Economic pressures

[Danny B]

Sorry Mikey,,, no can do. @3:20 they report that confidence is rising. NOPE. The lockdowns are what is coming.

[BroMikey]

80132dff4a29a71938d7d351b5db52ebdfe5908de4ca961fcee3e119ea5eff0c.jpg

Here is what is really happening with the TRUMP plan. Avoid this video if you are a skeptic. 10 min or so might be an overdose I know.

[Danny B]

David Morgan makes it pretty clear. The only reason that REPO demand is screaming up is because; the private, interbank REPO market is UNSECURED. Banks won't even loan overnight to other banks. When it comes to trust, the banks just don't trust each other. The FED REPO window is the only window with cash.
https://www.youtube.com/watch?v=x3NST0QI4XU
Don't worry about the banks. They have a plan.
Banker-heavy Biden cabinet ‘leak’ triggers outrage, echoes of Obama’s ‘Citigroup cabinet’

Ellen Brown;
"the stock market plummeted. Over the following week, the Dow Jones Industrial Average dropped by more than 3,500 points, or 10%. In an attempt to contain the damage, the Federal Reserve on March 3 slashed the fed funds rate from 1.5% to 1.0%, in its first emergency rate move and biggest one-time cut since the 2008 financial crisis. But rather than reassuring investors, the move fueled another panic sell-off.

Exasperated commentators on CNBC wondered what the Fed was thinking. They said a half-point rate cut would not stop the spread of the coronavirus or fix the broken Chinese supply chains that are driving U.S. companies to the brink. A new report by corporate data analytics firm Dun & Bradstreet calculates that some 51,000 companies around the world have one or more direct suppliers in Wuhan, the epicenter of the virus. At least 5 million companies globally have one or more tier-two suppliers in the region, meaning that their suppliers get their supplies there; and 938 of the Fortune 1,000 companies have tier-one or tier-two suppliers there. Moreover, fully 80% of U.S. pharmaceuticals are made in China. A break in the supply chain can grind businesses to a halt."
So what was the Fed’s reasoning for lowering the fed funds rate? According to some financial analysts, the fire it was trying to put out was actually in the repo market, where the Fed has lost control despite its emergency measures of the last six months. Repo market transactions come to $1 trillion to $2.2 trillion per day and keep our modern-day financial system afloat."
"As I explained in an earlier article, the private repo market has been invaded by hedge funds, which are highly leveraged and risky; so risk-averse money market funds and other institutional lenders have been withdrawing from that market. When the normally low repo interest rate shot up to 10% in September, the Fed therefore felt compelled to step in. The action it took was to restart its former practice of injecting money short-term through its own repo agreements with its primary dealers, which then lent to banks and other players. On March 3, however, even that central bank facility was oversubscribed, with far more demand for loans than the subscription limit."
"This continuing liquidity crunch is bizarre, as it means that not only did the rate cut not unlockadditional funding, it actually made the problem worse, and now banks and dealers are telegraphing that they need not only more repo buffer but likely an expansion of QE"

"The problem is in the collateral, which lenders no longer trust. Lowering the fed funds rate did not relieve the pressure on the Fed’s repo facility for obvious reasons: Banks that are not willing to take the risk of lending to each other unsecured at 1.5% in the fed funds market are going to be even less willing to lend at 1%."
The central bank has become the only game in town, and its hammer keeps missing the nail. A recession caused by a massive disruption in supply chains cannot be fixed through central-bank monetary easing alone. Monetary policy is a tool designed to deal with demand — the amount of money competing for goods and services, driving prices up
https://www.truthdig.com/articles/th...rus-explained/

3/10 Funding freeze getting worse: dealers demand record $216bn from Fed repo – ZH
3/10 New York Fed increases repo lending by 50% – GATA
3/10 Fed rates at 0% expected within months amid global bond frenzy – GATA
MY TAB JUST CRASHED AND, RESTORE DIDN'T KEEP IT ALL.

