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  • Danny B
    replied
    The protests

    The overlay of the EU bureaucracy on top of existing bureaucracy has reduced the wealth of European countries by 20%. The outsourcing of jobs has further reduced national wealth. There just isn't any money to go around.
    UK faces longest fall in living standards since records began, says ...
    https://www.theguardian
    UK has 'worst quality of life in Europe' | Money |
    No Babies? - Declining Population in Europe - The New York Times
    https://www.nytimes.

    Here is a good article on the yellow vest protests.The Indiscreet Charm of the <i>Gilets Jaunes</i>, by C.J. Hopkins - The Unz Review

    "And, see, this is the problem the corporate media (and other staunch defenders of global neoliberalism) are facing with these gilets jaunes protests. They can’t get away with simply claiming that what is happening is not a working class uprising,"
    "We can expect to hear this line of reasoning, not just from establishment intellectuals like Lévy, but also from members of the Identity Politics Left, who are determined to prevent the working classes from rising up against global neoliberalism"
    Nothing scares the Identity Politics Left quite like an actual working class uprising. Witnessing the furious unwashed masses operating out there on their own,"
    "but even if it does, and the gilets jaunes uprising ends, this messy, Western “populist” insurgency against global neoliberalism has clearly entered a new phase. Count on the global capitalist ruling classes to intensify their ongoing War on Dissent and their demonization of anyone opposing them"

    Doug Casey, "I gave a speech about this at Jayant Bhandari’s Capitalism & Morality 2018 Conference in Vancouver last summer. People can listen to the whole speech here if they’d like the whole story. It’s entitled “How Political Correctness Is Destroying Western Civilization.” I’ll also point out that all the speeches at that day-long conference were superb.

    And, interestingly, almost all the speeches at that conference centered around the possibility that a revolution is coming to the United States."
    "And with welfare benefits as ridiculously high as they are, middle-class Europeans resent paying half of their income in taxes, only to see freeloading migrants live off their produce.
    There’s an excellent chance this will spread throughout Western Europe. "
    "In France, the state takes about 45% of all revenue in taxes. It’s got about the highest taxes in the world. The average Frenchman’s tax load is twice as high as the average American’s. Worse, the taxes are used to support massive and onerous bureaucracies in both Paris and Brussels."
    https://www.caseyresearch.com/doug-c...e-paris-riots/

    Because Teresa May is screwing the Brits so well, there is a very good chance of these protests spreading to Great Britain. Their standard of living is certainly falling.
    https://sputniknews.com/europe/20181...brexit-london/

    Notes in israel;
    Time to learn from the French!’ Yellow Vest protests spread to Israel, 10 arrested
    Israeli Police recommend bribery charges against Netanyahu & wife

    He is so corrupt, that there have been weekly protests about him.
    A few years back, the protesters brought along a beautiful GUILLOTINE;
    https://www.ynetnews.com/articles/0,...107640,00.html
    Israeli protests: 430,000 take to streets to demand social justice ...
    https://www.theguardian


    Israel is afflicted with zionism and, the don't like it.
    https://www.youtube.com/watch?v=JU92lAsw3UU
    American taxpayers give Israel over $10.5 million per day.
    You would think that $10.5 million a day would pay for bread for the people.

    France's protests are hurting the economy at a crucial time - Quartz
    I guess that we just have to wait and see how much.
    12/15 Global debt hits record $184 trillion, or $86,000 per person – Bloomberg

    Leave a comment:


  • Danny B
    replied
    Debt is eating up the world

    "Macron is pushing for the European Finance Minister to raise money by selling EU bonds and then distribute the money to the 19-member Eurozone. France is very heavily indebted and here once again we have simply the goal to raise more money rather than reform. Because of the riots in France, Macron is trying to get the EU to fund France. They want to call this the European Monetary Fund"
    NOBODY would buy these bonds. He's hoping to buy some time but, the revolts are quickly spreading.

    The Venezuelan government has their own plan on how to fund government.
    https://www.zerohedge.com/news/2018-...ight-terrorism
    They also created a crypto coin backed by their oil. BUT, the oil seems to be stuck underground.
    Hillary is working hard to see Trump get re-elected.
    https://www.zerohedge.com/news/2018-...somewhere-else

    The stock markets have lost $trillions. The Shanghai index is down about 20%. While this causes capital flight to safer jurisdictions, it also promises a LOT of contagion. Here is a graph of the leveraged loan index.
    https://www.zerohedge.com/sites/defa...ex%2012.13.jpg
    "And then, loan pricing nose-dived along with prices on most other credit products starting around the first week of October, right after Powell's "neutral rate" speech,,,, ... and suddenly complacency turned to sheer panic without passing go. But the catalyst for this wholesale dread was not so much the slump in prices as much as fund flows - i.e., observing in real time what one's peers are doing - and as we showed yesterday, they are selling, with Lipper reporting that loan funds saw a record outflow of $2.53 billion in the week ended December 12, a fitting culmination to the fourth consecutive week of selling."
    https://www.zerohedge.com/sites/defa...20outfdlow.jpg

    If you look at this graph, you will see that institutional investors make up the bulk of the buyers.
    https://www.zerohedge.com/sites/defa...re%20banks.jpg
    Everybody else has pulled out. Should the markets crash, as delineated by John Hussman, the big funds will all be insolvent.
    https://www.zerohedge.com/news/2018-...quidity-issues

    Here is a graph of hedge funds index.
    https://www.zerohedge.com/sites/defa...20dec%2014.jpg
    "And yet, paradoxically, despite a truly abysmal track record, where the average hedge fund is not only down for the year but badly underperforming its benchmark for the 8th year in a row, hedge fund employees of all stripes, from junior analysts to portfolio managers, have something in common this year: unmitigated optimism in the form, or as Bloomberg puts it, "they’re all expecting fatter paychecks."

    Despite an industry beset with lagging performance, an investor exodus and closures, hedge fund professionals expect a median compensation of $520,000 in 2018, a 16% increase from last year's $450,000"
    https://www.zerohedge.com/news/2018-...t-16-pay-raise
    $10,000 a week seems fair.

    Zero Hedge, "" Even the sainted Holy Mother of Wokesterism, the Archangel Hillary, may find herself wingless in a witness chair, answering how all that schwag from Russian banksters happened to end up in her foundation’s cookie jar."
    There are people who STILL believe that Mueller is investigating Trump.

    There is a new year coming and, a few things will get shifted around.
    "Credit On Verge Of Crisis: $176 Billion A-Rated Bonds Downgraded To BBB In Q4"
    The stock markets have recently lost about $15 trillion. This counts as perceived deflation. Many investors are going to cash. This counts as deflation in the circulating money supply.
    "Fast forward to today when Goldman reports that just two weeks after our original report, the number of A to BBB downgrades has doubled to a whopping $176 billion in the fourth quarter,"
    https://www.zerohedge.com/news/2018-...ngraded-bbb-q4

    12/14 Bank bulls battered as financials enter bear market – Zero Hedge
    12/14 Wheels come off the leveraged loan market: banks unable to offload loans – ZH

    You Aussies are no slackers.
    “The ‘Australian Dream’ was financed through an epic accumulation of debt as interest rates collapsed, with household debt standing at 189 per cent of disposable income,” Ms Creagh writes in the report."
    https://www.news.com.au/finance/econ...f6a82c32fd19b6

    Greenspan argued for deregulation of banks because they could regulate themselves to make the most profit. Forget about malfeasance to make this profit. There is another problem. The individual traders will act to make the most profit for themselves,,, not necessarily for the bank.
    When interest rates to ZIRP, lots of companies gorged on free money to do buybacks. This reduced the number of outstanding shares and, bumped up the dividend per share. It also bumped up compensation and bonuses for traders and partners. Once the ZIRP ended, the debt service on the free money started to strangle corporate profits.
    As profits fell, investors pulled out their money.

