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In what was an abysmal year for most hedge funds, three investing icons successfully pulled their weight and generated outsized returns amid an otherwise dreary landscape.

Last week we reported that after correctly predicting the “significant risk of a correction”, quant giant Renaissancemade an impressive 8.5% return in 2018 despite a 2.1% drop in December, solidly outperforming the broader market.

It wasn’t just the secretive fund founded by chain-smoking codebreaker Jim Simons that blew past its competition last year. On Sunday, Bloomberg reported that Bridgewater’s flagship Pure Alpha fund rose a remarkable 14.6%. This was no small feat for Bridgewater which also happens to be the world’s biggest hedge fund with $160 billion in unlevered assets, and came at a time when hedge unds on average lost 6.7%  in 2018, according to the HFRX Global Hedge Fund Index, as market trend and momentum both collapsed.

A just as impressive record is that since its inception in 1991, Pure Alpha Strategy has generated an average annualized return of 12% after fees, a track record which some have wondered if it is too good to be true.

And yet in a bizarre twist at the start of 2018, Bridgewater’s Ray Dalio said on January 23 that “If you’re holding cash, you’re going to feel pretty stupid.” Ironically, cash ended up being the best performing assets, while virtually every other asset class posted negative returns in 2018, making those holding anything but cash feeling pretty stupid. Which means that at some point between January and December, Ray Dalio quietly moved out of most assets although “surprisingly” he never made that shift public.

In any case it wasn’t just Simons and Dalio: according to a Monday note from Bloomberg, the flagship fund of another computer scientist, David Shaw’s, D.E. Shaw, also generated double-digit returns, gaining 11.2% last year.

The New York-based investment firm’s Composite fund invests across multiple strategies and is the company’s largest and longest-running. It returned 3.5 percent last month, the person said, as the S&P 500 Index sunk 9.2 percent.

And in yet another indication that Madoff was an amateur, DE Shaw’s composite fund, which has about $14 billion in assets, amazingly hasn’t had a losing year over the past decade. In 2017, it gained 10.3%, the Bloomberg source said.

D.E. Shaw was founded by computer scientist David Shaw and has more than $50 billion in assets under management, including $28 billion in hedge funds. Its Composite fund has largely been closed to new investors since mid-2013, but the group continues to build out new strategies and products. Recent areas of development have included private credit opportunities in Europe and renewables investing.

Some trivia: when DE Shaw was just two years old, a largely unknown 26-year-old took a job at D.E. Shaw and became one of the company’s vice presidents in just four years; he was tasked with researching new business opportunities on the rapidly growing Internet, which was held tremendous potential in the early 1990s. That youngest made a list of 20 products he could sell online, and decided that books were the most viable option. When he couldn’t get D.E. Shaw on board with the idea, he decided to branch out on his own.

A little under three decades later, that “relatively unknown” person is now the world’s richest person.

 

 

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Spot Gold prices rallied for three straight months to end 2018, with December seeing the biggest monthly gold gains in around two years (since Jan 2017)…

At the same time, China’s official gold reserves rose for the first time in around two years (since Oct 2016)…

China’s gold reserves had been steady at 59.240 million fine troy ounces from October 2016 to November 2018, according to data from the People’s Bank of China, and suddenly jumped to 59.560 million fine troy ounces at end-December.

The PBOC’s overall FX reserves rose by US$11bn in December to $3.07tn. However, The increase likely reflects the currency valuation effect, which Goldman estimates to be +$14bn in December.

It’s not just China buying. As Bloomberg reports, Poland and Hungary surprised the market in 2018 by adding to their gold holdings for the first time in many years.

“It’s a bullish sign for gold,” Matthew Turner, a commodities strategist at Macquarie Group Ltd. in London, said by phone.

“The reasons could be diversification, a wish to get away from the dollar, but it’s hard to be certain because we just don’t know enough about what their motivations are.”

As is very clear from the chart above, China has previously spent long periods without revealing increases in gold holdings. When the central bank announced a 57 percent jump in reserves to 53.3 million ounces in July 2015, it was the first update in six years.

“I’m always wary of year-end moves, but if they buy again, then it’ll look like they’re on another run of additions, like they did in 2015-2016.” Turner said.

Crucially, the size of the gold addition are far less important than the signaling effect – why did China decide now was the right time to publicly admit its gold reserves are rising?

