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Newsletters from Lindsey Williams
Latest News Articles – July 21, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From July 15, 2016 to July 21, 2016:
- David Stockman On The Coming Global Collapse As One Short Seller Warns “I Have No Idea How Long They Can Keep Pretending”
With continued uncertainty in global markets, David Stockman weighed in on the coming global collapse and one short seller warned, “I have no idea how long they can keep pretending.” – Overnight equity markets were slightly lower, with bonds markets slightly higher in uneventful trading. As for our equity market, Netflix provided some fireworks, as it lost badly at the game of beat-the-number and the stock price was hammered for 14%. IBM, however, managed to win at Wall Street’s favorite game by making enough acquisitions to make the estimates. For those keeping score at home, revenues were down about 3%, making this the seventeenth quarter in a row for that feat. Debt now stands at $42 billion and book value is minus $27… - Governments To Christians: Don’t You Dare Speak Out Against The Sexual Sin In Society
In our upside down world, evil has become good and good has become evil. Once upon a time, everyone in society generally knew what was “right” and what was “wrong” even if they didn’t always abide by the rules. But now the rules have been totally flipped on their head. If you choose to live a lifestyle that is morally wrong, you are celebrated by society, and if you choose to speak out against the sexual sin that is exploding everywhere around us then you are considered to be a “hater” and a “bigot”. In fact, governments all over the world are now passing “hate speech” laws that are making it a crime to speak out against sexual sin. With each passing year it gets even worse, and those pushing this agenda forward are never going to be satisfied until those standing up for Biblical truth are locked away in prison. - Jim Rickards: Dynamics in Place for $10,000 Gold
Jim Rickards has been predicting $10,000 gold. Recently, he appeared on CNBC’s Squawk Box and stuck to that prediction, saying the dynamics are in place for gold to reach that $10,000 mark. Rickards said he thinks we are at the beginning of an extended gold bull market, possibly similar to the late 1990s when the price of the yellow metal went up 615% over a 12-year period. He conceded gold can be volatile, so he doesn’t pay as much attention to short-term fluctuations in price. But he did note an interesting fact in the wake of the recent price jumps after some major world events. - To The Mattress: Fund Manager Cash Levels Highest In 15 Years
Despite the post-Brexit market rally, fund managers have gotten even more wary of taking risks. The S&P 500 has jumped about 8.5 percent since the lows hit in the days after Britain’s move to leave the European Union, but that hasn’t assuaged professional investors. Cash levels are now at 5.8 percent of portfolios, up a notch from June and at the highest levels since November 2001, according to the latest Bank of America Merrill Lynch Fund Manager Survey. In addition to putting money under the mattress, investors also are looking for protection, with equity hedging at its highest level in the survey’s history. - The financial system is breaking down at an unimaginable pace
Now it’s $13 trillion. That’s the total amount of government bonds in the world that have negative yields, according to calculations published last week by Bank of America Merrill Lynch. Given that there were almost zero negative-yielding bonds just two years ago, the rise to $13 trillion is incredible. In February 2015, the total amount of negative-yielding debt in the world was ‘only’ $3.6 trillion. A year later in February 2016 it had nearly doubled to $7 trillion. Now, just five months later, it has nearly doubled again to $13 trillion, up from $11.7 trillion just over two weeks ago. - Bubble Finance At Work——65%-70% Of Households Have Lower Real Incomes Than In 2005
A new study from McKinsey looks at the cross-generational distribution of income as a form of new ‘inequality’, in words of the authors: “an aspect of inequality that has received relatively little attention, perhaps because prior to the 2008 financial crisis less than 2 percent of households in advanced economies were worse off than similar households in previous years. That has now changed: two-thirds of households in the United States and Western Europe were in segments of the income distribution whose real market incomes in 2014 were flat or had fallen compared with 2005.”In other words, McKinsey folks are looking at the “proportion of households in advanced economies with flat or falling incomes” – the generational cohorts that are no better than their predecessors. - Erdogan’s Staged Coup Has Resulted In A Purge Of 50,000 Teachers, Judges, Soldiers And Government Officials
Barack Obama’s “friend” in Turkey is a deeply corrupt radical Islamist dictator that has just staged a coup to consolidate his grip on power. As I have reported previously, 1,845 “journalists, writers and critics” have been arrested for “insulting” President Erdogan over just the past two years, and a couple of years ago he had a monstrous 1,100 room presidential palace built for himself that is 30 times larger than the White House. With each passing day, more evidence emerges which seems to indicate that the recent “coup” was a staged event meant to enable Erdogan and his allies to eliminate their enemies and solidify their stranglehold over the nation. At this point the number of victims of “Erdogan’s purge” has hit 50,000, but the final number will not be known for quite some time. - The man who accurately predicted 4 market crashes told us the dates when oil prices will fall again
The man who accurately predicted four market crashes to the exact date recently told Business Insider about his calendar prediction for when oil prices would start to significantly slump again. Sandy Jadeja is a technical analyst and chief market strategist at Core Spreads. Technical analysts look at charts to pinpoint patterns in various markets and asset classes. From that they forecast which direction prices are likely to move. They can't tell you why there will be a big market movement, only that there will be one. He says there is a specific time period to watch out for. - Financial System Held Together with Bailing Wire & Chewing Gum-Craig Hemke
Financial and precious metals expert Craig Hemke contends profits in the stock market, in the past few years, came with extreme hidden risk. Hemke explains, “I know why I own precious metal and am continuing to buy it, and that is what I am telling people to do. I mean the price has fallen for totally uneconomic reasons, manipulation being one . . . but anyway, I have used that weakness the last three or four years to keep buying. So, now with this recovery, all of my metal on a cost basis is less than what the current price is. That’s worked out quite well. I am not going to argue with anybody that says you should have sold all your gold in 2011, with the benefit of hindsight, and you should have bought the S&P. You would have made 100%, and hey, knock yourself out. The reason I didn’t attempt to do that is knowing full well anytime between 2011 and today I could have woken up and the whole system could have blown up. That’s how fragile it is. It’s all held together with bailing wire and chewing gum.” - The Entire Market is Being Driven by a “Once in History” Asset Bubble About to Burst
Since QE 3 ended in October 2014, stocks have traded in a large range between roughly 2,130 and 1800 on the S&P 500. During this time, whenever stocks began to breakdown in a serious way, a clear intervention was staged in which someone manipulated the markets higher. Regardless of whether you are a bull or a bear, none of those rallies felt normal or sane in any way. No one panic buys every single day at the exact same time for days on end. Which brings us to today. Stocks have broken out of the trading range to the upside hitting new all-time highs. - We’re witnessing a complete breakdown in western values
Two months ago I was with the former President of Colombia, Alvaro Uribe, at his home outside of Medellin. He was telling me some hilarious stories about his interactions in the early 2000s with Hugo Chavez, who had recently seized power in Venezuela. Chavez was a fanatic socialist. He believed so strongly in the idea of redistributing wealth from rich to poor. Yet even when it was clear his policies weren’t working and Venezuela was rapidly sliding into economic chaos, Chavez’s only solution was to double down and redistribute even MORE wealth. It was the classic definition of insanity. Chavez failed to understand what Uribe told me so succinctly: “If there’s no wealth creation, there’s nothing left to redistribute.” - Axe-Wielding Terrorist Attacks Train Passengers In Germany And A Police Car Is Firebombed In Florida
Crazy people committing random acts of senseless violence is rapidly becoming the “new normal” in the western world. On Monday, a police vehicle was firebombed in Daytona, Florida by someone that was enraged by the recent shooting deaths of Alton Sterling and Philando Castile. And over in Europe, an axe-wielding Islamic terrorist shouted “Allahu Akbar” as he started wildly attacking passengers on a train in southern Germany. Authorities say that the young man was originally from Afghanistan, and according to the Mirror he was shot dead before he could flee the scene of the attack… - Baton Rouge, Nice, Dallas, Orlando – A Dark And Distressing Time Has Descended Upon The Civilized World
Does it not seem as though events are starting to accelerate significantly? Since I warned that something “had shifted” and that things had “suddenly become more serious“, we have seen the worst mass shooting in U.S. history in Orlando, we have seen the massacre of five police officers in Dallas, we have seen the horrifying terror rampage in Nice, and now we have seen the brutal murder of three police officers in Baton Rouge. On Sunday morning, the peace and quiet in Baton Rouge were shattered when “dozens of shots” erupted less than one mile from police headquarters. By the end of it, 29-year-old Gavin Eugene Long had killed three officers and seriously wounded three others. It was a crime fueled by pure hatred, and Long specifically waited for his 29th birthday to launch the attack… - End of an Era: The Rise and Fall of the Petrodollar System
The intricate relationship between energy markets and our global financial system, can be traced back to the emergence of the petrodollar system in the 1970s, which was mainly driven by the rise of the United States as an economic and political superpower. For almost twenty years, the U.S. was the world’s only exporter of petroleum. Its relative energy independence helped support its economy and its currency. Until around 1970, the U.S. enjoyed a positive trade balance. Oil expert and author of the book “The Trace of Oil”, Bertram Brökelmann, explains a dramatic change took place in the U.S. economy, as it experienced several transitions: First, it transitioned from being an oil exporter to an oil importer, then a goods importer and finally a money importer. This disastrous downward spiral began gradually, but it ultimately affected the global economy. A petrodollar is defined as a US dollar that is received by an oil producing country in exchange for selling oil. As is shown in the chart below, the gap between US oil consumption and production began to expand in the late 1960s, making the U.S. dependent on oil imports. - The Helicopter Has Already Been Tested – And It Failed Spectacularly
Most of what passes for modern monetary policy is nothing more than one assumption piled upon another (and then another, and so on). Taken for granted for so long, rarely are these unproven precepts ever challenged to justify themselves to the minimal standard of internal consistency, let alone prove discrete validity by parts. The latest is “helicopter money”, another sham in a long line of them proffered by at least one central bank today because it knows, as the others, nothing they have done has worked. The fact that the world is even discussing the helicopter option should instill great skepticism as a first impulse, not more rabid faith. The way this latest scheme is being described is exactly the same as quantitative easing was really not that long ago. Clearly the expectation for it is rising, as Bloomberg reported today that, “Nearly one-third of clients and colleagues surveyed by Citigroup Inc. think that so-called helicopter money could be on its way within a fortnight.” Forty-three percent in the same survey believed that the “market” was expecting it. - The entire financial system is exposed to this junk bond market
Japan got there first. 15 years ago, we met a Japanese equity manager who made an astonishing prediction: “Japan was the dress rehearsal. The rest of the world will be the main event.” That seemed an extraordinary suggestion 15 years ago. Today, not so much. In the aftermath of the late 1980s real estate and stock market bubble, and its subsequent banking crisis, Japan became a giant laboratory experiment for novel insane monetary policies. In 2001 the Bank of Japan tried Quantitative Easing. It was a policy that Richard Koo of the Nomura Research Institute described as the “greatest monetary non-event”. It turned out, not for the first time, that academic economists had it all wrong. - “The World's Central Banks Are Making A Big Mistake”
While everyone was talking about Brexit last month, the Bank for International Settlements released its 86th annual report. Based in Basel, Switzerland, the BIS functions as a master hub for all the world’s central banks. It settles transactions among central banks and other international organizations. It doesn’t serve private individuals, businesses, or national governments. Because it is relatively free from political considerations, the BIS can speak about economic issues more directly than its member central banks can. And its candor has grown steadily in recent years. When central bankers like Janet Yellen or Mario Draghi speak, we have to discount their statements because they have policy agendas to promote. While the BIS has an agenda, too, the bank isn’t tied to any particular economy or government. Its analysts are paying attention to how the world functions in toto. - Unexpected Gasoline Inventory Build, Production Rise Spark Crude Chaos
Following last week's surprise Distillates build (and bounce in production) and API's overnight surprise Gasoline build, DOE data this morning was mixed confirming the 2.3mm draw in overall crude inventories (9th weekin a row) but surpringly large builds in both Cushing and Gasoline inventories (expectations were for draws). Oil prices were chaotic – running stops high and low – as algos noted crude production also rose (for the 2nd week in a row). - Another Bad Month For Truck Shipping
Truck shipments were up in June from May. So were expenditures. That sounds pretty good, but it really isn’t. Shipments are normally up in June and the Cass Freight Index report from which I get numbers is not seasonally adjusted. The best way to compare June is to prior years, and that picture isn’t pretty. - Brexit: UK economy yet to suffer slowdown following EU vote, says Bank of England
The Bank of England is yet to see any clear evidence of an economic downturn due to Britain's decision to vote in favour of leaving the European Union, although hiring and investments were being put on hold. Business uncertainty has “risen markedly” in the four weeks following the EU referendum, but there was no evidence that consumers had reined in their spending, the BoE's regional agents said on Wednesday (20 July). “A majority of firms spoken with did not expect a near-term impact from the result on their investment or staff-hiring plans,” Britain's central bank said in a statement. - Why Growing Food is The Single Most Impactful Thing You Can Do in a Rigged Political System
The most effective change-makers in our society aren’t waiting around for a new president to make their lives better, they’re planting seeds, quite literally, and through the revolutionary act of gardening, they’re rebuilding their communities while growing their own independence. Every four years when the big election comes around, millions of people put their passion for creating a better world into an increasingly corrupt and absurd political contest. What if that energy was instead invested in something worthwhile, something that directly and immediately improved life, community, and the world at large? The simple act of growing our own food directly challenges the control matrix in many authentic ways, which is why some of the most forward-thinking and strongest-willed people are picking up shovels and defiantly starting gardens. It has become much more of a meaningful political statement than supporting political parties and candidates. - Japan, Helicopter Money, Cold Fusion And The Disastrous Endgame
With continued wild trading this summer in global markets, it’s all about Japan, helicopter money, cold fusion and the disastrous endgame. Overnight markets were all higher and the world was once again a-twitter over the concept of “helicopter money.” But once again, the pundits and the press are getting the descriptions wrong. Just like they talk about minimal inflation rates as “deflation” because they are scared of a depression, which is what they think deflation means, or refer to a 20% move as a bull or bear market, they are now mindlessly labeling the next step in monetary debasement as helicopter money… - Renewable Energy Investment Drops By Nearly A Quarter
As the cost of installing solar panels waned and China pressed pause on its spending, global investment in renewable energy sunk 23 percent in the first half of 2016. According to London-based Bloomberg New Energy Finance, solar, wind, and other clean-energy industries engrossed $116.4 billion in the first two-quarters of the year 2016. This included $61.5 in the second quarter. The research company said it also reviewed up 2015’s total by practically $20 billion to a record of $348.5 billion. - How & by How Much Big Pharma Fools Investors
Yesterday, we were bashing big pharmaceutical companies for jacking up prices of patent-protected drugs at obscene rates. Those double-digit price increases were largely responsible for the sales increases these companies reported. Drugs have become the largest wholesale category, at $54.3 billion in May, or 12.2% of total wholesales. This boom is based on price increases at a great cost to US consumers and taxpayers. It’s cannibalizing the rest of the economy. But it’s made possible by the abuse of the patent system, the increasingly monopolistic structures in the industry after a tsunami of mergers funded by cheap credit and a soaring stock market – as planned by the Fed – along with legislators and regulators that have been compromised by the big money and the revolving door. - Spain’s Banks are Suddenly “Too Broke To Fine”
After eight years of chronic crisis mismanagement, moral hazard and perverse incentives have infected just about every part of the financial system. Earlier this week, the U.S. Congress published the findings of a three-year investigation into why the Department of Justice chose not to punish HSBC and its executives for their violations of US anti-money laundering laws and related offenses – because doing so would have had “serious adverse consequences” for the financial system – the “Too Big To Jail” phenomenon, a perfect, all-purpose, real-world Get-Out-of-Jail-Free card. But now there’s “Too Broke to Fine.” Today over a dozen Spanish banks were given a life-line by the EU’s advocate general, Paolo Mengozzi, that could be worth billions of euros in savings for the banks. For millions of Spanish mortgage holders, it could mean billions of euros in lost compensation. - Is Pokemon Go Evil, Dangerous Or Demonic?
One week ago, a game called Pokemon Go was launched, and over the last seven days it has become an international phenomenon. It is the first mass market video game to successfully blend the real world and the digital world together in a way that the public truly embraces, and it is making headlines all over the planet. At this point it has almost as many daily active users as Twitter does, and Nintendo’s stock price is going crazy as a result. On Monday it shot up 25 percent, and on Tuesday it surged another 13 percent. In other words, Nintendo is now worth billions of dollars more than it used to be. But is there a dark side to Pokemon Go? Is it potentially evil, dangerous or demonic? - 2067: The end of the oil age
The fear of losing a market share makes the oil countries play the oil price wars, glut the market while the low prices reducing investments in the new oil reserves exploration for the second year. The world proved oil reserves increased by only 2.5 times up to 1.7 trillion barrels during active crude oil production for the past 35 years. It seems that the major crude oil producing countries, which are so keen on a price war, forgot that in reality the oil runs out very quickly. For better understanding: 1.7 trillion barrels of oil with a production of 90 million barrels per day are approximately as the Indian Ocean from which two Gulfs of Mexico are scooped out every year. According to the simplest calculations, it seems the current world’s oil proved reserves at a current production level will suffice for 50 years. By that time it will be possible to find industrial raw commodity to replace the oil in the cycle of production of goods, find and widely implement a cost-effective energy analogue. But in reality it is not so smooth. - The Energy “Death List”: Who’s On It and Who’s Next?
In June, Warren Resources filed for Chapter 11 bankruptcy. The Houston-based company was just another one added to the group of 150 North American industry filings over the last year and a half since the oil decline started. Warren Resources could also be found in the 2015 publication of an “oil company death list” put out by Oxford Club investors’ network out of Baltimore. 19 companies were accused of “toxic” debt-to-equity ratios on the list. Since it was published, eight of the companies on the list have filed for protection, another was purchased at a low price, and few still are trying to keep their head above water. - EU Looks To Break Baltic Dependence on Russian Energy
After EU-member states agreed on a Commission proposal, the EU will invest €263 million in key gas and electricity projects across the Union with primary focus on the Baltic Sea region. The European Commission announced on Friday (15 July) in a press release that the 28 member states agreed to invest €263 million in trans-European energy infrastructure projects. The biggest share of the support will be destined to the Baltic Sea region to help the expansion of the gas infrastructure, meanwhile the other part of the investment will support the electricity sector across the European Union. - The Global Oil Glut Gets Uglier – Forget the Recovery and “Rebalancing” Hype
Deal makers in the oil patch of the US and Canada are smelling the fees, and they’re firing up the machinery. In the first half of the year, there were 52 pending and completed acquisitions of oil & gas exploration & production companies valued at $100 million or more, for a total of $30 billion, Fitch Ratings reported today: “The rise in transaction volume seems to be largely due to the improvement in hydrocarbon prices, including the tightening of bid/ask spreads, and access to capital markets.” The global oil market is “rebalancing” with production falling and demand rising, the meme goes. In anticipation, prices have bounced off the lows in February, with WTI soaring from $26.19 a barrel to $51.23 by June 8. So this would be the great oil price recovery. - Great American Oil Bust Rages on; Defaults, Bankruptcies Soar – How much worse is 2016 than 2015?
Junk bonds, trading like stocks since February, have skyrocketed and yields have plunged. But that doesn’t mean the bloodletting is over. The trailing 12-month US high-yield bond default rate jumped to 4.9% at the end of June, the highest since May 2010 as the Financial Crisis was winding down, Fitch Ratings reported today. The first-half total of $50.2 billion of defaults already exceeds the $48.3 billion for the entire year 2015. Energy companies accounted for 56% of those defaults. The energy sector default rate shot up to 15%. Within it, the default rate of the Exploration & Production (E&P) sub-sector soared to 29%! And the default party isn’t over: “Despite the run-up in prices since the February trough, there will be additional sector defaults, with Halcon Resources expected to file imminently,” Fitch reported. - Stocks Will Crash – and Crush (California’s) Pension Funds & Taxpayers: Report
The California Policy Center published an interesting study – “interesting” in all kinds of ways, including its outline of the doom-and-gloom future of California’s state and local pension plans if stocks turn down sharply, preceded by its prediction that stocks will turn down sharply because valuations are totally unsustainable. The huge, simultaneous, Fed-engineered rallies in stocks, bonds, and real estate – typically the three biggest holdings of state and local pension funds in the US – have inflated the balance sheets of these funds, thus elegantly, if only partially, papering over their fundamental problems. Most of these funds have a similar doom-and-gloom future when the asset bubbles get pulled out from under them. Plenty of pension funds don’t even need a market correction: they’re already in serious trouble despite the asset bubbles. - China Is About To Shock The World And The Global Financial System
On the heels of the Dow hitting new all-time highs and the U.S. dollar surging, China is about to shock the world and the global financial system. Stephen Leeb: “Global turmoil keeps ratcheting up. Just when you think it couldn’t get any worse, it does. The attempted military coup in Turkey is the latest eruption, following on the heels of yet another massacre in France. Syria remains an ongoing nightmare while terrorist bombings in Iraq are so commonplace they barely register… - End Time Persecution Is Here: Russia Just Banned Evangelism And China Has Torn Down 1000s Of Crosses
We always knew that this was coming. For years, the horrifying persecution of Christians in the Middle East has made headlines all over the globe, but now we are seeing very disturbing examples of government-sanctioned persecution literally all over the planet. As you will read about below, Russia just banned virtually all types of evangelism outside of a church or religious site. And China has been tearing down thousands of crosses and has been demolishing dozens of churches in a renewed crackdown on the growth of Christianity in that nation. Overall, there are 53 countries that now have laws that restrict the Christian faith according to one recent report. When are we going to wake up and realize what is happening? - America Wastes About HALF The Food That It Produces While Hunger Runs Rampant Around The Globe
Is the United States the most wasteful nation on the entire planet? We are all certainly guilty of wasting food. Whether it is that little bit that you don’t want to eat at the end of a meal, or that produce that you forgot about in the back of the refrigerator that went moldy, the truth is that we could all do better at making sure that good food does not get wasted. It can be tempting to think that wasting food is not a big deal because we have so much of it, but an increasing number of people around the world are really hurting these days. In fact, it has been estimated that there are more than a billion hungry people around the globe right now. So as a society we need to figure out how to waste a whole lot less food and how to get it into the mouths of those that really need it. - US & Clinton Beyond the Law-Catherine Austin Fitts
Financial expert and former Assistant Secretary of Housing, Catherine Austin Fitts, says the U.S. government’s actions with Hillary Clinton means it is more lawless than ever. Fitts explains, “The entire country now looks like Arkansas . . . we’ve all turned into Mena, Arkansas, now. It’s pretty tragic. I have watched for two decades while 80% of the federal budget and federal credit has been run outside the Constitution and the laws related to financial management. I have never seen anything as blatant and outrageous as Loretta Lynch, prior to Hillary Clinton’s interview with the FBI, meeting with her disbarred husband, who is either the husband of or the target of a criminal investigation, and basically briefing him, I am assuming and what I believe on what Hillary needs to know, so she can skate the (FBI) interview. What the President, Lynch and Comey don’t want is the investigative team recommending to indict. . . . If you know anything about civil or criminal procedures, this is so beyond the law. This is so over the top that I have never seen anything more outrageous. It’s beginning to look like Mena, Arkansas, during the Mena drug running.” - Those That Wanted To Get Prepared Have Already Gotten Prepared By Now
Is the time for warning people to prepare for what is ahead coming to an end? For years, bold men and women all over America have been sounding the alarm and warning people to get prepared physically, financially, mentally, emotionally and spiritually for the great storm that is rapidly approaching. Personally, I have written more than 2,500 articles on my primary two websites combined, and so nobody can accuse me of not blowing the trumpet. It has gotten to the point that sometimes I am even tired of listening to myself warn the people. But now we are shifting into a new phase. - The Dow And The S&P 500 Soar To Brand New All-Time Record Highs – How Is This Possible?
The Dow and the S&P 500 both closed at all-time record highs on Tuesday, and that is very good news. You might think that is an odd statement coming from the publisher of The Economic Collapse Blog, but the truth is that I am not at all eager to see the financial system crash and burn. We all saw what took place when it happened in 2008 – millions of people lost their jobs, millions of people lost their homes, and economic suffering was off the charts. So no, I don’t want to see that happen again any time soon. All of our lives will be a lot more comfortable if the financial markets are stable and stocks continue to go up. If the Dow and the S&P 500 can keep on soaring, that will suit me just fine. Unfortunately, I don’t think that is going to be what happens. - More Islamic Terror in France, Black Lives Matter is False Narrative, Phony Stock Market Highs
France has been hit once again by Islamic terror–this time in Nice. The French Riviera town was struck during Bastille Day celebrations by a terrorist who used a truck to mow down dozens of people. French media says ISIS is claiming responsibility for the heinous crime. The USA Today keeps propelling false narratives with the “Black Lives Matter” (BLM) movement and helping out the Democratic presumptive nominee Hillary Clinton with what can only be described as biased one-sided reporting. “Black Lives Matter” has been described as “racist” by former NYC Mayor Rudolph Giuliani. This week, the USA Today staff put a picture on the front page with a BLM protester that read “Killer cops make cop Killers.” BLM basically claims white police officers are hunting down black men and murdering them on purpose. This is a total lie, and is refuted by a brand new study from Harvard. USA Today would not comment on the editorial decision of the newspaper to put forth a totally false narrative. - War Is Coming And The Global Financial Situation Is A Lot Worse Than You May Think
On the surface, things seem pretty quiet in mid-July 2016. The biggest news stories are about the speculation surrounding Donald Trump’s choice of running mate, the stock market in the U.S. keeps setting new all-time record highs, and the media seems completely obsessed with Taylor Swift’s love life. But underneath the surface, it is a very different story. As you will see below, the conditions for a “perfect storm” are coming together very rapidly, and the rest of 2016 promises to be much more chaotic than what we have seen so far. - Defence giant says UK could be more attractive to invest post-Brexit vote
One of the world’s largest defence contractors has said that the UK could become a more attractive place to invest, after Brits voted to leave the European Union. Marillyn Hewson, the chief executive of Lockheed Martin, told the Sunday Times that the weaker pound could make exporting from Britain more lucrative. Lockheed builds gun turrets for the UK’s Ajax and Warrior tanks at its factory in Bedfordshire, which it hopes to export to other countries. It’s also the main contractor for Britain’s plans to buy 138 F-35 fighter jets for the Royal Air Force and the Royal Navy. Hewson added that the UK’s attractiveness as a place to invest post-Brexit vote would depend “”on the government and the policies its puts in place”. - Why Italy's banking crisis will shake the eurozone to its core
They call them le sofferenze – the suffering. The imagery is striking, the thousands of sofferenze across Italy, unwanted and ignored, a problem unsolved. But despite the emotional name, these are not people. They are loans. Bad debts, draining banks of profits and undermining economic growth. The name is less clinical than the English term “non-performing loans”, a reflection of the Italian authorities’ emotional rather than business-like approach to the problem. None the less, the loans are indeed causing real suffering. The €360bn (£300bn) of sofferenze from Italian banks show borrowers are weighed down with debts they cannot afford, while the banks are struggling to offer new credit to the households and firms that need them. - UK Opens ‘Very Fruitful’ Trade Talks With Canada
Britain opened “very fruitful” trade talks with Canada on Friday, International Trade Secretary Liam Fox told the Sunday Times newspaper as he prepares to renegotiate Britain's commercial ties following its vote last month to leave the European Union. In limited extracts of his interview, Fox said he would soon travel to the United States to ensure that Britain was not at the back of the queue in trade talks as President Barack Obama had suggested before the June 23 vote. He said was “scoping” about a dozen free trade deals outside the EU to be ready for when Britain leaves, some with countries that had indicated they wanted a quick deal and others with some of the world's major economies. - Middle East: The Rest of the Story
Want to know what is really happening in the Middle East? Pastor Lindsey Williams created a 3-DVD set entitled “Middle East: The rest of the Story” and it includes topics: “Future Price of Crude Oil”, “Future Price of Gasoline and Diesel”, “Future Grocery Prices”, “Explosive Growth to US Crude Production”, “China and the US”, “The Future of Islam”, “Riots in the Middle East”. This 3-DVD set is very important if you want to know what is happening right now in the Middle East. - “This Is Going To Get Very Ugly” – Former Top CIA Officer Says “Obama Has Lost Control Of The Middle East”
With Thursday's tragic mass killing by a resclusive, truck-driving Tunisian maniac in Nice having been violently drowned out by the frentic late Friday news of a failed (and perhaps staged) coup in Turkey, the news cycle has once again shifted its attention away from a far greater threat to the global economy than whether Erdogan can concentrate even more power in his grasp. Namely, both lone-wolf and organized terrorism in Europe (and elsewhere). And according to at least one CIA field commander, Gary Bernsten, it is all Obama's fault. As the Hill reports, the decorated former CIA career officer who served in the Directorate of Operations between October 1982 and June 2005, said on Friday that Obama has lost control of the Middle East following attacks in France that left at least 84 dead. “This is going to get very, very ugly,” Gary Bernsten said on Fox & Friends Friday. - Turkish Central Bank Pledges “Unlimited Liquidity” On Bank Run Fears: Wall Street's Take
Late on Friday afternoon, just as the market was closing and news of the Turkish coup spread, Turkish ETFs tumbled and the Lira dropped the most in 8 years on investor concerns about the future of the country, and a spike in social media reports that local depositors were – understandably – pulling their money from banks, potentially sparking a bank run. The Turkish Lira losses added to its woes after having slid 20% last year; the currency has now lost more than 40% of its value since the end of 2012. And while the (allegedly staged) coup has been put down, questions remained about the stability of the Turkish financial system. Which is why early today, Turkey’s central bank held an extraordinary meeting with bank executives to discuss ways to minimize the market impact of the coup attempt. The bank convened members of the Banks Association of Turkey, and shortly after announced a series of steps which, comparable to the post-Brexit reaction, sought to stabilize risk assets. - Morgan Stanley: “To Make Up For A 10% Drop In The S&P, Treasury Yields Would Need To Go… Negative”
With both the S&P500 and Treasury prices hitting record highs as recently as one week ago, many have been confused (perhaps none more so than Goldman's clients as we reported yesterday), although the conventional fallback explanation that has again emerged, is a reversion back to the “Fed Model” according to which the lower yields go, the highest equity multiples should (and may) rise. As a bearish Goldman explained, “bullish investors argue that sustained low rates will support P/E multiples of 20x or more. The Fed Model relates the earnings yield (5.7%) to the Treasury yield (1.5%). The current 420 bp yield gap is near the 10-year average. Exhibit 2 shows the sensitivity of this model. Assuming a steady bond yield, reversion to the 35-year average gap of 250 bp implies a S&P 500 year-end level of 3075 while the 5-year average gap implies 1900.” For the record, Goldman is not a fan of a 3,000+ S&P target, and instead expects the market to drop in the coming months. - “The Credit Ponzi Is Dead” – Brexit Or Not, The Pound Will Crash
Status quo, as our generation know it, established in 1945 has plodded along ever since. It is true that it have had near death experiences several times, especially in August 1971 when the world almost lost faith in the global reserve currency and in 2008 when the fractional reserve Ponzi nearly consumed itself. While the recent Brexit vote seem to be just another near death experience we believe it says something more fundamental about the world. When the 1945 new world order came into existence, its architects built it on a shaky foundation based on statists Keynesian principles. It was clearly unsustainable from the get-go, but as long as living standards rose, no one seemed to notice or care. The global elite managed to resurrect a dying system in the 1970s by giving its people something for nothing. Debt accumulation collateralized by rising asset values became a substitute for productivity and wage increases. While people could no longer afford to pay for their health care, education, house or car through savings they kept on voting for the incumbents (no, there is no difference between center left and right) since friendly bankers were more than willing to make up the difference. - Why the Gold Price is Rising, and Why it will Continue to do so
Do you remember last year, when an opinion piece in the Wall Street Journal referred to gold as nothing more than a ‘pet rock’? At the time, gold was trading for around US$1,130 an ounce. A year later, gold is trading around US$1,350 an ounce (up around 20%), while the S&P 500 is up only a few percent, despite closing at another record high today, at 2137 points. The author of that article, Jason Zweig, returned last week in his regular Intelligent Investor column to defend his pet rock call. While he acknowledged some important reasons for gold’s enduring allure, he trotted out some pretty lame reasons for sticking with his 2015 call that gold is basically just a rock. - Gold Has Important Place in Investment Portfolio as Paper Currency Wanes
On Tuesday we got not especially coherent statements from three Federal Reserve bank Presidents. St. Louis Fed President James Bullard was dismissive of the impact of the UK referendum on the U.S. and yes, directly, the UK doesn’t matter that much. What will matter will be the impact on the U.S. of slowing growth in the Eurozone. According to the IMF, growth will slow down as a consequence of the Referendum to 1.6 percent this year and 1.4 percent in 2017. Both years were revised down from 1.7 percent. - New Stock Market Highs Correlate to $57 Trillion in Printed Global Currency Units
When people use the term “money,” it usually refers to a unit of currency used in the transacting of business and commerce. A woman works cleaning houses for a week and gets paid in a number of currency units and then goes to the supermarket and exchanges those units for food or diapers or medicine. What is left over at the end of the pay period is called “savings,” which are allowed to accumulate receiving a modest rate of interest. Around the globe this weekend, a vast number of banks are offering negative returns on savings, such that keeping one's accumulated units of currency in the bank is penalized. The objective of this monetary experiment is to combat the global problem of deflation. Despite $57 trillion of new currency units having been printed since the 2009 financial crisis, global growth has been tepid at best because the velocity of “money” has remained moribund and since all collateral underpinning this massive global debt must not be allowed to depreciate, the central banks have been allowed to engage in a massive, coordinated reflation designed to jumpstart “money” velocity. - Ignore Pullbacks As Top Analyst Says Gold To Hit New All-Time Highs, Plus A Shocking Chart
With continued wild trading in global markets, one of the top analysts in the world says ignore pullbacks as price of gold to smash through all-time highs. There is also a shocking chart included in this fantastic piece. “Markets say the ECB is done, their box is empty… But we are magic people. Each time we take something and give to the markets – a rabbit out of the hat.” — Vitas Vasiliasukas, member of the ECB’s Governing Council. Today King World News is featuring a piece by a man whose recently released masterpiece has been praised around the world, and also recognized as some of the most unique work in the gold market. Below is the latest exclusive KWN piece by Ronald-Peter Stoeferle of Incrementum AG out of Liechtenstein. - Gold Price of $1,400 is just the Start – Vaneck
Although gold prices are down from last week’s two-year high, one investment firm sees $1,400 an ounce as just the start as the market remains in a new bull uptrend. In a report released Tuesday, Joe Foster, gold strategist at VanEck, said that the firm is expecting gold prices to reach $1,400 an ounce in the second half of the year, adding “and we do not believe it will end there.” Tuesday, August gold futures have seen renewed selling pressure with prices last trading at $1,336.50 an ounce, down almost 1.5% on the day. What is the driving the next leg of the renewed secular bull market is the fact that investors are being more proactive, he said. He added that inflows into gold-backed exchange-traded products are at their highest level since 2009, when investors sought out safe-haven assets during the sub-prime credit crisis. - The IRS wants a Piece of Your Gold and Silver Profits: Here's what You Need to Tell Them… And What You Don't
With gold and silver gaining popularity as safe haven assets during economic crisis there is a strong possibility that we’ll see prices go to all-time highs in the future. With those price increases will come windfall profits for investors. And, as you already know, where there’s profit, there’s a government with its hands in your pocket trying to get a piece of the action. - Did Citi Just Confiscate $1 Billion In Venezuela Gold
Just over a year ago, cash-strapped Venezuela quietly conducted a little-noticed gold-for-cash swap with Citigroup as part of which Maduro converted part of his nation's gold reserves into at least $1 billion in cash through a swap with Citibank. As Reuters reported then, the deal would make more foreign currency available to President Nicolas Maduro's socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices. Needless to say, the socialist country's economic situation is orders of magnitude worse now. According to El Nacional, “the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup.” - Venezuela army deployed to control food production and distribution
Venezuela's military has taken control of five ports in an effort to guarantee supplies of food and medicine. In a decree, President Nicolas Maduro has ordered the army to monitor food processing plants, and co-ordinate the production and distribution of items. Venezuela is going through a deep economic crisis despite having the world's largest oil reserves. Basic products are increasingly hard to find and many say they struggle to feed their families. The Venezuelan Bishops Conference said the rise of the military is a “threat to tranquillity and peace”. Mr Maduro says the measure is to fight the “economic war” he claims is being waged against his government by political foes and businessmen, with US backing. But the opposition says the government has mismanaged the economy, and has called for a referendum to oust the president. - Energy Failures Push U.S. High-Yield Default Rate to 6-Year High
U.S. high-yield bonds in default reached the highest levels in at least six years as more energy companies buckled under pressure from stagnant oil prices. Speculative-grade U.S. defaults spiked to 5.1 percent of the total outstanding in the second quarter from 4.4 percent in the first, according to a July 12 report from Moody’s Investors Service. The global high-yield default rate could finish the year at 4.9 percent, with the U.S. as much as 6.4 percent, Moody’s said. - There’s a war on its way, and it will make Iraq look like child’s play
War is on many people’s minds at the moment. But whilst most of the public are focused on wars of the past after the release of the Chilcot report, our leaders are plotting one for the future. And, if their rhetoric is anything to go by, it’s going to be on a scale we have never seen before. So, where’s the media flurry? Or the political fire being shot across the Commons over the issue? It’s nowhere to be seen. And that glaring oversight, or purposeful omission, could be what lets us sleepwalk into World War III. - Theresa May’s husband is a senior executive at a $1.4tn investment fund that profits from tax avoiding companies
The relatively unknown investment fund where Theresa May’s husband Philip works as a senior executive is one of the world’s largest and most powerful financial institutions, controlling $1.4 trillion in assets. Its portfolio also includes $20 billion of shares in Amazon and Starbucks, both of which were cited by the Prime Minister-designate in her pledge to crack down on tax avoidance yesterday. Latest filings to US authorities show that Los Angeles based Capital Group owns huge stakes in a variety of companies, including investment bank JP Morgan Chase, defence giant Lockheed Martin, tobacco company Philip Morris International, the pharmaceutical sector’s Merck & Co, and also Ryanair. - Russian leader sacks EVERY commander in his Baltic fleet after ‘they refused to confront Western ships’
RUSSIAN President Vladimir Putin has taken a page out of Joseph Stalin’s book — and sacked every commander in his Baltic fleet. As many as 50 senior officers including a Vice Admiral have been purged by Vladimir Putin amid reports they refused to confront Western ships. Other Russian news sites also speculated that attempts to cover up a crash between a Russian sub and a Polish boat may have been behind the bloodletting. But given the endemic nature of corruption and incompetence across the Russian military, Western analysts are scratching their heads as to the real reason behind the purge. - Gestapo America — Paul Craig Roberts
FBI Director James Comey got Hillary off the hook but wants to put you on it. He is pushing hard for warrantless access to all of your Internet activity. Comey, who would have fit in perfectly with Hitler’s Gestapo, tells Congress that the United States is not safe unless the FBI knows when every American goes online, to whom they are sending emails and from whom they are receiving emails, and knows every website visited by every American. In other words, Comey wants to render null and void the Fourth Amendment of the US Constitution and completely destroy your privacy rights. The reason Washington wants to know everything about everyone is so that Washington can embarrass, blackmail, and frame on felony charges patriots who stand up in defense of the US Constitution and the rule of law, and dissidents who criticize Washington’s illegal wars, reckless foreign policies, and oppression of American citizens. - Millions Wiped Off Commercial Property Market
The scale of damage to Britain's commercial property market by Brexit has been laid bare by new figures showing prices have fallen and millions of pounds of deals have collapsed. According to industry insiders, one in three major property investment deals has fallen through in the wake of Britain's vote to leave the EU. Prices across Britain's commercial property market, which includes office blocks, shopping centres and workplaces, are estimated to have fallen by 10-15% in the days after the vote. And an estimated £500m worth of so-called “Brexit clauses” have been triggered, meaning ongoing deals to buy and sell buildings have been cancelled or renegotiated. - Some disturbing figures about the upcoming banking crisis
In early 1870, the Kingdom of Prussia and French Empire were about to go to war. It was one of countless conflicts between the dozens of European kingdoms and empires throughout the 18th and 19th centuries, and this one was over before it even started. Prussia’s military might was legendary. They had recently beaten the pants off of Austria and Denmark, and they’d go on to neutralize or capture over 80% of French soldiers within a matter of months, while losing just 2% of their own. Very few wars have been so one-sided. And yet despite its nearly unparalleled military successes and clear dominance in European politics, Prussia lacked something critical: financial power. - Russia passes ‘Big Brother' anti-terror laws
Russia’s parliament has passed harsh anti-terrorism measures that human rights campaigners including the NSA whistleblower Edward Snowden say will roll back personal freedoms and privacy. The lower house of parliament voted 325 to 1 on Friday to adopt the “Yarovaya law”, a package of amendments authored by the ruling United Russia party member Irina Yarovaya, who is known for previous legislative crackdowns on protesters and non-governmental organisations. Snowden, who has lived in Russia since receiving asylum in 2013, tweeted on Saturday that the “Big Brother law” was an “unworkable, unjustifiable violation of rights” that would “take money and liberty from every Russian without improving safety”. - Robots will replace a quarter of business services workers by 2035, says Deloitte
A quarter of jobs in Britain’s business services sector are at “high risk” of automation within the next two decades, according to a new report. Accountancy firm Deloitte warned that robots could replace a fifth of jobs in administrative roles such as telecoms and IT by 2035 as falling technology costs and rising wages make automation increasingly attractive. Deloitte said that around 3.3 million jobs could be classified as business services roles, and that of those, there was a “high chance” that 800,000 to one million jobs would no longer be performed by humans over the period. - 90% Of June Job Gains Went To Workers 55 And Older
While the algos have long forgotten about today's job report whose headline was good enough to unleash an epic buying spree which has pushed the S&P to the highest level since July 2015, a quick read between the lines reveals a continuation of some recent troubling trends, namely that all job gains in recent years have gone exclusively to the oldest segment of the population, those 55 and older. First, as the chart below shows, when breaking down the job additions by age group as per the Household Survey, of the 180K jobs added in this particular survey, 259,000 were in the 55 and over age group, while only 28,000 were added in the critical 25-54 age group. Young workers, those under 24, lost a collective 107,000 in June. In other words, 90% of all job gains in the month went to workers 55 and over. - NRA: Restaurant performance weakens in May
Restaurant sales softened in May, along with operator expectations, as the industry continued its choppy 2016, according to the latest Restaurant Performance Index from the National Restaurant Association. The monthly indication of the health of the industry fell 0.9 percent to 100.6 in May, from 101.6 in April. The NRA considers the industry to be in expansion mode if the index is above 100. “The RPI continued along a choppy trend line in May, with the index bouncing between moderate gains and losses in recent months,” Hudson Riehle, senior vice president of research for the NRA, said in a statement. - Bill Gates And Other Billionaires Backing A Nuclear Renaissance
Let’s for a second imagine a world without nuclear energy. That’s a tough one but let’s try. No nuclear bombs, of course, no Chernobyl and Fukushima, no worries about Iran and North Korea. A wonderful world, maybe? Probably not, because without nuclear energy we would have burned millions more tons of coal and billions more barrels of oil. This would have brought about climate change of such proportions that what we have today would have seemed negligible. Nuclear energy and uranium, which feeds it, are controversial enough even without any actual accident happening. Radioactivity is dangerous. Nobody is arguing against it. When an accident does take place, the public backlash is understandably huge. What many opponents of uranium forget to mention, however, are the benefits of nuclear energy and the fact that the statistical probability of serious accidents is pretty low. They focus on the “What if?” and neglect the other side of the coin. But let’s try to see both sides of the issue. - Malls Push Out Department Stores
At the Florida Mall in Orlando, Nordstrom was torn down and replaced with a Dick’s Sporting Goods store and a crayon-based family attraction called the Crayola Experience. The Saks Fifth Avenue was demolished, too, to make way for a dining pavilion with 23 restaurants. And Lord & Taylor was carved into space for American Girl, H&M, Forever 21 and Zara. Once the linchpin of American shopping malls, department stores are being displaced by newer types of retailers that do a better job of driving shoppers to the centers and lifting overall mall sales. Landlords are nudging out the once-coveted big box chains in favor of sporting-goods retailers, fast-fashion chains, supermarkets, gyms, restaurants, movies theaters and other types of entertainment as they seek to keep their properties relevant in an age increasingly dominated by online shopping. - Who’s Most Afraid of Contagion from Italy’s Bank Meltdown? French and German banks
Contagion is the reason Italy’s banking crisis is all of a sudden Europe’s biggest existential threat. Greece’s intractable problems are out of sight, out of mind; Brexit momentarily spooked investors and bankers; but Italy’s banking woes have the potential to wipe out investors and undo over 60 years of supranational state-building in Europe. The last few days have seen growing calls for taxpayer-funded state intervention, a practice that was supposed to have been consigned to the annals of history by Europe’s enactment of new bail-in rules on Jan 1, 2016. The idea behind the new legislation was simple: never again would taxpayers be left exclusively holding the tab for European banks’ insolvency issues while bondholders were getting bailed out. But even before the new rules have been tried out, they are about to be broken, or at least bent beyond all recognition. - Congress: “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable”
The US House of Representatives today released the results of its three-year investigation – hampered along the way by the Department of Justice and the Department of the Treasury – into why HSBC and its executives weren’t prosecuted. Empirical evidence has told us for years that in the US a bank and its executives cannot be prosecuted if the bank is big enough. We’ve come to call this type of bank “Too Big to Jail.” Empirical evidence has also told us that a bank can do essentially whatever it wants to, given that, if caught, it may have to pay a fine that then becomes just part of the cost of doing business. Wall Street doesn’t care about fines. They’re “extraordinary items” that banks and analysts systematically exclude from their “ex-items” per-share earnings. Fines matter under GAAP reporting. But they don’t matter in the rosy picture that Wall Street paints of the banks. And so they don’t matter. - Merchants Of War: U.S. Arms Export Reaches All-Time High At $47 Billion in FY 2015
International demand for U.S. weapons systems is expected to continue growing in coming years, a senior U.S. Air Force official said on Sunday, citing strong interest in unmanned systems, munitions and fighter jets. “The appetite just keeps getting bigger and bigger,” U.S. Air Force Deputy Undersecretary Heidi Grant told Reuters in an interview on the eve of the Farnborough International Airshow. U.S. arms sales approved by the Pentagon’s Defense Security Cooperation Agency rose 36 percent to $46.6 billion in the fiscal year ended Sept. 30, 2015, and are likely to remain strong this year, Grant said. Grant, the Air Force’s top international arms sales official, said she was working with many countries in eastern Europe and others that wanted to increase their defenses following Russia’s annexation of the Crimea region of Ukraine, but faced tough budget constraints.
In the year 1971 Lindsey Williams went to the state of Alaska to become an aviation missionary. Shortly after arriving in Alaska, Mr. Williams heard the oil companies were going to build the Trans-Alaska Oil pipeline and that 25,000 pipeliners were going to converge on the state to build it. Mr. Williams consequently volunteered his services as chaplain on the pipeline. Shortly after becoming chaplain, Alyeska Pipeline Service Company offered him executive status and invited him to sit in on their board meetings in an advisory capacity to help the relationship between management and labor. What he heard over the next three years time would change his life. He learned that OPEC had nothing to do with the price of oil but that the elite of the world controlled it. Mr. Williams knew he had to put into print what he saw and heard in order to inform the American people. His story is documented in The Energy Non Crisis.
Latest News Articles – July 14, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From July 8, 2016 to July 14, 2016:
- Global Economy Critical Condition Code Blue-Rob Kirby
Macroeconomic analyst Rob Kirby says don’t trust the stock market’s rise to new all-time highs. The global economy is in terminal trouble, and Kirby explains, “My view of the financial system as it sits today is we are in an intensive care unit, and we have a lot of tubes and wires connected to us right now. The question you are asking me is how long is a person in critical condition in an intensive care unit going to live? I don’t really know the answer to it other than we could get a code blue any day. We could get a code blue tomorrow . . . code blue is when somebody has passed.” - Gold has ‘unlimited upside' because the Fed is ‘confused' on policy: Trader
Gold just posted its longest weekly winning streak since July 2011, but if investors missed out on the recent rally, fear not. One trader says the commodity has “unlimited upside,” and investors have the Federal Reserve to thank for it. On CNBC's “Futures Now” this week, Tom Colvin said that gold will remain in a bull market that will only come to an end “when central banks take their hands out of the cookie jar.” The Federal Reserve is unlikely to hike rates in the foreseeable future, despite a blockbuster June employment report on Friday. - Peter Schiff Warns of the “Worst Economic Downturn Including the Great Depression”
The Federal Reserve’s monetary policies have manufactured a “super bubble” that “…may give us the worst economic downturn including the Great Depression,” economist Peter Schiff declared during an interview with Accuracy in Media. Schiff is the CEO of Euro Pacific Capital, and a guest commentator on CNBC. He explained that low interest rates prop up the government’s feckless fiscal policies and generate “…really systemic structural problems in the economy…” that “manifest themselves in bubbles that then burst. …the Fed’s policy does not work and has not solved our problems, it has simply exacerbated our problems, and…we’re gonna have a currency crisis, we’re gonna have a sovereign debt crisis and it’ll make the financial crisis of ’08 really look like the Sunday school picnic,” he said. - “The World Is Walking From Crisis To Crisis” – Why BofA Sees $1,500 Gold And $30 Silver
With both stocks and US Treasury prices at all time highs the market is sensing that something has to give, and that something may just be more QE, which likely explains the move higher in gold to coincide with both risk and risk-haven assets. As of moments ago, gold rose above $1,370, and was back to levels not seen since 2014. Curiously, the move higher is taking place after Friday's “stellar” jobs report, suggesting that someone does not believe the seasonally-adjusted numbers goalseeked by the BLS. And while we reported last week that one way investors are rushing into the anti-QE safety of gold is by buying paper gold derivatves such as ETFs, which rose above 2,000 tons for the first time since 2013, many others have bypassed paper claims on gold such as GLD entirely, and are rushing into physical. - 2016: The Big Shift
As we close 2015 and begin a new year, the markets generally closed flat to neutral with a warning that as we approach the political year from hell (2017) that this is by no means going to be a walk through the park. We are more likely than not going to see some trends conclude in 2016 and others perform a false move to scare the hell out of everyone. Nevertheless, the stars may not be aligning, but the markets appear to be setting the stage to align for the BIG SHIFT. What does the BIG SHIFT mean? It means that as we face a meltdown in socialism, which has taken hold of western governments and destroyed our underlying democratic foundations, ALL assets must prepare for the HEDGE against government. - The Federal Reserve's Grand Scheme Exposed (In 1 Simple Chart)
For 138 years, consumer prices in America slightly declined. After The Federal Reserve was created, things changed… The ascent of the non-1% peaked when the Deep State forced Nixon to depart from the gold standard's constraint on largesse. Which should also clarify just why to the “1%”, including their protectors in the “developed market” central banking system, their tenured economist lackeys, their purchased politicians and their captured media outlets, the topic of a return to a gold standard is the biggest threat conceivable. - Pension horror – as retirees get an eighth of what was predicted
Pension savers, who opened with-profits policies in the 1990s, could receive a fraction of the cash they were told they'd get when they started saving. A report has revealed that some people who would told they could expect around £29,000 a year in retirement could in fact get just £3,774. Money Mail has published the figures, which have been caused by two crushing forces: with-profits disasters, and annuity pain. - S&P 500 near record highs? Treasury yields at lows? Something’s gotta give
It’s a tug of war between stocks and bonds, at least, it feels that way. The S&P 500 were on pace to surpass a record closing high of 2,130.82 on Monday as Treasury yields held at record lows. The sharp swing higher for stocks was sparked by a June jobs report that showed that the U.S. created 287,000 new jobs in June, quelling some of the nagging fears that the labor market was beginning to sputter after the May report showed a measly 38,000 jobs (later cut to 11,000) were added. - Obama Pretty Much Shuts Down Offshore Drilling In Alaska
The Obama administration announced new safety regulations Thursday that would place extremely strict limits on offshore drilling for oil and natural gas off the coast of Alaska. The New York Times reported the regulations, finalized by the Department of the Interior, are seen as intended to reduce investment and harm energy production in the region. The New York Times stated that the rules are “the latest in a series of Obama administration rules designed to slow the extraction of fossil fuels from American public lands and waters.” - Lessons from the worst banking crisis in history
It’s ironic that some of the most honest words to come out of a politician’s mouth were, “When it becomes serious you have to lie.” That was a quote from Jean-Claude Juncker, former Prime Minister of Luxembourg and President of the European Commission (the EU’s executive branch) in 2011 when asked about Greece’s financial crisis. Greece was on the ropes and the entire system about to collapse, so, of course they lied. Then they lied about lying. This raises a very reliable rule of thumb to keep in mind during (and before) a banking crisis: don’t trust anyone in the establishment, especially a politician. It’s good advice these days. - The U.S. Government Is Targeting Your Retirement Savings… Here’s What You Can Do
Even before the Obama Administration introduced the new myRA program last year, there were whispers that the U.S. government would “assume some risk” for U.S. retirement accounts. That makes for a nice sound bite, but it’s really code for forcing American savers to buy government bonds. Here’s how it works. There’s no minimum balance to open a myRA account. And the accounts don’t incur fees. However, your myRA can only invest in U.S. Treasuries, which probably won’t even come close to keeping up with the real rate of inflation. In other words, what myRAs really offer is “return-free risk.” - Are You Planning Your Retirement? Forget About It. You Won’t Survive To Experience It.
The Israeli agents who comprise the Neoconservatives, a collection of war criminals that control US foreign policy, have already handed you your death certificate. The neoconservatives have far more power than they have intelligence or humanity. At the recent St. Petersburg International Economic Conference, President Putin excoriated Western Journalists for endlessly repeating Washington’s lies that are driving the world to nuclear war. He asked Washington’s bought-and-paid-for-whores, the scum who comprise the Western news media: “How do you not understand that the world is being pulled in an irreversible direction toward nuclear war?” Yes, indeed, how is it possible for the Western media to be totally blind? The answer to this question is that Americans live in the system of lies that comprise The Matrix, and media are paid to support the system of lies. The determining questions are: Can Americans escape their captivity in time to save life on earth? Do Americans have what it takes, or are Americans already a proven failed people who cower in ignorance under the threat of implausible “foreign threats”? - A Drone Was Used to Blow up a US Citizen Without Trial Yesterday. Let That Sink In
The Dallas shootings have ushered in a very new world for U.S. citizens. For the very first time, a drone has been used on U.S. soil to kill an American without trial or charges.
The suspected shooter in yesterday’s tragic killings, U.S. Army veteran Micah Xavier Johnson, was, according to police and press reports, holed up in a parking garage and would not give himself up. After hours of what police claimed were fruitless negotiations with Johnson, a weaponized robot was sent to where he was hiding and blown up, taking Johnson with it. - Massive Stockpile Means Oil Rebound Is Over
A massive global stockpile of oil could mean trouble ahead for the global crude market, according to Barclays. Crude oil prices dropped to a two month low on Thursday, after the Energy Information Administration reported a smaller-than-expected decrease in oil stockpiles. That may be a canary in the coalmine, a top energy market watcher explained. “For the last 6 quarters there’s been this discrepancy between global supply and global demand,” Michael Cohen, head of energy commodities research at Barclays, said last week on CNBC’s “Futures Now.” - Japanese savers flood into gold fearing the endgame is close
For all the talk about the surging yen as the biggest threat to Japan’s embattled economy, the truth is that there is another soaring currency (and asset) that is far more troubling for Shinzo Abe. Gold. While in past decades, the natural instinct of Japanese savers when faced with financial uncertainty has been to rush into the “safety” of cash (after all why allocate funds to government bonds that yield almost, or less, than nothing) as we recently showed in Safes Sell Out In Japan and Demand For Big Bills Soars As Japan Stuffs Safes With 10,000-Yen Notes, now something has changed. That something is increasing loss of faith in Japan’s currency. - Keep an Eye on the Dollar: It’s More Important than Ever. Global demand is the main concern right now
I have, on many occasions in the past in these pages, touched on the relationship between oil and the U.S. Dollar. The basics of that relationship are obvious: oil is priced in dollars on the global market, so from a logical perspective a strong dollar must put pressure on oil prices and vice versa. If the currency is worth more generally then anything priced in it is, relatively speaking, worth less…the price of that commodity goes down. This is not a tick for tick relationship, but over time and when broader trends emerge it generally holds true. That is reason enough for those who trade and invest in the energy sector to keep an eye on the dollar, but right now it may be even more important than ever. - 2 Signs the government is planning to confiscate your retirement funds
We’ve warned that bankrupt governments will be eyeing the multi-trillions of dollars in “un-taxed” retirement funds when they get desperate enough. Total funds currently held in private IRA and 401K accounts in the US are estimated to be in the neighborhood of $10 trillion. As we dance on the brink of a massive collapse, the government’s already empty coffers will be even further decimated as the economy contracts massively and tax receipts plummet. In that moment, rather than reducing expenditures and doing massive layoffs and closures of departments, like any regular business would do, politicians will nationalize retirement funds for the “good of the country”. - Black Hole of Negative Rates Is Dragging Down Yields Everywhere
The free fall in yields on developed-world government debt is dragging down rates on global bonds broadly, from sovereign debt in Taiwan and Lithuania to corporate bonds in the U.S., as investors fan out further in search of income. The ever-widening rush for yield could create problems if interest rates snap back, which would cause losses on investors’ low-yielding portfolios, or if credit quality falls. And the global yield grab is raising questions about whether rates can prove reliable economic indicators. Yields in the U.S., Europe and Japan have been plummeting as investors pile into government debt in the face of tepid growth, low inflation and high uncertainty, and as central banks cut rates into negative territory in many countries. - Repeat Of 70s Pattern Shows That A $675 Silver Price Is Realistic
In my previous silver article, I highlighted a very bullish pattern/fractal on the 100-year silver chart. It was a very big picture view of silver, which is really difficult to perceive within our current reality. However, at some point in time, it will catch up with our current reality. This will likely happen when the monetary system collapses. Silver, even more than gold, is the opposite of what is considered a monetary asset (debt, like a federal reserve note), today. This is mainly because silver has been completely demonetized, whereas gold is still a part of the current system (think central banks gold reserves). When the illusion of money (value) is exposed for what it is (worthless paper or digits), then people will demand real money (value) like silver and gold. - Everything we love to eat is a scam
Among the many things New Yorkers pride ourselves on is food: making it, selling it and consuming only the best, from single-slice pizza to four-star sushi. We have fish markets, Shake Shacks and, as of this year, 74 Michelin-starred restaurants. Yet most everything we eat is fraudulent. In his new book, “Real Food Fake Food,” author Larry Olmsted exposes the breadth of counterfeit foods we’re unknowingly eating. After reading it, you’ll want to be fed intravenously for the rest of your life. - George Soros predicts riots, police state and civil war for America
Billionaire investor George Soros has a new prediction for America. While it might be as dire as it gets for the financial wiz, this bet concerns more than just the value of the buck. According to Soros, there’s about to be an all-out class war. Soros, who is 81, previously bet against the British pound in the early 90s and made $1 billion off its collapse. In the years since, he’s remained active in investing, but also in advocacy. He’s helped keep Wikipedia afloat thanks to impressive contributions and through donations to the Tides Center, has indirectly funded Adbusters, the Canadian anti-capitalist magazine that put Occupy Wall Street on the map. Speaking to Newsweek recently, Soros neglected to acknowledge his past successes, but instead offered a word of warning: a period of “evil” is coming to the western world. - How to destroy America in eight easy steps
Just over eleven years ago, in June of 2005, an immigration overpopulation conference in Washington, DC, was held to review issues of immigration. It was filled to capacity by many of America ‘s finest minds and leaders. Dick Lamm as the former Governor of Colorado (D) gave an eye-opening speech. A brilliant college professor by the name of Victor Davis Hanson talked about his latest book, ‘Mexifornia,' explaining how immigration – both legal and illegal was destroying the entire state of California. He said it would march across the country until it destroyed all vestiges of The American Dream. Moments later, former Colorado Governor Richard D. Lamm stood up and gave a stunning speech on how to destroy America. The audience sat spellbound as he described eight methods for the destruction of the United States. - WTF Chart Of The Day – Factory Orders Collapse To Longest Streak In US History
For the 19th month in a row, US Factory Orders decline YoY (-1.2% for May) with a 1% drop MoM. Simply put, in 60 years of historical data, the US economy has never, ever suffered a 19 month stretch of consecutive annual declines. And yet we are supposed to believe there is no recession? - AG Lynch Announces Global Police Force Partnership With UN
During her speech at the United Nations, Attorney General Loretta Lynch announced that the Department of Justice is launching a global police force in order to combat “violent extremism” in the United States. A proposal such as this, with all of its various implications of an overreach of power, should be front-page news everywhere, but unfortunately, not many noticed. And that’s a concern to constitutional attorney KrisAnne Hall who released a video to make the rallying call. - G20 trade ministers discuss protectionism, global recovery in Shanghai
Chinese Commerce Minister Gao Hucheng has welcomed the adoption of the G20 trade growth strategy on Sunday. Trade Ministers from the group of 20 nations wrapped up a two-day meeting in Shanghai on Sunday. “This meeting was held in a positive atmosphere, expected results were achieved, and it was a complete success. The meeting became a good training ground at the trade and economic front for the G20 summit which will be held in September this year,” Gao told reporters. - Alan “Bubbles” Greenspan Returns to Gold. After a misbegotten credit bubble and $60 trillion more of debt.
Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. […] The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit — Alan Greenspan, 1966. That old rascal! Before joining the feds, former Fed chief Alan “Bubbles” Greenspan was a strong proponent of gold and the gold standard. He wrote clearly and forcefully about how it was necessary to restrain the Deep State and protect individual freedom. Then he went to Washington and faced a fork in the tongue. In one direction, lay honesty and integrity. In the other, lay power and glory. - DANGER: The World Is Now On The Verge Of The Largest Destruction Of Wealth In History
With the price of gold and silver surging once again, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned King World News that we are now on the verge of the largest destruction of wealth the world has ever seen. Egon von Greyerz: “Investors worldwide have never faced risk of the magnitude that the world is now exposed to. But sadly, very few are aware of this unprecedented risk. For the ones who understand risk and take the right decisions, it will “lead to fortune.” Only very few will choose that route. Instead, most investors will continue to live in the hope that current trends will go on forever, but sadly these people will end up “in shallows and in miseries.”… - May trade deficit jumps 10% as U.S. consumers snap up more imports
Stronger demand for imports such as cell phones, sneakers and home furnishings boost the U.S. trade deficit by 10% in May, but the rebound in consumer demand suggests the economy regained momentum after a slow start to the year. The nation’s trade gap climbed $41.1 billion — a three-month high — from a revised $37.4 billion in April, the government said Wednesday. Economists polled by MarketWatch had expected the trade gap of $40.2 billion. - War On The Streets Of America: Protesters Attack Police Officers In Major Cities All Over The Nation
This is what a nation looks like when it starts melting down from within. A series of very disturbing incidents of police brutality against young black males has caused a firestorm to erupt all across the country. You would have thought that the massacre of police in Dallas would have caused everyone to step back and reflect on what is really causing this cycle of violence, but instead the nationwide protests have gotten even bigger and more intense. Over the weekend, protesters attacked police with rocks, bricks, bottles, fireworks, chunks of concrete, Molotov cocktails and rebar from a construction site. In return, police fired pepper spray, smoke bombs and tear gas at protesters. As I write this, more than 200 protesters have been arrested over the weekend so far, and authorities are bracing for what the coming night will bring. - Debt Is Dragging Down American Consumers
In May, we reported on the rising level of credit card debt in the US after the Wall Street Journal reported that credit card balances are on track to hit $1 trillion this year. Now we have evidence it might be even bleaker. A study released in June by CardHub reveals US consumers did worse than expected in the first quarter of 2016. And the study confirms that at this pace, by year-end, Americans will have accumulated more than $1 trillion in credit card debt. According to the study, Americans paid off $26.8 billion in credit card charges through the first quarter. That represents just 38% of the $71 billion in debt added during 2015. It was the smallest Q1 debt reduction since 2008, falling almost 25% below the post-recession average. - The Dallas Massacre: This Is The Kind Of Civil Unrest That I Have Been Warning Is Coming To America
Today is a day to mourn and pray for America. In Dallas, Texas last night, a hate-filled gunman ruthlessly started gunning down police officers. A total of 12 officers were shot, and five of them are now dead. If we do not learn to love one another, there is no hope for us as a nation. Unfortunately, the love of most people has grown cold, and today messages of hate and division from people on all sides of the debate are being posted all over social media. The massacre in Dallas represented the deadliest day for law enforcement officers in the United States since 9/11, and this is the kind of civil unrest that I have been repeatedly warning is coming to America. I have warned about this in my books, on radio and on television. But of course I am best known for my articles, and the following are just a handful where I warned about what we would soon see… - The EU is breaking up politically and financially
When David Cameron decided to let the British people vote on Brexit, he did not realise that he would open a real can of worms. Before the referendum I declared that Brexit would not be the reason for a collapse of the world economy but that it could be the catalyst for such a collapse. We have only seen a few days’ reaction with heavy intervention from central banks around the world but judging by the massive volatility we have seen so far, there is now a very high likelihood that a major secular decline in the world economy will now start to unravel. The next few weeks and months are likely to be a lot worse than the 2007-9 crisis. - Separate Laws for Political Nobility & Economic Elite-Gerald Celente
Trends researcher Gerald Celente says Hillary Clinton not being charged by the FBI for having a private unprotected email server is just a small part of an ongoing major trend. Celente explains, “It’s bigger than Clinton. It’s a trend, and anybody can see it if they open their minds and add up the facts. What we have now is a neo-feudal society. It’s all connected. It’s, as we call it, ‘global-nomic.’ Since Obama became President, and these are the facts, 95% of the wealth since 2009 has gone to the 1%. Now, let’s take a trip around the world. 62 people have more dough than half of the world’s population combined. In the United States, 400 people are worth $2.5 trillion. What I am saying is the word ‘justice’ is being misspelled. It’s J U S T U S—Just Us. . . . You have separate laws for the political nobility and the economic elite.” - Americans And Canadians Face Silver Shortages As The Investment Deficit Surges
Americans and Canadians will likely face silver shortages in the future as investment demand continues to surge higher. This will come at time as the silver price skyrockets, thus making it even harder for investors to acquire physical metal. The U.S. and Royal Canadian Mints produce most of the Official Silver coins in the world. In 2015, the combined total of Silver Eagles and Maples sales equaled 81.3 million ounces (Moz). - The Bears Are Back – Oil Slides On Negative Sentiment
After oil prices rallied more than 80 percent between February and June, WTI and Brent have fallen back more recently, dropping from above $50 to just $45 per barrel. Oil traders are searching for more clarity on what to expect next, but the cacophony of data pointing in different directions is leading to confusion for analysts and speculators. On the bullish side for oil prices is Citigroup, which published a research note on Monday saying that it is “especially bullish” on commodities in 2017. Citi says that the oil markets continue to balance, and the concerns over global economic growth are not as important as the demand trajectory. Moreover, the crash in oil prices has forced the industry to make cuts that will only sow the seeds of the next boom. “The oil market is treading water for now, but the oil price overshot to the downside earlier this year and this is clearly setting the stage for a bullish end to the decade,” Citi analysts, led by Ed Morse, said. - Jubilee Jolt: Pre-Planned and Leaked ‘Summer of Chaos' Begins in Dallas
It was only two days ago that we focused on the Black Lives Matter (BLM) leaked documents showing they were planning, in concert with the Obama Regime, a “Summer of Chaos.” Two days later, on 7/7 (the magic number 7!), the opening shots were fired in Dallas, Texas. Just as we predicted. During an evening rally of Black Lives Matter to protest two deadly police shootings, a sniper or snipers took aim from rooftops and killed or wounded numerous government law enforcers. Following all the trappings of past false flag attacks, the supposed sniper was killed… blown up in fact… before we could gain any information from him. But, as we said earlier, two top Black Lives Matter activists had their email and Twitter accounts hacked last month and it showed their plans, in concert with US Attorney General, Loretta Lynch, to cause massive riots and unrest in what they termed the “Summer of Chaos.” - Global Investment to Plunge, Trade to Languish, on “Depressed” Demand: G-20 Trade Ministers
Facing “depressed market demand” and plunging global cross-border investment, the trade ministers of the G-20 countries along with folks from the IMF, the Organization for Economic Cooperation and Development, and the World Trade Organization, among others, met in Shanghai this weekend to hash out a plan. As at all these meetings, they reached an agreement, of sorts. The G-20 countries account for about 85% of global trade and 70% of global investment, so they matter. - The Anatomy of a False Flag Event
This are article examines three critical aspects of a false flag event and then applies what is known, and typical of a false flag event to the murder of five Dallas police officers earlier in the week. By the way, the above picture strongly suggests that there is a lot more to the official narrative than the public is being told. The three areas of concern are: Rehearsal of certain aspects of the event by either First Responser, LEO, or both. If the false flag event consists of an assassination(s), the narrative includes acting alone, the “discovery” of a diary or a mainfesto which states the murderous intentions of the “patsy”, and the labeling of the so-called perpetrator as being insane so the act can be referred to as a random act of insane violence so the subject of a conspiracy never enters the discussion by the media and the authorities investigating the crime. Disguise the purpose of the event. - Fear, Loathing & Record Money-Making in Government Bonds
US Treasuries set new records on Friday: The 10-year note rose to a new high, with the yield dropping to a new low of 1.366%. The 30-year Treasury bond also hit a new high, with the yield dropping to 2.11%, a record low. If 2.11% sounds like a miserably low return for tying up your money for three decades of hell and high water, it’s practically bond nirvana for whatever else is out there. - Andy Hoffman: The End Game has Arrived – Protect Yourself, and Do It Now!
Andy is short for words. This is the latest produced through SilverFarm, the best source for podcast and on-the-go info you seek. Give Andy a good listen as he provides us with his take on unfolding economic collapse. As most of you know our economy is in serious trouble. We should all take time each day to focus on our personal economy and think of improvements that could be made. Small changes in ones personal economic habits make a huge difference at the end of the day, week, month and year. - Bernanke’s Black Helicopters
Ben Bernanke is one of the most dangerous men walking the planet. In this age of central bank domination of economic life he is surely the pied piper of monetary ruin. At least since 2002 he has been talking about “helicopter money” as if a notion which is pure economic quackery actually had some legitimate basis. But strip away the pseudo scientific jargon, and it amounts to monetization of the public debt—–the very oldest form of something for nothing economics. Back then, of course, Ben’s jabbering about helicopter money was taken to be some sort of theoretical metaphor about the ultimate powers of central bankers, and especially their ability to forestall the boogey-man of “deflation”. - Is The BIS Setting Up The World For Another Meltdown?
On the heels of another wild trading week, is the Bank for International Settlements (BIS) setting up the world for another meltdown? Stephen Leeb: “In 2013, the Bank of International Settlements (BIS), one of the most powerful institutions you may never have heard of – blew it. It snubbed gold. I’ll explain how in a moment – contributing to gold sinking from $1,800 an ounce in October 2012 to below $1,200 by the end of June 2013, a massive 35 percent plunge in a mere eight months. The downtrend continued until the end of last year when gold briefly traded below $1,050… - The ECB’s Bank Stress Test Shows Fatal Errors
The United States have learned from their bad experiences during the Global Financial Crisis wherein almost its entire financial system was going down in flames. Stress tests to find out how banks would be able to deal with economic adverse scenarios became mandatory, and the European Union followed suit with its stress tests in 2011, followed by a series of check-ups later on. Almost a decade has passed since the GFC, and half a decade since the European stress tests, but the volatility and unrest in the financial world has never been this high. You would think that five years of ECB-supported lending would have helped these banks (as even though the net interest spreads did decrease, the access to the ultra-cheap lending facilities of the ECB allowed the banks to continue to generate positive results), nothing has changed, and more than 5 years after the term ‘PIIGS’ became one of the most well-known words to describe the economic mess in the weaker European, one of the I’s is now once again in serious economic trouble. - Deutsche Bank's Chief Economist Calls For €150 Billion Bailout Of European Banks
The cards have been tipped, and it appears Italy's Prime Minister may have been right. In the aftermath of Brexit, much of the investing public's attention has turned to Italian banks which are in desperate need of a bailout as a result of €360 billion in bad loans growing worse by the day (and not a bail-in, as European regulations mandate, as that would lead to an immediate bank run) to avoid a freeze and/or collapse of Italy's banking sector. This has pushed stock prices – and default risk – on Italian banks to record levels. So far Italy's bailout requests have mostly fallen on deaf ears, as Germany's political leaders have resisted Renzi's recurring pleas for a taxpayer funded rescue. However, as we have alleged, and as the Italian Prime Minister admitted last week, the core risk for Europe is not just the Italian banking sector but the biggest bank of all in Europe: Deutsche Bank. - Charting The Epic Collapse Of The World’s Most Systemically Dangerous Bank
Now the REAL question: what happens to Deutsche Bank’s derivative book, which has a notional value of €52 trillion, if the bank is insolvent? It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed. After a hard-hitting sequence of scandals, poor decisions, and unfortunate events,Visual Capitalist’s Jeff Desjardins notes that Frankfurt-based Deutsche Bank shares are now down -48% on the year to $12.60, which is a record-setting low. Even more stunning is the long-term view of the German institution’s downward spiral. With a modest $15.8 billion in market capitalization, shares of the 147-year-old company now trade for a paltry 8% of its peak price in May 2007. - DEAD PULSE: The Morgue is the Next Stop For the Financial System – Jim Willie
The Gold price will find its true value and price over $10,000 per ounce. The Silver price will find its true value and price over $300 per ounce. In reaching these levels, the ratio will return to the 30-1 range. The ruling bankers realize no remedy is possible. They are just trying to steal as many assets and accumulate as much gold as possible before the main bust event. - They Know It’s Coming: Insurance Company Risk Experts Have Started Hoarding Physical Gold and Cash Ahead Of Crisis
How do you know when the world’s economic, financial and monetary systems are in trouble? Answer: When re-insurance companies, whose sole purpose is to insure other insurance companies, start to panic into gold and begin hoarding cash it’s probably a reliable signal that things aren’t going as well as our central bankers’ best laid plans imply. That’s exactly what’s happening right now: A real paradigm shift is taking place in the markets… Even one of the world’s second largest re-insurers is now buying physical gold… They’re even adding physical cash… This is the insurance industry’s insurance company… They are the risk experts and they now are buying physical gold bullion and storing physical cash… The importance of this move is possibly the most significant flow of capital that you will see in your lifetime… - The Great Market Tide Has Now Shifted
In the conventional investment perspective, risk-on assets (i.e. investments with higher risks and higher potential returns) such as stocks are on a see-saw with risk-off assets (investments with lower returns and lower risk, such as Treasury bonds). When risk appetites are high, institutional managers and speculators move money into stocks and high-yield junk bonds, and move money out of safe-haven assets such as gold and U.S. Treasuries. But recently, markets are no longer following this convention. Safe haven assets such as precious metals and Treasuries are soaring at the same time that stock markets bounced strongly off the post-Brexit lows. Risk-on assets (stocks) rising at the same time as safe-haven assets is akin to dogs marrying cats and living happily ever after. - IMF says EU on brink of collapse and ‘untenable' Euro may have to be SCRAPPED
THE FUTURE of euro currency and the entire EU project looks unsustainable without major change, according to a damning review by the International Monetary Fund and renowned economists. IMF chiefs warned the UK’s decision to leave the EU would seriously hamper growth prospects in the region. Before the Brexit vote, the IMF forecast a 1.7 per cent expansion for the eurozone. However, post Brexit the organisation revised that down to 1.6 per cent this year and 1.4 per cent next year. - Markets are showing one of the same signs they did in 2007
We may still be in a bull market, but it really doesn't feel like one. And at least one indicator suggests we could be heading for a slide. Since the beginning of this year, the S&P 500 (.SPX) is being driven by sectors traditionally considered to be safe investments, such as utilities (.5SP5510), telecom (.5SP5010) and consumer staples (.5SP30). The stock index is hovering less than a percent off its own 52-week high as of Friday morning. Generally, when the broader market is lifted by these “defensive” sectors, it means investors are looking for safe havens where they can weather a future storm. That could be a precursor to an economic slowdown. In fact, one of the last times we saw defensive sectors outperform riskier ones was in 2007, just before the onset of the financial crisis. - Financial Analyst Warns: “Millions Will Die” When Financial System Collapses
Trillions of dollars of currency are being moved or rushing towards the debt market that is squeezing bond yields to historic lows. We are making history in the United States for the second week in a row, and I am talking about the bond market. Both gold and silver, since the beginning of this year, have taken off like rockets, and they are not going to stop. This environment is on the edge… - U.S. Economy Improving: How When 70% of Americans Don’t Have $1,000?
Truth be told, there isn’t any economic growth in the U.S. economy and that’s because the average American is struggling to the extreme. In fact, according to a poll done by the Associated Press-NORC Center for Public Affairs, about 70% of Americans would have trouble coming up with $1,000 to cover an emergency! In the same survey, 46% of Americans said their wages have remained stagnant in the past five years, while 16% said their salaries have actually seen cuts. - Rickards: $10,000 – $50,000 Gold!
“People around the world are losing confidence in central bank money,” Jim Rickards said in a recent interview. “When you lose confidence in central bank money, you look for other forms of money and gold is the best.” Despite all of our talk about cryptocurrencies over the past couple of weeks, we must point out, one more time, that investing in the cryptosphere — even Bitcoin — is a gamble. Yes, they are exciting. And, yes, some of them will be immensely disruptive. But there are a number of things that, in our shaky global environment, works against them. If the lights go out, for example, your stash of Bitcoin, Siacoin and Synereo aren’t going to get you very far. - How Gold Bears End——Eerie 1974-1976 Pattern Repetition Revisited
Gold Continues to Mimic the 1970s. Ask and ye shall receive… we promised we would update the comparison chart we last showed in late November in an article that kind of insinuated that it might be a good time to buy gold and gold stocks (see: “Gold and Gold Stocks – It Gets Even More Interesting” for the details). We are hereby delivering on that promise. It is actually interesting to revisit both past articles speculating about a potential gold bottom that turned out to be correct (those would be the many articles we penned on the topic from August 2015 onward) as well as those that turned out to be incorrect (which would e.g. include a number of articles written in late 2014. Although they managed to catch a playable rally in timely fashion, it ultimately turned out to be a bear market rally). - No Charges for Clinton Proves Two Tier Legal System, Global Crash is Certain, Buy Gold and Silver
You’ve heard by now, Democratic presumptive nominee Hillary Clinton will not be charged over her unprotected email servers she used while at the State Department. Even though FBI Director James Comey pointed out multiple lies Ms. Clinton told, he decided not to recommend charges and said he “could not prove intent.” He also explained his decision to Congress this week but would not comment when asked about other investigations into the Clinton Foundation. Comey revealed that he did not personally interview Ms. Clinton last Saturday or even attend the deposition. He also revealed that Clinton did not testify under oath. Democrats in the hearing said Republicans were grilling Comey just to score points against their presidential candidate. Now, leaders in the House of Representatives are preparing a recommendation to the FBI to look into allegations Clinton lied to Congress in the Benghazi hearings. - Gerald Celente – The Last Great Opportunity To Buy Gold & Silver
Today top trends forecaster Gerald Celente spoke with King World News about the action in gold and silver and what KWN readers around the world should expect next. Gerald Celente: “$10.7 trillion of negative yields — that is what is driving the gold market, along with the turmoil in the currency markets. The British pound just plunged over 20 percent in a matter of days. So these are the catalysts for the bid in the gold market… - This is what gold's top tipster is saying about prices
Gold’s top forecaster, who in February abandoned her bearish outlook to correctly call bullion’s surge, sees more gains in store before prices taper off by year-end. The metal will climb to $1,425 an ounce by the end of September, 4.4% higher than now, before dipping in the following six months amid prospects for higher U.S. interest rates, said Georgette Boele, a currency and commodity analyst at ABN Amro Bank NV. The 43-year old was rated by Bloomberg as the most accurate forecaster. Boele has been right on the way up and also the way down. At the start of 2013, she was among the most bearish analysts before gold capped its first annual drop in 13 years. She called for lower prices until just a few months after bullion touched a five-year low in December. With Brexit-related concerns over the global economy’s strength and U.S. interest rates not expected to rise anytime soon, gold’s now near a two-year high. - Gold & Silver To Be Last Currencies Standing – Peter Boockvar
The pervasive bullish sentiment towards gold continues as prices maintain solid gains and has one Wall Streeter saying the secular bull market is back in full force. “After rallying for 12 straight years and peaking in September 2011 at around $1,900 per troy ounce, gold fell into a very lengthy bear market that I believe ended in December 2015 at $1,050,” said Peter Boockvar, the chief market analyst for the Lindsey Group, in a CNBC post Thursday. - Privately Minted Silver Coins Were Legitimate Money in the 1800s
In the early 1830s, an eastern Kentucky man named Josiah Sprinkle started minting his own coins and circulating them around the area. Eventually, government officials got wind of Sprinkle’s operation and arrested him. But he was ultimately found not-guilty in court. How did a man minting his own coins escape the long arm of the law? Because his coins were pure silver. They were equal in value to the silver dollars minted by the US government. In fact, they were worth slightly more. - U.S. GMO food labeling bill passes Senate
The U.S. Senate on Thursday approved legislation that would for the first time require food to carry labels listing genetically-modified ingredients, which labeling supporters say could create loopholes for some U.S. crops. The Senate voted 63-30 for the bill that would display GMO contents with words, pictures or a bar code that can be scanned with smartphones. The U.S. Agriculture Department (USDA) would decide which ingredients would be considered genetically modified. The measure now goes to the House of Representatives, where it is expected to pass. - Signs the Government is Planning to Confiscate Your Retirement Funds
We’ve warned that bankrupt governments will be eyeing the multi-trillions of dollars in “un-taxed” retirement funds when they get desperate enough. It is an incredibly common occurrence. It has happened in numerous countries in just recent memory. Poland, Hungary and Bolivia are a few in the last years where retirement funds have been seized. Total funds currently held in private IRA and 401K accounts in the US are estimated to be in the neighborhood of $10 trillion. That number looks awfully enticing to the US government which is currently indebted to the tune of $19 trillion and holding liabilities of over $100 trillion. As we dance on the brink of a massive collapse, the government’s already empty coffers will be even further decimated as the economy contracts massively and tax receipts plummet. - Fear factor behind property fund withdrawals, say experts
The fear factor is causing investors to withdraw money from commercial property funds, according to one of the City's senior fund managers. Philip Nell, a fund director at Hermes, said there had been “a massive over-reaction to what's been going on over the last two weeks”. Mr Nell used to run the Aviva property fund that closed its doors along with five other funds this week. Henderson, Canada Life and Threadneedle became the latest on Wednesday. - IMF Sees Pakistan’s Currency Overvalued as Loan Program Near End
Pakistan’s currency is overvalued by as much as 20 percent and is contributing to the country’s declining exports, along with low commodity prices, power outages and security concerns, according to the International Monetary Fund. A December study from the Washington-based lender found the exchange rate was “broadly” overvalued by 5 percent to 20 percent, Harald Finger, the IMF’s mission chief for Pakistan, said in a Tuesday phone interview from Washington. “More or less that’s still our assessment.” The rupee and Pakistan’s stocks have been among Asia’s best performers since 2013, when Prime Minister Nawaz Sharif — who’s in London recovering from open-heart surgery — took a $6.6 billion loan from the IMF to avert a balance-of-payments crisis. Finance Minister Ishaq Dar reiterated last month that Pakistan doesn’t need another IMF program with the current one due to finish at the end of September. - Populist Politicians Take On Italy’s Massive Debt Pile
The Rome Olympics of 1960 marked the rebound of the Italian capital after years of war and reconstruction, an affirmation of the country’s renaissance and the city’s emergence as a symbol of dolce vita insouciance. Rome is still paying the bill, and the new mayor, Virginia Raggi, is sick of it. The city has roughly €13.6 billion ($15.2 billion) in debt and more than 12,000 creditors—though the pile is so complex no one really knows how much is owed to whom. Rome faces outstanding bills for operating its 61-year-old metro system, hauling trash, and running a network of unprofitable pharmacies that compete with private shops. The courts are grappling with hundreds of lawsuits over unpaid debts going back 50 years for land expropriated to build hospitals, streets, and other city projects—including some debts connected to the 1960 games, former Mayor Ignazio Marino has said. The average interest rate: 5 percent, at a time when the Italian government is issuing 10-year bonds at 1.5 percent annually. “We can’t keep paying such high interest just because nobody bothered to renegotiate the debt,” Raggi, who was elected on June 19, told the RAI television network. - Gross Calls Sovereign Bonds Too Risky With U.S. Yields Near Lows
Bill Gross said sovereign bond yields at record lows aren’t worth the risk. “The sovereign bonds are not up my alley,” Gross, who built the world’s biggest bond fund at Pacific Investment Management Co. and is now at Denver-based Janus Capital Group Inc., said on Bloomberg Television Wednesday. “It’s too risky.” Low yields mean bonds are especially vulnerable because a small increase can bring a large decline in price, he said. Yields in the U.S., the U.K. and Australia pushed to all-time lows Wednesday, while those in Germany and Japan dropped to unprecedented levels below zero. The average yield on the bonds in Bank of America Corp.’s World Sovereign Bond Index this week dropped below 1 percent for the first time, based on data going back to 2006, while almost $10 trillion of securities in the Bloomberg Global Developed Sovereign Bond Index yield less than zero. - What a difference in two weeks! Project Fear mastermind Osborne joins US banking giants to insist City will continue to THRIVE following historic Brexit vote
George Osborne and the Wall Street banking giants which helped bankroll the Remain campaign yesterday issued a resounding vote of confidence in the City of London. In a joint statement with the Chancellor, investment banks including Goldman Sachs, Morgan Stanley and JP Morgan pledged to ensure the City of London remains the world’s dominant financial centre when it leaves the EU. The firms said that while Brexit ‘clearly presents economic challenges’, they would strive to ensure Britain ‘remains one of the most attractive places in the world to do business’. - Britain readies for showdown with Putin as it stations troops throughout Eastern Europe
HUNDREDS of British troops are set to be scrambled to countries bordering Russia as a show of strength to Vladimir Putin. David Cameron will announce the deployment of a 500-strong battalion to Estonia with a further company of 150 troops to be stationed in Poland “on an enduring basis”. The move comes amid continuing concerns from the Western alliance regarding the intentions of Vladimir Putin following Russia's annexation of Crimea from Ukraine in 2014. - Property funds worth £18bn suspend trading in biggest seize-up since financial crisis
Property funds worth £18 billion have stopped trading after Brexit sent a chill through the commercial property market. The number of funds that have suspended trading has risen to seven since Standard Life stopped investors from taking out funds worth £2.9 billion on Monday, ten days after the Brexit vote. The fear was that too many property investors would try to take their money out at once, forcing fund managers to sell properties at a loss. More than half the funds in commercial property funds are on lockdown. The cooling of the construction industry has fuelled concerns that property prices and rental values could start to fall, leading investors to believe their that their money might be safer elsewhere. - Business minister Sajid Javid opens preliminary trade talks with India
The business minister is to launch trade talks with India, marking the start of a world tour aimed at drawing up a blueprint for Britain’s role in the global economy outside the European Union. Sajid Javid will hold preliminary talks with Indian government ministers in Delhi on Friday, marking the start of what is expected to be years of negotiations to establish new trade deals with individual countries. These bilateral deals will replace agreements the EU has with more than 50 countries. - Must Listen: It's Over: Bill Holter
On this edition of X22Report Spotlight, posted on Saturday, July 9th, 2016, returning guest Bill Holter of Jim Sinclair's Mineset discussed how the insolvency of the major European banks such as Deutsche Bank currently make them the leading candidates for a domino effect of collapse that will leave no bank in the world untouched. Bill briefly touched on Ben Bernanke's meeting next week in Japan with Kuroda and Abe, and how the likely topic of their discussion is helicopter money. He also pointed out that central bankers need a fall guy for their failed policies, and in this case, they will probably blame the global collapse on Brexit, with the war card also being played as a sufficient distraction. - Secret memos expose link between oil firms and invasion of Iraq
Plans to exploit Iraq's oil reserves were discussed by government ministers and the world's largest oil companies the year before Britain took a leading role in invading Iraq, government documents show. The papers, revealed here for the first time, raise new questions over Britain's involvement in the war, which had divided Tony Blair's cabinet and was voted through only after his claims that Saddam Hussein had weapons of mass destruction. The minutes of a series of meetings between ministers and senior oil executives are at odds with the public denials of self-interest from oil companies and Western governments at the time. - Domestic Trade Is Disintegrating: Heavy Truck Orders Plunge To Lowest Since 2010
Who says you need trade and logistics to maintain the S&P within 2% of its all time high? Not the Fed, that's who, and it's a wonderful thing because the state of US heavy trucking – the backbone of domestic trade infrastructure and logistical supply chains – suggests the US economy is in a far more dire state than the Fed would ever admit. According to the latest data from ACT Research released today, June orders for new heavy-duty, or Class 8, trucks plunged to just 13,100, the lowest number since 2010 according to the WSJ (and since 2012 according to Bloomberg, but no need to split hairs here) indicating that trucking companies – the forward-looking bedrock of any viable recovery along with rails – expect little relief from a weak freight market and sluggish economic growth. This month’s order activity was the lowest monthly total since July 2012 and the worst June since 2009. - Our Future Is (Literally) Crumbling Before Our Eyes
The sorts of predicaments the world faces — ranging from over $200 trillion in debt, to our unsustainable addiction to fossil fuels, to our over-stressed ecosystems — all require that we get deadly serious about confronting them ASAP, and make difficult decisions and trade-offs. However, our global leaders always seem to opt to kick the can down the road if at all possible. Short-term thinking and near-term priorities dependably get precedence over doing the right thing for the future. Tomorrow’s generations are thrown under the bus by selfishly motivated actors today. As I’ve put forth over and over again: we’re simply not going to make it unless we get much more serious about our efforts than we have been to date. Yes, it’s a wonderful thing that Elon Musk is building sexy electric cars; but even a single minute spent with a pencil, paper and the aggregate energy statistics on transportation will reveal that there’s an enormous gap between where we currently are and where we need to be. - A Furious Italian Prime Minister Slams Deutsche Bank As Europe's Most Insolvent Bank
Several years ago, we were the first to point out the true “elephant in the room”, namely Deutsche Bank's $75 trillion in derivatives which as we said at the time was about 20 times bigger than Germany's GDP, and 5 times bigger than the entire economic output of the Eurozone.” This was largely ignored by the “experts” because why bring attention to something which is fundamentally a devastating break in the narrative that “Europe is fine” and the financial crisis is now contained. Fast forward to today when Europe is once again not fine, only this time one can't blame Europe's problems on Greece (instead the same “experts” are trying to blame everything in Brexit), when in a surprising admission of reality, none other than Italy's prime minister Matteo Renzi, “went there” and slammed Deutsche Bank as the true “derivative problem” facing Europe. - Gerald Celente – A Devastating Crisis Is About To Be Unleashed On The World
Today top trends forecaster Gerald Celente warned that a devastating crisis is about to be unleashed on the world. Gerald Celente: From geopolitics to socioeconomics, from environmental to technology, be it the body politic or personal health, as trend forecasters it is essential to have a clear understanding of where we are and the knowledge of how we got here to see where we are going… - So What’s Going on with Inflation in Argentina?
When Argentine President Mauricio Macri took power, his economic team began to dismantle his predecessor’s heavy-handed policies — a process that had painful recessionary consequences for the Argentine population. Macri and his team repeatedly promised that by the second half of 2016, the pain would be worth it, the economy would recover and we would see some results. In a press conference yesterday, Macri announced that his policies have successfully put the country’s economy back on track. - Investor Fears Spike as Italy (and the EU) Inch Closer to Doomsday Scenario
Just how low can Italian bank shares go? That’s the question plaguing the minds of European investors, policy makers, bankers and central bankers. Today the shares of the country’s third largest publicly traded bank, Monte Dei Paschi, plunged 14% to €0.33, their lowest point ever. Two years ago, they ran between €5 and €9. The reason for the latest plunge was news that the ECB had sent the bank a letter urging it to draw up a plan for tackling its bad-loan burden. The lender is being asked to reduce its load of curdled debt by €10 billion to €14.6 billion by 2018. That’s a big ask even in the best of times, and these are certainly not the best of times for Monte Dei Paschi. According to Bloomberg, its loan loss provisions would represent over 95% of its operating profits. - The Big Unravel: US Commercial Bankruptcies Skyrocket
This year through June, there have been 91 corporate defaults globally, the highest first-half total since 2009, according to Standard and Poor’s. Of them, 60 occurred in the US. Some of them are going to end up in bankruptcy. Others are restructuring their debts outside of bankruptcy court by holding the bankruptcy gun to creditors’ heads. In the process, stockholders will often get wiped out. These are credit fiascos at larger corporations – those that pay Standard and Poor’s to rate their credit so that they can sell bonds in the credit markets. But in the vast universe of 19 million American businesses, there are only about 3,025 companies, or 0.02% of the total, with annual revenues over $1 billion; they’re big enough to pay Standard & Poor’s for a credit rating. - Venezuela Refuses to Default. Few People Seem to Understand Why
It’s been almost two years now since the renowned Harvard economist Ricardo Hausmann caused a stir in his native Venezuela by posing an uncomfortable question. Why does a country that’s so starved for cash keep honoring its foreign debts? In other words, how does it justify shelling out precious hard currency to wealthy bondholders in New York when it can’t pay for basic food and medicine imports desperately needed by millions of impoverished citizens? “I find the moral choice odd,” Hausmann concluded. - There’s a $3 Trillion Pool of Money Set to Extend Treasury Surge
Bank of America Corp. sees the $3 trillion U.S. corporate pension industry throwing its interest-rate assumptions out the window. And that means the retirement plans will probably throw more money into Treasuries. Even with yields at record lows, Shyam Rajan, head of U.S. rates strategy at the primary dealer, says pensions are likely to embrace the lower-for-longer mantra and bolster the $13.4 trillion Treasuries market. With only 6 percent of assets in Treasuries, half the peak seen in the 1980s, the retirement funds are primed to join buyers looking for a selloff to pounce. That demand waiting in the wings may depress yields further. Bank of America forecasts yields on 10-year notes will fall to 1.25 percent by the end of September, from about 1.39 percent as of 12:10 p.m. in New York on Wednesday. - Obama's Medicare ‘reform' blocking seniors from accessing important services including knee replacements; hospitals rewarded for spending less per patient
Remember when the liberal left accused us all of being paranoid racists for reading senior citizen death panels between the lines of Obamacare? It turns out that these hysterical Democrats were wrong once again, as new Medicare reforms issued by the Obama administration are reportedly stripping aging Americans of their coverage and leaving them to fend for themselves. According to the New York Post, Obama is completely “dismantling” Medicare, “dooming seniors to needless pain and disability and shortening their lives.” It might sound a bit hyperbolic, but it's true; the new rules apparently scrap Medicare coverage for things like hip and knee replacements, cataract operations and heart surgeries – you know, the things seniors need to actually keep on living. - Central Banker Who Slayed ‘Zombie Banks’ Meets Too Big to Fail
In two years as governor of Ukraine’s central bank, Valeriya Gontareva has shut down nearly half the country’s lenders, a financial purge with few modern precedents. But at a private dinner this spring with George Soros, she worried that it won’t be enough to banish permanently from Ukraine what she calls “oligarch banking.” “What concerns us both is the dominant position of one particular bank,” the billionaire investor recounted in a recent interview. It “has more than half the banking business and is in the hands of an oligarch who is very powerful.” - U.K. Property Fund Suspensions Send a Warning to the Junk Bond World
Investors in U.K. commercial real estate just touched a nerve. In pulling their money out of property funds at such a rapid pace four asset managers froze withdrawals this week, the investors showed how the cost of Brexit is spreading. They also tapped into one of the biggest fears of bond market observers: a mismatch between the liquidity of investment funds and their assets. The real estate funds are designed to allow investors to withdraw their money on a daily basis, while the properties backing them could take months to sell. That's similar to many mutual and exchange-traded funds that buy junk bonds — securities that can take weeks to sell — and offer daily redemptions. Yet while the property funds have grabbed the headlines and spooked markets, the bigger threat may be posed by bond funds.
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Latest News Articles – July 7, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From July 1, 2016 to July 7, 2016:
- Collapse of Empires is Upon Us-Gregory Mannarino
Trader and analyst Gregory Mannarino says what is going on today with the FBI refusing to indict Hillary Clinton is nothing new when considering the “fall of empires.” Mannarino explains, “This is a cycle, and we are seeing several pieces fall into place regarding the political system and the financial system that we have seen over and over again. There is a lifespan of an empire . . . at the top of every empire . . . there is an issue of the financial system, and there is an issue with the political system that becomes absolutely corrupt. This is why this announcement (FBI not indicting Clinton) came. Again, this is political corruption. It’s not just here in the United States, but globally it is flashing red across the sky. . . . I think they are well aware that the whole system is going down. The collapse of empires is upon us. . . . We are in an environment that globally we have never seen before. With what we are seeing in the United States with the corruption in politics, we’ve seen that before. Every great empire, right at the top, the two key elements that appear are financial system on the edge and political corruption trying to patch it all together. That is something we see over and over again throughout history.” - Market turmoil to persist: Follow the money, follow gold
From geopolitics to socioeconomics, from environmental to technology, be it the body politic or personal health, as trend forecasters it is essential to have a clear understanding of where we are and the knowledge of how we got here to see where we are going. Global equity markets are in turmoil. However, the business media’s view of market mayhem is a snapshot in time dating to the June 23 “Brexit” when the United Kingdom voted to exit the European Union. Indeed, while Brexit triggered the current turmoil, our trends-eye view identifies the current market volatility in a Globalnomic® context far bigger than Brexit. For example, just one year ago, Chinese equity markets were in crash mode. The Shanghai Index, up 150 percent in a year, plummeted some 40 percent by mid-July 2015. In just one day, it had its second-biggest fall in its history. Following a summer that plunged Chinese markets into bear territory, global equity markets had their worst quarterly showing since 2011. It got worse. - These six former Goldman Sachs bankers want to destroy your savings
Rule #1 in central banking: Never go full Draghi. Mario Draghi, of course, is the President of the European Central Bank (ECB) who pledged to do “whatever it takes” to save the euro. Or was it save the world? We forget. Anyhow, Mark Carney, the head of the Bank of England, just went full Draghi, pledging to do, effectively, whatever it takes… even if that means destroy the British pound or economy. Future historians will no doubt look back at this period in amazement, wondering, given the stunning and murderous failures of Nazi Germany and Soviet Russia, how central planning ever managed to find a last hold-out amongst the world’s central banks. Yes, Britain may have finally escaped from the EU lunatic asylum. - State pension scrapped for under 30s?
One in five 18 to 30 year olds don’t believe there will be a state pension for them when they eventually retire. When asked about the new flat rate state pension , more than half admitted they hadn’t a clue how much it paid out, according to research from workplace pension provider NOW:Pensions. Once they knew the amount, currently £155.65 a week, two in five said that wasn’t enough to retire on. This come on the back of previous research from NOW:Pensions with 100 cross party MPs where almost one in six didn’t expect the state pension to be around 30 years time, or if there still is one it will be at a much lower level. - Property market turmoil has eerie echoes of start of financial crisis
The name “Bear Stearns” is enough to send a shudder down the spine of any investor who survived the financial crisis. The collapse of Lehman Brothers in September 2008 is generally regarded as the moment when the entire financial system almost came crashing down. But it is often forgotten that the glue that held it together had started to come unstuck more than a year earlier. The first sign that things were unravelling was when American investment bank Bear Stearns prevented investors taking money out of two mortgage-related hedge funds in the summer of 2007. Eventually, both were liquidated. - Globalists Are Now Openly Demanding New World Order Centralization
I have said it many times in the past — when elitist criminals start openly admitting to their schemes it means that they are ready to pull the plug on the current system. They simply don’t care anymore who knows their plans because they think that victory is inevitable. There have been more subtle and less prominently published calls for a “new world order” in the past, to be sure. However, at no other time have I seen international financiers and their puppet political mouthpieces so brazen about calling for global centralization than in the wake of the successful Brexit referendum. It is as if the Brexit flipped a switch in the existing narrative and set loose a flood of new propaganda, all aimed at convincing the general public that central banks must combine forces and act as one institution in order to combat an economic crisis that isn’t even visible to laymen yet. - FBI's Hillary decision all part of jubilee plan towards greater chaos
Many people in the US were shocked that Killary Clinton was not indicted by the FBI today. Those people clearly have no idea what is going on. Since when has the government ever investigated itself (or its top figureheads and power players) and found itself guilty? You just have to look at the complete sham of the “9/11 Commission Report” to know that. Hillary has been selected (there are no real Presidential elections in the US) as the next President. Five of her close network attended Bilderberg this year where they have a record of selecting the next President. It matters not that she literally speaks in front of crowds that can be counted using your fingers while people like Bernie Sanders or Donald Trump speak in front of football stadiums. If people in the US don’t realize they are enslaved under a heinously criminal organization then the fluoride in the water, mainstream media programming and 12 years of government indoctrination camps have done their job. But, this goes far deeper than most realize. - Here We Go Again – Stockman Warns Of August 2007 Redux
Nearly everywhere on the planet the giant financial bubbles created by the central banks during the last two decades are fracturing. The latest examples are the crashing bank stocks in Italy and elsewhere in Europe and the sudden trading suspensions by four UK commercial property funds. If this is beginning to sound like August 2007 that’s because it is. And the denials from the casino operators are coming in just as thick and fast. Back then, the perma-bulls were out in full force peddling what can be called the “one-off” bromide. That is, evidence of a brewing storm was spun as just a few isolated mistakes that had no bearing on the broad market trends because the “goldilocks” economy was purportedly rock solid. Thus, the unexpected collapse of Countrywide Financial was blamed on the empire building excesses of the Orange Man (Angelo Mozillo) and the collapse of the Bear Stearns mortgage funds was purportedly owing to a lapse in supervision. - Economic crisis bares hunger problem in Venezuela
Kelly Vega says she lost 30 pounds in three months as she focused on feeding her 6-year-old daughter rather than herself. “We are eating two meals a day. If we eat breakfast, there's no lunch. If we have lunch, there's no dinner,” she said. This socialist country is suffering from severe food shortages that are making it hard to get enough to eat, even though Venezuela has the largest oil reserves in the world. Government officials blame the shortfalls on right-wing business owners hoarding products to sow chaos, while their detractors say it's the result of chronic economic mismanagement. - The Thin Veneer Of Civilization That We All Take For Granted Is Evaporating All Over The Globe
Have you noticed that the world seems to be going a little bit more crazy with each passing month? Here we are halfway through 2016, and the rot and decay that are eating at the foundations of civilized society seem to be rapidly gaining momentum. Every single day, all of us take certain things for granted as we go through our normal routines. For example, as you walk down the street you probably take it for granted that someone is not going to pull out a gun and try to shoot you. As members of a civilized society, we have come to expect that our fellow citizens will behave in a certain way. Unfortunately, the thin veneer of civilization that we have all come to rely upon is steadily evaporating all over the globe, and chaos, crime and violence are all on the rise. - Legend warns this will totally devastate the world and the window to safe yourself is closing
With the price of gold and silver surging once again, even with the July 4th holiday in the United States, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned King World News that what is coming will totally devastate the world and the window for investors to save themselves is closing. - Greeks See Wages and Pensions Slashed as New Round of Austerity Begins
The summer of 2016 turns out to be another summer of discontent for Greek pensioners and wage earners who see their incomes slashed, as a new round of austerity begins after the imposition of the new bailout program measures. It was exactly the same time last year (June 28) when Greeks found that the banks were closed and capital controls were imposed, continuing through today. This year, the end of June found wage earners and pensioners fuming or despairing in front of the ATM when they saw that their bank balances where lower than anticipated. And for hundreds of thousands of pensioners, the amounts were significantly less, even 48 percent lower in some cases. - America Has Become A Lawless Nation – Hillary Clinton Magically Cleared By The FBI
It is hard to be proud to be an American today after watching FBI director James Comey magically clear Hillary Clinton of all wrongdoing. Sadly, Comey is likely to go down in history as the man that struck the final death blow to the rule of law in America. During his address to the media, Comey admitted that Clinton sent or received 110 emails in 52 email chains that contained classified material at the time they were sent. But of course there were probably many more. Comey told the press that it was “likely that there are other work-related emails that they did not produce … that are now gone because they deleted all emails they did not return to State, and the lawyers cleaned their devices.” So basically Clinton turned over to the FBI whatever she felt like turning over, and then she destroyed the rest of the evidence. As a former lawyer, this infuriates me, but it doesn’t surprise me. - Sweden begins ball rolling to try to cut off gold acquisition by the masses as price begins to soar
One of the major reasons why the bullion banks have been able to keep the price of gold and silver down over the past four years is because only 1% of Americans and Europeans actually own the physical metals, or have not changed their investing paradigms to seek intrinsic safe havens rather than trust in paper assets. But since the beginning of the year, and with last week's ‘shot heard round the world' in the UK over their Brexit vote, central banks along with sovereign governments are now deathly afraid the people will finally wake up and rush to the door to get their hands on precious metals. And following the past two trading days of extreme movements upward in both gold and silver, one nation announced a sudden bank policy in which they will no longer allow bank deposits to be used to purchase gold or silver in an attempt to keep the masses from moving out of negative yield bonds and into real wealth protection. - Gundlach: “When Deutsche Bank Goes To Single Digits People Will Start To Panic”
Following today's Fed minutes release, Jeff Gundlach had a far less “uncertain” message: “Things are shaky and feeling dangerous,” Gundlach told Reuters in a telephone interview. It's not just stocks that Gundlach was not too excited about, he also had some choice words about buying Treasuries here. “You're seeing people who hated the ‘2 percent' 10-year suddenly loving it at a 1.38-1.39 percent revisit of the all-time low closing yield,” Gundlach said. “If you buy 10-year Treasuries now, I would say, it is a terrible trade location. In fact, it is the worst trade location in the history of the 10-year Treasury.” - Italy Faces Fight to Shield Bank Investors in Rescue, Fitch Says
Italian Prime Minister Matteo Renzi faces a battle to win European Union approval for a bank-rescue plan that protects investors from taking losses, according to Fitch Ratings. “We believe it will be difficult to reach the political consensus necessary to inject public funds as equity,” Fitch analysts Francesca Vasciminno and Cynthia Chan wrote in a note on Monday. EU state-aid rules, which normally require shareholders and junior creditors to share losses, can be waived in “exceptional circumstances” under the bloc’s treaties. Such an exemption requires unanimous approval by EU member states. Failing that, any injection of public funds under the bloc’s bank-failure law would be subject to state-aid rules. - Post-Brexit turmoil: Osborne promises to cut corporate tax to less than 15%
UK Chancellor George Osborne has outlined an ambitious plan to build a “super competitive economy” as Britain exits the European Union. His plan, among others, includes slashing the corporate tax to one of the lowest in any major economy. In an interview with Financial Times, Osborne stuck to his earlier warnings that a Brexit could tip the UK into a recession, but instead of dwelling on it, he said that he wanted a leading role in shaping the country's new economy path. He said Britain should “get on with it” to prove to investors that the country was still “open for business.” Prior to the EU referendum vote, the Chancellor, was tipped to be moving next door to 10 Downing Street. However, post-Brexit, he has made it clear that although he will not be seeking to take over Prime Minister David Cameron's role, he intended to steer the economy in a post-Brexit era. - Jetoil: Another Greek Company Files for Bankruptcy
Greek family business, Mamidoil Jetoil, is the latest in a chain of companies filing for bankruptcy according to article 99 of the Bankruptcy Code. The company dealing in storage, transport and trade of petroleum-based products in Greece and the Balkans was founded at the end of the Sixties by three brothers – Kyriakos, George and Nick Mamidakis. The company is following the same line adopted by Marinopoulos supermarket chain and filing for bankruptcy so as to receive temporary protection from its creditors. Recently, the company dealt with cash flow problems that caused it to streamline its operation and close down a number of its service stations due to an inability to pay suppliers. - LEAKED: Japan’s Mega-Pension Fund Plows into Stocks, Eats $50Bn Loss, Tries to Hide it till after Election
Abenomics is facing elections on July 10 for the less powerful Upper House. But Abenomics hasn’t fared very well. It engaged in the biggest (relative to the economy) money-printing and bond buying extravaganza the world has ever seen. The securities the Bank of Japan has bought, now at ¥426 trillion ($4.15 trillion), amount to 85% of GDP. About $8 trillion in Japanese Government Bonds sport negative yields. Even the 30-year yield is just about zero. The JGB market, once the second largest government bond market in the world, has frozen. The BOJ’s primary dealers are in revolt. Some have already pulled out. Savers are scared. Sales of safes to be installed at home have soared. There have been no structural reforms to speak of. Japan Inc. has benefited enormously, through various tax benefits and special stimulus packages, including foreign aid that is channeled back to Japanese companies. Government deficits are gigantic, providing additional stimulus for Japan Inc. And yet, the economy is languishing. - Something Huge Is Coming From Japan
Pretend, for a minute, that your country responds to the bursting of a credit bubble by borrowing unprecedented amounts of money and using it to prop up banks and construction companies. This doesn’t work, so you create record amounts of new money and push interest rates into negative territory in an attempt to devalue your currency. But this — amazingly — doesn’t work either. Your currency soars and the inflation you’d hoped to generate never materializes. Now what? Is there even anything left to try, or is it simply time to stand back and let the current system melt down? Those are the questions facing Japan, and the answers are not obvious. Here, for instance, is its inflation rate two years into the largest major-country money creation binge since Wiemar Germany. - June Auto Sales Down 4.6%, Much Worse Than Expected
Earlier today domestic auto sales came in a bit weaker than expected. Total numbers are now out. And they are much worse than expected. The Bloomberg Econoday consensus estimate for total vehicle sales in June was 17.3 million at a Seasonally Adjusted Annualized Rate (SAAR). The actual report shows 16.7 million SAAR sales. - Price Discovery, R.I.P.
That was quick. With nearly 85% of the Brexit loss recovered in three days and the market now up for the quarter and the year, what’s not to like? After all, the central banks are purportedly at the ready, and, in the case of the ECB and BOE, are already swinging into action according to their shills in the MSM. - All the Oil We’ll Never Pump Out
How many times have you read this line? Too many to count? While it’s plainly true, it’s also deeply misleading. It ignores a glaring fact about the gobs of oil under our soil: most of it will never see the light of day. I’m about to take you through the numbers, so buckle up: Let’s assume that in 2016 Venezuela produces 2.4 million barrels of oil per day (these are round numbers, deal with it.) Of these 2.4 million barrels, some 600 thousand barrels go to Chevy Caprices from 1980, (i.e., domestic consumption). That leaves 1.8 million barrels per day for exports, which is roughly $26 billion per year at $40/barrel – assuming we get paid in cash for oil exports! - The Fed’s Final Bullet
The Fed has no more maneuvers other than to jawbone the dollar lower. Because for a variety of reasons a strong dollar, in the current market environment, is akin to tighter monetary policy. And right now, in the wake of Brexit, tighter monetary policy is clearly not an option. Plus, a stronger dollar (by virtue of the “peg”) strengthens the Chinese Yuan and the Saudi Riyal… something neither country will tolerate. A monthly chart of USD-SAR – since the Riyal is pegged, this is essentially a straight line…but not always. Palpitations usually set in when a crisis is underway and oil prices are coming under pressure. The dollar’s whip-saw in 2016 has The Fed’s fingerprints all over it. The sequence is: Flawed forward guidance of 4 rate hikes (US dollar ramp), followed by a slowing US economy (US dollar softens)… and now the Brexit/ global economic fears (US dollar rallies in “flight to quality”). - When Government Controls All Wealth
Stock markets continued their rebound on Wednesday. The Dow rose 284 points… or just over 1.5%. London’s FTSE 100 Index was up 3.6%. And Europe’s equivalent of the Dow, the Euro Stoxx 50, was up 2.7%. Investors have realized Brexit isn’t the end of the world. First, because they think it won’t really happen. After all, elites can fix elections, buy politicians, and control public policy… surely, they can fix this! A letter in the Financial Times reminds us that Swedish voters cast their ballots against nuclear power in 1980. The government just ignored them, doubling nuclear power generation over the next 36 years. Second, because investors see the panic over Brexit leading to more spirited intervention by central banks! The EZ money floodgates – already wide open – are to be opened wider. The U.S. has its QE program on hold, but Europe’s scheme is gushing like Niagara. Mario Draghi at the European Central Bank buys $90 billion a month in bonds. And he’s not only buying government bonds; he’s buying corporates, too. - If the UK Economy Tanks, Don’t Blame Brexit
Last Thursday, the people of Britain voted in a referendum to leave the European Union (EU). Most commentators view Britain’s exit (“Brexit”) from the European Union as bad news for economic growth in the UK and the euro zone. As a result, it is argued, the growth rate in the rest of the world will be also badly affected. t is more likely that, whether the pace of real economic growth over time will weaken or strengthen is going to be set by the pace of expansion in the pool of real wealth. A strengthening in the pace of economic growth implies a strengthening in the rate of growth of the pool of real wealth. Conversely, a weakening in the pace of economic growth implies a weakening in the rate of growth of the pool of real wealth. - “You want to own gold” Mark Faber warns “Brexit is the excuse for QE4”
“If Brexit is used as an excuse, the central banks will print more money, QE4 in the U.S. is on the way and the depreciation in the purchasing power of currencies will continue,” warned a vociferous Marc Faber said in a Bloomberg TV interview today from Hong Kong. “In that situation, you want to own some gold,” he explained, carefully noting that central planners will be forced into this move because, despite all their extreme experimentation, “global growth has contracted, in other words, growth rates have been reduced and many countries are in recession already.” This has nothing to do with Brexit, stated the Gloom, Boom & Doom Report editor, “Brexit is actually not about an end of globalization. On the contrary, it’s about people that rebel against the arrogant elite in the financial centers.” - The subprime bubble grew by $1.4 trillion in just one month
Now, I don’t see a whole lot of difference between 2008’s subprime home loan borrowers, versus 2016’s subprime government borrowers. Neither borrower has the financial means to repay its debts. Back in 2008 the banks loaned money to subprime borrowers under the false premise that ‘home prices always go up.’ Today investors buy the bonds of subprime governments based on the false premise that ‘governments always pay their debts.’ Both assumptions are completely absurd and defy even the most cursory lessons of financial history. - Brexit will impact eurozone recovery: ECB board member
The uncertainty sparked by the British vote to leave European Union will “inevitably” harm economic recovery in the euro area, European Central Bank executive board member Benoit Coeure said in a newspaper interview Friday. The pick-up in the eurozone economy “will inevitably suffer from the ‘uncertainty shock' that the British referendum has triggered, even if the impact is difficult to quantify at the moment,” Coeure told the French daily Le Monde. The effect would be all the more damaging because “the recovery in the euro area is already there. It's healthy and driven by domestic demand and by investment,” even it was being “kept down by high unemployment levels and debt,” he argued. The victory of the Leave vote in Britain last week has already led to severe turbulence on the financial markets. - Scathing new report shows just how bankrupt Social Security really is
Last week, a group of analysts published an astonishing report about the future of Social Security in the United States, and their remarks were nothing short of damning. According to their calculations, for example, these analysts claim that Social Security is already running a huge deficit to the tune of tens of billions of dollars each year. In fact, this Social Security funding deficit has been taking place for several years now, and it’s actually accelerating. So the problem worsens each year. According to the analysis, the astounding rise in Social Security recipients vastly outpaces any growth in tax revenue received into the program. And this trend will continue for decades. The report goes on to describe Social Security’s two main trust funds, OASI (for ‘Old Age Survivors Insurance’) and DI (‘Disability Insurance’). They tell us that DI actually went bust several months ago. - What’s behind Venezuela’s economic crisis?
Tomorrow in Venezuela, President Nicolas Maduro will end electricity rationing that begun in April, following a drought that affected water levels at the hydroelectric dam that provides most of the country’s power. The rationing has cut off electricity to much of the country for fours a day. Still, Venezuelans are struggling with shortages of food, medicine and other necessities, with increasing finger pointing at Maduro’s leadership. For more on these challenges, “New York Times” reporter Nicholas Casey joins me via Skype from the nation’s capital, Caracas. Nicholas, the pictures and the stories that we’ve seen have been really tragic. I mean, we’re talking about people rioting for food. Has that basic need got any closer to being met? - The Collapse of Western Democracy — Paul Craig Roberts
There is controversy around the statement attributed to Martin Schulz, president of the EU parliament: “The British have broken the rules. It is not the philosophy of the EU that the crowd
can determine its fate.” This statement attributed to Schulz comes from a German language magazine. Here is the statement in German: “Die Briten verstoßen gegen die EU-Rahmenbedingungen, da es nicht in der Philosophie der EU liegt, dass der Mob über Aufstieg und Untergang der EU entscheiden darf.” This does translate to the English above. However, it appears that the statement was from a satire, whether of Schulz or the EU I do not know. I also do not know whether Schulz’s views justify the satirical jab or whether the words were assigned to him because of his position. Nevertheless, the fact that apparantly it was satire was lost in the transmission chain. - Russia & China Met Twice Last Week to Propose Monetary Reset – Willem Middelkoop
Russia and Chinese leaders met twice during last week and called (again) for an end to the current (dollar) system.From my contacts with Chinese insiders I know they really understand our problems well and are clearly preparing for The Next Phase (a monetary and geopolitical reset… - Gerald Celente – This Is Bigger Than Brexit
Although stocks bounced back on “Turnaround Tuesday” on the belief that contagion has been contained following the rout that wiped out $3.6 trillion from equity markets following Great Britain’s referendum last Thursday to “Brexit” the European Union… we disagree. It’s bigger than Brexit… Despite many of the world’s largest hedge funds betting billions on a “Remain” victory and British bookies putting the chances of “Leave” at barely 10 percent, in my June 15 KWN interview I said, “Should the ‘Leave’ vote win, we forecast the US dollar and gold prices will spike while equity markets, particularly those currently under downward pressure, will sink deeply lower.” Since then, gold hit two-year highs, the British pound fell to 31-year lows and currencies around the world hit new lows against the US dollar – or tested old ones – as investors sought safe-haven assets such as the dollar and Japanese yen. - SILVER JUST TOOK OUT $20: “We are at a flashpoint in history” — Andy Hoffman
Silver just took out $20 in Sunday night Globex trading, but that’s not all, silver briefly pierced $21 Sunday night before settling back to the mid $20’s. Andy Hoffman from Miles Franklin joins me for a Sunday update and warns, “We are at a flashpoint in history… there is literally a tiny, tiny window left for people to protect themselves before all hell breaks loose.” - Could This Rumor About China Be True? Plus The Latest On Gold, Silver, Brexit, Soros And More
With global markets continuing to experience wild trading in the aftermath of the historic Brexit vote, here is a quick update on the war in the gold and silver markets, the latest end of quarter rumors, plus gold, silver, Brexit and more. - Can This Be True? Is The Price Of Silver Really Headed To A Jaw-Dropping $690?
With the price of silver surging near $19 and the gold market holding recent gains at $1,320, the following was sent to King World News from analyst David P. out of Europe. The work below is not David’s and we are not sure if it comes from a colleague or not but it is worth featuring because of the astonishing price target that it sets for the price of silver. - Heal Yourself 101 – Learn to live the way you were designed
Everything you need to know on how to dramatically change your life and never get sick again. Many people who have done this have had dramatic results with everything from impotence to brain cancer. This isn’t a trendy fad diet, it’s an understanding on how to live the way we were designed. Explained in simple-to-understand language, this book gets straight to the point. You can change your life with simple things that cost almost nothing, right in your own home, starting immediately. This book was shared in the ‘10 Steps To Avoid The Crash‘ guide. Heal Yourself 101 was available for $29.97 and for a short period of time it is available in PDF format for free. - Doug Casey Debunks the Common Excuses for Staying In One Country
Tell a person that it's a big beautiful world, full of fresh opportunities and a sense of freedom that is just not available by staying put and you will inevitably be treated to a litany of reasons why expanding your life into more than one country just isn't practical. Let's consider some of those commonly stated reasons, and why they might be unjustified. While largely directed at Americans, these are also applicable to pretty much anyone from any country. - Warning: This Could Be the Start of a Global Banking Crisis
Europe’s banking system is collapsing. Over the past year, shares of Deutsche Bank (DB), Germany’s biggest bank, have plunged 56%. Swiss banking giant Credit Suisse (CS) is down 62% over the same period. Yesterday, both stocks hit record lows. Dozens of other European bank stocks have also crashed. The Euro STOXX Banks, which tracks 48 of Europe’s largest banks, is down 48% over the past year. This is a major issue. That's because banks are the cornerstone of the financial system. They keep money flowing through the economy. If they’re struggling, it often means the economy is having major problems. Right now, European banks are flashing bright warning signs. That’s not just bad news for Europe—it’s also a serious threat to the rest of the world. - What does the Brexit mean for the global oil market?
The voters’ decision to leave the EU has created a global ripple effect. The global oil market is now getting ready for a longer delay in investments and pricing suppression, an economic slowdown not needed at the time. Immediately, the value of a pound dropped to a thirty-year low of $1.34, the price of Brent fell 5%, and the world’s stock exchanges experienced a plunge. - Do emerging markets like Brexit?
