Viernes 11/03/16 Precios importadores y exportadores

[Fenix]

Why US Automaker Stocks Are Underperforming (In 1 Simple Chart)
Submitted by Tyler D.
03/10/2016 - 11:30

Since the end of 2013, US automaker stocks have dramatically underperformed the market. This bewildered many as auto sales surged on the back of easy credit and the entire industry was proclaimed a great success. However, the reason for the underperformance is simple - stock investors discount the future and with a mal-investment-driven excess inventory-to-sales at levels only seen once before in 24 years, they know what is coming next.

Do Any Of The Current Rallies Pass "The Sniff Test"? (Spoiler Alert: No!)
Submitted by Tyler D.
03/10/2016 - 10:17

Everything from iron ore to copper to the Baltic Dry Index to stocks to bat guano is rallying. The problem is not a single rally passes "the sniff test:" is the rally the result of changing fundamentals, or is it merely short-covering and/or speculative hot money leaping from one rally to the next? Every one of these rallies is bogus, a travesty of a mockery of a sham of price discovery, supposedly the core function of markets. What shift in fundamentals drove this rally? Higher profits? No, profits are declining, especially once the phony adjustments are stripped away. Is the global economy strengthening? Don't make us laugh!

China Proposes Unprecedented Nationalization Of Insolvent Companies: Banks Will Equitize Non-Performing Loans
Tyler D.
03/10/2016 09:48 -0500

In what may be the biggest news of the day, and certainly with far greater implications than whatever Mario Draghi will announce in a few hours when we will again witness the ECB doing not "whatever it takes" but "whatever it can do", moments ago Reuters reported that China is preparing for an unprecedented overhaul in how it treats it trillions in non-performing loans.

Recall that as we first wrote last summer, and as subsequently Kyle Bass made it the centerpiece of his "short Yuan" investment thesis, the "neutron bomb" in the heart of China's impaired financial system is the trillions - officially at $614 billion but realistically anywhere between 8% and 20% of China's total $35 trillion in bank assets - in non-performing loans. It is the unknown treatment of these NPLs that has been the greatest threat to China's just as vast deposit base amounting to well over $20 trillion, which has been the fundamental catalyst behind China's record capital flight as depositors have been eager to move their savings as far from China's domestic banks as possible.

As a result, conventional thinking such as that proposed by Bass, Ray Dalio, KKR and many others, speculated that China will have to devalue its currency in order to inflate away what is fundamentally an excess debt problem as the alternative is unleashing a massive debt default tsunami and "admitting" to the world just how insolvent China's state-owned banks truly are, not to mention leading to the layoffs of tens of millions of workers by these zombie companies.

However, China now appears to be taking a surprisingly different track, and according to a Reuters report China's central bank is preparing regulations that would allow commercial banks to swap non-performing loans of companies for stakes in those firms. Reuters sources said the release of a new document explaining the regulatory change was imminent.

According to Reuters, the move would represent, "on paper, a way for indebted corporates to reduce their leverage, reducing the cost of servicing debt and making them more worthy of fresh credit."

It gets better.

It would also reduce NPL ratios at commercial banks, reducing the cash they would need to set aside to cover losses incurred by bad loans. These funds could then be freed up for fresh lending for investment in the new wave of infrastructure products and factory upgrades the government hopes will rejuvenate the Chinese economy.

It is certainly possible that this is merely a trial balloon, one which as was the case repeatedly during Europe's crisis uses Reuters as a sounding board to gauge the market's reaction, however the reality is that China may truly be desperate enough to pursue this option.

Because what is lacking in the Reuters explanation is that this proposal entails nothing short of a nationalization on a grand scale, one which gives China's impaired commercial banks - all of which are implicitly state controlled - the "equity keys" to the companies to which they have given secured loans, loans which are no longer performing because the underlying assets are clearly impaired, and where the cash flow generated can't even cover the interest payments.

In effect, the PBOC is proposing the biggest debt-for-equity swap ever seen. What it also means is that since the secured lender, which is at the top of the capital structure will drop all the way down, it wipes out the existing equity and unsecured debt, and make the banks the new equity owners, and as such China's commercial banks will no longer be entitled to interest payments or security collateral on their now-equity investment.

Finally, while this move does free up loss reserves, it essentially strips banks of their security and asset protection which they enjoyed as secured lenders.

So why is China doing this?

As Reuters correctly noted, by equitizing trillions in bad loans, it frees up the corporate balance sheets to layer on fresh trillions in bad debt, the same debt that pushed these zombie companies into insolvency to begin with.

What this grand equitization does not do, is make the underlying business any more profitable or viable: after all the loans are bad because the companies no longer can generate even the required cash interest payment - as a result of China's unprecedented excess capacity and low commodity prices which prevent corporate viability. It has little to do with their current balance sheet.

That, however, is irrelevant to the PBOC which is hoping that by taking this step it can magically eliminate trilliions in NPL from commercial bank balance sheets in what is not only the biggest equitization in history, but also the biggest diversion since David Copperfield made the statue of liberty disappear, as instead of keeping the bad loans on the asset side as NPLs, thus assuring at least some recoveries, the banks are crammed down and when the next NPL wave hits, their exposure will be fully wiped out as mere equity stakeholders.

So why are banks agreeing to this? Because they know that as quasi (and not so quasi) state-owned enterprises, China's commercial banks are wards of the state and when the ultimate impairment wave hits and banks have to write down trillions in "equity investments", Beijiing will promptly bail them out.

Essentially, in one simple move, Beijing is about to "guarantee" trillions in insolvent Chinese debt.

In short, as pointed out earlier, what the PBOC has proposed is the biggest "shadow nationalization" in history, one which will convert trillions in bad loans in insolvent enterprises into trillions in equity investments in the same enterprises, however without any new money actually coming in! Which means it will be up to new credit investors to prop up these failing businesses for a few more quarters before the reorganized equity also has to be wiped out.

Going back to the Reuters, it reports, that "the new regulations would be promulgated with special approval from the State Council, China's cabinet-equivalent body, thus skirting the need to revise the current commercial bank law, which prohibits banks from investing in non-financial institutions."

Of course the reason why commercial bank law prohibited banks from investing in non-financial institutions is precisely because it is a form of nationalization; only this time it will be worse - China will be nationalizing its most insolvent, biggest zombie companies currently in existence.

Reuters also observes that in the past Chinese commercial banks usually dealt with NPLs by selling them off at a discount to state-designated asset management companies. "The AMCs would turn around and attempt to recover the debt or resell it at a profit to distressed debt investors." That China has given up on this approach confirms that there is just too much NPL supply and not nearly enough potential demand to offload these trillions in bad loans, hence explaining what may be the biggest nationalization in history.

