HOTTEST TIPPING POINTS |
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Theme Groupings |
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| QUARTERLY SMII |
MACRO |
STRATEGY |
INSIGHT |
| Q1 2014 |
UKRAINE & the PETRO$$ |
Global Shift in LNG Balance |
Vehicle: Gazprom (OGZPY)
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| Q2 2014 |
RETAIL CRE |
Collapse in Select REITs |
Vehicle: S&P Retail SPDR (XRT)
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| Q3 2014 |
WEAKENING LIQUIDITY "FLOWS" |
Central Bank Reactions |
Likely Scenarios - Still Too Early
Short Equities (Nasdaq / Russell 2000) ONLY if Death Cross Confirmations
Bond Rotation (Falling 10 UST Yield)
Short EURUSD Cross |
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MOST CRITICAL TIPPING POINT ARTICLES TODAY |
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CHECK OUT OUR PAGE DEDIATED TO FINANCIAL REPRESSION
The Financial Repression AuthorityTM
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FINANCIAL REPRESSION - 50% of all US pension fund assets are invested in stocks
BEFORE Financial Repression
BONDS were "for Widows, Orphans and Pensioners"
For those who couldn't and SHOULDN'T take risk
Now the government is forcing Public Pensions into Stocks
Some 50% of all US pension fund assets are invested in stocks and only 20% in Treasurys
A MARKET CORRECTION WILL DESTROY WORKER PENSIONS & ENSLAVE MILLIONS
UNDERSTAND
"SHORTING" & "PUT DERIVATIVES"
to know how
THE GREATEST WEALTH TRANSFER IN HISTORY
IS BEING SET-UP TO EVENTUALLY BE EXECUTED
"There is no FREEDOM without NOISE -
and no STABILITY without VOLATILITY."
A third of people have nothing saved for retirement USAT |
08-19-14 |
THESIS |
FINANCIAL REPRESSION
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"When a Government Doesn't Own its Own Currency this Eventually Happens "
Its Called FINANCIAL REPRESSION
When an Unelected, Private Institution (The Federal Reserve), Owned by the Banks, Controls the Money Supply & Interest Rates this occurs
"Permit me to issue the money of a nation, and I care not who makes it laws"
Mayer Amschel Rothchild, Banker 1790
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08-19-14 |
THESIS |
FINANCIAL REPRESSION
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PRIOR TO FINANCIAL REPRESSION IN AMERICA
Government Policy was about:
"positively incenting & directing actions"
Government Policy is now about:
"negatively forcing & impeading actions"
READ: Treasury Officials Prepare Options to Address Inversions 08-19-14 WSJ
Treasury Department officials are assembling a list of administrative options for Secretary Jacob Lew to consider for ways to deter or prevent U.S. companies from reorganizing overseas primarily to avoid paying federal taxes
Some Democrats in Congress believe lawmakers should pass a stopgap measure to deter companies from pursuing the deals, while some Republicans have said the only way to stop inversions is through an overhaul of the tax code.
others believe the White House has ample flexibility to step in and have raised different ideas for administrative actions, including
- steps to address earnings stripping,
- the taxation of interest and
- the treatment of debt and equity
THIS IS WHY IT IS CALLED REPRESSIVE
FINANCIAL REPRESSION IS ABOUT REGULATIONS
FORCING BEHAVIOUR
versus
REWARDING BEHAVIOUR
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08-19-14 |
THESIS |
FINANCIAL REPRESSION
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Indebted Governments Will Resort To Capital Controls
Daily Reckoning commentary on how indebted, western-world governments will likely begin instituting draconian controls & regulations on restricting the movement of money, all with the goal of keeping itself alive & not going into default on its debt while at the same time maintaining a relatively strong currency
.. "The U.S. government, along with other Western countries and innumerable banking institutions, is starting to make it very difficult for regular citizens — you, me and the nice lady next door — to move money
.. In essence, capital controls enable governments to limit the flow of money coming in and out of their country in the hopes of manufacturing conditions that protect the value of their currency. As we reach a fiscal tipping point, we could very well see our government revert to making use of capital controls."
.. it's another example of financial repression.
