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(Natural News) Imagine that the police claim to find $18,000 worth of heroin in your vehicle, and the next thing you know, you’re in jail with half a million dollars bond – even though you’re sure you never had the drug in the first place. Imagine spending the holidays – 41 days in total –… |
Tag: bond
The ‘Cartel’ Is Back: EU Accuses 8 Banks Of Rigging European Government-Bond Markets
First it was the Libor-rigging cartel, then the FX exchange-rate manipulation cartel, now, European regulators have moved on to prosecuting “anti-competitive” practices in euro-denominated sovereign bond markets.
One month after the European antitrust regulators charged Deutsche Bank, Credit Agricole and Credit Suisse of being a part of a ‘bond trading cartel’, regulators are bringing a separate case against eight unidentified European banks alleging that they conspired to rigging euro-denominated sovereign bond markets.
Reuters reported Thursday that the European Union’s antitrust authority has charged the banks with operating the cartel behind 2007 and 2012.
Just like in past cartel cases, traders at the accused banks allegedly used chat rooms to share “commercially sensitive information and coordinated trading strategies” that they presumably used to rig markets to benefit their own trading books – and shortchange their “counterparties”.
If they’re found guilty, the banks could face fines equal to up to 10% of their global turnover.
“The Commission has concerns that, at different periods between 2007 and 2012, the eight banks participated in a collusive scheme that aimed at distorting competition when acquiring and trading European government bonds,” the Commission said.
“Traders employed by the banks exchanged commercially sensitive information and coordinated on trading strategies. These contacts would have taken place mainly – but not exclusively – through online chatrooms.”
Regulators told Reuters that they wanted to make one thing clear: The allegations aren’t meant to imply that euro-denominated bond markets are subject to pervasive “anti-competitive” practices (though maybe they should talk to Mario Draghi about that).
But don’t worry: We’re sure the information traded in these chatrooms fell neatly within the bounds of “market color.”
Consumer Sentiment is Down, But What Does That Really Mean?
“One of the worst readings ever” and a big recession signal said bond guru Jeffrey Gundlach. David Rosenberg agrees.
Hedge Fund Founder: “Significant Risk” Of A Recession In 2020
Ray Dalio, the hedge fund founder of the $150 billion Bridgewater Associates says that he sees a “significant risk” of an economic recession occurring in 2020. Dalio also says that when the next recession hits, the Federal Reserve and the ruling class will be powerless to stop it.
“Where we are in the later [economic] cycle and the inability of central banks to ease as much, that’s the cauldron that will define 2019 and 2020,” said Dalio, co-CIO, and co-chairman of Bridgewater Associates. Bond yields are signaling the Federal Reserve should not increase interest rates anymore, Dalio added in the interview at the World Economic Forum in Davos, Switzerland. “If it rises faster than that, I think we’re going to have another problem.”
The Fed, after its fourth interest hike of 2018 in December, had signaled two more rate increases for 2019. However, Fed Chairman Jerome Powell earlier this month said central bankers will be “patient” given continued muted inflation. “I think there is the possibility that you extend the equilibrium in a certain way where you have an easier monetary policy … and you grow in a fairly slower way and that you don’t have a classic recession for a while,” Dalio said. That means that the recession could be pushed back if the Fed decides to lay off of more interest rate hikes in the near future.
CNBC reported that Dalio said earlier Tuesday during a Davos panel discussion that “the next downturn in the economy worries me the most.” He also said he’s concerned about “greater political and social antagonism” around the globe.
If a recession hits in 2020. that gives all a fair amount of warning. The time to get your finances prepared for the economy taking a turn from the worse is now. If you would like to prepare for an economic recession, one that experts agree will be worse than the 2008 Great Recession, the best thing you can do is dramatically pay down your debts and save money.
Turing a catastrophe, such as a recession, into an inconvenience is simply a matter of having a prepper’s mindset as opposed to a victim mindset. If you’re having trouble beginning, consider reading The Prepper’s Blueprint by Tess Pennington. It’s an expertly written book laying out an easy to follow guide to help get you through any disaster.
Qatar National Bank hires banks for U.S. dollar bond deal: sources
January 28, 2019
LONDON/DUBAI (Reuters) – Qatar National Bank, the largest bank by assets in the Middle East and Africa, is planning to issue shortly U.S. dollar-denominated bonds and has hired banks to arrange the debt sale, sources familiar with the matter said.
The planned bond issue would be QNB’s first public dollar bond transaction in over two years.
The lender has hired a group of banks including Barclays, Deutsche Bank, ING and Standard Chartered to arrange the transaction, said the sources.
QNB did not immediately respond to a request for comment.
(Reporting by Virginia Furness in London, Davide Barbuscia and Tom Arnold in Dubai; Editing by Toby Chopra)
BofA Sees 3 Paths For The Market: Stairs, Escalator, Roller-Coaster
Among the most memorable events of 2018 is that one of closest correlations across major asset classes – that between stocks and bonds – broke down, prompting Deutsche Bank strategist Torsten Slok to exclaim that “something is wrong.”
“What is safe to say is that there is something driving equities lower, which is not impacting rates. Or there is something keeping long rates high, which is not impacting equities,” Slok mused in a note in late December, discussed here.
Slok also predicted that anyone expecting this divergence to collapse shortly may be disappointed since the breakdown of the positive correlation between stocks and bond yields may not just be a temporary problem as the federal government is projected to notch annual trillion dollar deficits for a “very long time, prompting traders to demand even higher bond yields in the future regardless if stocks underperform.
And yet, the breakdown of the bond/equity correlation appears to already be over because as Bank of America observes in its latest weekly Rates report, this dynamic once again changed in the last two months as markets repriced the growth outlook and equity markets sold off, the belly of the curve (5y-7y) led the Treasury market rally, in sharp contrast to the first three quarters of 2018. As a result, 5y-30y curve became increasingly directional with equity markets during risk-off moves (Chart 2).
What prompted this “renormalization” in one of the historically stongest market correlations?
According to BofA, the heart of the concern is global growth. As a result, headlines on central bank dovishness and trade talk progress only provide temporary relief and are discounted by rates investors. By the same logic, investor risk appetite may only be altered materially when US and China data stand on solid footing.
This change in risk appetite has been reflected in flow data as shown in Chart 3 above. Over the course of the Q4 risk-off move, mutual fund flows shifted from the front-end to the long end, similar to the behavior in January 2016. As such, until the market receives new information on growth outlook, for better or worse, Bank of America notes that both the Fed and the markets may need to be patient.
Which brings us to the key question that needs to be answered to determine future asset returns heading into 2019, namely “how much” and “how fast” the US economy is going to slow down, as opposed to the “if” question.
Unfortunately, according to Bank of America, we have to be patient to get a clearer sense of the above question but the next few weeks will be critical as Q4 earnings are released from corporate America and January data start to come in.
As a result, BofA sees three paths for the market:
- The stairs scenario: while there have been scary prints in global data, there is still a possibility that the US economy is weathering the global slowdown just fine. At least some of the most reliable indicators for predicting a recession are still far from stress levels. The flipside is that if what we’ve seen so far is a bad dream, the pause that the Fed is currently engineering may be short lived once we are back on track later this year. In this case, supply pressure would have a much bigger impact than in 2018, and a belly led sell-off could reverse the long end steepening we’ve seen, and the supply pressure could really kick in; the result would be a rerun of the late summer of 2018 when rising yields sparked an equity slump.
- The escalator scenario: Irrespective of the ongoing sharp bull market rally in stocks, BofA believes that it is increasingly likely that the markets will experience a more volatile H1. As discussed above, while the rest of the world has been dealing with growth roadblocks all of last year, asset prices in the US only re-priced recently. Meanwhile, according to time-zone analysis from BofA, the Treasury rally since Q4 2018 showed that almost the entire 50bp move in 10y UST was done during US hours, reflecting domestic investors pricing in a weaker growth outlook. The silver lining is that while data continues to be sluggish, markets and sentiment were able to at least push central bankers and politicians to be more accommodative, leaving the outlook for H2 a little brighter (for now).
