• Tag Archives Europe
  • This cryptocurrency website is selling for more money than Facebook’s

    What’s money worth if interest rates are negative?
    Interest rates, after all, are the ‘price’ of money.
    When we borrow money from a bank and pay interest on the loan, it means that the money we’re borrowing has value. That -capital- has value.
    Negative interest rates, on the other hand, suggest that capital is totally worthless.
    This isn’t a philosophical exercise. These are the times we’re living in.
    Despite a few tiny increases, interest rates worldwide are still near the lowest levels they’ve been in 5,000 years of human history.
    Bankrupt governments across Europe who are already in debt up to their eyeballs have issued trillions of euros worth of new debt with negative yields.
    And there have even been famous cases (also in Europe) in which bank depositors have had to PAY interest, while borrowers were BEING PAID to take out a mortgage.

    This post was published at Sovereign Man on August 9, 2017.

  • The Creepiest EU Initiative Yet: Registering Dissent As “Russian Propaganda” Under Soros’ Direction

    Russia is the favourite scapegoat for the Western establishment when it comes to its own failures. Ever since Brexit and Trump’s victory, the Western elite has regularly tried to link citizen discontent to ‘Russian disinformation’, ‘hackers’ or ‘trolls’, instead of looking at its own policies. While in the US this took the form of a witch hunt against the Trump administration, in the EU it has taken the form of a ‘proscription list’ of the media that are not enthusiastic enough with the idea of a conflict with the Eastern neighbour. Under the official purpose of countering ‘disinformation coming from Russia’, the EU External Action has created a ‘disinformation review’1)with weekly updates on ‘fake news’ and the websites that post them.
    The EUAS officially branded researchers and journalists as fraudulent, unpatriotic and dishonest without any notification. There is a small disclaimer on the list that states that ‘disinformation review cannot be considered an official EU position’. Yet it was created by the European Council, is part of the ‘diplomatic service’ of the EU, hence funded by it, uses its symbols and institutional addresses. So, it is part of the EU and yet does not represent its official position? The statement seems to have been made for the express purpose of dishonestly dismissing concerns raised by citizens.

    This post was published at Zero Hedge on Aug 9, 2017.

  • The Rise of Zombie Companies – And Why It Matters

    The Bank of International Settlements (BIS) has warned again of the collateral damages of extremely loose monetary policy. One of the biggest threats is the rise of ‘zombie companies.’ Since the ‘recovery’ started, zombie firms have increased from 7.5% to 10.5%. In Europe, Bof A estimates that about 9% of the largest companies could be categorized as ‘walking dead.’
    What is a zombie company? It is – in the BIS definition – a listed firm, with ten years or more of existence, where the ratio of EBIT (earnings before interest and taxes) relative to interest expense is lower than one. In essence, a company that merely survives due to the constant refinancing of its debt and, despite re-structuring and low rates, is still unable to cover its interest expense with operating profits, let alone repay the principal.
    This share of zombie firms can be perceived by some as ‘small.’ At the end of the day, 10.5% means that 89.5% are not zombies. But that analysis would be too complacent. According to Moody’s and Standard and Poor’s, debt repayment capacity has broadly weakened globally despite ultra-low rates and ample liquidity. Furthermore, the BIS only analyses listed zombie companies, but in the OECD 90% of the companies are SMEs (Small and Medium Enterprises), and a large proportion of these smaller non-listed companies, are still loss-making. In the Eurozone, the ECB estimates that around 30% of SMEs are still in the red and the figures are smaller, but not massively dissimilar in the US, estimated at 20%, and the UK, close to 25%.

    This post was published at Ludwig von Mises Institute on August 9, 2017.

  • Asian Metals Market Update: August-8-2017

    The real democratic side of USA is revealed as its senators have made mockery of the elected president by making Trump not able to do anything. Trump has been trying to make the world a peaceful place to live. American politicians bank on war to make a fortune. Investors know that USA is now a leaderless nation. This is the key reason why the US dollar has not gained despite a good US monthly employment numbers. Politically Eurozone is much stable than USA. American policies in Eastern Europe and its bias towards filling Europe with Islamic migrants will only increase physical demand for gold from the region.
    American companies are a loss in Russia.

    This post was published at GoldSeek on 8 August 2017.

