Posts Categorized: In The News

Posted 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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Bill Holter’s Commentary

“ECB’s aggressive stimulus was unjustified, inflated property prices and could even sow the seeds of the next crisis.”…ya think? Central bankers have created a monetary nuclear bomb mathematically guaranteed to go off!

ECB’s Old Guard Attack Draghi’s Long-Term Easy Money Policy
October 4, 2019

FRANKFURT (Reuters) – Six former euro zone central bankers on Friday criticized the European Central Bank’s ultra-easy monetary policy under the presidency of Mario Draghi, saying it has been unsuccessful and probably aimed at bankrolling indebted governments.

In a two-page document, former ECB board members Juergen Stark and Ottmar Issing, along with former rate setters from Germany, France, Austria and the Netherlands, also argued that the ECB’s aggressive stimulus was unjustified, inflated property prices and could even sow the seeds of the next crisis.

Their attack came at a time of discord inside the ECB, where more than a third of policymakers opposed more money printing last month, and reflected the radical overhaul of the once conservative institution’s policies under Draghi.

The memorandum was released to journalists less than a month before Draghi makes way for incoming ECB president Christine Lagarde.

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J. Johnson’s Latest – Silver Prices Stagnated for Today’s Preplanned Attack
October 4, 2019

Great and Wonderful Friday Morning Folks,    

      Gold continues to trade higher, but barely this time, with the price at $1,514.20 up 40 cents after reaching $1,516.30 and with the low at $1,510.40. Silver is signaling with a negative price, which took the place of text messages and those well-known bar room discussions, with the trade at $17.635, down 4.1 cents after reaching $17.705 with the low close by at $17.600.  The US Dollar is still over elevated and is trading at 98.435, down 10.5 points and close to the low at 98.410 with the high at 98.600. All of this non activity happened before 5 am pst, the Comex open, the London close, and our Unemployment Report.    

      In Venezuela, Gold is now trading at 15,123.07 Bolivar giving the noble metal a 34.95 Bolivar boost with Silver losing 0.649 Bolivar with its price at 176.130 Bolivar. Argentina’s Peso now has Gold valued at 87,315.33 showing a loss of 43.37 Pesos with Silver at 1,016.98 Pesos, losing 6.67 since yesterday morning’s big gain. The Turkish Lira now has Gold valued at 8,624.50 Lira’s showing us a gain of 23.51 in the overnight with Silver at 100.446 proving the most manipulated metal on the planet lost 0.327 in T-Lira value.    

      October Silver Deliveries shows us a 41-count drop from yesterday’s demands providing us a total of 450 fully paid for 5,000-ounce contracts waiting for receipts either here or in London and with zero Volume up on the board so far this morning. Silver’s Overall Open Interest is still elevated with the total now (in the early morning) at 213,155 Overnighters proving no one left the field of play but 497 more contracts had to be added in order to keep Silver prices stagnant for today’s preplanned attack at the time of the report.    

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Bill Holter’s Commentary

71% is a mere flesh wound …

September Class 8 Heavy Duty Truck Orders Collapse 71%
October 4, 2019

Preliminary Class 8 order data for September is starting to trickle in and, like the data preceding it so far this year – it’s ugly.

Class 8 orders were crushed 71% in September, reaching 12,600 units, according to Baird and Morgan Stanley.

This follows a 79% plunge in August.

This makes September the 11th consecutive month of YOY order declines and the 9th consecutive month of orders below 20,000.

Class 8 orders are often seen as a pulse on the U.S. economy. Morgan Stanley analyst Courtney Yakavonis wrote in a note that she expects YOY order declines to continue into the year’s end. But Baird analyst David Leiker said he was gaining “increased confidence” that a bottom in declines was likely near – but that’s a story we have heard from ACT Research analysts all year and orders just continue to collapse. 

The blame continues to fall on the trade war.

    “Little has changed since August with respect to the freight market and freight rates, while uncertainties surrounding trade and tariffs continue to weigh on truck buyers’ psyches,” said Steve Tam, ACT vice president, according to FreightWaves.

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Jim Sinclair’s Commentary

Zero bound here we come!

The Fed Will Give the Market What It Wants. Again
October 4, 2019

Jobs Report Still Boring, Fed Still Cutting

Once upon a time, monthly jobs reports were exciting. Nobody knew whether they’d be good or bad. And when they were good they became political footballs, leading Jack Welch to tweet wild conspiracy theories and Herman Cain to call this newsletter writer stupid.

But after 108 straight months of job growth, the thrill is gone. September’s numbers, released today, were as vanilla as most of the 107 months that came before. Headline payroll numbers, which will be revised a million times and so are basically meaningless, weren’t as good as expected. Unemployment was lower than expected. Wage growth — the number that really matters these days — wasn’t great.

