Peter Schiff: Hyperinflation Is Now The Most Probable Scenario

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Peter Schiff: Hyperinflation Is Now The Most Probable Scenario

Via SchiffGold.com,

March 23 was Peter Schiff’s birthday. It was also the day the Federal Reserve announced QE Infinity. So, Peter spent over three hours hosting a live videocast talking about the latest Fed moves, the potential impact on the economy and answering questions from viewers.

Peter said he was hoping to combat the rampant economic ignorance that

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is pretty much everywhere.

There’s probably one thing that is spreading right now throughout the country faster than the coronavirus and that is economic ignorance and misinformation. It’s all over the place. It’s gone completely viral … The best thing anybody can do to combat the virus of ignorance is to turn off their television sets or their computers and don’t listen to anything that is being said in conventional media, whether it’s a news-related channel or a financial channel, I can virtually assure you that every single thing that you’re hearing is wrong.”

Peter hammered on a number of central themes you won’t hear discussed in the mainstream. For one thing, the Federal Reserve and the US government are repeating the mistakes of 2008.

Peter reminds us that as the crisis unfolded in ’08, he warned that the policies of bailouts and monetary stimulus were a mistake and that they would lead to a bigger crisis in the future.

Well, welcome to the future.”

He also emphasized that this isn’t about the coronavirus. The virus pricked a bubble that was inflated long ago. The economic chaos we’re seeing today started long before the virus reared its ugly head.

Everybody wants us to go back to normal, the way things were before anybody heard the word coronavirus of COVID-19. But you know what? We weren’t normal back then. The economy was sick before the virus infected us. It was a bubble. There was nothing normal about that bubble. And the problem with bubbles is once they pop, they’re not going to reflate. You need a new bubble. You need a bigger bubble. That’s what the Fed did. They inflated the NASDAQ bubble. That popped. They inflated a bigger bubble in housing. That popped. And then they inflated a bubble in everything. Well, everything has already been in a bubble. There’s nothing left to bubble up. It’s over.”

Peter also warned about what’s coming down the pike with all of this money being injected into the economy.

They are going to unleash a tsunami of inflation.”

And people losing their money in this crisis is going to be the least of the problems.

What we’re going to suffer as an economy is far worse than losing your money. Because you know what’s worse than losing your money? Having your money but your money losing it’s purchasing power. That is the worst thing that can happen and that is what’s going to happen. Hyperinflation has gone from the worst-case scenario to the most probable scenario. And that means people have to act quickly to protect themselves.”

Peter spent a lot of time taking questions from viewers. This is a great opportunity to get some economic analysis you’re not going to see on CNBC or Fox Business.

Tyler Durden

Wed, 03/25/2020 - 19:50

"Imagine The Worst Case Scenario, Protect Yourself" - Ray Dalio Warns Virus Will "Annihilate" Some Markets

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"Imagine The Worst Case Scenario, Protect Yourself" - Ray Dalio Warns Virus Will "Annihilate" Some Markets

The coronavirus is a once-in-a-lifetime epidemic that will crush those who don't defend for a worst-case scenario, Bridgewater co-founder Ray Dalio wrote in a Tuesday LinkedIn post.

I will repeat my overarching perspective, which is that I don’t like to take bets on things that I don’t feel I have

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a big edge on, I don’t like to make any one bet really big, and I’d rather seek how to neutralize myself against big unknowns than how to bet on them. 

That applies to the coronavirus.  Still, there’s no getting around having to figure out what this situation is likely to mean and how we should deal with it, so here are my thoughts for you to take or leave. In reading them please realize that I’m a “dumb shit” when it comes to viruses, though I do get to triangulate with some of the world’s best experts. So, for the little that they’re worth, here are my thoughts. 

Three Perspectives

As I see it there are three different things going on that are related yet are very different and shouldn’t be confused: 

1) the virus,

2) the economic impact of reactions to the virus, and

3) the market action.  

They all will be affected by highly emotional reactions. Individually and together they lend themselves to a giant whipsaw with big mispricings, with the off chance that it will trigger the downturn that I have been worried would happen with both the big wealth/political gap and the end of the big debt cycle (when debts are high and central banks are impotent in trying to stimulate).

1) The Virus

The virus itself will almost certainly a) come and go and b) have a big emotional impact, which will most likely produce a big whipsaw. 

It will most likely lead to an uncontained global health crisis that could have high human and economic costs, though how it is handled and what the consequences will be will vary a lot by location (which will also affect how their markets behave). Containing the virus (i.e., minimizing its spreading) will occur best where there are:

1) capable leaders who are able to make executive decisions well and quickly,

2) a population that follows orders,

3) a capable bureaucracy to enforce and administer the plans, and

4) a capable health system to identify and treat the virus well and quickly. 

