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Is This The Real Growth Scare That Markets Fear?
'Everyone' knows that the Japanese economy is weakening (apart from Abe and Kuroda obviously), 'everyone' knows that the European economy is tumbling towards another recession, 'most' know that China is really slowing (no matter what the magic of excel enables GDP to be)... and 'everyone' knows that the US economy is the cleanest dirty shirt, will decouple from the rest of the world, and thanks to endless extrapolated dreams, will lead the world to escape velocity. Except... recent macro data suggests otherwise...
The US is hockey-sticking higher as the rest of the world's economies slump... phew thank goodness for that!!
But... we hate to steal the jam from the market's all-knowing donut, but recent US macro data suggests GDP growth may be slowing here too...
Without the mirage of American growth - how will equity market valuations ever be achieved...
So, given the recent jawboning, it seems the Fed is in panic mode to either a) revive the "recovery is on and that's why we're tightening" meme, or b) fold, and retreat back to QE, tail between their legs and admit that's all they have left to juice nominal growth...
Charts: Bloomberg
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It will be QE until bust. It's a no-brainer.
I agree...let the presses RUN!
QE-1000
fueled by high octaine HOPIUM...
a) revive the "recovery is on and that's why we're tightening" meme, or
b) fold, and retreat back to QE, or
c) MOAR war.
C...you can bank on it.
linguistic efficiency diktates you shorten Moar War to the expression WOAR
If bamy and that Freidman guy head of the CDC would issue a nude selfie a la Tony "the Boney" Weiners, with a tag line "# my Filovirus worm is bigger than your Filovirus worm", then it would be said that "Something has been accomplished " compared to the clusterfuck now ongoing.
So the CDC has ONLY NOW decided that in every state, a single hospital should be designated for treating Ebola like symptoms.
1. Makes sense*
2. Don't panic just became panic
3. This is the kinda shit they're paid for and have so far naught fuck-all nada zip zilch even considered.
Our tax dollars at Waste
* (to the tune "Tommy") welcome to the camps ..... we bet you all know why you're here .... you're sick or a dissident .... but yer sure gonna disappear
Q: Will they provide death certificates so that unlike Nazi Germany, the relatives might properly claim all property or will it revert to the state?
Oh, what I meant to say before I got ever so distracted, is that the real scare is here and could soon impact the economy quite nicely, thank you. First to the upside as people try to stock preps... canned goods water, etc. Then to the down as 1) spending has already been pulled forward and 2) people try to shelter in place once the stuff gets "close to home"
They will steal the dead people's property, IMO. A relative of mine died in January. The state didn't send the DC for nearly 8 months. This was a death from old age, not anything unusual. We already had the property and accounts 'set', but this won't be the case for young folks not expecting to die for decades. A perfect oppurtunity for the state(banking puppets) to steal and redistribute.
looks like they might do it on Oct 16th. unscheduled meeting between FOMC members usually means they are panicking.
That "World GDP 2014" looks pretty weak. And not just what they think, but interest rates are low, shipping rates are low, bulk commodity prices (oil, iron ore, corn, etc.) are low, especially in 2014. Hmm.
"Deflation First, Then Inflation?"
http://goo.gl/NRArHa
most likely, yes. The (illusion of) solvency of most western nations is maintained by 2% inflation forever. What we have now is a BS CPI, where things like food go up much faster, but delicious Ipads keep getting cheaper(you can eat those, right?), but they are able to finance their massive ammounts of debt with this inflation. The moment it goes away, they will all start printing. Hard to imagine they can get away with it again without causing runaway inflation
deflation first, then inflation...
that pretty much nails it...
plan accordingly...like for the biggest black market EVER SEEN...
http://www.youtube.com/watch?v=dKYM62qSA_0
who needs solvency when you can create liquidity?
/sarc
Why the sarcasm? If you have are loaded with liquidity (oil or natural gas well) why do you care how much debt is thrown your way?
So long as your liquidity is sufficient bankruptcy is the Bank's problem not yours.
Central Banker's Strategy: If they bust first, we get more time.
