Raleigh
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Australia and New Zealand going to act on surging property prices? Well, that means the surge is almost over then and authorities can see the end, otherwise they would not be doing it. They always rush in at the end and say, “Look, we acted.” As Ilargi says, “too late”. But that was by design. When prices are being driven up for years and people are questioning what’s going on, it’s just a pat on the head and a response like, “Well, we don’t really have accurate statistics on what’s going on. We’ll try and get a study going.” Yeah, right. They purposely don’t keep statistics because they don’t want YOU to know the answers.
They attempted to pass a law in New York City whereby foreign investors had to divulge who they actually were, and not just be identified through an LLC, a numbered corporation, but the real estate and lawyer lobby went into action and said that if the authorities did that, then that would kill the real estate industry.
Just an opinion, but I don’t think authorities act until they’re quite certain the end is near, anyway.
Ambrose Evans-Pritchard says:
“Charles Dumas at Lombard Street Research says capital outflows – when will we start calling it capital flight? – have reached $800bn over the past year.”
$800 bn is a lot of money. Is this the carry trade unwinding? Investors borrow cheaply in the U.S. and then seek higher returns in China (and other emerging markets)? Is this money coming back because investors fear a devaluation of the yuan or other currencies? Is this correct?
And then he says:
“‘If the authorities wanted to quickly and radically ease monetary conditions, exchange rate depreciation would be the obvious way to go,’ he said.
This relief is blocked – for now – because it would risk other nasty side-effects. Chinese companies have $1.2 trillion of US denominated debt. A yuan devaluation would anger Washington and risk a beggar-thy-neighbour currency war across Asia, with lethal deflationary effects.
Mr Slater says China may instead have to slash interest rates to zero and even resort to “monetary-financed deficit spending” in the end, knowing that this stores up an even greater crisis later.
The early signs are that Mr Xi will now revert to stimulus again – hoping that he can calibrate the dosage, despite the Party’s failure to do so on every previous phase of the stop-go cycle – concluding that it is too dangerous to let market forces do their worst after such vast imbalances have accumulated.”
I’m trying to understand the above. Why would a yuan devaluation anger Washington? If China did devalue, U.S. exports into China would become more expensive (hurting U.S. exports), but Chinese exports into the U.S. would get cheaper for the U.S. consumer. What am I missing? Hasn’t this been the scenario for the past 30 years – cheap imports into the U.S.? I mean, close to 60% of exports out of China are from U.S. multinationals, anyway. Did I just answer my own question? So U.S. multinationals operating in China would have to pay more to import their U.S. components into China (if the yuan devalued), and then would get dinged on the other end when they sold? What am I missing? Why would Washington be angry if they devalued?
China has several choices: they can stimulate with monopoly money (and buy up the world from nothing), they can devalue, or they can lower interest rates, or a combination of the above. If they devalue, does it then cause China to cash in some of their U.S. Treasury hoard? Is this why Washington would be angry?
Can someone help? You’d think that I would understand all of this by now (and sometimes I actually do, but then the knowledge slips away). What happens in the above scenarios?
rapier – “In the US 15 of the 16 GOP candidates have absolutely no clue that the American project is now the entrenchment of markets as the only goal worth achieving, and thus enriching those who are enriched by markets, and has little or nothing to do with traditional patriotism. ”
Oh, I think 90% of them do have a clue. If you have a clue, then surely they do. Who doesn’t have a clue is the American public. These candidates are not going to try to upset the apple cart. They’re wanna-be kings and queens who have been around the game and ivy league schools long enough to know what’s going on and handsomely profited from it. Come on, they’re politicians! All I have to do is look at my local politics, see who’s running, what their profession is, see who their husband/wife is or who their friends are and what they do, and I see the person pretty clearly. I see the hands they intend to grease and how they will line their own pockets. Look at where they’ve come from, and you will see where they’re going.
“While Obama understands this, if not consciously but intuitively, he has allowed the older fashioned Defenders of The Nation to engage in military or para military provocation and action all over the globe.” You don’t think he consciously understands exactly what’s going on? I’m sure it was spelled out to him long before he took office, but if not, shortly thereafter. Of course he’s “allowed” it. War is big money. Just ask the Bush’s, Cheney, etc.
https://theinternationalcoalition.blogspot.ca/2011/06/how-war-made-bush-family-rich.html
Honor of nation, nationhood, patriotism, apple pie – those are things that make politicians sound good to the American public, but they sure as heck don’t believe that crap. Watch what they do, not what they say. They’re too busy drafting and signing into law trade agreements that sell their nations down the toilet. “We’ve got to fight these bad guys over here because they’re a threat to our nation” goes over well to the American suckers, but what they really mean is, “We’ve got to fight these guys over here because we want to take their oil to enrich ourselves and our friends in the oil/fracking business, as well as help our friends in the arms industry.”
If big money wants war, then we’ll have it, but I doubt they do. If big money does not want war, then no matter how patriotic or nationalistic some of the old guard might be, it just will not happen. They’re out of the equation. It has to be good for business before it happens. With the political scum we now have, there is no longer “country”.
