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GLOBAL RISK
3/29/2015
GLOBAL GROWTH Global Leading Indicator Goldmans Swirlogram Getting More Serious ......................................................... 541
GLOBAL GROWTH Global Industrial Production Rolling Over ............................................................................................................. 542
GLOBAL GROWTH Consensus 2014 GDP Forecast - Differential ......................................................................................................... 543
GLOBAL GROWTH G10 Macro Change ................................................................................................................................................. 543
RESEARCH OF NOTE .................................................................................................................................................................................... 544
NEW-GLOBAL GROWTH - World's Busiest Freight Route Rates Plunge To 2014 Lows ......................................................................... 544
NEW-GLOBAL GROWTH - Goldman Global Leading Indicator Drastically Revised, Collapses into "Confirmed Slowdown" .................. 545
GLOBAL GROWTH - The Wal-Mart Measure or How the US Consumer Is the Global Engine .......................................................... 547
GLOBAL GROWTH Potential of a Global Recession Mounting ............................................................................................................ 548
GLOBAL GROWTH What the hint of a Fed Taper Did to Global Growth Estimates....................................................................... 552
GLOBAL GROWTH - Uneconomic Energy Problematic ......................................................................................................................... 554
GLOBAL GROWTH - Global Growth Cycle ................................................................................................................................................. 556
GLOBAL GROWTH - Global GDP Contribution .......................................................................................................................................... 557
GLOBAL GROWTH - Slowing Global Growth - Air Cargo Shipments ........................................................................................................ 558
GLOBAL CREDIT .................................................................................................................................................................................................. 559
CREDIT CYCLE - HY Leading the Way ........................................................................................................................................................ 559
CREDIT CYCLE - Reversal Ahead ................................................................................................................................................................ 562
ENERGY - Putin Prepares To Announce "Holy Grail" Gas Deal With China ................................................................................... 746
ENERGY - The Growing Rift with Saudi Arabia Threatens To Severely Damage the Petrodollar ................................................ 748
CHARTS OF NOTE ......................................................................................................................................................................................... 752
NEW-ENERGY Petro$$ Capital Exports Go Negative for First Time in 18 Years ................................................................................... 752
NEW-ENERGY Falling Inflation Adjusted Gasoline Prices ...................................................................................................................... 753
NEW-ENERGY US v Saudi Oil Production now Equal at near 12B bl/Day ............................................................................................. 754
NEW-ENERGY US Shale Oil Breakeven Prices ...................................................................................................................................... 755
NEW-ENERGY OPEC Announcement Crushes Ruble & WTI Crude ..................................................................................................... 755
NEW-ENERGY USDRUB Rise Means Russian Loans in US$ In Big Trouble- Investment Collapse ..................................................... 756
NEW-ENERGY EM Oil Producers Being Crushed ................................................................................................................................... 756
NEW-ENERGY Market Cap Impacts of OPEC Decision ......................................................................................................................... 757
NEW-ENERGY Oil Supply / Demand and Price....................................................................................................................................... 758
GOLD WARS Failing Developed Economies versus Rising Emerging Economies .................................................................................. 759
NEW-RESEARCH WE FOLLOWED ............................................................................................................................................................... 759
CHARTS OF NOTE ......................................................................................................................................................................................... 760
NEW-GOLD WARS Plummeting Gold Holdings at NY Fed from Foreign Repatriation........................................................................... 760
NEW-GOLD WARS Gold : Debt Ratio Correlation Something Seriously Amiss! ................................................................................. 760
NEW-GOLD WARS Nominal & Real Price of Gold 1790-2013 ............................................................................................................. 762
NEW-GOLD WARS Gold v S&P 500 Against True Austrian Money Supply ........................................................................................... 762
NEW-GOLD WARS Swiss National Bank Gold, FX & Total Assets ........................................................................................................ 763
NEW-GOLD WARS Sovereign Gold Holdings According to the World Gold Council ............................................................................. 763
NEW-GOLD WARS European Countries Gold Reserves Repatriation ................................................................................................... 764
RESEARCH OF NOTE .................................................................................................................................................................................... 766
NEW-GOLD WARS - Federal Reserve Confirms Biggest Foreign Gold Withdrawal in Over Ten Years ................................................... 766
NEW-GOLD WARS - European Nations Repatriate Gold Reserves from United States Vaults ................................................................ 767
NEW-GOLD WARS - Gold Shortage, Worst in 21st Century, And India Just Made It Worse .................................................................... 770
NEW-GOLD WARS - Deutsche Bank's Modest Proposal To Central Banks: "Purchase The Gold Held By Private Households" ........... 772
CHINAs CREDIT GROWTH Reverses Direction ............................................................................................................................................ 774
NEW-RESEARCH WE FOLLOWED ............................................................................................................................................................... 774
CHARTS OF NOTE ......................................................................................................................................................................................... 775
NEW-CHINA LIQUIDITY Chinese Bank Asset Growth Dwarfs Developed Economies Central Banks .................................................. 775
NEW-CHINA LIQUIDITY Chinas Official GDP Growth Rate Continues to Fall ...................................................................................... 776
NEW-CHINA LIQUIDITY Chinas Deleveraging ....................................................................................................................................... 776
NEW-CHINA LIQUIDITY Chinas Inflation Rate versus Real Interest Rate ............................................................................................. 777
NEW-CHINA LIQUIDITY Bank Loan Growth ........................................................................................................................................... 777
NEW-CHINA LIQUIDITY Policy Rate, RRR and Loan Growth ................................................................................................................ 778
NEW-CHINA LIQUIDITY Declining Private Sector Fixed Asset Investment ............................................................................................ 778
CHINA LIQUIDITY - Third of Chinese GDP Now Goes to Repay Interest and Principle on Existing Loans .............................................. 779
CHINA LIQUIDITY Infrastructure Investment Offsets Weak Real Estate ................................................................................................ 780
CHINA LIQUIDITY Shadow Banks Step Back Into Light ......................................................................................................................... 780
CHINA LIQUIDITY Hopes that Credit Growth Will Spur Property Sales .................................................................................................. 781
CHINA LIQUIDITY Transport, Construction Data Point to Slower Growth .............................................................................................. 781
CHINA LIQUIDITY Little Impetus for Turnaround in Investor Sentiment ................................................................................................. 782
CHINA LIQUIDITY Industrial Output & Exports Continue to Trend the Wrong Way ............................................................................... 783
CHINA LIQUIDITY GDP Growth Trend .................................................................................................................................................... 783
RESEARCH OF NOTE .................................................................................................................................................................................... 785
NEW-CHINA LIQUIDITY - Reverses Direction and Begins Easing ............................................................................................................ 785
