A Confused Janet Yellen Tries To Figure Out If Stocks Are In A Bubble, Fails

So much can change in two years.
On July 15, 2014, in the Fed’s biannual report on Yellen’s Congressional testimony, the US central bank had its first Greenspan moment when it duly warned that ‘valuation metrics in some sectors do appear substantially stretched – particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.’
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Did we say two years? Make that three months: just this past June, the Fed’s monetary policy report once again warned that valuations pressures “rose for a few asset classes” as “forward price-to-earnings ratios for equities have increased to a level well above their median of the past three decades.”

This post was published at Zero Hedge on Sep 24, 2016.

Three Hidden Opportunities in Japan’s Shocking Demographic Decline

[Kyoto, Japan] – Most investors are at least passingly familiar with the fact that Japan’s demographics are the worst on the planet because the country is ‘aging’ so fast.
What they’re missing is just how massive an opportunity that is for the right investments.
And that’s what we’re going to talk about today, including three specifics that will get you started.
What a ‘Celibacy Syndrome’ Has Done to Japan
I’ve been coming to Japan for nearly 30 years and living here part time every year for the past 20 as a father, husband, and businessman.
It’s one thing to talk about the graying of Japan like we do so frequently in the West – meaning how rapidly the population is aging – and entirely another to see it up close.
Every time I roll off the plane I’m simply stunned by how striking the demographic changes taking place here really are.
… Nearly 900 towns and villages will be extinct by 2040.
… Japan’s population growth is so low that the total number of people living here will fall by 35% to only 83 million by 2100 – only 84 years from now.
… The birth rate is so low that the last Japanese citizen may be born in less than 1,000 years.

This post was published at Wall Street Examiner on September 23, 2016.

Economic troubles loom: The third leg of the world’s intractable depression is yet to come.

September 2016 – GLOBAL ECONOMY – The third leg of the world’s intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history. It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity. ‘Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out,’ said the annual report of the UN Conference on Trade and Development (UNCTAD).
We know already that the poisonous side-effect of zero rates and quantitative easing in the US, Europe, and Japan was to flood developing nations with cheap credit, upsetting their internal chemistry and drawing them into a snare.

This post was published at UtopiatheCollapse on September 24, 2016.

NEW WORLD ORDER MOUTHPIECE WARNS WE ARE ON VERGE OF GREATEST DEBT JUBILEE IN HISTORY

‘Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion … Damaging deflationary spirals cannot be ruled out’.
This grim assessment comes from an article posted at Telegraph.co.uk, that quotes a recent annual UN ‘Conference on Trade and Development’ report. The article is entitled, ‘UN fears third leg of the global financial crisis – with prospect of epic debt defaults,’
The writer’s name is Ambrose Evans-Pritchard and he’s one of Britain’s most prominent journalists, known for his hard-hitting reporting. He’s also the editor of the International Business section of the Daily Telegraph.
Here’s how it begins:
The third leg of the world’s intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history. It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity.
Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. ‘Damaging deflationary spirals cannot be ruled out,’ said the annual report of the UN Conference on Trade and Development (UNCTAD).

This post was published at Dollar Vigilante on SEPTEMBER 23, 2016.

Germany About to Raise Property Taxes Significantly

The greatest problem with real estate is you cannot pick up and leave. The Federal Council in Germany is planning to re-evaluate the approximately 35 million homes in Germany. It is now expected that the result is likely to be a significant increase in the property tax. Administrative expenses for the state fund-raising action is very significant and more than 50% of municipalities were in financial trouble BEFORE the refugee crisis.

This post was published at Armstrong Economics on Sep 24, 2016.

Russia banks aim to sell gold to China as VTB, Sberbank expand

Russia’s gold sales in China are set to expand as VTB Capital boosts sales and Sberbank PJSC prepares to enter the market, chasing demand in the world’s biggest consumer of bullion.
Sberbank CIB plans to register on the Shanghai Gold Exchange and eventually to sell up to 100 tons (3.2 million ounces) a year, according to an e-mail from the investment arm of Russia’s largest bank. VTB Capital, a unit of the second-biggest lender, is targeting sales of as much as 20 metric tons of gold in China in 2017, Sergey Nenashev, the bank’s head of precious metals, said by e-mail. Sales may reach a rate of 100 tons a year near the end of 2018, he said.
Russian banks, which act as intermediaries between the country’s gold producers and the market, aim to tap into Asian growth. Rising incomes and few investment options in China are driving demand for gold jewelry, bars, and coins in China. In July, Shanghai Gold Exchange volumes almost doubled from a year earlier to 1.7 trillion yuan ($255 billion), figures compiled by the bourse show.

This post was published at bloomberg

China supervisory body approves launch of credit default swaps soon

One of China’s interbank market supervisory bodies has approved the launch of credit default swaps, two sources with direct knowledge of the matter told Reuters on Thursday, signifying another step forward towards helping firms hedge rising risks in the country’s corporate bond market.
The National Association of Financial Market Institutional Investors (NAFMII), which supervises issuance of commercial paper and some other types of debt in China’s interbank bond market, has already notified relevant institutions to prepare, and will soon release guidelines for trading, the sources said.
Credit default swaps are a type of derivative providing insurance against third party defaults, and were widely used in the lead-up to the financial crisis in the United States.
Bond defaults have risen quickly in the past year and a half in China following many years when most debt was assumed to enjoy an implicit government guarantee. Market participants still have few formal hedging tools to protect against such risk, however, which has added urgency to efforts to introduce default swaps in China.