- The roller-coaster scenario: the economy would be a mess in this case, which however is far from reality at least based on recent data; should this scenario materialize the simple call would be to buy bonds no questions asked.
And since the observations above reflect the views of BofA’s rates team, they conclude that without new information on data, earnings, and policies, both rates and curves are likely to stay range-bound, adding that of the scenarios list above, the first one would cause the most positioning pain as investors unwind 5y-30y curve steepeners and short vol positions in the front end (the Fed is not only willing to be patient, they are also willing to be flexible). Scenario two is the most likely according to BofA, with rates continuing to follow risky assets, with the belly leading the moves.
Eventually, as more economic data emerges and solidifes the case for either an accelerating slowdown or a rebound, the Fed will have to react. As long as the Fed is on hold, BofA is confident that the time for a structural steepener is not ripe, and even though steepeners were the trade in vogue in recent weeks, 2y-10y has remained relatively flat. The bank further notes that “the recent 5y-30y steepening is a reflection of growth concerns and haven bid, rather than the beginning of a cutting cycle. “
Finally, if the economic climate improves and the hiking cycle resumes, while stocks will likely resume their slide, the 5y-30y should continue to flatten; alternatively, if the economy hits a brick wall and there is a need for the Fed to cut rates, 2y-10y curve catch up to 5y-30y.
Chinese Property Developers Implode As Market Freaks Out Over $55 Billion Debt Cliff
Earlier this month, when we reported that in the latest warning about China’s housing sector, the Communist Party’s People’s Daily warned that China’s regional economies need to reduce their reliance on the property market for growth and instead focus on sustainable longer-term development, we wondered if “something was afoot with China’s housing sector.”
The story is familiar: in recent year, hundreds of cities across China have seen upswings in their local property markets under a long-term plan by Beijing to further urbanize the country. The process of building new homes and revamping old ones has only accelerated in the last few years, backed by local governments keen to boost land sales and meet red-hot property demand. Indeed, the total sales of China’s top 100 real estate developers soared 35% last year. But repeating a now familiar warning that the party is over, Beijing has once again expressed concern that some cities, looking for rapid expansion, have grown their property markets too quickly and at the expense of new industry development, adding potential froth to real estate prices.
Two weeks later, our concern that something is not quite well with China’s housing sector was validated by the market overnight when shares in Jiayuan International, a prominent Chinese property developer, imploded in late trading in Hong Kong on Thursday, its stock collapsing 81% due to investor unease over a sector that is staggering under vast debts just as the world’s second-biggest economy slows.
According to analysts, all of whom were dumbfounded by today’s move, said that the stock, which flash crashed after a chaotic day’s trading that wiped more than $3 billion from its market capitalisation with the selling promptly spilling over to many of its peers…
… was engulfed by concern that Jiayuan would default on a $350 million bond that matures this week.
As we reported earlier this morning, the panic liquidation over Jiayuan also ensnared rival property company Sunshine 100 China Holdings, whose shares plunged 65% moments after Jiayuan’s collapse when traders realized that the two companies share a director.
“Some of these companies might have cross-shareholdings in each other and when one of those starts to tumble, it brings down other related stocks,” said Bocom strategist Hao Hong. “It’s likely more similar stock crashes could happen this year. A lot of share pledges in Hong Kong are underwater, and as soon as the positions are liquidated it triggers an avalanche.“
The property development sector has become especially vulnerable to sharp selloffs as it has accumulated large amounts of dollar debt, while the flagging Chinese economy has boosted fears about future prospects for China’s housing sector in what may end up being the country’s first hard landing in decades.
But the biggest problem is the upcoming debt cliff, which will force the sector to refinance at the worst possible time: according to the Financial Times, Chinese developers have about $55 billion of maturing onshore debt in 2019, which as discussed this morning accentuates concern over potential defaults.
The sector is under pressure because of “potential concern over bond defaults, as [the companies] have offshore funding coming due,” said Morningstar analyst Phillip Zhong. As a result “the cost of refinancing is quite expensive.”
In hopes of reversing the market panic, the company published a statement on its website after the Hong Kong stock market closed on Thursday, in which Jiayuan said that it had repaid the $350 million bond, adding that “its current financial situation is healthy and business operations is normal.”
Clearly the market did not agree, although what exactly caused the stock to lose 80% of its value in one day remains a mystery, because while traders blamed everything from massive leverage, to stock pledges, to some variation of cross-asset holdings and interlinked collateral for the latest flash crash, the reality is that nobody really knows what happened as Castor Pang, head of research at Core Pacific-Yamaichi confirmed: “No one really knows what’s going on here. For common investors, it’s a very surprising and tough situation as there was no time to get out.”
* * *
The bigger problem, beside the “avalanche” of overnight Hong Kong flash crashes is that after a boom in recent years, China’s property market is cooling, with developers forced to announce sharp price to move inventory, in the process leading to public anger over a sharp drop in prevailing prices. As we reported in October, this led to homeowners protesting in the streets last year in several large cities to demand refunds after developers cut prices to stimulate sales.
And then there is the issue of the $55 billion in coming property developer debt maturities which risks to blow up the local debt market as rates gradually rise. Refinancing maturing debt “has always been a concern for lower-rated companies” in the property business, and will be particularly urgent this year given the scale of the debt maturing, said Mr Zhong.
Quoted by the FT, Nicole Wong, an analyst at CLSA, noted that recent stimulus measures by the central bank are “aimed at only the very big [developers]”.
The silver lining is that the overnight crash in property developer shares was not enough to unsettle the wider Hong Kong market, with the benchmark Hang Seng index closing barely down.
Still, traders are growing more nervous that the tipping point is near: Wee Liat Lee, head of financial group and property research in Asia at BNP Paribas, said the issue of systemic risk “is a problem . . . the Chinese economy is pretty dependent on property as a sector, in terms of investment and reliance of local government on land sales and revenue”.
“But I think this is an issue the Chinese government realised a long time ago,” he added. “It’s a structural problem that takes quite a bit of time to unwind.”
Failing that, Beijing will just bail out the entire housing sector as it has done on so many prior occasions. The alternative is the one thing that keeps every politician in Beijing up at night: revolution.
Volatile market hits Morgan Stanley’s trading, wealth management
January 17, 2019
By Elizabeth Dilts and Aparajita Saxena
(Reuters) – Morgan Stanley’s <MS.N> quarterly profit fell short of expectations as bond trading revenue slumped more than rivals and its wealth management business faltered, sending its shares down more than 5 percent.
The bank has pledged that its expansion into wealth management over the past decade would help deliver more stable results. But the unit, which accounts for roughly half of Morgan Stanley’s revenue, was not immune from year-end market volatility that drove customers to the sidelines.
Morgan Stanley also noted the impact of changes to compensation that addressed what Chief Executive Officer James Gorman called a “very aggressive” deferral program.
Gorman said that Morgan Stanley had been “mortgaging (its) future” by delaying payouts.
On a call with analysts, Gorman characterized the fourth quarter as a temporary, if disappointing, blip.
“2018 was a great year that finished on a disappointing note,” he said. “We do not believe the fourth quarter is the new normal.”
Although market volatility hurt trading, underwriting, wealth management and asset management revenue, Morgan Stanley is keeping a tight lid on costs and making purposeful decisions to position itself for growth, he said.
The bank held its profit margin outlook for wealth management steady at 26 percent to 28 percent through this year. The business had a profit margin of 24 percent in the fourth quarter and 26 percent for all of 2018. Gorman, who has been pressed by analysts to increase that target, cautioned that the current goal is “not a limit” but that the bank is putting revenue growth in that business ahead of profitability for now.
