Viernes 27/02/15 PBI (GDP)

[Fenix]

Missouri Auditor, Governor Hopeful, Dies Of Apparent "Self-Inflicted Gunshot Wound"

Over the past year, there had been a perplexing spike in suicide events involving bankers, especially those of Deutsche Bank and JPMorgan. Overnight, the first prominent public sector suicide shook the state of Missouri when its state auditor Tom Schweich died in St. Louis in what is said to be an apparent suicide, at the age of 54, around 9:48 am on Thursday, when Clayton Police Chief Kevin Murphy said paramedics responded to an emergency call from his home. Schweich was then taken to a hospital, where he was pronounced dead from a single gunshot wound. The Police chief was quoted by Kansascity.com, who said that “What we know at this point suggests an apparent suicide.”



Steen Jakobsen Warns Of Looming US Slowdown, "I'm Long Gold... And Adding"

Submitted by Saxobank's CIO Steen Jakobsen, via Tradingfloor.com,

* US Q4 growth revised lower, 0% looms later this year
* Europe has consistently beaten the US as regards expectations
* Neither EU nor EM have the heft to compensate when US growth fades

Let's kick off with some data – US Q4 revisions are out today and showed a slowdown from 2.6% to 2.2%.

This makes Q3 (2014) the peak in this cycle and I expect QoQ growth in the US will hit zero by Q3 or Q4. There are several factors for this including rising real rates, mal-investment into energy but most importantly – falling earnings in the US.

Societe General – Global Quantative Research has published an excellent report titled "Global Earnings Estimate Analysis – Is the US heading back into recession?".

I have borrowed the main chart – which shows how the six month change in 12-month earnings per share coincide with US GDP – not pretty and definitely not what Janet Yellen and Wall Street promised me less than two months ago.

US

US quarterly GDP has been 3.0% since 1970 and 2.6% since 2000 – with big swings:

mnb
Source: Bloomberg, Saxo Bank

I see a repeat of the growth pattern from late 2006 into 2008.

The market is focused on the telegraphed June potential Fed hike, but this week's speech by Janet Yellen clearly has got people thinking as she again introduced inflation concerns and “data watching”…. In other words, we need to again look at the actual economy and its performance which is a bad news for the happy campers in the equity market.

This chart will soon have relevance for all asset classes’ – It shows the outperformance on expectations from Europe over the US. May I add that this is exactly the opposite of the consensus two month ago, except for a few analysts. US data has consistently done worse than expected.

cesi

The point however is US data been worsening for a long time – I personally think we are in period where we yet again handover the growth engine from the US to emerging markets but via a significant new low in growth which will make Europe looks good. The expected path for me is:

Slowdown confirmation in the US over the next two months – that will kill the improvement in Europe by end of Q2 and leave it stable - not growing for the year. Meanwhile, emerging markets will come back as market realise the Federal Open Market Committee is years away from ‘talking up’ rates.

The June or September initial hike (if it comes) will still leave FOMC 100 basis points above Wall Street on its projected long-term path for growth – and remember that this is a Wall Street that is also too optimistic about future growth. The Fed sees 3.0-3.5% on the “dots” (charts that display expectations from individual FOMC members about the direction of interest rates) while Wall Street sees 2.5-3.0% on average.

In other words, there is room for a +100 bps correction to the sustainable long-term growth which will render 10-year rates 1.0-1.5% before we are over with this part of the cycle, which I label: Restarting the business cycle.

Restarting the business cycle as policy measures, QE and targeted “help” for banks is running if not out of time then out of impact on the economy. The inequality and low salary to GDP base simply can’t produce enough domestic consumption anywhere for the middle class to be able to afford the products the stock market listed companies produce.

The chart below is my July 2013 projection of rates – as you will note the “calendar” needs to be moved further forward… 2014 in chart is now 2015 due to Bank of Japan and the constant hope of “lift off” in rates, but the actual pricing rhythm has been relatively precise and predictive.

as
Source: Bloomberg, Saxo Bank

There are a few more charts which are worthy of perusal:

Port of LA traffic has collapsed. Yes, some of it is to do with strikes and unions but…. look at size of the drop! Deeper than March 2009!

port

Have no illusions – US short-term rates are rising:
interest rates

The outlook for Europe remains… more of the same:

pmi

Conclusion:

Macro

We are in a “in-between period” - where the US will slow down and ultimately hand over the growth engine to emerging markets by the earliest in Q4-2015 but firmly in 2016. The problem is that emerging markets are not ready due to high US dollar debt and waning commodity prices and Europe is still too weak to contribute net to world growth leaving a growth vacuum for new growth.

Europe will show one more month of improving data, then the global slowdown and EM and US will drag down the data to flat performance. Europe will still do better than expected in 2015 but not enough to constitute a real improvement yet.

usa
The wheels of commerce will move more slowly. Photo: iStock

Markets

I still only have one very strong view and that’s that 10-year fixed income will trade 1.5% even potentially 1.0% this year – everything else will lag this move by nine months. So in other words, if the low in yields comes in Q3 (as I expect) then the summer of 2016 will be the lift-off we all have talked about.

The US dollar will peak this quarter and will probably have peaked for this cycle. The weaker USD will stabilise commodities and emerging markets, creating the conditions for a hand over at the end of this year. The US dollar should be very sensitive to this relative slowdown in the US, especially as Europe is improving.

Gold remains top of my list for new investment – I’m long and adding – I have also re-sold Brent crude as the marginal cost of producing oil is still rising, meaning the global impact still is negative net-net. Jeremy Grantham makes the excellent argument that for world to benefit from falling energy prices it has to come with falling marginal cost. The opposite is the case now: lower prices, higher production/extraction costs.

The stock market…..Not time yet to call the top, but I'm preparing a special report on valuations and models, or the lack of it. The conclusion will be: There is potential for a 5-10% year but also for a 25% correction. The really totally binary, problem of course being that the market is very expensive by traditional standards, but this are hardly normal times. The expected return for reference over 1, 3 and 10 years can be seen below – the upside that first year still can carry the market higher, the downside the next 9-10 years!

[Fenix]

As IMF Default Looms & Tax Revenues Plunge, Greek Stocks & Bonds Tumble

As the rest of the world appears happy to assume everything is fixed in Europe (and if it's not, Draghi will buy it back to being awesome), Greece is looking unwell once again. Initial exuberance has faded dramatically in the last 3 days as IMF default warnings and a 22.5% plunge in tax revenues has sparked concerns about Greece's sustainability once again. Default (or restructuring) risk is soaring, Greek bond yields are surging, stocks sliding, and Greek banks (bonds and stocks) are getting hammered. As The Guardian's Helena Smith notes, "the country is in a strategic vacuum," and next week's T-Bill auction could be a major catalyst.




