ND
SEP 11 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
Let’s see the last charts
The dollar
surged today, but only back to the top of its recent narrow range...
See Chart:
Bloomberg
Dollar Index
Mixed
picture in commodity-land with oil worst on the day and PMs making modest gains...
See Chart:
WTI was
clubbed like a baby seal despite big inventory draws as headlines suggested
Trump was looking to cutback on Iran sanctions...
See Chart:
Finally, some fun-durr-mentals. As Gluskin Sheff's
David Rosenberg tweeted today, "
To little fanfare, the OECD leading indicator fell for
the 19th straight month in July, hitting its lowest level since September 2009.
Recession pressures continue to build. "
See Chart:
OECD Leading Indicator
Probably
nothing??
IN FACT: TOO MUCH DECADENCE!!
….
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"...
what started with simple short covering has spread into long selling, and the
momentum unwind is now global."
See Chart:
2-Day Return of Sector – Neutral
Momentum Factor
The four factors governing the unwind according to the MS
strategist remain: i) volatility (VaRs), ii) P/L,
iii) the calendar, and iv)
fundamentals.
1-Higher
portfolio volatility (VaR) means
less ability to take risk, and all else equal this should mean
lower leverage and a continued de-grossing.
2-Most investors are still comfortably up on the year, which should slow a
de-grossing. But given the size of this P/L shock and
a rising focus on year-end, investor sentiment is poor and ability to buy dips
is deteriorating.
3-In Morgan Stanley's client conversations over the last two days, most
investors are looking at this largely as a positioning-driven move, and
not seeking to structurally change their portfolios. "This means
that without a fundamental catalyst, this unwind is likely on the order of
weeks instead of a multi-month regime shift", according to Metli.
4-That said, portfolios are fragile – should there be a
fundamental shock, this could continue to be very ugly and last much longer.
As a result, Morgan Stanley believes traders should be
sensitive to other potential accelerants of an unwind:
- The unwind could put more pressure on quant P/Ls, lessening their ability to provide liquidity and market making services to the larger market. The underperformance of sector-neutral momentum versus momentum that has sector tilts (sector-neutral more quant vs sector-tilt more discretionary) is worrisome here, according to MS.
- CTAs and Risk Parity funds that are long bonds could need to sell if bond yields continue to rise, pushing bond yields higher still which could exacerbate the short squeezes in Value and the laggard leg of Momentum.
- Derisking leading to more aggressive selling of longs, which can put pressure on broader markets and impact a broader set of investors (i.e. a replay of 4Q18).
With that in mind, here is how the unwind looks so far
compared to prior moves:
The median momentum move from peak to trough typically lasts
34 trading days and sees a -25% return (of which -20% comes from a rally in the
short leg). This
selloff has lasted only 26% of the typical duration of a selloff, but has
already moved 75% of the way to the median in terms of price.
See Chart:
Current Momentum Selloff relative to
previous events
See table added to previous chart:
The above periods are selected by taking selloffs of 15% or
more, separated if there was a 10-15% rally in between. But some of these
declines can cluster, and cumulative momentum declines can get much worse with historical max
drawdowns from peak of -30% or more.
See Chart:
Momentum
Rolling 1-year Max Drawdown
Notably SPX returns were typically positive after large
Momentum declines, either way you measure it.
Yet while JPMorgan and Morgan Stanley disagree on the
duration of the current move, they both agree on one key feature of the recent
violent whiplash: namely, that this move is incredibly painful because both
the longs and the shorts are moving counter to positioning –
the long leg of Momentum (reflective of consensus longs – Tech, Defensives) is
selling off and the long leg (reflective of consensus shorts – Cyclicals,
Value) is rallying. In fact, according to Morgan
Stanley, over the last week the long leg selloff has been a 1 standard
deviation event, and the short leg has rallied 4 standard deviations. And the
punchline: "there have only been 7
other weeks since 1999 where both the long and the short leg converged by more
than 1 standard deviations each."
Yet the disagreement between the two quants prompts
reasserts itself as Metli issues a warning to Kolanovic, who sees a
continuation of the current move as a bullish outcome, one which will
ultimately lift most of the neglected risk assets: to
the Morgan Stanley strategist, that could not be further from the truth,
because "what started with simple
short covering has spread into long selling, and the momentum unwind is now
global. This means it is impacting a broader array of
investors and could drive spillover into overall market if it persists."
See Chart:
Global Momentum Performance
In parting, Morgan Stanley
notes that while the price action has been violent, and the likelihood of a
protracted move is small, the bank's quants warn that only a small part of the excesses it flagged
as risks in "What
if Everyone is Wrong?" have been worked off. As such, factor valuations still remain painfully
stretched...
See Chart:
Factor Valuations
... and the flight to safety trade
has hardly been fully unwound.
