World Bank

Frontrunning: October 5

  • MOAR: Euro-Area Growth Seen Slowing in Sign More Stimulus May Be Ahead (BBG)
  • MOAR: Japan's wage growth slows in August, keeping pressure on BOJ for more stimulus (Reuters)
  • MOAR: Stocks, Copper, Emerging Markets Jump as Fed Delay on Rates Seen (BBG)
  • And yet... Central Banks Lose Bond-Market Credibility as Woes Mount (BBG)
  • World Bank cuts Asia growth forecast on China and US rates (BBC)

Global Stocks, Futures Jump On Barrage Of Bad Economic News; Glencore Surges, Volkswagen Slumps

Following Friday's disastrous payrolls report, which confirmed all the pre-recessionary economic data and signaled that instead of approaching "lift-off" and decoupling from the rest of the world, the US economy is following the emerging markets into a slowdown in what may be the first global, synchronized recession since 2008, the market saw its biggest intraday surge since 2011 and the sharpest short covering squeeze in history, we are happy to announce that the "market" is now solidly back in "bad news is good news" mode.

Emerging Market Meltdown May Plunge Global Economy Into Recession

"The impotence of monetary policy in boosting growth and staving off deflationary pressures has become painfully apparent, especially when it is acting in isolation and when a large number of countries are resorting to the same limited playbook."

Calm Before The Payrolls Storm

With China markets closed for holiday until the middle of next week, and little in terms of global macro data overnight (the only notable central banker comment overnight came from Mario Draghi who confidently proclaimed that "economic growth is returning" which on its own is bad for risk assets), it was all about the USDJPY which has seen the usual no-volume levitation overnight, dragging both the Nikkei higher with it, and US equity futures, which as of this moment were at session highs, up 7 points. The calm may be broken, though, as soon as two hours from now when the September "most important ever until the next" payrolls report is released.

The UN Just Unleashed "The Global Goals" - The Elites' Blueprint For A "United World"

The elite want a one world government, a one world economic system and a one world religion. But they are not going to achieve these things by conquest. Rather, they want everyone to sign up for these new systems willingly. The “global goals” are a template for a united world. To many, the “utopia” that the elite are promising sounds quite promising, many of the "global goals" sound quite good. The key is to look behind the language and understand what is really being said.  And what is really being said is that the elite want to take their dream of a one world system to the next level.

Low Oil Prices - Why Worry?

Most people believe that low oil prices are good for the United States, since the discretionary income of consumers will rise. There is the added benefit that Peak Oil must be far off in the distance, since “Peak Oilers” talked about high oil prices. Thus, low oil prices are viewed as an all around benefit. In fact, nothing could be further from the truth...

A Currency War That Few Economists And Analysts Notice, Much Less Understand

Most economists and financial analysts think that 'currency war' merely refers to the competitive devaluations that nations sometimes engage in to help boost their domestic economies, as they had done in the 1930's for example. This time the currency war is a much more profound confrontation of differing agendas revolving around the historically unusual role of the US dollar, based on nothing more than the will of the Federal Reserve and the 'full faith and credit' of the US, as the reserve currency for global central banks and international trade.

The Established Order Will Be Challenged

What can we expect to happen in our homeland when finally even the generally uninformed population also understands that governments they have elected for decades, and its Fed facilitator or controller, jointly have waged a century-long war on its citizens? The people of America cannot make a counter offensive similar to those of sovereign nations; however people are uniting in resistance to robber baron policies, as evidenced by the popularity of nonpoliticians currently in candidacy for the office of president. These troops will mass also, it just remains to be seen what form their eventual counter offensive will be. The established order will be challenged.

The Fed's Long Awaited Decision Day Arrives, And Chinese Stocks Wipe Out In The Last 15 Minutes

The long awaited day is finally here by which we, of course, mean the day when nobody has any idea what the Fed will do, the Fed included. Putting today in perspective, there have been just about 700 rate cuts globally in the 3,367 days since the last Fed rate hike on June 29, 2006, while central banks have bought $15 trillion in assets, and vast portions of the world are now in negative interest rate territory.

"Ineffective & Reckless" Fed Is An "Engine of Disaster"

In short, activist Fed policy is both ineffective and reckless (and the historical data bears this out), and that the Federal Reserve has pushed the financial markets to a precipice from which no gentle retreat is ultimately likely. Similar precipices, such as 1929 and 2000, and even lesser precipices like 1906, 1937, 1973 and 2007 have always had unfortunate endings. A quarter-point hike will not cause anything. The causes are already baked in the cake. A rate hike may be a trigger with respect to timing, but that’s all. History suggests we should place our attention on valuations and market internals in any event.

The Fed Shouldn't Worry About Losing Credibility: It Already Lost It

It appears that the Fed no longer cares about doing the right thing for a very simple reason - the Fed no longer is worried about losing credibility. As the following chart showing the results of a survey of 150 institutional RBS clients and investors confirms, two -thirds already believe the Fed has lost credibility.

Nomi Prins: Mexico, The Fed, & Counterparty Risk Concerns

This level of global inter-connected financial risk is hazardous in Mexico, where it’s peppered by high bank concentration risk. No one wants another major financial crisis. Yet, that’s where we are headed absent major reconstructions of the banking framework and the central bank policies that exude extreme power over global economies and markets, in the US, Mexico, and throughout the world. Mexico’s problems could again ripple through Latin America where eroding confidence, volatility, and US dollar strength are already hurting economies and markets. The difference is that now, in contrast to the 1980s and 1990s debt crises, loan and bond amounts have not just been extended by private banks, but subsidized by the Fed and the ECB.  The risk platform is elevated. The fall, for both Mexico and its trading partners like the US, likely much harder.