We have no idea how to even comment on this latest observation by “world-renowned”, if allegedly dead now that oil is again well above $44, commodity expert Dennis Gartman, who in his latest letter writes that World War III “has begun in earnest:”…
Why now? Perhaps the markets are indeed concerned that the Federal Reserve Bank may pass on raising rates at its meetings this week, but will be moved to raise rates at a later time.
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
Top Intel Officials: U.S. Faces Highest Terror Threat Level Since 9/11 (Washington Free Beacon)
Citi: Here Comes a Global Recession (Bloomberg)
China accounts for 90 per cent of world’s new billionaires as the number of super-rich swells globally (South China Morning Post)
China’s Silk Road Reaches Iran, Pushes Toward Europe (The Trumpet)
An Escalating War on Cash (Euro Pacific Capital)
Battle over Syria (III) (German Foreign Policy)
Inside the Ring: U.S. Mulls Pledge on Disputed Philippines Outpost (Washington Free Beacon)
‘A message to the US’: Chinese missile frigate enters service in East China Sea (South China Morning Post)
China Warns U.S. After Trump Wins Nevada (Money Morning)
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DB’s Jim Reid lays out the “endgame” scenario, one which this website first said is inevitable back in 2009. With Citi and Macquarie already on board, expect what was once merely the figment of a “deranged tinfoil conspiracy-theory blog’s” imagination, to become global monetary policy. And yes, the real endgame is the one we have said from day one: total fiat (and conventional economics) collapse.
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From Deutsche Bank’s chief credit strateigst Continue reading
Willem Buiter, chief economist at Citi and former Bank of England policymaker, warns China’s woes are set to spread
A “hard landing” for China is likely to plunge the world economy into recession in the next two years, Willem Buiter, chief global economist at Citigroup and a former Bank of England policymaker, has said.
As the Federal Reserve in Washington prepares to decide whether to defy warnings of economic fragility and push up interest rates next week, a research note by Citi’s experts warns of a 55% probability of global recession. Continue reading
While the entire financial world is hanging on to every Mario Draghi word in hope Europe finally improves the market’s (if not the economy’s) “fundamentals” to new record highs, and joins the rest of the “developed” world’s central banks in injecting trillions of liquidity into the Div/0 P/E stocks “whatever it takes” (because in a world where only multiple expansion is left, the ECB is the last wildcard at least until the US is dragged right back into the global recession and the Fed admits any pipe dreams of a rate hike in 2015 were just that), something far more different may be taking place behind the scenes. According to at least one journalist, the Fiscal Times’ Patrick Smith, “Draghi appears set to leave Frankfurt and return to his native Italy the first chance he gets.”
Has the former Bank of Italy exec and Goldman employee had enough of fighting Germany tooth and nail over every proposal, if mostly for dramatic media consumption? “Impossible” most would say, and yet…
[Draghi’s departure] could be as soon as January, depending on a variety of circumstances in Frankfurt and Rome, according to well-placed sources who include a prominent private investor and a senior journalist in Rome. “Draghi wants out, fed up and stymied by Berlin,” one of these sources wrote in a note just before the weekend. In a subsequent message: “I am hearing from several [official] sources that he is entirely fed up with the monetary politics he confronts.” Continue reading
Ecuador, Egypt, Pakistan, Venezuela, Belize, Cuba, Cyprus, Greece, Jamaica and Ukraine are all on the verge of a default, according to Moody’s ratings.
Argentina defaulted for the second time in 12 years after hopes for a midnight deal with holdout creditors were dashed, setting up stock and bond prices for declines on Thursday and raising chances a recession could worsen this year.
After a long legal battle with hedge funds that rejected Argentina’s debt restructuring following its 2002 default, Latin America’s third-biggest economy failed to strike a deal in time to meet a midnight deadline for a coupon payment on exchange bonds.
“This year is going to be a bad one,” said Prime Minister Mariano Rajoy in a press conference. He reaffirmed the previous forecast of a 1.7 percent shrink in GDP in 2012. The country forecast 24.3 percent unemployment in March, and Spainiards under 25 have a 52 percent unemployment rate.
Rajoy has cut government programs and raised taxes to combat the deficit, leading to protests.
Spain is the fourth and largest country in the euro zone to accept financial assistance, joining Greece, Ireland and Portugal. Rajoy stressed that the aid was limited to the country’s banks, which have been weighed down by the global recession and toxic real estate holdings, and avoided the term “bailout.”
Full article: Spain’s Prime Minister: “This Year Is Going To Be A Bad One” (International Business Times)
Faber’s bearish market calls have been followed closely since 1987 when he warned his clients to cash out before Black Monday.
And in a live interview on CNBC’s Fast Money Halftime Report, Faber again warned that economies of the world may be on the brink of a serious slowdown.
Faber indicated that while investors remain focused on Greece and Europe – other issues, bigger issues are looming. And they’re more threatening.
“As an observer of markets – whenever everyone focuses on one thing – like Greece and Europe – maybe they miss issues that are far more important – such as a meaningful slowdown in India and China.”
“I think we could have a global recession either in Q4 or early 2013.” When asked what were the odds, Faber replied, “100%.”However, in the near term Faber also sees potential for a market rally.
Faber said the bullish catalyst would be Greece exiting the EU.
It’s worth noting that Faber is talking hypothetically; he does not think Greece exits the EU in the near future.
“What I think will happen is that Germany will show more flexibility and issue more euro bonds.”
Full article: Marc Faber: 100% Chance of Global Recession (CNBC)