A Growing Crisis of Trust is eroding Confidence and fostering slowing Capital Investment.
Though on the surface, Global Risk has decreased by traditional measures such as Credit Default
Swap rates, LIBOR-OIS, Ted Spread etc., there are many divergences that are historically major
indicators of serious problems ahead. The unprecedented moves by the central banks of the US, EU,
Japan (and indications by the UK) to establish a policy of 'unlimited' monetary expansion have
distorted many traditional macro analytics. Markets as a consequence are mispricing risk. Earnings
for Q4 2012 are presently coming in below expectations, top line revenue growth is under pressure,
and the Global Consumer Confidence indicators as reported by Nielsen are falling precipitously.
There appears to be an abrupt re-alignment of risk sentiment looming before the Ides of March.
1/26/2013
CRISIS OF TRUST
A Growing Crisis of Trust is Eroding Confidence and Fostering Slowing Capital Investment
GLOBAL MACRO TIPPING POINTS - FEBRUARY 2013
TIPPING POINTS ........................................................................................................................ 9
GLOBAL MACRO: RISK ASSESSMENT ...................................................................................................................................................... 9
SITUATIONAL ANALYSIS ...................................................................................................................................................... 9
POSITIONAL FRAMEWORK: "WE ARE HERE!" ......................................................................................................................................................... 9
Q1 2013 DEVELOPMENTS TO WATCH ..................................................................................................................................................................... 10
GLOBAL TRENDS - NATIONAL INTELLIGENCE COUNCIL ................................................................................................................................... 19
A BROKEN PONZI SCHEME - BOSTON CONSULTING GROUP .......................................................................................................................... 21
RISK CONTINUUM ......................................................................................................................................................................................................... 23
UK ....................................................................................................................................................................................... 302
QE Extension Coming .................................................................................................................................................................................................. 302
JAPAN: AUTO EXPORTS TO CHINA PLUMMET 44.5%. JAPAN'S LARGEST EXPORT MARKET ................................... 337
Exports Continue To Tumble ....................................................................................................................................................................................... 339
Intervention Fails Again - It's a Whole new Ball Game ............................................................................................................................................. 340
Japan in Negative PMI and GDP Territory ................................................................................................................................................................. 342
POLICY: Failure to Recognize & Alter Policy When it is Clearly Not Working ...................................................................... 470
Stimulus Hasn't Worked. It is Camouflaging Something Deeper ..................................................................................................................... 475
POLICY: A Capitalist System No Longer Realistically Operate When the State Borrows at a Negative Cost ....................... 477
MONETARY POLICY - ELECTILE DYSFUNCTIONAL .................................................................................................................................... 480
HIGHLIGHTS ...................................................................................................................................................................... 480
QE III POST MORTEM - BROKEN FED MODEL ................................................................................................................ 482
POST MORTEM: Market Reacts Badly...................................................................................................................................................................... 482
POST MORTEM: Currency War Salvos & The $67T Shadow Banking Currency Cartel ..................................................................................... 484
POST MORTEM: Fed's Broken Model ....................................................................................................................................................................... 493
POST MORTEM: QEfinity Working Psychologically the same as 1987 Pre-Crash Portfolio Insurance ............................................................ 495
PERSPECTIVES................................................................................................................................................................. 530
PERSPECTIVE: One Non-Mainstream Analyst's Views .......................................................................................................................................... 530
PERSPECTIVE: One Mainstream Analyst's Views .................................................................................................................................................. 533
PERSPECTIVE: A Collection of Wall Street Views................................................................................................................................................... 538
PERSPECTIVE: Barron's Weigh In ............................................................................................................................................................................ 540
PERSPECTIVE: Goldman's Fiscal Cliff Scenarios ................................................................................................................................................... 543
Plan
Release
Date
III.
Monday following
3rd Saturday
of the Month
IV.
II.
Day Following
Monthly Labor
Report
(~ 1st Saturday)
Service
Coverage
Tipping Points
Tipping Points
Abstraction
Global Macro
Abstraction
US Economy
Technical Analysis
Technical Analysis
Market Analytics
Fundamental Analysis
Market Analytics
Risk Analysis
Synthesis
Commentary
Synthesis
Commentary
Thesis
Conclusions
Focus