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A FAILING SOCIAL CONTRACT

There is an Unwritten Contract Between the Governing Class


and those being Governed!

GLOBAL MACRO & TIPPING POINTS

GLOBAL MACRO TIPPING POINTS - MAY 2016

4/25/2016

1 MAY 2016 Edition


Copyright 2016 Gordon T. Long All Rights Reserved

Restricted & Confidential


general@GordonTLong.com

A FAILING SOCIAL CONTRACT

There is an Unwritten Contract between the Governing Class


and those being Governed!
GLOBAL MACRO TIPPING POINTS - MAY 2016

GLOBAL RISK ......................................................................................................................................... 32


GLOBAL MACRO: RISK ASSESSMENT .................................................................................................................................. 32
POSITIONAL FRAMEWORK: "WE ARE HERE!".................................................................................................................................................... 32
LIQUIDITY is Neither WEALTH nor COLLATERAL ................................................................................................................................................ 33
Our Assessment ................................................................................................................................................................................................ 33
James Rickards Global Risk Assessment ........................................................................................................................................................ 46
MACRO MONITORING INSTITUTIONS ................................................................................................................................................................. 94
IMF ..................................................................................................................................................................................................................... 98
NEW-IMF Dark economic cloud over IMF-World Bank meeting ................................................................................................................. 98
NEW-IMF World faces 'lost year' as policymakers sleepwalk towards fresh crisis, warns IMF .................................................................. 99
NEW-IMF Beware self-fulfilling prophecy of crashing markets, IMF warns as growth is cut again .......................................................... 103
NEW-IMF IMFS WORLD ECONOMIC OUTLOOK REPORT Too Slow for Too Long ....................................................................... 107
NEW-IMF IMFs GLOBAL FINANCIAL STABILITY REPORT (GFSR) Potent Policies for a Successful Normalization ...................... 109
NEW-IMF IMFs FISCAL MONITOR Acting Now, Acting Together ....................................................................................................... 111
IMF IMF warns of stagnation threat to G7 economies .............................................................................................................................. 112
IMF IMF Fears $3 Trillion Credit Crunch ................................................................................................................................................... 114
IMF Tells Regulators to Brace for Global Liquidity Shock ......................................................................................................................... 116
IMF- Lagarde warns of lopsided global growth .......................................................................................................................................... 121
IMF warns of new threats to global economy due to excessive risk taking ................................................................................................ 122
OECD ............................................................................................................................................................................................................... 124
NEW-OECD "Negative Rates Are Dangerous" OECD Chair Warns "Our Entire System Is Unstable" ................................................... 124
OECD World cannot spend its way out of a slump, warns OECD chief .................................................................................................. 132
OECD OECD Chief Economist: It's Time To "Temper The Frothiness" In Markets ................................................................................ 134
OECD Leading Indicator Casts Doubt on US Economic Rebound .......................................................................................................... 136
OECD Warns 40 Million People Will Be Out of Work Next Year .............................................................................................................. 137
OECD Cuts Global Growth Projections Again ............................................................................................................................................. 139
WORLD BANK ................................................................................................................................................................................................. 140
WB Key Takeaways From the World Bank/IMF Meetings ....................................................................................................................... 140
WB Federal Reserve rate rise would cause panic and turmoil, warns World Bank .................................................................................. 141
WB World Bank - Global Economic Prospects Report .............................................................................................................................. 141
WB Warns Developing Nations Growth Slowing 2.8% Global 2015 Growth ........................................................................................ 142
WB Global Growth Outlook ........................................................................................................................................................................ 145
WB- World Bank warns 100M Unemployed, 447M Working Poor, 600M Required for Population Growth Alone ................................. 146
WB- World Bank Says 300M Young People neither Working nor Studying ............................................................................................... 147
BIS ................................................................................................................................................................................................................... 149
BIS BIS Warns of Major Faultlines In Global Debt Bubble ..................................................................................................................... 149
BIS - BIS Quarterly Report ........................................................................................................................................................................... 151
BIS - BIS Slams The Fed: The Solution To Bubbles Is Not More Bubbles ................................................................................................. 151
BIS - Former BIS Chief Economist: "The System Is Dangerously Unanchored ......................................................................................... 152
BIS - Even the BIS Is Shocked At How Broken Markets Have Become ..................................................................................................... 154
BIS - Perhaps The BIS Can Share Its Next "Debt Trap" Warnings With Its Own Board Of Directors First ................................................ 158
BIS - The Next Time The BIS Wants To Warn About Monetary Kool-Aid, Bubbles, Lack Of Liquidity Or Complacency .......................... 161
BIS - "Low Volatility Everywhere" - BIS Sounds Alarm Alert On Pervasive Complacency Masking Systemic Shocks ............................. 162
BIS - BIS warns on 'violent' reversal of global markets ............................................................................................................................... 167
WEF WORLD ECONOMIC FORUM ............................................................................................................................................................ 171
WEF Global Business Risks ..................................................................................................................................................................... 173
WEF The 2015 Global Risk Landscape ................................................................................................................................................... 174
WEF Evolving Risk Landscape (2007-2015) ............................................................................................................................................ 175
WEF Global Risk Exposures By Region ................................................................................................................................................... 176
SITUATIONAL ANALYSIS ..................................................................................................................................................................................... 177
RESEARCH WE FOLLOWED ......................................................................................................................................................................... 177
CHARTS OF NOTE ......................................................................................................................................................................................... 179
Credit Denominated in US Dollars ............................................................................................................................................................... 179
IMFs Global GDP Outlook ........................................................................................................................................................................... 179
IMF Economic Forecasts Are So Consistently Bad That it Says they Dont Understand the Problem! .................................................... 180
Total Global Credit-Market Debt Owed as % of GDP ................................................................................................................................. 181
57T Increase in Total Debt Since 2007 and $112T Since 2000 Dotcom Bubble Implosion ....................................................................... 182
Global Risk Landscape Grid ........................................................................................................................................................................ 183
Geopolitical Risks Are Climbing: Interstate Conflict is Highest Risk in 2015 .............................................................................................. 184
Global Risks of Highest Concern ................................................................................................................................................................. 184
Global Risks Versus Impact ......................................................................................................................................................................... 185

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The economic balance of the world is shifting ............................................................................................................................................. 186


Global Conflict Intensity is heating up.......................................................................................................................................................... 187
World Conflict Map ....................................................................................................................................................................................... 188
World Conflict Map Details........................................................................................................................................................................ 189
Global Conflict & Protest Intensity ............................................................................................................................................................... 190
Deutsche Banks Key Global Risk ............................................................................................................................................................... 190
Political and Financial Risk Now Outnumber Real Economy Risks ............................................................................................................ 191
RESEARCH OF NOTE .................................................................................................................................................................................... 192
Why Are The IMF, The UN, The BIS And Citi All Warning That An Economic Crisis Could Be Imminent? ............................................... 192
The G-30 Group Of Central Bankers Warn They Can "No Longer Save The World" ................................................................................. 194
A Generation in Crisis- - The World Needs 5 Million Jobs-Month To Stymie Youth Extremism................................................................. 197
Presenting SocGen's 5 Black Swans For 2016 ........................................................................................................................................... 198
Paul Brodsky: "Expect The Unexpected. It Might Be Time To Duck And Cover" ....................................................................................... 201
McKinsey Institute says global debt is $199 Trillion and UNSUSTAINABLE .............................................................................................. 204
Deutsche Bank's Ominous Warning: A "Perfect Storm" Is Coming In 2018 ............................................................................................... 208
Global Conflict Intensity Spikes To 7-Year High.......................................................................................................................................... 211
These Are 2015's "Black Swans" According To SocGen ............................................................................................................................ 212
"Globalization Is Turning In On Itself And It Is Each Man For Himself"....................................................................................................... 214
Putin Unleashes Fury at US Follies in Major Pivotal Speech ................................................................................................................... 217
Putin Warns Of Risk of Major Conflict, Says Dollar Losing Reserve Currency Status ............................................................................... 218
Putin Accuses U.S. of Blackmail, Weakening Global Order ....................................................................................................................... 219
REFERENCE PAPERS Position Reminders Lest We Forget ................................................................................................................... 222
FOURTH TURNING ACCELERATING ....................................................................................................................................................... 222
AMERICAS GLOBAL RETREAT ................................................................................................................................................................ 233
THE OLD WORLD ORDER IS OVER ......................................................................................................................................................... 236
THE DEMOGRAPHIC THREAT TO DEVELOPED NATIONS ................................................................................................................... 237
THE RISK CONTINUUM ............................................................................................................................................................................. 240
GLOBAL TRENDS THE SIX FRAMING MEGATRENDS ........................................................................................................................ 242
GLOBAL THEMES TEN STRUCTURALTHEMES FOR STRATEGY ..................................................................................................... 244
DEBT SATURATION - A COLLAPSING PONZI SCHEME......................................................................................................................... 246
WINTER 2015 EVENT RISK DOMINATES ........................................................................................................................................... 248

GLOBAL MACRO: RISK SIGNALS ......................................................................................................................................... 255


GEO-POLITICAL RISK - SOCIAL, ECONOMIC & FINANCIAL ........................................................................................................ 257
EU REFUGEE CRISIS Tearing EU Apart........................................................................................................................................................... 257
NEW-EU REFUGEE - Latest Shock in Europe's Refugee Crisis: Austria Right-Wing Party Sweeps 1st Round of Presidential Election ..... 257
NEW-EU REFUGEE - Turkey Blackmails Europe on Visa-Free Travel ......................................................................................................... 259
NEW-EU REFUGEE - Switzerland Readies Military in Preparation For A New Wave Of Migrants ............................................................... 262
NEW-EU REFUGEE - Is Sweden Facing Another Migrant Invasion? ............................................................................................................ 268
NEW-EU REFUGEE - "There .......................................................................................................................................................................... 274
GROWING ELECTORATE ANGER Failing Social Contract .............................................................................................................................. 275
NEW-ELECTORATE - Why Voters Will Stay Angry ....................................................................................................................................... 275
PARIS SHOCKER ISIS Reality ........................................................................................................................................................................... 283
TERRORISM - "There's No Such Thing As ISIS": Journalist Destroys West's Terror Narrative, Warns Of Crackdown On "Dissidents" ..... 283
TERRORISM - Secretary of Defense Chuck Hagel: ISIL poses a threat greater than 9/11. ....................................................................... 284
TERRORISM - Two Reasons the 'War On Terror' Will Always Fail ................................................................................................................ 285
TAXATION Setting the Stage for the Coming Taxation Explosion ..................................................................................................................... 287
RESEARCH OF NOTE .................................................................................................................................................................................... 287
TAXATION Taxes must be paid, says George Osborne, as he backs crackdown on havens. ............................................................... 287
TAXATION The Coming Tax Tsunami Will Erode Wealth and Capital at a Shocking Pace ................................................................... 289
DEMOGRAPHICS Aging Population & Youth Unempolyment........................................................................................................................... 291
CHART OF NOTE............................................................................................................................................................................................ 291
YOUTH UNEMPLOYMENT Global Population ........................................................................................................................................ 291
YOUTH UNEMPLOYMENT Global Aging ................................................................................................................................................ 291
YOUTH UNEMPLOYMENT Global Aging By Country ............................................................................................................................. 292
RESEARCH OF NOTE .................................................................................................................................................................................... 294
YOUTH UNEMPLOYMENT - "A Generation In Crisis" - The World Needs 5 Million Jobs/Month To Stymie Youth Extremism ............... 294
YOUTH UNEMPLOYMENT - Four Ticking Global Time-Bombs Few Even Hear ...................................................................................... 295

GEO-POLITICAL RISK TENSIONS & CONFLICTS..................................................................................................................... 300


NEW-SAUDI-IRAN CONFLICT A Persian/Arab Sunni/Shiite Conflict ...................................................................................................... 300
NEW-SAUDI-IRAN Saudi Arabia Shows Obama How Dissatisfied they are With His Administration and the Iran Deal. .................. 300
NEW-SAUDI-IRAN - Deep Rifts With Saudi Arabia Overshadow Obamas Trip .................................................................................... 300
NEW-SAUDI-IRAN - Saudi Arabia, U.S. drifting apart despite Obamas efforts Russian media ......................................................... 302
ISIS .................................................................................................................................................................................................................. 305
ISIS THE SUNNI / SHIA /KURD PROBLEM ............................................................................................................................................ 306
ISIS - An Undercover Look Inside ISIS .................................................................................................................................................... 310
ISIS - Obama Says ISIS War Powers Request Not About 'Another Ground War' .................................................................................. 312
ISIS - President Obama Explains His "Boots On The Ground" ISIS-War Strategy................................................................................. 312
ISIS- Kobani Overshadows Larger Battles .............................................................................................................................................. 313
SYRIA .............................................................................................................................................................................................................. 316
RESEARCH WE FOLLOWED ..................................................................................................................................................................... 316
SYRIA - Pipeline Politics: Russia, Turkey Clash Over Energy As Syria Rift Shifts Focus To German Line .......................................... 317
SYRIA - Putin Kills "South Stream" Pipeline, Will Build New Massive Pipeline To Turkey Instead ........................................................ 320

MAY 2016 Edition


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SYRIA - Is The US Going To War With Syria Over A Natural Gas Pipeline? ......................................................................................... 322
SYRIA - Why Did Obama Choose Syria? ................................................................................................................................................ 325
SYRIA - Syria "Welcomes" Larger Russia Presence............................................................................................................................... 326
SYRIA - This has the Earmarks of the Kennedy Ear "Cuban Missile" Crisis .......................................................................................... 327
SYRIA - Syrian War You Are Not Being Told About ................................................................................................................................ 329
SYRIA - 25 Quotes ................................................................................................................................................................................... 330
SYRIA - What Coalition? .......................................................................................................................................................................... 333
SYRIA - US Supporting Fully an "Al Qaeda Operation" .......................................................................................................................... 335
SYRIA - Decision Already Taken to Bomb Syria ..................................................................................................................................... 337
SYRIA - Market Patterns Before and Immediately After Conflict Begins ................................................................................................ 345
SOUTH CHINA SEA TERRITORIAL PROBLEMS ......................................................................................................................................... 347
CHINA SEA - Why China Wants Control of The South China Sea In 10 Charts .................................................................................... 348
CHINA SEA - "Strongly Dissatisfied" China Warns US "Accident" Is "Highly Likely" In South China Sea ............................................. 354
CHINA SEA - PLA Officer: China Must Establish South China Sea ADIZ; Will "Fight ............................................................................ 355
IRAN ................................................................................................................................................................................................................. 358
RESEARCH OF NOTE ................................................................................................................................................................................ 358
IRAN A Mistake of Historic Proportion! Bibi Netanyanhu ................................................................................................................... 358
IRAN NBC Special Report: Nuclear Agreement Reached With Iran .................................................................................................... 361
YEMEN ............................................................................................................................................................................................................ 362
CHARTS OF NOTE ..................................................................................................................................................................................... 362
YEMEN Strategic Position .................................................................................................................................................................... 362
YEMEN al-Houthis and Saleh Concentrations ..................................................................................................................................... 363
YEMEN The Decisive Storm Coalition ............................................................................................................................................... 363
YEMEN Global Oil Chokepoints ........................................................................................................................................................... 364
YEMEN Middle Eastern Oil Production & Chokepoints ........................................................................................................................ 364
YEMEN Chinese Import Countries & Oil Routes .................................................................................................................................. 366
YEMEN Major Crude Oil Trade Flows in the South China Sea ............................................................................................................ 367
YEMEN Regional Territorial Claims in the South China Sea ............................................................................................................... 368
RESEARCH OF NOTE ................................................................................................................................................................................ 369
YEMEN Risk of World War between NATO and Russia on Ukraine Escalation as Yemen Bombed for Third Day .......................... 369
YEMEN Yemen Ground Invasion by Saudi, Egyptian Troops Imminent .............................................................................................. 371
YEMEN Middle East Proxy War: Presenting The Massive "Decisive Storm" Coalition ....................................................................... 374
YEMEN Saudi Arabia Imposes Naval Blockade on Red Sea Strait, Deploys 150,000 Troops ........................................................... 375
YEMEN Another Middle East War Breaks Out: Saudis Begin Bombing Yemen, US Military Taking Action ....................................... 377
YEMEN Presenting The Theater Of War; Who Controls Yemen? ....................................................................................................... 382
YEMEN US-Armed Rebels Force Yemen President To Flee Country As Saudis Prepare For War ................................................... 384
UKRAINE EAST/WEST CONFLICT The New Colder War ..................................................................................................................... 389
RESEARCH WE FOLLOWED ..................................................................................................................................................................... 390
RESEARCH OF NOTE ................................................................................................................................................................................ 396
NEW-COLD WAR - "They Should Be Met By Force" - US General Warns Russia Future Fly-Bys "Won't End Well For You" ............. 396
UKRAINE - Putin Is Becoming A "Vulture" Bond Investor ....................................................................................................................... 397
UKRAINE - West Further Infuriates & Antagonizes Russia with Debt Restructuring Pressures ............................................................ 398
UKRAINE - Congress Approves Funding for Ukraine Arms Shipments.................................................................................................. 402
UKRAINE - US Taxpayers to Fund Ukraine Bailout via Bond Guarantee ............................................................................................... 406
UKRAINE - Congress Approves Funding for Ukraine Arms .................................................................................................................... 407
UKRAINE - White House Explains Where Your $1.3 Billion Went In Ukraine ........................................................................... 410
UKRAINE - Putin Says Attempts To Tip Nuclear Balance Don't Scare Russia, Moscow Will Uncover "Schemes" ............................... 413
UKRAINE - Putin Security Council Slams Obama Attempts at "New World Order" ............................................................................... 414
UKRAINE- A Russian Viewpoint .......................................................................................................................................................... 416
UKRAINE- This Is What Is Really Taking Place Behind The Scenes Of The Second US-Russian Cold War....................... 430

GEO-POLITICAL RISK GLOBAL GOVERNANCE FAILURE......................................................................................................... 432


NEW-BREXIT ......................................................................................................................................................................................................... 432
NEW-BREXIT Brexit Is No Business of U.S.................................................................................................................................................. 432
NEW-BREXIT Cameron could not have asked for more from Obama's Brexit warning .............................................................................. 432
NEW-BREXIT The G-30 Group of Central Bankers Warn They Can "No Longer Save The World" ........................................................... 433
NEW-BREXIT TTIP is a Very Bad Excuse to vote for Brexit ........................................................................................................................ 434
GENERAL .............................................................................................................................................................................................................. 435
GOVERNANCE The G-30 Group of Central Bankers Warn They Can "No Longer Save The World" ........................................................ 435
ASIAN INFRASTRUCTURE INVESTMENT BANK A Threat to World Bank and US$ Reserve Status ..................................................... 439
RESEARCH WE FOLLOWED ..................................................................................................................................................................... 439
CHARTS OF NOTE ..................................................................................................................................................................................... 442
AIIB Demanding Infrastructure .............................................................................................................................................................. 442
RESEARCH OF NOTE ................................................................................................................................................................................ 443
AIIB - The Nepo-Cold War, The World Bank and the AIIB Threat .............................................................................................. 443
AIIB - Washington Blinks: Will Seek Partnership With China-Led Development Bank ........................................................................... 445
AIIB - China "Is Not Another US", Does Not Seek "Yuan Hegemony" .................................................................................................... 446
AIIB - Obama administration proposes co-financing projects with new Asian Infrastructure Investment Bank ............. 448
AIIB - Qatar, Jordan, Oman, Kuwait AND Saudi Arabia have applied Goodbye Petrodollar! .............................................................. 451
AIIB - Obama continues to be humiliated by the rising anti-dollar alliance ............................................................................. 453
AIIB - Did De-Dollarization Just Reach Escape Velocity? ....................................................................................................................... 455
EMERGING BRICS ALLIANCE NEW MULTI-POLAR WORLD .................................................................................................................. 458
MULTI-POLAR-Money Supply The New World Economy ....................................................................................................................... 458
MULTI-POLAR-Financial Globalist Impose Monetary Hegemony .............................................................................................................. 460
MULTI-POLAR-Financial Globalists Controlling the Political Process ........................................................................................................ 462
ADVANCING GLOBAL FINANCIAL REPRESSION ....................................................................................................................................... 465

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HENRY KISSINGER CALLS FOR NEW WORLD ORDER (NWO) ................................................................................................................ 467
KISSINGER- Henry Kissingers World Order ............................................................................................................................................. 467

GLOBAL MACRO: RISK LEVELS ........................................................................................................................................... 470


AGGREGATED GLOBAL FINANCIAL RISK INDEX ............................................................................................................................................. 470
NEW-BANKING RISK - LIBOR-OIS SPREAD ................................................................................................................................................ 471
NEW-BANKING RISK - TED SPREAD ........................................................................................................................................................... 471
NEW-CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS ....................................................................................................................... 472
NEW-CREDIT RISK - EU CREDIT DEFAULT SWAPS .................................................................................................................................. 472
NEW-CONSUMER RISK - HOUSING - RATE OF CHANGE ......................................................................................................................... 473
NEW-ECONOMIC RISK - ECRI LEADING INDEX ......................................................................................................................................... 474
NEW-INFLATION RISK - MONEY SUPPLY GROWTH - M3 ......................................................................................................................... 476
NEW-INFLATION RISK - MONEY VELOCITY ............................................................................................................................................... 476
MONETARY RISK - BANK LIABILITIES ......................................................................................................................................................... 477
NEW-COST OF MONEY RISK - INTEREST RATES .................................................................................................................................... 478
AGGREGATED RISK LEVEL ................................................................................................................................................................................ 479

GLOBAL MACRO: TIPPING POINTS ...................................................................................................................................... 480


OVERALL CATEGORY RANKINGS Q2 2016 ................................................................................................................................................... 480
CURRENT RANKINGS Versus Longer Term Benchmarks ............................................................................................................................... 481
TREND NOTES...................................................................................................................................................................................................... 485
CHANGES TO RANKINGS - Longer Term Benchmarks ...................................................................................................................................... 486
CHANGES TO MACRO MAP$ ROADMAP$ - Longer Term Trends .................................................................................................................... 487
TIPPING POINTS: TOP 5 FOCUS - MAY 2016 .................................................................................................................................................... 489
NEW-I - RISK REVERSAL .............................................................................................................................................................................. 489
NEW-II - CHINA HARD LANDING .................................................................................................................................................................. 504
NEW-III - EU BANKING CRISIS ...................................................................................................................................................................... 507
NEW-IV BOND BUBBLE .............................................................................................................................................................................. 514
NEW-V- GEO-POLITICAL EVENT RISK ........................................................................................................................................................ 522

GLOBAL MACRO: ECONOMIC OUTLOOK ............................................................................................................................ 526


ECONOMIC CUTS ................................................................................................................................................................................................. 526
NEW-IMF DOWNGRADES OUTLOOK FOR WORLD ECONOMY ............................................................................................................... 526
NEW-IMF Now Projects the world economy will grow by only 3.4% in 2016 .............................................................................................. 526
NEW-IMF Slashes Global Growth Outlook Again, Warning "Of Great Challenges" In Year Ahead........................................................... 527
IMF CUTS ECONOMIC OUTLOOK ............................................................................................................................................................ 531
OECD CUTS ECONOMIC OUTLOOK AGAIN!............................................................................................................................................ 542
OECD CUTS ECONOMIC OUTLOOK ........................................................................................................................................................ 544
CHARTS OF NOTE ......................................................................................................................................................................................... 546
IMF To Slash Economic Growth Forecast... AGAIN - Still Full of Hockey sticks ........................................................................................ 546
CHART IMFs Delusional Forecasting Record 3 ................................................................................................................................... 550
CHART IMFs Delusional Forecasting Record 2 ................................................................................................................................... 554
CHART IMFs Delusional Forecasting Record - 1 .................................................................................................................................... 554
ECONOMIC WARNINGS....................................................................................................................................................................................... 555
NEW-OECD WARNS ...................................................................................................................................................................................... 555
NEW-'WORSE THAN 2007': OECD Chairman warns of looming wave of worldwide bankruptcies .......................................................... 555
IMF WARNS .................................................................................................................................................................................................... 557
IMF Warns of gloomy eurozone outlook ...................................................................................................................................................... 557
IMF Warns U.S.: Your financial system is (still) vulnerable ......................................................................................................................... 561
IMF Warns Japan over Its Staggering National Debt .................................................................................................................................. 563
IMF Warns Japan to step up reforms .......................................................................................................................................................... 563
IMF Warns Fed on risks of hiking too soon ................................................................................................................................................. 564
IMF Warns of Permanent Stagnation .......................................................................................................................................................... 565
IMF Sees risk of new eurozone ................................................................................................................................................................... 567
IMF Tells Central Europe to Spend More .................................................................................................................................................... 570
Japanese & Spanish Debt Unsustainable ................................................................................................................................................... 573
Global Recovery Faltering, Reduces Global Growth to Just Above 3% Global Recession Level .............................................................. 575
BIS WARNS ..................................................................................................................................................................................................... 577
BIS WARNS - Former BIS Economic Advisor Warns on European QE ..................................................................................................... 577
Monetary Policy At Its Limits ........................................................................................................................................................................ 589
WORLD BANK WARNS .................................................................................................................................................................................. 590
Social Unrest Stems from Shrinking Disposable Income. Jobs are the central issue. ............................................................................... 592
G20 WARNS Need to Add $2T in Economic Activity & Tens of Millions of Jobs ........................................................................................ 595
RESEARCH WE FOLLOWED ............................................................................................................................................................................... 596
CHARTS OF NOTE ............................................................................................................................................................................................... 599
NEW-CHART: A Global Bear Market? ............................................................................................................................................................ 599
NEW-CHART: World Equity Market Capitalization Loses .............................................................................................................................. 600
NEW-CHART: A 7.5 Year Global Cycle May be Underway ............................................................................................................................ 600
NEW-CHART: Chinas Total Debt at 3005 A Drag on Future Growth ............................................................................................................ 601
NEW-CHART: The Largest Rolling Losses in Commodities Since the Great Depression ............................................................................. 601
NEW-CHART: Latest IMF Global Growth Projections .................................................................................................................................... 602
NEW-CHART: IMF Global Growth Projections -2 ........................................................................................................................................... 602
NEW-CHART: IMF Perspective on Global Transitions & Associated Risks ................................................................................................... 604

