– Greece To Tax Bank Transactions, Says IMF “Won’t Get Any Money” On June 5 (ZeroHedge, May 20, 2015):
On Monday we got still more bad news for Greece. Around one-third of Angela Merkel’s Christian Democratic bloc opposes further aid for Athens meaning the Chancellor faces an uphill battle in convincing German lawmakers to keep Greece on life support. Meanwhile, a new report from the Hellenic Confederation of Commerce and Enterprises suggests that each day without a deal costs the Greek economy €22.3 million.
Not to put too fine a point on it, but Tuesday’s headlines are even worse.
First, up is parliamentary speaker Nikos Filis confirming what the IMF leaked on Saturday: without a deal, Greece will default on June 5.
Greece will not be able to make a payment to the International Monetary Fund that falls due on June 5 without a deal with its international lenders, the government’s parliamentary speaker said on Wednesday. Continue reading »
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
– John Maynard Keynes
From the article:
“If that’s “success“, we would hate to see what Keynesian failure looks like.”
– This Is What Keynesian “Success” Looks Like: Soaring Part-Time Jobs, Record Low Real Wages (ZeroHedge, May 17, 2015):
Though we noted the plight of the Japanese worker in a previous post, a plight which arrived in the US some five years ago yet which the mainstream still refuses to acknowledge, the punchline may have been somewhat diluted. So here it is again, without much additional commentary.
When it comes to the consequences of Japan’s QE, now in its third year, the head of the BOJ has been very clear: Continue reading »
– The Coming Crash of All Crashes – but in Debt (Armstrong Economics, May 16, 2015):
Why are governments rushing to eliminate cash? During previous recoveries following the recessionary declines from the peaks in the Economic Confidence Model, the central banks were able to build up their credibility and ammunition so to speak by raising interest rates during the recovery. This time, ever since we began moving toward Transactional Banking with the repeal of Glass Steagall in 1999, banks have looked at profits rather than their role within the economic landscape. They shifted to structuring products and no longer was there any relationship with the client. This reduced capital formation for it has been followed by rising unemployment among the youth and/or their inability to find jobs within their fields of study. The VELOCITY of money peaked with our ECM 1998.55 turning point from which we warned of the pending crash in Russia. Continue reading »
– Why Are Exchange-Traded Funds Preparing For A ‘Liquidity Crisis’ And A ‘Market Meltdown’? (Economic Collapse, May 13, 2015):
Some really weird things are happening in the financial world right now. If you go back to 2008, there was lots of turmoil bubbling just underneath the surface during the months leading up to the great stock market crash in the second half of that year. When Lehman Brothers finally did collapse, it was a total shock to most of the planet, but we later learned that their problems had been growing for a long time. I believe that we are in a similar period right now, and the second half of this year promises to be quite chaotic. Apparently, those that run some of the largest exchange-traded funds in the entire world agree with me, because as you will see below they are quietly preparing for a “liquidity crisis” and a “market meltdown”. About a month ago, I warned of an emerging “liquidity squeeze“, and now analysts all over the financial industry are talking about it. Could it be possible that the next great financial crisis is right around the corner?
– London Housing Bubble Watch: $630/Month For A Bed “In” A Shared Kitchen! (ZeroHedge, May 13, 2015):
You know it’s a bubble when… A listing has appeared online advertising a single bed in a house in London where the mattress is located in the kitchen.…
As I’ve said many times before:
This is the Greatest Depression.
– The US Is In Recession According To These 7 Charts (ZeroHedge, May 13, 2015)
– Second Largest Coal Miner East Of The Mississippi Files For Bankruptcy: 4000 Patriot Coal Jobs In Peril (ZeroHedge, May 12, 2015):
At last check Patriot Coal had around 4000 employees. Those soon to be former employees will soon require yet another massive seasonal adjustment by the BLS to be “adjusted” out, because moments ago the second largest coal miner east of the Mississippi and the second largest producer of thermal coal in the eastern US filed Chapter 11 bankruptcy.
H/t reader M.G.:
“The best description of the start (with Nixon) of this economic nightmare for most workers around the world……to NAFTA and now Obama’s debacle.
This will take less than 30 minutes…..well worth the time.”
In this episode of the Keiser Report, Max Keiser and Stacy Herbert with a double header discuss the economics of low wages as productivity gains go to owners of capital rather than providers of labour to create that wealth. They look at declining union membership and the rise of temp work, such as “mini-jobs” in Germany and zero hour contracts in the United Kingdom, as a means of removing collective bargaining power from workers while owners of capital and corporations gain power through collective bargaining agreements known as international ‘free trade’ deals negotiated by their union rep – the US State Department.
