Tag Archives: Wall Street

Guest on Dr. Phil’s show discloses U.S. Treasury of being a pawn of Wall Street basically allowing China to infiltrate the country in exchange for profit

Dr Phil

Important Takeaways:

  • Dr. Phil Guest Exposes High-Tech Chinese Military Operations Near American Bases On U.S. Soil
  • A map displayed on Dr. Phil Primetime showed how Chinese nationals are buying massive amounts of land surrounding American military bases.
  • An expert named Kyle Bass of Hayman Capital Management explained how, in one instance, a Chinese military general named Sun bought over 100 square miles of land between America’s most active Air Force training base and the Mexico border.
  • Bass noted Sun obtained a permit to build windmills on the land despite the location having a small amount of wind, saying, “They want to put up windmills for two reasons. They want to connect directly to the U.S. grid so that they can upload malware to the grid and they can monitor the grid.”
  • He added, “They also want to build these windmills 700 feet tall. Imagine a windmill that’s almost as tall as the Washington Monument and they can put cameras up there that map the horizon and they can map the horizon with one square inch of clarity. Right next to our largest Air Force military training base. Every Air Force pilot trains at Laughlin Air Force Base.”
  • Regarding the approval of the land purchases, Bass accused the U.S. Treasury of being a pawn of Wall Street and basically allowing China infiltrate the country in exchange for profit.

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Another Round of Layoffs coming to Goldman Sachs

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • Goldman Sachs to chop 250 more workers after ‘David’s Demolition Day,’ sources say
  • Goldman Sachs plans to make another round of job cuts — its third in less than a year — as dealmaking profits continue to tank, sources told The Post on Tuesday.
  • The David Solomon-led investment bank will cull an additional 250 workers on the heels of 3,200 being fired in January in what staff had dubbed “David’s Demolition Day,” an insider said.
  • The latest layoffs could come in the next few weeks and the cuts will hit employees at every level including managing directors and other senior executives, according to the Wall Street Journal.
  • In September, the Wall Street giant — which had 45,000 employees — had pink-slipped 1% to 5% of its under-performers.
  • A Goldman Sachs spokesperson declined to comment.

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Raising the U.S. government’s $31.4 trillion debt ceiling: Wall Street preparing for default fallout

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • As talks over raising the U.S. government’s $31.4 trillion debt ceiling intensify, Wall Street banks and asset managers have begun preparing for fallout from a potential default.
  • U.S. government bonds underpin the global financial system so it is difficult to fully gauge the damage a default would create, but executives expect massive volatility across equity, debt and other markets.
  • Even a short breach of the debt limit could lead to a spike in interest rates, a plunge in equity prices, and covenant breaches in loan documentation and leverage agreements.
  • Big bond investors have cautioned that maintaining high levels of liquidity was important to withstand potential violent asset price moves, and to avoid having to sell at the worst possible time.

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Goldman Sachs releasing 3,200 employees

Goldman's Job Cuts

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Goldman Sachs is cutting up to 3,200 employees this week as Wall Street girds for tough year
  • The global investment bank is letting go of as many as 3,200 employees starting Wednesday, according to a person with knowledge of the firm’s plans.
  • That amounts to 6.5% of the 49,100 employees Goldman had in October, which is below the 8% reported last month as the upper end of possible cuts.
  • Other investment banks are adopting a “wait and see” attitude: If revenues are tracking below estimates in February and March, the industry could cut more workers, said a person familiar with a leading Wall Street firm’s processes.

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Chief Equity Strategist warns of a Recession worse than ‘normal’

Revelations 18:23 ‘For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Morgan Stanley Warns of Something Worse Than a ‘Normal Recession’
  • Morgan Stanley’s Chief U.S. Equity Strategist Michael Wilson said that he’s convinced a corporate earnings recession is coming—and that it could be worse than a “normal” recession.
  • Businesses reluctant to cut staff in the face of deteriorating economic conditions and as demand falls would put more pressure on profit margins, he warned. This could lead to a situation where unemployment doesn’t move up meaningfully but corporate earnings plunge.
  • Separately, in an analytical note cited by Bloomberg, Wilson and his team of strategists said the soaring dollar was creating an “untenable situation” for stocks and this, combined with central banks tightening policy “at a historically hawkish pace,” means that odds are growing for “something to break.”