NEW-CHINA LIQUIDITY - One Rate Cut Probably Not Sufficient to Sustain China's Growth ................................................................... 786
NEW-CHINA LIQUIDITY - Troubling Signs of Deflation in China ............................................................................................................... 787
NEW-CHINA LIQUIDITY - The Next Phase of Chinas Financial Deepening ............................................................................................. 788
NEW-CHINA LIQUIDITY - Steady decline in private sector activity ............................................................................................................ 789
CHINA LIQUIDITY - China Credit Risk Overshadows Outlook for Emerging Equities ............................................................................... 790
CHINA LIQUIDITY - Easy Money Wont Solve Chinas Hard Problems ................................................................................................ 793
CHINA LIQUIDITY - Housing Bubble Restricting PBOC Actions .......................................................................................................... 795
CHINA LIQUIDITY - PBOC Squeezing Banks towards Reducing Speculative Risk ............................................................................ 798
CHINA LIQUIDITY - Overnight Repo at 25% ............................................................................................................................................ 799
CHINA LIQUIDITY - Red Flags ................................................................................................................................................................... 800
CHINA LIQUIDITY - Credit Fueled Growth ............................................................................................................................................... 802
CHINA LIQUIDITY - Shadow Banking System Showing Signs of Implosion ....................................................................................... 807
CHINA LIQUIDITY - PBOC Wants to Hold the Line on Explosive Credit Expansion through A Liquidity Squeeze ........................ 810
CHINA LIQUIDITY - Potentially De-Stabilizing Cash Crunch ................................................................................................................. 812
CHINA LIQUIDITY - Chinese Liquidity Pump Unplugged ...................................................................................................................... 813
PRIOR REPORT MINOR UPDATES & EDITIONS ........................................................................................................................................... 815
US$ RESERVE STATUS & ERODING INFLUENCE............................................................................................................................................ 815
NEW-RESEARCH WE FOLLOWED ............................................................................................................................................................... 815
RESEARCH OF NOTE .................................................................................................................................................................................... 816
RESERVE CURRENCY - The World Is Beginning To Bypass America's Financial & Legally-Leveraged Political Power ....................... 816
RESERVE CURRENCY - Putin Adviser Proposes "Anti-Dollar Alliance ................................................................................................... 817
RESERVE CURRENCY - Chinese, Swiss Central Banks Sign Bilateral Swap Agreement ....................................................................... 818
RESERVE CURRENCY - France, Brazil, India & Now South Korea Join Russia & China In Post-Dollar World Order ............................ 819
RESERVE CURRENCY - Frances Noyer Says BNP May Prompt Shift Away From Dollar ...................................................................... 821
RESERVE CURRENCY - More Russian Companies Set To Drop Dollar, Switch To Chinese Yuan ........................................................ 822
RESERVE CURRENCY - Russia, China sign deal to bypass U.S. dollar .................................................................................................. 823
RESERVE CURRENCY - Japan May Eclipse China Again, as Largest Holder of US Treasuries ...................................................... 824
SECURITY SURVEILLANCE COMPLEX - Growing Without Public Control or Supervision! ................................................................. 917
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PROGNOSIS: Monetary Malpractice - ECB's LTRO Not a Solution but ................................................................................................... 1011
PROGNOSIS: Monetary Malpractice - ECB's SMP Effort Futile ............................................................................................................... 1015
PROGNOSIS: Monetary Malpractice - ECB Accepts BBB Collateral ....................................................................................................... 1018
PROGNOSIS: EU Banking Overbanked, Undercapitalized and Now Insolvent ....................................................................................... 1019
PROGNOSIS: Monetary Malpractice - TARGET2 "Contingent Liabilities" ........................................................................................ 1020
PROGNOSIS: Bailouts - Unsustainable & Unfundable ............................................................................................................................. 1027
ITALY FALLS BACK INTO A TRIPLE-DIP RECESSION ................................................................................................................................. 1029
CHARTS OF NOTE ....................................................................................................................................................................................... 1029
NEW--CHARTS - ITALY 30 Year Bond Yield At 2.3% - Historic Low .................................................................................................... 1029
NEW--CHARTS - ITALY Italian Unemployment ..................................................................................................................................... 1030
NEW--CHARTS - ITALY Italian Core Inflation ........................................................................................................................................ 1030
NEW--CHARTS - ITALY Italian Industrial Porduction ............................................................................................................................ 1031
CHARTS - ITALY Meal Affordability Deteriorates .................................................................................................................................. 1032
CHARTS - ITALY Falling Oil & Gas Consumption ................................................................................................................................. 1033
CHARTS - ITALY Italian Bond Yields ..................................................................................................................................................... 1033
CHARTS - ITALY Slips Back Into Recession ......................................................................................................................................... 1034
CHARTS - ITALY 10 Year Bond Yields Fall to Record Low .................................................................................................................. 1035
CHARTS - ITALY - Forced Rate Cuts ....................................................................................................................................................... 1036
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1037
RESEARCH OF NOTE .................................................................................................................................................................................. 1037
NEW--RESEARCH Italy Falls Back Into Recession, Raising Concerns for Eurozone .......................................................................... 1037
RESEARCH - Italys Downward Spiral ...................................................................................................................................................... 1040
RESEARCH - Italys Budget Failures, Weak Growth Outlook Call Debt Sustainability Into Question ..................................................... 1042
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1046
ITALIAN ELECTION - What You Need to Know ....................................................................................................................................... 1046
ITALIAN ELECTION - Europe Capitulates On Austerity- Never Had The Stomach For It ................................................................. 1047
ITALIAN ELECTION - Message Given By the People ............................................................................................................................ 1049
ITALIAN ELECTION - Bad Debt Continue to Soar .................................................................................................................................... 1053
ITALIAN ELECTION - Italians React Badly to Austerity, Elections Hardly a Surprise!........................................................................... 1056
ITALIAN ELECTION - EUROPEAN FEEDBACK - #1 ............................................................................................................................. 1056
ITALIAN ELECTION - EUROPEAN FEEDBACK - #2 ............................................................................................................................. 1058
ITALIAN ELECTION - Regional Financial Cracks in Sicily .................................................................................................................. 1062
FRANCE ECONOMIC MALAISE SPARKING POTENTIAL POLITICAL CRISIS ............................................................................................ 1064
CHARTS OF NOTE ....................................................................................................................................................................................... 1064
NEW--CHARTS FRANCE Bankruptcies Soar as Profitability Slumps ................................................................................................ 1064
NEW--CHARTS FRANCE Post Hollande Election Results Jobseekers and 10 Year Yield ............................................................ 1064
