Cuando un rendimiento del 14% en un mundo de tasas negativas no es suficiente
Mi�rcoles, 13 de Abril del 2016 - 20:32:00
En un mundo de tasas negativas y escasos rendimientos, Egipto no encuentra compradores cuando se trata de su mercado de bonos.
Después de la devaluación de la libra egipcia y la mayor subida de las tasas de interés en al menos una década, la tasa de interés media de las letras a 12 meses que se venden en El Cairo saltó 181 puntos básicos y subió al 13,9 por ciento en una subasta la semana pasada.
Sin embargo, todavía están dando más o menos lo mismo que la deuda brasileña o de Zambia con una calificación de crédito más alta.
"Estamos entrando en un territorio donde los rendimientos de la deuda egipcia empiezan a ponerse interesantes, pero no estamos allí todavía", dijo Stephen Bailey-Smith, estratega de Global Evolution Fonds en Dinamarca. "Creemos que los rendimientos tienen más camino que subir".
America's New Impossible Trinity: You Can't Have Higher Wages, Steady Inflation And High Profits At The Same Time
Submitted by Tyler D.
04/13/2016 - 11:57
America’s ongoing labour productivity slump has created a new impossible trinity – policymakers can only choose two of the following three desirable outcomes: higher nominal wage growth, steady inflation and high corporate profits. The theory behind this new ‘impossible trinity’ is intuitively simple. If workers’ wages rise faster than their productivity, the companies paying those higher wages face two choices. They can either pass on the extra costs to customers, thereby leading to higher overall prices and rising inflation, or they can absorb the extra costs resulting in lower profit margins.
La divisa malaya supera al todopoderoso yen en 2016
Mi�rcoles, 13 de Abril del 2016 - 21:25:00
El ringgit de Malasia se ha recuperado tras un terrible inicio de año y supera al yen como la divisa más destacada de Asia en 2016, impulsado por una recuperación de los precios del petróleo y un enfriamiento del riesgo político.
La moneda se ha fortalecido más de un 11 por ciento este año y los analistas se han vuelto menos bajista, con una previsión media de 4,10 por dólar a fines de junio, en comparación con 4,35 al inicio de 2016. El ringgit subió a un máximo de ocho meses de 3,8465 el miércoles, extendiendo su repunte desde un mínimo de 17 años de septiembre.
FacePlant - Social Network Stock Slumps On Ad-Spend Plunge Chatter
Submitted by Tyler D.
04/13/2016 - 12:02
Facebook is making headlines this morning for CEO Zuckerberg's anti-Trump stance. However, shareholders are focused on chatter from a conference call, confirming Deutsche comments last week, that Ad Spend is plunging worse than expected - CLSA and AdParlor saying that Facebook advertising spend is down a shocking 18% in Q1...
¿Qué esperamos para los resultados del trimestre pasado?
Mi�rcoles, 13 de Abril del 2016 - 21:52:00
Depende de los datos. ¿De qué datos? Naturalmente, me refiero en el caso de las bolsas a la evolución de los resultados empresariales. ¿Quién puede negar que los resultados inspiran la evolución de las bolsas?
Para lo bueno y para lo malo. Esto es lo que nos muestra el último gráfico.
La cuestión a partir de ahora es evidente: ¿a qué nos enfrentamos en el futuro próximo con respecto a los resultados?. Comenzando por los primeros que vamos a conocer en los próximos días del Q1.
¿Qué esperamos para los resultados del trimestre pasado?
Hay que admitir que partimos de un elevado pesimismo (o realismo dirán algunos) para este trimestre.
¿Nuestra opinión? Demasiado pesimismo….para el conjunto del año.
Para el conjunto del año esperamos un aumento de los beneficios del S&P del 5 %, el doble a la previsión del mercado.
José Luis Martínez Campuzano
Estratega de Citi en España
Dólar corrigió al alza luego de fuerte baja en días previos
El precio del dólar subió ligeramente hoy frente al sol al cierre de la sesión cambiaria de hoy, tras situarse en 3.271 soles, luego de la fuerte baja registrada en los días previos, en un contexto en el cual el BCR continuó sin intervenir en el mercado.
Efectivamente, el precio de venta del dólar interbancario (entre bancos) terminó en 3.271 soles, nivel superior al de la jornada previa de 3.268 soles.
La cotización de venta del dólar en el mercado paralelo o casas de cambio se situó en 3.28 soles en horas de la tarde, mientras que en las ventanillas de los principales bancos se ubicó en 3.37 soles en promedio.
El Banco Central de Reserva (BCR) no intervino directamente en el mercado cambiario vendiendo dólares.
Depreciación
En lo que va del 2016 el sol se ha apreciado 4.19 %, teniendo en cuenta que el precio del dólar cerró hoy en 3.271 soles, luego de haber terminado el año pasado en 3.414 soles.
Según el ente emisor el dólar mostró un nivel mínimo de 3.255 soles y máximo de 3.278 soles en la jornada de hoy, además de un precio promedio de 3.2697 soles.
Andina
Publicado el Miércoles, 13 de Abril del 2016
Miercoles 13/04/16 Libro beige, inventarios de negocios
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Re: Miercoles 13/04/16 Libro beige, inventarios de negocios
por Fenix » Mié Abr 13, 2016 8:05 pm
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Re: Miercoles 13/04/16 Libro beige, inventarios de negocios
por Fenix » Mié Abr 13, 2016 8:14 pm
Russia Refutes Its Own Rumor, Says Doha Deal Will Have Few Detailed Committments
Submitted by Tyler D.
04/13/2016 - 12:26
Yesterday, Russia said there was a virtual deal assured with Saudi Arabia to "freeze" production (at record levels) that did not require Iran's participation. And now, it appears the Russians are walking that confident "hope" back. Russia's energy minster just told a briefing that the Doha "freeze" deal would be "loosely-framed with fed detailed commitments." Not exactly what the market was hoping for...
George Soros Warns Europe: Absorb 500k Refugees Costing $34Bn, Or Risk "Existential Threat"
Submitted by Tyler D.
04/13/2016 - 12:50
The asylum policy that emerged from last month’s EU-Turkey negotiations has four fundamental flaws, according to Billionaire puppet-master George Soros, which combined pose an "existential threat to Europe." His solution is 'simple' - Accept 500,000 refugees per year costing $34 billion year (via "surge" funding through more borrowing, and a newly-created refugee crisis fund from increased VAT on member states) or else, in his words, "the European Union is in mortal danger?"
Angola Could Be OPEC's First Member To Fall
Submitted by Tyler D.
04/13/2016 - 13:02
The Angola crisis is a warning to the other struggling OPEC countries. Though the larger nations are better off, sustained low prices will test their financial stability as well. The weak links have started to give way, and a few others might find themselves in the same situation as struggling Angola. A nation facing such a severe financial crisis will begin to question the necessity of remaining in OPEC.
Jump In Demand For 10 Year Paper In Strong, "Stopping-Through" Auction
Submitted by Tyler D.
04/13/2016 - 13:11
Yesterday's strong 3Y auction was a harbinger. Despite the relentless risk on rally, moments ago the US Treasury had no problems to sell $20 billion in 10 Year paper which priced at a high yield of 1.765% (98.5% allotted), stopping through 1.6 bps through the 1.781% When Issued, the biggest gap since last spring, and well below March's 1.895%. The bid to cover jumped from last month's 2.49, rising to 2.75, well above the 6 month average, and the highest since January.
