Mar 02

bank-failure1

- Lehman Moment For Austrian “Bad Bank” Means Worse Coming (ZeroHedge, March 2, 2015):

Not “contained.” Just six short months ago, the 2Y bonds of Austria’s bank bank – HETA Asset Resolution AG – were trading well above par as the world and his mom reached for yield (~6%) in all the wrong places. Today, following the “spectacular development” over the weekend that the bank will be wound down due to the discovery of an $8.5bn “hole” in its balance sheet, the 2Y HETA bonds are trading below 50c on the dollar (at a yield of 54%). This is indeed Austria’s “Lehman” moment as for the first time in the new European ‘bail-in’ era, senior debt is getting a massive haircut.

As we noted yesterday, the punchline, is that while the world was waiting for Greece to announce capital controls, or a bail-in over the past week, it was none other than one of the Europe’s most pristeen credits (one which until recently was rated AAA/Aaa) that informed creditors a bail-in is imminent: “The finance ministry noted that creditors can be forced to contribute to the costs of winding down Heta – or “bailed in” – under new European legislation that Austria adopted this year so that taxpayers do not have to shoulder the entire burden.Continue reading »

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Mar 02

Sundown In America

- David Stockman Warns “It’s One Of The Scariest Moments In History” (ZeroHedge, March 1, 2015):

“The Fed is out of control,” exclaims David Stockman – perhaps best known for architecting Reagan’s economic turnaround known as ‘Morning in America’ – adding that “people don’t want to hear the reality and the truth that we’re facing.The following discussion, with Harry Dent, outlines their perspectives on the looming collapse of free market prosperity and the desctruction of American wealth as policymakers “take our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that’s been built up and created by the American people over decades and decades.” The Fed, Stockman concludes, “is a rogue institution,” and their actions have led us to “one of the scariest moments in our history… it’s a festering time-bomb and we’re not sure when it will explode.”

Full Discussion:

Continue reading »

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Mar 02

From the article:

“The bottom line: With the restructuring of the steel and cement industries, Hebei may lose at least 200,000 steel jobs.”


Smog envelopes Xingtai, China, at dawn in southern Hebei province
Smog envelopes Xingtai, China, at dawn in southern Hebei province.

More photos here:

- Air Pollution Turned This Chinese City Into a Ghost Town (Bloomberg, Feb 26, 2015):

The city of Handan in Hebei province is the birthplace of Qin Shihuang, the first emperor of China. That illustrious history isn’t apparent today. Aging, coal-burning steel factories belch grime over the city of 1 million, one of China’s 10 most polluted. Dotting the downtown area are half-constructed high-rises, relics of a property bubble that started more than five years ago but was finally punctured last summer after the central government in Beijing curtailed credit and developers stopped paying creditors. Locals who lost their savings in dodgy real estate investments regularly block city streets in angry protests, demanding their money back from the developers. Continue reading »

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Mar 01

hypo group_0

- “Spectacular Developments” In Austria: Bail-In Arrives After €7.6 Billion Bad Bank Capital Hole “Discovered” (ZeroHedge, March 1, 2015):

Slowly, all the lies of the “recovery”, all the skeletons in the closet, and all the bodies swept under the rug are emerging.

Moments ago, Austrian ORF reported that there have been “spectacular developments” in the case of the Hypo Alpe Adria bad bank, also known as the Heta Asset Resolution, where an outside audit of Heta’s balance sheet exposed a capital hole of up to 7.6 billion euros ($8.51 billion) which the government was not prepared to fill, the Austrian Financial Market Authority said.

As a result, according to Reuters, the bad bank that was created in the aftermath of the Hypo collapse, is itself about to be unwound, as the bad bank itself goes bad! Continue reading »

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Feb 27

Luckily for investors the stock market has nothing to do with the economy, i.e. reality, anymore, …

… until it does (= when Rothschild will press the sell button).


greenspan-cfr

- Greenspan: “The Stock Market Is Great”, But The Economy Feels Like In “The Late Stages Of The Great Depression” (ZeroHedge, Feb 26, 2015):

While conflicting economic data leaves hope for both buills and bears, Alan Greenspan warns that, unlike Yellen, “US economic growth is not strong.” He then slays another pillar – suggesting the exuberant job growth is anything but (as he focuses on weak productivity as he pinpoints entitlements as “crowding out capital investment” in America. The maestro then breaks the golden rule of central bankers and explains how The Fed was, in fact, the main driver of the P/E multiple expansion in stocks; and when asked if this ends as badly as last time? He concludes “It depends…When real interest rates start to move up, that’s when the crisis could hit.” The interview is somewhat stunning in its honesty (for a central banker) as he warns global “effective demand is extraordinarily weak – tantamount to the late stages of the great depression.”