As the finances of Venezuela continue to deteriorate under the collapse of crude oil prices, the government of President Nicolas Maduro is becoming more paranoid and vindictive. However, the utter bust in oil markets pulled the rug out from beneath the Venezuelan economy. Maduro is cracking down on political opponents as the country deals with the economic crisis, and his pronouncements have become more paranoid as the economy has worsened. The economic situation may only grow worse. The government’s budget breaks even with oil prices at an estimated $117.50 per barrel. With no imminent rebound in sight for oil prices, Maduro is resorting to state-sponsored repression to quell growing opposition.




Another day, another currency hits a record low against the US Dollar. The Turkish Lira has collapsed in recent weeks since Erdogan rampaged against the 'independence' of the Central Bank and extended losses today after the economy minister said the government should discuss changing central bank regulations. Nihat Zeybekci said the Central Bank of Turkey’s independence should be conditional on the body taking “national interest” into account. Turkey continues to dump gold at record rates (money laundering to Iran via Switzerland?) and social unrest is on the rise (despite new laws to clamp down on protests) as the US consulate faces bomb threats.




Oil Prices Tumble As Pace Of Rig Count Decline Slows

With production and inventories at record levels despite the total collapse in rig counts, all eyes remain on Bake rHughes data for any signal the algos can use to mount a run. The total rig count fell for the 12th week, down 43 to 1267. This 3.3% decline is the slowest drop in 6 weeks and oil prices are sliding on this news. The key level to watch for WTI is $48.24 which moves it into the red for the 8th month in a row.

* *U.S. TOTAL RIG COUNT -43 TO 1,267, BAKER HUGHES SAYS
* *U.S. OIL RIG COUNT -33 TO 986, BAKER HUGHES SAYS

The pace of decline (and this future possible production) is dropping...

In theory, Oil prices should surge on this news...

They are not...

The excess supply, continued record production, and record inventory in the US (compared to refinery demand in Europe) has smashed the Brent-WTI spread to over $12.50 - the highest since Jan 2014...

As Brean Capital's Peter Tchir recent noted, despite the plunge in rig counts, so far there is no sign of contraction in output.

The problem is that not all rigs are created equal, and what we see is still a “net” number. We see the net number of rigs that are working. The reality is that some new projects continue to come on line and are very high producing wells, and some of what is being taken away, was either old, or projects that hadn’t yet been contributing production.

I for one, cannot claim to know what each and every rig in America can produce, let alone the world, but I am willing to bet there is at least one person out there with a spreadsheet that does. They can estimate production very well. These are the people who have been pounding on the table that this rig count is NOT helping production much, at least for the next 3 to 6 months. They are quickly learning the lesson of trying to get a few facts to stand in the way of a good meme, but I think they are about to get listened to. Especially as

* A Libyan pipeline is coming back on line
* Neither the Saudi rhetoric not willingness to pump, seems to have changed
* The “pump or die” needs of many leveraged companies is becoming more clear – some companies are in the unfortunate position of having to pump more at lower prices than at higher prices to meet cash flow needs
* Positioning once again got too bullish

So add to my list of worries for “risk on” trades, that while oil has stabilized, the next leg is likely lower.

* * *

Furthermore, the Front-month to 2nd month contango continues to surge - now at $2.30, a 4 year high...


"Rising U.S. inventories and the threat that expanding strike action might further reduce refinery runs prompting selling at the front of the WTI crude oil curve, with April futures falling to a $2.30 discount to the May contract, and the April Brent-WTI spread probing beyond the $12.50 mark," says Citi Futures energy futures specialist Tim Evans

[Fenix]

Stocks Head For Best Month Since Oct 2011 As US Macro Crashes To 12-Month Lows

US Macro data has collapsed to 12-month lows with 38 data 'misses' and only 6 'beats. Earnings expectations have plunged most since Lehman (over 5% in the last 3 months) hovering at 10-month lows. So it makes perfect sense that, unless we see a late-day collapse today, the S&P 500 will post the best monthly performance since October 2011.

Macro...

Earnings...

February...

MISS

* Personal Spending
* Construction Spending
* ISM New York
* Factory Orders
* Ward's Domestic Vehicle Sales
* ADP Employment
* Challenger Job Cuts
* Initial Jobless Claims
* Nonfarm Productivity
* Trade Balance
* Unemployment Rate
* Labor Market Conditions Index
* NFIB Small Business Optimism
* Wholesale Inventories
* Wholesale Sales
* IBD Economic Optimism
* Mortgage Apps
* Retail Sales
* Bloomberg Consumer Comfort
* Business Inventories
* UMich Consumer Sentiment
* Empire Manufacturing
* NAHB Homebuilder Confidence
* Housing Starts
* Building Permits
* PPI
* Industrial Production
* Capacity Utilization
* Manufacturing Production
* Dallas Fed
* Chicago Fed NAI
* Existing Home Sales
* Consumer Confidence
* Richmond Fed
* Personal Consumption
* ISM Milwaukee
* Chicago PMI
* Pending Home Sales

BEAT

* Personal Income
* Markit Services PMI
* Nonfarm Payrolls
* JOLTS
* Case-Shiller Home Price
* Q4 GDP Revision (but notably lower)

* * *

But apart from that... everything is awesome.

[Fenix]

Trading Oil For HFT Idiots: Lesson Complete

Who could have seen this coming? In lesson 101, we 'taught' the HFT idiots that you "Sell API, and Buy DOE Inventories." In lesson 102, we 'taught' the HFT idiots that you then "Sell the DOE Rip." Today, we finish with a big "told you so dance" as we 'taught' the HFT idiots yesterday, no matter what WTI will ramp insanely into the Friday NYMEX close after rig count data. Next we get the insta-dump...

Seriously!!!!

This ends the 7-month losing streak for WTI...



Why Does Maryland Have The Most Millionaires Per Capita? The Answer Might Make You Angry

Over the past decade, there has been one area of the country which has experienced a massive economic boom. Thanks to wildly out of control government spending, the Washington D.C. region is absolutely swimming in cash. In fact, at this point the state of Maryland has the most millionaires per capita in the entire nation and it isn’t even close.




Last quarter, in "This Is What Americans Spent The Most Money On In Q4" we showed that according to the first estimate of Q4 GDP data, the American consumer spent a whopping $20.4 billion in nominal dollars on healthcare, which also resulted in the biggest consumption contribution to GDP in years.

