investmentwatchblog--2020-06-12--The Unique Ways Oil Companies Are Looking To Avoid Bankruptcy

Many U.S. shale firms have cruised through the past couple of years by borrowing money and drilling new wells , making the United States the world ’ s top crude oil producer .
The strategy worked for a while , especially when oil prices were around $ 60 a barrel .
But this year ’ s oil price crash exposed the financial vulnerability of many U.S. shale companies who are now fighting for survival .
All producers across the U.S. patch pulled back production volumes in April and May in response to the collapse in prices .
For some oil @ @ @ @ @ @ @ will not be enough to save them from defaulting on debt or seeking restructuring as cash flows are shrinking , while the window of access to capital markets and new debt remains , for the most part , closed .
Those firms who choose not to seek ( or are not forced to seek ) protection from creditors via Chapter 11 restructuring could look at other options to avoid bankruptcy , some of which may be a little unconventional .
Today , unconventional may be an understatement when it comes to describing the @ @ @ @ @ @ @ .
All options – regardless of how ( un ) common they are – are on the table for struggling oil producers .
Industry consolidation , private equity firms acquiring assets or distressed companies , banks ending up holding oil and gas assets , or power utilities buying their providers of energy could be some of the options that oil firms might consider , Suzy Taherian , who worked with Exxon and Chevron at the start of her career , writes in Forbes .
U.S. shale firms have fewer financing options now than @ @ @ @ @ @ @ Thus could drive consolidation in the industry with some attractive M & A opportunities emerging , according to Robert Polk , principal analyst with Wood Mackenzie ’ s U.S. Corporate Research team , covering Lower 48 independents .
However , the industry isn ’ t launching into a buying spree just yet , due to the heightened uncertainty and volatility in the oil market .
The U.S. upstream deal market collapsed in the first quarter of 2020 , with all M & A transactions occurring before the oil price crash in early March @ @ @ @ @ @ @ Upstream M & A Review of energy data analytics company Enverus .
The largest deals in Q1 included bankruptcy sales and a royalty deal , Enverus ’ s analysis showed .
There may be opportunities ahead for select buyers who have access to capital , but the restart of M & As will likely take place when oil prices stabilize .
In Texas alone , M & A deals plummeted in Q1 with the collapse in oil prices .
The deals dropped off so much so that the energy industry was not the @ @ @ @ @ @ @ the first time in more than 12 years , Claire Poole from The Texas Lawbook wrote in the Houston Chronicle last month .
Going forward , the international oil majors will be the only companies left who can afford to buy shale assets at bargain prices , Boston Consulting Group said in an analysis in April .
However , the current priorities of supermajors—preserving cash and , where possible , dividends–and the uncertainty about the market recovery would likely mean slow M & A activity in the coming months .
Majors will also @ @ @ @ @ @ @ if they consider acquisitions , BCG said .
“ Given these constraints , oil and gas deals will be thin on the ground in the months ahead .
Although many billions of dollars of assets and companies are up for sale , the supply of large , world-class ones is limited , ” BCG noted .
Lenders to the oil and gas industry may choose to refinance loans to struggling firms with some kind of transaction that converts debt into equity rather than allowing them to default on debt and declare bankruptcy , @ @ @ @ @ @ @ CreditSights , cited by MarketWatch , Citigroup , Wells Fargo , Bank of America , and JP Morgan had the highest amounts of loans outstanding to energy firms as of the end of 2019 .
In terms of the percentage of energy loans of all loans , Goldman Sachs leads the ranking with 11.2 percent .
According to Reuters sources familiar with plans at the banks , Citigroup , Wells Fargo , Bank of America , and JP Morgan started working in early April on forming independent companies that would manage oil and @ @ @ @ @ @ @ became unable to pay back loans .
The process could take months , but it could allow banks to hold to the assets until conditions and oil prices improve to sell them at fair values , instead of at fire-sales for pennies on the dollar .
Some distressed energy producers could find their potential saviors among their utility customers , according to Taherian , who says that struggling oil and gas firms have approached some utilities looking for a possible friendly buyer .
This would be an unconventional approach to saving oil firms @ @ @ @ @ @ @ , nothing is off the table when it comes to the oil industry .
Meanwhile , between January and May , a total of 18 oil and gas firms filed for bankruptcy protection in North America – five in Q1 and 13 in the first two months of Q2 , law firm Haynes and Boone said in its latest Oil Patch Bankruptcy Monitor with data to May 31 .
“ Lower for longer remains the watchword for producers and their creditors .
It is reasonable to expect that a substantial number of producers @ @ @ @ @ @ @ in bankruptcy even if oil prices recover over the next few months , ” Haynes and Boone said .

By Tsvetana Paraskova
Many U.S. shale firms have cruised through the past couple of years by borrowing money and drilling new wells, making the United States the world’s top crude oil producer. The strategy worked for a while, especially when oil prices were around $60 a barrel.
But this year’s oil price crash exposed the financial vulnerability of many U.S. shale companies who are now fighting for survival. All producers across the U.S. patch pulled back production volumes in April and May in response to the collapse in prices.
For some oil and gas firms, reduced capital budgets will not be enough to save them from defaulting on debt or seeking restructuring as cash flows are shrinking, while the window of access to capital markets and new debt remains, for the most part, closed.
Those firms who choose not to seek (or are not forced to seek) protection from creditors via Chapter 11 restructuring could look at other options to avoid bankruptcy, some of which may be a little unconventional.
Today, unconventional may be an understatement when it comes to describing the oil industry’s state of affairs. All options – regardless of how (un)common they are – are on the table for struggling oil producers.
Industry consolidation, private equity firms acquiring assets or distressed companies, banks ending up holding oil and gas assets, or power utilities buying their providers of energy could be some of the options that oil firms might consider, Suzy Taherian, who worked with Exxon and Chevron at the start of her career, writes in Forbes.
Mergers & Acquisitions Hit By Uncertainty
U.S. shale firms have fewer financing options now than they did in the 2015-2016 downturn. Thus could drive consolidation in the industry with some attractive M&A opportunities emerging, according to Robert Polk, principal analyst with Wood Mackenzie’s U.S. Corporate Research team, covering Lower 48 independents.
However, the industry isn’t launching into a buying spree just yet, due to the heightened uncertainty and volatility in the oil market.
The U.S. upstream deal market collapsed in the first quarter of 2020, with all M&A transactions occurring before the oil price crash in early March, according to the Q1 2020 U.S. Upstream M&A Review of energy data analytics company Enverus. The largest deals in Q1 included bankruptcy sales and a royalty deal, Enverus’s analysis showed. There may be opportunities ahead for select buyers who have access to capital, but the restart of M&As will likely take place when oil prices stabilize.
In Texas alone, M&A deals plummeted in Q1 with the collapse in oil prices. The deals dropped off so much so that the energy industry was not the leading sector in dealmaking in Texas for the first time in more than 12 years, Claire Poole from The Texas Lawbook wrote in the Houston Chronicle last month.
Going forward, the international oil majors will be the only companies left who can afford to buy shale assets at bargain prices, Boston Consulting Group said in an analysis in April. However, the current priorities of supermajors—preserving cash and, where possible, dividends–and the uncertainty about the market recovery would likely mean slow M&A activity in the coming months. Majors will also be likely looking to scoop top-quality assets if they consider acquisitions, BCG said.
We are primarily funded by readers. Please subscribe and donate to support us!
“Given these constraints, oil and gas deals will be thin on the ground in the months ahead. Although many billions of dollars of assets and companies are up for sale, the supply of large, world-class ones is limited,” BCG noted.
Banks Could End Up Managing Oil & Gas Assets
Lenders to the oil and gas industry may choose to refinance loans to struggling firms with some kind of transaction that converts debt into equity rather than allowing them to default on debt and declare bankruptcy, Taherian argues.
According to research firm CreditSights, cited by MarketWatch, Citigroup, Wells Fargo, Bank of America, and JP Morgan had the highest amounts of loans outstanding to energy firms as of the end of 2019. In terms of the percentage of energy loans of all loans, Goldman Sachs leads the ranking with 11.2 percent.
According to Reuters sources familiar with plans at the banks, Citigroup, Wells Fargo, Bank of America, and JP Morgan started working in early April on forming independent companies that would manage oil and gas assets in case distressed oil firms became unable to pay back loans. The process could take months, but it could allow banks to hold to the assets until conditions and oil prices improve to sell them at fair values, instead of at fire-sales for pennies on the dollar.
Utilities Acquiring Their Energy Providers
Some distressed energy producers could find their potential saviors among their utility customers, according to Taherian, who says that struggling oil and gas firms have approached some utilities looking for a possible friendly buyer.
This would be an unconventional approach to saving oil firms from going under, but these days, nothing is off the table when it comes to the oil industry.
North American Oil Bankruptcies Set To Surge
Meanwhile, between January and May, a total of 18 oil and gas firms filed for bankruptcy protection in North America – five in Q1 and 13 in the first two months of Q2, law firm Haynes and Boone said in its latest Oil Patch Bankruptcy Monitor with data to May 31.
“Lower for longer remains the watchword for producers and their creditors. It is reasonable to expect that a substantial number of producers will continue to seek protection from creditors in bankruptcy even if oil prices recover over the next few months,” Haynes and Boone said.
By Tsvetana Paraskova for Oilprice.com


