Posted at 1:17 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

Bill Holter is back to discuss the impending ‘Global Margin Call’… and when it might begin. We recorded this call on Friday, July 3rd, so we weren’t privy to the outcome of the Greek referendum at the time of this call. So Sunday’s news that the PEOPLE of Greece have said a resounding NO to IMF Bankster servitude and endless austerity is most welcome news indeed. Although, from a global economic collapse perspective, from a derivatives bubble and credit default swaps and TBTF criminal international banks perspective, today’s vote may well ensure that a ‘Global Margin Call’ could commence at any moment.

Thanks for joining us – and stay tuned to SGT Report all week for much more on the events in Greece and the repercussions these events may have on all of us.

Posted at 5:37 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

Often times I like to write about an event or someone else’s article because of the importance to the overall picture.  Today I will do something a little different.  Below is an e-mail I received last Thursday from a friend.  I have the utmost respect for his thought process and his knowledge.  The writer is "plugged in" if you will, he has very high and powerful contacts in both China and London while he operates out of North America.  The following is chilling to say the least because it comes from someone who "knows", it is not a speculation on his part because he is seeing it real time!  I will add my comments afterward.

"I have been pounding the drum for some time about shrinking liquidity and what the impact will be. Well, I can tell you that we are almost there and a real crisis is developing far faster than what I envisioned that is impacting the 75 Trillion Shadow Banking sector which is on the verge of implosion. Focus on Europe as the real crunch will spread like a wildfire from there seizing up all credit markets.

We will ignore China and the BRIC for the time being as to impact and focus on the European Ponzi that the bankers have brought to the table.

The specific area we should keep an eye on is the U.S./bund 10yr yield spread, currently quoted at 155bp. This spread will start taking its lead from the euro, so when that starts to lose favor keep sharp eye out for the next shoe to drop.

Asian shares were very volatile today,  Shanghai in particular, trading with a 10% variation (daily low to high) today as PBOC were active again. In Europe we did see small gains intraday in DAX and CAC but neither could hold on and actually closed well into negative territory both down over 1%. UK FTSE never got into the green all day and closed -1.5%. Even seasoned Traders are scared now about intra day swings and being caught in a downdraft at closing. Banks are tightening the leash on trading lines to reduce exposure which is sure to castrate liquidity of bonds.

Credit markets are almost closed, I am being told! I REPEAT again the CREDIT markets are almost closed! Trades are happening by appointment and to even move 1MM EM bonds (at an opening price) is almost impossible. It is not uncommon to hear an indication only to trade and a 2% trade away from from opening, assuming you are able to trade, and desire to trade is no guarantee of a sale. NO ONE  is standing up to market prices and to liquidate even a small portfolio can take weeks. It is important that you cannot any longer trade the basis as value is dropping and there no point to  partially selling specific bonds unless you can clear a given position! Because once there is a traded price ALL holders of same or similar will have to remark the book. That is unless you are a bank where the Balance Sheet is not a Mark-to-Market approach on a daily basis for the book being held. Think holding government debt at par for the likes of Italy or Spain knowing they can never clear the debt, and knowing that no one will buy at market. So what is the true value of a large portfolio? Do you hang on getting interest while it is still being paid or do you attempt to go to cash? And if you do who is going to step into your shoes ? Especially since the banks are all trying to save cash and want no exposure of any kind. We maybe approaching the point where central banks are losing credibility and their ability to contain the fallout, when governments are so badly in debt they are powerless and rudderless in a sea of chaos.

We are coming very close to complete chaos that will make 2008 look like a walk in the park! We will be fortunate if we make fall without a real financial disaster!

——————————————————————————————-

Following up from yesterday let’s ponder the upcoming  Crisis that we are facing that specifically involves bonds, which are the bedrock of the financial system and what the fallout maybe.

