Posts Tagged ‘stimulus package’

Canaries in Coalmine: China, Asia, not Participating in Euro Bailout Lovefest; Beginnings of China Credit, Real Estate Bust

Canaries in Coalmine: China, Asia, not Participating in Euro Bailout Lovefest; Beginnings of China Credit, Real Estate Bust

Courtesy of Mish 

Taxidermy canary under glass dome.

Is China a canary in the coalmine of an impending global slowdown, or is China simply overloved as a beacon of growth as it was in 2008? I think it’s both.

China’s property and infrastructure bubbles are massive; that is for certain. Moreover, China’s biggest export trading partner is Europe, just as Europe is headed for numerous austerity programs.

While it’s doubtful the European austerity programs bring deficits down to where they are supposed to be, those programs will for a while cause a decline in European spending along with much social unrest.

Can China take a double whammy like this without overheating? I think not. And China will have to show things down, whether it wants to or not.

China Overheating, Tightening Coming

Please consider Hong Kong Stocks Fall as China Prices Prompt Tightening Concern

Hong Kong stocks fell as rising consumer inflation and housing prices in China stoked concern the country will act further to rein in its economy. The city’s developers pared losses after a government land sale.

“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”

“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”

“Price pressures have been building throughout the economy, strengthening the case for higher interest rates and a stronger yuan,” said Brian Jackson, a Hong Kong-based strategist at Royal Bank of Canada. “China is at risk of overheating, with spot fires breaking out in various parts of the economy.”

Chinese policy makers should focus on preventing excessive gains in asset prices and liquidity as Europe’s rescue package makes another global slump less likely, central bank adviser Li Daokui said in an interview yesterday. The increase in property prices across


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Obama, politics and lies

The disappointment with Obama is reaching new heights.  He ran for office making certain representations to the American people; and he proceeds to ignore his own pre-election promises, as if they were meaningless.  Here’s a video showing the eight times Obama said health care negotiations would be televised on C-SPAN.  Below is an assessment by Timothy D. Naegele (the interview here) of Obama’s performance thus far. - Ilene  

The C-SPAN Lie? See Eight Clips of Obama Promising Televised Healthcare Negotiations

Via Breitbart

Barack Obama: America’s Second Emperor?

Timothy D. Naegele By Timothy D. Naegele[1]

Just days after announcing the surge of 30,000 more U.S. troops in his Afghan war, Barack Obama was in Oslo to accept the Nobel Peace Prize that was announced shortly after he became president—before he had done anything.  Next, he was in Copenhagen accepting a deal without any teeth to address “global warming,” in the midst of a blizzard that dumped snow on the Danish capital, suggesting to most people that the issue is a “hoax.”

Straddling his back-to-back trips to Europe, he was in Washington, D.C.—where he was met by a blizzard on his return from Denmark—pushing for the enactment of ObamaCare that Americans oppose[2].  The legislation is so reckless that it had to be rammed through the U.S. Senate on a partisan vote.  Also, the Democrats’ leadership hid the exact nature of the health care bill from senators, who surely had a right to know what they were voting for.

Then the president jetted off to spend the holidays in Hawaii[3], having irresponsibly saddled the people with ObamaCare—after the legislation clears a joint Senate-House conference committee and he signs some version of it into law—which is reprehensible, certainly with respect to its impact on Medicare patients[4].  His recent travels alone create a carbon footprint globally that boggles the mind, especially when so many Americans are suffering from an economic meltdown that shows few real signs of abating.  Indeed, 49 States have lost jobs since his so-called “Stimulus Package” was enacted.[5]

His popularity poll numbers have been plummeting[6], but he is seemingly oblivious to the will of the people and determined to remake the United States and the world in his own image.  Never mind that his life was shaped by years growing up in Hawaii and Indonesia, he


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THE IMF CATAPULTS FROM SHUNNED AGENCY TO GLOBAL CENTRAL BANK

THE IMF CATAPULTS FROM SHUNNED AGENCY TO GLOBAL CENTRAL BANK

“A year ago,” said law professor Ross Buckley on Australia’s ABC News last week, “nobody wanted to know the International Monetary Fund. Now it’s the organiser for the international stimulus package which has been sold as a stimulus package for poor countries.”

