It is always important for us within the aviation industry to understand what’s going on in the equity markets as well as the overall economy. The Trends Research Institute through their Trends Journal is a world leader in forecasting. Therefore we are pleased to provide this weekly market and economic update to our readers.
As forecast last month, we warned Trends Journal subscribers to prepare for an equity market crash.
We wrote, “With all indexes posting their second negative month in the past three, we warn Trends Journal subscribers that should equities continue their slump, a March crash at the scale of the 2000 dot-com bust will be on the near horizon.”
And in our 7 March 2023 Trends Journal we “warned that the stock market climate is ripe for March Madness 2023.”
Here we are, just as we forecast, welcome to “March Madness”… the worst is yet to come. This is just the beginning of the global equity market and economic meltdown.
In great detail—when the world united to fight the COVID War back in 2020 by printing countless trillions of dollars backed by nothing and printed on nothing and Central Bankster Bandits dramatically cut interest rates to artificially prop up the locked-down economies—we warned of spiking inflation and dire economic consequences.
On the U.S. inflation front, the Labor Department reported today that the consumer price index increased 0.4 percent in February, putting the annual inflation rate at 6 percent.
Therefore, with inflation still high, despite the onset of a national banking crisis which we greatly detail in this edition of The Trends Journal, the bet on The Street is that next week the Federal Reserve Crime Syndicate will raise interest rates 25 basis points.
Crime Syndicate? Yes, by their deeds you shall know them.
As greatly detailed in today’s article from Wall Street on Parade, which has reported in detail on the Silvergate, Silicon Valley Bank, and other busts, it’s one big club and a dirty rigged game.
“Last Wednesday, federally-insured Silvergate Bank announced that it was closing shop and liquidating. Its parent’s stock price (Silvergate Capital, ticker SI) had lost over 90 percent of its value over the prior year; it was under a Justice Department investigation for how it moved money for crypto-kingpin Sam Bankman-Fried’s house of frauds; and its depositors were fleeing. Oh – and by the way – its primary regulator was the Federal Reserve Bank of San Francisco.
Last Friday, California state regulators closed Silicon Valley Bank and the Federal Deposit Insurance Corporation (FDIC) became the receiver. Its stock price had lost over 80 percent of its market value over the prior year; $150 billion of its $175 billion in deposits were uninsured, either because they exceeded the $250,000 FDIC cap and/or they were foreign deposits. The bank was effectively operating as a Wall Street IPO pipeline in drag as a federally-insured bank. The Federal Home Loan Bank of San Francisco had quietly been bailing it out – to the tune of $15 billion. Oh – and by the way – its primary regulator was the Federal Reserve Bank of San Francisco. And while all of this hubris was occurring, the CEO of Silicon Valley Bank, Gregory Becker, was sitting on the Board of Directors of his regulator, the Federal Reserve Bank of San Francisco.”
Attacking the “One big club, and you ain’t in it” Bankster charade, today Massachusetts Sen. Elizabeth Warren took a shot at Fed Head Jerome Powell, saying that his “actions to allow big banks like Silicon Valley Bank to boost their profits by loading up on risk directly contributed to these bank failures.”
Telling Powell to exit from the Fed’s review of the Silicon Valley Bank collapse, Warren said “For the Fed’s inquiry to have credibility, Powell must publicly and immediately recuse himself from this internal review. It’s appropriate for Vice Chair for Supervision [Michael S.] Barr to have the independence necessary to do his job.”
Following the bank collapses, Moody’s Investors Service revised its forecast on U.S. banking system to negative: “We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY.”
The Game is Rigged
Over in Asia, with the shock of the bank failures rippling across the globe, The MSCI Asia Pacific index fell 2.3 percent. Down more than 9 percent from this year’s high recorded in January, Asia’s leading stock index wiped out all of its gains for the year.
Ever hear of the Plunge Protection Team?
