From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
Latest News From March 25, 2016 to March 31, 2016:
- Negative Interest Rates: Causes, Consequences and Ramifications
Central Banks are under the mistaken belief that negative interest rates could be the magic kiss which turns their toad economics into Prince Charmings. Why exactly do they think this? What makes Draghi, Kuroda, and others think imposing negative interest rates will stimulate credit and lending in their respective economies? It is important to understand the logic behind this historic moment in global monetary history. Negative interest rates are unprecedented and show how far we have gone off course in terms of policy related to money and credit markets. They are already having a tremendous effect in several European countries and Japan, and they may eventually be coming to the US. Negative rates hold significant future implications for gold as well.
- SunEdison shares tumble 55% on bankruptcy filing fears
Shares of renewable power firm SunEdison plummeted 55% Tuesday as it teetered on the edge of bankruptcy amid slumping oil prices and swirling questions over the company’s accounting practices. SunEdison faces a “substantial risk” of bankruptcy, according to the U.S. Securities and Exchange Commission filing by a subsidiary, TerraForm Global. SunEdison develops, installs and operates alternative energy projects.
- 23 Percent Of Americans In Their Prime Working Years Are Unemployed
Did you know that when you take the number of working age Americans that are officially unemployed (8.2 million) and add that number to the number of working age Americans that are considered to be “not in the labor force” (94.3 million), that gives us a grand total of 102.5 million working age Americans that do not have a job right now? I have written about this before, but today I want to focus just on Americans that are in their prime working years. When you look at only Americans that are from age 25 to age 54, 23.2 percent of them are unemployed right now. The following analysis and chart come from the Weekly Standard…
- Dallas Fed Respondent Sums It Up: “Anyone Saying We’re Not In Recession Is Peddling Fiction”
Headlines will crow of the seasonally-adjusted ‘beat’ of expectations for the Dallas Fed survey (-13.6 vs -25.8 exp) but this is the 15th month in contraction (below 0) – something only seen in recession. Scratching below the surface we see employees, workweek, and capex all in contraction and forward expectations for new orders and employment tumbled. Perhaps that reality is what drove one respondent to rage, “anyone who says the economy is not in recession is peddling fiction.”
- Q1 GDP Crashes To 0.6%: Latest Atlanta Fed Estimate
Earlier today we said that following the abysmal January spending data revision that “the Atlanta Fed will have no choice but to revise its Q1 “nowcast” to 1.0% or even lower, which would make the first quarter the lowest quarter since the “polar vortex” impacted Q1 of 2015, and the third worst GDP quarter since Q4 2012. It means one-third of already low Q1 GDP growth has just been wiped away.” It was “even lower.”
- US Goods Trade Balance: Exports Stabilise at Low Levels
There was a small recovery in exports for February, which offers some hope that the sector has bottomed out. The latest US trade deficit for goods increased slightly to US$62.9bn for February, from a revised US$62.2bn the previous month and was slightly above the consensus US$62.4bn. Compared with February 2015, there was a widening of over US$7bn in the deficit.
- Chinese Seizing Golden Opportunity; Gold Demand Surging
Generally speaking, rising prices tend to temper demand, but when it comes to gold in China, the recent price rally has created the opposite effect. As the Wall Street Journal put it, “Chinese investors see a golden opportunity.” Demand for gold has surged in China over the last several weeks, during a period generally considered out of season. And it’s not typical Chinese jewelry purchases driving the demand. Chinese investors are buying gold coins and bars.
- Seven years after the Great Recession, some Chicago suburbs may never recover
Mitchell and Loria Versher say they were looking for one thing when they bought their first home in South suburban Markham: “Stability.” They might have been better off buying swampland in Florida. In retrospect, July 31, 2007, was a bad day to go shopping for property anywhere. But the modest 900-square-foot Cape Cod-style home the Vershers bought that day for $137,000, on the eve of the worldwide credit crunch, has fared especially badly, by any standard.
- How They Brainwash Us — Paul Craig Roberts
Anyone who pays attention to American “news” can see how “news” is used to control our perceptions in order to ensure public acceptance of the Oligarchy’s agendas. For example, Bernie Sanders just won six of seven primaries, in some cases by as much as 70 and 82 percent of the vote, but Sanders’ victories went largely unreported. The reason is obvious. The Oligarchy doesn’t want any sign of Sanders gaining momentum that could threaten Hillary’s lead for the Democratic nomination.
