Daily Digest

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Daily Digest 10/2 - "Sell Everything" Ahead Of Stock Market Crash, Twilight For The Sawfish

Sunday, October 2, 2016, 10:37 AM

Economy

Sell everything ahead of stock market crash, say RBS economists (Merle2)

In a note to its clients the bank said: “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It said the current situation was reminiscent of 2008, when the collapse of the Lehman Brothers investment bank led to the global financial crisis. This time China could be the crisis point.

Janet Yellen Sees Benefits to Central Bank Stock Purchases (lambertad)

“There could be benefits to the ability to buy either equities or corporate bonds,” she said in reply to a question from the audience. “There would also be costs as well that would have to be carefully considered in deciding whether that would be a good idea.”

The Fed doesn’t have legal authority to buy stocks. After the financial crisis, it bought Treasurys and mortgage-backed securities to push down long-term yields to encourage borrowing, spending, hiring and investment.

Ron Paul Institute: Why Everything You Hear About Aleppo Is Wrong (richcabot)

The mainstream media portrays the fight for Aleppo as one between Syrian President Assad and the people, painting Assad as someone killing his citizens for the fun of it. In other words, as they did with Iraq and Libya, etc. the mainstream media again happily takes up the role of mouthpiece of the US government. The reality is quite different, in fact. Today's Liberty Report speaks with independent journalist Vanessa Beeley, who has recently returned from an investigative trip to Syria including in Aleppo. What's really going on there? Tune in!

MUST SEE CHARTS: The U.S. Govt. Financial Disaster vs. Gold & Silver (reflector)

I was actually quite surprised by the results when I compared the calculations. In 2015, the U.S. Federal Government paid $402 billion just to service the interest on its debt. This figure can be found at TreasuryDirect.gov. According to the Federal Reserve Q1 2016 Statistical Release, the U.S. Federal Government spent a total of $4.02 trillion in 2015. Thus, the interest on U.S. debt consumed 10% of the total budget.

New Jersey Transit Was Under Investigation Before Fatal Crash (jdargis)

Before the crash, the railroad administration had been considering other enforcement actions against New Jersey Transit, including a compliance agreement to require additional changes. Officials at the administration declined to comment on the audit on Saturday, citing the continuing investigation by the safety board.

Blame BP for Deepwater Horizon. But Direct Your Outrage to the Actual Mistake. (jdargis)

he Dutch pilot-psychologist Sidney Dekker, one of the pioneers in studying large technological breakdowns, has written that the true cause of most disasters is not so much the initial accident “but the failure to identify the accident early in its birth.” The blowout of BP’s Macondo Prospect well was a case study in how a series of small mistakes and misjudgments, when not caught in time, can snowball into catastrophe.

Big Oil Abandons $2.5 Billion in U.S. Arctic Drilling Rights (Merle2)

The pullout comes as crude oil prices have plummeted to less than half their June 2014 levels, forcing oil companies to cut spending. For Shell and ConocoPhillips, the decision to abandon Arctic acreage was formalized just before a May 1 due date to pay the U.S. government millions of dollars in rent to keep holdings in the Chukchi Sea north of Alaska.

Twilight For The Sawfish (jdargis)

Now researchers struggle to find even lone survivors in areas where the fish once abounded. As I thought about this, I began wondering about the disappearance of the sawfish and what it says about the lives of the people who live along the West African coast. So I set off south in search of answers, leaving the banks and markets of Senegal to meet researchers working in the mangroves and swamps of Guinea-Bissau. In that country of rivers and islands, people have reported sightings of sawfish in recent years.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/30/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

10 Comments

New_Life's picture
New_Life
Status: Silver Member (Offline)
Joined: Apr 18 2011
Posts: 107
RBS: Sell everything = OLD NEWS

Saw that when it was first published in JANUARY.

reflector's picture
reflector
Status: Gold Member (Offline)
Joined: Aug 20 2011
Posts: 262
deutsche bank - it begins?

http://www.zerohedge.com/news/2016-10-02/some-deutsche-bank-clients-unab...

