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Goldman Warns "The Global Economy Is Going Round In (Smaller & Smaller) Circles"

Tyler Durden's picture




 

Amid the collapse in commodities, crashing Chinese stocks, the weakest US wage growth in US history, and a data-dependent Fed; Goldman Sachs fears the new normal is 'shorter-and-faster' business cycles with no persistence primed by monetary policies. Most wprryingly, they conclude, will short business cycles beget shorter business cycles?

 

 

As Goldman notes,

Cycles: Shorter and faster

 

Another factor keeping capex weak is poor visibility on global growth.

 

The rate of change in our economists’ Global Leading Indicator, which tracks ten early indicators of global activity, suggests that cycles are becoming shorter over the last few years, i.e. neither positive nor negative data points persist for too long.

 

This uncertainty provides a reason for companies to delay long-term capex and instead opt for as-a-service alternatives that provide greater flexibility. But, extending this argument on outsourcing capital intensity to its extreme would also imply shorter capex cycles for the users. If the advent of ERP software led to more efficient supply chains and shorter inventory cycles, we wonder if the rise in tech-driven services business models could do the same for capital investment cycles.

In other words, will short business cycles beget shorter business cycles?

 

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Fri, 07/31/2015 - 20:45 | 6377473 Scooby Dooby Doo
Scooby Dooby Doo's picture

Eau de toilette.

Is it ok to have your hot water line run to the toilet?
https://answers.yahoo.com/question/index?qid=20110510084400AAtUPa0

Only in the USA Bitchez!

Fri, 07/31/2015 - 21:19 | 6377549 pauhana
pauhana's picture

Circling the drain.

Fri, 07/31/2015 - 22:09 | 6377673 38BWD22
38BWD22's picture

 

 

I am going to *guess* that the recent data so close to both the 0% on both the Y-axis and X-axis have relatively high errors.  

Measurement errors would probably be relatively high as well.

Anyone with a graduate degree in Statistics please comment, as G-S appears to have methodology errors here that invalidate their graph...  Yet Goldman claims to hire "the best of the best".

Sat, 08/01/2015 - 00:35 | 6377921 old naughty
old naughty's picture

in a digitized world market,

wondering if circling the drain goes clock- or anti-clockwise, at same speed?

stawks falling faster and deeper...guess close to the hole?

Sat, 08/01/2015 - 04:48 | 6378105 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

Creative accounting.

Fri, 07/31/2015 - 23:19 | 6377810 Ultimate_Warrior
Ultimate_Warrior's picture

my roomate's sister-in-law makes $72 every hour on the laptop . She has been unemployed for nine months but last month her pay was $12384 just working on the laptop for a few hours. find out here... www.earnmore9.com

Sat, 08/01/2015 - 09:08 | 6378232 doctor10
doctor10's picture

Too damn much government. Too many monopolies. No rule of Law

Taxation, licensing,insurance requirements, regulation, monopoly competition-all has made being a small businessman a waste of time.

Too much centralized critical data, coupled with regulation of how you are to do what you do, means your market edge is basically non-existent as effective competition with much larger outfits is prohibited.

its called a "Dark Ages" something the world has not had to grapple with since medieval times.

somebody needs to re-boot

Fri, 07/31/2015 - 20:47 | 6377476 stant
stant's picture

My dad said that a good bizznez man knows where he's. Gona be 6 months to a year from now in this trade These day 3 months tops

Fri, 07/31/2015 - 21:01 | 6377510 Winston Churchill
Winston Churchill's picture

Supposed to be 5yrs,12 months and 90 days planning wise.

After Q1 down 20% os sales yoy, I finished H1 20% up yoy.

I'm feeling seasick, and I've never been seasick, even in a force 12 in the Bay of Biscay

clearing up everone elses vomit because I was the only one not sick.Fun memories aside,

you cannot plan shit,and its only going downhill from here.

Fri, 07/31/2015 - 20:51 | 6377486 Hugh G. Rection
Hugh G. Rection's picture

Swirling like a turd in the toilet!

Fri, 07/31/2015 - 20:56 | 6377499 asfffasfff
asfffasfff's picture

direct hit

Fri, 07/31/2015 - 21:02 | 6377512 insect0man
insect0man's picture

Hmm. Sort of like when A$$paper gets flushed down the sewer pipe?

Fri, 07/31/2015 - 21:03 | 6377515 aerohelo
aerohelo's picture

Zero Hedge - great analysis and commentary.

