Deutsche Skatbank, a division of VR-Bank Altenburger Land, which was founded in 1859, is not the biggest bank in Germany, but it’s the first bank to confirm what German savers have been dreading for a while: the wrath of Draghi.
Retail and business customers with over €500,000 on deposit as of November 1 will earn a “negative interest rate” of 0.25%. In less euphemistic terms, they have to pay 0.25% per annum to the bank for the privilege of handing the bank their hard-earned money or their business cash. Continue reading »
In this speech, Putin abruptly changed the rules of the game. Previously, the game of international politics was played as follows: politicians made public pronouncements, for the sake of maintaining a pleasant fiction of national sovereignty, but they were strictly for show and had nothing to do with the substance of international politics; in the meantime, they engaged in secret back-room negotiations, in which the actual deals were hammered out. Previously, Putin tried to play this game, expecting only that Russia be treated as an equal. But these hopes have been dashed, and at this conference he declared the game to be over, explicitly violating Western taboo by speaking directly to the people over the heads of elite clans and political leaders.
The Russian blogger chipstone summarized the most salient points from Putin speech as follows: Continue reading »
We are not exactly sure which is scarier: that total financial assets amount to about 500% of world GDP or that about $75 trillion in financial leverage is just sitting there, completely unregulated and designed with one purpose in mind: to make billionaires into trillionaires (with taxpayers footing the bill of their failure).
Two headlines came across my screens today, which taken together pretty much sum up the effects of policy decisions made by Central Bankers and politicians since the financial crisis. The financial oligarchs got bailed out, and the rich got richer due to decisions made by “leaders” around the globe. As such, the entire planet has now been transformed into a neo-feudal tinderbox. Myself and countless others warned all the way back to 2008 that this is what would happen, and here you have it.
Let’s first examine the results from Oxfam’s report on the billionaire growth spurt. I hope all 1,645 of you have sent thank you notes to the patron saint of oligarchy: Ben Bernanke. From NBC: Continue reading »
US investment bank JPMorgan pays its managing directors in London an average of £461,000 (US$737,877) per year – substantially more than any other bank in Britain’s financial epicenter.
Pay data service Emolument published a survey on Thursday showing that the average salary and bonus for JPMorgan managing directors is more than 13 percent higher than its second place rival, Deutsche Bank, which pays its managers an average of £402,000 ($644,000), Reuters reports. Continue reading »
This CNN interview with Bill was shot in a private hotel suite in Atlanta, GA in 1992. Bill details for the reporters the history and underlying causes behind the forces trying to subvert our Republic.
It appears it is time for some Hillary-Clinton-esque backtracking and Liesman-esque translation of just what the former Federal Reserve Chief really meant. As The Wall Street Journal reports, the Fed chief from 1987 to 2006 says the Fed’s bond-buying program fell short of its goals, and had a lot more to add.
Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases.
He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.
“Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.” Continue reading »
QE has finally come to an end, but public comprehension of the immense fraud it embodied has not even started. In round terms, this official counterfeiting spree amounted to $3.5 trillion— reflecting the difference between the Fed’s approximate $900 billion balance sheet when its “extraordinary policies” incepted at the time of the Lehman crisis and its $4.4 trillion of footings today. That’s a lot of something for nothing. It’s a grotesque amount of fraud.
The scam embedded in this monumental balance sheet expansion involved nothing so arcane as the circuitous manner by which new central bank reserves supplied to the banking system impact the private credit creation process. As is now evident, new credits issued by the Fed can result in the expansion of private credit to the extent that the money multiplier is operating or simply generate excess reserves which cycle back to the New York Fed if, as in the present instance, it is not. Continue reading »
*FED ENDS THIRD ROUND OF QUANTITATIVE EASING AS PLANNED
*FED SEES `SOLID JOB GAINS’ WITH LOWER UNEMPLOYMENT
*FED REPEATS RATES TO STAY LOW FOR `CONSIDERABLE TIME’
And so now the “flow” has stopped; given that “bond buying” did not work, we are reminded of Alan Greenspan’s warning that “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner. Full redline below.
