miércoles, mayo 06, 2015

VACACIONES MAYO 2015 / GRL

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VACACIONES MAYO 2015


Jueves 30 de Abril del 2014

Queridos amigos,

Les escribo estas líneas con motivo de mi próximo viaje que me tendrá ausente de la oficina y de nuestras lecturas cotidianas, desde el lunes 4 hasta el miércoles 20 de Mayo próximo.

Durante estos días no tendré acceso regular al Internet ni a mis correos.

Lamentablemente, en los últimos meses la situación internacional se ha seguido complicando tanto social, económica, financiera y geopolíticamente, de acuerdo a lo previsto en mi carta de Setiembre pasado y las anteriores, a pesar de todas las declaraciones y anuncios en contrario por parte de las autoridades de los bancos centrales y los representantes de los gobiernos.  

En realidad no podía ser de otra manera, si tenemos en cuenta que no se ha hecho nada en los últimos años para reparar los profundos desequilibrios estructurales en los fundamentos de la economía global, sino que mas bien, por el contrario, se ha seguido "maquillando" por parte de los bancos centrales la insostenible situación económica y financiera global, profundizando los desequilibrios y la inestabilidad vía el constante crecimiento de las deudas, aumentando las ineficiencias y dilatando el necesario ajuste. El crecimiento estructural de la economía global es cada vez mas frágil, dudoso e insostenible.

Hasta la crisis del 2000 y luego de la del 2008, ahora así llamada la Gran Recesión, la demanda global había sido “subvencionada” por un sistema financiero manipulado e intervenido, creando una demanda y una economía global ficticia, una recuperación así llamada "subprime", liderada por la FED mediante un crecimiento desproporcionado de las deudas, imposible de auto-sustentarse en un crecimiento de la economía real en el largo plazo. 

Deuda, deuda y mas deuda, parece ser el mantra de la FED.

Desde entonces, la FED y el resto los bancos centrales de todos los países más importantes del mundo se han negado y se siguen negando a reconocer esta realidad, aceptando el inicio de un ajuste inevitable y estructural, regresando a un nivel real de la economía global de alguna manera manejable. Aun siguen abocados al esfuerzo de una gran represión financiera, manipulando e inflando irresponsablemente los mercados financieros vía una política monetaria de emisiones inorgánicas de papel moneda sin respaldo y muy bajas tasas de interés.

Las deudas de consumidores, empresas y gobiernos, eran y son insostenibles.

Por ello creemos que los bancos centrales no aumentarán de "motu propio" las tasas de interés de manera importante a corto plazo, salvo que este aumento provenga final y sorpresivamente de una crisis generada por la desaparición de la confianza de los inversionistas globales en los mercados financieros.

Inmediatamente sus deudas se volverían obviamente impagables y la crisis que tanto han tratado de evitar reconocer, sobrevendría inevitable.

Solo para mencionar al país con la economía mas importante, la deuda de los Estados Unidos de Norteamerica ha crecido por encima de los 18 trillones de dólares, a mas del 100% de su PBI. Y si incluimos las deudas contingentes internas, como el Seguro Social y los Fondos de Pensiones, algunos analistas calculan que la deuda norteamericana podría llegar a sumar entre los 80 a 120 trillones de dólares, es decir, entre 5 a 7 veces el producto bruto anual.

Para un análisis detallado del desarrollo de esta problemática y la verdadera situación actual, ver los artículos del blog, aquí, aquí y aquí.

Esta situación se ha seguido agravando en los últimos años y es insostenible en el mediano y largo plazo.  (ver articulo)

Para evitarlo, es que los bancos centrales han tenido que esforzarse en mantener ficticiamente una apariencia de normalidad en el "statu quo", inyectando cantidades innombrables de papel moneda sin respaldo a los mercados financieros y reducido las tasas de interés a niveles nunca vistos por largo tiempo, desde que la historia económica recuerda. (QE1, QE2, QE3, Q4, Abenomics, China, etc….)

Todo ello nos hace presumir que todo ello se lleva a cabo por el fundamentado temor a perder el control del esquema Ponzi mundial, que es lo que son ahora la economía global y los mercados financieros, y por ende se derrumbe el castillo de naipes enfrentando de golpe un ajuste económico enorme y hasta la posibilidad de una revolución social incontenible, guerras, etc.

