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Unprecedented Global Monetary Policy As World Trade Volume Craters

Tyler Durden's picture




 

With the IMF cutting its global growth forecasts and signs of slowing evident in the dramatic contraction in World Trade Volume in the last few months, it is perhaps no surprise that the central banks of the world have embarked upon what Goldman Sachs calls an 'Unprecedented Alignment of Monetary Policy Across Countries'. Our earlier discussion of the European event risk vs global growth expectations dilemma along with last night's comments on the impact of tightening lending standards around the world also confirms that this policy globalization is still going strong and is likely to continue as gaming out the situation (as Goldman has done) left optimal CB strategy as one-in-all-in with no benefit to any from migrating away from the equilibrium of 'we all print together'. Perhaps gold (and silver's) move today (and for the last few months) reflects this sad reality that all your fiat money are belong to us, as nominal prices rise (but underperform PMs) in equities (and risky sovereigns and financials).

 

While the 25 year low in Baltic Dry is explained away by the simple over-supply of ships (as if that is a good thing) with little thought as to the near-record high inventories of Iron Ore and so on around the world, the reality as shown above is a world in which trade volumes are down dramatically. The 3 month rate of change has turned negative and that trend is accelerating as the 6 month average is about to turn negative - a very weak signal.

Goldman Sachs:- The 'Globalization' Of Monetary Policy

  • In this daily, we draw attention to the intensification of monetary policy coordination around the world.
  • We show that the magnitude of policy synchronization has been unprecedented since the financial crisis...
  • ...and it is still going strong in spite of some divergence across and within EM and DM central banks.

In their Daily strategy report Goldman draws attention to the intensification of monetary policy coordination around the world. We formally assess the magnitude of policy synchronization across countries and show that it has risen to unprecedented levels since the financial crisis and its aftermath. The recent trend of policy ‘globalization’ is still going strong in spite of some divergence across and within EM and DM central banks.

The Financial Crisis Prompted an Unprecedented Alignment of Monetary Policy Across Countries...

There are two basic kinds of monetary policy alignment: explicit coordination of actions (when central banks actually agree to carry out plans simultaneously) and coordination that occurs implicitly (when central banks respond to their own cycles, which are often synchronized, and the monetary impulse from others). Since the Fall of 2008, we have seen both in practice, which is not common by historical standards. We assess the magnitude of this global policy alignment with the following considerations:

Recent coordination agreements are unprecedented. In previous episodes---like at the end of the Bretton Woods system and through the late 1970s---the US did engage in coordinated actions with Japan, Germany, and other countries to fight inflation, but these pacts fell very short of recent actions. To name a couple of examples, the coordinated rate cuts by six major central banks in October 2008 were completely unprecedented (with the closest case being an isolated same-day cut announced by the Fed and the ECB in 2001); so have been measures aimed at liquidity provision, such as the exchange rate swap lines the Fed established with 14 countries back in 2008 (and as recently as in November 2011 with BoC, BoE, BoJ, ECB, and SNB).

 

There are tradeoffs. As with other types of international macroeconomic policies, central banks face tradeoffs when engaging in coordinated actions. A common scenario is that of a monetary expansion in one country that causes a real depreciation of the domestic currency and erodes the competitiveness of another. While this may boost domestic output temporarily, possible side effects include inflation, capital outflows, and distortions across sectors in the economy. In a context of global turmoil, and especially for open economies, the tradeoff becomes particularly cumbersome. In that case, coordination becomes the optimal strategy to alleviate funding stresses, liquidity problems, credit crunches, and similar pressures. Since many of the shocks in recent years have been large and global in nature, the tradeoff has been mostly resolved in that direction.

 

Academic answers are now more favorable to coordination. In fact, the broad conclusion from the early academic literature on this topic was that the gains from coordination were secondary at best (and certainly behind those from macroeconomic stabilization). But academic models eventually became more realistic, by explicitly incorporating issues like uncertainty, spillover effects, structural asymmetries, and idiosyncratic productivity shocks. The issue is often framed in the realm of game theory, where countries are pictured as players which weight the size of trade externalities, their perceived views of the world, their previous record of honoring agreements, and the advantages or disadvantages of committing to future actions. Generally speaking, factors like interdependence, coincidence in business cycles, the commonality of shocks, and heightened uncertainty, make it optimal for central banks to move farther away from inward-looking policies, especially during periods of global turmoil.

