Thursday, May 1, 2014
The Big Bang Is Inevitable? GDP Growth Is Collapsing Everywhere From Europe, Russia, And Into China
The trigger for the last meltdown (2008-2009)
was liquidity starvation which led to a credit crunch
(banks/financials and other holders of chattel paper assets were
caught swimming naked with poison well assets and deteriorating
balance sheets & couldn’t re-collateralize).
The catalyst for the arriving crisis will be
the real rate of inflation (already massively, adversely impacting
the average barely shopper) on things such as necessities (gas,
groceries, utilities, property taxes, higher income tax rates, higher
medical care costs, etc.) coupled with the dawning realization on the
part of corporations and “investors” that’central bank monetary
policy since 2008 has now created the largest divergence between the
perceived and real fundamental prices (the ask, which affects the bid
for whatever actual demand there may be) on assets (i.e. price
distortion – this extends to everything from real estate to stocks
to bonds, including sovereign bonds).
Is
A Crash Inevitable? The Spiral Vortex Of Debt And Corruption
The
economy will decline in the USA following 2015.75 and will have
several important impacts that will shape our future. The
Big Bang is inevitable – YES! The outcome is to be determined. This
is why I do what I do. I too have a family and fear for their future.
I am not 23, so my shelf time is expiring thank God so I do not have
to live in this age of tyranny too long. Nevertheless, all I can do
is try to educate as many people for if they understand how things
work, then when it comes time for the rebuilding, perhaps we can
choose freedom over more authoritarian-tyranny…
So my concerns are for our future – not to
sell bullshit. This is far more important. Unfortunately, the primary
impact will be:
The
USA is the only economy holding up the entire world right now. GDP
Growth is collapsing everywhere from Europe, Russia, and into China.
Once the USA turns down, the civil unrest will rise in the USA as
well. The Occupy Wall Street was a dress rehearsal.
Governments
will find it increasingly harder to sell their debt. This
trend has already hit both China and Russia. We will see it hit
Europe, Japan and then the USA. This will drive the trend to raise
taxes further as governments will assume that they need to restore
confidence within their debt structures. As they do this, the global
economy will turn downward into a spiral vortex.
While
governments claim to be mad at the NSA, behind the curtain there is
legal swapping going on….
Japan
and China threaten Asian economic growth – IMF
Asian
growth will remain steady at 5.4 percent in 2014, however
a steeper than expected slowdown in China and a failure in Japan’s
“Abenomics” program could derail the region’s economic
progress, says the IMF.
Asia
also faces risks from outside the region, including improving growth
in the US, which could raise global interest rates the new
IMF study said.
“Bouts
of capital flow and asset price volatility are likely along the way,
with exchange rates, equity prices, and government bond yields
affected by changes in global risk aversion and capital flows,”
the IMF concludes.
‘Almost
every asset is overvalued’: Apollo pro
Just because many forecasters predict the U.S.
economy will continue to grow doesn’t mean it’s easy to make
money.
“The quantitative easing and the excess money
and the low interest rates have driven pricing up of almost all
financial assets to beyond what their intrinsic value might be,”
Joshua Harris, co-founder and chief investment officer of $161
billion private equity firm Apollo Global Management, said Monday at
the Milken Institute’s Global Conference in Los Angeles.
For those that must keep some fiat in a bank,
no more than 100K per bank for sure. Ominous tea leaves all around.
Michael Lewis cites Ron Morgan and Brian
Levine, Goldman Partners and co-heads of Goldman’s global stock
markets, who said that
“Unless there are some changes, there’s
going to be a massive crash, a flash crash times ten.”
The
rising cost of a trip to the supermarket
Fed
taper to cause ‘severe recession’: Economist
The Federal Reserve’s move to eliminate its
monthly asset purchasing program will cause a “collapse in asset
prices and a severe recession,” according to economist Michael
Pento….
Very soon the amount of QE will be close to, if
not exactly at zero. And without banks supporting asset prices by
consistently creating new money at the behest of the Fed, stocks and
home prices have nowhere to go but down.
I anticipate the reduction of the wealth effect
to intensify as the taper progresses. Since the economic “recovery”
was predicated on the rebuilding of asset bubbles, a long delayed and
brutal recession will start to unfold later this year…..
