World Bank

Who's Really Isolated? Iran Set To Join BRICS Bank, Strengthen Ties With Brazil

On the heels of the nuclear deal and Tehran's ground operation in Syria, Iran is stepping up efforts to prove that contrary to Western rhetoric, it is not in fact "isolated." According to the country's economy minister, Iran is now set to join the BRICS bank and step up its cooperation with Brazil. This is symptomatic of Washington's waning ability to exert American influence on global affairs both political and economic.

As China 'Buys Low' To Build SPR, Washington Forced To Sell Strategic Crude To Meet Budget

The signs of regime change are everywhere. From embarrassment by Russia's success in Syria to China's creation of its own 'World Bank' and SWIFT alternative, the trend of de-empirization are growing, but tonight's news that Washington will sell oil from its strategic reserve in order to meet budget constraints and avoid default (as China takes advantage of low prices to build its own reserves) is simply stunning in its analogy of the shifting world order.

Reflections On Venezuela's "Economic Miracle"

What this economic crisis does highlight is that short-term success should never be taken as proof of a long-term solution. And this is particularly true when it comes to quasi-socialist and extreme populist governments. In the long-run, countries that follow these policies have a consistent track record, which is basically the same as what we’re witnessing now in Venezuela.

Yellen & Kuroda Live In A "Fantasy Fiat World Divorced From Actual Business Conduct"

Given what the Japanese have been subjected to in the past two and a half years of QQE, it is nearly criminal to suggest they need only more of it. None of it has worked as promised and stated, so what might have changed? Absolutely nothing except the arrangement of qualifiers and excuses that litter the same shared central bank speech delivered over and over of late. Kuroda says “robust”, Yellen proclaims “strong”, and both only confirm they live not of this world’s economy.

Oil Prices Still Not Low Enough To Fix The Markets

Current oil prices are simply not low enough to stop over-production. Unless external investment capital is curtailed and producers learn to live within cash flow, a production surplus and low oil prices will persist for years.

The Economic Doomsday Clock Is Closer To Midnight

Central banks are fearful and unwilling to normalize but artificially high valuations across asset classes cannot be sustained indefinitely absent fundamental global growth. Central banks are in a prison of their own design and we are trapped with them. The next great crash will occur when we collectively realize that the institutions that we trusted to remove risk are actually the source of it. The truth is that global central banks cannot remove extraordinary monetary accommodation without risking a complete collapse of the system, but the longer they wait the more they risk their own credibility, and the worse that inevitable collapse will be. In the Prisoner’s Dilemma, global central banks have set up the greatest volatility trade in history.

"A Generation In Crisis" - The World Needs 5 Million Jobs/Month To Stymie Youth Extremism

For over 3 years we have pointed out that the surging youth unemployment was Europe's (if not the world's) scariest chart, because the last thing Europe needs is a discontented, disenfranchised, and devoid of hope youth roving the streets with nothing to do, easily susceptible to extremist and xenophobic tendencies: after all, it must be "someone's" fault that there are no job opportunities for anyone. Well, as Bloomberg reports, The World Bank has an unsettling message for young people around the globe: unless we create 5 million jobs a month, the situation is going to get worse.

Global Deflation Alert: Hidden EM Debts To China Could Be Immense

Though emerging economies’ debts seem largely moderate by historic standards, it seems likely that they are being underestimated, perhaps by a large margin. If so, the magnitude of the ongoing reversal in capital flows that emerging economies are experiencing may be larger than is generally believed – potentially large enough to trigger a crisis. In this context, keeping track of opaque and evolving financial linkages is more important than ever.

The Dollar & China's "Financial War"

With the benefit of hindsight, the two-day devaluation of the yuan in mid-August might have been a masterstroke of strategy. China executed a financial move that appeared to undermine its own position but instead created trouble for the US; how much is still to be played out. So was the devaluation a well-executed move against the dollar, or are the Chinese authorities as clueless as any other government?

How Our Aversion To Change Leads Us Into Danger

The persistent claim emanating from Washington that America spreads freedom and democracy around the world has been exposed as ludicrous numerous times and in many parts of the world, but not in the US itself, and that’s what counts most. The notion that we we can grow our way out of the mess that our previous growth spurt has gotten us into, rests at best on very flimsy foundations. To shake off this all-encompassing growth ideal, however, we would need to radically change our ‘model’ of the world.

The US Government Just Crossed The Rubicon

The phrase “crossing the Rubicon” has stuck for more than 2,000 years, signifying a risky and dangerous point of no return. This week, the United States government crossed the Rubicon. In a fit of complete arrogance, a federal judge ruled that he has ‘jurisdiction’ over one of the biggest banks in mainland China, Bank of China (BOC), and demands that the bank turn over financial records to his court.

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.