- Heidi Cruz: Her Evil Past Is Now Being Revealed
While I am aware that Heidi Nelson Cruz apparently does suffer from deep depression, just after Hillary Rodham Clinton, she is the next person to be feared the most in this presidential race for 2016. Yes, I believe in common decency, but I also stand for the dignity of women, which means that they must be respected and treated equally even if it requires the truth. In an article written by Jesse Byrnes for The Hill that was released today on March 25, 2016, under the title “Trump aide fulfills threat to ‘spill the beans’ on Heidi Cruz,” he reports on the recent interview on MSNBC that Steve Kornacki had with Katrina Pierson who is an aide for Donald Trump.
- Chemtrail Flu: Have You Got It Yet?
Pastor Williams: ‘There is a near epidemic going on in America.’ ‘You’re sick. Your nose is stuffy. Your body aches, You’re sweaty, coughing, sneezing and you don’t have enough energy to get out of bed. It’s not the flu. It’s a conspiracy, according to Dr. Len Horowitz. His opinion is not based on conspiracy theory but on conspiracy fact. Over the past 10 years, Horowitz has become America’s most controversial medical authority. A university-trained medical researcher, Horowitz, 48, charges that elements of the United States government are conspiring with major pharmaceutical companies to make large segments of the population sick. The mainstream media is reporting that hospital emergency rooms are jammed with patients suffering from a bizarre upper respiratory infection that doesn’t quite seem like a virus. They are reporting that it’s a “mystery” flu and that the flu vaccines are ineffective against it. “That’s all hogwash, bogus nonsense”, says Dr. Leonard Horowitz.
- HARRY DENT: Civil unrest is coming to America
I made a confession to our Boom & Bust subscribers last month. While I generally advise against owning most real estate, I have a secluded property in the Caribbean. It’s the only property I own (I rent my home in Tampa), and I know for a fact that its value will probably depreciate in the great real-estate shakeout I see ahead, though most likely by half as much as a high-end property in Florida. I own this property because I see rising chances for civil unrest in the inevitable downturn ahead, especially in the US. I want a place to go if things get really bad, and it looks increasingly likely that they will. The evidence for that is piling up in this year’s presidential race.
- Is This The Debt Jubilee?
Not so long ago the financial world viewed certain numbers as limits beyond which lay trouble. Interest rates near zero, for instance, were thought to risk destabilizing the banking system. And government fiscal deficits above 3% were considered so dangerous that exceeding this level was prohibited by the Maastricht treaty that all eurozone members were required to sign. Those numbers — 0% and 3% — are still considered bad. But now for the opposite reason: They’re insufficiently aggressive. A big part of the world, as everyone now knows, operates with negative interest rates. And prominent economists are urging even greater negativity as a way to make government debt profitable and get people borrowing and spending again.
- Empty Buildings and Wasted Debt: The Chinese Economic “Miracle”
There’s no doubt that the Chinese economic miracle is real. When you move 500 million people from rural to urban settings, taking them from small farms and putting them in a specialized labor force, the economic dividend is massive. That’s how you keep GDP growing more than 7% for 25 years. But along the way, they wanted more. Beyond building factories and housing for new arrivals, local politicians started building massive, wasteful projects. Political meeting halls… Unused apartment buildings… Empty shopping malls… Part of it might have been poor economic planning, but a bigger, and more common, problem was at work.
- Global Economy Dying Pig-No More Rate Hikes-Rob Kirby
Macroeconomic researcher Rob Kirby predicted the Federal Reserve’s interest rate increase late last year “would be one and done.” Kirby explains, “They had no business raising rates in the first place because the economy was not exhibiting enough strength to warrant any rate raises whatsoever, and there won’t be any more interest rate raises because the economy continues to roll over. Doctored economic data cannot make the sick pig that the global economy really is look any better. It doesn’t matter how much lipstick you put on that dying pig. It’s still a dying pig.”