TruthInSunshine
China pushes for rival trans-Pacific trade deal
By Agence France-Presse
Beijing (AFP) Wednesday, April 30, 2014 2:29:59 PM
Beijing (AFP) Wednesday, April 30, 2014 2:29:59 PM
/AFP/File
Containers wait to be transported in Lianyungang, east China's Jiangsu province on April 10, 2014
Containers wait to be transported in Lianyungang, east China's Jiangsu province on April 10, 2014
China is pressing for a vast
Asia-Pacific free trade agreement, a senior official said Wednesday, as a
rival US-led deal that excludes the Asian giant has yet to reach
agreement.
Wang Shouwen, an assistant
commerce minister, told reporters at a briefing that China has proposed
setting up a working group to study the feasibility of an Asia-Pacific
Free Trade Agreement (FTAAP).
The proposal comes ahead of a
meeting in May of trade ministers from the Asia Pacific Economic
Cooperation (APEC) forum, which China will host.
U.S. GDP posts smallest gain in three years
Scant 0.1% gain a residue of bad weather, but spring may revive growth
By Jeffry Bartash, MarketWatch
An earlier version of this article gave the incorrect figure for ADP employment growth in April.
WASHINGTON (MarketWatch) — Growth in the U.S. economy almost came to a
halt in the first quarter, a bout of weakness spurred by one of the
worst winters in years.
Gross domestic product rose at an annual rate of just 0.1% from January
through the end of March, the weakest performance in three years,
according to a preliminary estimate
by the Commerce Department.
Economists surveyed by MarketWatch had forecast growth to slow to a
seasonally adjusted 1% from a 2.6% clip in the final three months of
2013.
ECONOMY AND POLITICS |
@MKTWEconomics
Why the housing sector won't save the broader economy
The housing sector may or may not be better off after a slow start to 2014. But two professors say in on their blog that regardless, it won't affect the broader economy.
Why the housing sector won't save the broader economy
The housing sector may or may not be better off after a slow start to 2014. But two professors say in on their blog that regardless, it won't affect the broader economy.
Wall Street expected a poor number, but the weakness was even more
widespread than had been forecast. Investment in business equipment and
residential home construction both declined, U.S. exports fell sharply,
government spending dropped again and companies increased inventories at
a much slower rate.
Despite the poor growth at the start of 2014, a batch of early
indicators suggest the U.S. economy is accelerating in the second
quarter. One reason: Some of the hiring, consumer spending and business
investment put off in the first quarter because of bad weather is now
occurring in the spring. Private-sector hiring, for example, increased by 222,000 in April to reach a five-month high, payroll processor ADP said Wednesday.
Economist predict second-quarter growth will speed up to 3.5%, the MarketWatch survey shows.
What’s less certain is whether the U.S. can sustain that sort of pace in
the second half of the year. The recovery has been uneven since it
began in mid-2009 and annual growth have hovered around 2%, well short
of the nation’s historical average of 3.3%. U.S. wages still aren’t
rising all that much, the housing market has been hurt by higher prices
and interest rates, government spending remains weak and the global economy is also soft.
Economists are pinning their hopes for faster growth on a pickup in
hiring that bolsters consumer incomes and spending and a springback in
business investment to keep up with rising demand. Neither consumers
nor businesses have spent aggressively since the end of the Great
Recession, but household debts have fallen sharply and corporate profits
are at record highs. That might make them more willing to spend and
invest.
“The rebound in growth that is already under way will be sustained,”
asserted Scott Hoyt, senior director of economic research at Moody’s
Analytics. “The economy’s fundamentals are strong.”
U.S. stocks rose slightly in Wednesday action.
Inside GDP report
The best news in the first-quarter report was a 3% gain in consumer
spending — the main driver of the U.S. economy — following a robust 3.3%
advance in the fourth quarter.
Yet the increase was largely driven by big spikes in utilities such as
heating because of the cold weather as well as higher outlays on health
services related to the enactment of the law commonly known as
Obamacare. The spike in health-care spending, as a percentage of GDP
growth, was the highest ever recorded.
The result: spending on services jumped 4.4%, the biggest increase in
almost 14 years. Spending on goods rose a much slimmer 0.4%, the weakest
advance in nearly three years.
