Nueva Democracia: NOV 7 2021 ND SIT ECON y POL Part 1 & P 2

NOV 7 2021 ND SIT ECON y POL Part 1 & P 2

ND denounce-neoliberal debacle y propone State-Social + Capit-compet in Eco

ZERO HEDGE ECONOMICS

Neoliberal globalization is over. Financiers know it, they documented with graphics

Quick News:

Using US Courts to Burn Money, for Free, Forever

BY Joshua Moon

I have been sued by the same woman six times pro se in forma pauperis.

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It's The "Most Honest Market We Have" - Peter Thiel Warns Bitcoin Exposes Our Current "Crisis Moment"

"What it is telling us is that we are having a crisis moment,"

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Did The Fed Just Set The Stock Market Up For A Crash?

Authored by Lance Roberts via RealInvestmentAdvice.com,

Got bonds?

Market Back To Extreme Overbought

As noted last week, the more significant concern remains the underlying technical condition of the market. While the rally has been impressive, rising to all-time highs, the market is now back to more extreme overbought levels.

Furthermore, our “money flow buy signal” is near a peak and slightly triggered a “sell signal.” However, with the MACD still positive, the signal suggests a consolidation rather than correction. However, a confirming MACD often aligns with short-term corrections at a minimum. Therefore we will watch that signal closely. Also, this entire rally from the recent lows has been on very weak volume, which suggests a lack of commitment.

See Charts:

https://cms.zerohedge.com/s3/files/inline-images/SP500-Chart1-110521-1024x752.png?itok=MtutvZEx

Currently, the bulls control the market as we are in the middle of a “buying stampede.” Historically, buying stampedes last on average between 7 and 12 days. Logically, buying stampedes always get followed by selling stampedes of similar lengths. However, there are times these stampedes can last much longer than expected.

We are currently in one of those longer-term periods. As shown below, the S&P 500 has only been down in 2 of the last 18 days. How unusual is that? In the previous 20-years of the S&P 500, the number of times the market accomplished such a feat was precisely ZERO.

See Chart:

Number of Down days in last 17 days since 2000

https://cms.zerohedge.com/s3/files/inline-images/1-10_6.png?itok=5uJBY-n8

Irrational Exuberance

“Every week it feels like we get a new headline about financial markets doing something unusual. Just this week we’ve had:“

A “squid game” crypto token falling 99.99% in a few minutes.
Tesla adding hundreds of billions of dollars in value over a deal with Hertz that hasn’t even been signed.
US stock markets hitting fresh all-time-highs.

“All of which begs the question: are we in a bubble?”

See Chart:

Irrational Exuberance : Is the stock market in a buble?

https://cms.zerohedge.com/s3/files/inline-images/Shiller-PE-Ratios-Exuberance-768x732.jpg?itok=8ocVsUQM

So where are we now?

The latest CAPE ratio for the S&P 500 Index is 38x. That’s pretty close to the all-time record, which was 44x back in 2000. For those with a short memory, that was just before the dotcom bubble burst and stock markets (particularly tech) crashed hard.”

As we have noted previously, valuations, by themselves, are a terrible timing metric. However, they tell us a great deal about expected future returns and current market psychology.

When it comes to “irrational exuberance,” there are other indicators better at revealing speculation in the markets that have preceded a stock market crash.

The CNN Fear/Greed index is now at extreme greed territory.

See Chart:

Fear & Greed Over Time

https://cms.zerohedge.com/s3/files/inline-images/Fear-Greed-Index-110421.png?itok=tkmgZMmp

Chart courtesy of TheMarketEar via Zerohedge

Furthermore, the demand for protection against a stock market crash (put options) fell to new lows.

See Chart:

https://cms.zerohedge.com/s3/files/inline-images/Put-Call-Ratio-To-SPX.png?itok=5C7d1v3e

Historically, such periods of “speculative” activity led to a minimum of short-term stock market corrections, but a crash is not beyond the realm of possibilities.

As noted above, with the market extremely overbought, speculative activity surging, and conviction weak, taking some actions to rebalance and manage risk is warranted.

However, for now, investors have “no fear” as they believe the Fed will continue to remain accommodative.

The Fed’s Third Mandate Takes Priority

‘The Fed’s policy actions have been guided by our mandate to promote maximum employment and stable prices for the American people along with our responsibilities to promote the stability of the financial system.‘”

The last sentence is the most important.

According to the Federal Reserve’s Congressional authorization, the Fed has only TWO mandates: price stability (inflation) and full employment.

The third mandate is a self-imposed mandate from Ben Bernanke, who was the Fed Chairman in 2010:

“This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose, and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.”

Fed Opts To Keep Markets Elevated

Jerome Powell ignored surging inflationary pressures and a robust job market in favor of supporting asset prices. With valuations surging, speculative activity rising, and investors heavily leveraged, the Fed faces a difficult choice.

