ECB Saves Greece From Certain Bankruptcy. Again
A few days ago we wrote that "Greece Runs Out Of Money. Again"
because it did. The country, which is permanently locked out of the
bond markets, would be down to a negative cash balance as soon as its
August bond payment to the ECB was made. The reason is that the Troika
continues to delay its decision. whether or not to hand over Greece its
next monthly allowance. So with the country threatening to once again
be on the front page as math rears its ugly head, the ECB has decided
to take the bold step and admit that in lieu of even remotely credible
collateral pledged and repledged in the ponzi repo system, the ECB has
no choice but to expand the universe of eligible "collateral" against
which it will provide cash. From Reuters:
"The ECB's Governing Council agreed at its meeting on Thursday to
increase the upper limit for the amount of Greek short-term loans the
Bank of Greece can accept in exchange for emergency loans, the newspaper
said in an advance copy of the article due to appear in its Saturday
edition."In Order To Be Saved, Spain And Italy Must First Be Destroyed
There
has been much confusion over last week's remarks by Mario Draghi, with
the prevailing narrative being that the market first got what Draghi
meant wrong (when it plunged), then right (when it soared). The
confusion is further granulated by attempts to explain what was merely a
desperate attempt at delaying a decision for action, which was
inevitable considering the now open opposition by Buba's Weidmann, into a formal and planned plotline:
"Inverse Twist" or other such technical jargon is what we have seen
floating around. The reality is that, just like all other central
bankers, Draghi did what he does best: use big words and threats of
action in hope it will buy him a few extra days of time. The reality is
also that, just like when the LTRO was announced, the market did get it right initially, when peripheral bonds plunged, and got it wrong over the subsequent 3 months when
bond prices rose, only to collapse to new lows (and in the case of
Spain - record high yields as of two weeks ago). Back then, the ECB
merely bought a few months time with its intervention. This time it has
at best bought a few days with the lack of any actual action. And yet,
Draghi did leave a way out, for at least another brief respite
(where unless Europe expands the available bailout machinery yet
again, the respite will have an even briefer half life than that from
the LTROs). The way out is simple, and in order to avoid any confusion,
we will use an allegory from the movie Batman: Spain and Italy can be
saved. But first they must be destroyed.from TruthNeverTold :
Competing For State Contracts Is Not Competition
Here
in Britain, we hear the word competition a lot. Since Margaret
Thatcher, there has been a general trend — in the name of competition —
toward the selling-off of utilities such as water, railway, electricity
and telecoms providers. More recently, there has been a trend toward
government services being provided by private companies, such as the
bungled Olympic security arrangements contracted out to multinational security giant G4S, as well as work capability assessments contracted out to French IT consultancy ATOS, and the contracting-out of some medical services. The
way this works is that the government provides the funding for
services, which private sector companies then bid to undertake. This is
also the way in which defence contractors have historically competed
for defence contracts, a sector which is renowned worldwide for its profligacy, waste and inefficiency. This is a bizarre arrangement. Competing for government contracts is nothing like the free market.
In a true market environment businesses compete for the custom of
individuals based on their ability to provide the best products and
services.Kirk Sorensen: A Detailed Exploration Of Thorium's Potential As An Energy Source
Kirk Sorensen, NASA-trained engineer, is a man on a mission to open minds to the tremendous promise that thorium, a near-valueless element in today's marketplace, may offer in meeting future world energy demand. Compared to Uranium-238-based nuclear reactors currently in use today, a liquid flouride thorium reactor (LTFR) would be:- Much safer - no risk of environmental radiation contamination or plant explosion (e.g. Chernobyl, Fukushima, Three-Mile Island)
- Much more efficient at producing energy - over 90% of the input fuel would be tapped for energy; vs <1 in="in" li="li" reactors="reactors" s="s" today="today">
- Less waste-generating - most of the radioactive by-products would take days/weeks to degrade to safe levels, vs centuries
- Much cheaper - reactor footprints and infrastructure would be much smaller, and could be constructed in modular fashion
- More plentiful - LFTR reactors do not need to be located next to large water supplies, as current plants do
- Less controversial - the byproducts of the thorium reaction are pretty useless for weaponization
- Longer-lived - thorium is much more plentiful than uranium and treated as valueless today. There is virtually no danger of running out of it given LFTR plant efficiency
Gold and Silver Continue Marking Time
Trader Dan at Trader Dan's Market Views - 1 hour ago
Both Gold and Silver remain in consolidation patterns with tightening
ranges as speculative HOT money flows which are exiting are being met by
value-based buying and accumulation by stronger hands.