“The IMF acts as a member of the Troika, yet has no elected position whatsoever. The second unelected member is Mario Draghai of the ECB. Then the head of Europe [Jean-Claude Juncker] is also unelected by the people. The entire government design is totally un-Democratic and therein lies the crisis. Not a single member of the Troika ever needs to worry about polls since they do not have to worry about elections. This is authoritarian government if we have ever seen one.”
Martin Armstrong
Nicole – really enjoyed the interview you posted a few days ago, especially the reminder that we must live in the “now”. Thank you for that.
“One positive benefit you’d certainly expect to accrue to Greece from joining the euro is a big surge in how much trade it conducts with the countries it now shares a currency with. That’s exactly what happened. Compared to $4.5 billion in Greek exports to euro-area countries in 2000, before it joined, that figure rose to $11.2 billion in 2014.
The only wrinkle is that over the same period Greece increased its exports to non-euro countries by even more, from around $6.5 billion to nearly $24.8 billion, undermining a key argument in favor of creating a currency union in the first place.”
https://www.bloomberg.com/news/articles/2015-07-17/here-s-what-membership-in-the-euro-did-for-greece
rapier – or you could say it’s been a total humiliation for the Troika and an utter humiliation for China because in each case the looters’ – I mean elite – debts have been socialized or in the process of being socialized, or not.
The curtain is pulled back like never before, and all are naked to see. Their swim trunks are around their ankles, and the whole world is now watching them cheat, lie and steal. They might end up with the money for awhile, but I’m sure they’ve seriously considered, in their quiet moments, what happens to thieves.
And, please, what market? There is no market.
“For six years, investors have been guessing how much gold China owns. On Friday, they found out and the results were underwhelming. China said it boosted bullion assets to about 1,658 metric tons, less than brokers at GoldCore Ltd. and Sharps Pixley Ltd. expected. […]
“I’m shocked by how small the figure is,” Ross Norman, chief executive officer of dealer Sharps Pixley, said by telephone from London, referring to China’s gold reserves. “I don’t think I was alone in thinking they have accumulated three times as much.”
Ken – well, old Lloyd has done very well with debt: “Lloyd Blankfein is Now a Billionaire”.
“Blankfein, 60, was co-head of fixed-income trading when Goldman Sachs had its IPO, an event that created enormous wealth for executives. Partners in the firm received stock valued at an average of $63.6 million at the time of the sale. Henry Paulson, the bank’s CEO before and after the IPO, had almost $600 million of stock and options when he left to become U.S. Treasury Secretary in 2006, a move that allowed him to sell his stake without paying taxes.
Shares in the firm have climbed 298 percent since the IPO, compared with a 6 percent drop in the Standard & Poor’s 500 Financials Index. The stock has doubled in the past three years, reaching its highest level since 2007.
The guy tries to defend Blankfein in a way, saying, you know, all you have to do is stay with a company for a long time and – presto – you’re a billionaire. Yeah, some schmuck who safely keeps planes in the air over a long career, working his hands into arthritic pretzels, gets to live a decent life; no complaints.
But the guy who creates money out of thin air, bankrupts his company in 2008 (like the Chinese stock market, he was bailed out by the taxpayers), and helps Greece get into the Euro through very dubious means becomes a billionaire.
And the deal that Paulson got, paying no tax on his stock when he sold it, we all get that kind of benefit, don’t we?
Life is fair, isn’t it? You just need to work harder, people! It’s really all just about hard work (sarc).
“China has created what amounts to a state-run margin trader with $483 billion of firepower, its latest effort to end a stock-market rout that threatens to drag down economic growth and erode confidence in President Xi Jinping’s government.
China Securities Finance Corp. can access as much as 3 trillion yuan of borrowed funds from sources including the central bank and commercial lenders, according to people familiar with the matter. The money may be used to buy shares and provide liquidity to brokerages, the people said, asking not to be named because the information wasn’t public.
While it’s unclear how much CSF will ultimately deploy into China’s $6.6 trillion equity market, the financing is up to 25 times bigger than the support fund started by Chinese brokerages earlier this month.
CSF, founded in 2011 to provide funding to the margin-trading businesses of Chinese brokerages, has transformed into one of the key government vehicles to combat a 32 percent selloff in the Shanghai Composite from mid-June through July 8. At 3 trillion yuan, its funding would be about five times bigger than the new proposed bailout for Greece and exceed China’s 2.3 trillion yuan of regulated margin financing during the height of the stock-market boom last month.”
“China’s Communist Party leaders say they’re learning to love free markets.”
https://www.bloombergview.com/quicktake/chinas-managed-markets
Isn’t that a laugh and a half.
Professor – now the printing press central bankers have competition!
“TimesNews reports that police were called to a local grocery store on Sunday night in regards to a complaint about counterfeit money. When the reporting officer arrived, he spoke with a gas station clerk who said that just prior to the officer’s arrival, a white female had handed him a $5 bill, which he suspected to be counterfeit.