  • This Hits the Wheezing Commercial Real Estate Bubble at Worst Possible Time

    The last big enthusiastic buyer, China, is leaving the party. Commercial real estate, such as office and apartment towers, in trophy cities in the US and Europe has been among the favorite items on the long and eclectic shopping lists of Chinese companies. At the forefront are the vast, immensely indebted, opaquely structured conglomerates HNA, Dalian Wanda, Anbang Insurance, and Fosun International. In terms of commercial real estate, the party kicked off seriously in 2013. Over the two years in the US alone, according to Morgan Stanley, cited by Bloomberg, Chinese firms have acquired $17 billion worth of commercial properties.
    In the second quarter in Manhattan, Chinese entities accounted for half of the commercial real estate purchases. This includes the $2.2 billion purchase in May of the 45-story office tower at 245 Park Avenue, the sixth largest transaction ever in Manhattan. At $1,282 per square foot, the price was also among the highest ever paid for this type of property.
    Most of HNA’s funding for this deal – one of its 30 major acquisitions since the beginning of 2016 – was borrowed from China’s state-owned banks. But HNA also borrowed $508 million from JPMorgan Chase, Natixis, Deutsche Bank, Barclays, and Societe Generale. This has been the hallmark for all Chinese acquirers: a lot of borrowing from China and some funding from offshore sources.

    This post was published at Wolf Street on Aug 8, 2017.

  • Indonesia Will Barter Coffee, Tea And Palm Oil For Russian Fighter Jets

    On Monday Russia warned that it would begin aggressively reducing its dependence on the US Dollar and US-based payment systems, and shortly after it confirmed just that when Indonesia announced that it will barter coffee, palm oil, tea and various other commodities in exchange for 11 Russian-made Su-35 fighter jets, calling U. S. and European sanctions against Russia “an opportunity to boost the Southeast Asian nation’s trade.”
    The Indonesian Ministry of Trade said that a memorandum of understanding for the barter was signed Aug. 4 in Moscow between Russia’s Rostec and PT. Perusahaan Perdagangan Indonesia, both state-owned companies. ‘This barter under the supervision of both governments hopefully will soon be realized through the exchange of 11 Sukhoi Su-35s and a number of Indonesian exports, starting from coffee and tea to palm oil and strategic defense products,’ Indonesian Trade Minister Enggartiasto Lukita said on Monday, as quoted by Reuters.

    This post was published at Zero Hedge on Aug 7, 2017.

  • Russia To Cut Dependence On U.S. Dollar, Payment Systems

    Russia’s Mir credit card to go European #SPIEF pic.twitter.com/BYMg99X2wC
    — SPIEF (@SPIEF) September 27, 2016

    Russia will speed up work on reducing its dependence on U. S. payment systems and the dollar as a settling currency in response to U. S. sanctions, Deputy Foreign Minister Sergei Ryabkov said on Monday.
    Quoted by Reuters, Ryabkov said that “we will of course intensify work related to import substitution, reduction of dependence on U. S. payment systems, on the dollar as a settling currency and so on. It is becoming a vital need.” The reason for that is that “the US is using its dominating role in the monetary and financial system to impose pressure on foreign business, including Russian companies.’

    This post was published at Zero Hedge on Aug 7, 2017.

  • Asian Metals Market Update: August-7-2017

    Till Wednesday it will be a technical trade for metals and energies as there are no big economic data from USA. Thereafter the CPI and PPI numbers if they rise at a fast pace can alter the interest rate hike expectations. Political news and political developments can cause a hara-kiri in metals as well as currency markets. The big answer which investors will be looking for is ‘has the US dollar bottomed out’. Every nation wants a weaker currency. Europeans will not be happy if their currency continues to gain. Comments and some mild downgrade of growth targets will be just enough to ensure that euro falls.
    Rising global stock markets can give the much needed impetus to higher bullion prices.

    This post was published at GoldSeek on 7 August 2017.