The IMF may have catapulted to a more exalted status than that. According to Jim Rickards, director of market intelligence for scientific consulting firm Omnis, the unannounced purpose of last week’s G20 Summit in Pittsburgh was that “the IMF is being anointed as the global central bank.” In a CNBC interview on September 25, Rickards said, “They’ve issued debt for the first time in history. They’re issuing SDRs. The last SDRs came out around 1980 or ’81, $30 billion. Now they’re issuing $300 billion. When I say issuing, it’s printing money; there’s nothing behind these SDRs.”

G20SDRs, or Special Drawing Rights, are a synthetic currency originally created by the IMF to replace gold and silver in large international transactions. But they have been little used until now. Why does the world suddenly need a new global fiat currency and global central bank? Rickards says it because of “Triffin’s Dilemma,” a problem first noted by economist Robert Triffin in the 1960s. When the world went off the gold standard, a reserve currency had to be provided by some large-currency country to service global trade. But leaving its currency out there for international purposes meant that the country would have to continually run large deficits, and that meant it would eventually go broke. The U.S. has fueled the world economy for the last 50 years, but now it is going broke. The U.S. can settle its debts and get its own house in order, but that would cause world trade to contract. A substitute global reserve currency is needed to fuel the global economy while the U.S. solves its debt problems, and that new currency is to be the IMF’s SDRs. 

That’s the solution to Triffin’s dilemma, says Rickards, but it leaves the U.S. in a vulnerable position. If we face a war or other global catastrophe, we no longer have the privilege of printing money. The dollar becomes just another currency. To avoid…
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Stephen Roach sees a W-shaped recovery for China

Stephen Roach sees a W-shaped recovery for China

Shanghai streetCourtesy of Edward Harrison at Credit Writedowns

The US is not the only place where a double dip downturn is to be feared.  China has its own economic imbalances to deal with.  Too much money is being thrown at the problem creating malinvestment and a bubble economy, shares having doubled this year alone.

Stephen Roach thinks much of the stimulus money in China has been wasted, potentially requiring a second stimulus package.

‘The impact of the investment-led stimulus will fade and the Chinese growth rate will start to slip again some time towards the middle of 2010,’ Roach said, suggesting that slowing growth could lead to increased layoffs and thus social instability.

‘That means, the Chinese authorities will be forced to contemplate another proactive fiscal stimulus.’

In May, Roach had said China may face a ‘W’-shaped economic recovery and had previously said that China’s current stimulus is directed too much at the pace of growth rather than the quality of the growth.

The former global chief economist for the U.S. investment bank also reiterated his concerns about excessive investments in infrastructure, rather than on stimulating private consumption or bolstering health care or social safety nets for Chinese.

‘Bottom line is they are creating a very unbalanced macroeconomic structure,’ Roach said in the interview, estimating that investment spending in the first half of the year as a share of gross domestic product had exceeded 45 percent of the economy.

‘This is a ratio unheard of in the annals of a modern, large developing economy,’ he said.

These are much the same complaints that can be levelled against US policy makers.  However, the scale of the endeavour in China is truly breathtaking.  And while the growth potential in China is still very strong, the economy has a number of significant problems with which to deal, unemployment being one.  Another mentioned by Roach is the need for the Chinese to save huge sums in order to meet health care costs and to insure against economic misfortune because of the porous social safety net.

Were the government to put more emphasis on increasing economic security, many Chinese would feel more comfortable spending and the economy would be able to wean itself from its reliance on exports.  However, to date, infrastructure has been the name of the game…
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Frauds, Old and New

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Frauds, Old and New

Courtesy of Michael Panzner at Financial Armageddon

Newfound transparency in the wake of the unfolding financial crisis will expose a scale of prior fraud, corruption, and self-dealing that many will find almost impossible to comprehend. Day in and day out, reports will surface about hidden losses, false accounting, inflated appraisals, sizable off-balance-sheet obligations, valuation discrepancies, unregulated offshore entities, phantom profits, insider trading, and businesses bled dry to enrich a few individuals at the expense of employees, investors, bankers, and bondholders. Other revelations will reinforce the idea that companies, governments, and individuals are in far worse shape than people had assumed only a few years earlier.
-- Financial Armageddon

financial fraudWhen I wrote those words three years ago, I didn’t have any specific knowledge about Bernie Madoff’s massive fraud or the alleged house of cards put together by Allen Standford. But it didn’t matter. History and the extraordinary excesses of the go-go years meant such scams were bound to be out there, just waiting to be uncovered. In "Economic Downturn Accelerates Collapse of Ponzi Schemes," the Washington Post reveals the breathtaking extent to which one type of crime managed to worm its way into the economic landscape.