Since the bill had been printed on regular computer paper and each side had been glued together (but was falling apart), the officer immediately recognized the bill as a fake. […]
At that point she was arrested, and she gave the best money-counterfeiting “defense” we have heard in a long time:
“I don’t give a ****, all these other bitches get to print money so I can too.”
She has a good solid point. She just needed better glue and sharper scissors. Perhaps the glue went to her head because the $100.00 bill they found in her purse was right-side-up on one side, upside down on the other, and printed in black and white.
I remember my father talking about Ponzi schemes and counterfeiting when I was young, explaining that people who do this are criminals. Yeah, Dad, they are, except the little criminals get put in jail while the big criminals get to dine with the President.
Ruchir Sharma, head of emerging markets at Morgan Stanley, says (at the end of the interview) that “every single, major global recession in the last 50 years has been caused by the U.S. economy stumbling or going into a recession. My take here is that in the next couple of years, the next global recession will be made in China…” The host says, “You can’t make the U.S. consumer bail this one out, right?” Sharma says, “Exactly. The global economy is doing well, but China is a risk.”
The global economy is doing well? Really? The U.S. gets to rig its stock market, provide cheap loans to vested interests, hand out subprime auto/student loans, and pretend they’re not in a recession. The banks hide their junk somewhere where the sun doesn’t shine, the media paint the mess in Cinderella colors and – voila – it’s doing well.
I think what Mr. Sharma really means to say is, “Every country is lying and cheating, but China might be the one who gets caught this time simply because they can’t get their consumer economy growing fast enough to counteract the drop in exports to countries who are up to their eyeballs in debt.”
“Let’s look at what just happened.
Tsipras himself said that there is no purpose to elections in Greece. Did you get that folks? There is no purpose to elections; you are not selecting the direction of your country, you are beholden to an outside interest. You have no right to self-determination.
This is not just my opinion. The IMF says it is impossible to resolve the problems in Greece without major write-downs of the existing debt. Virtually everyone that has an opinion on this including the ECB and BIS along with others are reporting that roughly a third of loans held by Greek banks are 90 days or more delinquent!
If this is recognized on any sort of honest accounting basis then the ECB — the European Central Bank — is rendered insolvent. That’s right — as of right now, based on every independent financial analytical opinion out there including the IMF, the BIS, the now-resigned Greek finance minister and Tsipras himself, the European Central Bank is factually bankrupt as its bad debts exceed the entity’s capital (by a hell of a lot.) That’s because all of that bogus Greek debt, official and otherwise, was shoved onto the ECB’s balance sheet over the previous four years so the various banks, including most of the big banks in Europe that had “loaned” Greece money, wouldn’t have to take the loss themselves and potentially blow up. Understand this folks: There is no way to prevent the blowup from happening other than to literally enslave the entire nation of Greece and kill anyone who resists.
THE ENTIRE GREEK NATION IS NOW A CONFIRMED SLAVE COLONY AND ON THIS NEWS WE GET A NICE POP IN THE S&P FUTURES! And oh by the way, Greece has an impossible output (labor) demand in front of them, they will fail as a consequence, and as a result it will blow up in their — and the ECB’s — face. This is a reason for the market to advance?”
Alex Andreou – “Now, you may think he didn’t achieve a better deal – that may be a fair criticism – but to suggest the referendum authorized Grexit is deeply disingenuous. And what about the 38% that voted “NAI”? Was Tsipras not there representing those people, too?”
Why didn’t the referendum ask this very question: Are you in favor of a Grexit? This question could easily have been asked.
So Greece, who should never have joined in the first place, gets a bailout loan (which banks take 92% of), and then now gets another bailout (putting them further in the hole) and maybe ends up selling their assets? What the heck? Something is going on here that’s not being said, like the whole thing is about to implode and they all know it.
“Greek lawmakers voted overwhelmingly early Thursday to approve a harsh austerity bill demanded by bailout creditors, despite significant dissent from members of Prime Minister Alexis Tsipras’ left-wing party.
The bill, which imposes sweeping tax hikes and spending cuts, fuelled anger in the governing Syriza party and led to a revolt against Tsipras, who has insisted the deal forged after a marathon weekend eurozone summit was the best he could do to prevent Greece from catastrophically crashing out of Europe’s joint currency.
The bill was approved with 229 votes in favor, 64 against and six abstentions — and won the support of three pro-European opposition parties.
Prominent Syriza party members were among the dissenters, including Energy Minister Panagiotis Lafazanis and former finance minister Yanis Varoufakis, who many blame for exacerbating tensions with Greece’s creditors with his abrasive style during five months of tortured negotiations.”
https://www.cbc.ca/news/business/greek-parliament-passes-austerity-bill-despite-dissent-1.3152371
Is this a joke?
October 19, 2015 – the day I hope Harper packs up his panties and moves to the Ukraine. Good riddance! We’ll claim him as an export and value him at – how about 0?
