$1 Trillion worth of central banking money printing around the world just does not seem to go as far as it used to… behold, the death cross of faith in monetary policy.
Labor participation rate just dropped to a fresh 35 year low, hitting levels not seen since 1978, at 62.8%
And the piece de resistance: Americans not in the labor force exploded higher by 535,000 to a new all time high 91.8 million.
Is consumer confidence set to turn?
An even greater debt bubble…
Despite record levels of unemployment across Europe (most specifically among the youth), record high (and surging) levels of loan delinquencies, and collapsing credit creation, the leaders of the EU continue to peddle their own brand of dis-information and willful blindness. While UKIP’s Nigel Farage tongue-lashings are normally enough, EU’s Barroso this morning unleashed the following:
- *EU’S BARROSO SAYS ECONOMIC GROWTH ‘SLOWLY RETURNING’
- *EU’S BARROSO SAYS EU AT TURNING POINT IN CRISIS
On the tape, Mr. Juncker says he has “had to lie” and, speaking about touchy economic topics, “When it becomes serious, you have to lie.
Yes, Corporations Do Have Record Cash: They Also Have Record-er Debt, As Net Leverage Soars 15% Above Its 2008 Peak
From SocGen :US corporates do indeed hold lots of cash, which is currently at record levels, but they also hold record levels of debt. Net debt (so discounting those massive cash piles) is 15% above the levels seen in 2008/09. The idea that corporates are paying down debt is simply not seen in the numbers. What is true is that deleveraging has occurred through the usual mechanism of higher asset prices (no doubt an aim of central bank policy). This is the painless form of deleveraging. It is also the most temporary, for a simple pull-back in equities and rise in volatility will put the problem back on centre stage.
Tic (Treasury International Capital) data was recently released (Jan 15th 2014) produced a result that no one seems to talk about, all Foreign Ownership / Holders of US Treasury Securities have only increased from 5,538 Billion US$ (Nov 2012) to 5,717 (Nov 2013) an increase of only 179 Billion US$ over 12 months, and yet 996 Billion US$ of new issuance was excreted by the US Government. If foreigners are not buying US Debt - there really is a great deal of trouble in dodge !!!!!
As per FOFOA blog post
Now see if you can spot the trend, and the dramatic change in 2013, in the following data. In 2010, the U.S. trade deficit was $498B, and foreign official holdings of Treasury securities that year grew by $456B. In 2011, the trade deficit was $560B, and foreign official holdings of Treasuries grew by $426B. In 2012, the trade deficit was $540B, and foreign official holdings of Treasuries grew by $386B. Of course the final numbers for 2013 aren’t in yet, but here’s what it looks like. The trade deficit in 2013 will probably be around $485B, and foreign official (that is, foreign central banks, i.e., “structural support”) holdings of Treasuries grew by a mere $20B through October, $24B extrapolated through December. Here, I made you a handy chart to help you visualize it! :D
Chart below Courtsey of FOFOA….
The economy is like a huge bucket with massive holes in it, left alone the bucket drains out quickly (real fundamentals), but at the moment there is a fire hose of water pouring into the bucket (Central banks currency creation and credit aggregate expansion), keeping it topped up (hence real fundamentals do not seem to have any effect) , however the holes are getting bigger , eventually the bucket disintegrates under the pressure!!