Topic: Lyth0s' Economic Troubles Thread - page 2. (Read 7353 times)

... France has taken the first step.  It seems the terrorists involved partially financed these attacks by cash, as well as by consumer loans and the sale of counterfeit goods.
French Finance Minister Michel Sapin brazenly stated  that it was necessary to "fight against the use of cash and anonymity in the French economy."  He then announced extreme and despotic measures to further restrict the use of cash by French residents and to spy on and pry into their financial affairs.

These measures, which  will be implemented in September 2015, include prohibiting  French residents from making cash payments of more than 1,000 euros, down from the current limit of  3,000 euros.

NEW YORK (MarketWatch) — Don’t fret. Stocks aren’t overheating. That is the message Goldman Sachs chief global strategist Peter Oppenheimer, offered up on CNBC on Monday.

The Goldman strategist included the key term “yet” in his comments about the growing fear in the market that stock’s are getting too rich.

n a unanimous vote, the Fed as expected dropped its pledge to remain “patient” about raising rates in a statement released after a two-day meeting. And 15 of the bank’s top 17 officials think the Fed will raise rates sometime this year. See text of statement.

Still, the Fed cautioned that it will wait to raise rates until it has “seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective over the medium term.”

With a firm "no comment" Janet Yellen shied away from burstng the bubble in "extremely stretched" Biotech and Social Media stocks, but was forced to admit that "overall measures of equity valluations are on the high side." Then, rather oddly, she notes that The Fed sees unusually low spreads in corporate bond markets... which is odd since they have actually widened dramatically in the last year or so, perhaps signalling just how "high" valuations are in stocks...

Yellen "no comment" on Biotechs... but "market valuations on the high side."

With Greek bank bonds collapsing, stocks near record lows, Greek default risk at post-crisis record highs, and Greek government bond yields spiking, it has been surprisng that we have not seen the ATM lines and generalized 'panic' of a population in fear of being "Cyprus'd." Well, now as ekathimerini reports, that appears to escalating and rapidly as credit sector officials estimated that the flight of deposits yesterday alone amounted to 350-400 million euros, which was some five times higher than the daily average in previous days.

As ekathimerini reports, Greek banks are suffering from fresh turbulence due to the tension and the apparent collision course between Athens and its creditors. Bank stocks gave up more than 8 percent of their value on Wednesday, while the outflow of deposits was far greater than on previous days.

(Reuters) - U.S. stocks dropped on Tuesday, giving the S&P 500 its biggest decline in two months, on increasing views the Federal Reserve may raise rates as soon as June.

The Dow and S&P 500 ended in negative territory for the year, with the S&P 500 off 3.5 percent from its March 2 record closing high.

The Dow Jones Industrial Average suffered its worst one-day point drop in five months as investors began pricing in a rate hike by the Federal Reserve by the middle of the year, while other central banks are embarking on a quantitative easing path.

More and more stocks no longer are in uptrends, even as the S&P 500 manages to maintain its uptrend,” said Carter Braxton Worth, chief market technician at Sterne Agee. “Unsustainable divergence, we’d say.”

China's economy grew 7.4% last year, its worst showing in 24 years. The government has set an even lower target for this year of about 7% growth.

The central bank took advantage of mild inflation and cut benchmark interest rates, effective March 1, to help bolster economic growth. It was the second rate cut in a little over three months.

Home-price growth has slowed, according to recent data. The year-over-year growth rate for the S&P/Case-Shiller 20-city composite slowed to 4.5% in the final month of last year, compared with 13.4% growth in December 2013.

Posted this on another Spec thread but it is more fitting here.

Many messy implications.

http://foreignpolicy.com/2015/03/03/the-u-s-government-should-pay-anonymous-in-bitcoin-to-fight-isis/

Abraham said it’s not “an anomaly” to see fraud accounting for about 6% of Apple Pay transactions, compared to about 0.1% of transactions using a plastic card to swipe

In a surprise move, the RBI just cut its main interest rates for the second time in two months, taking it from 6.75% to 6.50%, in what the central bank calls a “pre-emptive” policy move, but what is in reality merely a confirmation that so far in 2015 at least 20 central banks have lowered their interest rate.

Buffett compares Greece to a "dog peeing on the carpet" of Europe, suggesting Germany stop "rewarding behavior you want to get rid of."

None of this might matter were it not for the fact that extremely low interest rates have fueled increased risk-taking by borrowers and yield-hungry lenders. The result has been a massive mispricing of financial assets. And that has created a growing risk of serious adverse effects on the real economy when monetary policy normalizes and asset prices correct.

Don't believe any news about Greece. That theater could continue forever - until the EU bankrupts itself constantly bailing out a corrupt and inefficient government/banking system.

When money can be printed how do you run out? You DON'T you make headlines and politics, but at the end of the day you - the elite - get your house and your dinner for free.

It doesn't end until people say stop and choose a medium that cannot be faked - like Bitcoin.

(Gold also cannot be faked, but using it is just as cumbersome and expensive as our current structure of propping up the elites - at least the elite get something out of fiat)


In the near future Bitcoin will start to swallow up all this fiat, the more the fiat price lowers the faster it will go. Bitcoin is like a financial black hole, it is yet small - but just wait.
At first people will go to Bitcoin because of the price increases, later they will come because it is stable and fiat is collapsing.

In the near future Bitcoin will start to swallow up all this fiat, the more the fiat price lowers the faster it will go. Bitcoin is like a financial black hole, it is yet small - but just wait.
At first people will go to Bitcoin because of the price increases, later they will come because it is stable and fiat is collapsing.

Shut out of debt markets and faced with a steep fall in tax revenues, Athens is expected to run out of cash by the middle or end of March. Its finance minister has warned that Greece will struggle to repay creditors starting with a 1.5 billion euro IMF loan repayment due in March.

