Posts by The Trend Letter

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Headlines – Nov. 18/16

  • Wall St flat at the open; NASDAQ hits record high. Read story
  • Here are Goldman’s 2017 forecasts for stocks, oil & more – in one chart. Read story
  • Dollar charges to 14-year high, bond tantrum in full swing. Read story
  • The Euro is on its longest losing streak ever. Read story
  • Gold slides toward $1200 for second-straight weekly decline. Read story
  • VW set to slash up to 30,000 jobs. Read story
  • JP Morgan to pay $264 million to settle China ‘bribery’ probe. Read story
  • China is about to make the English Premiere League $700 million richer. Read story
  • Is the bond markets still smarter than the stock market? Read story
  • Trump names Sen. Jeff Sessions to be Attorney General. Read story
  • Trump taps Kansas Rep. Mike Pompeo as CIA director. Read story
  • China eyes APEC trade leadership role after Trump’s win. Read story
  • LinkedIn blocked by Russian authorities. Read story
  • Millions of Nigerians are falling for a 27-year old ponzi scheme. Read story
  • On the lighter side. Check it out!
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Headlines – Nov.17/16

  • Bank of Japan unveils surprise bond-buying plan. Read story
  • Yellen says Fed could raise rates ‘relatively soon.’ Read story
  • Clinton: ‘All I wanted to do was curl up…never leave the house again.” Read story
  • Carl Icahn says dial back on stocks, as Trump rally looks overdone. Read story
  • ECB primed to boost stimulus if needed; minutes. Read story
  • US attorney to charge two Valeant, Philidor executives, alleging ‘fraud and kickback scheme.’ Read story
  • Oil prices shoot higher amid Saudi optimism over output deal. Read story
  • Five reasons why oil prices could fall further. Read story
  • Jobless claims fall to 43-year low. Read story
  • US housing starts jump 25.5% in October. Read story
  • Shipping stocks soar as bears abandon ship. Read story
  • Obama’s environmental legacy just went up in smoke. Read story
  • Apple screwed up its new MacBook Pro so bad that developers are now considering Windows computers. Read story
  • Saving money isn’t the only thing you need to do to prepare for retirement. Read story
  • Bezos invests billions to make Amazon a top e-commerce player in India. Read story
  • On the lighter side. Check it out!
moodys

Moody’s issues negative global sovereign debt outlook

For two years we have been warning that starting in 2016 we would start to see the unraveling of the global Sovereign Debt bubble.  Moody’s Investment Service just issued a report stating that the outlook for global sovereign ratings is possibly until 2018, amid expectations for low economic growth and high public-sector debt.

According to the Moody’s report, their negative outlook for sovereign creditworthiness in 2017 is based on…

…expectations of continued low growth, a shift towards fiscal stimulus that will increase already high public sector debt, and rising political and geopolitical risks. Many emerging market sovereigns face the added risk of capital outflows. As a result, 26% of the sovereigns whose debt we rate currently have negative rating outlooks, the largest proportion since 2012, while only 9% have positive outlooks, indicating that we expect limited upward rating movement for sovereigns in 2017.

Of the countries rated, only 12 have a positive rating, while 35 countries have a negative rating.

“Since the start of 2016, a third of rated sovereigns have experienced a decline in their economic strength, and two-fifths in their fiscal strength,” the report said.

They also commented on the failure of the central banks’ monetary policy…

“Monetary policy’s ability to support growth in advanced economies is diminishing, and in many emerging markets it is constrained by above-target inflation and exchange-rate pressures. So we are seeing a gradual but broad-based shift in policy towards loosening fiscal policy in order to lift growth.”

As we predicted years ago, the $trillions of stimulus pumped out by the central banks has not realized any real growth to the global economy, and now governments are trying to pump up the economy via fiscal stimulus. What this means is that all these countries now have massive debts thanks to all the failed stimulus programs, and now with rising interest rates, it is going to take a bigger chunk of the government’s budget to service that debt.

According to Deutsche Bank, globally, governments currently owe over $60 trillion in sovereign debt, and that is just the “official” debt. Now things are starting to unwind. In the week since Trump was elected president, global bond holders lost over $1 trillion, the biggest sell-off in twenty years.

The US 10-year yields jumped over 50%, while Germany, Japan, and Switzerland saw their yields jump over 200%.

We continue to warn subscribers to stay away from any long-term government bonds. There will be a time to buy these bonds again, but certainly not now. We are waiting for the first Sovereign Debt default, and once that happens, watch out!

Stay tuned!

