China’s Central Bank Makes Even the Heroic Fed Look Like a Bunch of Amateurs

The phenomenal credit expansion in China has taken many forms and has accomplished many phenomenal things, from building entire ghost cities to turning ambient air into a toxic cocktail. In the process, the credit bubble turned China into the second largest economy.
Some of this freshly created money has been spread around. Hence, the growing middle class. Those with significant accumulation of wealth are trying to get some of it out of China before it all blows up or before the corruption crackdown or a purge or some other business misfortune takes it all down.
In China’s state-controlled system, credit expansion is largely done by state-owned banks that have to keep lending no matter what. Then there’s the increasingly important shadow banking system. And finally, the People’s Bank of China – and no central bank is a match for it…

This post was published at Wolf Street on November 18, 2014.

Surveillance State Wins – Senate Votes To Allow NSA Bulk Data Collection To Continue

Senate leaders failed to get the 60 votes needed to advance The USA Freedom Act – which would have limited the National Security Agency’s bulk collection of phone records – and as Bloomberg reports, it’s unlikely a new version can be drafted for another vote before the congressional term expires this year. The 58-42 vote to move the measure forward came mostly along party lines as Senator Saxby Chambliss – the top Republican on the intelligence committee – rambling that the bill “eliminates tools critical to the intelligence community’s ability to prevent terrorist attacks, and its adoption would greatly degrade our ability to fight domestic terrorism in particular.” In other words – it’s for own good, now shut up!
Bloomberg reports that The Senate blocked legislation that would have limited the National Security Agency’s bulk collection of phone records, more than year after Edward Snowden exposed the extent of U. S. government surveillance programs.

This post was published at Zero Hedge on 11/18/2014.

One Reader’s Shocked Response Upon Learning His Health Insurance Cost Just Doubled

From a reader
My wife and I own a small business and we had previously (in 2013) been buying health insurance on our own for ourselves and our two kids. The cost was about six hundred per month with a $5200 deductible, $6800 total out of pocket exposure for the family of four.
After spending months trying to register for the ACA in late 2013 and early 2014 my kids got put on our state’s insurance (at “no cost”) and my wife and I bagged an ACA policy at a subsidized cost of $281 per month with a total out of pocket of about $6500 (just for the two of us).
Attached is the ACA notification of next year’s price increase. As you can see the cost goes from $281 to $555, a monthly increase of $274, a percentage increase of 97%.

This post was published at Zero Hedge on 11/18/2014.

Treasury Market Liquidity From Lehman To The October 15 Crash In A 1 Minute Video

It is now just over a month since the infamous Treasury flash crash of October 15, which has by now surpassed the May 2010 stock market crash in terms of causative mystery as well as again exposing the SEC’s inability do its job and police such future market calamities simply because the culprit – the SEC’s most lucrative lobby comprised of high frequency and other algorithmic traders – is by now far too embedded in the market structure that its withdrawal would cause a crash as pervasive as a halt of liquidity injection by the central banks. Which is why as Michael Lorizio, senior trader at Boston-based Manulife told Bloomberg, “The way the market is set up right now, we’ll see instances like we did on that day. There’s going to be a learning curve as to how to handle that.” Also, a whole lot of praying.
We covered the epic October 15 collapse in rates in the past but for those who missed it, here it is again:

This post was published at Zero Hedge on 11/18/2014.

3 Of The 10 Largest Economies In The World Have Already Fallen Into Recession – Is The U.S. Next?

Are you waiting for the next major wave of the global economic collapse to strike? Well, you might want to start paying attention again. Three of the ten largest economies on the planet have already fallen into recession, and there are very serious warning signs coming from several other global economic powerhouses. Things are already so bad that British Prime Minister David Cameron is comparing the current state of affairs to the horrific financial crisis of 2008. In an article for the Guardian that was published on Monday, he delivered the following sobering warning: “Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.” For the leader of the nation with the 6th largest economy in the world to make such a statement is more than a little bit concerning.
So why is Cameron freaking out?
Well, just consider what is going on in Japan. The economy of Japan is the 3rd largest on the entire planet, and it is a total basket case at this point. Many believe that the Japanese will be on the leading edge of the next great global economic crisis, and that is why it is so alarming that Japan has just dipped into recession again for the fourth time in six years…

This post was published at The Economic Collapse Blog on November 18th, 2014.