Canada’s Finance Minister, Stephen Poloz, a third-generation Ukrainian Canadian – they’re everywhere – just lowered the benchmark interest rate to 0.5%. I guess he wants to lower the Canadian dollar in order to help out his export buddies.
“Poloz spent 14 years with the Bank of Canada (1981-1994) before leaving as Chief of Research Department to become managing editor of BCA Research from 1994 to 1999. Poloz joined Export Development Canada agency in 1999 and became its President and CEO in 2010.
He has been a visiting scholar with “Economic Planning Agency” in Tokyo and at the International Monetary Fund in Washington D.C.
Poloz attended the 62nd Bilderberg Annual Conference in Copenhagen, Denmark, on May 29 – June 1, 2014, where one of the subjects being discussed was the situation in Ukraine.”
https://en.wikipedia.org/wiki/Stephen_Poloz
Another Bilderberg/IMF boy.
When I talk about things Karl Denninger says, I just describe him to my children as the “wild man”. But I believe in this case he’s right. He quotes Schaeuble: “Debt relief is impossible.” Karl’s response:
“Then a sustainable outcome is impossible.
Therefore, Greece must burn the entirety of the so-called Troika’s bonds on the steps of the Parliament building tomorrow morning.
All of them.
There is no rational analysis that leads to decreasing debt over time without doing this. A further bailout program under the ESM will immediately ratchet upward the debt:GDP ratio by another 25 percent, which puts the target further away rather than closer.
Such a program is thus an abject fraud and anyone who signs it on either side of the table deserves to be indicted, tried and hung.”
https://market-ticker.org/akcs-www?post=230349
And another post:
“I remind everyone that there is no possible way that lending the Greeks another €100 billion, which is now what the estimates are up to, will ever lead to the ability to pay any of that off. As a result depositing one nickel outside of the nation means they have given it away — period, full stop.
Tsipras and the Greek Government cannot accede to these demands. If they do the people of the nation have every right to consider the government illegitimate and beyond salvation, doing whatever becomes necessary next (and it won’t be pretty.)
It’s quite clear that from 2010 forward, with the first bailout, there was never any ability to clear the books and return to a reasonably-stable situation economically in this country through taking on those loans. It’s also quite clear that all the way back to Greece’s entry into the Euro there was active complicity and involvement in outright fraudulent accounting undertaken by and with many international banks — and then the banks that “bought” that debt agitated in the first bailout for transfer of the paper to the central bank and thus onto the backs of the EU’s citizens, a second fraudulent act since there was no way for it to be paid off in full and thus that transfer was the fruit of a poison tree.
The people involved in this need to be indicted and the banks involved in this must have their charters revoked and be shuttered irrevocably with their officers and directors spending the rest of their life worrying about dropping soap in the shower. […]
We can either face arithmetic or it will “face” us — in the face, that is.”
https://market-ticker.org/akcs-www?post=230353
He doesn’t mince words, but he’s right.
Pete Dolack says:
“Perhaps the signal that was not given due consideration was Prime Minister Alexis Tsipras’ statement on July 10 that “we have no mandate to leave the euro.” The Syriza-led government also had no mandate for the continuation, much less the intensification, of austerity. […] Yes, Syriza was elected with a mandate to negotiate; that follows from Greek majority popular opinion that the country should remain within the eurozone. But there was also a mandate that austerity be brought to an end. Syriza proved unable to resolve this contradiction: Greece can end austerity or be in the eurozone, but not both at the same time.”
Yes, I can’t understand this “we weren’t given a mandate to leave the Euro”. Why wasn’t this question asked on the referendum? It could have easily been. Perhaps they didn’t want the answer they would have gotten?
And John Pilger says in “The Problem of Greece is Not Only a Tragedy: It is a Lie”:
“Instead of social justice for Greece, they achieved a new indebtedness, a deeper impoverishment that would merely replace a systemic rottenness based on the theft of tax revenue by the Greek super-wealthy – in accordance with European “neo-liberal” values — and cheap, highly profitable loans from those now seeking Greece’s scalp. […]
The day after the January election a truly democratic and, yes, radical government would have stopped every euro leaving the country, repudiated the “illegal and odious” debt – as Argentina did successfully — and expedited a plan to leave the crippling Eurozone. But there was no plan. There was only a willingness to be “at the table” seeking “better terms”. […]
The leaders of Syriza are revolutionaries of a kind – but their revolution is the perverse, familiar appropriation of social democratic and parliamentary movements by liberals groomed to comply with neo-liberal drivel and a social engineering whose authentic face is that of Wolfgang Schauble, Germany’s finance minister, an imperial thug. Like the Labour Party in Britain and its equivalents among former social democratic parties such as the Labor Party in Australia, still describing themselves as “liberal” or even “left”, Syriza is the product of an affluent, highly privileged, educated middle class, “schooled in postmodernism”, as Alex Lantier wrote. […]
Syriza’s luminaries are well-groomed; they lead not the resistance that ordinary people crave, as the Greek electorate has so bravely demonstrated, but “better terms” of a venal status quo that corrals and punishes the poor. When merged with “identity politics” and its insidious distractions, the consequence is not resistance, but subservience. “Mainstream” political life in Britain exemplifies this.