Some other excerpts… Continue reading »

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Feb 27

From the article:

“So when is the Greek drama set to make a surprise come back appearance?

Greece is due to pay the IMF 310 million euros on March 6, 350 million on March 13, 580 million on March 16 and another 350 million on March 20.

We suggest readers grab a seat and some popcorn on any of those days, because the inevitable day when Greece finally runs out of not just its own but other people’s money, may arrive as recently as one week from today.”


mr-panos

- Greece Warns It May Default On IMF Loan As Soon As Next Week (ZeroHedge, Feb 26, 2015):

Now that the Greek tragicomedy of the new government “threatening” to leave the Eurozone if it doesn’t get its way, has been postponed for a few weeks, if not months, we can go back to the biggest story involving Greece, one we first covered in October of 2014, when we said that Greece needs about €43 billion through the end of 2015 to cover its funding needs. Earlier today, the broader market finally woke up to precisely this problem for Greece, when MarketNews reported that Greek creditors are now contemplating a third bailout which could be as large as €30 billion. Continue reading »

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Feb 27

Is This The Most Important Chart For The Future Of The World’s Reserve Currency? (ZeroHedge, Feb 25, 2015):

When it comes to the future of the dollar status as the world’s reserve currency, the most important chart may be the fact that the US is now so woefully buried in debt that another global military conflict appears inevitable…

US debt

… or that it now takes virtually unlimited monetization of the debt shown above to preserve the illusion that the US is not bankrupt, pushing the S&P to record highs in the process…

fed monetary base

… or that the marginal impact of every additional dollar in new debt generates increasingly less economic growth? Continue reading »

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Feb 26

- Greece Suffers Biggest Bank Run In History: January Deposits Plunge To 2005 Levels (ZeroHedge, Feb 26, 2015):

Moments ago the Bank of Greece presented its latest, January, deposit data. And it’s a doozy: following a record €12.2 billion monthly outflow, greater in absolute and relative terms than anything experienced during any of the previous Greek crises and bailouts, the total amount of Greek corporate and household deposits has now tumbled to just €148 billion. This number is in line with some of the more pessimistic expectations, and brings the total cash holdings at Greek banks to the lowest level since August 2005.

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Feb 26

- Ukraine Enters Hyperinflation: Currency Trading Halted, “Soon We Will Walk Around With Suitcases For Cash” (ZeroHedge, Feb 25, 2015):

Yesterday we summarized the most recent economic, political and social situation in Ukraine as follows:

“A year or so on from the last coup in Ukraine, Ukraine’s former Prime Minister Sergey Arbuzov told TASS, with growing popular discontent, “another state coup can’t be ruled out in Ukraine.” As the cease-fire deal hangs torn and tattered in the Debaltseve winds, the nation is a mess: a new gas dispute looms as Gazprom demands upfront payments; capital controls have been tightened as the $17.5bn IMF loan may not be enough; and the central bank governor faces prosecution as the economy craters. All of these factors have driven massive outflows from Ukraine and the Hryvnia has crashed to over 33 to the USD – a record high (and 70% devaluation from the last coup).”

So as the Ukraine government watches its country go down in flames, with the blessings of the US State Department of course, it decided to take action. According to Reuters, with the hryvnia in free fall (see above) the central bank tried to call a halt on Wednesday by banning banks from buying foreign currency on behalf of their clients for the rest of this week. Continue reading »

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Feb 26

Coming to a country near you soon …

- This Is The Biggest Problem Facing The World Today: 9 Countries Have Debt-To-GDP Over 300%


- This Is What Happens To Gold In A Hyperinflationary Currency Crisis: Ukraine Edition (ZeroHedge, Feb 25, 2015):

As Ukraine’s socio-economic situation goes from wost to worst-er, today’s announcement by President Poroshenko that the government will take actions to stabilize the currency (which as we previously noted, appears to be heading for hyperinflation) has Ukrainians rushing for the exits into precious metals… with only one goal in mind – wealth preservation.

