China's banks may fall short of their 2012 loan targets, say several officials, thanks to a drying-up in demand from their biggest customers - large state-owned firms. Bank loans dove 33% April and the May figures may be worse, with only ¥34B ($5.4B) advanced through May 20 (¥682B was loaned in April). The news seems to have hit stocks and the aussie dollar, off 40 pips in a few minutes. [View news story]
China and EU weakness will continue to flow through to US equities and lower prices yet still on the way.
With the focus so strongly on Europe, it has been easy to miss the data pointing to economic trouble in China, India, South Africa, Brazil and elsewhere. The specter of renewed crisis looms large if activity is slowing in sync around the globe and not just in isolated regions. [View news story]
Ahhh the truth is finally getting out. US equity bulls continue to delude themselves, but the day of reckoning draws ever closer now.
BJ, The corporate & wealth dollars going into national political campaigns and political advertising dwarfs any union campaign contributions. That is not to say that public unions such as firefighters, police, teachers, etc. have not grossly abused the taxpayers with excessive relative wages, excessive pension plans, and the like. Because they absolutely have. But it is the incompetent local politicians who have permitted that over many decades. Which they have just begun to address at the local and state levels, with much more to come, as local taxpayers will just not foot the tab anymore. But at the national level, unions have nowhere near the impact that corporations, wealthy individuals, and special interest groups have.
Plunging Commodity Prices Are Ominous For Stock Market [View article]
cay, Wrong. Of course the US can do a lot to effectively compete. But they are all major structural changes which the US vested interest groups fight to retain their excess rents and preferences for. Any of the following could make the US much much more competitive: 1) reduce military spending by significant amounts. 2) nationalize healthcare and radically cut costs. 3) make the income tax code efficient and "fair". 4) regulation - significantly reduce and combine regulation at federal & state levels. 5) education - significantly improve education and reduce costs.
And many many others. The key is efficiency, productivity, cost effectiveness, etc. The US could radically reduce costs and greatly increase outcomes, productivity, and efficiency. It has been done in other countries such as Holland (healthcare), Denmark (education), and Germany (labor reform and regulation).
The US is just too "stupid" and too rooted in crony capitalism intertwined with political and regulatory capture to do what is right for the country and it's citizens. But it certainly could be done, even though it won't be done. It really has very very little to do with wage scales and wage costs and everything to do with a dysfunctional economy ruined by many absurd economic policies dominated by inept politicians and aided and abetted by crony capitalism and various special interest groups.
Ask yourself just one question ... why does the US have 100x per capita the number of lawyers that say Japan does or say Germany does? What is the cost to the economy of this gross inefficiency at the scale of 100x the cost of other developed economies?
JS, The problem is not even underwriting (recapitalizing) the EU banks or the Spanish banks. Such could be done. The problems is who has to take the losses, ie. the bank shareholders and bank bondholders. In order to recapitalize the EU banks the shareholders and much of the bondholders have to be wiped out. And of course these are the richest and most connected people in the EU. And they are not willing to take the losses. Rather they want the taxpayers to take the losses via inflation, via no cost loans from the ECB,. via subsidized loans from the ESFS, etc.
At least if the recapitalizations are done with taxpayers taking on the debt but getting most of the equity in the recapitalized banks, then they would later be able to resell the equity and pay off the debt. With the crony capitalists keeping all the equity then taxpayers will never be able to pay off the debts they are incurring to underwrite the banks for next to nothing.
The Current U.S. Stock Market Collapse Makes No Sense [View article]
II, No worries, it will go much lower yet. It is only a few multi-national and large dividend payers that are holding the US markets up. But the bulls will have to begin selling them so to pay for the margin calls coming on the rest of their losers soon enough.
Good stuff as always. The PPT did show up for the last couple of days and ramped the close. Gotta know the Fed is really getting desperate now. Tells you that QE is nowhere in sight, but the PPT will save the day for awhile anyway.
Charting Momentum In Latest Forex Cycles [View article]
Good article. Would not be at all surprised to see your scenario play out over the coming months. Higher US dollar will not be good for US equities or commodities or PM.
