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The coupon on the nation's $13.22 trillion debt averages 1.88 percent with an average maturity of 5.4 years. THEREFORE the following chart is EXTREMELY important in understanding what is going on in Bernanke;s head. REMEMBERr: The Fed's Raison D'Etre is to manage its Private Owners financing of the Governments Debt. Employment, Inflation and Price Stability are only credit parameters! |
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EFSF - Downgraded to AA+ EFSF Downgraded To AA+, Or French Fitch Flunks EFSF Following France Flub 07-15-13 Zero Hedge Prompted by their FrAAAnce downgrade to AA+, French-owned Fitch has downgraded Europe's last best promise/hope - the EFSF - from AAA to AA+... but the crisis is still behind us - we are assure by such truth-sayers as Juncker, Barroso, and Merkel (pre-elections). Fitch Ratings-London-15 July 2013: Fitch Ratings has downgraded the European Financial Stability Facility's (EFSF) guaranteed and long-term debt Long-term rating to 'AA+' from 'AAA'. The EFSF's short-term (less than 12 months contractual maturity) guaranteed debt instruments' Short-term rating has been affirmed at 'F1+'. KEY RATING DRIVERS High Weight The rating actions were prompted by Fitch's downgrade of France's Long-term Issuer Default Ratings (IDRs) to 'AA+'/Stable and the affirmation of its Short-term rating at 'F1+' on 12 July 2013. EFSF's ratings rely on the irrevocable and unconditional guarantees and over-guarantees provided by euro areas member states (EAMS). These commitments are governed by an international agreement dated in June 2012 by the 17 EAMS - the EFSF Framework Agreement (FA) - and by a Deed of Guarantee. The downgrade of France's IDR had a high weight in Fitch's rating actions. The original version of the FA ensured that all payments due on EFSF debt are covered by guarantees provided by EAMS, pro-rata based on their contribution key in the European Central Bank, which could be extended to 120% of their initial amount. Subsequent amendments to the FA and Deed of Guarantee, applicable to all debt issued since October 2011, reduced the credit enhancement through cash buffers and extended the percentage of over-guarantee percentage to 165%. Following the downgrade of France's IDR, the EFSF's long-term debt issues are not fully covered by 'AAA' guarantees and over-guarantees and, for debt issued before October 2011, by the cash reserve. However, short-term debt issues remain entirely covered by guarantees and over-guarantees issued by EAMS rated 'F1+'. RATING SENSITIVITIES As of 12 July 2013, 100% of the long-term debt issued by the EFSF is covered by guarantees and over-guarantees rated 'AA+' and 'AAA'. In the event that one or more of the 'AAA' and 'AA+' guarantors, namely Germany (AAA/Stable), France (AA+/Stable), Netherlands (AAA/Negative), Austria (AAA/Stable), Finland (AAA/Stable), and Luxembourg (AAA/Stable), are downgraded below 'AA+', and if the coverage by 'AA+' guarantees falls below 100%, Fitch would also review the Long-Term rating assigned to EFSF debt issues. KEY ASSUMPTIONS Fitch assumes there will be progress in deepening fiscal and financial integration at the eurozone level in line with commitments by euro area policy makers. Fitch also assumes that the risk of fragmentation of the eurozone remains low. |
07-15-13 | EU | 5- Sovereign Debt Crisis |