    $9 trillion corporate debt bomb is 'bubbling' in the US economy
    How The Corporate Debt Bubble Will Destroy The Economy - ValueWalk

    Here is the graph, https://static.seekingalpha.com/uplo...8796505134.png
    "U.S. corporate debt has risen from $40 trillion to $70 trillion since the top of the last bubble in 2007. That’s 63% in 10 years. It’s risen 135% since 2000!
    Only government debt has risen faster, from $35 to $64 trillion, or 83%.
    China is the worst by far, going from $6 to $36 trillion or a 500% increase!"
    The corporate debt bomb can't destroy the economy. I was told that sovereign debt would do that.

    "A government spokesman said: “The UK’s jobs market has never been stronger, employment is at a record high with more people in work in every region of the UK since 2010"
    +
    "Average UK workers earning a third less than in 2008 – report "
    https://www.theguardian.com/business...al-wage-report

    Leave a comment:


  • Danny B
    replied
    Attacking China,,, ECB and stimulus,,,Macron blows it

    A short article on stocks with good graphs.
    https://northmantrader.com/2018/12/1...on-critical-2/

    "America’s trade war against China appears to be less about unfair trade practices and more about stopping China from evolving into a serious technological competitor against the US. In 2019, there is a strong possibility the tariff war will escalate into a wider conflict, with China selling down its exposure to the dollar and US Treasury debt. That would create significant difficulties for the US Government and the dollar itself.
    With the credit cycle turning and the addition of American tariffs, markets are at a growing risk of replicating the 1929-32 crash and the economic depression that followed. "
    "tariffs have evolved from a policy to make America great again to bankrupting China. China is seen as the greatest economic threat to America, and in this duel, tariffs are Trump’s weapon of choice.

    The objective is to impede China’s technological development. "
    https://www.goldmoney.com/research/g...storm-for-2019

    " The European Central Bank formally ended its 2.6 trillion euro crisis-fighting bond purchase scheme on Thursday but promised to keep feeding stimulus for years into an economy struggling"
    I'd like to know just what form this stimulus is going to take.
    https://uk.mobile.reuters.com/article/amp/idUKKBN1OB2YD

    "A return of national sovereignty across Europe is no longer coming. I think it’s here. This can no longer be stage-managed as a relief valve of the massive discontent at neoliberal policies rammed down Europeans’ throats as it has in the past."
    "Macron was sold as the outsider, the reformer, who wasn’t in office a week before he began betraying the people who voted for him. And now he’s stuck.
    The media turned against him quickly because they know he is done. "
    "Now the question is, what comes next? Because political unrest leads to financial unrest really quickly and the market hasn’t even begun pricing France into Europe’s evolving troubles."
    https://tomluongo.me/2018/12/11/end-...n-know-revolt/

    "Macron’s handling of these protests have been nothing short of abysmal. He began November the darling of the globalist set I like to call The Davos Crowd, excoriating any sense of national pride, likening it to terrorism."
    France is NOT the place to do this. https://www.youtube.com/watch?v=zFV6R_ZuAc8
    "He also called for the creation of a Grand Army of the EU and pushed hard for banking federalization to consolidate power under Brussels over the currency,"
    "With his approval rating dropping faster than Deutsche Bank’s stock price, Macron had to do something to stem the tide against him. It’s so bad even the rest of the French political establishment are sharpening their knives looking for a no-confidence vote and his resignation."
    "Salvini is looking at this proposal of Macron’s like it truly is manna from heaven. But for the EU, does it really have any other choice? When you’ve stepped off the cliff and are falling, anything you can do to keep from hitting the ground is what you do regardless of the long-term damage. "
    https://www.strategic-culture.org/ne...d-eu-neck.html

    "According to data from the Office of the Superintendent of Bankruptcy Canada, insolvencies climbed to 11,641 in October, a 9.2% rise compared to the year prior. Even more alarming, month over month this rise was up a staggering and somewhat inexplicable 16%, as if something "broke", pardon the pun, in October."
    https://www.zerohedge.com/news/2018-...eakneck-speeds

    12/13 Yellen and the Fed fear corporate debt bubble, but investors still don’t – CNBC
    That is because they put their money into passive investment funds and, went to the beach.
    12/13 US budget deficit jumps to $205 billion in November – MarketWatch
    So, when does this all default?
    12/13 US bank stocks spiral down – Wolf Street
    Nobody is listening.

    Leave a comment:


  • Danny B
    replied
    Blame it all on the FED

    Any economy is subject to occasional panics. When banks do fractional reserve lending, they are subject to collapse from blanket withdrawals. The finance community created the panic of 1907.
    Investopedia, "The Bank Panic of 1907 was a set of bank runs and bankruptcies that led industry leaders to draft the first version of the Federal Reserve"
    So, a panic in 1907 and, the creation of the FED in 1913. No single private bank could withstand a run on the bank. The FED was created and owned by private banks as a sort of mutual insurance system.
    Armstrong, "The creation of the Federal Reserve was with the power to create money in times of crisis to meet the demand for withdrawals without having to dump assets in a panic. Then World War I came and instead of the Fed stimulating the economy by buying the corporate paper to directly create jobs, politicians instructed the Fed to buy ONLY government bonds. "

    Private banks have a mismatch of maturities. They borrow short (deposits) and, loan long. The idea of a backstop is logical.
    "The Fed operates as a central bank, controlling fiscal and monetary policy. Its three goals are to promote maximum employment, keep prices stable (ie. control inflation) and to moderate long-term interest rates."
    So, the bankers created an agency to serve the bankers interests.
    "The Fed began with approximately 300 people, representatives of banks who became owners (stockholders purchased stock at $100 per share) of the Federal Reserve Banking System. 100% of its shareholders are private banks; the stock is not publicly traded and none of its stock is owned by the US government."

    "Commercial banks borrow from the Fed to meet reserve requirements established in law (set up after the 1929 stock market crash to avoid another run on the banks which caused many to become insolvent). This is known as the discount window. Borrowing from the Fed is quicker and easier than borrowing from another bank, but it is more expensive"

    Central Banks were originally created to supply war finance.
    http://group30.org/images/uploads/pu...ralBanking.pdf

    It is suspicious that the U.S. congress approved the central bank in 1913 AND the U.S. entered WW I in 1917. The FED was tasked with buying war bonds. After WW I, the mandate was never changed. An agency that was created for the logical purpose of backstopping private banks (remember the maturity mismatch) was commandeered to finance wars. The FED has bought State debt ever since. Where does the money come from?
    The FED is mandated with maintaining price stability. The FED has taken it upon itself to maintain 2% inflation. This is, of course, a contradiction.
    The FED buys State debt and, re-sells it on the open market. The State pays interest on this money.

    "In 2017 the Fed reported $115 billion in income, including $113 billion in interest received from $4.2 trillion in Treasuries and mortgage-backed securities it accumulated during its quantitative easing programs. It also paid out $784 million in dividends to shareholders - the financial institutions that own the 12 Federal Reserve Banks."

    Typically, the Central Bank makes money from the State. The State raises taxes. A small, private mutual insurance agency was hitched up to the State to supply funding for perpetual war. Not just warfare.

