Earlier today, alongside the ECB's latest weekly disclosure of total corporate bond purchases under the CSPP program, which as of July 15 had risen by approximately €2 billion to €10.427 billion, suggesting a daily purchase pace of about €400 million, Europe's various regional central banks also disclosed for the first time the CUSIP list of which specific bonds they had purchased over the past month and a half.
Culminating with the tipping of the UK's numerous real estate fund "dominoes" and the subsequent fallout in the wake Brexit, Fitch has been on a ratings-slashing spree, having cut the credit ratings on 14 nations so far in 2016, most recently that of the United Kingdom - a record downgrade pace for the rating agency.
Perhaps riding high on the small victory of a slight reprieve in the amount of money the city would have to contribute to fund the liabilities over the next few years, Rahm Emanuel is now quietly asking the city to change investment rules that would allow Chicago to purchase debt from sister agencies such as the Chicago Public School system - said differently, Rahm Emanuel wants to bail out the Chicago Public School system.
If posed with the question who has the better credit rating, the United States or Russia, most people would presumably pick the United States. However, that is not the case for Dagong Global Credit Rating Co, one of the three biggest credit rating companies in China. Here's why...
A few days after the ECB unexpectedly announced its CSPP, or corporate bond buying program which based on its definition was limited to investment grade, non-financial debt, we explained "Why The ECB Will Be Forced To Buy Junk Bonds", saying that "the EU corporate sector’s penchant for bond buybacks may ultimately force Draghi further down the ratings ladder lest the ECB should end up entangled tender offers or else end up without enough debt to monetize." This was confirmed on the very first day of the ECB's bond purchases.
“The few who understand the system will either be so interested in its profits or be so dependent upon its favors that there will be no opposition from that class, while the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”
One does not have to be financial wizard to to know that a firm which has to borrow more than it can generate from core operations is not a sustainable business model, and yet today's CFOs, pundits and central bankers do not. But more are starting to pay attention as the corporate debt pile hits epic proportions. As Bloomberg writes this morning, when it also issued a stark warning about the next source of credit contagion, while "consumers were the Achilles’ heel of the U.S. economy in the run-up to the last recession. This time, companies may play that role."
Sell paper and digital gold, maybe but not physical gold coins and bars. Rather both physical gold and silver bullion should be owned as financial insurance and hedges against currency debasement, bail ins, systemic and counter party risks and the myriad other risks today.
Witness true research that reveals true facts, that unlocks true alpha, aka VALUE! Banco Popular is walking down the same path as Bear Stearns. We should know, we called out Bear in January 2008, and we called out BP months ago.
Behind the scenes, the legally aggressive stance of Noble Group Ltd is rapidly becoming known in the financial analysts’ community as analysts and media organizations are threatened one after another by the troubled SGX-listed trader. The censorship and its lawyers used to claim full control of the situation with the hope that its critics and the market would be “reset”—akin to being lobotomized. The company has left us with its cliffhanger: even the most egregious comments made by Iceberg on the trader happened to be entirely correct.
Nuclear power is not commercially viable but has become a state-sponsored technology. There is nothing wrong with state supported technology. But we could save a lot of time and money by not pretending that it is something else.
Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system. The Federal regulators didn’t say JPMorgan could pose a threat to its shareholders or Wall Street or the markets. It said the potential threat was to “the financial stability of the United States.”