rpt-GM rpt-GMTP-2015-11-Peek.pdfTP-2015-11-Peek

7/23/2019 rpt-GM rpt-GMTP-2015-11-Peek.pdfTP-2015-11-Peek

1/37

1 November 2015 Edition Restricted & Confidential

Copyright 2015 Gordon T. Long All Rights Reserved [email protected]

QE FOR THE PEOPLEHelicopter Money (OMF) Coming During the Next Drawdown

US ECONOMIC UPDATE

GLOBAL MACRO TIPPING POINTS NOVEMBER 2015

10/26/2015


2/37

2November 2015Edition Restricted & ConfidentialCopyright 2015 Gordon T. Long All Rights Reserved [email protected]

QE FOR THE PEOPLEHelicopter Money (OMF) Coming During the Next Drawdown

GLOBAL MACRO TIPPING POINTS - NOVEMBER 2015

GLOBAL RISK......................................................................................................................................... 38

GLOBALMACRO:RISKASSESSMENT .................................................................................................................................. 38POSITIONAL FRAMEWORK: "WE ARE HERE!".................................................................................................................................................... 38LIQUIDITY is Neither WEALTH nor COLLATERAL ................................................................................................................................................ 39

Our Assessment ................................................................................................................................................................................................ 39James Rickards Global Risk Assessment ........................................................................................................................................................ 52

MACRO MONITORING INSTITUTIONS ............................................................................................................................................................... 100LATEST FROM THE MONITORS ................................................................................................................................................................... 100

RESEARCH OF NOTE ................................................................................................................................................................................ 104NEW-MONITORSWorld Bank - Global Economic Prospects Report.................................................................................................. 104 NEW-MONITORSWorld BankWarns Developing Nations Growth Slowing 2.8% Global 2015 Growth .................................. ... 105NEW-MONITORSOECDLeading Indicator Casts Doubt on US Economic Rebound ........................................ ............................. 107NEW-MONITORSOECDWarns 40 Million People Will Be Out of Work Next Year .............................................................. ......... 107NEW-MONITORSIMFTells Regulators to Brace for Global Liquidity Shock .................................. ....................................... .......... 110MONITORS - Lagarde warns of lopsided global growth ........................................................................................................................ 114MONITORS - OECD Cuts Global Growth Projections Again .................................................................................................................. 115MONITORSWorld BankGlobal Growth Outlook .............................................................................................................................. 116MONITORS - World Bank warns100M Unemployed, 447M Working Poor, 600M Required for Population Growth Alone ............... 117MONITORS - World Bank Says 300M Young People neither Working nor Studying ............................................................................. 118MONITORS - IMF warns of new threats to global economy due to excessive risk taking ................................... ................................... 119

BIS ................................................................................................................................................................................................................... 121NEW-BIS - BIS Quarterly Report ................................................................................................................................................................. 121BIS - BIS Slams The Fed: The Solution To Bubbles Is Not More Bubbles ................................... ........................................ ...................... 121BIS - Former BIS Chief Economist: "The System Is Dangerously Unanchored ......................................................................................... 122BIS - Even the BIS Is Shocked At How Broken Markets Have Become ..................................................................................................... 124 BIS - Perhaps The BIS Can Share Its Next "Debt Trap" Warnings With Its Own Board Of Directors First ...................................... .......... 128BIS - The Next Time The BIS Wants To Warn About Monetary Kool-Aid, Bubbles, Lack Of Liquidity Or Complacency .......................... 131BIS - "Low Volatility Everywhere" - BIS Sounds Alarm Alert On Pervasive Complacency Masking Systemic Shocks ............................. 132BIS - BIS warns on 'violent' reversal of global markets ............................................................................................................................... 137

WEFWORLD ECONOMIC FORUM ............................................................................................................................................................ 141CHARTS OF NOTE ..................................................................................................................................................................................... 141

WEFGlobal Business Risks ................................................................................................................................................................. 143WEFThe 2015 Global Risk Landscape .................................... ....................................... ........................................ ............................. 144WEFEvolving Risk Landscape (2007-2015) ........................................................................................................................................ 145WEFGlobal Risk Exposures By Region ............................................................................................................................................... 146

SITUATIONAL ANALYSIS ..................................................................................................................................................................................... 147RESEARCH WE FOLLOWED ......................................................................................................................................................................... 147CHARTS OF NOTE ......................................................................................................................................................................................... 149

NEW-Total Global Credit-Market Debt Owed as % of GDP ...................................... ........................................ ....................................... ... 149NEW-$57T Increase in Total Debt Since 2007 and $112T Since 2000 Dotcom Bubble Implosion ........................................................... 150NEW-Global Risk Landscape Grid .............................................................................................................................................................. 151NEW-Geopolitical Risks Are Climbing: Interstate Conflict is Highest Risk in 2015 .................................................................................... 152NEW-Global Risks of Highest Concern ....................................................................................................................................................... 152NEW-Global Risks Versus Impact ............................................................................................................................................................... 153The economic balance of the world is shifting ............................................................................................................................................. 154Global Conflict Intensity is heating up.......................................................................................................................................................... 155World Conflict Map ....................................................................................................................................................................................... 156World Conflict Map Details........................................................................................................................................................................ 157Global Conflict & Protest Intensity ............................................................................................................................................................... 158

Deutsche BanksKey Global Risk ............................................................................................................................................................... 158Political and Financial Risk Now OutnumberReal Economy Risks ............................................................................................................ 159RESEARCH OF NOTE .................................................................................................................................................................................... 160

NEW-McKinsey Institute says global debt is $199 Trillion and UNSUSTAINABLE ................................................................................... 160NEW-Deutsche Bank's Ominous Warning: A "Perfect Storm" Is Coming In 2018 .................................................................................... 164 Global Conflict Intensity Spikes To 7-Year High.......................................................................................................................................... 167These Are 2015's "Black Swans" According To SocGen ............................................................................................................................ 168"Globalization Is Turning In On Itself And It Is Each Man For Himself"....................................................................................................... 170Putin Unleashes Fury at US Follies in Major Pivotal Speech ................................................................................................................... 173Putin Warns Of Risk of Major Conflict, Says Dollar Losing Reserve Currency Status ............................................................................... 174 Putin Accuses U.S. of Blackmail, Weakening Global Order ....................................................................................................................... 175