There is already a decoupling of markets from consumer confidence. A stock market crash would further devastate confidence pushing the economy into recession. That is the risk the Fed cannot afford.

See Chart:

Consumer confidence composite (2009-present)

https://cms.zerohedge.com/s3/files/inline-images/Consumer-Confidence-Composite-Index-110221-1.png?itok=0Yr6kKud

However, while the Fed remains focused on keeping markets elevated, inflation poses a significant risk.

Currently, with PPI at the highest spread to CPI in history, it suggests producers can’t pass on costs to customers. Such equates to weaker profit margins and earnings in the future. However, if they elect to pass those costs onto consumers, such will raise living costs well above wages.

See Chart:

PPI to CPI Spread vs GDP & S&P 500

https://cms.zerohedge.com/s3/files/inline-images/PPI-CPI-SP500-GDP-110421-1024x459.png?itok=Ri4uvVX3

As Michael concluded:

“‘Promoting the stability of the financial system’ seems to be an unofficial mandate. Might the Fed be dragging their feet to reduce crisis-driven policy because they fear a stock market crash? More specifically, can extreme stock valuations be justified without an overly aggressive Fed?

The latest Fed meeting makes it increasingly clear that monetary policy changes are more a function of the asset markets and not the Fed’s congressionally stated mandates.”

Ignoring the inflation risk is likely unwise. Previous spikes in the inflation spread aligned with weaker economic growth, stock market contractions, or crashes.

While the Fed should be tapering monetary policy and hiking rates to prepare for the next recessionary downturn, they will opt to keep asset prices inflating. However, just as in the past, opting to keep monetary policy too loose for too long eventually triggers a more significant crisis.

Weaker Economic Growth Coming

While the Fed is busy supporting the equity markets, overvaluations, and speculative activity, the bond market has a different message. As discussed this past week,our expectation of weaker economic growth in 2022 is coming to fruition.

“The history of stock market crashes due to the Fed’s monetary intervention schemes is evident. Not just over the last decade, but since the Fed became ‘active’ in 1980.”

See Chart:

Fed Rate Adjustments, Recession & Econ Growth

https://cms.zerohedge.com/s3/files/inline-images/Fed-Funds-GDP-Crisis-083121-1024x609%20%281%29.png?itok=A693AVtA

Continue reading & see more charts BEFORE this conclusion:

As if always the case with investing, timing, as they say, is everything.

Such is why, particularly with the Fed set to hike rates in 2022, we are looking for our next opportunity to add duration to our bond portfolios. Moreover, with the equity market grossly overvalued, we suspect that bonds will provide a chunk of our capital gains over the next couple of years.

There is little upside to the equity market given current valuations, slowing earnings growth, a weaker economy, and less liquidity. However, whenever the next recession approaches, yields will once again likely approach zero.

Got bonds?

The following is worth repeating:

“While anything is possible in the near term, complacency has returned to the market very quickly. However, there are numerous reasons to remain mindful of the risks.

Earnings and profit growth estimates are too high
Stagflation is becoming more prevalent (weak economic growth and rising inflation)
Inflation indexes are continuing to rise
Economic data is surprising to the downside
Supply chain issues are more persistent than originally believed.
Inventory problems continue unabated
Valuations are high by all measures
Interest rates are rising

“Furthermore, as noted above, there is limited upside as the annual rate of change in the market declines.”

….

SOURCE: https://www.zerohedge.com/markets/did-fed-just-set-stock-market-crash

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Shocked Goldman Trader Admits "I Could Never Imagine Typing These Large Numbers"

Here is the punchline: single stock option notional (140%) now exceeds single stock shares notional, 72% of options traded have an expiry of two-weeks or less (think 2-3-4 days), and activity on the message boards is as

See Chart:

Art for members only: said Tyler Durden

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US Rents Rose At Slowest Pace Since February In Latest Sign Of Housing Market Exhaustion

Rents are still rising across the US, but the pace is finally starting to slow

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Biden's Infrastructure Plan May Be Hugely Inflationary

...the problem of demand-side policies is that they create a bottleneck and inflationary pressures in the worst moment possible.

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Hedge Fund CIO: "Once You Say $150 Trillion A Few Times, It Honestly Doesn't Seem So Big"

When you think about it, that cost is spread out over three decades, which leaves it just $5 trillion per year. And that number used to feel utterly out of reach until 2009 when the Global Financial Crisis sparked the first $3

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Taxes Set To Rise In 2026, No Matter What Happens With Build Back Better

Many provisions of the 2017 Tax Cut and Jobs Act signed by Trump will expire. Let's look at the impacts...

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US DOMESTIC POLITICS

Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption.

