• Tag Archives Great Britain
  • Huge Hub Explosion Sparks Surge In UK NatGas Prices

    It has been a tough week already for those that heat their homes in Britain (and those that trade Natural Gas). Following extreme weather warnings and the forties pipeline crack shutdown, an explosion at one of the Europe’s biggest gas hubs further tightened supplies sending gas futures prices up by the most in 8 years.
    As Bloomberg reports, gas futures rose the most in more than eight years in Britain, which already is struggling to absorb the impact of a crack that shut down a North Sea pipeline network. After snow fell for two days in London, cooler-than-normal temperatures spread from the Alps to Scandinavia, raising demand for heating fuels.


    This post was published at Zero Hedge on Dec 12, 2017.


  • Bitcoin Mania Shows The World Financial System Is a Con

    The hidden agenda in the so-called tax reform bill is to act as stop-gap quantitative easing to plug the ‘liquidity’ hole that is opening up as the Federal Reserve (America’s central bank) makes a few gestures to winding down its balance sheet and ‘normalizing’ interest rates. Thus, the aim of the tax bill is to prop up capital markets, and the apprehension of this lately is what keeps stocks making daily record highs. Okay, sorry, a lot to unpack there.
    Primer: quantitative easing (QE) is a the Federal Reserve’s weasel phrase for its practice of just creating ‘money’ out of thin air, which it uses to buy US Treasury bonds (and other stuff). The Fed buys this stuff through intermediary Too Big To Fail banks which allows them to cream off a cut and, theoretically, pump the ‘money’ into the economy. This ‘money’ is the ‘liquidity.’ As it happens, most of that money ends up in the capital markets. Stocks go up and up and bond yields stay ultra low with bond prices ultra high. What remains on the balance sheets are a shit-load of IOUs.
    The third round of QE was officially halted in 2014 in the USA. However, the world’s other main central banks acted in rotation – passing the baton of QE, like in a relay race – so that when the US slacked off, Japan, Britain, the European Central Bank, and the Bank of China, took over money-printing duties. And because money flies easily around the world via digital banking, a lot of that foreign money ended up in ‘sure-thing’ US capital markets (as well as their own ). Mega-tons of ‘money’ were created out of thin air around the world since the near-collapse of the system in 2008.

    This post was published at Wall Street Examiner on December 8, 2017.


  • Bitcoin’s ‘Message’ & Tax Reform’s ‘Hidden Agenda’

    Authored by James Howard Kunstler via Kunstler.com,
    The hidden agenda in the so-called tax reform bill is to act as stop-gap quantitative easing to plug the ‘liquidity’ hole that is opening up as the Federal Reserve (America’s central bank) makes a few gestures to winding down its balance sheet and ‘normalizing’ interest rates. Thus, the aim of the tax bill is to prop up capital markets, and the apprehension of this lately is what keeps stocks making daily record highs. Okay, sorry, a lot to unpack there.
    Primer: quantitative easing (QE) is a the Federal Reserve’s weasel phrase for its practice of just creating ‘money’ out of thin air, which it uses to buy US Treasury bonds (and other stuff). The Fed buys this stuff through intermediary Too Big To Fail banks which allows them to cream off a cut and, theoretically, pump the ‘money’ into the economy. This ‘money’ is the ‘liquidity.’ As it happens, most of that money ends up in the capital markets. Stocks go up and up and bond yields stay ultra low with bond prices ultra high. What remains on the balance sheets are a shit-load of IOUs.
    The third round of QE was officially halted in 2014 in the USA. However, the world’s other main central banks acted in rotation – passing the baton of QE, like in a relay race – so that when the US slacked off, Japan, Britain, the European Central Bank, and the Bank of China, took over money-printing duties. And because money flies easily around the world via digital banking, a lot of that foreign money ended up in ‘sure-thing’ US capital markets (as well as their own ). Mega-tons of ‘money’ were created out of thin air around the world since the near-collapse of the system in 2008.

    This post was published at Zero Hedge on Dec 8, 2017.


