OASIS FORUM Post by the Golden Rule. GoldTent Oasis is not responsible for content or accuracy of posts. DYODD.

TRADE DISPUTE=It’s going to go on for 10 or 15 years.’”

Posted by Richard640 @ 21:53 on June 29, 2019  

June 26 – CNBC (Jessica Bursztynsky): “Even if the U.S. and China come to some sort of an agreement at this week’s G-20 summit, the world’s two largest economies will still be fighting for much longer, conservative economics writer Stephen Moore told CNBC… ‘This trade dispute isn’t going to be solved in the next year or two. This is going to be the epic battle of our times,’ said Moore, who withdrew his name from President Donald Trump’s consideration in May for a nomination to the Federal Reserve Board. ‘It’s going to go on for 10 or 15 years.’”

2016-the year of the PM rally–“the highest level since MID-2016**, according to a Wall Street Journal analysis.”

Posted by Richard640 @ 21:38 on June 29, 2019  

June 24 – New York Times (Avantika Chilkoti and Pat Minczeski): “Bonds, stocks and currencies are moving in tandem more often, as central-bank surprises and trade uncertainty assert their grip over markets. Known by investors as ‘risk-on, risk-off,’ the phenomenon happens when markets essentially split into two broad buckets that move together: risk-off, or haven assets, which rally when investors grow skittish; and risk-on, or growth assets, which rally when risk appetite returns.

A basket of assets that reflect either risk-on or risk-off sentiment has moved together nearly a quarter of the past 100 days through June 21,”the highest level since MID-2016**, according to a Wall Street Journal analysis.”

with some $30 trillion tied up in difficult-to-trade instruments. A lot of that money is in mutual funds and exchange-traded products owned by mom and pop investors

Posted by Richard640 @ 21:30 on June 29, 2019  

June 28 – Bloomberg (John Gittelsohn and Nishant Kumar): “‘You can’t always get what you want,’ the Rolling Stones sang. The band didn’t have illiquid assets in mind, but investors who put their money into funds that put it into things that can be hard to sell in a hurry would certainly agree, as was shown by recent market turmoil. Bank of England Governor Mark Carney said funds that hold illiquid assets but allow unlimited withdrawals have been ‘built on a lie.’ Carney warned that the risks are ‘systemic,’ with some $30 trillion tied up in difficult-to-trade instruments. A lot of that money is in mutual funds and exchange-traded products owned by mom and pop investors, raising questions of who’s responsible for keeping investors safe from having liquidity dry up at just the wrong time.”

Got gold?

Posted by Richard640 @ 19:27 on June 29, 2019  

Pension “Death Spiral” Crisis Reaching Fever-Pitch In The US

Put simply: the record, decade long bull market hasn’t been enough to save pensions.

the rally in everything was the strongest since 2011.

Posted by Richard640 @ 19:23 on June 29, 2019  

Market Instability Watch:

June 21 – Bloomberg (Sarah Ponczek): “One crossed-out word was all it took to send financial markets into a unified celebration that has few precedents in the past decade. Stocks rose to records, bonds surged, oil jumped almost 10% and even gold got into the act, as traders celebrated a dovish conversion at the Federal Reserve. One back-of-the-envelope measure shows the rally in everything was the strongest since 2011. Banished of late has been the soul searching that had afflicted investors for more than a year. Instead, investors closed their eyes and bought, fortified by the willingness of Jerome Powell’s central bank to forego its pledge to be ‘patient’ in formulating interest-rate policy.”

GOLD–good to go…on the launch pad…but maybe down sun nite then rite back up

Posted by Richard640 @ 17:34 on June 29, 2019  
And what about the possible impact of a positive G20 and momentum toward a U.S./China trade deal? Stocks, no surprise, are readily excitable. For global safe haven bonds, however, it’s of little consequence. How can this be? Because even a trade deal would at this point have minimal impact on what has become deep and rapidly worsening structural impairment. Trade deal or not, Chinese exports to the U.S. will decline, right along with capital investment. Even with a deal, the Chinese financial system faces the consequences of years of rapid expansion, as economic prospects deteriorate. Sure, 6% growth as far as the eye can see. This implies a further surge in consumer debt and even more dangerous mortgage finance and apartment Bubbles. Unparalleled overcapacity and maladjustment.