DHS & National Guard Preparing For Mass Rioting In Ferguson – Episode 521

The following video was published by X22Report on Nov 18, 2014
Greece is battling to exit it early but the IMF wants Greece to take on more debt. As time goes on it is taking people longer and long to get a job. Inflation creeps up even though fuel prices are down. NAHB sentiment up, mortgage apps and sales decline. France will not sign the TTIP. Frankfurt is now offering direct settlements in Chinese yuan. US now ranks 21 in personal freedom according to a survey. DHS and the National Guard are getting prepared for riots. The FBI warns things can go hot fast not just in Ferguson but around the country. The gold in Ukraine’s vaults has mysteriously disappeared. UN wants the Islamic State oil truck transports destroyed.

Will You Light $180,000 on Fire by Taking Social Security at Age 62?

On the television series Dragnet, Sgt. Joe Friday was known for his calm demeanor while questioning witnesses. When they began to ramble, he would corral them with comments like, ‘Just the facts, ma’am.’ Sound advice for the witness stand, but when it comes to retirement planning, Sgt. Friday was giving the wrong instructions. Instead of asking for ‘just the facts’ we should ask for ‘all the facts.’
A recent article for Bankrate featured a frightening graphic quoting Social Security Solutions founder William Meyer: ‘Two-thirds of Americans take Social Security at age 62, giving up $180,000 if single, $323,000 if married.’

With those statistics in mind, holding off until age 70 can seem like a no-brainer. Let’s take a closer look, though, with ‘all the facts’ in plain sight.

This post was published at GoldSeek on 18 November 2014.

Why Japan’s Money Printing Madness Matters

This is getting hard to believe. The announcement that Japan has plunged into a triple dip recession should have been lights out for Abenomics. But, no, its madman prime minister has now called a snap election to enlist more public support for his campaign to destroy what remains of Japan’s economy.
And what’s worse, he’s not likely to be stopped by the electorate or even the leadership of Japan Inc, which presumably should know better. Here’s what Japan leading brokerage had to say about the ‘unexpected’ 1.6% drop in Q3 GDP – – compared to the consensus expectation of a 2.2% gain and after the upward revised shrinkage of 7.3% in Q2.
We think that the economy is gradually improving,’ said Tomo Kinoshita, an economist at Nomura Securities. ‘There’s no reason to be pessimistic about the economy going forward.’
Really? How in the world can an economist perched at the epicenter of Japan Inc. think that its economy is improving when Japan’s constant dollar GDP has now fallen back to pre-Abenomics levels; and, in fact, is no higher than it was in late 2007 prior to the ‘financial crisis’? Indeed, aside from the Q1 pull-forward of spending to beat the consumption tax increase, Japan’s economy has remained stranded on the flat-line it attained after world trade recovered from its 2008-2009 plunge.

This post was published at David Stockmans Contra Corner on November 18, 2014.

Gold Daily and Silver Weekly Charts – Close But No Cigar

Gold took an early run at breaking out, but then was held at the overhead resistance and ‘psychologically important’ 1200 level. We’ll have to see if gold can rise above resistance and break fee, and break this downtrend of lower highs and lower lows.
Someone asked me to comment on the notion that price manipulation is not possible in large markets like the precious metals. I cannot believe that this canard is being taken seriously again at this late date.
I hope you realize that when someone says that given supply and demand there can be no price manipulation in the metals markets they are citing the ‘efficient market theory’ as the basis for their disbelief.
That is not to say that this proves that there is manipulation. There is plenty of other indications of that. But it does not mean that there can not be market manipulation. Prices are set at the margins, and given leverage and favorable regulatory climates prices and demand/supply can become seriously disconnected.
Markets can get out of sorts with value for a long time, and years in some cases of bubbles, if enough energy and effort is put into it. And especially in times of lax regulation and lack of transparency, there can be widespread price manipulation for a number of reasons.
Do we really have memories that are this selective and short term?

This post was published at Jesses Crossroads Cafe on 18 NOVEMBER 2014.

Here We Go Again: Demand For Subprime Debt Is “Out Of Control”

As Kyle Bass once eloquently noted, the brevity of financial memory is about two years; and nowhere is that more clear than in the explosive resurgence of demand for new subprime-mortgage-backed products. As Scotsman Guide reports, some subprime lenders are reporting strong investor appetite for the once-reviled mortgage products (for borrowers with credit scores as low as 500 and with debt-to-income (DTI) ratios as high as 50 percent). “It’s out of control; it seems like there’s 10 times the amount of demand to buy this paper as there are borrowers that want the loans,” said one lender. As Bass may have also said “proceed with caution.”
As Scotsman Guide reports,
Although a number of people still cringe at the term subprime, some subprime lenders are reporting strong investor appetite for the once-reviled mortgage products.
Investors are interested in recent subprime loans for their better returns than traditional mortgages.
Depending on the risk of the borrower, these mortgages carry interest rates between 5 percent and 9 percent. Hutchens said that all types of investors are after the Angel Oak subprime products, from hedge funds to large mortgage lenders – ‘anyone who’s looking to participate in the mortgage business at higher coupons besides agency modes.’
The reach for yield – and ignorance of risk – but this time it’s different…

This post was published at Zero Hedge on 11/18/2014.