Finally, Reuters concludes that "the sources did not have further detail about how the banks would value the new stakes, which would represent assets on their balance sheets, or what ratio or amount of NPLs they would be able to convert using this method." Which is to be expected: in this grand diversion the last thing China would want is to reveal the proper math which would show how both China's commercial banks, and the government itself, are about to guarantee trillions in insolvent assets.

While this is surely good news for the very short run, as it allows the worst of the worst in China's insolvent corporate sector to issue even more debt, in the longer run it means that China's total debt to GDP, which is already at 350% is about to surpass Japan's gargantuan 400% within a year if not sooner.

[Fenix]

Oil Plunges As OPEC/NOPEC "Freeze Production" Meeting Reportedly Unlikely To Happen
Submitted by Tyler D.
03/10/2016 - 09:27

When it rains impotence, it pours. All that lying, hope, and hype and now this: OPEC, NON-OPEC MEETING UNLIKELY TO HAPPEN ON MARCH 20 AS IRAN YET TO COMMIT TO OIL PRODUCTION FREEZE - RTRS SOURCES. And oil is tumbling...


German Bank That Almost Failed Now Being Paid To Borrow Money
Submitted by Tyler D.
03/10/2016 - 15:30

We’re repeating the same crazy thing that nearly brought down the system back in 2008 - paying people to borrow money. The primary difference is that, this time around, the bubble is much bigger. Back then, the subprime bubble was “only” $1.3 trillion. Today, conservative estimates show that there’s over $7 trillion in negative rate bonds. What could possibly go wrong?

Global Liquidity Collapses To 2008 Crisis Levels
Submitted by Tyler D.
03/10/2016 - 14:50

The last time that global liquidity conditions contracted at this pace was March 2008 (right as stocks dead-cat-bounced on the back of The Fed's guarantee of Bear Stearns' sale to JPMorgan)... and things escalated rather quickly thereafter.


China Is Now In Control Of Global Silver Prices
03/10/2016 14:10 -0500
Submitted by Dave Forrest

China has been an unofficial price-setter for most metals over the past decade. And this week, the country became an official participant in setting prices for one of the world’s most important precious metals markets.

That’s the London Bullion Market silver price. Where one of China’s largest banks just became a member of an elite group of players that controls fluctuations in this key metal.

CME Group, which runs the process for price setting of silver in London, said Sunday that China Construction Bank will officially join as a member of the silver price process. Putting it alongside existing participants HSBC, JPMorgan Chase, The Bank of Nova Scotia, Toronto Dominion Bank, and UBS.

These groups will now participate in price bids that go into setting the official London silver price. The first time that China will have direct influence on this process.

The expansion into China in itself is significant. And the entry of China Construction Bank into the market could also have some other important consequences for precious metals.

Especially when it comes to currencies. With the Chinese bank having said it will support the development of renminbi-denominated futures contracts for physical delivery in London.

Such products would represent the first time that physical silver can be bought and sold here in China’s home currency. A move that could reduce the longstanding relationship between the U.S. dollar and precious metals prices.

This is also a sign that precious metals markets are increasingly going international. Which makes sense, given that the world’s top consumers are places like China, India, Russia and Turkey.

This could be the start of further moves to increase metals markets influence in these parts of the world. Watch for more announcements, and for a possible breakdown in the USD/silver correlation as the renminbi contracts get going.

Here’s to a silver line-up...

[Fenix]

"I'm Out" - Bulls Dropping Like Flies After Evercore Says Tactical Bull Is Over, "Buy Gold"
Tyler D.
03/10/2016 13:44 -0500

All it takes to find out just how much conviction so called bulls have in this rigged, centrally-planned market and short squeeze, which only goes on as long as faith in central planning still exists, is a major intraday reversal, coupled with a surge in gold. Like the one today in the aftermath of Draghi's abysmal press conference. The result: first Goldman saying "the recent relief rally might be short-lived", and now here is Evercore ISI's Rich Ross with a note in which he once again expected the S&P to plunge to 1,670 in a note titled simply enough...

I'm Out.

My Bullish tactical call is over. While we have repeatedly highlighted 2030 as our upside target, the rapid post ECB reversals in the cross asset technicals dictates that we abandon our tactical view at this time in favor of a far more defensive posture. Our structural Bear Market call with downside to 1,670 remains intact. We would sell Global Equities and Commodity Currencies (BRL, CAD, RUB) on the back of recent countertrend strength and buy Gold.



I do not expect the world to end overnight, but I do feel strongly that the countertrend rally in risky assets has likely run its course and that the risk/reward to continue to play for tactical upside is simply not acceptable given the current macro technical backdrop.

* * *

Expect many more formerly bullish flip-floppers now that faith in central planning is shaken to the core.


What We Know About Draghi's Coming Corporate Bond Purchases: The Winners And Losers
Submitted by Tyler D.
03/11/2016 - 04:21

No doubt, more about the ECB’s plans for credit will be revealed in the weeks ahead. But if ECB buying is material in size (something we questioned though last week), investors could end up “crowded into” what the ECB isn’t buying. And, if a large, price-insensitive buyer in the corporate bond market (The ECB) has indeed just emerged today, we think credit market liquidity may deteriorate even further.


How Vancouver Is Being Sold To The Chinese: The Illegal Dark Side Behind The Real Estate Bubble
Submitted by Tyler D.
03/10/2016 - 21:27

"While the wholesaler claims to represent one buyer, or in some cases to be the buyer, Amanda said three or four contract flippers are often already lined up, with an end-buyer from China who will eventually take title in most cases. These unlicensed broker deals appear to be illegal."


Goldman Is About To Be Stopped Out Of Its Gold Short
Tyler D.
03/10/2016 20:50 -0500

Given China's new focus on a basket of currencies, rather than pegging to the dollar alone, today's record-breaking reversal in EUR has sparked a yuuge 300 pips rally in Offshore Yuan (from 6.5270 to 6.4940) pushing to its strongest level since mid-December. At the same time, Gold is accelerating as China opens, pushing up to $1288 - new 13-month highs. Most critical is we are within $5 of Goldman Sachs "short gold" stop at $1291...

Yuan surges to 3-month highs...



As Gold spikes to fresh 13-month highs...

Goldman went short gold on 2/15 at around $1205...

We also maintain our bearish view on gold that has rallied along with the other commodities. Our short gold recommendation (which we opened with a 17% upside, in line with our $1000/toz 12-m forecast) is currently at a c.5% loss, with a stop loss at 7%.



This gold rally was driven by a lack of conviction in divergence in US growth as a weak US dollar has been highly correlated with a higher gold price.