The loss of speculative interest in the precious metals over the last few
months can be seen by the steady decline in overall open interest (the
number of contracts open). Generally speaking, whenever speculators are
interested in establishing positions in a particular market, the open
interest will rise. When they are not, the open interest will fall.
Look at the following open interest ... more »
Trading A Trend Has Nothing To Do With Trust
Eric De Groot at Eric De Groot - 2 hours ago
Yesterday's rally backed by the tendency that upside momentum
encourages more buying favors continuation of the reallocation trade from
bonds setup in June and trigger in July (chart 1). The outflows from bonds
accelerate as the stock market rallies (magenta arrow). This acceleration
represents the fuel an election-year stock market rally. Chart...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]
Trader Dan Interviewed on King World News Markets and Metals Wrap
Trader Dan at Trader Dan's Market Views - 3 hours ago
Please click on the following link to listen in to my regular weekly audio
interview with Eric King on the KWN Markets and Metals Wrap.
*http://tinyurl.com/dywhwrn*
**
Completely Fabricated Jobs Report/All bourses in the green/risk off trading
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 4 hours ago
Good
morning Ladies and Gentlemen:
Gold closed up today by $19.30 to finish the comex session at $1606.
Silver finished up by 81 cents to $27.79. Gold was immediately smashed
on news that the USA had a good jobs number. However, with Europe
solidly in the green and with Spanish and Italian 10 yr yields down,
gold and silver took off along with the Dow.Europe decided on Friday,
that maybe
There's Going To Be A Huge Shift In American Society
Admin at Jim Rogers Blog - 8 hours ago
There's going to be a huge shift in American society, American culture, in
the places where one is going to get rich. The stock brokers are going to
be driving taxis. The smart ones will learn to drive tractors so they can
work for the smart farmers. The farmers are going to be driving
Lamborghinis. I'm telling you. You should start Forbes Farming. - *in Forbes
*
Related: John Deere (DE), Potash (POT), Mosaic (MOS)
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fort... more »
from TheAlexJonesChannel :
U.N. AGENDA 21 WILL DESTROY OUR ACCESS TO AFFORDABLE ENERGY AND TURN YOU INTO A SERF IF YOU DON’T WAKE UP.
In Austin Texas where I live the city council has already shut down
several “city” or citizen owned power plants and our electricity bills
have gone up 100%+ in the last few years. Now, they want to cut at least
33% more of our power in the name of saving the earth– a foreign army
could not do this much harm. This is all about power and billions of
dollars, how you ask? Select power plants are given waivers and get to
stay open; and with their competition shut down, they can charge more
for less. This is a pure criminal oppression run by mega corps and the
politician whores they buy. It’s a giant criminal robbery hiding in
plain view!“The beauty of the second amendment is that it will not be needed until they try to take it.” -Thomas Jefferson
from D. Dees, David Dees Illustrations:
Must Watch...
