another site
Some students enrolled at the
University of Central Florida this fall have found just a tiny
problem with their housing assignments. They have been assigned to
live in bathrooms
and closets. A university spokesman blames a computer glitch.
She says the problem has been fixed and students will have actual
rooms waiting on them when they arrive on campus.
from Hit & Run http://ift.tt/1s49M3T
via IFTTT
What was yesterday’s lifesaver to bring about trade between countries and to bring down the barriers is today’s thorn in the side of the world. The WTO is dying a slow and painful death and has neared the end of its life today. As the global agreement collapses amidst the Indian demand to be able to stockpile food for itself and for countries that are developing around the world, the WTO cannot live much longer. It will be dead within a short while.
There’s no salvaging of anything today even after the 11th hour negotiations to get India to back down on its demands. The deadline for signing the deal was set at midnight on Thursday and the 160 members of the WTO have failed dismally to come to an agreement.
Telling times of the world today in which we live
Everybody is receding into the recesses of their own interest rather than making concessions to anyone. TheWTO is relatively young and was only founded two decades ago but the life it has lived is now obviously coming to an end. No deal can be reached on global trade and that would have been a world’s first in itself.
The Director General of the Geneva-based organization Roberto Azevêdo stated: “We have not been able to find a solution that would allow us to bridge that gap. We tried everything we could. But it has not proved possible. The fact we do not have a conclusion means that we are entering a new phase in our work – a phase which strikes me as being full of uncertainties”. The future is not full of uncertainties at all. One certainty is that it’s impossible to reach a global trade agreement.
The WTO will just be the wise old fool that people go to in order to settle disputes if it lives on in any capacity. But, it is certainly not going to be the instigator of anything that is remotely likely to reduce trade barriers or to set up a forum for the liberalization of trade talks.
But, it’s the West that was unable to give in and yet it had the most to gain from an agreement like the one being put forward. The inflexibility, the stiff rules and regulations that people never want broken will leave some out in the cold and will also leave developed countries without that extra mile that they need to go to improve their economies. India will be stockpiling whether they get the agreement of the WTO or not.
The Australian Minister of Trade Andrew Robb stated: “Australia is deeply disappointed that it has not been possible to meet the deadline. This failure is a great blow to the confidence revived in Bali that the WTO can deliver negotiated outcomes. There are no winners from this outcome, least of all those in developing countries which would see the biggest gains”.
India said that it wanted to return to the negotiation table and hammer out a deal, despite not reaching one here and now. That simply means that they are open to getting what they want and if they don’t then the talks will just be endless. What the developed world doesn’t like is that India has stood up and will be towering over the West much to their dismay.
India was even threatened with being excluded. How can you exclude the second most populous country in the world from a global trade agreement? Easily, if you are focused on your own interests rather than anyone else’s. Drama and kids playing in the sandpit out in the back yard rather than high-level negotiations on a trade agreement that would bring down barriers around the world.
But Bali in December 2013 favored big business and left the developing countries on a shoe-string. It was exploitation at its best and that’s why it will never be accepted. Azevêdo was even tearful at the closing ceremony in Bali and said that “For the first time in our history, the WTO has truly delivered”. Delivered what? They hoped that they had delivered a means of boosting the developed countries’ economies.
The WTO took twenty-odd years to get to a global agreement and it still hasn’t got there. The deal would bring in $960 billion in trade, but that wouldn’t be for the world’s poorest. The scheme by the Indian government to pay farmers a minimum wage, stockpile food and feed 800 million is worthless by comparison of the billions that developed countries would get. Feeding people doesn’t stand a chance when the dollars are being notched up. We know that already.
Perhaps the WTO should be allowed to die after all.
Originally Posted: WTO Dying a Slow Death
via Zero Hedge http://ift.tt/1njPf3M Pivotfarm
Submitted by James E. Miller via Mises Canada,
In his provocative cover story “Why Liberalism Means Empire” for The American Conservative, Daniel McCarthy makes a rather astounding claim: that liberalism, or rather laissez faire secular order, needs a state hegemon to be long-lasting. I call this argument astounding because McCarthy often advocates non-intervention in foreign affairs. He’s never one to shy away from damning the bellicose transgressions of the United States government. Yet he, at times, seems to be defending Washington’s vice grip on global affairs, and claims that such mastery is necessary for liberal democracy and the free flow of trade. He writes:
“Liberal imperialism is not directed toward gratuitous conquest but toward maintaining a global environment conducive to liberalism.”
