Posts Tagged ‘India’

America’s Two Economies, and Why One is Recovering and the Other Isn’t.

America’s Two Economies, and Why One is Recovering and the Other Isn’t.

wall street, economyCourtesy of Robert Reich 

Next time you hear an economist or denizen of Wall Street talk about how the “American economy” is doing these days, watch your wallet.

There are two American economies. One is on the mend. The other is still coming apart.

The one that’s mending is America’s Big Money economy. It’s comprised of Wall Street traders, big investors, and top professionals and corporate executives.

The Big Money economy is doing well these days. That’s partly thanks to Ben Bernanke, whose Fed is keeping interest rates near zero by printing money as fast as it dare. It’s essentially free money to America’s Big Money economy.

Free money can almost always be put to uses that create more of it. Big corporations are buying back their shares of stock, thereby boosting corporate earnings. They’re merging and acquiring other companies.

And they’re going abroad in search of customers.

Thanks to fast-growing China, India, and Brazil, giant American corporations are racking up sales. They’re selling Asian and Latin American consumers everything from cars and cell phones to fancy Internet software and iPads. Forty percent of the S&P 500 biggest corporations are now doing more than 60 percent of their business abroad. And America’s biggest investors are also going abroad to get a nice return on their money.

So don’t worry about America’s Big Money economy. According to a Wall Street Journal survey released Thursday, overall compensation in financial services will rise 5 percent this year, and employees in some businesses like asset management will get increases of 15 percent.

The Dow Jones Industrial Average is back to where it was before the Lehman bankruptcy filing triggered the financial collapse. And profits at America’s largest corporations are heading upward.

But there’s another American economy, and it’s not on the mend. Call it the Average Worker economy.

Last Friday’s jobs report showed 159,000 new private-sector jobs in October. That’s better than previous months. But 125,000 net new jobs are needed just to keep up with the growth of the American labor force. So another way of expressing what happened to jobs in October is to say 24,000 were added over what we need just to stay even.

Yet the American economy has lost 15 million jobs since the start of the Great Recession. And if you add in the growth of…
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Rogoff: Beware of Wounded Lions

Rogoff: Beware of Wounded Lions

Courtesy of Mark Thoma, Economist’s View

Kenneth Rogoff says the rest of the world should not ignore the recent threats of protectionist measures coming from the US:

Beware of Wounded Lions, by Kenneth Rogoff, Commentary, Project Syndicate:  G-20 leaders who scoff at the United States’ proposal for numerical trade-balance limits should know that they are playing with fire. … 

According to a recent … report…, fully 25% of the rise in unemployment since 2007, totaling 30 million people worldwide, has occurred in the US. If this situation persists, as I have long warned it might, it will lay the foundations for huge global trade frictions. The voter anger expressed in the US mid-term elections could prove to be only the tip of the iceberg…, the ground for populist economics is becoming more fertile by the day. …

True, today’s trade imbalances are partly a manifestation of broader long-term economic trends, such as Germany’s aging population, China’s weak social safety net, and legitimate concerns in the Middle East over eventual loss of oil revenues. And, to be sure, it would very difficult for countries to cap their trade surpluses in practice: there are simply too many macroeconomic and measurement uncertainties.

Moreover, it is hard to see how anyone – even the IMF, as the US proposal envisions – could enforce caps on trade surpluses. The Fund has little leverage over the big countries that are at the heart of the problem.

Still,… world leaders … must recognize the pain that the US is suffering in the name of free trade. Somehow, they must find ways to help the US expand its exports. Fortunately, emerging markets have a great deal of scope for action.

India, Brazil, and China, for example, continue to exploit World Trade Organization rules that allow long phase-in periods for fully opening up their domestic markets to developed-country imports… A determined effort by emerging-market countries that have external surpluses to expand imports from the US (and Europe) would do far more to address the global trade imbalances … than changes to their exchange rates or fiscal policies. …

American hegemony over the global economy is perhaps in its final decades. China, India, Brazil, and other emerging markets are in ascendancy. Will the transition will go smoothly and lead to a global economy that is both fairer and more prosperous?

