Pensng Mamacaptain Office ---- official opening on 20 July 2016

MamaCaptain begin since 8 June 2015 til now already a year plus, within a year period from nothing we glow til now we have more than 100k members.
We just celebrated our 1 year anniversary at Penang Spice Arena, during the day we have our merchant ［Barrel2U］more than 100 booths , in the evening we have show and concert. All benefit donated to 30 different society with the amount of RM 500,000.
On 20 July Penang MamaCaptain office will be opening at Elite Avenue, open for public visiting.
In the market what kind of platform company can do for members within a year period??? 
My answer is only MamaCaptain can ...... 
In MamaCaptain we see our FUTURE
In MamaCaptain we see our BENEFIT
In MamaCaptain we spend without WORRIES
In MamaCaptain we help lot of MERCHANTS
So .... What are you waiting for???

Apple Watch Sales Tumble 55%

Tim Cook's first major, standalone product is a flop. According to the latest IDC data, sales of the Apple Watch plunged by 55%, from 3.6 million a year ago to just 1.6 million in Q2.  
The sharp decline in sales of a product that many "expert analysts" had staked would result in a "wearables" revolution and a new golden era of growth for Apple, is highly unusual for a new Apple product so early in its life and will add to concerns about Apple's growth prospects this year. By reference, the iPhone posted nine years of uninterrupted growth from its launch in 2007 until the first quarter of this year, when unit sales fell by 16% to 51 million the FT writes.
Other companies did better: while Apple remained the top seller, Samsung closed the gap thanks to strong 51% year-over-year growth and a 9%  jump in market share to 16%.  Lenovo’s Motorola brand also saw a sales increase of 75% to 0.3 million. The Apple Watch's market share has tumbled from 72% at its launch to just 47% in the most recent quarter. 

As IDC said, "Apple still maintains a significant lead in the market and unfortunately a decline for Apple leads to a decline in the entire market. Every vendor faces similar challenges related to fashion and functionality, and though we expect improvements next year, growth in the remainder of 2016 will likely be muted."

After initially ramping up in the first three quarters since its launch, sales of the iWatch have sharply stagnated in the new year, with both Q1 and now Q2 posting disappointing sales numbers.

While the plunge in Apple watch sales is troubling, what is worse for "wearables" advocates is that consumers may have gotten moved on. The overall smartwatch market experienced its first-ever decline as shipments fell 32% in the second quarter, totaling an estimated 3.5 million units compared to an estimated 5.1 million units in the year-ago quarter.
Over the past year, Apple has refused to released any official sales figures for the Watch since it was launched in April of last year. While analysts have estimated that it sold 12m units in its first year the number is below many observers’ initial expectations for the first launch into a new hardware category since Tim Cook took over as Apple’s chief executive. The IDC data will only add to concerns that instead of a growth product which will spearhead the next level of growth for Apple, interest in the iWatch as it has been called, was nothing more than a passing fad.
Then again one probably did not need IDC to conclude this: in March, Apple cut the starting price of the Watch by $50 to $299 for the basic Sport model. Since then, retailers such as Best Buy and Target have offered promotions that have cut as much as $200 from other versions of the Watch, in an attempt to encourage buyers.
Apple declined to comment on IDC’s figures, ahead of its earnings report next week. The Watch, a revamped Apple TV and new Apple Music service have so far failed to offset the declines in iPhone and iPad sales, which Tuesday’s figures are expected to show have continued in recent months. We doubt Apple will breakout Apple watch sales data, either next week or ever.

Déjà Vu, The Economic Indicators Look Alot Like 2008

Tech companies, financial institutions are continually cutting jobs.White House put together a report telling the American people that student debt is good. The housing market is starting to look a lot like 2008, bubbles everywhere. The IMF are a bunch of clowns and almost everyone of their predictions did not come true.

