In simple terms, Greece from 2003-2010 was an economic boom driven by incomes, which were in turn driven by cheap debt NOT real organic growth. Thus, the collapse in GDP was yet another case of “price discovery” in which asset prices fall to economic realities…
In a murky world of market fantasy, our first guideposts are the fundamentals themselves. Supply and demand can be misrepresented for a time through manipulated statistics, but the tangible effects of decline cannot be. Our secondary guideposts are the paths that internationalists and central banks bulldoze through the fiscal forest. To anyone with any sense, the endgame is clear: Total centralization is the goal, and economic fear is the tool they hope to use to get there. We have written on numerous solutions to this threat in past articles; but the first and most important action is for each of us to acknowledge, wholeheartedly, that the system we know is ending. It is over. What replaces that system will either be up to us or up to them. Only by admitting that there is an end to the fantasy, a painful end, will we then be able to help determine our future reality.
"I’ve just slogged through all ninety-two pages of Donald Trump’s financial disclosure submission to the Federal Election Commission, and I can’t make heads or tails of it. I cannot tell how much Trump is worth, if anything. His empire, if he has one, is as mysterious as his haircut, and as impervious as his skyscraper in Chicago - a gigantic phallic mirror named after himself."
Deflation is a bitch. The only way the rich can keep getting richer is if the rest of us keep getting poorer. Economic growth is a thing of the past. Deleveraging has started for real. Huge amounts of zombified ‘money’ are disappearing as we speak. That leaves the world with a lot less wealth. And still the rich seek to get richer, and they are in charge. The math is simple... but there is a point when the can gets so big and heavy, no-one can kick it down any road anymore.
The chart below shows why a Fed rate hike hike in the coming months virtually assures a recession: in July, wages for non-supervisory workers failed to rise once again, increasing by a paltry 1.8% Y/Y after peaking at 2.0% in late 2014. Worse, the current trend suggest the record lows of 1.3% will be revisited in the coming months.
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.
One year ago, as part of its always entertaining long-run forecasting exercise, Bank of America predicted that GDP growth in 2015 and 2016 would be 3.3% and 3.4% respectively. Fast forward one year, when in its updated "long-run" forecast, Bank of America's crack economist Ethan Harris admits he was off by "only" 30% in his prediction of next year's GDP, and instead of 3.3%, he now "forecasts" 2015 GDP to be... 2.3%. But the punchline is this: "if history is our guide, at some point in the next decade the US will experience a recession, but predicting a recession far in advance is almost impossible. We plan to update this table on a regular basis."
Six years ago, hardly anybody outside financial circles had any idea what Quantitative Easing was – hell, many within financial circles had no idea what QE entailed. The success of the narrative created around QE; that it is the mythical ‘free lunch’ that we all intuitively know can’t exist but secretly hope does, has played perfectly to the public and now, having endured for two electoral cycles, the next wave of politicians also believe it will have no consequences and are actually using it when planning the message they feel will endear them to the electorate. What plays better than free money?
Accounts will be frozen, and funds will be shut.
What the data does suggest is while the BEA can change the methodology for calculating economic growth, a change in the "math" does not change the "reality."
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...
Earlier this year, Germany’s attorney-general Harald Range has suspended the investigation into the NSA phone tapping affair. Due to Edward Snowden’s revelations, it had emerged that the NSA had wire-tapped even chancellor Merkel’s mobile phone. The reason for suspending the investigation? “We can’t prove it, and the Americans won’t tell us anything”. Of course documented proof does exist, and US officials have even admitted to tapping Ms. Merkel’s phone. It couldn't be any clearer that Germany is essentially a US vassal state. Since then, a plethora of NSA and BND-related scandals has emerged. But now, the president of Germany’s “Federal Office for the Protection of the Constitution” (another spook agency) brought criminal charges against journalists working for the online publication “Netzpolitik”. Allegedly, the journalists are guilty of treason. Their offense? They reported on the spook bureaucracy’s plans to vastly expand internet surveillance of Germany’s citizens.
Futures Rebound On Ongoing Dollar Strength; Commodities Rise, China Slides, Greek Banks Continue PlungingSubmitted by Tyler Durden on 08/05/2015 06:51 -0400
In many ways the overnight session has been a mirror image of yesterday, with the dollar accelerating its Lockhart-commentary driven rise, which curiously has pushed ES higher perhaps as a result of more USDJPY correlation algos being active and various other FX tracking pairs. Indeed, the weak yen is all that mattered in Japan, where the Nikkei 225 (+0.5%) rose amid JPY weakness, despite opening initially lower as index heavyweight Fast Retailing (-4.5%) reported a 2nd consecutive monthly decline in Uniqlo sales. Elsewhere in mirror images, China slid 1.7%, undoing about half of yesterday's 3.7% jump, and is now down for 4 of the past 5 days.
We’re living in two worlds, you and I. There’s the world we see (or are made to see) and then there’s the one we sense (and occasionally catch a glimpse of), the latter of which is a far cry from the propaganda-driven reality manufactured by the government and its corporate sponsors, including the media. Indeed, what most Americans perceive as life in America - privileged, progressive and free - is a far cry from reality, where economic inequality is growing, real agendas and real power are buried beneath layers of Orwellian doublespeak and corporate obfuscation, and “freedom,” such that it is, is meted out in small, legalistic doses by militarized police armed to the teeth. All is not as it seems.