Surgeon General: Biden Admin 'Prepared To Defend' OSHA Vaccine Mandate After Court Ruling

"The risk is organized opposition to this OSHA mandate starts to bleed into broader opposition to vaccination..."

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US is looking for WW3: whatever pretext is valid. US suicide comes up

Submarine Accident Highlights Risk Of Naval Collision Between US & Chinese Militaries Is Growing

"If the same scenario happened to two nuclear submarines, this would become a huge disaster."

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California Governor Out Of Public Sight Since Vaccine Booster Shot 11 Days Ago

...cancelled Newsom’s plans to attend the United Nations climate summit in Scotland to deal with unspecific family obligations..

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Military Jury "Disgusted" By First Detailed Public Account Of CIA Torture In Court

On other occasions, CIA officers forced a green garden hose up his rectum and turned on the water...

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What Did The FBI Have On Danchenko?

"In covering for Danchenko, the FBI and DOJ were covering for themselves"

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When Will The CDC Correct Its COVID Death-Counts, As Italy Just Did?

...just another flu for most people..

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5 Unanswered Questions As FBI Raids Project Veritas Over A Missing Biden Diary

Regardless of how one feels about Project Veritas, there should be calls from media outlets for some answers to these basic questions...

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New Poll Suggests GOP Victory In 2022; Biden Approval Sinks To 38% While Kamala's Even Worse

"If the presidential election were today between Biden and Trump, 44% said they would vote for Trump, 40% for Biden..."

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Chicago Homicide Crisis Worsens As Mayor Lightfoot Fails To Quell Violence

"They're shooting at any time of the day."

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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)

Global depression is on…China, RU, Iran search for State socialis, D rest in limbo

Are Investors Wrong To Worry About China? Morgan Stanley Responds.

By Chetan Ahya, Morgan Stanley Chief Asia Economist

China’s growth should continue to be driven more by exports and private capex than by policy stimulus. This improving productivity dynamic creates a favorable environment for reforms to reduce reliance on less productive

The start of every deleveraging process in China prompts fears about downward pressure on growth. These investor concerns are re-emerging, reflected in wider credit spreads. However, we believe that some of these concerns are overdone.

Investors are focused on three issues.

First, is there a risk of a financial shock?

Policy-makers have the tools to manage aggregate demand by controlling the pace of deleveraging. In this cycle, China’s zero-Covid policy and adherence to its energy intensity and consumption targets have added downward pressure on GDP growth, which has weakened to a 4.9% 2Y CAGR (underlying growth adjusted for base effects) in 3Q21. This has prompted policy-makers to hit a pause to balance their growth and debt-management objectives. Chief China economist Robin Xing expects further easing measures, which would lift growth higher from 1Q22.

See Chart:

China’s countercyclical growth Model

https://cms.zerohedge.com/s3/files/inline-images/china%20countercyclical%20growth%20model.jpg?itok=viJDIwzq

Second, even if China avoids a financial shock, how much will elevated debt levels constrain medium-term growth?

A total debt/GDP ratio of 284% implies that a lot of growth has been borrowed from the future. Reducing leverage where it is particularly elevated – in this instance the property sector – would mean slower growth there, with implications for overall GDP growth.

See Chart:

Explains the rise & decline in China’ debt/GDP

https://cms.zerohedge.com/s3/files/inline-images/china%20debt%20to%20gdp%20MS%20nov%202021.jpg?itok=v-2N3dLO

Third, how will China achieve debt stabilization?

China’s debt sustainability hinges on two factors:

Reform efforts to reduce its reliance on highly levered sectors to drive growth; and
The external demand environment.

As we expect the global trade cycle to remain stronger than the sub-par growth environment of 2010-16, China’s growth should continue to be driven more by exports and private capex than by policy stimulus. This improving productivity dynamic creates a favorable environment for reforms to reduce reliance on less productive sources of growth like property.

[ Here a false flag that contradict previous reasoning:

Moreover, we expect policy-makers to continue implementing measures to move up the value chain and sustain technological progress, ensuring that China remains on the path to high-income status. Therefore, the risks we see to China’s debt outlook are a significant weakening in the global trade cycle due to a demand shock or renewed trade tensions.]

….

SOURCE: https://www.zerohedge.com/markets/are-investors-wrong-worry-about-china-morgan-stanley-responds

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UN Committee To Decide Who Gets Afghanistan's Seat Amid Rival Claims

Taliban says it's theirs, while Ashraf Ghani's ousted government still being represented in New York...

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Iran Blames US For Assassination Attempt On Iraq PM As Fresh Unrest Set To Explode In Streets

Kadhimi urging "calm and restraint"

with heavy military presence in Baghdad streets...

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China's Largest State Grid Operator Says Power Back To Normal

Without introduction