The Middle Class Will Die Within 30 Years Leaving “A Wealthy Elite & Sprawling Proletariat”

If we continue down this path of ignorance, we will be left with a “tiny elite and a huge sprawling proletariat” who have no chance of “clawing their way out of a hand-to-mouth existence,” is the loud and clear message from UK government advisor David Boyle. As The Telegraph reports, Boyle cautions, “we won’t own our own homes, we won’t be able to afford it,” adding that “we cheerled the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children.” His conclusion, “the middle classes have to wake up to prevent it happening and to create a political movement that will do it.”

 

Authored by Sarah Knapton via The Telegraph,

The middle classes will die out within 30 years because of rising property prices, which will rob today’s children of their dreams, an economist has warned.

David Boyle, a government advisor and fellow of the New Economics Foundation think-tank, said that youngsters can no longer expect the same level of affluence as their parents.

Speaking at the Hay Festival he warned that Britain will be left with a ‘tiny elite and a huge sprawling proletariat’ who have no chance of ‘clawing their way out of a hand-to-mouth existence.’

He predicted that the average house price will reach £1.2 million by 2045, putting a home beyond the range of most people as wages fail to keep up with huge increases.

Boyle said that the traditional middle classes will need three or four jobs just to be able to pay soaring rents. People will no longer have the space or time to pursue cultural interested.

And he blamed bankers bonuses for artificially inflating the property market.

“The really scary thing is if in the next 30 years house prices rise as much as they have done in the last 30 years then the average house in Britain will cost £1.2 million,” he said.

 

We cheerled the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children.

 

“The place where this is heading is a strange society with a tiny elite and a long struggling, straggling line which is the rest of us, a new proletariat, who will be in hock to Landlord PLC.

 

“We won’t own our own homes, we won’t be able to afford it.

 

“It will constrain our dreams and constrain the dreams of our children. It’s a new kind of economy where there are no middle classes at all.

 

“Nobody in society will have the kind of space in their lives, space in their homes, space in their careers for any kind of culture at all, because we will be having three or four jobs to make ends meet

 

“I think will impoverish society make it more intolerant and make it more difficult to live.”

Boyle claimed that one of the major problems was Margaret Thatcher abandoning The Supplementary Special Deposit Scheme, known as the ‘corset’ which limited how much banks could lend for mortgages.

Although the scheme kept house prices low in the 1970s, Boyle said it was unlikely that today’s buyers would accept having to wait for months for a mortgage.

Instead, he suggests a ‘parallel’ housing market were new homes were sold at the initial price for 100 years.

He predicted that without such a radical solution, mortgages will be inherited and only be paid off by the grandchildren of the original buyer.

“We were rationing mortgages in the 1970s, that’s what kept prices low and I don’t know if we will accept a time again when you have to wait,” he said.

 

Boyle said the rise in Ukip was fuelled by disaffection of the middle classes.

 

“You saw this huge revolt. I think what happens when you suppress the dreams of the middle classes is you get rather peculiar and very dangerous political movements beginning to emerge,” he argued.

 

“That doesn’t forgive people voting in the neo-facists but it does somehow explain it.

 

Very unequal societies are very inflationary societies and in the end it drives out those other degrees in society until it becomes very flat and very desperate.

 

The middle classes have to wake up to prevent it happening and to create a political movement that will do it. I don’t think Ukip is it.

 

“You could say that it doesn’t matter and that a more classless society would be a good thing.

 

“I think if there is no place in the middle that anywhere can go to claw their way out of desperate hand to mouth existence, and the precariat, then that condemns us all to a precarious existence because there is no ladder.”

Boyle sits on the Liberal Democrat’s federal policy committee and was commissioned to write a report into access to public services by the government, which was published last year.