However much we


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The Road to World War III – The Global Banking Cartel Has One Card Left to Play

The Road to World War III – The Global Banking Cartel Has One Card Left to Play

By David DeGraw (h/t ZH)

The following is Part I to David DeGraw’s new book, “The Road Through 2012: Revolution or World War III.” This is the second installment to a new seven-part series that we will be posting throughout the next few weeks. You can read the introduction to the book here. To be notified via email of new postings from this series, subscribe here.

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Editor’s Note: The following is Part I to David DeGraw’s new book, “The Road Through 2012: Revolution or World War III.” This is the second installment to a new seven-part series that we will be posting throughout the next few weeks. You can read the introduction to the book here. To be notified via email of new postings from this series, subscribe here.

I: Economic Imperial Operations

The Road to World War III - The Global Banking Cartel Has One Card Left to PlayWhen we analyze our current crisis, focusing on the past few years of economic activity blinds us to the history and context that are vital to understanding the root cause. What we have been experiencing is not the result of an unforeseen economic crash that appeared out of the blue with the collapse of the housing market. It was certainly not brought on by people who bought homes they couldn’t afford. To frame this crisis around a debate on economic theory misses the point entirely. To even blame it on greedy bankers,…
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David Rosenberg Vindicated

David Rosenberg Vindicated

Courtesy of Tyler Durden

From today’s Breakfast with Rosie

NOT IN KANSAS ANY MORE

Well, it took some patience but it looks like the economic environment I was depicting this time last year just shortly after I joined GS+A is starting to play out. Deflation risks are prevailing and a growing acknowledgment over the lack of sustainability regarding the nascent economic recovery. Extreme fragility and volatility is what one should expect in a post-bubble credit collapse and asset inflation that we endured back in 2008 and part of 2009.

History is replete with enough examples of this — balance sheet recessions are different animals than traditional inventory recessions, and the transition to the next sustainable economic expansion, and bull market (the operative word being sustainability) in these types of cycles take between 5 to 10 years and are fraught with periodic setbacks. I know this sounds a bit dire, but little has changed from where we were a year ago. To be sure, we had a tremendous short-covering and a government induced equity market rally on our hands and it’s really nothing more than a commentary on human nature that so many people rely on what the stock market is doing at any moment in time to base their conclusions on what the economic landscape is going to look like.

So, we had a huge bounce off the lows, but we had a similar bounce off the lows in 1930. The equity market was up something like 50% in the opening months of 1930, and while I am sure there was euphoria at the time that the worst of the recession and the contraction in credit was over, it’s interesting to see today that nobody talks about the great runup of 1930 even though it must have hurt not to have participated in that wonderful rally. Instead, when we talk about 1930 today, the images that are conjured up are hardly very joyous.

I’m not saying that we are into something that is entirely like the 1930s. But at the same time, we’re not in Kansas any more; if Kansas is the type of economic recoveries and market performances we came to understand in the context of a post-World War II era where we had a secular credit expansion, youthful boomers heading into their formative working and spending years and all the economic activity that…
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Where’s the Land of Opportunity These Days?

Where’s the Land of Opportunity These Days?

By Doug Hornig, Casey Research 

Surging Oil Industry Brings Opportunity To Rural California

Recent decades have witnessed an amazing shrinkage of the American manufacturing sector, from #1 in the world to virtual non-existence. Companies, taking advantage of cheaper labor costs abroad, have either outsourced some portion of the workforce or relocated their entire operations offshore. Remember the “great sucking sound” that Ross Perot claimed he could hear? 

Well, today, if you listen, there’s a different, almost opposite sound in the air. Instead of American jobs going to lower-paid foreign workers, foreign workers are leaving America for better jobs. It’s happening, increasingly, among professionals who expatriated to the U.S. in search of the good life and have begun seeing better prospects back in their countries of origin. 

In a worldwide survey by HSBC Bank International, conducted among 3,100 expats in the first quarter of 2009, more than 1 in 5 (22%) working and living in the U.S. said they were considering pulling up stakes and returning home. That’s 50% higher than the overall average of expats everywhere. 