Today, following the first revision of consumer spending, we learn that in the fourth quarter Americans spent even more on healthcare, pushing the total up by $1 billion more, to a whopping $21.4 Bn, or 18% of all spending on goods and services in Q4.

This upward revision on healthcare, of which Obamacare was the primary source of mandatory spending, takes places even as the bulk of the key spending line items were revised lower following the revision.

In any event, the math is clear - the next time anyone asks you what Americans spent their so-called "gas savings" on in Q4, and why retail sales in the end of 2014 (and the start of 2015) were so weak,


The Net Neutrality Debate Proves The Opinions Are Far From Informed



Via Mark St.Cyr,

As many of you know the FCC approved what is now considered the greatest change in the fundamental underpinnings of how the internet will be both used as well as “allowed” to be used. The regulation now known as Net Neutrality will supposedly make the internet more “fair” or “equal” to everyone. All I’ll ask you to ponder is this: How’s your cable bill working out for you?

There’s a lot of known and unknowns still to be had as we sit here today. Why? Regardless of what you’ve heard or seen written in the press about this regulation; no one, and I do mean, no one knows the details to this new and sweeping regulation.

The reported 330-ish paged regulation was held in a way resembling sealed documents from a court case. The only people who read it are those that wrote it, and voted it into law. We now have to wait and see just how much everything changes.

Every future or current business, entrepreneur, as well as individual that accesses the web will be effected. Along with what everyone now takes for granted about the internet will also be changed. How much if any will remain the same, or even possible going forward no one yet knows. And that’s not hyperbole. Everything that one thought they knew or even assumed has now changed. Period.

What took my breath away was just how many bought into the premise that all this was about (as in solely ) was not allowing ISP or cable providers to throttle content. i.e., Not allow a cable provider to charge more to a content provider for faster access to deliver their content and nothing more. And that regulating the internet would now fix this issue.

The discussions and buttressing of arguments based on examples using monopolies and utilities by those pushing for it showed just how ill-informed many of the so-called “experts” were.

Just how little knowledge people have in their fundamental understanding of the differences between a real monopoly and a business impediment was just shocking. Although I shouldn’t have been so surprised. After all, this was Silicon Valley where unicorns and rainbows still are accepted business plans for a round of VC funding. (but that window is closing far faster than many realize)

Let me use an example to help illustrate. It’s meant to be over simplistic however, it’s far more instructive (in my opinion) than anything I’ve heard from those who are so-called “experts.”

Regardless of what you may think about your cable company or internet provider (and trust me I have no love for mine) the real issue in the end is what is known as “the last mile.” In other words the underlying issue of speed controls is in direct proportion to the ability for data to pass through efficiently in about the last mile to your home or computer. In other words the issue is basically from the pole to your house. Not from the provider to “the pole.” Again this is an oversimplification so please spare me the emails.

The issue that was becoming relevant to where both sides of the content providers along with the customers found themselves was the bottleneck effect happening at the customer’s home. i.e., within that last mile.

There’s only one way to resolve that issue. One and only one: You must build out the infrastructure to accommodate. And that requires money. Big money. The only question is who pays? You? The cable or ISP provider? Or the content creator. i.e., Netflix™ and others.

Currently the “individual” paying is irrelevant for this argument. No one would solely pay the exorbitant amount of money it would cost on an individual level. That would come later in a collective form of billing such as “service fees” of some sort down the road. So it’s left between the providers.

Contrary to what many are touting, a resolution (a private one as in a business to business decision and agreement) was being worked out. i.e., Netflix and others were in fact sitting down, working out monetary agreements and other particulars as to help remedy many current issues. The real issue was: It wasn’t what “issue politics” wanted. And wanted – “Right now!”

Think about it this way. The electricity coming into your home works generally the same way. And this was used by many as an underpinning of their argument to express the “utility” equivalency discussion. Personally I thought it was the exact argument to show just how little many understood rather than solidify it.

If you want more power into your home guess what? You have to pay for the infrastructure not only at your home (e.g. update your wiring and more) but you also might need to pay for the build out from the pole. If you want or need 3 phase power? You’re going to need to spend money. A lot of money. The power is there but if you want it, you’re going to need to pay.

The infrastructure to carry what you currently have you paid for when the home was built. The electric company didn’t pay, the home builder paid when the home was first constructed. If you want more power? You are going to pay. And here’s where this issue really strike home to the “utility” issue used by so many.

If you don’t like the power companies fees, service, regulations et al. Tough. Because you can’t go around them. You can’t build your own better, more customer friendly or compliant power company. They have a true monopoly. And no matter what you say or do, you are going to pay if it’s decided by the regulating authorities, that no matter what – you are going to pay.

Think not? You can go “off grid” you say? You’ll find a way to “hack.” Not so fast. There are reports nationwide where it is illegal to disconnect your home from the “power” companies. Many are finding themselves facing both criminal as well as monetary charges for trying to “disconnect.” Your cable bill (or broadband) is going to fall into this category in coming years. After all, if it’s now deemed as “utility” status why not? Think it’s just the electricity? How about another “utility?”

Try telling many city governments that you just spent $25,000 to update your septic system to a new state of the art standard so you don’t need to connect to the cities new and improved or proposed sewer system. Ask them why you need to pay for some “special assessment” bill of a few thousand dollars payable in 30 days along with receiving a monthly bill for something you don’t need or use?

The response will be: “Sorry, I just work here. Please pay the bill and make sure your property is accessible for the digging crews to connect your property. Have a nice day.” And that’s just the start. Welcome to the world of “utility.” and “monopoly.” Careful what you wish for – you just might get it!

If you think those in the industry as in “Silicon Valley” have more of an understanding that you or I do. All I’ll do is point you to the most recent as well as instructive or insightful understandings on this issue by one of net neutrality’s foremost cheerleaders.

I suggest you watch this short exchange that took place on CNBC™ as to why this must take place and why its necessary for the good of the internet. Then ask yourself this question: The internet just moved from anything you knew it to be, into something no one has any understanding or clue as to what it will morph into from here. All based on a movement propelled on the understandings and insights professed by so-called “experts” as those in this video.

Personally I am stunned on just how little of an understanding of business those in Silicon Valley have. Yet maybe I shouldn’t be. For there is no where else a business can be worth billions in market cap that either can’t turn a profit, or better yet, can’t keep a customer if they so dare as to charge a penny.

But that’s now all about to change too. Because once new “regulation” concerns become part of the mix Wall Street has to think about when deciding who, what, or where will the hot money (if there’s any left) will flow: Silicon Valley is going to find itself with not as much love as they once garnered. For nothing snuffs out the spark of VC free money for “hacking” or lets say “Innovation” like the threat and over arching hand – of regulation. Welcome to the land of utilities. Hope you like the new neighborhood.

