Home » Posts tagged 'michael shedlock'

Tag Archives: michael shedlock

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai III: Cataclysm
Click on image to purchase

Uncharted Territory, Spain to Take Over Catalonia Government: What’s the Libertarian Position? 

Madrid will suspend Catalonia autonomy on Saturday after Carles Puigdemont, the Catalan president, refused to back down from a declaration of independence. What happens next is unknown. Spain fears violence but it may force new regional elections nonetheless. This is uncharted territory.

The Spanish government is to suspend Catalonia’s autonomy and impose direct rule after the region’s president refused to abandon the push for independence that has led to Spain’s biggest political crisis for 40 years.The announcement of the unprecedented measure came after the Catalan president, Carles Puigdemont, threatened a unilateral declaration of independence if the Spanish government did not agree to talks on the issue.According to article 155, which has never been used, the Spanish government will need to lodge a formal complaint with Puigdemont, then submit its proposals to the senate for debate and approval. As a result, it will be at least a few days before concrete steps are taken.Tensions in the already fraught impasse rose further this week after a judge at Spain’s national court denied bail to two prominent Catalan independence leaders who are being investigated for alleged sedition.

Spain Moves to Suspend Autonomy

Spain is to start suspending Catalonia’s autonomy from Saturday, as the region’s leader threatens to declare independence. The government said ministers would meet to activate Article 155 of the constitution, allowing it to take over running of the region.Catalonia’s leader said the region’s parliament would vote on independence if Spain continued “repression”.Some fear the latest moves could spark further unrest after mass demonstrations before and since the ballot on 1 October. However, the central government wants to minimise the risk of large-scale demonstrations, our correspondent says.

…click on the above link to read the rest of the article…

Nonsensical Global Worries Over Subdued Inflation: Yellen, Draghi, Kuroda

Central bank presidents at the Fed, the ECB, and Bank of Japan are all concerned over low inflation. The Fed wants to hike anyway, but the Bank of Japan will keep pursuing aggressive monetary easing. Meanwhile, asset prices are in the biggest ever bubble.

Bank of Japan

Bank of Japan Governor, Haruhiko Kuroda, says the BOJ Will Keep Pursuing Aggressive Monetary Easing.

“The Bank of Japan will consistently pursue aggressive monetary easing with a view to achieving the price stability target at the earliest possible time,” Mr. Kuroda said at a meeting of the Group of 30 in Washington.

“Achieving the 2% target is still a long way off,” Mr. Kuroda said.

“Once price increases become widespread, medium- to long-term inflation expectations for firms and households are expected to rise gradually and actual inflation will increase toward 2%,” he said.

ECB

‘It’s going to take time. We have got to be persistent with our monetary policy,” Draghi said on the sidelines of the meetings of the International Monetary Fund and World Bank in Washington, reported The Wall Street Journal.

Draghi gave an upbeat outlook on the 19-nation eurozone economy, but said inflation remains too weak, possibly due to subpar wage growth, he said. The ECB’s program of buying 60 billion euros ($70.9 billion) of bonds a month is set to expire in December. Policy makers are expected at a meeting on Oct. 26 to announce plans to begin scaling down the monthly purchases next year, but Draghi suggested the decision could be delayed again, the report said.

Fed

…click on the above link to read the rest of the article…

King Dollar is Dead? Biggest Paradigm Shift in 100 Years: China and Electric Cars at Forefront 

Steen Jakobsen, Saxo Bank Chief Economist and CIO, says the biggest change in 100 years is underway. He points to events in China and with electrification of cars.

This is a guest post by Jakobsen.

Macro Digest: The 19th Party Conference – The biggest Paradigm shift in 100 years?