This may seem strange to residents of the traditional land of opportunity. We’re much more accustomed to foreign graduates of American colleges doing whatever it takes to get that green card. But it’s in keeping with numbers noted by other observers. 

And it’s all about the career prospects.

Those studying the trend say that foreign professionals are becoming frustrated with their lack of advancement in the U.S., citing widespread salary and promotion freezes, not to mention layoffs. As our unemployment rate has ballooned to an “official” 10% and everyone is downsizing, people with advanced degrees have not been spared. Competition for the best jobs is more intense than ever, and switching employers no longer results in an automatic step up the ladder.

In addition, employees holding H-1B skilled worker visas often get the short end of the stick from employers. No one with a hard-to-obtain H-1B is going to complain about unfair treatment – or so the thinking goes – because termination most often results in a quick plane ride back home.

But that may not be much of a sword to hold over someone’s head as home begins to look more and more attractive. People who came here from India and China, even as recently as a decade ago, are well aware of the explosion in opportunity that’s transpired way…
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Who is Buying All The Gold?

Who is Buying All The Gold (GLD)?

Low angle view of a statue of Buddha in a temple, Namgyal Monastery, McLeod Ganj, Dharamshala, Himachal Pradesh, India

Courtesy of Andrew Horowitz, The Disciplined Investor 

A picture tells a thousand tons…. We knew that over the past several months there has been a great deal of talk about replacing the U.S. dollar as the world’s reserve currency.

But, it appears that these nations have been stocking up on GOLD instead. Makes sense actually….

 

 


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Competition for the IMF’s Gold?

In contrast to our friends at Elliott Wave Int., Casey Reserch remains bullish on gold…

Competition for the IMF’s Gold?

Coins in a Cash Box

By Jeff Clark, Senior Editor, Casey’s Gold & Resource Report

On February 24, Reuters reported that the Reserve Bank of India was “set to be a buyer” of the 191.3 tonnes (6.74 million ounces) of gold the IMF is selling. Although the bank wouldn’t comment directly on the possibility, they did say, “We are closely looking at the gold market… gold is a safe bet.”

The article then quoted an unidentified official from the China Gold Association as saying, "It is not feasible for China to buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility.”

But the next day, Finmarket news agency in Russia reported that China “confirmed its intention” to buy the IMF gold. "Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market.”

While they’ve been silent since, both India and China have publicly hinted they want this latest batch of yellow bars from the IMF. There’s no way to know if a competitive bid would spring up between these two countries, but…can you imagine the ramifications if one did?

When India bought 200 tonnes of IMF gold last November 3, it set off a buying spree that saw gold rise 14.2% in 4 weeks. What if this time around, a couple central banks both want the gold for sale? What if China says to India, “Not so fast, guys. We’d like to bid on that, too…” and word of that clash leaked out?

Pure speculation, of course, but competing for gold purchases isn’t a far-fetched idea. This sale is not pre-arranged; it’s an open market sale. Also, there’s only so much to go around. These two countries have only a tiny amount of their reserves…
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Thank You, India.

Thank You, India.

Courtesy of Joshua M Brown, The Reformed Broker 

When people drone on endlessly about the Decline of the American Empire and about the fact that 10% plus unemployment will be a permanent feature, they forget about a very basic trend that has not abated…skilled, intelligent people from around the world want to "make it" here, more than anywhere else.

I was surprised to learn that, based on data from the H-1B Visa program for skilled immigrants, such a large percentage of these strivers are coming here from India.

From Economix:

Bear in mind, though, that a lot of the world’s innovators are still hoping to come to the United States.

Many of these researchers come in through the country’s H-1B visa program, which is for skilled immigrants. The majority of these immigrants come from India, and the next biggest group comes from China:

I thought that was pretty cool.  Keep ‘em coming, as innovation is our only way forward.  This skilled wave of immigrants will surely deliver it.

