Baltic Dry Index. 690 -05 Brent Crude 67.03
"When a country (USA) is losing many billions of dollars on
trade with virtually every country it does business with, trade wars are good,
and easy to win. When we are down $100 billion with a certain country and they
get cute, don't trade anymore – we win big. It's easy!"
President Trump.
The
sugar high from the Trump tax cuts and deregulation fading, and a rapidly slowing
China and European economies, together with dire political realities on both sides
of the Atlantic, spooked bond investors yesterday back into the harsh reality.
As per the Fedster’s earlier in the week, a new global recession seems to be at
hand.
For global
stock markets flying on a wing and a prayer in a struggling Boeing 737 Max, it
was unsettling news for stock pedlars and stock buyers everywhere. Suppose the
Feds are right about a new recession? To whom do I sell out my overpriced
stocks.
Below,
trouble as the world suddenly runs short of “greater fool buyers.” I suspect as
the next three months unfold, that we haven’t seen anything yet. As a short
supply of greater fool buyers turns into a dearth. Irump’s trade wars have
already cooked the goose that used to lay the golden eggs.
As a
new global recession slowly unfolds, a massive 10 year debt bubble of mis and
mal-investment is about to blow up. 2008-2009 will eventually come to look like
a walk in the park.
“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
“Adam Smith” aka George Goodman. The Money Game.
Stocks End Week Lower Amid Hints of Slowing Growth: Markets Wrap
By Vildana Hajric and Sarah Ponczek
Updated on 22 March 2019, 20:03 GMT
U.S.
equities ended the week lower and Treasuries rose amid more signals that global
growth is slowing. The dollar advanced against most major currencies, while the
three-month/10-year yield curve inverted for the first time since 2007.
Despite a
dovish turn by the Fed Wednesday, the S&P 500 Index on Friday saw its
biggest drop since January -- and lost 0.8 percent for the week -- with
materials and financials leading the benchmark down as the yield on 10-year
Treasuries, already at a 14-month low, extended its decline. Growth fears also
took a toll on crude, and energy shares tumbled. Investors sought refuge in
utilities, while gold headed for its best week since early February.
Banks and industrial shares led the Stoxx Europe 600 lower after German purchasing manager data badly missed forecasts. Sovereign bonds in Europe quickly reversed earlier losses and the euro erased a modest gain. The yield on Germany’s 10-year bonds -- Europe’s benchmark -- tumbled below zero
The surprise
to stock and bond markets pulled the MSCI index of global equities down from
its highest level since October, eroding some of the optimism that the Federal
Reserve’s dovish tilt could prolong the bull market for stocks. Bonds, however,
were already signaling investor worries that momentum in growth and inflation
remains too subdued.
Hours before
the 10-year yield tumbled in Germany, its counterpart in Japan fell to the
lowest since 2016, New Zealand’s dropped below 2 percent for the first time and
Australia’s was approaching an all-time low, as the world’s major central banks
wound up another week showing they can’t yet tighten policy. Trade talks
between the U.S. and China are scheduled to continue next week.
More
S&P 500 could fall 40% as yield curve inverts, says analyst of one of 2018’s best hedge-fund returns
By Sunny
Oh Published: Mar 22, 2019 3:17 p.m.
ET
Stock investors
should heed the warning emanating from the bond market, says at least one
hedge-fund manager, as the yield curve staged a stunning inversion Friday.
“I think
people are going to be surprised where the S&P 500 is trading at the end of
the year. We’re going at least for a 40% decline from the S&P’s top,”
Otavio Costa, a macro analyst at Crescat Capital, a hedge fund that oversees
$52 million, told MarketWatch in an interview.
The analyst
of the investment firm, says the inversion of the yield curve, where
short-dated yields rise above their longer-dated peers, signals an ignominious
end to a 10-year bull run for the S&P 500 index, which bottomed in March of
2009 but has mounted a record-long rally, by some measures, since that point.
In
particular, Costa said the growing number of inversions in yield spreads across
Treasury maturities suggested a bear-market for equities was at hand, in the
face of a darkening global growth picture.
Costa’s comments come as the 10-year Treasury note yield TMUBMUSD10Y, +0.00% tumbled 10 basis points to 2.439%, while the 3-month T-bill TMUBMUSD03M, +0.00% was down a single basis point to 2.462%, leaving the spread between the two maturities at around negative 3 basis points.
An inversion of this spread — the most closely watched by economists — has preceded every recession since 1960, though the timing between the two events can vary, according to the New York Fed. Bond prices move inversely to yields.
The inversion is the first such since 2007, just before the financial crisis that unfolded, reaching a crescendo in the fall of 2008. Yield curves invert because investors worry about future economic growth, which can stoke demand for safe, long-term Treasurys, while pushing down long-term rates. Up until January, the Federal Reserve had been lifting interest rates, nine times since December of 2015, which can have the effect of pushing down shorter-term rates, which are the most sensitive to central-bank rate increases, higher.
