en The Government's Plan To Survive Nuclear War Doesn't Include You <p><a href=""><em>Authored by Mac Slavo via,</em></a></p> <p><a href=""><img alt="" src="" style="width: 528px; height: 279px;" /></a></p> <p><strong>Once again this week, the United States teetered a little closer towards war with the Russians.</strong> On Sunday, the US military shot down a Syrian jet that was allegedly targeting US backed forces. The Russians have since claimed that the aircraft was engaging ISIS, and have revealed that their air defense systems <a href="" target="_blank">will now track any of our aircraft</a> that happen to fly over Western Syria. They also suspended a hotline between the US and Russia that was in place to prevent mid-air collisions over the crowded skies of Syria.</p> <p>Amid incidents like this, <strong>you have to wonder what our government is thinking.</strong> For most Americans, Syria must seem inconsequential. Why is our military involved in a country, where we are brushing shoulders with a nuclear armed nation? If it&rsquo;s to fight ISIS, then we could easily sit back and let Russian and Syrian forces wipe them out. If it&rsquo;s to affect regime change, then clearly our government hasn&rsquo;t learned anything from Iraq or Afghanistan. Why are we risking a war with the Russians just to influence the outcome of a regional civil war that has little bearing on the daily lives of most Americans?</p> <p>The answer to that question could probably fill a novel, <strong>but there is one reason that the elites in Washington will never admit to. They can afford to make careless decisions because they are insulated from the results.</strong> If there is a war with Russia, which could easily turn into a nuclear war, they&rsquo;ll have plenty of spacious bunkers to hide out in while the rest of America burns. And that&rsquo;s been our government&rsquo;s plan in regards to nuclear war since the beginning of the Cold War.</p> <p class="mol-para-with-font">That&rsquo;s the main takeaway from a new book called <a href="" target="_blank"><em>Raven Rock: The Story of the US Government&rsquo;s Plan to Save Itself</em></a>. Our government has spent decades building sprawling bunkers, like Raven Rock, that high ranking officials can flee to in the event of a nuclear war.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="mol-para-with-font">The idea for Raven Rock was to have a military base that would function as an alternative to the Pentagon and would be dug out of a mountain and deep enough to survive any Russian attack.</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">A site was chosen six miles from Camp David, the Presidential retreat in Maryland, and work began in 1951 on the $17 million project</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">Some 300 men worked round the clock in three shifts to carve a 3,100ft tunnel out of the granite; engineers invented technology as they went along including blast doors and blast valves.</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">Inside the facility there was 100,000sq/ft of office space in five parallel caverns big enough to hold a three story building in each.</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">The entire facility could fit 1,400 people and was placed on giant springs to reduce the impact of a blast.</p> <p class="mol-para-with-font"><em>Via <a href="" target="_blank">Daily Mail</a></em></p> </blockquote> <p class="mol-para-with-font"><strong>Meanwhile, as they were building these bunkers and trying to convince Americans that nuclear war could be easily survivable, behind the scenes they knew it would be a bloodbath for civilians.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="mol-para-with-font">At the end of the 1950s, the FCDA created &lsquo;Battleground USA&rsquo;, a grim 120-page report on how cities should manage civil defense operations in the event of an attack.</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">It said that the area should be divided into &lsquo;mortuary zones&rsquo; with &lsquo;collection teams&rsquo; in charge of identifying bodies.</p> <div>&nbsp;</div> <div>Post Office mail trucks would ferry the wounded to one of 900 improvised hospitals set up near attack sites in places like federal prisons.</div> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">In Kansas officials planned to confiscate household vitamins for use by the general population.</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">Planners estimated they could assemble two million pounds of food after an attack from their own reserves and from stores.</p> <p class="mol-para-with-font">They could also could find 11 million &lsquo;man-days&rsquo; of food in the forests and plains in rabbit meat, 10 million &lsquo;man-days of wild birds and five million &lsquo;man-days&rsquo; of fish.</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">Most chillingly they budgeted nearly 20 million &lsquo;man-days&rsquo; of meat in residential pets.</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">It was disturbing reading and a view of the world that summed up by Eisenhower in one meeting: &lsquo;The destruction might be such that we might ultimately have to go back to bows and arrows&rsquo;</p> <p class="mol-para-with-font">&nbsp;</p> <p class="mol-para-with-font">During another meeting Eisenhower admitted that nation didn&rsquo;t have &lsquo;enough bulldozers to scrape the bodies off the street&rsquo; in the event of a nuclear strike&rsquo;.</p> </blockquote> <p class="mol-para-with-font"><strong>And as we all know, our government didn&rsquo;t take many measures to protect civilians from the potential carnage that would be inflicted by a nuclear war. </strong>They didn&rsquo;t build many bunkers for the rest of us.</p> <p class="mol-para-with-font">At first glance that may sound like an impossible task, but it&rsquo;s not. Take Switzerland for instance. Despite not having any nuclear weapons, they&rsquo;ve built <a href="" target="_blank">enough fallout shelters to house every Swiss citizen</a>. You might say that we could never afford that many shelters, but it&rsquo;s not a question of cost. Switzerland&rsquo;s GDP per capita is similar to America&rsquo;s.</p> <p class="mol-para-with-font"><strong>The truth of the matter, is that our leaders don&rsquo;t give a damn about what happens to American civilians.</strong> As long as they have their bunkers, they feel safe while antagonizing nuclear armed nations like Russia. They know that if there&rsquo;s a war, they&rsquo;ll survive while the rest of us burn and starve.</p> <p class="mol-para-with-font"><em>Make no mistake, if there&rsquo;s ever a war with Russia, you&rsquo;ll be on your own. <strong><a href="" target="_blank">Whether or not you survive</a></strong> depends entirely on your willingness and ability <a href="" target="_blank"><strong>to prepare now</strong></a>.