After months of seeming stability in the yuan relative to gold, Q4 2018 saw China seemingly allow gold to appreciate relative to the yuan

One wonders if Alasdair Macleod is on to something when he notes that if the yuan is to replace the dollar for China’s trade, officials will have to back it with gold…

It is hard to see how the US can match a sound-money plan from China. Furthermore, the US Government’s finances are already in very poor shape and a return to sound money would require a reduction in government spending that all observers can agree is politically impossible. This is not a problem the Chinese government faces, and the purpose of a gold-linked jumbo bond is not so much to raise funds; rather it is to seal a price relationship between the yuan and gold.

Whether China implements the plan suggested herein or not, one thing is for sure: the next credit crisis will happen, and it will have a major impact on all nations operating with fiat money systems. The interest rate question, because of the mountains of debt owed by governments and consumers, will have to be addressed, with nearly all Western economies irretrievably ensnared in a debt trap. The hurdles faced in moving to a sound monetary policy appear to be simply too daunting to be addressed.

Ultimately, a return to sound money is a solution that will do less damage than fiat currencies losing their purchasing power at an accelerating pace. Think Venezuela, and how sound money would solve her problems. But that path is blocked by a sink-hole that threatens to swallow up whole governments. Trying to buy time by throwing yet more money at an economy suffering a credit crisis will only destroy the currency. The tactic worked during the Lehman crisis, but it was a close-run thing. It is unlikely to work again.

Because China’s economy has had its debt expansion of the last ten years mostly aimed at production, if she fails to act soon she faces an old-fashioned slump with industries going bust and unemployment rocketing. China offers very limited welfare, and without Maoist-style suppression, faces the prospect of not only the state’s plans going awry, but discontent and rebellion developing among the masses.

For China, a gold-exchange yuan standard is now the only way out. She will also need to firmly deny what Western universities have been teaching her brightest students. But if she acts early and decisively, China will be the one left standing when the dust settles, and the rest of us in our fiat-financed welfare states will left chewing the dirt of our unsound currencies.

 

Is China’s “signal” an explicit warning of the end to the dollar era that has existed since August 1971, when gold as the ultimate money was driven out of the monetary system.

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We warned last week what could happen if the government shutdown continues into February…

If people are getting this restless already, what will things look like when tens of millions of Americans are suddenly cut off from their primary source of food money?

Well, as Daisy Luther reports from her Organic Prepper blog, it’s starting…

We weren’t expecting to see a loss of food stamp benefits until the end of January, but a grocery store in Indiana reported they are unable to process EBT payments.

In Clay City, Indiana, the local IGA discovered the problem last week. Initially, they thought it was a technical glitch.

“Our machines weren’t taking any EBT cards and we didn’t really know what was going on. We didn’t know if it was a technical issue. And then we found out it was due to the government shutting down,” Tristen Malone said. (source)

And although it’s for a slightly different reason, The Red Lion store in York County, Pennsylvania has also had issues. New owners recently purchased the grocery store and sent in their application to accept government benefits before the shutdown occurred.

“Right now we’re officially frozen because the government is shut down and we can’t process our application.”

Tom Lohr is the new owner of D & K.

He says they tried to get pre-approved for the license before the sale went through.

“We tried to be proactive and start this in December, late November, early December , set up the new entities with the businesses it just has not worked out.”

Lohr purchased the business, but doesn’t own the company name, so the license belongs to the original owners.

“We were trying to make it a smooth transition where it would happen the first day we opened, they said if we didn’t hear anything by January 4th to give them a call back. They went dead basically just before Christmas, I think,” said Lohr.

Sixteen percent of their business comes from people who use food stamps.

D & K wants to be able to serve those in need, they’re just waiting for the government to re-open. (source)

And by the end of January, these two stores may only be a drop in the bucket.

More than 42 million Americans rely on food stamps.

A lot of people are very smug when it comes to those who rely on EBT benefits for food, picturing people driving Cadillacs to pick up their government-funded lobster and then go home and watch daytime soaps. But if you consider the state of the economy, it’s no surprise that there are millions who can’t make ends meet. Almost half of all Americans can barely afford both food and rent every month. Prices are just getting higher and wages are not increasing to meet the demands.

Really, the average EBT user isn’t always who you’d expect. Any considering 15 million children are living in homes below the poverty line, the kids will be the ones to suffer.

