rigorousintuition.ca

identity » Wed Mar 18, 2020 9:28 pm wrote:Another Kitco News interview, this one with Jim Rickards, author of The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis; Currency Wars: The Making of the Next Global Crisis;and The Death of Money: The Coming Collapse of the International Monetary System.
(Be aware that Kitco is a bullion dealer.)


https://www.youtube.com/watch?v=zj3ttaiSgvs

Elvis » Wed Mar 18, 2020 8:54 pm wrote:Kitco does have interesting interviews. Yeah they're gold-centric but I don't care. I have a huge crush on Daniela Cambone.

Bill Gates leaves Microsoft’s board

Devin Coldewey • March 13, 2020

Bill Gates has stepped down from the board of Microsoft to spend more time on his philanthropic endeavors, the company announced Friday afternoon. Though he will remain technology advisor to CEO Satya Nadella, this move reduces his involvement with the company to the lowest level it has ever been.

Gates led Microsoft from the ’80s all the way through 2008, when he left to dedicate himself more fully to the Bill & Melinda Gates Foundation, through which he has channeled a great deal of his immense wealth toward global health concerns.

He remained on the board, however, and in fact chaired it until 2014. But starting today he will only be there as, presumably, something like a lucky charm and occasional auxiliary brain to Nadella and his crew.

https://techcrunch.com/2020/03/13/bill- ... fts-board/

The Gates Foundation has been extremely influential as well, though in a quieter and more humane fashion. It may be that Gates’s second legacy will ultimately outshine his first.

Sign of the Times- Tankus's Crises Substack

What the main economic problem is and how to think about responding to it.

Nathan Tankus
4 hr


I wasn't paying enough attention to coronavirus and didn't fully realize the implications of what was happening until treasury interest rates collapsed the night of March 8th 11 days ago. The 30 year going below 1 percent was a huge deal. In general interest rates on government securities carry far more info for the laymen than the stock market. If they're rising, that means they expect us to be out of a recession and thus the Federal Reserve will increase interest rates. If they're falling, that means they expect the Fed to cut interest rates and that we're having a recession. This is the big one and I think everyone now realizes that.

A) size of the response we need. My rough guesstimation is initial packages for the next few months are going to need to be about 3.5 Trillion based on what total labor compensation was last year and how dramatically employment is collapsing. It really can't be underestimated how gigantic this is.

B) It's hilarious how the "how are you going to pay for it???" conversation has completely collapsed and we're now going to get multi-trillion dollar spending bills without a hint of a payfor. but that's a good thing ultimately.

C) The financial system is seizing up because that's what it would do in this circumstance. Going to probably need payment guarantees on private debts for creditors.

D) We need the Federal Government to take responsibility for state and local government budgets. Worst comes to worst, that will come from the Federal Reserve either through the small existing authority they have or expanded emergency authority like in Maxine Water's bill today.

E) The key thing to understand is this has nothing to do with stimulating consumption. There are basically two components to household spending. There is what everyone talks about- household's propensity to consume. People love ranking policies by how much they goose propensity to consume. That's irrelevant right now. We're not trying to shift consumption. Hard to spend when you can't leave your house anyway.

What this is about is covering the overhead costs of households. Rent, mortgages, utilities, credit cards, student debt payments etc. The less we reduce these overhead costs by declaring a holiday for them, the more money has to go out the door. you either reduce the cash outflows or increase the inflows. This is not about consumption. The main economic problem is a financial one of balance sheets. We need to fill that gaping hole. What Waters put out today was pretty good, but wait for new proposals coming soon

That's it for now! Happy to field questions people have. I'm starting a substack to contain these kinds of posts for now.

Keep safe!- Nathan.

The Plan

The Plan is not a New World Order, it is not to round everybody up into FEMA camps, it was not orchestrated by the Jews or the Brotherhood of Saturn (the new way of saying ‘the Jews’), it is not to slowly depopulate the planet by giving poor, white Americans diabetes, it is not to implement a worldwide Thelemic Caliphate, it is not to pave the way for an alien invasion and it is not the creation of a one-world government. Why would anyone need a one-world government? A military empire atop a global reserve currency underpinning a centrally controlled world economy is functionally equivalent, without going to the bother of having elections or paying for more bureaucrats.

