http://www.zerohedge.com/fullrss2.xml/feed en Compound W http://www.zerohedge.com/news/2016-06-29/compound-w <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">I haven't done many&nbsp;<a href="http://slopeofhope.com/category/real-estate/" target="_blank" style="color: #21759b; outline: none;">real estate posts</a>&nbsp;lately, although, as an update to&nbsp;<a href="http://slopeofhope.com/2016/04/ten-million-dollars.html" target="_blank" style="color: #21759b; outline: none;">this one</a>&nbsp;(in which an empty dirt lot was being offered for<strong>&nbsp;$10 million</strong>) I'll mention that although the For Sale sign seemed to linger longer than usual, it was&nbsp;supplemented&nbsp;with a SOLD sign yesterday. So I guess the Chinese are still buying.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">I've become quite inured to the lunacy of Silicon Valley real estate, so not much surprises me anymore, but I saw&nbsp;<a href="http://3485middlefield.com/" target="_blank" style="color: #21759b; outline: none;">a full page color ad</a>&nbsp;this morning in&nbsp;<strong>Gentry</strong>&nbsp;magazine (which is a free magazine they distribute around here, packed with a combination of real estate ads, for the tech zillionaires, and plastic surgery ads, for their vain spouses) that demands a post. So I'm writing it, you lucky so-and-so.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">The color photographs featured the most blase, ordinary, McMansion style place you could imagine, but the headline was.......</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="http://slopeofhope.com/wp-content/uploads/2016/06/0629-luxury.png" style="color: #21759b; outline: none;" rel="attachment wp-att-57521"><img src="http://slopeofhope.com/wp-content/uploads/2016/06/0629-luxury.png" alt="0629-luxury" width="821" height="244" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-57521" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Luxury. Compound. Now, when I think of a&nbsp;<strong>luxury compound</strong>, I think of a multi-acre property of a rich family with a number of fine-looking houses. It's probably relatively remote, and who knows, it might even have some private security guards on the premises. Think of the Corleone residence on Lake Tahoe in Godfather II, and&nbsp;<strong>that's</strong>&nbsp;a family compound.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><img src="http://m.wsj.net/video/20140123/012314mansionhoy/012314mansionhoy_1280x720.jpg" width="1280" height="720" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone" /></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">What does&nbsp;<strong>not</strong>&nbsp;spring to mind when I think of family compound is what is being sold here, which is.......</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><img src="http://slopeofhope.com/wp-content/uploads/2016/06/0629-pavers.png" alt="0629-pavers" width="782" height="452" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-57524" /></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">(<em>Side note</em>: I urge you to buy this house if you really,&nbsp;<strong>really</strong>&nbsp;like lots of paver stones on top of your now-inaccessible soil).</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Now, I don't smoke, but if I did, I might ponder the term "luxury compound", look at the above picture, light my pipe, lean back in my leather arm chair, and ask: "Are you fucking&nbsp;<em>kidding</em>&nbsp;me?"</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">I've lived in Palo Alto since 1984, and I know the town very, very well. The location is on a very noisy, rather ugly street called Middlefield, and the house is constructed right next to a church that was built (cheaply) probably in 1940 or so..........</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="http://slopeofhope.com/wp-content/uploads/2016/06/0629-church.png" style="color: #21759b; outline: none;" rel="attachment wp-att-57522"><img src="http://slopeofhope.com/wp-content/uploads/2016/06/0629-church.png" alt="0629-church" width="842" height="338" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-57522" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">The neighborhood is the kind you'd expect, with houses built in the 1950s that are small and were probably at the time very affordable for working class and/or middle class families. Here is the view&nbsp;<strong>directly</strong>&nbsp;across the street from the, umm, family compound.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="http://slopeofhope.com/wp-content/uploads/2016/06/0629-neighb.png" style="color: #21759b; outline: none;" rel="attachment wp-att-57523"><img src="http://slopeofhope.com/wp-content/uploads/2016/06/0629-neighb.png" alt="0629-neighb" width="997" height="430" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-57523" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">So, look, I don't expect the good people of the real estate industry to be models of probity, but exactly how&nbsp;<strong>dumb</strong>&nbsp;do they think we are?</p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="782" height="452" alt="" src="http://www.zerohedge.com/sites/default/files/images/user44944/imageroot/0629-pavers.png?1467220183" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/compound-w#comments Real estate Wed, 29 Jun 2016 17:09:47 +0000 Tim Knight from Slope of Hope 564776 at http://www.zerohedge.com BofA: To Save Markets Central Banks Just Made Inequality And Populism Even Worse http://www.zerohedge.com/news/2016-06-29/irony-brexit-another-1-trillion-negative-yields-brings-total-staggering-11-trillion <p>There is a large dose of irony to the post-Brexit market response: while on one hand stocks have soared and as of today the S&amp;P500 has already recouped more than half its post-Brexit losses (the SPX sank 5.7% peak-to-trough since the referendum and has since bounced 3.5%) an even sharper reaction has been observed in bonds. As BofA's Barnaby Martin points out, "the irony of recent events is that the combination of risk-off sentiment and expectations of further central bank support has caused another surge in negative yielding debt…<strong>which will only compound the issues of wealth inequality and populism</strong>."</p> <p> This in turn will lead to more Brexit-type events, resulting in even more forcible reactions by central banks, even more multiple expansion, even higher stock prices, even lower bond yields, even more scramble for yield and risk, and even more inequality, and so on until something snaps.