jueves, 18 de junio de 2020

JUN 18 ND SIT EC y POL



JUN 18 ND SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social + Capit-compet in Eco

California just made wearing a mask while in public legally mandatory...
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ZERO HEDGE  ECONOMICS
Neoliberal globalization is over. Financiers know it, they documented with graphics

This was not only the first shrinkage in the Fed's balance sheet since the week ended February 26, but also the biggest drop since May of 2009.
After three months of record gains, which saw an increase of $3 trillion to $7.2 trillion, the Fed's balance sheet has finally posted its first weekly decline since the start of the corona crisis according to the latest H.4.1 statement.
SEE CHART
Fed Balance Sheet

This was not only the first shrinkage in the Fed's balance sheet since the week ended February 26, but also the biggest drop since May of 2009.
SEE CHART:

The drop, however, was not due to a reversal or even slowdown in QE which continues almost every single day, with the Fed adding over $100 billion in Treasurys and MBS, but due to an $88 billion decline in outstanding repos to $79 billion for the week ended Jun 17, 2020, as well as a $92 billion decline in liquidity swaps to $352 billion.
SEE TABLE:

With the S&P500 closely tracking the Fed's balance sheet in the past three months, which has served as the primary factor behind the rebound in the market, the latest weekly drop coincides with the period of heightened volatility in the past two weeks.
SEE CHART:
S&P 500  VS  FED Balance Sheet

The shrinkage comes at a time when the Fed's monthly liquidity injection has been tapered to approximately $120 billion, which suggests that while the balance sheet is likely to resume growing in the next week, it will be at a more gradual pace.
SEE CHART:

It also means that for the stock market to surge from this point on, Powell will need to find another justification to expand the Fed's QE aggressively.
Finally, those keeping track of how much corporate bonds the Fed has bought, the latest total for the Fed's Corporate Credit Facilities LLC which includes purchases of both ETFs and corporate bonds, the Fed disclosed that as of June 17, there was $6.6 billion in book value of holdings (the Fed does not break out how many actual bonds it has bought vs ETFs).
SEE TABLE

Having started corporate bond ETF purchases on May 12, this means that the Fed has bought on average roughly $1.1 billion per week, a pace which has been more than sufficient to result in record fund inflows into various investment grade and junk bond ETFs.
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If "Leading Indicators" lead, then the stock market has a problem...
See Chart:

But stocks barely budged (lifted a little late on after Trump said talking with Dems about extending PPP)... Nasdaq outperformed (up 5 days in a row), Dow lagged with S&P and Small Caps scrambling to hold unchanged...
As stocks saw one of their quietest days of the year (range-wise)...
See Chart:

"Most Shorted" Stocks drifted lower today but again a narrow range...
See Chart:

The Virus Fear trade dropped notable (less fear) at the open but rallied (more fear) into the close...
But while stocks were quiet, the B-dollar Index jumped (cable weakness), this was its 2nd biggest daily jump in over 2 months...
See Chart:

And Treasuries were bid (with 10Y yields back below 70bps)...
See Chart:

HY Bonds drifted lower once again...
See Chart:

WTI rallied up to $39 today...
See Chart:

Finally, the decoupling between the market and the economy has never been wider...
See Chart:

As Bloomberg notes, earnings dropped in the first quarter by 16%, the biggest decline since 2008, and are poised to fall again in the second quarter because of business disruptions tied to the coronavirus. Yet the S&P 500 has recovered most of its 34% plunge after setting a record in February.
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Here the analysis on US Econ is OK  but his anti-China view I don’t like it. He wanted a separate economy in Hong Kong with USD and that project was defeated by Yuan Eco
"Markets driven by euphoria never end well. The US stock market today is in la-la land..."
The chart below is a great illustration of how insanely disconnected equity prices are from their underlying fundamentals. S&P 500 profit margin estimates are plunging! “Buy the dip” investors are not paying attention and have simply been too eager to call the bottom.
SEE CHART:

