"I hoped to buy toilet paper, rice, pasta. But you can’t find them. The government is putting us through savage suffering."
The news is filled with the everyday zigzags of those competing against each other for the Democrat and Republican Party nominations to run for the presidency of the United States. But one of the most important issues receiving little or no attention in this circus of political power lusting is the long-term danger from the huge and rising Federal government debt.
North Dakota "has been the economic envy of every state in America for most of the past decade with the lowest jobless rate, the highest increase in personal income, and the fastest-growing population." Not anymore.
"Despite the sharp bounce in oil prices that these headlines generated, we do not expect such a cut will occur unless global growth weakens sharply from current levels, which is not our economists' forecast. This view is anchored by our belief that such a cut would be self-defeating given the short-cycle of shale production and the only nascent non-OPEC supply response to OPEC's November 2014 decision to maximize long-term revenues."
Having urged "don't panic" just 4 short months ago, it appears Nigeria just did just that as the global dollar short squeeze forces the eight-month-old government of President Muhammadu Buhari to beg The World Bank and African Development Bank for $3.5bn in emergency loans to help fund a $15bn deficit in a budget heavy on public spending amid collapsing oil revenues. Just as we warned in December, the dollar shortage has arrived, perhaps now is time to panic after all.
This is the paradox for Norway: the country needs to buy NOK in order to fund stimulus and support the economy. But by doing so, the Norges Bank is putting upward pressure on the currency at a time when it really needs to depreciate. In other words, what Norway must do to pay for stimulus (buy kroner) is indirectly hurting the economy by keeping the NOK from depreciating and functioning as a counter cyclical buffer.
Saudi Arabia - which was busy playing headline hockey with Russia this morning over a rumored 5% production cut proposal - is running out of money. Yes, we know, that sounds absurd. But believe it or not, the country whose monarch recently rented the entire Four Seasons hotel for a 48 hour stay in Washington DC, is in fact going broke. And at a fairly rapid clip.
Last week, we noted that Italy is rushing to defuse a €200 billion time bomb in the country’s banking sector as investors fret over banks’ exposure to souring loans. On Wednesday we learn that Italy has indeed managed to strike a deal with Brussels to help alleviate banks’ NPL burden but the agreement falls well short of the type of comprehensive "solution" the market was hoping to see.
"Russia has approximately 12-18 months left at the current oil price before the country reaches a point of no return..."
“It’s falling faster than any other currency as we see panic selling in the ruble after it breached the 80 per USD level. Some investors are selling at any price,”
One thing policy makers should have learned after watching Greece unravel last summer is that capital controls almost always backfire. Once the market (not to mention the populace) senses panic, it's all downhill from there and make no mistake, there's blood in the water here.
S&P's Downgrade (By A German Analyst) Is A "Politically-Motivated" Decision Aimed At Polish AuthoritiesSubmitted by Tyler Durden on 01/19/2016 12:50 -0500
The Standard and Poor’s rating agency, notorious for its controversial assessments, has this time bashed Poland in the wake of the anti-Polish frenzy whipped up by the European media. To be more precise, Poland was assailed by a German S&P analyst who lowered Poland’s rating from A- to BBB+, despite the economic data that by no means warrant such an evaluation.
With Brent and WTI having dipped below $30 (today’s rebound notwithstanding), and with some grades going for less than zero in the US, the question on everyone’s mind is simply this: can oil continue to move lower? According to the IEA, the answer is “an emphatic yes.”
"Your fund made 5.6% net last month, to finish the year up 20.45% net. Gains came from the short book.... Your fund remains long bonds, short equities."
President Barack Obama’s final State of the Union address came up short of the facts on several topics. Obama apparently omitted part of his presidency in boasting of nearly 900,000 manufacturing jobs “in the past six years.” Over his entire time in office, manufacturing jobs have gone down by 230,000.