Market Talk – September 14, 2015
Asian equities traded on the heavy side today (Nikkei -1.63% and Shanghai -2.67%), and so followed Europe. However, the U.S. market appeared most nervous of all world indices, even though they ended the day only down -0.4%. Obviously, the Fed’s decision is the main topic of conversation with Retail Sales tomorrow only gaining a mention, but these were reasons given for the tightest trading range seen in such a long time. There is some talk that as we approach month end and the potential U.S. govt. shut down that this could be a bigger event than is currently being portrayed! So, with stocks already trading on soggy ground, any unexpected news this week could see even further weakness in stocks.
With all the talk of lower growth and concerns over whether the Fed should or should not raise rates in the global slowdown, oil prices continues to decline and so does the spread. TWI settled at $44 and the spread around $3. Gold did trade weaker early in the day but recovered to almost unchanged on the day.
The U.S. Treasury market provided no clues either, closing almost unchanged across the curve. We did see marginal weakness mid-session (providing a steeper curve) but all of that was lost by the close. As 10yrs at 2.18 that puts the TY/RX spread at +152BP.
Paris Theaters Debuting “The Forecaster” This Week
PARIS et Banlieue
Cinéma Espace Saint Michel
7, place St Michel
75005 Paris
A partir du 16 septembre
7, place St Michel
75005 Paris
A partir du 16 septembre
Tous les jours 13:20 (sauf dimanche) – 15:05 – 16:50 – 20:30 – 22:10 (sauf Mardi)
Débat avec Martin Armstrong le 16 septembre à 20h30.
Débat avec Martin Armstrong le 16 septembre à 20h30.
Publicis Cinémas
129, av des Champs Elysées
75008 Paris
A partir du 16 septembre
Tous les Jours 13:40 – 17:40 – 19:35
129, av des Champs Elysées
75008 Paris
A partir du 16 septembre
Tous les Jours 13:40 – 17:40 – 19:35
Cinéma Escurial Panorama
11, bd du Port Royal
75013 Paris
Le 27 septembre 2015 à 11h suivi d’un débat
11, bd du Port Royal
75013 Paris
Le 27 septembre 2015 à 11h suivi d’un débat
Cinéma Espace Jean Vilar
1, rue Paul Signac
94110 Arcueil
A partir du 14 octobre 2015
Province
1, rue Paul Signac
94110 Arcueil
A partir du 14 octobre 2015
Province
Cinéma Mercury
16, place Garibaldi
06300 Nice
A partir du 16 septembre
16, place Garibaldi
06300 Nice
A partir du 16 septembre
Cinéma Cinémas Actes Sud
23, Place Nina Berberova
13633 Arles
A partir du 14 octobre 2015
23, Place Nina Berberova
13633 Arles
A partir du 14 octobre 2015
Cinéma Navire
9, boulevard d’Alsace
26000 Valence
A partir du 14 octobre 2015
9, boulevard d’Alsace
26000 Valence
A partir du 14 octobre 2015
Cinéma Diagonal-Capitole
5, rue de Verdun
34090 Montpellier
A partir du 23 septembre 2015
5, rue de Verdun
34090 Montpellier
A partir du 23 septembre 2015
Cinéma Concorde
79, bd de l’Egalité
44100 Nantes
A partir du 16 septembre 2015
79, bd de l’Egalité
44100 Nantes
A partir du 16 septembre 2015
Cinéma La Scala
Rue George Ditsch
57125 Thionville
A partir du 14 octobre 2015
Rue George Ditsch
57125 Thionville
A partir du 14 octobre 2015
Cinéma Odyssée
3, rue des Francs Bourgeois
67000 Strasbourg
A partir du 7 octobre 2015
3, rue des Francs Bourgeois
67000 Strasbourg
A partir du 7 octobre 2015
Cinéma Cinéastes
42, place des Comtes du Maine
72000 Le Mans
A partir du 30 septembre 2015
42, place des Comtes du Maine
72000 Le Mans
A partir du 30 septembre 2015
Cinéma Omnia République
28, rue de la République
76000 Rouen
A partir du 11 novembre 2015
28, rue de la République
76000 Rouen
A partir du 11 novembre 2015
Cinéma Club
1, rue Montorcy
Place Saint Antoine
85300-Challans
Mardi 15 septembre 2015 à 21:00
1, rue Montorcy
Place Saint Antoine
85300-Challans
Mardi 15 septembre 2015 à 21:00
Advice for the Fed
I understand that Larry Summers and the IMF, among others, are advising the Fed not to raise rates. They are expecting the Fed to sacrifice domestic policy objectives for international objectives where so many have borrowed in dollars to save interest. This is the real clash between domestic vs. international and the consequence of the dollar being a reserve currency.
