Posts Categorized: Jim’s Mailbox

Posted by & filed under Jim's Mailbox.

Dear Jim,

The title is wrong, it should read “25% of millennials are pussies and have a very rude awakening in store”.

There, fixed it…

Best,

Bill

Dear Bill,

The real number is far higher than 25% and we are to blame. I never dreamed when sending my girls to college they would return as snowflakes. I had no idea safe rooms, teddy bears and vanilla ice cream were included when I made tuition payments?  Ry,  Jim

25% Of Millennials Claim They Have PTSD From 2016 Election, Study Says
October 27, 2018

Authored by Emily Zanotti via DailyWire.com,

Triggered…

A new psychological study from San Francisco State University claims that a full quarter of millennials are suffering from bouts of post traumatic stress disorder, or PTSD, because of the 2016 elections.

The study is by no means comprehensive – the research pool was limited to 769 students studying psychology at Arizona State University – but of those millennials chosen for the test, 25% reported experiencing “clinically significant” levels of stress, along with other symptoms of PTSD.

Students were evaluated using an “Impact of Event” scale, which measures stress levels at various times following a major traumatic event, typically a tragedy or a personal illness or injury. The results, the Washington Examiner reports, “indicated that students’ average stress score was similar to those of witnesses of a mass shooting seven months after the incident.”

    “The scale is used to gauge the extent to which individuals have been impacted by an event in such a way that it might lead to diagnosable post-traumatic stress disorder,” lead researcher, Melissa Hagan said in a statement released alongside the study.

More…

Posted by & filed under Jim's Mailbox.

Jim/Bill,

Robert Kiyosaki, famed author of the New York Times bestseller “Rich Dad, Poor Dad,” has an interesting point of view.

He believes that fiat currencies, and even crypto currencies, will not be here in the future.  We all naturally believe this.

However, Blockchain will be around and it will target the Dollar and all other fiat currencies for destruction.

“On cryptocurrencies, the best-selling author said that while bitcoin may not last forever, blockchain could still be around.

“Blockchain is going after the dollar, fiat currency. The real threat to fiat currency is blockchain,” he said.”

That’s music to Gold’s ears!

CIGA Wolfgang Rech

Don’t Call “Rich Dad’s” Kiyosaki A Gold Investor – It’s More Than That
October 26, 2018

(RERUN) – Robert Kiyosaki, famed author of the New York Times bestseller “Rich Dad, Poor Dad,” does not consider gold an “investment,” but rather, the only form of currency he considers “real.”

His new book, “FAKE: Fake Money, Fake Teachers, Fake Assets,” due for release in April, 2019, documents the difference between real and fake assets, and he likens gold to “God’s money,” a tribute to the yellow metal’s origins as a naturally occurring element.

“Long after you and I are gone and all that’s left is God, I promise you, the dollar will not be here, the yen will not be here, the euro will not be here…I doubt crypto will be here if everything else is gone, but anyway, I’d rather have God’s money than man’s money,” Kiyosaki told Kitco News.

Kiyosaki noted that there is no scenario in which he would abandon his holdings on gold.

More…

 

How many times have we discussed just this?

Jim

Jim/Bill,

Something everyone should think about….now!

I’ll bet my bottom dollar most people are totally unaware of the correlation of actual money in circulation and the amount of debt issued.

“We have often said that our current economic environment is much more sensitive to changes in interest rates because of the growth in debt outstanding since the financial crisis and the recent emergence from the ultra-low interest rate period that crisis produced.”

Makes sense.  If I’m not mistaken, then this is no different than an equity investor who buys stocks on margin.  He becomes much more sensitive (at risk) if the stocks fall in price.

“Furthermore, because of the difference between the amount of debt outstanding and the actual currency in the economic system, most of that debt represents leverage.”

Now this is the real killer.  If there’s only X amount of cash in the system, then all borrowings beyond that level of cash represent leverage (margin)!

That is scary.