    "In 1966, Congress gave the Federal Reserve authority to purchase the debt of agencies guaranteed or owned by the federal government. This same authority has enabled the Fed’s purchases of mortgage-backed securities (MBS) and debt of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac since 2008 in support of the housing market. In a little-known episode, the Fed shied away from exercising this authority in the 1960s but eventually conceded under political pressure and perceived threats to its independence"

    The FED was also hitched up to finance the welfare state.
    "Between 2008 and 2015 the Fed bought trillions of dollars worth of T-bills and mortgage-backed securities, keeping interest rates near zero percent, but making the US debt balloon from $900 billion to $4.5 trillion."
    Wages haven't risen in 40 years as America has steadily lost manufacturing. The State doesn't want a shrinkage in it's income. The wars must go on. Just how high can the public debt go?
    " USA Today notes that as of Sept. 30, the US deficit was $779 billion - 17% higher than last year."
    " $1,110 billion for the Department of Health, $576 billion for Defense, and $540 billion for the Treasury. "
    Ahead of The Herd

    Everybody throws rocks at the FED but, it wasn't the FED that created the welfare-warfare state.
    It wasn't the FED that promised unsustainable pensions.
    https://www.armstrongeconomics.com/w...oria-illinois/
    Merkel promised that there would be NO State bailouts for banks. Deutsche bank promised to leave a crater half the size of Germany. She relented.
    https://www.armstrongeconomics.com/w...commerce-bank/

    Leave a comment:


  • Danny B
    replied
    Custodial risk,,,, a crisis here,,, a crisis there

    Armstrong has a good article on custodial risk. It's a bit complex but, worth reading if you are in the markets.
    "If you are holding shares and you do leave them in the custody of a broker, they will keep them in “street name” so yes they can be taken as an asset of the firm as they did in M.F. Global. If the shares are to be held and you are not using them for collateral at a broker, it is best to take possession."
    "The creation of the Federal Reserve was with the power to create money in times of crisis to meet the demand for withdrawals without having to dump assets in a panic. Then World War I came and instead of the Fed stimulating the economy by buying the corporate paper to directly create jobs, politicians instructed the Fed to buy ONLY government bonds. "
    "Then Robert Rubin of Goldman Sachs/US Treasury Secretary pushed to overrule Glass–Steagall. That opened the door for these banks to then be officially trading with other people’s money. The end is now in sight."
    "It was Martin Glenn who was the judge in New York on M.F. Global bankruptcy. He was the first one to engage in FORCED LOANS by abandoning the rule of law to help the bankers by protecting them from losses taking client accounts to cover M.F. Global’s losses. "
    https://www.armstrongeconomics.com/i...ustodial-risk/

    " The latest trend among European countries of bringing home their gold reserves has been raising concerns in Brussels.
    According to Grass, the process means disintegration"
    "According to Grass, only a fool believes you can create wealth out of nothing, and use that as a basis for a sustainable system."
    "He explained that in the Western world, the government is forcing people to give up between 35 and 65 percent of their income and to put it into mandatory vehicles such as pension funds, retirement insurance, taxes, and so on."
    https://www.rt.com/business/422200-d...ell-euro-gold/

    "The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for another downturn, the deputy head of the International Monetary Fund has warned."
    "U.S. consumers are more than 13 trillion dollars in debt."
    https://www.zerohedge.com/news/2018-...l-crisis-looms

    "Moreover, Christine Lagarde’s deputy called on nations to work together to tackle financial instability, warning they simply cannot avert a meltdown without coordinating with each other. "
    "Specifically, Mr. Lipton said they should work towards ensuring the IMF is not under-resourced, as it was in the run-up to 2007 crash and subsequent credit crunch" SEND MONEY !
    "One lesson from that crisis was that the IMF went into it under-resourced; we should try to avoid that next time,” he concluded"
    Bring on the SDR
    https://sputniknews.com/business/201...y-gfc-warning/

    Trump can't do much about intellectual property theft but, he can put the squeeze on Chinese chip makers, https://www.zerohedge.com/news/2018-...a-really-about

    12/12 Greece scraps pension cuts – Ekathimerini Very Italian of them.
    12/12 Venezuela annual inflation tops 1 million pct in November: – Reuters
    12/11 Why bitcoin crashed and why it will crash again – Forbes
    12/10 Antonopoulos: why bitcoin is not in a death spiral, refuting reports – CCN

    Leave a comment:


  • Danny B
    replied
    Deficits and solar storms

    The ECB is screaming at Italy because they are only allowed to run a 2% deficit. France, on the other hand, is allowed to run a 3% deficit,,,, because it's France. The Yellow Vest demonstrations moved out to other countries and threatened the establishment. Macron came up with some concessions that will now push the French deficit to 3.6% The banks weren't much impressed.
    12/12 French borrowing costs jump on Macron wage rises, tax cuts – Reuters
    Teresa May has left Britain to beg EU leaders to renegotiate.
    12/12 On whirlwind EU tour, Theresa May rebuffed by Merkel, Juncker, Rutte, Tusk – Mish
    Automatic Earth has a good article on this.
    https://www.theautomaticearth.com/20...mes-of-crisis/

    As the Chinese financial system swirls down the drain, Australia is expected to melt down. If your Aussie, you should read this.
    https://www.zerohedge.com/news/2018-...banking-crisis

    "US forces must remain in the bogged-down Afghanistan campaign, or terrorists might get back on their feet and launch another 9/11-scale attack on American people, General Dunford, Chairman of the Joint Chiefs of Staff said. "
    The threat of TERRORISTS is winding down a bit so, the DHS is pumping it up again.

    "In a new report from the President’s National Infrastructure Advisory Council and published by the Department of Homeland Security, the government is urging the public to prepare for the up to six months without electricity, transportation, fuel, money, and healthcare."
    "The report, titled Surviving a Catastrophic Power Outage”, warns that an attack would likely come with little to no notice and could cause complete chaos for at least a half a year, “Long-duration, lasting several weeks to months (at least 2 months, but more likely 6 months or more"
    "The report recommends Americans have enough supplies on hand for a minimum 14 days"
    "The report is the second in the last month to warn of a “profound threat” to the U.S. electric grid from terrorism and events like a solar storm or solar flare. A prior government report also recommended presidential action to protect the grid from attacks. "

    At least, they mention solar storms.

    Leave a comment:


  • Danny B
    replied
    The current downturn and, losing confidence

    Since everybody buys on margin or credit, confidence in the future is all important. A small dip in the price of stocks is called an opportunity to "buy the dip". As the dips get larger, confidence weakens. At some point, everybody wants to "short" the market.
    CNN, Here's how much money you could be losing by avoiding the stock market
    NBC, The stock market lost more than $2 trillion in October - CNBC
    The truth is, the net makes it impossible to hide financial fundamentals. Computers make almost instantaneous analysis.
    Here is a short article with a few graphs that puts everything in perspective.
    https://gainspainscapital.com/2018/12/10/10555/
    Just one excerpt,
    "So what is the crisis this time?
    In the ’90s it was the bubble in Tech Stocks.
    In the early ’00s it was the bubble in housing.
    Today it’s the bubble in DEBT… specifically, sovereign bonds."
    The banks blew bubbles to increase fees and interest charges. Every time that this blew up, they simply shifted the losses to the taxpayer. The State is the biggest borrower and, has to figure a way to inject money into the economy to keep it from collapsing.
    Trump Reverses Yet Again - OKs $750 Billion Military Budget,
    Days After Saying $716 Billion Was 'CRAZY' & Too Much! It's
    Biggest Military Budget In History & We're $22 Trillion In Debt


    Somebody pulled him aside and told him that the printing presses had to run in hyperdrive if he hoped to maintain some stability while Japan, Europe and China were collapsing.
    Powell is hiking to attract foreign capital. BUT, he can't hike so high that debt service on sovereign bonds becomes too costly. He must find a balance point that drains capital from our competitors but, doesn't crash the sovereign debt market,,,, not yet, at least.

