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 December 2013 Edition Restricted & Confidential
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
POLITICAL PARALYSIS & FAILURE
A Global Governance Failure
GLOBAL MACRO - Regional Update
GLOBAL MACRO TIPPING POINTS - DECEMBER 2013
11/26/2013
 
 
2
 
December 2013
 Edition Restricted & Confidential
 
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
POLITICAL PARALYSIS & FAILURE
 
A Global Governance Failure.
GLOBAL MACRO TIPPING POINTS - DECEMBER 2013
TIPPING POINTS
 ...................................................................................................................... 17
 
GLOBAL
 
MACRO:
 
RISK
 
 ASSESSMENT
 .................................................................................................................................................... 17
 
SITUATIONAL ANALYSIS .................................................................................................................................................... 17 
 
POSITIONAL FRAMEWORK: "WE ARE HERE!" 
 ....................................................................................................................................................... 17 
 
Mapping the Collapse of European Democracy 
 ....................................................................................................................................................... 23
 
GLOBAL TRENDS
 –
 THE SIX FRAMING MEGATRENDS
 ....................................................................................................................................... 24
 
GLOBAL THEMES
 –
 TEN STRUCTURALTHEMES FOR STRATEGY 
 ................................................................................................................... 26
 
DEBT SATURATION - A COLLAPSING PONZI SCHEME 
 ...................................................................................................................................... 28
 
THE RISK CONTINUUM 
 ................................................................................................................................................................................................ 30
 
FALL 2013
 –
 
“EVENT RISK” DOMINATES
 ................................................................................................................................................................. 32
 
MACRO MONITORING INSTITUTIONS ............................................................................................................................... 39
 
IMF, WORLD ECONOMIC OUTLOOK - JULY 2013
 .................................................................................................................................................. 39
 
IMF, FINANCIAL STABILITY REPORT - APRIL 2013
 ............................................................................................................................................... 45
 
WEF (WORLD ECONOMIC FORUM -JANUARY 2013)
 ............................................................................................................................................ 50
 
The 17 Biggest Risks To Our Hyper-Connected World 
 .............................................................................................................................................. 50
 
RISK
 
SIGNALS
 ............................................................................................................................................................................................... 65
 
GEO-POLITICAL RISK ......................................................................................................................................................... 65 
 
SYRIA
 ............................................................................................................................................................................................................................... 65
 
SYRIA - This has the Earmarks of the Kennedy Ear "Cuban Missile" Crisis
 ........................................................................................................... 65
 
SYRIA - Syrian War You Are Not Being Told About 
 ................................................................................................................................................... 66
 
SYRIA - 25 Quotes
 ......................................................................................................................................................................................................... 67 
 
SYRIA - What Coalition?
 ................................................................................................................................................................................................ 70
 
SYRIA - US Supporting Fully an "Al Qaeda Operation" 
 ............................................................................................................................................. 72
 
SYRIA - Decision Already Taken to Bomb Syria
 ......................................................................................................................................................... 74
 
SYRIA - Market Patterns Before and Immediately After Conflict Begins
.................................................................................................................. 83
 
FINANCIAL & ECONOMIC RISK .......................................................................................................................................... 85 
 
EMERGING MARKETS
 ................................................................................................................................................................................................. 85
 
EMERGING MARKETS - Crisis Temporarily Halted 
 .................................................................................................................................................. 85
 
EMERGING MARKETS - The Plight of four Asian countries - China, India, Indonesia and Japan.
 ..................................................................... 86
 
EMERGING MARKETS -
 Increasing Liquidity Problem In Selected Markets
 ......................................................................................................... 90
 
EMERGING MARKETS - EU Major Contributor to EM Current Account Deficit Growth
...................................................................................... 101
 
EMERGING MARKETS - Insufficient BRICS Reserve Levels Prompt Russian-Chinese Support 
...................................................................... 103
 
EMERGING MARKETS -
Global Bond Yields React To “Taper” Together 
 ............................................................................................................ 104
 
EMERGING MARKETS - Negative Current Accounts + Weak(ening) International Investment Positioning 
 .................................................... 105
 
EMERGING MARKETS - BRAZIL
 .............................................................................................................................................................................. 106
 
EMERGING MARKETS - INDIA
 .................................................................................................................................................................................. 108
 
