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Saxo Bank Warns There Are 3 'Other' Geopolitical Risks Investors Are Ignoring

Tyler Durden's picture




 

Via Saxo Capital Markets,

From Ukraine to Gaza, geopolitical risks are weighing heavily on investors’ minds. But there are plenty more out there that may not be getting headlines.

US mid-term elections

Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery.

Obamacare and a general ennui with the presidency means the Democrats could be in for a pasting later this year when voters go the polls. If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery. A reversal in the economy could mean the Fed is unable to raise rates next year as planned.

Scottish independence referendum

Risk: Voters say "Yes" to Scottish independence referendum, sending UK recovery into reverse gear.

Victory for the 'Yes' vote could see a messy dispute between Edinburgh and London as they define the terms of independence. It would send shockwaves through UK markets as they wrestle over the pound and Scotland works out its currency options. Businesses could head south, while investment north of border could come to a halt until there is agreement. More importantly, perhaps, the UK’s very existence would be called into question; Britain’s stake at the top table of the UN and G7 no longer assured - the fallout for the UK economy could be enormous and send the pound into reverse gear.
 

Anti-corruption drive in China

Risk: Political backlash from anti-corruption drive in China dents business confidence in Asia’s economic powerhouse, harming the global recovery.

Beijing is ramping up its anti-corruption efforts and increasingly those in the commercial sector are fearing they could be caught in the net. After years of grab-what-you-can growth there are many whose records are not completely clean. The problem is that by going after individuals China risks dismantling chunks of its economy. Even rumours about a chief executive can hit investment and derail contract negotiations, with all the knock-on effects this can have on the economy. Just the spectre of investigations is having a chilling impact on companies’ plans.

 

*  *  *

Of course - aside from the fact that stocks are ignoring EVERY geopoltical risk in the world...

Deutsche Bank warns Geopolitical Risks Remain High

 

As Cembalest notes, the list is long... and growing

The downing of a Malaysian jetliner in eastern Ukraine and escalating sanctions against Russia, the Israeli invasion of Gaza, renewed fighting in Libya, civil wars in Syria, Afghanistan, Iraq and Somalia, Islamist insurgencies in Nigeria and Mali, ongoing post-election chaos in Kenya, violent conflicts in Pakistan, Sudan and Yemen, assorted mayhem in central Africa, and the situation in North Korea, described in a 2014 United Nations Human Rights report as having no parallel in the contemporary world. Only in Colombia does it look like a multi-decade conflict is finally staggering to its end.

 

 

For investors, strange as it might seem, such conflicts are not affecting the world’s largest equity markets very much (for now). Perhaps this reflects the small footprint of war zone countries within the global capital markets and global economy, other than through oil production.

 

 

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Wed, 08/13/2014 - 13:38 | 5087975 besnook
besnook's picture

the chinese should legalize criminal behavior. that will clean up corruption. it works brilliantly in the usa. there is no corruption here anymore.

Wed, 08/13/2014 - 13:49 | 5088036 Bastiat
Bastiat's picture

Are you available to take Ginsberg's spot on the Supreme Court?

Wed, 08/13/2014 - 13:59 | 5088088 PartysOver
PartysOver's picture

If the Senate goes Republican and Ginsberg retires there may not be a placement for a couple of years.  Showtime!

Wed, 08/13/2014 - 14:10 | 5088158 S.M.T.U.Q.I.
S.M.T.U.Q.I.'s picture

The bleeding hart liberals are whining so loud about warming globe.  I can't even hear myself think.  Obozoma is draging these country to the ground.

Wed, 08/13/2014 - 14:13 | 5088175 max2205
max2205's picture

#1. BarryObo gets thrown out of office

Wed, 08/13/2014 - 14:46 | 5088315 BlindMonkey
BlindMonkey's picture

And take the Ferguson fun coast to coast? That will be a riot to see!

Wed, 08/13/2014 - 16:14 | 5088834 mvsjcl
mvsjcl's picture

"Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery."

 

I stopped reading there.

Wed, 08/13/2014 - 17:14 | 5089162 BlindMonkey
BlindMonkey's picture

That is where I started laughing.

Wed, 08/13/2014 - 17:14 | 5089163 BlindMonkey
BlindMonkey's picture

Doubled

Wed, 08/13/2014 - 17:55 | 5089353 orez65
orez65's picture


"Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery."

