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August 20, 2019 | Italy’s Gov’t Collapses, Prime Minister Resigns: What’s it Mean? What’s Next?

Italian Prime Minister Giuseppe Conte announced his resignation in the Italian Senate ending the coalition government. Odd Couple Fails Italy’s “odd couple” government, an alliance between Left-wing M5S party and the Right-Wing League party collapsed today. The collapse was long in the making as the only thing the parties had in common was an anti-immigration […]

August 19, 2019 | National Average Rent Inches Up by $3 Per Month

The increase in national average rents slowed to a crawl in July but year-over-year rates are up 3.4%. As the peak rental season is nears its end, the Rent Cafe reports Apartment Rent Increases Lose Steam. Key Takeaways The national average rent reached $1,469 in July, up by 3.4% ($48) year-over-year, and 0.2% ($3) month-over-month, according […]

August 16, 2019 | Gold is Not a Function of the US Dollar Nor is Gold an Inflation Hedge

Swings in the US dollar have no long-term impact in the price of gold. Nor is gold an inflation hedge. Three Points December 2004: US Dollar Index 108, Gold $435 April 2009: US Dollar Index 108, Gold $883 November 2014: US Dollar Index 108, Gold $1182 Gold vs Trade-Weighted Dollar Index 1973-Present While gold generally […]

August 14, 2019 | “Zero Has No Meaning” Says Greenspan: I Disagree, So Does Gold

Negative yields? Who cares says Greenspan. It’s meaningless. Negative Yields “No Big Deal” Former Fed Chair Alan Greenspan sees No Barriers to Prevent Negative Treasury Yields. Former Federal Reserve Chairman Alan Greenspan says he wouldn’t be surprised if U.S. bond yields turn negative. And if they do, it’s not that big of a deal. “There is […]

August 13, 2019 | More Currency Wars: Swiss Central Bank Poised to Cut Interest Rate to -1.0%

The Swiss national bank is not happy with appreciation of the Franc. Its solution is likely another rate cut to -1.0%. Bloomberg reports SNB Likely to Follow Interventions With Interest-Rate Cut. The Swiss National Bank may have to do more than pump billions into foreign exchange markets into prevent the franc from appreciating to a damaging […]

August 12, 2019 | Monetary Madness: Inverted Negative Yields in Germany, Negative Rate Mortgages

Monetary madness hit new extremes. Mortgage rates are -0.5% in Denmark. In Germany, a negative-yield curve inverts. This morning, the German 3-month bond yield is -0.558% while the 10-year bond yield is -0.593. Thus 10-year bonds yield less than 3-month bonds (inversion), while the whole curve is negative. Never Cheaper to Borrow Meanwhile, Jyske Bank, […]

August 11, 2019 | Millions of Brexit Coins to Be Minted for October 31 EU Independence Celebration

Plans for “Peace, Prosperity, and Friendship” coin are underway in the UK. They will be minted in time for Brexit Day. The Telegraph reports Millions of Brexit 50p Coins to be Minted in Time for October 31. Millions of special 50p Brexit coins are to be minted and ready to spend in time to mark Britain’s […]

August 9, 2019 | Brink of a Global Recession: UK and Germany in Contraction

The UK economy shrank by 0.2% between April and June. It won’t stop there. Germany is also in contraction. The BBC reports UK Economy Shrinks for the First Time Since 2012. Sajid Javid , the chancellor, told the BBC that he does not expect the UK to slide into recession but I strongly disagree. The ONS […]

August 8, 2019 | Italy’s Coalition Government Collapses: What’s Next?

Matteo Salvini, head of Italy’s League party, called for a snap election, citing differences with the 5 Star Movement. A marriage of convenience just ended. The 5 Star Movement (M5S), Salvini’s coalition partner, attempted to derail a high-speed rail link that the League (Lega) wanted. M5S failed, but that is the end of the coalition […]

August 7, 2019 | Golds Blasts Through $1500: Message? Central Banks Out of Control, Not Inflation

Gold blasted through the $1500 level today. Let’s analyze the message. Here’s a hint: The message isn’t inflation. The above chart is and end-of-day chart from yesterday. Gold closed at $1484. At 11:30 AM Central, gold was at $1520, up $36 on the day. Gold vs Copper What’s the Message? Stephanie Pomboy at Macro Mavens […]

August 5, 2019 | Recession Watch: Panic Fed Rate Cuts Coming Up

Fed fund futures say a rate cut cycle has started. The Fed disagrees but will soon come to its senses. On July 31, Fed Chair Jerome Powell called the quarter-point cut a “Mid-Cycle” Adjustment. Powell’s statement looks downright ridiculous as Major Currency Wars Escalate in response to “Tariff Man” placing more tariffs on China just a few days […]

August 4, 2019 | Expect Fed Baby Step Cuts Followed by Shock and Awe Panic

The Fed has convinced the market that baby step cuts are the order of the day even as the yield curve screams for more. Heading into the July 31 FOMC meeting, there was a substantial 22% chance of a 50 basis point cut. Odds of a 50 basis point cut hit 50% at one point. […]

August 1, 2019 | Commodity Reaction to Trump’s Tariffs: Gold Up, Everything Else Down

