Tag: markets

Here’s the Biggest Geopolitical Factor the Markets Haven’t Priced In… Yet

Via International Man

Biggest Geopolitical Factor

International Man: What’s your take on the situation with Russia, and what comes next?

Nick Giambruno: Let me first say as an American citizen, I don’t think the US should be a global empire. If it were up to me, I’d make the US more like how Switzerland used to be—neutral and staying out of the conflicts of other nations. Sadly, Switzerland has shed most of its independence over the years, but that’s a story for another day.

Anyways, be that as it may, if you are inclined to want the US government to rule the world, you have to look at the other big powers in the world—Russia and China. So, logically you wouldn’t want Russia and China to team up. You’d want to split them apart. It’s just basic strategy.

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David Stockman on Why Markets Always Beat Central Bankers and Presidents

Via International Man

Beat Central Bankers

Goodness me, even the Wall Street Journal is catching on. In a piece about the inflationary rebound theory of a former UK central banker named Charles Goodhart, it actually tees-up the possibility of high inflation for a decade or longer due to an adverse, epochal shift in the global labor supply.

He argued that the low inflation since the 1990s wasn’t so much the result of astute central-bank policies, but rather the addition of hundreds of millions of inexpensive Chinese and Eastern European workers to the globalized economy, a demographic dividend that pushed down wages and the prices of products they exported to rich countries. Together with new female workers and the large baby-boomer generation, the labor force supplying advanced economies more than doubled between 1991 and 2018.

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Harry Dent: We’re going to have a crash regardless of what Russia does

Via Market Sanity

Things are heating up in Ukraine and around the world. Economist Harry Dent explores how this could affect the bubble and crash of a lifetime and potential options for preserving your wealth.

Harry Dent is a Fortune 100 consultant, new venture investor, noted speaker, bestselling author, and the founder and senior editor at Dent Research, where he dedicates himself to identifying and studying demographic, technological, and geopolitical trends. He has a free daily newsletter at www.harrydent.com called “Survive and Prosper.” Mr. Dent accurately predicted Japan’s collapse in 1989, the dot-com bubble-bust in 2000 and the housing bust in 2006 to 2007 (among many other things). He’s written numerous books, including The Great Boom Ahead (1992), The Great Depression Ahead (2008), The Great Crash Ahead (2011) and The Demographic Cliff (2014). His most recent novels are The Sale of a Lifetime and Zero Hour.

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Epocalypse When? When markets crash upward

 Guest Post by David Haggith at the Great Recession Blog

By Neuroxic (Own work) [CC BY 4.0 (http://creativecommons.org/licenses/by/4.0)], via Wikimedia CommonsThe Fed’s rise in rates has turned my counterintuitive predictions true by resulting in a rapid rise in the stock market. Trading only had about an hour and half left after the Fed put out its word; so, the Dow only rose about 200 points. I wouldn’t be surprised to see the euphoria kick in full force today and rocket toward something remarkable like 700 points.

 

How do soaring stocks square with my predictions of an economic apocalypse?

 

US stocks are rising on pure adrenaline. Nothing changed in a positive direction economically because of the Fed’s announcement. A rise in rates isn’t economic stimulus. Companies didn’t start making more money. Global recession didn’t slow down. Customers didn’t start buying more Christmas toys or all run out and buy a car. Employment didn’t jump upward.

In fact, the main data that came out on Wednesday was all about growing recession in the US:

 

Industrial production came in at the Econoday low forecast, down a very sharp 0.6 percent in November. This is the biggest drop in 3-1/2 years. Utility output fell a monthly 4.3 percent after falling 2.8 percent in October. Mining, reflecting low commodity prices and contraction in energy extraction, has also been week [sic.], down 1.1 percent for a third straight decline. (Bloomberg)

 

And I’ll let NewsMax summarize the main economic news of the previous two days:

 

Oil prices plunged, junk bonds hit a two-and-a-half-year low, stocks took a nearly 4 percent hit, a junk bond fund halted withdrawals, the country’s biggest pipeline operator cut its dividend by 75 percent and two of the biggest mining companies in the world suspended theirs completely.

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Say Goodbye to Normal

Guest Post by Jim Kunstler

The tremors rattling markets are not exactly what they seem to be. A meme prevails that these movements represent a kind of financial peristalsis — regular wavelike workings of eternal progress toward an epic more of everything, especially profits! You can forget the supposedly “normal” cycles of the techno-industrial arrangement, which means, in particular, the business cycle of the standard economics textbooks. Those cycle are dying.

They’re dying because there really are Limits to Growth and we are now solidly in grips of those limits. Only we can’t recognize the way it is expressing itself, especially in political terms. What’s afoot is a not “recession” but a permanent contraction of what has been normal for a little over two hundred years. There is not going to be more of everything, especially profits, and the stock buyback orgy that has animated the corporate executive suites will be recognized shortly for what it is: an assest-stripping operation.

What’s happening now is a permanent contraction. Well, of course, nothing lasts forever, and the contraction is one phase of a greater transition. The cornucopians and techno-narcissists would like to think that we are transitioning into an even more lavish era of techno-wonderama — life in a padded recliner tapping on a tablet for everything! I don’t think so. Rather, we’re going medieval, and we’re doing it the hard way because there’s just not enough to go around and the swollen populations of the world are going to be fighting over what’s left.

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