</p> <p><em>The details:</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Since last Thursday’s Brexit, the stock of global negative yielding fixed-income debt has jumped by almost $1tr, and now stands just shy of $11 trillion (chart 12).</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/barnaby%20yields.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/barnaby%20yields_0.jpg" width="500" height="185" /></a></p> <p>&nbsp;</p> <p>Note that Japan is a big driver of this, as market doubts over Abenomics grow. Japan’s negative debt now stands at $6.2tr, almost 70% more than the amount of Eurozone negative debt ($3.7tr), despite the latter having a large amount of negative yielding corporate, agency and securitized bonds.</p> <p>&nbsp;</p> <p>No wonder then that more institutions are becoming vocal in their criticism of central bank largesse. Note the BIS over the weekend, in their latest annual report, <strong>arguing that easy central bank policies may well be a contributing factor to the rise of boom and bust economic cycles.</strong></p> </blockquote> <p>And some thoughts from BofA on the biggest Catch 22: <strong>Monetary policy and populism</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The post-mortems of how Brexit came to be are still being written. While the economic and social issues at stake were profound and polarizing, many struggled to truly grasp their scope. Understandably, a perception versus reality gap was clear (chart 8).</p> <p>&nbsp;</p> <p>In the end, populism – and a vote away from the status quo – was a likely Brexit driver. Voter anger over themes such as income inequality played its part (see Michael Hartnett’s Wall St. vs. Main St. phenomenon here). As Chart 9 shows, the wealthiest 10% of households in the UK own 45% of aggregate total wealth. And the wealthiest 10% of UK households are over 5x wealthier than the bottom 50% of households…</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/barnaby%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/barnaby%201_0.jpg" width="500" height="190" /></a></p> <p>&nbsp;</p> <p>But, paradoxically, <strong>today’s extraordinary monetary policy backdrop is likely adding to voter angst and exacerbating the theme of rising wealth inequality, rather than reducing it. As we highlighted last October, consumer savings rates have gone up in countries where central banks are being the most aggressive with their interest rate policies.</strong> Chart 10 shows that household savings rates have gone up in Denmark, Switzerland and Sweden recently. In the case of Denmark, the rise was notable in 2015 and coincided with the Danish Central Bank moving rates into very negative territory (CD rates were quickly cut to -75bp in early 2015).</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/barnaby%202.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/barnaby%202_0.jpg" width="500" height="188" /></a></p> <p>&nbsp;</p> <p>“Animal spirits” on the consumer side have not as yet flourished. <strong>Low yields are likely driving concerns over future income generation </strong>(i.e. retirement), <strong>and thus contributing to higher consumer savings rates…and paradoxically the feeling of higher wealth inequality. </strong>And so as chart 11 shows, policy uncertainty – and populism – is becoming a much broader affair.</p> </blockquote> <p>But for now the very catalyst - i.e., monetary policy - that led to Brexit and caused the latest and most vocal yet response by central banks, is ignored because as Germany's finance minister said it best:</p> <ul> <li><strong>SCHAEUBLE: EU MINISTERS, G-7 AGREED TO AVOID MARKET CHAOS</strong></li> </ul> <p>Because that's all that really matters. </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="242" height="204" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/yellen%20mario.jpg?1467219137" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/irony-brexit-another-1-trillion-negative-yields-brings-total-staggering-11-trillion#comments Abenomics BIS Bond Central Banks Eurozone Japan Monetary Policy Reality Switzerland Wed, 29 Jun 2016 17:08:30 +0000 Tyler Durden 564770 at http://www.zerohedge.com Hillary Superpac Has Taken $200,000 In Banned Donations http://www.zerohedge.com/news/2016-06-29/hillary-superpac-has-taken-200000-banned-donations <p>These past few weeks have been quite interesting for Hillary Clinton. We learned that <strong>Clinton<a href="http://www.zerohedge.com/news/2016-06-24/hillary-clinton-omitted-one-key-email-state-department"> omitted one key email</a></strong> from the State Department, that Hillary&#39;s official <strong>State Department calendar<a href="http://www.zerohedge.com/news/2016-06-24/hillarys-official-calendar-while-secretary-state-missing-lot-entries"> is missing a lot of entries</a></strong>, and we were reminded that it can be <a href="http://www.zerohedge.com/news/2016-06-28/democrats-accidentally-reveal-how-lucrative-it-be-friend-clintons">quite <strong>lucrative</strong></a><strong> to be a friend of Hillary</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/06/29/20160629_clinton_0.JPG"><img height="446" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/06/29/20160629_clinton_0.JPG" width="600" /></a></p> <p>Now, courtesy of <a href="http://thehill.com/homenews/campaign/285269-exclusive-pro-hillary-group-takes-200k-in-banned-donations">The Hill</a>, we find that a super-PAC backing Clinton has<strong> accepted $200,000 in donations from a company holding multiple contracts with the federal government,</strong> despite a ban on such contributions. <strong>Said otherwise, the super-PAC is engaged in a pay-to-play deal</strong>. According to a review, Boston-based Suffolk Construction made two contributions of $100,000 to Priorities USA, who is backing Hillary Clinton for president.</p> <p>From <a href="http://thehill.com/homenews/campaign/285269-exclusive-pro-hillary-group-takes-200k-in-banned-donations">The Hill</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>According to a review of contributions by The Hill, <strong>Boston-based Suffolk Construction made two contributions of $100,000 to Priorities USA, which is backing the presumptive Democratic presidential nominee</strong>.</p> <p>&nbsp;</p> <p><strong>At the time it made the contributions, Suffolk held multiple contracts worth $976,560 with the Department of Defense for maintenance and construction projects at a Naval base in Newport, R.I., and the U.S. Military Academy in West Point, N.Y</strong>., according to the government website USASpending.gov.</p> <p>&nbsp;</p> <p>Suffolk &mdash; which, by Forbes&rsquo;s estimate, brings in some $2 billion in revenue annually &mdash; also donated $10,000 in 2015 to Right to Rise, a super-PAC that supported Republican Jeb Bush&rsquo;s now-defunct presidential bid.