 

We assess global coordination trends using statistical methods. A formal yet simple way of assessing the degree of monetary policy alignment across countries is to pinpoint the components that best describe their overall behavior. We do this by running principal component analyses over policy interest rates, which allows us to measure the proportion of the variance in the data that can be explained by the first common driver, the second common driver, and so on. When the proportions attributed to the first few components are higher, it means that the underlying variable (in this case, the policy rates) are more synchronized or aligned with each another. The method also gives the weights that would be given to each country to form each component (which are often called the “loadings”). We focus our results on the proportion of variance captured by the first two components across different samples, but also look at the dispersion of those weights (measured by their standard deviation). Less dispersion means that all countries are proportionately contributing to the global trend. We ran our results for three samples: a group of six DM central banks which have recently engaged in explicitly coordinated policy actions (Canada, Euro area, Japan, Switzerland, UK and US), a broader group of DM countries (20 or less, depending on data availability), and a broad group of EM countries (25 or less, covering LatAm, Asia, CEEMEA, depending on data availability).

 

What we found is strong evidence that the financial crisis prompted a synchronization of monetary policy that is unprecedented at the global level. In comparison to the historical data, during the period Sep 2008-Dec 2011, the primary components have accounted for a much larger share of the variance in policy rates. The percentages are now 96%, 93%, and 86% for the G6, DM, and EM samples---which are substantially higher from their previous levels of 87%, 74%, and 75%, respectively. The proportion explained by the first component alone increased by 15, 30, and 16 percentage points, in each case. Moreover, the dispersion of the weights for this component more than halved in the recent period. Such dynamics are rarely observed in the data, and reflect the explicit and implicit policy alignment with which most central banks responded to the crisis and its aftermath. Of course, unconventional policies to provide liquidity or further ease monetary conditions, in addition to the currency swap agreements, further strengthen the fact that policy coordination has reached historical highs.

...Which Is still Strong in Spite of Some Divergence Across and Within EM and DM Central Banks

In a recent Global Economics Weekly, Kamakshya Trivedi and Stacy Carlson drew attention to the trends that followed the ‘Great Easing’ of 2008-09. As they highlighted, the normalization of policy rates that coincided with fiscal tightening is likely to turn into a renewed bout of monetary easing during the rest of 2012. In the global spectrum, this will likely be true for most economies, with the exception of countries whose commodity exposure makes them more resilient to a softening in growth, those which are reaching the limits of easing, and those which face diverging inflation expectations or higher inflation pass-through from currency depreciation.

On that side of the spectrum are countries like Colombia, whose central bank hiked unexpectedly earlier this week, while the majority of EM countries are instead closer to easing modes---especially larger economies like China and India. In turn, most DM markets are in line with the Fed’s recent extension of its conditional commitment to keep rates “exceptionally low” through late 2014, and many are likely to further expand their unconventional policies.

Our results show that the story of higher policy synchronization only partially weakens by restricting the sample to the latest period of Jul 2010-Dec 2011, which excludes the more intense segments of the crisis and the Great Recession. But the easing impulse during 2012 is likely to strengthen the alignment again. The extent to which this is true will depend on the pace and the degree of easing that countries will be able or willing to implement going forward. In the EM world, this will be visible mainly through further cuts in policy rates, but in DM, where countries are at or close to the lower bound, synchronization will probably take the form of extended liquidity support agreements or more unconventional policies.

 

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Thu, 02/02/2012 - 14:07 | 2120620 Popo
Popo's picture

" 'Unprecedented Alignment of Monetary Policy Across Countries'."

 

Also called "Circling the wagons".  Which is what you do when you're fucked.

Thu, 02/02/2012 - 14:11 | 2120636 HedgeAccordingly
HedgeAccordingly's picture

Volume is so low is redculous.. look at Crude  - http://hedge.ly/yx5qyI it cratered into 95.50 a BBL

ETF"s only thing providing intra day volume post the first 2 hour vol period. 

Thu, 02/02/2012 - 14:20 | 2120673 SMG
SMG's picture

Combined with this chart on declining world trade,

and the Baltic Dry:

http://www.bloomberg.com/quote/BDIY:IND

and the harpex:

http://www.harperpetersen.com/harpex/harpexVP.do

I really think economic RED ALERT is starting to flash.  We'll see.

 

Thu, 02/02/2012 - 14:42 | 2120679 hedgeless_horseman
hedgeless_horseman's picture

 

 

Synchronized diving.

I've been preaching it for a long time now.

Look at gasoline usage in the US...

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wgfupus2&f=4

 

Last week was 7,967...so short the tire companies !!!!!!!!!!