Who’s afraid of a big bad Brexit? Not emerging markets who have been through days of strong growth, including having currencies buoyed against the US dollar since Britain voted to leave the European Union last week. In Brazil, the currency real opened 2.16 per cent stronger against the US dollar on Wednesday, reaching its highest level in 2016. It was a similar picture for the Mexican, Chilean and Colombian pesos. Meanwhile, the Russian ruble appeared to have regained considerable ground reaching its strongest against the US dollar since October last year. The benchmark Russian exchange MICEX continued its second day of gains, growing 1.3 per cent in similar fashion to markets in other emerging economies. Overall, while most global markets roiled as Brexit caused $3 trillion in investments to be shaved off exchanges around the world, emerging economies fared better. - Oil Crashes on Brexit, Oil Imports at a 42 Month High, Record Gasoline Output and Usage
Oil prices crashed along with global financial markets on Friday following the British vote on Thursday to exit the European Union (typically referred to as “Brexit”), which is widely expected to precipitate a period of political instability in Europe. Conservative British Prime Minister David Cameron, who had campaigned for remaining in the EU, submitted his resignation; British Labor Party leader Jeremy Corbyn also faces a no-confidence vote, as both major parties had campaigned to remain in the EU. In response to the British vote, populist parties on the left and right across Europe are calling for referendums in their own countries, with speculation that France, the Netherlands, Austria, Finland and Hungary might also vote to leave the EU, effectively rebalkanizing the continent. - Brexit BOOM: FTSE 100 leaps to HIGHEST level since 2015 just a week after EU referendum
BRITAIN's top stock market has surged to its highest level in almost a year, just one week after the vote to leave the European Union (EU). The FTSE 100 jumped again in Friday trading to sit at around 6,577 – its highest level since August 2015. The index has been climbing since Tuesday as confidence recovered from the initial shock over the outcome of the referendum. Despite experiencing one of the most volatile weeks since the 2008 financial crisis, the FTSE posted its best week since December 2, 2011, making gains of 7.15 per cent. - NIRP Absurdity Soars after Brexit, Hits $11.7 Trillion
The amount of government bonds that sport negative yields – an all-too-real absurdity where bondholders in effect are shanghaied into paying the government for the privilege of lending it money – has soared 12.5% after the Brexit vote, from $10.4 trillion at the end of May to $11.7 trillion as June 27, Fitch Ratings reported today. The action was in longer-dated bonds, with maturities of 7 years and over. Those with negative yields soared to $2.635 trillion, up 62% from the end of May and up 93% from the end of April, having nearly doubled in two months! The German 10-year yield fell below zero during the period, now at -0.124%. Japanese yields are below zero all the way out to 17 years. And “virtually all” of the Swiss sovereign debt luxuriates in negative yields. - Cryptocurrency Crash
One of the more profitable trades this year was in the cryptocurrency Bitcoin. For those unfamiliar, Bitcoin is a digital asset and payment system — a virtual currency. It’s considered a cryptocurrency because it doesn’t require a central bank to handle its transactions. It’s all self-contained through technology that encrypts and records a ledger over a distributed computer system. This technology is called the blockchain. The benefit of blockchain technology comes from its transparency. Everyone can see every transaction. The whole system is also decentralized. There’s no single institution or bank that controls the transferring of assets back and forth. This (advocates claim) removes the possibility of corruption, theft, and a whole host of other common problems that come with your standard financial system. - It Gets Real: Manhattan Apartment Sales Plunge
Real estate is local. And so housing bubbles are local. When enough of them happen, they coagulate into a national phenomenon. This has already happened. In March 2013, we started calling this phenomenon Housing Bubble 2, and we’ve watched in awe how it bloomed, nurtured by ultra-low mortgage rates, government subsidies, the Fed that is relentlessly “healing” the housing market, yield-desperate investors, private equity firms, Wall Street, a surge of foreign buyers who want to get their money – however they’d obtained it – out of harm’s way, and a million other factors. All of it has been accompanied by a national boom in hype. Now there are signs that our awe-inspiring Housing Bubble 2, like all housing bubbles, is beginning to unravel. This too is local, here and there, while still booming in other places. It shows up in some key markets. Then it spreads. When it spreads far enough, the unraveling of Housing Bubble 2 becomes a national phenomenon. - How Can We Celebrate Our Independence When Most Americans Are Willingly Enslaved To The Matrix?
Did you know that the average U.S. adult consumes 10 hours and 39 minutes of media a day? Nielsen has just released brand new numbers on the media consumption patterns of Americans, and they are absolutely staggering. According to Nielsen, the amount of media that we consume per day has increased by an hour just since the first quarter of 2015. This is the time of the year when we celebrate our independence, but how in the world can we ever be truly independent when most of us are willingly plugging ourselves into “the Matrix” for more than 10 hours a day? If you feed anything into your mind for hours every day, it is going to change the way that you think, the way that you feel about things, and the way that you view the world. This endless barrage of “news” and “entertainment” has fundamentally altered the belief systems of tens of millions of Americans, and this has very serious implications for our society moving forward. - Rio 2016: ‘Welcome to Hell' warn police
There was a nasty surprise awaiting passengers in the arrivals hall at Rio de Janeiro's Galeao International Airport on Monday. Along with the relatives carrying flowers and taxi drivers waiting with name boards there were lines of off-duty police with banners that had a far more ominous message: “Welcome to Hell”. “Police and firefighters don't get paid,” the banners, in English and Portuguese, went on. “Whoever comes to Rio de Janeiro will not be safe”. Photos of the protest have been widely shared on social media and in the Brazilian press. The image above was posted on the photo sharing site Imgur, where it was viewed more than three million times in less than a day. - Puerto Rico Says It Will Default Even With Congressional Aid
Two days before a potential historical default, Puerto Rico Governor Alejandro Garcia Padilla made it clear that the commonwealth won’t pay bondholders even as Congress votes on a bill allowing the island to restructure its $70 billion in debt. “On July 1, 2016, Puerto Rico will default on more than $1 billion in general obligation bonds, the island’s senior credits protected by a constitutional lien on revenues,” Garcia Padilla wrote in a editorial posted on a CNBC website. The lapse will mark the first time the U.S. territory has failed to pay what it owes on general-obligation debt, a $13 billion swath that its constitution says has the top claim to the government’s funds. Garcia Padilla previously said the commonwealth couldn’t raise enough to cover what’s owed to bondholders even if he shut down the government. The island has about $2 billion in principal and interest payments due Friday. - Millennials Are Pretty Cocky About Their Investing Skills
One of the great things about young people is their optimism, the confidence that everything is going to work out. Sometimes, though, that can get them into trouble, like behind the wheel of a car. Or as an investor. A new survey found millennials were more positive about the future than their parents when it came to investments. They also think themselves far more knowledgeable about how to manage money, which, as anyone will tell you, might translate into behavior that leads to bad financial outcomes. - World-Check terrorism database exposed online
A financial crime database used by banks has been “leaked” on to the net. World-Check Risk Screening contains details about people and organisations suspected of being involved in terrorism, organised crime and money laundering, among other offences. Access is supposed to be restricted under European privacy laws. The database's creator, Thomson Reuters, has confirmed an unnamed third-party exposed an “out of date” version online. But it says the material has since been removed. Security researcher Chris Vickery said he discovered the leak. He notified the Register, which reported that it contained more than two million records and was two years old. - Repo Rates Surge to Post-Crisis High as Bank Dealers Pare Back
The rate for borrowing and lending government debt surged Thursday to the highest since the financial crisis as banks reined in collateral lending to shore up balance sheets ahead of the quarter-end. With fewer dealers borrowing cash and posting government debt as collateral, money funds — the key lenders of cash in the repurchase agreement market — gravitated to buying Treasury bills and parking cash with the Fed via their RRPs during quarter-end, driving overnight rates higher. - Richmond Fed Dead-Cat-Bounce Crashes To 3-Year Lows
With the biggest miss in two years, Richmond Fed collapsed to -7 (lowest since Jan 2013) from March's 22 print (six year highs). The farcical flip-flop leaves the average workweek plunging into contraction, number of employees dropping, New Order volume crashing, and worse still, future expectations of hisring and work week is plunging. Best in 6 years to worst in over 3 years… - Forget December. Forget Next Year. The Fed's Done Hiking Until 2018
Circle Jan. 31, 2018, on the calendar. That’s the soonest the Federal Reserve hikes next. At least if money market derivatives are to be believed. Traders, who have consistently been better at projecting the path of interest rates than the Fed itself, are now pricing in a greater probability that policy makers will cut rates in upcoming meetings than raise them. They don’t assign more than a 50 percent chance of an increase until the beginning of 2018, and don’t price in a full rate hike until the final quarter of the year. - The Recent Rise in Delinquency Rates on Bank Loans Is Shocking (Is a New Banking Crisis Imminent?)
The delinquency rate on loans is key in understanding banking. It answers one question: what percentage of loans is overdue for payment? The delinquency rate is by far the most useful indicator for “credit stress.” It seems, however, as if delinquency no longer counts. Few are paying attention to the quick and sudden rise of the delinquency rate. What does it tell us and is a new banking crisis imminent? This Is What Happened after Janet Yellen Hiked the Fed Funds Rate in December. I have said it many times over and I will repeat it here: the last time around, it took Fed-chairman Alan Greenspan over two years and seventeen rate hikes to bring the Fed funds rate from a then all-time-low of 1% to 5.25%, before the U.S. economy suffered the worst recession since the 1930s. We are not so lucky this time. - April Spending Exuberance Plunges Back To Earth In May As Income Growth Slows
After an exuberant April, spiking hope that everything was awesome with a surge in spending, May has dragged US consumers back down to earth. The 1.1% (revised) jump in spending in April (highest since Aug 09) is over as May's 0.4% gain is back in the land of ‘normal' once again. Income rose just 0.2% MoM (less than expected) slowing dramatically from last month to near the weakest YoY growth since March 2014. The savings rate fell once again on the back of this (down 0.1%) to 5.3%. With YoY Income growth almost the weakest since March 2014 and spending fading… - Pending home sales down 3.7%, marking first annual drop in two years
The final push of the spring housing season turned out weaker than expected. Signed contracts to buy existing homes fell 3.7 percent in May compared to April, according to the National Association of Realtors. April's reading was revised down. These so-called pending home sales were 0.2 percent lower than May of 2015, the first annual drop since August of 2014. “With demand holding firm this spring and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale in May and ultimately dragged down contract activity,” said Lawrence Yun, chief economist for the Realtors. “Realtors are acknowledging with increasing frequency lately that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market.” - API Claims A 3.9 Million Barrel Draw
The latest inventory report by the American Petroleum Institute injected some optimism into crude oil markets, suggesting that U.S. stockpiles fell by as much as 3.9 million barrels in the week to June 24. This is significantly more than the 2.4 million barrels seen by analysts polled by Reuters and the sixth consecutive week of inventory draws, should the API information be confirmed by the official figures that will be released later today by the Energy Information Administration. Last week, the API said inventories had plummeted by 5.2 million barrels in the week to June 17, but EIA data revealed that the draw was much more moderate, at less than a million barrels. - East Coast Ports Hit By Import Decline
Imports slumped at some of the East Coast’s busiest ports in May, as high business inventories and shifting trade patterns that favor the West Coast curbed volumes. On Tuesday the Port Authority of New York and New Jersey reported that May loaded imports fell to 268,861 twenty-foot equivalent units – a common measure of shipping container volume – down 4.7% from the same month last year. The total volume of containers passing through the port fell by 6.1% in May. - Chiacgo PMI Spikes To 18-Month High – 7 Standard-Deviation Beat – As Employment Crashes?!
Seriously!! Chicago PMI spiked to 56.8 in June (from 49.3) – higher than the highest estimate and seven standard deviations above expectations. This is the highest since Jan 2015. Simply put, the number is beyond any credibility, as despite higher orders and output, demand for labor fell as employment contracted at the fastest pace since November 2009. - Carney prepares for ‘economic post-traumatic stress’
The Bank of England is preparing to unleash another round of monetary stimulus as it battles to contain the economic fallout of The UK’s decision to leave EU. In a stark warning to politicians, governor Mark Carney said a downturn was on its way and Britain was already suffering from “economic post-traumatic stress disorder”. He said the central bank would take “whatever action is needed to support growth”, which probably included “some monetary policy easing” in the next few months, in an attempt to reassure the markets and the general public. But Mr Carney also said that central bankers could do only a limited amount to mitigate the pain. - “You Want To Own Gold” Marc Faber Warns “Brexit Is The Excuse For QE4”
“If Brexit is used as an excuse, the central banks will print more money, QE4 in the U.S. is on the way and the depreciation in the purchasing power of currencies will continue,” warned a vociferous Marc Faber said in a Bloomberg TV interview today from Hong Kong. “In that situation, you want to own some gold,” he explained, carefully noting that central planners will be forced into this move because, despite all their extreme experimentation, “global growth has contracted, in other words, growth rates have been reduced and many countries are in recession already.” This has nothing to do with Brexit, stated the Gloom, Boom & Doom Report editor, “Brexit is actually not about an end of globalization. On the contrary, it’s about people that rebel against the arrogant elite in the financial centers.” - What are my choices?
Pastor Williams has asked me to share with you this information from an unknown source regarding your choice in the upcoming November presidential election. Please share it with everyone you can. If I were not already convinced this message would have convinced me. It is also a good read as it makes its points! - Hillary Clinton says American 401(k)s lost $100 billion after Brexit vote
In a speech attacking her opponent, Hillary Clinton said Donald Trump cheered while the economy reeled in the aftermath of Britain’s shocking vote to leave the European Union. “On Friday, when Britain voted to leave the European Union, he crowed from his golf course about how the disruption could end up creating higher profits for that golf course, even though, within 24 hours, Americans lost $100 billion from our 401(k)s,” Clinton said in Ohio June 27. “He tried to turn a global economics challenge into an infomercial.” Trump did say last week that Brexit would benefit Turnberry, his golf course in Scotland, because a weaker pound would bring more tourists. We wondered, though, about the other part of Clinton’s claim: that Brexit caused 50 million Americans with 401(k) retirement savings accounts to lose $100 billion in just 24 hours. - ‘The end is coming,' says Ron Paul
The historic U.K. vote to leave the European Union is a sign of a major global meltdown, not just a watershed that marks the end of a unified continent, former Rep. Ron Paul says. “I think [the EU] will become nonfunctional,” Paul told CNBC's ” Futures Now ” on Tuesday. “It really is coming to an end. It doesn't mean tomorrow or the next day, but people are going to be really unhappy. The end is coming, but it isn't coming because of the breakup,” he added. Paul attributed the fallout to “bad fiscal policies” around the globe. He said that as long as interest rates remain low, the markets will remain in bubble territory. - Brexit will allow insurers to escape ‘absolutely dreadful' EU regulation, claims former civil service chief
British-based insurers may be better off outside the EU because capital rules have damaged competitiveness and constrained the sector's ability to expand, according to the former head of the civil service. Lord Turnbull, who served as a non-executive director at Prudential for almost a decade, described the regulatory framework, known as Solvency II, as “absolutely dreadful”. Solvency II has drawn widespread criticism from the industry and UK regulators, which have warned that the high costs of implementing the framework have so far failed to level the playing field in the sector. Lord Turnbull said the UK's decision to leave the EU could benefit the industry. - This economist thinks China is headed for a 1929-style depression
Andy Xie isn’t known for tepid opinions. The provocative Xie, who was a top economist at the World Bank and Morgan Stanley, found notoriety a decade ago when he left the Wall Street bank after a controversial internal report went public. Today, he is among the loudest voices warning of an inevitable implosion in China, the world’s second-largest economy. Xie, now working independently and based in Shanghai, says the coming collapse won’t be like the Asian currency crisis of 1997 or the U.S. financial meltdown of 2008. In a recent interview with MarketWatch, Xie said China’s trajectory instead resembles the one that led to the Great Depression, when the expansion of credit, loose monetary policy and a widespread belief that asset prices would never fall contributed to rampant speculation that ended with a crippling market crash. - UK faith leaders unite in condemning post-referendum rise in xenophobic abuse
Leaders of Britain’s main faith communities have united in condemning intolerance amid mounting reports of xenophobic and racist abuse in the wake of the EU referendum result. The Anglican archbishop of Canterbury, the Catholic archbishop of Westminster, the chief rabbi and senior imams have all spoken out against division and expressions of hatred. In Brussels, the United Nations human rights chief said he was deeply concerned about reports of attacks on minority communities and foreigners. Zeid Ra’ad al-Hussein urged the UK authorities to prosecute those responsible, saying racism and xenophobia were “completely, totally and utterly unacceptable in any circumstances”. Police recorded a 57% increase in hate crime complaints in the four days following the referendum, in which immigration was a key plank of the leave campaign. Justin Welby, the leader of the Church of England, said people of “evil will” were using the referendum result as an excuse to vent their hatred. - Another Case For Exit——-America Should Get Out Of NATO
In its reporting on Brexit, the New York Times asks an interesting question: “Is the post-1945 order imposed on the world by the United States and its allies unraveling, too?” Hopefully, it will mean the unraveling of two of the most powerful and destructive governmental apparatuses that came out of the postwar era: NATO and the U.S. national-security state. In fact, although the mainstream media and the political establishment elites will never acknowledge it, the irony is that it is these two apparatuses that ultimately led to the Brexit vote. - 16 Reasons to Celebrate Brexit’s Win
Watching the Brexit campaign generated mixed feelings: it was a little like the man who saw his mother-in-law drive his new Mercedes off a cliff. In the United Kingdom, some people who hated free trade, immigration and market innovation challenged the officious, wannabe superstate headquartered in Brussels. Who to cheer for? We should cheer for the Brexiteers, who deserve at least a couple of hurrahs. The European Union created a common market throughout the continent, an undoubted good, but since then has focused on becoming a meddling Leviathan like Washington, DC. For Britain, the virtues of remaining appeared to pale in comparison to the likely costs of continued subservience to Brussels. In a variety of imperfect ways, Brexit promoted liberty, community, democracy and the rule of law. In short, the good guys won.
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Latest News Articles – June 30, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From June 24, 2016 to June 30, 2016:
- Jim Rogers on Brexit: ‘Worse than any bear market you’ve seen in your lifetime'
The UK's decision to leave the European Union will lead to an economic crisis more severe than what the world faced in 2008, according to legendary investor Jim Rogers, chairman of Rogers Holdings. “This is going to be worse than any bear market you’ve seen in your lifetime,” he said on Yahoo Finance’s “Market Movers” program Monday. “2008 was bad because of debt. The debt all over the world is much, much higher now. Stocks in the US, for instance, have been going sideways for 18 months to 24 months. That’s called a distribution by many people. When you have distribution for a year and a half, it usually leads to bad things.” - The United States Of Europe: Germany And France Hatch A Plan To Create An EU Superstate
If you believe that the Brexit vote is going to kill the idea of a “United States of Europe”, you might want to think again. In fact, it appears that the decision by the British people to leave the European Union is only going to accelerate the process of creating an EU superstate. As you will see below, one of the largest newspapers in the UK is reporting that the foreign ministers of France and Germany have drafted “a blueprint to effectively do away with individual member states”. So even though men like George Soros are warning that the eventual dissolution of the European Union is “practically irreversible” after the Brexit vote, the truth is that the globalists are not about to give up so easily. - Gerald Celente Just Issued A Dire Warning To The World After His Shockingly Accurate Brexit Prediction
Top trends forecaster in the world, Gerald Celente, just issued a dire warning to King World News on the heels of his shockingly accurate Brexit prediction. “The world certainly did change forever on that historic vote to leave the EU. As I have long predicted, we are now looking at the dissolution of the European Union. Since the British voted to Brexit, what have we seen throughout Europe? France, Germany, Italy, Finland, and the Netherlands, are all calling for referendums to leave the EU. - ALERT: Man Whose Work Is Praised Around The World Says Gold To Soar $1,000 In 24 Months
Interest rates have never been as low as today; 5,000 years of data confirm this. In the meantime government bonds valued at more than eight trillion dollars have negative yields to maturity. As an asset class, fixed income securities are more expensive than ever before. By now, central bank interventions have decimated all notions of honest, free market price discovery in bond markets and beyond. The centrally planned bubble in bonds is about to bring about the “euthanasia of the rentier” so craved by Keynes himself and his acolytes. When this bubble inevitably bursts, it will be abundantly clear how valuable an insurance policy in the form of gold truly is. - Is This Epicenter Of Serious Trouble About To Send Shockwaves Across The World?
Well, it looks like my traveling finally set a world record for volatility that will likely never be topped. I am of course referring to all the wild gyrations in virtually every tradeable market that took place on Friday — which continued for the most part today. There are any number of topics I could try to discuss, but I would like to focus on what I think are the key points of the ramifications of the Brexit vote. The very first thing to keep in mind is that the “winner” of all of this is liable to be a massive amount of uncertainty (compounded by the U.S. election looming in five months), which inhibits businesses from making decisions and at the margin causes people to sell many types of assets. - Report to Supporters: The British Woke UP — Can The Americans?
Many thanks for the support that you give to the website and for the words of encouragement and appreciation that you send to me. The website resulted from you calling me out of retirement. It is widely read and translated into foreign languages. I try to read every email, but it is not possible for me to read and comment on the many articles and books that you send or to respond to your questions over a wide range of issues, not all of which I know anything about. This website is a great deal of work. In our time to be truthful is to be provocative. To write provocatively leaves little room for error or mistatement as today’s euphemism terms it. I could shill for the establishment and be wrong 98% of the time and nothing ever would be said about it. But there is no forgiveness for a provocative truth-teller. - China state planner on UK investment after Brexit: “Wait and see”
Chinese companies may want to “wait and see” the impact of Britain’s vote to leave the European Union before they invest in the country, Xu Shaoshi, the head of China’s top economic planner said on Sunday, according to Reuters. However, the impact of the referendum on China’s economy will be limited, the chairman of the National Development and Reform Commission said. At the World Economic Forum meet in Tianjin city on Monday, Chinese Premier Li Keqiang said that China would continue strengthening ties with Europe and the UK. - ECB Blows €400bn on “Brexit Black Friday” Bank Bailouts
Dealing with a Financial Crisis under cover of Brexit Chaos. Remember TARP, the Troubled Asset Relief Program that the US Congress approved to bail out banks and other companies during the Financial Crisis? $700 billion were authorized, later reduced to $475 billion. The Treasury eventually dispersed $432 billion. I bring this up because the ECB bailed out the European banks with more than TARP, in just one day: on Brexit Black Friday. The ECB saw what was happening to the shares of the largest banks on that propitious day. - How Vulnerable is the Shaky US Economy to Brexit Fallout and European Bank Meltdown?
You know things are getting bad when our leaders call for calm. US Secretary of State John Kerry just did that. “It is absolutely essential that we stay focused on how in this transitional period, nobody loses their head, nobody goes off half-cocked, people don’t start moving on scatter-brained or revengeful premises,” he told reporters in Brussels on Monday after Brexit had thrown the EU into political turmoil, while European bank stocks had their worst two-day meltdown ever, on the toxic mix of Brexit and a full-blown banking crisis. And all kinds of things are suddenly happening. - Crash of All Crashes Coming-Bo Polny
Market cycle analyst Bo Polny says the vote by the UK (Brexit) to leave the European Union is a big turning point. Polny says, “Brexit is England and part of the cycle and I believe looks to be the actual trigger that is going to take gold higher and the trigger that is going to cause the world equity markets to collapse. It looks like it started, but we will have a little bit of time yet before things get extremely crazy. We are not going to get out of June before all heck breaks loose.” Polny also is predicting the Dow will eventually grind down to around the 5,000 level. Polny explains, “Basically, after the Dow hits that 5,000 or 6,000 point, it never recovers. This is the crash of all crashes. This is the one where there is no recovery.” - US Banks Are Crashing & British Banks Halted After Crashing
The Brexit contagion is spreading as USD liquidity and counterparty risk in the interconnected global financial system has reached US banks with Goldman at 3 year lows and BofA and Citi plunging over 12%. This happens just two days after the Fed released its latest stress test results finding that none of the 33 banks tested would need additional capital in case of a “severe” financial crisis. That conclusion may be tested soon. - King Says Carney Calm Will Guide U.K. Through Brexit Uncertainty
Mark Carney will help to guide the U.K. through the next few months amid political stasis after the Brexit vote, according to his predecessor as Bank of England governor. Mervyn King said the “most important thing” for the U.K. is an effective government and opposition. Both are absent after Britain’s vote to leave the European Union prompted Prime Minister David Cameron to resign and led to turmoil in the opposition Labour Party. Concern about political leadership was one factor cited by S&P Global Ratings on Monday when it stripped the U.K. of its top credit grade. - Banks Suffer More Downgrades, Other Sectors To Feel Post-Brexit Pinch: Tuesday's Analyst Actions
After Monday's deluge of downgrades on European banks, RBC Capital Markets continued the pile-on. “There has been a strong correlation between share prices and consensus EPS,” the analysts write. “We expect a prolonged period of uncertainty post Brexit to negatively impact business and consumer confidence across the U.K. and Europe and beyond.” And in this case, the team sees a number of reasons why their peers will also sour on the outlook for banks' bottom lines. Estimates for net interest income, investment banking revenues, and equity-sensitive revenues should come under the knife while loan loss provisions move higher, they anticipate. - Italy eyes €40bn bank rescue as first Brexit domino falls
Italy is preparing a €40bn rescue of its financial system as bank shares collapse on the Milan bourse and the powerful after-shocks of Brexit shake European markets. An Italian government task force is watching events hour by hour, pledging all steps necessary to ensure the stability of the banks. “Italy will do everything necessary to reassure people,” said premier Matteo Renzi. “This is the moment of truth we have all been waiting for a long time. We just didn’t know it would be Brexit that set the elephant loose,” said a top Italian banker. - Brexit Is Just The Beginning: A Tidal Wave Of Popular Revolt Against The Ruling Elites
Now that Britain has done the unthinkable and voted to leave the European Union, the critics are ruthless in their condemnation of Prime Minister David Cameron for his “irresponsible act” in calling the referendum in the first place. As if it were his fault. As if he was responsible for the bloated Brussels bureaucracy and undemocratic governance structure in the EU. As if he were to blame for the domination of an unequal union by a German chancellor responsive and accountable only to her own domestic political concerns. - Ron Paul: The People Will Not Suffer From Brexit, Only the Global Banking Elite Will
Since 1958, the European Union has been absorbing independent states across the continent. Starting with the original inner 6 countries (Belgium, France, Italy, Luxemburg, Netherlands, and West Germany) and ending with Croatia in 2013, the forced centralization of Europe was a massive and ominous force with which to be reckoned. Until now. On Friday, the people of Great Britain made their voice heard. They no longer want to be a part of the European Union and for good reason. For decades they have sat back and watched the global elite enrich themselves through special trade agreements ostensibly designed to bolster the economy, but in reality grant special treatment to those close to the top. George Soros exposed the dependence of the elite on the EU when he took to fearmongering about rampant financial collapse upon Brexit. - ‘The Unthinkable Is Happening’: Italy Demands EU Reform, Warns Over Full Collapse
Italian ministers warned Saturday that the European Union must change direction or risk collapse after Britain’s vote to leave the bloc. “The unthinkable is happening,” Finance Minister Pier Carlo Padoan said. “A double reaction to Brexit is under way, one financial, one political. The financial one, at least until now, is limited. I am more worried about the political one. “There is a cocktail of factors that can lead to various outcomes, including a further push towards disintegration.” - Barclays, RBS Hit Post-Crisis Lows on Banks’ Brexit Plunge
Barclays Plc and Royal Bank of Scotland Group Plc had their shares halted as the banks plunged to the lowest level since the financial crisis, accelerating declines after the U.K.’s vote to leave the European Union sparked fears about political and economic risks. Barclays shares fell more than 17 percent for the second straight day, and the stock has now lost more than half its value in the last 12 months. RBS plummeted as much as 26 percent in London trading, reaching the lowest levels since January 2009 amid the lender’s taxpayer bailout. Trading in both banks was halted earlier in the day amid the rapid drops. - European Banks Have Their Worst Two Day Stretch EVER As The Global Financial Crisis Intensifies
Over the last two trading days, European banks have lost 23 percent of their value. Let that number sink it for a bit. In just a two day stretch, nearly a quarter of the value of all European banks has been wiped out. I warned you that the Brexit vote “could change everything“, and that is precisely what has happened. Meanwhile, the Dow was down another 260 points on Monday as U.S. markets continue to be shaken as well. Overall, approximately three trillion dollars of global stock market wealth has been lost over the last two trading days. That is an all-time record, and any doubt that we have entered a new global financial crisis has now been completely eliminated. But of course the biggest news on Monday was what happened to European banks. The Brexit vote has caused financial carnage for those institutions unlike anything that we have ever seen before. - FREE FOOD AND MONEY- Total Self Sufficiency
Free Living 101’. Shows you everything you need to survive within 1 mile of where you live. Garry Tibbo shows you how to live on the wild plants in your neighbourhood, make house payments without a job, heal any health condition and be truly self-sufficient no matter what. This amazing highly inspiring 6 disc set is a two day workshop that will show you how to never worry about the economy or your health ever again. This is true freedom. It’s great for people in northern climates where it snows in winter. This is mandatory information for these times! This DVD is available from: https://www.lindseywilliams.net/free-living-101 - We Just Witnessed The Greatest One Day Global Stock Market Loss In World History
More stock market wealth was lost on Friday than on any other day in world history. As you will see below, global investors lost two trillion dollars on the day following the Brexit vote. And remember, this is on top of the trillions that global investors have already lost over the past 12 months. It is important to understand that the Brexit vote was not the beginning of a new crisis – it has simply accelerated a global financial crisis that started last year and that was already in the process of unfolding. As I noted on Friday, we have been waiting for “the next Lehman Brothers moment” that would really unleash fear and panic globally, and now we have it. The next six months should be absolutely fascinating to watch. According to CNBC, the total amount of money lost on global stock markets on Friday surpassed anything that we had ever seen before, and that includes the darkest days of the financial crisis of 2008. - Six More Countries Want Referendums to Exit EU
Brussels simply went too far. They crossed the line after moving from an economic union to a political subordinate of Europe. Now, six more countries want to hold referendums to exit the EU; France, the Netherlands, Italy, Austria, Finland, and Hungary all could leave. With Hollande’s approval rating at about 11%, Merkel is lucky she is not tarred & feathered. Front National leader Marine Le Pen has pledged to hold a French referendum. If she emerges victorious in next year’s presidential elections, that means the next major player in the EU after Germany is out and there goes the EU. - Time for a bit of project cheer? Despite Brexit turmoil, the FTSE 100 closes UP 158 points and the pound has a steady day against the dollar – but experts warn of a ‘dead cat bounce'
The markets rallied today after the pound dropped to a 31-year low against the US dollar and £40billion was wiped off the FTSE 100. The FTSE 100 closed 158 points higher as initial jitters triggered caused by the Brexit vote calmed. Sterling had a relatively calm and is currently trading against the dollar at 1.33 – higher than where it was after the pound hit its lowest level since 1985 yesterday. However, experts dubbed the increases a ‘dead cat bounce'. This is a recovery in share prices after a substantial fall, only caused by traders buying to cover their positions when the markets reach new lows. - BREXIT BODY COUNT — Bill Holter
BREXIT: Does it signal a tidal wave of rising sentiment against the international criminal banking syndicate and its Globalist agenda, or is it merely a Trojan horse designed by the Rothschild banksters to further ensnare humanity in their NWO spider’s web? After all, Rothschild puppet George Soros was very publicly shorting stocks and going long gold in the months leading up to the Brexit vote. Did he know something the rest of us didn’t? Regardless, Bill Holter says there are dead bodies that need to be carried out as the result of the global financial chaos we saw on Friday, June 24th – and we will know a lot more about who those bodies belong to, on Monday morning. - It's official—Brexit's ‘Black Friday' sell-off was the worst ever at $2 trillion
The U.K.'s referendum to leave the European Union was a costly decision in more ways than one. Worldwide markets hemorrhaged more than $2 trillion in paper wealth on Friday, according to data from S&P Global, the worst on record. For context, that figure eclipsed the whipsaw trading sessions of the 2008 financial crisis, according to S&P analyst Howard Silverblatt. The prior one day sell-off record was $1.9 trillion back in September of 2008, Silverblatt noted. According to S&P's Broad Market Index, combined market capitalization is currently worth nearly $42 trillion. As bourses sold off from Asia to the U.S., the fallout from Brexit culminated in the Dow Jones Industrial Average racking up a 600 point loss. Bloomberg's Billionaires Index noted that the world's 400 wealthiest investors lost a combined $127 billion in Friday's market downturn. - What Billionaire Investors Are Doing with Gold While You're Not Watching
With each passing day, systemic risks in the financial system become greater. Smart money insiders and billionaire investors are taking note – and taking defensive actions. Mega-billionaire Carl Icahn, whose long-term track record is unrivaled, recently warned that “there will be a day of reckoning unless we get fiscal stimulus.” Icahn’s hedge fund is betting on a day of reckoning scenario. He has gone 150% net short the stock market while holding commodity-related positions to the long side. - UK votes to leave European Union: Period of uncertainty expected – Investors rush to gold
In a stunning decision that is reverberating around the world, the people of the United Kingdom have decided to leave the European Union, the 28 member bloc and market of some 500 million that has its roots in the aftermath of the Second World War. Even more shocking perhaps is the margin of victory, the “Leave” campaign winning by 52 percent over the “Remain” side’s 48 percent. More than 17.4 million British people voted in the June 23rd referendum to exit the EU, compared to 16.1 million who cast ballots to stay the course. - Alan Greenspan says British break from EU ‘is just the tip of the iceberg'
Former Fed Chairman Alan Greenspan told CNBC on Friday the U.K. vote to leave the European Union ushers in a period that's even worse than the darkest days of October 1987. Britons voted by 51.9 percent to quit the 28-country union, shocking markets that had priced in a win for the remain camp. “This is the worst period I recall since I've been in public service,” Greenspan said on “Squawk on the Street.” “There's nothing like it, including the crisis — remember October the 19th, 1987, when the Dow went down by a record amount, 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect which is not easy to go away.” - “The Global Economy Can No Longer Rely On Debt” – BIS Warns Central Bank Actions “Have Started To Backfire”
It's late June which means it is time for the annual warning by the Bank of International Settlements about the growing futility of monetary policy and central bank impotence. Exactly one years ago, the BIS asked “Of What Use Is A Gun With No Bullets?”, in which the BIS said central banks are defenseless against the coming crisis. Well, it underestimated just how far the central banking “magic people” are willing to reach inside their “magic bag of tricks” to preserve the status quo: to be sure nobody at the time expected the ECB to begin buying not just corporate bonds but junk bonds too. - UK Loses AAA Credit Rating After Brexit Vote
Ratings agency Standard and Poor's has stripped the UK of its top AAA credit rating after the vote to leave the European Union. “In our opinion, this outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK,” a statement from the agency read. “The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence,” S&P said. The loss of the last remaining “AAA” rating represents a fresh blow to Britain's economic standing after the referendum. - As the west Brexits, Russia and China sign pacts to ‘Strengthen Global Strategic Stability'
Chinese President Xi Jinping and his Russian counterpart Vladimir Putin promosed ever-closer cooperation and oversaw a series of deals on saturday, as the two countries deepen ties in the face of growing tensions with the west. In what was Putin’s fourth trip to China since Xi became president in 2013, the two men stressed their shared outlook which mirrors the countries’ converging trade, investment and geopolitical interests. “Russia and China stick to points of view which are very close to each other or are almost the same in the international arena,” Putin said. The Russian leader added that the two had discussed “strengthening together the fight against international terrorism”, the nuclear issue on the Korean peninsula, Syria, and stability in the South China Sea. Russia and China have been brought together by mutual geopolitical concerns, among them wariness of the United States. - END OF THE EU? Germany warns FIVE more countries could leave Europe after Brexit
FIVE European countries may seek to follow Britain’s lead in leaving the EU in a Brexit domino effect, Germany has warned. France, the Netherlands, Austria, Finland and Hungary could leave. Front National leader Marine Le Pen has pledged to hold a French referendum if she emerges victorious in next year's presidential elections. While for the past two months a Nexit has been on the cards after Dutch voters overwhelmingly rejected a Ukraine-European Union treaty. Details of Berlin's concerns were outlined in a finance ministry strategy document. - How a secretive elite created the EU to build a world government
As the debate over the forthcoming EU referendum gears up, it would be wise perhaps to remember how Britain was led into membership in the first place. It seems to me that most people have little idea why one of the victors of the Second World War should have become almost desperate to join this “club”. That's a shame, because answering that question is key to understanding why the EU has gone so wrong. Most students seem to think that Britain was in dire economic straits, and that the European Economic Community – as it was then called – provided an economic engine which could revitalise our economy. Others seem to believe that after the Second World War Britain needed to recast her geopolitical position away from empire, and towards a more realistic one at the heart of Europe. Neither of these arguments, however, makes any sense at all. - Brexit vote, UK political confusion keep world markets on edge
Britain's vote to leave the European Union continued to reverberate through financial markets, with the pound falling to its lowest level in 31 years, despite government attempts to relieve some of the confusion about the political and economic outlook. UK finance minister George Osborne said early Monday that the British economy was strong enough to cope with the market volatility caused by last week's “Brexit” referendum which has resulted in the biggest blow since World War Two to the European goal of forging greater unity. “Our economy is about as strong as it could be to confront the challenge our country now faces,” Osborne told reporters. - This is what the City and Wall Street are saying about Brexit
Britain created history on Thursday night, voting to become the first country to leave the European Union, with a 52% to 48% split in votes to get out of the EU. Market reaction was insane, with assets across the board getting crushed. The pound saw its biggest single-day drop in history, European and US banking stocks crashed lower, and safe haven assets like gold took off upwards. Soon after the vote was confirmed, the Bank of England announced that it is “ready to provide more than £250bn of additional funds” to the UK's financial system. Simply put, Brexit totally freaked participants in the global financial system out. - Brexit vote wipes nearly 100 billion pounds off FTSE in two days; banks slump
Britain's top share index extended the previous session's steep losses on Monday as the country's vote last week to leave the European Union hurled it into political and economic uncertainty, hitting banks, housebuilders and airlines hard. Some investors took refuge in firms producing gold, seen as a safe-haven asset, with Fresnillo (FRES.L) closing up 7 percent after hitting a three-year high and Randgold Resources (RRS.L) gaining 9 percent. The FTSE 100 .FTSE ended 2.6 percent lower at 5,982.20 points, taking total losses to 5.6 percent in two sessions and wiping off nearly 100 billion pounds since the referendum results early on Friday. Shares in easyJet (EZJ.L) recorded their biggest one-day percentage drop in 12 years. - Nigel Farage: UK heading for recession regardless of Brexit
Nigel Farage has said Britain is progressing towards a “mild” recession – but insisted it was not because the UK had voted to leave the European Union. In the wake of the shock EU referendum results, hundreds of billions were wiped off the value of global stocks and the pound plunged to its lowest level against the dollar in more than 30 years. But the Ukip leader told the Sunday Telegraph: “There’s nothing new here. “I think we are going into a mild recession anyway, completely regardless of Brexit. “Our growth forecasts are down. Our public sector borrowing is still not under control at all and everyone forgets that sterling is in a bear market, declining since July 2014.” - The magic number 7: Brexit collapse falls exactly on Shemitah date
In 2014, Christine Lagarde gave a speech on “the magic number 7.” It, along with work by Jonathan Cahn, led us to the Shemitah seven-year cycle and the Jubilee year, which the globalist elites are well aware of. What we’ve discovered since is that there is even more to the “magic number 7” than just years… it appears to correlate right down to months, weeks and days. The last major market crash occurred on September 29, 2008. On that day, the Dow Jones fell 777 points, of all numbers…. its biggest one day point drop ever. On Friday, in the aftermath of Brexit, the Dow fell over 600 points. What’s interesting about Friday’s date? It was 7 years, 7 months, 7 weeks and 7 days since September 29, 2008. And what a day Friday, June 24th was! - They Are Putting Armed Guards On Food Trucks In Venezuela
We are watching what happens when the economy of a developed nation totally implodes. Just a few years ago, Venezuela was the wealthiest nation in all of South America, and they still have more proven oil reserves than anyone else on the entire planet including Saudi Arabia. But now people down there are so hungry and so desperate that some of them are actually hunting dogs, cats and pigeons for food. Just a few days ago, I gave a talk down at Morningside during which I warned that someday we would see armed guards on food trucks in America. After that talk was done, I went back up to my room and I came across a New York Times article which had been republished by MSN that explained that this exact thing is already happening down in Venezuela. - Despite the Vote, the Odds Are Against Britain Leaving the EU — Paul Craig Roberts
The Brexit vote shows that a majority of the British voters understand that the UK government represents interests other than the interests of the British people. As difficult as the British know it is to hold their own government to account, they understand they have no prospect whatsoever of holding the EU government to account. During their time under the EU, the British have been reminded of historical times when law was the word of the sovereign. The propagandists who comprise the Western political and media establishments succeeded in keeping the real issues out of public discussion and presenting the leave vote as racism. However, enough of the British people resisted the brainwashing and controlled debate to grasp the real issues: sovereignty, accountable government, financial independence, freedom from involvement in Washington’s wars and conflict with Russia. - After Brexit Shocker There Is Trouble At The Comex And The Global Financial System Is On The Brink
In the wake of the stunning Brexit outcome in Britain there is trouble at the Comex as the price of gold surges and the global financial system is now on the brink. This is why emergency central bank intervention is taking place. Victor Sperandeo: “Right now I would be a buyer of the FTSE and a buyer of the British pound. I would also stay long gold at this point. I have 85 percent of my pension fund long gold and I would be a buyer on any dips. What’s more important is that there is virtually no gold at the Comex. If the longs ask for delivery and they can’t deliver, then there will be a force majeure. Meaning, they will settle for cash and that will send the price of gold much, much higher. - EU Debate – Oxford Union. Daniel Hannan MEP
Superb speech on Brexit. Daniel Hannan is a European Parliament member, who subsequently has now lost his job given the outcome of the referendum. - People Around The Globe Are Still Stunned But This Is Really Going To Shock The World
On the heel of an absolutely wild trading week where we witnessed history being made, people around the globe are still stunned but this is really going to shock the world. Stephen Leeb: “A lot of things are uncertain after the Brexit vote. But there’s one thing that is certain: it sure hasn’t hurt the case for owning gold and silver. It goes beyond the mere fact that the added global uncertainty will in itself favor precious metals. If you look behind the shocking outcome of the referendum to see the frustrations that led so many in Britain to pull the lever to leave the EU, it suggests further reasons that gold and silver will benefit. At their core, those frustrations reflect a long period in which lack of real growth meant shrinking horizons and contracting lives, a state of affairs as true in the U.S. as in Britain for those outside the rarefied elite of top earners. - Energy Expert Thinks U.S. Government Should Cut Its Strategic Oil Reserves In Half
An energy expert thinks America’s massive oil reserves should be sold off, maybe as much as half — if not all of it. In a Wednesday interview with NPR, the global head of energy analysis for Oil Price Information Service, Tom Kloza said, “You might as well be wearing bell-bottoms as having 690 million barrels in storage,” indicating his belief that storing so much oil is an antiquated policy. Kloza also said that since U.S. oil production is on the rise and imports are declining, the need for such massive reserves is antiquated. The Strategic Petroleum Reserve (SPR) was created in 1975 in response to the Arab oil embargo, which lead to a spike in oil prices and even saw Congress call for increasing fuel standards for cars. - BRICS react cautiously to Brexit
After Britain voted to leave the 28-member European Union, members of the BRICS reacted with caution on Friday. China’s Foreign Ministry said Britain’s choice to exit the EU will have significant ramifications, although China is still keen to strengthen its ties with the UK. “The impact will be on all levels, not only on China-Britain relations. As to what kind of impact there will be, I believe all sides will calmly and conscientiously assess this,” Hua Chunying, spokesperson of the Foreign Ministry said in Beijing. “China supports the European integration process and would like to see Europe playing a positive role in international affairs. We have full confidence in the prospects for the development of China-EU ties,” she added. Beijing’s cautionary note came as other euro-sceptic leaders in the European Union called for their countries to follow suit. - The Amount Of Stuff Being Bought, Sold And Shipped Around The U.S. Hits The Lowest Level In 6 Years
When less stuff is being bought, sold and shipped around the country with each passing month, how in the world can the U.S. economy be in “good shape”? Unlike official government statistics which are often based largely on projections, assumptions and numbers seemingly made up out of thin air, the Cass Freight index is based on real transactions conducted by real shipping companies. And what the Cass Freight Index is telling us about the state of the U.S. economy in 2016 lines up perfectly with all of the other statistics that are clearly indicating that we have now shifted into recession mode. - Black Friday: Shocking Brexit Vote Result Causes The 9th Largest Stock Market Crash In U.S. History
Has the next Lehman Brothers moment arrived? Late Thursday night we learned that the British people had voted to leave the European Union, and this could be the “trigger event” that unleashes great financial panic all over the planet. Of course stocks have already been crashing all over the globe over the past year, but up until now we had not seen the kind of stark fear that the crash of 2008 created following the collapse of Lehman Brothers. The British people are certainly to be congratulated for choosing to leave the tyrannical EU, and if I could have voted I would have voted to “leave” as well. But just as I warned 10 days ago, choosing to leave will “throw the entire continent into a state of economic and financial chaos”. And “Black Friday” was just the beginning – the pain from this event is going to continue to be felt for months to come. The shocking outcome of the Brexit vote caught financial markets completely off guard, and the carnage that we witnessed on Friday was absolutely staggering. - The Real Brexit “Catastrophe”: World's 400 Richest People Lose $127 Billion
For all the scaremongering and threats of an imminent financial apocalypse should Brexit win, including dire forecasts from the likes of George Soros, the Bank of England, David Cameron (who even invoked war), and even Jacob Rothschild, something “unexpected” happened yesterday: the UK was the best performing European market following the Brexit outcome. This outcome was just as we expected three days ago for reasons that we penned in “Is Soros Wrong”, where we said “in a world in which central banks rush to devalue their currency at any means necessary just to gain a modest competitive advantage in global trade wars, a GBP collapse is precisely what the BOE should want, if it means kickstarting the UK economy.” On Friday, the market started to price it in too, and in the process revealed that the biggest sovereign losers from Brexit will not be the UK but Europe. - Special Report on Brexit/Fantasy Meets Reality
Do not believe the mainstream media that the Brexit vote crashed the global markets. The real reason why all markets tanked is record debt levels around the world that will never be paid back. Fantasy has just met reality in the global markets, and the carnage is far from over. The fantasy of unpayable debt expanding forever is now beginning to be realized by the central banks that have been propping up the global economy since the 2008 meltdown. The central banks cannot and will not be able to stop this unfolding crash. If you are not prepared, there is little time left. Bo Polny from Gold2020Forecast.com is on for the Early Sunday Release, and he says although there may be a bounce in the stock market, and pull back in gold and silver prices, the overarching direction for stocks is down, and the overarching direction for physical gold and silver prices are up. I say the bonds which are considered an “asset” will turn into huge liabilities, and gold and silver will reclaim their proper place as money and a store of value. Physical gold and silver will be considered true assets once again. Please get ready for some very rough riding in the economy. - Massive Defaults & Dramatic Increase in Gold-Nick Barisheff
Gold expert Nick Barisheff wrote a book titled “$10,000 Gold” in 2013. According to Barisheff, that number is even more possible today. Barisheff contends, “It’s hard to believe when I wrote the book three years ago, and I talked about the issues that would lead to $10,000 gold are still there and have gotten much worse. None of the issues have been solved, and now we are in multiple bubbles, a lot of them surrounding debt, and it keeps growing all over the world, and that’s the main correlation to the price of gold.” - Germany Says “We Won't Let Anyone Take Europe From Us”
Yesterday we said that in the historic fallout and unprecedented confusion over Brexit, so far only one sure winner has emerged – namely Russia, where Vladimir Putin is watching the slow-motion collapse of this latest artifical aggregation of Europen states (a quick search of failed attempts at European integration results in tens of pages of results) with great interest and willingness to pounce at any opportunity – even as all of Europe is a loser, and nobody more so than Germany, whose chancellor Merkel is now watching her legacy go down in flames as first the UK, then France (National Front), Italy (Five Star Movement), Denmark (Danish People’s Party), and Holland (Freedom Party) have all called for either a EU referendum of their own or a renegotiation of their country’s EU membership. As would be expected, the more worried and desperate Germany gets, the more ridiculous things Germany is apt to say. Case in point is what German Foreign Minister Frank-Walter Steinmeier said earlier today, when he tried to reassure onlookers that the EU would weather the shock of the British vote to leave the union as he convened crisis talks. - George Soros: “Brexit Makes EU Disintegration Irreversible”
Just four days ago, the “big guns” when George Soros wrote a Guardian op-ed titled “The Brexit crash will make all of you poorer – be warned” in which he said that “as opinion polls on the referendum result fluctuate, I want to offer a clear set of facts, based on my six decades of experience in financial markets, to help voters understand the very real consequences of a vote to leave the EU.” We promptly countered that Soros' set of “facts” may be clouded by his far greater equity stake in interests around Europe, and the globe, which would be drastically impacted by not only a Brexit, but by a European Union which is suddenly on the rocks. That's precisely what happened when, as we wrote earlier, the world’s 400 richest people lost $127.4 billion Friday following the Brexit vote. Soros was among them. - Fake Jobs Plague the U.S. Economy
“When it becomes serious, you have to lie.” — Jean-Claude Junker, President of the European Commission. Normally, I would not bring a European politician into a discussion about the U.S. economy. But in this case, European Commission President Jean-Claude Junker has “let the cat out of the bag.” In an unguarded moment, Junker let slip the working principle that guides politicians everywhere. Think about it. - Why Wal-Mart can NOT afford to pay workers a $15 minimum wage
Can large corporations afford a $15 minimum wage better than small businesses? Despite the fact that roughly half of the minimum wage workforce is employed at businesses with fewer than 100 employees, corporations such as Wal-Mart have been used as the poster child in the case for a much higher wage floor. This claim rests on three talking points: These companies sell billions of dollars of retail goods or food products; their CEOs are typically paid a lot of money; and the higher pay will help get their employees off government programs. None of these justifications survive careful scrutiny. - IRS admits to illegally seizing bank accounts; agrees to give the money back
It's the stuff of libertarian dreams. The IRS admits that it wrongfully took money from innocent citizens, and it gives the money back. This is actually happening to victims of a little-known form of civil asset forfeiture carried out by the IRS on the premise of “structuring” violations. In case you didn't know, depositing or withdrawing just under $10,000 from your bank account multiple times is viewed as suspicious and possibly criminal activity. In a victory for lawmakers working to make it harder for the government to take property from innocent Americans, the Internal Revenue Service plans to give people who have had money seized over the last six years the chance to petition to get their money back, The Daily Signal has learned. According to a GOP source, the IRS told the House Ways and Means Oversight Subcommittee that it will send letters to everyone the agency seized money from for alleged structuring violations, which involves making consistent cash transactions of just under $10,000 to avoid reporting requirements, starting in October 2009. One petition has already been granted, and others are likely to follow. - Europe's robots to become ‘electronic persons' under draft plan
Europe's growing army of robot workers could be classed as “electronic persons” and their owners liable to paying social security for them if the European Union adopts a draft plan to address the realities of a new industrial revolution. Robots are being deployed in ever-greater numbers in factories and also taking on tasks such as personal care or surgery, raising fears over unemployment, wealth inequality and alienation. Their growing intelligence, pervasiveness and autonomy requires rethinking everything from taxation to legal liability, a draft European Parliament motion, dated May 31, suggests. - Asian millionaires now the wealthiest in the world
Your Asian counterparts are now wealthier than you are. Asian millionaires now control more wealth than their peers in North America, Europe and other regions, according to a new World Wealth Report from Capgemini, a consulting group. Asian millionaires saw their wealth jump by 9.9% in 2015, while poor performance in the equity markets in the United States and Canada slowed growth in North America to a sluggish 2.3% last year. Latin American millionaires, meanwhile, suffered a decline in net worth of 3.7%, driven by political volatility and a turbulent stock market in Brazil. Europe's growth was steady, with a 4.8% increase led by Spain and the Netherlands. - New Home Sales Plunge Most In 8 Months Following Sharp Downward Revisions; Median Home Price Tumbles
Despite exuberance in existing home sales, new home sales just printed 551k SAAR – missing expectations for the first time since Oct 2015 – sliding by the most since Sept 2015. With the last 3 months of exuberant increases – to 8 year highs – now revised drastically lower; and median prices tumbling to the lowest since June 2015, the picture of the US housing recovery is considerably less rosy than before… time for a rate-hike? This is what we said last month when new home sales soared to 8 year highs… Here is what drove the overall surge: a clearly “goalseeked” number resulting from a massive surge in Northeast sales, one which will be promptly revised lower next month. - With a British adieu to EU, it's farewell to a Fed rate hike for now
The U.S. Federal Reserve, already undecided on when next to raise interest rates, now has one more reason to wait: Britain's vote on Thursday to leave the European Union. Not that the Fed needed another reason. Weaker-than-expected growth in U.S. jobs in recent months had already forced U.S. central bankers to put off a rate hike at their meeting last week. - U.S. Durable-Goods Orders Fell 2.2% in May
American businesses were pulling back on purchases of new equipment even before the U.K. vote to exit the European Union rocked global financial markets, a sign of corporate caution that will likely continue to act as a brake on the economy. Overall U.S. economic growth picked up in the second quarter, boosted by stronger consumer spending. But surprisingly weak business investment has remained a concern for Federal Reserve Chairwoman Janet Yellen and others. That weakness could be exacerbated in the coming months by “Brexit”-fueled uncertainty and dollar strength. “ ‘Brexit’ will not likely help matters,” said Steve Blitz, chief economist at M Science LLC, in a note to clients. - Oi Bankruptcy Causes Shockwaves in Brazil’s Financial System
The bankruptcy filing of Oi SA, the largest in Brazil’s history, is reverberating through the nation’s strained financial industry as investors tally the potential hit to creditors. Even as Egyptian billionaire Naguib Sawiris said he’s prepared to invest in the wireless carrier, Monday’s bankruptcy filing is likely to leave Banco do Brasil SA, Itau Unibanco Holding SA and others with steep losses on their holdings of Oi debt and trigger payments on $14 billion of derivatives contracts that are designed to pay out in an event of a default. Shares of Banco do Brasil slumped 4.5 percent. - IMF warns the US over high poverty
The US has been warned about its high poverty rate in the International Monetary Fund's annual assessment of the economy. The fund said about one in seven people were living in poverty and that it needed to be tackled urgently. It recommended raising the minimum wage and offering paid maternity leave to women to encourage them to work. The report also cut the country's growth forecast for 2016 to 2.2% from a previous prediction of 2.4%. Slower global growth and weaker consumer spending were blamed. US economic growth slowed to an annual pace of 0.5% during the first three months of the year, down sharply from 1.4% in the last three months of 2015. - Famous technical analyst now predicting crash during jubilee time period
The flurry of banksters, ex-banksters (Alan Greenspan), insiders (Soros) and billionaires all warning we are on the edge of collapse now continues with a famous technical analyst. In an interview with Business Insider, Sandy Jadeja just predicted market crashes in late August, late September and late October. Jadeja is a famous technical analyst and chief market strategist at Core Spreads. He previously made no less than four accurate predictions of market crashes based on his charts and technical analysis. His latest dates are right around the Jubilee year end-date on October 2nd, 2016. - China debt load reaches record high as risk to economy mounts
China’s total debt rose to a record 237 per cent of gross domestic product in the first quarter, far above emerging-market counterparts, raising the risk of a financial crisis or a prolonged slowdown in growth, economists warn. Beijing has turned to massive lending to boost economic growth, bringing total net debt to Rmb163tn ($25tn) at the end of March, including both domestic and foreign borrowing, according to Financial Times calculations. Such levels of debt are much higher as a proportion of national income than in other developing economies, although they are comparable to levels in the US and the eurozone. - US Federal Reserve should let inflation overshoot targets, IMF recommends
US policymakers should allow inflation to rise above official targets, the International Monetary Fund has recommended, as it warned that the risks of deflation still loom over the world’s largest economy. The fund has said that the Federal Reserve should “accept some modest, temporary overshooting” of its inflation goal, allowing price growth to exceed 2pc for a period. IMF staff said that this would “provide valuable insurance against the risk of disinflation”, allowing price growth to wane, and fall back towards negative territory. - Trolling for War With Russia
Some 50 State Department officials have signed a memo calling on President Obama to launch air and missile strikes on the Damascus regime of Bashar Assad. A “judicious use of stand-off and air weapons,” they claim, “would undergird and drive a more focused and hard-nosed U.S.-led diplomatic process.” In brief, to strengthen the hand of our diplomats and show we mean business, we should start bombing and killing Syrian soldiers. - Phantom Retail Job Growth And The Obamacare Hours Shuffle
How is it that employment in the retail sector increased by 253,000 jobs since last August, yet total aggregate hours worked has not budged an inch? The number of U.S. workers clocking just above 30 hours has fallen to a record low relative to those with work hours just below ObamaCare’s new full-time threshold. The Obamacare shift from defining full-time employment for health-care benefits from 32 hours to 30 hours is to blame. As hours worked declines, reported employment rises. I have been harping about this for years. - Have U.S. Weather Patterns Changed Permanently? This Week Record High Temps Scorch The Southwest
This week we are going to see “life threatening” heat all across the southwest United States. In southern California, temperatures will top triple digits in many areas on Monday, and the forecast is for the mercury to reach an astounding 121 degrees in Palm Springs. Further inland, it is being projected that Phoenix and Las Vegas could both experience their highest temperatures ever early this week. Summer is just beginning and we are literally seeing things take place that we have never seen happen before. Just a few weeks ago, I wrote an article about how the weather seems to be going crazy all over America. Is this just a temporary phenomenon or have weather patterns in the United States changed permanently? Most people know that the hottest place in America is Death Valley, California. The record high for Death Valley during the month of June is 129 degrees, and it is being reported that even that record could fall this week. - What the Heck’s Going on in Global Stocks?
In Japan, the Eurozone, Denmark, Sweden, and Switzerland, where central banks, in their infinite wisdom, have imposed negative interest rates supplemented with harebrained bond-buying schemes, bond prices have soared to where many government bonds and even some corporate bonds are trading with negative yields. Given this amount of liquidity and the free-for-all in corporate borrowing, stock markets in those countries should be booming, which had been part of the plan. Alas, they’ve gotten hammered: almost all NIRP countries’ major stock market indices have gotten shoved, some deeply, into a bear market. - Day of Reckoning for Banks in Italy, Spain, & Portugal Kicked Down the Road (Elegantly) for 18 Months
Senior bankers in Spain and Italy can breathe a collective sigh of relief after Europe’s finance and economic ministers decided on Friday to postpone, for at least 18 months, a decision on setting a limit on the government bonds some banks can hold as eligible “risk-free” capital. It was one of four things keeping Spanish senior bankers awake at night. Now, they can sleep a little sounder. The initiative, initially proposed by the German government and supported by other fiscally hawkish governments such as Finland and the Netherlands, was intended to limit the purchase of public debt by banks, in order to break the vicious cycle of co-dependence that now exists between sovereign and bank risk.
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Latest News Articles – June 23, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From June 17, 2016 to June 23, 2016:
- Gold Prices: This Catalyst to Send Gold to $2,000?
Negative interest rates (which mean you are paying a bank or government to hold your money instead of them paying you) are coming to North America and with that, gold prices could soar. So far, 2016 has already been a banner year for gold prices. In fact, gold has been the best-performing investment this year. But I think the “party is only getting started” for gold prices. Below is a chart of the 10-year U.S. Treasury. From the chart, you can easily see the yield on 10-year U.S. Treasuries has been moving in an almost perfect downward trend since 2006—that’s 10 years ago. - Share-Buyback Announcements Plunge, Stocks Risk Getting Clocked
In 2015, S&P 500 companies bought back $569 billion of their own shares, down just a smidgen from $572 billion in 2014, according to FactSet. That’s a combined $1.14 trillion in stock repurchases. With the S&P 500 market capitalization at $18.8 trillion currently, corporate buybacks over the past two years have mopped up about 6% of the total float in dollar terms. And this has been happening year after year with increasing vehemence since 2010. While some sectors already cut back in 2015, buybacks soared 44% in the Industrial sector and 26% in the Consumer Discretionary sector. Companies buying back their own shares act purposefully as the relentless bid, with the sole goal of driving up share prices. They want to buy high! And it works. - Elizabeth Warren’s War on the Poor
There is no American politician more closely associated with “progressive” economic causes than Massachusetts Senator Elizabeth Warren. The senator is widely regarded by the political Left as an expert on financial issues, is a self-professed champion of the “working poor,” and is a proud, finger-wagging chastiser of the 1 percent and Wall Street. Her cause is to lift up the least powerful and protect them from the most powerful. She appears to genuinely believe in this cause, and has made several policy proposals that she believes will serve it. Because of her position and the public’s association of the senator with this cause, it is assumed that the policies she proposes will in fact serve it, and that anyone who supports the same causes should get on board and support her proposed policies. - End in Sight for Alaska’s Oil-Based Economy?