Wolfgang Rech

Higher Rates Are Crushing Investors
October 26, 2018

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

There is an old saying that proclaims, “it’s not the size of the ship, but the motion of the ocean.” Since this is a family-friendly publication, we will leave it at that. However, the saying has a connotation that is pertinent to the bond market today. Much of the media’s focus on the recent surge in yields has been on the absolute increase in numerical terms. The increase in rates and yields, while important, fails to consider the bigger forces that can inflict pain on bond holders, or sink the ship. When losses accumulate and fear of further losses mount, volatility and other instabilities can arise in the bond market and bleed to other markets, as we are now beginning to see in the equity markets.

Since 1983, fixed-income investors have been able to put their portfolios on autopilot, clip coupons and watch prices rise and yields steadily fall. Despite a few bumps on this long path, which we will detail, yields, have declined gradually from the mid-teens to the low single digits.

In this piece, we discuss the effect that higher yields are having on debt investors today and compare it to prior temporary increases in yield. It is from the view of debt investors that we can better appreciate that the “motion” is much bigger today than years past.

More…

Posted by & filed under Jim's Mailbox.

JB,

It never occurred to either of these two knuckleheads that what they were doing…is in fact illegal!

Best,

Bill

Grassley Lays Down The Law, Formally Refers Avenatti And Swetnick To Justice Dept For Criminal Charges
October 25, 2018

Senate Judiciary Committee chairman Sen. Chuck Grassley has formally referred creepy porn lawyer Michael Avenatti and his client Julie Swetnick to the Justice Department for a criminal investigation on the grounds they had made false statements about Supreme Court Justice Brett Kavanaugh.

During the justice’s confirmation hearings in late September and early October, the two trotted out what appeared at the time to be a wild conspiracy theory accusing him of having once participated in “gang rapes” while in high school decades ago. Based on information uncovered since then by the committee, Grassley is now confident this was indeed a false rape accusation.

In a letter addressed to Attorney General Jeff Sessions and FBI Director Christopher Wray, the committee chairman noted that Swetnick has a history of issuing false rape accusations and provided testimony from an ex-boyfriend as evidence.

More…

 

Courtesy of Dave.

Jim

“We Will Be At War With China In 15 Years” Predicts Former Commander Of U.S. Army In Europe
October 26, 2018

Days after U.S. warships made a provocative passage through the Taiwan Strait on Monday, further making already strained tensions between the Washington and Beijing  — currently in the midst of a trade war — even hotter, the former top commander of the US Army in Europe has predicted the United States and China will likely be at war in 15 years.

Retired Lt. Gen. Ben Hodges made the bombshell and alarming comments at a Warsaw security forum on Wednesday where he urged European allies to do more in preparing their own defenses against Russia while Americans focus more on the Pacific.

Gen. Hodges said, according to the Military Times:

    I think in 15 years — it’s not inevitable, but it is a very strong likelihood — that we will be at war with China. The United States does not have the capacity to do everything it has to do in Europe and in the Pacific to deal with the Chinese threat.

This statement is hugely remarkable in that it signifies the thesis has just left the domain of academic international relations theoreticians and has now become a guiding assumption of military commanders with years of experience on the ground.

More…

 

Bill/Dave,

Just now spotted the Reuters article. Been waiting on this for a long time. Nice timing too with G-20. Speaks for itself in the reserve status and seignorage of the US dollar. But also in the concerted effort to keep the US trade war from only affecting those that the US wants it to affect.

Albeit $30B is less than the $100B the US has with BOJ, $30B is a fairly large first step. And China swaps at about 3.35T RMB or about $500B equivalent is 65% greater than the Fed’s swap agreements total.

CIGA Kevin

China-Japan Sign Three-Year FX Swap Deal To Strengthen Financial Stability, Business Activity
October 25, 2018

TOKYO (Reuters) – Japan and China on Friday signed a currency swap arrangement of up to $30 billion – the largest such bilateral deal concluded by Tokyo – to strengthen financial stability and spur business activity in both countries, the Bank of Japan said.