REFERENCE PAPERSPosition Reminders Lest We Forget................................................................................................................... 178FOURTH TURNING ACCELERATING ....................................................................................................................................................... 178AMERICAS GLOBAL RETREAT ................................................................................................................................................................ 189


3/37


THE OLD WORLD ORDER IS OVER ......................................................................................................................................................... 192THE DEMOGRAPHIC THREAT TO DEVELOPED NATIONS ................................................................................................................... 193THE RISK CONTINUUM ............................................................................................................................................................................. 196GLOBAL TRENDSTHE SIX FRAMING MEGATRENDS ........................................................................................................................ 198GLOBAL THEMESTEN STRUCTURALTHEMES FOR STRATEGY ..................................................................................................... 200DEBT SATURATION - A COLLAPSING PONZI SCHEME......................................................................................................................... 202

WINTER 2015EVENT RISK DOMINATES ........................................................................................................................................... 204GLOBALMACRO:RISKSIGNALS ......................................................................................................................................... 211

GEO-POLITICAL RISK - Social, Economic & Financial ........................................................................................................................................ 213NEW-GREECE - Greek Lawmakers Won't Back Deal; Finnish FinMin Says "Can't Agree" To New Greek Loans ...................................... 213 NEW-GREECE - Goldman: The Greek Solution "Exposes The Whole System To Collapse" .................................... ................................... 213NEW-GREECE - Munchau: "The Eurozone As We Know It Is Destroyed" .................................................................................................... 213 NEW-GREECE - What Assets Did Greece Just Hand Over To Europe: "Airports, Airplanes, Infrastructure And Most Certainly Banks" .... 213NEW-GREECE - New Government Likely In Greece, Depositor Bail-In Still Possible, Deutsche Bank Says ..................................... .......... 213NEW-GREECE - Yanis Varoufakis: "Merkel's Control Over The Eurogroup Is Absolute, They Are Beyond The Law" ................................ 214NEW-GREECE - How German Media See The New Greek 'Deal'................................................................................................................. 214 NEW-GREECE - Greece Banks Not Out Of The Woods, May Impose Tougher Capital Controls, Barclays Says ....................................... 214NEW-GREECE - Even The Players Are Losing Faith In Their Own Shenanigans ........................................................................................ 214NEW-GREECE - After "Deal", Here's What's Next For Greece .................................... ........................................ ....................................... ... 214NEW-GREECE - EU Exit Will Now Be "Threat To Those Who Don't Behave The German Way," BofA Says ............................................. 216 NEW-GREECE - Tsipras Releases Statement Following Greek "Deal", W ill "Fight To Regain Lost National Sovereignty" ......................... 216NEW-GREECE - Deal Struck Following Total Capitulation By Tsipras: Market Awaits Greek Reaction To Draconian Deal Terms ............ 217NEW-GREECE - How The Greek Deal Almost Collapsed At 6am In The Morning ....................................................................................... 217NEW-GREECE - The Greek "Choice": Hand Over Sovereignty Or Take Five Year Euro "Time Out" .................................... ....................... 218NEW-GREECE - Eurogroup Officially Threatens Greece With 5 Year Grexit "Time Out" ............................................................................. 218NEW-GREECE - Eurogroup Fails To Reach Deal, Gives Greece 24 Hours To Accept Draconian Terms ................................................... 219 NEW-GREECE - A Broken Greek PM Says He Is "Ready For An Honest Compromise".............................................................................. 219NEW-GREECE - Leaked Eurogroup Statement Demands Much More From Greece, Keeps "Temporary Grexit" Option ........................... 220NEW-GREECE - Someone Told Merkel... ...................................................................................................................................................... 220NEW-GREECE - Schauble Proposes "5 Year Grexit With Humanitarian Support" ....................................................................................... 220NEW-GREECE - Eurogroup Meeting Ends Without Agreement: "Huge Problems", " Issue Of Greek Trust Very Di fficult" ........................... 220NEW-GREECE - Finland Echoes Germany, Wants Greece Out; Five Other Nations Back Grexit ............................................................... 220 GREECE - Greek Energy Minister Slams "Unscrupulous, Imperialist" Germany, Seeks "Bold Alternatives" In Russia ............................... 221 GREECE - Greece Prepares To Leave ........................................ ....................................... ......................................... ................................... 223GREECE - Greek Deputy FinMin Confirms Athens Is "Prepared For Rift" With Europe ................................................................................ 225 GREECE - Will Greece Call A Referendum On Euro Membership? .............................................................................................................. 226GREECE - What Greece Owes, And More Importantly - When! .................................................................................................................... 229GREECE - BofA's Modest Proposal For Greece: "A Negative Shock May Be Necessary" ........................................................................... 232 GREECE - On Greek "Independence Day", Creditors Prepare To Seal Athens' Fate ................................................................................... 235

GEO-POLITICAL RISKTensions & Conflicts ..................................................................................................................................................... 238IRAN ................................................................................................................................................................................................................. 238

RESEARCH OF NOTE ................................................................................................................................................................................ 238

NEW-IRANA Mistake of Historic Proportion! Bibi Netanyanhu ......................................................................................................... 238

NEW-IRANNBC Special Report: Nuclear Agreement Reached With Iran .......................................................................................... 241 YEMEN ............................................................................................................................................................................................................ 242

CHARTS OF NOTE ..................................................................................................................................................................................... 242YEMENStrategic Position .................................................................................................................................................................... 242YEMENal-Houthis and Saleh Concentrations ..................................................................................................................................... 243YEMENThe Decisive Storm Coalition ............................................................................................................................................... 243YEMENGlobal Oil Chokepoints ........................................................................................................................................................... 244YEMENMiddle Eastern Oil Production & Chokepoints ........................................................................................................................ 244YEMENChinese Import Countries & Oil Routes .................................................................................................................................. 246YEMENMajor Crude Oil Trade Flows in the South China Sea ....................................... ........................................ ............................. 247YEMENRegional Territorial Claims in the South China Sea ............................................................................................................... 248