Whether McCarthy’s argument is correct or not will not be addressed here. Rather, the question of intentions behind empire will be examined, as they receive scant attention in McCarthy’s polemic. It’s certainly true that governments are driven by people trying to shower their universal values upon the planet. But is it really the case that the U.S. government is interested in promoting liberal democracy abroad?
McCarthy points out that the British Empire played a key role in engendering autonomy within the early years of the U.S. He notes that with “Britain keeping any possible global predator at bay, American statesmen could pursue their ends through means other than war.” Following World War I, and Britain’s war losses at the hands of Germany, it was time for a new world power to rise up and reestablish the liberal order. The United States, which had largely minded its own business prior to the Great War, was thrust to the forefront of being the globe’s protector of classical liberalism.
Decades later, neoconservative ideology adopted the “spread democracy abroad” trope as an excuse for imperium. But today, as the American economy remains bogged down in stagnation, and the national debt climbs ever higher, the salad days of U.S. worldwide influence are waning. Empire is expensive. In a representative democracy such as America, it also requires both the votes and tax dollars of citizens to sustain itself. Public perception is leaning more towards non-intervention. The warmongers and elites in D.C. decry the shift in sentiment, and are busy trying to find excuses to continue propping up the Empire. Their efforts will be in vain mainly because their rhetoric is no longer trusted. The lies, deceit, and subterfuge used to justify foreign adventurism is finally coming to a head.
There are plenty of reasons to oppose unfettered U.S. intervention abroad. But one, I suspect, is having a stronger effect than others: the American people, along with many citizens in Western countries, no longer believe empire means the promotion of equality, rule of law, and liberalism around the world. Due to Washington’s contradictory alliances, the ostensible need for imperium comes off as a wash. Blood and treasure aren’t being wasted on making the world more conducive to the West’s values; rather it’s for the aggrandizement of the political class above all else.
One country in particular is demonstrative of the American government’s hypocrisy-ridden foreign agenda. According to a new leak by famed whistleblower Edward Snowden, the National Security Agency is working closely with the Saudi Ministry of Interior, an agency described by journalist Glenn Greenwald as “one of the world’s most repressive and abusive government agencies.” Saudi Arabia is notorious for its horrendous human rights record. Yet the NSA has cultivated an ever-closer relationship with the Arab theocracy in recent years. In a top secret memo from 2013, the intelligence agency admits to providing “direct analytic and technical support” to the repressive regime. This was after the State Department determined that the Saudi Ministry of Interior officials “sometimes subjected prisoners and detainees to torture and other physical abuse.” The agency’s report also states the regime is responsible for:
“torture and other abuses; overcrowding in prisons and detention centers; holding political prisoners and detainees; denial of due process; arbitrary arrest and detention; and arbitrary interference with privacy, home, and correspondence.”
The Saudi regime is not only being propped up by the American taxpayer, but it’s given expertise from government officials on how to better suppress political dissidents. It’s these kind of instances of glad-handing with dictators that turn off normal, working people. Americans see pols give lofty sermons about promoting freedom and democracy on television, and then witness their tax dollars go toward brutal authoritarians to retain global standing. It’s a perverse message that even a child can detect is painfully dishonest. From Egypt to Kuwait, coffers of oppression are filled with U.S. dollars swiped via payroll taxes. How long was the dissonance supposed to last before suspicion set in?
The current push to punish Russian President Vladimir Putin for the downing of Malaysia Airlines Flight MH17 – a crime there is still no evidence he or his government committed – is gaining no ground. After the boondoggle of Iraq, there is little confidence in another full-on ground invasion. Last summer’s threat of war in Syria was challenged outright by angry voters. The working class in flyover country is tired of the half-truths and propaganda. They don’t care much for universal values or overthrowing despots or maintaining a worldwide liberal h?gem?n.
