Germany

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Germany Tapped Hillary Clinton: "It Was Unintentional"





About a year after it was first revealed that the US had spied not only on Angela Merkel but on virtually every German citizen, in a remarkable NSA-CIA tag-team joint venture, many were wondering why Germany is taking things so calmly (aside, of course, for the whole "Fed may need to bail out Deutsche Bank at any moment" bit). Turns out the answer is that Germany was doing the same all along and as the German press reveals today, the German Federal Intelligence Service (BND) has tapped at least one phone call of then Secretary of State, Hillary Clinton.

 
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14 Reasons Why The U.S. Economy's Bubble Of False Prosperity May Be About To Burst





The record-breaking outflows in high-yield bonds are not the only indication that the U.S. economy could be on the verge of very hard times. Retail sales are extremely disappointing, mortgage applications are at a 14 year low and growing geopolitical storms around the world have investors spooked. For a long time now, we have been enjoying a period of relative economic stability even though our underlying economic fundamentals continue to get even worse. Unfortunately, there are now a bunch of signs that this period of relative stability is about to end. The following are 14 reasons why the U.S. economy's bubble of false prosperity may be about to burst...

 
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3 Things Worth Thinking About





The first half of this week has been very interesting from an economic, financial and geopolitical viewpoint. Despite what appears to be globally increasing risks, the financial markets have seemed relatively unfazed. Historically, such calm has always existed prior to the eventual storm. This week’s “3 Things” takes a look at some of the “rising risks” that we believe are being ignored which could potentially be harmful to individual's portfolios.

 
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World Reserve Currencies: What Happened During Previous Periods Of Transition?





Global crises wreak havoc on all levels of existence, not to the mention the great cost to human lives. If we are to learn from history, however, it seems as though we might have to nevertheless brace ourselves for yet another one in the near future, as it marks the end of one saeculum and the start of a new economic paradigm aligned more positively with proper balances of trade, debt, and policies. The US is trying to postpone the crisis by printing money, however this is creating currency wars with nearly all major central banks in the world. As history has shown us time and again, causing this delay through money printing will only aggravate the problem, not only not preventing the inevitable, but indeed making the transition more painful and costly.

 
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Gazprom To Europe: We Own You (At Least Until 2016)





“Commercial shale gas production in Europe can begin not earlier than in 2016-2018 even with positive geological surveys. But production volumes will not bring about major changes in the European gas market due to a decline in conventional gas production,” Gazprom. Which, sadly for Europe, means that Putin will be dictating his terms on the energy-strapped continent for a long, long time.

 
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Frontrunning: August 14





  • Police fire tear gas, stun grenades at Missouri protesters (Reuters)
  • Putin’s Pipeline Bypassing Ukraine at Risk Amid Conflict (BBG)
  • Russia's Largest Oil Company Seeks $42 billion to Weather Sanctions (WSJ)
  • Shells hit central Donetsk, Russian aid convoy heads towards border (Reuters)
  • U.S. Tightens Sanctions, Putting More Russian Companies at Risk (BBG)
  • How to Blindly Score 43% Profit Overnight in China Stocks (BBG)
  • Tears guaranteed: San Diego Pension Dials Up the Risk to Combat a Shortfall (WSJ)
  • Euro Recovery Halts as Germany Shrinks, France Stagnates (BBG)
  • Billionaire Found in Middle of Bribery Case Avoids U.S. Probe (BBG)
  • Hillary Clinton, Barack Obama 'Hug It Out' on Martha's Vineyard (WSJ)
 
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Here Comes The European Triple-Dip: Negative German GDP Sends Bunds Under 1% For The First Time Ever





The hammer finally hit for Europe when overnight both Germany and France reported Q2 GDP prints that missed expectations, the first actually contracting at a 0.2% rate with consensus looking for -0.1%, while France remained flat vs expectations for a tiny 0.1% rise. As a reminder, this GDP is the revised one, which already includes the estimated contribution of drugs and prostitution, suggesting the actual underlying economic growth is far worse than even reported. Then again, this is hardly surprising considering all the abysmal data out of Europe and the rest of the world in recent weeks, and with the Russian trade war sure to trim even more growth, look for all of Europe to join Italy in its first upcoming triple-dip recession in history.

 
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On The Path To War





The US is clearly now pushing Russia towards war. But if you read the signs correctly, Russia has been preparing for exactly this outcome for many years.

 
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Just The Right Amount Of Bad Overnight News To Ramp Global Equities





If it was crashing German business confidence yesterday setting the somber mood for European economic "growth" in the second half, with a European GDP decline if not outright contraction now almost practically inevitable, then overnight it was disappointing data from virtually every other spot in the globe (and Europe again) to hammer the message in, starting with a historic 6.8% drop in Japanese GDP driven by a record plunge in consumption, quickly followed by total social financing out of China which in aggregate rose by only RMB273.1bn in July, or just 18% of what was expected, with missing industrial production and retail sales just the cherry on top. Then it was Europe's turn again, where June Industrial Production contracted -0.3% on expectations of a 0.4% increase, to set the stage for tomorrow's Eurozone GDP print which, following Italy's triple-drip recession shocker last week, probably means it will be not only Japan but also Europe which are about to have taken a sharp move for the worse. All of which of course, explains why just as Europe opened, the USDJPY blasted off and took both EuroSTOXX and US equity futures higher with it, and at last check ES was some 10 higher.

 
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"Central Bank Post-Crisis Quasi-Coordination Has Broken Down"





The global monetary system is diverging and fraying.  Central bank post-crisis quasi-coordination has broken down.  Initially, foreign central banks unhappily followed the Fed in cutting rates toward zero; or else risked an appreciating currency affecting competitiveness. As domestic challenges developed and the Fed initiated ‘tapering’, many central banks pushed rates back up.  Developed world economies have grown from around 30% of global GDP 20 years ago to 50% today.  This improvement has helped motivate the unfolding of a new international economic order between developed and developing world economies. 

 
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How To "Value" Sovereign Bonds In 2 Words: US 'Friend' Or 'Foe'





If a trader knew nothing about the growth, the debt, the inflation, the exporters vs. importers, the serial defaulters, currency manipulators, hot-money or conversely deflation fighters; simply grouping the nations of the world on whether they were 'friend' or 'foe' to the US would provide an odd highly correlated value perspective on the interest rates paid on 1yr and 10yr sovereign debt... It appears your status with the central bank cabal was more important than your ability to repay the loaned money?

 
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France's 'Recovery' In 1 Hard-To-Believe Chart





With French government bonds trading at record low yields under 1.5%, it is hard to argue that the troubled socialist nation is 'priced' for either recovery or credit risk... but then again, thanks to Draghi's promise and domestic banks' largesse, none of that matters. With joblessness at record highs, the following chart of France's "recovery" shows near-record high bankruptcies and record-low profitability. Oh the beauty of socialism...as Europe's core diverges dramatically.

 
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China Begins Direct Sales Of Fruit & Vegetables To Russia





Despite the ongoing mainstream media meme that Russia is becoming 'isolated' from the rest of the world thanks to Western sanctions, it appears they have found a few new 'old' friends to become un-isolated with. On the heels of Russia's food-import-ban sanctions last week, Russian and Chinese officials have announced an agreement that China will start selling fruit and vegetables directly to Russia via a special logistics center in Russia's far east. Notably, this week saw Russia's GDP beat consensus expectations, Ruble rally, and stocks jump as German confidence plunged - can you say blowback?

 
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