This is not inevitable, a done deal, if we wake up from the long, postmodern coma and reject the myths and deceptions of those who claim to represent us, and fight.”
Another side to the story. We shall see what happens.
Good Matt Taibbi piece re Eric Holder:
“Eric Holder has gone back to work for his old firm, the white-collar defense heavyweight Covington & Burling. The former attorney general decided against going for a judgeship, saying he’s not ready for the ivory tower yet. “I want to be a player. […]
“The firm’s emphasis on pro bono work and being engaged in the civic life of this country is consistent with my worldview that lawyers need to be socially active,” he said.
Right. He’s going back to Covington & Burling because of the firm’s emphasis on pro bono work.”
And that’s what he’s been doing since he entered the revolving door (playing – playing the game of getting crooks – I mean his former clients – off with fines and wrist slaps). Who would have thunk it? Two blacks (Obama and Holder), riding in on “hope and change”, turn out to be as corrupt as the white crooks.
Eric Holder, Wall Street Double Agent, Comes in From the Cold
And another great read by Matt Taibbi (from November, 2014) deals with a Canadian securities lawyer who was working for J.P. Morgan Chase during the time of the subprime garbage mortgages. She tried everything to get them to stop, spelled out that they were committing fraud, but she was shut up, then laid off. Very interesting read!
“One of the ongoing myths about the financial crisis is that the government is outmatched by the legal talent representing the banks. But Fleischmann was impressed by the lead attorney in her case, a litigator named Richard Elias. “He sounded like he had been a securities lawyer for 10 years,” she says. “This actually looked like his idea of fun – like he couldn’t wait to run with this case.”
She gave Elias and his team detailed information about everything she’d seen: the edict against e-mails, the sabotaging of the diligence process, the bullying, the written warnings that were ignored, all of it. She assumed that it wouldn’t be long before the bank was hauled into court. ]…]
“Responsibility remains so diffuse, and top executives so insulated,” Holder said, “that any misconduct could again be considered more a symptom of the institution’s culture than a result of the willful actions of any single individual.”
In other words, people don’t commit crimes, corporate culture commits crimes! It’s probably fortunate that Holder is quitting before he has time to apply the same logic to Mafia or terrorism cases.”
https://www.rollingstone.com/politics/news/the-9-billion-witness-20141106
Nassim – Farage is an incredible speaker. He not only makes good common sense, but the words just flow off his tongue – no “umms or aahs”. He’s also got a great sense of humor, and the place wouldn’t be the same without him. Hopefully he makes some of the other idiots think. I’m sure Tsipras enjoyed his support.
“How the NYSE Big Board Went Dark” – no, we will never know the truth about that. Just a coincidence that China’s markets are crashing and the lights go out in New York? Sure, uh-huh.
China’s on Viagra. So are all of the other central banks. All members of the Bank for International Settlements, do you think for one second that the others would allow what China is doing if they hadn’t already talked about it beforehand at their meetings?
China: “What are we going to do? Our economy is turning down, because the U.S./European economy is turning down. How are we going to ramp it back up? We already provided one mother of a stimulus in 2008/2009.” It’s discussed that Japan, Europe are QEing till the cows come home, the U.S. has already done that, and their stock markets are soaring. U.S. to China: “Well, we don’t care what you do, but you mustn’t allow this balloon to deflate. We need you to do your part before this whole thing implodes. Pump up your stock market, get your media to entice people in.” China: “But we were trying to encourage the role of the ‘free market’.” U.S. to China: “Free market? There’s no free market. There’s us. We do the steering, engineering, turning the lights out when needed, and changing the rules when they need changing. Get in there and manipulate.”
I have to laugh when over and over again Mish (who makes sense on a lot of things) says this of the central banks: “In reality, there is not a central bank on the planet that has any credibility.” Check, I’m in agreement there, but the central banks obviously don’t care about that, do they? “Bubble after bubble is the norm. The Fed failed to predict the dotcom bust, the housing boom, the housing bust, or the great recession.” How could they possibly fail to predict something which they set about to create? This is what he always misses, what so many miss.
Last year, China “strongly encouraged” everyone to get into the stock market. They were setting up the bubble, just like they all do (dot.com, housing, stock bubbles). Then we get a whole bunch of so-called experts saying they don’t see them? What? That just does everyone reading their work a huge disservice. Of course, they see them. They made them. Mish continually rails against labour unions, seeing them as one of the major causes of U.S. price increases, etc., and yet he rarely, if ever, recognizes that the true harm is caused by the biggest union of them all – the central banks.
The whole world is on Viagra.
At least 1,331 companies have halted trading on China’s mainland exchanges, freezing $2.6 trillion of shares, or about 40 percent of the country’s market value, Bloomberg reported on Wednesday.
