The US economy grew far less than expected in the second quarter of 2016 taking the annualised rate to just 1.2 per cent – below expectations of 2.5 per cent.
At the same time, credit card and overdraft lending has soared to its highest level since 2007. Continue reading
Beijing has a documented plan to be the premier global superpower by 2049. It’s over halfway there.
Americans think in four-year election cycles. Chinese leaders think in terms of centuries. Just leaf through the glossy, cream-colored, gold-flecked pages of The Governance of China. This anthology of political theories by Chinese President Xi Jinping is considered almost sacred scripture in Beijing.
Across 18 chapters about leading the most populous nation on the planet, Xi outlines his utopian vision for the Chinese people. In the world he describes, the Chinese are heirs to an ancient and unique civilization entitled to a privileged position among nations. In this world, China is an economic, cultural and military superpower, while the United States is no longer a major geopolitical power.
The International Monetary Fund just issued a dire new warning to China, and it has many fearing a possible stock market crash in 2016.
The IMF warned that growing corporate debt in China is an intensifying problem. They continued saying the debt must be immediately tackled if the Asian nation wants to avoid harming itself and the global economy.
The IMF, an international organization of 189 countries headquartered in Washington, D.C., issued that warning over the weekend. The main goal of the IMF is to promote international financial stability and sustainable economic growth. Continue reading
Negative interest rates, which central banks in several countries have implemented as a way to spur economic growth, is a radical move. In the last of a three-part series, ‘Negative Thinking,’ commentator Satyajit Das examines this policy and its risks.
Low rates are supposed to encourage debt-financed consumption and investment, feeding a virtuous cycle of expansion. They also increase wealth, encouraging spending. Low rates and abundant liquidity should drive inflation.
Instead, these policies since 2008 have brought the global economy a precarious stability at best, and have not created economic growth or inflation. Continue reading
Since corporate profits turned negative in mid-2015, Wall Street has pondered whether it’s just a passing phase or a signal of something worse. History strongly suggests the latter.
Recessions have followed consecutive quarters of earnings declines 81 percent of the time, according to an analysis from JPMorgan Chase strategists, who said they combed through 115 years of records for their findings.
The news gets worse: Of the remaining 19 percent of the time, recession was only avoided through either monetary or fiscal stimulus. With the Federal Reserve holding limited easing options and a deeply dysfunctional Washington thwarting a fiscal boost, the prospects for help are not good. Continue reading
Earlier today, we highlighted the rather abysmal results reported by Maersk, the world’s largest shipping company.
“The demand for transportation of goods was significantly lower than expected, especially in the emerging markets as well as the Group’s key Europe trades, where the impact was further accelerated by de-stocking of the high inventory levels,” the company said, in its annual report.
Just how bad have things gotten amid the global deflationary supply glut you ask? Continue reading
As each day passes by, it looks like Germany will lead the world into economic collapse and bring the EU with it. However, this will not lead to a complete breakup of Europe, but a United States of Europe — Germany’s long-term ambition for decades. The crisis, be it economic or social, is leading to further integration within some member states, such as forging the creating of a European Army. The greatest heist of all time is under construction and destroying what we see as the EU today, in order to reshape it into the United States of Europe.
If you follow Bible prophecy and know of the great late David Wilkerson, you might give pause to think about what’s going on today, as his vision laid out in 1973.
It all started in mid/late 2014, when the first whispers of a Fed rate hike emerged, which in turn led to relentless increase in the value of the US dollar and the plunge in the price of oil and all commodities, unleashing the worst commodity bear market in history.
The immediate implication of these two concurrent events was missed by most, although we wrote about it and previewed the implications in November of that year in “How The Petrodollar Quietly Died, And Nobody Noticed.” Continue reading
Please see the source for the video.
Central banks are pulling out all the stops to turn around the global economy.
They’re pumping money into their economies, creating negative interest rates and buying billions of dollars in bonds. Yet experts are worried some of these strategies will not be enough to turn around the slump in the world.
“Major central banks have run out of ammo,” says Ed Yardeni, chief investment strategist at Yardeni Research. Continue reading
Financial markets the world over are increasingly chaotic; either retreating or plunging. Our view remains that there’s a gigantic market crash in the coming future — one that has possibly started now.