“The trade-off between revenue growth and margin expansion is important,” he said. “This year, we would be more interested in driving higher revenue growth within this margin range that we’ve been public on.”
A pay structure for wealth management employees also weighed on the unit during the market slump.
Morgan Stanley has for years paid its roughly 15,700 brokers a combination of cash up front and stock, which is deferred for several years and invested by the firm.
The bank reported that net revenues for the current quarter fell to $4.1 billion from $4.4 billion a year earlier because of losses in the investments of some deferred compensation plans.
Overall, Morgan Stanley reported a fourth-quarter pre-tax operating income of $1.9 billion, down 25 percent from the $2.5 billion it reported in the year-earlier period, when changes to U.S. tax law dramatically affected results across Wall Street.
Its earnings per share of 80 cents missed analysts’ average estimate of 89 cents per share.
Net revenue fell 10 percent to $8.6 billion, falling well short of the $9.3 billion Wall Street expected, according to IBES data from Refinitiv.
Morgan Stanley’s fixed-income trading revenue fell 30 percent to $564 million. That was a much sharper drop than at rivals, who have bigger bond trading businesses.
Goldman Sachs Group Inc <GS.N>, JPMorgan Chase & Co <JPM.N>, Citigroup Inc <C.N> and Bank of America this week reported bond trading revenue declines of 15 percent to 20 percent, blaming a sharp and unexpected widening of credit spreads and volatility in rates trading.
Revenue from Morgan Stanley’s wealth business dropped 6 percent. The unit’s profit margin fell to 24 percent from 26 percent in the year-ago quarter.
Investors shifted $121 billion into U.S. money market funds in December, Lipper estimates, the most since November 2008.
One bright spot in the bank’s results was its M&A advisory business, which delivered a 41 percent rise in revenue. Goldman Sachs also saw similar surge in dealmaking.
“After strong results from peers yesterday, Morgan Stanley’s quarter appears weak, and we expect shares to underperform,” said Brian Kleinhanzl, an analyst at Keefe, Bruyette & Woods.
In the last twelve months, Morgan Stanley’s stock has fallen nearly 22 percent, versus a 12.5 percent decline in the financial index <.SPSY> and a 5.6 percent drop in the S&P 500 index <.SPX> over the same period.
(Reporting by Aparajita Saxena in Bengaluru, Elizabeth Dilts in New York; Writing by Sweta Singh; Editing by Saumyadeb Chakrabarty)
Morgan Stanley’s Warning: ‘Another Market Storm Is COMING; Stocks Will PLUNGE’
Morgan Stanley is encouraging everyone to enjoy the current economic situation while we still can. According to the investment bank, stocks will plunge again and another market storm is coming.
The S&P 500 will soon suffer a retest of the lows from Christmas Eve because of shrinking earnings estimates and mounting economic concerns, investment bank Morgan Stanley warned in a Monday report titled “Don’t fear a potential recession; Embrace it.” But many are stuck living paycheck to paycheck and any market recession could be the tipping point for everyday Americans.
“Should the hard data deteriorate further, as we expect, we think the market will quickly return to pricing in a recession and rate cuts,” wrote Michael Wilson, Morgan Stanley’s chief U.S. equity strategist. According to CNN, Wilson was among the few on Wall Street who correctly predicted the recent market downturn, though even he was surprised by how quickly it happened. “We think the odds of an earnings and economic recession have increased materially,” Wilson wrote in his report.
The Dow has spiked more than 2,100 points, or about 10%, since Christmas Eve. Fears of a recession have faded thanks to progress on U.S.-China trade talks, soothing words from the Federal Reserve and a very strong December jobs report.
Even though stocks have rebounded nicely, some red flags persist. For instance, numbers released on Monday show China suffered its biggest drop in exports in two years in December as global growth slowed. Germany’s economy grew last year at the weakest pace since 2013.
Meanwhile, the once-booming junk bond market has slowed to a near-halt. And last week. Macy’s suffered its worst day of trade ever after reporting weak holiday sales and dimming its outlook. –CNN
Wilson further said the United States is “in the midst of a fairly steep and broad” negative earnings revision cycle and 2019 margin estimates have already contracted by the most for this time of the year since 2008. “The fundamentals remain murky at best with earnings visibility deteriorating,” Wilson said in writing. “We don’t know if an economic recession is coming or not,” Wilson wrote. However, he said that if there is a recession, it will likely be “shallow and brief” like the 1990 downturn.
PG&E Shares Crash 30% As CEO Quits Ahead Of Bankruptcy Filing
Shares of the troubled California utility PG&E tumbled more than 30% on Monday after its CEO Geisha Williams quit, followed by the revelation made in an 8-k filing on Monday morning that the utility – which is facing potentially billions of dollars in fines related to the California wildfires – is planning to file for bankruptcy on Jan. 29.
PG&E has seen its shares plunge by more than half since November after the state opened an investigation into the utility’s role in the wildfires. The utility had already participated in one of the largest bankruptcies in US history back in 2000 during California’s energy crisis. Following a collateral-call-triggering downgrade to junk last week, rumors circulated that PG&E could inform its employees about bankruptcy plans as soon as Monday.
Williams, who was one of the first Hispanic CEOs in the Fortune 500, will be succeeded by the company’s general counsel on an interim basis. Her departure follows the exits of three PG&E CEOs earlier this month, according to Bloomberg.
“I will be leaving PG&E,” Williams said in a separate email, without providing a reason for her departure. “I value the opportunity I’ve had to lead PG&E and wish all of my colleagues well.”
Meanwhile, the possibility of a state takeover and/or state-organized breakup have also loomed over the company. Newly appointed California Governor Gavin Newsom said during a press conference Thursday that his office would be making an announcement related to PG&E within the next few days and that the issue was at the top of his agenda. He said in a later interview that the announcement would involve appointments to the California Public Utilities Commission, the state’s grid operator and to a commission established by legislature to explore wildfire issues.
Wall Street analysts are scrambling to discern the possible fallout from such a large bankruptcy filing, and its possible implications on the junk bond market, and whether a PG&E bankruptcy could create an “AIG” moment. Citigroup Inc. called it a “a crisis of confidence.” Guggenheim Securities analysts likened the dilemma PG&E poses to investors and lawmakers as “a falling knife.”
After taking the helm at PG&E, Williams pushed for changes to California laws to free utilities from responsibility if their equipment malfunctions and causes a natural disaster – something she decried as “bad public policy.” However, while lawmakers have rejected PG&E’s calls to change wildfire liability laws, they did pass a law in August to help the utility to pay for the 2017 wine country fires. California lawmakers are now weighing whether to pass another law to help PG&E limit its liability.
Then again, PG&E’s planned bankruptcy filing could be a bluff to force California lawmakers to act. After all, if PG&E goes down, it would be shielded from bankruptcy-related lawsuits – while Californians might be faced with higher utility rates.
The Tragedy Of The Euro
by Alasdair Macleod, GoldMoney: After two decades, the euro’s minders look set to drive the Eurozone into deep trouble. December was the last month of the ECB’s monthly purchases of government debt. A softening global economy will increase government deficits unexpectedly. The consequence will be a new cycle of sharply rising bond yields for the […]
The post The Tragedy Of The Euro appeared first on SGT Report.
U.S.-based stock funds draw $8.74 billion in latest week: Lipper
January 10, 2019
By Jennifer Ablan
NEW YORK (Reuters) – Investors put money to work in both U.S. stock and bond markets for the week ended Wednesday, after soothing remarks by Federal Reserve Chair Jerome Powell that low inflation would allow the U.S. central bank to be “patient” in deciding whether to continue raising rates this year.
