BoJ Disappoints! Nikkei Drops 500 Points From Earlier Highs
UPDATE: Nikkei futures now -500 from US day-session highs
In what must be quite a surprise to Goldman (as we discussed here), the BoJ has decided not to give in to the market’s demands:
*BOJ REFRAINS FROM EXPANDING J-REIT, ETF PURCHASES (expected lifting of cap)
*BOJ LEAVES FUNDING TERMS UNCHANGED AFTER JGB YIELD VOLATILITY (expected extension from 1Y to 2Y)
The market’s angry reaction… NKY -300 from US [...]
Trader alert: The U.S. dollar — and stocks — could plummet from here
CLICK ON CHART TO ENLARGE
For the majority of the time from 2003 to 2011, the U.S. Dollar and the S&P 500 pretty much moved in opposite directions (Low Correlation Pink Shading). For the prior ten years (1993 to 2003 Green shading) the opposite took place, Dollar and SPY were highly correlated.
Since Mid-2011, the US$ and SPY have had [...]
No saviour in sight as world credit cycle rolls over
This may be as good as it gets for the world economy. The HSBC index for the global business cycle hit a three-year high around Easter, and has since rolled over.
Any country that has failed to lock in a self-sustaining recovery by now must expect to pay the price for the failings of its policy establishment, and some risk a slide [...]
The Dying Dollar and the Rise of a New Currency Order
For years now, the collapse of the dollar has been in the cards. Recent developments show mounting pressure on the dollar’s reserve currency status. With a major international deflation going on, the threat of inflation through money printing is unreal. However, should the dollar’s reserve currency status end, the repatriation of trillions of petro- and eurodollars could lead to a [...]
Wow, it took over one day before the Fed came out to do damage control on Bernanke’s Congressional double speak Wednesday that set the markets on a correction.
Fed’s Bullard Wants Faster Inflation Before Tapering QE
“Before I am in favor of tapering I would like to see some assurance that inflation is going to move back towards target,” he said.
U.S inflation fell to a two-year low of 1.1 percent earlier this [...]
Is the coming financial collapse going to be inflationary or deflationary? Are we headed for rampant inflation or crippling deflation? This is a subject that is hotly debated by economists all over the country. Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation. Others point to all of the deflationary factors in our economy [...]
by Phoenix Capital Research
Just what is the Fed so scared of?
Today, the Fed’s favorite reporter, Jon Hilsenrath at the Wall Street Journal published an article completely refuting his own work from just two weeks ago.
If you’ll recall, two weeks ago, Hilsenrath wrote that the Fed was planning to taper its QE purchases before the end of the year.
Today, Hilsenrath wrote that when the Fed does taper its buying it won’t be “predictable.” [...]
Just got this very reliable financial intel.
Get ready to short Japanese equities and expect another real-estate bubble burst.
Christine Hughes, President and Chief Investment Strategist, discusses details of Japan’s radical monetary policy.
the key part of the video, for ease of viewing:
The USDJPY has is trying to break the 103 barrier again after the BoJ meeting and Cabinet Secretary Suga commented the “BoJ should continue to steadily strive to reach inflation targets [...]
In this episode of the Keiser Report, Max Keiser and Stacy Herbert examine stories about those who, using spoof trades, bogus securities and fictitious capital, steal real wealth and income. They discuss how it is that every benchmark index is rigged and introduce the concept of the ‘bonus benchmark.’ In the second half, Max talks to Dr. Michael Hudson, author of The Bubble and Beyond, about debt and wage deflation [...]
By Tyler Durden
Back in December we pointed out the patently obvious: in the absence of an external rebalancing mechanism, i.e., a free-floating currency, the only option for the bulk of the periphery to regain competitiveness was through ongoing wage collapse and persistent localized depression. Five months later, just as predicted, Europe is in a worse shape than ever before, not only in those non-core countries where wage deflation is accelerating, but the weakness has [...]
Hoarding Alternative Money & Reforming Banks
Argentina is going through the classic stages of economic collapse. The government seized all pensions. They are destroying everything that gives the people incentive to be a society that emerges from the cooperation of everyone. When government turns against its own people, even as the USA is currently doing, you end up with deflation insofar as the economy collapses and wages are not available, while hoarding [...]