investmentwatchblog--2020-06-12--The Employment Situation Is Still A Disaster

Last Friday , the US Bureau of Labor Statistics released new unemployment data .
The report surprised many because it showed a decrease in the unemployment rate , while many observers had expected an increase .
According to the official headline ( seasonally adjusted ) number , the unemployment rate was 13.3 percent in May .
That was down from April ’ s rate of 14.7 percent .
This data point was seized upon by commentators who insist there will be a “ v-shaped ” recovery .
“ The economy is fundamentally in great shape , ” this narrative goes @ @ @ @ @ @ @ as soon as mandated lockdowns are lifted.
” Those who support this narrative thus concluded May ’ s drop in unemployment proved the “ V-shaped ” recovery was already under way .
But it may yet be much too early to rejoice and declare the economy on the mend .
For one , it turns out the unemployment rate in May might have actually increased , depending on how the “ absent ” workers are counted .
This was called a misclassification error ” by BLS economists , and was noted in the @ @ @ @ @ @ @ : [ T ] here was also a large number of workers who were classified as employed but absent from work .
As was the case in March and April , household survey interviewers were instructed to classify em employed persons absent from work due to coronavirus- related business closures as unemployed on temporary layoff .
… However , it is apparent | that not all such workers were so classified .
BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address @ @ @ @ @ @ @ were recorded as employed but absent from work due to “ other reasons ” ( over and above the number absent for other reasons in a typical May ) had been classified as unemployed on temporary layoff , the overall unemployment rate would have been about 3 percentage points higher than reported ( on a not seasonally adjusted basis ) .
In other words , it is likely the unemployment rate was closer to around 16 or 17 percent .
How much did the misclassification error affect April ‘ s numbers ?
That @ @ @ @ @ @ @ we do know is that it ’ s rather odd to point to an unemployment rate of 16 percent and declare the economy to be roaring back or well into a “ V-shaped ” recovery .
At this time there is no evidence at all to support such a conclusion .
After all , the data that has come out since Friday ’ s numbers hardly points to an economy that ’ s roaring back .
New data on initial unemployment claims released today shows 1.5 million new workers filed for unemployment over @ @ @ @ @ @ @ by some commentators as great news .
Yes , this number was “ good ” compared the previous 11 weeks , but hardly anything to celebrate .
After all , keep in mind that during the Great Recession , initial claims peaked at around 960,000 .
So , even accounting for growth in total employment , a jobless claims number of 1.5 million is still a disaster .
But this round of job losses certainly didn ’ t peak at 1.5 million .
It peaked ( hopefully ) at 6.2 million in early @ @ @ @ @ @ @ s 1.5 million is just another 1.5 million in addition to the 40.3 million in newly unemployed that have cropped up since March .
To put this in perspective , we note that over the past decade , the US economy has added 22 million payroll jobs , ( and has lost 19.5 million job since the end of 2019 ) : Basically , job losses in recent months are “ off the charts.
” Meanwhile , in May , our alleged V-shaped recovery added back 2.9 million jobs from April to May @ @ @ @ @ @ @ percent of the 40 million people who filed for unemployment claims in recent months .
Yes , that 2.9 million jobs is an improvement , but not exactly a reason to throw a party .
Here ’ s another way to look at the employment situation .
How far below the jobs peak are we , even after May ’ s gains ?
Let ’ s compare to other jobs recovery periods .
Here we see the current job losses indexed to the peak level .
Using payroll jobs data we see that @ @ @ @ @ @ @ 2019 .
This may have very well been largely due to wintertime drops in employment .
But , of course , total jobs then collapsed in March , and to a level well below anything we ’ ve seen in well over 40 years : In April , total jobs were at 85 percent of peak levels .
Happily , that number improved to 87 percent in May .
But , it ’ s quite clear we have a long way to go .
Now , it ’ s entirely possible job growth @ @ @ @ @ @ @ past 40 years .
That trend has been one in which each new round of job losses took longer and longer to be erased .
For instance , it took more than six years for total jobs after the Great Recession to reach previous peak levels .
That ’ s compared to just two-and-a-half years during the early-90s recession .
So , are May ’ s job gains just the first part of a rapid surge of employment back toward the previous peak ?
Or will job gains be a long , hard @ @ @ @ @ @ @ case during the past twenty years ?
But in order to have a recovery that is indeed V-shaped we ’ ll need to see job gains of several million with each passing month .
The economy is in a very odd position , to say the least , so I ’ m not saying that ’ s impossible .
But I ’ m also looking in vain for any evidence that such a thing is likely .
After all , the economy was already weakening in late 2019 , as suggested by the @ @ @ @ @ @ @ the repo market , and the Fed ’ s repeated cuts to the federal funds at the time .
For what it ’ s worth , Federal Reserve economists have already weighed in against a V-shaped recovery .
As Bloomberg reports : In updating its projections for growth and unemployment Wednesday , the Federal Reserve poured cold water on the notion that last week ’ s surprise jobs report signaled a sharp V-shaped recovery for the U.S. economy .
… The Fed ’ s latest economic forecasts suggest a 6.5 % contraction in @ @ @ @ @ @ @ take 2 years to reverse .
The projection for the unemployment rate was also downbeat with a 9.3 % unemployment rate at the end of the year .
Fed economists have shown no particular skill in producing accurate forecasts , but the Fed does tend to take a more optimistic and measured tone than is frequently warranted .
Fed economists commonly predicted a very fast bounceback after the Great Recession .
They were wrong .
And during the past twenty years Fed reports typically sooth the reader with descriptions of an economy that @ @ @ @ @ @ @ ” The fact the Fed doesn ’ t have much good news to share suggests there isn ’ t much good news to share .
On the other hand it ’ s not too late to put into place some policy measures that could help spur a fast recovery .
But what is required is contrary to what most policymakers consider to be politically acceptable : widespread deregulation , lowering of minimum wages , and free trade .
These measures would significantly reduce costs to employers and bring a real jobs bounce to @ @ @ @ @ @ @ realities of the 2020 economy .
Ryan McMaken is a senior editor at the Mises Institute .

by Ryan McMaken of Mises Institute
Last Friday, the US Bureau of Labor Statistics released new unemployment data. The report surprised many because it showed a decrease in the unemployment rate, while many observers had expected an increase.
According to the official headline (seasonally adjusted) number, the unemployment rate was 13.3 percent in May. That was down from April’s rate of 14.7 percent. This data point was seized upon by commentators who insist there will be a “v-shaped” recovery. “The economy is fundamentally in great shape,” this narrative goes, “and everything will bounce back as soon as mandated lockdowns are lifted.”
Those who support this narrative thus concluded May’s drop in unemployment proved the “V-shaped” recovery was already under way.
But it may yet be much too early to rejoice and declare the economy on the mend.
For one, it turns out the unemployment rate in May might have actually increased, depending on how the “absent” workers are counted. This was called a misclassification error” by BLS economists, and was noted in the BLS report itself, near the end :
[T]here was also a large number of workers who were classified as employed but absent from work. As was the case in March and April, household survey interviewers were instructed to classify em employed persons absent from work due to coronavirus- related business closures as unemployed on temporary layoff. … However, it is apparent | that not all such workers were so classified. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue. If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis).
In other words, it is likely the unemployment rate was closer to around 16 or 17 percent. How much did the misclassification error affect April‘s numbers? That’s not quite clear.
What we do know is that it’s rather odd to point to an unemployment rate of 16 percent and declare the economy to be roaring back or well into a “V-shaped” recovery. At this time there is no evidence at all to support such a conclusion.
After all, the data that has come out since Friday’s numbers hardly points to an economy that’s roaring back. New data on initial unemployment claims released today shows 1.5 million new workers filed for unemployment over the past week. This was hailed by some commentators as great news.
Yes, this number was “good” compared the previous 11 weeks, but hardly anything to celebrate. After all, keep in mind that during the Great Recession, initial claims peaked at around 960,000. So, even accounting for growth in total employment, a jobless claims number of 1.5 million is still a disaster. But this round of job losses certainly didn’t peak at 1.5 million. It peaked (hopefully) at 6.2 million in early April.
Thus, last week’s 1.5 million is just another 1.5 million in addition to the 40.3 million in newly unemployed that have cropped up since March.
To put this in perspective, we note that over the past decade, the US economy has added 22 million payroll jobs, (and has lost 19.5 million job since the end of 2019):
Basically, job losses in recent months are “off the charts.” Meanwhile, in May, our alleged V-shaped recovery added back 2.9 million jobs from April to May. But that’s only 7 percent of the 40 million people who filed for unemployment claims in recent months.
Yes, that 2.9 million jobs is an improvement, but not exactly a reason to throw a party.
We are primarily funded by readers. Please subscribe and donate to support us!
Here’s another way to look at the employment situation. How far below the jobs peak are we, even after May’s gains?
Let’s compare to other jobs recovery periods. Here we see the current job losses indexed to the peak level. Using payroll jobs data we see that employment was already off peak in late 2019. This may have very well been largely due to wintertime drops in employment. But, of course, total jobs then collapsed in March, and to a level well below anything we’ve seen in well over 40 years:
In April, total jobs were at 85 percent of peak levels. Happily, that number improved to 87 percent in May.
But, it’s quite clear we have a long way to go.
Now, it’s entirely possible job growth will completely buck the trend of the past 40 years. That trend has been one in which each new round of job losses took longer and longer to be erased. For instance, it took more than six years for total jobs after the Great Recession to reach previous peak levels. That’s compared to just two-and-a-half years during the early-90s recession.
So, are May’s job gains just the first part of a rapid surge of employment back toward the previous peak? Or will job gains be a long, hard slog as they have typically been the case during the past twenty years?
That’s unknown at this point.
But in order to have a recovery that is indeed V-shaped we’ll need to see job gains of several million with each passing month. The economy is in a very odd position, to say the least, so I’m not saying that’s impossible. But I’m also looking in vain for any evidence that such a thing is likely. After all, the economy was already weakening in late 2019, as suggested by the re-launch of QE to “stabilize” the repo market, and the Fed’s repeated cuts to the federal funds at the time.
For what it’s worth, Federal Reserve economists have already weighed in against a V-shaped recovery. As Bloomberg reports :In updating its projections for growth and unemployment Wednesday, the Federal Reserve poured cold water on the notion that last week’s surprise jobs report signaled a sharp V-shaped recovery for the U.S. economy. … The Fed’s latest economic forecasts suggest a 6.5% contraction in gross domestic product in 2020 that would take 2 years to reverse. The projection for the unemployment rate was also downbeat with a 9.3% unemployment rate at the end of the year.
Fed economists have shown no particular skill in producing accurate forecasts, but the Fed does tend to take a more optimistic and measured tone than is frequently warranted. Fed economists commonly predicted a very fast bounceback after the Great Recession. They were wrong. And during the past twenty years Fed reports typically sooth the reader with descriptions of an economy that is “moderate” or “strengthening.” The fact the Fed doesn’t have much good news to share suggests there isn’t much good news to share.
On the other hand it’s not too late to put into place some policy measures that could help spur a fast recovery. But what is required is contrary to what most policymakers consider to be politically acceptable: widespread deregulation, lowering of minimum wages, and free trade. These measures would significantly reduce costs to employers and bring a real jobs bounce to those employers who adapted to the new realities of the 2020 economy.
Contact Ryan McMaken
Ryan McMaken is a senior editor at the Mises Institute.


