Daily Digest

Image by EpSos.de, Flickr Creative Commons

Daily Digest 1/27 - Hedge Funds Betting Against China, U.S. Net Worth Declines By $1.2T

Wednesday, January 27, 2016, 10:23 AM

Economy

Slowing emerging markets hamper oil recovery: World Bank

The World Bank has warned that slowing emerging-market economies were hampering an oil recovery, and prices could sink further in a blow to a "fragile" global economy. Crude oil in 2016 is projected to come in at USD 37 a barrel, down from its October estimate of $51, the World Bank said in a new quarterly report.

Mohamed El-Erian warns about a day of reckoning

"Either we validate the financial asset prices and growth faster, or alternatively we will slip into a global recession with financial disorder," El-Erian told CNBC's " Squawk Box ." He put a timetable of about three years on the outcome.

JPMorgan Cuts S&P 500 Forecast, Citing ‘Earnings Recession’ Risk

JPMorgan Chase & Co. cut its forecast for U.S. stocks by 9.1 percent, saying heightened market volatility could damage the broader economy and bring about an earnings recession.

U.S. recession cries get louder

The chance of the U.S. sinking into a full-blown recession now stand at 18%, according to a CNNMoney survey of economists this week. That's nearly double what the nation's top economic policymaker predicted only a month ago.

Nigeria Flirts With Economic Disaster as Currency Controls Stay

Central bank Governor Godwin Emefiele on Tuesday resisted calls -- again -- to weaken the currency despite a plunge in oil prices that’s slashed revenue in Africa’s biggest crude producer. He stuck to his foreign-exchange restrictions that have led to capital flight, curbed output in the continent’s largest economy and led to the naira dropping to a record low on the black market.

Resentment simmers as Greece launches debate on pension reforms

Government officials say the pension system, which costs about 28.5 billion euros a year, is in need of a total overhaul before it faces collapse.

Corporate credit shock beckons for China

Default risks for a pile of $15tn in Chinese corporate debt are rising to their highest levels since the 2008 financial crisis as sluggish demand, weak pricing and high leverage sap the dynamism of the country’s most powerful companies.

NYU's Altman Says U.S. Defaults to Climb, Recession More Likely

“There is no question in my mind this year default rates will go beyond the average rates, maybe a lot more,” said Altman, who was speaking at the Turnaround Management Associations’ Annual Altman Luncheon Conference in New York Monday. Altman teaches finance at NYU and is considered a specialist in credit markets.

How Bad is Venezuela's Economic Situation?

Venezuelan consumers saw the cost of food lurch upwards by 55.7 percent in the third quarter. Overall, food costs rose a whopping 254.3 percent in 2015 – a figure that easily surpasses wage increases by any measure. Increases of basic food costs disproportionately impact the poor, who typically spend a larger chunk of their income on necessities like staple foods. However, the BCV's numbers also show the state apparatus as a whole is also bearing a heavy load.

EU pension stress tests show hit from low interest rates

Even before applying any shock scenarios, it found liabilities exceeded assets by about 428 billion euros ($464 billion), or 24 percent of total liabilities, under its common methodology. That deficit ballooned out to 773 billion euros under a severe adverse market scenario that included a fall in asset prices and interest rates, as well as an increase in inflation rates.

Brazil Current Account Gap Narrows as Downturn Sinks Imports

Brazil’s deteriorating economy is weighing on foreign investor sentiment as well, with direct investment from abroad shrinking to $75.1 billion last year from $96.9 billion in 2014, the central bank said.

Singapore's 80-cent loans not cheap enough for distressed funds

Non-performing loans in Indonesia, Singapore and Thailand are at their highest levels in at least five years, according to data from the nations' central banks. Net troubled loans rose to 0.8 per cent of all bank assets in Singapore in the third quarter of 2015, the highest for a three-month period since that ending March 2010, official data show.

China's plan to slash steel production capacity 'threatens 400,000 jobs'

China's plan to slash crude steel production capacity could eliminate 400,000 jobs and may fuel social instability, according to the state-run metals industry consultancy.

