Posted at 8:16 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

It’s what Central Banks do….print unlimited fiat currency and buy back their own paper which the markets no longer want.

“With The Fed in full ‘taper’ mode and The ECB hinting, the world is left to rely on Kuroda to single-handedly buy-the-dip in stocks and maintain bond yields at the mandated level.”

Who needs the markets anymore when central banks buy back their own paper?

Nobody.

Who needs gold as protection from this fiscal malfeasance?

Everyone!

CIGA Wolfgang Rech

Japanese Equity Market Outflows Spike To 8 Year High
July 7, 2017

With The Fed is full ‘taper’ mode and The ECB hinting, the world is left to rely on Kuroda to single-handedly buy-the-dip in stocks and maintain bond yields at the mandated level. With Japanese stocks fading in the last two weeks (as bond yields spike), it appears the ubiquitous ‘hand of god’ has disappeared…

And judging by the biggest Japanese equity fund outflows in 8 years, the fear is spreading…

More…

Panicked BOJ Unleashes Bond Buying Bazooka: Offers To Buy Unlimited 10Y JGBs At 0.11%
July 6, 2017

During this morning’s bond rout when a poor French auction sparked a high-volume selloff in German Bunds which also hit Japanese JGBs before slamming US TSYs, Goldman said that “with 10Y JGBs closing at 0.095 and getting hit at 10bp intraday, focus will be on how the BOJ will react tomorrow [i.e. now]. Opinions seem pretty split with some expecting an increase in purchase size in the 5-10 bucket, while others feel that the BOJ will let the 10Y run loose given the current sell off is more fundamental than event driven. With BOJ behind buying pace for 80tn reference anyway, personally I feel it doesn’t hurt the BOJ to remind market of their presence.”

Goldman was right: the BOJ, panicking after the overnight bond rout, not only reminded markets of its presence, but did so in dramatic fashion when it first boosted the amount of JGBs bought in the 5-10 year bucket from JPY 450BN to JPY 500 BN, and then for good measure unleashed the QQEWYC bazooka, announcing it would purchase an unlimited amount of 10Y JGBs at 0.11%, just a fraction above the BOJ’s 0.10% line in the sand, only the second time it has done so in 2017 since February.

In immediate reaction, the benchmark Japanese TSY, which was trading north of 0.105% and flirting with 0.11%, promptly slid back to 0.095% now that it has become clear that all the hawkish posturing by central banks was just that.

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Posted at 9:57 AM (CST) by & filed under In The News.

Wikileaks Unveils CIA Implants that Steal SSH Credentials from Windows & Linux PCs
July 6, 2017

WikiLeaks has today published the 15th batch of its ongoing Vault 7 leak, this time detailing two alleged CIA implants that allowed the agency to intercept and exfiltrate SSH (Secure Shell) credentials from targeted Windows and Linux operating systems using different attack vectors.

Secure Shell or SSH is a cryptographic network protocol used for remote login to machines and servers securely over an unsecured network.

Dubbed BothanSpy — implant for Microsoft Windows Xshell client, and Gyrfalcon — targets the OpenSSH client on various distributions of Linux OS, including CentOS, Debian, RHEL (Red Hat), openSUSE and Ubuntu.WikiLeaks has today published the 15th batch of its ongoing Vault 7 leak, this time detailing two alleged CIA implants that allowed the agency to intercept and exfiltrate SSH (Secure Shell) credentials from targeted Windows and Linux operating systems using different attack vectors. Secure Shell or SSH is a cryptographic network protocol used for remote login to machines and servers securely over an unsecured network. Dubbed BothanSpy — implant for Microsoft Windows Xshell client, and Gyrfalcon — targets the OpenSSH client on various distributions of Linux OS, including CentOS, Debian, RHEL (Red Hat), openSUSE and Ubuntu.

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Jim Sinclair’s Commentary

Courtesy of JB Slear.

CNN Asked a GOP Congressman About Trump’s Tweets. His Brutal Response Left ‘Em Speechless
July 6, 2017

Rep. Scott Taylor (R-VA), a former Navy SEAL, was being interviewed by CNN on Wednesday when the anchor returned to a favorite, common question that has been asked for the last two years ceaselessly by the media: “What do you think of Trump’s latest tweets?”

Specifically, the anchor asked about CNN’s exposé on unmasking a meme creator.

Taylor laughed and told the anchor, “I think you guys are getting played, man,” chiding the media for the obsession with Trump’s tweets, saying, “There’s tons of news out there. Let’s talk about real news.”

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Italy Government Bond 10Y  1991-2017
Italy 10Y increased 0.07 percent or 0.07% to 2.34 on Friday July 7 from 2.27 in the previous trading session. Historically, the Italy Government Bond 10Y reached an all time high of 14.20 in October of 1992 and a record low of 1.05 in August of 2016.

