Jan 27

GReeCe 2015...
Source

- Greece’s New FinMin Explains “This Is What Happens When You Humiliate A Nation & Give It No Hope” (ZeroHedge, Jan 27, 2015):

“This is not blackmail,” explains new Greek Finance Minister Yanis Varoufakis, “we simply want to end this seemingly never-ending Greek Crisis.” In what must be worryingly calm and simple to comprehend words for Brussels, Varoufakis tells CNBC’s Michelle Caruso-Cabrera, “this is what happens when you humilate a nation and don’t give it any hope.” Carefully noting that membership in the Euro is not imperative, Varoufakis concludes “bankruptcy cannot be dealt with by borrowing more,” asking rhetorically, “how can I look the German and Finnish taxpayer in the eye and tell them you know I can’t really pay you the money I have already borrowed from you…” but lend me more so I can pay back the ECB?

As Varoufakis explains, he believes Europe is willing to negotiate haircuts – anything else appears a waste of time.

(our apologies for the audio quality)

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Jan 27

casino-royale

- How Capitalism Dies (Acing Man, Jan 27, 2015):

In the early 1970s, there were about 200,000 new US businesses created each year (net of closures). Now, the number is negative. Why are Americans getting poorer? Look no further. No new businesses (net). No new jobs (again net). No new wealth. Under Obama and Draghi, crony capitalism flourishes. Real capitalism dies.

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Jan 27

Related info:

- Germany’s Bundesbank Resumes Gold Repatriation; Transfers 120 Tonnes Of Physical Gold From Paris And NY Fed

- Gold Held In NY Fed Vault Drops To Lowest In 21st Century After Biggest Monthly Withdrawal Since 2001


- The Mystery Deepens: Dutch Central Bank Denies Reports It Bought Gold For The First Time In 17 Years (ZeroHedge, Jan 27, 2015):

Overnight, there was much commotion in the precious metal space when, out of the blue, the IMF reported that months after announcing it had unexpectedly repatriated over 120 tons of gold from the NY Fed, the Netherlands had also purchased some 10 tons of gold in the open market, taking its total to 622 metric tons, the highest since 2007, a period in which it had been unchanged for 8 years.

This was promptly reported by both Reuters:

And Bloomberg:

The Netherlands added to its gold reserves for the first time since 1998 as the ninth-biggest holder boosted assets to the highest in seven years, while Russia bought for a ninth month, International Monetary Fund data show.

Bullion reserves in the Netherlands climbed to 20 million ounces or 622 metric tons in December, the highest since 2007, after being unchanged at 19.7 million ounces from December 2008 through November, the IMF’s website showed. Russia, with the fifth-biggest hoard, held 38.8 million ounces last month, the most in at least two decades, the data show. Continue reading »

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Jan 27

- 7 Quick Points on Europe (Salient Partners, Jan 26, 2015):

#1) Here are the most relevant recent notes for an Epsilon Theory perspective on the underlying political and market risks in Europe: “The Red King” (July 14, 2014) and “Now There’s Something You Don’t See Every Day, Chauncey” (Dec. 16, 2014).

#2) Markets reacted positively to last Thursday’s announcement because Draghi doubled the amount of QE that he leaked to the press on Wednesday. Financial media pegged QE at 600 billion euros on Wednesday and 1.2 trillion euros on Thursday. Once again, Draghi played the Narrative game like a maestro. Continue reading »

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Jan 27

Message From Greece To Troika
(Click on image to enlarge.)

- Greece’s New FinMin Warns “We Are Going To Destroy The Greek Oligarchy System” (ZeroHedge, Jan 25, 2015):

Over two years ago, we first highlighted Yanis Varoufakis’ perspectives on the destruction of Greece and Europe’s bogus growth pacts. Since then he has grown in both reason and popularity as his no-nonsense discussons of the mis-design of the euro (and potential solutions) have made him the front-runner to be Syriza’s new finance minister. Never one to  mince words or play politics, Varoufakis tells Channel 4’s Paul Mason in this brief (but chilling for Brussels) interview, what his party would do if it gets into government in Greece, and admits the prospect of power in Europe is “scary”. As he sums up, “we are going to destroy the Greek oligarchy system,” and with it, we suspect, much of the narrative that holds the fragile European Union together…

As Varoufakis previously explained,

The Troika is trying to suffocate us and to put pressure on the democratic choice by telling us: either you follow our requirements, or you will be cast into hell. Continue reading »

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Jan 26

poverty-rates-in-germany
Poverty index from 2007

- Millions of German workers in poverty (Deutsche Welle (DW), Jan 24, 2015):

More than three million Germans can barely make ends meet despite being in work, according to a German newspaper. Growing numbers of struggling workers are cutting back on heating and food.

