'The Sky is Falling' Narrative

[CANative]

Separate agency that does not answer to the executive. Trump can't fire the Fed Chairman except for cause. Policy disagreements are not "cause."

 

[RCA]

Separate agency that does not answer to the executive. Trump can't fire the Fed Chairman except for cause. Policy disagreements are not "cause."

He can be effectively fired. He can certainly be demoted and that would have short term repercussions that may be all that Trump needs. In fact, he could be fired --- after all the Senate has a Republican majority, but it would be complicated. Never dismiss Trump so easily, he has an insatiable appetite for fights. It would create a mess, and Trump likes to use messes to exercise control. Modus operandi.

Reuters | Breaking International News & Views

Find latest news from every corner of the globe at Reuters.com, your online source for breaking international news coverage.

www.reuters.com

 

[RCA]

...

 

[Randolph Kinney]

30 year Treasury bonds yield below federal funds rate of 2.25%. 3 month Treasury bill rate 1 year forward yields 0.5% which is signaling federal funds rate will be cut significantly a year out. Trouble ahead, markets are going to trend downward as more trade woes develop and GDP slows significantly, turning negative a year out.

 

[Amy Perkins]

I think there are some strange things going on in the economy. I do see some positive things as well. First of all wages are too low compared to the cost of living. The population is growing too fast. Banks are restricting lending because they got burned. The stock market is up because it's boomer money, which is at about 50%, it's also foreign investment. Late boomers, gen xers, and millenials don't have enough of the resources and this will change hands in the next ten years as the boomers are aging. Health care costs are skyrocketing and there are not enough resources for health care. The boomer generation is about as large as the millennial, but without the wealth. This is largely due to them living during a time when wages were higher compared to the cost of living and acquiring wealth. There is a danger with the large monopolistic companies like Amazon, Google, and Major Banks. Anti-trust law is not being enforced and there is too much corruption with resources pouring into the pockets of the few. Our media is a joke and now has a biased political agenda and I mean the left which is most stations and the right which is fox. What does interest really represent? Does it represent the risk of the loan, or bond, my guess would say, yes. We don't have a gold based economy, we have a credit based economy which is based on the people with good credit. Lending is just too tight in the realm of housing and the cost of housing is too high compared to wages. The stock market is over leveraged. Companies have too much debt and will probably fail if interest rates are raised. Banks need to lend to people and small business, not corporate giants. It's an interesting position we are in right now. I would say that places like California are not doing well because the cost of living is too high and wages too low. People are leaving because they don't want to pay the increase in income tax. Other places like the south are benefiting from this exodus because there are lower taxes and wages are not that different for professionals, like us. The times are changes and no one really knows what is going to happen at this point, because we have never been in this situation before. We have a huge aging population and increasing mental illness and poverty with younger people. We need to take care of our situation at home before we go and spend money on other countries or we will be in real trouble. What we need to ask ourselves is how can we drive wages upward and lower corporate debt to get a sense of balance, because right now there is no balance.

 

[Randolph Kinney]

Federal Reserve Implementation Note issued July 31, 2019

Effective August 1, 2019, the Committee directs the Desk to roll over at auction all principal payments from the Federal Reserve's holdings of Treasury securities and to reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities received during each calendar month. Principal payments from agency debt and agency mortgage-backed securities up to $20 billion per month will be reinvested in Treasury securities to roughly match the maturity composition of Treasury securities outstanding; principal payments in excess of $20 billion per month will continue to be reinvested in agency mortgage-backed securities. Small deviations from these amounts for operational reasons are acceptable.

The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency mortgage-backed securities transactions."

Implementation Note issued July 31, 2019

The Federal Reserve Board of Governors in Washington DC.

www.federalreserve.gov

• Federal Reserve holdings of Treasury's has risen for the first time since QE ended in 2014.
• Quantitative Tightening is over, but is outright QE back???
• Ongoing "direct monetization" continues, with unmatched declines in Excess Reserves versus Fed held Treasury's and MBS.