McCarthy may be correct that liberal social orders require the threat of a strong, centralized state. Even so, control rendered from on high cannot last. As he writes, “[L]iberal democracy is unnatural. It is a product of power and security, not innate human sociability.” Democracy from afar is a house of cards, poised to fall when those in charge demonstrate effete management. If a house divided cannot stand, then a house of lies cannot keep up the charade. People want a bargain for the money they pay; they want a tangible result that matches their expectations. In the case of American empire, they aren’t getting the goods.
The world is no more safer than it was when the War on Terror began. Some of the Middle East’s most brutal dictators were removed from power, but radical jihadists have filled the vacuum of authority. Men and women are still coming home in caskets draped with Old Glory, or they come home mentally and physically debilitated. And for what exactly? The Persian Gulf is arguably more tyrannical and dangerous than before Uncle Sam made a point of establishing liberal democracy at the turn of the century. Either the mission was a failure, or there was another objective involved. If Smedley Butler was correct, and war is a racket, then there was another measure of success at work. And it sure wasn’t the promotion of universal democratic values. If empire can’t bring that, then there isn’t much of a point outside of domination. In other words, somebody benefits from imperium, and it’s not the average voter. Sooner or later the jig is up.
via Zero Hedge http://ift.tt/1o3P6GD Tyler Durden
Low volatility is being driven, in BofAML's view, by both fundamental and technical factors. Fundamentally, the volatility of real economic activity and inflation has fallen to near 20 year lows in what some are calling the Great Moderation 2.0. However, the recent further collapse in volatility is also explained by a feedback loop fueled by low conviction, low liquidity, low yields and low fear. Central bank policy has been the largest explanatory factor of both the fundamentals and technicals… and that has BofAML concerned about the risks of short-term volatility spikes exacerbated by market illiquidity.
Via BofAML,
Volatility across asset classes, including credit, rates, FX, commodity and equity has collectively hit its lowest level in recorded history, not only in terms of the volatility being realized by markets but also the volatility implied by options.
This is impressive given the fact that prior to this, the 2003-2007 period represented the biggest bubble recorded in volatility, driven by the liquidity produced through the excesses of the credit bubble and the exponential growth in hedge fund capital and leverage.
Volatility across asset classes has also become statistically more interlinked in recent years, being driven to a greater degree by a fewer number of factors.
This is most likely the increasing influence of central bank policy operating through multiple channels on the overall price of risk.
* * *
What are the key drivers of today’s low volatility? While the factors impacting volatility across asset classes range from highly macro to idiosyncratic issues of a given asset class, we point to four factors impacting most assets globally:
1) Low economic volatility: This is one of the most striking long-term trends in the volatility landscape.
Chart 3 illustrates that since the mid-80s, during times of economic expansion, GDP growth has been very smooth compared to any other period post WWII. While many dismissed the “Great Moderation” of stable growth and low and stable inflation during the unwinding of the credit bubble, we are seeing clear evidence of a “Great Moderation 2.0” post GFC.
Chart 4 shows the realized volatility of economic activity indicators including Nonfarm Payrolls, Industrial Production and Personal Consumption, as well as volatility of realized inflation, which has recently hit 20 year lows. In our opinion, the primary drivers of this decline in fundamental volatility are A) more proactive and transparent central bank policy, and B) the difficulty of trying to lift a highly depressed global economy out of a deflationary spiral post the Great Financial Crisis (GFC).
2) Scarcity of yield: In research published in 2005 led by Arik Reiss, we noted that volatility (in equity) tends to rise and fall with the interest rate cycle, but with an approximate 2 year lag (Chart 5).
As interest rates decline and the supply of “safe yielding” assets falls, this encourages more risk taking by investors in the form of selling volatility, either directly through options (selling insurance) or indirectly through more aggressive arbitrage activity which is inherently short volatility (as most arb activity is). While real yields began to back up in April 2013 (Chart 5), the historical time lag would suggest 2015 as a potential turning point.
