Bitcoin and Crypto Margin Trading Exchanges (UPDATED 2020)

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@binance: Read about #Binance's margin trading launch in your local language: 🇨🇳 简体中文 🇩🇪 Deutsch 🇪🇸 Español 🇫🇷 Français 🇮🇩 Bahasa Indonesian 🇰🇷 한국어 🇳🇱 Nederlands 🇵🇱 Polski 🇵🇹Português 🇷🇺 Русский 🇹🇷 Türkçe 🇻🇳 Tiếng Việt 🇮🇹Italiano #BinanceIsGlobal https://t.co/GPDIwKtO6E https://t.co/uFAZqX4lyP submitted by rulesforrebels to BinanceTrading [link] [comments]

The dollar standard and how the Fed itself created the perfect setup for a stock market crash

Disclaimer: This is neither financial nor trading advice and everyone should trade based on their own risk tolerance. Please leverage yourself accordingly. When you're done, ask yourself: "Am I jacked to the tits?". If the answer is "yes", you're good to go.
We're probably experiencing the wildest markets in our lifetime. After doing some research and listening to opinions by several people, I wanted to share my own view on what happened in the market and what could happen in the future. There's no guarantee that the future plays out as I describe it or otherwise I'd become very rich.
If you just want tickers and strikes...I don't know if this is going to help you. But anyways, scroll way down to the end. My current position is TLT 171c 8/21, opened on Friday 7/31 when TLT was at 170.50.
This is a post trying to describe what it means that we've entered the "dollar standard" decades ago after leaving the gold standard. Furthermore I'll try to explain how the "dollar standard" is the biggest reason behind the 2008 and 2020 financial crisis, stock market crashes and how the Coronavirus pandemic was probably the best catalyst for the global dollar system to blow up.

Tackling the Dollar problem

Throughout the month of July we've seen the "death of the Dollar". At least that's what WSB thinks. It's easy to think that especially since it gets reiterated in most media outlets. I will take the contrarian view. This is a short-term "downturn" in the Dollar and very soon the Dollar will rise a lot against the Euro - supported by the Federal Reserve itself.US dollar Index (DXY)If you zoom out to the 3Y chart you'll see what everyone is being hysterical about. The dollar is dying! It was that low in 2018! This is the end! The Fed has done too much money printing! Zimbabwe and Weimar are coming to the US.
There is more to it though. The DXY is dominated by two currency rates and the most important one by far is EURUSD.EURUSD makes up 57.6% of the DXY
And we've seen EURUSD rise from 1.14 to 1.18 since July 21st, 2020. Why that date? On that date the European Commission (basically the "government" of the EU) announced that there was an agreement for the historical rescue package for the EU. That showed the markets that the EU seems to be strong and resilient, it seemed to be united (we're not really united, trust me as an European) and therefore there are more chances in the EU, the Euro and more chances taking risks in the EU.Meanwhile the US continued to struggle with the Coronavirus and some states like California went back to restricting public life. The US economy looked weaker and therefore the Euro rose a lot against the USD.
From a technical point of view the DXY failed to break the 97.5 resistance in June three times - DXY bulls became exhausted and sellers gained control resulting in a pretty big selloff in the DXY.

Why the DXY is pretty useless

Considering that EURUSD is the dominant force in the DXY I have to say it's pretty useless as a measurement of the US dollar. Why? Well, the economy is a global economy. Global trade is not dominated by trade between the EU and the USA. There are a lot of big exporting nations besides Germany, many of them in Asia. We know about China, Japan, South Korea etc. Depending on the business sector there are a lot of big exporters in so-called "emerging markets". For example, Brazil and India are two of the biggest exporters of beef.
Now, what does that mean? It means that we need to look at the US dollar from a broader perspective. Thankfully, the Fed itself provides a more accurate Dollar index. It's called the "Trade Weighted U.S. Dollar Index: Broad, Goods and Services".
When you look at that index you will see that it didn't really collapse like the DXY. In fact, it still is as high as it was on March 10, 2020! You know, only two weeks before the stock market bottomed out. How can that be explained?

Global trade, emerging markets and global dollar shortage

Emerging markets are found in countries which have been shifting away from their traditional way of living towards being an industrial nation. Of course, Americans and most of the Europeans don't know how life was 300 years ago.China already completed that transition. Countries like Brazil and India are on its way. The MSCI Emerging Market Index lists 26 countries. Even South Korea is included.
However there is a big problem for Emerging Markets: the Coronavirus and US Imports.The good thing about import and export data is that you can't fake it. Those numbers speak the truth. You can see that imports into the US haven't recovered to pre-Corona levels yet. It will be interesting to see the July data coming out on August 5th.Also you can look at exports from Emerging Market economies. Let's take South Korean exports YoY. You can see that South Korean exports are still heavily depressed compared to a year ago. Global trade hasn't really recovered.For July the data still has to be updated that's why you see a "0.0%" change right now.Less US imports mean less US dollars going into foreign countries including Emerging Markets.Those currency pairs are pretty unimpressed by the rising Euro. Let's look at a few examples. Use the 1Y chart to see what I mean.
Indian Rupee to USDBrazilian Real to USDSouth Korean Won to USD
What do you see if you look at the 1Y chart of those currency pairs? There's no recovery to pre-COVID levels. And this is pretty bad for the global financial system. Why? According to the Bank of International Settlements there is $12.6 trillion of dollar-denominated debt outside of the United States. Now the Coronavirus comes into play where economies around the world are struggling to go back to their previous levels while the currencies of Emerging Markets continue to be WEAK against the US dollar.
This is very bad. We've already seen the IMF receiving requests for emergency loans from 80 countries on March 23th. What are we going to see? We know Argentina has defaulted on their debt more than once and make jokes about it. But what happens if we see 5 Argentinas? 10? 20? Even 80?
Add to that that global travel is still depressed, especially for US citizens going anywhere. US citizens traveling to other countries is also a situation in which the precious US dollars would enter Emerging Market economies. But it's not happening right now and it won't happen unless we actually get a miracle treatment or the virus simply disappears.
This is where the treasury market comes into play. But before that, let's quickly look at what QE (rising Fed balance sheet) does to the USD.
Take a look at the Trade-Weighted US dollar Index. Look at it at max timeframe - you'll see what happened in 2008. The dollar went up (shocker).Now let's look at the Fed balance sheet at max timeframe. You will see: as soon as the Fed starts the QE engine, the USD goes UP, not down! September 2008 (Fed first buys MBS), March 2009, March 2020. Is it just a coincidence? No, as I'll explain below. They're correlated and probably even in causation.Oh and in all of those scenarios the stock market crashed...compared to February 2020, the Fed balance sheet grew by ONE TRILLION until March 25th, but the stock market had just finished crashing...can you please prove to me that QE makes stock prices go up? I think I've just proven the opposite correlation.

Bonds, bills, Gold and "inflation"

People laugh at bond bulls or at people buying bonds due to the dropping yields. "Haha you're stupid you're buying an asset which matures in 10 years and yields 5.3% STONKS go up way more!".Let me stop you right there.
Why do you buy stocks? Will you hold those stocks until you die so that you regain your initial investment through dividends? No. You buy them because you expect them to go up based on fundamental analysis, news like earnings or other things. Then you sell them when you see your price target reached. The assets appreciated.Why do you buy options? You don't want to hold them until expiration unless they're -90% (what happens most of the time in WSB). You wait until the underlying asset does what you expect it does and then you sell the options to collect the premium. Again, the assets appreciated.
It's the exact same thing with treasury securities. The people who've been buying bonds for the past years or even decades didn't want to wait until they mature. Those people want to sell the bonds as they appreciate. Bond prices have an inverse relationship with their yields which is logical when you think about it. Someone who desperately wants and needs the bonds for various reasons will accept to pay a higher price (supply and demand, ya know) and therefore accept a lower yield.
By the way, both JP Morgan and Goldmans Sachs posted an unexpected profit this quarter, why? They made a killing trading bonds.
US treasury securities are the most liquid asset in the world and they're also the safest asset you can hold. After all, if the US default on their debt you know that the world is doomed. So if US treasuries become worthless anything else has already become worthless.
Now why is there so much demand for the safest and most liquid asset in the world? That demand isn't new but it's caused by the situation the global economy is in. Trade and travel are down and probably won't recover anytime soon, emerging markets are struggling both with the virus and their dollar-denominated debt and central banks around the world struggle to find solutions for the problems in the financial markets.
How do we now that the markets aren't trusting central banks? Well, bonds tell us that and actually Gold tells us the same!
TLT chartGold spot price chart
TLT is an ETF which reflects the price of US treasuries with 20 or more years left until maturity. Basically the inverse of the 30 year treasury yield.
As you can see from the 5Y chart bonds haven't been doing much from 2016 to mid-2019. Then the repo crisis of September 2019took place and TLT actually rallied in August 2019 before the repo crisis finally occurred!So the bond market signaled that something is wrong in the financial markets and that "something" manifested itself in the repo crisis.
After the repo market crisis ended (the Fed didn't really do much to help it, before you ask), bonds again were quiet for three months and started rallying in January (!) while most of the world was sitting on their asses and downplaying the Coronavirus threat.
But wait, how does Gold come into play? The Gold chart basically follows the same pattern as the TLT chart. Doing basically nothing from 2016 to mid-2019. From June until August Gold rose a staggering 200 dollars and then again stayed flat until December 2019. After that, Gold had another rally until March when it finally collapsed.
Many people think rising Gold prices are a sign of inflation. But where is the inflation? We saw PCE price indices on Friday July 31st and they're at roughly 1%. We've seen CPIs from European countries and the EU itself. France and the EU (July 31st) as a whole had a very slight uptick in CPI while Germany (July 30th), Italy (July 31st) and Spain (July 30th) saw deflationary prints.There is no inflation, nowhere in the world. I'm sorry to burst that bubble.
Yet, Gold prices still go up even when the Dollar rallies through the DXY (sadly I have to measure it that way now since the trade-weighted index isn't updated daily) and we know that there is no inflation from a monetary perspective. In fact, Fed chairman JPow, apparently the final boss for all bears, said on Wednesday July 29th that the Coronavirus pandemic is a deflationary disinflationary event. Someone correct me there, thank you. But deflationary forces are still in place even if JPow wouldn't admit it.
To conclude this rather long section: Both bonds and Gold are indicators for an upcoming financial crisis. Bond prices should fall and yields should go up to signal an economic recovery. But the opposite is happening. in that regard heavily rising Gold prices are a very bad signal for the future. Both bonds and Gold are screaming: "The central banks haven't solved the problems".
By the way, Gold is also a very liquid asset if you want quick cash, that's why we saw it sell off in March because people needed dollars thanks to repo problems and margin calls.When the deflationary shock happens and another liquidity event occurs there will be another big price drop in precious metals and that's the dip which you could use to load up on metals by the way.

Dismantling the money printer

But the Fed! The M2 money stock is SHOOTING THROUGH THE ROOF! The printers are real!By the way, velocity of M2 was updated on July 30th and saw another sharp decline. If you take a closer look at the M2 stock you see three parts absolutely skyrocketing: savings, demand deposits and institutional money funds. Inflationary? No.
So, the printers aren't real. I'm sorry.Quantitative easing (QE) is the biggest part of the Fed's operations to help the economy get back on its feet. What is QE?Upon doing QE the Fed "purchases" treasury and mortgage-backed securities from the commercial banks. The Fed forces the commercial banks to hand over those securities and in return the commercial banks reserve additional bank reserves at an account in the Federal Reserve.
This may sound very confusing to everyone so let's make it simple by an analogy.I want to borrow a camera from you, I need it for my road trip. You agree but only if I give you some kind of security - for example 100 bucks as collateral.You keep the 100 bucks safe in your house and wait for me to return safely. You just wait and wait. You can't do anything else in this situation. Maybe my road trip takes a year. Maybe I come back earlier. But as long as I have your camera, the 100 bucks need to stay with you.
In this analogy, I am the Fed. You = commercial banks. Camera = treasuries/MBS. 100 bucks = additional bank reserves held at the Fed.