We believe this realignment view of weak global growth is not supported by the US data, which will likely reinforce higher US yields, a stronger US dollar and the return of divergence, particularly should strong US consumer growth dissolve market fears regarding US growth. This in turn will likely put downward pressure on gold prices towards our near-term target of $1100/toz

Tonight we are getting very close to Goldman's stop-loss...



Leaving Goldman clients pensive...

[Fenix]

10 Warning Signs of A Dangerous Stock Market
03/11/2016 11:12 -0500
Authored by Attain Capital

While many investors may be breathing a sigh of relief thanks to the bounce off the February low, with the S&P up 11% since the start of February – it’s still not all lollipops and rainbows out there in market-land. There’s some worrying undercurrents that could spell more trouble ahead, not to mention pros like Jeff Gundlach claiming there’s just 2% of upside in the S&P 500 and 20% downside.

Just what’s on the mind of some of the sharpest investment managers out there? We were lucky enough to have Mike Melissinos of Melissinos Trading send along a collection of charts and indicators he’s been looking at with a worried eye, and thought it was worth sharing here. Enjoy…

Fire Sign Dangerous Stock Market
Decline in Profit Margins

When margins shrink, business activity contracts. Businesses cut budgets and jobs. Recessions typically follow. Stock prices tend to fall more than 10% in recessions.

Decline in Profit Margins Dangerous Stock Market


Price-to-Sales – Expensive

The Industrials sector provides some insight into the health of U.S. manufacturing.

At October-end, the sector recorded one of the highest P/S ratios ever. Only the two-year window of the dot-com bubble produced higher readings.

S&P Price Sales Dangerous Stock Market


Industrial Production is Rolling Over

The most recent Chicago PMI reading of 42.9 has never been this low outside of a recession.

Chicago PMI Dangerous Stock Market


NYSE Margin Debt at Record Levels

Investors have borrowed capital at a record clip to buy stocks. Since 2009, investors have gone all in and then some.

Margin Debt has spent the last few months beneath the 12-month moving average. In the past 20 years, this indicator serves as a decent bear market signal.

Margin Debt Dangerous Stock Market


Margin Debt to GDP – Higher than 2000 and 2007

As a percentage of GDP, margin debt hit a record high in 2015. The Fed played a massive role in this – allowing investors to borrow tons of money to buy stocks. But that’s another conversation for another day.

Some people think the Fed will ab
andon its plans to tighten and begin lowering rates again, or to adopt NIRP (No Interest Rate Policy). If so, the belief is that the bull market will continue.


Leveraged Financial Economy Dangerous Stock Market


Margin Debt-to-GDP and 3-Year Stock Returns

When speculation runs wild, future returns typically suffer. Today, we have wild speculation – a general belief that the bull market will continue because (insert your reasons here).

During the heydays of the dot-com and housing bubbles, margin debt-to-GDP levels were the same as today. If given a reason to a sell, over-extended investors may begin selling more intensely.

Margin Debt GDP Dangerous Stock Market


How Much Stock Do People Own? The 2nd Highest Amount in History.

How to read this chart: In general, the higher the reading the lower your future returns.

Highest Reading = March 2000. The S&P 500 fell 43.40% over the next three years.

Second Highest Reading = January 2015. The S&P 500 has fallen 7% since (13 months).

Third Highest Reading = September 1968. The S&P 500 fell 1.70% over the next three years.

Household Equities as Percent of Total Assets Dangerous Stock Market


Investors Sell Dividend Funds, MLPs, REITs and High Yield

In mid-2010, the Fed launched QE2. Investors increasingly ran into assets that provided at least some yield; this being dividend funds, MLPS, REITs and high yield bonds (blue line).

Today, the blue line is rolli

ng over – possibly suggesting that investors are beginning to prefer safer cash accounts and shorter duration bonds. This may add to the selling pressure in stocks.

Cumulative Flows Dangerous Stock Market


Bull to Bear Ratio – Unprecedented Optimism

The Bull to Bear Ratio over 3.0 (red lines) may suggest overconfidence and a lack of worry. If so, we have a lot of confident bulls out there.

Bull Bear Ratio Over 3 Dangerous Stock Market


Turmoil in High Yield Bonds

The “smart money” lives in the bond world. Bond prices have a tendency to move before stocks do – as evidenced by the chart below. Will this time be different than the previous three?

S&P HY Spreads Dangerous Stock Market

That was a long post, but I think you get the picture. Whether the price trend follows suit is another discussion. No one knows, especially me. But I hope this information helps you develop your own opinion and strategy to handle the ever-changing market conditions.


First Gold, Now Oil Is Getting Slammed
Tyler D.
03/11/2016 10:57 -0500

Because... fundamentals...

First gold was clubbed lower, then after tagging stops above $39, WTI crude is tumbling:

Don't worry this all makes sense to someone.

After January Scramble, Chinese Lending Collapses
Submitted by Tyler D.
03/11/2016 - 10:41

After January's record-smashing CNY3.4 trillion (half a trillion dollars!) surge in aggregate credit expansion in China, the post-lunar-new-year hangover hit hard in February as credit growth tumbled 77% from Janaury's level to just CNY780 ($112bn). This is the weakest February loan growth since 2011. Drastically missing expectations, and following authorities comments on the need to "monitor" excess credit growth, all categories of total social finance registered a sharp drop... which as Goldman warns, means China's GDP growth target will be "challenging."

Oil Bust Spreads As 11 Texas Towns See Credit Downgraded
Submitted by Tyler D.
03/11/2016 - 10:22

Moody’s Investors Service placed 11 West Texas governments and municipalities under review for a potential downgrade last week. The review will consider downgrading the credit ratings of 11 local governments, which include Odessa and Midland, Pecos County, and 7 hospital districts. The review would affect US$477 million in outstanding public debt.



Options Traders Head For The Hills
03/11/2016 09:27 -0500
via Dana Lyons' Tumblr,

We are not the first or only ones to point out that the current post-February stock rally has been less than enthusiastically received by the trading community. While there are some exceptions, most intermediate-term sentiment gauges are either leaning towards fear levels or, at best, neutral. One example comes from the equity options market where daily call buying in recent days has reached a nearly unprecedented streak of subdued levels relative to put buying. This has typically been a bullish sign for the market – however, the current signal is anything but typical.

To wit: We’ve covered the International Securities Exchange Equity Call/Put Ratio (ISEE) on several occasions over the years. As a refresher, due to its unique construction, the ISEE has been a favorite indicator of ours for highlighting short-term inflection points in investor sentiment. The ISEE excludes firm trades that are quite likely to be hedges and also excludes volume on closing positions when calculating the Call/Put ratio. Therefore, the ISE argues that its ratio is a more pure indication of investor sentiment than some of the other options ratios.

