What is truth?

Posts tagged ‘Reuters’

Elite View: The Yo-Yo Economy

Euro zone rot spreads to Germany, China mending … The euro zone’s biggest member Germany is being sucked into the bloc’s worsening economic quagmire, business surveys suggested on Wednesday, as similar data signalled the slowdown in China may be abating. The slump that began in Greece and spread to other smaller euro zone economies was clearly gripping the core in October, marking the worst month for the 17-member bloc since it emerged from recession more than three years ago. – Reuters

Dominant Social Theme: Things go up and down.

Free-Market Analysis: There are problems with Germany but the good news regarding China brings us back to emotional parity.

This seems to be the gist, the dominant social theme of this Reuters article. We’re supposed to be depressed about Germany but excited about China.

The idea the Reuters article (above) is advancing is that the world is involved with a number of different economic trends. We are given to believe from such reporting that there is no specific direction, and thus no extensive conclusions to make.

This is surely a kind of power elite meme. Reuters, a mainstream media conglomerate is eager to provide us with a serial comprehension of economics rather than a holistic one. Here’s some more from the article:

Markit’s Composite Purchasing Managers’ Index (PMI), which polls around 5,000 businesses across the 17-nation ………………………….

full article at source: http://www.thedailybell.com/28198/Elite-View-The-Yo-Yo-Economy

Let Central Banking Lose Its Franchise, Not Its Independence

At Jackson Hole, a growing fear for Fed independence … Increasing political encroachment on the Federal Reserve, particularly from the Republican Party, could threaten the central bank‘s hard-won independence and undermine confidence in the nearly 100-year old institution. That was the pervasive sentiment among economists gathered at the Fed’s annual monetary policy symposium in Jackson Hole, Wyoming. – Reuters

Dominant Social Theme: If we don’t have a central bank, what have we got?

Free-Market Analysis: Here at the Daily Bell, we have simple questions that we ask regularly about central banking: How much money is enough, and how do central bankers know it?

The answer is that central bankers DON’T know how much money is too much. Only the market can inform us of the volume and value of money.

The market can do this two ways: via the pricing of gold and silver and the pricing of competitive currencies.

These two money facilities, probably initiated together, can provide us with the market signals to let us know how much money needs to be in circulation.

The system we have now is one of monopoly fiat tender. Taxes are paid in monopoly paper money and gold and silver are not minted by the government and therefore are hard to place in circulation.

The system is stacked toward the use of paper ticker money printed

full article at source: http://www.thedailybell.com/4242/Let-Central-Banking-Lose-Its-Franchise-Not-Its-Independence

U.S. Bond Market, The Greatest Hoax Ever Perpetrated on Mankind

By: Rob_Kirby

A few years ago, when J.P. Morgan grew their derivatives  book by 12  Trillion in one quarter[Q3/07] – I did some  back of the napkin math – and figured out how many 5 and 10 year bonds the  Morgue would have necessarily had to transact on their swaps alone – if they  are hedged.  The bonds required to hedge the growth in Morgan’s Swap book were 1.4 billion more in one day than what was mathematically available to the entire domestic bond market for a whole quarter?

Put simply, interest  rate swaps create more settlement demand for bonds than the U.S. issues.

This is why U.S.  bonds “appear” to be “scarce” – which the bought-and-paid-for mainstream  financial press explains to us is “a flight to quality”.  Better stated, it’s a “FORCED FLIGHT [or  sleight, perhaps?] TO FRAUD”.

Assertions that netting “explains” this incongruity are a NON-STARTER.   Netting generally occurs at day’s end – the math simply does not even  work intra-day.

Further  Evidence of Gross Malfeasance in the U.S. Bond Market

Back in 2008, at the height of the financial  crisis, folks are reminded how the Fed and U.S. Treasury were unsuccessful in  finding a financial institution to either acquire or merge with Morgan Stanley.  Unfortunately, Morgan Stanley’s financial  condition has continued to deteriorate:

Analysis: How Morgan Stanley sank to junk pricing

REUTERS | June 1, 2012 at 5:45 pm |

(Reuters) – The bond markets are treating Morgan Stanley like a  junk-rated company, and the investment bank’s higher borrowing costs could  already be putting it at a disadvantage even before an expected ratings  downgrade this month.

Bond rating agency Moody’s Investors Service has said it may cut  Morgan Stanley by at least two notches in June, to just two or three steps  above junk status. Many investors see such a cut as all but certain

full article at source: http://www.marketoracle.co.uk/Article35164.html

Treasuries and Derivatives Blow Up? So Where Do You Go …

By Anthony Wile (Daily Bell)

Here’s some interesting news along the lines of “man bites dog.” According to a recent Reuters article, US financial advisors are actually growing leery of US Treasury bonds.