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CHART: Global Consumer Confidence Turns................................................................................................................................................. 604


CHART: Global Consumer Confidence Momentum versus Bond Yields ....................................................................................................... 605
CHART: Bear Grip Felt Around the World ....................................................................................................................................................... 605
CHART: Emerging Market FX in Freefall ........................................................................................................................................................ 606
CHART: Asian Dollar Index Sends Ominous Sign .......................................................................................................................................... 607
CHART: Biggest Currency Losers ................................................................................................................................................................... 607
CHART: The Great Unwind - A Triple Unwind of EM Credit, Chinas Leverage and US Monetary Easing ................................................... 608
CHART: Latin Americas Economic Slowdown ............................................................................................................................................... 609
CHART: Global Stock of Debt Outstanding Grows By $57T since Financial Crisis ....................................................................................... 609
CHART: Decade-Long Central Bank FX Reserves Surge Nears End ............................................................................................................ 610
CHART: Global Business Equipment Investment ........................................................................................................................................... 611
CHART: EM versus DM Credit Risk ................................................................................................................................................................ 612
CHART: MSCI World P/E versus EM P/E ....................................................................................................................................................... 612
CHART: Emerging Capital Flows & Currency Moves ..................................................................................................................................... 613
CHART: Falling Real GDP of Emerging Versus Rising Developed Economies ............................................................................................. 613
CHART: Domestic Bank Credit of EM versus DM .......................................................................................................................................... 614
CHART: Regional Resilience Score Differences Since the Financial Crisis................................................................................................... 614
CHART: US Macro index at a New 6 Year Low. ............................................................................................................................................. 616
CHART: There is a Problem in Global Credit .................................................................................................................................................. 616
CHART: Serial Disappointments & Ratcheting Down of Global Growth ......................................................................................................... 617
CHART: Continuous Weakening of Global GDP Estimates ........................................................................................................................... 618
CHART: Reduced Demand Pressures on Energy Prices ............................................................................................................................... 618
CHART: Reduced Demand Pressures on Commodities................................................................................................................................. 619
CHART: Global Corporate Profit Trends ......................................................................................................................................................... 619
CHART: Stunning Growth in Debt of Developed Economies since Dotcom Bubble Burst ............................................................................ 620
CHART: Worlds FDI Flooding Into Financial Products versus Productive Assets ......................................................................................... 621
CHART: Growth of Asian Middle Class Dominates Next 20 Years .............................................................................................................. 622
CHART: Global Domestic Demand Growth .................................................................................................................................................... 622
CHART: Fiscal Adjustments Required Deficit Reductions for Fiscal Sustainability..................................................................................... 623
CHART: Over $10 Trillion Pumped Into Global Economy by Developed Economies .................................................................................... 624
CHART: Eventually All this Debt Must be Rolled over or Paid Out................................................................................................................. 624
RESEARCH OF NOTE .......................................................................................................................................................................................... 624
GLOBAL OUTLOOK The Global Liquidity Squeeze Has Begun ................................................................................................................. 625
GLOBAL OUTLOOK Biggest Worry" Is Dramatic Decline In Bond Market Liquidity, Prudential Says ...................................................... 628
GLOBAL OUTLOOK 2015 Macro Outlook Proving to be Volatile ............................................................................................................... 629
GLOBAL OUTLOOK 2015 Macro Outlook Forecasts Hinge on a Deteriorating US Economy ................................................................... 632
GLOBAL OUTLOOK 3 of 10 Largest Economies Have Fallen into Recession ........................................................................................... 633
GLOBAL OUTLOOK This is the Biggest Risk to the World's Economy ...................................................................................................... 636
GLOBAL OUTLOOK What is global market turbulence telling us? ............................................................................................................. 640
GLOBAL OUTLOOK Darker Outlook Has Bond Market Rethinking Odds of Economic Downturn ............................................................ 643
GLOBAL OUTLOOK The Last Days Of The Growth Story? ........................................................................................................................ 645
GLOBAL OUTLOOK The Last Days Of The Growth Story? ........................................................................................................................ 647
GLOBAL OUTLOOK - THE ECONOMIC ROADMAP AHEAD: It Isn't That Complicated! ............................................................................. 648
GLOBAL OUTLOOK - 20 Signs That the Global Economic Crisis Is Starting To Catch Fire ......................................................................... 653
GLOBAL OUTLOOK - Problems Erupting Everywhere (Signs of Implosion) ................................................................................................. 655
GLOBAL OUTLOOK - Global Debt Crosses $100 Trillion, Rises By $30 Trillion Since 2007 ........................................................................ 658
GLOBAL OUTLOOK The US as the Global Consumption Engine to See Sub 2% Trend Growth ............................................................ 661
GLOBAL OUTLOOK - Credit Fueled Globalization in Retreat ........................................................................................................................ 664
GLOBAL OUTLOOK - Rogoff's Sovereign Debt Default Levels ..................................................................................................................... 666
GLOBAL OUTLOOK - Imbalances Continue to Increase Along With Financial Fragility ............................................................................... 669
GLOBAL OUTLOOK - A 67 Million Jobs Gap ................................................................................................................................................. 671

GLOBAL MACRO: INDICATORS ............................................................................................................................................ 675


GLOBAL TRENDS ................................................................................................................................................................................................. 675
CHARTS OF NOTE ......................................................................................................................................................................................... 675
NEW-GLOBAL TRENDS Global Nominal GDP Growth May Be in the Midst of a Secular Downturn .................................................... 675
NEW-GLOBAL TRENDS World GDP Growth Rates Since 2000 ............................................................................................................ 675
GLOBAL TRENDS World Industrial Production Index ............................................................................................................................. 676
GLOBAL TRENDS World Industrial Production Index Annual % Change, 1966 to May 2015 ............................................................ 676
GLOBAL TRENDS UNITED STATES Industrial Production Index .......................................................................................................... 677
GLOBAL TRENDS UNITED STATES Industrial Production Index Annual % Change, 1966 to May 2015 ......................................... 677
GLOBAL TRENDS JAPAN Industrial Production Index ........................................................................................................................... 678
GLOBAL TRENDS EURO AREA Industrial Production Index ................................................................................................................. 678
GLOBAL TRENDS EMERGING ASIA Industrial Production Index.......................................................................................................... 679
GLOBAL TRENDS EMERGING ASIA Industrial Production Index.......................................................................................................... 679
GLOBAL TRENDS Consensus 2015 World GDP Growth Expectations ................................................................................................. 679
GLOBAL TRENDS US Macro Continues to Plummet .............................................................................................................................. 680
GLOBAL TRENDS GLI Momentum & Global Industrial Production Both About to Go Into Contraction ................................................. 681
GLOBAL TRENDS Changes in 2014 2015 Profit (EPS) Forecasts By Country/Region ................................................................... 681
GLOBAL TRENDS Changes in 2014 2015 Profit (EPS) Forecasts By Sector .................................................................................. 682
GLOBAL TRENDS G7 Long Run GDP Growth Rates (PPP Weighted) .................................................................................................. 682
GLOBAL TRENDS Falling Population Growth Rate in Developed Economies ....................................................................................... 683
GLOBAL TRENDS Falling Labor Productivity Rate in Developed Economies ........................................................................................ 684
GLOBAL TRENDS Falling Workers Per Retiree in Developed Economies ............................................................................................. 684
RESEARCH OF NOTE .................................................................................................................................................................................... 685
GLOBAL TRENDS The Commodities Super-Cycle Has Gone Into Reverse .......................................................................................... 685

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GLOBAL TRENDS The curse of weak global demand ............................................................................................................................ 685


GLOBAL TRENDS Is economic growth permanently lower? Do We Have Secular Stagnation ........................................................... 690
GLOBAL TRENDS - The Facts are Clear - the US Standard of Living is Falling ....................................................................................... 694
RESEARCH OF NOTE .................................................................................................................................................................................... 695
GLOBAL GROWTH ............................................................................................................................................................................................... 695
CHARTS OF NOTE ......................................................................................................................................................................................... 695
NEW-GLOBAL GROWTH Global Nominal Y-o-Y GDP Grow .................................................................................................................. 695
NEW-GLOBAL GROWTH World Trade Volume Y-o-Y ............................................................................................................................ 695
NEW-GLOBAL GROWTH World Industrial Production ............................................................................................................................ 695
GLOBAL GROWTH World Trade Values in US$ ..................................................................................................................................... 696
GLOBAL GROWTH World Industrial Production ..................................................................................................................................... 697
GLOBAL GROWTH World Trade (Values in US$) Index ......................................................................................................................... 698
GLOBAL GROWTH World Trade Volumes Annual % Change 1966 to May 2015 .............................................................................. 699
GLOBAL GROWTH US Imports (Volumes) Annual % Change, 1966 to May 2015 ............................................................................. 700
GLOBAL GROWTH US Imports (Values) Annual % Change, 1966 to May 2015 ................................................................................ 700
GLOBAL GROWTH JAPAN Imports (Volumes) Annual % Change, 1966 to May 2015 ...................................................................... 701
GLOBAL GROWTH JAPAN Imports Annual % Change, 1966 to May 2015 ........................................................................................... 701
GLOBAL GROWTH EURO AREA Imports (Volumes) Annual % Change, 1966 to May 2015 ............................................................ 702
GLOBAL GROWTH EURO AREA (Values) Annual % Change, 1966 to May 2015 ............................................................................. 702
GLOBAL GROWTH EMERGING ASIA Imports (Volumes) Annual % Change, 1966 to May 2015 ..................................................... 703
GLOBAL GROWTH EMERGING ASIA (Values) Annual % Change, 1966 to May 2015 ..................................................................... 703
GLOBAL GROWTH LATIN AMERICA Imports (Volumes) Annual % Change, 1966 to May 2015 ...................................................... 704
GLOBAL GROWTH LATIN AMERICA (Values) Annual % Change, 1966 to May 2015 ...................................................................... 704
GLOBAL GROWTH CHINAS Imports, Annual % Change ...................................................................................................................... 705
GLOBAL GROWTH CHINAS Exports, Annual % Change ...................................................................................................................... 705
GLOBAL GROWTH Global Leading Indicator Swirlogram Gets Worse ............................................................................................... 706
GLOBAL GROWTH Global Leading Indicator Signals Contraction ......................................................................................................... 707
GLOBAL GROWTH Eurozone PMI and GDP .......................................................................................................................................... 708
GLOBAL GROWTH World PMI Rankings ................................................................................................................................................ 709
GLOBAL GROWTH Global Leading Indicator Has Now Rolled Over ...................................................................................................... 710
GLOBAL GROWTH Global PMI Business Surveys Fall .......................................................................................................................... 710
GLOBAL GROWTH Baltic Dry Index Collapses 50% .............................................................................................................................. 711
GLOBAL GROWTH Global Slowdown on Verge of Contraction.............................................................................................................. 712
GLOBAL GROWTH - GDP Forecasts Continue to Be Taken Down........................................................................................................... 712
GLOBAL GROWTH Global Leading Indicator Goldmans Swirlogram Getting More Serious ......................................................... 712
GLOBAL GROWTH Global Industrial Production Rolling Over ............................................................................................................. 713
GLOBAL GROWTH Consensus 2014 GDP Forecast - Differential ......................................................................................................... 714
GLOBAL GROWTH G10 Macro Change ................................................................................................................................................. 714
RESEARCH OF NOTE .................................................................................................................................................................................... 715
NEW-GLOBAL GROWTH - World Trade & Industrial Production Growth Near Post-Crisis Lows ............................................................. 715
NEW-GLOBAL GROWTH - CEO of World's Largest Shipping Company: "Global Growth Is Worse Than Official Reports" .................... 717
GLOBAL GROWTH - World's Busiest Freight Route Rates Plunge To 2014 Lows ................................................................................... 719
GLOBAL GROWTH - Goldman Global Leading Indicator Drastically Revised, Collapses into "Confirmed Slowdown" ............................ 721
GLOBAL GROWTH - The Wal-Mart Measure or How the US Consumer Is the Global Engine ................................................................ 722
GLOBAL GROWTH Potential of a Global Recession Mounting .............................................................................................................. 724
GLOBAL GROWTH What the hint of a Fed Taper Did to Global Growth Estimates ............................................................................. 728
GLOBAL GROWTH - Uneconomic Energy Problematic ............................................................................................................................. 730
GLOBAL GROWTH - Global Growth Cycle ................................................................................................................................................. 732
GLOBAL GROWTH - Global GDP Contribution .......................................................................................................................................... 733
GLOBAL GROWTH - Slowing Global Growth - Air Cargo Shipments ........................................................................................................ 734
GLOBAL CONSUMPTION ..................................................................................................................................................................................... 735
CHARTS OF NOTE ............................................................................................................................................................................................... 735
NEW-GLOBAL CONSUMPTION Historic Record Low Baltic Dry Index .................................................................................................. 735
NEW-GLOBAL CONSUMPTION China Containerized Freight Index ..................................................................................................... 735
GLOBAL CONSUMPTION Top 5 Global Household Savings Strategies by Region .............................................................................. 736
GLOBAL CONSUMPTION Rising Consumer Prices are Hurting Global Demand .................................................................................. 736
GLOBAL CONSUMPTION Global Home Prices Are Rolling Over .......................................................................................................... 737
GLOBAL CONSUMPTION Real Domestic Demand US, Japan & EU ................................................................................................. 738
GLOBAL CREDIT .................................................................................................................................................................................................. 739
CREDIT CYCLE - HG Spread Widening ..................................................................................................................................................... 739
CREDIT CYCLE - Widening Gap Between Debt & Equity .......................................................................................................................... 739
CREDIT CYCLE - HY Leading the Way ...................................................................................................................................................... 739
GLOBAL EMPLOYMENT....................................................................................................................................................................................... 743
CHARTS OF NOTE ......................................................................................................................................................................................... 743
CHART Global Employment Rates ........................................................................................................................................................... 743
CHART Global Unemployment ................................................................................................................................................................. 744
CHART Global Unemployment EU Comparison ................................................................................................................................... 744
CHART Unemployment in Advanced Countries ....................................................................................................................................... 745
CHART Global Labor Participation Rates ................................................................................................................................................ 745
CHART Global Youth Unemployment By Country ................................................................................................................................ 746
CHART Global Chance of Finding a Job Within Year .............................................................................................................................. 746
RESEARCH OF NOTE .................................................................................................................................................................................... 747
GLOBAL UNEMPLOYMENT - The Beginnings of the Welfare Myth Unwind ............................................................................................. 747
GLOBAL UNEMPLOYMENT - The Unsustainable Welfare Myth ............................................................................................................... 749
GLOBAL UNEMPLOYMENT - Global Financial Sector Job Cuts ............................................................................................................... 751

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GLOBAL SENTIMENT ........................................................................................................................................................................................... 753


CHARTS OF NOTE ......................................................................................................................................................................................... 753
GLOBAL SENTIMENT Global Economic Momentum Cycle Shows Cycle Turn to Be Expected............................................................ 753
GLOBAL SENTIMENT Global Consumer Confidence Up in Europe in Q2 But Flat to Down Globally ................................................... 754
GLOBAL SENTIMENT Global Consumer Confidence Down -1 from Q1 2015 ....................................................................................... 755
GLOBAL SENTIMENT Biggest & Second Biggest Concerns in the Next Six Months By Country ...................................................... 756
GLOBAL SENTIMENT Differing Concerns Around the World By Region ............................................................................................ 757
GLOBAL SENTIMENT Growing Recessionary Sentiment ....................................................................................................................... 758
GLOBAL SENTIMENT Latin America Falls Deeper Into A Recessionary Mindset ................................................................................. 759
GLOBAL SENTIMENT Global Consumer Confidence Down In Q4 2014 ................................................................................................ 760
GLOBAL SENTIMENT Global Consumer Confidence by Country .......................................................................................................... 761
GLOBAL SENTIMENT Global Consumer Confidence Improves the Most in North America .................................................................. 762
GLOBAL SENTIMENT Recessionary Sentiment Increases in Latin America ......................................................................................... 763
GLOBAL SENTIMENT North America Reports Strong Increase Y-o-Y for all Confidence Indicators .................................................... 764
GLOBAL SENTIMENT Consumer Confidence Decreases in 63% of European Markets ....................................................................... 765
GLOBAL SENTIMENT Consumer Confidence Decreases in 71% of Asia Pacific Markets .................................................................... 766
GLOBAL SENTIMENT Consumer Confidence Decreases in 71% of Latin America Markets ................................................................. 767
GLOBAL SENTIMENT Consumer Confidence in Saudi Arabia, Pakistan Falls ...................................................................................... 768
GLOBAL SENTIMENT Consumer Confidence High in Sub-Saharan Africa ........................................................................................... 769
GLOBAL SENTIMENT Global Business Activity Future Expectations .................................................................................................... 770
GLOBAL SENTIMENT Global Jog Prospects Reach 50% - First Time In 7 Years ................................................................................. 770
GLOBAL SENTIMENT Global Consumer Confidence by Country .......................................................................................................... 772
GLOBAL SENTIMENT Global Consumer Confidence Trends by Country .............................................................................................. 773
GLOBAL SENTIMENT Northern American Spending Intentions Rise According to Nielsen .................................................................. 774
RESEARCH OF NOTE .................................................................................................................................................................................... 775
GLOBAL SENTIMENT Global Business Confidence Collapses To Post-Lehman Lows ........................................................................ 775
GLOBAL SENTIMENT The State Of Economic 'Misery' Around The World ........................................................................................... 777
GLOBAL SENTIMENT Highest Level Since 2007 ................................................................................................................................... 781
GLOBAL SENTIMENT - Complacent .......................................................................................................................................................... 782
GLOBAL SENTIMENT - Complacent .......................................................................................................................................................... 784
GLOBAL SENTIMENT - Nielsens Global Consumer Confidence, Concerns & Spending Intentions ........................................................ 785
CREDIT CYCLE - Reversal Ahead .............................................................................................................................................................. 796

GLOBAL MACRO: MONETARY POLICY & CENTRAL BANKING .......................................................................................... 799


GLOBAL CENTRAL BANKING ............................................................................................................................................................................ 799
RESEARCH WE FOLLOWED Global Banking Risk .................................................................................................................................... 799
CHARTS OF NOTE ......................................................................................................................................................................................... 802
NEW-CHARTS Debt of Advanced Economies Higher as %of GDP then After WWI and WWII ............................................................. 802
NEW-CHARTS Global Debt to GDP Growth 1994 to 2014 .................................................................................................................. 803
NEW-CHARTS Central Bank Balance Sheet Growth as Percentage of Nominal GDP .......................................................................... 803
NEW-CHARTS Central Bank Key Policy Rates ....................................................................................................................................... 804
NEW-CHARTS Central Bank Pack Seen to be Needed to Spur Inflation ............................................................................................. 804
NEW-CHARTS Global Banking Profits after Tax ..................................................................................................................................... 804
NEW-CHARTS Global Stock of Debt Outstanding by Type ..................................................................................................................... 805
NEW-CHARTS Total Public Debt Outstanding by 2017 Forecasts for Currency Cartel .................................................................... 806
CHARTS Saudi + China Reserves versus 10Y UST Yield ...................................................................................................................... 806
CHARTS Total World Reserve Foreign Exchange Reserves .................................................................................................................. 807
CHARTS Why Canada May Become a Problem For Janet Yellen .......................................................................................................... 808
CHARTS Consensus Fed and ECB Rate Hike Projections ..................................................................................................................... 809
CHARTS Global Monetary Policy Stance & Bias ..................................................................................................................................... 810
CHARTS Global Government Bonds Trading With Negative Yields........................................................................................................ 811
CHARTS Lack of Inflation in Europe ........................................................................................................................................................ 811
CHARTS Two Sides of Inflation Commodities, Inflation Breakevens and UST Curve (5-30s)............................................................. 812
CHARTS Quantitative e Easing No Longer Drives Commodity Prices .................................................................................................... 813
CHARTS De-Leveraging Average Industrial Debt-Percentage of GDP ................................................................................................ 813
CHARTS Sovereign Net Issuance After Central Bank Issuances ........................................................................................................ 814
CHARTS Sovereign Net Issuance After Central Bank Issuances ........................................................................................................ 814
CHARTS Falling Global Bond Rates Continue in Q1 2015 ...................................................................................................................... 815
CHARTS The Road to NIR (Negative Rates) ........................................................................................................................................... 815
CHARTS Central Bank Policy Rates ........................................................................................................................................................ 816
CHARTS Days of Chinese Credit-Driven Growth are numbered ............................................................................................................. 816
CHARTS Major Central Bank Assets versus GDP Forecast ................................................................................................................... 818
CHARTS Major Central Bank Y-o-Y Balance Sheet Growth ................................................................................................................... 818
CHARTS Cumulative Change in Central Bank Balance Sheets Since 2008 ........................................................................................ 819
CHARTS Global Central Bank Assets versus World Equity Prices ......................................................................................................... 819
CHARTS Cumulative Change in Central Bank Balance Sheets Since 2000 ........................................................................................ 820
RESEARCH OF NOTE .................................................................................................................................................................................... 821
NEW-CENTRAL BANKS - How We Got Here: The Fed Warned Itself In 1979, Then Spent Four Decades Intentionally Avoiding The
Topic ............................................................................................................................................................................................................. 821
CENTRAL BANKS - 8 Capital Markets 'Threats' To The Central Bank Narrative ...................................................................................... 825
CENTRAL BANKS - How Much More Faith In Central Banks Is Left? ....................................................................................................... 827
CENTRAL BANKS - The $100 Trillion Global Debt Ponzi Scheme ............................................................................................................ 829
CENTRAL BANKS - The Backstop of Modern Finance Is About to Implode .............................................................................................. 830
CENTRAL BANKS - What does NIRP Tell US About Global Risk of Deflation? ........................................................................................ 831
CENTRAL BANKS - In Denmark You Are Now Paid To Take Out A Mortgage ......................................................................................... 834
CENTRAL BANKS - The Beginning of the End of the $100 TRILLION Bond Bubble ................................................................................ 835