The arrangement, which takes effect on Friday and lasts until Oct. 25, 2021, will allow the exchange of local currencies between the two central banks for up to 200 billion yuan or 3.4 trillion yen ($30 billion), the BOJ said.

Earlier in the day, China and Japan signed a broad range of agreements on strengthening bilateral ties, pledging to step up cooperation in areas from finance and trade to innovation and securities listings.

More…

Posted by & filed under Jim's Mailbox.

Jim/Bill,

They’re send a Batallion 800 men against 10,000 immigrants and growing!

They need a Division 10,000 to 15,000 men.

That war is lost from the get go.

CIGA Wolfgang Rech

US Deploys 800 Troops To Southern Border As ‘Migrant Caravan’ Approaches: CNN
October 25, 2018

As Mexican authorities do little to stop the ‘migrant caravan’ from cross southern Mexico, Defense Secretary James Mattis is reportedly preparing to order an additional 800 troops to the southern border as soon as Thursday, CNN reported.

The order comes after President Trump threatened earlier this month to send troops to the border to stop the migrant caravan, which has swelled to more than 10,000, according to some reports.

Final details are reportedly being worked out, including where the troops will come from and where they will be stationed. For example, it’s unclear how many – if any – of the troops will be National Guard. According to CNN, they will mostly provide support services like building tents and running supplies for border patrol agents, who are still tasked with subduing illegal immigrants.

More…

 

Courtesy of JB.

Jim

 

Jim/Bill,

No mention of gold, but we all know damn well that when the Dollar does crash, there will be an automatic skyrocketing of gold prices

According to Schiff, the US national currency is set to meet with the worst losses along with the American standard of living.

“So, what you’ve got to do is get out of U.S. dollar assets. The dollar is going to be the biggest casualty along with the American standard of living,” he said,

Then there’s a matter of the deficit weighing heavily on the future of the Dollar:

“If the government is collecting less revenue, then the deficits are getting bigger and so the government has to borrow even more money, and that becomes an even bigger problem,” he said.

And we Emerging Markets blaming us for their travails, but a reversal appears to be in sight:

“…adding that foreign stock markets, especially emerging markets, currently depressed by the strong dollar would see a strong rise. “They are going to see a boom when the dollar weakens,” Schiff said.

It just seems like the whole world is waiting for the Dollar to get its upcommance.

CIGA Wolfgang Rech

Peter Schiff: The Dollar And Americans’ Standard Of Living Will Be “Biggest Casualties”
October 25, 2018

After the dramatic early drop, U.S. stocks recovered but still finished lower after a wild day on Wall Street. By the closing bell, the Dow was down 126 points, or 0.5 percent, recovering most of its early losses. The Nasdaq closed down 0.4 percent, while the S&P 500 shed 15 points, finishing 0.6 percent lower. Schiff urged people to be prepared for not only an economic crisis but a political crisis as well with the current administration likely to take the blame.

According to Schiff, the US national currency is set to meet with the worst losses along with the American standard of living. Although the Trump administration is to blame for the trade war that is already wreaking havoc on American’s wallets, Schiff says thepolitical crisis about to follow will be much worse.

    “So, what you’ve got to do is get out of U.S. dollar assets. The dollar is going to be the biggest casualty along with the American standard of living,” he said, adding that foreign stock markets, especially emerging markets, currently depressed by the strong dollar would see a strong rise. “They are going to see a boom when the dollar weakens,” Schiff said.

The U.S. household debt, which is about $15 trillion, represents a crucial issue for the standard of living in the country.  “Everybody is loaded up with debt, and it’s not like we began this monetary experiment without much debt. We had a lot of debt in 2008. In fact, the financial crisis was about debt, it was about our inability to pay the debt that we had,” Schiff said.

More…

 

Jim/Bill,

Oh-Oh.

Hat Trick?….Not!