Record U.S. stock prices in October 2007 made it easy to dismiss the momentous ramifications associated with subprime borrowers (the “Periphery”) losing access to cheap Credit – to disregard the blow-up of two Bear Stearns structured Credit funds, widening Credit spreads, pockets of market illiquidity, and waning confidence in some sophisticated derivative structures. Acute monetary instability (i.e. equities and $140 crude) was mistaken for resilient bull markets.  


I would closely monitor unfolding developments in Chinese Credit – funding issues for small and mid-sized banks; ructions in the money markets; trust issues with repo collateral, inter-banking lending, and counterparties; vulnerabilities in local government financing vehicles (LGFV); heightened concerns for speculative leverage; and the overarching issue of the implicit Beijing guarantee for essentially the entire Chinese financial system. The overarching issue is one of prospective losses of monumental dimensions. These losses will have to be shared in the marketplace. As much as global markets bank on Beijing bankrolling China’s entire financial apparatus, the Chinese government will not welcome the prospect of bankrupting itself.  

The solution, of course, is for China to simply inflate its way out of debt trouble – just like everyone else. What an incredibly dangerous myth the world fully bought into. Reflation – in the U.S., China, Europe, Japan and globally – has only inflated the size and scope of Bubbles. China could see $4 TN of new Credit this year – debt of increasingly suspect quality. Such reckless Credit excess is placing the Chinese currency at great risk. It took about 18 months from the initial U.S. subprime blowup to full-fledged financial crisis. While one could certainly argue for earlier (i.e. December), China’s crisis clock began ticking no later than with last month’s takeover of Baoshang Bank.  

Sound like today?=Meanwhile, bond yields completely detached from equities and traditional fundamental factors. Why were yields collapsing in the face of booming Credit growth and inflating risk markets?

Posted by Richard640 @ 17:18 on June 29, 2019  

This is where it gets interesting. Rapid Credit growth throughout 2007 underpinned stock prices, general consumer confidence and overall economic activity. Nominal GDP expanded at a 5% rate during 2007’s first half, 4.3% in Q3 and 4.1% during Q4. 

Meanwhile, bond yields completely detached from equities and traditional fundamental factors. Why were yields collapsing in the face of booming Credit growth and inflating risk markets? Because the preservation of “Terminal Phase” excess was fomenting a late-cycle parabolic rise in systemic risk: inflating quantities of increasingly risky Credit instruments, dysfunctional risk intermediation, destabilizing market speculation, and extreme late-cycle imbalances/maladjustment. Stated somewhat differently: efforts to sustain the boom were exacerbating structural impairment. The bond market discerned an increasingly untenable situation.  

History Rhymes. China’s Aggregate Financing (approx. non-government system Credit growth) jumped $1.60 TN during 2019’s first five months, 31% ahead of comparable 2018 Credit growth. So far this year, Aggregate Financing is expanding at better than 12% annualized. This is a rate of growth sufficient to sustain the economic Bubble (Beijing’s 6.5% growth target), apartment prices, corporate profits, stock prices and general market and economic confidence.  

But extending the “Terminal Phase” has ensured a historic parabolic surge in systemic risk. Consumer (chiefly mortgage) borrowings have increased 17.2% over the past year (40% in two years!). Thousands of uneconomic businesses continue to pile on debt. Unprecedented over- and mal-investment runs unabated. Millions more apartments are constructed. The bloated Chinese banking system continues to inflate with loans of rapidly deteriorating quality.  

Global risk markets have been conditioned for faith both in Beijing’s endless capacity to sustain the boom and global central bankers’ determination to maintain system liquidity and economic expansion. So long as Chinese Credit keeps flowing at double-digit rates, inflating perceived wealth ensures Chinese spending and finance continue to

We’re golden! Gold to da moon!—–There are key elements of the current environment reminiscent of 2007.-BOOYAH!

Posted by Richard640 @ 17:05 on June 29, 2019  
Why do bond markets at home and abroad have about zero fear of a Trump/Xi agreement with positive ramifications for risk market sentiment and economic prospects (with, seemingly, receding central bank dovishness)? Because, I would posit, the collapse of bond yields is chiefly about unfolding global financial fragilities rather than trade disputes and slower growth. More specifically, faltering Chinese Bubbles significantly raise the likelihood of the type of global de-risking/deleveraging dynamic that would wreak havoc on securities and derivatives markets across the globe.  
There are key elements of the current environment reminiscent of 2007. Recall that after the initial subprime scare that pushed the S&P500 down to 1,370 in mid-August, the index then rallied back to post a record high 1,576 on October 11th.

