A handful of breaking news stories crossed the wires today, but the one that caught a good deal of attention pertained to the alleged cease-fire between Turkey and Syria. This was a deal that was brokered by VP Mike Pence and Secretary of State Mike Pompeo with their counterparts in Turkey. Shortly after the US claims that a 120 hour cease-fire has been agreed, Turkish officials come out and state that this is not a cease-fire, but rather a pause in the action. What we do know is that the US is supposed to move the Kurdish forces further south into Syria and further away from the Turkish border – exactly what Turkey wants. In essence, this is a quasi-deal to surrender the position of the Kurds – an American ally. The Kapital News is for peace and prosperity and wants to see an end to the endless wars. However, this cannot be done by shooting from the hip. This needs to be done in a prudent and well thought out manner in order to prevent the kind of scenario in which we find ourselves. Following the “cease-fire” announcement, President Donald Trump made claims that he was the only one who could get this done and that this cease-fire will prevent millions of lives from being lost. This is a ridiculous notion on a few fronts, but primarily because this was not a problem until President Trump made his quick decision to remove US forces from Syria. This then led to the immediate advance of the Turkish military into Syria. This is akin to breaking something and then claiming how great you are when you fix it or attempt to fix it. In addition to this, within the next five days, President Erdogan of Turkey will be visiting with President Putin in Russia – just a coincidence we imagine. Other stories discussed pertain to a “miscommunication” from Mick Mulvaney, acting Chief of Staff to the President, and Director of the Office of Management and Budget, regarding the “quid pro quo” on the President’s phone call with his Ukrainian counterpart. We briefly discuss the Brexit deal, but we’re not holding our breath that this deal will be passed by Parliament in the coming days. Also, an article in Vanity Fair calls into question some irregular trading activity that may have proven quite profitable surrounding trades in the US futures markets that may have paid-off big by timing correctly President Trump’s tweets surrounding the US/China trade talks. Finally, someone in the mainstream in calling this into question. This is an abuse of power and in the very least, it needs to be investigated by the proper authorities. Stay diversified, stay vigilant, and stay with The Kapital News. #Truth #Justice #Peace #War #USA #Syria #Turkey #Russia #Politics #Economy #Recession #Impeachment +
Sometimes it’s nice to take a step back from all the action and take a deep breath. That’s what we do in today’s podcast, as we simply list a handful of geopolitical risks that remain outstanding. They consist of: Brexit, US/China trade war, the Syria/Turkey conflict, the potential alliance between Turkey and Russia, unresolved issues relating to Iran and Venezuela, global central banks that are out of control, protests in Hong Kong, Spain, Haiti, Egypt, Ecuador, and others, also domestic policy concerns in Congress. These stories will continue to drive the news for the remainder of the year and some, well into next year and possibly beyond. Stay diversified, stay vigilant, and stay with The Kapital News. #Politics #Justice #Peace #Truth #Economy #Recession
This week is surely setting up to be one for the front pages. There will undoubtedly be further remarks and tweets from President Trump regarding an interim “Phase 1” trade deal with China. Short on specifics and reminiscent of this summer’s trade truce, we here at The Kapital News are highly skeptical of any deal of worth. Even if there is substance, this would simply take us back to where we were prior to the trade war in regards to the amount of agricultural products being purchased by the Chinese. Nevertheless, The White House will continue its jawboning and market manipulation tactics. Other market rallying headlines were the rumors of a Brexit deal in the works only to have conflicting stories come out this weekend claiming that there is still much work to do. The Queen’s Speech is also set to take place on Monday and if Parliament shoots down the vote on the Queen’s Speech then there is going to be much pressure on PM Boris Johnson to resign. This would only serve to throw another curveball in the Brexit saga. The Federal Reserve has started another round of QE. Welcome to QE4, but don’t you dare call it that – at least the Fed doesn’t want you calling it QE. Why? Because the Fed also claims that the US economy is strong and is in a good place, so then why would they need to engage in an emergency monetary policy? A rose by any other name is still as beautiful. #EndTheFed The Fed is also expanding their involvement in the overnight