Despite the dire warnings from Moody’s and our ongoing forecasts that the worst is yet to come and the Silicon banks going bust is just the tip of the mountains of debt that are about to collapse, equities in Europe spiked higher with the EU Stoxx 600 up 1.59 percent.
And in the U.S., illustrating the idiocy of equity market reality, because their business future sucks and their Meta CEO Mark Zuckerberg said the company would fire 10,000 employees, their shares spiked 6 percent.
TREND FORECAST: As we have warned, the equity markets, and as evidenced by the Bankster Bandits in control, the game is rigged.
We had forecast last week that as equities continued to tank the Plunge Protection Team (a White Shoe Boy’s name for “market riggers”) would come to The Street’s rescue. We have also noted, they would temporarily rig the markets to go higher so the Bigs would sell their stocks at higher prices. And once the equities hit the prices they need to either make more money or not lose a lot … the markets would descend into freefall after they bail out.
TREND FORECAST: Capitalism is dead. America is a cross between Communism, as evidenced by the police mandates imposed during the COVID War such as “No Jab, No Job, (See “COVID-19 is a ‘Police State Virus,” March 2020) and Fascism which is the merger of state and corporate power.
On the fascism front, following the bank run on Silicon Valley Bank and the Signature Bank of New York, the Federal Deposit Insurance Corporation (FDIC) and the Feds bailed out the millionaires and billionaires whose deposits well surpassed the Fed’s insurance policy of $250,000 per customer.
And, obviously aware of his bank’s financial crisis, Greg Becker, the CEO of SVB, sold off $3.6 million of his bank shares less than two weeks before his bank collapsed.
Again, we note these facts to continue to illustrate, by the facts, the game is rigged for the Bigs.
TREND FORECAST: Bank failures have just begun. We have long forecast, warned, and reported on the dire financial consequences of the Office Building Bust whereby owners of office buildings across the nation will default on bank loans as the occupancy rates stay well below pre-COVID War levels and tenants use less office space or do not renew leases.
Further pressure will be exerted on the banks as the nation dives into recession and more people that are out of work and out of money default on loans.
LAST WEEK: BANK FAILURES TANK STOCKS
A deluge of bad news late last week sent investors fleeing for the exits.
First, a labor department report that the economy had added 312,000 jobs in February heightened fears that the U.S. Federal Reserve would raise interest rates higher for longer.
The number was greater than analysts polled by The Wall Street Journal had predicted. Unemployment remained virtually unchanged, twitching from 3.4 percent to 3.6, largely because more people were actively looking for work.
On Wednesday, Silvergate Capital, a California bank that was a haven for crypto firms’ financial transactions, announced it could no longer continue and closed down.
Two days later, California regulators shut down Silicon Valley Bank (SVB), creating the second-largest bank failure in U.S. history. (The largest was the implosion of Washington Mutual bank in 2008 during the Great Recession.)
SVB held a significant number of low-interest bonds in its portfolio that it was forced to sell at a loss in a futile attempt to raise enough cash to stay in business. (See our “Special Report: The Big Bank Bust” in this issue.)
Investors dumped billions of dollars of bank stocks Friday after SVB crumbled and fears about the health of the U.S. financial system spread through the markets.
By the end of the week, PacWest Bancorp had lost 38 percent of its market cap and Western Alliance Bancorp had shed 21 percent; Charles Schwab Corp., First Republic Bank, and Signature Bank, all listed on the S&P 500, were the index’s three worst performers, down more than 10 percent each.
Trading in shares of First Republic, PacWest, and Signature was briefly halted Friday to squelch panic selling.
Worries over interest rates, inflation, and possible weakness in the financial system sent the Dow Jones Industrial Average down 4.6 percent over the week. The NASDAQ lost 5.1 percent. The Standard & Poor’s 500 index shrank by 4.8 percent, seeing all of its 11 sectors lose value and booking its worst week since September.
