The unwinding of the carry trade plus the ambiguity of the timing of Iran’s response is just uncanny. Israel’s desperation is palpable, they’re begging for any response so that they can activate operation drag America into WW3, just like they were waiting for any provocation from Hamas to launch operation genocide.
So now that the crash is on, will Iran continue to wait to cause as much pain as possible? Could they have finally found a lever? If the response doesn’t come will Israel go full preemptive? Who will they assassinate next? Pezeshkian, Khamenei, Nasrallah? Imagine the crash after that happens! And from here we’re talking about breaking major supports. 100DMA breached today and tomorrow CTAs are dumping. Seriously dangerous shit for a lot of money men and a lot of money men are the power base of the Zionists.
Could the civil war among the Zionists be about to be more than just liberal vs fanatics? The money men can’t all hedge themselves sufficiently against a crash like this, and the geopolitical risk is just astronomical. The strength and weakness of the Zionists is money. The resistance has been extremely successful at bleeding Israel proper but the real financial strength of the Zionists is outside Israel. I think there are a lot of puckered assholes out there tonight waiting for the other shoe to drop and they will choose themselves over the fanatics when push really comes to shove.
This is an absolute disaster for the US and the Zionists. There has never been a weaker or more desperate moment. They can escalate but it’s at their own great peril. If the choice is between their own survival and the Zionist project who will they choose?
Thank very much, Mark, for the great post. Just based on what I am see in my inbox tonight, the media by and large is not recognizing the importance and impact of the unwinding of the Yen carry trade on this global selloff - if they recognize it at all. Even financial analysts are too wound up in the "recession" angle. You and Tom Luongo are providing a service by bringing attention to this and to the associated larger issue of the fragile nature of our over financialized and over leveraged markets.
Nearly $2 Trillion Wiped Out from Stock Market as Fears of Global Recession Spark Panic Among Investors — Warren Buffett Dumped Nearly Half of Apple Stake and Holds $277 Billion in Cash Reserve
It seems that, after all the millions of words printed trying to guess the day and place when things really do go pear-shaped, we've arrived at last at what the late, great British writer and journalists, Christopher Booker, called the "explosion into reality". All the fantasies of the globalists are coming apart at the same time. The Deep State have played most of their best cards to hang on to power: lawfare against any opposition, rogue government agencies, a failed assassination attempt, ballot fraud, and - most probably - a fake pandemic. None of that has worked, so it looks like they need war.
He does address that, which I reference in a comment. DDB too is saying this isn't about rate cuts. There are deeper causes that the Fed isn't the tool to fix. The Fed is doing what it can for the future, but they're not going to cut rates to enable a KS win.
That's the thing Ray--Luongo's forecasts have been good. Re unemployment, however, DDB has been arguing forever that the unemployment rate is artificially low because there are a lot of people who simply haven't had jobs for years now--since the Covid Hoax, certainly. In a recent video she was asked, well, with rates so low why aren't people buying homes? Here reply: Because they don't have jobs. This is an overheating economy from Powell's perspective of our financialized system, but the real economy is not strong. Jiggering with rates can't address that bad combination.
Confirming what was just written about Iran delaying--who are these people who are convinced that Iranians and Russians and Chinese are all dummies?
The_Real_Fly @The_Real_Fly
IRAN INFORMS THE UK THEIR ATTACK ON ISRAEL TO COME “NO LATER THAN” WEDNESDAY
Who believes Iran would do that?
-- GEROMAN -- time will tell -  -- @GeromanAT
What some people refuse to see here - the threatening but delaying of the next step causes brutal damage to the stock market and of course Israeli economy.
The Biden admin claims it wants to "prevent escalation" in both the Middle East and Ukraine-Russia. Yet back in October, Biden bragged that the US could fuel two conflicts at the same time and was even indignant at the suggestion that it couldn't.
Col MacGregor and Larry Johnson both doubt it, but we have to hope that there is someone or something in the corridors of power who can derail the Jewish lobby's push for war. Probably a vain hope.
 Iran has put up billboards of Jesus Christ's Last Supper and support for Christianity across the country, in response to the craziness of the Olympics
'Indeed, the Messiah, Jesus Christ, Son of Mary, is a messenger of God.'
The billboards were put up in response to the defacing of the Holy Last Supper at the Paris Olympics.
You answered your question: so-called pope. Just a reminder, 'pope' is English for 'papa', which is Italian for, uh, papa. It's not in origin like some kinda ecclesiastical title. The guy in Rome who dresses in white is the bishop of Rome, whose own authority rests upon his faithfulness to the faith handed down by the two apostles, Peter and Paul, who are referenced several times in the Roman liturgy. Is he doing that? No.
