Economy

How Many Shale Oil Plays Make Money At $37 Per Barrel? (Spoiler Alert: None)

by

– How Many Shale Oil Plays Make Money At $37 Per Barrel? (Spoiler Alert: None) (The Burning Platform, March 18, 2015):

I’m tossing you a softball. Now think carefully. The choices are:

A. Zero

B. Zero

C. Zero

D. Zero

I know Americans are math challenged and need a calculator to subtract 10 from 20, but I think even a CNBC bimbo or Princeton economic professor could get this one right.

Last year there was much banter from the Wall Street shysters and Bakkan shale oil experts about the true breakeven price for shale oil not being $80 (which is the truth) but actually being as low as $58 a barrel. They were spreading this lie in order to keep idiot investors buying the stocks and bonds of these fly by night shale oil companies.

bakkan-shale-oil

Read moreHow Many Shale Oil Plays Make Money At $37 Per Barrel? (Spoiler Alert: None)

Bank Of Japan’s Plunge Protection Desperation: “May Buy Individual Stocks”

by

kuroda_0

– Bank Of Japan’s Plunge Protection Desperation: “May Buy Individual Stocks” (ZeroHedge, March 19, 2015):

Earlier this month, the BoJ surveyed 40 dealers and discovered something shocking: buying the entirety of JGB gross issuance has had a rather dramatic effect on liquidity. In fact, two thirds of the firms who participated reported having “some or a lot” of problems and described bid-asks as “not very tight.” Today, an internal report from the central bank indicates officials are slowly coming to accept the fact that their actions have consequences although as you can see from the following, the fact that the BoJ is literally buying all of the bonds is still low on the list of factors the central bank figures might be negatively affecting liquidity…

Via Bloomberg: 

Read moreBank Of Japan’s Plunge Protection Desperation: “May Buy Individual Stocks”

The Unraveling Is Gathering Speed

by

the-unraveling

– The Unraveling Is Gathering Speed (OfTwoMinds, March 18, 2015):

Debt saturation and debt fatigue = diminishing returns on central bank tricks.

Does anyone else have the feeling that things are not just unraveling, but that the unraveling is gathering speed?
Though quantifying this perception is more interpretative than statistical, I think we can look at the ongoing debt crisis in Greece as an example of this acceleration of events.

Read moreThe Unraveling Is Gathering Speed

The Tower Of EVIL

by

ecb-frankfurt

– The tower of EVIL (The Ugly Truth, March 18, 2015):

Esteemed reader Kittie Kittie mentioned that today the ECB opened its new headquarters in Frankfurt (seen above). Lots of Jews showed up at the opening ceremony, including Salomon Korn, Head of the Jewish Community Frankfurt.

I discussed the following matter in the “Truth About Money” series, but I wish to do it again here, in simpler terms.

If you can understand the following items, then you will understand more about euro-zone economics than do most “experts.” Instead of your eyes glazing over when you read some financial commentary, you will see through the lies, and declare “bullshit!”

Please ask questions if the material is not clear, or is poorly worded.

The Tower of Evil in Frankfurt is the headquarters of the euro scam, which works like this…

Read moreThe Tower Of EVIL

After Pillaging Pensions, Greece Raids Utilities To Repay Troika; Bonds Plunge As Bank Run Accelerates

by

Varoufakis-austerity-editionLagarde-Varoufakisscrewed

Related info:

– ECB Prepares For Grexit, Anticipates 95% Loss On Greek Debt

– After Pillaging Pensions, Greece Raids Utilities To Repay Troika; Bonds Plunge As Bank Run Accelerates (ZeroHedge, March 19, 2015):

Following yesterday’s news that the ECB is now running simulations on what a Grexit would mean for Greek bond prices (spoiler alert:
“fundamentals” suggest a 95% loss), overnight we got more confirmation that Mario Draghi continues to tighten the screws on the Greek sovereign corpse, when Bloomberg reported that the ECB once again raised the maximum amount of emergency liquidity available to Greek lenders by €400 million, but less than the Greek central bank requested, people familiar with the decision said.

