"Kondratieff" Death Grip is Tightening!

Despite all the MSM hoopla to the contrary, the following articles do prove that ALL the world’s economies are still contracting under the onslaught of only the First of Three waves of the Super Tsunami “Kondratieff” Long-Waves that hit all the world in 2007/08.  

And in spite of ALL the world being slammed by ONLY the first of three waves of the "Kondratieff,'  no one out there has sounded the alarm, yet!  And in spite of the continued dangerous ebbing of ALL the world’s economies, the PEC (Professional Economist Class) just doesn’t get it, i.e. aggregate demand is FALLING due to a MAJOR shift in consumer psychology.

We cover these things on the pages of our website at www.polestarcomm.com and in much greater detail in our Polestar Market Review and Polestar Quarterly Updates.

Are you and your company ready for the continued unfolding of the economic horrors of the ‘New Normal’ over the next twenty to thirty years? 

Many of the things to be expected that you and your company should be planning for now, we do identify on our ‘New Normal’ web page, as follows:

The very tangible and inevitable effects of the devolving dynamics of this RE “Bubble Bursting” conundrum (until its eventual wash-out) will be the primary causation of a years long interlinked series of psychologically depressing events:
#1 continued suppression of interest rates causing a continued punishment of savers (forcing the gullible ones to the equity markets) until they are totally wiped out when the “Bond Bubble” finally bursts, after the "Great Deception of 2012" has finally run its course,
#2 successive QE's will artificially inject capital into the equity markets fostering totally unwarranted rallies (which will wipe out all the bears, who are actually right) and congruently pull in all the disenchanted bond holders who will then be totally wiped out when the equity markets crash just before the 'Bond Bubble' bursts,
#3 continued inflation of food and energy prices and a continued deflation of all Real Estate prices in 'absolute' terms for the next 12 to 24 months and then a continued decades-long deflation of "Bubble" priced RE in 'inflation adjusted' terms into the 2022 to 2027 time-frame,
#4 continued inflation in the cost of and pricing of all professional services precipitating a continued deflation of quantity and quality of those very services,
#5 continued inflation of all taxes to raise money from the strapped middle classes that will not be sufficient to fund the US Government's expenditures in a period of contracting incomes and GDP, congruent with horrifically expensive Wars and planned Wars. So that, there will then be an accelerated deflation of the quantity and quality of all Government services and a near severance of the US Government’s Social Safety Nets installed in the 30’s by a once caring and socially responsive National political class of Democrats,
#6 continued inflation in the number of Corporate and individual bankruptcies caused by the continued inflation in the absolute numbers of the newly unemployable, as more and more jobs are outsourced or taxed and regulated into oblivion,
#7 all of the above will insure the US Government’s continued bailing out of the financial institutions and banks, which will be financed by the accelerating abandonment of individuals as the ‘Safety Nets’ of States and the US Government are shredded,
#8 the net effect will be a resurgence of the ‘Misery Index’ of the 70’s and a continued surge in all inflation hedges – most especially Gold and Silver!

If you and your company are not ready, you had better GET READY, and don’t get fooled by the false and huge stock market rallies that are directly ahead of us, as the “Great Deception of 2012” is rolled out to deceive all the ‘Sheeple’ into buying vastly overpriced stocks over the next 18 to 24 months!

 

Central Banks Deliver 45-Minute Salvo as Growth Weakens

Bloomberg; By Simon Kennedy - Jul 5, 2012 11:15 AM ET

“…Global central banks went on the offensive against the faltering world economy, cutting interest rates and increasing bond buying as a round of international stimulus gathers pace.

In a 45-minute span, the European Central Bank and People’s Bank of China cut their benchmark borrowing costs, while the Bank of England raised the size of its asset-purchase program. Two weeks ago, the Federal Reserve expanded a program lengthening the maturity of bonds it holds and Chairman Ben S. Bernanke indicated more measures will be taken if needed.

Asked if there was any coordination with other central banks before today’s announcements, ECB President Mario Draghi said there “wasn’t any communication beyond the normal exchange of views.”

… “The actions had the look and feel of a coordinated global easing campaign,” said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. “The central banks are trying to arrest the synchronized slowdown in global economic growth that has taken shape.”

Almost five years since the financial crisis first forced them into action, policy makers are reacting anew as Europe’s debt crisis persists, U.S. hiring slows and emerging markets soften. The jury is out on whether the additional monetary medicine will work or if even more will be needed.

The steps by the U.K. and euro area pushed JPMorgan Chase & Co. (JPM)’s average interest rate for developed economies to a crisis- era low of 0.48 percent and will add to the balance sheets of major central banks, which have already swelled 40 percent since mid-2007.

“Some policy makers may be at the limits of their influence,” UBS AG (UBSN) economist Paul Donovan wrote in a research report today.

…. The world’s largest emerging market is acting more aggressively to spur growth that may have decelerated for a sixth quarter. Officials responded after two manufacturing indexes fell in June and ahead of a report on second-quarter gross domestic product, due on July 13.

“Policy makers have had an early look at the June data and didn’t like what they saw, suggesting the economy is weaker than they previously thought,” said Mark Williams, Asia economist at Capital Economics Ltd. in London.  … 

  Operation Twist

Today’s shifts come after the Fed expanded its Operation Twist program on June 20 to lower longer-term interest rates in financial markets. Data tomorrow is forecast to confirm the weakest quarter for U.S. employment in more than two years, evidence the world’s biggest economy has lost momentum.