</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="528" height="279" alt="" src="" /> </div> </div> </div> Afghanistan Bunker International security Iraq Nuclear proliferation Nuclear strategies Nuclear warfare Nuclear weapon Nuclear weapons of the United States Pentagon Politics Post Office Post Office Switzerland US government War War western Syria Sat, 24 Jun 2017 23:50:00 +0000 Tyler Durden 598593 at Angry Dems Turn On Obama, Pelosi, Schumer: "Talk Less About Russia" <p>It&rsquo;s been a rough week for the legacy of the Obama administration. Yesterday, the Senate Judiciary Committee launched a Democrat-endorsed probe into former <a href="">Attorney General Loretta Lynch&rsquo;s conduct during the campaign</a> &ndash; when it&rsquo;s widely believed she colluded with the Clinton&rsquo;s to &ldquo;soften&rdquo; the FBI&rsquo;s probe into Hillary&rsquo;s mishandling of classified information. Earlier, <a href="">sure-thing Democratic neophyte Jon Ossoff lost a special election in Georgia</a> that he was supposedly guaranteed to win, leading America&rsquo;s least&mdash;preferred party of overly brazen corporatists to an embarrassing 5-0 defeat, and stoking calls for Nancy Pelosi - the Dem&rsquo;s longtime leader in Congress - to step aside.</p> <p>And as if all that wasn&rsquo;t enough, <u><strong>revelations that Russian hackers targeted voting systems in 21 states &ndash; and the Obama administration did nothing about it &ndash; have inspired the president&rsquo;s fellow Democrats to turn on their once-revered leader. </strong></u></p> <p><a href=""><em><strong><img alt="" src="" style="width: 500px; height: 373px;" /></strong></em></a></p> <p>&nbsp;</p> <p>As the Hill reports, Democrats are criticizing no-drama Obama for being too cautious with his disclosures about &ldquo;the Russia problem&rdquo; in the run-up to the 2016 election, <em><strong>claiming that he shouldn&#39;t have hesitated to inform the public about the allegations:</strong></em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;The Obama administration is under fresh scrutiny for its response to Russian meddling in the election after new details emerged this week about how the White House weighed its actions against the 2016 political environment.</p> <p>&nbsp;</p> <p><strong>Then-President Obama was too cautious in the months leading up to the election, frustrated Democratic lawmakers and strategists say.</strong></p> <p>&nbsp;</p> <p><strong>&ldquo;It was inadequate. I think they could have done a better job informing the American people of the extent of the attack,&rdquo;</strong> said Rep. Eric Swalwell (D-Calif.), a member of the House Intelligence Committee who co-chairs the Democratic Steering and Policy Committee.&quot;</p> </blockquote> <p>Meanwhile, <strong>Ohio Democrat Tim Ryan, who recently challenged Pelosi for leadership of the party, is leading a small group of Congressional Dems in criticizing Chuck Schumer, Pelosi and the rest of the Democratic leadership&#39;s irrational focus on the Russia investigations.</strong> Ryan believes the focus on making the Dems appear out of touch to working Americans who care more about economic issues than the Trump witch hunt, <a href="">as the Hill reports.&nbsp; </a>Ryan&#39;s attempt to lead from behind comes as some of his peers push for the creation of a 9/11-style Commission to launch what would be the fourth investigation into the Trump campaign.&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 321px;" /></a></p> <p>Even though the contradiction here is obvious - Dems are complaining that the party is too focused on Russia, while criticizing Obama for not releasing more scurrilous details about alleged interference -<strong>at least Ryan recognizes that the focus on Russia will hurt the Dems where it counts: In next year&#39;s midterms.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;We can&#39;t just talk about Russia because people back in Ohio aren&#39;t really talking that much about Russia, about Putin, about Michael Flynn,&rdquo;</strong> Rep. Tim Ryan (D-Ohio) told MSNBC&nbsp;Thursday. &ldquo;They&#39;re trying to figure out how they&#39;re going to make the mortgage payment, how they&#39;re going to pay for their kids to go to college, what their energy bill looks like.</p> <p>&nbsp;</p> <p><strong>&ldquo;And if we don&#39;t talk more about their interest than we do about how we&#39;re so angry with&nbsp;Donald Trump&nbsp;and everything that&#39;s going on,&rdquo; he added, &ldquo;then we&#39;re never going to be able to win elections.&rdquo;</strong></p> </blockquote> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>Turning back to Obama, the president&#39;s motives in withholding the information definitely leave room for speculation. Was he worried that the public would interpret the disclosure as transparent fearmongering intended to benefit the Clinton campaign &ndash; <em><strong>or maybe he thought it would make the Democrats and Clinton look ineffectual in the face of a problem that couldn&rsquo;t be solved with a couple of well-timed drone strikes? </strong></em>For what it&#39;s worth, former Homeland Security Secretary Jeh Johnson says Obama withheld the information because he didn&rsquo;t want to play into Trump&rsquo;s <strong>claims that the election was being &ldquo;rigged.&rdquo;</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;Former Homeland Security Secretary Jeh Johnson on Wednesday told lawmakers that the White House held back on responding to Russia <em><strong>because it didn&rsquo;t want to play into fears, propagated by then-candidate Trump, that the election would be &ldquo;rigged.&rdquo;</strong></em></p> <p>&nbsp;</p> <p>&ldquo;One of the candidates, as you&#39;ll recall, was predicting that the election was going to be rigged in some way,&rdquo; Johnson said. <strong>&ldquo;And so we were concerned that, by making the statement, we might in and of itself be challenging the integrity of the election process itself.&rdquo;</strong></p> <p>&nbsp;</p> <p>Trump had repeatedly claimed that the outcome of the election would be &ldquo;rigged&rdquo; against him, alleging widespread voter fraud and inaccurate polling. He provided no evidence to back up his claims, but critics feared that his rhetoric could undermine public trust in the outcome of the election.</p> </blockquote> <p>In any event, Obama&rsquo;s decision to withhold the information has made the Dems look weak, desperate and disorganized. And now they&rsquo;re rightfully worried that the administration&rsquo;s countermeasures &ndash; kicking out a few dozen diplomats &ndash; have helped them lose what little credibility they still had in the eyes of the public. Meanwhile, President Trump has a few questions of his own;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&#39;Some Republicans argue the Obama administration only started to take the Russia threat seriously after President Trump had won the election.