Global Economy

Tyler Durden's picture

Don't Just Follow The Money - Follow The Income





Six long years of lies has persuaded many that the lies can be sustained for another six years--or even sixty years. But lies are no substitute for truth and fantasy is no substitute for reality. The erosion of net income will eventually matter, maybe not in six years but within six months.
 
Tyler Durden's picture

The Utter Craziness Of Monetarism Is On Full Display





And thus the utter craziness of monetarism is on full display, in that after arguing that declining oil prices are good for American consumers, they are also suggesting that monetary policy is “too tight”, and thus oil prices are contradictorily “too low.” That betrays the central aspect of this orthodox embracing of lower energy prices as nothing more than a shaky rationalization – they still are not comfortable with low prices but accept them lest anyone get worried about what they really suggest. Orthodox monetary theory is, when stripped of its academic trappings, dedicated to high oil prices and low wages.

 
Phoenix Capital Research's picture

The Fed and Interest Rates Are Just Political Theater





All of this is political theater. The big story for the markets is not interest rates. It is the US Dollar.

 
Tyler Durden's picture

China's Christmas Present To The World: Beijing Eases Again, Sets Non-Bank Deposit Reserve To Zero





In another Christmas surprise, China once again decided to adjust the cost of money, only this time instead of hiking, it eased, and in an effort to shore up the world's second-largest economy, China Business News reported that the PBOC will waive reserve requirements for non-bank deposits.  As the WSJ adds, at a meeting with big financial institutions on Wednesday, the People's Bank of China told participants that they will soon be able to add deposits from nonbank financial institutions to their calculations of their loan-to-deposit ratios, according to the executives. The move would add considerably to the banks' deposits and allow them to lend more. Chinese stocks, which had been pricing in further easing by the PBOC for the past 3 months, a period during which the Shanghai Composite soared over 50%, were delighted by the latest easing move and surged even more, surging higher by the most in the past three weeks.

 
Tyler Durden's picture

Calling 'BS' On Projections Of A Decade of $20 Oil





The ability of oil exporters to trigger a short-term collapse in price does not automatically translate into an ability to control the financial conflagration such a crash ignites.

 
Tyler Durden's picture

"The Fed Is Heading For Another Catastrophe... Central Banking Has Lost Its Way" Stephen Roach Warns





America’s Federal Reserve is headed down a familiar — and highly dangerous — path. Steeped in denial of its past mistakes, the Fed is pursuing the same incremental approach that helped set the stage for the financial crisis of 2008-2009. The consequences could be similarly catastrophic. The Fed’s incrementalism of 2004-2006 was a policy blunder of epic proportions. The Fed seems poised to make a similar — and possibly even more serious — misstep in the current environment. In these days of froth, the persistence of extraordinary policy accommodation in a financial system flooded with liquidity poses a great danger.

 
Tyler Durden's picture

Broken Energy Markets And The Downside Of Hubbert’s Peak





A form of society could undoubtedly exist powered by nuclear, wind and shale gas. But it would be a society supported by the state with far larger numbers working in the energy industries than now, producing lower surpluses, the energy production part perhaps running at a perennial loss. Those losses have to be covered by either higher price or via the taxation system. Either way, the brave new world that awaits us will be characterized as the time of less that will be in stark contrast to the time of plenty many of us enjoyed during the 20th Century.

 
Tyler Durden's picture

Saxo Bank CIO:"Writing Off Russia Would Be Unwise"





Russia’s years of neglecting to invest and reform pointed to an inevitable crisis. In 2014, that crisis came on two fronts, first in the confrontation over Ukraine from early this year and the resulting sanctions, and then followed by the incredible collapse in oil prices over the last few months. Russia and its citizens have been here before and know the drill. Everything looks terrible at the moment, but as the old saying goes, times of crisis are also times of maximum opportunity to chart a new course. So the positive spin from all of this is that we could see a new start from Russia in 2015. Writing off Russia would be unwise.
 
Tyler Durden's picture

Bloomberg's Commodity Index Drops To Lowest Since 2009: What Does It Mean?





Moments ago we learned that for all talk of a commodity "bottom", the "energetic" dead cat has resumed its inverse bounce. To wit:

  • BLOOMBERG COMMODITY INDEX EXTENDS DROP TO LOWEST SINCE 2009

So what does that mean? The answer: it all depends on whose narrative one chooses to believe and/or which narrative the US Ministry of truth is promoting at any given day in order to boost confidence.

 
Tyler Durden's picture

The Keynesian PhD Brigade Strikes Again: Sweden’s Riksbank Joins The ZIRP Mania





It is a tyranny of the PhDs. It is a group-think mania that has gone global. It’s also only a matter of time before the central bankers’ money printing spree takes down the very bubble-ridden financial system it has so recklessly spawned.

 
Tyler Durden's picture

2014 Year In Review (Part 2): Will 2015 Be The Year It All Comes Tumbling Down?





Despite the authorities' best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: "Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out."

"I’m tired of being outraged!"

 
Tyler Durden's picture

Saudi Arabia Refuses To Cut Oil Output Even If Non-OPEC Members Do





As even Reuters observes this morning when discussing the ongoing crude rout, "the market slide has triggered conspiracy theories, ranging from the Saudis seeking to curb the U.S. oil boom, to Riyadh looking to undermine Iran and Russia for their support of Syria." It appears said theories will continue raging for a long time, because as Saudi Arabia's oil minister who has been extensively in the news in the past couple (that means "two" as per Janet Yellen) of month explained, the biggest OPEC oil producer said on Sunday it would not cut output to prop up oil markets even if non-OPEC nations did so, in one of the toughest signals yet that the world's top petroleum exporter plans to ride out the market's biggest slump in years, and that the price of crude is not going up any time soon.

 
Tyler Durden's picture

2014 Year In Review (Part 1): The Final Throes Of A Geopolitical Game Of Tetris





Every year, David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. "I have not seen a year in which so many risks - some truly existential - piled up so quickly. Each risk has its own, often unknown, probability of morphing into a destructive force. It feels like we’re in the final throes of a geopolitical Game of Tetris as financial and political authorities race to place the pieces correctly. But the acceleration is palpable. The proximate trigger for pain and ultimately a collapse can be small, as anyone who’s ever stepped barefoot on a Lego knows..."

 
Tyler Durden's picture

The Biggest Economic Story Going Into 2015 Is Not Oil





Once again oil is not even the biggest story today. It’s plenty big enough by itself to bring down large swaths of the economy, but in the background there’s an even bigger tale a-waiting. Not entirely unconnected, but by no means the exact same story either. It’s like them tsunami waves as they come rolling in. It’s exactly like that. That is, in the wake of the oil tsunami, which is a long way away from having finished washing down our shores, there’s the demise of emerging markets. And we're not talking Putin, he’ll be fine, as he showed again yesterday in his big press-op. It’s the other, smaller, emerging countries that will blow up in spectacular fashion, and then spread their mayhem around. And make no mistake: to be a contender for bigger story than oil going into 2015, you have to be major league large. This one is.

 
Tyler Durden's picture

The Burning Questions For 2015





"Most investors go about their job trying to identify ‘winners’. But more often than not, investing is about avoiding losers. Like successful gamblers at the racing track, an investor’s starting point should be to eliminate the assets that do not stand a chance, and then spread the rest of one’s capital amongst the remainder." So as the year draws to a close, it may be helpful if we recap the main questions confronting investors and the themes we strongly believe in, region by region.

 
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