Read moreAfter Pillaging Pensions, Greece Raids Utilities To Repay Troika; Bonds Plunge As Bank Run Accelerates

Here Is Why The Fed Can’t Hike Rates By Even 0.25%

by

– Here Is Why The Fed Can’t Hike Rates By Even 0.25% (ZeroHedge, March 18, 2015):

There was a time when Zoltan Poszar was the most important person at the Fed (and Treasury), because he was likely the only person in the government’s employ who grasped the enormity and complexity of the then-$30 or so trillion US shadow banking system. A quick refresh of his bio from the Institute for New Economic Thinking:

Mr. Pozsar has been deeply involved in the response to the global financial crisis and the ensuing policy debate. He joined the Federal Reserve Bank of New York in August 2008 in charge of market intelligence for securitized credit markets and served as point person on market developments for senior Federal Reserve, U.S. Treasury and White House officials throughout the crisis; played an instrumental role in building the TALF to backstop the ABS market; and pioneered the mapping of the shadow banking system which inspired the FSB’s effort to monitor and regulate shadow banking globally. Prior to Credit Suisse, Mr. Pozsar was a senior adviser to the U.S. Department of the Treasury, where he advised the Office of Debt Management and the Office of Financial Research, and served as Treasury’s liaison to the FSB on matters of financial innovation. He also worked with the Federal Reserve Board on improving the U.S. Flow of Funds Accounts.

Read moreHere Is Why The Fed Can’t Hike Rates By Even 0.25%

“Surprise”: Tech Company Valuations Are Completely Made Up

by

SnapChat

– Surprise: Tech Company Valuations Are Completely Made Up (ZeroHedge, March 18, 2015):

Talk of a massive bubble in the red hot world of private tech companies is getting louder of late. As we noted last week, Prem Watsa recently highlighted what he called excessive “speculation” in tech stocks and predicted that at the end of the day, habitually slapping billion-dollar valuations on unproven companies that often have little more than an app and a dream will end “very badly.” This comes on the heels of Mark Cuban’s warning that stretched valuations in private tech companies are far more dangerous than any perceived Nasdaq bubble 2.0, as at least with overvalued publicly traded firms there’s liquidity.

Well, now that everyone is jumping on the “there’s no way that app is worth $50 billion” bandwagon, Bloomberg is out with a startling revelation: “Snapchat, the photo-messaging app raising cash at a $15 billion valuation, probably isn’t actually worth more than Clorox.” 

No, probably not, but it sure is more fun than doing laundry, which is why it absolutely makes sense that the number VCs are putting on the app makes absolutely no sense.

Here’s Bloomberg:

Read more“Surprise”: Tech Company Valuations Are Completely Made Up

Crash Landing: China Home Prices Plunge At Fastest Pace On Record, Surpass Post-Lehman Collapse

by

– Crash Landing: China Home Prices Plunge At Fastest Pace On Record, Surpass Post-Lehman Collapse (ZeroHedge, March 18, 2015):

Less than three weeks ago, when the PBOC proceeded with its latest “surprise” rate cut, we showed a chart that should scare everyone who is hoping that China will avoid a hard-landing would prefer would never have been revealed: the annual collapse in Chinese home prices is now so sharp and so widespread, that it has surpassed the housing collapse in the aftermath of the Lehman collapse.” Overnight things went from bad to worse, when China’s National Bureau of Statistics reported that contrary to hopes for a modest rebound, China’s average new home prices fell at the fastest pace on record in February from a year earlier.

 …

Sweden Slides Further Into NIRP: Cuts To -0.25%; Expands QE

by

– Sweden Slides Further Into NIRP: Cuts To -0.25%; Expands QE

Ahead of The Fed’s ‘impatience’ today, and amid a tumbling EUR, the oldest central bank in the world has decided it is time to go further into the illustrious ranks of NIRP/QE’ers:

*RIKSBANK CUTS KEY RATE TO -0.25%, TO BUY GOVT BONDS FOR SK30 BLN

So as opposed to Denamrk’s roundabout QE, Sweden just jumps in and monetizes that debt direct by expanding their QE program and shifts from small NIRP to bigger NIRP. All this while suggesting the labor market is strengthening and inflation has bottomed out. The reaction – SEK is plunging and OMX surges.

 …

Violent Clashes Break Out Next To New ECB Headquarters In Frankfurt As Thousands Protest Austerity: Live Webcast

by

A clip of the police using water cannon on protesters and some of the highlights of today’s protest so far:

Live webcast from Frankfurt down below.

– Violent Clashes Break Out Next To New ECB Headquarters In Frankfurt As Thousands Protest Austerity: Live Webcast (ZeroHedge, March 18, 2015):

It’s not just Greece which is protesting the utter lack of reforms enabled by the ECB known as “austerity” – as of today so is Germany itself with the so-called #Blockupy movement. According to local media reports, the start of anti-austerity rallies in Frankfurt coincided with the European Central Bank opening its new headquarters, whose occupants are now besieged by tens of thousands of protesters, so perhaps #OccupyQ€ would have been more appropriate. Police said they expect around 10,000 anti-capitalist protesters, marching under the banner of leftist alliance Blockupy, to attend the rally, with a march through the city planned for later in the evening. The result is what according to a police spokesman “is one of the biggest deployments ever in the city.”