3) Psychology of hedging and the central bank put: Having lived through the most volatile period since the great depression in addition to what many thought could be the unravelling of Europe’s union, held together by central bank policy (or promise thereof), investors have become accustomed to not fear risk. Geopolitical risks that in the past would have most likely roiled markets today cause them to hardly flinch.
As one measure of this, Chart 6 illustrates that demand for S&P puts (among the most popular macro hedges) has fallen since early 2012 despite the intensity of negative newsflow remaining near long-term highs. The power of central bank policy on the pricing of risk is also evident in Europe, the region most recently bombarded with central bank liquidity, now has the most depressed risk of any region. While this does not seem to reflect true differentiation in regional risk, few have wanted to stand in front of the ECB liquidity train.
4) Falling market volumes/lack of activity: The linkages between market trading activity and volatility are strongly intertwined. Shrinking bank balance sheets due to regulation as well as a lack of risk appetite post-08 has helped reduce liquidity in many balance sheet intensive OTC markets.
As Chart 8 shows, US equity market volumes have also moved in-line with volatility in part due to longer-term trends including greater usage of index products, and high market correlations within equities. The tough trading environment in 2014 for many investors has also likely helped exacerbate the most recent leg down in volatility as lower conviction leads to low volume and lower volatility.
* * *
The bottom line is that central bank policy, through both the fundamental economic volatility it drives, its control of the supply of “safe yielding assets” and the impact it has on the “psychology of hedging” is the single most important factor driving volatility across asset classes. Hence the outlook for central bank tightening and likewise inflation trends is key.
* * *
Exogenous shocks and seasonal risks
It has primarily been this summer that volatility has taken a further leg lower to breach historical lows, owing to a feedback loop of low market conviction and falling volumes on top of the low volatility backdrop.
In addition, seasonally volatility is lowest in the summer and highest in the autumn (Chart 15), so simply based on historical trends, the likelihood of a shortterm rise in volatility as investors return from summer holidays and feel compelled to trade is present.
In addition, Michael Harnett, our Chief Investment Strategist recently noted three catalysts that he believes could cause a temporal shock to volatility in the next six months:
1) A macro event that causes a “rate shock” for example from a blowo
ut US payrolls figure; he thinks a dollar rally could provide early warning
2) A financial event that causes a “credit shock”, in turn causing deleveraging and forced selling from a tightly wound credit market; which he believes is the most likely risk
3) A geopolitical event that causes a “growth shock” raising fears of a recession; the more unlikely risk unless it involves China and/or a Middle East conflict that causes a spike in oil prices
Hans Mikkelsen, head of US high grade credit strategy, also concurs that given how crowded the high grade credit trade has become on the back of record inflows, in particular through products like ETFs (which can demand liquidity) high grade credit volatility could increase upon the first signs of rate hikes or in anticipation of higher rates. With dealer balance sheets constrained due to capital regulations, “risk-off” periods could be met with an increase in volatility as the banks are less willing to act as a market buffer during a period of outflows.
Our high yield and credit derivative strategists, Michael Contopoulos and Rachna Ramachandran, believe that in high yield credit, though volatility is likely to increase upon a move higher in rates, fundamentals matter significantly more than in high grade. To see a meaningful sustained increase in high yield volatility, they believe a deterioration of balance sheets would need to exist, causing the default rate to rise and for the “reach for yield” trade to unwind.
* * *
Cheapest ways to hedge…
To find the cheapest options-based tail risk hedges across asset classes, our cross asset tail risk hedging screen below compares current put option costs to the magnitude of historical tail events.
Hedges with the best potential value today are ones that are cheap to enter relative to the expected payoff in a tail event, assuming historical tail events characterize the potential magnitude of future sell-offs. Readings further to the right of the chart below represent assets that are most underpricing historical tail events currently.
