Housing Bubble

Chinese Interbank Funding Freezes Again As Overnight Repo Hits 33%

While traders around the world slept, China's banking system suffered another mini cardiac arrest when the overnight repo rate traded on Shanghai Stock Exchange soared as much as 30.87% to 33%, the highest since September 29, before closing at 18.55%.

As Mystery Of China's Multi-Billionaire Default Deepens, A New "Bond Scare" Emerges

The fate of a defaulted $45 million Chinese corporate bond sold through an Alibaba-backed online WMP and belonging to the telecom company of one of China's biggest billionaires, was thrown into doubt on Monday, after a bank said letters of guarantee for the bonds were counterfeit, suggesting an entirely new "finance scare" is emerging in China.

Dave Collum's 2016 Year In Review - "And Then Things Got Really Weird..."

"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."

Frontrunning: December 23

  • Berlin market attack suspect killed in Italy (Reuters)
  • Tunisian Suspect Had a History of Criminal Activity, Extremism (WSJ)
  • Hijacked Libyan plane lands in Malta with 118 on board (Reuters)
  • Deutsche Bank, Credit Suisse Settle U.S. Probes as Barclays Sued (BBG)
  • Italy Sets Up Fund to Help Troubled Banks (WSJ)

Something Wicked This Way Comes

"The narrative about an improving economy, thriving jobs market, and glorious future is bullshit. I know it. You know it. And your establishment puppeteers know it. But only “fake news” sites would dare reveal these inconvenient truths."

In Rare Move, US Sues Barclays For Mortgage Securities Fraud

The market was waiting for the DOJ to announce the long-awaited settlement with Deutsche Bank today. Instead, it got news of a surprise lawsuit filed by the DOJ which sued Barclays after failing to settle a long-running probe into the UK bank's involvement in pre-crisis mortgage fraud.

Chart(s) Of The Week: 'Lombard Street' For A New Age

Gold is collateral of last resort as it is near-universally accepted. Repo fails indicate, very strongly, collateral shortage. Put the two together and you get yet more evidence that central bankers really don’t know what they are doing. And, also like in Bagehot’s day, the repercussions are global.

Two Options: Reform The Economic System Now Or The Populists Will

This is what it comes down to: There was a credit explosion to the benefit of banks and the wealthy once Nixon closed the gold window. At that point, governments could print at will, and they did. Central bank policy cannot fix structural problems, only the free market can. And that includes a truly free market in money as well.