– US Macro Data Has Never Collapsed This Fast (ZeroHedge, May 7, 2015):
Since the end of QE3 (and the end of the government’s fiscal year), US macroeconomic data has disappointed and weakened on an unprecedented scale. With April data not showing the post-weather bounce that every sell-side economist is hoping for, the absolute level of macro weakness was only marginally weaker in the past in the aftermath of the Lehman crisis.
In the past, fundamentals mattered… Continue reading »
May 5, 2015
Without this epic stockpiling of non-farm inventory which will have to be liquidated at some point (and at a very low price) Q1 GDP would have been -2.5%.
Tags: Banking, Barack Obama, Bonds, Collapse, Debt, Economy, EU, Europe, Fed, Federal Reserve, Global News, Gold, Government, Greece, Healthcare, Internet, Obama administration, Obamacare, Politics, Silver, U.S.
“Greece is so far off course on its $172bn bailout programme that it faces losing vital International Monetary Fund support unless European lenders write off significant amounts of its sovereign debt, the fund has warned Athens’ eurozone creditors,” FT reports, indicating that the organization may force the ECB and implicitly the German taxpayer to take the hit if Greece wants to receive the last tranche of aid under its existing program
– IMF Splinters From Rest Of Troika, Threatens To Cut Off Greek Funding (ZeroHedge, May 4, 2015):
At this point it’s become fairly obvious to even the most casual observer that Greece is headed for some manner of default. The only real question is who gets shorted and when, as well as a relatively new question: which debt will Greece will default on first (just because it has so many choices). Continue reading »
– Major U.S. Retailers Are Closing More Than 6,000 Stores (Economic Collapse, May 1, 2015):
If the U.S. economy really is improving, then why are big U.S. retailers permanently shutting down thousands of stores? The “retail apocalypse” that I have written about so frequently appears to be accelerating. As you will see below, major U.S. retailers have announced that they are closing more than 6,000 locations, but economic conditions in this country are still fairly stable. So if this is happening already, what are things going to look like once the next recession strikes? For a long time, I have been pointing to 2015 as a major “turning point” for the U.S. economy, and I still feel that way. And since I started The Economic Collapse Blog at the end of 2009, I have never seen as many indications that we are headed into another major economic downturn as I do right now. If retailers are closing this many stores already, what are our malls and shopping centers going to look like a few years from now?
The list below comes from information compiled by About.com, but I have only included major retailers that have announced plans to close at least 10 stores. Most of these closures will take place this year, but in some instances the closures are scheduled to be phased in over a number of years. As you can see, the number of stores that are being permanently shut down is absolutely staggering… Continue reading »
– “Stop Being So Negative”: Putting It All Together (ZeroHedge, May 2, 2015):
Putting it all together
1) governments are unable to eliminate deficits
2) global government debt is increasing exponentially
3) 0% interest rates are allowing governments to borrow more to pay off old loans and fund deficits
4) Global growth is declining despite money printing and bailouts And, we’ve saved the latest and greatest fact for last: as stunning as 0% interest rates sound, the mathematically-challenged-fantasyland called Europe has just one upped everyone by introducing NEGATIVE INTEREST RATES.
As of writing, over 25% of all bonds issued by European governments has a guaranteed negative return for investors. Continue reading »
– We Just Broke 2008’s Record For The Fastest Economic Unraveling! (First Rebuttal, May 1, 2015)
The final Q1 GDP revision was just released and we saw that GDP has again missed expectations by such a large margin that 2015 is another write off for a 3% growth year. Almost comically we heard the same excuses we got last year. “Weather was wintery and next year is going to be the turnaround year”. So in order to explain to these supposed economic and market ‘experts’ who seem wholly incapable of understanding economic and market forces with any sense of accuracy, let’s run through a few fundamentals.
From the article:
“In other words, if US inventories, already at record high levels, and with the inventory to sales rising to great financial crisis levels, had not grown by $121.9 billion and merely remained flat, US Q1 GDP would not be 0.2%, but would be -2.6%.
Oh heck, just round it down to -3.0%“
– Biggest Inventory Build In History Prevents Total Collapse Of The US Economy (ZeroHedge, April 29, 2015):
While we already observed that in Q1, US GDP rose by an appalling 0.2%, far, far below the consensus Wall Street estimate (in case you missed it, here again is the one thing every Wall Street economist desperately needs) and precisely in line with the Atlanta Fed forecast which we brought attention to in early March, confirming yet again that US stocks no longer reflect any fundamentals but merely Fed and global liquidity injections, there is something far more disturbing under the surface of today’s GDP report.
Specifically, the $121.9 billion increase in private, mostly nonfarm, inventories in the first quarter.
Cutting to the punchline, this was the biggest inventory build in history.
Another punchline: in Q1 2015, the US economy rose by a paltry $6.3 billion in nominal terms to $17.710 trillion.
Here is how the total GDP growth compares to just the increase in inventories, which as we wrote earlier this week, is the primary reason why the world is now gripped in a global deflationary wave. Continue reading »