EMERGING MARKETS - SOUTH AFRICA
 ............................................................................................................................................................... 110
 
EMERGING MARKETS - TURKEY 
 ............................................................................................................................................................................ 112
 
EMERGING MARKETS - "TAPER" Shock Waves Across Asia
 .............................................................................................................................. 113
 
EMERGING MARKETS - India Rupee Collapse Showing Signs of Exhaustion
 ................................................................................................... 121
 
EMERGING MARKETS - Asian Credit Contraction Problems
 ................................................................................................................................ 122
 
EMERGING MARKETS -
Why Asian Markets Are Collapsing 
 ................................................................................................................................ 124
 
EMERGING MARKETS -
Surging Interest Rates
 ..................................................................................................................................................... 128
 
EMERGING MARKETS -
Currencies Getting Clobbered 
 ........................................................................................................................................ 129
 
EMERGING MARKETS - Crisis Worsens
 .................................................................................................................................................................. 130
 
EMERGING MARKETS - Korean Peninsula a Black Swan Possibility 
 .................................................................................................................. 132
 
GLOBAL TAX GRAB - G20 Focusing on Finding Much Needed Tax Revenue
 .................................................................................................... 135
 
RISK - COLLAPSING PETRODOLLAR FOUNDATION 
 .......................................................................................................................................... 139
 
RISK - GLOBAL DEBT 313% of GDP 
 ........................................................................................................................................................................ 142
 
RISK - 202M GLOBALLY UNEMPLOYED
................................................................................................................................................................. 143
 
RISK - SIGNS APLENTY, BUT NO ONE PANICKING - YET! 
 ................................................................................................................................ 144
 
RISK - CANARIES SINGING AGAIN 
 ......................................................................................................................................................................... 146
 
RISK - COMPLACENCY & REPRESSED FEAR 
 ...................................................................................................................................................... 147 
 
RISK - TIED TO EU IN 2012 
 ....................................................................................................................................................................................... 148
 
 
 
3
 
December 2013
 Edition Restricted & Confidential
 
Copyright 2012 © Gordon T. Long All Rights Reserved general@GordonTLong.com
 
RISK - GLOBAL DERIVATIVE COLLATERAL
 .......................................................................................................................................................... 149
 
RISK - GLOBAL RISK MATRIX 
................................................................................................................................................................................... 151
 
RISK - GLOBAL MACRO HEADWINDS / TAILWINDS
 ............................................................................................................................................ 151
 
RISK - FOOD A GROWING GLOBAL INFLATION & SOCIAL UNREST RISK 
 .................................................................................................... 153
 
RISK - INCREASINGLY DYSFUNCTIONAL CAPITALS MARKETS
 ..................................................................................................................... 158
 
RISK - RISING GEO-POLITICAL EVENT RISK 
........................................................................................................................................................ 160
 
GLOBAL
 
MACRO:
 
RISK
 
LEVELS
 .............................................................................................................................................................. 163
 
 AGGREGATED GLOBAL FINANCIAL RISK INDEX ............................................................................................................ 163
 
BANKING RISK - LIBOR-OIS SPREAD (Updated)
 .................................................................................................................................................. 164
 
BANKING RISK - TED SPREAD (Updated)
 .............................................................................................................................................................. 164
 
CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS (Updated)
 ........................................................................................................................ 165
 
CREDIT RISK - EU CREDIT DEFAULT SWAPS (Updated)
 ................................................................................................................................... 165
 
CONSUMER RISK - HOUSING - RATE OF CHANGE (Updated)
 .......................................................................................................................... 166
 
ECONOMIC RISK - ECRI LEADING INDEX (Updated)
 ........................................................................................................................................... 167 
 
INFLATION RISK - MONEY SUPPLY GROWTH - M3 (Updated)
 .......................................................................................................................... 168
 
INFLATION RISK - MONEY VELOCITY (Updated)
 .................................................................................................................................................. 168
 
MONETARY RISK - BANK LIABILITIES (Updated)
 ................................................................................................................................................. 169
 
COST OF MONEY RISK - INTEREST RATES (Updated)
...................................................................................................................................... 169
 
 AGGREGATED RISK LEVEL .............................................................................................................................................. 171
 
