Interestingly, the BoJ’s attempts to achieve its price inflation target continue to end in failure with unwavering regularity. While the central bank’s astonishing ineptness in this respect is a blessing for Japan’s citizens (at least for the moment, their cost of living doesn’t increase further), it harbors the danger that even crazier monetary experiments will eventually be tried.
"It Has Been A While Since We’ve Had A Profitable Quarter To Report" - Einhorn's First Quarter LetterSubmitted by Tyler Durden on 05/02/2016 - 18:18
"It has been a while since we’ve had a profitable quarter to report. Though we would like to make it a habit, trying to manage for quarterly results is really not our philosophy. We think one of our advantages is the ability to be more patient than others, especially as investment horizons appear to be getting shorter.... the Fed’s “data dependency” doesn’t appear to relate to employment, which continues to improve, or core inflation, which is now running above its 2% target. We believe the increasingly adventurous monetary policy is bullish for gold."
Today, the Saudi foreign minister Adel al-Jubeir, while speaking to reporters in Geneva after talks with U.S. Secretary of State John Kerry which mainly focused on Syria, admitted this threat saying passage of the law would "erode global investor confidence in America" by which he was, of course, referring only to Saudi Arabia. However, to avoid another slap in the face of US foreign policy on the record, he denied that Saudi Arabia had "threatened" to withdraw investment from its close ally and instead called it a mere "warning."
If the world’s economies were really out of intensive care, why would ultra-radical monetary policies like helicopter money be increasingly debated at the highest level of governments? Also, how come 70% of Americans believe the US economy is on the wrong course? And why do almost half of US citizens admit they couldn’t come up with $400 to meet an unexpected need? Yes, I know why ask why? And it is what is, and a bunch of other clichés. But this isn’t normal, it isn’t healthy, and - at least in the opinion of this author—it isn’t going to end well.
Sadly, a typical consequence of war is that innocent "collateral damage" lives are lost. The civil war in Syria is no different, as over the past week four medical facilities were hit with missiles from fighter jets taking out their targets from the skies, pushing the civilian death toll even higher. One of the targets that got hit last week (during a truce nonetheless) was a pediatric hospital in Aleppo that was supported by both Doctors Without Borders and the International Red Cross. Recovered cctv footage captures the moments before, during, and after the hospital took a direct hit.
The world is undergoing a profound demographic shift that will cause sweeping changes over the next few decades. Those changes will broaden the scope of our study of economics and investing; they will alter our understanding of sociology; and they will radically affect politics and governments.
Following this weekend's bankruptcies of Ultra Petroleum and Midstate Petroleum which added $3.1 billion to the mushrooming high-yield energy bond default volume tally, in addition to the $1.5 billion of credit facility defaults, the energy high-yield default has soared to a record 13% rate, surpassing the 9.7% mark set in 1999, according to Fitch Ratings.
Debt, if used for productive investments, can be a solution to stimulating economic growth in the short-term. However, in the U.S., debt has been squandered on increases in social welfare programs and debt service which has an effective negative return on investment. Therefore, the larger the balance of debt becomes, the more economically destructive it is by diverting an ever growing amount of dollars away from productive investments to service payments. The relevance of debt growth versus economic growth is all too evident as shown below...
For the last 11 weeks - off The Dimon Bottom - the S&P 500 has made higher lows week after week without break. Last week, however, saw the streak end (with a lower low set). This length of incessant "uptrend" streak has not been since February 2011, at which time it was broken leading to an immediate decline followed by a considerably plunge soon after...
Our health care system is going to implode under its own weight. National Health Expenditures are approaching 20 percent of gross domestic product — a figure that is expected to about double over the next half century. Obamacare didn’t start the process, but it’s expediting the end. Obamacare did not reform health care system; it merely transformed it to subsidize favored constituents. To pay for all this price gouging, employers are being forced to offer benefits that many workers themselves cannot afford or absorb in lower take home pay.
"For a start, savers can still earn satisfactory rates of return from diversifying their assets, even when interest rates on deposit and savings accounts are very low. For example, US households allocate about a third of their financial assets to equities..."
Of all the inane, self-serving, deals German Chancellor Angela Merkel made with Turkey, visa-free travel for 80 million Islamic Turks tops the list. “This is all a nightmare,” said one diplomat charged with making the deal work. Nightmares aside, Brussels Prepares Legal Groundwork on Visa-Free Travel for Turks.
2008 Deja Vu? Treasury Warns Congress - Bailout Puerto Rico Or Risk "Chaotic Unwinds... Cascading Defaults"Submitted by Tyler Durden on 05/02/2016 - 14:39
In a disappointingly similar tone to the warnings, threats, and promises sent to Congress in 2008 when demanding the banks get their bailout (or else), Treasury Secretary Jack lew has released a letter he sent to Congress warning that if Puerto Rico's situation is not "fixed" in an "orderly" manner "quickly" then the nation will face "cascading defaults."