Forget about the once “wild west” of hackers. That’s just been handed its death knell by their own hands. For one thing that’s far mightier than a coders hack is a government bodies decree of regulation. There’s no neutrality nor nothing “free” once you allow and call for the interjection and oversight of both the government along with its enforceable hand of law via regulations.

Just wait until all the details become known as well as imposed. I have a feeling net neutrality is going to feel a whole lot more like “net injustice” than anyone dared contemplate. Let alone imagined

[Fenix]

Stocks End Best Month Since Oct 2011 With A Whimper

Just one thing... Spock's Dead, Stocks Red (and AIG's Benmosche died too)

* * *

While February was the S&P's best month since October 2011 (amid collapsing macro data and earnings), the day and week was on the ugly side... so we thought this was more appropriate than "everything is awesome" for a change...

* * *

Despite the best efforts to shrug off the dismal data and ramp the open, it appears The Fed's Stan Fischer and ECB's Constancio seemed to take the liquidty glow off the market...

* *FISCHER: FED BALANCE SHEET TO EVENTUALLY SHRINK TO $1-$2 TLN (wait what!?)
* *FISCHER SEES 'NO GOOD REASON' TO TELEGRAPH EVERY POLICY ACTION (so a June surprise is possible?)
* *FISCHER SAYS JUNE, SEPT. GET MAIN WEIGHT OF PROBABILITY
* *FISCHER SAYS ASSUMPTIONS ON RATE TIMING COULD CHANGE
* *CONSTANCIO: ECB TO FIND OTHER STIMULUS IF BONDS IN SHORT SUPPLY (ECB QE might be smaller?)

Stocks closed a nasty shade of red today... Nasdaq's worst day since January

On the week, Dow, Trannies, and S&P 500 end red...

Quite amonth for the NASDAAPL..

But - all that matters is that this was the S&P's best month since October 2011...

AAPL did not help matters - aside from the epic farce meltup on news of the Chicago PMI crash... AAPL's worst week since 1/16...

Treasury yields dropped 9-12bps on the week (2Y -1bps only)...

The US Dollar surged this week to the highest since September 2003 - seemingly after wage inflation showed up in the CPI data... led by a plunge in EUR and Swissy

EURUSD ended the week below 1.1200 ahead of next week's QE start...

The 8th monthly rise in a row for USD Index...

Commodities were generally flat to very slightly higher today... with only oil down on the week...

But crude oil ramped into the close - in a perfect deja vu of last week...

Crude oil broke its 7-month losing streak - the same length as the 2008/9 drop...

* * *

Stocks were February's leader with Bonds and Precious Metals worst...

Year-to-Date, Silver remains the leader with gold and bonds just outperforming stocks...

Year-to-Date, US stocks don't make the Top 10 with Russia and Saudi Arabia leading (in USD terms)...

[Fenix]

Based on Bloomberg data, Doral Bank is the 3rd largest (by assets) bank in Puerto Rico...or rather was. After a 58% collapse in the share price today, news broke after the close:

*PUERTO RICO'S DORAL BANK PLACED UNDER FDIC RECEIVERSHIP, BANCO POPULAR AGREES TO BUY DORAL BANK OPERATIONS

It appears Non-Performing Loans were over 40%. Popular will take the deposits (and 8 of Doral's 26 branches) and the FDIC eats the bad debt (estimates to cost the Deposit Insurance Fund (DIF) will be $748.9 million).


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5 Things To Ponder: Weekend Catch Up

Submitted by Lance Roberts via STA Wealth Management,

With the "Great Greek Tragedy" now behind the markets, for the time being, all eyes have turned towards the Nasdaq's triumphant march back to 5000. (The graphics department at CNBC have been working overtime on banners and bugs for when it happens....watch for them.)

However, as I penned earlier this week in "The Run For Nasdaq All-Time Highs":

"The chart below shows the Nasdaq Composite index in both nominal and inflation-adjusted terms using the CPI index as the proxy for the inflation adjustment."

Nasdaq-Comp-Real-Nominal-022415

"As shown, the nominal peak of the Nasdaq Composite occurred in early 2000 at 5132.52. As of yesterday's close of 4960.97, the Nasdaq sits within striking distance of that nominal high.



However, in order for the Nasdaq to enter into the 'real all-time high club' it would currently require an additional gain of 2149.52 points or an additional 43.3% gain from current levels. While that seems like a rather lofty goal, it would only require the top 20 stocks in the composite index to just a little more than double in value from current levels."

The near vertical push in the Nasdaq is eerily reminiscent of the run in the late 90's. While makeup and valuations may be different today, the "risk" remains that prices cannot remain elevated indefinitely. More importantly, the greater the deviation in price from its long-term moving averages the great the eventual reversion will be. That is just an investment reality. But as I concluded:

"...at the moment, the perceived 'risk' by investors is 'missing the run' rather than the potential destruction of capital if something goes wrong. This is the opposite of what 'risk' management and effective 'risk' controls are about in portfolio management. While this is always the case in late stage bull-markets as exuberance overtakes logic, it is also why investors are damaged so badly during the ensuing mean reversion process.



It is always important to remember that for every bull market there will eventually be a bear. It is the nature of the markets and the reality of full-market cycles."

For now, it is all about the hopes of a cyclical upturn in the Eurozone economy supported by the ECB's QE program starting next month. Market participants have been bidding up stocks globally in anticipation that the ECB's program will pick up where the Fed left off, and the flood of liquidity will find its way back into asset prices. For now, the bullish bias clearly has the leading edge for now.

This week's reading list is a compilation of various articles that I did not get a chance to read this week that may provide some clues as to what happens next. As always, I try and provide a balanced reading list of perspectives. Whether you agree with a view or not is irrelevant. What is important is to consider both sides of every argument equally to eliminate confirmation bias.

So, grab a cup of your favorite beverage and enjoy that we finally seem to be getting a break from this winter's cold.

1) Do Eerie Parallels Presage A New Crisis by Stayajit Das via Financial Times

"Mark Twain reputedly stated that history does not repeat but it rhymed. In an eerie parallel to 1997-98, falling commodity — especially oil — prices, a rising US dollar and potential increases in US interest rates may presage a new financial crisis.



Weak growth, high debt levels, disinflation or deflation, policy driven destructive competitive devaluations, inflated financial risk taking and mispricing compounds the problems. The impending crisis may develop as follows."

But Also Read: James Bullard Says Its Time To Start Raising Rates via CNBC



2) Get Your Rally Caps On! by Michael Kahn via Barron's

"One and all, big and small: The stock market is at new highs and in the absence of a crushing increase in interest rates by the Federal Reserve, there is little in the way to stop it.



