Deutsche Bank “Raises The Warning Flag”: What The Most Important Chart For The Market Reveals

Deutsche Bank “Raises The Warning Flag”: What The Most Important Chart For The Market Reveals (ZeroHedge, Aug, 4, 2014):

“The risk sell-off we’ve seen in recent weeks frustrates us a little as the chart we’ve published most this year has pretty much predicted that tougher times would come around July. We’ve been paying it a lot of attention for over a year now but decided to wait until the autumn before we raised the warning flags. The chart in question (included in today’s pdf) is the one showing the Fed balance sheet and the S&P 500 (as a proxy for risk generally). As you can see, since the Fed balance sheet was used as an aggressive policy tool post-GFC, the graph suggests that the S&P 500 is well correlated with the size of the Fed balance sheet…  This is important as virtually all of the mega rally in the last 5 years has come in the Fed balance sheet expansion periods.” – Deutsche Bank

Money Creation – “So Simple The Mind Is Repelled” (Video)

Money Creation – “So Simple The Mind Is Repelled” (ZeroHedge, Aug, 3, 2014):

As John Kenneth Galbraith famously stated, “The process by which money is created is so simple the mind is repelled.” As Peak Prosperity’s Chris Martenson explains (as part of his excellent Crash Course), essentially, money is lent into existence though fractional reserve banking. The dollars you deposit at the bank? They turn into nearly 10x that amount as your bank subsequently makes loans using that money as collateral. As simple as the process is, nearly every American remains ignorant of it and its massive implications. At the heart of the matter is this: our money supply and its related debt obligations MUST continue expanding (thereby devaluing the purchasing power of each dollar ad infinitum) — forever — or the entire system collapses upon itself. Prepare to be repelled…

For those who simply don’t want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to PeakProsperity.com. The entire full new series, all 27 chapters of it, is available — now– to our enrolled users.

Read moreMoney Creation – “So Simple The Mind Is Repelled” (Video)

G-20 Revolt? France Gets “Positive Reception” To Challenge US Bank Fines

–  G-20 Revolt? France Gets “Positive Reception” To Challenge US Bank Fines (ZeroHedge, Aug, 3, 2014):

In recent weeks France has defied US demands not to build Mistrals for Russia, has questioned dollar imperialism and the Petrodollar, and has blasted the US banking regulator’s fines as “accelerating the decline of the dollar.” So it is likely not a huge surprise that ahead of the G-20 meeting of world leaders later in the year, The FT reports, France has gathered support to challenge US regulators imposing heavy penalties on foreign banks. Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet hoping to bring “more proportionality” to bank fines. With allies like this…

Portugal’s Insolvent Banco Espirito Santo To Be Bailed Out, Existing Equity To Be Wiped Out

Portugal’s Insolvent Banco Espirito Santo To Be Bailed Out, Existing Equity To Be Wiped Out (ZeroHedge, Aug, 3, 2014):

  • Portugal may use the Resolution Fund to recapitalize Banco Espirito Santo, Diario Economico reports, citing unidentified people linked to the process.
  • Resolution Fund may inject more than €3 billion
  • A “bad bank” may be created for the toxic assets of the credit portfolio
  • Solution aims to rescue Banco Espirito Santo without spending taxpayers’ money, and is being prepared by the government and the Bank of Portugal
  • From Aug. 4, Banco Espirito Santo will leave the stock market and will be 100% owned by the Resolution Fund, an entity created in 2012 and financed by Portuguese banks and by revenue from the special contribution that the banking sector pays the Portuguese state

Alarm Bells Ringing: Behind The Smoke And Mirrors Of The European Banking System

Alarm Bells Ringing: Behind The Smoke And Mirrors Of The European Banking System (ZeroHedge, Aug 2, 2014):

Alarm bells in the European banking system have been ringing for quite a while but nobody seems to be listening. The roaring capital markets are just too loud. But we have been keeping track of a few things.

Russian Oligarchs Wave Goodbye To Visa, Switch To Chinese Credit Card

Russian Oligarchs Wave Goodbye To Visa, Switch To Chinese Credit Card (ZeroHedge, Aug 2, 2014):

So much for the “Russia is becoming increasingly isolated” meme that the West would like many to believe. As Russia continues to sign de-dollarization deals and trade agreements with its BRICS allies while pushing ahead with retaliatory actions against the US and Europe, it appears the ‘sanctioned’ friends of Putin are taking matters into their own hands. Billionaire oligarch Gennady Timchenko, among the first to be hit by travel bans and asset freezes by the US, has decided to tear up his Visa and Mastercard, shifting all his credit cards to China’s UnionPay, noting that “in some ways it is more secure than Visa – at least the Americans can’t reach it.”