Luongo: DDB has been pounding her shoe on the desk for 2 mos.--if the Fed cuts rates the markets will crash. Counterintuitive.
DDB: "Countless small businesses are at risk of becoming part of the surge of bankruptcies tied to U.S. households being forced to cut back on purchases of the things they want.…"
BUT, Luongo again maintains that capital will flow to the US (as well as into Gold) when these things get sorted.
I don't have links handy but the historical record has shown that the equity markets do crash (to one extent or another) after Fed rate cuts. The main reason being that a cut in rates is typically indicative of an imminent contraction or recession, which in turn will hurt corporate profits and the credit markets. It is a mystery to me why people should presume otherwise.
As for capital, it will eventually (as always) flow where it is best treated.
The reason capital flow into the US is because of 1) the fundamental strengths of America as a country, which can be recovered, and 2) because, as he says, things will be worse elsewhere. I can see arguments against that but overall it makes sense to me.
As I mentioned below, I don't know enough about the real nitty-gritty of economics to give a reasoned reply. However, I'm not sure if the rest of the world still perceives America like that. And if it does, how long will that persist? I read today that my little country, Switzerland, is attracting a lot of capital, and I suspect that many other out of the way (hopefully!) places like the Caymans, etc. will be the same. Gold dropped a bit today, but yes, that's going to absorb a lot of capital too. I suspect we're going to find out the answers to all the questions over the next few months and years.
Five days ago the Bank of Japan finally increased its interest rate from 0 to 0.25 percent. The famous carry trade, borrowing in Yen for near zero interest to invest in well paying U.S. dollar 'assets', started to unravel.
Worse than expected U.S. economic data, the Fed's unwillingness to lower interest rates and an escalating crisis in the Middle East, added to the insecurity.
...
Geopolitical risk has increased too. The 'West' is losing its proxy war in Ukraine. There is no chance for it to unsettle a Russia which is steadily gaining strength.
The conflict in the Middle East is threatening to develop into an escalating spiral of retaliation strikes and counter-strikes designed in part to pull the U.S. in:
"Re. Bitcoin, remember that BlackRock and other institutions have basically taken it over after ETFs were released. Some say that BlackRock and the US government are using BitCoin as a vessel to suck in retail (small investor) money, and they use BitCoin as a liquidity reservoir, which they will empty in case of a banking crisis or government debt crisis. So Bitcoin is a buffer and will be the first to go, as we saw in this occasion.
Even gold and silver and other commodities are down, but most likely they are down because margin calls hit the market and liquidity is drained, but gold is not necessarily the first asset from liquidity is drained. If March 2020 is any indicator, the gold slump was relatively shallow and it can continue to rise higher from external buying, and the declining confidence on the western FIAT system."
The point being, when this washes out we will see just how much real value various assets have (including the Dollar).
Like Jim Rickards says, everything will go down when the stuff hits the fan (including gold) because people will be desperately scrabbling around for any assests. The question is which assets will climb back up once they've dusted themselves down and which will be in deep depression?
Moon calls out the AI bubble, "Another hype that finally receives much deserved scrutiny are the glorified but unreliable machine learning algorithms currently marketed as 'Artificial Intelligence'. No profitable use-case has been made for billions of bad investments in these."
Interestingly, the Aussie Hugh White, speaking in NZ, mentions some of these issues and argues that--even supposing they have promise--AU and NZ will never be players, only buyers. So why ties themselves to only one supplier, the US?
Yep, just caught that. Much easier for an economic midwit like me to understand. I think Israel is in a desperate position, although you'd never guess it from the hubris coming out of Tel Aviv. If the US does get involved, it is certainly not going to win, and will probably lose. And means Israel's main protector is out of contention. Not great strategic thinking, is it?
The unwinding of the carry trade plus the ambiguity of the timing of Iran’s response is just uncanny. Israel’s desperation is palpable, they’re begging for any response so that they can activate operation drag America into WW3, just like they were waiting for any provocation from Hamas to launch operation genocide.
So now that the crash is on, will Iran continue to wait to cause as much pain as possible? Could they have finally found a lever? If the response doesn’t come will Israel go full preemptive? Who will they assassinate next? Pezeshkian, Khamenei, Nasrallah? Imagine the crash after that happens! And from here we’re talking about breaking major supports. 100DMA breached today and tomorrow CTAs are dumping. Seriously dangerous shit for a lot of money men and a lot of money men are the power base of the Zionists.
