Situation of the economy

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Momentum crash, updated to 8 April 2025​

The declaration of war on the rest of the world triggered by the Donald's tariffs continues to wreak havoc. The financial markets are in turmoil ahead of the momentum crash! *** [Article reserved for Platinum, Gold and Premium subscribers] The decision to adopt the policy of tariff increases advocated by Stephen Miran is historic suicide for the Donald and for America, which is hard to understand... *** The Donald's declaration of war on the rest of the world by imposing additional tariffs on virtually all imports into the United States has sent Treasurys' yields soaring again after... plunging vertiginously during the last session of ...

Source

 

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Momentum crash, updated to 12 April 2025​

The declaration of war on the rest of the world unleashed by The Donald's tariffs continues to wreak havoc ahead of the momentum crash but China's leaders are waging the global currency war to their advantage! *** [Article reserved for Platinum, Gold and Premium subscribers] The decision to adopt Stephen Miran's policy of raising tariffs is historic suicide for the Donald and for America, and it is also the starting point for China's strong and winning reaction against America... *** The Donald's declaration of war on the rest of the world by imposing additional tariffs on virtually all imports into the United States has sent yields plunging ...

Source

 

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USA: major financial disorders: Repo (ON RRP), to 16 April 2025​

The US interbank market has not functioned normally since 2021 and banks have less and less liquidity, which should lead to serious financial turbulence in the near future...

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The US interbank market is no longer functioning normally because virtuous bankers with credit balances at the end of the day are refusing to lend their surplus cash to banksters with net debit balances, as was the usual practice until 2020.

The overnight liquidity held by US banks in the Fed's accounts has been falling since the end of May 2023 and has just reached a cycle low of $54.8 billion on 16 April, meaning that banks with surplus liquidity have less and less of it!

Document 1 :



The fall in these deposits clearly confirms that US banks have less and less surplus liquidity, which is particularly worrying given that the interbank market has not been functioning since the end of March 2021.

Focus on the recent period,

Document 2:



This liquidity crisis began in April 2021 and peaked at the end of 2022,

Document 3:



As a reminder, since the ON RRP data has been published, i.e. since the beginning of 2003, the US interbank market has always functioned normally, including during the Great Recession!

The banking crisis that is likely to occur should therefore have more serious consequences!

Document 4:



Copy of the screen of today's ON RRP publication.

Document 5:



What will the FOMC members do to resolve this banking and financial crisis?

The fun and games with The Donald are over!

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Click here to access the ON RRP data published by the government.

Click here to read my previous article on this subject.

Source

 

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Apparently Trump has just decided, in agreement with the Fed, to freeze from next Monday 26 May the amount of the swap agreements between the Fed and the ECB, which consisted of giving the Fed the possibility of supplying the ECB with US dollars (USD) so that it could then supply them to banks in the eurozone that were short of them.



One of the biggest problems facing eurozone banks in 2011-2012 was the lack of USD liquidity. But another report from Mitrade, a financial technology company, states that Jerome Powell would not accept orders from Trump prohibiting him from supplying dollars to the ECB.

Fasten your seatbelts...

 

[Benjamin]

On April 1, Canadian Prime Minister Mark Carney spoke by phone with President Claudia Sheinbaum about the importance of maintaining North American economic integration, highlighting the value of the existing trade framework, such as the USMCA.

Today, Carney announces Canada will build a coalition of countries who share their values to build their economy and trade opportunities and will exclude the United States. "Canada is ready to lead" he said.

I received a letter on Apr. 15 from my investment management group (CI Global Asset Management- the "CI" means Canadian International) that stated that CI signed a deal to be taken private and was going to be managed by Mubadala Capital.

CI GAM manages mutual funds, ETFs, private pools (private funds), and alternative investments (hedge funds and private equity) and is based in Canada.

Mubadala Capital is a state-owned global investment firm that acts as one of the sovereign wealth funds of the government of Abu Dhabi, United Arab Emirates (which is part of BRICS).

On a larger note, it sounds like a lot of companies are going private and nobody, even the investors, knows what's happening to their money.

CI Financial signs $4.7B deal to be taken private by Mubadala Capital​

Updated Nov. 26, 2024

Another Canadian company is going private after a sovereign wealth fund of the United Arab Emirates reached a $4.7-billion deal to buy CI Financial Corp.

