In his latest communication with the outside world, Gundlach said that gold prices are likely to reach $1400 an ounce "as investors lose faith in central banks", Reuters reported. "The evidence that negative rates are harmful and not helpful has piled up to the point that the 'In Central Banks We Trust' mantra has finally been laid bare as a hoax,"
World Succumbs To Zika Panic: Puerto Rico Declares Emergency; Plane Cabins Sprayed; CDC Says "Use A Condom"Submitted by Tyler Durden on 02/05/2016 18:33 -0500
Guess who will be blamed in a few months when global trade, commerce, and growth all go negative?
Populism, patriotism, nationalism, defying political correctness and dissing the establishment and the elites that monitor PC are where it’s at. There are reasons for such populist rage...Put bluntly, the nation seems almost everywhere on an unsustainable path.
"Why after several decades of 0% rates has the Japanese economy failed to respond? Why has the U.S. only averaged 2% real growth since the end of the Great Recession? “How’s it workin’ for ya?” – would be a curt, logical summary of the impotency of low interest rates to generate acceptable economic growth worldwide. "
- Punxsutawney Phil Does Not see shadow, signifying an early spring (CBS)
- Front-Runners Give Ground as Rivals Make Mark in Iowa (WSJ)
- Republican Cruz bests Trump in Iowa race, Clinton edges out Sanders (Reuters)
- Iowa Narrows the Field (BBG)
- Global stocks snap winning streak as oil pressure returns (Reuters)
- ‘Dark Pool’ Settlements Bring Tangled Relationships to Light (WSJ)
Puerto Rico has devised a scheme the island says will help put it back on the path to debt sustainability. You can read on to learn the specifics, but in essence, the commonwealth wants creditors to take a massive haircut which may or may not be ameliorated down the road.
WHO SAYS ZIKA, MICROCEPHALY 'PUBLIC HEALTH EMERGENCY' - HIGHEST LEVEL OF ALERT
From the initial discovery in the heart of Ugandan forest darkness to mysterious genetically-modified Mosquitoes in Brazil, the newest threat to human health (most notably pregnant women) is the ominous-sounding Zika virus. The epidemic is spreading from its epicenter in Brazil - threatening disaster at the Olympics with "female athletes to consider participation "very carefully"", to Colombia (with 2100 pregant women infected), and further north in America with CDC confirming 6 cases in Texas.
Back in August we noted that John Paulson managed to get himself and his investors involved in two rather dubious "firsts" in 2015: Puerto Rico became the first US commonwealth in history to default, and Greece became the first developed country to default to the IMF. Paulson had invested in Puerto Rican and Greek assets. Now, amid a client exodus, the billionaire is putting up his own holdings to secure a longstanding line of credit with HSBC.
Here Come The Blackouts: Largest Ever Muni Restructuring Falls Apart As Puerto Rico's Power Authority Balks At $9 Billion DealSubmitted by Tyler Durden on 01/24/2016 15:20 -0500
The largest restructuring in muni market history fell apart on Friday when Puerto Rican lawmakers failed to approve a deal to rework some $9 billion in liabilities for the island's beleaguered power utility. "This is incredible. Our power plants look like the cars in Cuba."
- Global Stocks Face Fresh Losses (WSJ)
- European stocks lick wounds after mauling, oil steady (Reuters)
- Hang Seng Index Sinks Below Net Assets for First Time Since 1998 (BBG)
- U.S. Hedge Funds Boast Lower Losses as Markets Tumble Further (NYT)
- Deutsche Bank Drops as Investment Bank Revenue Concerns Mount (BBG)
- Islamic State Uses Syria’s Biggest Dam as Refuge and Potential Weapon (WSJ)
Behold: the effect of an across the board minimum wage hike...
“The commonwealth has committed itself to a ‘scorched earth’ strategy of blaming its fiscal and structural problems on lenders, Congress and others, in an effort to deflect responsibility and obtain retroactive application of bankruptcy laws.”
All we can do is point out the risks, so that people can at least prepare on an individual level. A major lesson everybody should take to heart from the Cyprus experience is this: when the next crisis strikes, do not believe any of the promises uttered by government or central bank officials. You will be lied to in the critical moments, and you could stand to lose a lot if you believe the lies.
- Global share market settles after stormy start to year (Reuters)
- Stocks Extend Losses as Yen, Gold Rise on Lingering China Unease (BBG)
- China battles to shore up stocks, yuan after globe-shaking slide (Reuters)
- Volkswagen faces billions in penalties as U.S. sues for environment violations (Reuters)
- Obama tightens gun rules, requires more background checks (Reuters)
As Wilbur Ross so eloquently noted, for Puerto Rico "it's the end of the beginning... and the beginning of the end," as he explained "Puerto Rico is the US version of Greece." However, as JPMorgan explains, for some states the pain is really just beginning as Municipal bond risk will only become more important over time, as assets of some severely underfunded plans are gradually depleted.