-
http://www.businessinsider.com/the-euro-is-just-crumbling-and-the-dow-is-off-170-2012-6
I don;t know how the fuck US export won;t be destroyed with euro going down so much every other day...
-
From Bloomberg citing CNBC, which apparently is where Moody's leaked all its data
- MOODY’S TO UNVEIL BANK DOWNGRADE AT 4PM: CNBC
- CNBC SAYS B OF A L-T DEBT RATING TO BE CUT BY 1 NOTCH BY MOODYS
- CNBC SAYS CITI, JPM AND GS L-T DEBT RATING WILL BE CUT 2 NOTCH
So... this leaves Morgan Stanley with the dreaded 3 notch cut which automatically springs up to $9.6 billion margin calls and memories of AIG? Assume crash positions.
http://www.zerohedge.com/news/moodys-hammer-fall-4-pm
friday market will be nasty, unless the manipulate it to the 9th
-
Excessive dollar liquidity in the world, from a long
perspective, will drive up commodities prices eventually, lead to
disorderly cross-border flows of speculative funds, raise inflation, and
devaluate the huge dollar assets held by countries like China.
A number of countries, notably Russia, have expressed their strong
reservations towards the ultra-easing monetary policy in America.
For America itself, the effect of printing money on the real economy
is also dubious. In the past few years, the Federal Reserve has already
poured massive amounts of cheap dollars into its financial system, yet
the U.S. economy is still struggling.
As many have suggested, money-printing cannot pull America out of its economic and financial quagmire.
To cure its problems, the United States should, among many other
things, control its runaway fiscal deficits by cutting its gigantic
military spending and bloated entitlement programs. It should also rein
in the oversized financial sector and revitalize the "real economy."
http://news.xinhuanet.com/english/indepth/2012-06/21/c_131668016.htm
There is no political will to address actual problem. Banking regulation, misallocation of capital and industrial/trade policy.
-
I do think his defence of broken windows is facile, and I think the notion he has advanced that World War 2 ended the Great Depression is not just wrong but dangerous.
He’s a good polemicist; he defines himself through big, bold, wildly
partisan claims. But if he’s going to claim that he’s been right about
everything — as he just did — he might want to make sure he’s not
directly contradicting statements he made just a week previous.http://www.zerohedge.com/news/guest-post-krugman-claims-he-has-been-right-about-everything
well he is wrong about few things that is obvious to me...
1. what happen to war spending during vietnam era? (obviously it
created massive inflation/stagflation, no growth/employment. more spending didn't do anything
except grind economy to a halt. all pain no gain)2. He expects ben bernank to be able to out print and make the chines
blinks. Instead China swallow the inflation pain and hold the peg. It turns out everybody can print money just as good. Next
will be china's turn to use all those money to destroy dollar position
when the time come.3. He didnt explain why banksters decide to keep playing on the casino
(commodity price explosion) instead of expecting they will invest the new money on
something productive. This one I think will cost Obama his election.4. US will enter japan style lost decades..( not gonna happen. US is
closer to argentina after peg instead of japan after plaza accord.)5. he still hasn't explained how euro implosion will play out, by what way it will reach US if at all, and how the rest of world/global trade will behave in next 10-20 months... (very hard to predict, but they have to make political decision, because the whole thing will affect everybody in big way ...)
...then minor things like political corruption prevent willingness to clean up banks...
-
But this just-completed trial in downtown New York against three
faceless financial executives really was historic. Over 10 years in the
making, the case allowed federal prosecutors to make public for the
first time the astonishing inner workings of the reigning American crime
syndicate, which now operates not out of Little Italy and Las Vegas,
but out of Wall Street.The defendants in the case – Dominick Carollo, Steven Goldberg and
Peter Grimm – worked for GE Capital, the finance arm of General
Electric. Along with virtually every major bank and finance company on
Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS,
Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall
Street wiseguys spent the past decade taking part in a breathtakingly
broad scheme to skim billions of dollars from the coffers of cities and
small towns across America. The banks achieved this gigantic rip-off by
secretly colluding to rig the public bids on municipal bonds, a business
worth $3.7 trillion. By conspiring to lower the interest rates that
towns earn on these investments, the banks systematically stole from
schools, hospitals, libraries and nursing homes – from "virtually every
state, district and territory in the United States," according to one
settlement. And they did it so cleverly that the victims never even knew
they were being cheated. No thumbs were broken, and nobody ended up in
a landfill in New Jersey, but money disappeared, lots and lots of it,
and its manner of disappearance had a familiar name: organized crime.In fact, stripped of all the camouflaging financial verbiage, the
crimes the defendants and their co-conspirators committed were virtually
indistinguishable from the kind of thuggery practiced for decades by
the Mafia, which has long made manipulation of public bids for things
like garbage collection and construction contracts a cornerstone of its
business. What's more, in the manner of old mob trials, Wall Street's
secret machinations were revealed during the Carollo trial
through crackling wiretap recordings and the lurid testimony of
cooperating witnesses, who came into court with bowed heads, pointing
fingers at their accomplices. The new-age gangsters even invented an
elaborate code to hide their crimes. Like Elizabethan highway robbers
who spoke in thieves' cant, or Italian mobsters who talked about
"getting a button man to clip the capo," on tape after tape these Wall
Street crooks coughed up phrases like "pull a nickel out" or "get to the
right level" or "you're hanging out there" – all code words used to
manipulate the interest rates on municipal bonds. The only thing that
made this trial different from a typical mob trial was the scale of the
crime.http://www.zerohedge.com/news/taibbi-back-scam-wall-street-learned-mafia
-
(2) Q: How Should Greece Balance Its Taxes and Its Government Spending Going Forward?
