To keep the credit induced boom going,policy makers have convinced themselves that more credit and more money, provided at ever lower interest rates, are required. Why then, as The FOMC Minutes just showed, do the decision makers at the Fed want to increase rates? If Fed members follow up their words with deeds, they might soon learn that the ghosts they have been calling will indeed appear — and possibly won’t go away. The sooner the artificial boom comes to an end, the sooner the recession-depression sets in, which is the inevitable process of adjusting the economy and allowing an economically sound recovery to begin.
It may not rely on such tech bubble (ver 1.0 and 2.0) buzzwords as eyeballs, clicks, "story", "sharing", "hyperxxxx, "non-GAAP" and so on, in fact with 2.2 million worldwide employees Wal-Mart is as old-school as it gets, which is why the fact that what was once the world's most valuable retailer (until Amazon dethroned it a month ago) just reported not only a miss, on tumbling operating earnings, but slashed its guidance by 7%, should be very troubling to anyone who still looks as such trivial things as "fundamentals" and how these reflect the even more trivial "economy."
The purpose of austerity is to create insecurity and instill fear in the general population in order to protect the finance and banking sector from popular rage against the crimes the participants of this sector have committed against ordinary people. This rage ought to have given rise a long time ago to legal actions and desperately needed fundamental reforms to take away from bankers the right to create money, a right which they have abused at tremendous cost to ordinary people. Instead of collective reforms, what we are being subjected to is a policy of deliberately spreading insecurity together with the scapegoating of vulnerable people.
Here is another, even more disturbing way of showing the "New Economy" - since December 2014, the US has lost 1.4 million manufacturing workers. These have been replaced almost one to one, with new waiters and bartenders. Win, win for everyone, especially the welfare state and of course, China.
What if the assumptions about a U.S. economic recovery and Fed rate hikes were wrong? Could observers be mistaken now about the trajectory of the Dollar vs. the Euro as they were back in 2000? Confidence is the only thing that really undergirds modern fiat currencies. But confidence can be very ephemeral...disappearing as quickly as it arrives. The U.S. Dollar benefits from confidence that the Euro currency may just be unworkable, that the U.S. economy will continue to improve, and that the Fed will raise rates throughout the remainder of 2015 and into 2016. If these expectations are unfulfilled, there could be a Euro reversal.
A few quick observations: the top 10 highest valued companies have a combined private valuation of $156 billion, on just about $4 billion in revenues and employ a whopping 19.5 thousand people. In other words, the universe's combined historical Price/Sales ratio is 39x and each employee is worth about $8,000,000.
The purpose of this article is to outline, with facts, large global structural issues that everyone, bulls and bears alike, should be fully aware of. This article will focus on much larger structural issues that have been building for years and decades. And no this article is not so much about central banks, debt issues, Greece, China, deficits, etc. While all these are important as part of the overall picture, they are mere current symptoms of a much larger issue that is at the core of all that is already in play and will only deepen in our societies in the decades to come.
"Giddy up! The Four Horsemen of Tech", July 17, 2015 - "Google, Apple, Amazon, and Facebook -- helped push the Nasdaq to an all-time high Friday morning."
"Cramer's Four Horsemen Of Tech" - September 25, 2007 "Apple, Research in Motion, Google and Amazon.com are up 31% as a group since he recommended them back on June 6. Despite the market being down today, each of these four stocks hit new highs."
"The Four Horsemen Of The New Economy" - October 2, 2000 "More than any other collection of companies, Oracle, Sun Microsystems, EMC, and Cisco Systems represent the building blocks of Net business."
We love reading quotes from Hussman in 2000 and 2007. The air is getting pretty thin up here. A stock market driven by Google, Apple, Netflix and a few other tech darlings with no earnings does not make a market. Time is running out for the bulls. The same morons on CNBC ridiculed and scorned his facts then and they scorn and ridicule him now. Do we trust Jim Cramer and Steve Liesman or John Hussman? Guess.
Having explained His vision for a new world order, The Holy See unleashed some scathing remarks towards the bankers of the world in his 183-page encyclical. Appearing to address the bank that does God's work, God's man on earth stated, "Saving banks at any cost, making the public pay the price, foregoing a firm commitment to reviewing and reforming the entire system, only reaffirms the absolute power of a financial system, a power which has no future and will only give rise to new crises." Furthermore, His Holiness called out the financial sector for having outsized influence over the political process and endorsed limiting its reach.
Having recently cut its estimate of US trend productivity growth to 1.5%, in a shocking move earlier today, Goldman admitted US trend growth is far less than previously speculated and lowered its long-term potential GDP. The bank says: "after adjusting for a drag from government sector productivity and incorporating an updated assessment of trend labor force growth, we now see long-run potential GDP growth at 1¾%, half a percentage point below our prior estimate." This is a huge deal as Goldman just recalibrated every single economic (i.e., inflation, employment) and financial (i.e., bond rates, leverage) equation by more than 20%, not to mention the amount of implied residual slack in the economy. In short, an absolutely massive amount!
Puerto Rico is racing the clock ahead of a July 1 deadline to pass a fiscal budget for 2016 and scrape together $360 million due to creditors. Without a budget, the commonwealth will face a partial government shutdown and may be unable to issue $2.9 billion in oil-tax bonds needed to pay The Government Development Bank.
In the coming months, however many hours Clinton spends introducing herself to voters in small-town America, she will spend hundreds more raising money in four-star hotels and multimillion-dollar homes around the nation. The question is: "Can Clinton claim to stand for 'everyday Americans,' while hauling in huge sums of cash from the very wealthiest of us?" This much cannot be disputed: Clinton's connections to the financiers and bankers of this country - and this country's campaigns - run deep. As Nomi Prins questions, who counts more to such a candidate, the person you met over that chicken burrito bowl or the Citigroup partner you met over crudités and caviar?
The week that passed has been nothing short of a roller coaster ride for many nervous investors. And for some: a realization that the once hyped, hawked, and levered Billion dollar babies can indeed “come off the rails.” Turning the once joyride into something more in common with a free fall into the abyss. However, you’re told not too worry: For if you loved the ride when the prices were higher, then surely you should be ecstatic to “ride again” since the new ticket prices are clearly “on sale!”
Conformity and being able to navigate stifling bureaucracies no longer creates value or helps employers solve real-world problems. This is why college graduates can send out hundreds of resumes and not even receive a single reply, much less an interview or job offer. An entire new feedback loop of accreditation is needed...