Will Deutsche Bank collapse the global market?

The past year has seen its fair share of worries. From the China slowdown to the Brexit, successive waves of overseas fear have rolled onto our shores since 2015, yet none of them were the Tsunamis the bears had predicted.
The latest foreign fear concerns the possibility for a global credit crisis led by the collapse of a major international bank. A simplified summary of this scenario goes something like this: Deutsche Bank is on the brink of bankruptcy and its insolvency could spark a systemic European banking crash. This in its turn could send shockwaves throughout the global financial system, resulting in widespread economic turmoil on par with the previous worldwide crisis.
Commentators who favor this outlook tend to illustrate their dire predictions with a graph of Deutsche Bank’s stock performance since last year. It certainly adds a spark of credence to their argument based solely on the depth of the stock’s plunge.

This post was published at GoldSeek on 8 September 2016.

40% Of GDP Per Year: Goldman Calculates The True Growth Rate Of China’s Debt

For a long time when it came to Chinese loan creation, analysts would only look at the broadest reported aggregate: the so-called Total Social Financing. And, for a long time, it was sufficient – TSF showed that in under a decade, China had created over $20 trillion in new loans, vastly more than all the “developed market” QE, the proceeds of which were used to kickstart growth after the 2009 global depression, to fund the biggest capital misallocation bubble the world has ever seen and create trillions in nonperforming loans.
However, a problem emerged about a year ago, when it was revealed that not even China’s TSF statistic was sufficient to fully capture the grand total of total new loan creation in China. We profiled this three months ago in a post titled “China’s Debt Is Far Greater Than Anyone Thought“, where, according to Goldman, “a substantial amount of money was created last year, evidencing a very large supply of credit, to the tune of RMB 25tn (36% of 2015 GDP).” This massive number was 9% higher than the TSF data, which implied that “only” a quarter of China’s 2015 GDP was the result of new loans. As Goldman further noted, the “divergence from TSF has been particularly notable since Q2 last year after a major dovish shift in policy stance.”
In short, in addition to everything else, China has also been fabricating its loan creation data, and the broadest official monetary aggregate was undercutting the true new loan creation by approximately a third. The reason for this is simple: China does not want the world – or its own population – to realize just how reliant it is on creating loans out of thin air (and “collateralized” by increasingly more worthless assets), as it would lead to an even faster capital outflow by the local population sensing just how unstable the local banking system is.

This post was published at Zero Hedge on Sep 8, 2016.

Goldman Sachs Just Launched Project Fear in Italy

Things could get very ugly, very fast, if those bank bonds collapse.
Project Fear began two years ago in the run up to Scotland’s national referendum. It then spread to the rest of the UK in the lead up to this summers Brexit referendum. But it keeps on moving. Its latest destination is Italy, where the campaign to instill fear and trepidation in the hearts and souls of Italy’s voters was just inaugurated by the world’s most influential investment bank, Goldman Sachs.
It just released a 14-page report warning about the potentially dire consequences of a ‘no’ vote in Italy’s upcoming referendum on the government’s proposed constitutional reforms. The reforms seek, among other things, to streamline Italy’s government process by dramatically restricting the powers of the senate, a major source of political gridlock, while also handing more power to the executive.
The polls in Italy are currently neck and neck, though the momentum belongs to the reform bill’s opponents.
If the Italian public vote against the bill, the response of the markets could be extremely negative, warns Goldman, putting in jeopardy the latest attempt to rescue Italy’s third largest and most insolvent bank, Monte dei Paschi di Siena. The rescue is being led by JP Morgan Chase and Italian lender Mediobanca, and includes the participation of a select group of global megabanks that are desperate to prevent contagion spreading from Italy’s banking system to other European markets, and beyond. They include Goldman Sachs [Big European Banks Try to Block Contagion from Italian Banking Crisis (Before it Sinks them)].

This post was published at Wolf Street by Don Quijones ‘ September 8, 2016.