Gold reversed strongly and bond yields continued to plunge when Trump announced a 10% hike in tariffs on China. Gold Reversal Gold was already strengthening and bond yields sinking on ISM data, then surged when Trump announced tariffs. For the bond yield picture, please see Bond Yields Crash On ISM Report, More China Tariffs: Inversions Strengthen. […]

July 31, 2019 | Fed Gets Opposite Response It Wanted: Inversions Strengthen

Counting the FF Rate, the yield curve flattened quite a bit but inversions between 3-month and long end widened. In its policy decision today, the Fed was hoping to steepen the long end of the yield curve. The opposite happened as rates at the long end fell. Note: The Effective Fed Funds rate will not […]

July 30, 2019 | British Pound Dives on Brexit Fears

Now that Brexit reality has finally set in, the British Pound has been in a free fall. For the past couple years, the British Pound rallied every time it appeared Theresa May might get her deal though or there would be an extension. Today, vs the US dollar, the Pound fell to its Lowest Level […]

July 29, 2019 | Capital One Hacked, 100 Million Accounts Affected, Woman Arrested

A former employee of Amazon Web Services was arrested by federal agents in Seattle for hacking Capital One. The Wall Street Journal reports Capital One Reports Data Breach Affecting 100 Million Customers, Applicants Capital One Financial Corp. , the fifth-largest U.S. credit-card issuer, said Monday that a hacker accessed the personal information of approximately 106 million […]

July 26, 2019 | Tax Due: IRS Sends Warning Letter to 10,000 Crypto Speculators

Hello. Pay up. That’s essentially the message the IRS is sending to those trading cryptocurrencies. If you are a HODL-er who has never taken a profit, this warning does not apply. Otherwise, please pay attention: IRS Sending Warning Letters to More Than 10,000 Cryptocurrency Holders. The Internal Revenue Service has begun sending letters to more than 10,000 cryptocurrency […]

July 12, 2019 | Housing Bubble Reblown: Last Chance for a Good Price Was 7 Years Ago

Housing prices have far outstripped wage growth and rental prices. Something has to give. So it will. Every month I am amused by the comments from NAR chief economist Lawrence Yun regarding housing fundamentals, especially job growth. Forget about strong jobs. Toss Yun’s views in the ashcan. Compared to wage growth, homes are nearly as […]

July 11, 2019 | One Heck of a Recession Party!

Stocks are on a tear. Celebrating rate cuts. With the rate cuts comes a recession. No recession? No more rate cuts. It’s been one hell of a party. Hold on, John Hussman says Warning: Federal Reserve Easing Ahead Of all the distinctions that investors might make in the coming few years, one that I expect will […]

July 8, 2019 | Congratulations Debt Slaves! You Owe the Banks a New Record Amount of Money

  Consumer credit hit another all-time high today of nearly $4.1 trillion. Congratulations Debt Slaves! Today’s G19 Fed report on Consumer Credit shows that you owe the banks and other creditors yet another record high amount of money. Consumer Credit Total: $4.1 Trillion Revolving: $1.1 Trillion Non-Revolving: $3.0 Trillion Well Done. Mike “Mish” Shedlock

July 7, 2019 | Dealers are Bumper-to-Bumper With SUVs: More Coming as Sales Decline

Car dealers are flush with SUVs just as the economy is slowing. Auto makers are rolling out new models of crossovers and sport-utility vehicles but SUVs are Bumper-to-Bumper on Dealer Lots. Sales of crossovers and SUVs are slowing, while models are sitting longer on dealership lots before being sold and companies are resorting to more sales […]

July 6, 2019 | More 737 Max Delays: Boeing’s Corner Cutting Cost a Fortune and 346 Lives

The 737 Max may now be grounded for as much as a year. A new report assesses the corner cutting mistakes. A Boeing contact suggested I read Bjorn’s Corner: Cutting corners in aerospace costs a fortune. It seems more and more likely the 737 MAX grounding will go well beyond six months and it can approach […]

June 30, 2019 | Boeing Outsourced Software to $9 Programmers, Probe Expands Beyond the Max

Boeings problems continue to mount. The FAA discovered more problems and a DOJ probe expands beyond the Max. New Uncommanded Dive Risks Last week the FAA issued statement on a new risk that Boeing must mitigate. The new risk does not involve the MACS but could lead to similar results according to the Seattle Times. ADVERTISEMENT […]

June 25, 2019 | New Home Sales Plunge 35.9% in the West, 7.8% Overall, Prices Down 8.1

There is little to like in today’s residential sales report. New home sales dove 7.8% overall and prices also fell 8.1%. Economists expected a rebound in housing this month so they are no doubt shocked by the Housing Residential Sales report. New Home Sales Sales of new single‐family houses in May 2019 were at a seasonally adjusted […]

June 22, 2019 | Electric Car Major Headache: Waiting Hours for Charging Bay then Hrs to Charge

A trip from LA to Las Vegas and back takes 8 hours by a gas-powered car but 13 hours by an electric vehicle. The electric vehicle grand vision may flounder on something most drivers take for granted: a quick pit stop. The inconvenient truth of electric vehicles is they are terribly inconvenient to own and […]

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