UK Health Minister Tests Positive For COVID-19; Bernie And Biden Cancel Rallies: Live Updates
So, what is that going to do for confidence?
Saudi-Initiated All-Out Oil War Could Lead To Collapse Of Kingdom Itself
3 months ago, Ex-CIA Chief Petraeus: Saudis "Running Out Of Money" & Urgently Need Aramco IPO Cash
The Saudi leadership may suddenly find that the internal situation in the Kingdom is being worsened by large-scale protests rapidly turning into an open civil conflict...
MbS started arresting other royals. He turned them all against him. 70 percent of working Saudis are employed by the government; They only show up for one hour a week. They can easily be turned against MbS now that the cushy jobs are vanishing.

"Dead Bat Bounce" Dies - Dow Futs Down Over 500 Pts, Treasury Yields Are Tumbling
As money seeks safe-haven treasuries, the interest earned on them falls. This creates deflation in available funds. This drives up the amount needed for REPOs.
Coronavirus Threatens To Crash The Gig Economy
"Seattle is rapidly approaching post apocalyptic ghost town levels. Pike Place and Westlake are the emptiest I’ve ever seen."
The Price of Homelessness: The Seattle area spends more than $1 billion a year on this humanitarian crisis

Only 4 Shale Drillers Are Still Profitable At $31 Oil
White House Promises "Cost Will Not Be A Barrier" For Coronavirus Care But Offers Few Details About "Bold" Trump Stimulus Plan
"President Trump said at Monday's coronavirus task force press conference that his administration will press lawmakers to enact a payroll tax cut and provide assistance to hourly workers to make sure no one is financially impacted by the coronavirus pandemic.

PRESIDENT TRUMP: We are going to take care of and have been taking care of the American public and the American economy. We are going to be asking tomorrow, we're meeting with the Senate and House Republicans to discuss a possible payroll tax cut or relief, substantial relief, it is a big number. We're also going to be talking about hourly wage earners getting help so they can be in a position where they're not going to ever miss a paycheck."
https://www.realclearpolitics.com/vi...lclearpolitics

February Heavy Duty Truck Orders Plunge, New 2020 Estimates Call For A 31% Drop
"Brace For Impact" - The Real Economy Is Degrading Very Quickly
"Deeper Than Corona" - The Real Causes Of The Oncoming Economic Collapse
Goldman: VIX Options Signal "Normalization Is Increasingly Distant"

[BroMikey]

Corona-market swings.
https://twitter.com/i/status/1237216338936029184

trish-regan-primetime.jpg

[Danny B]

I'll just post some headlines. MSM is pushing the panic button. It doesn't really matter if it is a false panic or not. Panic will affect the markets.
Dow Dumps 2000 Points, Markets Extend Losses After Circuit-Breaker
Market Crash Reveals The "Liquidity Problem" Of Passive Investing
Someone Just Bet That VIX Will Top 100 By Tomorrow
VIX is the fear gauge
Doug Kass: When Two Black Swans Collide
in scope and rapidity, the accumulated declines in bond yields and stock prices are unprecedented...
European Stocks Crash Most 'Since Lehman', Enter Bear Market
Global Recession "Appears Inevitable" - Guggenheim's Minerd Fears Cascading 'Butterfly Effect'
"This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

These Are The Banks With Most Energy Exposure




.. banks will need to reflect life time losses for their oil exposures at an oil price today that is roughly half of what it was on December 31,2019 when it ended the year at ~$66

"There Is No Liquidity" - Market Paralyzed As FRA/OIS Explodes
The Dow Is Down 8% - The Biggest Drop Since 1987
BMO: The Biggest Risk Is Not The Crash, But How Long Asset Prices Remain At Current Levels
3/09 Jim Cramer: coronavirus has brought about the end of monetary policy – CNBC
3/09 US stocks plunge as all-out oil price war adds to virus stress – CNBC
3/09 The fiscal & monetary responses Goldman expects will be launched any minute – ZH
3/09 VIX tops 60 – highest since 2008 – screams “intervene now!” – Zero Hedge
3/09 Market stress building at fastest pace since Lehman – Bloomberg
3/09 First time ever: entire yield curve crashes below 1.0% – Mish

