Posts Categorized: In The News

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Bill Holter’s Commentary

Any idea what this means? Do you really believe your brokerage statement is correct…?

Hong Kong’s Largest Mall Owner Cuts Rents Up To 50%
February 12, 2020

Commenting on the regional impact of the Covid-2019 epidemic, Morgan Stanley writes that Hong Kong’s tourism, trade and domestic consumption could be significantly affected, further aggravating the technical recession the financial hub found itself going into 2020.

HK GDP

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Bill Holter’s Commentary

David Rosenberg “smells a rat”!

David Rosenberg: This Turbocharged Debt Cycle Will End Miserably — It’s Just A Matter Of When
February 7, 2020

It is clear that it would have been a very hard sell a year ago that every single risk-on asset class from equities, to corporate bonds, to commodities would end up rallying as much as they did in 2019.

And so perhaps the message for 2020 is to fade all the optimism since fading the pessimism a year ago paid off very well. The sharp slide in Treasury yields this past year does not exactly comport with the risk-on view that has morphed into the consensus forecast.

Fed policy, the trajectory of GDP growth and global economic fundamentals in general all tell a cautionary tale. Both bonds and stocks can’t be right at this moment in time.

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Bill Holter’s Commentary

…and so it begins.

China Starts Giving ‘Force Majeure’ Slips to Virus-Hit Companies
February 11, 2020

A car-parts supplier became one of the earliest known companies to obtain a “force majeure” certificate in China that may help it avoid penalties for breaching contractual obligations because of the coronavirus outbreak.

The manufacturer, eastern China-based Huida Manufacturing (Huzhou) Co., supplies steering-system components to a plant of Peugeot maker PSA Group in Africa, a Chinese trade body said Tuesday.

The organization, China Council for the Promotion of International Trade, said it issued the certificate on Feb. 2. More companies have since received the document, which is recognized by enterprises, governments, trade associations and customs officials in more than 200 places around the world, CCPIT said.

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Bill Holter’s Commentary

So, copper is worth less now than in 2008? Really? What does that say?

image

Bill Holter’s Commentary

What does this mean?

2019 Worst Year for Air Freight Demand Since 2009
February 5, 2020

Geneva – The International Air Transport Association (IATA) released full-year 2019 data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), fell by 3.3% compared to 2018 while capacity (AFTK) rose by 2.1%. This was the first year of declining freight volumes since 2012, and the weakest performance since the global financial crisis in 2009 (when air freight markets contracted by 9.7%).

In the month of December, cargo volumes contracted 2.7% year-on-year while capacity rose 2.8%.

Air cargo’s performance in 2019 was dampened by weak growth in global trade of just 0.9%. The sector’s underperformance was also due in particular to slowing GDP growth in manufacturing-intensive economies. Softer business and consumer confidence, along with falling export orders, also contributed to air freight struggles.

There are signs that confidence and orders could pick up in 2020. It is too early to say what long-term effects will be seen from the impact of restrictions associated with combatting the coronavirus outbreak.

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Bill Holter’s Commentary

Yes, free and fair markets indeed?

JPMorgan’s Role in Metals Spoofing Is Under U.S. Criminal Probe
February 5, 2020

U.S. authorities that accused six JPMorgan Chase & Co. employees of rigging precious-metals futures are building a criminal case against the bank itself, two people familiar with the situation said.

The previously unreported investigation of the global bank’s parent company, part of a wide-ranging federal clampdown on market manipulation, raises the prospect of criminal charges and significant fines against America’s largest bank.

No formal accusations have been made against JPMorgan. A bank spokeswoman, Jessica Francisco, declined to comment and pointed to company filings from last year disclosing that the Justice Department’s Criminal Division was investigating “trading practices in the…

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Bill Holter’s Commentary

Mr. Macleod proves out Sir Richard Russell’s “INFLATE OR DIE”!

