The biggest slow motion trainwreck in history, one that everyone knows how it ends just not when (especially since the "when" is about 5 years overdue), that of the Greek sovereign default may just got a bit more exciting earlier today when the WSJ reported that the IMF can no longer lie - like Mario Draghi did to Zero Hedge in 2013 - that there are preparation for a Plan B. To wit: "the International Monetary Fund is working with national authorities in southeastern Europe on contingency plans for a Greek default, a senior fund official said—a rare public admission that regulators are preparing for the potential failure to agree on continued aid for Athens."
How five investment themes will evolve in the week ahead.
So on Monday? He refused to nail down a day. But Germany is ready.
Fed-created bubbles are inevitably going to implode, because they have no relation to economic reality whatsoever. And when they implode, millions of Americans are going to be financially wiped out. Just like David and Jackie Siegel, “America’s time-share king”, America just keeps on making the same mistakes over and over again - we simply can’t help ourselves. And in the end, we will all pay a great, great price for our utter foolishness.
The graduating class of 2015 is the most heavily-indebted college class in history and the chart is "up and to the right," which in the case of student loans, is anything but encouraging. Fortunately, we have some advice for this year's graduating seniors...
Threatened with deflation, the authorities will want to turn the tide in the worst possible way. What’s the worst way to stop deflation? With hyperinflation. Yes, we may suffer a year or two more of sluggish growth... or even deflation. Stocks will crash and people will be desperate for paper dollars. But sooner or later, the feds will find their feet and lose their heads. Most likely, the credit-drenched world of 2015 will end... not in a whimper of deflation, but in a bang. Hyperinflation will bring the long depression to a dramatic close long before a quarter of a century has passed.
Investors are beginning to question the efficacy of these extreme central bank policies. More are joining the chorus of critics that believe policies have become counter-productive in both the short and long run. If true, it could mean that a Fed hike might come sooner than markets believes; and may occur prior to the arrival of the desired and optimal economic conditions. There must be a lesson to learn for those investors who blindly follow central bank actions. The lesson embedded in the dramatic re-pricing in European financial markets during the past 12 days may simply be that there are dangers when chasing assets irrespective of price levels. It seems to us that the ability of central banks to generate a Pavlovian or conditional investor response to their policy actions is now rightly being called into question.
UK election surprise raises Brexit referendum risk; Greek default imminent; Payrolls miss and revised drastically weaker... can only mean one thing - front-run central banks and panic-buy stocks and bonds...
Amid tense negotiations between Greek PM Tsipras, the IMF, and EU creditors, some officials say the chances of an agreement have increased materially since Yanis Varoufakis was sidelined after infuriating his eurozone counterparts in Riga last month. Now, just when there appeared to be some hope that Athens may avert a catastrophic default, Varoufakis has reportedly distributed a new "blueprint" for Greece that has little in common with the plan advanced by the country's reshuffled negotiating team.
For over 30 years, sovereign nations, particularly in the West have been buying votes by offering social payments in the form of welfare, Medicare, social security, and the like.
An interesting article has neatly encapsulated the global (but primarily Western) “bond bubble”:
The politicians like the bankers and the central bankers, are happy to kick the can down the road and let their successors and future generations pick up the tab and pay for the economic mess that they refuse to address.
While officials have begun their own versions of capital controls by raiding pension funds, confiscating local government cash, and surcharges on withdrawals (and transfer ceilings); it appears the market participants themselves have now imposed their own share of capital controls. As Bloomberg reports, international securities firms are curtailing trading with major Greek banks - pulling credit lines and restricting FX trading limits - as fear of Grexit looms.
To paraphrase H.L. Mencken, anyone who wants the government and Federal Reserve to create a housing recovery, deserves to get it good and hard, like a four by four to the side of their head. Subprime mortgages, subprime auto loans, and subprime student loans driven by preposterously low interest rates are the liquefying foundation of this fake economic recovery. Most rational people would agree that loaning money to people who will eventually default is not a good idea. But it is the underpinning of everything the Fed and government apparatchiks have done to keep this farce going a little while longer. It will not end well – Again.
Venezuela swapped its gold at a 40% discount for dollars and has to pay intrerest on those dollars. Not anti-gold rant. Google story if you doubt the facts I cite.