I see you nodding off there! Such boring numbers were manna for the stock market, though, which found them not too weak to amplify recession fears and not too strong to put the Fed off raising interest rates again. Traders still seem to believe the Powell Put — an implied guarantee that Fed Chairman Jerome Powell will always ride to the stock market’s rescue — is alive and well, writes John Authers. Before the report, in fact, the bond market had priced in at least a quarter-percentage-point rate cut later this month, notes Brian Chappatta. The Fed usually does what the market wants, and today’s numbers would have had to be truly exciting to change that.

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Jim Sinclair’s Commentary

Fat chance with the majors.

Gold Supply Heading For Peak Unless Miners Ramp Up Exploration Spending, Resource Consultancy Wood Mackenzie Says
October 4, 2019

Gold, one of the more popular risk-hedging tools in the past two months of global turbulence, may see supply peak if miners do not increase their spending on exploration, according to Wood Mackenzie.

The London-based natural resources consultancy said gold producers have kept their spending on discovering new resources under tight control.

The word of caution on supply would support analysts’ prediction that the gold price will head higher in the next two years, having gained 23 per cent in the past 12 months as investors parked more money in the traditional safe-haven asset.

“While the resurgent gold price has garnered a renewed sense of optimism in the industry, it has also shone a light on a structural issue that has been brewing for some time,” said the consultancy’s analysts in a note last week.

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Jim Sinclair’s Commentary

The greatest spin ever done in the equity markets was today where a cruddy jobs report sends people flying into stocks at higher prices!

Hiring Slowed In September As Unemployment Rate Fell To A 50-Year Low
October 4, 2019

The cavalcade of payroll gains continued for the 108th month in September, pushing down the jobless rate to a half-century low and countering anxieties that had been piqued by slowing global growth, declining factory orders and a jittery stock market.

Employers kept hiring at a steady if unremarkable pace, adding 136,000 jobs, the Labor Department reported on Friday. And the unemployment rate fell to 3.5 percent.

The report capped a week of otherwise disappointing economic news. Manufacturing activity in the United States fell for the second month in a row, while the World Trade Organization predicted that the growth in global trade would slacken significantly. A key measure of activity in the services sector — which accounts for two-thirds of the country’s output — also cooled.

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J. Johnson’s Latest – Our Currency Watch Continues To Prove The Precious Metals Rally
October 3, 2019

Great and Wonderful Thursday Morning Folks,   

      Day 4 of the week still shows positive price movements for both precious metals (at least in the very early morning) with Gold leading the way at $1,510.70, up $2.80 and close to the high at $1,511.70 with the low at $1,501.70. Silver is flat to higher at $17.70, up 1.7 cents with the high close by at $17.795 with the low down at $17.55. The US Dollar is flat to lower with the value pegged at 98.66, down 2.9 points closer to the low at 98.62 than the high at 98.875. All of this flatness happened before 5am pst, the Comex open, and the London close.   

      Our emerging markets currency watch continues to prove the rally and now shows Gold trading under the Venezuelan Bolivar at 15,088.12 showing a gain of 185.77 Bolivars with Silver at 176.779 Bolivar showing it too gained 3.546 Bolivars since yesterday morning. In Argentina, Gold holders now see its price at 87,358.71 Pesos, adding another 4 digits of value (1,229.73 Pesos) to the left of the decimal with Silver now trading at 1,023.65 Pesos proving it too gained 2.3653 Pesos in the overnight. The Turkish Lira now has Gold priced at 8,600.99 showing it gained 55.33 Liras with Silver at 100.773 showing it gained 1.4339 in T-Lira value.      

      Our October Silver Delivery Demands lost a little ground yesterday but nowhere near earlier with the total count now at 491 Demands for physical and with Zero Volume posted up on the board so far this morning. This demand count proves 54 Obligations where delivered upon either here or in London with no trading range to view so far today. Even though Silver rallied a little yesterday, the shorts didn’t leave nor did any longs as the Overall Open Interest gained 359 more positions giving us 212,658 Overnighters duking it out in the arena of play as the deliveries continue to dry up supply of the real all the while cash is being printed in order to keep the markets moving.   

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Jim Sinclair’s Commentary

Is the dollar up or are all other currencies down?

The Euro Has Kept Falling. Investors Wonder How Low It Can Go.[Subscription Required]
October 3, 2019

The euro has drifted toward its lowest levels against the dollar in years as Europe takes the brunt of a global growth slowdown. Investors are now questioning: How low can it go?