A: That's nobody's business but the Greeks'. It would, however, be
nice if they would stop spending money like water in an attempt to
maintain "strategic parity" vis-a-vis Turkey in the Aegean.(3) Q: How Should Greece Balance Its Spending on Imports and Its Exports Going Forward?
A: Borrowing to cover the gap between imports and exports that
exists at current exchange rates and price and wage levels is not going
to happen, so Greece has a choice between (a) deep prolonged depression
to make Greeks too poor to afford imports, (b) Grexit, devaluation, and a
subsequent export boom, and (c ) Germans opening up the monetary
spigots to produce higher inflation in northern Europe and meanwhile
giving Greece an additional fortune to keep the pain in Greece low
enough for adjustment to take place within the Eurozone framework.(4) What Will Happen If Greece Exits the Euro?
A: Germany will then have a choice between (d) a Great Depression
in Europe, and (e) a much bigger inflation in Europe and a much larger
fortune given away to cushion adjustment than would be needed to make (c
) work.http://delong.typepad.com/sdj/2012/06/answers-to-five-easy-euroquestions.html
-
ARLINGTON, VA — The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire truck
Tonnage Index decreased 0.7% in May after falling 1.1% in April.
(April’s loss was the same as ATA reported on May 22.) The latest drop
lowered the SA index to 117.8 (2000=100), down from April’s level of
118.7. Compared with May 2011, the SA index was 4.1% higher, the largest
year-over-year increase since February 2012. Year-to-date, compared
with the same period last year, tonnage was up 3.8%.The not seasonally adjusted index, which represents the change in
tonnage actually hauled by the fleets before any seasonal adjustment,
equaled 124.5 in May, which was 6.5% above the previous month.“Two straight months of contractions is disappointing,” ATA Chief
Economist Bob Costello said. “The drops in tonnage are reflective of
the broader economy, which has slowed.”http://www.businessinsider.com/trucking-industry-confirms-the-economy-has-slowed-2012-6
-
Brazil-China to Sign $30 Billion Currency Swap Agreement Soon
Brazil and China will sign an
agreement in the coming weeks to swap as much as $30 billion in
their two currencies, Brazil Finance Minister Guido Mantega
said.The currency swap, worth 60 billion reais or 190 billion
yuan, will be the first step in a broader agreement with Russia,
India and South Africa to allow members of the so-called BRICS
group of emerging markets to pool resources to better weather
the global financial crisis, Mantega told reporters yesterday in
Rio de Janeiro.BRICS nations explore options to protect currencies
Los Cabos (Mexico), (IANS) India, Brazil, Russia, China and South
Africa Monday explored mechanisms, such as swap arrangement and a
reserve fund. to protect their currencies against external risks.The mechanisms were discussed during an informal meeting hosted by
Prime Minister Manmohan Singh among the leaders of BRICS nations on the
margins of the G20 Summit here, according to a statement issued Monday.“They (G20 leaders) agreed to ask their finance ministers and central
bank governors to work on this important issue, in a manner compatible
with internal legal frameworks, and report back to the leaders at the
2013 BRICS Summit.”http://nvonews.com/2012/06/19/brics-nations-explore-options-to-protect-currencies/
the effect of these will show up soon enough in dollar international flow.
-
Over the last few weeks markets have
recovered from the significant stresses that were building towards the
end of May (until yesterday's slow realization). The recovery has been
in no small part due to expectations of intervention and that fresh
rounds of QE and their equivalents will soon be implemented around the
developed world. Deutsche Bank believes that markets are now addicted to stimulus and can’t function properly without it.
There is little evidence yet to suggest that markets in this post
crisis world have the ability to prosper in a period without heavy
intervention, though empirically asset prices benefit from liquidity but
that the environment remains fragile enough for them to struggle to
maintain their levels when the liquidity stops. Critically, they agree
with us that the structural problems the West faces mean that
QE and its equivalents and refinements will likely need to be around
for several years to come to ensure that the financial system and its economies don’t relapse into a depressionary tail-spin. There is no evidence that we are currently close to being able to wean ourselves off our liquidity addiction.
The hope would be that with further injections we can prevent the
worst case scenario but the base case remains for the stress and
intervention cycle repeating itself as far as the eye can see. Central
banks still have much to do.
http://www.zerohedge.com/news/diagnosing-liquidity-addiction
they won't be able to stop printing money ...
-
Takeshi Kurihara, director of the Regional
Financial Cooperation Division of the Finance Ministry, who has taken
part in that process, noted at the 2011 annual conference of the Chinese
Society of World Economics that an agreement on deeper financial
cooperation is feasible among East Asian countries, though it will take a
long time due to differences in political systems and stages of
economic development. He said the past 10 years were for founding and
organizing the CMI, and that the next 10 years would be for maturing it.
Now, ASEAN-plus-3 once again is facing a
serious crisis. Vice Minister of Finance for International Affairs
Takehiko Nakao said in a lecture at Peking University in March: "Our
experience at the time of Lehman crisis (fall 2008) and the latest euro
crisis shows that, in such crises, interbank funding markets can become
clogged and U.S. dollar liquidity can drain very rapidly. We must avoid
situations where smooth financing for trade and investment in Asia is
hindered and the real economy is negatively impacted just because of
difficulties in U.S. dollar liquidity. We need to work on promoting the
use of our own currencies in the region."