The Shanghai Composite Index fell 5.9 percent on Wednesday. It’s now about 32 percent below the peak of 5,166 it reached on June 12. The unwinding of margin loans is adding fuel to the fire. Individual investors in China, as we all know by now, have used generous margin financing terms to enter the stock market and then build up their portfolios. Less-known is that Chinese companies have been doing the same thing by using their own corporate stock to secure loans from banks.
This means that they stand to lose a lot when those share prices start trending dramatically lower.Says Nick Lawson at Deutsche Bank: “Stocks are being suspended by the companies themselves because many have bank loans backed by shares which the banks themselves may want to liquidate, joining the queues of margin sellers.”
Nomura analysts added that: “Some bank loans have been extended with shares of listed companies put up as collateral.”Numbers here are sketchy, but the team at Nomura estimated that the total amount of such loans may be 500 billion yuan to 600 billion yuan ($80 billion to $96 billion). This sounds like a lot but is equivalent to about 1 percent of total loans to Chinese enterprises.”
“China has 89 million investors with brokerage accounts for a population of 1.3 billion, according to the China Securities Depository and Clearing Corp., implying about 7% of the people are set up to trade stocks. Just 55% of the accounts held stocks on June 12.”
Some other writer (though I can’t find the article) called bullsh*t on people saying that the stock market crash was going to hurt the peasants. He said nothing could be further from the truth, as it is only the wealthy who are in the stock market.
If there is a winner for every loser, who won? Did companies/real estate corporations/local governments (who were seriously in debt and wanted to get out of debt by cashing in their stocks while the going was good) suck in unsophisticated wealthy investors, then jump out with all the winnings? Who won?
Interesting re Chinese speculators. I’ve seen the same thing with the Chinese on real estate, education, sport lessons…well, everything actually.
“As John Mauldin wrote in his “Thoughts From the Frontline” e-letter this week: “Chinese individual investors are not primarily ‘value’ investors. Sky-high valuations don’t seem to faze them. They are primarily momentum investors who buy whatever is moving and sell whatever is falling.
“According to my friends who go to casinos and watch the Chinese gamble, they tend to jump on a ‘trend’ such as red coming up on the roulette table repeatedly — never mind that the odds are only ever 50-50. Red is seen as hot and therefore the way to bet. That carries over into trading styles. …”
When highly unsophisticated investors run into trouble, they panic quickly and try to get out at any price. The same inexperienced bettors who drove Shanghai up to 5,000 will take it way down, maybe to the last bear-market low above 1,700 — or maybe even lower, to 1,500, before it finds a long-term bottom.
When Shanghai was peaking at 5,000 in June, I gave you five words of advice: Get. The. Hell. Out. Now.
To which I’ll add five more: And. Stay. The. Hell. Out.”
Perhaps someone can point out the flaws in what Karl had to say yesterday in “Dear Frau Merkel, Herr Tusk and Herr Juncker”:
“Let us begin with the basics. No government is accountable for the crimes of previous administrations. This is an international truism; Germany, for example, has never paid Greece for the economic and property damage done to our nation during WWII by Nazi Germany; that government was of course removed from office. While it would be nice to see those funds, which under inflation would exceed our gross indebtedness, we recognize that we cannot hold the current German government accountable for the sins of a previous German administration.
Similarly, the Troika and remainder of the EU cannot hold the current Greek government accountable for the unlawful acts of the previous administration — an administration that, I remind you, was fired by the people of Greece. That said firing came peacefully through ballots rather than bullets is immaterial.
The debt which you seek to collect was, in the main, unlawfully contracted. Many international banks conspired together with the previous administrations to unlawfully present a false view of the nation’s finances. Further unlawful and fraudulent acts occurred thereafter, including during the bailout a few years ago when Merkel herself, it has been revealed, knew she was negotiating a loan that could not be repaid under any reasonable commercial terms.
Fraud vitiates all contracts and this is no exception. As such the debt you seek to collect is, under both Greek and International law, invalid, never mind that the present administration cannot be compelled to honor it even were it to have not been fraudulently contracted.
We therefore present the following:
While we are obligated to honor none of the outstanding debt as a gesture of good will we will honor one fourth of the approximately €330 billion owed on a renegotiated basis, or €82.5 billion. These old bonds shall be tendered to our Treasury in exchange for new Greek bonds with a 10 year maturity at 17 basis points over the current yield of German Bunds, or a 1% rate of interest. We shall pay said interest in the amount of €825 million euros due annually in fourths on a quarterly schedule, with the first payment to be made on September 30th and then quarterly thereafter, as is standard in the international community. We further reserve the right, but do not have the obligation, to prepay and extinguish up to 1/10th of this remaining indebtedness (€8.25 billion) at any time during each of the next 10 years.
With the rest of the alleged debt certificates we will hold a ceremonial bonfire on the steps of Parliament tomorrow morning at 08:00.
We understand that this will lead the Euro zone and others to decide not to lend us money in the future, quite possibly for a long time or perhaps forever. We are perfectly ok with this, as no government can borrow on a sustainable basis anyway and that is a large part of the fraud that you, and the previous administrations of Greece, conspired in. Such claims of “sustainability” are per-se frauds as they violate the laws of mathematics.