The Deep (Left) Pockets Of Black Lives Matter

While claiming to be a grassroots organization formed in response to the prevalence of police violence, Black Lives Matter (BLM) is actually 100-percent pure Astroturf. With coffers bulging with millions of dollars from George Soros, the Ford Foundation, and other deep-pocketed leftist individuals and groups, BLM is little more than a front organization for these leftists and their agenda to reshape the very fabric of American society, culture, and law.
As The New American recently reported, Ken Zimmerman, the director of U. S. programs at Soros’s Open Society Foundations (OSF), denied last year that Soros had funded BLM, saying it was just a rumor. That was before hackers with DCLeaks.com published OSF documents showing that the Soros group had already given at least $650,000 directly to BLM. Those same documents reveal the reason for OSF bankrolling BLM: the ‘dismantling’ of America so that it can be recast according to the vision of Soros and his leftist cohorts. As we reported then:

This post was published at Zero Hedge on Sep 8, 2016.

Wells Fargo Fires 5,300 For Engaging In Massive Fraud, Creating Over 2 Million Fake Accounts

For years we have wondered why Wells Fargo, America’s largest mortgage lender, is also Warren Buffett’s favorite bank. Now we know why.
On Thursday, Wells Fargo was fined $185 million, (including a $100 million penalty from the Consumer Financial Protection Bureau, the largest penalty the agency has ever issued) for engaging in pervasive fraud over the years which included opening credit cards secretly without a customer’s consent, creating fake email accounts to sign up customers for online banking services, and forcing customers to accumulate late fees on accounts they never even knew they had. Regulators said such illegal sales practices had been going on since at least 2011.
In all, Wells opened 1.5 million bank accounts and “applied” for 565,000 credit cards that were not authorized by their customers.
Wells Fargo told to CNN that it had fired 5,300 employees related to the shady behavior over the last few years. The firings represent about 1% of its workforce and took place over several years. The fired workers went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

This post was published at Zero Hedge on Sep 8, 2016.

SEPT 8/OPEN INTEREST FOR THE UPCOMING OCTOBER CONTRACT REMAINS EXTREMELY HIGH AT 44,000 CONTRACTS/DESPITE THE WHACKING OF GOLD AND SILVER YESTERDAY, BOTH OI’S RISE AT THE COMEX/BANK OF JAPAN/AND …

Gold:1336.80 down $7.50
Silver 19.59 down 17 cents
In the access market 5:15 pm
Gold: 1337.40
Silver: 19.62
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON.
The Shanghai fix is at 10:15 pm est and 2:15 am est
The fix for London is at 3 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 45 minutes before London’s first fix.
And now the fix recordings:
Shanghai morning fix Sept 8 (10:15 pm est last night): $1348.03
NY ACCESS PRICE: $1347.05 (AT THE EXACT SAME TIME)
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$1348.96
NY ACCESS PRICE: 1346.75 (AT THE EXACT SAME TIME)
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
London Fix: Sept 8: 3: am est: $1348.00 (NY: same time: $1347.42: 3 AM)
London Second fix Sept 8: 10 am est: $1343.40 (NY same time: $1344.60 , 10 AM)
It seems that Shanghai pricing is higher than the other two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex
For gold:The front September contract month we had 399 notices filed for 39900 oz
For silver: the month of September we have a total of 429 notices filed for 2,145,000 oz
Let us have a look at the data for today.

This post was published at Harvey Organ Blog on September 8, 2016.

Auto Makers Are Caught Manipulating Sales Numbers – Episode 1070a

The following video was published by X22Report on Sep 8, 2016
Dell laying off more employees. US Auto data is fabricated and now automakers are being investigated. Barnes and Noble founder says retail is absolutely horrible. NYC luxury housing is declining. Hanjin shipping is a complete disaster and most likely they will blame this is the slow holiday season. IRS warns not to keep gold IRA at home. Fed tells congress to change some laws before the collapse of the economy

Legal tax reduction tactics that everyone should be taking advantage of

If you’ve been a reader of this letter for any length of time, you know I hate taxes.
I unequivocally believe that I have a moral obligation to reduce my taxes to the lowest level possible.
It’s not about Maseratis and private yachts (I drive a Volvo and get seasick easily).
I’ve slashed my taxes because I know that tax dollars pay for some of the most vile, immoral things imaginable.
Drone strikes on children’s hospitals. Illegal wars that benefit a few defense contractors and oil companies. A gigantic police state that makes people less free every day.
All of this is paid for with your taxes.
In addition to the morality issue is the extraordinary waste that comes with government spending.
Just think about all the money they squander, from the $2 billion for the Obamacare website, down to the $387,000 that the NIH spent giving Swedish massage to bunny rabbits.
Sure, there are plenty of programs that have noble intentions.