IT, See the following article: http://bit.ly/JqZkgV ======================... Allianz [ALV.PA Unavailable ()], with a total of about €1.7 trillion under management, has only 6 percent of its insurance portfolio in equities, while 90 percent is in bonds. A decade ago, 20 percent was in equities. It is far from alone: institutional investors, from pension funds to mutual funds sold directly to the public, have slashed holdings in the past decade. Stocks have not been so far out of favor for half a century. Many declare the “cult of the equity” dead. ======================...
That is pretty shocking. And per the FT article, plenty of former very large LT investors in the pension fund and other areas are following them out of equities and into bonds.
Best guess is that equities will have to fall considerably more in order to attract more buying interest from the big LT investors and so-called smart money. Such is likely the only way that equities can really fit into their risk profiles now.
All of these big LT investors face career risk and regulatory pressures and just will not face possible 50% drawdowns, unlike your other commentator who seems not to care if his portfolio declines hugely so long as he can keep getting some dividends. But it seems that more and more investors are willing to wait for much lower equity prices and less risk before committing to real LT equity investments.
Tax Policy: What Buffett Really Pays [View article]
A, It actually would be relatively simple to design a fair and efficient income taxation system, if TPTB would simply stick to basic principles and relative simplicity. But the first principle is that all income is the same - regardless of whether it is salary, wages, capital gains, tax exempt interest, retirement income, or whatever the source. The source makes NO DIFFERENCE. Every dollar received spends the same and should be taxed the same. One you establish that, it is relatively easy to design an income tax system with much lower progressive rates. Next you eliminate all deductions period, and just tax gross income. Again all progressive rates can then come way down. Next if tax policy is to be used it should only be done via direct tax credits not deductions, so that costs can clearly be identified and removed or added very easily year by year. And lastly all corporate taxes should be handled purely on GAAP net income with absolutely zero differences for taxable income and special corporate tax laws.
The problem is of course that the top 10% and all corporations benefit hugely from the massive tax preferences and absurd tax laws. And they would never agree to a simpler and fairer income taxation system. And the politicians would also never agree to a simple and fairer tax system, otherwise they have nothing to sell to special interests year after year to raise the billions in campaign contributions they get from the wealthy and corporations to game the income taxation system. But the reality is that all of us individual citizens end up paying for all of it.
China's banks may fall short of their 2012 loan targets, say several officials, thanks to a drying-up in demand from their biggest customers - large state-owned firms. Bank loans dove 33% April and the May figures may be worse, with only ¥34B ($5.4B) advanced through May 20 (¥682B was loaned in April). The news seems to have hit stocks and the aussie dollar, off 40 pips in a few minutes. [View news story]
With the focus so strongly on Europe, it has been easy to miss the data pointing to economic trouble in China, India, South Africa, Brazil and elsewhere. The specter of renewed crisis looms large if activity is slowing in sync around the globe and not just in isolated regions. [View news story]
The Inflation's In The Poverty [View article]
The corporate & wealth dollars going into national political campaigns and political advertising dwarfs any union campaign contributions. That is not to say that public unions such as firefighters, police, teachers, etc. have not grossly abused the taxpayers with excessive relative wages, excessive pension plans, and the like. Because they absolutely have. But it is the incompetent local politicians who have permitted that over many decades. Which they have just begun to address at the local and state levels, with much more to come, as local taxpayers will just not foot the tab anymore. But at the national level, unions have nowhere near the impact that corporations, wealthy individuals, and special interest groups have.
Plunging Commodity Prices Are Ominous For Stock Market [View article]
Wrong. Of course the US can do a lot to effectively compete. But they are all major structural changes which the US vested interest groups fight to retain their excess rents and preferences for. Any of the following could make the US much much more competitive:
1) reduce military spending by significant amounts.
2) nationalize healthcare and radically cut costs.
3) make the income tax code efficient and "fair".
4) regulation - significantly reduce and combine regulation at federal & state levels.
5) education - significantly improve education and reduce costs.
And many many others. The key is efficiency, productivity, cost effectiveness, etc. The US could radically reduce costs and greatly increase outcomes, productivity, and efficiency. It has been done in other countries such as Holland (healthcare), Denmark (education), and Germany (labor reform and regulation).
The US is just too "stupid" and too rooted in crony capitalism intertwined with political and regulatory capture to do what is right for the country and it's citizens. But it certainly could be done, even though it won't be done. It really has very very little to do with wage scales and wage costs and everything to do with a dysfunctional economy ruined by many absurd economic policies dominated by inept politicians and aided and abetted by crony capitalism and various special interest groups.