S&P warns South Africa of downgrade over weak growth, state firm bailouts

Ratings firm Standard and Poor's (S&P) has warned that weak South African economic growth and government bailouts of state-owned companies could see Africa's most industrialised nation downgraded to junk soon.

Fitch: U.S. High Yield Bond Default Tally Reaches 74 in 2015; Default Rate 3.4%

In 2015 74 U.S. high yield defaults, totaling $48.3 billion in outstanding bonds, defaulted on their debt, according to Fitch Ratings. This is up sharply from 37 companies with $31.7 billion in outstanding bonds in 2014 and the highest levels seen since 2009.

Atlantic City mayor, council to explore bankruptcy Tuesday

As ratings agencies sound the alarm that the city could soon default on its debt, the city’s elected officials will consider bankruptcy Tuesday at an emergency council meeting.

Freeport questions Indonesia's demand for smelter deposit

A halt in exports would deal a blow to Freeport's profits and deny the Indonesian government desperately needed revenue from one of the country's biggest taxpayers. It would also buoy global prices of the metal that have slipped 6 percent so far this year on worries over a glut.

U.K. Flirts With Failed Debt Auction as Analysts Wince at Depth

An offering Jan. 20 that attracted the lowest demand in nearly seven years might be a warning sign for buyers who haven’t balked at acquiring all the targeted debt since a March 2009 auction. Robert Stheeman, chief executive officer of Britain’s Debt Management Office, reiterated Monday that he can’t rule out an uncovered auction happening “at some point.”

Obamacare enrollment projections down nearly 40 percent

Obamacare enrollment is lagging far behind what economists had projected, the Congressional Budget Office said in a new report that cuts the total number of customers expected to buy plans on the exchanges from 21 million down to just 13 million this year.

Hedge funds betting against China eye 'Soros moment'

Every month that they hemorrhage cash, people look at it and say, 'well now if they weren't able to defend the currency last month, now they're even weaker'."

Emerging Stocks Fall as China Rout Deepens; Ruble Swings on Oil

China’s outflows in December increased by almost $50 billion from a month earlier, highlighting the battle facing policy makers trying to hold up the yuan amid the slowdown, according to estimates compiled by Bloomberg Intelligence. Growth in the world’s second-largest economy is seen dropping further in 2016 from the weakest pace since 1990 last year, damping prospects for exports from countries such as Brazil and South Korea that count China among their biggest trading partners.

U.S. Net Worth Declines By $1.2 Trillion

We have become accustomed to constantly setting new records for U.S. net worth every quarter. Even with slow economic growth, the U.S. has experienced a record-breaking total net worth every quarter since 2012. That string was broken in the third quarter of 2015, according to the recent Flow of Funds section from the Financial Accounts of the United States report by the Federal Reserve.

China's 2015 bond issuance surges 88% to S$4.85 trillion

China's total bond issuance jumped to 22.3 trillion yuan (S$4.85 trillion) in 2015, up 87.5 per cent from the previous year, official figures, driven by a new debt-swap programme introduced last year and strong corporate issuance.

Weak Singapore Dec factory output may lead to downgrade in Q4 GDP

Singapore's industrial production in December suffered its biggest slump in eight months on a year-on-year basis, raising the prospect of the government revising down fourth-quarter economic growth from its initial estimate.

China’s Gold Imports From Hong Kong Jump to Highest Since 2013

China’s imports of gold from Hong Kong surged 67 percent to the highest level in more than two years in December as stock market turmoil and anticipation of a further weakening in the nation’s currency spurred demand for a haven.

Hungary Holds Rates and Considers More Unconventional Easing

Hungary’s central bank left its benchmark rate unchanged for a sixth month, as policy makers said they’re ready to consider more unconventional monetary easing if needed to combat lower-than-forecast inflation and slowing economic growth.

Japan rules out negative rates as it mulls expanding QE

BoJ officials see room to increase the pace of their asset purchases from Y80tn a year, but worry that if they do so while also ruling out negative interest rates, markets will believe they have run out of options.