We are not leaving either the EU or the Euro, however as we fully intend to take full advantage of the EU economic zone advantages, including visa-free travel between EU nations and tariff-free trade.”
And he goes on to say how it can be accomplished. To me, it sounds like the only solution, but then I hit the side of my head and remember that we’re talking politics here.
V. Arnold – I haven’t got a clue either, because I actually thought that what Karl Denninger had to say yesterday made sense. Naked Capitalism refused to even post part of his letter, so it must be wrong, right? God if I know. Here’s what Karl had to say today:
“Meanwhile people seem to think that Greece still has some sort of “solution” coming with Tsipras “capitulating.” Uh, no. But this much is obviously true — Tsipras, if he intends to actually resolve the problem, has to issue something like what I wrote yesterday.
But he hasn’t, and it appears he won’t, which means that Greece is hosed and so is the rest of the Euro zone.”
Yves Smith has this post from Ambrose Evans-Pritchard: Tsipras Never Wanted to Win Referendum; is ‘Trapped’ and ‘Depressed’
Then there’s Karl Denninger’s letter to the Troika: Dear Frau Merkel, Herr Tusk and Herr Juncker. Yikes, it’s a good read!
“The debt which you seek to collect was, in the main, unlawfully contracted. Many international banks conspired together with the previous administrations to unlawfully present a false view of the nation’s finances. Further unlawful and fraudulent acts occurred thereafter, including during the bailout a few years ago when Merkel herself, it has been revealed, knew she was negotiating a loan that could not be repaid under any reasonable commercial terms.
Fraud vitiates all contacts and this is no exception. As such the debt you seek to collect is, under both Greek and International law, invalid, never mind that the present administration cannot be compelled to honor it even were it to have not been fraudulently contracted.
We therefore present the following:
While we are obligated to honor none of the outstanding debt as a gesture of good will we will honor one fourth of the approximately €330 billion owed on a renegotiated basis, or €82.5 billion. These old bonds shall be tendered to our Treasury in exchange for new Greek bonds with a 10 year maturity at 17 basis points over the current yield of German Bunds, or a 1% rate of interest. We shall pay said interest in the amount of €825 million euros due annually in fourths on a quarterly schedule, with the first payment to be made on September 30th and then quarterly thereafter, as is standard in the international community. We further reserve the right, but do not have the obligation, to prepay and extinguish up to 1/10th of this remaining indebtedness (€8.25 billion) at any time during each of the next 10 years.
With the rest of the alleged debt certificates we will hold a ceremonial bonfire on the steps of Parliament tomorrow morning at 08:00.”
https://market-ticker.org/akcs-www?post=230325
Read on.
Doc Robinson – thank you so much for the information! I’ll have to reread the info at the link a few times, just to get used to the terminology. So if Apple ships a component to China (in order for more parts to be added to said component to make it a “whole”, like an iPhone), that counts as an import for China and an export for the U.S. Then when China adds to that component (i.e. puts a cover on it or adds some buttons, finishes off the product, whatever), and then exports product back to the U.S., that’s considered an export from China and an import to the U.S.
Since China makes so much for the multinational corporations (U.S., German, Swiss, etc.), I wonder, if you stripped this multinational production out, how much China would really be exporting on her own.
It’s something that’s always intrigued me. When I get the time, I’ll look into it some more. Thanks, Doc Robinson.
Greenpa/bluebird – good point on the cost of having an army. Of course, Germany has got American troops parked there, so Germany gets to have an army without paying for it, and they get the added benefit of the Americans living there, buying their products.
I did find it interesting, though, that Germany exported so much. I read somewhere that 60% of all exports leaving China are from U.S. multinational corporations, and I wonder who gets to claim these as exports – China or the U.S. Does anyone know? It certainly would change things if China’s exports were actually 60% less and U.S. exports 60% more.
It’s my belief that China was engineered and manufactured by the U.S., that she could never in a million years have ramped up the way she did without a tremendous amount of U.S. help. China is U.S.-made.
Surprising that Germany, by holding its production costs down, became such a powerhouse.
“Those outside of Europe may be surprised to learn that Germany’s exports ($1.5 trillion) are roughly equal to the exports of the U.S. (1.6 trillion), and compare favorably with China’s $2.3 trillion in exports, given that Germany’s population of 81 million is a mere 6% of China’s 1.3 billion and 25% of America’s population of 317 million.”
Good chart entitled “The Mercantilist Nation – Consumer-Debt Nation Cycle”. You can see how it all falls apart, once the periphery nations get loaded with cheap debt.