AMRO Director Wei Benhua said his office
would play its part to help safeguard ASEAN-plus-3 from global
uncertainties and to contribute to the region's stability, growth and
prosperity. Japan and China are working together on upgrading their
financial cooperation to a level that secures the stability of East
Asian economies
China made up for its plummeting exports in
the wake of the 2008 Lehman Brothers crisis by implementing a 4 trillion
yuan fiscal stimulus package. However, it is essential for China to
move from the export-oriented growth model to a new growth model in
which exports, consumption and investment are better balanced.
This process requires difficult structural
http://www.japantimes.co.jp/text/eo20120622mi.html
reforms of the Chinese economy and, therefore, much time. Fortunately
the expansion of Asia's middle-income population offers new growth
opportunities for all of Asia. As Chinese Vice Premier Li Keqiang said
at the Boao Forum for Asia on April 2, China has no alternative except
to grow together with other Asian nations. Japan also is seeking to take
advantage of Asia's growth.
at what point will all these steps to reduce dollar exposure become irreversible decline of dollar use in international trade? sooner or later there will be a critical point, enough people waking up one morning and ask "why do we need to hold so much dollar for?"
-
Japanese Solar Boom? Toshiba Announces 100-MW Solar PV Plant Near Fukushima
Osaka Gas to build 3 mega solar power plants in western Japan
The combined output capacity of the plants will come to 3.5 megawatts,
which is equivalent to the combined consumption of 915 households, Osaka
Gas said, adding that all the electricity to be generated will be sold
to electric utilities.japan going solar... see how fast they will get 'there' .. faster than germany I bet.
-
As we discussed earlier, markets remain mired in their addiction to
liquidity and the global macro-picture seems synchronized to this
central bank largesse with an inability to function without at least the
hope of more QE around the world. Nowhere is this more clear than in
the extreme high levels of correlation across global risk assets.
Barclays notes that the correlation between global equities, the USD,
emerging market FX, high-grade credit, and commodities remains near
cyclical highs and rising. Furthermore, 'safe haven' correlations are at record levels relative to risk assets
(especially US Treasuries) and they remain tactically biased to fade
any rally here as the correlations have driven an 'extreme valuation
gap' between 'safe haven' and risky assets - which creates a strong
potential for 'spasmodic relief rallies'.Financial markets remain macro-driven...
http://www.zerohedge.com/news/risk-markets-remain-macro-driven
have more war, that will create good investment climate and price certainty... don't forget to print more money..!
Golden age of world trade...yay...prosperity just around the corner...NOT...
-
Just when the geopolitical tensions in the
middle east appeared to be abating, and Brent was on a gentle
glideslope to whatever price will greenlight the NEW QE now that fears
of an Iran war have been very much silenced, things change. Reuters reports that Syria shot down a Turkish warplane on Friday, according to Lebanon's al-Manar television reported,
"risking a new crisis between Middle Eastern neighbours already at
bitter odds over a 16-month-old revolt against Syrian President Bashar
al-Assad." "Syrian security sources confirmed to a Manar correspondent
in Damascus that Syrian defence forces shot down the Turkish fighter
jet," the Hezbollah-owned channel said." Here is the rub: Turkey is a NATO member,
and by definition the alliance will have to come to Turkey's aid if
requested. Syria, however is not just any country as has been made
quite clear over the past several months of UN impotence: it is a
critical staging ground for both Russia (which has a very critical
regional naval base in the city of Tartus) and China, and according to the Jerusalem Post,
the three countries are in preparation to conduct the "largest ever"
war game. As such Syria, already gripped by fierce local fighting, where
just like in Egypt and Libya the presence of US-based flipflop on the
ground can be smelt from across the Atlantic, is merely a symbol. The
real implication is how far can little escalations push until finally
the showdown begins, with NATO on one side and Russia and China on the
other?
http://www.zerohedge.com/news/syria-shoots-down-nato-member-turkeys-military-f-4-jet
http://www.hurriyetdailynews.com/syria-apologizes-for-taking-down-turkish-warplane-turkish-pm.aspx?pageID=238&nID=23802&NewsCatID=341
Is it false flag time already? that didn't take long... what's next? polish border incidence forcing forcing german invasion of poland? meh .... war is a racket. I chuck this one in the same file a Cheonan sinking.
It's just prelude to July war.. watch the usual suspect. the usual TV theaters freedom, democracy, saves women children, babies.. bucket of fake tears...
-
If you want to know what's really going on, listen to the executives
of companies that actually produce and sell things. On May 24, Tiffany
& Co cut its fiscal-year sales and profit forecasts blaming "slowing
growth in key markets like China and weakness in the United States as
shoppers think twice about spending on high-end jewelry."18
On June 8th, McDonald's surprised the market with lower than expected
same-store sales growth in May, following a lacklustre April sales
report that the company stated was "largely due to underperformance in
the United States, where consumers continue to seek out very low-priced
food."19, 20 On June 13th, Nucor Corp., the
largest U.S. steelmaker by market value warned that its second-quarter
profit will miss its previous guidance after a "surge" in imports
undermined prices and "political and economic uncertainty affect buyers'
confidence".21 On June 20th, Proctor and Gamble lowered its
fourth quarter guidance and profit forecast for 2012. Factors that drove
the company's challenges included "slow-to-no GDP growth in developed
markets", high unemployment levels, significant commodity cost increases
and "highly volatile foreign exchange rates".22 Other
companies that have recently lowered guidance include Danone, Nestle,
Unilever, Cisco Systems, Dell, Lowe's, and Fedex. It's ugly out there,
and many companies are politely warning the market about the type of
environment they foresee ahead in both the US and abroad.To give you a hint of how bad it is in Europe today, the most recent
retail sales out of Netherlands showed a decline of 8.7% year-over-year
in April.23 In Spain, retail sales fell 9.8% year-on-year in April, which was 6% greater than the revised drop of 3.8% in March.24
Declines of this magnitude are not normal occurrences and signal a
significant shift in spending within those countries. We fear this is a
sign of things to come within the broader Eurozone, which will only
serve to complicate an already dire situation that much more.The G6 central banks are out of conventional tools to solve this
financial crisis. With interest rates at zero, and the thought of
further stimulus rendered politically unpalatable for the time being, we
cannot see any positive solutions to this problem other than debt
repudiation. We continue to note the contrast between the reporting
companies who by law cannot lie about their fiscal realities, versus the
central planners who admit that they MUST lie to preserve calm and
control. We'll leave it to you to decide whose version of the truth you want to believe.http://www.zerohedge.com/news/eric-sprott-presents-ministry-untruth
don't worry another war is coming...