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CENTRAL BANKS - The $100 Trillion Reason Why Central Banks Are Terrified of Debt Deflation .......................................................... 837
CENTRAL BANKS - The year of Dollar Danger for the world ..................................................................................................................... 839
CENTRAL BANKS - Commodities, Inflation Breakevens and Yield Curve Sending Clear Warnings ........................................................ 844
CENTRAL BANKS Economic policies are diverging in the developed world as deflation looms ............................................................ 848
CENTRAL BANKS Central banks can't raise growth potential, says ECB's Weidmann ......................................................................... 850
CENTRAL BANKS Axel Merks 2014 Outlook.......................................................................................................................................... 851
CENTRAL BANKS - Japan May Eclipse China Again, as Largest Holder of US Treasuries ..................................................................... 854
CENTRAL BANKS - Austerity Now Officially Dead Public Policy ............................................................................................................... 855
CENTRAL BANKS - A Serious Shortage of Quality Collateral - A $10T US Problem Over 10 Years ....................................................... 856
CENTRAL BANKS - Global Balance Sheet Expansion ............................................................................................................................... 858
WAR ON CASH ............................................................................................................................................................................................... 863
WAR ON CASH Elliott Waves Report on the War on Cash .................................................................................................................. 863
WAR ON CASH The "War On Cash" Migrates To Switzerland ............................................................................................................... 868
WAR ON CASH Chase Joins the War on Cash ....................................................................................................................................... 871
WAR ON CASH Largest Bank In America Joins War On Cash ............................................................................................................... 873
WAR ON CASH Citigroup's Gold "Expert" Demands A Cash Ban .......................................................................................................... 875
SWISS PEG ..................................................................................................................................................................................................... 879
SWISS PEG Swiss Peg Failure First Central Bank To Lose Control .................................................................................................... 880
SWISS PEG Swiss Peg Failure The Financial System Broke Last Week ............................................................................................ 882
SWISS PEG Swiss Peg Failure Keynesian Contral Banking is Destroying Money & Markets ............................................................ 883
TROUBLING DEVELOPMENTS ..................................................................................................................................................................... 887
TROUBLING DEVELOPMENTS Insider Says Central Banks Making it Up as They Go! ....................................................................... 887
TROUBLING DEVELOPMENTS 2007 Redux: Total public and private debt levels are 30pc higher in the advanced economies ........ 888
TROUBLING DEVELOPMENTS Polish Pension Confiscation: Coming to a Theater near You .......................................................... 891
TROUBLING DEVELOPMENTS Global Tax Overhaul ............................................................................................................................ 893
BOE - UK ................................................................................................................................................................................................................ 894
CHARTS OF NOTE ......................................................................................................................................................................................... 894
UK Sterling/ US Dollar Exchange Rate after UK Super Thursday ......................................................................................................... 894
UK Dissent within BOE Set to Continue ................................................................................................................................................... 894
RESEARCH OF NOTE .................................................................................................................................................................................... 895
UK - Neutral Report Leaves BOE on Track for February Liftoff .................................................................................................................. 895
UK - Did The Bank Of England Just Admit Financial Markets Aren't "Real"? ............................................................................................. 897
UK - BOE Faces Labor Market Conundrum as Wage Growth Stalls .......................................................................................................... 898
UK - Mark Carney and "Flexible Inflation Targeting" ................................................................................................................................... 899
FED - US ................................................................................................................................................................................................................ 901
CHARTS OF NOTE ......................................................................................................................................................................................... 902
NEW-CHARTS Fed Balance Sheet Trend Changes versus S&P 500 .................................................................................................... 902
NEW-CHARTS Fed May Potentially Hike Rates When Liquidity Conditions Are Negative ..................................................................... 902
NEW-CHARTS Fed Tightening Periods versus US and World GDP Growth .......................................................................................... 903
NEW-CHARTS Federal Reserve Balance Sheet Trend Changes ........................................................................................................... 903
NEW-CHARTS Long Term Rates Fell in the Last Tightening Cycle ........................................................................................................ 904
NEW-CHARTS Markets have been Pricing in a Fed Rate Liftoff Since 2009 ......................................................................................... 904
NEW-CHARTS Long Term Trend of 10Y UST ......................................................................................................................................... 904
NEW-CHARTS Likely Policy Support Levels by the Federal Reserve for a Falling S&P ........................................................................ 905
CHARTS Inflation Expectations versus Fed QE Easing Operations ....................................................................................................... 906
CHARTS Depth of US Treasury Markets Has Declined from Recent Highs ........................................................................................... 906
CHARTS China Dumping US Treasuries as Chinese Forex Reserves Fall ............................................................................................ 907
CHARTS US Defenses Down ................................................................................................................................................................... 908
CHARTS September Rate Hike Forecast History .................................................................................................................................... 909
CHARTS Only One Thing Can Stop the Fed from a September Rate Hike Emerging Market Weakness .......................................... 909
CHARTS Feds QE History versus UST 10 Year Yields .......................................................................................................................... 910
CHARTS Fed Balance Sheet Growth ....................................................................................................................................................... 910
CHARTS June 2015 Fed Rates Hikes Diminish....................................................................................................................................... 910
CHARTS Inflation Expectations 1 Yr, 5010Yr, 5Yr/5Yr ......................................................................................................................... 911
RESEARCH OF NOTE .................................................................................................................................................................................... 912
US MONETARY Why We Have Low Level Equilibria............................................................................................................................ 912
US MONETARY Crashing Inflation Expectations Suggest Imminent Launch Of QE4 ............................................................................. 914
US MONETARY Why Goldman Is Confident the Fed Will Wait To Hike Until December (At Least) ...................................................... 915
US MONETARY Forget Rate Hikes: Bridgewater Says QE4 Is Next; Warns World Is Approaching End of Debt Supercycle .............. 917
US MONETARY What Options Are Saying About A Possible September Rate Hike ............................................................................. 918
US MONETARY The Fed Is Scared To Raise Rates, Ron Paul Warns "Everything Is Too Vulnerable" ................................................ 920
US MONETARY Hilsenrath Warns Fed Is Out Of Ammo, "Policy Makers Resorting To Backup, Backup Plans" .................................. 921
US MONETARY China's Record Dumping Of US Treasuries Leaves Goldman Speechless ................................................................. 923
US MONETARY Fed Goes Looking For Evidence of Broken Treasury Market, Decides Everything Is Fine ......................................... 928
US MONETARY The Fed Is Out Of Options, "QE Is All It Can Do Here" Art Cashin Predicts ................................................................ 933
US MONETARY - Humphrey Hawkins Testimony - Yellen Secures More Flexibility for 'Patient' Fed ....................................................... 933
US MONETARY - Audit the Fed Yellens Testimony ................................................................................................................................ 936
US MONETARY - Criticism by Architect of Japanese Quantitative Easing of Fed Policy .......................................................................... 945
US MONETARY - CAPITAL DISTORTION - Global Acceptance of the Bernankean Theory .................................................................... 948
US MONETARY - FINANCIAL REPRESSION - The Suspension of Price Discovery................................................................................ 951
US MONETARY - The Fed is stuck in a QE Trap ....................................................................................................................................... 954
US MONETARY - 2nd Worst Decade In US Growth in Over 220 Years (And Getting Worse) .................................................................. 956
US MONETARY - Mathematically, The Fed Can Only Fail......................................................................................................................... 958
US MONETARY - QE Standing Between Inflated Equity Markets and A Recession ................................................................................. 964
US MONETARY - QE Programs versus S&P 500 Movements .................................................................................................................. 965
US MONETARY - BAML Warns If The US Economy Does Not Significantly Accelerate Now, It Never Will............................................. 967

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US MONETARY - Debt Increases $1 Trillion in One Year .......................................................................................................................... 969


GLOBAL ABE-NOMICS The Road Ahead ......................................................................................................................................................... 972
CHARTS OF NOTE ......................................................................................................................................................................................... 972
JAPAN Japan Heads Back towards Deflation .......................................................................................................................................... 972
JAPAN The Third Arrow of ABE-Nomics -I ............................................................................................................................................... 973
JAPAN The Third Arrow of ABE-Nomics II ............................................................................................................................................. 974
JAPAN Japanese Households Remain Pessimistic ................................................................................................................................. 975
RESEARCH OF NOTE .................................................................................................................................................................................... 976
GLOBAL ABE-NOMICS - Japan Shocked To Find Abenomics Is Destroying Its Middle Class ................................................................. 976
GLOBAL ABE-NOMICS - "Godfather" Of Abenomics Admits Japanese Policy "Is A Ponzi Game............................................................ 978
GLOBAL ABE-NOMICS Monetary Expansion Extremely Difficult to Stop Once Started ........................................................................ 979
GLOBAL ABE-NOMICS Monetary Policy Below the Event Horizon ................................................................................................... 982
BOJ JAPAN ......................................................................................................................................................................................................... 984
CHARTS OF NOTE ......................................................................................................................................................................................... 984
JAPAN Japans Inflation Pressure Ebbs Away......................................................................................................................................... 984
JAPAN BOJ QE Expansion In Context Debt Monetization ................................................................................................................... 985
JAPAN Japanese Trade Balance ............................................................................................................................................................. 986
JAPAN Japanese Real & Nominal Household Income ............................................................................................................................ 986
JAPAN CPI Shoots To 3.3% Y-o-Y .......................................................................................................................................................... 987
JAPAN Japan Government Investment Fund Asset Reallocation ..................................................................................................... 987
JAPAN Falling Real Rates as Financial Repression Takes Hold ....................................................................................................... 987
JAPAN Real Wages Plummet as Financial Repression Takes Hold ....................................................................................................... 988
RESEARCH OF NOTE .................................................................................................................................................................................... 989
JAPAN - "Godfather" Of Abenomics Admits Japanese Policy "Is A Ponzi Game ...................................................................................... 990
JAPAN - How a Limo Ride With Paul Krugman Changed the Course of Abenomics ................................................................................. 992
JAPAN - Kurodas Former Boss Urges Ditching of BOJ 2% Inflation Target .............................................................................................. 995
JAPAN - No Way Out But to Expand the Monetary Base ........................................................................................................................... 997
JAPAN - BOJ to "Own" 100% Of GDP In 5 Years....................................................................................................................................... 998
JAPAN - Adjusted trade deficit the worst in Bloomberg's 20 year history ................................................................................................. 1001
JAPAN - Some Policies Have Clearly Hit the Limit ................................................................................................................................... 1003
JAPAN - Foreshadows Next Global Crisis ................................................................................................................................................ 1004
JAPAN - Japan's Prime Minister Shinzo Abe prepares to print money for the whole world ..................................................................... 1009
JAPAN - Shinzo Abes Monetary-Policy Delusions ................................................................................................................................... 1010
JAPAN - BOJ Governor Job Suddenly Available in Historical "Abenomics U-Turn" ................................................................................ 1013
JAPAN - Japanese Economic Policy Goes The Full Ponzi ....................................................................................................................... 1014
PBOC CHINA .................................................................................................................................................................................................... 1016
CHARTS OF NOTE ............................................................................................................................................................................................. 1016
NEW-CHARTS Chinese Debt at 282% of GDP in 2014 ........................................................................................................................ 1016
NEW-CHARTS Change in Chinese Bank Assets Since Q4 2008 Compared to Big 4 Central Banks .................................................. 1017
CHARTS Chinas Capital Inflow / Outflow .............................................................................................................................................. 1017
CHARTS Chinas Falling Holdings of US Treasuries ............................................................................................................................. 1019
CHARTS Cumulative % Increases in Pork Since the Start of the Cycle ................................................................................................ 1019
CHARTS Severe Supply of Food Staple - Pork ..................................................................................................................................... 1019
CHARTS Chinese CPI (Minus Pork) ...................................................................................................................................................... 1021
CHARTS Bank Loans in China accelerating at the fastest pace since Financial Crisis. ....................................................................... 1021
CHARTS China Reduces Bank Reserve Ratio ...................................................................................................................................... 1021
CHARTS Speculation Takes Hold of Sky Rocketing Chinese Stock Market ......................................................................................... 1022
CHARTS Falling Chinese Government Revenue Growth ...................................................................................................................... 1024
CHARTS Falling National New Residential Housing Starts ................................................................................................................... 1024
CHARTS China and Asia Residential Property Tracking US Housing Bubble ...................................................................................... 1025
CHARTS Real Chinese Rates versus Cuts ............................................................................................................................................ 1025
RESEARCH OF NOTE .................................................................................................................................................................................. 1026
CHINA MONETARY - Devaluation Stunner: China Has Dumped $100 Billion In Treasuries In The Past Two Week ............................ 1026
CHINA MONETARY - China's Record Dumping Of US Treasuries Leaves Goldman Speechless ......................................................... 1028
CHINA MONETARY - Confusion Reigns At PBoC As Multi-Trillion Yuan Bailout Threatens To Undermine Rate Cuts ......................... 1033
CHINA MONETARY - China's "Animal Spirits" May Call For "Draconian" Measures To Curb Rally, UBS Says .................................... 1039
CHINA MONETARY Is China Beginning to Panic as it Lowers Reserve Ratio ..................................................................................... 1041
CHINA MONETARY - Liquidity evaporates in China as 'fiscal cliff' nears ................................................................................................ 1043
ECB EU ............................................................................................................................................................................................................. 1049
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1049
CHARTS OF NOTE ....................................................................................................................................................................................... 1050
CHARTS EU QE Results An Abject Failure ........................................................................................................................................ 1050
CHARTS Welcome to the EUs NIRP .................................................................................................................................................. 1050
CHARTS Negative Swiss Government Bonds ....................................................................................................................................... 1051
CHARTS Negative Swiss Government Bonds ....................................................................................................................................... 1051
CHARTS UK & German Total Return Indices ........................................................................................................................................ 1052
CHARTS ECBs Dilemma of Digging Up Enough Debt .......................................................................................................................... 1052
CHARTS Nearly $2T European Nonds Trading With Negative Yields .................................................................................................. 1053
CHARTS Total National Debt Germany versus Industrial Country Average (ex-Germany) ............................................................... 1053
CHARTS The Fastest Growing Asset Class NIR Products ................................................................................................................. 1054
CHARTS Euro-Area Output Still Slightly Below Pre-Crisis Levels ......................................................................................................... 1055
CHARTS 5 Year Inflation Swaps Suggests Deflation in the EU ............................................................................................................ 1056
CHARTS Euro-Area Inflation Rate on the Decline Since 2011 .............................................................................................................. 1056
CHARTS Euro-Area Inflation Expectations Decline ............................................................................................................................... 1057
CHARTS Euro-Area Private Sector Loan Creation ................................................................................................................................ 1058

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CHARTS Euro-Area Money Supply, Private Sector Lending Growth .................................................................................................... 1058
CHARTS Euro-Area 10 Yr Sovereign Bond Yields ................................................................................................................................ 1059
CHARTS Slovenia May BE the Next EU Debt Hotspot .......................................................................................................................... 1059
CHARTS Spain & Portugal NPL ............................................................................................................................................................. 1060
CHARTS ECBs Turn to Expand Its Balance Sheet ............................................................................................................................... 1061
CHARTS ECBs Balance Sheet Contracted Y-o-Y ............................................................................................................................. 1061
CHARTS Expect Major ECB Policy Announcement in Q2 2014 ............................................................................................................ 1062
CHARTS ECB Set to Stay on Hold as Inflation Seen Lower ................................................................................................................. 1063
RESEARCH OF NOTE .................................................................................................................................................................................. 1064
EU MONETARY - Draghi Failed: European Inflation Expectations Slide To Pre-QE Level ..................................................................... 1065
EU MONETARY - NIRP Is A Flawed Economic Concept ......................................................................................................................... 1066
EU MONETARY - NIRP ............................................................................................................................................................................. 1068
EU MONETARY NIRP - Yield scarce as the world turns negative ........................................................................................................ 1072
EU MONETARY - Draghi Key Statements ................................................................................................................................................ 1075
EU MONETARY - Draghi throws ECB door open to money printing as global prospects dim ................................................................. 1076
EU MONETARY - Economic Recovery Too Weak for ECB to Avoid New Action .................................................................................... 1078
EU MONETARY - Euro-Area Data Deterioration Points toward QE ......................................................................................................... 1080
EU MONETARY - EU Version of QE Coming -> UST Purchases To Drive Euro Down .......................................................................... 1082
MACRO MONETARY INFLATION ................................................................................................................................................................... 1084
CHARTS OF NOTE ............................................................................................................................................................................................. 1084
NEW-CHARTS US 5Y5Y Forward Swap ................................................................................................................................................... 1084
CHARTS The Fall of Hyperinflation & the Rise of Deflation ...................................................................................................................... 1084
CHARTS Falling US Consumer Price Index .............................................................................................................................................. 1085
CHARTS Global Consumer Prices are Rising Significantly ....................................................................................................................... 1086
CHARTS Global Country Inflation Rates ................................................................................................................................................ 1086
CHARTS Two Worlds if Inflation EM and DM ..................................................................................................................................... 1086
CHARTS Developed Country Inflation Rates ......................................................................................................................................... 1088
RESEARCH OF NOTE .................................................................................................................................................................................. 1089
INFLATION Martin Armstrongs Explanation of Monetary Inflation ........................................................................................................ 1089
INFLATION - Asset & Property inflation means shops have to pay higher rents with higher product prices ........................................... 1091

GEO-ECONOMIC INSTABILITIES......................................................................................................................................... 1093


GEO-ECONOMIC INDEX .................................................................................................................................................................................... 1093
GEO-ECONOMICS OF ENERGY & PETRO$ - Petro$$ Coming Unglued ........................................................................................................ 1094
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1094
CHARTS OF NOTE ....................................................................................................................................................................................... 1097
NEW-ENERGY Islamic versus Qatar-Turkey Pipeline ........................................................................................................................... 1097
NEW-ENERGY Sunni versus Shiite In the Middle East ......................................................................................................................... 1098
NEW-ENERGY The Iranian Encirclement Strategy ............................................................................................................................. 1098
NEW-ENERGY Drowning in Oil Over Supply ......................................................................................................................................... 1100
NEW-ENERGY Rig Count Down But Not Production ............................................................................................................................ 1100
ENERGY Saudi Crude Oil Production & Brent Price ............................................................................................................................. 1102
ENERGY World Liquids Percent of Production ...................................................................................................................................... 1102
ENERGY Interest Rates & Oil Prices in 2015 Dollars ............................................................................................................................ 1102
ENERGY Oil Production and CAPEX by Operating Environment 2014 ................................................................................................ 1103
ENERGY Global Drilling Intensity Will Increase ..................................................................................................................................... 1103
ENERGY Most US shale play costs are below $80 a barrel Challenged when approaching $60 .................................................... 1104
ENERGY Breakeven for All Global Oil Projects ..................................................................................................................................... 1105
ENERGY Putin Cancels South Stream through Bulgaria To Go Through Turkey .............................................................................. 1106
ENERGY Putin Cancels South Stream through Bulgaria To Go Through Turkey .............................................................................. 1107
ENERGY Petro$$ Capital Exports Go Negative for First Time in 18 Years .......................................................................................... 1108
ENERGY Falling Inflation Adjusted Gasoline Prices .............................................................................................................................. 1109
ENERGY US v Saudi Oil Production now Equal at near 12B bl/Day ..................................................................................................... 1110
ENERGY US Shale Oil Breakeven Prices .............................................................................................................................................. 1112
ENERGY OPEC Announcement Crushes Ruble & WTI Crude ............................................................................................................. 1112
ENERGY USDRUB Rise Means Russian Loans in US$ In Big Trouble- Investment Collapse ............................................................ 1113
ENERGY EM Oil Producers Being Crushed .......................................................................................................................................... 1113
ENERGY Market Cap Impacts of OPEC Decision ................................................................................................................................. 1114
ENERGY Oil Supply / Demand and Price .............................................................................................................................................. 1115
RESEARCH OF NOTE .................................................................................................................................................................................. 1116
NEW-SAUDI-IRAN-Iran, Saudi Arabia "Clash" Over Syria At "Secret", Closed-Door Meeting In Davos ............................................. 1116
NEW-SAUDI-IRAN- Another Petro-State Throws In The Towel: The Last Nail In The Petrodollar Coffin ........................................... 1118
NEW-SAUDI-IRAN- Mainstream Media Finally Admits Syrian Conflict Is US-Russia Proxy War ......................................... 1120
NEW-SAUDI-IRAN- Russia and Iran Moving To Corner The Mideast Oil Supply ................................................................................ 1125
NEW-SAUDI-IRAN- Migrant Crisis & Syria War Fueled By Competing Gas Pipelines ............................................................ 1128
RUSSIA- Putin Kills "South Stream" Pipeline, Will Build New Massive Pipeline To Turkey Instead .................................................... 1133
RUSSIA- OPEC Presents: QE4 And Deflation ...................................................................................................................................... 1136
RUSSIA Energy War ........................................................................................................................................................................... 1138
PETRODOLLAR The Saudis And US Collusion Behind the Falling Oil Prices ....................................................................... 1141
PETRODOLLAR Who Is Saudi Arabia Really Targeting In Its Price War? ............................................................................ 1145
PETRODOLLAR "There Will Be Blood": Petrodollar Death Ignites Liquidity And Oil-Exporting Crisis ........................... 1150
PETRODOLLAR Collapsing PetroDollar Foundation ......................................................................................................................... 1156
UKRAINE - Pulled between EU v Russia .............................................................................................................................................. 1160
UKRAINE - Pulled between An Ethnic Eastern and Western Ukraine .................................................................................................. 1160
UKRAINE - Pulled between Economic Inequality Factors ..................................................................................................................... 1161

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UKRAINE - Pulled between the Global Military Balance ....................................................................................................................... 1162


UKRAINE - Pulled by Global Financial Markets .................................................................................................................................... 1163
UKRAINE - A Deep State Analysis ........................................................................................................................................................ 1166
ENERGY China Uses Crude Drop to Build Strategic Oil Reserve ..................................................................................................... 1170
ENERGY - The Shale Bust Arrives: November Permits For New Shale Wells Tumble 15% ............................................................... 1171
ENERGY - Crude Crash Slams Venezuelan Bonds To Close At 5-Year Lows: 21% Yield .................................................... 1172
ENERGY - The Oil Price Decline ........................................................................................................................................................... 1174
ENERGY - The Oil-Drenched Black Swan, Part 2................................................................................................................................. 1181
ENERGY - The Oil-Drenched Black Swan, Part 1 ......................................................................................................................... 1183
ENERGY - OPEC Presents: QE4 and Deflation .................................................................................................................................... 1186
ENERGY - The Sellside Chimes In On The Crude Crush: "This Will Reverberate For Years" ............................................. 1191
ENERGY - OPEC Decision "Major Strike Against", Russian Tycoon Says Shale Oil Doesnt Work < $80bl ................................... 1192
ENERGY - Energy Quakes as OPEC Stands Pat ................................................................................................................................. 1194
ENERGY - World's Largest Rig Operator, The "Recovery" Is Now Worse Than The Post-Lehman Crash ......................................... 1197
ENERGY - US "Secret" Deal with Saudis Backfires After Oil Minister Says US Should Cut First ....................................................... 1200
ENERGY - The 2014 Oil Price Crash Explained ............................................................................................................................. 1204
ENERGY - Crude and Credit Warn Of The Elongated Cycle Double Peak ............................................................................... 1209
ENERGY - Major Inflection Point Coming Near-Term In Energy Prices ............................................................................................... 1216
ENERGY - Russia Prepares Mega-Deal with India after Locking Up China With "Holy Grail" Gas Deal ............................................. 1219
ENERGY - Putin Prepares To Announce "Holy Grail" Gas Deal With China ........................................................................................ 1221
ENERGY - The Growing Rift with Saudi Arabia Threatens To Severely Damage the Petrodollar ....................................................... 1223
EMERGING & FRONTIER MARKETS - Emerging Markets Growth, Credit & Forex Problems - Fx Plummet ................................................ 1228
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1228
CHARTS OF NOTE ....................................................................................................................................................................................... 1232
NEW-CHARTS MSCI Emerging Markets Start to Year % - Worst Ever ................................................................................................ 1232
NEW-CHARTS FX markets are collapsing as traders are betting policy makers will not continue defending exchange rates ............ 1232
NEW-CHARTS Premium investors demand to hold EM debt over U.S. Treasuries widened to 481 .................................................... 1233
NEW-CHARTS Capital Controls Arrive In Emerging Markets China & Azerbiajan ............................................................................ 1233
NEW-CHARTS EM Credit Outstanding in US Dollars Increased $17.7T Since 2006 ........................................................................... 1234
NEW-CHARTS EM Credit Has Expanded Dramatically Compared to Developed Markets .................................................................. 1235
CHARTS Emerging Market 10 Year Shift in Share of World GDP 2004 to 2014 ............................................................................... 1236
CHARTS Emerging Market Fx in Freefall ............................................................................................................................................... 1236
CHARTS Total Economy Debt as a % of GDP India, Poland, Ireland and Spain .............................................................................. 1236
CHARTS Global FX Reserves 2000 versus 2005 versus 2015 .......................................................................................................... 1237
CHARTS GDP per Capita Income .......................................................................................................................................................... 1238
CHARTS EMERGING ASIA (Values) Annual % Change, 1966 to May 2015 .................................................................................... 1239
CHARTS Brazil in or Near a Serious Recession .................................................................................................................................... 1239
CHARTS Collapsing Currencies in Columbia and Chile ......................................................................................................................... 1240
CHARTS The Unwind of EM Credit, Chinas Leverage and US Monetary Easing ................................................................................ 1241
CHARTS The Tale of Two Economies Chile versus Portugal ............................................................................................................ 1242
CHARTS Emerging & Developed Economy Growth Rates Converge ................................................................................................... 1243
CHARTS Emerging Market Currency Sell-Off ........................................................................................................................................ 1243
CHARTS Emerging Markets Stocks versus Developed Market Stocks ................................................................................................. 1244
CHARTS Investors Are Pulling Money From Developing Markets ........................................................................................................ 1245
CHARTS Valuation of EM Stocks is Falling Against Developed Markets .............................................................................................. 1245
CHARTS EM Capital Outflows Surge Towards $1T .............................................................................................................................. 1246
CHARTS Developing Nation Currencies Plunge After Chinas Devaluation Rattles Markets ............................................................... 1246
CHARTS Emerging Markets Facing Both Capital Out Flows and Falling Currencies ........................................................................... 1248
CHARTS Wide Spread Emerging Market Capital Out Flows ................................................................................................................. 1249
CHARTS Emerging Market Debt versus GDP - 2013 ............................................................................................................................ 1250
CHARTS Emerging Market Resilience Indicator Changes .................................................................................................................... 1250
CHARTS BRIC Countries Responsible for 43% of Global Growth ........................................................................................................ 1251
CHARTS BRIC & Emerging Market Inflation Rates ............................................................................................................................... 1251
CHARTS Emerging Market Default Probability ...................................................................................................................................... 1252
CHARTS Emerging Market versus Developed Market Public Debt and External Borrowing Positions ................................................ 1252
CHARTS Emerging Market Outflows...................................................................................................................................................... 1253
CHARTS Emerging Market Outflows -2 ................................................................................................................................................. 1253
CHARTS Developed versus Emerging Equity Markets 1990-2014 .................................................................................................... 1254
CHARTS Total GEM Flows..................................................................................................................................................................... 1254
CHARTS The Emerging Markets Have Been Weakening Since 2011 .................................................................................................. 1255
RESEARCH OF NOTE .................................................................................................................................................................................. 1256
NEW-EMERGING MARKETS - Emerging Markets Running Scared with Capital Controls ..................................................................... 1256
NEW-EMERGING MARKETS - For Emerging Markets, It Is Now Worse Than the Asian Financial Crisis ............................................. 1257
NEW-EMERGING MARKETS - Be Very Afraid: "The 3 EM Debacles" Loom, HSBC Warns .................................................................. 1260
EMERGING MARKETS - Emerging Market Currencies To Crash 30-50%, Jen Says ............................................................................. 1263
EMERGING MARKETS - Emerging Market Mayhem: Gross Warns Of "Debacle" As Currencies, Bonds Collapse .............................. 1265
EMERGING MARKETS - Emerging markets: Redrawing the world map ................................................................................................. 1271
EMERGING MARKETS - Lost Decade in Emerging Markets: Investors Already Halfway There ............................................................ 1278
EMERGING MARKETS - JP Morgan Has A "Problem" With Emerging Markets ..................................................................................... 1283
EMERGING MARKETS - Which Emerging Markets Are Most Vulnerable To "External Shock" .............................................................. 1286
EMERGING MARKETS - Emerging markets: The great unraveling ......................................................................................................... 1288
EMERGING MARKETS - Moodys warns on EM dollar finance costs ...................................................................................................... 1293
EMERGING MARKETS - Fragile Five: The new focus of currency wars ............................................................................................. 1294
EMERGING MARKETS - Crisis Redux? ................................................................................................................................................... 1295
EMERGING MARKETS - Losing Their Punch ....................................................................................................................................... 1300
EMERGING MARKETS - Risk-On!........................................................................................................................................................... 1302

