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Part 5 - Deposit Confiscation and Bail-In - Where Likely and When?





Emergency resolutions and legislation would be likely in many countries in the event of another Lehman Brothers collapse and another global credit and financial crisis. 

Particularly vulnerable banks in each country are....

 
Tyler Durden's picture

Frontrunning: December 4





  • EU Fines Financial Institutions Over Fixing Key Benchmarks (Reuters)
  • Euro-Area Economic Growth Slows as Exports, Consumption Cool (BBG) - someone has a very loose definition of growth
  • Ukraine Officials Scour Globe for Cash as Protests Build (BBG)
  • Oops: Franklin Boosted Ukraine Bet to $6 Billion as Selloff Began (BBG)
  • Japan Plans 18.6 Trillion Yen Economic Package to Support Growth (BBG) - or about 2 months of POMO
  • How Peugeot and France ran out of gas (Reuters)
  • Iran threatens to trigger oil price war (FT)
  • Abe Vows to Pass Secrecy Law That Hurts Cabinet’s Popularity (BBG)
  • Brazil economy turns in worst quarter for 5 years (FT)
  • Australia’s Slowdown Suggests RBA May Need to Do More (BBG)
  • Biden calls for trust with China amid airspace dispute (Reuters)
 
Tyler Durden's picture

White House Releases Iran Deal Fact Sheet - President Obama To Speak





The White House has released their (lengthy) fact sheet...

"During the six-month initial phase, the P5+1 will negotiate the contours of a comprehensive solution... Over the next six months, we will determine whether there is a solution that gives us sufficient confidence that the Iranian program is peaceful. If Iran cannot address our concerns, we are prepared to increase sanctions and pressure.

 

Suspend certain sanctions on gold and precious metals, Iran’s auto sector, and Iran’s petrochemical exports, potentially providing Iran approximately $1.5 billion in revenue

Israelis, Saudis, and Republicans are already questioning the decision...

 
Tyler Durden's picture

Frontrunning: November 20





  • JPMorgan $13 Billion Mortgage Deal Seen as Lawsuit Shield (BBG)
  • J.P. Morgan Is Haunted by a 2006 Decision on Mortgages (WSJ)
  • World powers, Iran in new attempt to reach nuclear deal (Reuters)
  • Keystone Foes Seek to Thwart Oil Sands Exports by Rail (BBG) - mostly Warren Buffet?
  • How Would Fed Deal With Debt Ceiling Crisis? Look to Minutes for Clues  (Hilsenrath)
  • Anything to prevent the loss of prop trading: 'Volcker Rule' Faces New Hurdles (WSJ)
  • BOE Sees Case for Keeping Record-Low Rate Beyond 7% Jobless (BBG)
  • Obama Backs Piecemeal Immigration Overhaul (WSJ)
  • Abenomics Seen Cutting Japan Bad-Loan Costs to 2006 Low (BBG)
 
Tyler Durden's picture

The American "Rags To Riches" Dream Is Now History For Most





It would appear that the Horatio Alger myth - that hard work and pluck will lift a person from dire circumstances to enviable success - is not living up to expectations for Americans. As WSJ's Lauren Weber notes, 40% of Americans think it’s fairly common for someone to start off poor, work hard and eventually rise to the top of the economic heap but a new Pew study shows that in reality, only 4% of Americans travel the rags-to-riches path. Unfortunately, they discovered considerable “stickiness” at both ends of the income spectrum and that Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots - "this is what we call the 'parental penalty,' and it's really high in the U.S. - If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher."

 
Tyler Durden's picture

How Europe's "Benefits" Stack Up To The US Entitlement Society





With an increasing focus in America on the ever growing entitlement society, we thought it might be useful to get some context of how the welfare states stack up across Europe. As Britain prepares to "test" immigrants in an effort to stymie "benefit tourists", The Telegraph's Ed Malnick, details what health care and child, unemployment and housing benefit a 30-year-old single EU migrant with a child but no job can access in each member state.

 
Tyler Durden's picture

Guest Post: The JPMorgan Problem Writ Large





JPMorgan Chase has had a bad year. Not only has the bank just reported its first quarterly loss in more than a decade; it has also agreed to a tentative deal to pay $4 billion to settle claims that it misled the government-sponsored mortgage agencies Fannie Mae and Freddie Mac about the quality of billions of dollars of low-grade mortgages that it sold to them. Other big legal and regulatory costs loom. JPMorgan will bounce back, of course, but its travails have reopened the debate about what to do with banks that are “too big to fail.” We now have a global plan, of sorts, supplemented by various home-grown solutions in the US, the UK, and France, with the possibility of a European plan that would also differ from the others. In testimony to the UK Parliament, Volcker gently observed that “Internationalizing some of the basic regulations [would make] a level playing field. It is obviously not ideal that the US has the Volcker rule and [the UK has] Vickers…” He was surely right, but “too big to fail” is another area in which the initial post-crisis enthusiasm for global solutions has failed. The unfortunate result is an uneven playing field, with incentives for banks to relocate operations, whether geographically or in terms of legal entities. That is not the outcome that the G-20 – or anyone else – sought back in 2009.