This is almost unheard of and one could certainly make a case that it is a sign of most unsettled times. Ordinarily, financial advisors, especially those in the US, are disposed to provide Treasuries for most every ill.

They are seen as repositories of value, security and liquidity – and this perspective has been preached relentlessly to the average US consumer.  And yet now we now find a much different perspective, being reported by Reuters:

It’s the newest market riddle: where do you go for safety when the traditional option could be in a bubble?

With fiscal problems in Europe once again leading to sharp drops in global stock markets, many investors are seeking out stable assets that can both protect their principal and generate an income stream to keep up with inflation.

full article at source: http://www.thedailybell.com/3883/Anthony-Wile-Treasuries-and-Derivatives-Blow-Up-So-Where-Do-You-Go

Spain’s Collapse is No Little Thing

A logo of the Standard & Poor's AA- rating

A logo of the Standard & Poor's AA- rating (Photo credit: Wikipedia)

By the Daily Bell

S&P cuts Spain’s credit rating by two notches to BBB+ … Standard & Poor’s cut Spain’s sovereign debt rating Thursday by two notches, warning that the government’s budget situation is worsening and that is likely to have to prop up its banks. S&P cut the country’s rating to BBB-plus and added a negative outlook, saying it expected the Spanish economy to shrink both this year and next, raising more challenges for the government. Esther Barranco, a spokeswoman for the Economy Ministry, told Reuters: “They haven’t taken into consideration the reforms put forward by the Spanish government, which will have a strong impact on Spain’s economic situation.” S&P also said that eurozone-wide polices were failing to boost confidence and stabilize capital flows, and that the region needed to find ways to directly support banks so that governments were not forced to take on those burdens themselves.” – UK Telegraph

full article at source: http://www.thedailybell.com/3838/Spains-Collapse-is-No-Little-Thing

Comment:

The dictates from Berlin regarding the Austerity measures are causing enormous hardship on people and it is also strangling any attempt by the same people to conduct business. The cost base is out of whack with local economies .We are forced to use an overpriced currency. Anywhere else in the world if you take on austerity you also devalue your currency .This has the effect of bringing down the cost of creating employment for foreign companies and with this advantage in time you offset the effects of the austerity by supplying new employment opportunities and thus create demand in the domestic economy .We have now gone through four years of severe austerity in Ireland and things are only getting worse. Austerity alone is not working !

There is no demand in the local economy, fear has taken hold and people are holding on to every penny they have for fear of getting their P45 someday. There are no realistic job opportunities for people in their 40, and without any massive investment by the government in up-skilling or re-education, things are looking bleak to say the least .We need massive investment in people and not in Banks. The faceless moneymen are now controlling the corridors of power in Brussels and democracy is losing ground.

In Ireland we are under the power of puppets that have no say in the running of our country. Even the latest text in the referendum we are about to vote on has had no Irish political input it was dictated from the ministry of finance in Berlin. The sham of going to the polls and been told we are an independent nation is an insult to the dead of 1916 who fought for an independent republic. The spineless politicians in government are nothing more than collaborators for the new masters of Europe in Berlin,

They deserve to be hounded out of office and jailed for their treachery!

 

Creating More Debt to Solve the Crisis

By Bill Bonner

Readers who expect an early end to this Great Correction are going to be  disappointed. There is no sign of it reaching its conclusion anytime soon. Just  the contrary…there’s no end in sight.

The Great Correction seems to be going along just as you’d expect. Or, just  as we’d expect.

Here’s the latest from Reuters:

Home prices fell more steeply than expected in  November, and consumers turned less optimistic in January, highlighting the  hurdles still facing the bumpy economic recovery.

The S&P/Case-Shiller composite index of  single-family home prices in 20 metropolitan areas, released on Tuesday,  declined 0.7 percent on a seasonally adjusted basis, a bigger drop than the 0.5  percent economists expected.

Read more: Creating More Debt to Solve the Crisis http://dailyreckoning.com/creating-more-debt-to-solve-the-crisis/#ixzz1lDtdDvZo

Europe plots deep Greek writedown

A draft statement from an emergency euro zone summit on  Wednesday, obtained by Reuters, outlined two options to leverage the 440 billion  euro ($600 billion) fund designed to shore up heavily indebted states and thwart  market attacks.If the draft is adopted with little change, the second summit in four days  will have sketched broad intentions but failed to produce a detailed master plan  to scale up the fund, recapitalize banks and reduce Greek debt to a sustainable level.

full article at source:http://www.reuters.com/article/2011/10/26/us-eurozone-idUSTRE79I0IC20111026

Wider consequences of Japanese’s radiation fallout to be expected?

