Archive - Jul 15, 2015 - Story

The Greek parliament just voted, in a 229 for and 64 against landslide, to implement the austerity Europe demands to grant Greece the funds for Bailout #3 so that Greece can then repay European creditors (as opposed to facing up to the pain imminently and suffering through a Grexit) implicitly giving up their sovereignty and sending their 61% "Oxi" voting citizenry into what will inevitably be an even deeper economic depression.

Younger generations are highly susceptible to social trends and are often easily manipulated by popular culture and academic authority, which is why we are seeing PC cultism explode with the millennials and post-millennials.  The result is a vast division within American society that cannot be mended. Those of us on the side of liberty are so different in our philosophies and solutions to social Marxists that there can be no compromise.  The whole carnival can end only one way: a fight. And perhaps this is exactly what the elites want: left against right, black against white, gay against religious and straight, etc. As long as the PC movement continues to unwittingly do the bidding of power brokers in their efforts toward the destruction of individual liberty, we see no other alternative but utter conflict.

The Euro Summit statement (or Terms of Greece’s Surrender – as it will go down in history) was just annotated by Yanis Varoufakis as it pertains to ordinary Greek citizens. As the former finance minister writes "The original text is untouched with my notes confined to square brackets (and in red). Read and weep…"

"The AIIB may come to play an important role in keeping America honest. It is difficult to say at this point whether the AIIB will have a negative or a positive impact on the global economy. At the very least, however, the emergence of an international institution with a viewpoint different from that of western creditors will help enhance the quality of debate over emerging economies’ debt problems."

"Right now, dealers are going through their books trying to work out what their positions are worth," explains a major participant in the Asian derivatives market as Reuters reports the suspension of hundreds of mainland China stocks has created disputes between banks and their clients over the valuation of billions of dollars of equity derivatives. "In the end, someone is going to have to call the value of those deals, and someone else will lose out," and with over 1000 stocks still suspended, and Chinese stocks now 12% off post-intervention highs, ISDA - the body that represents the world's largest dealers - is worried that at least $150 billion of outstanding OTC equity derivatives on mainland-listed shares may not have the appropriate language to deal with these events. After 3 days of "you will never learn" rises, margin debt declined following China's great data last night and the continued good news is bad news sell off today.

We’ve discussed China’s worrisome drought several times in the past. It would not be the slightest overstatement to say that China’s water situation is rapidly approaching crisis levels. Even China’s Agriculture Ministry is sounding the alarm bells. China has a long history of trying to tame rivers. It didn’t work before; and combined with the rest of Mao’s absurd central planning, millions of people starved to death. Trying to fight nature always ends badly. But governments never learn.

In 1997, Arnulf Baring (of the German-British family of Baring bankers) unleashed the following 'Nostradamus'-like prediction of how the euro would end (from a German perspective)...

"...They will be subsidizing scroungers, lounging in cafes on the Mediterranean beaches... We risk once again becoming the most hated people in Europe..."

With so much attention rightly focused on China at the moment, people aren’t paying enough attention to the budding economic calamity unfolding in Japan. While “Abenomics” has succeeded in boosting the stock market and food prices, it has utterly failed to raise wages. In fact, wages adjusted for inflation have plunged to the lowest since 1990. As such, a record number of households now describe their living conditions as “somewhat hard” or “very hard.”

Banks are a riddle wrapped up in an enigma (as we just described what unsound banking is). Everyone kind of knows that they do stuff with money we don’t understand, while the last crisis left a feeling of deep mistrust and confusion. We try to shed a bit of light onto the banking system. Why were banks invented, why did they cause the last crisis and are there alternatives?

The stock market is just too important to leave to the vagaries of an actual market now. Too much depends on good-looking numbers now. It must be guided and controlled, or else the stilts on which our global financial system balances become shakier and more visible. The market must be rendered increasingly meaningless simply because it's too meaningful to our current economic system.

In an interview at Institutional Investor's Delivering Alpha conference, Elliott Management’s Paul Singer discusses the perils of investing in a world dominated by Keynesian central planners, paper money, the "craziness" of China’s margin-fueled equity bubble, and "connecting the dots."

Today, an unholy alliance was born when Blythe Masters, the mother of the credit default swap and former member of the fabled "Morgan Mafia" was named chairman of Santander Consumer, the largest subprime auto lender in the US.

For all those wondering just how INTC did it, here's the reason for Intel's beat in one simple chart.

As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.

Despite President Obama's hubris over the 'recovery', his crowing about the jobs record, and his insistence that while "there's more to be done," everything is awesome, The White House just took the meat-cleaver to its US economic growth forecasts...cutting 2015 growth from 3% to 2%. That was not all though as their forecasts see no recession until at least 2025, unemployment under 5.0% for at least the next decade, stable inflation for 10 years, and last but not least - a 3-month T-Bill rate of over 3% within the next few years.