from TheAwakenedMedia:
Cold Hard Facts On Gun Bans: “The Cost Of Liberty Can Be Measured In the Loss of Life”
“Laws that forbid the carrying of arms…disarm only those who are neither inclined nor determined to commit crimes. Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than prevent homicides, for an unarmed man may be attacked with greater confidence than an armed one.” – Thomas Jefferson
by Mac Slavo, SHTFPlan:
While anti-gun advocates put forth every argument under the sun for why you should not be able to own a “high capacity” magazine that holds more than 10 rounds, or that you shouldn’t be able to buy ammunition online, or that police should stop going to work
until guns have been completely banned, the evidence for disarmament of
law abiding citizens as a failed policy is overwhelming.In Chicago, where guns have essentially been banned for personal defense, the murder of innocents has risen so sharply in recent months that Mayor Rahm Emanual has been left with no other option but to call on criminals to look to their morals and values to stop the carnage. Washington D.C., which bans the carrying of concealed weapons, has maintained one of the highest gun crime murder rates in the country for over three decades – since the legislation was passed in 1975. As the Washington Post notes, the disarming of local residents has been wholly ineffective noting that the “guns kept coming, and bodies kept falling.”
Read More @ SHTFPlan.com
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from Silver Vigilante:
There is no doubt that the United States, and the world, could now endure
the worst U.S. drought since the Eisenhower era. Up to nearly a third
of the counties in the United States have been declared disasters areas.
Half of the country is affected by a drought to which there has yet to
appear a potential end. CNN has said there’s no hope, although remains
reluctant to throw in the towel on the current financial system.
Grasslands are dry as rattlesnake skin shed under the desert sun, the
risk for wildfires engulfing the nation higher. Mountain peaks brown
throughout the year will not serve as slides for streams in the west,
the crop losses sure to reap financial and political consequences. In
fact, they’ve already begun. There have been disasters declared in 26
U.S. states, making it the largest U.S. national disaster ever declared.
But, this U.S. national disaster will become a global disaster,
affecting countries tied to the U.S. through the global food market.
90% of Staple U.S. Food Crop Damaged, Destroyed. Nearly 90 percent of the corn and soybeans on American farms have been damaged or destroyed by the drought, and tight reserve stocks are already sending commodity prices higher. Insurance and disaster aid will rush in, but the damage to family farms throughout the nation will be worse than losses suffered by big corporations.The U.S. family farm will continue its extinction.
Read More @ Silver Vigilante
There is no doubt that the United States, and the world, could now endure
the worst U.S. drought since the Eisenhower era. Up to nearly a third
of the counties in the United States have been declared disasters areas.
Half of the country is affected by a drought to which there has yet to
appear a potential end. CNN has said there’s no hope, although remains
reluctant to throw in the towel on the current financial system.
Grasslands are dry as rattlesnake skin shed under the desert sun, the
risk for wildfires engulfing the nation higher. Mountain peaks brown
throughout the year will not serve as slides for streams in the west,
the crop losses sure to reap financial and political consequences. In
fact, they’ve already begun. There have been disasters declared in 26
U.S. states, making it the largest U.S. national disaster ever declared.
But, this U.S. national disaster will become a global disaster,
affecting countries tied to the U.S. through the global food market.90% of Staple U.S. Food Crop Damaged, Destroyed. Nearly 90 percent of the corn and soybeans on American farms have been damaged or destroyed by the drought, and tight reserve stocks are already sending commodity prices higher. Insurance and disaster aid will rush in, but the damage to family farms throughout the nation will be worse than losses suffered by big corporations.The U.S. family farm will continue its extinction.
Read More @ Silver Vigilante
by Gary North, Lew Rockwell:
Occasionally, I read something in the mainstream financial media whose degree of delusion takes my breath away. This is such a sentence (August 2, 2012).
U.S stock index futures pointed to a higher open on Wall Street on Thursday, with investors hoping the European Central Bank will signal further measures to aid growth and prevent the euro zone collapsing.
This was published by CNBC, a cable TV network that remains perpetually bullish. It was posted no later than 6 a.m.
Stock futures up: check.
ECB measures to aid growth: check.
Prevent the eurozone from collapsing: check.
“Another day, another avoidance of the collapse of the eurozone.”