  • SocGen: Stock Valuations Remain “Remarkably High” Yet Nobody Cares

    As discussed earlier, with most traders taking the next 1-2 weeks off for vacation, global markets remain on auto pilot, hitting new all time highs overnight driven by strength out of China where reflationary spirits have returned after industrial commodities surged on speculation that the PBOC’s recent attempt to contain excess liquiduity have failed (explaining the 3 consecutive days of reverse repo drains). Meanwhile, as SocGen’s Andrew Lapthorne writes, global equity markets continue to move higher, with both MSCI Developed and Emerging adding 0.4% last week. DM Is now up 12.4% in 2107 and EM an impressive 23.8% higher.
    Most markets saw gains last week, with Europe playing catch-up, having tracked down or sideways for the last few months. In local currency terms, the Eurozone is still in negative territory over the last few months, but this is more than made up for by the strength of the currency, with the MSCI Eurozone index up 5% in USD over the same timeframe. That said there were a few soft patches. The Nasdaq was down, as was the S&P 500 on an equal-weighted basis. The Russell 2000 dropped 1.2%. Japanese small cap growth stocks also faltered with the volatile Mothers index falling 3.9%.
    Will the euphoria continue? For the answer look at the Euro. As SocGen’s Andrew Lapthorne writes, earnings momentum appears increasingly polarised, “with the US enjoying its usual reporting season bounce on the back of analyst upgrades, and both Pacific ex Japan and Japan seeing sharp improvement in analyst optimism.” However both Europe ex UK and Emerging Markets, the standout US dollar performers this year, are yet to see a pickup in upgrades, with downgrades remaining more common. A big reason for this is the recent surge in the Euro, which is fast approaching 1.20, the level beyond which analysts have said any further gains will have an adverse impact on earnings.
    What about fundamentals? Here there is far less confusion, and as Lapthorne writes, “stock valuations remain remarkably high, but as valuations alone tell us little or nothing in terms of market timing, it seems valuation concerns are increasingly ignored.”

    This post was published at Zero Hedge on Aug 7, 2017.

  • World Stocks Hit Another All-Time High As Crude, Treasurys Drop

    World stocks hit a new record high on Monday, as U. S. index futures followed Asian stocks on better-than-expected company earnings and strong US jobs data deflected attention from the rising geopolitical tension over
    North Korea’s nuclear program. European stocks traded near session lows while Crude oil prices fall. The Bloomberg Dollar Spot Index was little changed ahead of speeches by the Fed’s James Bullard and Neel Kashkari later Monday. Yields on U. S. and German Bunds rose off one-month lows hit at the end of last week, while the yield on China’s 10-year sovereign bonds climbs 3 bps to a two-month high of 3.67%, after Friday’s better-than-expected jobs data brightened investors’ outlook for the U. S. economy.
    The Dow Jones recorded its eighth consecutive record high on Friday, with MSCI’s broadest index of Asia-Pacific shares outside Japan adding 0.5% on Monday. Helping global stocks hit record highs, of the nearly 1000 companies in the MSCI world index that have reported, 67% have beaten expectations, according to Reuters data. Of the MSCI Europe companies having reported, 61% have either met or beat expectations. But focusing on industrial firms – of which many depend on exports, and are sensitive to a stronger euro – the beat ratio is just 37%. Also the U. S. dollar dipped slightly but held on to much of Friday’s gains – its biggest daily rise this year – after data showed the United States created more jobs than forecast last month. As a result, the MSCI World index rose above a peak breached late last month, setting a new all-time high of 480.09 on Monday.

    This post was published at Zero Hedge on Aug 7, 2017.

  • FX Week Ahead Preview: Negative USD Sentiment Tamed For Now

    We got some encouraging signs from the latest US payrolls report on Friday, with the earnings component edging up to 0.3% on the month, to lift the year on year rate to 2.5%. Even so, this is one month’s set of data, and is unlikely to convince USD bears that the rate path espoused by the Fed is still firmly ‘on track’, and in the wake of the numbers, the odds of another 25bp hike by end of year remain close to 50/50. It does however mean that the one way traffic can ease off a little, so whatever your thoughts on the economy further down the line, we can expect to see a little more ebb and flow in the price action for the majors, with the USD index surviving a test on the key support levels into 92.00.
    On the data releases next week, we get a little more on the jobs market as Monday offers up the CB employment trends index, along with Fed Labour Market conditions. JOLTS on Tuesday is also one to watch out for, but non farm productivity on Wednesday could add a little more insight on wage growth if this improves. Fed chair Yellen (amongst others) often cites the tight correlation between productivity and wages, so we have been keeping an eye on this on. Even so, the algos are more likely to react to the top tier numbers, and on Friday, the Jul inflation stats, with consensus looking for the headline year on year rate to pick up a few notches from the 1.6% print for Jun. The core rate is expected to hold 1.7%.
    Underlining the turnaround in the greenback was the sharp reversal in EUR/USD, failing to reclaim the 1.1900 level and eventually getting dragged back under 1.1800 to test the low 1.1700’s late Friday. At these levels, buyers stepped in ahead of the 1.1710-15 ‘breakout point’ which suggests to some that we are about to establish a new trading range. This may be a little premature and simplistic, and we would not rule out a deeper retracement – as we expect to see elsewhere to varying degrees – but we can assume 1.2000 will be a tough ask at this stage unless we get fresh European data to turn the tide again.

    This post was published at Zero Hedge on Aug 6, 2017.

