Growing Global Economic Pressures: Slowing Economic Growth Causing Increasing Problems

GROWING GLOBAL ECONOMIC PRESSURES
Slowing Economic Growth Causing Increasing Problems

GMTP DATA FILE
GLOBAL MACRO TIPPING POINTS - SEPTEMBER 2014
7/25/2014
1 September 2014 Edition

Copyright 2014 Gordon T. Long All Rights Reserved
Restricted & Confidential

general@GordonTLong.com
GROWING GLOBAL ECONOMIC PRESSURES

Slowing Economic Growth Causing Increasing Pressures
GLOBAL MACRO TIPPING POINTS - SEPTEMBER 2014
TIPPING POINTS .................................................................................................................................... 20

GLOBAL MACRO: RISK ASSESSMENT .................................................................................................................................. 20
POSITIONAL FRAMEWORK: "WE ARE HERE!".................................................................................................................................................... 20
LIQUIDITY is Neither WEALTH nor COLLATERAL ................................................................................................................................................ 21
Our Assessment ................................................................................................................................................................................................ 21
MACRO MONITORING INSTITUTIONS ................................................................................................................................................................. 36
LATEST FROM THE MONITORS ..................................................................................................................................................................... 36
WEF (WORLD ECONOMIC FORUM) - JANUARY 2014 ................................................................................................................................. 37
WEF GLOBAL RISKS The World Economic Forum - Inequality has become a global challenge ............................................................ 37
WEF GLOBAL RISKS The World Economic Forum - 10 Global Risks of Highest Concern ..................................................................... 41
WEF GLOBAL RISKS Global Competitive Rankings Fragile 5 & Forgotten 4........................................................................................ 43
WEF GLOBAL RISKS The 17 Biggest Risks to Our Hyper-Connected World .......................................................................................... 45
WEF GLOBAL RISKS Global Economic, Geo-Political & Societal Risks .................................................................................................. 53
IMF, WORLD ECONOMIC OUTLOOK - JANUARY 2014 ................................................................................................................................ 61
IMF, FINANCIAL STABILITY REPORT OCTOBER 2013.......................................................................................................................... 67
OECD, WORLD ECONOMIC OUTLOOK NOVEMBER 2013 ....................................................................................................................... 70
SITUATIONAL ANALYSIS ....................................................................................................................................................................................... 73
RESEARCH WE FOLLOWED ........................................................................................................................................................................... 73
RESEARCH OF NOTE ...................................................................................................................................................................................... 74
FOURTH TURNING ACCELERATING ......................................................................................................................................................... 74
AMERICAS GLOBAL RETREAT .................................................................................................................................................................. 85
THE OLD WORLD ORDER IS OVER ........................................................................................................................................................... 88
THE DEMOGRAPHIC THREAT TO DEVELOPED NATIONS ..................................................................................................................... 89
THE RISK CONTINUUM ............................................................................................................................................................................... 93
GLOBAL TRENDS THE SIX FRAMING MEGATRENDS .......................................................................................................................... 94
GLOBAL THEMES TEN STRUCTURALTHEMES FOR STRATEGY ....................................................................................................... 97
DEBT SATURATION - A COLLAPSING PONZI SCHEME........................................................................................................................... 99
WINTER 2014 EVENT RISK DOMINATES ............................................................................................................................................... 101
RISK SIGNALS ........................................................................................................................................................................ 109

GEO-POLITICAL RISK Most Destabilizing Risks ............................................................................................................................................... 109
GLOBL GOVERNANCE RISK Failure of Political Leadership & Public Policies ............................................................................................... 110
EU ELECTIONS ........................................................................................................................................................................................... 110
RESEARCH WE FOLLOWED ..................................................................................................................................................................... 110
CHARTS & TABLES OF NOTE ................................................................................................................................................................... 110
RESEARCH OF NOTE ................................................................................................................................................................................ 113
EU ELECTION - Europe Voted: Anti-EU and Protest Parties Take Nearly A Third of All Euro-Parliament Seats ................................. 113
EU ELECTION - European Voters Are Revolting; France Warns "Situation Is Grave for Europe" ........................................................ 120
SITUATIONAL ANALYSIS ........................................................................................................................................................................... 123
LEADERSHIP - 'Value Transformer' Politicians are avoiding politics OR the voters are rejecting ......................................................... 127
LEADERSHIP - The Consequences Of A Dysfunctional Political System .............................................................................................. 128
LEADERSHIP - Mapping the Collapse of European Democracy ............................................................................................................ 132
GEO-POLITICAL RISK - Social, Economic & Financial ........................................................................................................................................ 133
ISIS THE SUNNI / SHIA /KURD PROBLEM ................................................................................................................................................ 133
SOUTH CHINA SEA TERRITORIAL PROBLEMS ......................................................................................................................................... 137
SYRIA .............................................................................................................................................................................................................. 142
SYRIA - This has the Earmarks of the Kennedy Ear "Cuban Missile" Crisis .......................................................................................... 143
SYRIA - Syrian War You Are Not Being Told About ................................................................................................................................ 144
SYRIA - 25 Quotes ................................................................................................................................................................................... 145
SYRIA - What Coalition? .......................................................................................................................................................................... 148
SYRIA - US Supporting Fully an "Al Qaeda Operation" .......................................................................................................................... 150
SYRIA - Decision Already Taken to Bomb Syria ..................................................................................................................................... 152
SYRIA - Market Patterns Before and Immediately After Conflict Begins ................................................................................................ 160
GEO-ECONOMIC RISK Financial ...................................................................................................................................................................... 162
RESERVE CURRENCY & GLOBAL IMBALANCE ......................................................................................................................................... 162
RESERVE CURRENCY - Japan May Eclipse China Again, as Largest Holder of US Treasuries............................................................. 162
PETRODOLLAR COLLAPSE .......................................................................................................................................................................... 164
UKRAINE ..................................................................................................................................................................................................... 165
UKRAINE - Pulled between EU v Russia ................................................................................................................................................ 165
UKRAINE - Pulled between An Ethnic Eastern and Western Ukraine .................................................................................................... 165
UKRAINE - Pulled between Economic Inequality Factors ....................................................................................................................... 166
September 2014 Edition
Copyright 2014 Gordon T. Long

All Rights Reserved
UKRAINE - Pulled between the Global Military Balance ......................................................................................................................... 167

UKRAINE - Pulled by Global Financial Markets ...................................................................................................................................... 168
UKRAINE - A Deep State Analysis .......................................................................................................................................................... 171
PETRODOLLAR Collapsing PetroDollar Foundation ............................................................................................................................... 175
INTERNATIONAL BANKING & SHADOW BANKING .................................................................................................................................... 179
DEBT REITS & CMBS Growth ................................................................................................................................................................. 181
DEBT - GLOBAL DEBT 313% of GDP ........................................................................................................................................................ 182
DEBT - 202M GLOBALLY UNEMPLOYED DEBTORS .............................................................................................................................. 184
CYBER SPYING .............................................................................................................................................................................................. 186
GLOBAL MACRO: RISK LEVELS ........................................................................................................................................... 187

AGGREGATED GLOBAL FINANCIAL RISK INDEX ............................................................................................................................................. 187
BANKING RISK - LIBOR-OIS SPREAD (Updated) ........................................................................................................................................ 188
BANKING RISK - TED SPREAD (Updated).................................................................................................................................................... 188
CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS (Updated) ................................................................................................................ 189
CREDIT RISK - EU CREDIT DEFAULT SWAPS (Updated) .......................................................................................................................... 189
CONSUMER RISK - HOUSING - RATE OF CHANGE (Updated) ................................................................................................................. 189
ECONOMIC RISK - ECRI LEADING INDEX (Updated) ................................................................................................................................. 192
INFLATION RISK - MONEY SUPPLY GROWTH - M3 (Updated) .................................................................................................................. 193
INFLATION RISK - MONEY VELOCITY (Updated) ........................................................................................................................................ 193
MONETARY RISK - BANK LIABILITIES (Updated) ........................................................................................................................................ 194
COST OF MONEY RISK - INTEREST RATES (Updated) ............................................................................................................................ 194
AGGREGATED RISK LEVEL ................................................................................................................................................................................ 196
TIPPING POINT MAPPING: 2014 YEAR BEGINNING UPDATE ......................................................................................................................... 197
TIPPING POINTS: TOP 5 FOCUS - JUNE 2014 (NO CHANGE)............................................................................................... 207

I - RISK REVERSAL .............................................................................................................................................................................................. 207
II - JAPAN DEBT DEFLATION .............................................................................................................................................................................. 209
III-BOND BUBBLE ................................................................................................................................................................................................. 212
IV - EU BANKING CRISIS ..................................................................................................................................................................................... 212
V - SOVEREIGN DEBT .......................................................................................................................................................................................... 213
VI - CHINA HARD LANDING ................................................................................................................................................................................. 215
GLOBAL MACRO ................................................................................................................................. 219

GLOBAL MACRO: ECONOMIC OUTLOOK ............................................................................................................................ 221
RESEARCH WE FOLLOWED ............................................................................................................................................................................... 221
CHARTS OF NOTE ............................................................................................................................................................................................... 224
CHART: World GDP 2014 Economic Growth Estimates ................................................................................................................................ 224
CHART: World GDP versus World MSCI Stock Index .................................................................................................................................... 224
CHART: Baltic Dry Perspective Slowing Global Aggregate Demand Growth Rate ..................................................................................... 225
CHART: World Trade versus Central Bank Balance Sheet Growth ............................................................................................................... 225
CHART: Falling Global LEI (Leading Economic Indicator).............................................................................................................................. 226
CHART: World GDP Economic Forecast 2014 ............................................................................................................................................... 227
CHART: World GDP Economic Expectations versus MSCI Equity Index ...................................................................................................... 227
CHART: Fiscal Adjustments Required Deficit Reductions for Fiscal Sustainability..................................................................................... 228
CHART: Shifting Global GDP Share ............................................................................................................................................................... 229
CHART: Over $10 Trillion Pumped Into Global Economy by Developed Economies .................................................................................... 230
CHART: Eventually All this Debt Must be Rolled Over or Paid Out ................................................................................................................ 230
CHART: Future Economic Growth a Sub 2% Trend ....................................................................................................................................... 232
CHART: Debt and Fiscal Drag Are Significant Factors Affecting Global Growth ........................................................................................... 232
CHART: Slowing Global Aggregate Demand Shows in Shrinking FDI ........................................................................................................... 233
CHART: Liquidity Drain in US in 2H 2014 ....................................................................................................................................................... 234
RESEARCH OF NOTE .......................................................................................................................................................................................... 235
GLOBAL OUTLOOK - THE ECONOMIC ROADMAP AHEAD: It Isn't That Complicated! ............................................................................. 235
GLOBAL OUTLOOK - 20 Signs That the Global Economic Crisis Is Starting To Catch Fire ......................................................................... 239
GLOBAL OUTLOOK - Problems Erupting Everywhere (Signs of Implosion) ................................................................................................. 241
GLOBAL OUTLOOK - Global Debt Crosses $100 Trillion, Rises By $30 Trillion Since 2007 ........................................................................ 244
GLOBAL OUTLOOK The US as the Global Consumption Engine to See Sub 2% Trend Growth ............................................................ 247
GLOBAL OUTLOOK - Credit Fueled Globalization in Retreat ........................................................................................................................ 250
GLOBAL OUTLOOK - Rogoff's Sovereign Debt Default Levels ..................................................................................................................... 253
GLOBAL OUTLOOK - Imbalances Continue to Increase Along With Financial Fragility ............................................................................... 256
GLOBAL OUTLOOK - A 67 Million Jobs Gap ................................................................................................................................................. 258
ECONOMIC CUTS ................................................................................................................................................................................................. 263
CHARTS OF NOTE ......................................................................................................................................................................................... 263
CHART IMFs Delusional Forecasting Record 3 ................................................................................................................................... 263
CHART IMFs Delusional Forecasting Record 2 ................................................................................................................................... 266
CHART IMFs Delusional Forecasting Record - 1 .................................................................................................................................... 266
IMF To Slash Economic Growth Forecast... AGAIN - Still Full of Hockey sticks ............................................................................................ 266
IMF CUTS ECONOMIC OUTLOOK ............................................................................................................................................................ 272
OECD CUTS ECONOMIC OUTLOOK AGAIN!............................................................................................................................................ 283

All Rights Reserved
OECD CUTS ECONOMIC OUTLOOK ........................................................................................................................................................ 285

ECONOMIC WARNINGS....................................................................................................................................................................................... 288
G20 WARNS Need to Add $2T in Economic Activity & Tens of Millions of Jobs ........................................................................................ 288
IMF WARNS - May 2013 ................................................................................................................................................................................. 289
Japanese & Spanish Debt Unsustainable ................................................................................................................................................... 291
Global Recovery Faltering, Reduces Global Growth to Just Above 3% Global Recession Level .............................................................. 293
BIS WARNS - June 2013................................................................................................................................................................................. 295
Monetary Policy At Its Limits ........................................................................................................................................................................ 301
WORLD BANK WARNS - June 2013 .............................................................................................................................................................. 302
Social Unrest Stems from Shrinking Disposable Income. Jobs are the central issue. ............................................................................... 304
GLOBAL MACRO: INDICATORS ............................................................................................................................................ 307