It’s pretty easy to be judgmental about those who accept food stamps if you have a good job and a full pantry, but remember that not everyone is in their situation by choice. Nobody is immune to hard times. I’ve been there myself.

Imagine the unpleasant surprise

Imagine going to the store to make a purchase, fully believing you have money in your account. But when the cashier tries to ring through your purchase, it’s denied. You ask her to swipe it again, because you know there’s money…but again, it’s declined. “No funds available,” you’re told.

The people who are going to buy groceries with EBT cards that are supposed to be working right now must be feeling desperate. And their frustration will cross into anger very quickly.

A cashier from Clay City, Indiana confirmed this.

“They’re really upset about it, which is understandable. I mean that’s like, you know, really discouraging that they can’t use it. And I mean we’ve had some people even get mad about it but it’s like out of our control, there’s nothing we can do about it,” Malone said. (source)

Now imagine what the situation would be like if suddenly, at the end of January, 42 million people across the country discover they won’t be able to feed their families.

It could be chaos very quickly. You know the saying, “We’re just nine meals away from anarchy.”

It’s all part of the Government Shutdown Theater.

Every single time the government shuts down, an example is made of ordinary Americans. With the Obama shutdown in 2013, all sorts of people suffered, from Native Americans to migrants to victims of domestic violence. In the current shutdown, it’s the poor people or those working government jobs paycheck to paycheck who will pay the price.

Why do they do this? Why do they make those who are suffering, suffer more?

Because the members of Congress and the government wants to impress upon us all how very essential they are to our well-being. They want to provide us with dramatic “evidence” that we can’t get by without them.

No one actually from the government is hurt by the shutdown.

Meanwhile, the “important” people aren’t noticing any hardship from the government shutdown. Speaker of the House Nancy Pelosi took a trip to Hawaii (but she promises it wasn’t a vacation.) And members of Congress get paid, but their staffers do not. (Kudos to this handful who have chosen to donate or forfeit their salaries during the shutdown.) It would be difficult for my opinion of these people to be much lower, but I’m sure they’ll manage to undercut my expectations even further.

The IRS will still take your money and track you down, but they won’t issue any refunds.

The system, as it stands, is anything but “by the people and for the people.”

The system is for the people who are benefitting from it. It’s for the people who are playing Americans like disposable chess pieces on a board. It’s for the people who literally benefit from the suffering of those less fortunate.

But it’s not for the rest of us.

Get prepared for some serious repercussions.

There are no signs of this shutdown ending any time soon. (Although that can change on a dime.) If it runs through the end of the month, be prepared to see some serious fallout when millions of people cannot purchase food for their families anymore. But don’t worry – your members of Congress will be just fine, regardless of how long this charade continues.

If you, personally, are relying on SNAP benefits for food, I strongly advise you to stock up now on low-cost items like beans, rice, oatmeal, peanut butter, pasta, flour, and canned fruits and vegetables. If you have money left on your card for the month, spend it now on things that won’t spoil.

If you are in a position to donate to food banks to help others, the need could soon be at an all-time high. A package of pasta and a can of sauce could at least provide a family with a warm dinner.

And no matter what your situation is, be prepared for the potential of unrest. Because hungry people with hungry children will do desperate things.

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Jim Yong Kim, the president of the World Bank, abruptly announced that he will be leaving his post on February 1, more than three years ahead of the end of his term as the development lender grapples with turbulence in emerging markets and U.S. doubts about the usefulness of multilateral institutions.

“It has been a great honor to serve as President of this remarkable institution, full of passionate individuals dedicated to the mission of ending extreme poverty in our lifetime,” Kim said in a statement on Monday.

“The work of the World Bank Group is more important now than ever as the aspirations of the poor rise all over the world, and problems like climate change, pandemics, famine and refugees continue to grow in both their scale and complexity,” he added.

Kim has been at the helm of the World Bank since 2012, and was re-elected for a second five-year term that began in 2017.

Kristalina Georgieva, the lender’s second in command, will take over as interim president on Feb. 1, the Washington-based bank said Monday in a statement. In an email to employees of the bank, Kim said he’ll join a private firm focused on infrastructure investments in developing countries.

“The opportunity to join the private sector was unexpected, but I’ve concluded that this is the path through which I will be able to make the largest impact on major global issues like climate change and the infrastructure deficit in emerging markets,” Kim said.