READ: 4 Ways the Government Is Set to Take Your Money |
08-19-14 |
THESIS |
FINANCIAL REPRESSION
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| MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - Aug. 17rd - Aug23rd, 2014 |
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| RISK REVERSAL |
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| JAPAN - DEBT DEFLATION |
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| BOND BUBBLE |
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3 |
EU BANKING CRISIS |
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| SOVEREIGN DEBT CRISIS [Euope Crisis Tracker] |
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5 |
| CHINA BUBBLE |
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6 |
| TO TOP |
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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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| Market Analytics |
| TECHNICALS & MARKET ANALYTICS |
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CREDIT - The Economy Has Entered Its Scary 'Phase 3' Where Bubbles Form Prior To A Crash
CITI: The Economy Has Entered Its Scary 'Phase 3' Where Bubbles Form Prior To A Crash 08-15-14 Citi via BI
Citi analyst Rob Buckland has published this diagram of where he thinks we are in the economic cycle, and it's slightly terrifying. (We first saw the note on FT Alphaville.) Basically, we're in "Phase 3" of a four-phase credit/equity cycle.
In Buckland’s theory — originally developed by Citi's Matt King many moons ago — that's the phase in which irrational bubbles form right before everything comes crashing down again. Here's the diagram, which we've annotated in red. We'll explain it below:
In Buckland's telling, the economy goes through four cycles.
Phase 1: This begins at the end of a recession, when interest rates have fallen, money is cheap, but stocks are still battered.
Phase 2: A bull market sets in during phase 2, when stocks start to rise as easy credit lubricates the economy.
Phase 3: This is the tricky part. Stocks are still flying high, but credits spreads are widening as investors become increasingly unwilling to finance further risk. Corporate CEOs have now experienced a lengthy period of gains and become risk-happy. (And we'd note that central banks are already talking about tightening credit by raising interest rates.) Bubbles can form in Phase 3, Buckland says, as the high-flying stock market ignores the early warning signs of the deteriorating credit market. Hello, tech startup IPOs!
Phase 4: Stocks react to the lack of available credit by collapsing, and we see the kinds of things you get in a recession: "This is the classic bear market, when equity and credit prices fall together. It is usually associated with collapsing profits and worsening balance sheets," Buckland says.
We're in Phase 3 right now, Buckland says, but we may not be very far into it. Here's Buckland's checklist of warning signs for Phase 3. We've highlighted the bit that scares us:
Click to Enlarge
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08-18-14 |
FLOWS
STUDIES |
ANALYTICS |
| COMMODITY CORNER - HARD ASSETS |
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PORTFOLIO |
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| COMMODITY CORNER - AGRI-COMPLEX |
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PORTFOLIO |
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| SECURITY-SURVEILANCE COMPLEX |
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PORTFOLIO |
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| THESIS |
| 2014 - GLOBALIZATION TRAP |
2014 |
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2013 - STATISM |
2013-1H
2013-2H |
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2012 - FINANCIAL REPRESSION |
2012
2013
2014 |
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2011 - BEGGAR-THY-NEIGHBOR -- CURRENCY WARS |
2011
2012
2013
2014 |
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2010 - EXTEND & PRETEND |
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| THEMES |
| FLOWS -FRIDAY FLOWS |
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THEME |
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| SHADOW BANKING -LIQUIDITY / CREDIT ENGINE |
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THEME |
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| CRACKUP BOOM - ASSET BUBBLE |
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THEME |
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| ECHO BOOM - PERIPHERAL PROBLEM |
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THEME |
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| PRODUCTIVITY PARADOX -NATURE OF WORK |
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THEME |
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| STANDARD OF LIVING -EMPLOYMENT CRISIS |
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THEME |
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| CORPORATOCRACY -CRONY CAPITALSIM |
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THEME |
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CORRUPTION & MALFEASANCE -MORAL DECAY - DESPERATION, SHORTAGES. |
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THEME |
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| SOCIAL UNREST -INEQUALITY & A BROKEN SOCIAL CONTRACT |
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THEME |
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| SECURITY-SURVEILLANCE COMPLEX -STATISM |
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THEME |
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| GLOBAL FINANCIAL IMBALANCE - FRAGILITY, COMPLEXITY & INSTABILITY |
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THEME |
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| CENTRAL PLANINNG -SHIFTING ECONOMIC POWER |
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THEME |
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| CATALYSTS -FEAR & GREED |
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THEME |
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| GENERAL INTEREST |
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| TO TOP |
2014 THESIS: GLOBALIZATION TRAP
