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.
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)
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.
Gold is higher in the early morning trade report with the price now at $1,315.20, up $13.50 from the Comex close which happened before yesterday’s FOMC report with the high so far at $1,320.20 and the low at $1,312.50. Silver is up as well (not sure who is leading here Ag or Au) with the trade at $15.555, up 23.7 cents with the high at $15.65 and the low at $15.48. The US Dollar took a hit after the data release but has recovered (against Trumps weaker dollar demand) with the trade at 95.675, up 47.4 points inside a trading range between 95.705 and 95.295. Of course, all of this was done while we’re not trading and before the Comex sleepy time open. As expected, when Gold rises in the US Dollar, it rises even more in the secondary’s (emerging markets) with the Venezuelan Bolivar price at 13,135.56, gaining 99.87 Bolivar in a 24 hour period. Silver’s price gained 2.248 cents (HUGE!!!) with its price at 155.356 Bolivar. In Argentina, another country going into massive convulsions because of the exchange rate, Gold’s price before the FOMC was 53,322.03, now it’s priced at 53,730.56 gaining 408.53 Argentinian Pesos over night with Silver gaining 9.192 Argentinian Pesos at 635.484. These are very big gains brought on because of the swings caused by a major currency and not their own, wait till this hits under the US Dollar. No one’s seen anything yet!
The March Silver deliveries had a major jump in demand BEFORE yesterday’s FOMC data release with the count now at 101 Demands for Physical as buyers came in with needs proving a gain of only 17 contracts. However, yesterday’s Volume in March Silver totaled 94 swaps with the last purchase made at 8:57 am pst. Did someone jump in and get their requirements ahead of those already in cue? Watch Harvey’s count here because there may be some EFPS being passed over to the city in chaos or the purchases got stopped here draining more from COMEX, as less is getting pulled out of the ground globally. The Overall Open Interest in Silver is still gaining with the count now at 190,624 Overnighters proving 1,314 more shorts had to be placed in trade to stay the price from the buyers but not stopping the demands for physical at all.
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:
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.
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.
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.
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.
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.
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.
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%.
Do you remember the days when the sale of $1 billion worth of “precious paper” gold would cause a $25 or even $50 drop in gold’s price? Today they got a lousy 5 bucks for their troubles! The world she is a changin’!
Gold Tumbles Back Below $1300 As Someone Suddenly Dumps $1 Billion Of ‘Precious Paper’ March 29, 2019
As Europe closed, it seems someone decided now was a great opportunity to puke over $1 billion notional of paper gold into the futures market to send the precious metal back below the key $1300 level…
More positive developments in Tanzania for ethical mining, from artisan to major.
East Africa’s First Gold Trading Hub To Fight Smuggling March 18, 2019
Tanzania has launched an international gold trading centre in the gold-rich region of Geita.
Tanzania will thus join South Africa and Botswana, which boast a gold exchange hub and diamond bullion market respectively.
The centre, inaugurated on March 17, is among reforms introduced in the mining sector in the past three years to curb mineral smuggling.
The gold hub is meant to ease mineral trading, and ensure that businesses pay the required levies to the government.
Geita produces over 40 per cent of the gold exported from the country.
According to Geita Regional Commissioner Robert Gabriel, each of the five districts in the region will have one gold collection centre for small-scale miners, and two banks where gold trading will be taking place.
Comex Opens, Now It’s Time To Go Back To Sleep… March 19, 2019
Good Tuesday Morning Folks,
Gold is up again and hopefully it will stay that way when the Comex opens and we all go back to sleep (immediately after it opens) with the trade now at $1,308.50 (April) right beside the high of $1,308.80 with the low at $1,302.10. Silver is following with the May contract pegged at $15.41, up 8.8 cents and right beside its high at $15.42 with the low at $15.32. The Rollover in the currencies is complete with the June US Dollar trade now at 95.785, down 19.8 points and close to the low at 95.73 with the high at 95.975, of course all this was done way before the Comex Open and a hair past 5 am pst. At least in Venezuela, the currency prices remain steady (cough) with Gold’s price now at 13,068.64 Bolivar gaining 47.94 overnight with Silver pegged at 153.907, gaining only .699 Bolivar in value as we wait for the emerging currency markets volatility to infect the calm in the majors.
March Silver’s Deliveries are now showing a reduced count at 65 demands for physical with zero Volume up on the board so far this morning proving a 10 count drop being delivered/settled/cleared somewhere between COMEX and the City and as we near the Brexit and Basel III date (3-29-19) that was set up a long time ago. Silver’s Overall Open Interest gained a bit more during yesterday’s nap time trading period at the Comex showing a gain of 481 Obligations making the count 187,344 Overnighters as of this morning’s report.
Buy Gold, Sell Stocks Is the ‘Trade of Century’ Says One Hedge Fund March 19, 2019
One of last year’s best-performing hedge funds says the “trade of the century” is to buy gold and sell stocks as risk assets are due for another meltdown.
It’s only a matter of time until the bearish bet pays off big, according to Crescat Capital LLC. While the Denver-based firm has only about $50 million under management, it has a history of outperforming the S&P 500 Index — with its Global Macro Fund returning 41 percent last year alone. Now the investment company says it’s ready to capitalize on an end of the economic cycle as indicators warn that a recession is imminent in the coming quarters.
The consensus is pointing to a recession in 2020 or 2021, Tavi Costa, a global macro analyst at Crescat, said by phone. “We think it’s a lot closer than that and we have a number of macro timing indicators that we look at.”
Realizing How Great It Is To Be Here Now! March 18, 2019
Great and Wonderful Monday Morning Folks,
Gold is trading higher, at least while I’m writing with the latest price at $1,303.70, up a dollar in between a high of $1,306 and the low at $1,298. Silver is barely up as well with its trade at $15.34, adding 1.6 cents to Friday’s close and close to the high at $15.36 than the tested low at $15.22. The Currency Rollover is today, part of the Triple Witch accounting swap out we’ve been following for decades, with the US Dollar trading 20 points lower at 96.39, which is the low so far, with the high at 96.54. All this of course was done some time before 5 am pst and the Comex Open. In Venezuela, where debt is considered far more valuable than physical anything (that is until last year’s little flip) is showing Gold’s price at 13,020.70 proving a minor gain of 4.99 Bolivar, with Silvers price now at 153.208 losing .20 of a Bolivar as we hear but cannot trust anything from the news services about real news there.
March Silver’s Delivery Demands are showing an undelivered count at 75 requests for physical with zero Volume up on the board so far this morning. We doubt this number is correct since it was Friday’s open count and since we’ve gone thru this each Monday, we’ll wait for the Comex members to catch up with our requests, after all, we are the many against 1 or 2 Algos, too bad we can’t vote on this stuff, eh? Silver’s Overall Open Interest did drop a little on Friday before they stopped counting with the totals so far at 186,863 positions still in trade proving a loss of only 308 Overnighters as the count continues to fall in ever so slow a fashion all the while the international politicos are climaxing their dramas on how important it is for them to retain all their ill-gotten power over their voting populations.
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.
