Goldman's Global Leading Indicator (GLI) final print for February affirms the global economy has entered a contraction with accelerating negative growth. Just six months after "expansion", the Goldman Swirlogram has collapsed into "contraction" with monthly revisions notably ugly and 9 out of 10 components declining in February. Some have suggested, given US equity's strong February (buyback-driven) performance, that the US economy will decouple from the world... or even drive it.. but that is 100% incorrect. US Macro data has fallen at its fastest pace in 3 years and is at its weakest level since July 2011 as 42 of 48 data items have missed since the start of February.
The 2008 worldwide financial crisis was produced due to excessively easy monetary policy, which caused the largest debt driven mal-investment in housing, automobiles, and Chinese produced crap in world history. The consequences of this debt bacchanalia should have been the orderly liquidation of the Wall Street entities that created the crisis, the writing off of trillions in bad debt, corporate and personal bankruptcies of businesses and people who borrowed recklessly, a sharp steep economic decline to cleanse the excesses, and politicians who immediately began the process of reducing budgets and addressing long term unfunded unpayable liability promises. Instead, the psychotic oligarchs did not want to lose any of their power, wealth or control over the proletariat. They have done the exact opposite of what needed to be done.
When do you know that Wall Street has officially succeeded in turning back the clock 5 years? When the market’s collective mind state has been reconditioned to the point where analysts feel comfortable creating research notes with titles like this one: “Keep Calm and Lever Up.”
Throughout history, political, financial, and military leaders have sought to create empires. Great Britain owned the 19th century but lost its empire due largely to costly wars. The US took over in the 20th century and, like Rome, rose as a republic, with minimal central control, but is now crumbling under its own governmental weight. Invariably, the last people to understand the collapse of an empire are those who live within it. Americans remain hopeful that the dramatic decline is a temporary setback from which they will rebound...Not likely.
Presenting the Florida jobless claims website. According to the Miami Herald reports, on Friday, the state’s auditor general issued a scathing 45-page audit that joins mounting evidence that CONNECT - aka Florida's Online Reemployment Assistance System or said simpler, jobless claims website - is a system in disarray.
Exactly 15 years ago today, who said it?
"You want winners? [This] is what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now. OK. Here goes. Write them down..."
Fifteen months later, Money magazine reported that [his] list had cratered 82%... Accountability ruins the game.
“They were people with great dignity,” Ivo Costamagna said of his neighbors who committed suicide in 2013. Romeo Dionisi, 62, and Anna Maria Sopranzi, 68, hanged themselves after Ms. Sopranzi’s pension evaporated. “Romeo just wanted a job.” But no jobs were available in the dismal Italian economy.
In what may be another case of research confirming common sense, a new study finds, in all four regions of the world studied, “unemployment was related to an increased relative risk of suicide by 20-30%." While the tragic consequences of ZIRP, bailouts, and multiple QEs have so far been ignored, a tsunami of suicides are coming as the under-saved American baby boom generation faces the stark reality of having to work until they die to survive.
"The BOJ’s purchases have had a 'huge' impact on the market’s liquidity. Buying bonds at a faster pace would make it more difficult for the BOJ to exit from its easing policy when the time comes to reduce stimulus."
Our world is becoming increasingly interconnected, and that opens up some wonderful possibilities. But there is also a downside. What if we rapidly reach a point where one must be connected to the Internet in order to function in society? Will there come a day when we can’t even do basic things such as buy, sell, get a job or open a bank account without it? And what about the potential for government abuse? Could an “Internet of Things” create a dystopian nightmare where everyone and everything will be constantly monitored and tracked by the government? That is something to think about.
Remember, no matter how severe the repression... it's for your own good!
yes: the S&P may well be "fairly priced" here, if one assumes an 18x (rounded up) forward P/E multiple to be fair - a number which is above the prior 5-year average forward 12-month P/E ratio of 13.6, and above the prior 10-year average forward 12-month P/E ratio of 14.1. And in order to achieve that, not much has to happen: instead of hiring millions, America's corporations just need to fire about 2-3 million people in order to extract the kinds of net margin efficiencies that are already priced in!
There is no exit strategy…there is only a continuation strategy... and The Fed’s cronies have always known this. Yellen is simply paralyzed with fear that the markets will violently react to a tightening of policy. The Fed is being held hostage to the financial markets but, ironically, is in no mood to escape its captors despite so many clear opportunities. The lack of action, by Yellen, can only be described as cowardly.
When investor preferences are risk-seeking, overly loose monetary policy can have a disastrous effect by promoting reckless speculation and enhancing the ability of low-quality borrowers to issue debt to yield-starved investors. This encourages malinvestment and financial distortions that then collapse, as we saw following the tech and housing bubbles. Those seeds have now been sown for the third time in 15 years. In fact, the present moment likely represents the best opportunity to reduce exposure to stock market risk that investors are likely to encounter in the coming 8 years.