As the photos below shows, several police cars have been set on fire, with windows being smashed and demonstrators throwing stones at police ahead of the massive demonstration on Wednesday, and as riots break out across Frankfurt even as thousands of police respond with water cannon, pepper spray and mass arrests.

It’s Happening – More US Allies Join The Anti-Dollar Alliance

by

Anti-Dollar-Alliance

– It’s Happening – More US Allies Join The Anti-Dollar Alliance (Sovereign Man, March 18, 2015):

The United States government just went from “Please, baby, don’t leave me,” to frustrated threats and whining.

After the UK announced it will join new China-led Asian Infrastructure Investment Bank (AIIB) as a founding member late last week, Germany, France and Italy decided yesterday to follow Britain’s lead and join as well.

Welcome to the beginning of the end of the US dollar’s domination. It’s happening.

For the past few decades America was the undisputed global economic and political superpower.

The entire world happily used the US dollar, and hence, the US banking system. More importantly, the world happily placed its trust in the US government.

But there’s a limit to how irresponsible, reckless, and threatening you can be. Eventually such behavior catches up to you.

That time has now come.

Read moreIt’s Happening – More US Allies Join The Anti-Dollar Alliance

Fed Growth Cut Unleashes Panic Buying Of Everything; Dollar Plunges Most Since 2009

by

20150319_EOD

– Fed Growth Cut Unleashes Panic Buying Of Everything; Dollar Plunges Most Since 2009 (ZeroHedge, March 18, 2015):

Oil spiked 6% because “The Fed said the economy is slowing”; Stocks are up because “The Fed said the economy is slowing”; USD strength is a signal of the strength of the US economy which “The Fed said is now slowing”; Small Caps hit Record Highs because “The Fed said the economy is slowing”; and Nasdaq Tops 5,000 because “The Fed said the economy is slowing” – really only one thing for it…

…

Options Market Signals 2007-Like Crash Risk, Goldman Warns

by

GS1

– Options Market Signals 2007-Like Crash Risk, Goldman Warns (ZeroHedge, March 17, 2015):

Although US equity prices have demonstrated a remarkable propensity to completely disregard apparently unimportant things like macro fundamentals, forward earnings estimates, and top-line growth projections, we’ve long argued that eventually, reality will come calling and the farther stretched valuations become in the meantime, the more painful the correction will be. As we noted on Sunday, the cracks are starting to form as DB became the first sell-side firm to predict that EPS will in fact not grow in 2015, prompting us to remark that “EPS growth in 2015 [is] now a wash (if not negative), which implies the only upside for the S&P 500 will once again come from substantial multiple expansion.” Against this backdrop of declining revenues, declining earnings, and pitiable economic projections (thanks a lot Atlanta Fed Nowcast), we bring you yet another sign that a “correction” may indeed be in the cards: an epic decoupling of put prices and S&P P/E ratios. 

Here’s Goldman: 

Read moreOptions Market Signals 2007-Like Crash Risk, Goldman Warns

Moscow Launches Ruble-Renminbi Futures To ‘Facilitate Trade Between China And Russia’

by

xi-jinping-vladimir-putin

– Moscow Launches Ruble-Renminbi Futures To “Facilitate Trade Between China And Russia” (ZeroHedge, March 17, 2015):

While the west huffs and puffs, and threatens to unleash even more “costs” on Russia in the form of additional sanctions which will assure that Europe’s latest deflationary recession is even more acute, an “isolated” Russia is looking to outside, and to the east, and as part of its most recent de-dollarization initiative, the Moscow Exchange announced it has started trading Chinese Renminbi-Russian Ruble currency futures.

