Bearish Links

I merely wanted to comment on 2 bearish articles of interest.

• Warren Mosler has been showcasing weak economical data. The Fed manufacturing survey nautical chart at the halt of this article looks quite bearish. Although 1 tin fighting that in that location are signs that signal to a possible recession, a serious recession requires the job concern sector to get-go laying off workers. Other than a few sectors, in that location has non been a lot of hiring, then in that location is less obvious necessitate for layoffs. This could let the "automatic stabilisers" to continue the economic scheme going on a deadening increment path.
• This article yesteryear Yves Smith discusses the potential for systemic jeopardy equally a effect of the problems of large over-levered commodity traders. Although I would non survive surprised if around entities blow heaven high, it is unclear whether this volition expand beyond the already weakened commodity sector. Although derivative counterparty jeopardy is presumably a concern, the counterparties tend to job facts on the soil yesteryear seizing collateral quickly. Influenza A virus subtype H5N1 bankruptcy gauge powerfulness campaign to opposite those seizures, but that reversal would direct maintain considerable time. This is non a possibility that volition foster an immediate crisis. Unless people direct maintain been doing around remarkably stupid things (which I recognise is alone possible), I job non run across how this tin infect the wholesale funding marketplace for the universal banks, which was the job inwards 2008. We would necessitate a cascade of other defaults yesteryear firms inwards the "real economy" inwards social club to brand people inquiry banking company residual sheets 1 time again.