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Headlines – Nov. 16/16

  • Dow on pace to cool after four record closing highs in a row. Read story
  • Oil industry faces boom & bust, warns IEA energy group. Read story
  • US dollar reaches 9-month high as December rate hike seen as a lock. Read story
  • US government bonds stabilize. Read story
  • How blockchain will radically transform the economy. Read story
  • China’s central bank is hiring blockchain experts to help create digital currency & kill off cash. Read story
  • Soros fund bails out on gold ETF. Read story
  • EU warns 8 countries at risk of breaking excessive deficit rules. Read story
  • US retail sales rose briskly in October. Read story
  • Netflix subscribers surge & 9 more stock surprises. Read story
  • Unexpected issue with spending $1 trillion on infrastructure. Read story
  • 5 big real estate trends to watch in 2017. Read story
  • House Democrats pressure Pelosi after Trump’s win. Read story
  • Korean President Park seen bracing for impeachment. Read story
  • On the lighter side. Check it out!
renzi

Is the Italian referendum the next nail in the Euro’s coffin?

For the past two years we have been warning that the was a major trend change coming that would affect the global economy, global currencies, politics, & your family’s financial well-being. We highlighted that the driving theme of these major changes would be the loss of confidence & rising distrust in Government.

After the shock of the Brexit vote in the UK in June, we noted that the American political elite was in for a real wake up call as the swelling  anti-establishment movement was about to cross over the Atlantic & flow onto the US shore.

Just like with the Brexit decision, the Trump victory was a shock to the pollsters & mainstream media. The mainstream media does not seem to understand that with social media, the masses don’t care about who the Wall St Journal thinks should win. In today’s world, the masses don’t care about the media’s opinion, they can read what Trump & Clinton say on Twitter & decide for themselves who they want to believe.

You have to believe that every standing incumbent in political office is shaking in their boots right now. The status-quo, political elite establishment now have a target on their back, & the masses are gunning for them.

Next up is the referendum in Italy, where Prime Minister Matteo Renzi, frustrated with the chaos, & inefficiency of the Italian political system, took a gamble that the people would support his proposed changes to the system.  Renzi has stated that like David Cameron in the UK, he would resign if the referendum were to be rejected.

The proposal is planned to streamline the government, which on the surface, the country truly needs. Italy is a basket case, with an economy that has been even worse than Japan’s.

Renie’s apparent mistake was that in his eyes, the referendum was a way to reform Italy’s ineffective politics, while in the masses eyes it has become a proxy for the status quo, & a vote for Euro unity. The  two Euroskeptic political parties, the conservative Northern League & the Five Star Movement are jumping all over this, pumping up the masses.

The leader of the Five Star party, former comedian Beppe Grillo, proclaimed: “We are the barbarians! The real idiots, populists & demagogues are the journalists & the establishment intellectuals.”

It seems to be working as demonstrations have become more & more violent. 

florenceriot

Although Renzi made a statement that a vote for no “means nothing changes,” the reality is that if he resigns, or receives a no confidence vote, that could open the door for the Euro- skeptic bloc to take power, & that would be a big change.   

This vote has huge ramifications for the Euro & all major currencies. Italy is the third largest country in the EU, & if Italy delivers a “no” vote, & the Euro- skeptic bloc takes over power, that would be a massive blow to the Euro, a blow that we truly doubt the Euro could survive. 

Stay tuned!

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Headlines – Nov. 15/16

  • S&P, NASDAQ higher at the open. Dow lower. Read story
  • Oil rebounds from 8-week low as OPEC said to work to secure deal. Read story
  • Velocity of Trump-fueled Treasury sell-off has Wall St spooked. Read story
  • Trump’s win a game changer for mortgage strategies in Canada. Read story
  • Germany economy slows in third quarter. Read story
  • Buffet just taught the market a valuable lesson…again. Read story
  • Carney says he won’t change his mind again about BOE tenure. Read story
  • Facebook is banning fake news publishers from its ad network. Read story
  • Russian Economy Minister charged with $2 million bribe. Read story
  • Trump won’t take salary, and other news from 60 Minute interview. Read story
  • In phone call, China’s Xi tells Trump cooperation is only choice. Read story
  • China economy threatened by household debt. Read story
  • Hong Kong court disqualifies two elected pro-independence candidates. Read story
  • Why McDonald’s dream and a strong dollar don’t mix. Read story
  • Tourists struggling to find cash after India changes currency system. Read story
  • The next big hacking threat is already  happening – you just can’t see it. Read story
  • Samsung to buy car tech company Harman for $8 billion. Read story
  • On the lighter side. Check it out!
bitoin

IRS Inspector General wants IRS to tax Bitcoin

We have noted for over a year that no digital currency will escape the claws of cash hungry governments. In a report released last week, an IRS Inspector General stated “It is imperative that the IRS ensures that those who engage in activities using virtual currencies comply with all of their tax obligations.”

The US government does want to eliminate cash, not for their stated reason of tracking terrorists and criminals, but in order to be able to tax every transaction you make. So yes, the government wants us to make all of our transactions via a digital currency, but they will want it to be a government electronic currency, not an anonymous currency like Bitcoin.

