• CalibratedConfidence
    08/30/2015 - 08:34
    Luckily we didn't hear anything more about Vomiting Camel formations but there was certainly an ample amount of "it's priced in" blaring in the background.

McKinsey

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Lagarde: "China's Slowdown Was Predictable, Predicted"... Yes, By Everyone Except The IMF





"The [Chinese] slowdown was predictable, predicted, unavoidable," Lagarde was quoted as saying." Well, yes, it was... by everyone but the IMF. Here is the history of the IMF's Chinese GDP growth forecasts taken straight from its World Economic Outlook quarterly pieces. The graph needs no explanation.

 
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"Debt Is A Fickle Witch"





Debt is a fickle witch. When left to its own devices, which it has been for nearly seven years with interest rates at the zero bound, it tends to get into trouble. Unchecked credit initially seeps, and eventually finds itself fracked, into the dark, dank nooks and crannies of the fixed income markets whose infrastructures and borrowers are ill-suited to handle the capacity. Consider the two flashiest badges of wealth in America - cars and homes...

 
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"You're Gonna Need a Bigger Boat" - Does Size Matter When It Comes To The Debt Markets





The reality might just be that the collective "we," and quite possibly sooner than we think, really will need a bigger boat. That is, as it pertains to the global debt markets, which have swollen past the $200 trillion mark this year rendering the great white featured in Jaws which can be equated with past debt markets as defenseless and small as a small, striped Nemo by comparison. The question for the ages will be whether size really does matter when it comes to the debt markets...

 
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"This Is The Largest Financial Departure From Reality In Human History"





We have lived through a credit hyper-expansion for the record books, with an unprecedented generation of excess claims to underlying real wealth. In doing so we have created the largest financial departure from reality in human history. Bubbles are not new – humanity has experienced them periodically going all the way back to antiquity – but the novel aspect of this one, apart from its scale, is its occurrence at a point when we have reached or are reaching so many limits on a global scale. The retrenchment we are about to experience as this bubble bursts is also set to be unprecedented, given that the scale of a bust is predictably proportionate to the scale of the excesses during the boom that precedes it. Deflation and depression are mutually reinforcing, meaning the downward spiral will continue for many years. China is the biggest domino about to fall, and from a great height as well, threatening to flatten everything in its path on the way down. This is the beginning of a New World Disorder…

 
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Introducing "Trickle-Out Oligarch Economics" - How Over $21 Trillion In Wealth Fled Offshore





The world’s super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy. What we need is fundamental systemic change. This means truly restructuring the entire financial system, from Central Bank power, to Wall Street funding both political parties, to lengthy jail sentences for financial criminals. If we do that, oligarchs won’t be able to parasitically amass billions so easily in the first place.

 
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The Casino-fication Of Markets Is Pervasive & Permanent





Here we now call market deflation by the sobriquet “volatility”, as in “major market indices suffered from volatility today, down almost one-half of one percent”, where a down day is treated as something akin to the common cold, a temporary illness with symptoms that we can shrug off with an aspirin or two. You can’t be in favor of volatility, surely. It’s a bad thing, almost on a par with littering. No, we want good things and good words, like “wealth effect” and “accommodation” and “stability” and “price appreciation”. As President Snow says in reference to The Hunger Games version of a political utility, “may the odds be always in your favor”. Who doesn’t want that?

 
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Lies, Damned Lies, & Inflation Statistics





You know your true level of inflation. You know it’s not 0.1%. You know it’s somewhere between 4% and 10%. You know your government is lying to you. You know the captured corporate media perpetuates the lies. You know those in control of the government must lie to keep their Ponzi scheme going. You know they are just following the Edward Bernays playbook: “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society." They want you to believe it’s for your own good. Do you think it’s for your own good?

 
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Portugal’s Debts Are (Also) Unsustainable





Everyone seems to be focusing on Greece these days – a country so indebted that it needs even more loans to repay just a fraction of its gigantic credits. Clearly this is unsustainable and something has to give. Even the IMF agrees. But what about the other Southern European countries? Actually, Portugal’s financial situation is looking particularly shaky, and any hiccups could have serious cross-border repercussions from Madrid all the way to Berlin.

 
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'Black Swan' Taleb Warns “Calm Before The Storm”





Western countries are increasingly displaying symptoms of instability as described by Nassim Taleb, the author of the The Black Swan, ever since the publication of an essay written with Gregory Treverton entitled “The Calm Before the Storm.” The wider public and the press seem unjustifiably complacent at this time. It seems likely that the seemingly unending “recovery” is simply the calm before the storm.

 
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China's Market Isn't Fixed And Why The Global Bubble Will Keep Imploding





The Chinese economy is in an obvious deepening swoon and the median company on the Shanghai exchange had a PE ratio of 60X before the recent break. But no matter. Not only does everything financial race the skyscrapers to the sky in the land of red capitalism, but valuation upside is apparently whatever the comrades in Beijing want it to be. Says Goldman’s chief stock tout for China,“It’s not in a bubble yet.”. Why? Because “China’s government has a lot of tools to support the market.”

 
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"Reduce Risk, Boost Cash, Go Underweight Stocks" SocGen Warns





After Bridgewater, and Goldman Sachs, today it is SocGen's turn, which overnight advised clients that with "US set to unwind QE", now is the time to "increase cash" and "reduce risk." This is how SocGen advises its clients to be positioned ahead of the end of QE...

 
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"Literally, Your ATM Won’t Work…"





Our current money system began in 1971. It survived consumer price inflation of almost 14% a year in 1980. But Paul Volcker was already on the job, raising interest rates to bring inflation under control. And it survived the “credit crunch” of 2008-09. Ben Bernanke dropped the price of credit to almost zero, by slashing short-term interest rates and buying trillions of dollars of government bonds. But the next crisis could be very different…

 
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Who's On The Other Side Of The Trade?





The system is corrupt… and dangerously dysfunctional. But why does no one say so? Opinion makers such as Paul Krugman and Larry Summers misunderstand intentionally. But who speaks for the next three decades?  Everyone wants more credit, more inflation, more bubbles, more subsidies, and more special privileges. Who’s on the other side of the trade?

 
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Why China Is So Desperate To Blow The Most Epic Stock Bubble





The Shanghai Composite is on the verge of 5,000 and has more than doubled in the past year but this may just be the beginning. The reason: if the Chinese stock bubble bursts, that will be the beginning of the end of the greatest con game in history.

 
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Global Debt Now $200 Trillion!





With a global population of 7.3 billion this works out out at over $27,200 of debt for every man, woman and child alive today. 

 
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