The central banks of Australia, the Czech Republic, Kazakhstan, Vietnam and Israel also cut rates in June, while the Swiss National Bank is buying euros to defend its franc ceiling.

Bank of Japan officials meet next week to review their forecasts with Governor Masaaki Shirakawa today pledging to pursue appropriate policy as the bank promotes powerful easing.

…  It remains to be seen whether the additional measures can bolster growth. UBS’s Donovan said the crisis has damaged so- called monetary transmission mechanisms such as the ability of banks to pass on easier central bank policy.

The ECB cut will have little impact on its economy and officials may have to consider quantitative easing if growth fails to improve in the second half of the year, said Julian Callow, chief international economist at Barclays Plc. (BARC)

… As for the Bank of England, Tom Vosa, director of economic research at National Australia Bank, said the U.K. economy is so stressed that 90 percent of the money the central bank is injecting could end up in risk-free assets or reserves..."

No  Folks!  90% of the new money from all of these Central Banks will end up in the world’s stock and commodity markets – pure and simple, as we did cover many times in these Blogs!

 

Payrolls in U.S. Rose 80,000 in June; Jobless Rate 8.2%

Bloomberg: By Alex Kowalski - Jul 6, 2012 1:47 PM ET

Payrolls Rise 80,000 in June as Jobless Rate Holds

American employers added fewer workers to payrolls than forecast in June and the jobless rate stayed at 8.2 percent as the economic outlook dimmed.

The 80,000 gain in employment followed a 77,000 increase in May, Labor Department figures showed today in Washington. Economists projected a 100,000 rise, according to the median estimate in a Bloomberg News survey. Growth in private payrolls was the weakest in 10 months.

Stocks fell on concern hiring has shifted into a lower gear, restricting consumer spending and leaving the economy more vulnerable to a global slowdown. The figures underscore concern among some Federal Reserve policy makers that growth isn’t fast enough to lower unemployment stuck above 8 percent since February 2009.

“The job market is soft,” said David Resler, chief economic adviser at Nomura Securities International Inc., who correctly forecast the payrolls gain. “I’d characterize our reaction as much the same way the Fed will react -- not surprised but disappointed. It’s just not the kind of growth we need to see at this stage in the business cycle.”

Service Industries in U.S. Grew Less Than Forecast in June

Bloombegr; By Shobhana Chandra - 2012-07-05T14:55:57Z

“… Service industries in the U.S. expanded in June at the slowest pace since January 2010, a sign the biggest part of the economy is struggling to gain momentum.

July 5 (Bloomberg) -- Timothy Bitsberger, a managing director at BNP Paribas and a former assistant secretary for financial markets at the U.S. Treasury, talks about the U.S. economy and Federal Reserve monetary policy. Bitsberger, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses the European Central Bank's rate-cut decision today and the region's debt crisis. (Source: Bloomberg)

Companies from Family Dollar Stores Inc. (FDO) to FedEx Corp. (FDX) are seeing waning demand, underscoring concern about Europe’s debt crisis, cooling global markets and an absence of U.S. fiscal policy clarity that’s also hurting manufacturing. Limited hiring and income growth indicate households will be reluctant to step up purchases, which account for about 70 percent of the economy.

“Business activity in the services, construction and government sectors of the economy decelerated in June but is still growing at a modest pace,” Steven Wood, principal economist at Insight Economics LLC in Danville, California, said in an e-mail to clients. “A cyclical economic expansion is currently in place but it has softened in the past three months.”

Economists’ estimates in the Bloomberg survey ranged from 51.5 to 54.2. Before the latest numbers, the index averaged 53.4 since the recession ended in June 2009.

Stocks fell, snapping a three-day advance for the Standard & Poor’s 500 Index, as optimism with jobless claims data fizzled on concern over the outlook for global growth. The S&P 500 dropped 0.4 percent to 1,369.08 at 10:54 a.m. in New York.

June ISM manufacturing gauge turns below 50%

WSJ; By Steve Goldstein;July 2, 2012, 10:03 a.m. EDT

WASHINGTON (MarketWatch) -- Manufacturing activity in the U.S. dropped in June into contraction territory for the first time since July 2009, the Institute for Supply Management said Monday. The ISM dropped to 49.7% from 53.5% in May, against a MarketWatch-compiled economist poll of 52.3%. The new-orders index dropped 12.3 percentage points in June, registering 47.8% and indicating contraction in new orders for the first time since April 2009.

 

Berkshire’s Pederson Says U.S. Businesses Scaling Back

Bloomberg; By Noah Buhayar - Jul 2, 2012 10:51 AM ET

Berkshire Hathaway Inc. (BRK/A)’s furniture- rental unit saw a slowing in demand from business clients in the second quarter, indicating that firms are curbing spending on projects amid less optimism about the U.S. economy.

Demand is “simmering compared to where it was at the beginning of the year, when it looked like the recovery, at least from our perspective, would have been pretty robust,” said Jeff Pederson, the new chief executive officer of Berkshire’s CORT Business Services Corp., the world’s largest provider of rental furniture. “It’s not flat-lining, by any stretch of the imagination, but it has slowed down.”

Warren Buffett, who built Omaha, Nebraska-based Berkshire into a company valued at more than $200 billion selling products from ice cream to insurance, uses results at the firm’s more than 70 operating units to gauge the health of the economy. He highlighted CORT’s rebound in a February letter to shareholders as an example of how businesses not tied to housing have recovered since the recession that ended in 2009.