  • Morgan Stanley Asks At What Point Will EURUSD “Breathlessness Turn Into Outright Altitude Sickness”

    In Morgan Stanley’s “Sunday Start” note, the bank’s chief European economist, Elga Bartsch, looks at the recently surging EUR, where net spec positioning remains near the most bullish level in the past 6 years…

    … notes that according to the bank’s currency expects, the “bull case of 1.28 for EURUSD looks increasingly likely”, but wonder “at what point a bit of breathlessness could turn into outright altitude sickness.”
    Here is MS’ latest take on “what’s next in global macro” with a focus on the common currency.
    Climbing Mountains or Walking Hills
    You don’t have to climb one of the mountain peaks in the Alps to feel a bit breathless this summer. Watching the euro climb further might already suffice if you are an investor. And we might not be near the peak yet. According to our currency experts, their bull case of 1.28 for EURUSD looks increasingly likely, even with Friday’s relatively solid US employment report. Investors will therefore be wondering at what point a bit of breathlessness could turn into outright altitude sickness. For now, the ECB seems unconcerned about the strength of the euro, largely because it is reflecting stronger economic fundamentals and better prospects for political reforms. While it is clear that the euro area economy has shifted into higher gear, it remains to be seen whether reforms will able to make a quantum leap.

    This post was published at Zero Hedge on Aug 6, 2017.

  • Gold Consolidates On 2.5% Gain In July After Dollar Has 5th Monthly Decline

    – Gold consolidates on 2.5% gain in July as the dollar has fifth monthly decline
    – Trump administration and vicious ‘civil war’ politics casting shadow over America and impacting dollar
    – All eyes on non farm payrolls today for further signs of weakness in U. S. economy
    – Gold recovers from 1.7% decline in June as dollar falls
    – Gold outperforms stocks and benchmark S&P 500 YTD
    – Gold gains 10.8% versus 10.6% gain for S&P – led by frothy tech sector (see performance table)
    – Gold outperforms stocks globally – Euro Stoxx 50 up 5.7% ytd, FTSE up 4.8% and Nikkei up 4.5%
    – Gold’s technicals increasingly positive; now trading above its 50-day & 200-day moving averages & looks set to target $1,300 again
    Gold held steady today in Asian and European trading and was flat for the week, consolidating near the $1,270 per ounce level and the 2.5% gain seen in July.
    It remains close to a seven-week high hit this week, as the dollar remains weak and vulnerable near multi-month lows after five consecutive months of declines.
    The dollar index, which tracks the greenback against a basket of six major peers, is languishing near 15-month lows hit earlier this week.
    ‘All eyes’ are again on the monthly U. S. nonfarm payrolls data due today amid continuing very high levels of U. S. and global political uncertainty.

    This post was published at Gold Core on August 4, 2017.

  • Market Report: A week of consolidation

    Gold and silver consolidated recent rises this week. On closing prices, gold barely moved from last Friday’s close, standing at $1269.50 in early European trade this morning. Intraday, prices were range-bound, capped in the low $1270s and underwritten in the low $1260s. The bias seems to be one of trying to break out, in which case an assault on the $1290-1300 level is in prospect.

    This post was published at GoldMoney on August 04, 2017.

  • 2017 – The Year Without an Arctic Summer?

    They are calling this in the Year without an Arctic Summer. The Greenland Ice Sheet is gaining near record amounts of ice this year. Very little melting has occurred this summer, which is about to start coming to an end. Europe has been unusually cool once again after last year ice wiped out crops all the way down into Spain creating shortages of vegetables. With the sun activity declining and the North Pole reversing direction in 2000 heading toward Europe rather than Canada, things are not exactly supporting the Global Warming crowd. Since 1860, the magnetic pole shift has more than doubled every 50 years. That is rather significant. In geological terms, this is extremely rapid and could be the prelude to a pole shift nobody understands.
    Still, during the past 150 years, the pole shift has been in the same direction. The most astonishing fact is that since 2000, the magnetic North Pole has shifted nearly half of the total distance of the past 50 years! In other words, the pole shift has apparently picked up speed so much so that they have had to re-calibrate airports and their GPS signals so planes can still find them. Europe is getting colder. Friends in Scotland have relayed that had a spectacular summer this year – it lasted a whole two days! The earth is changing rapidly. We are overdue for a major pole shift (see Maya Report). The poles flip on the Sun every 11 years. We have no idea what the net result will be on Earth since the last flip was well before recorded history.

    This post was published at Armstrong Economics on Aug 6, 2017.