repo market. Recall it was initially just a one-off, then extended to 10 October, then extended to 4 November, now it’s going to last until at least January of 2020 (and it’s not likely going to be enough). There is also continuing escalation between Syria and the Turks. It is likely that if the Turkish military continues deeper into Syria that Syria will declare war against Turkey. Also, since President Trump has ordered the removal of US forces from Syria, the Kurds have now formed an alliance with the Syrian government in order to fight-off the Turkish military. This story has drawn the ire of Republicans and Democrats alike and are pressuring the President to hit Turkey with harsh sanctions to crumble their economy. It is unknown at this time as to what sanctions if any the White House will impose. President Trump is calling an end to these endless wars by withdrawing US forces from Syria, only to deploy thousands more to Saudi Arabia and surrounding countries to fend off Iranian aggression. Does this make any sense? Stay diversified, stay vigilant, and stay with The Kapital News. #Brexit #War #Peace #Economy #TradeWar #Politics #Impeachment #Whistleblower #Justice #Truth #Recession #Stocks
Ep. 125A - The Fed: Out of Ammo, but Firing Anyway
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Chairman Jerome Powell of the Federal Reserve made remarks this afternoon informing us of what we here at The Kapital News already knew. And that is the Fed is expanding their balance sheet, again. However, as we have been noting for months, while this is QE, the Fed would not call this QE, and guess what? – they’re not calling it QE. The reason why they’re not admitting that this is another round of QE is the fact that this monetary experiment was supposed to be temporary. Well it’s been 10 years and it looks like they’re going to begin another round. Should the Fed actually call this QE4, the markets might have a flash of genius, scratch their heads, and say, wait a minute – if everything is so great, then why is the Fed utilizing a monetary tool reserved for emergencies? Good question. The Fed, along with other central banks have boxed themselves in and are now trapped. Exactly as we noted back in July with our Kapital Economics presentation. With a “complete” US/China trade deal seeming less and less likely, the only hope for the markets is that the Fed can pull a rabbit out of its hat. However, this trick has been seen before. The magician has been doing the same trick for 10 years and the audience is on to how the trick is performed and wants something new. It’s unlikely that the Fed can deliver the goods with a new trick of substance. However, also remember that markets can remain irrational longer than we can remain solvent. This is a flawed and fraudulent monetary experiment that has reached its limits, and with fundamental economic conditions deteriorating both domestically and abroad – look out below. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #Recession #Economy #Invest #Money #Debt #Politics #Truth #Peace
Lots to focus on this week and throughout this month as a number of data points and geopolitical events are set to unfold. The Federal Reserve is once again extending their repo agreements to 4 November. This started out as a “one-off,” and then quickly expanded to have a deadline of 10 October and now another moving of the goalpost to 4 November. This is due to a lack of liquidity in the system. The same system that saw the Fed pump trillions of dollars into the financial bloodstream over the last decade is now drying up. We fully anticipate that the Fed will soon begin future round(s) of QE – however, note that it is highly unlikely that they will brand it QE. This lack of liquidity is signaling something just isn’t right beneath the surface – and given not one but two deadline extensions, perhaps it’s not beneath, but right on the surface. This week will see a continuance of US-China trade talks. As we’ve been told for nearly two years – we’re sure everything is going just “great” and a deal is soon at hand (sarcasm). Not really much of a reason for the two sides to strike a deal, especially given the geopolitical climate and the domestic issues surrounding President Trump. Other items discussed include: Hong Kong protests, Brexit, the US jobs report, corporate lay-offs, and a potential 2nd whistleblower coming forward against President Trump. Stay diversified, stay vigilant, and stay with The Kapital News. #Whistleblower #EndTheFed #Impeachment #Justice #Truth #Economy #Politics #TradeWar #Peace