Ranked by average benefit-to-cost ratio, Chart 21 shows that puts on TWSE (Taiwan equities), EURUSD and Crude Oil offer most value across asset classes:
TWSE puts screen most attractive overall as volatility on Taiwan equities is still in historically low territory despite a recent uptick
EURUSD puts at current pricing offer best value on average within FX and the second best across asset classes
Crude Oil puts offer the third best value overall as WTI Crude Oil was one of the few assets in our screen for which volatility dropped over the month of July
Finally, BofAML's equity derivatives strategists Benjamin Bowler and Nitin Saksena note that the average volatility of US large cap stocks has been trading near its lowest levels on record, unlike S&P 500 index volatility, which remains supported vs. 2005-07 lows. Hence they favor trades that buy record low US single stock volatility, funded by selling a conservative amount of index volatility to mitigate carry.
via Zero Hedge http://ift.tt/1xVdQC1 Tyler Durden
Low volatility is being driven, in BofAML's view, by both fundamental and technical factors. Fundamentally, the volatility of real economic activity and inflation has fallen to near 20 year lows in what some are calling the Great Moderation 2.0. However, the recent further collapse in volatility is also explained by a feedback loop fueled by low conviction, low liquidity, low yields and low fear. Central bank policy has been the largest explanatory factor of both the fundamentals and technicals… and that has BofAML concerned about the risks of short-term volatility spikes exacerbated by market illiquidity.
Via BofAML,
Volatility across asset classes, including credit, rates, FX, commodity and equity has collectively hit its lowest level in recorded history, not only in terms of the volatility being realized by markets but also the volatility implied by options.
This is impressive given the fact that prior to this, the 2003-2007 period represented the biggest bubble recorded in volatility, driven by the liquidity produced through the excesses of the credit bubble and the exponential growth in hedge fund capital and leverage.
Volatility across asset classes has also become statistically more interlinked in recent years, being driven to a greater degree by a fewer number of factors.
This is most likely the increasing influence of central bank policy operating through multiple channels on the overall price of risk.
* * *
What are the key drivers of today’s low volatility? While the factors impacting volatility across asset classes range from highly macro to idiosyncratic issues of a given asset class, we point to four factors impacting most assets globally:
1) Low economic volatility: This is one of the most striking long-term trends in the volatility landscape.
Chart 3 illustrates that since the mid-80s, during times of economic expansion, GDP growth has been very smooth compared to any other period post WWII. While many dismissed the “Great Moderation” of stable growth and low and stable inflation during the unwinding of the credit bubble, we are seeing clear evidence of a “Great Moderation 2.0” post GFC.
Chart 4 shows the realized volatility of economic activity indicators including Nonfarm Payrolls, Industrial Production and Personal Consumption, as well as volatility of realized inflation, which has recently hit 20 year lows. In our opinion, the primary drivers of this decline in fundamental volatility are A) more proactive and transparent central bank policy, and B) the difficulty of trying to lift a highly depressed global economy out of a deflationary spiral post the Great Financial Crisis (GFC).
2) Scarcity of yield: In research published in 2005 led by Arik Reiss, we noted that volatility (in equity) tends to rise and fall with the interest rate cycle, but with an approximate 2 year lag (Chart 5).
As interest rates decline and the supply of “safe yielding” assets falls, this encourages more risk taking by investors in the form of selling volatility, either directly through options (selling insurance) or indirectly through more aggressive arbitrage activity which is inherently short volatility (as most arb activity is). While real yields began to back up in April 2013 (Chart 5), the historical time lag would suggest 2015 as a potential turning point.
3) Psychology of hedging and the central bank put: Having lived through the most volatile period since the great depression in addition to what many thought could be the unravelling of Europe’s union, held together by central bank policy (or promise thereof), investors have become accustomed to not fear risk. Geopolitical risks that in the past would have most likely roiled markets today cause them to hardly flinch.
As one measure of this, Chart 6 illustrates that demand for S&P puts (among the most popular macro hedges) has fallen since early 2012 despite the intensity of negative newsflow remaining near long-term highs. The power of central bank policy on the pricing of risk is also evident in Europe, the region most recently bombarded with central bank liquidity, now has the most depressed risk of any region. While this does not seem to reflect true differentiation in regional risk, few have wanted to stand in front of the ECB liquidity train.
4) Falling market volumes/lack of activity: The linkages between market trading activity and volatility are strongly intertwined. Shrinking bank balance sheets due to regulation as well as a lack of risk appetite post-08 has helped reduce liquidity in many balance sheet intensive OTC markets.
