Jul 28

NWO

- 85 Super Wealthy People Have More Money Than The Poorest 3.5 Billion Combined (Economic Collapse, July 27, 2014):

The global economy is structured to systematically funnel wealth to the very top of the pyramid, and this centralization of global wealth is accelerating with each passing year.  According to the United Nations, 85 super wealthy people have more money than the poorest 3.5 billion people on the planet combined.  And 1.2 billion of those poor people live on less than $1.25 a day.  There is something deeply, deeply broken about a system that produces these kinds of results.  Seven out of every ten people on the planet live in countries where the gap between the wealthy and the poor has increased in the last 30 years.  Despite our technological advances, somewhere around a billion people go to bed hungry every single night.  And when our fundamentally flawed financial system finally does collapse, it will be the poor that will suffer the worst. Continue reading »

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Jul 28

- Over 50 dead in Tripoli airport battle as foreigners leave collapsing Libya (RT, July 27, 2014):

Over 50 Libyan fighters died in exchanges over Tripoli’s airport during the weekend in one of the worst outbreaks of violence since Gaddafi’s ouster. With state authority on the verge of collapse, France and Britain have ordered citizens to evacuate.

One hundred people have died in the battle for the airport, with 400 others believed to be wounded, the country’s health ministry announced. Continue reading »

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Jul 23

- The Baltic Dry Index Collapses To 18-Month Lows; Worst July Since 1986 (ZeroHedge, July 22, 2014):

The bulls will ignore it, shrugging that it’s merely over-supply of ships that the resurgent world economy will quickly soak up as it ‘recovers’… However, World GDP growth expectations are collapsing, trade volumes are slowing, and the Baltic Dry Index has continued to slump to its lowest since the start of January 2013 (a holiday period). For some context, this is the lowest July level for the Baltic Dry since 1986… “noise”

There’s this…

20140718_gdp

and then there’s this…

20140722_BDIY2

Which is the worst July level for the global shipping index since 1986… Continue reading »

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Jul 23

With 1 Week Left Until Argentina’s ‘D’efault-Day, Judge Blasts “Judgments Are Judgments” (ZeroHedge, July 22, 2014):

Day after day, headlines from Argentina implore Judge Griesa to do the “fair, responsible” thing and lift his judgment that holdouts get paid before current bondholders receive their payments… and day after day Argentina’s demands are met with silence or denials. Today, though, with 1 week left until Argentina must put up or shut up, Judge Griesa has come out swinging…

  • *U.S. JUDGE SAYS OF ARGENTINA RULINGS: ‘JUDGMENTS ARE JUDGMENTS
  • *ARGENTINA’S ‘INCENDIARY` RHETORIC `UNFORTUNATE,’ JUDGE SAYS
  • *U.S. JUDGE URGES ‘SENSIBLE STEPS’ TO AVOID ARGENTINA DEFAULT

While CDS spreads have surged once again, bonds trade with default probabilities around only 50% which, according to Jefferies “are expensive on underestimating the risk of default.” Continue reading »

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Jul 23

- Venezuela’s Transformation To Socialist Utopia Is Nearly Complete As Its Factories Grind To A Halt (ZeroHedge, July 22, 2014):

Venezuela’s transformation to a socialist utopia has been well-documented on these pages. Recall:

In retrospect, one can only hope the same “socialist paradise” fate isn’t headed to the other “fairness doctrine” members such as the US and France, because with socialist utopias like these who needs capitalist hell? Continue reading »

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Jul 21

- First Detroit, Now Flint Warns Bankruptcy “Train Is Headed For The Cliff” (ZeroHedge, July 19, 2014):

Flint may be Michigan’s second city to plunge into bankruptcy unless retirees accept cuts in health benefits that threaten to unravel a balanced budget. As Crain’s Detroit reports, Emergency Manager Darnell Earley (Flint’s third emergency leader since it was placed under state control in 2011) warned “If we have no ability to mitigate the cost of retiree health care, that’s going to make it very difficult for the city to remain financially stable over the next few years.” As Eric Scorsone notes, “Flint’s at the forefront, but a lot of cities are on the same train, and that train is headed for the cliff.”