20150225_GoldUAH

This is what gold does in a fiat-currency crisis. Now if only Ukraine actually still had some gold

Furthermore, according to RIA, on Tuesday, Ukrainian television channel Ukraina announced that with the new exchange rate, the minimum wage in Ukraine stands at around $42.90 per month, which according to the channel, is lower than in Ghana or Zambia. Continue reading »

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Feb 26

- Ukraine Enters The Endgame (ZeroHedge, Feb 25, 2015):

Back in March 2014 we forecast that it in the aftermath of the US State Department-sponsored military coup in Kiev, it was only a matter of time before Ukraine (all of its sovereign gold having since “vaporized“) succumbed to full blown hyperinflation and economic implosion. Less than a year later, precisely this outcome has finally played out, and as a result, the entire nation has finally entered its economic endgame, one which has two conclusion: either it joins Greece in becoming a ward of Europe (of which it is not an official member) and the IMF (thank you Joe Q Public taxpayer), or it quietly fades away into insolvent “failed state” status.

This is in a nutshell the assessment by Goldman Sachs, presented below, which really doesn’t say much we didn’t cover earlier in “Ukraine Enters Hyperinflation: Currency Trading Halted, “Soon We Will Walk Around With Suitcases For Cash“, but which does lays out the (very unpleasant) alternatives for yet another nation brought to ruin through American neo-colonial expansion, in what may well be a record short period of time. Of these, the primary ones focus on yet another IMF bailout which the agency may find some resistance to as a result of the near-total collapse of Greece at the same time. And not only that but Goldman’s “base case of IMF fund disbursement in mid-March may not come quickly enough to stabilize the Hryvnia.” Oops. Continue reading »

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Feb 26

- Welcome To The Recession? (ZeroHedge, Feb 25, 2015):

It’s different this time…

Recession

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Feb 25

- This Is Why Hewlett-Packard Is Firing 58,000 (ZeroHedge, Feb 24, 2015):

The biggest scandal in today’s release of Hewlett Packard Q1 earnings was not that, just as the Nasdaq is knocking on 5000’s door, it reported revenues of $26.8 billion missing consensus expectations of $27.3 billion, while beating non-GAAP EPS by 1 cent to $0.92 (up from $0.90 a year ago) entirely due to a massive reduction in outstanding stock and some truly gargantuan non-GAAP addbacks (GAAP EPS declined from $0.74 a year ago to $0.73) pushing the stock down 7% after hours.

The biggest scandal was the company announced that having cut 44,000 workers so far, it will cut 58,000 jobs by the end of 2015.

From Bloomberg:

  • HP SAYS HAS CUT 44,000 JOBS TO DATE
  • HP SAYS EXPECTS TO CUT 58,000 JOBS BY END OF FISCAL 2015

Incidentally, just 10 years ago Hewlett Packard employed a total of 58,000 people in the entire US.

So why is the company axing 58 thousand workers? Simple: so it can cut enough costs on top and continue to fund its now exponential surge in stock buybacks, which in the just concluded quarter was a record $1.6 billion, an increase of 178% from a year ago, and 66% more than the company spent on CapEx, in the process making its shareholders even richer while its management team get massive equity-linked bonuses.

Rinse. Repeat.

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Feb 25

14-Signs-Americans-Are-Flat-Broke

- 14 Signs That Most Americans Are Flat Broke And Totally Unprepared For The Coming Economic Crisis (Economic Collapse, Feb 23, 2015):

When the coming economic crisis strikes, more than half the country is going to be financially wiped out within weeks.  At this point, more than 60 percent of all Americans are living paycheck to paycheck, and a whopping 24 percent of the country has more credit card debt than emergency savings.  One of the primary principles that any of these “financial experts” that you see on television will teach you is to have a cushion to fall back on.  At the very least, you never know when unexpected expenses like major car repairs or medical bills will come along.

And in the event of a major economic collapse, if you do not have any financial cushion at all you will be a sitting duck.  Yes, I know that there are millions upon millions of families out there that are just trying to scrape by from month to month at this point.  I hear from people that are deeply struggling in this economy all the time.  So I don’t blame them for not being able to save lots of money.  But if you are in a position to build up an emergency fund, you need to do so.  We have been experiencing an extended period of relative economic stability, but it will not last.  In fact, the time for getting prepared for the next great economic downturn is rapidly running out, and most Americans are not ready for it at all.