Alaska has long been one of the few U.S. states without an income tax. Thanks to its incredible bounty of natural resources, the state had more than enough cash coming in through oil company taxes and especially Prudhoe Bay production. All of that is starting to change. After a 40 year oil boom that transformed Alaska from a frozen tundra into one of the richest states in the country, the oil price crash is bringing reality back to bear. Alaska’s problems go deeper than the current oil price collapse though. Simply put, the state is getting long in the tooth – at least as far as its productive assets go. The Prudhoe Bay Oil field, once the largest such field in North America, is starting to reach the end of its life. In 1985, the Prudhoe Bay field was pumping 2 million barrels per day – roughly a quarter of the total U.S. output. Today it is pumping 500,000 barrels a day. That’s leaving the 800 mile Trans-Alaska pipeline seriously under-utilized. - US Freight Drops to Worst May since 2010
“May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” predicted Rosalyn Wilson at Cass Transportation a month ago. It has now come to pass – only worse. Freight shipments by truck and rail in the US, excluding commodities, fell 5.8% in May 2016 from the already anemic levels in May 2015, and 7.0% from May 2014, according to the Cass Freight Index, released today. It was the worst May since 2010. “This year we have failed to see the robust growth in shipments that we expect to see this time of year,” Wilson lamented. - The man responsible for Germany's hyperinflation nightmare has a scary lesson for modern economics
Every now and then it helps to dig through the past to think about what's going on in the present. So let's rewind back to 1920s Germany. Back then the country was stuck in a less-than-ideal economic situation after the suspension of the gold standard and Kaiser Wilhelm II's failure to pass an income tax to help pay for World War I. To deal with the huge debts left over after the Great War, the president of the country's central bank, Rudolf von Havenstein, printed up a ton of money. But that idea backfired. It led to skyrocketing hyperinflation, economic breakdown, weaker institutions, and a destabilization of German politics. - Central bank titans warn of Brexit tremors as global recession fears surface
The two most powerful people in central banking have given their strongest warning yet on the impact of a Brexit vote, as top US bank Morgan Stanley warned that a British decision to leave could push the world towards recession. Janet Yellen, chair of the US Federal Reserve, and Mario Draghi, the European Central Bank president, have warned that a vote for Brexit could have deleterious effects for the global economy. With only two days to go before Britons head to the polls, Ms Yellen warned that a withdrawal from the EU “could have significant economic repercussions”, during her testimony to the US Senate banking committee. - There's No Other Way to Say It: Minimum Wage Laws Are Racist
Unfortunately, the agenda of early twentieth century leftists has proven effective; minimum wage laws are still bearing racist fruit today. Specifically, low-skilled minorities are being priced out of the job market. As small business owners are forced to pay a higher wage than their employees produce, employers are often forced to cut staff. A story published by BET in 2011 highlighted the negative effect that minimum wage hikes have on black teens. Another report, published by the American Legislative Exchange Council, unpacks several studies on the impact of minimum wage hikes. ALEC reports, “The bottom line is that someone must pay for the costs associated with an increased minimum wage. Often, because a business cannot pay these costs, they are paid for by the individuals the minimum wage is intended to help — low-skilled, undereducated individuals – as they lose out on job opportunities.” Later, the report breaks it down even further and delivers the sobering news that “a 10 percent increase in the minimum wage decreases minority employment by 3.9 percent, with the majority of the burden falling on minority youth whose employment levels will decrease by 6.6 percent.” - Gold and Brexit
Gold is soaring. It should—and a lot—but in my view not for the reason it is. Indeed gold is insurance for uncertain times, a time that Brexit seems to represent. But insurance is an administrative cost — one must minimize its use. Moreover, insuring against Brexit might ironically be equivalent to insuring against a good event. The market believes that Brexit will lead to wealth-destruction (based on its statist views, in which those running our institutions are omniscient, when they actually are quite naive, incompetent, and incapable of understanding the concept of complexity). - ALERT: SentimenTrader Issues Extremely Important Update On The Gold Market
With continued consolidation in the gold and silver markets, below is an extremely important update on the gold market that was just issued by SentimenTrader. From Jason Goepfert at SentimenTrader: “The Optimism Index on gold has moved above 75 for the first time since 2011, a troubling level. That’s especially true since “smart money” commercial hedgers have moved to a near-record net short position against the metal. It suffered a key reversal day as sellers rejected a new 52-week high on June 16, but those one-day patterns have been inconsistent predictors of further weakness. Even so, we consider the market to be high-risk. - Brexit: What Is It About? — Paul Craig Roberts
If you read the presstitute media, Brexit—the referendum tomorrow on the UK’s exit from the EU— is about racism. According to the story line, angry rightwing racists of violent inclinations want to leave the EU to avoid having to accept more dark-skinned immigrants into England. Despite the constant propaganda against exit, polls indicated that more favored leaving the EU than remaining until a female member of Parliament, Jo Cox, was killed by a man that a witness said shouted “Brexit.” Cox was an opponent of leaving the EU. The UK government and presstitute media used Cox’s murder to drive home the propaganda that violent racists were behind Brexit. However, other witnesses gave a different report. The Guardian, which led with the propaganda line, did report later in its account that “Other witnesses said the attack was launched after the MP became involved in an altercation involving two men near where she held her weekly surgery.” Of course, we will never know, because Cox’s murder is too valuable of a weapon against Brexit. - Here's why gold could jump 10% very soon
“Gold is a reliable barometer of risk, and we believe it could rally by up to 10% should the UK vote to leave the EU,” that’s according to a flash research note from HSBC’s chief precious metals analyst James Steel sent to clients today. According to the report, if the UK votes to leave the European Union on June 23, the price of gold could rally by 10% to around $1400 an ounce as investors look to the yellow metal to provide a safe haven in times of uncertainty. What’s more, gold could also benefit from the reluctance of investors to move into sterling or even the euro following a ‘leave’ vote. - Why Janet Ain’t Yellin’ “Higher Interest” Anymore: Jobs Worse than Expected and Far Worse than Reported
In the fall of 2015, I said the Federal Reserve would raise interest rates once in December then would not be able to fly any higher thereafter. The stock market would crash shortly after the Fed pulled up on the interest stick (which it did in what became the worst January in stock-market history), and then the Fed’s hopes of recovery would fade away. I also said that, in spite of a continually degrading economic situation around the world, the Fed would badly want to lift its interest target again in order to prove its recovery had recovered from the first lift. The fact that it would not be able to without stalling the economy completely wouldn’t mean it wouldn’t try. If it did try, however, it would find out in hindsight that any additional pull back on the stick would crash the economy into the dust of the earth. - NY Fed Warns about Booming Subprime Mortgages, now Insured by the Government
The New York Fed just warned about the ticking mortgage subprime time bombs once again being amassed, and what happens to them when home prices decline. But unlike during the last housing bust, a large portion of these time bombs are now guaranteed by the government. Subprime mortgages are what everyone still remembers about the Financial Crisis. They blew up has home prices fell. Folks who thought they were “owners with equity” found out that they were just “renters with debt.” - Anxiety Builds As Money Managers Near Record Long Gold Position
“There’s still a lot of fear out there,” warns one investor as the combination of event risks (e.g. Brexit, Spain, US Election) and the contagious collapse of central bank credibility has asset managers around the world piling into bonds and bullion. With negative rates now de rigeur, global developed market bond yields are pushing record lows as demand for protection from fiat debacles in precious metals (and alternative currencies) has sent money managers long position near Aug 2011's record highs. As Fed credibility collapses (red line – inverted expectations of rate-hike-pace) so Gold (gold line) and global developed market bonds (green line) have soared tick for tick… - Unprecedented Mainstream Media Criticism of Central Banking Bodes Ill for the Larger Economy
There is definitely considerable negativity about central banking in the mainstream media these days. This is surprising, on the one hand, because central banking provides the foundation of the current economic system, worldwide. On the other hand, such negativity may be signaling far worse. Our theory, for years has been that the central banking system is presented as something that is economically positive when, in fact, it is quite negative and responsible for the gradual collapse of Western prosperity. The mainstream media makes no real reference to the state of the West – or the world – when it comes to the larger economy. China is collapsing. The European Union is half-bankrupt. The US is in a kind of depression. But until recently the system that has created this mayhem has been treated as a kind of eternal or natural constant, like the sky or the moon or the sun. Now however, with half the West running on negative interest rates, the cracks cannot be papered over. The recent Bilderberg meetings apparently focused in large part on the economy. Disaster was predicted and preparations were made. In fact, this is how economies and economic systems “evolve.” Out of “chaos,” order. - Switzerland withdraws longstanding application to join EU
The upper house of the Swiss parliament on Wednesday voted to invalidate its 1992 application to join the European Union, backing an earlier decision by the lower house. The vote comes just a week before Britain decides whether to leave the EU in a referendum. Twenty-seven members of the upper house, the Council of States, voted to cancel Switzerland’s longstanding EU application, versus just 13 senators against. Two abstained. In the aftermath of the vote, Switzerland will give formal notice to the EU to consider its application withdrawn, the country’s foreign minister, Didier Burkhalter, was quoted as saying by Neue Zürcher Zeitung. The original motion was introduced by the conservative Swiss People’s Party MP, Lukas Reimann. It had already received overwhelming support from legislators in the lower house of parliament in March, with 126 National Council deputies voting in favor, and 46 against. - Propaganda, Depression And The Greatest Illusionist Of All Time
On the heels of the dollar moving higher and the gold and silver markets getting hit, today one of the greats in the business discusses today’s action, and also included are some questions and answers about the market, precious metals. By Bill Fleckenstein President Of Fleckenstein Capital. The “remain” party continued overnight, with most equity markets rallying about 1%. Naturally, the U.S. stock market joined in, though to a slightly lesser degree, with the indices just fractionally higher through midday. In the afternoon the market strengthened somewhat and with an hour to go it was about 0.3% higher (with the Nasdaq lagging)… - IMF issues warning saying eurozone is ‘weak' and on the brink of collapse – but STILL insists we shouldn't vote out
The eurozone is on the brink of another financial crisis – but leaving the EU would still plunge Britain into recession, the IMF said last night. In its latest controversial intervention in the referendum campaign, the International Monetary Fund said the eurozone was in danger of being torn apart by political tensions. It said that while the single currency bloc had recovered over the past six months, the medium-term future looked ‘weak’ and that it was racked by high unemployment and bad debts. It also said the failure of the EU to tackle the refugee crisis had ‘vividly exposed political fault lines’ which threatened the entire European project. - Credit Suisse CEO Said to Tell Staff Shorts Wrong on Capital
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said hedge funds are wrong to assume that the Swiss lender will have to raise additional capital after the shares touched a fresh all-time low last week, according to two people with knowledge of the matter. The lender’s share price is hurt by “an unusually high level of short positions,” Thiam wrote in a memo to staff last week, the people said, asking not to be identified because the contents are private. While some hedge funds are speculating on another capital increase, partly because of restructuring measures and operational losses, they’re “not correct,” Thiam wrote. - Janet Yellen’s $200-Trillion Debt Problem
The U.S. stock market broke its losing streak on Thursday [and even more so on Monday, ed.]. After five straight losing sessions, the Dow eked out a 92-point gain. The financial media didn’t know what to say about it. So, we ended up with the typical inanities, myths, and claptrap. “Brexit panic may be your big chance to buy the S&P 500,” says a headline at Marketwatch. The article claims investors have pushed down the value of the S&P 500 in fear of a so-called “Brexit.” Next Thursday, in a national referendum, British voters will decide whether to end Britain’s 43-year membership in the European Union. But there are a number of problems with this… First, there has been no big rout in the S&P 500; it’s only slightly below its all-time high. Second, Brexit is a mystery to most U.S. investors, not a cause for alarm. Third, nobody knows which side will win – or what it will mean. Would a Brexit be good for Britain? Would it be bad for stocks? Nobody knows! Meanwhile, the Financial Times focuses on “slowing job growth and risk of Brexit…” - Jim Sinclair-Next Crash Will Look Like Mad Max
Renowned gold and financial expert Jim Sinclair says recent dire predictions from Wall Street icons are more than a warning. They are telegraphing their trading positions. Sinclair explains, “They are preparing for what they believe. They talk their own positions. So, it’s more than a warning. They are telling you exactly what they have done. They are not out to save the man in the street. They are out to make money in a huge short position, probably in over-the-counter derivatives. . . . They’re not looking for a market tic down. They are looking for a market with a character of backing up to an open to an elevator with no elevator there. . . . We’ve got no volume, fake prices, and we’ve got the biggest money in the world short the market. We’ve also got a Fed with no tools, and now we have a Fed whose primary indicator is starting to have a heart attack. . . . When this thing comes down, it’s going to be a free fall.” - Puerto Rico Says Talks Cease on Revised Debt Exchange Offers
Puerto Rico said confidential talks with some bondholders ended without any agreements to reduce its debt as the island edges closer toward what may be its biggest default yet. The disclosure from the commonwealth came 10 days before $2 billion of interest and principal is due on a variety of securities, which Governor Alejandro Garcia Padilla has said the island can’t pay in full. The focus now turns to the U.S. Senate, which may take up a bill next week to establish an oversight board that would restructure Puerto Rico’s $70 billion in debt. “The assumption here has to be simply that everybody thinks they’re going to get a better deal from the oversight board than they are negotiating with each other,” said Phil Fischer, head of municipal research at Bank of America Merrill Lynch in New York. “Everyone is preparing the book for the next trade, and the next trade is with the oversight board.” - Solving Italy's $408 Billion Bad Loan Problem 30 Cents At a Time
It will only cost 30 cents to solve Italy's bad debt problem — 30 cents in every euro of the country's 360 billion-euro ($408 billion) pile of loans past due, that is. That's the difference between what Italian banks think their non-performing loans are worth and what investors are willing to pay for them. Reconciling these disparate valuations is key to clearing the gridlock in the European Union's fourth-largest economy. Morgan Stanley's Srikanth Sankaran says current prices on secured NPLs, i.e. those backed by collateral such as real estate, are between 20 to 30 cents on the euro, while unsecured loans can attract prices as low as 5 cents. Meanwhile, banks are marking the loans on their books for sale at around 50 to 65 cents, he said. - Deutsche Bank’s advice to ‘invest in UK if Leave wins ballot’ after EU referendum
ONE of Europe’s biggest banks yesterday advised investing in UK companies in the event of Brexit because they would “outperform the European market”. Analysts at Deutsche Bank say a vote to leave the EU would cause panic on Europe’s stock markets in the weeks after June 23, causing them to fall by as much as 10 per cent. But the FTSE 100 will perform better, boosted by a weak pound. A note from the bank reads the UK stock market “tends to outperform during periods of GBP (pound) weakness”. It said the value of the pound could tumble by as much as another 5 per cent by the end of the year. - ‘Brexit’ could send shock waves across U.S. and global economy
Britain's departure from the European Union could send shock waves across the global economy and threaten more than a trillion dollars in investment and trade with the United States. International policymakers are ramping up their warnings of the dangers of a British exit – popularly known as “Brexit” — from the political and economic alliance that has united Europe for the past four decades. Voters in Britain will decide whether to leave or remain in the European Union in a referendum on Thursday, but financial market volatility has already spiked as polls show a growing desire to abandon the partnership. - The man who accurately predicted 4 market crashes told us 3 more dates to worry about this year
The man who accurately predicted four market crashes to the exact date each time has told Business Insider about three more dates to worry about. Sandy Jadeja is a technical analyst and chief market strategist at Core Spreads. Technical analysts look at charts to pinpoint patterns in various markets and asset classes. From that, they forecast which direction prices are likely to move in. They can't tell you the reasons why there will be a big market movement, only that there is going to be one. He now warns that the following dates spell trouble for the Dow Jones in the US that could spread to other markets. 1. Between August 26 and August 30, 2016. 2. September 26, 2016. 3. October 20, 2016. “We have interesting times ahead of us. We are dealing with issues on so many levels from economic uncertainty in the financial markets including currencies and commodities as well as the rising house prices we have seen,” said Jadeja in an interview. - Venezuela police arrest 400 for looting in food shortage
At least 400 people have been arrested in Venezuela after rioting and looting over food shortages. Over 100 shops in the coastal town of Cumana were hit and at least one person died according to local media. Venezuela has one of the world's highest inflation rates at 180% and people can queue for hours for subsidised food. Opposition politicians blame government mismanagement for the shortages. But the government says the shortages are part of an economic war being waged to drive President Nicolas Maduro from office. - China Dumping More Than Treasuries as U.S. Stocks Join Fire Sale
For the past year, Chinese selling of Treasuries has vexed investors and served as a gauge of the health of the world’s second-largest economy. The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, burnt through 20 percent of its war chest since 2014, dumping about $250 billion of U.S. government debt and using the funds to support the yuan and stem capital outflows. While China’s sales of Treasuries have slowed, its holdings of U.S. equities are now showing steep declines. The nation’s stash of American stocks sank about $126 billion, or 38 percent, from the end of July through March, to $201 billion, Treasury Department data show. That far outpaces selling by investors globally in that span — total foreign ownership fell just 9 percent. Meanwhile, China’s U.S. government-bond stockpile was relatively stable, dropping roughly $26 billion, or just 2 percent. - Why US Coal Production Collapsed to Lowest Level since 1981
It was called “king coal” because it ruled! Coal-fired power plants were the cheapest way to generate electricity, based on capital costs and operating costs. And the US has plenty of coal. In the 1980s, over 55% of electricity generation was coal-fired. By 2000, it was down to 50%. Now it’s down to just over 30%, in second place, for the first time ever, behind natural gas. In the first quarter of 2016, according to the US Energy Information Administration, coal production plunged 17% from the prior quarter, the largest quarterly drop since Q4 1984. At 173 million short tons (MMst), production was down 42% from its peak in Q3 2008. It was the lowest quarterly production since Q2 1981 when a strike crippled coal mines. But this time, there was no strike. - Brexit Chaos to Serve as Cover for ECB Bank Bailouts
Over the course of the last few months, Brexit has become one of the biggest catch-all preemptive scapegoats of recorded human history. Even far beyond the old continent’s porous borders, politicians, central bankers, and economists are warning their respective populations to brace for a serious aftershock if the people of Britain vote to leave the EU. This is is a remarkable feat given that the UK has its own perfectly functioning currency, and as such decoupling from the EU, while bumpy, should not pose an immediate financial threat either to the UK or the EU, let alone the world at large. But try telling that to the eurocrats, politicians, and central bankers whose long cherished dream of creating a seamlessly interconnected, interdependent European superstate appears to be in the process of unraveling. - How the Government Hides Inflation, as Housing Costs Soar
For inflation lovers, the headline numbers that the Bureau of Labor Statistics reported today was benign: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% in May, seasonally adjusted. Over the last 12 months, not seasonally adjusted, the index rose 1.0%. The Atlanta Fed’s “sticky-price” CPI – “a weighted basket of items that change price relatively slowly,” as it says – wasn’t quite that benign. It rose 2.6% for the 12-month period, the hottest increase since April 2009! - All Signs Point to Big Financial Crash in 2016-Bill Holter
Financial writer Bill Holter says there are many signs that are signaling big trouble. Holter’s list starts with the troubled banking giant Deutsche Bank and says it is his top candidate for the next Lehman style financial meltdown. Holter explains, “It would make sense that they are the candidate because, as you know, they had a recent settlement in the gold and silver fix. So, they may get thrown under the bus. The only problem is if they get thrown under the bus, there’s going to be a bomb that blows up the whole bus.” So, can we make it out of this year without a big financial crash? Holter contends, “I don’t see how. There is the potential unrest all over the world. You have “Brexit,” and now the polls are saying that’s going to happen. That’s going to absolutely dislocate Europe. You have the U.S. election, and no matter who wins, I would say there are going to be riots. There will be riots no matter if Hillary wins or Trump wins. You will probably see rioting going into the election. You also have the tragic event in Orlando, and it’s common knowledge that ISIS says it is going to be doing this all summer long. So, you got all kinds of potential dislocations. I don’t see how we get to next year with the can being kicked down the road.” - Right Now It’s About Keeping the Whole System from Collapsing-Andy Hoffman
Financial writer Andy Hoffman says the real endgame is upon us, and big money people like “Bond King” Bill Gross know it. Hoffman explains, “He has said some pretty alarming things that are pretty well in line with what all the other ‘big money,’ . . . people have has been saying lately. We’re talking about the biggest debt explosion in history on top of the already biggest debt edifice in history. He also is . . . talking about Japan’s endgame is to forgive their debt. Forgive means default. It means the collapse of the major Western currencies. It means the domino game, that started 40 years ago when they got rid of the gold standard, must end as all fiat currency standards end in shambles.” - Peter Schiff Issues a Rather Large Economic Warning… “It’s Gonna Be Awful”
The interview below is vintage Schiff vs. CNBC. After being “demoted” to only doing CNBC website interviews for the last several months, something Peter hasn’t been too shy about mentioning in other interviews, within the first 22 seconds Peter manages to sneak in a jab about finally being IN studio again, jokes about how his competition at CNBC aren’t really full fledged bears, but rather “little cubs that haven’t matured into full grown bears yet,” and when asked how bad he thinks the coming financial crisis will be, Schiff responds saying, “It’s gonna be awful,” all while he’s laughing. - The Stock Market Crash Of 2016: Stocks Have Already Crashed In 6 Of The World’s 8 Largest Economies
Over the past 12 months, stock market investors around the planet have lost trillions of dollars. Since this time last June, stocks have crashed in 6 of the world’s 8 largest economies, and stocks in the other two are down as well. The charts that you are about to see are absolutely stunning, and they are clear evidence that a new global financial crisis has already begun. Of course it is true that we are still in the early chapters of this new crisis and that there is much, much more damage to be done, but let us not minimize the carnage that we have already witnessed. In general, there have been three major waves of financial panic over the past 12 months. Late last August we saw the biggest financial shaking since the financial crisis of 2008, then in January and February there was an even bigger shaking, and now a third “wave” has begun in June. Not all areas around the globe have been affected equally by each wave, but without a doubt this new financial crisis is a global phenomenon. The charts that I am about to show you come from Trading Economics. It is an absolutely indispensable website that is packed full of useful data, and I encourage everyone to check it out. Let’s talk about China first. The Chinese economy is the second largest on the entire planet, and since this time last year Chinese stocks are down an astounding 40 percent… - The Federal Reserve has brought back “taxation without representation”
In February 1768, a revolutionary article entitled “No taxation without representation” was published London Magazine. The article was a re-print of an impassioned speech made by Lord Camden arguing in parliament against Britain’s oppressive tax policies in the American colonies. Britain had been milking the colonists like medieval serfs. And the idea of ‘no taxation without representation’ was revolutionary, of course, because it became a rallying cry for the American Revolution. The idea was simple: colonists had no elected officials representing their interests in the British government, therefore they were being taxed without their consent. To the colonists, this was tantamount to robbery. Thomas Jefferson even included “imposing taxes without our consent” on the long list of grievances claimed against Great Britain in the Declaration of Independence. It was enough of a reason to go to war. - The subprime mortgage is back: it’s 2008 all over again
Apparently the biggest banks in the US didn’t learn their lesson the first time around… Because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again! I’m sure you remember how this all blew up back in 2008. Banks spent years making the most insane loans imaginable, giving no-money-down mortgages to people with bad credit, and intentionally doing almost zero due diligence on their borrowers. With the infamous “stated income” loans, a borrower could qualify for a loan by simply writing down his/her income on the loan application, without having to show any proof whatsoever. Fraud was rampant. If you wanted to qualify for a $500,000 mortgage, all you had to do was tell your banker that you made $1 million per year. Simple. They didn’t ask, and you didn’t have to prove it. Fast forward eight years and the banks are dusting off the old playbook once again. - China’s Jan-May outbound direct investment surges
Chinese companies continued to invest big in the overseas market in the first five months of the year, official data showed on Wednesday. China’s non-financial outbound direct investment (ODI) rose 61.9 per cent from a year earlier to 479 billion yuan ($74 billion) in January-May period, the Ministry of Commerce said on its website. Major investment destinations included ASEAN, Australia, the EU, Hong Kong SAR, Japan, Russia and the United States, which together were in receipt of $59 billion, about four fifth of the total. China had sent 181,000 labourers to work abroad since the start of the year, bringing the total number of Chinese labourers overseas to 987,000 at the end of May, down 20,000 from the same period last year. Chinese outbound direct investment will continue to grow at more than 10 percent per annum, a report from international accounting firm KPMG showed earlier this year. - China, Russia elected to UN’s ECOSOC
China and Russia have been elected to the UN Economic and Social Council (ECOSOC), the coordinating body for the economic and social work of UN agencies and funds. China won 182 votes out of a total of 185 votes casted in the Asia Pacific group in the election held on Tuesday. Other elected ECOSOC members are North Korea, Britain, United Arab Emirates, Sweden and Norway among others. ECOSOC accredits and oversees human rights groups at the UN, deciding who can participate at the UN Human Rights Council. The winners require two thirds majority of the votes in relevant groups. - Faber: Brexit Would be The Best Thing in British History
The European Union is an “empire that is hugely bureaucratic,” warns Marc Faber, telling CNBC that he thinks that “a Brexit would be bullish for global economic growth,” because “it would give other countries incentive to leave the badly organized EU.” The Gloom, Boom & Doom-er explained that Brexit is a risk Britain should be willing to take, and that it would not be a disaster, “on the contrary, it would be the best thing for Britain that would ever happen!” As CNBC reports, Faber defended his case by citing Switzerland, which is not a member of the EU nor the European Economic Area, but instead operates in the “single” market. That enables the Swiss to have rights in the U.K., but theoretically allows them to operate independently of both groups. - Authoritarian Control and Mass Murder in America the Hegelian Dialectic Way
Georg Wilhelm Friedrich Hegel (1770-1831) was a highly influential German philosopher. To this day his Hegelian Dialectic is a model used by central powers of government to create a problem that causes a reaction most often in the form of a crisis or series of crises, and consolidation of concentrated power results in fewer hands as a consequence of the proposed solution put forth by the same political body that created the problem and crises in the first place. It’s been a highly effective deadly game formula of deceit that the ruling elite has perpetrated on the people to fool and entice them into blindly accepting greater centralized control and authority. This article will demonstrate how New World Order globalists and their neocon puppets in Washington have consistently employed this repeating cycle of the Hegelian Dialectic consisting of the problem (originally called thesis), reaction (anti-thesis) and solution (synthesis) during this century’s federal governmental domestic policies. Inasmuch as US Empire virtually controls all Western nations as well as nearly all Third World nations, this insidious undemocratic process is unfolding globally on the geopolitical chessboard with the ultimate objective of establishing one world government tyranny. - Morgan Stanley fears policy makers repeating mistakes of 1930s
Policy makers are repeating the types of mistakes that prolonged the Great Depression, economists at Morgan Stanley warned Thursday. High debt, deflation, slower growth and lower yields on top of policy missteps have often been identified as the prime culprits for extending the Great Depression in the 1930s. “We think that the current macroeconomic environment has a number of significant similarities with the 1930s,” said a team led by Chetan Ahya, global co-head of economics at the firm. - Why there’s a new kind of housing crisis
America has a housing crisis, and most Americans want policy action to address it. That’s the conclusion of an annual survey released Thursday by the MacArthur Foundation. The “crisis” is no longer defined by the layers of distress left behind after the subprime bubble burst, but about access to stable, affordable housing. - U.S. bank earnings will feel bite of U.K. exit from EU
Earnings of large U.S. banks would be trimmed by as much as 5.6% this year and as much as 9% in 2017 if the U.K. opts to leave the European Union in a referendum to be held next week, analysts at brokerage Keefe, Bruyette & Woods said. The banks most exposed to an increase in costs and weaker capital market activity as a result of the so-called “Brexit” include Goldman Sachs Group Inc. Morgan Stanley, J.P. Morgan Chase & Co. Citigroup Inc. and Bank of America Corp. BAC, said KBW analyst Brian Kleinhanzl and team in a note dated Wednesday and distributed to media on Thursday. - How Fascism Comes to America
I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can't think of something better to do with your time. But I'll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you'd like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today's world and will wind up savaging billions in the years to come. - Wall Street has been rocked by an $8 billion hedge fund's implosion
Visium Asset Management, a multibillion-dollar hedge fund, has imploded in the biggest scandal to hit the industry in years. The fund told investors of its plan to close in a letter Friday. It's the most high-profile shutdown since authorities forced Steve Cohen's controversial SAC Capital to close in 2013. A slew of factors — from a brewing insider-trading scandal to a contentious investment by Visium's founder that rankled investors and staffers alike — led to Visium's demise. On top of all of that, Visium's flagship fund had been reporting dismal performance. Visium is selling one of its better performing funds to AllianceBernstein, it said. - Iranian Professor: ‘OPEC Is Finished’
An Iranian professor said Tuesday that the Organization of Petroleum Exporting Countries (OPEC) is doomed, because of power struggles between Iran and Saudi Arabia that have created serious political fallout. “OPEC’s power is not waning — I’m sorry, OPEC is finished,” Hossein Askari, an Iranian professor of business at George Washington University who studies the oil industry, told USA Today. “OPEC is just powerless. They cannot agree to anything, both for political reasons and economic realities.” - Bill Gross: Negative yields are a $10 trillion ‘supernova’ that will ‘explode’
Bond guru Bill Gross believes the growing global move toward negative yields will have dire consequences. In a tweet from his firm, Janus Capital, Gross goes back half a millennium to assert that the current situation with the world’s debt market is unprecedented and dangerous: ‘Gross: Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day'. The warning comes as yields on Japanese government bonds and German bunds hit record lows. - $30 oil could come back later this year
The oil crash is over, right? Maybe not. At least that’s the warning from Morgan Stanley, which argues crude oil prices could spiral downward later this year to as low as $30 a barrel. It’s a counterintuitive warning, given that oil prices have actually soared by nearly 100% since mid-February. But Morgan Stanley points out that the huge rally has been driven largely by unexpected supply outages in Nigeria, Canada and elsewhere, all of which won’t last forever. - Bilderberg Group 2016: attendee list and agenda
The secretive Bilderberg Group, which is set to meet in Dresden, Germany later this week, will discuss how to prevent Donald Trump from becoming president, the possibility of mass riots as a result of wealth inequality, the migrant crisis, as well as the United Kingdom’s vote on leaving the European Union. The influential meeting of bankers, politicians, media heads and business moguls has released its official participant list and agenda for 2016. - Former head of Morgan Stanley indicted for evading $45 million in taxes
Morris Zukerman spent 16 years at Morgan Stanley, at various points overseeing its energy and merchant banking practices, before starting his own investment firm in the late 1980s. His firm’s partners have included ConocoPhillips, ExxonMobil and Kinder Morgan. He endowed a Harvard sociology professorship. He collected dozens of expensive paintings, including works he loaned to the Metropolitan Museum of Art. Along the way, he evaded more than $45 million in taxes, the U.S. now alleges. - $50 Oil Might Not Last to the End of 2016
Hold off on celebrating the recent surges to more than $50 per barrel in WTI and Brent crude prices. First, consider what’s behind the increase. The simplest explanation is that supply disruption is to blame. In the past few weeks, the world has experienced a bevy of supply disruptions. - IEA says supply glut will remain until 2021
The International Energy Agency says they are decreasing gas demands once again. Although oil markets are hopeful to a rebalance next year, the surplus will not disappear right away. They report that an annual increase in global consumption is expected to rise by 1.5 percent through 2021, down from the original of 2 percent prediction and the 2.5 percent gain over years past. This growth inhibition is driven by the low usage of fuel in the U.S. and Japan as it competes with renewable coal in power generation. They continue, “Slower generation growth, rock-bottom coal prices and robust deployment of renewables constrain gas’s ability to grow faster in today’s low-price environment.” - What happens after Brexit?
When it comes to “Plan B” Europe is funny: it never has one. The best example is, of course, Greece most notably from an April 2013 press conference, when Mario Draghi responded to a question from Zero Hedge readers about a worst case scenario for Greece. - The Daily Data Dive: A Tale of 3 Retail Sales Figures And A 12.5% Drop Since 2007
The Commerce Department reported that the seasonally adjusted headline number for Retail Sales rose in May by an estimated 0.5%. That figure will be revised multiple times in the months and years ahead as more data comes in and the seasonal adjustment factor is repeatedly revised until its curve reasonably approximates the actual data. In the game of Pin the Tail on The Number, Wall Street economists undershot, coming in with a consensus guess of +0.3%. The reported number was a “beat” in that regard. The actual, not seasonally adjusted number rose by $20.5 billion or 4.5% from April. The best way to tell if that’s a good number or not is to compare it with May’s performance last year. May of 2015 saw a month to month gain of $27.4 billion or 6.1%. Compared to last year, this year fell short. - Meltdown! Central Banks Are Destroying The Global Bond Market
Japanese, German and Swiss bond yields fell to records, as government debt around the world extended its best gains in two decades, with the prospect of Britain leaving the European Union boosting demand for havens. Federal Reserve Chair Janet Yellen fueled the rally by saying Wednesday slow productivity growth and aging societies may keep interest rates at depressed levels. Fewer Fed officials expect the central bank to raise interest rates more than once this year than they did three months ago, based on projections the central bank issued. The Bank of Japan said inflation in the nation may be zero or negative, while holding monetary policy unchanged. - GOLDMAN SACHS: This is how far we expect the pound to crash after a Brexit
Brexit could trigger a huge sell-off in the pound, sending the currency down by as much as 11% against a basket of the world's most important currencies, according to new research from Goldman Sachs released late on Wednesday. Goldman analysts Silvia Ardagna, Robin Brooks, and Michael Cahill argue that a so-called “Lehman-type” scenario — where uncertainty in the markets increases as much as it did following the collapse of the investment bank Lehman Brothers in 2008 — would cause a huge crash in the pound sending it down to levels not seen in decades. - After Brexit—-There’s Grexit, Spexit, Uscitaly and Portugal, Too
If there was any doubt that Brexit was “relevant” then the surges in European peripheral bond risk,despite massive bond-buying by The ECB, should send shivers up and down the status quo huggers that are shrugging the referendum decision off because “central banks will provide liquidity.” However, it’s not just The UK that EU officials need to worry about, as The Globalist notes, Germany will have to change its policies if it wants to avoid exit of other countries from the eurozone. Portugal, Italy, and Spain are all seeing bond risk explode in recent weeks… - Will Brexit Give The US Negative Interest Rates?
One of the oddest things in this increasingly odd world is the spread of negative interest rates everywhere but here. Why, when the dollar is generally seen as the premier safe haven currency, would Japan and much of Europe have government bonds — and some corporate bonds — trading with negative yields while arguably-safer US Treasuries are positive across the entire yield curve? One answer is that the Bank of Japan and the European Central Bank are buying up all the high-quality (and increasing amounts of low-quality) debt in their territories, thus forcing down rates, while the US Fed has stopped its own bond buying program. So the supply of Treasury paper dwarfs that of German or Japanese sovereign debt. Greater supply equals lower price, and lower price equals higher yield. The other answer is that this is just one of those periodic anomalies that persist for a while and then get arbitraged away. And Brexit might be the catalyst for that phase change. - The pound is getting annihilated
Sterling is getting crushed once again on Thursday, as currency traders react to ever increasing odds that the UK will vote to leave the European Union as well as renewed warnings from the Bank of England about the dangers of Brexit. Around 3:45 p.m. BST (10:45 a.m. ET) the pound is lower by around 1.37% against the dollar to trade at $1.4014, having tumbled steadily for around two hours in the early afternoon, as Brexit jitters intensify in the markets. - Gold Price: USD 65,000/OZ In 5 Years?
16 June 2021 is five years from today. What will the gold price be 16 June 2021? Currencies are Worthless. As the world’s fiat paper currencies have lost 99% or more of their purchasing power in the last 100 years, we have to understand that fiat paper currencies are not a suitable unit of account to accurately measure prices. Gold is in fact a much better measuring stick for value than paper currencies. A currency doesn’t measure anything. It just has an arbitrary value placed upon it by the population using it. It’s not backed by anything and it can fail at any time. By the tale of history, we know that the unbacked fiat paper currencies used today will ultimately destruct and become worthless. All unbacked fiat currencies throughout human mankind have failed. A more accurate measurement is to measure fiat currencies in gold. If we look at the US Dollar as measured in gold, we can see that the US Dollar has utterly failed in keeping its store of value, with the value plunging about 98% in a mere 50 years. - Free Speech Under Attack
Bill Bonner, whose Diaries we republish here, is well-known for being an equal opportunity offender – meaning that political affiliation, gender, age, or any other defining characteristics won’t save worthy targets from getting offended. As far as we are concerned, we generally try not to be unnecessarily rude to people, but occasionally giving offense is not exactly beneath us either. Some people really deserve it, after all, …which is why we often refer to modern-day central bankers as lunatics, politicians as psychopaths, governments as gangs of highway robbers waving a flag, and so forth. On one occasion we even provided a translation of Mr. Böhmermann’s “abusive criticism” of Mr. Erdogan, which fell afoul of a 19th century lèse majesté law on Germany’s statute books. - How Fiat Money Destroys Culture
It may seem unusual that an economist would talk about culture. Usually, we talk about prices and production, quantities produced, employment, the structure of production, scarce resources, and entrepreneurship. But there are certain things that economists can say about the culture, and more precisely, that economists can say about the transformation of the culture. So what is culture? Well, to put it simply, it is the way we do things. This can include the way we eat — whether or not we dine with family members on a regular basis, for example — how we sleep, and how we use automobiles or other modes of transportation. And of course, the way we produce, consume, or accumulate capital are important aspects of the culture as well. - Oil Is Set To Rally Beyond $50
This week’s key data for the oil and gas industry shows a small rebound in U.S. oil production after months of declines. While U.S. crude stocks continue to fall, we notice a small build in gasoline stocks as refinery runs continue to increase. - Weak Indian Demand May Soon Impact Gold Prices
Incredible numbers this week on gold demand. Coming out of a nation that’s supposed to be the world’s top consumer — but is showing hardly any buying right now. India. Preliminary reports suggest that May was another very weak month for India’s gold demand. With Bloomberg citing familiar persons in the finance ministry as saying that May’s gold imports totaled just 31 tonnes — a drop of 51 percent from year-ago levels. That would come after India’s gold imports dropped 67 percent in April — to just 22 tonnes. Showing that gold buying is incredibly sluggish right now. In fact, sources in India’s jewelry sector were quoted as saying that there is “hardly any demand” right now in this key consuming nation. A fact that seems incredible in light of the recent strength in the gold price.
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Latest News Articles – June 16, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From June 10, 2016 to June 16, 2016:
- June 23, 2016: The Brexit Vote Could Change EVERYTHING And Plunge Europe Into Financial Chaos
On June 23rd, a vote will be held in the United Kingdom to determine if Britain will stay in the European Union or not. This is most commonly known as the “Brexit” vote, and that term was created by combining the words “Britain” and “exit”. If the UK votes to stay in the European Union, things over in Europe will continue on pretty much as they have been. But if the UK votes to leave, it will likely throw the entire continent into a state of economic and financial chaos. And considering how bad the European economy is already, this could be the trigger that plunges Europe into a full-blown depression. So if things will likely be much worse in the short-term if Britain leaves the EU, then it makes sense for everyone to vote to stay, right? Unfortunately, it isn’t that simple. Because this choice is not about short-term economics. Rather, the choice is about long-term freedom. The EU is a horribly anti-democratic bureaucratic monstrosity that is suffocating the life out of most of Europe a little bit more with each passing year. So if I was British, I would most definitely be voting to leave the EU. - Halliburton & Baker Hughes get downgraded: Moody’s
Following the failed merger of Baker Hughes and Halliburton, Moody’s has made the decision to downgrade both companies’ credit ratings. Halliburton and Baker Hughes had their senior unsecured debt downgraded from A2 to Baa1. Halliburton announced that they planned to acquire Baker Hughes back in November of 2014, and HAL, therefore, took on much debt in order to finance the acquisition. Moody’s Vice President, Andrew Brooks, stated that “Debt incurred to finance its failed bid to acquire Baker Hughes Incorporated together with the negative impact on profitability and cash flow of the very weak oilfield services environment have eroded HAL’s credit metrics to levels which no longer support its A2 rating.” - 15 Facts About The Imploding U.S. Economy That The Mainstream Media Doesn’t Want You To See
You are about to see undeniable evidence that the U.S. economy has been slowing down for quite some time. And it is vital that we focus on the facts, because all over the Internet you are going to find lots and lots of people that have opinions about what is going on with the economy. And of course the mainstream media is always trying to spin things to make Barack Obama and Hillary Clinton look good, because those that work in the mainstream media are far more liberal than the American population as a whole. It is true that I also have my own opinions, but as an attorney I learned that opinions are not any good unless you have facts to back them up. So please allow me a few moments to share with you evidence that clearly demonstrates that we have already entered a major economic slowdown. - Where Do Matters Stand? — Paul Craig Roberts
On the eve of World War II the United States was still mired in the Great Depression and found itself facing war on two fronts with Japan and Germany. However bleak the outlook, it was nothing compared to the outlook today. Has anyone in Washington, the presstitute Western media, the EU, or NATO ever considered the consequences of constant military and propaganda provocations against Russia? Is there anyone in any responsible position anywhere in the Western world who has enough sense to ask: “What if the Russians believe us? What if we convince Russia that we are going to attack her?” The same can be asked about China. - BRICS Bank inks strategic cooperation deal with China Construction Bank
The New Development Bank (NDB) launched by the BRICS countries on Wednesday signed a strategic cooperation agreement with China Construction Bank, the country’s second-largest lender. “The NDB, as per its mandate, is building partnerships with major banks in its member countries. Cooperation with CCB is important for us, given the key role it plays in infrastructure financing,” said NDB President Kundapur Vaman Kamath in an emailed statement to The BRICS Post. “The MoU signed today will provide our two institutions with a framework for collaboration in several areas including bond issuance, joint financing and information exchange. I look forward to a long and mutually beneficial partnership,” Kamath added. The China Construction Bank is planning to support the BRICS Bank with adequate credit lines and a commitment to invest in the new lender’s first financial green bonds. The BRICS bank has said clean energy will be part of its core focus. - It’s 2000 All Over Again!
At this year’s Strategic Investment Conference, my good friend Mark Yusko poured cold water on whatever bullishly warm feelings the most optimistic folks may have clung to. You might think someone who manages real money would have a more enlightened view than those bearish economists. Mark, however, was hardly bullish. He listed ten plausible scenarios that could send markets down to the basement. Here I’ll focus on his “Surprise #6: Déjà vu, Welcome to #2000.2.0.” That’s right: Mark says it’s year 2000 all over again. That was when the tech bubble popped and sent us to an ugly bear market and recession. Here are four major parallels he pointed out that make it clear we are heading for another ugly recession—or are already in one without realizing it. - How a summer of shocks threatens to bring mayhem to the markets
Two words are back on the lips of every investor in the City. “Event risk” has begun to dominate trading floor conversations, as a slew of central bank decisions, legal rulings, and political upheavals threaten to bring an end to the calm that has descended upon the markets. May is the one calm month we have before a pretty volatile JuneMarchel Alexandrovich. After a brief break from the turbulence that dominated the start of the year, when fears over the strength of the global economy and the idea of a sharp slowdown in China unnerved money managers, volatility is set to return to the scene. - Eurozone banks hit by bad debts
Investment in the eurozone remains far below pre-crisis levels, partly due to problems in the banks, the Organisation for Economic Co-operation and Development (OECD) has said. Bad debts at the banks are making them less willing to lend. The OECD says many legacies of the area's financial crisis are unresolved and major new problems have emerged. - Libya claims $1.2bn damages from Goldman Sachs over trades
Libya's $67bn national investment fund is seeking damages from Goldman Sachs, saying the bank encouraged it to make complex, money-losing investments. The Libyan Investment Authority, which runs the fund, is looking to claw back $1.2bn (£840m) it says was lost through nine disputed trades conducted in 2008. The Libyans said the trades were made under “undue influence”. Goldman said the claims were without merit and it would fight them vigorously. The trial started on Monday at the High Court in London. - Why are so many bankers committing suicide?
Three bankers in New York, London and Siena, Italy, died within 17 months of each other in 2013-14 in what authorities deemed a series of unrelated suicides. But in each case, the victim had a connection to a burgeoning global banking scandal, leaving more questions than answers as to the circumstances surrounding their deaths. The March 6, 2013, death of David Rossi — a 51-year-old communications director at Monte dei Paschi di Siena, the world’s oldest bank — came as the institution teetered on the brink of collapse. Rossi was found dead in an alleyway beneath his third-floor office window in the 14th-century palazzo that served as the bank’s headquarters. A devastating security video shows Rossi landing on the pavement on his back, facing the building — an odd position more likely to occur when a body is pushed from a window. - Chart of the Decade: European Banks Fleeing German Banks Like Rats From A Sinking Ship
Smaller banks often deposit funds in bigger banks. The level of banks’ deposits at other banks is a reflection of their confidence in the system as a whole. The ECB measures and is kind enough to share with us the level of bank deposits in other banks in Europe, breaking the data down by country and the Eurozone as a whole. Banks have been pulling their money out of other banks in Europe like rats deserting a sinking ship since 2012. Even the advent of QE in 2014 only slowed the stampede. European banks are still gettin’ out of Dodge. - Bogle Says Prepare for Stocks, Bonds to Miss Historical Returns
John Bogle, the founder of Vanguard Group Inc., said investors should prepare for weaker results than stock and bond markets generated during his six-plus decades in money management. The average annual return has been around 12 percent for stocks and 5 percent for bonds during his career, Bogle, 87, said Wednesday in an interview with Bloomberg Radio. “That is not going to be true in the future,” he said. “It’s reasonable to think that stocks might return 4 to 5 percent in the next decade.” A bond portfolio, including corporate debt, could produce a yield of about 2.5 percent, he said. - The Land Below Zero: Where Negative Interest Rates Are Normal
In Copenhagen, bicycles take undisputed priority over cars and even pedestrians. A sizzling restaurant scene has made foodie fetishes of moss, live ants, and sea cucumbers. Despite a minimum wage not far below $20 an hour and some of the world’s steepest taxes, unemployment is almost the lowest in Europe. Parents happily leave infants unattended in strollers on the sidewalk while they stop in to cafes. Clearly the usual rules tend not to apply in Denmark. So it’s no surprise that the country in recent years has added a major new entry to its sprawling repertoire of eccentricities: Since 2012 it’s been a place where you can get paid to borrow money and charged to save it. Scandinavia’s third-largest economy (the population is 5 million, and there are about as many bikes) is deep into an unprecedented experiment with negative interest rates, a monetary policy tool once viewed by mainstream economists as approaching apostasy, if not a virtual impossibility. Companies—though not yet individuals—are paying lenders for the privilege of keeping funds on deposit; homeowners, in some cases, are actually making money on mortgages. - There Have Almost Never Been This Many Global Stocks in Decline
Fear of a possible Brexit is being manifested in equities around the world. The Bloomberg composite referendum poll tracker shows that in recent days, the share of the electorate who would vote to leave the E.U. has pulled ahead of the percentage who would vote to remain. Amid the evidence that the “Leave” camp is gaining support, global equities have come under acute pressure, with the MSCI All World Index giving back more than 4 percent over the four sessions through Tuesday. What's startling about this particular pullback is how the number of stocks that are rising was, at the time of yesterday's close, absolutely dwarfed by the amount in decline, observe analysts at Bespoke Investment Group. - S. Africa Gets Reprieve From Junk as S&P Keeps Rating Unchanged
South Africa got a reprieve from a junk credit rating as S&P Global Ratings warned it could cut the nation’s debt assessment if the economy doesn’t recover. The foreign-currency rating was kept at BBB-, one level above junk, and the local-currency rating was affirmed at BBB+, S&P said in a statement on Friday. The outlook on the rating was kept at negative. The rating affirmation keeps South Africa on the same level as India and Italy. “South Africa’s weak economic growth, relative to that of peers in similar wealth categories, continues to be hurt by a combination of factors,” S&P said. The negative outlook signals “that we could lower our ratings on South Africa this year or next if policy measures do not turn the economy around,” it said. While the nation maintained its investment grade for now, economic growth forecast at the slowest pace since the 2009 recession will keep pressure on the rating. A downgrade to junk for Africa’s most-industrialized economy could prompt forced selling by some funds that are prevented by their mandate from owning junk-rated securities. - Gerald Celente – The Next 8 Days May Change The World Forever
Today top trends forecaster Gerald Celente just that the next 8 days may change the world forever. Gerald Celente: Direct Democracy referendums, a staple in Switzerland – one of the wealthiest, most democratic, least violent, most market-oriented countries in the world – in which the public, not politicians, vote on high-profile issues… has gone British… Next Thursday, United Kingdom citizens will vote whether to stay in or exit (Brexit) the European Union. In the run-up to the referendum, world equity markets swoon and sway with polls that fluctuate between “Remain” or “Leave.” - Brazil’s Exploding Debt-to-GDP Is Going to Become a Problem Soon
Reining in Brazil’s mammoth budget is no small feat, no matter how good you are. Cut discretionary spending, and risk blowback from an already frustrated electorate. Raise taxes, you could exacerbate the nation’s crushing recession. Privatize government companies? Beware the wrath of the unions. Shrink social security? It’ll take decades to manifest itself on the nation’s balance sheet. And that doesn’t even start to address Brazil’s massive interest tab. That’s the harsh reality facing Acting President Michel Temer, 75, who took over three weeks ago for Dilma Rousseff as she awaits an impeachment trial. His economic cabinet — dubbed the “dream team” by Goldman Sachs Group Inc. — takes over a crisis-torn country with a public-sector debt burden that climbed 9 percentage points last year alone to 67 percent of gross domestic product. And liabilities keep mounting fast. The budget gap is now the biggest among all countries in the G-20 except Saudi Arabia, equal to more than 10 percent of GDP. - National Bank profit falls 48% on bad energy loans; boosts dividend
National Bank of Canada (NA.TO) has delivered quarterly results that look ugly but invite observers to look ahead to better times later this year. The smallest of the Big Six reported that its second-quarter profit fell to $210-million, down 48 per cent from last year. That’s the ugly part, and it stands out from the far-more encouraging results from the other big banks this quarter. The decline was expected though, after the bank announced last month that it would set aside $250-million to cover bad loans to the energy sector. Overall, provision for credit losses came to $317-million, giving National Bank the opportunity to construct two what-if scenarios that can make its results look considerably more upbeat. - The Federal Reserve Has Created an Unprecedented Disaster for Pension Funds
When it comes to the Fed, Congress is mired in hypocrisy. The anti-regulation, de-regulation crowd on Capitol Hill shuts its mouth when it comes to the most powerful regulators of all – you and the Federal Reserve. Meanwhile, Congress goes along with the out-of-control, private government of the Fed—unaccountable to the national legislature. Moreover, your massive monetary injections scarcely led to any jobs on the ground, other than stock and bond processors. - Next Banking Scandal Explodes in Spain
The last five years have been a bumper period for banking scams and scandals in crisis-ridden Spain. From Bankia’s doomed IPO in 2012 to the “misselling” of complex preferentes shares to “unsophisticated” retail bank customers, including children and Alzheimers sufferers, all of the scandals have had one thing in common: the banks have consistently and ruthlessly sacrificed the welfare and wealth of customers, investors, and taxpayers on the altar of short-term survival. Some commentators claim that the problem of banking instability in Spain has been put to rest in recent times, thanks chiefly to a robust, debt-fueled recovery, a tepid resurgence of the real estate sector and the transfer of the most toxic assets from banks’ balance sheets to the festering balance sheets of the nation’s bad bank, Sareb. They could not be more wrong. Despite the untold billions of euros of public funds lavished on “cleaning up” their balance sheets and the roughly €240 billion of provisions booked against bad debt since December 2007, the banks are just as weak and disaster-prone as they were four years ago. - Negative rates stir bank mutiny
Lenders in Europe and Japan are rebelling against their central banks’ negative interest rate policies, with one big German group going so far as to weigh storing excess deposits in vaults. The move by Commerzbank to consider stashing cash in costly deposit boxes instead of keeping it with the European Central Bank came at the same time as Tokyo’s biggest financial group warned it was poised to quit the 22-member club of primary dealers for Japanese sovereign debt. The ECB and the Bank of Japan have for months imposed negative rates for holding bank deposits in an attempt to push lenders to deploy their cash in the real economy through more aggressive lending to businesses. The policy in effect taxes banks for storing excess liquidity. - ECB Gets Clocked by the Two Biggest German Banks
On the fateful day of June 8, when the ECB began buying euro-denominated corporate bonds, some of which now trade in negative-yield absurdity, the two biggest German banks counter-attacked in a well-coordinated two-pronged move. Commerzbank, of which the German government owns nearly 16% as a consequence of the bailout during the Financial Crisis, leaked to Reuters with impeccable timing that it was considering hoarding tons (literally) of cash in its vaults rather than paying the punishment interest on deposits at the ECB. That “punishment interest,” as Germans call the negative interest the ECB charges for deposits, is -0.4%. Currently, Eurozone banks have €850 billion on deposit at the ECB, so the punishment interest would cost them €3.4 billion per year. - “Death of the Dollar” Not Yet
Our favorite death-of-the-dollar gurus will have to remain patient for a while longer, it appears. Not that they don’t have plenty of reasons to be confident. But right now, the much maligned dollar is hot – on every level! With its top two competitors – the euro and the yen – now mired in negative-yield absurdity, investors are fleeing to greener pastures where yields are still higher. And the greenest pasture of them all with the most liquid government bond market is the US. Foreign demand at the 10-year Treasury auction on Wednesday hit a record high of 73.6%, beating the prior all-time record of 73.5% in May. And they sold at a yield of 1.702%! - Four alternatives to holding your savings in a bank
“Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day.” Those were the words of famed bond fund manager Bill Gross. (Gross was actually the first portfolio manager inducted into the Fixed Income Analyst Society’s “Hall of Fame”. And yes, there really is a hall of fame for that.) Gross wrote that more than $10 trillion in government bonds actually have NEGATIVE yields, and that interest rates are at the lowest levels in financial history. For example, the British government just issued its lowest-yielding bonds since 1694. This has very dangerous implications. - Introducing Europe’s Frightening New Tax Directive
A few days ago, the European Commission released details of a tax directive that will create a pan-European tax system, complete with a brand new Tax ID number for all the good citizens of Europe. The proposal also aims to increase taxes across the board if they feel that a member state (like Ireland) doesn’t charge enough tax. According to the proposal, other European countries like Ireland and Estonia “distort competition by granting favourable tax arrangements.” Apparently it’s not ‘fair’ that high-tax France and Belgium have to compete with low-tax Ireland and Estonia. So rather than the bankrupt countries getting their act together to attract business, the solution is to penalize everyone and make the entire continent less attractive. It’s genius! The directive goes on to demand more onerous reporting, attack anyone who takes legal steps to reduce what they owe, and even threaten businesses with exit taxes if they try to leave Europe. This really is like a return to the feudal system. - John Hathaway – There Is A Deepening Shortage Of Physical Gold
On the heels of gold and silver moving higher along with the dollar and the Dow tumbling, here is a reminder from one of the greats in the business, John Hathaway, that discusses the deepening shortage of physical gold. John Hathaway: “According to the World Gold Council, the current investment allocation of world institutional portfolios to gold is a miniscule .55 percent. The flows resulting from a return of investment interest in gold for hedging purposes only, and in the best of all possible worlds (robust economic growth, world peace, etc.), would seem to have a potentially powerful impact on gold prices.” - FTSE Loses £30bn In Value As Brexit Fears Grow
The FTSE 100 slumped below the 6,000 threshold for the first time in four months on Tuesday, as growing concern about the EU referendum caused jitters in global markets. More than £30bn was wiped off the index as it finished a fourth session in negative territory, following further opinion polls which indicate strong support for Brexit and The Sun's decision to throw its support behind the Out campaign. In London, the FTSE fell 2% to close at 5924 – and other European markets also ended the day in the red, including the CAC 40 in France and Germany's DAX. The STOXX 600, a pan-European index, has lost 8% since the start of June, wiping off €600bn (£475bn) off the value of its constituents. - A Trip Down The Rabbit Hole Of Money Dropping Helicopters, Followed By Debt Repudiation
Today one of the greats in the business has given King World News permission to share a crucial piece of information with our global audience. This piece takes a trip down the rabbit hole of money dropping helicopters, followed by debt repudiation. Bill Fleckenstein: It is worth noting, however, that today is a bit of a red-letter day in the annals of monetary experimentation because it marks the beginning of Mario Draghi’s and the ECB’s buying of corporate bonds as part of their roughly 80-billion-euro-per-month (i.e., over $90 billion) monetization scheme… - George Soros Is Preparing For Economic Collapse – Does He Know Something That You Don’t?
Why is George Soros selling stocks, buying gold and making “a series of big, bearish investments”? If things stay relatively stable like they are right now, these moves will likely cost George Soros a tremendous amount of money. But if a major financial crisis is imminent, he stands to make obscene returns. So does George Soros know something that the rest of us do not? Could it be possible that he has spent too much time reading websites such as The Economic Collapse Blog? What are we to make of all of this? The recent trading moves that Soros has made are so big and so bearish that they have even gotten the attention of the Wall Street Journal… - Top Advisor To Sovereign Wealth Funds Warns Another Lehman Moment Is Coming As Gold & Silver Surge!
With Wall Street having one of the strangest years in 2016, today a top advisor to the most prominent sovereign wealth funds, hedge funds, and institutional funds in the world, warned King World News that another Lehman moment is coming. He also discussed what this will mean for major markets and he exposed what will be the trigger for gold and silver to skyrocket. Michael Belkin: “The world is changing. What’s happening economically in Europe is we have extremely weak banks. Let me give you two names, UniCredit and Deutsche Bank. I’m telling my clients to sell and short those stocks. UniCredit is one of the biggest, if not the biggest Italian bank. It has a huge balance sheet, not enough capital, and huge non-performing loans (20 percent). The stock is down about 50 percent on the year and they are gasping for air. - Something Big That Always Happens Right Before The Official Start Of A Recession Has Just Happened
What you are about to see is major confirmation that a new economic downturn has already begun. Last Friday, the government released the worst jobs report in six years, and that has a lot of people really freaked out. But when you really start digging into those numbers, you quickly find that things are even worse than most analysts are suggesting. In particular, the number of temporary jobs in the United States has started to decline significantly after peaking last December. Why this is so important is because the number of temporary jobs started to decline precipitously right before the last two recessions as well. - Global markets rattled as Brexit gains traction
Jitters over the coming EU referendum have wiped £67bn off of the FTSE 100 in the past three days, amid signs that support for Brexit has risen to the strongest levels on record. Concerns over a leave vote pushed London’s leading index down by 1.2pc, to a three-month low of 6,044.97, as nerves about the repercussions of a withdrawal from the EU sent shockwaves through global equity markets. European stocks were left battered, with the Euro Stoxx 50 shedding nearly 2pc. Worries about the global economy, in part fuelled by the belief that a Brexit vote could destabilise the wider eurozone bloc, also dampened investors’ appetites for US stocks. The flagship S&P 500 index closed down more than 0.8pc as traders fled for the perceived safety of government bonds and gold. - Was The Gotthard Base Tunnel Opening Ceremony An Illuminati Ritual Intended To Honor Satan?
The opening ceremony of the Gotthard Base Tunnel in Switzerland featured a “goat-man” that dies, is resurrected, is worshipped and is crowned as “the king of the world”. The “goat-man” that played such a key role in this performance bore a striking resemblance to Baphomet, which in recent decades has become one of the key symbols used to represent Satan in the occult community. So could it be possible that this entire ceremony was actually an Illuminati ritual that was intended to honor Satan? Don’t pass judgment until you see the videos. On Wednesday, June 1st, the long-awaited opening ceremony of the Gotthard Base Tunnel in Switzerland finally took place. It is the longest and the deepest railroad tunnel in the entire world, and it took 17 years to build. It is 35 miles long, more than 2,000 meters deep in places, and the construction of this unprecedented tunnel cost a grand total of more than 11 billion euros. So the opening of this tunnel was quite a big deal over in Europe. Prominent European politicians such as German Chancellor Angela Merkel, Italian Prime Minister Matteo Renzi and French President Francois Hollande were all in attendance, and they were treated to an incredibly bizarre opening ceremony that cost approximately 8 million euros to produce. From Switzerland, this opening ceremony was broadcast by television all over the world, and so countless numbers of people were exposed to it. - Why Is The Weather So Crazy All Of A Sudden?
