Global Economy

Tyler Durden's picture

Why Stock Market Bulls Should Hope Interest Rates Don't Rise





"Everybody knows interest rates are going to rise." Whether you agree with this premise, or not, is largely irrelevant to this discussion. The current "bullish" mantra is the "great bond bull market is dead, long live the stock market bull." However, is that really the case? When the bond bubble ends this means that bonds will begin to decline, potentially rapidly, in price driving interest rates higher. This is the worst thing that could possible happen.

 
Tyler Durden's picture

India Central Bank Chief Warns QE "Has Been More Cause Than Cure" For Economic Weakness





Speaking at The Brooking Institution on April 12, Reserve Bank Of India Governor Raghuram Rajan  - no stranger to controversial truthiness (as we have noted here and here) - made clear his views on the rest of the world's central bankers as he concluded, "the first step to prescribing the right medicine is to recognize the cause of the illness. And, when it comes to what is ailing the global economy, extreme monetary easing has been more cause than cure. The sooner we recognize that, the stronger and more sustainable the global economic recovery will be."

 
Tyler Durden's picture

Is A Crash Inevitable? The Spiral Vortex Of Debt And Corruption





What you have to realize is that this trend is inevitable... we are hopelessly lost in a declining spiral vortex of debt and corruption that will only change with war and civil unrest.

 
Tyler Durden's picture

Hubris. Greed. Distraction. Denial.





The wonder is that more Americans are not ticked off about the state of our country than whatever is happening ten thousand miles away. The disintegration of Ukraine would be best understood by Americans as a mirror of ourselves and our sclerotic republic, poised to sink into poverty and disorder. Everything we do and say rings hollow now. What used to be called The Establishment has run out of ways to even pretend to save itself. We have no idea what’s next, but it’s not going to be more of what’s been.

 
Tyler Durden's picture

The Great Stock Buyback Craze Is Finally Ending





As we reported last night, whether as a result of Snowden revelations and NSA blowback by BRIC nations, or simply because the global economy is contracting far faster than rigged and manipulated markets worldwide will admit, IBM's Q1 revenues not only missed consensus earnings, but dropped to their lowest level since 2009. And yet, IBM stock is just shy off its all time highs and earnings per share have been flat if not rising during this period, leading even such acclaimed investors who never invest in tech companies as Warren Buffett to give IBM the seal of approval. How is that possible? Simple: all that investment grade companies like IBM have done in the New Normal in order to preserve the illusion of growth, is to use cash from operations, or incremental zero-cost leverage, to fund stock buybacks. In essence a balance sheet for income statement tradeoff. However, that "great stock buyback gimmick" as we call it, is finally coming to an end.

 
Tyler Durden's picture

BRICS Consider Creating IMF-Alternative As US Loses Credibility





The BRICS countries (Brazil, Russia, India, China and South Africa) have made significant progress in setting up structures that would serve as an alternative to the IMF and the World Bank (which are dominated by the U.S. and the EU), according to RBTH. As WSJ reports, the U.S. would lose its veto power on the International Monetary Fund's executive board under a plan being considered by some emerging economies. The countries are fed up with the United States' failure to ratify a four-year-old deal to restructure the emergency lender. Yet more loss of credibility on the global stage and, as Brazil's FinMin Mantega sums up, "the IMF cannot remain paralyzed and postpone its commitments to reform."

 
Tyler Durden's picture

All This And World War, Too?





Ukraine is quickly turning into a Vietnam moment for the US political scene. When will parties in the USA (including Obama camp “progressives”) stop cheerleading for a showdown over this hapless doormat of a faraway nation whose destiny is not entwined with the people of Ohio, Nebraska, Rhode Island, or any of the other fifty states? We have enough to do in our own country to adjust to the new realities of the unraveling turbo-industrial global economy — and, by the way, we are not doing a damn thing to address any of it. Our domestic political conversation at all levels is juvenile and idiotic.

 
Tyler Durden's picture

Mohamed El-Erian Quits Pimco, Becomes A Blogger





We realize the future for blogging was bright, but this bright? Moments ago, Bloomberg View, Bloomberg's in house blogging operation, announced that El-Erian had joined it as a columnist. And just like that Mohamed has his own unedited venue in which to spill all the dirt on his former employer.

 
GoldCore's picture

Prepare For Dollar Collapse With 33% Allocation To Gold - Rickards





Rickards does not expressly say one should put 33% of one’s wealth in gold but suggests that an allocation of between 10% and 33% would be prudent. In this regard, he echos Dr Marc Faber who suggested a 25% allocation to precious metals last week.

 
Tyler Durden's picture

David Stockman: The Born Again Jobs Scam, Part 2: The Fed’s Labor Market Delusion





The Fed’s transmission mechanism to the household sector is blocked. The business credit expansion channel to higher GDP is blocked, too. The flood of demand by which the Fed endeavors to “pull” idle and underemployed workers back into production cannot be activated if the US economy has reached a condition of peak debt, as we strongly believe to be the case. Indeed, when the credit expansion channel is broken and done, all the Fed’s liquidity “accommodation” flows into the Wall Street finance channel where it pulls up the price of existing financial assets, not the employment rate of idle labor. This much is obvious, yet Yellen and her monetary politburo keep on attempting to flood the nation’s macroeconomic bathtub with more “demand”. Worse still, they fail to note that even if they could induce business and households to bury themselves deeper in debt that it wouldn’t necessarily have a salutary impact on the “labor market”— the ostensible target of their strenuous ministrations.

 
GoldCore's picture

Bail-In Regime Facing Increasing Opposition In EU





The EU agreement on a common rulebook for handling bank failures, including bail-ins, is in danger of unravelling over the fine print restricting when a state can intervene to rescue a struggling bank. It is important to realise that not just the EU, but also the UK, the U.S., Canada, Australia, New Zealand and most G20 nations have plans for depositor bail-ins ...

 
Tyler Durden's picture

Banks Win Again As Proposed "Toughened" Basel Derivatives Rule "Seems To Have Evaporated"





So from MF Global's "vaporized" commingled client assets to Basel's "evaporated" toughened derivatives rules, the banks are indeed "very happy." And now back to perpetuation the illusion that the system is stable.

 
GoldCore's picture

UK Turned Into “Nation Of Savers” … “Instantly” After "Radical" Accounting Overhaul





Accounting tricks and manipulation of economic data is taking place globally and will contribute to people being misled regarding the true state of national economies and the global economy. The false sense of security seen before the global financial crisis has returned ...  it can only end in tears ...

 
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