From the press release:

From 17 March the Moscow Exchange has started trading in a futures contract on the currency pair Chinese Renminbi — Russian rouble

Read moreMoscow Launches Ruble-Renminbi Futures To ‘Facilitate Trade Between China And Russia’

America’s European “Allies” Desert Obama, Join China-led Infrastructure Bank

by

China-USA

–  America’s European “Allies” Desert Obama, Join China-led Infrastructure Bank (ZeroHedge, March 17, 2015):

It appears the sea of de-dollarization has reached the shores of Europe. With Australia and UK having already moved in the direction of joining the China-led AIIB, The FT reports that France, Germany, and Italy have now all agreed to join the development bank as ‘pivot to Asia’ appears to be Plan B for Europe. As Greg Sheridan previously noted, “the saga of the China Bank is almost a textbook case of the failure of Obama’s foreign policy,” but as The FT concludes, the European decisions represent a significant setback for the Obama administration, which has argued that western countries could have more influence over the workings of the new bank if they stayed together on the outside. As Forbes notes, this leaves Obama with 3 uncomfortable options…

As The FT reports,

France, Germany and Italy have all agreed to follow Britain’s lead and join a China-led international development bank, according to European officials, delivering a blow to US efforts to keep leading western countries out of the new institution.

Read moreAmerica’s European “Allies” Desert Obama, Join China-led Infrastructure Bank

Maserati Sales Tumble 43%

by

Maserati-The-Bell-Rings-for-Maserati-on-Wall-Street-2002
In 2002 (Source)

– Maserati Sales Tumble 43% (ZeroHedge, March 17, 2015):

Just blame it on the weather, because everyone knows no self-respecting 1%-er would be caught dead driving (or being driven) to their nearest Maserati dealership in their snow-ploughing $100K Range Rover, when it is snowing outside. In the middle of winter.

End result: only 481 Maseratis were sold in all of the US in February, a plunge of 43% from a year ago (following a 20% drop in January) back when it was the Polar Vortex’s fault that Q1 2014 GDP went from an initially forecasted 3.5%, to -2.5%.

But this time the snow is different.

Maserati Sales Tumble

Treasury Secretary Lew Admits US “International Credibility & Influence Is Being Threatened”

by

– Treasury Secretary Lew Admits US “International Credibility & Influence Is Being Threatened” (ZeroHedge, March 17, 2015):

While we try to our patriotic duty every day, Jack Lew’s comment that: U.S. ECONOMIC RECOVERY WELL ESTABLISHED, LEW SAYS was too much to bear… so we provide the following 3 charts for guidance in comprehending the propaganda. Why would he blatantly lie in the face of unequivocally bad data? Simple, they are desparate to spin US economic strength as the world comes to realize it no longer needs to rely on a unipolar US-based model…

…

“Colossal Defeat” For Obama As Australia Joins China’s Regional Bank

by

Australia-China

– “Colossal Defeat” For Obama As Australia Joins China’s Regional Bank (ZeroHedge, March 16, 2015):

Having attacked its “closest ally” UK for “constant accomodation” with China, we suspect President Obama will be greatly displeased at yet another close-ally’s decision to partner up with the Chinese-led Asian Infrastructure Investment Bank (AIIB). As The Australian reports, “make no mistake,” the decision by Australia’s Abbott government to sign on for negotiations to join China’s regional bank, foreshadowed by Tony Abbott at the weekend, “represents a colossal defeat for the Obama administration’s incompetent, distracted, ham-fisted dip­lomacy in Asia.”

As The Australian’s Greg Sheridan writes Op-Ed,

The decision by the Abbott government to sign on for negotiations to join China’s regional bank, foreshadowed by Tony Abbott at the weekend, represents another defeat for Barack Obama’s diplomacy in Asia.

Read more“Colossal Defeat” For Obama As Australia Joins China’s Regional Bank

US Economic Data Is Having Its Worst Year Since At Least 2000

by

– US Economic Data Is Having Its Worst Year Since At Least 2000 (ZeroHedge, March 16, 2015):

It’s getting old but the percentage of missed expectations in economic data is now over 90% since the start of February with three more added to the long list today. This has pushed Bloomberg’s US Macro Surprise index to its worst start to a year on record.

Not pretty…

20150317_Macro1

This is the worst start to the year since records began…

Read moreUS Economic Data Is Having Its Worst Year Since At Least 2000

The Best “Democracy” Money Can Buy: For Every Dollar Spent Influencing US Politics, Corporations Get $760 Back

by

“Washington lobbyists haven’t funded my campaign, they won’t run my White House, and they will not drown out the voices of working Americans when I am president”.
– Barack Obama

change-we-can-believe-in

– The Best “Democracy” Money Can Buy: For Every Dollar Spent Influencing US Politics, Corporations Get $760 Back

Between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 Billion on federal lobbying and campaign contributions. What they gave pales compared to what those same corporations got: $4.4 Trillion in federal business and support. Here is the visual representation of this stunning finding: for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government.