3/09 New York Fed increases repo lending by 50% – GATA
3/09 Today might may end the pretense of a market economy – GATA



The Moscow Radiotechnical Institute of the Russian Academy of Sciences has registered a patent for a system of transmitting energy from an orbiting solar power plant down to the surface of the Earth, according to data on the website of Russia's Federal intellectual property service.

They're going to use microwave power.

The Air Force Research Laboratory (AFRL) in Albuquerque, New Mexico, in partnership with Northrop Grumman, is reportedly designing a sophisticated orbital technology that would allow the collection of enormous amounts of solar energy in space before beaming it down in concentrated form

WHY does this sound like duelling microwave wars?

[BroMikey]

White hats anticipated deep state's new strategies to get replacement money for sanctuary cities who have been cut off and at the same time ruin the Trump economy, all countermoves. Military planning at it's finest. Weaponized virus attacks thru the MSM democratic arm. Same dance different day. Deflate for a while and ride the Trump train up to 40 G's Don't buy, just sit home and pray, hoping you don't die soon Easy money for the machine.

[BroMikey]

CB rate cuts failed to ruin the market. FED corruption

[BroMikey]

Controlled DEFLATION so the bubble does not pop like the CB want's. Good plan huh?

[Danny B]

3/08 Fed chairman confirms Fed’s role as the great enabler – Advancing Time
OK, but, what are they going to do about it?
https://www.zerohedge.com/political/end-fed
3/08 Aramco slashes crude price, starting global oil war – Bloomberg
3/08 Russia just told the world, “no” – Tom Luongo
Russia is going head-to-head with OPEC.
3/07 Crude collapses since start of year: a credit implosion up next – Mish
Saudi Arabia Starts All-Out Oil War: MbS Destroys OPEC By Flooding Market, Slashing Oil Prices


3/08 “We are in an adverse feedback loop” as coronavirus hits consumer spending – ZH
More QE will fix everything.
3/07 Plunging yields force investors and Fed to rethink strategy – AP
NO WAY out.

Zero Hedge
Market Bloodbath: Middle East Stocks Crater; Kuwait Halted; Aramco Below IPO; Dow Indicated Down 500
"We see this panic-selling across the board taking certain markets to lows not seen even during the financial crisis."
Global Air Traffic Set For Worst Year On Record
Lebanon Announces Default On $1.2BN Debt Payment In Historical First
All Hospital Beds In The US Will Be Filled With Patients 'By About May 8th' Due To Coronavirus: Analysis
So, invest in beds.
"It's Like Scenes From A Mad Max Movie" - Americans Continue Epic Run On Costco

Putin Launches "War On US Shale" After Dumping MbS & Breaking Up OPEC+
Port Of Los Angeles Taking "Substantial Hit", Expects Volume To Plunge 15% From Coronavirus
Those 40 vessel cancellations would represent nearly 25% of our normal traffic."
"The Market Slump Is Just Beginning" - Covid-19 Is Not The Cause, It's The Catalyst
Former British Supermarket Boss Warns Of Potential Covid-19 "Food Riots", Army Patrols

This brings up the question of the effectiveness of lockdown. If you lockdown one area, everybody else is going to freak out. 5 million left Wuhan just before it was locked down.
Suppose that rumor about lockdown caused many millions to leave the cities. Just how much of this would it take to cause the city to become dysfunctional? Are regils / cites quarantined to stop the spread of disease?
Are cities quarantined to keep them from collapsing?

[Danny B]

I lean more towards technical issues.