Draghi Says ECB Credibility Hinges on Meeting Inflation Goal

ECB policy makers have less than seven weeks until a March 10 meeting when they’ll decide whether their 1.5 trillion-euro ($1.6 trillion) bond-purchase plan and negative interest rates are enough to meet their inflation goal of just under 2 percent. With slumping oil costs weighing on consumer prices that are already close to stagnating, Draghi is trying to convince investors that the central bank remains willing to act if needed.

Cash Is King as Europe Adapts to Negative Interest Rates: Chart

Europe’s ATMs worked overtime in 2015. A record 1.08 trillion euros ($1.17 trillion) of banknotes were in circulation, almost double the value 10 years ago, according to data compiled by the European Central Bank. That’s a counterargument to some bankers who say that electronic forms of cash will replace paper money sooner rather than later.

Won Leads Declines in Asia on Slowing Korea Growth, Outflows

The won led declines in Asian currencies after data showed South Korea’s economy slowed and global investors pulled money from the region’s stocks as a drop in oil prices deterred risk-taking.

Gold & Silver

Click to read the PM Daily Market Commentary: 1/26/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

9 Comments

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2890
9/11

Repost from another thread. As a general theme, something to consider.

9/11 Shock Opera… Act 4 – Building 7 and Flight 93: The Grand Finale that Wasn’t (Scott Creighton)

If Plan B For WTC7 Is Too Obvious, What Was Plan A? (Pilots for 9/11 Truth forum)

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4239
China Buys All the Gold Produced in 2015 (and more)

(listen from 36 minutes to the end)

China Buys All the Gold Produced in 2015 (and more) (McAlvany)

Kazakhstan Lifts Gold Holdings in 2015 as Central Banks Buy

Bloomberg-11 hours ago
Central banks including China and Russia's have been beefing up holdings of gold over 2015 and net purchases have become a “familiar theme” in the global ...

Draghi Drives $1 Trillion of Euro Debt Below Deposit Rate: Chart

Bloomberg-7 hours ago
European Central Bank President Mario Draghi added fuel to a race to the bottom in the region's government-debt yields with a series of comments in the past ...

They Could Even Buy Ketchup: Investors See No Limit to BOJ Tools

Bloomberg-16 hours ago
Mitsubishi UFJ Morgan Stanley Securities Co. says increasing buying of Japanese government debt to 100 trillion yen ($845 billion) a year from the current 80 ...

Europe Bank Rout Erases $434 Billion, Twice Greek Economy: Chart

Bloomberg-8 hours ago
Banking stocks have fallen 14 percent in January alone, heading for their worst monthly performance since the depths of Europe's sovereign-debt crisis in 2011.

Canada could face $50-billion in deficits over two years, economists ...

The Globe and Mail-5 hours ago
... a sovereign with fiscal capacity to spare,” Mr. Rangasamy and Mr. Lovely said. ... “But given earlier success in working down the debt burden, Ottawa could ...

Rising Recession Risk Tightens South African Central Bank Bind

Bloomberg-8 minutes ago
The risk of a recession in South Africa this year is mounting, making policy decisions more difficult for a central bank battling to balance the need to contain ...

Poland may water down FX loans conversion plan if costs too high

Reuters-7 hours ago
Polish central bank governor Marek Belka warned in December that a simultaneous introduction of a tax on bank's assets and the conversion of Swiss franc ...

Oil Bust May Put Onus on Pimco to Give Rio Retirees Debt Relief

Bloomberg-1 hour ago
Newport Beach, California-based Pimco, which oversees $1.43 trillion, owns 4.9 ... percent and 38.72 percent of Rioprevidencia's debt due 2024 and 2027.

Credit Market Turmoil Crimps Bond Sales in Worst Start Since '05

Bloomberg-6 hours ago
Bond investors who gobbled up $29 trillion of corporate debt since the financial crisis have mostly avoided all but the highest-quality issuers. AB InBev received ...