TRENDPOST: With the banking bust spreading fear on The Street, the bets are that the Fed, despite the strong employment numbers will either pause in their long term interest rate hike strategy and/or, as we note above in the ECONOMIC UPDATE, raise interest rates next week just 25 basis points. And as we have long warned the greater worry is not just the Silicon Valley Bank who financed IPOs and a spectrum of techs that were once flying high during the COVID War but are now sinking low… but the banking industry as a whole who made lots of money when interest rates were low but are now sinking down as interest rates keep rising and deals dry up.
Over the weekend, New York state regulators closed $110-billion Signature Bank, creating the third largest bank failure in U.S. history.
The yield on the two-year treasury note sank to 4.586 percent Friday, losing 0.314 percent from Thursday to mark its worst single-day loss since September 2008. Yields on treasury securities fall as their prices rise.
Spot gold edged up 0.1 percent through the week to $1,867.66 at 5 p.m. EST on 10 March.
Benchmark Brent crude oil for April delivery slipped 3 percent to $82.52 at 5 p.m. EST on 10 March. West Texas Intermediate, which sets U.S. oil prices, dipped 2.9 percent to $76.68.
Bitcoin slid 10.7 percent from Monday through Friday to $20,022.30 at 5 p.m. EST on 10 March.
Abroad, equity markets mostly followed U.S. stocks lower.
The FTSE 100 in London was down 2.5 percent. The trans-European Stoxx 600 was off 2.5 percent.
Japan’s Nikkei ticked down less than 0.10 percent. The KOSPI in South Korea added less than 0.10 percent.
Hong Kong’s Hang Seng went down 5.5 percent. China’s CSI Composite shrank by 4.0 percent and the SSE Composite dropped 3.1 percent.
MONDAY: SVB BUST, BUT EQUITIES MARKET COMPLETELY DETACHED FROM REALITY
The Dow Jones Industrial Average closed the day down 90.50, or 0.28 percent, to 31,819.14 and the S&P 500 lost 5.83, or 0.15 percent, to close at 3,855.76. The tech-heavy Nasdaq was up 49.96, or 0.45 percent, to 11,188.84.
Trading in the market was volatile during most of the day as investors tried to determine the fallout from Silicon Valley Bank’s bust.
President Joe Biden addressed Americans to reassure them that the banking system was safe.
“Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills, and their hard-working employees can breathe easier as well,” Biden said.
He said anyone with money in an SVB account will have access to the funding and “no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
The bank went bust on Friday after plunging 60 percent before trading was halted by the Securities Exchange Commission.
The failure of SVB comes after the Dow’s worst week of the year.
Investors looked to safe havens like U.S. Treasuries. CNBC noted that the 2-Year Treasury yield has fallen about a full percentage point since Wednesday, which is the biggest decline since October 1987 – after “Black Monday.”
TRENDPOST: The Trends Journal has forecast that we are in for a major economic decline—in part—because the “officials” tasked with fixing the problems are the ones who got us here. Jen Psaki, Biden’s former press secretary, said her former boss showed he is taking the banking issue seriously because he held a press conference at 9 a.m., and he never does anything before that time. Sleeping late is a luxury for Biden who has been sucking off the public tit for 60 years.
Elsewhere, the FTSE was down 199.72, or 2.58 percent, to 7,548.63 and the STOXX 600 lost 10.96, or 2.42 percent, to close at 442.80. In Asia, Hong Kong’s Hang Seng was up 376.05, or 1.95 percent, to 19,695.97 and Japan’s Nikkei was down 311.01, or 1.11 percent, to 27,832.96. South Korea’s Kospi was up 16.01, or 0.67 percent, to 2,410.60. China’s Shenzhen Component was up 62.49, or 0.55 percent, to 11,505.02 and the Shanghai Composite also gained 38.62, or 1.20 percent, to 3,268.70.
TRENDPOST: The collapse of Silicon Valley Bank and Signature Bank is the beginning of a “huge crisis” that is a result of the COVID-19 lockdown propaganda that was first spread from the tech geeks who told their employees to stay home and go hi-tech.
