Did Bank of America just advocate that its shareholders own more “cash and gold” ?

In a note sent out this morning, Bank of America Merrill Lynch has a warning for investors:

Investors remain trapped in “The Twilight Zone”, the transition period between the end of QE and the first rate hike by the Fed, the start of policy normalization…until (a) the US economy is unambiguously robust enough to allow the Fed to hike and (b) the Fed’s exit from zero rates is seen not to cause either a market or macro shock (as it infamously did in 1936-7), the investment backdrop will likely continue to be cursed by mediocre returns, volatile trading rotation, correlation breakdowns and flash crashes. For this reason we continue to advocate higher than normal levels of cash, adding gold and owning volatility in mid 2015. Given extremities of liquidity, profits, technological disruption, regulation, income inequality…potential for a cleansing drop in asset prices cannot be dismissed. Most likely catalysts: Consumer, Rates, A-shares, Speculation, High Yield.


This is really odd, since JP Morgan now is refusing ‘cash’ as payments … ?

In an UNLAWFUL ACT with incredibly huge implications, one of America’s largest banks, JP Morgan/CHASE has adopted a new policy which FORBIDS PAYING CASH as payment of credit card, mortgage and other debts! Quite simply, this policy appears to violate the Uniform Commercial Code which holds that if a person attempts to use legal tender in payment of a debt, and the legal tender is refused, the debt is “discharged.” (See UCC § 3-603 (b))

Even more unusual, the same bank sent an Amendment to Lease Terms letter to all their customers with Safety Deposit Boxes, instructing them that it is no longer permissible for customers to store CASH OR COINS in safety deposit boxes unless they are “Collectibles.”

The fact that one of the largest banks in America is now refusing to accept American DOLLARS as payment of debts is extraordinary! It signals that the banks see our currency as becoming worthless!


And now …

HSBC to charge for holding deposits


Bond-Market Crash Has Wall Street Divided on What’s Next

(Bloomberg) — Maybe, just maybe, this whole bond rout is ending.

The global selloff that’s set investors on edge finally slowed last week, and some analysts are saying the worst is over. Treasuries look fairly valued given the outlook for inflation and interest rates, according to Bank of America Corp. — although with plenty of caveats. In Germany, options traders convinced a bund-market crash was all but inevitable less than two weeks ago have scaled back most of those bets.

Goldman Sachs Group Inc. warns that government debt is still expensive, but a growing number of investors are finding value after the four-week exodus sent yields soaring. Prudential Financial Inc.’s Robert Tipp is buying because tepid U.S. growth will keep the Federal Reserve on hold, while Europe remains too weak to sustain higher yields.

And don’t forget about central banks in Europe and Japan, which are buying billions of dollars in bonds each month.