This post was published at Sovereign Man on September 8, 2016.

3 Examples of Outrageous CEO Spending at the Expense of Shareholders

According to Glassdoor, the average CEO compensation in 2015 was $13.8 million. But that massive wealth hasn’t curtailed outrageous CEO spendinghabits, like using the company as their own personal piggybank.
Our first story of excessive CEO spending starts right where you might expect to find a glorified celebration of wealth and materialism: Wall Street.
It seems the classic movie that is its namesake didn’t have to stray to exaggerate opulent settings and nasty plot points.
Outrageous CEO Spending Starts at Wall Street
We’ll just give you one example among a sea of choices…

This post was published at Wall Street Examiner by Money Morning Staff Reports ‘ September 8, 2016.

Tampons Coming To Men’s Rooms At Brown University

Brown University’s student body president will be hand-delivering menstrual products to all nonresidential bathrooms on campus, including men’s rooms, with the help of 20 other students. The initiative is intended to communicate the message that “pads and tampons are a necessity, not a luxury,” and that not all people who menstruate are women. Brown University’s student body president will be hand-delivering menstrual products to all nonresidential bathrooms on campus, including men’s rooms, with the help of 20 other students.

This post was published at Zero Hedge on Sep 8, 2016.

DB Warns 35-Year Economic Super Cycle Is Officially Ending

Markets have become so ultra focused on the short-term that we often wonder whether anyone even remembers what happened last week much less what happened in the wake of the housing collapse in 2008 that nearly toppled global financial markets.
In fact, auto sales, fueled by the latest subprime lending frenzy, are the perfect illustration of the lack of institutional memory. Despite the brutal ramifications of lending to subprime real estate borrowers just 8 years ago, today we see billions of dollars flowing into subprime auto loans, with reckless abandon, as auto sales bubble over courtesy of $0 down, 0% APR, 70 month loans that would have been unimaginable just a short time ago (sound familiar to anyone?).
Of course, the current subprime auto bubble is the direct result of reckless central banking policies that have forced trillions of dollars out of sovereign debt and into any asset with a reasonable term and a yield above 0%. And who cares about the consequences of this misinformed investing strategy because every time it looks like the music might be ending, central banks just step in with more stimulus and the party keeps going.
Alas, at least one analyst, Jim Reid of Deutsche Bank, has cautioned that now might not be such a bad time to take a step back and look at the longer term demographic and economic trends. Reid argues that global demographic trends, including the addition of “1 billion cheap workers” from China and India and a wave of highly productive 35-54 year old workers, have created a 35-year super cycle that is just about ready to reverse. Going forward, Reid warns that the “extrapolation of the last 35 years could be the most dangerous mistake made by investors, politicians and central bankers.”

This post was published at Zero Hedge on Sep 8, 2016.

29,000 ITT Students Are Stuck In Limbo: Guess What Happens To Their Debt Next

Two days ago ITT was forced to shut down amid an investigation by the U. S. Department of Education which restricted new enrollees from acquiring federal student loans (see our post here). Now, with ITT’s 29,000 students stuck in limbo, many are asking what’s going to happen to their $500mm worth of outstanding student loans. Well, like with everything else these days, taxpayers will likely have the “honor” of picking up the bill.
As Bloomberg reports, the Education Department is “frantically trying to limit debt cancellations” though it likely has few options as federal student loan docs allow for loan forgiveness in the event an enrolled student’s school shuts down during their education and that student subsequently fails to enroll in a “comparable” institution.
The Education Department is frantically trying to limit debt cancellations. Students who transfer even one ITT credit toward what the agency considers “comparable” programs at other schools and then complete their studies aren’t eligible to have their loans wiped. But federal regulations don’t clearly define “comparable” – giving the department the authority to reject borrowers’ pleas for forgiveness. The application borrowers must fill out is similarly vague. All ITT students who don’t complete “comparable” programs elsewhere can apply for debt cancellations.

