Posts Categorized: Jim’s Mailbox

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Jim,

As I have said in the past hope is not a strategy.

Dave

Pompeo: God May Have Sent Trump To Save Israel From Iran
March 22, 2019

Is an apocalyptic war on Iran by the US and Israel coming, driven by American Evangelical “rapture” theology of end times prophecy? Pompeo’s latest suggestion that God “raised Trump for such a time as this” doesn’t bode well for the region, or at least for those who hope to avoid a WWIII scenario. Apparently, Pompeo truly believes that Trump was sent by God to save Israel, and that the Golan is to be the first US bestowed “gift” bringing the world closer to “end times” fulfillment.

While on his multi-country tour of the Middle East on Thursday, the US secretary of state responded to a question from the Christian Broadcast Network’s Chris Mitchell during a press conference in Jerusalem, who asked, “could it be that President Trump right now has been sort of raised for such a time as this, just like Queen Esther, to help save the Jewish people from the Iranian menace?”

Pompeo responded, “As a Christian, I certainly believe that’s possible” in agreement with the bizarre question. Crucially, this came the same day Trump tweeted his intention for the US to formally recognize full Israeli sovereignty over the Golan Heights. This after Syria previously warned Israel its continued unlawful occupation of the long disputed territory would lead to war.

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Courtesy of JB.

Bill

 

A warning about the world economy.

JB

A Growing List Of Companies From Fedex To BMW Are Warning About The World Economy
March 20, 2019

Corporate giants doing business abroad are painting a dreary picture of the world’s economy.

With an ongoing trade war between the U.S. and China, Brexit uncertainty weighing on Europe and the U.K., and new weakness out of Japan, some business leaders say it’s harder than ever to rake in profits.

This week, top executives at FedEx, BMW, UBS and others described bleak global business conditions while discussing quarterly results. Fitch Ratings also “aggressively” cut its forecast for the year.

The head of UBS was among the latest to blame the world’s backdrop for weaker-than-expected results. CEO Ermotti told a conference in London on Wednesday that it “one of the worst first-quarter environments in recent history,” Reuters reported. The Swiss bank slashed another $300 million from 2019 costs after revenue at its investment bank plunged. Investment banking conditions are among the toughest seen in years, especially outside the U.S., he said.

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The turn churn has turned.

JB

Yield Curve Inverts For The First Time Since 2007: Recession Countdown Begins
March 22, 2019

Update: The most prescient recession indicator the market just inverted for the first time since 2007.

 

 

 

 

 

 

 

 

 

Don’t believe us? Here is Larry Kudlow last summer explaining that everyone freaking out about the 2s10s spread is silly, they focus on the 3-month to 10-year spread that has preceded every recession in the last 50 years (with few if any false positives)… (fwd to 4:20)

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Jim/Bill,

The real reason Powell succumbed to easing, leading to an inverted yield curve?

“Another month, another frightening jump in the US budget deficit. And this time it was a record.”

Gotta keep those rates low, else they kill us!

CIGA Wolfgang Rech

US Budget Deficit Hits A Record $234 Billion As Interest On Debt Soars
March 22, 2019

Another month, another frightening jump in the US budget deficit. And this time it was a record.

According to the latest Treasury data, the US budget surplus in February – traditionally the worst month of the year due to tax refunds – was a whopping $234 billion, missing the $227 billion deficit expected, and well worse than the $214 billion deficit recorded last February. And even though there may have been one-time tax refund and government shutdown factors at play, the February deficit was also the biggest budget deficit on record.

 

 

 

 

 

 

 

 

 

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Jim/Bill,

I always made a decent amount of small pocket change trading put and call options on market inflection points.

Then suddenly, everything went to hell in a handbasket.

All my academic and professional trading knowledge could be tossed out the window.

There is no possible way anyone could utilize fundamental, technical, and macro events to trade.

Not with the advent of algorithms for machine trading (equities are the best example).

Not when the Fed steps in to foil economic laws (precious metals are the best example).

But as the article states, it will come home to roost some day.

One thing is certain, markets have a way of remaining in dreaded doldrums for decades. I’ve seen this in the 60’s.