As a result, their businesses boomed and so too did the IPOs and SPACs that the banks and the Bigs funded. Now with the COVID War over and the tech business in decline, the big high tech splurge is over, thus there will be more crashes coming… now and later.
The Trends Journal also noted when the COVID-19 War was launched by politicians, equities and the economy should have crashed. Instead, the economy was propped up by several trillions from the federal government and record low interest rates from the Fed.
OIL: Brent crude fell $0.85, or 1.05 percent, to $79.92 barrel and West Texas Intermediate crude futures fell $0.98, or 1.3 percent, to $73.83 a barrel as global investors considered the SVB bust and the health of the global economy.
“This is the biggest U.S. bank collapse since the financial crisis and we are closely monitoring the situation in the market,” Norges Bank Investment Management, which manages the Norwegian sovereign wealth fund, said in an emailed statement to MarketWatch.
The oil fund has over $263 million in Signature Bank and SVB Financial Group, the owner of SVB, OilPrice.com reported. The report noted that oil prices plunged as much as 5 percent before the opening bell.
TRENDPOST: When it comes to trend forecasting, all things are connected. The fall of SVB resulted in concerns of contagion among regional banks. Gerald Celente has warned that the SVB failure is just the beginning.
“For three years, we warned about a commercial office building bust because of the slimeball geek freaks” who kept their workers home.
“Many of these big buildings with their variable-rate loans, as interest rates go up—you’ve got fewer tenants and you can’t pay your bills. This is going to hit the banks very hard as office building owners can’t pay their loans and turn them over to the already deeply indebted banks.
“You haven’t seen anything yet,” he said.
GOLD: The precious metal hit its highest level in a month yesterday as investors disregarded high interest rates and took cover in the safe haven. Spot gold was up 1.5 percent as of mid-day trading and hit $1,905.82 an ounce.
“There is the risk of contagion and the question whether the Fed can continue to tighten as aggressively as they were foreshadowing,” Michael Boutros, the Forex.com senior technical strategist, told Kitco. “This is helpful for gold.”
TREND FORECAST: When the U.S. Federal Reserve stops raising interest rates and the U.S. dollar declines, gold prices will sharply rise. If the Fed decides to increase its interest rate by 50 basis points, the economy will go down. And we forecast that the lower the economy sinks, the higher gold prices will rise.
Indeed, the central banksters are buying gold because they know the inside story of how treacherous the artificially propped-up economies will be affected when the equity market bubble pops. (See “The World’s Entire Financial System is on a Knife’s Edge,” 7 Feb 2023.)
Also, there is not one mention in the mainstream business media that the higher the central banks raise interest rates, the more governments and businesses will have to pay on their huge debt load… which will become unsustainable.
BITCOIN: The world’s most popular crypto was up 18 percent yesterday and was trading at $24,000 as they celebrated the federal government promising to make good on deposits in SVB.
Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC via email that the crypto market has “turned euphoric knowing that depositors’ money is safe and a major potential bank run has been averted.”
TRENDPOST: TechCrunch noted that the overall crypto market surpassed $1 trillion yesterday, which was a 14 percent increase from Sunday. Confidence in cryptos is slowly rebounding after some significant busts in that sector including FTX and more recently Silvergate. (See our TREND FORECAST in the ECONOMIC UPDATE section in this issue.)
TODAY: DOW SEES GAINS DESPITE INCREASING RISK OF BANKING DISASTER
The Dow Jones Industrial Average was up 336.26, or 1.06 percent, to 32,155.40 and the S&P 500 increased by 64.80, or 1.68 percent, to 3,920.56. The tech-heavy Nasdaq gained 239.31, or 2.14 percent, to 11,428.15.
The consumer price index report, or CPI, was released Tuesday and showed a rise of 0.4 percent in February from January, which was just about what economists were anticipating.
Inflation declined to 6 percent on a yearly basis last month compared to 6.4 percent in January. The Core CPI, which measures the changes in the price of goods and services, rose 0.5 percent on a monthly basis, compared to the anticipated 0.4 percent. The Core increase was the fastest increase September 2022.