    One of the eternal debates is; will this cause inflation or deflation. Due to woolly thinking, people group together price levels with money supply. Inflation is defined as an increase in the supply of money. This may or, may not cause price inflation. All of this debate is complicated because an increase in the money supply is an increase in debt.
    In ancient times when gold and silver were the primary money, the circulating money supply was dependent on CONFIDENCE, not on supply. In times of low confidence, gold and silver went into hiding, NOT investment.

    In the '70s, the State allowed / promoted the paper gold market..
    Paper Gold Trading Market Continues To Depress Price
    Paper Gold Market 91% of Global GDP - Crush The Street

    The paper gold market was created so that the State could thwart any attempt to flee into gold when interest rates fell. The banks and the State want to keep all wealth circulating.
    The End Of TINA -- Or 'There Is No Alternative' To Equity Buying - Forbes
    https://www.forbes.com/.../the-end-o...-equity-buying...
    Nov 27, 2018 - Investors have complained for years about “TINA” – or “There Is No Alternative” other than to buy more equities.


    12/11 The next worry for US stocks: shrinking profit forecasts – Reuters
    As profits shrink and political instability gets worse;
    America's wealthy are moving to cash as market enthusiasm hits a wall
    Here is the article from Armstrong
    https://www.armstrongeconomics.com/h...ion-deflation/
    "Therefore, despite the increase in coinage output, there was DEFLATION as we have witnessed in Europe under the Quantitative Easing of the European Central Bank (ECB). The increase in money supply resulted only in hoarding rather than inflation. They still had faith in the purchasing power of money."

    You can see from all this that hoarding reduces the circulating money supply. The obvious answer is to go to 100% digital currency and the blockchain. The State can impose negative interest rates on everybody.

    "his seems to imply that the economy was contracting significantly thanks to the reign of Maximinus I (235-238AD) who simply declared all private wealth belonged to the state (him)"
    "the reasons I sought to reconstruct the monetary system was to gain a look at what was really taking place within the Roman Empire because the common denominator is how people respond to events regardless of the century."
    Last edited by Danny B; 12-12-2018, 02:57 PM. Reason: punktuation

    Leave a comment:


  • Danny B
    replied
    Political wars bringing down the economy

    Trump has a long way to go. Know they enemy.
    https://www.rt.com/usa/445807-us-sta...hanistan-9-11/
    https://www.globalresearch.ca/heroin...heroin/5502813
    https://www.theguardian.com/global/2...n-cfief-claims

    China's economic model ignores profit in the quest for market share and growth. This makes them particularly vulnerable to upsets and declines. Trump got a tax reduction here to buy some time for his attack on China. Capital outflows from the R.O.W. are inflows to America. Everyone knows that the effects of the tax decline will wear off going into 2019. As long as America looks more stable than other markets, that will buy some time. These inflows are raising all boats.

    The Chinese boat is sinking.
    "With that in mind, take a look at the chart for China’s banking sector. Not only is the bull market trendline broken, (blue line) but the chart has crashed an incredible 33%."
    https://gainspainscapital.com/wp-con...GPC1023181.png

    Europe is doing equally bad.
    https://gainspainscapital.com/wp-con...GPC1023182.png
    "The US bond market is over $20 trillion in size. And if you include junior debt instruments, it’s over $60 TRILLION in size.

    And this whole mess is beginning to blow up as the yield on the 10-Year US Treasury, the single most important bond in the world, has broken out above its multi-decade trendline."
    That is this graph, https://gainspainscapital.com/wp-con...GPC1023183.png
    If you compare the breakouts and reversals, the U.S. is doing much better. That is all it takes to attract capital.
    Europe is too socialist and China is too exuberant (gambling). China knew that their export economy model would come to an end. They wanted to change to a domestic consumption model. China's EXCESS steel production capacity is equal to the total capacity of Europe and America combined. How are they ever going to absorb all their productivity into domestic consumption when their workforce shrinks by 1 million a year?
    https://gainspainscapital.com/2018/1...ble-has-burst/

    Teresa May figured that she would just shove a bad Brexit down the throats of Parliament and the people. Armstrong's model did NOT show any changes for Dec. 11. Sure enough, the votes is postponed. Here is a great Pic of May with a "Brexit" gun in her mouth.
    https://www.armstrongeconomics.com/i...ote-postponed/
    So, while Britain doesn't share the Euro currency, the Pound is going down also, due to the Brexit turmoil. The British banks want unfettered access to European capital markets and May is too stupid to avoid painting herself into a corner.

    As China goes down, OZ falls apart.
    "Growth had been looking good recently. Economists were optimistic. But when the ABS put out the official figures they were shocked. This matters to all of us. It puts Australia deeper and deeper into our emergency footing.
    https://www.news.com.au/finance/econ...662cec0a24711d
    The article reflects an exercise in hopium.
    Armstrong, "As I have warned, the next two years are going to be an outright political siege warfare. Far more damage will be done to the United States and the world economy in this desperate attempt for the Democrats to retake the White House in 2020."
    This is a good article on a possible impeachment.
    https://www.armstrongeconomics.com/i...rfare-of-2019/

    Here is a good article on the Clinton Foundation by Armstrong. Keep in mind that a full-on war between the House and Senate will be very bad for the economy.
    "The Clinton Foundation is the poster-child for political corruption and tax fraud. What we are about to witness is the start of a political war in the House before the handover to the Democrats in January.
    If we look back on April 23, 2015, just two weeks after Hillary Clinton officially declared her presidential campaign, her staff sent out a message on the strategy to manipulate the Republicans into selecting the worse candidate.
    Trump was absolutely certain to lose.
    “Our hope is that the goal of a potential HRC campaign and the DNC would be one-in-the-same: to make whomever the Republicans nominate unpalatable to a majority of the electorate.”
    She ignore the deplorables.

    "Jennifer Palmieri, in the hacked emails revealed that Palmieri and other Clinton allies’ hold very low opinions of Catholics. Hillary’s staff said Catholics are “severely backwards”
    Jerry Oppenheimer reported in his book State of the Union: Inside the Complex Marriage of Bill and Hillary Clinton (2000), that the night Bill unexpectedly lost his 1974 Arkansas congressional seat bid, Hillary shrieked at his campaign manager, “you ****ing Jew bastard.”
    "Hillary was so shattered by the loss of her life’s dream to be the first woman president rather than what she could actually do for the country. Hillary refused to appear before her supporters. That was the most devastating thing any candidate had ever done in history."
    https://www.armstrongeconomics.com/i...gated-at-last/
    Armstrong did 7+ years of hard time in prison. You can't scare him or shut him up. He knows that everybody important in finance reads him.

    The dirt that comes out of the Clinton investigation will essentially will essentially make the Dems pathologically toxic. The Dems will control the House of Representatives. The HOUSE is responsible for originating all spending bills. So, while America presently attracts a lot of capital inflows, will this continue during the siege of Washington D.C ?