Anyone using Bitcoin today needs to understand that the government does not consider Bitcoin to be money, they see it as an asset. In their eyes, Bitcoin is an asset with gains and losses on every transaction, with all of the accounting and tax implications attached.

Governments want more control over its citizen’s transactions, not less. As we have been pounding the table for over a year now, no government wants its citizens to control their own currency fate. They certainly will not tolerate having its citizens being able to move capital out of the country in the blink of an eye, without limitation.

It is why the US government has been always against gold, as it offers an alternate means to move and hide capital.  As Bitcoin gains popularity,  you can be sure that the government will move in to close off what they consider to be loopholes, and will be demanding detailed reporting on all transactions.

This is all part of the coming Sovereign Debt Crisis. Virtually every major country has accumulated much more debt than they can ever pay off. These governments are desperately hunting for every dime they can get their grubby little hands on. They have been adding gobs of new fees, and taxes, but they are now worrying that they are missing transactions via Bitcoin and other alternative currencies.

There is already a lot of movement behind the scenes to get a government controlled electronic currency up and running. Bitcoin will not be allowed to stay anonymous, as government wants to tax every transaction.

As the governments keep closing in, the masses lose confidence in them. We are approaching the bursting of the global bond market, which will shake the confidence of all. When that happens, capital will flow into equities, and gold. Keep your eyes open, and follow the global flow of capital. Those who stay ahead of the herd will make a killing; those who ride with the herd are going to be trampled.

Stay tuned!

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Headlines – Nov.8/16

  • Wall St opens slightly lower on US election day. Read story
  • OPEC boss warns of oil market instability if no deal on output. Read story
  • What happens if the electoral college is tied? Read story
  • How Trump and Clinton’s Twitter war changed the course of the election. Read story
  • Europe hates Trump. Does it matter? Read story
  • “Psychic” Scottish goat sees a Clinton win – and it was right on Brexit. Read story
  • Election drama obscures 5 bullish facts about the stock market. Read story
  • Valeant slumps as CFO warns “There could still be surprises.” Read story
  • Europe’s taxman could have Amazon in its crosshairs. Read story
  • EU agrees zero tax rate is not enough to define tax haven: Padoan. Read story
  • Samsung raided in political corruption probe. Read story
  • Here’s why Tesla just killed one of its perks. Read story
  • McDonald’s sues Florence for €18 million. Read story
  • The toxic smog’s next trick: making the Taj Mahal disappear. Read story
  • On the lighter side. Check it out!
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Headlines – Nov. 7/16

  • Wall St jumps at the open as FBI clears Clinton. Read story
  • Oil rebounds before election as earthquake shakes Cushing. Read story
  • Euro founding father Otmar Issing gives stark warning about project’s future. Read story
  • China ousts Finance Minister as Xi Jinping turns to allies in surprise reshuffle. Read story
  • EU puts UK-Nissan deal under scrutiny. Read story
  • Canada’s job growth blows past expectations, but part-time jobs and weak exports cloud outlook. Read story
  • Driver less car startup Zoox’s valuation soars to $1.55 billion. Read story
  • China’s bewildering new cybersecurity law is keeping foreign tech companies out of the country. Read story
  • UK household debt tops £1.5 trillion. Read story
  • Apple is basically the only company making money selling smartphones. Read story
  • Russia’s economy minister values Rosneft stake for sale at $11.75 billion. Read story
  • It will now cost half as much cash and stress to register a business in Nigeria. Read story
  • New Deli’s air is so toxic that the government has shut down 1,800 schools. Read story
  • UK PM May says current Indian visa system is ‘good’. Read story
  • On the lighter side. Check it out!
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Headlines – Nov 4/16

  • Strong US job growth, rising wages boost December rate hike prospects. Read story 
  • Saudis threaten to raise output again as sparring with Iran returns. Read story
  • Oil heads for biggest weekly drop since January as gains eased. Read story
  • Gold edges higher, headed for 4th weekly gain. Read story
  • 10-year Treasury yield slips as election worries override strong jobs report. Read story
  • Paulson’s hedge fund down $26 billion, headed by drug stocks. Read story
  • US trade gap shrank 9.9% on September. Read story
  • The Steve Jobs email that outlined Apple’s strategy a year prior to his death. Read story
  • Snap election in UK next year? Don’t rule it out, bookies and bankers say. Read story
  • Samsung recalls 2.8 million washing machines over injury risk. Read story
  • BMW profitability squeezed by slide in US sales. Read story
  • Yum unit Taco Bell to have 9,000 US outlets by 2022. Read story
  • Swiss officials seized 11 of the world’s most expensive cars from this African president’s son. Read story
  • Eurostar sees Christmas rush to London as Pound lures Parisians. Read story
  • On the lighter side. Check it out!