I think next week’s 19th China Communist Party’s Conference is the single biggest event this year – a confirmation a true paradigm shift

China leads world in credit creation, growth and now in most technology fields… My take remains that President Xi will focus on quality over quantity, that pollution reducing is the number one social issue and that The Party is taking more and more control. The net output will be:

  • Lower than expected growth next 18 month (while China converts economy from export engine to one of productivity gains – President Xi wants 2010 GDP per Capita doubled (Rule of 72= 72/7% GDP per year = 10 years) which means objective of 7% growth per year, but most of this will be productivity driven which means investment first (hence lower growth) then higher
  • Reduction of pollution = Electrification of cars – BDY says by 2030 100 pc of cars will be EV – this catapult China to leadership in battery, E-engines, and pollution reduction (Don’t forget that from 1900 to 1910/13 the US went from 100% horse carriages to 100% cars!)
  • High ratio of R&D and innovation to gain leadership China is already, but will be even more dominant in E-commerce, payments and Fintech. (See Mckinsey report below)
  • Slow gradual openness in capital account, more access to market for foreigners and BIG FOCUS on converting global trade from US$ to CNY [Yuan vs Dollar]
  • Weaker CNY post conference
  • Big negative credit & growth impact on rest of the world

…click on the above link to read the rest of the article…

Rajoy Boxed In With Losing Options: Catalonia Suspends Independence Declaration, Posts Guards at Parliament, Seeks Mediation

Rajoy Boxed In With Losing Options: Catalonia Suspends Independence Declaration, Posts Guards at Parliament, Seeks Mediation 

The Catalan parliament met Tuesday afternoon. Catalonia president Carles Puigdemont asked parliament to suspend the effects of Catalonia voting “yes” for independence to hold talks with Spain.

However, Puigdemont still maintains the legality of the October 1 referendum in Catalonia, stating Catalans had “won their right to become an independent country.”

For now, Puigdemont seeks dialogue with Madrid.

Catalonia Suspends Declaration of Independence

The Independent reports Catalonia Suspends Declaration of Independence From Spain

The Catalan government has said it is suspending its declaration of independence from Spain and wants to de-escalate the tension in the country.

Premier Carles Puigdemont made the announcement in a highly-anticipated speech to the regional parliament in Barcelona where he said he would seek to enter into negotiations with the Spanish government to move the case for independence forward.

The Catalan leader maintained the legality of the October 1 referendum in Catalonia, and said Catalans had “won their right to become an independent country” but said he will first seek to open a dialogue with Madrid.

CNBC reports Puigdemont Asks Parliament to Suspend Results of Independence Referendum.

Puigdemont said in a speech Tuesday the current relationship between Catalonia and Spain is unsustainable. He asked for parliament to suspend the effects of Catalonia voting “yes” for independence to hold talks with Spain.

Catalan police have been posted outside parliament in Barcelona, sealing off the grounds to the public.

Delay Move Expected

This move is exactly as many expected. A declaration of independence would have triggered article 155 with Spain sending in military police or army troops.

Last evening Eurointelligence commented:

…click on the above link to read the rest of the article…

Oil Back Below $50: End of Inflationary Jump?

Oil Back Below $50: End of Inflationary Jump? 

Crude oil is back below $50 and production is up. Hedge funds are reducing positions. Is this the end of an inflationary jump?

Crude Weekly Chart

Oil’s Stint Above $50 Ends

Bloomberg reports Oil’s Stint Above $50 Ends.

I do not know where Bloomberg got that caption from. Crude is not at its lowest price since December 20003. I show crude at $2605 in January of 2016.

I show crude at $26.05 in January of 2016.

Hedge Funds Pare Positions as Stockpiles Soar

It doesn’t help that U.S. crude stockpiles remain above their five-year average by more than 70 million barrels at a time when refineries are starting to shut for maintenance. Meanwhile, the top American shale plays, led by the Permian and Eagle Ford basins in Texas, are set to produce a record amount of crude this month.

Hedge funds reduced their WTI net-long position — the difference between bets on a price increase and wagers on a drop — 1 percent to 249,323 futures and options in the week ended Oct. 3, U.S. Commodity Futures Trading Commission data show.

As for Brent, the net-long position on the global benchmark declined 0.9 percent to 504,263 contracts, after reaching an all-time high the previous week, according to data from ICE Futures Europe.

“Oil’s had a heck of a run for the month of September,” Thummel said. “The continued concerns in the market that keeps the shorts active: Is OPEC compliance waning? Will their compliance start to be less? Will they start to cheat more?”

Crude Monthly Chart

CPI Energy

Year-over-year the CPI energy index is up nearly 12%. Although it’s October, the latest CPI is for August.