To be sure, there are a few problems such as the questionable performance of some typical bull market leading sectors like financials in particular. But with the proxy for the 'average stock' -- the New York Stock Exchange Composite Index – hitting new highs and market breadth still quite positive, it's hard to fight the tape."

NYSE-022615

"Tuesday, the NYSE Composite finally edged above the resistance zone in place since July of last year. While relatively low volume continues to confound chart watchers, momentum is still strong and all measures of the trend, from simple moving averages to complex directional movement indexes, are positive."

But Also Read: The Countdown To The 2016 Market Crash Begins by Paul Farrell via MarketWatch



3) Can Stocks Rise In Spite Of Weak Earnings by S. Krisiloff via Tumbler

"According to Factset, S&P earnings growth for the calendar year 2015 is now expected to be just 2.9% (vs. 8.2% expected growth on Jan 1). Still, most people seem to believe that the S&P 500 will have a decent year. How frequently does it happen that earnings growth is weak but performance is strong?



Since 1900 earnings have grown by less than 5% in 53 years. The S&P 500 has still managed to rise in 33 of those years. Below is a list of all those 33 years.



It's not a bad record for the S&P 500 to have risen 33 out of these 53 years (especially considering that earnings growth was negative in 45/53 years), and on average it has risen by a lot. But when you factor in the starting conditions in most of the years that the S&P rose, they were much different than they are today."

Skrisiloff-Table-022615

But Also Read: Equity Valuations, Recessions and Stock Market Declines by Doug Short via Advisor Perspectives



4) Crispin Odey Warns This Is The Best Shorting Opportunity Since 2007 via ZeroHedge

"We have seen though some strange things, with economics 101 turned on its head. We've seen that falling prices produce more supply, as the biggest producers see that they can take market share and use the opportunity by reducing average costs through excess production. We've seen that in the oil, minerals and iron ore industries. We have also seen in the last couple of years that as bond yields fall, governments are able to issue more debt.



But this time round the problem we have as well is that politics will start to rear its head and we are left to deal with politicians who are increasingly critical of the capitalist system's ability to allocate capital and provide for society.



For me the shorting opportunity looks as great as it was in 07/09, if only because people are still looking at what is happening and believe that each event is an individual, isolated event. Whether it's the oil price fall or the Swiss franc move, they're seen as exceptions....



This down cycle is likely to be remembered in a hundred years, when we hope it won't be rated for 'How good it looks for its age!'. Sadly this down cycle will cause a great deal of damage, precisely because it will happen despite the efforts of the central banks to thwart it."

But Also Read: Stay Out Of The Extremes by Cullen Roche via Pragmatic Capitalism



5) The Death Of Active Fund Managers by Justin Fox via Bloomberg View

"Managers say they haven’t changed, the market has. The easy money climate of near-zero interest rates engineered by the Federal Reserve has artificially inflated prices of lower-quality U.S. stocks, they say, punishing those who focus on businesses with the best fundamentals.



With all the unskilled investors departing, pros will be left to square off against only other pros. The lack of retail punters and their harvestable mistakes cuts off one of the most reliable historical sources of alpha for sharp-eyed managers.



The result is an arms race, in which active managers put more and more resources into beating their peers but find that their relative position hasn’t improved at all. Some strategies will work for a while -- such as, for the past few years, activist investing, which is like active investing only much, much more active. But only for a while."

Read Also: The Active Fund Model Is Not Fit For Purpose by John Authers via Financial Times

Bonus Read: The Risks To The Bull Thesis Are Global by Jeff Snider via Alhambra Partners

Chart Of The Day: We Are At The Stage Where I Doubt My On Sanity by Albert Edwards via Business Insider

SP-Macro-022515

"Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies and cuts through to the essence of the evolutionary spirit." - Gordon Gecko, WallStreet

Have A Great Weekend

[Fenix]

As we warned was entirely possible, with just hours to go until The Department of Homeland Security runs out of money at midnight:

* *HOUSE FAILS TO PASS STOPGAP FUNDING FOR U.S. HOMELAND SECURITY

While more votes are expected tonight (and this weekend), as The Guardian reports, a handful of Republicans defied Boehner's leadership and joined with Democrats to defeat the bill.

* *MCCARTHY SAYS HOUSE COULD HAVE MORE VOTES TODAY, THIS WEEKEND

As The Guardian reports,

John Boehner’s first attempt to keep the Department of Homeland Security from running out of money at midnight failed in the House of Representatives after dozens of Republicans baulked at his plan to fund it for just three more weeks.

The House speaker had been hoping to prevent a shutdown by buying time to negotiate with conservatives in his caucus over their demands that the bill include a measure to prevent Barack Obama from deferring deportation of undocumented immigrants.


But even this three-week stop gap was rejected by 30-odd Republican congressman who defied their party leadership and joined with Democrats to voted against the bill by 224 to 203 just after 5pm. The department runs out of funds at midnight.


Democrats resisted Boehner’s proposal in the hope of forcing House Republicans to follow their colleagues in the Senate and agree a one-year funding bill.


But the impasse now sets up a dangerous game of chicken between the parties as each tries to see who will blink first before current funding for the department expires at midnight.

* * *

What happens if we go into the weekend without a DHS deal? In the event of a shutdown, the vast majority of DHS employees would stay on the job. DHS Secretary Johnson said earlier this week that about 30,000 of DHS's approximately 240,000 employees would be furloughed. The rest would be considered exempt and most would have to work without pay.

For everyone else, a brief shutdown won't have an impact. Should the shutdown drag on, this is how DHS official describe the "state-less" hell that would be unleashed:

FEDERAL EMERGENCY MANAGEMENT AGENCY

* If a major snowstorm or earthquake or even terrorist attack hits a city or state, DHS won’t be able to send the state federal funds for recovery.
* State and local authorities rely on federal grants to afford many of their first responders, but new grant requests won’t be processed – potentially forcing cities and towns across the country to cut back on police, fire and ambulance services.
* Each month, FEMA trains thousands of state and local emergency personnel how to handle “very specialized” cases such as those involving Ebola, anthrax or sarin gas, but that training will stop.

CUSTOMS AND BORDER PROTECTION (INC. BORDER PATROL & CUSTOMS OFFICERS)

* 500 recruits currently in training in Geor gia will be sent home, wasting significant amounts of taxpayer money already invested in them and possibly losing them as recruits.
* CBP won’t be able to replace or upgrade aging surveillance systems along the Southwest border
* Certain criminal cases against those trying to cross the border illegally or smuggle prohibited items into the United States will slow or stop, especially after lawyers at CBP are sent home.

