Gloom, Doom, or Boom? Finance and Economics

Now, what news on the Rialto?
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Typhoon
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Re: Gloom, Doom, or Boom? Finance and Economics

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FT | Earnings shenanigans underpin Wall Street record
Return on invested capital [ROIC] paints much less flattering picture of company valuations [than reported earnings].
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Heracleum Persicum
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Re: Gloom, Doom, or Boom? Finance and Economics

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Typhoon wrote:FT | Earnings shenanigans underpin Wall Street record
Return on invested capital [ROIC] paints much less flattering picture of company valuations [than reported earnings].

.

Thanx , excellent article .. companies using more (cheap) capital, but making lower returns .. if %-rates go up, things will not add up anymore .. "economic earning" key , and it is falling

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Re: Gloom, Doom, or Boom? Finance and Economics

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FT | How we all became addicted to cheap debt
‘The pesky matter of debt has not disappeared: the level of global debt to gross domestic product is now 40 per cent higher than it was in 2008’
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Re: Gloom, Doom, or Boom? Finance and Economics

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Bloomberg | America's 'Retail Apocalyse' is just beginning.
The reason isn’t as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.

The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy.
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Re: Gloom, Doom, or Boom? Finance and Economics

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Typhoon wrote:Bloomberg | America's 'Retail Apocalyse' is just beginning.
The reason isn’t as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.

The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy.
With the GOP tax plan, said private equity financiers will make out like never before! The Obama administration made a tentative start in the right direction on this issue: education and re-training. Things have taken a step back under the Trump administration. But hey, it's what the morons who voted for him want, so can't feel bad about them reaping the coming whirlwind.
Despite broad consensus about coal’s bleak future, a years-long effort to diversify the economy of this hard-hit region away from mining is stumbling, with Obama-era jobs retraining classes undersubscribed and future programs at risk under President Donald Trump’s proposed 2018 budget.
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Re: Gloom, Doom, or Boom? Finance and Economics

Post by Heracleum Persicum »

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Trump’s Unsuccessful Asia Trip

Like his first trip abroad, Trump’s Asia trip was unsuccessful and marred by some significant mistakes. The president returns home this week with nothing to show for his effort.
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Re: Gloom, Doom, or Boom? Finance and Economics

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Heracleum Persicum wrote:.


Trump’s Unsuccessful Asia Trip

Like his first trip abroad, Trump’s Asia trip was unsuccessful and marred by some significant mistakes. The president returns home this week with nothing to show for his effort.
.
Xi refused to even let Obama deplane with dignity. O and party were deliberately insulted and shuffled out the back door of AF1 like cargo.

Xi gave Trump a banquet, a public address and personal tour of the Forbidden City. SK publicly called Trump the leader of the free world.

I would call that the biggest success in at least nine years.
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Re: Gloom, Doom, or Boom? Finance and Economics

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Nonc Hilaire wrote:
Heracleum Persicum wrote:.


Trump’s Unsuccessful Asia Trip

Like his first trip abroad, Trump’s Asia trip was unsuccessful and marred by some significant mistakes. The president returns home this week with nothing to show for his effort.
.

Xi refused to even let Obama deplane with dignity. O and party were deliberately insulted and shuffled out the back door of AF1 like cargo.

Xi gave Trump a banquet, a public address and personal tour of the Forbidden City. SK publicly called Trump the leader of the free world.

I would call that the biggest success in at least nine years.

.


This belongs to "Levitas" thread, as a funny joke .. would be sad even for "Political Levitas"

So, NH, Obama was let in from the kitchen door, but Trump coming in from side door make Trump Asia tour a success ! ! ! !

Oh, Lord, what happened to our beloved "America First" ?

What an honour, Xi publicly called Trump the leader of the free world :roll:


The body language says it all .. Look @ Xi face
"Indo-Pacific" replacing "Asia-Pacific"
:lol:




trumpxi.jpg
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Re: Gloom, Doom, or Boom? Finance and Economics

Post by Heracleum Persicum »

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Myths of the 1 Percent
Dispelling misconceptions about what’s driving income inequality in the U.S.


Almost all of the growth in top American earners has come from just three economic sectors: professional services, finance and insurance, and health care, groups that tend to benefit from regulatory barriers that shelter them from competition.