India Slams US Global Hegemony By Scuttling Global Trade Deal, Puts Future Of WTO In Doubt

India Slams US Global Hegemony By Scuttling Global Trade Deal, Puts Future Of WTO In Doubt (ZeroHedge, Aug 1, 2014):

In the last few days a new and curious question has emerged: would India embrace the US/Japan axis while foregoing its natural Developing Market, and BRICS, allies, Russia and China. We now have a clear answer and it is a resounding no, because in what was the latest slap on the face of now crashing on all sides US global hegemony, earlier today India refused to sign a critical global trade dea. Specifically, India’s unresolved demands led to the collapse of the first major global trade reform pact in two decades. WTO ministers had already agreed the global reform of customs procedures known as “trade facilitation” in Bali, Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by a July 31 deadline. WTO Director-General Roberto Azevedo told trade diplomats in Geneva, just two hours before the final deadline for a deal lapsed at midnight that “we have not been able to find a solution that would allow us to bridge that gap.

 

Michigan government forces farmers to destroy vast amounts of healthy food while homeless U.S. children and veterans starve

Michigan government forces farmers to destroy vast amounts of healthy food while homeless U.S. children and veterans starve (Natural News, July 30, 2014):

Very often, there is nothing so destructive and harmful as government bureaucracy, in which nameless, faceless automatons make decisions based on inflexible, arcane and inane rules.

And it isn’t just the federal bureaucracy; states can be just as guilty of blindly implementing policies that are clearly idiotic. Take Michigan, for example, and the subject of food.

Read moreMichigan government forces farmers to destroy vast amounts of healthy food while homeless U.S. children and veterans starve

Six Current Economic Myths and Realities

Six Current Economic Myths and Realities (Mises Canada, July 29, 2014):

The following are six of the most prevalent economic myths that appear time and again in the mainstream media.  I will give a brief description of each and a brief description of the economic reality, as seen from an Austrian perspective.

Myth #1: Increased money leads to economic prosperity.

Read moreSix Current Economic Myths and Realities

Russia And Germany Allegedly Working On Secret “Gas For Land” Deal

–  Russia And Germany Allegedly Working On Secret “Gas For Land” Deal (ZeroHedge, July 31, 2014):

While many were amused by this photo of Putin and Merkel during the world cup final showing Europe’s two most important leaders siding side by side, some were more curious by just what the two were scheming: Thanks to the Independent, we may know the answer, and it is a doozy, because according to some it is nothing shy of a sequel to the Molotov-Ribbentrop pact: allegedly Germany and Russia have been working on a secret plan to broker a peaceful solution to end international tensions over the Ukraine, one which would negotiate to trade Crimea’s sovereignty for guarantees on energy security and trade. The Independent reveals that the peace plan, being worked on by both Angela Merkel and Vladimir Putin, “hinges on two main ambitions: stabilising the borders of Ukraine and providing the financially troubled country with a strong economic boost, particularly a new energy agreement ensuring security of gas supplies.”

 

Argentina Defaults

Related info:

Clintonians Join Vulture Flock Over Argentina

Argentina: 1 Week Left Until ‘D’efault-Day (ZeroHedge, July 22, 2014)


Argentina Defaults (ZeroHedge, July 30, 2014):

It’s all over but the crying: having explained Argentina’s position (i.e. not giving to so-called vulture funds), Economy Minister Kicilloff explains:

  • *KICILLOF SAYS HEDGE FUNDS NOT WILLING TO GIVE DELAY ON RULING
  • *KICILLOF SAYS HARD TO BELIEVE ARGENTINA IN DEFAULT IF HAS FUNDS
  • *KICILLOF SAYS ARGENTINA CAN’T COMPLY WITH COURT RULING
  • *HOLDOUTS DIDN’T ACCEPT ARGENTINE OFFER: KICILLOF

As Bloomberg notes, by defaulting today, Argentina may trigger bondholder claims of as much as $29 billion — equal to all its foreign-currency reserves. Just remember that the last 2 days have seen ‘smart money’ buy Argentine bonds and stocks to all-time record highs.

Read moreArgentina Defaults

‘US Will Feel Tangible Losses,’ Russia Prepares To Unleash Retaliatory Trade Wars

Vladimir Putin

“US Will Feel Tangible Losses,” Russia Prepares To Unleash Retaliatory Trade Wars (ZeroHedge, July 30, 2014):

It’s a troubling continuation/expansion of trade as a geopolitical tool,” warns one Washington-based consulting firm as Russia prepares to unleash retaliatory actions to US and European sanctions. As Bloomberg reports, Russia said yesterday it may ban imports of chicken from the U.S. and fruit from Europe and is investigating McDonald’s cheese for safety. In addition, a Russian lawmaker has drafted legislation that might result in U.S. accounting firms being barred from doing business in his country. All of this is odd given Jack “trust me” Lew’s reassurance that Russian sanctions would have no impact on the US economy. Russia’s response, US will feel ‘tangible losses’ from ‘destructive, myopic’ sanctions.