The creation of the stock market was a confluence between; banks who had money to loan AND people who had good ideas that needed finance.
The DOTCOM crash was a confluence between venture capitalists AND people who had bad ideas.
If a widget sells for one dollar, nobody is going to break into a market trying to sell widgets for $2.
Therefore, the purpose of investment is to bring PRICE DEFLATION. Our standard of living goes up (materially) when prices go down.
Capitalism and the stock market function by raising our (effective) purchasing power so that we can live a more comfortable life. ALL the effects of price deflation are also dependent on adequate wages. There are no earnings in the stock market if wages are inadequate to support consumption. At one time, the stock market was a place for investors to earn money by betting on viable ideas/inventors.

With the State creation of the welfare-warfare, the dollar was debased until the gold standard was crashed. This unleashed monetary inflation that went directly to the speculators. Previously, the stock market was a place for investors. With unbridled monetary inflation, the stock market became a casino for speculators. The earnings from the stock market have to come from somewhere. Neither the State, the banks, nor the stock market are producers. The earnings of the stock market can only be squeezed out from the actual producer.
Regulatory capture guaranteed that the parasites would receive unlimited funding in the form of constant monetary inflation by the State. This was institutionalized by the jewish FED heads mandating that we have 2% per year price inflation. This was accomplished by continuous currency inflation. The State was willing to go along with this because all State bureaucracies grow by 6% a year. (Parkinson's Law). The State is primarily worried about STATE finance.
So, we got 6% a year currency inflation and, (reportedly) 2% price inflation. The 2% price inflation was baked-in-the-cake by statute and law.
Wage inflation WAS not baked into any cake. We must have excess income to provide the savings that banks use to invest in the stock market. Income and savings fell. The money renters were handed $trillions to keep speculation (not investment) going. The banks were handed a few $ trillion in excess reserves. ALL of this hot money floating around caused price inflation. Consumption and defaults rose. CBs worldwide created about $250 trillion in additional liquidity. $27 trillion was pumped into American markets. REPOs are running as high as $1 trillion a week.

The stock market is rising because of hot money pumped in. The rise has nothing to do with earnings.

[BroMikey]

Bro Mikey, we can write counterpoints to each other. You can be the good cop. I'll be the bad cop.

Consider these basic numbers:

In the 36 years from the end of World War II to Ronald Reagan’s inauguration in January 1981, the median compensation for American workers almost doubled; it went up about 100 percent. Meanwhile, the return on the S&P 500 over that period (with dividends reinvested) was 700 percent.

In the 39 years since, the median compensation of workers has inched upwards perhaps 30 percent. But during this time the S&P has gone up over 2,100 percent — that is, three times what it did in the decades after World War II."



After decades of attacks on unions, the U.S. has started to experience this dynamic. Corporate America has become ruthlessly successful at holding down the compensation of their workers and using the money saved for their own luscious, luscious profits.

Hi Danny, I am not well schooled in economics, however for the last 50 years of my life during my working years I watched Detroit's auto industry get smashed. Year after year a downward spiral til hardly any blue collar jobs left. So I say to you that first you have to have a job before you start worrying about who is getting the most.

Trump has created 1/2 a million jobs or better in 3 years. I live in Kansas now but back home where I am from in the metro area I am hearing for the first time since the 80's that GM and other auto companies are back. They are starting to build up the industry once again. Of course this will take 5-10 years to get it back full force but at least in 40-50 years we are seeing the start of a reversal. No one else but Trump could do that or would do this. The rest were bought and paid for errand boys. Traitor's. But the Trumplican.

Reagan got a bullet, Kennedy got a bullet for going against the flow, Daddy Bush was a trafficking drug lord who was finally executed for his treason. He tried to sacrifice his son or murder Jr. Clinton and Hillary are drug lords. Obama raised the debt by furthering the work of the previous presidents who are all scull and bones assets. The goal was and still is the destroy America. Not gonna happen.

[Danny B]

Bro Mikey, we can write counterpoints to each other. You can be the good cop. I'll be the bad cop.

