Marc Faber – Massive Fraud In This Financial Bubble

The following video was published by Greg Hunter on Oct 28, 2017
A big difference between the market today and that of the 1987 crash are unfunded pensions. Renowned investor Dr. Marc Faber, who holds a PhD in economics, says, ‘The unfunded liabilities have gone up. They did not go down. So, if in rising asset markets the pension funds unfunded liabilities go up, can you imagine what will happen when markets fall? So, they will have to print money. . . . Bear markets do not occur just because of one event. It’s a series of circumstances that lead to a loss of confidence with people exiting markets, and then with people exiting markets in a panic. . . . Fed Head Janet Yellen said if conditions would warrant further measures, the Fed would take further measures. So, she (Yellen) said . . . if the Fed thought the economy was weakening, or their beloved asset markets go down, then she may again ease and introduce QE4 (money printing out of thin air.) . . . In today’s situation, the asset market is less overbought, but the asset bubbles are everywhere. . . . Each bubble has fraud cases, and I mean massive fraud. That’s the characteristic of each bubble. There is fraud.’

Roman Republican Hoard for Sale of Victoriati

We have another hoard available of the early Roman coinage from the Second Punic War. These are the Greek denominations forming the first two-tier monetary system in the known world. Such hoards are rare today so the opportunities to obtain such specimens are becoming far and few between.
Prior to the introduction of the Roman denarius in about 211 BC, Rome’s silver coins were similar in weight and silver content to the staters (didrachmas) of Greece and Magna Grecia (southern Italy and Sicily). With the Second Punic War (218-200BC), the production of these silver coins greatly increased to cover the expenses as always with war. This demand for coinage was met with the extensive minting of didrachmas known as quadrigati named after the reverse picturing Jupiter driving a four-horse chariot known as the quadriga.

We have another hoard available of the early Roman coinage from the Second Punic War. These are the Greek denominations forming the first two-tier monetary system in the known world. Such hoards are rare today so the opportunities to obtain such specimens are becoming far and few between.
Prior to the introduction of the Roman denarius in about 211 BC, Rome’s silver coins were similar in weight and silver content to the staters (didrachmas) of Greece and Magna Grecia (southern Italy and Sicily). With the Second Punic War (218-200BC), the production of these silver coins greatly increased to cover the expenses as always with war. This demand for coinage was met with the extensive minting of didrachmas known as quadrigati named after the reverse picturing Jupiter driving a four-horse chariot known as the quadriga.

This post was published at Armstrong Economics on Oct 28, 2017.

28/10/17: Trade vs Growth or Trade & Growth?

Much has been written down recently about the dramatic slowdown in growth in global trade flows. For example, after rebounding post-Global Financial Crisis (global trade volumes fell 10.46% in 2009) in 2010-2011 (rising 12.52% and 7.1% respectively), trade volumes growth slowed to below 4% per annum in 2012-2016, with 2017 now projected to be the first year of above 4% growth in trade (4.16%).
This has prompted many analysts and academics to define the current recovery as being, effectively, trade-less growth (see, for example This is plainly false. In fact, growth in global trade volumes has outpaced growth in real GDP (based on market exchange rates) in every year since 2010, except for 2016. As the chart below clearly shows, the difference between the rate of trade volumes growth and the rate of real GDP growth remained positive in average terms:

This post was published at True Economics on Saturday, October 28, 2017.

What Could Pop The Everything Bubble?

As central bank policies are increasingly fingered by the mainstream as the source of soaring wealth-income inequality, policies supporting credit/asset bubbles will either be limited or cut off, and at that point all the credit/asset bubbles will pop.
I’ve long held that if a problem can be solved by creating $1 trillion out of thin air and buying a raft of assets with that $1 trillion, then central banks will solve the problem by creating the $1 trillion out of thin air – nothing could be easier. This is the lesson of the past eight years: if a problem can be solved by creating new money and buying assets, then central banks will solve that problem. Problem: stock market is declining. Solution: create new money and buy, buy, buy stock index funds. Problem solved! Market stops falling and quickly rebounds as ‘central banks have our backs.’
Problem: interest rates are inhibiting lending and growth. Solution: create a few trillion units of currency and buy enough sovereign bonds to drop interest rates to near-zero.
Problem: nobody’s left who can afford to buy the new nosebleed-priced flats that underpin China’s miracle-grow economy. Solution: create new currency, lend it to local government agencies who then buy the empty flats.
Problem: stagnant employment and deflation. Solution: create a trillion in new currency, buy a trillion in new government bonds that then fund infrastructure projects, i.e. bridges to nowhere.

This post was published at Charles Hugh Smith on SATURDAY, OCTOBER 28, 2017.

“What Happens When The Market Can No Longer Pretend”: Charting Today’s Minsky Moment Dynamics

Back in July, Deutsche Bank’s derivative strategist Aleksandar Kocic believed he had found the moment the market broke, which he defined as a terminal dislocation between market and economic policy uncertainty: as he wrote 4 months ago, it was some time in 2012 that markets “lost their capacity to deal with uncertainty.’

