Posts Categorized: Jim’s Mailbox

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Jim/Bill,

I listened to the interview from yesterday. I’m not sure if you guys have listened to Greg Hunter interview wrap up for last week, but it is a doozy. There was one point I was interested in this last week that was not talked about. There was a 700 point plus rise in the Nikkei in one day and the next day was 200 Point Plus rise.

You both have drilled into us that the stock market moves rapidly to the upside when hyperinflation begins to set in. Did we just witness  signs of that in Japan? Things start in breadcrumbs, and I have not seen that in a very long time, if it all?

Thanks for everything,

Chuck

 

Chuck,

Such an equity market has always been a precursor to a reset.

Jim

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Jim/Bill,

This is only the beginning, in my opinion.

“This is the biggest trade deficit since January 2012.

Perhaps worse still, ex-Petroleum, this was the biggest trade deficit in US history…”

Just wait until the all the oil contracts start going through China’s gold backed Yuan, eliminating the Dollar.

I can’t imagine what will happen to the Dollar with the world no longer required to purchase Dollars to trade goods.

CIGA Wolfgang Rech

Trade Deficit Spikes To 6-Year High Despite Tumbling Dollar
January 5, 2018

Don’t show President Trump this chart…

While the equity markets are exuberant, today’s payrolls data suggests all is not awesome, and the US trade balance print is just terrible.

Despite the relative freefall in the US Dollar, the US trade deficit disappointed expectations, spiking above $50 billion.

This is the biggest trade deficit since January 2012.

Imports rose 2.5% to a record $250.7b on more inbound shipments of consumer goods and industrial supplies.

Exports climbed 2.3% to all-time high of $200.2b, led by increased shipments of automobiles, consumer merchandise and capital goods including commercial aircraft.

As Bloomberg notes, the widening trade gap could be a drag on fourth-quarter economic growth, keeping gross domestic product from advancing at least 3 percent on an annualized basis for a third straight quarter. Net exports added 0.36 percentage point to the 3.2 percent gain in third-quarter GDP.

In November, the unadjusted U.S. merchandise shortfall with China climbed to the highest since September 2015, while the gap with European Union countries was the largest in a year

Perhaps worse still, ex-Petroleum, this was the biggest trade deficit in US history…

More…

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That’s one way to get rid of old emails. Courtesy of JB.

Jim

Fire breaks out at Hillary and Bill Clinton’s compound in Chappaqua
January 3, 2018

NEW CASTLE – A fire broke out today at a building on the Clintons’ property in Chappaqua and was quickly extinguished.

The small fire started in the second-floor ceiling of a facility used by the Secret Service, which is in a detached structure behind the Clintons’ home, the Secret Service said in a statement.

The fire was put out by fire extinguishers, and firefighters inspected the area to ensure it was completely out, the Secret Service said.

The Clintons were not home at the time of the fire, Nick Merrill, a spokesman for Hillary Clinton, tweeted.

The fire was reported about 2:50 p.m. at 15 Old House Lane, where former President Bill Clinton and Hillary Clinton have lived for nearly 20 years after buying it for $1.7 million in 1999.

More…

 

 

Courtesy of GG.

Jim

ALERT: Major US Dollar Warning As Gold Set To Surge Above $1,400!
January 3, 2018

As we kickoff 2018, the US dollar is flashing a major warning as the price of gold is set to surge above $1,400.

U.S. Dollar Under Pressure Again

January 2 (King World News) – The following is from Andrew Adams at Raymond James: The U.S. Dollar was weak for much of 2017 but appeared to be trying to rally late in the year. However, the recent action has returned to being negative and the overall path of least resistance appears to still be on the downside. Support remains in the 91-92 zone on the U.S. Dollar Index, but a drop beneath there would not be a good sign for the U.S. dollar strength.

US Dollar In Danger!

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Jim/Bill,

…we’ll try our best to not get caught again.

JB

Barclays Apologises For Charging Customers DOUBLE When They Use Their Bank Cards
January 3, 2018

Barclays has apologised for charging customers double when they used their bank cards.

The bank said the duplication payments across an undisclosed number of accounts had been caused by a ‘small technical glitch’.

It said the problem had now been fixed and insisted no customer had been left out of pocket.

However frustrated customers said they were ‘worried’ the duplication of deducted payments had happened again.

A similar problem hit the bank in October 2015 and 2016.

Linda Taylor, 31, a social worker from Milton Keynes, told MailOnline: ‘Barclays Bank have once again had a glitch with their system and duplicated payments. They are cagey as to why this has happened. I had over £300 in duplicated payments – totalling £600.