TIPPING
 
POINTS:
 
CHANGES
 .................................................................................................................................................................... 172
 
TIPPING POINT MAPPING: 2013 YEAR BEGINNING UPDATE ........................................................................................ 172 
 
TIPPING
 
POINTS:
 
TOP
 
5
 
FOCUS
 
-
 
SEPTEMBER 
 
2013
 ........................................................................................................................ 181
 
I - RISK REVERSAL............................................................................................................................................................ 181
 
II - JAPAN DEBT DEFLATION ............................................................................................................................................ 183
 
III-BOND BUBBLE .............................................................................................................................................................. 185 
 
IV - EU BANKING CRISIS ................................................................................................................................................... 186 
 
V - SOVEREIGN DEBT ....................................................................................................................................................... 187 
 
VI - CHINA HARD LANDING ............................................................................................................................................... 189
 
GLOBAL MACRO
 ................................................................................................................... 193
 
GLOBAL
 
MACRO:
 
ECONOMIC
 
OUTLOOK
 ............................................................................................................................................. 195
 
GLOBAL OUTLOOK
 –
 Research We Followed ................................................................................................................... 195 
 
GLOBAL OUTLOOK - Research of Particular Note ............................................................................................................. 198 
 
GLOBAL OUTLOOK - An Extremely Fragile Stability .......................................................................................................... 198 
 
GLOBAL OUTLOOK - EM Crisis will make the 1997 Asian Crisis Seem like an Early Warning ........................................... 199
 
GLOBAL OUTLOOK - Global Deleveraging Accelerating and Developing Nations Feeling the Pain .................................... 202 
 
GLOBAL OUTLOOK - Problems Erupting Everywhere (Signs of Implosion) ........................................................................ 204
 
GLOBAL OUTLOOK - Credit Fueled Globalization in Retreat .............................................................................................. 207 
 
GLOBAL OUTLOOK - Rogoff's Sovereign Debt Default Levels ........................................................................................... 210 
 
GLOBAL OUTLOOK - Fiscal Adjustments Required............................................................................................................ 213
 
GLOBAL OUTLOOK - Imbalances Continue to Increase Along With Financial Fragility ....................................................... 213
 
GLOBAL OUTLOOK - A 67 Million Jobs Gap ...................................................................................................................... 216 
 
GLOBAL OUTLOOK - Center of Global Manufacturing Confirmed to be Shifting Away from developed Countries .............. 219
 
GLOBAL OUTLOOK - Mercantilist China the Clear Winner Globally, Mercantilist Germany Regionally ............................... 220 
 
ECONOMIC CUTS .............................................................................................................................................................. 222 
 
IMF To Slash Economic Growth Forecast... Again - Still Full of Hockey sticks
 .................................................................................................... 222
 
OECD CUTS ECONOMIC OUTLOOK 
 ....................................................................................................................................................................... 227 
 
IMF CUTS ECONOMIC OUTLOOK 
 ............................................................................................................................................................................ 230
 
ECONOMIC WARNINGS .................................................................................................................................................... 241
 
IMF WARNS - May 2013
 .............................................................................................................................................................................................. 241
 
BIS WARNS - June 2013
 ............................................................................................................................................................................................. 247 
 
WORLD BANK WARNS - June 2013
 ......................................................................................................................................................................... 254
 
GLOBAL
 
MACRO:
 
INDICATORS
 
(CHARTS)
 ........................................................................................................................................... 258
 
GLOBAL GROWTH............................................................................................................................................................. 258 
 
GLOBAL GROWTH - GDP Forecasts Continue to Be Taken Down
 ...................................................................................................................... 258
 
GLOBAL GROWTH - Uneconomic Energy Problematic 
 .......................................................................................................................................... 258
 
GLOBAL GROWTH - Clearly Slowing 
 ........................................................................................................................................................................ 261
 
GLOBAL GROWTH - Trend is clearly Down
 ............................................................................................................................................................. 262
 
GLOBAL GROWTH - Global Growth Cycle
 ............................................................................................................................................................... 263
 
GLOBAL GROWTH - Global GDP Contribution
 ........................................................................................................................................................ 264
 
GLOBAL GROWTH - Clear Signs of Degree of Slowing Since January 
 ................................................................................................................ 265
 

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