This post was published at Daily Mail

U.N. fears third leg of the global financial crisis – with prospect of epic debt defaults

The third leg of the world’s intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history.
It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity.
“Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out,” said the annual report of the UN Conference on Trade and Development (UNCTAD).
We know already that the poisonous side-effect of zero rates and quantitative easing in the US, Europe, and Japan was to flood developing nations with cheap credit, upsetting their internal chemistry and drawing them into a snare. What is less understood is just how destructive this has been.

This post was published at The Telegraph

Pension Funds Face Day of Reckoning as Investment Returns Lag

The $1.9 trillion shortfall in U.S. state and local pension funds is poised to grow as near record-low bond yields and global stock-market turmoil reduce investment gains, increasing pressure on governments to put more money into the retirement systems.
With the Federal Reserve holding interest rates steady at its meeting Wednesday, the funds will continue to be squeezed by rock-bottom payouts on fixed-income securities just as stocks fall overseas and post only modest U.S. gains. As a result, pensions in Illinois, Missouri and Hawai’i this year have moved to roll back the assumed rate of return on their investments, joining the dozens that have taken that step over the past two years.
‘There’s little light at the end of the tunnel as far as pension funding is concerned,’ said Vikram Rai, head of municipal-bond strategy at Citigroup Inc. in New York. ‘I expect funded ratios will drop further. It’ll require increased pension contributions on the part of the states and local government, but most state and local governments don’t have the ability to do so.’
Pensions count on annual investment gains of more than 7 percent to cover much of the benefits that come due as workers retire. But public plans had a median increase of 1 percent for the year ended June 30, the smallest advance since 2009, when they lost 16.2 percent, according to the Wiltshire Trust Universe Comparison Service.

This post was published at Newsmax

U.S. Home Sales Fell in August as Inventories Plummet

Americans retreated from home-buying in August, as a worsening inventory shortage appears to be hurting sales and pushing prices higher.
Housing has been a bright spot amid weak economic growth for much of this year. Sales totals continue to recover from the Great Recession. Buyers increasingly have pristine credit. But the primary weakness in housing has been a lack of properties for sale, a reflection of the lingering damage caused by the housing bubble that began to burst nearly a decade ago.
Sales of existing homes slipped 0.9 percent last month to a seasonally adjusted annual rate of 5.33 million, the second straight monthly decline, the National Association of Realtors said Thursday. The monthly setbacks happened after a period of steady gains that have lifted home sales up 3 percent so far this year. Historically low mortgage rates have combined with an improved job market to bolster demand from possible buyers.
But drastically fewer sellers are coming into the market. The number of properties for sale is dwindling despite buyer enthusiasm, as inventories have collapsed 10.1 percent from a year ago, to 2.04 million homes.

This post was published at ABC News

U.S. Average 30-Year Mortgage Rate Declines to 3.48 Percent

Mortgage giant Freddie Mac said Thursday the average for the 30-year fixed-rate mortgage declined to 3.48 percent from 3.50 percent last week. The benchmark rate is down from 3.86 percent a year ago, and is close to its all-time low of 3.31 percent in November 2012.
The 15-year fixed mortgage rate eased to 2.76 percent from 2.77 percent.
Prices of long-term U.S. Treasury bonds rose, pushing their yields lower, as investors awaited the decision of the Federal Reserve Wednesday on interest rates. The Fed kept its key interest rate unchanged but signaled that it likely will raise rates before year’s end. Long-term mortgage rates tend to track the yield on 10-year Treasury notes.
The yield on the 10-year notes fell to 1.66 percent Wednesday from 1.70 percent a week earlier. It declined further to 1.63 percent Thursday morning.

This post was published at ABC News

The Hunt for Taxes is Unleashed in Africa

Nigeria has begun the hunt for taxes as they target 700,000 firms as the country is desperate to look for more revenue as its income from oil has collapsed. Nigeria is Africa’s biggest economy and it has entered its first recession in more than 20 years as overspending produces only higher taxes, not economic reform. The current President is Muhammadu Buhari, since 29 May 2015. Politics began to change in Nigeria also going into 2015.75 turning point for government worldwide. The 2015 election marked the first time in the history of Nigeria that an incumbent president actually ever lost to an opposition candidate in a general election. So the ECM is truly a global model and not based solely upon a single country or trend.
Africa was the fastest-growing continental economy on the planet going into 2015. However, the one thing that was growing faster than the economy was of all is debt in every category from personal and corporate in the private sector to government. In 2015 Africa’s debt reach an untenable level and not the hunt for taxes has begun. In 2014 countries such as Senegal, Cte d’Ivoire (less than five years after a previous government-debt default), and Zambia all placed bonds worth as much as $1 billion into the market and these issues were oversubscribed because of the collapsing interest rates in developed countries. Kenya’s record-breaking sale of $2 billion in debt back in 2014 was also oversubscribed four times over.

This post was published at Armstrong Economics on Sep 24, 2016.