Money Supply Drops, Last Time This Happened It Ended In A Disaster – Episode 1338

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Money Supply Drops Last Time This Happened, It Ended In A Disaster
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IMF executive board decides to give Greece a conditional loan but wants more austerity and a plan to reduce debt. Sales are plunging for GM, they are closing plants, laying off workers and discontinuing cars. Pensions are in trouble, many corporate pensions are underfunded and it is only going to get worse. The myth that there was cash on the side lines, is just that a myth, there is no more cash on the side lines.  The money supply has dropped and we have seen this back in 2008, this is an indicator that the economy is entering a recession. The central banks are panicking, once they announced that stimulus is ending the market took a dive, the central bank then backtracked on everything .Trump rolls back 800 Obama regulations. Trump’s attorney’s are probing Mueller’s teams to see how many gave campaign contributions to Clinton. FBI has turned over 7,000 emails from Weiner’s laptop to Judicial Watch. North Korea’s economy is booming. The BBC reports that US just issued a warning not to go to North Korea. Lavrov strikes back at Pompeo saying the US has no legal right to be in Syria. The Syrian opposition does not know what to do once the US stops supporting them. The US and Russia are working together in Syria and many other areas.

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Current News – 07.21.2017


IMF Executive Board decides on $1.8 billion conditional loan for Greece

  • The Executive Board of the International Monetary Fund (IMF) has reached an agreement on the provision of 1.6 billion euros ($1.8 billion) conditional loan to Greece,
  • The arrangement, which supports the authorities’ economic adjustment program, has been approved in principle, which means it will become effective only after the Fund receives specific and credible assurances from Greece’s European partners to ensure debt sustainability, and provided that Greece’s economic program remains on track, 
  • “As we have said many times, even with full program implementation, Greece will not be able to restore debt sustainability and needs further debt relief from its European partners,” Lagarde stated. “A debt strategy anchored in more realistic assumptions needs to be agreed.”


As Sales Plunge, GM Might Cancel Six Car Models

  • GM is getting whacked harder than any of the major automakers by the industry-wide plunge in car sales,   In the first half of 2017, GM’s car sales in the US plunged 19%, and in June 38%.
  • The rest of the industry (without GM) booked declines in car sales of “only” 10% in the first half and 9% in June.
  • GM is losing ground in the bitter industry-wide reality of dropping car sales. Inventory is piling up on GM dealer lots. At the end of June, some car models exceeded a catastrophic 180 days’ supply. GM has already cut production. There have been layoffs. Plants have been temporarily shut down, and entire shifts have been eliminated. But it hasn’t been enough.
  • Now comes the next step: Ending production entirely of some models, shuttering plants for good or converting them to making trucks, and fretting about jobs. And that’s already being discussed between the UAW and GM, according to UAW president Dennis Williams.
  • Six passenger cars are currently under review at GM and might be cancelled after the 2020 model year Chevrolet Volt (a hybrid, not to be confused with the Bolt, an EV), Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala, and Chevrolet Sonic.
  • GM’s Hamtramck plant in Detroit, which builds Chevrolet Volt, Buick LaCrosse, Cadillac CT6, Chevrolet Impala – all four them in the list above of cars potentially on the chopping block – is a sitting duck.   


Here Are America’s Most Underfunded Corporate Pensions 

  • We spend a lot of time talking about the public pension crisis because, well, it’s a massive $5 – $8 trillion dollar overhang on the economy and one which will undoubtedly result in some heartache for investors at some point in the future.  Unfortunately, there are some problems that are too large for even U.S. taxpayers to fix
  •  as of the end of 2016 over 90% of the top 200 corporate pensions in the S&P were unfunded to the tune of $382 billion.
  • Here’s a look at the funded status of the top 20:


  •     February was a bad month for Larry Burruel and thousands of other retired Ohio iron workers. His monthly take-home pension was cut by more than half from $3,700 to $1,600.