GLOBAL SENTIMENT ........................................................................................................................................................................................... 307
CHARTS OF NOTE ......................................................................................................................................................................................... 307
GLOBAL SENTIMENT Global Jog Prospects Reach 50% - First Time In 7 Years ................................................................................. 307
GLOBAL SENTIMENT Global Consumer Confidence by Country .......................................................................................................... 308
GLOBAL SENTIMENT Global Consumer Confidence Trends by Country .............................................................................................. 309
GLOBAL SENTIMENT Northern American Spending Intentions Rise According to Nielsen .................................................................. 310
GLOBAL SENTIMENT Northern American Spending Intentions Rise According to Nielsen .................................................................. 310
RESEARCH OF NOTE .................................................................................................................................................................................... 311
GLOBAL SENTIMENT The State Of Economic 'Misery' Around The World ........................................................................................... 311
GLOBAL SENTIMENT Highest Level Since 2007 ................................................................................................................................... 315
GLOBAL SENTIMENT - Complacent .......................................................................................................................................................... 315
GLOBAL SENTIMENT - Complacent .......................................................................................................................................................... 318
GLOBAL SENTIMENT - Nielsen's Global Consumer Confidence, Concerns & Spending Intentions ....................................................... 319
GLOBAL GROWTH ............................................................................................................................................................................................... 331
CHARTS OF NOTE ......................................................................................................................................................................................... 331
GLOBAL GROWTH World PMI Rankings ................................................................................................................................................ 331
GLOBAL GROWTH Global Leading Indicator Has Now Rolled Over ...................................................................................................... 332
GLOBAL GROWTH Global PMI Business Surveys Fall .......................................................................................................................... 332
GLOBAL GROWTH Baltic Dry Index Collapses 50% .............................................................................................................................. 333
GLOBAL GROWTH Global Slowdown on Verge of Contraction.............................................................................................................. 334
GLOBAL GROWTH - GDP Forecasts Continue to Be Taken Down........................................................................................................... 334
GLOBAL GROWTH Global Leading Indicator Goldmans Swirlogram Getting More Serious ......................................................... 334
GLOBAL GROWTH Global Industrial Production Rolling Over ............................................................................................................. 335
GLOBAL GROWTH Consensus 2014 GDP Forecast - Differential ......................................................................................................... 336
GLOBAL GROWTH G10 Macro Change ................................................................................................................................................. 336
RESEARCH OF NOTE .................................................................................................................................................................................... 337
GLOBAL GROWTH - The Wal-Mart Measure or How the US Consumer Is the Global Engine ................................................................ 337
GLOBAL GROWTH Potential of a Global Recession Mounting .............................................................................................................. 338
GLOBAL GROWTH What the hint of a Fed Taper Did to Global Growth Estimates ............................................................................. 342
GLOBAL GROWTH - Uneconomic Energy Problematic ............................................................................................................................. 344
GLOBAL GROWTH - Global Growth Cycle ................................................................................................................................................. 346
GLOBAL GROWTH - Global GDP Contribution .......................................................................................................................................... 347
GLOBAL GROWTH - Slowing Global Growth - Air Cargo Shipments ........................................................................................................ 348
GLOBAL UNEMPLOYMENT ................................................................................................................................................................................. 349
CHARTS OF NOTE ......................................................................................................................................................................................... 349
CHART Global Employment Rates ........................................................................................................................................................... 349
CHART Global Unemployment ................................................................................................................................................................. 350
CHART Global Unemployment EU Comparison ................................................................................................................................... 350
CHART Unemployment in Advanced Countries ....................................................................................................................................... 350
CHART Global Labor Participation Rates ................................................................................................................................................ 351
CHART Global Youth Unemployment By Country ................................................................................................................................ 351
CHART Global Chance of Finding a Job Within Year .............................................................................................................................. 352
RESEARCH OF NOTE .................................................................................................................................................................................... 353
GLOBAL UNEMPLOYMENT - The Beginnings of the Welfare Myth Unwind ............................................................................................. 353
GLOBAL UNEMPLOYMENT - The Unsustainable Welfare Myth ............................................................................................................... 356
GLOBAL UNEMPLOYMENT - Global Financial Sector Job Cuts ............................................................................................................... 358
GLOBAL TRENDS ................................................................................................................................................................................................. 360
GLOBAL TRENDS - The Facts are Clear - the US Standard of Living is Falling ........................................................................................... 360
GLOBAL TRENDS - Profound Changes in Global Youth As Japan Leads the Way...................................................................................... 361
GLOBAL TRENDS Brands & Commodities Tell the Global Story ............................................................................................................... 364
Cooper - Rio Tinto ........................................................................................................................................................................................ 364
Aluminum - Alcoa, Rio Tinto ........................................................................................................................................................................ 366
Iron Ore and Thermal Coal - Rio Tinto ........................................................................................................................................................ 368
Consumable Brands - P&G.......................................................................................................................................................................... 370
Parcel Volumes - FEDEX ............................................................................................................................................................................. 371
Shipping - Baltic Dry Index........................................................................................................................................................................... 372
GLOBAL CREDIT .................................................................................................................................................................................................. 377
CREDIT CYCLE - HY Leading the Way .......................................................................................................................................................... 377
CREDIT CYCLE - Reversal Ahead ................................................................................................................................................................. 380
GLOBAL MACRO: MONETARY POLICY & CENTRAL BANKING .......................................................................................... 384

GLOBAL CENTRAL BANKING .............................................................................................................................................................................. 384

All Rights Reserved
RESEARCH WE FOLLOWED Global Banking Risk .................................................................................................................................... 384

CHARTS OF NOTE ......................................................................................................................................................................................... 387
CHARTS Days of Chinese Credit-Driven Growth are numbered ............................................................................................................. 387
CHARTS Major Central Bank Assets versus GDP Forecast ................................................................................................................... 388
CHARTS Major Central Bank Y-o-Y Balance Sheet Growth ................................................................................................................... 388
CHARTS Cumulative Change in Central Bank Balance Sheets Since 2008 ........................................................................................ 389
CHARTS Global Central Bank Assets versus World Equity Prices ......................................................................................................... 389
CHARTS Cumulative Change in Central Bank Balance Sheets Since 2000 ........................................................................................ 390
RESEARCH OF NOTE .................................................................................................................................................................................... 391
CENTRAL BANKS Axel Merks 2014 Outlook.......................................................................................................................................... 391
CENTRAL BANKS - Japan May Eclipse China Again, as Largest Holder of US Treasuries ..................................................................... 395
CENTRAL BANKS - $3 Trillion "Created" In First 9 Months of 2013 .......................................................................................................... 397
CENTRAL BANKS - Drop Tightening Talk as Easy Money Goes On......................................................................................................... 400
CENTRAL BANKS - Austerity Now Officially Dead Public Policy ............................................................................................................... 403
CENTRAL BANKS - They are the Market ................................................................................................................................................... 403
CENTRAL BANKS - The longer QE persists, the greater the magnitude of the left-tail event & a Minsky Trap ...................................... 406
CENTRAL BANKS - We May Have Reached a Risk-Off Leverage Pivot ................................................................................................... 407
CENTRAL BANKS - The Macro Landscape ................................................................................................................................................ 409
CENTRAL BANKS - A Serious Shortage of Quality Collateral - A $10T US Problem Over 10 Years ....................................................... 410
CENTRAL BANKS - Global Balance Sheet Expansion ............................................................................................................................... 412
CENTRAL BANKS - Where Do these Deflators Come From? .................................................................................................................... 416
CENTRAL BANKS - First Remove Gold Standard, Now Remove Debt ..................................................................................................... 417
TROUBLING DEVELOPMENTS ........................................................................................................................................................................... 422
TROUBLING DEVELOPMENTS Insider Says Central Banks Making it Up as They Go! ........................................................................... 422
TROUBLING DEVELOPMENTS Venezuela: Shortages & Hyperinflation .................................................................................................. 423
TROUBLING DEVELOPMENTS 2007 Redux: Total public and private debt levels are 30pc higher in the advanced economies ........... 424
TROUBLING DEVELOPMENTS Polish Pension Confiscation: Coming to a Theater near You ................................................................. 427
TROUBLING DEVELOPMENTS Global Tax Overhaul................................................................................................................................ 429
BOE - UK ................................................................................................................................................................................................................ 430
UK - BOE Faces Labor Market Conundrum as Wage Growth Stalls .............................................................................................................. 430
UK - Mark Carney and "Flexible Inflation Targeting" ....................................................................................................................................... 431
FED - US ................................................................................................................................................................................................................ 433
10-28-13-CAPITAL DISTORTION - Global Acceptance of the Bernankean Theory ...................................................................................... 433
10-28-13-FINANCIAL REPRESSION - The Suspension of Price Discovery.................................................................................................. 436
US MONETARY - The Fed is Stuck in a QE Trap .......................................................................................................................................... 439
US MONETARY - 2nd Worst Decade In US Growth in Over 220 Years (And Getting Worse) ...................................................................... 441
US MONETARY - Mathematically, The Fed Can Only Fail ............................................................................................................................ 443
US MONETARY - QE Standing Between Inflated Equity Markets and A Recession ..................................................................................... 449
US MONETARY - QE Programs versus S&P 500 Movements ...................................................................................................................... 450
US MONETARY - BAML Warns If The US Economy Does Not Significantly Accelerate Now, It Never Will ................................................ 452
US MONETARY - Debt Increases $1 Trillion in One Year ............................................................................................................................. 455
US MONETARY - Congress Asks Bernanke for Full Risk Analysis On Fed's Soaring Balance Sheet ......................................................... 457
GLOBAL ABE-NOMICS The Road Ahead ......................................................................................................................................................... 462
CHARTS OF NOTE ......................................................................................................................................................................................... 462
JAPAN The Third Arrow of ABE-Nomics -I ............................................................................................................................................... 462
JAPAN The Third Arrow of ABE-Nomics II ............................................................................................................................................. 463
JAPAN Japanese Households Remain Pessimistic ................................................................................................................................. 464
RESEARCH OF NOTE .................................................................................................................................................................................... 465
GLOBAL ABE-NOMICS Monetary Expansion Extremely Difficult to Stop Once Started ........................................................................ 465
GLOBAL ABE-NOMICS Monetary Policy Below the Event Horizon ........................................................................................................ 467
BOJ - JAPAN .......................................................................................................................................................................................................... 469
CHARTS OF NOTE ......................................................................................................................................................................................... 469
JAPAN CPI Shoots To 3.3% Y-o-Y .......................................................................................................................................................... 469
JAPAN Japan Government Investment Fund Asset Reallocation ........................................................................................................... 469
JAPAN Falling Real Rates as Financial Repression Takes Hold............................................................................................................. 470
JAPAN Real Wages Plummet as Financial Repression Takes Hold ....................................................................................................... 470
RESEARCH OF NOTE .................................................................................................................................................................................... 471
JAPAN - No Way Out But to Expand the Monetary Base ........................................................................................................................... 471
JAPAN - BOJ to "Own" 100% Of GDP In 5 Years....................................................................................................................................... 472
JAPAN - Adjusted trade deficit the worst in Bloomberg's 20 year history ................................................................................................... 475
JAPAN - Some Policies Have Clearly Hit the Limit ..................................................................................................................................... 477
JAPAN - Foreshadows Next Global Crisis .................................................................................................................................................. 478
JAPAN - Japan's Prime Minister Shinzo Abe prepares to print money for the whole world ....................................................................... 483
JAPAN - Shinzo Abes Monetary-Policy Delusions ..................................................................................................................................... 484
JAPAN - BOJ Governor Job Suddenly Available in Historical "Abenomics U-Turn" .................................................................................. 487
JAPAN - Japanese Economic Policy Goes The Full Ponzi ......................................................................................................................... 488
ECB - EU ................................................................................................................................................................................................................ 490
CHARTS OF NOTE ......................................................................................................................................................................................... 490
CHARTS Slovenia May BE the Next EU Debt Hotspot ............................................................................................................................ 490
CHARTS Spain & Portugal NPL ............................................................................................................................................................... 490
CHARTS ECBs Turn to Expand Its Balance Sheet ................................................................................................................................. 491
CHARTS ECBs Balance Sheet Contracted Y-o-Y .................................................................................................................................. 491
CHARTS Expect Major ECB Policy Announcement in Q2 2014 .............................................................................................................. 492
CHARTS ECB Set to Stay on Hold as Inflation Seen Lower ................................................................................................................... 493

All Rights Reserved
RESEARCH OF NOTE .................................................................................................................................................................................... 494

EU MONETARY - Euro-Area Data Deterioration Points toward QE ........................................................................................................... 494
EU MONETARY - EU Version of QE Coming -> UST Purchases To Drive Euro Down ............................................................................ 496
EU MONETARY - Goodbye To Europe's Sterilized Monetization - Hello EU Version of QE ..................................................................... 498
EU MONETARY - Bond Markets Weigh Risks of Eurozone QE ................................................................................................................. 500
EU MONETARY - ECB Version of QE Likely .............................................................................................................................................. 503
EU MONETARY - There Is Just No Escape from Mario Draghi's Monetary Zombie Nightmare ................................................................ 506
EU MONETARY - ECB - Hints at QE for EU ............................................................................................................................................... 510
EU MONETARY - EU Equities Responding to Current Account Differential .............................................................................................. 512
EU MONETARY - Patterns: While Everyone Was Worrying About the US and Washington.... ................................................................ 513
EU MONETARY - ECB Monetary transmission mechanisms in Europe are completely broken ............................................................... 515
EU MONETARY - EU Lending Volumes Collapse ...................................................................................................................................... 517
EU MONETARY - Eurozone Funding Shortfall Rises To Over $4 Trillion .................................................................................................. 518
EU MONETARY - DRIVER$ ........................................................................................................................................................................ 519
EU MONETARY - Japan Will Effectively Monetize European Debt ............................................................................................................ 520
EU MONETARY - TARGET-2 Imbalances - "The Debt Crisis Is Eating Its Way Ever Further Into Europe's Core" .................................. 521
EU MONETARY - Draghi Will Soon Be Forced to Start Printing - Again! ................................................................................................... 523
MACRO MONETARY INFLATION ..................................................................................................................................................................... 527
CHARTS OF NOTE ......................................................................................................................................................................................... 527
CHARTS Global Country Inflation Rates .................................................................................................................................................. 527
CHARTS Two Worlds if Inflation EM and DM ....................................................................................................................................... 527
CHARTS Developed Country Inflation Rates ........................................................................................................................................... 528
RESEARCH OF NOTE .................................................................................................................................................................................... 529
INFLATION - Asset & Property inflation means shops have to pay higher rents with higher product prices ............................................. 529
GEO-ECONOMIC INSTABILITIES........................................................................................................................................... 530

