Money & Economics

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mat200 said:
100% it seems, as that is the news I am seeing also .. Liquidity Crisis ( not enough US Dollars in the system, which is to be expected as credit squeezes and we reduce debt )
Click to expand...


FYI - just in case this gets pay walled .. ( I want to read it later .. )

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JPMorgan Responds To The Fed: There Is A Liquidity Crisis Right Now
Tyler Durden's Photo
by Tyler Durden
Saturday, Apr 12, 2025 - 04:16 AM
Earlier this morning Apollo's Torsten Slok laid out the following three reasons why bond yields are soaring:

With the yen, euro, and Canadian dollar strengthening at the same time, this could be foreigners selling US Treasuries.

With the VIX at elevated levels around 50, there is a lot of hedging activity going on, and it could, therefore, be risk reduction among large asset managers managing rates, credit, and equities.

With almost $1 trillion in the basis trade, it could be an unwinding of the basis trade among levered hedge funds.

We have discussed 2, and especially 3, quite extensively before, and while 1 is certainly realistic we will have to wait for counterparty data from China (and everyone knows how credible Chinese data is) to get confirmation. But, we agree with Slok that selling by foreign powers, especially China, is likely. It certainly is likely on Friday when, as the chart below shows, the move in the swap spread (i.e., basis unwind) is insufficient to explain the move higher in yields, which means at least part of the move can be attributed to China selling.



Which brings up an interesting point: we already discussed how China's central bank, the PBOC (which of course is joined at the hip with the CCP) is doing everything in its power to bolster Beijing in its trade war, be it propping up the market by purchasing record amounts of ETFs/stocks, to making sure the yuan doesn't crater, and is actively buying the currency (through intermediary banks) while selling the dollar. And, by extension, China is securing the funds it needs to support the currency by selling US treasuries it holds in its reserve, whether domestically or in Belgium via Euroclear... where it appears total TSY holdings are now where they were just before China devalued the yuan in 2015 and liquidated its US paper to contain the subsequent yuan collapse. Expect a similar collapse if and when China devalues this time as Beijing will again scramble to avoid a much worse liquidation in the yuan.



Why does all of that matter?

Simple: at least on China's side, it is clear that the central bank is doing everything in its power to prop up the government in its trade war with the US and give the impression that China is not getting crushed by the trade war through such primary indicators as the stock market and the currency. We discussed this two days ago in "Beijing Unleashes Record "Plunge Protection" Buying To Prop Up Stocks, Avoid Signaling Weakness In Trade War."

Surprisingly, the Fed has so far refused to even consider doing the same on the US side. Quite the contrary, as NY Fed president John Williams said...

*FED'S WILLIAMS SAYS CURRENT RATE STANCE REMAINS APPROPRIATE
Which is amusing considering the Fed was "jumbo" cutting last September when financial conditions were massively looser and when forward inflation expectations were much higher than they are now.



So why is the Fed not cutting now? This is also simple: the Fed, which has become extremely political - recall former NY Fed president Bill Dudley penned an op-ed during the peak of the first Trump trade war with China - in which he urged his former Fed colleagues not to stimulate and to crash the economy, in order to destroy Trump (no we aren't joking).


Source: Bloomberg
But an unconditional denial of easing to Trump would be too obvious (especially one which is based on something as flimsy as UMichigan inflation expectations, the very same thing that Fed Chair Powell said during his last FOMC meeting to completely ignore), especially if and when the market went haywire and people start asking questions why the Fed is refusing to move as things start to break (like the basis trade for example).

Which brings us to escape clause: moments ago, the FT published an interview with Boston Fed president Susan Collins in which she said that "The Federal Reserve “would absolutely be prepared” to deploy its firepower to stabilise financial markets should conditions become disorderly, according to one of the central bank’s top officials" adding that the Fed “does have tools to address concerns about market functioning or liquidity should they arise”.

Great.... but - there is of course a but - Collins also said “markets are continuing to function well” and that “we’re not seeing liquidity concerns overall”.

In other words, the Fed has a liquidity put... there is just no liquidity crisis.

Only - even if one ignores the blow up of the basis trade which as we explained previously has soaked up all the market's available liquidity - there is a liquidity crisis according to JPMorgan.

Below we excerpt from a note published this morning by JPMorgan's Market Intel team, which quotes trader Marissa Gitler, in which she said that liquidity is now gone and that what happens next could be ugly.

