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Charts from the Lunatic Fringe.

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Go figure, Platinum going back to all time lows. And here I thought I got in for a breakout.
 
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On the 5-year chart, looks like we're very close to a triple bottom.
 

savvydon

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On the 5-year chart, looks like we're very close to a triple bottom.
Yes, Platinum is getting kicked in the teeth again. Bid fell below $800 and the Gold to Platinum ratio is approaching new highs again.

Meanwhile, moves by gold and silver are being muted somewhat by a dollar headwind. The dollar is trading in two year high territory this morning.
 

savvydon

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Very engineered feel today. Despite the dollar turning around a tailwind never came behind the metals. The miners clearly are not feeling it either. Even the broader stock market's losses seemed controlled. More of the same old same old - meh.
 

Zed

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Seesaw.... yo, yo! Giving back yesterdays gain so far today!
Yo, yo! Got back the losses today.



... as long as the peeps in the front carriage hold it down we might even get out of this smelling sweet!
 

Zed

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BTW, six weeks of backing and filling so far.
 

Zed

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Strawboss

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When DB starts emitting death rattles - things are going to get...very interesting...

The daisy chains from the derivatives are simply not knowable...how many are specific performance contracts? What are the sizes? Who are the counterparties? Who are the counterparties counterparties?

What size of a liquidity backdrop will be required to paper over everything?

Simple math...if DB has say 50 Trillion in derivatives exposure and 5% of them are "trouble"...thats 2.5 Trillion. But thats not the whole problem - that 2.5 Trillion will richochet throughout the global financial system and expose how much leverage was applied on top of that... 5x? 10x? 100x? And I think an estimate of only 5% of the derivatives being "trouble" is..."optimistic"...

Global financial reset coming in....3....2....1...
 

Zed

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When DB starts emitting death rattles - things are going to get...very interesting...
There has to be a plan to nationalize this puppy, the whole world knows it is coming.
 

Strawboss

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There has to be a plan to nationalize this puppy, the whole world knows it is coming.
What nation has the financial strength to take on the potential levels of liability? I cant think of one...
 

Goldhedge

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Yo, yo! Got back the losses today.



... as long as the peeps in the front carriage hold it down we might even get out of this smelling sweet!
Where is this fun ride!?

Why is DBank so important?
 

Goldhedge

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Negative Interest Rates Spread To Mortgage Bonds
BY JOHN RUBINO ◆ MAY 24, 2019 1 COMMENT

There are trillions of dollars of bonds in the world with negative yields – a fact with which future historians will find baffling.

Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds.
(Investing.com) – At the biggest mortgage bank in the world’s largest covered-bond market, a banker took a few steps away from his desk this week to make sure his eyes weren’t deceiving him.​
As mortgage-bond refinancing auctions came to a close in Denmark, it was clear that homeowners in the country were about to get negative interest rates on their loans for all maturities through to five years, representing multiple all-time lows for borrowing costs.​
“During this week’s auctions, there were three times when I had to stand back a little from the screen and raise my eyebrows somewhat,” said Jeppe Borre, who analyzes the mortgage-bond market from a unit of the Nykredit group that dominates Denmark’s $450 billion home-loan industry.​
For one-year adjustable-rate mortgage bonds, Nykredit’s refinancing auctions resulted in a negative rate of 0.23%. The three-year rate was minus 0.28%, while the five-year rate was minus 0.04%.​
The record-low mortgage rates, which don’t take into account the fees that homeowners pay their banks, are the latest reflection of the global shift in the monetary environment as central banks delay plans to remove stimulus amid concerns about economic growth.​
Denmark has had negative rates longer than any other country. The central bank in Copenhagen first pushed its main rate below zero in the middle of 2012, in an effort to defend the krone’s peg to the euro. The ultra-low rate environment has dragged down the entire Danish yield curve, with households in the country paying as little as 1% to borrow for 30 years. That’s considerably less than the U.S. government.​
The spread of negative yields to mortgage-backed bonds is both inevitable and ominous. Inevitable because the current amount of negative-yielding debt has not ignited the kind of rip-roaring boom that overindebted countries think they need, which, since interest rates are just about their only remaining stimulus tool, requires them to find other kinds of debt to push into negative territory. Ominous because, as the world discovered in the 2000s, mortgages are a cyclical instrument, doing well in good times and defaulting spectacularly in bad. Giving bonds based on this kind of paper a negative yield appears to guarantee massive losses in the next housing bust.

Meanwhile, this is year ten of an expansion — which means the next recession is coming fairly soon. During recessions, the US Fed, for instance, tends to cut short-term rates by about 5 percentage points to counter the slowdown in growth.

With Europe and much of the rest of the world already awash in negative-yielding debt



… this imminent slide in interest rates will turn the rest of the global financial system Danish, giving us bank accounts and bond funds that charge rather than pay, and very possibly mortgages that pay rather than charge.
Anyone who claims to know how this turns out is delusional.
 

Zed

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Why is DBank so important?
Derivatives, counterparty risk, contagion etc... I read somewhere that there were no more than 1 to 6 steps between DB and every financial entity on the planet. Think Lehman on steroids. So if they cannot perform bank A and B are in trouble, if bank A and B fail company C,D,E and F are technically insolvent. etc, etc, until JPM blows up over many multiple defaults.