As Crains Detroit reports,

As Detroit draws worldwide attention for its record $18 billion bankruptcy, Flint demonstrates the plight of U.S. cities where unfunded post-retirement costs rival or exceed pension liabilities. In Michigan alone in 2011, municipalities had nearly $13 billion in health-care liabilities for retirees, compared with about $3 billion for pensions. Flint is among 17 cities and school districts under some form of state control. Continue reading »

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Jul 20

Protest Advocate Water Access Is Basic Right, After City Of Detroit Starts Cutting Service
Demonstrators protest against the Detroit Water and Sewer Department July 18, 2014 in Detroit, Michigan. The Detroit Water and Sewer Department have disconnected water to thousands of Detroit residents who are delinquent with their bills. (AFP Photo / Getty Images / Joshua Lott)

- Thirsty for justice: Detroit protesters flood streets over water shutdown (RT, July 19,  2014):

Hundreds of demonstrators paraded through Detroit, protesting the city’s decision to terminate water supplies to thousands of residents with delinquent accounts.

“Fight, fight; water is a human right,” the protesters chanted as they marched the city on Friday. Media estimated their number at 300-1,000 people.

The protest was organized by the group National Nurses United, which says the termination of water supplies, in the middle of summer, could turn into a public health emergency. The group’s co-president, Jean Ross, called the shutoffs an “attack on the basic human right of access to safe, clean water.” Continue reading »

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Jul 19

- The Coming Crash Is Simply the Normalization of a Mispriced Market (OfTwoMinds, July 17, 2014):

The correlation between the Fed’s monetary heroin production and the stock market will break down as the market normalizes.

In the spirit of calling things what they are, longtime correspondent Harun I. explains that market crashes are simply distorted/mispriced economies attempting to normalize. 

Here’s Harun’s commentary:

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Jul 19

Elite puppet President Obama is doing nothing but lying:

- Obama Lies Compilation (Video)

- VIDEOS: President Obama Lies Documented (In His Own Words) – 65 Outrageous Lies – Lies and Broken Promises From 2007 And 2008

- Barack Obama Lies 7 Times In Under 2 Minutes!!!!!


Obama-Lies

- 14 Reasons Obama Is Lying When He Claims The World Is ‘More Stable’ And ‘Less Violent’ Than Ever (Economic Collapse, July 17, 2014):

With a straight face, Barack Obama has been repeatedly telling us that the world is “more stable” and “less violent” than ever.  In fact, he believes that this is the best time in history to be alive because of how peaceful and stable everything is.  And of course Obama is more than happy to take credit for his role in bringing all of this “stability” about.  Just this week, his press secretary told the media that this administration has “substantially improved” the “tranquility of the global community”.  Apparently these guys don’t think that we will notice all of the violence, war and terrorism constantly raging all around us.  It would be wonderful if the planet actually was becoming a more peaceful place, but instead the exact opposite is happening.  The world is becoming increasingly unstable, and if we aren’t really careful we could see World War III break out before too long. But if you listen to Obama, he makes it sound like we are living in an emerging global utopia.  The following is an excerpt from remarks that he made during a White House event in June…

[T]he truth of the matter is that for all the challenges we face, all the problems that we have, if you had to be — if you had to choose any moment to be born in human history, not knowing what your position was going to be, who you were going to be, you’d choose this time. The world is less violent than it has ever been. It is healthier than it has ever been. It is more tolerant than it has ever been. It is better fed then it’s ever been. It is more educated than it’s ever been. Continue reading »

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Jul 19

Holding Company Of Portugal’s 2nd Largest Bank Just Filed For Bankruptcy Protection (ZeroHedge, July 18, 2014):

Following this morning’s farce of huge investor demand and then Bank of Portugal’s Costa ‘hoping’ for demand from investors willing to pile more money on losing money into Espirito Santo, it appears things have escalated rapidly…

*ESPIRITO SANTO INTERNATIONAL SAYS IT CAN’T MEET OBLIGATIONS
*ES INTERNATIONAL APPLIES FOR `CONTROLLED MANAGEMENT’ REGIME UNDER LUXEMBOURG LAW

The “controlled management” application is the equivalent of declaring a breakup or controlled bankruptcy process (as we explained here). ESI is the ultimate HoldCo in the Banco Espirito Santo family.

