Trade Deficit

When Exactly Will The Fed Launch QE4?

No one earned it. No one saved it. But here’s our prediction: Someone will miss it when it is gone! If the US money supply were a deck of cards, Uncle Sam has been slipping in extra aces for the last 44 years. In the third quarter, net liquidity is likely to turn negative. And the stock market is likely to correct. What then? The Fed will panic and announce QE4… and other measures.

Direct Evidence For The Supercycle

Nothing is ever permanent with the QE’s because they were doomed from the start. The “dollar” system can never be refined and remade to its prior station because it was irrevocably broken on August 9, 2007. All that QE’s have done is to create reverberation within the downward channel which may, in the end, only exacerbate the degree of imbalance that weighs on the inevitable shift.

Chaos And Hegemony - How US Dollar Imperialism Dominates The World

To maintain its hegemony, the U.S. must by all means prevent the emergence of rival powers and impede possible current as well as future threats that could emanate from oil states. The ideal condition for enforcing its own goals at a low cost would be the fragmentation of antagonistic power centers through ethnic and religious strife, civil wars, chaos and deep-seated mistrust in the Middle East – always following the well-known premise of ‘divide and rule.’ In fact, we are currently experiencing tremendous changes towards such a chaotic state of affairs.

Richard Duncan: The Real Risk Of A Coming Multi-Decade Global Depression

"This is not going to be a 1921-style two-year recession that we bounce back from after a little bit of pain and unpleasantness. After a 50-year global economic boon involving what is now a $59 trillion expansion of credit in 50 years, this isn’t going to be a one or two-year hard recession. This is going to be a multi-decade global depression and I’m not sure that anyone alive today would live long enough to see the recovery."

Initial Claims Slide Again; Trade Deficit Lowest Since 2009 Despite Soaring Dollar On Imports Plunge

The volatility in initial claims continues: after last week's drop to 282K pulled the heavily-watched number back under 300K, this week we have seen even less layoffs, with the DOL reporting that only 268K claims for unemployment benefits were filed in the past week, well below the 286K expected. The 4-week moving average was 285,500, a decrease of 14,750 from the previous week's revised average. The previous week's average was revised up by 3,250 from 297,000 to 300,250. And while it is no secret that US labor data leave much to be desired it was today's trade data that will shock many, after the BEA reported that in February, the US trade deficit collapsed to just $35.4 billion, a 17% plunge compared to the $42.7 billion January revision, and far below the $41.2 billion expected. The $7.3 billion drop in the deficit was the largest since the $8.3 billion drop posted in June of 2013. And even more notable: the total February deficit was the lowest since October 2009!

Frontrunning: March 25

  • ECB Tells Greek Banks Not to Boost Exposure to Athens Government’s Debt (WSJ)
  • Search teams probe wreckage of jet in French Alps (Reuters)
  • Flight Recorders Offer Best Hope of Explaining Jet’s Fatal Drop (BBG)
  • Yemen Houthi militia sweeps toward Aden in threat to president (Reuters)
  • In Nigeria, Oil Price’s Slide Deters Theft (WSJ)
  • Saudi Arabia building up military near Yemen border (Reuters)
  • Quant Who Shook the Financial World Tries More Humble Approach (BBG)
  • Executive Pensions Are Swelling at Top Companies (WSJ)

No Longer Quiet On The Eastern Front (Part 2)

In the first part of this series we discussed Greece and its ongoing negotiations with the European Union – particularly with Germany – and how the complicated history between these two countries makes it exceedingly difficult for the Greek people to accept the terms on offer from the EU. This time we will turn our attention north, to a different kind of conflict.  This one has also wrought economic devastation to a European country, but of a much higher intensity.  It is the first civil war that the European continent has seen since the Balkan Wars of the 1990s, when the regional superpower of Yugoslavia was ultimately broken up amidst a series of separatist and independence movements.  Today’s conflict will almost certainly result in a similar outcome for its host country. I’m talking, of course, about Ukraine.  Let’s take a closer look.

Futures Weak Ahead Of "Impatient" Fed, Oil Slide Continues; China Stocks Go Berserk

The only news that matters to algos today is whether Janet Yellen will include the word "patient" in the FOMC statement as a hint of a June rate hike, even though the phrase "international developments" is far more important in a world in which everyone (such as the 25 or so central banks who have cut rates in the past 80 days) is now scrambling to export deflation to everyone else. And with carbon-based traders recuperating from St. Patrick's day, few will notice that the oil tumble continues as WTI touches new 6 year highs after yesterday's shocking 10MM+ API build, and is now openly eyeing a collapse into the $30s. Just as nobody will notice that even as futures in the US and European stocks are looking a little hungover ahead of the Fed and perhaps on the latest bout of anti-austerity out of Europe, the China levitation has gone full retard, with the SHCOMP up another 2.1% yesterday and now in full-blown parabolic mode as housing data confirms the Chinese housing bubble has truly burst, and as shadow bankers dump all their funds into stocks in hopes of making up for losses due to regulatory intervention.

US Trade Deficit Worse Than Expected As Auto Exports Tumble

As Chinese exports crashed in January (and imports were extremely weak), one could be forgiven for expecting the US trade deficit to be more extreme than the tumble it experienced in December... but no. The US Trade Deficit printed $41.8bn, slightly worse than the $41.1bn expectation but 'better' than the adjusted $45.6 billion. Imports dropped 3.9% in January and Exports fell 2.9% but YoY imports fell 0.17% and exports fell 1.75% - the last time both fell YoY was November 2008. This is the 2nd month in a row of worse than expected deficits (and 4th of last 5). The shift is led by big drops in Food & Beverage (-9.1%) and Auto (-7.0%) exports and an 11.3% plunge in Industrial Supplies imports.

StalingradandPoorski's picture

What people and central bankers do not understand, is that you can't devalue your way to prosperity. Absolutely nothing has changed since the last crisis. The same too big too fail banks have only gotten much bigger. The same people that were in charge leading into the crisis and during it, are the same people who are in charge of fixing it. New regulations were established to try and regulate the industry, but they will be proven to be ineffective. Why? Because the Volcker Rule and Dodd-Frank have had all the important elements removed, thanks to the massive lobbying power of the TBTF banks and the Fed.