Image result for hat trick images

Treasury auctions being boycotted, day before yesterday, yesterday and today?

Something’s going on.  This sounds ominous.

CIGA Wolfgang Rech

7Y Auction Prices At Highest Yield Since April 2010 As Directs Disappear Again
October 25, 2018

After two consecutive mediocre auctions, today the US government concluded its near record weekly haul of Treasury issuance, selling $31 billion in 7 Year paper, which it sold at a yield of 3.074%, stopping through the When Issued 3.069%, up from 3.034% last month and the highest yield since April 2010.

Confirming the weak demand for the belly of the curve, the Bid to Cover declined again, and after September’s 2.449 it dipped to 2.393, the lowest since March, and below the 6 auction average of 2.55.

But the most notable feature of this auction, as with the most recent 3Y and 5Y auctions, was that the boycott by Direct bidders is going on, with Directs taking down just 5.22% of the final allotment, far below the 6 auction average of 14.1%, and the lowest since February 2011. Offsetting the poor Direct bid was the rebound in Indirects, who took down 64.6% of the auction, above last month’s 61.2% and better than the recent average of 63.0%. Dealers were left with 30.2% of the auction, more than the 25.3% in September and above the 22.9% average.

Overall, a mediocre auction, but the most pressing question is what has spooked Direct bidders – note, not foreign central banks but domestic accounts – from participating in Treasury auctions. So far an answer has not been proposed.

More…

Bizarre Direct Bid Collapse Continues In Today’s Tailing 5Y Auction
October 24, 2018

Similar to yesterday’s sale of 2Y paper, moments ago the Treasury sold $39 billion in 5Y paper at a high yield of 2.977%, below last month’s 2.997%, and tailing the When Issued 2.971% by 0.6 bps.

The bid to cover dropped from 2.39 in September to just 2.30, below the 6 auction average of 2.51 and the lowest since February 2017.

But it was the internals were the biggest similarity to yesterday’s auction was found, because for the second day in a row, Direct Bidders were engaged in a full blown boycott, tendering only $2.227BN in bids, and were hit on only $727MM, a take down of only 1.9%, which was the lowest since July 2009. It is unclear what has spooked Direct bidders so much but whatever it is, it continues.

Meanwhile, Indirects took down 59.0% of the auction, which while above last month’s 57.9% was below the six auction average of 61.6%. Dealers were left with 39.1% of the allotment, a sharp increase from the 28.3% recorded in the prior 6 auctions.

Overall, not a bad auction but the collapse in Direct demand is perplexing and if it continues, may be an indication that a key buyer group for Treasury paper may have left the building.

More…

2Y Auction Prices At Highest Yield Since July 2008, As Direct Bidders Collapse
October 23, 2018

The short-end just keeps on rising, with the latest auction of $38BN in 2Y paper stopping at a high yield of 2.880%, up from 2.825% in September, the highest since July 2008, and stopping 0.1bp through the When Issued 2.881%. The auction size has been increasingly progressively from $26BN in January to $38BN currently as there is an increasingly larger budget gap that needs to be filled.

The internals were generally in line, with the Bid to Cover rising from 2.437 to 2.671, if below the 2.75 6 month auction average.

The biggest surprise was in the buyside takedown, because whereas Indirects took down a healthy 52.6% of the auction, the highest since December 2016, well above last month’s 40%, and above the 6 auction average of 42.0%, it was the Directs that got spooked, and after being awarded 13.4% last month, they only took down 5.50% this time, the lowest since August 2009. Dealers were left with 41.9%, just below the 6 auction average of 46.6%.A

Overall, a strong auction on the short end, and one which appears to have sparked a bit of an equity rally, if having little effect on the overall yield curve.

More…

 

Who will help me sponsor a Go Fund Me Page to help these socialists move to a country that gives them everything? Maybe we can peel this onion and make it a real story.

