"The last duty of a central banker is to tell the public the truth." - Alan Blinder, former Federal Reserve Board Vice Chairman
The correction in the equity markets has brought the S&P 500 down close to a confluence of key technical levels.
JPM's Kolanovic Warns Upcoming Recession Could Be Comparable To 2008 Crisis; Says "Buy Gold, Cash And VIX"Submitted by Tyler Durden on 02/11/2016 23:33 -0500
"Gglobal markets are now facing a significant ‘negative wealth effect’ that has a potential to result in a recession. This negative wealth effect of low commodity prices and a strong USD combined with the slowdown in China could be comparable to that of the 2008/2009 crisis (it involves diverse effects ranging from layoffs in the Global Energy sector to a lack of EM Sovereign wealth flowing into developed market equity hedge funds). While the economists were debating if the low-priced oil is good or bad for the economy, the equity markets never had any doubts – Oil and Equities were moving down together."
"The preservation of an insolvent currency system requires that the owners of currency have no way to protect it..."
Because so much is riding on what so few decide,once the faith in the Central Banks fail, the chances of us getting out of this diminish every second...
"This is a very price elastic market. The only reason price hikes held last year was that all escorts raised their prices; customers had little choice. But it’s also a testimony to income growth: customers had the available disposable income."
The reality of loss will be more than most can stomach and sentiments of “time in the market” will go mostly unheeded. This is, of course, why many of the coveted millennial investors have already rejected much of the Wall Street rhetoric after watching the devastation that wrecked their parents over the last 15 years.
The reality that cannot be spoken within the conventional media is that all the primary financial systems we believe are permanent and indestructible are actually on borrowed time.
"So back to the original question WHAT NEEDS TO BE DONE. Simple? Recognize the problem. It is not oil, it is not in the banks..it is a run on central bank liquidity, especially dollar based and there needs to be much more ($) liquidity.... Cash shd be charged interest -- put the micro chip in large denom notes/tax cash withdrawals.. encourage spending not saving."
Let me be blunt: this next crash will be far worse and more dramatic than any that has come before. Literally, the world has never seen anything like the situation we collectively find ourselves in today. The so-called Great Depression happened for purely monetary reasons. Before, during and after the Great Depression, abundant resources, spare capacity and willing workers existed in sufficient quantities to get things moving along smartly again once the financial system had been reset. This time there’s something different in the story line...
We now expect the March package to include a larger deposit rate cut of 20bp, taking it to -0.5%
We now expect another package after that, possibly as early as June
We expect this second package to take the deposit rate to -0.7% and to extent QE until end-2017
Our forecast change is motivated by risk management amidst low inflation, rather than a macro forecast change
Not only has free speech become a four-letter word - profane, obscene, uncouth, not to be uttered in so-called public places - but in more and more cases, the government deems free speech to be downright dangerous and in some instances illegal. Yet by allowing the government to whittle away at cherished First Amendment freedoms - which form the backbone of the Bill of Rights - we have evolved into a society that would not only be abhorrent to the founders of this country but would be hostile to the words they used to birth this nation.
Here is the one chart showing why the time to panic about Canadian banks may have finally arrived...
The upper-middle class that's supported the "recovery" with massive discretionary spending is far more vulnerable to implosion/insolvency than is generally appreciated.
"The biases of momentum investing and passive indexation have resulted in valuation distortions across assets as well as equity segments including Technology. Over the past years this trend has picked winning assets, sectors, and stocks often with less regard to fundamental valuation and more regard to momentum and extrapolated growth. We believe that 2016 may result in a reversion of this trend.... Even if this rebalancing comes as a result of market volatility and broader equity declines, long term it will benefit capital markets and the efficient allocation of capital."