Tag Archives: Black Death

Mar 19 2020

U.S. Auto Industry Shuts Down Amid Coronavirus Struggle…


Posted originally on The Conservative Tree House on March 18, 2020 by 

This is a big sector hit to the U.S. economy.  All of the major U.S. auto manufacturers have agreed to shut down all production facilities, through March 30th, in the latest thunder-shock to the economy.

DETROIT – Ford Motor Co., General Motors and Fiat-Chrysler will close their plants due to the coronavirus (COVID-19) outbreak.

Ford said in a statement Wednesday that its U.S., Canadian and Mexican manufacturing facilities will be halted after Thursday evening’s shifts through March 30 to “thoroughly clean and sanitize the company’s plants.”

“UAW and Ford leaders will work together in the coming weeks on plant restart plans as well as exploring additional protocols and procedures for helping prevent the spread of the virus,” reads the statement from Ford.

General Motors also released a statement explaining the shutdown will be until at least March 30.

“GM and the UAW have always put the health and safety of the people entering GM plants first, and we have agreed to a systematic, orderly suspension of production to aid in fighting COVID-19/coronavirus,” said GM Chairman and CEO Mary Barra.

GM says it is working with the UAW to make sure all employees will be compensated. (read more)

Mar 19 2020

The Media Total Disconnect – White House Press Pool Focused on Political Correctness While Million of Americans Suffer Economic Impacts…


Posted originally on The Conservative tree House on March 18, 2020 by 

The entire nation is being impacted by a multitude of consequences from coronavirus; millions of Americans concerned about lost work, lost wages and possibly lost jobs; the largest economy in the world at a near standstill; trillions of wealth lost and rippling economic consequences yet to be properly quantified;…. and yet the White House press pool is worried about calling COVID-19 the “Chinese coronavirus”?

Amid all of the seemingly unending and insufferable nonsense from American journalists, this is, yet again, reaching an all time high of stupidity.  WATCH:

.

Nuts !

Mar 18 2020

The Dollar Panic Nobody Seems to Grasp


Armstrong Economics Blog/USD $

Re-Posted Mar 17, 2020 by Martin Armstrong

The moves by the Fed on the weekend were really stupid. The market plunged for 2 days since their emergency measures and this is what undermines confidence. When capital begins to witness the failed measures by central banks as we have warned, this sets the stage for the slingshot which requires the sudden shock of the incompetence of central banks to manage the economy. This is the gist of the Central Bank Crisis. Reuters reported: Markets crater as coronavirus fears overwhelm central bank emergency measures.

The demand for dollars has turned to a dollar panic taking place in the currency derivative markets which has escalated into a multi-year high. The Fed is responding trying to inject even more cash into the Repo Markets. This Liquidity Crisis our computer was projecting is becoming far worse than 2008 or 1998. The Fed’s attempt to return to its origins using the Commercial Paper Funding Facility (CPFF) in the United States should help corporations and this WILL prove to be more effective than the interest rate cuts and cash injections central banks because (1) banks will hoard the cash and not lend (2) corporations need the cash or else they will have to layoff millions of workers as the press has created the potential for a Great Depression due to their total irresponsibility.

FX implied dollar borrowing costs have been blowing out as banks held on to their dollars and refused to lend as always despite the rise in demand of corporates for shorter-dated cash and a possible spike in loan defaults. I have been recommending that the Fed return to direct measures. I have been screaming this solution in Washington was vital for handing cash to banks results only in their hoard of cash – i.e. excess funds facility.

Only the CPFF offers direct funding in the very core economic sector under tremendous stress because of the irresponsible press. The corporate sector as the real economy which stands completely disrupted and aggressive monetary policy actions alone will not help. The central banks have lost real control and it is only a question of time before more people realize that the government is incapable of saving the system.