investmentwatchblog--2020-06-12--Governments are offering Covid discounts… on citizenship

If 2020 has taught us anything so far , it ’ s that anything is possible… even things that we previously believed to be unthinkable .
Angry Twitter mobs can take over the country .
Private property rights can be suspended .
The entire economy can be shut down .
And it can all happen in an instant .
One day everything is normal .
The next , poof .
That ’ s why , as I discussed earlier this week , the need for a Plan B is now obvious .
And part of that , frankly , might @ @ @ @ @ @ @ Maybe you ’ re sick and tired of massive government overreach , economic buffoonery , injustice , social chaos , Twitter mobs , etc .
Or perhaps you are simply inclined to a more quiet , peaceful way of life .
It doesn ’ t hurt to at least consider your options .
This is why I ’ ve long advocated having a second passport .
Having a second passport means that , no matter what , you ’ ll always have another place to go .
We ’ ve witnessed over the @ @ @ @ @ @ @ their borders to non-residents… but citizens are still allowed in .
There are four main ways to obtain a second passport : through ancestry , naturalization , “ flexibility ” ( like marriage , adoption , or even converting to Judaism ) , or investment .
The citizenship by investment option allows you to become a citizen of another country by buying property , investing in a business , or giving a direct donation to a country ’ s development fund .
It is the quickest option for acquiring a second passport , @ @ @ @ @ @ @ right now , citizenship by investment is going on sale .
A little background is in order : Right after the 2008 global financial crisis , there was a boom in citizenship by investment options .
Countries were in a deep financial mess , and these programs gave them a way to raise revenue without raising taxes .
A few of these programs popped up in the Carribean .
And soon places like St. Lucia , Saint Kitts and Nevis , Grenada , Antigua and Barbuda , and Dominica were all competing for @ @ @ @ @ @ @ Maria brought widespread devastation to the area in 2017 , Saint Kitts and Nevis became the first to drop prices .
This sparked a ‘ price war ’ with the other Citizenship-by-Investment programs in the region , and soon prices were cut in half .
But here we are with global tourism on hold .
Airline traffic has fallen more than 95 % , and hotel occupancy has collapsed .
Most of these Caribbean countries rely on tourism as their primary economic engine , so tax revenue has plummeted .
In response , @ @ @ @ @ @ @ offer a Covid-19 discount on its citizenship by investment program .
You can now buy a $ 250,000 bond from St. Lucia which will be paid back ( without interest ) after five years .
That means you could buy citizenship for as little as the cost of the filing fee– about $ 40,000 .
But keep in mind the cost of the value of that money lost to inflation .
Then there is the opportunity cost of having $ 250,000 tied up for five years .
Plus the risk of St. Lucia @ @ @ @ @ @ @ , for some people it is an option worth considering .
Antigua and Barbuda ( which has a similar program ) has also cut its fees through October 31 , 2020 .
More countries will likely follow and offer Covid-related discounts .
And just as we saw a wave of new programs after the 2008 crisis , there will likely be another wave of new programs as well .
Think about that silver lining in these crazy times .
Governments are competing for economic citizens .
And that means the cost of acquiring @ @ @ @ @ @ @ That is especially appealing for people who are thinking about moving abroad .
After all , with so many people working remotely now , why bother staying put in your home country ?
The entire world is on the table .
And moving abroad can also provide substantial tax benefits .
For US citizens , living abroad means enjoying the Foreign Earned Income Exclusion , which allows you to earn $ 107,600 without paying a penny of US federal income tax if you live overseas .
And if you ’ re married , @ @ @ @ @ @ @ 215,200– again , completely free of US federal income tax .
If you ’ re not a US citizen , you can typically divorce yourself from your home country ’ s tax system by moving abroad .
So in addition to ensuring you have another place to go if your home country ’ s lockdowns become crazy again , you could also create substantial tax and lifestyle benefits for yourself .
Either way , it just makes sense to have a Plan B .
And a second passport is a perfectly reasonable part @ @ @ @ @ @ @ our free , in-depth article on citizenship by investment , so you can check that out for more information .
And if you ’ re a member of our premium service Sovereign Man : Confidential , we recently sent you a detailed report on the changes to St. Lucia ’ s program .

by Simon Black
If 2020 has taught us anything so far, it’s that anything is possible… even things that we previously believed to be unthinkable.
Angry Twitter mobs can take over the country. Private property rights can be suspended. The entire economy can be shut down.
And it can all happen in an instant. One day everything is normal. The next, poof.
That’s why, as I discussed earlier this week, the need for a Plan B is now obvious.
And part of that, frankly, might mean having another place to go.
Maybe you’re sick and tired of massive government overreach, economic buffoonery, injustice, social chaos, Twitter mobs, etc.
Or perhaps you are simply inclined to a more quiet, peaceful way of life.
It doesn’t hurt to at least consider your options.
This is why I’ve long advocated having a second passport.
Having a second passport means that, no matter what, you’ll always have another place to go.
We’ve witnessed over the past few months that countries have closed their borders to non-residents… but citizens are still allowed in.
There are four main ways to obtain a second passport: through ancestry, naturalization, “flexibility” (like marriage, adoption, or even converting to Judaism), or investment.
The citizenship by investment option allows you to become a citizen of another country by buying property, investing in a business, or giving a direct donation to a country’s development fund.
It is the quickest option for acquiring a second passport, but also the most expensive.
But right now, citizenship by investment is going on sale.
A little background is in order:
Right after the 2008 global financial crisis, there was a boom in citizenship by investment options.
Countries were in a deep financial mess, and these programs gave them a way to raise revenue without raising taxes.
A few of these programs popped up in the Carribean. And soon places like St. Lucia, Saint Kitts and Nevis, Grenada, Antigua and Barbuda, and Dominica were all competing for new citizens.
When hurricanes Irma and Maria brought widespread devastation to the area in 2017, Saint Kitts and Nevis became the first to drop prices.
We are primarily funded by readers. Please subscribe and donate to support us!
This sparked a ‘price war’ with the other Citizenship-by-Investment programs in the region, and soon prices were cut in half.
But here we are with global tourism on hold. Airline traffic has fallen more than 95%, and hotel occupancy has collapsed.
Most of these Caribbean countries rely on tourism as their primary economic engine, so tax revenue has plummeted.
In response, St. Lucia is the first country to offer a Covid-19 discount on its citizenship by investment program. You can now buy a $250,000 bond from St. Lucia which will be paid back (without interest) after five years.
That means you could buy citizenship for as little as the cost of the filing fee– about $40,000.
But keep in mind the cost of the value of that money lost to inflation. Then there is the opportunity cost of having $250,000 tied up for five years. Plus the risk of St. Lucia defaulting on its bond obligations.
Still, for some people it is an option worth considering.
Antigua and Barbuda (which has a similar program) has also cut its fees through October 31, 2020. More countries will likely follow and offer Covid-related discounts.
And just as we saw a wave of new programs after the 2008 crisis, there will likely be another wave of new programs as well.
Think about that silver lining in these crazy times. Governments are competing for economic citizens. And that means the cost of acquiring another citizenship will continue to drop.
That is especially appealing for people who are thinking about moving abroad.
After all, with so many people working remotely now, why bother staying put in your home country? The entire world is on the table.
And moving abroad can also provide substantial tax benefits.
For US citizens, living abroad means enjoying the Foreign Earned Income Exclusion, which allows you to earn $107,600 without paying a penny of US federal income tax if you live overseas.
And if you’re married, you can double up and earn $215,200– again, completely free of US federal income tax.
If you’re not a US citizen, you can typically divorce yourself from your home country’s tax system by moving abroad.
So in addition to ensuring you have another place to go if your home country’s lockdowns become crazy again, you could also create substantial tax and lifestyle benefits for yourself.
Either way, it just makes sense to have a Plan B. And a second passport is a perfectly reasonable part of that.
Our team recently updated our free, in-depth article on citizenship by investment, so you can check that out for more information.
And if you’re a member of our premium service Sovereign Man: Confidential, we recently sent you a detailed report on the changes to St. Lucia’s program.


investmentwatchblog--2020-06-12--Chuck E. Cheese Approaches Bankruptcy, May Permanently Close All Stores

After months of keeping their doors shut amid the coronavirus pandemic , popular kid ’ s restaurant Chuck E. Cheese @ @ @ @ @ The brand behind the food-and-games establishment , CEC Entertainment , is nearly $ 1 billion @ @ @ @ @ to approach lenders for a $ 200 million loan to keep the business afloat , @ @ @ @ @ Journal .
On Friday , the brand announced it would be offering its top executives @ @ @ @ @ that they would stay on in trying times .
CEC said it would pay nearly @ @ @ @ @ three executives , including $ 1.3 million to CEO David McKillips , the Securities and @ @ @ @ @ The Texas-based restaurant currently operates 610 locations in 47 states but had to close its @ @ @ @ @ , making it extremely difficult for the company to raise capital .
In April , @ @ @ @ @ considering refinancing , bankruptcy and restructuring after the pandemic began to cause strain on the @ @ @ @ @ reported .