The 100 level in the ISEE has historically often been a signal that options traders are becoming fearful (100 means equal call and put volume). Dips below that level have been common near short to intermediate-term lows in the market as traders have either stormed into puts and/or have shied away from buying call options. Therefore, stock market returns have been quite bullish following such readings. And they have been particularly bullish after the ISEE has been below 100 for consecutive days. This had occurred just 11 times since the inception of the ISEE data in 2006.

Now, you can make it 12. Only, it hasn’t just been 2 days in a row, but 4 that the ratio has been below the 100 level. This is 2nd longest streak ever, behind the 5-day streak from February 5-11 this year.



image



These are the dates of all 12 occurrences:

* March 17-19, 2008 (3 days)
* November 17-19, 2008 (3 days)
* June 20-21, 2013
* September 22-23, 2014
* October 13-14, 2014
* December 11-12, 2014
* January 20-21, 2015
* July 30-August 3, 2015 (3 days)
* August 6-7, 2015
* December 17-18, 2015
* February 5-11, 2016 (5 days)
* March 4-9, 2016 (4 days)

You may recognize some of the dates right off the bat as short to intermediate-term lows. Indeed, the general pattern has been that, after a few volatile days, the S&P 500 consistently out-performs over the next few weeks to months. Here are the statistics:

image

As the table shows, S&P 500 returns 2 days after the streak ended were a toss-up. Amazingly, by the following day, 10 of the 11 were positive. And the performance stayed good in the weeks-months following as well. 9 of the 11 were positive 1-2 weeks later. And the median return after 1 month was +3.8%, 3 times the S&P 500′s normal return. So, do we have a green light here to buy stocks? Not so fast…

The setup surrounding the current version of this streak is somewhat atypical compared to the others. And the reasons that make it atypical somewhat align it with prior instances which failed to lead to positive returns going forward, namely September 2014 and August 2015. Why is it atypical? The readings are occurring into a 1-month rally, rather than into a selloff, which is the norm. Consider the following:

* At +7.40%, it is the only streak besides August 2015 that occurred when the S&P 500′s 1-month return was positive. Add in September 2014 (-0.76%), and you have the only 3 events with 1-month returns better than -2.35%.
* Similarly, at roughly 18 yesterday, it is the only event besides last August and September 2014 to occur while the S&P 500 Volatility Index (VIX) was trading at less than an 19-handle.

What this all spells out is that our present circumstances do not necessarily paint the picture of short-term “fear” that has accompanied most of the other occurrences. It does not guarantee that the stock market will follow in the footsteps of last August and September 2014 and suffer considerable weakness from here. However, in our view, the circumstances surrounding the current streak definitely temper the confidence in an imminent, fear-driven short-term bounce.

Furthermore, the increasing occurrences of sub-100 readings over the past 18 months are causing us to question the usefulness of this once very accurate indicator, at least when occurring in these atypical circumstances. Thus, while we certainly would not argue that this is a bearish signal, it can’t be trusted as the bullish signal it once was.

[Fenix]

Why Despite Today's Market Surge, Bank of America Stubbornly Refuses To Join The Rally
Submitted by Tyler D.
03/11/2016 - 08:59

"Risk assets about to top: ultimately markets about "rates" and "earnings", little else; central banks have played “rates card” as aggressively as they can; ECB done, BoJ has nothing in the tank, and any US macro strength will elicit Fed rate hike expectations (the Fed wants to tighten); EPS momentum simply not strong enough near-term to overwhelm Q2 risks of Brexit, BoJ failure, US politics, China debt deflation."

China Exports Most Deflation To US Since 2010
Submitted by Tyler D.
03/11/2016 - 08:41

For the 18th month in a row, US Import prices fell YoY (down 6.1% vs expectations of a 6.5% drop). This is the longest deflationary streak since 1999. Under the hood we see the first first rise in prices (ex food, fuel) since May 2014. Fuel price dropped 3.9% - the 8th consecutive drop - and foreign food product prices dropped 2% - the most since Feb 2012. Perhaps most crucially, China's forced deflationary wave continues to build with the index at its lowest since 2010.

Draghi Warns About Rising Inequality Hours After Boosting QE, As BIS Warns QE Leads To Inequality
Submitted by Tyler D.
03/11/2016 - 07:53

"The crucial question is whether a person can participate fully in the economy over his or her life-time – get a good education, find a job, buy a home for the family. Income and wealth follow. What makes me worry is that increasing inequality might prevent people from doing that. This is an issue all our societies need to look at carefully."


Oil Rebounds After IEA Says Price "Bottomed" As Goldman Warns Of "Sharply Lower" Prices As Storage Fills
Submitted by Tyler D.
03/11/2016 - 07:02

While today's IEA report which said that oil prices "may have bottomed" served to boost the price of oil, roughly at the same time Goldman released its own report, reiterating a well-known warning on inventory constraints, and repeating that oil prices may drop "sharply lower" as US "storage saturation" is reached:


Weekend Reading: The Bull/Bear Struggle Continues
03/11/2016 16:30 -0500
Submitted by Lance Roberts

The standoff between the “bulls” and “bears” continued this week as prices struggled to rise. The “bulls” continue to “hope” that the recent turmoil that started at the beginning of this year has come to an end. The “bears” continue to point out silly things like an ongoing earnings recession, weakening economic data, and deteriorating technicals to make their case.

Silly “bears”.

Interestingly, on Thursday, the ECB launched its biggest “bazooka” yet pushing further into negative interest rates, increasing their already failed QE program and crossing every finger and toe for “good luck.” Via the ECB:

“At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

(1) The interest rate on the main refinancing operations of the Eurosystem will be decreased by 5 basis points to 0.00%, starting from the operation to be settled on 16 March 2016.

(2) The interest rate on the marginal lending facility will be decreased by 5 basis points to 0.25%, with effect from 16 March 2016.

(3) The interest rate on the deposit facility will be decreased by 10 basis points to -0.40%, with effect from 16 March 2016.

(4) The monthly purchases under the asset purchase programme will be expanded to €80 billion starting in April.

(5) Investment grade euro-denominated bonds issued by non-bank corporations established in the euro area will be included in the list of assets that are eligible for regular purchases.”

Question:

“What happens during the next global economic recession when these unsecured corporate bonds go bankrupt?”

If you remember, Lehman bonds were IG unsecured corporate bonds the DAY BEFORE they went into bankruptcy. That event sparked the global financial crisis. But this time will be different, right?

I’m only asking the question.