 

I stopped reading there

100% AGREE.

What kind of b--l s--t is that!

The best thing that could happen is that Obama would take a vacation until the end of his term.

Wed, 08/13/2014 - 14:09 | 5088150 Bangin7GramRocks
Bangin7GramRocks's picture

Do these assholes actually get paid to write this drivel? How about this one. The entire world financial system is not based in reality. It is fake, made up, conjured and plain fraud. That's all one needs to know. U.S. mid-term elections! You must be shitting me.

Wed, 08/13/2014 - 14:37 | 5088283 GOSPLAN HERO
GOSPLAN HERO's picture

Replacement for Ginsberg?

One must be a Jewess.

Wed, 08/13/2014 - 14:07 | 5088139 LawsofPhysics
LawsofPhysics's picture

Remember, one man's "corruption" may be another man's income...

 

i wish the chinese well and good luck.

Wed, 08/13/2014 - 14:12 | 5088165 Bloppy
Bloppy's picture

"Investors" (are there any these days?) are only worried about whether Tesla is up $10 or only $5 (a "down" day).

Just in: Hollywood backing Obama's Dem candidates bigger than ever this year with a $$$ avalanche:

http://tinyurl.com/nyhzt3f

Wed, 08/13/2014 - 15:27 | 5088584 caconhma
caconhma's picture

Anti-corruption drive in China is good for China and it is very bad for the International Banking Mafia whose power ientirely depends on printing fiat money (US$ and Euro) and on corruption.

Presently China attacks both US$ reserve currency status and own corruption. Without addressing these vital issues China has no future as an independent and prosperous country.

 

Just compare China and Russia. For all practical purposes NATO invaded and and Putin is doing nothing since his own elite is utterly corrupt and its interests have nothing to do with Russia since their families and their money are in USA and EU. So much for dying Putistan.



Wed, 08/13/2014 - 13:40 | 5087976 indygo55
indygo55's picture

"derailing the US recovery? "

What recovery?

Wed, 08/13/2014 - 13:42 | 5087991 NOTaREALmerican
NOTaREALmerican's picture

Not including the Trash Class, there's been quite a recovery in the US and the UK. 

Wed, 08/13/2014 - 13:46 | 5088018 Carpenter1
Carpenter1's picture

Every one of these "risks" is within the control of the vampiric status quo class= No risk.

Article is B.S.

Wed, 08/13/2014 - 13:49 | 5088032 WarHorse
WarHorse's picture

Well - if it comes from Saxo Bank ..... 

Wed, 08/13/2014 - 13:59 | 5088095 PartysOver
PartysOver's picture

Nuff said.

Wed, 08/13/2014 - 13:43 | 5088000 NoDebt
NoDebt's picture

That was my reaction, too.  And it's all the Republican's fault for being voted into office and blocking Obama's recovery?  Are you fucking kidding me?

I couldn't read past that point.

Wed, 08/13/2014 - 13:56 | 5088076 NoDebt
NoDebt's picture

Yeah, that one's gonna come back and bite us all in the ass next quarter.  No doubt.

You hit on my favorite stories, BTW.  Oh, the wailing and gnashing of teeth over that in the Environmentalist camps!  "We just didn't get our story out effectively."  "We just had the wrong people implementing it!"  Every damned excuse under the sun except for reality- the law was a stupid idea to fix a non-existant problem and people finally got tired of paying for it.

Wed, 08/13/2014 - 13:49 | 5088035 MalteseFalcon
MalteseFalcon's picture

"Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery."

LOL.  This is already a lame duck presidency.  And what recovery?

Wed, 08/13/2014 - 13:59 | 5088092 NoDebt
NoDebt's picture

I think it's fair to say almost all of us pulled up short when we read that little gem.  This guy might be in the running for "most wrong person in the world", though still a distant second to Dennis Gartman,

Wed, 08/13/2014 - 14:19 | 5088202 Honey Badger
Honey Badger's picture

Plus, political gridlock is a good thing.  Everything .gov touches turns to shit in a hurry.

Wed, 08/13/2014 - 13:58 | 5088084 conspicio
conspicio's picture

Always good to let the progressive socialists self identify. And this is what passes for bespoke-suited-serious-collar-and-windsor-knotted-tie-analysis is just sad. What a fucking joke.