It will require the leaders to turn on “social distancing” quickly and effectively ahead of the virus accelerating and to withdraw it quickly as it declines.  I believe that China will excel at this, major developed economies will be less good but OK, and those who are weaker than them in these respects will be dangerously worse. 

For this reason, I am told that it’s likely that it will spread fast in these other countries and roughly in proportion to those four factors I just mentioned, and likely as a function of the weather (e.g., the hot weather in the Southern Hemisphere is thought to be an inhibitor). Because it is spreading fast to many countries and the reported cases and deaths are likely to increase rapidly, the news is likely to rapidly increase panicky reactions. 

Also, in the US there will be much more testing happening over the next couple of weeks, which will dramatically increase the numbers of reported infected people, which will also probably lead to more severe reactions and greater social distancing controls.  I am told that the stresses on hospitals could become very large, which will make handling the cases of all patients more difficult. In short, I am told that we should expect much more serious problems ahead. 

2) The Economic Impact

Reactions to the virus (e.g., “social distancing”) will probably cause a big short-term economic decline followed by a rebound, which probably will not leave a big sustained economic impact. The fact of the matter is that history has shown that even big death tolls have been much bigger emotional affairs than sustained economic and market affairs. My look into the Spanish flu case, which I’m treating as our worst-case scenario, conveys this view; so do the other cases.

While I don’t think this will have a longer-term economic impact, I can’t say for sure that it won’t because, as you know, I believe that history has shown us that when

a) there is a large wealth/political gap and there is a battle against populists of the left and populists of the right and

b) there is an economic downturn, there are likely to be greater and more dysfunctional conflicts between the sides that undermine the effectiveness of decision making, and this is made worse when

c) there are large debts and ineffective monetary policies and

d) there are rising powers challenging the existing world powers.

The last time that happened was during the 1930s leading up to World War II, and the time before that was in the period leading up to World War I. Certainly, the wealth gap and political conflict leading to possible policy changes will be top of mind along with the coronavirus on this Super Tuesday. 

3) The Market Impact

The world is now leveraged long with a lot of cash still on the sidelines—i.e., most investors are long equities and other risky assets and the amount of leveraging that has taken place to support these positions has been large because low interest rates relative to expected returns on equities and the need to leverage up low returns to make them larger have led to this. The actions taken to curtail business activities will certainly cut revenues until the virus and business activity reverse which will lead to a rebound in revenue. That should (but won’t certainly) lead to V- or U-shaped financials for most companies.  However, during the drop, the market impact on leveraged companies in the most severely affected economies will probably be significant. We will show you what that looks like shortly. My guess is that the markets will probably not distinguish well between those which can and cannot withstand well the temporary shock and will focus more on their temporary hit to revenues than they should and underweight the credit impact—e.g., a company with plenty of cash and a big temporary economic hit will probably be exaggeratedly hit relative to one that is less economically hit but has a lot of short-term debt. 

Additionally, it seems to me that this is one of those once in 100 years catastrophic events that annihilates those who provide insurance against it and those who don’t take insurance to protect themselves against it because they treat it as the exposed bet that they can take because it virtually never happens.  These folks come in all sorts of forms, such as insurance companies who insured against the consequences that we are about to experience, those who sold deep-out-of-the-money options planning to earn the premiums and cover their exposures through dynamic hedging if and when the prices get near in the money, etc. The markets are being, and will continue to be, affected by these sorts of market players getting squeezed and forced to make market moves because of cash-flow issues rather than because of thoughtful fundamental analysis.  We are seeing this in very unusual and fundamentally unwarranted market action. Also, what’s interesting is how attractive some companies with good cash yields have become, especially as many market players have been shaken out. 

As far as central bank policies are concerned, interest-rate cuts and increased liquidity won’t lead to any material pickup in buying and activity from people who don’t want to go out and buy, though they can goose risky asset prices a bit at the cost of bringing rates closer to hitting ground zero. That’s true in the US. In Europe and Japan, monetary policy is virtually out of gas so it’s difficult to imagine how pure monetary policy will work. In Europe, it will be interesting to see if fiscal policy stimulations can pick up in this political environment.  Also, in all countries, don’t expect much more stimulation coming from rate cuts because most of the rate cuts have already happened via the declines in bond and note yields which is what equities and most other assets are priced off of. So, it seems to me that containing the economic damage requires coordinated monetary and fiscal policy targeted more at specific cases of debt/liquidity-constrained entities rather than more blanket cuts in rates and broad increases in liquidity.

