Prices are actually falling faster than the official CPI number indicates, and have not picked up as oil has stabilized. In fact, the US has been in deflation for the past five months. So it’s no surprise that people who are actually buying the stuff that’s falling in price would register this fact and answer surveys with deflationary sentiments. It’s also no surprise that central banks, which presumably see the same data, would be looking for ways to ease even further (Japan and Europe) or walk back their previous threats to tighten (the US Fed) - apparently in the hope that increasing the dose will cure the credit addiction.
The problem with forward earnings estimates is that they consistently overestimate reality by roughly 33% historically. The illusion of“permanent liquidity,” and the belief of sustained economic growth, despite slowing in China, Japan, and the Eurozone, has emboldened analysts to continue push estimates of corporate profit growth higher. Even now, as the earnings recession deepens, hopes of a sharp rebound in profitability remains ebullient despite the lack of any signs of economic re-acceleration.
While the market is still enjoying the post-NFP weekly data lull, economic data starts to pick up again in the coming days, alongside the start of the reporting season. Below are this week's key events.
Caution is called for because of Fed’s limited ability to reduce policy rate, Federal Reserve Bank of New York President William Dudley says, Dudley comments in text of speech in Bridgeport, CT. “Although the downside risks have diminished since earlier in the year, I still judge the balance of risks to my inflation and growth outlooks to be tilted slightly to the downside”
There is an inherent, overarching, problem within this now stated “international development” meme that I’m not sure the Fed. has really thought through. And it’s this... If “international developments” (i.e. China) have now taken first position over U.S. data, one can only summarize that the Fed. is now following, as well as, instituting a policy as the self-anointed mop-up team for the sins and/or consequences of spill over of a communist run economy.
Fed President and Assistant Treasury Secretary Says What Everyone Knows: We Need to Break Up the Big BanksSubmitted by George Washington on 02/16/2016 15:07 -0400
Top Economists, Financial Experts and Bankers Say Giant Banks Are Hurting Economy
Central bankers regularly lie to us to obscure the larger, ongoing globalization of finance. We're not supposed to notice what's going on behind the curtain. But we better start.
Americans in their 50s, 60s and 70s - the Baby Boom generation - are carrying unprecedented amounts of debt, a shift which according to the WSJ "reflects both the aging of the baby boomer generation and their greater likelihood of retaining mortgage, auto and student debt at much later ages than previous generations." While aggregate debt of Gen-Xers has admirably declined by 12% in the past 12 years, the aggregate debt of the average Baby Boomer has soared by an unprecedented 169%!
Instead of allocating capital to expensive tail risk bets on direct asset class collapse (in equities, credit, and commodities), it appears, just as we detailed previously, the 'smartest money in the room' is "betting" indirectly on a stock market crash through eurodollar options.
There has been an economic coup d’état in America and most of the world. We are now ruled by about 200 unelected central bankers, monetary apparatchiks and their minions and megaphones on Wall Street and other financial centers. Unlike Senator Joseph McCarthy, we actually do have a list of their names. They need to be exposed, denounced, ridiculed, rebuked and removed.
"Based on current valuations, the prices of most stocks don’t appear to have factored in a recession scenario, ‘hence the downside should we see a recession could be rather severe',... the shares of most companies could still fall another 50% or more from current levels."
Who said it? - "If it were positive to take interest rates into negative territory I would be voting for that."
After yesterday's torrid, chaotic moves in the market, where an initial drop in stocks was quickly pared and led to a surge into the close after a weaker dollar on the heels of even more disappointing US data and Bill Dudley's "serious consequences" speech sent oil soaring and put the "Fed Relent" scenario squarely back on the table, overnight we have seen more global equity strength on the back of a weaker dollar, even if said weakness hurt Kuroda's post-NIRP world and the Nikkei erased virtually all losses since last Friday's surprising negative rate announcement. Oil and metals also rose piggybacking on the continued dollar weakness as the word's most crowded trade was suddenly shaken out.
Futures Jump After Bill Dudley Hints At Fed "Policy Error", Warns Of "Significant Consequences" From Strong DollarSubmitted by Tyler Durden on 02/03/2016 10:37 -0400
"A weakening of the global economy accompanied by further appreciation in an already strong dollar could also have "significant consequences." I read that as saying we're acknowledging that things have happened in financial markets and in the flow of the economic data that may be in the process of altering the outlook for growth and the risk to the outlook for growth going forward."
- Bill Dudley
Rand Paul’s signature “Audit the Fed” legislation failed to garner the 60 votes needed in the Senate to move the measure forward. Of course, this is merely the latest in a never-ending series of banker victories, and a truly devastating blow against liberty, free markets, transparency and any hope for government by the people and for the people. Ensuring that light is never shined on the Fed’s shady, corrupt and unaccountable bailout activities has always been a key goal of the American oligarchy, and they succeeded once again.