Credit Suisse Is Now A Seller As S&P Hits "Bull Target" Levels, But With A Big Caveat
Tyler D.
04/13/2016 13:41 -0400
For the bears and the bulls, but mostly the bears, it's deja vu all over again.
As Credit Suisse points out in its daily Top 10 observations, "the price action in the last 48 hours feels a lot like Feb/early March" but nobody knows it better than the shorts: as BofA writes, "lot of pain being felt out there on the short side" and points out that its "short interest vs float basket strongly outperforming this morning, up 200bp" and highlights the following squeezed names: ATI +8%, X +8.12%, FIT +9.4%, WETF +8.9%, LPLA +5.90%, AMBA +7.12%, ATVI +3.79%, RCII +6.66%, JNS +5.54%, SPNC +6.6%%
In other words, the short squeeze is back and with a vengeance:
Yesterday saw heavy covering in energy w our squeeze basket up over 5% and Brent breaking above 200 DMA. Today GS most short rolling basket up 2.35% and our energy and material short baskets again outperform by 30 and 74bps respectively.
So where does that leave the market technically, and how is Credit Suisse trading it?
S&P 500 (June) now up at our 2070/80 bull target - the measured objective from the base and price resistance. With potential trend resistance not far above at 2090, we continue to look for sellers here. Russell 2000 stays trapped in its near-term range.
However, there is one very big caveat:
Concern, as always, is that market positioning remains short, and if we start taking out resistance levels, we could see a big short stop out...
In other words, go ahead and short, but the second the squeeze returns, run. This is prudent because as we will show momentarily, the risk of getting slaughtered in the latest ongoing short squeeze is high to quite high.
According To This Beige Book The Fed Should Be Hiking Rates Now
Submitted by Tyler D.
04/13/2016 - 14:17
The summary: modest to moderate growth, increasing consumer spending, stronger labor market conditions, improving labor market conditions, and most importantly, rising wages almost across the board. And virtually no mention of "global" conditions (and certainly no mention of China). So what excuse will the Fed use not to hike in April again?
About That "Surge" In The Baltic Dry Index
Submitted by Tyler D.
04/13/2016 - 14:00
Some 'entertainers' among the mainstream media have proclaimed the recent dead-cat-bounce in The Baltic Dry Freight Index as representative of some renaissance in China and thus the world's trade.. and thus why one should "buy buy buy" stocks. However, three quick points of note suggest this is nothing but noise as the index flounders around record lows.
The Great Glut: Why LNG Markets Might Not Balance Before 2025
Submitted by Tyler D.
04/13/2016 - 14:30
The worldwide rush to build liquefaction capacity has the characteristics of speculative bubbles and gold rushes of past centuries. In the case of the developing LNG glut, the blame must probably be shared by overambitious promoters and prestigious but imprudent energy experts.
Biggest Squeeze In 6 Months Sends "Most Shorted" Stocks To 2016 Highs
Submitted by Tyler D.
04/13/2016 - 14:45
As one veteran trader told us, this massive short-squeeze came "out of nowhere" seemingly driven by oil-headline-induced algo momentum ignition. Goldman's "Most Shorted" stocks are up a stunning 6% in the last 2 days - the biggest 2-day surge since Oct 2015 as Credit Suisse noted earlier there is a "lot of pain being felt out there on the short side." However, 5 of the last 6 times that shorts have been squeezed this much this fast, stocks have stalled dramatically...
The Global Economy Didn't Change Last Year, Views Of QE Did
Submitted by Tyler D.
04/13/2016 - 15:00
The stock market is still viewed as if it were a discounting mechanism, a system where information is processed and priced to deliver insight about the fundamental state of liquidity, markets, and the economy. That view has always been debatable, but never more so than the whole of this century so far. What were share prices suggesting, fundamentally, in March 2000? Or October 2007?
"Feeding The Monster" - The Complete Bear Case, In Charts
04/13/2016 16:18 -0400
Via NorthmanTrader.com,
In Greek mythology there was a monster called Cerberus, the hound of Hades, a monstrous multi-headed dog who guarded the gates of the underworld, preventing the dead from leaving. Today central banks have taken on the role of feeding our own modern version of Cerberus to keep all the troubles away. Ever since the 2008/2009 financial crisis Cerberus has been chained to a wall, but he’s pulling and he’s growling and he’s demanding ever more attention. But in the process of feeding Cerberus with ever lower rates and stimulus central banks keep making him stronger and fiercer and ever more aggressive. But worse, central bankers are running out of food to feed the monster.
This hound of Hades has 3 heads that are named debt, deflation and demographics. Together they make a deadly combination that will result in a massive reset of asset prices. And today I will aim to outline why this will eventually happen.
Most of the town folk have pretended for a long time that Cerberus is contained or denied his existence even as he has grown and is getting stronger. In fact a curious process of denial has begun.
Consider this dramatic shift in narrative:
In 2015 Wall Street analysts had projected the S&P 500 to end the year in the 2,200-2,300 range. Some of the key arguments centered around a narrative that earnings would expand further, that lower oil prices would be good for the consumer (which will spur spending) and that the FOMC would hike rates which would be a positive development as it would show confidence in the recovery and help bank earnings. In short everything was bullish.
None of these narratives came to fruition. GAAP earnings actually started to decline, the fall in oil prices became a disaster as energy stocks started walking on the bring of default and lower oil prices did not translate into increased consumer spending. Finally, after much handwringing and dozens and dozens of Fed speeches, the FOMC finally implemented its first rate hike in 9 years in December of 2015. The immediate result: Bank stocks fell 24%, global markets were in disarray as energy stocks crashed prompting the only response possible: Feed the monster again. China offered stimulus, the BOJ went rate negative, the ECB added QE and cut rates further into negative and the US FOMC took back its offered roadmap of 4 rate hikes for 2016 back to 2 and then, with a highly dovish speech by Janet Yellen, to possibly zero.
In short central banks have simply following the feeding pattern they have followed for years whenever Ceberus get hungry:
DJIA
Yet suddenly in 2016 the narrative has shifted and the irony has not been lost on people as evidenced by the response to this tweet:
Bullish in 2015:
- Rising earnings
- Falling oil
- Rate hikes
Bullish in 2016:
- Falling earnings
- Rising oil
- No rate hikes
— Northy (@NorthmanTrader) April 11, 2016
This is called playing tennis without the net especially considering we wouldn’t even have this conversation were it not for constant central bank intervention and jaw boning.
Look, humans are great at rationalizing anything. But there are fundamental truths that are very hard to escape from.
One truth is that GAAP earnings have been declining while pro-forma reporting has been able to mask this decline:
gaap
And the recent rally has made the market the most expensive in years in light of this substantial decrease in GAAP earnings:
SPX GAAP
Which brings us back to Cerberus and his 3 heads of debt, deflation and demographics.
A little history first. Ever since the 1980s we have been in a trend of lower highs in GDP growth:
GDP growth
On any sign of trouble central banks have done their part to help: Cut rates. But in doing so their efforts to reflate rates after each downturn has resulted in lower highs and culminated in, well, rock bottom:
Funds
The conclusion: Feeding the monster has diminishing returns and this in spite of feeding the monster ever more.
