In 2007, more than a dozen of the world’s largest banks colluded to deliberately depress the rate at which they paid out on investments. This rate is known as the London Interbank Offered Rate (LIBOR), which is the average of interest rates estimated by each of the leading banks in London that it would be charged were it to borrow from other banks.
Financial institutions, mortgage lenders, and credit card agencies around the world, set their own rates relative to it, and at least $350 trillion in derivatives and other financial products are tied to the LIBOR. These mega banks suppressed LIBOR, during the beginning of the collapse, to boost earnings and make their bottom lines appear healthier. Continue reading »
GMO giant Monsanto rejected an unsolicited $62 billion takeover bid by German pharmaceutical giant Bayer, saying the price was too low but adding that it remained “open to further talks.”
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“The worst fear I have is that Mrs. Hillary Clinton will become president. That is my worst fear. I would vote for anyone in the world before I would choose Hillary Clinton. She’s dishonest, she’s a liar and she has deceived people…”
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With the market still strongly disagreeing with the polls over how BREMAIN is a done deal…
TrueSinews’ Sean Corrigan explains why in his contrite “case for Brexit”…
‘Dear True Sinews, what are your thoughts on Brexit? Roger Bootle wrote a piece in the Telegraph yesterday suggesting that just because everyone is saying one thing, it doesn’t necessarily follow they are right Currently, I sit firmly on the fence getting splinters! Neither side is convincing me either way.’
So wrote a friend the other day. What follows is my answer to his question. Continue reading »
As reported yesterday, adding insult to injury to a bank that just hours earlier admitted that in addition to rigging everything else it has also been caught engaging in “stock fraud” at the same time as a new mortgage probe was launched against it, Deutsche Bank’s senior debt rating was downgraded by Moody’s to Baa2, just two notches above junk. For the bank with the tens of trillions in derivatives, being seen as an increasingly more distressed counterparty was not good news and explains why the CEO took the unexpected step of having to defend his firm following the downgrade.
As Bloomberg reports, DB’s CEO John Cryan said he was not happy with the Moody’s decision, his bank has never had more capital and could easily repay its debt many times over.:
“We are very disappointed,” Cryan said in an interview on the sidelines of the Institute of International Finance’s conference in Madrid. “We have enough capital to repay all of our debt four-times over.”
It is unclear if under debt he also included the bank’s gross notional derivative liabilities which are several tens of trillions worth. Continue reading »
The only “growth” we’re experiencing are the financial cancers of systemic risk and financialization’s soaring wealth/income inequality.
The Keynesian gods have failed, and as a result we’re in the eye of a global financial hurricane.
The Keynesian god of growth has failed.
The Keynesian god of borrowing from the future to fund today’s consumption has failed.
The Keynesian god of monetary stimulus / financialization has failed.
Every major central bank and state worships these Keynesian idols: Continue reading »
The last few weeks have seen ‘Project Fear’ taken to all new levels by the UK establishment as doom-mongering over a possible Brexit conjure images of post-apocalyptic movies. UK PM Cameron and Chanceller Osborne’s latest op-ed tirade warns of 800,000 jobs lost and an “immediate year-long recession” if the Brits exercise their democratic right to vote for sovereignty over tyranny. Judging from the polls, which show Brexit odds tumbling, the fear-mongery is working, however, the markets disagree as forward volatility measures near 2016 highs.…
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We have reported for years that Russia and China have been doing everything they can to displace the use (and influence) of the US dollar. Of course, as the US has been playing geopolitical games, China and Russia have been working on strengthening their relationship with one another. At the end of 2015, China had become Russia’s biggest oil customer, and as of April, Russian oil shipments to China hit a record high. Russia has also surpassed Saudi Arabia as the biggest crude exporter to China.
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“Everyday we read headlines on what the central banks are doing. But their policies don’t have any effect. They are just like treading water. All the central banks are doing is substituting one form of debt with another form of debt… I think it means the business of central banks is like pornography: It’s not the real thing.”
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Greece remains in an economic depression interrupted by a few quarters of anemic growth.
Hiking taxes in a depression is one of the stupidest things one can do, but Greece is set for another vote to do just that.
Prime ministeris once again prepared to kiss German Chancellor Angela Merkel’s behind, and his party will likely go along for the ride.
The wildcard IMF has yet to chime in on the economic stupidity of this hike.
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So much for the huge China credit impulse spreading around the world. After this morning’s extremely disappointing European data, US Manufacturing’s flash PMI for May printed a disappointing 50.5 – its lowest since 2009.Under the surface the state of American manufacturing is even more disastrous as Markit notes, output is falling for the first time since the height of the global financial crisis, with factories hit by slowing growth of order books and falling exports.
