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Steen Jakobsen Warns "First It Will Get Worse..."
Submitted by SaxoBank's Steen Jakobsen via TradingFloor.com,
- Strike at the heart of western civilisation represents new phase in IS strategy
- Financial markets not prepared for the geopolitical risk to come
- Clash of ideologies means it is likely to get worse, before it gets better
- Ignorance of major political events can not be allowed to continue
I have never liked having to comment on incidents of terror like that which hit Paris 12 days ago, but unfortunately too often I have had to do so since 9/11.
There are no words covering the loss people in France have experienced. It makes no sense and neither will it ever.
France is strong and it will recover but the loss will forever remain unjust through acts of cruelty and cowardice. Bless the lost lives and their families.
The market impact will be limited. Of course, this is an event which will not benefit the market, but neither will it stop France, Paris or the markets.
We have come to ignore geopolitical risk in markets for the statistical reason that they rarely, in recent history, have impacted the ability of the market to go from strength to strength.
Whether this has to do with a policy response which at all times has been lower interest rates or a fundamental tendency to put too high a risk premium on events is too early to tell, but I am increasingly believing it's the lower rates which is the driver.
I have been in the market since 1990 and I have only seen three hike cycles from the Fed: 1994, 1998 and 2004. Many of today's traders and analysts have never seen a rare hike. Talk about one-way traffic.
The world is changing in so many ways which is ignored by markets and commentators. I see this on my global travels, writing this on a bus heading to Tokyo on a morning where Abenomics failed. Japanese GDP just landed in another recession with a quarter-on-quarter GDP print of minus 0.2%.
The US Federal Reserve will hike unless S&P breaks 1,900 before Christmas and we are about to feel the true pain of too much debt and no reforms.
In other words, as the last 18 months rise in the cost-of-capital has shown, the headwind from rates is rising and hence the support for geopolitical risk has fallen.... Meanwhile I'm afraid that Paris may only be a first look at the fight of civilisations.
Last weekend's Paris event could be the beginning of the end for ignoring geopolitical events. The fact Islamic State took responsibility is a major change of its modus operandi. Traditionally its terrorism has been limited to the area it controls in Syria and Afghanistan but now it has gone global in its fight.
Some military observers will put this down to ISIS losing control vs. Nato and US led bombing and that may be the case but that only makes Friday's events in Paris even more concerning for me.
A friend of mine from Paris said to me this week that it will get worse before it gets better. The Pandora box opened by the Iraqi war will not be shut down anytime soon.
The ability to execute six simultaneous attack shows how little ability we have to monitor communication despite more and more intrusion on privacy by authorities.
FBI Director James Comey recently predicted this could happen talking about how encryption meant that intelligence services was 'going dark' .
We have never been more monitored and never been less private, yet the ability to preempt terrorism seems low.
Maybe technology is not the answer? More jobs, less debt, less inequality, more, far more education, more belief in people and perhaps less in machines is the answer?
We live an era where the most successful people and businesses create a social virtual reality, where updating your social status is more important than manners, respect and thinking.
I think the Paris event is yet another wake up call for the markets on geopolitical risk, for the under-investment in education and basic research, but most importantly for how we continue to ignore facts. The Iraqi war, Syria, Lebanon, refugees, inequality, an absence of reforms, debt-driven societies and a lack of education and productivity.
I remain optimistic on our ability to deal with crisis and loss but my friend from Paris is right... First it will get worse.. we are simply not prepared for geopolitical risk to matter for markets neither are we yet willing.
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It will get worse - there is no end to Neocon wars. Already at least 5 million dead in the balkanization of the Middle East:
BREAKING: ‘Turkish jets gave us no warning before shooting’ – rescued pilot of downed Russian Su-24 http://on.rt.com/6xk7
leaked video....tick tock boom
You might need an acoustic guitar player in your group.
Moar illunimatti crapola
"rare hike" - Indeed.
Right, Mr. Knukles. Illuminati are benefitting whom, though? As they say, Cui Bono? Not the so called "ISIS" or any civilians anywhere in the vicinity of ISIS. So whom? Go ahead, say it! I think you know already.
'We live an era where the most successful people and businesses create a social virtual reality, where updating your social status is more important than manners, respect and thinking.'
.
We have never been so technologically connected, yet spiritually we are decaying rapidly.
.
How is it possible that everything beautiful, pure, natural on this planet is completely being flipped on its head and made sick...and whats sick is being promoted as healthy and normal. What in the flying fuck.
I see it everywhere. It is expressed in how people drive, shop, beat each other out for a table, etc. We are becoming more rude and disrespectful progressively faster. I live in what used to be a very conservative, polite city- Cincinnati. Now, two different people both relayed the same story of being cut off and flipped off by idiots while driving on the same stretch of beltway. There is a shooting every day in the city- sometimes multiple. I left NYC 35 years ago to not live this way. Now where do I go?
NATO drills have started today in western ukraine
Amazing how little real insight you have to impart to be featured on Zerohedge these days.