End of Inflationary Jump?

I don’t know if this is the end of the move over $50 or not, but fundamentals are poor just as hedge funds plowed into crude futures.

A move back towards $40 seems likely.

If so, inflation pressures may be peaking to the consternation of the Fed.

World’s Biggest Ever Junk Bond Bubble in Pictures: What Hath Draghi Wrought?

World’s Biggest Ever Junk Bond Bubble in Pictures: What Hath Draghi Wrought? 

In regards to ECB QE bond purchases, inquiring minds may be asking: What hath ECB president Mario Draghi wrought?

I can explain in one picture.

The answer in words: The world’s biggest junk bond bubble.

I prefer gold.

On August 4, I commented on the Bubblicious Debate: Greenspan Says “Bond Bubble About to Break”, No Stock Market Bubble

There’s a bond bubble for sure, but it’s in corporate bonds, not treasuries.

This also isn’t the first time Greenspan has expressed concern about a bond bubble. Two years ago, when the 10-year Treasury yield was 2.44% and the CPI was 0.2%, he told Bloomberg TV that “we have a pending bond market bubble.” In a Bloomberg TV interview July 2016, he expressed concerns about stagflation and said “we’re seeing the very early signs of inflation beginning to tick up.” He also said with the 10-year Treasury yield pushed down to 1.50% by Brexit concerns, that he was “nervous” bond prices were too high.

“No Irrational Exuberance in Stocks”

“There is no irrational exuberance that I can see. In fact, it is just the opposite at this stage.”

Greenspan the Contrarian Indicator

Major comments by Alan Greenspan, widely portrayed by the media are most likely perfect contrarian indicators.

He has been calling the bond market a bubble for years but only recently did he say there was no stock market bubble.

With Greenspan, one needs to be careful. He is frequently correct about some things. However, the things about which he is correct are either never widely published, or they are widely disputed.

…click on the above link to read the rest of the article…

Mariano Rajoy, You are a Disgrace to Spain and the World, Please Resign: Catalonia Has Spoken Loud and Clear

Mariano Rajoy, You are a Disgrace to Spain and the World, Please Resign: Catalonia Has Spoken Loud and Clear

Spanish prime minister Mariano Rajoy, the man who said there would not be a vote, now has to face the facts: 90% Voted for Independence.

📊 Resultats del Referèndum de


  • 90% of the 2.26 million Catalans who voted on Sunday voted in favour of independence, according to preliminary results released by the region’s government. The region has 5.3 million voters. Officials said 770,000 votes were lost due to disruption which resulted in polling stations being raided by Spanish police.
  • Carles Puigdemont, Catalan’s leader, announced in a televised statement that the region had earned the right to become an independent state and that results would be passed the region’s parliament in the coming days.

This video of Madrid thugs stomping on people attempting to vote is worth a replay


Catalonia says ‘Yes’ to independence from Spain with %90.09 of the vote. Around 80% of polling stations managed to stay open.


Dear PM Rajoy, Here are the Results

  • Despite the hundreds of thousands of police goons you sent in to stop the vote, a vote did indeed take place.
  • With 90% of the vote in, over 2,020,144 voted for independence.
  • Only 176,565, were against.
  • Your thugs seized another 770,000 ballots, the vast majority of which were undoubtedly in favor of independence.
  • 5.3 million were eligible to vote, and over 50% tried, despite your thug actions.

Dear PM Rajoy, Please Resign

Dear Rajoy, your career is over. Please resign before you are booted out.

But before you go, please take a look at For All the World to See: Police Brutality Videos and Images in Catalonia, then apologize.

Financial Hell: 57% in Australia Cannot Afford An Extra $100 if Interest Rates Rise, Stress in Wealthiest Areas

Financial Hell: 57% in Australia Cannot Afford An Extra $100 if Interest Rates Rise, Stress in Wealthiest Areas

A new study shows 57% of Australia mortgage holders could not handle a $100 increase in their loan repayment.

Stress has turned up in even the wealthiest cities.

But who is truly wealthy? Paper profits on homes with enormous mortgages does not constitute wealth.