</p> <p>&nbsp;</p> <p>The donations from Suffolk highlight how a 70-year-old campaign finance law meant to prevent pay-to-play deals between public officials and companies making money from the government is often ignored by those making the donations and those on the receiving end.</p> <p>&nbsp;</p> <p>The two contributions, one made in July and one in December, came during Clinton&rsquo;s presidential primary battle with Bernie Sanders, who rose to prominence partly because he railed against super-PACs and the wealthy donors who fund them.</p> </blockquote> <p>The Hill&#39;s review found that there is an increasing trend of contractors violating the law, betting that the politics of the FEC will never take action.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>In addition to the donations to Priorities USA, The Hill found 14 federal contractors that had contributed a total of $173,250 to Right to Rise</strong>. Two had also given to Conservative Solutions PAC, a group that supported Sen. Marco Rubio&rsquo;s (R-Fla.) bid for president.</p> <p>&nbsp;</p> <p>One contractor, a Florida utility named Gulf Power Co., gave $44,000 to Right to Rise in March 2015. At the time, the company held more than $1 million in contracts with the Department of Defense.</p> <p>&nbsp;</p> <p>The Hill asked Gulf Power whether the company was aware it was in violation of the ban and if it believed there was a conflict of interest in politicians benefiting from donations from federal contractors.</p> <p>&nbsp;</p> <p>Jeff Rogers, a spokesman for the company, responded, &ldquo;We believe Gulf Power&rsquo;s right to make the contribution in question is constitutionally protected.&rdquo;</p> <p>&nbsp;</p> <p><strong>Suffolk Construction, which since 2008 has received $169.7 million in federal contracts, according to USASpending.&shy;gov, declined multiple requests for comment.</strong></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;">John Fish, the company&rsquo;s CEO, has been a prolific donor to both parties over the years, though FEC records show he favors Democrats by a wide margin. He&rsquo;s contributed thousands to President Obama&rsquo;s White House bids and gave $500 to his 2004 Senate campaign</span>.</p> <p>&nbsp;</p> <p>Fish&rsquo;s office did not return a request for comment.</p> <p>&nbsp;</p> <p><strong>The company itself has mainly funneled money to Republicans. In 2012 it gave $510,000 to Restore Our Future, a super-PAC supporting GOP presidential nominee Mitt Romney, and $50,000 to another group backing then-Sen. Scott Brown (R-Mass.)</strong>.</p> <p>&nbsp;</p> <p><strong>Campaign finance lawyers say federal contractors that donate to super-PACs are taking a calculated risk that the politically deadlocked FEC will never take action against them.</strong></p> </blockquote> <p>Craig Holman of Public Citizen, an advocacy group says that &quot;the increasing trend of contractors violating the law comes as no surprise,&quot; adding that &quot;contractors now may circumvent the law either by creating an artificial division within the company for the purpose of making contributions, <strong>or even not bother with such machinations and make direct contributions, and can still feel assured they will not be prosecuted by a deadlocked FEC for violating the law</strong>.&quot;</p> <p>* * *</p> <p>Fred Wertheimer, president of Democracy 21, a campaign finance watchdog said &quot;<strong>Every political operative and campaign knows that the FEC will not enforce the campaign finance laws</strong>. There&#39;s an old line: &#39;If you don&#39;t have enforcement laws, you do not have the laws&#39;, and that&#39;s what we&#39;re dealing with.&quot;</p> <p>Sadly, Wertheimer is absolutely correct.</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="812" height="604" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160629_clinton.JPG?1467217013" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/hillary-superpac-has-taken-200000-banned-donations#comments Bernie Sanders Florida President Obama White House Wed, 29 Jun 2016 16:50:00 +0000 Tyler Durden 564775 at http://www.zerohedge.com The Real 'Fear' Index Just Went To '11' http://www.zerohedge.com/news/2016-06-28/real-fear-index-just-went-11 <p><em><strong>A funny thing has happened below the surface of the markets since late last year.</strong></em> As first The Fed, then The BoJ, and The ECB respectively saw their credibility crushed into a mumbling excuse pool of elite utterances as global bond yields crashed along with global growth and inflation expectations, <strong>professional investors have been busily buying crash protection</strong> (carefully masking their buying by managing &#39;normal&#39; risk measure like VIX through endless nefarious cash, ETF, and Futures manipulation). But now, a week after <a href="http://www.zerohedge.com/news/2016-06-22/black-swan-bets-explode-brexit-looms">&#39;Black Swan&#39; bets soared ahead </a>of the central-plan-destroying Brexit vote, <strong>the real &#39;fear&#39; index has spiked to unprecedentedly high levels</strong>.</p> <p>With VIX flip-flopping to and fro at the whim of every fast money trader...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160628_EOD11.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160628_EOD11_0.jpg" style="width: 600px; height: 432px;" /></a></p> <p>&nbsp;</p> <p>Deep out of the money, and &#39;Black Swan&#39; bets have been building...<strong> </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/21/20160622_black%20swan.jpg"><img height="314" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/21/20160622_black%20swan_0.jpg" width="600" /></a></p> <p><em><strong>&quot;It&#39;s a black swan type of put,&quot; </strong></em>said Steve Sosnick of Timber Hill LLC. <em><strong>&quot;It&#39;s very possible there will be an extreme result, and people like to have insurance against a low-probability, high-outcome event.&quot;</strong></em></p> <p><u><strong>Smashing the SKEW Index - the real &#39;Fear Index&#39; to 11 on the Spinal Tap amplifier of historical financial crises...</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160628_Skew.jpg"><img height="310" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160628_Skew_0.jpg" width="600" /></a></p> <p><em>As a reminder, Skew measures the perceived tail risk of the market via the pricing of out-of-the-money options. <strong>Generally, a rise in skew indicates that &#39;crash protection&#39; is in demand among institutional investors</strong> (institutional/professional investors are the biggest traders in SPX options).