About 3.1 million wage and salary earners in Germany had an income below the poverty threshold, according to Saturday’s edition of the Saarbrücker Zeitung newspaper.

The paper cited an overview from Germany’s Federal Statistical Office showing the most recent available data, which covered the year 2013. It also showed the numbers of workers struggling to make ends meet jumped from about 2.5 million in 2008 – an increase of 25 percent in five years. Continue reading »

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Jan 26

- Get Ready For Negative Interest Rates In The US (ZeroHedge, Jan 24, 2015):

With Fed mouthpiece Jon Hilsenrath warning - in no lesser status-quo narrative-deliverer than The Wall Street Journal - that The ECB’s actions (and pre-emptive collapse in the EUR) means the U.S. economy must deal with a rapidly strengthening dollar that will make American goods more expensive abroad, potentially slowing both U.S. growth and inflation; and Treasury Secretary Lew coming out his crypt to mention “unfair FX moves,” it appears The Fed (and powers that be) are worrying about King Dollar. This suggests, as Mises Canada’s Patrick Barron predicts, the Fed will start charging negative interest rates on bank reserve accounts as the final tool in the war on savings and wealth in order to spur the Keynesian goal of increasing “aggregate demand”. If savers won’t spend their money, the government will take it from them.

As The Wall Street Journal explains,

The European Central Bank’s launch of an aggressive program this week to buy more than €1 trillion in bonds poses important tests for the U.S. economy and the Federal Reserve.

Europe’s new program of money printing—and the resulting fall in the euro—means the U.S. economy must deal with a rapidly strengthening dollar that will make American goods more expensive abroad. Continue reading »

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Jan 25

- Greek Deposit Outflows Soar In Run-Up To Syriza Victory (ZeroHedge, Jan 25, 2015):

Despite all the fear-mongering by Nea Demokratia (ND), Syriza’s victory over the incumbent is dramatically larger than expected (exit polls indicate a potential 12 point margin vs 7 point spreads in the run-up). However, as JPMorgan details, the fear-mongery was very evident in bank deposit runs as proxied outflows surge EUR8 billion last week – more than all of December and the rest of January combined

Via JPMorgan Flows & Liquidity

Greek deposit outflows rise sharply this week

The monthly Bank of Greece balance sheet data for the month of December revealed a significant increase in Greek bank ECB borrowing which rose by €11bn in December to €57bn (including €1bn of Emergency Liquidity Assistance). This is more than the €3bn deposit outflow reported for December. It is thus likely that Greek banks had to borrow even more in December to offset not only their lost deposits but likely reduced access to private repo markets, as it happened before during Greek crisis. Continue reading »

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Jan 25

greece

- Tsipras Addresses Greece, Says Bailout Agreements, “Troika Era” Are Over (ZeroHedge, Jan 25, 2015):

The first public address of Greece’s new leaders, Alexis Tsipras has begun. The key highlights of his speech so far:

  • TSIPRAS SAYS GREEK PEOPLE HAVE WRITTEN HISTORY
  • TSIPRAS SAYS GREECE IS TURNING PAGE, LEAVING AUSTERITY BEHIND
  • TSIPRAS SAYS BAILOUT AGREEMENTS HAVE ENDED FOR GREECE
  • TSIPRAS SAYS TROIKA ERA IS OVER FOR GREECE
  • TSIPRAS SAYS SYRIZA GOVT READY TO NEGOTIATE, COOPERATE ON DEBT
  • TSIPRAS SAYS OLIGARCHS, ELITES IN GREECE HAVE BEEN DEFEATED
  • TSIPRAS SAYS SYRIZA VICTORY IS VICTORY FOR PEOPLES OF EUROPE

Europe will not be pleased.

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Jan 25

UPDATE 2:

50 reporting_0

UPDATE: Greek Government official admits electoral defeat by Syriza

As AP reports,

A senior official in Greece’s governing conservatives has conceded defeat to the radical left Syriza party in Sunday’s national elections.

“We lost,” Health Minister Makis Voridis told private Mega TV. “The extent of that result is not yet clear.”

Voridis, the conservative party’s parliamentary spokesman, says the government’s austerity policies, implemented to secure vital international bailouts, “make sense” but were cut short before they could bear fruit.

An exit poll on state Nerit TV projects Syriza winning by a wide margin.

- Greek Exit Polls Suggest Blowout Victory For Syriza: Live Webcasts From Greece (ZeroHedge, Jan 25, 2015):

The first Greek exit polls are out and here they are:

greek exit pol

According to the initial exit polls, in first place, with some 35.5%-39.5% of the vote is Syriza, a huge lead over the second placing New Democracy which has 23-27% of the vote – far more than polls had indicated previously – and a spot which essentially  assures Tsipras’ party an absolute majority in parliament and the ability to take as hardline an approach as he wishes.