  • US Futures, Global Shares, Dollar All Jump On Brexit, Basel News, Averted US Shutdown; Payrolls Loom

    U. S. equity index futures have bounced on the last day of the week, along with European and Asian shares, oil and the dollar following overnight news that the UK and EU have reached a successful conclusion on Phase 1 of Brexit negotiations, that Congress averted a government shutdown with another can-kicking 2 week measure until December 22, after strong Chinese trade data and an upward revision to Japanese GDP, and ahead of the November nonfarm payrolls data which is expected to cement the December Fed rate hike.
    Setting the bullish mood this morning was Christmas coming early for Theresa May, who managed to forge an agreement – if only for the time being – with the EU in the early hours of Friday morning to pave way for phase 2, with talks set to move to trade with support being voiced by Senior Brexiteers, Gove and Johnson. In reaction to this, GBP initially hit a 6-month high, however once the agreement had been confirmed, the pound saw a “buy the rumour sell the news” price action, while gilts were met with selling pressreure with the price making a firm move below 124.00.
    Also after the close on Thursday, the House voted 235-193 and Senate voted 81-14 to pass the stopgap spending measure which will avoid a government shutdown and fund government through to Dec. 22nd, kicking the can on and averting a government shutdown for another two weeks.
    European stocks advance in a broad rally amid optimism over a newly-struck deal between Britain and the European Union to unlock divorce negotiations and proceed to discussing a future trade deal. The Stoxx Europe 600 Index rises 0.7%, with the index heading for a weekly gain of 1.3%. Banks advance the most, up for a second day, as the sector emerged relatively unscathed from global regulators’ final batch of Basel III post-crisis capital rules, with few lenders needing to raise major new funds. Miners are also among the best indusreptry group performers, following copper prices higher. The FTSE 100 is trailing other European indexes, trading little changed, as the pound climb.

    This post was published at Zero Hedge on Dec 8, 2017.


  • BREXIT in Jeopardy?

    The top story in Britain is the collapse of BREXIT negotiations thanks to the stupidity of Northern Ireland. If Northern Ireland wants to remain inside the EU, we already have Scotland saying they would want the same deal and the Mayor of London adds his two-pence to the issue think he will save the City of London financial system. Of course, none one of these people understands the first thing about economics no less they are surrendering power to Brussels. The Brits have always come in dead last in everything inside the EU. BREXIT was the only thing that would save Britain of it too will be dragged under by the failure of the Euro.
    Armstrong Economics

    This post was published at Armstrong Economics on Dec 5, 2017.


  • The Corrupt Origins of Central Banking

    Central banking has been a corrupt, mercantilist scheme and an engine of corporate welfare from its very beginning in the late 18th century. The first central bank, the Bank of North America, was “driven through the Continental Congress by [congressman and financier] Robert Morris in the Spring of 1781,” wrote Murray Rothbard in The Mystery of Banking (p. 191). The Philadelphia businessman Morris had been a defense contractor during the Revolutionary War who “siphoned off millions from the public treasury into contracts to his own … firm and to those of his associates.” He was also “leader of the powerful Nationalist forces” in the new country.
    The main objective of the Nationalists, who were also known as Federalists, was essentially to establish an American version of the British mercantilist system, the very system that the Revolution had been fought against. Indeed, it was this system that the ancestors of the Revolutionaries had fled from when they came to America. As Rothbard explained, their aim was
    To reimpose in the new United States a system of mercantilism and big government similar to that in Great Britain, against which the colonists had rebelled. The object was to have a strong central government, particularly a strong president or king as chief executive, built up by high taxes and heavy public debt. The strong government was to impose high tariffs to subsidize domestic manufacturers, develop a big navy to open up and subsidize foreign markets for American exports, and launch a massive system of internal public works. In short, the United States was to have a British system without Great Britain. (p. 192)

    This post was published at Ludwig von Mises Institute on Dec 4, 2017.