U.S.-based stock funds attracted about $8.74 billion in the week ended Jan. 9, following the previous week’s cash withdrawal of $18.7 billion, according to data released Thursday by Lipper. U.S.-based taxable bond funds attracted $8.4 billion in the week ended Wednesday, following the previous week’s cash outflows of over $12.7 billion, according to Refinitiv’s Lipper research service.
“It appeared to be ‘risk-on’ for the week,” said Tom Roseen, head of research services for Lipper. He noted that it was the first week in 29 that equity mutual funds – excluding exchange-traded funds (ETFs) – witnessed net inflows of over $4.4 billion. That marked their largest weekly net inflows since June 20, 2018, he said.
But Roseen said it was the seventh consecutive week that taxable bond funds, excluding ETFs, witnessed net outflows, handing back $926 million this past week. Taxable bond ETFs, for their part, attracted roughly $9.35 billion for the same time period, Lipper data show.
“Domestic equity funds – ex-ETFs – took in a little less than $3.3 billion, witnessing their second weekly net inflows in three while posting a 3.99 percent return on average for the flows week,” Roseen said.
Their non-domestic equity fund counterparts, posting a 4.08 percent return on average, witnessed their first weekly net inflows since Sept. 19, 2018, said Roseen, noting more than $1.1 billion of inflows this past week.
For the 15th week in a row, non-domestic equity ETFs witnessed net inflows, with this past week attracting $3.6 billion, Roseen said. That was their largest weekly net inflows since Jan. 31, 2018, he said.
All told, safer money-market funds attracted over $17 billion in the week ended Wednesday, underscoring investors’ skittishness on financial markets given the recent volatility. It was the sector’s fifth consecutive week of cash inflows, Lipper said.
(Reporting by Jennifer Ablan; Editing by Tom Brown and James Dalgleish)
DoubleLine’s Gundlach: High-yield market flashing ‘yellow’ on recession
January 8, 2019
By Jennifer Ablan and Trevor Hunnicutt
NEW YORK (Reuters) – Jeffrey Gundlach, chief executive of Doubleline Capital, said on Tuesday that the high-yield “junk” bond market, which has been a leading indicator of recessions, is flashing “yellow now.”
Gundlach, who oversees more than $121 billion of assets under management, said on an investor webcast that the signal “may be … a false positive,” but “this is something we’re going to have to watch very, very carefully.”
Gundlach said the current buy-the-dip mentality reminds him of complacency that took place in the 2007-2008 credit market right before the great financial crisis.
“There’s potential for that here. Because the panic in December was a buying panic – not a selling panic – you never saw the VIX (CBOE volatility index) truly spike the way you want for a panic. You want to see that thing over 40. It never made it to 40.” Currently, the VIX <.VIX> stands around 20.50 points.
Gundlach said Federal Reserve Chairman Jerome Powell on Friday pivoted from pragmatism to a “Powell Put” – that the Fed under his leadership will act like an option contract to prevent stocks from falling too much.
Powell said on Friday that the central bank “wouldn’t hesitate” to adjust how quickly it lets its balance sheet shrink if it starts to cause problems in financial markets. He also said that the Fed “will be patient” with monetary policy as it watches how the U.S. economy performs.
Since the “Powell Put” on Friday, the U.S. stock “market has been throwing a party,” Gundlach said.
(Reporting by Jennifer Ablan and Trevor Hunnicutt in New York; Editing by Leslie Adler and Matthew Lewis)
“This Is A Completely Horrific Situation”: What “Bond King” Gundlach Expects Will Happen In 2019
It’s the start of January, which means it’s time for Jeff Gundlach’s much anticipated “Just Markets” webcast, previewing what he and his DoubleLine fund expect from the capital markets. And if last year’s January webcast is any indication, this one is not to be missed considering just how many predictions Gundlach made one year ago that eventually came true.
Courtesy of Bloomberg, here is a summary of what he predicted would happen last January, and the outcome as of Dec 31.
U.S. Equities
- Call: Expect a run-up early in 2018, but an eventual reversal that would leave the market down for the year.
- Outcome: The S&P 500 Index peaked on Sept. 20 and finished with a loss of 4.4 percent, including dividends.
Emerging-Market Equities
- Call: Not a great time for traders to be buying, but long-term investors may benefit from attractive valuations relative to the U.S.
- Outcome: The MSCI EM Index did worse than the S&P 500, dropping 14 percent on a total-return basis; price-earnings ratios still favor emerging markets.
European Equities
- Call: A value trap.
- Outcome: The Euro Stoxx 50 Index lost 16 percent after dividends in dollar terms.
Two-Year Treasuries
- Call: Two-year notes could exceed 2.5 percent, but they’re “actually a pretty no-brainer investment” because they offer positive returns if held to maturity, when other assets may be reasonably priced.
- Outcome: Yields stayed above 2.5 percent from June 11 to Dec. 28 and short-term bond funds generated positive returns.
10-Year Treasuries
- Call: If rates on the 10-year surpass 3 percent, “then it’s truly, truly game over for the ancient bond bull market.”
- Outcome: Rates closed above 3 percent on Sept. 18 and climbed to 3.24 percent Nov. 8, but then crept back down as investors seeking a haven pushed up bond prices.
Corporate Credit
- Call: It’s a bad time to buy corporate bonds because “almost all the juice is out of the orange.”
- Outcome: The Bloomberg Barclays US Corporate Bond Index lost 2.5 percent.
U.S. Dollar
- Call: A short-term rally, but the big move will be to the downside.
- Outcome: The dollar spot index hit a year-low on Feb. 15 before climbing to a 12-month high on Nov. 12. It’s still above the Jan. 9, 2018, level.
U.S. Dollar
- Call: A short-term rally, but the big move will be to the downside.
- Outcome: The dollar spot index hit a year-low on Feb. 15 before climbing to a 12-month high on Nov. 12. It’s still above the Jan. 9, 2018, level.
U.S. Recession
- Call: No signs of a recession among leading indicators.
- Outcome: While some warning signals are flashing now, the economy is still growing.
Considering that unlike most of his Wall Street penguins conformist peers, who dread to voice any contrarian call and always follow the safety of the herd (Wall Street has never forecast a decline in the S&P on a year over year basis for example) the majority of Gundlach’s predictions came out true, in many cases surprisingly so, it is probably a good idea to listen to what he will have to say at 4:15pm ET today.
Readers can log into his webcast here; we will highlight any of his key slides below.
* * *
In the first chart, Gundlach recalls why he was optimistic the global economy at the start of 2018, and has grown more pessimistic one year later, courtesy of the key proxy, the Kospi stock index, a bellwether for global trade and commerce, for the export-heavy South Korean economy.
Sure enough, Citi’s economic data change index has hit troughs not seen in many years for most regions, and especially Europe.
The bond king then reposts the popular chart from DB showing that nobody made any money in 2018 and claims that key culprit for this predicament is that the consolidated central bank balance sheet has been shrinking, resulting in MSCI World weakness.
Looking at the Wu Xia Shadow Fed Funds model, Gundlach then calculates that $1 trillion in QE is roughly equivalent to 100 bps, a key topic for markets now especially when it remains unclear if the Fed is – or isn’t – on autopilot when it comes to the Fed’s balance sheet.
Going back to the economic slowdown, Gundlach understandably focuses on the recent collapse in the Mfg ISM, which tumbled by the most in a decade, and sent stocks plunging last week amid a spike in recession fears. Why focus on sentiment surveys? Because according to Gundlach, they are “worth following for a sense of where the market will go from here.”
A better economic report card can be found in various measures of business and consumer sentiment, which are still relatively solid and a ways away from hinting at a recession, even if they are starting to “flash yellow” for recession.
Additionally, while recession concerns have been all the buzz on Wall Street in recent weeks, another chart showing that there is little imminent contraction on the horizon is the following chart showing how junk bond spreads have acted 6 months ahead of recessions (those in 2001 and 2007), although as Gundlach does note, the risk of a recession by the red line does suggest that the recession risk is rising, even if it is still relatively early.