Printing does not necessary leads to inflation, since the inflation indicator does not include capital goods, more money will just raise the asset price and bond price. And now more money means more debt, means more of the income will be used to pay the debt, and less money will be used to pay the daily consumption, so there will be deflation even the money printing is accelerating

Of course when banks receive the interest, they will spend, which put those interest money back into circulation, but their spending is very limited and could not create much jobb

I don't think I agree with this. If the $100 is printed and we now owe $102 to the fed, then we have even more money printed to pay our debts back and this cycle repeats. Yes debt forever increases (and at a faster rate than the money supply), but all of this printing leads to inflation (dollar becomes cheaper and it takes more of them to buy the same good)...It's only if we stop printing that we would start to have deflation and economic collapse.

Please tell me if I'm wrong or missing something.

It’s time to start the countdown to the crash of 2016. No, this is not a prediction of a minor correction. Plan on a 50% crash.

Cash hoard

Berkshire Hathaway is flush with cash, sitting on $62.4 billion as of Sept. 30.

In January, the consumer price index sank by a seasonally adjusted 0.7%, the biggest one-month drop since the end of 2008, the Labor Department reported Thursday.

1. Business cycle: The current business cycle is 67-month-old, prompting worries that it is soon to expire and lead to a recession. But given that the U.S. economy is still performing at below potential and the typical signs of imbalances aren't apparent, the current cycle will remain intact for now.

2. Strong U.S. dollar: A firm dollar hurts U.S. exports and weakens American products’ competitiveness but it alone won't trigger a recession or a bear market.

3. The Federal Reserve: The Fed turning hawkish is a worry but given the current composition of the Fed, the possibility of an ill-timed interest rate hike is limited.

4. Weak Oil: Lower oil prices is more of a boon than a bane as less money spent on gas and fuel will mean more cash for consumers and businesses.

5. Earnings: “This is a serious problem,” said Kostohryz. The S&P 500 earnings per share risk is flat to negative in 2015 and PE ratios are peaking, limiting the market’s upside.

6. Valuation: Although some experts believe the market is overvalued based on the “Shiller PE10,” the indicator isn't foolproof. “PE ratios are at levels that have historically served as a peak in valuations, but aren't yet at levels that can be considered to constitute a ‘bubble.’”

7. Greece: Investors are underestimating the possibility of a negative outcome in Greece’s debt crisis. But the Eurozone is sufficiently prepared to deal with any fallouts.

8. Ukraine: The West and Russia won't go to war over Ukraine. The situation in the Eastern European country may deteriorate in the coming months but it will have limited impact on U.S. markets.

9. China: The Asian powerhouse is slowing but the Chinese government is expected to deploy aggressive fiscal and monetary measures to prevent a “hard-landing.”

10. Geopolitical instability: Oil-dependent regimes such as Venezuela are likely to face greater instability while rising Muslim extremism in the Middle East could lead to political and social upheaval in the region.

So far, “crude-oil supplies remain strong, and OPEC is showing no signs of cutting in the immediate future,” said Kevin Kerr, president of Kerr Trading International. “That is all putting pressure on [WTI] crude around the $50 mark.”

According to a survey released Monday by Bankrate.com of more than 1,000 adults, 37% of Americans have credit card debt that equals or exceeds their emergency savings.

The Nasdaq only crossed the 5,000 mark once before. This was back on March 9, 2000, just before the collapse of the so called dot-com bubble.

With the burst of the bubble, the Nasdaq went on to fall 78% to a then-six-year low of 1,114.11 on October 9, 2002. The ensuing bull run elevated the index back as high as 2,859.12 on Halloween 2007. That marked a 157% gain from the October 2002 low, but still 43.37% off the 2000 record close. But the financial crisis soon halted the advance.

News 2/17/15


The banking industry’s biggest cyber fears


--88% of brokerages have been victim of cyberattacks, only 15% admitted that they will guarantee funds lost to attacks
--74% of financial advisers have experienced attacks. 9% gaurantee funds.
Peachy

Greece intends to ask for extension Wednesday, says official
--Sounds like a rumor to me. I'm not 100% convinced that all the sudden Tsipras will reconsider the extension without a restructuring of their debt.


7 charts that suggest the rising stock market may be wrong


--Retail sales are down, many commodities are down, corporate profits are down (post-tax), hourly wages for production workers are down, personal consumption expenditures (leaving out food and gas) are down which may or may not be signalling more deflation (which is terrible in fiat based currencies and leads to bankruptcy)

Cybercriminals have stolen up to $1 billion since late 2013 from banks across 30 countries, including the U.S., Russia, Europe and China, a computer security company says in the latest report to draw a red circle around the financial sector as a vulnerable target for hackers.

The majority of brokerages (88%) and financial advisers (74%) said they “have experienced cyberattacks directly or through one or more of their vendors.” But only a small portion of the more than 100 firms surveyed — 15% of broker dealers and 9% of advisers — guarantee they’ll reimburse clients for losses related to a cyberattack, the Securities and Exchange Commission found.

Greece will seek an extension to its loan agreement from the rest of the eurozone Wednesday, an official with knowledge of the situation said...
The Greek government has so far insisted that budget cuts and economic overhauls mandated by the current rescue deal are hurting its economy and society and that the currency union’s finance ministers haven’t offered sufficient leeway on implementing those measures.

But as the above chart, joined by the following charts, shows, investors often ignore disappointing economic information as a bull market progresses, just as they did before the previous two recessions. And when market prices just start building rapidly on themselves, without a strong economic platform or continued stimulus from the Federal Reserve, the market bubble that is created should eventually pop