I’ve seen grown men sitting on the curbside, crying. They saved money for years and invested. Then out of the blue lost everything they had worked for. “Never Again” was the mantra I kept hearing.

Indeed, it a decade or more before interest in stocks resumed.

But of course, by a new crowd. The old timers never returned.

It will take a very loooong time, a generation or more perhaps, until the markets regain popularity again.

People had better brace themselves for a major correction, a reversion to mean if you will, that will exceed the massive and unprecedented Fed stimulated rally of the past decade. Pain never shows its face until it’s too late.

The 2000 and 2008 collapse was just a teaser.

Patience is not a trait the new generation possesses.

Their eagerness will get many into financial trouble and decimate their lives. The illusion of “paper prosperity” will disappear in the blink of an eye.

 

 

 

 

 

 

Be ever vigilant and not fall asleep as the wheel, thinking the Fed will ALWAYS have your back. Even they have their limitations.

Rest assured, although markets can be manipulated, they eventually succumb to the laws of physics. I say physics in lieu of economics, as the former has become nothing more than alchemy in modern times; a charlatan’s game.

Be on your toes!

CIGA Wolfgang Rech

Why The Fed Keeps Propping Up The Market
March 21, 2019

Authored by Jesse Colombo via RealInvestmentAdvice.com,

The bull market of the past decade since the Great Recession has been an unusual one: despite all of the economic damage that occurred during the global financial crisis and rising risks (including global debt rising by $75 trillion), it has been the longest bull market in history. The explanation for this paradox is simple: it’s not an organic bull marketbecause the Fed and other central banks keep stepping in to prop up the market every time it stumbles. Though the Fed has two official mandates (maintaining stable consumer prices and maximizing employment), it has taken on the unofficial third mandate of supporting and boosting the stock market since the Great Recession.

The chart below, which was inspired by market strategist Sven Henrich, shows how the Fed or other central banks have stepped in with more monetary stimulus (quantitative easing, promises to keep interest rates low, etc.) every time the S&P 500 has stumbled over the past decade:

 

 

 

 

 

 

 

 

 

 

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Jim,

We told listeners weeks ago, countries would do what was in their own best interests.

Dave

Italy Joining China’s Silk Road Shows EU Maximizes Its Own Interests Over US Wishes – Former FM
March 21, 2019

Italy’s desire to build trade ties with China isn’t a move against the US, but an effort to “maximise” its own interests, Italy’s former Foreign Minister Franco Frattini told RT, ahead of Chinese President Xi Jinping’s Rome visit.

Italy is expected to sign a non-binding memorandum in support of China’s Belt and Road global trade and infrastructure network, dubbed the New Silk Road, during Xi’s visit, and has signalled its intention to play a major role in the grand plan, despite warnings about the project from Washington.

The move will make Italy the first G7 country to back the initiative, which aims to link China by sea and land with the Middle East, Europe and Africa. Rome is hoping that its involvement can help revive the Italian economy by providing greater access to the Chinese market.

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Jim,

The debt will never be re-paid.

Dave

Japan’s Debt Passes 250% Of GDP
March 17, 2019

anta Claus territory.” That is how Charles Gave of Gavekal Research views renewed debate about how a concept known as “Modern Monetary Theory” can save capitalism.

There’s nothing modern, of course, about the idea that a government can borrow with abandon in its own currency, unconstrained by deficits. It’s not just that its origins can be traced back 100 years – some argue 1,000. It’s that Japan has been toying with MMT for two decades now.

In 1999, the Bank of Japan became the first major authority in modern history to drive interest rates down to zero. A couple of years later, it pioneered the quantitative-easing that peers from Washington to Frankfurt would eventually adopt.

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Jim,

This article is from 2012 regarding Basel III over 6 years ago.

Dave

Basel III Brings Gold Back
December 5, 2012

. . .

