World Bank

Frontrunning: June 8

  • World stocks struggle to build on highs as Europe weighs (Reuters)
  • Oil hits eight-month high on disruptions, Chinese demand (Reuters)
  • Hillary Clinton Set for Democratic Nomination After Primary Wins (WSJ)
  • DNC avoids calling Clinton presumptive nominee (The Hill)
  • Trump, Rattled by Critics, Treads Carefully in Victory Speech (BBG)

Futures Levitate To Session Highs As ECB Enters The Bond Market; Crude Hits $51

In an overnight session dominated by the latest political developments out of the US where Hillary Clinton officially claimed the democratic nomination, the financial newsflow focused on China's trade data, where exports fell 4.1% from a year earlier, in line with expectations, but imports dropped 0.4% from a year earlier, the smallest decline since they turned negative in November 2014, driven entire by soaring "imports" from Hong Kong - aka capital outflows - which soared by 243% y/y.  The other main news was the official launch of the ECB's corporate bond buying, which helped drive government bonds yields in German to new record lows, and the average yields on investment-grade corporate debt below 1%.

S&P Nears All Time High, Global Stocks Rally As Dovish Yellen Unleashes Animal Spirits

Stock whisperer Yellen said all the right things yesterday, when she sounded more optimistic than pessimistic on the economy but while the economy is "strong" it is most likely not strong enough to weather a rate hike in the immediate future. As a result, the S&P 500 climbed toward a record on Monday (and continued rising overnight) after Yellen said she expects to raise interest rates only gradually and held off from specifying any timeframe, a shift from her May 27 stance that a move was probable “in the coming months.” This was interpreted that both a June and July rate hike are now off the table, with September odds rising modestly.

Why The G7 May Be Hastening Helicopter Money

Faced with a sharply appreciating yen, and lacking G7 support, Japan may need to take extreme measures. More than three years into Abenomics, and with policymakers running out of options on how to reverse the economy's trend, the Bank of Japan may be forced to intervene with unorthodox and untested policy, such as “helicopter money.”

China Is The Biggest Short...Ever

As simply put as possible... over the next 2 decades, there will be an average of 7.5 million fewer 0-55yr/old Chinese every year vs. an average annual increase of 9.5 million 55+yr/olds. And the wealthy minority of the elderly have stashed their reserves in a whole lot of expensive, vacant real estate that they intend to pass along (rent or sell) to the declining young population.  What could go wrong since housing prices only go up...right!?!

China's Credit-Fuelled Economy Is "Gyrating Like A Spinning-Top That's Out Of Momentum"

China's hard landing has already begun, warns economist Richard Duncan as the nation's credit-fuelled economic boom ended in 2015 and a protracted slump lies ahead. He has published a series of videos explaining why China’s economic development model of export-led and investment-driven growth is now in crisis leaving "China’s economy resembles a spinning top that is running out of momentum. It is wobbling and gyrating erratically."

Examining American Exceptionalism

In the hands of the few, trademarked American Exceptionalism acts as a battering ram, is a corporate brand name front that unites evangelism, militarism and Keynesianism, that installs dictators, that perpetuates privately-owned fiat currencies, that topples the same dictators to create in name-only democracies, that trains militants and insurgents, that funds gladio-styled terrorism, NATO, international banking organizations, the IMF, the World Bank, Export-Import Banks, that emasculates Europe, that fans and funds conflict between installed dictators and in name-only democracies, between insurgents and loyalists, this City on the Hill, these thousand points of light. But below the surface, this thing about America that is exceptional but not distinct from other cultures...

Frontrunning: May 17

  • As Brexit vote looms, U.S. banks review their European commitments (Reuters)
  • Oil’s Strength Continues to Boost Global Stocks (WSJ)
  • Trump closing gap with Clinton, poll shows (Hill)
  • In Adjacent Pennsylvania Counties, Republicans Are Split on Donald Trump (WSJ)
  • Make America Gold Again: Calls for Everyone's Favorite Standard Are Back (BBG)

Who Rules The World? Part 1

The Western picture of world order is that “ever since the end of the Cold War, the overwhelming power of the U.S. military has been the central fact of international politics.” This is particularly crucial in three regions: East Asia, where “the U.S. Navy has become used to treating the Pacific as an ‘American lake’”; Europe, where NATO -- meaning the United States, which “accounts for a staggering three-quarters of NATO’s military spending” -- “guarantees the territorial integrity of its member states”; and the Middle East, where giant U.S. naval and air bases “exist to reassure friends and to intimidate rivals.” The problem of world order today is that “these security orders are now under challenge in all three regions” because of Russian intervention in Ukraine and Syria, and because of China turning its nearby seas from an American lake to “clearly contested water.” The fundamental question of international relations, then, is whether the United States should “accept that other major powers should have some kind of zone of influence in their neighborhoods.”

Steve H. Hanke's picture

Ever since the U.S. Federal Reserve (Fed) began to consider raising the federal funds rate, which it eventually did in December 2015, a cottage industry has grown up around taper talk. Will the Fed raise rates, or won’t it? Each time a consensus congeals around the answer to that question, all the world’s markets either soar or dive.

British "Spies" Among Thousands Of names Exposed Following Massive Leak At Largest Mid-East Bank

The latest mega data leak which hit the Qatar NationL Bank last week contains hundreds of thousands of records including customer transaction logs, personal identification numbers and credit card data. Additionally, dozens of separate folders consist of information on everything from Al Jazeera journalists to what appears to be the Al-Thani Qatar Royal Family and even contains a slew of records listed as Ministry of Defence, MI6 (the UK foreign intelligence service) and Qatar's State Security Bureau, also known as "Mukhabarat".