Interesting that this week, for the first time since QE ended way back in late 2014, Federal Reserve holdings of Treasury bonds rose.

The $8 billion increase is the first seen since QE ended almost 5 years ago and comes after QT (quantitative tightening) had been decelerating since mid 2019. However, the outright increase in Treasury holdings is still a bit of shocker.

Assets: Securities Held Outright: U.S. Treasury Securities: All: Wednesday Level

Graph and download economic data for Assets: Securities Held Outright: U.S. Treasury Securities: All: Wednesday Level (TREAST) from 2002-12-18 to 2024-08-21 about maturity, securities, Treasury, and USA.

fred.stlouisfed.org

So what exactly was the FED buying? Seven to ten year Treasury's!

The purchasing this week was only bested by a single week in 2011, when the FED was feverishly running its QE program?!?

Now a sudden burst of Federal Reserve purchasing coinciding with a sharp decline in the 10 year yield. And the FED's long duration holdings versus the 30 year Treasury yield, the current move down in the long yield is exactly what was seen, in anticipation prior to QE1, QE2, and QE3.

The FED is artificially and synthetically pushing up economic growth and financial asset valuations.

 

[Randolph Kinney]

Top 10 Housing Markets With the Most Zombie Foreclosures in Q3 2019
August 16th, 2019

According to ATTOM Data Solutions’ just released Q3 2019 Vacant Property and Zombie Foreclosure Report, there are more than 1.5 million (1,530,563) U.S. single-family homes and condos vacant, representing 1.6 percent of all homes.

The report showed there are a total of 9,612 “zombie” homes or properties facing possible foreclosure which have been vacated by their owners nationwide. New York had the highest number of zombie properties (2,428), followed by Florida (1,634), Illinois (985), Ohio (891) and New Jersey (463).

In drilling down to the local market level, which housing markets have the most “zombie” properties? Here are the top 10 metros, counties and zip codes with the highest number of zombie foreclosures in Q3 2019:

Top 10 Housing Markets With the Most Zombie Foreclosures in Q3 2019

ATTOM Data Solutions drills down to the metro, county and zip code levels to reveal the U.S. housing markets with the most zombie foreclosures in Q3 2019.

www.attomdata.com

 

[Elliott]

I saw a zombie foreclosure today. Boarded up. Scary. I thought anything would sell in this market. Might have been a meth house.

 

[RCA]

This thread still open? OK. Here is a very good one:

Steve Bannon's Warning On China Trade War (w/ Kyle Bass) | Real Vision Classics

Steve Bannon and Kyle Bass discuss America’s current geopolitical landscape regarding China. Bannon and Bass take a deep dive into Chinese infiltration in U....

tinyurl.com

Steve Bannon makes a persuasive argument that we may be headed towards a major war with China in the next 5 years, due to the importance of the South China Sea and China's aggressive deployment of satellite islands in the world's major super-highway of tankers.

Satellite images show what security analysts think may be Chinese military bases on tiny South China Sea islands

The images show neat rows of basketball courts, parade grounds and a wide variety of buildings, some flanked by radar equipment.

tinyurl.com

- which are essentially stationary aircraft carriers.

He also does a very good job of explaining China's overall strategy towards the US and how they perceive our country.

There are, of course, VERY REAL signs where we are headed, e.g.

1. The build-up of military forces, in particular the Navy and Air Force has already begun.

2. The Confucius Institute, an educational organization of the Peoples Republic of China, which was set up in many of our universities, is being closed down, at least by those universities dependent on DOD financing, by order of the State Department. For example, San Francisco State University and the University of Oregon recently shut down their branches. Portland State (not surprisingly) still has it - Portland has always been a bastion of liberalism, labor unions and such, it seems to run in families up there: https://www.ohs.org/events/portland-communists.cfm.

3. All the rhetoric, the buildup.

And watch out for this: https://en.wikipedia.org/wiki/Criminal_syndicalism -- that may very well reappear on the political landscape.

...

 

[CANative]

"Stationary aircraft carriers..." Oxymoron.

Steve Bannon. Might as well watch Saturday morning cartoons.