-
Does Syria Want A War?
We know for sure that Syria intentionally shot down a Turkish — and
thus protected by NATO — warplane in its airspace. We also know that
Syria is comfortable enough to admit it.Syria said Friday it shot down a Turkish military plane that entered Syrian air space, and Turkey vowed to “determinedly take necessary steps” in response.
It was the most clear and dramatic escalation in tensions between the
two countries, which used to be allies before the Syrian revolt began
in March 2011. Turkey has become one of the strongest critics of the
Syrian regime’s brutal response to the country’s uprising.Late Friday, Syria’s state-run news agency, SANA, said the military
spotted an “unidentified aerial target” that was flying at a low
altitude and at a high speed.“The Syrian anti-air defenses counteracted with anti-aircraft
artillery, hitting it directly,” SANA said. “The target turned out to be
a Turkish military plane that entered Syrian airspace and was dealt
with according to laws observed in such cases.”http://www.zerohedge.com/news/guest-post-does-syria-want-war
the prospect of coming out at the other side of war isn't all that bad for syrian. It's slow motion, grinding with UN ala Libya that will kill them.
probably.. as soon as NATO begins bombing, then all is fair. 1. Saudi oil is a goner. Syria will start penetrating Saudi and blowing up stuff and destabilizing Saud regime. 2. Iran closed persian gulf. 3. Kuwait, UAE, bahrain, etc are all naturally will be in state of war as well. 4. Libya is offline too. 5. North africa turns unstable. 6. Russia, Iraq, Venezuela will take political/oil supply position.
with this within a day, 60-80% oil supply of the world grinds to a halt. Price spikes to $150-200. entire NATO economy dies without a single bullet lands in europe. total world economic collapse. TBTF banks will implode within weeks as massive money being moved about, definitely out of their accounts.
The big point, Saudi regime is much weaker than people know. And on it rest entire petro dollar/US economy.
after that it's war of attrition, 5 months, 5 years...however long it takes..
Syria's big point is this: Israel needs to get pass their air defense to bomb Iran. (they tried a couple dry runs before. Greece S-300, UAV, bombing Syrian north border, Georgian revolution/air strip, etc) all that was an attempt to fly all the way to Iran.
my take: since the Turkish is running in circle and not announcing official demand, it's obvious they have lost momentum and it was their plane penetrating Syrian territory. I bet Syria has very strong proof too.
-
NATO to meet on Syria's downing of Turkish plane
http://www.usatoday.com/news/world/story/2012-06-24/turkey-nato-syria/55792640/1
this is going to be a big war... very big. world's geopolitical landscape is about to be completely redrawn after the dust settled.
So much for that nobel peace prize ...
-
Fallout of war.
1. dollar will be tight. Since general worldwide slowdown is expected from major oil flow disruption, everybody will hold on and start absorbing dollar to prepare for any sudden liquidity shock. I expect dollar will start climbing soon.
traditional safe heaven like NZ, OZ and swiss will see their currencies turning into bubble as hot money enters, destroying their export. setting up for big bust when money flowing out.
2. ben bernak printing money is now virtually assured, unless he wants US economic collapse due to very tight liquidity.
3. critical raw material flow will be redrawn. shipping flow through middle east will be affected (remember syria-greece, suez are all having some sort of problem... not to mention Israel, Libya, cyprus...etc)
4. price of grain, cotton, etc will climb, while things like Iron will slump. China slowdown now is pretty sure. (they have to slow down and rearrange their export-import flow)
5. all weak banks now will experience even harder time attracting capital. Belgium, Spain, Italy, Portugal, Ireland, etc are definitely bust now... europe is now a basket case. More so if Russia decide to fuck it all. and step of Europe to stop doing what they are doing.
6. The minute things blowing up in Saudi and iran closing persian gulf, all bets are off... (can''t see how it will reach that level yet at the moment, but it will go there eventually within few weeks if things keep getting hotter in Syria.)
in case of persian gulf war... then the world will be divided into dollar zone, europe, and Asia. with entire middle east blowing up. Latin america and sleepier part of asia will be the place to be.
Things to watch...Hillary clinton (is she grinning on TV? if so we are fucked. expect something really dumb happening leading to total collapse of european banking system.)... second, What is NATO doing? are they doing Libya rehash?
This is bigger than france election (which did redraw everybody's position, juse from austerity/or not question, leading to accelerating collapse in spain)
-
FSC Vice Chairperson Urges China to Allow Taiwanese Banks Undertaking Renminbi Businesses
Taipei, June 22, 2012 (CENS)--Lee Jih-chu, vice chairperson of Financial
Supervisory Commission (FSC), urged yesterday (June 21) the Chinese
regulator to quickly allow Taiwanese-invested banks to undertake
renminbi-related businesses and relax the definition of
Taiwanese-invested enterprises, so that more Taiwanese businesses can
benefit from the service of Taiwanese banks.
http://cens.com/cens/html/en/news/news_inner_40521.html
last big pacific economy not yet integrated to direct yuan.