NEW--CHARTS FRANCE French Job Seekers .................................................................................................................................. 1065
NEW--CHARTS FRANCE Inflation Expectations ................................................................................................................................ 1065
CHARTS - FRANCE Hollande Popularity Gap Heading for a Record Low ........................................................................................... 1067
CHARTS - FRANCE Austerity Doesnt Get You Re-Elected ................................................................................................................. 1067
CHARTS - FRANCE Worlds Worst PMI Ranking in June ..................................................................................................................... 1068
CHARTS - FRANCE Near-record high bankruptcies and record-low profitability .................................................................................. 1069
CHARTS - FRANCE Frances PMI Trend Weakness Beginning to Stand Out...................................................................................... 1069
CHARTS - FRANCE Manufacturing Divergence With Germany Widens .............................................................................................. 1070
CHARTS - FRANCE - GDP ....................................................................................................................................................................... 1071
CHARTS - FRANCE - UNEMPLOYMENT ................................................................................................................................................ 1072
CHARTS - FRANCE - BUDGET DEFICIT ................................................................................................................................................. 1073
CHARTS - FRANCE - TAX v GDP ............................................................................................................................................................ 1074
CHARTS - FRANCE - BUSINESS CONFIDENCE.................................................................................................................................... 1075
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1076
RESEARCH OF NOTE .................................................................................................................................................................................. 1076
NEW--RESEARCH Economic Malaise Sparks Political Crisis in France .............................................................................................. 1076
RESEARCH - France In "Political Turmoil" After Hollande Unexpectedly Dissolves Government .......................................................... 1078
RESEARCH Prime Minister Manuel Vall Resigns .................................................................................................................................. 1080
RESEARCH - European Voters Are Revolting; France Warns "Situation Is Grave for France, Europe" ................................................. 1080
RESEARCH - Steady Breakdown Underway ......................................................................................................................................... 1083
RESEARCH - France Loses its Coveted and NEEDED AAA Rating ................................................................................................... 1087
SITUATIONAL ASSESSMENT ..................................................................................................................................................................... 1089
FRANCE - What You Need to Know ......................................................................................................................................................... 1089
FRANCE - Key Indicators .......................................................................................................................................................................... 1090
FRANCE: Sharpest Drop in Private Sector Output in Four Years ............................................................................................................ 1093
FRANCE - Quits on Austerity - Never a Doubt This Would Happen...................................................................................................... 1096
FRANCE - Socialism is Expensive ......................................................................................................................................................... 1097
FRANCE - Has Turned back to Socialism ................................................................................................................................................. 1099
FRANCE - Losing Its Way through Political Illusions and Lies ................................................................................................................. 1100
FRANCE - Uncompetitive .......................................................................................................................................................................... 1101
FRANCE - Titan Tire Calls Out French Labor ........................................................................................................................................... 1103
FRANCE - France Responds to Titan Tire ................................................................................................................................................ 1105
FRANCE - What Happens In France When Companies Fire People ....................................................................................................... 1107
FRANCE - Hollande's Economically Insane campaign Promise ............................................................................................................... 1108
GERMANY GERMANY IN RECESSION.......................................................................................................................................................... 1110
CHARTS OF NOTE ....................................................................................................................................................................................... 1110
NEW--CHARTS - GERMANY - 1.179% 30 Year Bond Yield ................................................................................................................... 1110
NEW--CHARTS - GERMANY 2 Year Sovereign Yield Goes Negative ................................................................................................. 1111
NEW--CHARTS - GERMANY 10 Year Sovereign Bund versus US10 Treasury ................................................................................... 1111
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NEW--CHARTS - GERMANY German & Japanese Yield Curves Are Remarkably Close ................................................................... 1112
NEW--CHARTS - GERMANY 10 Y European Yields ............................................................................................................................. 1113
NEW--CHARTS - GERMANY German Unemployment ......................................................................................................................... 1114
NEW--CHARTS - GERMANY German Core Inflation ............................................................................................................................ 1114
NEW--CHARTS - GERMANY 10 Year Sovereign Bund versus US10 Treasury ................................................................................... 1114
CHARTS - GERMANY Expectations Component Peaked In January ................................................................................................... 1115
CHARTS - GERMANY Ifo Rolls-Over..................................................................................................................................................... 1115
CHARTS - GERMANY 10 Year Bund Below 1% ................................................................................................................................... 1116
CHARTS - GERMANY - Inflation ............................................................................................................................................................... 1116
CHARTS - GERMANY - IFO Investor Confidence .................................................................................................................................... 1117
CHARTS - GERMANY - ZEW Expectations .............................................................................................................................................. 1118
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1120
RESEARCH OF NOTE .................................................................................................................................................................................. 1120
NEW--RESEARCH - Five charts that show Germany is heading into recession 10-19-14 The Guardian ............................................... 1120
RESEARCH - Draghi signaled additional monetary easing is likely to materialize - Possibly by September .......................................... 1123
RESEARCH - Germany close to recession as ECB admits recovery is weak.......................................................................................... 1125
RESEARCH - Merkel's Third Chancellorship Challenges .................................................................................................................... 1126
RESEARCH - German Election - Merkel Begins Hunt for Coalition Partners........................................................................................... 1130
RESEARCH - Europe's Shadow Economy: As Big As Germany.............................................................................................................. 1131
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1135
GERMANY - Anti Euro AfD Party May Cost Merkel in Critical September Election ......................................................................... 1136
GERMANY - The Euro Crisis Escalation over Cyprus May Politically Cripple Merkel ..................................................................... 1137
GERMANY - Call for End of "Coercive Euro Association" ........................................................................................................................ 1139
UK EXPECT RATE INCREASE BY SPRING 2015.......................................................................................................................................... 1141
CHARTS OF NOTE ....................................................................................................................................................................................... 1141