Kim began his second five-year term at the bank on July 1, 2017, after convincing the lender’s board of directors to reappoint him.

In the past year, the Trump administration has put pressure on the World Bank to justify its lending practices, including loans to China. But in April, the lender won support from its member countries for a $13 billion capital increase, after the U.S. dropped its objections, Bloomberg notes.

As a reminder, the U.S. is the largest shareholder in the development lender, which was conceived during the Second World War to finance the reconstruction of Europe but has since focused on alleviating extreme poverty around the world.

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Authored by MN Gordon via EconomicPrism.com,

High inflection points in life, like high inflection points in the stock market, are both humbling and instructive.  One moment you think you’ve got the world by the tail.  The next moment the rug’s yanked right out from under you.

Where the stock market’s concerned, several critical factors are revealed following a high inflection point.  These factors are not always obvious at first.  But they become apparent over time.  Most notably, it’s revealed that the period leading up to the high inflection point was more suspect than previously understood.

The stock market, as represented by the S&P 500, became a sort of money minting machine over the last decade.  Quarter after quarter, year after year, investors opened their brokerage statements to the delight of an inflating portfolio.  Investing was fun – and easy.

Without much interruption, investors got more out of the market than they put in.  They also got more out of the market than the underlying economy warranted.  The stock market delivered an illusion of prosperity that many investors mistook for the real thing.

Yes, the economy grew and corporate earnings increased.  However, thanks to debt based corporate buybacks propagated by the Fed’s cheap credit, rising share prices greatly outpaced earnings.  Stock valuations soared.  And stocks became more and more expensive.

The close of a near decade long bull market brings a new clarity and reflection upon the abundance of mistakes that built up over the agreeable upswing.  For example, the reassurance of ever increasing stock returns, over such a lengthy duration, taught a wide spectrum of investors a very dangerous lesson.  That one can get rich without using their brain.

Chaos and Catastrophe

Over the past decade, investing was reduced to a thoughtless endeavor.  Why bother breaking down a corporate balance sheet when you can buy the market via a passive index fund?  Why sift through an extensive list of companies searching for value laden diamonds in the rough, when the whole rough performs like a diamond?

Indeed, for nearly a decade buying the market by investing in an index fund, or exchange traded fund (ETF), was a simple and successful strategy for building investment wealth.  A person who invested $100 in the S&P 500 about 10 years ago would have well over $300 today.  Not a bad return for blindly deploying investment capital into the market.

The succeeding decade, however, will likely be far different for investors than the past decade.  For one thing, decade long bull market runs are not the norm; they’re an aberration.  Over the next decade we expect a passive indexing strategy will encounter a series of problems that many index fund enthusiasts are unaware of.

In fact, John Bogle, founder of Vanguard, and architect of the world’s first index fund, now has reservations about the innovation he created nearly 40 years ago.  In mid-2017, at the Berkshire Hathaway shareholder meeting he stated:

“If everybody indexed, the only word you could use is chaos, catastrophe.  The markets would fail.”

The chaos and catastrophe Bogle warns of is a function of two things: (1) The popularity of passive index fund investing; and, (2) The volume of passive investments the market can accommodate while still functioning as a market.

Certainly, index funds and ETFs have delivered many benefits for investors.  Most importantly, they’ve successfully curtailed the outrageous fees that mutual fund managers had charged investors for what was often little more than closet indexing.  But index funds, like a second helping of chocolate cake, have approached the point where too much of a good thing becomes a bad thing.

The Downside of Mindless Investing

An economy, in theory, should reward honest and productive activities and rebuke waste and incompetence.  In practice, and largely because of government intervention, unproductive activities, like federally subsidized corn ethanol production, are often rewarded.

There are also instances where an economy rewards idiots, like the Kardashians, for shameless attention seeking or other unproductive vulgarities.  But, by and large, a free functioning economy rewards productive enterprise and ingenuity.

Similarly, the stock market, in theory, should efficiently direct capital to its best and most productive use.  In this respect, investors should be judicious and discriminant about the companies they invest in.  Yet, in practice, this is hardly the case.  People are quick to invest in fads or in last year’s winners without much other thought or rationale.

