Economy Update: China Slows, Europe Contracts, Global Trade Protectionism Surges, Central Banks Mull Pulling The Plug!!! Dennis Gartman: ‘These Are Very Scary Times’

World Bank Cuts Global Outlook as China Slows; Asian Stocks Fall

The World Bank cut its global growth forecast for this year after emerging markets from China to Brazil slowed more than projected, while budget cuts and slumping investor confidence deepened Europe’s contraction.

The world economy will expand 2.2 percent, less than a January forecast for 2.4 percent growth and slower than last year’s 2.3 percent, the bank said in a report released yesterday in Washington. It lowered its prediction for developing economies and sees the euro region’s gross domestic product shrinking 0.6 percent. In contrast, forecasts were raised for the U.S. and Japan, which was helped by fiscal and monetary stimulus.

“Hard data so far this year point to a global economy that is slowly getting back on its feet,” the Washington-based lender said in its twice-yearly report. “However, the recovery remains hesitant and uneven.”

‘These Are Very Scary Times’: Dennis Gartman


The results of today’s 30-year Treasury auction are out.


The highest yield at the auction was 3.355%, above the 3.324% “when-issued” level.

In other words, the auction “tailed,” indicating weak demand.

(The “tail” is the difference between the highest yield on the Treasuries during the auction and the expected high yield when the auction first gets started – the “when-issued” level.)

The bid-to-cover ratio, which measures the dollar amount of bids versus the dollar amount of bonds actually auctioned, fell to 2.47 from 2.53 at the last 30-year auction.

Primary dealers purchased 51.7% of the bonds issued at the auction.
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Global market sell-off over stimulus fears

Markets across the globe have tumbled as central banks mull pulling the plug on their extraordinary stimulus measures and the World Bank cut its outlook for global growth.

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Traders Better Get Used To The Market’s New Volatility Regime, And Fast

A run down of danger.


Global Trade Protectionism Surges To Post-Crisis Highs

World trade volume growth is languishing at a mere 1.3% YoY – a level only seen worse during the 2000/1 and 2008/9 global crises. Central banks have shot their wads to the point of no return. Governments have hit a peak-debt wall of fiscal irresponsibility. So what’s left in the great depression playbook… why protectionism of course. As Bloomberg’s Niraj Shah notes, global trade protectionism has surged to its highest since the financal crisis according to Global Trade Alert.


Global growth has collapsed…

Expert: Stock Market Nearing ‘Negative Reality’

FELIX ZULAUF: Japan Will Cause The Next Big Global Crisis

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Peter Morici: Banks Cooking Up New Financial Crisis

“Sentiment is more negative than the facts command,” said Blankfein. “And sentiment matters.”

What keeps him up at night?  Paralysis in the government, the European crisis, a dramatic pullback from China, are the biggest threats to U.S. economy. But some of these concerns are smaller than they were a year ago.

On “too big to fail” Blankfein said there is not political will to save banks and the mechanism on how best to protect the taxpayers and how to do as little violence as possible to the economy, is being debated within the government and within companies on Wall Street right now.


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