iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
19,896 Blog Posts

MARKETS CRATER AFTER TRUMP CALLED PRESIDENT XI “ENEMY”, ORDERS ALL US COMPANIES OUT OF CHINA

Ok I’m blogging from my iPhone because I’m not set up yet and this shit happens.

 

This is beyond bizarre, but instead provocative. Comparing Powell to Xi is insane, but also calling Xi an enemy is wholly dangerous.

Stay long gold during this shit storm.

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40 comments

  1. tradercaddy

    On the way to your new NC home stop off at Biscuitville and grab yourself a fried pork chop biscuit and wash it down with a sweet tea. Welcome to NC fast food.
    And don’t forget the Hurricane/Tropical Storm supplies for when the power goes out.

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  2. tradercaddy

    … and don’t forget to buy some Cheerwine for the fridge.

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  3. og

    Do stocks bottom on Fridays? lol

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  4. ferd

    “calling Xi an enemy is wholly dangerous”

    Yup, dangerous and long-term stupid. Just as the Dem’s vilifying Russia has been wholly dangerous and long-term stupid. All we’ve done is gin up these guys’ war machines and drive them and our other many adversaries closer together.

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    • juice

      He technically did not call Xi an enemy

      an easy phrase to pull back with another tweet

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    • omfgitsjd

      It does seem like a blazingly crass message, which probably shook the communist hive in Beijing into a frenzy. If the Chinese military expansion into US national security interests in the pacific over the last decade isn’t convincing enough, I don’t know what is.

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  5. cheesefries

    Welcome to the great Old North State, Sir Fly!

    Here’s to the land of the long leaf pine,
    The summer land where the sun doth shine,
    Where the weak grow strong and the strong grow great,
    Here’s to “Down Home,” the Old North State!

    Here’s to the land of the cotton bloom white,
    Where the scuppernong perfumes the breeze at night,
    Where the soft southern moss and jessamine mate,
    ‘Neath the murmuring pines of the Old North State!

    Here’s to the land where the galax grows,
    Where the rhododendron’s rosette glows,
    Where soars Mount Mitchell’s summit great,
    In the “Land of the Sky,” in the Old North State!

    Here’s to the land where maidens are fair,
    Where friends are true and cold hearts rare,
    The near land, the dear land, whatever fate,
    The blest land, the best land, the Old North State!

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  6. teslawasright

    The Fly is coming into his own. Away from the toil and wreckage of New York. You will soon be smoking a churchwarden pipe and sipping some sweet tea at the local Waffled House. Good Day!

    Long gold and silver as usual

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  7. moonshot

    Trump gave them plenty of chances. They failed to act, failed to do what they agreed to do. Every one of his accusations is correct. Now the hammer comes down.

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    • roguewave

      Now the hammer comes down.
      on the heads of the American sheople.

      This just in:
      Greenland just shot down a US weather balloon. This act of war will not go unanswered! 7 nuclear aircraft carriers and 100,000 of our best volunteer troops are headed across the pond to occupy Greenland.
      (Later the real story came out: A helium birthday balloon from a party on the NJ beach drifted up to the jetstream and was whisked over to Greenland where a kid with a slingshot, shot it down. Drones were sent to eliminate this treat to our sovereignty.

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    • numbersgame

      On the IP and trade war, I’ll credit Trump for fighitng an unpopular war that had to be fought. It sucks in the short term, but In the long term we can’t afford to give away IP. Those that are talking about the harm to the economy that tariffs are creating are short-term thinkers.

      As for the Fetanyl, that’s also true. However, Corporaterica didn’t rally see it as much of a problem as the fact that the EPA was restricting pollution, the FDA was blocking, unsafe drugs, and the CFPB was lowering bank margin, the BLM was not allowing oil companies to drill on recerational land, etc. Those are the type of “problems” that they prioritized, and those were all “fixed.”

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  8. ferd

    Dollar set up low and tight on short term chart

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  9. awanka

    Complacency is the enemy, Mr. Fly. People were expecting another boring melt-up day. That’s when they get you. I would love to see how OA is trading these days.

