Posted on 02/02/2014 7:15:51 PM PST by blam
SocGen: An Economic 'Perfect Storm' Is Brewing
Rob Wile
Feb. 2, 2014, 8:46 PM
Last weekend at Davos, Nouriel Roubini told BI's Joe Weisenthal that it seemed markets had sailing into a perfect storm, resulting in lots of volatility.
"...Between Chinese PMI of 50, Argentina letting its currency go, noises coming politically from Ukraine, Turkey, and Thailand … [the] contagion is not just within emerging markets but also affects advanced economies' equity markets.
This evening Société Générale says, that, indeed it sure looks like we have.
In a note to clients titled "Perfect Storm Brewing As Policy Turns," they write:
Following a week of extreme volatility in emerging markets, many wonder if we are now heading for a perfect storm, with China increasingly sucked in and Europe's already low inflation falling further towards deflation. The current developments also mark a shift in markets' focus on where the need for policy change is the greatest - away from Europe where bond spreads remain resilient. We remain unconvinced, however, that the reforms to date in Europe are enough to raise growth sufficiently and put public debt trajectories on a sustainable path.
(snip)
(Excerpt) Read more at businessinsider.com ...
Deliveries are at a low.
The stock market is 40% monopoly game money.
There was already a big selling of stock and lots of Capital gains taxes paid by those getting out at the right time. (which is what happened before the Clinton crash)
Something this way comes IMO.
One way to judge the economy is to check out the number of 18 wheel trucks hauling freight. The wife and I have been driving for almost 9 years now and I have never seen trucks stops so empty. Even back East, we can find parking spots at 1-3 AM, almost unheard of when we started. Out West, well it gets worse. Some of major chain truck stops are often 1/3 empty at night.
Since 18 wheelers tend to be the major carrier for a lot of products, it is a simplistic way to judge the economy. We don’t see the economic recovery that the Administrations touts. We see a stagnant economy with slow, if any growth.
Any one care to make a Gold call? I have been in the deflation camp for years (all cash), and missed a 30% run up in stocks and at the same time avoided at 30%-40% drop in metals. If what they are saying is happening, then deflation is upon us. What's the FED going to do at this point? Add another 4 trillion to thier balance sheet just to tread water?
That’s another economist predicting this is the end.
I can make this prediction. If the economy tanks (and its already pretty much in the tank), Republicans take the senate without a struggle, potentially 9 seats... and gain 11 in the House.
So far the economy is functioning a lot like Obamacare.
Meanwhile the Republcians want to pay back donors and make illegals legal and get them on the dole and voting Democrat as soon as possible in exchange for cash and a future out of government IMO. SUCKS
Meanwhile out enemies are building stronger military as our President cuts the balls out of our own.
I suppose that is better than jumping off high buildings like some others have been doing.
Roubini is like a weatherman always predicting a storm. It pays the bills.
to “put public debt trajectories on a sustainable path” is a laughable statement. The relatively nimble and free market Unites States currently holds $214 trillion in net (that’s after all tax collections) debt (including promises of Medicare, SS, etc.).
It’s over. Either inflation or repudiation or both.
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