It was also some time in 2012 that traders and market participants realized central banks have not only taken over the market, but have no intention of ever leaving as the alternative is a crash that wipes out 8 years of artificial “wealth effect” creation and puts the very concept of fractional reserve and central banking in jeopardy.

This post was published at Zero Hedge on Oct 28, 2017.

UBS CEO On Brexit – “More And More Unlikely” It Will Move 1,000 Jobs Out Of London

With Brexit negotiations still at a delicate stage, here’s the first bit of good news for the City of London in some time…

As The Telegraph reports, the boss of Swiss bank UBS has said plans to move 1,000 jobs from London as a result of Brexit are now looking “more and more unlikely”.
Chief Executive Sergio Ermotti said the banking giant’s fear of losing a fifth of its 5,000-strong UK workforce in the wake of the vote to leave was now unlikely to materialise following some “regulatory and political clarification about what we need to do”. The bank joined some of its rivals in predicting a mass exodus from the City earlier this year over concerns that a so-called hard Brexit in March 2019 would mean thousands of UK-based firms reliant on ‘passports’ to service clients in the EU would lose that right overnight.

This post was published at Zero Hedge on Oct 28, 2017.

James Bovard: ‘How Facebook Censored Me’

Submitted by James Bovard via USAToday.com,
Facebook said my post’s image of a violent FBI raid ‘incorrectly triggered our automation tools’… But it wasn’t the first time an iconic image vanished…
Responding to Russian-funded political advertisements, Facebook chairman Mark Zuckerberg declared last month that ‘we will do our part to defend against nation states attempting to spread misinformation.’ But Facebook is effectively sowing disinformation by kowtowing to foreign regimes and censoring atrocities such as ethnic cleansing in Myanmar. In the name of repressing fake news and hate speech, Facebook is probably suppressing far more information than Americans realize.

This post was published at Zero Hedge on Oct 28, 2017.

Nobody’s Buying Hamptons Mega-Mansions Because ‘Small Is The New Big’

Any realtor worth their salt will tell you, when it comes to the home-buying habits of wealthy hedgies and bankers, gaudy McMansions and sprawling estates are so last season.
Or, as they say in Greenwich: ‘Small is the new big.”

Owners of large homes in tony Hamptons neighborhoods hoping to cash in on a frothy housing market before the inevitable rise in mortgage rates will be disappointed to learn that the trend of buyers favoring lower-priced homes continued in the third quarter, according to the latest Douglas Elliman Real-Estate Report. This left the high end of the market in a double-bind as supplies of new homes hit the market while sales tapered off…
Purchasers agreed to pay more than the asking price in 10 percent of deals for properties under $3.3 million — this quarter’s definition of ‘non-luxury’ homes, making up the bottom 90 percent of the market, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest share of transactions with bidding wars since the firms began tracking the data in the second quarter of 2016.

This post was published at Zero Hedge on Oct 27, 2017.

The secret to the current recovery is that American households are up to their eyeballs in debt once again! Consumer credit hits a record $3.7 trillion.

Do you notice more credit card offers hitting your mailbox? Are you noticing more ‘easy financing’ for purchasing a new car? Welcome to the new recovery where spending is being fueled by consumer credit. Once again people are spending beyond their means. In an economy driven by consumption you need to keep people spending and splurging to keep the machine moving. Yet this recovery is being driven by massive consumer debt. We now have record credit card debt, record student debt, and record auto debt. None of these sources of debt really builds wealth in the long run. And banks are once again going into the subprime trenches just to find consumers to lend to. The Great Recession was really the Great Credit Crisis and here we are going deep into debt again.
Consumer debt hits a record level
Consumer credit has now hit a record level at $3.7 trillion. This segment of credit is not really beneficial in building long-term wealth especially if you look at credit card debt or auto loans. This is simply spending future earnings today.
Take a look at consumer credit:

This post was published at MyBudget360 on Oct 27, 2017.

Catalan Leader Urges “Peaceful” Rebellion As Spain Takes Over Government

Update (0920ET): A Spanish government spokesman has responded to Puigdemont’s address, saying that “Spain will not comment on comments by Puigdemont who is out of a job.”
* * *
As we detailed earlier, in a pre-record message this morning, Catalan separtist leader Carles Puigdemont urged Catalans to peacefully oppose Spain’s formal takeover of the region’s affairs.
Puigdemont said the activation of article 155 of the Spanish Constitution was illegitimate and called on Catalans to show “patience, perseverance” and faith in the future, and urged “democratic opposition” against Spanish government orders to sack his administration and dismiss the regional parliament.
As The Spain Report notes, he announced he Catalans must “continue defending” their new republic “with a sense of civic responsibility,” adding “our will is to continue working to guarantee our democratic mandate”.

This post was published at Zero Hedge on Oct 28, 2017.

Harvey and the Auto Industry, Why ‘Flood Cars’ will be Everywhere, and When Can We Finally Buy Self-Driving Cars?

Wolf Richter with radio host Jim Goddard on This Week in Money, discussing post-hurricane new- and used-vehicle sales and how to deal with ‘flood cars’ that will be showing up everywhere for years to come. The development of self-driving cars has stirred up enormous activity, but when can we finally buy one, if ever, and what might it look like on the inside?