  • Cable Soars After UK, Ireland Agree On Brexit Border Deal

    As several sellside desks have summarized, today will be a binary one for GBP: either deal or no deal. And following an early swoon in cable after speculation rose that a deal would be elusive, the pound soared above 1.35 following a report that EU chief brexit negotiator Barnier told MEPs that a breakthrough is likely today. This was confirmed moments ago by the FT which said that “Britain is heading for a breakthrough on Brexit talks after reaching a compromise with Ireland on the border between the Republic and Northern Ireland, the issue that threatened to derail the negotiations.”
    The draft refers to maintaining ‘regulatory alignment’ between Northern Ireland and the Republic after Brexit – a form of words that, according to a senior official involved in the talks, appears to meet Dublin’s deep concerns about a possible hard border on the island and has not raised objections in London. The wording is more comfortable for Britain than previous draft formulations that insisted on ‘no regulatory divergence’.
    The BBC confirmed as much after its political editor Laure Kuenssberg said that ‘May and Juncker about to appear together – with a deal seeming to be on the table.”

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


  • Trump Sparks Outrage In UK With “Truculent Tweet” To Theresa May After Retweeting Far-Right Videos

    .@Theresa_May, don’t focus on me, focus on the destructive Radical Islamic Terrorism that is taking place within the United Kingdom. We are doing just fine!
    — Donald J. Trump (@realDonaldTrump) November 30, 2017

    President Trump sparked outrage among Britain’s political establishment on Thursday with a sharp rebuke on Twitter of Prime Minister Theresa May on Twitter after she criticized him for retweeting British far-right anti-Islam videos. Following Trump’s condemnation by British politicians who lashed out at the US president for sharing videos originally posted by a leader of a British far-right fringe group, in an unprecedented attack on Theresa May, Trump replied with what Reuters dubbed an “unrepentant message”:
    ‘Theresa @theresamay, don’t focus on me, focus on the destructive Radical Islamic Terrorism that is taking place within the United Kingdom. We are doing just fine,’ he tweeted.

    This post was published at Zero Hedge on Nov 30, 2017.


  • Pound Slides, Then Rebounds, After Hammond Reveals Sharp Cuts To UK GDP Forecast

    Update: after the GBP initially dropped on the lower GDP forecasts, it has since rallied after Hammond finished speaking , in what Citi said was a “relief rally” as there were no “banana skins and government safe. Relief trade here.”
    This was a risk event – while Budget Announcements are normally quite quiet affairs in FX, the government is so weak that this could have been a banana skin. Fortunately, that was a good budget in political terms, and exactly what May needed. Economically speaking, the downgrade in GDP forecasts will attract some attention, but they were broadly expected, and Hammond’s big spending on the national healthcare and on housing will probably grab the headlines tonight (the rabbit-out-of-the-hat moment was the abolition of stamp duty for first-time home buyers below GBP300k). There were also extra funds for Brexit preparations and a positive tone about the process. May’s government will be thankful, and Chancellor should be safe.
    Earlier:
    The pound dropped, sliding to session lows, after UK chancellor Philip Hammond revealed a sharp downgrade (more than expected) to Britain’s economic forecasts during the presentation of the UK Budget, underlining the government’s challenge in transforming its political prospects and boosting growth as the country prepares for Brexit.
    U. K. FORECASTS 2017 GDP GROWTH 1.5% (VS 2% in March) U. K. FORECASTS 2018 GDP GROWTH 1.4% (VS 1.6% in March) U. K. FORECASTS 2019 GDP GROWTH 1.3% (VS 1.7% in March) U. K. FORECASTS 2020 GDP GROWTH 1.3% (VS 1.9% in March)

    This post was published at Zero Hedge on Nov 22, 2017.