Excuse me. A collapse of the eurozone. Is that right? There might be a collapse of the eurozone?
And the ECB may do something to prevent this? Possibly?
Therefore, American stock futures are up. Have I got this right?
Read More @ LewRockwell.com
Occasionally, I read something in the mainstream financial media whose degree of delusion takes my breath away. This is such a sentence (August 2, 2012).U.S stock index futures pointed to a higher open on Wall Street on Thursday, with investors hoping the European Central Bank will signal further measures to aid growth and prevent the euro zone collapsing.
This was published by CNBC, a cable TV network that remains perpetually bullish. It was posted no later than 6 a.m.
Stock futures up: check.
ECB measures to aid growth: check.
Prevent the eurozone from collapsing: check.
“Another day, another avoidance of the collapse of the eurozone.”
Excuse me. A collapse of the eurozone. Is that right? There might be a collapse of the eurozone?
And the ECB may do something to prevent this? Possibly?
Therefore, American stock futures are up. Have I got this right?
Read More @ LewRockwell.com
from KingWorldNews:
The KWN Weekly Metals Wrap – We have added new segments to the KWN
Weekly Metals Wrap covering gold, silver, trading and a plethora of
other factors affecting the precious metals markets. I am giving King
World News listeners globally access to what has long been my secret
weapons in researching where gold and silver are headed directionally
along with the COT Report. We Cover the Commitment of Traders Report in
detail as well as a number of other factors which can influence the gold
and silver market price action.
LISTEN NOW @ KingWorldNews.com
The KWN Weekly Metals Wrap – We have added new segments to the KWN
Weekly Metals Wrap covering gold, silver, trading and a plethora of
other factors affecting the precious metals markets. I am giving King
World News listeners globally access to what has long been my secret
weapons in researching where gold and silver are headed directionally
along with the COT Report. We Cover the Commitment of Traders Report in
detail as well as a number of other factors which can influence the gold
and silver market price action.LISTEN NOW @ KingWorldNews.com
from Silver Doctors:
Hey Doc, I am seriously considering doing my part of removing physical
from the cartel by buying a 1000 “COMEX Deliverable” bar. I already
have a good stack over 1000 oz’s which includes a number of 100 oz, 50
oz, 25 oz, 10 oz, 5 oz bars along with Maples and Constitutional Silver.
So my question is, how difficult do you think it would be to sell “When needed” this size bar if and when sh*t hits the fan. Thanks for the feedback and keep up the great job of keeping us informed!
Michael, great question. Reselling a 1,000oz bar would be much, much more difficult than reselling (or using as currency) rounds, 10oz bars, or even 100oz bars. Most dealers will not repurchase a bar like that without an assay sample (drill the bar first). Also the size rules out reselling to most investors, so you would be looking at reselling it to a refinery most likely, at well below spot (probably ~1.50- $2.00/oz under spot).
The truth is, any silver purchase in physical form does the same damage to the cartel. Buying 1,000 new buffalo rounds or Eagles or Maples results in the mints having to source 1,000 oz to meet your order, which takes away available physical inventory from the COMEX and the cartel. Buying 1,000 oz in Constitutional silver prevents that silver from ending up in a refinery and being melted into a good delivery COMEX bar. A massive global market like silver flows like water. If you are trying to empty your swimming pool with a bucket, it really doesn’t matter if you take the bucket of water out of the deep end or the shallow end.
Read More @ Silver Doctors
Hey Doc, I am seriously considering doing my part of removing physical
from the cartel by buying a 1000 “COMEX Deliverable” bar. I already
have a good stack over 1000 oz’s which includes a number of 100 oz, 50
oz, 25 oz, 10 oz, 5 oz bars along with Maples and Constitutional Silver.So my question is, how difficult do you think it would be to sell “When needed” this size bar if and when sh*t hits the fan. Thanks for the feedback and keep up the great job of keeping us informed!