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EMERGING MARKETS - Asia, BRIC, Emerging Markets Crater IBM Earnings .................................................................................. 1303
EMERGING MARKETS - Crisis Temporarily Halted .............................................................................................................................. 1305
EMERGING MARKETS - Increasing Liquidity Problems In Selected Markets .................................................................................. 1306
EMERGING MARKETS - The plight of four Asian countries - China, India, Indonesia and Japan. ................................................. 1312
EMERGING MARKETS - The Impact of "TAPER" ................................................................................................................................. 1317
EMERGING MARKETS - EM Crisis will make the 1997 Asian Crisis Seem like an Early Warning ................................................... 1321
EMERGING MARKETS - Global Deleveraging Accelerating and Developing Nations Feeling the Pain ........................................ 1324
CHINAs CREDIT GROWTH Reverses Direction ............................................................................................................................................. 1327
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1327
CHARTS OF NOTE ....................................................................................................................................................................................... 1328
NEW-CHINA LIQUIDITY Chinese Reserves Have Fallen Steadily Since the Completion of US TAPER ............................................ 1328
NEW-CHINA LIQUIDITY Chinese Reserve Total and Monthly Change ................................................................................................ 1328
CHINA LIQUIDITY Chinese Bank Asset Growth Dwarfs Developed Economies Central Banks .......................................................... 1329
CHINA LIQUIDITY Chinas Official GDP Growth Rate Continues to Fall .............................................................................................. 1331
CHINA LIQUIDITY Chinas Deleveraging ............................................................................................................................................... 1331
CHINA LIQUIDITY Chinas Inflation Rate versus Real Interest Rate .................................................................................................... 1332
CHINA LIQUIDITY Bank Loan Growth ................................................................................................................................................... 1332
CHINA LIQUIDITY Policy Rate, RRR and Loan Growth ........................................................................................................................ 1333
CHINA LIQUIDITY Declining Private Sector Fixed Asset Investment ................................................................................................... 1333
CHINA LIQUIDITY - Third of Chinese GDP Now Goes to Repay Interest and Principle on Existing Loans ............................................ 1334
CHINA LIQUIDITY Infrastructure Investment Offsets Weak Real Estate .............................................................................................. 1335
CHINA LIQUIDITY Shadow Banks Step Back Into Light ....................................................................................................................... 1335
CHINA LIQUIDITY Hopes that Credit Growth Will Spur Property Sales ................................................................................................ 1336
CHINA LIQUIDITY Transport, Construction Data Point to Slower Growth ............................................................................................ 1336
CHINA LIQUIDITY Little Impetus for Turnaround in Investor Sentiment ............................................................................................... 1337
CHINA LIQUIDITY Industrial Output & Exports Continue to Trend the Wrong Way ............................................................................. 1338
CHINA LIQUIDITY GDP Growth Trend .................................................................................................................................................. 1338
RESEARCH OF NOTE .................................................................................................................................................................................. 1340
NEW-CHINA LIQUIDITY - PBOC Injects Massive $60 Billion Liquidity - Most In 3 Years; China Stocks, Yuan Drop ............................ 1340
NEW-CHINA LIQUIDITY - "China 2016 Is US 2008" Felix Zulauf Warns "The Outcome of A Major Yuan Devaluation Would Be
Disastrous" ................................................................................................................................................................................................. 1342
NEW-CHINA LIQUIDITY - Pressures on the Yuan Held in Check by Reserve Currency Depletion ........................................................ 1346
CHINA LIQUIDITY - Hugh Hendry - Why China's Biggest Bear, Became One Of Its Biggest Bulls ........................................................ 1348
CHINA LIQUIDITY - Three Reasons China May Cut the Reserve Requirement Ratio ............................................................................ 1352
CHINA LIQUIDITY - Reverses Direction and Begins Easing .................................................................................................................... 1354
CHINA LIQUIDITY - One Rate Cut Probably Not Sufficient to Sustain China's Growth ........................................................................... 1355
CHINA LIQUIDITY - Troubling Signs of Deflation in China ....................................................................................................................... 1356
CHINA LIQUIDITY - The Next Phase of Chinas Financial Deepening .................................................................................................... 1358
CHINA LIQUIDITY - Steady decline in private sector activity ................................................................................................................... 1359
CHINA LIQUIDITY - China Credit Risk Overshadows Outlook for Emerging Equities ............................................................................. 1360
CHINA LIQUIDITY - Easy Money Wont Solve Chinas Hard Problems .............................................................................................. 1363
CHINA LIQUIDITY - Housing Bubble Restricting PBOC Actions ........................................................................................................ 1365
CHINA LIQUIDITY - PBOC Squeezing Banks towards Reducing Speculative Risk .......................................................................... 1368
CHINA LIQUIDITY - Overnight Repo at 25% .......................................................................................................................................... 1369
CHINA LIQUIDITY - Red Flags ................................................................................................................................................................. 1370
CHINA LIQUIDITY - Credit Fueled Growth ............................................................................................................................................... 1373
CHINA LIQUIDITY - Shadow Banking System Showing Signs of Implosion ..................................................................................... 1378
CHINA LIQUIDITY - PBOC Wants to Hold the Line on Explosive Credit Expansion through A Liquidity Squeeze ...................... 1381
CHINA LIQUIDITY - Potentially De-Stabilizing Cash Crunch ............................................................................................................... 1383
CHINA LIQUIDITY - Chinese Liquidity Pump Unplugged .................................................................................................................... 1384
CURRENCY WARS BACK ON Rate Wars Reversed With Un-Taper ............................................................................................................. 1386
CHARTS OF NOTE ....................................................................................................................................................................................... 1386
NEW-CURRENCY WARS Falling US$ PEGS of Oil Exporter Nations ................................................................................................. 1386
RESEARCH OF NOTE .................................................................................................................................................................................. 1386
NEW-CURRENCY WARS - Square Holes and Currency Pegs ................................................................................................................ 1386
NEW-CURRENCY WARS - Pegs under pressure - Currency pegs are still in fashion, but some are creaking ...................................... 1390
NEW-CURRENCY WARS - Another Petro-State Throws In the Towel: The Last Nail In The Petrodollar Coffin .................................... 1393
NEW-CURRENCY WARS - A Currency War That Few Economists And Analysts Notice, Much Less Understand ............................... 1394
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1398
CURRENCY WARS - A Major Shift............................................................................................................................................................... 1398
BATTLEFIELD - Combatants & Belligerents ................................................................................................................................................. 1403
BATTLEFIIELD - The Race to Debase ......................................................................................................................................................... 1404
JAPAN - The Destabilizing Agent .................................................................................................................................................................. 1406
EUROPE - Euro Exposed .............................................................................................................................................................................. 1406
ARGENTINA - Here we Go Again! ................................................................................................................................................................ 1408
VENEZUELLA - Bad Situation ....................................................................................................................................................................... 1409
BRAZIL - No One Wants to Listen ................................................................................................................................................................. 1409
SWITZERLAND - No Choice ......................................................................................................................................................................... 1409
SINGAPORE - Hot Money ............................................................................................................................................................................. 1410
UK- Pound Joins War .................................................................................................................................................................................... 1411
PRIOR REPORT UPDATES & EDITIONS .......................................................................................................................................................... 1412
US$ RESERVE STATUS & ERODING INFLUENCE.......................................................................................................................................... 1412
RESEARCH WE FOLLOWED DE=DOLLARIZATION ............................................................................................................................ 1412
CHARTS OF NOTE ....................................................................................................................................................................................... 1416
DE-DOLLARIZATION - Countries that have joined the China-led Asian Infrastructure Investment Bank ............................................... 1416

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DE-DOLLARIZATION - AIIBs Founding Members ................................................................................................................................... 1416


DE-DOLLARIZATION - Asias Infrastructure Legs & the AIIBs Expected Capital Structure ................................................................... 1417
DE-DOLLARIZATION - AIIB Infrastructure Investment ............................................................................................................................. 1418
DE-DOLLARIZATION - The Rise & Fall of Modern Empires .................................................................................................................... 1418
RESEARCH OF NOTE .................................................................................................................................................................................. 1420
DE-DOLLARIZATION - U.S. Looks to Work with China-Led Infrastructure Fund..................................................................................... 1420
DE-DOLLARIZATION - US Hegemony, Dollar Dominance Are Officially Dead ....................................................................................... 1424
DE-DOLLARIZATION - The BRICS New Development Bank (NDB) with its Own SDRs Is Coming ....................................................... 1426
DE-DOLLARIZATION - China Takes Aim At Dollar Reserve Status: Promotes Yuan In Investment Bank ............................................. 1428
DE-DOLLARIZATION - Kazakhstan Authorities Announce Plans To De-Dollarize Economy .................................................................. 1430
DE-DOLLARIZATION - China to urge firms to sell bonds overseas to fund new Silk Road to Europe .................................................... 1432
DE-DOLLARIZATION - Is This The Most Important Chart For The Future Of The World's Reserve Currency? ..................................... 1432
DE-DOLLARIZATION - Is Russia Planning A Gold-Based Currency? ..................................................................................................... 1436
DE-DOLLARIZATION - De-Dollarization Accelerates: Russia Launches SWIFT-Alternative Linking 91 Entities .................................... 1438
DE-DOLLARIZATION - What if China, Russia Succeed in Going off the Dollar?..................................................................................... 1439
RESERVE CURRENCY - Asian Infrastructure Investment bank challenges U.S. supremacy ................................................................ 1440
RESERVE CURRENCY - March the moment the US lost its role as the underwriter of the global economic system.......................... 1442
RESERVE CURRENCY - - It just happened: The moment the United States lost its role . . . ............................................................... 1444
RESERVE CURRENCY - The World Is Beginning To Bypass America's Financial & Legally-Leveraged Political Power ..................... 1445
RESERVE CURRENCY - Putin Adviser Proposes "Anti-Dollar Alliance ................................................................................................. 1446
RESERVE CURRENCY - Chinese, Swiss Central Banks Sign Bilateral Swap Agreement ..................................................................... 1447
RESERVE CURRENCY - France, Brazil, India & Now South Korea Join Russia & China In Post-Dollar World Order .......................... 1448
RESERVE CURRENCY - Frances Noyer Says BNP May Prompt Shift Away From Dollar .................................................................... 1451
RESERVE CURRENCY - More Russian Companies Set To Drop Dollar, Switch To Chinese Yuan ...................................................... 1452
RESERVE CURRENCY - Russia, China sign deal to bypass U.S. dollar ................................................................................................ 1454
RESERVE CURRENCY - Japan May Eclipse China Again, as Largest Holder of US Treasuries .................................................... 1455
GOLD WARS Failing Developed Economies versus Rising Emerging Economies......................................................................................... 1457
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1457
CHARTS OF NOTE ....................................................................................................................................................................................... 1459
GOLD WARS Plummeting Gold Holdings at NY Fed from Foreign Repatriation .................................................................................. 1459
GOLD WARS Gold : Debt Ratio Correlation Something Seriously Amiss! ......................................................................................... 1459
GOLD WARS Nominal & Real Price of Gold 1790-2013 .................................................................................................................... 1461
GOLD WARS Gold v S&P 500 Against True Austrian Money Supply ................................................................................................... 1461
GOLD WARS Swiss National Bank Gold, FX & Total Assets ................................................................................................................ 1462
GOLD WARS Sovereign Gold Holdings According to the World Gold Council ..................................................................................... 1462
GOLD WARS European Countries Gold Reserves Repatriation ........................................................................................................... 1463
RESEARCH OF NOTE .................................................................................................................................................................................. 1465
GOLD WARS - Federal Reserve Confirms Biggest Foreign Gold Withdrawal in Over Ten Years ........................................................... 1465
GOLD WARS - European Nations Repatriate Gold Reserves from United States Vaults ....................................................................... 1466
GOLD WARS - Gold Shortage, Worst in 21st Century, And India Just Made It Worse ............................................................................ 1469
GOLD WARS - Deutsche Bank's Modest Proposal To Central Banks: "Purchase The Gold Held By Private Households" ................... 1471
INTERNATIONAL BANKING & SHADOW BANKING ......................................................................................................................................... 1473
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1475
DEBT Growth of Financial Services ....................................................................................................................................................... 1476
DEBT REITS & CMBS Growth ............................................................................................................................................................... 1476
DEBT - GLOBAL DEBT 313% of GDP...................................................................................................................................................... 1478
DEBT - 202M GLOBALLY UNEMPLOYED DEBTORS ............................................................................................................................ 1480
FOOD PRICES & SHORTAGES Potential Disruption...................................................................................................................................... 1481
RESEARCH WE FOLLOWED ............................................................................................................................................................................. 1481
CHARTS OF NOTE ....................................................................................................................................................................................... 1482
CHARTS Cost of Thanksgiving Food ..................................................................................................................................................... 1482
CHARTS Consumer Price Increases Predominately Food in Emerging Economies ............................................................................ 1482
CHARTS Sticker Shock in Isle 1 ............................................................................................................................................................. 1483
CHARTS Food Importers ........................................................................................................................................................................ 1483
CHARTS US Beef Production To Reach 5 Years of Decline ................................................................................................................. 1484
CHARTS US CPI Turns Up on Food & Energy ...................................................................................................................................... 1485
CHARTS CRB US Spot Foodstuff Index One Year ............................................................................................................................ 1485
CHARTS CRB Food Index One Year .................................................................................................................................................. 1487
CHARTS Global Food Price Change 2007-2013 ................................................................................................................................... 1488
CHARTS Food Prices Spiking Up .......................................................................................................................................................... 1489
CHARTS Food Prices Spiking Up .......................................................................................................................................................... 1490
CHARTS Retail Food Services and Drinking Place Sales ..................................................................................................................... 1490
CHARTS Retail CRE Price/ Cost Pressures .......................................................................................................................................... 1492
CHARTS Retail CRE Price/ Cost Pressures - 2 ..................................................................................................................................... 1493
CHARTS Spiking Beef Prices ................................................................................................................................................................. 1494
CHARTS Coffee Futures ........................................................................................................................................................................ 1494
CHARTS Lean Hog Futures ................................................................................................................................................................... 1495
CHARTS Ukraine Corn and Wheat Prices Up 15% Since YB ............................................................................................................ 1495
CHARTS Global Food Imports versus % Y-o-Y US$ Change ............................................................................................................... 1496
CHARTS UK Food Retailers v Commodity Food Price Index ................................................................................................................ 1496
RESEARCH OF NOTE .................................................................................................................................................................................. 1497
FOOD INFLATION - Food Prices Surge as Drought Exacts a High Toll on Crops .................................................................................. 1497
FOOD INFLATION - Food Prices, Driver of Social Unrest ..................................................................................................................... 1500
FOOD INFLATION - Food Price Manipulation in Thailand........................................................................................................................ 1501
CYBER WARS Growing Threat & the Security-Surveillance Complex ............................................................................................................ 1503

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RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1503


SECURITY-SURVEILLANCE COMPLEX - NSA Whistleblower Example: Booz Hamilton ..................................................................... 1506
SECURITY SURVEILLANCE COMPLEX - Growing Without Public Control or Supervision! ............................................................... 1509
CYBER SPYING ............................................................................................................................................................................................ 1510

REGIONAL ........................................................................................................................................... 1511


EU ONCE UNORTHODOX NEGATIVE RATES NOW INCREASINGLY ORTHODOX!........................................................ 1512
EU......................................................................................................................................................................................................................... 1512
CHARTS OF NOTE ....................................................................................................................................................................................... 1515
NEW-CHARTS Negative Interest Rates on 40% of Outstanding European Government Bonds ......................................................... 1515
NEW-CHARTS Once Unorthodox Negative Rates Now Increasingly Orthodox ................................................................................... 1515
NEW-CHARTS EU Savings Rates Surge in Countries With NIRP ........................................................................................................ 1516
NEW-CHARTS 1 Million Syrian Refugee Arrivals By Land & Sea in 2015 ............................................................................................ 1516
NEW-CHARTS Main Migrant Route to Germany ................................................................................................................................... 1517
NEW-CHARTS Alternative Migrant Route to Europe ............................................................................................................................. 1518
CHARTS Many Migrant Routes Being Taken ........................................................................................................................................ 1519
CHARTS Many Migrant Routes Being Taken- Air, Land and Sea ......................................................................................................... 1520
CHARTS Migrants Entering Hungary ..................................................................................................................................................... 1521
CHARTS Schengen Non Shengen EU Countries ............................................................................................................................... 1522
CHARTS Schengen Non Shengen EU Countries-2 ............................................................................................................................ 1522
CHARTS Migrant Detentions .................................................................................................................................................................. 1523
CHARTS German Asylum Applications ............................................................................................................................................... 1524
CHARTS Euro Area and EU28 Unemployment Rates ........................................................................................................................... 1525
CHARTS Unemployment Rates by Country Seasonally Adjusted ...................................................................................................... 1526
CHARTS Inflation Tracks Commodity Prices .......................................................................................................................................... 1526
CHARTS Tracing EU Dis-Inflation towards Deflation .............................................................................................................................. 1527
CHARTS Bond Rout Reduces Negative Yielding Govt Debt by ~1T Euros ......................................................................................... 1529
CHARTS Eurozone GDP Since 1999 ..................................................................................................................................................... 1529
CHARTS "Real GDP in the Euro area is lagging behind other major economies since the...Crisis" .................................................... 1530
CHARTS "European firms are paying out more of their earnings as dividends than US firms are." ..................................................... 1531
CHARTS "Over 1/2 of all government bonds yield less than 1%." ......................................................................................................... 1532
CHARTS A weaker Euro has been good for the STOXX 600 ................................................................................................................ 1533
CHARTS Eurozone equity inflows continue to rise ................................................................................................................................ 1534
CHARTS YTD flows into European equity funds ................................................................................................................................... 1534
CHARTS 3 Mo EURIBOR Drops to -0.001% - Below Zero for First Time? ........................................................................................... 1534
CHARTS Negative Yields Have Become the New Norm in the Euro area .......................................................................................... 1535
CHARTS "Swiss Government Becomes First Ever To Issue 10Y Debt At A Negative Yield" ............................................................... 1535
CHARTS Feb Retail Sales Y-o-Y +3.0% versus 2.8% est. .................................................................................................................... 1536
CHARTS Draghi Had To Deliver or it would have been a Collateral Massacre..................................................................................... 1536
CHARTS EU Disconnect Between Equity Prices & Earnings and Dividends ........................................................................................ 1537
CHARTS Eurozone is the Biggest Drag on Global Profits ..................................................................................................................... 1537
CHARTS Eurozone Government & Private Debt 276% of GDP (Excluding Financials) ....................................................................... 1538
CHARTS EU PMIS Rolling Over ............................................................................................................................................................ 1539
CHARTS Eurozone Banks Too Big To Be Bailed Out! .......................................................................................................................... 1540
CHARTS Eurozone Area Consumer Confidence May Be Misleading ................................................................................................... 1541
CHARTS Eurozone GDP & Recession Pattern ...................................................................................................................................... 1541
CHARTS EU-Area PMI Shows Sustained Deterioration ........................................................................................................................ 1542
CHARTS Euro Area CPI Seen Below 1% for 11th Month ....................................................................................................................... 1542
CHARTS Euro Area Domestic Demand has lagged US & Japan by 9% since 2010 ............................................................................ 1543
CHARTS Euro Area Inflation Levels ....................................................................................................................................................... 1544
CHARTS Geo-Political Tensions May Weigh on Confidence ................................................................................................................ 1545
CHARTS Stalling Euro-Area Recovery Heightens ECB QE Pressure ................................................................................................... 1545
CHARTS Industrial Production Slows In Line With PMIs ....................................................................................................................... 1546
CHARTS ZEW Expectations Signals Slowdown Ahead ........................................................................................................................ 1547
CHARTS Euro-Area July PMI ................................................................................................................................................................. 1547
CHARTS Corporate Borrowing Spreads Remain Wide ......................................................................................................................... 1548
CHARTS ECB Less Accommodative Than the Fed ............................................................................................................................... 1548
CHARTS EU Financial Conditions Deteriorating .................................................................................................................................... 1549
CHARTS EU Confidence ........................................................................................................................................................................ 1550
CHARTS - Slow Money Growth May Stoke Deflation Concerns .............................................................................................................. 1551
CHARTS - Euro-Area Inflation at Lowest Level Since 2009 Individual Countries ................................................................................. 1552
CHARTS - Euro-Area Inflation Aggregate .............................................................................................................................................. 1552
CHARTS - 10M Part-Time Workers Underemployed in EU ...................................................................................................................... 1553
CHARTS - Euro-Area Housing Prices Decline .......................................................................................................................................... 1554
CHARTS - Euro-Area Trade Surplus ......................................................................................................................................................... 1555
CHARTS - Euro-Area Composite PMI ....................................................................................................................................................... 1556
CHARTS - EU Area Weakness ................................................................................................................................................................. 1557
CHARTS - EU Area GDP ........................................................................................................................................................................... 1558
CHARTS - EU Area PMI ............................................................................................................................................................................ 1559
CHARTS - EU Area PMI ............................................................................................................................................................................ 1560
CHARTS - EU Real Rates ......................................................................................................................................................................... 1561
CHARTS - EU -NON Euro Members GDP RELIANCE ............................................................................................................................. 1562
CHARTS - EU GLOBAL GDP GROWTH CONTRIBUTION ..................................................................................................................... 1563
CHARTS - EU PMI ..................................................................................................................................................................................... 1563
CHARTS - EU CPI ..................................................................................................................................................................................... 1565

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CHARTS - Regional Risk-Reward ............................................................................................................................................................. 1566