Irrational Fears Of Deflation
January 23, 2020

The benefits of a deflation of prices brought about by a combination of sound money and markets free from government intervention have been demonstrated to be the best economic environment, the denial of which in favour of inflationary financing has led to repeated monetary and systemic failures.

This article explains how this has come about and puts the record on deflation straight. The development of macroeconomic theory had to deny the benefits of a deflation of prices, unbelievably telling us we need higher prices to stimulate our consumption.

Deflation and investment funded by savings is a far better, natural economic environment than the false gods of easy debt and money printing. There can be no return to the stability of gentle price deflation without seismic shifts in economic thinking and government responsibilities.

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Inflate and Die – Stock Collapse And Gold Surge Imminent
January 30, 2020

“Inflate or die” was coined by the legendary and extremely wise Richard Russell of Dow Theory Letters. He understood the necessity, as well as the curse, of permanent central bank money printing already at the beginning of this century. Richard died in 2015 so sadly he didn’t live to see how right he was.

After three decades of massive money printing and credit expansion, “inflate or die” has artificially kept the world economy going. But we are now in the 2020s moving in to the next stage which will be INFLATE AND DIE. Because, as stock and credit bubbles implode and money printing accelerates, the world will soon realise that not only is the freshly printed money worthless but also most of the manufactured money from the last 20 years.

DAVOS – WEF 2020

But before we look at the consequences of inflate and die, last week 117 billionaires just attended a Weather conference in Davos. They were joined by another 2,900 CEOs, political leaders, climate activists and other self-important people. It is quite surprising that so many “important” people get together to talk about the weather. With Swedish Greta (not Garbo) telling everyone “how dare you, the entire eco-system is collapsing, people are dying” etc., not just every Davos VIP but also all major central bankers must now have a green agenda. For example, Lagarde the ECB Chief has made a strategic review of the bank’s purpose and stated that action on climate is a fundamental component of monetary policy. Climate change action will be a “mission critical” priority for the ECB. Would be better if she realised the EU financial system is a mission critical priority rather than getting involved in controlling temperatures.

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Bill Holter’s Commentary

This only makes sense if you have a short circuit going on between your ears…

House to Vote on Bill Forcing Non-Union Members to Pay Union Dues
February 4, 2020

WASHINGTON—The U.S. House of Representatives will vote this week on a sweeping bill backed by organized labor that would reverse so-called right-to-work laws in 27 states and require non-union workers in unionized professions to pay union dues as a condition of employment.

Labor-related issues have been receiving attention lately as Democratic presidential candidates jockeying for support in primary season join striking workers on picket lines.

Democratic lawmakers say the legislation, which is fiercely opposed by business groups like the U.S. Chamber of Commerce, is needed to help workers.

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Bill Holter’s Commentary

One must wonder what the “over/under” would be for the life expectancy of the president?

Is Hillary Clinton Angling To Become Vice President?
February 1, 2020

A number of people in politics, the media and elsewhere are openly speculating that if Democrats wind up with a “brokered convention,” with no strong or viable nominee evident, Hillary Clinton might enter the arena as the “savior” who could unite the delegates and go on to defeat President Donald Trump.

Clinton herself seemed to throw shade at that theory during an interview with Variety at the Sundance Film Festival. When asked about the “urge” to beat Trump, the former Democratic nominee said, “Yeah. I certainly feel the urge because I feel the 2016 election was a really odd time and an odd outcome. And the more we learn, the more that seems to be the case. But I’m going to support the people who are running now and do everything I can to help elect the Democratic nominee.”

Several politically savvy Democrats have told me that “everything” may be a much more plausible and powerful scenario.

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Bill Holter’s Commentary

And California is worried about plastic bags and straws…?

Japan Panel Recommends Ocean Release For Contaminated Fukushima Water
January 31, 2020

TOKYO (Reuters) – A panel of experts advising Japan’s government on a disposal method for radioactive water from the destroyed Fukushima nuclear plant on Friday recommended releasing it into the ocean, a move likely to alarm neighboring countries.