Wed, 08/13/2014 - 14:01 | 5088102 NoDebt
NoDebt's picture

"bespoke-suited-serious-collar-and-windsor-knotted-tie-analysis"

I'm borrowing that one, if you don't mind.

Wed, 08/13/2014 - 13:58 | 5088087 Kirk2NCC1701
Kirk2NCC1701's picture

"What recovery?" you ask?

A: The Recovery of the portfolio of the Top 2%. Which, BTW, is pretty much how "US" or "National Interest" are defined.

Wed, 08/13/2014 - 15:19 | 5088532 vintageyz
vintageyz's picture

That is the crux of the bisquit

 

Wed, 08/13/2014 - 13:50 | 5087977 hedgeless_horseman
hedgeless_horseman's picture

 

 

As Cembalest notes, the list is long... and growing

I already covered this...

  1. Ebola killing doctors in bunny suits,
  2. blacks rioting in St Louis,
  3. coup d'etat and then war in Ukraine,
  4. war and then coup d'etat in Iraq,
  5. NSA violating the Fourth Amendment,
  6. Argentine sovereign default,
  7. Fukushima pumping radiation into the Pacific,
  8. epic drought in California and Nevada,
  9. airliners falling out of the sky in droves,
  10. US Army General killed in the 13th year of American occupation of Afghanistan,
  11. US State Dept pulls out of Libya,
  12. Israel killing 100s of civilians in Gaza,
  13. a majority of American teens use drugs,
  14. a majority of American adults in debt,
  15. no toilet paper in Venezuela,
  16. etc.

Saxo's three risks being ignored by "investors" all fall under #16.

Wed, 08/13/2014 - 13:51 | 5088050 MalteseFalcon
MalteseFalcon's picture

#1 should read "West Africans and American missionaries flying nilly willy all over the globe."

Wed, 08/13/2014 - 13:54 | 5088063 Utah_Get_Me_2
Utah_Get_Me_2's picture

Is 'Nilly Willy' a subsidiary of Malaysia Airlines?

Wed, 08/13/2014 - 14:15 | 5088181 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

If they were, then far fewer would've actually gotten out of W.Africa.

See how well containment is handled once they get to a high population area:

http://theunhivedmind.com/UHM/ebola-biosecurity-level-4-safety-procedures-now-breached-in-spain-2/

 

Wed, 08/13/2014 - 14:32 | 5088261 cro_maat
cro_maat's picture

15. no toilet paper in Venezuala

Are you telling me they don't have Fiat in Venezuala?!!!! Hell if they use real money (gold / silver) I'll use a bidet. Sign me up.

Wed, 08/13/2014 - 14:51 | 5088344 BlindMonkey
BlindMonkey's picture

I had to look up what a bidet was. I was horrified when I saw the pic. I always thought those were fancy water fountains.

Wed, 08/13/2014 - 15:15 | 5088503 samcontrol
samcontrol's picture

omg... and the French are the dirty ones.

Wed, 08/13/2014 - 13:54 | 5088066 john39
john39's picture

you left out a zero in number 12...

Wed, 08/13/2014 - 18:38 | 5089561 UselessEater
UselessEater's picture

and forgot the Blood Moons and Legarde's Magic No. 7.... serious economic fundmentals count today ;)

Wed, 08/13/2014 - 13:39 | 5087978 Groundhog Day
Groundhog Day's picture

Fear mongerer....BTFD

Wed, 08/13/2014 - 13:41 | 5087985 pauhana
pauhana's picture

besnook - Yup, not even a smidgin!

Wed, 08/13/2014 - 13:47 | 5088025 besnook
besnook's picture

howzit, bruddah

Wed, 08/13/2014 - 13:42 | 5087986 SilverIsMoney
SilverIsMoney's picture

Lol.. "Derail recovery" AKA our scapegoat...

Wed, 08/13/2014 - 13:41 | 5087987 SilverIsMoney
SilverIsMoney's picture

Lol.. "Derail recovery" AKA our scapegoat...

Wed, 08/13/2014 - 13:46 | 5087990 Dr. Engali
Dr. Engali's picture

Anti-corruption drive in China? They should just learn to live with it and love it like us. Hey Vaseline is free with Obamasnap.