Source:

Paying For Innovation (Economix)

Read Also:

We’re Down, But Don’t You Dare Count Us Out (TRB) 


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The Giant Vampire Squid’s Journey to the East

This is a chilling and complex, historical look at members of the species called Giant Vampire Squid. – Ilene

The Giant Vampire Squid’s Journey to the East

Couresy of Darryl Schoon at DRSchoon.com

Usury, once a venal sin, was now commonplace and bankers who live by the charging of interest were considered respectable. The hand of evil was everywhere as the end-times, the end of days, were upon them.

Rolling Stone writer Matt Taibbi’s description of Goldman Sachs as a Giant Vampire Squid which wraps itself around its victims draining them of their productivity and profits is chillingly accurate.

In truth, Matt Taibbi’s Giant Vampire Squid was created in the recesses of 17th century London, for Goldman Sachs is but one of many; but, unlike Frankenstein’s monster, the Giant Vampire Squid is not a fable. It is as real as are its appetites and victims; and, although now badly wounded, the Giant Vampire Squid is still alive—and it’s headed east.

Taibbi’s metaphor is an apt description for modern banks, especially investment banks such as Goldman Sachs, JP Morgan Chase, Deutsche Bank, Credit Swiss, RBS, etc. Allowed by governments to create capital from virtually thin-air, these banks have an in-house advantage in a world dependent on credit, an advantage they use to leverage the world’s need for money into profits and obscene bonuses for themselves.

Banking is simple. We profit by the indebting of others by taking advantage of their need for money. We do this by creating money from nothing using the savings of others to do so.
The Dark Arts: The Secrets of Banking, 14th ed.

THE FEEDING MECHANISM OF THE GIANT VAMPIRE SQUID

The feeding mechanism of the Giant Vampire Squid is simple. First, it expands the size of its victim by injecting it with credit through its beak. Over time, this will enlarge the victim to its maximum possible size.

This mimics the nurturing process in nature. But the Giant Vampire Squid’s intent is singularly self-serving. At first, the victim enjoys the squid’s credit, absorbing as much as possible. The victim experiences the increased growth as pleasant and positive; and so it is—but ultimately only to the benefit of the squid.

The victim, enlarged to its maximum size and thoroughly entwined by tentacles, the Giant Vampire…
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Global Consumers Still Skittish, But Buzz Slowing and Some Spending Up

With thanks to James Russo of Neilson Economic Current:

Consumers in 10 of the world’s top economies continued to be wary of spending their money in May, according to the latest edition of the Nielsen Economic Current, which provides a snapshot of global consumer and retail trends across 10 countries which represent nearly 65 percent of global GDP.  Tracking key performance indicators, Brazil and the U.K. led the pack with solid improvements in their scores, while the U.S. and Canada showed declines.  The rest of the countries tracked (China, France, Germany, India, Italy and Spain) showed no movement from the previous month. In all countries measured, consumers are saving more of their money – even Americans, who have had a low savings rate, are holding onto their cash as concerns about unemployment and financial security continue.

1=Very Strong Growth >/= +5%;  2 = Growth between +1 and +4%;  3 =Neutral Between -1 and +1%;  4 =Negative between -1 and -4%;  5 = Very Negative = -4%

 

A Link Between Buzz And Spending

 

For the latest Economic Current, Nielsen tracked online discussions about the economy and found that since mid-March 2009, recession buzz has dropped 47 percent in the U.S., UK, Germany, Italy, Spain, Australia and New Zealand.

Globally, Nielsen is tracking online discussions related to the recession and when the recovery may emerge. While discussions about the recovery are still quite low, we have seen that the public is talking less about the recession — often dramatically less,” said James Russo, Vice President, Global Consumer Insights for The Nielsen Company.

In the U.S., we found that recession discussions have dropped since hitting a peak in January.  There appears to be a strong correlation between what consumers are saying in discussion groups and their subsequent actual purchase behavior.  From the end of 2008 to March 2009, when recession discussions were highest, we found that sales actually declined by 2.3 percent.  From mid-March to early June, as recession chats dropped, we found that sales actually showed a modest increase,” continued Russo.  “This is an important dynamic as we look to signs of a sustained recovery, and Nielsen will be at the forefront of this research.”