Revisiting 2008 briefly: the true money printers

The true money printers are the commercial banks, not the central banks. The commercial banks give out loans and demand interest payments. Through those interest payments they create money out of thin air! At the end they'll have more money than before giving out the loan.
That additional money can be used to give out more loans, buy more treasury/MBS Securities or gain more money through investing and trading.
Before the global financial crisis commercial banks were really loose with their policy. You know, the whole "Big Short" story, housing bubble, NINJA loans and so on. The reckless handling of money by the commercial banks led to actual money printing and inflation, until the music suddenly stopped. Bear Stearns went tits up. Lehman went tits up.
The banks learned from those years and completely changed, forever. They became very strict with their lending resulting in the Fed and the ECB not being able to raise their rates. By keeping the Fed funds rate low the Federal Reserve wants to encourage commercial banks to give out loans to stimulate the economy. But commercial banks are not playing along. They even accept negative rates in Europe rather than taking risks in the actual economy.
The GFC of 2008 completely changed the financial landscape and the central banks have struggled to understand that. The system wasn't working anymore because the main players (the commercial banks) stopped playing with each other. That's also the reason why we see repeated problems in the repo market.

How QE actually decreases liquidity before it's effective

The funny thing about QE is that it achieves the complete opposite of what it's supposed to achieve before actually leading to an economic recovery.
What does that mean? Let's go back to my analogy with the camera.
Before I take away your camera, you can do several things with it. If you need cash, you can sell it or go to a pawn shop. You can even lend your camera to someone for a daily fee and collect money through that.But then I come along and just take away your camera for a road trip for 100 bucks in collateral.
What can you do with those 100 bucks? Basically nothing. You can't buy something else with those. You can't lend the money to someone else. It's basically dead capital. You can just look at it and wait until I come back.
And this is what is happening with QE.
Commercial banks buy treasuries and MBS due to many reasons, of course they're legally obliged to hold some treasuries, but they also need them to make business.When a commercial bank has a treasury security, they can do the following things with it:- Sell it to get cash- Give out loans against the treasury security- Lend the security to a short seller who wants to short bonds
Now the commercial banks received a cash reserve account at the Fed in exchange for their treasury security. What can they do with that?- Give out loans against the reserve account
That's it. The bank had to give away a very liquid and flexible asset and received an illiquid asset for it. Well done, Fed.
The goal of the Fed is to encourage lending and borrowing through suppressing yields via QE. But it's not happening and we can see that in the H.8 data (assets and liabilities of the commercial banks).There is no recovery to be seen in the credit sector while the commercial banks continue to collect treasury securities and MBS. On one hand, they need to sell a portion of them to the Fed on the other hand they profit off those securities by trading them - remember JPM's earnings.
So we see that while the Fed is actually decreasing liquidity in the markets by collecting all the treasuries it has collected in the past, interest rates are still too high. People are scared, and commercial banks don't want to give out loans. This means that as the economic recovery is stalling (another whopping 1.4M jobless claims on Thursday July 30th) the Fed needs to suppress interest rates even more. That means: more QE. that means: the liquidity dries up even more, thanks to the Fed.
We heard JPow saying on Wednesday that the Fed will keep their minimum of 120 billion QE per month, but, and this is important, they can increase that amount anytime they see an emergency.And that's exactly what he will do. He will ramp up the QE machine again, removing more bond supply from the market and therefore decreasing the liquidity in financial markets even more. That's his Hail Mary play to force Americans back to taking on debt again.All of that while the government is taking on record debt due to "stimulus" (which is apparently only going to Apple, Amazon and Robinhood). Who pays for the government debt? The taxpayers. The wealthy people. The people who create jobs and opportunities. But in the future they have to pay more taxes to pay down the government debt (or at least pay for the interest). This means that they can't create opportunities right now due to the government going insane with their debt - and of course, there's still the Coronavirus.

"Without the Fed, yields would skyrocket"

This is wrong. The Fed has been keeping their basic level QE of 120 billion per month for months now. But ignoring the fake breakout in the beginning of June (thanks to reopening hopes), yields have been on a steady decline.
Let's take a look at the Fed's balance sheet.
The Fed has thankfully stayed away from purchasing more treasury bills (short term treasury securities). Bills are important for the repo market as collateral. They're the best collateral you can have and the Fed has already done enough damage by buying those treasury bills in March, destroying even more liquidity than usual.
More interesting is the point "notes and bonds, nominal". The Fed added 13.691 billion worth of US treasury notes and bonds to their balance sheet. Luckily for us, the US Department of Treasury releases the results of treasury auctions when they occur. On July 28th there was an auction for the 7 year treasury note. You can find the results under "Note -> Term: 7-year -> Auction Date 07/28/2020 -> Competitive Results PDF". Or here's a link.
What do we see? Indirect bidders, which are foreigners by the way, took 28 billion out of the total 44 billion. That's roughly 64% of the entire auction. Primary dealers are the ones which sell the securities to the commercial banks. Direct bidders are domestic buyers of treasuries.
The conclusion is: There's insane demand for US treasury notes and bonds by foreigners. Those US treasuries are basically equivalent to US dollars. Now dollar bears should ask themselves this question: If the dollar is close to a collapse and the world wants to get rid fo the US dollar, why do foreigners (i.e. foreign central banks) continue to take 60-70% of every bond auction? They do it because they desperately need dollars and hope to drive prices up, supported by the Federal Reserve itself, in an attempt to have the dollar reserves when the next liquidity event occurs.
So foreigners are buying way more treasuries than the Fed does. Final conclusion: the bond market has adjusted to the Fed being a player long time ago. It isn't the first time the Fed has messed around in the bond market.

How market participants are positioned

We know that commercial banks made good money trading bonds and stocks in the past quarter. Besides big tech the stock market is being stagnant, plain and simple. All the stimulus, stimulus#2, vaccinetalksgoingwell.exe, public appearances by Trump, Powell and their friends, the "money printing" (which isn't money printing) by the Fed couldn't push SPY back to ATH which is 339.08 btw.
Who can we look at? Several people but let's take Bill Ackman. The one who made a killing with Credit Default Swaps in March and then went LONG (he said it live on TV). Well, there's an update about him:Bill Ackman saying he's effectively 100% longHe says that around the 2 minute mark.
Of course, we shouldn't just believe what he says. After all he is a hedge fund manager and wants to make money. But we have to assume that he's long at a significant percentage - it doesn't even make sense to get rid of positions like Hilton when they haven't even recovered yet.
Then again, there are sources to get a peek into the positions of hedge funds, let's take Hedgopia.We see: Hedge funds are starting to go long on the 10 year bond. They are very short the 30 year bond. They are very long the Euro, very short on VIX futures and short on the Dollar.

Endgame

This is the perfect setup for a market meltdown. If hedge funds are really positioned like Ackman and Hedgopia describes, the situation could unwind after a liquidity event:The Fed increases QE to bring down the 30 year yield because the economy isn't recovering yet. We've already seen the correlation of QE and USD and QE and bond prices.That causes a giant short squeeze of hedge funds who are very short the 30 year bond. They need to cover their short positions. But Ackman said they're basically 100% long the stock market and nothing else. So what do they do? They need to sell stocks. Quickly. And what happens when there is a rapid sell-off in stocks? People start to hedge via put options. The VIX rises. But wait, hedge funds are short VIX futures, long Euro and short DXY. To cover their short positions on VIX futures, they need to go long there. VIX continues to go up and the prices of options go suborbital (as far as I can see).Also they need to get rid of Euro futures and cover their short DXY positions. That causes the USD to go up even more.
And the Fed will sit there and do their things again: more QE, infinity QE^2, dollar swap lines, repo operations, TARP and whatever. The Fed will be helpless against the forces of the market and have to watch the stock market burn down and they won't even realize that they created the circumstances for it to happen - by their programs to "help the economy" and their talking on TV. Do you remember JPow on 60minutes talking about how they flooded the world with dollars and print it digitally? He wanted us poor people to believe that the Fed is causing hyperinflation and we should take on debt and invest into the stock market. After all, the Fed has it covered.
But the Fed hasn't got it covered. And Powell knows it. That's why he's being a bear in the FOMC statements. He knows what's going on. But he can't do anything about it except what's apparently proven to be correct - QE, QE and more QE.

A final note about "stock market is not the economy"

It's true. The stock market doesn't reflect the current state of the economy. The current economy is in complete shambles.
But a wise man told me that the stock market is the reflection of the first and second derivatives of the economy. That means: velocity and acceleration of the economy. In retrospect this makes sense.
The economy was basically halted all around the world in March. Of course it's easy to have an insane acceleration of the economy when the economy is at 0 and the stock market reflected that. The peak of that accelerating economy ("max velocity" if you want to look at it like that) was in the beginning of June. All countries were reopening, vaccine hopes, JPow injecting confidence into the markets. Since then, SPY is stagnant, IWM/RUT, which is probably the most accurate reflection of the actual economy, has slightly gone down and people have bid up tech stocks in absolute panic mode.
Even JPow admitted it. The economic recovery has slowed down and if we look at economic data, the recovery has already stopped completely. The economy is rolling over as we can see in the continued high initial unemployment claims. Another fact to factor into the stock market.

TLDR and positions or ban?

TLDR: global economy bad and dollar shortage. economy not recovering, JPow back to doing QE Infinity. QE Infinity will cause the final squeeze in both the bond and stock market and will force the unwinding of the whole system.
Positions: idk. I'll throw in TLT 190c 12/18, SPY 220p 12/18, UUP 26c 12/18.That UUP call had 12.5k volume on Friday 7/31 btw.

Edit about positions and hedge funds

My current positions. You can laugh at my ZEN calls I completely failed with those.I personally will be entering one of the positions mentioned in the end - or similar ones. My personal opinion is that the SPY puts are the weakest try because you have to pay a lot of premium.
Also I forgot talking about why hedge funds are shorting the 30 year bond. Someone asked me in the comments and here's my reply:
"If you look at treasury yields and stock prices they're pretty much positively correlated. Yields go up, then stocks go up. Yields go down (like in March), then stocks go down.
What hedge funds are doing is extremely risky but then again, "hedge funds" is just a name and the hedgies are known for doing extremely risky stuff. They're shorting the 30 year bond because they needs 30y yields to go UP to validate their long positions in the equity market. 30y yields going up means that people are welcoming risk again, taking on debt, spending in the economy.
Milton Friedman labeled this the "interest rate fallacy". People usually think that low interest rates mean "easy money" but it's the opposite. Low interest rates mean that money is really tight and hard to get. Rising interest rates on the other hand signal an economic recovery, an increase in economic activity.
So hedge funds try to fight the Fed - the Fed is buying the 30 year bonds! - to try to validate their stock market positions. They also short VIX futures to do the same thing. Equity bulls don't want to see VIX higher than 15. They're also short the dollar because it would also validate their position: if the economic recovery happens and the global US dollar cycle gets restored then it will be easy to get dollars and the USD will continue to go down.
Then again, they're also fighting against the Fed in this situation because QE and the USD are correlated in my opinion.
Another Redditor told me that people who shorted Japanese government bonds completely blew up because the Japanese central bank bought the bonds and the "widow maker trade" was born:https://www.investopedia.com/terms/w/widow-maker.asp"

Edit #2

Since I've mentioned him a lot in the comments, I recommend you check out Steven van Metre's YouTube channel. Especially the bottom passages of my post are based on the knowledge I received from watching his videos. Even if didn't agree with him on the fundamental issues (there are some things like Gold which I view differently than him) I took it as an inspiration to dig deeper. I think he's a great person and even if you're bullish on stocks you can learn something from Steven!

submitted by 1terrortoast to wallstreetbets [link] [comments]