  • Futures Flat As Payrolls Loom, Dollar Slide Continues

    It took stocks only a few minute to “price in” the latest political shock out of Washington, and as of this morning Emini futures no longer care that Mueller has a grand jury, trading 0.08% in the green with European stocks and Asian shares all little changed as investors await the looming July jobs report, which is expected to show a slowdown in hiring from 222K to 180K but will have little impact on either the Fed’s thinking or the market.
    Stocks, gold and most metals headed for a fourth week of gains on Friday, as fresh political woes for U. S. President Donald Trump and the prospect of a trade war with China kept the dollar depressed ahead of payrolls. The Bloomberg Dollar spot index inched lower for a third day, hovering near the weakest in 15 months, while cable rose to $1.3154, the euro hit a fresh two-and-a-half year high against the dollar and oil retreated.
    Global stocks were just barely in the green this morning with the MSCI All-Country World Index rising less than 0.05%. In key overnight macro moves, the Aussie dollar gained against the greenback despite RBA warnings about currency’s strength, while the USD/JPY fell as much as 0.2% to 109.85, the weakest since June 15, before paring decline to 110.03.

    This post was published at Zero Hedge on Aug 4, 2017.

  • Euro Junk Bonds and ‘Reverse Yankees’ Go Nuts

    The most obviously lopsided deals. The ECB’s efforts to buy corporate bonds as part of its stupendous asset buying binge has not only pushed a number of government bond yields below zero, where investors are guaranteed a loss if they hold the bond to maturity, but it has also done a number – perhaps even a bigger one – on the euro junk-bond market.
    It has totally gone nuts. Or rather the humans and algorithms that make the buying decisions have gone nuts. The average junk bond yield has dropped to an all-time record low of 2.42%.
    Let that sink in for a moment. This average is based on a basket of below investment-grade corporate bonds denominated in euros. Often enough, the issuers are junk-rated American companies with European subsidiaries – in which case these bonds are called ‘reverse Yankees.’
    These bonds include the riskiest bonds out there. Plenty of them will default, and losses will be painful, and investors – these humans and algos – know this too. This is not a secret. That’s why these bonds are rated below investment grade. But these buyers don’t mind. They’re institutional investors managing other people’s money, and they don’t need to mind.

    This post was published at Wolf Street on Aug 4, 2017.

  • Gold Coins and Bars See Demand Rise of 11% in H2, 2017

    – Gold coins, bars see demand rise of 11% in H2, 2017 to 532 tonnes according to WGC Gold Demand Trends
    – Gold investment demand strong in China, India & Turkey
    – Demand in Turkey surges on double digit inflation
    – Total gold demand declines in Q2 on slower U. S. ETF inflows
    – Gold held in ETFs in Europe reached all time high of 978t
    – U. S. ETF inflows slowed from last year’s record
    – Central banks continue to buy – 94t of declared purchases
    – Turkey joined Kazakhstan & Russia in buying gold
    – Well balanced market: ETF inflows continue and jewellery, technology and bar & coin demand up
    – Important to note this is all official, transparent and recorded demand. There is demand and flows of gold that cannot be and are not recorded – especially into the Middle East, India, Russia and of course China

    This post was published at Gold Core on August 3, 2017.

  • Meet Soccer’s $600 Million Man (Or What Qatar Is Doing While Its Economy Collapses)

    Brazilian superstar soccer player Neymar (yes one name… on the right in the image below), just smashed all previous records for crazy spending by European football soccer teams.
    Dwarfing the money in America’s NFL, NBA, or MLB, the 25-year-old forward has agreed to join French side Paris St. Germain (PSG) for a stunning EUR222 million ($250 million).
    As Statista’s Martin Armstrong notes, the previous record, set last season when Manchester United bought midfielder Paul Pogba from Juventus, was an already astronomical 105 million.

    This post was published at Zero Hedge on Aug 4, 2017.

  • USD: Setting Up a Rip-Your-Face-Off Rally or in Freefall?

    There’s not much to encourage Bulls in the daily chart of the USD.
    The U. S. dollar’s relentless decline this year poses a question: is the USD setting up for a monster rally, or is it in a slow-motion crash? Opinions vary, of course, as to the possible reasons for the massive decline: European growth is better than expected, Trump’s presidency is going nowhere, the Federal Reserve won’t be raising rates, and so on.
    The nice thing about charts is they summarize all these inputs into a snapshot. So let’s take a look at the daily and weekly charts of the USD.

    This post was published at Charles Hugh Smith on Thursday, August 03, 2017.