"QE 1 China" Lowers Bond Rates, The 7 Big Issues, & More Top Insights

China’s One-Year Bonds Decline as Stimulus Seen Boosting Supply

State-owned policy banks will issue at least 1 trillion yuan ($161 billion) of special bonds to help raise funds for infrastructure construction, according to people familiar with the matter. That will add to about 2.8 trillion yuan of municipal debt sold this year.

Seven problems that deserve investors’

 attention

The national debt. It's well over $18 trillion, and that's only the current value and growing exponentially. The Congressional Budget Office has calculated the present value of our unfunded obligations — such as commitments to Social Security, Medicare, Medicaid, SNAP, CHIP, government pensions, etc. — total somewhere between $47 trillion and $205 trillion. These are patiently waiting their turn to show up in the national debt.

Eurozone Retail Sales Fall Sharply In June

Retail sales in the eurozone fell more sharply than expected in June, a fresh sign that the currency area's economic recovery remains too weak to quickly bring down very high rates of unemployment, or raise inflation to the European Central Bank's target.

Separately, the final results of surveys of purchasing managers at businesses around the eurozone recorded a slowdown in activity during July, although it was less marked than first estimated.

The European Union's statistics agency said Wednesday retail sales in the 19 countries that use the euro fell 0.6% in June from May, but were up 1.2% from the same month last year. It was the largest month-to-month fall since September 2014. Economists surveyed by The Wall Street Journal had estimated sales fell 0.2%, having seen figures from Germany that recorded a large drop.

Italy's industrial output falls more than expected

ROME--Italy's industrial production fell more than expected in June, as it contracted in almost all sectors, reversing the rise seen in the previous month, in a sign that the recovery from the country's worst postwar recession is still fragile.

Industrial output in the euro zone's third-largest economy fell 1.1% on the month in seasonally adjusted terms, national statistics institute Istat said Wednesday.

A more modest fall of 0.2% had been the average forecast of 11 economists polled earlier by The Wall Street Journal.

The monthly fall was led by a 1.7% monthly contraction in the production of intermediate goods, while consumer goods fell 0.8% and energy goods' output contracted 1.0% over the period, Istat said.

Italian industrial production fell 0.3% on the year in June in workday-adjusted terms, Istat said.

OECD: Global inflation still stubbornly 

low

The OECD's figures indicate that a wave of fresh stimulus measures enacted by central banks around the world since late last year has yet to achieve its main goal--minimizing the risk of a slide into deflation. Very low inflation rates make economies vulnerable to a slide into deflation, an outcome that policy makers regard as unlikely, but highly damaging should it occur.

China state margin lender injects $32 

billion

  New Mutual Funds - China Securities Journal

China Securities Finance Corp, the state margin lender tasked with stabilizing the stock market, has injected 200 billion yuan ($32.21 billion) since July into five newly-launched mutual funds, the official China Securities Journal reported on Tuesday.

Swiss housing 

bubble risk highest

 since 1991, says

 UBS

Negative interest rates have created excess demand for property as an investment, the Zurich-based bank said, which brings the housing market back into focus for the Swiss National Bank (SNB).

New world of work: political cost of 

Spain’s recovery

The numbers of those in temporary employment — whose numbers fell during the crisis partly because of their vulnerability — is on the rise again. In July, the Spanish unemployment roll dropped by 74,000, the best July since 1998. But of the 1.8 million labour contracts that were signed during the month, only 6.9 per cent of the contracts were for permanent positions

Indian consumer sentiment lowest 

since March: MNI Indicator

Indian consumer sentiment lowest since March: MNI Indicator

Japan’s Monetary Base Stands at 

Record High

Japan’s monetary base stood at a record-high 325.74 trillion yen ($2.63 trillion) at the end of July, up 33.9 percent from a year earlier, as the Bank of Japan continued to provide more liquidity to raise the inflation rate to its targeted 2 percent, BOJ data showed Tuesday. The monetary base reached an all-time high for the 12th straight month. The central bank took additional monetary easing steps last October to raise the pace of supplying funds.

The Oil Crash Has Caused  A $1.3 Trillion Wipe-out

The California Public Employees Retirement System, a $303 billion fund that provides benefits to 1.72 million people, owned a $91.8 million slice of Pioneer Natural Resources Co. in June 2014. At the time, Pioneer was a $33 billion company and one of the biggest shale producers in Texas. Today, Pioneer is worth $19 billion and Calpers’ stake has lost about $40 million in market value.

Learning Success: 

APPLY Tips From The Best

Warren Buffett, Berkshire Hathaway – He is a deeply conservative trader during the times that everyone around him is moving from one extreme to the other to the tune of huge losses and gains. Warren Buffett is a perfect example of patience, proving that slow and steady generally wins the business race. (Although I continue to press my own desire to spur Fishbowl’s inventory software business to race!)

Top Weekly Ideas and Insights

An Inconvenient Truth:

What Happens When Top Economists Realize Physical Growth Constraints?

 EXISTENTIAL REALITY 

"Humanity's Coming of Age"

 - The Last Days of Economic Growth -

No End In Sight As China's Stocks Plunge Even Deeper, & More Top Insights

After Quick 8.5% Crash, Confusion Reigns in Chinese Stocks

It’s days like Monday that reassure Tony Hann he was right to avoid stocks in mainland China.

The severity of an 8.5 percent drop in the Shanghai Composite Index is bad enough, but what irks him the most is not knowing why it tumbled so much. In a market where unprecedented intervention has made government money one of the biggest drivers of share prices, authorities aren’t transparent enough for investors to make informed decisions, said Hann, the head of emerging markets at Blackfriars Asset Management Ltd.