Risk of “Deflation” is high and will surprise the majority!
CLICK ON CHART TO ENLARGE
In 2007, when stocks (S&P 500) and commodities(CRX Index/Copper) were peaking there was little talk about deflation from the media (inset chart point 1), around the globe. Results going forward…The majority was surprisedas S&P 500 fell 50% and Commodities fell further.
In 2009, after a large decline in stocks and commodities the talk of deflation was very high (inset [...]
Helicopter QE will never be reversed
from Ambrose Evans-Pritchard: Readers of the Daily Telegraph were right all along. Quantitative easing will never be reversed. It is not liquidity management as claimed so vehemently at the outset. It really is the same as printing money.
It would be better for central banks to put the money into railways, bridges, clean energy, smart grids, or whatever does most to regenerate the economy Photo: Alamy
Columbia Professor Michael [...]
By Barry Grey, Global Research
The World Bank issued its biannual Global Economic Prospects report Tuesday, sharply downgrading its forecast for economic growth from its previous report released last June. The Washington-based international lending agency projected an expansion of the world economy in 2013 of only 2.4 percent, down from its forecast six months ago of 3.0 percent.
The bank said the global gross domestic product (GDP) grew by 2.3 percent in 2012, downwardly [...]
The Federal Reserve has been trying with all its power to stoke inflation. This is not the stated mission and you will not hear this proclaimed over loud speakers but if actions speak louder than words, this is the policy they are following. Yet the Fed is picking winners and losers with their inflation targeting. The reason the CPI for example is not reflecting major changes is the massive wealth destruction that has occurred [...]
In this episode, Max Keiser and Stacy Herbert look at the shootout at the OK Bond Corral as sovereigns battle Wall Street — which in turn battles state pension funds — for the same piece of infinitely re-hypothecated garbage collateral. In the second half, Max Keiser talks to hedge fund manager and ‘Planet Ponzi’ author Mitch Feierstein about the bond market, central bank-induced deflation and the London property market.
By Andy Xie
BEIJING ( Caixin Online ) — Every time I come to Japan to attend a conference, I am reminded of what a depression looks like in the 21st century.
This time is no different: shops are not busy, restaurant owners wait anxiously outside for customers and are usually disappointed, empty taxi cabs roam the streets. Two decades after its property bubble began to deflate, [...]
Japan bankrupted even more… Japanese Economy Contracts at Fastest Pace Since Earthquake
Japanese Economy Contracts at Fastest Pace Since Earthquake
Japan’s economy shrank last quarter as exports tumbled and consumer spendingslumped, putting pressure on the central bank to add stimulus and hurting Prime MinisterYoshihiko Noda’s record as he prepares for elections.
Gross domestic product fell an annualized 3.5 percent, the most since the earthquake and tsunami in early 2011, Cabinet Office data showed today [...]
Over the past few weeks, there’s been a growing buzz about central banks playing a greater role in explicitly serving as funders of government.
The idea that people (journalists and Wall Streeters, mostly) have been talking about is the notion that central banks could buy government debt (as they do in quantitative easing) but then just rip up those bonds, and cancel the debt, with few consequences, except perhaps some inflation (which [...]
by Charles Hugh Smith from Of Two Minds
Narcissism, Consumerism And The End Of Growth
The Cultural Contradictions of Capitalism now include narcissistic consumerism and definancialization.
Today I’m going to tie together the major themes I have been discussing in the context of Japan being the bellwether of economic stagnation and social recession. The basic idea is that Japan offers a limited but still insightful experiment in what happens to advanced consumer-driven economies as [...]
“A hedge fund on the floor of our offices in New York actually started dancing around like little children shouting ‘QE3′ after the Bernanke press conference.”
This is a must read.
Guest post submitted by Chris Whalen.
QE3, Deflation And The Fed’s Money Illusion
The announcement last week by the Federal Open Market Committee that the central bank would initiate additional, open-ended purchases of residential mortgage backed securities (RMBS) was more than a little sad. Let us count [...]