As Chart 8 shows, US equity market volumes have also moved in-line with volatility in part due to longer-term trends including greater usage of index products, and high market correlations within equities. The tough trading environment in 2014 for many investors has also likely helped exacerbate the most recent leg down in volatility as lower conviction leads to low volume and lower volatility.
* * *
The bottom line is that central bank policy, through both the fundamental economic volatility it drives, its control of the supply of “safe yielding assets” and the impact it has on the “psychology of hedging” is the single most important factor driving volatility across asset classes. Hence the outlook for central bank tightening and likewise inflation trends is key.
* * *
Exogenous shocks and seasonal risks
It has primarily been this summer that volatility has taken a further leg lower to breach historical lows, owing to a feedback loop of low market conviction and falling volumes on top of the low volatility backdrop.
In addition, seasonally volatility is lowest in the summer and highest in the autumn (Chart 15), so simply based on historical trends, the likelihood of a shortterm rise in volatility as investors return from summer holidays and feel compelled to trade is present.
In addition, Michael Harnett, our Chief Investment Strategist recently noted three catalysts that he believes could cause a temporal shock to volatility in the next six months:
1) A macro event that causes a “rate shock” for example from a blowout US payrolls figure; he thinks a dollar rally could provide early warning
2) A financial event that causes a “credit shock”, in turn causing deleveraging and forced selling from a tightly wound credit market; which he believes is the most likely risk
3) A geopolitical event that causes a “growth shock” raising fears of a recession; the more unlikely risk unless it involves China and/or a Middle East conflict that causes a spike in oil prices
Hans Mikkelsen, head of US high grade credit strategy, also concurs that given how crowded the high grade credit trade has become on the back of record inflows, in particular through products like ETFs (which can demand liquidity) high grade credit volatility could increase upon the first signs of rate hikes or in anticipation of higher rates. With dealer balance sheets constrained due to capital regulations, “risk-off” periods could be met with an increase in volatility as the banks are less willing to act as a market buffer during a period of outflows.
Our high yield and credit derivative strategists, Michael Contopoulos and Rachna Ramachandran, believe that in high yield credit, though volatility is likely to increase upon a move higher in rates, fundamentals matter significantly more than in high grade. To see a meaningful sustained increase in high yield volatility, they believe a deterioration of balance sheets would need to exist, causing the default rate to rise and for the “reach for yield” trade to unwind.
* * *
Cheapest ways to hedge…
To find the cheapest options-based tail risk hedges across asset classes, our cross asset tail risk hedging screen below compares current put option costs to the magnitude of historical tail events.
Hedges with the best potential value today are ones that are cheap to enter relative to the expected payoff in a tail event, assuming historical tail events characterize the potential magnitude of future sell-offs. Readings further to the right of the chart below represent assets that are most underpricing historical tail events currently.
Ranked by average benefit-to-cost ratio, Chart 21 shows that puts on TWSE (Taiwan equities), EURUSD and Crude Oil offer most value across asset classes:
TWSE puts screen most attractive overall as volatility on Taiwan equities is still in historically low territory despite a recent uptick
EURUSD puts at current pricing offer best value on average within FX and the second best across asset classes
Crude Oil puts offer the third best value overall as WTI Crude Oil was one of the few assets in our screen for which volatility dropped over the month of July
Finally, BofAML's equity derivatives strategists Benjamin Bowler and Nitin Saksena note that the average volatility of US large cap stocks has been trading near its lowest levels on record, unlike S&P 500 index volatility, which remains supported vs. 2005-07 lows. Hence they favor trades that buy record low US single stock volatility, funded by selling a conservative amount of index volatility to mitigate carry.
via Zero Hedge http://ift.tt/1xVdQC1 Tyler Durden
With China’s Manufacturing PMI at cycle highs and Services PMI comfortably in expansion, everything must be ponies and unicorns among the world’s most mal-invested credit-bubble-fueled populace. However, as we have pointed out, discrepancies abound in the data and now desperately sad anecdotal picture of a wretched working class in China are starting to emerge. As WantChinaTimes reports, 55-year-old Zhao Guangsheng poured flammable liquids on his body before lighting himself on fire and running into Xingtan city government’s office lobby (in Hunan province). Poverty appears to be the reason for his self-immolation, aside from mental instability, as Zhao was unable to pay utility bills after being moved due to forced land acquisitions by the government.