US Imbalances
Aggregate enterprise value to EBITDA for the S&P 500 has never been higher. The set-up reminds us of early February when stocks were also grossly misaligned with economic reality. We think we are about to see another reckoning moment which will mark the second leg of the bear market.
SEE CHART:
Markets driven by euphoria never end well. The US stock market today is in la-la land. It is discounting a new expansion phase of the economy at the same time as a major recession has only just begun.
Money Printing vs.  Economic Activity
Money printing does not fix the economy. It is visually astonishing how divergent the Fed’s balance sheet assets and the Weekly Economic Index (WEI) has been. Developed by the Federal Reserve of New York, WEI measures activity by combining a series of other baseline indices such as same-store retail sales, consumer sentiment, initial jobless claims, temporary and contract employment, steel production, fuel sales, and even electricity consumption. The chart below shows clearly that this index hasn’t experienced any level of improvement since the March lows, a drastic comparison to the recent vertical growth in Fed’s assets.
SEE CHART:

We are also seeing a significant liquidity withdrawal due to the historic debt imbalance today. The Fed’s weekly monetary stimulus has not only been drastically reduced but is also being dwarfed by the amount of government debt growth. We just had the largest monthly net issuance of Treasuries in history, $760B in May alone. This number surpassed the Fed’s quantitative easing by over $300B! It is the largest net decline in Fed assets vs. government debt since the repo crisis started back in September of 2019. The government debt is more than crowding out all the new liquidity.
SEE CHART:
Fed Stimulus vs. Government borrowing

In our view, the Fed is incapable of injecting enough liquidity to quell the losses in asset values associated with what was $250 trillion in global debt at a record three times global GDP before the Covid-19 crisis even began without also triggering a fiat money crisis. This is what we call a liquidity trap.

Another part of the market and economy that looks particularly fragile is SMALL CAP STOCKS. These stocks have never been so indebted relative to EBITDA. In terms of valuation, the Russell 2000 stocks now trade at a historic 15x EV to 2020 EBITDA estimates! There is a stunning and totally unwarranted level of optimism still priced into the markets today.
SEE CHART:
Us Small CAP Stocks

US labor markets unexpectedly improved last month but were not enough to support the bullish narrative of late. To put things into perspective, since the market peak we saw nonfarm payrolls drop by close to 22 million employees. May’s positive number, the best monthly change ever, was an improvement of close to 3 million payrolls, but even the Department of Labor questioned the validity of these numbers. The DOL said it believed the unemployment rate was understated in both April and May while May indeed did register improvement. In any case, we would need 7 months like the prior to regain the same level of strength in labor markets prior to the virus outbreak. The timid “V” shape recovery looks nothing like a “rocket ship” as Trump referred to in one of his recent tweets.
SEE CHART:
US Employees on Non-Farm payrolls

The current monetary stimulus is severely amplifying the wealth gap problem in the US. When inverted, the Fed’s balance sheet asset has followed the share of total assets held by the bottom 50% remarkably close. Logically, this relationship makes sense. As shown in the chart below, since QE 1 started, the less financially privileged parts of the society have suffered from a shrinkage of wealth relative to the overall pie. If the economy continues to prove uncapable of growing organically, further monetary stimulus will be necessary and therefore only exacerbating the inequality problem.
SEE Chart:
Fed Assets (inverted) vs. The Bottom 50%

Crescat’s New Precious Metals Activist Campaign with Quinton Hennigh as Advisor
We are encouraged that small cap precious metals miners have recently started to outperform big caps. The junior-to-senior ratio is exactly where it was ahead of the 2016 gold rally. If you recall, back then, after 6 months: the GDX ETF (seniors focused) went up 87% while the GDXJ ETF (juniors focused) was up 137%!
SEE CHART:
Precious Metals Juniors vs. Seniors
Crescat’s Precious Metals SMA strategy with its overweighting in more of the smaller cap names, including many of Quinton’s favorites, handily outperformed its benchmark in May rising 18.2% for the month versus 5.7% for the Philadelphia Stock Exchange Gold & Silver Index.

CHINA
In our analysis, the Chinese Communist Party is running a $42 trillion banking Ponzi scheme that is ripe to implode in a currency crisis. The US and other highly leveraged democratic developed economies are in bad shape economically today, no doubt, but its peoples need not fall into a Thucydides’ trap, i.e., to be unduly threatened by a perceived rising power. 
Hong Kong sits on one of the most overvalued property markets in the world that has just started to burst. For instance, Hong Kong office properties are now plunging by 24% YoY, the worst decline since I the Global Financial Crisis. One major difference, however, is that Hong Kong’s under-reserved massive $3.3 trillion banking system was not 9 times the size of its economy back then.
SEE CHART:
Hong Kong Office Properties

