The Fed’s Stanley Fischer has said that the U.S. was preparing such legislation – after Tucker had indicated that such legislation was in place. The EU is also at an advanced stage in forcing countries to ratify bail-in legislation. The legislation is being devised to protect the larger banks against the interest of both depositors, taxpayers and the wider economy.
This much-needed re-set to an economy that serves the many rather than the few is what the Powers That Be are so fearful of. On the surface, everything still looks remarkably stable in the core industrial economies. But surface stability is all the status quo can manage at this point, because the machine is shaking itself to pieces just maintaining the brittle illusion of prosperity and order. In effect, the status quo has greatly increased the system's vulnerability, fragility and brittleness--the necessary conditions for catastrophic collapse--all in the name of maintaining a completely bogus facade of stability for a few more years.
Chinese markets bounced last night following drastic intervention by the state when it banned large players from selling their shares in listed companies – arresting the over 30% decline of the past four weeks.
Earlier this month, news emerged that the US government had suffered its worst cyberattack ever. There’s a good chance the attack is even worse than what we've read about. So what does the Obama administration want to do to solve the problem? For starters, it’s proposed “economic sanctions” against China, which it holds responsible for the attack. And only a few days after the OPM hack, Senate leaders tacked on the Cybersecurity Information Sharing Act (CISA) - which creates a back-door channel for government agencies to retrieve, analyze, and store enormous volumes of personal data - to a defense bill to avoid debate on the measure. It didn’t work – the Senate failed to advance the legislation for now... but it is a good time to begin securing your electronic life. The US government certainly isn’t going to do it for you.
Brussels has been dead wrong. The stupid idea that the euro will bring stability and peace, as it was sold from the outset, has migrated to European domination as if this were “Game of Thrones”. Those in power have misread history, almost at every possible level.
Global central banks are afraid. Before Greece tried to stand up to the Troika, they were merely worried. Now it’s clear that no matter what they tell themselves and the world about the necessity or even righteousness of their monetary policies, liquidity can still disappear in an instant. Or at least, that’s what they should be thinking. The problem is that central banks have no plan B in the event of a massive liquidity event. In this cauldron of instability and lack of leadership, cash is the one remaining financial possession that Main Street can translate into goods, services and security. That’s why private banks want more control over it.
"...between ridiculously low interest rates and the increasing costs of compliance, we can’t make money anymore..."
The US government has really screwed the world on this. Paperwork is the priority. Not business. The transition isn’t going to be smooth. And it won’t happen overnight. But there will come a time, and likely soon, when the United States gets displaced.
This is the question that astute investors are forced to ask themselves these days. No reasonable person believes that a system of ever-expanding debt can resolve painlessly. It simply cannot happen... not, at least, until 2+2 stops equaling four. But the international money system, while deeply interconnected, can implode in sections. In fact, it’s highly unlikely that it will crash as a single unit. So, if you have significant moneys to invest, you end up coming back to our question: Who will be the last to crash?
With the ECB reneging on its responsibility as lender of last resort – not the first time it has used its power to political ends in Greece – Greek banks may soon be forced to “bail-in” deposits – i.e. confiscate the cash of their customers.
The Greek D-(efault) day has arrived, and with it so has quarter-end window dressing for many underwater hedge funds (recall the S&P is now red for the 2015) which means the rumor mill today will be off the charts. And sure enough, less than an hour ago, futures exploded higher as did the EURUSD, following another "report/rumor" of a last minute detente between Greece and the Troika when Greek Ekahtimerini said that "Tsipras is reconsidering the last-ditch offer made by European Commission President Jean-Claude Juncker, sources have told Kathimerini."
European investors are increasing purchases of gold as Bloomberg reports, Greece’s turmoil boosts the appeal for an alternative to the euro. Demand from Greek customers for Sovereign gold coins was double the five-month average in June, the U.K. Royal Mint said in an e-mailed statement.As one Frankfurt-based bullion dealer noted, "most of our common gold coins are sold out, when people learned that the Greek banks will be closed, they started to think that it may not be such a bad idea to have some money in gold."
At the open, Europe looked in the abyss, and with no help coming from China, it did not like what it saw: And then the answer came from the Swiss National Bank, which stepped in to prevent the collapse just as Europe was opening. Because seemingly out of nowhere, a tremendous bid came in to life the EURCHF, buying Euros (against the CHF and the USD) and selling Europe's last left safety currency. We now know that it was the SNB, the same central bank which is the proud owner of well over $1 billion in Apple stock.
All banks and the Greek stock exchange are closed today. Greek citizens cued in long lines at ATMs or cash machines over the weekend and a run on the banks left most ATMs empty. There is a €60 limit on withdrawals from cash machines under strict capital controls.
Shanghai Gold Exchange volume climbed to a record today as prices declined incentivizing value driven Chinese buyers as Chinese stocks crashed 7.4%. Chinese stocks have had the biggest two-week loss in more than 18 years and are close to entering a bear market after extending losses from their June 12 peak to 19 percent in less than three weeks.
- We need a free market in currencies, not bail-ins and a war on cash and gold - People blindly trust “experts” so welcome that some of them giving prudent advice regarding diversification - Currencies of creditor nations – Norway, Switzerland, Singapore, Hong Kong will outperform in long term