No More “Cash On The Sidelines”: Private Client Cash Levels Drop To Record Low 

  • One can finally put all references to “cash on the sidelines” in the trash can,  , private client cash – i.e., high net worth individuals, or those who still allocate capital to single-stocks and ETFs on a discretionary basis (unlike the broader US public which has long ago given up on the stock market), is now at a record low, taking out the cash levels observed in the period just prior to the last market peak in 2007: “GWIM cash allocation % AUM falls to all-time low of 10.4%.”



Money Supply Growth Drops To Lowest Since Lehman

  • Growth in the supply of US dollars fell again in May, this time to a 105-month low of 5.4 percent. The last time the money supply grew at a smaller rate was during September 2008 — at a rate of 5.2 percent.
  • The money-supply metric used here — an “Austrian money supply” measure — is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure than M2.
  • The “Austrian” measure of the money supply differs from M2 in that it includes treasury deposits at the Fed (and excludes short time deposits, traveler’s checks, and retail money funds). 
  • M2 growth also slowed in May, falling to 5.6 percent, a 20-month low.
  • Money supply growth can often be a helpful measure of economic activity. During periods of economic boom, money supply tends to grow quickly as banks make more loans. Recessions, on the other hand, tend to be preceded by periods of falling money-supply growth.
  • Thanks to the intervention of central banks, of course, money supply growth in recent decades has never gone into negative territory.
  •  significant dips in growth rates show up in years prior to a economic bust or financial crisis. 
  •   Loan growth has not been this weak since April of 2011, in the wake of the last financial crisis.  
  • We find similar trends in real estate loans and in consumer loans, 


What are Central Bankers so Terrified of?

  • Central Bankers are absolutely terrified.
  • In the last month, both Fed President Janet Yellen and ECB President Mario Draghi have issued somewhat hawkish statements,only to turn around within 48 hours and walk back their comments.
  •  First was ECB President Mario Draghi, with claims that the ECB was considering gradually removing its stimulus programs.
  • European markets dived in response to this.

  • So Draghi sent his Number 2 guy on a PR campaign to assuage the markets that Draghi’s statements were being “misinterpreted.”
  • Then came Janet Yellen, suggesting that the Fed would be engaging in multiple more rate hikes and shrinking its balance sheet this year… only to turn around a few days later and deliver some of the most dovish testimony to Congress in Fed Chair history.
  • Yellen completely contradicted all of her earlier statements, claiming that the Fed was just about done with its rate hikes AND that it would not use its Balance Sheet reduction to drain liquidity from the system. 



Trump Eliminates More Than 800 Obama Regulations

  • 16 regs removed for every new rule introduced
  • The Trump administration has stopped over 800 regulations proposed under former president Barack Obama, according to a new White House report.
  • Trump halted $181 billion worth of Obama administration regulations on his first day in office by issuing a regulatory moratorium. Additionally, the administration and Congress have saved at least $60 billion in regulatory costs by rolling back Obama rules through the Congressional Review Act.


Trump Preparing Counteroffensive; Begins Investigating Mueller’s Team For Conflicts

 President Trump’s lawyers and aides are scouring the professional and political backgrounds of investigators hired by the special counsel Robert S. Mueller III, looking for conflicts of interest they could use to discredit the investigation — or even build a case to fire Mr. Mueller or get some members of his team recused, according to three people with knowledge of the research effort.

The search for potential conflicts is wide-ranging. It includes scrutinizing donations to Democratic candidates, investigators’ past clients and Mr. Mueller’s relationship with James B. Comey, whose firing as F.B.I. director is part of the special counsel’s investigation.

  • To seek a recusal, Trump’s lawyers can argue their case to Mueller or his boss, Deputy Attorney General Rod Rosenstein.  
  •  several of Mueller’s early, notable hires have all been contributors to Hillary’s and/or Obama’s previous campaigns and Jeannie Rhee actually represented the Clinton Foundation.
 Michael Dreeben, who serves as the Justice Department’s deputy solicitor general, is working on a part-time basis for Mueller, 

Dreeben donated $1,000 dollars to Hillary Clinton’s Senate political action committee (PAC),

Jeannie Rhee, another member of Mueller’s team, donated $5,400 to Hillary Clinton’s prsidential campaignPAC Hillary for America.