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  10. soupbone

    That is insanely inflationary Trump. Youse migrated a huge amount of manufacturing to ‘Chimerica’ to the great pleasure of consumers home over 30 years, everyone adapted. Now USA faces deflation from 3 fronts minimum. So lets just fix it quick and before elections. Misguided candidate in charge.

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  11. heckler

    Too bad Drumpf couldn’t close the Greenland Deal that would have helped!!

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  12. doubleplus

    I live in NC – also moved here from the Northeast. Prepare for radical culture shock. “BBQ” here means pork, btw.

    Wait until you get to deal with the local contractors. My wife and I are convinced they were raised on drinking water distilled with lead and old paint chips.

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  13. omfgitsjd

    I wonder what Powell meant when he said today, “there are no recent precedents to guide any policy response to the current situation.”

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    • cancel19

      He meant that the training wheels are off on this one, so anything is possible!

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    • numbersgame

      If you include the context, I think the menaing is clear:

      “Our assignment is to use monetary policy to foster our statutory goals. In principle, anything that affects the outlook for employment and inflation could also affect the appropriate stance of monetary policy, and that could include uncertainty about trade policy. There are, however, no recent precedents to guide any policy response to the current situation. Moreover, while monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade. We can, however, try to look through what may be passing events, focus on how trade developments are affecting the outlook, and adjust policy to promote our objectives.”

      contstanlty changing tarifs make the job of economic foreacasting more difficult

      However, I’m personally more concerned with the fact that the standard central bank response to recessions – lowering interest rates – will be less effective in near-ZIRP environemnts and simply buying assets (as the Europeans, Japanese, and CHiense are doing) causes moral hazard risks that just paper over the problems, much liek treating the symptoms but ignoring the disease.

      The good news is that we can watch the Europeans and Japanese, sicne they are driving ahead of us on this path (“should we try to jump the broken bridge, hit the brakes, or just buy parachutes?”)

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      • omfgitsjd

        I agree with your concern about the diminishing effectiveness of lowering interest rates, which is why there will be a shot of QE to go along with it. It isn’t ideal, but this is where steam has to be added to the economy with the backdrop of global trade reset.

        It does seem a little ironic that the word hopium comes to mind when he said, “We can, however, try to look through what may be passing events.”

        It almost seems like they didn’t get the memo.

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    • Phileo99

      It means that Powell has absolutely no freakin’ clue what to do

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  14. mad marsupial

    Markets tanked after Dr. Fly said he would chop his dick off.

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    • omfgitsjd

      How will he do that after he chews his arm off on national television?

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  15. one-eighty

    Anybody have an in at Twitter? If you could front run Recession Man’s tweets you could make a fortune.

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    • awanka

      It’s what I’ve been saying. If we could just get control of Trump’s Twitter account for 10 minutes, we could all retire.

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  16. firehorsecaper

    Beyond the myriad reasons to be long gold; seasonal bias higher, Hong Kong, Argentina, Brazil alight, Italy, Germany, Greenland, Carney, carnival governance, etc. the depreciating CNY will be used to buy more gold. Central banks had been the thumb on the scale downward as sellers and will be the hand on the scale propelling it higher (Russia and China net buyers for some time). Trump will be getting some grey hairs in to consult on this matter soon, Eric Sprott comes to mind. A decent amount of work out there on Trump’s twitter game, Fridays are the highest volume as a rule. The fact check on no alcohol consumption is the hardest to believe and it portends a new chapter of tomfoolery; Trump impeachment abandoned in favor of removal on grounds of “stable genius” being the biggest fib (removal for mental incapacity). The books will write themselves, the weight of the high beta sell orders might be too much for the algos and their pimply masters. JCG

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  17. ferd

    The potentially much bigger news, bigger than Friday’s trade war news, is that a sitting BOE governor openly floated ideas about how to handle the inevitable monetary reset which looms over the lifestyles of Americans – – threatening our god-given right to have other countries send us stuff of value in exchange for the money we print.

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    • firehorsecaper

      Ferd, I gave BoE Governor Carney, a Cdn export, a mention. The news was big. The pace of China fully opening their currency (even having CNH go the way of the dodo in favor of CNY) was being watched already, but developed market players openly discussing USD work arounds (along with alternatives to the SWIFT money transfer platform) is the biggest news of the week. Much bigger than J-Hole.

