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Rpt GMTP 2012 09 Ss Peek

Rpt GMTP 2012 09 Ss Peek

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Published by: lcmgroupe on Aug 21, 2012
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1
 September 2012 EditionRestricted & Confidential
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
STALL SPEED
Any Geo-Political, Economic or Financial Event Could Trigger a Market Clearing Fall 
GLOBAL MACRO TIPPING POINTS - SEPTEMBER 2012
8/20/2012
 
 
2
 
September 2012
EditionRestricted & Confidential
 
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
STALL SPEED
 
Any Geo-Political, Economic or Financial Event Could Trigger a Market Clearing Fall
GLOBAL MACRO TIPPING POINTS - SEPTEMBER 2012
TIPPING POINTS
 ........................................................................................................................................................................................ 7
 
GLOBAL
 
MACRO:
 
RISK
 
 ASSESSMENT
...................................................................................................................................................... 7
 
SITUATIONAL ANALYSIS ...................................................................................................................................................... 7 
 
WE ARE HERE 
................................................................................................................................................................................................................. 7 
 
TROUBLING MID-YEAR 2012 DEVELOPMENTS 
....................................................................................................................................................... 8
 
MACRO MONITORING INSTITUTIONS ............................................................................................................................... 14 
 
WEF (WORLD ECONOMIC FORUM)
.......................................................................................................................................................................... 14
 
IMF (INTERNATIONAL MONETARY FUND)
.............................................................................................................................................................. 21
 
OECD (ORGANIZATION FOR ECONOMIC COOPERATION & DEVELOPMENT)
.............................................................................................. 36
 
GLOBAL RISK ...................................................................................................................................................................... 38 
 
SCANNING THE GLOBE 
............................................................................................................................................................................................... 38
 
NIELSEN: CONSUMER SENTIMENT 
......................................................................................................................................................................... 41
 
RISK: GERMANY, GREECE PLAYING ACCELERATING FINANCIAL WAR GAME 
............................................................................................ 48
 
RISK: MARKET FRUGALITY & CREDIT MARKET RISK INDICATORS 
................................................................................................................ 50
 
RISK: GROWING CHINA CONCERNS IN 15 BULLETS 
........................................................................................................................................... 52
 
RISK: CRISIS MONITOR: GREECE 
............................................................................................................................................................................ 58
 
RISK: CRISIS MONITOR: SPAIN 
................................................................................................................................................................................. 61
 
GLOBAL
 
MACRO:
 
RISK
 
LEVELS
................................................................................................................................................................ 64
 
AGGREGATED GLOBAL FINANCIAL RISK INDEX .............................................................................................................. 64 
 
BANKING RISK - LIBOR-OIS SPREAD (Updated)
.................................................................................................................................................... 65
 
BANKING RISK - TED SPREAD (Updated)
................................................................................................................................................................ 65
 
CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS (Updated)
.......................................................................................................................... 66
 
CREDIT RISK - EU CREDIT DEFAULT SWAPS (Updated)
..................................................................................................................................... 67 
 
CONSUMER RISK - HOUSING - RATE OF CHANGE (Reference)
........................................................................................................................ 68
 
ECONOMIC RISK - ECRI LEADING INDEX (Updated)
............................................................................................................................................. 69
 
INFLATION RISK - MONEY SUPPLY GROWTH - M3 (Updated)
............................................................................................................................ 70
 
INFLATION RISK - MONEY VELOCITY (Updated)
.................................................................................................................................................... 71
 
MONETARY RISK - BANK LIABILITIES (Updated)
................................................................................................................................................... 71
 
COST OF MONEY RISK - INTEREST RATES (Updated)
........................................................................................................................................ 73
 
AGGREGATED RISK LEVEL ................................................................................................................................................ 74 
 
TIPPING
 
POINTS:
 
CHANGES
...................................................................................................................................................................... 75
 
TIPPING POINT MAPPING: 2012 UPDATE .......................................................................................................................... 75 
 
SHIFTS TO WATCH IN 2012 ................................................................................................................................................ 78 
 
TIPPING
 
POINTS:
 
FOCUS
 
-
 
JULY 
 
2012 
..................................................................................................................................................... 85
 
I - EU BANKING CRISIS ....................................................................................................................................................... 85 
 
II - SOVEREIGN DEBT ......................................................................................................................................................... 86 
 
III - RISK REVERSAL ............................................................................................................................................................ 87 
 
IV - CHINA HARD LANDING ................................................................................................................................................. 88 
 
V - JAPAN DEBT DEFLATION .............................................................................................................................................. 89 
 
VI - BOND BUBBLE .............................................................................................................................................................. 91
 
DRIVER$:
 
RISK-ON 
 
 
RISK-OFF 
 
ANALYTICS 
........................................................................................................................................... 92
 
1- G10 MACRO SURPRISE INDEX ...................................................................................................................................... 94 
 
2- CUMULATIVE GLOBAL PMI ............................................................................................................................................. 96 
 
3- FINANCIAL TIGHTENING INDEX ..................................................................................................................................... 98 
 
4- US NON-REVOLVING CONSUMER CREDIT ................................................................................................................. 100 
 