‘The Plan’ is:
1. To permanently suppress any challenges to American hegemony. Hence NATO -legally without a purpose since the fall of the Soviet Union- now counts Australia (in the South Pacific rather than North Atlantic) and others among its partners, making it the very definition of a world army.
2. Use this hegemony to build out a worldwide legal infrastructure that enables western corporations to stalk the earth unhindered. Examples of these would be the secret TPP and its Atlantic equivalent, the TTIP, but they also include forcing non-American territories into FDA compliance so that Monsanto and Big Pharma get the same free, untrammelled ride they get in the US elsewhere on earth. Essentially they are America-ing the planet from a legal perspective.
3. Use this hegemony to tip the entire planet and its resources into the existing AngloAmerican bank-dominated global financial system, comprised of the IMF, the BIS, the World Bank, etc…. once this is complete, pivot from the dollar as global reserve currency to the creation of a global digital currency backed by SDRs -the value of which is set by the IMF based on a basket of member currencies, weighted towards the dollar, GBP and Euro, as well as a basket of commodities, weighted toward those commodities controlled by the AngloAmerican banks. This means that as emerging markets grow into developed economies, they do so in a system that not only favours AngloAmerican companies, but has the actual value of entire goods and currencies dictated by a central authority.
4. The violent, confusing premise of scientific materialism is promoted as actual reality because -despite its woeful ontological shortcomings- it is the model of reality best suited to selling us Pharma products, GMO foods, material status anxiety, Apple Watches and the Kardashians.
A space-faring, scientistic, militarised civilisation, that doesn’t use money, run by a central cadre of smug assholes. Where have I heard that before? Oh yeah. Dr Knowles to the bridge.

When/if we think about Star Trek, we like to imagine ourselves as Starfleet members. But we aren’t the ones on the spaceship. We are the planets they beam down to in order to have sex with the locals and occasionally cause societal collapse. Ukraine is a planet. Baltimore is a planet. We may rarely kill an unnamed ensign or two, but ‘The Plan’ gets its way or it bombs the planet from orbit. ‘The Plan’ endures.
And that’s why this post is titled Force Majeure, because ‘The Plan’ is not getting its way. Some people have started saying no or, rather, nyet.

[...]

The money

When this series started, it was the spook tech that idiots initially disbelieved on Facebook. (Pause to enjoy the irony there, given that it’s home to worldwide DARPA-funded psychological experiments.) Then we had the subsequent few years bear it out.
This time it will be the money bit which will be largely understood, and we will have that borne out between now and the breakout of proper war toward the end of next year or the beginning of 2017.

Basically, the intention is to ban cash. Already there are capital controls in Greece, proxy capital controls in the US and negative real interest rates in half the planet’s bond markets -that means you pay to lend money to governments. In France, any transactions above €10,000 cash are illegal… to the point that the French police can confiscate your cash even if you are just transiting through the country on a train. A bunch of US states require reporting of cash transactions above $1,000. Talking heads on business programmes are floating the idea of ‘how bad cash is’. Yesterday it was bankster-stooge and former prime minister Gordon Brown. Read this:

A proposed new law in Denmark could be the first step towards an economic revolution that sees physical currencies and normal bank accounts abolished and gives governments futuristic new tools to fight the cycle of “boom and bust”.
The Danish proposal sounds innocuous enough on the surface – it would simply allow shops to refuse payments in cash and insist that customers use contactless debit cards or some other means of electronic payment.[..]
But the move could be a key moment in the advent of “cashless societies”. And once all money exists only in bank accounts – monitored, or even directly controlled by the government – the authorities will be able to encourage us to spend more when the economy slows, or spend less when it is overheating.

In this futuristic world, all payments are made by contactless card, mobile phone apps or other electronic means, while notes and coins are abolished. Your current account will no longer be held with a bank, but with the government or the central bank. Banks still exist, and still lend money, but they get their funds from the central bank, not from depositors.