Please consider $100 Tipping Point for 57% of Mortgage Holders.

A staggering 57% of mortgage holders could not handle a $100 increase in their loan repayments, according to new research by Finder.com.au.

This additional $100 is equivalent to an interest rate rise of just 0.45% based on the national average mortgage of $360,600. This means the average standard variable rate of 4.83% would only have to rise to 5.28% to put more than half of mortgage holders in stress.

“The typical mortgage holder will begin to struggle once interest rates reach around 5.28% – that’s a pretty small window before borrowing costs start to hurt,” she said.

With the research also showing that 39% of all mortgages are interest-only, this highlights why the Reserve Bank of Australia (RBA) and the Australian Prudential Regulation Authority (APRA) have shown some concern, she added.

Comparing genders, 63% of women and 50% of men would struggle to repay their mortgages with an increase of less than $100 per month.

Across the states, South Australian borrowers were the worst placed with 70% saying they could not handle an increase of less than $100 per month. This figure was lower in New South Wales, Tasmania and Western Australia at 59% and further dropped to 51% in Victoria.

Stress in Wealthiest Areas

Also consider Severe mortgage stress is cropping up in some of Australia’s richest suburbs.

…click on the above link to read the rest of the article…

Hello Rachel Maddow, MSNBC, USA Today, CNN, Washington Post, Slate: Another Major Russia Story Falls Apart

Hello Rachel Maddow, MSNBC, USA Today, CNN, Washington Post, Slate: Another Major Russia Story Falls Apart

The biggest purveyors of  “fake news” and irresponsible journalism are the news media outlets complaining most about it.

MSNBC’s Rachel Maddow is at the forefront of the latest fake news on Russia.

Maddow’s Rant


DHS didn’t bother to tell the 21 states Russia tried to hack during the election until this afternoon.


The story went viral of course.

DHS didn’t bother to tell the 21 states Russia tried to hack during the election until this afternoon. http://snpy.tv/2fH2Atn 


…click on the above link to read the rest of the article…

 

Radical Appeal for More EU Stupidity

Radical Appeal for More EU Stupidity

The rise of far-right and far-left parties across Europe is directly related to calls for “more Europe”.

Yet, French president Emmanuel Macron makes a Radical Appeal for a More Powerful EU.

Bold Actions

Macron seeks “bold” actions. He wants an EU “military intervention force”, a common budget, carbon taxes, national conventions to discuss the future of Europe, trade prosecutors to enforce countries to stick with the rules, and a Franco-German cooperation treaty,

Mercy!

I cannot think of a more destabilizing thing than a common military force that will undoubtedly be used to wage wars. Ukraine comes to mind.

Macron proposes taxing US tech companies by value created, rather than profits. Now how the hell is that supposed to work? Who gets to decide “value created”.

Franco-German Cooperation Treaty

Really?! And not include the rest of the EU?

How inclusive!

Ultimate Irony

The ultimate irony in Macron’s “Radical Appeal” is that Brexit, the rise of AfD, Marine Le Pen, and the rise of Beppe Grillo all happened because nannycrats insist on “more Europe” against the direct wishes of a large and growing percentage of the population.

I exit with this Tweet:


In 2015 Merkel & Gabriel crushed the Greek Spring together, while practising socialism for bankers. Are they surprised now with the results?


I do not believe Yanis Varoufakis is referring to Greece per se. Rather, Varoufakis refers to the general policy of migration, more Europe, etc.

Germany does not give a damn about Greece.

…click on the above link to read the rest of the article…

Catalonia Police Reject Madrid Orders: Barring Invasion, the Vote Will Take Place

Catalonia Police Reject Madrid Orders: Barring Invasion, the Vote Will Take Place

Barring a mass invasion by Spanish government troops, it appears the vote in Catalonia will take place.

Given the importance of the story, Western media is amazingly silent. Stories are few and far between.

We have not even see Tweet 1 from President Trump. Let’s take a look at the latest news and Tweets that I can find.

US News reports Catalonia Refuses to Give Police Over to Spain

Catalonia’s top security official says the regional government is refusing to hand over control of a regional police force to Spanish central authorities who are trying to stop a referendum on independence.