Under the transaction, Mubadala Capital, the alternative asset management arm of UAE-owned Mubadala Investment Co. [which manages US$330 billion, the CEO is Vice President Sheikh Mansour bin Zayed Al Nahyan], will pay $32 per share in cash for the firm.

CI Financial shares surged on Monday to close up 30 per cent at $31.22 on the Toronto Stock Exchange.

William Butt, CI’s lead director and chair of the special committee, said the deal represents an exceptional outcome for shareholders and “provides certainty to shareholders while CI pursues its ongoing transformation.”

“It also provides significant benefits to Canada, by providing long-term capital to underpin the building of a Canadian champion in the wealth and asset management industries,” Butt said in a statement.

The deal, however, has some concerned as it’s part of a broader trend of private equity firms buying up Canadian companies.

Rachel Wasserman, a fellow at the Canadian Anti-Monopoly Project, said the widening net of private equity means there’s dwindling access to information on what these once-public companies are doing.

It also makes it harder for average investors to buy into the companies, and raises competition concerns as well.

“When it’s one company, it doesn’t matter, but this is happening at such a scale that it is becoming a real problem,” said Wasserman, who wrote a recently published paper on the rise of private equity. [The Private Equity Playbook: How buyout firms extract rather than build value and what to do about it]

She said some private equity takeovers have led to the new owners squeeze out value from a firm without growing the business.

Other companies taken private in Canada in recent years include WestJet, Rexall, and Sleep Country Canada as well as funeral homes and veterinary clinics.

It’s not clear what the implications are in the new ownership of CI Financial, but it’s something Canadians should be aware of, she said.

“Ownership matters — who owns the company influences everything,” said Wasserman. “We now have the Abu Dhabi government owning Canada’s largest independent financial advisory firm.”

CI said in its release Monday that it expects to continue with its current Canadian operations, structure and management team. It also expects to maintain its Canadian headquarters and remain independent of Mubadala Capital’s other portfolio businesses.

“Mubadala Capital invests with a long-term outlook and represents long-term capital – providing stability and certainty for CIʼs clients and employees,” said CI chief executive Kurt MacAlpine, who is expected to continue to lead the firm.

“With this transaction, CI has never been better positioned to fulfil our mission of delivering outstanding services and solutions to our clients.”

The company said MacAlpine expects to roll all his equity in the transaction and other members of CI’s senior management are also expected to have the opportunity to enter into equity rollover agreements to exchange their CI shares into a new holding vehicle.

The deal is subject to court and regulatory approvals, a shareholder vote and other customary closing conditions. It is expected to close in the second quarter of 2025. [I read on the current CI Financial Report for the 1st quarter that this transaction is expected to now close in the 3rd quarter.]

This report by The Canadian Press was first published Nov. 25, 2024.

Companies in this story: (TSX:CIX)

Note to readers: This is a corrected story. A previous version said dental companies were among those taken private in recent years.

 

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Denmark raises retirement age to 70.



USA soon too?

Denmark raises retirement age to 70 - could the US do the same?

For now, the Danish can retire with their public pension at 67, but that threshold will gradually climb to 70 by 2040.

www.newsweek.com

And so France, Spain?

 

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Here is an analysis about the US economy. I think it can be right in the sens a lot of transactions are based on trust. Especially trust in the futur. Break it and you have big problems ahead.

Analysis of the dynamics of economic/financial systems and markets is essential if we are to understand the resulting repercussions. We will discuss five dynamics currently at work.

1. The labour market slump. 2. The recession in the manufacturing sector. 3. The collapse in imports. 4. The destruction of the dollar. 5. The extraction of wealth from the middle class.

Each of these dynamics has its own repercussions, but together they have wider implications.

1) Stagnation in the US labour market, a harbinger of a more general collapse. According to its own figures, the US job market is stagnating. Private sector job creation is close to zero, wage growth is slowing and the participation rate is falling again. More and more workers are forced to take on several part-time jobs in order to survive. This is a job of desperation, not prosperity.

The engine of America's real economic power, the private sector, is essentially on its last legs. If history is any guide, this is exactly what we have seen before every major economic downturn in previous cycles.


2) The US is already in a manufacturing recession... It's confirmed. According to their own figures #false... the ISM manufacturing PMI has been below 50 for months, which corresponds to a contraction according to their own figures. According to their own figures, new factory orders are plummeting and order cancellations are at an all-time high. The system is not just slowing down, it's collapsing!

What does this mean? The sharp rise in factory order cancellations is a critical warning signal. Companies are no longer confident about future demand.