    Leave a comment:


  • Danny B
    replied
    People = the economy,,,, bubble inflating

    "High income nations saw peak total energy consumption in 2007 and are still below that peak almost decade later."
    "Annual 0 to 64yr/old population growth among the consumer nations double peaked at +38 million. That was annually 38 million more potential employees, homebuyers, consumers, tax payers, etc. By 2008, annual growth was down to 20 million, and as of 2018 annual population growth of those aged 0 to 64 is just 5 million."
    The banks (effectively) cut back our earnings by front-running everything we buy,,,,using our savings OR, wet-ink money. There is no possibility of growing the economy while the population is shrinking. Maybe the Greens want population reduction but, the finance system can't survive it.

    "Note the potential workforce is growing at just one quarter the peak. But worse still, the pace is now less than half that of 2008...and by mid 2020's, the potential workforce will begin outright shrinking (and yes, the UN data includes and relies upon ongoing immigration just to maintain the below curves...absent that, the falloff is much sooner and steeper)."
    The mantra is that; we need immigration. Bringing in 3rd world garbage with no skills means that they won't be productive and must be supported by the State for their whole lives. This implies a belief that the sovereign bond market will grow forever. It is already growing faster than exponentially. So, the State will have to support them cradle-to-grave.

    But, the way that automation is growing, there will be many more millions of native born who will join them. Finance is focused on; a continuing supply of warm bodies to grow consumption.
    Side note, https://www.breitbart.com/politics/2...-visa-workers/
    "the childbearing population peaked about 2010 and is now falling. "
    "Again, despite all the debt, central bank "support", and interest rate cuts...energy consumption (and more broadly consumption, period) is tracking the changing population...down."
    The CBs are "pushing on a string"
    https://econimica.blogspot.com/2018/...nergy-and.html

    "2011 to present is the period with the greatest wealth creation growth in the nations history, yet during this period of economic strength, growth in federal tax receipts has been consistently decelerating...and even prior to the Trump tax cuts had already turned negative. Since the tax cuts, tax receipts are collapsing while federal spending is surging...hallmarks of what typically takes place during a recession, not the greatest wealth creation in this nations history. "
    That was debt creation, NOT wealth creation.
    "The already swollen issuance of public (marketable) debt since 2007 is about to move from a steep angle to an exploding vertical upward trajectory"
    https://econimica.blogspot.com/2018/...ollapsing.html

    "Yet percentage growth rates don’t do justice late in a Credit Cycle. Outstanding Treasuries expanded $1.187 TN over the past four quarters (7.3%) "
    "It’s also worth noting that Federal borrowings this year have accounted for in excess of half of Total Non-Financial Debt growth (Q3 SAAR $1.180 TN of SAAR $2.228 TN)."
    The bubble has a lot of leaks and, needs constant pumping. Trump and Powell are trying to make a soft landing. It's never been done before.
    " Total Treasuries and Agency Securities ended the quarter at a record $26.439 TN (up $1.450TN y-o-y), or 128% of GDP."
    80% is the death cross.
    "Debt Securities ended Q3 at 215% of GDP, up from 200% and 157% to end 2007 and 1999. Equities Securities increased nominal $2.269 TN during Q3 to a record $50.602 TN (one-year growth $5.493TN). Equities Securities ended the quarter at a record 245% of GDP versus 172% at the end of 2007"
    None dare call it a bubble.
    " Total Securities ended the quarter at a record 460% of GDP. This compares to previous cycle peaks 379% (Q3 ’07) and 359% (Q1 ’00)."
    "Household Liabilities gained $167 billion during the quarter ($539bn y-o-y) to a record $15.895 TN. "
    "Household Net Worth ended the quarter at a record 528% of GDP, up from the year ago 514% and Q3 2016’s 498%. Household Net Worth to GDP set previous cycle peaks at 484% (Q1 ‘07) and 435% (Q4 ‘99)."
    https://creditbubblebulletin.blogspo...and-cycle.html

    11 companies that control everything that you buy, https://wikibuy.com/blog/11-companie...g-904b28425120
    The British are out to prove that American politicians don't have a lock on stupidity.
    https://sputniknews.com/europe/20181...n-fein-famine/
    Business Insider Magazine, Future of Fintech: How Fintech Is Taking Over The World and What Comes Next.
    Finance produces not a single tangible thing out side of paper bills. In their hermetically sealed little minds, tangible objects don't matter.
    Japan is shrinking and has a head start on America.
    https://www.sciencealert.com/million...-away-for-free

    Congress is a big part of the deep state. Evidently, there is a problem with that arrangement.
    https://theantimedia.com/rand-paul-d...g-run-congress
    Then, we get word from Berzezinski on how things are supposed to be.
    https://www.realclearpolitics.com/vi...lclearpolitics

    Leave a comment:


  • Danny B
    replied
    European austerity,,,Why Civilizations Fail

    Well, Macron is really a master of bad timing. Public strikes are a national past time in France but, this one is growing and spreading.
    12/08 EU support for austerity opens door to far right, Corbyn says – Guardian
    With austerity, ALL bets are off.
    German Police Shut Down Concert Due to Mass Nazi Salute - Sputnik
    The protests are spreading to other countries. Austerity will definitely make it worse.
    "The 80 million or so people of Germany de facto rule the 500 million of the Union, or you know, the three handfuls that rule Germany. No important decision can or will ever be taken that Berlin does not agree with. Angela Merkel has been the CEO of Europe Inc. since November 22 2005,"
    "The Union appears fatally wounded, and that’s even before the next financial crisis has materialized. Speaking of which, the Fed has been hiking rates and can lower them again a little if it wants, but much of Europe ‘works’ on negative rates already."
    "Can Macron allow for French people to be killed in the streets? Almost certainly not. There’ll be pitchforks and guillotines. The only way out for him, the only way to calm things down, may be to announce his resignation. "
    https://www.theautomaticearth.com/20...-of-the-union/

    Here is a chart of the 30 year treasury bond. It has definitely broken out.
    https://3lrofj3556kl9zu0p27yma51-wpe...ut_chart-2.png
    ALL markets have rolled over.
    "Returning to our truism “it’s never different this time”. Something else that’s equally “never different this time” is that governments never pay off unsustainable debt. Nevaaahhh!
    Which brings up a question:
    How much more debt can the world’s sovereigns add to their balance sheets before something falls over?"
    "Much like Brexit, the French peasants are saying “non, Monsieur” to the globalists.
    They’re saying non to the destruction of their culture. They’re saying non to the eye watering taxes. They’re saying non to what has by stealth been imposed on them. A political union run by a bunch of unelected foie-gras eating pointy shoes in Brussels."
    https://capitalistexploits.at/2018/1...-is-happening/
    The article talks a lot about what is happening in Europe. It’s other focus is; while everyone is watching the stock market, the far more important bond market is headed down fast.

    "The cartel (especially the ECB and the Fed) is hoping it can gently deflate these bubbles it created, but that's a fantasy. Bubbles always burst badly; it's their nature to do so. Economic suffering and misery always accompany their termination."
    "Attempting To Replace The Business Cycle With A Credit Cycle

    In their quest for power and glory (and accompanied by a dead-flat learning curve), the world’s central banks are now pursuing their third, largest, and most ill-considered attempt to defeat the business cycle by replacing it with a credit cycle. The fact that the prior two credit cycles blew up spectacularly doesn't seem to be deterring them in the slightest."
    "So Greenspan and Bernanke created the Housing Bubble 1.0 by offering the world’s credit markets a price of money so low it couldn't be refused. Housing was the story, and the Fed supplied the credit. As predicted by a scant few of us, that all blew up spectacularly in 2008. And no constructive lessons were drawn from that experience, either."
    "Paying attention or not, here we all are; stuck together in a world awash with credit. $250 trillion in debt. 4 times that amount in unfunded liabilities. And a mind-bogglingly massive amount of tangled financial derivatives roughly the same size as both those debts and liabilities put together."