-
Remember what we said on Friday:
"The only question remains whether Syria's act was offensive or
defensive. Naturally, its version is one of self-defense. Turkey
obviously will claim it was in its right to be wherever the plane may
be, and will say this was an act of provocation. Then NATO, read Hillary
Clinton, will promptly step in, and make this a case in which Turkey
was in its right and that Syria committed an act of aggression. From
there, things will just escalate, and can potentially deteriorate to a
far more troubling scale, because as we reminded earlier, Syria has
recently become a major symbol for NATO vs the Russia-China axis." And
sure eno
http://www.zerohedge.com/news/nato-member-turkey-says-syrian-jet-take-down-hostile-act
This is exact replay of Cheonan sinking with Libyan gambit twist.
-
The shooting down of a Turkish fighter
aircraft by Syria on Friday has become a classic
case of coercive diplomacy.
A Turkish F-4
Phantom fighter aircraft disappeared from radar
screens shortly after taking off from the Erhach
airbase in Malatya province in southeastern Turkey
and entered Syrian airspace. According to Syrian
Arab News Agency (SANA), air-defense forces shot
down the plane 1 kilometer off the coast from the
Syrian port city of Latakia. A Turkish
search-and-rescue aircraft rushed to the area of
the crash but came under Syrian fire and had to
pull out.
The Russian naval base at Tartus
is only 90 kilometers by road from Latakia. The
incident took place on a day that Syrian Foreign
Minister Walid al-Moualem was on a visit to
Russia.
http://www.atimes.com/atimes/Middle_East/NF26Ak02.html
It's a planned aggression. It's not like Turkey and Syria both don't know if a plane takes off from that air base. My question now, why now? why not next week? There are still few more days until July war schedule.
-
Harder Times Coming For Brazil, Says Bank For International Settlements
Brazil is not going to escape the onrushing collapse of the
developed economies, warns the Central Bank of Central Banks, known as
the Bank for International Settlements.In its 214 page annual report
released over the weekend, BIS said that Brazil and India, in
particular, would suffer an accentuated decline in economic growth due
to the problems in the Western powers, most notably in Europe.They are trying to pressure BRIC. I think BRIC will answer this pressure by accelerating currency transition and accumulating dollar at the same time, a toxic brew for dollar liquidity in light of european crisis.
-
India Increases Foreign Debt Ceiling by $5 Billion to Stem Rupee’s Slide
India has increased the amount of
rupee-denominated debt overseas investors can own to arrest a
slide in the currency, which sank to a record low on June 22.BRICs Biggest Currency Depreciation Since 1998 to Worsen
Investors are fleeing the four biggest emerging markets,
known as the BRICs, after Brazil’s consumer default rate rose to
the highest level since 2009, prices for Russian oil exports
fell to an 18-month low, India’s budget deficit widened and
Chinese home prices slumped. Investors are bracing for more
losses as economic growth slows.“I am quite bearish,” Stephen Jen, a managing partner at
hedge fund SLJ Macro Partners LLP and a former economist at the
International Monetary Fund, said in a phone interview from
London. “When the global economy and capital flow slow down,
it’s going to expose a lot of problems in these countries and
make people stop and ask questions. A run on the currency could
be particularly ugly.” -
Turkey Claims Syria Fired On Second Turkish Jet, Says "Act Won't Go Unpunished", Has Invoked NATO Articles 4 And 5
too much bluster, it means they got nothing. Otherwise they would have line up their tank and ship on the border already. I am willing to be at this very moment a thick Syrian report is heading toward UN indicating turkish plane is clearly inside their territory.
-
China offers credits for investment
from Taiwan
By Robert M Cutler
MONTREAL - Four Chinese state banks will
offer up to US$95 billion in credit to Taiwanese
investments in business on the mainland, the
director of Beijing's Taiwan Affairs Office Wang
Yi told a conference in Xiamen, Xinhua has
reported.
The move is part of a limited
domestic economic stimulus program targeting
infrastructure projects and consumer staples and
including attempts to ensure lenders' liquidity in
order to free up capital for investment and job
creation on the mainland.
Such investment
will be all the more necessary in view of
Thursday's announcement by HSBC/Markit that the
preliminary ("flash") reading of China's
purchasing managers' index (PMI) for June has
fallen to 48.1, the eighth consecutive month of
decline, and tying the August 2008 and March 2009
slump, which was the longest on record. (The
50 level is neutral and anything below it
signifies economic contraction).
http://www.atimes.com/atimes/China_Business/NF23Cb01.html
$95B !. cold hard cash always work... lol
-
http://www.zerohedge.com/contributed/2012-06-25/us-dollar-euro-dm-1999-yen-and-sterling-depreciation-against-gold-1900
Yen!... Not debasing it too well japan... print faster... har har...
-
Japan firms go on shopping spree
Japanese financial institutions are increasing their purchases of
affiliates or businesses from U.S. and European counterparts following
the European debt and financial crisis.The trend is likely to continue, as Japanese financial institutions
incurred much smaller losses in the European crisis than their U.S. and
European counterparts, and the extremely high yen works to their
advantage in such acquisitions.However, there are hurdles to overcome, including how the Japanese companies should manage operational risk overseas.
http://www.yomiuri.co.jp/dy/business/T120625003843.htm
Yen is bubbling up agaaaaiiiiinnnnn......
-
Deutsche Bank Hides The Hopium: "The Next Recession Should Start By The End Of August""If this US cycle is of completely
average length as seen using the last 158 years of history (33 cycles)
then the next recession should start by the end of August."