While it’s important to take a fundamental stance on the macro environment, the declining liquidity picture is an important piece of the puzzle and it’s worth flagging. To put statistics around it: Top-deck bid-ask for ESM5 and TYM5 are both roughly -80% worse than the 20d market average. These are historically two of the most liquid contracts in global macro markets. The top-deck in UX1 is roughly -95% worse. There appears no recovery this morning either.

De-leveraging and deterioration of macro sentiment has morphed into a situation in which liquidity dynamics are now meaningfully impaired in liquid markets. The lack of liquidity could result in price moves that are outsized relative to the amount of flow that is actually going through. This is in BOTH directions – significant bounces can take place ‘on air’ while it could similarly lead to unruly market outcomes to the downside. This is important context as we head into risk events such as UST auctions, the FOMC Minutes, CPI, and, realistically, just every minute of the trading day now as we are subject to Tariff tape bombs.

She concludes as follows:

Equity turmoil has been fairly transparent via the selloff in indexes globally, but yesterday [April 8] the conversation rapidly flipped from equities back into the fixed income world as UST yields surged meaningfully led by the long end. It’s pretty impossible for anyone to predict where we go from here (myself included), but deterioration of the broader liquidity framework is never a great setup for risk markets.

So while the Fed may ignore warnings by entities - such as this website - that liquidity is gone, imagine a world where there is a full-blown funding crisis, banks are failing and the Fed is blamed for ignoring not just the all too clear signs, but also ignoring a warning from the largest US bank, JPMorgan.

That is not a world that Jerome Powell, no matter how much he wants to listen to Bill Dudley and crush Donald Trump, would want to be in.

More in the full JPMorgan n
 
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Last Gasp Of The Landfill Economy​

Last Gasp Of The Landfill Economy | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com
Click to expand...

Test from article, again in case it get's pay walled

Last Gasp Of The Landfill Economy
Tyler Durden's Photo
by Tyler Durden
Saturday, Apr 12, 2025 - 07:30 AM
Authored by Charles Hugh Smith via OfTwoMinds blog,

It seems we're supposed to mourn the last gasp of The Landfill Economy. Perhaps we should celebrate its demise.

Globalization's great gift wasn't low prices--it was the collapse of durability, transforming the global economy into a Landfill Economy of shoddy products made of low-cost components guaranteed to fail, poor quality control, planned obsolescence and accelerated product cycles--all hyper-profitable, all to the detriment of consumers and the planet.

Globalization also accelerated another hyper-profitable gambit: . Since all the products are now made with the same low-quality components, they all fail regardless of brand or price. The $2,000 refrigerator lasts no longer than the $700 fridge. Since the manufacturers and retailers all know the products are destined for the landfill by either design or default, warranties are uniformly one-year--and it's semi-miraculous if the consumer can find anyone to act on replacing or repairing the failed product even with the warranty.

In The Landfill Economy, Consumer choice is pure illusion. I'd like to buy once, cry once, so where is the option with a 10-year all parts and labor warranty? There isn't one, because nothing is durable--by design or default.

As a result, The Landfill Economy is fundamentally extortionist. We know this product will fail, you know this product will fail, and so here's our offer: buy a 3-year extended warranty for a hefty sum, because we've engineered the product to fail in four years.

If the product is digital, then even if it still functions, we'll force you to replace it via a new product cycle: we no longer support the old operating system, and since your device is out of date (heh) it can't load the new OS, and since all the apps now only function with the new OS, your device is useless.

The low price is also illusory, as we now have to buy four, five or ten products instead of one durable product. Appliances that once lasted 40 years now fail in 6 or 7 years if not sooner, so over the course of 40 years we have to buy five, six or seven appliances instead of one.

Note that these durable products weren't super-expensive commercial appliances; they were ordinary consumer appliances produced domestically in vast quantities.

Digitization is a key driver of The Landfill Economy, as cheap electronics all fail, and the product / vehicle / tool becomes a brick. Since inventory is an expense, it's been eliminated, so parts for older products are soon out of stock and unavailable.

In a few years, the firmware is no longer supported, and in a few decades, nobody will even know what coding was embedded in the chipset, but it won't matter anyway, because the chipsets are long gone.