Still, something to be concerned about is that US T-Bill yields have now surpassed bond market yields; and as the following BofA chart reference by Gundlach shows, every time this inversion has happened a period of market volatility has followed.
Looking at markets, Gundlach highlights the recent outperformance of Emerging Markets, which is likely due to the ongoing weakness in the dollar. Predictably, Gundlach says that if the dollar continue sto weaken, EM will outperform the S&P.
Gundlach also highlights the divergence between the S&P and the rest of the world, where the “amazing thing” was the decoupling in the early summer, yet in December we saw a sharp convergence between the two key markets once the dollar started to slide. Even so, Gundlach still sees Europe as a value trap, especially if the Euro gets stronger, and adds that if we see dollar weakness, that could be a “harbinger of change.”
Next, Gundlach looks at the difference in rate hike expectations between the Fed via the “dots” and the market, and highlights the dramatic drop in market-implied rate hike odds following the Fed’s recent dovish relents.
Commenting on the Fed earlier, Gundlach said that Powell staged a “full capitulation” on Friday with comments that policy makers are “listening carefully” to markets, where he “went from pragmatic Powell to Powell put and the markets have been throwing a party since then.” And so, with the market rebounding, Gundlach is “sure that Jay Powell and the Fed are feeling better about where they stand and their plans to do quantitative tightening further.”
Meanwhile, a clear theme that has emerged is that for Gundlach the biggest variable in the market as we enter 2019 is the (declining) strength of the dollar, and looking at the following Fib and relative strength index, Gundlach has spotted a peak and cautions that should the 38 Fib retracement be breached, “I would not be surprised to see us moving quickly to 94 in the DXY” (he adds that for those who don’t like to focus on technicals, you can “cover your ears and hum”.)
And here a surprising trade reco: Gundlach believes that bitcoin could easily go to $5000, or a 25% gain, even as he warns to “get the heck away from bitcoin.”
The bond king then focuses on one of his favorite relationships – that of the 10Y TSY vs the Copper/Gold ratio, which to Gundlach suggests that the 10Y yield is going lower. Rhetorically, he asks “Why don’t we just follow this all the time?”
And yet, looking ahead at what he expects to happen to the bond market, Gundlach says that contrary to conventional wisdom, he expects the bond curve to steepen.
There can not be a Gundlach presentation with the requisite warning about the growing leverage in the system, and sure enough here it is, looking at the surge in the national debt in the past decade. “If you tuned out, now tune back in,” Gundlach prefaced the following chart, and reminds listeners that in fiscal 2018 total US debt by a whopping $1.4 trillion, far above the roughly $900 billion budget deficit. “This is a completely horrific situation” Gundlach exclaims…
… and asks “are we growing at all or is it just the increase in debt”, then showing that the change in public debt debt is nearly 50% higher than the change in the official budget deficit.
Gundlach then referenced the book titled “Bankruptcy 1995: The Coming Collapse of America and How to Stop It” by Harry E. Figgie, noting that while it was hyperbole at the time, “some of those tables kind of look like they’ll happen in the next few years,” and warning that “we could be on the tipping point of this debt compounding cycle.” The chart below showing soaring interest expense projections, he notes “is from the CBO, not one of those doomers.”
Next, Gundlach focuses on a chart he has presented before, showing the significant risk of downgrades in the BBB space, as corporate leverage is “very bad” and has risen near record highs…
… warning not only that the US stock market is becoming a “CDO Residual” as companies shave taken on too much debt, but urges listeners to use the recent strength in the junk bond market “as a gift and get out of them.”
* * *
Gundlach’s full slidedeck is below:
Italian bank Carige to tap state guarantee for funding
January 8, 2019
MILAN (Reuters) – Banca Carige <CRGI.MI> is to raise money using a state-backed guarantee which Italy approved on Monday via an emergency decree, marking a significant U-turn by the 5-Star Movement in the country’s ruling coalition.
The government stepped in to support Carige after the Genoa-based bank was put under temporary administration by the European Central Bank last week following a failed attempt to raise private capital in December.
Carige said on Tuesday it would tap the state guarantee for funding adding however it was unlikely to turn to the government for capital.
Under the terms of the decree, which reinstates a measure Italy adopted in the past to provide liquidity to the country’s banks, the Treasury will guarantee bonds issued by Carige as well as funds the lender might borrow from the Bank of Italy.
Italy has also given Carige the option to apply for state aid under a “precautionary recapitalization” scheme used in the past to rescue rival Monte dei Paschi <BMPS.MI>, but Carige said this was “a very marginal option.”
The government’s action marks a significant shift by the 5-Star Movement, which was highly critical of past decisions to use taxpayers’ money to prop up struggling banks.
League leader Matteo Salvini defended the decision to intervene, which prompted accusations of hypocrisy from the opposition center-left.
“They only needed 10 minutes at a late-night cabinet meeting to disavow five years of lies and insults directed against us,” former center-left Prime Minister Matteo Renzi said on Twitter.
Keen to prevent another collapse in Italy’s battered banking sector, Italian banks in November came to Carige’s rescue and provided second-tier capital by buying a 320 million euro hybrid bond.
But the bank’s top shareholder, the Malacalza family, in December blocked a new share issue of up to 400 million euros ($457.80 million) that would have been guaranteed by the bond’s conversion into equity.
(Reporting by Valentina Za. Editing by Jane Merriman)
Italy offers state-backed options to shore up Carige
January 7, 2019
By Stefano Bernabei, Valentina Za and Giuseppe Fonte
ROME/MILAN (Reuters) – The Italian government approved a decree aimed at shoring up troubled lender Banca Carige <CRGI.MI>, offering it access to a series of state-support options including recapitalization.
The decree, signed off on Monday after a surprise cabinet meeting, will allow the bank to benefit from state-backed guarantees for new bond issues and funding from the Bank of Italy.
The lender, which last year failed to secure shareholder backing for a capital increase, will also be able to request access to state-backed precautionary recapitalization, if needed.
According to a financial source close to the matter, Carige would only consider a request for precautionary recapitalization if new and unforeseen problems arose.
In 2017 European Union state aid regulators approved a precautionary recapitalization at Banca Monte dei Paschi di Siena <BMPS.MI> after the lender agreed to a drastic overhaul. EU rules permit such a scheme only if the bank is solvent.
In a statement, the government said the aim of the decree was to preserve the stability of Carige and allow it to press ahead with plans to cut bad loans and bolster capital.
The European Central Bank (ECB) last week selected three commissioners to try to save the Genoa-based bank after the Malacalza family, Carige’s biggest stakeholder, blocked a share issue that was part of an industry-financed scheme to stave off a collapse.
Italy’s FITD depositors protection fund bought a 320 million euro ($366 million) hybrid bond late last year to help Carige to reach a required total capital threshold. Carige, however, failed to gain shareholder backing for an up to 400 million euro new share issue that would have been guaranteed by the bond’s conversion into equity.
Earlier on Monday the administrators met Treasury Minister Giovanni Tria before going on to meet top managers at FITD but no details of what was discussed were released.
A person familiar with the matter said the meeting with FITD would broach the possibility of lowering the bond’s interest payments.
Carige was not immediately available for a comment.
COUPON RAISED
Carige’s failure to approve the capital increase triggered a stepping up of the coupon to 16 percent from 13 percent, which represents 51 million euros in annual interest, further stretching the loss-making bank’s finances.
The fund’s contributors are other Italian lenders that came to Carige’s rescue when the sector is under pressure from slowing economic growth and rising borrowing costs under the country’s Eurosceptic government.
Carige or supervisory authorities can decide to convert the bond into equity if the bank’s core capital falls below minimum requirements, according to a document on Carige’s website.