JB

Caravan Of Liberal Americans Makes Way Toward Socialist Paradise Of Venezuela
October 25th, 2018

MEXICO—A migrant caravan full of leftists desiring to enter the socialist paradise of Venezuela departed the United States Thursday and began marching toward through Mexico, stating they will demand asylum so they might experience the far better life that socialism offers.

The migrants claim they are leaving America because of its high standards of living, strong economy, and record unemployment, and hope to find a better life in Venezuela’s much more equitable system.

“Everyone there has the same quantity of possessions and food,” said one marcher. “Everyone makes millions of dollars, and very few people work. It’s a real paradise.” The refugees have complex motivations, but the vast majority simply want to see everything socialism has to offer after suffering the amazing benefits of capitalism for too long.

More…

Posted by & filed under Jim's Mailbox.

Courtesy of JB.

Jim

Image may contain: 2 people, meme and text Image may contain: 1 person, text

 

Jim,

Negative mope will suck the life out of mope!

Dave

October Auto Sales Tumble: “Our Car Sales Are Down 12 Percent”
October 23, 2018

The downward spiral in the US auto industry is accelerating, and there may be no improvement anytime soon.

According to a new report by CNBC, October is shaping up to be another terrible month for the industry, after an already abysmal September, as auto dealers around the country have been plagued by marked drops in retail sales and customer traffic in their showrooms.

Scott Adams, the owner of a Toyota dealership in Lee’s Summit, Missouri, told CNBC: “We are definitely seeing business pull back. September was off some, but this month our car sales are down 12 percent and our truck sales are down 23 percent.” The report notes that the drop in sales was most pronounced last weekend.

Another dealer in Tampa Bay, Florida said that sales this month were down 13%. Mark Scarpelli, president of Raymond Chevrolet and Kia in Antioch, Illinois stated that “Customer traffic has moderated. There is a little bit more of a pause because of the higher interest rates.” He said that although sales are keeping pace with the prior year, people are taking longer to buy.

Recall that in September, the average new car loan jumped $724 year-over-year to $30,958 in Q2 2018, while used vehicle loan amounts increased $520 to reach $19,708, both records.

More…

 

Courtesy of JB.

Jim

 

David Rosenberg is EXTREMELY CLOSE to being “main stream” and he asks a very pointed question…

Bill

Posted by & filed under Jim's Mailbox.

Courtesy of JB.

Jim

Judicial Watch EXCLUSIVE Interview w/ Caravan Member in Guatemala
October 23, 2018

More…

 

Courtesy of Dave.

Jim

Emerging Economies Stockpiling Gold In Expectation Of US Dollar Banking System Collapse – Analysts
October 20, 2018

Countries around the world are turning to gold as uncertainty about the global economy rises. Trade wars and the aggressive policies of the United States are making emerging economies withdraw from dollar assets, analysts told RT.

“In the near future we can witness a big change in the rules of the game. At the beginning of the year, developing countries were the first to feel investor panic. If a crisis in Latin America and South Asia doesn’t surprise anybody, now is the time to worry about the largest economies of the world,” Mikhail Mashchenko, an analyst at the social network for investors eToro in Russia and CIS told RT.

“The aggressive US policy in recent years has forced some countries to look for an alternative to the dollar and replenish their gold reserves. Worries about the future growth of global economy are an additional incentive for purchases. Many question Donald Trump’s protectionism,” the analyst added.

There are signs that the global financial system dominated by the US dollar could collapse, says financial institute FinIst analyst Denis Lisitsyn. These signs include the uncontrolled emission of money from different countries, an increase in US interest rates, trade wars, the rapid rise in energy prices, geopolitical tensions in Syria, Iraq, the war in Yemen, he says.

“Many countries are buying gold in advance. They understand that paper money is constantly eaten up by inflation, equities will sharply fall in price in case of a crisis, and foreign deposits can be arrested, confiscated or frozen,” he said.

Hungary, Poland, Russia, China, India, Turkey, Saudi Arabia are all hoarding gold, notes Vladimir Rozhankovsky, LIFA, expert at the International Financial Center.

