Wednesday, April 8, 2020

The Fed’s “Canary in the Coalmine” is in Serious Trouble

from Silver Doctors:

If the single most important chart in the world right now breaks down from here, then it’s HIGHLY likely the system will go back into a panic and…

by Graham Summers of Gains, Pains, & Capital

The single most important chart in the world right now is investment grade credit spreads.

The Fed has announced it will buy investment grade corporate debt for the first time in history. The Fed also announced that it will be directly buying investment grade corporate debt ETFs like $LQD.

Leaks Everywhere: Federal Reserve Expands Balance Sheet at Fastest Rate Ever – Nathan McDonald

by Nathan McDonald, Sprott Money:

The situation across the globe is deteriorating rapidly, and I am not just talking about the continued spread of COVID-19 but the ramifications that come with it, ones that will likely have dire consequences in the coming months to years.

The financial collapse we are now living through is the most serious of these ramifications. It has gutted many businesses, and the following weeks will bring the highest level of unemployment the Western world has ever seen.

This means that big government is being looked to more and more to help sustain the system in the short term. By printing copious amounts of fiat money, they hope to plug as many holes as possible—while new leaks spring up all around them.

Shutdown Society or Not

by Paul Craig Roberts, Paul Craig Roberts:

A leading microbiologist gives the opposite view of virologist Marc Wathelet whose approach to controlling the virus I have posted on this website.

Both scientists make a lot of sense.  As I understand them, Dr. Wathelet’s recommendations stem from the West’s unpreparedness.  The lack of masks, tests, hospital capacity, and ventilators, together with the high infection rate of the virus, means that the health care system can be easily overwhelmed by the numbers of sick people.  As the virus progresses further in some people than in others, it is not predictable who among the sick are in the most danger, except generally—the aged with prior conditions.  Therefore Wathelet focuses on controlling the spread as people of all ages die from the virus.

Trucking Skids Off the Road Entirely

by Wolf Richter, Wolf Street:

“Only good news is that the number was still positive despite the high number of cancellations.”

Orders for heavy trucks in March collapsed by 52% from the already dreadfully low levels a year ago to 7,400 trucks, the lowest since 2010, driven by cancellations of existing orders “due to the sharp and sudden downturn in economic conditions,” according to preliminary estimates by FTR Transportation Intelligence. And so COVID-19 spirals through the economy:

“I Found The Source Of COVID-19…”

from ZeroHedge:

After living and working in China for over 10 years and speaking fluent Chinese, you get to know a society pretty well… and let me tell you this – if you’re applauding or admiring the political leadership of China, you’re all deluded beyond belief.

That is how “laowhy86” begins this succinct  video exploring the ‘facts’ – not conspiracies – behind the source of the coronavirus that is ravaging the earth.

“China doesn’t operate like ‘your’ country,” he warns, “the Chinese government is a face- and greed-driven government that relies on lies and bullying to maintain leadership.”

There’s a major sovereign debt crisis looming

by Simon Black, Sovereign Man:

By the mid 1300s, the Republic of Florence in modern day Italy had experienced one of the greatest economic booms in human history.

In less than a century, Florence had grown from a tiny, irrelevant backwater to become one of Europe’s largest cities and preeminent financial center.

The expansion was truly impressive. Florence’s population had grown 10x. It had become a leading manufacturer in both weapons and textiles.

(Many etymologists believe the word ‘pistol’ is derived from the name of a town near Florence called Pistoia, which was renowned for its quality arms.)

When Bulls Are Over-Anxious to Catch the Rocketship Higher, This Isn’t the Bottom

by Charles Hugh Smith, Of Two Minds:

Everyone with any position in today’s market will be able to say they lived through a real Bear Market.

In the echo chamber of a Bull Market, there’s always a reason to get bullish: the consumer is spending, housing is strong, the Fed has our back, multiples are expanding, earnings are higher, stock buybacks will push valuations up, and so on, in an essentially endless parade of self-referential reasons to buy, buy, buy and ride the rocketship higher.

The classic Bull Market reason to get extremely bullish is, yes, bearish sentiment: sentiment is terrible, and bearish sentiment is the surefire marker of a stock market bottom. The more bearish the sentiment, the more reasons to get bullish and start buying with abandon: max out the margin account, hock the farm, empty the kids’ college savings, whatever you need to do but dang it, dump every cent you have into stocks when sentiment gets bearish.


from SGTreport:

Boarders in Malibu are being arrested for paddling in the ocean, seeds are being called non-essential and therefore not for sale, and the economy is being decimated. Meanwhile the Rothschild’s Economist magazine mocks us with picket fence tombstones and a cover proclaiming “Covid-19 presents stark choices between life, death and the economy”, Bix Weir joins me to discuss.