SECRET SERVICE

* The Secret Service won’t be able to make certain security upgrades at the White House in the wake of several recent breaches there.
* The 2016 presidential candidates could be put at risk because the Secret Service won’t be able to pay “for the things we need” to protect them.

IMMIGRATION AND CUSTOMS ENFORCEMENT

* ICE will miss out on hundreds of millions of dollars intended to address “unaccompanied minors” and families still crossing the Southwest border illegally.

TRANSPORTATION SECURITY ADMINISTRATION

* “Nothing to report here,” though training and other “non-essential administrative functions would cease.”

* * *

As SMRA notes, If a shutdown occurs, we think it would be brief. The political repercussions of shutting the DHS could be negative, especially given recent events including threats to U.S. shopping malls and today's arrest in Brooklyn of three individuals charged with aiding the Islamic State.

In the event of a shutdown, the vast majority of DHS employees would stay on the job. DHS Secretary Johnson said earlier this week that about 30,000 of DHS's approximately 240,000 employees would be furloughed. The rest would be considered exempt and most would have to work without pay.

DHS hasn't published a detailed breakdown of employees that would be furloughed or exempt like it did in advance of the 2013 government shutdown. But the estimates published then serve as a useful proxy for what would happen in the event of a shutdown after Friday. The following table summarizes employees at the agencies within DHS that accounted for the great majority of employees in advance of the 2013 shutdown, and shows the number expected to be furloughed and the number expected to be exempt at that time.

As the table shows, USCIS accounted for 5.7% of employees in 2013, but just 1.1% of furloughs. As we noted above, USCIS doesn't rely on the annual appropriations process. Presumably its exempt workers would get paid, but we're not entirely clear on that. In the event of a shutdown, the operations of USCIS would for the most part continue. However, that may be a moot point for the President's immigration policies unless a higher court reverses the stay imposed by the court in Texas.

[Fenix]

"Monetary Policy Is Bankrupt" Dr. Lacy Hunt Warns "Bonds, Not Stocks, Are A Good Economic Indicator"



Submitted by Erico Matias Tavares via Sinclair & Co.,

In Search of Solutions – An Interview with Dr. Lacy H. Hunt

We had the great pleasure of speaking with Dr. Lacy H. Hunt on the current state of the economy, the limitations of monetary policy and potential solutions to the overindebtedness problem in the main global economies.

Erico Tavares: Dr. Hunt, thank you for being with us today. Your firm manages over $6 billion in treasuries. With the S&P500 at record highs, do you share equity investors’ enthusiasm with the economic prospects of America?

Lacy Hunt: I think the S&P is disconnected from the fundamentals in the US economy. Growth last year was a quarter slower than it was in 2013. We’re on the cusp of either zero inflation or deflation. Corporate profits using the Bureau of Economic Analysis numbers, compiled using data from the Internal Revenue Service, showed year over declines in all the first three quarters of last year (4Q is not yet available). In the third quarter, the after-tax profits adjusted for inventory gains/losses and over/under depreciation were 7% below a year ago.

The standard of living declined again in 2014. And a lot of the growth we had in 2014 really was a massive building of inventories, which is often the case when stock prices are high and top line is decelerating.

The economy enters 2015 in very weak shape. None of the big ticket sectors are doing well. Capital spending is declining, being paced by extreme weakness in oil & gas drilling, which has really been the driving force in manufacturing over the last four years. The best you can say about the housing sector is that it is flat. Not a very important sector.

Vehicle sales are below the best levels of last year and the trade sector is deteriorating. It is very difficult to move the US economy forward by selling things over the counter and through the shopping cart. The US economy is very fragile. And the fragility is highlighted by the fact that firms simply do not have pricing power.

ET: Historically the S&P used to lead the economic cycle by a few months, sometimes there was a lag. In a sense the signaling of equity markets has been muffled by the excitement about central bank intervention. Is that correct?

LH: Well I’m not an equity investor but I don’t believe in the wealth effect. While a theoretical possibility, it is not supported by economic fact. Let’s go back and look at a few historical examples.

The stock market did not turn down in 1927 and then the Great Depression started two years later. The stock market only turned down in 1929 in the same year as the economy. The stock market didn’t turn down in 1998, two years before the recession. It turned down coincidentally. The fact of the matter is the stock market is not a very good indicator. The wealth effect is a theoretical possibility but no one can really measure it for the reasons that I discussed.

Another problem here is that the threshold studies done by econometricians who look at folks that have income less than $130,000 can’t even find a wealth effect and for good reason. These folks don’t have equity holdings. Upper income individuals do, but they are not income constrained. So the fact of the matter is the wealth effect is a theoretical possibility but nothing more than that. And the stock market is not a good guide to the economy.

ET: In a sense the search for yield pursuant to major central banks around the world pushing interest rates all the way down to zero has largely placed investors in the same side of the market. Just being moderately cautious has caused many equity fund managers to underperform their benchmarks, particularly since early 2013.

As long as central banks continue to pump money and maintain interest rates at zero, do you see it as inevitable that equities will just have to keep going higher?

LH: I’m a treasury investor and I can be anywhere in the curve. The Federal Reserve has made very significant pronouncements about economic growth. They have been overly optimistic at their final forecast in 2013 for 2014, projecting 3.2% growth which turned out to be 2.5%, and that may even be revised lower. Their inflation forecast was wide off the mark.

As treasury investors we can’t afford to listen to the Fed. As a matter of fact we positioned ourselves at the long end of the curve, and have been there for a long time, and during this whole time period they were talking very optimistically about the economy, inflation and so forth, and none of those materialized.

I’m only going to defend what is going on in the bond market and the bond market is a very good economic indicator. When bond yields are very low and declining it’s an indication that the same is happening to inflation and that economic activity is weak. The bond yields are not here for any fluke of reason. They are here because business conditions in the US and abroad are quite poor.

ET: Keynesian theory has pretty much dominated macroeconomic thinking over the last thirty years. Its “consume now, pay later” policies provide a short-term boost and fit well with politicians’ desire to prop up the economy on their watch. A large number of economists in government, private sector and academia, believe that adding more debt to a debt-inspired crisis is the only solution, and that at some point the economy will reach escape velocity and help pay down those debts.

Do you subscribe to this view, especially at these very high debt levels in the economy?

LH: I think that monetary policy at this stage of the game is largely bankrupt. There is certainly nothing that they can do.

Monetary policy works through price effects, quantity effects, the potential wealth effect and the currency depreciation effect. None of those mechanisms are operative.

The price effects don’t work because the short-term interest rates are at the zero bounds, so that’s out of the picture.