Consider that these rate declines enabled the ever increasing cycle of debt:
Debt
Not only in absolute terms, but also as part of the economy at large:
debt to GDP
And of course it’s a global issue and has only increased since the publication of this study last year:
debt
The immediate conclusion: Not only is GDP growth shrinking, it is also vastly overstated as it is augmented by deficit spending:
deficits
What central banks have been able to do is permit for all this debt growth to be virtually consequence free. Due to zero rates all debt can be financed at very low rates and so despite massive increases in debt the amount of money needed to pay interest on debt has actually been relatively stable at around $400-450B per year:
interest payments ST
The problem should be obvious: If the FOMC were to normalize rates to say, 3-4%, the incremental increase in interest payments would render the US discretionary budget insolvent as each 1% increase would ultimately cause a $200B increase in payments required. So the notion of rate normalization appears to be entirely unrealistic. Additionally there is zero evidence to suggest that the US government can run deficit free. So it’s a perpetual cycle of ever more debt that requires ever more resources to service it.
Even with the most tax receipts ever the US government is running a massive deficit as shown here for the first 6 months of fiscal 2016:
2016
Government debt is not the only issue. Consumers have been loading up on debt for years:
student loans auto loans
mortgage debt consumer credit
All of this also sustainable only due to low rates. In other words: Rate hikes would eventually severely disturb this seemingly serene picture.
household debt payments
Corporations have been joining the party and taking on ever more debt:
debt to equity
debt ebitda
Net Debt EBITDA
and the combination of it all shows a massive disconnect from the underlying productive asset base:
debt loans
The conclusion: Low rates have enabled an unprecedented increase in debt for governments, consumers and businesses.
What has it all produced? What are the results? And how do they pertain to sustainability?
If one takes on debt to expand, to produce more, to become more productive, to earn higher rates of return, then debt makes sense as it ultimately gets paid off. But none of these goals are being achieved:
Real household incomes have been decreasing:
real income
Retail sales are not increasing:
retail sales
And how could they? While debt service payments have remained stable, due to low rates, many key budget items for families have gone nowhere but up:
Rents:
rent
Medical:
medical
And we already mentioned student loans:
student loans
Combine some of these things and you get:
College-versus-Medical-Care-or-New-Car
But remember the Fed says there is no inflation. Worse for consumer: The dollars they do earn have ultimately less and less value as purchasing power keeps dwindling:
PP
None of this is sustainable or will result in growth without large increases in wage growth and productivity.
The evidence? Severely lacking.
On the student loan front already over 40% are no longer making payments:
loans
It’s a symptom of larger issues. Folks are stretched and don’t have the income or wage growth to sustain their financial obligations.
The structural reality shows lower highs for wage growth:
hourly wage
Productivity is not increasing:
labor productivity
In fact in this latest recovery, despite the unprecedented increases in debt, productivity is lagging severely:
productivity growth cycle
And it’s a global issue:
UK productivity
Has debt produced investment? The answer is no:
Investment
But it’s producing low rates enabled buybacks of stocks:
Buybacks
So the picture that presents itself is this:
Despite the taking on of record debt with ever more stimulus the returns on investment are decreasing.
The culprit: Structural deflationary forces, the biggest one of which is technology itself. One symptom is the massive value Wall Street places on the very companies that benefit the most from technology: The FANGs of the world. Facebook, Amazon, Netflix, Google and many others that are able to build global monopolies on scalable platforms that require relatively few people. None of these companies produce any real products, but they can reach literally billions of eyeballs with a limited number of employees. Highly effective, highly concentrated, but highly limited for employment expansion. One could even go as far as to say that some of these companies are in essence sapping productivity from the rest of society. All consumer activities associated with them could be counted as nonproductive.
After all who is productive browsing Facebook, YouTube, Google, etc?
social
The answer preciously few.
Speaking of few: The ones actually employed. The Fed tells us we are close to full employment. Yet the number of people not in the labor force has shown one long standing trend:
Not in labor force
As of late there has been a little dip and it is called a major improvement and change in trend.
Perhaps, but it is again the prospect of enhanced technology that suggests further deflationary trends to come, especially for many job categories that may face complete extinction. The driver? AI and robotics. We see incredible developments in driverless cars, chat bots, actual robots capable of taking on basic human tasks. While none of these technologies are ready for mass implementation, one can firmly sense that they are around the corner in the years ahead. The potential victims? The trucking industries, customer care services, warehouse operations, etc. In short: Millions of jobs may disappear and be replaced by what exactly?
Speaking of human replacement: Demographics.
The coming shift in demographics is dramatic:
children-vs-elderly-cotd
And the Fed knows is. The Atlanta Fed after all has this header image on their twitter feed:
demo
They know. And it’s a huge problem as the size of unfunded liabilities is exploding further with each day:
debt clock
Look we can all pretend Cerberus is not there and he won’t come to bite us or let the evils out of Hades. But the math simply doesn’t work.
Central banks can’t change the business cycle. Their game is one of pretend confidence and feeding the monster as best as they can. But they don’t produce jobs, they don’t produce growth, heck they can’t even predict anything:
Here’s the Atlanta Fed in February:
On Feb. 12, the #GDPNow model forecast for real GDP growth in Q12016 is 2.7% https://t.co/PkWNFJQxO0 pic.twitter.com/DUWSOb5Yg0
— Atlanta Fed (@AtlantaFed) February 12, 2016
And here they are in April:
On Apr. 8, the #GDPNow model forecast for real GDP growth in Q12016 is 0.1% https://t.co/64aJr2cHXM pic.twitter.com/vbBXF21oEu
— Atlanta Fed (@AtlantaFed) April 8, 2016
Alan Greenspan summarized it best:
greenspan
And so the warning signs are mounting:
deals
guidance
interbank
ipos
And I’m not alone in seeing massive risk building as a result of all these central bank actions.
Here’s Laurence Fink of Blackrock:
“These actions are severely punishing the world’s savers and creating incentives to reach for yield, pushing investors into less liquid asset classes and increased levels of risk, with potentially dangerous financial and economic consequences,” Fink said. That and other forces, including geopolitical instability, are creating “a level of fragility in the global economy that we have not seen since the lead-up to the financial crisis.”
But it’s not only financial risk that is of concern, there is the political risk that appears not priced into markets at all. In June the UK faces a Brexit vote largely driven by discontent over imposing European policies.
Even Germany is feeling the heat and a stretching of its political spectrum.
Germany’s Finance Minister:
Politicians from Chancellor Angela Merkel conservative camp, to which the finance minister belongs, have complained the ECB’s ultra-low rates are creating a “gaping hole” in savers’ finances and pensioners’ retirement plans as returns have dropped.
Schaeuble suggested they risked fuelling the rise of euroscepticism in Germany, where voters flocked to the right-wing Alternative for Germany in state elections last month.
“It is undisputable that the policy of low interest rates is causing extraordinary problems for the banks and the whole financial sector in Germany,” said the 73-year-old. “That also applies for retirement provisions.”
“That is why I always point out that this does not necessarily strengthen citizens’ readiness to trust in European integration,” he added in an interview.
