Despite the protestations that everything will be awesome from Hillbama, the American people strongly disagree. The gap between tumbling 'expectations' (77.8) and 'current conditions' (109.0) is at its worst (least hopeful) since August 2006... shortly before overall confidence crashed in America.
After its heroic "7 standard deviation beat" bounce in June, Chicago PMI dropped modestly in July from 56.8 to 55.8 (better than the expected 54.0). The stability in the headline print (at 18-month highs) amid tumbling GDP is odd given that production, new orders, and order backlogs all declined in July. Peculiarly, in the face of these declines, the employment subindex saw a strong gain!
With Wall Street expecting the US economy to grow 2.6% in the second quarter, there were many shocked faces moments ago when the Census Bureau reported that not only did the US economy grow a paltry 1.2% in the quarter, but Q1 GDP was slased from an already poor 1.1% to just 0.8%.
America’s about to endure the closest, nastiest, most unpredictable presidential election in more than three decades. Not since Jimmy Carter and Ronald Reagan ran against each other in 1980 has the choice been so stark, the warnings from each candidate about the other so dire, the likely outcome so murky. As this year’s political conventions end, there’s no clear favorite. But watch the polls next week. The leader in the first polls conducted entirely after the convention ends has won the White House every time since 1948.
While the 1.2% Q2 GDP print was so bad that it sent both oil and stocks higher, now that bad news is again good news as it means no Fed rate hikes for the foreseeable future, a key reason for the weakness was the adjustment of historical data as part of the BEA's annual data revision. The full summary is shown in the chart below.
After the illiquid chaos of the last 24 hours, USDJPY is now pressing lower (Yen stronger) once again (under 103) after the gravely disappointing GDP data. Gold, and silver, are jumping higher and bond yields tumbling...
The Elites have successfully revolted against the political and economic constraints on their wealth and power, and now the unprivileged, unprotected non-Elites are rebelling in the only way left open to them: voting for anyone who claims to be outside the privileged Elites that dominate our society and economy.
But, but, but the dividend yield, the oil recovery? ExxonMobil is down almost 3% in the pre-market to 2-month lows as it misses earnings expectations drastically (+41c vs 64c exp.. below the lowest expectation of +55c). Production levels also missed expectations as it appears the oil glut has trickled down to motor fuels, dragging refinery margins notably lower.
"Some might interpret the phrase "comprehensive assessment" as a signal that further monetary easing could be forthcoming in September, while others may envisage the commencement of an overhaul of the current monetary policy framework."
In a paper published this month, the IMF seeks to study the relationship between GDP and sovereign debt restructuring using data from 1970-2010. Its main conclusion may be shocking: “the central finding of this paper is that sovereign debt restructurings with external private creditors can affect per capita GDP growth performance in the years after debt restructuring.“ And these are the people in charge of advising nations on managing their economy…
European stocks and Asian shares rose, U.S. equity futures were unchanged and the yen surged after the BOJ shocked markets and kept its QE program unchanged, defying market expectations of a big boost to its monetary stimulus program.
Obama’s ‘mono-polar world’ is a fiction, and the sooner that he and his Big Lie can be exposed (by the Western press, to the Western publics), the safer everyone will be. Discomforts on the parts of those who have promulgated and propagandized that lie will be vastly less than the disastrous alternative, which would destroy the world for everyone.
"They shouldn't be placed near our dogs, they shouldn't be anywhere in Turkey... They should be cremated and their ashes tossed into the ocean. There shouldn't be a trace of them anywhere in the country."
China and Russia will hold "routine" naval exercises in the South China Sea in September, China's Defence Ministry said on Thursday, adding that the drills were aimed at strengthening their cooperation. "This is a routine exercise between the two armed forces, aimed at strengthening the developing China-Russia strategic cooperative partnership," China's defense ministry said. It then added "The exercise is not directed against third parties", while trying to hold back laughter.
The way things are supposed to work on this planet is like this: in the United States, the power structures (public and private) decide what they want the rest of the world to do. If cooperation is not immediately forthcoming, they apply political, financial and economic pressure. If that still doesn’t produce the intended effect, they attempt regime change through a color revolution or a military coup, or organize and finance an insurgency leading to terrorist attacks and civil war in the recalcitrant nation. If that still doesn’t work, they bomb the country back to the stone age. This is the way it worked in the 1990s and the 2000s, but as of late a new dynamic has emerged.
"What’s certain is that Kuroda has to do something extreme or unthinkable if he wants to surprise..." ... Simply put, he disappointed; and Japanese stocks (down 500), bonds (down most since 2013), and USDJPY are all tumbling as Gold jumps.