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Old 10-02-2019, 03:03 PM
Danny B Danny B is online now
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,885
Armstrong,,, melting confidence & melting markets

I mentioned that the Saudis went to the credit markets looking for a $billion. MbS is trying to force Saudi princes to buy the IPO for ARAMCO. Nobody is really interested in the IPO. Saudi oil production suffered more than reported by the Houthi attack. I'm sure that Saudi regrets getting sucked into Yemen. Now;
Saudi Credit Rating Cut In Face Of 'further Threats'
Maybe war wasn't such a good idea.

Armstrong writes about the Thucydides Trap. This has to do with a war resulting from the rise of a new power & the fall of the old one. It often results in war.
"The US trade with China will by no means send the US economy into a deep recession. However, blocking US investment into China would send the Chinese economy down even harder."
MAGA baby
" The West will fall because of the economic conflicts internally between the left and right as socialism is dying and all the promises cannot be funded. "
I fault Armstrong for not having enough imagination. The promises of socialism can not be funded with DEBT money. UBI is emerging in the West. Automation will have the same effect in the East. China is unfolding draconian surveillance as a means of maintaining control. I believe that is the wrong solution.

Armstrong writes about the "contagion of discontent" This is definitely something to keep in mind for the West.

The FED had to cough up several hundred $ billion to address the liquidity crisis.
Armstrong, "A lot of people have been writing in about the liquidity crisis and the banks with exposure to Deutsche Bank. This is clearly the European Banking Crisis we have been warning about. Most European (and Swiss) banks are having to overpay 30-40bps over libor. Even A+ rated banks are having to pay this premium."
The European banks are having to pay premiums above LIBOR to get funding.
"Keep in mind that the Lehman and Bear crisis took place in the REPO market."
So, we see big problems in both REPO and LIBOR.
"In all honesty, if this explodes in Europe, no-one will be safe and it will be pot-luck who’s cash you will be holding when it hits the fan. The Fed will bailout the US banks, but it cannot get involved in bailing out the European banks"
Side note
European banks big Fed borrowers in 2008 crisis - Reuters

The European banks got $trillions. ALL banks have exposure to all other banks. The FED has to save all of them OR, none of them.
Op-Ed: The bank bailout of 2008 was unnecessary. Fed ...

"As I have REPEATEDLY warned, we are facing scenarios that nobody has ever seen before. The interconnectivity runs so deep, this clash in public policies can result in a serious crisis emanating from Europe."

"If there is truly a will to address the critical issues at the core of this crisis, we have a team ready to provide guidance. As for our central banking clients outside of Europe, please monitor our services on Socrates."
Armstrong has a team already to go. They won't be called. Certainly NOT before the default cascade. I am sure that the plan calls for Germany ( 1 trillion capital account surplus) to shoulder the debts of the rest of the EU (1 trillion capital account deficit.)
I long ago mentioned that this scenario would be Versailles all over agina but, without the war.
"They" will push Germany into the arms of Russia.

When Rome collapsed, the population fell from 1 million down to 20,000.
Charles Hugh Smith writes about a meltdown in the affluent communities.
oftwominds-Charles Hugh Smith: Could Pricey Urban Meccas become Crime-Ridden Ghost Towns?
This is now happening in cities like Durban, Pretoria, Cape Town and Jo-burg
The markets are melting and nobody wants to be left holding the bag.

10/02 UPS just won FAA approval to fly as many delivery drones as it wants – Verge
I'm sure that antifa can think of a good use for a drone.
10/01 China showcases fearsome new missiles to counter U.S. at military parade – Reuters
Will it stop cyber-attack?
10/02 What exactly is Trump’s impeachable offense? – FFF
10/01 Here’s why the Forever 21 bankruptcy means really bad news for malls – CNBC
America had 5 times the retail space per person as France had.

10/02 How facebook’s libra could kick off a digital currency war – Singularity
Billions of pixels are in danger of massacre.
10/01 Dollar powers to 29-month high, bonds turn choppy – Reuters
Maturity, maturity. The dollar is a zero-maturity bearer bond. It is the most fungible instrument in the world.
If a foreigner wants to obtain a $100 bill, he must surrender $100 worth of stuff to us. The bill costs the treasury 3 cents to print. When this foreigner buys the U.S. note, he is buying confidence.

10/02 After scary manufacturing drop, this is the number to watch Wednesday – CNBC
10/02 Treasury yields sink after U.S. manufacturing weakness raises recession fears – MW
10/02 Downside price rotation dominates after manufacturing data – Technical Traders
10/02 GDP estimates tumble on abysmal ISM report – Mish

We don't need no stinkin manufacturing. We got no money to buy that stuff.
10/02 VC veterans host emergency meeting of unicorns as IPO ‘bubble’ implodes – ZH
Ah yes, the venture capital pushers. IPOs are in complete meltdown.
There are $trillions and $trillions of nominal capital that are trying to avoid going up in smoke. Sorry Charlie,,,, smoke it is.

10/01 World economy sends up flares as manufacturing crisis hits U.S. – Bloomberg
So, who is going to see those flares and, ride to the rescue. It isn't going to be the IMF and SDR. The East won't accept that. Fracking is crashing and, America needs to import even more oil. Russia and China have bet on gold. Rubin got rid of America's gold. There were plenty on newspaper articles with pictures showing lots of army trucks driving away from Ft. Knox. As far as the gold in NYC, the treasury has admitted that it is in deep storage for it's rightful owners.

10/01 Major U.S. investors have billions at risk in Chinese stocks – Reuters
I suppose that we shouldn't blow up China.
10/01 Japan proceeds with twice-delayed sales tax hike as growth sputters – Reuters
Poverty is up, everything else is down,,, so, they raise taxes. Why do that? The BOJ is buying all GOV debt. They don't need taxes.
10/01 Japanese bond crash, margin call send shockwaves around the globe – Zero Hedge
You're going to hear a LOT about margin calls. You will see gold go DOWN in price. When you get a margin call, you sell what you CAN sell, not what you want to sell. You can always sell gold. Market dumping will lower the price of gold until it runs out. There are 100 owners for every 1 ounce of physical gold. The DOJ is using the RICO act against the gold manipulators. It will blow higher than the super caldera under Yellowstone.
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