</em></p> <p>In other words, <em><strong>professionals have rotated from &#39;normal&#39; risk protection to &#39;extreme&#39; risk protection at the largest pace on record all the while fooling the mainstream investor who sees a declining VIX and continues to pick up pennies in front of the steamroller.</strong></em></p> <p><a href="http://www.zerohedge.com/news/2013-10-28/spx-options-skew-vs-vix"><em>As we explained previously,</em></a><strong><em> </em>an unusual move in the skew index (which historically oscillates approximately between a value of 100 and 130) is especially interesting&nbsp; when it diverges strongly from the VIX</strong>, which measures at the money and close to the money front month SPX option premiums.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160629_skew.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160629_skew_0.jpg" style="width: 600px; height: 313px;" /></a></p> <p>Basically what a &#39;low VIX/high skew&#39; combination is saying is:<em><span style="text-decoration: underline;"><strong> &#39;the market overall is complacent, but big investors perceive far more tail risk than usually&#39;</strong></span></em> (it is exactly the other way around when the VIX is high and SKEW is low).</p> <p>In even simpler words, a surprising increase in realized volatility may not be too far away...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160628_Skew1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160628_Skew1_0.jpg" style="width: 600px; height: 314px;" /></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="965" height="499" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160628_Skew.jpg?1467168762" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-28/real-fear-index-just-went-11#comments Black Swan Bond Institutional Investors Volatility Wed, 29 Jun 2016 16:30:00 +0000 Tyler Durden 564748 at http://www.zerohedge.com Who Said It? Bernie, Donald, Or Hillary? http://www.zerohedge.com/news/2016-06-29/who-said-it-bernie-donald-or-hillary <p><a href="https://mishtalk.com/2016/06/29/todays-quiz-donald-trump-bernie-sanders-hillary-clinton-who-said-it/"><em>Submitted by Michael Shedlock via MishTalk.com,</em></a></p> <p><strong>It&rsquo;s quiz time.</strong></p> <p>I will list a statement. You decide who said it.</p> <p>The correct answer is either Bernie Sanders, Donald Trump, or Hillary Clinton.</p> <p><u><strong>34 Statements &ndash; Who Made Them?</strong></u></p> <ol> <li>I do not believe in unfettered free trade. I believe in fair trade which works for the middle class and working families.</li> <li>I will take on corporations that take their jobs to China.</li> <li>I think NAFTA has been a disaster.</li> <li>Instead of passing such trade deals again and again, we must develop trade policies which demand that American corporations create jobs here, and not abroad.</li> <li>TPP is a death blow for American manufacturing.</li> <li>I&rsquo;m for free and fair trade.</li> <li>We need to bring manufacturing jobs back home where they belong.</li> <li>Globalization has torn down the barriers that have formerly separated the national from the international markets.</li> <li>The top priority of any trade deal should be to help American workers.</li> <li>I heard it about NAFTA. I heard it about CAFTA. I heard it about permanent normal trade relations with China. Here is the fact. Since 2001, we have lost almost 60,000 factories and millions of good-paying jobs.</li> <li>Maybe we should have a trade policy which represents the working families of this country, that rebuilds our manufacturing base, not than just representing the CEOs of large multinational corporations.</li> <li>We must end our disastrous trade policies (NAFTA, CAFTA, PNTR with China, etc.) which enable corporate America to shut down plants in this country and move to China and other low-wage countries.</li> <li>This wave of globalization has wiped out our middle class.</li> <li>NAFTA was the worst trade deal in history, and China&rsquo;s entrance into the World Trade Organization has enabled the greatest jobs theft in history.</li> <li>I think corporate America has to start investing in this country and create decent paying jobs here.</li> <li>It is a lot cheaper for the American companies to set up plants in China, hire Chinese workers at 50 cents an hour, 75 cents an hour, whatever it is, and have them build the product for the Chinese markets than it is to pay American workers $15 an hour, $20 an hour, provide health insurance, deal with the union, deal with the environment.</li> <li>Connect the dots. Our current trade deficit is causing the loss of over 2 million jobs. Over the last 20 years, while the US has run up over a trillion dollars in trade deficits, millions of American workers have been thrown into the streets.</li> <li>The function of trade agreements like NAFTA is to make it easier for American companies to move abroad, and to force our workers to compete against desperate people in the Third World.</li> <li>Our current record-breaking merchandise trade deficit of $112 billion is costing us over 2 million decent paying jobs. NAFTA, GATT, and Most Favored Nation status with China must be repealed, and a new trade policy developed.</li> <li>The word has to get out to corporate America, they are going to have to start reinvesting in the United States of America. They are going to have to start building the products and the goods the American people need rather than run all over in search of cheap labor.</li> <li>The TPP is horrible deal. It is a deal that is going to lead to nothing but trouble.</li> <li>I am all for free trade, but it&rsquo;s got to be fair. When Ford moves their massive plants to Mexico, we get nothing. I want them to stay in Michigan.</li> <li>The U.S. has become a dumping ground for everybody else&rsquo;s problems.<br />Globalization has made the financial elite who donate to politicians very wealthy. But it has left millions of our workers with nothing but poverty and heartache.</li> <li>When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians do nothing.</li> <li>Skilled craftsmen and tradespeople and factory workers have seen the jobs they loved shipped thousands of miles away.</li> <li>The current global trading system is distorted not only by barriers to entry in developing and emerging economies, but by the power of special interests in developed countries.</li> <li>We should focus on ending currency manipulation, environmental destruction and miserable working conditions in China.</li> <li>We&rsquo;re going to stop giving penny of your money to anybody who ships a job out to another country. We&rsquo;re going to begin to get the tax code to reflect what the needs of middle class families are so we can rebuild a strong &amp; prosperous middle class.