This post was published at Wolf Street by Wolf Richter ‘ Oct 28, 2017.

OxyContin Nation: Meet The Billionaire Family Who Helped Spark America’s Opiod Crisis

Unbeknownst to many, the Sackler Family, with assets of $13 billion, the nation’s 19th wealthiest family is one the top players in philanthropy. You can find the Sackler Gallery in the Smithsonian museum in Washington, D. C. or visit the Sackler wing at the Metropolitan Museum of Art in New York City. The Sackler’s even have a museum at Harvard, Guggenheim, and dozen of universities around the country. If it’s art – the Sackler family has it.
Participating in the art game takes money and a lot of it. So, where does the Sackler money come from?
According to Forbes, the ‘Sacklers continue to reap hundreds of millions of dollars in profits from the businesses in 2016 – some $700 million last year, by Forbes’ calculations – from an estimated $3 billion in Purdue Pharma revenues plus at least $1.5 billion in sales from their foreign companies’.
Forbes outlines a brief history lesson of how the Sackler family got started in the world of medicine-
The family fortune began in 1952 when three doctors – Arthur (d. 1987), Mortimer (d. 2010) and Raymond Sackler – purchased Purdue, then a small and struggling New York drug manufacturer. The company spent decades selling products like earwax remover and laxatives before moving into pain medications by the late 1980s. To create OxyContin, Purdue married oxycodone, a generic painkiller, with a time-release mechanism to combat abuse by spreading the drug’s effects over a half-day.

This post was published at Zero Hedge on Oct 28, 2017.

Doug Noland: Must Stop Digging

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
Amazon, Google, Microsoft, Intel and Draghi all handily beat expectations. Booming technology earnings confirm the degree to which Bubble Dynamics have become entrenched within the real economy. Draghi confirms that central bankers remain petrified by the thought of piercing Bubbles.
There is a prevailing view that Bubbles reflect asset price gains beyond what is justified by fundamental factors. I counter with the argument that the inflation of underlying fundamentals – revenues, earnings, cash-flow, margins, etc. – is a paramount facet of Bubble Dynamics (How abruptly did the trajectory of earnings reverse course in 2001 and 2009?).
With extremely low rates, loose corporate Credit Availability, large deficit spending, inflating asset prices and a glut of ‘money’ sloshing about, there is bountiful fodder for spending and corporate profits. And with technology one of the more beguiling avenues to employ the cash-flow bonanza – and tech start-ups, the cloud, AI, Internet of Things, robotic, cybersecurity, etc. white-hot right now – the Gargantuan Technology Oligopoly today luxuriates at the Bubble Core.

This post was published at Wall Street Examiner by Doug Noland ‘ October 28, 2017.

Rental Nation: Unique ‘Solution’ Emerges To Address Flood Of Off-Lease Vehicles…Lease Them Again

We’ve written frequently of late about the coming wave of off-lease vehicles that threatens to flood the used car market with excess supply, crush used car prices and simultaneously wreak havoc on the new car market as well.
As we recently noted (see: “Flood Of Off-Lease Vehicles” Set To Wreak Havoc On New Car Sales), the percentage of new car ‘sales’ moving off dealer lots via leases has nearly tripled since late 2009 when they hit a low of just over 10%. Over the past 6 years, new leases, as a percent of overall car sales, has soared courtesy of, among other things, low interest rates, stable/rising used car prices and a nation of rental-crazed citizens for whom monthly payment is the only metric used to evaluate a “good deal”…even though leasing a new vehicle is pretty much the worst ‘deal’ you can possibly find for a rapidly depreciating brand new asset like a car…but we digress.
Of course, what goes up must eventually come down. And all those leases signed on millions of brand new cars over the past several years are about to come off lease and flood the market with cheap, low-mileage used inventory. By the end of 2019, an estimated 12 million low-mileage vehicles are coming off leases inked during a 2014-2016 spurt in new auto sales, according to estimates by Atlanta-based auto auction firm Manheim and Reuters.

This post was published at Zero Hedge on Oct 27, 2017.

Strong Growth? Q3 GDP Only Shows How Weak 2017 Has Been

Baseball Hall of Famer Frank Robinson also had a long career as a manager after his playing days were done. He once said in that latter capacity that you have to have a short memory as a closer. Simple wisdom where it’s true, all that matters for that style of pitching is the very next out. You can forget about what just happened so as to give your full energy and concentration to the batter at the plate.
They also say in football (American football to our foreign readers) that one of the most sought after traits in a prospective cornerback is the same lack of recall. You are inevitably going to get beat one on one for a big play or touchdown, so all that matters is that you don’t let it bother you the next time you line up.
Selective memory works in sports because very often you don’t want the bad to start to affect the good, as can happen given that we are all human. The playing surfaces of whatever game leave no time for learning, that comes later after the final bell or whistle in the space before the next game.
It doesn’t really work so much in other disciplines where time is a much less impressive component. To ignore especially the big mistakes is making another one even bigger, compounding the problem in what can be a self-reinforcing cycle.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ October 27, 2017.