But what happens when the Central Bank owns everything? Would that be a communist regime or a fascist one? Hmm decisions, decisions. Either way us normal peeps are fucked.
Live Die Repeat
Irregardless of the Fed. policy choices, I see the USD flushing down the shitter.
If the Fed. prints, flush that fiatski. If the Fed. raises rates, equity markets eat a turd, and you can flush the fiatski.
I see USD getting stronger
QE ending (liquidity problems)
but no rate rise (outside of few possible "ceremonial" increases)
we'll win (for the time being) cleanest shirt in the hamper (everyone else printing as their economies implode first)
I was with you a week ago.
USD broke down last week and followed through today.
Keep an eye on USD/CAD and my favorite: USD/HUF
Then why didn't the usd strengthen today? I'd say today was a pretty good "dry run" for the usd. There's no way Oil will be allowed to continue trading the $85.00 handle. There's way too much at risk for the deficite, and trade imbalances.
Energy is one of the few bright spots the U.S. economy has going for it.
I agree with you YC and don't. Don't fight the tape in my opinion, in addition to supply considerations. ...i don't think $84 WTIC holds. It in part explains the crushing of the $ CDN. And so in the same breath i see the $ CDN correcting further. Unless of course the FED ellects to print. But since the US is and always will be a net importer of oil i don't see the benefit to holding a price floor on it at the expense of your currency. It just creates price inflation domestically.
Its 08 all over again. Yields on the 10 year will go negative then they will fire up the presses. .... in my opinion.
I can see the cad being bought on usd weakness. I like aud more, because of the credit rating and interest advantage on the carry.
I also think the Asia unwind is getting tired. The PBoC has problems but the Chinese equity markets are oversold on the "SHORT TERM" charts.
I think your trade idea/thesis makes very good sense. ;-)
Damn you're right YC. Aussies actually have attractive rates! I remember in 06. I was checking into their foreign deposit rules because their savings rates were so attractive....... something like 6% or better back then. Don't knew about now but probably relatively the same spread. I get nothing for saving now.
It's fucking retarded but that's a discussion for another time and remains the primary reason why i come to this site. helps me keep my sanity. That I'm not the only one that thinks this"arrangement" is fucked.
One way or another, December is not going to be a pleasant month.
Everything over the last 2.5 years has been building towards a crescendo
at the G20 meet then.
Ebola seems to be whipped cream ,on to of the icing, on that cake.
No co-incidence that the Chinese admitted their true purchases of gold, a state secret,
now.
I hope I'm wrong.
I agree. December is looking dire. the elections will have been decided, so whatever short-term fixes were done will then unravel, and it is usually much worse that way.
Another Sandy Hook type 'event' involving Ebola. On a nation wide scale in order to derail Repub's in Congress.
Irregardless is not a word
October Surprise: Barry, meet Under The Bus.
Optimist.
HELP! Everyone needs help.
If another QE occurs before oil goes down to at least $50 and Saudis are openly helped against Iran, then world will simply go local.
Bye bye USD, bye bye world trade
We're talking uncontrollable chaos and assassinations
Hmm. ZH pulling my lines now:
https://twitter.com/zerohedge/status/521781037173841920
GDP to get a big boost thanks to the no-boots war in, well, damned near everywhere in the Middle East, near as I can tell. NOBODY spends more money blowing up empty buildings in the desert than the US unleashing it's cruise missile arsenal. Millions at a pop. Plus those F16s and drones don't come cheap, fly cheap or drop cheap munitions, either.
Time to call up Raytheon and Lockheed for some GDP-boosting purchases.
corporate profits historically 6% of GDP
currently 11%
regression to mean in the cards
I believe most of the corporate profit gains are due to lower interest and tax expenses, followed by modest improvements in manufacturing efficiency. Regression would occur if interests rates rose (better chance of Christ entering Jerusalem tomorrow) or global business suddenly had a global tax increase (not for as long as $1000 lobbying/campaign dollars equals 0.001 vote. The available population continues to grow, so I dont expect labor to suddenly be in position to demand more pay. So only if automation took a big step back would profits go down. Know what? This scenario has more chance of happening, as explained by increasing executive comp than any other rationale.