CHARTS - Europe's "Core" Problem is France .................................................................................................................................... 1567
CHARTS - Germany's Preoccupation with Inflation is More Than It Would Seem ........................................................................... 1570
CHARTS - Evidence OF Global Slowing Now Indisputable ................................................................................................................. 1571
CHARTS - EU Credit Downgrades, France and UK On Tap ................................................................................................................... 1573
CHARTS - Perceived Reduction in Risk, A Temporary Aberration ........................................................................................................... 1575
CHARTS - Dangerous Delusional Divergences .................................................................................................................................... 1577
CHARTS - IMF Projections for Euro Area and GIIPS ............................................................................................................................... 1578
CHARTS - Air Cargo Shipments Confirm Slowing Global Growth ............................................................................................................ 1579
CHARTS - Eurozone Misery Indices Never Been Higher ..................................................................................................................... 1580
CHARTS - Euro Currency .......................................................................................................................................................................... 1582
RESEARCH OF NOTE .................................................................................................................................................................................. 1588
RESEARCH Migrant Crisis Sparks Balkan Border Battles As EU Buckles Under Overwhelming Refugee Flow ................................ 1588
RESEARCH Buiter: Migrant Crisis "May Signal The Beginning Of The End" For EU ........................................................................... 1592
RESEARCH "The End of The EU": Merkel's "Heroic" Refugee Response May Destroy Union, Slovakia Warns ................................ 1593
RESEARCH Europe's Refugee Crisis "Out of Control", Hungary PM Rages "This Is A German Problem, Not An EU Problem" ....... 1600
RESEARCH The Broken Model of the Eurozone ................................................................................................................................... 1603
RESEARCH The Japanization of Europe in 9 This Time It Is Different Charts .................................................................................. 1605
RESEARCH Eurozone on cusp of triple-dip recession as German exports crumble ............................................................................ 1606
RESEARCH Euro Areas Stalling Industry No Support for GDP............................................................................................................ 1608
RESEARCH Early Warnings of Euro-Area Downturn Strengthen ECBs QE Case .............................................................................. 1608
RESEARCH ECB Rate Decision .......................................................................................................................................................... 1610
RESEARCH Euro-Area Data Deterioration Points Toward QE ............................................................................................................. 1613
RESEARCH ECB v FEDERAL RESERVE ............................................................................................................................................. 1614
RESEARCH The ECBs Negative Deposit Rate.................................................................................................................................. 1616
RESEARCH EU Version of QE Coming -> UST Purchases to Drive Euro Down ........................................................................... 1618
RESEARCH Beware of EU Banks! ......................................................................................................................................................... 1620
RESEARCH Emerging Markets Aggravates Festering Banking Problems .................................................................................... 1621
RESEARCH European Banks Have $3 Trillion of Exposure To Emerging Markets ...................................................................... 1623
RESEARCH - EFSF Downgraded to AA+ ............................................................................................................................................... 1625
RESEARCH - EU Stabilization Programs Are Presently Very Fragile ...................................................................................................... 1626
RESEARCH - Spreads Widened in Peripherals and Significantly in Portugal and Greece .............................................................. 1629
SITUATIONAL ASSESSMENT ..................................................................................................................................................................... 1631
PROGNOSIS: Why the European Situation Will Get Worse ..................................................................................................................... 1631
PROGNOSIS: Increasing Structural Imbalances ...................................................................................................................................... 1635
PROGNOSIS: $22T Unaccounted - A Hidden World of Contingent Liabilities, Government Backing & Guarantees. ................. 1637
PROGNOSIS: Monetary Malpractice - ECB's LTRO Not a Solution but ................................................................................................... 1643
PROGNOSIS: Monetary Malpractice - ECB's SMP Effort Futile ............................................................................................................... 1647
PROGNOSIS: Monetary Malpractice - ECB Accepts BBB Collateral ....................................................................................................... 1650
PROGNOSIS: EU Banking Overbanked, Undercapitalized and Now Insolvent ....................................................................................... 1651
PROGNOSIS: Monetary Malpractice - TARGET2 "Contingent Liabilities" ........................................................................................ 1652
PROGNOSIS: Bailouts - Unsustainable & Unfundable ............................................................................................................................. 1659
UK WHAT DOES BREXIT MEAN TO THE UK? .............................................................................................................................................. 1661
CHARTS OF NOTE ............................................................................................................................................................................................. 1661
NEW-CHARTS - UK Brexit Polls ............................................................................................................................................................ 1661
NEW-CHARTS - UK Current Account Deficit & Sterling Trade-Weighted Exchange Rate ................................................................... 1661
NEW-CHARTS - UK Since the Post GFC Stimulus Recovery, A Steady GDP Decline ......................................................................... 1662
NEW-CHARTS - UK Steady Long Term GDP Erosion .......................................................................................................................... 1662
NEW-CHARTS - UK Net Trade an Economic Drag ............................................................................................................................... 1663
NEW-CHARTS - UK US versus UK Productivity Growth ....................................................................................................................... 1664
NEW-CHARTS - UK Global Leader in Financial Services Net Exports ................................................................................................. 1664
NEW-CHARTS - UK Global Leader in Exports as % of GDP ................................................................................................................ 1665
CHARTS - UK - U.K. Productivity growth remains dismal......................................................................................................................... 1666
CHARTS - UK - The UK's increasingly polarized politics .......................................................................................................................... 1666
CHARTS - UK GBPUSD Volume trended higher into the election - above peak seen around the Scottish referendum. .................... 1667
CHARTS - UK The UK's financial sector has the highest exposure to China ........................................................................................ 1667
CHARTS - UK UK retail sales -0.5% in March, biggest fall since May last year and breaking longest run of increases in 5 years ..... 1668
CHARTS - UK - Deficit One of Worst of Developed Economies ............................................................................................................... 1668
CHARTS - UK Private Sector Surplus Eliminated .................................................................................................................................. 1669
CHARTS - UK Self-Employment At Record High ...................................................................................................................................... 1670
CHARTS - UK Rate Voting Shows Preference for Inflation Report Months ............................................................................................. 1671
CHARTS - UK Below 2% Target But 2nd Highest in EU ......................................................................................................................... 1671
CHARTS - UK CPI Below Target for 7th Month ...................................................................................................................................... 1672
CHARTS - UK Real-Wage Decline Longest Since At Least 1964 ......................................................................................................... 1673
CHARTS - UK Wage-Neutral Unemployment Rate Falling .................................................................................................................... 1673
CHARTS - UK CPI Too Low for BOE and Falling .................................................................................................................................. 1674
CHARTS - UK GDP ................................................................................................................................................................................ 1675
CHARTS - UK Population Growth .......................................................................................................................................................... 1675
CHARTS - UK - Crushed Disposable Income ........................................................................................................................................... 1676
CHARTS - UK - BOE Balance Sheet Growth ............................................................................................................................................ 1677
CHARTS - UK - Lending ............................................................................................................................................................................ 1678
CHARTS - UK - Unemployment ................................................................................................................................................................ 1679
CHARTS - UK - GDP - Pre and Post Recession Levels ........................................................................................................................... 1680
CHARTS - UK - GDP ................................................................................................................................................................................. 1680
CHARTS - UK - BOE Rates ....................................................................................................................................................................... 1681
RESEARCH OF NOTE .................................................................................................................................................................................. 1682

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NEW-RESEARCH The Brexit Delusion .................................................................................................................................................. 1682


NEW-RESEARCH Brexit: 5 Things Investors Need to Know ................................................................................................................ 1686
NEW-RESEARCH Brexit vote would affect UK's top credit score, says Standard & Poor's ................................................................. 1690
NEW-RESEARCH Mark Carney issues stark warning on global growth as storm clouds gather ......................................................... 1692
RESEARCH British General Threatens Military Coup If Corbyn Elected .............................................................................................. 1693
RESEARCH The End of Britain? Martin Armstrong On Jeremy Corbyn's Resurrection Of Marx ......................................................... 1695
RESEARCH What is Jeremy Corbyn's programme for government? .................................................................................................... 1698
RESEARCH What does Jeremy Corbyn stand for? Jeremy Corbyn's policies and views explained .................................................... 1704
RESEARCH Who is Jeremy Bernard Corbyn? ...................................................................................................................................... 1708
RESEARCH The City Of London Has Turned Britain into A "Civilized Mafia State" ............................................................................. 1713
RESEARCH What Remains of the UK Middle? ..................................................................................................................................... 1714
RESEARCH Clean Sweep by UK Conservatives Masks Huge Rifts ..................................................................................................... 1715
RESEARCH Explaining UK's Dysfunctional Voting System; Where is British Politics Headed? Horse Trading .................................. 1718
RESEARCH Consensus See UK Rate Increase in February 2015 Possibility of November ............................................................. 1721
RESEARCH BOE Faces Labor Market Conundrum as Wage Growth Stalls ........................................................................................ 1723
RESEARCH - UK workers' wage squeeze is longest since the 1870s ..................................................................................................... 1726
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1727
UK - What you need to Know..................................................................................................................................................................... 1727
UK - Joins Currency War - Down 8% YTD ............................................................................................................................................. 1728
UK - Specter of Stagflation Haunts UK ...................................................................................................................................................... 1729
UK - Public Policy turns Against Austerity and PM Cameron ............................................................................................................ 1730
UK - Doomsday Debt Machine .................................................................................................................................................................. 1731
UK - QE Extension Coming ....................................................................................................................................................................... 1734
UK - Small Business Credit Squeeze Now Acute - Loan Rejections Rising ..................................................................................... 1736
UK - Technically in a Depression ........................................................................................................................................................... 1737
ITALY POTENTIAL FOR ITALY TO FAIL & DRAG DOWN THE EUROOPEAN PROJECT .......................................................................... 1740
CHARTS OF NOTE ....................................................................................................................................................................................... 1741
NEW-CHARTS - ITALY Lack of Capital Expenditure Has Inevitably Lead to Italian Budget Shortfalls ................................................ 1741
NEW-CHARTS - ITALY Debt & NGDP Diverge ..................................................................................................................................... 1741
NEW-CHARTS - ITALY Italian Bank Assets versus NGDP ................................................................................................................... 1742
NEW-CHARTS - ITALY Italian Bank Loans Outstanding By Sector Households, Government & Non-Financial .............................. 1743
NEW-CHARTS - ITALY Italian Gross Investment versus France .......................................................................................................... 1743
NEW-CHARTS - ITALY Falling Real Labor Productivity Per Person Italy versus France .................................................................. 1744
NEW-CHARTS - ITALY Measuring Italian Bad Debt ............................................................................................................................. 1744
NEW-CHARTS - ITALY Italian Debt Maturity Profile w/ Implied Roll-Over and Estimated Deficits....................................................... 1745
NEW-CHARTS - ITALY Italian Interest Paid on the Public Debt ........................................................................................................... 1745
NEW-CHARTS - ITALY Target2 Liabilities Held By Banca dItalia ........................................................................................................ 1746
NEW-CHARTS - ITALY Marketable Securities Held by Banca dItalia .................................................................................................. 1746
NEW-CHARTS - ITALY Italian Real Annual Gross Wages .................................................................................................................... 1747
NEW-CHARTS - ITALY Italian Government Gross and Net Debt Comparisons as % of NGDP .......................................................... 1748
CHARTS - ITALY Non-Performing Loans by Region ............................................................................................................................. 1749
CHARTS - ITALY Gross Italian Impaired Loans..................................................................................................................................... 1750
CHARTS - ITALY Italian Government Debt ............................................................................................................................................ 1750
CHARTS - ITALY Banks Non-Performing Loans .................................................................................................................................. 1751
CHARTS - ITALY Quarterly GDP Growth .............................................................................................................................................. 1752
CHARTS - ITALY 30 Year Bond Yield At 2.3% - Historic Low ............................................................................................................... 1752
CHARTS - ITALY Italian Unemployment ................................................................................................................................................ 1754
CHARTS - ITALY Italian Core Inflation ................................................................................................................................................... 1754
CHARTS - ITALY Italian Industrial Porduction ....................................................................................................................................... 1755
CHARTS - ITALY Meal Affordability Deteriorates .................................................................................................................................. 1756
CHARTS - ITALY Falling Oil & Gas Consumption ................................................................................................................................. 1757
CHARTS - ITALY Italian Bond Yields ..................................................................................................................................................... 1757
CHARTS - ITALY Slips Back Into Recession ......................................................................................................................................... 1758
CHARTS - ITALY 10 Year Bond Yields Fall to Record Low .................................................................................................................. 1759
CHARTS - ITALY - Forced Rate Cuts ....................................................................................................................................................... 1760
RESEARCH OF NOTE .................................................................................................................................................................................. 1761
NEW-RESEARCH How Italy Will Fail And Drag Down The European Project ..................................................................................... 1761
RESEARCH Italy Youth Unemployment Hits Record High 44.2%, Concerns Rising "Recession Exit May Be Unsustainable"........... 1772
RESEARCH Italy Is "Willing To Temporarily Suspend Schengen" In Response To Refugee Crisis 09-02-15 Zero Hedge ................ 1775
RESEARCH Italy Non-Performing Loans Hit A New Record High ..................................................................................................... 1780
RESEARCH Demographic Devastation: Italy's Birth Rate Drops To 150 Year Low ............................................................................. 1785
RESEARCH Italy Falls Back Into Recession, Raising Concerns for Eurozone ..................................................................................... 1787
RESEARCH - Italys Downward Spiral ...................................................................................................................................................... 1791
RESEARCH - Italys Budget Failures, Weak Growth Outlook Call Debt Sustainability Into Question ..................................................... 1793
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1797
ITALIAN ELECTION - What You Need to Know ....................................................................................................................................... 1797
ITALIAN ELECTION - Europe Capitulates On Austerity- Never Had The Stomach For It ................................................................. 1799
ITALIAN ELECTION - Message Given By the People ............................................................................................................................ 1801
ITALIAN ELECTION - Bad Debt Continue to Soar .................................................................................................................................... 1805
ITALIAN ELECTION - Italians React Badly to Austerity, Elections Hardly a Surprise!........................................................................... 1808
ITALIAN ELECTION - EUROPEAN FEEDBACK - #1 ............................................................................................................................. 1809
ITALIAN ELECTION - EUROPEAN FEEDBACK - #2 ............................................................................................................................. 1811
ITALIAN ELECTION - Regional Financial Cracks in Sicily .................................................................................................................. 1814
FRANCE HOLLANDE SAYS FRANCE IN STATE OF ECONOMIC EMERGENCY AS STATE OF EMERGENCY ENSHRINED INTO
CONSTITUTION .................................................................................................................................................................................................. 1816
CHARTS OF NOTE ....................................................................................................................................................................................... 1816

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CHARTS FRANCE Total Net Government Liabilities .......................................................................................................................... 1816


CHARTS FRANCE Industrial production stagnated in February - 15% below pre-crisis levels. ........................................................ 1816
CHARTS FRANCE Bankruptcies Soar as Profitability Slumps ........................................................................................................... 1817
CHARTS FRANCE Post Hollande Election Results Jobseekers and 10 Year Yield ....................................................................... 1817
CHARTS FRANCE French Job Seekers ............................................................................................................................................. 1818
CHARTS FRANCE Inflation Expectations ........................................................................................................................................... 1818
CHARTS - FRANCE Hollande Popularity Gap Heading for a Record Low ........................................................................................... 1819
CHARTS - FRANCE Austerity Doesnt Get You Re-Elected ................................................................................................................. 1819
CHARTS - FRANCE Worlds Worst PMI Ranking in June ..................................................................................................................... 1820
CHARTS - FRANCE Near-record high bankruptcies and record-low profitability .................................................................................. 1821
CHARTS - FRANCE Frances PMI Trend Weakness Beginning to Stand Out...................................................................................... 1821
CHARTS - FRANCE Manufacturing Divergence With Germany Widens .............................................................................................. 1822
CHARTS - FRANCE - GDP ....................................................................................................................................................................... 1823
CHARTS - FRANCE - UNEMPLOYMENT ................................................................................................................................................ 1824
CHARTS - FRANCE - BUDGET DEFICIT ................................................................................................................................................. 1825
CHARTS - FRANCE - TAX v GDP ............................................................................................................................................................ 1826
CHARTS - FRANCE - BUSINESS CONFIDENCE.................................................................................................................................... 1827
RESEARCH OF NOTE .................................................................................................................................................................................. 1828
NEW-RESEARCH Hollande says France in state of economic emergency .......................................................................................... 1828
NEW-RESEARCH France Just Enshrined Its "State Of Emergency" In the Constitution ..................................................................... 1828
NEW-RESEARCH France Changes Constitution to Protect "Emergency" Police Powers from Court Challenges .............................. 1829
NEW-RESEARCH France's Far-Right Party Calls For Nation To "Re-Arm Itself", Revoke Muslims' Passports .................................. 1831
RESEARCH Moody's Downgrades France, Blames "Political Constraints", Sees No Material Reduction in Debt Burden ................. 1832
RESEARCH When It Comes To Total Debt, Greece Is Not That Much Worse Than France (Or The USA) ................................. 1836
RESEARCH Economic Malaise Sparks Political Crisis in France ......................................................................................................... 1837
RESEARCH - France In "Political Turmoil" After Hollande Unexpectedly Dissolves Government .......................................................... 1839
RESEARCH Prime Minister Manuel Vall Resigns .................................................................................................................................. 1841
RESEARCH - European Voters Are Revolting; France Warns "Situation Is Grave for France, Europe" ................................................. 1841
RESEARCH - Steady Breakdown Underway ......................................................................................................................................... 1844
RESEARCH - France Loses its Coveted and NEEDED AAA Rating ................................................................................................... 1848
SITUATIONAL ASSESSMENT ..................................................................................................................................................................... 1850
FRANCE - An astoundingly high number of French people don't have faith in Hollande 05-02-15 BI ..................................................... 1850
FRANCE - French utility EDF seeks to cut workers 10-week holiday quota 05-26-15 FT ....................................................................... 1850
FRANCE - What You Need to Know ......................................................................................................................................................... 1852
FRANCE - Key Indicators .......................................................................................................................................................................... 1853
FRANCE: Sharpest Drop in Private Sector Output in Four Years ............................................................................................................ 1857
FRANCE - Quits on Austerity - Never a Doubt This Would Happen...................................................................................................... 1860
FRANCE - Socialism is Expensive ......................................................................................................................................................... 1861
FRANCE - Has Turned back to Socialism ................................................................................................................................................. 1863
FRANCE - Losing Its Way through Political Illusions and Lies ................................................................................................................. 1864
FRANCE - Uncompetitive .......................................................................................................................................................................... 1865
FRANCE - Titan Tire Calls Out French Labor ........................................................................................................................................... 1867
FRANCE - France Responds to Titan Tire ................................................................................................................................................ 1869
FRANCE - What Happens In France When Companies Fire People ....................................................................................................... 1871
FRANCE - Hollande's Economically Insane campaign Promise ............................................................................................................... 1872
GERMANY GERMAN FINANCE MINISTER WARNS OF FOUNDATION BEING LAID FOR AN ECONOMIC CRISIS ............................... 1874
CHARTS OF NOTE ....................................................................................................................................................................................... 1874
CHARTS - GERMANY GDP Growth ...................................................................................................................................................... 1874
CHARTS - GERMANY 10-year Bund yields have now moved above JGB yields ................................................................................. 1875
CHARTS - GERMANY German Industrial Output -0.5% MM, +0.1% YY .............................................................................................. 1876
CHARTS - GERMANY Germany now leading the way back up in Euro Zone ...................................................................................... 1876
CHARTS - GERMANY On rolling bi-weekly basis, the 10-yr Bund yield rise of 43 bps is about as big as it gets in recent history ..... 1877
CHARTS - GERMANY - 1.179% 30 Year Bond Yield .............................................................................................................................. 1878
CHARTS - GERMANY 2 Year Sovereign Yield Goes Negative ............................................................................................................ 1878
CHARTS - GERMANY 10 Year Sovereign Bund versus US10 Treasury .............................................................................................. 1878
CHARTS - GERMANY German & Japanese Yield Curves Are Remarkably Close .............................................................................. 1879
CHARTS - GERMANY 10 Y European Yields........................................................................................................................................ 1880
CHARTS - GERMANY German Unemployment .................................................................................................................................... 1881
CHARTS - GERMANY German Core Inflation ....................................................................................................................................... 1881
CHARTS - GERMANY 10 Year Sovereign Bund versus US10 Treasury .............................................................................................. 1881
CHARTS - GERMANY Expectations Component Peaked In January ................................................................................................... 1882
CHARTS - GERMANY Ifo Rolls-Over..................................................................................................................................................... 1882
CHARTS - GERMANY 10 Year Bund Below 1% ................................................................................................................................... 1883
CHARTS - GERMANY - Inflation ............................................................................................................................................................... 1883
CHARTS - GERMANY - IFO Investor Confidence .................................................................................................................................... 1884
CHARTS - GERMANY - ZEW Expectations .............................................................................................................................................. 1885
RESEARCH OF NOTE .................................................................................................................................................................................. 1887
NEW-RESEARCH - German Finance Minister: Expansive policies may have laid foundation of next crisis........................................... 1887
NEW-RESEARCH - Furious Germans Stage Massive Anti-Islam Protest ............................................................................................... 1887
NEW-RESEARCH - Germany Has Repatriated Over 366 Tonnes Of Gold From New York And Paris .................................................. 1895
RESEARCH - U.S. Will Station New Nuclear Weapons in Germany against Russia ............................................................................... 1902
RESEARCH - Refugee Crises At Dangerous Tipping Point As Hungary Deploys Army, Germany Loses Patience ............................... 1903
RESEARCH - Why Volkswagen Is Systematically Important For Germany And Europe ......................................................................... 1907
RESEARCH - Europe's Woes: The Escalating Cost to Germany ............................................................................................................. 1910
RESEARCH - Bundesbank Blasts Draghi For Breaking Bailout Taboo .................................................................................................... 1913
RESEARCH - Five charts that show Germany is heading into recession 10-19-14 The Guardian.......................................................... 1914

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RESEARCH - Draghi signaled additional monetary easing is likely to materialize - Possibly by September .......................................... 1917
RESEARCH - Germany close to recession as ECB admits recovery is weak.......................................................................................... 1919
RESEARCH - Merkel's Third Chancellorship Challenges .................................................................................................................... 1920
RESEARCH - German Election - Merkel Begins Hunt for Coalition Partners........................................................................................... 1924
RESEARCH - Europe's Shadow Economy: As Big As Germany.............................................................................................................. 1925
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1929
GERMANY - Anti Euro AfD Party May Cost Merkel in Critical September Election ......................................................................... 1930
GERMANY - The Euro Crisis Escalation over Cyprus May Politically Cripple Merkel ..................................................................... 1931
GERMANY - Call for End of "Coercive Euro Association" ........................................................................................................................ 1933
IBERIAN PENINSULA LEFT BLOC ASCENDING AGAINST PORTUGALS SOCIALISTS ........................................................................... 1935
CHARTS OF NOTE ............................................................................................................................................................................................. 1935
CHARTS - SPAIN Spains Debt-to-GDP ................................................................................................................................................. 1935
CHARTS - SPAIN Spains & Portugals Unemployment Rate June 2015 Seasonally Adjusted ......................................................... 1935
CHARTS - SPAIN Spanish Industrial Production Output +1.0% MM, +2.9% YY ................................................................................... 1935
CHARTS - PORTUGAL Share of Lower Skilled Workers ....................................................................................................................... 1936
CHARTS - PORTUGAL Non-Performing Loans...................................................................................................................................... 1937
CHARTS - SPAIN 30 Year Bond Yield At 2.5% - Historic Low ............................................................................................................... 1938
CHARTS - SPAIN 10 Year Bond Yield At 2.37% - Historic Low ............................................................................................................. 1938
CHARTS - PORTUGAL Yields Hit Low After BES Bailout ..................................................................................................................... 1939
CHARTS - PORTUGAL - Deficit Problem ................................................................................................................................................. 1940
RESEARCH OF NOTE .................................................................................................................................................................................. 1941
NEW-RESEARCH - Did Austerity Really Win Out in Portugal? ........................................................................................................... 1941
RESEARCH - Spain's Economic Recovery Is "One Big Lie" ............................................................................................................... 1941
RESEARCH - Jitters over Spanish elections, Greece hit banks, euro ............................................................................................... 1945
RESEARCH - Jitters over Spanish elections, Greece hit banks, euro ............................................................................................... 1948
RESEARCH - Presidential Warning Spikes Yields To 8 Months Highs .............................................................................................. 1952
RESEARCH - Clear Signs of Desperation In Spain from a Growing Collateral Contagion .............................................................. 1954
RESEARCH - The Spanish Government's 'Bad Bank' Scam .............................................................................................................. 1955
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 1957
IBERIA - Credit Downgrades - At Precipice of "Non Investment Grade" .................................................................................................. 1957
IBERIA - Regional Bailout Bailouts a Massive Problem ...................................................................................................................... 1958
IBERIA - NPL Going Ballistic .................................................................................................................................................................. 1959
IBERIA - Spanish Funding Problem ....................................................................................................................................................... 1960
IBERIA - The Giant Spanish Housing Bubble, Now Beginning to Implode ............................................................................................... 1965
IBERIA - Mal-Investment Coming Home to Roost..................................................................................................................................... 1967
IBERIA - Now a Capital Investment Problem ............................................................................................................................................ 1970
IBERIA - Banks on Artificial "Ponzi Bond" Life Support ............................................................................................................................ 1971

CHINA: CAPITAL OUTFLOWS, FALLING FOREIGN DIRECT INVESTMENT & NOW US TREASURY SALES ................... 1980
CHINA .................................................................................................................................................................................................................. 1980
CHARTS OF NOTE ....................................................................................................................................................................................... 1980
NEW-CHARTS Chinas Hot Money Flows ............................................................................................................................................. 1980
NEW-CHARTS Capital Outflows and Falling Foreign Direct Investment ............................................................................................... 1981
NEW-CHARTS Exchange Rates & Foreign Exchange Reserves .......................................................................................................... 1981
NEW-CHARTS China & Belgium Treasury Holdings v-China FX Reserves ....................................................................................... 1982
NEW-CHARTS Belgiums US Treasury Holdings .................................................................................................................................. 1982
NEW-CHARTS China Containerized Freight Index ............................................................................................................................... 1983
NEW-CHARTS China Fiscal Spending Y-o-Y Increase ......................................................................................................................... 1983
NEW-CHARTS GDP Growth Steady At 6.9% in Q3 2015 ..................................................................................................................... 1984
NEW-CHARTS Debt Fueled But Not Much Growth ............................................................................................................................... 1984
NEW-CHARTS Chinese New Loan Breakdown ..................................................................................................................................... 1985
NEW-CHARTS CAI Suggests China Economic Activity Below Reported GDP .................................................................................... 1985
NEW-CHARTS Chinese Bank NPLs Are Gradually Rising Every Quarter ............................................................................................ 1986
NEW-CHARTS A Tale of Two Economies ............................................................................................................................................. 1986
NEW-CHARTS Chinas Investment Share of GDP Higher than Ever in Japan or Korea ...................................................................... 1988
NEW-CHARTS China Treasury Holding Have Peaked But US Commercial Banks Taking Uo the Slack ............................................ 1989
NEW-CHARTS China 2014 Labor Force Declines First Time in at Least Two Decades ...................................................................... 1989
NEW-CHARTS Ponzi Finance: Chinese Firms Are Issuing More Debt Just to Pay Interest ................................................................. 1990
NEW-CHARTS Chinese Global Trade Index 2001 ............................................................................................................................. 1990
NEW-CHARTS Chinese Imports Exports ........................................................................................................................................... 1992
NEW-CHARTS Chinas Economic Weakness Wider Deeper In September ...................................................................................... 1993
CHARTS Sinking Li Keqiamg Index Contrasts With Stable GDP .......................................................................................................... 1994
CHARTS China is the Undisputed Engine of Global Growth ................................................................................................................. 1995
CHARTS China Has Been Consuming Mind-Boggling Amounts of Raw Materials ............................................................................... 1995
CHARTS Fixed Asset Investment & Consumption in China Y-o-Y Growth ........................................................................................ 1996
CHARTS Fixed Asset Investment Rises Least Since 2000 ................................................................................................................... 1997
CHARTS Economic Indicators Point to Lower Growth than the Headline Figures ................................................................................ 1997
CHARTS Gains of Real Estate Development Investment 1/10th of 2010 Pace ..................................................................................... 1998
CHARTS Foreign Exports to China as a % of GDP ............................................................................................................................... 1998
CHARTS Foreign Exports to China for Chinas Domestic Use as a % of GDP ..................................................................................... 1999
CHARTS China & Belgium Treasury Holdings vs China FX Reserves ................................................................................................. 2000
CHARTS Breakdown of Chinese Imports ............................................................................................................................................... 2001
CHARTS Chinese Imports Slow to 5 Year Low...................................................................................................................................... 2002
CHARTS Chinas Increasing Substitution of Imports for Made in China Products .............................................................................. 2002
CHARTS Developing Economies Exposure to Chinese Domestic Demand ......................................................................................... 2003
CHARTS Chinas GDP Monthly Tracker and Target .............................................................................................................................. 2004