The most important assets that you need to take good care of are you and your family. As with investing, I hope that you will imagine the worst-case scenario and protect yourself against it.

Tyler Durden

Wed, 03/04/2020 - 11:05

"This Is Serious" - Virus Hunter Who Discovered Ebola Discusses 'Worst-Case Scenario' For Coronavirus

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"This Is Serious" - Virus Hunter Who Discovered Ebola Discusses 'Worst-Case Scenario' For Coronavirus

As the coronavirus becomes the all-consuming news story of the moment, the Financial Times decided to invite an extremely apropos guest for this weekend's "Lunch with the FT". That guest is: Belgian scientist Peter Piot, the "Mick Jagger of Microbes", best known for discovering the Ebola virus.

Obviously well-qualified, how does Piot feel about

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COVID-19? He didn't mince words: "This is serious."

"I’m not the scaremongering type," he says. "But I think this is serious in the sense that we can’t afford not to consider it as a serious threat."

"It could be that, indeed, it’s going to be over in a few months," he continues, crunching into a tempura-covered sage leaf. "But just take the counterfactual. We say, ‘OK, it’s fine and we don’t do anything.’ I bet that we would already have had far more cases in Singapore, the UK, Germany. Let’s not forget, we are already well over 1,000 deaths. That’s not a detail."

The interview took place on Feb. 13, which means that since Piot made these comments, 1,500 more people have died, and serious outbreaks have emerged in Iran, South Korea and Italy. Saudi Arabia has halted pilgrimages to Mecca, and Japanese PM Shinzo Abe has asked all schools in the country to close.

As the discussion delved deeper into the subject of the outbreak, Piot pointed out that although this "certainly isn't SARS" it spreads much more easily because it resides in the tissues of the throat, allowing it to be spread through the air more easily.

With all this in mind, the "big question", as Piot sees it, is how many will ultimately be infected.

"Now, let’s say, the mortality rate is 1 per cent. So, the big question is, how many people will get infected? Are we talking about hundreds of thousands or millions? Now 1 per cent of one million is 10,000; that’s 10,000 people who will die," he says.

"It’s clearly not Sars," he continues, referring to severe acute respiratory syndrome, which killed nearly one in 10 who contracted it 17 years ago. "That’s the good news. But the bad news is, it spreads much faster. The Sars virus sits deep in your lungs. With this virus, it seems that it’s in your throat and that’s why it’s far more contagious."

But since there is no vaccine, Piot pointed out that if it things do get bad, we're screwed, since we only have "medieval" methods of containment at our disposal.

"Secondly, we have no vaccine. All we have is medieval ways of containment: isolation, quarantine, contact tracing."

Piot then offered an interesting comparison to the AIDS outbreak. He recalls that, back in 1981, when the first AIDS cases were discovered among six or seven gay men in California, nobody expected it to go on to infect 75 million people.

In situations like this, he adds, it's always better to overreact than to dismiss the threat.

Piot remembers hearing about the first cases of a mysterious virus in Los Angeles in 1981. "The first report of HIV was six or seven gay men in California. Cumulatively, now we have, like, 75m people who have been infected. Who would have thought that then? Nobody. I’d rather be accused of overreacting than of not doing my job."

After exchanging some comments about the food, the epidemiologist explained to his FT interlocutor why he doesn't begrudge the WHO for 'going easy' on China.

He praises the role of the World Health Organization, which he says is nimbler under Tedros Adhanom Ghebreyesus, an Ethiopian and its first African director. Dr Tedros has been criticised for going easy on China, which suppressed information in the early stages of the outbreak. "The dilemma is he could have his five minutes of fame by bashing China. But what happens afterwards? You need to work with them,” he says, scooping up some juicy borlotti beans.

As for what will happen with the outbreak in China? Piot suspects the situation will get "much worse" before it gets better.

What’s the worst-case scenario with coronavirus, I ask. "That we’ll have a pandemic," he replies. "I think it will get much worse in China. And here we will see more and more transmission. That’s my gut feeling. But how big it’s going to be, I honestly don’t know."

He actually has some experience in this department: When he was battling the spread of AIDS in 2002 as the head of UNAids, the United Nations-backed NGO dedicated to fighting the global outbreak, he made the mistake of publicly criticizing China about the number of AIDS cases going unreported.

"It’s a fine line. I learnt this the hard way," he says, referring to 2002 when UNAids, the organisation he ran from 1995 to 2008, issued the so-called "Titanic Peril" report, which argued that China had many more cases of HIV than it was admitting. "It’s the only time that my then boss, Kofi Annan, called me on a Sunday afternoon. He said, 'Peter, you’re a brave man, but nobody has ever won against the People’s Republic of China.'"