The bank’s capital ratio stood at 10.8 percent at the end of September – above an ECB minimum threshold of 9.63 percent, though the ECB will soon set a new threshold for Carige for 2019.
Raffaele Lener, one of the three commissioners running Carige, said in a newspaper interview published on Monday that the bank had to negotiate “a different solution” with the fund given the current situation with the bond.
Lener also told la Repubblica’s Affari&Finanza supplement that the bank would need to seek approval from market watchdog Consob for a resumption in trading of Carige shares and bonds, which are currently suspended.
He said the suspension was an issue for the bank’s image and liquidity but a capital increase may not be necessary if the bank can quickly find a merger partner or manage to overhaul its business.
The ECB has told Carige to consider a merger with a stronger peer.
However, bankers say that Carige, which has sold off its best assets in recent years, is overly exposed to the depressed local economy and has little appeal for potential buyers.
(Additional reporting by Giulio Piovaccari and Andrea Mandala; writing by Stephen Jewkes; editing by Keith Weir, David Evans and Leslie Adler)
Question of the Day: Is the Bond Bull Market Over?
Amidst talk of red lines, trends lines, and common sense lines, the debate lingers: Is the bond bull market over or not?
Markets are all about flows
by Alasdair Macleod, GoldMoney: This article looks at prospective supply and demand factors for financial assets in the New Year and beyond. Investors should take into account money flowing into and out of financial assets as well as stock flows, particularly escalating government bond issuance, which looks likely to accelerate significantly in the coming years. […]
The post Markets are all about flows appeared first on SGT Report.
U.S. fund investors yank most cash from stocks since February: ICI
January 2, 2019
By Trevor Hunnicutt
NEW YORK (Reuters) – U.S. fund investors anguished over economic growth and policies pulled the most cash from stocks in any weekly period since last February, Investment Company Institute data showed on Wednesday.
Mutual funds and exchange-traded funds (ETFs) tracked by the trade group reported $37.8 billion in withdrawals overall, a 12th week of declines and the most cash pulled since a Chinese growth scare in August 2015. More than $21 billion tumbled out of stock funds during the week ended Dec. 26, the most since February 2018.
And while the withdrawals amount to a sliver of the overall assets in such funds, fast-declining sales of funds reflect deteriorating sentiment as people stockpile cash.
The major broad U.S. stock indexes turned in their worst year since the 2008 financial crisis in 2018, as investors adjusted to slowing growth expectations and the Federal Reserve’s attempts to restore U.S. monetary policy to pre-crisis levels of interest rates and unload the bonds it bought to encourage risk-taking. The year ended with a week of major swings up and down in those indexes.
In addition to the rate hikes, investors have been worried about excessive corporate borrowing, U.S.-China trade tensions, a partial U.S. government shutdown and the potential for slowing economic growth.
While ETFs, used heavily by institutional investors, were stock buyers in December, mutual fund investors typically used by retail investors sucked out a record $86 billion, according to preliminary estimates last week from Lipper, a research service.
Withdrawals from funds primarily invested in international stocks hit $9.3 billion, the most cash ever pulled, at least according to records dating to 2013.
And investors cashed in $9.2 billion of shares in bond funds despite strong demand for relatively safe-haven municipals. Funds invested in gold and other assets took in $707 million, the most cash since April.
(Reporting by Trevor Hunnicutt; Editing by James Dalgleish)
U.S. Mint American Eagle 2018 gold, silver coin sales at 11-year lows
December 31, 2018
By Renita D. Young
CHICAGO (Reuters) – U.S. Mint sales of American Eagle gold and silver coins dropped to their lowest in 11 years during 2018, U.S. Mint data showed on Monday, as investors favored higher-yielding assets, despite global stock and bond market volatility late in the year.
Total 2018 sales of American Eagle gold coins sold by the U.S. Mint reached 245,500 ounces, the lowest on a year-over-year basis since 2007. The Mint sold 3,000 ounces of gold coins in December, 85.4 percent lower than November sales, the data showed.
Silver coin sales were 15.7 million ounces, also the lowest since 2007 on an annual basis, according to the U.S. Mint. December American Eagle silver coin sales reached 490,000 ounces, down 70.2 percent from the month prior.
Investors concentrated on buying more older coins at lower premiums, U.S. dealers said.
Sales of American Eagle coins by the U.S. Mint fell in consecutive months for the first five months of the year, the data showed. Sentiment changed in the summer, when a trade war between the United States and China sparked a temporary move toward safer assets.
Gold is traditionally a safe-haven commodity that investors buy during times of economic and geopolitical uncertainty to store the value of their assets.
However, that momentum waned later in the year, even as stock markets slid further, because the U.S. dollar increased in value. This made dollar-denominated gold more expensive for holders using other currencies and a less attractive investment.
The U.S. Mint sold American Eagle palladium coins for the first time in 2017, but sold none in 2018. Just 30,000 ounces of American Eagle platinum coins were sold during 2018.
(Reporting by Renita D. Young; editing by Grant McCool)
“They Said It Could Never Happen Again?” – Global Stocks Suffer Worst Year In A Decade
The world’s central banks’ safety harness finally gave way and one by one the world’s markets started to plunge.
Global stock markets lost almost $12 trillion in 2018 – the largest market cap loss since 2008 (and second largest in history)…
In fact, from its highs in January, world market cap is down $20 trillion.
As global central banks ‘allowed’ their balance sheets to contract on an annual basis for the first time ever…
But they said “It could never happen again” … fortress balance sheets and all, and yet global systemically important banks collapsed in 2008.
No corner of the world escaped unscathed.
Asia Ex Japan was the worst year since 2008 (and 2nd worst on record)
This was China’s 2nd worst year on record (2nd to 2008).
All the major Chinese markets were a mess.
The only major Asian market in the black for the year was India, where the BSE was ahead by almost 6 percent.
Europe was a bloodbath with the Stoxx 600 down 13% in 2018, its biggest loss since 2008.
And as Project Fear kicked in, The FTSE 100 ended 2018 down 12% – also its worst year since 2008 – but Germany’s export-heavy DAX was even worse.
US equities looked unstoppable… until Humpty Dumpty fell off the wall.
… and December was a bloodbath (even with the last few days’ manic bounce):
And so, this is still the worst December for US stocks since The Great Depression.
Gold and bonds outperformed notably in December as stocks plunged.
But on the year, only the dollar survived unscathed…
This is the first time since the 1970s that the S&P 500 has slumped so much when earnings growth was more than 10%.
So what should retail investors do? Well don’t turn to the hedgies – Long-short equity fund performance in December is the worst since August 2011.
Bonds were all underwater on the year – despite a huge compression in yields over the last two months – with the short-end the worst performer on a yield basis.
In fact this is the Treasury market’s biggest monthly rally since Jun 2016.
And the yield curve collapsed further this year…(inverting in the 2s5s region)
And yields have a long way to fall if cyclical stocks are right.
While Treasuries were bid recently, corporate bonds were not… Junk bonds tumbled in December, for the worst month since Dec 2015.
And worst quarter for junk bonds since Q3 2015.
Investment Grade corporate bond prices suffered their worst yearly loss since at least 2002:
Meanwhile, the dollar rallied on the year to its best annual gain since 2015:
While all commodities ended the year lower, gold outperformed (and WTI did not):
Oil suffered its first annual decline since 2015, slumping more than 20 percent in a turbulent year that saw fears of supply scarcity turn to expectations of a surplus.
“We are most likely past the peak of this long economic uptrend,” said analysts at JBC Energy GmbH in Vienna.
While gold is down in 2018 in dollar terms, it appreciated against the yuan:
US Economic data was the most disappointing since 2008:
“Simply looking at the markets would suggest that the global economy is headed into recession,” said Robert Michele, chief investment officer and head of fixed income at J.P. Morgan Asset Management.
