China & Its Debt Problems


Shanghai-8-25-2016

With a total debt of almost 250% of GDP, China’s debt problems are well known. Meanwhile, the government is working on resolving the issue by following the playbook of US investment banks and creating securities structures to offload bad debt (remember CDOs?). The slowing economy has caused rising defaults. Analysts suspect the NPLs ratio to be 30% of bank loan portfolios versus the official ratio of 1.81% as of the end of June 2016.

The corporate bond market is also feeling pressure as 41 companies have defaulted on R25.4bn of bonds since the beginning of the year. In an effort to restore confidence in the banking sector, Bank of China and China Merchants Bank sold off some of its NPLs as securitized products. It seems like an asset swap to other banks with 50-60% of the book being sold to other banks. Furthermore, 95% of the riskiest tranches were sold to a state-owned asset manager. Meanwhile, in an effort to support growth, the Chinese government is promoting lending to small and micro businesses, which carries higher risk and reduces peer-to-peer lending.

Corporate debt is estimated at 145% of GDP with the non-financial state-owned enterprises representing half of the bank credit. Chinese banks have a greater concentration of individual customers with the top customer of Agriculture of China accounting for 7% of its loan book and the top 10 customers comprising 17% of its loan book.

Copper-8-25-2016

Chinese credit is currently growing at 2x GDP, meanwhile, fixed capital investment growth slowed to 3% during 2015. Watch copper that is used for loan collateral in China and has recently broken weekly technical support with a Directional Change during August and the next turning point in October. A breach of the $2.00 level will indicate further lows.
Categories: China
Tags: China

US budget deficit approaches $600bn, public debt to reach 77% of GDP


Slower revenue growth and large spending will expand the US budget deficit to $590 billion in the fiscal year ending September 30, according to the Congressional Budget Office (CBO). * Read more US…

Source: US budget deficit approaches $600bn, public debt to reach 77% of GDP

U.S. Olympians Are Taxed on the Value of Gold in Medals


Olympic Medals

Believe it or not, someone can work hard to get into the Olympics and if they win the gold or silver medals, the Internal Revenue Service (IRS) is there waiting for their cut. Yes, American Olympians must pay taxes on the value of the medal. They also need to pay taxes on their prize money. This is so outrageous that it is rising to Congress after insistence that such awards should be tax-free, especially when they represent the nation.

The taxman is without mercy. It has long been assumed that Matthew the Apostle was a tax collector. Such people have always been regarded as sub-humans who prey upon the citizens for the state. The IRS is not much different, as is the case for tax-collecting agencies around the world. Their interpretation is to always tax regardless of morality.

Government Preparing for World Wide Civil Unrest – Why?


Pentagon

ft-1998A number of emails have come in asking if we are advising government since they are now enlisting firms to research a rise in civil unrest. The answer is no! Nevertheless, everyone knows of the accuracy of our computer systems and our cycle of war models. It was the CIA that came to us demanding I create the system for them in Washington after the model predicted the fall of the Russian monetary system in 1998. I declined. I did offer to run any study for them on our systems. I was told that was not acceptable for they had to “own it.” I said no way. I believe their position was they did not want anyone else to possess the forecasts. I have also been asked am I not afraid of government? I respond, the only way they will ever get access to what our system forecasts is to leave me alone and read our services. So this is the Mexican standoff as they say. We agree to disagree.

True, the Pentagon is now funding universities to try to model the dynamics of the rise in war. Sure they are trying to copy what we have achieved. They are the government after all. They know I cannot be threatened for I would rather be dead than held as some slave. They are attempting to model large-scale civil unrest across the world no less. You can guess where they got that idea from. I have been told by programmers they contacted to try to program what we have accomplished with Socrates. Good luck. It takes more time than what even money can buy. If you do not understand HOW cycles function at the core, no programmer could ever figure this out. This is not some simplton program if this then that.

20070410 Movie Pi

I have been told that slander and imitation are the ultimate level of flattery. When the model predicted the peak in the Real Estate Bubble to the day in February 2007, they were calling it Armstrong’s Revenge. They thought locking me up would somehow stop the model from working so they kept me in contempt of court using a statute 28 USC §1826 which says the maximum time anyone can be held in civil contempt was 18 months. They kept rolling it every 18 months to pretend they were obeying the law. I was finally released only after 7 years merely because I got into the Supreme Court and they had no choice but to release me or suffer an international disgrace.