Though he also eventually convinced the CCP to make some progressive policy changes to contain an AIDS outbreak.

"Wen asked me, 'What’s the situation, what should we do?' And I thought, you have 10 seconds to think. Am I going to be diplomatic or am I going to say the truth? He must have seen it. He said, 'Forget who I am. Forget that we’re the Communist party. Tell me what you think and I’ll see what I can do.' Piot advised Beijing to be more open about the problem and to work with people who were vulnerable, including drug addicts and sex workers, rather than jailing them. China’s policy changed decisively after that encounter.

Overall, in Piot's estimation, the world has done a decent job of recognizing the threat posed by pandemics. Still, there's still plenty of room for improvement, as the epidemic is showing the world, particularly now that the issue of mask shortages is becoming a problem in the US after playing a major role in exacerbating the outbreak in China.

Piot thinks differently. "If we do nothing, then that’s the case," he says, particularly since new viruses - as coronavirus appears to have done - can always jump from animal to human. But these days far more people die of non-communicable diseases than of infectious ones, he says.

"Collectively, we’ve done quite a good job. That’s why we need, how to say it, a fire brigade," he says, of a stronger and better-prepared global health system. "You don’t set up a fire brigade when your house is already on fire."

That's a catchy line. Hopefully, once the dust settles, the global community will remember that this wasn't the first global pandemic, and it likely won't be the last.

Tyler Durden

Fri, 02/28/2020 - 23:25

Nomura: Investors Are Finally Considering A "Previously Unthinkable Scenario"

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Nomura: Investors Are Finally Considering A "Previously Unthinkable Scenario"

When discussing the potential catalysts for yesterday's furious market selloff, we pointed out the sharp dropoff in dealer gamma following Friday's op-ex which opened a "trapdoor" lower in stocks now that the gamma buffer was gone...

... coupled with the likely liquidation among asset managers whose SPX futures positioning had reached an all time hig

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h, 100%ile heading into this weeks puke.

However, relying on CTA model estimates from Charlie McElligott, we said that it was unlikely that systematic (i.e. quant) investors had joined in the selloff, primarily because many of their forced-selling trigger levels were far below yesterday's S&P spot level. That said, we may well be witnessing the first wave of systematic liquidation today with Morgan Stanley anticipating some $60BN in forced liquidations today as a result of the continued selloff, a number which may rise substantially if the selloff isn't halted, and if vol continues to rise.

Picking up on this theme, Nomura's other quant, Maasanari Takada writes overnight the it is unlikely that algorithmic investors (trend-following algos such as CTAs and risk-parity funds) are the main culprits behind the selloff. Instead, the Nomura quant believes that the algos were "forced to adjust their positions by a drop in share prices and rise in bond prices running counter to recent short-term trends."

Looking first at CTAs, Takada writes that pressured by the global risk-off flow, the S&P 500 suddenly broke below 3,285 (the average cost of CTAs' net buying of futures since December 2019). If it falls below the next inflection point of 3,215, CTAs would likely step up their loss-cutting. Meanwhile CTAs have been net buyers of UST futures (TY), accumulating long positions at a rapid clip. While CTAs showed early signs of unwinding these long TY positions in the latter half of last week, they switched to following the market in buying when 10yr UST yields broke out of their recent range, falling below 1.50%. In both cases, prices of these futures are shifting in ways that cannot be explained by the typical behavior of trend followers.

The same can be said for the volatility-driven trend-followers. Risk-parity funds, for example, also seem to have begun to partially rebalance their portfolios, shifting from selling stocks to buying investment-grade bonds in response to the sharp rise in equity volatility. Unlike in the lead-up to the VIX shock in February 2018, however, they do not seem to have built up excessive equity exposure. We surmise that backwardation in the VIX futures term structure led to mechanistic buying back of VIX futures. In both cases these seem to have stopped at mere passive position adjustments, and it does not appear that a series of systematic trades actively caused the equity selloff on their own.

While these mechanistic trades likely ended up accentuating the drop in share prices and the rise in bond prices, the main trigger seems to have been human decisions and nontechnical factors.

So if not quant-driven selling then what prompted Monday's dramatic liquidation?

To Nomura, the most straightforward interpretation of these changes in speculative supply and demand is that "investors probably stepped up their moves to  factor in irregular deterioration in fundamentals." One such "fundamental", which investors long ignored, is the growing risk from the COVID-19 outbreak, which had been thought likely to have only a momentary depressive effect on the economy, and which could in fact trigger a global economic collapse.