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The World’s Most Polluted Countries

Much has been said in the past year about China’s unprecedented pollution problem. So much, in fact, that both China and Goldman Sachs have noticed, because it goes without saying that it is not easy to conduct a healthy investment climate in a city in which one needs a mask just to go outside and enjoy the lack of sun. Which is why we were amused to see the latest gimmick conceived by the Goldman reality adjustment wizards who have come up with a new metric: pollution per unit of GDP.

This is how they explain it:

As part of the efforts to reduce China’s carbon footprint, the Chinese government announced in 2011 its goal to reduce carbon intensity (CO2 emission per unit GDP) by 17% in 2015 from 2010 levels. Based on IEA’s estimate of China’s CO2 emission in 2010, we estimate that China’s 2015 carbon intensity target could be around 149g/Rmb, compared to 179g/Rmb in 2010. If China is successful in reducing its carbon intensity not only would it be more comparable with the rest of the world, but it may also serve as a strong catalyst for other countries to taper their emissions

In other words, while you may be drowning in unbearable smog (don’t believe us? just check @BeijingAir), all those unknown toxic particles you are inhaling are actually not that bad when one divides them by the epic housing bubble and ghost cities you call GDP. Visullay this looks as follows:

Taken to its absurd extreme, should China build an infinite amount of empty cities in the Gobi desert, or break enough windows and thus push its GDP to somewhere just why of positive Keynesian infinity, China’s GDP problem should melt away.

Joking aside, if one were to measure pollution in its conventional way, in terms of PM2.5 concentration per volume of air, China is really not all that bad. According to the WHO there are at least 6 countries that will need to take some pointers from Goldman on how best to fudge their GDP so their Pollution/GDP ratio also gradually drifts away to zero.

Presenting: the most polluted countries in the world.

Source: WHO and Goldman Sachs




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Japanese Retail Sales Collapse By Most On Record

Given the pre-tax-hike surge, the oh-so-smart economists around the world were expecting some give-back from dragged-forward demand but the 13.7% MoM decline missed expectations by 2 percentage points. This was the largest MoM decline on record. Talking heads are already blaming the tax hike (but they knew all about it?) and year-over-year was just as dismal (and less immediately prone to events) as it fell by the most since the 2011 Tsunami. Bad news (the worst) is good news though right? Well no – USDJPY is down as is Nikkei as remember, Japanese inflation pressures are building and Kuroda has pushed off any actions from the BoJ for now.

 

Japan Retail Sales MoM – worst on record…

 

 

and YoY this is the biggest drop since the Tsunami…

 

 

Well played Abe…no wonder you are begging rich people to sya for vacation and spend…

Japanese govt considers extending duration of stay for affluent foreign tourists to maximum 1 year from current 90 days, Nikkei newspaper reports, without attribution.

 

Govt plans to set income, asset and age requirements by summer and implement new measures as early as this year: Nikkei

 

Measures aim at boosting consumption and property investment: Nikkei

 

Govt aims to double no. of foreign visitors to 20m by 2020, when Tokyo hosts the Summer Olympics: Nikkei

Please stay and spend money… cox the Japanese people sure can’t now everything they need is going up.

 

Perhaps Spinal Tap have th enext move for Apenomics?




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Exceptionalism – The Mind Killer

Exceptionalism – The Mind Killer

By

Cognitive Dissonance

 

 

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It is so deeply embedded, so seamlessly rooted and integrated into what we think of as ‘our self’, that when expressed oftentimes it is (intentionally) mistaken for something else entirely. Our indoctrination begins at birth in tiny little ways, mostly personal in nature, with our parents and care givers the initial delivery system. From day one out of the womb we are conditioned via adoring smiles and Coochie Coochie Coo’s that we are exceptional, one of a kind and King of the house. A few minutes of screaming has everyone running to stem the tears and change the pee pants. And it is all downhill from here.

When we enter a mostly government controlled (aka elite controlled) education system, it is then that our cultural conditioning is hijacked and diverted towards ‘the greater good’, cleverly morphed into statism, capitalism, populism, consumerism and nationalism, all derivatives and extensions of exceptionalism. “I pledge allegiance to the flag of the……….” Regardless of the source of the corruption, ultimately “We the Parents” are solely responsible for what is taught to our children by others.