</p> <p>&nbsp;</p> <p>Trump has called the influence operation a &ldquo;hoax&rdquo; and dismissed the various inquiries into Russian interference in the election &mdash; which include looking for possible collusion between his campaign and Moscow &mdash; as a &ldquo;witch hunt.&rdquo;</p> <p>&nbsp;</p> <p>&ldquo;By the way, if Russia was working so hard on the 2016 Election, it all took place during the Obama Admin. Why didn&#39;t they stop them?&rdquo; Trump tweeted Thursday.<br />The Obama administration announced on Oct. 7 that the theft and release of the Democratic National Committee (DNC) emails was part of a widespread campaign &ldquo;intended to interfere with the U.S. election process.&rdquo;</p> </blockquote> <p>So what&rsquo;s next for the Dems? Obama, who has already pivoted from politician to social-media celebrity, will probably continue to chime in every now and then from the peanut gallery. Meanwhile, we wait to see if the DOJ or any other interested parties piggy-back on the Senate&rsquo;s investigation into Lynch&rsquo;s blatant attempt at obstruction, and wonder: <em><strong>Could this be the controversy that leads to the unraveling of the modern Democratic Party?</strong></em></p> <p dir="ltr" lang="en"><u><strong>Of course, President Trump couldn&#39;t resist taking a shot at his predecessor on Twitter: </strong></u></p> <p dir="ltr" lang="en">Just out: The Obama Administration knew far in advance of November 8th about election meddling by Russia. Did nothing about it. WHY?</p> <blockquote class="twitter-tweet" data-lang="en"><p>&mdash; Donald J. Trump (@realDonaldTrump) <a href="">June 24, 2017</a></p></blockquote> <p>&nbsp;</p> <p dir="ltr" lang="en">By the way, if Russia was working so hard on the 2016 Election, it all took place during the Obama Admin. Why didn&#39;t they stop them?</p> <p>&mdash; Donald J. Trump (@realDonaldTrump) <a href="">June 22, 2017</a></p> <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="860" height="403" alt="" src="" /> </div> </div> </div> American people of German descent Barack Obama Climate change skepticism and denial Congress Democratic National Committee Democratic Party Democratic Steering and Policy Committee DOJ Donald Trump Donald Trump Donald Trump presidential campaign Draft:Hector Sarmiento FBI Federal Bureau of Investigation House Intelligence Committee Judiciary Committee MSNBC Nancy Pelosi Nancy Pelosi Obama Administration Obama administration Ohio Politics Politics Senate The Apprentice Twitter Twitter United States White House White House WWE Hall of Fame Sat, 24 Jun 2017 23:20:00 +0000 Tyler Durden 598582 at Meet The Money-Laundering, Nigerian Oil Magnate Behind New York's $50MM Condo Foreclosure <p>Last night we noted that yet another luxury condo at Manhattan’s One57 tower, <strong>a member of “Billionaire’s Row,” a group of high-end towers clustered along the southern edge of Central Park, had gone into foreclosure - the second in the span of a month.&nbsp; </strong>The 6,240-square-foot, full-floor penthouse in question, One57’s Apartment 79, sold for $50.9 million in December 2014, making it the eighth-priciest in the building and likely the largest residential foreclosure in Manhattan's history.</p> <p>According to <a href="">Bloomberg,</a> the owner of the apartment attempted to conceal his/her identity by using a shell company (you know how those kooky billionaires can be) but was able to obtain an 'unusually large' mortgage with an even more unusual term: one-year.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In September 2015,<strong> the company took out a $35.3 million mortgage from lender Banque Havilland SA, based in Luxembourg. The full payment of the loan was due one year later, </strong>according to court documents filed in connection with the foreclosure.</p> <p>&nbsp;</p> <p>The<strong> borrower failed to repay,</strong> and now Banque Havilland is <strong>forcing a sale to recoup the funds</strong>, plus interest.</p> </blockquote> <p>Of course, it was only a matter of time until the mystery man behind Manhattan's most recent luxury real estate epic fail was exposed.&nbsp; As such, <strong>meet Nigerian oil magnate, Kola Aluko.</strong></p> <p><a href=" - Kola 2.JPG"><img src="" style="width: 600px; height: 361px;" /></a></p> <p>&nbsp;</p> <p><strong>As it turns out, the world renowned, Nigerian-born, billionaire playboy is about $25,000 behind on his property taxes.</strong>&nbsp; But, that is probably the least of his worries as the <a href="">New York Post</a> points out that he currently wanted by authorities in both Nigeria and Europe for defrauding the Nigerian government out of oil sale profits.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>But Aluko has bigger problem, it seems. <strong>The 47-year-old tycoon is under investigation in Nigeria and in Europe for alleged money-laundering crimes.</strong></p> <p>&nbsp;</p> <p>A Nigerian court, according to various reports, tried to freeze Aluko’s assets, including his One57 unit, as part of the alleged scheme to defraud the government of oil sale profits.</p> </blockquote> <p>Meanwhile, it seems that the only reason Aluko isn't already in prison is because the Nigerian courts can't seem to find him to serve papers.&nbsp;<strong> Apparently he's been hiding out on this 213-foot, $100 million yacht, the Galactica Star, for over a year.</strong></p> <p><a href=" - Kola Boat 1.JPG"><img src="" style="width: 600px; height: 380px;" /></a></p> <p>&nbsp;</p> <p>Over the past year, the boat has been spotted making port calls in Cancun, Mexico and Turkey.</p> <p><a href=" - Kola Boat 2.JPG"><img src="" style="width: 600px; height: 390px;" /></a></p> <p>&nbsp;</p> <p>Of course, if you're going to be an international playboy then you need to have rich and famous friends and, as it turns out, rappers<strong> Jay-Z and P. Diddy </strong>seemed to have fulfilled that role for Aluko.&nbsp; <strong>Back in 2012 the rap duo apparently hosted Aluko's birthday party in Beverly Hills.&nbsp;</strong> Then, just a few years later in 2015, <strong>Jay-Z and wife Beyonce rented Aluko's mega-yacht for the bargain basement price of just $900,000 per week to sail around the Mediterranean.</strong></p> <p><img src="" alt="Jayz" width="600" height="369" /></p> <p>&nbsp;</p> <p>Well, presumably it was fun while it lasted.</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="800" height="521" alt="" src="" /> </div> </div> </div> Aluko Business Economy Fail Foreclosure Geography of Africa Kola Aluko Mediterranean Mexico New York Post Nigeria Nigerian court Nigerian government One57 Real estate Turkey World Sat, 24 Jun 2017 23:15:00 +0000 Tyler Durden 598594 at An Open Letter To The Fed's William Dudley <p><a href=""><em>Authored by MN Gordon via,</em></a></p> <p><em>Dear Mr. Dudley,</em></p> <p>Your recent <a href="">remarks</a> in the wake of last week&rsquo;s <a href="">FOMC statement</a> were notably unhelpful.