The Greek election result was worse than expected - the anti-austerity vote is massive, but it could be an empty gesture as Greece in reality has little choice: Comply with the Troika or leave the EUR. Saxo Bank's Steen Jakobsen doubts the latter will happen with the same vote as the Greeks are tired of austerity but not of being European. However, game theory dictates that some solution will be found which is sub-optimal for all parties, but the risk it will take longer than market have nerves for. There remains a consensus that “things will be ok...” but the early comments indicate the positioning is already starting...
"My humble thesis tonight is that the entire 20th Century was a giant mistake. And that you can put the blame for this monumental error squarely on Thomas Woodrow Wilson - a megalomaniacal madman who was the very worst President in American history... well, except for the last two."
Following the deaths of 36 bankers last year, 2015 has got off to an inauspicious start with the reported suicide of Chris Van Eeghen - the 4th ABN Amro banker suicide in the last few years. As Quotenet reports, the death of Van Eghen - the head of ABN's corporate finance and capital markets -"startled" friends and colleagues as the 42-year-old "had a great reputation" at work, came from an "illustrious family," and enjoyed national fame briefly as the boyfriend of a famous actress/model. As one colleague noted, "he was always cheerful, good mood, and apparently he had everything your heart desired. He never sat in the pit, never was down, so I was extremely surprised. I can not understand." Most believe that the suicide is not related to his work at the bank, but a former colleague had noticed that on his Facebook recently changed its job title to "former." Chris leaves behind a son - who had recently been cleared of cancer.
“No stock-market crash announced bad times. The depression rather made its presence felt with the serial crashes of dozens of commodity markets. To the affected producers and consumers, the declines were immediate and newsworthy, but they failed to seize the national attention. Certainly, they made no deep impression at the Federal Reserve.” - 1921 or 2015?
Another day goes by. Another day of the West’s (the One Bank’s) economic terrorism against Russia: an overt attack on that nation’s currency, and thus the economy itself. As noted in the commentary which preceded this; such economic terrorism against the ruble damages Russia’s economy, on a percentage-for-percentage basis.
Another day of defiance: by Russia itself, and (increasingly) the Rest of the World. We now know that part (and perhaps most) of the motive for this escalation of Western terrorism against Russia is gold.
Germany's Bundesbank Resumes Gold Repatriation; Transfers 120 Tonnes Of Physical Gold From Paris And NY FedSubmitted by Tyler Durden on 01/19/2015 23:03 -0500
A month ago we asked the following question: who in addition to the Netherlands has been quietly withdrawing their gold from the NY Fed. Was it Belgium? Or did the Dutch simply decide to haul back some more. Or did Germany finally get over its "logistical complications" which prevented it from transporting more than just a laughable 5 tons in 2013? And most importantly, did Germany finally grow a pair and decide not to let "diplomatic difficulties" stand between it and its gold? We now know the answer, and it was, indeed, the latter with confirmation coming from the Bundesbank itself. As the German Central Bank announced earlier today, after withdrawing an embarrassing 5 tonnes of gold from New York in 2013, its rate of repatriation soared, and in what appears to have been just the past two months, has transferred a whopping 85 tonnes of gold from 80 feet below street level at Liberty 33 back to Frankfurt!
When it comes to America's foreign creditors, only two names matter (except for Belgium whose Euroclear service continues to be used by an anonymous entity(s) to buy up US Treasurys): Japan and China. And it is in the Treasury buying and selling dynamics of these two entities that we can see how Japan's monetary policy has impacted its holdings of US paper, which just hit a new all time high of $1,242 billion, while on the other hand Beijing's official holdings of Treasurys have remained unchanged since the summer of 2011, and which in July declined yet another month to just $1,250 billion, the lowest since January 2013.