Unfortunately the vast majority of us never resist the conditioning of our children since we are as deeply conditioned (‘cultured’ sounds so much nicer, don’t you think?) as they will be. After all why resist something that just is, and always has been, as far as we are concerned? Considering how short the lifespan of a human is compared to the longevity of the state and its always replaceable minions, who can blame us for not seeing the body from the naval while gazing.

Exceptionalism is one of the most insidious mind viruses ever created by man simply because it is often hidden within the framework of other more obvious memes and control techniques. And it feeds upon itself once its appetite has been stimulated through our unwitting and self consumed hand. The greatest trick the control system ever pulled was convincing the world’s population on a per person basis that it is in our individual best interest to subvert our own self interests for the benefit of the powerful elite. Talk about divide and conquer techniques.

Often it is presented as a beneficial sacrifice, sometimes small, sometimes very large, but almost always for the greater good. And since the greater good is served by you, and you by definition are part of the greater good, you too will benefit from your adoration of the nebulous and intangible “We the People”. It all sounds too good to be true………and it is. From birth we are taught to believe that what is good for the elite goose is good for the peon gander, beginning within our own family hierarchy and branching out from there to ‘greater’, more powerful, hierarchical elites.

This controlling meme has taken on many forms and flavors over the centuries, millennium if you think about it, with always the same outcome; our own power willingly handed over to those who declare themselves worthy, uniquely qualified, even en-titled to receive it……or to take it from us if we hesitate and don’t quickly comply. Regardless, the ultimate power source of exceptionalism is our own desire to be, or at least to feel, more powerful than we believe we really are. This deep seated need to be ‘exceptional’, this controlling meme conditioned into us from birth, springs from our own decision to concede that which is our very essence, our innate power, to unworthy and extremely destructive recipients.  

The brilliance behind the controlling ‘exceptionalism’ meme is that it works in favor of the controlling elite both on the accent and descent phases of any nation or empire, no matter how large or small it may be, and on the individual level. The citizens of tiny Monaco collectively and individually think no less of themselves than “We the Conditioned” here in the US. I can, and will, always believe myself better, faster, smarter and stronger than the person in front of me on the way up the ladder and the same applies as well while descending all the way to hell.

There is always someone worse off than me, even when I am sleeping in the streets and even when there really isn’t. While the phrase “I cried because I had no shoes until I saw a man who had no feet,” is intended to teach humility, often we secretly reject humility in order to ‘feel’ better about our own misery by embracing a sense of superiority over others. When chasing the leaders up the hill I believe myself unlucky or not yet ready to assume their superior position in the dog eat dog race. And when I fall from grace I can nurse my bruised ego by declaring myself ‘victim’ and not suited for this horrible place.

 

No shoes, but still have feet

 

But this self deception also comes into play on a more subtle level as well. How many times have we heard, read, seen or even said the following, “Oh, they would never do that” with ‘they’ almost always referred to as someone or something/entity endowed with ‘authority’ and power. Our preferred belief, that “We the Weak” are ‘better’ than others, be it persons, institutions or nations, allows us to maintain the personal illusion that the undefined ‘they’ not only share our personal world view, but because ‘they’ do, and ‘they’ are so much more powerful than ‘we’, that ‘they’ would struggle mightily to maintain ‘it’ (the status quo superior position) for ‘them’ as well as for ‘us’. In other words, their superiority will trickle down to ‘us’ both collectively and individually. Sadly we regularly indulge in the fantasy of the trickle down pee-on theory.

This of course is precisely what the powerful elite are doing, maintaining the status quo, which is their power and control over “We the People”. But because ‘we’ are conditioned to maintain a sense of distorted and corrupted exceptionalism on all levels of our existence we willingly, even enthusiastically, go with the flow in order to maintain our own personal self deception.