I am not sure if data matter. Fundamentals didn't matter the last 5 years and it seems now they don't matter either.
Maybe simply not enough "people/machines/CBs" feeling like buying stocks anymore.
For no particular reason.
At one point in time this day had to come, or no?
Japan is in total capitulation mode... They have pretty muched played out their cards and left their debts so high the declining population has no chance to ever recover. They also still have the Elephant in the room " Fukushima" which even ZH isn't talking about anymore yet the situation has become more dire then ever. 300 tons of radioactive water is being dumped daily killing the Pacific ocean and all their storage tanks are starting to leak with no real solution in sight. I say forget about EBOLA, the situation at Fukushima could easily dwarf the Ebola pandemic if any of those plants decide to go criticality..
"... the situation at Fukushima could easily dwarf the Ebola pandemic if any of those plants decide to go criticality..."
I really hate to be the one to have to tell you this but ...
nuclear disaster at the Fukushima I Nuclear Power Plant on 11 March 2011, resulting in a meltdown of three of the plant's six nuclear reactors.[6]
Supposedly the rods are still being cooled in the pools. If those rods, especially in reactor #3 and #4 decide to go up its all fricking over because if you didn't know already they contain high levels of MOX which yes is the P word...
And yes it will be airborne...no fricken bout a dout it...
A ~20 % correction will be needed before they restart "official" QE5 on top of all the back door printing they already do... Any news out of Belgium ?
It is clear that the prospects for Japan are lousy. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency.
This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world. They are past the point where they can return to a "free and fair market" interest rate marketing their bonds to the world and still be able to pay the debt service.
The moment the Japaneses stock market fails to rise enough to offset inflation and people realize even a weaker yen will not help we will see a tsunami of money fleeing Japan. This will constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html
As a Mexican resident - if you put cartels, illegal immigrants etc aside - things look pretty exciting for Mexico. Mexico's automobile manufacturing industry is going gang-busters - BMW, Mercedes, Nissan... Perhaps Mexico is the new Japan.
Edit : there is certainly no generational growth issue.
What happened to the dallor after the close?
another one bites the dust...
"The Catalan government has given up plans to hold a November 9 referendum on independence from Spain, a regional party leader told AFP.
Catalan President Artur Mas announced the cancellation of the November 9 referendum at a meeting between the parties seeking Catalonia’s independence and the regional government. The cancellation is because of a lack of legal guarantees, El Pais newspaper reported. Instead, the government will hold a public participation process ? a series of town hall meetings and debates ? on the political future of the province.
"The (regional) government has determined that the consultation can't take place," Joan Herrera of the Initiative for Catalonia, a political party in the province, told reporters following the meeting.
In the meantime, while the participatory process is finalized, the pro-independence groups will seek to get the most out of the provincial laws on consulting the Catalan people, which the Constitutional Court failed to suspend when it originally blocked the non-binding vote at the end of September.
The Catalan leaders temporarily suspended its promotion of the independence referendum on September 30, one day after the court’s decision. The regional government halted the campaign to avoid subjecting public servants to possible legal liability for defying the court, the Wall Street Journal reported at the time.
According to the Catalan government and Minister for the Presidency, Francesc Homs, the provincial leaders were to consider some preparations for the vote from October 13-15. He added that "there is no deadline” to decide if the vote will take place."
http://rt.com/news/195680-catalan-government-cancels-independence-refere...
anyone else notice the FOMC has added an "unscheduled" meeting on Oct 16th?
It seems they've seen what comes of their policy trajectory and have to devise a way to prevent it.
End the Fed!
No worries as that is also the date of an "Apple Event". I'm sure the Fed just want to meet, hope, and pray that uncle Timmy has a surprise that will allow Apple to save the markets and economy. But just in case Apple lays an egg, they'll be ready to fire what ever ammo they need to keep the party going.