…

California Is Turning Back Into A Desert And There Are No Contingency Plans

by

Drought-Public-Domain

– California Is Turning Back Into A Desert And There Are No Contingency Plans (Economic Collapse, March 15, 2015):

Once upon a time, much of the state of California was a barren desert.  And now, thanks to the worst drought in modern American history, much of the state is turning back into one.  Scientists tell us that the 20th century was the wettest century that the state of California had seen in 1000 years.  But now weather patterns are reverting back to historical norms, and California is rapidly running out of water.  It is being reported that the state only has approximately a one year supply of water left in the reservoirs, and when the water is all gone there are no contingency plans.  Back in early 2014, California Governor Jerry Brown declared a drought emergency for the entire state, but since that time water usage has only dropped by 9 percent.  That is not nearly enough.  The state of California has been losing more than 12 million acre-feet of total water a year since 2011, and we are quickly heading toward an extremely painful water crisis unlike anything that any of us have ever seen before.

Read moreCalifornia Is Turning Back Into A Desert And There Are No Contingency Plans

Italian Bad Debt Hits Record $197 Billion As Bank Lending Contracts For Unprecedented 33 Consecutive Months

by

Italy

– Italian Bad Debt Hits Record $197 Billion As Bank Lending Contracts For Unprecedented 33 Consecutive Months (ZeroHedge, March 16, 2015):

Repeat after us: the biggest threat facing Europe’s banking system is not a Grexit, is not the Austrian “bad bank” black swan (although it is pretty bad), it is the trillions in non-performing loans on the balance sheets of European banks, which Europe has no idea how to and which continue to multiply in the process threatening to impair depositors with bail-ins (see Cyprus). It is also why, after years of debate, the ECB finally agreed to flood European banks with what it hopes will be over €1 trillion in excess reserves a la the US (of course, if Zero Hedge, and now JPM, is correct, the ECB will break the bond market long before it achieves its goal) in order to mitigate the relentless cash demands of a constantly rising NPLs.

And unfortunately for the third largest issuer of sovereign bonds in the world, Italy – the country all eyes will focus on once Greece and/or Spain exit the Eurozone – when it comes to NPLs things are going from bad to worse because as Reuters reported earlier, citing ABI, gross bad loans at Italian lenders continued to rise, totaling 185.5 billion euros ($196.5 billion) in January from 183.7 billion euros a month earlier.

As the chart below shows, Italy now has over 10% of its  GDP in the form of bad debt.

italy-bad-debt-gdp

Read moreItalian Bad Debt Hits Record $197 Billion As Bank Lending Contracts For Unprecedented 33 Consecutive Months

Irish Finance Minister Michael Noonan Dumps Stocks, … Buys Gold

by

Irish Finance Minister Dumps Stocks - Buys Gold

– Irish Finance Minister Dumps Stocks – Buys Gold (ZeroHedge, March 16, 2015):

– Ireland’s Minister of Finance shifted personal wealth out of stocks and into gold
– Minister invested in SPDR Gold Shares ETF, Portuguese government bonds and other ETFs
– Maintained holdings in bank and agricultural commodities ETFs
– Gold ETF not a safe haven asset – much unappreciated counterparty risk

The Minister for Finance in Ireland, Michael Noonan, sold his shares in funds that track European and US stocks and diversified his portfolio including allocating some of his personal wealth into a gold exchange traded fund (ETF) in 2014.

Read moreIrish Finance Minister Michael Noonan Dumps Stocks, … Buys Gold

Meet The Relentless, Mystery Buyer Of Chinese Stocks Even As China’s Economy Grinds To A Crawl

by

– Meet The Relentless, Mystery Buyer Of Chinese Stocks Even As China’s Economy Grinds To A Crawl (ZeroHedge, March 16, 2015):

Unlike the late summer and early fall of 2014, when the rise in the Chinese stock market could be attributed to the PBOC’s PSL “QE Lite”, the relentless buying leg that started in mid-November has stunned most people, as nobody has been able to figure out just who is responsible for all this buying. Until now. According to Reuters, it is precisely China’s trust firms, with total assets of $2.2 trillion, and who together with Banker Acceptances comrpise the bulk of China’s shadow banking pipeline, are shifting more cash into frothy capital markets and over-the-counter (OTC) instruments instead of loans. In other words, instead of using their vast cash hoard of over $2 trillion to re-lend and stimulate China’s economy, China’s unregulated, shadow banking conduits are now directly buying stocks!

…