CHINAs CREDIT GROWTH - Tightening or Expanding? ..................................................................................................................................... 531
CHARTS OF NOTE ......................................................................................................................................................................................... 531
CHINA LIQUIDITY - Third of Chinese GDP Now Goes to Repay Interest and Principle on Existing Loans .............................................. 531
CHINA LIQUIDITY Infrastructure Investment Offsets Weak Real Estate ................................................................................................ 532
CHINA LIQUIDITY Shadow Banks Step Back Into Light ......................................................................................................................... 533
CHINA LIQUIDITY Hopes that Credit Growth Will Spur Property Sales .................................................................................................. 534
CHINA LIQUIDITY Transport, Construction Data Point to Slower Growth .............................................................................................. 535
CHINA LIQUIDITY Little Impetus for Turnaround in Investor Sentiment ................................................................................................. 536
CHINA LIQUIDITY Industrial Output & Exports Continue to Trend the Wrong Way ............................................................................... 537
CHINA LIQUIDITY GDP Growth Trend .................................................................................................................................................... 537
RESEARCH OF NOTE .................................................................................................................................................................................... 539
CHINA LIQUIDITY - China Credit Risk Overshadows Outlook for Emerging Equities ............................................................................... 539
CHINA LIQUIDITY - Easy Money Wont Solve Chinas Hard Problems ..................................................................................................... 542
CHINA LIQUIDITY - Housing Bubble Restricting PBOC Actions ................................................................................................................ 544
CHINA LIQUIDITY - PBOC Squeezing Banks towards Reducing Speculative Risk .................................................................................. 547
CHINA LIQUIDITY - Overnight Repo at 25% .............................................................................................................................................. 548
CHINA LIQUIDITY - Red Flags ................................................................................................................................................................... 549
CHINA LIQUIDITY - Credit Fueled Growth ................................................................................................................................................. 551
CHINA LIQUIDITY - Shadow Banking System Showing Signs of Implosion .............................................................................................. 556
CHINA LIQUIDITY - PBOC Wants to Hold the Line on Explosive Credit Expansion through A Liquidity Squeeze ................................... 559
CHINA LIQUIDITY - Potentially De-Stabilizing Cash Crunch ..................................................................................................................... 561
CHINA LIQUIDITY - Chinese Liquidity Pump Unplugged ........................................................................................................................... 562
US$ RESERVE STATUS & ERODING INFLUENCE............................................................................................................................................ 564
RESEARCH WE FOLLOWED ......................................................................................................................................................................... 564
RESEARCH OF NOTE .................................................................................................................................................................................... 565
RESERVE CURRENCY - The World Is Beginning To Bypass America's Financial & Legally-Leveraged Political Power ....................... 565
RESERVE CURRENCY - Putin Adviser Proposes "Anti-Dollar Alliance ................................................................................................... 566
RESERVE CURRENCY - Chinese, Swiss Central Banks Sign Bilateral Swap Agreement ....................................................................... 567
RESERVE CURRENCY - France, Brazil, India & Now South Korea Join Russia & China In Post-Dollar World Order ............................ 568
RESERVE CURRENCY - Frances Noyer Says BNP May Prompt Shift Away From Dollar ...................................................................... 570
RESERVE CURRENCY - More Russian Companies Set To Drop Dollar, Switch To Chinese Yuan ........................................................ 571
RESERVE CURRENCY - Russia, China sign deal to bypass U.S. dollar .................................................................................................. 572
RESERVE CURRENCY - Japan May Eclipse China Again, as Largest Holder of US Treasuries............................................................. 573
PRIOR REPORT Minor Updates & Editions ....................................................................................................................................................... 575
INTERNATIONAL BANKING & SHADOW BANKING ........................................................................................................................................... 575
DEBT REITS & CMBS Growth ................................................................................................................................................................. 577
DEBT - GLOBAL DEBT 313% of GDP ........................................................................................................................................................ 578
DEBT - 202M GLOBALLY UNEMPLOYED DEBTORS .............................................................................................................................. 580
GEO-ECONOMICS OF ENERGY & PETRO$ ...................................................................................................................................................... 582
UKRAINE ..................................................................................................................................................................................................... 583
UKRAINE - Pulled between EU v Russia ................................................................................................................................................ 583
UKRAINE - Pulled between An Ethnic Eastern and Western Ukraine .................................................................................................... 583
UKRAINE - Pulled between Economic Inequality Factors ....................................................................................................................... 584
UKRAINE - Pulled between the Global Military Balance ......................................................................................................................... 585
UKRAINE - Pulled by Global Financial Markets ...................................................................................................................................... 586
UKRAINE - A Deep State Analysis .......................................................................................................................................................... 589
PETRODOLLAR Collapsing PetroDollar Foundation ............................................................................................................................... 593

All Rights Reserved
ENERGY PRICING PRESSURES...................................................................................................................................................................... 597

RESEARCH OF NOTE .................................................................................................................................................................................... 597
ENERGY - Major Inflection Point Coming Near-Term In Energy Prices ..................................................................................................... 597
ENERGY - Russia Prepares Mega-Deal with India After Locking Up China With "Holy Grail" Gas Deal .................................................. 600
ENERGY - Putin Prepares To Announce "Holy Grail" Gas Deal With China ............................................................................................. 603
ENERGY - The Growing Rift with Saudi Arabia Threatens To Severely Damage the Petrodollar ............................................................. 606
FOOD PRICES & SHORTAGES Potential Disruption........................................................................................................................................ 610
CHARTS OF NOTE ......................................................................................................................................................................................... 610
CHARTS US CPI Turns Up on Food & Energy ........................................................................................................................................ 610
CHARTS CRB US Spot Foodstuff Index One Year .............................................................................................................................. 610
CHARTS CRB Food Index One Year .................................................................................................................................................... 612
CHARTS Global Food Price Change 2007-2013 ..................................................................................................................................... 613
CHARTS Food Prices Spiking Up ............................................................................................................................................................ 614
CHARTS Food Prices Spiking Up ............................................................................................................................................................ 615
CHARTS Retail Food Services and Drinking Place Sales ....................................................................................................................... 615
CHARTS Retail CRE Price/ Cost Pressures ............................................................................................................................................ 616
CHARTS Retail CRE Price/ Cost Pressures - 2 ....................................................................................................................................... 617
CHARTS Spiking Beef Prices ................................................................................................................................................................... 618
CHARTS Coffee Futures .......................................................................................................................................................................... 618
CHARTS Lean Hog Futures ..................................................................................................................................................................... 619
CHARTS Ukraine Corn and Wheat Prices Up 15% Since YB .............................................................................................................. 619
CHARTS Global Food Imports versus % Y-o-Y US$ Change ................................................................................................................. 620
CHARTS UK Food Retailers v Commodity Food Price Index .................................................................................................................. 620
RESEARCH OF NOTE .................................................................................................................................................................................... 621
FOOD INFLATION - Food Prices Surge as Drought Exacts a High Toll on Crops .................................................................................... 621
FOOD INFLATION - Food Prices, Driver of Social Unrest .......................................................................................................................... 624
FOOD INFLATION - Food Price Manipulation in Thailand.......................................................................................................................... 625
EMERGING & FRONTIER MARKETS - Unfolding 2014 Crisis .......................................................................................................................... 627
CHARTS OF NOTE ......................................................................................................................................................................................... 630
CHARTS BRIC Countries Responsible for 43% of Global Growth .......................................................................................................... 630
CHARTS BRIC & Emerging Market Inflation Rates ................................................................................................................................. 630
CHARTS Emerging Market Default Probability ........................................................................................................................................ 631
CHARTS Emerging Market versus Developed Market Public Debt and External Borrowing Positions .................................................. 631
CHARTS Emerging Market Outflows........................................................................................................................................................ 632
CHARTS Emerging Market Outflows -2 ................................................................................................................................................... 632
CHARTS Developed versus Emerging Equity Markets 1990-2014 ...................................................................................................... 633
CHARTS Total GEM Flows....................................................................................................................................................................... 633
CHARTS The Emerging Markets Have Been Weakening Since 2011 .................................................................................................... 634
RESEARCH OF NOTE .................................................................................................................................................................................... 635
EMERGING MARKETS - Fragile Five: The new focus of currency wars ................................................................................................... 635
EMERGING MARKETS - Crisis Redux? ..................................................................................................................................................... 636
EMERGING MARKETS - Losing Their Punch ............................................................................................................................................ 641
EMERGING MARKETS - Risk-On! .............................................................................................................................................................. 643
EMERGING MARKETS - Asia, BRIC, Emerging Markets Crater IBM Earnings ........................................................................................ 644
EMERGING MARKETS - Crisis Temporarily Halted ................................................................................................................................... 646
EMERGING MARKETS - Increasing Liquidity Problems In Selected Markets ........................................................................................... 647
EMERGING MARKETS - The plight of four Asian countries - China, India, Indonesia and Japan. ........................................................... 653
EMERGING MARKETS - The Impact of "TAPER" ...................................................................................................................................... 658
EMERGING MARKETS - EM Crisis will make the 1997 Asian Crisis Seem like an Early Warning ........................................................... 662
EMERGING MARKETS - Global Deleveraging Accelerating and Developing Nations Feeling the Pain ................................................... 664
CYBER SPYING .............................................................................................................................................................................................. 667
CURRENCY WARS BACK ON Rate Wars Reversed With Un-Taper ............................................................................................................... 668
CURRENCY WARS - A Major Shift................................................................................................................................................................. 668
BATTLEFIELD - Combatants & Belligerents ................................................................................................................................................... 672
BATTLEFIIELD - The Race to Debase ........................................................................................................................................................... 673
JAPAN - The Destabilizing Agent .................................................................................................................................................................... 676
EUROPE - Euro Exposed ................................................................................................................................................................................ 676
ARGENTINA - Here we Go Again! .................................................................................................................................................................. 678
VENEZUELLA - Bad Situation ......................................................................................................................................................................... 679
BRAZIL - No One Wants to Listen ................................................................................................................................................................... 679
SWITZERLAND - No Choice ........................................................................................................................................................................... 679
SINGAPORE - Hot Money ............................................................................................................................................................................... 680
UK- Pound Joins War ...................................................................................................................................................................................... 681
CYBER WARS Growing Threat & the Security-Surveillance Complex .............................................................................................................. 682
SECURITY-SURVEILLANCE COMPLEX - NSA Whistleblower Example: Booz Hamilton ............................................................................ 685
SECURITY SURVEILLANCE COMPLEX - Growing Without Public Control or Supervision! ........................................................................ 687
REGIONAL ............................................................................................................................................. 688

EU ECB & DRAGHI WILL SOON TAKE ACTION AGAINST CRIPPLING EURO LEVELS ............................... Error! Bookmark not defined.
RESEARCH WE FOLLOWED ............................................................................................................................. Error! Bookmark not defined.
CHARTS OF NOTE ............................................................................................................................................. Error! Bookmark not defined.

All Rights Reserved
CHARTS EU Financial Conditions Deteriorating .......................................................................................... Error! Bookmark not defined.