Markets are currently ignoring all of it.
What does this all mean for stocks for the here and now?
On a GAAP basis earnings are back to where they were at the peak of the 2007 earnings cycle:
SPX GAAP
Structurally the S&P 500 has been following a familiar pattern: It rises on increased earnings, it breaks trend once earnings stall, has a correction and bounces back to reconnect with major moving averages before falling further. Markets have just bounced back and strongly so primarily driven by short covering and massive central bank intervention and jaw boning. But now we find ourselves at a key juncture: Repeat the pattern or diverge from it. My supposition has been that without a sudden positive turn in earnings this rally will be hard to sustain:
WLSH
XVG
So the question that presents itself is not one of destination. The destination is clear. It’s a massive re-alignment of asset prices down the road. It’s widely acknowledged that most asset prices are vastly overvalued. Here’s VC Peter Thiel:
“Startup tech stocks may be overvalued, but so are public equities, so are houses, so are government bonds”
While Janet Yellen denies the existence of bubbles she is amongst the chief architects of fueling overvaluation of asset prices globally.
The math shows clearly that the FOMC can’t really raise rates in any substantial manner at all. So it’s an elaborate PR dance that is on display on a monthly basis with dozens of Fed speeches full of sound and fury signifying nothing.
The real question then is one of the exact path to perdition. The charts above indicate that markets are at a key juncture. Either they will break lower this summer or, if central banks succeed one more time, can create the one element this bull market has been lacking: A proper blow-off top.
Just know a blow-off top will make markets not cheaper, but much more expensive:
SPX GAAP
In either case: Cerberus will continue to demand to be fed. And the math says he is getting hungrier every day. And looking around the world it appears he wants a change in diet as more and more stimulus is not only producing diminishing return, but is breeding more political discontent.
BOJ
DAXM
What this means for me from a trading perspective is simply this: I want to observe this earnings season for clarity. Without a sudden positive shift in earnings prospects this market remains at very high risk of following the previous historic structures, hence I remain defensive/tactical here. Should earnings improve subtantially then basic fib retraces of this rally may be buyable. If not, then Cerberus will break his leash sooner rather than later.
Submitted by Tyler D.
04/13/2016 - 12:26
Yesterday, Russia said there was a virtual deal assured with Saudi Arabia to "freeze" production (at record levels) that did not require Iran's participation. And now, it appears the Russians are walking that confident "hope" back. Russia's energy minster just told a briefing that the Doha "freeze" deal would be "loosely-framed with fed detailed commitments." Not exactly what the market was hoping for...
George Soros Warns Europe: Absorb 500k Refugees Costing $34Bn, Or Risk "Existential Threat"
Submitted by Tyler D.
04/13/2016 - 12:50
The asylum policy that emerged from last month’s EU-Turkey negotiations has four fundamental flaws, according to Billionaire puppet-master George Soros, which combined pose an "existential threat to Europe." His solution is 'simple' - Accept 500,000 refugees per year costing $34 billion year (via "surge" funding through more borrowing, and a newly-created refugee crisis fund from increased VAT on member states) or else, in his words, "the European Union is in mortal danger?"
Angola Could Be OPEC's First Member To Fall
Submitted by Tyler D.
04/13/2016 - 13:02
The Angola crisis is a warning to the other struggling OPEC countries. Though the larger nations are better off, sustained low prices will test their financial stability as well. The weak links have started to give way, and a few others might find themselves in the same situation as struggling Angola. A nation facing such a severe financial crisis will begin to question the necessity of remaining in OPEC.
Jump In Demand For 10 Year Paper In Strong, "Stopping-Through" Auction
Submitted by Tyler D.
04/13/2016 - 13:11
Yesterday's strong 3Y auction was a harbinger. Despite the relentless risk on rally, moments ago the US Treasury had no problems to sell $20 billion in 10 Year paper which priced at a high yield of 1.765% (98.5% allotted), stopping through 1.6 bps through the 1.781% When Issued, the biggest gap since last spring, and well below March's 1.895%. The bid to cover jumped from last month's 2.49, rising to 2.75, well above the 6 month average, and the highest since January.
Credit Suisse Is Now A Seller As S&P Hits "Bull Target" Levels, But With A Big Caveat
Tyler D.
04/13/2016 13:41 -0400
For the bears and the bulls, but mostly the bears, it's deja vu all over again.
As Credit Suisse points out in its daily Top 10 observations, "the price action in the last 48 hours feels a lot like Feb/early March" but nobody knows it better than the shorts: as BofA writes, "lot of pain being felt out there on the short side" and points out that its "short interest vs float basket strongly outperforming this morning, up 200bp" and highlights the following squeezed names: ATI +8%, X +8.12%, FIT +9.4%, WETF +8.9%, LPLA +5.90%, AMBA +7.12%, ATVI +3.79%, RCII +6.66%, JNS +5.54%, SPNC +6.6%%
In other words, the short squeeze is back and with a vengeance:
Yesterday saw heavy covering in energy w our squeeze basket up over 5% and Brent breaking above 200 DMA. Today GS most short rolling basket up 2.35% and our energy and material short baskets again outperform by 30 and 74bps respectively.
So where does that leave the market technically, and how is Credit Suisse trading it?
S&P 500 (June) now up at our 2070/80 bull target - the measured objective from the base and price resistance. With potential trend resistance not far above at 2090, we continue to look for sellers here. Russell 2000 stays trapped in its near-term range.
However, there is one very big caveat:
Concern, as always, is that market positioning remains short, and if we start taking out resistance levels, we could see a big short stop out...
In other words, go ahead and short, but the second the squeeze returns, run. This is prudent because as we will show momentarily, the risk of getting slaughtered in the latest ongoing short squeeze is high to quite high.
According To This Beige Book The Fed Should Be Hiking Rates Now
Submitted by Tyler D.
04/13/2016 - 14:17
The summary: modest to moderate growth, increasing consumer spending, stronger labor market conditions, improving labor market conditions, and most importantly, rising wages almost across the board. And virtually no mention of "global" conditions (and certainly no mention of China). So what excuse will the Fed use not to hike in April again?
About That "Surge" In The Baltic Dry Index
Submitted by Tyler D.
04/13/2016 - 14:00
Some 'entertainers' among the mainstream media have proclaimed the recent dead-cat-bounce in The Baltic Dry Freight Index as representative of some renaissance in China and thus the world's trade.. and thus why one should "buy buy buy" stocks. However, three quick points of note suggest this is nothing but noise as the index flounders around record lows.
The Great Glut: Why LNG Markets Might Not Balance Before 2025
Submitted by Tyler D.
04/13/2016 - 14:30
The worldwide rush to build liquefaction capacity has the characteristics of speculative bubbles and gold rushes of past centuries. In the case of the developing LNG glut, the blame must probably be shared by overambitious promoters and prestigious but imprudent energy experts.
Biggest Squeeze In 6 Months Sends "Most Shorted" Stocks To 2016 Highs
Submitted by Tyler D.
04/13/2016 - 14:45
As one veteran trader told us, this massive short-squeeze came "out of nowhere" seemingly driven by oil-headline-induced algo momentum ignition. Goldman's "Most Shorted" stocks are up a stunning 6% in the last 2 days - the biggest 2-day surge since Oct 2015 as Credit Suisse noted earlier there is a "lot of pain being felt out there on the short side." However, 5 of the last 6 times that shorts have been squeezed this much this fast, stocks have stalled dramatically...
