Monday, February 29, 2016

Links of interest; 2/29/2016

China expects to lay off 1.8 million workers in coal, steel sectors

China still owns the world's largest currency reserves but has been burning through them at such a pace that some economists and foreign exchange professionals have been questioning how low can they go before Beijing is forced to choose between fresh capital controls or giving upselling dollars to defend the yuan, also known as the renminbi.

Foreign exchange reserves in China declined by $99.5 billion in January to $3.23 trillion after a record fall the previous month. Reserves have shrunk by $762 billion since mid-2014

Share Buybacks: The Bill Is Coming Due

U.S. companies borrowed heavily in recent years but often bought back stock rather than investing in their business

Arab States Face $94 Billion Debt Crunch on Oil Slump

$52 billion of bonds, $42 billion of loans due this, next year

Refinancing challenging with slow growth, rating downgrades

Gulf Cooperation Council countries may struggle to refinance $94 billion of debt in the next two years as the region faces slowing growth, rising rates and rating downgrades

Expectations that these funding gaps "will be part financed through the sale of sovereign U.S. dollar debt will complicate efforts to refinance existing paper that matures over 2016 and 2017,"

Ron Paul wants to deliver a message to the market that he claims the Federal Reserve refuses to do itself.

The former U.S. Republican congressman said this week that the Fed has been propping up markets, and the U.S. economy has already entered a recession despite what central bankers might say.

"They're paid to spin it in a positive manner,"

This week, Citigroup analysts cautioned in a note that the risk of the global economy sinking into a full-fledged recession is on the rise, amid a "tightening in financial conditions everywhere."

Dragging down the economy is a massive load of personal and sovereign debt, Paul said. 

According to Paul, the Fed has played a large role in that accumulation of debt by implementing artificially low interest rates for years. This has pushed individuals and companies to spend beyond their means, Paul warned that the government may be losing control of markets, which will lead to more volatility in stocks.

"Everything is designed to keep the stock market alive.

with China’s economic star fading, its leaders now urgently needed to strengthen their hold on the media in order to maintain control.

“It is necessary for the media to restore people’s trust in the Party,” an editorial in the China Daily argued this week Xi Jinping demanded “absolute loyalty” from their journalists.

“The nation’s media outlets are essential to political stability.”

China’s government-run media has long been a propaganda tool of the Party with Chairman Mao once famously declaring: “Revolution relies on pens and guns.”

The North Sea industry is “sleepwalking” into a wave of insolvencies in the coming months as the full brunt of the collapse in the price of crude causes the finances of many companies to buckle, some of the City’s top restructuring lawyers have said.

The majority of North Sea firms have so far endured a punishing 70pc oil price decline since 2014 by relying on loans which were approved based on market hedges secured one to two years before the market crash.

he is loudly self-funding his own campaign and bombastically insisting that America is getting a bad deal everywhere in the world.

The first of these propositions explicitly tells the legions of K-Street lobbies to take a hike, thereby posing a mortal threat to the fund raising rackets which are the GOPs lifeblood.

“According to Dr. Steffie Woolhandler, a physician at the Montefiore Medical Center, Harvard Lecturer and CUNY professor: “The recent attacks on single payer reform by some liberal economists and politicians are mystifying. When I met with Hillary Clinton some years ago she acknowledged that single payer would be the cheapest and most efficient way to cover all Americans. Her only objection then was that single payer wasn’t politically feasible. Now she’s charging that the numbers don’t add up. And economists who once projected large savings from single payer, are now saying the opposite, without citing any new data. They’re playing political games at the expense of the truth.”

Another month and another month of wild volatility for the Chicago PMI which lurched from solid expansion in January to noticeable contraction in February. At a headline 47.6, Chicago's PMI has fallen outside Econoday's consensus range for a third month in a row! Still, this report is closely watched and confirms other early indications of February softness, not only for manufacturing but for services as well since this report tracks both sectors.

Dallas, together with Kansas City, are two Fed districts that are being hit hardest by the collapse in oil prices. The Dallas Fed's general activity index came in at a deeply minus 31.8 in February vs minus 34.6 in January. New orders contracted a further 8.4 points in the month to minus 17.6 for their lowest reading since 2009 in what is a very ominous signal for the months ahead. Unfilled orders are also in contraction as are production and shipments. Price contraction deepened for both raw materials and selling prices. Inventories are down as is employment. In fact, in a rare sweep of weakness, all 17 current components are in contraction!

Media Blackout As Thousands of Bernie Sanders Supporters March in 45 Cities

former Bank of England governor says in his new book that imbalances in the global economy makes a crash inevitable

States reduce jobless checks, adding pressure to unemployed

“What is surprising is that the CFTC would create a committee designed to undermine the law 
it’s charged with enforcing.” Sen. Elizabeth Warren called the report “little more than a list 
of talking points for an industry that hopes to escape meaningful regulation.”

Robert Reich Endorses Bernie Sanders for President

New Home Sales Unexpectedly Plunge 9.2%, Median Price Down 5.7%

London Luxury-Home Prices Reduced at Highest Rate Since 2013

Pending home sales fell 2.5 pct in January

How The Seeds Of Revolution Take Root

What motivates a populace to rebel against a regime?

Central Banking for Dummies