Anyway, I digress. This week’s reading list takes a look at various views on the market, the latest jobs report, oil prices and other interesting reads.

1) Do Any Of The Recent Rallies Pass The Sniff Test by Charles Hugh Smith via OfTwoMinds

“As Chris Martenson and many others have noted, “price discovery” is a joke now, as markets are either propped up by central bank “we got your back” guarantees or outright asset purchases, or driven up and down by speculative hot money flows.



This is not capitalism, or a functioning market: this is the end-game of legalized looting and financialization. What’s the value of real estate? If interest rates are pushed negative, then that gooses housing demand, as the cost of interest on a mortgage declines to near-zero in real terms.”

smith-stockrally-031016

* But Also Read: This Bull Market Is Getting No Respect by Wallace Witkowski via MarketWatch
* And Read: Are We Going To See 2500 S&P Soon? by Avi Gilburt via MarketWatch
* Don’t Miss: Fasten Your Seatbelts – It’s Going To Get Bumpy by Michael Brush via MarketWatch
* Interesting: GS Says Relief Rally Was Too Fast by Tyler Durden via ZeroHedge

2) The Markets Are Stretched, So I’m “All-In” Short by Doug Kass via Real Clear Markets

“My recent column Not So Super Tuesday highlights why I believe markets are tipping over to short-term bearish, while my Top 10 Reasons to Sell Stocks Now piece incorporates most of my intermediate-term concerns.



That’s why I moved to “all-in short” on Friday during the market’s post-jobs-report ramp-up. I believe stocks’ recent rally from their mid-February low has stretched valuations and drastically altered the risk-vs.-reward ratio.



I‘d also note that Friday’s seemingly good February U.S. jobs report wasn’t quite as “clean” as the strong headline number of 242,000 non-farm job gains suggests. For instance, average wages dropped by 0.1%, while average hours worked fell by 0.2 — a decline usually seen in recessions. (Previous similar drops occurred in February 2010 and December 2013.)”

* But Also Read: The Market Is Doing The Most Bullish Thing It Can Do by Kevin Marder via MarketWatch
* And Read: Stocks Won’t Earn Nearly As Much Over Next 7-Years by Mark Hulbert via MarketWatch
* Further Reading: The Perfect Storm Isn’t Over Yet by Mohamed El-Erian via Project Syndicate

3) The Wall Street Profits Illusion by Sam Ro via Yahoo Finance

“Wall Street gurus like Societe Generale’s Andrew Lapthorne, have been tracking the discrepancy between GAAP and non-GAAP reported profits for years.



But last fall, more experts like Deutsche Bank’s David Bianco grew increasingly concerned with what was becoming a growing divide between GAAP and non-GAAP profits.



‘Blended [non-GAAP] 4Q earnings per share is $29.49 with GAAP EPS of $19.92,’ Bianco said of S&P 500 profits on Monday. He further noted that this 67% ratio of GAAP to non-GAAP EPS is ‘well below the normal ~90% ex. recessions.'”

Earnings-GAAP-Illusion-031016

* Also Read: Analyzing Q4 Earnings via RIA
* But Also Read: The Retracement Rally Is Over by Erik Swarts via Market Anthropology

4) February Jobs Report A Little Misleading by John Crudele via New York Post

“Labor trumpeted that 242,000 new jobs were created in February, although wages declined 0.1 percent, the average workweek dropped by 0.2 hours and aggregate hours worked fell 0.4 percent. And part-time work soared in February while full-time job growth was mediocre.



Even the 242,000 job growth looked hokey. Retailing, for instance, saw an unbelievable (as in “not to be believed”) jump of 55,000 jobs despite the fact that February isn’t exactly the month when stores hire people to handle a swarm of shoppers.



As I said last Thursday and in a special Saturday column, the February job report was helped by rogue statistics — untrustworthy seasonal adjustments (especially in retailing) and giddy assumptions made by Labor that will probably have to be corrected later.“

* Also Read: Wages – Shadow Hanging Over Jobs Market by Jeff Cox via CNBC
* And Read: Does Jobs Report Point To Recession by Jared Pincin via Real Clear Policy

5) Oil Prices Should Fall, Possibly Hard by Art Berman via Forbes

“Oil prices should fall, possibly hard, in coming weeks. That is because fundamentals do not support the present price.



Prices should fall to around $30 once the empty nature of an OPEC-plus-Russia production freeze is understood. A return to the grim reality of over-supply and the weakness of the world economy could push prices well into the $20s.“

OIl-Supply-Demand-030916

* Also Read: Oil: Lower Prices For Longer via Morgan Stanley
* And Read: The Future Of Oil Is Here & It Ain’t Pretty by Michael Clare via The Nation

OTHER GOOD READS

* The Failed 401k Experiment by David Dayen via The Fiscal Times
* BIS Sends Global Storm Warning by Lianna Brinded via BI
* Draghi Plays Last Deflation Card by Ambrose Evans-Pritchard via The Telegraph
* Central Banks About To Ambush The Casino by David Stockman via Contra Corner
* The Market’s 7-Year Itch by David Keohane via FT Alphaville
* Interest Rates, Fed & Inflation’s New Normal by Andrew Dasson via CFA Institute
* NIRP – No Need To Go There by Paul Kasriel via Financial Sense
* Dividend Investing – Not All Its Cracked Up To Be by Meb Faber via Faber Research
* Margin Debt’s Message Could Not Be More Clear by Jesse Felder via The Felder Report
* The Line In The Oil Sand via Dana Lyons via Tumblr
* Houston Real Estate Is In Trouble by Aaron Layman

“When the paddy wagon rolls up, they take the good girls with the bad” – Old Wall Street Bear Market Axiom

[Fenix]

What Does Nasdaq Know?
Submitted by Tyler D.
03/11/2016 - 15:30

Nasdaq risk is dramatically higher than S&P risk at current levels. Despite the exuberant ramp of the last few weeks, the ratio of Nasdaq VIX to S&P VIX is at its highest in over 6 months. This is worrisome since the last time Nasdaq traders were this much more concerned about future risk than S&P traders, was right before the August flash-crash collapse...


A Top Performing Hedge Fund Just Went Record Short: Here's Why
Submitted by Tyler D.
03/11/2016 - 15:15

What remains most remarakable about Horseman Capital is that even as it modestly boosted its gross exposure to 59%, as of February the fund's net short exposure has risen from what was a previous record of 76%, to a whopping -88%, an unprecedented record even for one of the world's most bearish hedge funds!


Now 2010 Is All That Matters
Tyler D.
03/11/2016 14:45 -0500

BofAML's Stephen Suttmeier views the 61.8% retracement of the May-Feb decline at 2010.72 as critically important. A failure to close above this retracement would send a bearish message, especially given negatively positioned and falling 100 and 200-day moving averages.