¿Porqué un ahorrista o un inversionista estaría dispuesto a depositar su dinero en un banco o comprar un bono de un gobierno, que no solamente no le paga ningún interés sino que más bien ahora le cobra por mantener su deposito, o si se lo paga, es un interés muy reducido y hasta negativo?

Ello sucede solo cuando el ahorrista y/o el inversionista esperan una deflación en la economía, i.e. que los precios mañana serán mas bajos que los de hoy, la que sería mayor que el costo de ese depósito, y/o una ganancia potencial en el fortalecimiento de esa moneda, es decir, en ambos casos, a pesar de todo, un aumento del poder adquisitivo de sus inversiones. Y también, cuando además, existe una enorme aversión al riesgo en los mercados financieros "tradicionales". Solo así se puede justificar racionalmente esta realidad por un ahorrista o inversionista que desea mantener su poder de compra, sin tener que enfrentar riesgos desconocidos e incalculables, pero claramente presumibles en los mercados financieros globales. (ver articulo)

El hecho es que el esfuerzo de política monetaria intervencionista llevada a cabo por la mayoría de los bancos centrales del mundo, en los últimos 15 años, más intensa y desproporcionadamente desde los últimos siete años, además, ha producido la transferencia más importante de riqueza que se recuerda en la historia, de manos de los pensionistas y los ahorristas, hacia las clases privilegiadas. 

Mas importante todavía, se ha distorsionado y manipulado fundamentalmente las reglas de la economía del libre mercado con consecuencias funestas y aun impredecibles en el mediano y largo plazo para los consumidores e inversionistas del mundo, incrementando la alocación  ineficiente de los recursos de inversión, además de multiplicar el costo de la inevitable implosión de los mercados financieros, tanto de las acciones, como de los bonos y otros instrumentos de inversión financiera.

Todo esto para no mencionar a los derivados financieros, estimados por algunos analistas en mas de 1 cuadrillón de dólares (1000 trillones de dólares),  que se ciernen como una espada de Damocles, sobre todo el sistema financiero y económico internacional.

Recientemente el FMI ha advertido de la posibilidad que la economía global esta entrando a un periodo de "stagnación" y a una probable nueva recesión, con las consecuencias que ello implicaría. (ver articulo)

El reconocido economista y analista Ricardo Lago hace recientemente en un diario local un excelente resumen de la ultima reunión del FMI y el Banco Mundial en Washington, sus conclusiones e implicancias. (ver articulo

Obviamente estos organismos no pueden decirnos toda la verdad. Ello sería propiciar ellos mismos el adelanto inevitable del descalabro global, el caos y el ajuste sin anestesia, con resultados imprevisibles. 

La pregunta de fondo es ¿hasta cuando se podrá o podrán mantener esta realidad bizarra?
Y eso nadie lo puede responder con seguridad. La confianza de los inversionistas en los mercados financieros es la verdadera incógnita.

¿Existen aun los inversionistas? 

Observan algunos críticos y analistas que los pequeños y medianos inversionistas se han retirado del mercado y todo el movimiento que observamos en los índices, es solo en volúmenes reducidos. Piensan que ello se debe solo a la actuación de unos cuantos brokers y/o "high frequency traders"de los grandes bancos globales que se siguen "alimentando" de las manipulaciones y ventajas, coordinadas y producidas por los bancos centrales.

Hace alrededor de 100 años el asesinato del archiduque Francisco Fernando y su esposa Sofía Chotek en Sarajevo fue el detonante de la primera guerra mundial. Y nadie pensó en ese momento que ese acontecimiento, aparentemente sin importancia global, traería la primera guerra mundial.

Por ello ahora tenemos que preguntarnos seriamente, ¿cuál de todos los potenciales "cisnes negros", conocidos o no, que hoy se ciernen sobre la economía global ,y que son muchos, económicos, sociales y geopolíticos, podrían ser el detonante de la nueva catástrofe?

Solo la historia nos responderá a esta crucial pregunta. No hay cuerda para mucho. Y evidentemente, toda situación que es insostenible, finalmente se caerá.