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CHARTS China Matters Less for US Consumers than for Stock Investors ........................................................................................... 2004
CHARTS Monthly Change in Foreign Reserves .................................................................................................................................... 2005
CHARTS Monthly FX Purchases ............................................................................................................................................................ 2006
CHARTS Chinas Estimated Productivity Growth Based on IP & Employment Shifts ........................................................................... 2006
CHARTS Shanghai Composite Index Profits% Y-o-Y ......................................................................................................................... 2007
CHARTS Corporate & Household Debt as % GDP ................................................................................................................................ 2007
CHARTS Weak Yuan Supported Much of 21-Year Export Rise to U.S. ................................................................................................ 2008
CHARTS Outstanding Balance of Margin Finance Shanghai Composite ........................................................................................... 2009
CHARTS Currency Rout Goes Global as Risk Seen of 50% Loss ........................................................................................................ 2009
CHARTS Yuan Trading Band ................................................................................................................................................................. 2010
CHARTS Historical Yuan FX Pattern...................................................................................................................................................... 2011
CHARTS China Plans to Spend Billions on Infrastructure in Pakistan .................................................................................................. 2012
CHARTS Chinas Proposed Silk Road Routes....................................................................................................................................... 2013
CHARTS China Activity Proxy & Official GDP........................................................................................................................................ 2014
CHARTS China Relaxes Commercial Bank Reserves ........................................................................................................................... 2015
CHARTS Chinese Balance of Payments ................................................................................................................................................ 2015
CHARTS Chinese Hot Money Flows ...................................................................................................................................................... 2016
CHARTS Falling Chinese Industrial Production ..................................................................................................................................... 2016
CHARTS Commodity Prices % Change Since July 2014 ...................................................................................................................... 2017
CHARTS Chinese Steel Demand, Iron Ore ............................................................................................................................................ 2017
CHARTS Chinese Rail Freight ............................................................................................................................................................... 2018
CHARTS Chinese Bank Assets versus US Bank Assets ....................................................................................................................... 2019
CHARTS Chinese Leverage and Underlying Nominal GDP .................................................................................................................. 2019
CHARTS Measures of Real & Nominal GDP Growth in China .............................................................................................................. 2020
CHARTS Chinese Total Debt & Breakdown........................................................................................................................................... 2020
CHARTS New Chinese Retail Stock Market Accounts .......................................................................................................................... 2021
CHARTS New Chinese Retail Stock Market Accounts-2 ....................................................................................................................... 2022
CHARTS Plummeting Chinese Consumer Confidence .......................................................................................................................... 2022
CHARTS Chinese PMI ............................................................................................................................................................................ 2023
CHARTS Chinese Exports versus Taiwan-Korea-Japan ....................................................................................................................... 2024
CHARTS - Falling Chinese Industrial Profits ............................................................................................................................................. 2025
CHARTS - Something Up (or rather down) with Chinese Currency? ....................................................................................................... 2025
CHARTS - Rising Margin Debt/Market Cap Ratio Suggests Liquidity m& Credit Risks ........................................................................... 2026
CHARTS - Corporate Bond Yields ............................................................................................................................................................. 2026
CHARTS - New Retail Stock Trading Accounts ........................................................................................................................................ 2027
CHARTS - Credit Growth 30% Above Trend for Private Sector Debt to GDP .......................................................................................... 2027
CHARTS - Falling Foreign Currency Reserves ......................................................................................................................................... 2028
CHARTS - 2 Year Yield Goes Negative .................................................................................................................................................... 2029
CHARTS - China Used More Cement in Last 3 Years than US in Entire 20th Century ............................................................................ 2029
CHARTS - China Real Activity Indicators Steel, Cement & Electricity ................................................................................................... 2030
CHARTS - Chinese Coal Consumption Falls ............................................................................................................................................ 2031
CHARTS - Chinese Y-o-Y Outstanding Credit & M2 ................................................................................................................................. 2031
CHARTS - Chinas Bank Reserve Requirement Ratio .............................................................................................................................. 2031
CHARTS - New Stock Market Trading Accounts ...................................................................................................................................... 2032
CHARTS Yuan Falls as Economy Weakens .......................................................................................................................................... 2033
CHARTS Yuans Currency Basket Composition .................................................................................................................................... 2033
CHARTS Yuan Diverges From Currency Basket ................................................................................................................................... 2034
CHARTS Industrial Output A Concern.................................................................................................................................................... 2034
CHARTS China On A Path Since 2008 That Historically Leads to A Currency Crisis........................................................................... 2035
CHARTS Borrowing Costs for Firms Remain High ................................................................................................................................ 2036
CHARTS Chinas Q1 GDP Deflator Falls to Zero .................................................................................................................................. 2037
CHARTS - Credit is Running Well Ahead of Economic Growth ................................................................................................................ 2038
CHARTS Productivity is Slumping As Debt Levels Soar........................................................................................................................ 2038
CHARTS Chinas Gross Fixed Capital Formation Problem ................................................................................................................... 2038
CHARTS Chinese Investment Peaking .................................................................................................................................................. 2039
CHARTS China Equity Flows ................................................................................................................................................................. 2040
CHARTS Credit Accumulation Rate Growth Comparisons ................................................................................................................. 2040
CHARTS Chinese Credit Growth ............................................................................................................................................................ 2041
CHARTS 5 Year Debt Growth versus GDP ............................................................................................................................................ 2041
CHARTS 5 Year Credit Growth .............................................................................................................................................................. 2042
CHARTS Growth Propensity of Credit Growth..................................................................................................................................... 2043
CHARTS Chinas Bad Loans - NPL........................................................................................................................................................ 2044
CHARTS Slowing Steel Consumption .................................................................................................................................................... 2045
CHARTS Shadow Banking System ........................................................................................................................................................ 2045
CHARTS Dramatic Chinese Housing Slowdown ................................................................................................................................... 2047
CHARTS - CHINA - A Global Slowdown on the Verge of Contraction...................................................................................................... 2048
CHARTS - CHINA - Chinese Credit Market .............................................................................................................................................. 2049
CHARTS - CHINA - PMI ............................................................................................................................................................................ 2050
CHARTS - CHINA - PMI-2 ......................................................................................................................................................................... 2051
CHARTS - CHINA - GDP ........................................................................................................................................................................... 2052
CHARTS - CHINA Industrial Output ....................................................................................................................................................... 2053
CHARTS - CHINA - Urban Fixed Asset Investment .................................................................................................................................. 2054
CHARTS - CHINA Retail Sales .............................................................................................................................................................. 2055
RESEARCH OF NOTE .................................................................................................................................................................................. 2056
NEW-CHINA "China Is A Monumental Doomsday Machine" Stockman Warns .................................................................................... 2056
NEW-CHINA China Faces Capital Flight Punishment ........................................................................................................................... 2059
NEW-CHINA China's Credit Conundrum................................................................................................................................................ 2063

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CHINA China's Economy Continues To Crumble As Key Data Is Worst In 15 Years ........................................................................... 2065
CHINA China Outflows Said To Surpass A Staggering $300 Billion in Under Three Months ............................................................... 2068
CHINA China FX Reserve Drop Is Collateral Damage from Yuan Fall .................................................................................................. 2071
CHINA This Isn't 1994: China and That First U.S. Rate Hike ................................................................................................................ 2073
CHINA Expect Regional Ripples, Not Global Waves, From China Selloff ............................................................................................. 2075
CHINA China Risks Downward Spiral of Falling Markets, Growth......................................................................................................... 2076
CHINA China to the Rescue ................................................................................................................................................................... 2078
CHINA Yuan Devaluation Helps Attain U.S. Monetary Tightening Without Fed Rate Hikes ................................................................. 2079
CHINA Devaluation Promises to Boost Exports, But Adds Stability Risk .............................................................................................. 2081
CHINA Risk of a Vicious Circle on Market, Profit Declines .................................................................................................................... 2083

JAPAN: ABENOMICS GOES FULL IN WITH NIRP ............................................................................................................... 2085


JAPAN .................................................................................................................................................................................................................. 2085
CHARTS OF NOTE ....................................................................................................................................................................................... 2086
NEW-CHARTS - JAPAN Eire Similarities with Abenomics Period and 2007-2009 Crisis ..................................................................... 2086
NEW-CHARTS - JAPAN Nikkei 225 versus Kuroda's regime shift to NIRP .......................................................................................... 2086
NEW-CHARTS - JAPAN Largest unrealized losses on Margin Buying since Lehman ......................................................................... 2086
NEW-CHARTS - JAPAN Exports Y-o-Y versus USDJPY ...................................................................................................................... 2087
NEW-CHARTS - JAPAN Imports Y-o-Y ................................................................................................................................................. 2087
NEW-CHARTS - JAPAN BOJ Holding of Outstanding Japanese Debt ................................................................................................. 2088
NEW-CHARTS - JAPAN NIKKEI In Near Free-Fall ............................................................................................................................... 2088
NEW-CHARTS - JAPAN Japanese Bank Stocks Collapsing as they Follow JGB 2-10 Yield Curve Spread ....................................... 2089
NEW-CHARTS - JAPAN Japanese Buying of Foreign Stock ................................................................................................................ 2089
NEW-CHARTS - JAPAN BOJ Owns 52% of Entire Japanese ETF Market Assets ............................................................................... 2090
NEW-CHARTS - JAPAN GDP Q-o-Q Quintuple Dip Recession......................................................................................................... 2090
CHARTS - JAPAN Real Y-o-Y Cash Earnings with Abenomics ............................................................................................................ 2091
CHARTS - JAPAN BOJs Accelerating Purchases of Equity Funds Seen as Driving Force of Tokyo Share Markets ......................... 2091
CHARTS - JAPAN More than a Fourth of Japans Population is Over the Age of 65 ........................................................................... 2092
CHARTS - JAPAN IMFs Forecast of Japanese Population Growth...................................................................................................... 2092
CHARTS - JAPAN Prefectures with More Seniors Saw Steeper GDP Losses ..................................................................................... 2093
CHARTS - JAPAN Aging Population Will Continue Dragging Down Growth......................................................................................... 2093
CHARTS - JAPAN Fewer, Older Citizens Facing Larger Debt Burden ................................................................................................. 2094
CHARTS - JAPAN 20 Years Later China Follows Japans Pattern ....................................................................................................... 2095
CHARTS - JAPAN Financial Repression Gets Heavier in Japan .......................................................................................................... 2095
CHARTS - JAPAN Inventory Build Up Keeps Q1 GDP Afloat ............................................................................................................... 2096
CHARTS - JAPAN 48 Month Trade Balance Deficit .............................................................................................................................. 2097
CHARTS - JAPAN Y-o-Y Contracting Imports ....................................................................................................................................... 2097
CHARTS - JAPAN Monetary Base versus USDJPY .............................................................................................................................. 2098
CHARTS - JAPAN Japan National Debt Rises To 1,053,357,200,000,000......................................................................................... 2098
CHARTS - JAPAN 1.174% 30 Year Bond Yield ..................................................................................................................................... 2100
CHARTS - JAPAN 2 Year Yield Goes Negative..................................................................................................................................... 2100
CHARTS - JAPAN Savings Rate Goes Negative ................................................................................................................................... 2100
CHARTS - JAPAN Stagnate Housing Starts with Historic Low 35 Year Mortgages .............................................................................. 2101
CHARTS - JAPAN Non-Resident Net Investment in Japanese Stocks ................................................................................................. 2101
CHARTS - JAPAN Shifting Demographics - Birth versus Deaths .......................................................................................................... 2102
CHARTS JAPAN Nikkei Strength is all Relative ............................................................................................................................... 2102
CHARTS - JAPAN Trade Balance .......................................................................................................................................................... 2103
CHARTS - JAPAN 10 Year Treasury Approaching Zero (12-27-14) ..................................................................................................... 2104
CHARTS - JAPAN BOJ Reserve Balances ............................................................................................................................................ 2105
CHARTS - JAPAN Macro Crisis Zones .................................................................................................................................................. 2106
CHARTS - JAPAN Demographics .......................................................................................................................................................... 2107
CHARTS - JAPAN Fiscal Deficit versus BOJ Balance Sheet ................................................................................................................ 2107
CHARTS - JAPAN Japans Economy versus the Rest of the World ...................................................................................................... 2108
CHARTS - JAPAN Japans Decline in Real Interest Rates .................................................................................................................... 2109
CHARTS - JAPAN Japanese GDP Annualized Q-o-Q ........................................................................................................................... 2110
CHARTS - JAPAN Bankruptcies Due to Depreciating Yen .................................................................................................................... 2111
CHARTS - JAPAN Japanese & German Yield Curves Are Remarkably Close ...................................................................................... 2111
CHARTS Q2 GDP Downturn Even Worse Than Though or Looks........................................................................................................ 2113
CHARTS Real Incomes Falling at Fastest Rate in a Decade ................................................................................................................ 2113
CHARTS Japan Exports Remained Subdued ........................................................................................................................................ 2114
CHARTS Past Yen Strength Pushed Production Off-Shore .................................................................................................................. 2114
CHARTS Japans Export Majors Lost Tech Battle ................................................................................................................................. 2115
CHARTS Japans Stalled Inflation Adds Pressure for Second Round of Stimulus ................................................................................ 2116
CHARTS Japan Adjusted Trade Balance ............................................................................................................................................... 2116
CHARTS Japan BoP Current Account Balance .................................................................................................................................. 2117
CHARTS 5T Yen of JGB Selling ............................................................................................................................................................. 2117
CHARTS Sovereign Debt % of Tax Revenue ........................................................................................................................................ 2118
CHARTS Public Sector Debt Issuances 2013 as % GDP ...................................................................................................................... 2119
CHARTS - GDP Trend ............................................................................................................................................................................... 2119
CHARTS - CPI Trend ................................................................................................................................................................................. 2120
CHARTS - JAPAN - GDP Resurgence ...................................................................................................................................................... 2120
CHARTS - JAPAN - BOJ Balance Sheet .................................................................................................................................................. 2121
RESEARCH OF NOTE .................................................................................................................................................................................. 2122
NEW-JAPAN Safes Sell Out In Japan, 1,000 Franc Note Demand Soars As NIRP Triggers Cash Hoarding .............................. 2122
NEW-JAPAN "There Will Be Hyperinflation" Japanese Lawmaker Warns "Kuroda Got It Wrong" With NIRP .......................... 2124
NEW-JAPAN Abenomics Fails Miserably As Japan's Workers "Get Nothing" In 2015 ................................................................. 2127

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JAPAN Paul Krugman Is "Really, Really Worried" That He Might Have Screwed Up Japan ........................................................ 2130
JAPAN S&P Downgrades Japan from AA- To A+ On Doubts Abenomics Will Work - Full Text .................................................. 2133
JAPAN Elderly Japanese Population Hits New Record - Demographic Death-Rattle Continues ................................................ 2135
JAPAN Bank Of Japan Buying Power Runs Dry: "If They Don't Increase Now, It's Going To Be A Shock!" ............................. 2139
JAPAN Abe Ratings Crash to Record Lows, Japan Lowers Minimum Voting Age ....................................................................... 2141
JAPAN Japan Now Spends 43% Of Tax Revenue To Fund Interest On Debt ................................................................................. 2144
JAPAN Japan Still the Worlds Top Credit? ....................................................................................................................................... 2145
JAPAN Bank of Japan Relaxing All-Out Approach to Hitting Inflation Target ........................................................................................ 2146
JAPAN Japanese trading firms to cut investments, sell assets ...................................................................................................... 2147
JAPAN The BOJ Ups The Ante ............................................................................................................................................................ 2149
JAPAN Is Japan Kaput? ........................................................................................................................................................................ 2150
JAPAN - Pace of 60 to 70 trillion yen a year May Become "Open Ended" ............................................................................................... 2153
JAPAN - Japanese Financial Repression - Changes in Allocation of Japanese Retirement Accounts Coming ...................................... 2155
JAPAN - 3 Arrows of ABE-nomics Not Working ........................................................................................................................................ 2158
JAPAN - Stalled Inflation Adds Pressure for Second Round of Stimulus ................................................................................................. 2160
JAPAN - Japanese Financial Repression - Changes in Allocation of Japanese Retirement Accounts Coming ...................................... 2161
JAPAN - Japan bond market liquidity dries up as BoJ holding crosses 200tn........................................................................................ 2163
JAPAN - Abe Approval Rating Plunges ................................................................................................................................................. 2165
JAPAN - What the Japanese been Buying ............................................................................................................................................. 2166
JAPAN - Japan May Matter More Than Tapering .................................................................................................................................. 2168
JAPAN - Japan Finances Worse than at Wars End ............................................................................................................................. 2171
JAPAN - BOJ: "The days of constructive ambiguity is over! ......................................................................................................... 2172
JAPAN - Abenomics Third Arrow Growth Strategy Underwhelms .......................................................................................................... 2173
JAPAN - 2nd ABE-nomics $200B Stimulus Package Approved ......................................................................................................... 2175
JAPAN - Worlds Biggest Pension Fund Sees Japan Fail on ABE-nomics' 2% Inflation Goal ....................................................... 2176
JAPAN - The Abe-nomics Failure ........................................................................................................................................................... 2179
SITUATIONAL ASSESSEMENT & KEY NOTES .......................................................................................................................................... 2181
JAPAN - What You Need to Know............................................................................................................................................................. 2183
JAPAN - No Way Out But to Expand the Monetary Base ..................................................................................................................... 2186
JAPAN - BOJ to "Own" 100% of GDP in 5 Years .................................................................................................................................. 2186
JAPAN - Adjusted trade deficit the worst in Bloomberg's 20 year history ........................................................................................ 2190
JAPAN - How Japan's National Debt Grew ............................................................................................................................................... 2191
JAPAN - ABE-nomics About Lowering Real Interest Rates ................................................................................................................ 2192
JAPAN - Japanese Bonds Have Lost Their Ability to Price Risk ........................................................................................................ 2193
JAPAN - Japanese Structural Problems a "Canary" for Western Developed Economies ................................................................ 2197
JAPAN - Shinzo Abe Hasn't the Stomach for the Heavy Lifting Needed to Accompany ABE-nomics........................................... 2199
JAPAN - A Credit Squeeze Leads Deflationary Leg Down .................................................................................................................. 2202
JAPAN - Some Japanese Policies Have Clearly Hit the Limit ............................................................................................................. 2203
JAPAN - The ABE (Asset Bubble Evaluator) Index ............................................................................................................................... 2205
JAPAN - Regional Risk-Reward ................................................................................................................................................................ 2206
JAPAN - Now the Frontrunner of Outright Monetization. .................................................................................................................... 2207
JAPAN - Yen Devaluation ........................................................................................................................................................................ 2208
JAPAN - New Bank of Japan Policy - 2% Inflation in 2 Years ............................................................................................................. 2209
JAPAN - Appoints BOJ Governor Firmly Committed to Printing Money ........................................................................................... 2211

EMERGING MARKETS PROBLEMS IN EM & BRAZIL....................................................................................................... 2213


EMERGING MARKETS ....................................................................................................................................................................................... 2213
CHARTS OF NOTE ....................................................................................................................................................................................... 2213
NEW-CHARTS EM Wave is the Third Wave in the Global Financial Crisis (GFC) ............................................................................... 2213
NEW-CHARTS Countries Scaled to the Un sustainablilty of Their Debt ............................................................................................... 2213
NEW-CHARTS Emerging Market CAPEX A Dominate Part of their Economies ................................................................................... 2214
NEW-CHARTS Estimated Assets in Sovereign Wealth Funds versus Oil & Gas Related -1 ................................................................ 2215
NEW-CHARTS Emerging Market CAPEX A Dominate Part of their Economies-2 ............................................................................... 2215
NEW-CHARTS Emerging Market Collapse Accelerated in May When Global Market Peaked ............................................................ 2216
NEW-CHARTS Emerging Market USD Corporate Bond Maturities ....................................................................................................... 2217
CHARTS MSCI EM FX Index - New 6 Year Lows ................................................................................................................................ 2217
CHARTS EM FX Loses Since FOMC Meeting Brazil Noticeably Worse ............................................................................................ 2218
CHARTS EM FX Debasement By Country Since FOMC ....................................................................................................................... 2219
CHARTS EM FX Debasement By Country Since 9/7/09 ....................................................................................................................... 2219
CHARTS Brazilians Scramble to Protect their Store of Value (Coming to Other Countries) ................................................................. 2219
CHARTS Brazil Real GDP Y-o-Y% ........................................................................................................................................................ 2220
CHARTS Brazil Real / US$ versus Brazil 5Y CDS ................................................................................................................................ 2221
CHARTS Brazil Change in Yields Compared to Turkey and Mexico .................................................................................................. 2222
CHARTS Brazil Sovereign Gross Debt/GDP Government versus BI Simulation ............................................................................ 2222
CHARTS Brazil Number of days to start a business Worst in the Major Countries! ........................................................................ 2223
CHARTS Brazil Real Reaches Record Low as Budget Pessimism Rises .......................................................................................... 2223
CHARTS 5Y CDS Spreads Brazil, Russia, Turkey, Indonesia, Colombia & Peru .............................................................................. 2224
CHARTS AFRICA-Chinese Investment Offers in Africa Since 2000 ..................................................................................................... 2224
CHARTS AFRICA-Foreign Direct Investment & Trade .......................................................................................................................... 2225
CHARTS AFRICA-Geographic Comparisons ......................................................................................................................................... 2226
CHARTS Emerging Markets Corporate Defaults ................................................................................................................................... 2226
CHARTS Emerging Markets Economic Surprise Index ......................................................................................................................... 2227
CHARTS Emerging Markets Currency Change versus USD ................................................................................................................. 2227
CHARTS Emerging Markets Change in Nominal Policy Rate ............................................................................................................... 2228
CHARTS EM Vulnerability to an external shock Resilience Indicator .............................................................................................. 2229
CHARTS EM Vulnerability to an external shock Resilience Indicator Change Since 2008 Crisis ................................................... 2230

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CHARTS Falling EM Currencies ............................................................................................................................................................. 2231


