http://www.zerohedge.com/fullrss2.xml/wp-content/plugins/uBillboard/Korean%20Buying%20Spree%20Boosts%20Brent%20Price en Something Just Snapped In VIX http://www.zerohedge.com/news/2016-06-27/something-just-snapped-vix <p>With <a href="http://www.zerohedge.com/news/2016-05-17/someone-really-wants-market-crash">ETF shares outstanding spiking and near-record short futures exposure in the VIX complex</a>, <strong>something is breaking as after-hours trading </strong>is showing some significant moves higher in VIX futures and ETFs. Whether this is a short Vol margin call or, as some havs suggested, delayed dark pool prints showing up, it is sending algos scrambling...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD18.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD18_0.jpg" style="width: 600px; height: 483px;" /></a></p> <p>VIX Futures surging after hours...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD16.jpg"><img height="423" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD16_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>as VIX ETFs spike...</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD15.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD15_0.jpg" style="width: 600px; height: 844px;" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD17.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD17_0.jpg" style="width: 600px; height: 441px;" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1060" height="853" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160627_EOD18.jpg?1467060476" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/something-just-snapped-vix#comments After Hours Mon, 27 Jun 2016 20:44:31 +0000 Tyler Durden 564667 at http://www.zerohedge.com "Death To All Zombies!" http://www.zerohedge.com/news/2016-06-27/death-all-zombies <p><a href="http://kunstler.com/clusterfuck-nation/death-to-all-zombies/"><em>Submitted by Howard Kunstler via Kunstler.com,</em></a></p> <p>Wait a minute. They’re already dead. <strong>Brexit just reveals that not everybody’s brains have been eaten</strong>. A viral contagion now threatens the zombified institutions of daily life, especially the workings of <strong>politics and finance</strong>. Just as zombies exist only in the collective imagination, so do these two principal activities of society operate mainly on trust, an ephemeral product of the hive-mind.</p> <p><strong>When things fall apart in stressed complex systems, they tend to fall apart fast</strong>. It’s called phase change. Too many things in 21st century life have depended on <strong>sheer trust that the people-in-charge know what they are doing</strong>. That trust has subsisted on the doling out of money-from-nothing: debt, reckless bond issuance. TARP, QEs, bailouts, bail-ins, Operation Twists, Ponzi schemes… the whole sad-ass armamentarium of banking necromancy. The politicians let it get out of hand. T<strong>hings that can’t go on don’t, and now they won’t.</strong></p> <p><strong>The politics of Great Britain are now falling apart landslide-style.</strong> Since just about everybody in or near power can be blamed for the national predicament, there’s nobody to turn to, at least not yet. The Labour party just acted out The Caine Mutiny, starring Jeremy Corbyn as Captain Queeg. The Tory Cameron gave three months notice without any plausible replacement in view. Now Cameron’s people are hinting in the media that they can just drag their feet on Brexit, that is, not do anything to enable it from actually happening for a while. <strong>Of course, that’s what the monkeyshines of banking and finance have done: postponed the inevitable reckoning with the realities of our time: growing resource scarcity, population overshoot, climate change, ecological holocaust, and the diminishing returns of technology.</strong></p> <p><span style="text-decoration: underline;"><strong>Britain illustrates the problem nicely: how to produce “wealth” without producing wealth.</strong></span> It’s called “the City,” their name for the little district of London that is their Wall Street. In the absence of producing real things, the City became the driver of the UK’s economy, a ghastly parasitical organism that functioned as the central transfer station for the world’s swindles and frauds, churning the West’s dwindling residual capital into a slurry of fees, commissions, arbitrages, rigged casino bets, and rip-offs. In the process, it enabled the European Central Bank (ECB) to run the con-job that the European Union (EU) became, with the fatal distortions of credit that have put its members into a ditch and sent the private European banks off a cliff, Thelma and Louise style.</p> <p><strong>The next stage of this protean global melodrama is what happens when currencies and interest rates become completely unglued from their assigned roles as patsies in financial racketeering. </strong>Sooner or later we’ll know what’s going on in the vast shadowy gloaming of “derivatives,” especially the “innovative” arrangements that affect to be “insurance” against losses in currency and interest rate “positions” — bets made on the movements of these things. When currencies rise or fall quickly, these so-called “swaps” are “triggered,” and then some hapless institution is left holding a big bag of dog-shit. A zombie is a terrible thing to behold, but a zombie holding a bag of dog-shit is like unto the end of the world.</p> <p><strong>Once this contagion starts burning, the people-in-charge won’t be able to quell it the way they did last time: by drowning it in torrents of money-from-nowhere. </strong>At least not without inducing real-deal inflation, the kind that leads to epochal ruin and more intense political upheaval: the nation-changing kind. We’re about five minutes away from that in the USA already, with the loathsome duo of Hillary and Trump putting on a Punch and Judy show for a disgusted public. If nothing else, Hillary and Trump represent the withering of political trust in America. The parties that spawned them are also whirling around the drain of credibility. <span style="text-decoration: underline;"><strong>They won’t survive in the form we knew them.</strong></span></p> <p><em><span style="text-decoration: underline;"><strong>Who knows what comes out of this vacuum, what rough beast slouches towards Washington.</strong></span></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="287" height="156" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160627_zombie.jpg?1467058780" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/death-all-zombies#comments Bond European Central Bank European Union Racketeering TARP Mon, 27 Jun 2016 20:40:00 +0000 Tyler Durden 564666 at http://www.zerohedge.com Bonds & Bullion Bid But Brexit Blowback Batters Banks http://www.zerohedge.com/news/2016-06-27/bonds-bullion-bid-brexit-blowback-batters-banks <p><em>&quot;You silly sod, you got us all worked up over a little [Brexit]...&quot;</em></p> <p><iframe allowfullscreen="" frameborder="0" height="360" src="https://www.youtube.com/embed/92gP2J0CUjc" width="480"></iframe></p> <p>&nbsp;</p> <p>European bank stocks were a bloodbath...Worst.Drop.Ever...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_banks3.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_banks3_0.jpg" style="width: 600px; height: 305px;" /></a></p> <p>&nbsp;</p> <p>But US Financials were not immune, catching down to Treasuries&#39; reality...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD2.jpg"><img height="316" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD2_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>US Financials are down the most since Summer 2011&#39;s US Downgrade...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD1.jpg"><img height="390" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD1_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>Citi, BofA, and MS all spanked with GS outperforming JPM... but still ugly...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD9.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD9_0.jpg" style="width: 600px; height: 373px;" /></a></p> <p>&nbsp;</p> <p>As The Dimon Bottom looms...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_dimon.jpg"><img height="361" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_dimon_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>Since Brexit was unleashed, Bullion (+6%), and Bonds (+4%) are dramatically outperforming as Cable and Financials make new lows...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD10.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD10_0.jpg" style="width: 600px; height: 435px;" /></a></p> <p>&nbsp;</p> <p>Nasdaq is down over 7% since Brexit...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD12.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD12_0.jpg" style="width: 600px; height: 404px;" /></a></p> <p>&nbsp;</p> <p>Trannies are the worst cash index since Brexit...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD13.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD13_0.jpg" style="width: 600px; height: 439px;" /></a></p> <p>&nbsp;</p> <p>Dow is down over 1000 points...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD14.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD14_0.jpg" style="width: 600px; height: 361px;" /></a></p> <p>&nbsp;</p> <p>Every affort was made to keep the S&amp;P 500 above 2,000...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD11.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD11_0.jpg" style="width: 600px; height: 394px;" /></a></p> <p>&nbsp;</p> <p>VIX ETFs are pushing higher after hours like yesterday...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD15.