Tenemos que insistir mas que nunca que la experiencia y la prudencia, el análisis y la inteligencia, la vigilancia y la paciencia, son los socios más importantes en las decisiones de políticas y estrategias de inversión a corto y mediano plazo.

En un cambio importante de ciclos como en el que pensamos que estamos envueltos hoy día, y en el que mas allá de lo circunstancial, el pasado y el futuro se bifurcan y se oponen,  los riesgos para los inversionistas son profundos. (ver articulo)

Con estas  anotaciones y advertencias que espero les sean de utilidad, me despido de Uds. con un cordial abrazo hasta el regreso a mis actividades, Dios mediante, a inicios de la semana del lunes 23 de Mayo próximo, cuando estaré nuevamente a su gentil disposición.

Gonzalo

PD. Algunos días durante mis vacaciones en la medida de lo posible y excepcionalmente publicaré artículos en el blog que podrán leer entrando directamente y/o subscribiéndose al blog:  www.gonzaloraffoinfonews.com

America’s Risky Recovery
.
Martin Feldstein
.
APR 28, 2015.
..American flag after storm


CAMBRIDGE – The United States’ economy is approaching full employment and may already be there. But America’s favorable employment trend is accompanied by a substantial increase in financial-sector risks, owing to the excessively easy monetary policy that was used to achieve the current economic recovery.
 
The overall unemployment rate is down to just 5.5%, and the unemployment rate among college graduates is just 2.5%. The increase in inflation that usually occurs when the economy reaches such employment levels has been temporarily postponed by the decline in the price of oil and by the 20% rise in the value of the dollar. The stronger dollar not only lowers the cost of imports, but also puts downward pressure on the prices of domestic products that compete with imports. Inflation is likely to begin rising in the year ahead.
 
The return to full employment reflects the Federal Reserve’s strategy of “unconventional monetary policy” – the combination of massive purchases of long-term assets known as quantitative easing and its promise to keep short-term interest rates close to zero. The low level of all interest rates that resulted from this policy drove investors to buy equities and to increase the prices of owner-occupied homes. As a result, the net worth of American households rose by $10 trillion in 2013, leading to increases in consumer spending and business investment.
 
After a very slow initial recovery, real GDP began growing at annual rates of more than 4% in the second half of 2013. Consumer spending and business investment continued at that rate in 2014 (except for the first quarter, owing to the weather-related effects of an exceptionally harsh winter). That strong growth raised employment and brought the economy to full employment.
 
But the Fed’s unconventional monetary policies have also created dangerous risks to the financial sector and the economy as a whole. The very low interest rates that now prevail have driven investors to take excessive risks in order to achieve a higher current yield on their portfolios, often to meet return obligations set by pension and insurance contracts.
 
This reaching for yield has driven up the prices of all long-term bonds to unsustainable levels, narrowed credit spreads on corporate bonds and emerging-market debt, raised the relative prices of commercial real estate, and pushed up the stock market’s price-earnings ratio to more than 25% higher than its historic average.
 
The low-interest-rate environment has also caused lenders to take extra risks in order to sustain profits. Banks and other lenders are extending credit to lower-quality borrowers, to borrowers with large quantities of existing debt, and as loans with fewer conditions on borrowers (so-called “covenant-lite loans”).
 
Moreover, low interest rates have created a new problem: liquidity mismatch. Favorable borrowing costs have fueled an enormous increase in the issuance of corporate bonds, many of which are held in bond mutual funds or exchange-traded funds (ETFs). These funds’ investors believe – correctly – that they have complete liquidity. They can demand cash on a day’s notice.

But, in that case, the mutual funds and ETFs have to sell those corporate bonds. It is not clear who the buyers will be, especially since the 2010 Dodd-Frank financial-reform legislation restricted what banks can do and increased their capital requirements, which has raised the cost of holding bonds.
 
Although there is talk about offsetting these risks with macroprudential policies, no such policies exist in the US, except for the increased capital requirements that have been imposed on commercial banks. There are no policies to reduce risks in shadow banks, insurance companies, or mutual funds.
 
So that is the situation that the Fed now faces as it considers “normalizing” monetary policy.