Why the turnaround, and at prices much higher than those at which the central banks sold? Because the rules have changed: The Basel Committee on Banking, the body that sets the standards followed by the industrialized world’s central banks (and the commercial banks they oversee), has reclassified gold bullion as a “tier one asset.” According to the Basel Committee’s new rule, known as “Basel III,” as of the New Year, gold will be counted at 100 percent of its market value when a bank’s assets are audited. Moreover, under Basel III, a bank’s tier one assets must rise from 4 percent to 6 percent of its total assets. This means that many banks are likely to replace substantial portions of their mortgage-backed securities and bond portfolios with gold.

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Jim,

As I have said previously, is the wall to keep US citizens in or immigrants out!?

Dave

Worldwide Effort To Restrict Everyone’s Right To Travel Is Close To A Reality
February 14, 2019

According to a recently published white paper there is a worldwide effort to restrict the right to travel of everyone. And you will not believe how the U.N. is involved.

A recent article at PapersPlease.org warns that the Organization for Security and Co-operation in Europe (OSCE) wants to check every airline passenger’s background and send airlines an “Authority to Carry” before a passenger is allowed to board a plane.

 

 

 

 

 

 

 

 

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Jim,

This is written by a man who has been there.

Dave

Empire of Absurdity: Recycled Neocons, Recycled Enemies
March 19, 2019

There are times when I wish that the United States would just drop the charade and declare itself a global empire. As a veteran of two imperial wars, a witness to the dark underside of America’s empire-denial, I’ve grown tired of the equivocation and denials from senior policymakers. The U.S. can’t be an empire, we’re told, because – unlike the Brits and Romans – America doesn’t annex territories outright, and our school children don’t color its colonies in red-white-and-blue on cute educational maps.

But this distinction, at root, is rather superficial. Conquest, colonization, and annexation are so 19th century – Washington has moved beyond the overt and engages in the (not-so) subtle modern form of imperialism. America’s empire over the last two decades – under Democrats and Republicans – has used a range of tools: economic, military, political, to topple regimes, instigate coups, and starve “enemy” civilians. Heck, it didn’t even start with 9/11 – bullying foreigners and overturning uncooperative regimes is as American as apple pie.

Still, observing post-9/11, post-Iraq/Afghanistan defeat, Washington play imperialism these days is tragicomically absurd. The emperor has no clothes, folks. Sure, America (for a few more fleeting years) boasts the world’s dominant economy, sure its dotted the globe with a few hundred military bases, and sure it’s military still outspends the next seven competitors combined. Nonetheless, what’s remarkable, what constitutes the real story of 2019, is this: the US empire can’t seem to accomplish anything anymore, can’t seem to bend anybody to its will. It’s almost sad to watch. America, the big-hulking has-been on the block, still struts its stuff, but most of the world simply ignores it.

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Jim,

Our veterans are speaking out.

Dave

Veterans Call on U.S. Troops to Resist Illegal Orders to Invade Venezuela
March 19, 2019

By Veterans For Peace (VFP)

“Information Clearing House” – Veterans For Peace (VFP) calls on all members of the U.S. military to refuse illegal orders to intervene in Venezuela. Furthermore, VFP urges all U.S. military leaders to inform the president that they will order their units to stand down from preparations to invade Venezuela. 

President Donald Trump has called on Venezuelan soldiers to disobey orders and join coup perpetrators headed by U.S.-backed opposition leader, Juan Guaidó.  If they do not do this, President Trump threatened: “You will find no safe harbor, no easy exit and no way out.  You will lose everything.”

Veterans For Peace President, Gerry Condon states, “While President Trump speaks of supporting democracy in Venezuela and Latin America, the real purpose of the U.S. assault on the Venezuelan government is to fully open the vast Venezuelan oil reserves to U.S. and other Western oil corporations as well as to destroy progressive governments in Latin America that put their own peoples’ needs above the profits of foreign corporations.”

Illegal, immoral and irresponsible U.S. actions, including “sanctions” (economic war) have already taken a great toll on the people Venezuela.  Nonetheless, the vast majority of Venezuelan people and military are standing firm against foreign intervention.

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Jim/Bill,

Inversion happening before your eyes!

After our manufacturing sector got sucker punched, it’s now the banks’ turn.