Some Deutsche Bank Clients Unable To Access Cash Due To "IT Outage"

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 4523
normalization of deviance

That's the conclusion arrived at to explain the Challenger disaster as well as the Deepwater Horizon incident in the GoM.  (Article referenced above, awesome, must read)

Collectively, though, those aggressive choices nudged the whole operation toward higher risk. BP and Transocean had been working this way for a while. When the wells didn’t fail, the drillers—just like those NASA officials—saw that as a vindication of their methods. Even as their wells were getting more dangerous, they grew more confident and complacent. Researchers who study disasters tell us that a long period without an accident can be a big risk factor in itself: Workers learn to expect safe operation as the norm and can’t even conceive of a devastating failure. In such a situation, workers and managers with the most experience are often the last to recognize when risks are getting out of control.

The fact that something functions without blowing up is not proof of risk being contained, and that even moral actors slowly increase their willingness to take risk as each new level of risk-taking results in no catastrophe, even as the signals of problematic situation increases.

Really, really good article.  "Journey to disaster happens one step at a time."  Or something like that.

FWIW, I'm not trying to say the operators of our fine banking system are moral actors; but when these sorts of disasters happen to teams that have the best of intentions, it shows that its a systemic (and human) failing rather than necessarily being the end product of villainy.  Its also is a warning to all of us not to become too complacent over the repeated ability of the central planners to avoid disaster.

Normalization of deviance says the economic O-rings are going to blow one day.  What was crazy ten years ago is now the accepted norm.  There's a reason it was thought of as crazy ten years ago; that's because it really is crazy.

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Putin cracks a funny.

And Angela is not amused.

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 649
Sell EVERYTHING???

Sell everything ahead of stock market crash, say RBS economists (Merle2)

In a note to its clients the bank said: “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It said the current situation was reminiscent of 2008, when the collapse of the Lehman Brothers investment bank led to the global financial crisis. This time China could be the crisis point.

Well, finally an answer!  I have been asking our community for some comments about Selling EVERYTHING in a few posts but never a direct response.

So, in light of the above, I'll try once again.  I have purchased many metals stocks, both senior and junior, at greatly reduced prices, and wonder if I should sell ALL of these NOW and then pick them up AFTER the correction/collapse; OR, hold onto them and be patient, even if they go somewhat lower, for AFTERWARDS they should rebound magnificently???  Of course, they may hardly go down??  "Sell EVERYTHING EXCEPT HIGH QUALITY BONDS."

Any comments, or am I tilting at windmills?

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 649
Sell EVERYTHING: Part 2

So Chris and David say:

Now, here’s the question that’s really important. I have to ask it while we have time. I personally know plenty of very financially savvy individuals who are worried silly about the coming financial crash. And the more experienced they are, they more worried they seem to be. So leaving them aside, what’s your advice? What’s your advice for ordinary people who are spending their time coping with all this increasing complexity and the diminishing purchase power, and who maybe aren’t spending as much time as they should be learning about the true risks they face? Maybe they can’t, they don’t have time. But if you get to talk to them, what do you say to them?

David Stockman:  Well, that’s a very profound and also hard question. Because the whole financial system has been so distorted and deformed that it’s really not safe, it’s not stable. And so therefore, you know, the idea that you can get out of harm’s way by maybe buying some utility stocks because, you know, they’ll hold up better when a crash comes, or getting your portfolio mix more towards fixed income and less towards equity. You know, those are the traditional kinds of advice, and I think none of it is suitable to the uncharted waters we’re in today. The bond market is in a bigger bubble than the stock market. The stock market is in a giant bubble and it’s funded all kinds of, you know, speculation, directly and indirectly, that is spread throughout the financial system whether it’s junk bonds or, as I said, structured finance of every kind.

So the best advice to people is if you’re in the stock market, get out completely. If you’re in any kind of duration based fixed income, get out. Because you can’t have 13 trillion of government debt trading at sub-zero rates in the world and not expect that one of these days there’s going to be a huge implosion of that market. And when the sovereign debt markets start to crater, they’re going to take everything with them – corporation, you know, investment grade corporates, high yield, real estate, securitized real estate, and everything else.

So I think you have to get out of those. I think there will – the coming crisis will be a repudiation of Keynesian central banking and that means that gold will have a new era to shine. I think it will be seen as the default asset that people will believe in once the central banks have failed and become visibly discredited and under political attack. And that’s, you know, it’s another whole topic we could talk about. It’s beginning to happen both here and in Europe and in Japan and elsewhere.