Globilization – 80% of Industrialized Nations (U.S. Citizens) Lose

VIDEO: Politician flips out… exposes central-bank scam

From Anonymous:
Below you’ll see Godfrey Bloom, a British politician who served as a Member of the European Parliament (MEP)from 2004 to 2014, brilliantly expose the central-banking scam…

Arrested HSBC FX Trader Had Been Cleared In Bank's Own Internal Probe

While Wall Street was shocked yesterday after the announcement that HSBC's global head of cash FX trading, Mark Johnson, was arrested at JFK on charges of frontrunning a Cairn Energy trade of $3.5 billion pounds, perhaps nobody was more surprised than his employer, HSBC. According to Bloomberg, the Johnson was about to move to the U.S. to take
up a broader position in the firm’s trading division. His arrest therefore, came as a shock to HSBC which wanted to promote the arrested trader to head of the bank’s foreign exchange and
commodities business for the Americas.
The reason for HSBC's surprised was revealed by the FT earlier, which reported that according to HSBC's own internal "investigation" three years ago into a $3.5bn currency trade that US prosecutors now believe was criminally fraudulent, it found nothing wrong with the transaction.

Mark Johnson, HSBC global head of forex cash trading
The HSBC review, conducted in the wake of a sweeping foreign exchange rigging scandal that erupted in 2013, was led by an external lawyer and found no breach of its code of conduct. HSBC declined to comment. The bank was on Thursday reviewing its own investigation of the $3.5bn forex trade to decide whether to support Mark Johnson, its global head of forex cash trading, who was arrested on Tuesday evening at New York’s John F Kennedy airport.

As the FT adds, a solicitor for Mr Scott in London strongly denied the allegations on behalf of her client, who is UK-based. While a warrant for Mr Scott has been issued, US authorities are yet to apply formally for his extradition.

HSBC reviewed its $3.5bn purchase of sterling for Cairn Energy in 2011 along with many other forex trades as part of an internal remediation exercise that it carried out at the request of regulators when the wider forex rigging scandal erupted in 2013.

People briefed on the matter said the bank’s internal investigation found no breach of its code of conduct when it reviewed the trade carried out for Cairn by Mr Johnson and Mr Scott.

How unexpected: a bank looked at its own trades, and found nothing strange despite clear evidence, as revealed by US authorities, showing that Johnson had an explicit intention of frontrunning the client order. It took a DOJ review three years later to stubmel on the smoking gun. As a reminder, the DOJ alleged the traders used a technique known as “ramping” that caused the price of pounds to spike. That spike benefited the bank’s trading book at the expense of the client, who then paid a higher price for the sterling.
When Cairn challenged HSBC about spikes in sterling ahead of the trade, an unnamed supervisor, working with the bankers, then allegedly misled the client by blaming the price increase on a “Russian” bank in the market. The complaint adds that Mr Johnson was surprised Cairn went ahead with the transaction. When told of the company’s commitment, he responded “Ohhh, f***ing Christmas,” using an expletive as an adjective.
Meanwhile, HSBC thought the storm had passed. After banks paid $10bn in fines to US and UK authorities, they complained that spot forex was not included at the time within the UK’s criminal market-abuse regime. A decision by the UK’s Serious Fraud Office earlier this year to drop its criminal investigation into forex-rigging seemed to bolster that argument. However, the Justice Department is accusing the pair of breaching a far more sweeping law: that of wire fraud. The authorities basically accuse them of deceiving their clients for gain. The evidence appears to confirm this allegation.
Roger Burlingame, a former chief prosecutor at the New York office that is bringing the case, and who is now based at law firm Kobre & Kim, explained: “The defendants are charged with wire fraud. This simply means the government has alleged that they’ve used an electronic communication in the US to commit a fraud. “The statute uses the broad, standard definition of fraud; it’s not a technical scheme targeting market abuse in particular. The same statute is used to prosecute any kind of fraud that involves email, phone calls or texts.”
The allegedly criminal trade also slipped through the fingers of the UK's SFO: "a person familiar with the SFO’s thinking told the FT that the agency had not looked at the $3.5bn trade for Cairn and instead was focused on more generalised collusion and rigging within the $5tn-a-day forex market."

Legal experts said that even under UK law, if a bank acting as an agent for its clients can be proven to have defrauded them through deceit then this would be illegal in the UK too. That is important as in order to extradite Mr Scott, the US must persuade a UK court that the alleged wrongdoing was illegal both in the UK and the US at the time.