The currency briefly sank below $1.09 this week, the lowest since May 2017 and not far off the levels below $1.04 last reached in 2003.

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Jim Sinclair’s Commentary

The key to a currency union is a predetermined method of exit. Major countries in Africa are considering a single currency. I rather hope they learn the lesson of the Euro and write into the agreement the method, means, and agreement also for an exit.

U.K. Farmers Rush to Sell Produce Ahead of October Brexit Deadline .[Subscription Required]
October 3, 2019

British farmers are racing to ship this year’s abundant harvest out of the U.K. by Halloween, when Brexit could pull the country out of the world’s biggest free-trade zone overnight.

Leaving the European Union without a deal—as Prime Minister Boris Johnson has pledged to do at the end of October if the bloc doesn’t meet certain demands—would hit British agricultural exports with customs duties, extra paperwork and checks on animal and plant health.

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Jim Sinclair’s Commentary

The bottom line, who decides what constitutes illegal content? It is a broad definition. This is a difficult question because who decides? Who watches the watchmen? Who decides what is illegal? Who censors the censors?

EU’s Top Court Backs Global Removal Of Illegal Content On Facebook.[Subscription Required]

Jim Sinclair’s Commentary

Anybody who puts a tariff on, taxes themselves. Tariffs do nothing but backfire until everything is more expensive. Since we have a currency that has a number before the decimal point, everybody pours in the dollar. When the dollar rises is more than 20%, all the prices of our goods and services go up 20%.

U.S. to Put Tariffs on European Planes, Whiskey, Cheese After WTO Ruling
October 3, 2019

The price of Scotch, French wine, cheese and other European exports is about to go up in the U.S. after the Trump administration announced new tariffs on billions of dollars of EU products starting Oct. 18.

President Donald Trump got the go-ahead from the World Trade Organization to impose tariffs on as much as $7.5 billion worth of European exports annually in retaliation for illegal government aid to Airbus. The award is the largest in WTO history.

However, there was relief for some firms as the U.S. removed leather goods from its original proposed list and measures on wine and spirits weren’t as severe as some expected. Shares of European luxury companies gained after a Wednesday slide on concerns about tariffs and falling sales in the key Hong Kong market. LVMH gained as much as 2.4%, Kering SA ticked up as much as 1.7%, and Hermes International by 1.4% in European trading on Thursday.

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A Second Day Price Rise In Silver And Gold, Plus Another Nuthingburger!
October 2, 2019

Great and Wonderful Wednesday Morning Folks,   

      This is the second day in a row where we see Gold trading higher than the previous day with the price at $1,492.10, up $3.10 after reaching up to $1,494.10 with the low at $1,480.50. Silver is tagging along today with the trade at $17.345, up 4.8 cents and closer to the high of $17.395 than the low at $17.240. The US Dollar is also under support (for different reasons) with its value pegged at 98.865 up 8.8 points after stretching up to 99.08 with the low close by at 98.740. All of this was done, before 5 am pst, the Comex open, and the London close.    

      We have nothing but solid gains in our emerging markets overnight currency watch with Gold trading at 14,902.35 Bolivar in Venezuela showing a healthy gain of 181.77 in Bolivar value with Silver at 173.233 Bolivar showing a gain of 1.847 over the past 24 hours. Argentina’s Peso now has Gold priced at 86,128.98, gaining 1,250.94 Pesos with Silver gaining 11.873 in Peso value with the price at 999.997 Pesos. The Turkish Lira now has Gold valued at 8,545.66 showing a gain of 162.72 in the overnight with Silver gaining 1.7339 Lira with the value pegged at 99.3391 Liras.    

      Silver Deliveries for the month of October really took a hit in count with the demands for physical now at 545 fully paid for contracts involving 5,000 ounces each proving a drop of 519 Obligations that where either delivered here or in London since yesterday’s early morning count. This morning’s trading range is in between $17.285 and $17.155 so far and with a Volume of 6 up on the board with the highest price being the last trade. Silver’s Overall Open Interest is continuing to drop in count as well. If the option numbers are any indication that an exit plan has been arranged a few years ago, we will see a slow and continuing drop in count from this point forward with the total Open Interest tally now at 212,299 Overnighters, proving a reduction of 1,068 from yesterday’s early morning count.    

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Bill Holter’s Commentary

This is only the beginning…!

NYC Housing Prices In Near ‘Free Fall,’ Conditions Mirror Recession Era Following Tax Hikes
October 1, 2019

NEW YORK – The Manhattan real estate market stumbled in the third quarter of 2019, new reports show, as prices plunged and fewer buyers were willing to purchase higher-priced properties in the wake of two recent tax increases.