Three-month euro/dollar three-month FX swap spreads EURCBS3M=ICAP reached their widest since the 2011 Eurozone debt crisis at 124 basis points, then narrowed to around 59 bps. The rate had been around 20 bps in early March. The wider this spread has moved indicates market participants are willing to pay a higher premium for dollars. Moreover, the pound/dollar GBPCBS3M=ICAP swap spread narrowed to 53 bps after ballooning to 90 bps earlier, which was the widest since December 2008. Turning to Japan, the dollar/yen basis swap showed investors paying premiums over interbank rates to swap yen into three-month dollars. This too tightened to 95 bps JPYCBS3M=TKFX from 140 bps earlier.

The fact that these swap spreads have widened so much illustrates what I have been warning about that we have a Central Bank Crisis for whatever efforts they may make to keep cash flowing confirms that the press has been so irresponsible that they have singlehandedly undermined the entire global economy. The world is in serious trouble and the demand for dollars is tremendous. Many were borrowing yen for leveraged trading and they have been wiped out fueling the demand for the dollar.

Despite the Fed’s 100-basis-point cut on Sunday, some of the biggest banks in the United States will now access the Fed’s discount window in desperate need of emergency liquidity. On Tuesday, the Japanese central bank also pumped $30 billion into markets with an 84-day dollar funding operation. This was the biggest injection since late 2008.

Mar 18 2020

The Coronavirus Panic & the Dollar Panic


Armstrong Economics Blog/Banking Crisis

Re-Posted Mar 17, 2020 by Martin Armstrong

 

Following Mondays near 3k point drop in the DOW, today’s attention is brought back to the Repo market and the demand for US Dollars is off the charts! In the FX market, there has been significant demand for dollars with aggressive bids seen against the Euro -9, GBP -7 and CHF -10 for T/N (Tomorrow Next). This has also been reflected in the spot market, as people’s attention turned back to a month and quarter-end.

The banning of short selling in the Euro government bond market only increases the fear of the unknown. If you can’t sell the bonds, you sell what you can and that this morning it has been the currency in Europe. Back in the late 1980’s, when the Nikkei had peaked, we saw corporate spreads actually trade through government paper. Interesting that the FED is now providing assistance in the Commercial Paper market, offering support at 3M +200bp. Good quality paper will find bids in dollars, it just takes time. However, when panic selling hits – the time is the one commodity that is never on offer!

The Fed offering at least $1.5 trillion worth of short-term loans to banks did not save the day. The market still plunged showing the Fed is now powerless as is the case with all central banks. We are facing the collapse of Keynesian Economics where manipulating interest rates no longer works to stimulate the economy.

The government’s economic stimulus is set to quickly balloon into a trillion-dollar bailout in the coming days, which will be the largest rescue in modern American history. Instead of banks, this time we are dealing with major industries as they are screaming loudly to the Trump administration and Capitol Hill for aid. Vasts portions of the economy have been undermined by this coronavirus scare which the press has turned into a financial pandemic when the number of deaths are under 8,000 compared to 1 million annually between smoking and the flu. The press has unleashed an unprecedented economic crisis and they really should be haled in to account for what they have done.

In Britain, they are asking those 70 years or older to self-quarantine for 4 months! Borris Johnson’s father was on the radio and was asked if he will comply with that and he said no way. He would still go down to the pub.

Because Europe has been in the austerity philosophy and negative interest rates since 2014, there is a panic unfolding for dollars. We see this building from clients making markets even in the Middle East. Right now, the dollar is by no means “trash” but KING! The number of institutions now clamoring for help is skyrocketing. All the Relative Value Desks and Correlation Desks have been blown out of the water in the last week.

Mar 18 2020

Millennials Collect Sneakers not Gold?


Armstrong Economics Blog/America’s Economic History

Re-Posted Mar 17, 2020 by Martin Armstrong

QUESTION: Gold & the younger generation
Regarding the article ‘Gold & the Future ‘
‘…Will they then look to gold and history? ‘
I think the following article about the younger generation putting their savings into, less durable, sneakers, is interesting:

DH

ANSWER: Yes, when I ask certain people in their 20s about investment, I find it very interesting that they never seem to mention gold. The article you highlight mentions how they are selling their sneaker collections to pay for weddings, car repairs, or bail money. Even consumer reports note the disadvantages of buying gold.