Readers tell me vehicles are now wondrously reliable. Um, yeah, until they need to be repaired. Then the cost is higher than what I've paid for entire used cars.

A friend was showing us his 1957 Chevrolet Bel-Air. Unlike the stainless steal and low-quality chrome of today, the original parts are still untarnished. Since the entire vehicle is analog, parts can be scrounged or fabricated or swapped out with a similar set-up.

Does anyone seriously believe that a chipset-software-dependent vehicle today will still be running 68 years from now? Analog parts can be cast or welded; customized chipsets and firmware coding cannot. The original components will all be history.

Our friend recounted a very typical story about repairing his recent-model pickup truck. Since the engine was no longer responding to the accelerator, he borrowed a diagnostic computer (horribly expensive to maintain due to the extortionist monthly fee to keep the software upgraded) and came up with zip, zero, nada.

After swapping out the fuel pump at great expense and finding the problem persisted, he went online to YouTube University and found one video that explained the relay box from the accelerator to the engine didn't show up in the diagnostic codes, so the problem could not be identified.

The relay box cost $400, and likely consisted of components worth no more than a few dollars each. So after $1,000 in parts and his own labor, the problem was finally fixed. If this qualifies as "super-reliable and maintenance-free," then the diagnosis is obvious: mass delusion.

So now the status quo is desperate to maintain the global assembly lines feeding the hyper-profitable Landfill Economy. This may well be the last gasp of The Landfill Economy, as the supply chains of shoddy products designed to fail will break and consumers may well awaken to the high cost over time of an economy based on planned obsolescence, accelerated product cycles and extortionist illusions of choice.

Last week I bought an expensive portable solar panel manufactured in China from a local distributor. The U.S. brand distributing the product has a good reputation for quality. Of course the warranty is for one year.

The panel failed in less than a week: I smelled the unmistakable odor of an electrical short (insulation melting) and noticed the plastic rectangle that the output cord extended from was dimpled by high heat. The plastic part had no visible way to open it, and no visible way to replace it. So the entire panel is unrepairable.

(The local distributor had one in stock, so I was able to get a replacement. Here's hoping it has a non-defective set of components.)

It's doubtful anyone has the parts in stock, and it's also doubtful that it could be repaired even if one pried open the plastic casing to examine the melted bits. The parts are in one place--the factory that assembled the panel.

So this panel, manufactured at great expense of costly materials, will end up in the landfill after five days of service. And no, it won't be recycled, as there's no system to do so, and it doesn't make financial sense to even try.

Wow, isn't The Landfill Economy fantastic? Look how profitable it is, as consumers must constantly replace or repair at great expense everything that comes off the wonderful global supply chains. And since we worship "growth" and profits, The Landfill Economy is the ideal arrangement--for those making and selling all the stuff.

For the consumers--not so much, but who cares, since they have no choice but to keep buying shoddy products designed to fail.

Add the defective solar panel to the long list of other failed products in our household: the iPhone screen that failed, the washer that failed, the dryer that failed (which I was able to fix by replacing the motherboard, which only cost half the price of a new dryer with my "free" labor), the failed fridge, defective toaster from Walmart, shoes from Costco that fell apart in a few months, and the failed AC system in our 2016 Honda Civic. (Mention this to any mechanic and they quickly nod, "oh yeah, those all fail.")

All of this failure generates "growth" and profits, the two Grails every economist worships. Here's another load of "growth" going straight into the landfill.



It seems we're supposed to mourn the last gasp of The Landfill Economy. Perhaps we should celebrate its demise.

* * *
 
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mat200 said:
Test from article, again in case it get's pay walled

Last Gasp Of The Landfill Economy
Tyler Durden's Photo
by Tyler Durden
Saturday, Apr 12, 2025 - 07:30 AM
Authored by Charles Hugh Smith via OfTwoMinds blog,

It seems we're supposed to mourn the last gasp of The Landfill Economy. Perhaps we should celebrate its demise.

Globalization's great gift wasn't low prices--it was the collapse of durability, transforming the global economy into a Landfill Economy of shoddy products made of low-cost components guaranteed to fail, poor quality control, planned obsolescence and accelerated product cycles--all hyper-profitable, all to the detriment of consumers and the planet.