In essence this is a form of self censorship, of externally induced self control that we embrace because it feeds the need to be perceived internally and externally as exceptional, which itself is artificially created and reinforced by our lifelong conditioning. This is how a few tens of thousands control (a softer, more egoically acceptable phrase might be ‘greatly influence’) seven billion. And for the most part the control is exquisitely executed.

We dearly wish to self identify with our protective tormentors in order to endear ourselves to them so that we may believe we will be placed under their protective wing. This induces us to enable, and endure, all kinds of abusive behavior by ‘them’ in the name of our personal protection, which in turn helps maintain our illusion of exceptionalism. Actually this point of view perfectly demonstrates the slave mentality, of which the Stockholm syndrome is a major part of, all of which works hand in hand with the overall meme of exceptionalism.

Even “We the Slaves” have our own hierarchy, so while misery loves company if I had my druthers I would much prefer you to be more miserable than me. Since I am creating and measuring the misery index, and you have no say in the matter, I can believe whatever I want. And what I want is to feel better (more gruel please?) about myself and my servitude/slavery. From a psychological point of view, there is very little difference between the King’s monarchy of old and the present day wage slave nation. In fact I would say it is worse today because in the days of King Arthur “We the Commoners” knew our place in the hierarchal order and had no fantastical aspirations of upward mobility because none was possible.

Essentially ‘exceptionalism’ (which in the modern era is carefully hidden within ‘nationalism’) plays off our hugely distorted and inflamed ego at every level, from the lone individual playing (and occasionally winning) online poker against faceless opponents to nations engaged in international sport or warring contests. A perfect example of the group or collective ego at play in a relatively benign environment is the national fanaticism expressed by all nations involved in the World Cup or the Olympics.

When considering armed conflict “We the War Mongersalways see our ‘selves’ as righteous and superior over those we wish to suppress. In essence we are desperate to be exceptional and will do just about anything to perceive ourselves as we wish, of course always with the expressed permission from an external authority so that we may keep our own hands clean. And if that means I must hold you back or under water, or kill you, in order to feel exceptional (or better yet, get the newly conditioned young adults to do the dirty work for you)……well, that’s just the natural order of things……right?

If I can’t be happy, you sure as hell won’t be either. How else can we internally rationalize and justify the killing and maiming of other humans beings, aside from the fact that most of “We the People” aren’t actually pulling the trigger or dropping the bombs? And the elite play us like dumb placid puppets, using our conditioned fears and inadequacies against ‘us’ and others. Divide and conquer, it works because we work it.

 

We the Puppets

 

The politically correct approach to paper over the raw exceptionalism “We the Puppetsall embody to some extent or another is to affirm the joining of many nations in peaceful commerce and play; fun and games really. But the real driving force and money behind the scenes is in the exploitation by the controlling elite of the collective ego against other collective egos, all fueled by the individual ego. The various media outlets help us to avoid confronting our own raw emotional investment by promoting feel good stories in various forms and functions.

Just look at the excitement when Jamaica fields a Bobsled team in the winter Olympics, an incredible accomplishment considering Jamaica is snowless year round. This warm and fuzzy moment shared by all helps mask the fierce nationalism fueled by exceptionalism at play throughout the athletic contest. In war “We the Pious” are extremely careful to seek positive affirmation we are doing ‘right’ from those in ‘authority’, thus receiving our certificate of goodness from the very same entity that is promoting the bloody destruction. How screwed up is that?  

To give the concept of exceptionalism serious and critical thought, one must begin to question the very idea of ‘human nature’, or more accurately what we often ascribe to human nature, thus writing our ‘normal and natural’ behavior off as nearly impossible to change or stop. Ask yourself honestly; what is the difference between deeply engrained generational conditioning spanning hundreds, even thousands of years, and what we describe as ‘human nature’, itself ultimately a phrase that describes something which springs from within ‘naturally’?