- Mitsui Sees First Loss Since 1947 Amid $2 Billion Writedown
Mitsui & Co., Japan’s second biggest trading house, forecast its first net loss since it was founded in its modern form in 1947 due to impairment charges on mining and energy projects from South America to Australia. The Tokyo-based trading house expects a net loss of 70 billion yen ($623 million) in the fiscal year ending March after booking impairment charges of 225 billion yen on assets including the Browse LNG project in Australia and the Caserones copper development in Chile, according to a statement Wednesday. Mitsui previously forecast net income of 190 billion yen.
- This Game’s Almost Over: Central Banks Are Running Out Of Options
Going into last week’s Fed meeting, the general consensus was that they would not raise rates. When they hiked rates by a quarter point in December, they projected there would be four additional quarter-point raises in 2016. That’s starting to look fishy as we’re almost a quarter of the way through the year and there’s still no hike. Sure enough, the Fed left rates unchanged as expected last week, and revised their rate expectations lower through 2016. Now, they anticipate only hiking another half point by the end of the year.
- The reserve currency curse
Is reserve currency status a blessing or a curse? The answer might seem obvious, as reserve currencies have been shown to confer lower borrowing costs on their issuers. But what of the borrower who, enticed by low interest rates, borrows more than they can pay back? Naturally the result will be a default. However, for the issuer of a reserve currency that is unbacked by a marketable commodity, such as gold, in the event that they borrow too much, they can just print more reserves. While this avoids default indefinitely, it also hollows out the economy, erodes the capital stock, reduces the potential growth rate and, eventually, leads to a dramatic devaluation of the currency and loss of reserve status. History has not been kind to countries that have followed this path, nor to their financial markets. In my view, the grave investment risks associated with the possible eventual loss of the dollar’s reserve status are not priced into financial markets.
- Well That Didn’t Work
The Bank of Japan and European Central Bank eased recently, which is to say they stepped up their bond buying and/or pushed interest rates further into negative territory. These kinds of things are proxies for currency devaluation in the sense that money printing and lower interest rates generally cause the offending country’s currency to be seen as less valuable by traders and savers, sending its exchange rate down versus those of its trading partners. This was what the BoJ and ECB were hoping for — weaker currencies to boost their export industries and make their insanely-large debt burdens more manageable.
- Belgium Terror Just the Beginning of Insecure World-Egon von Greyerz
Financial expert Egon von Greyerz (EvG) says terror attacks, like the one that just happened in Brussels, can destabilize the entire world. EvG, who lives in Switzerland, explains, “This is obviously a very sad day for our friends in Belgium, but at the same time, we know this is just the beginning, not only in Europe, but with the whole world. We are going to see a much more insecure world. It is worldwide. We know that the refugee problem has included a number of potential terrorists. . . . The problems that will be in the west were created by the U.S. and Europe. The problems that were created in the Middle East and North Africa will lead to more of this. There is anarchy in Libya. There is anarchy in Iraq, and the West has created this. So, they are paying us back, and I don’t think this is finished. We will see a less secure world, and it is not just Europe. The U.S. will see similar problems.”
- Central Banks Move Into Crypto-Currencies As Part Of Cashless Society Hustle
Top UK Telegraph journo Ambrose Evans-Pritchard just wrote about this planned crypto-currency in what is either an incredibly stupid and uneducated article or pure propaganda… it was titled “Central banks beat Bitcoin at own game with rival supercurrency.” The article is horrible central bank happy-talk that reads like the Bank of England wrote it for him and starts off with a blatant lie only three words in… this new RScoin, put out by the central bank of England, has not BEAT bitcoin. It is worse in every imaginable way than bitcoin… right down to the name. RScoin… central banker types aren’t exactly the most creative. We’ll call it FiatCoin around here.
- Lloyd’s of London Takes `Massive Hit’ From Low Returns
Lloyd’s of London reported a 30 percent drop of full-year profit as the world’s largest insurance market was hurt by continued pressure on pricing and the lowest investment returns since at least 2001. Earnings declined to 2.1 billion pounds ($3 billion) for 2015 as income from investments, primarily in fixed income, sank 60 percent to 400 million pounds with the majority earned in the first half of the year, according to the company’s annual report Wednesday. Weaker insurance pricing in 2015 is expected to continue this year, hurting profitability. “We’ve taken a double hit from reduced margins in underwriting and lower investment yield,” Chief Executive Officer Inga Beale said in an interview with Bloomberg Television Wednesday. “On the investment side we saw a dramatic reduction in 2015 that was a massive hit” to earnings.