Some interesting news in the stock market this week

Barrick Gold $GOLD jumped 10% on Monday after Berkshire Hathaway filings showed Mr Buffett’s firm had purchased around $540 million of stock. Depending on what news you follow you could take this as;
Barrick Gold is one of the largest mining companies in the world that has seen its stock price rise 50% this year as the gold price has risen 33% from $1,500 per oz to close to $2,000. However, Barrick Gold has a break even gold price of just $950 per oz meaning that its profit per oz has just doubled from $500 to $1,000. That should boost profits significantly. Barrick already looked very reasonably priced on a trailing PE of 11.71 with close to zero net debt. If the gold price stays close to recent levels, even for a few quarters, it will look like a bargain.
On Tuesday the S&P finally managed to close above its previous all time high as Home Depot reported an impressive top and bottom line beat with comp sales and earnings rising 23.4% and 27% respectively. General Motors also got a boost from Morgan Stanley who followed other firms in valuing $GM’s electric vehicle business at around $20bn compared to the firm’s current total market valuation of $40bn. That makes a spin off a potentially lucrative option and follows GM’s CEO comment last month that “nothing was off the table”. Deutsche Bank went further to say spinning off the EV business could release a “massive amount of value” that could be potentially be worth up to $100bn.
On Wednesday, Intel CEO Bob Swan said the shares were well below their intrinsic value and announced a $10bn accelerated stock repurchase program. The stock is down 20% since the company announced delays to its 7 nanometer production technology. That drop does look overdone as the medium term impact of the delays should only hit around 5%-10% of revenues while IoT, online security, automated driving and numerous other businesses should continue to grow rapidly. Investors appear worried that Intel’s glory days are behind it and that the stock is about to go the same way as IBM. However, even if that were the case, Intel still looks cheap with a trailing PE of 9.0 compared to IBM’s 14.0.
On Thursday, numerous analysts jumped to TJX’s support saying that the long term story had not changed. Disappointing results on Wednesday saw the stock drop close to 20% on the week to close at $51.68. However, Wells Fargo rates TJX stock overweight with a $70 price target and said the "squishy" near-term will give way "over the long-term as a flood of inventory enters the off-price marketplace in the wake of 2020, ultimately pushing margins to all-time highs,". Guggenheim’s Robert Drbul reiterated a Buy rating and $65 price target on Thursday and said that investors should use “share price weakness as an incremental buying opportunity.”
Finally on Friday Hindenburg Research published an alarming report that alleged GrowGeneration's management team had "extensive ties to alleged pump & dump schemes, organized crime and various acts of fraud." GrowGeneration has responded saying it intends to take action against Hindenburg. It said the statements were false and defamatory and “designed to provide a false impression to investors and to manipulate the market to benefit short sellers”. I don’t know which version is correct but I did notice this disclaimer;
“Hindenburg Research makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information”
I know these disclaimers are pretty widespread but what is the point of reading research by a firm that refuses to stand over it.
On that note here is my own disclaimer;
This is not a recommendation to buy or sell. Stocks are not suitable for everyone. Some of the stocks mentioned are risky small cap and/or highly speculative. Please do your own research.
submitted by InterestingNews1 to stocks [link] [comments]

Your Pre Market Brief for 07/22/2020

Pre Market Brief for Wednesday July 22nd 2020

You can subscribe to the daily 4:00 AM Pre Market Brief on The Twitter Link Here . Alerts in the tweets will direct you to the daily 4:00 AM Pre Market Brief in this sub.
Updated as of 4:00 AM EST
-----------------------------------------------
Stock Futures:
Tuesday 07/21/2020 News and Markets Recap:
Wednesday July 22nd 2020 Economic Calendar (All times are Eastern)
News Heading into Wednesday July 22nd 2020
NOTE: I USUALLY (TRY TO) POST MANY OF THE MOST PROMISING, DRAMATIC, OR BAD NEWS OVERNIGHT STORIES THAT ARE LIKELY IMPORTANT TO THE MEMBERS OF THIS SUB AT THE TOP OF THIS LIST. PLEASE DO NOT YOLO THE VARIOUS TICKERS WITHOUT DOING RESEARCH. THE TIME STAMPS ON THESE MAY BE LATER THAN OTHERS ON THE WEB.
Upcoming Earnings:
Commodities:
COVID-19 Stats and News:
Macro Considerations:
Most Recent SEC Filings
Other
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Morning Research and Trading Prep Tool Kit
Other Useful Resources:
The Ultimate Quick Resource For the Amateur Trader.
Subscribe to This Brief and the daily 4:00 AM Pre Market Brief on The Twitter Link Here . Alerts in the tweets will direct you to the daily brief in this sub
It is up to you to judge the accuracy and veracity of these headlines before trading.
submitted by Cicero1982 to pennystocks [link] [comments]

High Growth Stocks for Q2/Q3 2020

Hey all,
Sorry I'm a little late with this post. I know many of you have been asking me to share my stock picks for Q2/Q3 2020. Here are a few stocks in my portfolio.
It's also important to note that 90% of my portfolio is in index funds and blue chip stocks. Growth stocks are high-risk speculative investments, and I generally don't swing more than 3-5% of my cash into these trades.
I've made significant gains on all 3 and I've started to trim my holdings to lock in profits, but figured I'd share info on these companies since there are hardly any posts on them on Reddit.
Inphi Corporation ($IPHI)

Cerence Inc. ($CRNC)

Inari Medical ($NARI) -- IPO'ed May 22, 2020

Feel free to drop me a line or message me directly if you have any comments/questions!

Edit 1: Thanks for the gold!
Edit 2 (8/4/2020): As of 8/4/2020, the performance from the date of the post of the 3 stocks above are as follows: $IPHI - up 11.1% / $CRNC - up 52.2% / $NARI - up 52%
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Deutsche Bank falling with Wirecard

According to Bloomberg, Markus Braun CEO of Wirecard is facing a massive margin call as Deutsche bank has issued a margin call on a 150MM Euro loan pledged by shares that have lost 72% of their value following the news that $2 billion in the company have gone missing. Braun, who holds 7% of wirecard's shares and is the company's biggest shareholder funded a 150MM euro margin loan that was secured by the value of the underlined shares. However, last week's plunge has triggered a margin call liquidation of these shares which no longer cover the full value of the loan.
In 2017, Braun - who invested tens of millions of his own funds into the firm and owned 8.7 million shares of wirecard as of June 2019 and secured the loan from Deutsche bank by pledging 4.2 million shares, just under the half of his personal shares.
When the stock was trading above 100/share the overcollaterialization cushion was generous, giving the loan an LTV of well below 50%. However, with the stock trading at 25, there is a 50MM shortfall in the loan and DB is rushing to collect whatever it can.
All this not really material to trade with, but yall should know. What do yall think about the future of Deutsche bank ?
Edit: A lot of people are assuming i am concerned about DB's future just because of this transaction. Well, its about a reputation it has built over a period of time. This is just a stepping stone, DB is always known to make bad plays and do shady shit.
Edit 2: DB’s net income is 67 million. The loss on this trade would be greater than twice their net income. So don’t tell me ohhh it’s a trillion dollar company. Fuck off
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Trade responsibly,

Good luck today guys, hope everyone makes some tendies
Edit 8:30PM Thanks for the love and awards guys, hope everyone ended the week off positive, enjoy your weekend.
Of note for Airlines (LUV, DAL, AAL, UAL), the Airlines for Americas trade association says the industry needs “immediate financial assistance” to protect the 11mln jobs it represents.
Of note for Banks (JPM, C, MS, BAC, GS), the Fed is encouraged by a notable increase in discount window borrowing as banks show a willingness to use the window as a funding source to support the flow of credit to households and businesses.
Of note for Car Rental Services (HTZ, CAR), both Hertz and Avis Budget Corp have requested aid from the US government.

Dow Jones

Apple Inc. (AAPL) supply chain is reportedly still facing supply disruptions even as China recovers due to factory closures of suppliers in Malaysia. Elsewhere, it has limited the number of purchases on its iPhones to two per customer in the US and China, according to Canalys.
Boeing Company (BA) is reportedly leaning towards a temporary halt of operations at its twin-aisle jetliner factories due to the spread of the coronavirus, according to people familiar with the matter, in a similar move to Airbus (AIR FP).
Johnson & Johnson (JNJ) Global Supply Chain Officer Wengel announced its supply chain is currently holding steady and meeting patient needs.
Walmart (WMT) announced it is planning to give special cash bonuses for hourly associates for their work during the current conditions with full-time associates receiving USD 300 and part-time associates receiving USD 150, which will equate to USD 365mln. WMT is to also accelerate its next bonus for store, club and supply chain associates which will equate to USD 180mln, overall it will equate to USD 550mln, the co. says. WMT is to also hire over 150k hourly employees as the number of shoppers increases.

Nasdaq 100

Amazon.com Inc. (AMZN)– Some sellers state its decision to stop receiving non-essential inventory in response to the coronavirus pandemic could limit sales they need to make payments on its loans from Amazon.
Tesla (TSLA) announced it decided to temporarily suspend production at its Fremont, California factory and NY Factory after March 23rd. Elsewhere, CEO Musk announced his factories are working on ventilators to address a potential shortage.
United Continental Holdings (UAL)Apollo Global Management (APO) has reportedly purchased part of the airlines USD 2bln loan from a group of banks, according to people familiar with the matter.

S&P 500

Accenture plc (ACN) had its PT cut at a number of brokers, however, they were positive on its ability to continue through the coronavirus crisis.
AFLAC Inc (AFL) American Family Life Assurance of Columbus and New York agreed to acquire Zurich North America's US corporate Life and Pensions. AFL expects the acquisition to be dilutive to 2020 adj. EPS by USD 0.02 to 0.03.
Altria Group Inc (MO) announced it is temporarily suspending operations at its Richmond manufacturing center.
Anthem Inc. (ANTM) announced it is offering up to 80 hours of paid emergency leave for qualifying needs, including if associates are experiencing coronavirus symptoms or for caring for young children whose school has been closed.
AT&T Inc. (T) announced it has cancelled is accelerates share repurchase programme of USD 4bln worth of stock, noting the impact of the coronavirus could be material although it cannot currently estimate the impact onto its financial or operational results.
Bank of America Corp (BAC) announced it is offering additional support for its consumer and small business clients in response to the coronavirus, where clients can request funds including overdraft fees, non-sufficient funds fees, and monthly maintenance fees through deposit accounts. Many customers can also request to defer any payments.
Carnival Corp. (CCL) preliminary Q1 20 (USD): EPS 0.22 (exp. 0.27), revenue 4.8bln (exp. 4.66bln); coronavirus resulted in a net loss of 0.23/shr.
Cintas Corporation (CTAS) Q3 20 (USD): Adj. EPS 2.16 (exp. 2.02), revenue 1.81bln (exp. 1.8bln), gross margin 45.5% (exp. 45.7%, prev. 44.9% Y/Y); announced it is not providing guidance for Q4 20 and it is suspending FY20 guidance due to uncertainty surrounding the coronavirus.
Coty, Inc (COTY) provided an update on the current situation: Expects Q3 20 revenue to fall approximately 20% like for like, with a meaningful impact on profit, it has also withdrawn FY20 guidance. It is recommending to the board that shareholders be given the option to receive up to 100% of their quarterly dividend in kind for the coming two quarters. Its largest shareholder JAB decided to fully repay the loan it used to finance the tender offer in 2019. It is taking initiatives to manufacture hand sanitizer. Notes activations on Amazon have seen US sales nearly double in recent weeks, as well as launching the Kylie skin-care Europe in upcoming weeks; it is also preparing for increased demand post coronavirus.
Danaher Corp. (DHR) announced the US FTC is on board with the acquisition of General Electric’s (GE) Life Sciences Biopharma Business. The closing of the deal is still subject to customary closing conditions as announced in the agreement, but DHR expects the deal to close on March 31st, 2020.
Ford Motor (F) announced it has plans to suspend production in Argentina and Brazil starting next week due to the coronavirus.
Kohl's Corp. (KSS) announced it is to close its stores nationwide through to at least April 1st, although customers will still be able to shop on its App. It also withdrew guidance for Q1 and FY20.
Mylan N.V. (MYL) announced it is increasing production of its malaria drug for potential use to combat the coronavirus.
Occidental Petroleum (OXY) is reportedly planning on naming its former CEO Stephen Chazen as its new chairman as it tries to improve amid weak demand and activism from Carl Icahn, according to WSJ citing people familiar with the matter.
Sysco Corp. (SYY) announced it will donate 2.5mln meals over the next four weeks as part of its response strategy to help against COVID-19. Elsewhere, it has withdrawn its three-year plan guidance due to the impact from the coronavirus.
Tiffany & Co. (TIF) Q4 19 (USD): Adj. EPS 1.80 (exp. 1.77), revenue 1.4bln (exp. 1.36bln); SSS +3%, SSS Ex-Hong Kong +5%, Gross Margin 63.3% (Prev. Y/Y 63.8%). Announced it will not be issuing FY20 guidance due to the pending merger with LVMH

Other

Crowdstrike (CRWD) Q4 19 (USD): Adj. EPS -0.02 (exp. -0.08), Revenue 152mln (exp. 137mln); FY21 Adj. EPS view -0.14 to -0.10 (exp. -0.18), revenue view 723-733mln (exp. 685mln)
Samsung (SSNLF) has reportedly been hit hard by Vietnam’s travel restrictions from South Korea, fueling concerns its Galaxy Note smartphones will fall behind schedule in its largest manufacturing hub outside South Korea
Teva (TEVA) announced it will be donating over 6mln doses of hydroxychloroquine sulfate tablets across the US to meet the urgent demand for the medicine as an investigational target to treat the coronavirus.