What are the implications of this arrest for HSBC? The FT concludes that there is a chance it could "cause reputational damage to the global bank’s forex trading business and fuel more calls for HSBC to face full criminal charges. The DoJ has already been criticised for failing to prosecute HSBC after it paid $2bn in 2012 over laundering billions of dollars for Mexican and Colombian drug gangs."
On the other hand considering current HSBC's reputation, this doesn't seem like much of a risk. More importantly, since the alleged wrongdoing happened before it signed a deferred prosecution agreement in 2012 bank insiders think it is unlikely to put it in breach of the deal to avoid prosecution that is due to expire next year.
In other words, while a trial of Johnson may or may not happen, and he may ultimately be found guilty - of wire fraud - the real message here is that perhaps it is time to stop the farce that is internal bank "self reviews" of alleged fraud, which as this incident confirms are merely a waste of time and shareholder funds.

General Mills To Sell Or Close 4 Plants, Putting More Than 1,400 Jobs At Stake

General Mills continues to trim their operation in a move to stay competitive according to this Star Tribune report.  The company’s been quietly cutting jobs since 2014.

General Mills announced Thursday plans to close or sell manufacturing plants in Brazil, China, Ohio and New Jersey as the company continues to slim down costs in response to massive changes in the packaged-foods industry. The moves put about 1,400 jobs at stake.

The Golden Valley-based company has tentatively decided to close its Vineland, N.J., soup-making facility, the original Progresso Soup plant, a move that would cut 370 employees.

The giant foodmaker has reached a definitive agreement to sell its Martel, Ohio facility for $18 million to Mennel Milling Co., which would then become a supplier to General Mills. If the plant, which makes baking mixes, is closed, 180 people would lose their jobs. A spokeswoman for General Mills said Mennel has expressed interest in interviewing the majority of the current employees for jobs at the plant.

Both of these U.S. actions are subject to union negotiations before they become final.

The food company plans to close or scale-back three international plants, which will result in 420 jobs lost in Brazil and 440 jobs in China.

Since 2014, General Mills has cut approximately 3,400 positions globally.

In an unprecedented move, executives earlier this month separated the company’s high-growth products from its low-growth products, tipping off investors to its cost-cutting strategy. The products made at the two U.S. plants the company plans to shed were in the low-growth category.

The company’s divestments in Brazil and China are in response to different challenges.

So much for Project Fear - Bank of England officials admit the British economy has showed NO sign of slowing down in the month since the Brexit vote

• Bank of England report reveals British economy shows no signs of slowing
• Monthly survey finds most companies are continuing as usual post-Brexit
• It flies in the face of warnings issued by Remain campaigners before vote 
• 'As yet, there was no clear evidence of a sharp general slowing in activity'

By James Salmon, Banking Correspondent For The Daily Mail and James Burton, Banking Correspondent For The Daily Mail

The Bank of England last night faced fresh accusations of ‘scaremongering’ after admitting that businesses around the country have taken the referendum result in their stride.

In its first attempt to gauge the mood of firms since the Brexit vote four weeks ago, officials discovered most had adopted a pragmatic ‘business as usual’ approach.

The Bank of England had predicted that uncertainty both in the lead-up to and after the June 23 referendum would cause firms to put off hiring new staff and investing in their business. 

But monthly survey by the institution's agents – who are considered to be its eyes and ears on the ground observing the British economy – found that most companies were continuing with business as usual.

The study flies in the face of the dire warnings issued by Remain campaigners in the run-up to the vote, when there were widespread predictions the nation would suffer a devastating economic blow.

The Bank's agents found that there had been a marked rise in business uncertainty but most companies did not expect their investment or hiring plans to take a hit.

'As yet, there was no clear evidence of a sharp general slowing in activity,' the report said.

Chancellor Philip Hammond seized on the announcement as evidence of Britain's reslilience.

He said the figures were 'proof that the fundamentals of the British economy are strong'.

'As the economy adjusts to the effect of the referendum decision, it is doing so from a position of economic strength,' he said.

Exporters said they expected the weakened pound to have a positive effect on turnover.

However, the agents said fierce competition between supermarket chains and High Street retailers would mean many would look to prevent customers suffering from price rises caused by sterling's fall.

nd there was 'little evidence of any impact on consumer spending' – despite warnings that British confidence would take a massive hit after the shock result.