This is the best analysis about the Xi-Trump meeting and its affect on stocks and interest rates

Posted by Richard640 @ 16:38 on June 29, 2019  

Looser monetary policy

[We would expect that the President now views tariff threats as not only a successful negotiating tactic following the immigration agreement with Mexico but also a useful tool in pressing for looser monetary policy–Best-Case Scenario Has a Worst-Case Twist]

My Best-Case ScenarioKnave Dave

So, I did say my “worst-case scenario” did not seem like the most likely scenario to play out from the G-20 summit. Now we know my “best-case scenario” and most likely scenario is the one Trump and Xi have chosen, but what does that mean for the month of July?

Here was the best-case scenarioXi and Trump agree to come out of their meeting sounding like there is hope for a future agreement soon (albeit with nothing specific that has been agreed upon). We all know there is no chance they come out with a deal. So, the best hope is they come out with Trump talking (again) like a deal is imminent and, therefore, he’ll hold off on his tariff increases a little longer. The market feels relief and breaks resoundingly through its eighteen-month ceiling. The remaining indices that have not cleared through their upper barrier manage also to poke through to a new high and manage to hold … for a little while.

Market Mania Bets the Cash Registers Go Xi Ching!”

In that scenario, I said the next step for the market would likely be that the remaining stock indices that have not pushed past their own previous peaks would now punch through. By that (and I probably should have been clearer originally) I meant those indices like the Dow that were very close to breaking past their old heights, not those like the Russel 2000 and NYSE that are still deep in their bearish zone.
Here sits the Dow trapped at its old summit of nine months ago:
It has remained trapped at this height for a year and a half:
With the Xi summit being something Trump can trumpet about for one or two toots, I would not be surprised to see the Dow break through its past ceiling due to the market’s relief that the G-20 did not result in tariff escalation that had been threatened. However, I also gave a major caveat in my best-case scenario, so hang on:
Then what? All is roses, right? Well, the market has clearly already priced in a trade agreement being reached — also, with apparently 100% certainty — so hope won’t buy a lot more headroom at the market’s top because it’s the same hope that investors have been spending all along. Buybacks are now temporarily frozen out. Even Crazy Cramer is saying the economy looks worse than what the market thinks, He has even stated that, with all of his many executive contacts, he knows of no company that is not going to come in with lower earnings than last quarter. Economic data has been trending down. Forward projections are already being written ahead of any Chinese trade deal, so they won’t likely go up just because, once again, the Trumpet blares an announcement of a trade deal on the horizon. (The market will go up if Trump makes such a proclamation (again), but corporate reports aren’t going to change because of it.)
 We would expect that the President now views tariff threats as not only a successful negotiating tactic following the immigration agreement with Mexico but also a useful tool in pressing for looser monetary policy. If so, this suggests that the White House will at least threaten further tariff increases and might follow through with some of them…. 

Latest topping action looks like a Head Fake to me..!,a pause !not a TOP !Its missing in the renko Chart as its price ratio to $gold continues down as price continues up ! ,we shall see……

Posted by Ororeef @ 16:16 on June 29, 2019  

head-fake-not-on-renko-chart renko-no-head-fake

R6 – Agree

Posted by Buygold @ 12:44 on June 29, 2019  

I also think they’ll cut and also believe the other article about the US headed toward zero interest rates forever because the debt is unsustainable without it. The debt is unsustainable anyway.

The scum may need to try to carpet bomb gold ahead of the cut in July. I think they’ll do 25 bps, not 50 but who knows? Bullard is one of the Fed’s chief mouthpiece liars.

Not really looking forward to Monday, especially with a thinly traded holiday week coming up.