CHARTS EU Confidence .............................................................................................................................. Error! Bookmark not defined.
CHARTS - Slow Money Growth May Stoke Deflation Concerns .................................................................... Error! Bookmark not defined.
CHARTS - Euro-Area Inflation at Lowest Level Since 2009 Individual Countries ....................................... Error! Bookmark not defined.
CHARTS - Euro-Area Inflation Aggregate .................................................................................................... Error! Bookmark not defined.
CHARTS - 10M Part-Time Workers Underemployed in EU ............................................................................ Error! Bookmark not defined.
CHARTS - Euro-Area Housing Prices Decline ................................................................................................ Error! Bookmark not defined.
CHARTS - Euro-Area Trade Surplus ............................................................................................................... Error! Bookmark not defined.
CHARTS - Euro-Area Composite PMI ............................................................................................................. Error! Bookmark not defined.
CHARTS - EU Area Weakness ....................................................................................................................... Error! Bookmark not defined.
CHARTS - EU Area GDP ................................................................................................................................. Error! Bookmark not defined.
CHARTS - EU Area PMI .................................................................................................................................. Error! Bookmark not defined.
CHARTS - EU Area PMI .................................................................................................................................. Error! Bookmark not defined.
CHARTS - EU Real Rates ............................................................................................................................... Error! Bookmark not defined.
CHARTS - EU -NON Euro Members GDP RELIANCE ................................................................................... Error! Bookmark not defined.
CHARTS - EU GLOBAL GDP GROWTH CONTRIBUTION ........................................................................... Error! Bookmark not defined.
CHARTS - EU PMI ........................................................................................................................................... Error! Bookmark not defined.
CHARTS - EU CPI ........................................................................................................................................... Error! Bookmark not defined.
CHARTS - Regional Risk-Reward ................................................................................................................... Error! Bookmark not defined.
CHARTS - Europe's "Core" Problem is France .......................................................................................... Error! Bookmark not defined.
CHARTS - Germany's Preoccupation with Inflation is More Than It Would Seem ................................. Error! Bookmark not defined.
CHARTS - Evidence OF Global Slowing Now Indisputable ....................................................................... Error! Bookmark not defined.
CHARTS - EU Credit Downgrades, France and UK On Tap ......................................................................... Error! Bookmark not defined.
CHARTS - Perceived Reduction in Risk, A Temporary Aberration ................................................................. Error! Bookmark not defined.
CHARTS - Dangerous Delusional Divergences .......................................................................................... Error! Bookmark not defined.
CHARTS - IMF Projections for Euro Area and GIIPS ..................................................................................... Error! Bookmark not defined.
CHARTS - Air Cargo Shipments Confirm Slowing Global Growth .................................................................. Error! Bookmark not defined.
CHARTS - Eurozone Misery Indices Never Been Higher ........................................................................... Error! Bookmark not defined.
CHARTS - Euro Currency ................................................................................................................................ Error! Bookmark not defined.
RESEARCH OF NOTE ........................................................................................................................................ Error! Bookmark not defined.
RESEARCH EU Version of QE Coming -> UST Purchases to Drive Euro Down ................................. Error! Bookmark not defined.
RESEARCH Beware of EU Banks! ............................................................................................................... Error! Bookmark not defined.
RESEARCH Emerging Markets Aggravates Festering Banking Problems .......................................... Error! Bookmark not defined.
RESEARCH European Banks Have $3 Trillion of Exposure To Emerging Markets ............................ Error! Bookmark not defined.
RESEARCH - EFSF Downgraded to AA+ ..................................................................................................... Error! Bookmark not defined.
RESEARCH - EU Stabilization Programs Are Presently Very Fragile ............................................................ Error! Bookmark not defined.
RESEARCH - Spreads Widened in Peripherals and Significantly in Portugal and Greece .................... Error! Bookmark not defined.
SITUATIONAL ASSESSMENT ........................................................................................................................... Error! Bookmark not defined.
PROGNOSIS: Why the European Situation Will Get Worse ........................................................................... Error! Bookmark not defined.
PROGNOSIS: Increasing Structural Imbalances ............................................................................................ Error! Bookmark not defined.
PROGNOSIS: $22T Unaccounted - A Hidden World of Contingent Liabilities, Government Backing & Guarantees. ............... Error!
Bookmark not defined.
PROGNOSIS: Monetary Malpractice - ECB's LTRO Not a Solution but ......................................................... Error! Bookmark not defined.
PROGNOSIS: Monetary Malpractice - ECB's SMP Effort Futile ..................................................................... Error! Bookmark not defined.
PROGNOSIS: Monetary Malpractice - ECB Accepts BBB Collateral ............................................................. Error! Bookmark not defined.
PROGNOSIS: EU Banking Overbanked, Undercapitalized and Now Insolvent ............................................. Error! Bookmark not defined.
PROGNOSIS: Monetary Malpractice - TARGET2 "Contingent Liabilities" .............................................. Error! Bookmark not defined.
PROGNOSIS: Bailouts - Unsustainable & Unfundable ................................................................................... Error! Bookmark not defined.
ITALY BOND YIELDS FALL TO RECORD LOW ................................................................................................... Error! Bookmark not defined.
CHARTS OF PARTICULAR IMPORTANCE ....................................................................................................... Error! Bookmark not defined.
CHARTS - ITALY 10 Year Bond Yields Fall to Record Low ........................................................................ Error! Bookmark not defined.
CHARTS - ITALY - Forced Rate Cuts ............................................................................................................. Error! Bookmark not defined.
RESEARCH - Italys Budget Failures, Weak Growth Outlook Call Debt Sustainability Into Question ........... Error! Bookmark not defined.
SITUATIONAL ASSESSEMENT ......................................................................................................................... Error! Bookmark not defined.
ITALIAN ELECTION - What You Need to Know ............................................................................................. Error! Bookmark not defined.
ITALIAN ELECTION - Europe Capitulates On Austerity- Never Had The Stomach For It ....................... Error! Bookmark not defined.
ITALIAN ELECTION - Message Given By the People .................................................................................. Error! Bookmark not defined.
ITALIAN ELECTION - Bad Debt Continue to Soar .......................................................................................... Error! Bookmark not defined.
ITALIAN ELECTION - Italians React Badly to Austerity, Elections Hardly a Surprise!................................. Error! Bookmark not defined.
ITALIAN ELECTION - EUROPEAN FEEDBACK - #1 ................................................................................... Error! Bookmark not defined.
ITALIAN ELECTION - EUROPEAN FEEDBACK - #2 ................................................................................... Error! Bookmark not defined.
ITALIAN ELECTION - Regional Financial Cracks in Sicily ........................................................................ Error! Bookmark not defined.
FRANCE HOLLANDE IN TROUBLE ...................................................................................................................... Error! Bookmark not defined.
CHARTS - FRANCE - GDP ............................................................................................................................. Error! Bookmark not defined.
CHARTS - FRANCE - UNEMPLOYMENT ...................................................................................................... Error! Bookmark not defined.
CHARTS - FRANCE - BUDGET DEFICIT ....................................................................................................... Error! Bookmark not defined.
CHARTS - FRANCE - TAX v GDP .................................................................................................................. Error! Bookmark not defined.
CHARTS - FRANCE - BUSINESS CONFIDENCE.......................................................................................... Error! Bookmark not defined.
RESEARCH - Steady Breakdown Underway ............................................................................................... Error! Bookmark not defined.
RESEARCH - France Loses its Coveted and NEEDED AAA Rating ......................................................... Error! Bookmark not defined.

All Rights Reserved
SITUATIONAL ASSESSMENT ........................................................................................................................... Error! Bookmark not defined.

FRANCE - What You Need to Know ............................................................................................................... Error! Bookmark not defined.
FRANCE - Key Indicators ................................................................................................................................ Error! Bookmark not defined.
FRANCE: Sharpest Drop in Private Sector Output in Four Years .................................................................. Error! Bookmark not defined.
FRANCE - Quits on Austerity - Never a Doubt This Would Happen............................................................ Error! Bookmark not defined.
FRANCE - Socialism is Expensive ............................................................................................................... Error! Bookmark not defined.
FRANCE - Has Turned back to Socialism ....................................................................................................... Error! Bookmark not defined.
FRANCE - Losing Its Way through Political Illusions and Lies ....................................................................... Error! Bookmark not defined.
FRANCE - Uncompetitive ................................................................................................................................ Error! Bookmark not defined.
FRANCE - Titan Tire Calls Out French Labor ................................................................................................. Error! Bookmark not defined.
FRANCE - France Responds to Titan Tire ...................................................................................................... Error! Bookmark not defined.
FRANCE - What Happens In France When Companies Fire People ............................................................. Error! Bookmark not defined.
FRANCE - Hollande's Economically Insane campaign Promise ..................................................................... Error! Bookmark not defined.
GERMANY MERKEL DANCING TO PUTINS ENERGY TUNE ............................................................................ Error! Bookmark not defined.
CHARTS - GERMANY - Inflation ..................................................................................................................... Error! Bookmark not defined.
CHARTS - GERMANY - IFO Investor Confidence .......................................................................................... Error! Bookmark not defined.
CHARTS - GERMANY - ZEW Expectations .................................................................................................... Error! Bookmark not defined.
RESEARCH - Merkel's Third Chancellorship Challenges .......................................................................... Error! Bookmark not defined.
RESEARCH - German Election - Merkel Begins Hunt for Coalition Partners................................................. Error! Bookmark not defined.
RESEARCH - Europe's Shadow Economy: As Big As Germany.................................................................... Error! Bookmark not defined.
GERMANY - Anti Euro AfD Party May Cost Merkel in Critical September Election ............................... Error! Bookmark not defined.
GERMANY - The Euro Crisis Escalation over Cyprus May Politically Cripple Merkel ........................... Error! Bookmark not defined.
GERMANY - Call for End of "Coercive Euro Association" .............................................................................. Error! Bookmark not defined.
UK MAY BE FIRST DEVELOPED ECONOMY TO RAISE RATES (AFTER ELECTION) .................................... Error! Bookmark not defined.
CHARTS - UK CPI Too Low for BOE and Falling ........................................................................................ Error! Bookmark not defined.
CHARTS - UK GDP ...................................................................................................................................... Error! Bookmark not defined.
CHARTS - UK Population Growth ................................................................................................................ Error! Bookmark not defined.
CHARTS - UK - Crushed Disposable Income ................................................................................................. Error! Bookmark not defined.
CHARTS - UK - BOE Balance Sheet Growth .................................................................................................. Error! Bookmark not defined.
CHARTS - UK - Lending .................................................................................................................................. Error! Bookmark not defined.
CHARTS - UK - Unemployment ...................................................................................................................... Error! Bookmark not defined.
CHARTS - UK - GDP - Pre and Post Recession Levels ................................................................................. Error! Bookmark not defined.
CHARTS - UK - GDP ....................................................................................................................................... Error! Bookmark not defined.
CHARTS - UK - BOE Rates ............................................................................................................................. Error! Bookmark not defined.
RESEARCH - UK workers' wage squeeze is longest since the 1870s ........................................................... Error! Bookmark not defined.
UK - What you need to Know........................................................................................................................... Error! Bookmark not defined.
UK - Joins Currency War - Down 8% YTD ................................................................................................... Error! Bookmark not defined.
UK - Specter of Stagflation Haunts UK ............................................................................................................ Error! Bookmark not defined.
UK - Public Policy turns Against Austerity and PM Cameron .................................................................. Error! Bookmark not defined.
UK - Doomsday Debt Machine ........................................................................................................................ Error! Bookmark not defined.
UK - QE Extension Coming ............................................................................................................................. Error! Bookmark not defined.
UK - Small Business Credit Squeeze Now Acute - Loan Rejections Rising ........................................... Error! Bookmark not defined.
UK - Technically in a Depression ................................................................................................................. Error! Bookmark not defined.
IBERIAN PENINSULA NEW MORTGAGE LOANS DOWN 33% Y-o-Y ................................................................ Error! Bookmark not defined.
CHARTS - PORTUGAL - Deficit Problem ....................................................................................................... Error! Bookmark not defined.
RESEARCH - Presidential Warning Spikes Yields To 8 Months Highs .................................................... Error! Bookmark not defined.
RESEARCH - Clear Signs of Desperation In Spain from a Growing Collateral Contagion .................... Error! Bookmark not defined.
RESEARCH - The Spanish Government's 'Bad Bank' Scam .................................................................... Error! Bookmark not defined.
IBERIA - Credit Downgrades - At Precipice of "Non Investment Grade" ........................................................ Error! Bookmark not defined.
IBERIA - Regional Bailout Bailouts a Massive Problem ............................................................................ Error! Bookmark not defined.
IBERIA - NPL Going Ballistic ........................................................................................................................ Error! Bookmark not defined.
IBERIA - Spanish Funding Problem ............................................................................................................. Error! Bookmark not defined.
IBERIA - The Giant Spanish Housing Bubble, Now Beginning to Implode ..................................................... Error! Bookmark not defined.
IBERIA - Mal-Investment Coming Home to Roost........................................................................................... Error! Bookmark not defined.
IBERIA - Bank Deposits Were Leaving, Now they Are Fleeing ...................................................................... Error! Bookmark not defined.
IBERIA - Now a Capital Investment Problem .................................................................................................. Error! Bookmark not defined.
IBERIA - Banks on Artificial "Ponzi Bond" Life Support .................................................................................. Error! Bookmark not defined.
ASIA CREDIT CRACKS WIDENING ................................................................................................ ERROR! BOOKMARK NOT DEFINED.

CHINA PROBLEMS IN CREDIT & SHADOW BANKING ..................................................................................... Error! Bookmark not defined.
CHARTS Chinas Gross Fixed Capital Formation Problem ......................................................................... Error! Bookmark not defined.

All Rights Reserved
CHARTS Chinese Investment Peaking ........................................................................................................ Error! Bookmark not defined.