Could the civil war among the Zionists be about to be more than just liberal vs fanatics? The money men can’t all hedge themselves sufficiently against a crash like this, and the geopolitical risk is just astronomical. The strength and weakness of the Zionists is money. The resistance has been extremely successful at bleeding Israel proper but the real financial strength of the Zionists is outside Israel. I think there are a lot of puckered assholes out there tonight waiting for the other shoe to drop and they will choose themselves over the fanatics when push really comes to shove.
This is an absolute disaster for the US and the Zionists. There has never been a weaker or more desperate moment. They can escalate but it’s at their own great peril. If the choice is between their own survival and the Zionist project who will they choose?
Very interesting take.
Thank very much, Mark, for the great post. Just based on what I am see in my inbox tonight, the media by and large is not recognizing the importance and impact of the unwinding of the Yen carry trade on this global selloff - if they recognize it at all. Even financial analysts are too wound up in the "recession" angle. You and Tom Luongo are providing a service by bringing attention to this and to the associated larger issue of the fragile nature of our over financialized and over leveraged markets.
Why would Iran be in a hurry?
Nearly $2 Trillion Wiped Out from Stock Market as Fears of Global Recession Spark Panic Among Investors — Warren Buffett Dumped Nearly Half of Apple Stake and Holds $277 Billion in Cash Reserve
Date:8/5/24 2:16 PM
It seems that, after all the millions of words printed trying to guess the day and place when things really do go pear-shaped, we've arrived at last at what the late, great British writer and journalists, Christopher Booker, called the "explosion into reality". All the fantasies of the globalists are coming apart at the same time. The Deep State have played most of their best cards to hang on to power: lawfare against any opposition, rogue government agencies, a failed assassination attempt, ballot fraud, and - most probably - a fake pandemic. None of that has worked, so it looks like they need war.
Supposedly there is a 90% chance of a Sept Rate Cut?
I wonder what Tom Luongo’s thoughts are on the chance of one?
I’m surprised at the bank of Japan being a cause of the stock market drop. I feel so uninformed.
He does address that, which I reference in a comment. DDB too is saying this isn't about rate cuts. There are deeper causes that the Fed isn't the tool to fix. The Fed is doing what it can for the future, but they're not going to cut rates to enable a KS win.
Thanks Mark!
My gut feeling is the unemployment numbers reported were deliberately higher trying to force a rate cut.
I’m surprised the markets give a 90% chance of a rate cut.
Tom Luongo’s forecasts have been a lot more accurate.
I was rather surprised too by those figures. They are well capable of massaging them or even faking them.
That's the thing Ray--Luongo's forecasts have been good. Re unemployment, however, DDB has been arguing forever that the unemployment rate is artificially low because there are a lot of people who simply haven't had jobs for years now--since the Covid Hoax, certainly. In a recent video she was asked, well, with rates so low why aren't people buying homes? Here reply: Because they don't have jobs. This is an overheating economy from Powell's perspective of our financialized system, but the real economy is not strong. Jiggering with rates can't address that bad combination.
Thank you Mark.
Confirming what was just written about Iran delaying--who are these people who are convinced that Iranians and Russians and Chinese are all dummies?
The_Real_Fly @The_Real_Fly
IRAN INFORMS THE UK THEIR ATTACK ON ISRAEL TO COME “NO LATER THAN” WEDNESDAY
Who believes Iran would do that?
-- GEROMAN -- time will tell -  -- @GeromanAT
What some people refuse to see here - the threatening but delaying of the next step causes brutal damage to the stock market and of course Israeli economy.
So the Hit was done already.
Good point. Seems like Teheran is also learning a great lesson from the Russians: the power of patience.
Aaron Maté @aaronjmate
The Biden admin claims it wants to "prevent escalation" in both the Middle East and Ukraine-Russia. Yet back in October, Biden bragged that the US could fuel two conflicts at the same time and was even indignant at the suggestion that it couldn't.
Col MacGregor and Larry Johnson both doubt it, but we have to hope that there is someone or something in the corridors of power who can derail the Jewish lobby's push for war. Probably a vain hope.
But not in Israel, the world center of ...
Megatron @Megatron_ron
BREAKING:
 Iran has put up billboards of Jesus Christ's Last Supper and support for Christianity across the country, in response to the craziness of the Olympics
'Indeed, the Messiah, Jesus Christ, Son of Mary, is a messenger of God.'
The billboards were put up in response to the defacing of the Holy Last Supper at the Paris Olympics.
Why isn't the so-called pope doing that? He's supposed to be the main defender of the faith on Earth. Where is he?