Is not ‘human nature’ just the deepest form of conditioning possible, innately derived and generated at the genetic level from eons of survival and cultural lessons learned? Regardless of whether the concept of ‘evolution’ is truly correct or not, few would argue over the notion that to a large extent we are a product of our conditioned environment, both past and present, and in every possible aspect of the word.

Or maybe to soften the egoic blow I should rephrase that last sentence to read “…few would argue over the notion that to a large extent we are a product of our culture…” Except (or course) when it interferes with our beloved belief in the gloriously self deceptive ‘free will’, such as the free will expressed when we are conditioned from first grade to pledge allegiance to the elite state. I love my masters; I really do!

Let us say that I turn left at the end of my driveway 90% of the time. But today, despite wanting to turn right and travel in a different direction, without thinking I do what I normally, or ‘naturally’, do and turn left. Should we ascribe my action as simply the product of ‘human nature’ or to self conditioning? Since most spontaneity and creative thinking is conditioned out of us by the time we graduate from high school, having been perfectly trained to be the corporate cog in the profit wheel, was my inadvertent left turn a product of my ‘self’ conditioning or just a small reflex in the much bigger cultural conditioning? I owe, I owe, so off to work go. And ‘left’ is where I go when I owe.

If our entire culture is deeply embedded within the controlling money meme and nearly everything we interact with on a daily basis is measured by, compared to or embodied within the fiat fantasy, can our overall behavior within the suffocating money meme be described as ‘human nature’ or ‘conditioned reflex’. Some better questions might be…do we even recognize the difference between those two choices and are there more? For the vast majority of “We the People” the answer to the previous questions is a resounding NO we don’t and YES there are. 

I propose that the psychological carrot offered by perceived exceptionalism, along with the stick of wage slavery and a conditioned mind, which the personal and collective ego quickly diminishes in importance by hiding ‘it’ in plain sight in the form of other ‘isms’ so that it may remain safely hidden from self perception and introspection, is the bedrock support for our self imposed slavery.

And as ridiculous as this may sound to the average Jane and Joe, the upper class (notice I did not say ‘controlling elite’) also suffers from their own form of self imposed slavery, though granted they are less concerned with day to day survival and much more with their social status and business connections. But the mechanisms involved remain pretty much the same as the unwashed masses. We are all trickled on pee-ons when you get right down to the nitty gritty. Some just smell and dress better than the others.

 

05-28-2014

Cognitive Dissonance

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Market Timing With Dennis Gartman: “The Market Will Stop When It Stops, Not A Moment Before”

Renowned for something, Dennis Gartman has outdone himself once again (again). After explaining that bonds are rallying on pension fund rebalancing but stocks should not be lower and shorting bonds never works; the bearded market-timing philosopher gives a glimpse of the kind of insight that can only be purchased for $29.95: “the market will stop when it stops; not a moment before.”

 

Here it is…grab the popcorn





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Tonight on The Independents: Obama’s Foreign Policy, Snowden’s Spycraft, Jared Polis on Email Privacy, Adam Sandler’s Cinematic Racism, Ferret Freedom, Videotaping Gun Sales, the Drone-Memo Switcheroo, Plus After-Show!

Good luck! ||| Pete SouzaTonight’s live episode of The
Independents
(Fox Business Network, 9 p.m. ET, 6 p.m. PT,
repeats three hours later) will feature a Party Panel of Washington Free
Beacon
staff writer Lachlan Markay and
Newsday columnist Ellis Henican, who will argue
about most of the following topics:

* President Barack Obama’s
big foreign policy commencement address
today at West Point,
during which he
slayed more strawmen
than a pyromaniac, implied that the “drone
strikes like those we’ve carried out in Yemen and Somalia” only
come “when we face a continuing, imminent threat, and only where
there is no certainty—there is near certainty of no civilian
casualties,” and gave ammunition to just about everybody who does
not appreciate his foreign policy.

* Edward Snowden’s
revelatory NBC interview
, and reactions thereof.

