9/27/2019

October - Another financial crisis

For 5 days, the Fed was pumping US$75b per day into the American financial system to provide the liquidity that was drying up. Last night alone it pumped in US$110b. And this is more than a week of pumping the system.

The interbank lending rate has hot up to 10%, way above the 1.5% -2% that used to be the norm. The reason, the banks were afraid to lend money to other American banks for fear of bad loans, not getting their money back, insolvency. Yes, American banks are afraid to lend money to other American banks, did not trust their ability to pay back. And the Fed said it would continue to pump more money into the banking system at US$75b daily. This is another kind of QE but the reason behind this is very serious. The American banks knew that the other American banks are credit risk, not credit worthy.  How's that for confidence in the American banks and how close are they edging towards another financial crisis?

Interbanking lending rate at 10% while Trump is asking the Fed to cut interest rates, even to negative interest rate! The big question, is the American economy as good as Trump was saying, the best it could be? On the other hand many analysts are saying recession is around the corner. Who is telling the truth and who is lying? The diversion in interbank interest rates and what the normal interest rate is frightening as it is telling something hideous going on behind the facade of normalcy.

The US economy is doing very well, collecting billions of tariffs. China's economy is faltering, China badly needs a trade deal. The Americans do not need and want only a good deal in their favour. Really?

No need to second guess who is right or wrong. Just watch what Fed is doing, what Trump is asking the Fed to slash interest rates and the interbank lending rate at sky high. The last two times when interbank lending rates hit this level immediately led to a recession the USA. And Trump, with all his salesman talks or lies, is panicking. How soon would it be proven that Trump has been lying through the skin of his teeth before the collapse comes?

October has always been a favourite month for such events to happen. Be careful.

19 comments:

Unknown said...

This is called currency and financial market manipulation of the highest order. Yet the US Trumpet has been so unashamedly quick to accuse China of cheating, of currency manipulation?

Chua Chin Leng aka redbean said...

In 7 days, half a trillion has been pumped into the banking system by Feb, claiming this to be a temporary liquidation problem but will be doing this for at least a month!

With the amount at US$100b a night now, it would be US$1 trillion in another 5 days and probably more than US$2 trillion in one month.

Everything is fine, but they are not reporting this in the main media.

Trump is also doing very fine. The impeachment inquiry is nothing, nothing to worry about. It is the Chinese economy in trouble, it is Xi in trouble.....Really?

Unknown said...
This comment has been removed by the author.
Unknown said...

US War With Iran Is Imminent?

Introduction

It seems the US is going to attack Iran sooner than later.

The Jewish Neocons in the US govt have been urging this for decades, especially when Benjamin Netanyahu became Israel's PM.

The Middle-East is now literally exploding: the Houthis have delivered an extremely effective blow against Saudi oil production which has now dropped by 50% before bouncing back; there are rumors that Russian SU-35S and S-400 have shot down Israeli aircraft attacking Syria; Lebanon has declared that it will defend itself against Israeli attacks; Hezbollah has been threatening to deliver crippling strikes on Israel and Israeli officials.

War with Iran is becoming more probable given the current facts:

1. The US humiliated

The September 14 coordinated attack by the Houthis against a Saudi’s oil processing facility has upset the Middle East geopolitical game.

The precision attack on the Saudi's crown jewel crude-processing installation last week, is also a precision assault on Saudi credibility, on the believability of the US security umbrella, and a humiliation for Trump, and particularly to US's image as a competent military and intelligence power. Therefore, the US will not rest until the power paradigm is re-adjusted.

Washington’s ability to comprehend its ‘enemies’ mind seems to have been lost – out of a failure in Washington to discover any strain of empathy towards ‘otherness’ (Iranian, Chinese or Russian). So the prospects are not great. Washington will not ‘get it’, but rather, may double-down, with potentially disastrous consequences.

2. Israel-First Trump replaced John Bolton with an even worse hawk.

In O’Brien’s 2016 book ‘While America Slept: Restoring American Leadership to a World in Crisis’, he expressed not just hostility but contempt towards Russia and President Vladimir Putin whom he described as a ‘despot’.

He also gives enthusiastic support for the violent Maidan coup that toppled the democratically elected government of Ukraine in 2014. He praised Ukrainian groups that have strong ties to neo-Nazis and opposed the 2015 nuclear deal with Iran…The dangerous times for the world are not over: They are about to get even worse.

3. Trump is now sending troops and missiles to the Middle East.

The US military has deployed at least two EC-130H Compass Call electronic warfare (EW) plane in one of its bases in the Middle East.

The EC-130H landed in Jordan and continued its way towards Saudi Arabia or the UAE. Built on the base of Lockheed Martin’s C-130, the Compass Call is a heavily modified variant designed to disrupt enemy command and control communications, perform offensive counter-information operations, and carry out other kinds of electronic attacks.

Further, the US Department of Defense has ordered a large-scale turbo activation of ships in the US Maritime Administration’s (MARAD) Ready Reserve Force fleet.

The turbo activation is part of a large-scale activation exercise ordered by the U.S. Transportation Command (USTRANSCOM) on September 16. The activation calls for a total of 28 RRF fleet vessels to transition from reduced operating status to fully crewed and full operating status within 5-days. Activations are commonly followed by immediate sea trials.