FRANCE - Loses its Coveted and NEEDED AAA Rating French-Owned Fitch Downgrades FrAAAnce To AA+ 07-12-13 Zero Hedge On the even of Bastille Weekend and the 100th anniversary of the Tour de France, you know it must be bad when the French-company-owned ratings agency Fitch is forced to remove its AAA rating from France. Key drivers include Debt-to-GDP projections rising and substantially weaker economic output and forecasts. Fitch Ratings-London-12 July 2013: Fitch Ratings has downgraded France's Long-term foreign and local currency Issuer Default Ratings (IDR) to 'AA+' from 'AAA'. The Outlook is Stable. At the same time, the agency has affirmed France's Short-term foreign currency IDR at 'F1+' and the Country Ceiling at 'AAA'. - Fitch judges financing risk to be very low reflecting an average debt maturity of seven years, low borrowing costs and strong financing flexibility underpinned by its status as a large benchmark eurozone sovereign issuer. |
07-16-13 | FRANCE | 5- Sovereign Debt Crisis |
SPAIN - Clear Signs of Desperation from a Growing Collateral Contagion Spanish Banks Petition To Convert Historical Losses Into Bank Capital 07-12-13 Zero Hedge In what has to be the most insane level of desperation, the Spanish banking system is lobbying to turn its deferred tax 'assets' into fungible capital to meet new stricter Basel III requirements. In other words, the Spanish banks believe that capitalizing historical losses provides a fungible 'stash' of capital against future losses... Following this morning's round of incredulity from the Spaniards, we have no words... Via Reuters,
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07-16-13 | SPAIN | 4- EU Banking Crisis |
SPREADS - Widen in Peripherals and Significantly in Portugal and Greece European Peripheral Bonds Plunge Most In A Year As Portugal Risk Flares 07-12-13 Zero Hedge Following a handsome bounce driven by Draghi, Carney, and various Fed officials promising moar, peripheral European bonds and stocks are having a bad day (and week). Greece, Portugal, Spain, and Italy are all ending the week lower (after solid performance mid-week) with Germany's DAX seeing the benefits of a rotation from high-beta momo with a 5.1% rise on the week (the best week in 20 months!). Safe-haven flows dominated in bonds; Bunds rallied slightly more than Treasuries on the week but once again Peripheral nations collapsed. Spanish bond spreads jumped the most in a year. Italy was notably weak, but Portugal has seen spreads jump 28% in the last 2 weeks (the worst in over 3 years!). EURUSD had its best week in 5 weeks - and despite the peripheral collapse, Europe's VIX had its best (drop) week in 4 months ending at 19%. A huge divergence in Europe this week... (seems evident that Spain, Portugal, and Italy are being traded as one entity...) but bonds were the big news... (in percentage terms, Portugal's move was the owrst in 37 months) Meanwhile, in Greece, the stock-market has dropped 7 of the 8 weeks and is dramatically underperforming the supposed reality that the bond market represents... Charts: Bloomberg |
07-16-13 | EU | 4- EU Banking Crisis |
PORTUGAL - Presidential Warning Spikes Yields To 8 Months Highs Portugal's Presidential Warning Spikes Yields To 8 Months Highs 07-12-13 Zero Hedge UPDATE: 5Y now +126bps (biggest jump in 19 months - snce the record highs) and rest of Europe is catching their systemic risk flu Bond Spreads... Stocks red in the periphery now... Amid all the fun and games of the last few days that have seen everyone buy everything everywhere, we noted that the President of Portugal has 'warned' his politicians that if they don't find a coalition solution in a "very short period" then he will call early elections (throwing the Troika-imposed austerity program into shambles). It seems the 'time-bomb' was on a long fuse - thanks to Bernanke - and the reaction is very evident today as Portuguese bonds implode. Spreads are 76bps wider on the day, breaking above 600bps for the first time in 8 months. The 5Y yield on Portuguese debt is now at 7.5% (up 109bps today!) - and yet still they discuss the expectation of coming to market soon for new issuance. Europe remains very un-fixed and every now and again, when the domestic buyers are overwhelmed by some real liquidity, we get a glimpse.