Wed, 08/13/2014 - 13:42 | 5087996 Oquities
Oquities's picture

the real risk is the straw that broke the camel's back, the last snowflake that sets off the avalanche, the first rock thrown that starts the riot, the last honest man throwing in the towel, the flock of black swans landing in the polluted pond simultaneously.

Wed, 08/13/2014 - 13:42 | 5087997 tjeffersonsghost
tjeffersonsghost's picture

So by cleaning up corruption in China that would be bad for the economy, did I read that right?

Wed, 08/13/2014 - 13:47 | 5088029 NoDebt
NoDebt's picture

Don't know.  I stopped reading after the first incredibly stupid comment in the article about the "US Recovery".  You probably read it right, though.  Sounds like something a banker would write.

Wed, 08/13/2014 - 14:54 | 5088365 BlindMonkey
BlindMonkey's picture

Only the pesants respect honesty.

Wed, 08/13/2014 - 13:43 | 5088003 i_call_you_my_base
i_call_you_my_base's picture

"If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery."

What reforms has he gotten through? This guy is a moron.

Wed, 08/13/2014 - 13:49 | 5088034 Utah_Get_Me_2
Utah_Get_Me_2's picture

Obama is a puppet. And he's dumb like a fox. The agenda he is the figurehead for has been carried out quite successfully.

When you intentionally take a ball pin hammer to a priceless sculpture.. it's been reformed.

Wed, 08/13/2014 - 13:51 | 5088049 i_call_you_my_base
i_call_you_my_base's picture

How is today any different than 2006? Economically and in terms of law?

Wed, 08/13/2014 - 14:06 | 5088133 Utah_Get_Me_2
Utah_Get_Me_2's picture

Half of the population receives at least one form of government assistance.

50 million Americans are on food stamps.

Healthcare costs are doubling and tripling for most Americans and they are FORCED to buy it.  

The US borders no longer exist and illegal aliens are bankrupting municipalities and social services.

Stocks are more overvalued now than they were in 2007.

The President can detain American citizens indefinitely without due process.

Oh yeah and the federal govt is well over $17 trillion in debt up over $9 trillon since 2006 and debt to GDP is 99% up from 61% 2006.

I could go on.. but I think i've made my point.

 

 

Wed, 08/13/2014 - 13:44 | 5088004 Utah_Get_Me_2
Utah_Get_Me_2's picture

Obamacare and a general ennui with the presidency means the Democrats could be in for a pasting later this year when voters go the polls. If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery. A reversal in the economy could mean the Fed is unable to raise rates next year as planned.

Read: The truth about the real economy will be blamed not on 6 more years of Keynesian, academic economic policies but you guessed it, the Republicans.

Resulting in 1 of 2 scenarios.

1.) The sycophants in the MSM will blame everything on the Republican congress. Obama will fade off into the sunset and the new puppet will assume the role as chief teleprompter reader.

2.) Obama announces a series of executive orders to counter the 'obstructive' congress that usher in the full blown police state.

Love the sources for that percentage chart: IMF, World Bank, BIS, UN, BP, WTO.

The unholy union, the top of the pyramid.

 

Wed, 08/13/2014 - 13:43 | 5088006 Number 156
Number 156's picture

In regards to China/Russia vs the west, they have been engaged in a new cold war, mostly over economic interests as China/Russia determined to push the west out of their region.
So I guess we can expect more war by proxy, and then perhaps things can heat up some.

Wed, 08/13/2014 - 13:45 | 5088008 Jack Burton
Jack Burton's picture

Scottish independence referendum?

I believe the polls show this is a dead issue. Sadly, as I favor it.

Wed, 08/13/2014 - 15:00 | 5088401 BlindMonkey
BlindMonkey's picture

That is one hell of a growth rate from 1 a week ago.

Wed, 08/13/2014 - 13:45 | 5088010 rosiescenario
rosiescenario's picture

All the bad news is good news for stocks.....easy money and plenty of it will keep flowing.

 

If the economy actually improves for the average person, if mortgages are once again being sought (currently at a 14 year low), and the ME quiets down then you should get nervous about the market.

Wed, 08/13/2014 - 13:48 | 5088024 Let them eat iPads
Let them eat iPads's picture

If Repubs win the election Obama will be freed up to play 36 holes a day.