    "And to add insult to injury, recession indicators are piling up faster and faster now. 2019 is looking primed to be The Year That Mass Layoffs Returned"
    https://www.peakprosperity.com/blog/...ble-search-pin

    "In 2014, a study partly funded by NASA warned that global industrial civilization could implode in the near future."
    "Excess resource extraction and unequal wealth distribution were crucial to every civilizational collapse of the past 5,000 years."
    "Morris Berman’s trilogy on the American Empire and William Ophuls’ Immoderate Greatness: Why Civilizations Fail offer astute analyses on why America’s problems are irreparable and reminiscent of past empires."
    "Simply put, the current monetary system allows America to pay for goods and services with printed dollars."
    "All of the “Made in _______” goods being sold at American retailers, as well as American made products using imported materials, should be 2–5x more expensive than they are now. "
    "The federal government will downsize drastically. "
    "When we can no longer pay our deficits with printed dollars, the 1 in 5 Americans who receive federal aid will see giant reductions in their benefits.
    Government employees will be fired en masse."
    "Since 2008, they have printed over 12 trillion dollars to prop up the financial system."
    https://medium.com/vandal-press/3-re...d-138b1e18bcf4

    12/08 A death cross for the S&P 500 highlights a stock market in tatters – MarketWatch
    12/08 This is the end of trump’s economic sugar high – Forbes Maybe
    12/08 Russia ready to switch off Visa & Mastercard ahead of tougher US sanctions – RT Putin can't get Russians to make a clean break with the dollar. Trump is helping out.
    12/08 Central banks fear they might not rule the world forever – GATA We can always hope.
    12/08 Italy adopts hardline immigration law – Gatestone
    RIGHT, but they're going to back down on the budget.

    Compensation of employees as a percentage of the GDP.
    https://www.oftwominds.com/photos201...oyees12-18.jpg
    So, we had wage deflation at the same time that we had price inflation. We just couldn't afford to keep the economy going. The State stepped in to buy up enough stuff to make up the difference. The State has too much debt and bond buyers are backing off. Wages had their steepest decline after the dotcom crash when the FED inflated everything out of reach. As purchasing power diminished, the CB had to pump in ever-increasing amounts of liquidity to hold back the defaults. Powell has turned that spigot down or off. He wants to wring some of the excesses out of the system. He also wants to raise rates so that he can lower them in the next crisis. He wants ammunition to fight the recession that he will eventually cause.

    Leave a comment:


  • Danny B
    replied
    Armstrong and Malthus

    Merkel is out but, her ideological (and ugly) doppelgänger is in.
    https://www.armstrongeconomics.com/i...places-merkel/
    Keep in mind that Germany has a $1 trillion account surplus. The rest of the EU group has a $1 trillion account deficit. Call me suspicious but, when the crash & burn comes, I suspect that Germany will get the shaft. Versailles Deux

    Armstrong pooh-poohs the idea of a Malthusian future. There is no need to reduce population.
    I have never seen him mention; resource depletion, forced extinction of animals, pollution (China spends 15% of their GDP to counter pollution), stagnant wages for 40 years, habitat loss for everything except humans. "31 million acres for farmland has been developed since 1982."
    "Earth has lost a third of arable land in past 40 years, scientists say "

    Ocean Fish Stocks on “Verge of Collapse,” Says IRIN Report
    Ocean Fish Numbers Cut in Half Since 1970 - Scientific American
    All seafood will run out in 2050, say scientists
    Nearly half marine population lost in last 40 years


    Stocks and bonds are not wealth. They are calls on wealth. Tangible wealth comes out of the air, water and ground. The sun gives us usable energy.
    List of 17 Scarce Resources the World Is Running Out of - Ranker
    None of this matter to Armstrong. He looks at history and sees,, cycles and markets. How could he possibly have a baseline for a society that has widely available birth control? Same for digital currency. Same for runaway automation. He has no baseline for an economy that has instant transfer of capital but, very little mobility of labor. He has no baseline for a world that can bring total destruction on itself.
    He has no baseline for an economy that depends on oil. He has no baseline for an economy that depends HEAVILY on electricity for everything but, is headed into a time of violent solar flux with a weakening and flipping magnetosphere.
    https://www.youtube.com/watch?v=YTaNoiC-buI

    Leave a comment:


  • Danny B
    replied
    Taxes and corruption

    12/07 France overtakes Denmark for top spot in most taxes as percent of GDP – Talk Markets
    12/07 France fears more riots; museums, Eiffel Tower to close – Philly Tribune

    "The French rebellion over taxes on fuel is a Global Warming Tax. So Macron backed off of the fuel tax. To show this is just an excuse for Global Warming and the real objective is to grab more money, "
    "There is something seriously wrong with these people. They claim that not even having a car contributes to only 2.4% reduction in CO2. The biggest decrease in CO2 is to stop having children which would reduce it by 58.6%."
    https://www.armstrongeconomics.com/w...cause-of-58-6/

    California has the highest personal tax rate in the country. Now, they want to tax space travel by the mile AND texting.
    https://www.armstrongeconomics.com/w...om-your-phone/
    12/06 Stocks rebound on word that Fed may pause rate hikes – CNBC
    That's called , "grasping at straws".

    2 kinds of debt;
    "The poster child for all this lately is GE, who spent $40 billion on stock buybacks between 2015 through 2017 on shares that have declined in value 75% since. The company is now has a tangible net worth at negative $48 Billion."
    https://medium.com/@markjeftovic/the...t-85c4fbf3f2bb

    China lockdown, "The Chinese government appears to be stepping up its efforts to fully control all Chinese companies through either arrest or restriction of movement for their leaders."
    https://www.zerohedge.com/news/2018-...rested-one-one

    May seems to think that she is a reincarnation of Thatcher, "May is reportedly still insisting that the only options on the table are "no deal", "her deal" or "no Brexit".
    https://www.zerohedge.com/news/2018-...certain-defeat

    Netanyahooo is under investigation for corruption and, there have been calls for his resignation. NO problem,,, he'll just start a war with Lebanon to distract people.
    https://sputniknews.com/middleeast/2...non-territory/

    "In France we’ve been seeing uncontrollable protesters from across the political spectrum writing “We’ve chopped off heads for less than this” in graffiti on the Arc de Triomphe, which you may be certain has widened plutocratic eyes all around the world.