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07-16-13 | PORTUGAL | 4- EU Banking Crisis |
SPAIN - The Government's 'Bad Bank' Scam Spanish "Bad Bank" Fairy Tales 07-12-13 Zero Hedge Submitted by Mark J. Grant, author of Out of the Box, The Lords of Chaos are |
07-16-13 | SPAIN | 4- EU Banking Crisis |
The Asian Giant Stampeding into Gold 07-10-13 Frank Holmes CEO and Chief Investment Officer U.S. Global Investors I recently discussed how traders were stampeding out of gold as a result of rising interest rates and the threat of evaporating monetary fluid that was lubricating markets. Hovering around $1,200 at the beginning of July, the gold price has completely disconnected from the precious metal's fundamentals, in my opinion. Prices have fallen too far out of fear, but the drivers for gold are still in place. My friend and highly respected analyst, Gregory Weldon, highlighted an important point about rising rates in the U.S. As interest rates rise, debt will be rolled over at a higher rate, making the burden even greater than it already is. This suggests a likely tipping point for Treasuries. Will the Federal Reserve suppress yields at that "line in the sand?" In this environment, gold should remain attractive. However, as the West flees the precious metal, another set of gold buyers has come forward with the aim to preserve wealth. Take a look at the chart below which shows total gold production compared to the gold deliveries on the COMEX and the Shanghai Gold Exchange. In May, gold imports into the Asian giant rose to the second-highest level ever. While mining production is around 1,134 tons so far this year, gold delivery on the Shanghai Gold Exchange is 918 tons. This is strikingly in contrast to the gold delivery on the COMEX, which stands at only 103 tons year-to-date as of the end of May. In fact, this year's demand is so significant that the physical gold delivered on the Shanghai Gold Exchange through May is almost all of the official gold reserves in China! As George Topping of Stifel Nicolaus puts it, "Annualizing 2013 year-to-date figures, China's imports would be equivalent to 50 percent of [world] mine production."China may be devouring even more of the supply in the future if the price of gold remains subdued. I've been talking with several gold company executives, who tell me they are seeing squeezed margins because of lower grade finds, as well as governments raising taxes or increasing royalty rates. The top priority for these miners today is cost control, focusing their efforts on viable projects that have all-in costs of less than $1,000 per ounce of gold. If spending is too expensive, exploration is cut and production is halted. This is an extremely conservative amount, as some gold mining projects in certain countries come in significantly higher. The CEO of Gold Fields recently indicated that the average all-in cost in Africa is $1,500! This is a similar phenomenon to the supply of natural gas recently. When there were huge discoveries in the commodity, companies immediately halted drilling. There's a notable difference in drilling gas versus mining gold, though: The natural gas cycle is shorter and measured in months, so there can be a relatively quick recovery in supply. When gold companies cut production, the restart cycle can take decades. To me, these supply and demand drivers point to a sustained higher gold price. |
07-16-13 | GOLD CHINA |
23 - US Reserve Currency |
A PARAMILITARY POLICE - Tools of Statism (i.e. German 'Brownshirts' & Gestapo) The Psychotic Militarization of Law Enforcement 07-15-13 BATR.org How did it ever come down to abandoning peace keeping and accepting law enforcement by any means? Even the New York Times expresses alarm in, When the Police Go Military.
World Net Daily offers a sad chronicle in the essay, The growing militarization of U.S. police.
John W. Whitehead writes in the Huffington Post that "it appears to have less to do with increases in violent crime and more to do with law enforcement bureaucracy and a police state mentality."
Mr. Whitehead is correct as usual. Unfortunately, few other constitutional conservatives seem to have the courage to criticize the thin blue line of establishment regulators. In a rare moment of real civil liberties concern, the ACLU in The Militarization of Policing in America, initiates a worthwhile project.