Wed, 08/13/2014 - 13:48 | 5088033 buzzsaw99
buzzsaw99's picture

comedic gold in there:

...derailing the US recovery.

If the President loses control of Congress he’ll be unable to push forward reforms...

Wed, 08/13/2014 - 13:57 | 5088085 Conax
Conax's picture

+1

"If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence.."

Who needs a rudder that always steers us onto the rocks?

 

Wed, 08/13/2014 - 13:52 | 5088057 taraxias
taraxias's picture

What a bullshit article.

Wed, 08/13/2014 - 13:55 | 5088061 q99x2
q99x2's picture

We don't know when but we have a solution

There are a few trying to control evolution

When the world blows up in despair

We'll be there for the repair.

Because the banksters will be killedin the revolution.

Wed, 08/13/2014 - 13:53 | 5088062 Tenshin Headache
Tenshin Headache's picture

It's not geopolitical, but the two-day period August 10th and 11th saw 128 new cases of Ebola.

The three-day period August 7-9th had only seen 61.

(The two-day period August 5th and 6th had seen 68).

Wed, 08/13/2014 - 14:01 | 5088098 besnook
besnook's picture

the algo tracking ebola is scary. there is no way they will be able to contain the spread beyond the current confines. it is curious that none of the first world nations have done much to help especially since the virus is able to infiltrate biohazard suits.

Wed, 08/13/2014 - 13:55 | 5088071 besnook
besnook's picture

i think de dollarization or the bricsization of the world trumps anything short of a nuclear ww3. all else is trivial.

Wed, 08/13/2014 - 13:57 | 5088079 vyeung
vyeung's picture

agreed!

Wed, 08/13/2014 - 13:56 | 5088078 disabledvet
disabledvet's picture

"When you run out of things to re-post you re-post this shit."

Simply put there isn't much to talk about anymore.

THE WORLD HAS NOT ENDED!

Wed, 08/13/2014 - 13:59 | 5088094 loveyajimbo
loveyajimbo's picture

This author is pro Obongo... i.e... full of crap.  WE might be "rudderless" if Bad BO loses the Senate... LOL!!!  Like we have any direction now... other than straight down the shitter.

Wed, 08/13/2014 - 14:01 | 5088106 Sach Mahoney
Sach Mahoney's picture

"If the President loses control of Congress he’ll be unable to push forward reforms" ISN'T THAT THE POINT, HIS REFORMS ARE KILLING THE COUNTRY.  "but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery" WHAT?  WE FEEL RUDDERLESS WITH THIS GUY RUNNING THINGS NOW.  ....DENT RECOVERY....LAUGHING VERY LOUD 

Wed, 08/13/2014 - 14:02 | 5088109 assistedliving
assistedliving's picture

Every CB printing money like water, even Hedgeless Horsemen of the apocolypse great list is meaningless.  BTFD now until next interest rate hike which means your and my lifetimes

Wed, 08/13/2014 - 14:12 | 5088171 gcjohns1971
gcjohns1971's picture

You can reveal the authors ideology more starkly by noting the flip sides of the coins he is giving you.

SO...

THIS:

"If the President ... (wi)ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery."

IS THE SAME AS THIS:

"If the President can push forward all desired reforms then there will be a feeling of direction that will reinforce recovery."

AND THIS:

"Voters say "Yes" to Scottish independence referendum, sending UK recovery into reverse gear"

IS THE SAME AS THIS:
"Voters say "No" to Scottish independence referendum reinforcing UK recovery."

AND THIS:

"Political backlash from anti-corruption drive in China dents business confidence in Asia’s economic powerhouse, harming the global recovery"

IS THE SAME AS THIS:

"The surrender of the anti-corruption drive in China reinforced business confidence in Asia's economic powerhouse, aiding the global recovery."

 

Now lets boil away the verbage down to the author's key themes:

- Checks on Power are economically harmful.

- Centralised authority is superior to decentralized authority.

- Tolerance of corruption enhances economic growth.

 

Buyer beware!

 

Wed, 08/13/2014 - 14:28 | 5088251 Utah_Get_Me_2
Utah_Get_Me_2's picture

Now lets boil away the verbage down to the author's key themes:

- Checks on Power are economically harmful.