Michael, great question. Reselling a 1,000oz bar would be much, much more difficult than reselling (or using as currency) rounds, 10oz bars, or even 100oz bars. Most dealers will not repurchase a bar like that without an assay sample (drill the bar first). Also the size rules out reselling to most investors, so you would be looking at reselling it to a refinery most likely, at well below spot (probably ~1.50- $2.00/oz under spot).
The truth is, any silver purchase in physical form does the same damage to the cartel. Buying 1,000 new buffalo rounds or Eagles or Maples results in the mints having to source 1,000 oz to meet your order, which takes away available physical inventory from the COMEX and the cartel. Buying 1,000 oz in Constitutional silver prevents that silver from ending up in a refinery and being melted into a good delivery COMEX bar. A massive global market like silver flows like water. If you are trying to empty your swimming pool with a bucket, it really doesn’t matter if you take the bucket of water out of the deep end or the shallow end.
Read More @ Silver Doctors
from Testosterone Pit.com:
Normally we see the gory details only after a firm collapses, like
Enron or Lehman, when vultures tear open its guts to fight over
shriveled assets that had appeared fat and healthy on paper, and some of
them had been written up repeatedly to create—which our accounting
system encourages us to do—paper income.
Other outfits get bailed out. JPMorgan among them. A distinction made behind closed doors. They still have hollowed-out balance sheets … and the certainty, if they’re large enough, that the Fed and the Treasury, or central banks and government agencies around the world, will prop them up at a moment’s notice. Confidence is required to keep the scheme going. Once confidence fades, the scheme collapses, and central banks have to print trillions and hand them to the industry so that confidence will reassert itself, and so that the scheme can be driven to the next level. And yet, it’s all about prosaic accounting.
Accounting rules allow the use of estimates to value many assets. And estimates can be written up. If a trader or an executive imagines that an asset has increased in value, he’ll set in motion a chain reaction that will cause the company to make the adjustments, increasing the value of the asset with one entry and increasing by the same amount an income account. It’s all good. Asset value goes up, profit goes up. Trader bonus goes up. Manager bonus goes up. CEO bonus goes up. Investors froth at the mouth. Earnings per share beat analysts’ expectations. A money machine. Everyone is happy. Even regulators, their banks being strong and profitable. Halleluiah.
Read More @ TestosteronePit.com
Normally we see the gory details only after a firm collapses, like
Enron or Lehman, when vultures tear open its guts to fight over
shriveled assets that had appeared fat and healthy on paper, and some of
them had been written up repeatedly to create—which our accounting
system encourages us to do—paper income.Other outfits get bailed out. JPMorgan among them. A distinction made behind closed doors. They still have hollowed-out balance sheets … and the certainty, if they’re large enough, that the Fed and the Treasury, or central banks and government agencies around the world, will prop them up at a moment’s notice. Confidence is required to keep the scheme going. Once confidence fades, the scheme collapses, and central banks have to print trillions and hand them to the industry so that confidence will reassert itself, and so that the scheme can be driven to the next level. And yet, it’s all about prosaic accounting.
Accounting rules allow the use of estimates to value many assets. And estimates can be written up. If a trader or an executive imagines that an asset has increased in value, he’ll set in motion a chain reaction that will cause the company to make the adjustments, increasing the value of the asset with one entry and increasing by the same amount an income account. It’s all good. Asset value goes up, profit goes up. Trader bonus goes up. Manager bonus goes up. CEO bonus goes up. Investors froth at the mouth. Earnings per share beat analysts’ expectations. A money machine. Everyone is happy. Even regulators, their banks being strong and profitable. Halleluiah.
Read More @ TestosteronePit.com
by David Galland, Casey Research:
For some time now – years actually – I have pondered the nature of
liberty. Or more specifically, what liberty actually means to me. And to
be extra clear, I am not talking about the meaning in abstract or
philosophical terms, but tangibly – in much the same way I might answer
if asked what my wife means to me.