"That’s not to say that great news for the stock market never matters for regular Americans. But when it does, it can be bad for most of us. The economic journalist Doug Henwood explains it straightforwardly: “The reason the stock market has done so well for all these years is precisely because the working class hasn’t.”

Consider these basic numbers:

In the 36 years from the end of World War II to Ronald Reagan’s inauguration in January 1981, the median compensation for American workers almost doubled; it went up about 100 percent. Meanwhile, the return on the S&P 500 over that period (with dividends reinvested) was 700 percent.

In the 39 years since, the median compensation of workers has inched upwards perhaps 30 percent. But during this time the S&P has gone up over 2,100 percent — that is, three times what it did in the decades after World War II."

“The rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin.”

The significance of this for the stock market is that the value of a stock is, in theory, the value of its current and future cash flow — essentially the value of the company’s profits. But as Smith wrote, high corporate profits aren’t a good sign for the rest of us.
The straightforward one is that profits are partly a measure of the bargaining power between workers and stockholders. In poor countries, workers are poor and have less leverage, so they can’t get their share of the money, leaving more left over for their employers.

After decades of attacks on unions, the U.S. has started to experience this dynamic. Corporate America has become ruthlessly successful at holding down the compensation of their workers and using the money saved for their own luscious, luscious profits.
Another way to look at the value of stocks is the ratio of the total market capitalization of publicly traded companies to the U.S. gross domestic product. This rarely reached 100 percent until the last 1990s. Before current selloff, the stock market was reporting that America’s public corporations are worth 200 percent of the U.S. GDP, the highest level ever.
The good news is that, again, the stock market has little direct relation to the underlying economy.
https://theintercept.com/2020/03/06/...arket-economy/
YOU can celebrate the rise in the stock market. I won't.

Remember that Armstrong predicts a collapse of government finance.
"More than a decade ago, I began warning of the risks of an inflating “global government finance Bubble”. Policy makers had resorted to an unprecedented expansion of central bank Credit and sovereign debt to reflate global finance (and economies). And for years policymakers have administered near zero rates and egregious “money printing” operations to sustain history’s greatest Bubble, in the process extending a dangerous cycle. The unprecedented inflation of government finance has been alarming enough. Yet I worry most about this “infinite multiplier effect” and how leveraged speculation infiltrated all nooks and crannies – as well as the very foundation - of global finance."

As far as I’m concerned, the evidence is indisputable: We have been witnesses to history’s greatest – and most precarious – globalized Bubble.
For those assuming this is equities bullish, I would offer some caveats. The Fed will be initially hesitant to open the flood gates, one reason being fear of spooking the markets. I could see the FOMC boosting their QE operations to $100 billion monthly at their meeting on the 18th. If, as I suspect, this operation has minimal impact on overall marketplace liquidity, markets will really begin to fret central bank impotence. And I’ll assume the Fed is pressed at some point to raise monthly QE operations to, say, $200 billion.
Indeed, the entire notion of open-ended QE and fiscal deficits creates acute market uncertainty. How does this melt-up in Treasury prices impact “carry trade” speculation in corporate Credit? The odds of the dreadful global “seizing up” scenario are rising. The Modern-Day Bank Run.
http://creditbubblebulletin.blogspot...-bank-run.html

The EU is in worse shape trying to maintain the status quo in the face of widespread change.
https://www.goldmoney.com/research/g...rus-end-the-eu
Jim Rickards, "The Fed is therefore trapped in a conundrum that it can’t escape. It needs to rate hikes to prepare for recession, but lower rates to avoid recession. It’s obviously chosen the latter option."
https://dailyreckoning.com/heading-i...nterest-rates/
3/06 Supply shock and a demand shock coming up – Mish
3/07 Investors see Treasuries tumbling to zero as the Fed fights coronavirus – LA Times
3/07 Wall Street is on notice: the rout isn’t going away – Bloomberg
3/07 Pandemic pandemania causes global economic crisis – Great Recession

