Dear Americans, meet your venerable central planners:
FED'S EVANS: DOT PLOT CHART CLEARLY SHOWS US ECON DOING BETTER
So, according to the Fed's academic experts, the US economy is not, well, the US economy, it's not Y = C + I + G + NX, it's not the product of all goods and services created in the United States... it's this:
The warnings are getting louder. Is anybody listening?
The persistent claim emanating from Washington that America spreads freedom and democracy around the world has been exposed as ludicrous numerous times and in many parts of the world, but not in the US itself, and that’s what counts most. The notion that we we can grow our way out of the mess that our previous growth spurt has gotten us into, rests at best on very flimsy foundations. To shake off this all-encompassing growth ideal, however, we would need to radically change our ‘model’ of the world.
Investors should hope for the best while making preparations for less benign scenarios. This can be achieved by reducing leverage and speculation and having a healthy allocation to physical precious metals in the safest vaults in the world.
It was supposed to be the day China's triumphantly returned to the markets from its Golden Holiday week off, and with global stocks soaring over 5% in the past 7 days, hopes were that the Shanghai Composite would close at least that much higher and then some, especially with the "National Team" cheerleading on the side and arresting any sellers. Sure enough, in early trading Chinese futures did seem willing to go with the script, and then everything fell apart when a weak Shanghai Composite open tried to stage a feeble rebound into mid-session, and then closed near the day lows even as the PBOC injected another CNY120 bn via reverse repo earlier.
"I Would Say Don't Worry" Says Chinese Central Banker As Indian Central Banker Says "World Economy Is Looking Grim"Submitted by Tyler Durden on 10/07/2015 20:17 -0400
"I would say, don't worry" said Yi Gang, deputy governor of the People's Bank of China, after the International Monetary Fund warned of risks in China's economic challenges.
"The world economy is looking grim" - said Raghuram Rajan, Indian central bank governor and former chief economist of the International Monetary Fund.
In what seems like a nervous populist move amid Bernie Sanders' gains, Hillary Clinton has flip-flopped rather stunningly to oppose President Obama's Trans-Pacific Partnership. Despite supporting the bill at least 45 times, as CNN's Jake Tapper points out, Clinton told PBS' Judy Woodruff Wednesday in Iowa that, "As of today, I am not in favor of what I have learned about it." It's also a departure from the Clinton legacy, as CNN notes, it was President Bill Clinton who, two decades ago, signed the first mega-regional pact: the North American Free Trade Agreement.
The US and world economies are drifting inexorably into the next recession owing to the deflationary collapse of commodities, capital spending and world trade. These are the inevitable “morning after” consequence of the 20-year global credit binge which has now reached its apogee. The apparent global boom during that period was actually a central bank driven excursion into the false economics of household borrowing to inflate consumption in the DM economies; and frenzied, uneconomic investing to inflate GDP in China and the EM. The common denominator was falsification of financial prices. By destroying honest price discovery in the financial markets, the world’s convoy of money-printing central banks led by the Fed elicited a huge excess of financialization relative to economic output.
Having government control over the levers of the economy can have advantages. For example, by taking prompt action, the Chinese government was able to pull the economy out of the recession remarkably fast, basically by fire-housing the stimulus package that was equivalent to 12% GDP. That’s the advantage. The only problem is that these kinds of short-term advantages come with long-term, painful consequences.
What most investors do not realize currently is they could go to "cash" today and in five years will likely be better off. However, since making such a suggestion is strictly "taboo" because one might "miss some upside," it becomes extremely important for measures to be put into place to protect investment capital from the coming downturn. Of course, since Wall Street does not make fees on investors holding cash, maybe there is another reason they are so adamant that you remain invested all the time.
The Trans-Pacific Partnership: Permanently Locking In The Obama Agenda For 40% Of The Global EconomySubmitted by Tyler Durden on 10/06/2015 18:29 -0400
We have just witnessed one of the most significant steps toward a one world economic system that we have ever seen. Negotiations for the Trans-Pacific Partnership have been completed, and if approved it will create the largest trading bloc on the planet. In this treaty, Barack Obama has thrown in all sorts of things that he never would have been able to get through Congress otherwise. And once this treaty is approved, it will be exceedingly difficult to ever make changes to it. So essentially what is happening is that the Obama agenda is being permanently locked in for 40 percent of the global economy.
The best headline to summarize what happened in the early part of the overnight session was the following from Bloomberg: "Asian stocks extend global rally on stimulus bets." And following the abysmal data releases from the past three days confirming that the latest centrally-planned attempt to kickstart the global economy has failed, overnight we got even more bad data, first in the form of Australia's trade deficit, and then Germany's factory orders which bombed, and which as Goldman said "seems to reflect genuine weakness in China and emerging markets in general and this will weigh on the German manufacturing sector."
For many years now, it’s been clear that China would soon be pulling the strings in the U.S. financial system. In 2015, the American people owe the Chinese government nearly $1.5 trillion. Of course, the Chinese aren’t stupid. They realize we are both trapped.China has recently put into place a covert plan to get back as much of its money as possible - by extracting colossal sums from both the United States government and ordinary citizens, like you and me.
Once again the corporatocracy wins as the so-called "Trojan horse" Trans-Pacific Partnership (TPP) trade agreement has been finalized. As WSJ reports, the U.S., Japan and 10 countries around the Pacific reached a historic accord Monday to lower trade barriers to goods and services and set commercial rules of the road for two-fifths of the global economy, officials said.
Several months ago activist Nelson Peltz may lost his proxy fight against DuPont, but in retrospect he may be counting his lucky stars as moments ago the company became only the latest chemical giant to admit the gruesome reality of the global economic slump driven by a historic USD surge, when it not only cut its second half operating EPS from $0.75 to $0.40, in the process also slashing full year operating EPS from a prior guidance of $3.10 to just $2.75 mostly blaming Brazil, but in an even bigger shocker also reported that its CEO and Chairman Ellen Kullman is retiring from the company effective October 16.