He’s in a seance talking to Lenin.
You answered your question: so-called pope. Just a reminder, 'pope' is English for 'papa', which is Italian for, uh, papa. It's not in origin like some kinda ecclesiastical title. The guy in Rome who dresses in white is the bishop of Rome, whose own authority rests upon his faithfulness to the faith handed down by the two apostles, Peter and Paul, who are referenced several times in the Roman liturgy. Is he doing that? No.
Maybe Vigano is the real pope. He seems to be the only one speaking out. Didn't Bishop Barron also speak out?
Luongo: DDB has been pounding her shoe on the desk for 2 mos.--if the Fed cuts rates the markets will crash. Counterintuitive.
DDB: "Countless small businesses are at risk of becoming part of the surge of bankruptcies tied to U.S. households being forced to cut back on purchases of the things they want.…"
BUT, Luongo again maintains that capital will flow to the US (as well as into Gold) when these things get sorted.
I don't have links handy but the historical record has shown that the equity markets do crash (to one extent or another) after Fed rate cuts. The main reason being that a cut in rates is typically indicative of an imminent contraction or recession, which in turn will hurt corporate profits and the credit markets. It is a mystery to me why people should presume otherwise.
As for capital, it will eventually (as always) flow where it is best treated.
There he goes again.
The reason capital flow into the US is because of 1) the fundamental strengths of America as a country, which can be recovered, and 2) because, as he says, things will be worse elsewhere. I can see arguments against that but overall it makes sense to me.
As I mentioned below, I don't know enough about the real nitty-gritty of economics to give a reasoned reply. However, I'm not sure if the rest of the world still perceives America like that. And if it does, how long will that persist? I read today that my little country, Switzerland, is attracting a lot of capital, and I suspect that many other out of the way (hopefully!) places like the Caymans, etc. will be the same. Gold dropped a bit today, but yes, that's going to absorb a lot of capital too. I suspect we're going to find out the answers to all the questions over the next few months and years.
Very nice summary:
https://www.moonofalabama.org/2024/08/markets-down-risks-up.html
Five days ago the Bank of Japan finally increased its interest rate from 0 to 0.25 percent. The famous carry trade, borrowing in Yen for near zero interest to invest in well paying U.S. dollar 'assets', started to unravel.
Worse than expected U.S. economic data, the Fed's unwillingness to lower interest rates and an escalating crisis in the Middle East, added to the insecurity.
...
Geopolitical risk has increased too. The 'West' is losing its proxy war in Ukraine. There is no chance for it to unsettle a Russia which is steadily gaining strength.
The conflict in the Middle East is threatening to develop into an escalating spiral of retaliation strikes and counter-strikes designed in part to pull the U.S. in:
Interesting comment under Moon's post:
"Re. Bitcoin, remember that BlackRock and other institutions have basically taken it over after ETFs were released. Some say that BlackRock and the US government are using BitCoin as a vessel to suck in retail (small investor) money, and they use BitCoin as a liquidity reservoir, which they will empty in case of a banking crisis or government debt crisis. So Bitcoin is a buffer and will be the first to go, as we saw in this occasion.
Even gold and silver and other commodities are down, but most likely they are down because margin calls hit the market and liquidity is drained, but gold is not necessarily the first asset from liquidity is drained. If March 2020 is any indicator, the gold slump was relatively shallow and it can continue to rise higher from external buying, and the declining confidence on the western FIAT system."
The point being, when this washes out we will see just how much real value various assets have (including the Dollar).
Like Jim Rickards says, everything will go down when the stuff hits the fan (including gold) because people will be desperately scrabbling around for any assests. The question is which assets will climb back up once they've dusted themselves down and which will be in deep depression?
Moon calls out the AI bubble, "Another hype that finally receives much deserved scrutiny are the glorified but unreliable machine learning algorithms currently marketed as 'Artificial Intelligence'. No profitable use-case has been made for billions of bad investments in these."
Interestingly, the Aussie Hugh White, speaking in NZ, mentions some of these issues and argues that--even supposing they have promise--AU and NZ will never be players, only buyers. So why ties themselves to only one supplier, the US?
Yep, just caught that. Much easier for an economic midwit like me to understand. I think Israel is in a desperate position, although you'd never guess it from the hubris coming out of Tel Aviv. If the US does get involved, it is certainly not going to win, and will probably lose. And means Israel's main protector is out of contention. Not great strategic thinking, is it?
The Iranians are already pretty canny operators, but I imagine they are also getting some good advice from Moscow on how to beat the West.