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Posted at 8:48 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

10y yield golden cross soon! Keep a close eye on the 10y yield! Also look at the US dollar chart below. I think the dollar will decline because foreign bond holders will SELL.

CIGA GG

 

Posted at 8:41 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

These two sadly fall under the category of TRUTH BOMBS. While Dave Hodges claim has not been proven yet that Vladimir Putin has said the “U.S. had better name names or I will” regarding crimes and in particular pedophilia, the arrests for a “gay sex orgy” at one of the Pope’s advisor’s home is fact. What a sick world we live in! And sadly few care as we will again hear “fake news, nothing to see here. Please move along”…

Vatican Police ‘Break Up Gay Orgy’ At Home Of One Of Pope Francis’ Advisors
July 5, 2017

Vatican police have broken up a gay orgy at the home of the secretary to one of Pope Francis’s key advisers, it has been claimed.

The flat belonged to the Vatican’s Congregation for the Doctrine of the Faith, or Holy Office, which is in charge of tackling sexual abuse amongst the clergy.

Reports in Italy claim the occupant of the apartment is the secretary to Cardinal Francesco Coccopalmerio – a key aide to the 80-year-old Pope.

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Bill Holter’s Commentary

From our good friend Yra Harris.

Notes From Underground: Time It Was and What a Time It Was
I use the wisdom of Simon and Garfunkel’s “Bookends” to discuss the huge risk that pervades the global financial system. This is not Yra crying wolf or pretending to be a prophet of doom. Notes From Underground deals with profit opportunities. It’s not a cult singing Barry McGuire’s, “Eve of Destruction.” I have not been banging the drum of impending financial disaster, but I have been consistent in noting that negative and zero interest rates, coupled with massive QE programs from the world’s central banks have lifted asset prices on a tsunami of liquidity.

Last week, the bond markets were very volatile in reaction to a Draghi statement, which hinted at a quicker removal of ECB QE programs. My thesis is (and has been) that the Draghi-led ECB is in a hurry to increase the ECB balance sheet in an effort to force the creation of a EUROBOND in a stealth effort to protect the heavily indebted-states like Italy, Greece, Spain, Ireland and others. The Germans have balked about fiscal harmonization before the strict Maastricht rules are adhered to in full measure. The Eurocrats in Brussels are using the ECB balance sheet as a tool to circumvent German concerns about being a wealth transfer agent for the profligate nations in an effort to forestall the implementation of needed labor and market reforms. Draghi’s “whatever it takes” program was not meant to respond to its mandate of inflation but rather to preserve the EU and its currency, the euro.

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Jim Sinclair’s Commentary

The latest from John Williams’’ www.shadowstats.com

– Second-Quarter 2017 Real Merchandise Trade Deficit Remained on Track for Worst Showing Since Second-Quarter 2007
– June Real-World Employment Conditions Continued in Annual Decline, Albeit at a Narrowed Pace Still Not Seen Since the Depths of the 2009 Collapse
– In Ongoing, Low-Level Stagnation, May Freight Index Gained Year-to-Year, Holding Shy of Recovering Its Pre-Recession Peak by 12.1% (-12.1%)
– Construction Spending Benchmark Revisions Confirmed Likely Downside-Benchmark Revisions Pending for the GDP
– Recent Patterns of Real Annual Growth in Construction Spending Revised from Uptrending to Sharply Downtrending, Consistent with a Recession
– Real Construction Spending Remained 20.7% (-20.7%) Shy of Recovering Its Pre-Recession Peak, Still Holding in Low-Level Stagnation

“No. 897: Trade Deficit, Construction Spending, Freight Index, Private Jobs Surveying ”

www.shadowstats.com

Posted at 2:28 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Can the European Union withstand this?

Italy Swoops In To Save Another Bank Leaving Taxpayers On The Hook For Over $25 Billion
July 5, 2017

The Italian state has stepped in with funding to save yet another failing bank, meaning taxpayers now stand responsible for over 22 billion euros ($25.4 billion) of bailout money recently extended to the sector.

Finance Minister Pier Carlo Padoan announced late Tuesday that the government had received approval from the European Commission to pump 5.4 billion euros into Banca Monte dei Paschi di Siena (BMPS) in exchange for the lender undertaking a major restructuring overhaul.

BMPS revealed an outline of its new 2017 – 2021 plan on Wednesday morning which it says will deliver a net profit of over 1.2 billion euros and a return-on-equity of over 10 percent by 2021. Management has committed to implementing a headcount reduction of around 5,500 and to close around 600 of the bank’s existing 2,000 branches as well as a pay cap for senior management. BMPS also said that its CET1 ratio (its common equity tier 1 ratio which is a key standardized measure of a bank’s financial strength) should reach 14.7 percent by 2021.