    And that, I believe, is why the mass media have been behaving so strangely. For two years they have been reaching and leaning all over the place trying to regain control of the narrative like a novice ice skater trying to regain balance, and they are only getting closer to falling. Which probably makes the present moment the perfect time to give them a good shove."
    https://medium.com/@caityjohnstone/m...y-3b220ea0bb97

    Leave a comment:


  • Danny B
    replied
    Ice age,, solar flares,,oil vs banks

    Fossil fuel burning 'postponing next ice age' | Environment | The ...
    https://www.theguardian.com/.../2016...g-next-ice-age
    Ice age delayed by humans... by 100,000 years - CNN - CNN.com
    https://www.cnn.com/2016/01/14/world...ned/index.html
    The average length of a inter-glacial period is about 11,000 years. We are in the Holocene and, it has been warm for about 13,000 years.
    Volcanic event caused ice age during Jurassic Period -- ScienceDaily
    https://www.sciencedaily.com/release...1211124428.htm

    Well, volcanism is definitely on the rise. Suspicious Observers say that we are statistically due for a very large eruption. Dunno.
    In addition to that, Earth is due for a X-45 flare (Carrington) We are close to due for a X-60 flare also.
    Then, there are super-flares X-100,000.
    "Surprisingly, we (they) found 365 superflares on 148 solar type stars (G-type main sequence stars)"
    https://www.swpc.noaa.gov/sites/defa...a_SWW_2015.pdf
    Buy more popcorn, the sun will cook it for you.

    Jim Willie, "the high risk to Wall Street banks from the declining crude oil price whereby the big banks have credit exposure to the suicidal shale sector,"
    12/06 Oil dives 4% as OPEC meeting ends with no details on production cuts – CNBC
    The deep state had made enemies of Iran and Russia. Saudi is pumping out record amounts. They can keep pumping until the banks choke. THAT is why Pox Americana keeps talking about cutting Irani oil exports to zero. Iran said that; if they can't export oil, nobody in the area will export oil. Demonizing Russia to get them to cut oil exports.
    The banks would like to drive the price of oil way up. That doesn't work out very well.
    "Throughout the first half of 2008, oil regularly reached record high prices" $146
    "The stock market crash of 2008 occurred on September 29, 2008"

    "The Prognostications of Ben Bernanke

    We now have the diametrical opposite of the famous "Peter Schiff Was Right" video (a compilation of 2006 and 2007 clips in which Schiff, a financial expert who subscribes to Austrian economics, predicted the deep recession that would follow the bursting of the housing bubble).

    The new, opposite video is a compilation of the 2005–2007 prognostications of Federal Reserve Chairman Ben Bernanke. In it, Bernanke is shown to have been just as embarrassingly wrong as Schiff was uncannily right."
    "Bernanke said that the housing boom was fine because it was supported by, among other things, growth in jobs, incomes, and in the economy in general. But that very growth itself was supported by the housing boom! For example, most of the job growth was in the housing sector. Witness Bernanke's amazing levitating economy: its housing sector is held up by economic growth, which is held up by its housing sector. And it's just as ridiculous that he denied the existence of a housing bubble by pointing to low mortgage rates. The low rates were a chief cause of the housing bubble, and were a direct result of his actions as Federal Reserve chairman."
    https://mises.org/library/ben-bernan...ncannily-wrong

    Leave a comment:


  • Danny B
    replied
    Market crash,,, climate crash

    Since everything is connected, I have to veer off to the climate.
    Armstrong, "Furthermore, couldn't it be that the promoters of global warming (IPCC et al) actually know that CO2 is NOT the problem but by feeding us the propaganda, they actually catch two flies in one blow: increased taxes and reduction of the population because the majority will not be prepared for the upcoming cold/famine."
    "I was at the White House dinner and was seated at a table of ten with the heads of environmental groups. I cannot get my head around how these people think. They openly admitted that this was all about reducing population growth and how to frustrate it with wetlands to Global Warming these days. They DO NOT believe in Global Warming or CO2. They are using this to reduce the population. "
    https://www.armstrongeconomics.com/w...ctor-analysis/

    More from Armstrong, https://www.armstrongeconomics.com/c...-news/climate/

    OK, the warmers actually want to drastically reduce population AND make a buck while doing so.
    Climate change: $4 trillion carbon tax is needed to save humanity from ...
    https://www.independent.co.uk/.../cl...-save-humanity...
    We fork over $4 trillion and,,,,,, the windbag politicians suck up all the CO2. I would pay that if the politicians promised to hold their breath until they died.
    Armstrong believes that the PTB are working on a big depopulation program.
    "In Greer’s book The Ecotechnic Future, he writes that the most isolated areas will be cut-off first from the benefits of industrial civilisation as rising costs lead to the gradual phasing out of services, goods and electric power to the most remote areas."
    That's nice but, when the sovereign bond market crashes, the cities will be most affected. The free $hit army will run wild. I'll cast my lot with the rural people who are used to dealing with weather problems. Look what happened in a 1977 storm.
    https://www.youtube.com/watch?v=Cm9wxpLnd30&t=56s

    What happens in the cities when the food supply shrinks? In South Africa, hail destroyed a forest and killed livestock.
    https://www.youtube.com/watch?v=SLAdgO4obSE
    Here is an incomplete map of crop losses.
    http://iceagefarmer.com/map/
    About 10 years ago, True News warned that we would see the first signs of an Ice Age in the winter of 2018--2019.
    https://www.youtube.com/watch?v=PbVtDa3DqRQ&t=116s
    The old weather patterns have changed so much that it is hard to quantify global warming / cooling.

    Crippled Atlantic currents triggered ice age climate change | Science ...
    http://www.sciencemag.org/.../crippl...climate-change
    Jun 30, 2016 - Now, scientists have implicated the culprit behind those seesaws—changes to a conveyor belt of ocean currents known as the Atlantic ...

    Earth has lost a third of arable land in past 40 years, scientists say ...
    https://www.theguardian.com/environm...urity-shortage
    Dec 2, 2015
    Climate change is going to radically shift weather patterns. Anthropogenic global warming is just a scam.
    https://www.youtube.com/watch?v=oYhCQv5tNsQ&t=49s

    So, what happens when the sovereign bond markets crashes,,, fracking blows up,,,crop losses get worse? How bad will the depression be?
    https://www.youtube.com/watch?v=tNSXWkApxU8&t=100s
    Remember, we blew up the Manmade River Project that was going to irrigate huge areas of north Africa. Slick Willie is responsible for the destruction of the huge food producing capacity of Rhodesia. Looks like Africa gets the axe. This isn't surprising considering that they are the only area that has a rising population.

    Meanwhile, the Central banks are setting us up for a total financial crash.
    Well, millions of economists have been trained in theories that don't actually work. According to the FED, "The Federal Reserve Board employs over 300 Ph.D. economists,"
    Sprott, "In a recent survey not a single major central bank could provide an example of an accurate “a priori” recession forecast."

    So, read the information and, make your own conclusions.
    Last edited by Danny B; 12-07-2018, 03:14 AM. Reason: mistock

    Leave a comment:


  • Danny B
    replied
    The speed-bumps are getting taller

    2 articles, one from a wanker, one from a genius.
    "Long-term readers of the Absolute Return Letter will know that I always distinguish between short-term debt cycles and debt super-cycles. Short-term debt cycles move more or less in parallel with the underlying economic cycles and last on average 7-8 years – in line with the average length of economic cycles.
    Debt super-cycles are a different kettle of fish. They typically last 50-75 years"
    "The growth in debt-to-GDP implies that little of the fancy stuff that have enriched our livelihoods in the last 30-40 years has actually paid for itself. Instead, it has been financed by under-investing, driving productivity growth lower and debt-to-GDP higher. Global under-investments in the past half century amount to no less than $400 trillion "
    Maybe we should stop spending on wars.