Oh yeah I noticed that and wondered how the ol hag will keep up with this? She probably has to change her depends under garments at least twice a day as it is. I say long KMB, Shits gonna hit the depends..
Yes, agree, moar war is coming. With "growth" all but dead, the only remaining tools are wars and massive money printing. If the leveraged lemmings lose their faith in Fed, and a war distraction doesn't happen soon, all is lost. Elections in a few weeks will get Janet plenty of angry calls from the oligarchs and the politicians they control.
Those bears that have been patiently waiting for a 'black swan' to take the empire down, may get their wish, but may not like it. Ebola does not discriminate, it takes down the rich and the poor, the powerful and the weak. Once airborne it is over. The oligarchs can ride in their limos, but still have to share the air. They can flee, but it will follow. Fear will spread and even 'doomsday preppers'won't stand a chance.
go ahead and find out who is disporportionately being decimated by Ebola. you think it's the rich? try again. it discriminates because it is relegated to populations that come in contact with the infected. it's why piss poor countries in west africa are being victimized, but you hear nothing about Johannesburg. you think Soros and that Ebola guy in Dallas came together one day for drinks? not likely.
Ebola may eventually make its way to the upper echelons of the financial heirarchy, but they will definitely be the last to suffer in droves. the poor and middle classes? not so lucky.
Got your own island?
Ebola may eventually make its way to the upper echelons of the financial heirarchy, but they will definitely be the last to suffer in droves...
I wouldn't count on that. Personally, I don't have a lot of domestic help from the Third World polishing my forks and mowing my lawn for me.
you know ZH has devolved to fear porn when every second headline uses "Scare, Fear, Panic, Death etc" sometimes more than one of these in one headlne..sad reporting these days..the information is good..the delivery method is getting rediculous.
Money talks...
It's that old "fight or flight" thingy imprinted on our DNA. We just want to know which one berfore it's too late.
Infinite growth in a closed system with finite resources? Yeah, good luck with that.
If the Fed really has the gold, ALL IT HAS TO DO IT USE QE/printed $ to buy gold. Financial assets have grown exponentially for decades. The ONLY semi stable way to restore balance between the financial economy and the real economy is to revalue real assets in financail terms. The only certain (and the only certain, rapid path) is to take gold in USD terms up a lot. Doing so will end all the beggar thy neighbor currency wars and reestablish global balance.
so the appearance of asset "deflation" followed by hyperinflation...
sounds like things are right on schedule.
techs
Do you read Fofoa?
The Fed of course has no gold of it's own (it hold gold certificates and the US Treasury has the metal.) A new currency structured like the Euro would allow gold to function. It would have to be at a much higher price. The would not work with the dollar but if there was a 'new dollar' after the current one hyper inflates, that would work.
grandma yellen could you please try to normalize? please? just hit that button with your titie nipple and make things ok
Man you all worry to much tonight. The financiers are merely flexing their influence on the FED. This happened every time the FED stated they were going to move rates or cut off QE. Our markets no longer function as they should and most of you comment on it everyday. So what makes you think this baby is going to tank. The FED will just continue to print and Draghni will not have to worry about the courts as the FED will back him up. Commodities must go lower to keep this damn charade afloat. Now gold may be a different story.
But look around hell most of us scrape by with all the dam price increases in food and fuel. There will come a point in time where the sheep will indeed revolt. TPTB are just trying to get lower prices so they can continue to print.
Ebola is just a distraction to the real problems of the economy and the markets. I think and I hate to type this but a real war is coming or worse someone is going to nuke someone.
Kerry was in the Saudi to get prices lower and to reassure the dictatorship that the USA has their back and will step up our invasion of Syria. After all the Saudis want Assad out as well as Israel. The pipeline and refineries are being attacked not ISIS and the world knows this except for the stupid people that believe the media.
Get yourselves some good alachol or drugs and sit back and watch the show. There is not a thing you or I can do to change a dam thing except to do the best you can to protect what you have.
So the Israelis believe an ISIS gov't in Syria would benefit them?