ND SEP 9
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
... if a household has an income-to-debt
ratio like the federal government, that would mean an annual income of $100,000
and a debt load of a million
dollars...
Politicians from Alexandria Ocasio-Cortez to Dick Cheney are united in
their agreement that deficits don't matter. Of course, that's exactly what a
politician would say. Politicians score points by
spending other people's money, so naturally, they don't want to hear anything
about how prudence suggests it might be a good idea to not spend that
extra 800 billion dollars they don't have.
The Congressional Budget Office
has forecast, the debt load is expected to rise to 125 percent of GDP over
the 20 years. That's higher than the US debt-to-GDP ratio during World War II.
For those who believe huge
debts are no big deal, however, there's still no need to worry. After all, they
say, actual debt payments are still only a minor issue. In fact, they're still
lower than where they were during the early 1990s.
Consider the first graph, for
example. If we take the federal government's interest payments, and calculate
them as a percentage of federal tax revenue, we find 12 percent of what the
feds take in has to paid out as interest. Back during
the early nineties, on the other hand, the feds were paying more than twenty
percent of their tax revenue toward debt service.
See Chart:
But perhaps the most striking aspect of the
growing debt is the fact there really is no end in sight, and the US has no
chance of ever paying off the debt.
We can see this when we compare
the total size of the debt with government revenue.
Comparing Debt to Tax Revenue
Part of the reason people have a hard time
comprehending the sheer size of the debt is because it is often compared to
total GDP size.
So what is the national debt as a percentage of the federal governments
income? Income, in this case is the federal government's tax revenue. And it
turns out by this measure, we're in uncharted waters.
In fact, the national debt is
now eleven times annual federal revenue. And as far as I can
tell, that's the highest it's ever been. (In 1945, the national debt was $251 billion, and tax receipts
were $45 billion, meaning the national debt was 5.6 times tax revenue that
year.)
See Chart:
US FED
Debt as Proportion of Tax Revenue
From the perspective of household management, this
is easier to comprehend. For example, if a household has an income-to-debt
ratio like the federal government, that would mean an annual income of $100,000
and a debt load of a million dollars.
None, of this, however, is likely to convince those who think debt
doesn't matter. Some may still cling to the idea that the government
can just print more money and purchase bonds to drive down interest and make
payments. There are at least two problems that emerge
here. The constant forcing down of interest rates is a problem for those who
rely on pension funds and other investments that need relatively lower-risk
yield to grow.
Now, none of this is an apocalyptic scenario, but it is a scenario in which people with low and moderate
incomes must pay more, and are able to save less and invest less. It's a
scenario of a standard of living that in decline.
….
SOURCE: https://www.zerohedge.com/news/2019-09-08/national-debt-now-more-ten-times-annual-tax-receipts
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Is the American consumer really that healthy?
OR:
Workers are forced to use his
high-cost credit card to cover everyday expenses.
Something is NOT quite right in saying that American consumer really that healthy
Despite The Fed signaling
rate-cuts as far as the eye can see, US credit-card interest rates have soared to the
highest since 2001.
And despite credit card rates
being at 18-year highs, US
revolving debt (largely made up of credit card debt) has exploded in July to
its highest on record.
See Chart:
This
was the biggest MoM jump in
revolving debt since Nov 2017...
See Chart:
Is the American consumer really that healthy? The recent exuberance over retail sales gains seems to
be largely predicated on the back of an average joe who is forced to use his
high-cost credit card to cover everyday expenses.
….
SOURCE: https://www.zerohedge.com/news/2019-09-09/consumer-credit-card-debt-explodes-july-despite-rates-18-year-highs
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"...these flows represent ‘weak’ hands,
clinging to the market and are highly susceptible to selling pressure on
any surprise."
Today's
carnage in the quant space...
See Chart:
MS
Market-Neutral Momentum
That was among the largest in
history (and as big as the tech blowup era)...
Final quant quake post-mortem: Days bigger than
this for momentum & value below. Momentum: financial crisis recovery days,
then #dotcomcrash era.
Value: Today's moves take us back to the tech blowup era. Is this an inflection
point, or just an interest rate proxy trade ... ? pic.twitter.com/4wb7F20ZGO
I am increasingly concerned about the amount
of money flowing into low volatility funds or minimum volatility
funds. I believe that these flows represent ‘weak’
hands, clinging to the market and are highly susceptible to selling pressure on
any surprise.
