dChan
Anonymous ID: 53c3e7 June 7, 2019, 8:04 a.m. No.6693524   🗄️.is 🔗kun   >>3590 >>3749 >>3781 >>3866 >>3918 >>4118 >>4121 >>4163

Economic clouds gather over Germany

 

Concerns are growing over the strength of Germany's economy - the largest in the eurozone - following the release of more gloomy official figures.

 

Industrial production in April fell by 1.9% compared with the previous month and exports were 0.5% lower than a year earlier.

 

Meanwhile new forecasts from the national central bank, the Bundesbank, reflect the more downbeat prospects.

 

The bank is now predicting growth of just 0.6% for this year, compared with a forecast of 1.6% it made in December.

 

The Bundesbank actually predicts a small decline in economic activity in the current quarter, though it expects growth to bounce back somewhat next year to 1.2%.

Trade disputes

 

Germany is especially exposed to the uncertainty that is affecting international trade.

 

It is a manufacturing powerhouse and sells a large share of what it produces abroad. Only the much larger economies of the United States and China export more goods.

 

China's economic slowdown has made its mark on Germany. It is an important market for German industry.

There is also what the Bundesbank calls a "muted outlook" for trade more generally.

 

The bank says disputes are weighing on global commerce.

 

That is a reference to the policies pursued by the Trump administration. Europe has been affected by the tariffs on steel and aluminium which the US imposed because, the US administration argued, imports of the metals were undermining national security.

 

Germany especially will be exposed if the US decides to impose additional tariffs on car imports, something President Trump is considering.

 

There is also a wider impact on confidence about international trade resulting from the tariff increases that the US and China have imposed on one another.

Rate cuts on the horizon?

 

These clouds over Germany were to some extent reflected in moves made on Thursday by the European Central Bank (ECB).

 

The ECB indicated that its ultra-low interest rates are likely to remain in place until at least mid-2020, six months longer than the guidance it had given previously.

 

Some members of the ECB's policymaking committee also raised the possibility of further cuts in interest rates or a resumption of the bank's quantitative easing programme, buying financial assets with newly created money.

 

The Bank's president, Mario Draghi, said that the probability of a recession was very low. His explanation for the moves focused more on the eurozone's persistently low inflation, which is currently below the Bank's target of below, but close to, 2%.

 

It is worth remembering that Germany has very low unemployment - almost the lowest of the developed economies.

 

That said, it doesn't bode well for the eurozone more widely that its largest economy is having a weak patch.

https://www.bbc.com/news/business-48558809

Anonymous ID: 53c3e7 June 7, 2019, 9:14 a.m. No.6694008   🗄️.is 🔗kun

Game Over for the Federal Reserve's Management of Equity Mkts-for their benefit

 

keep in mind this is not a hit piece on equity's or the current run of the market-it's attacking the policy's that have allowed them, up until recently, to control what those markets did for it-and it's owners-benefit.

 

Game over. The grand central bank experiment of the last 10 years has ended in utter and complete failure. The games of cheap money and constant intervention that have brought you record global debt to the tune of $250 trillion and record wealth inequality are about to embark on a new round of peddling blue meth again.

 

Australia has already cut, so has India. The ECB is talking about it, markets are already pricing in multiple Fed cuts. The new global rate cutting cycle begins anew before the last one ever ended. Brace yourselves as no one, absolutely no one, can know how this will turn out.

 

Absolutely staggering. We are witnessing a historic unraveling here. Everything every central banker has uttered last year was completely wrong. Every projection they made over the last 10 years has been wrong. No wonder Jay Powell wants to toss the dot plot. It’s a public record of failure.

 

Why place confidence in people who are staring at the ruins of the policies they unleashed on the world and are about to unleash again?

 

All the distortions of 10 years of cheap money, debt, wealth inequality, zombie companies, negative debt, TINA, you name it, will all be further exacerbated by hapless and scared central bankers whose only solution to failure is to embark on the same cheap money train again. All under the banner to “extend the business cycle” at all costs. Never asking whether they should nor considering the consequences. But since they are not elected by the people and face zero consequences for failure they don’t have to consider the collateral damage they inflict.

 

I repeat: Structural bears who have predicted that central bankers would never be able to normalize the construct they created and has produced the world’s greatest debt explosion ever were 100% correct. We’re all staring at a colossal policy failure with no accountability.

this is ALL down to the FRB and NO ONE else.

At this moment in time with the ECB’s balance sheet at all time highs amid collapsing inflation expectations: see cap#2

Not because of earnings, not because of revenues or growth. Because they have to as yields are once again collapsing and central bankers are again promising free money.

again FOCUS on the FRB and it's problems with the yield curve-this is the real issue why they are needing to cut rates-if it was about data and performance they would have done it already.

“To extend the business cycle” Jay Powell stated this week. Since when is this the primary purpose of the Fed? What happened to inflation and price stability? Already they are tossing their stated inflation goals and are talking about letting inflations run hotter if they can juice it up. There’s no integrity, only moving targets and carrots driven by equity prices.

what this does not account for is the POTUS Put-you really think that equity markets would drop as the assets of these people are being seized?-why would they allow this?-think about that.

But its track record is obvious: It has failed to meet its inflation targets (ill guided as they may be) for 10 years. It has failed to normalize despite years of promises to do so, and will never be able to normalize. Between 2008-2019 the Fed was non-accommodative for 3 months. It blew up in their faces in December. They’ll never be non accommodative again. They can’t,

because the ticking time bomb of lower yields is forcing them to act.

https://northmantrader.com/2019/06/07/game-over-2/

although this article assumes the FRB is still in charge- it is not imo.

Cap#3- is some evidence that the FRB's own mechanism of saving the mkts for themselves at critical times is being used against them.

To put it bluntly: they always need some type of event to re-start the cycle again and they have not been able to manufacture it this time because they are not in control-Patriots are.