This post was published at Zero Hedge on Sep 8, 2016.

Our Selfie Society Is Incompatible with Democracy

Now that the U. S. is a neoliberal selfie society, we have the worst of all possible worlds in terms of a failed, doomed democracy.
Each individual’s liberty to do whatever you want, be whatever you want, go wherever you want, etc. (within the legal boundaries set by the state) is the core of the American Dream. The individual’s civil liberties and right to the unlimited pursuit of happiness is sacrosanct.
(Except of course when the state invokes civil seizure and steals your money, vehicle, etc. on vague suspicions that you may have violated one of the state’s many blanket criminalization codes, but that’s another story.)
But there’s a problem: paradoxically, the selfie society created by the self-absorbed pursuit of wealth and happiness is incompatible with a functioning democracy. Why this is so takes some careful analysis of what it takes for groups of any size to function democratically.
Here’s the core of the paradox: the neoliberal set of values that dominates our political, social and economic narratives holds that the maximization of private gain by any means available is the highest expression of the pursuit of happiness.
This maximization of private greed and self-interest is assumed to magically yield the wisest course for the nation via the aggregation of everyone’s self-interest via democracy.

This post was published at Charles Hugh Smith on SEPTEMBER 08, 2016.

Why Is Big Oil Backing Clinton Over Trump?

As a general rule of thumb concerning Big Oil and heated presidential elections, the US oil and gas sector routinely donates to the Republican candidates, leaving the ‘greener’ Democratic candidates out in the cold.
This year around, as far as energy money is concerned, Democrats and Republicans are changing places, largely due to their interesting candidate choices this time around Hillary Clinton and Donald Trump.
According to data collected by the Center for Responsive Politics, although the oil and gas industry has so far donated US$18.3 million to candidates with a clear-cut 96.3-percent preference for Republicans, Clinton has managed to raise US$550,971 versus Trump’s measly US$153,974. More than half of the industry’s donations this time around were splashed on previous players, most notably Republicans Jeb Bush ($9.7 million), Rick Perry ($1.6 million) and John Kasich ($1.6 million), all of whom have since thrown in the towel.
While it may not be surprising to see Clinton’s oil and gas money not even making the top 20of her contributions by industry (unsurprisingly, securities and investments would be the number one contributor at $47.5 million), the paltry O&G contributions to Trump show that the industry doesn’t believe that America under his presidency ‘will accomplish complete American energy independence’.

This post was published at FinancialSense on 09/08/2016.

“It’s Bordering Chaos”: $14 Billion In Cargo Stranded At Sea, Crews “Go Crazy” On Hanjin Ghost Ships

The fallout from last week’s historic bankruptcy of one of the world’s biggest shipping lines, Hanjin Shipping, continued with little resolution with as much as $14 billion worth of cargo stranded at sea according to the WSJ, sending cargo owners scurrying to try to recover their goods and get them to customers. Since Hanjin’s bankruptcy protection filing, dozens of ships carrying more than half a million cargo containers have been denied access to ports around the world because of uncertainty about who would pay docking fees, container-storage and unloading bills. Some of those ships have been seized by the company’s creditors.
As Bloomberg adds, 85 Hanjin ships that have been effectively marooned offshore as ports in the U. S., Asia and Europe have turned the company’s ships away. The worry is that Hanjin ships won’t be able to pay port fees or their contents might be seized by creditors, which would disrupt port operations. The global shipping disruption comes just as companies are shipping merchandise to fill shelves and warehouses for the end-of-year holiday season.

This post was published at Zero Hedge on Sep 8, 2016.

Cross-Asset “Contagion” Risk Indicator Worse Than Lehman

Nowhere else is the impact of central banks more evident than the total decoupling of global stock markets from global economic developments.
However, Bloomberg reports that as money managers attempt to diversify away from what they all know will not end well, Credit Suisse warns the overwhelming flow from central bank interventions “are driving everything” pushing their so-called cross-market contagion indicator to levels more worrisome than anytime since 2008’s Lehman-inspired financial crisis.