The median sales price for properties fell 17 percent from the same quarter last year, to $999,950, according to new data from CORE. The average sales price dropped 12 percent, to $1.64 million.

Condo sales fell 8 percent, logging 946 transactions. Co-op sales, on the other hand, were up a modest 2 percent year over year.

“The third quarter of 2019 was undoubtedly the most challenging quarter in recent memory, especially for condo sales,” Garrett Derderian, managing director of market analysis at CORE, said in a statement. “Market prices have gone from what was once described as the kindest, gentlest correction to a near free-fall. The last time conditions were described in such a way was in the height of the recession.”

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J. Johnson’s Latest – The World Seems To Be On The Verge Of Change
October 1, 2019

Great and Wonderful Tuesday Morning Folks,   

      October 1st greets us with a positive price for the precious metals with Gold trading at $1,473.90, up $1 after reaching up to $1,480.90 with the low at $1,465.00. Silver is leading the trade at $17.16, up 16.2 cents and close to its high of $17.185 with the low at $16.940. The currency that’s keeping it all together is the US Dollar, with its value pegged at 99.10, up 7.9 points after reaching up to 99.235 with the low that is too high at 99.030. All of this was done before 5 am pst, the Comex open, and the London close.    

      In Venezuela Gold is now priced at 14,720.58 Bolivar, still losing value as their currency strengthens with Silver priced at 171.386 Bolivar showing a reduction of 0.699 in value. Argentina’s Peso now has Gold priced at 84,878.04 showing a 521.40 Peso reduction with Silver at 988.124, proving a gain of 0.462 in A-Peso value. The Turkish Lira now prices Gold at 8,382.94 shaving off 28.28 T-Lira with Silver at 97.6052 gaining 0.3333 Lira’s.   

      October Silver Deliveries now show the demand count at 1,064 fully paid for contracts waiting for receipts proving a reduction of 109 obligations during yesterday’s trade and with a Volume of 2 up on the board so far this morning with a trading range between $16.96 and $16.925 with the last trade the high so far. Silver’s Total Open Interest drives the direction with the count now at 213,367 Overnighters showing a reduction of 5,465 from yesterday’s early morning count which may be proving some of the paper longs exiting but with the way things are these days who really knows?      

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Bill Holter’s Commentary

The bottom line is this, no paper currency can or will survive the fire of the coming defaults. The dollar may be the cleanest dirty shirt in the laundry basket today but the entire basket will catch fire. It is the dollar system (post 1971) itself that allowed the over use of debt in all currencies. As an aside, the “confessions of an economic hitman” suggests over levering foreign central banks and treasuries has been a plan all along? .56 on the USDX, par, or even 120 will be a moot point when all is said and done because anything times zero is still zero…

The US Dollar Beast
October 1, 2019

John Maynard Keynes (1883–1946) explains very well how to predict the winner of a beauty contest successfully. You must, he noted, think along the following lines: “(…) each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors (…). It is not a case of choosing those which, to the best of use of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have to reach the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be.”1

This is a perspective that those may wish to take into consideration who think the US dollar is about to collapse, would be the ugliest of all currencies. Latest data from the Bank of International Settlement (BIS) speaks a rather different language. In its 2019 Triennial Survey,2 the BIS informs us that daily trading in foreign exchange markets had reached 6.6 trillion US dollar per day in April 2019 – compared to 5.1 trillion US dollar three years earlier – and that the US dollar remained the single-most important currency in the FX markets, being on one side of 88% of all the trades. For comparison: the euro was on one side of 32% of all trades, the Japanese yen of 17%, and the Chinese renminbi of just 4.3%.

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Posted by & filed under In The News.

Bill Holter’s Commentary

This is a very interesting article, the first two paragraphs are exactly correct.

Hedge Fund CIO: You Should Be Buying Vol – MMT Is Coming Next And It Will Be Preceded By An Explosion In Volatility
September 29, 2019

Submitted by Eric Peters, CIO of One River Asset Management

We’re approaching a redistribution,” said the macro CIO, swinging through NY. We were discussing trades, themes, the big picture. “What lies behind us were all good things for asset owners, and what lies ahead is in many respects the opposite.” We were eating at some Greek place. “Investors rode a trend based on stock buybacks, high profit margins (which are the inverse of low wages), low taxes, and loose regulation of technology,” he said, holding up four fingers. “Now think about what lies ahead.” And he lowered each finger into a closed fist.