Great Expectations, Pregnant Pandas and Last Wednesday’s Treasury Market
“I must be taken as I have been made. The success is not mine, the failure is not mine, but the two together make me.”
– Estella, Great Expectations
What sort of financial world is a world with no volumes, no volatility and steadily rising prices? The only historical example is perhaps the Soviet Union. When the marginal buyer of any product is the state, or its handmaiden the central bank, then simply nothing happens until the state comes out to play.Continue reading »
Ahead of tomorrow’s decision by the FOMC, Peter Schiff ventured on to CNBC to discuss the economy, the fed, and gold… among other things. Schiff rightly fears that while the Fed may well stop QE3 tomorrow, QE4 will not be too long behind it as he notes, rather eloquently, that “an economy that lives by QE, will die by QE” as the Fed’s total lack of willingness to allow stocks to fall (see Bullard 2 weeks ago) or a ‘cleansing’ recession leaves the nation’s economy in far worse shape than it was before the Fed’s intervention. Schiff calmly replies to the anchor’s questions (as she proclaims “I am not on the side of the Fed but…”), gently explains his view on gold when challenged about his ‘wrongness’, but when a guest starts hounding him for being dangerous to CNBC viewers wealth… Schiff (rightly) loses it – must watch!
A well reasoned discussion of the Fed’s manipulation of markets and mal-investment hangovers is well worth the price of admission… but at around 6:35 when Scott Nations unleashes his tirade on Schiff, the fireworks start to fly… and Schiff (while being shouted over) reminds guests, anchors, and viewers alike “Go to YouTube, I am wrong a lot less often than most people on this program… and all you do is hassle me” that he was among the very few appearing on CNBC before the crash who foresaw it and the cataclysmic shift that has occurred (no matter what the perception of short-term memory traders)…“Think of all the bulls you paraded out here when Nasdaq was 5,000″
Absolute must watch…
We can’t help but feel the timing of this tirade against Schiff is spookily prophetic and will be in its own YouTube class in a few years…
n a strangely familiar case of deja vu all over again, stocks surged (alone in the cross-asset class world of economic reality) on the day before an FOMC statement. The Russell 2000 has had its best 10-day run in 3 years, best day of the year, and managed to scramble back to its 100- & 200-day moving-average. Dow 17,000 was another key technical level that was achieved. S&P 500 was levitated on volume around 40% below average into the green for October. VIX was banged under 15 and tracked stocks. Away from the equity-vol complex, asset-classes were unimpressed – HY credit, bonds, JPY, and the USD all diverged from stocks. USD weakened slightly, and commodities all gained on the day. TSY yields were up 2-3bps and HY closed practically unchanged. “Most shorted” stocks rose almost 3% – the biggest squeeze since Dec 2011 – smashing the Russell 2000 higher.
When all else fails, and there is no growth, what you gonna call? Buybackbusters!
A week after IBM reported atrocious earnings, due to a variety of issues but most of all because it simply repurchased the least amount of stock in the past quarter in years (as it was approaching the limit of its buyback authorization), Big Blue is back to doing the one thing it does well: the buyback of things, in this case revealing its board has just authorized $5 billion in stock buybacks through April 2015 which means that with the $1.4 billion still under authorization, IBM is set to purchase about $3.2 billion in Q4 2014 and Q1 2015, each. And then, in April 2015, IBM will ask for an even bigger stock buyback authorization from its board. Which, clearly, the board – whose IBM stock will promptly rise as a result – will grant.
Who can forget China’s ghost city of Ordos: back in late 2009, when the hollow shell behind China’s torrid growth was first revealed to the world, the city near China’s Mongolia border was cooler talk for weeks. Fast forward five years later, and Ordos is all but forgotten, having been eclipsed by a veritable army of much bigger “ghosts” that make up the “ghost town network” – a list of cities created by the China Investment Network, a business newspaper in Beijing, to determine which cities were the most ghostly. Below we present the 10 biggest ones.