Some members of the Federal Open Market Committee (FOMC, the Fed’s policymaking body) therefore fear that raising the short-term federal funds rate will trigger a substantial rise in longer-term rates, creating losses for investors and lenders, with adverse effects on the economy. Others fear that, even without such financial shocks, the economy’s current strong performance will not continue when interest rates are raised. And still other FOMC members want to hold down interest rates in order to drive the unemployment rate even lower, despite the prospects of accelerating inflation and further financial-sector risks.
 
But, in the end, the FOMC members must recognize that they cannot postpone the increase in interest rates indefinitely, and that once they begin to raise the rates, they must get the real (inflation-adjusted) federal funds rate to 2% relatively quickly. My own best guess is that they will start to raise rates in September, and that the federal funds rate will reach 3% by some point in 2017.
 
 

Ignore the 'whiff of panic' as US economy stalls

The economy contracted in the first quarter once inventories are stripped out. 'It is hard to put lipstick on that pig,' said UniCredit.

By Ambrose Evans-Pritchard, in Washington

9:17PM BST 29 Apr 2015

A woman looks at 'Three Flags' by Jasper Johns during the opening preview at The Whitney Museum of American Art in New York April 23, 2015

A woman looks at 'Three Flags' by Jasper Johns. Fed hawks have been itching to raise rates for the first time in eight years to end rampant moral hazard in the asset markets Photo: Reuters


The US economy has suddenly stalled. A blizzard of shockingly weak figures raise the awful possibility that America's six-year growth cycle since the Great Recession has already rolled over, with unsettling implications for the world.

Worse yet, this apparent exhaustion is taking hold even before the Federal Reserve has begun to raise interest rates or to drain any of its $3.7 trillion of quantitative easing and balance-sheet expansion.
 
Former US Treasury Secretary Larry Summers warned in Davos earlier this year that the Fed typically needs to cut rates by three or four percentage points to combat each cyclical downturn. It is currently at zero. "Are we anywhere near the point when we have 3pc or 4pc running room to cut rates? This is why I am worried," he said.
 
"Nobody over the last 50 years, not the IMF, not the US Treasury, has predicted any of the recessions a year in advance, never," he said.
 
We should not ignore his warnings lightly, yet for once I am an optimist, clinging to the belief that the US will recover from the strange "air pocket" of early 2015. A siege of snow and ice across the North East over the late winter - for the second year in a row, and some say evidence of a drastically slowing Gulf Stream - has obscured the picture. The first flash of data is often wrong, in any case.
 
Yet the latest GDP figures are indisputably atrocious. "It is hard to put lipstick on that pig: This is unequivocally a very weak report," said Harm Badholz from UniCredit.

The slump in the annual growth rate to 0.2pc in the first quarter does not convey the full horror of it. Once you strip out a surge in inventories - often a pre-recession warning - the economy contracted sharply. Investment in business buildings and factories fell 23pc. "A whiff of panic is in the air," said the Economic Cycle Research Institute.

The putatitve post-winter rebound keeps disappointing. Citigroup's economic surprise index has tumbled to deeply negative levels. The Conference Board's index of consumer confidence fell from 101.4 to 95.2 in April.



The Fed has clearly been caught off-guard. Bill Dudley, the New York Fed chief, said as recently as last week that the growth rate had probably dipped to around 1.5pc in first quarter but would soon climb back to its two-year trend path of 2.7pc.

It is by now clear that the 15pc surge in the dollar's trade-weighted index since June - one of the two most dramatic dollar spikes of the post-war era - has done more damage than expected. It has tightened monetary policy through the exchange rate before the Fed has even pulled the trigger.

Exports fell 7.3pc in the first quarter, further evidence that the rotating devaluations carried out by one economic bloc after another are doing little more than stealing demand from others in a beggar-thy-neighbour world of quasi-depression.




The eurozone and Japan are passing the toxic parcel back to the US by driving down their currencies. This is what Mr Summers means when he says "deflation and secular stagnation are the threats of our time".

It is clear too that the energy slump has battered the primary industrial growth engine of the Obama years. The rig count for US shale gas and oil drillers has halved to 932 since October, amounting to a job shock for Texas, Oklahoma, the Dakotas and, increasingly, Pennsylvania. More than 120,000 oil and gas workers have been laid off, and they earn double the blue-collar average.