5- IBES' RELATIVE GLOBAL PE RATIOS .......................................................................................................................... 101
 
6- FSB 30 Index of Systemic Risk Names ........................................................................................................................... 103 
 
7- Swift Payment & Economic Activity ................................................................................................................................. 105 
 
 
 
3
 
September 2012
EditionRestricted & Confidential
 
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
GLOBAL MACRO
.................................................................................................................................................................................... 107
 
GLOBAL
 
ECONOMIC
 
OUTLOOK
.............................................................................................................................................................. 109
 
IMF WARNS: Japanese & Spanish Debt Unsustainable ...................................................................................................... 109 
 
IMF WARNS: Global Recovery Faltering, Reduces Global Growth to Just Above 3% Global Recession Level .................... 111
 
BIS WARNS: Monetary Policy At Its Limits .......................................................................................................................... 113 
 
GLOBAL GROWTH - Europe Continues to Force Global Growth Estimate Reductions ....................................................... 114 
 
GDP Reductions - By Region 
...................................................................................................................................................................................... 115
 
Manufacturing PMI - By Country 
................................................................................................................................................................................ 121
 
GLOBAL SENTIMENT - Europe has a Growing Sentiment /Confidence Problem ................................................................ 124 
 
GLOBAL CREDIT MARKETS - Stable but Tenuous ............................................................................................................ 131
 
GLOBAL INFLATION - Where Do these Deflators Come From? ......................................................................................... 133 
 
GLOBAL TRENDS - Commodities and Brands Tell the Global Story ................................................................................... 134 
 
Cooper - Rio Tinto 
......................................................................................................................................................................................................... 134
 
Aluminum - Alcoa, Rio Tinto 
........................................................................................................................................................................................ 136
 
Iron Ore and Thermal Coal - Rio Tinto 
....................................................................................................................................................................... 138
 
Consumable Brands - P&G 
.......................................................................................................................................................................................... 140
 
Parcel Volumes - FEDEX 
............................................................................................................................................................................................. 141
 
Shipping - Baltic Dry Index 
........................................................................................................................................................................................... 142
 
EUROPE
 
-
 
LACED IN 
NTENSIVE 
ARE 
....................................................................................................................................................... 146
 
MEDICAL CHARTS 
Situation Critical ............................................................................................................................... 146 
 
EUROSIS 
A Terminal Disease ........................................................................................................................................ 151
 
PROGNOSIS: Why the European Situation Will Get Worse 
................................................................................................................................... 151
 
PROGNOSIS: Increasing Structural Imbalances 
...................................................................................................................................................... 154
 
PROGNOSIS: Monetary Malpractice - ECB's LTRO Not a Solution but 
................................................................................................................ 156
 
PROGNOSIS: Monetary Malpractice - ECB's SMP Effort Futile 
............................................................................................................................. 159
 
PROGNOSIS: Monetary Malpractice - ECB Accepts BBB Collateral 
..................................................................................................................... 161
 
PROGNOSIS: EU Banking Overbanked, Undercapitalized and Now Insolvent 
.................................................................................................... 162
 
SUMMITS - "19th Nervous Breakdown" .............................................................................................................................. 163 
 
FRANCE - Has Turned back to Socialism ........................................................................................................................... 170 
 
ITALY - Cracks Impossible to Hide and Contain .................................................................................................................. 172 
 
IBERIAN PENINSULA - Spain & Portugal Imploding ........................................................................................................... 174 
 
SPAIN A LTRO JUNKIE: Monetary Malpractice - Banks on Artificial "Ponzi Bond" Life Support 
....................................................................... 183
 
MONETARY MALPRACTICE - How Long Will Germany & the Bundesbank Accept TARGET2 "Contingent Liability"? ....... 190 
 
CURRENT STATE OF EU BAIL-OUTS ............................................................................................................................... 196 
 
 ASIA
 
-
 
UROPEAN 
ALLOUT 
OW 
A
CUTE 
..................................................................................................................................................... 198
 
CHINA ................................................................................................................................................................................. 202 
 
Société General Sees a Likely Soft Landing! 
............................................................................................................................................................ 202
 
SLIDES BELOW 
............................................................................................................................................................................................................ 202
 
CHINA PMI: 48.2. Fourth Straight Month of JOB Contraction 
................................................................................................................................. 210
 
CHINA: 
Manipulated Statistics due to Upcoming Decade Long Regime Change 
................................................................................................ 212
 
JAPAN: Manufacturing Output Falls .................................................................................................................................... 213 
 
EU Just a Warm-up for the Main Event! 
................................................................................................................................................................. 213
 
EMERGING
 
MARKETS
 
-
 
CONOMIC 
NGINE 
TALLING 
............................................................................................................................ 216
 
GLOBAL SLOWING: A Quickly Worsening Situation 
......................................................................................................................................... 216
 
RISKS: All on the downside for Asia 
...................................................................................................................................................................... 218
 
GLOBAL IMBALANCES: Demographic Headwinds 
............................................................................................................................................ 220
 
FLIGHT TO SAFETY: Becoming Pronounced 
....................................................................................................................................................... 221
 
INDIA: Watch Out For RE-Emergence of Food Price Inflation 
.......................................................................................................................... 223
 

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