Brazil’s worst-ever recession unexpectedly deepens in late 2016

Before the Olympics

Brazil has been having a tough go over the last few years. A country that was once riding high and peering just barely into the 1st World neighborhood has now stumbled back behind the southern fence. The years and years of corruption under leftist governments (recently) have taken their toll as has the general slowdown in China which is a vital trading partner.

(From Reuters)

The downturn has left nearly 13 million people unemployed,

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Doug Casey: The Greater Depression is going to be worse than even I thought it would be.

The Crash of 2008 didn’t just go away (as too many of us know). It still hangs over the globe. But things have changed. We now have more debt on the books and an even more emboldened political class.

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Ground Zero of China’s Slowdown Leaves Locals Looking for Exit

Refugees from Syria aren’t the only refugees the West is seeing. A different type of refugee, from China, has landed on the golden shores of the US and Canada. People with money from the great China boom are seeking a landing place for their families and their wealth. This has long been the story in Vancouver for example.

But these people are the lucky few. Most Chinese will never get on a plane and traverse the Pacific. Most will stay in China through the economic “slowdown”

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Brexit crushes the big banks, other stocks

Image: Screengrab from CNBC video

This is called “an excuse.” People wanted to sell, they saw a big fat excuse to sell in Brexit, and so they have. (Some were just sure that Brexit wouldn’t happen and were simply forced to sell.) Smart people are also prudently looking to buy. But one way or another life will go on and the world will adjust. The big banks just got socked and that is a good thing.

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David Stockman: Fed to Push Economy Into Recession

Stockman is deeply critical of the Fed’s grand experiment and he is right, it will end in ugliness. Probably an historic ugliness. When? No one can say, we are operating in sort of an economic hall of mirrors right now. (And have been for a long time.) Things are distorted all over the place. However, even in a hall of mirrors gravity continues to work. Like gravity, the market mechanism also continues to work no matter what the current economic reflection.

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“It’s Probably Nothing”: Truck Orders Plunge 37% As Unsold Inventories Soar Most Since 2007

Trucks move goods. Goods and services make an economy. Trucks run on petroleum. Petroleum prices are down solidly. Yet trucking appears to be hurting.  What’s going on?

And by the way, may God bless all the long (and short) haul truckers.

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Societe Generale Economist: Recession ahead, “a tidal wave of corporate default”

We’ll see. The market is down today but has been solidly up for a few weeks (after a dismal start to the year). But the underlying economic reality hasn’t changed. The deep fundamentals are not good and they haven’t been good for a long time.

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U.S. Has Record 10th Straight Year Without 3% Growth in GDP

This is decline folks. Though it is by no means irreversible. This country has long suffered under presidents and congresses which were more interested in perpetuating a Washington centered agenda than in creating a climate for real prosperity. A little regulation here. An extra tax there. A sweetheart deal here. A war in some Middle Eastern corner we have no business in there. Each year the economy is eroded. Each year our debt increases. Each year the quality of leadership appears to decline.

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Where Negative Interest Rates Will Lead Us

Let the old dead wood in the economy burn off. Renewal is not long in coming. But central banks would rather further distort the economy in an effort to avoid the inevitable. (In so doing the eventual economic fire burns much hotter than it would have otherwise.)

The central bankers fundamentally have little or no faith in the market mechanism. Let markets clear and then growth will appear, similar to a burned down forest. Burn off the dead economic wood.

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