The report found little evidence of business pulling out of the UK, although some companies were expected to focus more on Europe for growth.

Some businesses even said they were looking to come back to Britain or find more domestic suppliers because of the lower pound.

The Bank's findings were supported by a trading report from the retailer John Lewis.

It said spending in its department stores and at Waitrose supermarkets was 3.2pc higher in the week ending July 16 than a year earlier.

Adam Tyler, chief executive of the National Association of Commercial Finance Brokers, said: 'This latest report from the Bank of England will provide considerable encouragement to the UK business community.

'The findings are certainly consistent with what we are seeing on the ground, namely that most businesses are carrying on more or less as normal.

'Businesses are monitoring events closely, especially news surrounding future trading relations, but the corporate paralysis some suggested has simply not materialised.'

The unexpectedly upbeat news suggests that Bank officials might decide not to push ahead with an interest rate cut next month.

Markets were widely expecting a reduction to counter the effects of a slowing economy, and Bank Governor Mark Carney has several times said he expected a stimulus to be needed.

But top policymaker Kristin Forbes, who will be one of those making the decision, said it was important to 'keep calm and carry on'.

Writing in The Telegraph, Ms Forbes said financial markets had 'stabilised' after an early 'panic'.

And she said there was no evidence 'consumers are cutting back'.

It follows an announcement earlier in the week by the International Monetary Fund that the post-Brexit hit to growth might be lower than initially thought.

After saying that leaving the European Union could trigger a UK recession, the International Monetary Fund now expects the British economy to grow by 1.7 per cent this year and 1.3 per cent next year.

That is weaker than the 1.9 and 2.2 per cent growth forecasts before the referendum, but the UK is still set to be the second-fastest growing economy in the Group of Seven industrialised nations this year – behind the United States – and third-fastest next year, behind the US and Canada. 

HOME LOANS HIT EIGHT-YEAR HIGH 

By Business Correspondent for the Daily Mail 

British households also shrugged off referendum concerns last month as they rushed to buy new homes.

Latest estimates from the Council of Mortgage Lenders showed almost £21billion was borrowed last month - the highest figure for June for eight years.

The dramatic surge came despite claims from the Bank of England that nervous families had been putting off ‘big ticket purchases’ before the referendum.

Last night, Eurosceptic MP John Redwood said the ‘doom-mongers’ at the Bank and the Treasury were being ‘forced to eat their pre-referendum words’.

In another boost to the economy, Government borrowing also fell to £7.8billion in the month of the referendum – less than forecast by economists and the lowest for a June since 2007.

Chancellor Philip Hammond said the figures from the Office for National Statistics demonstrated the ‘underlying strength of the economy’.

Even retailers who endured a fall in sales last month reported that shoppers were put off by wet weather rather than fears about the referendum, according to the ONS.

The largely upbeat report was published as ONS figures also revealed a record 31.7million people aged between 16 and 64 are in work after a dramatic surge in hiring ahead of the referendum.

John Longworth, the former boss of the British Chambers of Commerce, who was ousted after speaking out in favour of Brexit, said: ‘As I predicted, there will be a period of uncertainty in the financial markets but the real economy would be strong and continue as normal. All the indicators are that Britain is doing very well, thank you.’

Mr Redwood added: ‘Employment is at record levels, wages are rising and people are buying are buying homes. This shows that Britain is open for business – it’s business as usual.’

Federal Debt Tops $19,400,000,000,000

By Terence P. Jeffrey | July 20, 2016 | 4:57 PM EDT

(AP Photo/J. Scott Applewhite)