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Heads up from CIGA Dwight. It truly is ALL about DEBT!

Bill

Margin debt continues to provide tailwind for #stocks. ↑ another $19.5bn in Nov. Now ↑ $91.4bn ytd. $SPY $QQQ $IWM

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Courtesy of GG

Jim

Opinion: Bitcoin, Because Of Massive Borrowing, Could Crash The Financial Markets
December 23, 2017

Bitcoin mania is starting to look like a religion.

I say that because both bitcoin BTCUSD, -9.08%  and religion involve faith in the unknowable. Some bitcoin investors believe the cryptocurrency, along with the underlying blockchain technology, will be a vital part of a new, decentralized, post-government society.

I can’t prove that won’t happen — nor can bitcoin evangelists prove it will. Like life after death, they can only say it’s out there beyond the horizon.

The very same capital that backs up stock index, Treasury bond and foreign currency futures also stands behind bitcoin futures.

If you believe in bitcoin paradise, fine. It’s your business … until your faith puts everyone else at risk. As of this month, bitcoin is doing it.

Lenders and leverage

Is bitcoin in a price bubble? I think so.

Asset bubbles usually only hurt the buyers who overpay, but that changes when you add leverage to the equation.

More…

 

Courtesy of JB

Jim

President Trump, Here’s Why The Postal Service Is Charging Amazon ‘So Little’
December 29, 2017

In a Twitter blast this morning, President Trump said, “Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!”

There may well be a political angle to this. Amazon is owned by Jeff Bezos, who also owns the Washington Post. Trump has been highly critical of the media, and singled out the Post for its coverage of his presidency. Almost immediately following the tweet, Amazon’s stock price began to drop.

But for a logistics guy, this is also a teaching moment. First of all, Amazon uses all the major parcel carriers as well as a network of regional carriers. But what Trump appears to be referencing is the increased use of the U.S. Postal Service for zone skipping, also known as direct injection.

In zone skipping, a shipper consolidates many individual packages into a much larger shipment, often full truckload shipments. These packages are then sent en masse from one zone to another. For example, Atlanta is in Zone 2 and Los Angeles is in Zone 8. Shipping directly from Zone 2 to a Zone 8 parcel carrier’s sorting facility can lead to substantial savings for a shipper. But the ability to consolidate for zone skipping depends on whether a shipper has both enough time and enough volume, something most companies lack. Amazon certainly has the volume.

But in an ecommerce world, the lack of time is particularly worth noting. When retailers offer many of the same items at similar prices, the speed of delivery can be the deciding factor. The need for speed is leading to shorter and shorter delivery promises. Amazon Prime members get their packages in two days “free.” If customers want to pay more they can get them even quicker.

Amazon can hit aggressive service expectations because it has its own air cargo network. The company flies goods in bulk on leased Boeing 767s to an air hub in Wilmington, and then deconsolidates the incoming load and reconsolidates a load with packages headed for a particular zone. It can then deliver in bulk, in truckload sized trailers – Amazon has purchased thousands of 53 foot trailers to a USPS sorting facility in that zone.

More…

 

 

 

Jim, while You’re not posting will you converse?

 

I’d like to have discourse with you for the coming

 

Year of reformation.

 

 

Rgds & Merry Christmas/HNY,too.

 

Hk

 

HK,

Post what?

1/ Manipulated markets.

2/False economic numbers.

3/ Lies about everything.

4/ Corruption greater than a banana republics.

5/ Bullet proof prior politicians colluding to neutralize all of the presidents actions.

6/ The continuing swamp.

  1. The DOJ and FBI as arms of politicians.

8.The swamp everywhere.

  1. All news swamp controlled.

My readers know it all. Why repeat it ad nausea? I have chosen just to post present time real news knowing all is lost, knowing there is no cure to this cancer of society.

Ry,

Jim

 

Courtesy of JB

Jim

 

Jim/Bill,

Liquidity is good. It is also bad.

Just a water (liquidity) rehydrates the body, an excess of it drowns you!

That is what’s happening, not only on our markets, but globally.

We are drowning in debt (liquidity).

There is so much money floating all around us that there is a developing lack of supply of investments to go around.   We see the crypto markets evolving to absorb the liquidity, we see the “Kitty cryptos” as well.  Can you say Tulip Mania?

It’s all about cash seeking returns in markets that have overpriced themselves.

“…..an eye-wide-shut orgy of recklessness that truly has no parallel, not even the mania of 1927-1929.”