Millennials (ages 23 to 38) will become the largest generation, surpassing the Baby Boomers, in 2020. But Millennials do not have the same passion for gold. Even their fathers and mothers may not remember the gold standard and Bretton Woods. Some view that Millennials are just looking for a quick buck. They tend to be more short-term speculators is the general view. When I was making money as a trader in my teens, my father was very disappointed for he remembered an uncle who lost a lot of money in the Great Depression. Being a trader was not cool then whereas the mantra was to buy and hold bonds for the long haul.

Millennials seem to have a higher risk tolerance than the previous two generations. This means they have been less interested in owning property, fixed income, or even buying and holding stocks. They are much more concentrated in higher risks and high returns. In the last two years, only 37% of those younger than 35 invested in the stock market directly or through mutual funds, exchange-traded funds, or retirement plans such as 401(k)s at any given time, according to Gallup Polls. This has increased in 2019 to perhaps as highs as 43%. The ownership of property among Millennials is at a record low, and only about 48% even consider property as an investment. When it comes to gold, that interest drops to about 34%.

The sales pitch that had you bought Polaroid or Apple as an IPO you would be the next Warren Buffet falls on closed ears. Things do change with each generation. What was once the belief of a majority becomes the rantings of a minority. You cannot judge everyone else based upon your own beliefs. That not only applies to religion but economics as well.

 

Mar 18 2020

Coronavirus is Mutating & a Cure May be Weeks Away


Armstrong Blog/Disease

Re-Posted Mar 17, 2020 by Martin Armstrong

Israel has come out and stated that it is only weeks away from developing a vaccine against the novel coronavirus, according to its science and technology minister. Meanwhile, the coronavirus has evolved into two major lineages and it is possible to be infected with both, a new study shows.

In 1918, the world was a very different place. Doctors knew viruses existed but had never seen one. There was no testing so people really did not know if they should be quarantined. While the Spanish flu killed 50 million people, the mortality rate was 2.5%. Some say that many died from taking excessive doses of aspirin. Others say the flu actually began in China. However, that flu killed more people in their 20s to 40s. Researchers believe the 1918 flu spared older people because they had some immunity to it.

The theory as to why the elderly were spared was predicated on the idea that decades before, there had been a version of that virus that was not as lethal and spread like the ordinary flu. Therefore, older people living in 1918 may have been exposed to that less lethal version of the flu and developed antibodies. With respect to children, most viral illnesses such as measles and chickenpox are far more deadly in young adults. This may also be the reason the children were spared leaving the most vulnerable being the young adults during the 1918 epidemic.

If this version of the coronavirus subsides with the normal flu season, then a more lethal version could evolve for the 2021/2022 flu season or at least one that spreads faster more like the 1918 Spanish flu. We will not know until the next flu season.

 

Mar 18 2020

Marx v Aristotle


Armstrong Blog/Economics

Re-Posted Mar 17, 2020 by Martin Armstrong

 

QUESTION: Mr. Armstrong, you said that Marx was influenced by Aristotle. I have never heard that before. Would you care to explain?

HF

ANSWER: Aristotle recognized that the economy evolves, and to some degree, this also takes place with the generational shift in thinking. Aristotle’s writings actually influenced Karl Marx, for he was complaining about the evolution of Athens’ economy. Aristotle saw that Athens was emerging as the Financial Capital of the World. Athens was experiencing a Market Economy and this altered what I call the Villa Economy.

Traders emerged in Athens and were offering farmers to produce more crops than they needed so they could export them to other regions. This altered society by transforming it into a Market Economy compared to the self-sufficient Villa Economy. Aristotle called these people those who made money from money. Aristotle also wrote:

The life of money-making is one undertaken under compulsion, and wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.

    • Book I, 1096.a5

Marx was influenced by this observation which led to his eventual ideas of communism (Villa Economy) against capitalists (Market Economy). Marx was studying Aristotle’s works at the British Library in London.

