Tuesday, July 7, 2020

Oops, Facebook’s Market Cap Plunges by $143 Billion

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by Wolf Richter, Wolf Street:

Throughout the scandals, Facebook was clad in Teflon and nothing mattered. But today, it mattered.

Facebook shares plunged 23% to $169 in late trading today, after successfully dodging the impact of various scandals the company has been embroiled in recently over its horrendous privacy practices, including disclosures that political analytics firm Cambridge Analytica, now defunct, had improperly accessed data from about 87 million Facebook users. This led to the world being served up the spectacle of CEO Mark Zuckerberg testifying before Congress in early April.

Wild And Unprecedented Price Fluctuations Are Causing Financial Chaos For U.S. Businesses

by Michael Snyder, The Economic Collapse Blog:

In every war there is a high price to pay, and this trade war will not be any different.  The normal flow of goods and services around the globe is being severely disrupted, and even though this trade war has barely just begun, it is already having an enormous impact on the U.S. economy.  Even if we ultimately win this trade war and the Trump administration is able to achieve all of the goals that it is targeting, there will still be a great cost in the short-term.  We are going to see businesses fail, we are going to see workers get laid off, and global economic activity will inevitably contract.  Heck, at this point even Fox News is calling this trade war “economic suicide”.  We live at a time when a delicately balanced formula of economic factors allows us to live a debt-fueled standard of living that is far beyond what we actually deserve.  Now we are messing with that formula, and the consequences are likely to be far more severe than most Americans are anticipating.

Wall Street’s Dark Pools Get a Bonanza Wrapped as Reform by the SEC

by Pam Martens and Russ Martens, Wall St On Parade:

The Securities and Exchange Commission (SEC), which has had two separate Wall Street lawyers at its helm for the past five years (under both the Wall Street- friendly Obama administration as well as the current Trump administration), has released a 558-page document that attempts to pass itself off as reforming Wall Street’s Dark Pools. Instead, it simply tinkers around the meaningless edges of reform.

Dark Pools are trading venues that should not exist in an efficient, transparent and honest securities market. They are effectively unregulated stock exchanges being run internally by some of the biggest Wall Street banks on Wall Street: The same banks (like Citigroup, JPMorgan Chase, Goldman Sachs and Merrill Lynch) that have been serially charged with abusing their customers.

Russian Exodus From U.S. Treasury Market Continues

by Chris Marcus, Miles Franklin:

One month after Russia sold off half of its U.S. Treasury holdings, they just dumped virtually the rest.

So officially gone are the days of just speculating about an exodus out of the U.S. Treasury market. As one of the biggest customers has just left the auction.

Russia has sharply reduced its holdings of United States Treasury bonds, with Russian ownership recently moving to an 11-year low.

Russia’s ownership of US bonds declined from $96.1 billion in March to $48.7 billion in April and then to just $14.9 billion in May, according to the most recent data available, the Russian news website RT and the finance blog Wolf Street reported this week.

TRUMP WINS AGAIN WITH HUGE EU CONCESSIONS/GOLD UP $6.45 TO $1231,95 AND SILVER UP 8 CENTS TO $15.58/MORE SWAMP STORIES FOR YOU TONIGHT

by Harvey Organ, Harvey Organ Blog:

GOLD: $1231.95  UP  $6.45 (COMEX TO COMEX CLOSINGS)

Silver:   $15.58      UP 8 CENTS (COMEX TO COMEX CLOSINGS)

Closing access prices:

Gold $1231.65

silver: $15.61

The Fed Is on a Collision Course

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by Jim Rickards, Daily Reckoning:

Is the Trump economic boom a mirage? The data say yes, but the Fed models say no. The Fed has a long track record of sticking to its model-based approach and missing major turns in the U.S. economy.

Current Fed policy will push the U.S. economy to the brink of recession later this year. When that happens, the Fed will have to reverse course and ease monetary policy. This will send the dollar crashing while gold and the euro soar.

At first, the claim that the Trump economic boom is nothing special seems contrary to the happy-talk headlines coming from CNBC, Fox Business, Bloomberg and other mainstream business media outlets.

Two giant US pension funds admit there’s a BIG problem

by Simon Black, Sovereign Man:

I’ve been talking a lot about the looming pension crisis…

My short thesis is, if you’re depending on a pension for your retirement, it’s time to start looking elsewhere.

Pensions are simply giant funds responsible for paying out retirement benefits to workers.

And today, the nation’s 1,400 corporate pension plans are facing a $553 billion shortfall. And, according to Boston College, about 25% will likely go broke in the next decade.

Potential Impacts of the Yuan-Gold Peg – Craig Hemke (24/07/2018)

by Craig Hemke, Sprott Money:

Two weeks ago, we demonstrated that the yuan-dollar exchange rate is now the primary driver of global gold prices. Today, we attempt to decipher some of the important implications of this phenomenon.

Before we begin, we urge you to review this column from earlier in the month:https://www.sprottmoney.com/Blog/has-the-pboc-take…

So again, let’s be perfectly clear about this. Though other factors such as headlines and the dollar index can affect price on a minute-by-minute basis, the primary driver of the gold price in the summer of 2018 is the yuan-dollar exchange rate. Though the PBOC has long-maintained a “peg” in the relative valuation of the yuan versus the dollar, the past 90 days have seen a steady devaluation of this peg to the tune of nearly 8%. See below: