Central Perk: 2 nov. 2014

duminică, 2 noiembrie 2014

Mish's Global Economic Trend Analysis

Bank of Japan Buying Over 100% of Japanese Bond Issuance; Steen Jakobsen Expects "FantasyLand Will Give Way to RealityLand"
Weaker China PMI, Especially New Orders and Exports
215,000 Doctors (1 in 4 Nationally, 70% in California) Refuse Obamacare Patients Over Payment Issues

Bank of Japan Buying Over 100% of Japanese Bond Issuance; Steen Jakobsen Expects "FantasyLand Will Give Way to RealityLand"

Posted: 02 Nov 2014 11:23 PM PST

Steen Jakobsen has some interesting comments on China and Japan in his latest email.

Steen discusses China's "official" PMI which is different than the Markit PMI on China that I covered earlier (see Weaker China PMI, Especially New Orders and Exports).

Emphasis in italics mine.

Steen Writes ...

Greetings,

China's official manufacturing PMI report just came out – and it's weaker than projected. The print was 50.8 vs. 51.2 expected. Orders backlog looks especially weak.

Fathom Consulting in London is calling for China's growth to slow to 5 percent over next year or so. Not sure I fully agree, but it's certainly possible.

China Momentum

The world is now reduced to:

Japan QE Infinite (Helicopter money next) – BOJ is buying more than 100% of issuance from Ministry of Finance now!
ECB can't move needle, but can talk...
Fed now voicing EUR concerns again (MNI news).... US house market cooling, shale gas industry bankrupt
German/EZ GUARANTEED recession (just updated SENTIX ECO vs. growth showing -2% by Q2 if nothing changes)
Disinflaton/deflation trends accelerating to downside w. commodities, energy (which is excellent lead for "anchored" inflation expectations..)

Yes, world should rejoice, take stocks & US dollar higher making sure EM engine is killed totally.... the "surprise" will be that China gets desperate before ECB does, as China clearly has voiced unhappiness with Japan's policy of devaluations.

World only has two engines of growth: EM and US... both are running out of fuel.....US corporates enjoyed 14 years straight years of weaker US dollar – in S&P 500 46% of sales is from overseas, profit has risen 3x faster than sales since 2009, 2y money up considerably in price.

End of financial engineering? Good news is – soon there is NO alternative but for companies to invest – but there are only two things which is certain:

Volatility will rise
Government bond prices will continue down (10 Yr US to hit 1.5% - and November is in our models indicating significant lower yield – so be forewarned)

Being the simple man I am - I have only one trading view: Lower yields (since Q4-2013), one economic view: Disinflaton/deflation will be the catalyst for asset sell off as Fantasy-land is replaced by Reality-land. FX view: US dollar will peak in Mid-November……one timing view: LOW in this economic/inflation/Nonsense is Q2-Q3 2015

Derivative views of that being: Sharp sell-off in UK housing (and Middle East, Norway, Australia – where lending to mortgages is close to 70% of lending in many banks), Low in inflation expectations by Q1 early (signal buy on Gold and metals)…….

Working on Outrageous Predictions 2015 – input very welcome.

Safe travels,

Steen

Three Key Steen Opinions

Japan QE Infinite (Helicopter money next) – BOJ is buying more than 100% of issuance from Ministry of Finance now!
Disinflaton/deflation will be the catalyst for asset sell off as Fantasy-land is replaced by Reality-land.
China to get desperate before ECB does, as China has voiced unhappiness with Japan's policy of devaluations.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Weaker China PMI, Especially New Orders and Exports

Posted: 02 Nov 2014 10:49 PM PST

The HSBC China Manufacturing PMI shows weaker expansions of output and new orders.

Key points

Output and new order growth weakens to five-month low
New export business expands at slowest pace since June
Input costs and output charges both fall markedly

Commenting on the China Manufacturing PMI™ survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said: "The HSBC China Manufacturing PMI rose to 50.4 in the final reading for October, up from 50.2 in September, and unchanged from the flash reading released earlier. Compared to the flash readings, the new orders and new export orders sub - indices saw small downward revisions, but both remained in expansion territory"

Manufacturing PMI

Since mid-2011, Chinese manufacturing PMI has spent more time in negative (contracting) territory than expansion.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

215,000 Doctors (1 in 4 Nationally, 70% in California) Refuse Obamacare Patients Over Payment Issues

Posted: 02 Nov 2014 05:28 PM PST

It's not just patient sentiment against Obamacare that has soured lately. A stunning 215,000 doctors (and rising) refuse to accept Obamacare patients.

"Affordable" Care Act

Gary Franchi ended the above video with this thought: "It seems the biggest lie Obama told was calling his wide sweeping healthcare law - affordable".

Related Stories

CNN Money: Got Obamacare, can't find doctors
Miami Herald: Some South Florida docs decline to accept Obamacare
Forbes: When Will The Government Start Forcing Doctors To See Obamacare Patients?
Daily Kos: Doctor Refuses Patient Because She Has Obamacare
Godfather Politics: Doctors Refusing Obamacare Patients

Good News - Bad News

Good News: You're covered
Bad News: Your choice in doctors is shrinking fast

What was that Obama said?
Wasn't it something like ... If you have a plan you can keep it, and you can keep your doctor too.

Addendum

Some people have questioned the stats. I did so too.

But what do the stats mean? And how many people are on "Obamacare" vs. those covered in grandfathered plans and traditional employer plans?

On September 18, Politico reported 7.3 Million in Obamacare plans, Beats CBO Forecast.

The Population of the US is 316.1 million as of 2013. Of course, those enrolled may have multiple family members. So, double the 7.3 million to get 14.6 million.

Even so, we are talking about less than 5% of the population. Double that to 10% if you like. Is it now so inconceivable a high percentage of doctors would refuse to deal with Obamacare plans?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : But not people like you

But not people like you

We're hiring, but not people like you.

I'm looking for a doctor, but of course, not someone like you.

We're putting together a study group, but we won't be able to include people like you.

Redlining is an efficient short-term selection strategy. At least that's what we tell ourselves. So the bank won't loan to people in that neighborhood or people with this cultural background, because, hey, we can't loan to everyone and it's easier to just draw a red line around the places not worth our time...

The challenge with redlining, beyond the fact that it's morally repugnant, is that it doesn't work. There's a difference between "people like you" and "you." You, the human being, the person with a track record and a great attitude and a skillset deserve consideration for those things, for your psychographics, not your demographics.

When there's not so much data, we often resort to crude measures of where you live or what you look like or what your name is to decide how to judge. But the same transparency that the net is giving to marketers of all sorts means that the banks and the universities and the hiring managers ought to be able to get beyond the, "like you" bias and head straight for "you."

Because 'you' is undervalued and undernoticed.

When we say, "I don't work with people like you, I won't consider supporting someone like you, I can't invest in someone like you," we've just eliminated value, wasted an opportunity and stripped away not just someone else's dignity, but our own.

What have you done? What do you know? Where are you going? Those are a great place to start, to choose people because of what they've chosen, not where they started. Not because this will always tell us what someone is capable of (too many people don't have the head start they deserve) but because it is demonstrably more useful than the crude, expensive, fear-based shortcuts we're using far too often.

In a society where it's easier than ever to see "you," we can't help but benefit when we become anti-racist, pro-feminist, in favor of equal opportunity and focused (even obsessed) on maximizing the opportunity everyone gets, early and often.