Jan 012019
 
 January 1, 2019  Posted by at 10:58 am Finance Tagged with: , , , , , , , , , , , ,


Alfred Sisley Snow at Louveciennes 1878

 

Looking Forward To Dow 11,000 (Bear’s Lair)
US Stocks Post Worst Year In A Decade, S&P Falls More Than 6% In 2018 (CNBC)
European Stocks End 2018 With Deep Losses; Worst Year In A Decade (CNBC)
FTSE 100 Tumbles By 12.5% In 2018 – Its Biggest Fall In A Decade (G.)
Chinese Markets’ 2018 Performance Was Their Worst In A Decade (CNBC)
China December Manufacturing Activity Contracts Even More Than Expected (CNBC)
Lessons From Two Decades Of The Euro (Ind.)
The Delusional Leaders of the Eurozone (Steve Keen)
‘Nostradamus’ Macron Mercilessly Mocked On Twitter (RT)
France Starts Taxing Google, Apple, Facebook, and Amazon (RT)
Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT)
“I See No Way Out”: Countless Americans Still Living Paycheck To Paycheck (ZH)
Putin Says Still ‘Open To Dialogue’ With US (AFP)
Giuliani Says Assange Should Not Be Prosecuted (Lauria)

 

 

Happy New Year, everyone!

Be sure to stay with the Automatic Earth in 2019 to keep up with the biggest possible picture. And do consider sponsoring us.

Here’s a good way to start the new year. Martin Hutchison explains the many advantages of a 50% drop in the Dow. A functioning economy for one.

The Dow’s at 23,000 right now.

Looking Forward To Dow 11,000 (Bear’s Lair)

[..] owing to decades of funny money the market has got far ahead of its equilibrium value, which is now around 11,000 on the Dow, half the present level. It is worth examining what a world with Dow 11,000 will look like. Dow 11,000 isn’t just a random number. The Fed changed monetary policy definitively at its meeting in February 1995, and on the same day, the Dow Jones Industrial Index broke through 4,000 for the first time — with the Fed changing its policy decisively to an easier trend, it was natural for the market to rise. Since stock prices should rise approximately in line with the economy’s expansion, that Dow 4,000 is equivalent to Dow 11,000 today, taking account the rise of around 175% in nominal GDP between the first quarter of 1995 and today.

So, if the Dow were around 11,000 today, it would be at the same relative valuation as it was in February 1995. That was not an ultra-low level; the Dow was almost 50% above its peak of October 1987 and after all, that day in February 1995 was the first time the Dow had ever reached the exalted level of 4,000. The world of Dow 11,000, after the next bear market and perhaps partial recovery, will have quite a lot of our current economic landscape missing. Far too many Fortune 500 companies have overindulged in stock buybacks, leaving them in some cases with no equity at all. As the stock market decline continues, many of those companies will be forced to recapitalize themselves, generally at share prices far below where they bought back shares.

For some of them, this emergency recapitalization will prove to be insufficient, and a second recapitalization will prove unavailable in the market. At that point, those companies will be forced to file for bankruptcy. The chances are, the victims will include some very large names indeed. [..] in our Dow 11,000 world it would no longer be attractive for companies to repurchase their shares in large volumes – the cost of debt and equity capital would be too great to be balanced by the modest short-term earnings boost from doing so. [..] A further consequence of our new Dow 11,000 world will be a re-balancing of the wealth distribution. Asset prices would be much lower, capital scarcer and borrowing more expensive, so there will be far fewer billionaires and the explosion in earnings of the Top 0.01% will reverse.

Read more …

A series of headlines depicts how many stats are at their owrst in 10 years.

US Stocks Post Worst Year In A Decade, S&P Falls More Than 6% In 2018 (CNBC)

Wall Street concluded a tumultuous 2018 on Monday as the major stock indexes posted their worst yearly performances since the financial crisis. After solid gains on Monday, the S&P 500 and Dow Jones Industrial Average were down 6.2% and 5.6%, respectively, for 2018. Both indexes logged in their biggest annual losses since 2008, when they plunged 38.5% and 33.8%, respectively. The Nasdaq Composite lost 3.9% in 2018, its worst year in a decade, when it dropped 40%. The S&P 500 and Dow fell for the first time in three years, while the Nasdaq snapped a six-year winning streak. 2018 was a year fraught with volatility, characterized by record highs and sharp reversals.

