Feb 06

A Badly Wounded Deutsche Bank Lashes Out At Central Bankers: Stop Easing, You Are Crushing Us:

“We have reached that fork in the road within the monetary twilight zone, where Europe’s largest bank is openly defying central bank policy and demanding an end to easy money. Alas, since tighter monetary policy assures just as much if not more pain, one can’t help but wonder just how the central banks get themselves out of this particular trap they set up for themselves.”

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Feb 01

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.

The West Is Reduced To Looting Itself — Paul Craig Roberts:

I, Michael Hudson, John Perkins, and a few others have reported the multi-pronged looting of peoples by Western economic institutions, principally the big New York Banks with the aid of the International Monetary Fund (IMF).

Third World countries were and are looted by being inticed into development plans for electrification or some such purpose. The gullible and trusting governments are told that they can make their countries rich by taking out foreign loans to implement a Western-presented development plan, with the result being sufficient tax revenues from economic development to service the foreign loan. Continue reading »

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Jan 29

Kuroda

The Disturbing Reasons Why The Bank Of Japan Stunned Everyone With Negative Rates:

“… When stocks are falling this much, it’s hard to justify not acting”

“… Davos – where he mingled with central bankers such as ECB President Mario Draghi and leading company executives – likely prompted him to pull the trigger”

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Jan 29

$5.5 Trillion In Government Bonds Now Have Negative Yields, Covering 23% Of Global GDP

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Jan 22

global-debt-bomb-bubble-money-black-hole

The Global Debt Bomb Is Set to Blow for the Next Recession:

For the better part of the last decade, you’ve probably heard the politicians and the media tell you the same thing, over and over again. “We’re on the road to recovery” or “the Great Recession is over.” You gotta love how they call it the “Great Recession,” as if it was as bad as the Great Depression, but they can’t quite bring themselves to call it that.

In a sense though they are correct. Things are marginally better now than they were in 2008. But I say ‘marginally’ with reservations. It’s a little easier to find a job, but they don’t pay as well as they used to. Gas is cheap, but only because the economy is slowing down, and pretty much everything else we need to survive including food, medicine, and shelter, is more expensive. The stock market has recovered over the years, but that has done little to alleviate the financial woes of working class Americans. etc etc. Continue reading »

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Jan 21

George Soros hand signGeorge Soros As The Fighting Uruk-hai With Jacob Rothschild As Saruman

Soros Reveals He Is Short The S&P 500: Warns China Will Have A Hard-Landing, Says “Fed Hike Was A Mistake”:

There’s been no shortage of commentary from market heavyweights this week thanks to the World Economic Forum in Davos, but for anyone who hasn’t yet gotten their fill of billionaire talking heads, George Soros gave a sweeping interview to Bloomberg TV on Thursday, touching on everything from China to Fed policy to Vladimir Putin to Europe’s worsening refugee crisis. The most important point – for markets anyway – came when Soros revealed that he is short the S&P, and long TSYs.

 

 

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Jan 16

Stock Market Down

Analyst: Here Comes the Biggest Stock Market Crash in a Generation:

You don’t have to listen very hard to hear the bears growling on Wall Street, London, or Paris these days. Indeed, the Dow Jones Industrial Average was down another 300 points on Wednesday to just under 16,200

With the U.S. stock market sagging, oil off to its worst start ever, and the China’s economy continuing to deteriorate, bearish analysts have a wealth of evidence to point to.

And they don’t come much more bearish than Albert Edwards, strategist at Société Générale. He’s not had much nice to say about the global economy in years, and recent events have only hardened his convictions that the world is headed for disaster, and will take the prices of equities down with it. How much? Edwards predicts the U.S. stock market could plunge as much as 75%. That would be worse than during the financial crisis, in which stocks from their peak to trough dropped a brutal 62%. Continue reading »

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Jan 15

S&P Enters The Latest European Scandal: Downgrades Poland From A- To BBB+:

Over the past week, Poland’s relations with Europe have gone from cordial to abysmal, when first Poland’s new Eurosceptic government compared the EU and Merkel to Nazis, with Polish weekly Wprost releasing the following cover saying “they want to supervise Poland again”…

Wprost full cover page - Poland

… only for Brussels to retaliate and launch an “unprecedented” review of Polish media laws, a move which Poland angrily responded is far beyond the EU’s domain.

Well, as so often happens, whenever there is a political spat in Europe, the rating agencies are quickly involved (thing S&P and Moody’s downgrades and upgrades of Greece depending on how well the vassal nation is “behaving”), and moments ago S&P downgraded Poland from A- to BBB+ outlook negative, precisely due to Poland’s new media law which has been the topic of so much consternation over the past week.