The U.S. CPI hit its peak of 9.1 percent last June.
Price changes over last year, according to the latest report:
- Transportation: +14.6 percent
- Gas Utilities: +14.3 percent
- Electricity: +12.9 percent
- Food at home: +10.2 percent
- Fuel Oil: +9.2 percent
- Food away from home: +8.4 percent
- Shelter: +8.1 percent
- Overall CPI: +6.0 percent
- New Cars: +5.8 percent
- Medical Care: +2.1 percent
- Gasoline: -2.0 percent
- Used Cars: -13.6 percent
TRENDPOST: Before last week’s bank crashes, Gerald Celente had forecast that a 50-basis point interest rate increase after the Fed’s next meeting, on 22 March, would crash equities markets and the economy.
Now, with the Silicon Valley Bank and other bank failures ripping through the economy, at best (or at worst), the Central Bankster Bandits will not raise interest rates by more than 25 basis points. This small hike despite the latest CPI data shows the Fed is nowhere near its 2 percent target and a “soft landing” seems unlikely.
Elsewhere, London’s FTSE was up 86.15, or 1.14 percent, to 7,633.87 and the benchmark STOXX600 was up 6.66, or 1.50 percent, to 449.46. In Asia, Japan’s Nikkei fell 610.92, or 2.19 percent, to 27,222.04 and South Korea’s Kospi was down 61.63, or 2.56 percent, 2,348.97.
Hong Kong’s Hang Seng was down 448.01, or 2.27 percent, 19,247.96. China’s Shanghai Component was down 23.38, or 0.72 percent, to 3,245.31. The Shenzhen Component Index was down 88.45, or 0.77 percent, to 11,416.57.
TRENDPOST: Again, the nation is not near a 2 percent inflation rate. And rather than blame themselves and Washington for artificially inflating the economy with a zero interest rate policy and several trillion dollars of made-up money backed by nothing to fight the COVID War, the Feds and The Street blame rising wages… which have, in fact, not kept up with inflation.
OIL: Oil prices fell to a nine week low with Brent crude falling 4.11 percent, closing at 77.45 per barrel while West Texas Intermediate fell 3.35 percent to close at $72.32 per barrel.
TRENDPOST: The sharp price declines represented a nine-week low based on fears of a financial crisis and recession after the Silicon Valley and other banks went bust. Gerald Celente, who accurately forecast the 1987 Stock Market crash, Dot-Com Bubble Bust, and the “Panic of ‘08,” has said that conditions around the world have never been so chaotic in his 43 years of tracking trends.
“The world is in chaos,” he said. “I’ve been at this for 43 years…I’ve never seen anything like it.”
GOLD: The precious metal stabilized today after jumping yesterday after the collapse of two mid-sized banks. Gold was trading down $3.10, or 0.16 percent, to $1,913.60 an ounce as of 1:15 p.m. ET.
TREND FORECAST: As forecast, when gold prices sank into the high $1,600 per ounce range last year, we had forecast the prices had bottomed and gold prices would be rising. With no sign of the Ukraine War ending, amid the financial economic crisis escalating, we forecast that gold prices will keep rising.
BITCOIN: The world’s most popular crypto saw another day of big gains today and was trading up $1,358.60, or 5.61 percent, to $25,570.70 as of 2:30 p.m. ET. The feeling among crypto enthusiasts was that the Fed will ease its monetary tightening after the recent banking scare. Lower interest rates makes bitcoin, a non-yielding asset, all the more attractive to buyers. The crypto is up 22 percent in the last three days.
TRENDPOST: Bitcoin weathered the economic bank calamity storm that hit last week. We maintain our forecast that if bitcoin prices stabilize in its current $25K plus range for several weeks, it will have strong potential to keep moving higher.
Note: The views expressed on on-aviation.com are not necessarily those of On Aviation™.