RESEARCH OF NOTE ................................................................................................................................................................................ 249YEMENRisk of World War between NATO and Russia on Ukraine Escalation as Yemen Bombed for Third Day .......................... 249YEMENYemen Ground Invasion by Saudi, Egyptian Troops Imminent ...................................... ....................................... ................. 251YEMENMiddle East Proxy War: Presenting The Massive "Decisive Storm" Coalition ....................................................................... 254 YEMENSaudi Arabia Imposes Naval Blockade on Red Sea Strait, Deploys 150,000 Troops ........................................................... 255YEMENAnother Middle East War Breaks Out: Saudis Begin Bombing Yemen, US Military Taking Action ....................................... 257YEMENPresenting The Theater Of War; Who Controls Yemen? ....................................................................................................... 262YEMENUS-Armed Rebels Force Yemen President To Flee Country As Saudis Prepare For War ................................................... 264

UKRAINEEAST/WEST CONFLICTThe New Colder War..................................................................................................................... 269RESEARCH WE FOLLOWED ..................................................................................................................................................................... 270RESEARCH OF NOTE ................................................................................................................................................................................ 276

UKRAINE - Putin Is Becoming A "Vulture" Bond Investor ....................................................................................................................... 276UKRAINE - West Further Infuriates & Antagonizes Russia with Debt Restructuring Pressures ............................................................ 277UKRAINE - Congress Approves Funding for Ukraine Arms Shipments.................................................................................................. 281 UKRAINE - US Taxpayers to Fund Ukraine Bailout via Bond Guarantee ....................................... ....................................... ................. 285UKRAINE - Congress Approves Funding for Ukraine Arms .................................. ........................................ ....................................... ... 286UKRAINE -White House Explains Where Your $1.3 Billion Went In Ukraine........................................ ................................... 289UKRAINE - Putin Says Attempts To Tip Nuclear Balance Don't Scare Russia, Moscow Will Uncover "Schemes" ............................... 292UKRAINE - Putin Security Council Slams Obama Attempts at "New World Order" ............................................................................... 293UKRAINE-A Russian Viewpoint .......................................................................................................................................................... 295UKRAINE-This Is What Is Really Taking Place Behind The Scenes Of The Second US-Russian Cold War....................... 309


4/37


ISIS .................................................................................................................................................................................................................. 311ISISTHE SUNNI / SHIA /KURD PROBLEM ............................................................................................................................................ 312

ISIS - Obama Says ISIS War Powers Request Not About 'Another Ground War' .................................................................................. 316ISIS - President Obama Explains His "Boots On The Ground" ISIS-War Strategy................................................................................. 316ISIS- Kobani Overshadows Larger Battles .............................................................................................................................................. 317

SYRIA .............................................................................................................................................................................................................. 320

RESEARCH WE FOLLOWED ..................................................................................................................................................................... 320SYRIA - Syria "Welcomes" Larger Russia Presence............................................................................................................................... 321 SYRIA - This has the Earmarks of the Kennedy Ear "Cuban Missile" Crisis .......................................................................................... 322SYRIA - Syrian War You Are Not Being Told About ....................................... ........................................ ....................................... .......... 323SYRIA - 25 Quotes ................................................................................................................................................................................... 324SYRIA - What Coalition? .......................................................................................................................................................................... 327SYRIA - US Supporting Fully an "Al Qaeda Operation" .......................................................................................................................... 329 SYRIA - Decision Already Taken to Bomb Syria ..................................................................................................................................... 331 SYRIA - Market Patterns Before and Immediately After Conflict Begins ................................................................................................ 339

SOUTH CHINA SEA TERRITORIAL PROBLEMS ......................................................................................................................................... 341GEO-POLITICAL RISKGlobal Governance Failure ...................................... ....................................... ........................................ ...................... 344

ASIAN INFRASTRUCTURE INVESTMETN BANK A Threat to World Bank and US$ Reserve Status ..................................................... 344 RESEARCH WE FOLLOWED ..................................................................................................................................................................... 344CHARTS OF NOTE ..................................................................................................................................................................................... 347

AIIBDemanding Infrastructure .............................................................................................................................................................. 347RESEARCH OF NOTE ................................................................................................................................................................................ 348

AIIB -The Nepo-Cold War, The World Bank and the AIIB Threat.............................................................................................. 348AIIB - Washington Blinks: Will Seek Partnership Wi th China-Led Development Bank ........................................ ................................... 350AIIB - China "Is Not Another US", Does Not Seek "Yuan Hegemony" ....................................................................... ............................. 351AIIB - Obama administration proposes co-financing projects with new Asian Infrastructure Investment Bank............. 353AIIB - Qatar, Jordan, Oman, Kuwait AND Saudi Arabia have applied Goodbye Petrodollar! ....................................... ....................... 356AIIB - Obama continues to be humiliated by the rising anti-dollar alliance ............................................................................. 358AIIB - Did De-Dollarization Just Reach Escape Velocity? ................................................................ ...................................... ................. 360

EMERGING BRICS ALLIANCENEW MULTI-POLAR WORLD .................................................................................................................. 363MULTI-POLAR-Money SupplyThe New World Economy ....................................................................................................................... 363MULTI-POLAR-Financial Globalist Impose Monetary Hegemony .............................................................................................................. 365MULTI-POLAR-Financial Globalists Controlling the Political Process ........................................................................................................ 367

ADVANCING GLOBAL FINANCIAL REPRESSION ............................................................ ........................................ ................................... 370HENRY KISSINGER CALLS FOR NEW WORLD ORDER (NWO) .................................... ......................................... ................................... 372

KISSINGER- Henry Kissingers World Order............................................................................................................................................. 372

GLOBALMACRO:RISKLEVELS ........................................................................................................................................... 375AGGREGATED GLOBAL FINANCIAL RISK INDEX ........................................ ....................................... ........................................ ...................... 375

NEW-BANKING RISK - LIBOR-OIS SPREAD ................................................................................................................................................ 376NEW-BANKING RISK - TED SPREAD ........................................................................................................................................................... 376NEW-CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS ..................................... ........................................ ....................................... ... 377NEW-CREDIT RISK - EU CREDIT DEFAULT SWAPS .................................. ........................................ ......................................... ............... 377

NEW-CONSUMER RISK - HOUSING - RATE OF CHANGE ......................................................................................................................... 378NEW-ECONOMIC RISK - ECRI LEADING INDEX ......................................................................................................................................... 378NEW-INFLATION RISK - MONEY SUPPLY GROWTH - M3 ......................................................................................................................... 380NEW-INFLATION RISK - MONEY VELOCITY ............................................................................................................................................... 380MONETARY RISK - BANK LIABILITIES ......................................................................................................................................................... 381NEW-COST OF MONEY RISK - INTEREST RATES .................................... ........................................ ......................................... ............... 381

AGGREGATED RISK LEVEL ......................................... ........................................ ........................................ ....................................... ................ 382

GLOBALMACRO:TIPPINGPOINTS ...................................................................................................................................... 384CHANGES TO RANKINGSQ3 2015 ................................................................................................................................................................. 384CHANGES TO RANKINGS - Longer Term Benchmarks ...................................................................................................................................... 386CHANGES TO ROADMAPS - Longer Term Trends ............................................................................................................................................. 387CHANGES TO RANKINGS - Longer Term Benchmarks ...................................................................................................................................... 388TIPPING POINTS: TOP 5 FOCUS - AUGUST 2015 ........................................ ....................................... ........................................ ...................... 391

NEW-I BOND BUBBLE................................................................................................................................................................................. 391$140 Bi l l ion Bond Fund Goes To Cash As I t "Braces For Bo nd-Marke t Col lapse"............................................................................ 391

NEW-II - RISK REVERSAL ............................................................................................................................................................................. 393

What Happened The Last Time The Fed's Balance Sheet Hit 25% Of GD ................................................................................................ 393 NEW-III - GEO-POLITICAL EVENT RISK .................................... ....................................... ......................................... ................................... 399The REAL Reason Greece Matters For Investors ........................................ ........................................ ........................................ ............... 402

NEW-IV - CHINA HARD LANDING ................................................................................................................................................................. 409Chinese Stock Markets - 1929 In Chinese Markets .................................................................................................................................. 411

NEW-V- JAPAN DEBT DEFLATION ............................................................................................................................................................... 420Abenomic 's QQE Phiosoph ica l ly Unsound ............................................................................................................................................ 420

GLOBAL MACRO................................................................................................................................. 428

GLOBALMACRO:ECONOMICOUTLOOK ............................................................................................................................ 428ECONOMIC WARNINGS....................................................................................................................................................................................... 428

IMF WARNS .................................................................................................................................................................................................... 428


5/37


NEW-IMF Warns of Permanent Stagnation .................................... ....................................... ........................................ ............................. 428IMF sees risk of new eurozone .................................................................................................................................................................... 430IMF Tells Central Europe to Spend More .................................................................................................................................................... 433Japanese & Spanish Debt Unsustainable ................................................................................................................................................... 436Global Recovery Faltering, Reduces Global Growth to Just Above 3% Global Recession Level ....................................... ....................... 438

BIS WARNS ..................................................................................................................................................................................................... 440

NEW-BIS WARNS - Former BIS Economic Advisor Warns on European QE..................................................................................... 440Monetary Policy At Its Limits ........................................................................................................................................................................ 452WORLD BANK WARNS ................................................................................................................................................................................. 453

Socia l Unrest Stems f rom Shrink ing Disposab le Income. Jobs are the cent ra l issue...................................................................... 455G20 WARNSNeed to Add $2T in Economic Activity & Tens of Millions of Jobs ........................................................................................ 457

RESEARCH WE FOLLOWED .............................................................................................................................................................................. 458CHARTS OF NOTE ............................................................................................................................................................................................... 461

NEW-CHART: Global Stock of Debt Outstanding Grows By $57T Since Financial Crisis .................................................................... 461NEW-CHART: Decade-Long Central Bank FX Reserves Surge Nears End............................................................................................. 462NEW-CHART: Global Business Equipment Investment............................................................................................................................ 463NEW-CHART: EM versus DM Credit Risk ................................................................................................................................................... 464NEW-CHART: MSCI World P/E versus EM P/E ........................................................................................................................................... 464NEW-CHART: Emerging Capital Flows & Currency Moves ...................................................................................................................... 465NEW-CHART: Falling Real GDP of Emerging Versus Rising Developed Economies......................................... ................................... 465NEW-CHART: Domestic Bank Credit of EM versus DM ............................................................................................................................ 466NEW-CHART: Regional Resilience Score Differences Since the Financial Crisis................................................................................. 466NEW-CHART: US Macro index at a New 6 Year Low. ................................................................................................................................ 468NEW-CHART: There is a Problem in Global Credit .................................................................................................................................... 468

CHART: Serial Disappointments & Ratcheting Down of Global Growth ................................................................................................. 469CHART: Continuous Weakening of Global GDP Estimates...................................................................................................................... 470CHART: Reduced Demand Pressures on Energy Prices .......................................................................................................................... 470CHART: Reduced Demand Pressures on Commodities ........................................................................................................................... 471CHART: Global Corporate Profit Trends ..................................................................................................................................................... 471CHART: Stunning Growth in Debt of Developed Economies since Dotcom Bubble Burst.................................................................. 472CHART: Worlds FDI Flooding Into Financial Products versus Productive Assets............................................................................... 473CHART: Growth of Asian Middle Class Dominates Next 20 Years....................................................................................................... 474CHART: Global Domestic Demand Growth ................................................................................................................................................ 474CHART: Global Asset Markets Reflecting a Major Demand Shock Has Hit............................................................................................ 475CHART: World GDP 2014 Economic Growth Estimates ........................................................................................................................... 475CHART: World GDP versus World MSCI Stock Index ............................................................................................................................... 476CHART: Baltic Dry PerspectiveSlowing Global Aggregate Demand Growth Rate............................................................................ 477CHART: World Trade versus Central Bank Balance Sheet Growth......................................................................................................... 477CHART: Falling Global LEI (Leading Economic Indicator) ....................................................................................................................... 478CHART: World GDP Economic Forecast 2014 ........................................................................................................................................... 479CHART: World GDP Economic Expectations versus MSCI Equity Index ............................................................................................... 479CHART: Fiscal Adjustments RequiredDeficit Reductions for Fiscal Sustainability.......................................................................... 480CHART: Shifting Global GDP Share ............................................................................................................................................................ 481

CHART: Over $10 Trill ion Pumped Into Global Economy by Developed Economies......................................... ................................... 482CHART: Eventually All this Debt Must be Rolled over or Paid Out ......................................................................................................... 482CHART: Future Economic Growth a Sub 2% Trend .................................................................................................................................. 483CHART: Debt and Fiscal Drag Are Significant Factors Affecting Global Growth.................................................................................. 483CHART: Slowing Global Aggregate Demand Shows in Shrinking FDI.................................................................................................... 484CHART: Liquidity Drain in US in 2H 2014 ................................................................................................................................................... 485