All over the planet, global weather patterns have gone completely nuts. Just over the past few days we have seen “life threatening” heatwaves, extremely dangerous wildfires, vicious tornadoes and unprecedented flooding – and that is just in the United States. And of course this is just the continuation of a trend that stretches back to last year, when extremely weird weather created “apocalyptic-like conditions” in many areas around the world. So why is this happening? For decades, we could count on weather patterns falling within fairly predictable parameters, but now that is completely changing all of a sudden. All over the globe we are seeing things happen that we have never seen happen before, and the weather just seems to get even more crazy with each passing month. - George Soros Sells America Short – Literally
The Wall Street Journal reported on its front page this morning that leftist billionaire and Democratic mega-donor George Soros, the convicted insider trader who “broke the Bank of England,” has stepped back into trading personally in recent months. The Journal reports that Soros is betting against America, adopting “bearish derivative positions that serve as wagers against U.S. stocks.” It is not clear at what point in the first quarter the firm took those positions; the S&P 500 was up 3% on the quarter, so Soros may be in the red so far, according to the Journal report. But on May 16, Soros’ fund disclosed that it had doubled its bet against American stocks. - The Woman who Discovered $200 MILLION missing from E.U. Accounts
Marta Andreasen was hired as the EU’s first proper chief accountant in 2002. She was in charge of 130 staff and, surprisingly, was the first properly qualified accountant to hold the post. She did her job correctly – and in no time at all, identified that £170 million was missing or unaccounted for in the E.U. budget – that’s more than $200 million! The corrupt E.U. immediately slapped her with a disciplinary charge for “defamation” and she was suspended from her job. - Fed's Yellen sees rate hikes ahead, but few hints on when
Federal Reserve Chair Janet Yellen on Monday gave a largely upbeat assessment of the U.S. economic outlook and said interest rate hikes are coming but, in an omission that stood out to some investors, gave little sense of when. Overall, Yellen said, “I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones.” While last month's jobs report, released Friday, was “disappointing,” and bears watching, policymakers will respond “only to the extent that we determine or come to the view that the data is meaningful in terms of changing our view of the medium- and longer-term economic outlook.” - The Fed's credibility gap is getting wider
If Fed policy was a fairy tale, the title might be “The Central Bank That Cried Wolf.” Investors have watched in bemusement as Fed officials throughout the past several years have warned that policy would change, only to back down at the slightest sign of turbulence. It now appears the market is no longer taking the Fed's threats seriously. In a speech Monday, Fed Chair Janet Yellen gave only modest signals that she was reconsidering policy, which just a few months ago was geared for as many as four interest rate increases this year. Nevertheless, a market bracing for a high likelihood of a summer hike now is considering that “we may well not see one,” said David Rosenberg, chief economist and strategist at wealth management firm Gluskin Sheff. - Half Of Washington DC Employers Have Cut Jobs, Hours Due To Minimum Wage Increases – And It's Going To Get Worse
As former McDonald's CEO Ed Rensi so eloquently explained not long ago, raising the minimum wage would wipe out thousands of entry level jobs for those who don't have very many other options. Washington, DC is validation of Rensi's theory. According to a report from the Employment Policies Institute, nearly half of Washington, DC employers said they have either laid off employees or reduced the hours of employees to adapt to the District of Columbia's minimum wage hikes since 2014. - Weak Jobs, Consumer Activity Hint at Weakening American Economy
A disappointing increase in job openings and a poor increase in consumer credit indicate Americans are increasingly struggling to make ends meet. In April, consumer credit rose just $13.4 billion, far below the $18 billion expected and less than half of March’s $28.4 billion, according to new data released by the Federal Reserve. Analyst expectations of sharply increasing consumer credit usage were based on previous data that showed strong retail sales, which is often financed by credit cards. - Wholesale Inventories Rise Most In 10 Months, Sales Miss; Ratio Only Higher Post-Lehman
Wholesale inventories rose more than expected in April (up 0.6% MoM vs 0.1% exp) – the biggest monthly jump in 10 months – but sales disappointed (rising only 1.0% versus a 1.1% expectation). This sales growth topping inventory growth is a positive but for context the inventory-to-sales ratio remains at 1.35x – the highest level ex-Lehman on record. They just keep building inventories… even as sales remain lower YoY… - Urban Outfitters (URBN) Stock Plunges in After-Hours Trading on Q2 Sales Trend
Urban Outfitters (URBN) stock is falling by 7.84% to $25.74 in after-hours trading on Thursday, after the apparel retailer announced its comparable store sales are declining in the fiscal 2017 second quarter, which ends next month. “Thus far during the second quarter of fiscal 2017, comparable retail segment net sales are mid single-digit negative,” the company said its quarterly report filed with the SEC. If trends continue through the quarter, comparable store sales would decline, compared with a 4% increase for the same quarter last year and a 1% increase for the fiscal 2017 first quarter ended April 30. - Venezuela announces new plan to tackle food crisis
The Venezuelan government says it has imported thousands of tons of basic foodstuffs and will begin distributing them through communal councils directly to family homes. In Caracas the Food Minister, Rodolfo Marco Torres, said 70% of the country's food would be supplied in this way. The Venezuelan opposition says the new system could discriminate against them. The country has been badly hit by the fall in oil prices and is suffering severe shortages in food and medicines. President Nicolas Maduro has accused private food production companies and supermarkets of hoarding food for speculation. Mr Torres said the government had purchased 115,000 tons of basic goods including rice, sugar, maize and beans. - Bond markets hit by economic worries
The returns on British and German government debt, or bonds, have hit new all-time lows. The market has been affected by concerns about the global economic outlook. Weaker economic performance usually leads to cuts in interest rates and bond yields tend to move down in parallel. An increasing number of government bonds are now giving negative returns, less than zero. These moves have highlighted a question that is increasingly being asked in the markets: Is the world heading for another financial crisis, this time in the market for government and company debt? The new records being hit by government bonds are the results of central bank policies of very low or even negative interest rates. - Grains Decline as U.S. Sees Global Supply Exceeding Estimates
Grain prices dropped in Chicago after the U.S. government said that supplies will be bigger than analysts expected. World wheat inventories in the 2015-16 season will reach 243 million metric tons, the U.S. Department of Agriculture said Friday in a report. That compares with analyst projections at 242.5 million, on average. Global corn reserves will be 206.5 million tons, topping the 205.5 million estimate. - The Pension Bubble: How The Defaults Will Occur – Peter Diekmeyer
Experts worry about stock, bond and real estate market excesses. But a bubble is forming that dwarfs them all: in pension plans. Millions of Americans and Canadians who are counting on pension benefits to fund their retirements risk being severely disappointed. The hard money community has, of course, been aware of this for some time. However in recent years, even the elites have been taking notice. One such group, the International Forum of the Americas, will be holding its fourth annual pension conference in Montreal next Monday. There politicians, financiers and monetary policy officials will discuss the declining rates of return in public and private sector pension plans. The picture they will paint is increasingly grim. - Wall Street’s Treasuries Market Bluff Exposed in Auction Retreat
When U.S. officials broached the question of more oversight in Treasuries this year, Wall Street pushed back by pointedly reminding them of the “critical role” it plays in ensuring America’s ability to borrow. Turns out, the firms might be overstating their influence. Banks known as primary dealers, which trade directly with the Federal Reserve and bid at U.S. debt auctions, have bought just 30 percent of the new securities this year, the smallest share on record, data compiled by Bloomberg show. The 23 firms — which include JPMorgan Chase & Co., Goldman Sachs Group Inc. and Deutsche Bank AG — also aren’t bidding as aggressively as they once did. - A ‘tsunami' is about to overwhelm the debt market
A tidal wave may be coming to the bond market, and it's not going to be pretty. At least that's the view of Matthew Mish, credit strategist at UBS. To Mish, the elevated rates of default in the commodity sector and high risk bonds are a harbinger of things to come for the broader debt market. “First, our quantitative framework is signaling a broader deterioration in the default outlook, with our model projecting default rates of 4.3% over the next 12 months (versus 2.6% one year prior),” Mish wrote in a note to clients on Thursday. - New Reasons to Worry About Europe's Banks
European banks have lost their mojo. A toxic combination of negative interest rates, comatose economies and a regulatory backdrop that might euphemistically be described as challenging is wreaking havoc with bank business models. Their collective market value has dropped by a quarter so far this year. The smoke signals emanating from the European Central Bank in recent weeks suggest regulators aren’t blind to this. Daniele Nouy, who chairs the ECB’s bank supervisory board, said earlier this week that the central bank “is aware that the low-interest-rate environment is putting pressure on the profitability of European banks.” Regulators may respond by going easier when drafting new rules. - China's Debt Load Is (Much) Higher Than Previously Thought, Goldman Says
Count total social financing (TSF) as another Chinese statistic of increasingly dubious value, according to analysts at Goldman Sachs Group Inc. With many investors grappling to understand the degree to which China's economic growth has been fueled by debt, efforts to get a grip on measures of new credit creation have gained fresh urgency. To date, many have relied on the TSF invented by the Chinese authorities in 2011 as a way of capturing a larger slice of the country's shadow banking activity, but Goldman analysts led by M.K. Tang cast fresh doubt, in a note published on Wednesday, on the measure's ability to gauge credit creation. - Pensions may be cut to ‘virtually nothing' for 407,000 people
One of the biggest private pension funds in the country is almost out of money, and fresh out of options. The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said. At that time, pension benefits for about 407,000 people could be reduced to “virtually nothing,” he told workers and retirees in a letter sent Friday. In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it wasn't enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency. The fund could submit a new plan, but decided this week that there's no other way to successfully save the fund and comply with the law. The cuts needed would be too severe. - Jerome Kerviel, rogue trader, wins unfair dismissal case
The French ex-trader Jerome Kerviel, whose unauthorised transactions lost his bank €4.9bn (£3.82bn), has won a claim for unfair dismissal. A labour court said the bank, Societe Generale, had dismissed him not because of his actions, which it must have known of, but for their consequences. The court ordered the bank to pay him €450,000 (£350,000) in damages. A lawyer for the bank said it would be appealing a “scandalous” decision that ran counter to the law. Mr Kerviel, 39, served a three-year jail term after being convicted of breach of trust and fraud in October 2010. He was charged with gambling €50bn (£39bn) of Societe Generale's money on trades without the bank's knowledge, which nearly brought down the business. - Here’s How George Soros’s Latest Predictions Have Played Out
George Soros, the 85-year-old billionaire who broke the Bank of England in 1992, is becoming more involved in day-to-day trading at his family office, taking a series of big, bearish bets. Soros is best known for netting $1 billion as a hedge fund manager decades ago when he and his then-chief strategist Stan Druckenmiller wagered that the U.K. would be forced to devalue the pound. His predictions haven’t always played out so well. Anticipating weakness in various global markets, his Soros Fund Management cut its publicly disclosed U.S. stock holdings by 37 percent in the first quarter while buying shares of gold miners and an exchange-traded fund tracking the price of the precious metal. Since then, the S&P 500 Index has returned 3.1 percent. Barrick Gold Corp., his largest new position disclosed in the quarter, fared better, jumping 44 percent. - Puerto Rico’s Bonds Rally as House Nears Passage of Rescue Plan
Puerto Rico bonds are staging the longest rally in six months with the U.S. House of Representatives poised to vote on legislation to help resolve the island’s $70 billion debt crisis. The prices of some securities rose Thursday amid speculation that the House will approve a bill, known as Promesa, that empowers a federal control board to monitor the U.S. territory’s budgets and oversee any debt restructurings. The gains came after an index of Puerto Rico debt climbed for eight straight days through Wednesday, the longest winning streak since November, S&P Dow Jones indices show. - US warns of hacking threat to interbank payment network
US regulators have warned banks about potential cyber attacks linked to the interbank messaging system. The statement came two weeks after the Federal Bureau of Investigations sent a notice cautioning US banks after the hacking of Bangladesh's central bank. The FBI message warned of a “malicious cyber group” that had already targeted foreign banks. In February, hackers stole $81m (£56m) from Bangladesh's account with the Federal Reserve Bank of New York. The hackers used the Bangladesh central bank's Swift credentials to transfer money to accounts in the Philippines. Swift is the system banks use to exchange messages and transfer requests. The hackers attempted to steal nearly $1bn, but several of their requests were rejected because of irregularities. - Chinese police require DNA for passports in Xinjiang
Police in China's north-western region of Xinjiang are asking some residents to provide DNA samples and other biological data when applying for travel documents. People in the multi-ethnic area of Yili will have to provide the samples before being allowed to go abroad. The Chinese government is trying to crack down on periodic violence, which it blames on Islamist militants. Many Muslims in Xinjiang say they are discriminated against. They say the Chinese authorities often refuse to issue documents allowing them to travel. Most of the Uighur ethnic minority, which makes up about 45% of Xinjiang's population, practise the Muslim faith. Over the years China's authorities have attributed violent attacks to Uighur militants, who they say are inspired or aided by overseas terror groups. Uighur leaders have denied being behind the violence. - Compare The Contrast Of Censored Images Showing Socialist Country Where The Elite Thrive, The Poor Starve
Most of us have seen the heartbreaking images and videos flowing out of Venezuela where food lines are hours long, basics like bread are unattainable for many and recent reports showing Venezuelans are so hungry and desperate they are hunting dogs, cats and pigeons, but that is only half the story. Due to government corruption, there are “two Venezuelas,” one where the poor are having their electricity and food rationed by the government, causing civil unrest and bringing the country to the brink of civil war, but the other “country within the country” is living high drinking champagne and vodka, eating Belgian chocolates and lobster, wearing brand name clothes, and dining in exclusive restaurants. Via Telesur, a man by the name of Agustin Otxotorena, a Basque executive living in Caracas, grew tired of constant calls from friends and relatives in Spain telling him that there was no food in Venezuela, so on May 20 he began publishing photos on Facebook of supermarkets in upscale sectors of Caracas filled with goods. What you will see below is what the ABC news bureau in Venezuela censors from their reports, images from Otxotorena's Facebook account which when seen side by side with the tragic images of starving Venezuelans show a sickening contrast between who the government allows to starve and who doesn't. - Saudi Post-Oil Plan Weighs Income Tax on Expat Workers
Saudi Arabia is considering taxing millions of foreign residents as the kingdom seeks to reduce its reliance on oil revenue after the plunge in crude prices. The proposal was included in the country’s National Transformation Plan, an ambitious multi-year program released this week. But the tax element is only “an initiative that will be discussed,” Finance Minister Ibrahim al-Assaf said on Tuesday at a news conference in Jeddah. Economists said the proposal is unlikely to see the light soon because it could hamper the kingdom’s ability to attract the foreign investment it needs to revive growth hit by the oil slump. Still, raising the possibility of income tax in the blueprint — even if only on foreigners — shows the readiness of its architect, Deputy Crown Prince Mohammed bin Salman, to consider steps that past Saudi rulers have shunned. Prince Mohammed, the king’s son and second-in-line to the throne, has already cut fuel and utility subsidies and proposed reducing the public-sector wage bill. The kingdom is also joining other members of the six-nation Gulf Cooperation Council in imposing value-added taxation starting from 2018. - The Obama Administration Could Cause the Next Big For-Profit College Collapse
The Obama administration is at risk of repeating the mistakes that led to the expensive collapse of for-profit chain Corinthian Colleges Inc. In that case, the Department of Education failed to address years of allegations that the company’s schools swindled its students and warning signs that Corinthian was facing financial difficulty. When the department finally took action by delaying the delivery of federal student aid to the schools, officials were “surprised” by the cash crunch the delay caused. That set off a series of events that culminated in Corinthian filing for bankruptcy protection less than a year later. The increasing cost to taxpayers of Corinthian's collapse was at least $90 million as of March. - Trail of Defaults Leads to Dark Corner of Tax-Exempt Bond Market
When Philip J. Kennedy needed financing to buy low-income housing in a wealthy Dallas suburb, he bypassed Texas agencies for a tax-exempt bond issuer 700 miles away in Gulf Breeze, Florida. Leaving the state allowed Kennedy’s non-profit American Opportunity Foundation Inc. to secure $35 million to buy Garden Gate Apartments in Plano, Texas, and a development in Fort Worth without answering questions from local authorities about AOF’s past difficulties repaying debt. Scores of non-profit organizations like AOF are required to use government-created agencies when selling bonds. In return, the agencies charge fees. At times, these conduits aren’t in the same state as the projects they’re financing, giving officials on the ground little incentive to scrutinize the deals. - S&P 500 Record Taunts Investors Before Floor Caves In on Friday
Another run at a record ended in frustration for stock investors as the biggest selloff since mid-May erased gains for the week and dragged the S&P 500 further from a 10-month high. A week that started with the whiff of celebration as equities pulled within 1 percent of their all-time high ended with disappointment amid concerns about global growth and Britain’s referendum on the European Union. The S&P 500 dropped 0.9 percent to 2,096.07 on Friday, its worst decline since May 17, leaving it down 0.2 percent over the five days. - Day 8 No Money on EBT Cards – Riots Next? – Get Prepared!
It interesting over the weekend I got several emails telling me about cell phones being down, internet being down, and get this, EBT cards not working and having no money associated to them. This is a concern because when the US Government has payment failures, then there is possibly something happening that the press is not telling you about. Now, we know that computers have problems and that states, counties and cities run on computers. But what is interesting is that since the beginning of 2016, The US government has had over 2,700 reports on downdetector.com showing that they have been late loading the money onto these EBT cards. Folks, we are now going on 8 days where the Government has not paid the EBT payments so that people have food. Why is this? Are we looking a possible Venezuela event taking place here in the US? - Dire Financial Warnings and Debt Jubilee-David Morgan
Finance and economy writer David Morgan says there has been a noticeable increase in dire warnings from some of the biggest names in the investing world. Why are the elite sounding the alarm on another financial meltdown? Morgan says, “One reason is they see it’s rather imminent . . . so, could it be this year? Absolutely. I have been kind of right and wrong on this. I am right about the deterioration in the economy, the money supply and the inability to directly address the problem. Where you pinpoint it is more difficult. I said 2015 would be the year that most sleepy Americans would wake up and see the economy isn’t really recovering. . . . I think it’s going to be 2016.” - Rise in Starving Children Puts Strain on Venezuela’s Hospitals
The increasing shortage of food and other basic products in Venezuela, on top of inflation, is now takingits toll on the health of the nation — most notably, on its malnourished children. Children frequently arrive to the San Felipe Central Hospital after having fainted from malnourishment, officials told the PanAm Post, and are given medicine to take three times a day. Mothers tell physicians they don’t have enough food in their homes, even after rationing. “Children under five months of age come in here with diarrhea and when the parents are asked what the child has been eating, they say mostly rice cream because they can’t get milk,” one hospital worker said. The same source confirmed parents blame themselves because they don’t have the salary or access to staple foods to improve the situation. “You can’t feed a five-month-old on rice,” the source said, “and it’s going to affect their long-term health.” - A Breakdown in Old Rules Leads to a Rethink on How Global Markets Work
A standard textbook relationship that every student of economics learns in school has been flipped on its head, and it’s leading to a major rethink on the connection between bank balance sheets, exchange rates, global asset prices, and monetary policy. The prices of derivatives used for hedging currency risk are violating no-arbitrage rules, a development that points to a significant decline in global banks’ ability to intermediate capital flows from global investors, in part because of new regulations that have been introduced in recent years. That decline in intermediation capacity appears to have heightened the sensitivity of exchange rates and global asset prices to monetary policy since the crisis, and helps explain some of the unusual gyrations witnessed recently in markets — like extreme moves in the so-called cross-currency basis, which according to traditional theory should be non-existent, and mostly was before the crisis that began in 2007. - Whistle-Blower Said to Aid SEC in Deutsche Bank Bond Probe
The U.S. Securities and Exchange Commission is being helped by a whistle-blower in an investigation of Deutsche Bank AG’s post-crisis mortgage-trading business, according to people with knowledge of the situation. The SEC received a whistle-blower complaint alleging that the bank inflated the value of mortgage bonds on its books and masked losses around 2013, said the people, who asked not to be identified because the matter is confidential. The SEC is probing how the bank valued government-backed mortgage bonds known as Agency pass-through securities that it amassed after the 2007 U.S. housing crisis. - Bond yields in UK and Germany fall to record low
The return on benchmark UK government bonds has fallen to a record low as investors move in to safer assets on concerns about the global economy. The yield on the UK's 10-year gilt dropped below 1.25% for the first time. The yield on the German equivalent also sank to a record low. More buyers cause bond values to rise and yields to fall, hitting annuity rates, pension fund income, and debts. Analysts see it as a “pessimistic” sign. “The low yield on government bonds paints a pretty pessimistic picture of the global economy, and suggests we are set for an extended period of low or negative inflation, and weak economic performance,” said Hargreaves Lansdown analyst Laith Khalaf. - Britain's property market is going to have a flash crash this summer
Britain's property prices are going to fall for the first time since 2012 and London's house prices will be affected the most, says the Royal Institution of Chartered Surveyors. Buyers are cautious due to the uncertainty surrounding the UK's referendum on European Union membership on June 23. RIC's chief economist Simon Rubinsohn said in his latest report that the new stamp duty tax imposed by the government on April 1 this year also has some bearing on the lack of demand and therefore the pulldown in prices. But “there is not at this point a sense that a fundamental shift is taking place in the market,” he added, which shows how property prices are likely to experience a flash crash — a short-term burst of cratering prices. This might be a relief for people looking to buy in London as the price drop is going to be the greatest in the capital. - EU Referendum … The Plan to DESTROY the UK
The UK is being set up the final destruction of the NATION STATE! On Thursday 23rd June 2016, the outcome of the EU referendum will be manipulated … but perhaps not in the way many expect! At the recent AV7 Conference, Ian R Crane presented the magnitude of deceit & deception being perpetrated by both UK & EU politicians and names those specifically tasked with bringing about the Final Destruction of ALL European Nation States. - The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret
Failure was not an option. It was July 1974. A steady predawn drizzle had given way to overcast skies when William Simon, newly appointed U.S. Treasury secretary, and his deputy, Gerry Parsky, stepped onto an 8 a.m. flight from Andrews Air Force Base. On board, the mood was tense. That year, the oil crisis had hit home. An embargo by OPEC’s Arab nations—payback for U.S. military aid to the Israelis during the Yom Kippur War—quadrupled oil prices. Inflation soared, the stock market crashed, and the U.S. economy was in a tailspin. - Bank of England in preparations for potential Brexit
The Bank of England will draw on lessons learned from the Scottish referendum and the global financial crisis as it steps up its preparations for a possible decision by Britain to leave the EU on 23 June. The first of three special funding operations by Threadneedle Street will be launched on 14 June to ensure the UK’s commercial banks have the necessary cash to cope with any turmoil caused by the uncertainty surrounding a Brexit vote. The move would just be the start of action by the Bank, which has drawn up a plan ready for use if necessary on 24 June if the UK votes to leave the EU. - Arrant Star Trek Socialism
In spite of the fact that Marx expressed nothing but disdain for his Utopian socialist predecessors such as Henri Saint-Simon and Auguste Comte, variants of Utopian socialism evidently live on. The latest iteration of the socialist dream is firmly focused on the capabilities of one of the countless fruits of free market capitalism, namely robots. It is quite ironic that something that would never have come into existence in a socialist system is now supposed to hasten the introduction of same – and of course, this time, it will be done right! The idea is basically this: as robots are becoming more sophisticated, more and more labor that is widely regarded as drudgery will become obsolete. Eventually, robots will take over the production of all the goods we need and want, and human workers will be free to pursue art, philosophy, or whatever else strikes their fancy.
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Latest News Articles – June 9, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From June 3, 2016 to June 9, 2016:
- 8 Lessons That We Can Learn From The Epic Economic Meltdown In Venezuela
We are watching an entire nation collapse right in front of our eyes. As you read this article, there are severe shortages of just about anything you can imagine in Venezuela. That includes food, toilet paper, medicine, electricity and even Coca-Cola. All over the country, people are standing in extremely long lines for hours on end just hoping that they will be able to purchase some provisions for their hungry families. At times when there hasn’t been anything for the people that have waited in those long lines, full-blown riots have broken out. All of this is happening even though Venezuela has not been hit by a war, a major natural disaster, a terror attack, an EMP burst or any other type of significant “black swan” event. When debt spirals out of control, currency manipulation goes too far and government interference reaches ridiculous extremes, this is what can happen to an economy. The following are 8 lessons that we can learn from the epic economic meltdown in Venezuela… - US Commercial Bankruptcies Soar (despite Rosy Scenario)
The post-February euphoria in the US bond market has been a sight to behold, stirred up by NIRP and QE in Japan and the Eurozone. The ECB is beginning to buy corporate bonds, including euro-denominated corporate bonds issued by US companies. This is pushing larger amounts of corporate euro bonds into the negative-yield absurdity. And it has opened all kinds of credit doors in the US. But beneath the market euphoria, reality continues to plod forward. Standard & Poor’s reported that among the companies it rates there were 12 defaults in May, which pushed its speculative-grade corporate default rate up to 4.1%, the highest since December 2010 when it was recovering from the Financial Crisis. - Helicopter Money Drops on Europe, But Not for ‘Normal’ Folks
Money for nothing, for everyone: This is supposedly the next stage of the treatment program for today’s debt-addicted economic system. Milton Friedman’s hypothetical scenario of giving every citizen direct money transfers in a desperate bid to stoke inflation is gaining traction with growing legions of mainstream economists. In their theory-addled brains, a massive one-off injection of central bank-conjured money into people’s bank accounts would do wonders for the real economy — in particular a terminally stagnating one like Europe’s. Rather than creating asset price inflation, as QE has done, it would fuel consumer price inflation. This is seen as the solution to the recently created and now unpayable mountain of debt: the central bank would simply erode it away via inflation. - This financial bubble is 8 times bigger than the 2008 subprime crisis
On July 1, 2005, the Chairman of then President George W. Bush’s Council of Economic Advisors told a reporter from CNBC that, “We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” His name was Ben Bernanke. And within a year he would become Chairman of the Federal Reserve. Of course, we now know that he was dead wrong. The housing market crashed and dragged the US economy with it. And Bernanke spent his entire tenure as Fed chairman dealing with the consequences. One of the chief culprits of this debacle was the collapse of the sub-prime bubble. - DEUTSCHE BANK: The ECB is on course to destroy the eurozone
The European Central Bank risks tearing the eurozone apart for the sake “of short-term financial stability,” and the ECB needs to reverse course before it is too late, says Deutsche Bank. A new note from the bank's group chief economist, David Folkerts-Landau, says that the ECB has gone badly off course and needs to correct itself before it makes some “catastrophic” mistakes. That correction should come, Deutsche argues, in the form of abandoning the bank's negative interest rate policy (NIRP) and stopping the mass bond-buying it has undertaken in recent years. President Mario Draghi and other senior staff at the ECB are already causing the central bank to lose credibility in both the markets and with the general public, and is hurting savers, says the bank. Here's the quote (emphasis ours): Already it is clear that lower and lower interest rates and ever larger purchases are confronting the law of decreasing returns. What is more, the ECB has lost credibility within markets and more worryingly among the public. - Andrew Maguire – This Will Send The Price Of Gold Hurtling Into The $1,400s
On the heels of Friday’s big dollar decline and surge in the price of gold and silver, today whistleblower and London metals trader Andrew Maguire spoke with King World News about what will send the price of gold hurtling into the $1,400s! Andrew Maguire: “Eric, in my opinion no one knows the true, undiluted supply/demand price of gold. But what we can be sure of is that is substantially above the current paper price. Once gold breaks out above $1,308, and large short stops are triggered, I see a very fast move in the $1,400s, which in itself… - Japan Is First To Panic; Won’t Be The Last
The most widely-reported result of the recent G-7 meeting was Japan’s attempt to convince the other major economies to admit that a crisis is imminent and take appropriately radical steps. The response seems to have been a bunch of blank stares. As India’s Business Standard noted: “G7 pact offers minimal cover for Abenomics reset. A Group of Seven compromise offers minimal cover for Shinzo Abe. The Japanese prime minister’s plan to revitalize the world’s third-largest economy needs fresh impetus. Abe didn’t get as much international backing as he might have liked from hosting the rich nations’ club. But, the summit communique can, just about, be spun his way. Abe’s counterparts, understandably, do not share his view that the world risks another Lehman Brothers-style financial crisis. That is important because Abe has inexplicably committed to raising the country’s sales tax next April, a surefire way to choke off recovery – unless a shock of this scale emerges.” - What Makes this Jobs Report so Truly Ugly?
It would have been nice if we’d been correct to the minute, but we were two months early, and therefore wrong, when we wrote on March 30, If This Plays Out, Friday Will Get Ugly. But it did play out today. At the time, we suspected that the March jobs report, released in early April, would be a debacle. We based this on an analysis of the divergence over time between the reports issued by payroll processing company ADP and the jobs reports issued by the Bureau of Labor Statistics. That divergence had been going on for months. Eventually it reverts to the mean. We postulated that March would be that month. Instead, it happened two months behind schedule, so to speak, as today’s jobs report was precisely that sort of debacle. - Here’s proof that the US dollar is insanely overvalued
Shocking. Astonishing. Jaw dropping. There’s just no other way to describe how cheap South Africa is right now. Between the worldwide decline in commodities prices, and a major crisis of confidence in the national government here, the local currency (South African rand) remains at the lowest level it’s been… ever. And that’s made nearly EVERYTHING here dirt cheap if you’re spending foreign currency… especially US dollars. Just doing something simple like eating out at a restaurant or going to the grocery store can be startling. Once you do the math and convert the prices back to US dollars, it almost seems like you’re missing a zero. This also carries over into many asset prices, including certain areas in the property market. - Employment Lies — Paul Craig Roberts
June 3, 2016. Today the Bureau of Labor Statistics announced that the US economy only created 38,000 new jobs in May and revised down by 59,000 jobs the previously reported gains in March and April. Yet the BLS reported that the unemployment rate fell from 5.0 to 4.7 percent, a figure generally regarded as full employment. The May jobs increase only covers a small fraction of the monthly growth in the labor force and, therefore, cannot account for the drop in unemployment. Moreover, the BLS reported that the labor force participation rate fell by 0.2 percentage points, bringing the decline to 0.4 percentage points over the past two months. Normally, a strong labor market, such as one represented by a 4.7% unemployment rate, causes an increase in the labor force participation rate. The question becomes: How real is the 4.7% rate of unemployment? The answer is: Not at all. - Will Silver Outperform Gold? And Why John Hathaway Believes The Gold Price Will Rise
With continued uncertainty in global markets, many wonder, will silver outperform gold? Also, why John Hathaway believes the gold price will rise. Japan led world markets lower last night, losing 2%, but that decline, as well as small changes elsewhere, were of no consequence. The early going here saw a modest amount of weakness, but that dip was (again) bought as folks jockeyed for position in front of tomorrow’s nonfarm payroll report. On a related note, the ADP report hit the magic estimated number on the button at 173,000 jobs created… - BREAKING: Gerald Celente Just Issued One Of His Most Prescient Trend Alerts Of 2016!
Today top trends forecaster Gerald Celente just issued one of his most important Trend Alerts of 2016, with exclusive bonus material only available through King World News! Oil is on a tear. Gold is shining, silver is surging and the dollar is tumbling. Over the last few weeks, Federal Reserve Chair Janet Yellen and fellow Fed members bombarded the business media with the refrain that America’s economy was strong, and to expect an interest-rate rise “in the coming months.” The Street bought it and the markets believed it. Gold prices, for example, on a 20 percent upward streak since the new year, sharply dove on the pending interest-rate-hike hype. Since the great criticism from the “investor” world is that gold yields no interest, with interest rates among developed nations in negative or near-low territory, and holding cash yields nothing, holding gold was deemed safer than holding cash. But with the Fed signaling rising rates, that rationale for owning gold no longer held and a selling wave ensued. - This Could Soon Lead to the Collapse of the U.S. Dollar
“I did not have sexual relations with that woman.” “Read my lips: no new taxes.” “We were not trading arms for hostages.” Politicians are professional liars. They do it every day. And they usually do it without any consequences. I’d bet that Bill Clinton, George H. W. Bush, and Ronald Reagan, who told the three lies quoted above, didn’t think twice about them. But the lies would all come back to haunt and humble them. Those words cost Bush senior his reelection. Congress nearly impeached Clinton. And the Iran-Contra scandal forced Reagan to apologize on national TV. The Iran-Contra scandal showed that a strange series of events in a small, obscure, and impoverished country could come back to humiliate the most powerful person in the world. - Warren Resources Files For Bankruptcy
Warren Resources Inc, an energy production company, filed for Chapter 11 bankruptcy protection on Thursday. According to a court filing, the company held operations in both California and Pennsylvania. A major slump in oil prices has pressed a number of energy production companies to file bankruptcy since early 2015. Nearly a third of production companies could be at risk of bankruptcy if prices don’t increase, says one study by the consulting firm, Deloitte. - Hercules Offshore files for bankruptcy, again
After emerging from bankruptcy in November, Hercules Offshore has a plan to sell drilling rigs while filling bankruptcy for the second time since last summer. The demand for their rigs has dropped since the waters have suddenly become overpopulated with drilling equipment. The plan includes slowly halting production by selling the remaining working rigs to pay its shareholders $12.5 million and distribute cash flow from the sales to their creditors. A.P Moeller-Maersk group is interested in their Hercules Highlander, designed for harsh environments. A lot of the older designs rest on the sea floor, making them unable to go deeper than the shallow waters of the Gulf of Mexico. - Worst Jobs Report In Nearly 6 Years – 102 Million Working Age Americans Do Not Have Jobs
This is exactly what we have been expecting to happen. On Friday, the Bureau of Labor Statistics announced that the U.S. economy only added 38,000 jobs in May. This was way below the 158,000 jobs that analysts were projecting, and it is also way below what is needed just to keep up with population growth. In addition, the number of jobs created in April was revised down by 37,000 and the number of jobs created in March was revised down by 22,000. This was the worst jobs report in almost six years, and the consensus on Wall Street is that it was an unmitigated disaster. - Barack Obama Warns Americans ‘To Be Prepared For A Disaster’
When Barack Obama speaks to the public, it is very rare that he does so without a specific purpose in mind. So why is he urging Americans “to be prepared for a disaster” all of a sudden? On May 31, Obama took time out of his extremely busy schedule to deliver an address at the FEMA National Response Coordination Center in Washington. During his speech, he stressed that every American is responsible for preparing for disasters, and that includes “having an evacuation plan” and “having a fully stocked disaster supply kit”. These are basic steps that I have been encouraging people to do for years, but if they won’t listen to me, perhaps they will listen to the man currently residing in the White House. - Dollar Bubble: The Three Reasons The US Dollar Will Soon Crash
The Dollar Vigilante’s Senior Analyst, Ed Bugos, is a genius… but he’s also somewhat of a recluse. While we have gotten access to his incredible written insights for the last six years in The Dollar Vigilante newsletter, he has always shied away from the public spotlight. Until now! Ed has decided that we are at such a crucial point in history that he is going to come out of his shell and speak more publicly about the current state of affairs in finance, money and economics. He spoke publicly for the first time at our TDV Internationalization and Investment Summit (you can see all the video presentations here) in Acapulco in February. And, I had the opportunity to sit down with him in Acapulco recently to discuss the three myths about the US dollar that most people don’t realize… yet. In this interview he talks extensively on what the great majority of the market is missing when it comes to the dollar. He believes the US dollar is currently the biggest bubble in the world and is about to pop. - Record Low 4.7% Unemployment Rate Hides Ominous Signs
The May 2016 unemployment report on the surface sounds like great news. The unemployment rate dropped to an astoundingly low 4.7%. This is a -0.3 percentage point drop from last month and a level not seen since November 2007. Yet the statistics which make up the unemployment rate actually shows something terrible. The unemployment rate dropped because 664,000 people dropped out of the labor force with almost half a million no longer counted as unemployed. The labor participation rate dropped by -0.2 percentage points while the civilian participation rate did not change. One month is not a pattern , yet seeing record low participation rates is not the way to lower the unemployment rate. Many other economic indicators show a stalled economy and the unemployment appears to be catching up with the other first quarter bad economic news. - What the EIA Doesn’t Tell Us When Comparing US Output to that of Russia & Saudi Arabia
On Monday of last week, the U.S. Energy Information Administration posted an article on their daily blog (Today in Energy) titled “United States remains largest producer of petroleum and natural gas hydrocarbons”.. The article featured a graph of our production of gas and oil vis a vis that of Russia and Saudi Arabia and went on to tell the familiar story about how fracking made it possible for our output of gas and oil to pass that of Russia in 2012, and that, as the headline indicates, we're still on top. As the week progressed, copies of the graphic from that post started showing up on other sites around the web, some to highlight the “we're number one” aspect that it showed, some to disparage the Saudis, who by the looks of that graph, barely come close. - Housing Market Hyper-Bubble-Fabian Calvo
Real estate expert Fabian Calvo says cheap money flooding into the housing market means we are nearing the end of the road for the current housing boom. Calvo explains, “What they have come up with now, through the Obama Administration and many other projects, is they have these down payment assistance programs, which is the federal government giving money to these local agencies. So, in essence, it is a no-money-down loan to fuel this housing bubble, which is really starting to verge on a ‘hyper-bubble’ like we see in the stock market today. It’s amazing to see what is happening and see it all repeat again. It’s going to spill over into this election year, and we will continue to see prices go up. We have these cheap interest rates and cheap money that has no value that is creating this artificial boom. . . . We are at the last and final stage of this current housing cycle, and that’s where the prices will take off exponentially as will the access to cheap money.” - Reporting on Trump Continues to be Unfair, Economy Getting Worse and South China Sea War Drums
It was trash Trump week as far as the mainstream media (MSM) is concerned. It covered the Trump University lawsuit wall to wall but not a peep about the ongoing criminal investigation on Hillary Clinton and her unprotected private server. One of the big stories ignored this week by the MSM is former Bill Clinton advisor and pollster Doug Schoen penning a Wall Street Journal Op-Ed piece titled “Clinton Might not be the Nominee.” The title says it all, and yet the MSM ignored this huge red flag raised by a top Democratic insider about Hillary Clinton’s viability as a Presidential candidate for the Democratic Party. - The Federal Reserve's $4.3 trillion ticking time bomb
The Federal Reserve has a big problem if it wants to raise rates again. It will have to pay U.S. and foreign banks enormous sums of money instead of U.S. taxpayers. Not only would the Fed likely draw the ire of Congress, but it could also become a target of the next U.S. president—be it Clinton or Trump. That’s because the gangbuster profits of $90 billion (plus) per year that the Fed remits to the Treasury could easily dwindle to zero. According to several leading economists, it’s also possible that the Fed will become technically insolvent (though it always has the power to print its way out of such a disastrous state). - Miami’s Condo Frenzy Ends With Inventory Piling Up in New Towers
Miami’s crop of new condo towers, built with big deposits from Latin American buyers and lots of marketing glitz, are opening with many owners heading for the exits. A third of the units in some newly built high-rises are back on the market, though most are listed for more than their owners paid in the pre-construction phase. At the current sales pace, it would take 29 months to sell the 3,397 condominiums available in the downtown area, according to South Florida development tracker CraneSpotters.com. - How and Why You Should Stop Thinking in Dollars and Start Thinking in Gold
Whether intuitively or analytically, we all know that the dollar is not such a great form of money. That’s putting it lightly though. The dollar is a terrible form of money when you take a closer look. Those who have lived longer on this earth tend to grasp this reality more clearly. Like trying to walk up a downward-moving escalator, the momentum of a falling dollar is always against you. This becomes clearer when engaging in economic planning. Whether it’s starting a business, making an investment, saving for retirement, putting something away for a rainy day, or simply making ends meet on a week to week basis, all of us have to work against a falling dollar (or fill in the blank with your fiat currency of choice.) If that’s true, why do we keep using it? - A Worrisome Pileup of $100 Million Homes
One of the latest symbols of the overinflated luxury housing market is a pink mansion perched above the Mediterranean on the French Riviera. The 13,000-square-foot property, built and owned by the fashion magnate Pierre Cardin, is composed of giant terra cotta orbs arranged in a sprawling hive. The home’s name befits its price. “Le Palais Bulles,” or “the Bubble Palace,” is being offered for sale at approximately $450 million. - China Buying Sparks Bitcoin Surge
Chinese investors are pumping up bitcoin again, sending prices up nearly 16% in the past four days, just two years after the country was at the center of a boom and bust in the crypto-currency. The four-day surge in bitcoin since Friday has added $1.2 billion in market capitalization for all bitcoin in circulation, according to data from blockchain.info. On Monday, prices moved up as high as $525.49 per bitcoin, though that’s still well below the all-time high of about $1,151 in November 2013. - China Is the Biggest Short…Ever!
Over the next 2 decades, there will be an average of 7.5 million fewer 0-55yr/old Chinese every year vs. an average annual increase of 9.5 million 55+yr/olds. And the wealthy minority of the elderly have stashed their reserves in a whole lot of expensive, vacant real estate that they intend to pass along (rent or sell) to the declining young population. What could go wrong since housing prices only go up…right!?! China, a story of a massive population and population growth. As the adult population growth began to wane, debt was substituted for the waning growth. Population growth turned to outright depopulation among the young, while all remaining population growth was among the “pig through the python” elderly. - Personal Spending Spikes Most Since Aug 2009 As Fuel Costs Surge
Having disappointed in March (just +0.1% MoM), expectations for April's personal spending were sky high at +0.7% MoM, despite expectations of a 0.4% rise in incomes. Analysts were not disappointed as the headline spending print was a 7-year high +1.0% MoM spike driven by a 3.8% MoM surge in Energy spending. With income rising as expected at 0.4% MoM, and thanks to revisions, the savings rate tumbled to its lowest since 2015. Sustainable? The 2nd biggest spike in spending since 2005… - Will You Ever Retire? Many Americans Won’t
Will you ever retire? More and more Americans will not. According to the latest data from the US Bureau of Labor Statistics, almost 20% of Americans 65 and older are still working. That’s the largest percentage of older Americans on the job since the early 1960s. With Baby Boomers hitting retirement age, it’s the largest number of Americans over 65 working ever. Surveys indicate a growing number of people plan to continue working past retirement. The number of Americans who said they intend to continue working “as long as possible” came in at 27%. A full 12% said they don’t plan to retire at all. - ALERT: Whistleblower Andrew Maguire Says China Just Put A Huge Floor Under The Gold Market
On the heels of a big dollar decline and surge in the price of gold and silver, today whistleblower and London metals trader Andrew Maguire told King World News that China has just put a huge floor under the gold market! Andrew Maguire: “China now has gold investors’ backs. As a key part of its plan, China is building up gold reserves both by way of direct, unreported PBOC (People’s Bank of China) purchases, and much more importantly, openly encouraging citizens to build up their gold investments. I drew attention to a new push by Chinese officials a few weeks back after a contact alerted me to prime time television ads being run in China where the PBOC was openly encouraging its citizens to buy gold. This is no coincidence (Laughter). And those ads by the PBOC have been running ever since then. This gold accumulation push is part of a well structured plan by China that will protect its citizens against the inevitable global currency fallout. China is stealthily winning a financial war against the short-term thinking West. - David Stockman: The Next President Will Inherit a Recession
Over the last few weeks, the mainstream has been fixated on the prospect an interest rate hike. Janet Yellen insists the economic fundamentals will support a hike. Pundits keep talking about a “strong economy.” But David Stockman recently appeared on Fox Business with Neil Cavuto and said the next president will inherit a recession. - Consumer confidence lowest since late 2015
Consumers confidence fell in May to the lowest level since late 2015 as Americans turned slightly more pessimistic about overall business conditions and the job market, a survey shows. The consumer confidence index dropped to 92.6 from a revised 94.7 in April, the nonprofit Conference Board said Tuesday. That’s the lowest level since November and well below the postrecession high of 103.8 set in early 2015. Economists polled by MarketWatch had expected the index to increase. Although Americans continue to be cautious about the economy almost seven years into a recovery, their spending habits show that they are somewhat more upbeat than the confidence report suggests. In April, for example, consumer spending rose at the fastest rate since 2009. - Dallas Fed manufacturing unexpectedly shrinks in May
Manufacturing activity in Dallas shrank in May after improving in the prior two months. The index of general business activity fell to -20.8. Economists had forecast an improvement to -8 from -13.9 in April, according to Bloomberg. New orders plunged 20 points after turning positive in the previous month. The gauges of capacity utilization and shipments also fell back below zero. - Illinois Budget Debacle Proves Politicians Can’t Fix the Problems They Create
The US faces a massive debt problem. We all know it. But politicians and government officials are either unwilling or incapable of doing anything about it. David Stockman mentioned the burden of debt in a recent interview with Neil Cavuto on Fox Business: “We have $63 trillion of total debt in this economy. The public sector – county, state, and local – is nearly $25 trillion. And we’re getting old. The Baby Boomers are retiring, 10,000 a day. In another 5 or 10 years we’re going to have a massive increase in the retired population. How do you fund all that? Who’s going to pay the taxes?” Despite the glaring magnitude of the problem, government officials seem content to keep their heads buried in the sand and ignore it until it’s too late. Even when they acknowledge it, they seem utterly incapable of effectively dealing with the issue. - Alan Greenspan: “We're Running To A State Of Disaster”
Back in March, the former Fed chairman said that we're in trouble because “productivity is dead in the water, and real capital investment is way below average because business people are very uncertain about the future.” Greenspan went on to add that entitlement programs are crowding out capital investment, and thus crowding out productivity.” Alan Greenspan is back delivering more warnings about the state of the global economy, hammering home the same key points made back in March. - More in Debt Than Puerto Rico, the Virgin Islands Rejects Rescue
Congress’s plan to throw a lifeline to Puerto Rico is making waves in the U.S. Virgin Islands. The measure that passed a House committee last week would allow for a federal control board to oversee the finances — and potentially restructure the debt — of any U.S. territory, even though Puerto Rico is the only one now asking for help. Virgin Islands Governor Kenneth Mapp and Rep. Stacey Plaskett have blasted the bill, warning that it may tarnish its standing with investors. That concern is already starting to materialize: Returns on its securities are trailing the $3.7 trillion municipal market for the first time since 2011. - Switzerland rejects proposals for unconditional basic income by overwhelming majority
Switzerland has voted by an overwhelming majority to reject proposals for a universal basic income, according to projections based on a partial count of the vote. Had it passed, anyone legally residing in Switzerland would have received a basic income of 2,500 Swiss Francs (£1,755) every month whether they worked or not. Supporters for the basic income had said that half the work done in Switzerland is unpaid such as housework and care in the community. They stated that such income would help this work become “more valued”. Critics attacked the concept as there was no plan of how to fund the costly policy, something supporters said was the responsibility of the Swiss parliament. - The Evidence Is In——-For-Profit College Students Have Huge Debts And Lower Incomes
Go to college, study hard, get a good paying job – that’s the mantra heard by most students across America as they wind down their high school careers. Intuitively taking out loans just to go to college because everyone says so isn’t a good idea, and a new study by the NBER finds that in fact, students who left for-profit schools during the 2006-2008 timeframe were worse off after attending. A key factor, as the WSJ reports, is that most of these students never earned a degree, they dropped out. Making matters worse, and certainly contributing to the fact that over 40% of student borrowers don’t make payments, is the fact that these students borrowed to attend the colleges. - It Starts: Apartment Glut in San Francisco & New York City
On Wednesday, mega-landlord Equity Residential – which “owns or has investments in 314 properties consisting of 78,351 apartment units” and whose chairman and founder is the ultimate real-estate market timer Sam Zell – warned for the second time since the end of April about apartment rental revenues. This time, it blamed a flood of new supply in two cities – the craziest, most ludicrously priced housing markets in the US: New York and San Francisco. Turns out newly signed leases aren’t meeting expectations in those cities, and they’re dragging down the company’s overall national results. - Has Fed Policy Pumped Up Another Real Estate Bubble?
The more things change, the more they stay the same. After pumping up a real estate bubble in the years leading up to the most recent economic crash, it appears the central bankers and government policymakers may have managed to orchestrate a repeat performance. Real estate mogul Sam Zell appeared on CNBC recently and hinted that a real estate bubble might be about to pop. The chairman of Equity Group Investments and of apartment mega-landlord Equity Residential said the market for apartment and office buildings in some markets have already peaked. - US Manufacturing Weakest Since 2009: “No Comfort For Those Looking For A Rebound”
Following China's drop, Japan's plunge, and Brazil's crash, US Manufacturing PMI slipped once again to 50.7 – its weakest since September 2009 amid ” subdued client demand and heightened economic uncertainty.” New orders bounce is over as it fell to its weakest since Dec 2015 and worse still input costs are surging to 9 month highs as employment suggest payrolls will remain under pressure. ISM Manufacturing data improved marginally – leaving 50% of the last 10 months in contraction and 50% in expansion. The improvement seesm based on a rise in prices paid and customer inventories – hardly a positive sustainable trend. As Markit concludes, “for those looking for a rebound in the economy after the lacklustre start to the year, the deteriorating trend in manufacturing is not going to provide any comfort.” ISM and PMI Manufacturing indices had recoupled in the last 2 months after ISM's big plunge. - Construction spending plunges 1.8% in April
Construction spending tumbled in April, due in part to a decline in residential spending, the Commerce Department said Wednesday. The 1.8% decline was well below forecasts of a 0.7% gain from economists polled by MarketWatch. The monthly data followed an upward revision to March data of about 1.5%. Weakness in April was widespread. Residential construction declined 1.5%, while public construction spending fell 2.8%. Outlays for highways were down 6.6%. - Fed Beige Book sounds subdued about economy
A key report about the U.S. economy released Wednesday offered a subdued take, leaving open the question of whether the Federal Reserve will raise interest rates this summer. The Federal Reserve’s Beige Book indicated that most districts were seeing the same “modest” or “moderate” growth through the end of May that has been the hallmark of the unspectacular expansion. One contact in Philadelphia, citing no change in drab, so-so conditions, described activity as “disappointingly stable.” - U.S. Auto Sales Took A Nosedive in May
The U.S. auto industry took a nosedive in May, with General Motors, Ford, and other manufacturers reporting lower U.S. vehicle sales for the month due to weak demand for sedans and fewer selling days. Ford, which on Wednesday reported a 6% drop to 235,997 vehicles from a year earlier, estimated a sales decrease of about 8% for the U.S. industry in May. GM, the largest U.S. automaker, said its sales fell 18% to 240,450 vehicles, a steeper decline than analysts had expected. The sales reports spooked investors who have been on the lookout for weakness in the cyclical auto industry, which has been on an upswing since the Great Recession. - Losing Ground In Flyover America——Wanting For Work, Buried In Debt
The flyover zones of America are wanting for work and buried in debt. That’s the legacy of three decades of Washington/Wall Street Bubble Finance. The latter has exported jobs, crushed the purchasing power of main street wages and showered the bicoastal elites with the windfalls of financialization. The graph below depicts the main street side of this great societal swindle at work. There are currently 126 million prime working age persons in the US between 25 and 54 years of age. That’s up from 121 million at the beginning of 2000. Yet even as this business cycle is rolling over, the 77.1 million employed full-time from that pool is still 1.2 million below its turn of the century level and accounts for only 61% of the population. On top of that, average real hourly wages have fallen by 7% (based on the Flyover CPI), as well. It might be wondered, therefore, as to how real consumption expenditures rose by $3.1 trillion or 38% during the same 16-year period? - Since 2014 The US Has Added 455,000 Waiters And Bartenders, And Lost 10,000 Manufacturing Workers
When Obama made another TV appearance earlier this week, taking credit for the Fed's reflation of the stock market as somehow indicative of an economic “recovery” (“fiction peddlers” not allowed in the crowd), he once ignore the underlying “facts” behind said recovery: here is another way of showing the unprecedented transformation in the US labor pool: since December 2014, the US has added 455,000 waiters and bartenders, while losing 10,000 manufacturing workers. Behold: “Obama's recovery.” - US created 38,000 jobs in May vs. 162,000 expected
Job creation tumbled in May, with the economy adding just 38,000 positions, casting doubt on hopes for a stronger economic recovery as well as a Fed rate hike this summer. The Labor Department also reported Friday that the headline unemployment fell to 4.7 percent. That rate does not include those who did not actively look for employment during the month or the underemployed who were working part time for economic reasons. A more encompassing rate that includes those groups held steady at 9.7 percent. - Americans Not In The Labor Force Soar To Record 94.7 Million, Surge By 664,000 In One Month
So much for that much anticipated rebound in the participation rate. After it had managed to rise for 5 months in a row through March, hitting the highest level in one year, the disenchantment with working has returned, and the labor force participation rate promptly slumped in both April and May, sliding 0.4% in the past two months to 62.60%, just shy of its 35 year low of 62.4% hit last October. This can be seen in the surge of Americans who are no longer in the labor force, who spiked by 664,000 in May, hitting an all time high of 94.7 million. As a result of this the US labor force shrank by over 400,000 to 158,466K, down from 158,924K a month ago, and helped the unemployment rate tumble to 4.7%, the lowest level since 2007. Adding the number of unemployed workers to the people not in the labor force, there are now over 102 million Americans who are either unemployment or no longer looking for work. - The Biggest Short Ever—-China’s Impaled On An Aging Population, 50 Million Overvalued Empty Apartment Units and Staggering Debt
As simply put as possible…over the next 2 decades, there will be an average of 7.5 million fewer 0-55yr/old Chinese every year vs. an average annual increase of 9.5 million 55+yr/olds. And the wealthy minority of the elderly have stashed their reserves in a whole lot of expensive, vacant real estate that they intend to pass along (rent or sell) to the declining young population. What could go wrong since housing prices only go up…right!?! - Why Is There Suddenly Such A Huge Push For ‘Mark Of The Beast’ Technology?
We always knew that it was coming. All over the world, governments and big corporations are pushing us toward a fundamentally different way of doing things. They insist that this new way will be more safe, more secure and more efficient. They are telling us that we should embrace new technology and be open to new ways of buying and selling. And they assure us that new methods of identification will not be intrusive and will simply allow them to crack down on criminals such as identity thieves, tax evaders and terrorists. But could it be possible that there is more going on here than we are being told? Could it be possible that we should actually be highly alarmed by this huge push for “Mark of the Beast” technology? - US Services Economy ‘Bounce' Dies – ISM/PMI Near “Weakest Expansion Since The Recession”
The brief April bounce in US Services economy has died as PMI slipped back to 51.3 as Markit warns “the service sector reported one of the weakest expansions since the recession.” This weakness was followed by ISM Services which plunged to its lowest since Feb 2014, crushing the hopes of the April bounce. Employment plunged into contraction and New Orders tumbled, with the surveys pointing to GDP growing at an annualised rate of just 0.7-8% in the second quarter. Bye bye April bounce!! - Buy Gold for What It Does; Not for Its Price
Will the Fed raise rates? Will it hold steady? What will the next move mean for gold? Investor and creator of Things that Make You Go Hmmm Grant Williams doesn’t really care. He’s going to buy gold regardless. In fact, during an interview at the Mauldin Strategic Investment Conference, Williams said he doesn’t really pay attention to the price of the yellow metal: “I think what the Fed does could have short-term impact, but I don’t buy gold around it. I don’t buy gold at $1,100 because I think it’s going to $1,200, I buy it for what it does, not what the price is, the price is the last consideration for me.” - Fed, again, left with egg on its face as recovery falters
All that hawkish Fed talk in recent weeks, as well as the market's knee-jerk reaction, seemed kind of silly after Friday's dismal jobs report. Expectations for a summer rate hike fell into a sinkhole Friday after the Labor Department reported that nonfarm payrolls grew by just 38,000 in May, amounting to the worst monthly jobs growth in five years. A decline in the unemployment rate to 4.7 percent came only because 664,000 Americans fell out of the workforce. - This Is What The Tap Water Looks Like In Venezuela
One week ago, we showed what the maximum amount of money one can take out of a Venezuela ATM machine looks like: the good news, one still doesn't need a wheelbarrow to transport it (if only for the time being: with hyperinflation now rampant, it's only a matter of time); the bad news: this is the equivalent of $25. Now, thanks to AP's Hannah Dreier, we get a glimpse at the other kind of socialist “liquidity” and step aside Flint, because Caracas has some funky orange stuff flowing out of the tap to offer to those who are thirsty after a day of rioting against a entrenched, dictatorial regime. It appears that Venezuela's Guri dam, which is so empty it caused the country to give public workers a “five day weekend” as it can't generate enough electricity to keep the country running, has finally run dry. - How a summer of shocks threatens to bring mayhem to the markets
Two words are back on the lips of every investor in the City. “Event risk” has begun to dominate trading floor conversations, as a slew of central bank decisions, legal rulings, and political upheavals threaten to bring an end to the calm that has descended upon the markets. After a brief break from the turbulence that dominated the start of the year, when fears over the strength of the global economy and the idea of a sharp slowdown in China unnerved money managers, volatility is set to return to the scene. Mellow May is now expected to give way to what industry veterans are already calling “flaming June”, as a calm start to the month is to be followed by shifts throughout currencies, stocks and bonds. Experts say that they expect June to be a “big month” for the markets, and that things are unlikely to settle down any time soon. - BHS to close as rescue talks end in failure
The battle to save BHS has ended in failure, after administrators concluded no buyer could be found and told 11,000 staff they would be out of work within weeks. It is the biggest collapse in British retail since Woolworths closed its doors in 2008, and the latest sign of a brutal shake-out triggered by the insurgency of online rivals and an influx of more stylish budget fashion brands. - Austin Reed To Close All Stores By End Of June
Austin Reed is to close all 120 of its stores by the end of June, affecting approximately 1,000 staff. Administrators said no viable offers were found for the business, including the store estate. However, five concessions which operate within Boundary Mills outlets, along with Austin Reed's brand, have been acquired by Edinburgh Woollen Mill. The clothing chain had a rich history, and famous customers in its heyday included Sir Winston Churchill and Elizabeth Taylor. Peter Saville, joint administrator at AlixPartners, said: “We have explored all options to sell the business since our appointment and continued to trade the business with the support of the secured creditors in what is clearly an extremely challenging retail environment. - Evidence grows of an end to the house price boom
Signs of faltering demand in the housing market are prompting estate agents and analysts to suggest England’s house price boom may be ending. Paul Smith, chief executive of the Haart agency — which has more than 100 branches — said: “We believe the nation has now neared the limit in terms of price rises.” Inquiries declined in April at their second-highest rate since 2008, according to the Royal Institution of Chartered Surveyors — a trend that Mike Prew, equity analyst at investment bank Jefferies, said “signals this slowdown could morph into a period of sustained house price deflation”. Drops in this Rics measure are strongly correlated with price falls about a year later, Mr Prew added. - Be Your Own Central Bank And Buy Gold
Gold is becoming more and more acceptable in the investment community and especially since interest rates have approached zero and in some countries even gone negative. Until recently no portfolio manager would have mentioned gold and even less recommended it. Since the beginning of the year, soon after some called gold just a useless and worthless rock going down to at least $400, a list of hedge fund managers came out with bullish calls for gold and indicated they have been buying. After years of denigrating gold, the investment profession is starting to discover the liquidity trap and acknowledge the value of cash and, more specifically, gold and its place in a diversified portfolio. It remains that gold, as a percentage of global financial assets in 2015, represented only 0.58% vs 2.74% in the ‘80s and 5.00% in the ‘60s. - Austerity policies do more harm than good, IMF study concludes
A strong warning that austerity policies can do more harm than good has been delivered by economists from the International Monetary Fund, in a critique of the neoliberal doctrine that has dominated economics for the past three decades. In an article seized on by Labour’s shadow chancellor, John McDonnell, the IMF economists said rising inequality was bad for growth and that governments should use controls to cope with destabilising capital flows. The IMF team praised some aspects of the liberalising agenda that was ushered in by Ronald Reagan and Margaret Thatcher in the 1980s – such as the expansion of trade and the increase in foreign direct investment. But it said other aspects of the programme had not delivered the expected improvements in economic performance. Looking specifically at removing barriers to flows of capital and plans to strengthen the public finances, the three IMF economists came up with conclusions that contradicted neoliberal theory. “The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries,” they said. - Young people now more likely to live with parents than partners
For the first time in modern history, more 18-to-34-year-olds live with their parents than in any other living arrangement, according to a Pew Research Center report released Tuesday. In 2014, nearly one-third of young adults lived in their parents’ home, a bigger group than those living with a spouse or romantic partner, living alone or with roommates, or living as single parents. While millennials moving back with their parents have been the butt of jokes and hand-wringing for several years, and the recession of 2009 played a part in their doing so, this shift spans more than one generation. It has been decades in the making, a result of deep-rooted societal transformations in education, work and family building. - California’s $64 Billion Bullet Train To Nowhere Gets Delayed … Again
In the late 1800s, it took railroad companies six years to lay 1,907 miles of track for what was to become the Transcontinental Railroad (or as Barack Obama calls it, the Intercontinental Railroad). Building that railroad line required tunneling through mountains — at one foot a day — building bridges — including one that spanned 700 feet — and doing all the work almost entirely by hand. As best, it will now take seven years for California to lay 119 miles of track — on relatively flat ground in the middle of nowhere. That news came from a contract revision that the Obama administration approved late last week. Instead of finishing the first leg of what is supposed to be a High-Speed Rail service from San Francisco to San Diego by 2018, the new deadline is 2022, which will be seven years after the January 2015 groundbreaking. Even when completed, the first leg will only run from Madera (population 63,105) down to Shafter, a small town north of Bakersfield. Not exactly a heavy transportation corridor. - Millions of “Subprime Consumers” Getting Credit Cards; What Could Go Wrong?
