Japan

GDP Report Confirms Global Trade Is Crashing, And Why That Is Good News For Some

We did not actually need confirmation that global trade is slowing to a crawl (and has in fact reversed): after all, we have been showing just that for the past year, most recently earlier this week but it is important to note that in today's negative GDP print, it was net trade (exports less imports) that subtracted -1.9% from the final GDP print, driven by a -1.03% annualized drop in exports. This was the biggest hit to US trade since thegreat financial crisis.

GoldCore's picture

Goldman Sachs proposes that society should bend to the needs of the financial and monetary system rather than reform of that system. At any rate, the proposals put forward by them are unlikely to achieve any kind of long-term solution to the problem of massive unsustainable debt faced by the western world and Japan. 

How Japan's Unemployment Rate Dropped Even As 280,000 People Lost Their Jobs

Yesterday Japan amazed everyone when it reported that its unemployment rate had dropped yet again, this time to 3.3%, the lowest since April 1997. The paradox is that while the number of Japan's unemployed dropped by 20,000, the number of those employed plunged by 280,000! Or as Goldman calls, it "growth in jobholders looks to have peaked amid a lack of recovery momentum in the economy"

Frontrunning: May 29

  • Former House Speaker Hastert indicted on federal charges (Reuters)
  • Blatter expected to win re-election despite soccer corruption scandal (Reuters)
  • NYSE Looks to Ease Late-Day Pileup (WSJ)
  • What Will Happen to a Generation of Wall Street Traders Who Have Never Seen a Rate Hike? (BBG)
  • Japan spending slump casts doubt on central bank optimism  (Reuters)
  • Unclear rules, market volatility take toll on bank capital  (Reuters)
  • Greece Told Budget a Red Line for Creditors Venting at G-7 (BBG)
  • The Economist Who Realized How Crazy We Are (Michael Lewis)
  • Pimco Said to Have Considered Goldman’s Cohn for Top Job (BBG)

Putting The 'Great' In Great Depression, Stephen Roach Warns On TPP's Currency Rules

History has not been kind to major trade blunders. Just as the Smoot-Hawley Tariff Act of 1930 sparked a global trade war that may well have put the “great” in the Great Depression, Congressional enactment of enforceable currency rules today could spark retaliatory actions that might devastate the free flow of trade that a sluggish global economy desperately needs.

The Stock Market - A Picture Of Excess

It is unknowable how much more pronounced these excesses can become, especially in light of extremely loose monetary policy around the world. Things could easily become quite dicey as soon as tomorrow, but it is just as easily possible that valuations will continue to expand for some time yet. However, these data do indicate one thing: risk has increased enormously, and it will keep increasing the longer the bubble persists. Frankly, the situation also scares us a bit, because we expect that governments and their agencies (such as central banks) will find it extremely difficult to deal with the next crisis. They have become quite overstretched as a result of the last one. After having gone “all in” last time around, what are they supposed to do for an encore? The only options that come to mind are repressive measures such as capital controls, confiscation of private wealth, and a host of other unpleasantries.

GoldCore's picture

The ‘war’ word is being increasingly heard internationally as the U.S., EU, Russia and China adopt provocative postures over various disputes including Ukraine and in the Pacific. War with the U.S. is “inevitable” if the U.S. involves itself in the dispute which has arisen over the Spratley Islands in the South China Sea according to China's state controlled newspaper the Global Times.

Frontrunning: May 28

  • No change in Greek debt talks after another day of spin (Reuters)
  • G-7 Weighs In on Greece as Government Told to Be Serious (BBG)
  • FIFA Faces Mounting Pressure From Sponsors as Visa Threatens to End Deal (WSJ)
  • U.S. hopes Chinese island-building will spur Asian response (Reuters)
  • Japan Inc.’s $104 Billion Investor Payout Set to Surge (BBG)
  • Russia masses heavy firepower on border with Ukraine (Reuters)
  • China Says Its Most-Wanted Fugitive Is in U.S. Custody (BBG)

China Stocks Crash, US Futures Flat Ahead Of More Greek Rumors

Courtesy of central planning, virtually every single capital market has become an illiquid penny stock, with wild swings from one extreme to the other, the latest example of this being the Shanghai Composite, which after soaring 10% in the past ten days, crashed 6.5% overnight tumbling 321 points to 4620 after it briefly rose just shy of 5000. This was the biggest drop since January 19 when the Composite dropped 7.7% only to blast higher ever since. Putting the "plunge" in perspective, now the SHCOMP is back to levels not seen in... one week.

"Ms. Wantanabe" Bets On Resurgent Yen As PE Cashes Out

"Japanese day traders, colloquially and collectively known as 'Mrs Watanabe', are buying the yen as it nears eight-year lows," Nikkei reports. For their part, private equity firms are cashing out at what they figure may be the top for Japanese stocks.

The Global Economy As Seen From "The Man In The Moon"

The Man in the Moon studies the pathology of Earth’s global economy and markets from a distance where there’s no gravitational pull towards empiricism or consensus. His findings: 1) the global economy is over-leveraged, fragile, stagnating, and increasingly centrally managed; 2) capital markets and asset performance have been captured by the perception of the ongoing value of money, and so; 3) unconventional investment analysis is prudent.

Do Not Show This Chart To Bank Of Japan Governor Kuroda

As another example of "has the world gone mad?" - we present the following words of wisdom from BoJ Governor Kuroda-san:

*KURODA DOESN'T SEE ANY ASSET BUBBLE OR STOCK MARKET BUBBLE, OR ANY 'FINANCIAL EXCESS' IN ECONOMY

And in the interests of sanity, we highly suggest he not look at the chart below...

"New Silk Road" Part 2: Cold War Or Competition?

In Part 1 of “The New Silk Road,” we examined the China’s plan for rebuilding the Silk Road, stretching from Europe to Asia. In Part 2, we look at currently proposed projects, and geopolitical rivalries that could stall and hamper progress. Until very recently, it was widely assumed that the US would lead its western allies in a campaign against the Russian/Chinese deal to develop the Silk Road, but events have been reversing with remarkable speed.