Exactly one week ago, when BofA's Michael Hartnett explained what global capital markets need to rebound from their recent doldrums, he laid out what he sees are the world's two biggest problems:
Back in early 2014, we warned that the Chinese housing bubble has burst, promptly followed by official confirmation by China's National Bureau of Statistics which showed that in the subsequent several months Chinese home prices and transactions plunged. Since then, however, China - whose economy has been on a steep downward spiral - has desperately scrambled to reflate this most important to its economy bubble, because as a reminder in China three quarters of all household assets are in Real Estate...
Fearful of a renewed rise in the US dollar, Saxo's chief economist Steen Jakobsen expects a "nasty March" as this will kill commodity stabilization as well as the ability of emerging markets to live up to their expectations to revitalize the global economy. Despite The Bank of Japan's clear "example of how not to do things," Jakobsen warns other central banks will follow Kuroda's cue and, as he explains below, is "shorting everything" as he sees two major canaries in the coalmine.
Submitted by Lance Roberts via RealInvestentAdvice.com,
In last week’s missives, I discussed the potential for an oversold, short-covering bounce which was to be used to further rebalance portfolios and reduce equity risk. The target zone was 1940 to allow for the completion of the “risk reduction” process.
“The global economy risks becoming trapped in a low growth, low inflation, low interest rate equilibrium,” BOE governor Mark Carney warned, in a speech at the G20 summit in Shanghai. “For the past seven years, growth has serially disappointed—sometimes spectacularly,” he added.
That’s a bit of unwelcome “truthiness” from one of the world’s most powerful central bankers and it comes as his predecessor, the incomparable Mervyn King, warns that a new financial crisis is “certain.”