Hong Kong maintains sufficient foreign reserves to maintain the value of its currency. We believe the reserves supporting both the yuan and Hong Kong dollar are encumbered. Necessarily, these reserves are the collateral in the global interbank FX markets that have been posted in defense of these currencies against years of Chinese capital outflow pressure. We believe China and Hong Kong are not netting the collateral posted for their short FX positions from their FX reserves. A currency crisis is potentially just a margin call away.
SEE CHART:
Hong Kong Banks  (collapsing)

With the Covid-19 shutdowns, we just experienced an economic shock likely worse than any single quarter of the Great Depression. It was made worse by the pre-existing imbalances that were threatening to send the economy into a recession of their own accord as had been forewarned by Crescat’s macro model.
Persistent, bi-partisan abuse of Keynesian policies has been a poor substitute for free market capitalism. The lesson is clear. Excessive and ongoing government intervention only creates mounting non-productive debt that stifles future real economic growth. Credit imbalances in the world today are at a historic high relative to global GDP.
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US  DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio

"This is only half of the line of people waiting to have unemployment claims resolved..."
As the US labor market recovery stalls, the second wave of layoffs is underway. The overhyped nonfarm payrolls "recovery" and bounce in retail sales (ignoring the lack of 'V' in industrial production), was reversed on Thursday morning when 1.508 million more Americans filed for unemployment benefits.
With plunging demand and fractured supply chains - companies are not highering at the pace that would support President Trump's and Wall Street's claims of a V-shaped "rocket ship" recovery in economic growth and employment. Leading indicators are showing the economy barely bounced after the most significant crash in six decades. 
SEE CHART
Unemployment in  the US

Any green shoots observed in the last month will be stifled by stubbornly high joblessness through the summer, resulting in slower recovery and the shape of the recovery resembling a "U" or "L." 
So far, about 29 million people are collecting unemployment insurance, while millions of others have yet to receive any checks.
The cost of late unemployment benefits will not just damage the labor force and recovery - but has already resulted in thousands of people swarming a government building in at least one state - pleading for help as the economic depression crushes their household finances. 
This is not a Trump rally at the Kentucky Capitol in Frankfort on Wednesday - but a massive unemployment line, filled with people who have filed but are unable to get their unemployment insurance checks. 
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The Trump administration failed to
adequately justify terminating the program...
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The Presidential Candidate & 12-Term Congressman is Back
Dr. Ron Paul’s
Urgent Message for Every American
Most Americans will be blindsided by what’s about to happen… But not those who learn the critical steps necessary to protect yourself and your family from what’s coming next.
LISTEN VIDEO
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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

...border disputes existed since 1947...worth understanding the importance of Tibet - the major source of waters for China, India, Pakistan, Nepal, Myanmar, Laos, Thailand, Cambodia, and Vietnam.
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There is a one-in-three chance that at least one of four major tail risks will occur within the next decade: a major influenza pandemic killing more than 2 million people; a globally catastrophic volcanic eruption; a major solar flare; or a global war.
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Iran is one of the most systemically anti- racist countries on the planet...
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Red message hast to be fit with title, unless it is Irony, otherwise I will make the correction.
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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

ALI NET ORG
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INFORMATION CLEARING HOUSE
Deep on the US political crisis: neofascism & internal conflicts that favor WW3

-The Global Reset – Unplugged  By Peter Koenig
-Get Rid of the Presidency  By Matthew Stevenson
-Speaking of Freedom  By Tom Feeley
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VOLTAIRE NET ORG   https://www.voltairenet.org/en

News in Brief
Turkey has imposed its currency, the Turkish lira, in the areas it occupies in northern Syria.
The governorate of Idleb, controlled by Al-Qaeda [1], became in effect an extension of Turkey mirroring the way in which the Turkish Republic of Northern Cyprus on the island of Cyprus was taken over by Turkey in 1974 during Operation Attila.
The annexation of Idlib is concomitant with the implementation of the siege of Syria by the West (Cesar Act) [2], the coordinated burning of Syrian fields by US forces and jihadist groups [3], and the announcement of Iran’s turnabout to align with Turkey in Libya [4].
Such a move corresponds to the “National Oath” [5], written by Mustapha Kemal Atatürk, against the Peace Treaties of the First World War. Plans to annex other Iraqi, Syrian and even Greek regions are also highlighted in the document.
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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

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