Additional US Equity Stories

Of note for casino names (MGM, CZR, WYNN, MLCO); Macau has halved its 2020 gaming revenue forecast due to the coronavirus and predicts a 56% fall from previous year to USD 16bln.
US Steel (X) Q1 20 (USD): Adj. EPS view -0.80 (exp. -0.84), EBITDA 30mln.
Coca Cola (KO) does not expect to meet its FY20 guidance, although does not foresee any near-term interruptions to its concentrate or beverage-based production. Meanwhile, it had its PT lowered at Deutsche Bank to USD 53/shr from USD 64/shr, although the desk reiterated its long-term buy rating.
Ross Stores (ROST) announced it is to temporarilty close all of its stores throughout the US due to the coronavirus.
Dollar Tree (DLTR) announced it is hiring 25,000 associates (both full and part time) to help across its stores in the US.
Synaptics Inc. (SYNA) downgraded to Underweight from Neutral at JP Morgan
Colgate Palmolive (CL) upgraded to Buy from Neutral at BofA
Accenture (CAN) upgraded to Buy from Neutral at MoffettNathansonMonster Beverage
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Deutsche Bank - On the Brink of Insolvency

Deutsche Bank - On the Brink of Insolvency
On this week's edition of DDDD (Data-Driven DD; yes this is what I'm going to be calling this), we'll be looking at Deutsche Bank. Once one of the largest banks in the world, it's now a shell of its former self after the 2008 financial crisis.
Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance.
A Brief History of Deutsche Bank (and Deutschland)
Let’s first start with some background around Deutsche Bank, because it has some very interesting history behind it. In particular, it’s somehow taken part in causing some of the worst crises and scandals in world and economic history ever since its founding in 1870. Here’s a brief timeline:
  • Founded in Berlin in 1870 with the original mission to facilitate trade between Germany and foreign nations
  • Rapidly expanded overseas in the late 1800s, opening branches in London, Shanghai, and South America
  • Financed the Holocaust in the 1930s, including the construction of the Auschwitz concentration camp and the Gestapo
  • Broken up to 10 smaller banks after Germany’s defeat in WWII by the Allies, but those banks later merged back together less than 10 years later
  • Acquired a bunch of overseas banks, including banks in the UK and the US, during the 80s and 90s, growing to become one of the largest money management firms in the world
  • Drove the market for CDOs in 2007 and even created CDOs consisting of their bad subprime mortgages, somehow got an A-level rating on them from the rating agencies, and aggressively marketed the CDOs to investors while knowing that their CDOs were shit. Their head of CDO trading, Greg Lippmann, knew about this and told everyone that CDOs were effectively a Ponzi scheme, even shorting CDOs himself through Credit Default Swaps. He then went around to different funds in Wall Street and told them that CDOs were going to collapse and sold them Credit Default Swaps as a way to short the CDO market, creating synthetic CDOs, the asset on the other side of that trade, with them to sell to other investors. This entire scheme was the inspiration for The Big Short, in case you didn’t realize this by now.
  • Also the bank that finances businesses of the current President, which might be worth considering for political motives / implications if something bad happens to Deutsche Bank
  • Today, they focus on Corporate Banking, Investment Banking, Private Banking, and Asset Management
Let’s see how $DB’s performance has been the past few years
$DB, 2002-2020, Monthly
Yikes, it went from an all time high of $140 in 2007 to $6 today in 2020. In terms of their market cap, it went from $70B from its 2007 peak to $13B today. So, what happened? Let’s look at their 2019 SEC annual filing.
10-K Deep Dive
Income Statement (omitted boring parts)
Revenue € 22.4B (Net Interest = 13.7B, Credit Losses = -723M, Commission & Feed = 9.5B)
Expenses € 25.1B (mostly Compensation and G&A)
Net income after taxes €-5.3B (includes 2.6B of losses from taxes)
From their interest income, 19% comes from Corporate Banking, 39% from Investment Banking, 30% from Private Banking, and the rest comes from some other various operations.
So in a good year, in a period of “high” interest rates in the US (at least relative to the past decade), Deutsche Bank is still somehow losing billions. In fact, it states that their slight 4% YoY increase in net revenue income was driven by the fact that the US had a more favorable interest rate environment during that year, and their reduction of deposits in Germany, where they were experiencing negative interest rates.
German Interbank Rates
Negative interest rates mean that banks need to pay the central bank to safely store their reserves with them, making it really hard to make a profit for banks. Luckily they had the relatively high interest rates of the US to make up for it in 2019. With interest rates cut to 0% again, this will be a very different story for 2020, and they’ll likely see even larger losses for this year.
Balance Sheet (omitted boring parts)
Assets € 1.3T
Cash & Central Bank Deposits € 147B
Financial Assets € 531B (Trading Assets - €110B, Derivatives with a positive value - € 333B)
Loans € 430B
Liabilities € 1.2T
Deposits € 572B
Financial Liabilities € 404B (Trading Liabilities - € 37B, Derivatives with a negative value - € 317B)
Long Term Debt € 136B
Equity € 62B
So there’s a few very interesting things here. First, is the fact that their book value is €62B, or $67B USD, giving them a leverage of 26, which is way higher than literally every bank in the United States.
Top 100 US banks, sorted by leverage
What does a bank leverage ratio mean? It’s a quick way to see how well capitalized a bank is, and its ability to withstand negative shocks to its balance sheets without becoming insolvent. It’s harder to think of a more severe shock to the economic systems and people’s ability to pay back loans than a complete worldwide lockdown.
Another thing fishy with their book value is that their market cap is sitting at 13B USD. Even in January, before the stock market crashed it was sitting at 17B USD. That’s a big red flag, because theoretically if Deutsche Bank’s assets were all liquidated today, investors should theoretically be left with €62B, or $38 per share, which is way higher than the stock’s current $6 share price. This should especially be easy because the vast majority of their balance sheet consists of liquid assets or assets that should be easy to liquidate… or are they?
Derivatives
Let’s take a closer look at their derivatives. In their annual statement, they mentioned that they were trying to discontinue their derivatives business, which already helped cause one banking crisis a decade ago. They restructured and put all their “bad” capital, like their derivatives, in its own entity, called the “Capital Release Unit”, with the goal of liquidating these assets to release capital and de-leverage themselves. In 2019, their Capital Release Unit lost a total of €3.9B and held the €333B of derivatives. It also looks like they’re doing a bad job of releasing this specific class of capital, because their derivative assets and liabilities actually increased since 2018. That’s because a lot of these derivatives are not traded in exchanges, but instead over-the-counter with parties that have an ISDA agreement. As anyone who’s watched The Big Short can tell you (so literally everyone else on this subreddit), these OTC derivatives tend to be illiquid and difficult to value due to lack of price discovery.
This is why Deutsche Bank’s book value is more than their market cap, even before COVID-19. There’s doubt as to what some of the OTC derivatives are actually worth. They have a book value of €62B with derivatives supposedly valued at €333B, meaning if the actual net value of these derivatives are 19% or more lower than what they say they are, they become insolvent. This is the bank equivalent of buying SPY puts on margin in Robinhood (yes I know you can’t do that), but not knowing how much your puts are worth until you try selling. If you were like most of wallstreetbets you probably bought SPY puts when SPY was at 220. You know if you tried to sell your puts you might find out that they’re now worth a lot less than you originally bought them for (in the case of OTC derivatives, they can actually have a negative value!), realizing your portfolio value (equity) is below zero and you get a margin call (insolvent). In fact, they’ve allegedly done something similar in 2008 by failing to recognize losses related to the explosion of super senior tranches of CDOs, which may have led to joining Lehman Brothers in the bank graveyard if they did.
Let’s take a closer look at these derivatives, specifically the ones that mature in 2020.
Derivatives maturing in 2020 by nominal value
Type Bilateral Central Counterparty Exchange Traded
Interest €2.5T €8.7T €4T
Currency €4.3T €95B €17B
Equity €98B 0 €184B
Credit €39B €63B 0
Commodity €2.7B 0 €31.9B
First a few things to clarify. Bilateral Clearing is an agreement between some party with an ISDA agreement with the bank, where the bank acts as the counterparty to the derivative being sold. Central Counterparty Clearing is when an institution facilitates an OTC derivative transaction by ensuring both sides of the transaction are financially sound enough and have enough collateral to not default on the derivative, and if any party defaults on the derivative, the central counterparty is now financially responsible for their side of the trade. This was put into place after 2008 when the risk of counterparties like AIG defaulting on credit default swaps became a huge systematic problem.
Also, a nominal value is different from a derivative’s actual price. For example, if you bought a SPY 4/20 220p, the nominal value of your derivative is $22000 (100 shares * $220 per share) but the actual value of your put is $0.
We know that since Dec 2019
  • Interest rates got cut all around the world
  • Currencies exchange rates have dramatically changed since December with oil-exporting countries. For example USD / CAD went from $1.30 to $1.42 during this time period
  • Equity values exploded, even with the bull run we’re currently in
  • A lot of BBB-rated companies got downgraded, and we might see defaults come in, even with the Fed buying bonds
  • Oil is fucked
These recent events will probably change the valuation of these derivatives by a lot, some of which are going to be realized on their balance sheets immediately (eg. exchange traded derivatives) because their valuations can easily be calculated. The key here is that the net losses needs to be below €62B or they become insolvent.
Now, we’re in the age of too-big-to-fail businesses and the US government and Fed bailing out everyone, which is a real risk of taking a short position against $DB, especially considering how connected they are with other US financial institutions by acting as the counterparty or the central counterparty clearing house to many derivatives that they hold. If Deutsche Bank goes under, a lot of other financial institutions are going to have problems. The problem with Deutsche Bank is that it is not a US company and can’t be hence bailed out by the US government. In fact, they weren’t eligible for TARP, the last government-funded bank bailout back in 2008, which is partially why they’ve been a financial mess ever since.
Their Q1 earnings call is on April 29, so we’ll find out how much trouble they are then.
TLDR; DB 5p 10/16
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Covid-19 update Wednesday 15th April

Good morning from the UK. It’s Wednesday 15th April.

The fire that severely damaged Notre-Dame Cathedral in Paris caught fire 1 year ago today on April 15 2019, Holy Monday and by the time it was finally put out it had destroyed the building’s spire and most of the roof. The stone vaults survived mostly intact, as did most of the cathedral’s artwork and relics. Covid-19 has delayed reconstruction efforts at Notre-Dame de Paris because removal of the melted scaffolding on the cathedral’s roof (scheduled to begin March 23) cannot take place whilst the country remains under coronavirus measures.

On Good Friday Archbishop Michel Aupetit of Paris venerated Notre Dame Cathedral’s relic of Christ’s crown of thorns from inside the badly damaged cathedral. The archbishop prayed: “Lord Jesus, a year ago, this cathedral in which we are, was burning, causing astonishment and a worldwide impetus for it to be rebuilt, restored. Today we are in this half-collapsed cathedral to say that life is still there. The whole world is struck down by a pandemic that spreads death and paralyzes us. This crown of thorns was saved on the evening of the fire by the firefighters. It is the sign of what you suffered from the derision of men. But it is also the magnificent sign that tells us that you are joining us at the height of our suffering, that we are not alone and that you are with us always,” Aupetit said.

Tonight though the Cathedral’s 339 year old 13 tonne bourdon bell (which is called Emmanuel and tuned to F#) will ring out to applaud the hard work of France’s medical workers engaged in the fight against Covid-19 (Source Liberation, in French and the Catholic News Agency).

How much our lives can change in just one year.