</p> <p><strong><em>In particular, your excuses for further rate hikes to prevent crashing unemployment and rising inflation stunk of rotten eggs.</em></strong></p> <h3><span style="text-decoration: underline;"><strong>Crashing Unemployment</strong></span></h3> <p>Quite frankly, crashing unemployment is a construct that&rsquo;s new to popular economic discourse, and a suspect one at that.</p> <p>Years ago, prior to the nirvana of globalization, the potential for wage inflation stemming from full employment was the going concern.&nbsp; Now that the official unemployment rate&rsquo;s just 4.3 percent, and wages are still down in the dumps, it appears the Fed has fabricated a new bugaboo to rally around.&nbsp; What to make of it?</p> <p><strong>For starters, the Fed&rsquo;s unconventional monetary policy has successfully pushed the financial order completely out of the economy&rsquo;s orbit.&nbsp; The once impossible is now commonplace.</strong></p> <p>For example, the absurdity of negative interest rates was unfathomable until very recently. But that was before years of central bank asset purchases made this a reality.</p> <p>Perhaps, the imminent danger of crashing unemployment will give way to the impossibility of negative unemployment.&nbsp; Crazy things can happen, you know, especially considering the design limitations of the Bureau of Labor Statistics&rsquo; birth-death model.</p> <p><strong>Secondly, muddying up the Fed&rsquo;s message with inane nonsense like crashing unemployment severely diminishes the Fed&rsquo;s goal of providing transparent communication.&nbsp; In short, Fed communication has regressed from backassward to assbackward.</strong></p> <p>During the halcyon days of Alan Greenspan&rsquo;s Goldilocks economy, for instance, the Fed regularly used jawboning as a tactic to manage inflation expectations.&nbsp; Through smiling teeth Greenspan would talk out of the side of his neck.&nbsp; He&rsquo;d jawbone down inflation expectations while cutting rates.</p> <p>Certainly, a lot has changed over the years.&nbsp; So, too, the Fed seems to have reversed its jawboning tactic.&nbsp; By all accounts, including your Monday remarks, the Fed is now jawboning up inflation expectations while raising rates.</p> <h3><span style="text-decoration: underline;"><strong>Congratulations and Thank You!</strong></span></h3> <p><strong>History will prove this policy tactic to be a complete fiasco.&nbsp;</strong> But at least the Fed is consistent in one respect.&nbsp; The Fed has a consistent record of getting everything dead wrong.</p> <p>If you recall, on January 10, 2008, a full month after the onset of the <a href="">Great Recession</a>, Fed Chair <a href="">Ben Bernanke</a> stated that &ldquo;The Federal Reserve is not currently forecasting a recession.&rdquo;&nbsp; Granted, a recession is generally identified by two successive quarters of declining GDP; so, you don&rsquo;t technically know you&rsquo;re in a recession until after it is underway.&nbsp; But, come on, what good is a forecast if it can&rsquo;t discern a recession when you&rsquo;re in the midst of one?</p> <p>Bernanke&rsquo;s quote ranks up there in sheer idiocy with Irving Fisher&rsquo;s public declaration in October 1929, on the eve of the 1929 stock market crash and onset of the Great Depression, that &ldquo;Stock prices have reached what looks like a permanently high plateau.&rdquo;&nbsp; By the month&rsquo;s end the stock market had crashed and crashed again, never to return to its prior highs in Fisher&rsquo;s lifetime.</p> <p>To be fair, Fisher wasn&rsquo;t a Fed man.&nbsp; However, he was a dyed-in-the-wool central planner cut from the same cloth.&nbsp; Moreover, it is bloopers like these from the supposed experts like Bernanke and Fisher that make life so amiably pleasurable.&nbsp; Do you agree?</p> <p>Hence, Mr. Dudley, words of congratulations are in order!&nbsp; Because on Monday you added what&rsquo;ll most definitely be a sidesplitting quote to the annals of economic banter:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;I&rsquo;m actually very confident that even though the expansion is relatively long in the tooth, we still have quite a long way to go.&nbsp; This is actually a pretty good place to be.&rdquo; &ndash; William Dudley, June 19, 2017</em></strong></p> </blockquote> <p>Thank you, sir, for your shrewd insights.&nbsp; They&rsquo;ll offer up countless laughs through the many dreary years ahead.</p> <h3><span style="text-decoration: underline;"><strong>Too Little, Too Late</strong></span></h3> <p>When it comes down to it, your excuses for raising rates are not about some unfounded fear of a crashing unemployment rate.&nbsp; Nor are they about controlling price inflation.&nbsp; These are mere cover for past mistakes.</p> <p>The esteemed James Rickards, in an article titled <a href="">The Fed&rsquo;s Road Ahead</a>, recently boiled present Fed policy down to its very core:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Now we&rsquo;re at a very delicate point, because the Fed missed the opportunity to raise rates five years ago. &nbsp;They&rsquo;re trying to play catch-up, and yesterday&rsquo;s [June 14] was the third rate hike in six months.</strong></p> <p>&nbsp;</p> <p>&ldquo;Economic research shows that in a recession, they [the Fed] have to cut interest rates 300 basis points or more, or 3 percent, to lift the economy out of recession. &nbsp;I&rsquo;m not saying we are in a recession now, although we&rsquo;re probably close.</p> <p>&nbsp;</p> <p>&ldquo;But if a recession arrives a few months or even a year from now, how is the Fed going to cut rates 3 percent if they&rsquo;re only at 1.25 percent?</p> <p>&nbsp;</p> <p><strong>&ldquo;The answer is, they can&rsquo;t.</strong></p> <p>&nbsp;</p> <p>&ldquo;So the Fed&rsquo;s desperately trying to raise interest rates up to 300 basis points, or 3 percent, before the next recession, so they have room to start cutting again. &nbsp;In other words, they are raising rates so they can cut them.&rdquo;</p> </blockquote> <p><strong>Unfortunately, Mr. Dudley, the Fed miscalculated.&nbsp;</strong> Efforts to now raise rates will be too little, too late.&nbsp; To be clear, there ain&rsquo;t a snowball&rsquo;s chance in hell the Fed will get the federal funds rate up to 3 percent before the next recession.&nbsp; You likely won&rsquo;t even get it up to 2 percent.</p> <p>Nonetheless, you should stay the course.&nbsp; If you&rsquo;re gonna raise rates, then raise rates.&nbsp; Don&rsquo;t cut them.&nbsp; Raise them.&nbsp; Then raise them some more.</p> <p><u><em><strong>Crash stocks.&nbsp; Crash bonds.&nbsp; Crash real estate.&nbsp; Crush asset prices.&nbsp; Purge the debt and speculative excesses from financial markets.</strong></em></u></p> <p>Let marginal businesses go broke.