The trigger for this entirely personal discourse comes from reading various articles and viewing various YouTubes and speeches from self-styled champions of liberty (COL). There is even an entire conference, Mark Skousen’s FreedomFest, dedicated to the topic.
Invariably, these well-meaning COL rail against “The Man” (something I do myself), accentuating their public angst by sharing stories of being molested by the TSA or otherwise inconvenienced by minions of the state. It is my contention that most of these individuals, and certainly the majority of “freedom-loving” Americans, don’t actually understand the meaning of liberty, but rather give the matter little more than lip service.
And again, I don’t mean liberty in an abstract way – like, say, “world peace” – but tangibly.
Read More @ CaseyResearch.com
For some time now – years actually – I have pondered the nature of
liberty. Or more specifically, what liberty actually means to me. And to
be extra clear, I am not talking about the meaning in abstract or
philosophical terms, but tangibly – in much the same way I might answer
if asked what my wife means to me.The trigger for this entirely personal discourse comes from reading various articles and viewing various YouTubes and speeches from self-styled champions of liberty (COL). There is even an entire conference, Mark Skousen’s FreedomFest, dedicated to the topic.
Invariably, these well-meaning COL rail against “The Man” (something I do myself), accentuating their public angst by sharing stories of being molested by the TSA or otherwise inconvenienced by minions of the state. It is my contention that most of these individuals, and certainly the majority of “freedom-loving” Americans, don’t actually understand the meaning of liberty, but rather give the matter little more than lip service.
And again, I don’t mean liberty in an abstract way – like, say, “world peace” – but tangibly.
Read More @ CaseyResearch.com
by Richard Evans, The Telegraph:
The Bank of England’s policy of quantitative easing has done “irreparable damage” to Britain’s final salary pension schemes, a leading economist has said.
While the Bank made no extension to its QE programme yesterday, its policy of forcing down long-term interest rates has caused huge problems for the pension schemes of many firms, according to Ros Altmann of Saga, the over-50s’ group.
Pension deficits at FTSE 100 firms have more than doubled in the last year alone, despite companies pumping millions into their schemes to repair their pension shortfalls, Ms Altmann said.
“This is turning into a ‘death spiral’,” she added. “The lower gilt yields fall, the worse pension deficits become. The worse pension deficits become, the more trustees will feel they need to ‘de-risk’. This often means buying more gilts which itself means worse deficits because trustees are competing with the Bank of England, which is also trying to buy gilts due to QE.”
She said many employers would want to get rid of their pension risks altogether, but that that approach also risked becoming unaffordable because the cost of covering future liabilities also rises as gilt rates fall.
“Firms are left trying to find more money to plug pension deficits, causing funds to be diverted from creating jobs and expanding operations. Worryingly too, companies trying to borrow money to expand, or to meet a pension recovery plan, are finding the banks increasingly unwilling to lend because of the pension deficit.
Read More @ Telegraph.co.uk
The Bank of England’s policy of quantitative easing has done “irreparable damage” to Britain’s final salary pension schemes, a leading economist has said.
While the Bank made no extension to its QE programme yesterday, its policy of forcing down long-term interest rates has caused huge problems for the pension schemes of many firms, according to Ros Altmann of Saga, the over-50s’ group.Pension deficits at FTSE 100 firms have more than doubled in the last year alone, despite companies pumping millions into their schemes to repair their pension shortfalls, Ms Altmann said.
“This is turning into a ‘death spiral’,” she added. “The lower gilt yields fall, the worse pension deficits become. The worse pension deficits become, the more trustees will feel they need to ‘de-risk’. This often means buying more gilts which itself means worse deficits because trustees are competing with the Bank of England, which is also trying to buy gilts due to QE.”
She said many employers would want to get rid of their pension risks altogether, but that that approach also risked becoming unaffordable because the cost of covering future liabilities also rises as gilt rates fall.
