In The News Today

Posted at 12:27 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

Please keep in mind that no Ponzi scheme can survive (period!) without new money…think the Fed is going to need a bigger hose? QE to infinity was correct when Jim coined the term and is extremely correct now with the Fed’s back against the wall.

Velocity of M2 Money Stock

 

 

 

 

 

 

 

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Bill Holter’s Commentary

…in a year or two this will look like a GREAT DEAL for pensioners as the piper arrives demanding payment!

GE To Freeze Pensions For 20,000 Workers
October 7, 2019

General Electric Co. said it was freezing its pension plan for about 20,000 U.S. workers and offering pension buyouts to 100,000 former employees, as the conglomerate joins the ranks of U.S. companies phasing out a guaranteed retirement.

GE is one of the rare big U.S. manufacturers that still allows salaried workers to accrue traditional pension payments, though it closed its plan to new participants in 2012. The company’s profits have evaporated in recent years, prompting GE to slash its dividend and Chief Executive Larry Culp to look for ways to pare it debts.

Some Expected Larry Culp to Break Apart GE. Instead, He’s Trying to Fix It.

GE’s traditional pension plans, which were underfunded by $27 billion as of the end of 2018, are one of the company’s biggest liabilities. The company said the latest changes could reduce its pension deficit by as much as $8 billion.

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Bill Holter’s Commentary

Negative interest rates? The snake eats its own tail!

“Money’s Not Worth Anything Anymore” – Ex-Credit Suisse CEO Blasts “Crazy” Negative Rates
October 7, 2019

Oswald Gruebel, who served as Credit Suisse CEO from 2004 to 2007 and as UBS Group AG’s top executive from 2009 to 2011, has slammed ECB policy in an interview with Swiss newspaper NZZ am Sonntag.

“Negative interest rates are crazy. That means money is not worth anything anymore,” Gruebel exclaimed.

“As long as we have negative interest rates, the financial industry will continue to shrink.”

Who can blame him – judging by the all-time low in European inflation expectations, ECB policy has been an utter failure…

 

 

 

 

 

 

 

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J. Johnson’s Latest – Silver’s December Call Options Stand Out Like a Sore Thumb!
October 7, 2019

Great and Wonderful Monday Morning Folks,  

     Even though there is every reason in the world to see the precious metals skyrocket this morning we are seeing it once again being held back with Gold now at $1,504.70 down $8.20 with the London low at $1,502.80 with the start pretty much being the high at $1,518.80. Silver is down but not like Gold with its trade at $17.515 down 11 cents after dropping to $17.435 during the London trade with its high at $17.70, its starting price as well. The US Dollar, which seems to be in the hands of the international print controllers, is still being supported with the trade at 98.55, up 6.2 points after reaching up to 98.68 with the low at 98.43. All of this was done starting Sunday Night at 3pm pst, before 5 am, the Comex Open, and the London close.  

     In Venezuela, Gold is now trading at 15,028.19 Bolivar showing a drop of 94.88 from Friday mornings write up with Silver at 174.931 Bolivar losing 1.199 over the weekend. In Argentina, Gold is now valued at 86,788.89 Pesos showing a reduction of 526.44 Pesos with Silver at 1,010.20 Pesos dropping 6.78 in Peso value. Over in Turkey, the Lira now has Gold valued at 8,640.52 giving the noble metal a 16.02 T-Lira gain with Silver at 100.573 Lira showing a slight gain of 0.127 in T-Lira value.  

October Silver Deliveries continue with the demand count now at 365 fully paid for (5,000 ounces) contracts and with a Volume of 1 up on the board so far this morning with the buy price at $17.45. The Demand Count was reduced by 85 contracts that either received their receipts here or in London on the last trading day before the Chinese Golden Week ends. Silver’s Overall Open Interest, the game we’ve been focusing on for the past 3+ years now, has a total count of 211,678 Overnighters proving another 1,477 Obligations have left the field of play as we slowly see the game players reduce their risks.    

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Bill Holter’s Commentary

This ex bartender could never have come up with this herself, the ghosts of Marx and Salinsky must have helped out? Some truly crazy stuff but at least she does not promise a free “unicorn in every pot”!  Additionally, I mentioned this to my Costa Rican horse this morning and he is pissed, he wonders why he had to enter the US legally and without promises of “free shit”?