Thu, 02/02/2012 - 14:45 | 2120747 LawsofPhysics
LawsofPhysics's picture

LOL!  What does the world demand look like?  Who give a shit about the U.S. anymore?

Thu, 02/02/2012 - 15:22 | 2120893 LawsofPhysics
LawsofPhysics's picture

Nice visual, if only the sheeple were that asute HH.

Thu, 02/02/2012 - 18:07 | 2121414 Manthong
Manthong's picture

Has the BDI evaporated yet?

Fri, 02/03/2012 - 00:08 | 2122169 The Monkey
The Monkey's picture

I love it. Evans wants to blow a bigger capital gains bubble.

Good luck Charlie!

Thu, 02/02/2012 - 15:34 | 2120929 Poetic injustice
Poetic injustice's picture

And countries after USA liberated them are here:

http://www.afunnystuff.com/pictures/Funny-pictures/Overweight-donkey-car...

Thu, 02/02/2012 - 15:40 | 2120941 hedgeless_horseman
hedgeless_horseman's picture

 

 

Take a sniff...me thinks that link has a virus.

Thu, 02/02/2012 - 15:07 | 2120832 Randall Cabot
Randall Cabot's picture

Feb. 2, 2012, 12:05 p.m. EST

Russell run-up may be near end

by Thomas H Kee

More interestingly, a significant outperformance has occurred recently in the Russell when compared to the Dow. In recent days money flows have been moving out of the more conservative and dividend-paying Dow, and into the Russell. At no time was that more apparent than in the last 30 minutes of trading on Wednesday. Clearly, investors have a higher appetite for risk right now, but something else exists which is important to understand. There has been a steady progression to this risk-on trade, and the conclusion raises an important question.

Progression of the risk-on trade:

4. Eventually, money looked for a home in second-tier tech names, but that lasted only for a minute because the money flow suddenly moved to the Russell. That is where it is focused today.

All the while, the ProShares UltraShort Lehman 20+ Year Treasury, or /quotes/zigman/494682/quotes/nls/tbt TBT -0.07% , the 2x short ETF based on the long-term bond, remains 7.5% below where it was at the beginning of December. If the risk-on trade was widespread through Smart Money investors as well, one would expect Treasury bonds to sell off. Interestingly, that did not happen. Instead, Treasury bonds have held firm in the face of this risk-on rotation.

Furthermore, this risk-on rotation has been on light volume, and if the late-day action from Wednesday is any indication, it may be the same money chasing different equity-based assets in search of alpha. Not in all cases, but in many, big money seems to still be interested in low-yielding and almost fruitless Treasury bonds, and that tells me this rally will not hold for long.

In addition, if the risk-on trade started with conservative plays, and it has since progressed to the highest beta and most risky class in the Russell 2000 small-cap index, the risk-on rotation may also soon come to an end. No one in the media seems to believe it, but the writing is on the wall.

AUTHOR DISCLOSURE: Short Russell and Dow

 

 

 

 

http://www.marketwatch.com/story/can-the-russell-run-up-last-2012-02-02   

Thu, 02/02/2012 - 15:09 | 2120853 Jay Gould Esq.
Jay Gould Esq.'s picture

Very nice move in silver today.

Thu, 02/02/2012 - 14:15 | 2120653 Caviar Emptor
Caviar Emptor's picture

'Unprecedented Alignment of Monetary Policy Across Countries'.

Like Thelma and Louise, drive off the cliff together 

Thu, 02/02/2012 - 14:25 | 2120690 vast-dom
vast-dom's picture

more at it's much easier to manipulate cratering volume markets -- $kam planet.

Thu, 02/02/2012 - 14:52 | 2120776 Breaker
Breaker's picture

How many ounces in a barrel of oil?

Thu, 02/02/2012 - 15:46 | 2120963 blunderdog
blunderdog's picture

5376, but those are fluid ounces, while troy ounces are a unit of mass.

Thu, 02/02/2012 - 15:47 | 2120965 midtowng
midtowng's picture

don't worry. I've been told that our economy has detached from the rest of the world, so it doesn't matter if we can't export anything.

Thu, 02/02/2012 - 14:07 | 2120622 CClarity
CClarity's picture

And this is before "protectionism" has kicked in.  Hat tip to "Local" sourcing trend though.  Not big yet, but growing, in food but also other products and services.

Thu, 02/02/2012 - 14:10 | 2120630 Poetic injustice
Poetic injustice's picture

Only over dead bodies of every German.