Rajan Seen Buying Extra $4 Billion of India Bonds After Outflows

Bloomberg-15 hours ago
The central bank began buying debt last month after a gap of almost two years and ... Bank of America Merrill Lynch estimates the gap will be about 1.8 trillion ...

Houston Mayor Wants 'Shared Sacrifice' to Ease Pension Shortfall

Bloomberg-17 hours ago
Houston isn't ready to boost property taxes like Chicago did even as it considers extending repayment of its debt and works to plug its more than $5 billion ...

Chicago Schools in Fiscal Limbo as Clash Builds Before Bond Sale

Bloomberg-46 minutes ago
That's 5 percentage points above benchmark debt that matures in 29 years, ... $11 billion of state and local debt, including some of the board's securities.

Illinois' IOU backlog soon could rival Quinn's worst

Crain's Chicago Business (blog)-5 hours ago
Projections from Rauner's budget are that the total will hit $9 billion by the end of ... For the record, Moody's now rates Illinois debt Baa1 with a negative outlook.

Oil Rout Has Banks Reining in Risky Loans, Adding to Energy Woes

Bloomberg-10 hours ago
Oil-and-gas securities accounted for 31 percent of the total amount of debt trading at a ... The bank held as much as $17 billion in energy loans as of Jan.

Oil slump forcing Malaysia to cut spending, widen fiscal deficit target

The Star Online - ‎10 hours ago‎
Economists expect budget spending to be cut about 2.5 percent, or nearly 7 billion ringgit ($1.65 billion), and the fiscal deficit target to be raised to 3.3 percent of gross domestic product from 3.1 percent. Some also expect this year's GDP growth ...

Wolf warns of 'train wreck' without balanced Pa. budget

Elmira Star-Gazette - ‎15 hours ago‎
The Republican-controlled House and Senate reconvened Tuesday amid a 7-month-old budget fight that's left billions in school aid in limbo, but lawmakers took no action on budget-related legislation. In two weeks, Wolf is scheduled ... “If we don't fix ...

Fitch Warns of Another Poland Downgrade If Budget Deficit Swells

Bloomberg-7 minutes ago
“If we were to see a policy announcement resulting in the deficit being higher, ... The Polish president's plan to fix payments on the equivalent of $42 billion of ...

Swiss government sees structural budget deficit swelling

Reuters-3 hours ago
ZURICH Jan 27 The Swiss government projected rising structural budget deficits through 2019 due to infrastructure spending, corporate tax and pension reforms ...

California on the hook for $74 Billion in health care costs for retirees

Central Valley Business Times - ‎19 hours ago‎
“California has a duty to ensure it can meet obligations to workers who earned these retirement benefits,” says Ms. Yee, the state's chief fiscal officer and a board member of CalPERS and CalSTRS, the nation's two largest public pension systems. “We ...

Markets braced for Venezuela debt default

Financial Times-21 hours ago
Two years ago, distressed debt investors began to refer to Argentina, Ukraine and Venezuela as the unholy trinity, the three countries considered most likely to ...

Investors sell emerging markets debt at record pace

Financial Times-3 hours ago
... bond market by investors — underline the rapid pace at which EM companies, especially commodity exporters, took on foreign currency debt after the crisis.

Rush for the exits: why China's capital flight carnage will continue

Telegraph.co.uk - ‎20 hours ago‎
Policymakers cannot control capital flows, monetary policy and the currency all at the same time. Mr Piron said that the outflows have captured the “conflict between easing monetary conditions on one hand and contradictory attempts at foreign exchange ...

Yuan drop may spur new Plaza Accord, Deutsche Bank says

Chicago Tribune-22 hours ago
The world's central banks should plan for coordinated currency intervention akin to the 1985 Plaza Accord to support the Chinese yuan and keep the dollar from ...

Capital controls no longer taboo as emerging markets battle flight

Financial Times-27 minutes ago
When Haruhiko Kuroda, governor of the Bank of Japan, suggested last week that China should use capital controls to support its currency, it was as if he had ...