One of the "so called" unintended consequences of the Iraq and Afghanistan wars is the intentional indoctrination of troops into the culture of excessive force, citizen combatant threats and indiscriminate brutality. The suppression of common law natural rights is the ultimate causality of this deranged and profane mind control. The study Can a Veteran go into Law Enforcement after a PTSD Diagnosis?, inquiry provides a useful comparison chart of several police agencies. The summary concludes that several agencies stated that they had hired individuals with histories of PTSD and most agencies did not have specific protocols for evaluating PTSD.If military training becomes instinctive and reactive, treating civilians as expected terrorists, why would society presume that stateside transition into a police academy course will purge the damaging traits of urban warfare? Behind the curtain of "public safety" the real controllers adopt and practice their perverse version of, The Psychopathic Influence, that dominates the domestic police mentality.Often candidates with such a Napoleonic complex, demonstrate that they really are "little men", when it comes to their desire to become goons. The Police Are Paramilitary Thugs, makes a valid point. The destructive role of federal involvement in local police functions is discussed in How Cops Became Soldiers: An Interview with Police Militarization Expert Radley Balko. How did 9/11 alter the domestic relationship between the military and police? The predictable consequences of the dominance from DC, is that the district of criminals impose a system that inevitably results in Botched Paramilitary Police Raids. An interactive map of botched SWAT and paramilitary police raids, released in conjunction with the Cato policy paper "Overkill: The Rise of Paramilitary Police Raids," by Radley Balko, illustrates his contention. "To Protect and Serve" is now an euphemism for breaking heads. Police Thugs Claim They’re Here to "Serve" wants you to believe that "police are basically the same all over the world: they describe their role of carrying out the force and coercion required by those wanting to control others as being a role of "serving the people." Those who are at the receiving end of the force and coercion are usually submissive and question nothing." Tell that to Adam Kokesh. The "Code of Silence" enables The Militarization of American Police, to blow smoke on a gullible public. Accountability and recourse is a myth. The SWAT system whacks the public as if they were nuisance flies. The psychotic statists that have no problem with the militarization of law enforcement are enemies of the people. How far has this country fallen . . . Listen to the fateful words of the nature of the police by the original Godfather of the Chicago Gestapo. The demented and mentally deranged oligarchy, who is at war with the American public, is the true terrorist. Police need to examine, recite and act upon the Oath Keepers - Declaration Of Orders We Will Not Obey. SARTRE – July 14, 2021 - See more at: http://batr.org/gulag/071413.html#sthash.yvki1Pgf.dpuf
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07-15-13 | THESIS | MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - July 14th - July 20th |
RISK REVERSAL | 1 | ||
JAPAN - DEBT DEFLATION | 2 | ||
JAPAN - Structural Problems a "Canary" for Western Developed Economies ‘Abenomics’ isn’t doing enough to fix Japan 07-15-13 Satyajit Das, MarketWatch Government, bankers get ‘D’ for debt and demographics Much optimism surrounds “Abenomics,” the efforts of Japanese Prime Minister Shinzo Abe to lift Japan from the maw of deflation. But Abenomics doesn’t go far enough to address Japan’s two major problems: debt and demographics. Japan is one of the world’s most heavily indebted developed countries. Its total debt to GDP tops 500%, compared to the U.S.’s 370%. Japanese gross sovereign debt is around 240% of GDP, while its net debt is around 135%, substantially higher than most developed countries. For the fiscal year ended March 2013, total government spending was 124.5 trillion yen (26.1% of GDP) against government revenue of 59.2 trillion yen (12.5% of GDP). The government borrowed to finance 52% of its spending. Prime Minister Abe’s program is likely to lead to further deterioration in public finances. Unless nominal GDP growth increases dramatically without an increase in Japanese government bond (JGB) rates, Japan’s debt will increase. To stabilize debt levels, Japan would need to move to a structural surplus (budget deficit before interest payments on government debt) of 3%-4%, compared to a current deficit of around 8%. Given the lack of growth and deteriorating demographic profile, the required tax increases or spending cuts may not be feasible. There are proposals for an increase in consumption taxes, conditional on an improvement in economic activity. But the government is also looking at corporate tax cuts, which would reduce the revenue impact. Even if such policy measures were to be taken, the resulting potential contraction in economy activity would drive debt higher.
will increasingly make it more difficult for the government to finance spending domestically, at least at current low rates. Forecast current account deficits will complicate the government’s financing task. Japan’s large merchandise trade surplus has shrunk and will remain under pressure reflecting
With the passage of time and in absence of a change in circumstances, Japan will become dependent on the Bank of Japan (BoJ) to finance its spending through debt monetization. Bank weaknessJapan may also face increasing stress on its government finances from higher rates. Increased borrowing costs may be driven by several factors.