Virus news in depth


Trump suspends funding of the world health organisation - the biggest Covid-19 story this morning is the decision by US President Donald Trump to suspend funding of the World Health Organisation pending a review. "Had the WHO done its job to get medical experts into China to objectively assess the situation on the ground and to call out China's lack of transparency, the outbreak could have been contained at its source with very little death," Trump said. US Secretary of State Mike Pompeo stated that the WHO "declined to call this a pandemic for an awfully long time because frankly the Chinese Communist Party didn't want that to happen." CNN reports that the US funds $400 million to $500 million to the WHO each year, Trump said, noting that China "contributes roughly $40 million." Another article from CNN points out that the UK announced an additional £65 million contribution to the WHO only a few days ago.
Reaction to Trump's decision has been swift. Al Jazeera quotes Chinese Foreign Ministry spokesman Zhao Lijian during a daily briefing on the situation with the pandemic saying that the pandemic was at a critical stage and that the US' decision would affect all countries of the world. The news agency also quotes Dr Patrice Harris, president of the American Medical Association, who called it "a dangerous step in the wrong direction that will not make defeating COVID-19 easier". Bill Gates has tweeted “Halting funding for the World Health Organization during a world health crisis is as dangerous as it sounds. Their work is slowing the spread of COVID-19 and if that work is stopped no other organization can replace them. The world needs u/WHO now more than ever”. The Irish foreign minister Simon Coveney tweeted “This is indefensible decision, in midst of global pandemic. So many vulnerable populations rely on ⁦@WHO⁩ - deliberately undermining funding & trust now is shocking. Now is a time for global leadership & unity to save lives, not division and blame!” whilst Richard Horton, the editor-in-chief of the influential Lancet medical journal, wrote that Trump’s decision was “a crime against humanity … Every scientist, every health worker, every citizen must resist and rebel against this appalling betrayal of global solidarity”.

Chile counts those who died of coronavirus as recovered because they're 'no longer contagious,' health minister says - News Week reports that cases of the novel coronavirus in Chile have climbed past 7,500, including 82 deaths, while over 2,300 have recovered from infection as of Tuesday, according to data from Johns Hopkins University but coronavirus patients in Chile who have died are being counted among the country's recovered population because they are "no longer contagious," Chile's Health Minister Jaime Mañalich said this week. "We have 898 patients who are no longer contagious, who are not a source of contagion for others and we include them as recovered. These are the people who have completed 14 days of diagnosis or who unfortunately have passed away," Mañalich announced at a press conference. It is unknown when Chile began including the dead among the number of people who have recovered. But the calculation has reportedly been adopted following validation by international health experts, the government claims. (Personal note: I just checked, as of 9am UK time Johns Hopkins has Chile down as 7912 cases with 92 deaths. Hat tip to chomponthebit for this rather odd story).

Virus news in brief


Source; Today’s Guardian live blog unless otherwise stated











Supply chain news in depth


Heathrow cargo flights rise 500% as airport restyles itself as ‘vital airbridge’ - The Guardian says that the number of cargo-only flights at Heathrow has surged to five times normal levels, with the airport now saying it is prioritising medical supplies as passenger travel grinds to a halt. Britain’s biggest airport expects passenger traffic expected to plunge by 90% in April, with remaining flights mainly limited to repatriating citizens stranded abroad during the coronavirus outbreak. Instead, the hub airport is restyling itself as a “vital airbridge” for supplies and medical essentials during the coronavirus crisis. The number of cargo-only flights has jumped significantly; Heathrow’s busiest day for cargo so far was on 31 March, when it handled 38 cargo flights in only one day (the airport usually deals with 47 cargo flights per week). In a related article, the Independent reports that whilst the UK’s East Midlands airport has experienced “only” a 54% drop in total air movements, it’s nevertheless experienced a 7.4% rise in cargo flights with the result that it’s now the tenth busiest airport in Europe putting it ahead of major hubs such as Rome, Munich and Madrid. (Personal note: I live close to East Midlands airport and have definitely noticed there’s still a fair bit of traffic coming and going; it helps that DHL Express have a decent presence there too).

Global Airline Traffic Will Nearly Halve in 2020 - The Wall Street Journal reports that global airline traffic is expected to almost halve this year because of travel restrictions, with no recovery expected until the third quarter, according to an industry trade group. The International Air Transport Association forecast airlines would lose $314 billion in revenue this year, 25% more than its previous estimate as it incorporated more pessimistic assumptions about the hit to the global economy and the relaxation of travel restrictions. (Personal note: for contrast the drop in revenue for the global aviation industry after the 9/11 attacks was about $23bn according to an article in the Guardian; disruption in the industry from that event caused the bankruptcy of Swissair, Belgium's Sabena and Australia's Ansett whilst he American airlines United, US Airways, Northwest and Delta all filed for Chapter 11 bankruptcy protection from creditors).

Amazon faces having its operations reduced to a bare minimum in France - a court has ruled the e-commerce giant can deliver only essential goods while the company evaluates its workers’ risk of coronavirus exposure says today’s Guardian live blog (link above). The court in Nanterre, outside Paris, said Amazon France had “failed to recognise its obligations regarding the security and health of its workers,” according to a ruling seen by AFP. While carrying out the health evaluation, Amazon can prepare and deliver only “food, hygiene and medical products,” the court said. The injunction must be carried out within 24 hours, or Amazon France could face fines of €1m (£873,500) per day. Amazon has one month to carry out the evaluation. Concern has grown over the safety precautions taken by the company; dozens of workers protested in the United States last month.

Pandemic breaks Vietnam supply chains; loss of exports may be permanent - The Loadstar reports that Freight forwarders in Vietnam have seen cargo volumes down by up to 70% on pre-coronavirus levels, as their key markets remain under lockdown. According to Ho Chi Minh City-based supply chain consultant CEL, the world has entered a consumer demand crisis which could permanently alter its supply chains. “As we speak, the American consumer is currently already reducing expenditure on shoes, phones, appliances, clothes, cars and tools, for example,” said CEL managing partner Julien Brun. “Most of which are made in Asia, and a large portion in Vietnam.” When the coronavirus pandemic started in Wuhan in January, the crisis was seen as a China-specific problem from a supply chain perspective, and prompted a frantic search for alternative production and transport capacity in Vietnam, Mr Brun explained. Vietnam’s own reliance on China for raw materials and components quickly materialised, however, resulting in the start of delays and production challenges. “In a survey conducted by CEL at the end of March, 83% of companies in the physical value chain in Vietnam, including retailers, transporters, traders and manufacturers, had suffered supply issues over the past two months,” he said. “And 47% of them had issues specifically with Chinese suppliers, a large majority of which was over missing raw materials.” Mr Brun said manufacturers and retailers’ current sales volumes were too low to absorb fixed costs, leaving thousands of businesses with negative margins and thinning cash reserves.

Supply chain news in brief








Good news section


99 year old world war 2 veteran Capt. Tom Moore has so far managed to raise £5m ($6.25m USD, €5.72m EUR) in donations to the NHS - the BBC says that Capt. Tom Moore is currently in the middle of completing 100 laps of his garden (25 metres in length) before his 100th birthday at the end of April. Mr Moore was born in Keighley, West Yorkshire and trained as a civil engineer before enlisting in the army for World War Two, rising to captain and serving in India and Burma. NHS Charities Together, which will benefit from the funds, said it was "truly inspired and humbled". Nearly 170,000 people from around the world have donated money to his fundraising page since it was set up last week. Mr Moore began raising funds to thank the "magnificent" NHS staff who helped him with treatment for cancer and a broken hip. If you’re interested in supporting him his fundraising page is here.

Donations


Several asked if they can send me $/£/€ via Patreon (in some cases because I've saved them time or money, others for no reason at all). I don't need the cash (that's lovely though) but food bank charities are getting really hit hard with all this panic buying. Please consider giving whatever you'd have given me to a foodbank charity instead:
UK: https://www.trusselltrust.org/
France: https://www.banquealimentaire.org/
Germany: https://www.tafel.de/
Netherlands: https://www.voedselbankennederland.nl/steun-ons/steun-voedselbank-donatie/
Italy: https://www.bancoalimentare.it/it/node/1
Spain: https://www.fesbal.org/
Australia: https://www.foodbank.org.au/
Canada: https://www.foodbankscanada.ca/
USA: https://www.feedingamerica.org/
Thanks in advance for any donations you give. If there's foodbank charities in your country and it's not listed above, please suggest it and I will include it going forward.
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NEWS FLASH: Kingrise Finance Limited are Lease Bank Guarantee providers, BG SBLC Providers, Bank Instrument Providers, financial instrument providers, monetizers of bank instruments, international bank guarantee providers, genuine bank instrument providers & sblc providers.
How To Find Genuine Bank Guarantee (BG) Standby Letter of Credit (SBLC) Providers.
Everyday lots of people are asking How To Find Genuine Bank Instrument Providers such as Genuine SBLC Providers and real bank guarantee providers? Why are there so many scammers in the bank instrument industry? Why are most people who claim to be providers of bank instruments scammers? Since there are many sharks in this industry pretending to be providers, how can I find a real bg sblc provider that will not steal my money and run away?
In previous articles I mentioned how challenging it can be to find Genuine bg / sblc providers, but here, I will try and explain more.
📷
Firstly one needs to understand that banks do not advertise SBLC’s as part of their everyday banking products, the true reason behind this is simple, banks aren’t allowed to advertise SBLC. Standby Letters of Credit (SBLC) are provided by high net worth clients with a large cash holding in a bank account. These high net worth clients usually have investment portfolios which include hedge funds, private equity, pension funds etc and these individuals can be truly hard to get in touch with, either because they choose to remain anonymous or they are just straight-up busy individuals.
In order to be sure these genuine providers are dealing with serious prospective buyers of their bank instrument they usually undertake serious checks and balances, this task is usually assigned to reputable Financial Services Providers such as Kingrise Finance Limited. These Financial Services providers such as Kingrise Finance Limited are given the responsibility of making sure a strict screening process is adhered to and only prospective buyers who meet the necessary criteria are allowed access to the Genuine Provider.
So if you are in the market for an SBLC (Standby Letter OF Credit) or Bank Guarantee (BG) then make sure you use a reputable Financial Services Provider with decades of experience like Kingrise Finance Limited, the benefits of following this approach is you know you have peace of mind that your interest would be looked after and you surely would be getting the best deal.
What is a Standby Letter of Credit (SBLC)?
A Standby Letter of Credit (SBLC or SLOC) is a legal document that guarantees a bank’s commitment of payment to a seller in the event that the buyer–or the bank’s client–defaults on the agreement. A standby letter of credit helps facilitate international trade between companies that don’t know each other and have different laws and regulations. Although the buyer is certain to receive the goods and the seller certain to receive payment, a Standby Letter of Credit (SBLC) doesn’t guarantee the buyer will be happy with the goods. A standby letter of credit can also be abbreviated SBLC or SLOC. A standby letter of credit is different from a bank guarantee. Do not worry, we will tell you everything you need to know about Bank Guarantees (BG) but first lets find out the different types and uses of a Standby Letter of Credit (SBLC).

What are the Different Types and Examples of a Standby Letter of Credit (SBLC/SLOC)

Financial standby LOC: An exporter sells goods to a foreign buyer, who promises to pay within 60 days. If the payment never arrives (and the exporter required the buyer to use a standby letter of credit) the exporter can collect payment from the importer’s bank. Before issuing the letter of credit, the bank typically evaluates the importer’s credit and determines that the importer will repay the bank. But if the customer’s credit is in question, banks may require collateral (or funds on deposit) for approval.
Performance standby LOC: A contractor agrees to complete a construction project within a certain timeframe. When the deadline arrives, the project is not complete. With a standby letter of credit in place, the contractor’s customer can demand payment from the contractor’s bank. That payment functions as a penalty to encourage on-time completion, funding to bring in another contractor to take over mid-project, or compensation for the headaches of dealing with problems. This is an example of a “performance standby letter of credit, and a failure to perform triggers the payment.