The panel under the industry ministry came to the conclusion after narrowing the choice to either releasing the contaminated water into the Pacific Ocean or letting it evaporate – and opted for the former. Based on past practice it is likely the government will accept the recommendation.

The build-up of contaminated water at Fukushima has been a sticking point in the clean-up, which is likely to last decades, especially as the Olympics are due to be held in Tokyo this summer with some events less than 60 km (35 miles) from the wrecked plant.

Neighboring South Korea has retained a ban on imports of seafood from Japan’s Fukushima region imposed after the nuclear disaster and summoned a senior Japanese embassy official last year to explain how the Fukushima water would be dealt with.

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Bill Holter’s Commentary

A very long but excellent read from Paul Mylchreest. If you truly want to understand the “fractional reserve” basis of the LBMA, this is your primer!

Gold: Open Letter to LBMA Board of Directors
January 29, 2020

[PDF available here]

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Bill Holter’s Commentary

Umm, just a question or two? We’d love to hear their “revenue” plans, or even their plans for breakfast tomorrow? Not trying to be hard hearted, but these people rely on food assistance but want to form a government and make laws? Please pinch me or wake me up, I never saw this coming!

Homeless Community At East Austin Camp Creates Committee ‘For The Homeless, Run By The Homeless’
January 30, 2020

AUSTIN, Texas – The homeless community at a state-sanctioned campground in East Austin is organizing into their own town.

So far, they’ve selected seven members to help bring in donations and put together community events.

The once mostly empty lot off U.S. 183 and Montopolis in East Austin has become home to more than 100 people without another place to go.

“We give everybody a chance. We don’t judge your past history or nothing like that. We give everybody a chance,” said Cori Roberts, the secretary of the committee.

Once referred to as “Camp Abbott” because the governor opened the state-owned land to the homeless population, people there are now calling it something else.

“It’s called ‘Camp R.A.T.T.’ Responsible Adult Transition Town. For the homeless, run by the homeless,” Roberts said.

Like every town, Camp R.A.T.T. now has its own list of leaders.

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Bill Holter’s Commentary

It seems the bond market agrees with this?

Chicago PMI Plunges To Lowest In 4 Years
January 31, 2020

After slumping into year-end, Regional Fed surveys have (surprisingly) exploded higher this month with Richmond and Philly surveys spiking almost by the most on record.

Today’s Chicago PMI was expected to follow suit – though less excitedly – with a modest gain but instead it missed massively, plunging to its lowest since Dec 2015 – printing 42.9 vs 48.9 expectations.

bfm7218

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Jim Sinclair’s Commentary

Being prepared is not entirely for financial reasons.

How Bad Will The Coronavirus Outbreak Get? Here Are 6 Key Factors
January 31, 2020

As the coronavirus outbreak continues to spread across China, a flurry of early research is drawing a clearer picture of how the pathogen behaves and the key factors that will determine whether it can be contained.

How contagious is the virus?

It seems moderately infectious, similar to SARS.

How deadly is the virus?

It’s hard to know yet. But the fatality rate is probably less than 3 percent, much less than SARS.

How long does it take to show symptoms?

Possibly between 2 to 14 days, allowing the illness to go undetected.

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Bill Holter’s Commentary

If you like math, here is some REALLY SCARY math for you!

U.S. National Debt Will Rise to 98% of GDP by 2030, CBO Projects
January 28, 2020

WASHINGTON—The national debt and sustained federal budget deficits will hit the highest levels since World War II over the next decade, the Congressional Budget Office projected on Tuesday, following multiple rounds of tax cuts and continued increases in federal spending.

The government will spend $1 trillion more than it collects in 2020 and deficits will reach or exceed that threshold every year for the foreseeable future. As a share of gross domestic product, the deficit will be at least 4.3% every year through 2030.

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