We hit peak inequality and it sparked a political response across the globe, I said. And it occurred at a time when monetary policy has largely hit its limit – those two things are obviously related. So now markets bump along with investors scrambling for sources of scarce yield, accepting more risk for less return, until something goes wrong – then the profound changes that are happening beneath the surface become clear. That’s when we see an enormous fiscal response, whether we call it MMT or not won’t matter. That’s what’s coming next.
“I spend a lot of time in Tokyo,” said the same CIO, dropping heavy names from his recent visit. “I’ve been pressing them for years to get seriously aggressive. When the government can borrow for 20-years at -0.20% in a nation filled with so many smart scientists, how can you not issue bonds and invest massively in primary science? Surely you’ll earn a positive return on that kind of investment – that’s not building bridges to nowhere,” he said. “But my contacts there can’t seem to wrap their heads around anything that challenges their orthodoxy.”

Established economic and political interests created myths about how economies work, I said in response. Entrenched interests fear change and will do everything possible to maintain the status quo. They created what we now call economic orthodoxy. But according to it, all this QE would have sparked massive inflation. Japan’s 250% Debt/GDP would have provoked economic collapse. But these things haven’t happened, because the myths are not truths. And as the faith in orthodoxy melts, established interests will fall, real change will come.

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J. Johnson’s Latest – The Beatings Continue, But So Do The Call Options Purchases in Silver!
September 30, 2019

Great and Wonderful Monday Morning Folks,   

      Today is the last day of our fiscal year (US federal government) and as usual the morality beatings continue with Gold trading at $1,489.80, down $16.60 after being pushed down to $1,486.20 with the high at $1,507.20. Silver is still being used as the Red Headed Step Child with its trade at $17.23, down 42.2 cents after being knocked to $17.16 with the high at $17.66. The US Dollars trade, on the last day of the year, is at 98.925, up 16.4 points and close to the high at 98.965 with the low at 98.71. All of this nonsense happened before 5 am pst, the Comex open, and the London close.   

      Everything we are seeing in the currency’s arena is all about the support of the internationally accepted US Dollar mechanism (for now) with the emerging markets taking hits as well. In Venezuela, Gold is now trading at 14,879.38 Bolivar down 1,168.50 over the weekend with Silver losing 4.845 with its super sale price now at 172.085 Bolivar. In Argentina, Gold is trading at 85,399.44 Pesos showing a reduction of 436.70 with Silver at 987.662 Pesos showing a reduction of 25.088. In Turkey, Gold’s price is at 8,411.22 Lira showing it too lost 84.98 with Silver at 97.2719 losing 2.9681 in T-Lira value.    

      October Silver Deliveries are now in full swing with the count at 1,173 fully paid for 5,000-ounce contracts and with a Volume of 25 up on the board so far today with a trading range of $17.505 and $17.165 with the last trade being the low and a single lot order. This is only 5,865,000 Ounces of a product that is needed in just about all electronics and showing only a slight 33 count reduction from Fridays tally. We know the criminal element is still allowed to trade precious metals, what we don’t know is what deal they made with the last administration and if that deal will be removed by Trump or if we’re to wait for the last bar to leave but one thing for sure is, the Resolutes are still Resoluting!    

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Jim Sinclair’s Commentary

My experience with China is that you don’t kick a sleeping dragon.

Hong Kong Protesters Taunt Beijing in Bid to Spoil Communist China’s Birthday
September 30, 2019

HONG KONG—Protesters here have dialed up attacks against the Chinese Communist Party ahead of mass demonstrations planned for the 70th anniversary of the People’s Republic of China on Tuesday, renewing momentum for the protest movement by shaping it as a fight against authoritarianism.

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China Quietly Doubles Troop Levels In Hong Kong, Envoys Say
September 30, 2019

Last month, Beijing moved thousands of troops across the border into this restive city. They came in on trucks and armored cars, by bus and by ship.

The state news agency Xinhua described the operation as a routine “rotation” of the low-key force China has kept in Hong Kong since the city’s handover from Britain in 1997. No mention was made of the anti-government protests that have been shaking the metropolis since June.

It was a plausible report: China has maintained a steady level of force in the territory for years, regularly swapping troops in and out. And days earlier, according to an audio recording obtained by Reuters, embattled Hong Kong leader Carrie Lam had told local businesspeople that China had “absolutely no plan” to order the army to put down the demonstrations.

A month on, Asian and Western envoys in Hong Kong say they are certain the late-August deployment was not a rotation at all, but a reinforcement. Seven envoys who spoke to Reuters said they didn’t detect any significant number of existing forces in Hong Kong returning to the mainland in the days before or after the announcement.

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Jim Sinclair’s Commentary

In the last two weeks, this headline is almost a daily event. It has greater implications than most reports are willing to give. If you take a look back, every time we have a systematic financial problem, the first market to start showing it is the repo market. It could be that a cashless society is not the great idea that everybody says it is.