After months of keeping their doors shut amid the coronavirus pandemic, popular kid’s restaurant Chuck E. Cheese may not ever reopen.
The brand behind the food-and-games establishment, CEC Entertainment, is nearly $1 billion in debt and is trying to approach lenders for a $200 million loan to keep the business afloat, according to the Wall Steet Journal.
On Friday, the brand announced it would be offering its top executives retention bonuses with the hopes that they would stay on in trying times.
CEC said it would pay nearly $3 million total to three executives, including $1.3 million to CEO David McKillips, the Securities and Exchange Commission filing showed. We are primarily funded by readers. Please subscribe and donate to support us!
The Texas-based restaurant currently operates 610 locations in 47 states but had to close its stores when the pandemic struck, making it extremely difficult for the company to raise capital.
In April, the brand said they were considering refinancing, bankruptcy and restructuring after the pandemic began to cause strain on the restaurant industry, the WSJ reported. people.com/food/chuck-e-cheese-approaches-bankruptcy-possibly-close-all-stores/


investmentwatchblog--2020-06-12--No More Washington or America

No More Washington or America

Virtue signaling in the US of A has already reached new heights , and there ’ s little reason to believe it won ’ t reach even much higher as we happily signal along .
In the process , we will find that applying logic to the undertaking will take us to unanticipated , and highly undesirable ( for most protesters ) , places .
But by then a lot of damage , whether we think that ’ s a good thing or not , will have been done .
HBO opened a Pandora ’ s Box all of its @ @ @ @ @ @ @ Wind , despite that fact that Hattie McDaniel was the first black American Oscar nominee AND winner .
Let ’ s erase that too .
Along with ALL other films that depict slavery in the “ wrong ” light , or , better yet , that depict slavery at all .
Let ’ s ban all links to slavery , let ’ s pretend it never existed , because if we don ’ t we will find it ’ s impossible to decide between what we do and do not want to last @ @ @ @ @ @ @ preferences or opinions , and neither do all black people .
And while we ’ re talking movies , and Columbus statues are toppled across the nation because Christopher ( before there were any “ Americans ” ) treated indigenous Americans poorly , do let ’ s ban all Hollywood westerns in which “ Indians ” are depicted as cannon fodder .
No more John Wayne for you .
Gone even the few non-westerns Wayne appeared in , because his name and face are forever linked to killing “ Indians ” .
No @ @ @ @ @ @ @ ?
Just to name an example , Harper Lee ’ s To Kill a Mockingbird , arguably a great book and a good movie , depicts a white man “ being compassionate ” to a black man oppressed by other white men .
Can ’ t have that , the oppression is obviously racist and so is the good ( ! )
white ( ! )
man who ’ s the protagonist of the story , written by a white woman ( ! )
.
Let ’ s leaf through all American and @ @ @ @ @ @ @ millennium that describes slavery , including that which talks about “ good white ” men .
There are no good white men !
Anything to do with native Americans must go .
Because they were badly treated throughout the 500 years of history they share with white people ( Europeans ) .
They still are , just like African Americans .
Same difference .
Phillis Wheatley , Harriet Beecher Stowe , Alice Walker , Toni Morrison ?
Don ’ t think so .
They were all talking about slavery .
And we ’ @ @ @ @ @ @ @ that talk .
Frederick Douglass ?
You got to be kidding .
His autobiography is called “ Narrative of the Life of Frederick Douglass , an American Slave “ .
Isn ’ t that enough to topple him ?
James Baldwin , Ralph Ellison , they all remind us of a period we don ’ t want to be reminded of anymore .
It ’ s enough !
No more slavery !
Martin Luther King ?
Get serious , he talks about nothing but oppression .
He even claims black people in his @ @ @ @ @ @ @ is obviously not welcome anymore , he spoke just about exclusively from the viewpoint of an oppressed man .
Washington , D.C. is the capital of the United States of America .
George Washington was a slaveholder , he ’ s obviously out .
D.C. stands for District of Columbia , named after Columbus , so that needs a new name .
The country gets its name from a Columbus contemporary and fellow explorer who was a slave holder and treated indigenous populations of the countries he “ visited ” no better than @ @ @ @ @ @ @ was a time when Washington , D.C. was the capital of the United States of America .
But those days must soon be gone .
How can you hold on to a name for your capital city that belongs to a man who was a brazen slave holder ?
Or the district the capital is in ?
And how can you breathe in a country named after a despicable Italian slaveholder and slave trader ?
The US constitution was largely written by slave holders .
We ’ re going to need a new @ @ @ @ @ @ @ of the Confederacy ” in the US .
I ’ m guessing Pelosi , once those 11 statues at the Capitol have been toppled , will start work on getting rid of the other 1736 too .
And mind you , this doesn ’ t yet include Columbus , Vespucci , or anyone else who ’ s “ mistreated ” , enslaved , murdered , native Americans .
We will easily have twice the 1747 number once we include those .
For that matter , if you ’ re Nancy Pelosi , how @ @ @ @ @ @ @ the “ kente cloth ” fabrics that originate with the Asanthi people that ruled in present-day Ghana from mid-1600s to mid-1900s , and were themselves … slaveholders and slave traders ?
Who sold god knows how many African slaves to European slave traders ?
How can you dress up in the garb of slave traders to protest the mistreatment of the grandchildren of slaves ?
Short circuit ?
Temporary ?
For all the protesters other than Pelosi , who herself obviously joined in only for political reasons , here ’ s a question @ @ @ @ @ @ @ only slavery on US soil ?
Because , you know , the Romans had slaves , many African tribes had slaves , present day Chinese people did .
Australia ?
Slave country if I ever saw one .
The deeper you dig into history , the more you will find .
I don ’ t want to bore you with an extensive list , because it would be too extensive .
Or maybe a second question , though it has mostly already been answered : Is this protest only about slavery , or @ @ @ @ @ @ @ ) in general ?
It ’ s already been answered in toppling the Columbus statues , since Christopher was not a slavetrader as far as we know , so , see above , we ’ re talking about both “ indians ” and “ negroes ” .
I use both derogatory terms on purpose , precisely because they paint the picture of what things used to be like .
That they are no longer tolerated tells a story all by itself .
And yes , much more is needed , but can that @ @ @ @ @ @ @ books and movies ?
Is that how those two terms were banned ?
We can not escape our past and probably that ’ s the reason we shouldn ’ t try .
What we need to do , what our role in the story is , is to not follow in the “ footsteps of wrong ” , and to do better .
Do we have a better chance at doing better and escaping “ wrong ” if and when we ban all symbols of it , so we can no longer see @ @ @ @ @ @ @ to let all these things last so we can point at them to say : that is wrong !
?
If all the statues and books and movies are gone , how will our children know ?
And I haven ’ t even mentioned the music yet , the unique melting pot of European melodies and African beats that gave the world blues and jazz and rock , all born from the plantation life that so many stories depict , and the music itself , growing under the statuesque eyes of the likes @ @ @ @ @ @ @ Maybe if you like your blues and jazz and rock and rap , you should call for the statues and books to remain standing , because without the narratives they bear witness to , there would be no blues , or anything that came after .
Maybe you should celebrate your ancestors ’ genius that gave America ( or whatever you wind up calling it soon ) its music , which , accidentally , has conquered all the countries of all the slavetraders of the past .
Maybe the music , the books @ @ @ @ @ @ @ their oppressors , and maybe you risk tainting that hard-fought victory by trying to erase the memories of those they fought against to attain it .
And no , you can ’ t just pick the books and statues and music you would like and dump everything else .
It doesn ’ t work that way .
Your neighbor might have slightly different criteria and pick other favorites , and so on .
You can ’ t say we ’ ll hold on to Toni Morrison and throw out Harper Lee , you @ @ @ @ @ @ @ Wind but keep Guess Who ’ s Coming to Dinner , because each of these are part of the exact same story .
It ’ s a package deal , called history .
And you ’ re not going to get the best end of that deal by pretending history doesn ’ t exist .

by Raúl Ilargi Meijer
Cy Twombly Achilles’ Shield 1978
Virtue signaling in the US of A has already reached new heights, and there’s little reason to believe it won’t reach even much higher as we happily signal along. In the process, we will find that applying logic to the undertaking will take us to unanticipated, and highly undesirable (for most protesters), places. But by then a lot of damage, whether we think that’s a good thing or not, will have been done.
HBO opened a Pandora’s Box all of its own when it pulled Gone With the Wind, despite that fact that Hattie McDaniel was the first black American Oscar nominee AND winner. Let’s erase that too. Along with ALL other films that depict slavery in the “wrong” light, or, better yet, that depict slavery at all.
Let’s ban all links to slavery, let’s pretend it never existed, because if we don’t we will find it’s impossible to decide between what we do and do not want to last. not all people have the same preferences or opinions, and neither do all black people.
And while we’re talking movies, and Columbus statues are toppled across the nation because Christopher (before there were any “Americans”) treated indigenous Americans poorly, do let’s ban all Hollywood westerns in which “Indians” are depicted as cannon fodder. No more John Wayne for you. Gone even the few non-westerns Wayne appeared in, because his name and face are forever linked to killing “Indians”. No more Duke.
And why stop there? Just to name an example, Harper Lee’s To Kill a Mockingbird, arguably a great book and a good movie, depicts a white man “being compassionate” to a black man oppressed by other white men. Can’t have that, the oppression is obviously racist and so is the good(!) white(!) man who’s the protagonist of the story, written by a white woman(!).
Let’s leaf through all American and other world literature of the past half millennium that describes slavery, including that which talks about “good white” men. There are no good white men!
Anything to do with native Americans must go. Because they were badly treated throughout the 500 years of history they share with white people (Europeans). They still are, just like African Americans. Same difference. Phillis Wheatley, Harriet Beecher Stowe, Alice Walker, Toni Morrison? Don’t think so. They were all talking about slavery. And we’re toppling statues in order to stop that talk.
Frederick Douglass? You got to be kidding. His autobiography is called “Narrative of the Life of Frederick Douglass, an American Slave“. Isn’t that enough to topple him? James Baldwin, Ralph Ellison, they all remind us of a period we don’t want to be reminded of anymore. It’s enough! No more slavery!
Martin Luther King? Get serious, he talks about nothing but oppression. He even claims black people in his lifetime were still slaves. Muhammad Ali is obviously not welcome anymore, he spoke just about exclusively from the viewpoint of an oppressed man.
Washington, D.C. is the capital of the United States of America. George Washington was a slaveholder, he’s obviously out. D.C. stands for District of Columbia, named after Columbus, so that needs a new name. The country gets its name from a Columbus contemporary and fellow explorer who was a slave holder and treated indigenous populations of the countries he “visited” no better than Columbus did. Wikipedia:
Amerigo Vespucci wrote his will in April 1511. He left most of his modest estate, including five household slaves, to his wife.
[..] After Hispaniola they made a brief slave raid in the Bahamas, capturing 232 natives and then returned to Spain.
There once was a time when Washington, D.C. was the capital of the United States of America. But those days must soon be gone. How can you hold on to a name for your capital city that belongs to a man who was a brazen slave holder? Or the district the capital is in? And how can you breathe in a country named after a despicable Italian slaveholder and slave trader?
The US constitution was largely written by slave holders. We’re going to need a new one.
We are primarily funded by readers. Please subscribe and donate to support us!
There are 1747 “symbols of the Confederacy” in the US. I’m guessing Pelosi, once those 11 statues at the Capitol have been toppled, will start work on getting rid of the other 1736 too. And mind you, this doesn’t yet include Columbus, Vespucci, or anyone else who’s “mistreated”, enslaved, murdered, native Americans. We will easily have twice the 1747 number once we include those.
For that matter, if you’re Nancy Pelosi, how and why do you dress up in the “kente cloth” fabrics that originate with the Asanthi people that ruled in present-day Ghana from mid-1600s to mid-1900s, and were themselves … slaveholders and slave traders? Who sold god knows how many African slaves to European slave traders? How can you dress up in the garb of slave traders to protest the mistreatment of the grandchildren of slaves? Short circuit? Temporary?
For all the protesters other than Pelosi, who herself obviously joined in only for political reasons, here’s a question: Do you oppose slavery, or only slavery on US soil? Because, you know, the Romans had slaves, many African tribes had slaves, present day Chinese people did. Australia? Slave country if I ever saw one. The deeper you dig into history, the more you will find. I don’t want to bore you with an extensive list, because it would be too extensive.
“There was no slavery in Australia.” Scott Morrison, 11.06.2020. What would you call this, then ? pic.twitter.com/gUfFnQbskj — Mike Carlton (@MikeCarlton01) June 11, 2020
Or maybe a second question, though it has mostly already been answered: Is this protest only about slavery, or about the oppression of people(s) in general? It’s already been answered in toppling the Columbus statues, since Christopher was not a slavetrader as far as we know, so, see above, we’re talking about both “indians” and “negroes”.
I use both derogatory terms on purpose, precisely because they paint the picture of what things used to be like. That they are no longer tolerated tells a story all by itself. And yes, much more is needed, but can that be achieved by toppling statues and banning books and movies? Is that how those two terms were banned?
We cannot escape our past and probably that’s the reason we shouldn’t try. What we need to do, what our role in the story is, is to not follow in the “footsteps of wrong”, and to do better. Do we have a better chance at doing better and escaping “wrong” if and when we ban all symbols of it, so we can no longer see it?
Or is our best chance to let all these things last so we can point at them to say: that is wrong!? If all the statues and books and movies are gone, how will our children know?
And I haven’t even mentioned the music yet, the unique melting pot of European melodies and African beats that gave the world blues and jazz and rock, all born from the plantation life that so many stories depict, and the music itself, growing under the statuesque eyes of the likes of Jefferson Davis or George Washington.
Maybe if you like your blues and jazz and rock and rap, you should call for the statues and books to remain standing, because without the narratives they bear witness to, there would be no blues, or anything that came after. Maybe you should celebrate your ancestors’ genius that gave America (or whatever you wind up calling it soon) its music, which, accidentally, has conquered all the countries of all the slavetraders of the past.
Maybe the music, the books, represent your ancestors’ victory over their oppressors, and maybe you risk tainting that hard-fought victory by trying to erase the memories of those they fought against to attain it.
And no, you can’t just pick the books and statues and music you would like and dump everything else. It doesn’t work that way. Your neighbor might have slightly different criteria and pick other favorites, and so on.
You can’t say we’ll hold on to Toni Morrison and throw out Harper Lee, you can’t dump Gone With the Wind but keep Guess Who’s Coming to Dinner, because each of these are part of the exact same story.
It’s a package deal, called history. And you’re not going to get the best end of that deal by pretending history doesn’t exist.