HE 4,000 POINT FALL IN THE DOW IS THE MERE BEGINNING


The 14% fall in the Dow last week and similar in many markets around the world is the mere beginning. I warned investors about this stock collapse in recent weeks. In my article on Jan 26, I wrote “Stock Collapse and Gold Surge Imminent” and again on Feb 9, I said “The Crisis will Propel Gold and Sink Stocks”. We have last week seen the beginning of the stock collapse with a 4,000 point fall in the Dow. The gold surge is still to come.
So the coming economic downturn will see all bubble assets like stocks, bonds and property decline at least 90% in real terms. But although markets might bottom within say the next 5 years, the world economy might go along the bottom for a very long time, which could be decades. As always, historians will let the world know afterwards the extent of the coming downturn.
The EU is all but dead now.
https://www.goldmoney.com/research/g...rus-end-the-eu

[BroMikey]

Dow Jones steady climbing in the last 3 to 4 years since Trump came down the escalator. See chart.
Coronavirus dimishing already dropping fast buy stock now market will soar to record high's 40G's

https://www.reuters.com/article/us-h...-idUSKBN20S02J

China’s coronavirus epidemic, will likely see new infections drop to zero by the end of this month

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[BroMikey]

Coronavirus gonna git ya

6min of Sean H.

[Danny B]

Travel OR lockdown, that is the big question.


China and Italy locked down. It seems to be a postponement rather than a fix.
Waking Times is pushing the fear button on lockdown.
https://www.naturalnews.com/2020-03-...rtial-law.html
https://www.naturalnews.com/2020-03-...ail-roads.html
Paper shortage.
https://www.reuters.com/article/us-h...ource=facebook
Alternative.
https://www.youtube.com/watch?v=juilRGZXLwM
Armstrong;
"The power went out where my bank was for about a week. Without power, it became a cash-only society very fast if not instantly. There are two risks to digital currency: cyberattacks and power failures."
"Moving to electronic currency may be a desperate attempt to save socialism, but it would also open the door to sophisticated cyber attacks to undermine that economy."

"The EU held an emergency meeting in Brussels today regarding actions required in order to tackle the coronavirus. Meanwhile, the German health minister has ruled out the possible prevention of travel within the EU to curb the coronavirus.
Iran has stated they could be subjected to using force to stop travel due to the global pandemic."

"China’s economy could be contracting this year for the first time since the 70s, according to analysts, as the country grinds to a halt due to the coronavirus. The Caixin purchasing managers index dropped drastically to 26.5 from 51.6," "The EU-India summit, which was scheduled for the 13th of March in Brussels, has been put on hold due to the spread of the coronavirus."
OK, when do they stop all meetings in Brussels?

The Central Bank "put" removed all risk and moral hazard. The coronavirus is bring them back.
https://www.zerohedge.com/markets/de...xogenous-shock
Big world changes were on theri way before the pandemic. Now, they are accelerating.
https://capitalistexploits.at/these-...lobal-markets/

Zero Hedge;
With VIX Hitting 50, The Fed Must Now Step In Or A Catastrophic Crash Is Inevitable
Carnage: Credit, Crude, & The Yield Curve Crushed As Fed Admits "Credibility Eroding"
Boston Fed's Rosengren Says Fed May Soon Have To Buy Stocks
The BOJ already bought 70% of exchange traded funds. The FED can just buy up everything.
Bank Of America: "We Are In A Global Recession"





Officials Resist "Disruptive And Costly" School Closures Over Coronavirus
"Today Will Be A Regretful Day" - Oil Prices Have Collapsed After OPEC+ Talks End Without A Deal
"...the draft communique read like divorce papers."

HI And MD both declare state of emergency as US CV infections explode to 226 - An Air
Traffic lockdown Will Likely Be coming soon Pandemic projection model shows 2.16 million deaths in US by July 4th if nothing Is done to halt nearly all domestic travel
Seattle Post Front Page Asks If Seattle Should Should Try A Total City Lockdown Like Wuhan!