Passing a European Banking stress test these days is a little like farting - easy to do, mostly hot air, and yet it typically warns of something else coming down that isn't going to be pretty
Even as the western media finally remembered over the weekend there was a Ukraine civil war going on following an advance by the Kiev army to retake some rebel strongholds in the Donbas region, with some curious what if anything Putin would do in retaliation, what Putin, or rather his envoy Sergei Lavrov were actually doing, was completely ignoring the Ukraine situation (where the West has long since conceded the loss of Crimea to the Kremlin) and instead focusing on securing the successful launch of the South Stream (remember: the second South Stream goes online, Ukraine becomes irrelevant). And since Russia already signed another historic agreement with Austria in June, which positioned the AAA-country (with some surprising emerging bank troubles subsequently) squarely against its fellow European peers, it was the turn of the other South Stream countries, namely Bulgaria.
The most dangerous organization is the now French led IMF with Christine Lagarde at the helm, which has presented a concept report in which 'debt cuts for over-indebted states are uncompromising' and are to be performed more effectively in the future by defaulting on retirement accounts held in life insurance, mutual funds and other types of pension schemes, or arbitrarily extending debt perpetually so you cannot redeem. Yes you read correctly, The new IMF paper describes in great detail exactly how to now allow the private sector, which has invested in government bonds, will be expropriated to pay for the national debts of the socialist governments. This far-reaching plan for the expropriation of savers, investors and retirees clearly shows the reality of socialism.
Deja Vu All Over Again: Fannie, Freddie Would Need Another $190 Billion Bailout When Things Go SouthSubmitted by Tyler Durden on 04/30/2014 11:43 -0400
While it will come as a surprise to exactly nobody, certainly nobody who understand that the US financial system is no better financial shape than just before the Lehman crash as nothing has been fixed and everything that is broken has been merely swept under the rug (for details see Paul Singer's explanation posted last night) of epic-er leverage, the news that when (not if) the US economy succumbs to a severe economic downturn Fannie and Freddie would require another taxpayer funded bailout, one of $190 billion or even more than the first $187.5 billion-funded nationalization of the GSEs, can only bring a smile to one's face.
Sadly, as suspected - and in line with his CFO in 2009 - the reported death of Jan Peter Schmittmann was indeed suicide. The ex-CEO of ABN Amro hanged himself, but only after murdering his wife, Nally, and 22 year-ol daughter Babette. As Bloomberg reports, a farewell letter was found in the house, but authorities declined further comment on its contents. Schmittmann’s family was cited as saying in the statement that “we knew Jan Peter struggled with severe depression," and added that their "first concern now is supporting the remaining daughter in coping with this indescribable grief." Aweful...
Dispassionate big picture overview.
Crimea Names Ruble Currency; Applies To Join Russia, Expects To Become Russian Federation Region By ThursdaySubmitted by Tyler Durden on 03/17/2014 07:24 -0400
Here is the latest via Reuters: just hours ago, Crimea's parliament officially applied to become part of Russia. The parliament "made a proposal to the Russian Federation to admit the Republic of Crimea as a new subject with the status of a republic," according to a statement on its website. A Crimean parliamentary delegation was expected to arrive in Moscow on Monday to discuss the procedures required for the Black Sea peninsula to become part of the Russian Federation. "If everything’s signed we’ll become a fully fledged region of the Russian Federation Wednesday or Thursday,” First Deputy Prime Minister Rustam Termigaliyev says in interview at govt headquarters in Simferopol. Termigaliyev added that Crimea will promptly get $1b aid from Russia in near-term, and that Hryvnia reserves enough for 10 days, then Crimea will switch to ruble. April pensions “most likely” to be paid in rubles. Crimea can be self-sufficient in natural gas after today’s nationalization of Chernomoreneftegaz. Crimea risks 150,000 hectares being left without water if Ukraine shuts off supply, though that’s “not critical,” says Termigaliyev.
As the daily street protests grow bloodier and bloodier, Venezuelan President Maduro has escalated his comments today, exclaiming that he "won't be bullied," and warning "prepare yourself, we are coming for you," if protesters don't "go home within hours."