Having everyone’s account at a single, central institution allows the authorities to either encourage or discourage people to spend. To boost spending, the bank imposes a negative interest rate on the money in everyone’s account – in effect, a tax on saving.
Faced with seeing their money slowly confiscated, people are more likely to spend it on goods and services. When this change in behaviour takes place across the country, the economy gets a significant fillip.

This is the part many of you won’t believe -even though the vast majority of your transactions are already electronic. Your weekend homework is to research what SDRs happen to be and how they tie to central banks that will theoretically be able to start taxing your savings. (But presumably you’ll get a little alert on your app?)
Here’s a thought experiment: how successful do you think you will be in attempting to purchase food for your child when an energy bill or your rent is due?

Let me be clear, this is The Plan. It doubly serves the AngloAmerican system in that it prevents bank runs when their ridiculous casino collapses. There can be no bank runs when there is nothing in the bank. And if it’s what Wall Street wants then that’s why you should be ready for Hillary.

Now imagine you are Russia. Or China. Or Brazil. Or India. How comfortable are you with the IMF having this kind of power? Is that why the smart money says odds on for a world war in the next two years? Does the true context of the TPP and the TTIP become a bit clearer now? The TTIP that our newly landslid-re-elected prime minister is a super fan of:

David Cameron said that US and EU partners had met and were ready to put ‘rocket boosters’ behind the Transatlantic Trade and Investment Partnership. TTIP would allow for a reduction of regulatory barriers for big businesses, and has been widely criticised as undemocratic. Cameron denied that the deal was risky, saying it would create jobs and boost growth.

A particular concern of opponents is the future of the NHS under the deal; the worry is that opening Europe’s public health service to American companies could lead to privatisation. Union leader Len McCluskey has demanded that the NHS be exempt from the deal and accused Cameron of ‘riding roughshod’ over opposition and ‘trying to brush the threat of TTIP under the carpet’.

That would be the NHS that is receiving admin technology bids from US military contractors such as Lockheed Martin. (Two defence contractors already supply most of the federal admin services in the US. You think they ever take a peek at the data?)

How the end game plays out

We are close enough now to potentially spy or at least speculate with some confidence toward the sequence of events that brings this archonic regime to its close. For much of this I am reliant on Martin Armstrong’s Economic Confidence Model. (No one has emailed me about The Forecaster yet. It’s getting standing ovations in Germany and I know I have German readers. What gives?) Why wizards should be particularly interested in the ECM is that it is not a market-predicting model per se, it is a model of reality. The markets are merely the harp that the winds of the universe blow through, the ECM is a model of the winds. And it appears to run on pi and the Golden Ratio… both of which powered much of Egyptian ritual architecture. So Armstrong may have actually done something new and decidedly wizardly. It appeals to me because it is bold enough to give exact numbers to what is otherwise ‘simply’ a growing consensus.

Before you get to my proposed play out, you need to understand what happens when global bond markets collapse. This interview gives a seriously good description of how that all works (although he’s wrong about the dollar. It’s heading to the moon in the short term.):

So then, here is my sequential guess:
• Somewhere between now and mid-July, we will have a stock market correction of up to 20%. This may be triggered by a flash foreign conflict, it may be triggered by the summer of unrest that looms in the US or it may simply be triggered by the realisation that things are bullshit. Typically it is the threat of war that sends money from equities into bonds, though.
• The final inflow into bonds is the last little drop that creates a bubble top. The markets will look around and finally realise this $70 trillion in government debt will never be paid off. It may be a Greek default that wakes them up to this obvious fact. With so little liquidity, the bond market goes into dramatic decline from October 1.
• The money fleeing the bond market causes a crash up in most US equities, some German and UK equities and is a bloodbath for everyone else. Money also flees into other real assets, particularly real estate; causing a crash up/down… up in safe haven markets such as London and New York… down in marginal markets as the rising interest rates that accompany a bond market collapse leads to thousands of defaulted mortgages and the evaporation of mortgage demand (or whatever is left of it). Countries with debt denominated in US dollars default as they can no longer service climbing interest rates or the sky high dollar. That’s basically the story of 2015.