This activation is the largest since the Persian Gulf War in 1990 and the invasion of Iraq in 2003.

4. Iranian officials know or sense an attack is coming.

Iranian Foreign Minister Mohammad Javad Zarif has warned that any country launching a war against Iran would not be able to end it on its own, and that such a military action would have dire consequences for the entire Middle East and beyond that region.

He said that Iran would never seek to initiate a war, but warned that any one launching a war against Iran would not be the one that ends it.

Conclusion

When the next false flag operation like 9/11 by Israel materializes (to be blamed on Iran), make sure you prepare for a major regional war that will cause financial turmoil throughout the entire world. Either this year or next.

Anonymous said...

RB,

Something amiss, before Fed Reserve interest rates cuts by 0.25% in July the best "SAFE" Certificates of Deposit (CDs) were 2.5% to 3% notably Synchrony bank, Bank of China or Bank of India via my bank. However, after Fed cut, the interest hovering under 2% regardless any amount. I now don't trust Synchrony bank after I spoke to their outsourced bank official.

JC

Anonymous said...

When such things happening, it means a war is going to happen.

Anonymous said...

Hi......VVV quiet here leh!

Why? VVV busy?

Anonymous said...

RB,

We were caught in 2008 Americunt's housing bubble, do you think another bubble imminent before the 2020 election and where can I parks my money?

Anonymous said...

@All,

LOL!!!

///do you think another bubble imminent before the 2020 election and where can I parks my money?///

For all you losers here I recommend POSB accounts & SG Big 3 bank FDs!! LOL!!!

S'pore may already be in technical recession now.

CN will be forced to spend its reserves to pump up the economy, which will be HOT HOT HOT for CN & HK stocks.

US is still far from recession ... at least 12 to 18 months away. In the meantime, US stocks & War Stocks can still CHIONG!!!!

There may be a big downward shock these few months --- in fact I'm hoping for a crash sometime in Oct. Maybe when US & CN negotiators start punching & kicking each other at the trade talks! Hahaha!!!

My $600K warchest is still ROTTING AWAY & looking for opportunities to buy cheap!!

End-Oct or early-Nov will also be good time to buy Gold, which is in the early stages of a multi-year secular bull run. But stocks still better potential over the next 10-30 years.

WSG

Chua Chin Leng aka redbean said...

The safest thing to do, be prepared to take out as much cash as you can from the banks. No bank is safe from the next financial crisis. They have blown the derivative bubbles many times bigger than the last crisis.

There are talks of a 30% haircut from your savings in the banks.

jjgg said...

Aiyo.. a doomsday scenario..again..based on interventions from the feds in the short term money market..fear not fear not!!! What happened to all the pundits of the inversion landscape? There may be a minor correction in global stock markets but it's not gg to tank any economy la.. even Singapore..with its totally non productive growth engine of government taxes.

Anonymous said...

Uncle RB....based on your 3.20pm comment, it is going to be very very very very Siong! 30% haircut? Siong!

Where to keep the cash? Under the bed? Where?

Anonymous said...

It is a doomsday event if there is a global economic collapse. The derivative bubble, blown by the big banks in the US, will flatten every other bank in the world when the bubble deflates.

The fact that the Fed is frantically feeding US75 billion every other day into the financial system, on top of lowering the interest rate, undoubtedly means that the US financial system is on life support. Anyway, Trump is still bragging that the US economy is the best in the history of the US, so there is little to worry, right?

Not to worry about the impeachment drama unfolding either, because Trump, his Republican Party, the Democratic Party and all involved are just putting on a realty show. Trump will survive his term and maybe be re-elected.

Trump is the best manipulator and deflector in the whole wide world, and all efforts to bring him down have failed so far. On top of that, Pelosi seems to be an ally, thwarting all efforts to bring impeachment to fruition. Her action in starting the ball rolling is just a show to pacify her critics and will end up going nowhere.

Anonymous said...

@RB,

You predicted at least 2X October crash before. Both times fail.

Maybe this 3rd time is the charm. Hahaha!!!

https://mysingaporenews.blogspot.com/2012/10/is-massive-market-crash-imminent-in.html

https://mysingaporenews.blogspot.com/2016/10/another-october-crash.html

Anonymous said...

In 2004 my niece moved from Oklahoma (OK) to San Jose (SJC) bought a condo US$430K. I thought she was crazy, not to hurt her feeling I kept my mouth shut. In 2015 she sold her condo for US$780K to an Indian family, moved back to Singapore. Today the condo in the same areas SJC sells for over US$1.2millions. The same are everywhere in Americunt.

She returned to Singapore lives in the same house her parent bought in the 70s for SG$64K now value over SG$3millions....

Kind Rgs JC

Anonymous said...

@JC,

Not everywhere in US ... only west coast (yes san jose part of it). Due to high pay tech jobs, venture capital, silicon valley, unicorns & decacorns, stock options, ipo's.

Even new york increase not as bad ... although of course it always has its billionaire neighbourhoods overlooking central park with US$50M or US$100M penthouses.

Most US cities still have nice bungalows costing less than US$300K.

SG house @ $64K in 1970s should be worth easily $10M or higher today. $3+m is too low.

Anonymous said...


I'll b happy if I

Go out w/o pills n

Pmd

Unknown said...

Trump blocks all US investments in China. Is this legal? Is this allowed in the US Constitution?

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