Originally published at: https://peakprosperity.com/daily-digest/jp-morgan-voices-concern-of-a-liquidity-crisis-us-iran-hold-first-direct-talks-since-2018/
Economy
JPMorgan has raised concerns about a potential liquidity crisis, citing a significant deterioration in liquidity for major contracts like ESM5 and TYM5. This comes amid a surge in bond yields driven by foreign selling, hedging activities, and the unwinding of basis trades. Notably, China’s selling of US Treasuries to support its currency has been highlighted as a contributing factor. Despite these developments, the Federal Reserve has maintained its current rate stance, with NY Fed President John Williams stating its appropriateness. However, Boston Fed President Susan Collins has indicated the Fed’s readiness to stabilize markets if necessary. JPMorgan’s concerns suggest the potential for volatile price movements, especially with upcoming risk events like UST auctions and FOMC minutes. While some financial analysts like Apollo’s Torsten Slok support JPMorgan’s view, citing foreign selling as a key factor, others, including major U.S. financial newspapers, argue that the financial system remains robust, suggesting the Fed’s current stance is justified.
Meanwhile, the Fed is reportedly exploring new tools beyond traditional rate cuts to address economic challenges. This includes expanding the balance sheet by printing money and buying assets, a strategy aimed at stimulating the economy. Analyst Michael Oliver has noted that the stock market has been losing momentum, which could signal a potential downturn. The current market correction is seen by some as the beginning of a bear market, exposing fundamental errors made under the assumption of perpetually low interest rates. While some like Peter Schiff warn of the potential degradation of the dollar’s value, others like Mohamed El-Erian suggest the Fed has more nuanced strategies to manage inflation expectations and stabilize markets.
US Politics
President Trump has ordered the militarization of the “Roosevelt Reservation” along the US southern border, involving federal lands in California, Arizona, and New Mexico. This move marks an escalation in border security measures.
Since 2008, US industrial output has stagnated, which some attribute to domestic policy issues such as energy, labor, and environmental regulations. These factors have reportedly made manufacturing less attractive compared to other sectors. The decline in manufacturing jobs is often linked to regulatory overreach, high energy costs, and labor policies. To revitalize US industry, experts suggest focusing on deregulation and creating a stable regulatory environment to encourage investment in manufacturing.
Geopolitics
The US and Iran have engaged in their first direct talks since the US withdrawal from the JCPOA in 2018. The meeting, held in Oman, was described as constructive, with both sides agreeing to continue diplomatic engagement. The discussions focused on Iran’s nuclear program, with the US demanding its dismantlement while Iran maintains its activities are for peaceful purposes. Further negotiations are scheduled, indicating a potential path toward a new nuclear agreement. Despite the positive tone, skepticism remains regarding the true nature of the talks and the intentions behind them, with some sources describing the engagement as both ‘direct’ and ‘indirect’.
Health
Utah House has approved legislation concerning the disclosure of blood donor vaccination status, reflecting interest in transparency regarding medical procedures. This legislative effort is part of a broader trend across multiple states addressing the rights of blood recipients. However, critics argue that such laws could lead to discrimination against vaccinated individuals and might not align with WHO guidelines on blood safety.
Sources
JPMorgan Warns of Liquidity Crisis Amid Fed’s Inaction
JPMorgan’s Market Intel team, which quotes trader Marissa Gitler, in which she said that liquidity is now gone and that what happens next could be ugly.
Source | Submitted by PhilH
The Real Enemy of U.S. Industry: A Closer Look at Domestic Policy and Comparative Advantage
The great enemy of US industry is not our trade partners, it’s the US government.
Source | Submitted by kenwdelong
Unmasking the Vaccine-Autism Fraud: A Call for Truth and Accountability
The number of trusted experts who lie about this reality is simply astounding.
Source | Submitted by sand_kitty
“Fed’s New Tools: Beyond Rate Cuts, Aiming to Inflate the Bubble”
They’re going to start printing. They’re going to start buying assets.
Source | Submitted by rhollenb
Trump’s Envoy and Iran Engage in First Direct Talks, Set Stage for Further Nuclear Negotiations
“Iran and the United States will hold more negotiations next week over Tehran’s rapidly advancing nuclear program, Iranian state television reported Saturday at the end of the first round of talks between the two countries since President Donald Trump returned to the White House,” The Associated Press reports as the meeting wrapped up.
Trump Militarizes Southern Border, Seizes Control of Federal Lands in Major Policy Shift
President Trump just militarized the “Roosevelt Reservation” along the US border in CA, AZ, and NM
Utah House Passes Legislation on Blood Donor Vaccination Status Disclosure
Multiple states have introduced legislation addressing the rights of blood recipients, the disclosure of donor vaccination status, and the ability to request directed blood donations.
In addition to sources submitted by community members, the following were also used in the creation of this report: American Academy of Pediatrics, Apollo Global Management, BBC, Bloomberg Economics, Border Security Watch, CDC, CNN, El Universal, Financial Times, Immigration Rights Advocate, Iranian State Television, J.B. Handley, JPMorgan Market Intel, Middle East Eye, Mohamed El-Erian, NHS, NY Fed President John Williams, Peter Schiff, Reuters, Seeking Alpha, The Associated Press, The Border Chronicle, The Guardian, The Hill, The Intercept, The New York Times, The Wall Street Journal, WHO, X posts from verified publishers, YouTube, ZeroHedge.