Nominal GDP

On The Hubris Of The Completely Clueless

Any honest person working with such models know their gross limitations and how awful their track-records are. Still, these are the tools guiding the world’s central planners when they micromanage economies, be it fiscal or monetary expansion. They are obviously completely clueless, but still act with an extravagant level of hubris simply because they believe the scripture and their models.

Earnings Implosion Looms Amid The Illusion Of "Permanent Liquidity"

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.

Nomura's Bob "The Bear" Janjuah: "The Question Is What Would Be Necessary For The Fed To Do QE Or NIRP"

"My view is still that the Fed does not actually do anything more than jaw-bone until or unless the S&P500 cash index is into the 1500s and the outlook for growth, employment and inflation get significantly worse – perhaps with the unemployment rate inching higher not lower.... I am also even more convinced now that we are about 10 months through a multi-year bear market that likely won’t bottom until late 2017 or early 2018. This will be a stair-step decline with all the strength to the downside punctuated by occasional (very) violent bear market counter-trend rallies driven by short covering, hope and residual belief in policymakers"

S&P Revises China's Credit Outlook To Negative On Growth, Debt Concerns - Full Text

Ripley's believe it or not world continues. Earlier today, Hong Kong's Hang Seng market entered a bull market, rising 20% from its February lows, just as Hong Kong retail sales plunged 20.6%, the bigest drop since 1999 and then moments ago, in a move that pushed the Chinese Yuan stronger at least initially, S&P revised its Chinese outlook to negative, saying the economic rebalancing is likely to proceed more slowly than had expected over next 5 years and warning about China's debt load.

Gross To Central Banks: "Get Global Growth Moving Now, Or Else"

"The reality is this. Central bank polices consisting of QE’s and negative/artificially low interest rates must successfully reflate global economies or else. They are running out of time. Or else what? Or else markets and the capitalistic business models based upon them and priced for them will begin to go south. Capital gains and the expectations for future gains will become Giant Pandas – very rare and sort of inefficient at reproduction."

The World Has 6 Options To Avoid Japan's Fate, And According To HSBC, They Are All Very Depressing

"The escape options are a mixture of the ineffectual, the limited, the risky, the foolhardy or the excessively slow. As Japan’s recent experiments have demonstrated, upping the monetary dosage alone is not enough to cure the affliction. Indeed, to the extent that monetary stimulus only encourages a further wave of risk-taking within financial markets – often outside of the mainstream banking system - it may only perpetuate unstable deflationary stagnation."

"The Bounce Has Run Its Course" Bob 'The Bear' Janjuah Warns S&P Heading To 1700s

It is important to remember that in bear markets the strength is to the downside, the violence is to the upside, with counter-trend rallies in bear markets often being the most painful. Markets simply do not go down (or up) in straight lines. The over-reach of central bankers and their failed policies is not news to me. What is news to us, especially after the BOJ's easing in January, is that markets are now either at or very close to losing all confidence in the post-GFC policy response crafted by the Fed/ECB/BOJ et al much earlier in 2016 than even we had expected.

"Everything's Interconnected"

Everything happening today is in some ways interconnected: popularity of ‘non-establishment’ political candidates; ineffectiveness of central bank policy in lifting inflation; economic pessimism; weak capital spending (from handcuffed capitalism); and angst due to perceptions of inequality. Let us explain...

This Is The Last Stage Before Recession

The probability of recession is increasing. Contrary to popular belief, the beginning of a recession is not deflationary but the exact opposite. We expect a recession by the end of 2016, and if that projection turns out to be wrong due to a massive turnaround in Fed policy, the cataclysmic event will only be postponed till 2017.

Gold Money's picture

In his annual newsletter to shareholders, Buffett makes the argument that $56,000 today is six times better (even after his adjustment for inflation) than the $858 of GDP per Capita each US Citizen earned in 1929 but forgets to mention that $858 in 1929 was equivalent to 41.5 Troy Ounces of Gold in 1929. When measuring on an apple to apples comparison, there has been little to no gain in GDP per capita over the last 86 years in the United States. We show you the math.