With spending out of control, debt at unimaginable levels, and a tanking economy, is there any hope to resuscitate the victim?

 

 

 

 

 

CIGA Wolfgang Rech

Curve Crushed: 2Y, 3Y And 5Y Treasury Yields Plummet Below The Fed Funds Rate
March 20, 2019

Some were convinced there was no way Powell could surprise markets dovishly. They were wrong.

And to get a sense of just how dovish the Fed’s statement was, look no further than the yield curve where everything to the left of the 7Y Treasury (and even that is in danger), is now inverted to the effective Fed Funds rate (2.40%), with 2Y and 3Y yields tumbling to 2.326%, and 5Y 2.3858%.

 

 

 

 

 

 

 

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Courtesy of JB.

Jim

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jim/Bill,

What a shit show our country has become.

The Boeing affair was all over Bloomberg Radio this morning.

“In recent years, the FAA has shifted more authority over the approval of new aircraft to the manufacturer itself, even allowing Boeing to choose many of the personnel who oversee tests and vouch for safety. Just in the past few months, Congress expanded the outsourcing arrangement even further.”

The President doesn’t rule.

Congress doesn’t rule.

The people don’t rule.

It’s the manipulators and profiteers in the financial and corporate arenas that rule.

What next?

-Big Pharma approving its own new drugs?

-Auto companies monitoring their own emission and safety standards?

-We already know precious metals, stocks, bonds, government economic statistics are all controlled and manipulated.

-Our minds have already been taken over and controlled by a soiled media.

These have become a dangerous set of precedents!

The people are being led to slaughter for the almighty “buck”.

CIGA Wolfgang Rech

Boeing Drops as Role in Vetting Its Own Jets Comes Under Fire
March 18, 2019

(Bloomberg) — Boeing Co. tumbled early Monday on heightened scrutiny by regulators and prosecutors over whether the approval process for the company’s 737 Max jetliner was flawed.

A person familiar with the matter on Sunday said that the U.S. Transportation Department’s Inspector General was examining the plane’s design certification before the second of two deadly crashes of the almost brand-new aircraft.

Separately, the Wall Street Journal reported that a grand jury in Washington, D.C., on March 11 issued a subpoena to at least one person involved in the development process of the Max. And a Seattle Times investigation found that U.S. regulators delegated much of the plane’s safety assessment to Boeing and that the company in turn delivered an analysis with crucial flaws.

Boeing dropped 2.8 percent to $368.53 before the start of regular trading Monday in New York, well below any closing price since the deadly crash of Ethiopian Airlines Flight 302 on March 10. Ethiopia’s transport minister said Sunday that flight-data recorders showed “clear similarities” between the crashes of that plane and Lion Air Flight 610 last October.

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Kevin,

The manipulators of paper gold can temporarily do anything. The operative word there in being temporarily.

The equation is gold versus run away insane debt levels, plus now we see QE in its true GLOBAL form as to INFINITY.

YOU NEED TO MAKE YOUR DECISION AND NOT OVER-INTELLECTUALIZE IT.

Do you really believe that fiat paper will maintain, and therefore store the value of what you have? Sorry, it simply will not.

As such GOLD is your savings account.

End of story!

Jim

Jim,

With this capital adjustment coming for gold on March 29, I have been wondering if we will see another April 2013 swoon or whether. as everyone is hoping. that maybe a floor will be established on the gold market. I fear the floor may be manipulated much lower on the “financial” instrument that they call gold.

What do you think?

The BIS ruling states that Central banks and commercial banks will necessarily value their “financial” and real gold at market price. Is this just a way to increase the collateral value of paper or physical gold even as market value declines?

Unless the March 29 ruling has an immediate effect on auditing of physical gold held by CB’s, I fear it is another scheme to push gold prices lower. And so far I am not hearing anything with regards to a global gold audit of CB’s. And China continues to sleep.