 

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Jul 19

- The Electrical Grid May Well Be The Next War’s Battlefield (Peak Prosperity, July 16, 2014):

Crippling the US without firing a shot

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Jul 19

- World GDP Hopes Are Collapsing (ZeroHedge, July 18, 2014):Share27

Presented with no comment (except to note how different the “fact” in this chart is from the “fantasy” we hear spewed day after day about ‘recovery’ in the world’s economy)

20140718_gdp

Chart: Bloomberg

 

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Jul 18

- If This Keeps Up, They Will Have To Start Putting Armed Guards On Food Trucks (Economic Collapse, July 16, 2014):

The basic necessities in life just keep getting more expensive.  On Tuesday, Hershey announced that the price of all of their chocolate bars is going to go up by about 8 percent.  That is particularly distressing to me, because I am known to love chocolate.  But if it was just chocolate that was becoming significantly more expensive perhaps that would be okay.  Last month, it was coffee.  J.M. Smucker, one of the largest coffee producers in the United States, announced that it planned to raise coffee prices by about 9 percent.  And Starbucks has announced a bunch of price increases across the board on their coffee products.  Of course we could all survive without chocolate and coffee, but as you will see below just about every food category is becoming more expensive.  If this keeps up, could we eventually see armed guards in grocery stores and on food trucks? Continue reading »

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Jul 18

- Housing Starts Tumble, Miss Most Since January 2007; Permits Have Biggest Two-Month Plunge Since Lehman (ZeroHedge, July 17, 2014):

“Epic disaster.” Those two words best explain what just happened with US housing starts and permits in June.Those who want a slightly more detailed narrative of what the Department of Commerce just reported here it is: in June housing starts were expected to print at a solid 1020K, to validate the sustainable “recovery.” Instead, what happened was that the May downward revised number of 985K, which was a consensus beating 1001K last month, crashed to 893K, a drop of 92K which was the biggest since the January “polar vortex” effect, the biggest miss to permaoptimistic expectations since January 2007, and which brought the total number of starts to the lowest level since September 2013. Was it the harsh weather’s fault this time too?

 

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Jul 18

- The Marginal “Benefit” Of A Terminated Microsoft Employee: $1.5 Million (ZeroHedge, July 17, 2014):

Since the advance reports of layoffs at Microsoft started circulating this Sunday, the giant tech company has surged over 8%. This has raised the market cap of the behemoth by almost $28 Billion. Today we get the ‘news’ that Microsoft was laying off a record 18,000 employees (more than tripled the 2009 dump of 5,900 employees).That means – for all activist investors out there looking to raise MSFT share price – a $1.5 million market cap boost for each scalp, which, in other words, is the marginal “value added” of every currently employed Microsoft worker.

20140717_MSFT

 

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Jul 18

From the article:

“Actually, the main reason why a deluge of defaults is inevitable, whether Beijing likes it or not, is that as we will report shortly, far from enaging in any deleveraging or “tapering” of credit injections, in the first quarter, Chinese banks saw the biggest increase in their assets in history! And since the bulk of these are in the form of loans going to already insolvent and materially impaired business, all China is doing now is throwing trillions in good money after bad. Which also means that in deciding to delay the Minsky unwind if only by a few months, China has just assured that when the collapse finally comes, it will be that much more acute.”


Second Chinese Bond Default On Deck (ZeroHedge, July 17, 2014):

It seems like it was only yesterday when the first official Chinese corporate default in history (there have been many other ones in the past but all were quickly masked by the government to avoid a panic), Chaori Solar, entered the history books. Now it’s time for default number in the country’s onshore bond market as Huatong Road & Bridge Group, a company whose businesses includ bridge and highway construction, real estate, coal, eco-friendly construction materials and agriculture-related projects, based in the northern province of Shanxi, said it may miss a 400 million yuan ($64.5 million) note payment due July 23, according to a statement to the Shanghai Clearing House yesterday.

Continue reading »

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Jul 17

Microsoft

Microsoft Announces Record 18,000 Layoffs, Three Time More Than Expected (ZeroHedge, July 17, 2014):

While the news was reported earlier this week, it is perhaps notable that what was once considered the leading US tech company has also succumbed to the great “jobless” US recovery (in which the US economy is somehow adding 200K+ jobs every month even as it is firing millions). Furthermore, what was supposed to be 6,000 layoffs has just tripled to 18,000, which also happens to be the largest round of layoffs in MSFT history, surpassing the previous record of 5,800 set back in 2009.

From the PR: Continue reading »

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Jul 17

Q1 Productivity Collapsed Most In Over 60 Years; Goldman Fears Consequences (ZeroHedge, July 16, 2014):

The official measure of Q1 productivity growth currently looks likely to be revised down to almost -6% (annualized) – the worst in almost 70 years. As Goldman points out, even on a longer-term basis, the 4-, 8-, and 12-quarter trends are all in a 0.2%-0.6% range when the Q1 estimates are included, dramatically below consensus 2% estimates of the long-term trend. While Goldman notes productivity is a very noisy series, because it is calculated as the difference between noisy GDP numbers and noisy hours worked numbers; if these numbers are an accurate representation of the long-term trend, the implications for the long-term growth in US living standards would be very negative.