</li> <li>Trade needs to become a win-win. People ask me, am I a free trader or a fair trader? I want to be a smart, pro-American trader. And that means we look for ways to maximize the impact of what we&rsquo;re trying to export and quit being taken advantage of by other countries.</li> <li>I believe in smart trade. Pro-American trade. Trade that has labor and environmental standards, that&rsquo;s not a race to the bottom but tries to lift up not only American workers but also workers around the world.</li> <li>It&rsquo;s important that we have an idea of how to maximize the benefits from the global economy while minimizing the impact on American workers. That includes things like real trade adjustment assistance and other support.</li> <li>It&rsquo;s important that we enforce the agreements we have. That&rsquo;s why I&rsquo;ve called for a trade prosecutor, to make sure that we do enforce them.</li> <li>What we have learned is that we have to drive a tougher bargain.</li> <li>Hillary Clinton Voted for virtually every trade agreement that has cost the workers of this country millions of jobs.</li> </ol> <p><strong>Sources </strong></p> <ul> <li><a href="http://www.ontheissues.org/2016/Bernie_Sanders_Free_Trade.htm" target="_blank">Bernie Sanders on Free Trade</a></li> <li><a href="http://www.ontheissues.org/2016/Donald_Trump_Free_Trade.htm" target="_blank">Trump on Free Trade</a></li> <li><a href="http://www.ontheissues.org/celeb/Hillary_Clinton_Free_Trade.htm" target="_blank">Hillary Clinton on Free Trade</a></li> <li><a href="http://www.politico.com/story/2016/06/full-transcript-trump-job-plan-speech-224891" target="_blank">Donald Trump&rsquo;s Jobs Plan Speech</a></li> </ul> <p><u><strong>Answers</strong></u></p> <ul> <li>Sanders: 1, 2, 4, 10, 11, 12, 15, 16, 17, 18, 19, 20</li> <li>Trump: 3, 5, 6, 7, 18, 13, 14, 21, 22, 23, 24, 25</li> <li>Clinton: 26, 27, 28, 29, 30, 31, 32, 33</li> <li>Sanders and Trump: 34 (Sanders first, Trump quoted Sanders)</li> </ul> <p>Flip a coin. <strong>As a firm believer in free trade, they are all totally hopeless.</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="292" height="151" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160629_mish.jpg?1467207885" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/who-said-it-bernie-donald-or-hillary#comments Bernie Sanders China Corporate America Donald Trump ETC Ford Global Economy Mexico Michigan Trade Deficit World Trade Wed, 29 Jun 2016 16:10:00 +0000 Tyler Durden 564773 at http://www.zerohedge.com There Is Now A Staggering $11.7 Trillion In Negative Yielding Debt http://www.zerohedge.com/news/2016-06-29/there-now-staggering-117-trillion-negative-yielding-debt <p>It was not even a month ago when we <a href="http://www.zerohedge.com/news/2016-06-03/historic-milestone-negative-yielding-debt-surpasses-10-trillion-first-time">last looked at the total amount of negative yielding debt </a>around the globe, and were shocked to find that according to Fitch, for the first time in history (obviously), there was over $10 trillion in negative yielding debt. <strong>Fast forward 4 weeks later, and the grand total is now $1.3 trillion higher, or $11.7 trillion.</strong> </p> <p>The split between positive and negative yielding debt is shown in the chart below:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/debt%20breakdown.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/debt%20breakdown_0.jpg" width="500" height="279" /></a></p> <p>In a report released earlier, Fitch updates on the "investors' flight to safe assets following the UK's EU referendum on June 23" and finds that the global total of sovereign debt with negative yields was a staggering $11.7 trillion as of June 27, up $1.3 trillion from the end-May total. Brexit-related concerns drove more long-dated bond yields negative, with particularly big shifts in German, French and Japanese yield curves during June. </p> <p>As <a href="https://www.fitchratings.com/site/pressrelease?id=1008156">Fitch notes</a>, worries over the global growth outlook, further fueled by Brexit, have continued to support demand for higher-quality sovereign paper in June. Widespread adoption of unconventional monetary policies, including large-scale bond-buying programs and negative deposit rates, have driven the large increases in negative-yielding debt seen this year. </p> <p>The chart below highlights the monthly changes in the outstanding par amount of negative-yielding sovereign debt by maturity bucket. The biggest drivers of the total increase during June were seen in longer-dated bonds. For example, German 10-year bund yields swung into negative territory and sub-zero yields moved further out on the curve for Japan -- now out to 17 years. <strong>Also, in Switzerland, virtually all sovereign debt carried a negative yield on June 27.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/ftich%2011.7%20trillion.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/ftich%2011.7%20trillion_0.jpg" width="500" height="402" /></a></p> <p>&nbsp;</p> <p>As DB's Jim Reid writes, yesterday we saw the Swiss yield curve actually trade negative the whole way out the curve. The longest dated Swiss government bond due in 2064 (so 48 years) touched -0.0082% at one stage before settling at +0.011% by the close. The chart below shows the Swiss yield curve to show how remarkable this is. We’ve also added the JGB curve where the longest dated bond due in 2056 (40 year) is trading at a minuscule 6bps and the Bund curve where the longest dated 30y bond is trading at 42bps.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/yield%20curves%20DB.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/yield%20curves%20DB_0.jpg" width="500" height="380" /></a></p> <p>&nbsp;</p> <p><strong>Japanese government bonds (JGBs) continue to represent about two-thirds of the global total ($7.9 trillion), while Germany and France each now have over $1 trillion in sovereign debt with sub-zero yields</strong>. Japan's negative-yielding debt total grew by about 18% during the month, while Germany and France's total grew by 8% and 13%, respectively. European negative-yielding debt increases were offset in part by an approximately $0.2 trillion reduction in the Italian total since May 31. This likely reflected investor risk aversion related to Italy leading up to and following the Brexit referendum.</p> <p>The spread of negative yields into longer-dated paper was particularly evident in June. A total of $2.6 trillion in sovereign bonds with maturities of seven years or more now trade at a negative yield. This compares with the end-April total of $1.4 trillion.