The following are 14 signs that most Americans are flat broke and totally unprepared for the coming economic crisis: Continue reading »

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Feb 25

US Macro

- US Macro Crashes Near 1-Year Lows, February Running At 90% Data Miss Rate (ZeroHedge, Feb 24, 2015):

Despite this morning’s US Services PMI rise, US macro data is running at a 90% miss rate in February and Richmond Fed’s tumble from 6 to 0 (11mo lows) along with The Conference Board’s Consumer Confidence dropping the most since Oct 2013 merely confirm this trend. This is the biggest 4-month slump in Richmond Fed since 2010 as practically every sub index deteriorated. California, Florida and New York saw over consumer confidence collapse and Texas saw ‘present situation’ plunge. US Macro data is now nearing its lowest in a year…

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Feb 25


24.02.2015

Description:

In this Keiser Report, Max Keiser and Stacy Herbert discuss removing the document to remove the men who rule our bureaucratic world – from their mountains of derivatives paperwork, which has added nothing to global GDP to the piles of QE, which has added merely more paper gains to an over-bloated stock market.

In the second half, Max interviews David Graeber about his new book, The Utopia of Rules: On Technology, Stupidity and the Secret Joys of Bureaucracy. They talk about the Sovietization of capitalism as more and more paperwork and more and more contracts are required for the simplest of every day financial exchanges. Max introduces the concept of a Fee-ocracy which believes in the ideology of fee-ism, whereby spinning enough contracts and debt makes us all rich as epitomized by the practice of Quantitative Easing which is printing paperwork.

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Feb 24

Well, it’s Not the biggest problem.


- This Is The Biggest Problem Facing The World Today: 9 Countries Have Debt-To-GDP Over 300% (ZeroHedge, Feb 23, 2015):

If anyone has stopped to ask just why global central banks are in such a rush to create inflation (but only controlled inflation, not runaway hyperinflation… of course when they fail with the “controlled” part the money paradrop is only a matter of time) over the past 5 years, and have printed over $12 trillion in credit-money since Lehman, the bulk of which has ended up in the stock market, and which for the first time ever are about to monetize all global sovereign debt issuance in 2015, the answer is simple, and can be seen on the chart below.

It also shows the biggest problem facing the world today, namely that at least 9 countries have debt/GDP above 300%, and that a whopping 39% countries have debt-to-GDP of over 100%!

Global debt to gdp Continue reading »

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Feb 24

- Existing Home Sales Plunge (and Don’t Blame The Weather) (ZeroHedge, Feb 23, 2015):

With homebuilder sentiment slipping,blamed on the weather (despite improvement in the Northeast), Architecture billings down, and lumber prices down, it should not be totally surprising that existing home sales collapsed in January (-4.9% against expectations of -1.8% to a worse than expected 4.82 million SAAR). This is the lowest existing home sales since April. Oh – and before the talking heads blame the weather – the biggest drop in home sales was in The West (with its warm, dry, sunny home-buying climate). Considering that existing home sales most recent peak in 2014 failed to take out the previous government-sponsored peak in 2013 and remains 30% or more below the 2005 peak, and claims that the housing recovery is in tact are greatly exaggerated.

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Feb 24

- Commodities Crushed: WTI Plunges To $48 Handle, Copper Breaks Key Support (ZeroHedge, Feb 23, 2015):

Perhaps the world is beginning to realize that “it’s the demand, stupid” as crude oil prices are collapsing this morning (not helped by “all out production” news from Oman). While ‘markets’ rallied peculiarly after last week’s epic surge in inventories and production data, that has all been given back as one trader noted “the market got ahead of itself, even though the rig count has been falling it is not until mid-yr that we are going to see some impact on supply.” WTI is back under $49.  To complete the gloom, Copper is probing lower, breaking key support with projections to 222.50 if this move takes shape.

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Feb 23

- Record Low Baltic Dry Casualties Emerge: Third Dry-Bulk Shipper Files For Bankruptcy In Past 3 Weeks (ZeroHedge, Feb 23, 2015):

The unintended consequences of a money-printed, credit-fueled, mal-investment-boom in commodities (prices – as opposed to physical demand per se) and the downstream signals that sent to any and all industries are starting to bite. The Baltic Dry Index has plunged once again to new record lows and the collapse of the non-financialized ‘clean’ indicator of the imbalances between global trade demand and freight transport supply has the real-world effects are starting to be felt, as Reuters reports the third dry-bulk shipper this month has filed for bankruptcy… in what shippers call “the worst market conditions since the ’80s.”

Spot the credit-based mal-investment boom

Commodities-Baltic-Dry-Index-Collapse

After 2 brief days of very marginal gains, The Baltic Dry Index dropped again…

Baltic-Dry-Index-Collapse

As Reuters reports,

A third dry cargo shipper has filed for bankruptcy this month following a collapse in freight rates to historic lows in what shippers call the worst market conditions since the 1980s. Continue reading »

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