To download the podcast – Right mouse click here (duration 23:41)
-There are no mistakes here. As the powers gauge the current system’s demise, and even encourage it, they have a number of avenues planned to extract as much wealth as possible before the force majeure.
-Currently, I estimate 2027 as the expiration date.
-SVB and its kind were planned to blow up, which gives the banking cartel an excuse to effectively reverse QT and inject trillions in fresh capital to consolidate the global wealth before the force majeure. In the past two weeks, the Fed has injected $750 billion to be used as its owners deem fit.
-Publicly reported real GDP growth should remain positive, since the GDP price deflator and CPI data are woefully underreported. Thus, regardless of what transpires in the economy, we shouldn’t contemplate recession.
-The objectives of the New World Order climb a wall of manufactured worry, and the alt-media and MSM are none the wiser. Things aren’t spinning out of control, but are coming together quite smoothly. There will be no turnaround and all the bridges are being burned behind us.
-Total balance sheet assets up $94.5 billion last week. They were up $297 billion the week before.
-Reserve Bank credit up $211 billion last week. It was up $143 billion the week before.
-Total assets and bank credit up about $750 billion the past two weeks.
-That money is not going to you and me. That is staying in the financial shell. We’re stuck paying higher interest rates while the recipients of that money begin their buying spree. Next up, stocks, farmland, ESG, sports teams, rental housing, factor of production for military use. Those without the assets will perish financially.
-It is now clear that SVB was planned and its management was packed with multicultural globalist lovers. It was a who’s who’s list of Democrat donors.
-The leaders around the globe, including those in Washington want a new system. We mean nothing to them. Think about what Lenin and Trotsky did to get their Soviet utopia. The ends justify the means. Many of these leaders would be amenable to an NKVD-type mechanism to enforce in a post-force majeure environment.
-To me, this new “crisis” signals that WWIII is the ultimate planned objective. This war will be the only way these globalists can convince Americans to give up their old ways and monetary system.
-The time to prepare is now! Get out of the blue areas and multiracial and multicultural jurisdictions. Those who have not trimmed their wicks, better hope for wormwood and the pre-trib rapture, because that’s the only thing that’s going to stop us from getting Elysium or a Stalin-type gulag system. Post force majeure; if you don’t take your injections and mark, you get the guillotine.
Schwab’s $7 Trillion Empire Built on Low Rates Is Showing Cracks
•Company faces pressure from bond losses and rising cash yields
•Executives say business is misunderstood, has enough liquidity
https://www.bloomberg.com/news/articles/2023-03-27/schwab-s-7-trillion-empire-built-on-low-rates-is-showing-cracks
(Bloomberg) — On the surface, Charles Schwab Corp. being swept up in the worst US banking crisis since 2008 makes little sense.
The firm, a half-century mainstay in the brokerage industry, isn’t overexposed to crypto like Silvergate Capital and Signature Bank, nor to startups and venture capital, which felled Silicon Valley Bank. Fewer than 20% of Schwab’s depositors exceed the FDIC’s $250,000 insurance cap, compared with about 90% at SVB. And with 34 million accounts, a phalanx of financial advisers and more than $7 trillion of assets across all of its businesses, it towers over regional institutions.
Yet the questions around Schwab won’t go away.
Rather, as the crisis drags on, investors are starting to unearth risks that have been hiding in plain sight. Unrealized losses on the Westlake, Texas-based firm’s balance sheet, loaded with long-dated bonds, ballooned to more than $29 billion last year. At the same time, higher interest rates are encouraging customers to move their cash out of certain accounts that underpin Schwab’s business and bolster its bottom line.
It’s another indication that the Federal Reserve’s rapid policy tightening caught the financial world flat-footed after decades of declining rates. Schwab shares have lost more than a quarter of their value since March 8, with some Wall Street analysts expecting earnings to suffer.
“In hindsight, they arguably could have had more prudent investment choices,” said Morningstar analyst Michael Wong.