(Interestingly for someone in my line of work -global audience/demographics- that decline reflects the fact that boomers have gone from being all buy-side; inflating property prices; to all sell-side; as they retire and die. However that means there will be a long term trend of more sellers and less buyers for the first time in decades.)
• Bonds are the principal assets that banks hold. Once they are worthless, the banks are bankrupt (where do you think the word comes from? Broken Venetian tables where loans were offered) and they will start calling in loans to other banks, auto loans and mortgages. Bank runs, capital controls and calls for the banning of cash or the tax on savings ‘to prevent further boom and busts’ get louder. Greece probably leaves the euro in late Summer or early Autumn.
• 2016 opens with a sky high stock market that, perceiving a top begins to rotate out into commodity assets, triggering significant inflation. Real assets such as gold, farmland start turning up toward the end of the year. Bond yields are still very high, despite continuous money printing. In the real world, things are awful.
• Things bewilderingly improve economically -at least we are told they are improving- after the election until a full blown war in Eurasia toward the end of 2017, which deflates the stock market (that old trick) and dumps money back into bonds to pay for whatever jibber jabber Hillary has promised ‘real Americans’ in her ‘election’ campaign.

But really, that’s the end of it, sometime in 2017. Either the whole world will realise the system has been a failure or the archon’s enemies will have been defeated and we will be ‘Something Must Be Done’d’ into a digital SDR currency. Widespread civil unrest will occur if/when they try to use our money to recapitalise or bail in the banks again, which you know they will.

It’s important to realise this isn’t ‘engineered’ so much as it is a ‘heads they win, tails you lose’ situation. No collapse: negative interest rates evolve into taxable savings in a digital currency. Collapse: A digital currency emerges because Something Must Be Done. If you are the deranged, Keynesian archon at the centre of all this mess, the idea of inventing a whole new currency that you control entirely and then totally control whatever everyone does with it just… makes sense. Because they are ‘smarter’ than us, you see. Gordon Brown and the Brussels technocrats are smarter than us and if only we would just behave like we are supposed to and take on more debt then their Economics PhDs and tax-free salaries are all worthwhile. But it’s treehouse economics: they are just inventing crap out of thin air and when it doesn’t work, inventing more crap to cover up the damage caused by the last crap.

(WASHINGTON) — Senate Intelligence Committee Chairman Richard Burr, R-N.C., sold as much as $1.7 million in stocks just before the market dropped in February amid fears about the coronavirus epidemic.

Senate records show that Burr and his wife sold between roughly $600,000 and $1.7 million in more than 30 separate transactions in late January and mid-February, just before the market began to fall and as government health officials began to issue stark warnings about the effects of the virus. Several of the stocks were in companies that own hotels.

The North Carolina senator was not the only lawmaker to sell off stocks just before the steep decline due to the global pandemic. Georgia Sen. Kelly Loeffler, a new senator who is up for re-election this year, sold off hundreds of thousands of dollars worth of stock in late January, as senators began to get briefings on the virus, also according to Senate records.

In the weeks that followed, Loeffler urged her constituents to have faith in the Trump administration’s efforts to prepare the nation.

“@realDonaldTrump & his administration are doing a great job working to keep Americans healthy & safe,” Loeffler tweeted Feb. 27.

The Daily Beast first reported that Loeffler dropped the stock in late January. The senator is married to Jeffrey Sprecher, the chairman and CEO of Intercontinental Exchange, which owns the New York Stock Exchange.

In a tweet early Friday morning, Loeffler said the report was a “ridiculous & baseless attack” and that she doesn’t make investment decisions for her portfolio.

Elvis » Fri Mar 20, 2020 7:32 am wrote:identity, no offense of course, but I'm confident in saying that Peter Schiff is bad news. Predicting the 2008 crisis didn't take a genius. Let's just say that Schiff is an exponent of the neoliberal, pro-business balanced-budget lie that has the side effect of killing people. He's a salesman selling himself. Just to point that out; Schiff is not banned here or anything (oughta be grumble grumble).