The Fed thought that the micro-recession in the fossil states would be trumped by the oil dividend for everywhere else, given that cheaper energy acts as a tax cut and has boosted real disposable incomes by 6.2pc (annualized). The spending boom has not yet happened. People are saving the money instead.

The Fed's statement on Wednesday was a masterpiece of obfuscation. It offered no clues on the date of lift-off. It blamed the slowdown on "transitory factors", though only in part. Ellen Zentner from Morgan Stanley said the Fed seems to "lack conviction" that the economy is really back on track.

The one surprise was that it made no reference to the strong dollar. You could take that as faintly hawkish.

Yet all in all, it looks as if the great inflexion point is delayed again. Fed hawks have been itching to raise rates for the first time in eight years to end rampant moral hazard in the asset markets. They cannot yet do so.

Investors no longer think it will come in June. They have pushed out the long-feared moment to September, and repriced the pace of monetary tightening along the maturity curve into 2016.

Citigroup said there would be no rate rise until December.

It is another reprieve for all those around the world who borrowed $9 trillion in dollars during the era of QE and Fed largesse, half of it in Russia, China, Brazil, South Africa and the emerging market bloc, and typically at real interest rates of 1pc. This is up from $2 trillion 15 years ago.

The International Monetary Fund warned earlier this month of a "liquidity shock" for the global system once the Fed pulls the trigger. The fear is that yields on 10-year Treasury bonds could jump abruptly by 100 basis points or more, combining with a further dollar spike to set off a "cascade of disruptive adjustments". The Fund can rest easy for a little longer.

Yet I doubt that this reprieve will last. The fiscal headwinds have abated. The US economy has already shrugged off the most drastic budgetary squeeze since demobilisation after the Korean War, without falling into recession. Fiscal policy is finally neutral again after five years of hard slog.

The money supply is igniting. Gabriel Stern from Oxford Economics says "broad" M3 money has been rising at an annual rate of 8.2pc over the past six months, harbinger of a reflationary revival and perhaps a mini-boom that will catch people by surprise by year's end.

Commercial and industrial loans are growing even faster, accelerating to 15pc on a six-month basis. It is very hard to square this with an economy trapped in doldrums.

The New York Fed says the post-Lehman purge of household debt has "largely run its course".

The overhang of unsold houses on the market has essentially been cleared, and hot spots are booming. My current host in Washington just had to pay a 5pc premium above the asking price for a house in a middle-class neighbourhood, competing against a frenzy of offers.


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The ratio of job openings to applicants is now higher than it was at the top of the last boom in 2007 by a substantial margin. Hours worked have surged. The labour market is tightening hard. Unless Americans have gone through a Puritan conversion, their swelling disposable income must soon start flowing into the shopping malls.

This is not the picture of a country on the cusp of recession.

Why Deflation is Unlikely

By: GoldMoney

Thursday, April 30, 2015


Financial markets are becoming aware that the US economy is stalling, so investors increasingly take the view that with demand likely to stagnate or even fall, prices for goods and services will soften. This is already threatening to be the situation in a number of other advanced nations, with negative interest rates to combat it becoming commonplace. For this reason, gold and silver priced in dollars are expected by many traders to drift lower.

Putting the prices of precious metals to one side for a moment, there are some serious issues with this analysis. Let us assume for a moment that the US economy does stall; the text-books tell us supply and demand for goods and services will rebalance at lower prices. This was what effectively happened in the wake of the Lehman Crisis, when energy, metals and precious metal prices all fell sharply and large discounts for manufactured capital goods became available.

This does not mean that second time round (and a sliding US economy could create the sort of financial strains that make Lehman look like a walk in the park), the same thing will happen again. Indeed, for next time the central banks already have a plan to contain the situation based on their experience in the Lehman Crisis. It involves the rapid expansion of money, which to the Federal Reserve System ("Fed") at least has been proven on recent experience to have little or no inflationary consequences whatever.

We therefore know something we did not know in the wake of August 2008, when the imminent collapse of the global banking system drove everyone to increase their cash balances. This time we know that last time's guarantees of $13 trillion, or whatever sum you care to think of, will yet again be provided by the Fed, backed by hard cash on demand. Forget bail-ins; they are for dealing with one-off bank insolvencies, not a wider systemic crisis.