The Global Economy Didn't Change Last Year, Views Of QE Did
Submitted by Tyler D.
04/13/2016 - 15:00
The stock market is still viewed as if it were a discounting mechanism, a system where information is processed and priced to deliver insight about the fundamental state of liquidity, markets, and the economy. That view has always been debatable, but never more so than the whole of this century so far. What were share prices suggesting, fundamentally, in March 2000? Or October 2007?
"Feeding The Monster" - The Complete Bear Case, In Charts
04/13/2016 16:18 -0400
Via NorthmanTrader.com,
In Greek mythology there was a monster called Cerberus, the hound of Hades, a monstrous multi-headed dog who guarded the gates of the underworld, preventing the dead from leaving. Today central banks have taken on the role of feeding our own modern version of Cerberus to keep all the troubles away. Ever since the 2008/2009 financial crisis Cerberus has been chained to a wall, but he’s pulling and he’s growling and he’s demanding ever more attention. But in the process of feeding Cerberus with ever lower rates and stimulus central banks keep making him stronger and fiercer and ever more aggressive. But worse, central bankers are running out of food to feed the monster.
This hound of Hades has 3 heads that are named debt, deflation and demographics. Together they make a deadly combination that will result in a massive reset of asset prices. And today I will aim to outline why this will eventually happen.
Most of the town folk have pretended for a long time that Cerberus is contained or denied his existence even as he has grown and is getting stronger. In fact a curious process of denial has begun.
Consider this dramatic shift in narrative:
In 2015 Wall Street analysts had projected the S&P 500 to end the year in the 2,200-2,300 range. Some of the key arguments centered around a narrative that earnings would expand further, that lower oil prices would be good for the consumer (which will spur spending) and that the FOMC would hike rates which would be a positive development as it would show confidence in the recovery and help bank earnings. In short everything was bullish.
None of these narratives came to fruition. GAAP earnings actually started to decline, the fall in oil prices became a disaster as energy stocks started walking on the bring of default and lower oil prices did not translate into increased consumer spending. Finally, after much handwringing and dozens and dozens of Fed speeches, the FOMC finally implemented its first rate hike in 9 years in December of 2015. The immediate result: Bank stocks fell 24%, global markets were in disarray as energy stocks crashed prompting the only response possible: Feed the monster again. China offered stimulus, the BOJ went rate negative, the ECB added QE and cut rates further into negative and the US FOMC took back its offered roadmap of 4 rate hikes for 2016 back to 2 and then, with a highly dovish speech by Janet Yellen, to possibly zero.
In short central banks have simply following the feeding pattern they have followed for years whenever Ceberus get hungry:
DJIA
Yet suddenly in 2016 the narrative has shifted and the irony has not been lost on people as evidenced by the response to this tweet:
Bullish in 2015:
- Rising earnings
- Falling oil
- Rate hikes
Bullish in 2016:
- Falling earnings
- Rising oil
- No rate hikes
— Northy (@NorthmanTrader) April 11, 2016
This is called playing tennis without the net especially considering we wouldn’t even have this conversation were it not for constant central bank intervention and jaw boning.
Look, humans are great at rationalizing anything. But there are fundamental truths that are very hard to escape from.
One truth is that GAAP earnings have been declining while pro-forma reporting has been able to mask this decline:
gaap
And the recent rally has made the market the most expensive in years in light of this substantial decrease in GAAP earnings:
SPX GAAP
Which brings us back to Cerberus and his 3 heads of debt, deflation and demographics.
A little history first. Ever since the 1980s we have been in a trend of lower highs in GDP growth:
GDP growth
On any sign of trouble central banks have done their part to help: Cut rates. But in doing so their efforts to reflate rates after each downturn has resulted in lower highs and culminated in, well, rock bottom:
Funds
The conclusion: Feeding the monster has diminishing returns and this in spite of feeding the monster ever more.
Consider that these rate declines enabled the ever increasing cycle of debt:
Debt
Not only in absolute terms, but also as part of the economy at large:
debt to GDP
And of course it’s a global issue and has only increased since the publication of this study last year:
debt
The immediate conclusion: Not only is GDP growth shrinking, it is also vastly overstated as it is augmented by deficit spending:
deficits
What central banks have been able to do is permit for all this debt growth to be virtually consequence free. Due to zero rates all debt can be financed at very low rates and so despite massive increases in debt the amount of money needed to pay interest on debt has actually been relatively stable at around $400-450B per year:
interest payments ST
The problem should be obvious: If the FOMC were to normalize rates to say, 3-4%, the incremental increase in interest payments would render the US discretionary budget insolvent as each 1% increase would ultimately cause a $200B increase in payments required. So the notion of rate normalization appears to be entirely unrealistic. Additionally there is zero evidence to suggest that the US government can run deficit free. So it’s a perpetual cycle of ever more debt that requires ever more resources to service it.
Even with the most tax receipts ever the US government is running a massive deficit as shown here for the first 6 months of fiscal 2016:
2016
Government debt is not the only issue. Consumers have been loading up on debt for years:
student loans auto loans
mortgage debt consumer credit
All of this also sustainable only due to low rates. In other words: Rate hikes would eventually severely disturb this seemingly serene picture.
household debt payments
Corporations have been joining the party and taking on ever more debt:
debt to equity
debt ebitda
Net Debt EBITDA
and the combination of it all shows a massive disconnect from the underlying productive asset base:
debt loans
The conclusion: Low rates have enabled an unprecedented increase in debt for governments, consumers and businesses.
What has it all produced? What are the results? And how do they pertain to sustainability?
If one takes on debt to expand, to produce more, to become more productive, to earn higher rates of return, then debt makes sense as it ultimately gets paid off. But none of these goals are being achieved:
Real household incomes have been decreasing:
real income
Retail sales are not increasing:
retail sales
And how could they? While debt service payments have remained stable, due to low rates, many key budget items for families have gone nowhere but up:
Rents:
rent
Medical:
medical
And we already mentioned student loans:
student loans
Combine some of these things and you get:
College-versus-Medical-Care-or-New-Car
But remember the Fed says there is no inflation. Worse for consumer: The dollars they do earn have ultimately less and less value as purchasing power keeps dwindling:
PP
None of this is sustainable or will result in growth without large increases in wage growth and productivity.
The evidence? Severely lacking.
On the student loan front already over 40% are no longer making payments:
loans
It’s a symptom of larger issues. Folks are stretched and don’t have the income or wage growth to sustain their financial obligations.
The structural reality shows lower highs for wage growth:
hourly wage
Productivity is not increasing:
labor productivity
In fact in this latest recovery, despite the unprecedented increases in debt, productivity is lagging severely:
productivity growth cycle
And it’s a global issue:
UK productivity
Has debt produced investment? The answer is no:
Investment
But it’s producing low rates enabled buybacks of stocks:
Buybacks
So the picture that presents itself is this:
Despite the taking on of record debt with ever more stimulus the returns on investment are decreasing.
