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How Bloomberg’s Algo-Writers Serve The Cult Of Keynesian Central Banking | David Stockman’s Contra Corner
If you ever needed proof that the financial press has been completely indoctrinated in the cult of Keynesian central banking consider the attached Bloomberg note on the recent tiny decline in Chinese industrial company profits. Without breaking for anything more than a comma, its hapless Hong Kong stringer, one Malcolm Scott, conjoined the fact of less profits with the imperative for moar……money.
Industrial profits in China fell the most in two years, underscoring the need for looser monetary conditions as the world’s second-largest economy slows.
Perhaps Bloomberg is no longer using carbon units to post its news stories and has gone straight to algo-writers designed to directly feed algo-readers without the bother or cost of human intercession. But regardless of whether “Malcolm Scott” is carbon or silicon based, the attached is clearly presented as a news story and the above excerpt as a declarative sentence. Accordingly, by the lights of Bloomberg and the rest of the mainstream financial press which it echoes, it is now the job of central banks to print money to ensure that at no point in time do profits—-and therefore their stock market capitalizations—-fall by even so much as 2.1% over prior year.
That’s right. In the land of red capitalism, where corporate accounting and reporting are so advanced that profit results are published on a monthly basis, the doctored number for all of China’s industrial companies in October came in at 2.1 percent less than last year’s fictional number.
…click on the above link to read the rest of the article…
As It Turns Out Deflation Is Good After All | Zero Hedge
As It Turns Out Deflation Is Good After All | Zero Hedge.
Earlier today, in typical German fashion, the chief of the Bundesbank poured cold water on Europe’s latest round of demands that Germany carry the weight of the rebound from the triple-dip on its shoulders, as usual, when Buba President Jens Weidmann Friday rejected calls for a German stimulus plan, saying only structural reforms and more competitiveness would kick-start eurozone economies. “Calls for a public fiscal stimulus plan in Germany to boost the Eurozone economy are amiss,” said Mr. Weidmann in a speech for an economic summit hosted by the German newspaper Süddeutsche Zeitung. He is, of course, right: the longer Europe’s insolvent, uncompetitive governments kick the can and force Germany to do all the hard work, the longer Europe will be unable to get out of a hole that gets deeper with every passing day. In short: Mr. Weidmann refuses to “get to work” for a bunch of corrupt, clueless politicians.
He then proceeded to do something shocking: he was logical. Quoted by the WSJ, he said: “Investment rates that are above the growth potential of a developed economy aren’t likely to boost prosperity—this applies to both public and private investments.”
More:
…click on the above link to read the rest of the article…
Goldman Warns “Further Yen Depreciation Could Be A Net Burden” As Japanese Bankruptcies Soar | Zero Hedge
It is no secret that one of the primary drivers of relentless S&P 500 levitation over the past two years, ever since the start of Japan’s mammoth QE, has been the use of the Yen as the carry currency of choice (once again as during the credit bubble of the early-2000s), whose shorting has directly resulted in E-mini levitation. One look at the intraday chart of any JPY pair and the S&P500 is largely sufficient to confirm this. Those days, however, may be coming to an end, at least according to Goldman which overnight released a note saying that the Yen is “Almost at breakeven: Further yen depreciation could be a net burden.”
Here are the highlights:
The yen has depreciated quickly beyond ¥115/US$ from the ¥107/US$ level since the FOMC made the decision to terminate quantitative easing and the BOJ surprised with additional easing at the end of October. This has prompted concern over possible damage to Japan as a whole if the yen weakens further.
Using industry input/output tables to investigate the costs and benefits of a weak yen, we find that the manufacturing sector still reaps forex translation gains under Japan’s current economic structure. However, in materials and nonmanufacturing industries that have limited opportunity to pass on forex-driven cost growth to exports, the costs of a weak yen far outweigh the benefits. According to our calculations, a 25% decline in the yen’s valueresults in a ¥4.1 tn net cost increase for Japanese industry as a whole since 2012 and a ¥10.5 bn increase in household sector import inducement.
…click on the above link to read the rest of the article…
This Country Will Be the Next Zimbabwe… |
This Country Will Be the Next Zimbabwe… |.
Working with their Hands
Things are slowing down. This is Thanksgiving week. People are leaving work early, trying to beat the holiday traffic rush. US stocks and gold were flat yesterday.
We’re still in New York, taking care of business. Tomorrow, we’ll get an early start and head back down to Maryland. We have a lot of young men coming for the holiday – friends of our sons. Your correspondent does not like to see young men with idle hands.
A strong back is a terrible thing to waste! So, he has a project: to save an old tobacco barn, using the soft hands of these future lawyers and financial managers. The trouble with most young people, we’ve observed, is they don’t know how to use their hands. They’ve spent their entire lives in school and on laptops and smart phones. Few have had any contact with tools or hard work.
Our plan – for the benefit of readers interested in tobacco barn preservation – is to turn an old-fashioned oak-frame barn into a pole barn. The sill is rotten, as are many of the main supporting posts. We will dig holes, plant treated 12-inch poles in concrete and bolt them to the uprising posts above the rot. And we will hope that the barn doesn’t fall on our heads when we start banging on it.
“You’re gonna do this with a bunch of college boys?” asks Tommy, a much weathered local man who has spent his whole life “movin’ dirt.”
“You’re gonna put a hurtin’ on ‘em.”
Yes. That’s the plan. We’ll let you know how it works out.
…click on the above link to read the rest of the article…
Japan Is Dying And We Still Don’t Get It?! – The Automatic Earth
Japan Is Dying And We Still Don’t Get It?! – The Automatic Earth.
What is it with us? Don’t we WANT to understand? Japan announced on Monday that its economy is in hopeless trouble and back in recession (as if it was ever out). And what do we see? ‘Experts’ and reporters clamoring for more stimulus. But if Japan has shown us anything over the past years, and you’re free to pick any number between 2 and 20 years, it’s that the QE-based kind of stimulus doesn’t work. Not for the real economy, that is.
The land of the setting sun has during that time thrown so much stimulus into its financial system that Krugman-esque calls for even more of the same look even more ludicrous today than they did all along. Abenomics is a depressing failure, just as we knew it would be since it started almost two years ago. It’s not complicated, and it never was.
Japan’s stimulus has achieved the following: banks get to pretend they’re healthy and stocks rise to heights that are fundamentally disconnected from underlying real values. On the flipside of that, citizens are being increasingly squeezed and ‘decide’ not to spend (not much of a decision if you have nothing to spend). Since Japan’s ‘consumer’ spending makes up about 60% of GDP, things can only possibly get worse as time passes. If ‘consumers’ don’t spend, deflation is the inevitable result – and that has nothing to do with the much discussed sales tax, it’s been going on for decades -.
…click on the above link to read the rest of the article…