Beijing, Canberra Agree on Landmark Free Trade Deal: Abbott

China and Australia have concluded talks on a landmark bilateral deal that will remove tariffs on goods imports and create stimulus for increased mutual investment, a statement on the Australian prime minister's official website said on Monday.
"The landmark China-Australia Free Trade Agreement (ChAFTA) will unlock substantial new benefits for Australians for years to come," the statement announced.
The parties signed a declaration of intent on Monday ending nine years of free trade talks between Beijing and Canberra. Australia agreed to reduce import tariffs on all goods from China to zero, while China pledged to make up to 95 percent of Australian imports tariff-free over the course of several years.
"More than 85 per cent of Australian goods exports will be tariff free upon entry into force, rising to 93 per cent in four years… On full implementation of ChAFTA, 95 per cent of Australian goods exports to China will be tariff-free," the announcement on Prime Minister Tony Abbott's page said.

This post was published at Sputnik News

Jim Rickards: ‘The debt problem in China is not hype’

You have said that the collapse of the International monetary system does not really mean end of the world. One has to devise new rules.  What exactly do you mean by new rules?
The international monetary system has collapsed three times in the past 100 years — in 1914, 1939 and 1971. Each collapse was followed by a new system devised by the leading trading and financial powers of the time. These new "rules of the game" are arrived at in one or more international monetary conference. Famous examples include the Genoa Conference of 1922, the Bretton Woods Conference of 1944, and the Smithsonian Agreement of 1971, but there have been many others. A new international conference today would probably include the US, EU, Japan, China and Russia as its major players. It would likely be held under the auspices of the G-20 and the IMF. Other important participants would include Brazil, India, Saudi Arabia and the UK. Possible bases for a new international monetary system include the current form of world money, the special drawing right (or SDR), and possibly some role for gold.
Given China’s rising debt, do you think the collapse might get triggered from there?  Or, is the debt problem just a hype?
The debt problem in China is not hype. The collapse of the debt and property bubble there could well be the catalyst for a global economic crisis. About 45% of Chinese GDP is infrastructure investment and a substantial portion of that is wasted on non-revenue generating and unneeded projects and financed with unpayable debt. This debt is funded in part through wealth management products (WMPs), which are like high-yield junk CDOs. This WMP bubble is in addition to the general residential property bubble that has been financed with regular mortgage products. Another source of debt is off-balance-sheet provincial government obligations. China is the greatest debt bubble in history and it will unwind with adverse and unpredictable consequences for global capital markets.

This post was published at International Finance Magazine

Italy’s Grillo takes anti-euro campaign to Brussels

The leader of Italy's anti-establishment Five Star Movement, Beppe Grillo, has gone to the European Parliament (EP) to present his programme to get a referendum in Italy on leaving the euro "as soon as possible".
The comedian-turned-politician is aiming to collect 4m signatures by next spring.
He will then go to parliament in Rome, where many of his MPs now sit, and demand a referendum. If millions of Italians sign the petition, Prime Minister Matteo Renzi won't be able to simply brush this off.
Mr Grillo, much like UKIP leader Nigel Farage in Britain, has fundamentally changed the Italian political landscape.

This post was published at BBC

About That Japanese Downgrade

While we no longer live in a world in which debt matters – because central banks will just monetize it in their ongoing and no longer covert effort to reflate the final bubble – and thus debt ratings are an irrelevant anachronism from a bygone era, we can’t help but recall a certain statement by S&P from September of last year, in which the rating agency reminded everyone just why Japan has to proceed with both its first sales tax hike from 5% to 8%, (which, together with weather, has now been blamed on Japan’s shocking quadruple-dip recession), but also the follow up from 8% to 10%, which as we now know, has been delayed indefinitely, and which was supposed to prefund welfare spending for Japan’s demographic disaster which with every passing day gets closer and closer.
This is what S&P said:
Japan could face a debt downgrade if it does not shrink its budget deficit, which is unlikely to return to primary balance by a targeted date of fiscal 2020, even if the prime minister’s policies go well, a senior official of Standard & Poor’s said. Japan’s outstanding debt burden is the highest in the world at 1,000 trillion yen, or more than twice the size of its economy.

This post was published at Zero Hedge on 11/18/2014.