investmentwatchblog--2020-06-12--Bulls Beware: A Dark Cloud Is Forming Over Oil Markets

Bullish sentiment appears to have returned to the stock markets with a vengeance .
In a historic rally that has taken even die-hard bulls by surprise , the S & P 500 has managed to claw back all of its 2020 losses , taking just 53 sessions for the index to fully restore the nearly $ 10T in value it shed in an epic bear market .
The oil markets have been nearly as impressive .
After entering negative territory for the first time in history , U.S. WTI prices have briefly touched $ 40/bbl amid record production cuts and @ @ @ @ @ @ @ and gas stocks have doubled from their March 23 nadir , marking a sharp reversal from the precipitous drop that wiped out nearly two decades of gains .
There ’ s no shortage of bottom fishing opportunities in this market , with shares of bankrupt or near-bankrupt shale companies including Whiting Petroleum ( NYSE : WLL ) , Chesapeake Energy ( NYSE : CHK ) , California Resources Corp. ( NYSE : CRC ) and Valaris Plc ( NYSE : VAL ) as well as offshore drillers Borr Drilling Ltd ( NYSE : @ @ @ @ @ @ @ : NE ) , Seadrill ( NYSE : SDRL ) and TransOcean ( NYSE : RIG ) recording triple-digit gains over the past week alone .
But analysts are now saying investors need to pump their brakes .
A cross-section of Wall Street has warned that there ’ s too much irrational exuberance in the markets , and the oil price rally is not fully supported by fundamentals .
According to Warren Patterson , head of commodities strategy at ING , as well as analysts at Goldman Sachs , refining margins , aka @ @ @ @ @ @ @ the globe are still way off their norms , portending continuing weak global demand for distillates .
U.S. crack spreads clocked in at a mere $ 9/bbl last week , compared to $ 21 at the same time last year according to Reuters , while crack spreads for European diesel dropped to a record low of $ 2.90 .
Crack spreads are a good proxy for oil demand with falling spreads a sign of weak demand and vice-versa .
The badly squeezed margins for refiners is a worrying sign that global demand remains @ @ @ @ @ @ @ ongoing pick-up in crude prices only serving to worsen the margin contraction for the likes of Valero Energy Corp. ( NYSE : VLO ) , Marathon Petroleum Corp. ( NYSE : MPC ) and Phillips 66 ( NYSE : PSX ) .
WTI and Brent prices have staged a strong rally over the past few weeks after production cuts by OPEC+ and independent producers in the U.S. and elsewhere helped ease a huge supply glut and storage buildup .
On Saturday , OPEC and its allies agreed to extend the cuts by an @ @ @ @ @ @ @ on a monthly basis .
Global oil demand particularly in the giant markets of China and India appears to be recovering at a faster-than-expected clip , with crude imports in China surging 13 % in May to a record 11.3 million barrels per day and demand back to 90 % of pre-crisis levels .
Meanwhile , May sales in India were recorded at ~76 % of normal levels while U.S. gasoline demand has seen a 7 % uptick during the final week of May to clock in at 75 % of pre-COVID-19 levels @ @ @ @ @ @ @ the rebound in demand is the result of rising consumption or simply the result of refiners and traders stocking up on cheap crude .
ING ’ s Patterson and Ehsan Khoman at Japanese bank MUFG say the surge in demand could partly be the result of opportunistic buying by refiners .
Consequently , Goldman has predicted that Brent prices will pull back to $ 35 per barrel in the coming weeks from a recent high of $ 43 .
And they could be right .
According to Bloomberg , the United States ’ @ @ @ @ @ @ @ , is currently running its two crude units at just 58 % of their maximum rate of 424K bbl/day due to low demand and storage filling up .
The refinery ’ s fluid catalytic converter as well as all the hydrotreaters except the distillate hydrotreaters are running at minimum rates while rates on the coker have also been lowered .
In a previous article , we reported that giant oil traders have been storing millions of barrels of crude in the seas with a view to selling when prices improve in the coming @ @ @ @ @ @ @ the surge in demand .
At this juncture , it ’ s best for investors to adopt an attitude of cautious optimism .
On one hand , the bulls argue that OPEC+ has curtailed production too fast , with some oil executives eyeing the seemingly untouchable WTI prices of $ 70 in the current year .
On the other hand , poor refining margins are telling a different story while oil prices have , worryingly , been strongly pulling back from recent highs on fears that increased production by U.S. shale producers and @ @ @ @ @ @ @ As many analysts have pointed out , the biggest wild card in this market remains the speed at which demand is going to bounce back in the coming months .
The current evidence though appears to lend support to the bull camp .

By Alex Kimani
Bullish sentiment appears to have returned to the stock markets with a vengeance. In a historic rally that has taken even die-hard bulls by surprise, the S&P 500 has managed to claw back all of its 2020 losses, taking just 53 sessions for the index to fully restore the nearly $10T in value it shed in an epic bear market. The oil markets have been nearly as impressive.
After entering negative territory for the first time in history, U.S. WTI prices have briefly touched $40/bbl amid record production cuts and an uptick in global demand. Oil and gas stocks have doubled from their March 23 nadir, marking a sharp reversal from the precipitous drop that wiped out nearly two decades of gains.
There’s no shortage of bottom fishing opportunities in this market, with shares of bankrupt or near-bankrupt shale companies including Whiting Petroleum (NYSE:WLL), Chesapeake Energy (NYSE:CHK), California Resources Corp. (NYSE:CRC) and Valaris Plc (NYSE: VAL) as well as offshore drillers Borr Drilling Ltd (NYSE:BORR), Noble Corp.(NYSE:NE), Seadrill (NYSE:SDRL) and TransOcean (NYSE:RIG) recording triple-digit gains over the past week alone.
But analysts are now saying investors need to pump their brakes.
A cross-section of Wall Street has warned that there’s too much irrational exuberance in the markets, and the oil price rally is not fully supported by fundamentals.
Source: CNN Money
Watching the Crack
According to Warren Patterson, head of commodities strategy at ING, as well as analysts at Goldman Sachs, refining margins, aka crack spreads, across different regions around the globe are still way off their norms, portending continuing weak global demand for distillates.
U.S. crack spreads clocked in at a mere $9/bbl last week, compared to $21 at the same time last year according to Reuters, while crack spreads for European diesel dropped to a record low of $2.90.
We are primarily funded by readers. Please subscribe and donate to support us!
Crack spreads are a good proxy for oil demand with falling spreads a sign of weak demand and vice-versa. The badly squeezed margins for refiners is a worrying sign that global demand remains way below normal levels, with the ongoing pick-up in crude prices only serving to worsen the margin contraction for the likes of Valero Energy Corp. (NYSE:VLO), Marathon Petroleum Corp. (NYSE:MPC) and Phillips 66 (NYSE: PSX). WTI and Brent prices have staged a strong rally over the past few weeks after production cuts by OPEC+ and independent producers in the U.S. and elsewhere helped ease a huge supply glut and storage buildup. On Saturday, OPEC and its allies agreed to extend the cuts by an additional month with plans to review progress on a monthly basis. Global oil demand particularly in the giant markets of China and India appears to be recovering at a faster-than-expected clip, with crude imports in China surging 13% in May to a record 11.3 million barrels per day and demand back to 90% of pre-crisis levels. Meanwhile, May sales in India were recorded at ~76% of normal levels while U.S. gasoline demand has seen a 7% uptick during the final week of May to clock in at 75% of pre-COVID-19 levels.
But analysts are now questioning whether the rebound in demand is the result of rising consumption or simply the result of refiners and traders stocking up on cheap crude.
ING’s Patterson and Ehsan Khoman at Japanese bank MUFG say the surge in demand could partly be the result of opportunistic buying by refiners. Consequently, Goldman has predicted that Brent prices will pull back to $35 per barrel in the coming weeks from a recent high of $43.
And they could be right.
According to Bloomberg, the United States’ largest refiner by capacity, Valero Energy, is currently running its two crude units at just 58% of their maximum rate of 424K bbl/day due to low demand and storage filling up. The refinery’s fluid catalytic converter as well as all the hydrotreaters except the distillate hydrotreaters are running at minimum rates while rates on the coker have also been lowered.
In a previous article, we reported that giant oil traders have been storing millions of barrels of crude in the seas with a view to selling when prices improve in the coming months, which could also be driving the surge in demand.
Takeaway
At this juncture, it’s best for investors to adopt an attitude of cautious optimism. On one hand, the bulls argue that OPEC+ has curtailed production too fast, with some oil executives eyeing the seemingly untouchable WTI prices of $70 in the current year.
On the other hand, poor refining margins are telling a different story while oil prices have, worryingly, been strongly pulling back from recent highs on fears that increased production by U.S. shale producers and Libya will offset the OPEC+ cuts.
As many analysts have pointed out, the biggest wild card in this market remains the speed at which demand is going to bounce back in the coming months.
The current evidence though appears to lend support to the bull camp.
By Alex Kimani for Oilprice.com