As a result, Nomura ominously points out that "a wide range of investors are now factoring in a previously unthinkable scenario" which becomes apparent when observing the "unusual deterioration pattern" in the bank's global equity sentiment index, shown below.

While extrapolating the dramatic one-day change into the future may be unwise, Takada writes that equity sentiment does tend to be predictive of economic trends. The recovery in equity sentiment since autumn 2019 has tended to be in lockstep with shifts in global economic sentiment (as synthetically measured using sentiment indicators from major countries, converted to a z-score). As he concludes, "if sentiment stagnates below zero, this would seem to indicate that markets have begun to factor in a slowdown in economic momentum."

As further evidence of a violent deterioration in sentiment, Nomura also sees evidence that global macro hedge funds, which have heretofore been working under a somewhat bullish top-down scenario, have been selling equities. As if tracking the improvement in DM macro surprise indices, global macro hedge funds had been accumulating long equity positions, but they now look to have found it necessary to adjust their positions in light of the risk of an unexpected economic downturn triggered by the COVID-19 outbreak.

Noting that this unwinding of long equity positions by global macro hedge funds is also noticeable in Asia ex-Japan (AEJ) equities, Nomura cautions that CTAs may have been obliged to follow this selloff by global macro hedge funds by liquidating their own long positions. This can be clearly seen in South Korea's KOSPI 200 futures market. As of yesterday (24 February), CTAs had rapidly closed out 35% of their long positions from the recent peak (9 February). As their existing long positions (net buying since November 2019) break even with KOSPI 200 futures around 283, a break below this would likely add impetus to CTAs' exits.

Takada is especially focused on what long/short funds - who have been the most bullish of the major players to date - do next, and whether they will again push back against these headwinds to once again buy on weakness. Of note, long/short funds have consistently bought on dips throughout the selloff since January, building up their equity exposure globally. If even the long/short funds were to shift toward cautious stances, Takada concludes that there is risk that this bearish contagion could infect the entire hedge fund population.

In conclusion, Nomura also takes a look at the technical situation, where it evaluates whether the S&P 500 can achieve a retracement of half its recent plunge during the relief rally that is expected to take place in the next three to four days. 

Judging from past patterns of activity, advance omens of a second vol-up wave tend to manifest in (1) weakness in the relief rally, and (2) a conspicuous sellback flow around 6-7 trading days after the initial vol-up wave (here we define a "second wave" as VIX above 20 within 10-20 days after the initial vol-up). This time, even if a relief rally associated with a retracement of around half takes shape, some speculative investors would likely be inclined to undertake sellbacks if uncertainty regarding COIVD-19-related risk remains unresolved.

Tyler Durden

Tue, 02/25/2020 - 12:50

NYT Floated Soleimani Assassination Scenario In Baghdad Hours Before Strike

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NYT Floated Soleimani Assassination Scenario in Baghdad Hours Before Strike

Hours before a US strike at Baghdad's International Airport killed Iran's top military leader, Qasem Soleimani, former Obama National Security Council (NSC) official Steven Simon posited in a New York Times Op-Ed that Soleimani could be assassinated using a hypersonic missile while visiting Baghdad.

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r />

[H]ypersonics are a weaponized moral hazard for states with a taste for intervention, because they erase barriers to picking fights. Is an adversary building something that might be a weapons factory? Is there an individual in an unfriendly country who cannot be apprehended? What if the former commander of Iran’s Revolutionary Guards, Qassem Soleimani, visits Baghdad for a meeting and you know the address? The temptations to use hypersonic missiles will be many.

Oddly, he describes Soleimani as the "former commander of Iran's Revolutionary Guards," when he was in fact in charge of the Guards' Quds Force until his death.

The Times tweeted the article at 1:38 p.m. EST, several hours before the strike.

While US officials told Reuters that a drone - not a hypersonic weapon - took out Soleimani, it's incredibly curious that Simon, Obama's former senior director for the Middle East and North Africa on the National Security Council, wrote of his assassination literally hours before it happened, where he suggested it might happen.

According to his bio, Simon is an adjunct senior fellow for Middle Eastern studies at the Council on Foreign Relations (CFR), as well as an adjunct professor of security studies at Georgetown University.

He was also a Goldman Sachs visiting professor of policy at Princeton University, as well as the deputy director of the International Institute for Strategic Studies and a senior analyst at the RAND corporation.

Interestingly, in 2017 RAND tweeted "Study: Hypersonic missiles are a game changer," the exact same headline as Simon's NYT Op-Ed.