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  18. mx2101

    In retrospect- do you think better management of US Dollar and US debt could have maintained reserved currency status of the US Dollar?

    I think Americans and their Congress have been self-indulgent for decades with free money and sense of entitlement. But if they had been more responsible…

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    • firehorsecaper

      mx2101 it could have extended things for decades, certainly. Things being floated by Democrat candidates like Warren re; expunging all student loan debt (>1.5tln) makes some think it is a path to a global reset. $22tln of US govt debt, trillions on muni debt, more in pension obligations, OPEB through the roof. A Global Currency Unit with members trading in a band based on gold holdings sounds a hell of a lot more sensible that blockchain solutions that prove to be a multiple cost of existing solutions. There is a reason the smartest guys in the room were the bond guys and huge swaths got a bullet post GFC. The only market which is relatively true is FX, >$5tln in daily turnover and less than 10% of that has an underlying trade basis. The green shoots of liquidity have been overcome by draught and mis-management. Ceased markets, egregious bid/offers, crashy price moves all par for the course in the “new” but far from improved global financial markets.

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  19. mx2101

    firehorsecaper- Thank you for responding thoughtfully. I’m not a financial expert, just thinking much of our American (USA) predicament is driven by human nature of Americans and politicians they elect. Have a good weekend.

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  20. ferd

    $DXY has spent this year consolidating its feb – dec 2018 move higher and now appears (on a 2-year, daily chart) to be setting-up for a fresh breakout. It has held high and tight through 2019 – as it has been the beneficiary of its being perceived as the cleanest shirt when crazy is happening. A target on such a breakout would propel it up to challenge jan 2017 highs.

    But, as I noted on Friday afternoon, it was interesting that Friday’s crazy didn’t help the dollar. Rather it had the dollar lower and setting-up for a move lower still …at least on my very short-term intraday chart.

    Still, the pattern remains bullish on the daily IMO, unless DXY takes out 95. If that happens, one may want to consider adding to gold and silver …and maybe we’ll even see more interest book values, and in companies’ assets (e.g., phosphorous and potash in the ground.) But who knows how it plays out – or when?

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  21. numbersgame

    Just my $0,.02 on Carney speech about replacing the USD is still a pipe dream:

    – renminbi/yuan/CNY: you think the finance system is going to use a currecny controleld by a commnist governemetn run by a disctator for life? Not a chance. The economy is nowehere near dominant enough. It would take a bare minimu of 20 years for it to grow big enoguh, but GDP is already rapidly decelearing (on a long term basis) thanks to stupid demographic policies (aging populaiton + no youth thanks to 1-child polciy + low immigration).

    – Euro: UK is leaving the union, and probably won’t be the last one.

    – every other currency has much too small a base to matter

    – gold and cryptos have the same problem: difficult to control by governeemnts, Central Banks, and other power players: they’ll never give up power

    USD FTW

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    • ferd

      “they’ll never give up power”

      What is interesting is that someone, who presumably is one of the “They” to whom you allude, publicly floated ideas for the reset. Why?

      Anyway, he did not advocate for the Euro or renimbi as replacements.

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      • numbersgame

        There’s nothing surprsiign about a Bank of *England* head wanting to unsurp the USD. that was the goal of the Euro, but the US economy + military was still too dominant.

        You’re right that he didn’t advocate for the renimbi, but I think that he puts China’s position as stronger than it is:

        “Transitions between global reserve currencies are rare events given the strong complementarities between the international functions of money, which serve to reinforce the position of the dominant currency.

        And the most likely candidate for true reserve currency status, the Renminbi (RMB), has a long way to go before it is ready to assume the mantle. ”

        https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf

        The only way a closed economy run by a dicatator would end up as the world’s reserve currency is if it was forced down our throats. The USD does have weakness (our huge national debt), but every other country – includign China – is worse off.

        So while he may be technically correct, it is like talkign about the most likely female player to go to the NBA. Actaully ,considering that Muggsy Bogues played in the NBA, I’d bet on female NBA palyers beforethe Yuan taking down the USD

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