Higher interest rates will increase the stress on government finances. Despite low interest rates, approximately 25% of tax revenue is used to service outstanding government debt, compared to 6% in the U.S.. At borrowing costs of even 2% to 3% per annum, two to three times current rates, Japan’s interest payments will be an unsustainable proportion of tax receipts. Higher JGB rates will also trigger problems for Japanese banks, pension funds and insurance companies. For example, JGBs total around 24% of all bank assets, which is expected to rise to 30% by 2017. According to the Bank for International Settlements, the JGB holdings of Japan’s banks equate to 900% of their Tier 1 capital, compared with about 25% for U.K. banks’ exposure to gilts and 100% for U.S. banks’ exposure to Treasurys. An increase in JGB yields would result in immediate mark-to-market large losses on existing holdings, although higher returns would boost income longer term. The BoJ estimates that a 1% rise in rates would cause losses of $43 billion for major banks, equivalent to 10% of Tier 1 Capital for major banks or 20% for regional banks. Higher rates increase the risk of a Japanese banking crisis. Higher volatility in the JGB markets can result in rapid increases in bank risk and increased capital needs. This may force sales of JGBs leading to a destabilizing cycle of higher rates, even higher volatilities and forced liquidations which happened in 2003. Age pressuresAn aging population, a shrinking workforce and an increasing dependency ratio of the number of aged supported by a reduced number of workers are integral to Japan’s problems. Former BoJ governor Masaaki Shirakawa summarized the challenge: “Japan’s economic growth gradually slowed during the past two decades mainly for two reasons. In the former half of the period, the Japanese economy was hobbled by the crippling effect of the burst of the bubble. In the latter half, the rapid population aging hampered the Japanese economy through a variety of channels.” Current initiatives will have limited impact on low fertility rates, immigration levels or increase labor force participation rates. Prime Minister Abe’s program may exacerbate economic risks without addressing the demographic problems. The drive for higher wages highlights the contradictions. It is difficult to engineer an increase in incomes across the economy when older workers with higher salaries and benefits are retiring while young workers replacing them are only paid entry-level wages or hired as contractors without benefits or job security. Japan’s overall consumer spending power will therefore fall, rather than rise. Demographics may also contribute to deflation. Empirical evidence suggests links between population growth rates and inflation. Ironically, deflation has maintained the purchasing power and consumption of consumers — especially the aged on fixed incomes, as falling prices have compensated for stagnant and falling incomes and extremely low investment returns on savings. Higher inflation would reverse this, driving consumption even lower. The policy deficiencies point to several discontinuities. An untrammelled belief in central planning underlies the present program. In the 1960s, Prime Minister Hayoto Ikeda introduced a plan, which was successful in helping Japan achieve strong growth. Between 1964 and 1972, Prime Minister Eisaku Sato, who replaced Ikeda, implemented three successive growth plans, which were noticeably less successful. More recently following the onset of the global financial crisis, successive administrations have introduced a conga line of growth plans:
None of the plans have achieved their objectives. It is unclear why
will succeed, where similar previous initiatives have failed. Japan’s deep-seated fundamental problems are within its real economy. It needs to deal with its
These structural problems cannot be dealt with by adjustments in fiscal and monetary policy, despite attempts by governments and central bankers to convince audiences to the contrary. Satyajit Das is a former banker and author of “Extreme Money” and “Traders, Guns & Money.” |
07-15-13 | JAPAN MONETARY |
2 - Japan Debt Deflation Spiral |
JAPAN - Shinzo Abe Hasn't the Stomach for the Heavy Lifting Needed to Accomopany ABE-nomics. Here Comes The Hardest Challenge Yet For Abenomics 07-15-13 BI Prime Minister Shinzo Abe is likely to win a mandate on Sunday for his three-part recipe to end stagnation in the world's third-biggest economy, but anyone expecting him to use it to push a "Big Bang" reform agenda may need a reality check. Abe's Liberal Democratic Party-led bloc is expected to win a hefty majority in a July 21 upper house election, ending a "twisted parliament" in which the opposition controls the upper chamber. Media surveys published on Monday showed the LDP maintained a substantial lead over rival parties. That stalemate has hampered policies for most of the past six years since Abe, then in his first term as premier, led the LDP to a humiliating 2007 upper house defeat. He resigned two months later and was followed by a string of short-term leaders. Abe, who returned to office in December for a rare second chance, will have few excuses for shying away from reforms including deregulation that many see as vital to generating growth - but his commitment to doing so remains in doubt. "What's