ECM-Wave-2002-2011 - RJust after the model forecast the peak in 2007 to the day once again, I was hauled into court and Judge Keenan then tried to discredit our model claiming I stole the idea of Pi from a movie by that name. This transcript above shows how they deliberately lie to try to cover-up anything. Accusing me of taking the idea from a Movie named Pi which did not come out until 1998, just illustrates how fundamentally dishonest these people really are. They think they can just say anything and the world will believe them no matter what they say. They are incapable of ever telling the truth and that doesn’t bother them in the slightest. Think of the worse kid in high school who enjoyed beating up people or stealing what they had. Look them up. More likely than not, they ended up in law enforcement. This transcript is the example of absolute corruption beyond belief. They could care less that you can simply Google the time when such a movie came out. That doesn’t matter. They declare something and to them that makes it true. This was all about trying to discredit a model that forecast the crash from 2007 into 2009 rather than helping society, they seek only to destroy it.

That turning point 2007.1589 picked the very day of the high in the Shiller Real Estate Index and it was published in 1979, 20 years before the movie. However, it also marked the very day Goldman Sachs sold its infamous ABACUS 2007-AC1 $2 billion Synthetic CDO. They timed that perfectly to the very day of our model.

The court tried to discredit the model. That illustrated they were worried its forecast was coming true. You can bet they analyze every word. These people have no morals and think they can just force society to be economic slaves forever. Nobody has ever beating this game even once in history. Time is on my side, not theirs.

KOMMONSENTSJANE – UPDATE ON OPERATION CHOKEPOINT


The rules for 401ks change next April and we will see them take them over within a few years. After the next market correction they will off er convert them to US Bonds and pay you a premium over the market price. The government get ownership of corporations and you get worthless paper just like SS.

kommonsentsjane's avatarkommonsentsjane

The following is information provided by Money Metals Exchange:

Question: I haven’t heard much about Operation Chokepoint lately. Is that initiative ongoing and are you seeing any impact?

jam48

Answer: Yes, Operation Chokepoint continues, and we think it is very likely impacting our industry.

We’ll elaborate first by explaining Operation Chokepoint. The U.S. Justice department announced the program in 2013. The Obama DOJ’s stated intent is to dissuade fraud and money laundering by ratcheting up scrutiny on banks and financial services providers who have clients in certain “high risk” businesses.

Targeted industries include precious metals and guns and ammunition, but there are many others. Unelected bureaucrats developed a list of businesses they deem suspicious. But since investigating and prosecuting actual fraud or money laundering is difficult, their approach is an end run around due process by cutting off access to banking.

Operation Chokepoint is designed to “choke” businesses by pressuring banks…

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KOMMONSENTSJANE – THE BREXIT QUESTION THAT NOBODY ASKED


Respected economists (real economists) give the EU at most 2 or 3 years before it goes under. Smart money is coming to the US as the only save haven let in the world.

kommonsentsjane's avatarkommonsentsjane

Aug 21, 2016

By
Clive Crook

BRITIS

Mervyn King, former governor of the Bank of England, has written the best article I’ve read on Britain’s exit from the European Union. In an essay for the New York Review of Books he makes many excellent points, but one is of surpassing importance. It’s an obvious point, or ought to be, that nonetheless has been almost entirely ignored by other respectable commentators: Whether Britain should stay in the EU depends on where the EU is heading.

The EU is plainly in deep trouble with or without the U.K., and its condition as a political project is anything but stable. Judging whether Britain is better off as a member therefore requires a judgment not only about what Britain has gained or lost from membership up to now but also an assessment of the future character of the whole EU enterprise. Britain’s Remain campaign, expressing…

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Central Bank Intervention Against the Dollar


PlazaAccord-1businessman_juggle_dollar_symbols_150_clr_18746In the first six months of the year, the raw data has shown that several central banks have been selling US government bonds in an attempt to support their currencies against the dollar. This has come in part at the request of the United States, exactly as took place back in 1985 at the Plaza Accord. The United States has a strikingly different view as to currency value. You even hear Trump calling China a currency manipulator because they have seen a declining currency. He does not view that this has been a global trend. Nonetheless, European central banks see a weak current as a weakness politically and thus want a high valued currency.