This year also marks the first time ever the S&P 500 posts a decline after rising in the first three quarters. For the quarter, the S&P 500 and Nasdaq plunged 13.97% and 17.5%, respectively, their worst quarterly performances since the fourth quarter of 2008. The Dow notched its worst period since the first quarter of 2009, falling nearly 12%. A sizable chunk of this quarter’s losses came during a violent December. The indexes all dropped at least 8.7% for the month. The Dow and S&P 500 also recorded their worst December performance since 1931 and their biggest monthly loss since February 2009.

Read more …

US, EU, where did all that virtual wealth vanish into?

European Stocks End 2018 With Deep Losses; Worst Year In A Decade (CNBC)

European stocks closed higher on the final day of 2018 but marked the year as its worst in a decade. The pan-European Stoxx 600 closed 0.38% higher. The FTSE 100 closed trading on the final day of the year, down 0.2%. The French CAC, meanwhile, closed more than 1% higher. U.K.’s FTSE index is down more than 12% since the start of the year and has suffered its biggest one-year fall since the financial crisis in 2008 as investors digest uncertainty surrounding the country’s exit from the European Union. The pan-European Stoxx 600 has ended the year down 13% – its worst since the financial crisis. The DAX, has followed a similar trajectory, down more than 18% since the start of the year.

Read more …

Not much of the FTSE losses can be Brexit-related, it’s very much in line with everyone else.

FTSE 100 Tumbles By 12.5% In 2018 – Its Biggest Fall In A Decade (G.)

Britain’s leading stock market index has suffered its worst year in a decade as economic worries, Brexit uncertainty and the trade war between the US and China all spooked investors. The FTSE 100 tumbled by 12.5% during 2018, its biggest annual decline since 2008, wiping out more than £240bn of shareholder value. The blue-chip index of top UK shares ended the year at 6,728 points, down from 7,687 on the last trading day of 2017. The sell-off has inflicted significant losses on pension funds, major fund managers and small investors alike.

[..] Some investors are deeply concerned that the US economy could be slowing, even as the country’s central bank raises interest rates despite protests from Donald Trump. “Markets are torn between recession fears and the hope that it is just another false alarm,” said Holger Schmieding of the German bank Berenberg. “As the saying goes, financial markets tend to predict nine out of five recessions. For economists, it is probably the other way around, though. Economic fundamentals remain mostly positive. What we may have to fear for 2019 is fear itself and the risk of extraordinary political stupidity well beyond the usual mishaps of life.”

Read more …

China’s numbers are even worse than the rest.

Chinese Markets’ 2018 Performance Was Their Worst In A Decade (CNBC)

This year has not been a great one for Chinese stocks. In fact, it’s been the worst in a decade. The Shanghai composite, the mainland’s major share average, ended the trading year at 2,493.90 — that was approximately 24.6% lower than its final close of 2017. All 10 sectors of the index were down significantly in the year, with information technology being the worst performer as it fell 34%, according to Chinese financial services firm Wind Information. Even the best performing sector, utilities, dropped 11%. That puts the Shanghai composite’s performance at its worst since 2008, the year of the global financial crisis, when it plunged more than 65%.

Those dramatic losses were also seen elsewhere in China, with the Shenzhen composite plummeting about 33.25% and the Shenzhen component plunging around 34.44% in 2018 as compared to their last close of 2017. The Shenzhen component’s performance was also its worst since 2008, when it dove 63%, according to Wind Information. As shares on the mainland were pummeled, Hong Kong stocks performed a bit better. The Hang Seng index notched a decline of only 13.61% for 2018.

Read more …

The question becomes whether China can lead everybody down.

China December Manufacturing Activity Contracts Even More Than Expected (CNBC)

Activity in China’s manufacturing sector contracted for the first time in more than two years in the month of December amid a domestic economic slowdown and Beijing’s ongoing trade dispute with the U.S. The Chinese National Bureau of Statistics said on Monday official manufacturing Purchasing Managers’ Index (PMI) was 49.4 — lower than the 49.9 analysts expected in a Reuters poll. The December reading was the weakest since February 2016, according to Reuters’ record. That was worse than November’s official manufacturing PMI, which was 50.0. A reading above 50 indicates expansion, while a reading below that signals contraction. In particular, new export orders contracted for a seventh straight month, with that measure falling to 46.6 from 47.0 in the previous month.