I'm just glad none of this can affect the price of my stawks.
so btfd then?
So the basic point was in the title?
Let it happen. Chickens coming home to roost, and all that. We are powerless to stop it. When has any society been able to correct its course?
"The US Federal Reserve will hike unless S&P breaks 1,900 before Christmas"
I'm starting to wonder if they aren't pre-emptively propping (vs reactively ppt-ing) so they CAN liftoff? this ramp we've been seeing doesn't make any sense to me no does the typical intraday pattern. I know it sounds tinfoil-ish but honestly, can ANYTHING be said to be implausible in late 2015?!?
You're not allowed to say that "C" word anymore in the United States; might offend someone.
What? "Colored" people?
It is "People of color" rather than "Colored People".... Geeze...
Yes we *an.
Another sign of the times.
Women - Fights - Tats
http://www.dailymail.co.uk/femail/article-3331618/Inside-FEMALE-fight-cl...
You're referencing the Daily Mail. Your argument is invalid.
Have to reference something. You can't make this shit up. You don't have two.
A sign of the times, or a sign of East Germany?
Been to Wal Mart lately?
Part of the freak show. I say if this truly is not the end times, just imagine how worse it continues to get.
Buy the dip...always works. Fed has your back. Easy money.
"Ignorance of major political events can not be allowed to continue"
I'm sorry Steen. The Ministry of Truth will not tolerate the masses and sheep to pay attention to political events and facts.
In Ireland people go on Facebook simply because they have no company tokens for the pub.
You must realize over half of the tax collected in Ireland is not respent into the state.
This Usury adds about 50% ~ to the price of basic goods.
Are your bankers in jail yet?
"YOUR bankers"
They are not mine.
They own the state apparatus since Tudor times at the very least.
I keep saying there is really no we business in this game.
The state be it a national capitalistic or european market state is a artificial construct in people's heads.
Humans are designed to work in a village atmosphere where there is 100 to 150 people in close contact with each other.
When you scale up your "village" beyond that things progressively begins to break down.
Ps all Capitalistic states overpay for goods to sustain usury.
Would agree and the evidence can be seen by everyone . The human condition cannot work with more than 150 people in their lives at the same time. Even on FB people are chatting with less than that on an everyday basis
Ronnie Reagan's Grace Commission found that most of the Federal Income tax is spent on Debt service. That is about 1/3 of my income on a weekly basis. One Giant Scam.
We live an era where the most successful people and businesses create a social virtual reality, where updating your social status is more important than manners, respect and thinking.
OK, So please tell me something that I don't already know. Loss of religion, central gov't controlled schools, dependence on technology,etc. and now we are seemingly in this inescapable, dumbed down country listing to the left and getting ready to roll over. Well, who could have predicted that?
Social media is a direct offshoot of Austerity
Austerity is merely the rationing process required to sustain the consumer war economy.
2014
Tax collected in the state: 41.7 billion
Tax not respent in the state: 21.1billion........
How about stopping terrorism by stopping intelligence agencies from committing them?
This goy still believes in IS? lol
second, it will get worse-er.
We need a zh song, tell me something that's not obvious.
The Auld Triangle.
Die Fahne Hoch
Wasn't this guy Steen Jacobsen predicting $1,400/oz Gold price "by year end" several months ago?
I like what billionaire Nick Hanauer had to say in a Politico Magazine Article:
http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014
“….And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last. …”
“… If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when. …”
I agree with Nick. I firmly believe this system will not last past 2030 with major disruptions every few years as it falls apart.
It appears that that this guy, Steen Jakobsen, takes the events of 9/11, and now Paris, at face value.
This I find hard to believe. I find it insulting that he believes that we will fall for the ploy.
"The ability to execute six simultaneous attack shows how little ability we have to monitor communication despite more and more intrusion on privacy by authorities.
"FBI Director James Comey recently predicted this could happen talking about how encryption meant that intelligence services was 'going dark'."
Yeah, right. In that darkness lies our liberty.
As for Steen, all I can say is this: if you really want to monitor communications of the people who planned SIX SIMULTANEOUS ATTACK (sic), I suggest that you begin monitoring the inter-office memos of the bucreaucrats of Langley, of the French Securete, of M-16 in London, and of wherever the hell it is that Mossad murders hang out during the day.
Bullish worse
Steen?
Opportunities for contagion include all interactions of politics, economy and finance. All 3 are at maximum flux and turmoil.
These are my last 5 posts.
https://thinkpatriot.wordpress.com/2015/11/22/if-windows-crashes-wwiii/
https://thinkpatriot.wordpress.com/2015/11/20/ghandis-terrorists/
https://thinkpatriot.wordpress.com/2015/11/18/you-who-allow-yourselves-t...
https://thinkpatriot.wordpress.com/2015/11/15/for-world-peace-arm-your-n...
https://thinkpatriot.wordpress.com/2015/11/14/in-reality-everything-is-c...
And GEOLOGIC risks like a West coast 9.0
Steen Jewkobson, controlled opposition.