Today's Quote: "I think people are realizing monetary policy is at its maximum point ... and growth doesn't look like its accelerating." Priya Misra, head of global rates strategy at TD Securities in New York
3--The Calm Before the Coming Global Storm, Pepe Escobar
Russia’s largest commodity exchange is actively courting international oil traders to join its emerging futures market. The goals are crystal clear; to disconnect the price-setting mechanism from the Brent oil benchmark and, crucially, to move away from the petrodollar. That also happens to be a key condition imposed by Beijing to the House of Saud for continuing to buy their oil....
No wonder the astonishing spread of Chinese economic power has left assorted Exceptionalists – from neocons to neoliberalcons – totally deranged. Washington has absolutely nothing to offer to nations across Asia, Africa and Latin America – to the whole Global South for that matter. They have all seen how Beijing is not in the market demanding Mob-style compound interest on sovereign debt; “support” for neo-imperial moves by NATO or the UN; one more extra-territorial hub for the US Empire of Bases; or total domination of their central banks.
On the other hand, they have seen what Washington does offer; endless war; the progressive smashing of the nation state; democracy blasted to smithereens; and technocratic governance by the 0.00001%.
Relapses are the consequence of “epic” recessions such as occurred in 2007-09, which are typically characterized by short, shallow recoveries that slip repeatedly into periodic bouts of renewed stagnation. They are the result of near total reliance on central bank monetary policies that are designed to boost stock, bond and other financial markets — and thus the incomes of rich investors — but which fail to generate a sustained real economic recovery. Fiscal policies designed to stimulate consumption and good paying jobs are rejected. That almost perfectly describes U.S. economic policy the past eight years.....
Last quarter’s 0.5 percent U.S. GDP may indicate the nation’s economy is even weaker than it appears. The economy of the United States’ recent 0.5 percent growth rate is the latest in a steady declining U.S. GDP growth trend over the past year. In the previous fourth quarter 2015, the US economy grew 1.4 percent, which was down from the preceding quarter’s growth of 2 percent and before that 3.9 percent. So the U.S. economy appears to be slowing rapidly over the past year.
Over an even longer period of more than eight years, since the previous peak growth in late 2007, the U.S. economy has grown by a cumulative total of only 10.1 percent. That’s a paltry annual growth of only 1.2 percent a year on average for the past 8+ years.
But even those figures are overestimated. In 2013, the U.S. redefined the way it estimated GDP, adding categories like R&D expenses and other intangibles that artificially boosted U.S. GDP estimates simply by redefining it. That “economic growth by redefinition” raised GDP by around 0.3 percent annually, and in dollar terms by roughly US$500 billion annually. So the real U.S. GDP may be actually growing by less than 1 percent on average per year since 2007; and during the most recent quarter, January-March 2016, the economy may not have grown at all, but may have stagnated, collapse, and come to a halt....
Not satisfied with the media-press definition of a recession as two consecutive quarters of negative GDP, US economists at the National Bureau of Economic Research, who are tasked with declaring the beginning and end of a recession, look at various economic indicators — like industrial production, retail sales, exports-import trends, and other sources. A recession may occur in just one quarter; or may require more than two.
Looking at these other indicators for this past January-March 2016 period, the US economy appears even more likely headed for a recession and sooner rather than later....
Business investment is another trouble spot. Investment in business structures fell by -10.7 percent and investment in new equipment by -8.6 percent, the latter the biggest drop since the 2007-09 recession. Business inventories rose barely, by the smallest amount in two years, continuing a slowing trend of the past nine months.
And what about consumption, which constitutes about two thirds of the total US economy? US consumer spending has been growing at an average monthly rate of only 0.1 percent. Retail sales, the largest element of consumer spending, has fallen every month on average during the quarter. After having sustained retail sales in previous years, auto sales, a large component of retail sales, declined for the second consecutive quarter during the January-March period. The outlook for U.S. consumer spending recovery is also not too bright. A recent Gallup poll reported that 60 percent of those interviewed indicated the U.S. economy was “getting worse.” Reflecting the poor demand for consumer goods, U.S. consumer prices now hover on the brink of deflation, falling at an average monthly rate of -0.1 percent for the quarter....
Politicians Wearing Rose-Colored Glasses
Despite the facts, U.S. government politicians and Federal Reserve bank officials continue to run around declaring that the U.S. economy is performing well. They like to cite the 200,000 jobs allegedly created in recent months. But a closer examination shows the jobs being created are part time, temp, contract, low paid, no benefit service jobs. Jobs that generate no overall wage increase for the economy and no real income gains for working people.
Since 2011, $2 trillion in stock buybacks, while market cap is up $11 trillion.. Current buyback slowdown by 50%...Income growth is zero
No new money since 2011 from retail investors. All from companies buying back their own stock
What should investors do?
According to military spokesperson of the U.S. alliance against the Islamic State, Colonel Warren, the "rebel" occupied parts of Aleppo city are under control of al-Qaeda:
[I]t's primarily al-Nusra who holds Aleppo, and of course, al-Nusra is not part of the cessation of hostilities. So it's complicated.
Two UN Security Council Resolution calls on all UN members to "eradicate" al-Qaeda/al-Nusra. ALL UNSC members agreed to Resolution 2254 which:
Reiterates its call in resolution 2249 (2015) for Member States to prevent and suppress terrorist acts committed specifically by Islamic State in Iraq and the Levant (ISIL, also known as Da’esh), Al-Nusra Front (ANF), and all other individuals, groups, undertakings, and entities associated with Al Qaeda or ISIL [...] and to eradicate the safe haven they have established over significant parts of Syria, and notes that the aforementioned ceasefire will not apply to offensive or defensive actions against these individuals, groups, undertakings and entities,...