From stopping the negotiations, to saying he’ll now sign something, to wanting an even bigger spending bill, the President has found himself on every side of this issue within a few days’ time span. His most recent stance is a combination of he’ll sign something and the bill can be larger than what the Democrats are proposing. The President is receiving push-back from his fellow Republicans who are now all of a sudden concerned about the debt and deficit, yet members of the Administration claim that they’ll be able to convince the Republicans to come on board. Make no mistake, the country does not have the $2 trillion or thereabouts that is being discussed for another round of spending – but they don’t care. It’s an election year and votes need to be purchased.
Other issues discussed pertain to the confirmation process of Judge Amy Coney Barrett taking place this week; whether additional Presidential debates will take place; and an overview of market performance. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Bailouts #Debt #Inflation #Gold #Silver #Liberty #Revolution #BananaRepublic #EndTheFed #USA
Ep. 461 - Accounting Gimmicks Delaying The Day of Reckoning?
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Another Thursday and another initial claims report. For the week ending 3 October, 840,000 Americans filed an initial claim – higher than market expectations. Despite being several months into this pandemic and a supposed V-shaped recovery, we’re still witnessing massive weekly filings of over 800,000. The prior week’s figure was revised upward by 12,000 to 849,000. Recall that last week, the Department of Labor noted that the state of California will be “pausing” the release of their figures due to their backlog of claims and to implement a fraud prevention system. This delay is not trivial in our estimation and will only serve to further distort the jobs market. Overall, for the week ending 19 September, 25.5 million Americans are still claiming unemployment insurance benefits. This is a week-over-week decrease of around 1 million. This is trending in the right direction, but may reverse sharply due to the California pause and the nearing exhaustion and expiry of various “stimulus” policies. We also know through the official jobs report released last Friday, that permanent job losers now stand at 3.8 million. This is a level not seen since 2012 and this is a structural, long-term issue that is not likely to be remedied in the near-term. We also know through various surveys and announcements that many corporations are soon to layoff employees in significant numbers. The downstream effects this will have on the broader economy will likely create further downward pressure, thus continuing the recessionary spiral.
We also discuss a couple political news events and a recent interview with famed short-seller and hedge fund manager Jim Chanos. Chanos notes the potential severity of a commercial real estate collapse, which he deems quite probable, while also stating that weakness in this area was occurring prior to the pandemic. However, he notes that in the Nobody CARES Act, there is a change in the accounting rules that allows corporations to create different “buckets” that shield them from fully disclosing the true effects associated with the pandemic. If corporations should so choose to use this provision from the Nobody CARES Act, then this will likely serve the purpose of making them appear more financially sound than they really are – thus the day of reckoning has not be thwarted, but rather only delayed. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Bailouts #USA #Inflation #Gold #Silver #Debt #Liberty #Revolution #BananaRepublic #EndTheFed #Recession #Depression #Elections
Presidential tweets caused markets to swing back ‘n forth, ending the day lower. Earlier in the afternoon, stocks rallied off the news that the President was feeling better and not exhibiting any symptoms of COVID-19. This rally was only later to be reversed by yet another tweet, whereby the President ordered his representatives to end the negotiations with the Democrats on another spending bill – stocks sold off massively. This is an interesting turn of events, as earlier the President was praising the economy and stock market – only to tweet out the stoppage of further spending that the stock market has been hoping for over the last several weeks. Also interesting is the fact that only a few days ago, the President was telling Congress to get their act together to pass another spending bill. Furthermore, the President a couple of weeks ago during a press conference at the White House, called out Republicans to go for the, “big one,” with respect to another spending bill – claiming that it (the money), all comes back to the USA anyway. Now while the President has stopped the negotiations, he is claiming that another spending bill will be passed after he wins his re-election. So, is the President holding this money as ransom?
We know through various surveys that nearly 50 percent of US households are broke. And we know that some 30 to 40 percent of small businesses have claimed that if they do not receive further assistance from Congress that they will not be able to last through the end of the year. These figures do not count the number of small businesses that have already closed their doors for good. Now make the logical connection(s), without further governmental assistance, many more small businesses will be forced to file bankruptcy and/or liquidate, which will result in further layoffs, which in turn will lead to lower demand for various goods and services throughout the economy, thus causing further downward pressure. This is in stark contrast to how the President notes that the economy is on a fast track to recovery. Then, coincidentally today, we have Jay Powell, Chairman of the Federal Reserve, making comments that without further spending by Congress, the economy may face tragic outcomes. This is some of the strongest language that the Fed Chair has used to stress the need for further fiscal measures. So – somebody is not telling us the truth. On one hand, the President says everything is fine and further spending can wait and/or isn’t needed; and on the other, we have the Fed Chair claiming that major risks exist to the economy/markets if further fiscal actions are not taken.