  • UK Cabinet Poised To Increase Brexit Divorce Payment By Another 20 Billion Euros

    Theresa’s May’s government is poised to concede an improved Brexit settlement offer to gain EU approval to move the negotiations on to the next stage.
    May reportedly has the backing of senior ministers ahead of a critical cabinet meeting on Monday afternoon. The list of senior ministers is thought to include chancellor, Philip Hammond, Brexit secretary, David Davis, environment secretary, Michael Gove and weakened foreign secretary, Boris Johnson, who famously said in July that the EU could ‘go whistle’ over a divorce settlement. Hammond said at the weekend ‘we’ve always been clear it won’t be easy to work out that number, but whatever is due, we will pay’. Press reports suggest that the UK will formally offer about 40 billion Euros, versus the previous 20 billion. The news caused Sterling to rise more than half a percent to a two and a half week high of 1.3272, its strongest level since 2 November 2017. According to Bloomberg.
    The U. K. could be about to improve its financial offer to the European Union ahead of a crucial meeting of the bloc’s leaders in December. Members of Prime Minister Theresa May’s divided cabinet will consider Britain’s divorce from the EU at a meeting Monday afternoon of the Brexit sub-committee that could be key to unlocking the most controversial matter in the negotiations — money. Britain is ‘on the brink of making some serious movement forward’ and starting to break the ‘logjam,’ Chancellor of the Exchequer Philip Hammond told the BBC on Sunday. While Hammond is among the most pro-European members of cabinet, his suggestion follows Brexit Secretary David Davis’s hint from Berlin on Friday that more details on a financial settlement would be presented within weeks. With businesses clamoring for clarity and the departure just 16 months away, pressure is mounting to break the impasse.

    This post was published at Zero Hedge on Nov 20, 2017.


  • Want Widespread Prosperity? Radically Lower Costs

    As long as this is business as usual, it’s impossible to slash costs and boost widespread prosperity.
    It’s easy to go down the wormhole of complexity when it comes to figuring out why our economy is stagnating for the bottom 80% of households. But it’s actually not that complicated: the primary driver of stagnation, decline of small business start-ups, etc. is costs are skyrocketing to the point of unaffordability.
    As I have pointed out many times, history is unambiguous regarding the economic foundations of widespread prosperity: the core ingredients are:
    1. Low inflation, a.k.a. stable, sound money
    2. Social mobility (a meritocracy that enables achievers and entrepreneurs to climb out of impoverished beginnings)
    3. Relatively free trade in products, currencies, ideas and innovations
    4. A state (government) that competently manages tax collection, maintains roadways and harbors, secures borders and trade routes, etc.
    Simply put, When costs are cheap and trade is abundant, prosperity is widely distributed. Once costs rise, trade declines and living standards stagnate. Poverty and unrest rise.
    These foundations characterize stable economies with widely distributed prosperity across time and geography, from China’s Tang Dynasty to the Roman Republic to the Byzantine Empire to 19th century Great Britain.

    This post was published at Charles Hugh Smith on NOVEMBER 19, 2017.


  • The Hunt for Taxes Destroying Healthcare in Britain

    The Hunt for Taxes is now creating a crisis in healthcare in Britain. The UK government is gearing up for a massive tax clampdown targeting private sector contractors. The UK Treasury estimates in its budget that this taxing of private contractors in healthcare will create 185m in new taxes for the year 2017/18. This is known as the IR35 regime, which will apply to hundreds of thousands of freelancers outside the public sector.
    At the core of this is the issue where someone who is incorporated pays less tax and national insurance than an employee on the same income working freelance under contract. Many suspects that this is just a test run and the government will extend the tax increases to the private sector in a year.

    This post was published at Armstrong Economics on Nov 18, 2017.


  • GATES, BUFFETT, AND BEZOS ARE AS RICH AS THE BOTTOM HALF OF AMERICA

    Microsoft founder Bill Gates, Amazon CEO Jeff Bezos, and business magnate Warren Buffett – the three richest people in the world – are as wealthy as the bottom half of the U. S. population combined, according to a report from the Institute for Policy Studies.
    The poorest 50 percent of America amounts to roughly 160 million people or 63 million households.
    America’s top 25 billionaires has as much wealth as 56 percent of the population, equivalent to 178 million people or 70 million households, according to the Institute for Policy Studies’ report.
    The 400 richest people in the U. S. have a combined wealth of $2.68 trillion and collectively have more than the gross domestic product of Britain, the study found. Furthermore, that group owns more wealth than the bottom 64 percent of the U. S. population (240 million people or 80 million households). This is more people than Canada and Mexico have combined.

