Business

It was another painfully low-volume overnight session, which however did not prevent global stocks from hitting another record highs, capping their best week in over two months as the dollar stayed close to nine-month lows following Yellen's dovish retreat in which she noted caution on persistently low inflation (hence today's CPI print will be especially important) as odds of future rate hikes in 2017 and 2018 dropped.

New data released by the Chinese government suggests trade with its restive neighbor, North Korea, has only increased by a modest degree since the beginning of the year, rebutting criticisms from President Donald Trump and UN ambassador Nikki Haley that the world's second-largest economy is undermining US efforts to curb trade with the North.

One month ago, when describing the bizarre, not to mention systemically dangerous practice of dozens of small and mid-cap Chinese companies and executives offering to backstop losses on their employees' purchases of company shares, we couldn't quite explain it, although it seemed to revolve around a simple, and fraudulent, ponzi scheme: the same executives who were making the "make whole guarantee" had themselves taken out substantial loans collateralized by a pledge on their own stock.

Authored by Craig Wilson via The Daily Reckoning,

Nomi Prins joined The Foreign Correspondents’ Club of Japan in Tokyo to discuss the banking landscape and state of financial regulations in the Trump era. The central bank historian and financial expert also took a deep dive into the shifting relations between the United States and Japan and what easy money policy has meant for financial markets.

KKR has just published their 2017 mid-year economic outlook and it includes some rather dire predictions for the U.S. economy.  Among other things, KKR predicts a U.S. recession by 2019 and a massive cycle of millennial deleveraging after a huge expansion of consumer credit in the form of student and auto loans.

Before getting into the details, here's a chart depicting how KKR sums up the macro picture.  In short, pretty much every major economic growth and asset valuation metric in the U.S. is flashing red warning signs relative to historical norms.