This $5 Trillion Time Bomb Will Devastate Americans

This $5 Trillion Time Bomb Will Devastate Americans

H/t reader squodgy:

“They, with California, & NYC are at the cliff edge, thanks to stupid, selfish management.
Taking bets on which one first….oh! what about Maryland?
Either way…the knock on effect will be interesting.”

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Former Fed Chairman Alan Greenspan Ominously Warns That The Biggest Bond Bubble In History Is About To Burst

Former Fed Chairman Alan Greenspan Ominously Warns That The Biggest Bond Bubble In History Is About To Burst:

Are we right on the verge of one of the greatest financial collapses in American history?  I have been repeatedly warning that our ridiculously over-inflated stock market bubble could burst at any time, but former Federal Reserve Chairman Alan Greenspan believes that the bond bubble actually presents an even greater danger.  When you look at the long-term charts, you will see that an epic bond bubble has been growing since the early 1980s, and when it finally collapses the financial carnage is going to be unlike anything we have ever seen before.

Since the last financial crisis, global central banks have purchased trillions of dollars worth of bonds, and this has pushed interest rates to absurdly low levels.  But of course this state of affairs cannot go on indefinitely, and Greenspan is extremely concerned about what will happen when interest rates start going in the other direction…

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Netflix Is Racking Up a Staggering Amount of Debt

Netflix Is Racking Up a Staggering Amount of Debt:

From the outside looking in, it appears as if Netflix is absolutely killing it. From Orange is the New Black and House of Cards to Stranger Things and Fuller House, the streaming service has a collection of buzzy original series and revivals on top of its improving movie presence. As of right now, Netflix paces the entire streaming industry with a whopping 104 million worldwide subscribers, according to the company’s quarterly reports. But trouble may be brewing in paradise.

According to the LA Times, Netflix has accrued a long-term and short-term debt of $20.54 billion. Yes, that’s billion with a B. But investors don’t sound too worried, if the LA Times is to be believed.

H/t reader kevin a.

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Total Government And Personal Debt In The U.S. Has Hit 41 Trillion Dollars ($329,961.34 Per Household)

Total Government And Personal Debt In The U.S. Has Hit 41 Trillion Dollars ($329,961.34 Per Household):

We are living in the greatest debt bubble in the history of the world.  In 1980, total government and personal debt in the United States was just over the 3 trillion dollar mark, but today it has surpassed 41 trillion dollars.  That means that it has increased by almost 14 times since Ronald Reagan was first elected president.  I am searching for words to describe how completely and utterly insane this is, but I am coming up empty.  We are slowly but surely committing national suicide, and yet most Americans don’t even understand what is happening.

According to 720 Global, total government debt plus total personal debt in the United States was just over 3 trillion dollars in 1980.  That broke down to $38,552 per household, and that figure represented 79 percent of median household income at the time.

Today, total government debt plus total personal debt in the United States has blown past the 41 trillion dollar markWhen you break that down, it comes to $329,961.34 per household, and that figure represents 584 percent of median household income.

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Illinois “Budget Deal” Is Likely The Death Knell For The State’s $130 Billion Underfunded Pensions

Illinois “Budget Deal” Is Likely The Death Knell For The State’s $130 Billion Underfunded Pensions:

“The phase-in of the actuarial assumption is another exercise in kicking the can down the road, but we’re not sure how far the can travels.  You pay less now, pay more later.”

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Fed Chair Janet Yellen Warns Congress: US Debt Trajectory Is Unsustainable

Fed Chair Janet Yellen Warns Congress: US Debt Trajectory Is Unsustainable:

“Let me state in the strongest possible terms that I agree” the U.S. federal debt trend is unsustainable, may hurt productivity, and living standards of Americans.

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The World Is Now $217,000,000,000,000 In Debt And The Global Elite Like It That Way

–  The World Is Now $217,000,000,000,000 In Debt And The Global Elite Like It That Way:

The borrower is the servant of the lender, and through the mechanism of government debt virtually the entire planet has become the servants of the global money changers.  Politicians love to borrow money, but over time government debt slowly but surely impoverishes a nation.  As the elite get governments around the globe in increasing amounts of debt, those governments must raise taxes in order to keep servicing those debts.  In the end, it is all about taking money from us and transferring it into government pockets, and then taking money from government pockets and transferring it into the hands of the elite.  It is a game that has been going on for generations, and it is time for humanity to say that enough is enough.