Bubbles arise when asset prices inflate above what underlying incomes can sustain. Centuries ago, the Dutch woke up one morning and discovered that tulips were simply just flowers after all. But today, the public has yet to wake up to the mathematical reality that over $200 trillion in debt and perhaps another $500 trillion of un(der)funded liabilities really cannot ever be paid back under current terms. However, this fact is dawning within the minds of more and more critical thinkers with each passing day.
Please see the source for the video.
“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.
“Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”
Stubbs said that macro strategists at Citi forecast that the dollar would weaken in 2016 and that oil prices were likely bottoming, potentially providing some light at the end of the tunnel. Continue reading
If you’ve been reading here long enough, this shouldn’t come as a shock, especially after knowing that Deutsche Bank is exposed to over $72 trillion in derivatives exposure. To put this in perspective, and as the article states, Germany’s humble GDP currently sits at only $3.4 billion. For further perspective, the $3.4 billion GDP is 0.00004722222% of the $72 trillion in exposure.
Either way, you don’t have to be a financial expert to see Germany has a slight problem on its hands. Litigation charges are likely the least of its worries. The United States economic woes (i.e. debt) might be a seriously problem, but Germany’s are astronomical when considering such things as the debt-to-GDP ratio. It wouldn’t be surprising at all to see Germany collapse and become the falling dominoes catalyst that leads the world economy into a global depression.
The global collapse is a sure bet and is a matter of when, not if. It’s almost a sure bet that Germany will lead the way. The United States is more of an expert in the game of kicking the can down the road.
GERMANY could force the European Union into ruin after Deutsche Bank’s share price plunged following the country’s biggest lender’s first annual loss since the financial crisis.
The German lender posted a full year loss of £5.1 billion (€6.8bn) on Thursday – higher than the expected €6.7bn million.
With losses of €2.1bn in the fourth quarter of 2015-16, fears of the entire eurozone toppling are becoming an increasing reality.
Much of Deutsche’s losses have been down to litigation charges, racking up €1.2bn in the last quarter – which could still increase.
As we’ve been warning for quite a while (too long for my taste): the world’s grand experiment with debt has come to an end. And it’s now unraveling.
Just in the two weeks since the start of 2016, the US equity markets are down almost 10%. Their worst start to the year in history. Many other markets across the world are suffering worse.
If you watched stock prices today, you likely had flashbacks to the financial crisis of 2008. At one point the Dow was down over 500 points, the S&P cracked below key support at 1,900, and the price of oil dropped below $30/barrel. Scared investors are wondering: What the heck is happening? Many are also fearfully asking: Are we re-entering another crisis?
Sadly, we think so. While there may be a market rescue that provide some relief in the near term, looking at the next few years, we will experience this as a time of unprecedented financial market turmoil, political upheaval and social unrest. The losses will be staggering. Markets are going to crash, wealth will be transferred from the unwary to the well-connected, and life for most people will get harder as measured against the recent past. Continue reading
BRITAIN and the world could be about to enter a recession that will be more brutal than 2008 thanks to China’s slowing economy, experts fear.
China’s has the second largest economy in the world and represents around 12 per cent of global GDP and 18 per cent of global manufacturing exports.
At the same time, it has built up huge levels of debt within its stock market helping to create a huge bubble that now looks set to burst. Continue reading
For the first time ever, the Baltic Dry Index has fallen under 400. As I write this article, it is sitting at 394. To be honest, I never even imagined that it could go this low. Back in early August, the Baltic Dry Index was sitting at 1,222, and since then it has been on a steady decline. Of course the Baltic Dry Index crashed hard just before the great stock market crash of 2008 too, but at this point it is already lower than it was during that entire crisis. This is just more evidence that global trade is grinding to a halt and that 2016 is going to be a “cataclysmic year” for the global economy. Continue reading
THE European financial powerhouse could be facing a huge financial crisis which would have devastating implications for Britain as a lethal storm of economic problems brews in Germany.
Germany’s industrial production has slipped to ZERO per cent and customer confidence has plummeted in just part of a catalogue of disasters for Chancellor Angela Merkel.
A fall in Germany’s prosperity could drag the eurozone down with it – a scenario becoming more likely amid growing signs of the country’s slowdown.