ND NOV 23 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 US
Econ farce (QEs & Bailouts) got a new name: ‘conundrum’
"We are currently facing a conundrum."
Goldman's
recent assessment, pointing out that if one looks at a breakdown of S&P
500 total returns, we can make two observations: First,
since October 2018, the market’s performance has been driven entirely by
earnings growth, while P/E has been a negative contributor: end-2018 recession
fears and Fed tightening are factored into the numbers. Second, and more importantly, the Fed’s dovish shift in early 2019
facilitated an extraordinary P/E expansion. Indeed, as shown in the chart below, since January 2019, the biggest
contributor by far to S&P returns has been PE expansion.
See Chart:
S&P
500 total return breakdown: from FED Dovish in early 2019 to extra P/E expans
Now look at the ‘conondrum’:
This conundrum gets even more
bizarre when one considers that equity fund outflows in 2019, the best year for the S&P since 2013,
are on pace to surpass even the financial crisis year of 2008 some $209 billion
in funds was redeemed; meanwhile
so far in 2019, the YTD total is a record $215 billion... and yet the S&P keeps hitting new record high after record high.
What gives?
See Chart:
Global Equity
& Bonds Funds Flows
https://www.zerohedge.com/s3/files/inline-images/record%20equity%20outflows%202019.jpg?itok=zeldnPUr
Why is the above important? Because to
have a view on asset returns in 2020 one has to understand what caused the
market's impressive 24% increase in 2019. Here, as SocGen notes, the question
to ask is "what drove this P/E expansion since the
start of the year, apart from the Fed’s dovish shift? And is that sustainable?
Buybacks and a lack of market liquidity played a major role."
The
answer, for those who have been reading our weekly observations on this
big "conundrum", is well-known. For
everyone else, SocGen notes that Trump’s late-2017 Tax
Cuts Tax Cuts and Jobs Act marked a shift and contributed massively to the wave
of share repurchases over the past two years. The amounts steadily
increased to a record high in 2Q19 – equivalent to a
3.2% buyback yield, which comes on top of a 2.2% dividend yield.
Meanwhile, the S&P 500 return on equity is
currently at an all-time-high.
See Charts:
Here, it is also worth pointing
out that the vast majority of these buybacks were funded
by new debt issuance, most of it in the BBB bucket. Ironically, none
other than former
NY Fed president Bill Dudley was lamenting
last week the "BBB-Bulge", warning that trillions in fallen angles
could soon flood the junk bond market. They certainly can, and the irony
is that the next bond crisis will be the result of
massive issuance to fund buybacks, which in turn sent stocks to all time highs and boost management cash compensation to
record levels. Needless to say, the reverse will
not be pleasant for equities.
See Chart:
S&P
500 net debt vs share buybacks
Besides,
"the lack of market liquidity, as
measured by S&P 500 turnover – the ratio of trading volume vs free float
market capitalization – has exacerbated the impact of share repurchases on US
equities", according to the French bank. Indeed, trading
volume has been on a downtrend since 2008, and Socgen expect this to continue.
See
Chart:
Reduced trading liquidity in US equities (for S&P500) AT AN ALL- TIME LOW
Continue
reading and watching charts and you will
conclude in a mere HOPE and PRAY “that
central banks keep it all under control without i) sparking hyperinflation or
ii) resulting in too much social conflict and unrest over the wealth inequality
they create, since such an outcome would promptly result in a substantial amount of guillotines appearing on town
squares, and even more promptly ending any hopes for a fourth, or any
for that matter, mini bull cycle”.
….
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LOS INVERSORES TEMEN EL FUTURO QUE VIENE: LA
RECESION
"...its largest weekly draw since Lipper
began providing weekly flows back in 1992."
Investors are preparing for a further deceleration in the US economy by plowing more than $262.1 billion into taxable
bond funds (including ETFs) year to date, versus $150.3 billion into equity funds during the same
period.
"Fund investors
have been in a risk-off mode for most of 2019 despite
stellar stock market returns, injecting $430.8 billion into money market funds
year to date. However, for the Lipper fund-flows week ended November 20,
2019, investors were net redeemers of money market funds—withdrawing $25.3
billion (their largest weekly net outflows since April 17, 2019).
The
conservative nature of mutual fund investors continued. For the fortieth consecutive week,
conventional fund (ex-ETF) investors were net redeemers of equity funds,
withdrawing $3.7 billion during the most recent fund-flows week. In contrast,
ETF investors continued to be a little more aggressive, injecting net new money
for the sixth consecutive week into equity ETFs (+$898 million this past fund-flows
week). Combined with the $898 million inflow for equity ETFs, this left
investors as net redeemers of equity funds (-$2.8 billion).
Year to
date, the difference between conventional equity fund investors and equity ETF
investors is quite striking, with
the former withdrawing a net $210.9 billion, while the latter injected a net
$60.6 billion. That said, both investor types have gravitated towards fixed
income, with conventional fund investors and ETF investors injecting $157.2
billion and $104.9 billion, respectively, year to date. For the most recent
fund-flows week, fund investors (including ETFs) were net purchasers of taxable
fixed income funds (+$12.4 billion, their largest weekly net inflows since
February 4, 2015) and municipal bond funds (+$2.0 billion).
