Es depresión, chicos

A propósito de un post anterior: nadie lo dice, claro, pero asistimos al desarrollo de una depresión económica global por más que la quieran disfrazar (en varios países europeos comenzaron a contabilizarse la prostitución y la venta de drogas como recursos económicos, para evitar tener que mostrar números negativos en el PBI de este año). Se sigue inyectando plata a lo pavote en los mercados financieros, el festival de papeles es más abstracto que nunca, y los dirigentes del mundo cierran el pico porque si la cosa explota se los llevará puestos, a muchos ya sin la cabeza sobre los hombros.

Reproducimos tres notas recogidas en el día de ayer en diversos medios. La primera es de Nomi Prins para Zero Hedge:

Título: Former Goldman Banker Reveals The Path To The Next Depression And Stock Market Collapse

Texto: A funny thing happened on the way to the ‘end’ of the multi-trillion dollar bond buying program known as QE - the Fed chronicles. Aside from the shift to a globalization of QE via the European Central Bank (ECB) and Bank of Japan (BOJ) as I wrote about earlier, what lingers in the air of “post-taper” time is an absence of absence. For QE is not over. Instead, in the United States, the process has simply morphed from being predominantly executed by the Federal Reserve (Fed) to being executed by its major private bank members. Fed Chair, Janet Yellen, has failed to point this out in any of her speeches about the labor force, inflation, or inequality.

The financial system has failed and remains a threat to us all. Only cheap money and the artificial inflation of asset values can make it appear temporarily healthy. Yet, the Fed (and the Obama Administration) continue to perpetuate the illusion that making the cost of (printed) money zero by any means has had a positive effect on the population at large, when in fact, all that has occurred is a pass-the-debt-ponzi-scheme co-engineered by the Fed and big US bank beneficiaries. That debt, caught in the crossfires of this central-private bank arrangement, is still doing nothing for American citizens or the broader national or global economy.

The Fed is already the largest hedge fund in the world, with a book of $4.5 trillion of assets. These will plummet in value if rates rise.  Cue the banks that are gearing up their own (still small in comparison, but give them time) role in this big bamboozle. By doing so, they too are amassing additional risk with respect to interest rates rising, on top of all their other risk that counts on leveraging cheap money.

Only the super naïve could possibly believe that the Fed and its key banks haven’t been in regular communication about this US Treasury security shell game.  Yet, aside from a few politicians, such as former Congressman Ron Paul, Congressman Sherrod Brown and Senators Bernie Sanders and Elizabeth Warren, the notion that Fed policy has helped bankers, rather than other people, remains largely divorced from bi-partisan political discussion. 

Adding more fuel to the central-private bank collusion fire, is the fact that the Fed is a paying client of the JPM Chase. The banking behemoth is bagging fees for holding and executing transactions on the $1.7 trillion New York Fed’s QE mortgage portfolio, as brilliantly exposed by Pam Martens and Russ Martens.

Wouldn’t it be convenient if JPM Chase was also trading this massive mortgage book for its own profits? Or rather - why wouldn’t they be?  Who’s going to stop them – the Fed? Besides, they hold more trading assets than any other US bank, so why not trade the Fed’s securities ostensibly purchased to help the public - recover?

According to call report data compiled by the extremely thorough website www.BankRegData.com, nearly 97% of all bank trading assets (including US Treasuries) are held by just 10 banks, led by JPM Chase with 43.80% and followed by Citigroup at 24.51% of all bank trading assets.

Last quarter, US Treasuries were the fastest growing form of security bought by banks, increasing by 26.3% or $72 billion over the prior quarter. As the Fed tapered, banks stepped in to do their part in the coordinated Fed-private bank QE game. In the past year, banks have added $185.8 billion of US Treasuries to their books, more than doubling their share of government debt.

Just seven banks comprised nearly all ($70.5 billion) of this quarterly increase: State Street Bank, Capital One, JPM Chase, Wells Fargo, Bank of America, Bank of NY Mellon and Citigroup. By the end of the third quarter of 2014, Citigroup, with $95 billion, was the largest holder of US Treasuries, followed by Bank of America at $54.8 billion and Wells Fargo at $37.8 billion from nearly zero at the start of 2014. Bank of NY Mellon holds $25.3 billion and JPM Chase holds $15 billion US Treasuries.

