At the end of February we first highlighted something extremely troubling for the global "recovery" narrative: according to UBS the global credit impulse - the second derivative of credit growth and arguably the biggest driver behind economic growth and world GDP - had abruptly stalled, as a result of a sudden and unexpected collapse in said impulse.
Authored by Adam Taggart via PeakProsperity.com,
Steen Jakobsen back on, Chief Investment Officer of Saxo Bank, returns to the podcast this week to share with us the warning signs of slowing economic growth he's seeing in major markets all over the world.
In his view, the world economy is sputtering badly. So badly, that he's confident predicting a global recession by 2018 -- or sooner:
Authored by Kevin Muir via The Macro Tourist blog,
Think back to earlier this year. At the time, the market was convinced Trump was about to usher in a new wave of free market nirvana. Hedge fund managers piled into small cap equity long positions, confident the pro-growth policies would fuel a massive outperformance for the Russell 2000 index. Here is a chart I ran in my piece “The reality is something in between” which shows the extent of the small cap run:
When the Treasury reported its monthly receipts and outlays data for the month of May at 2pm today, it was more of the same: far more spending than receipts, resulting in a 68.4% surge in the US budget deficit compared to a year ago. Specifically, outlays of $329 billion soared 19% compared to a year ago, offset by a modest 7% increase in receipts, resulting in a $88.4 billion deficit in May, more than the $87 consensus estimate, and well above the $52.5 billion a year earlier. The reason: government spending in areas such as Medicaid and defense rose at a far faster pace than revenue.
Greece should be about to get a credit upgrade to investment
grade from non-investment grade and the markets seem ill prepared for this
positive development.