With the Federal Reserve cutting its key lending rate for the third
time this year in October, investors continued their search for yield and
appeared to be willing to put a little more risk on. Core Bond Funds (+$92.4 billion,
including ETFs) have attracted the lion's share of net new money year to date,
followed by Core Plus Bond Funds (+$26.9 billion), Multi-Sector Income Funds
(+$26.0 billion), and Corporate Debt BBB-Rated Funds (+$21.5 billion).
Investors
looking for bond funds that have a liberal investment mandate with a go-anywhere feel to them have been looking at flexible income and flexible portfolio funds,
which have taken in a net $21.9 billion combined. For the most recent
fund-flows week, flexible funds attracted the largest draw of net new money of
any taxable fixed income macro-groups, attracting $5.7
billion (its largest weekly draw
since Lipper began providing weekly flows back in 1992)," Lipper
Alpha Insight wrote.
See Chart:
Weekly Estimated
Net Flows of Flexible Funds, Including ETF (Jul 3 to Nov 20-19)
Investors
have been defensive since late 2018 when the US economy entered its fourth
deceleration in growth since 2009.
See Chart:
Though equities
have hit new highs on "trade optimism" and soaring central bank money
printing, a large divergence has appeared where equities have already priced in
a strong recovery for early 2020.
See Chart:
Equities
are pricing in strong rebounds in PMLs
The risk today, and that's why
smart money continues piling into bonds, is that the US economy continues to
decelerate into early 2020, as it could appear the
equity market has priced in a recovery that may not pan out, which could lead
to another repricing event for stocks, in the coming months.
….
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TAX THE
RICH: The one who did it perfectly was FDR: the
greatest US President
Before 1913 there was no income tax, and the United States was a much freer country. Initially, the
government sold the federal income tax to the American people as something only the rich would have to pay...
====
US DOMESTIC POLITICS
Seudo democ duopolico in US is
obsolete; it’s full of frauds & corruption. Urge cambio
REPUBLICANOS EN FAVOR DEL
IMPEACHMENT: 3rd option inside REPs emerged
Targets swing-district Republicans
and presents itself as a veterans
group to local media outlets.
====
FASCIST SPIRIT IS BACK: one single party rule is the beginning
Even in our polarized political
paradigm, there is one thing both
republicans and democrats can agree on: The federal government should have vast snooping powers and conduct
mass surveillance on everyone.
====
DO WE HAVE A TERRORIST EMPIRE?
But which
ones are authentic grassroots
movements, and which ones have been hijacked by outside powers or are being co-opted by the United States Department
of Regime Change?
====
Here is
hollowed-out America, an economy of ever-greater
financial wealth piling up in the hands of the few while tens of
millions of wage-earners can't
afford what was available to everyone, even the working class, in previous eras.
====
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
"The
only solution is to keep injecting liquidity, which explains why around 60% of
central banks are easing globally. Higher interest rates and QT are virtually
impossible in a world of debt."
….
La caja de Pandora se abrió y no hay modo de detener el terror que trae.
====
Los chinos dicen lo
que todos sabemos pero que no queremos decir por temor
Yi's
comments were referencing an escalating US-China tit-for-tat tariff trade
war.
….
TRADE es solo un pelo del cerdo.. del
cerdo que ya no vuela a china
====
Iran's military simulates Persian Gulf crisis over area the
size of California.
====
The
principle of “rising expectations”
helped destroy the Berlin Wall and the Soviet empire 30 years ago,
but there’s a corollary principle
of “crushed expectations” that is similarly powerful in sparking popular
revolutions...
….
If all US massacres worldwide would’ve Catastrophic price US owe
trillions
====
SPUTNIK
and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars
& danger of WW3
- Why
West Bank Settlements' Status Triggers Legal Controversies & How US Shift
May Affect the Debate Devolver territorio PAL y formar con
ellos 1 Estado Federado: Pos S.
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NOTICIAS
IN SPANISH
Lat Am search f alternatives to
neo-fascist regimes & terrorist imperial chaos
RT EN ESPAÑOL
-La
presidenta de facto de Bolivia anuncia que la promulgación de la Ley de
convocatoria a nuevas elecciones se celebrará este domingo https://actualidad.rt.com/actualidad/334695-presidenta-facto-bolivia-anunciar-promulgacion-ley-convocatoria-elecciones
- Iván Duque tras el "salvaje"
atentado en el Cauca: "Vemos las manos de grupos armados organizados que
han pretendido pescar en río revuelto" https://actualidad.rt.com/actualidad/334686-duque-atentado-salvaje-cauca-grupos-armados-pescar-rio-revuelto
- Diputada chilena Camila Vallejo: "América
Latina no ha aprendido nada respecto a los golpes de Estado" https://actualidad.rt.com/programas/entrevista/334631-camila-vallejo-diputada-partido-comunista
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PRESS
TV
Middle East n world news
- Still hope for US-China deal this year: Official
- Biden urges US Senate to try and oust Trump
- Iran's Kish island hosts global investors at KishINVEX 2019
- Palestinian toddler suffers head injury in Israeli settlers’ attack
- Iran says autumn rainfall above 51-year average
- ‘Kissinger’s warning of US-China war unlikely’
- ‘Turkey seeks alternatives if US F-35 jets not acquired’
- Russia: US military presence hinders our Japan ties
- Foreigners to be in trouble if found involved in riots: Iran
- Netanyahu's own party in secret talks to oust him
- US major obstacle to Lebanon govt. formation
- PROGRAMS
- Bolivia’s Military Coup
- US impeachment
- Fueling Iran's protests
- Processed Food
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