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Futures extended their sharp losses Thursday after a gloomy forecast on global growth, continuing worries about the European debt crisis and following news that jobless claims rose more than expected last week.
U.S. stock futures slumped on Thursday, as fears over global growth prospects and Europe’s ongoing sovereign-debt woes weighed on equity markets around the world.
Stock-index futures furthered their fall after economic data had new U.S. claims for jobless benefits rising more than expected last week, and consumer prices up 0.5% in July.
Societe Generale's famously bearish analyst, in contrast to most, did not see 10-year Treasury yields rising above 3 percent just because the Fed was going to stop buying bonds. Instead, he predicted they would fall below 2 percent.
So far, Edwards — who predicted the Asian financial crisis of 1997-98, the U.S. housing implosion and who sees China's economy suffering a hard landing — has been closer than most on his debt call. Last week, yields tested their record low of 2.04 percent.
Edwards says the economy is in an Ice Age — his term for a period of low inflation and near deflation and in which the economy has seen a broad deleveraging from the stock boom of the 1990s.
"That was the great moderation — the great moderation was a lie and a Ponzi scheme built on these massive debt mountains. And now those are finished you go back to normal, or worse than normal because you're so vulnerable," he said.
Bond Yields to Soar, Equities to Plunge
What will end the bond rally is hard to pinpoint. Most likely, he said, it will start in Japan.
"I think Japan will be the first to crack, really crack," he said. "Its demographics mean that big pension funds can no longer fund its huge deficit out of internal savings."
"You will get repeated rounds of money printing to try and stop it, but ultimately gravity has a habit of pulling markets down to where they should be.
You can delay it, you can play around, but ultimately the pigeons come home to roost."
Bank of America down -7.51%
Citigroup down -8.10%
JP Morgan Chase down - 3.83%
Morgan Stanley down - 6.41%
Wells Fargo down - 4.02%
GoldmanSachs down - 3.52%
The increase is due to rising prices in a number of areas, said the report, including financial services and clothing and footwear.
Prices for furniture, household equipment and maintenance, which usually fall between June and July due to the sales season, also fell by less this year (-1.1%) than a year ago (-1.9). The most notable upward effects came from most types of furniture and furnishings, and household textiles, said the ONS.
The only large downward pressure to the change in CPI inflation during the period came from food and non-alcoholic beverages, where prices rose by 0.3% overall, compared with a rise of 1% a year ago.
In the year to July, Retail Price Index annual inflation was 5%, unchanged from June.
The Philadelphia Federal Reserve reported that manufacturing activity for the region has weakened markedly. The bank said its business condition index plunged to a negative 30.7 in August from 3.2 in July, reaching its lowest level since March 2009.
Dow Jones reports that trading on Russia’s Micex has been halted for technical reasons
Russia’s RTS index, which has been the strongest in Europe this year, up 10.8%, was only down 2.25% at last check today. So maybe this is a real technical issue, rather than a “let’s take a breather to preserve our melting faces” halt.
The Philly Fed’s business outlook survey fell to negative 30.7 in August from 3.2 in July. This is the lowest reading since March 2009.
Readings below zero indicate contraction in the region’s factories
The size of the decline in the index stunned analysts — economists had expected a reading of 0.5 in August, according to a survey conducted by MarketWatch — and added fuel to Thursday’s rout in the stock market.
FRANKFURT (MarketWatch) -- A Swedish regulatory official said the nation's banks must do more to prepare for a debt crisis that could freeze interbank lending markets and cut off funding, Bloomberg reported Thursday. "It won't take much for the interbank market to collapse," said Lars Frisell, chief economist at Sweden's financial regulator, the report said. "It's not that serious at the moment but it feels like it could very easily become that way and everything will freeze," he said.