required is the kind of thorough-going reform that Mr. Abe doesn't seem to have the vision or stomach for," said Jun Okumura, a senior advisor for Eurasia Group and former bureaucrat at Japan's trade and industry ministry. "Just because he wins an election doesn't mean vested interests will be any more amenable to changes that would affect them negatively," he said. "A leader can do a lot with the ability to appoint and dismiss cabinet members and ultimately, the right to call a general election. "But I don't see Mr. Abe as that kind of leader." Hopes for his "Abenomics" prescription of hyper-easy monetary policy, big spending and steps to promote growth pushed up Tokyo share prices and weakened the yen even before his LDP-led bloc won a December poll for the powerful lower house. "ENRICH THE COUNTRY, STRENGTHEN THE ARMY" Business executives and economists welcomed his decision in March to join talks on the U.S.-led Trans-Pacific Partnership (TPP) free trade pact despite fierce opposition from the farm lobby, a traditional backer of the LDP. Advocates say joining the pact would open Japan's economy to competition and boost momentum for deregulation to spur growth. "TPP is not about agriculture reform, it's about whether Japan sits at the table when global rules are made and doing whatever it takes to be a first-rate power," said Jesper Koll, head of equities research at JP Morgan in Tokyo. "That's what fires them up." Abe has also backed reform of the energy sector that would break up regional utility monopolies, also powerful LDP supporters - although a political scuffle just before parliament ended in June prevented the reform bill from passing. Optimists argue the desire of Abe and like-minded nationalists for a strong economy to ensure Japan's place on the global stage will keep up pressure for reform - a sort of 21st century version of the "Enrich the Country, Strengthen the Army" slogan of the late 19th century reformers who modernized Japan. "I think he sees a genuine challenge to the sovereignty and power of the country," said Robert Feldman, chief economist at Morgan Stanley MUFG in Tokyo. But reaction to Abe's "Third Arrow" of structural reforms unveiled in June has been tepid, prompting the premier and his aides to promise that more is in store after the upper house election. Among the areas where critics want bolder steps are
ACHILLES' HEEL ON HISTORY? Reform advocates also worry about potential backsliding on promised steps such as energy market reform. "The LDP might change some part of the (utilities reform bill) so it doesn't have so much impact on incumbent utilities," said Hiroshi Takahashi at Fujitsu Research Institute, who sat on an advisory panel that recommended the reforms incorporated in the bill. A split among Abe's growth strategists between those who see a big role for government in picking and backing new growth sectors, and those who want government to get out of the way to allow innovation, also clouds the outlook for reform. Ironically perhaps, too big a victory on Sunday could make it harder for Abe to push through the sort of reforms that would harm traditional LDP supporters. Such a win would increase party complacency along with the number of MPs with ties to vested interests. Some media forecasts give the LDP a shot at winning an upper house majority on its own for the first time since 1989. With no national poll required until 2016, LDP members keeping quiet now ahead of the election are likely to become more vocal afterwards. "Are we dealing with Japanese politics" the answer is 'yes'. Will there be compromise? You bet. The risk of compromise moving to the forefront gets bigger the bigger they win," said Koll, who nonetheless argues Abe is intent on meaningful reforms. Abe will also face a tough decision in autumn on whether to give the go-ahead for a plan to raise the 5 percent sales tax to 8 percent next year, the first stage in a scheduled doubling by October 2015 to help curb Japan's huge public debt. Some LDP members fear a tax hike would derail a recovery, but postponing it could cause havoc in financial markets, where the move would be taken as a signal of reneging on fiscal reform. The International Monetary Fund (IMF), while giving a cautious OK to "Abenomics", has warned of downside risks if Japan doesn't both
Concerns have eased a bit that the deeply conservative Abe might shift attention after the election from the economy to pet projects such as revising the pacifist constitution, drafted by U.S. Occupation officials after Japan's defeat in World War Two. The LDP's junior partner, the New Komeito, is wary of such changes and media forecasts suggest the LDP and small parties that also favor constitutional revision will fall short of the two-thirds majority needed to submit changes to a plebiscite. But Abe may find his Achilles' heel in questions relating to Japan's wartime history, which he wants to recast with a less apologetic tone. Abe visited Tokyo's Yasukuni Shrine, where wartime leaders convicted as war criminals by an Allied tribunal are honored with war dead, after becoming LDP leader in September. He has declined to say if he will do so as premier, but could face pressure from supporters to go on the August 15 anniversary of Japan's defeat or at an annual autumn festival. A pilgrimage to Yasukuni would outrage China and South Korea, which suffered from Tokyo's wartime aggression. Tokyo's relations with Beijing are already strained by rows over rival claims to tiny, uninhabited isles. Abe may also have trouble refraining from comments on history that spark ire in Beijing and Seoul, in turn upsetting security ally Washington and potentially undermining his support at home. "It is going to be very tempting for Abe to speak his mind that seems like an endorsement of what he stands for as a politician," said Sophia University professor Koichi Nakano. |