</p> <p><strong>The increasing amount of long-term negative-yielding debt underscores the challenges faced by large bond investors such as insurance companies that need to match long-term liabilities with similar maturity assets. As more of the global universe of safe assets drops into negative-yielding territory, income for these investors continues to fall.</strong></p> <p>UK sovereign bonds continue to trade at positive yields across the curve, but the Brexit vote has had a dramatic effect on the UK yield curve. Following the June 23 referendum, 10-year gilt yields dropped by 44 bps to 0.93% as of June 27, according to Bloomberg.&nbsp; </p> <p><strong>The $11.7 trillion total, which includes $3.2 trillion of short-term and $8.5 trillion of long-term sovereign debt, is influenced by the dollar's exchange rate with the yen and euro</strong>. During June, the dollar rose slightly against the euro, but weakened significantly (approximately 9%) versus the yen. This had a major impact on the dollar value of yen-denominated negative-yielding debt in our latest analysis, pushing the JGB total up by approximately $0.6 trillion beyond increases that would have occurred on an FX-neutral basis.</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="1150" height="924" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/ftich%2011.7%20trillion.jpg?1467215442" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/there-now-staggering-117-trillion-negative-yielding-debt#comments 8.5% Across the Curve Bond Fitch France Germany Insurance Companies Italy Japan Jim Reid Sovereign Debt Switzerland Yen Yield Curve Wed, 29 Jun 2016 15:51:16 +0000 Tyler Durden 564774 at http://www.zerohedge.com Brexiteers 1 : 0 Scaremongers - UK Stocks Erase All Brexit Losses http://www.zerohedge.com/news/2016-06-29/brexiteers-1-0-scaremongers-uk-stocks-erase-all-brexit-losses <p>It seems Farage was right... again...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em><strong>"Can we all just grow up, stop this absolute scare-mongering nonsense?" </strong></em>Farage told CNBC on Tuesday, adding that the FTSE 100 is up 3 percent today<em><strong>. "Can we just end this complete rubbish?"</strong></em></p> </blockquote> <p>&nbsp;</p> <p><iframe src="http://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&amp;byGuid=3000529883&amp;size=530_298" width="530" height="298"></iframe></p> <p>&nbsp;</p> <p>FTSE 100 is now unchanged from pre-Brexit as Osborne, Cameron and the fearmongers appear to have been proved wrong.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160629_FTSe.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160629_FTSe_0.jpg" width="600" height="315" /></a></p> <p>&nbsp;</p> <p>Now what? It seems like Brexit was a good thing after all, so Fruckoff? Portugaleave?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160629_FTSe1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/06/23/20160629_FTSe1_0.jpg" width="600" height="313" /></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="963" height="505" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160629_FTSe.jpg?1467214645" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/brexiteers-1-0-scaremongers-uk-stocks-erase-all-brexit-losses#comments Wed, 29 Jun 2016 15:39:49 +0000 Tyler Durden 564772 at http://www.zerohedge.com Puerto Rico To Default On July 1 After Senate Passes Bailout Bill http://www.zerohedge.com/news/2016-06-29/puerto-rico-default-july-1-after-senate-passes-bailout-bill <p>Moments ago, following the <a href="http://www.zerohedge.com/news/2016-06-10/bailout-legislation-puerto-rico-has-officially-been-passed-house">overwhelming passage </a>of a Puerto Rico bailout bill by the US House of Representatives, Congress found itself on the edge of sending the PR debt relief Bill for the president signature, when the Senate, in a 68-32 vote, likewise passed the measure. This makes final passage of the legislation a virtual certainty as sixty votes were needed to clear the procedural hurdle, but only a majority vote is necessary on final passage.</p> <p><strong>The legislation allows Puerto Rico to restructure $70 billion in debt and establish an outside control board to steer the island's troubled finances</strong>. President Obama supports the package, and is expected to quickly sign it. </p> <p>Puerto Rico faces $2 billion in debt payments on Friday, creating an effective deadline for passing the legislation that the Obama administration was determined to meet. Treasury Secretary Jack Lew was on Capitol Hill on Tuesday to round up support for the legislation. The bill faced opponents across the political spectrum. </p> <p>The losers in this case are a group of creditors who worry their investments in Puerto Rico’s debt will be eroded fought the bill for months. </p> <p>As <a href="http://thehill.com/policy/finance/285952-senate-clears-puerto-rico-debt-bill-for-final-passage">The Hill notes</a>, an advertising campaign, believed to be backed by creditors, charged that the legislation was a taxpayer bailout of Puerto Rico, though no taxpayer funds would be provided through the legislation. Civil society groups in Puerto Rico also opposed the legislation, arguing an oversight board created by the measure would supersede the will of the Puerto Rican people. They received loud support on the Senate floor from Sens. Bernie Sanders (I-Vt.) and Bob Menendez (D-N.J.), </p> <p>Despite the opposition, party leaders backed the package and were able to cobble together enough support to get to 60 votes, handing a victory to Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Harry Reid (D-Nev.).&nbsp; </p> <p>The legislation’s advancement is also a significant victory for the Obama administration, which served as the lead negotiator for Democrats, hammering out a package with House Republicans over weeks of talks. </p> <p>Intense lobbying surrounded the bill for months on Capitol Hill, as a raft of investors in Puerto Rican debt descended on the Capitol to try and carve out the most advantageous package possible. Lawmakers were bombarded with pressure from all sides, as creditors jockeyed for optimal position in the final package, which would determine who gets paid how much from what is left of Puerto Rico’s revenue.</p> <p>What happens next? <a href="http://thehill.com/policy/finance/285952-senate-clears-puerto-rico-debt-bill-for-final-passage">Some more details</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>With the bill apparently set to become law, Congress will have taken steps to address a deepening economic, fiscal, and humanitarian crisis on the island. Years of economic decline had led to a mass exodus of Puerto Ricans to the American mainland, driving down its revenues and eventually leaving it without enough government funds to pay off its debt.