- Canadians, fasten your seat-belt. Here are the charts.
- The Financial Crisis in the US was a consequence of too much debt and too much risk, among numerous other factors, and the whole house of cards came down. Now, after eight years of experimental monetary policies and huge amounts of deficit spending by governments around the globe, public debt has ballooned. Gross national debt in the US just hit $20.5 trillion, or 105% of GDP. But that can’t hold a candle to Japan’s national debt, now at 250% of GDP.
- And private-sector debt, which includes household and business debts — how has it fared in the era of easy money?
- In the US, total debt to the private non-financial sector has ballooned to $28.5 trillion. That’s up 14% from the $25 trillion at the crazy peak of the Financial Crisis and up 63% from 2004.
Read more at:Whose Private-Sector Debt Will Implode Next: US, Canada, China, Eurozone, Japan?
- Is the stock market bubble about to burst? I know that I have been touching on this theme over and over and over again in recent weeks, but I can’t help it. Red flags are popping up all over the place, and the last time so many respected experts were warning about an imminent stock market crash was just before the last major financial crisis. Of course nobody can guarantee that global central banks won’t find a way to prolong this bubble just a little bit longer, but at this point they are all removing the artificial support from the markets in coordinated fashion. Without that artificial support, it is inevitable that financial markets will experience a correction, and the only real question is what the exact timing will be.
- For example, Bank of America’s Michael Hartnett originally thought that the coming correction would come a bit sooner, but now he is warning of a “flash crash” during the first half of 2018…
Read more at:Bank Of America Analyst: A ‘Flash Crash’ In Early 2018 ‘Seems Quite Likely’
- Whenever we see an inverted yield curve, a recession almost always follows, and that is why many analysts are deeply concerned that the yield curve is currently the flattest that it has been in about a decade. In other words, according to one of the most reliable indicators that we have, we are closer to another recession than we have been at any point since the last financial crisis. And when you combine this with all of the other indicators that are screaming that a new crisis is on the horizon, a very troubling picture emerges. Hopefully this will turn out to be a false alarm, but it is looking more and more like big economic trouble is coming in 2018.
The professionals on Wall Street take the yield curve very, very seriously, and the fact that it has gotten so flat has many of them extremely concerned. The following comes from Business Insider…
Read more at:The Yield Curve Has Not Been This Flat In 10 Years, And Many Believe This Is A Sign That A Recession Is Imminent
- It’s a wake-up call for a lot of people who will say ‘Look, the stuff I own is actually very risky‘…” warns Ray Jian, who oversees about $6 billion at Pioneer Investment Management Ltd. in London. “People have been ignoring risks in places like Lebanon for a long time,”and the official default of Venezuela this week has emerging-market money managers are looking to identify countries that might run into trouble down the road.
- While Bloomberg reports that while none are nearly as badly off as Venezuela – where a combination of low oil prices, economic mismanagement and U.S. sanctions did the country in – traders are scouting for credit risk, from Lebanon, where Prime Minister Saad Hariri’s sudden resignation has once again thrust the nation into a Saudi-Iran proxy war, to Ecuador, where recently elected President Lenin Moreno continues to expand the debt load in a country with a history as a serial defaulter.
Read more at:Who’s Next? Venezuela’s Collapse Puts These Nations At Risk
- In a speech that did little to calm investors’ nerves, Italy’s finance minister said yesterday that he was “strangely optimistic” about Italy’s economic outlook. Senior eurocrats in Brussels are far from convinced. “Italy’s accounts are not improving,” blasted European Commission Vice-President Jyrki Katainen at a press conference yesterday.
- The financial situation in Italy, according to Katainen, is due to get worse with Italy’s deficit in 2018 now predicted to be €3.5 billion more than previously stated by Paolo Gentiloni’s administration in the spring. “The only thing I can say in my name is that all Italians should know what the real economic situation in Italy is,” he said.
Read more at:The Next Italian Bank Threatens to Topple
- Needless but highly profitable forced-upgrades are the bread and butter of the tech industry.
- One of the enduring mysteries in conventional economics (along with why wages for the bottom 95% have stagnated) is the recent decline in productivity gains (see chart). Since gains in productivity are the ultimate source of higher wages, these issues are related. Simply put, advances in productivity are core to widespread prosperity.
- But that’s only half the problem–productivity gains have flowed to the top of the income-wealth pyramid as financialization and cartels have replaced real-world wealth creation as the source of wealth-income.
Read more at: Is This Why Productivity Has Tanked and Wealth Inequality Has Soared?
- In this scenario, time is running out for Saudi Arabia’s free-spending royalty and state– and for all the other free-spending oil exporters.
- The discovery of new oil fields has fallen far below global consumption.While there are numerous dynamics at work in the turmoil roiling Saudi Arabia and by extension, the Mideast, one way to cut to the chase is to follow the oil, follow the money. Correspondent B.D. recently posited afactor that has been largely overlooked in the geopolitical / fate-of-the-petrodollar discussions:
- Perhaps the core dynamic is a technical one of diminished oil production. Here is Bart’s commentary:
- “I think the Saudis may be quickly running out of profitable oil to produce/export.
- I think they tried to over-produce for a while to damage the competition… and they now have production issues resulting from that. (As has happened in the past)
Read more at:Mideast Turmoil: Follow the Oil, Follow the Money