As Ronan Manly pointed out, the reason the Fed values its gold on its asset side at only $42 per ounce is because the gold is valued at book value by the Treasury and the Fed’s gold is actually only gold certificates valued at no more than the statutory price of their issuance in 1934 which matches the book value of the Treasury gold. Will the Treasury revalue its physical gold at FRBNY and Fort Knox? Will the Treasury allow the Fed’s gold certificates to be valued at market? What are the implications if they don’t?

https://www.federalreserve.gov/faqs/does-the-federal-reserve-own-or-hold-gold.htm
Article 21-
https://www.bis.org/about/statutes-en.pdf

https://www.bis.org/bcbs/publ/d457.pdf

Instruments comprise financial instruments, foreign exchange (FX), and commodities. A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments include primary financial instruments (or cash instruments) and derivative financial instruments. A financial asset is any asset that is cash, the right to receive cash or another financial asset or a commodity, or an equity instrument. A financial liability is the contractual obligation to deliver cash or another financial asset or a commodity. Commodities also include non-tangible (ie non-physical) goods such as electric power.

Kevin

 

Jay Taylor refers to you here Jim.

Bill

Jay Taylor: Under “Basel III” Rules, Gold Becomes Money!
March 17, 2019

Excepted from Jay Taylor’s latest newsletter,

. . .

This also raises the question with regard to how much gold the U.S. actually holds as opposed to what it claims to hold. James Sinclair has always argued that the only way the world can overcome the debt that is strangling the global economy is to remonetize gold on the balance sheets of central banks at a price in many thousands of dollars higher. This would mean a major change in the global monetary system away from the dollar, as China has been pushing for the last decade or so.

If banks own and possess gold bullion, they can use that asset as equity and thus this will enable them to print more money. It may be no coincidence that as March 29th has been approaching banks around the world have been buying huge amounts of physical gold and taking delivery. For the first time in 50 years, central banks bought over 640 tons of gold bars last year, almost twice as much as in 2017 and the highest level raised since 1971, when President Nixon closed the gold window and forced the world onto a floating rate currency system.

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Holter vacation in London.

Jim

 

I love Judicial Watch…

JB

On Watch: How Donald Trump was Targeted by the FBI
March 13, 2019

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Jim,

You, Bill and I were all in agreement that Tariffs and Trade Wars would not be good policy.  Too bad the administration did not listen-in to our Saturday talks.

Dave

Cohn Slams Former White House Colleagues: “I Don’t Want To Live In Chaos”
March 14, 2019

Former White House chief economic advisor Gary Cohn, who quit in a huff over Trump’s tariffs on steel and aluminum, has lashed out at some of his former colleagues in a Wednesday interview with Freakonomics Radio.

Cohn slammed National Trade Council director Peter Navarro and Commerce Secretary Wilbur Ross for leading the country into an unnecessary trade war.

“Tariffs don’t work. If anything, they hurt the economy because if you’re a typical American worker, you have a finite amount of income to spend,” the former Goldman Sachs #2 executive told host Stephen J. Dubner. “If you have to spend more on the necessity products that you need to live, you have less to spend on the services that you want to buy.”

When interviewer Stephen J. Dubner suggests that all other economists except for one — Navarro — would agree on that point, Cohn said, “There’s only one in the world. That we know of.” –CNBC

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Jim,

This article is long but I hope every one takes the time to read it and then they will understand why alternative media like “JSMineset” is so important.

Dave

The CIA and the Media: 50 Facts the World Needs to Know
January 30, 2018

This article  by Professor James Tracy first published in August 2015 is of particular relevance in relation to the “fake news” campaign directed against the alternative and independent media.

In a bitter irony, the media coverup of  the CIA’s covert support to Al Qaeda and the ISIS is instrumented by the CIA which also oversees the mainstream media.

Since the end of World War Two the Central Intelligence Agency has been a major force in US and foreign news media, exerting considerable influence over what the public sees, hears and reads on a regular basis. CIA publicists and journalists alike will assert they have few, if any, relationships, yet the seldom acknowledged history of their intimate collaboration indicates a far different story–indeed, one that media historians are reluctant to examine.

When seriously practiced, the journalistic profession involves gathering information concerning individuals, locales, events, and issues. In theory such information informs people about their world, thereby strengthening “democracy.” This is exactly the reason why news organizations and individual journalists are tapped as assets by intelligence agencies and, as the experiences of German journalist Udo Ulfkotte (entry 47 below) suggest, this practice is at least as widespread today as it was at the height of the Cold War.