</p> <p>&nbsp;</p> <p>The island’s status as a U.S. territory left officials there with no recourse, since a quirk in the bankruptcy code leaves territories without access to the same bankruptcy protections afforded to states and municipalities. In effect, the island needed Congress to pass a law, in an election year, to get out from under its crushing debt load. </p> <p>&nbsp;</p> <p><strong>The island has had to slash public services in an effort to stay afloat, and the White House warned that even more severe steps, like the shuttering of hospitals, could come without congressional action. </strong></p> <p>&nbsp;</p> <p>But now, the bill freezes any legislation from creditors, and allows the oversight board to step in and work towards an affordable debt restructuring package for the island. </p> <p>&nbsp;</p> <p>Liberal lawmakers griped about side provisions that relax labor regulations on the island. Democrats also were peeved that Republicans brought the bill straight to the floor without the opportunity to try and amend it.</p> </blockquote> <p>The most immediate future, however, is far simpler:</p> <ul> <li><strong>PUERTO RICO GOVERNOR SAYS COMMONWEALTH WILL DEFAULT ON JULY 1</strong></li> </ul> <p>&nbsp;</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="1000" height="667" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/puerto%20rican%20parade_0.jpg?1467214535" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/puerto-rico-default-july-1-after-senate-passes-bailout-bill#comments Bankruptcy Code Bernie Sanders Creditors default Obama Administration President Obama Puerto Rico White House Wed, 29 Jun 2016 15:35:51 +0000 Tyler Durden 564771 at http://www.zerohedge.com The Prison Of Peoples - France's Le Pen Calls For European 'Spring' http://www.zerohedge.com/news/2016-06-29/prison-peoples-frances-le-pen-calls-european-spring <p><a href="https://voxday.blogspot.com/2016/06/the-prison-of-peoples.html"><em>Via VoxDay blog,</em></a></p> <p><strong>Marine Le Pen writes a powerful argument <a href="http://www.nytimes.com/2016/06/28/opinion/marine-le-pen-after-brexit-the-peoples-spring-is-inevitable.html?_r=0">for nationalism and the end of the EU</a> </strong>in the New York Times:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>The European Union has become a prison of peoples. </strong></u>Each of the 28 countries that constitute it has slowly lost its democratic prerogatives to commissions and councils with no popular mandate. Every nation in the union has had to apply laws it did not want for itself. Member nations no longer determine their own budgets. They are called upon to open their borders against their will.</p> <p>&nbsp;</p> <p>Countries in the eurozone face an even less enviable situation.<strong> In the name of ideology, different economies are forced to adopt the same currency, even if doing so bleeds them dry. It&rsquo;s a modern version of the Procrustean bed, and the people no longer have a say.</strong></p> <p>&nbsp;</p> <p>And what about the European Parliament? It&rsquo;s democratic in appearance only, because it&rsquo;s based on a lie: the pretense that there is a homogeneous European people, and that a Polish member of the European Parliament has the legitimacy to make law for the Spanish. We have tried to deny the existence of sovereign nations. It&rsquo;s only natural that they would not allow being denied.</p> <p>&nbsp;</p> <p><strong>Brexit wasn&rsquo;t the European people&rsquo;s first cry of revolt.</strong> In 2005, France and the Netherlands held referendums about the proposed European Union constitution. In both countries, opposition was massive, and other governments decided on the spot to halt the experiment for fear the contagion might spread. A few years later, the European Union constitution was forced on the people of Europe anyway, under the guise of the Lisbon Treaty. In 2008, Ireland, also by way of referendum, refused to apply that treaty. And once again, a popular decision was brushed aside.</p> <p>&nbsp;</p> <p>When in 2015 Greece decided by referendum to reject Brussels&rsquo; austerity plans, the European Union&rsquo;s antidemocratic response took no one by surprise: To deny the people&rsquo;s will had become a habit. In a flash of honesty, the president of the European Commission, <strong>Jean-Claude Juncker, unabashedly declared, &ldquo;There can be no democratic choice against the European treaties.&rdquo;</strong></p> <p>&nbsp;</p> <p><strong>Brexit may not have been the first cry of hope, but it may be the people&rsquo;s first real victory.</strong></p> </blockquote> <p>With eloquent nationalist leaders like her, Viktor Orban, and Matteo Salvini, among others there is reason to believe it will not be the last one. The EU is immoral, unnatural, anti-democratic, and evil. The sooner it collapses, the better off everyone will be.</p> <p>The globalists are the Nazis of the 30s and 40s and the Communists of the Cold War. They are the enemy of Man. As Le Pen aptly notes, &quot;more and more, the destiny of the European Union resembles the destiny of the Soviet Union, which died from its own contradictions.&quot;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>One thing is certain: Britain&rsquo;s departure from the European Union will not make the union more democratic.</strong> The hierarchical structure of its supranational institutions will want to reinforce itself: Like all dying ideologies, the union knows only how to forge blindly ahead. The roles are already cast &mdash; Germany will lead the way, and France will obligingly tag along.</p> <p>&nbsp;</p> <p>Here is a sign: President François Hollande of France, Prime Minister Matteo Renzi of Italy and acting Prime Minister Mariano Rajoy of Spain take their lead directly from Chancellor Angela Merkel of Germany, without running through Brussels. A quip attributed to Henry Kissinger, &ldquo;Who do I call if I want to call Europe?&rdquo; now has a clear answer: Call Berlin.</p> <p>&nbsp;</p> <p><u><em><strong>So the people of Europe have but one alternative left: to remain bound hand-and-foot to a union that betrays national interests and popular sovereignty and that throws our countries wide open to massive immigration and arrogant finance, or to reclaim their freedom by voting.