In other words, S&P is now nothing more than a lackey for Brussels, threatening to send Polish yields higher if Poland does not fall in line. Continue reading »

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Jan 13

FYI.


Sep 12, 2015

Ron Paul speaks on the upcoming financial collapse that will be far worse than the 2008 collapse. It’s not a matter of if but when it will happen.

Federal Reserve - Fed

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Jan 12

1-Switzerland

You Know Negative Interest Rates Are Bad When…:

 

Switzerland is famous for being punctual.

The trains. The buses. The meticulously crafted, hand polished luxury watches.

The Swiss are so culturally punctual that they even tend to pay their taxes well in advance of the filing deadline.

So it was quite a shock to hear this morning that the Swiss canton of Zug is asking its citizens to delay paying their taxes for as long as possible. Continue reading »

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Jan 06

War, Terrorism and the Global Economic Crisis in 2015: Ninety-nine Interrelated Concepts:

By Prof. Michel Chossudovsky

Everything is interrelated: war, terrorism, the police state, the global economy, economic austerity, financial fraud, corrupt governments, poverty and social inequality, police violence, Al Qaeda, ISIS, media disinformation, racism, war propaganda  weapons of mass destruction, the derogation of international law, the criminalization of politics, the CIA, the FBI, climate change,  nuclear war, Fukushima, nuclear radiation, crimes against humanity, The China-Russia alliance, Syria  Ukraine, NATO, false flags, 9/11 Truth, ….  

An overall understanding of  this Worldwide crisis is required: the last section deals briefly with reversing the tide of war, peace-making, instating social justice and real democracy.

This article includes a compendium of relevant citations (from my writings) pertaining to different dimensions of this  global crisis. Citations from other authors are indicated in italics.

The hyperlinks in each of the paragraphs indicate the original source of the quotation.     Continue reading »

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Dec 22

FYI.


Brutus

Et Tu, Brute? (How Empires Die):

The state-owned Bank of China has been ordered by an American court to hand over customer information to the US. The bank has refused to comply, as to do so would violate China’s privacy law. The US court has subsequently ordered the Bank of China to pay a fine of $50,000 per day.

Any guess as to how this is likely to turn out?

China is a sovereign nation, halfway around the globe from the US, yet the US seems to feel that it’s somehow entitled to set the rules for China (as well as the other nations in the world). When China sees fit to develop islands in the South China Sea that it has laid claim to for centuries, it begins to hear threatening noises from the US military. A candidate for US president declares that he would buzz the islands with Air Force One, the Presidential jet, saying, “They’ll know we mean business.” Continue reading »

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Dec 18

Waiting for the response.


Ukraine defaults on $3bn Eurobond to Russia:

Ukraine has imposed a moratorium on the $3 billion Russian debt repayment, said the country’s Prime Minister Arseny Yatsenyuk at a cabinet meeting on Friday. The announcement comes ahead of the December 20 deadline for the debt redemption.

“Considering that Russia has refused, despite our efforts, to sign an agreement on restructuring and to accept our proposals, the cabinet is imposing a moratorium on payment of the Russian debt worth $3 billion,” said Yatsenyuk.

The payment is halted “until we make restructuring proposals or a relevant court decision is made,” added the Prime Minister. Continue reading »

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Dec 14

This Is How The Credit Crisis Spreads To Stocks:

“Yeah but it’s junk credit… who cares! I am invested in solid megacaps and even solider FANGs – what can go wrong?” Well, this…

The biggest buyer of stocks in 2016, will be, according to Goldman Sachs, the same as it was in 2015 – corporate management teams buying back their own stock in near record quantities. But there is a problem with this thesis… the cost of funding these epic buybacks is surging, making the un-economic actions of the CFO (if very economical for their own bank accounts as they sell record amounts of their own personal stock to their company) even more irrational. Continue reading »

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Dec 13

“It’s An Epic Bloodbath” – Presenting The 2015 Junk Bond Heatmap

 

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Dec 10

Guess What Happened The Last Time Junk Bonds Started Crashing Like This? Hint: Think 2008:

The extreme carnage that we are witnessing in the junk bond market right now is one of the clearest signals yet that a major U.S. stock market crash is imminent.  For those that are not familiar with “junk bonds”, please don’t get put off by the name.  They aren’t really “junk”.  They simply have a higher risk and thus a higher return than other bonds of the same type.  And yesterday, I explained why I watch them so closely.  If stocks are going to crash, you would expect to see a junk bond crash first.  This happened in 2008, and it is happening again right now.  On Monday, a high yield bond ETF known as JNK crashed through the psychologically important 35.00 barrier for the very first time since the last financial crisis.  On Tuesday, high yield bonds had their worst day in three months, and JNK plummeted all the way down to 34.44.  When I saw this I was absolutely stunned.  This is precisely the kind of junk bond crash that I have been anticipating that we would soon witness. Continue reading »

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Dec 07

FYI.