- Economic Collapse: Marc Faber Issues Dire Warning for America
U.S. on Verge of Economic Collapse, Says Marc Faber. Adding more emphasis on his belief that the U.S. is on the verge of an economic collapse, perma-bear investor Marc Faber advised retail investors not to put money in U.S. stocks; instead, according to Faber, investors should pour their funds into emerging market equities. The publisher of The Gloom, Boom & Doom Report newsletter told Bloomberg that U.S. stocks are highly priced by several measures, including price-to-sales, price-to-earnings, and market cap-to-gross domestic product (GDP) ratios, whereas emerging markets have corrected significantly since 2006 and 2011.
- U.S. Mining Losses Last Year Wipe Out Profits From Past Eight Years
The U.S. mining industry—a sector that includes oil drillers—lost more money last year than it made in the previous eight. Mining corporations with assets of $50 million or more recorded a collective $227 billion after-tax loss last year, according to Commerce Department data released Monday. That loss essentially wipes out all the profits the industry had made since 2007.
- Here We Go Again: Government Ramps Up Borrowing As Private Sector Slows
This morning, US existing home sales plunged and the Chicago Fed’s national activity index turned negative. Both are obvious signs of a slowing economy. Anticipating this kind of news, Credit Bubble Bulletin’s Doug Noland in his most recent column analyzed the Federal Reserve’s quarterly Z.1 Report for signs of changing financial trends, and found something potentially serious.
- Michael Hudson on Debt Deflation, the Rentier Economy, and the Coming Financial Cold War
Michael Hudson has sent us the transcript of his newly-released interview with Justin Ritchie on
February 26 with XE Podcast
- NIRP Is Absolutely Crushing Big Parts Of The Finance World
Savers are the obvious victims of the past few years’ plunge in interest rates. But there are other casualties, including money market funds, which have no reason for existing if their yield is negative, and insurance companies, which price their policies on the assumption that they’ll earn good returns on their bond portfolios. As bond yields plunge, the returns insurance companies can expect are also plunging, forcing them into huge write-offs and, soon, steep premium increases that will scare away customers.
- US Military Increases South China Sea Presence; China Balks
In response to China’s assertive moves in the South China Sea, the U.S. State Department struck a deal with the government of the Philippines to permit American military forces to operate from five Philippine bases. The Chinese seem more annoyed than intimidated by the increased American military presence in the region.
- Interest Rates Are Never Going Back to Normal
Let’s see… U.S. corporate earnings have been going down for three quarters in a row. The median household income is lower than it was 10 years ago. And now JPMorgan Chase has increased its estimated risk of a recession to about one in three. These things might make sober investors wonder: Is this a good time to pay some of the highest prices in history for U.S. stocks? Apparently, they don’t think about it… Last week U.S. stocks rose again, after the Fed announced that it would go easy on “normalizing” interest rates. The Dow rose 156 points on Thursday, putting it in positive territory for 2016.
- The Government Wants to Give You Free Cash
Could the government start handing out free cash? It sounds crazy. But believe it or not, it’s a real possibility. In fact, an Ivy league economist just predicted it will happen within five years… If you’ve been reading the Dispatch, you know the Federal Reserve has used crazy monetary policies to “stimulate” the economy since the 2008 financial crisis. These policies have been huge failures. After seven years, the U.S. economy is barely growing. Yet, instead of acknowledging its failure, the government is preparing to double down. And its friends in the lapdog media think it’s time for “helicopter money.”
- Gold and Gold Stocks – A Change in Market Character
Similar to many others, we have been waiting for some sort of correction in gold and gold stocks, but obviously, not much has happened in this respect so far. We have written quite a lot about gold and gold stocks between August 2015 and February 2016, because we felt a good opportunity was at hand – a short term trading opportunity at the very least, but one with the potential to become more than that.