My advice to the Fed: YES, raise the lending rate, but do not raise the excessive reserve rate you pay banks. Alternatively, you can lower the excessive reserve rate to zero and leave the lending rate unchanged. This will have the desired impact of forcing the banks to get real.
If the Fed raises the rate, which includes the deposit rate on excess reserves, the banks will only deposit more money and not lend. This would encourage hoarding and further the deflationary cycle.
Changes on September 30/October 1, 2015 – 2015.75
It is very interesting to see that we have a lot of things emerging for our turning point on September 30/October 1 (2015.75). This is the day the funding of the Federal government stops and many are speculating that the government will shut its doors thanks to the conservatives in the Republican Party. Given the fact that the debate will also involve Planned Parenthood and abortion, we may see this religious aspect create the real resistance to raise the debt ceiling. Therefore, there is an actual risk that we may see the government shut down and this could actually be the catalyst to drawing the attention to the entire problem with government debt.
The medical industry changes as well come October 1. The U.S. Health Care Industry will make changes to ICD-10 for all disease coding. All physicians and insurance companies must comply with this coding program by rolling over from ICD-9 to ICD-10 at midnight on September 30. The number of codes for diseases will grow from 16,000 to over 60,000. This is because there are more diseases popping up with time.
These are just two examples that target that specific day.
Gold Confusion
COMMENT: Good Evening Martin,
Great blog on the Gold Martin. Don’t bother with the nay -sayers. Most probably he got stock with too much gold and silver. Most people have bias thinking because they hold certain assets. In my country currently, most people are holding minimum 2 to 4 houses. Some are even promoting people to buy 20 houses at least. These are the people that believe that property are forever. When the time comes for reckoning, these people will face their own undoing. We can only advise them, but somehow, their ears and mind will shut out any logical or reasons. I myself often get ridicule by relatives and friends when I warn them of them property issues that are coming. They will say that I like the chicken little, shouting that the sky is falling.
… Sincerely, Jim
REPLY: Your point is well taken. The majority of people are so biased toward a particular view that they provide the very fuel for the panics. Some reasoning is just utterly hopeless.
Here’s another example:“Since USA government debt is now money, this is simply a bubble in the DOLLAR Which is only logical because every USA dollar is a Federal Reserve NOTE. WHENEVER YOU HAVE A PIECE OF PAPER WITH THE WORD NOTE ON THE TOP, AN AMOUNT, AND A SIGNATURE ON THE BOTTOM, YOU HAVE DEBT. The question you fail to answer. I have all the money in the world. I loan you $100 at 10%. At the end of the year, where does the 10% come from to pay me interest.”
They are just lost in the bias of their own minds. If someone had all the so-called “money” then it wouldn’t be money for it could not be used as a medium of exchange without having a sufficient quantity for transactions. Anyone can create “dollars” insofar as we can enter into an agreement where I buy your house and you express in the terms that I must pay you in dollars. I hate to point out, but before 1934 there was a vast amount of “paper gold” for contracts were expressed in terms of gold. The Supreme Court nullified all private contracts by stating that a gold clause could not be enforced. (see: PERRY v. UNITED STATES, 294 U.S. 330 (1935))
It is amazing that people think that under a gold standard there had to be actual physical gold. Contracts simply expressed in terms of gold to be paid in the future did not require gold to exist. There were no differences between debt denominated in gold before 1934 or dollar denominated debt post-1934.
They are just lost in the bias of their own minds. If someone had all the so-called “money” then it wouldn’t be money for it could not be used as a medium of exchange without having a sufficient quantity for transactions. Anyone can create “dollars” insofar as we can enter into an agreement where I buy your house and you express in the terms that I must pay you in dollars. I hate to point out, but before 1934 there was a vast amount of “paper gold” for contracts were expressed in terms of gold. The Supreme Court nullified all private contracts by stating that a gold clause could not be enforced. (see: PERRY v. UNITED STATES, 294 U.S. 330 (1935))It is amazing that people think that under a gold standard there had to be actual physical gold. Contracts simply expressed in terms of gold to be paid in the future did not require gold to exist. There were no differences between debt denominated in gold before 1934 or dollar denominated debt post-1934.
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