Fed Adds $63.5 Billion To Financial System In Repo Transaction
September 30, 2019

The Federal Reserve Bank of New York added $63.5 billion to the financial system Monday, using the market for repurchase agreements, or repo, to relieve funding pressure in money markets.

Banks asked for $63.5 billion in overnight reserves, all of which the Fed accepted, offering collateral in the form of U.S. Treasury and mortgage securities.

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Jim Sinclair’s Commentary

The administration is backing off of their blanket statement, and that even should be considered last week’s news.

Exclusive: Nasdaq Cracks Down On Ipos Of Small Chinese Companies
September 29, 2019

(Reuters) – Nasdaq Inc (NDAQ.O) is cracking down on initial public offerings (IPOs) of small Chinese companies by tightening restrictions and slowing down their approval, according to regulatory filings, corporate executives and investment bankers.

Nasdaq’s attempt to limit these stock market flotations comes as a growing number of them end up raising most of the capital in their IPO from Chinese sources, rather than from U.S. investors.

The shares of most small Chinese companies trade thinly following their U.S. listing, because most of them stay in the hands of a few insiders. Their low liquidity makes them unattractive to many large institutional investors, to whom Nasdaq is seeking to cater.

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Jim Sinclair’s Commentary

The following is the party line of the operative thought that this is the first time since the Great Recession, and is not occurring because it is simple technical reasons.  You must find the real reason why this is happening.

The New York Fed Chief Is Facing His Biggest Test. Here’s His Response.
September 29, 2019

John C. Williams, president of the Federal Reserve Bank of New York, has spent the past two weeks grappling with the regional bank’s most tumultuous period in years.

Since Sept. 16, a shortage of dollars in an obscure but crucial corner of short-term Wall Street funding, called the repo market, has forced the New York Fed to engage in an ongoing series of market interventions — a first since the Great Recession. The effort is an attempt to keep the central bank’s benchmark rate from accidentally creeping higher.

The situation is the biggest test so far for Mr. Williams — who took the helm of the New York Fed in June 2018 — and one that many market analysts say deserves a less-than-stellar grade.

While officials have succeeded in getting interest rates under control, some investors have criticized the Fed for moving too hesitantly when problems first arose, waiting until rates on repurchase, or repo, agreements had skyrocketed and briefly spilled over, pushing the Fed’s benchmark rate above its intended range.

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Jim Sinclair’s Commentary

The market is driven heavily by computer decisions devoid of fear and greed. As long as momentum continues up, prices continue up.

U.S. Stocks Rise to Cap Volatile Quarter
September 30, 2019

The S&P 500 jumped Monday, on track to enter the fourth quarter with its biggest year-to-date gain in more than two decades.

The broad stock-market index has rallied 19% this year—its best performance in the first three quarters of a year since 1997. The advance comes alongside a rally in both bonds and commodities.

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Jim Sinclair’s Commentary

The scramble for yields is a primary reason for the appreciation of the dollar. It is one of the few currencies, and the only major currency to exist, with a number before the decimal point.

Investors Scramble for Yield as Growth Outlook Darkens
September 30, 2019

This article is part of the Journal’s quarterly markets review, “Investing in a Low-Yield World.”

The world is again running low on yield.

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Jim Sinclair’s Commentary

The entire world is experiencing economic reversal as US figures announce a questionable miracle of a boom of all time.

Beijing Takes Stakes in Private Firms to Keep Them Afloat
September 30, 2019

SHANGHAI—China is snapping up stakes in private companies at a record rate, as the trade war, economic slowdown and credit squeeze heap pressure on entrepreneurs.

The investments mark a reversal after decades in which state-owned enterprises have shrunk in importance, as reflected in measures such as their share of the workforce or asset ownership. Since China’s public-sector companies are typically less efficient or innovative than their private rivals, the shopping spree could lead to a fresh drag on growth.

Private enterprises are in a weaker position because they have comparatively poorer access to cheap bank loans and other types of financing, and have also been squeezed by Beijing’s moves to reduce pollution and overproduction.

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Jim Sinclair’s Commentary

What is not a technology share?

Apple And Merck Drive Wall Street Higher As Trade Worries Abate
September 30, 2019

(Reuters) – U.S. stocks rose on Monday, helped by surges in Apple and Merck & Co as investors set aside worries about the U.S.-China trade war.

Shares of Apple (AAPL.O) rose 2.4% after Chief Executive Officer Tim Cook told a German daily that sales of the company’s newest iPhones were off to a strong start, while JP Morgan raised its forecast for shipment volumes. Apple is struggling to reverse shrinking iPhone sales amid tepid global demand for smartphones.