Meanwhile, China’s official non-manufacturing PMI came in at 53.8, which was higher than the reading of 53.4 in November. The services sector accounts for more than half of the Chinese economy and the “bright spot” of the improved on-month expansion in December points to a rebalancing of the Chinese economy toward more consumption, Nomura economists wrote in a note on Monday. [..] Even before the escalation in trade tensions with the U.S. this year, Beijing was already trying to manage a slowdown in its economy after three decades of breakneck growth. China’s worse-than-expected PMI reading on the last day of 2018 suggests a challenging start to 2019, said Frederic Neumann, co-head of Asian Economics Research at HSBC.

“China is a good gauge in terms of temperature about what’s going on in the global industrial cycle,” Neumann told CNBC’s “Squawk Box.” The “PMI numbers out today suggest the economy is still decelerating. That’s going to weigh down not just Chinese GDP growth but really global trade,” Neumann said. In fact, Nomura economists warned that “the worst is yet to come,” for China. “Looking ahead, we see more headwinds to growth from weakening domestic demand, the ongoing credit downcycle, a cooling property sector and lingering China-U.S. trade tensions,” the economists wrote.

Read more …

Watch the European elections in May. They will be like an earthquake.

Lessons From Two Decades Of The Euro (Ind.)

Twenty years ago an “accounting currency” was born. This was the single currency of what became known as the “eurozone”: the euro. Now this wasn’t the notes and coins that most of us associate with the euro. Those were only introduced three years later in January 2002. That was the moment when the single currency became tangible in the lives of hundreds of millions of people across Europe, and the old deutschmarks, guilders, francs, lira, pesetas and all the ancient constituents of the European monetary mosaic were consigned to history. What happened on 1 January 1999 was the creation of a rigidly fixed exchange rate and interest rate regime for all those national currencies, so they could all be valued in a common unit.

The euro was not yet tangible, but it existed in the ether and in the foreign exchange markets. It has been a turbulent two decades for the single currency since that launch. [..] many economists would snort at the very idea of the euro being a success. Since 2000 eurozone GDP growth per capita measured (at purchasing power parity) has underperformed that of the US and the UK, growing by 15% versus 19% and 20% respectively. Yet that’s less important than the fact that the single currency was in the throes of existential crisis between 2010 and 2015, when it looked like the eurozone was about to disintegrate as nations such as Greece, Italy, Ireland and Portugal came under unbearable pressure in the bond markets.

[Some] argue that the single currency has been unjustly scapegoated for failures of national governments, especially Italy, to reform their labour markets and wider domestic economies. This, they contend, is the reason, not the euro, that such a gulf has opened up between the economic performance of the strong economies such as Germany and the Netherlands and those such as Greece and Italy. Unemployment rates in the former countries are at record lows, while in the latter group they have still not recovered their pre-recession rates. But pessimists say that this ignores the extent to which the structure of the single currency facilitated destabilising investment booms in the peripheral states before the 2008 financial crisis and then prevented an appropriate monetary adjustment in its wake. Their view is that such are the structural contradictions within the single currency that the existential crisis is destined to re-emerge at some point – and it may not take 20 years.

Read more …

The Yellow Vests may well be the no. 1 political force across Europe for the May European elections.

The Delusional Leaders of the Eurozone (Steve Keen)

I had forgotten that this was the 20th anniversary of the start of the Euro. But the Eurocrats in Brussels hadn’t. Some hours before the New Year commenced, Juncker and friends put out a press release extoling the virtues of the Euro. Virtues such as “unity, sovereignty, and stability … prosperity”. Well so much for New Year cheer. With this one tweet, the EU put 2019 on track to be even worse than 2018. Using any of those words to describe the Euro—apart perhaps from “unity”, since the same currency is used across most of continental Europe now—is a travesty of fact that even Donald Trump might baulk at.

Sovereignty? Tell that to the Greeks, Italians or French, who have had their national economic policies overridden by Brussels. Stability? Economic growth has been far more unstable under the Euro than before it, and Europe today is riven with political instability which can be directly traced to the straitjacket the Euro and the Maastricht Treaty imposed. Prosperity? Let’s bring some facts into Juncker’s fact-free guff. I’ll start with Phil’s point about Greece. Greece’s GDP has fallen at Great Depression rates since the Eurozone imposed its austerity policies on it, and nominal GDP today is more than 25% below its peak.