CHARTS China Equity Flows ....................................................................................................................... Error! Bookmark not defined.
CHARTS Credit Accumulation Rate Growth Comparisons ....................................................................... Error! Bookmark not defined.
CHARTS Chinese Credit Growth .................................................................................................................. Error! Bookmark not defined.
CHARTS 5 Year Debt Growth versus GDP .................................................................................................. Error! Bookmark not defined.
CHARTS 5 Year Credit Growth .................................................................................................................... Error! Bookmark not defined.
CHARTS Growth Propensity of Credit Growth........................................................................................... Error! Bookmark not defined.
CHARTS Chinas Bad Loans - NPL.............................................................................................................. Error! Bookmark not defined.
CHARTS Slowing Steel Consumption .......................................................................................................... Error! Bookmark not defined.
CHARTS Shadow Banking System .............................................................................................................. Error! Bookmark not defined.
CHARTS Dramatic Chinese Housing Slowdown ......................................................................................... Error! Bookmark not defined.
CHARTS - CHINA - A Global Slowdown on the Verge of Contraction............................................................ Error! Bookmark not defined.
CHARTS - CHINA - Chinese Credit Market .................................................................................................... Error! Bookmark not defined.
CHARTS - CHINA - PMI .................................................................................................................................. Error! Bookmark not defined.
CHARTS - CHINA - PMI-2 ............................................................................................................................... Error! Bookmark not defined.
CHARTS - CHINA - GDP ................................................................................................................................. Error! Bookmark not defined.
CHARTS - CHINA Industrial Output ............................................................................................................. Error! Bookmark not defined.
CHARTS - CHINA - Urban Fixed Asset Investment ........................................................................................ Error! Bookmark not defined.
CHARTS - CHINA Retail Sales .................................................................................................................... Error! Bookmark not defined.
CHINA - What Happens After the Low-Hanging Fruit Has Been Picked? ................................................ Error! Bookmark not defined.
CHINA SHADOW BANKING - CCFD (Chinese Commodity Funding Deals) ............................................. Error! Bookmark not defined.
CHINA - Cracks Beginning to Show ............................................................................................................. Error! Bookmark not defined.
CHINA - Has an Inflation Problem ................................................................................................................... Error! Bookmark not defined.
CHINA - Chinese Coal Producer Collapse a Major Shadow Banking Problem ....................................... Error! Bookmark not defined.
CHINA - China Orders Its Smaller Banks to Load Up On Cash ................................................................ Error! Bookmark not defined.
CHINA - How the Chinese Economic Disaster Scenario Could Unfold ................................................... Error! Bookmark not defined.
CHINA - Skilled Labor Shortages & Losing Labor Cost Advantage ......................................................... Error! Bookmark not defined.
CHINA - Launches Crackdown On "Off Balance Sheet" Credit ................................................................ Error! Bookmark not defined.
CHINA - China's Stunning $15 Trillion in New Liquidity - Part II............................................................... Error! Bookmark not defined.
CHINA - China's Stunning $15 Trillion In New Liquidity ............................................................................ Error! Bookmark not defined.
RESEARCH OF NOTE LAST REPORT (Reference) ...................................................................................... Error! Bookmark not defined.
RESEARCH - China's Stunning $15 Trillion in New Liquidity ................................................................... Error! Bookmark not defined.
RESEARCH - Dr. Copper Ready to Top and Head Lower .......................................................................... Error! Bookmark not defined.
RESEARCH - China's $1 Trillion GDP Lie .................................................................................................... Error! Bookmark not defined.
RESEARCH - What the Deceleration Could Portend.................................................................................. Error! Bookmark not defined.
RESEARCH - Credit Bubble: 240% Of GDP And Soaring .......................................................................... Error! Bookmark not defined.
RESEARCH - Forget Taper risk: China is a bigger threat ............................................................................. Error! Bookmark not defined.
RESEARCH - Sustainability Requires a Slowdown in Investment .................................................................. Error! Bookmark not defined.
RESEARCH - China Likely to Continue Interest Rate Liberalization .............................................................. Error! Bookmark not defined.
RESEARCH - China #1 in Broad Array of Key Areas ..................................................................................... Error! Bookmark not defined.
RESEARCH - Global Business Confidence Sliding Rapidly ..................................................................... Error! Bookmark not defined.
RESEARCH - Investors Worried and Losing Confidence .......................................................................... Error! Bookmark not defined.
RESEARCH - China Stampeding into Gold ................................................................................................. Error! Bookmark not defined.
RESEARCH - China "Will introduce some measures to arrest the slowdown of growth in the next couple of quarters" ......... Error!
Bookmark not defined.
RESEARCH - Slower Growth In the Cards & Endorsed by New Chinese Leadership ........................... Error! Bookmark not defined.
RESEARCH - Is a PBOC Controlled Speculation Bust Possible or Will It Get Out of Control .............. Error! Bookmark not defined.
RESEARCH - PBOC Liquidity Squeeze ....................................................................................................... Error! Bookmark not defined.
RESEARCH - Chinese Housing Bubble Restricting PBOC Actions .......................................................... Error! Bookmark not defined.
RESEARCH - PBOC Squeezing Banks towards Reducing Speculative Risk .......................................... Error! Bookmark not defined.
RESEARCH - Chinese Overnight Repo at 25% ............................................................................................ Error! Bookmark not defined.
RESEARCH - Red Flags ................................................................................................................................. Error! Bookmark not defined.
RESEARCH - Credit Fueled Growth in China ............................................................................................. Error! Bookmark not defined.
RESEARCH - PBOC Wants to Hold the Line on Explosive Credit Expansion through A Liquidity Squeeze ..... Error! Bookmark not
defined.
RESEARCH - A Potentially De-Stabilizing Cash Crunch ........................................................................... Error! Bookmark not defined.
SITUATIONAL ANALYSIS & KEY NOTES ......................................................................................................... Error! Bookmark not defined.
CHINA SHADOW BANKING - Shadow Banking System Showing Signs of Implosion ........................... Error! Bookmark not defined.
CHINA SHADOW BANKING - Shadow Banking and Credit Growth .......................................................... Error! Bookmark not defined.
CHINA SHADOW BANKING - The US Sub-Prime / CDO All Over Again ................................................... Error! Bookmark not defined.
CHINA SHADOW BANKING - Report ............................................................................................................. Error! Bookmark not defined.
CHINA SHADOW BANKING - Situation ....................................................................................................... Error! Bookmark not defined.
CHINA RESERVES - Distorted Foreign Reserve Levels ............................................................................ Error! Bookmark not defined.
CHINA RESERVES - Declining Reserve Accumulation .................................................................................. Error! Bookmark not defined.
CHINA RESERVES - Has Caught the Gold Bug big time! .......................................................................... Error! Bookmark not defined.
CHINA CURRENCY WARS - Hot Money into China .................................................................................... Error! Bookmark not defined.
CHINA - Withdraws Liquidity ........................................................................................................................ Error! Bookmark not defined.
CHINA - Socit General Sees a Likely Soft Landing! ............................................................................... Error! Bookmark not defined.
CHINA - True Debt is Orders of Magnitude More than Officially Being Reported .................................. Error! Bookmark not defined.
CHINA - Evidence OF Slowing Now Indisputable ...................................................................................... Error! Bookmark not defined.
CHINA - PMI Improvement............................................................................................................................. Error! Bookmark not defined.
CHINA - Political Transition & Ongoing Emergence as a Super Power .................................................. Error! Bookmark not defined.
CHINA - An Implicit Social Contract ................................................................................................................ Error! Bookmark not defined.
CHINA - Manipulated Statistics due to Upcoming Decade Long Regime Change ................................. Error! Bookmark not defined.
CHINA - Increasing Leverage is China's Way of Monetary Easing .......................................................... Error! Bookmark not defined.
10

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CHINA - Possible Interest-Rate Liberalization................................................................................................. Error! Bookmark not defined.

CHINA - Global Impact of China's Slowdown ............................................................................................. Error! Bookmark not defined.
CHINA - Shanghai Composite at 2008 Low Levels .................................................................................... Error! Bookmark not defined.
CHINA - Shanghai Composite Warnings Signs .......................................................................................... Error! Bookmark not defined.
CHINA - Credit to GDP ................................................................................................................................... Error! Bookmark not defined.
CHINA - A Slow Recovery Through 2013 ....................................................................................................... Error! Bookmark not defined.
CHINA - Manufacturing PMI in Contraction Territory ................................................................................ Error! Bookmark not defined.
JAPAN: FINANCIAL REPRESSION BEING DESPERATELY ADVANCED IN JAPAN ON MULTIPEL ABE-NOMIC FRONTS ..Error! Bookmark
not defined.
CHARTS Japan Adjusted Trade Balance ..................................................................................................... Error! Bookmark not defined.
CHARTS Japan BoP Current Account Balance ........................................................................................ Error! Bookmark not defined.
CHARTS 5T Yen of JGB Selling ................................................................................................................... Error! Bookmark not defined.
CHARTS Sovereign Debt % of Tax Revenue .............................................................................................. Error! Bookmark not defined.
CHARTS Public Sector Debt Issuances 2013 as % GDP ............................................................................ Error! Bookmark not defined.
CHARTS - GDP Trend ..................................................................................................................................... Error! Bookmark not defined.
CHARTS - CPI Trend ....................................................................................................................................... Error! Bookmark not defined.
CHARTS - JAPAN - GDP Resurgence ............................................................................................................ Error! Bookmark not defined.
CHARTS - JAPAN - BOJ Balance Sheet ........................................................................................................ Error! Bookmark not defined.
JAPAN - Japanese Financial Repression - Changes in Allocation of Japanese Retirement Accounts Coming ........... Error! Bookmark not
defined.
JAPAN - Japan bond market liquidity dries up as BoJ holding crosses 200tn.............................................. Error! Bookmark not defined.
JAPAN - Abe Approval Rating Plunges ....................................................................................................... Error! Bookmark not defined.
JAPAN - What the Japanese been Buying ................................................................................................... Error! Bookmark not defined.
JAPAN - Japan May Matter More Than Tapering ........................................................................................ Error! Bookmark not defined.
JAPAN - Japan Finances Worse than at Wars End ................................................................................... Error! Bookmark not defined.
JAPAN - BOJ: "The days of constructive ambiguity is over! ............................................................... Error! Bookmark not defined.
JAPAN - Abenomics Third Arrow Growth Strategy Underwhelms ................................................................ Error! Bookmark not defined.
JAPAN - 2nd ABE-nomics $200B Stimulus Package Approved ............................................................... Error! Bookmark not defined.
JAPAN - Worlds Biggest Pension Fund Sees Japan Fail on ABE-nomics' 2% Inflation Goal ............. Error! Bookmark not defined.
JAPAN - The Abe-nomics Failure ................................................................................................................. Error! Bookmark not defined.
SITUATIONAL ASSESSEMENT & KEY NOTES ................................................................................................ Error! Bookmark not defined.
JAPAN - What You Need to Know................................................................................................................... Error! Bookmark not defined.
JAPAN - No Way Out But to Expand the Monetary Base ........................................................................... Error! Bookmark not defined.
JAPAN - BOJ to "Own" 100% of GDP in 5 Years ........................................................................................ Error! Bookmark not defined.
JAPAN - Adjusted trade deficit the worst in Bloomberg's 20 year history .............................................. Error! Bookmark not defined.
JAPAN - How Japan's National Debt Grew ..................................................................................................... Error! Bookmark not defined.
JAPAN - ABE-nomics About Lowering Real Interest Rates ...................................................................... Error! Bookmark not defined.
JAPAN - Japanese Bonds Have Lost Their Ability to Price Risk .............................................................. Error! Bookmark not defined.
JAPAN - Japanese Structural Problems a "Canary" for Western Developed Economies ...................... Error! Bookmark not defined.
JAPAN - Shinzo Abe Hasn't the Stomach for the Heavy Lifting Needed to Accompany ABE-nomics. Error! Bookmark not defined.
JAPAN - A Credit Squeeze Leads Deflationary Leg Down ........................................................................ Error! Bookmark not defined.
JAPAN - Some Japanese Policies Have Clearly Hit the Limit ................................................................... Error! Bookmark not defined.
JAPAN - The ABE (Asset Bubble Evaluator) Index ..................................................................................... Error! Bookmark not defined.
JAPAN - Regional Risk-Reward ...................................................................................................................... Error! Bookmark not defined.
JAPAN - Now the Frontrunner of Outright Monetization. .......................................................................... Error! Bookmark not defined.
JAPAN - Yen Devaluation .............................................................................................................................. Error! Bookmark not defined.
JAPAN - New Bank of Japan Policy - 2% Inflation in 2 Years ................................................................... Error! Bookmark not defined.
JAPAN - Appoints BOJ Governor Firmly Committed to Printing Money ................................................. Error! Bookmark not defined.
JAPAN - Third Straight Quarter of Recession ............................................................................................. Error! Bookmark not defined.
JAPAN - Full Out War on Deflation ............................................................................................................... Error! Bookmark not defined.
JAPAN - First Test of the new found dominance of the Central Banks ................................................ Error! Bookmark not defined.
JAPAN - BOJ Was Next Up. No Surprise .................................................................................................... Error! Bookmark not defined.
JAPAN - Negative Current Account Balance and -3.5% Recession ......................................................... Error! Bookmark not defined.
JAPAN - A 50% Over-Valued Yen Has Undermined Self Confidence & Drive ......................................... Error! Bookmark not defined.
JAPAN - Proves QE's Low Cost of Capital Does Structural Damage to Economy ................................. Error! Bookmark not defined.
JAPAN - BOJ Being Pressured to "Rip-Up Government Debt"1 .............................................................. Error! Bookmark not defined.
JAPAN - Easy Money Has Hurt Corporate Profitability in the Longer Term ........................................... Error! Bookmark not defined.
JAPAN - The Biggest Debtor with the Biggest Problem! .......................................................................... Error! Bookmark not defined.
JAPAN - A Magnitude Larger Problem than Europe ....................................................................................... Error! Bookmark not defined.
JAPAN - QE 9 A Complete Failure - Actually "Tightens" versus It's Intended Easing .................................... Error! Bookmark not defined.
JAPAN - Japanese Yen Continuously Under Attack ....................................................................................... Error! Bookmark not defined.
JAPAN - Vast foreign US$ Coming Home for "Claim" .................................................................................... Error! Bookmark not defined.
JAPAN - PMI Breakdown ................................................................................................................................. Error! Bookmark not defined.
JAPAN - Exports Continue To Tumble ........................................................................................................ Error! Bookmark not defined.
JAPAN - Intervention Fails Again - It's a Whole new Ball Game .............................................................. Error! Bookmark not defined.
JAPAN - First Signs of Massive Debt Monetization After Next Election ......................................................... Error! Bookmark not defined.
JAPAN - Japan to the ESM's Rescue ........................................................................................................... Error! Bookmark not defined.
EMERGING MARKETS ECHO CRISIS STILL AHEAD .................................................................... ERROR! BOOKMARK NOT DEFINED.
CHARTS - Reserves versus World .................................................................................................................. Error! Bookmark not defined.
11