1
2
Recession Alert: U.S. Economy Expands by Just 0.1% In First Quarter, If It Wasn’t For Obamacare, Q1 GDP Would Be Negative
GDP
Shocker: US Economic Growth Crashes To Just 0.1% In Q1
Despite
consensus at 1.2% growth QoQ, the “weather” destroyed the fragile
stimulus-led economy of the US which managed only a de
minimus +0.1% QoQ growth (the lowest since Q1 2011).
However, as Steve Liesman noted on the heels of Mark Zandi’s
comments “basically ignore this number” – ok then. Spending
on Services, however, surged by the most since 2000 -
heralded as great news by some talking heads – but is merely a
reflection of the surge in healthcare and heating costs (imagine
if it had not been cold and if Obamacare hadn’t saved us). As
a reminder – this is the growth that is occurring as QE has run its
course, as stimulus ends, and as escape velocity nears… if the
“weather” can do this much damage to the US economy, should
stocks really be trading at the multiple of exuberant future hope
that they are?
Oops!
U.S.
GDP posts smallest gain in three years
Scant
0.1% gain a residue of bad weather, spring may revive growth
Economists
polled by Reuters had expected growth to slow to a 1.2percent rate.
The
slowdown partly reflected an unusually cold anddisruptive winter,
marked by declines in sectors ranging from businessspending to home
building.
“If
health-care
spending had been unchanged, the headline GDP growth number would
have been -1.0%,” Shepherdson
said.
If
It Wasn’t For Obamacare, Q1 GDP Would Be Negative
US
Mortgage Applications Sink To Lowest Level Since December 2000
NEW
YORK (Reuters) – Applications for U.S. home mortgages fell last
week to their lowest level since December 2000 as both refinancing
and purchase applications declined, an industry group said on
Wednesday.
The Mortgage Bankers Association said its
seasonally adjusted index of mortgage application activity, which
includes both refinancing and home purchase demand, fell 5.9 percent
to 333.2 in the week ended April 25. That was the lowest level since
December 2000, the group said.
Only
a Recession Can Kill a Bull Market – RBC’s Golub
Recent
Biotech And Momentum-Stock Selloff Is Just A Warmup For The
Bigger A Stockalypse
China
To Surpass USA As World’s Largest Economy This Year For First Time
Since 1873
The Shocking Truth About Regulatory Costs
By Staff Report - April 30, 2014
Regulatory Costs Are World's No. 10 Economy ... After years
of rapid growth during the Obama administration, the cost of federal
regulations is now bigger than the entire economies of all but nine
countries in the world. That's according to the latest annual report
on the regulatory state issued by the free-market Competitive
Enterprise Institute, titled "Ten Thousand Commandments."
Compiling reports of compliance costs from various government
agencies and outside sources, author Clyde Wayne Crews found that
the "regulation tax" imposed on the economy now tops $1.86
trillion. By comparison, Canada's entire GDP is $1.82 trillion.
India's is $1.84 trillion. – Investors.com
Dominant Social Theme: Regulations are part of the cost of doing business.
Free-Market Analysis: Surprised? The article also notes that on a per-household basis, federal regulatory costs average nearly US$15,000.
That is reportedly a bigger sum than individual and corporate income taxes combined. Also, US regulations are not "capped" nor are they subject to specific legislative oversight. In theory, regulations and regulatory costs can simply continue to grow until they become literally unaffordable.
Dominant Social Theme: Regulations are part of the cost of doing business.
Free-Market Analysis: Surprised? The article also notes that on a per-household basis, federal regulatory costs average nearly US$15,000.
That is reportedly a bigger sum than individual and corporate income taxes combined. Also, US regulations are not "capped" nor are they subject to specific legislative oversight. In theory, regulations and regulatory costs can simply continue to grow until they become literally unaffordable.
Here's more:
The main modern truth of economics is something called marginal utility, which is basically, among some other things, the idea that prices vary at the margins, especially, and that only the marketplace itself can determine prices.
The "discovery" of marginal utility (by an economist living in Austria in the 1850s) gave rise to both the "Austrian School" based on free-market principles and neo-classical economics.
Karl Marx and Thomas Malthus were both classical rather than neo-classical economists. Their models did not take into account the idea that marketplace competition could create variable pricing that would undo their static forecasts. Both Marx and Malthus made significant predictions subsequently proven wrong.
What emerges from an acceptance of neo-classical economics is the idea that forecasting itself is flawed and that no numeric analysis, no matter how complex, can accurately predict the future.