We know this...

https://www.investopedia.com/articl...sche-bank-most-systemically-important-dbk.asp

... everyone knows this.

Ergo there is a plan to stabilize the situation, should she blow.

Maybe it becomes the crisis on which they force greater financial integration across Europe. The Euro needs a central debt market if it is to work long term, maybe this is where they will go. i.e. If we "Europe" don't get our stuff together and "save" (nationalize) DB then the global financial system is @ risk and we are doomed to a depression. How can "Europe" say no... just another step on the road to the USE vision... then they will want armed forces. What could go wrong with that?

I dunno, but they know it is coming so there must be a plan.
 

Goldhedge

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“I met with a Swiss life insurance guy and he said (with regards to zero interest rates): ‘It’s really depressing because we understand as executives of this company that our definition of success is to extend the time to bankruptcy… Bankruptcy is certain. We are trying to get there as slowly as possible.'
 
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The whole political thing is a mess. It's too easy for Trump to put blame on the people he worked with when he was a presidential candidate and so many people were caught. I know Trump didn't do anything wrong BUT he may end up as bad as Calvin Coolidge who has failed to use the country’s economic boom to help struggling farmers. Why Trump didn't admit that the actions of the things that they were doing was wrong is beyond logic. Rest assured, he will never be the worst president if someone had studied deep in American History! :)


.
 

Goldhedge

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"We look at the latest IMF Financial Stability Report. Where will the systemic risks end up?"

I get that they think the world economy is supposed to run like a well oiled machine... when have they ever been right?

How do we know they can keep the motor running when we've never not had them diddling the machine controls?
 

Goldhedge

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'credit' sounds so much better than 'debt'....


Financial Markets To Federal Reserve: Time To Start Cutting Rates
BY JOHN RUBINO ◆ MAY 27, 2019 0 COMMENTS

In late 2018 the US stock market tanked, in effect holding a gun to its own head and threatening to pull the trigger unless the Fed stopped raising interest rates. The Fed, painfully aware that an equities bull market is an existential threat in today’s hyper-leveraged world, quickly caved, promising no more rate increases if the market would just put down the gun.

This worked for a little while. Stocks jumped to new record highs and unicorn tech IPOs started pouring out of Silicon Valley. Normal, which is to say booming, markets were back.

But of course it couldn’t last. An overleveraged economy is not just addicted to new credit, but to ever-increasing levels of new credit. So stable interest rates won’t stave off withdrawal. From here on out only steadily (or steeply) falling interest rates will delay the inevitable crisis.

That’s the signal the financial markets are now sending the Fed, as stocks begin to roll back over …
 

Zed

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Credit is what the bank extends to you when you take on new debt. Expansion of the money supply with a key stroke.
Kinda... it feeds velocity, which is oddly low, which says a lot. But really it is only if you count deposits as money, which the bigger Ms do but in fact, they are just contractual obligations. The base M's are the supply, which is multiplied by the system... it's kinda like "market cap", it cannot be a real number, it is impossible to realize and only remains lofty while everyone stays in the stock. It can go pop and quickly. This whole thing is like a shark, if it slows too much it can't breathe and it drowns. It must always grow or it must die.

I dunno.

Low mood today, mebe I am just bored with it all.
 

savvydon

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Kinda... it feeds velocity, which is oddly low, which says a lot. But really it is only if you count deposits as money, which the bigger Ms do but in fact, they are just contractual obligations. The base M's are the supply, which is multiplied by the system... it's kinda like "market cap", it cannot be a real number, it is impossible to realize and only remains lofty while everyone stays in the stock. It can go pop and quickly. This whole thing is like a shark, if it slows too much it can't breathe and it drowns. It must always grow or it must die.

I dunno.

Low mood today, mebe I am just bored with it all.
It is starting to get long in the tooth, that’s for sure.
 

Zed

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Hemke asks, 'What is the bond market telling you?'
It's telling me that Bubba wants his ugly way with us. We are .................ed!
 

Zed

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Hmmmmm.... I wonder if the fuse is burning?

China's interbank funding market is starting to freeze.
In 2007 it was US commercial paper that froze indicating the coming issues.

One thing that is certain: Baoshang is just the tip of the iceberg. According to UBS analyst Jason Bedford, who in 2017 was the first to highlight Baoshang’s troubles, there are several other banks that have “identical leading risk indicators” to Baoshang. Hengfeng Bank, Jinzhou Bank Co. and Chengdu Rural Commercial Bank all failed to publish their latest financial statements, have a large portion of their balance sheets invested in “loan-like investment assets” and are subject to negative local media coverage, he said in a note to clients published Tuesday.
 

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Goldhedge

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from pdf: "One thing that is certain: Baoshang is just the tip of the iceberg."
 

Zed

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Is it me or is the smoke coming from all corners of the room?
 

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stAGgering

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"...and the thingsss they are ah changing."

Platinum and Palladium, industrial metals, showing... industry for a change. Wow.