The other parties: Continue reading »

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Jan 25

mario-draghi
ECB president Mario Draghi is presented with the Prussian spiked helment at Bild’s offices

- Bunch of Criminals! (The Automatic Earth, Jan 23, 2015):

I was going to start out saying Thursday was the saddest day in Europe in 50 years, or something like that, because of the insane and completely nonsensical largesse the ECB permits itself to launch, aimed at once again saving a banking system, but which will not only not help the European people, it will make things even much worse than they already are.

I’ve said many times that the EU in its present form should be dismantled tomorrow morning (even though it’s not the same tomorrow morning anymore), and if Draghi’s $1.1 million x million ‘stimulus’ should make anything clear, it’s that the dismantling gets more urgent by the day. Continue reading »

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Jan 25

Bazooka man Draghi, taking aim at the euro

- Bouncing Rubble (Alhambra Investment Partners, Jan 23, 2015):

The Keynesian revival that is currently underway in the backrooms and hallways of assorted world governments is being somewhat replicated in Europe this week. It is all predicated on the position that all previous forms of “stimulus” from the fiscal side were not the right size, composition or color for that matter and thus the lack of recovery can be attributed to the impurity of the Keynesian solutions. That is further augmented in especially the Krugman view of “austerity” which has supposedly undercut all the good deeds done by central banks.

Thursday’s press conference with Mario Draghi announcing the QE program ran dangerously into interfering with that Krugman view, while also keeping within the spirit of the “purity” argument. Toward the end of the question and answer session, the ECB’s chief was asked about hyperinflation, as if this latest balance sheet expansion might nudge Europe closer to Weimar. Continue reading »

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Jan 25

- Spot The Difference: Money Printing, Then And Now (ZeroHedge, Jan 24, 2015):

Hyperinflation-Weimar-USA

h/t @macroymercados

The global central bank balance sheet is even more concerning.

*  *  *

As to the hyperinflation question,

Draghi’s answer is simple: we have now thrown the kitchen sink at the deflation problem and there has been no inflation (he conveniently forgets to mention that the world is now caught in a vicious spiral in which every single central bank is printing money just to export deflation to its peers, with more and more printing necessary each year just to stay in one place). In other words, just because hyperinflation hasn’t materialized so far, it never will.

Or, as Bernanke would say: “Hyperinflation is contained.” Continue reading »

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Jan 24

Bazooka man Draghi, taking aim at the euro

- The Lunatics Are Running the Asylum: Draghi’s Money Printing Bazooka (Acting-Man, Jan 22, 2015):

Conclusion:

Given that already surging money supply growth rates in the euro area are now bound to increase at an even stronger rate, economic activity as measured by aggregate statistics is bound to pick up eventually. It is always important to keep in mind though that quantitatively measurable “activity” as such is not telling us anything about its quality. The boom prior to the 2008 crisis was also characterized by a measurable increase in “activity”, but as it turned out, most of it was merely a complete waste of scarce capital.

There is no reason to assume that this time will be different. These boom-bust sequences will continue until the economy is structurally undermined to such an extent that monetary intervention cannot even create the illusory prosperity of a capital-consuming boom anymore.

The bankers applauding Draghi’s actions today will come to rue them tomorrow.

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Jan 24

- Mario Draghi: Charlatan Of The Apparatchiks (David Stockman’s Contra Corner, Jan 22, 2015):

Well, he finally launched “whatever it takes” and that marks an inflection point. Mario Draghi has just proved that the servile apparatchiks who run the world’s major central banks will stop at nothing to appease the truculent gamblers they have unleashed in the casino. And that means there will eventually be a monumental crash landing because the bubble beneficiaries are now commanding the bubble makers.

There is not one rational reason why the ECB should be purchasing $1.24 trillion of existing sovereign bonds and other debt securities during the next 18 months. Forget all the ritual incantation emanating from the central bankers about fighting deflation and stimulating growth. The ECB has launched into a massive bond buying campaign for the sole purpose of redeeming Mario Draghi’s utterly foolish promise to make speculators stupendously rich by the simple act of buying now (and on huge repo leverage, too) what he guaranteed the ECB would be buying latter.

So today’s program amounts to a giant bailout in the form of a big fat central bank “bid” designed to prop up prices in the immense parking lot of French, Italian, Spanish, Portuguese etc. debt that has been accumulated by hedge funds, prop traders and other rank speculators since mid-2012. Never before have so few—-perhaps several thousand banks and funds—-been pleasured with so many hundreds of billions of ill-gotten gain. Robin Hood is spinning madly in his grave.