The last few months have seen a rapid deterioration in economic newsflow. SocGen’s newsflow indicators, which capture sentiment regarding trends in the underlying economy (based on the balance of economic strength and weakness in newswire and newspaper articles) typically leads the economy by around three months. Currently, this intriguing indicator suggests a notable drop off in global industrial production – and furthermore, while Fed/ECB anticipation has dragged market-implied inflation [...]
As the S&P 500 makes new multi-year highs, the USD dumps, commodities surge, and AAPL just does what it does best; The Fed’s Dennis Lockhart has just ‘subtly’ announced the walking-back of expectations of QE3 happening anytime soon, via Bloomberg:
*LOCKHART SAYS `MONETARY POLICY IS NOT A PANACEA’
*LOCKHART SAYS ECONOMIC DATA HAVE BEEN `FIRM’ IN LAST MONTH
*LOCKHART SAYS HOUSING IS STABILIZING AND `ENCOURAGING’
*LOCKHART: MONTHLY UNEMPLOYMENT RISE SHOULDN’T BE EXAGGERATED
*LOCKHART SEES `MORE [...]
Richard Russell, author of Dow Theory Letters – the world’s longest-running daily investment letter – devoted a relatively large portion of his latest edition to gold’s role in the global financial system.
Russell, who has been bullish on gold for most of the past decade and encouraged his subscribers to invest in gold near the start of yellow metal’s bull market in 2001, reiterated his positive outlook in light of news [...]
Interview with Jim Puplava, by Jeff Clark, Casey Research
Jim Puplava has robust convictions….
The CEO of Financial Sense News Hour, Jim is a man you should listen to carefully if gold factors in your portfolio or if you are thinking about adding gold anytime soon.
In this interview, Jim talks about how the dollar affects gold prices.
He discusses whether we are moving into a phase of deflation or inflation and gives his views on what [...]
Loved this (via Calculated Risk):
“Sentiment turned yesterday on ECB President Mario Draghi’s “…The ECB is ready to do whatever it takes to preserve the euro. Believe me, it will be enough.” He went on to announce his plans to date Jennifer Lopez tonight, Kim Bassinger tomorrow, and win the decathlon gold next week.
If a central bank has to promise to preserve something, odds are high that it is already dead. This is [...]
King World News is continuing to receive extraordinary levels of interest in what has turned into a series of Michael Pento pieces. Today Pento reports more stunning news, “Last week the ECB reported that overnight deposits parked at the central bank plunged by the most on record, or €484 billion in just one session. It now seems my theory that banks would deploy their reserves was proven correct in a [...]
Many investors consider gold a safe haven that will shelter them from recessions, falling markets, and the depreciating value of currency, failing to realize that investing in gold at these levels is extremely risky. Over speculation, price increases, mass publicity and an abundance of “We Buy Gold” stores all point to trouble in the gold market says Yoni Jacobs, author of Gold Bubble: Profiting from Gold’s Impending Collapse. He believes this means one thing: a [...]
From Zero Hedge:
We have discussed at length the need for the equity market to be significantly lower in order for Bernanke to step in with his munificence.
Critically, this is less about the absolute level of the S&P 500 (though anyone expecting the Fed chairman to step in with the S&P 500 within a few percent of multi-year highs is dreaming) but, as Barry Knapp from Barclays notes – based on [...]
China is on the cusp of a deflationary vortex.
This was signalled late last year by the sharpest contraction in the (real) M1 money supply since modern records began. The hard data is now confirming the warnings.
Consumer prices have been falling for the last three months, producer prices have been falling for four months. This is not a food cost story. It is systemic.
“While an economy-wide generalized deflation is yet to [...]
July 4, 2012
Hold on to your socks, the part time hiring of employees will become the new normal. The biggest prohibitive hit against job creation is in full motion. The consequences from Obamacare place a drag on the economy that is undeniable. This mugging of small business will guarantee that the primary engine of employment will sputter and knock, as the federal government forces higher and higher taxes on [...]
Look around the world as ArabianMoney always does in the summer because the excessive heat of the Middle East drives us all to seek out cooler climates, and you very quickly realize this year that the main issue is deflation, not inflation.
Gas prices are falling with the oil price. Indeed, falling commodity prices are taking the pressure off input prices across the board.
The demand destruction of widespread economic contraction [...]