    This post was published at The Daily Sheeple on NOVEMBER 9, 2017.


  • UK’s National Health Service Moves to Cut Healthcare for Smokers and the Obese

    A core tenant of the pledge taken by all physicians is their promise first and foremost to do no harm. A physician’s vow to care for patients in a manner which does not cause physical, mental, or emotional harm has guided treatment decisions since the days of Hippocrates. Recently, however, the National Health Service, known as the NHS, Great Britain’s socialized medical system, has seemingly trumped this aspect of the physician’s oath with a more pressing consideration: Do not waste limited resources.
    The NHS has recently released treatment guidelines stating that patients who are obese or who smoke will be banned from receiving ‘non-urgent’ surgeries unless they first lose weight or quit smoking. While the NHS claims the new guidelines will increase the level of personal responsibility taken by patients, the healthcare bureaucrats behind this rule also acknowledge that it will help to free up limited healthcare resources.
    Any medical professional knows that it is in a patient’s best interest to be physically prepared for a surgical procedure, which may mean stopping smoking or losing weight. But don’t be fooled – allocation of limited healthcare resources is the real driver of the NHS’s decision.
    As a government-run healthcare system, the NHS faces a squeeze on resources from all fronts. First, the demand for healthcare in the U. K. is increasing due to an aging population and an increase in long-term medical conditions. Next, funding for large, state-run social programs like healthcare continue to shrink. Finally, the rate of primary-care physicians entering the system has not kept pace with demand, thus reducing patients’ access to first-line medical providers.

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


  • Banks Warn London Facing Brexit “Point Of No Return”

    During his trip to London this week, US Commerce Secretary, Wilbur Ross, wasn’t only defending revelations in the Paradise Papers that he’d invested in a shipping company with ties to the Putin family. He also attended a ‘closed-door meeting’ with executives from JPMorgan, Goldman, HSBC and other banks. The meeting took place over lunch in the exclusive St James’s District (hedge fund land these days) at Wiltons restaurant. Wiltons, if you’re not familiar with it, started as an oyster stand in 1742 before developing a clientele of English aristocrats and foreign dignitaries and latterly, bankers. Ian Fleming, creator of the James Bond novels and bon vivant, listed it as one of his top 10 restaurants in the 1950s.
    During lunch, the banks warned Ross that time is running out for the UK government. The failure to provide clarity on Brexit means that they will be forced to start moving jobs out of London. According to the FT:
    A group of large financial institutions with big London operations, led by Wall Street’s pre-eminent banks, have told the US commerce secretary that Britain’s unstable government and slow progress in Brexit planning may force them to start moving thousands of jobs out of City in the near future. The warnings came on Friday during a closed-door meeting between executives from the banks, which included JPMorgan Chase, Goldman Sachs and HSBC, and Wilbur Ross during the US commerce secretary’s visit to London, according to people briefed on the discussions.

    This post was published at Zero Hedge on Nov 8, 2017.


  • The Brexit chicken game

    At last, there are signs a sense of reality is dawning on the EU’s negotiators about the futility of trying to force the UK to agree to a divorce settlement before talking about trade. However, there are still vestiges of a hope that Britain won’t leave the EU after all. Donald Tusk, the current European Council President, indicated it was still an option as recently as this week, but these hopes are wishful thinking.
    It has taken thinly-veiled threats from the UK to leave without a deal, unless actual trade talks commence by next month. You can be certain the point has been made more forcefully to EU leaders in private, as well as at the negotiating table, than admitted in public. The EU’s problem is Brussels desperately needs Britain’s annual net contribution of 8bn, which is almost the entire annual cost of running the Brussels establishment. Brexit is nothing short of a disaster for the EU’s finances, and the EU is desperate for Britain’s money. Therefore, negotiations from the EU’s side have been frozen and unable to move onto the subject of trade. Impasse. A game of chicken, to be lost by the first to panic.
    The British negotiators have deliberately presented themselves as willing to be helpful. They have insisted Britain will meet her legal requirements, though they must be itemised and justified. And that will not include funding the broader EU budget, amounting to 238bn on commitments incurred but not paid for, which is the basis of Brussels’ claim on Britain. Nor will it fund Brussel’s own budget shortfall, which is most likely where any money paid over will go first.