Key SPX levels: Watch that 61.8% retracement at 2010.72

S&P 500 resistance at 1990-2025 has limited the rally this week. This is a confluence of chart, 100/200-day MA, and Fibonacci levels.


Should the tactical bulls continue their winning ways (with daily momentum staying overbought on a grind higher just like it did into the early November high) the upside count of the double bottom breakout at 2085 comes into focus.

Supports remain 1963-1931 and 1902-1891, which are ahead of the 1812-1810 lows.

Obama To Push Passage Of TPP Trade Deal Despite Rising Public Opposition
Submitted by Tyler D.
03/11/2016 - 13:30

Public opposition to the sovereignty killing corporate giveaway marketed as a free trade deal known as the Trans Pacific Partnership (TPP) has become so widespread that all the leading candidates for the U.S. Presidency are publicly against it. Essentially, the more time the American public has to learn about this scam, the more they are against it. Which is precisely why the Obama administration wants to push it through as quickly as possible.

US Rig Count Tumbles To Record (41-Year) Lows
Submitted by Tyler D.
03/11/2016 - 13:04

In April 1999, the total US oil and gas rig count was 488, today, after dropping 9, the total rig count is 480- an all-time record low (since records began in 1975). Oil rigs dropped 3 to 386 (lowest Since Dec 09), the 12th weekly drop in a row (16th of 17 and 17th and 26th of the last 28 weeks). With production up last week, it remains to be seen when the rig count matters once again.


Gold's Best Year Since 1974 Sparks Record Inflows Into ETFs
Submitted by Tyler D.
03/11/2016 - 13:00

Gold is up 19% year-to-date, by far the best performing asset-class, making this the best start to a year since 1974. "Negative rates in Japan and Europe coupled with weak global growth have prompted a surge in interest," notes one trader as Gold-backed exchange-traded funds saw a record inflow of $7.2bn in February, surpassing the previous high set in 2009, according to BlackRock.

[Fenix]

Norway’s Interest Rate Conundrum
Submitted by Tyler D.
03/12/2016 - 09:13

We are experiencing 1970’s style stagflation, coming from the supply side, not demand. Prices are going up because Norges Bank continues to destroy the Norwegian Krone, turning it into the Nordic Peso. This is where they are “hiding” the damage to save rest of the economy. For example, housing prices will rise in NOK but fall in USD or gold (universal commodity) terms. It’s a shell game, leading to long term decline or even worse, an unexpected period of elevated inflation, requiring a rapid rise in interest rates.


What The Average Zhou Thinks Of China's Housing Bubble: "Only After War Breaks Out, We'll Be Able To Afford It"
Submitted by Tyler D.
03/11/2016 - 21:30

"[the empty homes] belong to the real estate speculators, the hoarders and the corrupt officials... It's just a game for the rich! Beijing isn't a livable city at all. The price makes it off-limits. It’s also a food chain: Only the richest and most capable people can live here... The housing market is part of the bubble economy. In 5 years or so, after a war has broken out, then the middle class will be able to afford a home."



Why Negative Rates Can't Stop the Coming Depression
03/11/2016 19:00 -0500
Submitted by Bill Bonner
Are you ready to pay to save?



Agora founder Bill Bonner explains why “negative interest rates” are spreading around the world…and could soon come to the U.S.



Like Doug Casey, Bill believes the worst is yet to come.



Bill says the coming financial collapse will be worse than the market crashes in 1987, 2000, and 2008. But this time, he says, it will affect everything from your portfolio...to your bank account...to the cash in your wallet.

About $7 trillion of sovereign bonds now yield less than nothing. Lenders give their money to governments…who swear up and down, no fingers crossed, that they’ll give them back less money sometime in the future.

Is that weird or what?
Into the Unknown

At least one reader didn’t think it was so odd. “You pay someone to store your boat or even to park your car,” he declared. “Why not pay someone to look out for your money?”

Ah…we thought he had a point. But then, we realized that the borrower isn’t looking out for your money; he’s taking it…and using it as he sees fit.

It is as though you gave a valet the keys to your car. Then he drove it to Vegas or sold it on eBay.

A borrower takes your money and uses it. He doesn’t just store it for you; that is what safe deposit boxes are for.

When you deposit your money in a bank, it’s the same thing. You are making a loan to the bank. The bank doesn’t store your money in a safe on your behalf; it uses it to balance its books.

If something goes wrong and you want your money back, you can just get in line behind the other creditors.

The future is always unknown. The bird in the bush could fly away. Or someone else could get him.

So, when you lend money, you need a little something to compensate you for the risk that the bird might get away.
A New Level of Absurdity

That’s why bonds pay income – to compensate you for that uncertainty.

Inflation, defaults, depression, war, and revolution all raise bond yields because all increase the odds that you won’t get your money back.

That’s why countries with much uncertainty – such as Venezuela – have higher interest rates than countries, such as Switzerland, where the future is probably going to be a lot like the past.

Venezuelan 10-year government bonds yield 11%. The Swiss 10-year government bond yields negative 0.3%.

The interest you earn on a bond is there to compensate you for the risk that you won’t get your money back. Or that the money you do get back when the bond matures will have less purchasing power than the money you used to buy the bond in the first place.

You never know. Maybe the company or government that issued the bond will go broke. Or maybe the Fed will cause hyperinflation. In that case, even if you get your money back, it won’t buy much.

With interest rates at zero, lenders must believe that the future carries neither risk. The bird in the bush isn’t going anywhere; they’re sure of it.

As unlikely as that is, negative interest rates take the absurdity to a new level.

A person who lends at a negative rate must believe that the future is more certain than the present.

In other words, he believes there will always be MORE birds in the bush.
Boneheaded Logic

The logic of lowering rates below zero is so boneheaded that only a PhD could believe it.

Economic growth rates are falling toward zero. And at zero, it normally doesn’t make sense for the business community – as a whole – to borrow. The growth it expects will be less than the interest it will have to pay.

That’s a big problem…

Because the Fed only has direct control over the roughly 20% of the overall money supply. This takes the form of cash in circulation and bank reserves. The other roughly 80% of the money supply comes from bank lending.

If people don’t borrow, money doesn’t appear. And if money doesn’t appear – or worse, if it disappears – people have less of it. They stop spending…the slowdown gets worse…prices fall…and pretty soon, you have a depression on your hands.

How to prevent it?

If you believe the myth that the feds can create real demand for bank lending by dropping interest below economic growth rates, then you, too, might believe in NIRP.