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Rampant inflation, Dow falls 700 points now below 30,000

Rev 6:6 NAS “And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Biden threatens oil companies with ’emergency powers’ if they don’t boost supply amid inflation spike
  • The letters represent Biden’s latest attempt to use executive action to curb inflationary pressure. Inflation currently sits at a 40-year high of 8.6% and shows no signs of slowing down.
  • “Your companies and others have an opportunity to take immediate actions to increase the supply of gasoline, diesel and other refined product you are producing,” he continued. “My administration is prepared to use all reasonable and appropriate Federal Government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied.”
  • The letters come one day after Biden ordered the sale of another 45 million barrels of crude oil from the U.S. Strategic Oil Reserve.

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Rise in Inflation now 7.5%

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Inflation surges 7.5% on an annual basis, even more than expected and highest since 1982
  • The consumer price index for all items rose 0.6% in January, driving up annual inflation by 7.5%.
  • That marked the biggest gain since February 1982 and was even higher than the Wall Street estimate.
  • Real earnings for workers increased just 0.1% on the month when accounting for inflation.
  • Weekly jobless claims declined to 223,000, below the 230,000 estimate.
  • On a percentage basis, fuel oil rose the most in January, surging 9.5% as part of a 46.5% year-over-year increase. Energy costs overall were up 0.9% for the month and 27% on the year.
  • Vehicle costs, which have been one of the biggest inflation contributors since they began surging higher in the spring of 2021, were flat for new models and up 1.5% for used cars and trucks in January. The two categories have posted respective increases of 12.2% and 40.5% over the past 12 months.
  • Shelter costs, which make up about one-third of the total CPI number, increased 0.3% on the month, which is the smallest gain since August 2021 and slightly below December’s rise. Still, the category is up 4.4% over the past year and could keep inflation readings elevated in the future.
  • Food costs jumped 0.9% for the month and are up 7% over the past year.

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As U.S. inflation hits 31-year high, banks assess risks and opportunities

By Matt Scuffham

NEW YORK (Reuters) – Wall Street banks are planning for a sustained period of higher inflation, running internal health checks, monitoring whether clients in exposed sectors could pay back loans, devising hedging strategies and counseling caution when it comes to deals.

U.S. consumer prices this month posted their biggest annual gain in 31 years, driven by surges in the cost of gasoline and other goods.

Senior bank executives have become less convinced by central bankers’ arguments that the spike is a temporary blip caused by supply chain disruption and are stepping up risk management.

Higher inflation is generally seen as a positive for banks, raising net interest income and boosting profitability. But if it jumps high too quickly, inflation could become a headwind, top bankers warn.

Goldman Sachs Chief Operating Officer John Waldron last month identified inflation as the No. 1 risk that could derail the global economy and stock markets.

JPMorgan Chief Executive Officer Jamie Dimon told analysts last month that banks “should be worried” that high inflation and high interest rates increase the risk of extreme price movements.

A sustained period of higher inflation would pose both credit and market risk to banks, and they are assessing that risk in internal stress tests, said one senior banker at a European bank with large U.S. operations.

Risk teams are also monitoring credit exposures in sectors most affected by inflation, another banker said. They include firms in the consumer discretionary, industrial and manufacturing sectors.

“We are very active with those clients, offering hedging protections,” said the banker, who asked not to be named as client discussions are confidential.

Clients that may need extra funding to get them through a period of higher inflation are being advised to raise capital while interest rates remain relatively low, the banker said.

“It’s still a very beneficial environment to be in if you need funding, but that won’t last forever.”

Investment bankers are also assessing whether higher inflation and monetary tightening could disrupt record deals and public offering pipelines.

“We expect a sustained period of higher inflation, and monetary tightening could slow the momentum in the M&A market,” said Paul Colone, U.S.-based managing partner at Alantra, a global mid-market investment bank.