&nbsp; Let too big to fail banks, fail. &nbsp;You can even consult with Dick &ldquo;The Gorilla&rdquo; Fuld, if needed.&nbsp; Then let nature do its work.</p> <p>In essence, bring the paper money experiment to a close and shutter the doors of the Federal Reserve.&nbsp; No doubt, the economy and millions of people will suffer a painful multi-decade restructuring.&nbsp; But what choice is there, really?</p> <p><strong>Let&rsquo;s face it.&nbsp; The Fed can&rsquo;t hold the financial order together much longer anyway.&nbsp;</strong> Why pretend you can with utter nonsense like crashing unemployment?&nbsp; It&rsquo;s insulting.</p> <p><strong>Your credibility&rsquo;s shot.&nbsp;</strong> Better to get on with it now, before it&rsquo;s forced upon you.</p> <p><em>P.S.&nbsp; What&rsquo;s up with <a href="">Neel Kashkari?</a> &nbsp;The man has gone <a href="">rogue</a>.</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="240" height="152" alt="" src="" /> </div> </div> </div> Alan Greenspan Ben Bernanke Ben Bernanke Ben Bernanke Bureau of Labor Statistics Bureau of Labor Statistics Business Economy Fail Federal Reserve Financial crises Fisher Full employment Goldilocks Great Depression Inflation Jawboning Macroeconomic policy Macroeconomics Market Crash Monetary Policy Monetary policy Neel Kashkari Real estate Reality Recession Recession Structure The Gorilla Too Big To Fail Unemployment Unemployment US Federal Reserve William Dudley Sat, 24 Jun 2017 22:40:00 +0000 Tyler Durden 598591 at CIA Director Mike Pompeo: Trump's "An Avid Consumer" Of Intel, Will "Punish Leakers" <p>In <a href="">his first interview since becoming the head of the CIA,</a> Mike Pompeo pushed back against accusations that President Donald Trump doesn&rsquo;t read his daily intelligence briefings, claiming that the president is &ldquo;very interested&rdquo; in what&rsquo;s happening at the intelligence communities and that his daily in-person briefings with the president typically run longer than their allotted time.</p> <p>Pompeo<a href=""> tells MSNBC that</a> Trump is a demanding boss who asks <strong>&ldquo;great questions&rdquo;</strong> and is trying to enable the CIA to take a more active<strong> &ldquo;operational&rdquo;</strong> role in countering threats posed by the US&rsquo;s enemies.</p> <p><iframe border="no" height="500" scrolling="no" src="" width="635"></iframe></p> <p>Pompeo began by responding to criticism that some say Trump is &quot;uninterested in facts&quot;:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;I cannot imagine a statement that is any more false than one that would attribute President Trump of not being interested in the intelligence community. <strong>He is an avid consumer of the products the CIA provides he thinks about them and comes back and asks great questions and perhaps most importantly relies on them.</strong>&rdquo;</p> </blockquote> <p><a href="">As the Hill</a> pointed out, Pompeo acknowledged that the CIA has been harmed by information leaks in recent years, but said that he and Trump are focused on shutting down the leakers.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;There have been failures,&rdquo; he said. <strong>&ldquo;You have not only nation states trying to steal our stuff but ... folks like Wikileaks.&rdquo;</strong></p> </blockquote> <p>He went on to say that he believes under Trump, the intelligence community will be able to both stop and punish leaking.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>We and all of President Trump&rsquo;s government are focused on stopping leaks,</strong>&quot; he said, &quot;and I think we&#39;ll have some successes both on the deterrence side, that is stopping them from happening, <strong>as well as on punishing those who we catch who have done it.</strong>&quot;</p> </blockquote> <p>When asked about cooperation within the intelligence community, Pompeo said he suspects it has improved since the pre-9/11 era, though imperfections remain.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;I think we&rsquo;re in a much better place today whether we&rsquo;ve connected them all or not I suspect perfection cannot be achieved. <strong>The intelligence community have taken answers to today&rsquo;s problems and applied them in really interesting ways.&rdquo;</strong></p> </blockquote> <p>As Pompeo&rsquo;s interviewer, NBC&rsquo;s Hugh Hewitt, noted, the intelligence community almost universally assumed that Clinton was going to win November&rsquo;s election.</p> <p>But now that Trump is in power, how is the administration triaging the US&rsquo;s enemies? Pompeo says he and the president spend the most time discussing the threat posed by North Korea. Trump scored a major foreign policy victory this week after <a href="">Chinese state media reported that the Communist Party has agreed</a> <strong>with the US that the Korean peninsula needs to undergo &ldquo;complete, verifiable and irreversible&rdquo; denuclearization.</strong></p> <p>Chinese state media described the talks, the first of their kind with the Trump administration, as an upgrade in dialogue mechanisms <strong>between China and the United States, following on from President Xi Jinping&#39;s meeting with Trump in Florida in April.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;North Korea is a very real danger. I hardly escape a day at the White House without the president asking me about North Korea and how the US is responding to that threat. For the past 20 years, the US has whistled past the graveyard hoping on hope that North Korea would see a change of color.&quot;</p> <p>&nbsp;</p> <p>&quot;They have the capacity to put America at risk with a nuclear weapon.&rdquo;</p> </blockquote> <p>Countering Iran, ISIS and Hezbollah also rank highly on the president&rsquo;s list of priorities. When comparing Hezbollah to Iran, Pompeo said that the latter&rsquo;s resources increase its capability to threaten the US.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Iran is a powerful nation state with wealth and resources an organized government and an established piece of real estate of which they have complete control&hellip;I would say Iran poses the larger challenge, though I hesitate to rank them. ISIS is an enormous risk to the US today and we need to do everything to defeat them.&rdquo;</p> </blockquote> <p><strong>In a sudden, unexpected turn, Hewitt asked Pompeo about Saudi Arabia and the allegations that radical elements within the kingdom&rsquo;s government helped aid and abet the 9/11 hijackers.</strong> While Pompeo wouldn&rsquo;t comment on these claims, he offered something almost as telling.</p> <p>Pompeo said he believes the Saudi Arabian government values the cooperation and friendship of the US, and that the kingdom has made &ldquo;a fundamental decision&rdquo; <strong>not to condone acts of terror, or terrorist groups like Al Qaeda. &nbsp;</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;They welcomed an American who wasn&rsquo;t on the side of the Iranians for coming to visit with them. <strong>They&rsquo;ve come to understand that America will support them when pushing back against enemies that we share and support them to expand their economies as well.