Richmond Fed Plunges; Consumers Underconfident For The Fourth Month In A Row
----------------------
whatever it is, now the european banks have to retract and conserve capital, slowing lending considerably. Asia is turning cautious. Not with all sort of war and energy spikes going on all over. Reducing dollar exposure without raising local currency becoming more urgent (bilateral swap, using more of local currencies, etc. All this slowing dollar velocity in international trade.)...in other word........Ben bernank has to print more money... which naturally lead to higher commodity price and increasing casino capitalism... slowing economy even further.
-
Private Wealth Fuels Record Singapore-Dollar Bond Sales
Singapore-dollar bond sales rose to
a half-year record as private-wealth clients in the city-state,
which has the world’s highest density of millionaires, sought
refuge in the local currency.Genting Singapore Plc (GENS), Asia’s second-biggest casino
operator by market value, and Keppel Corp. lead a 44 percent
increase in issuance this year to S$15.7 billion ($12.3
billion), compared with the second half of 2011, data compiled
by Bloomberg show. Private-banking investors bought as much as
35 percent of Singapore-dollar notes this year, about twice as
much as two years ago, according to Deutsche Bank AG. (DBK)reducing dollar exposure
-
The numbers are stunning. Central banks, the report points out,
printed $18 trillion “and counting” to buy often crappy assets that are
now decomposing on their balances sheets—”roughly 30% of global GDP.”
Though it’s been nearly four years of zero interest rate policy
(ZIRP) and serial Quantitative Easing (QE), the global economy is
becoming more unbalanced, “and a safe financial system still eludes us,”
the report said. Big banks continue to jack up leverage “without enough
regard for the consequences of failure” because “they expect the public
sector to cover the downside.” Leverage and trading have pushed the
financial sector “towards the same high risk profile it had before the
crisis.” And yet, there was good news: “Pessimism has become tiresome,
so optimism is gaining a foothold.”http://www.zerohedge.com/contributed/2012-06-26/worldwide-qe-quagmire
basically these fuckers are just printing money...
-
http://etfdailynews.com/2012/03/27/is-inflation-a-stagnant-economy-and-lower-standard-of-living-in-our-future-gld-slv-iau-sgol-uup/
all this is going to get MUCH WORST...MUCh more so... (observe the euro-dollar fluctuation simply because all those banks need to repatriate asset to patch the hole back home. And those are just hot money, wait until asian "real money" being pulled out from dollar zone. while at the same time maintaining peg. be very scared.)
-
First, I really, really don’t understand people who deny that we’re in a liquidity trap. As I’ve tried to explain in various ways,
the hallmark of such a trap is that at the margin people hold money not
for its moneyness but simply as a store of value, and that therefore
conventional monetary policy — which involves swapping money for
non-money assets like Treasury bills — has no effect, because it’s just
replacing one zero-interest asset with another.
As confirmation, consider this LA Times report on surging bank deposits;
basically, people are holding monetary assets simply as a safe place to
park their wealth, and the banks have no desire to put those funds to
work.
You can also see this in the data. Look at the velocity of
M2 — the ratio of nominal GDP to Milton Friedman’s preferred measure of
the money supply. Monetarism rested on the assumption that there was a
reasonably stable relationship between M2 and GDP; what’s happening now
is that deposits are piling up but going nowhere, so velocity (which
rose in the 90s thanks to the rise of shadow banking) has plunged:http://www.econ.washington.edu/user/te/blog/post/2011/09/20/The-Case-For-The-Liquidity-Trap.aspx
-
While size isn't everything, it is something. A large expansion in a
central bank's balance sheets can create broad policy risks. This study by researchers at the St. Louis Fed
suggests that large-scale balance sheet increases are a viable monetary
policy tool, provided the public believes the increase will be
appropriately reversed (citing the experience of Nordic countries in the
early 1990s) or that the reserves created by the expansion will remain
within the banking system (citing changes to bank settlement systems in
the United Kingdom and New Zealand in the mid-2000s).
New York Fed President Bill Dudley touched on some risks in an interview on CNBC today:
"...We've expanded our balance sheet a lot over the last few years. And
additional actions do have costs, and so we have to weight them relative
to the benefits...
"One set of cost is the extent we expand our balance sheet or we sell
short-dated treasury securities and buy long-dated treasury securities,
we have more risk, in terms of our portfolio, interest rate risks...
"The second issue, of course, is if we expand our balance sheet, we
could create anxiety among some people that this might actually sow the
seeds for future inflation. I don't think expansion of the balance
sheet, in any way, compromises the Fed's ability to keep inflation in
check over the longer term. But it doesn't matter just what I think. If
people in the market think that expansion of the balance sheet could
cause future inflation, we have to take those expectations into
consideration as a potential cost of monetary policy."
http://macroblog.typepad.com/macroblog/2012/05/relative-expansion-of-central-banks-balance-sheets.html
-
http://www.econ.washington.edu/user/te/blog/post/2011/02/11/Swap-Meet.aspx
how fast will this mis matched destroy everything?
-
“Making a jump from the dollar to a new international currency
requires a substantial portion of people to switch in close concert;
otherwise the network benefits are lost,” reminds Fed.
The
reserves trend since the 2007 Great Recession is clearly negative, a
period during which the value of the dollar ossified… and that has many
critics worried that the switch in “close concert” gets to be closer as
the purchasing value of the dollar weakens to the point that all those
holding it are convinced that they may be better off with another
currency. -
The American Chemistry Council's chief economist Kevin Swift created a
'Chemical Activity Barometer' which tracks chemical production and
prices, hours worked at producers, and manufacturing output among other
factors. As indicated in today's Bloomberg Chart-of-the-Day, this
indicator, based on its 'earliness in the supply chain' provides
a signal that "the outlook for the economy is slowing during the next
six to nine months" since 96% of manufactured goods are derived in part
from materials produced by the US chemical industry.