 By Chisa Fujioka

TOKYO | Fri Jun 17, 2011 4:12pm IST

TOKYO (Reuters) – The operator of Japan’s crisis-hit nuclear power plant said it would start an operation to clean up radioactive water later on Friday, after several glitches that delayed the plan.

Unless the clean-up begins, large and growing pools of radioactive water could spill into the sea within a week, officials said.

Tokyo Electric Power Co, known as Tepco, has pumped massive amounts of water to cool three reactors at the Fukushima Daiichi plant that went into meltdown after a March 11 earthquake and tsunami disabled cooling systems.

But managing the radioactive water has become a major headache as the plant runs out of places to keep it. Around 110,000 tonnes of highly radioactive water — enough to fill 40 Olympic-size swimming pools — is stored at the plant.

Tepco, with help from French nuclear group Areva, U.S. firm Kurion and other companies, has been test-running a system in which radioactive water is decontaminated and re-used to cool the reactors.

Recent earthquakes in the UK Earthquakes in and around the British Isles in the last 30 days
(source http://www.earthquakes.bgs.ac.uk/)

 

 

I continue to monitor the east coast radiation levels as you see from the above chart the UK continues to have regular mini earthquakes measuring anywhere from magnitude 1.5 ,2.5.and even 3.5 this kind of movement can cause underground pipes to burst and radioactive material can be released into the Irish sea .This has happened before  see

http: //www.bellona.org/english_import_area/energy/renewable/38200

Latest readings carried out at Wicklow harbour resulted is slightly above normal readings (Last Wednesday)

China Demands American Austerity

Thursday, June 09, 2011 –
by Staff Report

 

China warns U.S. debt-default idea is “playing with fire … Republican lawmakers are “playing with fire” by contemplating even a brief debt default as a means to force deeper government spending cuts, an adviser to China’s central bank said on Wednesday. The idea of a technical default – essentially delaying interest payments for a few days – has gained backing from a growing number of mainstream Republicans who see it as a price worth paying if it forces the White House to slash spending, Reuters reported on Tuesday. But any form of default could destabilize the global economy and sour already tense relations with big U.S. creditors such as China, government officials and investors warn. – Reuters

Dominant Social Theme: Don’t even try it. Don’t even go there. You owe us the interest and … you … will … pay!

Free-Market Analysis: We tend to go back and forth regarding the world’s larger financial fix. We have arrived at the idea, eventually that the Anglo-American power elite responsible for the mess wants to push Western citizens as far as possible without setting up full-scale revolutions. The idea is simply to afflict Western Middle Classes with such misery that they will not notice when their countries’ sovereignty is removed in favor of a One World Order.

The best way to do this is to keep people distracted and miserable – hovering on the edge of foreclosure, food insecurity and professional oblivion. In Europe this has been accomplished by ensuring that many counties have borrowed far more than they can pay back, thus ensuring generations of “austerity” (assuming that Europe’s young people don’t revolt against the prospect). Hey, it’s a fine line.

America has been a tougher nut to crack. Americans come from hardy immigrant stock and have tended to be thrifty and hard working, certainly in the past. The Anglo-American power elite has been at work for decades to ensure these admirable qualities are subdued. Result? America’s finances are a mess.

The US deficit is scheduled to reach $1.4 trillion, and the U.S. Treasury Dept., responsible for funding it, needs to borrow more money than it is authorized to do. Republicans in the House and Senate have seized on the opportunity to demand that the Obama Administration agree to significant cuts in spending.

The Democrats, for their part, warn that using the debt-ceiling to enforce frugality is a most dangerous strategy, one that could virtually sink the United States’ credit. If the US cannot borrow, it will have to default on its debt payments, which would likely lead to some sort of devaluation of the dollar. Since the dollar is the reserve currency of the world, this would lead to significant tumult abroad.

China is willing to do its part in this all, apparently. According to a Reuters’ article that appeared yesterday (see excerpt above), China’s top officials have some strong opinions about a potential default in the US. Reuters quotes Li Daokui, an adviser to the People’s Bank of China, as saying that a default could undermine the U.S. dollar. “I think there is a risk that the U.S. debt default may happen,” Li told reporters (according to Reuters) on the sidelines of a forum in Beijing. “The result will be very serious and I really hope that they would stop playing with fire.”