Fri, 07/31/2015 - 21:04 | 6377520 Yen Cross
Yen Cross's picture

 The squid is running out of prey to feed on.... Bitchez

 Mario Draghi and Jean-Claude Juncker hanging from piano wire would make my day.

Fri, 07/31/2015 - 21:22 | 6377563 Winston Churchill
Winston Churchill's picture

By their testicles first.

Fri, 07/31/2015 - 21:27 | 6377574 Yen Cross
Yen Cross's picture

 Sounds good to me Winston.

 Are you getting some of those inverse bond trades yet? (shorting corporate debt) The premiums are still reasonable.

 

Fri, 07/31/2015 - 21:47 | 6377623 Winston Churchill
Winston Churchill's picture

Thinking about it, how to structure them if I do.

Sooner or later they are going to shut down shorting here if it gets bad enough.

Its whether you can actually get any profit out, and the PTB are going for a clean sweep this time

around, or the FedRes will start buying toxic corporate debt which is just a  RMBS redux.

They can, and will, change the rules mid game.

i may just sit it out, tempting as it is.

Fri, 07/31/2015 - 22:18 | 6377687 Yen Cross
Yen Cross's picture

   I'll be around tomorrow Winston. I think you're GMT or GMT+1.

  I'll open my Z/H chat and forward my info to you if you want. I do it at the 4:oo pm fix London. That would make it 7-8 am my time.

 

Sat, 08/01/2015 - 17:30 | 6379503 venturen
venturen's picture

add Geithner, Paulson, Lew, Yellen, Holder, Bernanke then you would be getting somewhere

Fri, 07/31/2015 - 21:17 | 6377544 Atomizer
Atomizer's picture

Lloyd, does your toilet flush; in a right or left swirl pattern? We have Kenyan tea leaves to predict how the turd flows down the toilet. We are banking on new derivative bets. 

Left or right?

/lol

Fri, 07/31/2015 - 21:24 | 6377558 Yen Cross
Yen Cross's picture

  Is this an excuse or an explanation?

 

Cycles: Shorter and faster

 

Another factor keeping capex weak is poor visibility on global growth.

 

The rate of change in our economists’ Global Leading Indicator, which tracks ten early indicators of global activity, suggests that cycles are becoming shorter over the last few years, i.e. neither positive nor negative data points persist for too long.

 

This uncertainty provides a reason for companies to delay long-term capex and instead opt for as-a-service alternatives that provide greater flexibility. But, extending this argument on outsourcing capital intensity to its extreme would also imply shorter capex cycles for the users. If the advent of ERP software led to more efficient supply chains and shorter inventory cycles, we wonder if the rise in tech-driven services business models could do the same for capital investment cycles.

  These ideas and practices have been around since the 90's. Is GS suggesting that, by reducing production it will raise demand in the "suppy chain". Is GS finally capitulating, and realizing that they're a passenger on the "run away financial monstrosity" They created?

Fri, 07/31/2015 - 21:25 | 6377567 WTFUD
WTFUD's picture

Goldman is running the whole Western Bank Pyramid Scheme (BPS) and so any 'warning' should be treated with a healthy disrespect/disdain/contempt.

It's like a rape victim falling in love with their rapist.

Fri, 07/31/2015 - 21:32 | 6377588 buzzsaw99
buzzsaw99's picture

business cycle. stick it up your ass squidly.

Fri, 07/31/2015 - 21:33 | 6377589 Atomizer
Atomizer's picture

Lloyd won't know the axis of proximity to his turd, north, south, east, or west. We win the bet. 

How's does it feel to get fucked Lloyd? 

Fri, 07/31/2015 - 21:34 | 6377591 Wahooo
Wahooo's picture

Isn't this what happens if you near a black hole? Faster and faster until time ends?

Sat, 08/01/2015 - 14:15 | 6378978 NeoLuddite
NeoLuddite's picture

Like the now extinct foo-foo bird - flying in ever decreasing circles untill it disappears into its own asshole.

Fri, 07/31/2015 - 21:58 | 6377653 Cloud9.5
Cloud9.5's picture

Ever increasing oscillation within a closed system is a precursor to collapse.  Think of a top losing its spin.