Advantages of a Standby Letter of Credit (SBLC / SLOC)

An SBLC helps ensure that the buyer will receive the goods or service that’s outlined in the document. For example, if a contract calls for the construction of a building and the builder fails to deliver, the client presents the SLOC to the bank to be made whole. Another advantage when involved in global trade, a buyer has an increased certainty that the goods will be delivered from the seller.
Also, small businesses can have difficulty competing against bigger and better-known rivals. An SBLC can add credibility to its bid for a project and can often times help avoid an upfront payment to the seller.
The SBLC / SLOC is often seen in contracts involving international trade, which tend to involve a large commitment of money and have added risks.
For the business that is presented with a SLOC/SBLC, the greatest advantage is the potential ease of getting out of that worst-case scenario. If an agreement calls for payment within 30 days of delivery and the payment is not made, the seller can present the SLOC to the buyer’s bank for payment. Thus, the seller is guaranteed to be paid. Another advantage for the seller is that the SBLC reduces the risk of the production order being changed or canceled by the buyer.
Uses of SBLC / SLOC
A standby letter of credit helps facilitate international trade between companies that don’t know each other and have different laws and regulations. Although the buyer is certain to receive the goods and the seller certain to receive payment, a SLOC doesn’t guarantee the buyer will be happy with the goods. A standby letter of credit is most often sought by a business to help it obtain a contract. The contract is a “standby” agreement because the bank will have to pay only in a worst-case scenario. Although an sblc/sloc guarantees payment to a seller, the agreement must be followed exactly. For example, a delay in shipping or a misspelling a company’s name can lead to the bank refusing to make the payment.There are two main types of standby letters of credit:A financial sblc/sloc guarantees payment for goods or services as specified by an agreement. An oil refining company, for example, might arrange for such a letter to reassure a seller of crude oil that it can pay for a huge delivery of crude oil.Standby letters of credit can help establish trust with your business partners and be a powerful tool to help meet your business goals.
📷Genuine SBLC Provider- Lease BG/SBLC Providers | Kingrise Finance Limited
Cost of SBLC
Standby letter of credit costs between 1-10% of the SBLC/SLOC amount before issuing the sblc/sloc. This fee is usually charged per year that the letter of credit is in effect. If the sblc/sloc is needed for more than one year, there will be an option of rolls and extensions where applicable. If the terms of the contract are fulfilled early, you can cancel the SLOC/SLBC without incurring additional charges.
What is SBLC funding or SBLC Financing? SBLC financing or SBLC funding is the process of using sblc to obtain loan or financing from a bank. SBLC/SLOC financing can also be described as the process of converting a standby letter of credit (sblc / sloc) into cash or legal tender.
The Difference Between Letter of Credit (LC/DLC) and Standby Letter of Credit (SBLC/SLOC).
Please be informed that Standby Letter of Credit (SBLC/SLOC) is different from Letter of Credit (LC). A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Letters of credit are used extensively in the financing of international trade, where the reliability of contracting parties cannot be readily and easily determined. Its economic effect is to introduce a bank as an underwriter, where it assumes the counterparty risk of the buyer paying the seller for goods.
Letters of credit were traditionally governed by internationally recognized rules and procedures rather than by national law. The International Chamber of Commerce oversaw the preparation of the first Uniform Customs and Practice for Documentary Credits (UCP) in 1933, creating a voluntary framework for commercial banks to apply to transactions worldwide.
So What Is The major difference: The ‘Letter of Credit’ and the ‘StandBy Letter of Credit’ are two legal bank documents that are used by international traders. Both these letters are used to ensure the financial safety between the supplier and their buyers. And, SBLC is a type of LC that is used when there is a contingent upon the performance of the buyer and this letter is available with the seller to prove the buyer’s non-performance during the sale.
LC and SBLC are the two financial instruments that are meant to safeguard the financial interests of the international traders i.e. buyers and sellers. It simply means that both these terms are widely useful while making transactions between the two trading parties. These help in giving financial security to both the parties. Also, these contracts are produced in good faith and in both the cases the fund gets mobilized.

Bank Guarantee: Meaning, Types, Uses, Advantages, Charges, Difference & Process.

What is the Meaning of a Bank Guarantee (BG)?

A bank guarantee is a promise from a bank or a financial institution that if a particular borrower defaults on a loan, the bank will cover the loss. The bank guarantee signifies a lending institution ensures that the liabilities of a debtor is going to be met. In other words, if the debtor is unsuccessful to settle a debt, the bank will cover it. A bank guarantee allows the customer, or debtor, to acquire goods, purchase equipment or draw down a loan.
A bank guarantee acts similarly to a line of credit, except that a line of credit can be drawn upon at will by the bank’s client. A bank guarantee is used only if the client does not pay its vendor an agreed-upon amount. U.S. credit institutions are forbidden from assuming guarantee obligations, and therefore most international transactions require a standby letter of credit.

Types of Bank Guarantees

There are many different types of Bank Guarantee namely:
For example, St. Marys hospital is a new hospital that wants to buy $1 million in medical equipment. The equipment vendor requires St. Marys hospital to provide a bank guarantee to cover payments before they ship the equipment to St. Marys hospital. St. Marys hospital requests a guarantee from the lending institution such as Kingrise Finance Limited ( kingrisefinance.com ) keeping its cash accounts. Kingrise Finance Limited essentially cosigns the purchase contract with the vendor.

Uses of Bank Guarantee

Though there are lots of uses from a bank guarantee for the applicant, the bank should process the same only after ensuring the financial stability of the applicant/business. The risk involved in providing such a guarantee must be analysed thoroughly by the bank

Advantages and Disadvantages of Bank Guarantees

Bank guarantee has its own advantages and disadvantages. The advantages are:
On the flip side, there are some disadvantages such as:

Bank Guarantee Costs & Charges

Generally, BG charges are based on the risk assumed by the bank in each transaction. For example, a financial BG is considered to assume more risk than a performance BG. Hence, the fee for financial BG will be higher than the fee charged for performance BG. Based on the type of the BG, fees are generally charged on a quarterly basis on the BG value of 0.75% or 0.50% during the BG validity period. Apart from this, the bank may also charge the application processing fee, documentation fee, and handling fee. In some cases, security is required by the bank from its applicant, which is generally 100% of the BG value. In certain cases, collateral security or cash margin may also be accepted by the issuing bank. But Kingrise Finance Limited offers more flexible terms than banks, contact us today to get a free quote and free consultation.

What is the difference between Bank Guarantee (BG) & Letter of Credit (LOC)

Bank Guarantee is not the same as a letter of credit, although with both instruments the issuing bank accepts a customer’s liability if the customer defaults. With a guarantee, the seller’s claim goes first to the buyer, and if the buyer defaults, then the claim goes to the bank. With letters of credit, the seller’s claim goes first to the bank, not the buyer. Although the seller will likely get paid in both cases, letters of credit offer more assurance to sellers than guarantees generally do.
LOC is a financial document which imposes an obligation on the bank to make payment to the beneficiary on completion of certain services as required by the applicant. LOC is issued by the bank when the buyer requests his bank to make payment to the seller on the receipt of certain goods or services. That is, when the buyer runs into cash flow difficulties or similar situations and thus cannot make immediate payment to the seller, he will approach his bank to make the payment to the seller on submission of certain documents. The bank will later recover the amount paid from the buyer along with the required charges.
On the other hand, under BG, the bank is required to make payment to the third-party only if the applicant fails to make the payment to the third-party or does not fulfil the required obligations under the contract. A BG is essentially used to ensure a seller from loss or damage due to the non-performance by the other party in a contract.
However, there are a lot of differences between LOC and BG.
Major differences between Letter of Credit (LOC) and Bank Guarantee (BG)
ParticularsLOCBGNatureLOC is an obligation accepted by a bank to make payment to a beneficiary if certain services are performed.BG is an assurance given by the bank to the beneficiary to make the specified payment in case of default by the applicant.Primary liabilityBank retains the primary liability to make the payment and later collects the same from the customer.The bank assumes to make the payment only when the customer defaults to make payment.PaymentBank makes the payment to the beneficiary as and when it is due. It need not wait for a default to be made by the customer.Only when the customer defaults the payment to the beneficiary, the bank makes the payment.Way of working LOC ensures that the amount will be paid as long as the services are performed as per the agreed terms.BG assures to compensate for the loss if the applicant does not satisfy the specified conditions.Number of parties involvedThere are multiple parties involved here – LOC Issuing bank, its customer, the beneficiary (third party), and advising bank.There are only three parties involved – banker, its customer, and the beneficiary (third party).SuitabilityGenerally, this is more appropriate during the import and export of goods and services.Suits any business or personal transactions.RiskBank assumes more risk than the customer.Customer assumes the primary risk.
What is Bank Guarantee Funding? Bank Guarantee funding is the process of converting a bank guarantee into a cash or legal tender.
What is the LTV (Loan To Value) for leased bank instruments? At Kingrise Finance Limited, we offer the best rates in the industry. All our bank instruments are issued from prime banks and we offer 80% LTV which you cannot get elsewhere. So why go elsewhere?
Terms and Procedure for BG/SBLC
Below is the normal procedure for the submission and issuance of a Bank Guarantee or Standby Letter of Credit from Kingrise Finance Limited (KFL)
Step 1: Application is made to KINGRISE FINANCE LIMITED for opening of a BG/LC//SBLC including but not limited to the following:
  1. BG/SBLC application form. (Provided by KINGRISE FINANCE LIMITED upon request)
  2. Desired verbiage of BG/SBLC. (If none provided, KINGRISE FINANCE LIMITED will provide its normal BG/SBLC / letter of credit verbiage.
  3. SWIFT code and address of beneficiary bank.
  4. Know Your Customer (KYC) documents including but not limited to: Passport copy of applicant, proof of address documents such as electricity or water bill, articles of incorporation of applicant company and brief summary, executive summary and/or business plan of underlying transaction.
Step 2: KINGRISE FINANCE LIMITED reviews all documents presented and evaluates acceptability of documents. KINGRISE FINANCE LIMITED then either approves application or denies and shall inform the applicant of such decision.
Step 3: KINGRISE FINANCE LIMITED prepares draft of the BG/SBLC as it is comfortable to issue and forwards to client for approval. All drafts shall be in line with rules and regulations governing the issuance of BG/SBLC.
Step 4: The client approves the draft and:
  1. Signs a contract agreeing to the terms and conditions of issuance and issuance charges as negotiated.
  2. KINGRISE FINANCE LIMITED issues the invoice for the agreed upon charges.
Step 5: Client makes payment of charges as per agreed upon payment structure.
  1. Client shall provide TT/Wire copy of payment made to KINGRISE FINANCE LIMITED account.
  2. KINGRISE FINANCE LIMITED shall confirm to client credit of funds upon receipt of funds to KINGRISE FINANCE LIMITED account.
Step 6: KINGRISE FINANCE LIMITED uploads draft to SWIFT system and provides copy to applicant for final approval of message. Upon approval given by applicant KINGRISE FINANCE LIMITED then releases the SWIFT to beneficiary bank coordinates.
Step 7: Copies of released SWIFT are then forwarded to the client via email or hard copy as requested. In case the client is represented by an advisor, then it is forwarded to the advisor only.
Step 8: Any amendments to BG/SBLC are subject to approval of KINGRISE FINANCE LIMITED.
DESCRIPTION OF BUY/PURCHASE BANK INSTRUMENT (BG/SBLC)
  1. Instrument: BG (Bank Guarantee) Standby Letter of Credit (SBLC), cash-backed,
  2. Total Face Value: EuUSD 2 Million (Min) to EuUSD 500m (Max)
  3. Issuing Bank: HSBC Hong Kong, Barclays Bank London, Deutsch Bank AG, Frankfurt or any AA Rated Bank.
  4. Term / Age: One (1) Year and One (1) day, Fresh Cut
  5. Invoice Price: 45% Net and 47% Gross of the face value of each BG/SBLC to the Seller, including 2% consultancy fees as per IMFPA.
  6. Consultation Fee: In total of 2%, which is to be split and paid to the consultants as follows:
1% to …(Seller’s Mandate).., paid by the SellePayer-1
1% to ………………………, paid by the BuyePayer-2 7. Delivery of instrument: Bank-To-Bank by SWIFT MT-760, as per the Schedule of Delivery of Buy-Sell Agreement
  1. Payment for instruments: By SWIFT MT-103 wire transfer
  2. Original Hard Copy: By bonded courier to Buyer’s designated Depository Bank within Seven (7) bank working days after receipt of BG/SBLC(s) settlement payment by SWIFT MT-103 into the Seller’s account.
BELOW IS THE DESCRIPTION OF LEASE BANK INSTRUMENTS (BG/SBLC/SLOC)
  1. Instrument: Fully Cash Backed Bank Guarantee {BG} or StandBy Letter of Credit {SBLC}
  2. Total Face Value: USD 2Million (Min) to USD 500m (Max)
  3. Issuing Bank: HSBC Hong Kong, Barclays Bank London or any prime Bank.
  4. Age: One Year and One Day (with rolls and extensions where applicable)
  5. Leasing Price: 4% (+ 2% brokers commission where applicable) 2% broker commission applies to clients that were introduced by brokers
  6. Delivery: SWIFT MT-760
  7. Payment: MT103 Wire Transfer
  8. Hard Copy: Bonded Courier within 7 banking days.9. Bank Transmission fee: Depends on the face value of the bank instrument
Uses of Bank Instruments for potential holders or beneficiary
  1. Bank instruments vary in scope and purpose with each bank instrument serving a specific purpose. Bank instruments are very important in international trades, trade finance, important and export transactions and they are widely used by businesses, contractors, importers as well as exporters.
  2. Some financial instruments will act as Collateral or credit enhancement to shore up financial statements and profile.
  3. Loan or funding commitment; demonstrate project, business, venture or program has sufficient merit or cash flow returns to warrant funding and investments.
  4. Some bank instruments like letters of credit helps to facilitate international trade between companies that don’t know each other and have different laws and regulations.
  5. Proof of funds, bank guarantees, letters of credit; to facilitate, secure or execute projects, trade and business transactions.
  6. Bank instruments like letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Letters of credit are used extensively in the financing of international trade, where the reliability of contracting parties cannot be readily and easily determined. Its economic effect is to introduce a bank as an underwriter, where it assumes the counterparty risk of the buyer paying the seller for goods.
  7. Another bank instrument known as bank guarantee acts similarly to a line of credit, except that a line of credit can be drawn upon at will by the bank’s client. A bank guarantee is used only if the client does not pay its vendor an agreed-upon amount. U.S. credit institutions are forbidden from assuming guarantee obligations, and therefore most international transactions require a standby letter of credit.
As we already admitted from the beginning of this article, there are many scammers in this industry so we advise every customer to be very vigilant and do their homework well before deciding to work with any provider. I must warn you that there are only 10 real providers of bank instruments in the world and Kingrise Finance Limited is occupying the top spot in the real bg/sblc providers list. We are the go to place when you need real sblc providers. We are the world’s leading provider of bank guarantee.