Therefore, our capital flow analysis has clearly shown that the central banks have been selling US Treasuries in an attempt to support their currencies. Nonetheless, this is has not reversed the trend.

Knee Jerk v Spike v Temp v Reaction Events


CRUDE-D 8-17-2016

QUESTION: All energy says spike low on monthly global market watch. Now we had a correction from 52 to $39 so that qualifies but we also had a rally from 39 to 47 so does it still qualify? If Socrates uses the last data point 47 it would not be a spike low  but if it accesses the low for the month its correct. So which One?

Analysis-2ANSWER: The Global Market Watch is purely a pattern recognition model. It is by no means perfect because the computer is still learning for we have introduced ETFs and global stocks. Therefore, it is still registering new patterns as it collects pattern development around the world. There are wilder patterns for example in agriculture compared to bonds or stocks with respect to the percentage movement. Nonetheless, keep in mind it is looking at this extremely dynamically with respect to the last entry weekly to yearly. That means it looks at the ENTIRE range and assumes at that close what would the pattern be if that had completed that unit of time. So a weekly will assume the week if complete each day as the week moves forward. The same is true with monthly to yearly. However, it is the full range and not just the last closing price that determines the pattern. Also, introducing global stocks has implicitly introduced within any price currency. A market will typically rise to offset the decline of a currency so that real value tends to remain unless it is perceived to be a political risk to the entire country, then sell everything.

This model does not use the last data point alone. It uses the FULL range of the current session. So it knows it made a low but a “spike low” is short lived and tends to be a trust type move. A “spike low” is different from a “temp low” or “reaction low” inasmuch as the latter two are part of a trend.

In the case of Crude Oil, it made a high in June so a “knee jerk” is just one unit of time and “spike” is short and quick but more than just one time unit.” Both types of moves are trust types meaning sharp and swift. These are no normal action of like a bear market finally making its low. Both the “knee jerk” and the “spike low” can be followed by a resumption of the trend in motion or a retest of the previous high or low. That retest would be the reaction. Often the “knee jerk” and “spike” events may also involve the slingshot type of movement.

Why Corporate America Can’t Prop Up Stocks Much Longer


More good news from the private sector — well almost private as the Fed’s are into everything now!

The New Highs in US Share Market Are they the Prelude to a Crash?


trifecta

1998 SP500 July 20Finally, the Dow made new highs in the face of constant calls for a crash. This past week, in a horse race we would call it a trifecta where the Dow Jones Industrials,  S&P 500,and  the NASDAQ all made new record highs.  This sent a bunch of analysts to look again and began to proclaim that this was the first time that all three major indices have reached new highs on the same day since 1999. They then look at the charts and pronounce that the 1999 rally lasted only until 2000 and then crashed. Of course that was the DOT.COM Bubble and there was a massive wave of retail investor in the market back then compared to today.
There really is nothing similar whatsoever to this latest pronouncement. As always, people will try to reduce everything to turn upon a single reason. Here is a chart of the S&P500 and the crash of 1998, which was the Long-Term Capital Management debacle and the fall of Russian debt.

The market again peaked exactly to the day of the ECM back then. However, the crash was 58 days and then in 32 days the market rebound to the former high. Note that the there were three lows with the last and final low creating a Slingshot move, As I have warned, these type of moves are the most powerful and very necessary to propel any market to new record highs. You simply must trap the majority on the wrong side of the trend,

 

NASDAQ-EURO-1998-2012-WNASDAQ-1998-2012-W

The DOT.COM Bubble was the last great capital inflow from around the world. Both Europeans and Asians were pouring money into the DOT.COM Bubble – it was by no means a local event. This move was the classic Phase Transition. However, when we look at that in terms of the Euro (which we recreated using the same formula extending back in time), we get the same Phase Transition rally

We do not see a stark difference between the patterns in dollars as we see in euros. Hence, this attracted foreign capital creating an explosive rally which we call the Phase Transition.


NASDAC-W Euro 8-13-2016NASDAQ-W 8-13-2016

Now, when we look at the current position of the NASDAQ both in dollars and euros, we see something different. In dollars we made the new highs. However, when looking at this is euros, we do not yet see new highs being made. As always, things are not always as they seem to the local observer.

So the last magic formula going around was the 9 day consecutive decline which was supposed to lead to a crash. OOPS. Here might be another brilliant observation.