We’ve said before that the growing level of debt in the US is the elephant in the room we are going to have to address at some point. We’ve talked about the massive government debt and the drag it puts on the US economy. We’ve talked about the crushing weight of student loan debt – increasing at a rate of about $2,726 per second. We’ve talked about the mounting corporate debt, doubling since 2008. And then there is personal debt. - Jeweler Tiffany posts steepest sales drop since financial crisis
Tiffany & Co (TIF.N) reported its biggest drop in quarterly sales since the peak of the global financial crisis as a strong dollar discouraged tourists from buying its high-end jewelry and eroded revenue from markets outside the United States. The company's shares fell as much as 3 percent in morning trading on Wednesday. In the Americas region, Tiffany's sales at stores open more than a year plunged 10 percent in the first quarter. Analysts on average had expected a 9.1 percent decline, according to research firm Consensus Metrix. “Decline in customer share is evident among most shopper segments, including more affluent households,” research firm Conlumino's Chief Executive Neil Saunders said. “It is especially pronounced among affluent younger shoppers where the brand is seen as representing ‘old world luxury'.” - Puerto Rico Default Is Coming and It’s Just the Tip of the Iceberg
Good morning Puerto Rico. Default is coming. Legislation moving in Congress would set up an oversight board to guide the US territory through what essentially amounts to bankruptcy. It would not expend federal funds to bail out Puerto Rico, but would allow the island’s government to pay back debtors at less than 100%. This is just a taste of things to come. - Abercrombie & Fitch chairman says some customers are too afraid to shop – and it's destroying sales
Abercrombie & Fitch just took a major hit. The brand saw comparable sales decline 8% for this quarter, compared to a 9% decline this time last year. The parent company, which includes a brand for children and Hollister, saw comparable sales fall 4%. The main problem plaguing Abercrombie? Challenges abroad. Chairman Arthur Martinez told Business Insider that the company was “disproportionately affected” by the lack of tourists in flagship stores and international stores. He also said people in European markets are worried about personal safety following recent terrorist attacks, and that that would deter them from going out and shopping. He referenced that that terrorism fears, coupled with other factors, was “feeding into an air of caution” for consumers. - U.S. states stung by drop in April income tax revenue
U.S. state personal income taxes tumbled in the key revenue month of April due to lower investment returns from weaker equities and energy prices in 2015, a Reuters analysis of state data found. This April, personal income tax (PIT) revenue fell by an average of 9.88 percent compared to the same month last year in the 32 U.S. states and Puerto Rico for which Reuters has data. Taxes on wages and investment income are a top revenue source for the 43 states that collect it. April is the most important revenue month because it contains the tax filing deadline and the tendency of taxpayers who owe money to wait until the last minute to pay. Personal income taxes make up slightly more than a third of states' total general fund revenue, and sales taxes comprise roughly another third. Collections have been volatile in recent years, including 2013's “April Surprise,” which delivered unexpectedly high revenues to states as taxpayers sold investments to dodge an increase in federal taxes. - Miner Sees Silver Price Surging Ninefold as Global Gadgets Boom
A major Japanese electronics maker approached First Majestic Silver Corp. for the first time last month seeking to lock in future stock, a sign of supply concerns that could boost the metal’s price ninefold, according to the best-performing producer of the metal. “For an electronics manufacturer to come directly to us — that tells me something is changing in the market,” said Keith Neumeyer, chief executive officer of First Majestic, the top stock in Canada and among its global peers this year. “I think we’ll see three-digit silver,” he said, predicting the metal could surge to $140 an ounce by as early as 2019. That’s a bold forecast. While silver has rallied 19 percent this year to leapfrog gold as the best-performing precious metal, it settled lower Wednesday at $16.26 an ounce on the Comex in New York and reached a record of just under $50 in 2011. The highest projection among analysts surveyed by Bloomberg is $57 an ounce in 2019. - Manufacturing Recession Goes Global as Demand Withers
The “strong dollar” has been blamed for the manufacturing doldrums in the US that started over a year ago. But then manufacturing in other countries should boom, or at least not decline, but that’s not the case. Manufacturing is sick and weakening in just about every major economy! References to 2009 and the Global Financial Crisis keep popping up in the latest spate of reports because that’s how bad it has gotten. - Hedge Funds Are Betting Record Amounts on Meltdown of Australian Banks and Housing Bubble
It has been called the “widow maker trade,” based on how short sellers have been dealt with over the past few years. The fundamentals have been inviting: Australia has been in a fully blooming housing bubble. Households are the most indebted in the world, based on debt to disposable income. To maintain the housing bubble, the central bank slashed interest rates to record lows (1.75%). The government wants to keep the bubble going for as long as possible. So regulators close their eyes, according to media reports, to questionable or even illegal lending practices. Home prices, after soaring for years, are clearly unsustainable. But just because it’s a bubble doesn’t mean it has to implode on schedule. It will implode, as all bubbles do, but on its own time. If short sellers get the timing wrong, they’ll get run over by market euphoria. Hence, “widow maker trade” for betting against the housing bubble by shorting the banks. The biggest four banks in Australia are special creatures. Total assets of Commonwealth Bank of Australia (CBA), Australia & New Zealand Banking Group (ANZ), Westpac Banking Corp (WBC), and National Australia Bank (NAB) amount to 220% of Australia’s GDP! - Ultimate Market Timer Sam Zell: “Know What the Problem Is?”
“No one has ever accused me of not being a realist,” Sam Zell told CNBC. The chairman of Equity Group Investments and of apartment mega-landlord Equity Residential was talking about the markets for office and apartment buildings in some major cities that have already peaked. “Overall we’ve come off this extraordinary period of liquidity and this extraordinary period of low interest rates,” he said. “I think we’re unlikely to see a repeat of that going forward, and I think we’re going to see more supply in what had been pretty tight markets.” And he has been selling. Back in 2007, he once again proved his sense of market timing. As the commercial property bubble was already teetering, he sold Equity Office Properties Trust to Blackstone for $23 billion, not including $16 billion in debt. Then prices crashed, and commercial property defaults hit the banks. As the dust was settling at the end of the Great Recession, he went on a shopping spree. Now he’s selling again, unloading multifamily properties at peak prices on a massive scale just when a multi-year construction boom is flooding the market with new supply.
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Latest News Articles – June 2, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From May 27, 2016 to June 2, 2016:
- Fresh Mainstream Nonsense on Gold Demand
We and many others have made a valiant effort over the years to explain what actually moves the gold market (as examples see e.g. our article “Misconceptions About Gold”, or Robert Blumen’s excellent essay “Misunderstanding Gold Demand”). Sometimes it is a bit frustrating when we realize it has probably all been for naught. This was brought home to us again in a recent missive posted at Kitco, which discusses an RBC research note on gold. In a way, it is actually quite funny. The post at Kitco is titled “Gold’s ‘One-legged’ Rally Is Cause of Concern”. We can assure you it is not of “concern” to us. But we did wonder why the rally was supposedly “one-legged”, so we decided to read on. - The Fed Has Tightened Policy A Lot More Than You Think
Federal Reserve Chair Janet Yellen and her colleagues have tightened monetary policy by a lot more than their benchmark interest rate increase would suggest. It's just that they've done it in the shadows. The so-called shadow federal funds rate rose about 300 basis points from the middle of 2014 through the end of last year as the central bank tapered, then ended its asset purchase program and prepared the way for its single rate increase in December. The shadow rate's increase helped fuel a rise of the dollar that depressed U.S. exports and economic growth, according to James Hamilton, an economics professor at the University of California at San Diego. - China’s Rolling Boom-Bust Cycle
There is a mysterious figure making regular appearances in China’s government mouthpiece “People’s Daily”, which simply goes by the name “authoritative person” (AP). This unnamed entity always tends to show up with bad news for assorted speculators, by suggesting that various scenarios associated with monetary and/ or fiscal stimulus are actually not in China’s immediate future. - Saudi Arabia Considers Paying Contractors With IOUs
Saudi Arabia is considering using IOUs to pay outstanding bills with contractors and conserve cash, according to people briefed on the discussions. As payment from the state, contractors would receive bond-like instruments which they could hold until maturity or sell on to banks, the people said, asking not to be identified because the information is private. Companies have received some payments in cash and the rest could come in the “I-owe-you” notes, the people said, adding that no decisions have been made on the measures. - Regulators Warn 5 Top Banks They Are Still Too Big to Fail
The nation’s top bank regulators have added an unexpected voice to the growing chorus of critics worried that the biggest American banks, nearly eight years after the financial crisis, are still too big to fail. The Federal Reserve and the Federal Deposit Insurance Corporation said on Wednesday that five of the nation’s eight largest banks — including JPMorgan Chase and Bank of America — did not have “credible” plans for how they would wind themselves down in a crisis without sowing panic. That suggests that if there were another crisis today, the government would need to prop up the largest banks if it wanted to avoid financial chaos. - The Consequences Of $50 Oil
On Thursday Brent crude rose above $50 while the WTI rose to $49.85. The rise in prices came after the EIA reported a dramatic fall in U.S. inventories. The weekly drop of 4.2 million barrels, far more than the 2 million that was expected, triggered a sharp rise in a market which had been growing increasingly bullish, sending the Brent price above $50 on Thursday morning. It is the first time in seven months that the price has reached this level. It’s a recovery that came much more quickly than analysts expected. Since reaching a low of $27 in January, both Brent and WTI have risen by nearly 80 percent, an impressive achievement considering the general slump in commodities. Concerns from the Energy Information Agency (EIA) that the world would “drown in over-supply” in 2016 have been allayed. - Russia and China buy tons of gold getting ready for dollar collapse
Russia and China buy gold to get rid of the weakening dollar. The weakening of the US dollar will become even more noticeable. Increasing their gold reserves, Moscow and Beijing make their economies stronger, the Spanish newspaper El Pais wrote. According to the publication, central banks of Russia and China have been buying a lot of gold recently. During the past 15 months China has increased its gold reserves by 70% to 1,700 tons, becoming the world's sixth country with largest reserves of gold. Russia's gold reserves have grown by 21 percent to 1,460 tons. During the crisis, the price of gold grows, El Pais says. Demand for gold remains stable. From 2009 to 2015, China was buying 6-8 tons of gold a month, but in the summer of 2015, the country doubled its appetite for the precious metal. Russia started buying gold in 2015, increasing purchases against the backdrop of falling oil prices. - China has conducted a ‘war' – not trade – with steel, experts say
Despite China signaling moves to cut its excess steel production capacity, industry chiefs say the country has declared a metals “war” that has had a “devastating” impact for the rest of the world's industry. Overcapacity in the steel industry has been a thorn in the side of the sector in recent years, pushing prices down and making it harder for some steel companies to survive. China's low-cost metal producers have been widely cited as the main culprit for the glut. In particular, the world's second largest economy has been accused of “dumping” cheap steel on to global markets, due to a slowdown in domestic demand, in a bid to gain market share. However Beijing has denied any wrongdoing and has said that its costs are lower than other producers. - Central Bankers put Ponzi and Madoff to Shame
Charles Ponzi must be turning in his grave! His pyramid scheme in 1920 guaranteed returns of 50% in 50 days and 100% in 100 days. And initial investors clearly achieved these returns but most of them were too greedy to cash in. His total scheme “only” lost $20 million ($225 million in today’s money) for the investors. In comparison, Madoff cost his investors $18 billion. At least Ponzi became famous for his achievement. So far Madoff has not achieved fame. But both Ponzi and Madoff were small time crooks compared to governments and central banks today. Because whether we take, Japan, China, the EU or the USA, they have all created Ponzi schemes which are exponentially bigger than what Ponzi did. Admittedly no government is promising the 50% return that Ponzi did or Madoff’s 10-12%. Instead they are giving investors of their “Ponzi” bonds the illusion that they will receive the capital back. To paraphrase Mark Twain, investors are neither going to get the return ON their money nor the return OF their money, at least not in real terms. - Peter Schiff: June Rate Hike Immaterial; Rate Cuts and Quantitative Easing Up Next
Will the Federal Reserve raise rates in June? Peter Schiff says it’s immaterial. Peter appeared on CNBC’s Fast Money and created a firestorm when he said he sees this as a repeat of what happened at the end of last year and suggested everybody knows the Fed is at the end of its tightening cycle.# - China's Largest Bank is Quiety Cornering the Market for London Physical Gold
We have followed the ownership changes of London's massive vaults with keen interest ever since our December 2014 article when we reported that Deutsche Bank's gold vaule was for sale in “Massive 1,500 Ton Gold Vault For Sale In The Heart Of London, One Previous Owner, Asking £4,500,000 O.B.O.” The fate of that particular vault was revealed earlier this year when Reuters reported that none other than China's largest bank, ICBC Standard Bank, was buying the lease on Deutsche Bank's London gold and silver vault, “enlarging its footprint in the city's bullion market”. The Chinese and South African lender is aiming to fill the gap left by Western banks, which are retreating from commodities to cut costs and reduce regulatory burden. “They (ICBC Standard Bank) have taken on the lease for the vault,” the first source said. Deutsche Bank's vault became operational in June 2014 and has a capacity of 1,500 tonnes. It was built and is managed by British security services company G4S. “The figure that was initially talked about may have been around $4 million, but it's way lower now,” a second source said, without disclosing the figure paid for the vault. - Trump: ‘Who the Hell Cares if There’s a Trade War?’
Donald Trump responded on Thursday to conservatives critical of his proposal to impose a tariff on imported goods, characterizing them as “dummies” at a New Jersey fundraiser for Gov. Chris Christie. “These dummies say, ‘Oh, that’s a trade war.’ Trade war? We’re losing $500 billion in trade with China. Who the hell cares if there’s a trade war?” Trump rhetorically asked the audience. “Think of it,” the presumptive Republican nominee added. “$500 billion and they’re telling me about a trade war.” - BNN Advisor: Automated advice shakes up the investment industry
There’s a “new” player who’s changing the landscape for the entire investment advisor industry. It’s the emergence of the robo-advisor, and while these online advisors manage about $50 billion dollars in assets globally today, that number is expected to balloon to $2 trillion in the next four years. With our panel of advisors, BNN examines these new online tools that use software to help investors build their portfolios. - The CME Admits Futures Trading Was Rigged Under Old System
Ask any trader what they believe to be the hallmark feature of any “rigged market” and the most frequent response(in addition to flagrant crime of the type supposedly demonstrated every day by Deutsche Bank and which should not exist in a regulated market) will be an institutionally bifurcated and legitimized playing field, one in which those who can afford faster, bigger, more effective data pipes, collocated servers and response times – and thus riskless trades – outperform everyone else who may or may not know that the market is legally rigged against them. Think of it as baseball game for those who take steroids vs a ‘roid free game, only here the steroids are perfectly legal for those who can afford them. Or like a casino where the house, or in this case the HFTs, always win. However, as it turned out, the vast majority of the public had no idea that a small subset of the market was juicing, despite our constant reports on the topic since 2009, until the arrival of Michael Lewis' book Flash Boys, which explained the secret sauce that made all those HFT prop shops into unbeatable “trading titans”: frontrunning. - David Dayen’s ‘Chain of Title' Confirms What You Always Suspected: The Game is Rigged
Chain of Title should be required reading in every college-level business ethics class in America. At a time when “business ethics” is an oxymoron, perhaps the current generation that adores Bernie Sanders might better understand the dangers big banking monopolies hold. David Dayen’s newly released non-fiction book, Chain of Title, unearths a system with the power and collateral to stonewall millions of homeowners from obtaining one very simple answer: Who owns my mortgage? If you haven’t been able to wrap your head around why the federal government has failed to prosecute one banker for the foreclosure crisis there is a very simple answer that Chain of Title alludes to. The federal government has a dark secret: the trusts are empty and the falsified notes cannot be traced back to their true owners so they must be “recreated” if a default occurs. This means that the investors, the pensions and the trusts own nothing. It also means that the banks now own everything- including the U.S. federal government. It hardly matters that we have separation of powers if the bankers and elite control all three branches. - MELTDOWN 2016? China Set To Implode GLOBAL Economy LATE SUMMER (Again)… INSIDER SAYS GET PREPARED NOW! Brexit… Soros Buying Up Massive Amounts Of Gold Bullion
China’s Communist Party goes way of Qing Dynasty as debt hits limit. Nobody rings a bell at the top of the credit supercycle, to misuse an old adage. Except that this time somebody very powerful in China has done exactly that. China watchers are still struggling to identify the author of an electrifying article in the People’s Daily that declares war on debt and the “fantasy” of perpetual stimulus. Written in a imperial tone, it commands China to break its addiction to credit and take its punishment before matters spiral out of control. If that means bankruptcies must run their course, so be it. The 11,000 character text – citing an “authoritative person” – was given star-billing on the front page. It described leverage as the “original sin” from which all other risks emanate, with debt “growing like a tree in the air”. - Wells Fargo launches 3% down payment mortgage
First-time buyers and low- to moderate-income buyers have largely been sidelined by today's housing recovery. The common cry is too-tight credit. Lenders have kept the credit box restrictive because they are gun-shy from the billions of dollars in buy backs and judicial settlements stemming from the mortgage crisis that they still face today. Now, the nation's largest lender, Wells Fargo, says it is opening that box with a new low down payment loan — a loan it claims is low-risk to the bank. - Understanding Societal Collapse: Warnings From Venezuela's Crisis
As we write about the risks of our over-indebted economy, of our unsustainable fossil fuel-dependent energy policies, and our accelerating depletion of key resources, it's not a far leap to start worrying about the potential for a coming degradation of our modern lifestyle — or even the possibility of full-blown societal collapse. Sadly, collapse is not just a theoretical worry for a growing number of people around the world. They're living within it right now. - 25 Years, $13 Billion Lost: Connecticut Income Tax Continues To Fail
Twenty-five years ago, amid economic turmoil and a looming budget crisis that put legislators at each other’s throats, the then-governor of Connecticut made a fateful decision. Unsure of the best way to dig Connecticut out of its financial hole, Governor Lowell Weicker implemented an income tax. The Nutmeg State would certainly come to rue that day. Of course, Governor Weicker did not anticipate that the adoption of an income tax would send the state into a tailspin. In fact, as he announced his plans on May 15, 1991, he said, “I feel great.” In 2015, however, Connecticut taxpayers are feeling less than great. Despite Governor Weicker’s promises – that the income-tax revenue would be spent responsibly, that the additional dollars would correct Connecticut’s financial course – the new tax only led to further disarray and decline. - What happens when you're deported to Britain?
A widowed mother-of-five who has lived in Australia for most of her life is facing deportation to the UK. What awaits her when she gets off the plane, asks Claire Bates. Kelly Webb, 30, hasn't seen Britain since she moved to Australia at the age of two. But she has a British passport, so could be sent back to the UK after serving a prison sentence for burglary. It's not an unusual situation. In 2015, 71 out of the 134 deported prisoners helped by the charity Prisoners Abroad had been residents of Australia, Canada or the US for many years. The charity is the first point of call for prisoners facing deportation, and guides clients through the resettlement process. - Is The Market Priced For A Summer Rate-Hike?
Last November, capital markets were discounting a rate hike five months later, based on Fed Funds futures. Same story today. Last November, the S&P 500 was trading near 2100. Same story today. Last November, VIX levels were around 14. Same story today. Last November, instead of waiting five months, the Fed hiked rates one month later; the S&P dropped by 10% over the next eight weeks… And as BofAML's Savita Subramanian warns, hiking during a profits recession usually hasn't ended well. Admittedly, other factors contributed to the decline, but history is rhyming, and BofAML thinks a rate hike this summer could drive some downside. While Fed Funds futures prior to mid-May implied little to no chance of a summer hike, the release of the latest FOMC meeting minutes have shifted futures to a 30% probability of a June hike and a 50% probability of a July hike. - BSI Shut by Singapore as Swiss Start Probe; EFG Takes Over Bank
Singapore is closing Swiss bank BSI SA’s unit in the city-state and Switzerland began criminal proceedings against the firm, as investigations into a troubled Malaysian state fund reverberate throughout the private bank’s international operations. The Monetary Authority of Singapore said it will withdraw BSI Bank Ltd.’s license for breaches of money laundering rules and impose S$13.3 million ($9.6 million) in financial penalties on the BSI unit for 41 breaches, including its failure to conduct due diligence on high-risk accounts and monitor suspicious customer transactions. Singapore authorities have also referred six senior BSI executives to the public prosecutor, including the private bank’s former chief executive officer in the city state and his deputy. - Core Durable Goods Orders Slump As Inventories Decline For 4th Straight Month
Core Durable Goods Orders tumbled 0.8% MoM and 6.7% YoY – down 15 of the last 18 months. However, following drastic revisions across the entire time series and thanks to a surge in military spending (+3.7%) and non-defense aircraft (+64.9% – bringing back memories of Boeing's aberration from a year or two back) the headline Durable Goods print rose 3.4% MoM. More worrying for GDP enthusiasts is the 0.2% decline in durable goods inventories in April for the 4th straight month. Not a pretty picture under the hood…. - Building robot McDonald's staff ‘cheaper' than hiring workers on minimum wage
A former McDonald's CEO is warning that robots will take over jobs at the huge enterprise – because it's cheaper than employing humans. He said that buying highly skilled robotics is cheaper than employing people at the fast food restaurant. The worrying forecast comes as he warns huge job losses are imminent, and that it's ‘common sense' to replace humans in the workplace. - Richmond Fed Crashes Into Contraction From 6 Year Highs, Biggest Drop In History
Having spiked mysteriously to 6 year highs in March (from 4 year lows in Feb), Richmond Fed's manufacturing survey crashed back into contraction in May (printing -1 against =14 prior and +8 expectations). Weakness was broad-based across the entire set of subcomponents with New Orders plunging, shipments crashing, employees and workweek tumbling, and worse still future employment and capex expectations dropped precipitously. The drop in the last 2 months is the largest in the 23 year history of the survey. - Negative interest rates spark record gold rush as demand for safe deposit boxes jumps
Investors snapped up gold at a record pace in the first three months of 2016 as global growth fears intensified and central banks slashed interest rates deeper into negative territory. Concerns that Britain could leave the EU also triggered a spike in demand across Europe where ” investors were plagued by lingering Brexit fears,” according to the World Gold Council. - DEUTSCHE BANK: The Fed is probably screwed
The Federal Reserve wants to do two things right now: Prepare markets for future interest rates hikes & Raise interest rates. But the problem, according to Deutsche Bank's global economics team, is that by preparing markets for future interest rate hikes the Fed potentially hampers its ability to actually carry out those hikes in the future. Said another way, the Fed appears stuck in a negative feedback loop wherein suggestions that higher rates are coming create the unsettled conditions that ultimately force the Fed to keep rates right where they are. And so on. - Oil Price Tops $50 As Canada Fires Fuel Recovery
The barrel price of Brent Crude oil, which is seen as the global benchmark of oil industry performance, has reached $50 for the first time in 2016 as supply problems due to wildfires in Canada continue to have an impact. The oil industry has been in turmoil over the past several years, with the price of Brent Crude hitting 13-year lows of less than $28 a barrel in February amid concerns of a global oversupply and disruption in the world markets. The $50 milestone was reached in the early hours of the morning during Asian trading following the news that US inventories of oil had fallen in response to disruption in Canada. Wildfires in the country have resulted in a cut in oil output by up to a third. The value was later holding strong at $50.16. - Should I Be Worried About Gold Confiscation?
One of the common questions we hear from gold buyers is, “Is it possible that the government might come after my gold and confiscate it?” In a time when the governments are waging a war on cash, it’s not hard for people to imagine that a war on gold is next. There is some precedence for this, after all. On April 5, 1933, Franklin D. Roosevelt’s Executive Order 6102 “[forbade] the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States.” Americans who owned gold were told to deliver their gold to the bank and in exchange receive paper dollars of equivalent value, $20.67 per ounce at the time. - Former McDonalds CEO Crushes The Minimum Wage Lie: “It's Cheaper To Buy A Robot Than Hire At $15/Hour”
While this should come as no surprise to any rational non-establishment-teet-suckling economist (and certainly not to our readers), former McDonalds' CEO Ed Rensi continued his crusade against the naive “solution” to poor living standards that has been peddled by a clueless administration in the form of a higher federal minimum wage, and after he patiently explained one month ago that “the $15 minimum wage demand, which translates to $30,000 a year for a full-time employee, is built upon a fundamental misunderstanding of a restaurant business just do the math” Rensi found that nobody has still done the math. Which is perhaps why the ex-CEO reappeared on Fox Business yesterday to explain to Maria Bartiromo that as fast-food workers across the country vie for $15 per hour wages, many business owners have already begun to take humans out of the picture, McDonalds most certainly included. - US Government Quietly Cuts Historical Capex Data By Billions Of Dollars
While Wall Street looked upon today's Durable Goods report with caution, noting the substantial beat in the headline print which was entirely as a result of a surge in nondefense aircraft orders (read Boeing) which soared by 65%, there was substantial weakness below the surface especially in the core capex print, the capital goods orders nondefense ex-aircraft, which disappointed significantly, sliding 0.8% on expectations of a 0.3% rebound. However, that was just part of the story. A far bigger part was missed by most because as always Wall Street was focused on the sequential change, and not on the absolute number. As it turns out, the Department of Commerce decided to quietly revise all the core data going back all the way back to 2014. In doing so it stripped away about 4% from the nominal dollar amount in Durable Goods ex-transports, where the March print was slashed from $154.7 Billion to $148.3 Billion… - Russia's ‘Iron Man' robot soldier is country's latest terrifying war weapon
Meet Ivan the Terminator – Russia's robotic answer to Iron Man that could be about to change military warfare forever. The terrifying new robot soldier is the latest in the country's list of high-tech weaponry as it competes with the US and China in the artificial intelligence stakes. According to Russian newspaper Komosomolskaya Pravd, the droid is designed “to replace the person in the battle or in emergency areas where there is a risk of explosion, fire, high background radiation, or other conditions harmful to humans. “The development of a special military robot is one of the priorities of military construction in Russia.” The Iron Man machines are remotely controlled, but there are fears that they could become completely autonomous in the future. - Ottawa posts $2B deficit for fiscal year as income tax revenue falls in March
The federal government posted a deficit in line with what was projected in its spring budget as personal and corporate income tax revenue fell in March. According to its preliminary estimates, the Finance Department said today there was a $2 billion deficit for the government's latest fiscal year. However, that was before any year-end adjustments as well as a $3.7 billion commitment to benefits for veterans. The spring budget had projected a $5.4 billion deficit for the 2015-16 fiscal year. The final results are expected to be released in the fall, but the Finance Department said the results were “broadly in line” with what was projected in the budget. For March, the last month of the fiscal year, the government posted a $9.4 billion deficit compared with a deficit of $3 billion in the same month last year. The shortfall came as government revenue fell $5 billion due to lower personal and corporate income taxes, offset in part by higher excise taxes and duties. Program spending increased $1.3 billion, while public debt charges gained $100 million. - Paris and Berlin ready ‘Plan B’ for life after Brexit
European leaders have stepped-up secret discussions about a future union without Britain, drawing-up a “plan-B” focused on closer security and defence co-operation in the event of a UK vote to leave the EU. At several overlapping meetings in recent weeks — in Hanover, Rome and Brussels — EU leaders and their most trusted aides have discussed how to mount a common response to Brexit, which would be the bloc’s biggest setback in its 60-year history. More than a dozen politicians and officials involved at various levels have sketched out to the Financial Times the ideas for concerted action to “double down on the irreversibility of our union” — as well as the many internal divisions that stand in their way. Rather than attempt a sudden lurch to integrate the eurozone, Chancellor Angela Merkel of Germany and President François Hollande are instead eyeing a push to deepen security and defence co-operation, a less contentious initiative that has appeal beyond the 19-member euro area. - Eurozone RUPTURE: Now SPAIN threatens to tear EU apart as banks LOSE €1.4BILLION in a day
ANIC over the stability of Spanish banks hit fever pitch yesterday, exposing yet another rupture in the financial system holding the eurozone together. Banco Popular, one of the Spain's leading financial firms, caused mayhem after admitting that it needed billions to bolster its balance sheet. Shocked investors dumped shares in the firm, with the bank stock's value plunging by 24 per cent this morning, after the cash call and plans to issue another 2 billion shares. It resulted in €1.4billion being wiped off the value of the bank's share price. - Venezuela Stepping Up Gold Selling as Petrodollars Dry Up
Venezuela has ratcheted up efforts to sell off its gold holdings and raise the cash needed to fund imports and pay back debts after the collapse in oil throttled the economy. The country cut its gold reserves by 16 percent in the first quarter, following a 24 percent reduction in 2015, according to data from the International Monetary Fund. The 1.38-million ounce reduction was the largest by any central bank since Switzerland sold 3.2 million ounces in the third quarter of 2007, and coincided with continued increases in gold reserves in mainland China. - New financial MELTDOWN set to sink EU as German banks lose £14,292,610,000.00 in 90 DAYS
EUROPE'S biggest economy was plunged into fresh chaos tonight amid warnings a new financial crisis in Germany could destroy the EU. Shares in Germany's two biggest lenders – Deutsche Bank and Commerzbank – fell sharply again as panic gripped global markets. They have now seen their combined market value plummet by more than £14BILLION in the past three months. Deutsche Bank shares fell by nearly four per cent to close at an all-time low amid turmoil not seen since the depths of the financial crisis in 2009. Meanwhile shares in Commerzbank, Germany's second biggest lender, fell even further, by 4.65 per cent, to close at their lowest level in nearly two-and-a-half years. - Q1 2016 Canadian Silver Maple Sales Surge To Highest Record Ever
The Royal Canadian Mint just published its Q1 2016 Report, and the silver bullion coin sales figures were stunning to say the least. Not only did sales of Canadian Silver Maple Leafs surpass its previous record during the third quarter last year, it did so by a wide margin. Why is this such a big deal? Because Q1 2016 sales of Silver Maples topped the Q3 2015 record, without surging demand and product shortages. Last year, there was a huge spike in silver retail investment demand due to the supposed “Shemitah” or the collapse of the broader stock markets. Investors piled into silver in a big way as they perceived a year-end market crash was inevitable. - Outrage as EU chief calls for EURO ARMY commanded by Brussels to take on Russia and IS
BRUSSELS’ top bureaucrat came under fire yesterday after calling for a European army to be set up as part of a common foreign and security policy. Jean-Claude Juncker – backed by leading German politician’s – said a “euro-army” commanded by Brussels would provide a “more credible” response to threats, including from Russia. But his comments sparked a storm of protest in Britain, where eurosceptic campaigners have long warned of Brussels’ ambitions for its own defence force. Ukip MEP and defence spokesman Mike Hookem said: “Ukip have been ridiculed for years and branded scaremongers for suggesting that the UK’s traditional parties were slowly relinquishing control of our defence and moving toward a European Army. “However, yet again, UKIP’s predictions have been proved correct. - Gold Prices Should Rise Above $1,900/oz -“Get In Now!”
Gold prices are likely to rise above $1,900/oz in the next phase of the bull market and investors should “get in now,” Chief Market Analyst of the Lindsey Group, Peter Boockvar told CNBC’s “Futures Now” yesterday. “This is just the beginning of a new bull market in the metals,” Boockvar believes. Ultimately, Boockvar believes that the 2011 highs of around $1,900 for gold are not only reachable, but surpassable, as he reasoned that bull markets historically exceed the previous bull market peak at some point. As Boockvar sees it, it’s just a matter of when. - And Another Week Of Selling: “In 2016, Equity Funds Have Lost The Largest Ever Outflow For The Asset Class”
For many weeks in a row now we have been asking, mostly jokingly, how with everyone else (both retail and “smart money”) selling, and with stock buybacks sharply lower in recent months, is the market higher. Specifically, who is buying? This question is no longer a joke. After this week's 17th consecutive outflow by “smart money” funds (mostly on the back of surging hedge fund redemption), moments ago we got the latest Lipper fund flow data. It was, as BofA put it, “unambiguous risk-off weekly flows.” As BofA also put it: “Equities continued to experience outflows and lost $3.32bn (-0.1%) last week, their 4th consecutive decline. Year-to-date, equity funds have lost $58.6bn (-0.6%), the largest ever dollar outflow in any 22 week period for the asset class” - Japan’s Abe points to 2008 crisis as G7 leaders debate global risk
Group of Seven leaders voiced concern about emerging economies at a summit in Japan on Thursday as their host, Prime Minister Shinzo Abe, made a pointed comparison to the 2008 global financial crisis but not all his G7 partners appeared to agree. The G7 leaders did agree on the need for flexible spending to spur world growth but the timing and amount depended on each country, Deputy Chief Cabinet Secretary Hiroshige Seko told reporters, adding some countries saw no need for such spending. - Bank of Montreal to cut 4% of workforce, memo says
Bank of Montreal (BMO.TO) will shed around 4 per cent of its 46,000 workforce as part of a drive to cut costs, staff were told in a memo on Wednesday after the lender reported a decline in quarterly profit. Chief Executive Bill Downe said the move, which will see around 1,850 jobs go, was a response to changing customer behavior and the advent of new digital technologies. “We have taken this step to position the bank for what lies ahead – and to account for the structural changes underway in the financial services industry,” Downe said in the memo seen by Reuters. - World’s 16 biggest banks, including RBC, ordered to face Libor lawsuits in ruling court warns could ruin them
Sixteen of the world’s largest banks including JPMorgan Chase & Co. and Citigroup Inc. must face antitrust lawsuits accusing them of hurting investors who bought securities tied to Libor by rigging an interest-rate benchmark, a ruling that an appeals court warned could devastate them. The appellate judges reversed a lower-court ruling on one issue — whether the investors had adequately claimed in their complaints to have been harmed — while sending the cases back for the judge to consider another issue: whether the plaintiffs are the proper parties to sue, in part because their claims, if successful, provide for triple damages that could overwhelm the banks. - Lufthansa to suspend flights to Venezuela
The German airline, Lufthansa, has announced that it will suspend flights to Venezuela from 18 June due to economic difficulties in the country. The company also said currency controls in Venezuela made it impossible for airlines to convert their earnings into dollars and send the money abroad. Venezuela's economy has been hit hard by a sharp drop in the price of oil – the country's main source of income. Venezuela has high inflation and severe shortages of basic goods. In a statement, Lufthansa said that it “will be forced to suspend our service between Caracas and Frankfurt as of 18 June”. It noted that the demand for international flights to Venezuela had dropped in 2015 and in the first quarter of the current year. However, it said it hoped to restore services in the near future. - MELTDOWN 2016? China Set To Implode GLOBAL Economy LATE SUMMER (Again)… INSIDER SAYS GET PREPARED NOW! Brexit… Soros Buying Up Massive Amounts Of Gold Bullion
China’s Communist Party goes way of Qing Dynasty as debt hits limit. Nobody rings a bell at the top of the credit supercycle, to misuse an old adage. Except that this time somebody very powerful in China has done exactly that. China watchers are still struggling to identify the author of an electrifying article in the People’s Daily that declares war on debt and the “fantasy” of perpetual stimulus. Written in a imperial tone, it commands China to break its addiction to credit and take its punishment before matters spiral out of control. If that means bankruptcies must run their course, so be it. The 11,000 character text – citing an “authoritative person” – was given star-billing on the front page. It described leverage as the “original sin” from which all other risks emanate, with debt “growing like a tree in the air”. - How Bad Are The US Computer Systems? An 8” Floppy Disc Houses Nuclear Coordinate Data
If you thought that $80 billion a year would be a sufficient enough budget for the US government to systematically upgrade its computer systems, think again. In a report released by nonpartisan congressional investigators found that about $60 billion of the government's $80 billion IT budget goes straight to maintenance just to keep the aging technology running, not to modernization according to ABC News. - FRANCE STRIKE: ‘The Workers Fight Back’
All over France strikes and demonstrations are taking place. People are protesting against the French government’s attempt to reform labour laws which would make it easier to hire and fire workers. French labour laws have always been seen as an obstacle to progress by the ruling class due to the modest protection they afford workers. Since the popular front of 1936 and in particular the National Council of the Resistance formed after the liberation in 1945, French worker made significant gains. These ‘acquis sociaux’ or social gains are now being brutally rolled back by a powerful oligarchy bent on driving down the price of labour and increasing the profits of capitalists. - This Is How Much Your Health Insurance Payment Is About To Jump By
It's official: years of warnings that Obamacare will lead to dramatic increases in healthcare premiums are about to be validated. As the WSJ writes, big health plans stung by losses in the first few years of the U.S. health law’s implementation are seeking hefty premium increases for individual plans sold through insurance exchanges in more than a dozen states. To be sure, we have extensively covered the imminent danger of rising healthcare prices as a result of Obamacare's intrusive intervention in the insurance sector; however now that this is about to become mainstream information, we expect consumers to hunker down and save even more in anticipation of what is about to be a shock price increase for millions of middle-class American families. As the WSJ reports, the insurers’ proposed rates for individual coverage in states that have made their 2017 requests public largely bear out health plans’ grim predictions about their challenges under the health-care overhaul. According to the insurers’ filings with regulators, large plans in states including New York, Pennsylvania and Georgia are seeking to raise rates by 20% or more. - Former IMF economist asserts that gold is money as good as government bonds
GoldCore's Mark O'Byrne this week calls attention to commentary written this month by Harvard economics professor Kenneth Rogoff recommending that countries diversify their foreign exchange holdings away from the government bonds of developed countries and into gold. Rogoff's argument seems to be that with interest rates already effectively at zero or below, there's nothing to be gained through the purchase of such bonds, while gold is a “low-risk asset” that offers the possibility of capital appreciation. But then Rogoff makes what from anyone else would be considered the rookie mistake of asserting that “gold does not pay interest,” as if gold isn't leased for interest by Western governments every day in huge amounts and as if gold leasing isn't a primary mechanism of gold price suppression by those governments, the governments whose bonds Rogoff acknowledges are becoming less attractive as investments. - We Need New Labels: I Propose “100% Robot Made”
Yesterday, Apple’s iPhone maker, Foxconn announced an immediate cut of 60,000 workers to be replaced by robots. Today, Adidas announced the first ever 100% robot-made shoe. “Speedfactory”. Deutsche Welle, Germany’s international broadcaster, reports Adidas Shoe Manufacturing Will Return to Germany. That’s the good news. For manufacturing job seekers, the bad news is the shoes will be 100% robot made. - Billionaires Are Wrong on Gold
Recently the mainstream media has reported that several billionaires are concerned about global financial markets and have purchased significant amounts of gold to protect their portfolios. Take Stan Druckenmiller, the famed hedge fund manager who managed money for George Soros as the lead portfolio manager for Quantum Fund. He and Soros famously ‘broke the Bank of England' when they shorted the British pound sterling in 1992, reputedly making more than $1 billion in profits. He has reportedly used over $323 million of his own money to invest in gold. This is approximately a 30% allocation in his $1-billion family fund. His belief in gold can be attributed to his criticism of the Federal Reserve's massive money printing and near-zero interest rates. Ongoing low rates will drive both central banks and investors into gold. - Switzerland About to Vote on “Free Lunch” for Everyone
In early June the Swiss will be called upon to make a historic decision. Switzerland is the first country worldwide to put the idea of an Unconditional Basic Income to a vote and the outcome of this referendum will set a strong precedent and establish a landmark in the evolution of this debate. The Swiss Basic Income Initiative in a demonstration in front of parliament. As we have previously reported (see “Swiss Parliament Shoots Down Socialist Utopia” for details), Switzerland’s parliament has already rejected the idea, with even the socialists voting against it (proving that they are still in possession of most of their marbles and quite likely in possession of an abacus as well). - Wow. Congress wants to prohibit the Fed from bailing out bankrupt states.
Just days ago, in the midst of the Puerto Rico debt morass, 24 members of Congress introduced the “No Bailouts for State, Territory, and Local Governments Act.” The title pretty much sums it up. Congress knows there’s a massive wave of defaults looming at the city and state level. Detroit and Puerto Rico are just the tip of the iceberg. Aside from a few top performers like Alaska, South Dakota, and Wyoming (which, ironically, have no state income tax), many US states have atrocious finances. Illinois and Maine, for example, have dangerously low levels of cash relative to the debts and obligations they have to pay. - Oil Prices Likely in Mid-$30s-$40s Per Barrel After OPEC Meet
Oil prices are likely to fall after the Organization of Petroleum Exporting Countries (OPEC) summit in Vienna next week and then stabilize between around $35 to $45 per barrel, Trends Research Institute head Gerald Celente told Sputnik. Energy ministers of the once powerful oil cartel are set to meet in Vienna on June 2, less than two months after a failure of the April meeting with non-OPEC countries in Doha that sought to freeze oil output at January levels in a bid to shore up prices. - EU referendum: Ex-military officers fighting for EU exit
EU policies are undermining the UK's combat effectiveness, a dozen former senior military officers have warned. Speaking out in favour of Britain leaving the EU, they said that Nato, and not the EU, should remain the cornerstone of Europe's defence. Among the group is General Sir Michael Rose, whose name was originally on a letter organised by Downing Street supporting UK membership of the EU. The Remain campaign says membership of the EU and Nato is not contradictory. - Will Deutsche Bank Survive This Wave Of Trouble Or Will It Be The Next Lehman Brothers?
If you have been waiting for “the next Lehman Brothers moment” which will cause the global financial system to descend into a state of mass panic, you might want to keep a close eye on German banking giant Deutsche Bank. It is approximately three times larger than Lehman Brothers was, and if the most important bank in the strongest economy in Europe were to implode, it would instantly send shockwaves rippling across the entire planet. Those that follow my work regularly know that I started sounding the alarm about Deutsche Bank beginning last September. Since that time, the bad news from Deutsche Bank has not stopped pouring in. They announced a loss of 6.8 billion euros for 2015, Moody’s just downgraded their debt to two levels above junk status, and they have been plagued by scandal after scandal. In recent months they have gotten into trouble for trying to rig precious metal prices, for committing “equity trading fraud” and for their dealings in mortgage-backed securities. - Yet ANOTHER Billionaire Warns About Coming Chaos … Maybe There’s Something to This Trend?
Is there something in the water that billionaires drink? Because yet ANOTHER one just warned about coming market and economic chaos this morning! Sam Zell is his name, and real estate is his game. Zell has founded or invested in multiple public and private real estate firms from his home base in Chicago over the years, and is now worth an estimated $4.8 billion. As a guest host on CNBC today, he offered nothing but cold water and harsh reality for the starry-eyed optimists. Specifically, he said “holding a lot of cash right now doesn’t seem like a terrible opportunity” … added that we’re in the “ninth inning” of the economic cycle … and warned that recession was right around the corner. - The CME Admits Futures Trading Was Rigged Under Old System
Ask any trader what they believe to be the hallmark feature of any “rigged market” and the most frequent response(in addition to flagrant crime of the type supposedly demonstrated every day by Deutsche Bank and which should not exist in a regulated market) will be an institutionally bifurcated and legitimized playing field, one in which those who can afford faster, bigger, more effective data pipes, collocated servers and response times – and thus riskless trades – outperform everyone else who may or may not know that the market is legally rigged against them. Think of it as baseball game for those who take steroids vs a ‘roid free game, only here the steroids are perfectly legal for those who can afford them. Or like a casino where the house, or in this case the HFTs, always win. - Moody's downgrades Deutsche Bank's ratings
Moody's Investors Service has today downgraded the ratings of Deutsche Bank AG and affiliates, including the bank's long-term deposit rating, to A3 from A2, its senior unsecured debt rating to Baa2 from Baa1, its standalone baseline credit assessment (BCA) to ba1 from baa3, and its counterparty risk assessment to A3(cr) from A2(cr). Deutsche Bank's short-term ratings and short-term counterparty risk assessments were also downgraded to Prime-2 from Prime-1 and to Prime-2(cr) and Prime-1(cr), respectively. Today's rating action reflects the increased execution challenges Deutsche Bank faces in achieving its strategic plan. Moody's also downgraded the ratings of US–based Deutsche Bank Trust Corporation and its trust company affiliates. These trust companies' long-term deposit ratings were downgraded to A2 from A1, their long-term issuer ratings were downgraded to Baa2 from Baa1, their standalone baseline credit assessment was downgraded to baa1 from a3; their long-term and short-term counterparty risk assessments were downgraded to A3(cr) from A2(cr) and to Prime-2(cr) and Prime-1(cr) respectively. The Prime-1 short-term deposit ratings of these trust companies were affirmed. - Forget a Dollar Collapse…This Is a Much Bigger Threat to Your Wealth Right Now
It's an immediate threat to your wealth right now…and it's another sign we're headed for a major financial crisis. What we're covering today stems from the Fed's “monetary experiment” that began in 2008. As you may know, that year, the Fed dropped its key interest rate to effectively zero. It then started borrowing and printing trillions of dollars. This experiment has been nothing short of a disaster. Over the past eight years, the Fed's pumped $3.5 trillion into our financial system. And our national debt has more than doubled. - These Investing Legends Have Never Been More Bearish on U.S. Stocks
George Soros is investing like a crisis is around the corner. You’ve probably heard of Soros. Thanks to his legendary track record, he’s one of the world’s most well-known investors. From 1969 to 2001, he generated average annual returns of 20%…nearly beating the S&P 500 2-to-1. Soros also famously “broke the Bank of England” in 1992. These days, he runs Soros Fund Management, which manages about $10 billion. - Why China’s Banks Are Toast—-Losses May Hit $1.2 Trillion, 60% Of Total Bank Capital
Yesterday, when reporting on the latest development in China’s ongoing under-the-table stealth nationalization-cum-bailoutof insolvent enterprises courtesy of a proposed plan to convert bad debt into equity, we noted that while China has already managed to convert over $220 billion of Non-performing loans into equity, concerns – both ours and others’ – remained. As Liao Qiang, director of financial institutions at S&P Global Ratings in Beijing, said coercing banks to become stakeholders in companies that could not pay back loans will further weigh down profits this year. Instead of underpinning stability at banks, the efforts undermine it. That said, while many have voiced their pessimism about China’s latest attempt to sweep trillions in NPLs under the rug, there had been no comprehensive analysis of just how big the impact on China’s banks, economy or financial system would be as a result of this latest Chinese strategy. Until now. - Another Shoe Falls—–U. S. Service Sector Now At Stall Speed
Markit’s Services PMI fell to just 51.2 in May, dropping a rather large 1.6 points from 52.8 in April. That meant the combined US Composite PMI, which puts together both manufacturing and services, was barely above 50, registering just 50.8. As with all PMI’s the distinction around 50 is unimportant, what matters is the direction and for more than a single month. On that count, services reflect what we have seen in manufacturing: that the “rebound” in March and April was nothing more than a small relative improvement after the liquidation-driven start to the year. The economy didn’t get better, it for a few months just failed to get worse. - The Hidden Side of Wall Street’s “Mischief”
Wall Street gets a bad rap. Much of it is deserved, but not necessarily for the reasons you might expect. You see, to many, Wall Street’s suit-clad warriors appear to be nothing more than money-sucking leeches… draining the pockets of Americans’ hard-earned dollars through their fees, commissions and kick-backs. Whether this is a fair characterization or not, Wall Street’s worst give haters plenty of ammo. About this time last year, the United States Justice Department vowed to fine Wall Street banks something like $5.8 billion for rigging currency and interest rate markets. A long scroll of instant message conversations confirmed that many Wall Street insiders were coordinating this mischief. The most arrogant of the bunch even went so far to pontificate: “If you ain’t cheating, you ain’t trying.” - Our National Debt Will Grow to $31 Trillion by 2023
It just seems like human nature to ruin a good thing. As much as I am a strong proponent of free market capitalism, and against complex regulations and central planning, I understand government’s role in all this. Capitalism and democracy teamed up in the late 1700s to form the big bang in economics, or what I call “When Harry met Sally.” They’re opposites that balance each other – capitalism rewards people for their contributions, and democracy ensures that greed doesn’t take over. We took Adam Smith’s theory of the “invisible hand,” limited government and laissez faire politics… and combined it with Alexander Hamilton’s doctrine of a stronger government to enhance capitalism. We invested in common infrastructures, established a central bank with uniform monetary policies, and implemented financial and legal systems – things free market capitalism can’t do alone. That’s why, together, these two ideologies complement each other – so long as they don’t get in each other’s way. - China's Credit-Fuelled Economy Is “Gyrating Like A Spinning-Top That's Out Of Momentum”
China's hard landing has already begun, warns economist Richard Duncan as the nation's credit-fuelled economic boom ended in 2015 and a protracted slump lies ahead. He has published a series of videos explaining why China’s economic development model of export-led and investment-driven growth is now in crisis leaving “China’s economy resembles a spinning top that is running out of momentum. It is wobbling and gyrating erratically.” - The Relationship Between The United States And China Is Officially Going Down The Tubes
What happens when the two largest economies on the planet start fighting a trade war with one another? Well, we are about to find out. As you will see below, the U.S. has gone “nuclear” on China in a trade dispute over steel, and the Chinese response is likely to be at least as strong. Meanwhile, events in the South China Sea have brought tensions between the Chinese government and the Obama administration to a boiling point. The Obama administration strongly insists that China does not have a legal right to those islands, and in China there is now talk that it may ultimately be necessary to confront the United States militarily in order keep control of them. Most Americans may not realize this, but the relationship between the United States and China is officially going down the tubes, and this is likely to have very significant consequences during the years to come. Let’s start with the trade war that has erupted. About a week ago, we learned that the Obama administration had decided to “go nuclear” on China by imposing a 522 percent duty on cold-rolled steel from China that is used in certain kinds of manufacturing… - The One World Religion Cometh: Pope Francis Warmly Welcomes Top Islamic Cleric To The Vatican
When Pope Francis met with Sheikh Ahmed al-Tayeb on Monday, he told him that “our meeting is the message“. So precisely what kind of “message” was Pope Francis attempting to convey? Sheikh Ahmed al-Tayeb is the Grand Imam of Cairo’s Al-Azhar Mosque, and some have described him as “the highest figure in Sunni Islam“. The Daily Mail said that the meeting between these two men was a “historic bid to reopen dialogue between the two churches”, and as you will see below this is yet another in a long series of attempts by Pope Francis to build bridges between Catholicism and various other faiths. In the end, what are we to make of all of this? Could it be possible that Pope Francis is laying the groundwork for the “super world church” and the coming one world religion that David Wilkerson and so many others have warned about? Pope Francis made sure that when he embraced Sheikh Ahmed al-Tayeb there would be plenty of reporters there to document the moment. The following is an excerpt from a Daily Mail article entitled “Pope embraces grand imam at historic Vatican meeting in a bid to bring the Catholic and Muslim churches together“… - The Market Has Barely Corrected — And That’s A Problem
The S&P 500 index closed last Friday at exactly 2,052.32 points. This means that for the year, the equities benchmark has only gained 0.6%. In other words, this is a horizontal market. Fundamentally, the blue chips have been stymied by a very tough earnings season. In particular, the laggard that is the retail sector continues to contradict data that the economy is in a recovery mode. Internationally, China's slowdown — both in their exports as well as in their consumer market — has dragged the global economy. But a little appreciated technical factor may be foretelling a sharp correction in the major indices. - Big Banks Get More Protection But Not Their Clients
We have explained how the next worldwide financial crisis will be solved by looting savers’ bank accounts, in order to save the big banks. The European Bank Recovery and Resolution Directive (BRRD) shall take care of that, and the idea is gaining ground in other countries. This will to protect big banks come what may, even if it means ruining their clients, reached a new phase. In the United States the Fed just allowed a defaulting bank to keep its clients’ collateral. In other words, when a fund, such as a hedge fund, transacts with a bank on derivatives, it must put up a guarantee toward said bank, some sort of “collateral”, generally Treasuries, a recognised and liquid asset. This is quite normal since derivatives may generate losses, and the bank wants some insurance. But if that bank is about to implode, it will be allowed to keep that collateral, even though the transaction itself does not generate any losses! This is what the Fed just decided. - Saudi Arabia’s Economic Plan Shows It’s Just Not That Into OPEC
Saudi Arabia, one of the founders of OPEC, is sounding the group’s death knell. The world’s biggest crude exporter has already undermined OPEC’s traditional role of managing supply, instead choosing to boost output to snatch market share from higher-cost producers, particularly U.S. shale drillers, and crashing prices in the process. Now, under the economic plan known as Vision 2030 promoted by the king’s powerful son, Deputy Crown Prince Mohammed bin Salman, the government is signaling it wants to wean the kingdom’s economy off oil revenue, lessening the need to manage prices. Moreover, the planned privatization of Saudi Arabian Oil Co. will make the nation the only member of the Organization of Petroleum Exporting Countries without full ownership of its national oil company. - We Have Entered The Looting Stage Of Capitalism — Paul Craig Roberts
Having successfully used the EU to conquer the Greek people by turning the Greek “leftwing” government into a pawn of Germany’s banks, Germany now finds the IMF in the way of its plan to loot Greece into oblivion. The IMF’s rules prevent the organization from lending to countries that cannot repay the loan. The IMF has concluded on the basis of facts and analysis that Greece cannot repay. Therefore, the IMF is unwilling to lend Greece the money with which to repay the private banks. The IMF says that Greece’s creditors, many of whom are not creditors but simply bought up Greek debt at a cheap price in hopes of profiting, must write off some of the Greek debt in order to lower the debt to an amount that the Greek economy can service. - ALERT: Legend Pierre Lassonde Just Predicted Price Of Gold To Soar Above $10,000
With the price of gold and silver pulling back and consolidating recent gains, today legendary Pierre Lassonde spoke with King World News and predicted for the first time ever that the price of gold will soar above $10,000. Lassonde is arguably the greatest company builder in the history of the mining sector. He is past president of Newmont Mining, former chairman of the World Gold Council and current chairman of Franco Nevada. Lassonde is one of the wealthiest, most respected individuals in the gold world, and as always King World News would like to thank him for sharing his wisdom with our global readers during this critical period in these markets. - 50-Year Veteran Warns This Twisted Fantasy Is About To Come To A Frightening End
With the war in the gold and silver markets continuing to rage, today a 50-year market veteran warned this twisted fantasy is about to come to an end. John Embry: “Eric, this Fantasyworld we are living in gets more ridiculous by the minute. However, it is not terribly surprising when one considers the depth of the global systemic problems. I thought Egon’s KWN interview was exceptional and should be required reading for anyone who thinks what we are experiencing in markets today is sustainable. When one realizes the powers that be are essentially impotent beyond providing unlimited quantities of liquidity, issuing bogus economic statistics, and manipulating markets in order to create the impression that things are fine, one recognizes that investors can’t be too careful here. The Dow’s powerful rally today just amps up the volatility for that index and a sharp increase in volatility often proceeds a major change in market direction. So I think the stock market players best be careful. - PUBLIC WORRIED: A Staggering $100 Billion Has Flowed Out Of Stocks So Far This Year
With continued uncertainty in global markets, two of the greats weighed in with their thoughts on what to expect next as nearly $100 billion has flowed out of the U.S. stock market so far this year. From Art Cashin: On The Mortality Of Bull Markets – One of the key commentaries going around Wall Street these days begins with “Bulls markets don’t die of old age….” That is then followed by the speaker’s choice of bull market mortality, e.g. euphoria, etc. I wonder if bull markets might die of some other cause, like perhaps starvation. My friend and fellow trading veteran, Jim Brown over at Option Investors cites Bank of America in noting that “year to date equity outflows were approaching $100 billion“. Such outflows had been more than offset by corporate buybacks. Those have now slowed dramatically. Outflows should be watched carefully. - Here’s why (and how) the government will ‘borrow’ your retirement savings
According to financial research firm ICI, total retirement assets in the Land of the Free now exceed $23 trillion. $7.3 trillion of that is held in Individual Retirement Accounts (IRAs). That’s an appetizing figure, especially for a government that just passed $19 trillion in debt and is in pressing need of new funding sources. Even when you account for all federal assets (like national parks and aircraft carriers), the government’s “net financial position” according to its own accounting is negative $17.7 trillion. And that number doesn’t include unfunded Social Security entitlements, which the government estimates is another $42 trillion. The US national debt has increased by roughly $1 trillion annually over the past several years. - Peak Petro-State – The Oil World In Chaos
Pity the poor petro-states. Once so wealthy from oil sales that they could finance wars, mega-projects, and domestic social peace simultaneously, some of them are now beset by internal strife or are on the brink of collapse as oil prices remain at ruinously low levels. Unlike other countries, which largely finance their governments through taxation, petro-states rely on their oil and natural gas revenues. Russia, for example, obtains about 50% of government income that way; Nigeria, 60%; and Saudi Arabia, a whopping 90%. When oil was selling at $100 per barrel or above, as was the case until 2014, these countries could finance lavish government projects and social welfare operations, ensuring widespread popular support. Now, with oil below $50 and likely to persist at that level, they find themselves curbing public spending and fending off rising domestic discontent or even incipient revolt. - 6 Giant Corporations Control The Media, And Americans Consume 10 Hours Of ‘Programming’ A Day
If you allow someone to pump hours of “programming” into your mind every single day, it is inevitable that it is eventually going to have a major impact on how you view the world. In America today, the average person consumes approximately 10 hours of information, news and entertainment a day, and there are 6 giant media corporations that overwhelmingly dominate that market. In fact, it has been estimated that somewhere around 90 percent of the “programming” that we constantly feed our minds comes from them, and of course they are ultimately controlled by the elite of the world. So is there any hope for our country as long as the vast majority of the population is continually plugging themselves into this enormous “propaganda matrix”? - A Spirit Of Violence And Civil Unrest Is Rising In America
It was only a matter of time before our deeply divided nation was going to start coming apart at the seams. Waves of anger, frustration, violence and civil unrest are starting to sweep across the United States, and political rallies for Republican presidential candidate Donald Trump have become a focal point for releasing some of that energy. The angry mob that threw rocks, bottles and burning T-shirts at police and Donald Trump supporters on Tuesday night wanted to get the attention of the national media, and they got it in droves. Now that the election is less than five months away, this kind of scene is going to be repeated over and over, and this is something that I warned about back in March. Millions upon millions of our young people have fully embraced the radical left, and they have already made it exceedingly clear that they are not afraid to use violence to advance their cause. - Criminal Bankers Threaten Entire World Economy-Helen Chaitman
Helen Davis Chaitman was the lead attorney representing the victims of the $65 billion Bernie Madoff scam. Madoff had help form JP Morgan Chase Bank, and what she found out was stunning. Chaitman explains, “JP Morgan Chase was the subject of a criminal complaint . . . it was charged with a criminal violation of the Bank Secrecy Act, which is a felony violation. JP Morgan Chase disgorged a small percentage of the profits it made on the Madoff relationship, and the government called it quits. Nobody was fired. Nobody disgorged bonuses, they just went on doing other crimes.” - All Electronic Assets Wiped Out in Fall Crash
Financial analyst Bix Weir has laid out a timeline for the next financial collapse that he says is underway. Bix explains, “It’s happening now, and it has been happening since the beginning of the year. Some of the big things on the time line and one of the bigger things to watch is the Deutsche Bank (DB) implosion. That’s going to be gigantic because Deutsche Bank is the largest derivative holder in the world. Their stock is plummeting, and they are begging for tier 1 capital. It’s all happening right now. The question is what is the day that Deutsche Bank throws up its arms and says we’re insolvent? We are many times insolvent, and that would just destroy the European markets. It will also destroy the U.S. markets because our biggest banks are invested in the sovereign debt of European countries. That’s how it is going to start, and I believe the end of the end will be the Deutsche Bank implosion. . . .This is why Deutsche Bank is paying huge interest rates now because they need to raise their tier 1 capital. They have to raise tier 1 capital before they report for the second quarter. They are in massive trouble. Their tier 1 capital is being destroyed by all these losses and lawsuits. Didn’t they lose $7 billion euros last year? . . . They need massive amounts of capital . . . and they are willing to pay 5% interest just to get past the second quarter. That’s the amazing thing. . . . Deutsche Bank is going to be gone by the end of the third quarter.” - As Boomers Retire, Mom-and-Pop Businesses Convert to Co-ops to Save Jobs
Susanne Ward and her husband, Patrick Reilley, moved from California to Maine in 1992 with plans of starting their own business. They decided on a used bookstore and coffee house, as they felt both good coffee and good books were in short supply in their new neighborhood. Located in the city of Rockland, Rock City (named for the limestone quarries that fueled the city’s growth in the 1800s) became a focal point in town for the artistic crowd, but Ward and Reilley struggled to find quality coffee that was reasonably priced. Within three years, they’d moved into a bigger space that could house the bookstore, cafe, and a space to roast their own coffee blend, which they began wholesaling. In 1999, they opened a roastery a few blocks south of the cafe outside of Rockland’s historic district, producing and selling their blend, which also supplied Rock City. - After Losing $11 Billion on $9.4-billion Nokia Buy & Axing 27,650 Jobs, Microsoft Dumps Consumer Smartphones
Microsoft entered the final-final or pre-final-final episode of its Nokia saga. Its press release on Wednesday explained that it would “streamline” its smartphone hardware business. It would throw in the towel on smartphones for consumers and try to carve out a niche in corporate smartphones. It would be accompanied by more bloodletting. With its usual big-money genius, Microsoft had acquired Nokia’s mobile-phone business and patents In September 2013. Nokia’s credit rating was junk. Its market share had collapsed. It had lost over $4 billion the prior year. But its smartphones were using the Windows Phones operating system. The original terms of the deal called for a purchase price of $5.4 billion. This soon ballooned to a new purchase price of $7.2 billion. To make the deal go down better, Microsoft promised $600 million in annual cost savings within 18 months.