While no one seems to know how much US debt China holds, Reuters claims confidently that it is $1 trillion. We’ve read US$800 million and US$ 2 trillion as well. But US$1 trillion sounds about right. That’s certainly a lot of money. Do Chinese officials really expect to get repaid? Here’s Li again: “I really worry about the risks of a U.S. debt default, which I think may lead to a decline in the dollar’s value.”

Ben Westmore, a commodities economist at National Australia Bank, is also upset that the Republicans are holding the debt-ceiling hostage. “It has dire implications for the economy at a time when the macro data is softening. It’s just a horrible idea.”

Financial markets remain steady, but that may not be the case if the stand-off continues. Republicans, Reuters informs us, have been working on the theory that bondholders would put up with a delay in payments in return for a bipartisan deal that would lower US spending and make the country stronger in the long term.

According to Reuters, central banking officials around the world are less sanguine about the ramifications than Republicans are. “This could then create huge panic globally,” Reuters quotes one Indian central banking official as saying. At the same time, India’s Treasury officials continue to buy and hold dollars. The government held US$39.8 billion in U.S. Treasuries as of March.

Of course, Reuters doesn’t mention that countries HAVE to buy dollars in order to purchase oil from Saudi Arabia, which will not accept anything else. This is how the dollar’s reserve currency status is enforced.

The article concludes by quoting Yuan Gangming, a researcher with the Chinese Academy of Social Sciences, as saying that default was indeed a real risk. “The possibility is quite high to see a default of the U.S. debt, which would harm many countries in the world, and China in particular.”

We’re not so sure as Gangming that the “possibility is high” that the US will default, or not seriously anyway. The House is led by Ohio Republican John A. Boehner (about as radical as a mushroom). Boehner is one of a handful of elite politicians, one of the most powerful men in the world thanks to his position as Speaker of the House. The idea that John Boehner will lead a radical restructuring of America’s finances does not seem especially feasible to us.

Of course, a good deal of pressure is being put on Boehner by the Republican-oriented Tea Party, and perhaps this will serve to shove the Republicans out of what would otherwise be their comfort zone. Hard to tell, really.

What is more significant from our point of view is the message the Chinese are sending. The Chinese central bankers, like central bankers around the world are not willing to entertain an iota’s reconfiguration of America’s debt. It’s a kind of dominant social theme – a fear based promotion. We’re not sure it will hold, but the rhetoric is stern. We have seen the same sort of implacable rigor in Europe, where the ECB has been at the forefront of the fight to ensure that Greece and the rest of the PIGS pay ever euro of their increasingly unpayable sovereign debt.

The mechanism of American austerity, then, is to be Chinese insistence on the immutability of American repayment terms. What the sovereign crisis is doing to Europe, the Chinese will do to America. In fact, American “austerity” is already here. The Chinese are providing the proximate cause, but increasingly we believe this was the plan all along.

Britain is in the same fix, Europe is rioting, the Middle East has gone up in smoke and Africa is trending the same way. Surely this couldn’t be coincidence could it? We think not. The world’s economic system is controlled out of the City of London via the Bank for International Settlements (based in Switzerland) and over 100 central banks around the world. The Anglosphere elite that constructed this system knew full well it would self-destruct over time.

They knew it in Europe, too. In fact, it has been admitted. The Eurocrats knew that the current system was unstable and would break down. They intended to take advantage of it to build a more centralized system and in fact they are currently doing so.

The wild card, as we have pointed out, is the Internet itself (and the truth-telling it provides), which we believe has destabilized Europe far beyond what the elites expected. They are said to be meeting somewhat unhappily in Switzerland today, as part of the annual Bilderberg affair. War is supposedly on the menu, along with selecting an IMF chief – and stabilizing Europe. There is to be austerity, yes, but not revolution.

In America, austerity is coming, too. The Chinese and perhaps the Japanese (and other creditors) will demand it. But the same realities hold for America as for Europe. There is perhaps a limit to what people will put up with, a limitation reinforced by the Internet Reformation.

Conclusion: We have no doubt that a chaotic financial situation around the world was intended to increase pressure for a more centralized currency – and for more centralized bank regulations, etc. We are not so sure the current plan will hold. Will the elites get their chaos? They might wish to be careful what they wish for.

source  http://www.thedailybell.com/2476/China-Demands-American-Austerity.html

 Comment:

With the  free flow of information the internet helps to maintain I can’t see the Fed just continuing to print money anymore As more and more people around the world see the livening standards they have compared to the average American  ,they will start to demand change .The days of America spending as much as it likes and expecting the rest of the world to pay their bills is fast coming to an end .A new reserve currency is badly needed but what are we going to end up with and more importantly who is going to control it is the real question. What will stop the new masters of the new reserve currency from doing the same thing? 