    This post was published at GoldMoney By Alasdair Macleod.


  • 10 Years After: Bank of England Raises Interest Rate for First Time in More Than Decade (Goin’ Home)

    This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
    (Bloomberg) – Bank of England policy makers raised interest rates for the first time in a decade, yet expressed concern for Britain’s Brexit-dented economy by indicating that another increase isn’t imminent.
    Led by Governor Mark Carney, the Monetary Policy Committee voted 7-2 on Thursday to increase the benchmark rate to 0.5 percent from 0.25 percent. The minutes of their meeting underscored worries that the economy is fragile as the 2019 split with the European Union nears.
    Crucially, policy makers omitted language from previous statements saying that more hikes could be needed than financial markets expect. That implies that officials are comfortable with pricing for two more quarter-point increases, roughly one by late next year and another in 2020.
    The more dovish outlook than investors anticipated pushed the pound down nearly 1 percent against the dollar to as low $1.3096 and gilts rose. U. K. money markets pushed back expectations for the next shift to September 2018 from August 2018 previously.

    This post was published at Wall Street Examiner by Anthony B Sanders ‘ November 2, 2017.


  • America’s stagflation

    The accumulation of monetary policy errors by the Fed is increasingly certain to culminate in the credit crisis that always marks the end of the credit cycle. Credit crises are the result of globally coordinated monetary policies nowadays, so the timing of the forthcoming crunch is not only dependant on the Fed’s actions, but is equally likely to be triggered from elsewhere. Candidates for triggering a global credit crisis include economic and financial developments in Europe, Japan and China.
    The next crisis is set to be more serious than the global crisis of 2008/09, given the greater level of debt involved, and the exceptionally high rate of monetary inflation since. It is a story I have covered elsewhere.i This article will concentrate on the prospects for the US economy ahead of the next credit crisis, and the implications for the dollar and its associated financial markets.
    Other jurisdictions face a similar problem, with domestic consumers being maxed out on their credit cards, auto loans and expensive overdrafts. Rising interest rates after a prolonged period of zero and negative interest rates will increase the cost of mortgages, an acute problem for home-owners, particularly in North America and Britain. In the coming years, economic expansion for all highly-indebted nations will be driven by China’s Asia-wide expansion, in some cases more than by domestic factors. China will even suck in outside capital for the infrastructure development planned in both Asia and China. Demand for non-financial bank credit from all sources will be increasingly allocated to this task, leading to the selling down of the banks’ investments in both dollars and short-term sovereign debt.

    This post was published at GoldMoney on October 26, 2017.


  • Cars Sales Dropping as Taxes Rise

    The demand for cars has been declining rapidly in Britain and that is impacting German car sales rather sharply. All price levels in cars have been declining, not just the high end. The sales figures for small cars and the medium class have already declined significantly in the last few months. Now the losses are also becoming apparent in the case of expensive brands, especially for the German car manufacturers.

    This post was published at Armstrong Economics on Oct 26, 2017.


  • Is Europe Repeating the 1930s?

    Europe is now replicating the 1930s and the mistakes it made with austerity back then as well outside of Germany. Of course, Merkel has imposed the German view of austerity based on their experience but has ignored the opposite experience of the rest of Europe that led to the 1931 Sovereign Debt Crisis and mass defaults.
    It was the year of 1925 when then chancellor of the Exchequer, Winston Churchill, returned Britain to the gold standard. Britain was trying desperately to reestablish itself as the financial capital of the world as if nothing had taken place. Returning to the gold standard resulted in wages being forced down to compete with America. John Maynard Keynes at the time pleaded that this was madness. The pound was overvalued against the dollar by 10% trying to reestablish confidence in Britain but the net result crippled exports and unemployment began to rise and workers engaged in strikes for having wages reduced even though the pound was worth more officially.

    This post was published at Armstrong Economics on Oct 24, 2017.