BG / SBLC Process- How to obtain or acquire a bank Guarantee (BG) or SBLC

One of the easiest and best ways to obtain a bank Guarantee (BG) Is through Kingrise Finance Limited. Kingrise Finance Limited was incorporated in Hong Kong on 22-SEP-1999 as a Government Licensed Money Lender with CR No.: 0689078. We are leading providers of Business Loan, SME Loans, Project Financing, Recourse Loan, Non Recourse Loans and Bank Financial Instruments such as Standby Letter of Credit Funding, Bank Guarantee, Performance Guarantee Bond, Tender Bond Guarantee, Advance Payment Guarantee, Bank Comfort Letter, BG/CD/BD/BCL/DLC/LOC/SLOC/SBLC etc.
We have been providing these financial services to our numerous customers all over the world including importers, exporters as well as customers that need credit enhancements or trade finance facilities to execute projects locally or internationally.
Our loan interest rate is just 3% annually and you can get loan financing from us with or without security or collateral. The loan term is up to 30 years with a grace period up to 3 years for those in the construction industry.
Our bank instruments, bg and sblc/sloc are issued from prime banks such as Barclays Bank London, Standard Chartered Bank, HSBC Hong Kong or any rated AAA bank of your choice. All our financial instruments are Cash-Backed and can be used as collateral to secure funding for projects, Discounting, Monetization and Private Placement Programs (PPP).
📷Finding Real Bank Instrument Providers- Kingrise Finance Limited
Why Choose Us?
BROKERS: We welcome new brokers who are direct to their clients. New brokers are welcomed and are rewarded with 2% commission on every deal they bring to us.
Email: [[email protected]](mailto:[email protected])
Website: www.kingrisefinance.com
Blog: https://kingrisefinance.blog
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Lease Bank Guarantee (BG) & SBLC Providers

NEWS FLASH: Kingrise Finance Limited are Lease Bank Guarantee providers, BG SBLC Providers, Bank Instrument Providers, financial instrument providers, monetizers of bank instruments, international bank guarantee providers, genuine bank instrument providers & sblc providers.
How To Find Genuine Bank Guarantee (BG) Standby Letter of Credit (SBLC) Providers.
Everyday lots of people are asking How To Find Genuine Bank Instrument Providers such as Genuine SBLC Providers and real bank guarantee providers? Why are there so many scammers in the bank instrument industry? Why are most people who claim to be providers of bank instruments scammers? Since there are many sharks in this industry pretending to be providers, how can I find a real bg sblc provider that will not steal my money and run away?
In previous articles I mentioned how challenging it can be to find Genuine bg / sblc providers, but here, I will try and explain more.
📷
Firstly one needs to understand that banks do not advertise SBLC’s as part of their everyday banking products, the true reason behind this is simple, banks aren’t allowed to advertise SBLC. Standby Letters of Credit (SBLC) are provided by high net worth clients with a large cash holding in a bank account. These high net worth clients usually have investment portfolios which include hedge funds, private equity, pension funds etc and these individuals can be truly hard to get in touch with, either because they choose to remain anonymous or they are just straight-up busy individuals.
In order to be sure these genuine providers are dealing with serious prospective buyers of their bank instrument they usually undertake serious checks and balances, this task is usually assigned to reputable Financial Services Providers such as Kingrise Finance Limited. These Financial Services providers such as Kingrise Finance Limited are given the responsibility of making sure a strict screening process is adhered to and only prospective buyers who meet the necessary criteria are allowed access to the Genuine Provider.
So if you are in the market for an SBLC (Standby Letter OF Credit) or Bank Guarantee (BG) then make sure you use a reputable Financial Services Provider with decades of experience like Kingrise Finance Limited, the benefits of following this approach is you know you have peace of mind that your interest would be looked after and you surely would be getting the best deal.
What is a Standby Letter of Credit (SBLC)?
A Standby Letter of Credit (SBLC or SLOC) is a legal document that guarantees a bank’s commitment of payment to a seller in the event that the buyer–or the bank’s client–defaults on the agreement. A standby letter of credit helps facilitate international trade between companies that don’t know each other and have different laws and regulations. Although the buyer is certain to receive the goods and the seller certain to receive payment, a Standby Letter of Credit (SBLC) doesn’t guarantee the buyer will be happy with the goods. A standby letter of credit can also be abbreviated SBLC or SLOC. A standby letter of credit is different from a bank guarantee. Do not worry, we will tell you everything you need to know about Bank Guarantees (BG) but first lets find out the different types and uses of a Standby Letter of Credit (SBLC).

What are the Different Types and Examples of a Standby Letter of Credit (SBLC/SLOC)

Financial standby LOC: An exporter sells goods to a foreign buyer, who promises to pay within 60 days. If the payment never arrives (and the exporter required the buyer to use a standby letter of credit) the exporter can collect payment from the importer’s bank. Before issuing the letter of credit, the bank typically evaluates the importer’s credit and determines that the importer will repay the bank. But if the customer’s credit is in question, banks may require collateral (or funds on deposit) for approval.
Performance standby LOC: A contractor agrees to complete a construction project within a certain timeframe. When the deadline arrives, the project is not complete. With a standby letter of credit in place, the contractor’s customer can demand payment from the contractor’s bank. That payment functions as a penalty to encourage on-time completion, funding to bring in another contractor to take over mid-project, or compensation for the headaches of dealing with problems. This is an example of a “performance standby letter of credit, and a failure to perform triggers the payment.

Advantages of a Standby Letter of Credit (SBLC / SLOC)

An SBLC helps ensure that the buyer will receive the goods or service that’s outlined in the document. For example, if a contract calls for the construction of a building and the builder fails to deliver, the client presents the SLOC to the bank to be made whole. Another advantage when involved in global trade, a buyer has an increased certainty that the goods will be delivered from the seller.
Also, small businesses can have difficulty competing against bigger and better-known rivals. An SBLC can add credibility to its bid for a project and can often times help avoid an upfront payment to the seller.
The SBLC / SLOC is often seen in contracts involving international trade, which tend to involve a large commitment of money and have added risks.
For the business that is presented with a SLOC/SBLC, the greatest advantage is the potential ease of getting out of that worst-case scenario. If an agreement calls for payment within 30 days of delivery and the payment is not made, the seller can present the SLOC to the buyer’s bank for payment. Thus, the seller is guaranteed to be paid. Another advantage for the seller is that the SBLC reduces the risk of the production order being changed or canceled by the buyer.
Uses of SBLC / SLOC
A standby letter of credit helps facilitate international trade between companies that don’t know each other and have different laws and regulations. Although the buyer is certain to receive the goods and the seller certain to receive payment, a SLOC doesn’t guarantee the buyer will be happy with the goods. A standby letter of credit is most often sought by a business to help it obtain a contract. The contract is a “standby” agreement because the bank will have to pay only in a worst-case scenario. Although an sblc/sloc guarantees payment to a seller, the agreement must be followed exactly. For example, a delay in shipping or a misspelling a company’s name can lead to the bank refusing to make the payment.There are two main types of standby letters of credit:A financial sblc/sloc guarantees payment for goods or services as specified by an agreement. An oil refining company, for example, might arrange for such a letter to reassure a seller of crude oil that it can pay for a huge delivery of crude oil.Standby letters of credit can help establish trust with your business partners and be a powerful tool to help meet your business goals.
📷Genuine SBLC Provider- Lease BG/SBLC Providers | Kingrise Finance Limited
Cost of SBLC
Standby letter of credit costs between 1-10% of the SBLC/SLOC amount before issuing the sblc/sloc. This fee is usually charged per year that the letter of credit is in effect. If the sblc/sloc is needed for more than one year, there will be an option of rolls and extensions where applicable. If the terms of the contract are fulfilled early, you can cancel the SLOC/SLBC without incurring additional charges.
What is SBLC funding or SBLC Financing? SBLC financing or SBLC funding is the process of using sblc to obtain loan or financing from a bank. SBLC/SLOC financing can also be described as the process of converting a standby letter of credit (sblc / sloc) into cash or legal tender.
The Difference Between Letter of Credit (LC/DLC) and Standby Letter of Credit (SBLC/SLOC).
Please be informed that Standby Letter of Credit (SBLC/SLOC) is different from Letter of Credit (LC). A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Letters of credit are used extensively in the financing of international trade, where the reliability of contracting parties cannot be readily and easily determined. Its economic effect is to introduce a bank as an underwriter, where it assumes the counterparty risk of the buyer paying the seller for goods.
Letters of credit were traditionally governed by internationally recognized rules and procedures rather than by national law. The International Chamber of Commerce oversaw the preparation of the first Uniform Customs and Practice for Documentary Credits (UCP) in 1933, creating a voluntary framework for commercial banks to apply to transactions worldwide.
So What Is The major difference: The ‘Letter of Credit’ and the ‘StandBy Letter of Credit’ are two legal bank documents that are used by international traders. Both these letters are used to ensure the financial safety between the supplier and their buyers. And, SBLC is a type of LC that is used when there is a contingent upon the performance of the buyer and this letter is available with the seller to prove the buyer’s non-performance during the sale.
LC and SBLC are the two financial instruments that are meant to safeguard the financial interests of the international traders i.e. buyers and sellers. It simply means that both these terms are widely useful while making transactions between the two trading parties. These help in giving financial security to both the parties. Also, these contracts are produced in good faith and in both the cases the fund gets mobilized.

Bank Guarantee: Meaning, Types, Uses, Advantages, Charges, Difference & Process.

What is the Meaning of a Bank Guarantee (BG)?

A bank guarantee is a promise from a bank or a financial institution that if a particular borrower defaults on a loan, the bank will cover the loss. The bank guarantee signifies a lending institution ensures that the liabilities of a debtor is going to be met. In other words, if the debtor is unsuccessful to settle a debt, the bank will cover it. A bank guarantee allows the customer, or debtor, to acquire goods, purchase equipment or draw down a loan.
A bank guarantee acts similarly to a line of credit, except that a line of credit can be drawn upon at will by the bank’s client. A bank guarantee is used only if the client does not pay its vendor an agreed-upon amount. U.S. credit institutions are forbidden from assuming guarantee obligations, and therefore most international transactions require a standby letter of credit.