Every asset class in the world trades based on the pricing of bonds. So the fact that bonds are in a bubble (perhaps the biggest bubble in financial history), means that EVERY asset class is in a bubble. Everything from real estate to stocks to the buying of cars. Ever wonder why car loans in America exceed the value of the cars in question.

Depending on who you speak with globally there are $75-$100 trillion in bonds in existence today.

A little over a third of this is in the US. About half comes from developed nations outside of the US. And finally, emerging markets make up the remaining 14%.

So whatever the real trillion it is, the size of the bond bubble alone should be enough to give pause. Even to the most aggressive or optimistic folks.

However, when you consider that these bonds are pledged as collateral for other securities (usually over-the-counter derivatives) the full impact of the bond bubble explodes higher to something like $500TRILLION. This affects both banks and the shadow banking industry. No wonder the Bank of England is perplexed as to the shrinking liquidity, it is a problem to which they have no solution.

To put this into perspective, the Credit Default Swap  (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion).

And this was at a time when there was QE and other means to throw at the problem which are now spent. So what will be used this round?

This is why the shrinking liquidity in bond sales is even to give real pause and wonder what will come to be as confidence in government wanes, and the shrinking liquidity affects all markets at the same time in different degrees but with a universal discount of value and liquidity, egged on by collapsing derivative trades."

  So there you have it.  This is something I have been saying for quite some time, we are living in the greatest credit bubble of all time…and it is bursting.  It is bursting because liquidity is drying up.  The point made regarding the inability to offload bonds speaks to just how small the "exit door" really is in the most crowded trade in all of history!  I hope you did not miss what was said about "marking to market".  The sale of a measly $1 million worth of bonds at any discount affects the pricing of BILLIONS which then acts as a further liquidity restriction on bank balance sheets.

To this point we have not seen much weakness in U.S. markets BUT we are witnessing the "volume" dry up drastically.  This lack of volume also speaks to the size of the exit door.  Without volume, how does one sell if they want to?  Better yet, without sufficient volume, how does one sell if they HAVE TO or are FORCED TO?  In Asia, China’s stock market has collapsed over 20% in just three weeks.  They are living a real life margin call!  What is most humorous to me is China has now instituted rules where stock market margin calls can be met by posting real estate as collateral!  Meeting margin with an already margined asset is the recipe for disaster!

  Please understand this, "policy" and central banks are doing whatever they can to keep investors away from the exit door because they know there isn’t one.  Central banks all over the world are "buyers" of nearly all things paper, do we really have "markets"?  Anywhere?  Let me finish with this, it is written in the Bible "and on the third day He rose again".  Here on Earth I believe we will soon find out after credit breaks, "and on the third day …nothing opened".  I truly believe this is possible.  I do not believe the Earth can spin more than twice after a true break in the credit markets before a COMPLETE SHUTDOWN will occur.  Nothing "paper" will be spared! 

Regards, Bill Holter
Holter-Sinclair collaboration
Comments welcome!  [email protected]

Posted at 4:51 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Looks like the NOs have it. Monday should be the Fed and PPT’s greatest battle.

The interesting question is will the Algos turn against their creators.

05-07-2015 21:25



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Economic exodus means two-thirds of Puerto Ricans may soon live in US
The Caribbean territory, whose residents are US citizens, is groaning under $73bn debt forcing it to ration water, close schools and watch its health system collapse
Alan Yuhas in New York

Analysis Puerto Rico in crisis: weighed down by $73bn debt as unemployment hits 14%

Joblessness stands at 14%, schools are closing and physicians are leaving in droves, but on the mainland, there is little awareness of the island’s struggles

Facing a crisis of monumental proportions at home, tens of thousands of people are fleeing a Caribbean island in search of a better life in the United States only to find hardship and struggle on American shores. Their stories sound like those of millions of migrants – poverty at home, where the economy lies in tatters – but they differ from millions of others: they’re already American.

