whom failed to raise money in the loan
market.
See Chart:
Fund Outflows
What happens next? Well, there are two options: either the market freeze continues as the December 2018
"Ice-Nine" of the loan market indefinitely postpones the entire
pipeline, OR the more optimistic investors end
up being right: they are merely waiting to approach the market after
Labor Day on Sept. 2, when the liquidity - they hope - will return to the
market. That's when we will also see just how easy it
will be for a consortium of banks to sell a whopping $7 billion loan to help
finance the merger of T-Mobile US and Sprint.
[[ These dreams are better
than OPIUM DREAMS ]]
….
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
Billionaires censoring freedom of informat with support of
FED Sys like in nazi German
What counts
as 'online hate'?
…..
Hate on migra, Ame-blacks &
other minorities? Are they saints? Saint Kosos?
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It is not enough to support ISR expropriation of land from
PAL: you must be “semite” .. So, get a piece of condom on your head with the
logo ‘Trump 2020’: Semites = happy
"There
is no ambiguity..."
….
Not at all in declaring Jerusalem
capit of ISR, What if Vatican declar cap of IT?
Impossible!:
there is not troglodytes like BN in
Italy, though they try in XIV Ct
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One more teen-Slippery
Slope & false similarity: the pedo-monster Epstein & Bill Gates the
greatest scientist of Apple who wanted to be indep from CIA info-staff.
And why was
his former science adviser named an executor of Epstein's will?
….
If you can’t compare good with best
and bad with worse, move t stink fantasy
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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
Iraq has
sought to close its airspace even to US military flights "not
authorized"
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Worse than OPIUM DREAMS:
The U.S.
could “drown the world in oil” over the next decade, which, according to Global
Witness, would “spell disaster” for the world’s attempts to address climate
change.
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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
Mexico: presa
del terrorismo blanco del US
Marco I. Dávila C.
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ALAI ORG
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RT EN
ESPAÑOL
- Rusia: "Por las ambiciones geopolíticas de EE.UU., el mundo está al borde de una carrera armamentista descontrolada"
- VIDEO: Así avanza el fuego durante los devastadores incendios forestales de la Amazonia y Bolivia
- China prueba el avión que plantará cara a Boeing y Airbus
- Qué es la CICIG y por qué tiene los días contados en Guatemala
- VIDEO: Las primeras imágenes del Titanic en 14 años
- VIDEO: una indígena brasileña anticipó los incendios en la Amazonia
- El "mayor caso de pedofilia" en Francia: un cirujano violó a cientos de menores bajo anestesia y lo registró en un diario
- Corea-N afirma estar listo para el diálogo o la confrontación con US.
- Las posibles efectos que pueden dejar los incendios de la Amazonía
- Perú vive una jornada nacional de protestas y reclamos de nuevas elecciones generales
- López Obrador rechaza la existencia de grupos de autodefensa en México
- Keiser Report "Se está tratando de ocultar a toda costa una tragedia humana en San Francisco"
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INFORMATION
CLEARING HOUSE
Deep on the US political crisis: neofascism & internal
conflicts that favor WW3
-U.S. No Longer Dominant Power in the Pacific By Paul D. Shinkman
- John Pilger: We are in a WAR SITUATION with
China! By Going U
- Suddenly West is Failing to Overthrow
“Regimes” By Andre Vltchek
- Omar, Tlaib, and the United States of Israel By Kurt Nimmo
- Trump’s White nationalist (Supremacy) Agenda By Bischara Ali EGAL
- What Globalism Did Was To Transfer The US
Economy To China By Paul Craig R
- American Apocalypse: Govt’s Plot to
Destabilize the Nation Works By J W.W
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COUNTER PUNCH
Analysis on US Politics & Geopolitics
George Ochenski Breaking
the Web of Life
Steve Early A
GI Rebellion: When Soldiers Said No to War
Dan Corjescu The
Metaphysics of Revolution
Mark Weisbrot Who
is to Blame for Argentina’s Economic Crisis?
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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
- 2020
Candidates Address Historical Trauma, Missing Indigenous Women & More at
Native American Forum
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PRESS TV
Resume of Global News described by Iranian observers..
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