I noted ten days ago that it looked to me like the yield curve in the USA would soon invert again. Today, the yield on the US 3 month treasury 1.54%. The yield on the US 10 year treasury is 1.52%. Et voila, the yield curve in the USA has inverted again. This is why inverted yield curves matter... https://mewetree.blogspot.com/2019/04/the-curve-invertedrecession-coming.html
So, if the US economy is really on a roll, why are interest rates within three one-hundredths of a point of another inversion? Today - 3 month US treasury = 1.52%; yield on the US 10 year note is at 1.55%. As noted before, yields on bonds only invert when the smart money flees to the safety of bonds. Now why would they be doing that?
Besides destroying the whistleblower in at least one Senate Committee, expect that bureaucrats, including members of the military in the White House, may soon be asked to swear an oath of personal loyalty to Trump.
I noted this in my last post... 6. Retribution and Revenge: The whistle blower will be "outed" and dealt with viciously as an example to others. Barr may even start a criminal investigation of this person, and others who testified against Trump in the House of Representatives, to emphasize the point that when anyone sees malfeasance in Trump's government, they are to shut their mouths. Without question, the careers of these bureaucrats are over. They will be hounded in private life as well. Yesterday, Col. Vindman, who testified about the details of a call between Trump and the President of Ukraine in the impeachment proceedings in the House of Representatives, was escorted out of the White House as part of being fired in his job as advisor to the National Security Council on Ukraine. As well, we learned that Ambassador Sondland, who also told what he knew about the attempt to subvert American Democracy to the House of Representatives, was fired as Ambassador to the European Union. There is no precedent for something this totally blatant and vicious in recent US political history - it is out and out revenge, plain and simple.. Call it the Triumph of Truthiness! Trump knows no one will stop him now. The bureaucratic bloodbath is just starting. Next step - the whistle blower will be brought before at least one committee in the Republican Senate to be torn asunder. Certainly, virtually the minute his identity is confirmed, his phone number, e-mail address and home address will be blasted everywhere in cyberspace, where Trump's more dedicated followers are no doubt primed to take action. Will this person be assassinated? I think the chances are 50/50. USA! USA! USA!
What do we know. 1. Outcome: Trump will be acquitted. 2. Proceedings 1: There was no "trial" as is commonly understood. 3. Corruption 1: There was a "quid pro quo". Even numerous Republican Senators now admit that the case was proven, even without witnesses. In short, the President of the United States attempted to use his office to illicitly influence a future election by arranging for a foreign government to investigate a political opponent. 4. Proceedings 2: As it turned out, there was no need of witnesses, as the prosecution in this "trial" actually proved its case, as was clear from what many Republicans have admitted. 5. Corruption 2: It is very likely that Trump will now see a carte blanche to go after political opponents in ways no president has ever done before. We may expect the Bidens to be investigated by Ukraine, China and others. There may also be trumped-up investigations of these people and others by the Department of Justice and the FBI, urged by AG Barr. Giuliani is about to go into overdrive! 6. Retribution and Revenge: The whistle blower will be "outed" and dealt with viciously as an example to others. Barr may even start a criminal investigation of this person, and others who testified against Trump in the House of Representatives, to emphasize the point that when anyone sees malfeasance in Trump's government, they are shut their mouths. Without question, the careers of these bureaucrats are over. They will be hounded in private life as well. 7. Bolton: He will lose security access and be set up for special retribution and revenge, possibly including a criminal investigation, again courtesy of AG Barr. Trump may sue him personally for slander to maintain the fiction that there was no "quid pro quo". 8. Election 2020: As with the 2016 election, the encrypted communications have already been flowing between Trump et al and the Russians to coordinate efforts to subvert the next election. They will be even better prepared this time. I'm still calling for President-elect Bloomberg later this year.
I have been shorting Canadian Banks for three years, and I've been dead wrong! The rationale for my short position has been that interest rates will rise, the housing bubble will implode, mortgages will go sour, and the banks will get killed. I am not alone in my concerns...see here... https://www.youtube.com/watch?v=B1WhlQxTVlQ And here... https://www.youtube.com/watch?v=OkfpTEVIcM8 Basically, Canadian banks are not setting aside sufficient reserves for loan losses, and are booking that cash as profits instead. According to Eisman, in 2018, 90% of their profits came from NOT booking properly against risk. When they start to book more cash against risk, profits will drop, and share prices will fall. In "short", this will not end well. Note - almost no one agrees with Eisman's thesis...like almost no one would admit there was a housing bubble in the USA in 2007...like almost no one would admit that high tech companies' share prices were overvalued in 1999. You get the picture. I think the trigger for a major share price drop of all bank shares will be more restrictions on foreign buying of Canadian real estate, which has super-charged our housing bubble. When this happens, especially nationally, house prices will fall and banks will have to devote more cash to their reserves, forcing them to book less profit. Their shares will drop as a result. Note that foreign buying restrictions have already started. In Vancouver, where foreign buying has been restricted by way of taxation and other methods, prices have already dropped 4% this year. The way to play this is HFD on the TSX. It is a double inverse exchange traded fund on Canadian banks. Do your own due diligence!
