Booms powered by credit, new markets and speculation are followed by busts as night follows day. This creates a very difficult test for every nation-state facing the inevitable bust: how does the leadership deal with the end of the boom? As the world is about to learn once again, the "fix" may make the next bust even more destructive.
China as the global Bubble’s focal point – the weak link yet, at the same time, the key marginal source of Bubble finance. China’s policy course appears to focus on two facets: to stabilize the yuan versus the dollar and to resuscitate Credit expansion. For better than two decades, similar policy courses were followed by myriad EM policymakers in hopes of sustaining financial and economic booms. Many cases ended in abject failure – often spectacularly. Why? Because when officials resort to such measures to sustain faltering Bubbles it generally works to only exacerbate systemic fragilities. For one, late-stage reflationary measures compound Credit system vulnerability while compounding structural impairment to the real economy. Secondly, central bank and banking system Credit-bolstering measures create liquidity that invariably feeds destabilizing “capital” and “hot money” outflows.
The talking heads were busy this week powdering the GDP pig. By averaging up the “disappointing” 1.5% gain for Q3 with the previous quarter they were able to pronounce that the economy is moving forward at an “encouraging” 2% clip. And once we get through this quarter’s big negative inventory adjustment, they insisted, we will be off to the ‘escape velocity’ races. Again. No we won’t! The global economy is in an epochal deflationary swoon and the US economy has already hit stall speed. It is only a matter of months before this long-in-the-tooth 75-month old business expansion will rollover into outright liquidation of excess inventories and hoarded labor. That is otherwise known as a recession.
Time and time again, I’m hearing the same sticking points for failing to prepare – for failing to assure a more promising future for themselves and their families.
Shantytown, Stockton, California, USA
Passports are nothing more than a form of control - a way to obtain oodles of personal information and to restrict one of the most basic freedoms of humanity - the freedom to move. So you can imagine how excited we were when we read about Australia’s government announcing a program to eliminate passports. Great news, right? Well, no...
Those were just excuses, it’s not like any of those factors suddenly changed and were fixed magically on October 1st.
It's that time again. From 'jolted' Jeb to 'cool' Carly and from 'calm' Carson to 'turmoiling' Trump, for some of the GOP presidential nominee candidates, tonight could be the last hoorah in a campaign that has seen apolitical entrants dominate the mainstream Washington muppets. Moderated by John "I never met a Republican I didn't like" Harwood, we are sure there will be some tension as the "general health of the economy" planned focus may morph into any and everything as the debate pushes beyond two hours. Please watch responsibly...
Varoufakis Releases Full List Of Public Speaking Fees To Mute "Greek Outrage" At "Self-Enrichment Drive"Submitted by Tyler Durden on 10/28/2015 11:30 -0500
In order put an end to the "Greek outrage" that Yanis Varoufakis may be doing what Hillary and Bill Clinton have been so good at, namely engaging in a "self-enrichment drive" and profiting from speeches made after his political departure (which in the Clintons' case was merely a tacit way of purchasing influence and future favors, i.e., bribing), and laid out all his public speeches and the associated fees since August 2015.
We live in an era of illusion: the illusion of understanding, and the illusion of control. The net result is nonsensical policies that fail to achieve their stated objectives.
Guest Post: Donald Trump Says The U.S. Should Have Stolen Iraqis' Oil After Destroying Their CountrySubmitted by Tyler Durden on 10/27/2015 17:45 -0500
What’s refreshing about Trump is the directness with which he expresses his psychopathy. For example, candidates such as Hillary Clinton sugar-coat theirpsychopathy, or even find ways to get their interviewers to join eagerly in their expressions of it (camaraderie with power-holders), but they don’t say such blatant things as (to paraphrase Trump here), “After we raped them — which we shouldn’t have done — we should have stolen from them, and we should still be stealing from them.”
The weakness seen in world economic activity is partly the result of the lack of a real purge of the financial system in 2008. It has become unimaginable to let entire parts of the system collapse, and the titling of some financial institutions as “systemic” is part of this logic. Policymakers attempting to keep unhealthy economic and financial institutions alive are making a mistake. The very essence of capitalism lies in the process of creative destruction. What we see here is not a way out of the crisis. Instead, we are on the edge of a new financial disaster.
It is obvious that the Healthcare Industry in the US is in need of some major overhaul, and I am not talking about a politically expedient solution as was the latest undertaking by the Obama administration.
"The ability of corporations to take a 1% to 2% revenue line [gain] and turn it into 5% to 6% profit growth is waning. They’ve run out of rabbits to pull out."
Can the stock market completely ignore these five key changes and keep powering higher on the fumes of Mario Draghi's promises?