The city government of Xingtan in south China’s Hunan province has confirmed rumors that a man set himself on fire outside government offices on Friday after photos of the self-immolation incident went viral on the internet.
Witnesses say the man, identified as Zhao Guangsheng, a 55-year-old former local boiler plant worker, poured flammable liquids on his body before lighting himself on fire and running into the city government’s office lobby at around 4:30pm on Aug. 1.
The flames were eventually put out by security guards and Zhao was rushed to the hospital, where he reportedly sustained third-degree burns to 99% of his body.
…
Zhao’s motive for setting himself on fire appears to be linked to a combination of long-term financial desperation, family problems and emotional and psychological instability.
…
Neighbors told reporters that Zhao and his son previously lived in public housing but were forced to vacate the property for a different government-funded community in the second half of 2013 because they were unable to pay utility bills. Sources told Xinhua that Zhao had visited the government office on multiple occasions and had applied for early retirement and low-price housing…
…
In some of the photos online, it appeared someone had written the Chinese characters for “Land” on the ground, leading to speculation that the incident may have been related to forced land acquisitions by the government, though this has been denied by insider sources.
* * *
This is all very depressing – and anecdotal of course – though we note that employmeht indices in the PMIs have been in contraction for 27 months. By way of finding a more jovial conclusion to this story, we thought the following clip might help… as Chinese central planners build an ‘optimal’ square-cornered running track…
Mal-investment at its best…
via Zero Hedge http://ift.tt/1xV5Vod Tyler Durden
With China’s Manufacturing PMI at cycle highs and Services PMI comfortably in expansion, everything must be ponies and unicorns among the world’s most mal-invested credit-bubble-fueled populace. However, as we have pointed out, discrepancies abound in the data and now desperately sad anecdotal picture of a wretched working class in China are starting to emerge. As WantChinaTimes reports, 55-year-old Zhao Guangsheng poured flammable liquids on his body before lighting himself on fire and running into Xingtan city government’s office lobby (in Hunan province). Poverty appears to be the reason for his self-immolation, aside from mental instability, as Zhao was unable to pay utility bills after being moved due to forced land acquisitions by the government.
The city government of Xingtan in south China’s Hunan province has confirmed rumors that a man set himself on fire outside government offices on Friday after photos of the self-immolation incident went viral on the internet.
Witnesses say the man, identified as Zhao Guangsheng, a 55-year-old former local boiler plant worker, poured flammable liquids on his body before lighting himself on fire and running into the city government’s office lobby at around 4:30pm on Aug. 1.
The flames were eventually put out by security guards and Zhao was rushed to the hospital, where he reportedly sustained third-degree burns to 99% of his body.
…
Zhao’s motive for setting himself on fire appears to be linked to a combination of long-term financial desperation, family problems and emotional and psychological instability.
…
Neighbors told reporters that Zhao and his son previously lived in public housing but were forced to vacate the property for a different government-funded community in the second half of 2013 because they were unable to pay utility bills. Sources told Xinhua that Zhao had visited the government office on multiple occasions and had applied for early retirement and low-price housing…
…
In some of the photos online, it appeared someone had written the Chinese characters for “Land” on the ground, leading to speculation that the incident may have been related to forced land acquisitions by the government, though this has been denied by insider sources.
* * *
This is all very depressing – and anecdotal of course – though we note that employmeht indices in the PMIs have been in contraction for 27 months. By way of finding a more jovial conclusion to this story, we thought the following clip might help… as Chinese central planners build an ‘optimal’ square-cornered running track…
Mal-investment at its best…
via Zero Hedge http://ift.tt/1xV5Vod Tyler Durden
via Zero Hedge http://ift.tt/1s31Ks1 williambanzai7
Excerpted from John Hussman’s Weekly Market Comment,
Historically-informed investors are being given a hint of advance warning here, in the form of a strenuously overvalued market that now demonstrates a clear breakdown in internals. We observe these breakdowns in the form of surging credit spreads (junk bond yields versus Treasury yields of similar maturity), weakness in small capitalization stocks, and other measures.