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Hillary's friend buys a stake in the Onion.

https://theintercept.com/2016/01/26/ha-ha-hillary-clintons-top-financial...

But what’s gotten no attention at all is that Haim Saban, Hillary Clinton’s biggest fan and financial supporter, is Univision’s co-owner, chairman, and CEO. Saban and his wife, Cheryl, are Hillary Clinton’s top financial backers, 

 

Mark Cochrane's picture
Mark Cochrane
Status: Diamond Member (Offline)
Joined: May 24 2011
Posts: 1227
Where have we heard this before?

What will the US State Department say this time?

 

Israeli defence minister accuses Turkey of buying IS oil

Israel's defence minister has accused Turkey of buying oil from the so-called Islamic State (IS) group, thereby funding the militants' activities.

Speaking in Athens, Moshe Yaalon said IS had "enjoyed Turkish money for oil for a very, very long period of time".

Turkey denies allowing IS smuggling and the US recently rejected Russian claims that Turkish government officials were in league with the militants.

----

Mr Yaalon also alleged that Turkey had "permitted jihadists to move from Europe to Syria and Iraq and back".

US state department officials last month rejected Russian allegations of Turkish government involvement but a state department spokesman said IS oil was being smuggled into Turkey via middlemen.

mememonkey's picture
mememonkey
Status: Gold Member (Offline)
Joined: Nov 1 2009
Posts: 257
Israeli comment is an interesting development

Israel calling out Turkey on stolen IS oil and aiding and abetting ISIS Jihadis  is an interesting development.

Israel, is involved in the same Byzantine world of clandestine oil purchases that the IS and Kurdish oil travel in to Turkey and  serves as a  refining destination and transhipment hub for crude of oil dubious origins itself.  They are also aligned with the geo strategic objectives of the Saudi's, gulf states and the Turks when it comes to ISIS vs Assad in Syria. 

There are reports and they have admitted to actually providing  medical aid to ISIS fighters.  http://www.globalresearch.ca/israeli-military-admits-to-supporting-al-qa...

I would be very curious as to why that statement was made   by a high level Israeli official, essentially throwing Erdogan heretofore an ally in the Syrian regime change efforts, under the bus and what it portends  

Perhaps a fresh face is needed in Ankara.  Erdogan is vulnerable on the corruption front, and in Turkey there is always a military coup option waiting in the wings.  Fun fact:  The concept and term 'Deep State'  was actually coined to describe the functioning of the actual power behind the government for Turkey.

mememonkey

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
A quiet conversation.

I admire both the form and the substance of this conversation with PC Roberts. 

If I were to live in the US I think that Georgia would suit me. 

 

(Don't panic.)

VeganDB12's picture
VeganDB12
Status: Platinum Member (Offline)
Joined: Jul 18 2008
Posts: 757
Another soft spoken Georgian

http://<iframe width="560" height="315" src="https://www.youtube.com/embed/hDsPWmioSHg" frameborder="0" allowfullscreen></iframe>

 

I am sorry I still cannot embed videos :(

1 minute 26 second video that Jesse posted yesterday of Carter identifying the oligarchy. Music starts when he speculates as to what public response could be...

sand_puppy's picture
sand_puppy
Status: Diamond Member (Offline)
Joined: Apr 13 2011
Posts: 2037
Mike Lofgren, Thom Hartmann

VeganD,  Were you referring to this interview of Mike Lofgren by Thom Hartman posted on Jesse's American Cafe yesterday?

Introducing his new book: The Deep State: The Fall of the Constitution and the Rise of a Shadow Government

MarkM's picture
MarkM
Status: Platinum Member (Online)
Joined: Jul 22 2008
Posts: 855
Further down the page

SP,  the Jimmy Carter snippet further down the page. Sums up a big part of the problem in a couple of minutes.

Oh, and....PCR for president. Can you imagine someone that was respected on a national level sitting down and talking to the American people in this manner? Dreams.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments