Perspectives on the global economic changes

panduranghari · Post by **panduranghari** » 25 Oct 2016 12:25

GShankar wrote: You did not exactly answer in so many (or few) words but seems like your example agrees with my interpretation. That consolidation is necessary when a big company does not want to organically grow (meaning too expensive/time consuming to do that) compared to an acquisition. And this means the market is either already saturated or very close to it.

Please correct me if I am wrong.

Not necessarily.
In semi conductor industry, there is consolidation and also buying out another company just to shut down there operations.
In healthcare industry, its to drive down the cost of doing business. Eg. running a dental clinic with 1 surgery costs x, running a surgery with 2 chairs does not cost 2x. Its x+y where y<x.
In gold mining industry, the majors buy out minors but they may not start digging until the expected price for gold will be substantially higher making it profitable.
In hedge fund industry, the Assets Under Management (AUM) is more important as it attracts more capital. When Lehmann went under, Goldman got a pick of good assets at Lehmann. The bad ones were flogged off to others.

Market gets saturated only when market makers rig the market. And its been rigged for a long time. What we are seeing is the final denouement.

Austin · Post by **Austin** » 25 Oct 2016 13:14

China’s Aggressive New Deal Makers: $199 Billion This Year and Counting

http://www.wsj.com/articles/chinas-aggr ... 1477348851

Austin · Post by **Austin** » 25 Oct 2016 14:13

David Stockman: Donald Trump's Right- Everything Rigged Against US Middle Class

Austin · Post by **Austin** » 25 Oct 2016 15:43

^^^ Went through the entire discussion there and Q&A from David to viewers ( starts at 30:00 )

1 ) He says down fall will be 40-50 % in Stock in coming crisis in US
2 ) For aam junta he says keep Cash and Gold Handy when crash comes, He mentions Gold is out of Central Bank contrl and will reach all time high much higher then it reached in 1950
3 ) He says China joining SDR is just a side show and he says China Economy is a Red Ponzi just waiting to collapse and some where he says IMF needs to be blamed to be part of Central Bank Ponzi

panduranghari · Post by **panduranghari** » 25 Oct 2016 16:08

Austin,
I do not think stock market will fall. I expect it to go from current 18000 to 40000 and beyond. Stockman is very smart and as he has been on both sides- government(as Reagans budget director) and wall street (with Solomon bros and Blackrock), we must heed what he says. But may be he is early about this one- i.e. stocks will fall. JMT.

Austin · Post by **Austin** » 25 Oct 2016 16:33

David is smart but he is certainly not infallible and his prognosis may not be very accurate .....but from 18K to 40K is a huge leap something we have not seen so far .......Imagine if BSE goes from 28k to 50K

Austin · Post by **Austin** » 29 Oct 2016 12:16

Carl Icahn Full Interview 16.10.17

Austin · Post by **Austin** » 30 Oct 2016 08:50

The Coming Bond Market Crash - An Interview with Eric Hadik

https://www.linkedin.com/pulse/coming-b ... as-tavares

panduranghari · Post by **panduranghari** » 31 Oct 2016 19:27

http://www.telegraph.co.uk/business/201 ... nd-rout-d/

Its going down fast.
LIBOR rising and TED spread is widening.

Austin · Post by **Austin** » 31 Oct 2016 20:54

^^ I dont know much about LIBOR rate but reading this from link

"The Libor rate is one of the few instruments left that still moves freely and is priced by market forces. It is effectively telling us that that the Fed is already two hikes behind the curve," said Steen Jakobsen from Saxo Bank.

"This is highly significant and is our number one concern. Our allocation model is now 100pc in cash. This is a warning signal for the market and it happens extremely rarely," he said.

So they seem to have moved money from Bond Market to Liquid fund which is 100 pc cash is what they mean I guess.

But besides making expensive to borrow in USD how will this impact the bond market and what is at stake here conservatively speaking the amount involved ? What can fed do to prevent this if at all ?

Neshant · Post by **Neshant** » 01 Nov 2016 09:35

Worthless garbage SDRs coming our way during the next collapse.

That according to Rickards - who has been saying the above for quite some time.
Hard to believe anyone will have faith in supposedly new & improved IMF issued toilet paper with national currencies being rendered worthless.

India should not ascribe to it. Its a system that cheats savers and India is a nation of savers. Even the poorest man wants to save.
Importing idiotic ideas of how the economy should function from slick talking banksters abroad will prove ruinous to the Indian economy. Stick to the fundamentals of letting the market decide interest rates and the value of the money instead of some fool sitting up in an ivory tower (aka central banker) who thinks he knows what's best.

Gyan · Post by **Gyan** » 01 Nov 2016 10:16

We must remember that bears are as dishonest as bulls and there is no honestly credit, for priests predicting doom. Having said that lots of net USD saving nations like GCC are turning into borrowers, which should have major repercussions on the market.

Anyway recession cannot be cured without increasing purchasing power of missile class. Either there has to crash or inflation through fiscal deficit funding.

As per Jhunjhunwala, USA is gearing up for 2.5 Trillion infrastructure spending.

panduranghari · Post by **panduranghari** » 01 Nov 2016 21:00

Austin,
LIBOR is global cost of money. In USA its called the OIS.
TED spread is the measure of funding stress. Its the ratio of Eurodollar rates in London to the 3 month UST futures.

Deflation is going to bite hard. Then we will go parabolic in the M2. Gold is going up. Get some while its still cheap.

Neshant · Post by **Neshant** » 02 Nov 2016 02:33

Ever since revelations of Libor rigging hit the headlines, everyone is wary of these bench marks and many don't trust them.
Its all up to lenders now to do their due diligence before they part with their money.
Ditto for so called rating agencies which are all political entities and in many cases criminal entities.

Austin · Post by **Austin** » 02 Nov 2016 17:02

Tons of Black Swans could Cause Coming Market Crash - David Stockman's Dire Statement

Austin · Post by **Austin** » 04 Nov 2016 12:32

David Stockman @DA_Stockman https://twitter.com/DA_Stockman/status/ ... 7006087168

Larry Summers recently floated the idea of Fed buying stocks to buoy markets. See the @DailyReckoning for my take:

The Establishment’s Been Unmasked

Harvard windbag and former Treasury Secretary Larry Summers recently floated the idea that the Fed should start buying common stocks to buoy the markets. What does that say about the state of the casino?

It means the end is probably near.

That is an act of desperation. That is an idea that no economist worth his salt even 20 years ago would have contemplated for one moment. What in the world would buying stocks do except inflate the value of stocks?

This is about as far from the Keynesian catechism as you can get. As bad as Keynes himself was about so many things, he never imagined half the things that are seriously being discussed today.

So our monetary rulers have pursued policies that have led to a dead end and the looming crackup of bubble finance. It started with the Maestro, Alan Greenspan, in the 1990s. But it’s become a runaway freight train since the Panic of 2008.

Now our monetary masters are flailing about desperately trying to explain why they weren’t wrong and why their policies will work if only another bold extension of that policy were to be embraced at the present moment. They won’t. It’s all desperate nonsense. And that’s the main reason I believe we’re going to have a crackup.

The word that comes to mind to describe all this is “madness.” Today’s policy is the very opposite of what monetary policy attempted to do in the early ‘80s when the Reagan era began. Granted, the circumstances were different then, for different reasons. Inflation was the bugaboo then. Today, Yellen and her fellow dunces in Europe and Japan can’t even generate the 2% inflation they falsely think holds the key to economic prosperity.

But in those days we had people like Paul Volcker, who didn’t think the central bank was the crucial agent of capitalist prosperity. Nor did he believe he had to supervise and control every aspect of the market economy. He had a far more modest conception of his role. That is to say, a far more realistic conception of his role.

Volcker jacked rates to a peak of 20% in June 1981 because inflation had gotten way out of control due to the excess monetary stimulus of the ‘70s. The monetary machinery had gone into overdrive after Nixon closed the gold window in 1971 and Imperial City discovered the unlimited freedom of a printing press unshackled to gold.

Volcker sought to correct that error. So doing, he paved the way for conventional capitalism to heal itself and restart the process of growth, investment and wealth creation.

But the mentality we’re saddled with today is altogether different. Janet Yellen and her merry band on the Federal Open Market Committee (FOMC) think they’re the indispensable twelve. Without them at the dials constantly watching the incoming data and taking appropriate action, the whole economy will go to seed. Rubbish!

That is a foreign conception to the original purpose of central banking. But it’s a measure of how far we’ve waded into the monetary swamps. And none is deeper than the swamp located at the Eccles Building. As I say in my book, Trumped!, it’s created a “mutant capitalism” that really has no historical precedent. Nor does it have any grounding in traditional economic theory. It’s the stuff of cranks.

As I’ve said before, they’re just making it up as they go along. And it’s getting crazier by the day. Larry Summers’ jabberwocky about the Fed buying stocks is just the latest example.

With a properly functioning media, folks like Summers would have been laughed out of town years ago. But unfortunately, the mainstream media is simply the financial establishment’s broadcasting arm.

Make no mistake, the mainstream financial press is Wall Street’s bullhorn. Nothing else matters as long as stocks rise, come hell or high water. And it’s fully on board with the idea that there’s nothing wrong with eight years of “unconventional monetary policy.”

Of course, Washington and the Beltway politicians love that same unconventional monetary policy since it’s kept the yield on the massive debt that they’ve created so low they can pretend it’s practically free.

So you have the worst of both worlds in what I call the Acela corridor. Wall Street and its media toadies applaud this policy because it keeps stocks artificially elevated. And Washington applauds it because it lets them off the hook for the massive fiscal crisis they’ve generated.

And let’s face it, folks: Nowhere is the anti-Trump more evident than the establishment media. The fact is, it’s attacked the Trump candidacy in a way I’ve never seen before.

It’s nothing short of a media jihad, or an assassination campaign. Nothing is too trivial to use as an indictment of Trump’s character, his temperament or his inexperience. This is extraordinary in its intensity, and I don’t think we’ve seen the end of it yet.

In its war on Trump, the so-called liberal press has become downright McCarthyite in its baiting of Putin and its griping about supposed Russian hacking. They’re trying to divert the American people’s attention away from the substance of the leaks. They’re shooting the messenger. Of course, there’s no real proof Russia is the messenger at all. The press is simply parroting the hysteria wafting out of Imperial City’s national security catacombs.

Imperial City and its media errand boys are trying to make Putin out to be another Hitler. Come on! The threat from Russia is thoroughly exaggerated, if it exists at all. But the national security racket needs an enemy to justify its steep price tag.
China Threatens the Dollar Standard?

As I said, all this diversionary talk about Russia is to simply defend the bipartisan status quo against the threat of outsiders and disruptors and people who haven’t been schooled in the fundamental rules of Washington.

Needless to say, the Republican establishment is a major voice in the anti-Trump chorus.

When it comes to the political establishment, there’s only one real party — the Washington party. Its sole purpose is to enrich itself and aggrandize its power. It’s about the establishment squeezing the system for every dime, holding power and perpetuating the regime. I don’t know any other way to explain it.

But the laws of economics will not remain silent forever. It’s only a matter of time before the fantasies of the Welfare/Warfare state ends in a harsh and unfortunate way.

And the “deplorables” in Flyover America can sense it coming. That’s why we have a Donald Trump. The American people have completely and utterly lost faith in the establishment and its media.

Now, it’s not so much that the program Trump put forth is compelling. In fact, his program is hard to discern. It’s more sound-bytes and slogans that seem to change from day to day.

And Trump’s no ideological conservative. He’s not going to start rattling off passages from the Federalist Papers or quoting William F. Buckley.

The reason the public is responding is because he’s saying, “I’m not part of that establishment. I’ve not been there for 30 years drinking the Kool-Aid. I’m not part of the rigged game. No one has paid me off and I’m not part of this pay-to-play syndrome that has enveloped Washington.”

That message, if inarticulately delivered at times, is why there’s an insurrection unfolding and Trump has become the vehicle for its expression.

But let’s not forget, Bernie Sanders was also a vehicle for its expression. If it weren’t for behind-the-scenes scheming within the Democratic National Committee, Bernie Sanders probably would have gotten the Democratic nomination.

The rise of the anti-establishment candidates is the American people’s way of saying, “we’ve had enough.” It’s possible a percentage of Bernie Sanders voters, sick of Hillary, could respond to Trump’s message at the polls next week. That, of course, shouldn’t happen in a rational political universe because Sanders is about as left as you can get. Trump is a far-right zealot in comparison.

Whatever happens, and even if Hillary wins the election, the jig is up for the party establishments and their enablers in the mainstream press. The mask has finally been ripped off, and the American people are seeing the monstrous face beneath.

And there’s no putting it back on.

Regards,

David Stockman
for The Daily Reckoning

panduranghari · Post by **panduranghari** » 04 Nov 2016 14:16

Gyan saar,
Your answer about fiscal policy is there in the Stockmans rant. Buying stocks is the fiscal policy that will be permitted and adopted.

But why only stocks? Why not buy all tier 1 , 2 and 3 assets.