More
Stocks took a big hit Friday, and these shares fell the most
By Philip
van Doorn Published: Mar 22, 2019
4:47 p.m. ET
Only one day after crystal-clear dovish signals by the
Federal Reserve helped push stocks higher, fear of a recession sent bond prices
soaring and stock prices tumbling.The Dow Jones Industrial Average DJIA, -1.77% sank 460 points, or 1.8%, to close at 25,502.32 Friday, while the S&P 500 SPX, -1.90% slumped 1.9% and the Nasdaq Composite Index COMP, -2.50% fared even worse, sliding 2.5%.
While it can never say it expects a recession, the Federal Open Market Committee’s two policy announcements on Wednesday — to leave the federal-funds rate unchanged while planning to stop the shrinkage of the Federal Reserve’s bond portfolio at the end of September — seemed to spook investors. But Thursday, those same announcements and the lower interest rates they implied had helped lift stock prices.
The bond market sent a prerecession signal on Friday, as the yield on 10-year U.S. Treasury notes TMUBMUSD10Y, +0.00% skidded 10 basis points to 2.44%. That put it lower than the 2.46% yield on 3-month Treasury bills TMUBMUSD03M, +0.00% — the first time since 2007.
More
In other news, politics on both sides
of the Atlantic turns “interesting.” But “interesting” is far from what over
priced stock markets need.
Mueller Closes Trump Probe; Barr May Reveal Details Over Weekend
By Chris Strohm
Updated on 23 March 2019, 03:27 GMT
Special
Counsel Robert Mueller has submitted his final report, a still-secret document
that closes his 22-month investigation into whether President Donald Trump or
those around him conspired in Russia’s interference in the 2016 election.
Attorney
General William Barr said in a letter to Congress Friday that he may be able to
provide lawmakers with the special counsel’s principal conclusions “as soon as
this weekend.”
There were
no instances in which Mueller was told not to take a specific action in his
wide-ranging probe, Barr said.
“I remain
committed to as much transparency as possible, and I will keep you informed as
to the status of my review,” Barr wrote. He added that he would consult with
Deputy Attorney General Rod Rosenstein and Mueller to determine what additional
information from the report can be released to Congress and the public.
“The next
steps are up to Attorney General Barr, and we look forward to the process
taking its course,” White House Press Secretary Sarah Sanders said in a tweet.
“The White House has not received or been briefed on the Special Counsel’s
report.”
It’s only
the beginning of a struggle between Barr, lawmakers and the White House over
how much of Mueller’s findings -- and the evidence behind them -- will be
disclosed to Congress and the public. That fight is likely to escalate from
social-media wars between the president and his critics to hearing rooms on
Capitol Hill and ultimately to the Supreme Court.
Mueller
didn’t issue any final indictments before turning in his report and no sealed
indictments are pending, according to officials. That means several people
close to Trump, including his eldest son Donald Trump Jr., avoided criminal
charges from the special prosecutor.
“The
investigation is complete -- it’s concluded,” Kerri Kupec, a Justice Department
spokeswoman, told reporters.
More
Five percent? EU leaders doubt May's Brexit vote chances
March 22, 2019 / 3:24 AM
BRUSSELS (Reuters) - After British Prime
Minister Theresa May reassured them she could win a crunch vote in parliament
next week to ensure an orderly Brexit, EU leaders were left even more doubtful
of her chances.
Following more than an hour of
explanations that with days left until Britain might crash out she could win
over lawmakers who have twice rejected her EU withdrawal deal, May left the
summit room on Thursday and the other 27 leaders conferred — finding a
consensus that they were even less convinced than before, officials familiar
with their discussions told Reuters.
French
President Emmanuel Macron told the room that before coming to Brussels he had
thought May had only a 10 percent chance of winning the vote. After listening
to the prime minister, he said, he had cut his estimate — to five percent.
To general
assent, one person present said, summit chair Donald Tusk shot back that Macron
was being “very optimistic”.
After hours
of discussion, the leaders agreed to delay Brexit beyond the deadline of next
Friday — but possibly only to April 12 or into May, trying to shift
responsibility for any chaotic no-deal outcome back to London from Brussels.
Finally,
in USA mid-west flooding news, is a food disaster in the making?
Catastrophic Midwestern flooding costing farmers $1 billion and counting
Updated March 21, 2019 at 5:36 PM
EVANSVILLE,
Ind., March 21 (UPI) -- Catastrophic flooding across the central Midwest has
wiped out livestock and probably will prevent farmers from planting this
spring.
Thousands of
livestock were killed, and many more are expected to die from lack of food and
water. The Nebraska Beef Cattlemen's Association alone estimated the lost
livestock was worth $400 million.