NEW--CHARTS - UK - Deficit One of Worst of Developed Economies .................................................................................................... 1141
NEW--CHARTS - UK Private Sector Surplus Eliminated ....................................................................................................................... 1141
CHARTS - UK Self-Employment At Record High ...................................................................................................................................... 1142
CHARTS - UK Rate Voting Shows Preference for Inflation Report Months ............................................................................................. 1143
CHARTS - UK Below 2% Target But 2nd Highest in EU ......................................................................................................................... 1143
CHARTS - UK CPI Below Target for 7th Month ...................................................................................................................................... 1144
CHARTS - UK Real-Wage Decline Longest Since At Least 1964 ......................................................................................................... 1145
CHARTS - UK Wage-Neutral Unemployment Rate Falling .................................................................................................................... 1145
CHARTS - UK CPI Too Low for BOE and Falling .................................................................................................................................. 1146
CHARTS - UK GDP ................................................................................................................................................................................ 1147
CHARTS - UK Population Growth .......................................................................................................................................................... 1147
CHARTS - UK - Crushed Disposable Income ........................................................................................................................................... 1148
CHARTS - UK - BOE Balance Sheet Growth ............................................................................................................................................ 1149
CHARTS - UK - Lending ............................................................................................................................................................................ 1150
CHARTS - UK - Unemployment ................................................................................................................................................................ 1150
CHARTS - UK - GDP - Pre and Post Recession Levels ........................................................................................................................... 1151
CHARTS - UK - GDP ................................................................................................................................................................................. 1151
CHARTS - UK - BOE Rates ....................................................................................................................................................................... 1152
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1153
RESEARCH OF NOTE .................................................................................................................................................................................. 1153
NEW--RESEARCH Consensus See UK Rate Increase in February 2015 Possibility of November .................................................. 1153
RESEARCH BOE Faces Labor Market Conundrum as Wage Growth Stalls ........................................................................................ 1155
RESEARCH - UK workers' wage squeeze is longest since the 1870s ..................................................................................................... 1158
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1159
UK - What you need to Know..................................................................................................................................................................... 1159
UK - Joins Currency War - Down 8% YTD ............................................................................................................................................. 1160
UK - Specter of Stagflation Haunts UK ...................................................................................................................................................... 1161
UK - Public Policy turns Against Austerity and PM Cameron ............................................................................................................ 1162
UK - Doomsday Debt Machine .................................................................................................................................................................. 1163
UK - QE Extension Coming ....................................................................................................................................................................... 1166
UK - Small Business Credit Squeeze Now Acute - Loan Rejections Rising ..................................................................................... 1168
UK - Technically in a Depression ........................................................................................................................................................... 1169
IBERIAN PENINSULA LOW RATES MASK SERIOUS PERCULATING PROBLEMS ................................................................................... 1172
CHARTS OF NOTE ............................................................................................................................................................................................. 1172
NEW--CHARTS - SPAIN 30 Year Bond Yield At 2.5% - Historic Low ........................................................................................................ 1172
NEW--CHARTS - SPAIN 10 Year Bond Yield At 2.37% - Historic Low .................................................................................................. 1172
CHARTS - PORTUGAL Yields Hit Low After BES Bailout ..................................................................................................................... 1173
CHARTS - PORTUGAL - Deficit Problem ................................................................................................................................................. 1174
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1175
RESEARCH OF NOTE .................................................................................................................................................................................. 1175
RESEARCH - Presidential Warning Spikes Yields To 8 Months Highs .............................................................................................. 1175
RESEARCH - Clear Signs of Desperation In Spain from a Growing Collateral Contagion.............................................................. 1177
RESEARCH - The Spanish Government's 'Bad Bank' Scam .............................................................................................................. 1178
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1180
IBERIA - Credit Downgrades - At Precipice of "Non Investment Grade" .................................................................................................. 1180
IBERIA - Regional Bailout Bailouts a Massive Problem ...................................................................................................................... 1181
IBERIA - NPL Going Ballistic .................................................................................................................................................................. 1182
IBERIA - Spanish Funding Problem ....................................................................................................................................................... 1183
IBERIA - The Giant Spanish Housing Bubble, Now Beginning to Implode ............................................................................................... 1188
IBERIA - Mal-Investment Coming Home to Roost..................................................................................................................................... 1190
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IBERIA - Bank Deposits Were Leaving, Now they Are Fleeing ................................................................................................................ 1191
IBERIA - Now a Capital Investment Problem ............................................................................................................................................ 1192
IBERIA - Banks on Artificial "Ponzi Bond" Life Support ............................................................................................................................ 1193
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CHINA - Skilled Labor Shortages & Losing Labor Cost Advantage ................................................................................................... 1301
CHINA - Launches Crackdown On "Off Balance Sheet" Credit .......................................................................................................... 1306
CHINA - China's Stunning $15 Trillion in New Liquidity - Part II......................................................................................................... 1309
CHINA - China's Stunning $15 Trillion In New Liquidity ...................................................................................................................... 1312
RESEARCH OF NOTE PREVIOUS REPORT (Reference) ...................................................................................................................... 1316
RESEARCH - China's Stunning $15 Trillion in New Liquidity ............................................................................................................. 1316
RESEARCH - Dr. Copper Ready to Top and Head Lower .................................................................................................................... 1319
RESEARCH - China's $1 Trillion GDP Lie .............................................................................................................................................. 1320
RESEARCH - What the Deceleration Could Portend ............................................................................................................................ 1322