3) Imports have fallen, which is a very bad sign. According to their own figures. The fact that imports have been halved is a huge signal. The US is importing less because domestic demand is collapsing, not just because of tariffs. Consumers can't afford to buy discretionary goods. Retailers and wholesalers are reducing their orders.

Why are they doing this? They know that a contraction in consumption is underway, and this is a sign of deep systemic weakness. Impact on world trade. This will have a boomerang effect on supply chains, exacerbating the slowdown in production.


4) The dollar's purchasing power collapses more rapidly and real wages fall.


5) The middle class is squeezed.

The full picture. Stagnation in the labour market, recession in the manufacturing sector, collapse in imports, accelerated depreciation of the dollar, collapse of the middle class. Frankly, it's called a systemic failure cycle and it's now underway.

The slowdown in the economy leads to a loss of confidence, which leads to a fall in demand, which leads to an even faster slowdown in production, which leads to more redundancies, which leads to a deeper collapse.

 

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A US senator warns of a potential bond and banking crash

Senator Ron Johnson (R-WI) has said that the US could face a fiscal crisis, such as a failed bond auction, before it reaches 65 trillion in national debt, which he said would be the ten-year effect of passing the ‘Big Beautiful Bill’.

Johnson did the math in a recent interview with Tucker Carlson. The United States currently has a debt of about $37 trillion. The Big Beautiful Bill will add $22 trillion in debt over 10 years, bringing us to $59 trillion. And every 1% increase in the interest rate represents an extra $4,000 billion in financial costs. Current borrowing is at around 3.3%, but the 50-year average is over 5%. A further 2% increase in interest rates would therefore lead to an additional $8,000 billion in debt, taking the total US debt to $67,000 billion in around 10 years.

"I don't think we'll ever reach that figure. Something is going to happen. We're going to have a debt crisis. A failure of our bond auctions, which will push up interest rates even more," he added.

Why is this important?

Johnson describes the US as already in a chronic debt crisis that has not yet become acute. If the ‘Big Beautiful Bill’ passes the Senate without major changes and Johnson is right, the US will be in an acute debt crisis within ten years. The Fed will then have to print dollars to buy the debt as a buyer of last resort and force the federal government to cut spending to pay down the debt.

 

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The financial system is a walking corpse. The US economy has become a zombie, it's dead. It produces less and less, borrows more and more and survives only thanks to a massive expansion of debt.

The Fed, the Treasury and Wall Street are artificially sustaining the illusion of life, but even zombies rot.

Inflation hasn't gone away, it's entrenched and it's going to get worse from here on in. Food, housing, electricity and insurance prices have all risen by more than 10% in recent years. And with every new spending bill, the situation gets worse. The dollar is dying, the US is dying, and the world knows it.

The US debt is increasing on a global scale... It's a time bomb.

Everything is accelerating because default leads to collapse and inflation leads to destruction of wealth. Either way, the US economy, the US middle class, small businesses and the US industrial engine are being hollowed out faster and faster.

 

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Look like they want to suppress any form of pension:



The life expectancy of an English person is... 78.8 years.

State pension age 'could hit 80' with warnings crisis underestimated

Concerns have been raised that estimates by the Treasury's OBR watchdog might be underplaying the challenges posed by life expectancy improvements.

www.dailymail.co.uk

 

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In reaction to Trump tariffs, China has implemented a strategic initiative offering zero tariffs to 53 countries as a direct counter to U.S. decision.

This move, described as a "surgical maneuver," aims to shift global economic influence by fostering interdependence and positioning China as the architect of a new economic order.

So China’s "tariff zero" initiative, granting duty-free market access to 53 nations (primarily African countries) accelerated its emergence as a global economic architect by driving record Sino-African trade ($160 billion by early 2025), enabling job creation, and reshaping global economic power dynamics through strategic interdependence.

The China’s strategy emphasizes long-term economic integration over coercive trade policies, leveraging access to critical minerals and emerging markets to build a self-sustaining economic ecosystem. This shift underscores a broader realignment of global trade, where China’s model of inclusive growth and interdependence is increasingly positioned as an alternative to U.S.-led protectionism.

In conclusion, the ressources of those countries now go directly to China instead of US...

2025-04-26

(Joe) What's the likely end result of Trump's "trade war"?

A: Bouquets and spoiled fruit.

Q: (L) So it'll be a mixed bag.

Source (Video French)