What’s more, passive index fund investing has turned investing into a mindless and mechanical undertaking.  And as a greater and greater percent of the stock market is composed of passive index investments the stock market becomes more and more distorted.  Without judicious evaluation of businesses, which results in rewarding good companies and punishing bad companies, investing, in the form of passive index funds, is cheapened to corporate charity.

As of early December, index funds control 17.2 percent of U.S. listed companies – up from 3.5 percent in 2000.  On top of that, 81 percent of all indexed assets are under management of BlackRock, State Street, and Vanguard.  In other words, these three asset managers own roughly 14 percent of all U.S. listed assets.

Within the confines of an extended bull market, where liquidity is prevalent, index fund investors could sell their holdings at any time without any issues.  How these index funds function during a sustained panic, when liquidity’s scarce, has yet to be tested at the current size and composition of the market.  This, among other reasons, is why we expect the downside of this bear market to be much further than most anticipate – the S&P 500 may even fall below 1,000.

Following the shakeout, opportunities for value investors will be immense.  After years in darkness, active managers will have another day in the sun too.

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According to a new report by the Wall Street Journal, thousands of shale oil wells that have been drilled over the last five years are pumping less than what was forecast to investors. The new discovery has raised questions about the strength behind the United States’ newfound supply of shale oil.

The WSJ compares well productivity estimates that were disclosed to investors versus public data of how these wells have performed to date; after analyzing 16,000 wells operated by 29 producers in places like North Dakota and the Permian basin, the Journal  found that about 66% of projections made by companies between 2014 and 2017 are reportedly “overly optimistic”.

In total, these companies are set to pump about 10% less oil and gas than was forecast, an amount which equates to about 1 billion barrels of oil and gas over 30 years, which would be priced at about $30 billion at current market prices. In some regions, companies are reportedly off track by more than 50%. 

As previously discussed, the US shale boom has been one of the main reasons that the US has become an oil superpower over the last couple of years, while trimming the US reliance on foreign oil to virtually nothing.

But now shale drillers are under pressure to cut spending, as oil prices have cratered almost 50% in the last three months.

Two companies that operate in the Permian basin, Pioneer Natural Resources Co. and Parsley Energy are among the main culprits lagging behind forecasts (the analysis excluded several oil conglomerates like Exxon, because they didn’t make shale projections).

That said, Pioneer and Parsley disputed the report’s findings, saying that the lifespan of wells was different from forecasts, while other companies like Whiting Petroleum Corp. simply stated that the forecasts can be unreliable and that they were going to move away from providing them. Certainly an easy thing to say now that investments have been made.

Another driller, Oasis Petroleum Inc., tried to hide behind accounting-style excuses, stating about projections: “It’s not a science, it’s more of an art.”

Prior to the shale boom in 2007, oil companies were valued close to their reserves. Now these companies, on average, are valued almost three times higher. 

It is no secret that shale companies have taken a significant amount of capital from Wall Street over the last 10 years – mostly in the form of junk bonds – and investors have mostly lost money. Since 2008, an index of United States based oil and gas companies was down 43% while the stock market has doubled in the same time. The article examined 29 companies which collectively spent $112 billion more in cash than they have generated from operations over the last decade.

Meanwhile, the estimates given to investors were sometimes extrapolated from only the best performing wells. Other companies excluded their worst performing wells from the calculations.  Texas A&M University professor John Lee, an expert on calculating oil and gas reserves stated: “There are a number of practices that are almost inevitably going to lead to overestimates.” 

When Lee gave a presentation in Houston this past July, highlighting methods that could produce more accurate forecasts, one engineer jokingly stated that their companies weren’t using his methods “because [they] own [their company’s] stock”.

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The S&P ramped past overnight future highs and extended gains back to mid-December…

but Dow futures remain unable to break out…

10Y Bond yields and stocks are tracking tick for tick (but we note that 30Y yields are actually lower on the day)…

And the USD index continues to slide…

 

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Authored by Justin Hawkins, op-ed via Fox News,

Rep. Alexandria Ocasio-Cortez, D-N.Y, the self-described democratic socialist who has become a media sensation, is pushing for enactment of a radical plan called the Green New Deal that would ban the use of all fossil fuels from U.S. electricity generation, agriculture and manufacturing by 2030.

The Green New Deal would dramatically reshape the U.S. economy and add tens of trillions of dollars to the national debt.