RESEARCH OF NOTE .......................................................................................................................................................................................... 486NEW-GLOBAL OUTLOOKThe Global Liquidity Squeeze Has Begun ...................................................................................................... 486NEW-GLOBAL OUTLOOKBiggest Worry" Is Dramatic Decline In Bond Market Liquidity, Prudential Says ........................................... 489NEW-GLOBAL OUTLOOK2015 Macro Outlook Proving to be Volatile..................................................................................................... 490NEW-GLOBAL OUTLOOK2015 Macro Outlook Forecasts Hinge on a Deteriorating US Economy ........................................................ 493GLOBAL OUTLOOK3 of 10 Largest Economies Have Fallen into Recession .......................................................................................... 494GLOBAL OUTLOOKThis is the Biggest Risk to the World's Economy ..................................................................................................... 497GLOBAL OUTLOOKWhat is global market turbulence telling us? ............................................................................................................ 501GLOBAL OUTLOOKDarker Outlook Has Bond Market Rethinking Odds of Economic Downturn ........................................................... 504GLOBAL OUTLOOKThe Last Days Of The Growth Story? ..................................... ........................................ ....................................... ... 506GLOBAL OUTLOOKThe Last Days Of The Growth Story? ..................................... ........................................ ....................................... ... 508GLOBAL OUTLOOK - THE ECONOMIC ROADMAP AHEAD: It Isn't That Complicated! ............................................................................ 509GLOBAL OUTLOOK - 20 Signs That the Global Economic Crisis Is Starting To Catch Fire................................................................ 514GLOBAL OUTLOOK - Problems Erupting Everywhere (Signs of Implosion)......................................................................................... 516GLOBAL OUTLOOK - Global Debt Crosses $100 Trillion, Rises By $30 Trillion Since 2007.................................. .............................. 519GLOBAL OUTLOOKThe US as the Global Consumption Engine to See Sub 2% Trend Growth.................................................... 522GLOBAL OUTLOOK - Credit Fueled Globalization in Retreat .................................................................................................................. 525GLOBAL OUTLOOK - Rogoff's Sovereign Debt Default Levels ............................................................................................................... 527GLOBAL OUTLOOK - Imbalances Continue to Increase Along With Financial Fragility .............................................................................. 530 GLOBAL OUTLOOK -A 67 Million Jobs Gap.............................................................................................................................................. 532

ECONOMIC CUTS ................................................................................................................................................................................................. 536CHARTS OF NOTE ......................................................................................................................................................................................... 536

CHARTIMFs Delusional Forecasting Record3 ................................................................................................................................... 536CHARTIMFs Delusional Forecasting Record 2 ................................................................................................................................... 539CHARTIMFs Delusional Forecasting Record - 1 .................................................................................................................................... 539

IMF To Slash Economic Growth Forecast... AGAIN - Still Full of Hockey sticks ............................................................................................ 539


6/37


IMF CUTS ECONOMIC OUTLOOK ............................................................................................................................................................ 545OECD CUTS ECONOMIC OUTLOOK AGAIN!............................................................................................................................................ 555

OECD CUTS ECONOMIC OUTLOOK ........................................................................................................................................................ 557

GLOBAL MACRO................................................................................................................................. 560

GLOBALMACRO:INDICATORS ............................................................................................................................................ 560GLOBALMACRO:ECONOMICOUTLOOK ............................................................................................................................ 560

ECONOMIC WARNINGS....................................................................................................................................................................................... 560IMF WARNS .................................................................................................................................................................................................... 560

NEW-IMF Warns of gloomy eurozone outlook ............................................................................................................................................ 560NEW-IMF Warns U.S.: Your financial system is (still) vulnerable ............................................................................................................... 565NEW-IMF Warns Japan over Its Staggering National Debt ........................................................................................................................ 567NEW-IMF Warns Japan to step up reforms ..................................... ....................................... ........................................ ............................. 567NEW-IMF Warns Fed on risks of hiking too soon........................................................................................................................................ 568IMF Warns of Permanent Stagnation .......................................................................................................................................................... 569IMF Sees risk of new eurozone ................................................................................................................................................................... 571IMF Tells Central Europe to Spend More .................................................................................................................................................... 574Japanese & Spanish Debt Unsustainable ................................................................................................................................................... 577Global Recovery Faltering, Reduces Global Growth to Just Above 3% Global Recession Level ....................................... ....................... 579

BIS WARNS ..................................................................................................................................................................................................... 581BIS WARNS - Former BIS Economic Advisor Warns on European QE ..................................................................................................... 581Monetary Policy At Its Limits ........................................................................................................................................................................ 593

WORLD BANK WARNS .................................................................................................................................................................................. 594Social Unrest Stems from Shrinking Disposable Income. Jobs are the central issue. ............................................................................... 596

G20 WARNSNeed to Add $2T in Economic Activity & Tens of Millions of Jobs ........................................................................................ 599 RESEARCH WE FOLLOWED .............................................................................................................................................................................. 600CHARTS OF NOTE ............................................................................................................................................................................................... 603