Thu, 02/02/2012 - 14:14 | 2120649 GeneMarchbanks
GeneMarchbanks's picture

Makes no difference what the rhetoric is from Roesler and Merkel, GS is convinced they'll always have the 'control' over every major economy's money supply. The heigh point of their hubris.

Thu, 02/02/2012 - 14:17 | 2120660 Caviar Emptor
Caviar Emptor's picture

Germany has gone along with every new monetary expansion so far. Complaining? yes. But they haven't actually not complied

Thu, 02/02/2012 - 14:19 | 2120668 Poetic injustice
Poetic injustice's picture

Germans complain more with every new expansion.
I know, I recently was contracted to Germany so I work here and have to listen to those complaints.

Thu, 02/02/2012 - 14:24 | 2120686 Caviar Emptor
Caviar Emptor's picture

I don't blame them. However push come to shove they are threatened by the possibility of a collapse in their export markets. That ends up motivating deals where they extend more credit and allow looser monetary policy

Thu, 02/02/2012 - 14:33 | 2120714 GeneMarchbanks
GeneMarchbanks's picture

'However push come to shove they are threatened by the possibility of a collapse in their export markets.'

How can that happen? Is someone threating to strengthen the ? Or stop importing BMWs?

Believe what you want but the loser here is and will continue to be the USD as the reserve currency as nations get more people to question their own monetary system which is based on the $.

Thu, 02/02/2012 - 14:55 | 2120790 Caviar Emptor
Caviar Emptor's picture

@Gene: the concern is if there's a Eurozone breakup that will have a direct effect as peripheral countries go back to highly discounted domestic currencies. And it would have an indirect effect on global trade as well. As Tyler points to in the article, global trade is a sick man as it is. Any earthquakes would be a threat. 

As to king dollar, that is yet another more complex issue. But as we're seeing with growing Yuan swap arrangements, alternatives are materializing anyway

Thu, 02/02/2012 - 15:40 | 2120945 macholatte
macholatte's picture

German exports reach record highs despite debt crisis

http://www.dw-world.de/dw/article/0,,15565468,00.html

Exports to Breach $1.3 Trillion in Sales for 2011, Shrugging Off Debt Woes

http://www.bloomberg.com/news/2011-11-29/german-exports-breach-eu1-trillion-sales.html

  Exports Booming for German Weapons Manufacturers

http://www.spiegel.de/international/germany/0,1518,773626,00.html

 

Thu, 02/02/2012 - 14:35 | 2120720 Poetic injustice
Poetic injustice's picture

Yes, I fully agree with this statement.
In Germany everybody who wants to work has a work (if not highly paid), but to continue exports  they have to give more credits out. It's complex issue really, but I think Merkele will have to pay for this policy in elections.

Thu, 02/02/2012 - 14:23 | 2120683 Dick Darlington
Dick Darlington's picture

Do not, i repeat do not, forget the "hidden eurobond" masked as Target 2. Germany is doing TOO MUCH already and the BUBA must be sweatting over this VERY politically sensitive issue.

ZH has done nice covering on this particular issue and here's some charts i spotted today in another blog.

http://globaleconomicanalysis.blogspot.com/2012/02/bundesbank-228-billio...

Thu, 02/02/2012 - 14:29 | 2120706 Caviar Emptor
Caviar Emptor's picture

It's going to be THE issue. 

Thu, 02/02/2012 - 15:33 | 2120922 hedgeless_horseman
hedgeless_horseman's picture

 

 

Eurobond issuance is clearly the goal.

Thu, 02/02/2012 - 15:19 | 2120886 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Excellent article. Thanks for the link.

Thu, 02/02/2012 - 14:11 | 2120633 Conax
Conax's picture

"What we found is strong evidence that the financial crisis prompted a synchronization of monetary policy that is unprecedented at the global level."

The mask is coming off. There are no countries, only the banks and they are all joined at the hip.

Thu, 02/02/2012 - 14:17 | 2120661 SMG
SMG's picture

And the banks are run by the Illuminati ruling families, who in turn rule us "useless eaters" through the global banking system.

Thu, 02/02/2012 - 14:46 | 2120752 francis_sawyer
francis_sawyer's picture

And the banks are run by the Illuminati ruling families, who in turn rule us "useless eaters"

They turned me into a useless DRINKER (not to get 'nit picky' about it though)...

Thu, 02/02/2012 - 14:18 | 2120665 Caviar Emptor
Caviar Emptor's picture

 There are no countries, only the banks and they are all joined at the hip.

