Fed Back-Pedals Hawkishness, Hints At Policy Error: "Monitoring Global Developments", Admits "Growth Slowed Last Year"Submitted by Tyler Durden on 01/27/2016 15:01 -0500
Treading a fine line between losing all credibility and exposing their total devotion to the stock market, it appears The Fed is maintaining its delusion that everything will be fine as they unwind the largest and most experimental monetary policy of all time, and yet for the first time we get proof that the Fed admits it made an error by hiking into a slowing economy: "labor market conditions improved further even as economic growth slowed late last year.
Here’s a newsflash that CNBC didn’t mention. According to the BLS, the US economy generated a miniscule 11,000 jobs in the month of December.
"The idea of lettting an asset bubble run is literally one of the most foolish things a central bank can do... they always end badly;"
What do you do when you're a government statistician and the economic data doesn't say what you want it to say? Why you "adjust" it of course.
There's been no shortage of discussion about the weather among economists this year as "snow in the winter" took the blame for a bevy of bad data in H1 while summer is Citi's new scapgoat for any weakness in August and September payrolls. Meanwhile, unseasonably mild temps took the fall for poor October retail sales and now, going into the winter, it's all about El Nino.
... for many equities are simply, as SocGen puts it, "too scary."
The talking heads were busy this week powdering the GDP pig. By averaging up the “disappointing” 1.5% gain for Q3 with the previous quarter they were able to pronounce that the economy is moving forward at an “encouraging” 2% clip. And once we get through this quarter’s big negative inventory adjustment, they insisted, we will be off to the ‘escape velocity’ races. Again. No we won’t! The global economy is in an epochal deflationary swoon and the US economy has already hit stall speed. It is only a matter of months before this long-in-the-tooth 75-month old business expansion will rollover into outright liquidation of excess inventories and hoarded labor. That is otherwise known as a recession.
The Fed needs to extricate itself from manipulating the financial markets. It needs to end backstopping market liquidity. It must never again print Trillions of new “money” out of thin air. Because so long as the marketplace perceives that the markets are "too big to fail", there will be speculative excess, major securities markets mispricings and Bubble fragilities. No one – average investor or sophisticated financial operator – has a clue as to the degree Fed policies have distorted asset prices.
The shark jumping continues as Citi says its analysts "have found serious residual seasonality in payroll reports for the period from August through October"...
Having blamed the entire financial crisis on one reporter (despite the implicit government encourage of people to "invest in stocks"), detained "malicious sellers" (which killed the entire futures market), and now cracking down on overly-aggressive stock-pumping by "sinister stock squads," we thought we had seen it all from China. Until now... CHINA OFFICIAL: LUCKY THAT STOCK BUBBLE BURST BEFORE TOO LATE...
When the bubble vision stock peddlers get desperate, they talk decoupling. So by the end of yesterday’s bloodbath you would have thought China was on another planet, and that “commodities” were some trinket-like collectibles gathered by people who don’t wear long pants, drink coca cola or jabber on their cell phones. On these fine shores, of course, its all awesome from sea to shinning sea. So don’t be troubled. Buy the dip.
It's Not A Devaluation If The Ministry Of Truth Says So: China's "Style Council" Takes On Currency TradingSubmitted by Tyler Durden on 08/27/2015 19:15 -0500
We love reading quotes from Hussman in 2000 and 2007. The air is getting pretty thin up here. A stock market driven by Google, Apple, Netflix and a few other tech darlings with no earnings does not make a market. Time is running out for the bulls. The same morons on CNBC ridiculed and scorned his facts then and they scorn and ridicule him now. Do we trust Jim Cramer and Steve Liesman or John Hussman? Guess.
After 6 straight months of decline in annual spending growth, May saw YoY spending pop 3.6% (the most since Dec 2014). After an unchanged April, May expectations for spending were a 0.7% jump but the data blew that away, printing a 0.9% MoM jump - the biggest since August 2009 and biggest beat since Jan 2013. Personal Income only grew at 0.5% (still the highest MoM jump since March 2014) driving the savings rate down to 5.1% - the lowest since December. Before Steve Liesman and his buddies get too excited - spending was driven mainly by a 4.72% surge in spending on Energy goods & services - not exactly what the discretionary buying consumer-oriented society that is required to keep the dream alive was looking for. Spending Ex-Energy is the lowest since March 2011. Finally we note non-durable spending topped durables and this exuberant GDP-boosting spendfest (un-save-fest) provides more ammo for an earlier Fed rate hike.