The great weakness among economic analysts and many independent analysts is their refusal to examine the long game of the elites. The Brexit is part of a globalist long game that is designed to finally and completely demonize sovereignty movements. Think about it for a moment — what better way to remove the only obstacle in their path? The globalists create an economic crisis and then foster conditions by which their primary opponents (liberty activists) get BLAMED for it. They then swoop in as the heroes of their little cinema after the damage is already done and offer their solution: complete globalization. With enough people destitute from a global financial calamity, they may very well be begging the elites for help.
The largest U.S. banks got permission from regulators to return profits to investors, but the U.S. banking units of Deutsche Bank and Banco Santander were held back again as the Federal Reserve released the final results of its 2016 "stress tests."
August 15, 2016 will mark the 45th anniversary of President Nixon’s decision to close the gold window. U.S. citizens and the government are now beholden to the consequences of years of accumulated debt and weak productivity growth that have occurred since that day. Now, seven years after the end of the financial crisis and recession, these consequences are in plain sight. The Fed finds themselves crippled under an imprudent zero interest rate policy and unable to raise interest rates due to fear of stoking another crisis.
After failing the Federal Reserve's annual stress tests in March 2014, the WSJ reports that Citigroup hired multiple consulting firms, and spent about $180 million on stress tests during the second half of 2014 in order to address regulator's concerns. It turns out that banks are spending tens of billions in order to prepare for stress tests, creating quite a lucrative business for consultants.
One strategy that has worked unusually well for the last several years is a simple positioning trade of selling the 10 most overweight stocks and buying the 10 most underweight stocks by active managers. This single trade has yielded over 16ppt of alpha year-to-date
Why the ongoing rally? A squeeze, sure, and also month-end fund flows. But the fundamental driver remains one and the same, and we quote Bloomberg: "the relief rally endures as Asian and European stocks rally with crude oil amid speculation policy makers will use stimulus to blunt the impact of the U.K.’s decision to leave the European Union, including a pause in the Federal Reserve’s tightening cycle. Investors are looking to policy makers for support."
In 2006 it was exactly twelve months after delinquency rates bottomed that the recession began. If the same period applies, we are due for a recession. In the first quarter of the Great Recession in 2008, delinquency rates were only 1.45%. We are already above that level. The fact that increasing loan delinquency coincides with mountains of debt maturing in 2016 and 2017 is a topic for next time.
So there we have it, Hillary Clinton will pull millennials out of from the basement of their parents house and into the world of business simply by allowing loan deferments that don't accumulate interest. Just as long as nobody ever addresses the core issues that are driving millennials into debt with no real opportunity to repay that debt to begin with, the status quo will continue to survive, and the politicians will all be left scratching their head as to why these programs just aren't working. Once again, the Federal Reserve and its monetary polices are left intact, and the politicians won't ever be forced to make any real fiscal reforms - that would just be too difficult.
The head of the ECB avoided mentioning the U.K.’s vote to leave the European Union but instead called for greater alignment of policies globally to mitigate the spillover risks from ultra-loose monetary measures. “We can benefit from alignment of policies,” Draghi said at the ECB Forum in Sintra, Portugal. “What I mean by alignment is a shared diagnosis of the root causes of the challenges that affect us all; and a shared commitment to found our domestic policies on that diagnosis."
How do you know that "things are getting serious"? Well, one way as Jean-Claude Juncker explained before, is that "you have to lie." Another is when central bankers start withdrawing from cental bank gatherings, which as Reuters reported is what both Mark Carney and now Janet Yellen have done, in this case pulling out of the ECB Forum on Central Banking that starts today and lasts through Wednesday. Clearly they have bigger things on their plate...
"If all an analyst does is track equities and sometimes commodities, they are never going to grasp what is happening in the economy. Our financial system is not based entirely on numbers and graphs; it is a sociopolitical apparatus. Political and social developments can indeed signal what might happen in stocks and on mainstreet. The relations are there, but they are often indirect. In 2016, EVERYTHING is snowballing with tension. It was only a matter of time before something snapped."
"The status quo in Europe is over. We will have to get used to this. Political risk has risen, and we will be dependent on central bank interventions, the calmness of markets, and measured political decision-making to keep the world's economic growth momentum and thus support risk assets."