Mais um interessante e alarmante...

[Francisco Monjardino]

...artigo do Jim Puplava sobre o estado da economia norte-americana e o que poderá vir aí....

TIPPING POINTS: leading to a fall, by Jim Puplava - Storm Watch Update
May 20, 2005.

O artigo é algo extenso, mas penso valer a pena uma leitura nem que seja para reflectir um pouco....

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Economists are calling it a "soft patch," a temporary slowdown in economic growth. This reflects a regression from earlier euphemisms of a "Goldilocks" economy. I'm sure before long the "soft patch" will turn into a "soft landing." However, I've yet to see a "soft landing" in my 30 years in the investment business. Soft landings are as rare as the dodo bird. It is surprising to see this term resurface every time we are about to head into a recession. Perhaps economists think it has a more palatable sound than recession and depression, which are more frightening terms to investors.

What we can say with a certain degree of confidence is that the Fed will keep raising interest rates until they arrive at a "neutral rate," i.e. an interest rate that is neither stimulative nor contractive for the economy. Reality is something different. The Fed can never truly arrive at a neutral rate. They habitually raise rates until something breaks—usually either in the economy or the markets, but in most cases it's both. The days in which the Fed could fine-tune the economy ended several decades ago with the emergence of the financial economy. Today, even more money is injected into the economy and the investment markets outside the traditional banking sector. Last year the US economy added $2,718 billion in debt. However, the broadest measure of the money supply (M3) expanded by only $587.5 billion. For those who are relieved that money supply growth has slowed down, as shown in the table below, take no comfort. Credit expansion in the US is rampant as reflected in last year's total credit expansion of $2,718 billion.


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Tipping points:

1.  Leveraged Carry Trade
2.  Growing Trade Deficit
3.  U. S. Consumer Debt
4.  Banking Crisis
5.  Reliance on Foreign Investment
6.  The Rogue Wave


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Summary

As the Fed rate hikes continue, risk to the financial system increases because all markets are interlinked. Systemic risks to the financial system have increased and may converge. A misplaced bet in structured credit could backfire—causing interest rates to rise. Narrowing credit spreads could cause the carry trade to unwind—forcing leveraged players to dump their bond holdings—leading to a jump in interest rates. A trade war could create friction in the credit markets—forcing central banks to dump their Treasury holdings or go on strike with new buying. A rise in interest rates could make mortgage payments untenable for overburdened households—triggering bankruptcy. Increased bankruptcies would bring more homes on the market—increasing supply and causing home prices to fall. Falling home prices would increase homeowners and lenders risk as equity evaporates. Each tipping point could lead to the next as they are all connected in a daisy chain.

What is clear is that this rate cycle is different. The Fed has very little room to maneuver nor can it afford to make a mistake. The economy is more leverage today than back in 1999. Outstanding debt has grown by $10 trillion since the last time the Fed raised interest rates. The leverage in the financial system has grown exponentially with derivatives and the carry trade. The homeowner has gone deeper into debt, the government is running large budget deficits, and the trade deficit is the worst it has been in this country's history with no sign of improving. We have no margin of safety. Things will have to workout perfectly in order to avoid a crisis. Will we be that lucky?


TIPPING POINTS: leading to a fall, by Jim Puplava


Bom fim-de-semana,

[Francisco Monjardino]

...desde o arrebentar da bolha em 2000, ou mesmo antes, as opiniões de âmbito económico pouco ou nada devem influenciar a actividade de trading.

Negoceia-se o preço e não as opiniões.

O objectivo ao referir estes artigos, é pura e simplesmente a partilha de informação e conhecimento.