Thursday, May 15, 2014

Thursday roundup (05-15-14)

Eurozone Recovery Flounders, Inflation Danger Climbs (Forbes) Recovery stalls in Europe as austerity grinds on: ECB needs to launch "shock and awe QE" to arrest slump in eurozone, says think tank by Ambrose Evans-Pritchard (The Telegraph) Eurozone setback after 'dismal' growth figures dent talk of recovery: Calls grow for further ECB stimulus as GDP data shows France and Italy flatlining and Netherlands suffering shock contraction (The Guardian) Euro zone Q1 growth disappoints, puts pressure on ECB to act (Reuters)

More Easy Money Won’t Fix Global Deflation, Will Worsen Inequality (The Wall Street Journal blogs)

IMF warns on targets as French economy hits a wall in first-quarter (Reuters)

IMF sees major risks to French savings drive (Reuters) France must not renege on spending cuts programme, warns IMF: International Monetary Fund says sticking to €50bn cuts plan is essential if France is to bring its deficit down (The Guardian)

Italian GDP Unexpectedly Falls Threatening Recession Exit (Bloomberg)

Italian public debt continues to grow: central bank (Xinhua)

How The Debt Trap Swallowed Asia In Three Charts (ZeroHedge blog) Asia: Addicted to debt: Policy makers are seeking a new model as a period of rapid economic expansion draws to a close (The Financial Times)

Confidence Among U.S. Homebuilders Falls to Lowest in a Year (Bloomberg)

Are Student Loans Really Killing the Housing Market?: It's obvious: Student debt is crushing demand for homes. So, why doesn't the realtor data show it? (The Atlantic)

Student debt hurts household wealth for decades (PBSNewshour)

[Germany's] SAP to cut between 1,500-2,500 jobs as cloud takes over (Reuters)

     The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats exist today that could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. Key threats include excessive risk-taking by financial firms, unchecked by effective regulation; the continued existence of "too big to fail" institutions; and most especially, the amassing of levels of public and private debt which could become unsustainable.

1 comment:

  1. On Tuesday May 13, 2014, The Euro, FXE, the Swiss Franc, FXF, and the British Pound Sterling, FXB, all started to die as a currency. Currency traders sold the Euro, FXE, to close lower at 135.28.

    The see saw destruction of fiat wealth commenced in the Eurozone on the failure of credit. specifically the failure of trust in the world central banks to continue to stimulate investment gains as well as global growth. With the trade lower in Italy, EWI, the world has passed through an inflection point: the world has pivoted from the age of credit into the age of debt servitude.

    On Wednesday May 14, 2014, there was a stock market reversal as Volatility, ^VIX, XVZ, traded higher, as the S&P 500, SPY, traded lower from its blow off market high, as Aerospace, PPA, such as LMT, Semiconductors, SOXX, such as MU, Retail, XRT, such as DDS, JWN, Consumer Services, IYC, such as, DIS, Global Industrial Producers, FXR, such as WHR, FLS, HON, Design Build Companies, FLM, such as Fluor, FLR, and Transports, XTN, such as UNP, DAL, SWFT, traded lower.

    World Stocks, VT, Nation Investment, EFA, and Dividends Excluding Financials, DTN, traded lower from their market highs, evidencing the failure of credit, that is trust in the world central banks’ monetary authority to simulate investment gains and global growth.

    Eight factors evidence the failure of credit; these include the trade lower in the following:

    1) The Russell 2000, IWM, IWC, traded lower as the credit sensitive Small Cap Pure Value Stocks, RZV, the Small Cap Pure Growth Stocks, RZG, the Small Cap Industrials, PSCI, the Small Cap Consumer Staples, PSCC, the Consumer Recreational Goods, POOL, THO, WGO, PII, ESCA, traded lower, on the traded lower in Regional Banks, KRE.

    2) Eurozone Nations, EZU, Portugal, PGAL, Ireland, EIRL, Austria, EWO, and Italy, EWI, traded lower. Ireland’s Bank, IRE, and the National Bank of Greece, NBG, traded lower; these are shown the way is lower in the European Financials, EUFN.

    3) European Credit, EU, traded lower.

    4) Credit Services, AXP, NNI,V, PRAA, DFS, FCFS, AGM, SLM, CACC, ECPG, CIT, MA, HEES, URI, traded lower

    5) Homebuilders, XHB, and ITB, traded lower; and US Infrastructure, PKB, such as MWA, FTK, WSO, FLT, MMM, AAON, and PRIM; and Building Materials, and Manufactured Housing, CVCO, traded lower.

    6) Life Insurance Companies, such as PUK, SYA, GNW, traded lower.

    7) Industrial Textile Manufacturers, DXYN, UFI, AIN, MHK, traded lower.

    8) Leasing Companies, HEES, URI, CAR, HTZ, UHAL, GMT, TGH, AER, traded lower

    On Thursday, May 15, 2014, at market open, the Interest Rate on the US Ten Year Note, ^TNX, traded sharply lower to 2.51%, as the bond vigilantes anticipated huge flows out of Equity Investments and into Credit Investments, as is seen by Aggregate Credit, AGG, blasting to a new all time high. The Steepner ETF, STPP, plummeted, reflecting a flattening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as investors flocked to so called safety in US Ten Year Notes, TLT.

    The death of currencies, and the failure of credit, has commenced destructionism, replacing the former inflationism as the dynamic of economic activity.

    Falling Major World Currencies, DBV, and Emerging Market Currencies, CEW, means the crush of investment in Global Growth, DNL. There are no markets anymore. Ireland, EIRL, was the crown jewel of debt trade investing and currency carry trade investing, in the age of credit and the age of currencies; now with IRE, JHX, IR, CRH, RYAAY, XL, ACN, trading lower it is one of the age of debt servitude loss leaders. And the death of the wheels of economic activity, means the dissolution of traditional governance. Fiat money is being replace by diktat money. And democratic governance is being replaced by regional fascism, as communicated in Bible Prophecy of Daniel 2:20-45 and Revelation 13:1-4