Three-month declines of 3% or more have preceded all but one recession
since 1947 and it is currently down over 2.5% from its highs in March
suggesting sub-par growth is coming.
http://www.zerohedge.com/news/supply-chain-slowdown-signals-us-economic-slump-ahead
amazing. how they fuck up is simply amazing.
-
Remember the days when Chinese banks used to routinely drain dollars
from Chinese corporates? The days when the Chinese corporate sector was a
net dollar seller?Those days, it seems, may have very abruptly come to a halt.
Consider the following chart from Standard Chartered on Tuesday. It
makes quite an impact (specifically the light blue component):
At best, the chart shows that China’s dollar position has become
balanced over the last half year. That the dollars China takes in
through exports cover the country’s dollar import costs, but that’s all.
There are no surplus dollars leftover for reinvestment.This, by the way, is how Standard Chartered’s analysts interpret the data.
They say it’s significant because it shows that we are “in a different world than in 2005-11″.
http://ftalphaville.ft.com/blog/2012/06/26/1060301/chinas-amazing-short-usd-position/
-
Chinese buyers are
deferring or have defaulted on coal and iron ore deliveries
following a drop in prices, traders said, providing more
evidence that a slowdown in the world's second-largest economy
is hitting its appetite for commodities.China is the world's biggest consumer of iron ore, coal and
other base metals, but recent data has shown the economy cooling
more quickly than expected, with industrial output growth
slowing sharply in April and fixed asset investment, a key
driver of the economy, hitting its lowest in nearly a decade.Coal and iron ore prices could fall further before recovering
towards the tail end of the second quarter, traders say,
sparking more defaults or deferred deliveries."There are a few distressed cargoes but no one is gung-ho
enough to take them. Chinese utilities aren't buying because
they have a lot of coal and traders are also afraid of getting
burnt. It's very bearish now," said a trader.The defaults come on the heels of a slump in global thermal
coal benchmark prices to two-year lows and increases the
prospect of an even steeper fall unless China revives buying to
absorb the global coal surplus as exporters ramp up production."We need China to buy heavily, a severely hot summer across
Europe followed by a long, cold winter, and some production cuts
for the market to rebalance," a European coal trader said.At least six defaulted thermal coal cargoes were being
re-offered at a discount, traders said, including contracts for
shipments from the United States, Colombia and South Africa.http://www.reuters.com/article/2012/05/21/china-coal-defaults-idUSL4E8GL1BS20120521
-
Markets are largely no longer
trading fundamentals; they are just trading state intervention and
money printing. Why debate earnings when instead you can debate the
prospects of QE3? Why invest in profitable companies and ventures when
instead you can pay yourself a fat bonus cheque out of monetary
stimulus? Why exercise caution and consideration when you can just
gamble and get a bailout?
http://www.zerohedge.com/news/guest-post-liquidation-vital
Ding, exactly. Why bother investing in large industrial project with 3-4% return that might go bust. Why not speculating on stock for 2-3 mili second and get 5-10% annual return? or play on commodity/grain/bond/information leak/ gambling. starve the poor.
It's all rent and speculative economy instead of something productive. Bringing interest rate from 1.25% to 0.25% isn't going to change a damned thing. Spin the casino wheel faster. This is a huge part of economy some 20-40%, definitely crazy.
this will keep going on until total industrial collapse ala argentina. exactly like argentina, in vastly larger scale. The huge global monetary manipulation will sooner or later kill trade and commerce. Then it's all just bunch of computer pushing meaningless bits around while the banksters asking for more handout.
-
US grants ‘Iran waiver’ to China
Things look pretty grim. The so-called
‘cold-war dividends’ seem a distant past. The United States Secretary
of State Hillary Clinton is reportedly preparing herself for a “face-to-face” showdown with
her Russian counterpart Sergey Lavrov as the countdown begins for the
international conference sponsored by the United Nations, which takes
place in Geneva on Saturday. Clinton is travelling to St. Petersburg en
route to Geneva for this mother of showdowns in the post-cold war era.Just as well that Clinton provided some comic relief before leaving Washington. Clinton decided with aplomb to recommend to the US Congress a “waiver” to
China on the Iran sanctions on the basis of her “determination” that
China “significantly reduced” its oil imports from Iran. But Clinton
wouldn’t say how she arrived at this intriguing “determination”. Mum is
the word.The
point is, Washington is slithering away from a showdown with Beijing.
Life can be very simple at times: You just don’t bite the hand that
feeds you. A trade war with China is the last thing the US wants.The
US made repeated demarches with China over Iran sanctions. Top US
officials including Treasury Secretary Timothy Geithner travelled to
Beijing to plead the case. But China ignored them and kept insisting it
will only comply with the UN sanctions. The Chinese foreign ministry
insisted last week that its purchases of Iranian oil are “legitimate”.
-----
and with that...whatever remaining credibility this administration has in foreign affair....gone in a poof...the amount of incompetence and stupidity is mind boggling. (seriously, china just called their bluff and they fold. Not only that, now everybody knows how the game will be played next. ... in the end, nobody knows how oil from Iran can be traced, let alone what sort of payment currency is used. Iran oil in the meantime is flowing and blended in every major terminal in asia, using ships that are invisible to western registry, and paid in non dollar currency. From dollar point of view, Iran oil doesn't even exist. what's more the dollar exclusion zone is enlarging at accelerating speed. Huge cost advantage to asian economy for years to come.) -
Continuing the trend...