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Latest News Articles – May 26, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From May 20, 2016 to May 26, 2016:
- This S&P 500 Death Cross’ Could Be The Real Deal
Not all “death crosses” are created equal. In a note to clients, Intermarket Strategy Ltd. Chief Executive and Strategist Ashraf Laidi points out that the S&P 500’s 50-week moving average is falling below its 100-week moving average. This “statistically significant” death cross has only happened twice is the past two decades, Laidi points out. The first took place in 2001 and was followed by a 37 percent decline in the index, while the second pattern occurred in 2008 and preceded a 48 percent drop. With investors already growing increasingly nervous about prospects for equities, a death cross of grave proportions could give extra reason for caution. - Red Ponzi Update——-Gambling Like Never Before
In the heyday of its incredible credit and construction boom, China was building two world-scale utility plants each week and opening up a new airport every day. Economic fiction writers like Goldman’s Jim O’Neill, chief propagator of the BRICs myth, declared the Red Ponzi to be the very second coming of capitalism. Now, by contrast, a Chinese billionaire goes missing practically every day, as a recent Washington Post article explained: That’s what happened last year when China’s richest man — at least on paper — lost half of his wealth in less than half an hour. It turned out that his company Hanergy may well just be Enron with Chinese characteristics: Its stock could only go up as long as it was borrowing money, and it could only borrow money as long as its stock was going up. Those kind of things work until they don’t. - Foreign Central Banks Jettisoning US Debt at Alarming Pace; Buying Gold
Continuing a trend that started last year, central banks around the world are dumping US debt at a record pace. Central banks sold off a net $17 billion in US Treasury bonds in March. Sales set a record in January, hitting $57 billion. China, Russia, and Brazil led the way, each dumping at least $1 billion in US debt in March alone. So far in 2016, global central banks have jettisoned $123 billion in US debt. Last year, they sold off $226 billion. According to the Treasury Department, central banks are selling US Treasuries at a pace not seen since at least 1978. - Undeniable Evidence That The Real Economy Is Already In Recession
You are about to see a chart that is undeniable evidence that we have already entered a major economic slowdown. In the “real economy”, stuff is bought and sold and shipped around the country by trucks, railroads and planes. When more stuff is being bought and sold and shipped around the country, the “real economy” is growing, and when less stuff is being bought and sold and shipped around the country, the “real economy” is shrinking. I know that might sound really basic, but I want everyone to be on the same page as we proceed in this article. Just because stock prices are artificially high right now does not mean that the U.S. economy is in good shape. In fact, there was a stock rally at this exact time of the year in 2008 even though the underlying economic fundamentals were rapidly deteriorating. We all remember what happened later that year, so we should not exactly be rejoicing that precisely the same pattern that we witnessed in 2008 is happening again right in front of our eyes. - 10 Stunning Parallels Between The United States And Nazi Germany
Most Americans may not like to hear this, but the truth is that modern day America very closely resembles Nazi Germany. If you initially recoiled when you read the headline to this article, that is understandable. After all, most of us were raised to deeply love this country. But I would ask you to consider the evidence that I have compiled before you pass judgment on the matter. Most citizens of this nation know that something has gone deeply wrong, and I would suggest that just like the Nazis, all of the pageantry and beauty in our society masks an evil which has grown to a level that is almost unspeakable. And just like the Germans, we don’t do ourselves any favors by turning a blind eye to what is going on. The following are 10 stunning parallels between the United States and Nazi Germany… - Member Of Congress: It’s Easy ‘To Manipulate A Nation Of Naive, Self-Absorbed Sheep’
You may not believe the incredible things that one member of Congress is saying about the corruption of our political system and the gullibility of the American people. In a brand new book entitled “The Confessions of Congressman X“, one anonymous member of the U.S. House of Representatives confesses that he hardly ever reads the bills that he votes on, that his main job is to get reelected, and that it is “far easier than you think to manipulate a nation of naive, self-absorbed sheep who crave instant gratification”. This book is being published by Mill City Press, and it is being billed as “a devastating inside look at the dark side of Congress as revealed by one of its own.” I don’t know if you would classify this anonymous member of Congress as “brave” since he does not wish to reveal his identity, but the things that he is admitting confirm suspicions that many of us have had for a very long time. - Even Target Isn't Immune to Spending Slowdown Rippling Through Retail
Target (TGT) had a solid start to the year compared with struggling apparel retailers in the malls, but it's still not immune to the broader consumer spending slowdown. The discount retailer signaled Wednesday that its second quarter may have started more sluggishly because of tepid consumer demand for apparel and the impact of protests over its stance on the use of women's bathrooms. Second-quarter sales may drop as much as 2% from the prior year. Earnings should be $1 to $1.20 a share, compared with Wall Street estimates of $1.19. - Venezuela: A Prepper’s Nightmare Come to Life
Two years ago, Venezuela was a normal functioning nation, relatively speaking of course. It was by no means a free country, but the people still had a standard of living that was higher than most developing nations. Venezuelans could still afford the basic necessities of life, and a few luxuries too. They could send their children to school and expect them to receive a reasonably good education, and they could go to the hospital and expect to be effectively treated with the same medical standards you’d find in a developed nation. They could go to the grocery store and buy whatever they needed, and basic government services like law enforcement and infrastructure maintenance worked fairly well. The system was far from perfect, but it worked for the most part. However, this standard of living was a mirage. Venezuela was and still is a leftist socialist nation, and the only thing propping it up was their glut of oil reserves and $100 per barrel prices. The state owned those resources, and they provided so much wealth that even Venezuela’s highly inefficient command economy could provide everything the people needed. But socialist systems do not by their nature, respond well to shock and disruptions. They’re not flexible. - 12 Signs That A Cloud Of Insanity Has Descended On The Land
What in the world is happening to America? Recently, I was asked to describe what we are watching happen to our nation. After thinking about it, I have come to the conclusion that it is almost as if a “cloud of insanity” has descended upon the United States and much of the rest of the western world. From our top leaders on down, people are engaged in incredibly self-destructive behavior and are making extremely irrational decisions. Some would describe it as being given over to a depraved mind, and I would have to agree. It is almost as if some sort of severe form of mental illness were rapidly spreading through the air and infecting everyone. Virtually every day I am immersed in news and current events, and it can be difficult to shock me after all this time. But lately, there have been quite a few stories that have stunned even me. - The US is concerned about a potential meltdown in Venezuela, destroying its oil sector
The United States is increasingly concerned about the potential for an economic and political meltdown in Venezuela, spurred by fears of a debt default, growing street protests and deterioration of its oil sector, U.S. intelligence officials said on Friday. In a bleak assessment of Venezuela’s worsening crisis, the senior officials expressed doubt that unpopular leftist President Nicolas Maduro would allow a recall referendum this year, despite opposition-led protests demanding a vote to decide whether he stays in office. - Fed officials Williams, Lockhart stress that June meeting is ‘live’
The U.S. central bank could raise interest rates as soon as June, two Federal Reserve officials said Tuesday. Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams, in a joint appearance at a lunch sponsored by the news site Politico, said that the decision on whether to raise rates at the June 14-15 meeting depends on the data. June “certainly could be a meeting at which action could be taken,” Lockhart said. “I think it is a little early at second-quarter data to draw a conclusion, so I am at this stage inconclusive about how I am going to be thinking about June, but I wouldn’t take it off the table,” Lockhart said. He said he assumes there will be two to three rate hikes this year. - A Coming Event That Is Going To Shock The World
Last year one of the legends in the business warned of a coming event that is going to shock the world. How close is this event to unfolding? The Disease – Deflation And A World Drowning In Debt Richard Russell warned last year: “The world’s balance sheet is heavily skewed toward debt and loans. On the asset side of the balance sheet we have gold and silver currencies. Cure That Will Shock The World – Reset Gold To $5,000 or $10,000! What would make the balance sheet look saner and increase the asset side? It would be to reset gold to a much higher price. Why is it that nobody is writing about this? Resetting the price of gold to $5,000 or $10,000 an ounce would be a mighty step against deflation. - Now Is Not a Normal Time: Central Banks Buying Piles of Gold
These are not normal economic times. Interest rates have remained artificially low, plunging into negative territory in many places. Central banks continue to inflate the money supply with quantitative easing. Some policy-makers have even floated the idea of helicopter money. Worldwide money printing is reportedly approaching $100 trillion. There is no end to this crazy monetary policy in sight. This led billionaire investor Stanley Druckenmiller to recommend selling US stocks to buy gold. Well-known hedge fund manager Paul Singer said the recent surge in gold is just the beginning. And Bank of America said gold is entering a new and long bull market. - ICBC buys Barclays' US$80bn London gold vault
ICBC Standard Bank is buying Barclays' London precious metals vault, giving the Chinese bank the capacity to store gold worth more than US$80bn in the secret location. The vault is one of the largest in Europe, with a capacity to hold 2,000 tonnes of gold, silver, platinum and palladium. It has been operational since 2012. ICBC Standard Bank said on Monday it has signed an agreement to buy the vaulting business and transfer the associated contracts, subject to consent. The deal is expected to complete in July. ICBC Standard Bank specialises in commodities, fixed income, currencies and equities and was formed in February 2015 when Industrial and Commercial Bank of China bought a 60% stake in Standard Bank's London-based global markets business. Neither ICBC Standard Bank nor Barclays disclosed the financial terms of the deal. - BREAKING: Gerald Celente Just Issued One Of His Most Important Trend Alerts Of 2016!
Today top trends forecaster Gerald Celente just issued one of his most important Trend Alerts of 2016 exclusively through King World News! Gerald Celente: Oil is on a tear. Gold is shining and the global equity markets remain volatile. After plunging from $115 a barrel in June 2014, to hitting a 52 week low at $27.10 this past January, Brent Crude, hitting a seven month high on Tuesday, is now flirting at $50 a barrel. - Kill TTIP Now — Paul Craig Roberts
In his May 9, 2016, speech to European medical professionals, Michael Hudson points out that the result of TTIP for Europe will be the privatization of health care systems with the associated much higher costs. Hudson’s accurate description of TTIP shows that politically powerful corporations have gained the power in Western “democracies” to sacrifice the welfare of all populations to corporate greed for profit regardless of the cost to peoples, countries, and societies. The evil of American “democratic capitalism” is total and irredeemable. TTIP gives corporations unaccountable power over governments and peoples. The corporations must be slapped down hard, fiercely regulated, and forced by threat of long prison sentences to serve the public interest, and not the incomes of the executives and shareholders who comprise the One Percent. - Venezuela scrambles to head off collapse
With the nation on the brink of collapse, Venezuelan officials Monday were scrambling to keep the country afloat. But a plunge in crude prices, rampant inflation and a currency crash has left the once oil-rich nation with few options to head off political and social chaos. Opposition leaders over the weekend protested a 60-day state of emergency declared by President Nicolás Maduro on Friday night, based what he called plots from Venezuela and the U.S. to subvert him. With the economy in freefall, hungry mobs have looted food stories, power and water are in short supply and hospitals are unable to care for newborns. “You can hear the ice cracking. You know there's a crisis coming,” a U.S. official told a group of reporters Friday, according to published reports. That crisis has been building for years, but the pace of Venezuela's decline has worsened in recent weeks. Mobs have stolen food and clothing amid shortages of many basic consumer products. - KFC restaurant in China is now staffed by chicken-loving robots
We are living in a brave new world where robots are encroaching on our jobs, our lives, and our safety. Or, at the very least – they’re readily available to serve us fried chicken. KFC has become one of the first restaurants to make use of voice activated robots in its store. The automaton, known as Dumi, is located at a concept store in Shanghai – and its creators say that it’s clever enough to handle orders from customers, and even adjustments when diners change their minds. - When They Killed JFK They Killed America — Paul Craig Roberts
In the JFK administration I was a White House Fellow. In those days it was a much larger program than the small insider program it later became. President Kennedy’s intention was to involve many young Americans in government in order to keep idealism alive as a counter to the material interests of lobby groups. I don’t know if the program still exists. If it does, the idealism that was its purpose is long gone. President John F. Kennedy was a classy president. In my lifetime there has not been another like him. Indeed, today he would be impossible. Conservatives and Republicans did not like him, because he was thoughtful. Their favorite weapon against him was their account of his love life, which according to them involved Mafia molls and Marilyn Monroe. They must have worked themselves into fits of envy over Marilyn Monroe, the hottest woman of her time. Unlike most presidents, Kennedy was able to break with the conventional thinking of the time. From his experience with the Bay of Pigs, Cuban Missile Crisis, and the Joint Chiefs’ “Operaton Northwoods,” Kennedy concluded that CIA Director Allen Dulles and Chairman of the Joint Chiefs of Staff General Lemnitzer were both crazed by anti-communism and were a danger to Americans and the world. - Investors could yank as much as $500B from hedge funds in 2016
The $3.2 trillion hedge fund industry, reeling from its worst quarter for withdrawals since the financial crisis, is bracing for more pain. Hedge funds, which watched in horror as investors yanked $15 billion from the funds in the first three months of the year, could see that figure climb to $500 billion by the end of the year, one pension investor said. “We have all the leverage,” one investor said, echoing a familiar refrain at this year’s SkyBridge Alternative, or SALT, conference, here. - Gold Prices: One Big Reason Why $2,000 Gold Could Be Possible
Something just happened in the gold market that suggests gold prices are severely undervalued. Don’t expect to read this in the mainstream financial publications. Gold buyers are increasing in numbers. You see, in 2013, when the precious metal’s prices were plummeting (for all the wrong reasons as I see it), the mainstream media told investors that buyers would be running from gold. Big investment companies said gold prices would fall further. They were all wrong. The data proves them wrong. - Warren Buffett: “It’s a huge advantage NOT to have a lot of money…”
Warren Buffet has famously said many times that the vast majority of investors shouldn’t bother picking stocks. Instead, he’s advised everyone from Lebron James to his own children to simply buy an S&P index fund and hold it ‘for the next 50 years.’ He’s probably right; most people probably should just buy an S&P index fund. But not because it’s a superior investment. It’s because most people simply aren’t educated about business, finance, and investing. Proper financial education isn’t taught in public schools, so for a lot of folks, investing is an alien concept. Learning about investment means seeking an independent education. A real education. And it’s amazing what a real education can do. Whereas the average person is relegated to an insipid index fund, an educated investor can generate phenomenal wealth and prosperity. Buffett himself is a great example of this. - How safe are top US banks?
Recently I was having drinks with a friend of mine who is an ultra-successful US real estate developer and investor. He told me that his team had just closed a large real estate transaction worth hundreds of millions of dollars, and they got a sweetheart deal from the bank. The bank is loaning them almost all of the money at an interest rate of around 2%. But it gets better. If the Federal Reserve raises interest rates, he has the option of locking in the rate that he has now… so his interest rate will basically never go up. But if the Federal Reserve lowers interest rates, the rate that he pays on the loan will go down. In other words, he got an amazing deal from the bank… and it might even get better. But it will never get worse. Now, this is obviously fantastic for the borrower. But for the bank, this is an absolute sucker’s bet. There’s almost zero upside. - Wendy's Turns to Self-Serve Kiosks to Offset Higher Labor Costs
In a move meant to offset higher minimum wages taking effect in states across the country, fast-food giant Wendy's will be offering self-serve kiosks to many of its franchisees later this year. Though some reports suggested the kiosks would be made available at all Wendy's by the end of 2016, spokesperson Bob Bertini says it will be up to individual franchisees whether or not they install the kiosks. Below, the statement from Wendy's in full: The majority of Wendy's restaurants are franchise-operated. We are in pilot now with self-service order kiosks, which we expect to make available for installation by our franchisees later in 2016. Whether they choose to do so will be up to them. Earlier news reports were not quite accurate. We did not say kiosks would be available at every restaurant by end of year. We do continue to invest in technology to help mitigate the inflation we are seeing on the wage front. In an earnings call on Wednesday, company president Todd Penegor said that “managing labor pressure” will be critical “to make sure that we provide a new QSR [quick-service restaurant] experience but at traditional QSR prices.” - Scenes From The Venezuela Apocalypse: “Countless Wounded” After 5,000 Loot Supermarket Looking For Food
Over the last several years we have documented with clockwork regularity Venezuela's collapse into failed state status, which was cemented several weeks ago when news hit that “Venezuela had officially run out of money to print new money.” At that point the best one could do was merely to step back and watch as local society and civilization turned on itself, unleashing what would ultimately turn into Venezuela's own, sad apocalypse. As we wrote then these are simply hungry Venezuelans protesting that their children are dying from lack of food and medicine and that they do not have enough water or electricity. As AgainstCronyCapitalism added, this is a country with more oil than Saudi Arabia, and the government has stolen all the money and now they bottleneck peaceful protesters and threaten them with bombs (or haul them to prison and torture them). As pure desperation has set in, crime has becomes inevitable. - This Won't End Well – Business Inventories Signal Recession Imminent
Autos & parts inventories-to-sales ratios soared to 2.30x from 2.18x – levels that have only been higher during the financial crisis. This, combined with a rise in clothing inventories to sales, held overall business inventories at their highest to sales since the crisis and deep in pre-recessionary territory. Retail inventories rose 1.0% MoM despite a 0.3% drop in sales (with motor vehicles inventories up 2.3% as sales tumbled 3.2%) leaving the inventories to sales ratio at cycle highs… Simply put, this won't end well. - Tim Price: Why I’m voting to leave the European Union
On 23 June 2016, this British citizen will be voting to leave the European Union. To me it’s clear: the EU has not only become too big for its own good, it’s too big to do hardly anything good. Back in 1975 when the UK first confirmed membership in the EU (when it was called the European Economic Community), it made sense. Britain has always thrived on international trade, and the EU promised more trade. But that’s not what happened. The EU didn’t turn into a peaceful, efficient, multi-national trading bloc that enables commerce and prosperity. Rather it has become an ever-expanding, unaccountable bureaucracy ruling over vastly disparate nations who are increasingly at odds with one another. And it is precisely the size of this Leviathan that’s the problem… something that was first identified several decades ago by economist Leopold Kohr. - Oil Inventories Drop by 3.4 Million Barrels as EIA Fudge Factor Swings by 664,000 Barrels Per Day
This Wednesday's Petroleum Status reports for the week ending May 6th from the Energy Information Administration indicated that our crude oil production fell a bit once again and that our imports of oil were virtually unchanged, while US refineries saw another modest increase in the amount of oil that they used. Production of crude oil from US wells fell for the 15th time in the past 16 weeks, dropping by 23,000 barrels per day, from an average of 8,825,000 barrels per day during the week ending April 29th to an average of 8,802,000 barrels per day during the week ending May 6th. That's now 6.1% below the 9,373,000 barrels per day we were producing during the first week of May last year, and 8.4% below the 9,610,000 barrel per day peak of our oil production that was hit during the week ending June 10th of last year. - Working 60 Hours A Week At 3 Part-Time Jobs And Still Living Paycheck To Paycheck
What can you do when you are working 60 hours a week at three part-time jobs and it is still not enough? In America today, many people have taken on more than one job in a desperate attempt to make ends meet, but they still come up short at the end of the month. And those that are actually working are the fortunate ones, because in one out of every five families in the United States nobody has a job. There are more than 100 million working age Americans that are currently not employed (yes this is true), and as I pointed out yesterday, job cut announcements by major firms are currently running 24 percent ahead of last year’s pace. But unemployment is just part of the overall problem. There is this growing misconception out there that if you “have a job” that you must be doing okay. Unfortunately for the growing number of “working poor” in America, that is not true at all. - Undeniable Evidence That The Real Economy Is Already In Recession Mode
You are about to see a chart that is undeniable evidence that we have already entered a major economic slowdown. In the “real economy”, stuff is bought and sold and shipped around the country by trucks, railroads and planes. When more stuff is being bought and sold and shipped around the country, the “real economy” is growing, and when less stuff is being bought and sold and shipped around the country, the “real economy” is shrinking. I know that might sound really basic, but I want everyone to be on the same page as we proceed in this article. Just because stock prices are artificially high right now does not mean that the U.S. economy is in good shape. In fact, there was a stock rally at this exact time of the year in 2008 even though the underlying economic fundamentals were rapidly deteriorating. We all remember what happened later that year, so we should not exactly be rejoicing that precisely the same pattern that we witnessed in 2008 is happening again right in front of our eyes. - JP Morgan: Gold Entering a New and Long Bull Market
Are Wall Street banks finally getting on the right side of the gold trade? In an interview with CNBC, Solita Marcelli, global head of fixed income at JP Morgan, revealed that the Wall Street investment bank is recommending that clients position themselves for a “new and very long” bull market in gold. She explained that negative interest rates around the world are making gold a more attractive investment. Since gold is a non-yielding asset and has minimal storage costs, it actually compares quite favorably with the increasing number of negative yield bonds on the global stage. It has a positive carry. Solita suggested that central banks might consider diversifying their reserves into gold with the fear that they might be getting negative rates on their existing holdings. Gold is a great portfolio hedge in an environment where world government bonds rates are at historical lows. It may, in fact, replace government bonds as the next risk off trade. - Fed’s Yellen says negative rates would need careful consideration
Federal Reserve Chairwoman Janet Yellen said Tuesday the Fed wouldn’t rule out using negative interest rates to boost the economy but she cautioned such a move would have to be carefully studied. “While I would not completely rule out the use of negative interest rates in some future very adverse scenario, policymakers would need to consider a wide range of issues before employing this tool in the United States, including the potential for unintended consequences,” she wrote in a letter to Rep. Brad Sherman (D., Calif.) and released by his office. Yellen also wrote she expected the economy would strengthen and inflation would return to the Fed’s 2% target “over time.” - Watch Venezuela, Because Food Shortages, Looting And Economic Collapse Are Coming To America Too
The full-blown economic collapse that is happening in Venezuela right now is a preview of what Americans will be experiencing in the not too distant future. Just a few years ago, most Venezuelans could never have imagined that food shortages would become so severe that people would literally hunt dogs and cats for food. But as you will see below, this is now taking place. Sadly, this is what the endgame of socialism looks like. When an all-powerful government is elevated far above all other institutions in society and radical leftists are given the keys to the kingdom, this is the result. Food shortages, looting and rampant violent crime have all become part of daily life in Venezuela, and we all need to watch as this unfolds very carefully, because similar scenarios will soon be playing out all over the planet. - Bayer lodges $62bn cash bid to acquire Monsanto
German chemical and pharmaceutical giant Bayer has announced a $62bn (£43bn; €55bn) all-cash takeover bid for US seeds company Monsanto. The $122-per-share offer represents a 37% premium on Monsanto's closing share price of $89 on 9 May, before Bayer formally tabled its written takeover proposal. The Leverkusen-headquartered firm said in a statement on 23 May that the merger would create a “global agriculture leader” if it goes through. Monsanto is one of the world's largest producers of genetically engineered seeds and has courted controversy in the past due to its lobbying of government agencies in support of GM crops. - Unemployment Claims Spike Again As We Get More Scientific Evidence The Middle Class Is Shrinking
As the U.S. economy slows down, we would expect to start to see evidence of this in the employment numbers, and that is precisely what has begun to happen. During the week before last, initial claims for unemployment benefits jumped by 17,000, which was the largest increase that we had seen in over a year. Well, last week we witnessed an even bigger spike. Seasonally adjusted initial claims shot up 20,000 more to a total of 294,000. Of course it makes perfect sense that more Americans are applying for unemployment benefits, because firms are laying people off at a much faster pace these days. Just a couple days ago I reported that job cut announcements at major firms are running 24 percent higher this year compared to the first four months of last year. So we should fully expect that the number of Americans seeking unemployment benefits will continue to accelerate. - Medicare at age 76 EVERYONE needs to read this.
If you don't read this, and do nothing about it, don't complain when it affects you or your loved ones! This is the second Judge to have read the Obama Care document comments. More highlights of Nancy's “pass it and then find out what's in the bill”! Show this to everyone nearing the ripe old age of 76. These are just a few of the things that we Seniors are going to have to deal with which started in 2014. Even far left Democrats will not like these. - Fed to delay rate hike until September on tame inflation outlook: Reuters poll
The U.S. Federal Reserve will likely wait until September before raising interest rates again, stretching to nine months the time since its first hike in nearly a decade, as it waits for clear signs inflation is picking up, a Reuters poll found. This is the second time this year that economists have delayed their rate-hike expectations, casting doubt on the likelihood the Fed will be able to deliver two rate hikes this year as the U.S. Presidential election in November could make further policy changes sensitive. Almost a third of more than 90 economists in the poll still expect the Fed will raise its federal funds rate to 0.50-0.75 percent in June, suggesting the less than 8 percent chance markets have assigned to that may be too low. - Fiscal stimulus: Industry titans indicate a fundamental shift
Calls for fiscal stimulus Joined by Bill Gross, Carl Icahn, Jamie Dimon and Larry Fink. When the largest investors across divergent sectors all reach the same conclusion at roughly the same time, chances are much higher than average that a fundamental shift is underway. With the voices of titans Bill Gross, probably one of the world’s most savvy bond investors, Jamie Dimon, the face and voice of banking, Carl Icahn, the iconic hedge fund investor and Larry Fink of Blackrock – the poster child of private equity all in unison on fiscal stimulus, you can be sure of one thing: fiscal stimulus is about to begin. What is fiscal stimulus? Essentially it means that governments take the money they’ve amassed thanks to monetary stimulus, and spend it on infrastructure development. - Canada's banks to set aside more funds to cover toxic oil loans
Canada's biggest banks are expected to set aside more funds to cover bad loans to the oil and gas sector, eating into their profits when they announce second quarter results next week, analysts say. Royal Bank of Canada Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce all reported an increase in losses from oil sector loans that turned sour in the first quarter. Although oil prices have improved since February, the banks' second-quarter results will show the impact of credit lines to oil firms being tightened to reflect lower oil prices, a move that could lead some to default on their loans, analysts say. - Investors Piling into Gold; Demand in Record Territory
Gold demand hit near record levels in the first quarter of 2016. Despite the price rising nearly 17%, the demand for gold surged 21% in the opening quarter of the year. It was the second largest quarter on record, according to the World Gold Council. Gold demand hit 1,290 tons in Q1. Concerns about economic instability and an uncertain financial landscape drove the increase. Investors flocked to gold, and ETFs saw a huge inflow of the yellow metal. Total investment demand hit 618 tons, up 122% from the same period in 2015. - Amerigeddon: Are You Ready For The Chaos That Will Ensue When The Power Grid Is Brought Down?
What would America look like with absolutely no electricity? Could you survive in a world with no lights, no cell phones, no computers, no televisions, no ATMs, no cash registers and no refrigerators? Such a world is not as far away as you might think. A very powerful nuclear blast directly over the center of the continental United States could potentially fry electronic equipment from coast to coast, and it would take months or even years to fully restore power. During that time, the entire country would be plunged into chaos and experts tell us that tens of millions of Americans would die. But even if we are never attacked by a nuclear weapon in that manner, scientists assure us that it is inevitable that a massive electromagnetic blast from the sun will produce a similar result someday anyway. In fact, back in 1859 a giant solar storm that came to be known as “the Carrington Event” fried telegraph machines all across North America and Europe. If a similar event happened today, life as we know it would be brought to an abrupt halt, and chaos would ensue from coast to coast. - U.S. Consumer Comfort Drops to Five-Month Low on Economic Views
Consumer confidence fell last week to a five-month low as Americans became more downbeat about the economy, Bloomberg Consumer Comfort data showed Thursday. Sentiment around personal finances and the buying climate were little changed after declining the previous week. Key Points: Consumer Comfort Index eased to 41.7 in the week ended May 8, the lowest since mid-December, from 42. Decrease was led by dimming views of the national economy, with that index sinking 2 points to 30.6, also the weakest in five months. Americans’ views of their finances were little changed at 55.4 after 55.3, while a measure of the buying climate climbed to 39.1 from 38.2. - U.S. jobless claims hit 14-month high; analysts blame Verizon strike
The number of Americans filing for unemployment benefits rose last week to a more than one-year high, but economists blamed striking telecommunications workers for the surge and said the data did not signal a deterioration in the overall labor market. Another report on Thursday showed import prices increased in April for a second straight month, suggesting the disinflationary impulse from a strong dollar and lower oil prices, which has helped to hold inflation well below the Federal Reserve's 2 percent target, was fading. Initial claims for state unemployment benefits increased 20,000 to a seasonally adjusted 294,000 for the week ended May 7, the highest level since late February 2015, the Labor Department said. It was the third consecutive week of increases in first-time applications for jobless benefits. - ECB Prepares to Expand its Racket, Markets Salivate
A few weeks ago, few people had heard of the ECB’s Governing Council Member Vitas Vasiliauskas. In the last week that has all changed, thanks to a surreal interview Vasiliauskas gave to Bloomberg in which he described Europe’s central bankers, with apparent deadpan seriousness, as “magic people” endowed with limitless powers to shape Europe’s economic environment: “Markets say the ECB is done, their box is empty. But we are magic people. Each time we take something and give to the markets — a rabbit out of the hat.” It is arguably the most absurd — and honest — description by a central banker of the role of modern central banking in today’s economy. On Wednesday Vasiliauskas gave Reuters an eagerly anticipated follow-up interview. In it he waxed lyrical about the Eurozone’s rosy economic outlook. “The current situation is stable with positive perspectives,” Mr Vasiliauskas gushed. “So if you ask me what do you think about possible steps during the summer, my answer would be: nothing.” - These Charts Show the Truly Dismal State of Young People in Bailed-Out EU Countries
The human aspects of the European crisis, such as the effects of horrific youth unemployment in some countries, have largely receded from the headlines that ECB potentate Mario Draghi rules with his beautifully concocted negative-interest-rate absurdity and his efforts to manipulate the financial markets. Lesser ECB figures also try to get into the headlines edgewise, including German Bundesbank president Jens Weidmann, but no one listens to him anymore. Yet, and despite Draghi’s bluster, the real problems in the EU, particularly in Greece, Portugal, Cyprus, and Spain, have not been solved – and I mean, not at all – as shown by the results of the big poll about young people in the EU. The survey, commissioned by the European Parliament and conducted by TNS opinion, led to an evocatively-titled report, “Most young Europeans feel marginalized by the crisis, says Eurobarometer poll.” For some countries, the results are outright horrifying. Young people are the future. They’re expected to make these countries function down the road. - More Monetary Stimulus on Deck for UK, But Officials Moving Cautiously Before EU Exit Vote
In light of the economic malaise around the United Kingdom, the Bank of England may be releasing additional monetary stimulus in the near future. They will do this in response to increased unemployment rates and lack of private investing. But the BoE is waiting on a June 23 referendum in which Britain and will decide whether or not to leave the European Union before taking action. The BoE is worried about the possible negative economic consequences this decision will have on its economy. Businesses have already been putting investments on hold until after the vote is has been decided. Mark Carney, the governor of the bank of England and Chairman of the Monetary Policy Committee (MPC), said the pending vote on what has become known as Brexit is weighing on growth and clouding the economic outlook. The MPC voted to hold interest rates at a record-low 0.5% for the time being at its meeting Thursday. - 11 Signs That The U.S. Economy Is Rapidly Deteriorating Even As The Stock Market Soars
We have seen this story before, and it never ends well. From mid-March until early May 2008, a vigorous stock market rally convinced many investors that the market turmoil of late 2007 and early 2008 was over and that happy days were ahead for the U.S. economy. But of course we all know what happened. It turned out that the market downturns of late 2007 and early 2008 were just “foreshocks” of a much greater crash in late 2008. The market surge in the spring of 2008 was just a mirage, and it masked rapidly declining economic fundamentals. Well, the exact same thing is happening right now. The Dow rose another 222 points on Tuesday, but meanwhile virtually every number that we are getting is just screaming that the overall U.S. economy is steadily falling apart. So don’t be fooled by a rising stock market. Just like in the spring of 2008, all of the signs are pointing to an avalanche of bad economic news in the months ahead. The following are 11 signs that the U.S. economy is rapidly deteriorating… - Next Step for the US: Looks like Helicopter Money
It just seems like human nature to ruin a good thing. As much as I am a strong proponent of free market capitalism, and against complex regulations and central planning, I understand government’s role in all this. Capitalism and democracy teamed up in the late 1700s to form the big bang in economics, or what I call “When Harry met Sally.” They’re opposites that balance each other – capitalism rewards people for their contributions, and democracy ensures that greed doesn’t take over. We took Adam Smith’s theory of the “invisible hand,” limited government and laissez faire politics… and combined it with Alexander Hamilton’s doctrine of a stronger government to enhance capitalism. We invested in common infrastructures, established a central bank with uniform monetary policies, and implemented financial and legal systems – things free market capitalism can’t do alone. That’s why, together, these two ideologies complement each other – so long as they don’t get in each other’s way. - Recession Watch: Freight Volume Drops, Worst Level since 2010
Freight shipments by truck and rail in the US fell 4.9% in April from the beaten-down levels of April 2015, according to the Cass Transportation Index, released on Friday. It was the worst April since 2010, which followed the worst March since 2010. In fact, shipment volume over the four months this year was the worst since 2010. This is no longer statistical “noise” that can easily be brushed off. The Cass Freight Index is based on “more than $26 billion” in annual freight transactions by “hundreds of large shippers,” regardless of mode of transportation, including by truck and rail. It does not cover bulk commodities, such as oil and coal and thus is not impacted by the collapsing oil and coal shipments. The index is focused on consumer packaged goods, food, automotive, chemical, OEM, heavy equipment, and retail. In a similar vein, the Association of American Railroads reported last week that loads of containers and trailers fell 7.5% in April year-over-year. “Intermodal” is a direct competitor to trucking. Combined, they’re a measure of the goods-based economy. - Now ECB chief admits European banks ARE facing ‘challenges' amid meltdown fears
THE head of the European Central Bank (ECB) has admitted some of the eurozone's biggest banks are facing difficult times ahead amid fears of a new financial crisis in Europe. Last week investors dumped shares in top German and French banks Deutsche and Societe Generale amid concerns over the firms' solvency. Today Mario Draghi said: “Clearly, some parts of the banking sector in the euro area still face a number of challenges.” The central banker highlighted the litigation and restructuring costs faced by some of Europe's banks, on top of ‘bad' loans sitting on their books. Mr Draghi said the situation had blown up over worries that banks in Europe could struggle in an economy with lower growth and lower interest rates. - Gold’s Best Quarter in 30 Years Is Just the Beginning
Last week, we reported that billionaire investor Stanley Druckenmiller is publicly advising investors to sell United States stocks and buy gold. Druckenmiller is now joined in his gold recommendation by an equally legendary hedge fund manager – Paul Singer. In a client letter at the end of April, Singer wrote: “It makes a great deal of sense to own gold. Other investors may be finally starting to agree. Investors have increasingly started processing the fact that the world’s central bankers are completely focused on debasing their currencies… We believe the March quarter’s price action could represent something closer to the beginning of such a move than to the end.” - Research Affiliates: Where's The Beef? ‘Lies, Damned Lies, And Statistics’
Key Points: American households, pinched by rising prices at a rate higher than headline inflation, have generally not benefited from the unrelenting stimulus of quantitative easing and zero interest rates, and instead have experienced a decade of zero growth in income and spending power. The high valuations and low interest rates born of accommodative monetary policy lower forward-looking returns for both the wealthy and the middle class, but the middle class, who must invest today to prepare for retirement tomorrow, suffers relatively more. When the Fed eventually steps away from overt market interventions, capital market valuations should revert to more normal (i.e., lower) levels, which would bring with them more sensible forward-looking returns. - Chinese Government Now Fretting about Auto Industry
Overcapacity weakened the US auto industry before the Financial Crisis, and destroyed it during the crisis, with two of the Big Three automakers, some of the biggest component makers, and numerous smaller component makers going bankrupt. It was during the bankruptcy process that the industry restructured, laid of hundreds of thousands of people, shuttered and shed plants, mauled creditors, destroyed stockholders, and finally got rid of overcapacity. Overcapacity is devastating to the industry, employees, investors, and creditors. But it feels good on the way up. And now the Chinese auto industry has that problem. The automakers active in China, including all global brands, have had no patience with doubters, and announcements of new assembly plants being built in different parts of China became a near weekly ritual. - Janus Capital’s Bill Gross Peeks into the Future and Sees Money Falling from the Sky
Bill Gross took a peek into the future in his most recent Monthly Investment Outlook for Janus Capital, and he saw money raining from the sky. Gross said he believes the structural changes currently occurring in the US economy will ultimately lead to so-called helicopter money. Of course, choppers wouldn’t literally drop cash from the sky. But helicopter money is the ultimate stimulus program. The newly printed cash goes directly into the hands of the people themselves. Basically, the government hands out money – or figuratively drops it from a helicopter. - Donald Trump's Glorious Threat To Default On The National Debt Is Just The Conventional Wisdom
Donald Trump has pointed out that if the US got into trouble with the national debt then it would be possible to negotiate that debt down. Perhaps buy it back at a discount, negotiate somehow with the holders of the debt so that they will agree to take less than the full amount they are owed. This has of course had all sorts of people up in arms: but the glory of this is that The Donald is exactly correct here, even if we usually prefer that people don’t say so. To prove this point I would mention just four words: Puerto Rico, Argentina, Greece. For what is it that all right thinking people, all financiers, bien pensants and politicians have been calling for in those three cases? That there’s too much debt and thus those who lent the money should be paid back something less than the amount they lent. And one can see a certain similarity between those who argue so and those who are the most horrified at Donald Trump in general. Yet all Trump is actually giving voice to here is the entirely conventional wisdom. When a government owes more than it can pay then we have a sovereign default. Something that can be better or worse managed, entirely true, but this is what we do. In fact, we usually get the IMF in to help it happen, recognising that firstly this is what has to happen and secondly it’s better if it’s properly managed. - Global War Tensions Rise, Economy Getting Worse and MSM Totally Unfair to Trump
There was a new missile defense system installed in Romania. The U.S. says it is to protect Europe from an attack from a “rogue state.” Russia says this new missile defense site is a “direct threat to global and regional security.” Russia also says this is a “destructive action.” One Russian commentator said the missile deployment “. . . might even accelerate the slippery slope to nuclear war in a crisis.” Meanwhile, there is a new face-off in the South China Sea between China and the U.S. Navy. The U.S. says that China is making “excessive maritime claims” in important international waters used for massive amounts of shipping. China disagrees and says its island building is fine and says the presence of U.S. Navy ships threatens its sovereignty. It also says navigation is not being interfered with by China. The U.S. sent a guided missile destroyer within 12 nautical miles of China’s disputed man-made islands. China says the U.S. action was a “threat to peace.” - American Billionaire Warns To Get Out Of The Stock Markets And Run To Gold
Billionaire trader, Stanley Druckenmiller, recently stated that the current situation in the global economy is similar to the situation on the eve of the crisis of 2008. At the Ira Sohn Investment Conference in New York, he said, “The bull market is exhausting itself… The Fed has borrowed from future consumption more than ever before. It is the least data dependent Fed in history. This is the longest deviation from historical norms in terms of Fed dovishness than I have ever seen in my career.” And Druckenmiller was quoted by CNBC, saying, “This kind of myopia causes reckless behavior.” He warned that people should get out of the stock market and buy gold. We agree with him, of course. But, it got us to thinking about how many Americans, or other Westerners, own gold at this crucial time. - Worst is Yet to Come? US Billionaire Warns of Crisis Worse Than 2008
The current situation in the global economy is similar to the situation on the eve of the crisis of 2008, billionaire trader Stanley Druckenmiller said. According to the businessman, the main risks stem from actions of the US Federal Reserve and the People’s Bank of China. He criticized the Federal Reserve for its “myopic policy” of low interest rates which has led to growing bullish sentiments in the market. “The bull market is exhausting itself,” he said at the Ira Sohn Investment Conference in New York. The Fed’s easy monetary policy has resulted companies taking on massive debt loads which they then used to buy back shares, instead of increasing capital spending. - Which US Companies Stockpile the Most Profit “Overseas?” But where the Heck is the Money?
There is a misconception about the uncanny ability of very profitable US companies, like Microsoft and Apple, to park their profits overseas in order to dodge US taxes: the money from these profits that are parked “overseas” isn’t actually overseas. It is registered in accounts overseas, for example in Ireland, but is then invested in whatever assets the company chooses to invest it in, including in US Treasuries, US corporate bonds, US stocks, and other US-based investments. This was revealed to the public during the Senate subcommittee investigation and hearings in March 2013 that exposed where Apple’s profits that were officially parked “overseas” actually end up. “Tim Cook emerged smelling like a rose, the triumphant CEO of America’s most iconic welfare queen,” I wrote at the time. And so the practice continues in all its glory. These funds cannot even be “repatriated” because they’re already here — or wherever the company wanted to invest them. - Who’s Really Most Afraid of Brexit? And Why?
One of the glaring but oft-overlooked ironies of the Brexit debate is the fact that the UK has been one of the biggest beneficiaries of the creation of the euro, despite not being a member of the Eurozone and holding the single currency in rampant disregard. The UK economy has certainly benefited more than most Eurozone economies. Since 2001 Britain’s share of key financial markets has exploded. London is now home to almost one-half of the entire global interest-rate OTC derivatives market, compared to 35% in 2001. Its share of global forex turnover increased from 33% to 41% between 2001 and 2014. And its share of global hedge fund assets doubled, from 9% to 18%. Almost 2.2 million people work in financial and related services such as accounting and law, two-thirds of them outside London, reports a study by the financial services lobby group CityUK. They produce nearly 12% of the UK’s GDP, 11% of its tax take, and a net trade surplus of £72 billion ($104 billion). - NATO assembles its biggest military build-up since the Cold War as more troops are deployed in eastern Europe to deter Russia
NATO foreign ministers have been finalising the alliance's biggest military build-up since the end of the Cold War in the face of a more aggressive and unpredictable Russia. NATO chief Jens Stoltenberg said the two-day meeting, which began yesterday, would address ‘all the important issues' to prepare for a ‘landmark' summit in Poland in July. NATO leaders will endorse plans to puts more troops into eastern European member states as part of a ‘deter and dialogue' strategy. Lithuania, Estonia, Latvia, Poland, Romania and Bulgaria have all been meant to reassure allies they will not be left in the lurch in any repeat of the Ukraine crisis. - Multiple Collapse Triggers Everywhere-V the Guerilla Economist
“V” the “Guerilla Economist” fears another global financial collapse “every day and every night.” “V” explains, “Economically speaking . . . What I see is it’s not one event. There are multiple triggers everywhere. If Deutsche Bank goes belly up tonight . . . that could send a cascade of bank failures throughout the euro zone, which will blow back right here through London to New York, and we will be in the absolute crap storm. We will be in the middle of it. It could happen at any time. If the Saudis decide to go nuts and decide to dump $750 billion . . . if they start dumping U.S. Treasuries, it can cause a run on the bond market. It could cause a massive fissure and a massive blow back. Then, you have what’s going on with derivative interest rate swaps, which are also tied into bonds, which are also tied into the repurchasing markets. All these things can bring pressure, and all you are seeing are nothing but triggers everywhere. So, Donald Trump is right. We could be in a financial meltdown. It amazes me that the media would rather question him about Trump steaks or Trump University or why his clothing is being pulled out of Macy’s versus asking Trump about him saying the economy can go belly up, and we can be in a financial meltdown. Nobody even brings that up. That’s unbelievable.” - Woodward: Washington Post Assigns 20 Reporters to Dig Into Trump's Past
The Washington Post has assigned 20 reporters to look into every aspect of Donald Trump's past as the presumptive GOP nominee seeks to become the next president of the United States, famed Post associate editor, Bob Woodward, said Wednesday. “There's a lot we don't know,” Woodward told the National Association of Realtors convention, according to The Washington Examiner. “We have 20 people working on Trump, we're going to do a book, we're doing articles about every phase of his life.” - Global Elite Making Preparations for Post-Dollar World-Rob Kirby
Macroeconomic analyst Rob Kirby says his rich clients around the planet are bracing for an inevitable economic calamity. Kirby explains, “The people I know, that I would say are at the higher level of the food chain in the global world of finance, are hunkered down and making very serious preparations. What I see on a macro level is people acting like squirrels preparing for winter. They are burying nuts and gathering as much physical precious metals as they can. They are making preparations for a post-dollar world in terms of world reserve currency.” On news that there are more than 540 paper claims for every ounce of Gold at COMEX, Kirby contends, “There are 540 claims for every ounce of gold at the COMEX vault. My question to you is what happens if that gold is in fact leased metal? Then, the 540 becomes 1,080, and what if it has been leased two times? Then, it becomes 2,160. So, the number of claims for every ounce of gold may be many factors higher than even 540.” - Pope Francis Calls For Worldwide Communist Government
In this Jubilee Year 2016, Pope Francis affirmed communism as the best structure for humankind and the European Union. He did so upon receiving the Charlemagne Prize last week and made a speech that included the following comment: “We need to move from a liquid economy prepared to use corruption as a means of obtaining profits, to a social economy that guarantees access to land and lodging through labor.” Read that quote carefully. What is he proposing here? He wants to move from a “liquid economy”… what does that mean? My only guess is that he wants the economy to be less fluid… more controlled. He then seems to imply that making profits (creating wealth, you know, the stuff that enables him to sit on his golden thrones in his massive militarized compound) is in some way corrupt. He then wants to move to a “social economy”, which I presume means socialism/communism. And through that he wants to “guarantee” access to land and lodging through labor. You know who else received guaranteed access to lodging through labor? African slaves in the 1800s. For this Pope it seems a kind of slavery is best suited to the human condition. Everyone is entitled to the essentials and not much more. And in return, everyone “labors.” - Can Saudi Arabia Really Break Its Dependence On Oil?
Saudi Arabia appears committed to its recently-announced long-term economic plan, dubbed Vision 2030, which aims to remove the country’s economic dependence on oil exports within the next several decades. The removal of Ali al-Naimi, who for twenty-five years acted as the Kingdom’s oil minister and engineered the production surge guiding Saudi policy since November 2014, is a further indication of the government’s determination to make a major economic course correction. But can they do it? Oil covers 70 percent of government revenue, while the oil industry is a major employer for the Saudi workforce. The immediate reaction to the plan, announced on April 25 by Crown Prince Muhammed bin Salman, was guarded optimism. Recently there has been much more skepticism, with some doubting how Saudi Arabia could accomplish all that it has planned for itself. - Another Asset Bubble Cracks: Art Sales Plunge
After a blistering five-year boom of near limitless possibilities, it is suddenly getting tough in another asset class – one that mere commoner millionaires are not invited to play in: the high-dollar art market. Auction house Sotheby’s reported on Monday that revenues in the first quarter plunged 32% from a year ago. Agency commissions and fees, the largest subcategory, plummeted 37%. Expenses edged up. Hence a resounding operating loss of $32 million – a $50-million swing from its $18 million profit a year ago. On the news, Sotheby’s shares plunged 8%, at one point trading below $26 a share, but then miraculously bounced back and today closed at $28.72. Yet, they’re still down 38% from their 52-week high last June, and 46% from the post-financial crisis high in December 2013, the halcyon days when QE was still inflating the art market and the wealth of its participants. - The real problem with negative interest rates? They are a stealth tax
Central banks have slashed interest rates to nothing. They have printed money on a vast scale. Where that has not quite worked, and if we are being honest that is most places, they now have a new tool. Negative interest rates. Across a third of the global economy, money you put in the bank does not only generate nothing in the way of a return. You actually get charged for keeping it there. That is already producing strange, Alice-in-Wonderland economics, where nothing is quite what it seems. Governments want you to delay paying taxes as long as possible, the mortgage company pays you to stay in the house, and cash becomes so sought after there is even talk of abolishing it. But the real problem with negative rates may be something quite different. - Wealth Confiscation for the Digital Age: the New “Cash Tax”
“Negative interest rates” have become a phenomenon with economists and the media. But I’m writing to tell you something about negative interest rates you haven’t heard. You certainly won’t hear about it in the mainstream press. What’s coming at you is a historic event. It’s something our grandchildren will hear stories about, much like the Great Depression or the Cold War. It could send the price of gold much higher in the coming years. If you know what’s coming, it could mean the difference between having lots of free cash in retirement and barely getting by. And please remember this warning: Social Security will help even less than you think. To understand the gravity of this moment, let’s cover one of the most bizarre ideas in the world… - “Evil World Banking” Explained
In this animated video, John Perkins, author of Confessions of an Economic Hit Man, explains how terrorism and a “mutant, viral form of capitalism” are connected. “If we want to get rid of terrorism, we must get rid of the root causes,” he says, “that cancer that is destroying our whole system.” The video, created by Studio Joho, shows, very simply, how someone transforms from a vibrant kid into a dangerous terrorist. When corporations take over entire nations, depleting their resources and leaving governments in debt to giant institutions, people become desperate. Once they lose their homes and families to a crippled economy and a bloody war, what choice do they have? “I think it’s really important that we understand today,” Perkins emphasizes, “we cannot have homeland security unless we understand that the whole planet is our homeland.” - With A Historic -150% Net Short Position, Carl Icahn Is Betting On An Imminent Market Collapse
Over the past year, based on his increasingly more dour media appearances, billionaire Carl Icahn had been getting progressively more bearish. At first, he was mostly pessimistic about junk bonds, saying last May that “what's even more dangerous than the actual stock market is the high yield market.” As the year progressed his pessimism become more acute and in December he said that the “meltdown in high yield is just beginning.” It culminated in February when he said on CNBC that a “day of reckoning is coming.” Some skeptics thought that Icahn was simply trying to scare investors into selling so he could load up on risk assets at cheaper prices, however that line of thought was quickly squashed two weeks ago when Icahn announced to the shock of ever Apple fanboy that several years after his “no brainer” investment in AAPL, Icahn had officially liquidated his entire stake. As it turns out, Icahn's AAPL liquidation was just the appetizer of how truly bearish the legendary investor has become. - Only Six Years After BP Oil Disaster, Gulf Coast Is Faced With New Drilling
The horizon looked like peanut butter. That’s what Cherri Foytlin thought six years ago as she sat in a boat speeding toward the largest oil spill ever in the Gulf of Mexico. Then a journalist for a local Louisiana paper, Foytlin enlisted a fisherman and his son to give her a behind-the-scenes look at the damage caused by BP’s Deepwater Horizon oil-rig explosion that killed 11 people and spewed 205.8 million gallons of oil over 87 days in 2010. - How Much Does It Cost to Win a Seat in the U.S. Senate?
Average cost of a losing campaign for a seat in the U.S. House of Representatives, 2012: $540,022. Average cost of a winning campaign for a seat in the U.S. House of Representatives, 2012: $1,567,379. Average cost of a losing campaign for a seat in the U.S. Senate, 2012: $7,434,819. Average cost of a winning campaign for a seat in the U.S. Senate, 2012: $11,474,362. - Bob Diamond says Africa faces challenges as global banks pull out
The fast-growing economies of Africa face headwinds from the pull-back of international banks from the continent, Barclays' erstwhile-chief executive told CNBC, as the bank moves to sell down its business in Africa. Countries like Nigeria, the continent's biggest economy, received a flurry of international trade finance in the build-up to the global financial crisis of 2007-08. Since then, inflows have slowed, increasing the economic challenge for the continent where many people still struggle to access energy supplies or basic education. “There are headwinds from commodities and international banks pulling out,” Bob Diamond told CNBC Africa on Saturday at the London Business School's Africa Business Summit. - 9/11 bill passes US Senate despite Saudi ‘warning'
A bill that would allow the families of 9/11 victims to sue the Saudi government has passed a key hurdle in the US Senate. The Justice Against Sponsors of Terrorism Act (JASTA) now moves to the House of Representatives. Saudi Arabia's foreign minister warned that the move could cause his government to withdraw US investments. President Barack Obama said he will veto the bill, but a Democratic senator is “confident” he'd be overruled. If it became law the legislation would allow victims' families to sue any member of the government of Saudi Arabia thought to have played a role in any element of the attack. Saudi Arabia denies any involvement in the 2001 attack on the World Trade Center and the Pentagon, which killed nearly 3,000 people. Fifteen out of the nineteen hijackers in 2001 were Saudi citizens. - China Furious After US Launches Trade War “Nuke” With 522% Duty
Now that China's brief infatuation with “rationalizing” excess capacity in its massively glutted (and insolvent) steel sector is over after lasting all of 2-3 months, China is back to doing what it did in late 2015 (and what it has always done) when as we reported, a surge in Chinese exports led to the first salvos in the trade war between China – the world's biggest exporter of various steel products and is responsible for half the entire world's steel output – and countries who are importing dumped Chinese products at the expense of their own steel and mining industries. Nowhere has this trade tension been more obvious than in the UK, where in recent months angry, protesting steel workers have been demanding rising protectionist steps against a country they, rightfully, see as unleashing a global commodity deflation driven by out of control, and unprofitable by highly subsidized, production by Chinese steel mills. The US was not left unscathed: we reported in December that “The Trade Wars Begin: U.S. Imposes 256% Tariff On Chinese Steel Imports” and since then things have progressively turned worse, finally culminating overnight with an outburst of anger from Chinese officials who, after attempting to flood not just the US but also the entire world with their commodity in general and steel in particular, exports… - US hikes duty on Chinese cold-rolled steel imports by 522%
The US has raised the duty on Chinese cold-rolled steel by more than five-fold in an attempt to curb the flooding of foreign products into its market. Import taxes have been bumped up by 522%, with the Commerce Department ruling that Chinese companies were dumping their excess steel output in overseas markets below market cost and with unfair subsidies. It came after five major US steel producers — United States Steel, AK Steel Corp, ArcelorMittal USA, Nucor Corp and Steel Dynamics Inc — filed a formal trade action in 2015 alleging foreign companies of selling steel at unfairly low prices. The companies claimed they had been forced to lay off 12,000 steel workers over the past year as a result. The Commerce Department set final anti-dumping duties of 266% — and anti-subsidy duties of 256% — on cold-rolled flat steel from China. It also levied a 71% import tax on Japanese cold-rolled steel. - Climate change puts 1.3bn people and $158tn at risk, says World Bank
The global community is badly prepared for a rapid increase in climate change-related natural disasters that by 2050 will put 1.3 billion people at risk, according to the World Bank. Urging better planning of cities before it was too late, a report published on Monday from a Bank-run body that focuses on disaster mitigation, said assets worth $158tn (£109tn) – double the total annual output of the global economy – would be in jeopardy by 2050 without preventative action. The Global Facility for Disaster Reduction and Recovery said total damages from disasters had ballooned in recent decades but warned that worse could be in store as a result of a combination of global warming, an expanding population and the vulnerability of people crammed into slums in low-lying, fast-growing cities that are already overcrowded. - Chinese pour $110bn into US real estate, says study
Chinese nationals have become the largest foreign buyers of US property after pouring billions into the market in search of safe offshore assets, according to a study. A huge surge in Chinese buying of both residential and commercial real estate last year took their five-year investment total to more than $110bn, according to the study from the Asia Society and Rosen Consulting Group. The sheer size of that total has helped the real estate market recover from the crash that began in 2006 and precipitated the 2008 economic crisis, they said. Chinese investment in property has also helped to inflate prices in other developed countries, notably the UK and Australia in the wake of the dip in world stock markets in 2015. - Greeks switch to bartering because there's not enough currency
Greeks are turning to the age-old system of bartering to help combat the country’s liquidity crisis. Artistic designs are being exchanged for olive oil, accounting tips for office supplies, and 6,000 new users signed up for online bartering site Tradenow after capital controls were imposed in June, according to the New York Times. “In Greece there’s a major liquidity problem,” Thodoris Roussos, a Greek butcher who bought a new truck with his own meat, told the Times. “People are finding it more convenient to trade because money is not readily available.”
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Latest News Articles – May 19, 2016
From James Harkin (Webmaster & Editor of LindseyWilliams.net). Here is a summary of articles of interest from around the world for this week. Please LIKE the Lindsey Williams Online Facebook Page to see stories posted daily regarding the current state of the economy around the world.
