OPEC is dead, and that’s the biggest news for oil in this new century.
Global stocks have started Friday the 13th on the wrong foot, with not only Hong Kong GDP unexpectedly tumbling by 0.4%, the worst print in years while retail sales fell for a thirteenth straight month in March, the longest stretch since 1999 as the Chinese hard landing spreads to the wealthy enclave, but also following a predicted collapse in Chinese new loan creation, which will reverberate not only in China but around the globe in the coming weeks. The latest overnight drop in the Yuan hinted that should the recent USD strength continue, China will have no choice but to repeat its devaluation from last summer and winter.
Unpersuaded by either the plight of the pensioners or the prospect of business growth in Arizona, Ducey vetoed gold. This is his second time to shoot down gold.
"I think we're at the cusp of a bear market in both stocks and bonds that will last up to thirty years. This is on a real basis, not on a nominal basis, inflation adjusted basis."
After issuing a record $1 trillion in combined bank and shadow loans in the first quarter which just like during the financial crisis provided a short-term catalyst for global growth (and sent China's debt/GDP to new all time highs) China's dramatic debt issuance binge is about to hit a brick wall. The reason: combined new loans in April by the Big Four state-owned banks were more than halved from March's level.
If we understand property taxes as a lease from the local government for the right to gamble on another housing bubble arising, we see "ownership" in a different light. As the saying goes, buyer beware, especially if there's no limit on how high desperate local governments can jack up their lease fees, i.e. property taxes.
Following last week's Sohn Conference, where the overarching theme was one of prevailing bearishness topped by Stanley Druckenmiller's near-apocalyptic forecast that only gold will be left standing after all confidence evaporates in the "magic people" known as central bankers, yesterday some 1,800 hedge fund industry executives gathered in Las Vegas at the SkyBridge Alternatives Conference or SALT, where the prevalent concern about the future of the world continued, driven primarily by worries about China.
If yesterday's selloff had a specific catalyst, namely some of the worst consumer retail earnings seen in years, it merely undid the Tuesday rally which levitated global risk with no fundamental driver, aside for a 200 pip spike in the USDJPY. Some central bankers may even say it was a "magical" levitation. Fast forward to the overnight session when following a muted Asian session, it was once again up to the "magical" USDJPY to send stocks well into the green without any actual catalyst whatsoever, but what merely appears to have been another "magical" intervention session by the BOJ.
Perhaps the world will have to wait it out to finally be graced with leaders who are willing to stand by their convictions and make hard, maybe even unpopular, choices. Such leaders might have to risk sacrificing everything political to be crowned the next true champions of conviction, giving us all a shot at a once again storied fate. Where does that leave us? Apparently angry. Very, very angry.
Had the federal government held a constant measuring stick rather than "tinkering, engineering, distorting" key government calculations such as the size of the economy (GDP), the rate of inflation, level of unemployment, or size of federal deficits and federal debt...the reality we face would be plain and honest choices needed. Instead, the responsibility of those working for "the people" has been breached via falsifying and distorting each of these (over decades). This consistently improves the output and does not allow a true means to quantify and qualify the nations health. Simply put, the government has continually tinkered, tampered, and distorted the accounting so as to mislead or create a falsely positive appearance.
"If investors’ confidence in central bankers’ judgment continues to weaken, the effect on gold could be very powerful. We believe the March quarter’s price action could represent something closer to the beginning of such a move than to the end."
The Top 0.1% create our “bubbles” and they create our “crashes”, and they engage in these cycles of financial crime purely for their own profit. We have long suspected this. Now we have proof that they create the crashes.
The promises made when there were 7 workers for every retiree cannot be kept when there are only 2 workers for every retiree. We need a complete system overhaul, and the sooner we face up to this sobering reality, the sooner we can start working on real solutions.
In what has been an approximate repeat of the Monday overnight session, global stocks and US futures rose around the world as oil prices climbed toward $44 a barrel, with risk-sentiment pushed higher by another plunge in the Yen which has now soared 300 pips since the Friday post-payroll kneejerk reaction, and was trading above 109.20 this morning. At the same time base metals regained some of Monday’s steep losses following Chinese CPI data that came in line while PPI declined for 50 consecutive months however showed a modest rebound from the prior month on the back of China's recent, and now burst, speculative commodity bubble.
In defending their long held short positions, the Comex Banks have now issued enough new contracts to drive total open interest back to levels not seen since 2011. Will they be successful in capping price or are they about to get a religious experience? We're about to find out.