“However, while we agree the global economy is in a growth slowdown, we don’t see an impending recession,” he added, looking at the Fed to provide a policy cushion.
“Already, commentary out of the Fed suggests that it is nearing the end of a three-year journey to normalise policy.”
And the market agrees that The Fed will cut rates more than hike them from here on out…
The question is – will the Fed’s policy error reversal crash stocks further amid a total loss of confidence in central command once again?
Finally, we note with a glass of champagne inches away from our hands, this will not end well for bond bears and if bond shorts are squeezed – what happens to stocks from there?
The World’s Biggest Investors Paint A Gloomy Picture For 2019
As is usually the case after the holidays, inquiring minds turn their attention to how various assets will fare in the coming new year.
To answer this question, Bloomberg recently published a sample of opinions from top portfolio managers and strategists who shared their views on all asset classes heading into the new year. The common theme: stocks will be risky, volatility is back and returns across all asset classes could be “muted” in the new year.
There were some outliers: Jurrien Timmer of Fidelity Investments was the most bullish on stocks. He believes that earnings growth in the United States will slow to 5% to 7% in 2019. He also thinks that the Fed could raise rates once or twice more and that bonds look “alright” in this environment. Starting the year at what he calls a “reasonable” price to earnings ratio, he predicts that stocks may do better than they did in 2018.
“If you add it all up, it’s not a bad story for stocks — maybe not double-digits, but better,” he said, although Timmer’s optimism was certainly in the minority among his peers.
Rob Lovelace of Capital Group has tapped into the recent weakness at Apple as a microcosm of what to watch going into the new year. He believes that device companies that lack product diversity, like Samsung, could be dangerous to own in the new year. He also believes that it is time to be a stock picker instead of buying indices.
Kristina Hooper, the chief global market strategist at Invesco recommends emerging market equities in addition to tech stocks and global dividend paying stocks. She also likes commodities – “especially gold“. She believes investors should “sell or decrease” US equities.
Hooper told Bloomberg that her “base case is decelerating but solid growth globally, with the U.S. decelerating as well. I also expect tepid but positive global stock market returns. However, the ‘tails’ are getting fatter as risks, both positive and negative, increase. For example, a quick resolution of the trade war with China could push global growth higher and also push stock market returns higher – especially if the Fed become significantly more dovish. Conversely, an escalation of the trade war with China could put downward pressure on global economic growth and likely push stock markets lower as well – particularly if the Fed is less dovish.”
Meanwhile, PIMCO’s Dan Ivascyn believes that volatility will rise and credit spreads will widen – all while the yield curve flattens in the coming year. He believes these are indications of an economic downturn that’s coming within the next two years. He also believes that increasing cash to have powder for new opportunities – like UK financials after they were crushed on Brexit fears – is a good idea.
“We are beginning to see a few select opportunities around credit, but we remain concerned about credit in general,” he said.
PIMCO’s nemesis, bond king Jeff Gundlach, suggested simply avoiding United States stocks and corporate debt altogether, as well as steering clear of long term treasuries (just in case there is any wonder he is feuding with Jim Cramer). Gundlach believes that the best bets for 2019 are in high-quality, low duration, low volatility bond funds.
During his December 17 interview on CNBC he stated: “This is a capital preservation environment. Unsexy as this sounds, a short-term, high-quality bond portfolio is probably the best way to go as you head into 2019.”
So sad that appearances on CNBC are now a thing of the past. It was great while it lasted. Blame it on Cramer. We’ll be on Fox Business.
— Jeffrey Gundlach (@TruthGundlach) December 21, 2018
Richard Turnill who works for the world’s biggest asset manager BlackRock, said that quality should be the focus in equities: look for companies with good cash flow, sustainable growth and clean balance sheets. He also conceded that a slowdown was inevitable, stating: “We see a slowdown in global growth and corporate earnings in 2019 with the U.S. economy entering a late-cycle phase”.
Meanwhile, Bill Stromberg of T. Rowe Price believes that emerging markets could be the ticket for 2019. “Emerging market stocks are starting out a lot cheaper and have a higher dividend yield. You could get 8 percent to 10 percent returns over the next 10 years. If the U.S. dollar weakens you could get more as a U.S. investor,” he stated.
Joseph Davis of Vanguard Group also says to “expect an economic slowdown”. He believes growth in the U.S. will slow to about 2% and he puts his outlook for equities over the next decade in the 3% to 5% range.
The dour sentiment was shared by the CIO of equities and multi-asset strategies at Schwab, Omar Aguilar. He says to sell small cap equities and securities with high debt ratios. Instead, he also suggests emerging markets due to their relative valuations.
“Decelerating global economic growth, increased attention to trade-related development — particularly with China — tighter monetary policies, reduced liquidity, and a mean reversion toward historically average volatility levels are likely to set the tone for equity markets in 2019,” Aguilar said.
The one underlying theme here is that these picks are far less bullish across all asset classes heading into the new year than they were not only at the beginning of the year, but headed into most years during the past decade, which is to be expected at the tail end of the longest bull market on record. While many of these asset managers can sometimes “miss the boat” and their analysis can occasionally be backward looking in nature, the ubiquity of their widespread concern seems to mark a significant sentiment shift heading into the new year.
USWGO Brian D. Hill fires lawyer, and forced to take Polygraph; Law Enforcement Whistleblower reports Brian’s set up on child porn
Note: Posted by a anonymous family member of Brian D. Hill. His family controls his accounts until Brian is off of Supervised Release where he is prohibited from using the Internet no thanks to the corrupt politician and corrupt police that was apart of framing him.
Originally by Sheila
Originally sourced from Planet Infowars
Originally posted around February 27, 2015
Brian D. Hill(left), Alex Jones(Center), and Stewart Rhodes(right)
Today Brian D. Hill, the former USWGO Alternative News reporter and Founder, has informed me that a serious of events has just happened which he wished to inform the General public about including the alternative media. First of all Brian has fired his Appellate case lawyer Mark A. Jones of the ‘Bell, Davis, and Pitt’ law firm in Winston Salem, NC. He also gives various reasons as to why he has kicked his attorney out of his case and as to why he is proceeding Pro Se.In addition to that Brian has filed a Pro Se Motion to Strike Doc. 14 which was filed by his Appellate lawyer Mark. A. Jones for not representing his response to the Government’s Motion to Dismiss Appeal.
He is also being forced under his Probation Officer to SUBMIT to a Polygraph exam even when there is evidence that Brian will give false positives in the lie detector test due to his Autism and Generalized Anxiety Disorder which will cause legal repercussions on him under Supervised Release which will land Brian back in Jail in North Carolina where he will lose weight until he is dead, I am serious here. Brian stated to his PO that he will plead the Fifth Amendment to the United States Constitution for every question asked so that false lies won’t show up in the Polygraph when Brian attempts to tell the truth. His PO threatened him with consequences if Brian even dares to plead the fifth to every question asked during the exam. Brian changed his mind after being coerced by his PO and made a statement to her that Brian will give false statements(of guilt) when he is forced under Probation to testify against his will. The PO did not care and so Brian contacted the Polygraph examiner Ingram in Danville, VA. He explained to him that he needed to reschedule the Polygraph exam(assuming the test was going to be soon but was a misunderstanding) because his grandpa had Pneumonia and that his whole family had to be there in case Brian made a false admission of guilt or that a false positive was created throughout the lie detector test so that his family can explain under Affidavit that Brian wasn’t lying on this or that during the exam due to his Mild Autism(Autism Spectrum Disorder). Ingram called him back basically refusing to administer the Polygraph test on Brian(likely due to him admitting he has Autism and that it can affect the Polygraph) and wanted him to call his Probation Officer informing her that Ingram will not conduct the testing. This is the first refusal on the experts part to test Brian in a Polygraph exam. The PO will likely attempt to find another to still attempt to force Brian to make false lies(false positives) so that Probation will have a grand excuse to revoke his Supervised Release to throw Brian in Federal Prison. Likely apart of a plot by the U.S. Attorney and Mayodan Police Department(the same ones that sent Brian child porn which I mention in earlier article) to destroy Brian’s Appeal in the 4th Circuit Court of Appeals.