(CNSNews.com) - The federal debt moved above $19,400,000,000,000 for the first time as of the close of business on Tuesday, according to the data released today by the U.S. Treasury.
At the close of business on Monday, July 18, the total federal debt was $19,391,094,247,028.26, according to the Treasury. By the close of business on Tuesday, July 19, it had risen to $19,402,361,890,929.46.
On Friday, Oct. 30, 2015, Congress passed the “Bipartisan Budget Act,” which suspended the legal debt limit until March 15, 2017. President Obama signed that bill into law on Monday, Nov. 2, 2015
At the close of business on Oct. 30, the federal debt stood at $18,152,981,685,747.52.
In the less than nine months since then, the federal debt has increased by $1,249,380,205,181.94
Title IX of the Bipartisan Budget Act is entitled “Temporary Extension of Public Debt Limit.” The Congressional Research Service summary explains that part of the law this way: “The public debt limit is suspended through March 15, 2017. On March 16, 2017, the limit is increased to accommodate obligations issued during the suspension period.”
Prior to President Obama signing the Bipartisan Budget Act, the Treasury had been in a "debt issuance suspension period" that Treasury Secretary Jacob Lew had declared on March 16, 2015. During that "debt issuance suspension period" the Treasury took what it calls "extraordinary measures" to prevent the debt from exceeding what was then the legal limit.

To the mattresses: Cash levels highest in nearly 15 years

From CNBC:
Despite the post-Brexit market rally, fund managers have gotten even more wary of taking risks.
The S&P 500 has jumped about 8.5% since the lows hit in the days after Britain’s move to leave the European Union, but that hasn’t assuaged professional investors. Cash levels are now at 5.8% of portfolios, up a notch from June and at the highest levels since November 2001, according to the latest Bank of America Merrill Lynch Fund Manager Survey.
In addition to putting money under the mattress, investors also are looking for protection, with equity hedging at its highest level in the survey’s history.

Source: BofA Merrill Lynch Global Fund Manager Survey

Indeed, fear is running high as investors believe that global financial conditions are tightening, despite nearly $12 trillion of negative-yielding debt around the world and the U.S. central bank on hold perhaps until 2017.

In fact, fear is running so high that BofAML experts think that it’s helping fuel the recent market rally.
“Record numbers of investors saying fiscal policy is too restrictive and the first underweighting of equities in four years suggest that fiscal easing could be a tactical catalyst for risk assets going forward,” Michael Hartnett, chief investment strategist, said in a statement.
Positioning changed, with a rotation from euro zone, banks and insurance companies shifting to the U.S., industrials, energy, technology and materials stocks.
Fund managers believe that so-called helicopter money will become a reality, with 39% now anticipating the move compared to 27% in June.
Read the full story at CNBC here…

US Investors prepare to indict the Icelandic state

US Investment managers, Eaton Vance and Autonomy Capital, are preparing to have the Icelandic state prosecuted because of their investments. The two funds purchased Icelandic government bonds in the aftermath of the financial crises in 2008, Viðskiptablaðið reports.
According to Eaton Vance and Autonomy Capital the Icelandic state must be all but bankrupt since it they’re not willing reimburse investors according to marked value. They believe that the Icelandic state has violated them with the latest law bill passed in parliament in respond to the panama paper leak this spring. Their claim is that the government and the Icelandic central bank violated them and other investors with their bill of law. The bill in question gave an ultimatum of offshore fund holders and companies, they were either to accept the value set by the central bank of Iceland or take their place in the back of the line and wait for the currency restrictions to be lifted.
Eaton Vance and Autonomy Capital have asked the district courts in Iceland to appoint specialists to investigate the legitimacy of the bill. They believe it goes against the constitution of Iceland. According to their evaluation the fact that they can not be paid in marked value for their IKR is inconceivable. According to Bloomberg.com Icelandic lawyer Pétur Örn Sverrisson is one of many lawyers working on the case for the two funds.

European Central Bank 'running out of tools' to deal with crises across EU

THE Head of the Europe's central bank is running out of tools to deal with the bloc's economic woes, an expert warned ahead of an appearance by Mario Draghi later today.

By Lana Clements

 

GETTY

Mario Draghi, Head of the ECB

Investors hope the bank chief will be able to calm rising fears over the eurozone's financial stability, following Britain's vote to leave the European Union (EU).

The economic picture for the bloc has darkened since the referendum outcome, which has trigged panic over Italy's banks, which hold around £270billion of bad loans on their books.

In a bid to smooth the cracks, the European Central Bank (ECB) is now expected to take monetary action in the coming months.

