On national television this morning, I shared what you already knew almost two weeks ago: The European economy is in big, and I mean real big, trouble. Over the past few weeks, I’ve laid out exactly how bad the economy in Europe is getting here, especially with how the European Central Bank is in dire circumstances dealing with the big scandals of Deutsche Bank, which you can read again here. Now see for yourself here how America will profit from Europe that made even Nigel Farage, the leader of the Brexit Party, chuckle… Click here to watch.
Articles About Wall Street
If you believe the definition of insanity, according to Albert Einstein it’s doing the same thing over and over and expecting different results, then you know the U.S. government is insane the way they let Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac run the mortgage market.
But you may not know the same GSE insanity that caused the 2008 financial crisis and the Great Recession turned into a government slush fund and that greed is making both politicians and the mortgage market even more insane.
The beginning of the newly restructured Deutsche Bank may end up like every other iteration of the old struggling Deutsche Bank.
That’s because the giant German lender and would-be Master of the Universe, sometimes known simply as DB, who just announced 18,000 more layoffs as it downsizes, again, may be charged criminally for its involvement in the global 1MDB scandal.
Depending on what charges the U.S. Justice Department may file, and how big a fine Deutsche Bank may have to pay, the European Central Bank (ECB) may have to lend DB more money to not end up where it really belongs, in the history books.
With the biggest number of bank layoffs since the bankruptcy of Lehman, and a 10-year $17 billion tab in fines for regulatory failures and technically criminal activity, DB’s woes are anything but over.
No, Deutsche Bank, Germany’s largest bank, hasn’t failed, as in going out of business and being shut down.
But it has failed in every other sense of the word.
What happened to Deutsche Bank is a warning.
It’s not a warning for how greedy bankers blow themselves up, though it is about that.
It’s not a warning against how easily compliance can be circumvented, though it is about that.
It’s not a warning of what one giant bank’s “failures” can do to banking across a country or Union, though it is about that.
For a short week last week, the long in the tooth bull market sure showed its “agelessness.”
Too bad there wasn’t any meaningful volume of capital inflows to warrant the records that were broken.
Then again, it was a holiday shortened week.
Still, as old as this bull is, the only thing that’s not killing it is the Federal Reserve’s mouth to mouth resuscitation efforts and the fact that it’s the MOST HATED and MISTRUSTED bull market in HISTORY.
And that means, what’s moving markets higher is all the sidelined money, like the money that didn’t come in last week, or the month before, or the quarter before.
It’s all there on the sidelines and waiting to come in or waiting to say “I told you so!”
The fact of the matter is, the Federal Reserve System, America’s so-called central bank, which by the way chose Federal as part of their name to imply they’re a department of the federal government (they’re not, they’re a private institution), chose to call themselves a “System” as opposed to a bank (because banks were hated and causing America’s boom-bust cycles at the time of the Fed’s creation), is ruining America.
As if the world’s central banks, especially America’s private central bank the Federal Reserve System, weren’t secretive enough, powerful enough, manipulative enough, and self-serving enough, along comes Facebook, creator of another central bank.
Yep, you heard me.
Facebook is creating a central bank, though I doubt they’ll ever admit it or call it that, to manage Libra.
Be afraid, be very afraid, if Facebook’s Libra cryptocurrency takes hold, because the central bank it’s setting up will be secretive, powerful, and manipulative, just like the Federal Reserve.
Money flows into stocks last week were muted across the board, with retail investors in equity mutual funds and ETFs decidedly on the sidelines ahead of the meeting Saturday between President Xi and President Trump.
The same wasn’t true for institutional money. Speculative bets on the long side increased towards the end of the week as big traders positioned themselves for good news.
Those bets look like they’re paying off already.
After a two-month layoff on trade talks, Xi and Trump agreed to get back to the table.
Pre-open today, Monday, July 1, 2019, futures across the board are all more than 1% higher.
That’s on the heels of a 2.2% gain overnight for the Shanghai Composite and a strong opening and early trading across European bourses.
The big gains likely today should start to bring a lot of the stockpiled money on the sidelines back into equities. Almost $40 billion came out of equity mutual funds and equity ETFs in the first quarter and the second quarter, with full data available soon, looked like more of the same.
Barring any out-of-left-field negative news, equities should see money pouring back in this week, definitely institutional flows, and a turnaround in retail inflows as sidelined investors see clearer sailing ahead.
The problem with cryptocurrencies is that they’re all pumped up with hot air.
Facebook’s Libra is the best example yet.
Even its name, taken from the zodiac, is based on the element of air.
Here’s what’s hot and what’s not about Libra and why it’s true to its element.
In Astrology air is the element that connects all other elements (earth, fire and water), even though it might seem less relevant, invisible as it is.
Facebook, with its constellation of 2.4 billion active users, wants Libra to be the connecting element, as in money, between buyers and sellers of everything up in cyberspace and down here on earth.
Towards that end, Facebook isn’t concocting Libra out of thin air, like, say, Bitcoin.
The regulators are coming! The regulators are coming!
For Facebook, Amazon, Google, and Apple, that is.
But they aren’t going to be the only casualties in brewing antitrust battles.
The whole market’s now in the line of fire.