RESEARCH - Credit Bubble: 240% Of GDP And Soaring .................................................................................................................... 1325
RESEARCH - Forget Taper risk: China is a bigger threat ....................................................................................................................... 1329
RESEARCH - Sustainability Requires a Slowdown in Investment ............................................................................................................ 1331
RESEARCH - China Likely to Continue Interest Rate Liberalization ........................................................................................................ 1333
RESEARCH - China #1 in Broad Array of Key Areas ............................................................................................................................... 1336
RESEARCH - Global Business Confidence Sliding Rapidly ............................................................................................................... 1337
RESEARCH - Investors Worried and Losing Confidence .................................................................................................................... 1340
RESEARCH - China Stampeding into Gold ........................................................................................................................................... 1341
RESEARCH - China "Will introduce some measures to arrest the slowdown of growth in the next couple of quarters" ........... 1343
RESEARCH - Slower Growth In the Cards & Endorsed by New Chinese Leadership ..................................................................... 1344
RESEARCH - Is a PBOC Controlled Speculation Bust Possible or Will It Get Out of Control ........................................................ 1346
RESEARCH - PBOC Liquidity Squeeze ................................................................................................................................................. 1347
RESEARCH - Chinese Housing Bubble Restricting PBOC Actions .................................................................................................... 1349
RESEARCH - PBOC Squeezing Banks towards Reducing Speculative Risk .................................................................................... 1351
RESEARCH - Chinese Overnight Repo at 25% ...................................................................................................................................... 1353
RESEARCH - Red Flags ........................................................................................................................................................................... 1354
RESEARCH - Credit Fueled Growth in China ....................................................................................................................................... 1356
RESEARCH - PBOC Wants to Hold the Line on Explosive Credit Expansion through A Liquidity Squeeze ................................ 1361
RESEARCH - A Potentially De-Stabilizing Cash Crunch ..................................................................................................................... 1363
SITUATIONAL ANALYSIS & KEY NOTES ................................................................................................................................................... 1364
CHINA SHADOW BANKING - Shadow Banking System Showing Signs of Implosion ..................................................................... 1366
CHINA SHADOW BANKING - Shadow Banking and Credit Growth .................................................................................................... 1369
CHINA SHADOW BANKING - The US Sub-Prime / CDO All Over Again ............................................................................................. 1372
CHINA SHADOW BANKING - Report ....................................................................................................................................................... 1376
CHINA SHADOW BANKING - Situation ................................................................................................................................................. 1377
CHINA RESERVES - Distorted Foreign Reserve Levels ...................................................................................................................... 1378
CHINA RESERVES - Declining Reserve Accumulation ............................................................................................................................ 1380
CHINA RESERVES - Has Caught the Gold Bug big time! .................................................................................................................... 1382
CHINA CURRENCY WARS - Hot Money into China .............................................................................................................................. 1384
CHINA - Withdraws Liquidity .................................................................................................................................................................. 1385
CHINA - Socit General Sees a Likely Soft Landing! ......................................................................................................................... 1387
CHINA - True Debt is Orders of Magnitude More than Officially Being Reported ............................................................................ 1397
CHINA - Evidence OF Slowing Now Indisputable ................................................................................................................................ 1400
CHINA - PMI Improvement....................................................................................................................................................................... 1401
CHINA - Political Transition & Ongoing Emergence as a Super Power ............................................................................................ 1404
CHINA - An Implicit Social Contract .......................................................................................................................................................... 1406
CHINA - Manipulated Statistics due to Upcoming Decade Long Regime Change ........................................................................... 1408
CHINA - Increasing Leverage is China's Way of Monetary Easing .................................................................................................... 1409
CHINA - Possible Interest-Rate Liberalization........................................................................................................................................... 1410
CHINA - Global Impact of China's Slowdown ....................................................................................................................................... 1411
CHINA - Shanghai Composite at 2008 Low Levels .............................................................................................................................. 1413
CHINA - Shanghai Composite Warnings Signs .................................................................................................................................... 1414
CHINA - Credit to GDP ............................................................................................................................................................................. 1416
CHINA - A Slow Recovery Through 2013 ................................................................................................................................................. 1417
CHINA - Manufacturing PMI in Contraction Territory .......................................................................................................................... 1419
JAPAN: JAPAN GOES ALL IN ............................................................................................................................................................................ 1424
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1425
CHARTS OF NOTE ....................................................................................................................................................................................... 1431
NEW--CHARTS - JAPAN 1.174% 30 Year Bond Yield ......................................................................................................................... 1431
NEW--CHARTS - JAPAN 2 Year Yield Goes Negative.......................................................................................................................... 1431
NEW--CHARTS - JAPAN Savings Rate Goes Negative ........................................................................................................................ 1432
NEW--CHARTS - JAPAN Stagnate Housing Starts with Historic Low 35 Year Mortgages ................................................................... 1432
NEW--CHARTS - JAPAN Non-Resident Net Investment in Japanese Stocks ...................................................................................... 1433
NEW--CHARTS - JAPAN Shifting Demographics - Birth versus Deaths ............................................................................................... 1433
NEW--CHARTS JAPAN Nikkei Strength is all Relative .................................................................................................................... 1434
NEW--CHARTS - JAPAN Trade Balance ............................................................................................................................................... 1434
NEW--CHARTS - JAPAN 10 Year Treasury Approaching Zero (12-27-14) .......................................................................................... 1435
NEW--CHARTS - JAPAN BOJ Reserve Balances ................................................................................................................................. 1436
NEW--CHARTS - JAPAN Macro Crisis Zones ....................................................................................................................................... 1437
NEW--CHARTS - JAPAN Demographics ............................................................................................................................................... 1437
NEW--CHARTS - JAPAN Fiscal Deficit versus BOJ Balance Sheet ..................................................................................................... 1438
NEW--CHARTS - JAPAN Japans Economy versus the Rest of the World ........................................................................................... 1438
NEW--CHARTS - JAPAN Japans Decline in Real Interest Rates ......................................................................................................... 1439
NEW--CHARTS - JAPAN Japanese GDP Annualized Q-o-Q ................................................................................................................ 1440