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD15_0.jpg" style="width: 600px; height: 844px;" /></a></p> <p>&nbsp;</p> <p>Treasury yields continued to plummet post-Brexit...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD3_0.jpg" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p><u><strong>With 2s10s at it slowest since Nov 2007...when the last recession started!</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD4_0.jpg" style="width: 600px; height: 301px;" /></a></p> <p>&nbsp;</p> <p>The USD Index spiked to 3 month highs...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD5.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD5_0.jpg" style="width: 600px; height: 317px;" /></a></p> <p>&nbsp;</p> <p><u><strong>This is the biggest 2-day spike in The USD Index since 1992...</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD6.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD6_0.jpg" style="width: 600px; height: 282px;" /></a></p> <p>&nbsp;</p> <p>Gold gained modestly on the day as crude tumbled...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD7.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD7_0.jpg" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>Seriously... every single fucking day...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD8.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD8_0.jpg" style="width: 600px; height: 361px;" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="600" height="100" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160627_EOD.jpg?1467055277" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/bonds-bullion-bid-brexit-blowback-batters-banks#comments 2s10s 2s10s 2s10s. After Hours Crude NASDAQ Reality Recession Mon, 27 Jun 2016 20:24:11 +0000 Tyler Durden 564664 at http://www.zerohedge.com The Last Time Bonds Were Here, The Recession Started http://www.zerohedge.com/news/2016-06-27/last-time-bonds-were-here-recession-started <p><strong>The US Treasury yield curve has collapsed to its flattest since Nov 2007</strong>... just before the US economy officially slumped into recession...</p> <p><span style="text-decoration: underline;"><strong>&nbsp;</strong></span><em>"There can't be a recession... the yield curve is not inverted..."</em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD4.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD4_0.jpg" style="width: 600px; height: 301px;" /></a></p> <p>&nbsp;</p> <p>Perhaps US banks are starting to realize the inevitable also?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD2.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_EOD2_0.jpg" width="600" height="316" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="964" height="483" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160627_EOD4.jpg?1467057271" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/last-time-bonds-were-here-recession-started#comments Recession Yield Curve Mon, 27 Jun 2016 20:15:00 +0000 Tyler Durden 564663 at http://www.zerohedge.com Chicago Is Pushing For A Massive Bailout Of Its Public School System http://www.zerohedge.com/news/2016-06-27/chicago-pushing-massive-bailout-its-public-school-system <p>It is well known that <strong>Chicago&#39;s pension liabilities have completely decimated the city&#39;s finances and currently stand at <a href="http://www.zerohedge.com/news/2016-05-20/chicago-pension-liabilities-jump-168-understated-115-billion">close to $20 billion</a></strong>. Faced with a significant challenge of meeting funding obligations as a result of a 2010 state law, Mayor <strong>Rahm Emanuel recently won a slight reprieve in the amount of money the city would have to contribute to fund the liabilities over the next few years</strong>, as recently <a href="http://www.zerohedge.com/news/2016-06-01/illinois-lawmakers-override-bill-veto-ease-chicago-pension-payments-propose-financia">Illinois lawmakers overrode</a> Governor Bruce Rauner&#39;s veto and will now change the legislation in order to allow the city to defer payments to fund pensions.</p> <p>Under the prior legislation, Chicago was required to have its public safety workers pensions 90% funded by 2040, and called for an $834 million payment to be made in 2016 alone. The revised legislation reduces that amount to $619 million, and allows for smaller increases through 2020 while pushing the timeline for 90% funding out to 2055 - at which time the timeline will be extended once again of course, as it will never be possible for the City to come up with such funds.</p> <p>Perhaps riding high on that small victory, <span style="text-decoration: underline;">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</span> - <strong>said differently, Rahm Emanuel wants to bail out the Chicago Public School system</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/06/27/20160627_rahmemanuel.JPG"><img height="489" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/06/27/20160627_rahmemanuel_0.JPG" width="600" /></a></p> <p>Although as expected, <strong>nobody wants to refer to the maneuver as a bailout, only as an &quot;investment.