CRASH2: Life’s a beach, and then you die

Nasty things are brewing in the global pot

francegdp10816

Well, you read it here first. That’s 40% worse than May, and four times worse than expected. (The month of May, not Theresa May)

chinatrade10816

Oh dear. And just when everyone was telling us that China was in recovery. That’s 50% worse than the previous month – also worse than expected.

After flailing around all over the place – and failing in everything he’s tried – Shinzo Abe seems, finally, to have given up on Nirponomics and is returning to zeronomics. Actually, investors in the never-ending search for income took the decision for him and sold off BoJ bonds bigtime last week.

The immediate effect was a rise in eurobonds.

japbonds10816

It’s a Big Story because its potential for contagion is infinite…..and it coincides with yet another outbreak of macho at the US Fed, following last week’s ludicrously hyped Non-farm payrolls  jobs data.

So this is the outlook. France’s basketcase-weaving skills are becoming increasingly obvious, and just happen to be colliding with a slowdown in world trade.

In turn, the world’s most indebted and depressed nation is finding it more expensive to borrow money, and that just happens to be about to collide with a Fed rate rise in September…with the eurozone desperate for capital investment, but feeling the backwash of rising Japanese bond yields just as the Italian banking crisis starts to boil over.

Most people are on holiday in August. Most of them are back by the end of the first week in September.

October could be a very interesting month indeed.


Connected from previous Slogpost: 14 insoluble globalist issues

32 thoughts on “CRASH2: Life’s a beach, and then you die

  1. http://www.zerohedge.com

    Mark Carney ,Govr of the Bank of England has attempted £60 billion of QE, and big surprise, only approx £1b takers. The penny is beginning to drop.
    There is no where to go for yield, so the Institutions are hanging on to their Gilts.
    Would appear that the BOE is shooting blanks. Not much left in their bag of tricks. Except the obvious ,direct fiscal investment into Productive industry and infrastructure, but that does not put money into the banking cartel, but into the Real Economy, creating wealth and jobs, So this policy would be a no-no.

    Liked by 4 people

  2. The chance of a Democrat controlled Fed increasing interest rates in September in front of the November 8 election are about as low as the Fed funds rate -zilch! Trump with a 10 per cent chance of winning, according to Nate Silver, would love it as he cheers on a market crash before the election with his call to sell everything.

    Like

  3. ….. and a prominent German economist has warned that Deutsche Bank is heading for insolvency, and must be nationalised.

    Another butterfly about to flap its wings !

    Like

  4. Hold on Salford lad. Is it not the case where the BOE has a purchase programme of £1.18 billion for each maturity sector?
    There being three sectors; 3 to 7 year; 7 to 15 year and over 15 year. The purchases of the first 2 appear to be £1.17 billion and the 2nd £1.18 billion. This seems that the BOE has achieved it’s target on the first auction (give or take a few £million).
    I think you will find that Zero Hedge is a bit short on relevant information.
    see:
    http://www.bankofengland.co.uk/markets/Documents/apf/apfgiltstimeseries.xls

    Like

  5. ….. and a prominent German economist has warned that Deutsche Bank is heading for insolvency, and must be nationalised.

    I’m sure Gemma will be along soon blaming the British for it’s perilous position…

    Like

  6. Well I’ve successfully predicted seven out of the last two recessions, so I guess I am a bit on the negative side. I do wonder though how much more money printing can go on without totally screwing things up. There are a lot of things wrong, but no crash yet. Mind you the Brexit recession appears to be receding as Project Fear dims in the memory. Nevertheless the UK and EZ economies will no doubt suffer a bit in the near future. I look forward to the usual crowd saying it is nothing to do with the disfunctional EZ, China, the US etc and really is my fault as an over-age and under-educated racist for being duped into voting for “leave” by the lies of Boris and Gove. Must dash – need to pop out and hurl some abuse at immigrants….

    http://seekingalpha.com/article/3998160-bank-england-qe-imaginary-brexit-shock?ifp=0

    Liked by 2 people

  7. Paul Craig Roberts explains at the level of your slightly attentive Merikan, how financial fundamentals are skewed.
    He says that “In the past liquidity implied economic growth” and demonstrates why it doesn’t now.
    Check out the paragraph where “it makes no sense”, over and over. It’s simple really.
    Now that institutions are finding that they have nowhere to go and that they’re starting to dig in their heels, we’ve the first clear signs that a limit has been reached now in 2016.

    http://www.paulcraigroberts.org/2016/08/10/how-long-can-economic-reality-be-ignored-paul-craig-roberts/