More…

 

Posted by & filed under Jim's Mailbox.

Courtesy of Dave.

Jim

Putin Lays Down the Law at Valdai
October 19, 2018

Every year Russian President Vladimir Putin speaks at the Valdai Economic Forum. And each year his talk is important. Putin isn’t one to mince words on important issues.

With tensions between Russia and the West reaching Cold War levels, Valdai represented the first time we’ve heard Putin speak in a long-form discussion since Helsinki and the events thereafter — IL-20, Khashoggi, etc.

So, this talk is worth everyone’s time. And when I say everyone’s I mean every single person who could be affected by the breakdown of the U.S. political system and how that spills over onto Russia’s shores.

In other words, pretty much everyone on the planet.

Because what Putin did at Valdai was to lay down the new rules of conduct in geopolitical affairs. He put the U.S. and European oligarchs I call The Davos Crowd on notice.

More…

 

That control has been broken! Interesting!

GG

Gold Shorts Suffer Biggest Squeeze Since 1999 As Specs Abandon VIX-Selling Spree
October 21, 2018

Until the last couple of weeks, net speculative positioning in financial markets was all on one side of the boat with speculators are woefully unprepared for a major risk-off event, suggesting complacency had reached epidemic levels as equities broke out to new highs.

Then the calendar rolled over to October and everything changed…

In the last two weeks, the aggregate net speculative positioning in futures in what are considered traditional risk-off assets – gold, 10-year Treasuries, and the VIX – surged by the most since Brexit…

 

 

 

 

 

More…

 

What did you say about global interest rates, Bill, in this Saturday’s one hour plus conference call for subscribers?

Courtesy of GG.

Jim

Dollar Libor at a 10-Year High Adds to Global Funding Headwinds
October 17, 2018

The global dollar benchmark rate that everyone loves to hate and which regulators have marked for extinction approached a 10-year high Wednesday, adding to strains on some emerging economies and U.S. companies alike.

The London interbank offered rate still serves as the basis for trillions of dollars in loans and floating-rate securities globally, even though its replacement is gaining traction. Steeper U.S. interbank borrowing costs risk rippling across developing economies by tightening financial conditions and forcing local-currency benchmarks higher. It’s a development that could heighten investor concern at a time when a rising dollar has sparked worries about emerging-market borrowers’ ability to repay loans in the greenback.

Three-month U.S. dollar Libor is now 2.4496 percent, the highest since November 2008. The main driver is that traders are pricing in further Federal Reserve tightening. Officials’ latest quarterly forecasts indicate another rate hike this year followed by three more in 2019.

More…

 

Do not just fugetaboutit! Thanks too GG for the heads up.

Jim

With EU Deadline Looming, Italy’s League Warns of Risks to Banks
October 21, 2018

Italy is due to answer the European Commission’s doubts about its budget plan following a warning from a government official in Rome that a widening bond yield spread may push some banks toward a recapitalization.

The Commission, in a bluntly worded letter last week, questioned the soundness of Italy’s expansive spending program for 2019. Commissioners Valdis Dombrovskis and Pierre Moscovici said the “significant deviation” needs a response by noon on Monday.

Investors have been closely watching the rift between Rome and Brussels, driving up Italian debt yields and widening the 10-year yield spread with German bunds. An increase in Italy’s bond-yield spread is a risk for domestic banks and is adding to tensions in the financial system, according to Cabinet Undersecretary Giancarlo Giorgetti.

More…

 

Dear WPP member, David,

The CIA economic moron blew this one. He, not her, might have blown the USA economically, all to hell.

The genius that suggested the premature use of a weaponized SWIFT to the CIA Noodle Factory 7th floor management to use it on a nothing burger is the ASS HOLE of the Century.

You think he might have asked us or subscribed because at the end of the day he put the USA in ultimate currency shit hole.

Can a CIA guy be demoted to a private from a general after he retires?

You know they all have ranks.