All Rights Reserved
CHARTS - Current Account Balances versus GDP ........................................................................................ Error! Bookmark not defined.
CHARTS - Emerging Markets Index versus MSCI World Index ..................................................................... Error! Bookmark not defined.
CHARTS - SINGAPORE - Inflation .................................................................................................................. Error! Bookmark not defined.
CHARTS - SINGAPORE - Exports .................................................................................................................. Error! Bookmark not defined.
CHARTS - SOUTH KOREA ............................................................................................................................. Error! Bookmark not defined.
CHARTS - TURKEY - Spreads ........................................................................................................................ Error! Bookmark not defined.
EMERGING MARKETS - Forced Changes & Advancements in the Normal "Plundering" Strategy ..... Error! Bookmark not defined.
EMERGING MARKETS - Crisis Temporarily Halted .................................................................................... Error! Bookmark not defined.
EMERGING MARKETS - The plight of four Asian countries - China, India, Indonesia and Japan. ....... Error! Bookmark not defined.
EMERGING MARKETS - Negative Current Accounts + Weak(ening) International Investment Positioning . Error! Bookmark not defined.
EMERGING MARKETS - "TAPER" Shock Waves Across Asia ................................................................. Error! Bookmark not defined.
EMERGING MARKETS - Global Bond Yields React Together ................................................................... Error! Bookmark not defined.
EMERGING MARKETS - A Bumpy Ride for Emerging Markets ..................................................................... Error! Bookmark not defined.
EMERGING MARKETS - Stunning Withdrawals.......................................................................................... Error! Bookmark not defined.
EMERGING MARKETS - Bond Outflows Accelerating ............................................................................... Error! Bookmark not defined.
EMERGING MARKETS - This will make the 1997 Asian Crisis Seem Like an Early Warning ................ Error! Bookmark not defined.
EMERGING MARKETS - Developing Nations Feeling the Pain of Global Deleveraging Acceleration . Error! Bookmark not defined.
EMERGING MARKETS - The Impact of "TAPER" ....................................................................................... Error! Bookmark not defined.
EMERGING MARKETS - What you Need to Know ............................................................................................ Error! Bookmark not defined.
EMERGING MARKETS - Comparative Ease of Doing Business................................................................. Error! Bookmark not defined.
EMERGING MARKETS - Importance of Employment, Equality and Per Capital Income ....................... Error! Bookmark not defined.
ASIA ..................................................................................................................................................................... Error! Bookmark not defined.
ASIA: CHARTS - REVENUE ........................................................................................................................... Error! Bookmark not defined.
ASIA: CHARTS EXPENDITURES ................................................................................................................ Error! Bookmark not defined.
ASIA: CHARTS SPENDING GAPS .............................................................................................................. Error! Bookmark not defined.
ASIA: CHARTS DEBT SERVICE ................................................................................................................. Error! Bookmark not defined.
ASIA: CHARTS - SINGAPORE ....................................................................................................................... Error! Bookmark not defined.
ASIA: CHARTS INDONESIA CPI May 2014 .......................................................................................... Error! Bookmark not defined.
ASIA: CHARTS INDONESIA CPI Aug 2013 .......................................................................................... Error! Bookmark not defined.
ASIA: CHARTS A Short Term Dead Cat Bounce? ................................................................................ Error! Bookmark not defined.
ASIA: CHARTS Inflation Problems Abound.............................................................................................. Error! Bookmark not defined.
ASIA: CHARTS Healthier Public Debt and Borrowing Positions than DM ............................................ Error! Bookmark not defined.
ASIA: CHARTS - AUSTRALIA ......................................................................................................................... Error! Bookmark not defined.
ASIA - Regional Risk-Reward .......................................................................................................................... Error! Bookmark not defined.
ASIA - Credit Contraction Problems ............................................................................................................ Error! Bookmark not defined.
ASIA - Corporate Debt Levels Reflect Unintended Consequences of Mispricing & Mal-Investment ... Error! Bookmark not defined.
ASIA - Synchronized Markets .......................................................................................................................... Error! Bookmark not defined.
ASIA - Caution Advised Regarding Positive South Korea Export Turnaround ............................................... Error! Bookmark not defined.
ASIA - Export Growth Looks Similar to Pre-2008 ....................................................................................... Error! Bookmark not defined.
ASIA - Global Slowing Quickly a Worsening Situation Across Asia ....................................................... Error! Bookmark not defined.
ASIA - Risks All on the Downside for Asia ................................................................................................. Error! Bookmark not defined.
ASIA - Demographic Headwinds .................................................................................................................. Error! Bookmark not defined.
ASIA - Pronounced Flight to Singapore Safety ............................................................................................... Error! Bookmark not defined.
BRICS .................................................................................................................................................................. Error! Bookmark not defined.
BRICS Responsible for 43% of Global Growth in 2013 .......................................................................... Error! Bookmark not defined.
BRICS A Short Term Dead Cat Bounce? .............................................................................................. Error! Bookmark not defined.
BRICS Inflation Problems Abound ............................................................................................................ Error! Bookmark not defined.
BRICS - EU Major Contributor to EM Current Account Deficit Growth .................................................... Error! Bookmark not defined.
BRICS - Insufficient Levels Prompt Russian-Chinese Support ................................................................ Error! Bookmark not defined.
BRICS - A Development Bank-Forex Reserve Pool-African Integration .................................................. Error! Bookmark not defined.
BRICS - 40% of World Population and 25% of World GDP ........................................................................ Error! Bookmark not defined.
BRICS - $3 to $13B GDP in Ten Years ......................................................................................................... Error! Bookmark not defined.
BRICS- A World Wide Distrust of Financial Markets Building .................................................................. Error! Bookmark not defined.
BRAZIL................................................................................................................................................................. Error! Bookmark not defined.
BRAZIL - Inflation will remain high thanks to a "growth mismatch". ................................................................ Error! Bookmark not defined.
BRAZIL - Sharpest Decline in 2013 Growth Forecast ..................................................................................... Error! Bookmark not defined.
RUSSIA - Central bank will hike rates if inflation and oil prices continue to rise. ............................................... Error! Bookmark not defined.
INDIA.................................................................................................................................................................... Error! Bookmark not defined.
INDIA Inflation ............................................................................................................................................... Error! Bookmark not defined.
INDIA - Inflation ................................................................................................................................................ Error! Bookmark not defined.
INDIA - WPI ...................................................................................................................................................... Error! Bookmark not defined.
INDIA - Will be fine as long as it continues to reduce its deficit. ..................................................................... Error! Bookmark not defined.
INDIA - Panic in India ....................................................................................................................................... Error! Bookmark not defined.
INDIA - India Rupee Collapse Showing Signs of Exhaustion ................................................................... Error! Bookmark not defined.
INDIA - Watch Out For RE-Emergence of Food Price Inflation ................................................................. Error! Bookmark not defined.
SOUTH AFRICA .................................................................................................................................................. Error! Bookmark not defined.
LATIN AMERICA ................................................................................................................................................. Error! Bookmark not defined.
VENEZUELA Signs of a Crack-up Boom and Dictatorship .................................................................... Error! Bookmark not defined.
VENEZUELA - Shortages & Hyperinflation .................................................................................................. Error! Bookmark not defined.
MIDDLE EAST ..................................................................................................................................................... Error! Bookmark not defined.
TURKEY ........................................................................................................................................................... Error! Bookmark not defined.
US ECONOMY ..................................................................................................................................... 1377
12

All Rights Reserved
THE GLOBAL MACRO OVERLAY ........................................................................................................................................ 1379

MACRO - US Macro Data Divergence .......................................................................................................................................................... 1379
MACRO - US & Global Growth Will Slow Dramatically on a Per Capita Basis ............................................................................................ 1383
MACRO - Serious Structural US Problems Impeding Global Competitiveness ........................................................................................... 1384
MACRO - Output Gap .................................................................................................................................................................................... 1391
US INVESTMENT CYCLE ...................................................................................................................................................... 1400

GORD'S BIG PICTURE ECONOMIC CYCLE ..................................................................................................................................................... 1401
ECONOMIC INDICATORS .................................................................................................................................................................................. 1402
MONTHLY INDICATORS OF NOTE ............................................................................................................................................................. 1402
RESEARCH - The US Economy Continues to Tank under Obama ..................................................................................................... 1402
REFERENCE CHARTS ............................................................................................................................................................................. 1404
THE CURRENT BUSINESS CYCLE - SITUATIONAL ANALYSIS ..................................................................................................................... 1409
BUSINESS CYCLE - JOBS > CONFIDENCE > CONSUMPTION > GROWTH CYCLE.................................................................................... 1409
BUSINESS CYCLE - JOBS ................................................................................................................................................................................. 1411
SOME GRAPHIC HIGHLIGHTS .................................................................................................................................................................... 1411
CHARTS & TABLES OF NOTE ..................................................................................................................................................................... 1414
CHARTS - Corporate Profits versus Wages .............................................................................................................................................. 1414
CHARTS - Standard of Living Decline and Bear Market in Real Terms Reflect Labor Participation ....................................................... 1414
CHARTS - Underemployment Gap ............................................................................................................................................................ 1415
CHARTS - Participation Rate..................................................................................................................................................................... 1416
CHARTS - Part Time Employment ............................................................................................................................................................ 1416
CHARTS - U3 & U6.................................................................................................................................................................................... 1417
CHARTS - Employment Situation Summary ............................................................................................................................................. 1418
RESEARCH OF NOTE .................................................................................................................................................................................. 1422
RESEARCH - US Employment Trend Remains Chronic .......................................................................................................................... 1422
RESEARCH - Labor Force Participation Rates ......................................................................................................................................... 1424
RESEARCH - Bridging Jobs to Confidence & Sentiment.......................................................................................................................... 1427
RESEARCH - Participation Rate at 1979 Carter Levels ........................................................................................................................... 1430
SITUATIONAL SUMMARY & ANALYSIS ..................................................................................................................................................... 1431
BUSINESS CYCLE - CONSUMER & BUSINESS SENTIMENT ......................................................................................................................... 1435
A GRAPHIC HIGHLIGHT .............................................................................................................................................................................. 1435
CHARTS & TABLES ...................................................................................................................................................................................... 1436
CHARTS - NFIB Small Business Sentiment .............................................................................................................................................. 1436
CHARTS - Orange Book ............................................................................................................................................................................ 1436
RESEARCH OF NOTE .................................................................................................................................................................................. 1437
RESEARCH Small Business Confidence is a Major Problem in America ............................................................................................. 1437
RESEARCH Americas Crisis of Trust .................................................................................................................................................... 1438
SENTIMENT: Consumer, Investor & Trader ................................................................................................................................................ 1440
Consumer Confidence - Conference Board .............................................................................................................................................. 1440
Consumer Sentiment - Michigan ............................................................................................................................................................... 1444
Consumer Comfort ..................................................................................................................................................................................... 1445
Investors Intelligence ................................................................................................................................................................................. 1447
American Association of Independent Investors ....................................................................................................................................... 1447
National Association of Active Investment Managers (NAAIM) ................................................................................................................ 1448
Small Business Optimism .......................................................................................................................................................................... 1449
Percentage Stocks above 50 & 200 DMA ................................................................................................................................................. 1450
Margin Levels ............................................................................................................................................................................................. 1451
Mutual Fund Cash Levels v S&P 500 ........................................................................................................................................................ 1455
BUSINESS CYCLE CONSUMPTION ............................................................................................................................................................... 1461
RESEARCH WE FOLLOWED ....................................................................................................................................................................... 1462
CHARTS - Real Disposable Personal Income .......................................................................................................................................... 1466
CHARTS - Real Consumption Expenditure ............................................................................................................................................... 1468
CHARTS - Consumer Credit Deleveraging ............................................................................................................................................... 1469
CHARTS - Core Retail Growth .................................................................................................................................................................. 1470
RESEARCH OF NOTE .................................................................................................................................................................................. 1471
RESEARCH - Golden Era of the 1950s/60s Was an Anomaly, Not the Default Setting .......................................................................... 1471
RESEARCH - 95% of Consumer Credit Lending Going towards Student & Car Loans ................................................................... 1473
RESEARCH - Thanksgiving Retail Sales Results ..................................................................................................................................... 1475
RESEARCH - Gallup Survey Shows -10% Reduction in Christmas Buying Plans ........................................................................... 1478
RESEARCH - The Wal-Mart Measure or How the US Consumer Is the Global Engine .................................................................... 1479
RESEARCH - A Sequential Decline in Wages ....................................................................................................................................... 1480
RESEARCH - Final Sales Signals Pending Potential Recession on the Horizon ............................................................................. 1481
RESEARCH - Consumers Using Savings to Maintain Life Style ........................................................................................................ 1481
RESEARCH - The Destruction of America's Middle Class .................................................................................................................. 1484
RESEARCH - Dramatic Slowing in Restaurant Business .................................................................................................................... 1484
RESEARCH - Signs of Serious Troubles .................................................................................................................................................. 1485
RESEARCH - Falling Real Disposable Income means Falling Consumption ................................................................................... 1488
BUSINESS CYCLE - GROWTH .......................................................................................................................................................................... 1493
13

All Rights Reserved

CHARTS A US Recession Likely IF Liquidity is not increased and TAPER Sustained ......................................................................... 1496
CHARTS Barrons Sees 4% Growth The Ultimate Contrarian Indicator ............................................................................................. 1496
CHARTS Firms Revising Lower Q1 Growth on Weakening Retail Sales .............................................................................................. 1497
CHARTS Negative Economic Surprises Began in November ............................................................................................................... 1497
CHARTS What Americans Experience Daily and its Isnt Growth ......................................................................................................... 1498
CHARTS - Manufacturing .......................................................................................................................................................................... 1499
CHARTS - Exports ..................................................................................................................................................................................... 1499
CHARTS - Durable Goods ......................................................................................................................................................................... 1500
CHARTS - NFIB Small Business CAPEX .................................................................................................................................................. 1500
CHARTS - US Manufacturing Conditions Deteriorating ............................................................................................................................ 1501
RESEARCH OF NOTE .................................................................................................................................................................................. 1502
RESEARCH - US Q1 GDP ........................................................................................................................................................................ 1502
RESEARCH - US GDP Growth Forecasts ................................................................................................................................................ 1507
RESEARCH - Economic Recoveries Don't Look Like This! ................................................................................................................ 1507
RESEARCH - 2nd Worst Decade in Over 220 Years (And Getting Worse) ........................................................................................ 1508
RESEARCH - US Economy is being fundamentally transformed ............................................................................................................. 1510
RESEARCH - Shrinking CAPEX, Expanding Buybacks and Dividends ............................................................................................. 1513
REFERENCE - Prior Posts .......................................................................................................................................................................... 1517
RESEARCH - US Economic Recovery Has Peaked ............................................................................................................................. 1517
ECONOMIC CYCLE, INVESTMENT CYCLE, SECTOR ROTATION ................................................................................................................. 1525
US PUBLIC POLICY A GROWING LIST OF UNADDRESSED AND UNRESOLVED POLICY PROBLEMS........................ 1532
POLLS ........................................................................................................................................................................................................ 1532
INCARCERATION ..................................................................................................................................................................................... 1532
FLAWED TAX POLICY .............................................................................................................................................................................. 1532
MINIMUM WAGE ....................................................................................................................................................................................... 1533
SOCIAL CANCERS ................................................................................................................................................................................... 1533
CORRUPTION & MALFEASANTS ............................................................................................................................................................ 1533
INEQUALITY .............................................................................................................................................................................................. 1533
CREEPING SOCIALISM ............................................................................................................................................................................ 1533
POLICIAL PARALYSIS .............................................................................................................................................................................. 1533
STATE OF THE UNION ............................................................................................................................................................................. 1534
NSA-SECURITY-SURVEILLANCE COMPLEX......................................................................................................................................... 1535
OBAMACARE ............................................................................................................................................................................................ 1536
GENERAL PUBLIC POLICY...................................................................................................................................................................... 1538
CHARTS - US Incarceration Rate Out of Control ...................................................................................................................................... 1539
RESEARCH OF NOTE .................................................................................................................................................................................. 1541
POLICY - The Death Cross of American Business ............................................................................................................................... 1541
POLICY - The State of the Union I have a Dream! .......................................................................................................................... 1543
POLICY - A self-destructive path toward oblivion ................................................................................................................................ 1547
POLICY - Indictment of US Public, Fiscal & Monetary Policy ............................................................................................................... 1552
POLICY - The Crisis of Trust Continues to Worsen ............................................................................................................................. 1565
POLICY - The Stunning Truth about Inequality In America ................................................................................................................. 1566
POLICY - Pointing US towards Government Dependence .................................................................................................................. 1567
POLICY - Yet another Game of Deception ............................................................................................................................................. 1571
POLICY - Obamacare A Flawed Public Policy Implementation ........................................................................................................... 1574
POLICY - Financial Repression and Manipulated Illusions ....................................................................................................................... 1577
Manipulating Bad Financial Data ........................................................................................................................................................... 1577
Manipulating Bad Nuclear Facts ............................................................................................................................................................ 1578
Manipulating Oil Spill Info ....................................................................................................................................................................... 1579
Manipulating Data on Other Environmental Issues ............................................................................................................................... 1579
Manipulating Food Safety Data .............................................................................................................................................................. 1580
Manipulating Health Safety Data ........................................................................................................................................................... 1580
Manipulating Metrics for War ................................................................................................................................................................. 1580
The Core Problem .................................................................................................................................................................................. 1580
POLICY - US Economic Decline is Obvious to Anyone Caring to Look ............................................................................................ 1581
POLICY - Policy Uncertainty and Confidence in Monetary Policy Direction is exposed .................................................................... 1584
POLICY - "What is good for GM is good for America" is no longer correct...................................................................................... 1586
POLICY - Where is the Logic In US Public Policy ................................................................................................................................ 1587
POLICY - What is the Real Driving Force Behind the New Immigration Law? ................................................................................. 1590
POLICY - Crony Capitalism and How America Lost its Way! .............................................................................................................. 1593
MONETARY POLICY - TAPER IMPLEMENTATION & A 2ND HALF LIQUIDITY SQUEEZE ................................................................. 1601
BERNANKE YELLEN/FISHER TRANSITION ........................................................................................................................................ 1602
FED POST DECEMBER TAPER ........................................................................................................................................................... 1603
FED PRE-DECEMBER TAPER .............................................................................................................................................................. 1604
TAPER ....................................................................................................................................................................................................... 1607
TAPER - Fed December 2013 FOMC "TAPER" .................................................................................................................................. 1609
TAPER - The Last Time a Major Central Bank "Tapered" QE .......................................................................................................... 1610
14