The Kapital News believes that this house of cards economy is on the verge of collapse. We have consistently been against both fiscal and monetary efforts to “bolster” the US economy and markets since the very beginning and even before they were enacted. There is no free lunch and the costs associated with these efforts will be felt for at least a generation. Meanwhile, any short-term “positive” effects that these measures may have brought have already run its course. Note that some $9.6 trillion has been spent from Federal/State/Local governments and this is where we are: some 26.5 million Americans still claiming unemployment insurance, permanent job losers at 3.8 million, a level not seen since 2013, median duration of unemployed at levels not seen since 2012, tens of millions of evictions waiting in the wings, a countless number of bankruptcies and insolvencies, and with it massive layoffs. So, no, this is not a strong economic recovery. This is simply an attempt by government and central bank figures to keep this mirage of an economy afloat – and in the interim it is decimating small businesses and middle-America – and the true costs of it all have not even been realized – yet. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Bailouts #Debt #Elections #Inflation #Gold #Silver #USA #Liberty #Revolution #EndTheFed #BananaRepublic #Jobs #Recession #Depression #GE #Boeing
The President has left Walter Reed Medical Center and has returned to the White House, despite his physician claiming that the President is still, “not out of the woods.” The Kapital News believes that this is a mistake and that the President should spend another day or two at least, in the hospital. He has the ability to work from this location if he so desires and he’s surrounded by the necessary personnel and equipment, should his condition deteriorate. There is still much to know as to the true state of the President’s health, as the White House and the President’s physician refuse to answer even the most basic of questions. This is a scenario where the American people have the right to know the true status of the President’s health. However, this is consistent and fitting with a White House that delays, dithers, and distorts the truth constantly. It is also an unfortunate event that several other members of the White House have tested positive for COVID-19. This is very much the Trump show – as he used today’s travel from the hospital to the White House as a photo opportunity. We hope the President recovers, but this type of theater is simply not needed.
This evening, former VP Joe Biden, was at a townhall event in Miami, Florida – a battleground state in the upcoming election. This was nothing special from Biden, nor were the questions from the audience. Missing constantly are the structural issues that are tearing this country apart, and everybody seems to simply ask the same questions over and over that have already been answered (for the most part). Still nowhere to be seen or heard are the issues related to the debt and deficits, the actions undertaken by the Congress, White House, and Federal Reserve to bailout one industry after the next – and more spending is on its way. No discussion about the market manipulation amongst the banks and the massive fines that they are paying – yet no one is held accountable. These and so many more questions like these have and will continue to be missing from the conversation – so do not be surprised that nothing changes for the better when you continually decided to vote for the same two-party system time and time again, and await a different result. This is the definition of insanity – and that’s exactly what we’re witnessing. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Elections #Bailouts #Debt #Inflation #Gold #Silver #BananaRepublic #EndTheFed #Liberty #Revolution #Jobs #Protests #Trump #Biden #Debates #RNC #DNC #Recession
It’s no surprise to us here at The Kapital News, as the White House, Republicans, and Democrats seem to be willing to once again get together to discuss another round of spending. On one side we have about $2.4 trillion from the Democrats, and from the White House, it appears they’re willing to go as high as $1.5 trillion. Of course, it can be reasonably deduced that what the White House is willing to do – so too the Republicans. The Kapital News expects the number to come in at around $1.9 trillion. A compromise if you will, where the Dems can claim close to $2 trillion and the President and Republicans can live with it as long as the price tag begins with “1.” Despite what figure is agreed upon and when, we still have to face the music that we do not have the money! But that’s seemingly okay, because we’re constantly told that debts and deficits do not matter. We’ve also been told by just about every member of the Federal Reserve that Congress has to do more. Why? Are we not constantly being told that we are in the midst of a “super V” recovery – then why more spending? Collectively, through monetary and fiscal measures, several trillion dollars (that we do not have), were thrown into the system (courtesy of the banana republic printing press) – and this is as far as it has taken us. We still have millions of evictions waiting in the wings. We still have a countless number of bankruptcies and insolvencies on the horizon. With these, an untold number of layoffs and permanent job losers will likely ensue. We still have moratoriums on student debt payments – these debts still need to be repaid. And lastly, but not the last of it, are the commercial and residential real estate markets that will likely experience declines not seen since the GFC or worse. But, hey, it’s all free – right?