The great recession has decimated many industries; home builders, automakers and bankers are obvious casualties.

Now, add Ponzi schemers to the list.

Ravaged by the same fiscal turbulence pounding the nation’s legitimate businesses, Ponzi operations have been collapsing at a record clip, exposing prolific, rampant and colossal frauds that have bilked investors of billions of dollars.

The FBI, which is handling about 20 such cases in the Washington region, has almost 500 open Ponzi investigations nationwide — up from about 300 in 2006, bureau officials said. Law enforcement officials with other agencies have noticed similar trends, and authorities said they expect to turn up many more cases in coming months.

Poniz Scheme"We have more open Ponzi scheme cases than at any time in FBI history," said Special Agent David G. Nanz, chief of the FBI’s economic crimes unit. "We anticipated a spike, but the numbers we are seeing are even greater than expected. . . . There is an old saying, though: ‘When the tide goes out, you can see


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Phil's Favorites

USMCA: The 3 most important changes in the new NAFTA and why they matter

 

USMCA: The 3 most important changes in the new NAFTA and why they matter

Pena Nieto, Trump and Trudeau signed the USCMA in November 2018. AP Photo/Pablo Martinez Monsivais

Courtesy of Amanda M. Countryman, Colorado State University

President Donald Trump and Democratic leaders agreed on a deal to pass a new trade agreement between the U.S., Mexico and Canada that will update NAFTA.

Passing the new trade accord, known as the U.S.-Mexico-Canada Agreement, would be a substantial win for both Trump – given it’s one o...



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Kimble Charting Solutions

Is Freeport McMoRan (FCX) Making A Run For the "Gold"?

Courtesy of Chris Kimble

Mining company Freeport McMoRan NYSE: FCX is enjoying the tailwind from a strong year for gold and silver prices. And although Copper prices are down, Copper has been turning up lately.

This has helped Freeport’s stock price recover in 2019 and has FCX testing a key breakout level.

Below is a “weekly” chart of Freeport McMoRan (FCX). The shaded channel outlined by each (1) highlights the longer-term downtrend that FCX has been stuck in.

But this could change on a dime, especially if FCX can breakout above (2). This area represents its re...



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Zero Hedge

Aramco Stock Soars Limit Up In Debut After Saudis Force Locals To Buy

Courtesy of ZeroHedge View original post here.

Is Jamie Dimon about to get the old bonesaw for leaving $180BN on the table?

Saudi Arabia's oil company Aramco soared 10% limit up on its first day of trading, reaching a valuation of $1.88 trillion, higher than any other publicly traded company in the world. This means that after pricing its IPO at $1.7 trillion, Jamie Dimon left about $180 billion on the table, which will hardly impress the Crown Prince.

The record valuation reflects an oversubscribed book o...



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Insider Scoop

Economic Data Scheduled For Wednesday

Courtesy of Benzinga

  • The MBA's index of mortgage application activity for the latest week is schedule for release at 7:00 a.m. ET.
  • The Consumer Price Index for November will be released at 8:30 a.m. ET.
  • The Census Bureau quarterly services survey report for the third quarter is schedule for release at 10:00 a.m. ET.
  • The Atlanta Fed's Business Inflation Expectations survey report for December will be released at 10:00 a.m. ET.
  • The Energy Information Administration’s weekly report on petroleum inventories in the U.S. is schedule for release at 10:30 a.m. ET.
  • The Federal Open Market Committee will announce its policy decision at 2:00 p.m. ET.
  • The U.S. Treasury budget report for November will be released at 2:00 p.m. ET.
  • ...


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Digital Currencies

The Road To Retirement: Millennials Put Their Faith In Bitcoin But Goldman Says Go With Gold

Courtesy of ZeroHedge View original post here.

"Drop Gold" - the ever-present tagline of Grayscale's Bitcoin Trust TV commercial - appears to be working its magic on a certain cohort of society.

2019 has seen assets under management in GBTC soar...

Source: Bloomberg

And for Millennials, according to the lates...



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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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