Jim

Jim,

You were the fist to state the early use of SWIFT was a mistake…

Dave

Foreign Banks Are Embracing Russia’s Alternative To SWIFT, Moscow Says
October 21, 2018

On Friday, one day after Russia and China pledged to reduce their reliance on the dollar by increasing the amount of bilateral trade conducted in rubles and yuan (a goal toward which much progress has already been made over the past three years), Russia’s Central Bank provided the latest update on Moscow’s alternative to US-dominated international payments network SWIFT.

Moscow started working on the project back in 2014, when international sanctions over Russia’s annexation of Crimea inspired fears that the country’s largest banks would soon be cut off from SWIFT which, though it’s based in Belgium and claims to be politically neutral, is effectively controlled by the US Treasury.

 

 

 

 

 

More…

 

Courtesy of JB.

Jim

 

 

 

 

 

 

 

Ack!

Contentious times such as these days are why universe provided aikido.

Keep one point.

Relax completely.

Keep weight underside.

Extend ki.

Express peace.

Clif

More…

 

Courtesy of Dave.

Jim

Putin Lays Down the Law at Valdai
October 19, 2018

Every year Russian President Vladimir Putin speaks at the Valdai Economic Forum. And each year his talk is important. Putin isn’t one to mince words on important issues.

With tensions between Russia and the West reaching Cold War levels, Valdai represented the first time we’ve heard Putin speak in a long-form discussion since Helsinki and the events thereafter — IL-20, Khashoggi, etc.

So, this talk is worth everyone’s time. And when I say everyone’s I mean every single person who could be affected by the breakdown of the U.S. political system and how that spills over onto Russia’s shores.

In other words, pretty much everyone on the planet.

Because what Putin did at Valdai was to lay down the new rules of conduct in geopolitical affairs. He put the U.S. and European oligarchs I call The Davos Crowd on notice.

More…

 

That control has been broken! Interesting!

GG

Gold Shorts Suffer Biggest Squeeze Since 1999 As Specs Abandon VIX-Selling Spree
October 21, 2018

Until the last couple of weeks, net speculative positioning in financial markets was all on one side of the boat with speculators are woefully unprepared for a major risk-off event, suggesting complacency had reached epidemic levels as equities broke out to new highs.

Then the calendar rolled over to October and everything changed…

In the last two weeks, the aggregate net speculative positioning in futures in what are considered traditional risk-off assets – gold, 10-year Treasuries, and the VIX – surged by the most since Brexit…

More…

 

What did you say about global interest rates, Bill, in this Saturday’s one hour plus conference call for subscribers?

Courtesy of GG.

Jim

Dollar Libor at a 10-Year High Adds to Global Funding Headwinds
October 17, 2018

The global dollar benchmark rate that everyone loves to hate and which regulators have marked for extinction approached a 10-year high Wednesday, adding to strains on some emerging economies and U.S. companies alike.

The London interbank offered rate still serves as the basis for trillions of dollars in loans and floating-rate securities globally, even though its replacement is gaining traction. Steeper U.S. interbank borrowing costs risk rippling across developing economies by tightening financial conditions and forcing local-currency benchmarks higher. It’s a development that could heighten investor concern at a time when a rising dollar has sparked worries about emerging-market borrowers’ ability to repay loans in the greenback.

Three-month U.S. dollar Libor is now 2.4496 percent, the highest since November 2008. The main driver is that traders are pricing in further Federal Reserve tightening. Officials’ latest quarterly forecasts indicate another rate hike this year followed by three more in 2019.

More…

 

Do not just fugetaboutit! Thanks too GG for the heads up.

Jim

With EU Deadline Looming, Italy’s League Warns of Risks to Banks
October 21, 2018

Italy is due to answer the European Commission’s doubts about its budget plan following a warning from a government official in Rome that a widening bond yield spread may push some banks toward a recapitalization.