This increase in US Treasury holdings reflects another easy money element of our federally subsidized banking system. Banks take deposits from individuals for which they pay close to zero in interest, in fact, charge customers fees for keeping their money  (courtesy of the Fed’s Zero-Interest-Rate policy.) They can turn that around to make a cool risk-free 2.3% by parking the money in 10-year US Treasuries. Why lend to Joe the Plumber, when the US government is providing such a great deal?

But, the recent timing here is key. Banks only started buying US Treasuries in earnest when the Fed announced its tapering plans. Thus, not only are they participants in the ZIRP game as recipients of cheap money, they are complicit in effecting monetary policy. As the data analyzed so expertly by Bill Moreland at www.BankRegData.com makes clear, there has been no taper.  Thus, the publicized reason for tapering – better job and economic growth – is also bogus.

During the third quarter, Wells Fargo and Bank of America matched Fed purchases of US Treasuries, keeping the total amount of US Treasuries in QE land neutral. With such orchestration to keep rates down and the prices of US Treasury securities up, all the talk about whether the labor force is strengthening or inflation exists or not is mere show. Banks haven’t even propped up the labor market in their own industry. They chopped 11,400 jobs last quarter. In the past two years, they cut 57,236 jobs.

No one in either political party mentioned any of this during the mid-term elections. Yet, our political-financial system has gone from the dysfunctional to the failed to the surreal. 

Speculation, once left to individuals and investors, is now federally sponsored, subsidized and institutionalized.  When this sham finally buckles and the next shoe falls and rates do eventually rise, the stock market will tank, liquidity will die, and the broader economy will plunge into a worse Depression than before. We are not there yet because of these coordinated moves and the political force behind them. But we are on a precarious path to that inevitability.  




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La segunda noticia es de Wiktor Szary para Reuters:

Título: Poland deflation now deepest in 32 years

Texto: The fall in Polish consumer prices accelerated to a faster-than-expected 0.6 percent in October, the deepest year-on-year deflation since 1982, putting renewed pressure on central bank rate-setters to cut interest rates next month.
"This is definitely an argument for the Monetary Policy Council to resume lowering of the rates," Michal Burek, a Raiffeisen Polbank analyst said after the statistics office released the latest inflation data.

At its last meeting earlier this month, the council kept the interest rates unchanged at an all-time low of 2.0 percent, surprising markets which expected a cut.

Several people on the 10-member council signalled that only a deterioration of the outlook for economic growth could prompt more monetary easing.

There appears to be no immediate prospect of that, with latest data showing signs the economy is strengthening.

However, deepening deflation could curb the economic revival because it acts as an incentive to consumers to defer purchases until later, when prices will be even lower. The October inflation figure marked four consecutive months of negative year-on-year readings.

The council will meet again on rates on Dec. 2-3.

Poland's central bankers are divided on the issue of further monetary easing, with some of them saying the current interest rate levels are low enough , and some pointing out there is still room for further cuts.

Markets are looking to fresh data for clues about how the central bank will respond. A flash estimate of gross domestic product for the third quarter will be released on Friday and data on industrial production is due next week. 


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La última es de la Deutsche Welle:

Título: Eurozone deflationary pressures to worsen

Texto: Professional forecasters surveyed by the European Central Bank have said inflation in the 18-member eurozone will stay lower than previously expected for some years to come. There's also little sign of growth.

The more than 60 economists and academics polled by the ECB cut their outlook for eurozone inflation Thursday, saying they expected prices to rise by only 1 percent next year and 1.4 percent in 2016, down from their earlier forecasts of 1.2 percent and 1.5 percent respectively.

Some investors read the report as a signal that the ECB might now be even more likely to extend its asset purchase program to corporate bonds and possibly even government debt.

ECB President Mario Draghi had said the lender would keep interest rates low and stood ready take additional, unconventional policy actions, if inflation expectations didn't pick up soon.


No quick fix

The ECB's inflation target is below, but close to 2 percent over the medium term, and the bank is scheduled to update its own staff predictions for price stability next month.

Citing falling oil prices and political tensions, the forecasters polled also predicted eurozone growth to slow to 1.2 percent in 2015, down from the 1.5 percent predicted previously.

"The balance of risks has become more clearly tilted to the downside," the survey said. "Respondents identify geopolitical tensions, mainly in Ukraine and Russia, but also in the Middle East, as by far the main risk."