The S&P 500 technology index .SPLRCT and the health care index .SPXHC both added about 1.3%, leading other sectors.

Sentiment on Wall Street also got a boost after White House trade adviser Peter Navarro dismissed reports that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges as “fake news.”

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Posted by & filed under In The News.

Jim Sinclair’s Commentary

This will cause market upset.

Kurt Volker, Trump’s Envoy For Ukraine, Resigns

September 27, 2019

WASHINGTON — Kurt D. Volker, the State Department’s special envoy for Ukraine who got caught in the middle of the pressure campaign by President Trump and his lawyer, Rudolph W. Giuliani, to find damaging information about Democrats, abruptly resigned his post on Friday.

Mr. Volker, who told Secretary of State Mike Pompeo on Friday that he was stepping down, offered no public explanation, but a person informed about his decision said he concluded that it was impossible to be effective in his assignment given the developments of recent days.

His departure was the first resignation since revelations about Mr. Trump’s efforts to pressure Ukraine’s president to investigate former Vice President Joseph R. Biden Jr. and other Democrats. The disclosures have triggered a full-blown House impeachment inquiry, and House leaders announced on Friday that they planned to interview Mr. Volker in a deposition on Thursday.

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Jim Sinclair’s Commentary

Whatever Trump wants is going to be blocked bringing more discomfort to the marketplace.

U.S. Judge Blocks Trump Rule On Migrant Child Detention
September 27, 2019

LOS ANGELES (Reuters) – A U.S. judge on Friday blocked a Trump administration rule that would have allowed indefinite detention of migrant families, saying it was inconsistent with a decades-old court settlement that governs conditions for migrant children in U.S. custody.

The 1997 settlement agreement, which originated in 1985 with a complaint brought on behalf of 15-year-old Salvadoran immigrant Jenny L. Flores, set standards for humane treatment of children in detention and ordered their prompt release in most cases.

The Trump administration had hoped a new rule issued on Aug. 23 would replace the settlement, which had been modified over the years to prevent the long-term detention of families. The administration had said its rule would allow families to be held in humane conditions while their U.S. immigration court cases were decided.

The judge disagreed.

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Jim Sinclair’s Commentary

Interference by countries in each other’s markets is, in today’s world, an act of war. No one understands the Chinese but the Chinese making their reaction to any serious move as problematic. Play brinkmanship with the Chinese can prove suicidal. Trump delisting Chinese businesses from the market will only result in China doing the same. Accomplishing nothing. In fact, the whole idea of tariff wars accomplishes nothing positive whatsoever.

White House Weighs Blocking Chinese Companies From U.S. Exchanges
September 27, 2019

WASHINGTON — The Trump administration is discussing whether to block Chinese companies from listing shares on American stock exchanges, the latest push to try to sever economic ties between the United States and China, according to people familiar with the deliberations.

The internal discussions are in their early stages and no decision is imminent, these people cautioned.

The talks come as senior officials from both countries are scheduled to resume trade negotiations in Washington early next month. President Trump, who has continued to give mixed signals about the prospect of a trade deal with China, said earlier this week that an agreement could come “sooner than you think.” His decision to delay an increase in tariffs until mid-October and China’s recent purchases of American agricultural products has fueled optimism that the talks could produce an agreement.

But the prospect of further limiting American investment in China underscores the challenge that the two sides will continue to face even as they try to de-escalate a trade war that has shaken the global economy. The administration has already increased scrutiny of foreign investment with a particular eye toward China, including expanding the types of investments that can be subject to a national security review.

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Jim Sinclair’s Commentary

Tariffs are always a tax on a country that levies the tariff.

Wall Street Week Ahead: Data Will Show Damage Of Tariffs, Strong Dollar On U.S. Goods Exporters
September 27, 2019

NEW YORK (Reuters) – It’s no longer a probability, it’s a reality: the escalating U.S.-China trade war and the strengthening dollar appear to be inflicting measurable damage on U.S. goods makers that rely on global markets.

Market participants will get a picture of the extent to which trade tensions and currency have hurt U.S. manufacturers when the Institute for Supply Management (ISM) releases its purchasing managers index (PMI) USPMI=ECI for September on Tuesday.

Its August report showed the manufacturing sector, which accounts for about 12% of the U.S. economy, contracting in for the first time in 3-1/2 years, and more worryingly, its export component hit a more than 10-year low.

“The exporters are at least a half a step or full step closer to the predicted recession,” said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.