Low volatility funds,
like the $13 billion SPLV, invest in stocks that exhibit low volatility. .. Minimum volatility funds, like the $34 billion
USMV, attempt to create a portfolio that is less volatile than the market as a
whole.
USMV and SPLV
Assets Under Management Increasing Rapidly Since September 2018
See Chart:
These two products have taken in over $23 billion since September of
last year.
As flows have exited the broader market ETFs…
See Chart:
I assume, as I always do,
that the ETF flows are merely the tip of the iceberg. I am not opposed to these strategies
as a whole, but like everything else, they have their time and place and I’m starting
to get concerned that these funds will be a weak part of the market for several
reasons (they might be a really interesting hedge opportunity,
especially as options are cheaper on these funds than the broad market).
I am increasingly concerned because:
1. I believe the buyers of these funds are
‘weak’ hands.
People are not buying these funds as a gateway to taking on more equity
risk, but because they feel obliged to stay in the market and believe that this is a
relatively ‘safe’ way to do it.
I suspect a lot of
investors aren’t fully aware of what they’ve bought and aren’t aware that these strategies at
times have led the market lower and underperformed the
broad market in a down market.
2. These Funds Have Underperformed in Down
Markets
These funds have a good track record, especially of late, but they can lead the market down. Aside from the
‘weak’ hand theory, where I believe holders of these
funds may be quicker to sell on losses than many expect, there are
other reasons for this.
. What was low volatility before, might not be
low in the future.
. On
the minimized volatility portfolios, I’ve spent too much time with correlation
traders to be overly comfortable.
. What if not being a meaningful component of
a big ETF reduced a stock’s volatility? What we do know, with a high degree of certainty is that
inflows into a fund boost the stock prices of those stocks in the ETF (all
else being equal). This “momentum” effect may be masking what would otherwise
be increased volatility of the stocks in that ETF, or in the worst case, sowing
the seeds for their own future underperformance.
Since I think these funds can do worse in a downturn
and options on them are much cheaper than the broad markets, I’d focus some
hedging attention here.
See Chart:
Money for nothing? I
don’t think so.
….
SOURCE:
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US
equities were mixed with Trannies and Small Caps (squeezing higher) but the big
caps notably underperforming...
See Chart:
This is the biggest daily
divergence between Trannies and Nasdaq since Nov 2018.
A major
short-squeeze lifted stocks out of the open and beyond the EU close...
See Chart:
Most
Shorter Stocks vs. Russell 2000
Notably
diverging from the yield curve...
See Chart:
But, quietly under the surface, there was utter
carnage in the quant space as the
massive divergence between value (lower) and momentum (higher) factors in August
has been unwound dramatically fast...
See Chart:
It seems August's great month for momo was so good,
it's bad, as CTAs are forced to derisk huge relative exposures...
See Chart:
DJ Momentum Factor
NOTE - today's crash was the largest since the quant
carnage in 2009
And
Value-tilts were panic-bid...
See Chart:
DJ
Value Factor
A
massive mean-reversion today...
See Chart:
Momentum
Value
30Y
Yields topped 2.10% intraday, erasing a lot of the gains since Trump's tariff
tantrum...
See Chart:
Trump
Tariff Tantrum vs UST 30Y Yield
The
yield curve steepened notably on the day but 3m10Y remains significantly
inverted...
See Chart:
UST 3m
10Y Spread
The
dollar extended recent losses today, falling to post Trump-tariff-tantrum lows...
See Chart:
Bloomberg
Dollar Index down
As
Bloomberg's Todd White details, Bitcoin
is increasingly moving in an opposite direction to China’s currency -
suggesting it may have become a refuge for people hedging the yuan’s
depreciation.
See Chart:
Despite
the drop in the dollar, PMs and copper slipped lower as crude surged...
See Chart:
Finally,
we note, one of these things is not like the other...Stocks +19% YTD, EPS expectations -4% YTD
See Chart:
….
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Printing money to buy bonds
& recycle the fake Econ has its limits: DEBT is one
The bond issuance frenzy continued
for another week, as sixteen issuers priced $13.7 billion following last
week’s historic calendar which saw $75 billion in debt sell like hotcakes.
