Tag: central bankers

YELLEN, DRAGHI, KURODA: DERANGED LAB RATS

The stock market has regained all of its loses year to date as economic indicators continue to flash red, corporate profits continue to plunge, consumers continue to spend less at retailers, real wages continue to fall, and housing sales continue to decline. The entire dead cat bounce has been generated through corporate stock buybacks, Wall Street lemmings trying to make up for their terrible year to date investing performance, and central bankers who will stop at nothing to verbally manipulate markets higher – since their monetary machinations over the last seven years have been a miserable failure in reviving the real economy.

As John Hussman points out, the market is poised to deliver nothing over the next decade, with a 40% to 55% “dip” in the foreseeable future. I wonder how many barely sentient, iGadget addicted, non-questioning, normalcy bias dependent zombies are prepared for a third Federal Reserve generated market collapse in the last 15 years?

From a long-term investment standpoint, the stock market remains obscenely overvalued, with the most historically-reliable measures we identify presently consistent with zero 10-12 year S&P 500 nominal total returns, and negative expected real returns on both horizons. From a cyclical standpoint, I continue to expect that the completion of the current market cycle will likely take the S&P 500 down by about 40-55% from present levels; an outcome that would not be an outlier or worst-case scenario, but instead a rather run-of-the-mill cycle completion from present valuations.

Continue reading “YELLEN, DRAGHI, KURODA: DERANGED LAB RATS”

What Recovery – Currency Wars

Guest Post by Jesse

China shocked the world markets overnight by devaluing their currency by the most in two decades.

A devaluation of this sort is designed to improve the domestic economy by stimulating exports, lowering domestic costs of production relative to other sources, and to inhibit imports by raising their relative prices.

In other words, China clearly signaled that the US dollar, to which they were matching their own currency, is overvalued relative to the state of the global economy, and especially their own.

China is ‘the canary in the coal mine’ for the global economy, a major source of labor and supply. Their own economy is sick because demand from overseas is down.

And why is demand lower? Because multinational corporations and the banking system have been financializing nearly everything to increase corporate profits and the wealth of a very few, pretty much at the expense of everyone else.

So if the people do not have the money to buy, and cannot keep increasing their private debt to service consumption because of the predatory lending and fees in the system, guess what happens to aggregate demand? Duh.

Continue reading “What Recovery – Currency Wars”

CHINA JUST SHIT THE BED

China shit the bed overnight. The shit is now hitting the fan. Shit is fucked up and bullshit. I’m not shitting you.

Stock markets don’t fall by 8.5% in one day unless there is some major shit happening beneath the surface. A comparable drop in the US stock market would be 1,500 points. Do you think a few Wall Street assholes would shit their pants if that happened? Do you think there would be a few margin calls as that shitty scenario played out?

Here’s the deal. The Chinese authorities have attempted everything they could possibly do to stop their over-leveraged, over-bought, over-hyped, corrupt, fraudulent markets from falling. They have threatened imprisonment for selling, disallowed short selling, stopped allowing trading on thousands of company stocks, and propped up their markets with trillions of yuan poured into the gaping hole.

Between the end of June and early July, the Chinese government announced at least 40 measures to prop up the market, including an interest-rate cut by the central bank and establishing a stabilization fund to outright buy stocks. All together, Chinese authorities are estimated to have mobilized as much as 5 trillion yuan, almost 10% of the gross domestic product, to halt panic sales.

It’s all been for naught. Fear is now trumping greed. The infallibility of central bank manipulators is being revealed to be false. They are nothing but money printing academic fools doing the bidding of greedy bankers and corrupt politicians. This is only the beginning of the end. There are thousands of points to go, billions to vaporize, and millions of lives to be ruined.

Welcome to the Fourth Turning. No shit.

Chinese Stocks Suffer Second Biggest Crash In History, 1,500 Companies Halted Limit Down

Tyler Durden's picture

Submitted by Tyler Durden on 07/27/2015 06:32 -0400

This was not supposed to happen.

After pledging, investing and otherwise guaranteeing the Chinese stock market to the tune of 10% of GDP, and intervening on at least 40 different occasions in the past month ever since China’s stock bubble burst in late June, with the subsequent crash nearly taking the Shanghai Composite red for the year, overnight China officially lost control for the second time, when after a weak start to the Monday trading session, things turned very ugly in the last hour, when the Shanghai Composite plunged by 8.48%, closing nearly at the lows, and tumbling some 345 points for its biggest one-day drop since February 2007 and its second biggest crash in history!