* Chicago Mayor Rahm Emanuel’s idea to
require videotaping of gun sales
.

* Adam Sandler’s allegedly
racially offensive
new movie.

Rep.
Jared Polis
(D-Colo.), no stranger to either
The Independents
or
Reason
, then comes on again to discuss
The Email Privacy Act
, which he has co-sponsored with Reps.
Kevin Yoder (R-Kans.) and Tom Graves (R-Ga.), which would require
law enforcement to obtain a warrant before scrounging through the
six-month-old emails of private citizens. Darin Selnick of
Concerned Veterans for America
will be on to talk about the

damning report
released today by the V.A. Inspector General.
The co-hosts will have plenty to say about New York Mayor Bill de
Blasio’s
attempt to repeal
the city’s notorious ferret
ban
. And did you hear the one about White House officials

seeking extra redactions
in that drone memo Sen. Rand Paul
(R-Ky.) helped pry out of their reluctant hands? Of course you
didn’t: because
David Barron
is already safely confirmed, thanks to the Senate
votes of alleged civil libertarians who were bought off with the
promise of full disclosure.

Aftershow begins on http://ift.tt/QYHXdy
when the gong strikes 10. Follow The Independents on
Facebook at http://ift.tt/QYHXdB,
follow on Twitter @ independentsFBN, please
tweet like bastards during the show, and click on this page
for more video of past segments.

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Things That May You Go Hmmm… Like Spamazon and Flutter

During the first internet boom, the business model of South Park's Underpants Gnomes was commonplace, as scores of companies flooded the marketplace, sustained purely by the promise of future profits that would somehow magically appear. As Grant Williams scoffs in his most recent letter, it was the corporate embodiment of George Costanza’s “yada, yada, yada”: “First we build a company… yada, yada, yada… we make billions.” Of course, most of these companies went the way of the dodo; but remarkably, a mere 14 years after the bursting of the original internet bubble, there are signs of what Yogi Berra so beautifully referred to as “déjà vu all over again”signs which some real heavyweight financial minds have recently highlighted…

(Seattle Times): Venture capital rising to levels not seen since 2001. Companies with no profits going public. Billions of dollars being paid for startups.

 

These and other signs that the tech boom may be taking an irrational turn are leading some notable investors to utter the dreaded word “bubble,” waking up the ghosts of an era many in Silicon Valley would prefer to keep buried.

 

Has Silicon Valley once again lost its collective mind?

 

Hedge-fund manager David Einhorn thinks so.

 

“There is a clear consensus that we are witnessing our second tech bubble in 15 years,” he warned in a note to his clients in late April. “What is uncertain is how much further the bubble can expand, and what might pop it.”

Of course, as we saw in 1998/9, there are plenty of people who believe in fairy tales, and they are happy to explain why THIS time is different:

Venture capitalists and entrepreneurs insist the Silicon Valley tech economy is not in bubble territory. Yes, they misjudged just how fast the Internet would change the world a decade ago and let things get a little bit out of hand.

 

But this time, they say, the revolution of mobile and cloud services justifies big, bold bets. And most of the companies going public are profitable, with real businesses that are transforming the way we live.

 

To some tech insiders, the region’s economy is in a “Goldilocks” moment. Not too hot. Not too cold. Enough of a boom to be just right.

Seriously?… Goldilocks? Again with that?

The day that rationality returns to investing in technology stocks will be the day that we see some high-flyers (which had previously been given a pass on their poor performance because the promise of a bright tomorrow was just SO compelling) fall to earth in a hurry.

However, so as not to call out any specific companies, I am going to take the South Park approach and lay out a hypothetical fable about one such giant, highflying corporate darling which has been embraced for its willingness to follow the Underpants Gnomes’ ingenious business plan.

Let's call this company… Spamazon

But is there any point in going over the fictional metrics of a fictional internet behemoth just to belabor a point? After all, it’s not as though it actually matters in the real world. And it’s not as if Spamazon is the ONLY fictional company purusing the Underpants Gnomes’ business playbook.