“Firms are left trying to find more money to plug pension deficits, causing funds to be diverted from creating jobs and expanding operations. Worryingly too, companies trying to borrow money to expand, or to meet a pension recovery plan, are finding the banks increasingly unwilling to lend because of the pension deficit.
Read More @ Telegraph.co.uk
By Nickolai Hubble, Daily Reckoning.com.au:
The sovereign bond crisis
is going to play out in a way you don’t expect. It’s going to get you
by the back door, just like the sub-prime loan mess did. In fact, the
very same back door.
‘It’s all got to do with collateral, you see.’
There’s a joke around the office about certain statements which should never be used on a first date. And that one was a winning entry. But that doesn’t mean it is not all about collateral. The stock market, the bond market, the entire economy – they are all about collateral. At least collateral is the crisis trigger that keeps popping up to ruin your day. Here are some examples of how –
Mortgages failed in 2007 because the collateral in the lending agreement (the house) fell in value. The fancy pants creations from Wall Street, which repackaged those mortgages into investments for unsuspecting investors, failed because the collateral (the mortgages) failed.
Then the investment banks started to struggle because the collateral they used in their short term borrowing (the mortgage bundles) failed. The banks had to be bailed out by the governments, which made the governments’ financial position worse. So now the supposedly safest collateral the banks use to secure funding (sovereign bonds) is failing too!
Read More @ DailyReckoning.com.au
The sovereign bond crisis
is going to play out in a way you don’t expect. It’s going to get you
by the back door, just like the sub-prime loan mess did. In fact, the
very same back door.‘It’s all got to do with collateral, you see.’
There’s a joke around the office about certain statements which should never be used on a first date. And that one was a winning entry. But that doesn’t mean it is not all about collateral. The stock market, the bond market, the entire economy – they are all about collateral. At least collateral is the crisis trigger that keeps popping up to ruin your day. Here are some examples of how –
Mortgages failed in 2007 because the collateral in the lending agreement (the house) fell in value. The fancy pants creations from Wall Street, which repackaged those mortgages into investments for unsuspecting investors, failed because the collateral (the mortgages) failed.
Then the investment banks started to struggle because the collateral they used in their short term borrowing (the mortgage bundles) failed. The banks had to be bailed out by the governments, which made the governments’ financial position worse. So now the supposedly safest collateral the banks use to secure funding (sovereign bonds) is failing too!
Read More @ DailyReckoning.com.au
by Walter Kurtz, Sober Look,via Also Sprach Analyst:
The US employment numbers this morning generated a sharp rally in risk
assets, with crude oil rising 3.5%, S&P500 up 1.8%, copper up 1.6%,
and Brazilian Real up 90bp.
It’s worth taking a quick look at what in this employment report is causing such euphoria and whether it is justified.
The markets have focused on the private payrolls increase, which was 62K higher than the forecast. In particular it was the pickup in manufacturing payrolls of 25K vs 10K expected.
This is certainly great news, but unfortunately this report is not as strong as the markets’ reaction indicates. Here are the reasons:
1. The prior month in private payrolls was revised down by 11K. That’s not an insignificant revision.
2. The unemployment rate actually went up from 8.2% to 8.3% and underemployment (U6) went up from 14.9% to 15%. In fact, this is a third month in a row that saw an increase in U6.
3. Hourly earnings were lower than expected (0.1% vs 0.2%). The YoY growth in hourly earnings is 1.7%, the lowest since 2010. This is not positive for consumer spending.
4. Growth in temp payrolls continues to be significantly stronger than in permanent jobs. It tends to indicate lack of confidence among employers.
Read More @ AlsoSprachAnalyst.com
The US employment numbers this morning generated a sharp rally in risk
assets, with crude oil rising 3.5%, S&P500 up 1.8%, copper up 1.6%,
and Brazilian Real up 90bp.It’s worth taking a quick look at what in this employment report is causing such euphoria and whether it is justified.
