Euro
*EURO FALLS BELOW $1.1000 FOR THE FIRST TIME SINCE MAY 2017
The market pricing of a ECB deposit rate cut on September 12 (next meeting) from -0.40% to -0.50% at 100%. (orange line)
The probability of a “second” cut on September 12 to -0.60% is 23% (blue line) pic.twitter.com/eMtnqnru6w
— Jim Bianco (@biancoresearch) August 30, 2019
No-Yield Gold
For 5,000 yrs gold’s problem was it had no yield.
Welcome to “the upside down” of negative rates. Now gold is the high yield alternative at 0%.
I expect more negative debt ahead and this relationship to hold. Hence, high gold prices.
So reach for yield. Reach for gold at 0%! https://t.co/oDMucULzcz pic.twitter.com/nbMgDOy9Wd
— Jim Bianco (@biancoresearch) August 29, 2019
Historic Asset Boom
Historic Asset Boom Passes by Half of American Families: https://t.co/TkwXNkb9Gt by @d_harrison pic.twitter.com/7rjtDAUQ2V
— Jesse Colombo (@TheBubbleBubble) August 30, 2019
Stockman on Trade
Hey, Donald, You Break It (The China Trade), You Own It (Global Recession) https://t.co/6wwPfQ8Dkw
— David Stockman (@DA_Stockman) August 30, 2019
No Escape From Argentina Bond Massacre
Argentine mutual funds are freezing redemptions in the face of an attempted mass exodus. https://t.co/sURE6cHW5j
— Lisa Abramowicz (@lisaabramowicz1) August 30, 2019
Change in Payrolls by State
Change in payrolls since March, by state@TheEconomist @SoberLook pic.twitter.com/Rs7H8p57bN
— Liz Ann Sonders (@LizAnnSonders) August 30, 2019
Krugman on Farmers
Farmers thought Trump was their kind of guy, but he has predictably done them vast harm — and not so secretly holds them in contempt https://t.co/k5fSdC17d8
— Paul Krugman (@paulkrugman) August 30, 2019
Euro in Freefall
Euro in free fall. Plunges below $1.10, lowest since May 2017 w/ Trump pouring oil on the fire. pic.twitter.com/NgdtBewKsN
— Holger Zschaepitz (@Schuldensuehner) August 30, 2019
Canada GDP
Canadian GDP number masked a renewed contraction in real final domestic demand — slipping in 3 of the past 4 quarters. BoC won’t be on the sidelines for much longer. Sell the loonie!
— David Rosenberg (@EconguyRosie) August 30, 2019
Negative-Yielding Bonds
Why would anyone in their right mind buy a neg yld 50yr bond?
Because its price (orange) is up 36% YTD!
July 24 is the day its yld went neg, a month ago. Why own it then? Because it’s up 18% in a month!!
This is what happens with neg ylds, booming prices.@RMKOutFront https://t.co/f8yCwdFGuh pic.twitter.com/pLUSBFbfk0
— Jim Bianco (@biancoresearch) August 30, 2019
Sheep Standing on Nickels – Hussman
“Visualize an efficient market as a sheep standing on a nickel. If there are enough sheepdogs around, constantly ensuring the sheep doesn’t stray, the sheep will keep standing on the nickel. But if sheepdogs simply assume sheep always stand on nickels…”https://t.co/lkUSzH3Noa
— John P. Hussman, Ph.D. (@hussmanjp) August 30, 2019
Bond Manager Point
This is critical to understand about negative rates, European bond managers are making tons of money and having a career defining year.
Sure it may end in tears, but that might be a few years away, or next month.
Managers are paid to dance, not complain about the music. https://t.co/qAjxph2oVp
— Jim Bianco (@biancoresearch) August 30, 2019
Counterpoint
Agree 100% Jim
But’s its also important to understand the EU is destroying European banks!https://t.co/qzep5nwN34
— Mike “Mish” Shedlock (@MishGEA) August 30, 2019
Mike “Mish” Shedlock
“Farmers thought Trump was their kind of guy, but he has predictably done them vast harm — and not so secretly holds them in contempt”
I can only imagine what contempt Krugman holds for farmers, considering they voted for Trump.
Mish,
Several years ago you listed some gold/silver stocks that were very beaten down and out of favor that you liked in an article here on this blog.
They went a little lower too. You took mucho flak.
About now I expect you are very well up. Any updates?
FYI – I did buy a few of the very same stocks about the same time period. Up very nicely and some buyouts/mergers.
Gold and the miners got monkey hammered on Friday after the USD spiked to a two year high. More pain to come! The USD is like Godzilla destroying everything in its path.
This was really helpfull, great work
https://cloudtunez.com/sitemap_index.xml
I guess Im learning this as I go along … so the negative rates are the result of hyper-buying and swapping between investment houses of all these bonds … for things to come crashing down in markets like in 2008 you need a “Lehman” trigger … now what could that be ….?
Everything is a bad investment when you buy on top.
Yeah, it was 800 an ounce for how long? Long enough to cash out. It was 288/ounce in 1998 then regulations allowed banks to “play” the commodities market, then round 2 started.
$800 an ounce for all of TWO days in January 1980. Avg price for the month was in the $600’s.
“Blue Chip” and dividend aristocrat GE was an even a worse investment.
Fun to cherry pick!
Now let’s talk about AOL and myspace…
Good tool to compare gold vs S&P vs Dow. I still think gold is worst in mot instances…
” I still think gold is worst in mot instances…”
I would agree with that statement.
But we have NEVER been here before. A world drowning in debt (global debt now surpassing global GDP) . Most sovereign debt with negative interest rates. Central banker believing it is their god given right to upset the natural business cycle and to avoid a recession at all costs. The FED being outed as a partisan hack organization. Bubbles in nearly everything – especially assets.
I can’t think of another time in recent history (200+ years) of this happening. Maybe the French 1795 experiment with fiat “assignats” (which led to Napoleon).
As Mish is fond of saying “Gold does well when confidence in central banks fails…”
I think we are there.