The US central bank, the ECB and the Bank of Japan have greatly expanded their balance sheets, but that’s not printing money. Money is an increase in deposits that are available to households and businesses. US monetary growth today is under 6% in the last 12 months, which is lower than when quantitative easing started. The Bank of Japan has doubled the monetary base in the last two years and yet M2 growth is 3% and a little bit more. The same is true in Europe.

Moreover, money alone does not determine economic activity. The velocity of money has fallen to a six-decade low in the US. It has been falling substantially in Europe, as in Japan. When you look at money growth and velocity it’s hard to see where nominal growth can be much better than 1% in Europe and Japan and no better than 2-2.5% in the US. Monetary policy does not benefit from quantitative effects when economies are extremely over indebted. The velocity of money falls and the banks are undercapitalized – banks don’t make loans based on excess reserves, but rather based on capital.

The currency depreciation option by excessive monetary liquidity does provide a transitory benefit. We saw this one when quantitative easing 1 was started in the US, but that’s a transitory benefit: other countries eventually retaliate making everyone worse off.

And the final option is the wealth effect but there is no empirical support for it.

So there’s really nothing that monetary policy can do and the fact that inflation in the US is substantially lower than when all of these quantitative easing efforts started is an indication that such policies are a bankrupt effort.

ET: So it seems that we are coming to the end of the rope here. We tried this one out, it did not quite work as the central bankers had expected it would, certainly the inflation is not here, but it did avoid a deflationary crash right?

LH: That’s not clear because the results are not in and the fact of the matter is that according to new research by the McKinsey Global Institute, as well as others like the Geneva Group, the world is substantially more levered now than at the time of the failure of Bear Sterns and Lehman. They calculate that public and private debt is now $57 trillion greater than in 2007, or 17 percentage points higher relative to GDP.

The overindebtedness buys a transitory gain in economic activity in lieu of a decline in future spending and, moreover, extreme overindebtedness cuts into the economic growth, it increases the risk of disinflation, if not deflation, and the fact of the matter is that the monetary efforts have probably made the world more unstable.

ET: It is said that organizations in crisis tend to repeat the same mistakes, only faster and with more intensity. Japan certainly seems to be following down that path with their latest rounds of aggressive quantitative easing.

LH: I think that’s an excellent example. In their panic of 1989 public and private debt was about 400% of GDP, more or less. It’s currently at 650% of GDP. They have greatly increased the indebtedness of the overall economy but the level of nominal GDP is no higher than it was 23 years ago. The results have been very, very poor.

ET: A grounded perspective might have prompted a rethink of the current stimulative policies, but it seems too many people are vested in the status quo. Given your extensive experience as a senior economist across a number of prominent institutions, including the Federal Reserve system, is this resistance to change something that concerns you?

LH: I’m not in the mind changing business; I’m in the investment management business. I am just trying to execute a fiduciary responsibility to our clients and we are operating under the assumption that quantitative easing will not be successful. We’ve operated under that assumption in the US.

Those who believed that economic growth would accelerate and that inflation would go up thought that investing in long treasuries would be a bad idea, and that notion did not pan out. Investors who saw the failure of quantitative easing, poor economic performance and low inflation were amply rewarded by being long long-term treasuries.

And so it is not my objective here to change how the world thinks. I’m trying to execute a fiduciary responsibility and that’s all.

ET: OK but let’s consider a non-conventional solution and how that might impact your current assessment. The major central banks could get together and say you know what, we have too much debt in our books, our economies are overindebted, let’s write off a chunk and move forward from here.

LH: Unfortunately those excess reserves are owned by the banks. If you wrote them off you would destroy a substantial portion of bank assets and the commercial banks and the other holders would go into a negative situation.

It is a flight of fancy to assume that these debts can be written off. That’s certainly not an option in the US, maybe the Europeans could do it but it would likely have the same effect. It is just not a realistic choice and it’s not practical. The banks are already terribly undercapitalized, you could not take away $3 or $4 trillion dollars’ worth of assets from the system.

ET: What about some good ol’ fashion money-printing? In other words, why doesn’t the government settle its debts with cash envelopes as opposed to having to issue more bonds? Of course this is highly inflationary, but isn’t deflation what the central banks are desperately trying to avoid?

LH: Here again, in the case of the US you would have to abandon the fractional reserve requirement system which I don’t think is doable. And I’m doubtful it is doable in Europe. We can talk about it as a theoretical possibility but it does not really exist as an option.

The fact of the matter is that a debt is an increase in current spending and decline in future spending unless the debt generates an income stream to repay principal and interest. More debt that is either unproductive or counterproductive is the path towards instability, disinflation and poor economic growth, not better economic performance.

ET: So how do you see all of this unfolding given the dearth of solutions at this point?

LH: I think it means we are in a protracted period of underperformance, minimal inflation, possibly deflation.

There are fiscal policy solutions, but they require shared sacrifice, explaining complex ideas to a public that is ill informed and strong political leadership, and we don’t have that in the US, you don’t have that in Europe, they don’t have it in Japan.

So for all intents and purposes fiscal policies is out of the game and in that environment the political sector turns to the central banks, but the fact of the matter is that the central banks’ bag of tricks is empty.

ET: Can you give an example of a fiscal policy that should be considered to address the problem?

LH: Well, you have to take advantage of the fact that we learned a great deal about the government expenditure multipliers and government tax multipliers.

We’ve learned that contrary to Keynesian theory the government expenditure multiplier is zero, if not slightly negative. So there may be a transitory benefit to deficit spending but it is so quickly reversed that ultimately an expansion in government expenditure financed with debt will make economies weaker. So what you have to do is scale back government spending, particularly those types of spending that go to finance daily needs. But that’s politically impossible to do.

And at the same time you basically need to shift income based taxes to consumption based taxes, but you have to address the regressivity of the consumption based taxes. The multipliers of consumption based taxes are minus one, the multipliers on income based taxes are in the minus two to minus three.

These concepts are too difficult for the general public to understand. So they really can’t be explained to them. And furthermore you don’t have the strong political leadership and it has to be done in the context of shared sacrifice.

So there are fiscal policy options but they are not achievable. Now occasionally you get into an unusual circumstance where an exceptional individual steps forward and the country understands the nature of its problem. A number of years ago Canada had a very far-sighted financial leader by the name of George Martin who developed a program of shared sacrifice and was able to turn the country around. But people bought on to the program because everybody’s ox was getting gored a little bit, and Martin had the rare capability of being able to explain the efficacy of the overall program.

I don’t see that happening in the US and Europe. Hopefully I am wrong on that, but the fiscal policy options are there although simply not achievable in the current environment.