NEW--CHARTS - JAPAN Bankruptcies Due to Depreciating Yen ......................................................................................................... 1441
NEW--CHARTS - JAPAN Japanese & German Yield Curves Are Remarkably Close ........................................................................... 1441
CHARTS Q2 GDP Downturn Even Worse Than Though or Looks........................................................................................................ 1443
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US PUBLIC POLICY STATE OF THE UNION DIRECTION & PRIORITES .......................................................................... 1972
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1973
NEW-LATEST ............................................................................................................................................................................................ 1973
BEGINNINGS OF SOCIAL UNREST & THE MILITARIZATION OF POLICE .......................................................................................... 1973
CORPORATE INVERSIONS ..................................................................................................................................................................... 1974
FERGUSON ............................................................................................................................................................................................... 1974
MILITARIZATION OF POLICE .................................................................................................................................................................. 1975
POLLS ........................................................................................................................................................................................................ 1976
INCARCERATION ..................................................................................................................................................................................... 1976
FLAWED TAX POLICY .............................................................................................................................................................................. 1977
MINIMUM WAGE ....................................................................................................................................................................................... 1977
SOCIAL CANCERS ................................................................................................................................................................................... 1977
CORRUPTION & MALFEASANTS ............................................................................................................................................................ 1977
INEQUALITY .............................................................................................................................................................................................. 1977
CREEPING SOCIALISM ............................................................................................................................................................................ 1977
POLICIAL PARALYSIS .............................................................................................................................................................................. 1978
STATE OF THE UNION ............................................................................................................................................................................. 1978
NSA-SECURITY-SURVEILLANCE COMPLEX......................................................................................................................................... 1978
OBAMACARE ............................................................................................................................................................................................ 1979
GENERAL PUBLIC POLICY...................................................................................................................................................................... 1981
STATE OF THE UNION - Direction & Priorities ............................................................................................................................................ 1982
NEW-STATE OF THE UNION Remarks by the President in State of the Union Address January 20th, 2015 .................................. 1982
NEW-STATE OF THE UNION Free College Wasn't Just a Give Away It Was A Trial Balloon .......................................................... 1992
CHARTS & TABLES OF NOTE ..................................................................................................................................................................... 1995
NEW-CHARTS The Cost of Healthcare By Country Spending Per Person........................................................................................ 1995
NEW-CHARTS The Bankrupt US Healthcare System......................................................................................................................... 1995
NEW-CHARTS Rise in Number of Homeless Children .......................................................................................................................... 1996
NEW-CHARTS One-Third of All Homeless Live in These 10 Cities ...................................................................................................... 1997
NEW-CHARTS Trends in American Public Schooling Since 1970 ........................................................................................................ 1998
NEW-CHARTS Size of US Army Since 1946 ......................................................................................................................................... 1998
CHARTS Lack of Trust in Government to Handle International & Domestic Problems ......................................................................... 1999
CHARTS Changing Presidential Stance ................................................................................................................................................ 2000
CHARTS Public Support to Withdraw from Union .................................................................................................................................. 2000
CHARTS - US Incarceration Rate Out of Control ...................................................................................................................................... 2001
RESEARCH OF NOTE .................................................................................................................................................................................. 2002
NEW-POLICY - A 'Shadow" State of the Union ........................................................................................................................................ 2002
NEW-POLICY - Banks Remove the "Heart" of Dodd-Frank ...................................................................................................................... 2005
NEW-POLICY - Wall Street Moves to Put Taxpayers on the Hook for Derivatives Trades ...................................................................... 2009
NEW-POLICY - The Death Cross of American Business ......................................................................................................................... 2012
20
21
FISCAL POLICY A SHRINKING BUDGET DEFICIT IS NOT ALL GOOD NEWS ................................................................. 2151
RESEARCH WE FOLLOWED ............................................................................................................................................................................. 2151
A SHRINKING BUDGET DEFICIT IS NOT ALL GOOD NEWS ................................................................................................................... 2151
20 U.S. companies that paid 0% in taxes ............................................................................................................................................................ 2151
FISCAL MATTERS ........................................................................................................................................................................................ 2153
CHARTS & TABLES OF NOTE ........................................................................................................................................................................... 2155
NEW-CHARTS US Federal Government Debt to GDP ............................................................................................................................. 2155
NEW-CHARTS Mandatory versus Discretionary Spending ....................................................................................................................... 2155
NEW-CHARTS Drivers of US Debt ............................................................................................................................................................ 2156
NEW-CHARTS State & Local Tax Revenues ............................................................................................................................................ 2157
NEW-CHARTS Total Government Expenditures versus Real GDP .......................................................................................................... 2157
NEW-CHARTS How Banks Use Dividend Arbitrage to Reduce Client Tax ............................................................................................ 2158
NEW-CHARTS US Debt About to Pass $18T and 102% of GDP ............................................................................................................. 2158
NEW-CHARTS 7 Corporate CEOs Paid More Than Corporation Paid Tax .............................................................................................. 2159
NEW-CHARTS
Americas 100 highest-paid CEOs, 29 received more in pay than company federal income taxes ............................ 2160
CHARTS Employed Population of America Tax Exposure ..................................................................................................................... 2163
CHARTS Interest Costs to Dwarf Virtually Every Federal Expense .......................................................................................................... 2163
CHARTS Looming Increases in Baby-Boomer Driven Deficits .................................................................................................................. 2163