Tyler Durden

Fri, 01/03/2020 - 15:45




OECD Sees Global Growth At Decade-Low As WTO Warns Of "Doomsday Scenario"

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OECD Sees Global Growth At Decade-Low As WTO Warns Of "Doomsday Scenario"

Global growth is quickly plunging to levels not seen since the financial crisis as the risk of long-term stagnation has developed, according to the OECD's latest Economic Outlook.

The world economy is expected to grow at a decade-low of 2.9% this year and remain in a subdued range of 2.9% to 3% through 2021. Global GDP has quickly decelerated from peaking at 3.5% in 2018.

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The Paris-based policy forum warned that several years of escalating trade disputes between the US and China have resulted in a synchronized global downturn that has pushed down global growth to alarming levels, not seen since the last financial crisis. 

The fragility of the world has led to a cycle of vulnerability where a global trade recession could be imminent or has already arrived. 

 "The alarm bells are ringing loud and clear. Unless governments take decisive action to help boost investment, adapt their economies to the challenges of our time and build an open, fair and rules-based trading system, we are heading for a long-term future of low growth and declining living standards, "OECD Secretary-General Angel Gurría recently said.

OECD warns that China, the driver of global growth the bailed everyone out during the last financial crisis, might not be able to stimulate the global economy this time around as trade tensions soar and a rebalancing of the Chinese economy continues. 

China will accept sub 6% GDP in 2020, as it's likely Beijing will not turn on its massive credit spigots anytime soon. 

China's credit growth slowed more than expected in October to the weakest pace since at least 2017 as a continued collapse in shadow banking, weak corporate demand for credit, and seasonal effects all suggest that a rebound in the domestic and global economy aren't likely in the near term. 

To make things even more complicated for the global economy, the Trump administration has created a perfect storm that will likely paralyze the World Trade Organisation's (WTO) appeals body in December that could lead to further escalations in the trade war and damage the global economy into a depression. 

 Without WTO's working appeals system, international trade disputes will go unresolved and could escalate into tit-for-tat tariff wars that spiral out of control.

"At that stage, the whole thing gets out of hand," said Stuart Harbinson, Hong Kong's former representative at the WTO, now a trade consultant at Hume Broph. "I think that will be the doomsday scenario."

And with global growth at decade lows, China not able to jump-start the global economy, and the risk that trade tensions could continue escalating -- it seems that global equities have priced in a recovery that was only fantasy -- what happens next could be a repricing event for risk assets. 

Tyler Durden

Thu, 11/21/2019 - 22:45


Business Finance


Brandon Smith: Trump Impeachment And The Civil War Scenario

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Brandon Smith: Trump Impeachment And The Civil War Scenario

Authored by Brandon Smith via Alt-Market.com,

There has been a lot of talk the past year about a civil war in the US, so much so that even the mainstream media is pushing the concept lately. A poll from Rasmussen in 2018 claimed that 31% of US voters believed that America would see a second civil war within the next five years. A more recent poll from The Institute Of Politics

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And Public Service shows that 7 out of 10 voters believe the US is two-thirds of the way towards civil war.

New talk of “impeachment” over the Ukraine issue has stirred the soup even further as some conservatives argue that if Trump is removed from office a war will erupt.

I want to be absolutely clear and state that I remain highly skeptical that the impeachment circus is anything more than another distraction for the public, and I believe that it will go nowhere (just like Russiagate).  That said I do think there is a marginal chance of a 4th Gen play here by the globalists. A civil war, if directed and manipulated in the right way, could benefit the elites greatly as long as it's combined with a few other ingredients.

First, we have to understand what the real situation here is, though. As my readers are well aware, I predicted well before the 2016 election that Trump as president would be the perfect scapegoat for the implosion of the 'Everything Bubble'. That implosion is happening in nearly all fundamental economic indicators right now, as I outlined in my last article. There are two questions to consider at this point: Will stock markets follow fundamentals down before the 2020 election?  And, if stocks remain high, will it even matter with the rest of the system tumbling into recession?

In January of 2016 at during his election campaign, Donald Trump said that the US economy was 'In a bubble he feared would burst and he did not want to deal with a financial collapse if he was elected to the White House.'  He called on the Federal Reserve to raise interest rates and stop propping up the fake markets.

In 2019, Trump has attached his administration completely to the performance of markets with endless Twitter comments, taking full credit for the financial bubble that he once criticized.  He has also now called for the Fed to bring interest rates down to zero to artificially support the economy once again (Obviously we have to ask the big question - If this is the "greatest US economy ever", then why would Trump want the Fed to introduce more stimulus to prop it up?). I believe this bizarre behavior is entirely deliberate on Trump's part and that he intends to take the blame for the ongoing crash. If stocks fall along with the rest of the economy by the end of 2020, it is unlikely that the globalists plan to keep him around for a second term. His job acting as a scapegoat for the crisis the central banks created will be accomplished.

