Uncertainty and Apprehensive Uneasiness
Sentiment Takes on a Tone of Worry
Full Report: Download pdf
When we wrote our 19 page report "Uncertainty and Apprehensive Uneasiness" along with a supporting video (19 minutes and 35 slides), though our focus was on a deteriorating Macro picture against falling equity markets, we were very concerned about what the resolution of the Iran Nuclear negotiations would mean. We concluded it wasn't positive for reasons irrelevant of the negotiated terms of the deal.
Endless Indicators of Serious Problems & Recession in 2016
Over the past few quarters our monthly reports have been focused on the rapidly decaying fundamentals around the world. There is little doubt now of the degree of global slowdown we are experiencing, and the fact that these problems are washing ashore in the US. We are already reading mainstream writers talking about a potential US recession in 2016 which we reported was firmly in the cards back in Q3 2015.
Global FX Reserves
What we need to be focused on is that falling Global FX Reserves shows something quite startling. Reserves are not growing and in fact are shrinking! The same players who were the biggest builders of foreign reserves are now the ones falling the fastest.
Who? China and the major (non US) Energy Exporters.
Why? Maintain currency stabilization & PEGs as well as offset falling Current Accounts problems.
What Does It Mean?
- Many US$ PEGS are now in jeopardy,
- Expect increasing problems with Credit Ratings, Leverage Loans, CLOs and Distressed Debt,
- Another Banking Credit Crisis in the EU, as over leveraged banks are saddled with defaulting debt.
- Oil War ahead.
Oil Wars Ahead
Though falling oil prices were initially the result of Saudi Arabia trying to strangle Shale Oil funding as US supply came on-board, it was subsequently escalated with Russia sanctions being imposed by the US. When sanctions were lifted in January when nuclear negotiations were completed between the US and Iran, the conflict took on a new dimension. The energy sector is now looking down the "gun barrel" of an oil war between Iran and Saudi Arabia. This is even more serious than the oil and gas itself, since it pits Sunni's against Shiites.
To further compound the problems, it is also a war being fought by proxy in Syria over the future transport of oil and gas for the EU market. It potentially ignites a new cold war between the US and Russia
Read and listen to more in the attached video and written report.