The Russian invasion of Ukraine is (and will be) dominating the news cycle. Unfortunately for the pResident and the media, they have no control over this situation and cannot replace it with a different “crisis”. An example of the endless bait and switch last week was the news regarding the nation’s GDP: it was revised downward from 3.2% to 2.4%. While a 25% reduction would normally signal a weak and/or declining economy, the news was greeted by a rally on Wall Street with expectations of the Fed printing more money. JP Morgan announced that they will be “firing thousands”. China’s currency is collapsing as the world’s recession is erasing demand.
1.US GDP cut to 2.4% as growth slows
The US economy grew at a slower pace in the last quarter of 2013 than initially estimated, extending a string of weak data that could raise pressure on the Federal Reserve to reconsider its “tapering” of bond purchases.
Fourth-quarter gross domestic product was revised to annualised rate of 2.4 per cent, down sharply from the previous 3.2 per cent estimate which was made when the Fed started slowing its quantitative easing programme.
The revision was roughly in line with economists’ expectations and mainly caused by lower consumer spending growth, from 3.3 per cent to 2.6 per cent, evidence that Americans were not quite as confident about making purchases during the holiday season as previously thought.
2.JP Morgan To Fire Thousands
Following last year’s realization that mortgage origination as a product line is effectively dead (which has forced such origination dependent banks as Wells Fargo to return to subprime lending in hopes of keeping the revenue stream alive, knowing full well how it all ends), and that only investors and “all cash” buyers are keeping the myth of the housing recovery alive on their shoulders, banks fired tens of thousands of workers in the mortgage business hoping to stem the bottom line bleeding from the collapse in revenues. It turns out that they didn’t fire enough and/or that the housing market contraction was far worse than even the banks, in their most, pessimistic forecasts, had expected. Case in point: JPMorgan, which after firing 15,000 in its mortgage business, has just revealed it will fire thousands more.
3.China Currency Plunges Most In Over 5 Years, Biggest Weekly Loss Ever: Yuan Carry Traders Crushed
And just like that the Chinese yuan devaluation has shifted away from the merely “orderly.”
In the past few hours of trading, China, which as we reported two days ago has started intervening aggressively in the Yuan market (for the reasons why, read this), has seen its currency crash by nearly 0.9%, which may not seem like much, but is in fact the largest drop since December of 2008, and at last check was trading at around 6.18, even as the PBOC fixed the CNY reference rate 0.02% higher from the last official close to 6.1214, erasing pivot support point at 6.1346 and 6.1408. Naturally this means that the obverse, the CNYUSD, has crashed to as low as 0.1620. Should this move sustain without reverting, this will be the biggest weekly loss ever!