&quot;</strong></p> <p>From the <a href="http://www.chicagotribune.com/news/local/politics/ct-chicago-cps-borrowing-met-20160624-story.html">Chicago Tribune</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Emanuel this past week quietly proposed a change to city investment rules that would allow the city to buy debt from so-called sister agencies, including CPS, no matter the creditworthiness of that debt</strong>. He said he was making the request on behalf of city Treasurer Kurt Summers as part of the Summers&#39; annual investment policy update.</p> <p>&nbsp;</p> <p>Aides for both Emanuel and Summers said the proposal was not designed to give the city a way to provide temporary funding to CPS as it seeks state help to right its teetering financial ship. &quot;That&#39;s not what&#39;s happening,&quot; city spokeswoman Molly Poppe said. <strong>&quot;This is not some contingency plan or bailout for CPS.&quot;</strong></p> <p>&nbsp;</p> <p>Instead, they said, it&#39;s meant to give the treasurer the option of investing in bonds, short-term loans or other types of debt from CPS &mdash; and other agencies like the Chicago Housing Authority, Park District, CTA and City Colleges &mdash; just as the city has the option of buying its own debt.</p> </blockquote> <p><strong>CPS <a href="http://www.reuters.com/article/us-chicago-education-debt-idUSKCN0W50FR">carries roughly</a> a $6.2 billion debt load</strong>, and recently borrowed $725 million through a bond issuance. In March CPS indicated it would have to tap an existing $370 million credit line with Barclays to help pay a June 30 pension obligation in the amount of $676 million. CPS already <a href="http://www.chicagotribune.com/news/local/breaking/ct-chicago-schools-bond-rating-downgrade-met-0116-20160116-story.html">carries a junk rating</a> by all three major rating agencies.</p> <p>Nonetheless, the narrative that the bailout is actually an investment is fully in play.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;<strong>This change means that our sister agencies would no longer be treated any differently from an investment perspective than the city, as is commonplace throughout the country</strong>,&quot; said Alexandra Sims, senior adviser to Summers. &quot;<span style="text-decoration: underline;">The city has always had the ability to invest in municipal and state bonds</span>. This expands and allows us to invest in the city and all sister agencies as part of the treasurer&#39;s plan to invest in Chicago.&quot;</p> </blockquote> <p>* * *</p> <p>While Emanuel and other city officials pretend that the city is making an investment, it is quite likely that the bailout will mean a significant loss for taxpayers, who already feel the burden of severely under funded pensions as noted above. The reality is that tax hikes are coming, and this &quot;investment&quot; will need to be covered by future revenues from the taxpayers as well.</p> <p><strong>Eventually the reality that debt can&#39;t be forever used in place of honest fiscal reforms will be introduced to Chicago</strong> (and everyplace else, <a href="http://www.zerohedge.com/news/2016-06-09/bailout-nation-detroit-public-schools-receive-617-million-government-handout">Detroit for example</a>). Until then, those who actually do have a little money are going to <a href="http://www.zerohedge.com/news/2016-04-06/millionaires-are-fleeing-chicago-record-numbers">continue to flee cities such as Chicago</a>, as they see the writing on the wall.</p> <p>As a reminder, here is a heat map of where $100,000 pensions reside - notice anywhere in particular?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/06/27/20160627_pensionheatmap.JPG"><img height="661" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/06/27/20160627_pensionheatmap.JPG" width="649" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="724" height="590" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160627_rahmemanuel.JPG?1467034468" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/chicago-pushing-massive-bailout-its-public-school-system#comments Barclays Bond Credit Line Detroit Illinois Rahm Emanuel Rating Agencies Reality Tribune Mon, 27 Jun 2016 19:55:00 +0000 Tyler Durden 564653 at http://www.zerohedge.com Kremlin: Brexit Is Like Soviet Breakup http://www.zerohedge.com/news/2016-06-27/kremlin-brexit-soviet-breakup <p>The last leader of the Soviet Union, Mikhail Gorbachev, previously <a data-mce-="" href="http://www.goodreads.com/quotes/565258-the-most-puzzling-development-in-politics-during-the-last-decade">said</a>:</p> <p data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><em>The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe.</em></p> <p>And in the wake of Brexit, today&#39;s Kremlin <a data-mce-="" href="http://www.bloomberg.com/news/articles/2016-06-27/kremlin-says-brexit-turmoil-reminiscent-of-soviet-union-collapse">said</a> much the same thing:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>It&rsquo;s obvious that the U.K. is going through a &ldquo;turbulent, confusing and unpredictable period,&rdquo; Dmitry Peskov [Vladimir Putin&rsquo;s spokesman] told reporters on a conference call Monday. Russia &ldquo;has gone through the collapse of the Soviet Union and many generations clearly remember the period of the Soviet collapse, that period of uncertainty.&rdquo;</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>The USSR was dissolved in December 1991, more than 18 months after Lithuania led the Baltic republics in declaring independence.</p> </blockquote> <p>Given that the Soviet Union was anti-democratic and authoritarian, and that EU <a data-mce-="" href="http://www.zerohedge.com/news/2016-06-27/president-european-parliament-it-not-eu-philosophy-crowd-can-decide-its-fate">appears to be</a> pushing to <a data-mce-="" href="http://www.express.co.uk/news/politics/683739/EU-referendum-German-French-European-superstate-Brexit">destroy the sovereignty</a> of individual European nations, the analogy might not be that far off.</p> http://www.zerohedge.com/news/2016-06-27/kremlin-brexit-soviet-breakup#comments Lithuania Vladimir Putin Mon, 27 Jun 2016 19:38:12 +0000 George Washington 564662 at http://www.zerohedge.com Behold Corporate Incest http://www.zerohedge.com/news/2016-06-27/behold-corporate-incest <p><strong>The list of SolarCity directors who will vote on Tesla’s $2.86 billion bid is getting shorter,</strong> as <a href="http://www.bloomberg.com/news/articles/2016-06-27/family-and-money-tie-solarcity-board-to-prospective-buyer-tesla">Bloomberg reports</a> two more directors have recused themselves, as the<strong> incestuously deep connections between the two companies</strong> create clear potential conflicts of interest, according to analysts and experts in governance issues. </p> <p> A few of the directors are related by blood, others have through longstanding personal and professional relationships and some made significant investments in both companies...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_invcest.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_invcest_0.jpg" width="600" height="798" /></a></p> <p>&nbsp;</p> <p><em><strong>“The conflict is very ripe,” </strong></em>said Steven Davidoff Solomon, a professor at the University of California at Berkeley’s School of Law. <em><strong>“Elon Musk is entering into a transaction where he’s going to make hundreds of millions of dollars. The market isn’t happy about it. And they’re not playing by the usual conflict playbook. That’s a triple strike against them.”</strong></em></p> <p>Invest or Incest?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="400" height="110" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160627_invcest1.jpg?1467049070" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/behold-corporate-incest#comments University of California Mon, 27 Jun 2016 19:35:00 +0000 Tyler Durden 564652 at http://www.zerohedge.com Greenspan Warns A Crisis Is Imminent, Urges A Return To The Gold Standard http://www.zerohedge.com/news/2016-06-27/greenspan-warns-crisis-imminent-he-urges-return-gold-standard <p>On Friday afternoon, after the shocking Brexit referendum, <a href="http://www.zerohedge.com/news/2016-06-24/greenspan-worst-period-i-recall-theres-nothing-it">while being interviewed by CNBC Alan Greenspan stunned his hosts </a>when he said that things are about as bad as he has ever seen. </p> <p><strong>"This is the worst period, I recall since I've been in public service. There's nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. </strong>This has a corrosive effect that will not go away. I'd love to find something positive to say."</p> <p>Strangely enough, he was not refering to the British exodus but to America's own economic troubles. </p> <p>Today, Greenspan was on <a href="http://www.bloomberg.com/news/articles/2016-06-27/greenspan-calls-brexit-a-terrible-outcome-as-euro-area-tested">Bloomberg Surveillance where in an extensive</a>, 30 minutes interview he was urged to give his take on the British referendum outcome. According to Greenspan, David Cameron miscalculated and made a “terrible mistake” in holding a referendum. That decision led to a “terrible outcome in all respects,” Greenspan said. "It didn’t have to happen.” Greenspan then noted that as a result of Brexit, "<strong>we are in very early days a crisis which has got a way to go", </strong>and point to Scotland which he said will likely have another referendum on its own, predicting the vote would be successful, and Northern Ireland would “probably” go the same way. </p> <p>His remarks then centered on the Eurozone which he defined as a truly “vulnerable institution,” primarily due to Greece’s inclusion in its structure. “Get Greece out. They’re a toxic liability sitting in the middle of a very important economic zone." Ironically, the same Eurozone has spent countless hours doing everything in its power to show just how unbreakable the union is by preserving Greece, while it took the UK just one overnight session to break away. Luckily the UK was not part of the monetary union or else it would be game over.