&quot;</strong></p> <p>&nbsp;</p> <p>&quot;The Saudis have made a fundamental decision not to engage in that kind of activity that has led to all kinds of trouble in past decades&hellip;<em><strong>I think they understand that it&rsquo;s not in Saudi Arabia&rsquo;s best interest to not support terrorism.&rdquo;</strong></em></p> </blockquote> <p>Of course, Pompeo&rsquo;s response carefully sidestepped any acknowledgment of whether Saudi Arabia once collaborated with Al Qaeda to launch acts of terror against the US. Maybe Pompeo was trying to reassure executives at Saudi Aramco, who have argued against <a href="">bringing the impending IPO of a 5% stake in the state-owned oil giant</a> to New York City, fearing a lawsuit. Don&rsquo;t worry, he seemed to suggest: <em><strong>All has been forgiven.</strong></em><br />&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="412" height="304" alt="" src="" /> </div> </div> </div> al-Qaeda American Presbyterians Business Central Intelligence Agency Central Intelligence Agency China Communist Party Donald Trump Donald Trump Florida Geography of Asia Hezbollah Hizballah Iran ISIS Mike Pompeo MSNBC NBC New York City North Korea Politics Politics Real estate Saudi Arabia Saudi Arabia Saudi Arabian government Trump Administration Trump’s government United States White House White House Sat, 24 Jun 2017 22:05:00 +0000 Tyler Durden 598602 at Leaked Police Report Exposes 23 Muslim-Controlled "No Go Zones" In Sweden: Plagued With Violence, Sexual Assaults, & Gun Crimes <p><a href=""><em>Authored by Mac Slavo via,</em></a></p> <p><a href=""><img alt="" src="" style="width: 560px; height: 369px;" /></a></p> <p>Though European leaders and their US-based counterparts have vehemently denied their existence, a leaked report from the Swedish police confirms that <strong>there are at least 23 Muslim-controlled &ldquo;No-Go Zones&rdquo; and some 60 &ldquo;vulnerable areas&rdquo; where non-muslim citizens of the country can no longer visit safely.</strong></p> <p>As noted in the RT video below,<strong> the areas are plagued with violence, sexual assaults and gun crimes, and things have gotten so bad that police and emergency services personnel refuse to enter.</strong></p> <p>According to the Swedish National Police Commissioner:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>We see developments in our country which are not always going in the right direction&hellip; <strong>We have more than 60 vulnerable areas in and around major cities in Sweden..</strong> and we see criminality there and we need to turn around these developments in those areas&hellip; and we need the assistance of other parts of our society.</p> </blockquote> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p><em><strong>Call us crazy, but maybe not allowing mass migration from countries with ideals, morals and&nbsp;laws that run nearly 100% counter to those of your country would be a good start?</strong></em></p> <p>While that may be considered racist, xenophobic and nationalistic by many &ldquo;progressives&rdquo; around the world,<strong> one simply can&rsquo;t deny that such no-go zones are the result of forced cultural assimilation. </strong>Of course, the assimilation requirement appears to only involve the natural citizens of the countries in question, because apparently migrants <a href="" target="_blank">can engage in any sort of activities they wish</a> without consequence.</p> <p>As one <a href="" target="_blank">angry foreigner from Sweden previously explained</a>, <strong>it is now taboo in Sweden (and all civilized Western countries) to take pride in one&rsquo;s country and culture, noting that by doing so you are considered &ldquo;racist.&rdquo;</strong></p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>The fact is that Western and Islamic culture sit on two completely different sides of the spectrum, and while the West has welcomed millions of refugees over the last several years, the same doesn&rsquo;t appear to be true for the migrants.</p> <p>In Britain, for example, followers of Islam are feverishly <a href="" target="_blank">working to build a nation within a nation</a>, ruled by Sharia law with no regard to Britain&rsquo;s legal system.</p> <p>The same has been true across America. In fact, the issue is so serious that the Texas State legislature <a href="" target="_blank">recently passed a bill</a> that would force State courts to ignore any foreign law when deciding cases.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;My colleagues and I here at the Texas Legislature want to make sure Texas judges never apply foreign law in Texas courts in violation of constitutional rights and the public policy of our state,&rdquo; said Flynn.</p> <p>&nbsp;</p> <p>Under HB 45, Texas and U.S. law supersede all other laws. It prevents state judges from applying any foreign law because, in doing so, it infringes upon U.S. and Texas constitutional rights. The bill shields litigants in family law cases &ldquo;against violations of constitutional rights and public policy in the application of foreign law&rdquo; under the U.S. and Texas Constitutions, federal and judicial precedent, the Texas Family Code, and the Uniform Child Custody Jurisdiction and Enforcement Act, among other protections.</p> </blockquote> <p><strong>You&rsquo;d think such a law wouldn&rsquo;t be necessary in America,&nbsp;but&nbsp;the last few years show that the Islamization, and thus the push for Sharia Law, is <a href="" target="_blank">happening right here and now</a>.</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="527" height="347" alt="" src="" /> </div> </div> </div> Ban on sharia law Islam Islamic jurisprudence Law Sharia Social Issues Swedish National Police Swedish police Texas Texas State legislature United States Sat, 24 Jun 2017 21:30:00 +0000 Tyler Durden 598589 at These Are The US Cities Where Graduates Struggle The Most With Student Debt <p>With tuition at private colleges routinely eclipsing the $60,000 mark, it&rsquo;s more important than ever for recent graduates to settle in cities where circumstances allow them to start paying down their massive debt piles as quickly as possible.</p> <p>That means a city with strong job offers, but where the cost of living isn&rsquo;t so high as to siphon off a young worker&rsquo;s earnings.</p> <p>To that end, <a href="">Credible</a> crunched the numbers for the country&rsquo;s 23 most populous cities and ranked them according to how much younger workers struggle with student-debt payments. <strong>The lender, using data from 9,000 of its own borrowers, took the average income in each of those cities with the average monthly housing payment and their average monthly student loan payment, and found that the city where students struggle the most is San Jose, Calif., followed by Fort Worth, Texas and Boston, Mass.