Exactly. Countries are becoming an abstraction. But banks? They're real because they determine the fate of countries, governments and citizens. 

Thu, 02/02/2012 - 14:39 | 2120731 mayhem_korner
mayhem_korner's picture

 

 

The fourth beast is a fourth kingdom that will appear on earth.  It will be different from all the other kingdoms and will devour the whole earth, trampling it down and crushing it.  (Dan. 7:23)

Fri, 02/03/2012 - 02:06 | 2122322 Joseph Jones
Joseph Jones's picture

Look: God ordered Daniel to "seal the book" because, when God gave Daniel the prophecy it was several hundred years off in the future.

Fast forward several hundred years to John and Revelation.  God orders John not to seal the book, because, as Jesus and every apostle stated, the prophecy would happen very soon, within one physical generation (40 years) of Jesus on earth.

See the first and last vs. of Rev: "soon" and "quickly" would those things happen.  If those modifiers indicate 2000+ years hence, then just toss the Bible in the fireplace because it has no meaning.  Either Jesus came in 70AD when Rome destroyed the Hebraic temple, or Jesus and the Apostles lied.

There is no "end of time" in Scripture, but only the "time of the end" of the Mosaic/Levitical era.  The OT states the physical earth goes on forever, without end.   

"A time is coming and now is when those who worship will not worship on this mountain nor in Jerusalem"

"Jerusalem not built by hands"

"Say not you have Abraham as your father" (said to Pharisees who were physical descendants of Abraham)

"Your father is the devil" (unbelieving Hebrews, Pharisees/descendants of Abraham)

"Circumcision and uncircumcision mean nothing"

"The spirit of God is within you" (not outside, not in a temple)

Audience relevance can not be ignored when reading anything, including Scripture.  The words "now" and "this generation" written in the 1st C AD does not/can not indicate some year 2000+ years hence.

 

Thu, 02/02/2012 - 14:55 | 2120788 stirners_ghost
stirners_ghost's picture

That's an illusion. At the end of the day, banks don't have armies.

The lynchpin of the banks' sway is ultimately the fiat.

The governments of the different nations have made gold and .silver a legal tender in the payment of debts. Does this legislation change the nature of the transactions where gold and silver are exchanged for other desirable commodities? Not at all. Does it transform the exchange into something other than barter? By no means. But the exchangeable value of any article depends upon its utility, and the difficulty of obtaining it. Now, the legislatures, by making the precious metals a legal tender, enhance their utility in a remarkable manner. It is not their absolute utility, indeed, that is enhanced, but their relative utility in the transactions of trade. As soon as gold and silver are adopted as the legal tender, they are invested with an altogether new utility. By means of this new utility, whoever monopolizes the gold and silver of any country - and the currency, as we shall soon discover, is more easily monopolized than any other commodity - obtains control thenceforth over the business of that country; for no man can pay his debts without the permission of the party who monopolizes the article of legal tender. Thus, since the courts recognize nothing as money in the payment of debts except the article of legal tender, this party is enabled to levy a tax on all transactions except such as take place without the intervention of credit.

Willam Batchelder Greene (1849)

Thu, 02/02/2012 - 14:58 | 2120801 Caviar Emptor
Caviar Emptor's picture

The Borgias had no trouble paying mercenaries. But what do modern banks need armies for anyway? They own the politicians. Don't need more than that to own the armies

Thu, 02/02/2012 - 14:28 | 2120697 AL_SWEARENGEN
AL_SWEARENGEN's picture

These central bank cocksuckers know the end of the status quo is at hand.  Confidence in fiat paper assets is gone & going.  Bric nations are diversfying out of the dying usd.  Now for sure these bought out, hypocrite bastards managing the current economic regime will not offer themselves up as the root problem.  The open question is where will the blame be placed?  What will the trigger be?  Perhaps the easiest answer is to look at where all the aircraft carriers, subs, and war ships are focusing.  And what was that?  Iran, India, oil for gold?  HA  And they thought the lesson Gaddafi & Saddam would be well learned by other countries by now.

 

"When the bailout bubbles burst, the last thing they will do is take you to war when all else fails." - Gerald Celente

Thu, 02/02/2012 - 14:40 | 2120735 SMG
SMG's picture

What will all the hoopleheads think Al?

Thu, 02/02/2012 - 14:50 | 2120766 AL_SWEARENGEN
AL_SWEARENGEN's picture

"Yeah.  Do they understand how most of what happens is people being drunk and stupid and trying to find something else to blame besides that-that makes their lives totally fucked?  No, they don’t.  They’re too busy stealin’ to study human nature." 