We also discuss the typical data releases reserved for our Thursday podcast. Initial jobless claims for the prior week came in higher than market expectations at 870,000. The prior week was also revised higher by 6,000 to 866,000 claims. However, in aggregate, all persons claiming some form of unemployment benefit(s), decreased by nearly 3 million, to now sit around 26 million. This is still an extremely high number. Yet, this is somewhat of a head scratcher as over the last two weeks, we have witnessed an increase of nearly 3 million, taking the total to around 29 million. And just like that, in one week, 3 million are off the rolls? Perhaps people have found jobs, but this would not be in agreement with the various surveys of small businesses, households, and announcements and actions being undertaken in larger corporations. So what’s going on? Is this some sort of counting error? Are people no longer qualifying for benefits? These are questions to ponder, and unfortunately, several months into this monstrosity of an economic experiment, we still do not have a full picture of the jobs market. This lack of clarity will continue. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Bailouts #Debt #Inflation #Gold #Silver #USA #Recession #Depression #Protests #Liberty #Revolution #BananaRepublic #EndTheFed
The bulk of today’s discussion is a continuation of Monday’s podcast where we were focusing on the FinCEN investigation. This is a branch of the Treasury Department that is responsible for collecting, maintaining, and investigating suspicious activity reports, (SARs). These SARs are filed by banks when they identify unusual and suspicious transactions. The main goal is to detect money laundering and then stop it. However, as we gather through the BuzzFeed News investigation – this process is not so straight forward. In fact, many banks know and/or have a good idea that they are transacting with a money launderer, such as drug trafficker, but they continue to do business. The fees that are made from these transactions are apparently too good to give up; and furthermore, even if federal prosecutors should take action against the bank(s), the common punishment is a fine. This fine is of course paid by the shareholders and not the executives who are aware of these business dealings, nor the board directors who have a fiduciary duty to look out for the shareholders. Since this is the reality – crime does pay for these banks and other actors.
The BuzzFeed article that we continue to make our way through, highlights several of the world’s largest banks and the activities they have been involved with. These actions can range from working with Russian organized crime figures, to drug and human traffickers, to being the bank for convicted Ponzi scheme felon, Bernie Madoff. The amount of money involved is nothing short of astonishing and along with it the banking fees that are derived and the trading desk profits that are made with these funds. So long as this kind of money can be made and the corresponding punishment(s) so limited, then it can be logically concluded that these actions will continue, because crime, unfortunately, for these figures, does pay. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Banks #Fraud #Bailouts #USA #Gold #Inflation #Debt #Liberty #Revolution
The Congressional Budget Office, CBO, is out with their projections for debt, deficit, spending, and revenue levels out to 2050 – and it ain’t a pretty picture. Even accounting for the effects for COVID-19 and the government response thereof, deficits are expected to increase to 5 percent of GDP by 2030 and to a whopping 13 percent by 2050. For context, the average deficit as a percentage of GDP has been 3 percent for the past 50 years. Following suit, the federal debt will increase to a record size of the economy when it hits 107 percent of GDP in 2023. This trend, unfortunately continues and hits a striking 195 percent of GDP by 2050. The CBO even remarks about the fragility of the economy and it will likely not be able to tolerate higher interest rates. Also noting that inflation may be on its way depending on how the government decides to “finance” the debt. And lastly, warning of a potential fiscal crisis and/or decline in the value of Treasury securities. All of the above points have been discussed at length by The Kapital News – most of which on a near daily basis. This is nothing short of a government that is out of control. And sadly, neither the President, nor VP Biden, are likely to comment on this fiscal disaster, nor address the structural issues that have led us to this destination, nor have a realistic plan to address it. The lack of honesty and leadership is a tragedy in and of itself.