</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 174px;" /></a></p> <p>In Dallas, Jacksonville, and Houston, the cities that topped<a href=""> Credible&rsquo;</a>s ranking for the most affordable cities for recent grads, borrowers have more of their income left over after paying their monthly loan and housing bills as compared to the other cities on the list. <u><strong>More than 70% of US students borrow money to attend college, with the average debt load among this cohort amounting to about $37,000.</strong></u></p> <p><script id="infogram_0_cities_with_the_highest_average_student_loan_burden" title="Cities with the highest average student loan burden" src="//" type="text/javascript"></script></p> <div style="padding:8px 0;font-family:Arial!important;font-size:13px!important;line-height:15px!important;text-align:center;border-top:1px solid #dadada;margin:0 30px"><a href="" rel="nofollow" style="color:#989898!important;text-decoration:none!important;" target="_blank">Cities with the highest average student loan burden</a><br /><a href="" rel="nofollow" style="color:#989898!important;text-decoration:none!important;" target="_blank">Create your own infographics</a></div> <p>&nbsp;</p> <p>But even in these cities, <strong>&ldquo;nearly 27 percent of borrowers&rsquo; average monthly income is eaten up by their monthly housing payment and their monthly loan payment alone. That doesn&rsquo;t even take into account other expenses such as taxes, food, or transportation,&quot; <a href="">according to Credible. </a></strong></p> <p>It&rsquo;s also not that far removed from the more than 30 percent of borrowers&rsquo; average monthly income dedicated to loan and housing payments in the cities at the top of the list.</p> <p>But this isn&rsquo;t that surprising. While monthly housing costs tend to be slightly higher in the least affordable cities compared with the other cities, the margin of difference isn&rsquo;t large &ndash; suggesting that, while affordability might be one factor that grads take into account when choosing where to live, high rents don&rsquo;t necessarily prevent people from flocking to certain cities.</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="586" height="292" alt="" src="" /> </div> </div> </div> Business Economy Education Finance Graduated payment mortgage loan Loans Money Mortgage Mortgage industry of the United States Student debt Sat, 24 Jun 2017 20:55:00 +0000 Tyler Durden 598575 at The Lost Goldman Sachs 1985 Fixed Income Recruiting Video <p><a href=""><em>Authord by Sarah Butcher via,</em></a></p> <p><strong>In 1985, Goldman Sachs was still a partnership. </strong>The current partners owned around 80% of the firm, retired partners held the remainder. Lloyd Blankfein was a 31 year-old trader at J. Aron, the commodities house Goldman had purchased four years earlier. Run by John Weinberg, a former M&amp;A banker, Goldman in 1985 was mostly a U.S. operation. There were a handful of overseas offices, including one in London, but in&nbsp;<a href="" target="_blank" rel="nofollow">the words of Lisa Endlich</a>,<strong> Goldman’s London few hundred staff were sitting in an, “unair-conditioned setting on one floor of an office building.”</strong></p> <p><strong>Nonetheless, Goldman wanted expansion.</strong> In 1986, it decided to go for growth. Over the next 12 years, the firm doubled in size and its capital increased five times.</p> <p><a href=""><img src="" width="560" height="312" /></a></p> <p><strong>This is the world depicted by a fixed income recruiting video made by GS in 1985 which has<a href="" target="_blank" rel="nofollow lightbox-video-0">&nbsp;just surfaced on Youtube.&nbsp;</a></strong>Despite being posted to the video sharing network in March 2015, it’s only just been unearthed.</p> <p><a href=""><img src="" width="560" height="313" /></a></p> <p>We’ve posted the 10 minute video below (3 mins on YouTube are blank).<strong> Goldman used it to make a pitch for, “exceptionally talented and motivated individuals,” to work in the fixed securities markets which it said were experiencing, “rapid growth.”</strong></p> <p>Highlights of 1985 Goldman Sachs included smoking at the desk, endless coffee in paper cups, pagers in belts, big hair, big computers, a lot of telephones, a lot of paper and a lot of human beings. The video supplements this with an encouraging ’80s musical accompaniment.</p> <p><iframe src="" width="560" height="315" frameborder="0"></iframe></p> <p><strong>“The pace is fast, and the atmosphere is intense,”</strong> Goldman’s former self warns: <strong>“Emotions change from minute to minute.”</strong> Prerequisites for getting a job there included, “intelligence, independence, a strong desire to succeed, creativity and the ability the quickly translate ideas into action…”</p> <p>If anyone knows who the people in the video are, please enlighten us <strong><em>(future GS CEO Jon Corzine can be seen shouting into the phone at 7 minutes 30 seconds).</em></strong> </p> <p>If you like the genre you can always go on to sample the&nbsp;<a href="" target="_blank" rel="nofollow lightbox-video-1">1987 documentary about Paul Tudor Jones.&nbsp;</a></p> <p><iframe src="" width="560" height="315" 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="902" height="502" alt="" src="" /> </div> </div> </div> Blankfein Business Corzine Economy of New York City Economy of the United States Finance fixed Goldman goldman sachs Goldman Sachs Goldman Sachs John L. Weinberg Lisa Endlich Lloyd Blankfein Lloyd Blankfein Paul Tudor Jones Rockefeller Center Subprime mortgage crisis Sat, 24 Jun 2017 20:20:00 +0000 Tyler Durden 598578 at Visa Is Hiring An Ethereum Blockchain Engineer <p>For all those hardcore ethereum bugs who got <a href="">stopped out at $13 during </a>last week's 96% flash crash (and in some cases as low as $0.10) we have some good news<a href="">: Visa wants to hire </a>a BlockChain engineer who is "experienced with Ethereum and blockchain architecture to be a part of team tasked with building distributed application."</p> <p>There is just one problem: while we are confident compensation will be generous, according to the qualification requirements, "<strong>total Industry experience must be 8+ years" </strong>which is about twice as long as Ethereum has been in existence, and roughly as long as the very concept of blockchain has existed: perhaps Visa is only seeking to hire Satoshi?</p> <p><a href=""><img src="" width="600" height="1224" /></a></p> <p>By they way, did we mention that Visa is <strong>now working on Blockchain technology</strong>, is building a "distributed application" and the successful candidate "will be working in VISA Global Commercial Payments area, <strong>team will be building a new payment rail <a href="">leveraging Blockchain technology and distributed ledger</a>."