ET: So a concern is that in Southern Europe people have been asked to make the sacrifice and implement austerity, but the results have been very dubious, where Greece provides an extreme example.

LH: I don’t think that was an effective program. You have to move away from the government expenditure programs, but at the same time you cannot contract your economy. You need to make a shift from income based taxes, which have a high negative multiplier, to consumption based taxes, which have a low negative multiplier, and you have to do this in the context of not increasing the debt of the government institutions. And that’s like trying to take a camel through the eye of a needle.

ET: You need a very good driver for that!

LH: Yes you do.

ET: Dr. Hunt, thank you very much for your time and your insights. This has been a really insightful discussion.

LH: That’s great, nice to be with you.

[Fenix]

Spot The Odd Vol Out
Tyler D.

Despite the well-managed collapse of Equity, FX, and Rates volatility in February, the Oil complex is exhibiting Lehman-Depression-like levels of implied vol still as central planners seem unable (or unwilling) to manipulate the energy complex (rock of inflation and hard place of 'consumer tax cut'?). As WSJ reports, this volatility is roiling market makers, luring fast-money traders (and algos) and discouraging long-term investors from hedging/positioning. As one asset manager noted, "we like volatile two-way markets... but this is too high for us."

Perhaps, just perhaps, given the potential difficulty/disagreement of central banks agreeing on how best to manipulate oil prices (and thus lower vol), it is the only (along with The Baltic Dry Index) indicator of the imbalance between excess mal-investment-driven supply and Greenspan's "Depression-like global demand."




Few asked throughout the Ukraine civil war is just whose side is China leaning toward, after all the precarious balance of power between NATO and Russia had resulted in a stalemate in which neither side has an obvious advantage (even as the Ukraine economy died, and its currency hyperinflated, waiting for a clear winner), and the explicit or implicit support of China to either camp would make all the difference in the world, and perhaps the world's most formidable axis. Today we finally got the answer. China's ambassador to Belgium, was quoted as blaming competition between Russia and the West for the Ukraine crisis, urging Western powers to "abandon the zero-sum mentality" with Russia. Reuters assessment of Xing speech: "an unusually frank and open display of support for Moscow's position in the crisis." At least it is not a warning to the US to back off or else. Yet.




Just nine hours after tweeting "Putin annexed Crimea and is now handing over Siberia to the Chinese," and three ours after calling for a "Russian Spring" march, prominent Vladimir Putin critic and opposition politician (who back in 1997 was also deputy Prime Minister of the Russian Federation) Boris Nemtsov, has been killed in the center of Moscow. As The BBC notes, the Russian opposition politician and former deputy PM was shot to death on a Moscow street. Life News is reporting he was shot in the chest four times on a street very close to Red Square.

[admin]

China recortará tasas de interés de referencia en 25 puntos básicos

sábado 28 de febrero de 2015 09:00 GYT
Imprimir
[-] Texto [+]
PEKÍN (Reuters) - El banco central de China dijo el sábado que recortará su tasa de interés de referencia en 25 puntos básicos, a 5,35 por ciento.

El Banco Popular de China dijo que liberalizará aún más las tasas de interés y elevará el límite del rango flotante para la tasa de ahorro a 1,3 veces la tasa de referencia.

El banco central dijo que recortará la tasa referencial de ahorró en 25 puntos básicos a 2,5 por ciento.

[admin]

China recorta nuevamente tasas de interés para enfrentar débil demanda y riesgo deflación

PEKÍN (Reuters) - El banco central de China bajó el sábado las tasas de interés, a pocos días de la reunión anual del Parlamento chino, en un nuevo esfuerzo para apoyar a la segunda mayor economía del mundo en un momento de desaceleración y de creciente riesgo de deflación.

El banco central dijo que llevó a cabo un recorte de 25 puntos básicos de su tasa de interés de referencia al 5,35 por ciento, su segunda rebaja en poco más de tres meses, y un recorte idéntico en puntos básicos en la tasa de interés clave para los depósitos, al 2,5 por ciento.

"El objetivo de la rebaja de los tasas de interés es mantener un nivel de las tasas de interés reales acorde con las tendencias fundamentales del crecimiento económico, de los precios y del empleo", dijo el Banco Popular de China (BPC) en un comunicado publicado en su sitio web.

"Esto no representa un cambio en la dirección de la política monetaria", agregó.

Sin embargo, usando un nuevo lenguaje para describir su política monetaria, el Banco Popular de China dijo que el nuevo recorte de las tasas crearía un entorno monetario "neutral y apropiado" para China.

La decisión se produjo cuatro semanas después de que el banco bajara el nivel obligatorio de las reservas en efectivo de la banca, el llamado coeficiente de reservas obligatorias, lo que hacía suponer a algunos expertos que el Banco Popular de China estaría cada vez más preocupado por el riesgo de deflación.

La referencia a "tasas de interés reales" en el comunicado del sábado también implicó que el descenso de los precios fuera un factor importante a la hora de aprobar una nueva rebaja en las tasas.

Un artículo publicado en el periódico oficial del banco central el 25 de febrero advirtió que los riesgos de deflación eran más altos de lo que muchos pensaban.

"El recorte de tasas que se produce en la primera semana después de las vacaciones por el Año Nuevo Lunar subraya la esperanza del Gobierno de aumentar la confianza empresarial", dijo Li Huiyong, economista de Shenyin & Wanguo Securities en Shanghái.

"La deflación es el máximo enemigo. Sólo a través de la flexibilización continua (recortes de tasas y del coeficiente de reservas obligatorias), podemos aliviar el círculo vicioso de contracción económica", agregó.

A nivel mundial, alrededor de 20 bancos centrales han aliviado la política este año para contrarrestar las presiones deflacionarias, impulsadas en parte por la caída de los precios del petróleo.

[admin]

Copper March 02,11:39
Bid/Ask 2.6763 - 2.6770
Change -0.0106 -0.39%
Low/High 2.6702 - 2.7081
Charts

Nickel March 02,11:38
Bid/Ask 6.2883 - 6.2974
Change -0.0794 -1.25%
Low/High 6.2611 - 6.4100
Charts

Aluminum March 02,11:39
Bid/Ask 0.7961 - 0.7968
Change -0.0039 -0.48%
Low/High 0.7959 - 0.8088
Charts

Zinc March 02,11:39
Bid/Ask 0.9289 - 0.9294
Change -0.0033 -0.35%
Low/High 0.9285 - 0.9449
Charts

Lead March 02,11:39
Bid/Ask 0.7833 - 0.7837
Change +0.0063 +0.81%
Low/High 0.7770