While the world is terrified about what China – where corporate bond defaults are now permitted – may be about to unleash on the world, most are all too happy to remain in a state of delightful ignorance. We decided to take a peek behind the scenes.
Many recent reports have talked about the huge growth in China’s debt in recent years, much of it outside usual banking channels. One such report is this video called How China Fooled the World with Robert Peston.
Even the “big cap” multiple embedded in the S&P500 is stretched to nearly 19X trailing GAAP earnings—the exact top-of-the-range where it peaked out in October 2007. And that lofty PE isn’t about any late blooming earnings surge. At year-end 2011, the latest twelve months (LTM) reported profit for the S&P 500 was $90 per share, and during the two years since then it has crawled ahead at a tepid 5 percent annual rate to $100.
Jim Rickards says the Fed has the worst forecasting record of any major economic institution in the world, and this led them to taper into weakness. A US recession, he says, is almost certain this year. “All the major areas – Europe, the United States, Japan and China – all have to make structural adjustments. We have a structural depression in the world; you cannot solve a structural problem with monetary solutions, which is what everyone is trying.”
“We’ve got corporations sitting down and redesigning curriculum. It’s no longer educators and experts. Is the purpose to develop, or is it to make young workers for the oil companies?” he asked.
Swan Song (westcoastjan)
On April 7th it looks like the separatist PQ government in Quebec will win a majority (or so say the polls). The grandmotherly Pauline Marois, who sold here 12,000-square-foot mansion, ‘La Closerie’ last year for $6.5 million, is committed to another referendum on taking the province out of Canada.
Boring, right? Been there, done that. But this time she has Peldeau fisting the air beside her, crying “Un pays!” It makes all the difference, because he’s a home-grown billionaire who happens to control what 40% of what all Quebeckers see and read. He’s the majority owner of a media empire which includes the Journal de Montreal, the TVA television network, cable giant Videotron plus the Sun newspaper chain.
Gas Wars: Will US Export LNG to Europe? (James S.)
For Ukraine, getting the US to export liquefied natural gas (LNG) to Ukraine and to the wider Central European region, is now more vital than ever. And if this conflict escalates, it could derail gas deliveries bound for Europe, because much of Europe’s gas goes through pipelines that pass through Ukraine.
Is pee-power really possible? (westcoastjan)
Last year, a group of researchers at Bristol Robotics Laboratory in the UK proved they could power a mobile phone with human urine. Their device uses what’s known as microbial fuel cells, or MFCs, to generate enough energy for a smartphone to text, browse the internet and make short phone calls. But they believe, in time, it could eventually help power houses, buildings, and maybe even entire off-grid villages.
Gold & Silver
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