Peter-Schiff

Peter Schiff Warns: “The Whole Economy Has Imploded… Collapse Is Coming”:

Back before 2008 Peter Schiff was harshly criticized and laughed at for his predictions about a coming economic collapse. Among other things Schiff warned that consumer spending had hit a wall, stocks were overpriced and lax credit lending practices would lead to a detonation of the banking system. Rather than heed the warnings, the biggest names in mainstream media tried to discredit him for not toeing the official narrative. Shortly thereafter, of course, Schiff was vindicated and much of the doom he had forecast came to pass.

Today, Schiff continues to argue that the economy is on a downhill trajectory and this time there’ll be no stopping it. All of the emergency measures implemented by the government following the Crash of 2008 were merely temporary stop-gaps. The light at the end of the tunnel being touted by officials as recovery, Schiff has famously said, is actually an oncoming train. And if the forecast he laid out in his latest interview is as accurate as those he shared in 2007, then the the train is about to derail.

We’re broke. We’re basically living off of debt. We’ve had a huge transformation of the American economy. Look at all the Americans now on food stamps, on disability, on unemployment.

The whole economy has imploded… the bottom hasn’t dropped out yet because we’re able to go deeper into debt. But the collapse is coming.

Fundamentally, America is worse off now than it was pre-crash. With the national debt rising unabated and money being printed out of thin air without reprieve, it is only a matter of time. Continue reading »

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Dec 04

“QE2 moved Repo rates, on average, 2.7 basis points for every $100B in QE. So, one very rough estimate moved GC 8 basis points and the other 2.7 basis points per hundred billion. In order to move GC 25 basis points higher, in a very rough estimate, the Fed needs to drain between $310B and $800B in liquidity.”


GC repo

“But It’s Just A 0.25% Rate Hike, What’s The Big Deal?” – Here Is The Stunning Answer:

After today’s market plunge, the result of what even Goldman admitted may have been a major policy error by the ECB, suddenly the Fed’s determination to hike rates in two weeks lies reeling on the ropes. After all, what the ECB did was an implicit tightening of reverse QE1 proportions  (it is no accident that the EURUSD is soaring as much as it did in March 2009 when the Fed unleashed QE). Continue reading »

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Dec 03

Junk Bond Market - The Biggest Red Flag since the Great Recession

Junk Bond Market: The Biggest Red Flag since the Great Recession:

The junk bond market continues to show signs of cracking…

For months now, we’ve pointed to the decline of junk bond values as one of the biggest red flags in the entire market. The bond market is where companies, countries, and individuals go to borrow money. It’s far larger and more important than the stock market. The U.S. bond market, for instance, is about twice as large as the U.S. stock market.

If an economy, industry, or company is in trouble, warning signs usually appear in the bond market long before they show up in the stock market. We’ve focused specifically on the bond market’s riskiest offerings, junk bonds, which are bonds issued by companies with shaky balance sheets. They’re riskier than bonds issued by strong companies, so they pay higher yields.

When the economy slows down, companies in poor financial shape feel the pain first. That’s why junk bonds often point out problems before other assets do.

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Dec 01

Puerto Rico Avoids $354 Million Default With Absurd Revenue “Clawback”:

 Earlier today, we noted that it was decision time for Puerto Rico.

Staring down a $354 million debt payment, Governor Alejandro Garcia Padilla had to decide between defaulting on $273 million in GO debt (the portion of the payment guaranteed by the National Public Finance Guarantee Corp.) and holding onto cash the government needs to provide public services for the island’s citizens.  Continue reading »

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Dec 01

It’s D-Day For Puerto Rico As $354 Million Payment Comes Due, Padilla Heads To Capitol Hill For Help:

Puerto Rico has a problem. The commonwealth needs to make a $354 million bond payment on Tuesday and the government is basically out of money.

We previewed this rather precarious situation twice in the last two weeks (see here and here), noting that this time is indeed “different.” Why? Because unlike August when the island paid only $628,000 of a $58 million payment (so, just about 1%), a large portion of what’s due Tuesday is GO debt guaranteed by the National Public Finance Guarantee Corp. A default on that spells litigation.

A default “would likely trigger legal action from creditors, commencing a potentially drawn-out process absent swift federal intervention,” Moody’s warned last month.

As a refresher, here’s a bullet point summary of recent developments from BofAML: Continue reading »

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Nov 20

Flag_of_Ukraine

Ukraine Debt Owed to Russia: Prime Minister Yatsenyuk: “We Will Not Pay the Aggressor State our $3 Billion Debt”:

Kiev will not pay Russia the $3 billion debt owed to it, unless other conditions of the restructuring are applied. This was stated by Arseniy Yatsenyuk. 