Goldman FX Trader Fired For Participating In Currency-Rigging Cartel Even As Goldman Avoids Any Charges

As we noted previously, one of the glaring omissions from the list of banks that were charged with rigging FX markets, and subsequently promptly settled with nobody going to prison as usual, which consisted of:
Barclays PLC HSBC Holdings PLC Royal Bank of Scotland Group PLC UBS AG Citigroup J. P. Morgan Chase Bank of America Corp. Bank of America Was none other than the bank which according to recent revelations, has undue control over the NY Fed, Goldman Sachs. And yet, moments ago the WSJ reported that Goldman Sachs just fired a currencies trader who “allegedly was involved with the misconduct before he joined the firm.”
So how is it possible that Goldman, which housed one of “The Cartel’s” (or was it Bandits?) riggers, was never busted in the first place? Because apparently Goldman had no clue of his impeccable FX-rigging chat room credentials when it hired him from HSBC back in 2012.
Incidentally, when Cahill was hired by HSBC from Barclays, the bank said the following:

This post was published at Zero Hedge on 11/18/2014.

Why, Despite Its Failure, Abenomics Is “Still Working” For These People, In Quotes

If you were forced to admit that everything you believed about markets and monetary policy was in fact completely fallacious, as this week’s Japanese GDP collapse proved of Abenomics and devaluing yourself to prosperity, could you do it? Or would you stick to your blinkered views of the world… The following characters continue to have faith in the self-proclaimed ponzi scheme…
Yesterday’s [GDP] report ‘is a small setback, but it should be viewed as a buying opportunity,’ John Praveen, chief investment strategist at Prudential International Investments Advisers LLC … ‘There’s no reason to be depressed,’ Audrey Kaplan, the head of international equities for Federated Investors Inc., which oversees about $350 billion, said by phone from New York.’It’s just pushing the recovery back a bit. We look at Abe trying to break the cycle of deflation and from the top down they’re doing the right things.’

This post was published at Zero Hedge on 11/18/2014.

WARNING: new international gang of thieves make the IS and Somali pirates look like amateurs

Sovereign Valley Farm, Chile
When the two young petty thieves, Rinconete and Cortadillo, came to Seville they were quickly censured for stealing.
To their surprise, it wasn’t for the theft itself, but instead because they were not registered with the local thieves’ guild.
In this upside-down world imagined by Miguel Cervantes, theft was not a crime, but a craft – performed in the name of God and justice.
And like any other craftsmen of the day, the thieves had formed a guild. There they provided training and support to their members, while maintaining an exclusive right to engage in the trade.
This past month, a real-life guild of thieves was formed. With 51 governments pledging their support to each other for the protection of their ignoble craft of theft. And another 30 pledging to join by 2018.
From day one, governments have been pilfering their citizens’ assets through taxation, claiming a monopoly on thievery.
From the largest institution to the pettiest pickpocket, anyone else who tries to engage in theft is severely punished, as governments work to protect their exclusive right to steal.
Frighteningly, they do this all out in the open, believing that they actually have a moral right to commit theft.
You can see this delusion in the US government’s claims that last year they ‘lost out’ on $337 billion from people avoiding taxes. As if they have some moral claim to the money they’d failed to pilfer.
Nonetheless, they use this claim to justify actively hunting down and penalizing anyone who takes action to avoid being stolen from.
The ones that are doing this are the bankrupt countries, and the deeper they slide into debt, the more desperate they become.

This post was published at Sovereign Man on November 18, 2014.

Dollar Drop Sparks BTFEverything-Except-Oil Algo

From its lowest 5-day range in history and near-longest streak of closes above its short-term average, theS&P 500 broke to new record highs today (as did the Dow) above 2,050, leaving every other asset class in the dust (besides USDJPY of course). The incessant push for the stops above 117.00 dragged the S&P higher on no catalyst whatsoever. Treasury yields traded 2-3bps lower on the day (and HY credit spreads widened) in the face of equity exuberance. The USD faded on the day back to unchanged on the week on the back of EUR strength (post-Germany). Gold rallied to $1195 ( 0.5% on the week) and silver rose modestly but the USD weakness did nothing for the rest of the commodity complex. Copper was whacked (after China housing data) but the big story is WTI Crude plunged again (-2% on the week) closing just shy of 4-year lows. Russell 2000 and Trannies close in the red for the week.
In summary: Stocks Up, Gold Up, Bonds Up… USD Down, Oil Down, Copper Down ahead of Fed Minutes tomorrow (credit and stocks protected).
Off the Bullard lows, the Nasdaq is now up over 14%, Dow, S&P, & Russell up around 12% and Trannies up near 18%…

This post was published at Zero Hedge on 11/18/2014.