The Commission, in a bluntly worded letter last week, questioned the soundness of Italy’s expansive spending program for 2019. Commissioners Valdis Dombrovskis and Pierre Moscovici said the “significant deviation” needs a response by noon on Monday.

Investors have been closely watching the rift between Rome and Brussels, driving up Italian debt yields and widening the 10-year yield spread with German bunds. An increase in Italy’s bond-yield spread is a risk for domestic banks and is adding to tensions in the financial system, according to Cabinet Undersecretary Giancarlo Giorgetti.

More…

 

Jim,

You were the fist to state the early use of SWIFT was a mistake…

Dave

Foreign Banks Are Embracing Russia’s Alternative To SWIFT, Moscow Says
October 21, 2018

On Friday, one day after Russia and China pledged to reduce their reliance on the dollar by increasing the amount of bilateral trade conducted in rubles and yuan (a goal toward which much progress has already been made over the past three years), Russia’s Central Bank provided the latest update on Moscow’s alternative to US-dominated international payments network SWIFT.

Moscow started working on the project back in 2014, when international sanctions over Russia’s annexation of Crimea inspired fears that the country’s largest banks would soon be cut off from SWIFT which, though it’s based in Belgium and claims to be politically neutral, is effectively controlled by the US Treasury.

More…

 

Courtesy of JB.

Jim

 

Ack!

Contentious times such as these days are why universe provided aikido.

Keep one point.

Relax completely.

Keep weight underside.

Extend ki.

Express peace.

Clif

More…

Posted by & filed under Jim's Mailbox.

Courtesy of Dave.

Jim

The Most Over-Hyped And Useless Tech In History?
October 16, 2018

With the value of Bitcoin having fallen by around 70% since its peak late last year, the mother of all bubbles has now gone bust. More generally, cryptocurrencies have entered a not-so-cryptic apocalypse. The value of leading coins such as Ether, EOS, Litecoin, and XRP have all fallen by over 80%, thousands of other digital currencies have plummeted by 90-99%, and the rest have been exposed as outright frauds. No one should be surprised by this: four out of five initial coin offerings (ICOs) were scams to begin with.

Faced with the public spectacle of a market bloodbath, boosters have fled to the last refuge of the crypto scoundrel: a defense of “blockchain,” the distributed-ledger software underpinning all cryptocurrencies. Blockchain has been heralded as a potential panacea for everything from poverty and famine to cancer. In fact, it is the most overhyped – and least useful – technology in human history.

In practice, blockchain is nothing more than a glorified spreadsheet. But it has also become the byword for a libertarian ideology that treats all governments, central banks, traditional financial institutions, and real-world currencies as evil concentrations of power that must be destroyed. Blockchain fundamentalists’ ideal world is one in which all economic activity and human interactions are subject to anarchist or libertarian decentralization. They would like the entirety of social and political life to end up on public ledgers that are supposedly “permissionless” (accessible to everyone) and “trustless” (not reliant on a credible intermediary such as a bank).

More…

 

You have a valid point here Larry!

Bill

Where were the left when four of our own were killed in Benghazi? Hillary and Obama were not to be heard from and the left is now going crazy about one man (Khashoggi) who is not even an American citizen is killed in Turkey. This is sick. What happened to their voices during Benghazi (2012)?

Larry

Khashoggi Mourners Demand Justice As Congress Urges Full US Investigation
October 20, 2018

Amidst international scorn for Saudi Arabia’s official explanation of the death of Jamal Khashoggi, friends and colleagues of the reporter on Saturday resumed their vigil outside the Saudi consulate in Istanbul, where he was killed two weeks ago.

They were there to mourn his death and demand those responsible be bought to “true justice”.

In the US, Saudi Arabia’s major ally, the Trump administration remained cautiously supportive of the Riyadh line. But political pressure was building. Republican Bob Corker, the chair of the powerful Senate foreign relations committee, doubted the Saudi version of events and said the US “must make its own independent, credible determination of responsibility for Khashoggi’s murder”.

More…