Now of course that could be blamed on the Greeks themselves, so let’s look compare economic growth in the entire Eurozone to the USA (minus Ireland and Luxembourg, since in the former case their data is massively distorted by data revisions, and the latter has highly volatile data as well, and is so small—under 600,000 people—that it can safely be ignored).


Figure 2: Real economic growth rates

[ ..] the real comparison is with growth since the crisis. The USA’s average post-crisis growth rate has been anaemic at 1.4%, but this is positively dynamic in comparison to the entire Eurozone’s average post-crisis growth rate of 0.2%. Europe has basically been stagnant for a decade, thanks to the Euro and the austerity policies that are inseparable from it, courtesy of the Maastricht Treaty that Juncker is so proud to have signed. In reality, the Euro has brought low growth, economic instability, and political discord to Europe. Yet Europe’s unaccountable leaders spin it as an unbridled positive, at a time when ordinary citizens of Europe are donning Yellow Vests and bemoaning their plight.

Read more …

18% support. 82% not support.

‘Nostradamus’ Macron Mercilessly Mocked On Twitter (RT)

Looking back at 2018 and the French president’s vows to unite the nation, disappointed twitteratti noted the situation in the country, divided by the Benalla affair and the Yellow Vests riots, is not so rainbow-bright after all. “In my view, 2018 will be the year of national cohesion,” the centrist Macron ambitiously wrote in his New Year’s Eve message a year ago. That prediction hasn’t aged well, and Twitter noticed. We saw that [cohesion] with the Benalla affair and Yellow Vests,” one user noted, adding that “words are no longer enough to conceal poor management of the country and decisions that go against the interests of [French] people.” “What clairvoyance”,”#nostradamus”, the sarcastic comments went on.

And, if 2018 was thought to be the year of unity, many people got worried about imminent 2019. “And after the cohesion of the nation, what would you call Year 2019?” Others said that Macron was right, and there was “cohesion” in the country – against his government, that is. France has never been as fractured as it was in 2018, one more person noted, adding that the president probably divided the nation “to better reign” over it.

“King for the Rich,” “King of bling-bling”, “President of the Wealthy”, “Jupiter” – these are a few nicknames given to Macron both by fellow politicians and by ordinary folk online. Even his New Year’s trip to the posh resort of Saint-Tropez on the eve of planned Yellow Vests rallies came in for harsh criticism. “Saint-Tropez is the bling-bling symbol of France, it [embodies] success, the absence of problems,” Benjamin Cauchy, one of the Yellow Vests’ leaders, said, pointing out that it’s not as sunny in the rest of the protest-plagued country as in the French Riviera.

Read more …

Wonder how they arrive at their rates. And to what extent they’re bound to them if the EU decides to raise higher ones.

France Starts Taxing Google, Apple, Facebook, and Amazon (RT)

Tech giants will now pay more tax in France, after the country decided not to wait for the rest of the EU to introduce the measure. The so-called GAFA tax targeting major digital firms comes into force on January 1. The French government hopes to raise €500 million ($572 million) with levies specifically aimed at multinational tech firms, including Google, Apple, Facebook, and Amazon, Finance Minister Bruno Le Maire said, announcing the move in December. He stressed that “the tax will be introduced whatever happens.” Paris has been pushing for what it sees as fairer taxation of the big-tech firms in the European Union. Progress on the issue has stalled in Brussels, as the 28-member bloc is divided on imposing the levies on Silicon Valley giants.

Any changes must receive unanimous approval by member states. Critics say that the big-tech firms are making money from European countries’ economies, but use their complex structure to route some of their profits to low-tax member states. The opposing block is led by Ireland, which has become a sort of Mecca for US tech companies, and hosts many of their headquarters. Estonia and Sweden are also among those who do not favor France’s bid, fearing that the taxes could trigger US retaliation. The EU has been discussing plans for a three-percent tax on the revenues of large internet companies that make money from user data or digital advertising. However, the last round of talks on the matter in November resulted in no significant progress, apparently pushing France to move forward with it alone.

Read more …

Always interesting numbers, but says not a word about why sanctions are impossible.

Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT)

The country with the largest mineral reserves in the world, Russia, is the second top exporter of rare earth minerals. Its natural resources are estimated at tens of trillions of dollars. It has abundant supplies of oil, natural gas, timber and valuable minerals, such as copper, diamonds, lead, zinc, bauxite, nickel, tin, mercury, gold and silver. Most of those resources are located in Siberia and the Far East. Russia’s mining industry, which is the country’s second largest after oil and gas, accounts for a significant share of its GDP and exports. The country is among the top three producers of mineral commodities such as platinum, gold and iron ore. It is also the world’s largest producer of diamonds and palladium.