CHARTS Federal GAAP Based Deficit Growth & Federal Obligations Growth ......................................................................................... 2164
CHARTS US Has the Highest Nominal Corporate Tax Rate in the Industrialized World ....................................................................... 2165
CHARTS US Non-Financial Debt-to-GDP Since 1952 .............................................................................................................................. 2165
CHARTS - US Government Budget Surplus / Deficit .................................................................................................................................... 2166
CHARTS - Government Receipts & Outlay Growth Improves Significantly .................................................................................................. 2166
CHARTS - Federal Budget Surplus / Deficit .................................................................................................................................................. 2166
CHARTS - Real Federal Government Purchases ......................................................................................................................................... 2167
CHARTS - US Trade Balance Improvement ................................................................................................................................................. 2167
CHARTS - Growth & Jobs ............................................................................................................................................................................. 2168
CHARTS - Taxes & Spending ....................................................................................................................................................................... 2172
CHARTS - Politics & Policy ........................................................................................................................................................................... 2175
CHARTS - The Stakes ................................................................................................................................................................................... 2176
CHARTS - Official Fiscal Deficit & Debt ........................................................................................................................................................ 2178
CHARTS - Payroll Tax Holiday ...................................................................................................................................................................... 2179
CHARTS - Tax Rate Comparisons ................................................................................................................................................................ 2180
CHARTS - Risk Perceptions .......................................................................................................................................................................... 2181
CHARTS - 2013 Quarterly Impact ................................................................................................................................................................. 2182
CHARTS - Budget Deficit .............................................................................................................................................................................. 2183
CHARTS - Sovereign Debt ............................................................................................................................................................................ 2185
CHARTS - State & Local Government Drag ................................................................................................................................................. 2186
CHARTS - Government Dependence ........................................................................................................................................................... 2189
CHARTS - Coming Demographic Shock ....................................................................................................................................................... 2189
CHARTS - Fiscal Cliff Outcome .................................................................................................................................................................... 2193
BUDGET - What You Need to Know ................................................................................................................................................................... 2195
BUDGET - Political Budget Cowardice and Capitulation .............................................................................................................................. 2196
BUDGET - Political Budget Cowardice and Capitulation - 2 ......................................................................................................................... 2198
BUDGET - The Ultimate in Political Can-Kicking! ......................................................................................................................................... 2200
BUDGET - The Next Step in the Collapse Of The Dollar .............................................................................................................................. 2203
BUDGET - As Represented and Spun for the Public .................................................................................................................................... 2206
BUDGET - Implications .................................................................................................................................................................................. 2207
BUDGET - A Budget That Institutionalizes Big Government ........................................................................................................................ 2210
BUDGET - The Secrets in The Budget ......................................................................................................................................................... 2214
RESEARCH OF NOTE ........................................................................................................................................................................................ 2217
NEW-RESEARCH Private Pension Fund Levels Fall Behind .................................................................................................................... 2217
NEW-RESEARCH - State & Local Government Crisis ................................................................................................................................. 2221
NEW-RESEARCH - CROMNIBUS - The Real Reason Why It Needed to be Passed ................................................................................. 2227
22
23
NEW-CHARTS Real Median Household Income in the United States .................................................................................................. 2340
NEW-CHARTS Food Stamps Number of Participants ........................................................................................................................ 2340
NEW-CHARTS Food Stamps Number of Participants per Employed ................................................................................................ 2341
NEW-CHARTS Food Stamps Cost Per Participant per Month ........................................................................................................... 2341
NEW-CHARTS Food Stamps Annual Program Cost .......................................................................................................................... 2342
NEW-CHARTS Education, Medical, Food, Housing Costs versus CPI ................................................................................................. 2342
NEW-CHARTS Rising Sub-Prime .......................................................................................................................................................... 2343
NEW-CHARTS Early Delinquencies on US Car Loans Has Been Rising ............................................................................................. 2344
NEW-CHARTS Student Loan Default Rates By Graduating Year ......................................................................................................... 2345
NEW-CHARTS Student Loan Graduating Debt Levels Class 2009 ................................................................................................... 2345
NEW-CHARTS Student Loan Borrowing Trends ................................................................................................................................... 2347
NEW-CHARTS Increasing Government Entitlement Dependency ........................................................................................................ 2347
CHARTS Increasing Government Entitlement Dependency .................................................................................................................. 2348
CHARTS US Household Balance Sheet ................................................................................................................................................ 2348
CHARTS Middle Class Not Sharing In Per Capita GDP ........................................................................................................................ 2349
CHARTS Real Personal Consumption Expenditures ............................................................................................................................. 2350
CHARTS Inflation Adjusted Net Worth for Typical Family Falls 36% in 10 Years ................................................................................. 2351
CHARTS Even Wal-Mart Discounting Cant Keep Up With Government Inflation ................................................................................ 2351
CHARTS Food Stamps Now Part of the American Way of Life ............................................................................................................. 2352
CHARTS Inflation Adjusted Hourly Earnings Remain Weak .................................................................................................................. 2353
CHARTS the Countrys Central Economic Challenge according to EPI ................................................................................................ 2354
CHARTS The New Sub-Prime Boom Auto Loans ............................................................................................................................... 2354
CHARTS Real Median Income Falls as Real Rates Turn Negative....................................................................................................... 2355
CHARTS Disposable Personal Income Per Capita ................................................................................................................................ 2355