*VENEZUELAN PROTESTERS HAVE 'HOURS' TO CLEAR BARRICADES: MADURO SAYS HE'LL SEND ARMED FORCES TO 'LIBERATE' PROTEST AREAS
With 28 dead in the last month of protests, things are very serious but as we warned previously, Maduro still enjoying the support of the poor - as EuroNews reports, it appears he is not going anywhere soon. John Kerry also came under fire as the foreign minister called him "a "murderer of the Venezuelan people," accusing him of encouraging the protests.
The Fed’s serial bubble machine has not only bestowed massive speculative windfalls on the 1%, but it has also fostered a noxious culture of plunder and entitlement in the gambling casinos of Wall Street. After each thundering sell-off during the bust phase, crony capitalist gamblers have been gifted with ill-gotten windfalls during the Fed’s subsequent maniacal money printing spree. In this context comes Bruce Berkowitz “scolding” and firing “salvos” at Washington from the front page of the Wall Street Journal.
Mainstream media discussion of the macro economic picture goes something like this: “When there is a recession, the Fed should stimulate. We know from history the recovery comes about 12-18 months after stimulus. We stimulated, we printed a lot of money, we waited 18 months. So the economy ipso facto has recovered. Or it’s just about to recover, any time now.” But to quote the comedian Richard Pryor, “Who ya gonna believe? Me or your lying eyes?” However, as Hayek said, the more the state centrally plans, the more difficult it becomes for the individual to plan. Economic growth is not something that just happens. It requires saving. It requires investment and capital accumulation. And it requires the real market process. It is not a delicate flower but it requires some degree of legal stability and property rights. And when you get in the way of these things, the capital accumulation stops and the economy stagnates.
It would indeed be supremely ironic if the "strong" foreign law bond indenture would be tested, and breached, not by Greek bonds, as so many expected in late 2011 and early 2012, but by one of the last contries in Europe which is still AAA-rated. We would find it less ironic if the next leg of the global financial crisis was once again unleashed by an Austrian bank: after all history does rhyme...
Having been 'busted' for their manipulation of events in Ukraine (and exposing their views of the European Union), it seems US diplomats have been up to their old tricks once again... this time in Venezuela. "Go Conspire In Washington," was the clear message sent to the US as President Maduro expelled three US diplomats from his country, accusing them of plotting with anti-government protesters in an attempt to topple his socialist government. This is the second time Maduro has kicked out US diplomats (3 more were expelled in September for 'conspiring with government opponents') as he blasted comments by John Kerry as "yet another maneuver" by Washington to "legitimize attempts to destabilize the Venezuelan democracy unleashed by violent groups in recent days."
Protests in Venezuela continue (despite President Maduro's proclamation that the nation is in "absolute calm"), with both the government and the opposition holding rallies, leaving several streets and subway stations in Caracas closed. 10 students who were arrested amid violent protests last week have been released, though 6 students remain in custody. Demonstrators do not yet have the numbers or support base to unseat President Nicolas Maduro's administration, but as Stratfor notes, these protests could mark a turning point as the economic situation deteriorates there is a chance that protests like this could begin to generate additional social momentum in rejection of the status quo.
Even before the new myRA program was announced, there had been whispers about the need for the US government to assume some risk for US retirement accounts. That's code for forced conversion of private retirement assets into government bonds. As bad as it is to deceive naïve Americans into trading their hard-earned retirement savings for garbage (i.e., Treasury securities), the myRA program potentially represents something far worse... the first step toward the nationalization of existing private retirement accounts.
The fact that economic ignorance is widespread is really a big problem in our view. Unfortunately even what is broadly considered the economic mainstream thought is riddled with stuff that we think just doesn't represent good economics. Partly it is actually furthered by statist propaganda and obfuscation. For instance, the average citizen is not supposed to question the centrally planned monetary system, and neither is he supposed to actually understand how it works. Another glaring example is the still widespread idea that socialism – or rather, communism (i.e., full-scale socialism as opposed to its milder 'democratic' version) – would be "the best possible system of social and economic organization if only it were implemented correctly", or the variant "...if only human nature were different and we were morally more advanced than we actually are". The main problem with this train of thought is that it is actually completely wrong...