Second, my readers are also aware that I have outlined the connections between Trump and the globalists, including how a large part of his fortune and his image was saved by a bailout from the Rothschild family during the 1990's. Wilber Ross, the Rothchild agent who arranged the deal, is now Trump's Commerce Secretary. Ross' presence in Trump's cabinet along with numerous other elites, such as Pompeo, Mnuchin, Lightheizer, Kudlow and a host of other Council on Foreign Relations members indicates that Trump is and probably always has been controlled opposition. When one elite cycles out of Trump's cabinet, another one just takes his place.

I hear the argument often that the supposed impeachment proceedings are “proof” that the globalists are trying to destroy Trump. This is clearly nonsense, as Trump continues to work closely with such elites on a daily basis. The more likely explanation is that, like Russiagate, the impeachment itself is a farce designed to keep the American public sharply divided and ready to go to war at a moment's notice. In fact, the chances of the Ukraine debacle blowing back on Joe Biden and his campaign in the Democratic Primaries are high.

Biden is obviously NOT the candidate that the elites intend to run on the Democrat side, and the Ukraine theater creates a rationale for him to bow out while also conjuring ever more anger on both sides of the political canyon. But does this mean that Trump will not be impeached? Not necessarily...

Trump is in the position he is in for a reason.  Trump is a useful pawn in a number of ways as long as his influence over conservatives remains strong and his position can be exploited to maximum effect. For example, in my most likely scenario, a market crash swiftly follows the current plunge in fundamentals before the 2020 election. This essentially ensures Trump's defeat in November, while his conservative supporters and conservative principles in general take the blame for the disaster. However, what if the elites are seeking to add even more chaos to the cauldron?

An impeachment leading into the election, whether successful or not, could be used to enrage conservatives and trigger a violent reaction against the Democrats specifically. If Trump loses the election or never makes it to the election due to impeachment, a host of outcomes will occur that are beneficial to the globalists even though Trump is one of their puppets:

1) The impeachment scenario will make rabid leftists feel vindicated in their insane behavior the past few years. It will reward them and inspire them to act even crazier.

2) Conservatives could be pushed over the edge into direct action, but unfortunately, if this direct action is aimed haphazardly at the political left and democrats, conservatives will have been conned. The globalists WANT us fighting over a meaningless puppet like Trump. They WANT us to direct our anger at the Democrats instead of at them.

3) If we are stupid enough to fight a war over Trump, this will lead to some detrimental results. Conservatives, though feeling justified in their actions, will look like villains, fighting to protect a leader that destroyed the US economy causing untold public suffering, as well as a leader that most of the world will see as personally corrupt. Trump is not a resilient long term inspiration for a rebellion, he's not even a good short term inspiration.

4) Rebellions need focus and a set of strong principles and virtues in order to stay alive. If they are freedom fighters, then the establishment will seek to make them look like they are not freedom fighters, but self serving terrorists or agents of a foreign power. This process has already been started by the elites. Trump is the tool for co-option of the liberty movement. Impeachment could be a trigger for luring the movement to rebel under false pretenses and attack the wrong people (the leftists are only a symptom of the disease, the globalists ARE the disease).

5) A civil war that does not seek to target the globalists as the root problem could be easily molded by the globalists into a scapegoat for whatever calamity they desire. An economic crash under Trump would attach a lot of peripheral blame to conservatives. But, an economic crash and a civil war over Trump's impeachment would attach ALL the blame to conservatives. Conservatives become the bad guys of the age, the people that almost ended the world, the people that future generations will be taught to despise as examples of the “evils of nationalism and populism”.

6) A war fought in the name of faulty principles and a failed leader would provide a reason for the globalists to pursue an international response to the crisis. And again, this would not look like an invasion of American sovereignty, but a global attempt to “keep the peace”.

So what is the solution? Is this a Catch-22 that conservatives cannot escape from? I've long held that a war between liberty activists and the globalists is inevitable, if not long overdue. The globalists know that this war is coming, as well. 4th Generation Warfare tactics dictate that the globalists will try to trick liberty activists into fighting this war on their terms. That is to say, the globalists will seek to turn us (their opponents) into unwitting allies. The Trump impeachment strategy could very well provide them with that kind of psychological leverage.