The groups that have contributed the most people to the 1 percent since 1980 are : physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives.

Without changes in these largely domestic services industries — finance, health care, the law — the United States would look like Canada or Germany in terms of its top income shares.

Excellent article , and true

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Re: Gloom, Doom, or Boom? Finance and Economics

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Image

look at those filthy romanians, wallowing in their riches.
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Re: Gloom, Doom, or Boom? Finance and Economics

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That ratio should have been lower, but our governments (3 in 12 months) are borrowing like crazy.
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Re: Gloom, Doom, or Boom? Finance and Economics

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None of those countries can blame tax cuts for the rich or defense spending. I wonder what is to blame.
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Re: Gloom, Doom, or Boom? Finance and Economics

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Look at Italy. Time for Italeave?
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Re: Gloom, Doom, or Boom? Finance and Economics

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Mr. Perfect wrote:None of those countries can blame tax cuts for the rich or defense spending. I wonder what is to blame.
they are wage slavery states like the rest of the modern west and america, paying off the never ending socialist tax burden.

only the brave free eastern europeans like ymix believe in economic liberation from the government beast.

Nonc Hilaire wrote:Look at Italy. Time for Italeave?

with italy its hard to work out how much of the economy is actually recorded properly :)
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Re: Gloom, Doom, or Boom? Finance and Economics

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https://theintercept.com/2018/03/02/cra ... et-reform/
But Citi’s Chief Financial Officer John Gerspach told the trade reporters he thought that some bigger banks — like, say, Citigroup — should get taken care of in the bill as well. He wanted Congress to loosen rules around how the bank could go about lending and investing. The specific mechanism to do that was to fiddle with what’s known as the supplementary leverage ratio, or SLR, a key capital requirement for the nation’s largest banks. This simple ratio sets how much equity banks must carry compared to total assets like loans.

S.2155 did, at the time, weaken the leverage ratio, but only for so-called custodial banks, which do not primarily make loans but instead safeguard assets for rich individuals and companies like mutual funds. As written, the measure would have assisted just two U.S. banks, State Street and Bank of New York Mellon. This offended Gerspach. “We obviously don’t think that is fair, so we would like to see that be altered,” he told reporters.
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Re: Gloom, Doom, or Boom? Finance and Economics

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j02zh6uHWkk

Sounds sensible. Mr. P?
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Post by noddy »

https://www.news.com.au/finance/economy ... 9f2c2a1948
THE future is going to be very bad.

It’s not a question of if or even when, but how. That’s the view of Australian economist John Adams, who says “economic armageddon” awaits us — we just don’t know what particular version it will take.
Scenario 1: Debt deflationary recession or depression
Governments and central banks tighten monetary policy by raising interest rates and withdrawing monetary stimulus to a level that produces a critical event of a major corporation or financial institution declaring financial difficulties

Scenario 2: Sovereign debt crisis
A sovereign debt crisis occurs when the debts of an individual government (whether national, provincial or local) become too large that they are unserviceable resulting in the government either:

Scenario 3: Local currency crisis
A localised currency crisis occurs when an indebted country with significant amounts of received foreign direct investment and international debts lose the confidence of international investors to either generate expected returns or to meet their international debt obligations with currency that investors have confidence in.

Scenario 4: Local runaway inflation and potentially leading to hyperinflation
Governments allow inflationary pressure to build within an economy through the excessive creation of money and credit and as a result all prices across the economy generally rise

Scenario 5: Stagflation
Stagflation occurs when an economy experiences low rates of economic growth while simultaneously experiencing accelerating rates of inflation.

Scenario 6: Global currency crisis
A global currency crisis occurs when international confidence in a major currency such as the US dollar collapses, which results in breakdown in the international monetary system that prevents the settlement of cross-border financial and trade
throw your dice now, all paths lead to hell, choose wisely!
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Re: Gloom, Doom, or Boom? Finance and Economics

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This is pretty big news. It fascinates me as a capitalist to watch the corporate cycle. Aggressive startup, then founders cash out or retire, leaving an amorphous blob that can be controlled by anyone or no one, always needing a vision, but from who?