Weather?

Productivity-collapse

Of course, it wouldn’t be Jan Hatzius if Goldman didn’t end on an optimistic note… Continue reading »

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Jul 15

Prepare for collapse.


bis-bank-for-international-settlements-basel-switzerland

- The Head Of ‘The Central Bank Of The World’ Warns That Another Great Financial Crisis May Be Coming (Economic Collapse, July 13, 2014):

Most people have never heard of Jaime Caruana even though he is the head of an immensely powerful organization.  He has been serving as the General Manager of the Bank for International Settlements since 2009, and he will continue in that role until 2017.  The Bank for International Settlements is a rather boring name, and very few people realize that it is at the very core of our centrally-planned global financial system.  So when Jaime Caruana speaks, people should listen.  And the fact that he recently warned that the global financial system is currently “more fragile” in many ways than it was just prior to the collapse of Lehman Brothers should set off all sorts of alarm bells.  Speaking of the financial markets, Caruana ominously declared that “it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally” and he noted that “markets can stay irrational longer than you can stay solvent”.  In other words, he is saying what I have been saying for so long.  The behavior of the financial markets has become completely divorced from economic reality, and at some point there is going to be a massive correction.

So why would the head of ‘the central bank of the world’ choose this moment to issue such a chilling warning? Continue reading »

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Jul 15

Flashback:

- Inflation, Hyperinflation and Real Estate (Price Collaps)


- Phoenix Housing Market Hit By Unprecedented Plunge In Demand (ZeroHedge, July 14, 2014):

The Phoenix housing market has a special place in the heart of housing bubble watchers: together with Las Vegas and various California MSAs, this is the place where the last housing bubble was born and subsequently died a gruesome death which nearly brought down the entire financial system. Which is why the monthly WP Carey report on the Greater Phoenix Housing Market is of peculiar interest for those who want to catch a leading glimpse into the overall state of the bubble US housing market. As hoped, this month’s letter does not disappoint. What we find is that while equilibrium prices have been largely flat month over month, and are up 6% on an average square foot basis from a year ago, something very bad is happening with a key component of the pricing calculation: demand has fallen off a cliff.

Some of the disturbing findings from the report: Continue reading »

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Jul 14

Hmmh.

Alex Jones now – like Obama – using the latest state of  the art MASS HYPNOSIS techniques of Dr. Milton Erickson, M.D. ?

Start listening from 12:50 into the video …

“Now is the time to …”

- PDF: Obama’s_Use_of_Hidden_Hypnosis_techniques_in_His_Speeches:

Elementary pacing examples from Obama include, “now is the time”, and “as I stand here before you.”

These statements are undeniably true in the simplest terms and commonly used parts of his pacing techniques, because of course now is the time, and if he is there speaking, of course he is standing before us.

These are things the hypnotist says that are verifiably true, and used to lower our critical factor defenses to allow implantation of subconscious messages.



Added: Jul 12, 2014

Related info:

- 70% Devaluation Of The US Dollar Coming – We Are Headed For A Crisis Of Biblical Proportions – IMF Christine Lagarde’s Warning! (Video)

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Jul 13

From the article:

“It is just amazing who disconnected government are from the reality of the economy. Everything is geared to move toward the confiscation of wealth not reforming the system. These people are just brain-dead.”


Bremen-buergerschaft

- German Municipals In Trouble (Armstrong Economics, July 10, 2014):

Part of our job is monitoring everything everywhere. We are gathering data om whatever moves on a global basis. I have stated numerous times, it is IMPOSSIBLE to forecast a single market in isolation because the wildcard comes from contagions set in motion elsewhere. It is like sunning on the beach and there is a tidal wave coming because of an earthquake you didn’t know happened. Unless you monitor the world, you cannot even forecast the weather for tomorrow. It would all be just dumb-luck and chance.

I have been warning that about 50% of the municipal governments in Germany are on the verge of bankruptcy. Continue reading »

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Jul 13

- Trump Plaza To Close In September As Atlantic City Implosion Claims Fourth Casino (RT, July 12, 2014):

The Atlantic City casino industry implosion continues. Following the second, and final, bankruptcy of AC’s “state of the art” Revel Casino a month ago, as well as the shuttering of Atlantic Club hotel Casino and the Showboat hotel casino, the grim corporate reaper has come for one of the most prominent boardwalk casinos of all: Trump Plaza.

