Deutsche Bank: The US May Now Be In A Recession

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Three months ago, we presented an analysis which showed something disturbing: according to Deutsche, the “current business cycle is already the fourth longest in the post- WWII period, and the corporate debt-to-GDP ratio suggests that imbalances are building”, and that worse, as a result of soaring corporate debt and rolling-over profit margins, “a recession could hit as soon as the second half.” Continue reading

China’s Debt-to-GDP Ratio Just Climbed to a Record High

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China’s debt is still growing faster than its economy

While China’s economic expansion beat analysts’ forecasts in the second quarter, the country’s debt levels increased at an even faster pace.

Outstanding loans for companies and households stood at a record 207 percent of gross domestic product at the end of June, up from 125 percent in 2008, data compiled by Bloomberg show. Continue reading

Japan is about to dive off its own version of the fiscal cliff

If you thought the US’s fiscal cliff—that combination of rising taxes and slashed fiscal spending that scared investors and shook the economy in December 2012—was bad, have a gander at what Japan’s prime minister, Shinzo Abe, faces. He entered the job with a mandate to grow the economy and escape deflation. But before Abe took over, the government passed a tax hike on consumption to show that the Japanese government is serious about shrinking its ¥1 quadrillion ($10.3 trillion) in public debt. Continue reading

On Poland and Detroit. Not For the Faint of Heart.

Back to finance.  Poland did exactly what I and a few others have been warning about for years with regards to private retirement accounts and pensions.  Poland confiscated 50% of all private pension funds last week.  PRIVATE pensions.

As Warren Pollock and I have been screaming, one of the largest chunks of collateral left in the system is private retirement money, both in the form of 401(k)s and IRAs and in private pension accounts.  In the U.S., the latest data for 2012 shows that there are now $10.5 Trillion in private 401k and IRA holdings, with another $9 Trillion in pensions and annuities.

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The regime has been fairly open about its plans to “nationalize”, read CONFISCATE, this collateral and implement a system of “mandatory retirement savings accounts”, which will be just another confiscatory redistribution into the hands of the oligarchs and their cronies.  This what Poland just did.  This is what MF Global was in its essence.  This is what Cyprus was, except the Cypriot confiscation was done to demand deposit accounts instead of retirement accounts, which is now termed a “bail-in” – but it is all of the same stripe, namely the utter destruction of the notion of private property and the redistribution of all wealth into the hands of the oligarchs.   In Poland, the private pension paradigm has now also been destroyed because no one will want to put money into a private pension after this knowing that it can and will be stolen by the government at any time with zero redress. Continue reading