Tariffs…shmariffs…gold’s going up with or without them=The FED must cut and/or keep rates low

Posted by Richard640 @ 12:11 on June 29, 2019  

It’s Recognition Time for gold-why. now? No one ever knows!…but a zero-bound interest regime is what gold is sensing


U.S. Is Heading to a Future of Zero Interest Rates Forever
By Noah Smith
Bloomberg News
Thursday, June 27, 2019
The Congressional Budget Office has just released its projections for the U.S. federal budget during the next 30 years. The picture is one of steadily rising deficits. the growth in deficits is mostly about two things. First, government health care spending is projected to grow, which is partly due to population aging and partly because the CBO predicts that medical costs will keep going up. Second, and even more importantly, the CBO predicts that interest rates will rise, forcing the government to spend much more on simply paying interest on its debt.  that will cause an exponential increase in the amount the government has to pay for debt service. …
… For the remainder of the commentary:

Buygold-I still think the rate cut is. secure for July-it must be cause the sole mission of the FED

Posted by Richard640 @ 10:03 on June 29, 2019  

is to inflate financial assets—but if this interpretation is right, we might have a problem…but what HAPPENED in Japan was the EXPECTED outcome….and stocks really soar and gold didn’t crash=


Finally, global markets will breathe a sigh of relief on news of the resumption in U.S.-China trade talks, even as an official deal remains elusive, and there is no indication of how the two countries will bridge the most difficult aspect of a feud that has emerged beyond simple trade and now affects most aspects of US and Chinese life.
The flip-side is that with trade talks back on, the Fed will feel far less pressure to ease in July, and since in June stocks exploded higher on hopes that the Fed will cut rates as much as 50bps next month, such a reversal in US-China relations could potentially prevent Powell from capitulating, and leave the Fed on hold, an outcome which would lead to a sharp drop in US capital markets. Indeed, in recent weeks, the S&P has returned to record highs, treasury yields have tumbled to their lowest level in years. The Japanese yen, a traditional beneficiary of flight to quality, has gained, while the U.S. dollar has slipped across the board, including against China’s yuan.

R6 – Concur, any old excuse to hit gold

Posted by Buygold @ 9:55 on June 29, 2019  

The SM seemed to anticipate good news on Friday with the DOW finishing up 110 and the USD flat.

We’ll see but this will definitely gives them a reason to goose the dollar and spike rates and the SM – not a positive recipe for pm’s.

and the beat goes on….

Buygold–I am not sure but any ole excuse to crush gold has always been the operating premise

Posted by Richard640 @ 9:38 on June 29, 2019  

Remember the night Trump won, DOW futures were down 800 pts and gold up. $50….by morning all had reversed…maybe we’ll get off easy with gold opening down then recovering

We got all weekend to sift through. the various interpretations

Any ole excuse to run stocks up…


stocks and gold go up together–that’s exactly what happened. so far—cause when stocks are inflating the EVERYTHING bubble keeps inflating

R6 – I’m thinking gold will get crushed on that news and the SM will soar. Agree the Fed will cut .25 bps in July though but Monday could be ugly

Posted by Buygold @ 8:52 on June 29, 2019  

Ceasefire: US, China Trade Talks “Back On Track” After Trump Concedes On Huawei

“Now comes the hard work of finding consensus on the most difficult issues in the relationship, but with a commitment from the top we’re hopeful this will put the two sides on a sustained path to resolution.”

Trump/XI talks–not much happened-FED rate cut. in July safe, probably

Posted by Richard640 @ 5:34 on June 29, 2019  

Osaka, Japan (CNN)US President Donald Trump says trade talks with China have been successfully revived and new tariffs are on hold after his highly anticipated meeting with Chinese President Xi Jinping—-

  • Trump suggested he will be reversing his government’s decision to ban American companies from selling products to Chinese tech giant Huawei.
“We’re right back on track. We’ll see what happens,” Trump said after the talks wrapped. The leaders met for more than an hour.
Later, Trump told reporters he would hold off — FOR NOW (!) — on imposing new tariffs that he’d threatened IF an agreement couldn’t be reached, though said existing duties would remain.
“I promised that for at least the time being we’re not going to be lifting tariffs on China. We won’t be adding an additional tremendous amount — we have $350 billion left that could be tariffed, taxed — we’re not going to be doing that,” Trump told reporters at his closing G20 news conference in Japan.As to whether or not we can make a deal, time will tell,” Trump said US officials said this week there has been little indication over the past weeks that China is willing to cede to American demands they reform their economy.
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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.