- NATO’s RAGE: Trump Questions America’s Role in ‘Nation-Building’ – Talks of Restoring Russian Ties
GOP presidential frontrunner Donald Trump unveiled his noninterventionist platform to The Washington Post’s editorial board and in the process – questioned America’s relationship with the North Atlantic Treaty Organization…
- China Sends Fed A Warning: Devalues Yuan By Most In 2 Months
With the USD Index stretching to its longest winning streak of the year, jawboned by numerous Fed speakers explaining how April is ‘live’ (and everyone misunderstood the dovishness of Yellen), it appears that The PBOC wanted to send a message to The Fed – Raise rates and we will unleash turmoil on your ‘wealth creation’ plan. Large unexpected Yuan drops have rippled through markets in recent months spoiling the party for many and tonight, by devaluing the Yuan fix by the most since January 7th, China made it clear that it really does not want The Fed to hike rates and cause a liquidity suck-out again.
- This map shows every country’s major export
Bank of America Merrill Lynch is out with its “Transforming World Atlas” research note, which examines global economic trends through a series of maps. One particular map that stood out showed each country’s major export, using data from the CIA World Factbook. Notably, many countries heavily rely on commodities as their primary source of foreign income. Consequently, one can use this as a map to see which country gets hit the hardest when commodities drop. For example, those in navy were hardest hit by the oil crash.
- These are the fastest growing and shrinking counties in America
The American population is always changing in various ways. The Census Bureau recently released their annual estimates of population change in the 3,142 counties and county equivalents of the US, showing how populations grew and shrank between July 1, 2014, and July 1, 2015. Using those estimates, we made a map showing the total population change in each county. Red counties had a loss of population, and blue counties saw increases. As has been the overall trend for decades, the Northeast and Midwest tended to see a loss in population, while the big cities of the South and West, along with oil-rich regions in west Texas and North Dakota, saw big increases.
- HEDGE FUND MANAGER: This is ‘no longer an investment market but a battlefield’
London-based hedge fund manager Crispin Odey, who runs $11 billion in assets, said this is “no longer an investment market but a battlefield.” In Odey’s OEI Mac fund’s February investment update, Odey slammed central banks for lowering or not raising interest rates. “Several years of watching central banks watching central banks responding to ever falling productivity numbers by reducing interest rates have shown that they can effect asset prices with their actions, but that not only do they have almost no effect on economic activity, but they positively damage it,” Odey said. This year has been brutal for Odey. The OEI Mac fund, which invests in Odey’s flagship European fund, finished January up 8.3% before seeing all its gains wiped out after falling -10.6% in February.
- Swiss National Bank Admits It Spent $470 Billion On Currency Manipulation Since 2010
By now it is common knowledge that when it comes to massive, taxpayer-backed hedge funds, few are quite as big as the Swiss National Bank, whose roughly $100 billion in equity holdings have been extensively profiled on these pages, including its woefully investments in Valeant and the spike in its buying of AAPL stock at its all time high. But while the SNB’s stock holdings are updated every quarter courtesy of its informative SEC-filed 13F (we wish the Fed would also disclose the equities it holds courtesy of its Citadel proxy), getting a gllimpse of the flow is more problematic, and involves waiting for the hedge fund’s, pardon central bank’s annual report. Earlier today patience was rewarded when the SNB filed its 108th annual report, in which it disclosed that it spent CHF 86.1 billion or $88 billion, on current interventions last year, a measure of its efforts to shield the economy from deflation.
- This Is One Of The Most Important Silver Charts Of 2016!
On the heels of gold and silver continuing to consolidate their gains from the early part of 2016, analyst David P. out of Europe sent King World News an extremely important chart of silver, along with a brief commentary. The following long-term silver chart and commentary was sent to KWN by analyst David P. out of Europe: “The silver chart looks incredibly bullish. The buy signal on the MACD has confirmed the upward move and just look at the setup.”