“I said to other lenders there are other conditions to be met or you will not receive the debt. The basic condition is reducing debt by 20%, the transfer of all debts of four years. If you do not like this, then you will receive the decision of the government of Ukraine via a moratorium on paying Russia the $3 billion. It is very easy to explain to our neighbours and the aggressor state: we will not pay $3 billion “,— quotes “RIA Novosti” citing the Prime Minister of Ukraine Continue reading »

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Nov 13

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Nov 10

For The First Time Ever, Corporate Bond Inventories Turn Negative – What This Means:

As we noted previously, for the first time ever, primary dealers’ corporate bond inventories have turned unprecedentedly negative. While in the short-term Goldman believes this inventory drawdown is probably a by-product of strong customer demand, they are far more cautious longer-term, warning that the “usual suspects” are not sufficient to account for the striking magnitude of inventory declines… and are increasingly of the view that “the tide is going out” on corporate bond market liquidity implying wider spreads and thus higher costs of funding to compensate for the reduction is risk-taking capacity.

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Nov 10

Debt-Ceiling

Why the U.S. Debt Ceiling is a Farce:

The U.S. government just increased its credit limit…

On Monday, President Obama signed a budget deal that raised the debt ceiling from $18.5 trillion to $20 trillion.

In theory, the debt ceiling limits how much money the U.S. government can borrow. The debt ceiling is now twice as high as it was when Obama took office in 2008. Continue reading »

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Nov 07

What Janet Knows:

What Janet knows, as The Burning Platform’s Jim Quinn exclaims, is that a 1% increase in interest rates would increase the interest on the National Debt from $400 billion per year to $600 billion per year, a 50% increase.

Janet-Yellen-debt

Source: Ben Garrison

Interest rates back at NORMAL historical rates that we had as recently as 2007 would increase the interest on the National Debt to $1 trillion per year, a 150% increase.

Plus, the National Debt increases by $1.5 billion per day, so our interest bill goes up by $35 million per day already.

Do you really think Yellen is going to be increasing interest rates?

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Nov 06

Disaster

Former Reagan Administration Official Warns That Financial Disaster Is Dead Ahead:

Why won’t the American people listen to the warnings?  David Stockman was a member of the U.S. House of Representatives from 1977 to 1981, and he served as the Director of the Office of Management and Budget under President Ronald Reagan from 1981 to 1985.  These days, he is running a website called “Contra Corner” which I highly recommend that you check out.  Stockman believes that a global “debt super-cycle” that has been building for decades is now bursting, and he is convinced that the consequences for the U.S. and for the rest of the planet will be absolutely catastrophic.  His findings are very consistent with what I have been writing about on The Economic Collapse Blog, and if Stockman is correct the times ahead of us are going to be exceedingly painful. Continue reading »

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Oct 31

“The conditions in the economies of the rest of the world have undoubtedly proved weaker compared with a few months ago, in particular in the emerging economies. Global growth forecasts have been revised downwards. This slowdown is probably not temporary.”


Draghi Satan

Mario Draghi Admits Global QE Has Failed: “The Slowdown Is Probably Not Temporary”:

Undoubtedly, the most amusing this about the prospect of more easing from the ECB (as telegraphed by Mario Draghi last week) and the BoJ (where Haruhiko Kuroda just jeopardized his status as monetary madman par excellence by failing to expand stimulus) is that both Europe and Japan both recently slid back into deflation despite trillions in central bank asset purchases. 

In other words, the market expects both Draghi and Kuroda to double- and triple- down on policies that clearly aren’t working when it comes to altering inflation expectations and/or boosting aggregate demand. Indeed, both Goldman and BofAML said as much last week. For those who missed it, here’s Goldman’s take Continue reading »

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Oct 28

And yes, this will end badly.


Mario-Draghi-Just-Evil

NIRP Panic: Over Half Of European 2-Year Bonds Trade At Record Negative Yields; Italy Paid To Issue Debt:

Europe has unleashed yet another monetary panic, and nowhere is it more visible than in what happened today across the short end of Europe’s government curve.  As the table below shows, more than half of European sovereign issuers just saw the yield on their 2 Year Notes trade not only below zero, but hit never before seen negative yields!

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Oct 23

Yes, the US government really is bankrupt. Here’s proof:

I’ve long-stated that the government of the United States is completely insolvent.

And that is 100% true statement.

The government’s own numbers show that official liabilities, including debt held by the public and federal retirement benefits, total $20.7 trillion. Continue reading »

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