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Jim Sinclair’s Commentary

A repo is a short term loan of cash from the central bank to a financial institution. Many excuses have been given for this problem. They range from a new cashless economy to various other commercial means for money. In truth, the need to place as much money as more than $50B per day suggests a financial failure somewhere in the global economy.

The Fed Is Girding For Repo Trouble Monday Even As Market Calms
September 27, 2019

The repo market has calmed down, but the Federal Reserve is gearing up its safeguards seemingly to prevent turmoil from resurfacing on Monday.

Last week’s craziness was not the first time in recent memory that U.S. money markets have shown signs of stress. It’s tended to happen around quarter-end, most notably in late December.

The third quarter ends Monday. So, for the past two days, the New York Fed has run $100 billion overnight repo operations — bigger than the $75 billion daily liquidity injections that began early last week — plus separate 14-day operations. Neither of Friday’s actions were fully subscribed and short-term lending rates are well below the peak seen last week, a sign order has been restored for now.

But on Monday, that larger $100 billion size will be repeated and the overnight operation will run from 7:45 a.m. to 8 a.m. New York time, earlier than prior morning actions. Both signal the Fed is getting ready in case rates spike again.

“I wouldn’t be surprised to see some volatility,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale. “The Fed has provided enough liquidity for now, but there are some large Treasury settlements so you’ll have large pressures.”

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Jim Sinclair’s Commentary

That is a fig leaf amongst many thorns.

British Tanker Docks In Dubai After Detention By Iran
September 28, 2019

DUBAI/STOCKHOLM (Reuters) – A British-flagged tanker that was detained by Iran for 10 weeks, docked in Dubai on Saturday, after a standoff that has stoked tensions along a vital global shipping route for oil.

The Stena Impero, which sailed out of Iranian waters on Friday, was seized by Iran’s Revolutionary Guards on July 19, shortly after British forces detained an Iranian tanker off the territory of Gibraltar. The Iranian ship was released in August.

The Stena Impero docked at Dubai’s Port Rashid, a Reuters photographer reported from the harbor.

Erik Hanell, the chief executive of Sweden’s Stena Bulk, which owns the ship, told Reuters in Stockholm in a text message earlier in the day that the tanker was “finally approaching berth in Dubai.”

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Jim Sinclair’s Commentary

This type of event is predictable in the marketplace where the Federal Reserve is revealing significant problems short-term money market. These two events spoken about most this weekend are not causes, they are the effect of the money market confusion.

After Wework Debacle, IPO Market Slams Brakes On Unprofitable Companies
September 27, 2019

NEW YORK (Reuters) – Companies making their debut on the U.S. stock market are getting a rough welcome, especially if they are losing money, casting a shadow over the calendar for initial public offerings for the rest of the year.

The surprise postponement of the WeWork IPO has underscored how confidence is eroding in the market both for companies looking to raise capital and investors.

A more discerning market for initial public offerings continued to punish Peloton Interactive Inc PTON.O on Friday, a day after it began trading. Shares of the fitness startup closed down 2% at $25.24 and are now off 13% from their IPO price. The company is now trading 15% below its Wednesday IPO price.

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Posted by & filed under In The News.

J. Johnson’s Latest – Ag – Huge Purchases Means Lower Prices!!
September 27, 2019

Great and Wonderful Friday Morning Folks,    

      They just keep beating the metals lower and lower with Gold’s trade now at $1,501.50, down $13.70 after they forced to price down to $1,497.20 with the high starting point at $1,514.40. Silver is down 33.2 cents with the price at $17.715 after it was pushed to $17.62 with the high to beat at $18.065. One would expect the Dollar to be rallied in heavy fashion but it’s not, as the trade will prove, with its value stuck at 98.815, up 5 points after being pushed to 98.955 with the low to beat at 98.79. All of this was done by Algo’s, while we slept, before 5 am pst, the Comex open, and the London close.    

      In Venezuela, Gold is now trading at 14,996.23 Bolivar proving a reduction in price of 117.67 in Bolivar value (here is the current “old” price before they reduced all the zeros = 31,210,215.78 VES). Silver is now trading at 176.93 Bolivar showing a reduction of 2.05 Bolivar (its new “old” price = 366,607.33VES before the zeros were removed). In Argentina, where the zeros haven’t been dropped yet (the Peso used to be tied to the Dollar 1 to 1) shows Gold trading at 85,836.14 Pesos, a loss of 421.78 with Silver now at 1,012.75 Pesos, proving a loss of 8.55 in A-Peso value. In Turkey, Gold’s price is now pegged at 8,496.20 T-Lira, down another 70.62 with Silver losing 1.18 Lira with it price at 100.24.    

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