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Dumping the USD is the next effect.. we will see it: Bye bye
USD hegemony
====
Some investors & softbanks feel
hurt the neoliberal collapse
Should WeWork pull its IPO, it faces
the loss of up to $9 billion that it had already factored in for future growth.
There is, however, a bigger problem looming: the company has a gargantuan $47
billion in lease liabilities.
====
US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
Buying elections is not
democracy. Now is the right time to drop this nasty fraud
...and by
“secure” they mean to manipulate
the results of the election in any way possible to get the outcome they desire...
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In current political crisis it danger legitimacy & peaceful
aftermath of Elect.
====
Climate change is another pendulum on our
head.. why all of them together?
It is
being called “the Pacific marine
heatwave of 2019”, and officials are warning that it could have
very frightening implications if
it does not dissipate soon...
….
Is luck of prevision
one of the reasons? With ,mother nature
we can’t play games as we do with State
expenses in weapons & wars to burst the globe
====
"It's the frequent use we're most
worried about,"
----
Real marihuana is
not addictive, & doesn’t damage you, only expand senses The problem with US
marih is that it growth in attics, not under the sun. To give it consistence we
added crack, that is why we fell a shock when smoking. Marihuana from the
amazon-jungle is very soft. With 3 leaves you can enjoy a symphony for 3 hours
++. With marihuana from attics you will never see the “monio rojo” : the flower
of the plant. We’re smoking venom in our cities. In Paris –in front of museum-
you pay $25 to 50 for 1 pitillo of Peru Marih, They role 2 leaves of semi-dry
marih in front of you..into a little piece of rice paper. Then you can buy
3 or 4 pitillos depend on how many
people are with you.
====
Not results yet.. when kids
& parents abuse go to Court we will see real results
"The president has made it very
clear that he’s going to use every
tool available..."
====
Instead of
clear reporting on Illinois' greatest loss ever, we’ve seen perhaps the most
glaring example yet of how the state’s
finances can be misunderstood, misreported and intentionally distorted.
See Chart:
….
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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
Reports
that China has signed a long term
agreement to buy large quantities of Iranian oil in defiance of US sanctions will
weigh on global crude prices and further complicate US-China talks.
====
The rebellion paid by DNC got
nasty effects:
"The most worrying thing is that
the situation is not likely to turn around in the near future."
====
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:
España ¡Aquí no hay playa! Francisco Muñoz
US: Renacimientos David Brooks
====
ALAI ORG
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===
RT EN
ESPAÑOL
- Los talibanes: "Si Trump quiere detener las conversaciones de paz, tomaremos el camino de la yihad y lucharemos"
- Pionyang lanza dos proyectiles no identificados al mar del Japón
- "Le diría al Pablo Iglesias de hace 5 años: '¡No te metas en esto, sigue dando clases!'"
- Nuevos iPhone, MacBook, Watch y Tag: todo lo que se espera del evento de Apple
- Сhina presenta una enérgica protesta ante Alemania debido a una reunión entre su ministro de Exteriores y un activista de Hong Kong
- Coca: La guerra por la erradicación Por que la Coca y no el USD q mata Mill
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INFORMATION
CLEARING HOUSE
Deep on the US political
crisis: neofascism & internal conflicts that favor WW3
-U.S. Loses Asia-Pacific as Full Spectrum
Dominance Continue By Matt Ehret
-9/11 After 18 Years By Paul Craig Roberts
Trade Wars Are a Fool's Game By Eric Margolis
The Capitalists Are Afraid By Chris Hedges
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GLOBAL
RESEARCH
Geopolitics & Econ-Pol
crisis that leads to more business-wars from US-NATO allies
-9/11
after 18 Years. “Hard Evidence Cannot Prevail over a Transparent Official Lie”
By . Paul Craig
Roberts
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DEMOCRACY
NOW
Amy Goodman’ team
-“These
Negotiations Have Not Been About the Afghan People”: Trump Calls Off Peace
Talks with Taliban
-Hurricane
Dorian Was Fueled by Climate Change. Why Isn’t the Mainstream Media Making the
Connection?
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PRESS
TV
Resume of Global News described
by Iranian observers..
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