So there you have it .Greece is defaulting.

Greece has agreed in principle a new bail-out package with its European partners in Vienna, according to a source cited by the Reuters agency.

The new three-year plan will supersede Greece’s existing 110bn euro ($159bn, £97bn) EU and International Monetary Fund bail-out, Reuters said.

Greece would target another 6.4bn euros in austerity measures and finally start its 50bn euro privatisation programme.

In return the country would be offered some form of reduction in its debts.

Yoghurt

The broad terms of the package were agreed at a meeting of eurozone deputy finance ministers in Vienna that went on until after midnight on Thursday night.

Although the size of the new package was not revealed, the Reuters source said it would cover Greece’s borrowing needs for this year and next.

Details of the new plan still need to be finalised, so that it can be signed off by the “Eurogroup” of eurozone finance ministers when they meet on 20 June.

The blessing of the IMF and the European Central Bank is also likely to be needed.

The Greek prime minister, George Papandreou, will present the government’s privatisation plans and its new austerity measures to the Eurogroup chairman, Jean-Claude Juncker, in Luxembourg on Friday.

Protesters hung a banner from the Greek finance ministry calling for a general strike Protesters hung a banner from the Greek finance ministry calling for a general strike

The additional spending cuts and tax rises would come at time when the government already faces daily demonstrations by thousands of protesters against its existing plans.

On Friday, protesters from the pro-Communist PAME union blocked access to the finance ministry in Athens, and hung a banner from it calling for a general strike.

The previous night, about 20 protesters hurled stones and yoghurt at government spokesman George Petalotis as he was stepping up to the podium at an event for the ruling PASOK party.

IMF threat

The original bail-out plan has been overtaken by events, leaving the Greeks desperately short of money again.

The plan had envisaged Greece returning to the financial markets to help fund its deficit from next year.

But with its two-year borrowing cost currently at about 25%-per-year, the market is effectively closed to Athens.

Earlier this week, ratings agency Moody’s cut its rating of Greece to one of the worst levels available, on a par with Cuba, and only slightly above recently-defaulted Ecuador.

Moreover, Greece has failed to bring down its deficit as quickly as planned, largely because its economy has remained mired in recession.

Last week, the IMF threatened to veto the release of the latest 12bn euro tranche of Greece’s existing rescue package because the country could not guarantee its solvency over the next 12 months.

The “troika” of EU, IMF and ECB negotiators is due to announce a decision on the the fifth tranche later on Friday.

The government faces 13.7bn euros of immediate cash needs.

‘Credit event’

The new bail-out agreement is likely to include a “soft restructuring” or “reprofiling” of Athens’ private sector debts, advocated by Mr Juncker as a way of making the nation’s debt burden more manageable.

Until now the idea has been fiercely resisted by the European Central Bank, which fears that by imposing losses on Greece’s lenders – including overstretched European banks – the move could spark a broader eurozone financial crisis.

But it appears that an agreement has now been reached to grant Greece debt relief, so long as it is done in a way that does not trigger a “credit event”, according to the Greek government source quoted by Reuters.

This “credit event” could refer to the risk of triggering payments under derivative contracts used by financial markets to hedge or speculate on the risk of a Greek default.

It could also refer to methodologies used by the credit rating agencies and by the banks to determine whether loans are in default.

Many European banks have not yet recorded any losses on most of their lending to Greece, and could find their own solvency is put at risk if they are forced to do so.

It is likely that the restructuring would involve the postponement of debt repayments due in the next two years, as well as a possible reduction in interest payments.

It would also have to be done with the agreement of Greece’s private sector creditors.

source: http://www.bbc.co.uk/news/business-13637902

Comment:

So there you have it .Greece is defaulting.Tell the boys in the EU and the IMF to get lost and they come back and offer you more money as well as a discount on your debts .That is if your are Greece!

Now Ireland is a different matter

Paddy says, (Edna and Michael)

Sir, your lordship, would it be at all possible for me to have a tiny interest rate cut but only if it is convenient for your good self of course .I don’t mind paying your debts for you .Come over to dear old Ireland and have a pint of the good stuff, sure don’t you know everybody that puts a pint in his hand is Irish ,everybody can come over here and take anything they want and we will pay them to rip us off .Thank you most kind Sirs for giving us at least a photo opportunity  and if you want your windows cleaned  we can send some other Gobsh***  over  if you promise we can have a small interest rate cut .God bless you all over in Euroland.  Grovel Grovel Grovel

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