This post was published at Zero Hedge on Sep 8, 2016.

Former IMF Economist Declares War on Cash

The War on Cash continues to gain momentum within the circles of the politically influential.
Bloomberg yesterday posted an article on a new book titled The Curse of Cash, written by Kenneth Rogoff former chief economist of the International Monetary Fund and current Harvard University economist.
Though the Bloomberg piece unfortunately accepts at face value the weak argument that eliminating cash will make it harder for criminals to operate, it does focus on the real goal of people like Rogoff, to give more power to central bankers:
Rogoff … contends that suppressing cash would make it easier for the Federal Reserve and other central banks to boost economic growth by pushing interest rates into negative territory. That’s the strange world where you pay to keep money in the bank and get paid to borrow it. The theory is that negative rates will induce people to save less and spend more, which will revive growth. Savers won’t tolerate negative interest rates on their savings as long as cash is an alternative. Why not simply withdraw stacks of $100 bills and keep the cash in a mattress or a safe?
Of course, one of the blessings of cash is the very fact that it allows normal people protection from some of the consequences of bad monetary policy. As Dr. Joseph Salerno wrote last month:

This post was published at Ludwig von Mises Institute on Sept 8, 2016.

Fed Tells Congress To Restrict Banks From Buying Stocks, Commodities

What is The Fed suddenly worried about?
In a somewhat shocking report from The Federal Reserve, Janet Yellen and her motley crew of private bankers areurging Congress to make some significant changes to banking regulation. As Bloomberg highlights:
Fed urges Congress to repeal section of the Bank Holding Act that allows Wall Street firms to make investments in non-financial companies, report says

This post was published at Zero Hedge on Sep 8, 2016.

The (160 to 1) Gold-Silver Ratio Every Investor Needs To Know About

According to my new research, there is a very important Gold-Silver ratio that every precious metals investor needs to know about. While most precious metals investors are familiar with the Gold-Silver price ratio of 68/1 (presently) as well as the Silver-Gold production ratio of nearly 9/1 (2015), they have no idea about an even more important ratio that I will explain below.
Before I get into this important Gold-Silver ratio, let’s quickly examine some of the historic ratios listed above.
The Historic Gold-Silver Price Ratio Briefly Explained
The Gold-Silver price ratio remained 15/1 (thereabouts) for centuries until it started to rise in 1874, due to the Coinage Act of 1873 that stated:
The Coinage Act of 1873 or Mint Act of 1873, 17 Stat. 424, was a general revision of the laws relating to the Mint of the United States. In abolishing the right of holders of silver bullion to have their metal struck into fully legal tender dollar coins, it ended bimetallism in the United States, placing the nation firmly on the gold standard. Because of this, the act became contentious in later years, and was denounced by people who wanted inflation as the ‘Crime of ’73’ (Source: Wikipedia)
By removing silver as legal tender in 1873, this impacted the value of silver. There have been many conspiracy theories stating that the Coinage Act of 1873, which ended the bimetallism standard (gold & silver), destroyed the value of silver as money. However, congress passed a law called the Bland-Allison Act in 1878 that required the U. S. Treasury to purchase silver every month to make Silver Dollars:

This post was published at SRSrocco Report on September 8, 2016.

Consumer Credit Jumps By $18 Billion In July; Student, Auto Loans Hit $2.4 Trillion

After last month the Fed reported that in June revolving, i.e. credit card, credit unexpectedly soared by $7.7 billion, the second highest monthly increase since the financial crisis, many were popping the champagne, ready to celebrate the return of the consumer’s “animal spirits” who were out and about, and most importantly, charging it. One month later, we find that the June revolving credit spike was even higher, rising by $9.2 billion following today’s revision. However, as a result, the July consumer credit grew by just $2.8 billion to start the third quarter, the smallest amount since February, suggesting that the prior month’s spike may have been a one-time fluke.

This post was published at Zero Hedge on Sep 8, 2016.