And the cherry on top of this “sundae” is …… the impending removal of the U.S. Dollar as the world’s reserve currency, thanks to China and Russia’s prescient recognition of the underlying cancer surrounding the West’s fiscal irresponsibility and game playing.

Al Jolson had it right…….

The Greatest Bubble Ever: Why You Better Believe It – Part 1
December 29, 2017

Authored by David Stockman via Contra Corner blog,

During the 40 months after Alan Greenspan’s infamous “irrational exuberance” speech in December 1996, the NASDAQ 100 index rose from 830 to 4585 or by 450%. But the perma-bulls said not to worry: This time is different—-it’s a new age of technology miracles that will change the laws of finance forever.

It wasn’t. The market cracked in April 2000 and did not stop plunging until the NASDAQ 100 index hit 815 in early October 2002. During those heart-stopping 30 months of free-fall, all the gains of the tech boom were wiped out in an 84% collapse of the index. Overall, the market value of household equities sank from $10.0 trillion to $4.8 trillion—-a wipeout from which millions of baby boom households have never recovered.

Likewise, the second Greenspan housing and credit boom generated a similar round trip of bubble inflation and collapse. During the 57 months after the October 2002 bottom, the Russell 2000 (RUT) climbed the proverbial wall-of-worry—-rising from 340 to 850 or by 2.5X.

And this time was also held to be different because, purportedly, the art of central banking had been perfected in what Bernanke was pleased to call the “Great Moderation”. Taking the cue, Wall Street dubbed it the Goldilocks Economy—-meaning a macroeconomic environment so stable, productive and balanced that it would never again be vulnerable to a recessionary contraction and the resulting plunge in corporate profits and stock prices.

Wrong again!

During the 20 months from the July 2007 peak to the March 2009 bottom, the RUT gave it all back. And we mean every bit of it—-as the index bottomed 60% lower at 340. This time the value of household equities plunged by $6 trillion, and still millions more baby-boomers were carried out of the casino on their shields never to return.

More…

Spot on, but first flash crashes that in time do not make full recovery. Then the Hon. Ron Paul is correct. Equities will stumble many time before the end of equity days. Courtesy of JB.

Jim

Ron Paul Warns America’s “On The Verge Of Something Like 1989’s Soviet System Collapse”
December 29, 2017

on Paul does not believe the U.S. will break into separate countries, like the Soviet Union did, but expects changes in the U.S. monetary policy, as well as the crumbling of the country’s “overseas empire.”

The godfather of the Tea Party movement and perhaps the most prominent right-leaning libertarian in America, Ron Paul, believes the economic boom the United States experienced under President Trump could be a “bit of an illusion.”

Mr. Paul sees inequality, inflation, and debt as real threats that could potentially cause a turmoil.

“the country’s feeling a lot better, but it’s all on borrowed money” and that “the whole system’s an illusion” built on corporate, personal, and governmental debt.

“It’s a bubble economy in many many different ways and it’s going to come unglued,”

In a recent interview with the Washington Examiner, Paul said,

“We’re on the verge of something like what happened in ’89 when the Soviet system just collapsed. I’m just hoping our system comes apart as gracefully as the Soviet system.

We have ownership of these countries, but it’s not quite like the Soviets did. I think our stature in the world and our empire will end, and that’s when, hopefully, the doors will be open.”

The crumbling of America’s “overseas empire,” as Mr. Paul calls it, could be a chance for the libertarian movement to captivate the country’s imagination by 2020.

More…

 

Courtesy of GG

Jim

As The Yield Curve Crashes To 10 Year Lows, Trader Shows “How To Put On A Steepener”
December 28, 2017

Yesterday saw the US Treasury yield curve collapse to a fresh cycle low – the flattest curve since Oct 2007 – erasing the hoped-for trend change shift from last week…

And this is occurring as net positioning in the long-end has never been more bullish.

Between that and the effect of Trump’s tax reform plan, The Macro Tourist’s Kevin Muir  lays out his thesis for getting long a steepening trade into the new year and details how to do it…

More…

 

Jim/Bill,

We used to call it point counterpoint, but this is tag team stuff…

JB

 

Jim/Bill,

Here’s an interesting thought regarding the misconceptions of supply in the gold and crypto markets:

If God said to me,

Wolfgang, as of tomorrow morning, I’ll bless you.

You can choose to be the sole owner of all the existing gold in the world

or all the existing crypto currencies in the world.

Which do you want?”

Think about this for a moment.

Additional cryptos can be immediately created, whereas gold can’t.  It can only be slowly mined.