GE goes into the long dark knight. End of an age.

https://www.wsj.com/articles/walgreens- ... 1529443336
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Re: Gloom, Doom, or Boom? Finance and Economics

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Parodite wrote:j02zh6uHWkk

Sounds sensible. Mr. P?
Anything is better than what we have. Normally I'm not a burn the whole thing down kind of guy but in this case that is what we need.
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Re: Gloom, Doom, or Boom? Finance and Economics

Post by Nonc Hilaire »

Parodite wrote:j02zh6uHWkk

Sounds sensible. Mr. P?
Too extreme and complex. Growth would vanish. Better to enforce Basel Accords and seperate investment banking from commercial banking. Cut fractional reserve banking back from 10/1 to 5/1. If we can't do the simple thing with the laws we have we certainly cannot create a whole new system, but changing a parameter is not such a violent change.

Islamic banking laws work by forbidding interest entirely and using equity instead. That is drastic, but it is an existing and functional system.
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Re: Gloom, Doom, or Boom? Finance and Economics

Post by Typhoon »

Nonc Hilaire wrote:
Parodite wrote:j02zh6uHWkk

Sounds sensible. Mr. P?
Too extreme and complex. Growth would vanish. Better to enforce Basel Accords and separate investment banking from commercial banking. Cut fractional reserve banking back from 10/1 to 5/1. If we can't do the simple thing with the laws we have we certainly cannot create a whole new system, but changing a parameter is not such a violent change.

Islamic banking laws work by forbidding interest entirely and using equity instead. That is drastic, but it is an existing and functional system.
Separating investment from commercial banking would be a good start.
Also, (re)privatize investment banking and require that the principal owners be "all in" in terms of their personal capital.

The Sovereign Bank proposal strikes me as naive.
Private banks could not longer make loans. Only the state "Sovereign Bank" could do so. Not unlike the Soviet system. This is a prescription for inevitable abuse by insiders.
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Re: Gloom, Doom, or Boom? Finance and Economics

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any system left neglected for a long period of time will end up the same way - im not particularly convinced their is some magic arrangement which changes things.

balances of power and separation of concerns only work in the short term as the things being separated will immediately start infiltrating the new organisation.

i also believe that economic meltdowns are part of the system and cant be avoided - boom and bust is an inherit part of the under supply and then scaling up process.

ditto the fact that whichever investment has the best returns will get an over supply of funding, which can cause problems in the market (eg: housing booms)

the answer is to build societies and house hold budgets around this being normal thing - like any sensible society or old money family has done since the dawn of time.

we overcome droughts and crop failures with buffers - what has to change is this belief that savings are a bad thing which wastes money and you need to be scaled up to within an inch of your loan repayment ability.

its a cultural thing as much as anything and i suspect the current generation of kids watching a world crushed in debt are going to be pretty easy to convince that avoiding bank loans as much as possible is a sensible move, we dont need to go back very many generations to find that being the normal viewpoint.

TLDR; this stimulation based economy is whats wrong .. picture of pushing on a string goes here.
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Re: Gloom, Doom, or Boom? Finance and Economics

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Typhoon wrote:Separating investment from commercial banking would be a good start.


To re-instate (a modern version of?) Glass–Steagall would indeed be a very good idea. Always wondering what keeps it from happening. Just politics?
Also, (re)privatize investment banking and require that the principal owners be "all in" in terms of their personal capital.
It would prevent much of the "privatizing the profits and socializing the losses" phenomena that poisons the market creating unnecessarily high-risk boom-bust situations. Also here I wonder, what keeps such a simple, common sense, fair and obviously beneficial requirement to be instated by law?
The Sovereign Bank proposal strikes me as naive.
Private banks could not longer make loans. Only the state "Sovereign Bank" could do so. Not unlike the Soviet system. This is a prescription for inevitable abuse by insiders.
That's a good point. What I did like was the idea to allow democracy have a say on how the financial industry is organized and operates. Right now it is mostly shielded from public discourse, left to deregulated globalist forces and experts, decision makers who never need to explain in simple language to the average voter what they are doing and why. The Real Dark Web.
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Re: Gloom, Doom, or Boom? Finance and Economics

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noddy wrote:any system left neglected for a long period of time will end up the same way - im not particularly convinced their is some magic arrangement which changes things.
Free market. But it's not that magic.
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Re: Gloom, Doom, or Boom? Finance and Economics

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Typhoon wrote: Separating investment from commercial banking would be a good start.
Good start at what?
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