NEW-CHART: Global Consumer Confidence Turns ....................................................................................................................................... 603NEW-CHART: Global Consumer Confidence Momentum versus Bond Yields ...................................... ....................................... ................. 603NEW-CHART: Bear Grip Felt Around the World ............................................................................................................................................. 604 NEW-CHART: Emerging Market FX in Freefall .............................................................................................................................................. 604NEW-CHART: Asian Dollar Index Sends Ominous Sign ................................................................................................................................ 605 NEW-CHART: Biggest Currency Losers ......................................................................................................................................................... 605NEW-CHART: The Great Unwind -A Triple Unwind of EM Credit, Chinas Leverage and US Monetary Easing ......................................... 606NEW-CHART: Latin Americas Economic Slowdown ..................................................................................................................................... 607CHART: Global Stock of Debt Outstanding Grows By $57T since Financial Crisis ....................................................................................... 607 CHART: Decade-Long Central Bank FX Reserves Surge Nears End ....................................... ........................................ ............................. 608CHART: Global Business Equipment Investment ........................................................................................................................................... 609CHART: EM versus DM Credit Risk ................................................................................................................................................................ 610CHART: MSCI World P/E versus EM P/E ....................................................................................................................................................... 610CHART: Emerging Capital Flows & Currency Moves ..................................................................................................................................... 611CHART: Falling Real GDP of Emerging Versus Rising Developed Economies ............................................................................................. 611 CHART: Domestic Bank Credit of EM versus DM .......................................................................................................................................... 612CHART: Regional Resilience Score Differences Since the Financial Crisis................................................................................................... 612CHART: US Macro index at a New 6 Year Low. ............................................................................................................................................. 614CHART: There is a Problem in Global Credit ...................................... ....................................... ........................................ ............................. 614CHART: Serial Disappointments & Ratcheting Down of Global Growth .................................... ........................................ ............................. 615CHART: Continuous Weakening of Global GDP Estimates ........................................................................................................................... 616CHART: Reduced Demand Pressures on Energy Prices ............................................................................................................................... 616CHART: Reduced Demand Pressures on Commodities................................................................................................................................. 617CHART: Global Corporate Profit Trends ......................................................................................................................................................... 617CHART: Stunning Growth in Debt of Developed Economies since Dotcom Bubble Burst ............................................................................ 618 CHART: Worlds FDI Flooding Into Financial Products versus Productive Assets ......................................................................................... 619CHART: Growth of Asian Middle Class Dominates Next 20 Years .............................................................................................................. 620CHART: Global Domestic Demand Growth .................................................................................................................................................... 620CHART: Global Asset Markets Reflecting a Major Demand Shock Has Hit ..................................... ........................................ ...................... 621CHART: World GDP 2014 Economic Growth Estimates ................................................................................................................................ 621CHART: World GDP versus World MSCI Stock Index .................................................................................................................................... 622CHART: Baltic Dry Perspective Slowing Global Aggregate Demand Growth Rate .................................... ....................................... .......... 623CHART: World Trade versus Central Bank Balance Sheet Growth ............................................................................................................... 623CHART: Falling Global LEI (Leading Economic Indicator).............................................................................................................................. 624 CHART: World GDP Economic Forecast 2014 ............................................................................................................................................... 625 CHART: World GDP Economic Expectations versus MSCI Equity Index ...................................................................................................... 625CHART: Fiscal Adjustments RequiredDeficit Reductions for Fiscal Sustainability..................................................................................... 626CHART: Shifting Global GDP Share ............................................................................................................................................................... 627CHART: Over $10 Trillion Pumped Into Global Economy by Developed Economies .................................................................................... 628 CHART: Eventually All this Debt Must be Rolled over or Paid Out................................................................................................................. 628 CHART: Future Economic Growth a Sub 2% Trend ....................................................................................................................................... 629CHART: Debt and Fiscal Drag Are Significant Factors Affecting Global Growth ........................................................................................... 629CHART: Slowing Global Aggregate Demand Shows in Shrinking FDI ........................................................................................................... 630 CHART: Liquidity Drain in US in 2H 2014 ....................................................................................................................................................... 631

RESEARCH OF NOTE .......................................................................................................................................................................................... 632GLOBAL OUTLOOKThe Global Liquidity Squeeze Has Begun ................................................................................................................. 632


7/37


GLOBAL OUTLOOKBiggest Worry" Is Dramatic Decline In Bond Market Liquidity, Prudential Says ...................................................... 635GLOBAL OUTLOOK2015 Macro Outlook Proving to be Volatile ............................................................................................................... 636GLOBAL OUTLOOK2015 Macro Outlook Forecasts Hinge on a Deteriorating US Economy ................................................................... 639GLOBAL OUTLOOK3 of 10 Largest Economies Have Fallen into Recession ........................................................................................... 640GLOBAL OUTLOOKThis is the Biggest Risk to the World's Economy ...................................................................................................... 643 GLOBAL OUTLOOKWhat is global market turbulence telling us? ............................................................................................................. 647

GLOBAL OUTLOOKDarker Outlook Has Bond Market Rethinking Odds of Economic Downturn ............................................................ 650 GLOBAL OUTLOOKThe Last Days Of The Growth Story? ........................................................................................................................ 652GLOBAL OUTLOOKThe Last Days Of The Growth Story? ........................................................................................................................ 654GLOBAL OUTLOOK -THE ECONOMIC ROADMAP AHEAD: It Isn't That Complicated! ............................................................................. 655GLOBAL OUTLOOK - 20 Signs That the Global Economic Crisis Is Starting To Catch Fire ......................................................................... 660 GLOBAL OUTLOOK - Problems Erupting Everywhere (Signs of Implosion) ................................................................................................. 662GLOBAL OUTLOOK - Global Debt Crosses $100 Trillion, Rises By $30 Trillion Since 2007 ..................................... ................................... 665GLOBAL OUTLOOKThe US as the Global Consumption Engine to See Sub 2% Trend Growth ..................................... ....................... 668GLOBAL OUTLOOK - Credit Fueled Globalization in Retreat ........................................................................................................................ 671GLOBAL OUTLOOK - Rogoff's Sovereign Debt Default Levels ..................................................................................................................... 673GLOBAL OUTLOOK -Imbalances Continue to Increase Along With Financial Fragility ............................................................................... 676 GLOBAL OUTLOOK - A 67 Million Jobs Gap ................................................................................................................................................. 678

ECONOMIC CUTS ................................................................................................................................................................................................. 682CHARTS OF NOTE ......................................................................................................................................................................................... 682

CHARTIMFs Delusional Forecasting Record 3 ................................................................................................................................... 682CHARTIMFs Delusional Forecasting Record 2 ................................................................................................................................... 685CHARTIMFs Delusional Forecasting Record - 1 .................................................................................................................................... 685

IMF To Slash Economic Growth Forecast... AGAIN - Still Full of Hockey sticks ............................................................................................ 685 IMF CUTS ECONOMIC OUTLOOK ............................................................................................................................................................ 691

OECD CUTS ECONOMIC OUTLOOK AGAIN!............................................................................................................................................ 701OECD CUTS ECONOMIC OUTLOOK ........................................................................................................................................................ 703

GLOBALMACRO:INDICATORS ............................................................................................................................................ 706GLOBAL TRENDS ................................................................................................................................................................................................. 706