The culprit: Structural deflationary forces, the biggest one of which is technology itself. One symptom is the massive value Wall Street places on the very companies that benefit the most from technology: The FANGs of the world. Facebook, Amazon, Netflix, Google and many others that are able to build global monopolies on scalable platforms that require relatively few people. None of these companies produce any real products, but they can reach literally billions of eyeballs with a limited number of employees. Highly effective, highly concentrated, but highly limited for employment expansion. One could even go as far as to say that some of these companies are in essence sapping productivity from the rest of society. All consumer activities associated with them could be counted as nonproductive.
After all who is productive browsing Facebook, YouTube, Google, etc?
social
The answer preciously few.
Speaking of few: The ones actually employed. The Fed tells us we are close to full employment. Yet the number of people not in the labor force has shown one long standing trend:
Not in labor force
As of late there has been a little dip and it is called a major improvement and change in trend.
Perhaps, but it is again the prospect of enhanced technology that suggests further deflationary trends to come, especially for many job categories that may face complete extinction. The driver? AI and robotics. We see incredible developments in driverless cars, chat bots, actual robots capable of taking on basic human tasks. While none of these technologies are ready for mass implementation, one can firmly sense that they are around the corner in the years ahead. The potential victims? The trucking industries, customer care services, warehouse operations, etc. In short: Millions of jobs may disappear and be replaced by what exactly?
Speaking of human replacement: Demographics.
The coming shift in demographics is dramatic:
children-vs-elderly-cotd
And the Fed knows is. The Atlanta Fed after all has this header image on their twitter feed:
demo
They know. And it’s a huge problem as the size of unfunded liabilities is exploding further with each day:
debt clock
Look we can all pretend Cerberus is not there and he won’t come to bite us or let the evils out of Hades. But the math simply doesn’t work.
Central banks can’t change the business cycle. Their game is one of pretend confidence and feeding the monster as best as they can. But they don’t produce jobs, they don’t produce growth, heck they can’t even predict anything:
Here’s the Atlanta Fed in February:
On Feb. 12, the #GDPNow model forecast for real GDP growth in Q12016 is 2.7% https://t.co/PkWNFJQxO0 pic.twitter.com/DUWSOb5Yg0
— Atlanta Fed (@AtlantaFed) February 12, 2016
And here they are in April:
On Apr. 8, the #GDPNow model forecast for real GDP growth in Q12016 is 0.1% https://t.co/64aJr2cHXM pic.twitter.com/vbBXF21oEu
— Atlanta Fed (@AtlantaFed) April 8, 2016
Alan Greenspan summarized it best:
greenspan
And so the warning signs are mounting:
deals
guidance
interbank
ipos
And I’m not alone in seeing massive risk building as a result of all these central bank actions.
Here’s Laurence Fink of Blackrock:
“These actions are severely punishing the world’s savers and creating incentives to reach for yield, pushing investors into less liquid asset classes and increased levels of risk, with potentially dangerous financial and economic consequences,” Fink said. That and other forces, including geopolitical instability, are creating “a level of fragility in the global economy that we have not seen since the lead-up to the financial crisis.”
But it’s not only financial risk that is of concern, there is the political risk that appears not priced into markets at all. In June the UK faces a Brexit vote largely driven by discontent over imposing European policies.
Even Germany is feeling the heat and a stretching of its political spectrum.
Germany’s Finance Minister:
Politicians from Chancellor Angela Merkel conservative camp, to which the finance minister belongs, have complained the ECB’s ultra-low rates are creating a “gaping hole” in savers’ finances and pensioners’ retirement plans as returns have dropped.
Schaeuble suggested they risked fuelling the rise of euroscepticism in Germany, where voters flocked to the right-wing Alternative for Germany in state elections last month.
“It is undisputable that the policy of low interest rates is causing extraordinary problems for the banks and the whole financial sector in Germany,” said the 73-year-old. “That also applies for retirement provisions.”
“That is why I always point out that this does not necessarily strengthen citizens’ readiness to trust in European integration,” he added in an interview.
Markets are currently ignoring all of it.
What does this all mean for stocks for the here and now?
On a GAAP basis earnings are back to where they were at the peak of the 2007 earnings cycle:
SPX GAAP
Structurally the S&P 500 has been following a familiar pattern: It rises on increased earnings, it breaks trend once earnings stall, has a correction and bounces back to reconnect with major moving averages before falling further. Markets have just bounced back and strongly so primarily driven by short covering and massive central bank intervention and jaw boning. But now we find ourselves at a key juncture: Repeat the pattern or diverge from it. My supposition has been that without a sudden positive turn in earnings this rally will be hard to sustain:
WLSH
XVG
So the question that presents itself is not one of destination. The destination is clear. It’s a massive re-alignment of asset prices down the road. It’s widely acknowledged that most asset prices are vastly overvalued. Here’s VC Peter Thiel:
“Startup tech stocks may be overvalued, but so are public equities, so are houses, so are government bonds”
While Janet Yellen denies the existence of bubbles she is amongst the chief architects of fueling overvaluation of asset prices globally.
The math shows clearly that the FOMC can’t really raise rates in any substantial manner at all. So it’s an elaborate PR dance that is on display on a monthly basis with dozens of Fed speeches full of sound and fury signifying nothing.
The real question then is one of the exact path to perdition. The charts above indicate that markets are at a key juncture. Either they will break lower this summer or, if central banks succeed one more time, can create the one element this bull market has been lacking: A proper blow-off top.
Just know a blow-off top will make markets not cheaper, but much more expensive:
SPX GAAP
In either case: Cerberus will continue to demand to be fed. And the math says he is getting hungrier every day. And looking around the world it appears he wants a change in diet as more and more stimulus is not only producing diminishing return, but is breeding more political discontent.
BOJ
DAXM
What this means for me from a trading perspective is simply this: I want to observe this earnings season for clarity. Without a sudden positive shift in earnings prospects this market remains at very high risk of following the previous historic structures, hence I remain defensive/tactical here. Should earnings improve subtantially then basic fib retraces of this rally may be buyable. If not, then Cerberus will break his leash sooner rather than later.
- Fenix
- Mensajes: 16334
- Registrado: Vie Abr 23, 2010 2:36 am
Re: Miercoles 13/04/16 Libro beige, inventarios de negocios
por Fenix » Mié Abr 13, 2016 8:15 pm
Who Said It: "There Is No Exuberance, No Optimism And Not Much Hope"
Submitted by Tyler D.
04/13/2016 - 17:00
NFIB Chief Economist Bill Dunkelberg cautioned that the small business sector is currently “underperforming, doing little more than operating in maintenance mode.” Although there has been “slow economic growth,” he warned that “there is no exuberance, no optimism and not much hope, the numbers make it clear.”
JPM: "People Are Being Forced Into A Rally That Remains Decidedly Unloved"
Submitted by Tyler D.
04/13/2016 - 17:18
"...investors remain reluctant about chasing a tape so far off its lows. Even assuming the USD weakness, oil strength, and better-than-feared Q1 reports, it’s hard to get the ’16 EPS number more than few dollars above $120 and investors should be careful..."
Yes, The Dollar Should Be Backed By Gold...
04/13/2016 17:30 -0400
Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),
A Return to Gold
“What if you were appointed to head the Fed? In your first week on the job, what would you do?”
The question was not exactly serious. Neither was the answer.