Chief Executive Officer Walt Bettinger and the brokerage’s founder and namesake, billionaire Charles Schwab, have said the firm is healthy and prepared to withstand the broader turmoil.
The business is “misunderstood,” and it’s “misleading” to focus on paper losses, which the company may never have to incur, they said last week in a statement.
“There would be a sufficient amount of liquidity right there to cover if 100% of our bank’s deposits ran off,” Bettinger told the Wall Street Journal in an interview published Thursday, adding that the firm could borrow from the Federal Home Loan Bank and issue certificates of deposit to address any funding shortfall.
Through a representative, Bettinger declined to comment for this story. A Schwab spokesperson declined to comment beyond the Thursday statement.
The broader crisis showed signs of easing on Monday, after First Citizens BancShares Inc. agreed to buy SVB, buoying shares of financial firms including Schwab, which was up 3.1% at 2:29 p.m. in New York. The stock is still down 42% from its peak in February 2022, a month before the Fed started raising interest rates.
Unusual Operation
Schwab is unusual among peers. It operates one of the largest US banks, grafted on to the biggest publicly traded brokerage. Both divisions are sensitive to interest-rate fluctuations.
Like SVB, Schwab gobbled up longer-dated bonds at low yields in 2020 and 2021. That meant paper losses mounted in a short period as the Fed began boosting rates to stamp out inflation.
Three years ago, Schwab’s main bank had no unrealized losses on long-term debt that it planned to hold until maturity. By last March, the firm had more than $5 billion of such paper losses — a figure that climbed to more than $13 billion at year-end.
It shifted $189 billion of agency mortgage-backed securities from “available-for-sale” to “held-to-maturity” on its balance sheet last year, a move that effectively shields those unrealized losses from impacting stockholder equity.
“They basically saw higher interest rates coming,” Stephen Ryan, an accounting professor at New York University’s Stern School of Business, said in a phone interview. “They didn’t know how long they would last or how big they would be, but they protected the equity by making the transfer.”
The rules governing such balance sheet moves are stringent. It means Schwab plans to hold more than $150 billion worth of debt to maturity with a weighted-average yield of 1.74%. The lion’s share of the securities — $114 billion at the end of 2022 — won’t mature for more than a decade.
The benchmark 10-year Treasury yield now: 3.5%.
Cash Business
Schwab’s other headache from higher interest rates stems from cash.
At the root of Schwab’s income is idle client money. The firm “sweeps” cash deposits from brokerage accounts to its bank, where it can reinvest in higher-yielding products. The difference between what Schwab earns and what it pays out in interest to customers is its net interest income, among the most important metrics for a bank.
Net interest income accounted for 51% of Schwab’s total net revenue last year.
“Schwab’s counting on inertia,” said Allan Roth, founder of Wealth Logic, a financial-planning firm.
After a year of rapidly rising rates, there’s greater incentive to avoid being stagnant with cash. While many money-market funds are paying more than 4% interest, Schwab’s sweep accounts offer just 0.45%.
While it’s an open question just how much money customers could move away from its sweep vehicles, Schwab’s management acknowledged this behavior picked up last year.
“As a result of rapidly increasing short-term interest rates in 2022, the company saw an increase in the pace at which clients moved certain cash balances” into higher-yielding alternatives, Schwab said in its annual report. “As these outflows have continued, they have outpaced excess cash on hand and cash generated by maturities and pay-downs on our investment portfolios.”
In their statement, Bettinger and Schwab wrote that “client deposits may move, but they are not leaving the firm.”
FHLB Borrowing
To plug the gap, the brokerage’s banking units borrowed $12.4 billion from the FHLB system through the end of 2022, and had the capacity to borrow $68.6 billion, according to an annual report filed with regulators.
Schwab borrowed an additional $13 billion from the FHLB so far this year, the filing showed.
Analysts have been weighing these factors, with Barclays Plc and Morningstar lowering their price targets for Schwab shares in recent weeks.