CHARTS OF NOTE ......................................................................................................................................................................................... 706NEW-GLOBAL TRENDSWorld Industrial Production Index ................................................................................................................... 706NEW-GLOBAL TRENDSWorld Industrial Production IndexAnnual % Change, 1966 to May 2015 ................................................... 706NEW-GLOBAL TRENDSUNITED STATES Industrial Production Index ................................................................................................ 707NEW-GLOBAL TRENDSUNITED STATES Industrial Production IndexAnnual % Change, 1966 to May 2015................................ 707NEW-GLOBAL TRENDSJAPAN Industrial Production Index ................................................................................................................. 708NEW-GLOBAL TRENDSEURO AREA Industrial Production Index ....................................................................................................... 708NEW-GLOBAL TRENDSEMERGING ASIA Industrial Production Index ................................................................................................ 709NEW-GLOBAL TRENDSEMERGING ASIA Industrial Production Index ................................................................................................ 709GLOBAL TRENDSConsensus 2015 World GDP Growth Expectations ................................................................................................. 709GLOBAL TRENDSUS Macro Continues to Plummet .............................................................................................................................. 710GLOBAL TRENDSGLI Momentum & Global Industrial Production Both About to Go Into Contraction ................................................. 711GLOBAL TRENDSChanges in 2014 2015 Profit (EPS) ForecastsBy Country/Region ................................................................... 711GLOBAL TRENDSChanges in 2014 2015 Profit (EPS) ForecastsBy Sector .................................................................................. 712

GLOBAL TRENDSG7 Long Run GDP Growth Rates (PPP Weighted) .................................................................................................. 712GLOBAL TRENDSFalling Population Growth Rate in Developed Economies ....................................................................................... 713 GLOBAL TRENDSFalling Labor Productivity Rate in Developed Economies ........................................................................................ 714GLOBAL TRENDSFalling Workers Per Retiree in Developed Economies ..................................... ....................................... ................. 714

RESEARCH OF NOTE .................................................................................................................................................................................... 715NEW-GLOBAL TRENDSThe Commodities Super-Cycle Has Gone Into Reverse ................................................................................ 715GLOBAL TRENDSThe curse of weak global demand ............................................................................................................................ 715GLOBAL TRENDSIs economic growth permanently lower? Do We Have Secular Stagnation.................................... ....................... 720GLOBAL TRENDS - The Facts are Clear - the US Standard of Living is Falling ....................................................................................... 724

GLOBAL EMPLOYMENT....................................................................................................................................................................................... 725CHARTS OF NOTE ......................................................................................................................................................................................... 725

CHARTGlobal Employment Rates ........................................ ....................................... ......................................... ................................... 725CHARTGlobal Unemployment ................................................................................................................................................................. 726CHARTGlobal UnemploymentEU Comparison ................................................................................................................................... 726CHARTUnemployment in Advanced Countries ........................................ ........................................ ........................................ ............... 727CHARTGlobal Labor Participation Rates ................................................................................................................................................ 727CHARTGlobal Youth UnemploymentBy Country ................................................................................................................................ 728CHARTGlobal Chance of Finding a Job Within Year .............................................................................................................................. 728

RESEARCH OF NOTE .................................................................................................................................................................................... 729GLOBAL UNEMPLOYMENT - The Beginnings of the Welfare Myth Unwind ..................................... ....................................... ................. 729GLOBAL UNEMPLOYMENT - The Unsustainable Welfare Myth ............................................................................................................... 731GLOBAL UNEMPLOYMENT - Global Financial Sector Job Cuts ................................... ......................................... ................................... 733

GLOBAL SENTIMENT ........................................................................................................................................................................................... 735CHARTS OF NOTE ......................................................................................................................................................................................... 735

NEW-GLOBAL SENTIMENTGlobal Economic Momentum Cycle Shows Cycle Turn to Be Expected ................................. ................. 735NEW-GLOBAL SENTIMENTGlobal Consumer Confidence Turns ................................. ......................................... ................................... 736

NEW-GLOBAL SENTIMENTGlobal Consumer Confidence Up in Europe in Q2 But Flat to Down Globally ......................................... 737NEW-GLOBAL SENTIMENTGlobal Consumer Confidence Down -1 from Q1 2015 ............................................................................. 738NEW-GLOBAL SENTIMENTBiggest & Second Biggest Concerns in the Next Six MonthsBy Country ............................................. 739NEW-GLOBAL SENTIMENTDiffering Concerns Around the WorldBy Region ................................................................................... 740NEW-GLOBAL SENTIMENTGrowing Recessionary Sentiment ............................................................................................................. 741


8/37


NEW-GLOBAL SENTIMENTLatin America Falls Deeper Into A Recessionary Mindset ..................................... ................................... 742GLOBAL SENTIMENTGlobal Consumer Confidence Down In Q4 2014 ........................................ ....................................... ................. 743GLOBAL SENTIMENTGlobal Consumer Confidence by Country .......................................................................................................... 744GLOBAL SENTIMENTGlobal Consumer Confidence Improves the Most in North America .................................................................. 745GLOBAL SENTIMENTRecessionary Sentiment Increases in Latin America ......................................................................................... 746GLOBAL SENTIMENTNorth America Reports Strong Increase Y-o-Y for all Confidence Indicators .................................................... 747

GLOBAL SENTIMENTConsumer Confidence Decreases in 63% of European Markets ....................................................................... 748GLOBAL SENTIMENTConsumer Confidence Decreases in 71% of Asia Pacific Markets .................................................................... 749GLOBAL SENTIMENTConsumer Confidence Decreases in 71% of Latin America Markets .................................... ............................. 750GLOBAL SENTIMENTConsumer Confidence in Saudi Arabia, Pakistan Falls ...................................................................................... 751 GLOBAL SENTIMENTConsumer Confidence High in Sub-Saharan Africa ........................................................................................... 752GLOBAL SENTIMENTGlobal Business Activity Future Expectations .................................................................................................... 753GLOBAL SENTIMENTGlobal Jog Prospects Reach 50% - First Time In 7 Years ................................................................................. 753 GLOBAL SENTIMENTGlobal Consumer Confidence by Country .......................................................................................................... 755GLOBAL SENTIMENTGlobal Consumer Confidence Trends by Country .............................................................................................. 756GLOBAL SENTIMENTNorthern American Spending Intentions Rise According to Nielsen .................................................................. 757