- Desperate Chinese Investors Flood US, Canadian Housing Markets, But Real Numbers Are Taboo
Buying a home in the US or Canada has been an effective way for foreign residents to launder some money and get their wealth out of harm’s way. In the trophy markets on the US West Coast and in the Canadian cities of Vancouver and Toronto, rumors of a massive influx of Chinese money have swirled with growing intensity for years. The Chinese economic elite are worried about a devaluation of the yuan. They’re worried about getting rolled up by their own government. They’re worried about markets collapsing. They’re worried about pollution. They’re worried about a million things. They have one foot out the door. If push comes to shove, they’re ready to make the move. So capital flight from China has turned into a tsunami. And this money has to go somewhere.
- Oman Gas Projects Could Undermine U.S. LNG Market Ambitions
Two separate projects in the sultanate of Oman are about to turn the tiny Gulf country into an important international liquefied natural gas (LNG) player that the U.S. will have to contend with in its ambition to become the leader of this market. The first one is an agreement with Iran for the construction of a 400-kilometer pipeline that will transport Iranian natural gas to be liquefied at the three-train processing facility of Oman LNG.
- What Is Happening With GLD And Emerging Markets?
The following charts and commentary are from Jason Goepfert at SentimenTrader: ETF traders keep coming into gold. The GLD fund is seeing inflows even as the fund struggles to hold its gains.
- BERNANKE: Here are some of the exotic tools the Fed could use if we see another slowdown
Although the U.S. economy appears to be on a positive trajectory, history suggests that at some time in the next few years we may again face a slowdown, with a weakening job market and possibly declining inflation. Given that the historically low level of short-term interest rates is likely to limit the scope for conventional rate cuts, how would the Federal Reserve respond?
- Bank Earnings Get Mauled by “Leveraged Loan” Time Bomb
Banks have a few, let’s say, issues, among them: a source of big-fat investment banking fees is collapsing before their very eyes. S&P Capital IQ reported today that there was an improvement in the “distress ratio” of junk bonds, after nearly a year of brutal deterioration that had pushed it beyond where it had been right after Lehman’s bankruptcy. The recent surge in oil prices seems to have lifted all boats for a brief period. But not “leveraged loans.” Their distress ratio spiked to the highest levels since the Financial Crisis!
- “The Greatest Crash Of Your Life Is Just Ahead…” – Harry Dent Warns
Harry Dent, best-selling author and economist, has warned that the stock bubble in the U.S. today is the biggest in history and that the “greatest crash of your life is just ahead…” Writing on his website EconomyandMarkets.com, Dent warned that ‘The story on Wall Street and CNBC continues to be that we’re in a correction and this is a buying opportunity. Even Warren Buffett joins the chorus of stock market cheerleaders for the skeptical public. Well, I agree with the skeptical public, not the experts here! The bull market from early 2009 into May 2015 looks just like every bubble in history, and I’m getting one sign after the next that we did indeed peak last May.
- Keiser Report: Warnings from Confucius
In a double-Stacy episode, we look at the warnings from Confucius and Adam Smith. First, we look at the danger of those who think but do not learn; so ‘free trade’ deals are imposed because a ‘think tank’ believes it’s a great ideological idea but without looking at history to see what happens when wealth and hope are taken from an entire class of people. Then, in the second half, we look at the most important issue of 2016: creeping monopolization as oligopolies emerge in every major sector in America and across the world.
- Top Advisor To Largest Sovereign Wealth Funds Exposes Fed Manipulation And Intervention
Michael Belkin on the Fed’s interventions and manipulations: “I’m utterly convinced that the Federal Reserve manipulates the stock market. I experienced this firsthand when I worked at a government securities dealer, Solomon Brothers, which was one of the top three investment banks back in the 1980s and early 1990s. And in the 1987 stock market crash, they (the Federal Reserve) came in through us and intervened in the markets to make the markets bounce back. Everybody on the desk knew that. They (at Solomon’s trading desk) watched the (Solomon Brothers) Vice Chairman start bidding for multiple huge blocks of stock with money that we didn’t have. At that point the trading desk was paralyzed and nobody knew what was going on.