Ask yourself just one question ... why does the US have 100x per capita the number of lawyers that say Japan does or say Germany does? What is the cost to the economy of this gross inefficiency at the scale of 100x the cost of other developed economies?
Is The Market In Trouble? [View article]
The problem is not even underwriting (recapitalizing) the EU banks or the Spanish banks. Such could be done. The problems is who has to take the losses, ie. the bank shareholders and bank bondholders. In order to recapitalize the EU banks the shareholders and much of the bondholders have to be wiped out. And of course these are the richest and most connected people in the EU. And they are not willing to take the losses. Rather they want the taxpayers to take the losses via inflation, via no cost loans from the ECB,. via subsidized loans from the ESFS, etc.
At least if the recapitalizations are done with taxpayers taking on the debt but getting most of the equity in the recapitalized banks, then they would later be able to resell the equity and pay off the debt. With the crony capitalists keeping all the equity then taxpayers will never be able to pay off the debts they are incurring to underwrite the banks for next to nothing.
The Current U.S. Stock Market Collapse Makes No Sense [View article]
The Current U.S. Stock Market Collapse Makes No Sense [View article]
No worries, it will go much lower yet. It is only a few multi-national and large dividend payers that are holding the US markets up. But the bulls will have to begin selling them so to pay for the margin calls coming on the rest of their losers soon enough.
'Quit Jicky Jackin Around' [View article]
Charting Momentum In Latest Forex Cycles [View article]
Alpha Natural Resources: Estimating Risk Using The Altman Z-Score [View article]
No worries .... QE3,4,5 coming to the rescue for markets again likely after the Nov/12 elections. But ANR might be quite a bit lower by then.
Treasury Buyers Might Get Burned [View article]
See the following article:
http://bit.ly/JqZkgV
======================...
Allianz [ALV.PA Unavailable ()], with a total of about €1.7 trillion under management, has only 6 percent of its insurance portfolio in equities, while 90 percent is in bonds. A decade ago, 20 percent was in equities. It is far from alone: institutional investors, from pension funds to mutual funds sold directly to the public, have slashed holdings in the past decade. Stocks have not been so far out of favor for half a century. Many declare the “cult of the equity” dead.
======================...
That is pretty shocking. And per the FT article, plenty of former very large LT investors in the pension fund and other areas are following them out of equities and into bonds.
Best guess is that equities will have to fall considerably more in order to attract more buying interest from the big LT investors and so-called smart money. Such is likely the only way that equities can really fit into their risk profiles now.
All of these big LT investors face career risk and regulatory pressures and just will not face possible 50% drawdowns, unlike your other commentator who seems not to care if his portfolio declines hugely so long as he can keep getting some dividends. But it seems that more and more investors are willing to wait for much lower equity prices and less risk before committing to real LT equity investments.
A Simple Mining Insight [View article]
Tax Policy: What Buffett Really Pays [View article]
It actually would be relatively simple to design a fair and efficient income taxation system, if TPTB would simply stick to basic principles and relative simplicity. But the first principle is that all income is the same - regardless of whether it is salary, wages, capital gains, tax exempt interest, retirement income, or whatever the source. The source makes NO DIFFERENCE. Every dollar received spends the same and should be taxed the same. One you establish that, it is relatively easy to design an income tax system with much lower progressive rates. Next you eliminate all deductions period, and just tax gross income. Again all progressive rates can then come way down. Next if tax policy is to be used it should only be done via direct tax credits not deductions, so that costs can clearly be identified and removed or added very easily year by year. And lastly all corporate taxes should be handled purely on GAAP net income with absolutely zero differences for taxable income and special corporate tax laws.
The problem is of course that the top 10% and all corporations benefit hugely from the massive tax preferences and absurd tax laws. And they would never agree to a simpler and fairer income taxation system. And the politicians would also never agree to a simple and fairer tax system, otherwise they have nothing to sell to special interests year after year to raise the billions in campaign contributions they get from the wealthy and corporations to game the income taxation system. But the reality is that all of us individual citizens end up paying for all of it.
A Simple Mining Insight [View article]
A Simple Mining Insight [View article]