- Centralised authority is superior to decentralized authority.

- Tolerance of corruption enhances economic growth.

Well said gc.

Tyler's,

The author of this bullshit article must be revealed.

Sincerely everyone.

Wed, 08/13/2014 - 14:14 | 5088178 Yen Cross
Yen Cross's picture

  BallSaxo Bank > Fine purveyors of scrotal outerware...

Wed, 08/13/2014 - 14:29 | 5088258 viator
viator's picture

Sounds to me like any one of those risks ought to worth at least few hundred point gain.

Wed, 08/13/2014 - 14:33 | 5088274 Bunga Bunga
Bunga Bunga's picture

OT:

Hackers Learned Who Shot Down Boeing In Ukraine.

http://beforeitsnews.com/global-unrest/2014/08/hackers-learned-who-shot-...

Wed, 08/13/2014 - 15:00 | 5088400 ian807
ian807's picture

The biggest geopolitical risk being ignored is oil prices. These have temporarily been kept down by tight oil production in the USA. There's no possibility of this lasting more than a decade. After that, oil prices won't climb so much as leap, with all the knock-on effects on the world economy one might expect.

And remember, the world has to have a certain level of economic activity to support the location, extraction, refining and distribution of oil in the first place. Fall below that level and all that energy production activity just stops, no matter how much oil is in the ground.

Wed, 08/13/2014 - 15:07 | 5088446 smacker
smacker's picture

On the Scottish referendum:

 

- Scotland will not vote Yes.

- Britain's recovery is not in any forward gear. It's actually in neutral being pushed by a manufactured property boom and false stats from .gov.

Wed, 08/13/2014 - 15:40 | 5088659 radiobomb
radiobomb's picture

correct, "...the No camp a significant lead, on 61 per cent compared to the Yes camp's 39 per cent once undecided voters were removed."

source , yesterday daily telegraph [uk] ; http://www.telegraph.co.uk/news/uknews/scottish-independence/11026962/Sc...

barring a major catastophe, it is not a threat.

Wed, 08/13/2014 - 16:11 | 5088736 radiobomb
radiobomb's picture

so that's a 'No' from Scotland,.... the US recovery- errr, on planet banker-bonus perhaps... & other ZH articles have said the China  'corruption clampdown' is just taking care of the competition...

so 0/3 for the Saxo Bank...... dont believe any of their 3  points.  Worst article on ZH for a while..... 

since when did banks tell the truth anyway ?  [pm's  / libor / ratings - all huge lies and proven manipulations].

Wed, 08/13/2014 - 21:56 | 5090388 AdvancingTime
AdvancingTime's picture

I have been watching with wonder as the economic news flowing from the UK has been spun to give the impression of robust growth. In general the UK economy is not particularly competitive and being over-weighted in global finance it is vulnerable to problems that surface throughout the world.

It now appears much of the recent economic strength in the UK comes from the fact that thousands of Britons have been receiving compensation for Payment Protection Insurance (PPI).  Most Americans reading about the pickup in Britain's economy never even heard of the PPI. The total paid out so far, £13.3bn or about 22 billion American dollars has been a huge economic boost. More in the article below.

http://brucewilds.blogspot.com/2014/02/uk-economy-flood-of-questions.htm...

Thu, 08/14/2014 - 01:43 | 5090960 smacker
smacker's picture

You're absolutely correct. Very occasionally, PPI compensation is casually mentioned by MSM economists as a "contributing factor in GDP growth". Most of it is seen as a "windfall" and being spent.

The total sum of compensation put aside by banks so far is about GBP 21 billion, although it hasn't all been paid out yet. The bank with the highest liability is Lloyds: GBP 13billion.

Most of the other GDP growth is accounted for by a 'paper value' house-price boom which generates more borrowing, more debt and more spending. Some GDP also accounted for by savers withdrawing deposits and spending them due to zirp.

Wed, 08/13/2014 - 15:15 | 5088484 Tachyon5321
Tachyon5321's picture

 

 

 

Pretending a Republican victory would derail the economy that is already derailed makes you sound silly.

 

Wed, 08/13/2014 - 15:15 | 5088508 Dead Man Walking
Dead Man Walking's picture

What's wrong with rudderless ? It's the backbone of Obama policy on everything.