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Jim,

Another Government agency that may not have public safety first and foremost on its mind.

Dave

NASA Warns Hurricane Forecasts May Revert To 1970 Accuracy Due To 5G Conflict
March 14, 2019

Authored by Mike Shedlock via MishTalk

. . .

The FCC’s Brian Hart said the plan to auction this spectrum has “been on the books since 2007” and that “it is therefore perplexing to be asked to postpone this auction the day before it is going to start.”

The request was made last week, not the day before. But yes, that is the last minute in a manner of speaking.

Regardless, what the hell is the priority here?

If there is a strong chance public safety is at risk, as seems the case, it is idiotic to suggest it is too late to make a change.

The FCC should hold off on auctioning this portion of the spectrum or at least widen the spread between to reduce chance of interference.

“Sorry, it’s too late to be concerned about lives” seems to be the message.

I smell lawsuits.

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Jim,

In my opinion, the sad answer to the question would be no.

Dave

The College Admissions Scandal Is A Perfect Example Of How Deeply Corrupt America Has Become
March 14, 2019

Is there anything left in this country that has not been deeply tainted by corruption?

By now you have probably heard that dozens of people have been arrested for participating in a multi-million dollar college admissions scam.  Enormous amounts of money were paid out in order to ensure that children from very wealthy families were able to get into top schools such as Yale University, Stanford University, the University of Texas and the University of Southern California. And as The Economic Collapse blog’s Michael Snyder writes, we should certainly be disgusted by these revelations, but we shouldn’t be surprised.  Such corruption happens every single day on every single level of society in America.  At this point our nation is so far gone that it is shocking when you run into someone that actually still has some integrity.

The “mastermind” behind this college admissions scam was a con man named William Rick Singer.  He had been successfully getting the kids of wealthy people into top colleges for years using “side doors”, and he probably thought that he would never get caught.

But he did.

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Jim,

Looks like the revolving door between Big Business and Government.

Dave

Trump’s Defense Secretary Faces Ethics Complaint Over Boeing Promotion
March 13, 2019

A government watchdog group has asked the Department of Defense Inspector General to investigate whether Acting Secretary of Defense Patrick Shanahan violated ethics rules by promoting Boeing weapons systems while serving as a government official.

Shanahan, 56, worked at Boeing for more than 30 years prior to being tapped by President Donald Trump to serve as deputy secretary of defense under former Defense Secretary Jim Mattis. When Mattis submitted his resignation in December, Shanahan was named by Trump as acting defense secretary.

Since coming to the Pentagon, Shanahan has faced criticism over reports that he has touted Boeing’s line of aircraft over rival Lockheed Martin. In the fiscal year 2020 budget released Tuesday, the Air Force is set to purchase up to 80 F-15Xs over the next five years — a system, made by Boeing, that the Air Force has said it does not want.

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Jim,

What come first, the safety of the flying public or propping up the stock market with share buy backs?

Dave

Cancellation Chaos: $600 Billion In Boeing 737 Max Orders At Risk
March 14, 2019

New evidence shows that the Boeing Co. 737 MAX which crashed in Ethiopia on Sunday may have experienced similar technical difficulties as the 737 MAX that crashed off Indonesia last year. The Federal Aviation Authority (FAA) cited similarities with in-flight data of both planes when it spoke to global regulators about grounding the jet. With the company facing a pr disaster and loss of confidence with global airline carriers, there could be more than $600 billion in orders at risk of cancellation, reported Bloomberg.

VietJet Aviation JSC doubled its 737 MAX order last month to $25 billion, now the Vietnamese low-cost airliner is having second thoughts. Kenya Airways Plc is reviewing its contracts to purchase billions of dollars of the MAX and could even switch to Airbus SE’s rival A320. Russia’s Utair Aviation PJSC is expected to take delivery of 30 MAXs but wants to seek guarantees the planes are not defective.

 

 

 

 

 

 

 

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