Congresswoman Alexandria Ocasio-Cortez

Representative Ocasio-Cortez believes that we must build a just society to protect our communities and uplift our neighbors. A Just Society legislation aims to combat one of the greatest threats to our country, our democracy, and our freedom: economic inequality.

It is for that reason that Representative Ocasio-Cortez introduced these measures, to fight to address economic injustice. These stark inequalities are being used by those in power to amplify fear and anger in our communities and further divide us. We must act boldly and swiftly to reverse the corrosive effects extreme inequality and poverty are having on our society.

A Just Society aims to ensure that we are on a path towards shared prosperity for all. A just society provides a living wage, safe working conditions, and healthcare. A just society acknowledges the value of immigrants to our communities. A just society guarantees safe, comfortable, and affordable housing. By strengthening our social and economic foundations, we are preparing ourselves to embark on the journey to save our planet by rebuilding our economy and cultivate a just society.

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Jim Sinclair’s Commentary

The last political speech in the US dealt with how high the US economy was…?

Stocks Tick Lower as Investors Await Trade Developments
October 7, 2019

U.S. stocks inched lower Monday, weighed down by declines among shares of consumer staples companies.

Trading was relatively quiet with no data of note released in the U.S. and few developments on the U.S.-China trade front. Major indexes flitted between small gains and losses for much of the session before turning lower in the afternoon.

As the week progresses, traders say they will be keeping their eyes on headlines emerging from Washington, where high-level officials are set to meet to discuss the U.S. and China’s trade relationship.

With expectations low among investors, even a partial deal might be enough to help keep things on track, said Geoffrey Yu, head of the U.K. investment office at the wealth-management arm of UBS.

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Jim Sinclair’s Commentary

Some investors are concerned that recent turmoil in a key short-term cash market, where banks borrow to fund operations that could exacerbate difficulties in trading bonds.

Behind every event in interest rate markets, there is a cost. The cost can easily be manipulation but not in this case. The cause is the hidden failure of a financial institution , replacing the financial institution with a problem, and the support of that problem through the near term cash market in the form of a beard.

Wild Swings in Repo Rates Raise Concerns About Bond Market’s Liquidity
October 7, 2019

Some investors are concerned that recent turmoil in a key short-term cash market where banks borrow to fund operations could exacerbate difficulties trading bonds.

Spikes in the cost of overnight loans using repurchase agreements, or repos, could hit bond trading in two ways, investors and analysts said. Rising repo rates make it more expensive for securities dealers to borrow money and to hold government bonds—actions they take frequently to facilitate client trades and manage their risks.

In the repo market, where banks and money-market mutual funds typically lend cash for periods as short as one night in exchange for safe collateral such as Treasurys, rates surged as high as 10% last month from about 2.25% amid an unexpected shortage of available cash in the financial system.

Bond investors tend to worry about liquidity, or the ability to buy or sell a particular security, because the market doesn’t have a central exchange and a lack of trading partners could create wide gaps in prices at times of market stress. Differences in the various features of corporate bonds, which are often issued in relatively small sizes, can also make trading difficult.

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Jim Sinclair’s Commentary

If they got any looser, they’d come untied.

Investors Should Fear More Competition Among Ratings Companies
October 7, 2019

Inflated ratings on complex debt structures were one of the culprits of the 2008 financial crisis. While standards have since tightened a lot, new ratings companies threaten to loosen them again.

Back in August, an exhaustive data analysis by The Wall Street Journal found that the three challenger ratings companies—DBRS, Kroll Bond Ratings Agency and Morningstar—tend to rate bonds more highly than the three established ones— Moody’s, S&P Global and Fitch Ratings.

Now, there are signs that the arrival of Kroll into Europe’s structured credit market this summer also is starting to push down credit standards.

Collateralized loan obligations, or CLOs, have experienced a boom over the past few years, as record-low interest rates have pushed investors into all sorts of higher-yielding paper. CLOs are portfolios of bank loans to heavily indebted corporations that are sliced into tranches with different levels of risk. Despite the scary acronym, they actually withstood the financial crisis even as the market for other types of complex debt collapsed.

But signs of frothiness are slowly creeping in. Companies are getting more indebted and lenders’ ability to attach conditions to the loans underpinning CLO portfolios—so-called covenants—has waned.

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