The announcement by the Catalan interior chief Joaquim Forn followed a move by Spain’s Interior Ministry to take over coordinating all policing efforts to stop the Oct. 1 Catalan independence vote that the Spanish government considers illegal.

The measure would mean that Madrid would send direct orders to the regional Mossos d’Esquadra police, who have been criticized for not cracking down hard enough on preparations for the vote.

Forn said the chief of the Mossos d’Esquadra had expressed his opposition to the measure during a meeting Saturday with the top state prosecutor in Catalonia and chiefs of two other national police forces, the National Police and the Civil Guard.

Forn says “we denounce the attempt by the state to intervene in the police forces of Catalonia.”

Bloomberg reports Spain Rebuffed in Boosting Control Over Catalonia’s Police.

Police in Spain’s rebel region of Catalonia rejected giving more control to the central government in defiance of authorities in Madrid who are trying to suppress an independence referendum on Oct. 1.

…click on the above link to read the rest of the article…

 

Defiant Catalans Block Spain’s Military Boats From Landing; Spain Seizes “.CAT” Domain

Defiant Catalans Block Spain’s Military Boats From Landing; Spain Seizes “.CAT” Domain

Spain’s plan to send boatloads of military police to Catalonia to prevent its independence referendum have backfired with dockers in two ports staging a boycott and a third refusing access.

The Express writes Police boats Blocked by Catalan ports as unrest threatens to Rip Spain Apart.

More than 4,000 members of Spain’s Guardia Civil are being dispatched to the troubled region amid concerns over divided loyalties in the autonomous community’s own police force, the Mossos d’ Esquadra.

Spanish authorities wanted to house the Guardia Civil officers on four cruise ships – two in Barcelona, one in Tarragona and another in Palamos.

But as thousands took to the streets to protest against the detention of Catalan officials, local dock workers joined the backlash.

The Assembly of Stevedores of the Port of Barcelona announced that workers would not provide any services to boats carrying security forces, a decision it said was taken “in defence of civil rights”.

Colleagues in Tarragona quickly followed suit and the Catalan government then denied permission to dock in Palamos – which, unlike Barcelona and Tarragona, falls under regional rather than national control.

More than 40,000 people have gathered in Barcelona to protest over the arrests and the intervention of the Spanish government in the Catalan independence vote.

Many of the angry protesters have been waving Catalonia’s red and yellow flag while chanting “We will vote” and “Hello Democracy!”

In a television address, Catalan’s President Carles Puigdemont said: “The Spanish state has by all rights intervened in Catalonia’s government and has established emergency rule.

“We condemn and reject the anti-democratic and totalitarian actions of the Spanish state.”

…click on the above link to read the rest of the article…

Stock Market “Crash” Unlikely: It’s the Debt, Stupid

Stock Market “Crash” Unlikely: It’s the Debt, Stupid

Many people have been predicting another stock market “crash”. I have not been in that camp for reasons I will explain below.

Yet, I believe the stock market is at least 50% overvalued, and a 40% to 60% “net” decline is coming.

My view is the decline will be slow and miserably painful for all involved, but there will not be a “crash” defined as a 35% plunge or greater in a single year.

To understand my view, we first need to discuss corporate debt.

It’s the Debt Stupid!

Yesterday, Bloomberg author Sho Chandra wrote Corporate America Has Amassed a Record Amount of Cash.


Corporate America’s cash reached a record of almost $2.3 trillion in Q2, up nearly 60% since mid-2009: Fed data https://www.bloomberg.com/news/articles/2017-09-21/corporate-america-has-amassed-a-record-amount-of-cash 

Photo published for Corporate America Has Amassed a Record Amount of Cash

Corporate America Has Amassed a Record Amount of Cash

Corporate America has never been in better shape to put its cash hoard to use on everything from investment to acquisitions, share buybacks and dividends. Or just hold on to it.

bloomberg.com


The idea that “Corporate America has never been in better shape to put its cash hoard to use on everything from investment to acquisitions, share buybacks and dividends. Or just hold on to it,” is preposterous.