This is the main reason why Austrian economics is neither popular with nor popularized by the mainstream media and mainstream academia. Governments are run based on forecasts, and free-market economics clearly shows that accurate forecasting is not feasible.
Central banking provides forecasting every month about what the volume and price of money should be. But 100 years of history shows – via endless depressions and recessions – that these forecasts are often wrong.
Governments make laws and in the modern era these laws are increasingly buttressed by regulations, yet both laws and regulations are forecasts – imposed on society based on a legislative vision of necessary solutions. Again, it is free-market economics that explains why despite a torrent of legislative actions over decades throughout the West, living standards are dropping not rising.
Every law, every regulation, every forecast that is acted on within a context of government demands is what we call a price fix, mandating an action of some considerable expense to society and insisting that those actions are initiated. Yet it is accepted as a matter of course by both the media and academia that price fixing doesn't work.
This is a fundamental disconnect that exists at the heart of Western democracies.
How can neo-classical economics be accepted – as indeed it is throughout the West – and how can price-fixing be known as destructive while every part of the Western governing paradigm continues to pursue these obviously problematic acts?
Laws fix prices in ways that cannot be predicted. So do regulations. If the costs are great – and growing bigger – while the utility of imposing legislative solutions is impractical, why do Western governments continue down this path? And why does mainstream media not scrutinize what is going on in greater detail?
Of course, we know the answer to that. Regulatory efficiency is a bedrock dominant social theme, one that the globalist elite depends upon to help it reach its internationalist goals. No regulation ... and government begins to shrink; and if government loses power, then it loses value as a critical tool of manipulation.
From an investment standpoint, regulation is an increasingly critical component of any industrial endeavor. Depending on the regulatory environment, businesses can either expand successfully or wither and die.
When recommending investments and new ventures, the High Alert brain trust is careful to examine potential regulatory impacts. That's one reason to be involved in industries – like marijuana – that are relatively new and thus less encumbered and controlled by regulation as they emerge into the mainstream.
But the larger perspective is surely discouraging. Society – certainly US society – cannot continue long down this path. A critical mass of economic distortion must be reached sooner rather than later. Rome took several centuries to die, but Roman businesses were afflicted by taxes and coin shaving, not a modern regulatory regime. It could be that the ongoing flood of regulations proves more destructive to the West than either fiscal or monetary policy.
The problem, Crews notes, is that
the combined cost of this "tax" never shows up anywhere in
the federal budget — or any other official report — even though
it is now bigger than individual and corporate income taxes
combined. As a result, "policymakers find it easier to impose
regulatory costs relative to undertaking more government spending,"
Crews notes, "because of the lack of disclosure and
accountability for regulatory costs."
Among the findings in the report:
On a per-household basis, federal regulatory costs average $14,974,
which is more than the typical household spends on just about
anything else. When regulatory costs are combined with federal
spending, Washington's share of the economy rises to an eye-popping
31%.
There are currently more than
3,000 rules in various stages of implementation at 63 federal
agencies; 191 of the rules are "economically significant,"
which means that they will impose more than $100 million in annual
compliance costs. Nearly 670 of these rules will affect small
businesses.
Last year, regulators issued 3,659
rules. That's equal to one new rule every 2 1/2 hours of every day,
or nearly two federal rules issued every business hour. In 2013,
there were 51 regulatory rules written for each law passed, which
the CEI says is a measure of how much power Congress has delegated
to unelected regulators.
This "Unconstitutionality
Index" — as the CEI calls it — averaged 34 under Obama,
nearly twice the average rate during the George W. Bush years. The
Obama administration has had 42% more "economically
significant" rules in the pipeline, on average, each year than
the Bush administration.
At the same time, Obama's
regulators have let state and local governments increasingly off the
hook, putting fewer regulations affecting them in the pipeline than
during the Bush or Clinton years. The CEI report includes various
recommendations for making regulatory costs more transparent and
readily available to the public.
The West's regulatory mania – for how else is it to be
described – is not based on any sort of economic science that we
know of. In fact, to be sure, economics is NOT a science, but it is
certainly a discipline rooted in certain fundamental truths, and
regulation would seem to contravene those truths.The main modern truth of economics is something called marginal utility, which is basically, among some other things, the idea that prices vary at the margins, especially, and that only the marketplace itself can determine prices.