The Ural Mountains have vast amounts of minerals while most deposits of coal, oil, gas and timber are located in Siberia. Russia is the world’s fifth largest producer of coal, with reserves of about 175 billion tons. Most of those mines are in Siberia and the Urals. The timber industry, which is worth about $20 billion annually, is also a significant economic contributor to the Russian economy. The country’s fishing industry is the fourth largest in the world. The value of Russia’s resources is huge and, according to statistics, is estimated at $75 trillion. In comparison, the US natural resources are worth approximately $45 trillion while China’s stand at $23 trillion.

Read more …

The entire political system guarantees this will get worse in 2019.

“I See No Way Out”: Countless Americans Still Living Paycheck To Paycheck (ZH)

A recent Philly.com article noted that, despite the supposed economic “boom”, professionals like real estate agents, farmers, business executives and even computer programmers are all still living paycheck to paycheck. Responding to a Washington Post inquiry on Twitter, millennials, Generation Xers and baby boomers that work in a range of geographic areas claim that they have simply been unable to save as rent, childcare and student loans have all gotten in the way. Americans living paycheck to paycheck were highlighted in a recent report from the Federal Reserve that showed four in ten adults say they couldn’t produce $400 in an emergency without going into debt or selling something. And now a partial government shutdown that is seeing nearly 800,000 federal workers not getting paid has fueled the discussion on Twitter about how brief income lapses can be disastrous for some households.

Another Twitter user wrote: “Broke my lease to accept new fed job for which I have to attend 7 months of training in another state. Training canceled with shutdown. Homeless. Can’t afford short(?)-term housing/have to work full-time for no pay/returning Christmas presents.” Those involved in the conversation on Twitter have been using the hashtag #ShutdownStories in response to Rep. Scott Perry of Pennsylvania, who asked reporters last week: “Who’s living that they’re not going to make it to the next paycheck?” Heidi Shierholz, a former chief economist at the Department of Labor, has the answer: “It’s astronomical what people need just to make it month to month. Given the high cost of transportation, housing, health care. … There is often no wriggle room.”

Read more …

Always.

Putin Says Still ‘Open To Dialogue’ With US (AFP)

Russian President Vladimir Putin has reassured his US counterpart Donald Trump that Moscow remains “open to dialogue” despite the year ending without the hoped-for warming of relations, the Kremlin said on Sunday. “Russian-US relations remain an important factor in order to guarantee strategic stability and international security,” the presidency said in a New Year statement. Putin “has confirmed that Russia is open to dialogue with the United States on the maximum number of subjects,” the statement added. In December 2017, Putin said he hoped to “normalise” relations with Donald Trump but the chances of that evaporated with multiple investigations of Moscow’s alleged meddling in US politics.

Washington this year dramatically announced its intention to pull out of a key Cold War-era nuclear weapons deal – the Intermediate-Range Nuclear Forces treaty – to which Putin responded that Moscow would develop new missiles. Putin also sent messages to other heads of state including Britain’s Theresa May and Turkish President Recep Tayyip Erdogan. In his message to May, Putin wished the British people “wellbeing and prosperity” in 2019.

Read more …

Now let’s hear Trump say it.

Giuliani Says Assange Should Not Be Prosecuted (Lauria)

Rudy Giuliani, a lawyer for President Donald Trump, said Monday that WikiLeaks publisher Julian Assange had done “nothing wrong” and should not go to jail for disseminating stolen information just as major media does. “Let’s take the Pentagon Papers,” Giuliani told Fox News. “The Pentagon Papers were stolen property, weren’t they? It was in The New York Times and The Washington Post. Nobody went to jail at The New York Times and The Washington Post.” Giuliani said there were “revelations during the Bush administration” such as Abu Ghraib. “All of that is stolen property taken from the government, it’s against the law. But once it gets to a media publication, they can publish it,” Giuliani said, “for the purpose of informing people.”