The radical plan would force families to pay more to heat, cool and provide electricity to their homes. It would raise the same costs for businesses, farmers, government and organizations, driving up their operating costs – and raising the prices for just about all the good and services Americans buy.

Under the Green New Deal, Americans would have to power their homes with renewable energy, such as wind and solar power. Every home and business in the United States would have to be “upgraded” for “state-of-the-art energy efficiency, comfort and safety.” And a slew of massive government social programs and mandates would be created.

Yet despite all these negatives, the Green New Deal has garnered significant attention and support from some members of the media, Congress, and even prominent senators considering 2020 presidential runs: Cory Booker, D-N.J.; Bernie Sanders, I-Vt.; and Elizabeth Warren, D-Mass.

In addition to the energy provisions of the Green New Deal that have received the most attention from left-wing pundits and radical environmentalists, there is a lot of important information related to this proposal that proponents have deliberately kept out of the spotlight.

Here are five of the most important things you need to know about the Green New Deal.

1. It includes many radical programs that have nothing to do with so so-called “green” energy.

Supporters of the Green New Deal spend most of their time talking to the public about the proposal’s energy-related mandates, but some of the costliest parts of the plan are completely unrelated to the energy industry.

For example, Ocasio-Cortez’s proposal calls for the creation of “basic income programs” and single-payer health care.

The Green New Deal would also establish a federal jobs guarantee – one of the few non-energy-related parts of the plan Ocasio-Cortez has spent significant time advertising. And it would include provisions to “mitigate deeply entrenched racial, regional and gender-based inequalities in income and wealth.”

2. It would do nothing to curb global warming.

The primary justification given by Green New Deal proponents for the radical nature of the plan is that it is necessary to slow the rise of human-caused climate change, which Ocasio-Cortez and other liberals say will cause significant damage to the economy and human health over the next century.

Many scientists say there is no good evidence global warming will be catastrophic or that there’s anything humans can do to stop it. But even if we were to assume that global warming must be slowed down, the Green New Deal would do nothing to achieve this goal.

Even if the United States were to eliminate all of its carbon dioxide emissions by the start of 2030 – something that is likely impossible – the increased carbon dioxide emissions of the rest of world would more than offset the reductions in America.

Whether the Green New Deal is imposed or not, global carbon dioxide emissions are going to rise.

3. Renewable energy costs significantly more than fossil fuels.

The Green New Deal would eliminate fossil fuels from all electricity generation and transportation, forcing Americans to rely largely on expensive and unreliable renewable technologies like wind and solar power.

The Institute for Energy Research estimates that new solar power generation is nearly five times more expensive than using existing fossil fuel-powered electricity. Wind power is 3.5 times costlier.

These higher costs would drive up the price of all goods and services, not just electricity bills. And because all manufacturing would also be required to rely on “green” power, industries in the United States would struggle to match the prices of their foreign competitors, forcing some businesses to either close or move overseas.

4. The Green New Deal would empower and give handout to left-wing special interest groups and industries.

Some of the most vaguely worded parts of Ocasio-Cortez’s Green New Deal plan are those that promise to increase the power of labor unions and give favors to left-wing industries.

According to the proposal, the Green New Deal would “deeply involve national and local labor unions to take a leadership role in the process of job training and worker deployment,” and it promises the “funding (of) massive investment in the drawdown of greenhouse gases.” That’s a code phrase for giving billions of taxpayer dollars to renewable-energy companies.

5. It would run up the national debt by tens of trillions of dollars.

Although no one knows exactly how much the Green New Deal would cost, a very conservative estimate is $40 trillion in its first 10 to 15 years. The Mercatus Center estimates the single-payer health-care proposal supported by Ocasio-Cortez would, on its own, cost more than $32 trillion.

Ocasio-Cortez has suggested one way to pay for these gigantic government programs would be to increase the income tax rate for America’s wealthiest earners as high as 70 percent, but even that radical move would fail to fund the Green New Deal.

In Ocasio-Cortez’s draft resolution, she suggests funding her proposal using “the same ways that we paid for the 2008 bank bailout and extended quantitative easing programs, the same ways we paid for World War II and many other wars. The Federal Reserve can extend credit to power these projects and investments.”

In other words, Ocasio-Cortez says we should pay for these left-wing proposals by running up the national debt by trillions of dollars, putting the nation’s economy at risk of collapsing.

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