Following misses in yesterday’s Markit Service PMI, Existing Home Sales and the Dallas Fed report, and today’s Durable Goods numbers, we just made it a pentafecta for misses in US econ data, when the just released August Case-Shiller data for August confirmed once again that US housing is rapidly slowing down, when the Top 20 Composite Index (Seasonally Adjusted) posted another decline in August, its fourth in a row, declining by -0.15% and missing expectations of a modest 0.2% rebound (following last month’s -0.5%) decline. The best summary of the situation came from S&P’s David Blitzer: “The deceleration in home prices continues… The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities — Los Angeles, San Francisco and San Diego.” But who cares what the birth (and death) place of every housing bubble is doing, right?
Lately, there has been much anguished consternation, especially among the tenured US economics professors (primarily those who make 6-digits or more per year) and of course, the Federal Reserve where as we revealed last week, at least 113 government workers make $250,000 (excluding bonuses) and thus all are confined within the cozy cocoon of America’s “1%ers”, about the so-called complete disappearance and collapse in inflation. So to help these ivory tower-confined individuals in their holy grail to rediscover the inflation that is more than felt by the rest of America, here are two simple charts.
It is widely expected that the Federal Reserve is going to announce the end of quantitative easing this week. Will this represent a major turning point for the stock market? As you will see below, since 2008 stocks have risen dramatically throughout every stage of quantitative easing. But when the various phases of quantitative easing have ended, stocks have always responded by declining substantially. The only thing that caused stocks to eventually start rising again was a new round of quantitative easing. So what will happen this time? That is a very good question. What we do know is that the the performance of the stock market has become completely divorced from economic reality, and in recent weeks there have been signs of market turmoil that we have not seen in years. Could the end of quantitative easing be the thing that finally pushes the financial markets over the edge?
After all this time, many Americans still don’t understand what quantitative easing actually is. Since the end of 2008, the Federal Reserve has injected approximately 3.5 trillion dollars into the financial system. Of course the Federal Reserve didn’t actually have 3.5 trillion dollars. The Fed created all of this money out of thin air and used it to buy government bonds and mortgage-backed securities. Continue reading »
Despite the ban on short-sales – which has never worked in the past to do anything but instil fear in traders’ holding long positions – Italian banks are in free-fall following the utter failure of Draghi’s stress tests to encourage confidence in the European banking system.
INTESA, UBI, UNICREDIT, MONTE PASCHI SUSPENDED IN MILAN, LIMIT DOWN
Given the post-“whatever-it-takes” world of domestic sovereign bond-buying, it is no surprise that Italian govvie risk is jumping higher and the FTSEMIB is plunging.
“A relief rally would not be justified,” said Michael Woischneck, a portfolio manager at Lampe Asset Management in Dusseldorf, Germany. “There are still a lot of problems to fix, and Italian banks still have a lot of work to do. Even for the banks that passed, what is there to be relieved about? They still have to find a business model and figure out how to get unanswered questions that a stress test just cannot answer.”
Just as we warned last night was indicated by the Japanese market’s Brazil ETFs, so the IBOVESPA has opened down over 6% this morning on very heavy volume following the ‘disappointing for the bulls’ electionvictory of Dilma Rousseff. Despite her associations with Petrobras (which may have suggested it bounced), the favorite Jim Chanos short is being crushed, down 14% at the open. The Real is tumbling too, breaking above 2.54 to its weakest against the USD since Dec 2008.
WASHINGTON — In the decades after World War II, the C.I.A. and other United States agencies employed at least a thousand Nazis as Cold War spies and informants and, as recently as the 1990s, concealed the government’s ties to some still living in America, newly disclosed records and interviews show.
At the height of the Cold War in the 1950s, law enforcement and intelligence leaders like J. Edgar Hoover at the F.B.I. andAllen Dulles at the C.I.A. aggressively recruited onetime Nazis of all ranks as secret, anti-Soviet “assets,” declassified records show.They believed the ex-Nazis’ intelligence value against the Russians outweighed what one official called “moral lapses” in their service to the Third Reich.Continue reading »