Noteworthy Highlights

  • After showing some positive movement in April, U.S. consumers pulled back on shopping and how much they spent per trip. Meanwhile,


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Phil's Favorites

The world before this coronavirus and after cannot be the same

 

The world before this coronavirus and after cannot be the same

Gettyimages

Courtesy of Ian Goldin, University of Oxford and Robert Muggah, Pontifical Catholic University of Rio de Janeiro (PUC-Rio)

With COVID-19 infections now evident in 176 countries, the pandemic is the most significant threat to humanity since the second world war. Then, as now, confidence in international cooperation and institutions plumbed new lows.

While the...



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Zero Hedge

25-Year-Old California Man With No Underlying Conditions Dies Of COVID-19

Courtesy of ZeroHedge View original post here.

While coronavirus deaths have primarily been in those above 50-years-old, the disease has also been sending younger people to the ICU in larger than expected numbers - and in some cases, claiming younger victims.

In France, doctors have reported that 50% of ICU patients are under 60-years-old, while in the Netherlands, half are under 50.

Nearly 50% of c...



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Insider Scoop

'Psyched': Hawaii Considers Resolution For Shrooms, Champignon Eyes Ketamine Products

Courtesy of Benzinga

Psyched is a bi-monthly column covering the most important developments in the industry of medicinal psychedelics. We hope you follow us periodically as we report on the growth of this exciting new industry.

Champignon Brands Buys IP Company and Adds Ketamine and New Formulations To Its Portfolio

On March 19, Champignon Brands Inc. (CSE: SHRM) (OTC: SHRMF), a Canadian healt...



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The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



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Kimble Charting Solutions

Broadest Of All Stock Indices Testing Critical Support, Says Joe Friday!

Courtesy of Chris Kimble

One of the broadest indices in the states remains in a long-term bullish trend, where a critical support test is in play.

The chart looks at the Wilshire 5000 on a monthly basis over the past 35-years.

The index has spent the majority of the past three decades inside of rising channel (1). It hit the top of this multi-decade channel to start off the year, where it created a monthly bearish reversal pattern.

Weakness the past 2-months has the index testing rising support and the December 2018 lows at (2).

Joe...



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Biotech/COVID-19

Coronavirus treatments and vaccines - research on 3 types of antivirals and 10 different vaccines is being fast-tracked

 

Coronavirus treatments and vaccines – research on 3 types of antivirals and 10 different vaccines is being fast-tracked

Scientific research on the novel coronavirus has progressed at unprecedented speed. Mongkolchon Akesin / Shutterstock

Courtesy of Ignacio López-Goñi, Universidad de Navarra

Just three months after China first notified the World Health Organization about a deadly new coronavirus, studies of numerous antiviral t...



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Chart School

Cycle Trading - Funny when it comes due

Courtesy of Read the Ticker

Non believers of cycles become fast believers when the heat of the moment is upon them.

Just has we have birthdays, so does the market, regular cycles of time and price. The market news of the cycle turn may change each time, but the time is regular. Markets are not a random walk.


Success comes from strategy and the execution of a plan.















Changes in the world is the source of all market moves, to catch an...

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Digital Currencies

Bitcoin Tested As A Safe Haven After Biggest Stock Crash Since 2009

Courtesy of ZeroHedge View original post here.

Authored by Horus Hughes via CoinTelegraph.com,

Gold and Bitcoin react to global panic

Amid all of yesterday's chaos in bond, commodity, and stock markets, with the yield on the 10-year US Treasury note dropping below 0.5% for the first time in history - a strong indicator that investors are desperately looking for safe harbors - two supposed safe-havens in 'alternative currencies' behaved qui...



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Members' Corner

Bloody Mob Sh*t: An Interview with Lincoln's Bible

 

Bloody Mob Sh*t: An Interview with Lincoln's Bible

We talk Trump, Mogilevich, Epstein, Giuliani, Fred Trump, Roy Cohn, and more.

Courtesy of Greg Olear at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

(Originally published on Feb. 21, 20.)

...

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ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

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TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.