These divergences have actually been building for months, but rather quietly. Note, for example, that as the S&P 500 pushed to new highs in recent weeks, cumulative advances less declines among NYSE stocks failed to confirm those highs, while junk bond prices were already deteriorating.
We don’t take any single divergence as serious in itself, but the accumulation of divergences in recent weeks should not be ignored. Notably, the majority of NYSE stocks are now below their respective 200-day moving averages (which again, isn’t serious in itself, but feeds into a larger syndrome of internal breakdowns in a market that remains strenuously overvalued).
After an extended and extreme compression of risk premiums, we’re now observing increasing divergences across a variety of market internals and security types (e.g. breadth, leadership, momentum stocks, small caps, junk bonds).
We’ve come to avoid pointed warnings in this market, because speculative conditions have extended much longer than in other cycles. Indeed, we’ve had a few deteriorations in recent years that reversed fairly quickly as investors shifted back to risk-seeking, particularly after fresh initiatives or assurances about monetary easing (though further initiatives may not be forthcoming in this instance). So we’re open to a favorable shift on these measures, and if that was to occur following a somewhat greater retreat in valuations, it could even open up some amount of constructive opportunity. Meanwhile, despite our view of stocks as severely overvalued, our response is to remain defensive without taking a stance that greatly relies on immediate market weakness.
An awareness of divergence and uniformity is the bread-and-butter of signal extraction – inferring true information signals from the sea of random noise. We take the present breakdown of market internals seriously.
Whatever the crowd wishes to do about it, historically-minded investors should think carefully about whether a strenuously overvalued market with deteriorating market internals is a desirable environment for risk taking. For our part, the answer is a resounding “No.”
via Zero Hedge http://ift.tt/1qJkyrY Tyler Durden
Excerpted from John Hussman’s Weekly Market Comment,
Historically-informed investors are being given a hint of advance warning here, in the form of a strenuously overvalued market that now demonstrates a clear breakdown in internals. We observe these breakdowns in the form of surging credit spreads (junk bond yields versus Treasury yields of similar maturity), weakness in small capitalization stocks, and other measures.
These divergences have actually been building for months, but rather quietly. Note, for example, that as the S&P 500 pushed to new highs in recent weeks, cumulative advances less declines among NYSE stocks failed to confirm those highs, while junk bond prices were already deteriorating.
We don’t take any single divergence as serious in itself, but the accumulation of divergences in recent weeks should not be ignored. Notably, the majority of NYSE stocks are now below their respective 200-day moving averages (which again, isn’t serious in itself, but feeds into a larger syndrome of internal breakdowns in a market that remains strenuously overvalued).
After an extended and extreme compression of risk premiums, we’re now observing increasing divergences across a variety of market internals and security types (e.g. breadth, leadership, momentum stocks, small caps, junk bonds).
We’ve come to avoid pointed warnings in this market, because speculative conditions have extended much longer than in other cycles. Indeed, we’ve had a few deteriorations in recent years that reversed fairly quickly as investors shifted back to risk-seeking, particularly after fresh initiatives or assurances about monetary easing (though further initiatives may not be forthcoming in this instance). So we’re open to a favorable shift on these measures, and if that was to occur following a somewhat greater retreat in valuations, it could even open up some amount of constructive opportunity. Meanwhile, despite our view of stocks as severely overvalued, our response is to remain defensive without taking a stance that greatly relies on immediate market weakness.
An awareness of divergence and uniformity is the bread-and-butter of signal extraction – inferring true information signals from the sea of random noise. We take the present breakdown of market internals seriously.
Whatever the crowd wishes to do about it, historically-minded investors should think carefully about whether a strenuously overvalued market with deteriorating market internals is a desirable environment for risk taking. For our part, the answer is a resounding “No.”
via Zero Hedge http://ift.tt/1qJkyrY Tyler Durden