All Rights Reserved
TAPER - FOMC QE Meeting ................................................................................................................................................................. 1612

TAPER - The Fed Cannot Possibly "Exit" Without The Market Crumbling .................................................................................... 1614
TAPER - It Matters and the Fed Has Few Options As Quality Collateral Disappears. .................................................................. 1616
TAPER - Look for QE to Morph Into Quantitative Education ........................................................................................................ 1618
TAPER - Why Fed Bond Buying Can't Go on Indefinitely and Why TAPER .................................................................................. 1622
TAPER - Political "Push-Back" by the Fed ........................................................................................................................................ 1623
TAPER - Ending QE Will Pressure Fiscal Policy............................................................................................................................... 1625
TAPER - Delay Risks Bond Market Volatility as Private Availability Steadily Shrinks ................................................................. 1629
TAPER - Clearly a Bluff or Muddled Policy ....................................................................................................................................... 1632
TAPER - Why is the Fed Talking TAPER? ......................................................................................................................................... 1634
TAPER - The Fed is Unlikely to Taper ................................................................................................................................................ 1637
TAPER - Fed Trapped in a Box ........................................................................................................................................................... 1639
TAPER - The Fed Taper Playbook ...................................................................................................................................................... 1641
TAPER - TAPER Put On Hold .............................................................................................................................................................. 1642
QUEEN YELLEN ........................................................................................................................................................................................... 1645
YELLEN - QEeen YELLEN TESTIMONY - Dampens Taper Bet ........................................................................................................ 1646
VOLKER RULE .............................................................................................................................................................................................. 1649
VOLKER - Dodd- Frank Never Had a Chance .......................................................................................................................................... 1650
CHARTS & TABLES OF NOTE ........................................................................................................................................................................... 1652
CHARTS: Dramatically Slowing US Foreign Flows ...................................................................................................................................... 1652
CHARTS: Money Velocity STILL a Major Deflationary Signal ...................................................................................................................... 1652
CHARTS: US Trade Balance Has Been Shrinking Since 2008 .................................................................................................................... 1653
CHARTS: Inflation Arrived with the Removal of a Gold Standard Discipline and Creditism ........................................................................ 1653
CHARTS: The Feds Asset Appreciation Strategy to Protect Collateral Values ........................................................................................... 1654
ASSET INFLATION TO PROTECT COLLATERAL VALUES ............................................................................................................................. 1654
CHARTS: Economic Growth Based Significantly on Credit Growth ........................................................................................................ 1656
CHARTS: Fed deliberately ignoring data on both growth and inflation ................................................................................................ 1658
CHARTS: US Economic Activity .................................................................................................................................................................... 1659
CHARTS: Effects of QE on S&P 500 ............................................................................................................................................................ 1660
CHARTS: Monetary Velocity versus Monetary Base .................................................................................................................................... 1661
CHARTS: Days Between 'Unsterilized' Actions ............................................................................................................................................ 1662
CHARTS: FOMC Economic Projections ....................................................................................................................................................... 1662
CHARTS: Taylor Rule & Evans Rule Estimates of Fed Funds Rates .......................................................................................................... 1663
CHARTS: Market Pricing In A Longer On-Hold Fed ..................................................................................................................................... 1663
CHARTS: Fed Balance Sheet Assets & Liabilities ........................................................................................................................................ 1664
CHARTS: Fed Policy Turns 180 Degrees ..................................................................................................................................................... 1664
CHARTS: US Banking Industry Concentration ............................................................................................................................................. 1665
CHARTS: Total Credit Market Debt as % GDP............................................................................................................................................. 1666
CHARTS: Debt-to-GDP Ratio Above What Caused Great Depression ........................................................................................................ 1667
CHARTS: Yield Chase Completely Distorted ................................................................................................................................................ 1667
CHARTS: Velocity of Money ......................................................................................................................................................................... 1670
CHARTS: Real Negative Rates ..................................................................................................................................................................... 1673
CHARTS: Short Interest Rates a Fed Problem ............................................................................................................................................. 1676
RESEARCH OF NOTE ........................................................................................................................................................................................ 1678
MONETARY - Why "Tapering" Is a Mirage and the Fed May Be Loosening Instead .................................................................................. 1678
MONETARY - Foreign Purchases Suggest Slowing Global Economies with less Easy Credit to Invest .................................................... 1680
MONETARY - Dollar, Currency & Gold Outlook ....................................................................................................................................... 1682
MONETARY - Federal Reserves False Media Reporting ........................................................................................................................ 1687
MONETARY - The Unintended Consequences of it all ............................................................................................................................ 1689
MONETARY - QE Proves to be the "Sham" We All Knew it was! ........................................................................................................... 1698
MONETARY - Owns 32.47% of all 10 Year equivalents and monetizing 70% of all net equivalent issuance.................................... 1700
MONETARY - The Policy Options Available to the Fed ........................................................................................................................... 1701
MONETARY - Capital Distortion & Global Acceptance of the Bernankean Theory ................................................................................ 1702
MONETARY - The Suspension of Price Discovery (Marriage of Financial Repression & Crony Capitalism) ................................... 1706
MONETARY - The Fed is stuck in a QE Trap ............................................................................................................................................ 1709
MONETARY - Mathematically, the Fed Can Only Fail .............................................................................................................................. 1712
MONETARY - QE versus S&P 500 Movements ......................................................................................................................................... 1717
MONETARY - QE is standing Between Inflated Equity Markets and A Recession............................................................................... 1719
MONETARY - Mounting Policy Failures .................................................................................................................................................... 1720
MONETARY - QE Doesn't Help the Economy ........................................................................................................................................... 1724
MONETARY - The US Reserve Currency and the steady erosion of trust ............................................................................................ 1726
MONETARY - The FAC is to the FED as the TBAC is to the TREASURY (Same Banks) ..................................................................... 1729
MONETARY - $2.3 Trillion of Leveraged Derivative Collateral ............................................................................................................... 1730
MONETARY - Leverage, Funding and Profit Pressures as Money Is No Longer Quite as Free ................................................................. 1735
MONETARY - The Fed's Double-Bind ........................................................................................................................................................ 1741
MONETARY - The Federal Reserve is at the very heart of our economic problems ............................................................................ 1742
MONETARY - FED Inflation & Deflator ......................................................................................................................................................... 1744
REFERENCE - Prior Posts .................................................................................................................................................................................. 1746
RESEARCH - Reduction at the Core of the Growth of the Federal Reserve Balance Sheet ............................................................... 1746
RESEARCH - Fed's Excess Reserves are 51% Foreign Banks, 49% Domestic ...................................................................................... 1749
RESEARCH - A Game of Calculated Deception is Evolving to Something Worse ............................................................................... 1751
RESEARCH - A Loan Distribution Credit Bubble ..................................................................................................................................... 1752
RESEARCH - QE to be replaced with Guidance, Thresholds and Promises ......................................................................................... 1753
RESEARCH - Bernanke in a Box and Talking Out of Both Sides of Your Mouth .................................................................................... 1755
15

All Rights Reserved
RESEARCH - Duration Extraction: The Hidden Fed Game ..................................................................................................................... 1756

RESEARCH - The Fed's Stated Guidance Sign-Posts ............................................................................................................................. 1758
RESEARCH - An Artificial Market............................................................................................................................................................... 1760
RESEARCH - Bank Reserves A Ticking Bomb, But Who Will Be Caught in the Blast?........................................................................ 1760
RESEARCH - QE An Intentionally Broken Mechanism Due to 2008 Policy Payable Interest on Bank Reserves ............................ 1764
RESEARCH - QE Ineffective In Increasing GDP ....................................................................................................................................... 1765
MONETARY: Helicopter Money of Central Bank Bond Purchases are Forever ...................................................................................... 1766
MONETARY: Central Bank Balance Sheet Expansion and the Theoretical Path to SPX of 1950 ............................................................ 1768
MONETARY: Central Bank Balance Sheet Expansion versus CPI ......................................................................................................... 1770
MONETARY: The Fed Model No Longer Prices Risk ................................................................................................................................ 1770
SITUATIONAL SUMMARY & ANALYSIS ............................................................................................................................................................ 1778
FISCAL POLICY A SHRINKING BUDGET DEFICIT IS NOT ALL GOOD NEWS ................................................................. 1782
RESEARCH WE FOLLOWED ............................................................................................................................................................................. 1782
FISCAL MATTERS ........................................................................................................................................................................................ 1783
CHARTS & TABLES OF NOTE ........................................................................................................................................................................... 1785
CHARTS - US Government Budget Surplus / Deficit .................................................................................................................................... 1786
CHARTS - Government Receipts & Outlay Growth Improves Significantly .................................................................................................. 1786
CHARTS - Federal Budget Surplus / Deficit .................................................................................................................................................. 1786
CHARTS - Real Federal Government Purchases ......................................................................................................................................... 1787
CHARTS - US Trade Balance Improvement ................................................................................................................................................. 1787
CHARTS - Growth & Jobs ............................................................................................................................................................................. 1788
CHARTS - Taxes & Spending ....................................................................................................................................................................... 1792
CHARTS - Politics & Policy ........................................................................................................................................................................... 1795
CHARTS - The Stakes ................................................................................................................................................................................... 1796
CHARTS - Official Fiscal Deficit & Debt ........................................................................................................................................................ 1798
CHARTS - Payroll Tax Holiday ...................................................................................................................................................................... 1799
CHARTS - Tax Rate Comparisons ............................................................................................................................................................. 1800
CHARTS - Risk Perceptions ....................................................................................................................................................................... 1801
CHARTS - 2013 Quarterly Impact ............................................................................................................................................................... 1802
CHARTS - Budget Deficit .............................................................................................................................................................................. 1803
CHARTS - Sovereign Debt ............................................................................................................................................................................ 1805
CHARTS - State & Local Government Drag ................................................................................................................................................. 1806
CHARTS - Government Dependence ........................................................................................................................................................... 1809
CHARTS - Coming Demographic Shock ....................................................................................................................................................... 1809
CHARTS - Fiscal Cliff Outcome .................................................................................................................................................................... 1813
BUDGET - What You Need to Know ................................................................................................................................................................... 1815
BUDGET - Political Budget Cowardice and Capitulation ........................................................................................................................ 1816
BUDGET - Political Budget Cowardice and Capitulation - 2 ................................................................................................................... 1818
BUDGET - The Ultimate in Political Can-Kicking! .................................................................................................................................... 1820
BUDGET - The Next Step in the Collapse Of The Dollar .......................................................................................................................... 1823
BUDGET - As Represented and Spun for the Public ............................................................................................................................... 1826
BUDGET - Implications ................................................................................................................................................................................ 1827
BUDGET - A Budget That Institutionalizes Big Government .................................................................................................................. 1830
BUDGET - The Secrets in The Budget ......................................................................................................................................................... 1834
RESEARCH OF NOTE ........................................................................................................................................................................................ 1837
RESEARCH - Budget Deficit Shrinking ......................................................................................................................................................... 1837
RESEARCH - Avoiding Taxes ..................................................................................................................................................................... 1839
RESEARCH - A Confluence Of Risky Economic Events ......................................................................................................................... 1840
RESEARCH - Everyone Hates Sequestration, But Few Can Agree On What to Cut ............................................................................ 1841
RESEARCH - $70T Off-Balance Sheet Federal Liabilities ....................................................................................................................... 1843
BUDGET SELLOUT ............................................................................................................................................................................................. 1846
BUDGET AGREEMENT ................................................................................................................................................................................ 1849
GOVERNMENT SHUTDOWN ....................................................................................................................................................................... 1850
SITUATIONAL SUMMARY & ANALYSIS ............................................................................................................................................................ 1851
KEY DRIVERS - CATALYSTS OF CHANGE.......................................................................................................................... 1852