As Bloomberg reports, while Russia and the U.S. have long sparred over agricultural trade, the actions fueled speculation they could be retaliatory.

Russia’s food safety agency said it may ban imports of U.S. poultry and some European fruit due to contamination of the products, according Bloomberg BNA, citing Russian state media. The food safety agency, known as Rosselkhoznadzor, also said it will examine suppliers of McDonald’s cheese for their use of antibiotics.

Russia was the second-largest market, after Mexico, for U.S. chicken last year, according to the USA Poultry & Egg Export Council. The U.S. exported about $309 million worth of broiler chickens to Russia last year, according to the council.

Read more‘US Will Feel Tangible Losses,’ Russia Prepares To Unleash Retaliatory Trade Wars

GDP Deja Vu Stunner: Over Half Of US Growth In The Past Year Is From Inventory Accumulation

GDP Deja Vu Stunner: Over Half Of US Growth In The Past Year Is From Inventory Accumulation (ZeroHedge, July 30, 2014):

Back in December 2013, when everyone was expecting a 3% GDP print for Q1, we did a simple analysis concluding that “Inventory Hoarding Accounts For Nearly 60% Of GDP Increase In Past Year.” We stated that this “hollow growth”, which is merely producers pulling demand from the future courtesy of cheap credit and assuming the inventory will be sold off in ordinary course of business without bottom-line slamming liquidations or dumping, and which further assumes a healthy US consumer and global economy, is a flashing red flag for the future of US economic growth. In fact, we were one of the very few who warned that Q1 GDP would be a disaster: “The problem with inventory hoarding, however, is that at some point it will have to be “unhoarded.” Which is why expect many downward revisions to future GDP as this inventory overhang has to be destocked.

This is precisely what happened in Q1, however it was blamed on the “harsh weather.”

Read moreGDP Deja Vu Stunner: Over Half Of US Growth In The Past Year Is From Inventory Accumulation

Top Financial Experts Say World War 3 Is Coming … Unless We Stop It

Related info:

The Shocking Reason Putin Isn’t Worried About The $50 Billion Yukos Ruling:

“There is a war coming in Europe,” he said. “Do you really think this matters?”


Top Financial Experts Say World War 3 Is Coming … Unless We Stop It (Washington’s Blog, July 30, 2014):

Nouriel Roubini, Kyle Bass, Hugo Salinas Price, Charles Nenner, James Dines, Jim Rogers, David Stockman, Marc Faber, Jim Rickards, Paul Craig Roberts, Martin Armstrong, Larry Edelson, Gerald Celente and Others Warn of Wider War

Paul Craig Roberts – former Assistant Secretary of the Treasury under President Reagan, former editor of the Wall Street Journal, listed by Who’s Who in America as one of the 1,000 most influential political thinkers in the world, PhD economist – wrote an article yesterday about the build up of hostilities between the U.S. and Russia titled, simply: “War Is Coming”.  In the article, Roberts notes:

Read moreTop Financial Experts Say World War 3 Is Coming … Unless We Stop It

21 Ways To End The Phrase ‘Americans Are So Broke …’

change-obama

21 Ways To End The Phrase ‘Americans Are So Broke…’ (Economic Collapse, July 29, 2014):

Did you know that 77 million Americans have unpaid debts that are “in collections” and that Congress is actually thinking about letting post offices offer payday loans?  We live in a country where almost everyone is drowning in debt and where most people are either flat broke or very close to flat broke.  Years ago, “your Mama is so broke” jokes were all the rage, and at the rate we are going they could make a big comeback.  Some of my favorites were “your Mama is so broke she went to McDonald’s and put a milkshake on layaway” and “your Mama is so broke your family ate cereal with a fork to save milk”.  Unfortunately, the facts that I am about to share with you are not funny at all.  In fact, they are quite sobering.  Yes, things are going fairly well for the elitists that live in the good areas of New York City, Washington D.C. and San Francisco right now, but most of the country is deeply struggling as our economic fundamentals continue to crumble.  Please share these numbers with as many people as you can, because we need people to understand that there has not been an “economic recovery” for most of America.  In fact, in many ways things just continue to get even worse.