Alantra is advising clients in the early stages of M&A discussions “to review the risks sustained inflation could bring to both valuation and business results,” Colone said.

Sales and trading teams, meanwhile, are taking more calls from clients looking to reposition portfolios, which are vulnerable to a loss in value. When inflation ran out of control in the 1970s, U.S. stock indices were hit hard.

“We’re seeing more interest from clients in finding some manner of inflation protection,” said Chris McReynolds, Barclays’ head of U.S. inflation trading.

Treasury Inflation Protected Securities, which are issued and backed by the U.S. government, are proving popular, he said. The securities are similar to Treasury bonds but come with protection against inflation.

Traders are also seeing demand for derivatives that offer inflation protection such as zero-coupon inflation swaps, in which a fixed rate payment on an investment is exchanged for a payment at the rate of inflation.

“People are realizing they have inflation exposure and it makes sense for them to hedge their assets and liabilities,” McReynolds said.

Banks with diversified businesses are likely to fare best during a sustained period of inflation, most analysts say.

They expect that a steepening yield curve will boost overall profit margins, while trading businesses can benefit from increased volatility and the strength of deals, and initial public offering pipelines mean investment banking activity will remain healthy.

But Dick Bove, a prominent independent banking analyst, takes a different view. He anticipates the yield curve will flatten as higher rates reduce inflation expectations, crimping profit margins.

“Perhaps for as long as 12 to 18 months, bank stock prices will rise,” he said. “At some point, however, if inflation continues to rise, the multiples on bank stocks will collapse and so will bank stock prices.”

(Reporting by Matt Scuffham; Editing by Dan Grebler)

U.S. SEC chief Clayton to call it quits at the end of 2020

By Katanga Johnson

WASHINGTON (Reuters) – U.S. Securities and Exchange Commission Chairman Jay Clayton will step down from his position at the end of the year, the Wall Street regulator said in a statement on Monday.

Clayton’s early exit – his term would not expire until the end of June – clears the way for President-Elect Joe Biden to quickly take control of the regulatory agency when he is sworn in on Jan. 20, as Democrats are eager to create a more aggressive watchdog.

“Working alongside the incredibly talented and driven women and men of the SEC has been the highlight of my career,” said Clayton, who was appointed under President Donald Trump.

Clayton has said he wants to return home to New York and was expected to resign before his term ends in June. His departure would likely position an ultra-conservative ranking Republican commissioner, Hester Pierce, who frequently votes against penalizing companies for wrongdoing, to serve as an interim acting chairwoman at least until Biden takes office, lawyers said.

It is expected that senior Democratic SEC commissioner Allison Lee would be named as the acting chairwoman by Biden, until a permanent SEC chief is nominated and confirmed.

Under Clayton, the SEC has pursued changes to regulations that critics saw as burdensome or hindering corporate growth, often in the face of opposition from Democrats and investor advocates. The former corporate deals lawyer is generally respected for his expertise and described by those who deal with him as thoughtful and affable.

In July 2020, Clayton had been nominated by the Trump Administration to potentially replace a top federal prosecutor who was being fired by President Donald Trump at the time.

It is now unlikely Clayton would assume that role after Trump departs the White House, lawyers said.

As a full-time replacement SEC chief, progressives are keen for former Democratic SEC commissioner Kara Stein to fill the role, although Rob Jackson, also a former Democratic commissioner who currently teaches at New York University School of Law, is preferred by moderates.

Former derivatives market regulator Gary Gensler, who is working on a transition plan for financial industry oversight under Biden, is also a contender, sources told Reuters.

(Additional reporting by Lisa Lambert and Doina Chiacu; Editing by Catherine Evans and Chris Reese)

Trump bans U.S. investments in companies linked to Chinese military

By Humeyra Pamuk, Alexandra Alper and Idrees Ali

WASHINGTON (Reuters) – The Trump administration on Thursday unveiled an executive order prohibiting U.S. investments in Chinese companies that Washington says are owned or controlled by the Chinese military, ramping up pressure on Beijing after the U.S. election.

The order, which was first reported by Reuters, could impact some of China’s biggest companies, including China Telecom Corp Ltd, China Mobile Ltd and surveillance equipment maker Hikvision.