CHARTS Real Disposable Income is Now Contracting ......................................................................................................................... 2356
CHARTS This is a Structural .................................................................................................................................................................. 2356
CHARTS Growing Temp Wages Impacting Real Disposable Income in America .............................................................................. 2357
CHARTS Real Disposable Income per Capita ....................................................................................................................................... 2358
CHARTS - Household Incomes a Sign of a Collapsing Middle Class ....................................................................................................... 2358
CHARTS - Food Stamps Now 14% of US Grocery Store Sales ............................................................................................................... 2359
RESEARCH OF NOTE .................................................................................................................................................................................. 2360
NEW-RESEARCH Fed's Household Credit Report Confirms It Is A Student And Car Loan "Recovery".............................................. 2360
RESEARCH How Can a 70% Consumption Have a Recovery When Real DI/Capital Falls ................................................................. 2362
RESEARCH - The Facts are clear. The US Standard of Living is Falling ................................................................................................ 2363
RESEARCH - The Facts are clear. The US Standard of Living is falling .................................................................................................. 2364
RESEARCH - Standards of Living and Artificial Expectations .................................................................................................................. 2366
RESEARCH - A Lack of Demand in US Economy .................................................................................................................................... 2368
RESEARCH - Full Time Jobs or Food Stamps & Disability? .................................................................................................................... 2369
REFERENCE - Prior Posts ............................................................................................................................................................................ 2371
STANDARD OF LIVING - Salary Compression ........................................................................................................................................ 2371
DISPOSABLE INCOME - 66M (20%) Below $28.8/Year Subsistence Level ........................................................................................... 2372
FOOD STAMPS - 46,405,204 Individuals, 22,257,647 Households below Poverty Line ......................................................................... 2373
DISPOSABLE INCOME - Bad Even in Nominal Terms ............................................................................................................................ 2375
INFLATION - It's There but the Government Doesn't Account for it. ........................................................................................................ 2375
US RESIDENTIAL REAL ESTATE ...................................................................................................................................................................... 2377
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 2377
LATEST ..................................................................................................................................................................................................... 2377
CHARTS & TABLES ...................................................................................................................................................................................... 2381
NEW-POLICY San Francisco Y/Y Price Increase Indicator ................................................................................................................... 2381
NEW-POLICY Meaningful Housing Recovery On Hold Until Spring...................................................................................................... 2382
NEW-POLICY Housing Starts ................................................................................................................................................................ 2382
NEW-POLICY Existing & New Home Sales ........................................................................................................................................... 2383
NEW-POLICY Home Ownership Rate versus Rental Rate ................................................................................................................... 2383
NEW-POLICY Mortgages Past Due and Foreclosure Starts .............................................................................................................. 2384
NEW-POLICY Mortgage Spreads .......................................................................................................................................................... 2384
NEW-POLICY Lumber Sales .................................................................................................................................................................. 2385
CHARTS Total Real Estate Sales Activity vs. Mortgage Rates ............................................................................................................. 2387
CHARTS Home Price Slowdown Underlines Weak Demand ................................................................................................................ 2388
CHARTS National Home Price Medians & Indexes ............................................................................................................................... 2389
CHARTS Multi-Family Shift Underway In America ................................................................................................................................. 2389
CHARTS Housing Completions Show Shift to Multi-Family Units ......................................................................................................... 2389
CHARTS New Home Prices ................................................................................................................................................................... 2390
CHARTS Housing Starts and Completions ............................................................................................................................................ 2391
CHARTS DJ Home Construction Index .................................................................................................................................................. 2391
CHARTS Consumer Attitudes About Home Ownership ......................................................................................................................... 2392
CHARTS Trailing 12 Month Average Median US New Home Sale Prices ............................................................................................ 2393
CHARTS US New Home Demand Still Flagging .................................................................................................................................... 2393
CHARTS Housing Completions Single Family Versus Multifamily ..................................................................................................... 2394
CHARTS Troubling Technicals in Housing Starts .................................................................................................................................. 2394
CHARTS NAHB Sentiment versus Mortgage Applications .................................................................................................................... 2395
CHARTS - Serious Housing & Household Spending Headwinds ............................................................................................................. 2395
CHARTS - Double Top in Construction Index ........................................................................................................................................... 2395
CHARTS - The Real Cost of Buying a Home 6.7 X Average Salary......................................................................................................... 2396
CHARTS - Household Formations ............................................................................................................................................................. 2396
CHARTS Falling Originations ................................................................................................................................................................. 2397
CHARTS Falling Credit Scores ............................................................................................................................................................... 2398
24
25
COMMERCIAL REAL ESTATE - Dead Mall Syndrome: The Self-Reinforcing Death Spiral of Retail ..................................................... 2529
COMMERCIAL REAL ESTATE - The First Domino to fall: Retail-CRE (Commercial Real Estate) ......................................................... 2531
COMMERCIAL REAL ESTATE - After Seven Lean Years: US Commercial Real Estate: The Present Position and Future Prospects 2536
COMMERCIAL REAL ESTATE - Retail Sales Cannibalization ................................................................................................................ 2543
COMMERCIAL REAL ESTATE - Tsunami of Retail Store Closings and Downsizings Coming ............................................................... 2544
COMMERCIAL REAL ESTATE - Thanksgiving Retail Sales Results ....................................................................................................... 2547
SITUATIONAL SUMMARY & ANALYSIS ..................................................................................................................................................... 2551
OVERVIEW ................................................................................................................................................................................................ 2551
NATIONAL STATISTICS: COMMERCIAL REAL ESTATE ....................................................................................................................... 2552
26
Plan
Release
Date
III.
Monday following
3rd Saturday
of the Month
IV.
II.
27
Day Following
Monthly Labor
Report
(~ 1st Saturday)
Service
Focus
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
(MMC)