And for that matter, what central bank would back fiat currency with crypto currency?  They don’t do it now.

Whereas gold is still the foundation of central banks.

I’d choose gold, obviously.

CIGA Wolfgang Rech

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Cheers! From CIGA Larry.

Bill

 

The true meaning of socialism and why capitalism wins everytime its tried.

 

Suppose that every day, ten men go out for beer and the bill for all ten

comes to $100… If they paid their bill the way we pay our taxes, it would

go something like this… The first four men (the poorest) would pay

nothing. The fifth would pay $1. The sixth would pay $3. The seventh would

pay $7.. The eighth would pay $12. The ninth would pay $18. The tenth man

(the richest) would pay $59. So, that’s what they decided to do.. The ten

men drank in the bar every day and seemed quite happy with the arrangement,

until one day, the owner threw them a curve ball. “Since you are all such

good customers,” he said, “I’m going to reduce the cost of your daily beer

by $20”. Drinks for the ten men would now cost just $80. The group still

wanted to pay their bill the way we pay our taxes. So the first four men

were unaffected. They would still drink for free. But what about the other

six men ? How could they divide the $20 windfall so that everyone would get

his fair share? They realized that $20 divided by six is $3.33. But if they

subtracted that from every body’s share, then the fifth man and the sixth

man would each end up being paid to drink his beer. So, the bar owner

suggested that it would be fair to reduce each man’s bill by a higher

percentage the poorer he was, to follow the principle of the tax system they

had been using, and he proceeded to work out the amounts he suggested that

each should now pay. And so the fifth man, like the first four, now paid

nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The

seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9

instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22%

saving). The tenth now paid $49 instead of $59 (16% saving). Each of the six

was better off than before. And the first four continued to drink for free.

But, once outside the bar, the men began to compare their savings. “I only

got a dollar out of the $20 saving,” declared the sixth man. He pointed to

the tenth man, “but he got $10!” “Yeah, that’s right,” exclaimed the fifth

man. “I only saved a dollar too. It’s unfair that he got ten times more

benefit than me!” “That’s true!” shouted the seventh man. “Why should he get

$10 back, when I got only $2? The wealthy get all the breaks!” “Wait a

minute,” yelled the first four men in unison, “we didn’t get anything at

all. This new tax system exploits the poor!” The nine men surrounded the

tenth and beat him up. The next night the tenth man didn’t show up for

drinks, so the nine sat down and had their beers without him. But when it

came time to pay the bill, they discovered something important. They didn’t

have enough money between all of them for even half of the bill! And that,

boys and girls, journalists and government ministers, is how our tax system

works. The people who already pay the highest taxes will naturally get the

most benefit from a tax reduction. Tax them too much, attack them for being

wealthy, and they just may not show up anymore. In fact, they might start

drinking overseas, where the atmosphere is somewhat friendlier. David R.

Kamerschen, Ph.D Professor of Economics. For those who understand, no

explanation is needed For those who do not understand, no explanation is

possible.

 

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Jim Sinclair’s Commentary

The latest from John Williams’ http://www.shadowstats.com

– New-Home Sales Reporting-Illusion Reflected Absurd Volatility: Multi-Decade-High Surge of 17.5% in November 2017 Sales Was a Gimmick; Considering Massive Downside Revisions, Recast Sales Boom Contracted by 1.9% (-1.9%);
Headline Detail Still Shy by 47.2% (-47.2%) of Recovering Pre-Recession Peak
– Boosted Heavily by Unstable Seasonal Adjustments, November Existing-Home Sales Jumped 5.6% Month-to-Month, Still Holding Shy by 20.0% (-20.0%) of Recovering Its Pre-Recession Peak
– As Hurricane-Disruptions Work Out of the New Orders System, Real Annual Durable Goods Growth Slowed Sharply, Ex-Volatile Commercial Aircraft
– Real New Orders for Durable Goods Remained Down by 9.7% (-9.7%) from Recovering Its Pre-Recession Peak
– Third Estimate of Real Third-Quarter 2017 GDP Revised to 3.16% (Previously 3.30%), versus 3.06% in Second-Quarter 2017
– Second Estimate of Third-Quarter Gross National Product (GNP) Revised to 3.65% (was 3.47%); Gross Domestic Income (GDI) Revised to 2.03% (was 2.53%)
– Better-Quality Economic Measures Still Show No Full Recovery from the Collapse into 2009 and No Economic Expansion

“No. 928: November Durable Goods Orders, Home Sales and Revised GDP”

www.shadowstats.com