With China celebrating their 70th birthday, the markets had to look elsewhere for its daily headline fix. Unfortunately for the market bulls, they were forced to look not at hope (of a trade deal), but at the reality of the economic fundamentals. And what did they see?… They saw the ISM Manufacturing PMI drop to the lowest level since June of 2009. The reading came in at 47.8 following the contraction of 49.1 in August, and missing market expectations of 50.1. They also saw US construction come in below market expectations. This is the late-stage of the business-cycle and it’s unlikely that this time around that $1 trillion deficits, zero interest rates, negative interest rates, and quantitative easing will be able to “rescue” the system. Why?…Because the world is awash and oversaturated in debt and the solution simply cannot be more debt! Nevertheless, this is what is going to be preached from central banks, federal governments, and the International Monetary Fund (IMF). Where we find ourselves today is similar, but different to the environment that led to the Great Recession – history may not repeat, but it does rhyme. The world of the mid-2000s found the consumer over saturated, along with a handful of corporations, and financial institutions that were highly-levered. This inevitable bubble-bursting operation lead to the Great Recession. So, last time it was the consumer and some corporations. This time, it’s the consumer, corporations, governments at all levels, and even central banks. There isn’t enough growth on this planet to mop up this amount of debt. So who is going to be bailed-out this time? Politically, there is not going to be an appetite from the general populace to “save” the banks or corporate America…again. This doesn’t mean that politicians won’t do so, but they’ll do so at their own peril. Therefore, the likely “solution” will be more deficit spending on various projects to appease the masses and central bank intervention of lower interest rates and quantitative easing – great, more of the problem to act as the solution! Twilight Zone, anyone? Despite monetary and fiscal stimulus measures around the world, we continue to witness fundamental economic deterioration. This business-cycle is peaking and the ensuing recession will likely make the Great Recession look like child’s play. This is not said lightly, but when you have more debt than ever, generally weak demographics globally, (especially in major economies), stimulus measures that are not stimulating, political uncertainties and instability, and continued validation that the global economy is slowing – what do you think will happen? Manufacturing down and volatility up. Stay diversified, stay vigilant, and stay with The Kapital News. #Recession #Manufacturing #Economy #Debt #EndTheFed #Politics #Invest #Money
Central banks continue to cut rates or signal that in all likelihood that they will be doing so shortly. Of course there are a few “odd-balls” out there who are remaining steady or even increasing rates, but for all intents and purposes, the major global central banks are in the midst of a new easing-cycle. This easing-cycle is likely to continue as fundamental economic numbers around the globe continue to show stress in the system and an overall slowdown. The latest to cut rates is the Reserve Bank of Australia, which cut their rates by 25 bps to a new record low of 0.75% and signaled more easing if conditions warranted. We are also witnessing a stronger US dollar, which we imagine is likely to persist on a relative basis. This can have serious consequences for emerging markets that are reliant on commodities, which are likely to weaken in price with a rising US dollar. Further, these countries tend to have significant debt obligations that are priced in US dollars. These economies are then therefore hit on multiple fronts. First, their major commodity exports are hit due to falling prices. Secondly, it now takes more of their domestic currencies to purchase US dollars that are needed to meet their debt obligations that are priced in US dollars. This can cause economic and fiscal stress for these economies. As we look for a catalyst that can truly send markets lower, it may very well come from the emerging market space, if these current trends persist. In the form of a debt default, sovereign wealth fund shortfall, or a major corporation going bankrupt in one of these countries. These are not certainties, but most definitely possibilities. Continuing with our analysis and discussion regarding the impeachment inquiry and the whistleblower’s complaint – we continue to stress the importance of patience. Our goal here is to seek and find the truth and allow for justice to be served no matter who may be involved. It’s a divided country and it’s Left vs. Right. We need the process to proceed and for the facts of the case to be made known so Americans can make an informed decision. This is a sad day for the Republic, but our Constitution provides for checks and balances, and so once again, despite the uncertainties, our Constitution is standing the test of time and serving as a guide throughout this process. Let us pray that the truth and justice are found and administered. Stay diversified, stay vigilant, and stay with The Kapital News. #Impeachment #Whistleblower #Money #Truth #Justice #Peace #Economy #Politics #Recession #WakeUpAmerica #EndTheFed