Trump Plaza

The casino which opened in 1984 as a JV between Donald Trump and Harrah’s AC, was for a long time the centerpiece of Donald Trump’s one-time Atlantic City empire, which however promptly escalated into a series of sequential bankruptcies, chipping away at Trump’s reputation and business model, as one after another of Trump’s properties sought Chapter 11 protection. Continue reading »

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Jul 12

Wile_E_Coyote-Dont_Look_Down

CEO Of Europe’s Largest Insurer Pops The Utopia Bubble: “Nothing Is Solved And Everybody Knows It” (ZeroHedge, July 11, 2014):

It’s one thing for a tinfoil fringe blog to repeat, month after month, that nothing in Europe has been fixed, that Draghi’s disastrous policies are merely concentraing and stockpiling even more unresolved problems – for now ignored courtesy of the gentle sprinkle of ZIRP, or rather NIRP “fairy dust” – and that just like Portugal showed panic can grip the entire continent literally overnight because everyone knows this. It is something entirely different for the CEO of Europe’s largest insurer to make the same statement.

From Bloomberg:

When asking Allianz SE’s chief investment officer about the euro area’s sovereign debt woes, be prepared for an emphatic response.

The fundamental problems are not solved and everybody knows it,” Maximilian Zimmerer said at Bloomberg LP’s London office. The “euro crisis is not over,” he said.

While extraordinary stimulus from the European Central Bank has encouraged investors to pile into the region’s government bonds this year, that’s not a sufficient remedy for Zimmerer, who oversees 556 billion euros ($757 billion) at Europe’s largest insurer. Countries are still building up their debt piles, and that’s storing up trouble for the future, he said.

Continue reading »

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Jul 11

In other news:

- Cynk sunk: regulators suspend trading in mystery company (Guardian, July 11, 2014):

Financial Industry Regulatory Authority halts trading in tech company with no assets, no revenue and just one employee

- Trading in CYNK Technology halted by SEC (CNBC, July 11, 2014):

Federal regulators on Friday halted trading in CYNK Technology, the mysterious over-the-counter stock that ran from a few cents to over $21 in a month.

Before:

- Pure Madness: Revenueless, Assetless CYNK Soars Over $5 BILLION; Bigger Than GameStop, Cablevision, Jabil Circuit

- Undisputable Bubble Insanity: No Revenue, No Assets Company Up Over $1 Billion (+110%) Today On 57K Shares Traded

- Market Top? Meet The $1 Billion Company With Zero Revenues


CYNK Has Been Halted By The SEC
 Shares in Cynk have skyrocketed since June, but the company has yet to make any profit – or even officially launch.

How The Market Is Like CYNK (Which Was Just Halted) (ZeroHedge, July 11, 2014):

For all the drama and comedy surrounding the epic idiocy in which a bunch of “investors” took the price of non-existent company CYNK from essentially zero to a market cap of over $5 billion in under a week, most people missed the key message here: the stock is a harbinger of what is happening to the entire market. Because while those defending what is clear irrational exuberance, scratch that, irrational idiocy are quick to point out that CYNK’s epic surge took place on less than 0.1% of its outstanding shares, these are the same people to say precisely the opposite about the S&P 500. “Ignore the collapsing volumes sending the stock market to all time high – it’s perfectly normal” is an often repeated refrain by the permabullish crowd. Just not when it involves case studies in market insanity like CYNK apparently.

Perhaps ironically, it was the concurrent most recent crisis in Europe, that involving Portugal’s cryptic Espirito Santo group, whose top-most HoldCo is largely shrouded in secrecy yet which somehow is not a deterrent to the sellside community to issue one after another “all is clear; don’t pull your deposits please” note, that confirmed not only that nobody has any idea what the real situation of European banks is, but how the entire capital market has now become nothing more than one glorified CYNK penny-stock turning into a mid-cap.