So gold will, you know, have a new lease on life, I think, and could rise to incredible heights. It’s one place where you can put assets. But on the other hand, I don’t think there’s going to be any hyper inflationary blow-off so cash, at the end of the day, is going to be a very valuable commodity. Because when we go through the Big Reset, as I call it, and bond prices start becoming real, and real estate cap rates go back up to 8 or 9 rather than 3 or 4 where they are today, especially in, you know, the major urban areas; then, there are going to be great opportunities to re-enter these markets at much more reasonable, sustainable, income-based values.

So right now, it’s a threefold advice, I think. Get out of stocks, get out of bonds, get into gold, and keep your powder dry because, you know, an opportunity after the crisis is going to come of really incredible proportions.

Ken: So, does "get out of stocks" and "get into gold" mean SELLING gold stocks NOW and then buying them back after the crash?. Or, maybe even BUYING gold stocks NOW?  I surely need some advice on this one.

Kim L. Law's picture
Kim L. Law
Status: Member (Offline)
Joined: Dec 5 2014
Posts: 19
Get out of illusion and get back into real things

Kenneth,

While I am no financial expert nor have enough life experience to be giving advices, from what i understand in these few years of research is that in times of crisis, illusions will be dispelled. This means that anything that does not hold fundamental value (illusion) will lose its perceived value (people waking up).

If I were in your shoes, I would definitely transfer all "wealth" into real things. Real things are like real physical gold and silver metal (paper gold is still an illusion). Real people. Real land. Real food production. Real local business. Real local utility companies, real tools, real goods (lighters, batteries) etc.

The 8 forms of capital outlines a lot of the things you can do today. Essentially it is to convert all your financial capital into the other 7 forms of capital. This is because keeping a large financial capital today is extremely risky (you could lose it all) and unproductive (low yield environment).

Good luck.

Kim

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 649
KIm and Stockman

Finally someone answered!  Kim, I have and do all the things you mentioned.  I have one more SPECIFIC problem. Not only to preserve wealth but also to INCREASE it. Thus, see my posts above.

Mining stocks could possibly be one way but they seem quite dangerous.  Byron King  (Rickards geologist) just said this:

"Mining shares in mining plays based on great assets, superb management, and safe jurisdictions, is the KEY to preserving wealth."

Personally I do not buy that statement as far as PRESERVING wealth is concerned (I go only for the REAL metal stuff), but as for possibly INCREASING wealth, many seem to say that that is the way to go. See Doug Casey's stuff.  Problem is how know WHICH PLAYS have those three KING components, as many analysts seem to disagree about them all, and try to SELL info and recommendations for BIG BUCKS. (Financial newsletters!) Even David Stockman just started up ANOTHER subscription service (only $29/month).  I'll try it as I really liked his conversation with Chris today  and studied his many other posts over a few moons.

Thanks, Kim, for the response.  If I get any enlightened info, I'll gladly pass it on.

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 649
Ah, Enlightenment!!

For ONLY $500 one can get 16 (yes, SIXTEEN) hand-picked Penny Gold plays, offered by Rickards in his The Penny Gold Allocated Portfolio, along with his M.I.D.A.S Touch info., good for just 3 months. (no refunds!)

To try or not to try, That is the question.  

Has anyone experienced this?  If so, maybe a comment or two.

Too bad Mike Maloney, with Jeff Clark, do not offer such a service, as Mike is one of the greatest educators on the planet regarding metals.

And, if the correction/collapse is due soon, why buy now?

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 649
Plan C: Another option
Obviously after Plan A plan B is a necessity.  However, one may be TIED down to the land in either plan.
 
So, I created Plan C.  I recently purchased
a used good 30 foot Motor Home perfect for myself and my family.  This Plan C allows us great mobility, to wherever, whenever for either a new land situation or to just "get away" and "live on the road" as so many already do.
 
But gas and propane might present problems. Solar panels might help.  Thus, Plan D: buy horses and/or motorcycles, unless there are border guards at each state's boundaries.  Then just roam around on one state only.
 
I hear that for $10 a senior citizen or "honored elder" can get a pass to the extensive National Recreational Parks system.
 
Saludos,  Ken
 
 
 
 

 

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