Bettinger and Schwab said that the firm’s long history and conservatism will help customers navigate the current cycle, as they have for more than 50 years.
“We remain confident in our client-centric approach, the performance of our business, and the long-term stability of our company,” they wrote in last week’s statement. “We are different than other banks.”
I hope the brokers don’t bring trading fees back, or put a micro tax on each trade.
I knew the bank stocks were due for a bounce. I guess all these bank stocks could have offerings, but I assume not before a more decent recovery uptick. Like the SCHW exec statements above, others at SI, FRC, BK, BAC, WAL, FITB basically say the same thing on their end is okay, of course they would not release statements saying they were in trouble, never do that.
Today the start of a reversal? I’m wondering at this point why would they let the majority of banking apparatus continue to tank this year, as the force majore and cbdc implementation is a ways off. If that’s the case today’s uptick seems to be creating a FOMO.
I think SIVB is supposed to start trading again tomorrow, does it tank or pop. Which ever way it goes the others should follow. I’d say it depending on the opening tomorrow, it would be okay to start a short term position on a bank stock?
Someone asked me about AI usage in the media and in news articles. He wondered what I thought about how it would be used.
I know Dow Jones has been producing AI produced business articles for years. They’ve even claimed on the bottom of the article that it was auto written. I suspect that many of the articles we read in the hundreds of news outlets that are picked up on these news aggregator apps are already AI generated. Their algorithms are vetted and monitored by Arlington, McLean, and Fort Meade. Many of these articles could even be coming directly from the senior editor desks at Arlington VA.
Using AI generation allows the enemy of this military operation against us to more easily spread the desired propaganda messages in a well refined manner.
We’ve already been had by AI generated propaganda. There no longer needs to have anyone write any of this stuff.
Our enemy has just decided now is the good time to reveal to us that AI Auto writing is already here. Get used to it.
Artificial Intelligence and robots will take a lot of jobs that used to be done by people. Therefore there will be less jobs for people and they will be dependent on Big Brother’s handouts. By the way, if you want those handouts, then you must be up to date on the killer vaccines.
Also as people drop out of the workforce due to increasing health issues and deaths caused by the vaccines, they will be replaced by robots and artificial intelligence computers. The wage earner is a real loser in this beast system social order.
Be prepared. Turn to God in the Holy Bible. Jesus Christ is the only one that will get us through this. There is the heavenly kingdom beyond this earth.
Moving American business operations from China to Mexico strengthens all of North America, says report
https://phys.org/news/2023-03-american-business-china-mexico-north.amp
American businesses moving operations out of China and into Mexico would be economically beneficial for all of North America, according to a new report from Rice University’s Baker Institute for Public Policy.
The U.S. government has put considerable pressure on businesses to move out of China under each of the last two presidential administrations, wrote David Gantz, the Will Clayton Fellow in Trade and International Economics at the Baker Institute. He offered nearshoring—the outsourcing of production to companies in a nearby country—as an example of an effective tactic for strengthening North American economies because it lowers transportation costs and reduces delays.
“A container shipped from Shanghai to California or Mexico typically requires three weeks or more at sea, and shifting production from China to Vietnam or Malaysia doesn’t appreciably shorten transit times,” Gantz wrote. “In contrast, a truck-carried container dispatched from Monterrey in Mexico to most cities in the U.S. takes three days or fewer to arrive.”
Shortening the supply chains and substituting lower-cost Mexican labor for Chinese labor could reduce the cost of goods being sold in the U.S., which would benefit both American consumers and the global competitiveness of American exports, he explains. Such a shift would strengthen Mexico’s economy and labor market and materials suppliers in North America at the expense of China and other Asian countries, according to the report.
“For the United States in particular, there is an indirect benefit of more production of labor-intensive goods in Mexico instead of China: When investment in manufacturing facilities in Mexico creates new jobs for Mexican workers, undocumented immigration to the United States may be reduced,” he wrote.