RESEARCH OF NOTE .................................................................................................................................................................................... 758GLOBAL SENTIMENTGlobal Business Confidence Collapses To Post-Lehman Lows ........................................................................ 758GLOBAL SENTIMENTThe State Of Economic 'Misery' Around The World ........................................................................................... 760GLOBAL SENTIMENTHighest Level Since 2007 ................................................................................................................................... 764GLOBAL SENTIMENT - Complacent .......................................................................................................................................................... 765GLOBAL SENTIMENT - Complacent .......................................................................................................................................................... 767GLOBAL SENTIMENT - Nielsens Global Consumer Confidence, Concerns & Spending Intentions....................................... ................. 768

GLOBAL CONSUMPTION ..................................................................................................................................................................................... 779CHARTS OF NOTE ......................................................................................................................................................................................... 780

NEW-GLOBAL CONSUMPTIONTop 5 Global Household Savings St rategies by Region ........................................ ............................. 780GLOBAL CONSUMPTIONRising Consumer Prices are Hurting Global Demand .................................................................................. 780GLOBAL CONSUMPTIONGlobal Home Prices Are Rolling Over .......................................................................................................... 781 GLOBAL CONSUMPTIONReal Domestic DemandUS, Japan & EU ................................................................................................. 782

RESEARCH OF NOTE .................................................................................................................................................................................... 783GLOBAL GROWTH ............................................................................................................................................................................................... 783

CHARTS OF NOTE ......................................................................................................................................................................................... 783NEW-GLOBAL GROWTHWorld Trade Values in US$ ........................................................................................................................... 783NEW-GLOBAL GROWTHWorld Industrial Production ............................................................................................................................ 784NEW-GLOBAL GROWTHWorld Trade (Values in US$) Index ............................................................................................................... 785NEW-GLOBAL GROWTHWorld Trade VolumesAnnual % Change 1966 to May 2015 ........................................ ............................. 786NEW-GLOBAL GROWTHUS Imports (Volumes)Annual % Change, 1966 to May 2015 ................................................................... 787NEW-GLOBAL GROWTHUS Imports (Values)Annual % Change, 1966 to May 2015 ...................................................................... 787NEW-GLOBAL GROWTHJAPAN Imports (Volumes)Annual % Change, 1966 to May 2015 ............................................................ 788NEW-GLOBAL GROWTHJAPAN Imports Annual % Change, 1966 to May 2015 ................................................................................. 788NEW-GLOBAL GROWTHEURO AREA Imports (Volumes)Annual % Change, 1966 to May 2015 .................................. ................. 789NEW-GLOBAL GROWTHEURO AREA (Values)Annual % Change, 1966 to May 2015 ...................................... ............................. 789NEW-GLOBAL GROWTHEMERGING ASIA Imports (Volumes) Annual % Change, 1966 to May 2015 ................................. .......... 790

NEW-GLOBAL GROWTHEMERGING ASIA (Values)Annual % Change, 1966 to May 2015 ........................................................... 790NEW-GLOBAL GROWTHLATIN AMERICA Imports (Volumes)Annual % Change, 1966 to May 2015 ............................................ 791NEW-GLOBAL GROWTHLATIN AMERICA (Values)Annual % Change, 1966 to May 2015 ............................................................ 791NEW-GLOBAL GROWTHCHINAS Imports, Annual % Change ............................................................................................................ 792NEW-GLOBAL GROWTHCHINAS Exports, Annual % Change ............................................................................................................ 792GLOBAL GROWTHGlobal Leading Indicator SwirlogramGets Worse ............................................................................................... 793GLOBAL GROWTHGlobal Leading Indicator Signals Contraction ......................................................................................................... 794GLOBAL GROWTHEurozone PMI and GDP .......................................................................................................................................... 795GLOBAL GROWTHWorld PMI Rankings ................................................................................................................................................ 796GLOBAL GROWTHGlobal Leading Indicator Has Now Rolled Over ................................. ........................................ ............................. 797GLOBAL GROWTHGlobal PMI Business Surveys Fall .......................................................................................................................... 797GLOBAL GROWTHBaltic Dry Index Collapses 50% .............................................................................................................................. 798GLOBAL GROWTHGlobal Slowdown on Verge of Contraction.............................................................................................................. 799GLOBAL GROWTH - GDP Forecasts Continue to Be Taken Down........................................................................................................... 799 GLOBAL GROWTHGlobal Leading IndicatorGoldmans Swirlogram Getting More Serious......................................................... 799GLOBAL GROWTHGlobal Industrial Production Rolling Over............................................................................................................. 800GLOBAL GROWTHConsensus 2014 GDP Forecast - Differential ......................................................................................................... 801GLOBAL GROWTHG10 Macro Change ................................................................................................................................................. 801

RESEARCH OF NOTE .................................................................................................................................................................................... 802

GLOBAL GROWTH - World's Busiest Freight Route Rates Plunge To 2014 Lows ................................................................................... 802GLOBAL GROWTH - Goldman Global Leading Indicator Drastically Revised, Collapses into "Confirmed Slowdown" ............................ 803GLOBAL GROWTH - The Wal-Mart Measure or How the US Consumer Is the Global Engine ................................................................ 805GLOBAL GROWTHPotential of a Global Recession Mounting .............................................................................................................. 806GLOBAL GROWTHWhat the hint of a Fed Taper Did to Global Growth Estimates ............................................................................. 810GLOBAL GROWTH - Uneconomic Energy Problematic ............................................................................................................................. 812GLOBAL GROWTH - Global Growth Cycle ..................................... ....................................... ........................................ ............................. 814GLOBAL GROWTH - Global GDP Contribution .......................................................................................................................................... 815GLOBAL GROWTH - Slowing Global Growth - Air Cargo Shipments ........................................................................................................ 816

GLOBAL CREDIT .................................................................................................................................................................................................. 817NEW-CREDIT CYCLE - HG Spread Widening .......................................................................................................................................... 817NEW-CREDIT CYCLE - Widening Gap Between Debt & Equity ............................................................................................................... 817CREDIT CYCLE - HY Leading the Way ...................................................................................................................................................... 817CREDIT CYCLE - Reversal Ahead .................................... ........................................ ........................................ ....................................... ... 821


9/37

9November 2015Edition Restricted & Confide

Documents

rpt-GM rpt-GMTP-2015-11-Peek.pdfTP-2015-11-Peek