The selling was steady throughout the day, but spiked in the last hour on concerns China would rein in its market-supporting programs following IMF demands to normalize its relentless market intervention. According to Bloomberg’s Richard Breslow: “fear that the extraordinary support measures employed to hold up the market may be scaled back caused heavy afternoon selling resulting in a down 8.5% day.” Of course, one can come up with any number of theories to explain the plunge: for example the PBOC did not buy enough to offset the relentless selling.

 

The last thing the communist party and the PBOC wanted was another massive sell off after having not only fired the “bazooka” but come up with a different bazooka to halt “malicious sellers” virtually every day, including threats of arrest.

Continue reading “CHINA JUST SHIT THE BED”

SHANGHAI PLUNGING – LOOK OUT BELOW

I love those fantasy stories about central bankers being all-powerful and able to levitate stock markets forever. They make me all warm and fuzzy. In case you hadn’t noticed, the Chinese central bankers and communist party politicians have been desperately trying to stop their stock market from crashing. EPIC FAIL!!!

It plunged another 5% overnight. They have halted trading on 40% of their stocks and it keeps falling. They ban short selling and it continues to fall. They ban the press from talking negatively about the stock market and it keeps falling. They instruct their government agencies to buy stocks and it continues to fall. The omnipotence of central bankers is being proven to be a fraud.


Chart of the Day

Anyone who doesn’t think the US markets could drop 32% in a month is just drinking the central bank kool-aid. Our markets plunged 55% from their 2008 highs in a matter of months. And the majority of the losses occurred on 10 trading days. Think about that for a second.

Continue reading “SHANGHAI PLUNGING – LOOK OUT BELOW”

MONDAY COULD BE INTERESTING

Grandma Yellen and her fellow central banker minions are probably burning up the phone lines this weekend. Greece is throwing a monkey wrench into their monetary fiat machine. Their extend and pretend solution to un-payable debt has been to create more debt and pretend that it would eventually be paid off. Well, it can’t and it won’t be repaid. The dominoes are lined up and once they begin to fall, nothing will be able to stop the consequences of corruption, delusion, and debt. Will the Plunge Protection Team successfully avoid a Meltdown Monday? Maybe. Can they avoid a meltdown forever? No.

Eurozone Rejects Greek Bailout Extension: All Bailout Programs Expire On June 30, Referendum Moot

Tyler Durden's picture

Submitted by Tyler Durden on 06/27/2015 10:58 -0400

First thing this morning, when summarizing the flurry of overnight events, we focused on today’s final gambit by Greece:

“… moments ago Varoufakis was quoted as saying he would ask the Eurogroup for a bailout extension of a few weeks to accommodate the referendum.

 

And the punchline: if the Eurogroup says “Oxi”, then the entire Greek gambit, which has been a bet that to Europe the opportunity cost of a Grexit is higher than folding to Greek demands, collapses.

 

If the Eurogroup declines Varoufakis’ request, there simply can not be a referendum, as the “institutions proposal” will no longer be on the table. As such, the only question is whether the ECB will also end the ELA at midnight on June 30, adding insult to injury, and causing the collapse of the Greek banking system days ahead of a referendum whose purpose would now be moot.”

And, as expected, with the Eurozone meeting on Greece having just ended after a brief hour of deliberations, AFP reports that the answer, was indeed, no.

Continue reading “MONDAY COULD BE INTERESTING”

REVELATIONS FROM GAS PRICE PLUNGE

The plunge in gas prices over the last six months, from an average of $3.70 per gallon in July to $2.10 per gallon has revealed many truths that you won’t hear being discussed by the MSM or your government keepers. From my perspective, with four cars in the family, this is unequivocally a great development. I estimate it will save me $2,000 per year if prices remain this low.

So why are the financial markets in an uproar over the fall in oil prices? Why are central bankers upset that it will lead to lower costs for consumers? Why is Wall Street and corporate America angry about lower oil prices? Why are government bureaucrats and politicians worried about their tax revenues?