Globalization also accelerated another hyper-profitable gambit: . Since all the products are now made with the same low-quality components, they all fail regardless of brand or price. The $2,000 refrigerator lasts no longer than the $700 fridge. Since the manufacturers and retailers all know the products are destined for the landfill by either design or default, warranties are uniformly one-year--and it's semi-miraculous if the consumer can find anyone to act on replacing or repairing the failed product even with the warranty.

In The Landfill Economy, Consumer choice is pure illusion. I'd like to buy once, cry once, so where is the option with a 10-year all parts and labor warranty? There isn't one, because nothing is durable--by design or default.

As a result, The Landfill Economy is fundamentally extortionist. We know this product will fail, you know this product will fail, and so here's our offer: buy a 3-year extended warranty for a hefty sum, because we've engineered the product to fail in four years.

If the product is digital, then even if it still functions, we'll force you to replace it via a new product cycle: we no longer support the old operating system, and since your device is out of date (heh) it can't load the new OS, and since all the apps now only function with the new OS, your device is useless.

The low price is also illusory, as we now have to buy four, five or ten products instead of one durable product. Appliances that once lasted 40 years now fail in 6 or 7 years if not sooner, so over the course of 40 years we have to buy five, six or seven appliances instead of one.

Note that these durable products weren't super-expensive commercial appliances; they were ordinary consumer appliances produced domestically in vast quantities.

Digitization is a key driver of The Landfill Economy, as cheap electronics all fail, and the product / vehicle / tool becomes a brick. Since inventory is an expense, it's been eliminated, so parts for older products are soon out of stock and unavailable.

In a few years, the firmware is no longer supported, and in a few decades, nobody will even know what coding was embedded in the chipset, but it won't matter anyway, because the chipsets are long gone.

Readers tell me vehicles are now wondrously reliable. Um, yeah, until they need to be repaired. Then the cost is higher than what I've paid for entire used cars.

A friend was showing us his 1957 Chevrolet Bel-Air. Unlike the stainless steal and low-quality chrome of today, the original parts are still untarnished. Since the entire vehicle is analog, parts can be scrounged or fabricated or swapped out with a similar set-up.

Does anyone seriously believe that a chipset-software-dependent vehicle today will still be running 68 years from now? Analog parts can be cast or welded; customized chipsets and firmware coding cannot. The original components will all be history.

Our friend recounted a very typical story about repairing his recent-model pickup truck. Since the engine was no longer responding to the accelerator, he borrowed a diagnostic computer (horribly expensive to maintain due to the extortionist monthly fee to keep the software upgraded) and came up with zip, zero, nada.

After swapping out the fuel pump at great expense and finding the problem persisted, he went online to YouTube University and found one video that explained the relay box from the accelerator to the engine didn't show up in the diagnostic codes, so the problem could not be identified.

The relay box cost $400, and likely consisted of components worth no more than a few dollars each. So after $1,000 in parts and his own labor, the problem was finally fixed. If this qualifies as "super-reliable and maintenance-free," then the diagnosis is obvious: mass delusion.

So now the status quo is desperate to maintain the global assembly lines feeding the hyper-profitable Landfill Economy. This may well be the last gasp of The Landfill Economy, as the supply chains of shoddy products designed to fail will break and consumers may well awaken to the high cost over time of an economy based on planned obsolescence, accelerated product cycles and extortionist illusions of choice.

Last week I bought an expensive portable solar panel manufactured in China from a local distributor. The U.S. brand distributing the product has a good reputation for quality. Of course the warranty is for one year.

The panel failed in less than a week: I smelled the unmistakable odor of an electrical short (insulation melting) and noticed the plastic rectangle that the output cord extended from was dimpled by high heat. The plastic part had no visible way to open it, and no visible way to replace it. So the entire panel is unrepairable.

(The local distributor had one in stock, so I was able to get a replacement. Here's hoping it has a non-defective set of components.)

It's doubtful anyone has the parts in stock, and it's also doubtful that it could be repaired even if one pried open the plastic casing to examine the melted bits. The parts are in one place--the factory that assembled the panel.

So this panel, manufactured at great expense of costly materials, will end up in the landfill after five days of service. And no, it won't be recycled, as there's no system to do so, and it doesn't make financial sense to even try.

Wow, isn't The Landfill Economy fantastic? Look how profitable it is, as consumers must constantly replace or repair at great expense everything that comes off the wonderful global supply chains. And since we worship "growth" and profits, The Landfill Economy is the ideal arrangement--for those making and selling all the stuff.