Take Flutter, for example.

The Flutter business model is eerily similar to that of Spamazon:

This surge in companies being awarded huge valuations based solely on the fact that, like the Underpants Gnomes, Phase Three of their business plans calls for gargantuan profits has reached a level seen only once before.

Can you guess when that was?

Yep… the share of companies coming to market with negative earnings reached 74% in early 2014, a level surpassed only in…….. drumroll, please…….. February 2000.

Eventually, momentum based upon future promises will cease, and when it does (or if it has) then anybody taking a long hard look at the stocks they bought during the mania will find only one word to describe the quality of many of those companies:

Pants.

Full Grant Williams Letter below…

 

TTMYGH_May_27_2014




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European Bonds Front Running ECB Setup for Disappointment

By EconMatters

 

 

June 5th ECB Meeting

 

 

There has been a lot on Bond Buying in Europe and that enthusiasm has transferred over to the United States with the thought that European Central-bank President Mario Draghi is going to embark on some massive bond buying stimulus program similar to the US Federal Reserve`s Bond Buying stimulus program. These moves in some of these European Bonds and even the US 10-Year Yield moving 20 basis points ahead of the announcement sure are setting bond markets up for some massive disappointment compared to the actual much hyped bond buying program announcement scheduled for June 5th.

 

Read More: U.S. Bond Is Not Japan or Europe

 

European Yields & Upside Risk

 

 

This sure seems like a buy the rumor, sell the news event if there ever was one in financial markets given the fact that Mario Draghi and the ECB has been a serial disappointer for actually delivering on his rhetoric with actual policy actions. Spanish 10-year yields being close to 2.80%, Germany 10 Year Bond Yields at 1.33%, Italy 10 Year Bond Yields at 2.93%, Belgium 10 Year Bond Yields at 1.87% and France 10 Year Bond Yields at 1.72%. These sure seem out of whack with the solvency reality circus of just three years ago. Did these countries all the sudden become balance sheet healthy and solvent overnight? What kind of risk is there in owning these notes long-term? This cannot possibly be sustainable, talk about bubbles in financial markets and mispricing of risk!

 

 

Debt to GDP Ratios

 

There has got to be a lot of money made by taking the other side of this trade, this is money spending European governments we are talking about with more social programs than you can possibly imagine governments spending their tax dollars on. There are two issues here one may be a supposed deflation in Europe the other is that these countries are going the other direction in terms of solvency issues with climbing Debt to GDP Ratios. Are these low yields really going to hold over time? Are these investors being paid a high enough yield on these bonds for the solvency risks they are taking?

 

 

 


European Yields Higher in 3 Months

 

 

I imagine this is just traders being traders and trying to front run an economic event, but some of these yield levels just don`t jive with the fundamentals of these countries financial ability to pay off their debt, and the situation seems to be getting worse not better. But I realize this isn`t about solvency issues, these trades are put on to make money in the short term. Well, they have succeeded in making a lot of money, but they still have to sell these same bonds at some point. Just like in Gold shorting attacks, we will see where price shakes out after closing out these positions. My bet is that European yields are higher three months from now, and maybe even right after the Draghi ECB announcement. When in doubt buy the rumor, but sell the actual news in financial markets! 

 

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Did you know wrapping the end of your bananas with plastic wrap helps them last 3-4 days longer before expiring? Very helpful tool for those of us who live off of produce and hate making several trips to the grocery store. #themoreyouknow

@hooper_fit

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Chart Of The Day: Global Youth Unemployment

We have some bad news… for Africa: according to the latest data released by the International Labor Organization, your youth unemployment problem is almost as bad as that of Europe.

Maybe more to the point, just what is it about those bracing Mediterranean sea breezes (not to mention mandated Eurozone “political capital” and relentlessly liberating – of one’s job – globallization) that makes the young people in the adjoining countries choose to do pretty much anything but work?

Source: ILO




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