It’s all relative, you see. It’s like standing on a train platform. The train next to you backs up…and you feel you’re moving ahead.

Negative interest rates are like backing up. They give borrowers the illusion of forward motion…even if the economy is standing still.

Or something like that.

[Fenix]

Why Companies Don't Want You To Look At GAAP Earnings
Submitted by Tyler D.
03/11/2016 - 18:27

"For FY 2015, the 20 companies in the DJIA that reported non-GAAP EPS reported an average year-over-year decline in non-GAAP EPS of -4.8%. These same 20 companies reported an average year-over-year decline in GAAP EPS of -12.3%." - FactSet


JPMorgan: "The ECB Could Purchase Equities Next"
Submitted by Tyler D.
03/12/2016 - 09:45

"To the extent this week’s ECB decision marks a shift towards private sector asset purchases, the ammunition the ECB has expands hugely. Assuming the ECB will be willing to navigate eventually into other private sector asset classes, the asset universe for QE purchases could expand to include uncovered bank bonds, bank loans and equities."



Gold Is The Only Sound Money
Tyler D.
03/12/2016 11:13 -0500

Submitted by Alasdair Macleod

This article notes that the technical situation for the gold price has sharply improved, to the evident surprise of many mainstream analysts. It discusses possible reasons behind the turnaround, and implications for the future.
Technicals

The technical situation is shown in the chart below.



Golden Cross

A "golden cross", with the 55 day moving average crossing above the 200 day moving average with both of them on a rising trend, and the share price above both these moving averages, has now occurred. This is generally taken by traders to indicate the bear trend has reversed, and a bull market is now in place.

More interestingly, this change of direction is combined with a bullish pennant pattern, which commenced on 11th February and completed on 3rd March, taking precisely three weeks. This is shown by the dotted lines. The intraday price movements (not shown) conform exactly to the pattern, and the break-out on 4th March saw high volume with an increase to a record amount of outstanding Comex contracts.

The other technical qualifications for a pennant are also fully satisfied. It follows a sharp rise, is a consolidation lasting no more than three or at most four weeks, volume diminished while the pattern played out (taking Comex volumes as proxy), and the break-out was a resumption of the trend. It therefore appears to be a text-book example.

Pennants give us a price objective, which equates to the preceding rise from its breakout point. This yields a minimum price target of approximately $1400, which with pennants can happen quite quickly. And that helps explain, from a purely technical point of view, the seemingly unstoppable strength in the gold price.

Technical analysis is the justification for investors to consider and take action in capital markets, without having to understand the underlying reasons why prices change. Indeed, in these days of seemingly infinite quantities of bank credit being applied to financial speculation, price trends are being driven day-to-day by charts, making prices dependent on the application of credit rather than fundamental appraisals of prospective values.

Technical analysis is notoriously fallible, encouraging action independent from rational thought. We are told that flows into gold ETFs have been positive for the last forty days. But if we ask the question, whether or not the buyers of physical gold represented by paper entitlements are doing so for financial protection, or alternatively are energised by the hope of rising prices, one must conclude that it is most probably the latter.

Put another way, technical analysis is justified on the basis that by encouraging the madness of crowds, it works, and there is plenty of loose money slopping around the markets to ensure it might. This really is not good enough. A reasoned understanding of what gold actually is, an appreciation of vested interests, and an analysis of the practical consequences of investment flows, is vital for us as individuals if we are not to be whipsawed in volatile markets.

The gold price started 2016 with all the big investment firms bullish of the dollar and bearish of commodities and gold. It is from such extremes in sentiment that sharp reversals take place: it's a case of everyone having sold all for dollars and there being no material sellers left to sell. If this is all that's involved this time, the previous trends for a rising dollar and therefore a falling gold price could well resume when these positions are sufficiently unwound.

To establish whether or not this is the case we must turn to fundamentals, which requires us to discard the conventional analytical approach. We must stop thinking gold is rising, when what is actually happening is that the dollar is falling. Nearly all economists and market traders have it back to front. Gold has no variable fundamentals, the condition that qualifies it uniquely as sound money. It is the currency it is measured in that has all the variable fundamentals, and that is where we must look.
Fundamentals

When we look at the dollar price of gold, we naturally think that it is gold that is moving. But we are comparing two forms of money, gold that is not in general circulation, against the dollar that has supplanted it. And given that it is the dollar that is issued in any quantity desired by both the US Government and through fluctuations of bank credit, it is the dollar which ultimately depends on the market's assessment. The constant in this comparison for anything other than short-term trend-chasing is simply gold. Economists who argue otherwise are slaves to macroeconomic fashion rather than rational price theory.

Understanding that measured in gold it is the price of the dollar falling makes sense of what is happening. It points us to the dollar's fundamentals, not so much against other currencies that share many of the dollar's characteristics, but against commodities. And in Table 1 we can see that the dollar's purchasing power has been falling against other key commodities as well against gold.

Table 1. Selected commodities: fall in US$'s purchasing power

chart gm insights

The turnaround in the dollar's fortunes has been sudden, taking less than three months. The US dollar has been excessively overbought, predictably followed by a subsequent fall in its purchasing power against many key commodities. And there are good reasons for it to fall even further. They centre on the damage being inflicted on the dollar's position as the world's reserve currency. China and Russia are leading the charge to do away with the dollar, and China in particular is deliberately promoting the yuan as the dollar's substitute for international settlements with all her trading partners. The dollar's role in pricing commodities is becoming an anomaly, because China does more international trade than America by far.

That helps explain the long-term prospects for the dollar, which has yet to discount a reduction of the quantity of dollars in international circulation. Unless it is balanced by a contraction of credit on the American banks' balance sheets, a reduction in offshore dollars will inevitably result in the dollar's purchasing power tending to fall. But there is also renewed demand for commodities to add to the mix, coming from China.

China is about to embark on a colossal programme of infrastructure spending. Not only will this fill out many of the deficiencies in China's domestic infrastructure, but it is also earmarked for a vast course of industrialisation involving the whole of Asia. Cynics are sure to be correct in decrying the wasteful inefficiencies of state spending of this sort, but they are missing the point.

The point is that China has told us she values the dollar less than she does the commodities required to satisfy her thirteenth five-year plan, and the ones that will follow. This plan commenced with the Chinese new year, so she will already be looking to swap most of her stockpile of dollars for stockpiles of the required raw materials. Last year, China carefully laid down the groundwork for this action.