 
Tyler Durden's picture

9 Signs That China Is Making A Move Against The U.S. Dollar





While 20-year highs for the CNY may be enough for many to question the USD's ongoing reserve status, it is clear that there are many other plans afoot that undermine the dominance of the greenback. On the global financial stage, China is playing chess while the U.S. is playing checkers, and the Chinese are now accelerating their long-term plan to dethrone the U.S. dollar.  You see, the truth is that China does not plan to allow the U.S. financial system to dominate the world indefinitely. Unfortunately for us, the U.S. debt spiral cannot go on indefinitely.  Our debt is growing far, far more rapidly than our GDP is, and therefore our debt is completely and totally unsustainable. The Chinese understand what is going on, and when the dust settles they plan to be the last ones standing.

 
Tyler Durden's picture

213 Years Of Sovereign Yields And Defaults





As Jim Grant recently recently noted, America's default is inevitable, as he confronts the implied message of the Federal Reserve’s pro-inflation policy: We will default in the future, though no lawyer will call it “default.” However, a glance back at the last 213 years of global history shows it is not that unusual for major sovereign nations to rapidly crumble and enter a state of default. As Global Financial Data's Ralph Dillon points out, all of this fear and rhetoric over a US default had him thinking about history and defaults. How have other countries that have defaulted faired over history? Some good and some bad for sure, but for the developed markets and global economic powerhouses, those that did default are still here alive and kicking. In fact, some have defaulted 8 times and are still a major player on the world stage.

 
Capitalist Exploits's picture

Legally Destroying the Economy





Over-burdensome regulation and massive liability exposure is stifling business and creativity, slowing the flow of capital globally and stagnating economic growth.

 
Tyler Durden's picture

From Cascading Complexity To Systemic Collapse: A Walk Thru "Society's Equivalent Of A Heart Attack"





"The commonalities of global integration mean that diverse hazards may lead to common shock consequences. The systems that transmit shocks are also the systems we depend upon for our welfare and the operation of businesses, institutions and society... One of the primary consequences of a generic shock is an interruption in the flow of goods and services in the economy. This has diverse and profound implications - including food security crises’, business shut-downs, critical infrastructure risks and social crises... More generally it can entail multi-network and delocalised cascading failure leading to a collapse in societal complexity.... This is a complex society’s equivalent of a heart attack. When a person has a heart attack, there is a brief period during which CPR can revive the person. But beyond a certain point when there has been cascading failure in co-dependent life support systems, the person cannot be revived. The extent of our contemporary complex global system dependencies, and our habituation to a long period of broadly stable economic and complexity growth means a systemic collapse would present profound and existential challenges."

 
Tyler Durden's picture

Frontrunning: October 2





  • U.S. Government Shut Down With No Quick Resolution Seen (BBG)
  • 12 House Republicans now say they’d back a ‘clean’ CR (WaPo)
  • Republicans’ 2014 Senate Edge Muddied by Shutdown Message (BBG)
  • Obama Shortens Asia Trip Due to Government Shutdown (WSJ)
  • Fed Said to Review Commodities at Goldman, Morgan Stanley (BBG)
  • Foreign Firms Tap U.S. Gas Bonanza (WSJ)
  • Behind Standoff, a Broken Process in Need of a Broker (WSJ)
  • Japan Awaits Abe’s Third Arrow as Companies Urged to Invest (BBG)
  • Microsoft investors push for chairman Gates to step down (Reuters)
 
Tyler Durden's picture

Guest Post: America's Endless Budget Battle





Perhaps investors are becoming inured to the United States’ annual debt-ceiling debacle, now playing out for the third year in a row. But, as the short-term antics become more routine, the risks of long-term dysfunction become more apparent. At least for now, the rest of the world has seemingly unbounded confidence – reflected in very low borrowing rates – in America’s capacity to put its house (of representatives) in order. No one can imagine that a country with so many unique economic advantages would risk such a damaging self-inflicted wound as default would cause. But this time could be different. Obama needs to force his Republican opponents to blink, and there is no guarantee that they will.

 

 
Tyler Durden's picture

Key Events And Issues In The Coming Week





In the upcoming week markets will continue to focus on these fiscal issues in the US, now that a temporary Government shutdown past Tuesday is assured. Still on the fiscal side but outside the US, look forward to Prime Minister Abe announcing his final decision on the VAT hike as well as unveiling a widely anticipated economic stimulus package. Finally, fiscal policy also played a role in the Italian political instability with four ministers resigning from the coalition Government. The backdrop to these events is a rapid deterioration of the political climate after former PM Berlusconi was convicted of tax evasion by a High Court.

 
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