A claimed Law Enforcement Whistleblower sent an email to Brian David Hill’s cell phone as a Multimedia Text Message(MMS) and to a pile of FBI(according to Susan Basko) with information as to Brian’s set up on child pornography, explaining that he had no choice and was following orders of the commanding officer or agent, and offered evidence in attachments to the email to help clear Brian’s name. That Whistleblower has not yet been identified and may actually be involved somehow with the Mayodan Police Department. According to a cross examination between Brian’s statement under Declaration and the statement by the Whistleblower they both mention that it was a 160GB Hard Disk Drive and that the model number was HTS542516K9SAOO. Both made statements that the content was child pornography and that it had something to do with the Mayodan Police Department. There is no mistake that the Whistleblower has a direct connection with somebody that is involved in Brian’s criminal case and/or the criminal investigation that was conducted in North Carolina.
Brian explained to me in two text messages why he is proceeding Pro Se and firing his attorney Mark Jones. These statements are exclusive to Planet Infowars and Liveleak which allow me to publish articles that expose the things going on during his ongoing criminal Appeal.
Brian’s response on Mark Jones issue: “My lawyer Mark Jones was a disappointment. I waited for 1-2 weeks for a phone call or letter to come from Mark and nothing. Right after I told him about Mayodan Police attempting to send me child porn in that evidence box, that lawyer has never spoken to me again. Then started to file a inappropriate response which would wreck my criminal Appeal. Then later I discovered after I decided to fire him that he had been a law clerk to Chief Federal Judge William L. Osteen Jr. the same Judge that denied my Motion to Extend the Time to file the Notice of Appeal. I have a very good reason to believe that Mark is protecting the interests of Judge Osteen and not representing me as a attorney should be. I wonder about the public defenders and court appointed attorneys from the CJA Panel. Every CJA Panel attorney seems to want me to stick with my guilty plea or on purposely doesn’t do their freaking job. I DEMAND A REFORM OF THE CRIMINAL JUSTICE ACT!,” “That is all I have to say in text.”
Now CJA stands for the Criminal Justice Act which became law which was what started the whole court appointed attorneys. I will likely conduct research on the matter but am attempting to publish this article in a speedy manner so will skip on the explanation of the CJA law. I did however do a bit of research into Attorney Mark Jone’s connection to Greensboro, NC Chief U.S. District Court Judge William L. Osteen Jr. the same Judge that convicted Brian and accepted his guilty plea. According to Mark’s own profile on the law firm he works for, he was a law clerk for the Honorable Judge William L. Osteen Junior. A law clerk is not the same as the clerk of the court. A law clerk personally conducts legal research and aids in the Federal Judge’s legal opinions for criminal cases. So Mark has personally worked with the exact same Federal Judge that Brian has attempted to overrule through the Appellate process. Mark’s actions in Brian’s criminal case(15-4057 Appeal, 1:13-cr-435-1 District Court case in Middle District of N.C.) and connections to the exact same Judge Brian is Appealing shines great suspicion on his Appellate counsel. Then of course Mark was also responsible for Brian receiving child porn by the hands of the Mayodan Police Department earlier in the month. Mark didn’t even screen the hard drive that came in the Evidence Box.
“Jones served as Assistant United States Attorney for the Western District of North Carolina (2008-2011), where he worked in the Criminal-trial and Appellate sections. His prior experience includes service as Law Clerk to the Honorable William L. Osteen, Jr., U. S. District Court Judge for the Middle District of North Carolina in Greensboro, NC (2007-2008), to the Honorable William L. Osteen, Sr., U. S. District Court for the Middle District of North Carolina (2007), and to the Honor able Kathleen H. MacKay, Virginia Circuit Judge.” – Sourced from Bell, Davis, and Pitt.
Then according to my legal research into other Appeal cases that deal with Appealing decisions made by Chief Judge Osteen Jr. with being represented by Mark A. Jones, all decisions I could find using Google search were all affirmations of the U.S. District Court convictions. In United States of America v. Angel Santillan, Appeal panel ruled that “Accordingly, we affirm the district court’s judgment.” In United states of America v. Kyjahre Hasan Riley, Appeal panel ruled that “In accordance with Anders, we have reviewed the entire record and have found no meritorious issues for appeal. We therefore affirm the district court’s judgment.” In the last Appeal Court opinion case I could find, in United States of America v. Angel Medel Lorenzo, the Appeal panel ruled that “In accordance with Anders, we have reviewed the record in this case and have found no meritorious issues for appeal. We therefore affirm Lorenzo’s convictions and sentence.” Three different Appellate Court reviews which are easy to find in Google, which have Mark A. Jones as Appellate Counsel all result in affirmation of the U.S. District Court Judgments. It will likely be the same result in Brian’s case had he not filed a Motion to Proceed Pro Se. It appears a possible bias or conflict of interest has risen under Mark.
Brian’s response on proceeding Pro Se: “Yes I am, Sheila. Unless I get a private attorney that wishes to represent me Pro Bono, I plan on proceeding Pro Se throughout my criminal Appeal. I have some people helping me out but won’t mention names out of fear of threats against them by the perpetrators. I am confident I can win both Appeals without a court appointed lawyer. One lawyer has taken a specific interest in representing me in the event I succeed in both Appeals to take my criminal case back to the stage of a Jury Trial to try my case again, and this time I plan on NOT taking the guilty plea. I will risk my life in a gamble to overturn my conviction. That is what Brian David Hill of USWGO Alternative News is going to do. Infowars is not covering my criminal case but hopefully they will once I am acquitted.”
Now Brian plans on working Pro Se for both his two Appeal proceedings unless a private lawyer wishes to aid as Brian’s Legal Counsel on a Pro Bono basis. Infowars and Prisonplanet have not covered Brian’s criminal case with exception to Planet Infowars as this is a sensitive criminal case due to it being the subject of child pornography, however Infowars may cover his case in the event that Brian is acquitted by a Jury. It is also likely that Polygraph examiners may refuse outright to proceed in forcing Brian against his will to take the Polygraph exam due to false positives and the negative legal consequences it will have in Brian’s entire life.
See the series of Articles on Brian’s criminal Appeal:
George Zimmerman released from jail on $150K bond
George Zimmerman released from jail on $ 150K bond 23 Apr 2012 George Zimmerman was released around midnight Sunday from a Florida county jail on $ 150,000 bail as he awaits his second-degree murder trial for fatally shooting Trayvon Martin. The neighborhood watch volunteer [alleged killer] was wearing a brown jacket and blue jeans and carrying a paper bag. He walked out following another man and didn’t look over at photographers gathered outside.
Arizona man arrested after rescuing and adopting drowning raccoon
When 57-year-old Stan Morris saw a raccoon drowning in the Colorado River, he decided to put his own health at risk by saving the struggling animal. Seven months later, the good-hearted deed landed Morris in jail.
Before his arrest, Morris and the raccoon he affectionately named “Sonny,” had developed quite a bond, according to the Associated Press. Morris told police he first looked online to see if it was against the law to keep a raccoon as a pet. When he didn’t find any information telling him otherwise, he decided to adopt Sonny.
Technically, it is legal to keep a raccoon as a pet in Arizona, but an owner must first obtain an exotic animal license or permit. Most states that do allow raccoon ownership recommend adopting one from a professional breeder.
[Editor’s note: Makes perfect sense, right? A man is walking around with a raccoon perched on their shoulder, not bothering anyone. Complaining or tattling is obviously the only course of action. This isn’t straight out of 1984, is it?]