Deutsche Bank’s Jim Reid explains: Continue reading »

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Jul 11

GDP Q1

Related info:

- GDP Disaster: Final Q1 GDP Crashes To -2.9%, Lowest Since 2009, Far Below The Worst Expectations

- The Truman Show US Economy: Real GDP Numbers Show -9% Annualized Drop


- Second Company Admits “It’s Not The Weather” – It’s The Economy, Stupid (Zerohedge, July 10, 2014):

On the heels of Wal-Mart’s dismissal of the “great” jobs report, The Container Store CEO yesterday explained how Q1 weakness was “not just the weather” but an overall ‘funk’ in consumer spending. Last night we had a second firm – the much more integrated into the housing recovery, Lumber Liquidators – come out with some heresy about Q2 bounce backs and the weather…”demand strengthened for 30 days beginning in mid-March. But in May demand slowed and further weakened in June. We were somewhat surprised by the magnitude of the continued weakness in the stores designated as impacted by weather in the first quarter.” There goes Q2 GDP…

Q2 was worse that Q1!! Continue reading »

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Jul 10

- Futures Tumble, Bunds Soar To Record, Gold Surges As Europe Is Broken Again; Espirito Santo Halted (ZeroHedge, July 10, 2014):

But… but… the VIX said everything is ok, and European rates were the lowest they have been in centuries… How can something possibly go wrong?

It just did.

20140710_banco1

The scandal which we first reported yesterday, after observing the record collapse in the bonds of troubled Portuguese lender Espirito Santo International following the failure to make a bond payment, has quickly escalated and overnight went nuclear. Continue reading »

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Jul 10

Always wanted to know the feeling of being in the eye of a monster hurricane?

Well, we all are in the eye of the biggest financial monster hurricane ever created, right now.

It’s already bad, but this is really nothing compared to what is coming.


- Frontrunning: July 10 (ZeroHedge, July 10, 2014):

  • Espirito Santo Financial Suspends Shares, Bonds on ESI Exposure (BBG)
  • Europe Stocks Drop for Fifth Day as Espirito Santo Sinks (BBG)
  • Espirito Santo Creditors Doubt Containment on Missed Payment (BBG)
  • French Stocks Seen Extending Losses on Economy Concern (BBG)
  • Stocks Slide With Portugal Bonds as Yen Gains; Oil Drops (BBG)
  • U.S. Probes Hacking of Government Computers at Personnel Agency (WSJ)… finds terabytes of porn
  • It’s Congress’ fault: Obama rejects criticism over border crisis (Reuters)
  • Israel Mobilizes 20,000 Troops for Possible Gaza Invasion (BBG)
  • Chinese hackers pursue key data on U.S. workers (NYT)
  • Donetsk Primed for Siege as Ukraine Army Hems In Rebels (BBG)

Overnight Media Digest

WSJ Continue reading »

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Jul 10

jim_cramer

Undisputable Bubble Insanity: No Revenue, No Assets Company Up Over $1 Billion (+110%) Today On 57K Shares Traded (ZeroHedge, July 9, 2014):

Just 2 days ago we highlighted the best example of the exuberance awash the markets currently – CYNK Technology Corp, the social media development company that had a market capitalization in excess of $1 billion, which according to official filings,  had one employee, no website, no revenue, no product, and no assets. Fast forward 2 days – and some 57,000 shares traded (about 0.02% of its total shares outstanding) at around $10 and CYNK now has a market cap approaching $3 billion (and still no revenue, no product, and no assets)… Lord Overstone said it best. “No warning can save people determined to grow suddenly rich.”

 

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Jul 10

Portugal’s Largest Bank Misses Bond Payment; Bonds Collapse (ZeroHedge, July 9, 2014):

Brussels, we have a problem. As we warned 6 weeks ago, Espirito Santo International SA – is in a “serious financial condition” according to a central bank driven external audit by KPMG identified “irregularities in its accounts.” Sure enough, the ‘ponzi-like’ maneuvers have left the bank unable to pay its bonds as Bloomberg reports bonds plunged to record lows after a parent company delayed payments on short-term notes. More importantly, given the divisively dependent nature of the domestic sovereign bond market (and hence the health of the EU) and its banking system, it is noteworthy that Portuguese bond risk has surged to 4 month highs with the biggest 2-day spike in a year. As one analyst noted, “The bigger question is whether the government will have to get involved,” leaving the EU taxpayer on the hook once again (for fear of M.A.D. threats) as most critically, it “will have to step in to prevent systemic repercussions?

20140709_ESP

As Bloomberg reports,

Banco Espirito Santo has been “adequately isolated” by the Bank of Portugal from the financial problems, Parliamentary Affairs Minister Luis Marques Guedes said on July 3. The bank was the only one of the three biggest publicly traded Portuguese lenders that didn’t request state aid after the country received a European Union-led bailout in May 2011. Continue reading »

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