investmentwatchblog--2020-06-12--Biden LOSES IT when Faced with the HARSH Truth About his Base

Cristina Laila from The Gateway Pundit reports , Joe Biden lost his temper on Wednesday during a NAACP virtual town @ @ @ @ @ some young people don ’ t like him .
Biden is not attracting the young @ @

Cristina Laila from The Gateway Pundit reports, Joe Biden lost his temper on Wednesday during a NAACP virtual town hall when he was told some young people don’t like him. Biden is not attracting the young voters.
We are primarily funded by readers. Please subscribe and donate to support us!
Read More/Source/Credit/FairUse:
www.thegatewaypundit.com/2020…


investmentwatchblog--2020-06-12--The Black Swan Event For Stocks Is About To Repeat

by Chris Vermeulen of The Technical Traders This hybrid article with videos walks you through what and why the markets crashed , what they are starting to do now , and how you can take advantage of this black swan event .
The year has been filled with big broad market swings , sell-offs , and rallies , making people pull their hair out and scream .
Only those who don ’ t understand portfolio risk , position-sizing , and can ’ t read the charts are in pain this year .
Unfortunately , that ’ s the majority of @ @ @ @ @ @ @ what is happening in the markets this week , today , and what to expect looking forward several weeks , so get ready for some incredible market moves !
With that said this year has been a little slower with our portfolio simply because we focus on steady growth .
We don ’ t ride the stock market rollercoaster , which has everyone stressed out .
We see no point in holding positions and dealing with the stress which comes with it when you can sidestep it or better yet , profit from @ @ @ @ @ @ @ BAN strategy , which stands for “ Best Asset Now.
” We review 30+ markets , sectors , commodities , and currencies to find the best opportunity with the lowest level of risk .
We are not looking for a bunch of volatile trades .
Instead , we shoot for a 1-4 % return on our entire portfolio a month , which may sound dull but do the math , and you soon realize its tough to beat !
Price swings and volatility are high this year are extreme , which means we @ @ @ @ @ @ @ make , and reduce position size to protect both our subscribers trading and investing accounts , along with our own .
This market volatility is attracting new traders to the market like a mosquito to a bug zapper light .
We , on the other hand , take the opposite approach and step back to only cherry-pick a few low-risk trades here and there .
Before you continue , be sure to opt-in to our free market trend signals before closing this page , so you don ’ t miss our next special @ @ @ @ @ @ @ moving 10-92 % a day as we have seen recently , it ’ s not the best time to be risking your hard-earned month because you can do a lot of damage quickly overnight with the way this market had been behaving .
Anyway , if you are looking for a simple , logical trading strategy with ETFs that is hitting new high watermarks for the year with less than a 3 % drawdown on the year , then watch this video of my most recent analysis and prediction .
Here are the @ @ @ @ @ @ @ the video above : showing the price predictions before they happened .
We called the Black Swan Even late 2019 , not knowing what it would be , then on February 21 , we warned the black swan event had begun – Read Here .
We also warned of the waterfall sell-off before that on Jan 26 – Read here

by Chris Vermeulen of The Technical Traders
This hybrid article with videos walks you through what and why the markets crashed, what they are starting to do now, and how you can take advantage of this black swan event.
The year has been filled with big broad market swings, sell-offs, and rallies, making people pull their hair out and scream. Only those who don’t understand portfolio risk, position-sizing, and can’t read the charts are in pain this year. Unfortunately, that’s the majority of traders thought.
The video below covers what is happening in the markets this week, today, and what to expect looking forward several weeks, so get ready for some incredible market moves!
With that said this year has been a little slower with our portfolio simply because we focus on steady growth. We don’t ride the stock market rollercoaster, which has everyone stressed out. We see no point in holding positions and dealing with the stress which comes with it when you can sidestep it or better yet, profit from it.
My focus is on our BAN strategy, which stands for “Best Asset Now.” We review 30+ markets, sectors, commodities, and currencies to find the best opportunity with the lowest level of risk. We are not looking for a bunch of volatile trades. Instead, we shoot for a 1-4% return on our entire portfolio a month, which may sound dull but do the math, and you soon realize its tough to beat!
Price swings and volatility are high this year are extreme, which means we pear back the number of trades we make, and reduce position size to protect both our subscribers trading and investing accounts, along with our own.
We are primarily funded by readers. Please subscribe and donate to support us!
This market volatility is attracting new traders to the market like a mosquito to a bug zapper light. We, on the other hand, take the opposite approach and step back to only cherry-pick a few low-risk trades here and there.
Before you continue, be sure to opt-in to our free market trend signals
before closing this page, so you don’t miss our next special report!
When stocks and commodities are moving 10-92% a day as we have seen recently, it’s not the best time to be risking your hard-earned month because you can do a lot of damage quickly overnight with the way this market had been behaving.
Anyway, if you are looking for a simple, logical trading strategy with ETFs that is hitting new high watermarks for the year with less than a 3% drawdown on the year, then watch this video of my most recent analysis and prediction.
FEB 21: BLACK SWAN EVENT BEGINS
Here are the other two other videos I referenced in the video above: showing the price predictions before they happened.
We called the Black Swan Even late 2019, not knowing what it would be, then on February 21, we warned the black swan event had begun – Read Here.
We also warned of the waterfall sell-off before that on Jan 26 – Read here
MARCH 27: 30+% MARKET RALLY ANALYSIS:
YOUTU.BE/GZGQRBVDEY0
JUNE 5TH: MARKET RALLY TOP FOR THIS WEEK ANALYSIS
YOUTU.BE/MWGC_VOXYWA


investmentwatchblog--2020-06-12--‘It’s staggering:’ Doctors sound alarm as severely ill COVID-19 patients develop damaging blood clot

‘It’s staggering:’ Doctors sound alarm as severely ill COVID-19 patients develop damaging blood clots

“ We ’ ve had a range of patients that we ’ ve seen , ” Parcha said of the @ @ @ @ @ conditions .
“ We had a 35-year-old guy who had a five kids , he @ @ @ @ @ the pandemic came in .
He was admitted with us , we took very good @ @ @ @ @ tried our best .
He was with us in the intensive care unit .
He @ @ @ @ @ ”

“We’ve had a range of patients that we’ve seen,” Parcha said of the patients’ ages and health conditions. “We had a 35-year-old guy who had a five kids, he was doing really well before the pandemic came in. He was admitted with us, we took very good care of him. We tried our best. He was with us in the intensive care unit. He did not make it.”


investmentwatchblog--2020-06-12--Doug Casey on Rent Strikes, the Erosion of Property Rights, and What Comes Next