CHARTS Post-China 16 ......................................................................................................................................................................... 2232
CHARTS Economies Now Need More Debt to Generate Growth ......................................................................................................... 2233
CHARTS Emerging Markets Benchmark Underperforms US Index ...................................................................................................... 2233
CHARTS - Reserves versus World ............................................................................................................................................................ 2233
CHARTS - Current Account Balances versus GDP .................................................................................................................................. 2235
CHARTS - Emerging Markets Index versus MSCI World Index ............................................................................................................... 2236
CHARTS - SINGAPORE - Inflation ............................................................................................................................................................ 2237
CHARTS - SINGAPORE - Exports ............................................................................................................................................................ 2238
CHARTS - SOUTH KOREA ....................................................................................................................................................................... 2239
CHARTS - TURKEY - Spreads .................................................................................................................................................................. 2240
RESEARCH OF NOTE .................................................................................................................................................................................. 2241
EMERGING MARKETS - Why Asian Markets Are Collapsing .............................................................................................................. 2241
EMERGING MARKETS - History Suggests Asia Can Handle Fed Tightening ................................................................................... 2243
EMERGING MARKETS - Here's Which Emerging Markets Are Most Vulnerable To "External Shock" .......................................... 2245
EMERGING MARKETS - North Korea: Chinese Outsourcing Giant ................................................................................................... 2247
EMERGING MARKETS - Forced Changes & Advancements in the Normal "Plundering" Strategy ............................................... 2249
EMERGING MARKETS - Crisis Temporarily Halted.............................................................................................................................. 2251
EMERGING MARKETS - The plight of four Asian countries - China, India, Indonesia and Japan. ................................................. 2251
EMERGING MARKETS - Negative Current Accounts + Weak(ening) International Investment Positioning ........................................... 2257
EMERGING MARKETS - "TAPER" Shock Waves Across Asia ........................................................................................................... 2257
EMERGING MARKETS - Global Bond Yields React Together ............................................................................................................. 2259
EMERGING MARKETS - A Bumpy Ride for Emerging Markets ............................................................................................................... 2261
EMERGING MARKETS - Stunning Withdrawals.................................................................................................................................... 2267
EMERGING MARKETS - Bond Outflows Accelerating ......................................................................................................................... 2268
EMERGING MARKETS - This will make the 1997 Asian Crisis Seem Like an Early Warning .......................................................... 2270
EMERGING MARKETS - Developing Nations Feeling the Pain of Global Deleveraging Acceleration ........................................... 2272
EMERGING MARKETS - The Impact of "TAPER" ................................................................................................................................. 2275
SITUATIONAL ASSESSEMENT ................................................................................................................................................................... 2279
EMERGING MARKETS - What you Need to Know ...................................................................................................................................... 2279
EMERGING MARKETS - Comparative Ease of Doing Business........................................................................................................... 2281
EMERGING MARKETS - Importance of Employment, Equality and Per Capital Income ................................................................. 2282
ASEAN ........................................................................................................................................................................................................... 2285
ASEAN: A New Common Market .............................................................................................................................................................. 2285
ASIA ............................................................................................................................................................................................................... 2289
ASIA: CHARTS Entering More Adverse Part of the Credit Cycle .......................................................................................................... 2289
ASIA: CHARTS Real GDP Slowing, Real Funding Costs Are Rising .................................................................................................... 2290
ASIA: CHARTS Demographic Peaks of Working Age Populations ....................................................................................................... 2291
ASIA: CHARTS Impact of Demographic Change on Annual GDP Growth............................................................................................ 2292
ASIA: CHARTS Worlds 50 Busiest Container-Shipping Seaports ........................................................................................................ 2293
ASIA: CHARTS - REVENUE ..................................................................................................................................................................... 2294
ASIA: CHARTS EXPENDITURES .......................................................................................................................................................... 2294
ASIA: CHARTS SPENDING GAPS ........................................................................................................................................................ 2296
ASIA: CHARTS DEBT SERVICE ........................................................................................................................................................... 2296
ASIA: CHARTS - SINGAPORE ................................................................................................................................................................. 2298
ASIA: CHARTS INDONESIA CPI May 2014 .................................................................................................................................... 2299
ASIA: CHARTS INDONESIA CPI Aug 2013 .................................................................................................................................... 2299
ASIA: CHARTS A Short Term Dead Cat Bounce? .......................................................................................................................... 2300
ASIA: CHARTS Inflation Problems Abound ........................................................................................................................................ 2301
ASIA: CHARTS Healthier Public Debt and Borrowing Positions than DM ...................................................................................... 2301
ASIA: CHARTS - AUSTRALIA ................................................................................................................................................................... 2302
ASIA - Regional Risk-Reward .................................................................................................................................................................... 2304
ASIA - Credit Contraction Problems ...................................................................................................................................................... 2305
ASIA - Corporate Debt Levels Reflect Unintended Consequences of Mispricing & Mal-Investment ............................................. 2307
ASIA - Synchronized Markets .................................................................................................................................................................... 2309
ASIA - Caution Advised Regarding Positive South Korea Export Turnaround ......................................................................................... 2311
ASIA - Export Growth Looks Similar to Pre-2008 ................................................................................................................................. 2312
ASIA - Global Slowing Quickly a Worsening Situation Across Asia ................................................................................................. 2316
ASIA - Risks All on the Downside for Asia ........................................................................................................................................... 2317
ASIA - Demographic Headwinds ............................................................................................................................................................ 2320
ASIA - Pronounced Flight to Singapore Safety ......................................................................................................................................... 2321
LATIN AMERICA ........................................................................................................................................................................................... 2323
LATIN AMERICA Latin America Shouldn't Blame the Federal Reserve .......................................................................................... 2323
COLUMBIA Colombian Peso Leads Currency Declines as Crude Falls ......................................................................................... 2325
ARGENTINA Fewer Reserves Are a Plus for Argentine Bondholders ............................................................................................ 2325
VENEZUELA Signs of a Crack-up Boom and Dictatorship .............................................................................................................. 2326
VENEZUELA - Shortages & Hyperinflation ............................................................................................................................................ 2327
MIDDLE EAST ............................................................................................................................................................................................... 2329
TURKEY ..................................................................................................................................................................................................... 2329
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 2330
BRICS................................................................................................................................................................................................................... 2336
NEW-BRICS BRIC GDP versus World GDP Contribution Contracting ............................................................................................. 2336
BRICS Population, GDP,GDP per Capita ............................................................................................................................................ 2337
BRICS Responsible for 43% of Global Growth in 2013 .................................................................................................................... 2338
BRICS A Short Term Dead Cat Bounce? ........................................................................................................................................ 2338
BRICS Inflation Problems Abound ...................................................................................................................................................... 2340

MAY 2016 Edition


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BRICS - EU Major Contributor to EM Current Account Deficit Growth .............................................................................................. 2341


BRICS - Insufficient Levels Prompt Russian-Chinese Support .......................................................................................................... 2342
BRICS - A Development Bank-Forex Reserve Pool-African Integration ............................................................................................ 2344
BRICS - 40% of World Population and 25% of World GDP .................................................................................................................. 2345
BRICS - $3 to $13B GDP in Ten Years ................................................................................................................................................... 2348
BRICS- A World Wide Distrust of Financial Markets Building ............................................................................................................ 2351
BRAZIL........................................................................................................................................................................................................... 2353
NEW-BRAZIL Brazils 2016 Recession Outlook Worsens ..................................................................................................................... 2353
NEW-BRAZIL Recession from 2015-2017 to be the Deepest Since 1901 Borders on Depression ................................................... 2353
NEW-BRAZIL - Brazil GDP Growth Y-o-Y ................................................................................................................................................. 2354
NEW-BRAZIL Bankruptcy Escalates In Brazil 5525 In 2015 .............................................................................................................. 2354
NEW-BRAZIL Falling Currency against the USD - USDBRL ................................................................................................................. 2355
NEW-BRAZIL Rising Yields for Brazilian Companies ............................................................................................................................ 2355
NEW-BRAZIL Sharp Retail Decline ........................................................................................................................................................ 2356
NEW-BRAZIL GDP Contraction of -3.5% in 2016 and -0.5% in 2017 ................................................................................................... 2356
NEW-BRAZIL Longest Sequence of Drops in Quarterly GDP Since 1996 ............................................................................................ 2357
NEW-BRAZIL Sharp Decline in Quarterly GDP Growth in Recent Years .............................................................................................. 2357
NEW-BRAZIL High Contribution of External Sector to Growth in 2016 ................................................................................................. 2358
NEW-BRAZIL - Brazil Cut to Junk by All Three Ratings Agencies After Moody's Joins The Fray ........................................................... 2359
NEW-BRAZIL 5,525 Companies Went Bankrupt In Brazil Last Year: "It's A Legitimate Credit Crisis" ................................................. 2361
NEW-BRAZIL - xxxxx ................................................................................................................................................................................. 2364
NEW-BRAZIL - xxxxx ................................................................................................................................................................................. 2365
BRAZIL - Brazil Budget Cuts Not Enough to Avoid More Downgrades .................................................................................................... 2365
BRAZIL - Brazil's Economy Is Now A Job Destruction Machine ............................................................................................................... 2366
BRAZIL - Local Rates Hit Hardest by Swift S&P Sovereign Downgrade to Junk ..................................................................................... 2369
BRAZIL - Recession and High Rates Doomed Brazils Investment-Grade Rating ................................................................................... 2371
BRAZIL - Why Brazil Is Not Coming Back Anytime Soon ......................................................................................................................... 2373
BRAZIL - Brazil Returns to Junk as Developing Nations Feel the Squeeze ............................................................................................. 2373
BRAZIL - China Bails Out Brazil In $50 Billion Regional Power Grab ...................................................................................................... 2376
BRAZIL - Brazils Inflation-v Interest Rates Consumer Confidence Index ............................................................................................. 2383
BRAZIL - Brazils Depressed Consumer Confidence Index ...................................................................................................................... 2383
BRAZIL - Brazils Collapsing Confidence in the Construction Sector ....................................................................................................... 2384
BRAZIL - Brazil's Economy Is On The Verge Of Total Collapse ............................................................................................................... 2384
BRAZIL - Brazils Economy Just Imploded! ............................................................................................................................................... 2386
BRAZIL - Brazils economy slips into recession ........................................................................................................................................ 2389
BRAZIL - Inflation will remain high thanks to a "growth mismatch". .......................................................................................................... 2392
RUSSIA Russia Has Stopped Trying to Protect Ruble Has FX Reserves Depleted. ................................................................................ 2394
RUSSIA 2015 Russia Consensus GDP Forecast .................................................................................................................................. 2395
RUSSIA Foreign Exchange Reserves .................................................................................................................................................... 2395
RUSSIA Exchange and Interest Rate ..................................................................................................................................................... 2396
RUSSIA - Real GDP and Car Sales .......................................................................................................................................................... 2396
RUSSIA Inflation Rate ............................................................................................................................................................................ 2397
RUSSIA GDP Forecast versus USDRUB ............................................................................................................................................... 2397
RUSSIA WTI Crude versus Ruble .......................................................................................................................................................... 2398
RUSSIA Russian Stocks versus Ruble, Russian 10 Y Yield versus 5Y CDS ........................................................................................ 2398
RUSSIA Russian CDS Spreads ............................................................................................................................................................. 2399
RUSSIA Winners and Losers of Oil Price Plunge .................................................................................................................................. 2400
RUSSIA CDS Spreads Has Widened 250bp Since Mid-June ............................................................................................................... 2401
RUSSIA Russian 5Y CDS versus USDRUB versus Russian Stocks .................................................................................................... 2402
RUSSIA Crude Oil in Rubles .................................................................................................................................................................. 2403
RUSSIA Russian Reserves versus USDRUB ........................................................................................................................................ 2403
RUSSIA Falling Oil Price Weighs on Economy and the Ruble .............................................................................................................. 2404
RUSSIA Russian Ruble versus Reserves .............................................................................................................................................. 2405
RUSSIA Russian Breakeven Oil Prices versus Liquids Production ....................................................................................................... 2406
RUSSIA Russian Refining & Upstream Economics-1 ............................................................................................................................ 2407
RUSSIA Russian Refining & Upstream Economics-2 ............................................................................................................................ 2408
RUSSIA Russian Holdings of US Treasuries ......................................................................................................................................... 2409
RUSSIA Russian 9 Year Gold Buying Spree ......................................................................................................................................... 2410
RUSSIA Net YTD Gold Purchases by the Central Bank of Russia ........................................................................................................ 2410
RUSSIAN RESEARCH WE FOLLOWED THIS TRI-SEMESTER ............................................................................................................ 2412
RUSSIA Russia signs up to $100 bn BRICS fund to rival IMF............................................................................................................... 2412
INDIA.............................................................................................................................................................................................................. 2413
NEW-INDIA India Imports- Exports Y-o-Y .............................................................................................................................................. 2413
INDIA CAPEX Bottom Out? .................................................................................................................................................................... 2414
INDIA Real GDP and Car Sales ............................................................................................................................................................. 2415
INDIA Inflation ......................................................................................................................................................................................... 2416
INDIA - Inflation .......................................................................................................................................................................................... 2417
INDIA - WPI ................................................................................................................................................................................................ 2418
INDIA - Will be fine as long as it continues to reduce its deficit. ............................................................................................................... 2419
INDIA - Panic in India ................................................................................................................................................................................. 2420
INDIA - India Rupee Collapse Showing Signs of Exhaustion ............................................................................................................. 2422
INDIA - Watch Out For RE-Emergence of Food Price Inflation ........................................................................................................... 2423
SOUTH AFRICA ............................................................................................................................................................................................ 2425

US ECONOMY ..................................................................................................................................... 2427

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THE GLOBAL MACRO OVERLAY ........................................................................................................................................ 2429


MACRO - US Macro Data .................................................................................................................................................................................... 2429
CHARTS OF NOTE ....................................................................................................................................................................................... 2429
NEW- MACRO QE Correlation with Global Growth Barometer & S&P 500 .......................................................................................... 2429
NEW- MACRO Total Y-o-Y Global Export .............................................................................................................................................. 2430
NEW- MACRO MSCI World Index A Rounded Top or Consolidation? ............................................................................................... 2432
NEW- MACRO Central Bank Total Assets Fed,BoJ,BOE,ECB,PBoC ................................................................................................ 2432
NEW- MACRO Global Debt Growth ....................................................................................................................................................... 2433
NEW- MACRO 10 Fold Increase in Central Banks Assets in 20 Years. ................................................................................................ 2433
NEW- MACRO Global PMI ..................................................................................................................................................................... 2435
NEW- MACRO Global GDP % under Negative Rates ........................................................................................................................... 2435
NEW- MACRO Global Y-o-Y CPI Percentage Change .......................................................................................................................... 2436
NEW- MACRO Benchmark NIRP Rates ................................................................................................................................................ 2437
NEW- MACRO Baltic Dry Index At levels Not Seen Since the 1980s ................................................................................................ 2437
MACRO EM Wave is the Third Wave in the Global Financial Crisis...................................................................................................... 2438
MACRO Deteriorating EM FX, Equity and Debt .................................................................................................................................. 2438
MACRO Global Slowdown Only Getting Worse - China ........................................................................................................................ 2439
MACRO Global Slowdown Only Getting Worse - India .......................................................................................................................... 2440
MACRO Global Import-Export Trends .................................................................................................................................................... 2441
MACRO Developed World Import-Export Trends Has Nearly Halved Since 2000 ................................................................................ 2443
MACRO Emerging Market Import-Export Trends Has Also Fallen ........................................................................................................ 2444
RESEARCH OF NOTE .................................................................................................................................................................................. 2445
NEW-MACRO- The 8 Major Macro Economic Problems The Next President Will Face .......................................................................... 2445
Problem #1: Japan ............................................................................................................................................................................... 2445
Problem #2: China ................................................................................................................................................................................ 2445
Problem #3: Australia .......................................................................................................................................................................... 2446
Problem #4: The Middle East .............................................................................................................................................................. 2446
Problem #5: Russia .............................................................................................................................................................................. 2446
Problem #6: Europe ............................................................................................................................................................................. 2446
Problem #7: The Americas .................................................................................................................................................................. 2447
Problem #8: The United States ........................................................................................................................................................... 2447
A Recession is Inevitable .................................................................................................................................................................... 2447
NEW-MACRO- Deutsche Bank's Dire Warning On Global Trade: "The Currency War Is Futile" ............................................................ 2447

US INVESTMENT CYCLE ...................................................................................................................................................... 2451


CHARTS OF NOTE ....................................................................................................................................................................................... 2452
NEW-CHART Professionals Moving to the Sidelines in a Significant Fashion in US Equities .................................................... 2452
CHART Financial Cycles and Crisis Are Becoming Longer & Deeper ........................................................................................... 2453
CHART The Business, Credit and Rate Cycles ................................................................................................................................. 2453
CHART The Business, Credit and Rate Cycles ................................................................................................................................. 2454
CHART A Secular Problem on the Verge of Also Being a Business /Credit /Rate Cycle Problem .............................................. 2454
CHART Business Cycle Surprise Index ............................................................................................................................................. 2455
CHART Boom-Bust Cycle In Stocks ................................................................................................................................................... 2455
RESEARCHOF NOTE ................................................................................................................................................................................... 2456
NEW-INVESTMENT Bonds & Stocks Unhinged from Reality- Financial reversal will fuel backlash against governments and
central banks ............................................................................................................................................................................................ 2456
GORD'S BIG PICTURE ECONOMIC CYCLE ..................................................................................................................................................... 2458
ECONOMIC INDICATORS .................................................................................................................................................................................. 2459
MONTHLY INDICATORS OF NOTE ............................................................................................................................................................. 2459
NEW-RESEARCH End of the Benign Cycle. ................................................................................................................................... 2459
RESEARCH - 8 Charts That Prove the US Is Already In A Recession ............................................................................................... 2460
RESEARCH - 16 Signs That The Economy Has Stalled Out And The Next Economic Downturn Is Here ..................................... 2465
THE CURRENT BUSINESS CYCLE - SITUATIONAL ANALYSIS ..................................................................................................................... 2469
BUSINESS CYCLE - JOBS > CONFIDENCE > CONSUMPTION > GROWTH CYCLE.................................................................................... 2469
BUSINESS CYCLE - JOBS ................................................................................................................................................................................. 2470
SOME HIGHLIGHTS ..................................................................................................................................................................................... 2470
CHARTS & TABLES OF NOTE ..................................................................................................................................................................... 2474
NEW-CHARTS Waiter / Bartender versus Manufacturing Jobs Post Dec 2007 ................................................................................. 2474
NEW-CHARTS NRA Restaurant Performance Index Post 2010 ........................................................................................................ 2474
CHARTS October NFP 60K below Estimates at 142K ........................................................................................................................... 2475
CHARTS Change in Civilian Employment: August 2015 ....................................................................................................................... 2475
CHARTS Peaks In LMCI Leads Declines in Employment...................................................................................................................... 2476
CHARTS September 2015 Monthly Job Change by State Bottoms up Says 22K Jobs Lost ............................................................. 2476
CHARTS Initial Jobless Claims .............................................................................................................................................................. 2477
CHARTS Increased Job Openings not a Sign of Better Employment ................................................................................................... 2479
NEW-CHARTS - U3 & U6 .......................................................................................................................................................................... 2480
NEW-CHARTS - Employment Situation Summary ................................................................................................................................... 2480
BUSINESS CYCLE - CONSUMER & BUSINESS SENTIMENT ......................................................................................................................... 2487
SENTIMENT & CONFIDENCE Shifting Trend ................................................................................................................................................. 2487
NEW-SENTIMENT - Consumer, Investor & Trader ............................................................................................................................................. 2488
NEW-Consumer Confidence - Conference Board ........................................................................................................................................ 2488
NEW-Consumer Sentiment - Michigan ......................................................................................................................................................... 2491
NEW-Consumer Comfort - Bloomberg .......................................................................................................................................................... 2493

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NEW-American Association of Independent Investors ................................................................................................................................. 2495


NEW-Investors Intelligence ........................................................................................................................................................................... 2495
NEW-National Association of Active Investment Managers (NAAIM) .......................................................................................................... 2496
NEW-Small Business Optimism .................................................................................................................................................................... 2498
NEW-Percentage Stocks above 50 & 200 DMA ........................................................................................................................................... 2500
NEW-Margin Levels ....................................................................................................................................................................................... 2501
Real Margin Debt as % of GDP ..................................................................................................................................................................... 2507
Margin Debt versus S&P 500 ........................................................................................................................................................................ 2507
Mutual Fund Cash Levels v S&P 500 ............................................................................................................................................................ 2509
NEW-OSCILLATORS & BREADTH: Indicators of Importance .......................................................................................................................... 2512
NEW-NYSE Overbought / Oversold .............................................................................................................................................................. 2512
NEW-OEX Open Interest (Puts/Calls) ........................................................................................................................................................... 2513
NEW-TRIN ..................................................................................................................................................................................................... 2514
NEW-McClellan Oscillator ............................................................................................................................................................................. 2515
CHARTS OF NOTE ............................................................................................................................................................................................. 2516
CHARTS Small Business Sentiment Trending Down Strongly .................................................................................................................. 2516
CHARTS Small Business Sentiment Margin Squeeze ........................................................................................................................... 2516
CHARTS Bloomberg Consumer Comfort versus Nasdaq ......................................................................................................................... 2517
SENTIMENT & CONFIDENCE Shifting Trend ................................................................................................................................................. 2518
CHARTS Economic Surprise Index lower highs, lower lows and a reluctant bounce ............................................................................ 2518
CHARTS Nominal & Real Household Spending Expectations .................................................................................................................. 2519
CHARTS Household Spending Expectations by Income Bucket .............................................................................................................. 2519
CHARTS A Very Neutral (Highly Unusual) Bull Market ............................................................................................................................. 2520
CHARTS Historical Swings in Sentiment ................................................................................................................................................... 2520
CHARTS Fed Doing the Lending Not the Banks What Are the Banks Worried About?...................................................................... 2522
CHARTS Investors Intelligence Bulls & Bears ........................................................................................................................................... 2522
CHARTS A/D Line Diverging from Price, Suggesting Weakening Momentum ......................................................................................... 2523
RESEARCH OF NOTE ........................................................................................................................................................................................ 2524
SENTIMENT Oblivious To Risk - Complacency Still Reigns .................................................................................................................. 2524
SENTIMENT UMich Consumer Confidence Tumbles to 12-Month Lows with Biggest Miss on Record................................................... 2528
SENTIMENT Elderly Americans' Confidence Collapses To 11-Month Lows (As Middle-Aged Hope Surges) ......................................... 2529
BUSINESS CYCLE CONSUMPTION ............................................................................................................................................................... 2531
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 2531
CHARTS & TABLES OF NOTE ..................................................................................................................................................................... 2532
NEW-CHARTS US Spending Consumption in 2015 Was in Healthcare Up Dramatically ................................................................. 2532
NEW-CHARTS US Spending Unaffordable Housing Shifting to Unaffordable Rentals...................................................................... 2532
NEW-CHARTS US Spending Gap Between Earnings and House Prices Now Larger than During Housing Bubble........................ 2533
CHARTS October Retail Sales Control Group Y-o-Y & Sequential Change ......................................................................................... 2534
CHARTS October Retail Y-o-Y Sales ..................................................................................................................................................... 2534
CHARTS Retail Sales Ex Autos M-o-M .................................................................................................................................................. 2535
CHARTS Monetary Velocity Declines as Excess Leverage Weighs on Consumption .......................................................................... 2535
CHARTS Consumer Credit Car Loans ................................................................................................................................................... 2536
CHARTS Consumer Loans Owned by the Government ........................................................................................................................ 2536
CHARTS Student & Car Loans ............................................................................................................................................................... 2538
CHARTS Total Non-Revolving Credit ..................................................................................................................................................... 2538
CHARTS August Sequential Change in Revolving and Non-Revolving Credit ..................................................................................... 2539
CHARTS Gas Prices Below $2/Gallon by December? .......................................................................................................................... 2539
CHARTS Aggregate Income Proxy versus Retail Sales ex Auto and Gas ............................................................................................ 2540
CHARTS Consumption Items Sampling - Y-o-Y Growth........................................................................................................................ 2540
RESEARCH OF NOTE .................................................................................................................................................................................. 2542
NEW-CONSUMPTION This Is What Americans Spent Most Money On In 2015 Spoiler Alert: Obamacare ..................................... 2542
BUSINESS CYCLE - GROWTH .......................................................................................................................................................................... 2543
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 2543
CHARTS & TABLES OF NOTE ..................................................................................................................................................................... 2547
NEW-CHARTS Atlanta Fed Q1 GDP Forecast Tumbles to 1.4% .......................................................................................................... 2547
NEW-CHARTS Atlanta Fed Q1 GDP Forecast Trend is steadily down ................................................................................................. 2548
NEW-CHARTS Durable Goods Orders Ex-Transports Y-o-Y ................................................................................................................ 2548
NEW-CHARTS Markit PMI Both Services and Manufacturing falling Since June 2014 ..................................................................... 2549
NEW-CHARTS Markit Composite PMI and US GDP ............................................................................................................................. 2549
NEW-CHARTS US Economic Growth in 2015 Was in Healthcare Consumption .................................................................................. 2550
CHARTS Strong Dollar, High Inventories to Slow US Factory Output ................................................................................................... 2551
CHARTS US ISMs 3 Mo MA................................................................................................................................................................... 2551
CHARTS September Survey Data versus Non Farm Payrolls ............................................................................................................... 2552
CHARTS Regional Surveys for September versus ISM PMI (August) .................................................................................................. 2553
CHARTS Regional Manufacturing Surveys versus Forward EPS Estimates ........................................................................................ 2554
CHARTS Historical Regional Index Comparisons Last Seen in 2008 ................................................................................................ 2554
CHARTS Predicted US Quarterly GDP Grow Q-o-Q Annualized ....................................................................................................... 2555
CHARTS Predicted US Annual Growth % Through 2024 ...................................................................................................................... 2555
CHARTS Predicted US Growth Compared to UK and Eurozone .......................................................................................................... 2556
RESEARCH OF NOTE .................................................................................................................................................................................. 2557
NEW-GROWTH Core Durable Goods Tumble For 13th Month, Longest Non-Recessionary Stretch In 70 Years ............................... 2557
NEW-GROWTH PMI Services Signals "Softest Expansion of New Business Since 2009 .................................................................... 2559
NEW-GROWTH Healthcare Is About To Surpass Housing As The Biggest Source Of American "Growth" ............................... 2561
NEW-GROWTH X .................................................................................................................................................................................... 2563

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NEW-GROWTH X .................................................................................................................................................................................... 2563


ECONOMIC CYCLE, INVESTMENT CYCLE, SECTOR ROTATION ................................................................................................................. 2564

US PUBLIC POLICY OBAMACARE IN REALITY A STEALTH TAX ................................................................................... 2572


CHARTS & TABLES OF NOTE ..................................................................................................................................................................... 2573
NEW-CHARTS The Changing Shape of US Income Distribution .......................................................................................................... 2573
NEW-CHARTS US infrastructure spending as a % of GDP is the lowest it has been since 1950 ........................................................ 2574
CHARTS The Cost of Healthcare By Country Spending Per Person ................................................................................................. 2575
CHARTS The Bankrupt US Healthcare System .................................................................................................................................. 2575
CHARTS Rise in Number of Homeless Children ................................................................................................................................... 2576
CHARTS One-Third of All Homeless Live in These 10 Cities ................................................................................................................ 2577
CHARTS Trends in American Public Schooling Since 1970 .................................................................................................................. 2578
CHARTS Size of US Army Since 1946................................................................................................................................................... 2578
CHARTS Lack of Trust in Government to Handle International & Domestic Problems ......................................................................... 2579
CHARTS Changing Presidential Stance ................................................................................................................................................ 2580
CHARTS Public Support to Withdraw from Union .................................................................................................................................. 2580
CHARTS - US Incarceration Rate Out of Control ...................................................................................................................................... 2581
RESEARCH OF NOTE .................................................................................................................................................................................. 2582
NEW-POLICY - These Are the 8 Biggest Barriers to Economic Growth .................................................................................................. 2582
NEW-POLICY Obamacare: Written by Insurance companies to benefit Insurance companies............................................................ 2583
NEW-POLICY Former UK Ambassador To Syria: US/UK Foreign Policy Is Doomed, Even Corrupt ........................................... 2585