“You can’t put Assange in a different position,” he said. “He was a guy who communicated.” The U.S. government has admitted that it has indicted Assange for publishing classified information, but it is battling in court to keep the details of the indictment secret. As a lawyer and close advisor to Trump, Giuliani could have influence on the president’s and the Justice Department’s thinking on Assange. Giuliani said, “We may not like what [Assange] communicates, but he was a media facility. He was putting that information out,” he said. “Every newspaper and station grabbed it, and published it.” Giuliani also said there was no coordination between the Trump campaign and WikiLeaks. “I was with Donald Trump day in and day out during the last four months of the campaign,” he said.

“He was as surprised as I was about the WikiLeaks disclosures. Sometimes surprised to the extent of ‘Oh my god, did they really say that?’ We were wondering if it was true. They [the Clinton campaign] never denied it.” Giuliani said: “The thing that really got Hillary is not so much that it was revealed, but they were true. They actually had people as bad as that and she really was cheating on the debates. She really was getting from Donna Brazile the questions before hand. She really did completely screw Bernie Sanders.” “Every bit of that was true,” he went on. “Just like the Pentagon Papers put a different view on Vietnam, this put a different view on Hillary Clinton.”

Read more …

Home Forums Debt Rattle New Year’s Day 2019

This topic contains 5 replies, has 4 voices, and was last updated by  Doc Robinson 8 months, 3 weeks ago.

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  • #44635

    Alfred Sisley Snow at Louveciennes 1878   • Looking Forward To Dow 11,000 (Bear’s Lair) • US Stocks Post Worst Year In A Decade, S&P Falls More T
    [See the full post at: Debt Rattle New Year’s Day 2019]

    #44636

    V. Arnold
    Participant

    Alfred Sisley Snow at Louveciennes 1878
    That’s quite a painting; wonderful snow scene.
    Much else to digest; that’s quite a post Ilargi; much content…

    #44637

    Dr. D
    Participant

    Dow 11,000 sounds about right. Much as I criticize the United States, it’s not like we don’t have an economy, still have massive manufacturing in high-value added goods like medical equipment, or aren’t amazing in R&D. We also still do a lot internally, although relative to the past it doesn’t look like it. It’s probably also a line you could see on the charts, which generally means something. Will we get there, though? Anyone’s guess. This system is converting, and they’re trying to convert it systematically, but history is not fond of such attempts. Also markets overshoot, which they call “animal spirits” but is really a logical response to debt conditions.

    It is never sensible to rebuy your stock with debt, only with profit. With debt you are trading a security that’s flexible – floating new stock when you can – for a debt that’s entirely inflexible, and is almost the only means to be bankrupted. Now you MUST make X profit per month, whereas in a debt-free stock system, you only have the overhead of your capital stock. But we all know why this is done: to give 6-figure payouts to corporate stock options and raid/gut the company at the stockholder’s expense, the Mitt Romney bankruptcy plan that took Toys-R-Us, and featured in epic movie “Wall Street”. That’s why buying your own stock to pay your own stock options is fraud and was illegal until like 1989 – really you’re just embezzling the company assets in a more creative way.

    And 20%? Gosh these people are henny-pennies. The Dow rose from 16,000 to 22,000 since 2016. That’s stellar – what do they want? No retracements ever? Of course, because they care about HFT and market rigging if it drops 100 points, but not if it rises 6,000. If they hadn’t levered their leverage, they wouldn’t be in the jam. Too bad. Reminds me of Coolidge in 1921, who said of Wall Street, ‘They got themselves into this, they can get themselves out.” In 9 months, and no pig-trough to suck on, they cleared it out and moved on. Hoover/FDR put out the feed and 9 years later were worse than ever. They had to nuke a country to end it. Nice.

    “Not much of the FTSE losses can be Brexit-related, it’s very much in line with everyone else.”

    That is actually extremely interesting. Does that mean the market doesn’t believe it? That Europe is worse, or the same?

    “Some investors are deeply concerned that the US economy could be slowing, even as the country’s central bank raises interest rates”

    I don’t understand this quote. They make it sound like ‘since raising interest rates is always great for the economy, why are investors so concerned?’ when everything in history says the opposite. Raising rates (under the modern debt system) almost always crashes it. Is this a way to say The Donald is misguided in criticizing the Fed? A strange way to go about the whole question/implication/slander, but these are strange days. Words have meanings. Their only job on earth is using them. Please at least try to use them accurately.