International Man : In recent months , “ rent strikes ” have emerged in many cities .
There has also been an increasing number of politicians suggesting they ’ ll pass laws to force landlords to “ cancel rent.
” What is your take on this ?
Doug Casey : Property rights are basic to human rights .
In fact , it doesn ’ t make any sense to talk about human rights unless you talk about property rights .
Your primary form of property is your own body .
But things outside of your body are equally as important @ @ @ @ @ @ @ possessions , things that belong to you alone , and that you are responsible for .
“ Rent strikers ” —who are philosophically aligned with socialists , communists , Antifa , Black Lives Matter , and similar groups— don ’ t see it that way , however .
They believe their problems are your problems .
They ’ re completely irresponsible .
They seem to think that saying something , no matter how irrational , can make it so .
And saying that you shouldn ’ t have to pay rent makes it @ @ @ @ @ @ @ economic reality .
Of course , the whole world has pretty much gone on tilt over the last six months .
Not paying agreed-upon rents and mortgages is economically destructive .
But that ’ s exactly the result these people want .
It ’ s a step to completely overturning what ’ s left of capitalism .
That ’ s bad enough .
But saying you don ’ t have to meet your obligations is simply dishonorable .
These people shouldn ’ t be taken seriously but treated with contempt .
International Man @ @ @ @ @ @ @ instituted an eviction freeze .
Without fear of eviction , many tenants felt they didn ’ t need to pay rent .
Without rent money , landlords won ’ t be able to pay their mortgages , their ever-increasing property taxes , and will be unable to meet their other obligations .
How do you see the daisy chain effects playing out ?
Doug Casey : It ’ s predictable , actually .
People seem to have forgotten what a dump most of New York City was turning into during the ’ 70s @ @ @ @ @ @ @ a result , landlords were both unwilling and unable to maintain their properties .
Nobody was building new ones .
The city was crime-ridden and on the edge of bankruptcy .
Those days may return .
But it all starts with education .
The last several generations of Americans have grown up in a school system which basically teaches Marxist values .
The average American no longer sees any problem with that .
People have been completely indoctrinated with perverse views of ethics , economics , politics , and how the world works @ @ @ @ @ @ @ badly .
And I ’ m not just talking about the average man in the street .
The executives running major corporations support all of this nonsense and run commercials promoting it .
The colleges , and even high schools and grade schools , promote it to students .
The news and entertainment industries are totally PC .
The battle has really been lost .
Things are likely to keep degenerating because trends in motion tend to stay in motion until they reach a crisis , at which point anything can happen .
@ @ @ @ @ @ @ this ?
Well , one of them is that landlords will stop building because they can see that the rental return on their capital is uncertain .
Building is risky enough , but if the sanctity of contracts is broken , it becomes extremely risky .
Even if an entrepreneur wants to build , banks will be very loath to lend on projects for exactly the same reason : they may not get their money back .
The government has painted itself into a corner with all of the debt that it ’ @ @ @ @ @ @ @ .
We might have 20 million families who can ’ t pay their mortgage or their rent .
This is a real possibility if unemployment doesn ’ t turn around radically and quickly .
If they ’ re evicted , where are they going to go ?
Are they going to live under bridges or on sidewalks ?
Or will they stay where they are , rent-free ?
Of course the answer is that the government will “ step in.
” Both renters and landlords will beg them to .
And it ’ @ @ @ @ @ @ @ the rent ; there are utilities to be paid as well .
There are thousands of electric , gas , and water utility companies who will lobby for it .
So who ’ s going to eat the cost of all this—the vast numbers of people that were living just on the edge and have now gone over the edge ?
I suspect this is the next stage of the Greater Depression—one that nobody wants to confront because it ’ s too scary .
The way to solve the problem , of course @ @ @ @ @ @ @ the market restructure ; let bankruptcies happen ; let evictions occur .
That should have happened in past crises—but every time , they ’ re papered over instead .
Now the problem is so huge as to be insoluble , short of a real conflagration .
Governments are actually cementing the distortions in place , however .
It ’ s perverse since they caused these problems to start with .
I ’ m not sure how it ’ s going to end .
We had overtures of a socialist revolution in the ’ @ @ @ @ @ @ @ in the late ’ 60s and early ’ 70s .
This time , things might truly go over the edge for the reasons I touched on and many more .
International Man : What does the growing popularity of rent strikes mean for American society and culture ?
Doug Casey : As I said before , the entire society has been corrupted over the last several generations with Marxist and socialist values .
One consequence of that is a breakdown of trust .
Unless you know another person well , you really don @ @ @ @ @ @ @ them .
What happens if government steps in and says , “ The fact that they made a contract with you means nothing .
They don ’ t have to pay their rent or their mortgage .
Not only won ’ t we help you , we ’ ll work with them , since they have more votes ” ?
When you don ’ t have trust in society , titles become insecure .
You can ’ t believe anything , even if it ’ s written down on a piece of paper @ @ @ @ @ @ @ own what you thought was yours .
In the years to come , a whole new class of Americans could , in effect , become squatters .
In other words , the many thousands of people who are living on the streets in major cities are squatting on public property .
Millions who can ’ t pay the rent or the mortgage might also become squatters , not just on public property but on private property .
This is one of the reasons why Africa and Latin America never go anywhere .
It @ @ @ @ @ @ @ reverse .
When property rights aren ’ t observed , it becomes impossible to plan .
You can ’ t have a sophisticated industrial , technological society if you can ’ t make plans .
If you can ’ t rely on institutions , on laws , on other people ’ s words , or rely on traditional social bonds , then society itself can break down .
This is how a country degenerates into a place like Haiti .
I ’ ve been there numerous times over—believe it or not—the last 50 @ @ @ @ @ @ @ but now it ’ s a genuine hellhole for exactly the causes we now see in the US .
International Man : Tenants and landlords have both called for government bailouts .
How do you think that will play out ?
Doug Casey : It really is funny .
Everybody wants to be bailed out , absolutely everybody .
In a way , I can understand it .
Everybody would like to not work , sit around in Starbucks all day , and play games on their iPhones .
For years , I @ @ @ @ @ @ @ eroding , and Western civilization is degrading and collapsing .
But the process has gone into hyperdrive .
I ’ ll give you an example .
In 1980 , the day before the national elections , when Reagan was elected , I did an hour interview on the Phil Donahue Show .
The most interesting part of that very entertaining show occurred when I was explaining exactly the kind of problems that we ’ re now talking about to the audience .
A guy in the audience stood up and asked , “ @ @ @ @ @ @ @ do we have to pay for this stuff ?
Why can ’ t the government pay for it all ?
” The question was stupid enough , but the really shocking thing was that the audience all clapped and cheered for him .
A completely insane comment that showed no understanding of anything and the crowd went wild .
Here ’ s another odd thing .
That tape of the Donahue Show is excellent , but for some reason , the guy ’ s comment and the crowd ’ s reaction was edited @ @ @ @ @ @ @ or by who .
But the point I ’ m trying to make is that , even then , the public had no understanding of economics .
Since then , their understanding has degraded much more—to the point people are actually talking seriously about things like Modern Monetary Theory and Guaranteed Basic Income .
Actually , we ’ re seeing the overture to both now , with the multi-trillion Everything Bailout and the $ 600 per week Unemployment Boost program .
The American public actually believes that the government is a magic cornucopia @ @ @ @ @ @ @ , they ’ re cynical and duplicitous enough to realize that the main purpose of government is to enrich themselves .
So , of course , they want to turn socialist theories into law .
It ’ s a real free lunch for them , and it seems like a free lunch to the boobs voting for them .
This is actually how a civilization collapses .
The situation is much more serious than the riots and inconveniences we ’ re now experiencing .
Let me go off on a slight tangent here—but @ @ @ @ @ @ @ .
It ’ s important to emphasize that government is pure force by its nature .
A civilized society , however , wants to limit force as much as possible .
If that ’ s true—and it is—then government should do only three things : First , protect you from force and violence within the country—which implies a police force .
Second , it should allow you to adjudicate disputes with each other without resorting to force—which implies a court system .
Third , it should protect you from force outside of the @ @ @ @ @ @ @ should do absolutely nothing else .
But in today ’ s world , it actually does everything but those things .
That ’ s an important part of the problems we ’ re seeing .
Government isn ’ t viewed as a tool to maintain a civil society , but a weapon to destroy it .
International Man : Given the trends playing out with the rent strike , what are the investment implications ?
Doug Casey : The first thing is , don ’ t pay any attention to the stock market @ @ @ @ @ @ @ by all the money that ’ s spewing out of Washington DC .
The price of stocks and bonds today , the level of interest rates—these things no longer have anything to do with reality .
Honest markets have ceased to exist .
It ’ s going to be a really painful comeuppance for those who think we ’ re still in a bull market .
But , to return to our original topic , why stop with rent ?
Why stop with mortgages and utilities ?
40 million US residents are getting @ @ @ @ @ @ @ Rioters say everyone has a “ human right ” to free food , housing , medical care , and a college diploma .
They never ask “ At whose expense ?
” .
In fact , the only sane “ human right ” is to be left alone .
Automobiles today cost as much as houses not long ago .
There ’ s a giant amount of automobile debt , apart from the fact most people today lease their cars .
Cars have gone from a small asset on the average guy ’ @ @ @ @ @ @ @ .
If Joe Average can ’ t make his car payment , he likely can ’ t get to work—assuming he still has a job .
In any event , car payments are now so large ; they ’ re tantamount to mortgages .
They run for seven years in many cases , with next to nothing for a down payment .
Few people realize that when banks first started granting mortgages on houses , they were only for five-year terms , with at least 20 % down…but that ’ s now ancient @ @ @ @ @ @ @ for car loans as well .
And , certainly , student loans .
If you can ’ t pay your credit card debt , maybe it ought to be forgiven in some type of a jubilee .
Anything is now possible in Bizarro World , where personal responsibility is an alien concept .
From an economic perspective , it brings us back to the question of what the next stage of the Greater Depression will look like .
Will there be a credit collapse—where trillions of dollars of debts are defaulted on , @ @ @ @ @ @ @ going to have hyperinflation if the government succeeds in bailing everybody out ?
Or will these things happen simultaneously in different parts of the economy ?
Or in sequence ?
Whatever it is , we ’ re looking at chaos .
I have little confidence in a meaningful near term recovery of the economy and zero confidence in the current recovery of the stock market .
Editor ’ s Note : The economic trajectory is troubling .
Unfortunately , there ’ s little any individual can practically do to change the course of @ @ @ @ @ @ @ you can and should do is to stay informed so that you can protect yourself in the best way possible , and even profit from the situation .
That ’ s precisely why NY Times best-selling author Doug Casey and his team just released an urgent new PDF titled Guide to Surviving and Thriving During an Economic Collapse .
It explains what ’ s to come and exactly what you should do to protect yourself .
Click here to get it now .