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Latest News From April 29, 2016 to May 19, 2016:
- 50-Year Veteran Warns A Massive Reset Of The World Financial System Is Coming
With the U.S. dollar continuing to trade near recent lows and gold trading near $1,240, today a 50-year market veteran warned King World News that a massive reset of the world financial system is coming. John Embry: “Eric, just when you think things can’t become any more artificial or ludicrous, Bloomberg comes out with a report that the Japanese central bank, by virtue of its month-to-month purchases of Japanese stock ETFs, is now a top ten holder in approximately 90 percent of the Japanese companies that make up the Nikkei 225 Index… - ALERT: Legend Warns A Day Of Reckoning Is Coming And The Global Collapse Will Be Absolutely Terrifying
After a wild start to the 2016 trading year, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, just warned a day or reckoning is coming and the global collapse will be absolutely terrifying. Egon von Greyerz: “Investors around the world are blissfully ignorant of what will hit them in the coming months and years. Virtually no one understands the risks in the world, and less than 0.5% of investors have protected themselves against the destruction of their financial assets… - Saudi Arabia US Friction, Economic Update, China Gold Fix and Fraud Ignored by MSM
The President was in Saudi Arabia in what the White House claims was a trip to “clear the air.” I really don’t know how you clear the air with the friction between the U.S. and the Kingdom. There is ISIS, which the Saudis are funding along with the U.S, but that’s changing because it appears the U.S. is increasing its attacks on ISIS. There is the bi-partisan Senate bill that will release the missing 28 pages of the 9/11 Commission Report that supposedly implicates Saudi Arabia. It will also allow the families if the 9/11 attack to sue Saudi Arabia if it was involved. The Saudis said they would dump a trillion dollars in U.S. assets if that becomes law. President Obama says he will veto. The House and Senate may have enough votes in this election year to override that veto as big time people in both parties are pushing this. The President is also basically telling Arab allies in the Middle East that they should learn how to share the region with Iran. So, I really do not know how they can “clear the air” with zero resolutions. - A Bird's-Eye View Of How The US Economy Is Falling Apart (In 4 Simple Charts)
My college-aged kids love him. I’m not talking about Stephen Curry or Justin Bieber (although they love them too); I’m talking about Bernie Sanders. Whether you support him or not, my guess is that most Americans my age are very surprised about his popularity. However, it shouldn’t be a surprise given the economic stress many Americans face. Sadly, roughly 50 million Americans live below the poverty line—the largest number in our nation’s history—and the poorest 40% of all Americans now spend more than 50% of their incomes just on food and housing. - “We Haven't Seen This Is In Our Lifetimes” – CEO Says “Alberta Is In A Depression”
Regular readers know that we've covered Alberta's decline at length (refresher here), so there is no need to give much of a backstory other than to say that the situation seems to get worse for the Canadian province as each day passes even as oil has rebounded in the past two months. Toronto's “Condo King” Brad Lamb tried to put things into context when he said the situation is “worse than 2008.” However, on Friday we received an even more gloomy (albeit realistic) description of the economic situation in Canada's energy hub, Alberta. In a very blunt interview with BNN, Murray Mullen the CEO of trucking company Mullen Group, said that the situation has moved well past recession, and should be described as a depression. - Despite Record Liquidity, Chinese Repo Rates Are Rising Again
As out friends from Fasanara Capital remind us, despite record liquidity injections by the PBOC in the past few days, Chinese repo rates have resumed continue breaking higher. The move is odd, given ongoing record liquidity injections (RMB 680 bn last week, RMB 150 bn today). As Fasanara's Francesco Filia writes, “the mind inevitably goes to excess credit troubles in China and potential for CNH selling-off” and adds that the “move directly affects leveraged positions on bonds, funded by short-term repos.” While so far, the currency and the SHCOMP remain stable, it is a notable trend to watch. - Saudi Arabia agrees plans to move away from oil profits
The Saudi cabinet has approved sweeping economic reforms aimed at moving the country away from its dependence on oil profits. Just over 70% of revenues came from oil last year but it has been hit by falling prices. One part of the plan will see shares sold in state-owned oil giant Aramco to create a sovereign wealth fund. Announcing the reforms, Deputy Crown Prince Mohammed bin Salman described his country as being addicted to oil. - Greece bailout talks make ‘progress'
Eurozone finance ministers say they have made progress in talks about the bailout programme for Greece. But they said after a meeting in Amsterdam on Friday that further work was still needed. They said they are hopeful that an agreement can reached in the next few days and are ready to call an extraordinary meeting. That would pave the way for the next payment under the bailout. It's a familiar pattern. - Morgan Stanley’s profit more than halved as trading slumps
Morgan Stanley’s quarterly profit fell by more than half as the Wall Street bank’s fixed-income trading and investment banking businesses took a hit from market volatility early in the year. But the earnings still handily beat expectations as the bank slashed employee compensation, helping to push up its shares 2.5 per cent in premarket trading on Monday. Sliding commodity and oil prices, worries about the Chinese economy and uncertainty about U.S. interest rates made for wobbly markets in January and February, scaring off traders, investors and companies hoping to list on stock exchanges. - Citigroup profit plunges 27% as trading revenue falls
Citigroup Inc's quarterly profit plunged 27 percent as its trading revenue fell and its costs related to shrinking some businesses rose. The profit decline is the biggest among big U.S. banks that have reported first-quarter results so far, but Citigroup's earnings and revenue beat Wall Street's low expectations, helped by a fall in operating expenses. Shares of the No.4 U.S. bank by assets were up more than 2 percent in premarket trading on Friday. Banks globally have had a tough start to the year amid near-zero interest rates, a slowdown in China and low oil prices. - Bank of America profit slides 18% as trading activity weakens
Bank of America Corp, the No. 2 U.S. bank by assets, reported an 18 per cent slide in quarterly profit as concerns about a global economic slowdown and uncertainty about the pace of U.S. interest rate increases dampened bond and stock trading. Net income attributable to common shareholders fell to US$2.22-billion, or 21 cents per share, in the three months ended March 31, from $2.72-billion, or 25 cents per share, a year earlier. Analysts on average had expected earnings of 20 cents per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the figures reported on Thursday were comparable. - Gerald Celente – The Dream Is Dying As Americans Now Consume 80% Of Global Painkillers
While politicians lie, the numbers don’t. On the economic front, according to The Pew Research Center, “Americans are less well-to-do now than at the start of the 21st century. For all income tiers, median incomes in 2014 were lower than in 2000. These reversals are the result of two recessions – the downturn in 2001 and the Great Recession of 2007-09 – and economic recoveries that have been too anemic to fully repair the damage.” Once the “land of opportunity,” the gap between the rich and poor in America is the widest among all the developed nations. A report by the University of Michigan illustrates the Gilded Age wealth inequality that now prevails. The median American household was 13.6 times poorer than an average household in the 95th percentile in 2003. By 2013, the average household in the 95th percentile (top 5 percent) was 24.2 times richer than the median household and 426.5 times richer than the average household in the 25th percentile. - Venezuela introduces two-day week to deal with energy crisis
Venezuela's government has imposed a two-day working week for public sector workers as a temporary measure to help it overcome a serious energy crisis. Vice-President Aristobulo Isturiz announced that civil servants should turn up for work only on Mondays and Tuesdays until the crisis was over. Venezuela is facing a major drought, which has dramatically reduced water levels at its main hydroelectric dam. But the opposition has accused the government of mismanaging the crisis. The measures announced on national television by Mr Isturiz affect two million public sector workers. “There will be no work in the public sector on Wednesdays, Thursdays and Fridays, except for fundamental and necessary tasks,” he said. - Durable goods orders were weaker than expected in March
Durable goods orders rose 0.8% in March, according to preliminary data from the Department of Commerce. Excluding transportation, orders fell 0.2%. Economists had forecast that orders for goods built to last rose 1.9%, according to Bloomberg. Excluding transportation orders, they forecast a 0.5% rise. - Atlanta Fed Boosts GDP Forecast Following Today's Durable Goods Miss And Downward Revision
If there was some confusion why the Atlanta Fed recently revised its GDP Nowcast higher following the recent retail sales miss, that confusion will be even more acute today when moments ago the Atlanta Fed plugged today's weaker than expected durable goods print (and downward revision to past month's data), and ended up with… a GDP forecast that was higher than previously, or an increase from 0.3% to 0.4%. - New York City Millennials Make Less, Have More Debt
Millennials in New York City earn about 20% less than the previous generation of young workers and are likely to struggle for years from the effects of the late-2000s recession, according to a report from city Comptroller Scott Stringer. The report found the recession saddled people who were born from 1985 to 1996 with greater debt than their parent and given them fewer high-wage job opportunities even as the cost of housing in the city has risen. “Millennials were applying for jobs in the most difficult economic climate since the Great Depression,” Mr. Stringer said in his report, which was set to be released late Monday. “Every generation is expected to do better than the last, but too many millennials are not getting a fair chance to make it here in New York City.” - Twitter plummets 14% on revenue, outlook miss
Wall Street's view of Twitter can be summed up in far fewer than 140 characters: Too little growth. Twitter shares plunged more than 14% Wednesday after the social media company released financial results after the bell Tuesday. Revenue came in lighter than analysts had forecast and second-quarter revenue guidance fell far short of expectations. Making matters even worse for the beleaguered company, user growth only crept up. The first-quarter triple whammy raised fresh concerns that Twitter will fall even farther behind market leaders Facebook and Google in attracting digital advertising dollars. In a tweet, Twitter acknowledged that “brand marketers did not increase spend as quickly as expected” in the first quarter. - James Rickards Says Yellen Has Gone “Full-Dove;” Won’t Raise Interest Rates
With the Federal Reserve preparing for another meeting, pundits are talking interest rate hikes. Even AP is speculating that a rate hike is unlikely this go-around, blaming problems the “global economy.”The US job market is healthy. The stock market is up. Home prices are rising. Yet as the Federal Reserve prepares to meet this week, it seems in no mood to resume raising interest rates from ultra-lows. With the global economy struggling and US inflation still below the Fed’s target rate, many economists see little likelihood of a rate increase even before the second half of the year.” - Britain's property market is going to implode as housing nears peak affordability
Property prices in Britain may be surging due to a horrendous imbalance of supply and demand — but the market is poised to implode. Why? Because Britons are not earning enough money to either get on the housing ladder or are spending such a large portion of their wages on mortgages that may not be sustainable. Well, not unless everyone suddenly gets a huge pay rise over the next year or so. That's the assumption in the latest figures from think tank Resolution Foundation, which show that lower- and middle-income households are spending 26% of their salaries on housing, compared to 18% back in 1995. In London, households spend 28% of their income on housing. - Venezuela Doesn't Have Enough Money to Pay for Its Money
Venezuela’s epic shortages are nothing new at this point. No diapers or car parts or aspirin — it’s all been well documented. But now the country is at risk of running out of money itself. In a tale that highlights the chaos of unbridled inflation, Venezuela is scrambling to print new bills fast enough to keep up with the torrid pace of price increases. Most of the cash, like nearly everything else in the oil-exporting country, is imported. And with hard currency reserves sinking to critically low levels, the central bank is doling out payments so slowly to foreign providers that they are foregoing further business. Venezuela, in other words, is now so broke that it may not have enough money to pay for its money. - Why Sports Authority is throwing in the towel and closing all of its stores
When struggling retailer Sports Authority filed for Chapter 11 bankruptcy last month in the face of more than $1 billion in debt, the company indicated that it had two options going forward. One of those was to shed under performing stores and emerge from bankruptcy as an intact, but pared-down company. The other was to sell everything and cease operating. On Tuesday, the company appeared to choose the latter. - Suicides Up as Jobs Dry Up
Middle-aged people laid off and unable to find work are taking another way out. They’re killing themselves. Suicide rates are soaring, according to federal data released last week. Especially in economically depressed states and job-starved regions like upstate New York. People in need of work are twice as likely to take their own lives as employed people, and people fired in their 40s and 50s find it hardest to get hired again. That makes boosting economic growth a life-and-death issue. But you wouldn’t know it listening to Barack Obama and Hillary Clinton. President Obama whitewashes reality, claiming the “American economy is pretty darn good right now.” - UK Better Off Outside EU, Economists Say
The UK economy would be about 4% bigger 10 years after leaving the European Union than if it stayed in, according to a group of leading economists who support an exit. A pamphlet published by the eight “Economists for Brexit” set out a series of arguments on the benefits of voting to leave in the referendum on 23 June. They include the claim that lower tariffs on imports from outside the bloc will boost UK consumer spending sharply. It is also argued that EU regulation holds back growth and that without this, jobs and investment will flourish. The pamphlet also argues the UK could better spend its contribution to the EU budget elsewhere, and also that there would be more control over the mix of skills brought by immigrants. - US to paint new pictures on its dying, barbarous relic of a currency
In a letter to the American tax slaves, US Treasury Secretary Jacob Lew “the Loon” has presented his plan to replace some of the images on the dwindling $20, $10 and $5 Federal Reserve Notes. Slave emancipator, Harriet Tubman, will replace Andrew Jackson on the $20, leaders of the suffrage movement will go on the $10 and images of the Lincoln Memorial will go on the $5. You’d think with the US government being $19 trillion in debt they’d have bigger priorities than artwork. The US can’t pay what it owes any more than its indebted citizens can. Something like 50 million are on food stamps and most of the rest don’t have a dollar in the bank to tide them over once things get worse. And they will. Just wait until the dollar crashes for good. - Carl Icahn says he sold entire Apple stake on China woes: CNBC
Billionaire activist investor Carl Icahn said today he had sold his entire stake in Apple Inc, citing the risk of China's influence on the stock. Icahn, in an interview with cable television network CNBC, also said he was “still very cautious” on the US stock market and there would be a “day of reckoning” unless there was some sort of fiscal stimulus. Icahn had been a huge cheerleader of Apple, acquiring a stake in the company almost three years ago, repeatedly calling the investment a “no brainer.” In an open letter to Apple Chief Executive Officer Tim Cook in May 2015, Icahn had argued that shares of the iPhone maker were worth $240, about 90 percent more than they had been trading. At $240 a share, Apple's market cap would be $1.4 trillion, Icahn asserted. - End of Golden Era for Investors Spells Troubles for Millennials
Turning 30 just got a lot scarier. A coming collapse in investment returns means that people that age today will have to work seven years longer or save almost twice as much to end up with the same nest egg as those of roughly a generation ago. So says the research arm of McKinsey & Co. in a new report that argues that investors of all ages need to resign themselves to diminished gains. The consulting company maintains that the last 30 years have been a “golden era” of exceptional inflation-adjusted returns thanks to a confluence of factors that won’t be repeated. They include falling inflation and interest rates, swelling corporate profits and an expanding price-earnings ratio in the stock market. - Federal Reserve Leaves Door Open for June Rate Increase
Federal Reserve policy makers left open the door to raising interest rates in June by nodding to improvement in global financial markets and downplaying recent weakness in the U.S. economy. The Federal Open Market Committee omitted previous language that “global economic and financial developments continue to pose risks,” instead saying officials will “closely monitor” the world situation, according to a statement released Wednesday following a two-day meeting in Washington. The Fed left its benchmark interest rate unchanged. “Their removal of the line on risks is pretty significant,” said Carl Tannenbaum, chief economist at Northern Trust Corp. in Chicago and a former Fed official. “That might reflect increased comfort on the committee that global influences appear more manageable.” - Danger Signs in the World's Top Housing Market
At first glance, the world’s best-performing housing market bears few of the usual hallmarks of a bubble about to pop. Reliance on mortgages is low, and Turkish homeowners reliably repay their loans, helped by house prices that rose faster than in any other country last year. The risk, at a time when construction has grown to make up a bigger share of the country’s investments than in China, is with the builders rather than the buyers. The share of Turkey’s borrowing represented by developers is higher than at any time in the last decade, and represents almost a fifth of all corporate loans, according to the nation’s banking association. An increasing portion of those debts is going bad, with the industry’s portion of non-performing loans nearly doubling in the past five years. “Mortgages are not the problem,” said Ercan Uysal, a banking analyst at Istanbul-based research firm Integras. “Developer leverage is.” - Why “The Grave Dancer” Is Cashing Out Once Again
Sam Zell has called the top again… Zell is a real estate mogul and self-made billionaire. He made a fortune buying property for pennies on the dollar during recessions in the 1970s and 1990s. This earned him the nickname “The Grave Dancer.” Zell was also one of the only real estate gurus to spot the last property bubble and get out before it popped. In February 2007, he sold $23 billion worth of office buildings. U.S. commercial property prices peaked nine months later and went on to plunge 42%. - Investor rebellion over executive pay gathers pace
A shareholder rebellion over excessive executive pay has gathered pace with Weir Group, Shire, Standard Chartered and Reckitt Benckiser all targeted by investors. At the annual meeting of engineering firm Weir Group, a proposed pay policy was rejected by 72% of shareholders. The company says it will discuss alternative options with shareholders. At drugs maker Shire, 49% of investors voted against a 25% pay increase for chief executive Flemming Ornskov. Every three years shareholders receive a chance to vote on the way the formula for executive pay is constructed. That vote is binding, so the board needs a majority of shareholders to vote in favour. So, in the case of Weir, the board of directors will have to come up with a new plan. Votes between these three-year cycles are not binding, but can create embarrassment for the boss and the board of directors, as in the case of Shire. - The U.S. Economy Officially Joins The Global Economic Slowdown – 1st Quarter GDP Comes In At 0.5%
Even the government is admitting that the U.S. economy is slowing down. On Thursday, we learned that U.S. GDP grew at just a 0.5 percent annual rate during the first quarter of 2016. This was lower than analysts were anticipating, and it marks the third time in a row that the GDP number has declined compared to the previous quarter. In other words, GDP growth has been declining for close to a year now, and this lines up perfectly with what I have been saying about how the second half of last year was a turning point that plunged us into the early chapters of a brand new economic crisis. And as you will see below, the official GDP number is highly manipulated, and the way that it is calculated has been changed numerous times over the years. So the bad number that is being reported by the government is actually the best case scenario. - Economy Rotten-Like Apple Sales, Russia US Moving Towards Conflict, MSM Unfair to Trump
The economy is rotten just like Apple iPhone sales numbers. For the first time in 10 years, Apple reported its first quarterly sales drop for their popular iPhone. No, it’s not the end of the world, but it’s a sign there is trouble in the economy. Sure, Facebook beat its earnings projections, but they don’t make anything. Other bad news includes new home sales are down. Manufacturing numbers from the Dallas Fed are down. Consumer sentiment numbers from the University of Michigan are down. Spending is down. Retail sales are down. GDP in the first quarter came in at a paltry .5%. Economist John Williams says that number will be revised down and will probably turn negative. Williams says we are already in a recession or soon will be. Both Bo Polny and Greg Mannarino say the same thing: we are getting to a point where they can no longer hide the bad economy, and there really is no recovery after all. - Dollar Selling Panic Coming-John Williams
Economist John Williams has long predicted the $16 trillion in U.S. dollar assets held outside of America will be sold in a panic. The time draws near for that scenario to unfold, and Williams explains, “When people start selling the dollar, or dollar denominated assets, you will see the value of the plunge. We have had a remarkable rally in the dollar since mid-2014, and it is up over 30%. It is going to be going down by more than that, and we are going to be headed to new lows. We have the waffling of the Fed and the beginnings of the perception that the economy is in serious trouble, which generally would be negative for the dollar. We have started to see selling pressure on the dollar. It has been inching lower. It’s down year to year now. . . . The selling is going to intensify, not only with large central banks, but with corporations that will be beginning to dump their Treasury holdings. . . . Nobody wants to be the last one out the door when you have a panic like this. It’s not a panic yet, but the potential certainly is there.” - As The Price Of Gold Soars, Legend Warns That The World May Now Be Facing Catastrophic Consequences
Today a legend who oversees more than $170 billion warned that the world may now be facing “catastrophic consequences.” Eric King: “Rob, your firm helps to oversee $170 billion globally. What has you worried going forward? What has you concerned?” Rob Arnott: “We are overdue for a U.S. equity bear market and if we get a bear market it will have ripple effects across other asset classes. But the other thing that worries me even more than that is the central banks losing credibility and losing control. - ALERT: Top Money Manager Says Gold And Silver Are Destined For A Historic Mania!
Today one of the top money managers in the world told King World News that gold and silver are destined for a historic mania! Stephen Leeb: “Right now I am focused on gold and silver, particularly gold and silver stocks. Many of these stocks have already tripled in price and some have gone up much more than that. I understand that the massive gains in the high quality mining companies give people pause, and they worry about whether or not to sell. But if I’m right, Eric, about there being a massive bull market in gold, can you imagine how high these stocks will go? Meaning, you haven’t seen anything yet when it comes to the shares. By the time this bull market is near its conclusion it will be an internet mania type of atmosphere for the mining shares… - Gold and Negative Interest Rates
We hear more and more talk about the possibility of imposing negative interest rates in the US. In a recent article former Fed chairman Ben Bernanke asks what tools the Fed has left to support the economy and inter alia discusses the use of negative rates. We first have to define what we mean by negative interest rates. For nominal rates it’s simple. When the interest rate charged goes negative we have negative nominal rates. To get the real rate of interest we have to subtract inflation from the nominal rate, so to speak remove the illusion of inflation. - Venezuela Ups Minimum Wage; Effective Rate a Whopping $13.50 Per Month
So much for that socialist paradise. Last summer we reported that hyperinflation had devalued the Venezuelan bolivar to the point that people were using 2-bolivar notes as napkins. In order to keep up with the rate of devaluation, the Venezuelan government literally flew in 747s full of cash. Now we’ve learned that the Venezuelan government is so broke, it can’t even pay to print more money. - Two Fed Officials Signal Markets May Be Wrong to Doubt June Hike
Two regional Federal Reserve presidents said that an interest-rate increase should be on the table next month, pushing back against market expectations that the U.S. central bank will keep policy on hold for a fourth consecutive meeting. Atlanta Fed chief Dennis Lockhart and San Francisco’s John Williams both signaled on Tuesday that the U.S. economy could warrant a rate hike when the policy-setting Federal Open Market Committee gathers on June 14-15. Investors currently only see a 12 percent chance of such a move, according to pricing in interest rate futures contracts. “I would put more probability on it being a real option,” Lockhart told reporters at the Atlanta Fed’s financial markets conference at Amelia Island, Florida, when asked about the low implied odds of a move next month. “The communication of committee participants and members between now and mid-June obviously should try to prepare the markets for at least a realistic range of possibilities” for the next policy meeting. - Hedge Funds Under Attack as Steve Cohen Says Talent Is Thin
In less than seven days, hedge funds have been subject to a three-pronged attack by some of the biggest names in finance. Steve Cohen, the billionaire trader whose former hedge fund had racked up average annual returns of 30 percent before pleading guilty to securities fraud three years ago, became the latest critic of the business, saying he’s astounded by its shortage of skilled people. “Frankly, I’m blown away by the lack of talent,” Cohen said at the Milken Institute Global Conference in Beverly Hills, California, on Monday. “It’s not easy to find great people. We whittle down the funnel to maybe 2 to 4 percent of the candidates we’re interested in. Talent is really thin.” - U.S. Suicide Rate Surges to a 30-Year High
Suicide in the United States has surged to the highest levels in nearly 30 years, a federal data analysis has found, with increases in every age group except older adults. The rise was particularly steep for women. It was also substantial among middle-aged Americans, sending a signal of deep anguish from a group whose suicide rates had been stable or falling since the 1950s. The suicide rate for middle-aged women, ages 45 to 64, jumped by 63 percent over the period of the study, while it rose by 43 percent for men in that age range, the sharpest increase for males of any age. The overall suicide rate rose by 24 percent from 1999 to 2014, according to the National Center for Health Statistics, which released the study on Friday. - Australia's Central Bank Cuts Rates to Record Low
Australia’s central bank cut its benchmark interest rate to a record low and left the door open for further easing to counter a wave of disinflation that’s swept over the developed world. The move sent the local currency tumbling and stocks climbing. Reserve Bank of Australia Governor Glenn Stevens and his board lowered the cash rate by 25 basis points to 1.75 percent Tuesday, a move predicted by just 12 of 27 economists surveyed by Bloomberg. The rest had seen no change. Data last week showed quarterly deflation in the consumer price index and the weakest annual pace on record for core inflation — which the RBA aims to keep between 2 percent and 3 percent on average. - Puerto Rico’s Debt Crisis Deepens as Government Misses Payment
Puerto Rico’s debt crisis moved into a more perilous phase for residents, lawmakers and bondholders Monday after the Government Development Bank failed to repay almost $400 million. The missed principal payment, the largest so far by the island, is widely viewed on Wall Street as foreshadowing additional defaults this summer, when more than $2 billion in bills are due. - U.S. manufacturers still aren’t finding much daylight, ISM survey shows
U.S. manufacturers barely grew in April and there’s little sign of a broad pickup in business anytime soon, a survey of executives found. The Institute for Supply Management said its manufacturing index fell to 50.8% last month from 51.8% in March. Economists surveyed by MarketWatch had forecast the index to fall to 51.4%. - The Nasty Secret About America’s Job Market
By all appearances, it seems like the American economy is back on its feet. Businesses are getting back on their feet, and as a result hiring additional employees to staff their firms. Many of the best jobs out there pay high wages, and the unemployment rate has held steady at around 5% for the past six months, according to the Bureau of Labor Statistics. For all intents and purposes, there are reasons to be optimistic about the economy. But once you dig past the headline unemployment rate, things get a little cloudier. A significant portion of Americans are considered to be “long-term unemployed,” and haven’t been able to find a job for extended periods of time. In other cases, older generations are finding jobs, but at the expense of younger workers looking to fill those same positions. But the biggest unresolved problem is that American’s part-time workforce has grown significantly, and experts aren’t sure it will ever shrink back to pre-recession levels. - Is the US Economy Heading for Recession?
This past week the U.S. government announced the contry’s economy rose in the January-March 2016 at a mere 0.5 percent annual growth rate. Since the U.S., unlike other countries, estimates its GDP based on annual rates, that means for the first quarter 2016 the U.S. economy grew by barely 0.1 percent over the previous quarter in late 2015. Growth this slow indicates the US economy may have “slipped into ‘stall speed’, that is, growth so weak that the economy loses enough momentum and slides into recession”, according to economists at JPMorgan Chase. - Baker Hughes Says US Oil Rig Count Drops Another 11 to 332
Baker Hughes reported the active oil rig count fell by 11 rigs to 332 for the week ending April 29. The total number of active oil and gas rigs declined by 11 to 420. This is the nineteenth week in a row the combined oil and gas rig count has fallen, moving further into record low territory. It is the sixth week in a row for oil-rigs only, now putting the total at its smallest count since late 2009. For the week ending April 22 the energy company said 9 combined oil and gas rigs went offline, bringing the total number of oil and gas rigs down to 431. The oil-rigs only count fell by 8 to 343. Crude oil is extending its gains for a fourth straight week and second consecutive month. The June WTI crude oil contract is currently trading lower on the session by 0.46% to $45.81. - U.S. Consumer Sentiment Fell as Caution Continued
A closely watched gauge of U.S. consumer sentiment declined in April to its lowest level in seven months, the latest evidence of growing worry about the economy’s momentum. The University of Michigan final consumer-sentiment index for April, released on Friday, was 89.0, down from March’s final reading of 91.0 and the lowest level since September. “Consumer sentiment continued its slow decline in late April due to weakening expectations for future growth, although their views of current economic conditions remained positive,” said Richard Curtin, the survey’s chief economist. - Chicago PMI falls to 50.4 in April in sign of economic weakness
A measure of Chicago-area economic activity softened in April, indicating that manufacturers and other large companies are still struggling to cope with lower exports, tepid global growth and even some weakness in the United States. The Chicago business barometer, or Chicago PMI, fell 3.2 points to 50.4 in April, MNI Indicators said Friday. Any reading over 50 indicates improving conditions, but the index has been hovering near the cutoff line for more than a year. Three of the five components in the survey deteriorated, including new orders. Orders dropped to the lowest level since December. Employment also turned negative again. A larger number of poll respondents are worried about the impact of a pending Federal Reserve interest-rate hike, the organization that compiles the report noted. - Automating Ourselves To Unemployment
Students of Austrian business cycle theory are familiar with the term malinvestment. A malinvestment is any poor use of resources or capital, commonly made in response to bad policy (usually artificially low interest rates and/or unsustainable increases in the monetary supply). The dot-com bubble that popped in 2001? The housing bubble that similarly burst in 2008? Those were classic examples of malinvestment. With this article, I'd like to introduce a related term: malincentive. While not part of the official economic lexicon, I consider a ‘malincentive' a useful word to describe any promise of short-term gain whose long-term costs outweigh any immediate benefits enjoyed. The temptation to urinate in one's pants on a cold winter day to get warm is a (perhaps unnecessarily) graphic example of malincentive. Yes, a momentary relief from the cold can be achieved; but moments later, you'll have a much larger problem than you did at the outset. Malincetives and malinvestment go hand-in-hand. In my opinion, the former causes the latter. As humans, we respond remarkably well to incentives. And dumb incentives encourage us to make dumb investments. - After the leaks showed what it stands for, could this be the end for TTIP?
The documents show that US corporations will be granted unprecedented powers over any new public health or safety regulations to be introduced in future. If any European government does dare to bring in laws to raise social or environmental standards, TTIP will grant US investors the right to sue for loss of profits - German plot to keep EU army a SECRET till June 23 EXPOSED: EU plan to control OUR forces
BRITISH Brexit campaigners have been boosted with news from Berlin that Germany is once more pushing for an EU army encompassing all 28 member states with a joint HQ and shared military planning. Along with judicial, tax and immigration issues, a Euro army has for long been one of the main irritants of anti-EU campaigners. The fact that Germany – the powerhouse of the project – is mooting one so close to the referendum on whether Britain stays or goes is seen as madness by politicians fighting to keep the UK within the group. Now a white paper has been drawn up by Berlin. Media reports suggest that the Germans wanted to keep its proposals secret until after the June 23 plebiscite but it has now been leaked. - BRUSSELS SHOCK: EU plots tax on British…to fund benefits for jobless in ITALY
BARMY Brussels bureaucrats are plotting to tax British shoppers to help subsidise the growing benefits bill for the Eurozone's jobless. Leaders on the continent want to milk Britain's growing economy by slapping a VAT-style tax on goods and services to fund an EU-wide unemployment benefit fund. The plan would mean British shoppers shelling out millions more at the tills every year to pay for benefits and job creation schemes in Mediterranean countries including Spain and Italy, which have high unemployment rates. - A New Digital Cash System Was Just Unveiled At A Secret Meeting For Bankers In New York
Last month, a “secret meeting” that involved more than 100 executives from some of the biggest financial institutions in the United States was held in New York City. During this “secret meeting“, a company known as “Chain” unveiled a technology that transforms U.S. dollars into “pure digital assets”. Reportedly, there were representatives from Nasdaq, Citigroup, Visa, Fidelity, Fiserv and Pfizer in the room, and Chain also claims to be partnering with Capital One, State Street, and First Data. This “revolutionary” technology is intended to completely change the way that we use money, and it would represent a major step toward a cashless society. But if this new digital cash system is going to be so good for society, why was it unveiled during a secret meeting for Wall Street bankers? Is there something more going on here than we are being told? - The End Of America?: 13 Catastrophic Events Which Could Soon Lead To An American Apocalypse
Is the strongest and most powerful nation on the planet headed for an apocalypse which will bring it to its knees? We live in a world that is becoming increasingly unstable, and apocalyptic themes have become very common in books, movies, television shows and video games. It is almost as if there is an unconscious understanding on a societal level that something very big and very bad is coming, even if the vast majority of the population cannot specifically identify what that is going to be. Last week, the Global Challenges Foundation released a new report entitled “Global Catastrophic Risks 2016” in which they discussed various apocalyptic events that they believe could wipe out more than 10 percent of the population of our planet, and they warned that these types of events “are more likely than we intuitively think”… - This Is Where America's Runaway Inflation Is Hiding
The Census Bureau released its quarterly update on residential vacancies and homeownership for Q1 which is closely watched for its update of how many Americans own versus rent. It shows that following a modest pickup in the homeownership rate in the prior two quarters, US homeowners once again posted a substantial decline, sliding from 63.8% to 63.5%, and just 0.1% higher than the 50 year low reported in Q2 2015. - Very Big Correction for All Markets Coming-Alasdair Macleod
Financial expert Alasdair Macleod says the most important economic news concerns the U.S. dollar. Macleod explains, “I think the most important point is actually the dollar has turned. The panic move into the dollar by miners and producers of raw material . . . was driving the dollar up. That has now ceased. China has now started buying those raw materials, base metals, oil and so on and so forth. So, the result is the commodity crisis is over. That, actually, is the biggest driver of the dollar, which is pushing it down.” - Egon von Greyerz Warns The World Is Now On The Edge Of Total Chaos And Disaster
On the heels of wild start to the 2016 trading year, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, just warned that the world is now on the edge of total chaos and disaster. He also discussed the historic opportunity in the gold and silver markets. Egon von Greyerz: “We know that central banks and governments have lost the plot. When the crisis started in 2006, US short rates were 5%. In 2008 they were down to zero and have virtually stayed there ever since. A crisis package of $25 trillion was thrown at the financial system. This is what the likes of JP Morgan and Goldman told the Fed they had to do to save the bank(-ers). Ten years later the world financial system is in a mess that is exponentially increasing. World debt has exploded, most governments are running deficits and the financial system is balancing dangerously on the edge of a precipice. $8 trillion of government debt is now negative and $16 trillion is below 1%… - 50-Year Market Veteran Discusses What’s Next After One Gold & Silver Index Soars 135% In Just Over 3 Months!
With the U.S. dollar trading lower once again and the metals consolidating recent gains, today a 50-year market veteran discussed what’s next after one gold and silver index soars 135% in just over 3 months! Eric King: “You have to be very careful not to simply use the COT Report (on gold and silver) because it can be a fairly good timing tool on the way down, at bottoms — and it’s not perfect at that, but on the way up it’s very difficult. And I know we’ve had a lot of people calling tops, and these (calls) were at much lower prices. And the problem with calling those tops is that the commercial COT Report, it’s not going to give you those answers that easy. I remember one time when I was speaking to Ted Butler and the commercials were 100 percent short (on a historic basis) at that time on silver and the price was $6. What happened was the price of silver proceeded to surge 40 percent higher to $8.40, before then collapsing back down so the commercials could try to get healthy on those positions… - ALERT: SentimenTrader Just Issued An Extremely Important Update On Gold & Silver
After last week’s surge in the metals sent the prices of gold and silver to new recent highs, SentimenTrader just issued an extremely important update on the gold and silver markets. From Jason Goepfert at SentimenTrader: “The thrust in gold and gold stocks over the past three months has met the conditions of the studies and indicators that we discussed last fall, particularly last November. By mid-March, several indicators were suggesting shorter-term extreme optimism and the metals backed off a bit. Since then they have surged again, particularly the mining stocks. A concern remains “smart money” hedger positions which are at or near multi-year extreme bets against the metals. - FTSE 100: is this the perfect storm?
The definition of a ‘perfect storm’ is where a rare combination of factors come together to drastically aggravate a situation. Looking ahead, it could be argued that the FTSE 100 faces a perfect storm during the rest of the year and that its downside risks are far greater than its potential upside. The most obvious risk facing the FTSE 100 is Brexit. This may not seem all that likely if most of the polls are to be believed, but there have been numerous occasions in the past where pollsters have made major errors with their predictions (such as in last year’s General Election). And with a number of voters being either undecided or seemingly carefree about the issue, there’s a real prospect of Britain leaving the EU as a result of 23 June’s vote. - Britain is horribly unprepared for the coming recession
It's the worst of all worlds: Britain looks like it is slipping complacently into a new recession but the country is hopelessly unprepared to deal with it. The macro data is ugly: Construction growth is the weakest in three years. Manufacturing went into contraction for the first time in three years. Consumers have switched their spending from retail goods to food — a sign they don't feel confident about the finances. - ALERT: Paul Craig Roberts Just Warned The World Financial System Is On Fire And The Price Of Gold May Skyrocket
Today former U.S. Treasury Secretary, Dr. Paul Craig Roberts, warned King World News that the world financial system is on fire and the price of gold may skyrocket. Dr. Paul Craig Roberts: “The West no longer exists. There’s no longer any democracy in the West, certainly not in the United States. The people have chosen Trump, so what are the politicians doing? They simply won’t accept the choice. We see the same thing all over Europe. The British military announced that if the Labour Party Leader Jeremy Corbyn were to win the election, they (the British military) would simply not let him take office… - Putin fires several high-ranking officials in bid to overhaul Russia's law enforcement structures
Russia’s President Vladimir Putin fired several high-ranking law enforcement officials on Saturday in one of the biggest overhauls of the country’s power structures in recent years. According to a decree published on the president’s official legal portal, Putin fired the Southern transport public prosecutor Seregei Dmitriev, the head of the Federal Penitentiary Service in Moscow Igor Klimenov, and Deputy Interior Minister of the annexed Crimea region Dmitry Neklyudov. Putin also dismissed, among others, two deputies of Russia’s Investigative Committee, Yuri Nyrkov and Vasily Piskarev. He raised the rank of the Committee’s investigator for special cases case, Lev Gura, to a senior investigator. - Russia challenges US after Baltic jet face-off
Russia says it was right to confront a US Air Force reconnaissance plane over the Baltic Sea on Friday. The Pentagon said a Russian jet fighter acted in an “unsafe and unprofessional manner”, and performed a barrel roll over its plane. Russia said that the American jet had turned off its transponder signal, which helps others identify it. It is the second incident in the Baltic this month in which the US has accused Russian planes of flying aggressively. - Trump Picks Former Goldman Partner And Soros Employee As Finance Chairman
In an oddly ironic twist, today Donald Trump announced that he has picked as chairman of his newly launched fundraising operation none other than a former employee of the bank he has repeatedly criticized in the past, and which he used as a foil to criticize Ted Cruz: Goldman Sachs. Trump announced that heading up his own personal fundraising operation as national finance chairman will be Steven Mnuchin, a long-time business associate, chairman and CEO of the hedge fund Dune Capital. More importantly, however, he spent 17 years at Goldman Sachs where he was most recently a Partner, having built a fortung of $46 million before launching his own hedge fund. - Russian nuclear sub fires CRUISE MISSILE in chilling footage of Arctic military drill
The 120-metre Severodvinsk submarine can be seen sinking slowly below the surface before its Kalibr missile erupts from the waves. Is this a warning shot? This chilling footage shows a Russian nuclear submarine launching a cruise missile from underwater to destroy a coastal training target. The 120-metre Severodvinsk submarine can be seen sinking slowly below the surface of the Barents Sea as part of Russian navy Arctic combat drills. Then the Kalibr missile erupts from the waves in a plume of smoke and streaks away into the distance. A loud rumbling can be heard before the camera zooms in to show the launch site. It is the latest show of strength from the country's military after a number of close passes by fighter jets near US planes and ships. - Warnings mount on world's corporate debt, China crisis
Corporate debt has reached extreme levels across much of the world and now far exceeds the pre-Lehman financial bubble by a host of measures, the global banking watchdog has warned in a deeply-disturbing report. “As the credit cycle ages, following years of record-setting bond issuance, there are growing concerns about signs of stress in corporate balance sheets,” said the Institute of International Finance in Washington. The body flagged a double threat: a five-fold rise in company debt to $25 trillion in emerging markets over the past decade; and record junk bond issuance in US and Europe, along with shockingly-irresponsible levels of US borrowing to buy back shares and pay dividends. - China's shadow banking adapts and grows as rules tighten
New players in China's shadow banking sector are growing rapidly despite attempts to clamp down on opaque lending, taking advantage of a regulatory anomaly to prosper but also raising the risks of a build-up of debt in the slowing economy. Authorities have sought to rein in the riskiest elements of less-regulated lending after a series of defaults, including a 4 billion yuan ($640 million) credit product backed by Evergrowing Bank in September, because of the danger such debts could pose to the health of the world's second-largest economy. And a government measure created in 2011 to capture shadow banking, total social financing (TSF), shows some success, with shadow banking contracting in the second half of 2014 to roughly 21.9 trillion yuan ($3.5 trillion), according to a Reuters' analysis of central bank data. - High leverage shifts to China's bond market after equities deflate
Just when investor fears over plunging Chinese stocks appear to be calming down, the country's frothy corporate bond market is stirring concerns it could be the next domino to fall. Investment funds have flowed rapidly into corporate bonds since the stock market collapsed in June, triggering a surge of debt issuance. Demand has compressed corporate and sovereign bond spreads to their narrowest in four years – an oddity, when industrial profits are falling and credit risks are rising. While bond investors say corporate bond prices are not at unreasonable levels, they are wary a sharp correction could be sparked by a bond default from major state-owned companies or a change in monetary policy. - High leverage shifts to China's bond market after equities deflate
Just when investor fears over plunging Chinese stocks appear to be calming down, the country's frothy corporate bond market is stirring concerns it could be the next domino to fall. Investment funds have flowed rapidly into corporate bonds since the stock market collapsed in June, triggering a surge of debt issuance. Demand has compressed corporate and sovereign bond spreads to their narrowest in four years – an oddity, when industrial profits are falling and credit risks are rising. While bond investors say corporate bond prices are not at unreasonable levels, they are wary a sharp correction could be sparked by a bond default from major state-owned companies or a change in monetary policy. - Chinese police to patrol in Italy in pioneering experiment
Four Chinese police officers will patrol alongside Italian police in Rome and Milan, as a two-week experiment. The officers, who speak Italian, are being sent in a bid to make Chinese tourists feel safe during the peak tourism period, said Italian Interior Minister Angelino Alfano. “If the experiment is successful, we will expand it to other cities in Italy,” he said. Around three million Chinese tourists visit Italy annually. Mr Alfano said that Italian officers would also soon be heading to Beijing and Shanghai to patrol alongside Chinese officers. - HSBC profit falls amid volatile markets
Banking giant HSBC has reported a 14% drop in profits for the first quarter following “extreme levels of volatility” in financial markets at the start of the year. Profit before tax came in at $6.1bn (£4.17bn) for the three months to March, down from $7.1bn a year ago. However, analysts had expected a far steeper fall in profits. HSBC chief executive Stuart Gulliver said the bank had been “resilient in tough market conditions”. Adjusted pre-tax profits, including currency effects and one-off items, fell 18% to $5.4bn (£3.7bn). - European banks near ‘terrifying' crisis: Raoul Pal
With European banks sitting at multiyear lows, one widely followed market watcher said some of the biggest ones could go bankrupt. Former hedge fund manager and Goldman Sachs alumnus Raoul Pal said his scenario is one most investors aren't looking at right now. Pal said the banking issues have the potential to overtake risks associated with China's growth slowdown and cheap oil. “So many of these [bank stocks] are falling so sharply. I think people haven't even caught up with what is going on, and that really concerns me,” the founder of Global Macro Investor told CNBC's “Fast Money” on Tuesday. “I look at the big long-term share charts of them, and I think this looks very terrifying indeed. I have not seen anything like this for a long time.” - China halts release of output data for key commodities
China has suspended the release of output data for several key commodities amid a crackdown on the illegal sale of state statistics by government officials, raising further concerns about transparency in the world's second-largest economy. With Chinese economic growth at a 25-year low, the lack of such data makes it increasingly difficult for economists to gauge the strength of local demand as Beijing tries to avert a faster slowdown. Key monthly output numbers for several oil and metal products over the first quarter have still not been published. - Repair businesses provide antidote to throwaway culture
The hall of a primary school in Brooklyn is unusually busy for a Saturday morning. This is a “pop-up repair” event, and it is drawing in the crowds. Parents and children from around the neighbourhood have brought in their broken things to be fixed by menders, each with their own area of expertise. At different tables, repairers fix jewellery, electronics and furniture among many other things. This is also an opportunity to teach kids repair skills, and a group of boys is hammering away in the corner. In the midst of this hive of noisy tinkering stands Sandra Goldmark. - Russians to get ‘free' land in bid to boost Far East
A law offering Russian citizens land in the country's sparsely populated Far East has come into force – but few think there'll be a rush to take advantage. Every Russian can soon apply to hold a one-hectare (2.5-acre) patch of state or municipal land – about the size of a rugby field – for five years, the News.ru website reports. After that time, people can either rent or buy their plot, or may be given it free of charge. There's one condition: they must prove to the local authorities that the land has been used productively. The area up for grabs is vast, stretching from Chukotka – Russia's most north-eastern point, near Alaska – down to the Chinese border, and as far west as the Sakha Republic (Yakutia) in Siberia. The region's population has been shrinking steadily since the end of the Soviet Union as residents leave for less remote and more prosperous parts. - How to survive a zombie apocalypse: Find a mountain range, keep quiet, mimic the way the undead walk and NEVER fight
From a remote farmhouse to a shopping mall and even a bar, films are full of suggestions of where to hide out in the event of a zombie apocalypse. But researchers have developed an apocalyptic simulator that suggests the best thing to do is literally run for the hills – if you live in the US at least. Other advice from scientists-turned zombie experts, includes keeping silent and even mimicking zombie behaviour should you run into one of the fictional reanimated corpses with a taste for human flesh. - Johns Hopkins Psychiatrist: Transgender is ‘Mental Disorder;' Sex Change ‘Biologically Impossible’
Dr. Paul R. McHugh, the former psychiatrist-in-chief for Johns Hopkins Hospital and its current Distinguished Service Professor of Psychiatry, said that transgenderism is a “mental disorder” that merits treatment, that sex change is “biologically impossible,” and that people who promote sexual reassignment surgery are collaborating with and promoting a mental disorder. - The IMF Just Confirmed The Nightmare Scenario For Central Banks Is Now In Play
The most important piece of news announced today was also, as usually happens, the most underreported: it had nothing to do with US jobs, with the Fed's hiking intentions, with China, or even the ongoing “1998-style” carnage in emerging markets. Instead, it was the admission by ECB governing council member Ewald Nowotny that what we said about the ECB hitting a supply brick wall, was right. Specifically, earlier today Bloomberg quoted the Austrian central banker that the ECB asset-backed securities purchasing program “hasn’t been as successful as we’d hoped.” Why? “It’s simply because they are running out. There are simply too few of these structured products out there.” - Hong Kong Puts J.P. Morgan Chase on Its ‘Name and Shame' IPO List
JPMorgan Chase has become the first global investment bank to fall foul of Hong Kong’s stricter IPO sponsorship rules, dealing a blow to its reputation in the region. The Hong Kong stock exchange introduced tougher disclosure rules in 2014, which can make banks criminally liable if a listing prospectus is found to have misled investors. It returned a listing application for Shenhua Health Holdings, a subsidiary of monosodium glutamate (MSG) producer Fufeng Group, on March 29 saying it needed more information, exchange data showed. JPMorgan Securities acted as sole sponsor of the IPO. - Zimbabwe to print own version of US dollar
Zimbabwe is set to print its own version of the US dollar in order to ease a cash shortage in the country. Central bank governor John Mangudya said the cash, known as bond notes, will be backed by $200m (£140m) support from the Africa Export-Import Bank. The specially-designed two, five, 10 and 20 dollar notes will have the same value as their US dollar equivalents. Zimbabwe introduced the US dollar after ditching its own currency in 2009 following sustained hyperinflation. Since then Zimbabweans have been using the dollar as well as a number of other foreign currencies including the South African rand and the Chinese yuan. - Migrant crisis: EU plans penalties for refusing asylum seekers
The European Commission has proposed reforms to EU asylum rules that would see stiff financial penalties imposed on countries refusing to take their share of asylum seekers. The bloc's executive body is planning a sanction of €250,000 (£200,000; $290,000) per person. The Commission wants changes made to an asylum system which has buckled amid an influx of migrants. The plans would require support from most member states as well as MEPs. EU officials hope that, twinned with a deal with Turkey that has already reduced migrant numbers, tensions over migration within the bloc can be reduced. - Freight Rail Traffic Plunges: Haunting Pictures of Transportation Recession
Total US rail traffic in April plunged 11.8% from a year ago, the Association of American Railroads reported today. Carloads of bulk commodities such as coal, oil, grains, and chemicals plummeted 16.1% to 944,339 units. The coal industry is in a horrible condition and cannot compete with US natural gas at current prices. Coal-fired power plants are being retired. Demand for steam coal is plunging. Major US coal miners – even the largest one – are now bankrupt. So in April, carloads of coal plummeted 40% from the already beaten-down levels a year ago. - ECB warns on US economic data leaks
US investors may have earned millions of dollars in profits from early access to leaked economic data the European Central Bank (ECB) has alleged. Researchers at the bank studied the movements of trades ahead of several market-moving US economic reports. They included a US consumer confidence index, home sales data and initial US GDP data among others. The study found “strong” evidence of pre-announcement price moves in at least seven cases. The ECB research paper, Price Drift Before US Macroeconomic News, studied investment trading patterns in the case of 21 market-moving economic indicators between 2008 and 2014. - The Historic Dow Jones-Silver Ratio Points To $300 Silver
That’s correct. Going by the historic Dow Jones-Silver ratio, it points to $300 silver. This may seem outlandish or a play on hype, but it isn’t. While many precious metals analysts have forecasted high three-digit silver prices, I didn’t pay much attention to them. However, after I looked over all the data, $300 silver is not a crazy figure at all. Let me explain. The U.S. economy suffered a fatal blow in the 1970’s as its domestic oil production peaked and inflation soared. To protect against the ravages of inflation, investors moved into gold and silver in a big way. Yes, it’s true that the Hunt’s bought a lot of silver during the 1970’s, but who was buying gold to push its price to $850 in 1980 versus $35 in 1970. Furthermore, who was buying oil to push its price up to $36 in 1980 from $1.80 in 1970?? - National Bank to set aside $250-million for bad loans to energy sector
National Bank of Canada said that it will set aside $250-million to cover bad loans associated with the oil and gas sector, lowering its profit for the second quarter as banks continue to struggle with a depressed energy sector despite a rebound in the price of oil. The announcement from National Bank on Thursday morning follows a similar one earlier this week from Canadian Western Bank, which said that its provisions for loan losses would quadruple to $40-million. National Bank said that its provisions were specifically tied to its portfolio of loans to oil and gas producers and services. - The cashless society is under construction
Two news stories this week are huge reminders that the cashless society already is under construction throughout the Western world. I have added the word Western, because there are rumblnigs from Middle-Eastern countries that Islamic scholars are now working on a new interpretation of Sharia Law to allow gold to be used in commerce. So, while the West is moving toward a digital fiat system, the East is headed in the opposite direction with the intent of placing precious metals at the center of all monetary transactions. What a tragedy for the West. - Ron Paul: What America Has Today Is Not Free Market Capitalism
Capitalism appears to be falling out of favor. Socialism is in vogue. Or at least that’s the impression one gets when talking to millennials in America. A recent Harvard University poll shows that more than half of Americans in the 18-29 age bracket oppose capitalism. Ron Paul appeared on RT America’s Boom or Bust show earlier this week to address this issue and pointed out the problem isn’t a failure of capitalism per se. The problem is that so few people actually understand what capitalism is. In fact, Paul argues that America’s economic system isn’t really free market capitalism - What Will Happen When Central Planners Finally Lose Control?
Today KWN is pleased to share a dramatic chart that begs the question: What will happen when central planners finally lose control? From Jason Goepfert at SentimenTrader: “Each year, a number of prominent hedge fund managers gather for the Sohn Investment Conference and outline their rationales for long or short investments in stocks or macro views on other markets. One of the managers with a nearly unmatched record over several decades is also among the most negative on stocks. Stan Druckenmiller gave several reasons to be bearish, most of which were unchanged from his outlook last year. One difference was volatility. As he noted, “volatility in global equity markets over the past year, which often precedes a major trend change, suggests that their risk/reward is negative without substantially lower prices…”. It certainly seems like we’ve seen a lot of volatility. At the end of April, the S&P 500 was basically unchanged over the past 12 months (it was within 20 points of where it closed in April 2015). Even though it was essentially unchanged, during the year the S&P moved as much as 18% from high to low. That seems like a lot of movement for not much gain, but in the grand scheme of things, that 18% range is among the tightest in history.” - The Next Employment Crisis Is Here: Job Cuts At U.S. Companies Jump 35 Percent In April
Should we be alarmed that the number of job cuts announced by large U.S. companies was 35 percent higher in April than it was in March? This is definitely a case where the trend is not our friend. According to Challenger, Gray & Christmas, U.S. firms announced 65,141 job cuts during April, which represented a massive 35 percent increase over the previous month. And so far this year overall, job cut announcements are running 24 percent higher than for the exact same period in 2015. Meanwhile, on Thursday we learned that initial claims for unemployment benefits shot up dramatically last week. In fact, the jump of 17,000 was the largest increase that we have seen in over a year. Of course the U.S. economy has been slowing down for quite a while now, and many have been wondering when we would begin to see that slowdown reflected in the employment numbers. Well, that day has now arrived. - Two Billionaires Just Issued Dire Warnings About The Coming Carnage In Global Markets
As fear around the globe increases and more investors begin to worry about the insane policies of central banks, two billionaires just issued dire warnings. Gerald Celente: “Stanley Druckenmiller was speaking this week at a major investment conference in New York. They wanted him to be specific about recommendations and he said, ‘The conference wants a specific recommendation from me? Get out of the stock market isn’t clear enough? It’s also important to note that Druckenmiller said that ‘Gold remains our largest currency allocation.’ Druckenmiller then went on to warn that the corporations have relied on cheap money from the Federal Reserve by engineering over $2 trillion in acquisitions and stock buybacks in the last year. He said this is finally showing up on the books of companies, ‘as operating growth in U.S. companies has gone negative year-over-year, while net debt has gone up.’ - Rail Traffic Depression: 292 Union Pacific Engines Are Sitting In The Arizona Desert Doing Nothing
We continue to get more evidence that the U.S. economy has entered a major downturn. Just last week, I wrote about how U.S. GDP growth numbers have been declining for three quarters in a row, and previously I wrote about how corporate defaults have surged to their highest level since the last financial crisis. Well, now we are getting some very depressing numbers from the rail industry. As you will see below, U.S. rail traffic was down more than 11 percent from a year ago in April. That is an absolutely catastrophic number, and the U.S. rail industry is feeling an enormous amount of pain right now. This also tells us that “the real economy” is really slowing down, because less stuff is being shipped by rail all over the nation. - US Commercial Bankruptcies Skyrocket
One of the big indicators of the end of the “credit cycle” is the number of bankruptcies. During good times, so earlier in the credit cycle, companies borrow money. Then, overconfident and lured by low interest rates and overoptimistic rosy-scenario rhetoric emanating from all sides, they do what the Fed and Wall-Street firms want them to do: they borrow even more money. Then reality sets in, and they buckle under this pile of debt. The bankruptcy filings of Ultra Petroleum and Midstates Petroleum on Friday and Saturday brought oil & gas bankruptcies of companies rated by Fitch and other ratings agencies to 59. These two companies piled $3.1 billion in defaulted junk bonds and another $1.5 billion in defaulted loans on top of the growing mountain of defaulted oil & gas debt. - Silent Coup Beginning to Overtake America Now-Larry Nichols
Former Clinton insider Larry Nichols has worked with, and now against, the Clintons. Nichols has some of the top political and financial connections on the planet. Nichols hopes the public is finally realizing the enormous power struggle going on. Nichols explains, “There is no two-party system in the United States of America. Let’s get that straight. There is no two-party system, there is one. Part of it is a red team and part of it is a blue team. You think you have a choice, but as you know you only have a choice between the two they give you to vote for, but here comes Trump. Trump doesn’t need their money . . . he will bust up the system, and he will not only bust up the system for the Republican Party, but he will bust up the system (for both parties). So, there are many establishment Republicans that have said they would rather vote for Hillary than Trump. . . . They must maintain status quo of the system for these power elite people to stay where they want to be.” - “Market is on Edge”: US Commercial Real Estate Bubble Pops, San Francisco Braces for Brutal Dive
Commercial real estate has experienced a dizzying price boom since the Financial Crisis. It goes in cycles. Rising rents and soaring property prices along with cheap credit drive up construction, which takes years from planning to completion, and suddenly all this capacity is coming on the market just as demand begins to sag…. That’s when the cycle turns south. On a nationwide basis, the boom has been majestic. But now, after posting “nearly double-digit gains for each of the past few years,” according to Green Street’s just released Commercial Property Price Index (CPPI) report, “property appreciation has come to a halt.” - ‘We’re running a f—ing casino’: Politician tells all in manifesto
An anonymous congressman has dropped a bombshell election-year book that confirms why Americans hate their national government and have rallied to anti-establishment presidential candidates like Donald Trump. The veteran politician lays bare a rotten and corrupt Congress enslaved by lobbyists and interested only in re-election in an anonymous, 65-page manifesto called “The Confessions of Congressman X.” “Like most of my colleagues, I promise my constituents a lot of stuff I can never deliver,” he admits. “But what the hell? It makes them happy hearing it . . . My main job is to keep my job.” - “Markets Have No Purpose Any More” Mark Spitznagel Warns “Biggest Collapse In History” Is Inevitable
After making over $1 billion in one day last August, and warning that “the markets are overvalued to the tune of 50%,” Mark Spitznagel knows a thing or two about managing tail risk. The outspoken practitioner of Austrian economic philosophy tells The FT, “Markets don't have a purpose any more – they just reflect whatever central planners want them to,” confirming his fund-management partner, Nassim Taleb's perspective that “being protected from fragility in the financial system is a necessity rather than an option.” - World's Most Bearish Hedge Fund Manager: “I Think Something Has Changed”
One month ago, when we updated on the performance of Horseman Global, what until recently was the world's most bearish hedge fund with a record net short exposure of -98% at least until Icahn Enterprises emerged with its even more gargantuan -149% net short we cited fund CIO Russell Clark who observed the fund's dramatic -9.6% drop in the month of March, and made it clear that he wasn't going anywhere because he was confident that the move was nothing but a short squeeze, which – if anything – made Clark even more bearish. - What Will The Global Economy Look Like After The “Great Reset”?
A very common phrase used over the past couple years by the International Monetary Fund’s Christine Lagarde as well as other globalist mouthpieces is the “global reset.” Very rarely do these elites ever actually mention any details as to what this “reset” means. But if you take a look at some of my past analysis on the economic endgame, you will find that they do, on occasion, let information slip which gives us a general picture of where they prefer the world be within the next few years or even the next decade. - Obama: TTIP Necessary So As To Protect Megabanks From Prosecution
On May 7th, Deutsche Wirtschafts Nachrichten, or German Economic News, headlined, “USA planen mit TTIP Frontal-Angriff auf Gerichte in Europa” or “U.S. Plans Frontal Attack on Europe’s Courts via TTIP,” and reported that, “America’s urgency to sign TTIP with Europe has solid reason: Megabanks must protect themselves from claims by European investors who allege that they were cheated during the debt crisis. … The U.S. Ambassador to Italy has now let the cat out of the bag on this — probably unintentionally.” - Kerry slams Trump's wall, tells grads to prepare for ‘borderless world'
Secretary of State John Kerry took a shot at Donald Trump during his Friday commencement speech to Northeastern University graduates, by saying no wall is big enough to keep dangerous terrorists out of the United States. “Many of you were in elementary school when you learned the toughest lesson of all on 9/11,” he said in his speech at Boston Garden. “There are no walls big enough to stop people from anywhere, tens of thousands of miles away, who are determined to take their own lives while they target others.” - Lifespan gap ‘widening between rich and poor'
The gap between the lifespans of rich and poor people in England and Wales is rising for the first time since the 1870s, researchers have suggested. Everyone is living longer but rich people's lives are extending faster, the City University London study says. Better life expectancy narrowed the gap in the early 20th Century but this trend reversed for men in the 1990s. Author Prof Les Mayhew from Cass Business School said the difference was mainly due to “lifestyle choices”. - News Corp reports $149m quarterly loss
Media giant News Corp has reported a net loss of $149m (£102.6m) for the three months to March. That compares with a profit of $23m in the same quarter last year. The group suffered as a result of a one off legal charge of $280m at its News America Marketing business. Revenue also fell – by 7.3% to $1.89bn. News Corp, controlled by Rupert Murdoch, gets over half its revenue from outside the US and it blamed “currency headwinds” for the drop. - Greece hit by general strike over pension and tax change
Greeks have begun a three-day general strike in protest at further austerity measures that are being proposed in return for more bailout money. Shipping, public transport and civil service departments were among sectors hit in a bid to stop the introduction of tax and pension changes. The sudden 48-hour strike on Friday and Saturday was called in addition to action previously planned for Sunday. Greece's left-led government is due to a vote on the tax changes on Sunday. The next tranche of about €5bn (£4bn) is overdue, after talks with Greece's international lenders faltered over the pace of reforms. - IMF tells euro zone finance ministers to start talks on Greek debt relief – FT
The head of the International Monetary Fund urged euro zone finance ministers to start talks on Greece's debt relief together with discussions on Athens' reform programme, according to a letter published by the Financial Times on Friday. The finance ministers of the euro zone's 19 countries will gather on May 9 in Brussels for an extraordinary meeting on Greece. They are meant to discuss Greece's reform programme and a new set of contingency measures that Athens should adopt to ensure it will achieve agreed fiscal targets in 2018. Successful reforms implementation in Athens would unlock bailout funds under a financial programme agreed by Greece and euro zone countries in July and would pave the way for talks on Greece's debt relief. - Russia's car workers who struggle on no pay
In a sparsely furnished, single-room flat in Togliatti, Natalia Sizova counts the hours until she sees her five-year-old son again. Six months ago she had so little food she decided he should go and live in a care centre across town. Natalia is one of 2,000 people in this city, 1,000km (620 miles) east of Moscow, who work for car-parts maker AvtoVAZagregat. Their salaries have not been paid for months. Togliatti is not alone. Hundreds of Russian companies, big and small, are withholding salaries. The explanations may differ: mismanagement, bad economy or plain criminality. But for workers the end result is the same. - Eurogroup meeting, 09/05/2016
The Eurogroup discussed the state of play of the first review of Greece's macroeconomic adjustment programme. It welcomed a package of policy reforms, which will cover: the pension system, income tax and VAT, public sector wage bill measures, privatisation strategy, the issue of non-performing loans. The Eurogroup concluded that further work was needed by the Greek authorities and the institutions on a mechanism concerning additional contingency measures. These measures will come into force only if additional effort is needed to reach the agreed primary surplus targets. The conclusion of the first review will pave the way for the disbursement of further financial assistance for Greece, following the implementation of prior actions by Greece and the relevant national procedures in the other euro area member states. - Iain Duncan Smith: EU favours ‘haves over the have-nots'
The European Union is a “force for social injustice” which backs “the haves rather than the have-nots”, Iain Duncan Smith has said. The ex-work and pensions secretary said “uncontrolled migration” drove down wages and increased the cost of living. He appealed to people “who may have done OK from the EU” to “think about the people that haven't”. But Labour's Alan Johnson said the EU protected workers and stopped them from being “exploited”. The former Labour home secretary accused the Leave campaign of dismissing such protections as “red tape”. - America's infrastructure US$1.44 trillion short through 2025: report
America will fall US$1.44 trillion short of what it needs to spend on infrastructure through the next decade, a gap that could strip 2.5 million jobs and US$4 trillion of gross domestic product from the economy, a report from a society of professional engineers said on Tuesday. The American Society of Civil Engineers (ASCE) estimated that through 2025, the United States has funded only about 56 percent of its needed infrastructure spending. The nation needs to spend US$3.32 trillion to keep its ports, highways, bridges, trains, water and electric facilities up to date but has funded only US$1.88 trillion of that, ASCE said. The shortfall rises to US$5.18 trillion through 2040 without new funding commitments. U.S. GDP was US$18 trillion in 2015, according to the International Monetary Fund. - Left in the dark as Venezuela's crisis deepens
I have seen worse conditions in a hospital. I have seen patients even more deprived of the medicines they need. But rarely have I seen an institution that appears to have gone into such steep decline as University Hospital, Caracas. A long queue stretches from the hospital entrance as people wait in line for the lift. That's lift in the singular, because only one has been operating for the past few months. It is unclear whether the others are broken or are simply not being used because there is insufficient electrical power. Once you reach the wards, you find there is not enough electricity even for lighting, and some of the corridors are in darkness. Perhaps it is a good thing that the toilets and shower rooms are dark, as it provides a modicum of privacy. Cubicle doors are broken, hanging off hinges. I saw patients on a cardiac ward forced to wash in a half-wrecked stall, with a small piece of plastic drawn across. - UK trade deficit biggest since 2008 in first quarter
The UK's trade deficit for the first quarter is at its biggest since 2008. The gap between imports and exports for the first three months of 2016 stands at £13.3bn, up from £12.2bn in the fourth quarter of 2015, says the Office for National Statistics (ONS). Analysts said this was more evidence of the weight of global economic weakness on the UK. One described the figures as “truly horrible” UK economic growth has already slowed to 0.4% in the first quarter. The ONS said the UK trade gap widened over the quarter because of a £1.9bn rise in imports such as mechanical machinery, cars, clothing, jewellery and footwear. - Banker given record sentence for insider dealing
A former senior investment banker and an accountant have been jailed for their part in the UK's “largest and most complex insider dealing investigation”. Former Deutsche Bank managing director Martyn Dodgson was sentenced to four and a half years in prison, the longest term for the crime in the UK. Businessman Andrew Hind received three and a half years. They were convicted on Monday of conspiring to “insider deal”. The sentences at Southwark Crown Court bring to a close the Financial Conduct Authority's (FCA) “Operation Tabernula” investigation which began in 2007. The FCA described it as its largest and most complex insider dealing investigation. It said the offending was “highly sophisticated” and that the investigation was “demanding and time-consuming”. - The Coming War of Central Banks
History has shifted, and we're leaving the era of central bank convergence and entering the era of central bank divergence, i.e. open conflict. In the good old days circa 2009-2014, central banks acted in concert to flood the global banking system with easy low-cost credit and push the U.S. dollar down, effectively boosting China (whose currency the RMB/yuan is pegged to the USD), commodities, emerging markets and global risk appetite. - SWIFT says commercial bank hit by malware attack like $81M Bangladesh hack
SWIFT, the global financial messaging network that banks use to move billions of dollars every day, warned on Thursday of a second malware attack similar to the one that led to February's $81 million cyberheist at the Bangladesh central bank. The second case targeted a commercial bank, SWIFT spokeswoman Natasha de Teran said, without naming it. - Equity outflows hit nearly $90bn in 2016
Outflows from equities have hit nearly $ 90bn this year, after investors pulled $ 7.4bn from global funds in the fifth consecutive week of redemptions as they retreated into haven assets. The withdrawals have put equities “firmly” on track for their biggest year of redemptions since 2011, according to data provider EPFR. Fears over growth in Japan and the eurozone, as well as concerns over US corporate profits, are being blamed. - UK Banks close more than 600 branches over the past year
More than 600 bank branches have closed across Britain over the past year, with rural areas worst affected, according to figures obtained by the BBC. Parts of Wales, Scotland and south west England lost the most per population between April 2015 and April 2016. Five of the top 10 areas losing banks are in Wales: Powys, Denbighshire, Gwynedd, Conwy, and Carmarthenshire. The banks said that demand for branches was falling, as more people switch to banking online. - Third quarter investor flight wiped record $10 trillion off global stocks: BAML
Investors pulled a combined $75 billion from U.S. and emerging market equity funds in the third quarter, wiping a record $10 trillion off the value of global equities in the period, according to EPFR Global and Bank of America Merrill Lynch. In data released late on Thursday, Boston-based fund tracker EPFR Global said European and Japanese funds were the only equity classes to receive net inflows between July and September, most likely motivated by the possibility of more central bank money-printing. Funds pulled $35.2 billion from dedicated U.S. equity funds over the quarter, according to EPFR, bringing year-to-date outflows to $138 billion. - Bank of Canada sees lower neutral interest rate
While the global economy faces a number of risks, including the potential for a shock from China, the most likely scenario is that growth continues, with some headwinds starting to slowly fade, a senior Bank of Canada official said on Wednesday. Nonetheless, the world economy’s potential growth will be lower than it was 10 years ago, partly due to demographic shifts that policy cannot fully address in the short term, Senior Deputy Governor Carolyn Wilkins said. “There are a lot of downside risks, but I would say though that the most likely thing is that the economy is going to keep growing,” Wilkins told a panel. “There’s not the typical inflation pressures you see that would result in very abrupt increases in interest rates and that’s often what triggers downturns.” - Venezuela crisis: Maduro threatens seizure of closed factories
Venezuelan President Nicolas Maduro has threatened the seizure of factories that have stopped production, and the jailing of their owners. In a speech to supporters in the capital Caracas, he said the country had to recover the means of production, to counter its deep economic crisis. On Friday, he introduced a new, nationwide state of emergency. Opposition protesters have been rallying in Caracas to push for a recall vote to eject him from power. Mr Maduro said the state of emergency was needed to combat foreign aggression, which he blamed for Venezuela's problems. And he said military exercises would take place next weekend to counter “foreign threats”.
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