More information: Report: https://www.bakerinstitute.org/research/will-new-chinese-investment-mexico-benefit-north-america
Provided by Rice University
I wonder if the pro-Russian alt-right (Rense and AJ) believe Putin here. Perhaps they will say Putin needs to lie to defend Russia.
_________
Russia, China are not creating military alliance, Putin says
https://www.reuters.com/world/putin-russia-china-not-creating-military-alliance-agencies-2023-03-26/
MOSCOW, March 26 (Reuters) – Russia and China are not creating a military alliance and the cooperation between their armed forces is “transparent”, President Vladimir Putin said in comments broadcast on Sunday, days after hosting Chinese leader Xi Jinping in the Kremlin.
Putin and Xi professed friendship and pledged closer ties, including in the military sphere, during their March 20-21 summit, as Russia struggles to make battlefield gains in what it calls a “special military operation” in Ukraine.
“We are not creating any military alliance with China,” Putin said on state television. “Yes, we have cooperation in the sphere of military-technical interaction. We are not hiding this.
“Everything is transparent, there is nothing secret.”
China and Russia signed a “no limits” partnership accord in early 2022, just weeks before Putin sent tens of thousands of troops into Ukraine. Beijing has refrained from criticising Putin’s decision and has touted a peace plan for Ukraine. The West has dismissed its proposals as a ploy to buy Putin more time to rebuild his forces in Ukraine.
Washington has said recently that it fears Beijing could arm Russia, something China denies.
In his televised remarks, Putin dismissed suggestions that Moscow’s increased ties with Beijing in areas such as energy and finance meant that Russia was becoming overly dependent on China, saying these were the views of “jealous people”.
“For decades many have desired turning China against the Soviet Union and Russia, and vice versa,” he said. “We understand the world we live in. We really value our mutual relations and the level they have reached in recent years.”
‘GLOBAL NATO’
Putin also accused the United States and NATO of seeking to build a new global “axis” that he said bore some resemblance to the World War Two alliance between Nazi Germany, fascist Italy and imperial Japan.
Putin named Australia, New Zealand and South Korea as being in line to join a “global NATO” and referenced a defence agreement signed by Britain and Japan earlier this year.
“That is why Western analysts… are talking about the West starting to build a new axis similar to the one created in the 1930s by the fascist regimes of Germany and Italy and militarist Japan,” he said.
NATO Secretary-General Jens Stoltenberg has visited Japan and South Korea this year, and stressed the importance of the Atlantic alliance working closely with partners in the Indo-Pacific region. He has also spoken of rising tensions between the West and China and urged more military support for Ukraine.
Putin has depicted Russia’s actions in Ukraine as a defensive pushback against an aggressive hostile West, drawing parallels with Moscow’s fight against invading Nazi German forces during World War Two.
Kyiv and its Western allies dismiss such suggestions as absurd, saying Moscow is seeking to seize territory and cripple Ukraine’s ability to function as an independent state.
Ukraine says there can be no peace talks until all Russian forces have withdrawn from its territory. Russia says Ukraine must accept the loss of swathes of territory that Moscow claims to have annexed.
Putin’s comments came a day after he announced that Russia would station tactical nuclear weapons in Belarus, in an apparent warning to NATO over its military support for Ukraine.
Despite rhetoric to the contrary, high level elements from within the Democrats, the liberal MSM, and blue area jurisdictions all labor to keep Trump relevant going into the 2024 elections. The Democrats know that a high profile Trump running for president will divide the Republican ticket, ensuring another far left Democrat presidential victory.