Via International Man
International Man: In recent months, “rent strikes” have emerged in many cities. There has also been an increasing number of politicians suggesting they’ll pass laws to force landlords to “cancel rent.”
What is your take on this?
Doug Casey: Property rights are basic to human rights. In fact, it doesn’t make any sense to talk about human rights unless you talk about property rights.
Your primary form of property is your own body. But things outside of your body are equally as important. You can’t survive without possessions, things that belong to you alone, and that you are responsible for. “Rent strikers”—who are philosophically aligned with socialists, communists, Antifa, Black Lives Matter, and similar groups— don’t see it that way, however. They believe their problems are your problems. They’re completely irresponsible.
They seem to think that saying something, no matter how irrational, can make it so. And saying that you shouldn’t have to pay rent makes it possible to roll back the laws of economic reality.
Of course, the whole world has pretty much gone on tilt over the last six months. Not paying agreed-upon rents and mortgages is economically destructive. But that’s exactly the result these people want. It’s a step to completely overturning what’s left of capitalism. That’s bad enough. But saying you don’t have to meet your obligations is simply dishonorable. These people shouldn’t be taken seriously but treated with contempt.
International Man: In New York, the government instituted an eviction freeze. Without fear of eviction, many tenants felt they didn’t need to pay rent.
Without rent money, landlords won’t be able to pay their mortgages, their ever-increasing property taxes, and will be unable to meet their other obligations.
How do you see the daisy chain effects playing out?
Doug Casey: It’s predictable, actually. People seem to have forgotten what a dump most of New York City was turning into during the ’70s. Many—perhaps most—apartments were rent-controlled. As a result, landlords were both unwilling and unable to maintain their properties. Nobody was building new ones. The city was crime-ridden and on the edge of bankruptcy. Those days may return.
But it all starts with education.
The last several generations of Americans have grown up in a school system which basically teaches Marxist values. The average American no longer sees any problem with that. People have been completely indoctrinated with perverse views of ethics, economics, politics, and how the world works.
It’s going to end badly. And I’m not just talking about the average man in the street. The executives running major corporations support all of this nonsense and run commercials promoting it. The colleges, and even high schools and grade schools, promote it to students. The news and entertainment industries are totally PC.
The battle has really been lost. Things are likely to keep degenerating because trends in motion tend to stay in motion until they reach a crisis, at which point anything can happen.
So what are the practical effects of this?
Well, one of them is that landlords will stop building because they can see that the rental return on their capital is uncertain. Building is risky enough, but if the sanctity of contracts is broken, it becomes extremely risky.
Even if an entrepreneur wants to build, banks will be very loath to lend on projects for exactly the same reason: they may not get their money back.
The government has painted itself into a corner with all of the debt that it’s encouraged in society over many years.
We might have 20 million families who can’t pay their mortgage or their rent. This is a real possibility if unemployment doesn’t turn around radically and quickly. If they’re evicted, where are they going to go?
Are they going to live under bridges or on sidewalks? Or will they stay where they are, rent-free? Of course the answer is that the government will “step in.” Both renters and landlords will beg them to. And it’s not just a question of paying the rent; there are utilities to be paid as well. There are thousands of electric, gas, and water utility companies who will lobby for it.
So who’s going to eat the cost of all this—the vast numbers of people that were living just on the edge and have now gone over the edge? I suspect this is the next stage of the Greater Depression—one that nobody wants to confront because it’s too scary.
The way to solve the problem, of course, is by deregulating everything. Let the market restructure; let bankruptcies happen; let evictions occur. That should have happened in past crises—but every time, they’re papered over instead. Now the problem is so huge as to be insoluble, short of a real conflagration. Governments are actually cementing the distortions in place, however. It’s perverse since they caused these problems to start with.
I’m not sure how it’s going to end. We had overtures of a socialist revolution in the ’30s. It was even more serious in the late ’60s and early ’70s. This time, things might truly go over the edge for the reasons I touched on and many more.
International Man: What does the growing popularity of rent strikes mean for American society and culture?
Doug Casey: As I said before, the entire society has been corrupted over the last several generations with Marxist and socialist values.
One consequence of that is a breakdown of trust.
Unless you know another person well, you really don’t know if you can trust them. What happens if government steps in and says, “The fact that they made a contract with you means nothing. They don’t have to pay their rent or their mortgage. Not only won’t we help you, we’ll work with them, since they have more votes”?
When you don’t have trust in society, titles become insecure. You can’t believe anything, even if it’s written down on a piece of paper. You find you may not really own what you thought was yours.
In the years to come, a whole new class of Americans could, in effect, become squatters.
In other words, the many thousands of people who are living on the streets in major cities are squatting on public property. Millions who can’t pay the rent or the mortgage might also become squatters, not just on public property but on private property.
This is one of the reasons why Africa and Latin America never go anywhere. It’s why Haiti is going in reverse. When property rights aren’t observed, it becomes impossible to plan.
You can’t have a sophisticated industrial, technological society if you can’t make plans. If you can’t rely on institutions, on laws, on other people’s words, or rely on traditional social bonds, then society itself can break down.
We are primarily funded by readers. Please subscribe and donate to support us!
This is how a country degenerates into a place like Haiti. I’ve been there numerous times over—believe it or not—the last 50 years. It was always poor, but now it’s a genuine hellhole for exactly the causes we now see in the US.
International Man: Tenants and landlords have both called for government bailouts. How do you think that will play out?
Doug Casey: It really is funny. Everybody wants to be bailed out, absolutely everybody.
In a way, I can understand it. Everybody would like to not work, sit around in Starbucks all day, and play games on their iPhones. For years, I’ve said that societal values are eroding, and Western civilization is degrading and collapsing. But the process has gone into hyperdrive.
I’ll give you an example.
In 1980, the day before the national elections, when Reagan was elected, I did an hour interview on the Phil Donahue Show.
The most interesting part of that very entertaining show occurred when I was explaining exactly the kind of problems that we’re now talking about to the audience. A guy in the audience stood up and asked, “Well, wait a minute, why do we have to pay for this stuff? Why can’t the government pay for it all?”
The question was stupid enough, but the really shocking thing was that the audience all clapped and cheered for him. A completely insane comment that showed no understanding of anything and the crowd went wild.
Here’s another odd thing. That tape of the Donahue Show is excellent, but for some reason, the guy’s comment and the crowd’s reaction was edited out—I’m not sure why, or by who. But the point I’m trying to make is that, even then, the public had no understanding of economics.
Since then, their understanding has degraded much more—to the point people are actually talking seriously about things like Modern Monetary Theory and Guaranteed Basic Income. Actually, we’re seeing the overture to both now, with the multi-trillion Everything Bailout and the $600 per week Unemployment Boost program.
The American public actually believes that the government is a magic cornucopia.
Although most politicians also believe that, they’re cynical and duplicitous enough to realize that the main purpose of government is to enrich themselves. So, of course, they want to turn socialist theories into law. It’s a real free lunch for them, and it seems like a free lunch to the boobs voting for them. This is actually how a civilization collapses. The situation is much more serious than the riots and inconveniences we’re now experiencing.
Let me go off on a slight tangent here—but one that’s basic and critical. It’s important to emphasize that government is pure force by its nature. A civilized society, however, wants to limit force as much as possible.
If that’s true—and it is—then government should do only three things:
First, protect you from force and violence within the country—which implies a police force.
Second, it should allow you to adjudicate disputes with each other without resorting to force—which implies a court system.
Third, it should protect you from force outside of the country—which implies an army.
The government should do absolutely nothing else.
But in today’s world, it actually does everything but those things. That’s an important part of the problems we’re seeing. Government isn’t viewed as a tool to maintain a civil society, but a weapon to destroy it.
International Man: Given the trends playing out with the rent strike, what are the investment implications?
Doug Casey: The first thing is, don’t pay any attention to the stock market. It’s been totally corrupted by all the money that’s spewing out of Washington DC.
The price of stocks and bonds today, the level of interest rates—these things no longer have anything to do with reality. Honest markets have ceased to exist. It’s going to be a really painful comeuppance for those who think we’re still in a bull market.
But, to return to our original topic, why stop with rent? Why stop with mortgages and utilities? 40 million US residents are getting free food. Why not everyone? Rioters say everyone has a “human right” to free food, housing, medical care, and a college diploma. They never ask “At whose expense?”. In fact, the only sane “human right” is to be left alone.
Automobiles today cost as much as houses not long ago. There’s a giant amount of automobile debt, apart from the fact most people today lease their cars. Cars have gone from a small asset on the average guy’s balance sheet to a major liability. If Joe Average can’t make his car payment, he likely can’t get to work—assuming he still has a job. In any event, car payments are now so large; they’re tantamount to mortgages. They run for seven years in many cases, with next to nothing for a down payment. Few people realize that when banks first started granting mortgages on houses, they were only for five-year terms, with at least 20% down…but that’s now ancient history.
Maybe the government should pay for car loans as well. And, certainly, student loans.
If you can’t pay your credit card debt, maybe it ought to be forgiven in some type of a jubilee. Anything is now possible in Bizarro World, where personal responsibility is an alien concept.
From an economic perspective, it brings us back to the question of what the next stage of the Greater Depression will look like. Will there be a credit collapse—where trillions of dollars of debts are defaulted on, and prices drop? Or are we going to have hyperinflation if the government succeeds in bailing everybody out?
Or will these things happen simultaneously in different parts of the economy? Or in sequence?
Whatever it is, we’re looking at chaos.
I have little confidence in a meaningful near term recovery of the economy and zero confidence in the current recovery of the stock market.
Editor’s Note: The economic trajectory is troubling. Unfortunately, there’s little any individual can practically do to change the course of these trends in motion.
The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation.
That’s precisely why NY Times best-selling author Doug Casey and his team just released an urgent new PDF titled Guide to Surviving and Thriving During an Economic Collapse. It explains what’s to come and exactly what you should do to protect yourself. Click here to get it now.


investmentwatchblog--2020-06-12--The Economic And Markets Shocks Will Keep Getting Bigger

Despite global lockdowns – with unemployment , business closures , and GDPs crashing to depression levels – central banks are @ @ @ @ @ to impose even greater control over our lives and livelihood , all justified by ever-greater @ @ @ @ @ What can we do to get aware and prepared , and wake up our loved @ @ @ @ @ it ’ s too late ?
Gregory Mannarino , trading coach known as “ The @ @ @ @ @ , ” and founder of TradersChoice.net , returns to Liberty and Finance / Reluctant Preppers @ @ @ @ @ about the economy , the volatile markets , the record debt-fueled repossession of everything by @ @ @ @ @ , and the specter of even more unthinkable crises and takeover of our lives in @ @ @ @

Gregory Mannarino interviewed by Dunagun Kaiser on Reluctant Preppers
Despite global lockdowns – with unemployment, business closures, and GDPs crashing to depression levels – central banks are on an seemingly unstoppable track to impose even greater control over our lives and livelihood, all justified by ever-greater and more shocking crises. What can we do to get aware and prepared, and wake up our loved ones and friends, before it’s too late?
We are primarily funded by readers. Please subscribe and donate to support us!
Gregory Mannarino, trading coach known as “The Robin Hood of Wall Street,” and founder of TradersChoice.net, returns to Liberty and Finance / Reluctant Preppers to answer viewers’ questions about the economy, the volatile markets, the record debt-fueled repossession of everything by the Fed and central banks, and the specter of even more unthinkable crises and takeover of our lives in the near future.
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