It would be seen by many conservatives as a Democratic party coup and a violation of the constitution. With leftist activists so viciously cult-like and so far beyond all logic or reason, the political left and political right might end up shooting at each other anyway. The issue is the narrative under which this occurs.

If liberty activists stay focused on the primary objective (removing the globalists from power), instead of being lured into focusing all their energy on the Democrats, then the scenario changes. If conservatives remain skeptical and critical of Trump's associations and activities, this makes it difficult for the elites to paint us as “Trump's brownshirts”. Certain people within the liberty movement have not been helpful in this regard; blindly defending Trump at every turn no matter how many elites he brings into his cabinet or how many times he takes credit for the economic bubble. Some of these people have indeed called for a civil war in the name of stopping a Trump impeachment. They have become useful idiots for the globalist agenda.

If a war is fought, it must be over a concrete set of contentions. If a Democrat enters the White House after the 2020 election and attempts to institute major gun control and gun confiscation measures, then this is a perfectly solid reason to fight. If they try to enforce carbon restrictions that would destroy what's left of our economy and cause suffering among the public, then this is another good reason to fight. If they try to legislate even more socialist programs, usurping constitutional parameters and taxing the populace into perpetual poverty, then yes, we should fight. But Trump? No, Trump is a pied piper, not a leader or a rationale for civil war.

Now, I realize that the above scenario I describe is extreme, but I do see it as a possibility, so it's important to recognize that it is there waiting to be used by the establishment against us. That said, there are other more likely outcomes.

The impeachment could rally conservatives to vote in larger numbers in 2020, and if the markets hold out through the year, then Trump is probably slated for a second term. A second term would indicate that the elites need Trump for another event (perhaps a regional war) on top of the market crash, which would take place directly after Trump's reelection.

The Ukraine issue might merely be designed to undermine Joe Biden's candidacy, paving the way for either Bernie Sanders or Elizabeth Warren (I don't see another serious run by Hillary Clinton in the cards, Bloomberg is a joke even among many Democrats and I still predict Elizabeth Warren will be the Dem candidate in 2020). If the markets crash, or if the currently crashing fundamentals hit main street hard enough, then Trump will be ousted and the Dems will take over, blaming him and conservatives for every financial mess for the next four years (or more).

At this point in the game, it's hard to say which option the globalists will use. It is vital, though, that we remember that the impeachment is a farce in more ways than one. The target is not Trump, the target is us.

*  *  *

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Tyler Durden

Tue, 11/12/2019 - 23:45


War Conflict


Global Carmageddon Continues: Pirelli And VW Warn About "Worsening Market Scenario"

zerohedge News global carmageddon continues pirelli warn about worsening market scenario All https://www.zerohedge.com   Discuss    Share
Global Carmageddon Continues: Pirelli And VW Warn About "Worsening Market Scenario"

The automotive industry has been mired in recession for the better part of the last 18 months and still shows no signs of stopping. On Tuesday, comments from both VW's CEO and from tire maker Pirelli, who cut its guidance for 2020, continue to exemplify an industry where the very worst of a recession may still be yet to come.

VW's CEO said in an intervie

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w with Bloomberg early this week that he was cautious about "all regions except South America", including major car markets like North America, Europe and China. 

“We know what needs to be done - get our act together on vehicle launches and be very cautious on costs and expenses,” he commented. He also stated that he wasn't surprised that PSA and Fiat Chrysler are in merger talks, given speculation about industry consolidation.

Volkswagen is expected to present a new five-year plan to its board in mid-November.

The shift to electric vehicles, more stringent emissions standards and a slowing global economy all continue to weigh on many auto manufacturers. 

Tire maker Pirelli also warned about its operating profit margin and cash flow on Tuesday, saying it would delay the presentation of a new business plan while it works out scenarios for what it sees as a "worsening market scenario", according to Reuters. 

The company forecasted full year margin on adjusted EBIT of between 17% and 17.5%, much lower than already-lowered expectations of 18% to 19%. The company's adjusted EBIT fell to 685 million euros for the nine months ended September 30, 2019. Pirelli also lowered its full year cash flow expectations to between 330 and 350 million euros, down from expectations of between 350 million and 380 million euros. 

The company said that greater fixed costs and lowered production to reduce inventories both stung its guidance.  

The company is set to present its industrial plans to 2022 in the first quarter of next year. This presentation was previously supposed to occur on December 11 of this year. Pirelli said the setback was due to the market being “more challenging compared with the forecasts of recent months”.

Chief Executive Marco Tronchetti Porvera said: “In this context, to protect our profitability we have to act deeper to reduce the cost of our products.”

Tyler Durden

Thu, 10/31/2019 - 01:00


Business Finance

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