Types of Bank Guarantees

There are many different types of Bank Guarantee namely:
For example, St. Marys hospital is a new hospital that wants to buy $1 million in medical equipment. The equipment vendor requires St. Marys hospital to provide a bank guarantee to cover payments before they ship the equipment to St. Marys hospital. St. Marys hospital requests a guarantee from the lending institution such as Kingrise Finance Limited ( kingrisefinance.com ) keeping its cash accounts. Kingrise Finance Limited essentially cosigns the purchase contract with the vendor.

Uses of Bank Guarantee

Though there are lots of uses from a bank guarantee for the applicant, the bank should process the same only after ensuring the financial stability of the applicant/business. The risk involved in providing such a guarantee must be analysed thoroughly by the bank

Advantages and Disadvantages of Bank Guarantees

Bank guarantee has its own advantages and disadvantages. The advantages are:
On the flip side, there are some disadvantages such as:

Bank Guarantee Costs & Charges

Generally, BG charges are based on the risk assumed by the bank in each transaction. For example, a financial BG is considered to assume more risk than a performance BG. Hence, the fee for financial BG will be higher than the fee charged for performance BG. Based on the type of the BG, fees are generally charged on a quarterly basis on the BG value of 0.75% or 0.50% during the BG validity period. Apart from this, the bank may also charge the application processing fee, documentation fee, and handling fee. In some cases, security is required by the bank from its applicant, which is generally 100% of the BG value. In certain cases, collateral security or cash margin may also be accepted by the issuing bank. But Kingrise Finance Limited offers more flexible terms than banks, contact us today to get a free quote and free consultation.

What is the difference between Bank Guarantee (BG) & Letter of Credit (LOC)

Bank Guarantee is not the same as a letter of credit, although with both instruments the issuing bank accepts a customer’s liability if the customer defaults. With a guarantee, the seller’s claim goes first to the buyer, and if the buyer defaults, then the claim goes to the bank. With letters of credit, the seller’s claim goes first to the bank, not the buyer. Although the seller will likely get paid in both cases, letters of credit offer more assurance to sellers than guarantees generally do.
LOC is a financial document which imposes an obligation on the bank to make payment to the beneficiary on completion of certain services as required by the applicant. LOC is issued by the bank when the buyer requests his bank to make payment to the seller on the receipt of certain goods or services. That is, when the buyer runs into cash flow difficulties or similar situations and thus cannot make immediate payment to the seller, he will approach his bank to make the payment to the seller on submission of certain documents. The bank will later recover the amount paid from the buyer along with the required charges.
On the other hand, under BG, the bank is required to make payment to the third-party only if the applicant fails to make the payment to the third-party or does not fulfil the required obligations under the contract. A BG is essentially used to ensure a seller from loss or damage due to the non-performance by the other party in a contract.
However, there are a lot of differences between LOC and BG.
Major differences between Letter of Credit (LOC) and Bank Guarantee (BG)
ParticularsLOCBGNatureLOC is an obligation accepted by a bank to make payment to a beneficiary if certain services are performed.BG is an assurance given by the bank to the beneficiary to make the specified payment in case of default by the applicant.Primary liabilityBank retains the primary liability to make the payment and later collects the same from the customer.The bank assumes to make the payment only when the customer defaults to make payment.PaymentBank makes the payment to the beneficiary as and when it is due. It need not wait for a default to be made by the customer.Only when the customer defaults the payment to the beneficiary, the bank makes the payment.Way of working LOC ensures that the amount will be paid as long as the services are performed as per the agreed terms.BG assures to compensate for the loss if the applicant does not satisfy the specified conditions.Number of parties involvedThere are multiple parties involved here – LOC Issuing bank, its customer, the beneficiary (third party), and advising bank.There are only three parties involved – banker, its customer, and the beneficiary (third party).SuitabilityGenerally, this is more appropriate during the import and export of goods and services.Suits any business or personal transactions.RiskBank assumes more risk than the customer.Customer assumes the primary risk.
What is Bank Guarantee Funding? Bank Guarantee funding is the process of converting a bank guarantee into a cash or legal tender.
What is the LTV (Loan To Value) for leased bank instruments? At Kingrise Finance Limited, we offer the best rates in the industry. All our bank instruments are issued from prime banks and we offer 80% LTV which you cannot get elsewhere. So why go elsewhere?
Terms and Procedure for BG/SBLC
Below is the normal procedure for the submission and issuance of a Bank Guarantee or Standby Letter of Credit from Kingrise Finance Limited (KFL)
Step 1: Application is made to KINGRISE FINANCE LIMITED for opening of a BG/LC//SBLC including but not limited to the following:
  1. BG/SBLC application form. (Provided by KINGRISE FINANCE LIMITED upon request)
  2. Desired verbiage of BG/SBLC. (If none provided, KINGRISE FINANCE LIMITED will provide its normal BG/SBLC / letter of credit verbiage.
  3. SWIFT code and address of beneficiary bank.
  4. Know Your Customer (KYC) documents including but not limited to: Passport copy of applicant, proof of address documents such as electricity or water bill, articles of incorporation of applicant company and brief summary, executive summary and/or business plan of underlying transaction.
Step 2: KINGRISE FINANCE LIMITED reviews all documents presented and evaluates acceptability of documents. KINGRISE FINANCE LIMITED then either approves application or denies and shall inform the applicant of such decision.
Step 3: KINGRISE FINANCE LIMITED prepares draft of the BG/SBLC as it is comfortable to issue and forwards to client for approval. All drafts shall be in line with rules and regulations governing the issuance of BG/SBLC.
Step 4: The client approves the draft and:
  1. Signs a contract agreeing to the terms and conditions of issuance and issuance charges as negotiated.
  2. KINGRISE FINANCE LIMITED issues the invoice for the agreed upon charges.
Step 5: Client makes payment of charges as per agreed upon payment structure.
  1. Client shall provide TT/Wire copy of payment made to KINGRISE FINANCE LIMITED account.
  2. KINGRISE FINANCE LIMITED shall confirm to client credit of funds upon receipt of funds to KINGRISE FINANCE LIMITED account.
Step 6: KINGRISE FINANCE LIMITED uploads draft to SWIFT system and provides copy to applicant for final approval of message. Upon approval given by applicant KINGRISE FINANCE LIMITED then releases the SWIFT to beneficiary bank coordinates.
Step 7: Copies of released SWIFT are then forwarded to the client via email or hard copy as requested. In case the client is represented by an advisor, then it is forwarded to the advisor only.
Step 8: Any amendments to BG/SBLC are subject to approval of KINGRISE FINANCE LIMITED.
DESCRIPTION OF BUY/PURCHASE BANK INSTRUMENT (BG/SBLC)
  1. Instrument: BG (Bank Guarantee) Standby Letter of Credit (SBLC), cash-backed,
  2. Total Face Value: EuUSD 2 Million (Min) to EuUSD 500m (Max)
  3. Issuing Bank: HSBC Hong Kong, Barclays Bank London, Deutsch Bank AG, Frankfurt or any AA Rated Bank.
  4. Term / Age: One (1) Year and One (1) day, Fresh Cut
  5. Invoice Price: 45% Net and 47% Gross of the face value of each BG/SBLC to the Seller, including 2% consultancy fees as per IMFPA.
  6. Consultation Fee: In total of 2%, which is to be split and paid to the consultants as follows:
1% to …(Seller’s Mandate).., paid by the SellePayer-1
1% to ………………………, paid by the BuyePayer-2 7. Delivery of instrument: Bank-To-Bank by SWIFT MT-760, as per the Schedule of Delivery of Buy-Sell Agreement
  1. Payment for instruments: By SWIFT MT-103 wire transfer
  2. Original Hard Copy: By bonded courier to Buyer’s designated Depository Bank within Seven (7) bank working days after receipt of BG/SBLC(s) settlement payment by SWIFT MT-103 into the Seller’s account.
BELOW IS THE DESCRIPTION OF LEASE BANK INSTRUMENTS (BG/SBLC/SLOC)
  1. Instrument: Fully Cash Backed Bank Guarantee {BG} or StandBy Letter of Credit {SBLC}
  2. Total Face Value: USD 2Million (Min) to USD 500m (Max)
  3. Issuing Bank: HSBC Hong Kong, Barclays Bank London or any prime Bank.
  4. Age: One Year and One Day (with rolls and extensions where applicable)
  5. Leasing Price: 4% (+ 2% brokers commission where applicable) 2% broker commission applies to clients that were introduced by brokers
  6. Delivery: SWIFT MT-760
  7. Payment: MT103 Wire Transfer
  8. Hard Copy: Bonded Courier within 7 banking days.9. Bank Transmission fee: Depends on the face value of the bank instrument
Uses of Bank Instruments for potential holders or beneficiary
  1. Bank instruments vary in scope and purpose with each bank instrument serving a specific purpose. Bank instruments are very important in international trades, trade finance, important and export transactions and they are widely used by businesses, contractors, importers as well as exporters.
  2. Some financial instruments will act as Collateral or credit enhancement to shore up financial statements and profile.
  3. Loan or funding commitment; demonstrate project, business, venture or program has sufficient merit or cash flow returns to warrant funding and investments.
  4. Some bank instruments like letters of credit helps to facilitate international trade between companies that don’t know each other and have different laws and regulations.
  5. Proof of funds, bank guarantees, letters of credit; to facilitate, secure or execute projects, trade and business transactions.
  6. Bank instruments like letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Letters of credit are used extensively in the financing of international trade, where the reliability of contracting parties cannot be readily and easily determined. Its economic effect is to introduce a bank as an underwriter, where it assumes the counterparty risk of the buyer paying the seller for goods.
  7. Another bank instrument known as bank guarantee acts similarly to a line of credit, except that a line of credit can be drawn upon at will by the bank’s client. A bank guarantee is used only if the client does not pay its vendor an agreed-upon amount. U.S. credit institutions are forbidden from assuming guarantee obligations, and therefore most international transactions require a standby letter of credit.
As we already admitted from the beginning of this article, there are many scammers in this industry so we advise every customer to be very vigilant and do their homework well before deciding to work with any provider. I must warn you that there are only 10 real providers of bank instruments in the world and Kingrise Finance Limited is occupying the top spot in the real bg/sblc providers list. We are the go to place when you need real sblc providers. We are the world’s leading provider of bank guarantee.

BG / SBLC Process- How to obtain or acquire a bank Guarantee (BG) or SBLC

One of the easiest and best ways to obtain a bank Guarantee (BG) Is through Kingrise Finance Limited. Kingrise Finance Limited was incorporated in Hong Kong on 22-SEP-1999 as a Government Licensed Money Lender with CR No.: 0689078. We are leading providers of Business Loan, SME Loans, Project Financing, Recourse Loan, Non Recourse Loans and Bank Financial Instruments such as Standby Letter of Credit Funding, Bank Guarantee, Performance Guarantee Bond, Tender Bond Guarantee, Advance Payment Guarantee, Bank Comfort Letter, BG/CD/BD/BCL/DLC/LOC/SLOC/SBLC etc.
We have been providing these financial services to our numerous customers all over the world including importers, exporters as well as customers that need credit enhancements or trade finance facilities to execute projects locally or internationally.
Our loan interest rate is just 3% annually and you can get loan financing from us with or without security or collateral. The loan term is up to 30 years with a grace period up to 3 years for those in the construction industry.
Our bank instruments, bg and sblc/sloc are issued from prime banks such as Barclays Bank London, Standard Chartered Bank, HSBC Hong Kong or any rated AAA bank of your choice. All our financial instruments are Cash-Backed and can be used as collateral to secure funding for projects, Discounting, Monetization and Private Placement Programs (PPP).
📷Finding Real Bank Instrument Providers- Kingrise Finance Limited
Why Choose Us?
BROKERS: We welcome new brokers who are direct to their clients. New brokers are welcomed and are rewarded with 2% commission on every deal they bring to us.
Email: [[email protected]](mailto:[email protected])
Website: www.kingrisefinance.com
Blog: https://kingrisefinance.blog
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