</p> <p>But speaking of crises, Greenspan warned that fundamentally it is not so much an issue of immigration, or even economics, but unsustainable welfare spending, or as Greenspan puts it, "entitlements." </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The issue is essentially that entitlements are legal issues.&nbsp; They have nothing to do with economics.&nbsp; You reach a certain age or you are ill or something of that nature and you are entitled to certain expenditures out of the budget without any reference to how it's going to be funded.&nbsp; Where the productivity levels are now, we are lucky to get something even close to two percent annual growth rate.&nbsp; That annual growth rate of two percent is not adequate to finance the existing needs.</p> <p>&nbsp;</p> <p><strong>I don't know how it's going to resolve, but there's going to be a crisis.</strong></p> <p>&nbsp;</p> <p>This is one of the great problems of democracy.&nbsp; It goes back to the founding fathers.&nbsp; How do you handle a situation like this?&nbsp; And it's very troublesome, but eventually you get things like Margaret Thatcher showing up in Britain.&nbsp; Their situation is far worse than ours.&nbsp; And what she did is she turned it all around essentially by, as I remember it, the miners were going to strike and she decided - she knew they were going to strike.&nbsp; Since at that point, the government owned these coal mines, she built up a huge inventory so that when they went on strike, there was enough coal in Britain so that eventually the whole union structure collapsed.&nbsp; She fundamentally changed Britain to this day.&nbsp; The fact that we are doing so well in the E.U. is not altogether clear that it is the E.U. or whether it was Margaret Thatcher. </p> </blockquote> <p>When asked if <strong>"we need an accident of history" </strong>to address this, Greenspan replied "<strong>Probably. </strong>In the United States, social benefits, which is the more generic term, or entitlements, are considered the third rail of American politics.&nbsp; You touch them and you lose.&nbsp; Now, that is a general view.&nbsp; Republicans don't want to touch it.&nbsp; Democrats don't want to touch it.&nbsp; They don't even want to talk about.&nbsp; This is what the election should be all about in the United States.&nbsp; You will never hear one word from either side.&nbsp; "</p> <p>This is the same entitlements crisis that Stanley Druckenmiller has also been raging about for years, most recently in his "<strong>The Endgame</strong>" <a href="http://www.zerohedge.com/news/2016-05-07/stan-druckenmiller-endgame-his-full-apocalyptic-presentation">presentation delivered at the Ira Sohn conference</a>.</p> <p>Greenspan then went on to bash the false "recovery" narrative, warning that "<strong>the fundamental issue is the fact that productivity growth has ground to a halt."&nbsp;</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>&nbsp;</strong>We are running out of people.&nbsp; In other words, everyone is very pleased at the fact that the employment rate is rising.&nbsp; Well, statistics tell us that we need more and more people to produce less and less.&nbsp; That is not a prescription for a viable political system.&nbsp; <strong>And so what we have at this stage is stagnation.&nbsp; I don't think that there is anything out there which suggests that there is a recession, but I don't know that.&nbsp; </strong>What I do know is that the money supply, and too, which has always been a critical indicator of inflation, is for the first time going up remarkably steadily 6 percent, 7 percent, almost a straight line.&nbsp; It's tilted up in the last several months.&nbsp; It's added a percentage point or two.&nbsp; The thing that we should be worrying about now, which we have actually given no thought to whatsoever, is that this type of economic environment ends with inflation.&nbsp; Historically, fiat money has always ended up that way.</p> </blockquote> <p>And here we get to the heart of the matter, because in not so many words, Greenspan effectively says that hyperinflation is coming:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>I know if you look at human history, there are times and times again where we thought that there was no inflation and everything was just going fine.&nbsp; And I just basically say, wait.&nbsp; This is not the way this thing ordinarily comes up.