    The construction of the accounting Euro is identical to the proposed SDR, and no doubt will work equally well – killing everyone. Nevertheless, when that’s the whole point, they will try it. Also, oddly, the Euro is relatively stable, gyrating around 1.0 so what’s the problem? P.S. is Greek unemployment dropping because they died in cold apartments, or because all the viable young workers emigrated? Such is Junker’s “prosperity” and wild success. …If they’re trying to get thrown out of office via the nearest window they’re doing a good job of it.

    Macron certainly inspired national cohesion: everybody against Macron. He’s the only guy who could get communists and fascists to stop fighting each other because they hate him more.

    “ Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT) “

    But somehow sanctions (low currency) brought down the Soviet Union in 1989? It’s not the resources, it’s the ability and the will, and they do have it, mostly.

    There are always outliers, but it’s hard to imagine trouble when federal employees are making 3x the rest of us, maybe 4-5x with benefits. What were you doing with our money? We’re living in cars, why not you too? And that is common in the U.S., even the “wealthy” (c. $100,000/yr) being more in debt than income, and having outsized expenses that are unnecessary. For why? Because cash pays negative inflation-adjusted, which is clearly why no one has money in the bank. If it made 8%, the money would be there, and you’d have “$400” for emergencies, plus interest. Thank the Bernank. It’s exactly what he said his plan was: financial repression over time, to soak the people to recapitalize the banks, and it’s worked, mostly: they’re rich, and two generations of Americans are poor, and dying by the 200,000’s. #Winning!

    #44638

    Dr. D,

    “Not much of the FTSE losses can be Brexit-related, it’s very much in line with everyone else.”

    That is actually extremely interesting. Does that mean the market doesn’t believe it? That Europe is worse, or the same?

    It is certainly interesting, Brexit doesn’t appear to be a factor at all. Or if it is, Britain’s economy would be the big shining king of the global hill without it. Doesn’t sound 100% right, does it?

    Some data from the articles: Dow, S&P down about 5-6% for the year, when in 2008 they lost 30-40%. Perspective. The FTSE 100 tumbled by 12.5% during 2018, The pan-European Stoxx 600 ended the year down 13%; The DAX down more than 18%. The Shanghai composite 24.6% lower; Shenzhen composite plummeting about 33.25%. Again, perspective.

    The UK numbers surprised me a bit, I must say. How much will the FTSE drop as March 29 draws closer, and/or the whole process fall apart? Keep a close watch (on this heart of mine).

    P.S. is Greek unemployment dropping because they died in cold apartments?

    Greek jobless numbers tumble for one reason only, same as it ever was, everywhere (US): a job is still counted as a job even if it pays a third of what it did before, or has a third of the hours, and none of the benefits. Any talk of recovery of the Greek economy violates basic mathematics. The only ‘positive’ thing is they sell everything not bolted down to the Chinese and Germans. It borders on sacrilege and insults our intelligence.

    “ Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT) “

    But somehow sanctions (low currency) brought down the Soviet Union in 1989? It’s not the resources, it’s the ability and the will, and they do have it, mostly.

    Russia is 1000 times better organized today than it was 30 years go. That’s why sanctions hardly work. That’s why there’s Russiagate in the west, and the Skripals. But the west missed its opportunity with Yeltsin, and it ain’t coming back anytime soon. Great history question: why did Yeltsin appoint Putin as sort of his goodbye gift, after selling out the country to oligarchs and Americans?

    #44639

    Doc Robinson
    Participant

    “Some data from the articles: Dow, S&P down about 5-6% for the year, when in 2008 they lost 30-40%. Perspective. The FTSE 100 tumbled by 12.5% during 2018, The pan-European Stoxx 600 ended the year down 13%..”

    Looking at the Q4 drops shows a somewhat different picture, with the American stock markets (S&P500, Nasdaq) falling more than the European (FTSE, STOXX).

    “US Stocks Post Worst Year In A Decade, S&P Falls More Than 6% In 2018 (CNBC)”

    Of course the sidebar for that CNBC article shows a trending article titled,
    “Why 2019 could be very good for stocks, after the worst year in a decade”
    with this quote from an equities strategist at a big bank:
    “Based on fundamentals, I don’t think the pullback we had in this market was ever justified. Markets will do what they’ll do. I think you have significant upside here. Therefore, we would think that the bottom has been put in this market.”

    #44640

    Doc Robinson
    Participant

    Another perspective…

    The US stock markets (S&P 500, Nasdaq) fell further this past quarter than the FTSE 100 or the pan-European Stoxx 600 fell during the entire past year (or any year this past decade)..

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