Foreign investors have unloaded about $7.6 billion of Shanghai shares through the city’s Hong Kong exchange link since July 6

Chinese Stocks Crash Again! Here's What To Watch Now

Despite the unprecedented government intervention in the past month, China’s stock market plunged 8.5 percent on Monday – the country’s second worst one-day crash in over eight years. I’m not at all surprised by this turn of events, as I wrote last weekend:

With all of the measures taken to shore up the market, last week’s bounce has been underwhelming, but unsurprising considering the sheer amount of selling pressure that has been created by speculators who are eager to protect themselves as the bubble collapses under its own weight.

Is China’s market out of the woods? I’m not so convinced just yet. It is important to realize that bubbles deflate in waves, with many sharp “dead cat bounces” that give way to even further bearish action.

Chinese Shares Tumble Again 

Worried about the fallout, the government moved aggressively to prop up stocks with a spate of measures. Authorities suspended initial public offerings, introduced a $120 billion market stabilization fund backed by the central bank, and encouraged executives to buy company shares.

Nine Reasons Why Low Oil Prices May “Morph” Into Something Much Worse

9. It is doubtful that the prices of energy products and metals can be raised again without causing recession.

We are not talking about simply raising oil prices. If the economy is to grow again, demand for all commodities needs to rise to the point where it makes sense to extract more of them. We use both energy products and metals in making all kinds of goods and services. If the price of these products rises, the cost of making virtually any kind of goods or services rises.

Raising the cost of energy products and metals leads to the problem represented by Growing Inefficiency (Figure 4). As we saw in Point 5, wages tend to go down, rather than up, when other costs of production rise because manufacturers try to find ways to hold total costs down.

Lower wages and higher prices are a huge problem. This is why we are headed back into recession if prices rise enough to enable rising long-term production of commodities, including oil.

IMF warns of gloomy eurozone outlook

Reforms and action needed urgently as fears over Greece, high unemployment, structural flaws and a still-shaken bank sector slow growth

The International Monetary Fund has warned the eurozone faces a gloomy economic outlook thanks to lingering worries over Greece, high unemployment and a banking sector still battling to shake off the financial crisis.

The IMF’s latest healthcheck on the eurozone found it was “susceptible to negative shocks” as growth continues to falter and monetary policymakers run out of ways to help. It called for an urgent “collective push” from the currency union to speed up reforms or else risk years of lost growth.

“A moderate shock to confidence – whether from lower expected future growth or heightened geopolitical tensions – could tip the bloc into prolonged stagnation,” said Mahmood Pradhan, the IMF’s mission chief for the eurozone.

Greece rocked by reports of secret plan to raid banks for drachma return

Opposition demands answers after covert proposals attributed to Yanis Varoufakis and fellow ex-minister highlight deep split in Syriza party

Some members of Greece’s leftist-led government wanted to raid central bank reserves and hack taxpayer accounts to prepare a return to the drachma, according to reports that highlighted the chaos in the ruling Syriza party.

It is not clear how seriously the government considered the plans, attributed to former energy minister Panagiotis Lafazanis and ex-finance minister Yanis Varoufakis. Lafazanis was sacked from his post and Varoufakis resigned earlier this month. However, the revelations have been seized on by opposition parties who are demanding an explanation.

 The Donald and the Delusional

But the Republican base isn’t eager to hear from SHCs; it has never put McCain on a pedestal; and people who like Donald Trump are not exactly likely to be scared off by his lack of decorum.

For what it’s worth, I still don’t expect The Donald to win the nomination; the big money will presumably coalesce around someone — though given Jeb’s foot-in-mouth performance it’s hard to see who — and will probably squeeze him out in the end. But the story so far has been a remarkable illustration of how little many professional political pundits seem to understand.

BRIEF-Philips CEO says China is really slowing down, as is Brazil

Raoul Pal: GroupThink Is Almost Ubiquitous (& The 1 Chart That Matters) )

My overarching belief is that this is the most “pure macro” environment we have been in for over a decade, probably since the Asian Crisis in the late 1990s, and I just don’t think people understand what is going on.

My entire thesis rests neatly on the US Dollar. Nothing else matters and if my view is wrong on that, then it is likely wrong on many things. What is really weird to me is that most people agree with my views on the dollar but don’t have the trade on, and were less versed on the macro knock-on effects of a strong dollar. Groupthink has tended to isolate particular parts of the US or global economy and ignore the bigger picture.

Memorize This, Earn A Dollar 

Importantly, actual breakdowns in market internals have been followed by market losses, on average, even since 2009 (as we saw in the near-20% plunge of 2011). In mid-2014, we imposed the requirement that market internals or credit spreads must actually deteriorate as a precondition to establishing a hard-defensive market outlook. That adaptation brings our present methods back in line with the central considerations that were responsible for our success prior to 2009.

Learn Success: APPLY Tips From The Best

 Jeff Bezos, Amazon– Jeff Bezos is a pioneer in world of internet commerce, and was instrumental in defining this space that is now defining many aspects of the internet world. It is Jeff Bezos who innovated the concept of “predictive analytics”–recommending products to customers based on search history and buying habits. Whether you like the concept or you hate it, the idea has made online commerce more profit rich and efficient, and is making online shopping a better experience for consumers throughout the world.

Top Weekly Ideas and Insights

An Inconvenient Truth:

What Happens When Science Confronts Unsubstantiated Fiction?

 EXISTENTIAL REALITY 

"Humanity Coming of Secular Age"

 - The Last Days of Theism -