“We’d call in sick.”
the-us-federal-reserve-board-building-susan-candelario-1
Sorry boys and girls, you’ll have to start without us…
Drought, old age, traffic congestion, meanness, purple drink, bad taste, rap, suburbs, cancer, government, Hillary Clinton, restaurant music, shorts, Facebook, obesity – there are a lot of things wrong in the world. And most of them are not easily put right.
But there are some problems that could be solved overnight. Economic and financial problems, for example, solve themselves… if you let them. Almost all the macro-money wounds suffered by the modern world are self-inflicted.
Central banks and treasury departments around the world keep shooting themselves in the foot. But rather than stop manipulating the system… they buy another pair of shoes.
If we were miraculously appointed by President Trump to run the Fed, our first act would be to put the gun down. We would announce that, henceforth, anyone waiting for the next rate hike would have to wait a long time.
Because we wouldn’t be making any rate hikes… or rate cuts either. Instead, interest rates would have to take care of themselves. Lenders and borrowers would set their own rates.
But what about if banks got into trouble? Ah… we’d take care of that too. We’d point out that the Fed would no longer lend to them in an emergency. Our announcement: “To any bank that runs out of money: Drop dead.”
drop dead
Advice to insolvent banks from the hypothetical Bonner Fed
Then, we would put the entire Fed balance sheet – the more than $4 trillion in dodgy bonds it bought over the last eight years – up for sale. And we would send layoff notices to the entire staff…telling them to clean out their desks, admonishing them that henceforth they would have to seek honest employment or try to land a job on Wall Street.
Had we the power, we would take one further step: We would declare that Americans could use whatever currency they wanted, that the dollar would once again be exchangeable for a fixed quantity of gold, and that the U.S. Treasury would accept any major currency – including bitcoin – in payment of taxes.
See how easy it would be? All of the heavy lifting could be accomplished before lunchtime on our first Monday on the job. Then we would slip out the back of the Eccles Building… with luck, just before posse caught up to us.
posse
The posse (John Law chapter)
Solid Dollar
And yet, those simple changes would eliminate most of the money troubles facing the U.S. With no further gas coming in, the debt bubble would deflate. Bad investments, bad business, and overpriced assets would all lose air… and disappear.
The dollar would be solid again. It would represent real value, not counterfeit wealth. Borrowing would be based on real savings, not just more hollow credits. And – with only scarce capital to work with (rather than an unlimited supply of phony-baloney credit) – investors and entrepreneurs would be careful about what they did with their investments.
They would put capital to work only in projects that increased the real value of America’s assets, rather than those that merely shifted wealth from Main Street to Wall Street.
1882-liberty-head-gold-quarter-eagle
Honest money: an 1882 gold quarter
Admittedly, this would be a lot for the American people to take in. Most people have no idea how the money system works. The credit dollar is all they know. And they still have faith that the big heads at the Fed know what they are doing.
The newspapers and pundits would howl in alarm. Respectable economists would choke on their indignation. Lynch mobs would form. They would call our program “radical” and “irresponsible,” unaware that today’s system is the most radical, experimental, and irresponsible in history.
Our proposals would take the country back to a traditional and sensible money system. People would decide for themselves what kind of money they wanted to use… whether to save it… or spend it… and what price to put on it if they wanted to lend it out. Would it work?
We don’t know, but we’d like to see someone give it a try.
US_$10,000_1882_Gold_Certificate
A certificate for sound money, and quite a bit of it too. Our benevolent modern-day social engineers would be appalled: not only is this a certificate for gold, it is one for 10,000 smackers worth of the stuff! Only über-turrsts could possibly have use for such a thing…it clearly embodies way too much freedom and responsibility for the average tax serf. If you’re not convinced, ask Larry Summers, and if that doesn’t help, think about the children!
Submitted by Tyler D.
04/13/2016 - 17:00
NFIB Chief Economist Bill Dunkelberg cautioned that the small business sector is currently “underperforming, doing little more than operating in maintenance mode.” Although there has been “slow economic growth,” he warned that “there is no exuberance, no optimism and not much hope, the numbers make it clear.”
JPM: "People Are Being Forced Into A Rally That Remains Decidedly Unloved"
Submitted by Tyler D.
04/13/2016 - 17:18
"...investors remain reluctant about chasing a tape so far off its lows. Even assuming the USD weakness, oil strength, and better-than-feared Q1 reports, it’s hard to get the ’16 EPS number more than few dollars above $120 and investors should be careful..."
Yes, The Dollar Should Be Backed By Gold...
04/13/2016 17:30 -0400
Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),
A Return to Gold
“What if you were appointed to head the Fed? In your first week on the job, what would you do?”
The question was not exactly serious. Neither was the answer.
“We’d call in sick.”
the-us-federal-reserve-board-building-susan-candelario-1
Sorry boys and girls, you’ll have to start without us…
Drought, old age, traffic congestion, meanness, purple drink, bad taste, rap, suburbs, cancer, government, Hillary Clinton, restaurant music, shorts, Facebook, obesity – there are a lot of things wrong in the world. And most of them are not easily put right.
But there are some problems that could be solved overnight. Economic and financial problems, for example, solve themselves… if you let them. Almost all the macro-money wounds suffered by the modern world are self-inflicted.
Central banks and treasury departments around the world keep shooting themselves in the foot. But rather than stop manipulating the system… they buy another pair of shoes.
If we were miraculously appointed by President Trump to run the Fed, our first act would be to put the gun down. We would announce that, henceforth, anyone waiting for the next rate hike would have to wait a long time.
Because we wouldn’t be making any rate hikes… or rate cuts either. Instead, interest rates would have to take care of themselves. Lenders and borrowers would set their own rates.
But what about if banks got into trouble? Ah… we’d take care of that too. We’d point out that the Fed would no longer lend to them in an emergency. Our announcement: “To any bank that runs out of money: Drop dead.”
drop dead
Advice to insolvent banks from the hypothetical Bonner Fed
Then, we would put the entire Fed balance sheet – the more than $4 trillion in dodgy bonds it bought over the last eight years – up for sale. And we would send layoff notices to the entire staff…telling them to clean out their desks, admonishing them that henceforth they would have to seek honest employment or try to land a job on Wall Street.
Had we the power, we would take one further step: We would declare that Americans could use whatever currency they wanted, that the dollar would once again be exchangeable for a fixed quantity of gold, and that the U.S. Treasury would accept any major currency – including bitcoin – in payment of taxes.
See how easy it would be? All of the heavy lifting could be accomplished before lunchtime on our first Monday on the job. Then we would slip out the back of the Eccles Building… with luck, just before posse caught up to us.
posse
The posse (John Law chapter)
Solid Dollar
And yet, those simple changes would eliminate most of the money troubles facing the U.S. With no further gas coming in, the debt bubble would deflate. Bad investments, bad business, and overpriced assets would all lose air… and disappear.
The dollar would be solid again. It would represent real value, not counterfeit wealth. Borrowing would be based on real savings, not just more hollow credits. And – with only scarce capital to work with (rather than an unlimited supply of phony-baloney credit) – investors and entrepreneurs would be careful about what they did with their investments.
They would put capital to work only in projects that increased the real value of America’s assets, rather than those that merely shifted wealth from Main Street to Wall Street.
