AGGREGATED RISK LEVELS - OCTOBER 2017

GLOBAL CREDIT (CDS) CONTINUE TO IMPROVE

TRI-ANNUAL SITUATIONAL ANALYSIS 2017 OCTOBER In the June Report we highlighted: The Donald Trump victory has continued to place the world on the "edge of its seat" regarding uncertainty over what to expect from expressed and planned policy initiatives . The central issue is however that Global Economic Growth continues to fall and whether the new Trump administration will successfully […]

OECD: MORE DANGERS IN ECONOMY TODAY THAN IN 2007!  -- SOURCE:  09-13-17 ZeroHedge - "Former BIS Chief Economist Warns "More Dangers Now Than In 2007" Having warned in the past that "the system is dangerously unanchored," former chief economist of the Bank for International Settlements, William White, told Bloomberg TV overnight that the current situation "looks very similar to 2008," adding […]

SLOWING GLOBAL TRADE CONTINUES TO BROADENING ITS' REACH This is a terrific chart from Nordea’s Mikael Sarwe.  (h/t to Kevin Muir via The Macro Tourist blog)  Mikael notes that the small open Swedish economy reacts to global economic momentum earlier than the rest of the world. By advancing the Swedish manufacturing PMI a couple of months, we get […]

LEVEL OF STRIPPED - ZERO COUPON INSTRUMENTS SHOW DEGREE OF BOND BUBBLE Have a look at this chart of the total amount of US Treasuries held in stripped form: Wall Street only strips bonds when there is demand for zero coupon instruments. The total amount of stripped bonds gives a good measure of fixed income demand. […]

BIS: SHORT TERM FX SWAPS & FORWARD HIDING $14T OF NON-BANKING BORROWING - EXPOSURE TO A US$ REPRISING EVENT (IE 1987 & 2008)  -- SOURCE: 09-17-17  Bank of International Settlements, "FX swaps and forwards: missing global debt?" In its latest annual summary published at the end of June, the IIF found that total nominal global debt […]

BIS PAPER: "DEMOGRAPHICS WILL REVERSE THREE MULTI-DECADE GLOBAL TRENDS" In a Bank of International Settlements paper, Charles Goodhart and Manoj Pradhan present a powerful argument that demographics are about to usher in a sea change. You should go read the paper titled “Demographics will reverse three multi-decade global trends“.  I suspect it will be one of the BIS […]

NORTH KOREA RESPONDS TO TRUMP'S UN ADDRESS WITH THREATS NOT EVEN HEARD PRIOR TO WWII  -- SOURCE 09-21-17 ZeroHedge - "Kim Jong Un Vows To Tame "Mentally Deranged Dotard" Trump "With Fire"-- The verbal soap opera continues. Just hours after North Korea's foreign minister Ri Yong-ho called Donald Trump a "barking dog", the rogue state's president, Kim […]

KYLE BASS: CHINA'S $40 TRILLION BANKING SYSTEM HAS "THE LARGEST IMBALANCES I'VE EVER SEEN!"  -- SOURCE:  09-17-17  Courtesy of RealVision, here are some of his latest thoughts: Kyle Bass’s Hayman Capital has been having a rough year thanks to its widely publicized bet against China’s currency, which has more than reversed its 2016 decline – its […]

CHINA'S PONZI SCHEME ECONOMY WILL COLLAPSE! STRAFOR founder, George Friedmen, is positing that the Chinese economy is now acting like one giant Ponzi scheme, with the CCP at the top and the only thing holding it up is continual, unsustainable growth. “China's economy (according to China) needs 8% annual growth, to keep the roughly 16 million new […]

INSTITUTIONAL RISK ANALYST REPORTS THAT EUROPE'S BANKING DYSFUNCTION IS WORSENING  -- SOURCE: 08-02-17  Authored by Chris Whalen via The Institutional Risk Analyst, “While the US and the UK have been mired in political chaos this year, the EU has enjoyed improved economic conditions and some political windfalls. The question now is whether this good news will inspire […]

DEUTSCHE BANK: GLOBAL ASSETS MOST ELEVATED IN HISTORY- ERA OF FREQUENT CRISES TO BE EXPECTED! -- SOURCE: Deutsche Bank's, Jim Reid -- We think that the post Bretton Woods (1971-) global financial system remains vulnerable to financial crises. A simple internet search of financial crises through history (Figure 1, LHS chart) confirms that the frequency has […]

TRUMP'S UN ADDRESS: "THE LIKES OF WHICH HAVE NEVER BEEN HEARD FROM A US LEADER IN THE UN" In his first, 41-minute long appearance at this annual gathering of world leaders, the president took aim at: NORTH KOREA   "It’s time for North Korea to realize that de-nuclearization is its only acceptable future." Trump warned […]

DEMOGRAPHICS OF BOOMERS PAINTS A PERFECT DEFLATIONARY STORM FOR AMERICA AND THE WORLD!  -- SOURCE: 08-21-17  Authored by Stephen McBride via MauldinEconomics.com, Few investors understand the magnitude of the looming demographic crisis and its ramifications. The first Baby Boomers turned 70 last year. At the same time, the US fertility rate is at its lowest point since […]