The move is designed to deter U.S. investment firms, pension funds and others from buying shares of 31 Chinese companies that were designated by the Defense Department as backed by the Chinese military earlier this year.

Starting Jan. 11, the order will prohibit purchases by U.S. investors of the securities of those companies. Transactions made to divest ownership in the companies will be permitted until Nov. 11, 2021.

“China is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses,” said the order released by the White House.

The Chinese embassy in Washington did not immediately respond to a request for comment.

In a stock exchange filing, China Telecom said it estimated the executive order might impact the price of its shares, which closed down 7.8% in Hong Kong on Friday, and American depository shares, adding that it would “closely monitor” developments.

Another telecom operator, China Unicom Hong Kong Ltd, said companies affected by the order would include its parent, China United Network Communications Group Co Ltd.

China Unicom also said in its filing, it expected an impact on its shares, which fell 6.7% on Friday, and American depository shares, adding it was “considering appropriate steps to protect its and its investors’ lawful rights”.

White House trade adviser Peter Navarro estimated that at least half a trillion dollars in market capitalization was represented by the Chinese companies and their subsidiaries.

“This is a sweeping order designed to choke off American capital to China’s militarization,” he told reporters on a call.

The move is the first major policy initiative by President Donald Trump since losing the Nov. 3 election to Democratic rival Joe Biden and indicates that he is seeking to take advantage of the waning months of his administration to crack down on China, even as he has appeared laser-focused on challenging the election result.

Biden has won enough battleground states to surpass the 270 electoral votes needed in the state-by-state Electoral College that determines the next president, but Republican Trump has so far refused to concede, citing unsubstantiated claims of voting fraud.

Thursday’s action is likely to further weigh on already fraught ties between the world’s top two economies, which are at loggerheads over China’s handling of the coronavirus pandemic and its move to impose security legislation on Hong Kong.

Biden has not laid out a detailed China strategy but all the indications are that he will continue a tough approach to Beijing, with whom Trump has become increasingly confrontational in his last year in office.

WALL STREET INTERESTS

The order echoes a bill filed by Republican senator Marco Rubio last month that sought to block access to U.S. capital markets for Chinese companies that have been blacklisted by Washington, including those added to the Defense Department list.

“Today’s action by the Trump administration is a welcome start to protecting our markets and investors,” said Rubio, a top congressional China hawk. “We can never put the interests of the Chinese Communist Party and Wall Street above American workers and mom and pop investors.”

His comments were echoed by Republican Congressman Jim Banks, who described the order as “one of the wisest and most significant foreign policy decisions President Trump has made since he entered office”.

Rubio’s bill and the order are part of a growing effort by Congress and the administration to thwart Chinese companies that have the backing of U.S. investors but do not comply with U.S. rules faced by American rivals. It also shows a new willingness to antagonize Wall Street in the rivalry with Beijing.

In August, U.S. Securities and Exchange Commission and Treasury officials urged Trump to delist Chinese companies that trade on U.S. exchanges and fail to meet its auditing requirements by January 2022.

Thursday’s move received a cool reception on Wall Street, where shares were already pulling back from recent gains. The iShares China Large-Cap ETF extended falls.

“The market is probably worried that President Trump is going to increase tensions with China and Iran in his last two months as president,” said Chris Zaccarelli, Chief Investment Officer of the Independent Advisor Alliance.

Still, it was unclear how investors would react. The order bans transactions, which it defined as “purchases,” so investors would technically be able to hold onto current investments.

While the document does not spell out specific penalties for violations, it gives the Treasury Department the ability to invoke “all powers” granted by the International Emergency Economic Powers Act, which authorizes the use of tough sanctions.

Questions also remain about whether Biden, who is set to take office just nine days after the order goes into effect, would enforce it or simply revoke it. His campaign declined to comment.

(Reporting by Humeyra Pamuk, Alexandra Alper and Idrees Ali; Additional reporting by Alden Bentley, Meg Shen and Tom Daly; Editing by Chris Sanders, Edward Tobin, Rosalba O’Brien and Barbara Lewis)