1882-liberty-head-gold-quarter-eagle
Honest money: an 1882 gold quarter
Admittedly, this would be a lot for the American people to take in. Most people have no idea how the money system works. The credit dollar is all they know. And they still have faith that the big heads at the Fed know what they are doing.
The newspapers and pundits would howl in alarm. Respectable economists would choke on their indignation. Lynch mobs would form. They would call our program “radical” and “irresponsible,” unaware that today’s system is the most radical, experimental, and irresponsible in history.
Our proposals would take the country back to a traditional and sensible money system. People would decide for themselves what kind of money they wanted to use… whether to save it… or spend it… and what price to put on it if they wanted to lend it out. Would it work?
We don’t know, but we’d like to see someone give it a try.
US_$10,000_1882_Gold_Certificate
A certificate for sound money, and quite a bit of it too. Our benevolent modern-day social engineers would be appalled: not only is this a certificate for gold, it is one for 10,000 smackers worth of the stuff! Only über-turrsts could possibly have use for such a thing…it clearly embodies way too much freedom and responsibility for the average tax serf. If you’re not convinced, ask Larry Summers, and if that doesn’t help, think about the children!
- Fenix
- Mensajes: 16334
- Registrado: Vie Abr 23, 2010 2:36 am
Re: Miercoles 13/04/16 Libro beige, inventarios de negocios
por Fenix » Mié Abr 13, 2016 8:18 pm
On Thomas Jefferson's Birthday, Here Are His Most Prophetic Statements
Submitted by Tyler D.
04/13/2016 - 18:27
"If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers occupied. The issuing power of money should be taken from the bankers and restored to Congress and the people to whom it belongs. I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies."
Startling Inflation News Illustrates The Failure Of Easy Money
Submitted by Tyler D.
04/13/2016 - 19:00
Prices are actually falling faster than the official CPI number indicates, and have not picked up as oil has stabilized. In fact, the US has been in deflation for the past five months. So it’s no surprise that people who are actually buying the stuff that’s falling in price would register this fact and answer surveys with deflationary sentiments. It’s also no surprise that central banks, which presumably see the same data, would be looking for ways to ease even further (Japan and Europe) or walk back their previous threats to tighten (the US Fed) - apparently in the hope that increasing the dose will cure the credit addiction.
Bank Of America Reveals "The Next Big Trade"
Submitted by Tyler D.
04/13/2016 - 19:13
Markets have stopped focusing on what central banks are doing and are "positioning for what they believe central banks may or may not do," according to BofA's Athanasios Vamvakidis as he tells FX traders to "prepare to fight the central banks," as the market reaction to central bank policies this year reflects transition to a new regime, in which investors start speculating which central bank will have to give up easing policies first.
The Fed Just Held An Emergency Meeting To Discuss Capital Markets
Tyler D.
04/13/2016 20:49 -0400
As we reported on Friday morning, in a surprise announcement the Fed revealed under its "Government in the Sunshine" protocol that it would hold a closed meeting under expedited procedures in which it would review the "advance and discount rates to be charged by Federal Reserve Banks." The last time such a meeting took place was less than a month before the Fed hiked rates for the first time in years.
What took place during the meeting will remain a mystery, however what made it particularly interesting is that just hours later it was followed by another impromptu closed-door session, this time between president Obama and Janet Yellen.
What information was exchanged during the follow up meeting is also a secret, although the White House was kind enough to release the following statement:
"The President and Chair Yellen met this afternoon in the Oval Office as part of an ongoing dialogue on the state of the economy. They discussed both the near and long-term growth outlook, the state of the labor market, inequality, and potential risks to the economy, both in the United States and globally. They also discussed the significant progress that has been made through the continued implementation of Wall Street Reform to strengthen our financial system and protect consumers."
We also will never know if there is any coincidence between these two meeting and the fact that just after they took place, the S&P went from red on the year to fresh 2016 highs in under two days.
We do know, however, that it is a very busy week for unexpected, emergency meeting for the Fed, because according to the Fed's board meeting website, today at 3pm the Fed held yet another previously unscheduled "meeting under expedited procedures", only instead of discussing rates this time, the Fed talked about institutions, infrastructure and financial markets.
Don't expect the Fed to disclose what was said during this meeting either, although keep an eye on stocks: they may be the only tell one needs.
Submitted by Tyler D.
04/13/2016 - 18:27
"If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers occupied. The issuing power of money should be taken from the bankers and restored to Congress and the people to whom it belongs. I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies."
Startling Inflation News Illustrates The Failure Of Easy Money
Submitted by Tyler D.
04/13/2016 - 19:00
Prices are actually falling faster than the official CPI number indicates, and have not picked up as oil has stabilized. In fact, the US has been in deflation for the past five months. So it’s no surprise that people who are actually buying the stuff that’s falling in price would register this fact and answer surveys with deflationary sentiments. It’s also no surprise that central banks, which presumably see the same data, would be looking for ways to ease even further (Japan and Europe) or walk back their previous threats to tighten (the US Fed) - apparently in the hope that increasing the dose will cure the credit addiction.
Bank Of America Reveals "The Next Big Trade"
Submitted by Tyler D.
04/13/2016 - 19:13
Markets have stopped focusing on what central banks are doing and are "positioning for what they believe central banks may or may not do," according to BofA's Athanasios Vamvakidis as he tells FX traders to "prepare to fight the central banks," as the market reaction to central bank policies this year reflects transition to a new regime, in which investors start speculating which central bank will have to give up easing policies first.
The Fed Just Held An Emergency Meeting To Discuss Capital Markets
Tyler D.
04/13/2016 20:49 -0400
As we reported on Friday morning, in a surprise announcement the Fed revealed under its "Government in the Sunshine" protocol that it would hold a closed meeting under expedited procedures in which it would review the "advance and discount rates to be charged by Federal Reserve Banks." The last time such a meeting took place was less than a month before the Fed hiked rates for the first time in years.
What took place during the meeting will remain a mystery, however what made it particularly interesting is that just hours later it was followed by another impromptu closed-door session, this time between president Obama and Janet Yellen.
What information was exchanged during the follow up meeting is also a secret, although the White House was kind enough to release the following statement:
"The President and Chair Yellen met this afternoon in the Oval Office as part of an ongoing dialogue on the state of the economy. They discussed both the near and long-term growth outlook, the state of the labor market, inequality, and potential risks to the economy, both in the United States and globally. They also discussed the significant progress that has been made through the continued implementation of Wall Street Reform to strengthen our financial system and protect consumers."
We also will never know if there is any coincidence between these two meeting and the fact that just after they took place, the S&P went from red on the year to fresh 2016 highs in under two days.
We do know, however, that it is a very busy week for unexpected, emergency meeting for the Fed, because according to the Fed's board meeting website, today at 3pm the Fed held yet another previously unscheduled "meeting under expedited procedures", only instead of discussing rates this time, the Fed talked about institutions, infrastructure and financial markets.
Don't expect the Fed to disclose what was said during this meeting either, although keep an eye on stocks: they may be the only tell one needs.
- Fenix
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Re: Miercoles 13/04/16 Libro beige, inventarios de negocios
por admin » Mar Abr 19, 2016 12:28 pm
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