In other news, the US dollar index is rallying, putting downward pressure on precious metals, some commodities, and likely stock prices as well. Is this a rush to “safety” in the US dollar? Or is liquidity starting to dry up once again, thus causing an increase in demand for US dollars in response to all of the US dollar denominated debt(s) that are outstanding and due? This is something worth monitoring. Interesting to note, however, is that the 10-year Treasury has barely moved and has been range-bound for quite awhile. Perhaps this fact throws water on the safe-haven play, as one would also expect to see falling yields in such a scenario. Today, Federal Reserve Chairman Jay Powell and Treasury Secretary Mnuchin, gave testimony on the state of the economy and the various efforts undertaken to revive the economy. Long-story short, they are requesting more spending and cannot figure out how to get money in the hands of small businesses, but have no problem giving it to major banks and large corporations – American or otherwise. And lastly, with rising COVID-19 cases in Europe, UK Prime Minister, Boris Johnson, made a public announcement urging Brits to social distancing and utilize other measures to get the numbers down, and should numbers continue to increase, then lock-down 2.0 is the likely outcome. Other countries may follow suit. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Debt #Deficits #Recession #Depression #Inflation #USA #BananaRepublic #EndTheFed #Liberty #Revolution #Gold #Silver
Our typical Thursday discussion revolves around the initial jobless claims data, along with that of the Federal Reserve’s balance sheet, and M2 money stock. With respect to initial jobless claims, the number came in at 884,000, which was higher than market forecasts, but below that one million figure we’ve been witnessing for far too long. However, in aggregate when we review the total number of Americans claiming some form of unemployment insurance benefit, this figure now stands at 29.6 million. This is the second weekly increase where last weeks change added over 2 million to the total count. The bulk of these increases have been seen in the Pandemic Unemployment Assistance program – a creation of the Nobody CARES Act. This program is for small business owners, contract workers, gig workers, and the like. So is this telling us something about the state of small business? On the monetary front, the European Central Bank, ECB, announced today that they will be keeping rates unchanged, and that they will be purchasing up to 1.35 trillion Euros of debt until June of 2021.
On the small business front, we highlight a recent article from Axios that covers a Goldman Sachs survey that questions 10,000 small businesses. There of course is some good news and some bad news. From the question, “Based on the situation today, do you think your business will survive?” An all-time survey low of 65% answered yes – the survey goes back to April. Those who answered, no, was at a survey high of 7%. While many small businesses are beginning to or are already completely open once again, a significant figure of 36% are claiming that without additional help from Congress, they will have to layoff workers and/or cut hours/pay. Further, 30% of respondents noted that without additional support from Congress, they will burn through their cash reserves by the end of the year. There are still many questions that need to be asked and answered and the distortionary effects that exist within the economy due to the policies implemented by Congress, the White House, and the Fed, make knowing the answers to these questions that much more difficult. One thing is certain, it is going to take a little while longer to gain a better picture of the real jobs market and the related economic fallout. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Unemployment #Depression #Recession #Inflation #USA #Gold #Liberty #Silver #Revolution #BananaRepublic #EndTheFed
For those who have been with The Kapital News for a while, know that our take on the global protests is that they are not transitory, but rather history in the making. Time will of course tell all, but it must be understood that many of these protests were occurring before COVID-19, and they’re likely to pick up steam again, if they haven’t already done so. It’s important to stress that COVID-19 has revealed how weak and unsustainable the global system is. A global economy that builds itself on debt was just taunting this type of scenario, such as a pandemic, to occur. So while the economic and political fallout that has been underway throughout this year will surely blame the pandemic, especially politicians and policymakers, this audience must understand that the issues being protested against were years in the making. This is why so many of them were taking place prior to the pandemic and this is why we take so many efforts to stress this point. It was a collapsing system before the pandemic. And once the trillions of dollars that have been thrown into the global financial system begins to wear off, the true economic, social, and political fallout will begin. Despite how bad things have been for so many – we ain’t seen nothing yet. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Protests #Depression #Inflation #Gold #BananaRepublic #Silver #EndTheFed #Liberty #Revolution #USA
Since we’re only a couple of months away from election day, we wanted to take the time to discuss some of the many issues that are still circulating and waiting in the wings. Unfortunately, many of these structural issues are not likely even going to be discussed during the campaign, but the problems associated will continue to be experienced by millions of Americans. Some of these issues consist of, evictions and moratoriums, bankruptcies and insolvencies, issues in commercial and residential real estate, jobs and unemployment, federal government spending and Federal Reserve actions, protests and riots, COVID-19 and vaccine(s), national debt and deficits, amongst others. This is a lot to cover and what the campaigns are likely going to continue to do, is blame the other side and attempt to scare people by “creating” a window into the world that will exist if the other side is in the White House. This shows you their respective lack of focus and their contempt for you because they do not even want to discuss the structural issues that are causing the many other smaller concerns that they want you to focus on. This is pure propaganda, politics, and divide and conquer at play. Wise up and wake up to the real issues. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Election #USA #Inflation #Gold #Recession #Depression #Silver #Liberty #Revolution #BananaRepublic #EndTheFed