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Bill Holter’s Commentary

If this horse was Arabian it would be tolerated.  Seriously, the rider does seem to be bit of a goat head, who would walk their horse right up to a bunch of angry drunks?  …with someone riding on the back?  It’s not exactly like these animals are born with cleats that grip pavement or cement, dangerous for all including the horse even if no one sees it that way.  That said, I still think businesses should offer hitching posts and free parking!

Urban Cowboy Won’t Give Up His Horse After Victoriaville Tells Him To Get Out
July 2, 2017

Once best known as the home of a famous hockey stick, Victoriaville, Que., has more recently established a reputation as a growing entrepreneurial hub. It is the “economic engine” of the centre of Quebec, a “dynamic and welcoming community,” the city of 46,000 says on its website.

And, frankly, it could do without people on horseback clogging the roads.

After a long battle that led the city to rewrite its bylaws, the city last month won a court victory against Jean Roy, the man known as Victoriaville’s urban cowboy.

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Buy Gold Near $1,200 “As Insurance” – UBS Wealth
July 5, 2017

Buy gold as insurance against Kim’s ‘gift giving’

Yesterday North Korea sent the US a ‘package of gifts’ for Independence Day.

Unsurprisingly the successfully tested and launched intercontinental ballistic missile (ICBM) was not well received. US Secretary of State Rex Tillerson called the move a “new escalation of the threat” to the U.S. and its allies and that “global action is required to stop a global threat.”

As the US and South Korea began military exercises in response to North Korea’s gift giving ceremony, safe haven assets rose and gold made a small rebound in the face of these escalating geopolitical concerns. Gold tends to rise on various uncertainties – whether financial, economic or geopolitical.

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Posted at 9:47 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

“This picture says all you need to know about present USA politics.”

Jim Sinclair’s Commentary

Compliments of Crawford Perspective.

Bill Holter’s Commentary

Did they run out of ink? Or paper?

Bank Of England Workers To Go On Strike For Four Days Over Pay
July 3, 2017

The four-day strike by members of Unite begins on July 31.

The union said 95% of workers voted in favour of taking industrial action.

Unite members working in the maintenance, parlours and security departments will be taking strike action.

Staff are angry that their pay offer was below the level of inflation for the second year running, with up to a third not receiving an increase in 2017.

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Britain ‘Is On The Brink Of The Worst House Price Collapse Since 1990s’: Experts Predict Property Costs Could Plunge By FORTY PER CENT
July 2, 2017

House prices are teetering on the brink of a crash that could be as bad as the bust of the early 1990s, a leading expert has warned.

There are already warning signs that prices are heading towards a near 40 per cent plunge, warns Paul Cheshire, Professor of Economic Geography at the London School of Economics.

It raises the alarming spectre of the return of ‘negative equity’ – when a house falls so far in value it is worth less than the mortgage – which hit one million people at the worst point in the 1990s.

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Bill Holter’s Commentary

…and this is the generation supposed to buy the previous generation’s starter homes?

Millennials Really Want A McMansion Of Their Own, There’s Just One Problem…
July 4, 2017

A new survey from ApartmentList.com of 24,000 millennials across the country, born between 1982 and 2004, revealed some ‘great news’ for the residential housing market…about 80% of the millennials surveyed said they’re ready to move out of mom’s basement and buy a home.  There’s just one catch…

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Bill Holter’s Commentary

This is an interesting read with good charts.  Please read this one with an “eye” toward value and relative valuations.

Putting The US Stock Market in Perspective
May 20, 2017

‘Since 1954 corporate equity market cap has averaged 70% of GDP. Today it stands over 125%’

Over the past year, here at The Sounding Line, we have presented a number of analyses which indicate that US equity prices have surpassed values supportable by underlying economic conditions (here, here, here).

Along these lines, we present yet another indicator which describes the relationship between stock prices and the underlying economy, namely the ratio between total US non-financial corporate equity market capitalization (the value of all non-financial corporations in the US) versus the total value of US economic activity (US GDP). Warren Buffett has in the past called this ratio “probably the best single measure of where valuations stand at any given moment.” As evident in the two charts below, US corporate equity valuations are now larger than the entire US economy (as measured by GDP) and at levels only seen from 1998-2001 during the dot-com bubble and from 2006-2007 during the height of the housing bubble. Since 1954 corporate equity market cap has averaged 70% of GDP. Today it stands over 125%.

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Bill Holter’s Commentary

The shocker is not the “paper fraud problem” we all know about, rather, the fact that Bloomberg news would publish this let alone touch it!  This should be seen as a huge change as it has been denied for over 20 years…now no one can say they were not warned pubicly.