Listen to Nathan Tankus. (See Jack's post above.)
I've read a lot of Tankus' takes on events & explainer pieces, he's at the leading edge. I follow Tankus on Twitter among other places, good for a clear reading on big economic events.

identity » Fri Mar 20, 2020 2:34 pm wrote:

Elvis » Fri Mar 20, 2020 7:32 am wrote:identity, no offense of course, but I'm confident in saying that Peter Schiff is bad news. Predicting the 2008 crisis didn't take a genius. Let's just say that Schiff is an exponent of the neoliberal, pro-business balanced-budget lie that has the side effect of killing people. He's a salesman selling himself. Just to point that out; Schiff is not banned here or anything (oughta be grumble grumble).

Listen to Nathan Tankus. (See Jack's post above.)
I've read a lot of Tankus' takes on events & explainer pieces, he's at the leading edge. I follow Tankus on Twitter among other places, good for a clear reading on big economic events.

No offense taken, Elvis. As I've indicated before, just because I paste or link to something does not mean that I believe, agree, or am in alignment with it. I've linked to a number of people here with somewhat differing views, though all have been saying for some time that we are headed towards a collapse that will dwarf any previous one. Money -- its accumulation and maximization -- has pretty much always been at the bottom of the list of things that motivate me, but now I find myself in a situation where its mere preservation has become of some concern. I instinctively recoil from these trader types! But now I need to better inform myself re: the "how and when to act" wrt to the money I have. I assume that I'm not completely alone in this here, and that others might also wish to listen to a variety of views (however odious or self-promoting their promulgators). It's also instructive to listen to what they're not saying. Schiff, for example, nowhere mentions (in the parts I heard) the elimination of cash and the move to a digital currency. In any case, I am certainly aware of his libertarian/neoliberal POV, am not in agreement with it, and would not even have a problem with him being banned here. At any other time, I myself would probably take issue with Schiff and maybe even the others being linked to here. But right now I (and maybe some others here?) have practical concerns which I've had never had to deal with before, and I think it might be useful to listen to voices all across the spectrum, even those I've always run in the opposite direction from (again, not necessarily because of what they're actually saying, but also because of what they're avoiding, ignoring, not saying).

Will Tankus serve as any kind of reliable and timely guide to making decisions re: keeping the $$ I have in the bank/cash, in gold/silver, in one of the coins, or anything else?

Elvis » Fri Mar 20, 2020 2:08 pm wrote:Points taken, Identity! And sorry if I came off imperious or condescending

and I do credit you for being hip to Schiff. But Schiff always makes me go "omg lmao!" Also, I admit I did not watch the video.

Via: FT

“I’m not happy about the people that are sick,” said a Wall Street executive, speaking from the secluded neighbourhood where he and others are hoping to ride out the coronavirus outbreak. 

But he is also not sorry to see the back of a long boom in financial markets, when investors complained that so much money was chasing too few deals and attractively priced assets were hard to find. “The world appropriately compensating people for risk — yes, I am happy about that,” added the executive.

This month’s financial turmoil should have been a moment for private equity firms to savour. Over the past decade they have persuaded public pension systems, sovereign wealth funds and other investors to commit record amounts of cash to the sector. The result is a $2.5tn war chest for investment strategies that range from building real estate and infrastructure to funding loans for midsize businesses and taking over enormous corporations. Putting all that money to work has been difficult. Now, with plenty of cash on hand and markets in free fall, many rainmakers believe they are finally set to strike the deals of a lifetime.

Yet for others, the sense of opportunity is tempered by a dilemma. Yes, assets are cheaper, but some private-equity owned companies are facing ruin. Meanwhile, the industry’s $2.5tn of committed capital has to be called up from potentially skittish outside investors and primed with trillions of dollars of now-scarce acquisition financing. All of this means that — at the crucial moment — the powder may turn out not to be so dry after all.

...

“We’re investing in [companies] that might have liquidity problems,” in sectors such as travel, restaurants and cinemas, said one credit-focused executive. “We don't think the business models are going to evaporate.”

...

Similarly, Swiss private equity firm Partners Group will look to buy public companies that were “prohibitively expensive” before the financial tumult of the past few weeks but which “may look more attractive today if valuations remain at these levels”, said David Layton, co-chief executive officer and head of private equity, on an earnings call on Tuesday. 