Of course it's tempting to think that a new financial and economic crisis will drive us towards selling anything we can for cash. However, this has not necessarily been the experience of previous monetary inflations: after printing money fails to raise the animal spirits, the consensus often expects a fall in prices, only for the opposite to happen. This was certainly the case in Germany and Austria after the First World War, when economic burdens from the combined destruction of infrastructure and wealth, the loss of productive lives, the end of military spending and the burden of reparations were all expected to overwhelm their respective economies. The result was people briefly preferred to hold onto their savings rather than spend. How wrong they were.

The political situation then was very different from that of today, but there was an important economic similarity. The rapid acceleration of growth in money supply failed to stimulate the Germanic economies in the preceding seven years. It's the same today. The mistake is the one identified by Frederik Bastiat nearly 200 years ago with his fallacy of the broken window. We see the dynamics of a failing economy and draw our conclusions from that observation alone.

We disregard the previous monetary inflation, and we have yet to see the more rapid expansion of money and credit to come. This is why we do not anticipate the growing certainty that the purchasing power of money will fall and not increase, embarking on the same value-path as the German mark and Austrian crown in 1920-23.

If a financial crisis is to be averted, the best we can hope for is an economy moving sideways rather than expanding. But there are dangers to this hope, partly from markets that are dangerously over-valued, and partly from the limitations on further private sector debt creation. In short, we are living with a situation that is highly vulnerable to an exogenous shock.

Meanwhile, the prices of gold and silver reflect the deflationary view to the exclusion of the likely outcome. There is no doubt that many dealers believe that gold and silver are merely commodities, otherwise they would be chasing their prices upwards in a dash for cash. Future historians should be puzzled. Perhaps someone will write a history with a snappy title, such as "Extraordinary Popular Delusions and the Madness of Crowds."¹
 


¹ Already written by Charles Mackay and published in 1851. Updates will doubtless be required.

Opinion

Review & Outlook

France’s Backseat Economic Driver

April 30, 2015


French Economy Minister Emmanuel Macron is one of the most promising reformers to emerge from his country in years—or so we’ve been hoping. His campaign to bolster government control over Renault at the auto maker’s annual meeting Thursday gives us reason to doubt.

At issue is the Florange Law, which Paris passed in 2014. The law allows shareholders who have owned their stock for at least two years to exercise double voting rights starting next year unless shareholders vote an exemption from the rule. Mr. Macron earlier this month spent €1.2 billion in taxpayer money buying Renault shares to boost the French state’s voting stake to nearly 20% so that he can block a one-share-one-vote resolution at the car maker’s annual meeting.

The government doesn’t lack for influence at Renault already, since it’s the largest shareholder and appoints two board members. But Paris is eager to show it’s implementing the Florange Law, which is explicitly intended to avert plant closures and other acts of business necessity.

The double-voting rule is one of several clauses designed to deter takeover attempts and discourage activist investors. The voting rule especially favors the state and the unions that control employee pension investments.

That makes Mr. Macron’s defense of this measure a puzzle. His biggest achievement to date is the Macron Law, a reform he and Prime Minister Manuel Valls pushed through a reluctant National Assembly in February. That plan liberalizes rules on Sunday opening hours, deregulates some white-collar professions, and shows that Mr. Macron understands the role of the private economy in job creation and growth.

Mr. Macron writes on a nearby page that enforcing double voting rights gives “patient and stable investors” more power to set strategy in boardrooms. And in the best case it could pave the way for the government to reduce its stakes in companies such as Renault or GDF Suez, GSZ -2.83 % where Paris has defeated a similar one-share-one-vote proposal. Paris could stick to the promise Mr. Macron made last year to sell between €5 billion and €10 billion in state shares while retaining the level of economic control cherished by the political establishment.

But that misses the point of privatization, which is about corporate control as much as ownership. France Inc. needs a strong dose of entrepreneurship and managerial innovation to have any hope of cutting chronically high unemployment, boosting growth and putting the government budget on a sustainable track. Government votes inevitably undermine such market forces.

Perhaps Mr. Macron felt the left wouldn’t accept any more reform so soon after the Macron Law. But Renault still is a major missed opportunity for a reformer to have let the market work by not actively boosting the government stake to stymie the will of other shareholders.

This episode is a warning to investors of the political limits imposed on even the most reform-minded of French politicians.