Defiant Trump at Texas Rally Predicts He’ll Survive Probes
•Former president staged first major 2024 rally in Waco, Texas
•Rally comes as Trump faces possible charges in hush-money case
https://www.bloomberg.com/news/articles/2023-03-26/defiant-trump-at-texas-rally-predicts-he-ll-survive-probes
Euro Rally Puts $1.10 in Sight With ECB Now Last Hawk Standing
•At same time, Lagarde’s stance spurs appetite for Treasuries
•March inflation data seen quickening will support both trades
https://www.bloomberg.com/news/articles/2023-03-26/euro-rally-puts-1-10-in-sight-with-ecb-now-last-hawk-standing#xj4y7vzkg
(Bloomberg) — Christine Lagarde is cementing her credentials as the biggest hawk among major central bankers despite the mounting banking stress, handing financial markets a reason to buy the euro and sell German bonds.
The president of the European Central Bank last week declared getting euro-area inflation back on target is “non-negotiable” and won’t involve “trade-offs,” days after she boosted interest rates by 50 basis points.
By contrast, Federal Reserve Chair Jerome Powell executed a smaller increase and said US rate setters had considered a pause, while Governor Andrew Bailey’s Bank of England delivered a 25 basis point hike and said inflation was likely to slow “sharply.”
The widening divergence in monetary policy sits at the heart of two trades favored by currency and bond investors.
For Citigroup Inc., Societe Generale SA and Deutsche Bank AG, Lagarde’s inflation drive provides a tailwind for the euro that could lift it to $1.10 in the coming months. Inflation printing hot this week may encourage the view that the ECB will still be hiking well after the Fed, adding to the euro’s gains.
Meanwhile, Kim Hutchinson, a rates portfolio manager at JPMorgan Asset Management, is “fearful” of holding German government debt compared with US Treasuries.
“The ECB probably gave us the most hawkish message among the central banks,” she said. “Lagarde still sounds very confident they’re going to deliver more if their baseline persists.”
Swap Gap Narrows
Rates on short-maturity European swaps are catching up with their US equivalents, narrowing the gap to as little as 70 basis points earlier in March. That level was last seen when the euro was above $1.21 in 2021, SocGen strategists said.
“We would expect to increase our long position to the euro over the next one to two months based on a more positive trend and bond yield differentials to the US declining,” said Van Luu, global head of currencies at Russell Investments. “The Fed is likely to stop the tightening cycle and then pivot before the ECB by a few months.”
As of Friday, money markets were pricing a rate cut from the Fed as soon as June, with the ECB seen hiking until September.
To be sure, the ECB’s relative hawkishness is partly a reflection of the fact that it only started lifting rates about four months after the Fed, and has the full brunt of higher energy prices to deal with. It may be only a matter of time until Europe shows significant signs of strain, according to Daniel Morris, chief market strategist at BNP Paribas Asset Management.
“If anything, the inflation dynamics are worse in the euro zone,” he said. “If you need a recession in the US to get inflation down, why not in Europe too?”
Euro-Zone Core Inflation Set for New Record in Test of ECB Nerve
For now, the European economy has proved far more resilient than predicted. Data last week showed the current account surplus increased, while the end of negative interest rates is luring capital back to Europe, providing a longer-term boost for the currency.
Core euro-zone inflation, which strips out food and energy, will rise to a fresh record of 5.8%, from 5.6%, in data this week, according to economists surveyed by Bloomberg. On Friday, Fed Bank of New York data showed a gauge of US inflation activity slowed to the lowest reading since 2021.
Further deterioration in sentiment toward Europe’s banks — after a fresh bout of market jitters focused on Deutsche Bank on Friday — could continue to weigh on the currency.
It may also prove a buying opportunity.
The euro fell to $1.0713, below the level Interbank traders had been watching to buy the common currency, according to two Europe-based FX traders. UBS Group AG has seen growing demand from “savvier, fast money” for options positions that would pay out if the currency strengthens, according to the head of FX strategy James Malcolm.
For Citigroup, the level of $1.10 per euro will be key. Once it’s breached, leveraged, real money and corporate accounts will be forced to chase the move higher, according to Vasileios Gkionakis, EMEA head of G10 strategy.
“A dovish Fed, an under-priced ECB as well as strong euro-area current account balance dynamics point to broad-based euro gains,” he wrote in a note. “EUR/USD upside is the simplest and purest expression of these market forces.”