According to the Institute of International Finance, global debt has now reached a new all-time record high of 217 trillion dollars

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We Are Getting Very Close To An Inverted Yield Curve – And If That Happens A Recession Is Essentially Guaranteed

We Are Getting Very Close To An Inverted Yield Curve – And If That Happens A Recession Is Essentially Guaranteed:

If something happens seven times in a row, do you think that there is a pretty good chance that it will happen the eighth time too?  Immediately prior to the last seven recessions, we have seen an inverted yield curve, and it looks like it is about to happen again for the very first time since the last financial crisis.  For those of you that are not familiar with this terminology, when we are talking about a yield curve we are typically talking about the spread between two-year and ten-year U.S. Treasury bond yields.  Normally, long-term rates are higher than short-term rates, but when investors get spooked about the economy this can reverse.  Just before every single recession since 1960 the yield curve has “inverted”, and now we are getting dangerously close to it happening again for the first time in a decade.

On Thursday, the spread between two-year and ten-year Treasuries dropped to just 79 basis points.  According to Business Insider, this is almost the tightest that the yield curve has been since 2007…

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Central Banks Now Own A Third Of The Entire $54 Trillion Global Bond Market

This will surely end ‘well’.

Central Banks Now Own A Third Of The Entire $54 Trillion Global Bond Market:

Central banks own just over a third of the global tradable bond universe of $54 trillion, or roughly $18 trillion. How this amount of debt on bank balance sheets is ever unwound, i.e. sold without crashing the bond market, we don’t know.

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“Now The Pain Begins”: S&P, Moodys Cut Illinois To Near Junk, Lowest Ever Rating For A U.S. State

“Now The Pain Begins”: S&P, Moodys Cut Illinois To Near Junk, Lowest Ever Rating For A U.S. State:

“We’re going to start to see some real pain now,” Senate President John Cullerton told reporters in Springfield on Wednesday after both S&P and Moody’s downgraded Illinois to just above junk, the lowest ever rating for a US state. “We’re going to start to see downgrades. We don’t have any funding for schools. We don’t have any funding for higher end and a bunch of social programs.”

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AND NOW: In Watershed Event, Europe Unveils Plan To Securitize Sovereign Debt

This will “surely” end well.

In Watershed Event, Europe Unveils Plan To Securitize Sovereign Debt:

In a watershed event for the European – and global – bond markets, Brussels is pressing for sovereign debt from across the eurozone to be “bundled into a new financial instrument and sold to investors as part of a proposal to strengthen the single currency area.”  Call it securitized sovereign debt.

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Puerto Rico Files For Bankruptcy Protection In Largest Ever US Municipal Debt Restructuring

Puerto Rico Files For Bankruptcy Protection In Largest Ever US Municipal Debt Restructuring:

Puerto Rico will file for bankruptcy protection, Gov. Rosselló said on Wednesday, setting up a showdown with Wall Street firms owed billions of dollars in the largest-ever U.S. municipal debt restructuring.

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Trump To Order Corporate Tax Rate Cut To 15%, Loading Up To $2 TRILLION In Extra Debt

Trump To Order Corporate Tax Rate Cut To 15%, Loading Up To $2 Trillion In Extra Debt:

Ahead of Trump’s much anticipated tax announcement on Wednesday, the WSJ reports that the president has ordered his (mostly ex-Goldman) White House aides to accelerate efforts to create a tax plan “slashing the corporate rate to 15% and prioritizing cuts in tax rates over an attempt to not increase the deficit” which means that without an offsetting source of revenue, Trump is about to unleash the debt spigots, a proposal which will face fierce pushback from conservatives as it is nothing more than a continuation of the status quo under the Obama administration, and may well be DOA.

The WSJ adds that during an Oval Office meeting last week, “Trump told staff he wants a massive tax cut to sell to the American people” and that it was “less important to him if the plan loses revenue.”

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