Wed, 08/13/2014 - 15:17 | 5088513 roadhazard
roadhazard's picture

Congress has made sure it was a lame duck Presidency from day one.

Wed, 08/13/2014 - 16:09 | 5088801 SilvertonguedAngel
SilvertonguedAngel's picture

He had both houses of congress til he forced through Obama 'care'. Next election was biggest other way election ever...

Wed, 08/13/2014 - 15:40 | 5088655 Dead Man Walking
Dead Man Walking's picture

Rudderless is good. It implies you still have a boat, and are not yet drowing.

 

-neither of which are true...

Wed, 08/13/2014 - 15:42 | 5088670 Richard Whitney
Richard Whitney's picture

>>If the President loses control of Congress he’ll be unable to push forward reforms,<<

Huh? Like he reformed healthcare, Solyndra et al., foreign policy, and his other reforms?

That he becomes an even lamer duck is devoutly to be wished.

And regarding rates, they are going to remain lower longer than anyone expects, regardless of Congress.

Wed, 08/13/2014 - 18:14 | 5089435 observiate
observiate's picture

the article lost me as soon as I saw "repubicans win, derails recovery"

saxo bank has zero idea about the inner workings of u.s. politics.  and their opinions are tainted with danish socialism all around.

so ummm yah. geopolitical risk, certainly.

but whether the so-called "recovery" is derailed or not goes waaaaay deeper than simple republicans vs. democrats in national elections.

to be sure, much of the recovery is fake, anyway.  pop the artificial fed bubble and give me some real growth from real demand for real products bought with real money (I understand this is somewhat of a mirage, but hey, shoot for the stars, land on the moon....)

Wed, 08/13/2014 - 18:30 | 5089516 Winston Smith 2009
Winston Smith 2009's picture

Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery.

That alone proves they have absolutely no idea whatsoever what they're talking about. First, there is no actual "US recovery." Second, the Dems have no more to do with it than the Reps.  The illusory "recovery" is entirely due to the Fed's policies.

Wed, 08/13/2014 - 18:41 | 5089576 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

when I swap out "Investors" for "Muppets" it becomes a smoother read.

Wed, 08/13/2014 - 19:23 | 5089766 esum
esum's picture

explain how a REPUBLICAN SENATE VICTORY "derails" the ""recovery""... first what fucking recovery? second, the repubs can override the idiot in the white house veto (hopefully) and lower corporate tax rates, reel in the epa, reel inthe doj, and impeach the subhuman scumbag if they wish... and repeal obumblercare.... for starters. if there is any real recovery is is IN SPITE of shit for brains and his crew... 

Wed, 08/13/2014 - 19:33 | 5089826 bardot63
bardot63's picture

Exactly.  Who wrote this crap?

Wed, 08/13/2014 - 19:45 | 5089903 TheRideNeverEnds
TheRideNeverEnds's picture

That all sounds like upside risk to me.  Good economic news and world peace are super bearish but I don't think we will get any of that anytime soon so BTFD while you still can because by the end of this month you will be buying new all time highs again.    

Wed, 08/13/2014 - 21:51 | 5090361 AdvancingTime
AdvancingTime's picture

An event in the not to distant future that may effect the British currency is when voters in Scotland will be given the choice of opting for independence in a referendum in September 2014. If Scotland wants independence then so be it, but sorting out the political and economic ties with the rest of the UK, may be difficult.

Scotland has to be allowed to stand on its own two feet without the rest of the UK financially and economically supporting it. The Euro proves that more than one sovereign country cannot easily use the same currency. Portugal, Ireland, Greece, Italy and Spain have discovered that you cannot have full independence and share a currency. Another problem is that if the UK Government is to agreeable to a separation, will Wales and Northern Ireland move towards independence? More on this subject in the article below.

http://brucewilds.blogspot.com/2013/06/british-pound-and-independant-sco...

Wed, 08/13/2014 - 22:41 | 5090558 hedgiex
hedgiex's picture

On China - How is clearing the system from corruption a bad thing ? The state owned enterprises (SOE) are dominant across all sectors and there is no large private sector in this economy. These SOEs are also rightly reformed targets with overbloated bureaucracies and subsidised/protected and not competitive in the free markets.

So any measures to reform the economy and stabilise the politics for China's long term benefits are to be bashed because it is China ?

 

 

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