This globalization of price - for goods, services, credit and currencies - continually creates imbalances that fuel a perpetual instability that gradually impoverishes every sector other than global capital, which being mobile, can exploit the imbalances for its own profit. Who benefits over the longer term from the permanent instability and boom-and-bust cycles of this arrangement? Only those close to the credit spigots of central banks.
Global stocks have started Friday the 13th on the wrong foot, with not only Hong Kong GDP unexpectedly tumbling by 0.4%, the worst print in years while retail sales fell for a thirteenth straight month in March, the longest stretch since 1999 as the Chinese hard landing spreads to the wealthy enclave, but also following a predicted collapse in Chinese new loan creation, which will reverberate not only in China but around the globe in the coming weeks. The latest overnight drop in the Yuan hinted that should the recent USD strength continue, China will have no choice but to repeat its devaluation from last summer and winter.
The American economic system, and in fact the world’s economic system is failing, and that failure is being attributed by many on the left (and some on the right) as a failure of capitalism. This false notion has given rise to Bernie Sanders and his preaching of social democracy. How has this happened?
Apple share are tumbling (as are the entire complex of suppliers) following a report from Nikkei that Taiwan Seminconductor's shipments of iPhone 6s, iPhone 7 chips for June-Dec. period will likely shrink 70%-80% vs year earlier. As one anayst noted, a decline of more than 20-30% is not in consensus estimates. As Bloomberg reports, of particular interest is that this cut to orders is about upcoming iPhone 7, not about the well-publicized iPhone 6 slowdown.
As a Western revolutionary, Obama has been relentless in his efforts over the last seven years to use all the machinery and influence of government, whether illegally (since 2012, the U.S. Supreme Court has unanimously ruled 13 times that Obama’s actions have been unconstitutional) or legally, to fundamentally transform America into the neo-Marxist democracy he and his father have long dreamed about.
The overnight session has been one of alternative weakness and strength: it started in China where stocks tumbled 2.8% to a two month low following some unexpected warnings in the official People's Daily newspaper and poor trade data. Concerns about China, however, were promptly forgotten and certainly not enough to keep global assets lower, with European stocks gapping higher at the open and rallying from a one-month low, driven by a "surprising" surge in the USDJPY which has moved nearly 200 pips higher since its post-payrolls low. Another driver is the jump in oil, which rallied just shy of $46 a barrel, buoyed by Canadian wildfires that are curbing production and speculation that the Saudi Arabian oil minister succession will be bullish for oil prices.
Over the course of the last week it seemed no matter where we turned in the business media one meme was being pushed above all others: It’s still a great time to be a private tech unicorn. Implying, that funding rounds were still “robust.” What wasn’t said, so we will, is this: It’s a great time to be a private “unicorn” rather, than take the chance and become the poster-child for the IPO apocalypse. For it’s better to be assumed a $BILLION dollar success story rather, than IPO and officially open the books to the market and remove all doubt – that you’re not.