Is It Time For The Financial World To Panic? 25 Reasons Why The Answer May Be Yes
Every now and then it is easy to forget that the one or two "better than expected" data points blasted by flashing headlines do nothing that merely mask what is an otherwise quite deplorable and deteriorating reality. For the disconnect between America and the rest of the world look no further than this chart showing the dramatic divergence between the DJIA, which has just gone positive for the year, and every other major global stock market. Yet for those who require a narrative to go with their numbers, here is The Economic Collapse with the latest of their traditionally comprehensive bulletins, this time summarizing the "25 signs that the financial world is about to hit the big red panic button."Brazil Central Bank Unexpectedly Cuts Its Overnight Rate To 12.0% From 12.5% Following Observations Of "Substantial Economic Deterioration"
In a shocking move, one which is sure to reverberate around the Developing and certainly Developed World, the Brazilian Central Bank just announced that it was cutting its Selic (overnight lending) rate from 12.5% to 12.0%, citing "substantial economic deterioration" - something that not one of the 62 analysts covering Brazil had anticipated. It seems that following over a year of small arms fire FX intervention sniping, Brazil has finally reevaluated its growth prospects, and instead of dealing with the inflow of capital on a piecemeal basis by buying dollars daily - a move which has not worked at all, has decided to cut off flows at the stem. This is most likely the first of many rate cuts by Brazil which is obviously anticipating a major growth contraction in China, and as a result we expect the the other BRICs will very soon reevaluate their stance vis-a-vis being the remaining target of global capital flows. Ironically, up until now it was mostly the developed (read bankrupt) world that was devaluing its currencies... Well, make way for the new kids on the block because this is about to get interesting.Fed to hasten currencies' race to the bottom, Leeb tells King World News
BK Is Out Of BK: BNY Chairman And CEO Kelly Forced Out Due To Differences With The Board On Managing Company
Some very out of left field late news from the only other tri-party repo in addition to JPM and key corrupt player in the Bank of America settlement litigation, BNY Mellon, whose Chairman and CEO Bob Kelly has just stepped down "because of differences with the board in the approach to managing the company." His replacement will be president Gerald Hassell, effective imediately. Uh, those never occur unexpectedly. Something big is happening behind the scenes, and alas we ave no idea what it is. Is this the first step to setting up the replacement for Brian Moynihan? Look for the kneejerk response in BAC stock for the answer. Or did the Bank of America settlement, already improbable, just get impossible?Monthly Gold Charts - August 2011
Trader Dan at Trader Dan's Market Views - 2 hours ago
Harvey Organ, Wednesday, August 31, 2011
Gold closes higher but silver's performance stellar / over 15 million oz of silver standing
Anybody Dumb Enough to trade Physical for Paper Promises? We will Soon Find Out...
More Bad News For Euro Banks: SocGen, Intesa And Unicredit Kicked Out Of Stoxx 50 Index
Yes, you can't short them. But that doesn't mean you can't sell them. Which is precisely what index funds will be forced to do after the main European index, the Stoxx 50, announced that it will be removing battered SocGen, Intesa and Unicredit from its list of constituents (as well as that anachronism of a cell phone maker Nokia). Let's hope that European HFTs jump in to prop the bid. Oh wait, unlike our farce of a levitation machine, Europe does not have HFT, which is why following every overnight session it is our vacuum tubes' patriotic duty to buy everything up into the close with a millisecond holding pattern, only to dump it to other algos, and ultimately retail and ETF hands. And since every loser has an equal and opposite winner, the companies that will replace the aforementioned sinking ships are Unilever, LVMH, National Grid and Air Liquide.Guest Post: Bear Market Bounce OR New Bull Market
The question that I have been asked more today than almost any other time in the past month has been "Is This The Time To Start Buying Back In?".
With the recent rally off of very oversold conditions in July and
August, a reflex rally has been in the offing. Also, with this being
the end of the month, we are seeing portfolio window dressing for mutual
funds. However, a brief review of our technical indicators is in
order to determine where we are in this current market environment and
what the potential "risk" versus "reward" of being fully invested
currently is.Jim Sinclair’s Commentary
The financial problem is the entire Western World.
UK plunges into debt danger zone after Labour’s 10-year borrowing binge, says finance watchdog By Hugo Duncan
Last updated at 10:25 AM on 31st August 2011
Britain’s debt levels are dangerously high and are damaging the economy, according to one of the world’s leading financial watchdogs.
Debt in the UK grew faster than in any other major economy in the last decade to £180,000 per household.
It means the country is in the danger zone following a ten-year borrowing binge under the last Labour government, a hard-hitting report from the Bank for International Settlements has revealed.
Its chief economist, Steve Cecchetti, said: ‘Beyond a certain level, debt is bad for growth. At low levels, debt is good. It is a source of economic growth and stability. But at high levels, private and public debt is bad, increasing volatility and retarding growth.’
The BIS said government, corporate and household debt in Britain jumped from 223 per cent of gross domestic product in 2000, or £2.18trillion, to 322 per cent, or £4.68trillion, in 2010. That is the equivalent of £180,000 per household.
The 99 percentage point increase was the biggest of any leading economy and left Britain deeper in the red than any country in the Group of Seven industrialised nations except Japan.
More…
August 31, 2011, at 1:09 pm
by Greg Hunter in the category USAWatchdog.com |
Print This Post | 
Email This Post
by Greg Hunter in the category USAWatchdog.com |
Print This Post | Email This Post
By Greg Hunter’s USAWatchdog.com
Dear CIGAs,
If there is one central theme to the ongoing financial crisis we face, it is an insolvent banking system. It is so bad that the accounting rules were changed (after the financial meltdown in 2008) to allow banks to value assets on their books at whatever they think they will fetch far into the future. So, the billions of dollars of underwater mortgage-backed securities and real estate sitting on the balance sheet is held at imaginary values to make many banks look solvent when, in fact, they are not. This is opposite of the way the IRS values assets. The price of something is based on what the asset is worth today. This is called mark to market accounting.
