Jim’s Mailbox

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Jim/Bill.

I thought you might like this.

Dave

Charts Suggest The Dow Index Is Being Painted To Get “New Highs” In The Market
July 12, 2019

By Pam Martens and Russ Martens

What we need today is a real life character like Vinny Gambini in the movie My Cousin Vinny to take over the questioning for the U.S. Senate Banking Committee – like Ferdinand Pecora did in the early 1930s to root out the systemic frauds in the stock market of that era. Gambini would haul the heads of equities trading for each of the major Wall Street banks and their Dark Pools to a hearing, put them under oath, and grill them about the highly suspicious trading activity that is going on in today’s markets.

Let’s start with what happened yesterday. In the face of punk earnings forecasts for the rest of this year and a growing global economic slowdown, the Dow Jones Industrial Average hit a historic milestone, closing above 27,000 for the first time. But the rising tide didn’t lift all boats: eight of the Dow’s 30 stock components closed in the red. Those stocks were Chevron, Verizon, McDonald’s, Apple, Travelers, Johnson and Johnson, Pfizer, and Merck.

There was something else that raises suspicious red flags to veteran chart watchers. A big spurt in some of the Dow stock components magically occurred in the final 15 minutes of trading, like some mystical, invisible hand had decided to levitate these share prices before the closing bell.

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Jim/Bill,

This from our friend at Shadow Stats.

Dave

The Permanent Recession
July 15, 2019

Via The Great Recession blog,

Oops. Worse than pathetic. Using consistent accounting through time, we discover we have actually been in receding GDP (recession) since 2000 with the exception of one little bump in 2004. We don’t want to admit that, so we we’ll just ignore that by saying we improved our accounting methods over time.

And that is why I say “It’s been a great recession” because we never actually left the Great Recession. Rather than the longest expansion in US history, we’ve been enduring the longest recessionin US history ever since the dot-com bust. The above chart shows the GDP growth rate, and the REAL GDP “growth” rate, which has actually been contraction, not growth, for the past two decades if measured by historic standards. So long as GDP is growing, (above 0 on the chart above), we’re in expansion. Whenever GDP is shrinking (below 0 on the chart above), we’re in recession.

So, when you see financial commentators writing or talking about “the longest expansion on record,” this month, translate that in light of this article. It is only the longest expansion on record if you change the way you calculate GDP from the way previous records were calculated. It’s sort of like saying, “This person ran the longest marathon in history,” but not mention that we’ve reduced the length of the kilometer or mile by which we measure marathons.

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Jim,

As you said years ago, countries are moving away from the dollar.

Dave

India & Russia Will Use Their National Currencies For Defense Deals To Bypass US Sanctions – Report
July 15, 2019

Russia and one of the biggest importers of its weapons, India, have decided to use their national currencies to transfer payments for massive defense deals in order to skirt possible US sanctions, according to Bloomberg.

Moscow and New Delhi have been boosting their arms trade in recent months, with Russia selling submarines, ships, tanks and jets to its Indian partners and set to supply S-400 air defense systems to the country. India’s procurement of S-400s, with a contract worth more than $5 billion, has triggered anger from one of the its largest trade partners, the US, which has warned India of possible consequences of the move.

The new payment method through the ruble and the rupee, agreed by the central banks of Russia and India, may avoid Washington’s sanctions threat. It would enable India to make the first payment for two warships built by Russia, Bloomberg said, citing sources. It is not clear what vessels were implicated in this, but last year the two parties inked a deal for four Russian guided-missile frigates for the Indian Navy, two of which are being built in Russia’s Kaliningrad region.

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