Austin · Post by **Austin** » 04 Nov 2016 22:36

For our friends in US , No matter who wins but.......

http://video.cnbc.com/gallery/?video=3000565081

Austin · Post by **Austin** » 04 Nov 2016 22:47

^^ I wonder how folks like David and others remember so much of statistics off their head , They can micro analyse so much of data and yet have the big picture going for them....so much of charts ...its crazy to even read one of those charts

Austin · Post by **Austin** » 09 Nov 2016 14:22

David Stockman will be a happy man today

David Stockman: Hillary Will Be a Disaster as President
http://www.bloomberg.com/politics/video ... -president

David Stockman warns both Trump and Clinton could lead to 25% sell-off
http://www.cnbc.com/2016/11/04/david-st ... l-off.html

Austin · Post by **Austin** » 10 Nov 2016 12:46

Blame the Shrinking Toblerone on the Expanding Money Supply

Austin · Post by **Austin** » 10 Nov 2016 12:49

Making America Great Again will be much harder than voters think

Austin · Post by **Austin** » 11 Nov 2016 15:10

Jim Rickards: The Road To Ruin

panduranghari · Post by **panduranghari** » 11 Nov 2016 17:38

Austin · Post by **Austin** » 12 Nov 2016 10:17

panduranghari wrote:

Karma catches up

panduranghari · Post by **panduranghari** » 12 Nov 2016 13:41

Not so soon Austin saar. Its a long way down for the west. They really do not know how far they have to fall. Neither do we know. BUt we can only guess. I am not be facetious.

https://www.greatagain.gov/policy/trans ... cture.html

550b$ FOR infrastructure. Assuming all the regulatory things are done, 2018 is the earliest we can see that spending happen.

But before 2018, there is this to contend with.

Austin · Post by **Austin** » 12 Nov 2016 17:04

As long as they are on downward trajectory its a good thing for every one , The world can leave in peace and mind its own business while they can mind their own.

I will check that video

Austin · Post by **Austin** » 12 Nov 2016 17:34

David Stockman: National debt is ticking time bomb

Austin · Post by **Austin** » 12 Nov 2016 18:47

https://app.hedgeye.com/insights/55325- ... -portfolio

Jim Rickards Q&A

“HOW THE HELL DO I PROTECT MYSELF FROM THE COMING CRASH?”

That was just one of dozens of questions concerned viewers asked investor and bestselling author Jim Rickards during our recent live Q&A conversation hosted by Hedgeye CEO Keith McCullough.

This was the iconoclastic Rickards' latest visit into the HedgeyeTV studio. On this occasion, he came to discuss growing market risks covered in his disconcerting new book The Road to Ruin. In it, he lays out a scenario where regulators, lawmakers, and central bankers have quietly been building the authority to enact asset freezes, close financial market exchanges, and confiscate assets to deal with the coming financial crisis.

Agree or disagree, he stitches together a compelling narrative. Our viewers also wanted to know how to structure their portfolios to protect themselves against the coming carnage.

Here’s his advice:

“Set your individual home equity and business equity to one side,” Rickards says. Think of the rest as your investable assets. “To start, I’d put 10% of investable assets in gold,” he says, but not some synthetic ownership of gold through ETFs. In other words, own the real thing—actual physical gold.

Importantly he added, make sure to put it in safe non-bank storage. “Do not keep it in a bank. Because when you want your gold, most of the banks are going to be closed,” he says.

The other reason to own gold is (contrary to popular belief), it performs well in a deflationary environment. “During the greatest period of sustained deflation in American history, 1927 to 1933, prices fell 50% and gold went up 75%,” Rickards says.

The remaining 90% of allocation assets Rickards recommends is spread among metals like silver, fine art, land, and private equity/venture capital investments where he “knows the entrepreneur.”

Austin · Post by **Austin** » 12 Nov 2016 20:10

Rickards: Here’s How to ‘Crash-Proof’ Your Portfolio

Austin · Post by **Austin** » 12 Nov 2016 20:12

Jim Grant: "The Forgotten Depression of 1921: The Crash That Cured Itself" | Talks at Google

Austin · Post by **Austin** » 13 Nov 2016 10:19

https://www.imf.org/external/pubs/ft/we ... orept.aspx

Austin · Post by **Austin** » 14 Nov 2016 10:35

Ex-Fed Chairman Greenspan sees sluggish growth ahead, with signs of inflation

Former Federal Reserve Chairman Alan Greenspan told CNBC on Thursday the political structure has been in chaos for years, and fixing the economy will take tough political judgments.

"I think we're in a period, because of fiscal reasons, for a sluggish economic growth rate for a while, but superimposed on that are very early signs of a pickup in inflation," Greenspan said on "Squawk Box." "My concern now is actually stagflation."

"That pickup in inflation is going to move profit margins up temporarily. But it's a false dawn," he said.