If any of the banks (especially the big banks) want to prove me wrong on this point, then they can simply value all their assets for what they can get for them today and the argument is over—fat chance! I never see this subject ever brought up when the president of a big bank is interviewed. I’ll bet you Jamie Dimon of JPMorgan would really squirm if he was asked what his bank would be worth if all the assets on the balance sheet were valued at today’s price.
In January of 2009, I wrote a piece called “Default Option.” I had the crazy idea that the big banks should be taken into receivership. Yes, shareholders and bond holders would have been wiped out. Tough—that’s investing. The only people you would have to protect are the depositors and, at the time, it would have cost $6 trillion. I said, “Letting those banks take the hit for their ill-advised, reckless investments based on greed will do many things. Here are just a few. Letting the reckless banks fail will limit taxpayer exposure, preserve our capital and our credit rating as a country. Bank failure will wash bad debt out of the system once and for all and protect the dollar from free fall. Finally, I think in the end it will be cheaper and more effective than what has and will be done in the future to “fix” the credit crisis.” (Click here to read the original Default Option post.)
Fast forward to today, and we see the dollar is falling, gold is spiking and the credit rating of the U.S. has been cut. My plan was downright miserly when you consider that the Fed (according to a recent GAO report) spent $16 trillion bailing out the world, with $5 trillion going to foreign banks alone. If you really want jobs in this country, you need capital formation not–debt formation. Capital invests in productive assets, and productive assets create real jobs! We still have a crippled banking system despite spending trillions of dollars, and there are still no jobs!
More…
Dear Jim,
It’s going to be a very interesting September.
Regards,
CIGA Pedro
"That is why we need a plan “C”: Austria, Finland, Germany and the Netherlands to leave the eurozone and create a new currency leaving the euro where it is. If planned and executed carefully, it could do the trick: a lower valued euro would improve the competitiveness of the remaining countries and stimulate their growth. In contrast, exports out of the “northern” countries would be affected but they would have lower inflation. Some non-euro countries would probably join this monetary union. Depending on performance, a flexible membership between the two unions should be possible."
More…
The writer is former head of the Federation of German Industries (BDI) and has joined about 50 other business leaders in a legal challenge at Germany’s Constitutional Court against the Greece rescue package.
Dear CIGAs,
If there is one central theme to the ongoing financial crisis we face, it is an insolvent banking system. It is so bad that the accounting rules were changed (after the financial meltdown in 2008) to allow banks to value assets on their books at whatever they think they will fetch far into the future. So, the billions of dollars of underwater mortgage-backed securities and real estate sitting on the balance sheet is held at imaginary values to make many banks look solvent when, in fact, they are not. This is opposite of the way the IRS values assets. The price of something is based on what the asset is worth today. This is called mark to market accounting.
If any of the banks (especially the big banks) want to prove me wrong on this point, then they can simply value all their assets for what they can get for them today and the argument is over—fat chance! I never see this subject ever brought up when the president of a big bank is interviewed. I’ll bet you Jamie Dimon of JPMorgan would really squirm if he was asked what his bank would be worth if all the assets on the balance sheet were valued at today’s price.
In January of 2009, I wrote a piece called “Default Option.” I had the crazy idea that the big banks should be taken into receivership. Yes, shareholders and bond holders would have been wiped out. Tough—that’s investing. The only people you would have to protect are the depositors and, at the time, it would have cost $6 trillion. I said, “Letting those banks take the hit for their ill-advised, reckless investments based on greed will do many things. Here are just a few. Letting the reckless banks fail will limit taxpayer exposure, preserve our capital and our credit rating as a country. Bank failure will wash bad debt out of the system once and for all and protect the dollar from free fall. Finally, I think in the end it will be cheaper and more effective than what has and will be done in the future to “fix” the credit crisis.” (Click here to read the original Default Option post.)
Fast forward to today, and we see the dollar is falling, gold is spiking and the credit rating of the U.S. has been cut. My plan was downright miserly when you consider that the Fed (according to a recent GAO report) spent $16 trillion bailing out the world, with $5 trillion going to foreign banks alone. If you really want jobs in this country, you need capital formation not–debt formation. Capital invests in productive assets, and productive assets create real jobs! We still have a crippled banking system despite spending trillions of dollars, and there are still no jobs!
More…
August 31, 2011, at 2:44 pm
by Jim Sinclair in the category Jim's Mailbox | Print This Post | Email This Post
by Jim Sinclair in the category Jim's Mailbox |
Print This Post | Email This PostDear Jim,
It’s going to be a very interesting September.
Regards,
CIGA Pedro
"That is why we need a plan “C”: Austria, Finland, Germany and the Netherlands to leave the eurozone and create a new currency leaving the euro where it is. If planned and executed carefully, it could do the trick: a lower valued euro would improve the competitiveness of the remaining countries and stimulate their growth. In contrast, exports out of the “northern” countries would be affected but they would have lower inflation. Some non-euro countries would probably join this monetary union. Depending on performance, a flexible membership between the two unions should be possible."
More…
The writer is former head of the Federation of German Industries (BDI) and has joined about 50 other business leaders in a legal challenge at Germany’s Constitutional Court against the Greece rescue package.
Wall Street Journal and New York Times commentaries urge: Murder gold
How new Chinese gold exchange may defeat paper market
Once you watch this video...you will Never think the same way when watching the Wizard of Oz...
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)
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