The following are 21 ways to end the phrase “Americans are so broke”:

Read more21 Ways To End The Phrase ‘Americans Are So Broke …’

French Housing ‘In Total Meltdown’, ‘Current Figures Are Disastrous’

hollande113

French Housing “In Total Meltdown”, “Current Figures Are Disastrous” (ZeroHedge, July 30, 2014):

If Venezuela is the case study of a country in the late stages of transition into a socialist utopia, then France is the clear runner up. The most recent case in point, aside from the already sliding French economy, whose recent contraction can be best seen be deteriorating PMI data…

France vs Europe PMI

… which hints at the dreaded “triple dip” recession, nowhere is the economic collapse in France more evident than in its housing market which as even Bloomberg admits, citing industry participants, is now “in total meltdown.

The reason? The belief of the socialist president that a few economists know better than the overall market, especially when the sanctity of the “fairness doctrine” and the greater good is to be upheld at all costs. To wit: “French President Francois Hollande’s government may have made a housing slump worse, pushing the construction market to its lowest in more than 15 years. Housing starts fell 19 percent in the second quarter from a year earlier, and permits — a gauge of future construction — dropped 13 percent, the French Housing Ministry said yesterday.

Read moreFrench Housing ‘In Total Meltdown’, ‘Current Figures Are Disastrous’

China Meat Scandal Spreads: McDonald’s Japan Slashes Guidance

MCD

China Meat Scandal Spreads: McDonald’s Japan Slashes Guidance (ZeroHedge, July 29, 2014):

We warned last week that the scandal over Chinese meat supplier OSI was spreading (and Asians were increasingly shunning western fast-food restaurants) and now, as The FT reports, McDonald’s Japan has pulled its full-year profit guidance on the back of falling sales. It had previously forecast sales of $2.45bn for the year to December but warned it could not commit to new targets as it was too soon to estimate the scandal’s full impact.

As The FT reports, OSI processes the meat of 300m chickens a year in China, as well as other meats, vegetables and pre-assembled food such as sandwiches or wraps.

This is a problem for McDonalds as some of its 3,200 restaurants were forced to scratch chicken nuggets off the menu

Read moreChina Meat Scandal Spreads: McDonald’s Japan Slashes Guidance

Ron Paul: Stocks Are In A Bubble And Will Crash

Ron Paul: Stocks are in a bubble and will crash (CNBC, July 29, 2014):

Ron Paul, the former U.S. representative from Texas and perhaps America’s most popular libertarian voice, has long said that the nation’s monetary and fiscal policies would result in massive inflation. According to the common measures of inflation, this has not yet occurred. But Paul maintains that the inflation he has warned of has indeed come to fruition in asset prices, and that once it unravels, a market crash will ensue.

Read moreRon Paul: Stocks Are In A Bubble And Will Crash

EU Announces New Washington-Pleasing, Russia-Wristslap Sanctions

xi-jinping-vladimir-putin

EU Announces New Washington-Pleasing, Russia-Wristslap Sanctions (ZeroHedge, July 29, 2014):

After unleashing a 10-page report of the death and destructive economic impact they could have on Russia via sanctions, the European leaders have agreed to issue travel bans, some asset-freezes, and trade curbs on various new individuals and business entities. The Goldilocks sanctions… just enough to please Washington, not enough to infuriate Putin into ‘boomerangs’.

  • *EU AMBASSADORS’ MEETING ON RUSSIA SANCTIONS REACHES DEAL: FT

Via DPA,

EU ambassadors have reached agreement on a new round of travel bans and asset freezes in response to the crisis in Ukraine, diplomats say.

*  *  *

The sanctions…

Read moreEU Announces New Washington-Pleasing, Russia-Wristslap Sanctions

Banco Espirito Santo Plunges: Shareholder Meeting Cancelled Due To “UNEXPECTED FACTS”

–  Banco Espirito Santo Plunges: Shareholder Meeting Cancelled Due To “Unexpected Facts” (ZeroHedge, July 29, 2014):

With all other operating holdcos having already declared bankruptcy, the anxiety over Banco Espirito Santo is growing (despite DE Shaw and Goldman Sachs recommending investors buy the shares). Despite Bank of Portugal reassurance last night that “BES is able to raise capital), the stock is plunging on news of “unexpected facts” this morning…

  • *BANCO ESPIRITO SANTO SAYS SHAREHOLDER MEETING WAS CANCELLED DUE TO “UNEXPECTED FACTS”
  • *BANCO ESPIRITO SANTO FALLS MORE THAN 13% IN LISBON TRADING

Remember, this is systemic (as the Portugues President has warned), and the contagion is potentially global… not “contained.”

Read moreBanco Espirito Santo Plunges: Shareholder Meeting Cancelled Due To “UNEXPECTED FACTS”