“Though German wages are generous, the German government, industry and labor unions have kept a lid on production costs even as exports leaped. As a result, the cost of labor per unit of output — the wages required to produce a widget — rose a mere 5.8% in Germany in the 2000-09 period, while equivalent labor costs in Ireland, Greece, Spain and Italy rose by roughly 30%.”
https://www.oftwominds.com/blogjuly15/ragin-contagion7-15.html
“Back in June 2012, the ECB, whose head was the recently crowned Mario Draghi who had less than a decade ago worked at none other than Goldman Sachs, was sued by Bloomberg’s legendary Mark Pittman under Freedom of Information rules demanding access to two internal papers drafted for the central bank’s six-member Executive Board. They show how Greece used swaps to hide its borrowings… […]
Because something tells us the reason why Mario Draghi personally blocked Bloomberg’s FOIA into the circumstances surrounding Goldman’s structuring, and hiding, of Greek debt that allowed not only Goldman to receive a substantial fee on the transaction, but permitted Greece to enter the Eurozone when it should never have been allowed there in the first place, is that the person who oversaw and personally endorsed the perpetuation of the Greek lie is none other than Goldman’s Vice Chairman and Managing Director at Goldman Sachs International from 2002 to 2005. The man who is also now in charge of the ECB.
Mario Draghi.”
https://www.zerohedge.com/news/2015-07-06/who-biggest-winner-greek-tragedy
Carbon – “I’m a bit surprised the markets weren’t more temperamental this morning.” The market is fully aware that if things start to turn, the Plunge Protection Team will be there to correct the “free market” with all its might, to steer the free market to where it could, should, would, ought to be.
TAE Summary – another good one! Funny when it’s all summed up. Chatter, chatter, all to no matter. We’re heating up in more ways than one. It seems the Arctic is getting just a little bit warm, but we couldn’t be causing any of it, could we? (sarc)
“Also, on July 1, 2015, a temperature of 36°C (96.8°F) was recorded near the Kolyma River that flows into the East Siberian Sea.
The Arctic is hotter than Miami!
Somehow or other, 98°F in the Arctic makes the world seem upside down/sideways. Is it?”
Crank up the evolution machine, set it to high speed; methane is on its way.
Professor – direct democracy might be mob rule, but what’s better – mob rule or oligarchic rule? At least this way the “mob” has a friggin’ chance. Now, if we had a benevolent government who actually cared about its citizens, then, yeah, referendums probably wouldn’t be necessary. In fact, a benevolent government would probably want to have a highly educated public, want to have transparency, just so everybody understood the issues.
The oligarchy have got to be plenty ticked off by this “mob” business, the great mass of ignorants having their say. They’re probably screaming, “Why, if anybody is going to be mobbing, it’s going to be us. We can’t allow them to out-mob us.” So much so I expect to see somebody dead in the not too distant future.
seychelles – “…systemic non-payment of taxes.” That’s something the Greek elite and the self-employed have been doing for years. “…the authors calculate that the self-employed in 2009 dodged taxes on at least €28 billion of unreported income, enough to fill 31% of the Greek budget deficit that year.”
https://www.economist.com/blogs/freeexchange/2012/09/tax-evasion-greece
But I agree with what you’ve said. Voting does not appear to work as the elite or the vested interests choose who the candidates are, and they just end up doing whatever they damn well want when they get elected, anyways.
For the average person – defaulting on debts, not paying taxes, refusing to buy products from corporations who offshore jobs overseas or who hire temporary foreign workers to take jobs that could be filled by the citizenry – is the only way we can fight them, throw a wrench in the works.
If everyone did this, the NWO would be toast. Depositor bail-ins could be met with elite jail-ins, plus confiscation of every asset these criminals own.
rapier – “My sense is that most of them are trying to get stuff into their lifeboat.” Yeah, I think that’s what the reinflation was all about, giving them time to get stuff into their lifeboat. Because you can see that they’ve all got each other’s backs, making excuses as to why the economy is not getting better, pretending that it is. The media, economists, analysts, politicians, corporate CEO’s, hedge funds, mutual funds – all of them are flim-flamming.
Same thing with Greece. They needed time to get their stuff.
The “broken-hearted” in the following song might symbolize the people of Greece. You could substitute “broken-vested who had love that’s now arrested” (for the Troika). Exceptionally good cover of a classic Motown song, with former Motown musicians and one h-e-l-l of a good singer.
As I walk this land of broken dreams
I have visions of many things
But happiness is just an illusion
Filled with sadness and confusionThe fruits of love grow all around
But for me they come a tumblin’ down
Everyday heartaches grow a little stronger
I can’t stand this pain much longerI walk in shadows, searching for light
Cold and alone, no comfort in sight
Hoping and prayin’ for someone to care
Always movin’ and goin’ nowhere“30% Bail-In Haircuts on Greek Deposits Over €8,000 Coming Up; Banks to Raid Deposits to Avert Collapse
I warned countless times over the last six months that Greek citizens need to pull their deposits before it was too late. Today I report it’s too late. 30% bail-in haircuts on Greek bank deposits are coming up. […]
The only thing curious is the timing of the announcement. Actually, there was no official announcement. Rather a statement by “bankers and businesspeople” who likely wish to influence the vote to yes.
This news could do it. However, haircuts will come either way.”
https://globaleconomicanalysis.blogspot.ca/2015/07/30-bail-in-haircuts-on-greek-deposits.html