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Today we learned that not only was China going through with its unprecedented debt-for-equity swap, but it has already equitized over $220 billion in non-performing loans. Note: these are not traditional, Chapter 11 prepacks where the debt is converted into equity and the debt holder gets the keys to the company. In this case, it is the Chinese government itself which indirectly via state-owned banks, has become the de facto owner of countless companies.
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Blue yard signs bearing the words “Yes on 14-55: Our Water, Our Future” dotted lawns throughout Hood River County, Oregon, in the run-up to the primary election held on May 17. Just as many of these signs appeared to share a lawn with a Cruz or Trump yard sign as with a Clinton or Sanders sign.
The issue that brought conservatives and progressives together in this way was clear-cut: keeping Nestlé Waters North America from building a water bottling plant and extracting over 118 million gallons annually from a spring in a small, rural community 45 miles east of Portland.
“We needed to act. It was our moment.”
When Primary Day came, Oregon voters in Hood River County passed a first-of-its-kind ballot measure that bans the production and transportation of large-scale commercial bottled water within the county. The measure succeeded by an overwhelming majority of voters — 68.8 percent voted in favor — and effectively ended Nestlé’s attempts to operate within the community.
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“Checks were celebrated across the campus as almost like a bonus for being a college kid. [Students] would go directly to the bank to cash it. I bought electronics for my dorm room and drinks were on me for a month or two. In an abstract way, I knew I would have to pay it back. But you don’t have a timeline in your mind about what that was going to look like. I just knew it would happen later.”
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Greetings from the state of Aragua in Venezuela where we are concluding a small US delegation focused on grassroots solutions to the massive food crisis here.
I am reaching out to you to share my grave concerns about what is happening here in Venezuela, my home for over three decades where I worked for 21 years as a Maryknoll Catholic lay missioner, then as Latin America Coordinator for the School of the Americas Watch.
It is out of concern for the most vulnerable sectors in Venezuela, such as my neighbors, that I break my silence to write. As I watch their efforts to obtain food for their families become more desperate and more futile, and as I witness pounds dropping from their bodies, I think the time has come to do more than share from my own scarce cupboards and gardens as they share with me. Continue reading »
“I’ve been coming to Singapore once a year for the last 15 years, and flying in I have never seen the waters so full of idle tankers,”
– Senior European oil trader a day after arriving in the city-state.
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United States — Bayer has now confirmed a buyout bid for agrichemical giant, Monsanto — the maker of Agent Orange, RoundUp, and genetically-modified crops — otherwise known as one of the most hated companies on the planet.
In a statement, Monsanto said Morgan Stanley & Co. is advising the company financially in the “potential acquisition,” but didn’t comment beyond basic information about what the deal might entail. The merger would combine Bayer and Monsanto into the largest agricultural supplier in the world. Continue reading »
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. Continue reading »
H/t reader squodgy:
“Now in view of the BDI, Caterpillar, Truck orders and so on, this was inevitable, and about two years overdue.
I still don’t understand why these geniuses didn’t see the writing on the wall when it was obvious five years ago that economic growth was unsustainable.
Global overcapacity, plunging demand, and a price war
In the first quarter, South Korean shipbuilders saw their orders collapse by 94.1% to 170,000 compensated gross tons (CGT), compared to the prior year. In terms of dollars, orders collapsed 94% from $6.5 billion in Q1 2015 in to just $390 million.
Love it or hate it, cash is playing an increasingly less important role in society.
In some ways this is great news for consumers. The rise of mobile and electronic payments means faster, convenient, and more efficient purchases in most instances. New technologies are being built and improved to facilitate these transactions, and improving security is also a priority for many payment providers.
However, as Visual Capitalist’s Jeff Desjardins explains,there is also a darker side in the shift to a cashless society. Governments and central banks have a different rationale behind the elimination of cash transactions, and as a result, the so-called “war on cash” is on.
Courtesy of: Visual Capitalist
ON THE PATH TO A CASHLESS SOCIETY
This could not have come at a more perfect time, with the Fed once again flip-flopping about raising rates. After appearing to wipe rate hikes off the table earlier this year, the Fed put them back on the table, perhaps as soon as June, according to the Fed minutes. A coterie of Fed heads was paraded in front of the media today and yesterday to make sure everyone got that point, pending further flip-flopping. Drowned out by this hullabaloo, the Board of Governors of the Federal Reserve released its delinquency and charge-off data for all commercial banks in the first quarter – very sobering data.
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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. Continue reading »
[Editor’s note: This letter was penned by Tim Price, London-based wealth manager and author of Price Value International.]
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. Continue reading »