As data on non-performing loans at Chinese banks shows the biggest sequential increase on record in Q1, Fitch wonders if perhaps the data actually obscures a far larger problem. Official figures on China's NPLs are obscured by a number of factors and may be grossly understated the ratings agency suggests. Furthermore, Fitch says "a protracted downturn in property markets could threaten the solvency of Chinese banks, given their modest loss-absorption capacity."
With a deal between Greece and its creditors seen as exceedingly unlikey at Monday's Eurogroup meeting, officials and analysts alike debate the logistics of default and a return to the drachma while Greeks may be called upon to choose between austerity or preparing for the possible introduction of a parallel currency and the economic malaise that will invariably follow.
He has previously advised to act as your own own central bank and buy physical precious metals as a hedge against currency depreciation and geopolitical crises. Faber believes that storing gold in Singapore is the safest way to own gold today.
Futures Jittery As Attention Returns To Greece; China Stocks Rebound On Latest Central Bank InterventionSubmitted by Tyler Durden on 05/11/2015 06:48 -0400
With the big macro data out of the way, attention today and for the rest of the week will focus on the aftermath of the latest Chinese rate cut - its third in the past 6 months - which managed to boost the Shanghai Composite up by 3% overnight but not nearly enough to make up for losses in the past week; any resumption of the 6+ sigma volatility in the German Bund, which already has been jittery with the yield sliding to 0.52% only to spike to 0.62% shortly thereafter before retracing some of the losses; and finally Greece, which in a normal world would have concluded its negotiations during today's Eurogroup meeting and unlocked up to €7 billion in funds for the coming months. Instead, Greece may not only not make its €770 million IMF payment tomorrow but according to ever louder rumors, is contemplating a parallel currency on its way out of the Eurozone.
Earlier we detailed reports that The IMF was preparing a contingency plan in the event of a Greek default, and furthermore that Andrea Merkel was under increasing pressure to "let Greece go," and now, as Eurogroup ministers begin to gather for today's crucial 'deal-or-no-deal' meeting, Die Welt reports The Troika has 4 scenarios for Greece - one positive and three increasingly negative ranging from the need for further bailouts to paying staff in IOUs and issuing a parallel currency.
Members of Angela Merkel's Christian Democratic bloc are pushing the Chancellor to let Greece leave the euro, with some lawmakers saying the EU would be better off without the Greeks. Meanwhile, German FinMin Schaeuble warns of "accidental" insolvency.
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.