"The
magnitude of this is hard to comprehend," said Steve Nelson, the president
of the Nebraska Farm Bureau. "This flood has covered 70 percent of our
state. I've talked with lots of [cattle farmers] who moved their cattle to
places that had never been flooded before, and yet they lost their
cattle."
Moreover,
the flooding will likely prevent farmers from planting this spring, costing an
estimated $440 million more, according to an application for expedited federal
disaster assistance in Nebraska.
The flooding
has mainly hit Nebraska, Iowa and Minnesota. On March 12, Nebraska Gov. Pete
Ricketts declared a state of emergency.
In Iowa,
state leaders declared disasters in more than 40 counties. Fewer Iowa livestock
producers were impacted, according to early reports, but corn and soy growers
have lost large stores of grain and soybeans.
In just one
Iowa county with 28 farmers, an estimated 390,000 bushels of stored soybeans
and about 1.2 million bushels of stored corn were ruined by floodwaters, said
Jeff Jorgenson, an Iowa corn and soy grower. The value of the lost grain is
around $7.3 million.
"That's
not $7.3 million in profit," Jorgenson said. "That's money farmers
use to operate their farms. It's going to be really difficult for a lot of
farmers."
That grain
is not insured, Jorgenson added. Farmers often store grain waiting for a good
price to sell. A few cents more per bushel could mean a few thousand dollars
more in profit.
Besides the
lost grain, many more farmers fear that the soaked fields are unlikely to be
read for spring planting.
"There's
a lot of this land that will not be touched this year just because it will not
dry out," Richard Crouch, the chairman of the Mills County Emergency
Management Commission in Iowa, told the Des Moines Register. "It's going
to take years for it to come back to a natural use on account of the amount of
sand and debris that's left on it."
Iowa farmers
usually plant in mid-April, Jorgenson said.
"That's
not going to happen," Jorgenson said. "If we get it in by May, I'll
be surprised."
---- "Additional
spring rain and melting snow will prolong and expand flooding, especially in
the central and southern U.S.," the NWS said in a statement. "As this
excess water flows downstream through the river basins, the flood threat will
become worse and geographically more widespread."
Spring flooding could be 'unprecedented' with 200 million Americans at risk
USA TODAY Published
9:51 PM EDT Mar 21, 2019
Spring flooding has already been disastrous, and it's
likely to get worse, federal forecasters announced Thursday. Floods could reach
"unprecedented" and "potentially historic" levels.Almost the entire eastern two-thirds of the nation should see flooding this spring, National Weather Service deputy director Mary Erickson said at a news conference on Thursday. Some 25 states are forecast to see "moderate" to "major" flooding, the weather service said.
The Midwest floods are “a preview of what we expect throughout the rest of the spring,” she said. "The flooding this year could be worse than what we have seen in previous years ... even worse than the historic floods we saw in 1993 and 2011," Erickson added.
The deadly,
destructive flooding that began last week from Minnesota to Missouri has
killed at least four people, caused more than $1.5 billion in estimated losses
and damages and destroyed more than 2,000 homes.
---- "This is shaping up to be a potentially unprecedented flood season, with more than 200 million people at risk for flooding in their communities," said Ed Clark, director of NOAA's National Water Center in Tuscaloosa, Alabama.
Catastrophe:
Before and
after satellite images show destruction in Nebraska and Iowa after Midwest floods
The water
that's now soaking the Upper Midwest will eventually make its way down the
Mississippi toward the Gulf Coast, where flooding will worsen in May.
“The
extensive flooding we’ve seen in the past two weeks will continue through
May and become more dire and may be exacerbated in the coming weeks as the
water flows downstream,” Clark said.
Forecasters
say the biggest risks include all three Mississippi River basins, plus the
basins of the Red River of the North, the Great Lakes, the eastern Missouri
River, the lower Ohio River, the lower Cumberland River and the Tennessee
River.
More
A stock is, for all practical purposes, a piece of
paper that sits in a bank vault. Most likely you will never see it. It may or
may not have an Intrinsic Value; what it is worth on any given day depends on
the confluence of buyers and sellers that day. The most important thing to
realize is simplistic: The stock doesn’t know you own it. All those
marvelous things, or those terrible things, that you feel about a stock, or a
list of stocks, or an amount of money represented by a list of stocks, all of
these things are unreciprocated by the stock or the group of stocks. You can be
in love if you want to, but that piece of paper doesn’t love you, and
unreciprocated love can turn into masochism, narcissism, or, even worse, market
losses and unreciprocated hate.
The Money Game
(1968 ) George J. W. Goodman aka “Adam Smith.”
The monthly Coppock Indicators finished February
DJIA: 25,916
+68 Down. NASDAQ: 7,533 +109 Down. SP500: 2,784 +62 Down.
Normally this would suggest more correction still to
come, but with President Trump wanting to be judged by the performance of the
stock market and the Fed’s Plunge Protection Team now officially part of
President Trump’s re-election team, probably the safest action here is fully
paid up synthetic double options on most of the major indexes.
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