It was vital for China to control the risks to her own currency that would arise from the planned disposal of the majority of her dollar reserves. This was always her primary motivation for lobbying the IMF to include the yuan in the SDR, and also for her recently declared policy of managing it against a trade-weighted basket of currencies. So long as the yuan is measured against the dollar alone, it is an invitation for foreign speculators to attack it against their preferred unit of account. Attacking a currency where foreign exchange policy is more widely defined introduces great uncertainty into a speculative trade. The change in foreign exchange policy simply gives China the cover to sell her overvalued dollars for undervalued commodities.

China's actions are likely to lead to a major shift in macroeconomic expectations over the coming months. With the dollar's purchasing power continuing to fall relative to energy and industrial commodities, China's commodity suppliers will find the burden of their dollar-denominated debt relative to their output rapidly swinging in their favour. Gone, or at least deferred, will be the nightmare of commodity-related debts undermining the global financial system. There will, of course, still be bad debts, such as in the US shale-oil industry, and also problems for some resource-rich countries, such as Brazil, where the financial damage has already been considerable and may be ongoing. But for western investors, their current preference for safety in low, or even negative-yielding government debt, will be replaced by the opportunities offered in recovering emerging markets.

Standing back from the day-to-day introspection of western capital markets, it has been interesting to watch this financial train-wreck begin to materialise. Western central banks by debasing their currencies have produced little more than financial ammunition for speculation on a grand scale. We saw the effect of a flood of this accumulation into the dollar over the last eighteen months, and we are about to see the opposite effect as it ebbs away. And as speculative flows reverse, the dollar will increasingly be sold by stale bulls in preference for commodities. Much of China's dollar stockpile, along with increasingly redundant petrodollars from the Middle East, will also be sold, putting further downward pressure on the dollar's purchasing power.

A weakening dollar will become the next headache for the Fed, because the fall in its purchasing power will feed into a revival of price inflation without a pick-up in economic activity. Current market expectations of negative interest rates will inevitably switch to an anticipation of rising interest rate to contain the fall in the dollar's purchasing power. And as the dollar's fall in purchasing power against commodities progresses, the solvency of many domestic borrowers and even of the US government itself will become an additional risk to the dollar.

While we can now see reasons emerging for the US dollar's future loss of purchasing power, we can see the same conditions broadly affecting the other major currencies. Like the dollar, these currencies are all valued on the basis of their government promises, but it is not the purpose of this article to compare their merits. Gold alone does not suffer the disadvantage of having a government issuer, its above-ground stock increasing at an estimated rate that is similar to global population growth. Gold is not required to rise, as the term bull market suggests. Its purchasing power is likely to be considerably more stable than that of paper currencies over the long term. We do not have to make guesses over gold's future purchasing power.

Instead, the future price of gold depends on what happens to the purchasing power of the paper currencies in which it is measured. No case needs to be made for its usefulness or even its value, because it is the only sound money there is, no more and no less than that.

[Fenix]

Court Decision Could Accelerate Oil And Gas Bankruptcies
Submitted by Tyler D.
03/12/2016 - 15:05

Factors like the value of total proved reserves in the sector declining by an astounding $515 billion dollars have caused an increasing number of high-profile E&Ps to file for bankruptcy in America. And a critical court decision this week could mean even more coming.

Greenspan Explains The Fed's Miserable Track Record: "We Didn't Forecast Better Because We Can't"
Tyler D.
03/12/2016 16:28 -0500

On March 11, the National Archives announced its first opening of Financial Crisis Inquiry Commission (FCIC) records, along with a detailed 1,400-page online finding aid (yes, just the index is 1,400 pages). The records which are available via DropBox, seek to identify the causes of the 2008 financial crisis.

Among the numerous materials are interviews with key players in Washington and on Wall Street, from Warren Buffett to Alan Greenspan. The documents also include minutes of commission meetings and internal deliberations concerning the causes of the financial crisis.

While we admit we have yet to read the several hundred thousand pages released yesterday, here is what has so far emerged as of the better punchlines within the data dump, and it comes courtesy of the man who many believe is responsible not only for the second global great depression (which needs trillions in central bank liquidity to be swept under the rug every day), but for the "bubble-bust-bigger bubble" cycle that was unleashed with Greenspan's Great Moderation.

Here is Allan Greenspan meeting with Dixie Noonan et al on March 31, 2010:

This is a reason why the Board is getting an unfair rap on this stuff. We didn’t forecast better than anyone else; we regulated banks that got in trouble like anyone else. Could we have done better? Yes, if we could forecast better. But we can’t. This is why I’m very uncomfortable with the idea of a systemic regulator, because they can’t forecast better.

This comes from the person in charge of the most powerful central bank in the world; a world which now is reliant exclusively on central bankers for its day to day pretend existence.

Good luck to all.

North America's Most Expensive Housing Markets
Submitted by Tyler D.
03/12/2016 - 17:28

What may surprise some people when looking at the top 15 list of the most expensive housing markets in North America is seeing Vancouver — the third most expensive city in the world — down in the 6th position, behind a less expected entry … Brooklyn, N.Y.!

[admin]

BCR: Reservas internacionales netas llegan a US$61.289 millones

Las reservas internacionales netas (RIN), que contribuyen a la estabilidad económica y financiera de nuestro país, alcanzaron la cifra de US$61,289 millones al 7 de marzo del 2016, informó el Banco Central de Reserva (BCR) a través de su informe semanal.

Según informa la entidad emisora, esta cifra significa un incremento de US$1,091 millones, con respecto al cierre del mes de febrero.

El nivel de RIN está constituido principalmente por activos internacionales líquidos, siendo este nivel equivalente al 31% del Producto Bruto Interno (PBI) y a 20 meses de importaciones.

Este ratio es muy superior en comparación con las que tienen los demás países que integran la Alianza del Pacífico, pues Chile cuenta con 16% del PBI, al igual que Colombia (16%) y México (15%).

De igual modo, en el caso de la equivalencia de las RIN con las importaciones, nuestro país está por encima de Colombia (11%), Chile (8%) y México (5%).

IMPORTANCIA DE LAS RIN

Las reservas internacionales garantizan la disponibilidad de divisas para situaciones extraordinarias, que podrían darse por choques externos que se manifiesten en un eventual retiro significativo de depósitos en moneda extranjera y una posterior fuga de capitales del sistema financiero peruano.

De igual modo, una adecuada disponibilidad de divisas contribuye a la reducción del riesgo país y a la mejora de los calificativos crediticios del Perú, lo que redunda en condiciones superiores para la obtención de créditos del exterior por parte de las empresas nacionales, y además coadyuva a la expansión de la inversión extranjera en el país.

Asimismo, son particularmente importantes en un contexto de globalización de los mercados internacionales, reducción de las barreras a los movimientos de capital y volatilidad en los mercados financieros, cambiarios y de metales a escala mundial.