"The world has fundamentally shifted over the last decade, especially since we’ve emerged from the Great Recession... But the professional class has been very slow to understand what is going on, not just quantitatively but qualitatively in a new generational configuration that I call the Fourth Turning. They don’t accept the new normal. They keep insisting, just two or three years out there on the horizon, that the old normal will return – in GDP growth, in housing starts, in global trade. But it doesn’t return."
DB's Jim Reid today writes that "Markets are crying out for a circuit breaker at the moment." There is just one problem: nobody knows what this circuit breaks would and should be, or if it would even work.
Central Banks Are the PROBLEM, Not the Solution ... the DISEASE, Not the Cure
The stock markets of the so-called PIIGS are breaking down on an absolute and relative basis – not a positive development for global markets.
“Given the current environment in the oil and gas market and the poor outlook for future fundamentals in the short to medium term, BNP Paribas has had to make adjustments to some of its businesses and has decided to stop the redevelopment of its reserve-based lending business."
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...
"Trying to divine the end of the rout is difficult given the globe is in the midst of a series of tightly intertwined, self-reinforcing, and correlated trades and narratives (i.e. oil slumps and drags inflation down with it which prompts CBs to ratchet up accommodation which sinks banks which crushes general market sentiment and the overall price declines tighten financial market conditions and scares corporate execs and actual economic activity begins to deteriorate)."
"There is excessive debt everywhere and negative interest rates are dangerous... My number one fear? That’s the same as asking me where it will start. When you view the economy as a complex, adaptive system, like many other systems, one of the clear findings from the literature is that the trigger doesn’t matter; it’s the system that’s unstable. And I think our system is unstable... Central Bank models are just wrong"
"The Fed doesn't have a clue!" - We allege that not only because the Fed appears to admit as much, but also because our own analysis leads to no other conclusion. With Fed communication in what we believe is disarray, we expect the market to continue to cascade lower - think what happened in 2000. To understand what's unfolding we need to understand how the Fed is looking at the markets, and how the markets are looking at the Fed.
Economics Professor: Negative Interest Rates Aimed at Driving Small Banks Out of Business and Eliminating CashSubmitted by George Washington on 02/09/2016 17:33 -0500
The REAL Agenda ...
And you thought Greece was "fixed"...
Meltdown-Mode: European banking stocks are imploding, CDS spreads are exploding.
Three out of the five major economies are already experiencing stagnant or negative private credit growth. Three down, two to go. Helicopter money--government issued "free money" to households--is no replacement for private credit expansion.
The ultimate cost of protecting the privileges of the few at the expense of the many is the dissolution of the social order that enabled the rule of the privileged few.