Japan Seeks Expansion of $3 Billion China Swap Deal, Nakao Says
Bank Of China Expands In Brazil With US$30 Billion Swap Agreement
China, Ukraine sign 15b yuan currency swap deal
BRICS looks at funding pool, money exchanges
----------------
So now yuan swap is expanding beyond asean+3 / +5, to go into larger economies in eastern europe and latin america. Combined with gulf war expectation, Euro crisis, Libor problem,... expectation of massive dollar crunch from every possible sides, a growing economy in Asia only have few options: preserve dollar, increase non dollar exchanges, reduce risk exposure from dollar...
basically... double-triple whammy , exactly in time when dollar economy need increasing growth and trade, more lending opportunity, and maintaining if not increasing money velocity.
....... and btw, now Euro is at 0%. sooner or later it will bring down euro vs. dollar. And european economy is MUCH bigger than US, they can absorb more inflation/devaluation pain then US can.
I expect big riot in US cities in 3-5 years. 60's style riot with national guard shooting populations in city street.
-
South Korea Shipbuilders to Post First Export Drop in 19 Years
global slowdown now start affecting long term capital equipments. Oil needs to go down to $10-20 to pump everything back up again... $80-90 isn't going to do anything.
-
How The Global Economy Changed In One Month
Notable readings:
- U.S.: 52.5 in June, down from 54.0 in May
- U.K.: 48.6 in June, up from 45.9 in May
- Eurozone: 45.1 in June, flat with 45.1 in May
- Spain: 41.1 in June, down from 42.0 in May
- Germany: 45.0 in June, down from 45.2 in May
- Italy: 44.6 in June, down from 44.8 in May
- China: 48.2 in June, down from 48.4 in May
- Japan: 49.9 in June, down from 50.7 in May
http://www.businessinsider.com/june-pmi-global-roundup-2012-7
talking about zionist occupied territory. US, euro zone, australia...
-
I want to make an obvious political economy point. The most organized
and active agents of the rentier class are, of course, banks. As
Konczal points out[Financial sector] profits are based off milking the bad debts of the
housing and credit bubbles while Americans struggling under a crushing
debt load. Instead of sharing the losses, the financial sector has
locked itself into the profit stream and left the real economy to deal
with the mess.Financial sector lobbying plays an outsized role in tilting policy
away from risk-and-loss-sharing arrangements and towards an alchemy of
blood from turnips.But it didn’t have to be this way. Banks, after all, are not only
creditors. They are also the economy’s biggest debtors. In theory, bank
loyalties ought to be mixed. On the one hand, banks prefer deflationary,
zero-forgiveness tight-money policies, to maximize the real value of
their assets and of the lending spread from which they draw profits and
bonuses. On the other hand, troubled banks are very happy to
support loose money and expansionary policy, even at risk of inflation.
For bank managers and shareholders, it is bad to have the value of past
loans eroded by inflation. But it is much worse to lose their franchises
entirely, to have their wealth, prestige, and freedom put at risk in
the aftermath of an explicit bank failure. When banks are in trouble,
they are perfectly happy to support all manner of expansionary policy,
as long as short-term interest rates are kept low. Even a broad-based
inflation helps troubled banks twice over, by increasing borrowers
incomes and by steepening the yield curve. Increased incomes ensure that
loans will be repaid in nominal terms, preventing insolvency due to
credit losses. A steep yield curve permits banks to recapitalize
themselves via maturity transformation, using deposits to purchase
Treasury notes while the central bank promises to hold short rates low
for a few years. -
What was truly
interesting about those discussions, be it about
investment banking fees or credit ratings, was the
fact that everyone in the room generally
acknowledged the intellectual points but always
pointed out the apparent physical impossibility of
changing anything about market conventions and
practices.
None of these entrenched
practices have any basis in capitalism or
competition but represent the powers of
oligarchical systems that helped entrenched
interests to assume rent-collection roles in
perpetuity, albeit not always by design. In so
doing though, the rent-seeking behavior attracted
its own legion of fans, who over time helped to
maintain the status quo more or less unchanged: in
other words, the Roosevelt doctrine on Somoza was
reincarnated in financial markets.
The
present scandal over the London Interbank Offered
Rate (or Libor) and how this international
benchmark for borrowing funds was manipulated by
various banks to their advantage, like the fracas
around credit rating agencies a couple of years
ago, essentially comes around to the key point of
how an oligarchy not particularly known for
efficiency or efficacy managed to entrench itself.
With US$350 trillion (as against global gross
domestic product of some $50 trillion) in
derivatives contracts written on Libor fixing, is
it any wonder that someone somewhere thought it
could be profitable to skew the system somewhat?
Even that attempt at cornering the fixes
for banks to individually profit is not the main
point of the Libor scandal. Rather, it is the
sheer challenge of concocting an alternative that
would help underpin the giant derivatives market
and provide it with rate references that are
altogether more transparent and tradable.
Going by the failed attempts to reform the
credit ratings business over the past few years -
a business that affects less than $10 trillion in
bonds versus the derivatives market that stands
some 30 times bigger - I wouldn't bet on the
market's ability to find a replacement.
http://www.atimes.com/atimes/Global_Economy/NF30Dj02.html
Howdy, Stranger!
It looks like you're new here. If you want to get involved, click one of these buttons!
Categories
- All Discussions3,267
- General2,523
- Band Promotion217
- Blog Promotion259
- MP3 Blog Tips148
- MP3 Blog Tools120
- Private Messages0