America’s elite – that collection of puffed up mediocrities who until recently held the undisputed command of the heights of our politics and culture – is in crisis. Its unbroken track record of failure has finally stirred the rest of America from its coma.
"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."
How can this be happening? We were supposed to be doomed! If this surfeit of good news on the climate continues, it will threaten to derail a major gravy train. In short, the big pause is continuing...
"I sometimes feel like ‘The Grim Reaper’, scouring the research savannah in a ghoulish quest to harvest bad news with a forceful sweep of my scythe. Imagine then my perverse delight when our credit team produced what is one of the scariest charts I have seen for a very long time." = Albert Edwards
"It might work for a while. But the falcon of asset prices becomes deaf to the falconer of the real economy. Then, in a kind of financial never-never land, he gets lost completely and flies into a tree. Asset prices fall to the ground. Investors panic. Lenders call their loans. Art investors rush to auction off their tableaux. Lines form at ATMs."
"Has the bull market in government bonds finally ended... A change in the wind is being felt as governments listen to the central banks’ recent call for fiscal, rather than monetary policy, to do the heavy policy lifting from hereon in. Is the long bull market in bonds now over."
the German Economy Ministry wants to protect high tech companies in Germany from unwanted takeovers, especially from state-owned and partly state-owned companies in non-European countries. The emphasis is, of course, on Chinese acquisitions of European firms using "hot" money.
"the fact that negative rates would be temporary and deployed only during severely adverse economic conditions would be an advantage. Like quantitative easing, which was also unpopular in many quarters, a period of negative rates would probably be tolerated by politicians if properly motivated and explained" - Ben Bernanke
"One thing we learnt from Japan is that the equity secular valuation bear market takes many economic cycles to unfold and ends when equities are ?dirt cheap?. US equities did not get dirt cheap in March 2009 at a Shiller PE of 14x - they just got cheap. To be dirt cheap they needed to half again from the 666 level they reached."
"I believe times are about to get quite rough economically and politically. But, at the same time, I’m very optimistic about what’s happening in science and technology. So let me hazard some predictions..."
"There is an argument that a Brexit might look similar to the aftermath of sterling?s ignominious exit from the ERM on ?Black Wednesday? 16 September 1992. In a current environment where central banks and governments have failed to generate a strong enough economic recovery to normalise interest rates amid persistent deflationary pressures, one would have thought a substantial decline in one?s currency would be welcomed ?- for that is one way to inject a modicum of inflation back into the economic system."
"Our attention has been diverted. China has embarked on a stealth devaluation of the renminbi. Its new trade-weighted currency basket has fallen 10% since just before its initial August 2015 devaluation (white line in chart below) and it has continued to decline since January even as the Rmb/dollar has stabilised."
“Everyone has a plan until they are punched in the face.” This famous Mike Tyson quote spells out the outlook for investors in the years ahead according to SocGen's Albert Edwards, who warns that investors will not only be punched in the face, they will also get knocked to the floor and kicked repeatedly in the ribs.
China was, in essence, the right shoulder to the greatest head and shoulder pattern in the history of mankind. Central banks and federal governments will do everything in their power to maintain the present system. They will attempt anything and likely everything to maintain what ultimately cannot be maintained. Unfortunately, no one knows how much is too much and the economic, financial, and societal ramifications. Invest accordingly?!?