    Liked by 1 person

  8. Life goes on in the minds of some……….off topic but my head is spinning!
    Re the Labor mayor elect for Manchester: I hope he is a man governed by reason and not faith, There are too many , for my liking , in jobs were secular sanity is required.
    I hope the Tory fellow Whsatsisname is not a Manchurnion Kandidate !
    Kamoron said himself was a man of faith!
    I had a lesson in faith way back in Eire at the end of WW2. Some what secular myself as I went local school round the corner..relaxed CofE.
    On a holiday visit we made a visit to the local cattle market …
    at this market some fellow (not a vicar ) was marking the cattle within reach with a sign of the cross, I asked my granddad what was this about and he said he thinks it will stop the cattle spreading the spit ….. I thought this is easier than injections and pills! Granddad brought my fantasy to an end .. he said “that fecker will be the first one on the boat to England if he or the cattle show signs of the spit”

    Like

  9. Peter C – I don’t really dissent from the points made by the article you posted and though it uses language a little too colourful for my taste, and mirrors many comments made elsewhere. Basically we are in a mild recession, disguised by fixed stats and a tame press, and eased by dysfunctional money printing. Can it go on? My view is yes and for a long while, but some sort of “bleedin’ obvious” Black Swan Event will turn everything over. Take your pick. The black swans are beginning to flock, ready for their migration south….

    Meanwhile the people who have to survive in the real economy keep voting for change. Hmmmm…..

    Like

  10. @marcjf; Yes, I too believe it can be continued almost indefinitely barring some Black Swan Event.
    Now, admittedly I have a very limited understanding of the complexities of the financial world but, how can anyone raise interest rates when they can’t pay the interest on the loan in a world that is in a slump? Surely they have to earn the money to pay the interest on the loan/investment? If there are no consumers then what’s the point in investing in manufacturing? I think investors will come to accept that there just isn’t a return on their money, it’ll become the new norm, then, they (TPTB) can tread water for a very long time. But, hey, what do I know?

    Like

  11. Try again… WordPress censors must have flagged something… in America it’s called freedom.
    Everywhere else it’s called censorship.

    Like

  12. Skirmish

    I’m having problems with the WordPress Censor with my post about Deutsche.

    Suffice it to say that German style nationalization isn’t the merry-go-round that the nationalization of RBS or other British banks was.

    Like

  13. @kfc1404 – very simple – the Big Fish need us little minnows to consume but most are too indebted to do so. Meanwhile others of us have learned that you actually need very little to enjoy life and can do very well without most of the crap that’s produced.

    Like

  14. Slightly O/T but it seems that Britain has now overtaken Germany in terms of net contributions to the EU. How did that happen and what is the basis for it? Are we supposed to believe that the British economy’s been doing better than the Germans ? Here’s part of the report from Bild and Die Welt:-

    “According to the European Commission, Germany makes the fourth highest per capita net contribution to the EU at €176 with the UK at €178, the Netherlands at €219 and Sweden at €226. Slovakia is the highest net recipient per capita at €571 followed by the Czech Republic at €541, Hungary at €470 and Greece at €454.”

    Little wonder the EU deplores our departure, or that E.Europeans, whilst deploring EU immigration policy, are so eager to remain.

    Like

  15. Anticipating possibly Gemma’s comments on DB, my view is that the public and official picture is unlikely to be accurate given the accounting policies allowed to banks (all – not just DB) are designed to defer loss recognition and also to allow management to massage the numbers. A more realistic approach would be too shocking so we have zombie banks gradually unwinding losses over years – rather than taking things on the chin. So cntrl P. Extend and pretend.

    DB is pretty bad by all accounts, and I wonder if even Germany has the funds to cover this mess – especially now that it has effectively lost control of its currency. Wonder what the quid pro quo will be from the ECB/EU/IMF to bail DB? Can’t see Merkel allowing a bail in? My guess is fiscal transfers to club med for ever. In disguise. With a skim off to someone.

    http://www.zerohedge.com/news/2016-08-10/deutsche-bank-unexpectedly-found-have-massive-capital-gap-larger-its-entire-market-c

    Like

  16. MarkJF

    From the article you linked to:“”In Sweden the state stepped in in 1992, filleted out unprofitable divisions and left stable companies. It was a successful, temporary nationalisation. The goal had always been to enable a clean-up and to then get out again.”

    I don’t think Deutsche would like being taken care of by the German state, especially if they have such draconian ideas in mind.

    Which is why I suggested that the British idea of “nationalization” was merely a government bailout, rather than anything more necessary. After all, after nationalization á la Anglaise, RBS was in seventh heaven! Do as they please, spend a pile, open a few cases of Bollinger and get bailed out afterwards.

    Only remember what happened to DSK when he thought of allowing the Irish government to do a Swedish on their banks… I wonder what they would do to Merkel if she had anything similar in mind! She’s lambasted in the Mainstream Media as much as poor old Corbyn these days. What more can they do to an elected head of government? How can they get Germany to give the money to Deutsche and leave the poor darling bank alone.

    That is the question.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s