07-15-13 | JAPAN MONETARY |
2 - Japan Debt Deflation Spiral |
BOND BUBBLE | 3 | ||
EU BANKING CRISIS |
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SOVEREIGN DEBT CRISIS [Euope Crisis Tracker] | 5 | ||
CHINA BUBBLE | 6 | ||
CHINA - "Will introduce some measures to arrest the slowdown of growth in the next couple of quarters" Chinese Q2 GDP Rises 7.5% But Industrial Production Misses 07-14-13 BI Chinese Q2 GDP climbed 7.5% in line with expectations. This is down from 7.7% growth in the first quarter. Economists had been cutting their GDP forecasts leading up to the data release. Chinese GDP grew 1.7% quarter-over-quarter, slightly below expectations for a 1.8% rise. China's GDP is up 7.6% in the first half of the year. The official government target is for 7.5% growth in 2013. The cash crunch in June is also expected to have impacted economic growth. We also had other economic data out tonight. Chinese industrial production was up 8.9%, below expectations for a 9.1% rise. Industrial production was up 9.3% in the first half of the year. The 10.8% rise in crude oil output, following the rise in crude oil imports suggests some improvement in investment activity. All important year-to-date fixed asset investment (FAI) climbed 20.1%, missing expectations for a 20.2% rise. A breakdown showed that railway FAI slowed to 15.7%, from 24.2% in May, manufacturing FAI slowed to 15.2%, from 16.5%, and property FAI was up 19.4%. Retail sales were up 13.3%, above expectations for a 12.9% rise. In real terms however, retail sales were up 11.7% in June, down from 12.1% the previous month. Retail sales were up 12.7% in the first half of the year. Chinese electricity consumption was up 6.3% YoY in June to 438.4 billion kilowatt hours, and up 5.1% in the first half of the year. National Bureau of Statistics spokesman, Sheng Laiyun, said that China is creating jobs despite the slowdown in the economy, according to Bloomberg. "We’d like to reiterate our call of “Li Keqiang Put”, which means that in the first couple of years of Premier Li’s term, he may try to prevent a growth hard-landing and a financial crisis," wrote Bank of America's Ting Lu following the release. "That’s why we expect Li’s cabinet will introduce some measures to arrest the slowdown (in yoy term) of growth in the next couple of quarters." Markets will be watching to see if policymakers move to support their 7.5% growth target.
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07-15-13 | CHINA INDICATORS CYCLE GROWTH |
6 - China Hard Landing |
CHINA - Slower Growth In the Cards & Endorsed by New Leadership NOMURA: Chinese Growth Will Fall Below 7% Next Year 07-15-13 Nomura via BI Following last night's China's GDP figures (which indicated slowing, but which came in line at 7.5% for Q2) Nomura is slashing its 2014 growth forecast to below 7%, which is kind of major threshold. Economist Zhiwei Zhang gives three reasons for reducing the firm's 2014 GDP forecast to 6.9%.
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07-15-13 | CHINA INDICATORS CYCLE GROWTH |
6 - China Hard Landing |
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MACRO News Items of Importance - This Week | |||
GLOBAL MACRO REPORTS & ANALYSIS |
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US ECONOMIC REPORTS & ANALYSIS |
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CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES | |||
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COMMODITY CORNER - HARD ASSETS | PORTFOLIO | ||
PRIVATE EQUITY - REAL ASSETS | PORTFOLIO | ||
AGRI-COMPLEX | PORTFOLIO | ||
SECURITY-SURVEILANCE COMPLEX | PORTFOLIO | ||
THESIS Themes | |||
2013 - STATISM |
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2012 - FINANCIAL REPRESSION |
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2011 - BEGGAR-THY-NEIGHBOR -- CURRENCY WARS |
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2010 - EXTEN D & PRETEND |
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CORPORATOCRACY - CRONY CAPITALSIM | |||
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SOCIAL UNREST |
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CENTRAL PLANNING |
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STANDARD OF LIVING |
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CORRUPTION & MALFEASANCE | |||
NATURE OF WORK | |||
CATALYSTS - FEAR & GREED | |||
GENERAL INTEREST |
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Tipping Points Life Cycle - Explained
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FAIR USE NOTICE This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. DISCLOSURE Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments. COPYRIGHT © Copyright 2010-2011 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him
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