But Mr Draghi is running out of options, after already going to extreme lengths to boost the economy in recent years.
Earlier this year, the ECB pulled out all the stops in a desperate effort to revive growth by implementing negative interest rates and injecting more than a trillion pounds worth of cash into the economy.

Now Mr Draghi will need to pull a rabbit out of the hat to persuade markets that Brexit will not derail the eurozone economy.

BNP Paribas economist Luigi Speranza said. "The burden of responding to the Brexit shock will remain with the ECB, which is all too aware that it has fewer and fewer tools with which to respond."

Following the Bank of England's wait and see approach towards the economy following the vote to leave, the ECB is likely to adopt a similar attitude today.

But the chief is expected to hint that he could in effect print more money for the bloc or cut interest rates even lower come September.

Florian Hense, an economist at Berenberg, said:"Draghi will likely nurse market concerns about the ECB's monetary policy by using a dovish tone and possibly pointing to further action later this year.

"For the ECB it is important to keep its options open."

 

NASA's Kennedy Space Center firm to lay off almost 300 workers

Security services company Chenega Security & Support Solutions, LLC will lay off 272 employees between Sept. 26-30.

The Chantilly, Va.-based company filed a Worker Adjustment and Retraining Notification with Florida's Department of Economic Opportunity on July 18. Chenega's Florida facility specializes in protective services for NASA and has a location at the Kennedy Space Center.

Enlarge

Chenega Security & Support Solutions, LLC, the security center at NASA's Kennedy Space… more

Hazem Behiry/HuntonBrady Architects

The lay offs are due to the end of the Kennedy Space Center's service contract with Chenega, Karen Rogina, director of corporate communications, told Orlando Business Journal.

"We've submitted a bid proposal for a follow-up contract; we're waiting for award notification," said Rogina. "Whether it's us or a different contractor, we anticipate a seamless transition for all the positions in the new contract."

The company was awarded a fixed-price contract beginning in December 2011 and lasting a maximum of four years, 10 months, according to NASA's public records. The maximum value of the contract was approximately $151.9 million.

Chenega's current services at the Kennedy Space Center include physical security operations, 911 dispatch, firefighting and emergency management and protective services training, according to NASA's public records.

The FED Repeats 2008, The Economy Is Fine Nothing To Worry About, Believe Us

1 in 3 Americans have less than $500 in their accounts, it’s less in Europe. NY real estate market is declining rapidly and it is spreading to many areas. Fed says helicopter money might be on its way here in the US. Fed reports that the economy is doing well, nothing to worry about.

Pennsylvania approves $1.3bn bailout

Pennsylvania lawmakers have approved a financial bailout after a yearlong stalemate over the state’s beleaguered budget. The $1.3 billion revenue package marks the highest election-year tax increase in the state’s recent history.

The grueling debate over the Pennsylvania’s deficit-ridden budget has finally come to a close – for now. The $1.3 billion bailout package is a hodgepodge of tax increases, loans from the state’s medical malpractice insurance fund and new taxes on smokeless tobacco and electronic cigarettes. This makes Pennsylvania the last state to impose taxes on vaping and electronic cigarette products, the News & Observer reported.
The bailout package was necessary after a $31.5 billion spending plan was approved by the Republican-controlled legislature in June. However, it was the second revenue plan to be pitched by Pennsylvania Governor Tom Wolf (D), who initially pushed for a $2.7 billion tax package. The state’s House and Senate Republicans have historically been averse to tax increases.
Wolf’s previous spending plans for the 2015-2016 fiscal year created a budgetary stalemate between his administration and the Pennsylvania General Assembly.
While Wolf initially sought to use the $2.7 billion package to loosen charter school enrollment caps, to begin closing the disparities between the poor and wealthy school districts, this part of the deal was dropped in favor of increased taxes.
The plan uses a fusion of one-time fixes to help the budget, such as borrowing $200 million from the state medical malpractice insurance fund, along with a tax-amnesty program, extending the sales tax to digital downloads, as well as tax increases on both cigarette packs and wholesale taxes on smokeless tobacco products and electronic cigarettes.
The legislature had previously approved supermarkets and other private retailers for wine sales to generate more money from the state’s liquor laws. The House is also backing the legalization of online gaming in order to collect money from licensing fees.
The House approved the bill in a 116-75 vote, and the Senate did so with a 28-22 vote, while conservative lawmakers resisted approving tax increases.
The budget may symbolize true bipartisanship, because, as they say, a good compromise is when both sides feel like they lost.
“It’s become very clear to me that while this revenue package is not the best, it is the best Harrisburg can do, at least today,” Rep. Madeleine Dean (D-Montgomery) told the News & Observer, adding: “And the alternative, not to do our job, is unacceptable to me.”

