Posts Categorized: In The News

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Bill Holter’s Commentary

This is not conspiracy theory, it is pure math. And again, they will tell you, you were given warning!

Fed Warns Dollar “Might Not Retain Its Dominance Forever”
February 12, 2019

When the TBAC published the minutes to its quarterly refunding decision two weeks ago, the most interesting part of the discussion was the “unique challenges” faced by the Treasury over the medium term, especially the possibility of significant financing gap over next 10 years amounting to over $12 trillion and the potential need for more domestic investor participation if foreign reserve growth slows.

Here, among other things (which potentially include the Green New Deal, with its $6+ trillion cost) the TBAC cautioned that the Treasury’s financing needs are expected to increase significantly even without factoring in recession possibilities over the next decade. The TBAC warned that deficits to the tune of $1-$1.5trn a year, and cumulatively over $12trn, over the next decade, are coming and will have to be funded in the bond market. Meanwhile, the CBO stubbornly refuses to forecast a recession during the next decade, instead projecting a steady 1.5-2% real GDP growth over the next 10y. While the TBAC did not take a position on this laughable assumption, it warned that deficits typically rise 2-5% of GDP in recessions, which would translate to additional deficits of $0.5-1trn at current GDP levels, and warns that “these borrowing needs have to financed in the context of already high global dollar debt exposure.”

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Bill Holter’s Commentary

But this time it’s different, right?

Bill Holter’s Commentary

This is actually too funny (ironic?) for words!

After El Chapo Conviction, Use Seized $14 BILLION To Build Border Wall?
February 12, 2019

Could El Chapo’s seized drug money be used to build the border wall?

That’s one of the questions many are asking on Tuesday following news of the former drug kingpin being found guilty on all counts.

Mexico’s most notorious drug kingpin, Joaquin “El Chapo” Guzman, will spend the rest of his life in prison after a jury found him guilty on all 10 counts following a three month trial.

According to Breitbart, the United States has seized $14 billion from the former drug lord, which gave Sen. Ted Cruz a brilliant idea.

The Texas Republican introduced the Ensuring Lawful Collection of Hidden Assets to Provide Order (EL CHAPO) Act in April 2017, which calls for the use of the $14 billion seized from the cartel drug lord to be used to pay for the wall.

“Fourteen billion dollars will go a long way toward building a wall that will keep Americans safe and hinder the illegal flow of drugs, weapons, and individuals across our southern border,” Cruz said in a statement.

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Bill Holter’s Commentary

Probably just temporary, nothing to worry about here…right?

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Bill Holter’s Commentary

What’s $737 million between friends?

Pelosi’s Brother-In-Law’s Company Received $737,000,000 From Obama’s Energy Dept As “Loan Guarantee”
February 9, 2019

Opinion| To understand the future we must understand the past.  At least when it comes to what we can expect from corrupt politicians.

To envision the size of the pot of gold that Democrats envision for themselves at the other end of the Green New Deal rainbow we only have to look back to the Obama administration, the $3 Trillion in “stimulus” money, the Green Movement, and how it seemingly  enriched Democrats, their donors, and Nancy Pelosi in particular.

For background we cite a September 2011 article from the Daily Mail:

Even as government financed “green energy” pioneer Solyndra was failing, the Obama administration approved an additional $1 Billion in loans to similar green energy projects.

A whopping 737 million of that money went to the Crescent Dunes project situated in Tonopah, Nevada, to finance a 110-megawatt desert solar power plant.

Stay with me.

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Bill Holter’s Commentary

They will say you were duly warned…

IMF Warns Of Global Economic “Storm” As Growth Undershoots
February 10, 2019

Dubai (AFP) – The International Monetary Fund on Sunday warned governments to gear up for a possible economic storm as growth undershoots expectations.

“The bottom-line — we see an economy that is growing more slowly than we had anticipated,” IMF Managing Director Christine Lagarde told the World Government Summit in Dubai.

Last month, the IMF lowered its global economic growth forecast for this year from 3.7 percent to 3.5 percent.

Lagarde cited what she called “four clouds” as the main factors undermining the global economy and warned that a “storm” might strike.

The risks include “trade tensions and tariff escalations, financial tightening, uncertainty related to (the) Brexit outcome and spillover impact and an accelerated slowdown of the Chinese economy”, she said.

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Bill Holter’s Commentary

Weekend comedy…about as serious as a heart attack!

Weekly Commentary: Delusional
February 9, 2019

February 8 – Bloomberg (Brian Chappatta): “Bond traders are dusting off their tried and true post-crisis playbook after the Federal Reserve’s pivot last month. What they don’t realize is that the game has most likely changed. In an unabashed reach for yield, investors suddenly can’t get enough of the riskiest debt, with the Bloomberg Barclays U.S. Corporate High Yield Bond Index posting a staggering 5.25% total return in the first five weeks of 2019, led by those securities rated in the CCC tier. In the largest CCC borrowing since September, Clear Channel Outdoor Holdings Inc. received orders this week of more than $5 billion for a $2.2 billion deal, allowing it to price its debt to yield 9.25%, compared with whisper talk of about 10%.”