For the consumers--not so much, but who cares, since they have no choice but to keep buying shoddy products designed to fail.

Add the defective solar panel to the long list of other failed products in our household: the iPhone screen that failed, the washer that failed, the dryer that failed (which I was able to fix by replacing the motherboard, which only cost half the price of a new dryer with my "free" labor), the failed fridge, defective toaster from Walmart, shoes from Costco that fell apart in a few months, and the failed AC system in our 2016 Honda Civic. (Mention this to any mechanic and they quickly nod, "oh yeah, those all fail.")

All of this failure generates "growth" and profits, the two Grails every economist worships. Here's another load of "growth" going straight into the landfill.



It seems we're supposed to mourn the last gasp of The Landfill Economy. Perhaps we should celebrate its demise.

* * *
Click to expand...
I'm still driving my 2002 Ford Exploder with 185K miles. I've always done the work myself which is mostly replacing worn out parts. Yeah, those old parts end up in the landfill. Not too happy about my entry level Samsung HDTV that only lasted 7 years but I hear that's pretty much the lifespan if you use it a lot. Still using it but it's got issuea and by years end it'll be replaced unless tariffs drive up the price then I'll just continue to watch it with the left side backlight pretty gone.

I think a lot of consumer items are replaced not because they are broken or useless but rather the American mentality of keeping up with the Jone's. But this mentality is what keeps our economy red hot compared to many countries. Car three years old, time to replace it....cell phone two years old then need to have the latest greatest...65" TV not as big as your neighbors' then get a 75 or 85" to show them who's boss.
 
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^^^^^
Agree

I ditched that mindset many years ago. Not because I couldn’t afford it, but because I got tired of “upgrading” to less quality for more money, and I wanted to be comfortable financially in retirement.

I even quit upgrading my guns. Used to be very active and into gun games and shooting sports. Sold or gave away a number of them. I still have more than I need and at least one for every anticipated situation. (Though I do need a home defense shotty ;)

My FJ is 11 years old and I hope to pass it down when I die. It just keeps running.
 
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Sybertiger said:
Great, buy American beer.
Click to expand...


Yes, like Bud ..

1744526838681.png

err ..

Modelo btw in the USA is handled by Constellation Brands :

Constellation Brands, Inc.
NYSE:STZ
 
coming in the future ..

1744567741177.png
 
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Something's clearly going on with Gold... I wish I knew and I wish I'd bought a LOT more. Feels like chasing it now...

American Gold is German Gold​

American Gold is German Gold | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com
 
Last edited:
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bigredfish said:
Something's clearly going on with Gold... I wish I know and I wish I'd bought a LOT more. Feels like chasing it now...

American Gold is German Gold​

American Gold is German Gold | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com
Click to expand...
Remember, a few years ago the Germans had their gold removed from the US.

www.mgsrefining.com

Germany Completes Repatriation of Gold Reserves Ahead of Schedule - Manhattan Gold & Silver

The German government expects to complete its plan to repatriate 674 tons 3 years ahead of schedule. Read on to learn about Germany’s gold reserves.
www.mgsrefining.com www.mgsrefining.com
 
Last edited:
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David L said:
Remember, a few years ago the Germans had their gold removed from the US.

www.mgsrefining.com

Germany Completes Repatriation of Gold Reserves Ahead of Schedule - Manhattan Gold & Silver

The German government expects to complete its plan to repatriate 674 tons 3 years ahead of schedule. Read on to learn about Germany’s gold reserves.
www.mgsrefining.com www.mgsrefining.com
Click to expand...

Read the article I posted. It outlines that,. It took the US 4 years to give it to them... the 1/2 of their gold holdings they asked for.

The article now expects them to ask for the other 1/2, and we're furiously importing Gold.

What does that tell you? Somethings not right
 
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bigredfish said:
Read the article I posted. It outlines that,. It took the US 4 years to give it to them... the 1/2 of their gold holdings they asked for.

The article now expects them to ask for the other 1/2, and we're furiously importing Gold.

What does that tell you? Somethings not right
Click to expand...

Wasn't DOGE going to audit Fort Knox a few weeks back?

What ever happened to that? I am assuming the same things that have happened with all the "arrests" from all the fraud that they have found......
 
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