It’s because these people and organizations don’t give a fuck about you. It’s a big club and you’re not in it. What’s good for them is bad for you. They don’t treat oil and gas as a cost of living. They treat it as an investment in which to make billions in profits at your expense. Every person in America is benefiting from the fall in their energy costs. Oil is an input in virtually everything we buy. Your cost of living an every day existence is going down for once. And the oligarchs don’t like it. They pontificate about the dangers of deflation. The danger is to their riches, power and control. Lower prices are a godsend to the average American family that is one paycheck away from financial disaster.

The second revelation is how immense the taxes are on a gallon of gasoline. If you go to this link, you will see the actual wholesale cost of a gallon of gasoline is only $1.27 per gallon. That begs the question, why are we paying $2.10 per gallon?

http://www.eia.gov/todayinenergy/prices.cfm

In PA, I’m still stuck paying $2.30 per gallon, and the reason why is in the chart below. My fine state of Pennsylvania now has the highest level of gas tax in the entire country. They increased it by 10 cents per gallon on January 1, after increasing it by 10 cents per gallon last year. It will increase by another 8 cents in 2017. I get to pay the highest gas taxes in the nation for the privilege of sitting in horrific traffic, blowing out tires after hitting one of the thousands of potholes along my driving route, supporting a bankrupt public transit system and their thousands of union drones, waiting in gridlocked traffic because traffic lights don’t work below 10 degrees, and withstanding six years of construction on the Northeast Extension by union construction workers. Their motto is: We’re slow, but at least we’re expensive.

There are multiple executives from the PA Department of Transportation in state prison for the massive fraud and corruption that permeates Pennsylvania agencies. We pay a 50% union premium for all the road construction projects. On top of the gas taxes, PA has increased tolls by 100% over the last five years. And this was all done under a Republican governor with a Republican legislature. These criminals say the tax money and the tolls pay for the roads, but it’s a crock of shit. It goes into the general fund and is used to pay the gold plated pensions of the government drone workers.

Taxes on gasoline and diesel for transportation by U.S. state in U.S. cents per gallon as of January 2015[3]
State Gasoline tax
(includes federal tax of 18.4¢/gal)		 Diesel tax
(includes federal tax of 24.4¢/gal)
Pennsylvania 68.9 88.6
New York 68.7 73.1
Connecticut 65.8 78.9
California 63.8 65.0
Hawaii 63.4 66.8
North Carolina 56.2 62.2
Washington 55.9 61.9
Florida 54.8 58.1
West Virginia 53.0 59.0
Nevada 51.6 53.0
Rhode Island 51.4 57.4
Wisconsin 51.3 57.3
Vermont 50.4 56.4
Oregon 49.5 54.7
Illinois 49.1 63.9
Michigan 48.7 58.4
US (Volume-Weighted) Average 48.5 54.5
Maine 48.4 55.6
Indiana 48.3 68.7
Minnesota 47.0 53.0
Ohio 46.4 52.4
Montana 46.2 52.9
Kentucky 46.0 49.0
Maryland 45.8 52.6
Georgia 44.9 54.5
Massachusetts 44.9 50.9
Nebraska 44.9 50.3
Idaho 43.4 49.4
Utah 42.9 48.9
Kansas 42.4 50.4
Wyoming 42.4 48.4
New Hampshire 42.2 48.2
District of Columbia 41.9 47.9
Delaware 41.4 46.4
North Dakota 41.4 47.4
Virginia 40.8 50.5
Colorado 40.4 44.9
Iowa 40.4 47.9
South Dakota 40.4 48.4
Arkansas 40.2 47.2
Tennessee 39.8 42.8
Alabama 39.3 46.3
Louisiana 38.4 44.4
Texas 38.4 44.4
Arizona 37.4 51.4
New Mexico 37.3 47.3
Mississippi 37.2 42.8
Missouri 35.7 41.7
Oklahoma 35.4 38.4
South Carolina 35.2 41.2
New Jersey 32.9 41.9
Alaska 29.7 36.2

 

You can see the amount of gas taxes you are paying. A full 30% of the price I pay at the pump is taxes. I’m paying $1,400 per year in gas taxes, on top of all the income taxes, sales taxes, liquor taxes, and the myriad of other taxes I’m forced to pay at the point of a gun. And what good does it get me? It funds this welfare/warfare state that keeps me under constant surveillance and wages un-Constitutional wars around the world.

Remember. What is good for the government, central bankers, Wall Street, oil companies, and mega-corporations is not good for you. Know your enemy.