A Friday headline from a separate Bloomberg article: “Corporate Bonds on Fire as Dovish Fed Soothes Investors,” with the opening sentence: “Fear is turning to exuberance in credit markets.” According to Lipper, corporate investment-grade funds enjoyed inflows of $2.668 billion last week, with high-yield funds receiving $3.859 billion. Bloomberg headline: “High-Yield Bond Funds See Biggest Inflow Since July 2016.” This follows the biggest high-yield inflows ($3.28bn) since December 2016 from two weeks ago.

There’s support for the argument that financial conditions have loosened significantly over recent weeks. Prices of corporate bond default protection have declined. After trading as high as 95 bps on December 24th, by Tuesday an index (Markit) of investment-grade credit default swap (CDS) prices had dropped all the way back to 64 (near October levels). Risk premiums have narrowed, especially for high-risk junk bonds. U.S. high-yield spreads (Bloomberg Barclays) traded as wide as 537 bps on (tumultuous) January 3rd. By this Wednesday, they were back down to 400 bps (still significantly above the 300bps from October 3rd).

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Bill Holter’s Commentary

The 2008 Great Financial Crisis through the eyes on an insider…

Inside the 2008 Financial Crisis & The Lessons Learned – Mike Silva (former NY Fed)
February 9, 2019

This may well be one  of the most important articles we have run on this blog in some time. In this article we feature an article written by Mike Silva. Mr. Silva served as the Chief of Staff for Tim Geitner at the NY Fed and stayed on at the NY Fed under new President Bill Dudley when Tim Geitner moved on to become Secretary of the Treasury.

In this position, Mr. Silva had a front row seat during the most recent financial crisis in 2008-2009. Most of us suspected the entire financial system was closer to implosion that we realized at that time and Mr. Silva confirms that to be true in this article. He goes on to explain how and why certain actions were taken to prevent total systemic collapse. In the conclusion to his article he states very clearly that he believes we will have another major financial crisis “sooner rather than later”.  Given his insider position, this is clearly an article we all need to read and understand. Below are a few excerpts and then a few added comments.

INTRODUCTION

“During the financial crisis, I served as Tim Geithner’s chief of staff at the New York Fed and, then when Tim became Secretary of the Treasury, I served as chief of staff for the next president, Bill Dudley. My role allowed me to directly observe an impossibly small number of Americans at the New York Fed, the Board of Governors of the Federal Reserve and the Treasury Department fight desperately to save the financial future of all Americans. Thank you for this opportunity to tell their story.”

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Bill Holter’s Commentary

No credit expansion here?

Bill Holter’s Commentary

Is she spending the weekend at Bernie’s?

MYSTERY: NO Pictures From First Ginsburg ‘Public Appearance’ Since Surgery?
February 5, 2019

Supreme Court Justice Ruth Bader Ginsburg attended a concert put on by her daughter-in-law at the National Museum of Women in the Arts on Monday, marking her first public appearance since cancer surgery in December.

Attendees at the Notorious RBG in Song described Ginsburg as “glam,” and “resplendent,” and “magnificent,” but you’ll have to take their word for it.

In an era when every person is carrying a camera and isn’t afraid to use it, there wasn’t a single snap of the 85-year-old to be found. Every media story that covered her alleged appearance used file photos.

“What a delight to see RBG tonight at ‘Notorious RBG in Song,’ written & beautifully performed by her daughter-in-law, Patrice Michaels,” Post contributor David Hagedorn posted to Twitter. “She sat in the back, a few rows behind us, looking resplendent. Being hugged & wished a happy birthday by her made a grand night spectacular.”

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Bill Holter’s Commentary

…and he just recently bought gold.

Bill Holter’s Commentary

While I cannot vouch for the numbers, they seem correct. What happened you ask? They bought your votes, they were believed and no one complained until it was too late, which is now!

Apocalyptic Debt Crisis In America: 63 Of America’s Largest 75 Cities Are Completely Broke
January 31, 2019

The debt crisis in the United States of America has reached apocalyptic proportions.  A new and horrifying report out details the reason why 63 of America’s largest cities are completely broke: debt and overspending.

According to a recent analysis of the 75 most populous cities in the United States, 63 of them can’t pay their bills and the total amount of unfunded debt among them is nearly $330 billion. Most of the debt is due to unfunded retiree benefits such as pension and health care costs.  That means those depending on that money, likely won’t see a dime of it.

“This year, pension debt accounts for $189.1 billion, and other post-employment benefits (OPEB) – mainly retiree health care liabilities – totaled $139.2 billion,” the third annual “Financial State of the Cities” report produced by the Chicago-based research organization, Truth in Accounting (TIA), states. TIA is a nonprofit, politically unaffiliated organization composed of business, community, and academic leaders interested in improving government financial reporting.

“Many state and local governments are not in good shape, despite the economic and financial market recovery since 2009,” Bill Bergman, director of research at TIA, told Watchdog.org.

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