</strong></p> <p>As Visa goes increasingly more publich with with aggressive expansion into blockchain - recal <a href="">last year the company Introduced </a>"International B2B Payment Solution Built on Chain’s Blockchain Technology" with virtually nobody noticing, the recent gains in ETH - if only as the rest of the world rushes in over all the "blockchain" buzz-&nbsp; which has resulted in a 40x return YTD, blowing away every single other asset class, will pale in comparison to what may be coming. Which reminds us of our February post "<a href="">Ethereum To Soar After JPMorgan, Intel, Microsoft And Others Form Blockchain Alliance</a><strong>." </strong>It did: back then Ethereum was $13.</p> <p><em>h/t <a href="">reddit</a></em><a href=""></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="488" height="269" alt="" src="" /> </div> </div> </div> Bitcoin Blockchain technology Blockchains Computing ConsenSys Cross-platform software Cryptocurrencies E-commerce Ethereum Ethereum Classic flash Joseph Lubin Ledger Others Form Blockchain Alliance Technology Sat, 24 Jun 2017 20:08:22 +0000 Tyler Durden 598603 at Two Italian Zombie Banks Toppled Friday Night <p><a href=""><em>Authored by Wolf Richter via,</em></a><strong>&nbsp;</strong></p> <p><span style="text-decoration: underline;"><strong>ECB shuts down Veneto Banca and Banca Popolare di Vicenza.</strong></span></p> <p>When banks fail and regulators decide to liquidate them, it happens on Friday evening <strong>so that there is a weekend to clean up the mess</strong>. And this is what happened in Italy &ndash; with two banks!</p> <p><strong>It&rsquo;s over for the two banks that have been prominent zombies in the Italian banking crisis:</strong> Veneto Banca and Banca Popolare di Vicenza, in northeastern Italy.</p> <p>The banks have combined assets of &euro;60 billion, <strong>a good part of which are toxic and no one wanted to touch them</strong>. They already received a bailout but more would have been required, and given the uncertainty and the messiness of their books, nothing was forthcoming, and the ECB which regulates them lost its patience.</p> <p>In a tersely worded <a href="" rel="noopener" target="_blank">statement</a>, the ECB&rsquo;s office of Banking Supervision ordered the banks to be wound up because they &ldquo;were failing or likely to fail as the two banks repeatedly breached supervisory capital requirements.&rdquo;</p> <p><em><strong>&ldquo;Failing or likely to fail&rdquo;</strong></em> is the key phrase that banking supervisors use for <strong>banks that &ldquo;should be put in resolution or wound up under normal insolvency proceedings,&rdquo;</strong> the statement said.&nbsp;This is the first Italian bank liquidation under Europe&rsquo;s new Single Resolution Mechanism Regulation. The ECB explained:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The ECB had given the banks time to present capital plans, but the banks had been unable to offer credible solutions going forward.</p> <p>&nbsp;</p> <p>Consequently, the ECB deemed that both banks were failing or likely to fail and duly informed the Single Resolution Board (SRB), which concluded that the conditions for a resolution action in relation to the two banks had not been met. The banks will be wound up under Italian insolvency procedures.</p> </blockquote> <p><strong>And the ECB provides a little history of its failed efforts to put these banks on the right track:</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>ECB Banking Supervision has closely monitored the two banks since capital shortfalls were identified by the comprehensive assessment in 2014. Since then, the two banks have struggled to overcome high levels of non-performing loans and underlying challenges to their business models, which resulted in further deterioration of their financial position.</p> <p>&nbsp;</p> <p>In 2016, the Atlante fund [Italy&rsquo;s government-sponsored &ldquo;bad bank&rdquo; set up in Luxembourg to take toxic assets off Italian banks books] invested approximately &euro;3.5 billion in Veneto Banca and Banca Popolare di Vicenza. However, the financial position of the two banks deteriorated further in 2017.</p> <p>&nbsp;</p> <p>The ECB had therefore asked the banks to provide a capital plan to ensure compliance with capital requirements. Both banks presented business plans which were deemed not to be credible by the ECB.</p> </blockquote> <p><strong>So nothing worked. </strong>Private sector money stayed away in droves. JP Morgan, which had been recruited to save the Italian banks, threw in the towel.<strong> These banks had been zombies for too long. Everybody knew it. But the government kept denying it.</strong></p> <p><u><strong>Just weeks ago, Italy&rsquo;s Minister of Economy Pier Carlo Padoan <a href="" rel="noopener" target="_blank">insisted</a> that the two banks would not be wound down.</strong></u> Last year, to dispel the mountain of evidence to the contrary, he insisted that that there would be no need of any future bail outs; and that, furthermore, Italy did not even have a banking problem.</p> <p><strong>In early June, the two banks were instructed by the European Commission to raise an additional &euro;1.25 billion in private capital. No one bit.</strong> Italy&rsquo;s government then tried to persuade the European Commission and the ECB to water down the requirement to &euro;600-800 million, and it urged Italian banks to chip in to the bank rescue fund.</p> <p>All that failed. So this weekend, the Italian government gets to sit down together for a friendly chat to enact the necessary measures to protect depositors and senior bondholders in those two banks. Stockholders will be crushed. Junior bondholders will likely get slammed hard. And the Italian taxpayer might face some additional pain &ndash; all of it caused by many years of terrible and reckless bank management. <strong>The saga of the long-festering banking crisis has thus moved on to the next chapter.</strong></p> <p><strong>A new era has begun in Europe. And it started in Spain. Many Banco Popular investors were wiped out. Taxpayers are off the hook.</strong> Read&hellip;&nbsp; <a href="">&ldquo;Bail-In&rdquo; Era for Europe&rsquo;s Banking Crisis Begins</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="261" height="167" alt="" src="" /> </div> </div> </div> Atlante Bad Bank Banca Popolare Banca Popolare di Vicenza Banca Tirrenica Banking in Italy Business Economy of Europe Economy of Italy European Central Bank European Commission European System of Central Banks Fail Italian government Italy Italy’s government non-performing loans northeastern Italy Single Resolution Board Single Supervisory Mechanism UBI Banca Veneto Banca Vicenza Sat, 24 Jun 2017 19:55:00 +0000 Tyler Durden 598583 at