Metals Trading Has a Paper Fraud Problem
July 3, 2017

For all the high-tech wizardry of modern financial markets, there’s one corner of the commodity world that still depends almost entirely on printed paper — making it an easy target for crooks.

Buyers and sellers of base metals like copper, aluminum and nickel use documents known as warehouse receipts to prove every pound involved in a transaction actually exists and who owns it. The receipts, from a long list of issuers who often stamp them with holograms and secret codes, have become the linchpin of bank loans backed by the metal as collateral.

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Bill Holter’s Commentary

Maybe credit is not the only thing to worry about when it comes to distribution?

This Black Swan Event Is Happening Now And Will ‘Bring This Country To A Halt’
July 4, 2017

On June 24, 2017, Stefan Stanford highlighted a very concerning SQ Alert by a member of the trucking industry about the ramifications and total tyrannical control of the government regarding the upcoming ELD Mandate, warning people that the mandate set to begin in December 2017, is all about control and the surveillance state, with the trucking stating “Control trucking, you control every part of this country, and as 1/5th of the GDP, the economy of every part of this country.”

Read the entire alert again here, because ANP has just received another warning, coming from a trucker that would be affected, and a possible trucking shutdown, which we are told “would bring this country to a halt.”

A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict and generally brings about chaos and strife, and our reader highlights what has been going on in the trucking industry, but has received very little attention in the media, telling us:

“Every one has or is discussing and looking for a “black swan event”. I believe one is right in front of you, and it has gotten little attention, save mention in an article by you and an alert by Steve Quayle. I’m talking about the ELD mandate for trucks. The government is taking total control over the trucking industry under the guise of safety. But their own studies can’t prove a safety increase resulting from this. Its a ruse on the scale of the Patriot act, and Obama care. You know how those worked out.”

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Bill Holter’s Commentary

Pretty good (but very long) write up. Isn’t this just another way of using the word “reset”?

French Market Regulator Sees “Brutal Repricing Of Assets”; Valuations, Volatility “Don’t Reflect Real Uncertainty”
July 4, 2017

High valuations and low volatility don’t reflect the level of economic growth nor the geopolitical uncertainty facing the market, the Autorité des Marchés Financiers says in a mid-year report on main risks to global markets. While stock markets have shown resiliency, the French regulator warns of the “systemic threat” from a “sharp market correction.”

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PBOC Hires Blockchain Engineers Who Will Oversee Creation Of The “Digital RMB”
July 4, 2017

For those who can’t quite reconcile the Chinese government’s tentative acceptance of bitcoin and other cryptocurrencies with the inherently anarchistic principles espoused by bitcoin’s creator, here’s yet another clue to support the theory that the Chinese government has decided to tolerate and regulate digital currencies in hopes of learning how to apply the technology to its own digital currency.

At its core, the hypothetical “digital RMB” will subvert bitcoin’s core mission – that is, to enable individuals to circumvent government control and monitoring. Instead, Chinese policy makers intend to use the currency to strengthen the Communist Party’s ability to monitor its citizens for evidence of money laundering and other financial crimes, as MarketWatch noted earlier this year.

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Bill Holter’s Commentary

Our good friend JB asks; banking issues on the fourth of July??

Chase Bank Experiences Nationwide Outages; Atms, Branches, Credit Cards Affected
July 4, 2017

CLEVELAND, Ohio– JPMorgan Chase on Monday was hit by significant outages at its branches and throughout its network, leaving customers unable to access their accounts or money in some cases.

The problems were reported to be the worst in New York, Chicago, Houston, Dallas,  Los Angeles, Florida and Seattle.

“We’re experiencing some slowness on our system today,” spokeswoman Trish Wexler said Monday evening. “We’re aware of the issue and hope to have it back to normal shortly.”

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Bill Holter’s Commentary

Jim and I are not rocket scientists so who are we to say, but isn’t this a little over the top?

Stephen Hawking Says Trump’s Climate Policies Are Pushing Earth Toward An Irreversible “Tipping Point”
July 3, 2017

Famed physicist Stephen Hawking spent part of his 75th birthday celebration warning the public of the potentially catastrophic consequences of US president Donald Trump’s climate change policy.

“We are close to the tipping point where global warming becomes irreversible,” he said yesterday (July 2) in an interview with BBC News. “Trump’s action could push the Earth over the brink, to become like Venus, with a temperature of two hundred and fifty degrees, and raining sulphuric acid.”

Hawking, who directs research at the Centre for Theoretical Cosmology at the University of Cambridge, UK, said climate change is one of the great dangers we face, and rebuked Trump for obfuscating its existence and withdrawing the US from the Paris Accords.

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