EMPLOYMENT .................................................................................................................................................................................................... 1856
CHARTS & TABLES ...................................................................................................................................................................................... 1858
CHARTS Total Compensation Growth Lingering at 2.9 Percent ........................................................................................................... 1858
CHARTS The Startling Long Term Unemployed Statistics .................................................................................................................... 1858
CHARTS Finding Work That Pays Enough to Support a Family Is Nearly Impossible ......................................................................... 1860
CHARTS Labor Force Participation by Age ........................................................................................................................................... 1860
CHARTS - America Becoming a Country of Part Time Workers .............................................................................................................. 1861
CHARTS - Wages & Salary Accruals / GDP ............................................................................................................................................. 1862
CHARTS US Employment/Population Ratio Total in Labor Force ......................................................................................................... 1862
CHARTS US Industrial Production v Manufacturing Jobs...................................................................................................................... 1862
CHARTS - Part-Time Employment ............................................................................................................................................................ 1863
CHARTS - Nonfarm Payrolls Y-O-Y DECLINE ......................................................................................................................................... 1863
CHARTS - Hiring Stalled at 200K Per Month (Approximates ONLY the New People Entering Workforce)............................................ 1864
CHARTS - The Under-Employment Gap ................................................................................................................................................... 1864
CHARTS Staycations A Sign of the FEAR of Job Loss & Competition for Jobs ................................................................................... 1865
16

All Rights Reserved
RESEARCH OF NOTE .................................................................................................................................................................................. 1866

EMPLOYMENT - Working Age Americans without a Job Has Risen By 27 Million Since 2000 .............................................................. 1866
EMPLOYMENT - At the Core of the US Chronic Unemployment is a Lack of Private Investment.......................................................... 1869
EMPLOYMENT - With and Without Obama's Recovery Plan .............................................................................................................. 1870
EMPLOYMENT - Millennials Devastated As American Dream Becomes Nightmare for Most ........................................................ 1872
EMPLOYMENT - 30 Mind-blowing Statistics about Americans Under The Age Of 30 ..................................................................... 1874
EMPLOYMENT - Going Nowhere Even With All Jobs Becoming Temporary Jobs and the Participation Rate Plummeting ...... 1877
EMPLOYMENT - Low-Wage Jobs Bias Continues to Hamper U.S. Recovery......................................................................................... 1878
EMPLOYMENT - A REAL Family Wage versus Part Time & HES ....................................................................................................... 1879
EMPLOYMENT - It is as much About the Quality, as the Quantity of Jobs ....................................................................................... 1886
REFERENCE - Prior Posts ............................................................................................................................................................................ 1889
1- CAPITAL SPENDING ........................................................................................................................................................................... 1889
2- SMALL BUSINESS OPTIMISM ............................................................................................................................................................ 1892
3- DEMOGRAPHIC SHIFT ........................................................................................................................................................................ 1896
REAL DISPOSABLE INCOME ............................................................................................................................................................................ 1907
RESEARCH WE FOLLOWED ...................................................................................................................................................................... 1907
CHARTS & TABLES ..................................................................................................................................................................................... 1909
CHARTS Real Disposable Income is Now Contracting ......................................................................................................................... 1909
CHARTS This is a Structural .................................................................................................................................................................. 1909
CHARTS Growing Temp Wages Impacting Real Disposable Income in America .............................................................................. 1910
CHARTS Real Disposable Income per Capita ....................................................................................................................................... 1910
CHARTS - Household Incomes a Sign of a Collapsing Middle Class ................................................................................................ 1911
CHARTS - Food Stamps Now 14% of US Grocery Store Sales ............................................................................................................. 1911
RESEARCH OF NOTE .................................................................................................................................................................................. 1913
RESEARCH How Can a 70% Consumption Have a Recovery When Real DI/Capital Falls ................................................................. 1913
RESEARCH - The Facts are clear. The US Standard of Living is Falling ........................................................................................... 1914
RESEARCH - The Facts are clear. The US Standard of Living is falling .................................................................................................. 1915
RESEARCH - Standards of Living and Artificial Expectations ........................................................................................................... 1917
RESEARCH - A Lack of Demand in US Economy ................................................................................................................................ 1919
RESEARCH - Full Time Jobs or Food Stamps & Disability? .............................................................................................................. 1920
REFERENCE - Prior Posts ............................................................................................................................................................................ 1922
STANDARD OF LIVING - Salary Compression ...................................................................................................................................... 1922
DISPOSABLE INCOME - 66M (20%) Below $28.8/Year Subsistence Level........................................................................................ 1923
FOOD STAMPS - 46,405,204 Individuals, 22,257,647 Households below Poverty Line ................................................................... 1924
DISPOSABLE INCOME - Bad Even in Nominal Terms ......................................................................................................................... 1926
INFLATION - It's There but the Government Doesn't Account for it. .................................................................................................. 1926
US RESIDENTIAL REAL ESTATE ...................................................................................................................................................................... 1928
CHARTS & TABLES ...................................................................................................................................................................................... 1931
CHARTS - Serious Housing & Household Spending Headwinds ............................................................................................................. 1931
CHARTS - Double Top in Construction Index ........................................................................................................................................... 1931
CHARTS - The Real Cost of Buying a Home 6.7 X Average Salary .................................................................................................... 1931
CHARTS - Household Formations ............................................................................................................................................................. 1932
CHARTS Falling Originations ................................................................................................................................................................. 1932
CHARTS Falling Credit Scores ............................................................................................................................................................... 1933
CHARTS Falling Down payments ........................................................................................................................................................... 1934
CHARTS Household Formations & First Time Buyers Collapse............................................................................................................ 1934
CHARTS Classic Technical Analysis Chart Showing Housing in an Uncompleted Corrective Wave ................................................... 1935
CHARTS - Housing Starts ......................................................................................................................................................................... 1935
CHARTS - Composition of Housing Sales ................................................................................................................................................ 1936
CHARTS - New Home Sales ..................................................................................................................................................................... 1937
CHARTS - Existing Residential Supply ..................................................................................................................................................... 1937
CHARTS - Housing Starts ......................................................................................................................................................................... 1938
RESEARCH OF NOTE .................................................................................................................................................................................. 1939
RESEARCH - BlackRock's Fink Warns Housing More "Unsound" Now Than During Last Bubble ......................................................... 1939
RESEARCH - A Single Family Income Insufficient and In Many Cases Two Is Insufficient ..................................................................... 1940
RESEARCH - Insight: A new wave of U.S. mortgage trouble threatens ................................................................................................... 1942
RESEARCH - Household Formation Drives Residential Real Estate ................................................................................................. 1944
OVERVIEW ................................................................................................................................................................................................ 1947
CURRENT HOME OWNERSHIP TRENDS .............................................................................................................................................. 1952
$6.5 TRILLION IN MIDDLE CLASS NET WORTH EVAPORATES .......................................................................................................... 1955
NATIONAL STATISTICS: PRICE .............................................................................................................................................................. 1956
NATIONAL STATISTICS: EXISITNG HOME SALES ............................................................................................................................... 1958
NATIONAL STATISTICS: NEW HOME SALES ........................................................................................................................................ 1960
HOUSING: Even a Never Seen Before 30 Year Mortgage Rate can't Help Housing ......................................................................... 1961
HOUSING: Soaring FHA Delinquencies ................................................................................................................................................. 1962
US COMMERCIAL REAL ESTATE ..................................................................................................................................................................... 1967
RESEARCH OF NOTE .................................................................................................................................................................................. 1968
CRE Commercial Mortgage-Backed Securities: Hot ... But Very Dangerous ................................................................................ 1968
OVERVIEW ................................................................................................................................................................................................ 1976
NATIONAL STATISTICS: COMMERCIAL REAL ESTATE ....................................................................................................................... 1977
17

All Rights Reserved
FOCUS GROUPS .................................................................................................................................................................. 1983

US COMMERCIAL RETAIL REAL ESTATE ....................................................................................................................................................... 1983
RESEARCH OF NOTE .................................................................................................................................................................................. 1986
COMMERCIAL REAL ESTATE - Commercial Mortgage-Backed Securities: Hot ... But Very Dangerous ...................................... 1986
COMMERCIAL REAL ESTATE - The Dollar Tree Uptick in its earnings before following economic downturns ........................... 1993
COMMERCIAL REAL ESTATE - E-Commerce Industry Is About To Explode .................................................................................... 1995
COMMERCIAL REAL ESTATE - Retailers' Profits Miss By Most In 13 Years: "Consumer Is Not Back" ........................................ 1996
COMMERCIAL REAL ESTATE - Imploding Retail Floor Space Requirements .................................................................................. 1998
COMMERCIAL REAL ESTATE - Family Dollar to cut jobs, shut 370 stores as sales fall ................................................................. 2001
COMMERCIAL REAL ESTATE - The Death of a 71% Consumption Driven Economy ...................................................................... 2003
COMMERCIAL REAL ESTATE - Getting Worse Fast ............................................................................................................................ 2005
COMMERCIAL REAL ESTATE - Unfolding Implosion ........................................................................................................................... 2007
COMMERCIAL REAL ESTATE - Unfolding Implosion - II ..................................................................................................................... 2008
COMMERCIAL REAL ESTATE - Financial Crisis II Coming ................................................................................................................. 2013
COMMERCIAL REAL ESTATE - Indoor Mall Retail in Trouble ............................................................................................................. 2020
COMMERCIAL REAL ESTATE - Mortgage bonds reflect diverging fortunes of US malls ....................................................................... 2023
COMMERCIAL REAL ESTATE - Dead Mall Syndrome: The Self-Reinforcing Death Spiral of Retail ..................................................... 2025
COMMERCIAL REAL ESTATE - The First Domino to fall: Retail-CRE (Commercial Real Estate) ......................................................... 2027
COMMERCIAL REAL ESTATE - After Seven Lean Years: US Commercial Real Estate: The Present Position and Future Prospects 2032
COMMERCIAL REAL ESTATE - Retail Sales Cannibalization ................................................................................................................ 2039
COMMERCIAL REAL ESTATE - Tsunami of Retail Store Closings and Downsizings Coming ............................................................... 2040
COMMERCIAL REAL ESTATE - Thanksgiving Retail Sales Results ....................................................................................................... 2043
FINANCIAL STRESS Increasing Despite Increases in Net Worth ................................................................................................................... 2047
RESEARCH OF NOTE .................................................................................................................................................................................. 2047
FINANCIAL STRESS The Feds Financial Stress Index ........................................................................................................................ 2047
US CREDIT Cracks Showing in US Credit ....................................................................................................................................................... 2053
RESEARCH OF NOTE .................................................................................................................................................................................. 2053
CREDIT Problems Showing On Multiple Fronts ..................................................................................................................................... 2053
US RECESSION A Looming US Recession .................................................................................................................................................... 2057
RESEARCH OF NOTE .................................................................................................................................................................................. 2057
RECESSION - Sequential Decline in Wages ........................................................................................................................................... 2057
RECESSION - Final Sales Signals Pending Recession ....................................................................................................................... 2058
RECESSION - Consumers Using Savings to Maintain Life Style ....................................................................................................... 2058
RECESSION - 1987 Yields ....................................................................................................................................................................... 2062
RECESSION - Why a Looming Recession May Be Near ......................................................................................................................... 2063
RECESSION - Minimally in the Back Stretch of the Recovery ............................................................................................................ 2067
RECESSION - Reduced Household Income at the Core of the Growth of the Federal Reserve Balance Sheet .......................... 2073
RECESSION - Household Income and Signs of A Collapsing Middle Class ........................................................................................ 2075
RECESSION - More Cyclical Signs of a US Recession........................................................................................................................ 2075
RECESSION - A Lack of Demand ........................................................................................................................................................... 2076
RECESSION - Money Going to Cash But Equity Inflows Still Suggest Corrective Correlation ...................................................... 2078
RECESSION - More and More Signals Flashing ................................................................................................................................... 2081
RECESSION - Term Structures Suggest Signs of a US Recession Ahead ............................................................................................. 2083
THE MUNI MONSTER- A Failure of Public Policy to Respond to Structural Change ........................................................................................ 2085
PEURTO RICO .......................................................................................................................................................................................... 2085
US MUNI LAND ......................................................................................................................................................................................... 2085
DETROIT - Simply the Canary................................................................................................................................................................... 2086
DETROIT - By the Numbers ................................................................................................................................................................. 2088
DETROIT - The News Reporting ......................................................................................................................................................... 2089
DETROIT - A Structural Problem that Failed to be politically addressed ...................................................................................... 2091
RETIREMENT CRISIS Now Beginning to Take Hold....................................................................................................................................... 2092
RESEARCH OF NOTE .................................................................................................................................................................................. 2094
RETIREMENT - Underfunded and Unsustainable ................................................................................................................................ 2094
RETIREMENT - 35 Facts to Scare a Baby Boomer .................................................................................................................................. 2097
RETIREMENT - $205K Account Limits ..................................................................................................................................................... 2099
RETIREMENT - $3M Retirement Cap Unanswered ................................................................................................................................. 2101
RETIREMENT - What Does Heart Surgery Really Cost, And Why Is It 70 Times More Expensive In The US? ..................................... 2102
RETIREMENT - UPS Drops 15,000 Spouses From Health Plan, Blames Obamacare ........................................................................... 2104
CAPITAL & INTEREST RATES ........................................................................................................................................................................... 2106
SOCIAL CHANGE - What America Will Look like When The Next Great Economic Crisis Strikes........................................................... 2108
SPECIAL SUPPLEMENT....................................................................................................................................................... 2113

US RESERVE CURRENCY PRESSURES ......................................................................................................................................................... 2113
RESERVE CURRENCY Four Realistic Possibilities of Who the Belgium US Treasury Buyer Is ............................................................. 2113
RESERVE CURRENCY Who Is the New Secret Buyer of U.S. Debt? ..................................................................................................... 2116
RESERVE CURRENCY As Russia Dumps A Record Amount Of US Treasuries, Here Is What It Is Buying .......................................... 2119
RESERVE CURRENCY US FDI Shrinks ................................................................................................................................................... 2122
RESERVE CURRENCY Is the EU Rescuing the US Treasury Market? ................................................................................................... 2123
RESERVE CURRENCY Slowing Global Economies with less Easy Credit to Fund US FDI .................................................................... 2125
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GROWING GLOBAL ECONOMIC PRESSURES

Slowing Economic Growth Causing Increasing Problems

GLOBAL MACRO TIPPING POINTS - SEPTEMBER 2014

1 September 2014 Edition

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