    "Here in the UK, an obvious way to default would be for the government to renege on its pension obligations. Total unfunded UK pension liabilities are about £11 trillion with the majority being the government’s. £11 trillion is more than 5 times UK GDP. Does that money exist? No, and the UK pension model will definitely have to be revamped at some point."
    We can't reduce war spending

    "Wealth-to-GDP is long-term stable and, as you can see in Exhibit 4 below, the US long-term mean value is around 380%; i.e. total US household wealth is on average about 3.8 times US GDP. The mean value varies somewhat from country to country, but it is long-term stable everywhere. Think of the ratio as a measure of capital efficiency"
    "Wealth simply cannot outgrow GDP (or vice versa) in the long run. The two must grow hand-in-hand longer term. I have seen US data going back about 150 years, and every time wealth-to-GDP has deviated meaningfully from 380%, it has mean-reverted. Every single time!"

    "As you can see from Exhibit 4, US wealth-to-GDP now exceeds 500%; i.e. it must drop 25-30% to re-establish the long-term mean value. That can happen in two ways. Either GDP grows faster than wealth for an extended period of time, or 25-30% of all US household wealth is destroyed."
    "The three most important contributors to wealth in society are property, bonds and equities (in that order)."
    Feces-for-brains doesn't list a single thing that produces tangible wealth
    "but the fact that populism is on the rise worldwide does worry me. What is that going to lead to?"
    We can't possibly have the creators of tangible wealth actually receiving the benefits.
    "For now, my favourite to mark the end of this debt super-cycle is a complete meltdown - and subsequent revamp - of the defined benefit (“DB”) pension system,"
    "The problem is quite simple. In many countries around the world, large amounts of pension savings are still managed per the DB model; i.e. the risk is still overwhelmingly the employers’ (including the government). With falling interest rates and risk assets only delivering modestly positive returns, particularly outside the US, liabilities have grown much faster than assets in many pension funds in recent years."
    The rescue of the banks is what killed the pension plans.

    “Either we all take a haircut and convert to defined contribution plans [aka DC plans where the risk is transferred to plan members], or our country will go bankrupt, and you will get nothing at all. Which of the two outcomes would you prefer?”
    https://www.arpinvestments.com/arl/t...-of-defaulting

    Now for the genius;
    "Of all the delusions that have infected the minds of economists, central bankers, and the investing public in recent years, perhaps none is as short-sighted and pernicious as the idea that aggressively low interest rates are “good” for the economy and the financial markets.

    There is, of course, a certain truth to that idea, roughly equivalent to proposing that snorting amphetamine-laced cocaine is “good” for one’s energy"
    "Back in 2003, Alan Greenspan mixed the soap of what would become the housing bubble by holding interest rates to just 1%. Investors responded to the uncomfortably low yields on Treasury bills by looking for alternatives that offered a seemingly safe “pickup” in yield. They found that alternative in mortgage securities. Wall Street was more than happy to satisfy the demand for more “product,” as they called it, by creating more mortgage bonds. But see, creating a mortgage bond requires you to actually make a mortgage loan to someone, which is how we got zero-down, no-doc, interest-only loans. "

    "In my 2003 piece outlining that developing bubble, I began, “T.S. Eliot once wrote ‘Only those who risk going too far can possibly find out how far one can go.’ It seems that the U.S. financial system is bound and determined to find out… the real question is this: why is anybody willing to hold this low interest rate paper if the borrowers issuing it are so vulnerable to default risk? That’s the secret. The borrowers don’t actually issue it directly. Instead, much of the worst credit risk in the U.S. financial system is actually swapped into instruments that end up being partially backed by the U.S. government. These are held by investors precisely because they piggyback on the good faith and credit of Uncle Sam.”"
    About that upcoming sovereign bond default,,,

    "In the Federal Reserve’s attempt to bring the U.S. out of the crisis of its own making, the Fed has produced conditions that make another collapse inevitable. Unfortunately, the scale of the present bubble is far grander, and the consequences are likely to be more severe. By the completion of this cycle, I continue to expect the S&P 500 to lose roughly two-thirds of the market capitalization it reached at its September 20 peak. Mountains of covenant-lite debt and leveraged loans, this cycle’s version of “sub-prime” mortgages, will go into default."

    "so my sense is that a major price collapse like 2000-2002 and 2007-2009 is the most likely way this bubble will be resolved. Meanwhile, it’s worth noting that it would not even take a decline to historically run-of-the-mill valuations to wipe out every bit of S&P 500 total return that the index has enjoyed since 2000."
    "quantitative easing and zero interest rates have not been “good” except in the myopic sense of encouraging a short-term burst of very bad choices and misallocations of capital."
    "With the total capitalization of U.S. corporate equities recently pushing $40 trillion, I continue to expect that $20 trillion or more of what investors count as “wealth” will vanish over the completion of this cycle."

    FRED, 96 million Americans are not in the labor force.
    "That leaves cyclical growth as the only remaining component. Yet with the U.S. unemployment rate already down to 3.7%, the likelihood of substantial further declines is limited. Even pushing the unemployment rate down to 1% over the coming 4 year period would add just 0.7% annually to economic growth."
    Everybody keeps harping on the unemployment rate as if it were a gold-plated enumeration of all the people not being productive.,

    The Phillips curve is an economic concept developed by A. W. Phillips stating that inflation and unemployment have a stable and inverse relationship. The theory claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.

    "I’ve regularly argued elsewhere that the “Phillips Curve” is actually properly viewed as a relationship between unemployment and real wage inflation, but it bears repeating that there is no meaningful relationship between general price inflation and unemployment, nor will you find a strong, reliable relationship between inflation and government debt, the outstanding quantity of base money, the output gap, or virtually anything else."
    How can he be smart and stupid at the same time?
    https://www.hussmanfunds.com/comment/mc181128/
    Both these articles have some good information,,, and some ripe BS also.

    Armstrong, "Today, governments wage war more often for the private benefit of select groups rather than the state. The invasion of Iraq made billionaires out of Cheney’s friends and left the American people with endless trillions in debt that will last collecting interest to constantly roll indefinitely until the crash and burn."
    https://www.armstrongeconomics.com/a...-of-our-times/
    Everybody in the financial community has worked hard to transfer all risk to the state.

    Armstrong, "f we throw in all the economic problems we see coming with pensions and a monetary crisis on top of all of that, I would not count on 2020 being a normal presidential election. It may be the most violent event in American political history. The last major riots during a presidential election were August 1968 at the Democratic National Convention – 1968.652. If we add 51.6 years we arrive right on schedule – 2020.252. So get ready. 2020 is not going to be very civilized"
    https://www.armstrongeconomics.com/i...rican-history/

    More bumps in the road.
    12/06 Market sell-off set to continue as Dow futures get hit – CNBC
    12/06 Global sell-off hits Asia as Hong Kong stocks drop 2% – CNBC
    12/06 The market doesn’t care how “fantastic” your stocks are – Real Investment Advice
    12/06 Illinois’ other debt disaster: $73 billion unfunded retiree health benefits – Wirepoints
    12/06 A flattening yield curve has investors spooked – what happens next – CNBC
    12/06 Competition Is dying as the biggest corporations gobble up everything – EOTAD
    12/06 Multi-strategy hedge funds suffer “one of worst months ever” – ZH
    12/06 Citi warns Q4 market revenue will unexpectedly shrink from last year – ZH


    12/05 An eye-scanning lie dectector is forging a dystopian future – Wired
    Use it on the politicians.

    Stock Market Crash: The Dow Has Fallen Nearly 2,500 Points And FAANG Stocks Have Lost A TRILLION Dollars In Value
    Predictions from Saxo Bank.
    https://www.zerohedge.com/news/2018-...edictions-2019

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