Fri, 07/31/2015 - 22:30 | 6377720 Fukushima Fricassee
Fukushima Fricassee's picture

Please let it come. Until this damn government goes belly up and bounce EBT cards they will keep living the high life off productive private sector backs. By the way All Banks , some Retail (EBT supported) and any other subsidized mother fuckers are not private sector.

Fri, 07/31/2015 - 22:44 | 6377743 A_Gobshite
A_Gobshite's picture

So it like a swirlie?

Sat, 08/01/2015 - 00:22 | 6377910 HardlyZero
HardlyZero's picture

The larger and smaller picture looks like a human brain, and now its attracted to the center.

Hope it works out for the patient.  

I agree it looks unstable since it is 'going to zero'.  Null, zero, and black hole don't have healthy economic implications.

Sat, 08/01/2015 - 11:52 | 6378592 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

Agreed, did you see that worrisome spot on the amygdala?

Sat, 08/01/2015 - 01:58 | 6377801 roodeetoodee
roodeetoodee's picture

Clearly a piss take right? Its like an ass and thighs bent over a chair. When does it all get fucked again?

You know it's all going belly up when a grubby gold mans sphincter gets passed around  for  'anal'ysis.

 

Sat, 08/01/2015 - 00:59 | 6377944 holdbuysell
holdbuysell's picture

By 2018, the Fed will need to raise the interest rate in the morning and lower it in the afternoon. /s

Sat, 08/01/2015 - 12:01 | 6378611 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

of course Goldman et. al. will front run the moves by milliseconds to capture maximum arbitrage.

Sat, 08/01/2015 - 01:16 | 6377960 Maestro Maestro
Maestro Maestro's picture

INDICTMENT

Americans are criminals because Americans violate the Constitution of the United States of America.

The U.S. President Obama, the entire U.S. Congress, the CIA, the FBI, the U.S. Military, and the entire Police Force of these United States SWORE to protect, serve and uphold the U.S. Constitution.

The U.S. Constitution forbids usage of debt as money (referred to as 'notes') and stipulates that only gold and silver can be used as money.

Yet,

Americans commit or support and condone the murder and torture of human beings throughout planet earth in the name of democracy and freedom, all for the sake of acquiring Constitutionally fraudulent and illegal Federal Reserve Notes a.k.a (counterfeit) U.S. Dollars.

Since the United States is a democracy and Americans only elect Democrats and Republicans who perpetuate this unlawfulness,

Americans are indicted criminals according to the United States Constitution.

Spread the word.

Sat, 08/01/2015 - 12:13 | 6378654 Not My Real Name
Not My Real Name's picture

The United States is a Constitutional Republic, not a democracy. Well ... at least it used to be.

Sat, 08/01/2015 - 22:35 | 6380275 roodeetoodee
roodeetoodee's picture

It's laughable that you think the American people actually control anything. And btw pretty much all our armies have comitted grotesque acts of one form or another and you know what they say about those in glass houses right....?

 

 

Sat, 08/01/2015 - 01:37 | 6377977 idontcare
idontcare's picture

So those math wonks at Goldman finally understand Boltzmann.  

Sat, 08/01/2015 - 04:03 | 6378072 Batman11
Batman11's picture

Capital expenditure always dents short term profits.

Cost cutting boosts short term profits; ie: reducing staff.

When the number of staff reaches zero the company has ceased to exist.

HFT means one second is a long time frame.

A market dominated by HFT algorithms has no mechanisms to look at the long term.

When the profits are hit by Capital expenditure you sell, when the profits start coming back in you buy.

A market based on short term profits drives all companies to extinction in the long term.

 

Sat, 08/01/2015 - 04:51 | 6378107 GreatUncle
GreatUncle's picture

I wish the likes of Goldman would shut the fuck up, JPM and the rest too...

Their actions and their kind are killing the global economy because as they take more and more there is less to go round and this continuing cyclical contraction occurs. Up pops a central bank, hey print the value but you snaffle this also by electronic transactions as all money held digitally is NOT YOURS it is the banks until you remove it.

This creation of fiat and increasing value to support sovereign debts, the real economy IF IT DOES NOT GROW IN REAL TERMS and relatively remains the nominal same you now have a much larger value to support off the real economy. SO YEA GOLDMAN, IT WILL SLOW AND FOR ALL THE NEWLY FIAT CREATED EVERY DAY IT WILL KEEP SLOWING. CALL THIS THE GREEK CONNUNDRUM, BECAUSE THE GREEK REAL ECONOMY CAN NEVER SUPPORT A BAILOUT YOU WENT ALL IN ON DEBT AND LOST! PERIOD GAME OVER.

