The insolvent remain insolvent, the money still not money, and the recovery something else entirely. Central banks possess no recovery magic; they can’t even deliver their own version of one.
Japan is at the forefront for Keynesian monetary madness. Now even ex-IMF officials are admitting it has entered the End Game
What in the World is Going on with Banks this Week? Emergency meetings, banker summits, crashing European banks.......Submitted by Bruno de Landevoisin on 04/12/2016 17:29 -0400
In the first half of 2013 earnings per share (EPS – as reported) for the S&P 500 (as provided by Standard & Poor’s) averaged $88.50 per share, almost $2 higher than EPS as of December 31 2015. The closing price of the S&P 500 on June 30, 2013 was $1,618. Today the index stands at $2,066, a 28% premium. To put it bluntly, investors today are paying an extra $450 per share for less.
SCHAEUBLE SAYS ECB CAUSING 'EXTRAORDINARY PROBLEMS': REUTERS
SCHAEUBLE: ECB POLICY DOESN'T HELP TRUST IN EUROPE INTEGRATION
SCHAEUBLE: FISCAL, MONETARY POLICY LARGELY EXHAUSTED GLOBALLY
Moments ago the IMF did what it does better than anyone (with the exception of the Fed): it once again admitted its forecast of world growth had been too optimistic, and as a result in its just released quarterly World Economic Outlook report, it cut its forecast for 2016 global GDP growth from 3.4% to 3.2%, and from 3.6% to 3.5% for 2017. Indicatively, back in July 2014 the IMF was forecasting 4.0% GDP growth in 2016. It is now 20% lower.
Japan is heading for a full-blown solvency crisis as the country runs out of local investors and may ultimately be forced to inflate away its debt in a desperate end-game, one of the world’s most influential economists has warned. "One day the BoJ may well get a call from the finance ministry saying please think about us – it is a life or death question - and keep rates at zero for a bit longer."
With The Atlanta Fed's slashing its Q1 GDP growth expectations to just 0.1%, consensus estimates for 2016 growth have collapsed. However, none of this should surprise anyone as this is the sixth year in a row that over-optimistic growth hopes devolve into hype for more stimulus and a hockey-stick just around the corner. While expectations have not improved since 2010, at least one these dreadful soothsayers is defending this year's drop in the same old manner - by promising that H2 will be better, for these 4 reasons...
Should US monetary policy not be on the path to normalization, a fundamental change in the benefit of gold ownership is taking place, and this increased investment demand should lead to higher gold prices. Gold investment appears to be moving towards stronger fundamentals than we have seen over the past few years.
"Money-financed fiscal programs (MFFPs), known colloquially as helicopter drops, are very unlikely to be needed in the United States in the foreseeable future. They also present a number of practical challenges of implementation, including integrating them into operational monetary frameworks and assuring appropriate governance and coordination between the legislature and the central bank. However, under certain extreme circumstances—sharply deficient aggregate demand, exhausted monetary policy, and unwillingness of the legislature to use debt-financed fiscal policies—such programs may be the best available alternative."
The problem with forward earnings estimates is that they consistently overestimate reality by roughly 33% historically. The illusion of“permanent liquidity,” and the belief of sustained economic growth, despite slowing in China, Japan, and the Eurozone, has emboldened analysts to continue push estimates of corporate profit growth higher. Even now, as the earnings recession deepens, hopes of a sharp rebound in profitability remains ebullient despite the lack of any signs of economic re-acceleration.
ECB Scrambles To Calm A Furious Germany: "Helicopter Money Was The Straw That Broke The Camel's Back"Submitted by Tyler Durden on 04/11/2016 11:27 -0400
Just hours after Spiegel penned its infamous "Germany is taking aim at the ECB" article, Schauble went on the record to deny that the Geran finmin would consider taking legal action if the European Central Bank resorts to "helicopter money" but the damage was already done. As Reuters follows up today, "almost a month after stoking a divisive debate about how far it should go in pumping money into the flagging euro zone economy, the European Central Bank is trying to soothe relations with Germany after unusually strong criticism from Berlin."
While the market is still enjoying the post-NFP weekly data lull, economic data starts to pick up again in the coming days, alongside the start of the reporting season. Below are this week's key events.
... consider mom and pop and other people who read Barron’s. They are saving for retirement and to put their kids through college. They might have depended on a historic 8%-like return from stocks and bonds. Well, sorry. When interest rates get to zero—and that isn’t the endpoint; they could go negative—savers are destroyed. And savers are the bedrock of capitalism. Savers allow investment, and investment produces growth.
"We continue to live in a low default world for now though. Even though defaults picked up in 2015, B/BB default rates were still comfortably below their long-term average which they have been for well over a decade now with 2009 being the only exception. Indeed last year’s default rate for global Bs (up from 0.9% to 2.7%) was still lower than all of the first two decades of the modern era of leveraged finance up to 2003. So in spite of all the challenges we face this era has been characterized by astonishingly low default rates. There are clear signs the cycle is turning though, especially in the US."