The markets have focused on the private payrolls increase, which was 62K higher than the forecast. In particular it was the pickup in manufacturing payrolls of 25K vs 10K expected.
This is certainly great news, but unfortunately this report is not as strong as the markets’ reaction indicates. Here are the reasons:
1. The prior month in private payrolls was revised down by 11K. That’s not an insignificant revision.
2. The unemployment rate actually went up from 8.2% to 8.3% and underemployment (U6) went up from 14.9% to 15%. In fact, this is a third month in a row that saw an increase in U6.
3. Hourly earnings were lower than expected (0.1% vs 0.2%). The YoY growth in hourly earnings is 1.7%, the lowest since 2010. This is not positive for consumer spending.
4. Growth in temp payrolls continues to be significantly stronger than in permanent jobs. It tends to indicate lack of confidence among employers.
Read More @ AlsoSprachAnalyst.com
by Stephen Lendman, SJLendman.Blogspot.com:
Did he or didn’t he? ECB president Mario Draghi promised “whatever it takes.” Great expectations arose. August 2 was D-Day.
Fizzle followed sizzle. Bazooka plans stalled. More on Draghi’s pronouncement below and what it means.
Europe’s economy is broken. Monetary intervention solved nothing. Core problems fester and grow. Contagion spreads everywhere. Effective solutions are absent.
Bankers are prioritized over sound economics. Western policy makers march to the same drummer. Ordinary people suffer. Poverty, unemployment, and deprivation grow exponentially. Nothing ahead looks promising.
On August 2, Draghi spoke. Markets want instant gratification. Disappointment followed. Der Spiegel headlined “ECB Disappoints Investors with No Euro Action,” saying:
Read More @ SJLendman.Blogspot.com
Did he or didn’t he? ECB president Mario Draghi promised “whatever it takes.” Great expectations arose. August 2 was D-Day. Fizzle followed sizzle. Bazooka plans stalled. More on Draghi’s pronouncement below and what it means.
Europe’s economy is broken. Monetary intervention solved nothing. Core problems fester and grow. Contagion spreads everywhere. Effective solutions are absent.
Bankers are prioritized over sound economics. Western policy makers march to the same drummer. Ordinary people suffer. Poverty, unemployment, and deprivation grow exponentially. Nothing ahead looks promising.
On August 2, Draghi spoke. Markets want instant gratification. Disappointment followed. Der Spiegel headlined “ECB Disappoints Investors with No Euro Action,” saying:
Read More @ SJLendman.Blogspot.com
from KingWorldNews:
“People are starting to understand they are being played with by these
guys. Draghi came out last week and said he will do whatever it takes
to preserve the euro. Then he said something to the effect of, ‘And
believe me it will be enough.’
But there was an important proviso in his statement. He said, ‘Within its mandate.’ Within the ECB’s mandate he would act. The question is, what is the ECB’s mandate? They still haven’t decided that.”
Turk also added: “Interest rates really are a function of risk. There has been a lot of talk about gold’s swap rates, lease rates, contango, backwardation and all of that stuff, but it’s really pretty simple, Eric. The dollar has an interest rate, the euro has an interest rate, gold has an interest rate. They are all money.
LISTEN NOW @ KingWorldNews.com
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“People are starting to understand they are being played with by these
guys. Draghi came out last week and said he will do whatever it takes
to preserve the euro. Then he said something to the effect of, ‘And
believe me it will be enough.’But there was an important proviso in his statement. He said, ‘Within its mandate.’ Within the ECB’s mandate he would act. The question is, what is the ECB’s mandate? They still haven’t decided that.”
Turk also added: “Interest rates really are a function of risk. There has been a lot of talk about gold’s swap rates, lease rates, contango, backwardation and all of that stuff, but it’s really pretty simple, Eric. The dollar has an interest rate, the euro has an interest rate, gold has an interest rate. They are all money.
LISTEN NOW @ KingWorldNews.com
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