See Chart:
Rolling 1 Y return of 10 ‘Fligh to Safety ‘ Relative Value Trade
At the end of the day, it all goes back to central banks,
and how much longer they will be able to delay the moment of historic mean
reversion, i.e. to before the moment where central
banks became equity market activists, and which - if Albert
Edwards is right - WILL SEND THE S&P BACK
TO THE "GENERATIONAL LOW" OF 666, IF NOT LOWER.
….
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... nobody believes
bubbles can burst until it's too late to get out unscathed.
See Chart:
….
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US
DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds
& corruption. Urge cambio
...then quickly deletes tweet after
furious backlash.
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SCOTUS
grants stay of both July 24 and September 9 injunctions against Trump
administration rule barring asylum from those who didn’t first apply in a
"third country."
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Once upon a time, the primary mission of our hospitals was to help
people, but today they have become
vicious financial predators...
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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
"we
have agreed, as a gesture of good will, to move the increased Tariffs on 250
Billion Dollars worth of goods (25% to 30%), from October 1st to October
15th."
…..
Again
the illegal piracy language & blackmail.
I guess China will postpone the Deal-time until honest ‘bona fe’
precedes any talk.. that will affect both but much more the US Economy and
Trump re-election. The piracy garbage will be
placed into trash can. Real diplomacy will come with next US POTUS or
never if not changed. Dicen
que con paciencia y saliva el elefante se comió 1 hormiga Este no es un
elefante es un dragón y el otro una hyena loca easy to be burned Trump-1 can’t acuse China of
US debacle, he has to acuse his own POTUS: T-2
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"I
find myself surprisingly skeptical, probably for the first time"
... "WE ARE AT THE END OF THE EFFICIENCY OF
MONETARY POLICY."
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The
Pentagon is desperate to show it's
presence can be justified AS IRAQI PARLIAMENT MOVES TO EXPEL
AMERICAN FORCES.
….
US bombing will accelerate the take
out of infested’ US army in Irak
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO
..Focus on neoliberal expansion via wars & danger of WW3
-‘There's
No End to This’: 18 Years Later, 9/11 First Responders Still Seek Medical
Support SAUDIS &
US terrorists must be charged
-Trump:
US to Move Tariff Increase on $250 Bln Worth of Chinese Goods to 15 Oct He will never learn the basics of diplomacy. He is
responsible for our ‘trade’ crisis
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NOTICIAS IN SPANISH
Lat Am search f alternatives to neo-fascist regimes &
terrorist imperial chaos
ALAI
ORG
====
RT EN ESPAÑOL
- Trump señala que Bolton "se pasó de la raya" respecto a Venezuela
- EE.UU. aplaza nuevos aranceles en respuesta a un gesto chino
- Corte Suprema de EE.UU. autoriza restringir el asilo a migrantes
- La UE y México cerca de firmar "uno de los más avanzados" acuerdos comerciales, tras un año de renegociaciones
- Venezuela presentará ante la ONU "información irrefutable de actos terroristas" gestados en Colombia
- Incidentes, heridos y detenidos en Buenos Aires durante una manifestación en reclamo de la 'Emergencia Alimentaria'
- Trump: "Tuve una excelente conversación telefónica con Andrés Manuel López Obrador"
- Aviones de EE.UU. lanzan 36 toneladas de bombas contra una isla iraquí "infestada por el EI Pasión perversa por el genocidio
- Una joven gana una competencia de natación y es descalificada por usar un traje de baño "revelador" Hay que revelar la pedofilia de monjas y curas en el convento Santa Catalina de Arequipa.Peru. Un cementario de fetos se encontró en los tuneles que conectan el convento con la Iglesia San Fco
- El Zoom EE.UU. - Afganistán: promesas incumplidas
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism & internal
conflicts that favor WW3
-Trump Gives Peace a Chance? By Finian Cunningham
-Western media portrays Hong Kong hooligans as
heroes By Andre Vltchek
-Many Things Most Americans Never Heard About
9/11 By Paul Craig Roberts
-We are all hostages of 9/11 By Pepe Escobar
-Violence begets violence and intolerance
breeds intolerance By César Chelala
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COUNTER PUNCH
Analysis on US Politics & Geopolitics
Andrew Bacevich Reflections
on “Peace” in Afghanistan
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GLOBAL RESEARCH
Geopolitics & Econ-Pol crisis that leads to more
business-wars from US-NATO allies
-Chile,
September 11, 1973: The Horrors of ‘the First 9/11’ Are Routinely Overlooked By Shane Quinn,
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DEMOCRACY NOW
Amy Goodman’ team
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PRESS TV
Resume of Global News described by Iranian observers..
ISR: Corporate
corruption
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