Belgium has raised its terror alert level from 3 to 4 for police forces (maintaining alert level 2 for everyone else) as it unleashes 10 raids in Verviers (near the capital) on returning Syrian fighters:
*BELGIAN SUSPECTED TERRORISTS OPENED FIRE AT POLICE DURING RAID
*BELGIAN POLICE KILLS TWO TERRORISTS, NO WOUNDED AMONG POLICE
Anti-terrorist operations continue (despite reassurances that this not linked to the Paris attacks) as prosecutors say the suspected terrorists planned large, imminent attacks.
People are becoming more critical of our current monetary system. In the past six years, central banks have promised us growth within six months’ time. They and the whole monetary and financial system have lost credibility. The banks’ profit to GDP is the highest in history in an economic environment where we have the highest amount of unemployment since WWII. There is something very wrong with the way the system works and this is all due to the overemphasis on trying to minimize the business cycle. The real conclusion of QE can only become visible if we experience the full business cycle. In Jakobsen's view, we have never been allowed to have a down cycle since 2008. But now, there is finally going to be a down cycle because central planners can’t print more money. As Jakobsen puts it: “Now is the time for the real economy to take over”.
...over time, grand coalition governments may only serve to ossify the re-orientation of political allegiances along the mainstream vs. populist dimension. If economic malaise persists to the next election, support for populist parties is likely to build, as scepticism about the adjustments required to sustain Euro area membership rises. The Greek experience points in this direction. Were this experience to extend to larger and more systemically relevant countries (such as Italy or Germany), the implications for markets would be profound.
Same slide, different day, as the crude crash continues, with both WTI and Brent tumbling to multi-year highs, below $49 and $52 respectively. This happened despite the news overnight that China is accelerating 300 infrastructure projects valued at 7 trillion yuan ($1.1 trillion) this year, suggesting that China will focus more on fiscal policy than monetary easing, which in turn led to much confusion in the SHCOMP, which fluctuated up and down for the day several times before finally closing unchanged. There was no confusion about the stops slamming USDJPY, and its Nikkei225 derivative which tumbled 3%, sending Japanese Treasury yields to fresh record lows. Record low yields were also seen in Germany, Austria, Belgium, Netherlands, Finland, France (and many other places), which in turn forced the US 10 Year to finally dip back under 2.00%. In fact, taken together, the average 10Y bond yield of the U.S., Japan and Germany has dropped below 1% for the first time ever, according to Citi.
The surreal nature of this world as we enter 2015 feels like being trapped in a Fellini movie. The .1% party like it’s 1999, central bankers not only don’t take away the punch bowl – they spike it with 200% grain alcohol, the purveyors of propaganda in the mainstream media encourage the party to reach Caligula orgy levels, the captured political class and their government apparatchiks propagate manipulated and massaged economic data to convince the masses their standard of living isn’t really deteriorating, and the entire façade is supposedly validated by all-time highs in the stock market. It’s nothing but mass delusion perpetuated by the issuance of prodigious amounts of debt by central bankers around the globe. But now, the year of consequences may have finally arrived.
2014 may go down as the year when gold and silver conspiracy “theories” became conspiracy “facts” as banks globally were found to have conspired to rig the prices of gold, silver, currency and many other markets.
The sixth anniversary of Zero Hedge is just around the corner, and so, for the sixth year in a row we continue our tradition of summarizing what you, our readers, found to be the most relevant, exciting, and actionable news of the year, determined by the number of page views. Those eager for a brief stroll down memory lane of prior years can do so at their leisure, by going back in time to our top articles of 2009,2010, 2011, 2012 and 2013. For everyone else, without further ado, these are the articles that readers found to be the most popular posts of the past 365 days.
Gold Held In NY Fed Vault Drops To Lowest In 21st Century After Biggest Monthly Withdrawal Since 2001Submitted by Tyler Durden on 12/29/2014 23:41 -0500
In November some 47.1 tons of gold were withdrawn from the NY Fed, bringing the Fed's total earmarked gold to just 6,029 tonnes: the biggest single monthly outflow going back to the turn of the century. This is also the lowest amount of gold held at the NY Fed in the 21st century.