Awash with Purchasing Manager Index (PMI), figures coming out over the last couple of days continues to highlight what we have been describing for months – a global economic slowdown. Much of the focus is on Germany, the US, and Japan, but also to the broader Eurozone area, Australia, and other periphery nations. All-in-all the net position is in the negative, either in contraction, a reading below 50, or a continuation of slower expansion, readings above 50. Perhaps the biggest declines were experienced in Germany, which is getting hit from all sides. Whether it’s the ongoing trade dispute between the US and China, the uncertainties around Brexit, the slowdown in China, the weakness of Europe’s financial system, or other ripple effects the world over, one thing is certain – it’s not good for Germany and it’s likely they are in or are nearing a recession. This will not bode well for the rest of Europe or the world, especially given the size of the German economy. Furthermore, there have been more aggressive calls by central bankers “suggesting” that governments also step up to the plate to “stimulate” their economies via fiscal policies, since monetary policy can only do so much. Well it’s going to be quite the move for the Germans to decide to take on more debt at the exact same time that their economy is slowing down. The Germans are quite fiscally prudent and not likely to turn on the debt spigot anytime soon. Further developments out of Europe over the weekend witnessed the failure of Thomas Cook, a UK hospitality and travel agency service, as they filed for bankruptcy. This company has been around since the 1850s and had to file for bankruptcy protection due to their outstanding debt load. Are they a canary in the coal mine? Their bankruptcy leaves thousands of people on holiday/vacation stranded, however, efforts are underway to ensure that proper arrangements are made. This also places up to 9,000 UK jobs in the crosshairs and will only add to the economic and political uncertainties that exist regarding Brexit. Stay diversified, stay vigilant, and stay with The Kapital News. #Recession #Economy #Debt #Politics #EndTheFed #TradeWar #Peace #WakeUpAmerica
It matters not the direction, North, South, East, or West, all regions of the globe are undergoing some major shift. Whether it’s Brexit in the UK, escalation with Israel, Lebanon, and Iran, India and Pakistan, Hong Kong protests, the US-China trade war, or others, the conclusion to these stories will affect the future of the geo-political landscape for generations. The Kapital News is a strong advocate of peace and prosperity, and let us pray this is the outcome. Yet with all the “strong-man” tactics and antics being played out by nearly all countries, the probability of a civil resolution to all areas, is unfortunately very low. Things on tap throughout September will be low-level US-China trade talks, global economics figures will be published, major central banks will be making monetary policy decisions, and then there’s always the wild-card. Stay diversified, stay vigilant, and stay with The Kapital News. #Economics #Brexit #USChina #TradeWar #Politics #Recesion #Investing #Peace
So many headlines and so little time. The deadline for Brexit is now only a couple of months away and UK Parliament is no closer to striking a deal with the EU or amongst themselves to leave with a deal. PM Boris Johnson was shot down a few times already as the new PM – with Parliament voting to strike down the possibility of leaving the EU without a deal. This led the PM to call for a snap election for 15 October, which was also struck down by Parliament – at least for now. Given the many back and forth tactics and antics, we imagine there will be more calls for a general election. In Hong Kong, the Chief Executive, Carrie Lam, has formally removed the highly contentious extradition bill from consideration. This bill is a main cause to the 13 weeks of protests, which have shut down several parts of Hong Kong. While this was a big issue for the protesters, the question becomes, will this be enough to end the protests and riots? On the US-China trade front, despite escalation from both sides, there has been a formal announcement that high-level talks will resume in Washington DC in October. All and any outcome is pure speculation, so we shall wait for the results. We lastly discuss the divergence between the main US equity indices against the bond market, the internals of the US stock market, precious metals, and commodities, given their movements, they cannot all be right. One group points to growth and the other, a slowdown. Well, which will it be? Stay diversified, stay vigilant, and stay with The Kapital News. #Brexit #HongKong #USChinaTrade #TradeWar #Economy #Recession #Politics
