It looks like the collapse is at our doorstep knocking. With China, EU, UK, Japan etc. in full collapse mode. I am expecting to see major bank failures soon followed by bail-ins and extreme money printing later this year.
Think of this as 1996+/- in Japan. Seven years in after the Nikkei went kaput. The Japanese Central Bank apparatchik probably though the same. Not, and deflation still kicking their behind 17 yrs later.
Moral of the story is – If you save the Bankster you impoverish a sizeable percentage of the present population and you kneecap economic growth for the next generation.
I remember about 10 yrs ago hearing about “parasite singles” in Japan. About 4 yrs ago, I started hearing ” herbivore males”. All these are sign of an economically dead generation. A good majority of the Japanese kids coming of age since the Nikkei collapsed are member of this generation. They really have nothing to look forward, except to see their parents dead soon to collect what ever inheritance they might get.
As the Clint Eastwood character said in Gran Torino – No Job, No Car, No Girl.
One Eye on Earnings, the Other on Bonds
As earnings season kicks off in the coming week, traders will be keeping one eye on the bond market, wary that rising rates could sting stocks.
‘The Whole World Is Turning Japanese’
Japan’s decades of economic stagnation after pursuing a low interest rate policy should be a warning to all central banks, particularly the European Central Bank, according to Satyajit Das, a former banker and author of “Traders, Guns and Money”.
“The whole world is turning Japanese,” Das told CNBC on Thursday. “Everyone should familiarize themselves with the hit single from the eighties called ‘Turning Japanese.’”
The 1980s song by British band The Vapors is about youthful angst and turning into something you didn’t expect – a risk facing central banks around the world, Das said, as they ponder how to scale back stimulus programs and combat government deficits and debt.
“The whole world is going to go Japanese, because what Japan shows us is that if you have a large debt bubble which unwinds, it’s not that easy to get out of it,” he said. Japan has one of the largest debt piles in the world, topping 200 percent of GDP in 2012, built up through years of low interest rates and currency strength.
ONLY 47% OF ADULTS HAVE FULL-TIME JOB
Longest Stretch of 7.5%+ Unemployment on Record
Marc Faber – This Will End In Disaster
“They are not going to tighten monetary policies any time soon. They are in the driver’s seat in the sense that they will always find an excuse to print more.
They will say, ’OK we have to increase the purchases of assets because now the yield on Treasury bonds has gone up substantially, from less than 1.5% on the 10-Year note a year ago, to 2.68% as of today.’ So they will say, ‘That may damage the economy, so we have to buy more assets.’
And if they do that then the inflation rate may pick-up, and real wages may decline even more. Then they will say, ‘Well, we didn’t do enough because the population isn’t doing well.’ They will always find an excuse to print more. And as you said, it will end in disaster. There is no doubt about that.
Pettis on China, Europe, Japan: Bad News for Those Looking for Growth
Via email here is another update from Michael Pettis at China Financial Markets. What follows is from Michael Pettis.
- Europe is attempting to resolve domestic imbalances by forcing them onto their trade partners. This will end badly, especially for Germany.
- China’s new lending, exports, investment, housing starts and GDP growth all continued to slow in May. Many of the numbers came in well below market expectations.
- This is par for the course. Although we may from time to time get a “pop” in quarterly growth, the overall trend will be for growth expectations to follow actual growth numbers down for many years. China cannot get credit growth under control at anywhere near current GDP growth rates.
- Even though credit growth slowed more than expected, it is still extraordinarily high, especially for the amount of growth it is generating. Total social financing grew in May by 2.3% of GDP while GDP itself grew by around 0.6%.
- The IMF claims that China’s real fiscal deficit is around 10% of GDP. This limits Beijing ability to expand fiscally.
- Although overall unemployment seems stable, unemployment among university graduates continues to be very high. It is early to say but this might have social implications at some point.
Margin Calls Coming On US Too-Big-To-Fail Banks