 

Mar 18 2020

CORONAVIRUS Insanity & the Post-Coronavirus world


Armstrong Economics Blog/Disease

Re-Posted Mar 16, 2020 by Martin Armstrong

COMMENT: Marty, you are correct about this panic. Our local school said they would remain open unless there was even one case of the virus in town. We then received an email that said they were closing for 5 weeks because they were ordered by the state board of health. Nobody realizes what they are doing to people and the economy. There are over 600,000 deaths from the flu each year. This is less than 8,000. Cigarette smoking they claim is responsible for more than 480,000 deaths per year in the United States, including more than 41,000 deaths resulting from secondhand smoke exposure. This is insanity.

ZT

REPLY: I understand if nobody is social and you remain in your house without any contact with the outside world, it is true you will not get the flu or the Coronavirus. However, the people in the medical field have no idea that this recommendation is destroying the economy and disrupting everyone. This really is insane.

What is the world going to look like Post-Coronavirus? How much damage has been caused by this panic? Reduced mobility, the tourism crisis, drastic contraction of the economy, small business that cannot afford to pay salaries with everything shut down for 5 weeks. Will advertising collapse in newspapers forcing journalists to lose their jobs? Will governments seize pension funds to bailout government failures? What about the digitalization of central bank currencies? We are looking at radical reform of the international financial system and the likely bankruptcy of many businesses caused by this panic. The post-Coronavirus world is going to be very different.

Categories: Disease
Mar 18 2020

White House Trade/Manufacturing Adviser Peter Navarro Discusses COVID-19 Supply Chain Initiatives….


Posted originally on The Conservative Tree House on March 18, 2020 by 

White House trade adviser Peter Navarro outlines some of the ongoing supply chain initiatives to meet ongoing demands of the corovirus effort.  Navarro highlights the cooperation between US government and private enterprise.  WATCH:

Mar 18 2020

Thunderdome 2020 Begins – Philadelphia Police Will Not Arrest for Burglary or Theft Due to Coronavirus…


Posted originally on The Conservative Tree House on March 17, 2020 by 

As an outcome of short-sighted coronavirus issues, the Philadelphia police department has announced they will no longer be arresting suspects for retail theft, auto theft, burglary, narcotics or other “non violent” offenses.  Instead they will write tickets, release the suspects and address the criminality later on.  Now watch what happens.

CTH saw the instructions earlier today (see below) but we did not want to immediately distribute the information.  It should be remembered the current Philadelphia police commissioner, Danielle Outlaw (pictured left), is a social justice  activist from Portland, Oregon.

Unfortunately, there is a predictive element to this.  Perhaps some are familiar with the post Hurricane Andrew experience in Homestead and Miami-Dade.

The only thing standing between law-abiding citizens and those who would take their possessions is an ability to defend your own property.  This is now the Philadelphia reality.

PHILADELPHIA – In response to the COVID-19 outbreak, Philadelphia police officers have been instructed to stop making arrests for certain non-violent crimes.

The department said individuals who would normally be arrested and processed at a detective division, will be temporarily detained to confirm identification and complete necessary paperwork. The individual will then be a arrested at a later date on an arrest warrant. (read more)

Beware, the law of unintended consequences.

Here’s the leaked guidance.  You can easily predict the problem with this policy:

From the instructions above…. Non-violent offenses include: All narcotics offenses. Theft from persons. Retail theft. Theft from auto. Burglary. Vandalism. All bench warrants. Stolen auto. “Economic crimes” (ie. looting, bad checks, fraud) and finally Prostitution.

Those offenders will be immediately released after documentation.

This is the exact issue that drives the need for law-abiding citizens to the second amendment for protection when the police openly admit they will not protect people or property.

Steve Keeley

✔@KeeleyFox29

 · 

BREAKING: @phillypolice officers instructed to stop making arrests for following list of what are consider non-violent crimes. Here is the email sent to city police officers telling them to just obtain arrest warrants for now. @FOX29philly

View image on TwitterView image on Twitter

Steve Keeley

✔@KeeleyFox29

Full Philadelphia Police Commissioner’s directive here @FOX29philly

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