Even The BIS Is Shocked At How Broken Markets Have Become

Courtesy of ZeroHedge:

Not a quarter passes without the Bank of International Settlements (BIS) aka central banks’ central bank (also the locus of some of the most aggressive manipulation of gold and FX in human history) reiterating a dire warning about the fire and brimstone that is about to be unleashed upon the global economy.

It started in June of 2013, when Jaime Caruana, certainly the most prominent doom and gloomer at the BIS (who also was Governor of the Bank of Spain from 2000 to 2007 when this happened) asked if “central banks [can] now really do “whatever it takes”? As each day goes by, it seems less and less likely… [seven] years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy…. low-interest policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system. Overindebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the cure…in some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.”

The BIS’ preaching did not end there, and hit a new crescendo in June of 2014, when in its 84th Annual Report, the BIS slammed “Market Euphoria”, and found a “Puzzling Disconnect” between the economy and the market”:

“it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally”, that “despite the euphoria in financial markets, investment remains weak. Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions” and that “the temptation to go for shortcuts is simply too strong, even if these shortcuts lead nowhere”… “Particularly for countries in the late stages of financial booms, the trade-off is now between the risk of bringing forward the downward leg of the cycle and that of suffering a bigger bust later on.” Continue reading

When our leaders say things are ok….

When our illustrious and democratically elected leaders tell us that everything is ok, well maybe their telling the truth? Or maybe their not. With a lack of understanding of quantitative easing, a currency war since 2010, a corporatocracy/ kleptocracy which is insidious in its working and economic indicators on debt, deficit, jobs, growth and inflation that are all understated…well we should take heed and invest in the stock market shouldn’t we? No we shouldn’t. I wouldn’t trust George Osbourne to make a cup of tea let alone ‘run’ an economy (for his corporate masters).

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5 Charts that show Markets are not Representative

Are markets acting rationally taking into account the current economic figures? The simple answer is no and the reason is because markets are fixed. The stock markets keep climbing to new highs, giving the appearance, to the general public, that all is well and the economy is recovering….it’s not. The Euro continues to disappoint and when does a bad outlook translate into higher stock prices? It doesn’t, it translates into mass fraud by the banks using High Frequency Trading and algorithms to give the impression of liquid and healthy stock markets.

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Taken from The Hedge….

It would appear that the credit markets both anticipated and began to price in what is now the worst recessionary period for the European Union on record a few days ago. However, their exuberant, ever-hungry colleagues over in equity land remain in the bad is good mode and can’t get enough of these higher prices. Where ever we look around the developed world, equity prices are lifting as credit deteriorates. The masses ignored these lessons in 2007; are they ignoring it again? Or is this just another short-term divergence? If so, it is bond-buying time… if not, take your equity profits now because these divergences are unsustainable.

European stocks and credit…

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US stocks and credit…

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Sovereigns ain’t buying it?

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and protection is bid

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It’s time to get your cash out of the markets.

The next US bubble

Who can forget Fannie Mae and Freddie Mac, that subprime housing market burst with a vengeance and now there is another. The agency in question is Sallie Mae as reported in the Wall Street Journal.

Sallie Mae (SLM) is the the USA’s largest non-government student lender and it just cancelled a $225 million debt offering. Investors decided they simply were not getting paid enough for risk – amid rising student loan defaults. There’s a limit to what investors will tolerate especially when you factor in the below graph showing students falling behind on payments. Almost one third of those who have taken loans are 90 days behind…this is not good for SLM or as an indicator of the US economy. It infers that the jobs that students were expecting to take up are not there anymore or are not paying as well, the US economy is flagging regardless of what the DOW says!

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The Legacy and the Lies

Margaret Thatcher was born a fishmongers daughter in 1925 and rose to power as Prime Minister 1979-1990. She is one of the most decisive figures in our current history and like marmite you either love her or hate her. When she came to power on the 4th of May 1979 and upon arriving at 10 Downing Street she is quoted as saying:

“Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope.”

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My grandad was a miner on my mums side and my great-grandads were a miner and a ship builder, my allegiances were set from an early age, I dislike Thatcher and her policies. She didn’t bring harmony, nor truth or faith but plenty of despair to the people of the North. She destroyed Northern communities without a bat of the eye.

I’d like to look at her policies and what she did during her tenure as a British PM. My dislike rests not on what the mainstream media spouts as gospel, which are just perverted and bastardised truths.

Continue reading

A look at today’s markets

Today we had a hacked tweet which caused a flash crash in the S&P500, the US equity market. The hacked tweet caused the S&P500 to crash over a time frame of 3 minutes but quickly recovered when it came out it was a fake tweet. Within that 3 minutes 260,000 S&P 500 e-mini contracts traded in the three minutes following the fake AP Tweet. That is a ~$20.4 Billion notional value ‘changed hands’. This was a drain of liquidity out of the system, a case of trading algorithms gone crazy where traders and investors were burnt.

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Courtesy of Zerohedge:

‘Spain’s Rajoy Yields To Merkel, Agrees That EU Countries Must Cede Sovereignty (Tyler Durden)

In what seems like a bow to his overlords in Berlin, Spanish Prime Minister Mariano Rajoy has unleashed a somewhat remarkable torrent of terrible realization and truthiness:

*SPAIN PM SAYS EUROPE ECONOMY WORST THAN FORECAST THIS YEAR
*SPAIN PM SAYS ALL EU COUNTRIES ARE REVIEWING GROWTH FORECASTS
*SPAIN PM SAYS MUST TAKE DIFFICULT DECISIONS FOR COUNTRY’S GOOD
*SPAIN PM SAYS EU COUNTRIES MUST ACCEPT TO GIVE UP SOVEREIGNTY
*EU countries’ giving up sovereignty to the bloc is crucial for its future’

Germany achieving what it couldn’t achieve through 2 world wars and not forgetting they’re claiming Cyprus and Greece’s gold as part of their bailouts. The troika are single handedly stealing the wealth of sovereign nations, they like gold!

And finally, on today’s Max Keiser it is revealed that the latest take down in gold prices was caused by ‘institutions’ dumping 1100 tons of paper gold. This is the equivalent of 45% of annual production dumped onto the market, in what can only be blatant market manipulation to suppress the price. Catch the full episode here Max Keiser Episode 435

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