Financial system looking for a crisis to take the blame for global debt defaults

As time passes and the world becomes more chaotic — and poor, with the exception of the uber-wealthy, whose income and worth just keeps rising no matter what happens around the globe — more and more financial experts and economic analysts have become uber-pessimistic, especially about the financial future for the debt-ridden United States. You can add financial analyst and writer Bill Holter to that list. In a recent interview with Greg Hunter’s USA Watchdog, Holter says he believes that the elite power brokers in the U. S. and around the world are well aware of the fragile nature of the economic system and are set to play a major blame game when — and he says when – the coming crash hits.“I believe that they know the financial system is upside down and there is no bringing it back, so they do need to have something to point at,” he told Hunter. “It could be a war with Russia. We are trying as hard as we can to create a war, and it looks like Russia, and Mr. Putin, is trying as hard as he can [to not] have a war.”Holter continued: “There could be any number of things to point at. It could an Ebola virus outbreak. It could be the Saudi Arabians accepting euros, gold, rubles, yuan, what have you. It could be anything. There are dozens of topics.”

This post was published at Natural News on Saturday, September 06, 2014.

Eurobonds – the Coming Federalization of Europe

Europe will move to Eurobonds for now Brussels gets it – if the euro fails, they lose their jobs in Brussels. Individual government bond issues have prevented the Euro from becoming a major currency and it now trails even the Chinese Yuan in trade. Nonetheless, some are trying to argue such as the German bank co-chief Anshu Jain that he naively claims that maintaining separate debts for each country is strangely an important disciplining effect for debt reduction. The problem with his view – government do not pay back debt and that includes Germany as is the case with the USA. Where is the discipline?
The Eurobonds are coming when the ECM turns down from 2015.75 and this will be seen as the great solution…

This post was published at Armstrong Economics on September 3, 2014.

The Sky Is Falling on Chinese Corporations

The four largest banks in China, the banks that have to officially show big profits and profit growth no matter what because they’re an integral part not only of the government but also of China’s miraculous debt-driven expansion, are showing officially tolerated signs of increasing stress. For perspective, in 2009, following the Lehman moment, as other banks were collapsing and were bailed out, the profits of these four banks grew even then, if only by a combined 2.9%.
These four mastodons – Industrial & Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China – admitted to 384.7 billion yuan ($62.6 billion) of bad loans on their book at the end of June, a 13.2% jump from just six months earlier. The jump in bad loans ranged from 11% at Agricultural Bank of China to 17% at Bank of China.
If we suspend our disbelief in Chinese numbers, bank numbers in general, and Chinese bank numbers in particular, for a very brief moment and accept them temporarily as if these bad-loan numbers were actually something close to reality, rather than something ludicrously beautified, they would amount to about 1% of total lending by these banks. And it’s gnawing at their profits: their relentless state-mandated rise slowed to 9.6% over prior year.

This post was published at Wolf Street by Wolf Richter ‘ September 2, 2014.

USDJPY (And Nikkei) Surge Higher as Japanese Car Sales Collapse To 3-Year Lows

And for tonight’s menu of disastrous Japanese economic data, we have (drum roll please)… Auto sales. Overall auto sales fell 9.1% YoY to 333,471 – the lowest in 3 years. Minicars dropped a stunning 15.1% YoY according to the Japanese auto dealers association. The response – rather obvious by now – to this terrible news… a 35 pip vertial ramp in USDJPY which can mean only one thing – the Nikkei 225 rallied 150 points… On a side note, following disappointing PMIs, China fixed the Yuan at 4-month lows.

This post was published at Zero Hedge on 09/01/2014.

Double Whammy China PMI Misses Spark Sell-Side Demands For More Stimulus

A record-breaking surge in monthly credit creation and a trillion Yuan of QE-lite was enough to provide a glimmer of hope into the tumbling Chinese economy for one or maybe two months but with the real estate market continuing to free-fall, it should be no surprise that China’s PMIs finally catch down to the erstwhile reality simmering under the surface in the ultimate centrally-planned economy. China’s official government PMI dropped from 30-month highs, missed expectations and the early month flash print, to less exuberant 51.1 reading (with Steel industry new orders totally collapsing) with both medium- and small-companies printing contractionary sub-50 levels. Then (after Japan’s PMI beat – of course it did as hard data crashes worst on record), HSBC China PMI also missed, printing a slightly expansionary 50.2 Showing, as BofA warns “the two PMIs both show that the current recovery is relatively weak and choppy…” and RBS adds “we expect the government to interpret such an outlook as challenging its growth target and to take more, and more significant, measures to support growth.”

As Goldman writes,
August official PMI tends to be biased on the upside. Since the data started in 2005, this is the second time it fell in August (first time was August 2012). The degree of seasonality probably has been reduced in recent years but may still exist. This suggests underlying slowdown might be more meaningful, which is consistent with the weak reading of the HSBC PMI.

This post was published at Zero Hedge on 08/31/2014 –.

Summer Ends, Jackass Appears

In a continuance of our “holiday tradition”, Jim Willie stopped by Turdville yesterday to share his thoughts on current events and where he thinks this all headed.
The Jackass was his usual self, even if a bit under the weather. In this podcast, we discuss:
Yesterday’s announcement by Gazprom that they will begin accepting payment in rubles and yuan The escalation of US and EU sanctions against Russia and how they are failing/backfiring The growing isolation of the US as a economic superpower The eventual emergence of a new global currency regime This baby clocks in at slightly over 60 minutes so please try to pace yourself. You don’t want to overdo it.
TF
CLICK HERE TO LISTEN

This post was published at TF Metals Report By Turd Ferguson | Friday, August 29, 2014.

China Industrial Commodities Collapse As Sentiment Tumbles To 15-Month Lows

Unlike the QE-lite-driven exuberance in Chinese stocks of the last few weeks (which faded dramatically overnight), China’s industrial commodities (with near-record inventories) and seeing prices collapse. This may shock some who espy PMIs and government-created trade data and proclaim, China is fixed. In fact, as JPMorgan’s China Sentiment Index (JSI)shows, things are anything but bright as it fell to the lowest since June last year (at 48.3 in August). Sales and margins are tumbling – despite supposedly lower input costs. Lastly, those focused on spot Yuan movements (strength in recent weeks) have suggested this also confirms China strength – inflows – but looking out 12-months shows the market is expecting a dramatic devaluation from current levels in the Chinese currency is coming.

This post was published at Zero Hedge on 08/26/2014.