</strong></em></u></p> </blockquote> <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="510" height="343" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160629_lepen.jpg?1467202682" /> </div> </div> </div> http://www.zerohedge.com/news/2016-06-29/prison-peoples-frances-le-pen-calls-european-spring#comments Councils European Union Eurozone France Germany Greece Henry Kissinger Ireland Italy Nationalism Netherlands New York Times Wed, 29 Jun 2016 15:15:18 +0000 Tyler Durden 564769 at http://www.zerohedge.com The FED Finds a Good Excuse to Extend and Pretend Through Brexit http://www.zerohedge.com/news/2016-06-29/fed-finds-good-excuse-extend-and-pretend-through-brexit <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><a href="mailto:bgreen@sprottmoney.com?subject=From%20Zero%20Hedge: The FED Finds a Good Excuse to Extend and Pretend Through Brexit Article"><br /></a></p> <h1><a href="mailto:bgreen@sprottmoney.com?subject=From%20Zero%20Hedge: The FED Finds a Good Excuse to Extend and Pretend Through Brexit Article"><span style="text-decoration: underline;"><em>The FED Finds a Good Excuse to Extend and Pretend Through Brexit</em></span></a></h1> <p><span style="color: #0000ff;"><a href="https://www.sprottmoney.com/blog/the-fed-finds-a-good-excuse-to-extend-and-pretend-through-brexit-nathan-mcdonald.html"><br /> </a></span></p> <p><span style="color: #0000ff;"><br /> <a href="https://www.sprottmoney.com/blog/the-fed-finds-a-good-excuse-to-extend-and-pretend-through-brexit-nathan-mcdonald.html"><span style="text-decoration: underline;"><em><strong><span style="line-height: 20.8px;">Written by Nathan McDonald (CLICK FOR ORIGINAL)</span></strong></em></span></a></span></p> <p>&nbsp;</p> <p><a href="https://www.sprottmoney.com/blog/the-fed-finds-a-good-excuse-to-extend-and-pretend-through-brexit-nathan-mcdonald.html"><img src="http://www.zerohedge.com/sites/default/files/images/user196978/imageroot/2016/06/29/shutterstock_131162912_710.jpg" width="710" height="473" /></a></p> <p>&nbsp;</p> <p>&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">Brexit has happened. Those who are not happy with this reality are making their voices heard; yet, so too are those who are overjoyed to have their liberty and freedom back in their own hands. </p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">This divide is glaringly obvious and has been the highlight of the news reel since last week's vote. There has been a flood of articles relating to the matter, and for good reason. This is a historic event and a move that slaps the global elites squarely in the face, something that rarely happens throughout our history. </p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">Regardless, turbulent times are ahead for the global markets, as this move was considered a "black swan" event, one that was not expected by many, even by those who hoped it would happen. Even Nigel Farage, one of the leaders of the "Leave" campaign, suspected that the vote would be close, but didn't hold out hope that they would win. </p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">Therefore, it is no surprise to find that the FED is also shocked by this turn of events. They, along with many others, did not expect this to happen - but never fear! They will take advantage of the situation and use it as a full-blown excuse as to why they once again cannot act and raise interest rates. </p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">Brexit has essentially given Janet Yellen a perfect excuse as to why she cannot raise rates. The FED has been jawboning about a raise in rates once again over the past few months, something that I have highlighted time and time again. </p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p>This MOPE is a constant theme at just about any press conference the FED attends. They must keep people thinking that they have some sort of power, that they can unravel this mess they have created in the fiat markets. The fact is they cannot, and they know this.</p> <p style="margin: 0in; margin-bottom: .0001pt;">If Brexit didn't occur, then the FED would have simply found another excuse to not raise rates. That, or they would have just engaged in more extend and pretend, pushing the idea down the road just a little further as they so often do. </p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">Either way, near-rock bottom interest rates are here to stay as the U.S. dollar strengthens vs the pound and the Euro. As the elites say, never let a good crisis go to waste. Don't worry - the FED isn't. </p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <p style="margin: 0in; margin-bottom: .0001pt;">&nbsp;</p> <h1 style="padding: 0px; margin-top: 0px; margin-bottom: 0.25em; line-height: 1.15; font-size: 24px; font-weight: normal; font-family: Roboto, sans-serif; max-width: 90%;"><em style="margin: 0px; padding: 0px;"><span style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;">Please email with any questions about this article or precious metals</span></em><em style="line-height: 1.15; margin: 0px; padding: 0px;"><span style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;">&nbsp;</span><strong style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 20.3333px; line-height: 17.3333px;"><span style="text-decoration: underline;"><a href="mailto:bgreen@sprottmoney.com?subject=From%20Zero%20Hedge: The FED Finds a Good Excuse to Extend and Pretend Through Brexit Article">HERE</a></span></strong></em></h1> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <h1><span style="color: #0000ff;"><a href="mailto:bgreen@sprottmoney.com?subject=From%20Zero%20Hedge: The FED Finds a Good Excuse to Extend and Pretend Through Brexit Article"><span style="text-decoration: underline;"><em>The FED Finds a Good Excuse to Extend and Pretend Through Brexit</em></span></a><a href="https://www.sprottmoney.com/blog/the-fed-finds-a-good-excuse-to-extend-and-pretend-through-brexit-nathan-mcdonald.html"><span style="text-decoration: underline;"><em>&nbsp;</em></span></a></span></h1> <p><span style="color: #0000ff;"><a href="https://www.sprottmoney.com/blog/the-fed-finds-a-good-excuse-to-extend-and-pretend-through-brexit-nathan-mcdonald.html"><br /> </a></span></p> <p><span style="color: #0000ff;"><br /> <a href="https://www.sprottmoney.com/blog/the-fed-finds-a-good-excuse-to-extend-and-pretend-through-brexit-nathan-mcdonald.html"><span style="text-decoration: underline;"><em><strong><span style="line-height: 20.8px;">Written by Nathan McDonald (CLICK FOR ORIGINAL)</span></strong></em></span></a></span></p> http://www.zerohedge.com/news/2016-06-29/fed-finds-good-excuse-extend-and-pretend-through-brexit#comments Black Swan Janet Yellen Precious Metals Reality Wed, 29 Jun 2016 15:03:00 +0000 Sprott Money 564768 at http://www.zerohedge.com