Thursday, March 10, 2016

Mike Whitney — A Warning From the B.I.S.: the Calm Before the Storm?

But the real problem with the BIS report is not that it refuses to assign blame for the current condition of the markets and the economy, but that it deliberately misleads its readers about the facts. While it’s true that China is facing slower growth, oil prices are plunging, emerging markets have been battered by capital flight, and yields on junk bonds are relentlessly rising, it’s also true that central bank policy is not primarily designed to address these problems, but to ensure the continued profitability of its main constituents, the big banks and mega-corporations. Keep in mind, the global economy has been sputtering for the last 6 years, but the BIS has only expressed alarm just recently. Why? What’s changed?
What’s changed is profits are down, and when profits are down, Wall Street and its corporate allies lean on the central banks to work the levers to improve conditions.…
Get it? When the profitability of the world’s biggest corporations are at stake, the central banks will move heaven and earth to lend a hand.…
A Warning From the B.I.S.: the Calm Before the Storm?
Mike Whitney

1 comment:

Dan Lynch said...

As Whitney's chart shows, households have been deleveraging while businesses have gone deeper into debt. The stock buy-back game sounds like a ponzi scheme.

We've had crashes led by business debt before.