&nbsp; I don't know.&nbsp; I cannot say I see it on the horizon.&nbsp; In fact, commodity prices are soggy.&nbsp; The oil prices has had a terrific impact on global inflation.&nbsp; It's not about to emerge quickly, but I would not be surprised to see the next unexpected move to be on the inflation side.&nbsp; <strong>You don't have inflation now.&nbsp; And you don't have it until it happens</strong>.</p> </blockquote> <p>Of course, Greenspan ignores his own role in the creation of the boom-bust cycle which has doomed the world to series of ever more destructive bubbles and ultimately, <strong>hyperinflation </strong>which will likely be unlashed once the helicopter money inevitably arrives. In retrospect, the 90-year-old, who clearly is looking forward not backward, has a simple solution: <strong>the gold standard</strong>.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>If we went back on the gold standard and we adhered to the actual structure of the gold standard as it exited prior to 1913, <strong>we'd be fine.&nbsp; Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we've had in the United States, and that was a golden period of the gold standard.&nbsp; I'm known as a gold bug and everyone laughs at me, but why do central banks own gold now</strong>?</p> </blockquote> <p>Why indeed. And of course, that's rhetorical. </p> <p>* * * </p> <p><em>His full interview is below.</em></p> <p><iframe src="http://www.bloomberg.com/api/embed/iframe?id=vonib4rJQUWNmcsXcjm4cQ" width="540" height="320" frameborder="0"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1063" height="599" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/greenspan%20bbg%20interview.jpg?1467055624" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/greenspan-warns-crisis-imminent-he-urges-return-gold-standard#comments Alan Greenspan Central Banks Eurozone Greece Hyperinflation Ira Sohn Ireland Money Supply Recession recovery Mon, 27 Jun 2016 19:22:58 +0000 Tyler Durden 564661 at http://www.zerohedge.com President Of The European Parliament: "It Is Not The EU Philosophy That The Crowd Can Decide Its Fate" http://www.zerohedge.com/news/2016-06-27/president-european-parliament-it-not-eu-philosophy-crowd-can-decide-its-fate <p>If anyone needs another confirmation that the European Union is fundamentally the most anti-democratic entity currently in existence, then the following statement by European Parliament Martin Schultz should put all confusion to rest. </p> <p><em>Schulz: </em>"<strong>The British have violated the rules. It is not the EU philosophy that the crowd can decide its fate</strong>".</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Schulz: "The British have violated the rules. It is not the <a href="https://twitter.com/hashtag/EU?src=hash">#EU</a> philosophy that the crowd can decide its fate". <a href="https://twitter.com/hashtag/TBC?src=hash">#TBC</a> <a href="https://t.co/z0mujO09eG">https://t.co/z0mujO09eG</a></p> <p>— TaleofTwoTreaties (@Taleof2Treaties) <a href="https://twitter.com/Taleof2Treaties/status/747394593222762496">June 27, 2016</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p> Confused: Here is what Deutsche Bank <a href="http://www.zerohedge.com/news/2016-06-27/deutsche-bank-theres-no-escaping-fact-class-war">said earlier today</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The shockwaves and consequences around Brexit will resonate for years. It's probably an understatement to say that most in financial markets regret the UK's decision to leave but we should respect the forces that have been pushing us towards what has always been an inevitable political accident sometime soon. I wasn't sure whether the Brexit vote was the one but I was pretty convinced one was coming and this is probably not the last. Spain yesterday started a general election cycle (more below but relatively market friendly) of the largest 5 euro-area economies (Spain, Holland, France, Germany and Italy) over the next 18 months or so, not forgetting the US this November. Throw in the crucial senate reform vote in Italy in October and you've got plenty of opportunity for rebellion against the establishment that haven't managed to produce satisfactory enough growth for the lower paid/lower skilled to offset the forces of globalisation and immigration. </p> <p>&nbsp;</p> <p>It's worth looking at the voting split in the UK's EU referendum based on polls compiled by Lord Ashcroft to get an idea of the disenfranchisement. In terms of socio-economic groups, 57% of ABs (upper/middle class - professional/managers etc) voted remain, 49% of C1s (lower middle class - supervisory/clerical or junior management/administrative), 36% of C2s (skilled working class) and 36% of DEs (Ds - semi &amp; unskilled manual workers. Es - casual/lowest grade worker or state pensioner). <span style="text-decoration: underline;"><strong>So there's no escaping the fact that this is a class war</strong></span>. Whether its globalisation, immigration, inequality, poor economic growth or a combination of all of them <strong>it's quite clear from this and other anti-establishment movements that the status quo can't last in a democracy</strong>. Eventually you'll have a reaction. This is one such major reaction and given that the UK growth rate has been ok of late, it would be strange if pressure didn't continue to build elsewhere where growth has been lower for longer.