Gross Domestic Product

2.607 Days Later, The "Most Hated Bull Market Ever" Is Now The Second Longest In History

It's official: as of today the bull market that has been mocked as fake, doomed and history’s most-hated just earned a new title: the second-longest ever. And it only took $14 trillion in central bank liquidity, a global, coordinated central bank "put", central banks purchases of Treasuries, MBS, ETFs and corporate bonds,  and nearly 700 rate cuts in the past 7 years to achieve it.

The $2 Trillion Gamble That Saudi Arabia Cannot Win

The Vision for 2030 is mostly smoke and mirrors. Saudi Arabia probably cannot replace the money it will lose if oil goes out of style and so is doomed to downward mobility and very possibly significant instability. It has been a great party since the 1940s; it is going to be a hell of a hangover.

Where It All Went Wrong

The recovery was always hollow or shallow, for a short time in 2014 it just came in a more appealing package; so appealing, the mainstream never looked beyond that cover. With 2015 a wreck and 2016 looking at best more of the same, they just keep right on reciting all the past cliches because to admit the actual circumstances is just too traumatic

The Real Reason Saudi Arabia Killed Doha

Saudi Arabia single-handedly scuttled the Doha meeting, knowing all along that Iran would not participate, with a valid reason. The Russians and others agreed to proceed without Iran, planning to include them at a later date. So if everything was known beforehand, why did the Saudi’s pour cold water on the aspirations of the remaining members, risking its alienation from Russia and the OPEC community? Was it simply Saudi enmity toward Iran? Not exactly. Upon closer scrutiny, we can find the Saudi masterstroke behind Doha.

Pimco Economist Has A Stunning Proposal To Save The Economy: The Fed Should Buy Gold

"In the context of today’s paralyzed political-fiscal landscape how silly is it to suggest the Fed purchase a significantly large quantity of gold bullion at a substantially greater price than today’s free-market level, perhaps $5,000 an ounce?  Admittedly, this suggestion is almost too outrageous to post under the PIMCO logo, but NIRP surely would have elicited a similar reaction a decade ago. But upon reflection, it could be an elegant solution since it flips the boxes on a foreign currency “prisoner’s dilemma”. Most critically, a massive gold purchase has the potential to significantly boost inflationary expectations, both domestic and foreign."

"Last Bubble Standing" Bursts - China Junk Bond Risk Soars

In January we pointed out "the last bubble standing," as China's crashing equity market had spurred massive inflows - directed by a "well-meaning" central-planning committee's propaganda - sparking a massive bubble in Chinese corporate bond markets (in an effort to enable desperately weak balance-sheet firms to roll/refi their debt and keep the zombies alive). That has now ended as China's junk bond risk has soared to 5-month highs with its worst selloff since 2014. As HFT warns, "we should avoid junk bonds."

Futures Fade As Chinese "Good News Is Bad News" For Fed, Oil Drops As Doha Concerns Emerge

Good news is still bad news after all. After last night's China 6.7% GDP print which while the lowest since Q1 2009, was in line with expectations, coupled with beats in IP, Fixed Asset Investment and Retail Sales (on the back of $1 trillion in total financing in Q1)  the sentiment this morning is that China has turned the corner (if only for the time being). And that's the problem, because while China was a good excuse for the Fed to interrupt its rate hike cycle as the biggest "global" threat, that is no longer the case if China has indeed resumed growing. As such Yellen no longer has a ready excuse to delay. This is precisely why futures are lower as of this moment, because suddenly the "scapegoat" narrative has evaporated.

'Economic Models' Forecast GOP White House (With Or Without Trump)

"The model doesn't know or care if there are two or 10 candidates... It knows the economics and whether marginal swing voters will keep the incumbent party in or not...the logic that says that these models should have worked over the past few decades also says that they should work in this election cycle, too."

Trump Reveals How Mexico Will Pay For "The Wall"

In what he assures will be "an easy decision," Donald Trump has released details of his plan to "compel Mexico to pay for the wall." In a 600 word statement, Trump proposes, in a potentially devastating move for Mexico’s economy, to block billions of dollars in payments immigrants send back home until the nation made "a one-time payment of $5-10 billion" to the U.S.