I “politely” replied to Lisa Abramowicz‏ …


Pure bullshit
How much debt is behind that alleged cash? https://twitter.com/lisaabramowicz1/status/910964395743866881 


I do not know if I inspired her or not, but today she accurately Tweeted …


$2.3 trillion in cash but still deeply in debt https://www.bloomberg.com/gadfly/articles/2017-09-22/corporate-cash-isn-t-doing-much-but-hiding-debt  This one’s for you, @DougKass

Photo published for The Great Corporate Shell Game

The Great Corporate Shell Game

Stockpiles of liquid assets aren’t a safety net.

bloomberg.com


…click on the above link to read the rest of the article…

Stupidity Well Anchored: Absurdity of Inflation Expectations in Graphic Form

Stupidity Well Anchored: Absurdity of Inflation Expectations in Graphic Form

The amount of sheer nonsense written about inflation expectations is staggering.

Let’s take a look at some recent articles before making a mockery of them with a single picture.

Expectations Problem

On July 17, 2017, Rich Miller writing for Bloomberg proclaimed The Fed Has an Inflation Expectations Problem.

Expectations matter because they shape how households and companies act and thus can go a long way in determining where inflation actually ends up. Consumers accustomed to meager inflation will resist paying up for goods and services.

“Lower inflation expectations make it all the more difficult for the central bank to achieve its inflation objective,” Charles Evans, president of the Chicago Fed, said in remarks posted on the bank’s website on July 14.

Key Element

The Business Insider says The Fed is missing a key sign of economic weakness coming from American consumers.

Andrew Levin, a career Fed economist who was a special adviser to Fed Chairman Ben Bernanke, told Business Insider he was worried by a noticeable decline in inflation expectations, both as reflected in consumer surveys and bond-market rates.

“The reality is that the longer-term inflation expectations of consumers and investors have shifted downward by about a half percentage point. Thus, even with the economy moving towards full employment, it’s not surprising that core PCE inflation remains about a half percentage point below the Fed’s inflation target,” he said, referring to a closely watched reading indicator that excludes food and energy costs.

“If the FOMC continues to ignore the downward drift in inflation expectations and simply proceeds with its intended path of policy tightening, actual inflation is likely to keep falling short of the Fed’s target and might well decline even further,” he said.

…click on the above link to read the rest of the article…

Rate Hike Cycles, Gold, and the “Rule of Total Morons”

Rate Hike Cycles, Gold, and the “Rule of Total Morons”

In response to Janet Yellen’s everything is OK speech following today’s balance sheet reduction notice by the FOMC committee, I received an interesting set of comments from Pater Tenebrarum at the Acting Man Blog regarding rate hike cycles, gold, and stock market peaks.

“Rule of Total Morons”

A new bull market in gold started in late 2015 concurrently with the Fed’s first rate hike. That is no coincidence. The gold market is highly sensitive to future changes in liquidity. The more tightening moves the Fed undertakes (which it does in the face of collapsing money supply growth, because its decisions are based on lagging economic indicators), the more gold bullish and the more stock market bearish the fundamental backdrop becomes. Anyone long stocks should actually ask himself how it is possible that gold is up nearly 30% from its low, despite an ostensibly “gold bearish” rate hike cycle.

But they never do ask the right questions, which is why stocks peak with a big lag, particularly in major bubbles. Economic historians found out that the economy was technically very likely already in recession when the stock market peaked in 1929. In the 2007 to 2009 bust, NBER backdated the beginning of the recession to December 2007, but in May of 2008 Bernanke was still talking about how well the economy was doing and how the high oil price was “creating inflation” (thereafter he began to shut up about all that, but not before demonstrating for everyone to see how utterly clueless he was). And of course, stocks peaked in October of 2007, practically two seconds before the economy fell into recession.

In bubble regimes, the final stage is always characterized by the “rule of total morons”. That’s just how it is.

Missing Inflation

Central banks cannot see inflation because they are totally clueless how to measure it: Central Banks Puzzled as Global Inflation Hits Lowest Level Since 2009: Solving the Puzzle

…click on the above link to read the rest of the article…

Olduvai II: Exodus
Click on image to purchase

Olduvai
Click on image to purchase

Olduvai II: Exodus
Click on image to purchase

Olduvai III: Cataclysm
Click on image to purchase