"The dovish surprise is if she explicitly removes March from the hiking calendar (which would be Draghi-esque in front running the FOMC), broadly hints at a delay or expresses concern on downside risk to long term inflation or structural stagnation. The intention would be to show US households, business and investors that the Fed has their back... It is unlikely, however, that pointing to negative rates or QE4 would work, as investors are increasingly skeptical that more of the same policy mix would be effective in hitting final goals."
The year continues to be bruising for risk assets and recent attempts at stabilisation have been unsuccessful. After a mild rebound, equities and US credit spreads are again close to their year’s worst levels. In addition to the initial concerns about China and energy, two new issues further weigh on risk sentiment: the slowdown in US growth momentum and the tightening of financial conditions especially in European financial credit.
“Are we closer to an economic recession or a continued expansion?” With the Fed hiking interest rates, and talking a tough game of continued economic strength, the risk of a “policy error” has risen markedly in recent months. The markets, falling inflation indicators, and plunging interest rates are all suggesting the same.
Here is the one chart showing why the time to panic about Canadian banks may have finally arrived...
The upper-middle class that's supported the "recovery" with massive discretionary spending is far more vulnerable to implosion/insolvency than is generally appreciated.
BTFD? Deutsche Bank stock crashed over 11% today (the most since July 2009) to its lowest since January 2009 record lows. We have detailed at length why this is a major systemic problem and we wonder how anyone can view this chart and not question their full faith in central planners engineering of the 'recovery'. Nothing is fixed and it's starting to become very obvious!
Wall Street's Biggest Permabull Slashes US Growth Outlook (Again), Says No Chance Of March Rate HikeSubmitted by Tyler Durden on 02/08/2016 11:15 -0500
There are two ways to look at this. On the one hand, you might be inclined to think it's especially bad news when the Street's permabulls turn bearish. On the other hand, this is a man who once lost a forecasting contest to a groundhog, so perhaps a rip-roaring economic recovery is just around the corner.
The political class has completely disrupted the American structure of production, made American workers uncompetitive, snuffed the life out of entrepreneurs, and burdened the entire nation with a debt obligation the size of Jupiter. The US economy is not the strongest and most durable in the world — it is an unskilled thirty-two-year-old waiter crashing at his parent’s place and trying to pay down an $80,000 international relations degree.
"Any minute now..."
"The US Treasury curve is still steep by historical standards. Taken at face value, this may suggest recession odds are small. However, we argue this logic is flawed because the curve is structurally steep when the Fed Funds rate is close to zero. When adjusted for the proximity of rates to zero, the curve may already be inverted and therefore may already be priced for a recession./// Implied recession odds are as high as 64% if the adjusted OIS curve is used"
The idea that you can fix bad debt with more debt is as prevalent as the idea that the US economy can be binge hiring while careening into recession. What’s truly sad is that those two mistakes are really, at root, the same. The road ahead to real recovery and sustainable growth starts with “unlearning” monetarism. It is a huge task.
“...parts of the U.S. jobs report for January seem fishy...”
The Great Depression was the most severe economic depression ever experienced by the Western world. It was during this troubled time that the world’s most famous case of deflation also happened. The resulting aftermath was so bad that economic policy since has been chiefly designed to prevent deflation at all costs.
North Dakota "has been the economic envy of every state in America for most of the past decade with the lowest jobless rate, the highest increase in personal income, and the fastest-growing population." Not anymore.