MONETARY POLICY GLOBAL SLOW DOWN FORCES FED TO HOLD ON RATE INCREASE ......................................................... 2589
CHARTS & TABLES OF NOTE ........................................................................................................................................................................... 2589
NEW-CHARTS: US Monetary Base Growth versus S&P 500 ...................................................................................................................... 2590
NEW-CHARTS: Post QE-3- US Dollar Index ................................................................................................................................................ 2590
NEW-CHARTS: Post QE-3- S&P 500 ........................................................................................................................................................... 2591
NEW-CHARTS: Post QE-3- S&P 500 PE Ratio ............................................................................................................................................ 2591
NEW-CHARTS: Post QE-3- MSCI World Index ............................................................................................................................................ 2592
NEW-CHARTS: Post QE-3- HYG .................................................................................................................................................................. 2593
NEW-CHARTS: Post QE-3- LQD .................................................................................................................................................................. 2594
NEW-CHARTS: Post QE-3- LQD .................................................................................................................................................................. 2594
NEW-CHARTS: Feds US PCE Y-o-Y ........................................................................................................................................................... 2595
NEW-CHARTS: US Industrial Production ..................................................................................................................................................... 2595
NEW-CHARTS: US Industrial Production ..................................................................................................................................................... 2596
NEW-CHARTS: US Durable Goods New Orders ......................................................................................................................................... 2596
CHARTS: US Monetary Velocity Declines as Excess Leverage Weighs on Consumption .......................................................................... 2597
CHARTS: Velocity of Money Shows Transmission System Broken ............................................................................................................. 2597
CHARTS: Interest Rates Reflect Economic Growth & Inflation .................................................................................................................... 2598
CHARTS: Fed Balance Sheet Change versus S&P 500 .............................................................................................................................. 2598
CHARTS: Fed Policy Initiatives versus S&P 500 Actions ............................................................................................................................. 2599
CHARTS: Total US Credit Old versus New Series .................................................................................................................................... 2599
CHARTS: Banks Treasuries Stash Boosts Case for Fed Delay .................................................................................................................. 2600
CHARTS: US Treasuries Purchased by Domestic Mutual Funds ................................................................................................................ 2600
CHARTS: Total Debt and Loans versus US GDP ......................................................................................................................................... 2601
CHARTS: Credit Markets Instruments All Sectors- Liability Levels ........................................................................................................... 2601
CORE CHARTS ................................................................................................................................................................................................... 2602
QUANTITATIVE EASING .............................................................................................................................................................................. 2602
NEW-CORE: QE Stages versus US Treasury Market .............................................................................................................................. 2602
NEW-CORE: QE Stages versus US Equity Market................................................................................................................................... 2602
NEW-CORE: QE Correlation with US Equity Market ................................................................................................................................ 2603
NEW-CORE: US Monetary Base Growth Correlation with US Equity Market .......................................................................................... 2603
NEW-CORE: QE Correlation with Global Growth Barometer & S&P 500 ................................................................................................ 2604
NEW-CORE: Expect Exponential Growth in the Fed Balance Sheet ....................................................................................................... 2604
NEW-CORE: Total Assets Held by the Federal Reserve .......................................................................................................................... 2606
NEW-CORE: Exponential Growth in US Credit a Requirement ................................................................................................................ 2606
RESEARCH OF NOTE ........................................................................................................................................................................................ 2607
NEW-RESEARCH BEN BERNANKE: What tools does the Fed have left? Part 1: Negative interest rates ............................................. 2607
NEW-RESEARCH BEN BERNANKE: What tools does the Fed have left? Part 2: Targeting longer-term interest rates ........................ 2613
NEW-RESERCH Why Lower Gasoline Prices Are Not Stimulating The Economy ................................................................................... 2616

FISCAL POLICY RECIPE FOR COLLAPSE: RISING MILITARY & SOCIAL WELFARE SPENDING ................................................... 2618
FEDERAL DEBT HOLDINGS & FINANCING...................................................................................................................................................... 2620
CHARTS OF NOTE ....................................................................................................................................................................................... 2620
FINANCING The Debt Ceiling Debt Limit is Likely to Fall in November ..................................................................................................... 2620
FINANCING CHINA SELLING The Mysterious Belgium Treasury Holder Has Started Selling .............................................................. 2620
FINANCING CHINA SELLING China & Belgium Holdings v China Forex Reserves-1 ........................................................................... 2621
FINANCING CHINA SELLING China & Belgium Holdings v China Forex Reserves-2 ........................................................................... 2621
FINANCING CHINA SELLING China & Belgium Holdings Change ........................................................................................................ 2622
FINANCING Breakdown of US Debt Holdings as of 2014 .......................................................................................................................... 2622
CHARTS US Federal Government Debt to GDP ....................................................................................................................................... 2623
CHARTS Drivers of US Debt ...................................................................................................................................................................... 2624
CHARTS Total Government Expenditures versus Real GDP .................................................................................................................... 2625
CHARTS US Debt About to Pass $18T and 102% of GDP ....................................................................................................................... 2625
CHARTS US Non-Financial Debt-to-GDP Since 1952 .............................................................................................................................. 2626

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FEDERAL BUDGET SPENDING ......................................................................................................................................................................... 2627


NEW-CHARTS Where Did Every Dollar in Spending Go? ........................................................................................................................ 2627
CHARTS Mandatory versus Discretionary Spending ................................................................................................................................. 2627
CHARTS Interest Costs to Dwarf Virtually Every Federal Expense .......................................................................................................... 2628
CHARTS Looming Increases in Baby-Boomer Driven Deficits .................................................................................................................. 2629
CHARTS Federal GAAP Based Deficit Growth & Federal Obligations Growth ......................................................................................... 2629
CHARTS - US Government Budget Surplus / Deficit .................................................................................................................................... 2630
CHARTS - Government Receipts & Outlay Growth Improves Significantly .................................................................................................. 2630
CHARTS - Federal Budget Surplus / Deficit .................................................................................................................................................. 2631
CHARTS - Real Federal Government Purchases ......................................................................................................................................... 2631
FEDERAL BUDGET - What You Need to Know ................................................................................................................................................. 2633
BUDGET - President Obama's Entire Budget In One Chart .................................................................................................................... 2634
BUDGET - A Budget That Institutionalizes Big Government .................................................................................................................. 2635
BUDGET - Budget Deficit Shrinking and Shrinking Infrastructure Spending ................................................................................................ 2640
RESEARCH - CROMNIBUS - The Real Reason Why It Needed to be Passed .......................................................................................... 2641
RESEARCH - $89.5 trillion in liabilities ......................................................................................................................................................... 2643
RESEARCH - The Federal Government is "cooking the books"! ................................................................................................................. 2647
RESEARCH NIA 2015 U.S. Debt Crisis Report ......................................................................................................................................... 2652
STATE & LOCAL BUDGETS ............................................................................................................................................................................... 2662
NEW-CHARTS Connecticut Bond Yield Spreads Over AAA Munis .......................................................................................................... 2662
CHARTS State & Local Tax Revenues ...................................................................................................................................................... 2662
NEW-RESEARCH - Countdown To Insolvency Begins For Chicago Pensions As State Supreme Court Rejects Reform Bid ...... 2663
NEW-RESEARCH - Connecticut Credit Risk Spikes to Record High ..................................................................................................... 2665
RESEARCH - Almost Half of US States Are Officially Broke .................................................................................................................. 2667
RESEARCH - State & Local Government Crisis ....................................................................................................................................... 2671
RESEARCH - State & Local Government Drag ............................................................................................................................................ 2677
UNFUNDED LIABILITIES .................................................................................................................................................................................... 2682
NEW-Charts Revenues Completely Consumed By Major Entitlements & Interest by 2025 ..................................................................... 2682
NEW-Charts In FY 2014 Medicaid Accounted for 8% of Federal Outlays ................................................................................................. 2682
NEW-Charts Medicare Spending is a Growing Share of the Federal Budget ........................................................................................... 2684
RESEARCH Private Pension Fund Levels Fall Behind ............................................................................................................................. 2685
RESEARCH Professor Laurence Kotlikoff on the $210T Fiscal Gap ...................................................................................................... 2689
US REGULATORY COSTS ................................................................................................................................................................................. 2692
CHARTS Annual Cost of Federal Regulation 2012, $1.863T ................................................................................................................. 2692
RESEARCH Investor Uncertainty............................................................................................................................................................... 2692
US TAX POLICY & ISSUES ................................................................................................................................................................................ 2694
NEW-CHARTS Marginal Tax Rates Must Nearly Double to Fund Entitlement Spending ......................................................................... 2694
CHARTS 7 Corporate CEOs Paid More Than Corporation Paid Tax ........................................................................................................ 2695
CHARTS - Americas 100 highest-paid CEOs, 29 received more in pay than company federal income taxes ........................................... 2696
CHARTS Employed Population of America Tax Exposure ..................................................................................................................... 2699
CHARTS US Has the Highest Nominal Corporate Tax Rate in the Industrialized World ....................................................................... 2699
CHARTS How Banks Use Dividend Arbitrage to Reduce Client Tax ...................................................................................................... 2700
RESEARCH - Tax Rate Comparisons ........................................................................................................................................................ 2701
RESEARCH - Payroll Tax Holiday ................................................................................................................................................................ 2701
RESEARCH - Taxes & Spending .................................................................................................................................................................. 2702
RESEARCH - Avoiding Taxes ..................................................................................................................................................................... 2706
MISC CHARTS & TABLES OF NOTE ................................................................................................................................................................. 2709
NEW-CHARTS Size of US military Spending Dwarfs all others- Spends more than the Next 15 Combined ........................................... 2709
CHARTS Competing Visions of Government ............................................................................................................................................. 2709
CHARTS - Sovereign Debt ............................................................................................................................................................................ 2711
CHARTS - Growing Government Dependence ............................................................................................................................................. 2712
CHARTS - Coming Demographic Shock ....................................................................................................................................................... 2712
CHARTS - Fiscal Cliff Outcome .................................................................................................................................................................... 2716

KEY DRIVERS MUST HAVE CATALYSTS OF CHANGE ................................................................................................... 2718


EMPLOYMENT .................................................................................................................................................................................................... 2718
CHARTS & TABLES ...................................................................................................................................................................................... 2719
NEW-CHARTS Waiter / Bartender versus Manufacturing Jobs Post Dec 2007 ................................................................................. 2719
NEW-CHARTS NRA Restaurant Performance Index Post 2010 ........................................................................................................ 2720
NEW-CHARTS NRA Restaurant Performance Index Pre 2010.......................................................................................................... 2721
CHARTS Labor Force Participation Rate versus Food Stamp Participants .......................................................................................... 2721
CHARTS World Youth Unemployment A Crisis .................................................................................................................................. 2721
CHARTS Change in Civilian Employment since December 2007 ......................................................................................................... 2722
CHARTS Total Foreign-Born versus Native-Born Workers since Dec 2007 ......................................................................................... 2723
CHARTS Manufacturers versus Waiter/Bartenders Since 2007 ............................................................................................................ 2724
RESEARCH OF NOTE .................................................................................................................................................................................. 2725
NEW-EMPLOYMENT The "Restaurant Recovery" Is Over: Casual Dining Sales Tumble For Fourth Straight Month ......................... 2725
REAL DISPOSABLE INCOME ............................................................................................................................................................................ 2728
CHARTS & TABLES ..................................................................................................................................................................................... 2728
NEW-CHARTS Wages as a percentage of GDP have been falling for decades ................................................................................... 2728
NEW-CHARTS Middle class wealth is based not in stocks but in the family home ............................................................................... 2728
NEW-CHARTS Inflation-adjusted household income has dropped back to levels first reached in the 1980s ...................................... 2730
NEW-CHARTS Wages have declined regardless of educational attainment ........................................................................................ 2730
NEW-CHARTS US Productivity versus Wage Growth 1947-Now ...................................................................................................... 2731

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NEW-CHARTS US Productivity versus Non-Supervisory Compensation 1947-Now ......................................................................... 2731


NEW-CHARTS Productivity has been slipping since around 2003: Alan Greenspan:"Productivity is dead ........................................ 2732
NEW-CHARTS Middle class household wealth has absolutely cratered since the top of the housing bubble in 2007 ........................ 2732
NEW-CHARTS Income gains have all flowed to the top 10% ............................................................................................................... 2733
NEW-CHARTS Higher education and healthcare have exploded higher .............................................................................................. 2735
CHARTS Average Hourly Earnings of all Employees Total Private .................................................................................................... 2736
CHARTS Individuals Annually Receiving Foods Stamps ....................................................................................................................... 2736
CHARTS Homeless among Students is Growing .................................................................................................................................. 2737
CHARTS Stagnant Middle Class Wages ................................................................................................................................................ 2737
CHARTS Median Earnings by Sex ......................................................................................................................................................... 2738
CHARTS Disconnect Between Productivity and Typical Workers Compensation 1948-2014 ........................................................... 2739
CHARTS Unemployment Rate is close to 24% according to Shadow Stats ......................................................................................... 2740
CHARTS Non-Farm Payrolls less HES Complex ................................................................................................................................... 2740
CHARTS Childcare Costs Surge Past Rent, Tuition in Most of US ....................................................................................................... 2741
CHARTS Illinois the Biggest User of Food Stamps in Mid-West ........................................................................................................... 2742
CHARTS Illinois has Regained Few Manufacturing Jobs Since the Great Recession .......................................................................... 2742
CHARTS Food Stamps Outpace Manufacturing Jobs 25-1 in Illinois .................................................................................................... 2742
CHARTS Debt by Generation ................................................................................................................................................................. 2743
RESEARCH OF NOTE .................................................................................................................................................................................. 2745
DI What Killed The US Middle Class? .................................................................................................................................................... 2745
US RESIDENTIAL REAL ESTATE ...................................................................................................................................................................... 2754
CHARTS & TABLES ...................................................................................................................................................................................... 2754
NEW-POLICY Renter versus Owner Occupied Housing Units Since 1996..................................................................................... 2754
NEW-POLICY Home prices are floating out of reach for average wage earners ........................................................................... 2754
NEW-POLICY US Home Price Growth versus Wage Growth ........................................................................................................... 2755
NEW-POLICY Pending Home Sales Falling ........................................................................................................................................ 2755
NEW-POLICY Existing Home Sales M-o-M ......................................................................................................................................... 2756
NEW-POLICY Pending Home Sales Falling ........................................................................................................................................ 2756
NEW-POLICY New Home Sales Y-o-Y ................................................................................................................................................. 2757
NEW-POLICY Total New Home Sales vs Median New Home Sales Prices ..................................................................................... 2758
POLICY US Cities with Highest Median Prices of Single-Family Homes........................................................................................ 2759
POLICY NAHB Sentiment Much Higher than Permits and Starts? .................................................................................................. 2759
POLICY Flattenening NAHB Sentiment .............................................................................................................................................. 2760
POLICY New Homes Sales versus Ave Wage Grow Y-0-Y versus MBA 30Y rate versus Real Median Inc ................................ 2761
POLICY Mortgage Purchase Application Index versus Fed Balance Sheet ................................................................................... 2762
POLICY Total News Home Sales v Median New Home Sale Price .................................................................................................. 2763
POLICY San Francisco Y/Y Price Increase Indicator ........................................................................................................................ 2763
POLICY Meaningful Housing Recovery On Hold Until Spring ......................................................................................................... 2765
POLICY Housing Starts ........................................................................................................................................................................ 2765
POLICY Existing & New Home Sales .................................................................................................................................................. 2766
POLICY Home Ownership Rate versus Rental Rate ......................................................................................................................... 2766
POLICY Mortgages Past Due and Foreclosure Starts ................................................................................................................... 2767
POLICY Mortgage Spreads .................................................................................................................................................................. 2767
POLICY Lumber Sales .......................................................................................................................................................................... 2768
RESEARCH OF NOTE .................................................................................................................................................................................. 2771
NEW-RESIDENTIAL Housing Will Support, Not Lead, U.S. Growth This Time .............................................................................. 2771
NEW-RESIDENTIAL For the Average American, Owning A Home Is Increasingly Unaffordable ................................................ 2773
NEW-RESIDENTIAL New Home Sales Plunge Most Since June 2014 ............................................................................................. 2776
NEW-RESIDENTIAL Existing Home Sales Crash Most In 6 Years: NAR Blames Slowing Economy, Bubbly Home Prices ..... 2778
US COMMERCIAL RETAIL REAL ESTATE ....................................................................................................................................................... 2782
CHARTS & TABLES OF NOTE ..................................................................................................................................................................... 2782
CHARTS Vacancy Rate - Indoor Malls versus Strip Malls ..................................................................................................................... 2782
CHARTS McDonalds Global Sales Fall 2.5% - 35,000 Franchise Operators In Trouble...................................................................... 2782
CHARTS McDonalds US Same Store Sales Down ~4% Y-o-Y ............................................................................................................ 2783
CHARTS Top US Franchise Defaulters ................................................................................................................................................. 2783
CHARTS Online Retailers Beginning to Dominate Worlds Largest Retailers by Market Cap .............................................................. 2784
CHARTS Shippers Being Squeezed By Online Retailers ...................................................................................................................... 2785
CHARTS Consumer Discretionary Underperforming Consumer Staples Signs of Increasing Squeeze ............................................ 2785
CHARTS Discretionary Retail Sales Trend ............................................................................................................................................ 2786
CHARTS US Retail Sales Ex-Auto & Parts ............................................................................................................................................ 2787
CHARTS Retail Sales Ex-Auto Adjusted for Inflation & Population Growth .......................................................................................... 2788
CHARTS Retail Space Opened Pre-2008 versus Current Rate ............................................................................................................ 2789
CHARTS CMBS Recovered Somewhat but Malls In Trouble ................................................................................................................ 2789
CHARTS Department Store Sales Continue to Erode ........................................................................................................................... 2790

SPECIAL FOCUS US RECESSION RUMBLINGS .............................................................................................................. 2791


US RECESSION RUMBLINGS ........................................................................................................................................................................... 2791
CHARTS OF NOTE ....................................................................................................................................................................................... 2792
NEW-RECESSION Recession Risks Rising as Profits Fall By Most Since 2008 .................................................................................. 2792
NEW-RECESSION Durable Goods Orders Ex-Transports Y-o-Y ......................................................................................................... 2793
NEW-RECESSION Markit Composite PMI and US GDP ...................................................................................................................... 2793
NEW-RECESSION A US Recession is now a VERY Likely Outcome! ................................................................................................. 2794
NEW-RECESSION Manufacturing Indicators & Industrial Production In Recession Territory ............................................................. 2795
NEW-RECESSION The Real Employment Economic Picture & Recessionary Driver ......................................................................... 2795
NEW-RECESSION Inflation Creeping Into Recessionary Statistics ..................................................................................................... 2796
NEW-RECESSION 15-month Continuous Y-o-Y drop in Factory orders Historically Has Signaled A Recession for 60 Years ........... 2797

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NEW-RECESSION Productivity Slows As Recoveries Age (Y-o-Y%) ................................................................................................... 2797


NEW-RECESSION St.Louis Recession Probability ............................................................................................................................... 2798
NEW-RECESSION Recession Probability Based on Probit Model ....................................................................................................... 2798
NEW-RECESSION Recession Probability The Economic Output Composite Index .......................................................................... 2799
NEW-RECESSION Recession Probability HY Spreads Have not Traded at Current Levels Outside a US Recession .................... 2799
NEW-RECESSION Recession Probability Market Sentiment Can Become A Driver of Recessions ................................................ 2800
NEW-RECESSION Recession Probability Inflation tends to Rise Into and During a Recession ....................................................... 2800
NEW-RECESSION Wholesale Inventories -to - Sales ........................................................................................................................... 2801
NEW-RECESSION Industrial Production Is Rolling Over ...................................................................................................................... 2801
NEW-RECESSION US Recession Probabilities .................................................................................................................................... 2803
RECESSION We are already in a US GDP Recession ......................................................................................................................... 2803
RECESSION HY Close to 2001 Recession Levels ................................................................................................................................ 2804
RECESSION US Recession Cycle Suggests Economic & Earnings Cycle May Be Close To Ending......................................... 2805
RECESSION US Recession Cycle Suggests Cycle May Be Close To Ending ............................................................................... 2805
RECESSION Current Economic Cycle Is Getting Old In The Tooth ............................................................................................ 2806
RECESSION Average Monthly Job Growth Deteriorating ..................................................................................................................... 2806
RECESSION Annual Percent Change In Real GDP .............................................................................................................................. 2807
RECESSION US Manufacturing Sector Recession ............................................................................................................................... 2807
RECESSION Large Profit Margin Declines Coincides With Recessions ............................................................................................... 2808
RECESSION Buybacks Drop on Reduced Free Cash Flow Drop Compared to Previous Recession ............................................... 2808
RECESSION Annual % Change in 12Mo Forward EPS Expectations Turn Negative .......................................................................... 2809
RECESSION US Recession Estimates Pop .......................................................................................................................................... 2809
RECESSION US Recession Indicator & Relative Performance of Stocks & Bonds.............................................................................. 2810
RECESSION Real S&P 500 Index with Historical Recessions .............................................................................................................. 2810
RECESSION September Survey Data versus Non Farm Payrolls ........................................................................................................ 2811
RECESSION Regional Surveys for September versus ISM PMI (August) ............................................................................................ 2811
RECESSION Regional Manufacturing Surveys versus Forward EPS Estimates .................................................................................. 2812
RECESSION Historical Regional Index Comparisons Last Seen in 2008 .......................................................................................... 2812
RECESSION Global Oil Consumption Leads Economic Growth Trend is Down Global Headwinds .............................................. 2813
RECESSION Gross Domestic Income versus Wilshire 5000 Tells the Story ..................................................................................... 2814
RECESSION CT 2015 Revenue Recession .......................................................................................................................................... 2814
RECESSION Q2 2015 Revenue Recession .......................................................................................................................................... 2815
RECESSION 4 Consecutive months of y/y Spending Declines ............................................................................................................. 2815
RECESSION BOA: Retail sales ex-autos, plunged 0.8% mom seasonally adjusted.......................................................................... 2816
RECESSION Top 10 US Market Areas Signal Retail Problem Underway ............................................................................................ 2816
RECESSION Wholesale Inventories to Sales Spiking To Areas Seen During Recession Trends ....................................................... 2817
RECESSION Wholesale Inventories Less Wholesale Sales ................................................................................................................. 2818
RECESSION Wholesale Inventories vs GDP Trends ............................................................................................................................ 2818
RECESSION Auto Inventories to Sales ................................................................................................................................................. 2819
RECESSION Falling Collateral and Residuals Undermine Real Growth ............................................................................................ 2819
RECESSION Coincident / Lagging Indicator Ratio versus Recessions ................................................................................................. 2820
RECESSION Annual Change in Durable Goods Orders v Recessions ................................................................................................. 2820
RECESSION Durable Goods v Core-Durable Goods (Ex Defense) versus Recessions ...................................................................... 2821
RECESSION Real Gross Domestic Investment versus Recessions ..................................................................................................... 2821
RECESSION Total Real Private Fixed Investment as % of Real GDP versus Recessions .................................................................. 2822
RECESSION Businesses Operate Against Actual Demand versus Recessions .................................................................................. 2823
RECESSION ISM Composite Index versus Recessions........................................................................................................................ 2824
RECESSION Capacity Utilization versus Industrial Production versus Recessions ............................................................................. 2824
RECESSION Retail Sales (NSA) Annual % Chg of 12 Month Average versus Recessions ................................................................. 2825
RECESSION Monthly Retail Control Purchases Y-o-Y % Chg versus Recessions......................................................................... 2825
RECESSION Major Economic Trends.................................................................................................................................................... 2826
NEW-RESEARCH OF NOTE ........................................................................................................................................................................ 2827
NEW- RECESSION Economists are starting to warn about the risk of a new U.S. recession .............................................................. 2827
NEW- RECESSION Economists Finally Admit, Odds Of A US Recession Are On The Rise ............................................................... 2830
RECESSION Retail Sales Slump on Deck ............................................................................................................................................. 2832
RECESSION This Is another "Subprime" Waiting To Blow ................................................................................................................... 2835
RECESSION Record Gap between US Inventories and Sales Screams Recession ............................................................................ 2838
RECESSION August spending was the weakest in nominal dollar terms since 2012 ........................................................................... 2840
RECESSION The Next Recession Will Definitely Not Happen In 2018 ................................................................................................. 2845

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MONTHLY PROCESS OF ABSTRACTION


The Global Macro Tipping Points (GMTP) Service is an integral part of our monthly Process of Abstraction research
methodology. The process starts monthly with the Tipping Points and completes with a final Synthesis. The
sequence is optimized to align with the established Macro Economic Data releases.

Plan

Release
Date

III.

Monday following
4th Saturday
of the Month

IV.

II.

Monday following
2tnd Saturday of the
Month

Tuesday following
3rd Saturday
of the Month

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

Global Macro Tipping Points


(GMTP)

Market Analytics & Technical


Analysis (MTA)

Monthly Market Commentary


(MMC)

MAY 2016 Edition


31

Focus

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