Greenspan's concerns were in sharp contrast to the views of billionaire investor Stanley Druckenmiller, who told "Squawk Box" in an earlier interview Thursday he's "quite, quite optimistic" about the U.S. economy following the election of Donald Trump.

Fiscal policy, which has been gridlocked for years in Washington, needs to be "one, two, and three" on the list of reforms to jump-start the economy, said Greenspan. The emphasis on the Fed's monetary policy should be fourth on the list, he added.The soaring costs of entitlement programs, including Social Security and Medicare, must be reined in, said Greenspan. "If we don't bring that under control, everything else we're doing is irrelevant."

Greenspan also said he'd "love to see Dodd-Frank disappear." He called the regulations that were designed to reduce banking risk in the wake of the 2008 financial crisis a "disastrous mistake."

The 90-year-old economist led the Federal Reserve for 19 years under four presidents, from Ronald Reagan through George W. Bush.

Austin · Post by **Austin** » 15 Nov 2016 15:43

Mike Maloney: DEFLATION FIRST! With Max Keiser

Austin · Post by **Austin** » 16 Nov 2016 17:41

All The Money Obama Borrowed From Taxpayers, In One Chart

The total federal debt remained fairly flat, under $6 trillion, through 2001, but nearly doubled to more than $10 trillion by the end of former President George W. Bush’s two terms.Under Obama, the total debt nearly doubled again, ending 2016 at more than $19.5 trillion, according to an annual audit of the U.S. Treasury’s Bureau of Fiscal Services.

Read more: http://dailycaller.com/2016/11/11/all-t ... z4QAlL9naT

Austin · Post by **Austin** » 16 Nov 2016 23:51

VIDEO: Jim Rickards Describes Coming Shut Down of US Financial System

Jim Rickards,the chief global strategist at West Shore Group, appeared on Bloomberg Markets to discuss the next financial crisis. Rickards said he sees next US downturn approaching a tipping point soon. However, the Federal Reserve’s response to restoring financial solvency will be much different because there’s no place left to go with monetary policy.

“The next time, they’re not going to print the money because they’re tapped out,” he states. “They’re going to lock down the system.” In a move Rickards refers to at the “bail in, lock down” plan, large sections of the financial sector will be deactivated to avoid bank runs and complete collapse. Rickards describes some of the more likely scenarios:

“Money market funds will suspend redemptions, bank ATMs can be reprogrammed to give you $300 per day for gas and groceries; they can selectively shut down the banks. We saw it in Greece. We saw it in Cyprus; we’re seeing it today in India. The banks are closing. They’re out of cash.”'

Austin · Post by **Austin** » 17 Nov 2016 14:51

Rickards: Financial Crisis Coming Soon, Will Be Different

http://www.bloomberg.com/news/videos/20 ... -different

panduranghari · Post by **panduranghari** » 17 Nov 2016 19:08

Austin wrote:
The remaining 90% of allocation assets Rickards recommends is spread among metals like silver, fine art, land, and private equity/venture capital investments where he “knows the entrepreneur.”

Why? Do central banks hold Silver? No.

Fine art? No.

Land? except Federal reserve of US, no one else does. Even this is because they monetised Fannie and Freddie's debts.

Private equity? You got to f***ing kiddin' me. Except direct ownership of a business, all PE is doing to be based on the valuation afforded by the $. In Argentina, in 2001- the stock market trebeled. The money supply probably quintupeled (not sure exactly), while monthly inflation was between 4% to 10%. So how will PE maintain equity without direct business ownership?

Of course he wants to sell his book to those who are not 'preppers'!

Austin · Post by **Austin** » 17 Nov 2016 20:12

panduranghari wrote:
Austin wrote:
The remaining 90% of allocation assets Rickards recommends is spread among metals like silver, fine art, land, and private equity/venture capital investments where he “knows the entrepreneur.”
Why? Do central banks hold Silver? No.

Fine art? No.

Land? except Federal reserve of US, no one else does. Even this is because they monetised Fannie and Freddie's debts.

Private equity? You got to f***ing kiddin' me. Except direct ownership of a business, all PE is doing to be based on the valuation afforded by the $. In Argentina, in 2001- the stock market trebeled. The money supply probably quintupeled (not sure exactly), while monthly inflation was between 4% to 10%. So how will PE maintain equity without direct business ownership?

Of course he wants to sell his book to those who are not 'preppers'!

Panduranghari, what would you recommend?

panduranghari · Post by **panduranghari** » 18 Nov 2016 00:41

No advise saar. If you are in employment, start a business on the side. It will work in the new normal. I hope this works for me.