The "discovery" of marginal utility (by an economist living in Austria in the 1850s) gave rise to both the "Austrian School" based on free-market principles and neo-classical economics.
Karl Marx and Thomas Malthus were both classical rather than neo-classical economists. Their models did not take into account the idea that marketplace competition could create variable pricing that would undo their static forecasts. Both Marx and Malthus made significant predictions subsequently proven wrong.
What emerges from an acceptance of neo-classical economics is the idea that forecasting itself is flawed and that no numeric analysis, no matter how complex, can accurately predict the future.
This is the main reason why Austrian economics is neither popular with nor popularized by the mainstream media and mainstream academia. Governments are run based on forecasts, and free-market economics clearly shows that accurate forecasting is not feasible.
Central banking provides forecasting every month about what the volume and price of money should be. But 100 years of history shows – via endless depressions and recessions – that these forecasts are often wrong.
Governments make laws and in the modern era these laws are increasingly buttressed by regulations, yet both laws and regulations are forecasts – imposed on society based on a legislative vision of necessary solutions. Again, it is free-market economics that explains why despite a torrent of legislative actions over decades throughout the West, living standards are dropping not rising.
Every law, every regulation, every forecast that is acted on within a context of government demands is what we call a price fix, mandating an action of some considerable expense to society and insisting that those actions are initiated. Yet it is accepted as a matter of course by both the media and academia that price fixing doesn't work.
This is a fundamental disconnect that exists at the heart of Western democracies.
How can neo-classical economics be accepted – as indeed it is throughout the West – and how can price-fixing be known as destructive while every part of the Western governing paradigm continues to pursue these obviously problematic acts?
Laws fix prices in ways that cannot be predicted. So do regulations. If the costs are great – and growing bigger – while the utility of imposing legislative solutions is impractical, why do Western governments continue down this path? And why does mainstream media not scrutinize what is going on in greater detail?
Of course, we know the answer to that. Regulatory efficiency is a bedrock dominant social theme, one that the globalist elite depends upon to help it reach its internationalist goals. No regulation ... and government begins to shrink; and if government loses power, then it loses value as a critical tool of manipulation.
From an investment standpoint, regulation is an increasingly critical component of any industrial endeavor. Depending on the regulatory environment, businesses can either expand successfully or wither and die.
When recommending investments and new ventures, the High Alert brain trust is careful to examine potential regulatory impacts. That's one reason to be involved in industries – like marijuana – that are relatively new and thus less encumbered and controlled by regulation as they emerge into the mainstream.
But the larger perspective is surely discouraging. Society – certainly US society – cannot continue long down this path. A critical mass of economic distortion must be reached sooner rather than later. Rome took several centuries to die, but Roman businesses were afflicted by taxes and coin shaving, not a modern regulatory regime. It could be that the ongoing flood of regulations proves more destructive to the West than either fiscal or monetary policy.
Conclusion
Perhaps a case can be made for regulation, or at least minimal regulation, but what is occurring now is neither logical nor defensible. The modern epidemic of regulation combined with taxation and monetary inflation (along with court-imposed corporatism) are reasons why the ascent of the Western socioeconomic model has been evidently curtailed and why, sooner or later, the West is headed for a fall.India now world's 3rd largest economy, behind just US, China
SummaryWorld Bank: India 'went from 10th largest economy in 2005 to 3rd largest in 2011'
India beats Japan to become world's third largest economy in terms of purchasing power partiy (PPP).
India is now the world's third largest economy in terms of purchasing power parity, ahead of Japan and behind the US and China which hold the top two spots. This was revealed by the 2011 round of the World Bank's International Comparison Program (ICP) released on Tuesday.
"The United States remained the world’s largest economy, but it was closely followed by China when measured using PPPs. India was now the world’s third largest economy, moving ahead of Japan," the report said. (Read report)
It highlighted the fact that the largest economies were not the richest, as shown in the ranking of GDP per capita. The middle-income economies with large economies also had large populations, setting the stage for continued growth, it added.
The report says India "went from the 10th largest economy in 2005 to the third largest in 2011.
Incidentally, the economies of Japan and the United Kingdom became smaller relative to the United States, while
Germany increased slightly and France and Italy remained the same.
The relative rankings of the three Asian economies—China, India, and Indonesia—to the United States doubled, while Brazil, Mexico, and Russia increased by one-third or more.
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