Continue reading »

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Jan 23

- Holder To Use Asset Forfeiture Seizure to Go After Guns:

- SocGen Explains That Since The ECB’s QE Will Fail, It Will Need To Be Increased To €3 Trillion, Include Stocks:

“The potential amount of QE needed is €2-3 trillion! Hence for inflation to reach close to a 2.0% threshold medium term, the potential amount of asset purchases needed is €2-3tn, not a mere €1tn. Should the ECB target such an expansion of its balance sheet, it would have to ease some conditions on its bond purchases (liquidity rule, quality…) or contemplate other asset classes- equity stocks, Real Estate Investment Trust-(REIT), Exchange-traded fund (ETF)…- as the BoJ, previously.”

- BREAKING: Email Shows Gov. Nixon Ordered National Guard OUT OF FERGUSON Before Riots & Destruction

Ferguson Mayor James Knowles told local FOX 2 anchors late on Monday night, November 25, 2014, that he had repeatedly requested the National Guard during the rioting and looting… But his requests were ignored by state Democratic leaders.

- ‘US government was subverting entire US constitution’ – NSA whistleblower:

Award winning whistleblower William Binney says his new job is to make the US government honest, make them face the truth publically, and to prevent further violation of the rights which America has never intended to stand for.

Congress alarmed by plans to use Russian system to route 911 calls:

Plans to route 911 location calls via Russia’s GLONASS satellite system have sparked national security concerns among some members of Congress, despite assurances that its use will be limited and it will help save lives in emergencies.

- Jobless Claims Over 300k For 3rd Week, Spike In Shale States:

Not “unambiguously good” as Shale states see initial jobless claims spiking. Overall initial jobless claims missed expectations for the 4th week in a row, holding above 300k for the 3d week in a row (for the first time since July). At 307k, this week’s print is below last week’s but well above the 300k expectation. However, across TX, CO, ND, PA, and WV, initial claims (1 week lagged) rose to over 75k (from 30k in October)… “crisis has passed”?

Continue reading »

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Jan 23

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Jan 23

- Bloomberg’s Handy Guide To Why Falling Prices Are Horrible For You (ZeroHedge, Jan 22, 2015):

With almost perfect comedic timing, Bloomberg unleashed the mainstream media’s Draghi-confirming raison d’etre for QE… explainining why – shock horror – deflation is bad for you. No matter that the QE efforts of The Fed (and BoJ) entirely (totally and utterly) failed to spark any increase in inflation expectations, we must try try try again. However, despite the exuberant disgruntlement with deflation that Bloomberg offers, Portuguese economy minister Guindos had something ‘odd’ to say this morning: “European deflation is positive.” We are sure he will issue some clarifying statement soon enough walking back such a dangerous and anti-authority comment. Continue reading »

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Jan 23

- What ECB QE Will Do For The World (In 1 Word & 1 Simple Chart) (ZeroHedge, Jan 22, 2015):

Nothing…

  • *DRAGHI SAYS TODAY’S MEASURES WILL BE EFFECTIVE
  • *DRAGHI SAYS TODAY’S MEASURES WILL BOLSTER INFLATION
  • *DRAGHI CITES SIGNALING EFFECT ON INFLATION EXPECTATIONS

Signal This!!

20150122_ECBQE

“Different this time?” or “Einsteinian Insanity”?

With The ECB set to announce a QE4EVA-esque bond-buying initiative within the next hour or two, we thought it worth looking at just what The Fed’s balance-sheet experiment did for inflation expectations (the key narrative that is driving Draghi’s decision) and economic growth (what every politician is demanding Draghi help with)…

The answer… Nothing!!

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Jan 22

Super Mario The Magician
Source


Mario-Draghi-Just-Evil

- Mario Draghi Unveils €60 Billion Per Month QE Through September 2016 With Partial Risk-Sharing: Live Conference Webcast (ZeroHedge, Jan 22, 2015):

From “whatever it takes” to OMT to “discussing” bond purchases, with European interest rates at record (incomprehensible) lows (apart from Greece) and EURUSD at 11-year lows (down 25 handles in the last 8 months), Mario Draghi looks set to unleash interventionist ‘hell’ on the investing public in Europe with EUR50 billion (plus plus) of ECB QE per month for as long as it takes.

Priced-in?

20150122_ECB

And then there’s this:

  • *MERKEL SAYS DEBT CRISIS ‘MORE OR LESS UNDER CONTROL,’ NOT OVER
  • *MERKEL SAYS ECB IS MAKING AN INDEPENDENT DECISION TODAY

Live Feed below (in case of error, here is a link to the source webcast): Continue reading »

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