Andrew Weissmann, who serves in a top post within the Justice Department’s fraud practice, is the most senior lawyer on the special counsel team,  he donated six times to political action committees for Obama in 2008 for a total of $4,700.

James Quarles, who served as an assistant special prosecutor on the Watergate Special Prosecution Forcehas donated to over a dozen Democratic PACs since the late 1980s.


FBI Turns Over 7,000 Emails From Weiner’s Laptop In Clinton Case

  •  , conservative watchdog group Judicial Watch and State Department representatives appeared in federal court in Washington, D.C., over the group’s FOIA suit seeking Clinton emails from her tenure at the State Department. During the hearing it was revealed that 7,000 new documents were turned over from Weiner’s notebook computer, the same computer which prompted James Comey to restart the FBI probe shortly before last year’s presidential election. The stack of emails is also expected to contain some emails sent by Weiner’s estranged wife, Clinton aide Huma Abedin.
  •  Judicial Watch President Tom said that they expect to begin receiving those documents in three months, once the State Department determines whether the Weiner documents are government or personal records.  



N Korean Economy Shows Record-High Growth Amid Sanctions, Int’l Pressure

  • Despite international sanctions North Korean economy increased by 3.9 percent in 2016, showing a record-high growth in 17 years, South Korea’s Bank of Korea (BOK) said in a report Friday. Pyongyang has never disclosed any information on its economy, all the statistics is gathered by South Korean intelligence services.


US Urges All Nationals In North Korea To “Depart Immediately”, Bans Tourists From Visiting

  •  BBC reported. “After the 30-day grace period any US national that travels to North Korea will have their passport invalidated by their government.” The ban comes one month after US student Otto Warmbier died following his imprisonment by the Kim regime.
  •   “It remains to be seen what the exact text is, but the indication is it’s just a straight up ban on Americans going.”  


Lavrov Voices Russia’s Opposition to Regime Change in North Korea

  • Russia does not believe in regime changes anywhere in the world, only irresponsible politicians could consider such turnout of events regarding North Korea,  


Trump: More US Troops Might Not Be Needed in Afghanistan

  •  President Trump gave the impression that the US might hold off on any further escalations of the Afghan War, saying that he believes “we’re doing very well against ISIS” and that might have the US waiting longer on deciding troop levels.


Lavrov Strikes Back at CIA’s Pompeo, Questions Legality of US Bases in Syria

  • There is no legal basis for US military bases in Syria, Russian Foreign Minister Sergei Lavrov said  Responding to CIA Director Mike Pompeo’s comments Thursday, claiming that the Russian presence in Syria is due in part to Moscow’s wish to “stick it” to the US, Lavrov pointed out that he had read there are 10 US bases in Syria.
  • “The United States does not advertise its bases very much, and the fact that these bases do not have a legal basis is also obvious to all,” Lavrov 
  • “It turns out that, by and large, Mr. Pompeo wants the same thing as us in Syria, only several times more. One more big difference: we do not hide our two bases, they are created and operate on the basis of intergovernmental agreements, and their task is to assist in the fight against terrorists,” Lavrov said.


As Syria Rebels Learn from Media the CIA Cut Them Off, Al Qaeda Goes on the Offensive

  • As moderate rebel groups in Syria tried to digest the news that the U.S. will soon cease all covert support for them— 
  •  American troops on the ground have been put at risk by Turkish reports of their numbers and their precise whereabouts. Now the very existence of moderate local forces backed by the U.S. hangs in the balance.
  • Some 15,000-plus rebel troops in northern Syria have been receiving CIA support for the past four years   


US State Department spokeswoman Heather Nauert: Russia and US beginning strategic stability dialogue

  •  the State Department official has confirmedRussia and the United States are set to launch a dialogue on strategic stability involving both ministries in charge of foreign policy and other related agencies,  .The July 17 round of talks in Washington aimed at eliminating various troublesome issues in bilateral ties was held between Russian Deputy Foreign Minister Sergey Ryabkov and US Under Secretary of State for Political Affairs Thomas Shannon.After the meeting, the US State Department released a statement mentioning the talks on strategic stability and convening a new meeting of the Bilateral Consultative Commission (BCC) overseeing the implementation of the New Start Treaty.