This week:
Investors will be looking to a raft of inflation data across the euro-area this week, with Spanish and German figures due on Thursday ahead of those for the whole bloc on Friday.
In the UK, investors may be looking to gauge the health of the housing market with data on mortgage approvals and house prices due this week. Investors will hear from Bank of England Governor Andrew Bailey on Monday, and he will testify Tuesday on Silicon Valley Bank.
The BOE will also release its financial policy summary on Wednesday.
European Central Bank policymakers including ECB Executive Board member Isabel Schnabel, Bundesbank President Joachim Nagel and ECB Governing Council member Mario Centeno will also make appearances.
©2023 Bloomberg L.P.
I agree with you; it’s all been planned.
Thanks, Brother, for this and for all your advice.
God bless and Godspeed to you and yours! To the rest of the readers, “Keep the faith! Jesus indeed does save!”
He sure does. Tell that to his disciples back in the 1st century.
I also think SVB was planned so that we don’t trust smaller banks and we all funnel our money to the big ones for ‘safety’.
Indeed. The fewer the banks, the easier the consolidation process. Each means fewer banks and more consolidated capital.
Chris do you think the rush to put money in larger banks is a ploy to make the digital currency easier to implement. Also do you suggest , if a person has the money, to keep buying assets such as gold,rental properties and stocks. Also what about raw land in a rural setting. Thanks for your insight.
The banking industry consolidation has been ongoing for decades, however, things really began to be concentrated after the 2008 crisis. From there on it has been a furthering of the process. This latest crisis has taken it to the next level, and we are now faced with 6-7 banks controlling 85% of reserves.(from what I recall reading on MSM recently).
This consolidation process makes whatever the NWO engineers want to achieve that much easier for them, and this definitely includes the construction of any type of centralized digital currency. So, these crises are necessary for the banking cartel to reach their goals. From what we can see, this also includes the emergence of a CBDC.
I am taking my real estate sales proceeds and transferring it via a 1031 exchange into other rentals. So, if you have the money I would recommend strategic types of rentals. I have outlined my suggestions before.
Farmland, too, makes sense. Of course, prices have to make sense and I would run the numbers on your cap rates and IRRs.
I stay away from raw land. These cost money to hold and speculation should be based on income. However, real estate is local and if you know of raw land that holds good value, then take a look. I usually recommend land that can at least be leased to farmers or ranchers, etc.
As for stocks, I would hold and add over time. Passive holding of stocks in a portfolio is more a get rich slower style, so I would hold some, but try to make money from more direct ownership of an asset, which is why I generally recommend RE to the average person. But stocks are great for retirement plans; trading and taking cap gains deferred is nice.
Gold is always good, but I generally don’t speculate in its price. I own for personal protection from lawsuits and judgments, etc. It is money outside the system. Add over time. But keep in mind that physical gold can’t help us with leverage.
Why I say these things is because I look at what’s going on in Washington with fiscal spending, proposed budgets, as well as monetary policy. It’s hard to be a bear and go short or sit in the sidelines when both these money and spending spigots are fully open.
Just to reflect a little of the last trading tip. Some readers may still be in and holding or maybe not but CYN just made it ten days closing over $1. There should be a compliance PR about that this week, and could pop it at least 20% from whatever the price is when the news is released. The company had big losses in the last ER but finally earned a small amount of reported revenue. Oddly they hold a decent size cash reserve so not sure if they would have an offering.
SI(short squeeze potential), CS seem to be ready for an uptick, they have reached a low, and optimistic chatter is going on, even with the recent past terrible news. Really have to watch the volume and chart action on these if traded, take profits immediately and do not hold overnight.
I hold a small CYN position. Despite OUST bleeding, CYN is holding up. Many in that sector fading since the post-tax loss rebound of early this year. With OUST market cap dropping so much I don’t know how high CYN can go, but a market cap of 75mm could be doable. Right now it’s in the low 40mm range.