</p> </blockquote> <p>It is indeed a class war, and the European "Union" is not used to losing... </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="600" height="369" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/martin%20schultz.jpg?1467045403" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/president-european-parliament-it-not-eu-philosophy-crowd-can-decide-its-fate#comments Deutsche Bank ETC European Union France Germany Italy Mon, 27 Jun 2016 19:17:21 +0000 Tyler Durden 564642 at http://www.zerohedge.com Earthquakes Cause Giant Natural Gas Field To Cut Production By 44% http://www.zerohedge.com/news/2016-06-27/earthquakes-cause-giant-natural-gas-field-cut-production-44 <p><a href="http://oilprice.com/Energy/Natural-Gas/Earthquakes-Cause-Giant-Natural-Gas-Field-To-Cut-Production-By-44.html"><em>Submitted by Dave Forest via OilPrice.com,</em></a></p> <p><strong>Europe just lost a big chunk of production from one of its most critical natural gas fields</strong>, and not for any of the usual reasons &mdash; technical problems, pipeline constraints, or terrorist disruptions.</p> <p><u><em><strong>These cuts are due to earthquakes.</strong></em></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_quake1.jpg"><u><em><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160627_quake1.jpg" style="width: 516px; height: 434px;" /></strong></em></u></a></p> <p>The development came at the Groningen natgas field in the Netherlands. <strong>The largest producing field in Western Europe &mdash; and one of the world&rsquo;s top 10 gas fields by size.</strong></p> <p>Groningen&rsquo;s massive size has been an issue lately though, with drawdown from the field having caused seismic events in the areas above and surrounding the field.</p> <p><u><strong>Such concerns prompted the Dutch government to take action Friday. </strong></u>With the country&rsquo;s Economics Minister Henk Kamp saying that <a href="http://timesofindia.indiatimes.com/business/international-business/Dutch-to-slash-gas-production-in-EUs-biggest-field/articleshow/52906436.cms">regulators will reduce Groningen&rsquo;s permitted output by 11.1 percent</a> &mdash; to 24 billion cubic meters per year (850 billion cubic feet), down from a previous allowance of 27 billion cubic meters.</p> <p>Minister Kamp also said that the reduced production quota will stay in effect for the next five years. <strong>This means that Europe has lost a significant slice of its go-to production for the foreseeable future.</strong></p> <p>This latest production cut continues a dramatic slide in Groningen&rsquo;s output over the past 18 months. With the Dutch government deciding in early 2015 to cut production from 42.5 billion cubic feet annually to 39 billion cubic feet &mdash; and then further <a href="http://piercepoints.com/a-massive-natgas-production-cut-you-didnt-hear-about/">reducing the quota to 33 billion</a> cubic feet just a few months later.</p> <p>The further cuts announced Friday come after high-level Dutch regulatory body the Council of State ordered the government to take more action in protecting the public. With Minister Kamp saying that <u><strong>the new production cap would &ldquo;reduce safety risks to Groningen&rsquo;s residents and damage to buildings.&rdquo;</strong></u></p> <p>The Minister did say that production could be increased above the quota in the event of exceptionally cold weather or other instances of strict necessity. But overall it appears that Groningen&rsquo;s output is going to be 44 percent lower than it was less than two years ago &mdash; which could put upward pressure on prices in the European market.</p> <p><strong>That could have a number of knock-on effects.</strong> Including attracting more liquefied natural gas (LNG) to Europe &mdash; with countries here having a lot of under-used import capacity right now. <strong><em>Watch for the effects of the Dutch shut-in on prices &mdash; and structural changes in this market as a result.</em></strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="632" height="267" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160627_quake.jpg?1467047988" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-27/earthquakes-cause-giant-natural-gas-field-cut-production-44#comments Natural Gas Netherlands Mon, 27 Jun 2016 18:55:00 +0000 Tyler Durden 564650 at http://www.zerohedge.com