 

http://www.youtube.com/watch?v=fLDKFjJGorY

Thu, 02/02/2012 - 14:11 | 2120635 battle axe
battle axe's picture

"It is the end of the world as we know it..." REM

Thu, 02/02/2012 - 14:21 | 2120678 HD
HD's picture

...But I feel fine.

Thu, 02/02/2012 - 15:00 | 2120815 trilliontroll
Thu, 02/02/2012 - 15:12 | 2120860 dexter_morgan
dexter_morgan's picture

tick tock tick tock

Thu, 02/02/2012 - 14:11 | 2120637 francis_sawyer
francis_sawyer's picture

Who needs a Magna Carta when you have central bankers?

Thu, 02/02/2012 - 14:11 | 2120638 GeneMarchbanks
GeneMarchbanks's picture

This was worse than a Stolper FX recommendation. What a joke these sick bastards are.

Thu, 02/02/2012 - 14:11 | 2120639 donsluck
donsluck's picture

Coordinated action, coupled with the erasure of social contracts and theft of client funds (ala MFG) leaves no safe paper harbor. There really is only one long term solution - PMs.

In the short term, as the Euro implodes, the dollar will strengthen.

So, cash and PMs.

Thu, 02/02/2012 - 14:14 | 2120645 pods
pods's picture

Who woulda thought that in a world where everybody is leveraged to the gills that nobody would have any money for actual trade?

pods

Thu, 02/02/2012 - 14:22 | 2120676 Caviar Emptor
Caviar Emptor's picture

Well that's Biflation for you. Hot pockets of inflation right along side the threat of impending deflationary collapse. All the distortions are courtesy of decades of lose monetary policy and trying to reflate burst bubbles with "reflation" . Some bubbles are deflating while they rush to reflate others

Thu, 02/02/2012 - 14:48 | 2120758 DosZap
DosZap's picture

Caviar Emptor

IMHO, their will be NO deflationary collapse, the PTB will print till hell freezes over to stop that, they will give us Hyper Inflation..........watch.

Thu, 02/02/2012 - 14:16 | 2120654 Burr's 2nd Shot
Burr's 2nd Shot's picture

I forget, is this "priced in" or "bullish"?

Thu, 02/02/2012 - 14:28 | 2120699 Spastica Rex
Spastica Rex's picture

Yes.

Thu, 02/02/2012 - 14:18 | 2120664 LawsofPhysics
LawsofPhysics's picture

Trade wars just getting started, bitchez.

Thu, 02/02/2012 - 14:19 | 2120667 jm
jm's picture

Inflate or die.

Once banks have their run, move into commodities. 

Thu, 02/02/2012 - 14:19 | 2120670 HD
HD's picture

Years ago, my very first car would start to lightly shake when it hit 55 mph. By the time it hit 70 mph it was shaking and creaking like it was reentering earth's atmosphere.

Feel that vibration? It's S&P 1325...

 

Thu, 02/02/2012 - 14:42 | 2120739 nowhereman
nowhereman's picture

Ball Joints

Thu, 02/02/2012 - 15:13 | 2120867 HD
HD's picture

Thank you. If I ever run into the 16 year old me - I'll let him know. Poor horny bastard.

Thu, 02/02/2012 - 15:22 | 2120895 pine_marten
pine_marten's picture

Had a motorcycle that would shimmy a bit at 100.  Past 120 it settled down again.  We just have to hang together through the unstable patch :-) .

Thu, 02/02/2012 - 16:10 | 2121053 GeezerGeek
GeezerGeek's picture

I had a car that would shake at zero mph when I was in the back seat, not even driving. Then I got old enough to move out of my parents' house.

Thu, 02/02/2012 - 14:21 | 2120675 Poetic injustice
Poetic injustice's picture

But the big test of bank cartel control will be Greece.
Question is, will Fed eat it or somebody will go belly up?

Thu, 02/02/2012 - 14:21 | 2120677 nolla
nolla's picture

Well, one analyst even quoted that the drop in Baltic Dry is good since it decreases freight costs - bullish for margins....

All news is good news, even bad news is good news and especially no news is good news.

Thu, 02/02/2012 - 14:49 | 2120764 blindfaith
blindfaith's picture

 

 

The US Post Office, UPS and FedEx did not get that memo, please advise.

Thu, 02/02/2012 - 14:24 | 2120689 spastic_colon
spastic_colon's picture

And the over supply of ships can be explained as thus…I only have 10 ships, I was using all 10, now I am only using 4, I have an oversupply of ships. Doesn't mean demand is NOT slowing!