He said Partners Group was also planning to approach owners of “solid assets” with “proposals for capital if they need it”. The firm was targeting high-quality companies that could benefit from long-term trends, rather than “distressed or troubled investments,” he said.

Other groups are also being opportunistic. Phones have been ringing “off the hook” with private equity dealmakers wanting to snap up public companies, said one senior investment banker, “because everything is cheap”. Some buyout firms are being egged on by activist investors, who are eager to force sales amid the chaos.

Via: Prospect

This is an unmitigated disaster for everyone and we have no idea what the economy will look like once this all gets under control. But one force in the economy has the time to wait patiently and the scruples to take advantage of this severe pain. That would be the private equity industry.

For years, private equity firms have been collecting and sitting on investor cash—“dry powder,” as it’s known in the industry. By last summer, the industry had $2.5 trillion in dry powder waiting to be deployed, a record level. PE firms buy distressed companies, mostly with debt (although they have enough equity to goose deals right now), loading that debt on the company and extracting value out for their own benefit. There are two things we know coming out of this crisis: companies will be more distressed and cheaper than ever to buy, and debt will be cheaper than ever to finance. Deal prices have been high but are finally falling, a perfect opportunity for the industry.

The firms know this too. I’ve obtained a March 15 slide deck from Bain & Co., a major management consultancy firm, that served as a kind of informational guide about COVID-19 for PE executives and CEOs in their corporate portfolios. On page 4, it gives the game away: “During and post this crisis, PE firms will be presented with unique opportunities to invest—important to be ready to act.”

Others have noticed the same impulse: a Goldman Sachs associate told Vox, “Corporate raiders and PE firms are sharpening their knives.” The bottom feeding may not happen right away, however. Private equity prefers buying with debt rather than equity, and the debt markets just aren’t complying at the moment, putting deals on ice. There have been almost no leveraged loan deals in the month of March. “While bargains will abound and publicly-traded companies can be picked up for a song, it’s not clear that credit markets on which PE now relies heavily will be in the mood to lend,” says Eileen Appelbaum, an expert on the industry.

Private equity portfolio firms also have a lot of corporate debt out there, which could experience defaults; the heavy investment in restaurants and retail is particularly precarious. There’s also nobody around to buy the collateralized loan obligations, the derivatives of leveraged loans that keep the market flowing.

That probably won’t last forever, and some deals are getting done. In Asia, where the crisis has advanced closer to the remission stage for the moment, Blackstone is buying Soho China Ltd., a Hong Kong-based property company. PE firm Najafi has made a bid for Tegna, owner of 66 TV and radio stations. And with all that cash, the industry has time. I’ve been told that there will be “pent-up demand” that will spill out in the future.

In its slide deck, Bain & Co. tells its portfolio managers to “define how you will outperform competitors through and beyond the crisis,” offering as an option writing an “M&A roadmap.” This suggests that deal activity, whether at the firm level or through the portfolio companies, is a path to success.

Where might private equity look? As the economy begins to recover, you’re going to have a lot of sick or functionally dead firms ripe for the taking. The possible areas of entry include health care, which could be particularly vulnerable. “A lot of the stimulus ideas are linked to beefing up our healthcare system, and that's a place where PE has been really busy this past decade,” Appelbaum says. Health care represented 14 percent of all buyouts in 2018, with 855 deals worth $100 billion, according to Appelbaum and her associate Rosemary Batt. Telemedicine, health IT, urgent care centers, and even hospitals that could be flipped for real estate would lead the shopping list.

The Bain slide deck lists health care, and also something more ominous. “Fear and uncertainty increasing demand for services enabling security and defence operations,” it writes, highlighting Leidos, a defense IT firm, as outperforming the markets. Real estate could be particularly attractive; PE firms could buy up single family homes or commercial properties now for a song, and sit on them until they come back in the recovery.

Bain did not respond to a request for comment.

What can be done? First, Congress needs to cover COVID-19 treatment and not just testing, to eliminate the huge immediate opportunity in surprise billing, an area dominated by private equity firms. Medical debt bill collecting is also a major private equity profit center. In the long-term, it’s hard to know how to prevent a private equity bonanza, beyond passing laws that prohibit the worst of the industry’s practices.