Wonderful system you got there, you have now moved to CTRL-P forever, but central bankers are now caught even stocks will find a ceiling on the maximum earnings possible and hence value they can achieve. All the fake pieces of paper out there, unreal derivatives are becoming based on fiat not any real resource.

THIS BECOMES DEADLY that the next 2008 exposes this massive bailout of fake value of today and wildifre contagion begins. This stupidity Diocletian did under the Roman empire that the massive counterfeiting of value is prepping the contagion of collapse. Fiat burns readily with a spark in this joined up world.

*** SOLUTION AND JUSTIFICATION ***

To stop this contraction, take Goldman, remove half their wealth, cap the maximum the likes of these people can ever have in half and just hand the value to any large number of people (no hoarders) you want and do not print any fucking more. The baseline of the real economy rises and they get their hands cut off if they attempt to touch it. This was the game that was supposed to be played under capitalism but Goldman moving to direct handouts through market manipulation became socialist parasites.

WHY SO BRUTAL?

This is the game played for so long now and each time because it is the same mechanism they use we come back to the same position.

Sat, 08/01/2015 - 09:13 | 6378237 ajkreider
ajkreider's picture

The expansions in the U.S. seem to be doing the opposite - getting longer and longer, but shallower.

Sat, 08/01/2015 - 20:02 | 6378474 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Goldman Sachs is bang on with regard to the Hegelian Spiral of contraction. Clearly, the 'growth model' pre-2008 was salted by the Greenspan put, but since 2008 it is inverted and poised to absofuckinglutely wipe Ponzi Casino Capitalism off the face of the planet. And the Goldmanites know it all too well now. Frankly, if Goldman et al keep waiting around with their thumbs stuck up their butts there will be major costs for that delay.

 

End the FED, Goldman Sachs, there is no other alternative other than economic suicide, you assclowns. And this means a complete Global reset, not a tweak.

 

 

 

Sat, 08/01/2015 - 11:23 | 6378506 thecondor
thecondor's picture

Looks Like we are literally circling the toilet. 

Sat, 08/01/2015 - 11:37 | 6378549 moneybots
moneybots's picture

"Goldman Warns "The Global Economy Is Going Round In (Smaller & Smaller) Circles"

 

The last recession was in 2008.  That was 7 years ago. 

Sat, 08/01/2015 - 12:03 | 6378613 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

The patient appears to have a worrisome spot on the Amygdala.

 

Sat, 08/01/2015 - 13:28 | 6378830 Chuck Knoblauch
Chuck Knoblauch's picture

Liars don't go to heaven.

They suffer in hell.

Jesus pierces the corporate veil.

Judgment Day.

It comes like a thief in the night.

Goldman should know.

Sat, 08/01/2015 - 14:26 | 6379007 monad
monad's picture
Goldman Drives "The Global Economy" Around In Smaller & Smaller Circles
Sat, 08/01/2015 - 16:08 | 6379097 PrimalScream
PrimalScream's picture

DEAR HFT TRADERS (and others) ....

Yes, the global economy is spinning in smaller and smaller circles ... it is sinking.  Do you think there is a REASON for that? Let me suggest one major cause - A LACK OF SPENDING ON PRODUCTIVE FACILITIES AND IDEAS that actually make the world a better place.  You have to admit, when traders bounce billions of dollars into markets, and then bounce them back out 1 millisecond later, we are not really doing anything constructive, are we?  Ohhh yes, you might be raking in handsome profits from this.  But we are living in a world with 7.3 billion people, and you haven't added one breadcrumb to the food supply.  So we have to ask one big question :- Can you name "anything" that you have done recently that really could make the world a better place - a place more liveable for average people? 

 

Sat, 08/01/2015 - 16:25 | 6379317 TBaggerVance
TBaggerVance's picture

Ever look at a Fibonacci spiral?

Sat, 08/01/2015 - 17:29 | 6379498 Magooo
Magooo's picture

In other words we are approaching the pushing  on the string phase:

 

http://granitegrok.com/wp-content/uploads/2013/01/Bernanke-String.jpg

Sun, 08/02/2015 - 01:17 | 6380559 turtle
turtle's picture

Would be great to see some historic GLI graphs PRIOR to previous collapses eg. 1998 - 2008.

Anyone know any links? cheers 

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