Thu, 02/02/2012 - 14:33 | 2120717 onebir
onebir's picture

They mean a load of new ships (ordered 12+ m in advance) all coming on line in Jan...

Thu, 02/02/2012 - 14:36 | 2120722 Poetic injustice
Poetic injustice's picture

It's time for new Obama policy, "Cash for clunker ships".

Thu, 02/02/2012 - 14:57 | 2120799 brooklynlou
brooklynlou's picture

Shhhh ... dont give them ideas ....

Thu, 02/02/2012 - 15:52 | 2120987 spastic_colon
spastic_colon's picture

Indeed, I stand corrected…I only have have 10 ships + the 12+ m I ordered in advance, I was using all 10 + planning on using the 12+ m, I am only using 4, and plan on using 4, I have an oversupply of ships. That's better ;>\

Thu, 02/02/2012 - 14:27 | 2120695 props2009
Thu, 02/02/2012 - 15:03 | 2120826 gaoptimize
gaoptimize's picture

I took your bait and got away immediately.  That is kind of lousy fishing isn't it?

Thu, 02/02/2012 - 16:15 | 2121068 TheFourthStooge-ing
TheFourthStooge-ing's picture

props2009 is just another spammer shilling his crappy site.

 

Thu, 02/02/2012 - 14:39 | 2120729 onebir
onebir's picture

What's the last month available for that world trade data?  (I'm thinking it's probably got quite a bit worse since then...)

Thu, 02/02/2012 - 14:50 | 2120767 Caviar Emptor
Caviar Emptor's picture

The Financial Crisis Prompted an Unprecedented Alignment of Monetary Policy Across Countries...

The alternative would have been 1930s-style beggar-thy-neighbor policies where countries rush to devalue their currency. Without coordination every currency would be in a race to the bottom. 

Thu, 02/02/2012 - 14:58 | 2120804 Spastica Rex
Spastica Rex's picture

Yes: today it's beggar-thy-global-underclasses. 

Thu, 02/02/2012 - 15:44 | 2120955 falak pema
falak pema's picture

eat peas. Not the purple ones.

Thu, 02/02/2012 - 16:05 | 2120971 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Good analysis.

The PTB use the common "deflation will kill us all" scare tactics.  Wrong.  Deflation would be beneficial to clear out the excess misallocation.  Not allowing it to clear means piling on more.

They're all trying to devalue together = makes no sense. Someone has to lose eventually.  It's delaying the inevitable as currency will eventually be priced to the production of a country backing it, not its consumption.

Thu, 02/02/2012 - 14:59 | 2120810 quacker
quacker's picture

We don't need capital formation, investment and production, factories humming and people working .. don't neeed it ... just give us money printing Jews.

Thu, 02/02/2012 - 15:02 | 2120822 proLiberty
proLiberty's picture

CO-INFLATION

Thu, 02/02/2012 - 15:06 | 2120841 dexter_morgan
dexter_morgan's picture

b,b,b,b,b,buuuutttt the job market is slowly healing - cause they say it is.......Go Barry!

http://news.yahoo.com/manufacturing-picks-private-job-gains-slow-0042251...

Thu, 02/02/2012 - 15:14 | 2120872 Georgesblog
Georgesblog's picture

This is the pothole that becomes the sinkhole. This is the end of the economic stimulus policies. The currency isn't money.

http://georgesblogforum.wordpress.com/

Thu, 02/02/2012 - 15:30 | 2120913 Bunga Bunga
Bunga Bunga's picture

The vessel glut was caused by massive stimulus programs by China and S Korea for their shipyards in early 2009. The orders for new ships collapsed dramatically in 2008/2009 and many shipyards faced bankruptcy. So shipyards were given massive subsidies and buyers got cheap financing for ships. That explains the oversupply. Yes, there is oversupply and somebody has to pay the bill for all those useless ships.

Thu, 02/02/2012 - 16:00 | 2121010 koperniuk666
koperniuk666's picture

Absolutely right.

Captain Bob

Thu, 02/02/2012 - 15:37 | 2120928 dtwn
dtwn's picture

EDIT repeated previous mention of HARPEX.

Thu, 02/02/2012 - 15:34 | 2120931 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

The Baltic Dry Index is at an all-time low, coincidentally as the US govt ups it's war rhetoric, now calling Iran/Russia/China the biggest threats.