Unable to pay its $73bn debt, Puerto Rico has begun rationing water, closing schools and watching its healthcare system collapse and 45% of its people living in poverty. Emigration to the mainland has accelerated in recent years, activists say, and data shows that from 2003 to 2013 there was a population swing of more than 1.5 million people.

“This new wave of immigration can be compared with the immigration in the 1930s and 40s,” said Edgardo González, coordinator of the Defenders of Puerto Rico, an activist group. The Great Depression and second world war spurred the so-called “Great Migration”, when tens of thousands of Puerto Ricans moved to New York every year for nearly two decades.

Now most Puerto Ricans are arriving in central Florida, González said, but many cannot find jobs or even housing. “Some might stay with family for a few weeks, but for those who don’t have family, people end up homeless because of the lack of services,” he said.

“People end up living in hotels, living in cars or on the street. Then you have people who are homeless with kids, who get in trouble with the law, and you have to get into it with childcare and welfare services.”

More…

Jim Sinclair’s Commentary

Maybe you can eliminate the UC in the f**k in order to be F–K.

Greek vote:

Cradle of Western Democracy ! Have to love it.
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Feds ‘lose’ audits for Fort Knox Gold
Published on Jul 2, 2015

The blog, goldseek.com, recently published a report on a Freedom of Information Act request they recently filed with the US government. They were seeking seven reports from federal audits of the gold at Fort Knox. The government’s response? They can’t find those reports – even though they reference those reports as evidence of the gold stored at Fort Knox in a number of ways. The Resident discusses. Follow The Resident at http://www.twitter.com/TheResident

Posted at 4:50 PM (CST) by & filed under Jim's Mailbox.

Jim,

A curious development over the past few years.

Gold producers were profitable and had significantly higher share prices when gold was trading at $300 and silver at $4.00.

What happened that made their operations unprofitable at 4x the commodity price?

CIGA Wolfgang R

Dear Wolfgang,

Lousy financial management as it is mainly technically able but financially weak.

Too much money spent on high tech extraction of gold and silver forcing cost of mining much higher.

Most metal advisers who are also in the bullion selling business like to buy gold but not shares. It has to be a popular mantra by those that plagiarize.

Big money personalities in hedge fund manager’s control were babies in diapers in the gold bull market 1970 – 1980.

There simply is no public retail in anything anymore, only momentum traders, systems and algos.

Machines trade markets but by definition must reflect the proclivity of the builders. The bullion market is presently in the hands of government’s policies, not driven by investment decision such as China and Russia versus the Fed.

Jim

Posted at 10:11 AM (CST) by & filed under Jim's Mailbox.

Jim,

The New York post warned us on the jobs report’s manipulation months ago.

The New York Post  warned The Bureau of Labor Statistics was adding fake jobs

April report was 221,000 it was revised down 187,000

May report was 280,000 was revised down to 254,000

This report missed, but added 110,000, half the total job number in BLS assumptions

He warns not only will this be revised down but that the next 3 months will have less to minus these job assumptions.

His conclusion is that jobs have peaked

CIGA Joseph D.

Posted at 9:59 AM (CST) by & filed under In The News.

Bill Holter Warns- Greece is Going to Happen HERE in the US!

Bill Holter joins The Doc for an Exclusive Update on the Greek Crisis, and the Potential for a Full Derivatives CONTAGION, Discussing:

1. Greek problem is not $3 billion, its $3 TRILLION IN DERIVATIVES- Will ISDA Allow Default?
2. Greek default WAS NOT PRICED IN- Why a MASSIVE LIQUIDITY EVENT has been triggered!
3. End Game for Greek Depositors- Are the Depositor Haircuts and Bail-ins Imminent?
4. Bill Warns: Greece Is Going to Happen Here- The Credit System is Going to Collapse!
5. Gold Will Get Your Wealth into the Next System After a Reset Occurs
6. JPM Corners the Commodities Derivatives Market Adding $3 TRILLION
7. COMEX Will Go Force Majeure Allowing JPM to Unwind Massive Short Position