- This Oil Sector Hasn’t Crashed Yet… But It’s About to
Unlike the rest of the oil industry – which has been decimated by lower oil prices – U.S. oil refiners have marched on to new highs. But the five-year-long bull market for these companies is about to come crashing down. Let me explain… You can see the incredible uptrend in the following chart of refining giant Valero Energy (VLO). Its shares are trading near an all-time high…
- Oil Prices Fall Fast On Huge Inventory Build
Two hundred and twenty-two years after Josiah G. Pierson patented the rivet machine, and the oil market remains as riveting as ever. (I’m here all week, folks). After yesterday’s API report gave a flourishing hat-tip towards a large build to crude stocks and a large draw to gasoline, oil is sliding amid a stronger dollar, while gasoline is pushing higher. Here are some things to consider today: Jumping straight into economic data, the most insights we’ve had overnight have come from Brazil. Its mid-month inflation print dropped into single digits (at +9.95 percent), but still close to a 12-year high. Meanwhile, its unemployment rate jumped to 8.2 percent, its highest level in nearly 7 years.
- There has been ‘a perfect storm’ on Wall Street
By now it should come as no surprise that first-quarter results will be pretty horrendous for Wall Street. Banks will begin reporting Q1 earnings in mid-April, and a chorus including Morgan Stanley’s head of trading and the CEO of JPMorgan’s investment bank has warned that it will be unusually weak. The data-analytics firm Dealogic’s preliminary Q1 results for investment-banking fees show the worst first quarter since the dark post-financial-crisis days of 2009.
- Gold, Silver & The Final Currency War
Andy Hoffman from Miles Franklin is back to help document the global economic collapse for the third week of March, 2016. Thanks for tuning in. And despite the horrific “terror attack” in Belgium today, March 22, 2016 [Google: 322 Skull and Bones], I hope you all have a great week.
- Peter Schiff on gold, the Fed and the world’s addiction to stimulus
Peter Schiff is the CEO of Euro Pacific Capital Inc., and is an outspoken critic of the Fed’s stimulus and zero interest rate policies. He is the author of several New York Times bestsellers including Crash Proof, and most recently, The Real Crash.
- More Confessions of an Economic Hit Man: This Time, They’re Coming for Your Democracy
Twelve years ago, John Perkins published his book, Confessions of an Economic Hit Man, and it rapidly rose up The New York Times’ best-seller list. In it, Perkins describes his career convincing heads of state to adopt economic policies that impoverished their countries and undermined democratic institutions. These policies helped to enrich tiny, local elite groups while padding the pockets of U.S.-based transnational corporations.
- Japan Goes Full Krugman: Plans Un-Depositable, Non-Cash “Gift-Certificate” Money Drop To Young People
The Swiss, the Finns, and the Ontarians may get their ‘Universal Basic Income’ but the Japanese are about to turn the Spinal Tap amplifier of extreme monetary experimentation to 11. Sankei reports, with no sourcing, that the Japanese government plans to unleash “vouchers” or “gift certificates” to low-income young people to stimulate the “conspicuous decline” in consumption among young people. The handouts may not be deposited, thus combining helicopter money (inflationary) and fully electronic currency (implicit capital controls and tracking of spending).
- Durable-Goods Orders Weaken Amid Global Headwinds
A key measure of U.S. manufacturing health tipped back into decline last month, evidence that headwinds from weak global growth, low oil prices and financial volatility are weighing on company spending. New orders for durable goods—products designed to last at least three years, like dishwashers and aircraft—fell a seasonally adjusted 2.8% in February from a month earlier, the Commerce Department said Thursday.
- The Initial Jobless Claims Mystery Continues
Still hovering near 43 year lows, initial jobless claims printed a better than expected 265k against expectations of 269k. Continuing claims also dropped from 2.218m to 2.179m – also back near 43 year lows. So, the mystery is – why is the ISM’s composite manufacturing and services employment index collapsing to 6 year lows?
- The labor market just did something that hadn’t happened since the 1970s
Thursday’s initial jobless claims came in stronger than expected, with 265,000 claims versus expectations of 269,000. But the truly historic part of the report actually came three weeks ago. “Today’s release also includes revisions of both initial and continuing claims dating back to 2011,” Thomas Simons, senior economist at Jefferies, wrote. “Most of the changes were relatively modest, but the most notable aspect of the revisions is that claims for the week of March 5th (3 weeks ago) were revised down to 253,000 which is, as far as we can tell, the lowest weekly claims figure since November 24, 1973.”
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