If China is such a big threat, why would the govt support sending our jobs to the "enemy" while having them make all of our products?  The lies have no logical progression, the hallmark of a bad liar.

As regards Iran, as Cheney said, "What's our oil doing under their land?" The US govt & Zionist Israel are the world's greatest threats.  How many times can they trot out the tired excuse, "We have to attack them 1st so they don't attack us 1st?"

It's time to start the next revolution in the US!

Thu, 02/02/2012 - 16:04 | 2121013 dwdollar
dwdollar's picture

The problem is the average American can't think logically anymore. They are driven by emotion and raw animalistic impulses. The lies are indistinguishable to them.

Thu, 02/02/2012 - 16:08 | 2121045 falak pema
falak pema's picture

you refer to TCT?

Thu, 02/02/2012 - 16:09 | 2121050 Bunga Bunga
Bunga Bunga's picture

The capitalist will sell even the rope with which he will be hung.

 

Thu, 02/02/2012 - 16:17 | 2121074 GeezerGeek
GeezerGeek's picture

Wow. Too bad we don't have any capitalists left here in the USA. Just us parasites sucking up government largesse and the bankers that own the government.

Thu, 02/02/2012 - 16:07 | 2121029 falak pema
falak pema's picture

we seem to have lost topcallingtroll... where is he? 

A man of his psycho-primal skills would make the ZH community rock in awe at contemplating with disdain the immensity of meteoric financial crater induced shock facing us. He would know how to  unplug, pulling the rug, under the bear bugs who hug cataclysmic prescience of black hole to nowhere, by incarnating  a fulgurant impregnation of salvatory vision; Messiah's redemption, where the twelfth apostle is Ron PAul, and he his messenger, a Daniel amongst tea party men.

Am I purple prose of sufficient dose to induce troll's return?

Thu, 02/02/2012 - 16:21 | 2121058 blunderdog
blunderdog's picture

I'm doubting the connection between "global monetary policy" and "trade."  One is a story told by politicians and rich folks.  The other is actual behavior of billions of people.

Thu, 02/02/2012 - 16:26 | 2121102 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

I'll see all U zerohedge posters at the FEMA camps after the collapse (or another false flag 9/11-type attack), the start of WW3, & martial law declared!

I hear we'll all get a special wing with a pool & lounge area, & fitness center.

Thu, 02/02/2012 - 16:28 | 2121103 Albertarocks
Albertarocks's picture

The Baltic Dry situation is not just about too many ships being built.  There's a hell of a lot more serious implications than that.  It portends bankruptcies for some of the shippers as well as the banks they owe money to.  And it's certainly not only because of few more ships that are about to hit the water.

The shippers are currently only getting 5% of the revenues they were getting at the start of 2008.  Are you kiddin' me?  Some might ask "So the BDI has already fallen 93%, how much further can it fall".  And the answer is, as always, "It can fall another 93%".

http://albertarocks-ta-discussions.blogspot.com/2012/01/bdi-big-drop-ind...

 

Thu, 02/02/2012 - 16:45 | 2121196 slewie the pi-rat
slewie the pi-rat's picture

"unconventional policies"? 

many of us understand that the critical "unconventional policy" was repealing glass/steagall and the "system" itself becoming "problematic" in that "aftermath"

so now this retard, whose bankster-bank helped design the repeal and has been laughing at mere mortals ever since, can stick this whole bag0'bullshit right up his own ass, and he's so good at what he does, he probably won't even hafta remove his head to do it!

Thu, 02/02/2012 - 18:12 | 2121434 sidkof
sidkof's picture

my buddy's step-sister makes $68/hour on the internet. She has been without work for 8 months but last month her paycheck was $7255 just working on the internet for a few hours. Go to this web site and read more.. LazyCash9.com

Thu, 02/02/2012 - 19:47 | 2121667 StychoKiller
StychoKiller's picture

"So, if ALL the other central banks decide to jump in a lake, you'll jump in too?"

The Bernank:  "Yyyyyes!"

Thu, 02/02/2012 - 20:41 | 2121812 max2205
max2205's picture

Obamarama knows he won't get re elected unless gas is under 3.00.

Wall st will make it happen

Thu, 02/02/2012 - 21:39 | 2121935 blunderdog
blunderdog's picture

Naw, that's silly.  Under $3 gas would be nice, but unless Mittens convinces people he'd DELIVER that, Obama wins.

(Mittens can't even convince most of the country he's a serious candidate.)

Fri, 02/03/2012 - 04:58 | 2122417 Youri Carma
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