Via RT. This piece was reprinted by RINF Alternative News with permission or license.

We are in the midst of a sickening crisis created by appalling incentives, driven by sociopathic corporate and political leadership captured by their greedy desire for power wealth and control. The sickness is pervasive and terminal.

by James Quinn

The stock market has reached new all-time highs this week, just two weeks after plunging over the BREXIT result. The bulls are exuberant as they dance on the graves of short-sellers and the purveyors of doom. This is surely proof all is well in the country and the complaints of the lowly peasants are just background noise. Record highs for the stock market must mean the economy is strong, consumers are confident, and the future is bright.
All the troubles documented by myself and all the other so called “doomers” must have dissipated under the avalanche of central banker liquidity. Printing fiat and layering more unpayable debt on top of old unpayable debt really was the solution to all our problems. I’m so relieved. I think I’ll put my life savings into Amazon and Twitter stock now that the all clear signal has been given.

Technical analysts are giving the buy signal now that we’ve broken out of a 19 month consolidation period. Since the entire stock market is driven by HFT supercomputers and Ivy League MBA geniuses who all use the same algorithm in their proprietary trading software, the lemming like behavior will likely lead to even higher prices. Lance Roberts, someone whose opinion I respect, reluctantly agrees we could see a market melt up:

“Wave 5, “market melt-ups” are the last bastion of hope for the “always bullish.” Unlike, the previous advances that were backed by improving earnings and economic growth, the final wave is pure emotion and speculation based on “hopes” of a quick fundamental recovery to justify market overvaluations. Such environments have always had rather disastrous endings and this time, will likely be no different.”
As Benjamin Graham, a wise man who would be scorned and ridiculed by today’s Ivy League educated Wall Street HFT scum, sagely noted many decades ago:
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
Short-term traders can make immediate profits using momentum techniques, following the herd, and picking up pennies in front of a steamroller. Remember your brother-in-law who was getting rich day trading stocks in 1999? Remember your cousin who was getting rich flipping houses in 2005? Remember The Big Short, where the Too Big To Trust Wall Street banks were getting rich creating fraudulent mortgage derivatives and selling them to suckers? There are always profits to be made for awhile. Then the bottom drops out, because fundamentals, cash flow, valuations, and reality matter in the long run.
Lance Roberts points out some inconvenient facts, and I’ll point out a few more.
“It is worth reminding you, that while the markets are moving higher and pushing new highs currently, it is doing so against a backdrop of weak fundamentals, high valuations, and deteriorating earnings.”
History might not repeat itself, but it certainly rhymes. Late in 2007, as the housing collapse was well under way, the stock market hit all-time highs of 1,575 in October. The bulls were exuberant, even as the greatest housing crash in history was evident to everyone except Bernanke and Paulson. Corporate earnings were falling. Valuations were at levels only seen in 1929 and 2000. The so called “doomers” like Hussman, Shiller and Schiff were warning of an impending crash. Very few heeded their warning. In retrospect, the economy was already in recession by December 2007 despite economic reports saying otherwise. GDP and other falsified economic indicators were revised negative years after initially being reported as positive. Familiar?
The stock market dropped 20% from the October high by March of 2008, as Bear Stearns collapsed and struck fear into the hearts of the Wall Street sociopaths. But the Fed and their Wall Street puppeteers needed to keep the game going a little longer so they could short their own fraudulent derivative creations and screw over their clients once more. JP Morgan, which was just as insolvent as Bear Stearns, bought them and restored confidence in the ponzi scheme. The market proceeded to soar by 12% over the next two months. All was well!!! Until the bottom fell out in September. By March 2009, the market had fallen 58% from its October 2007 high.
The market topped out in May of 2015  at 2,126. Since then, corporate profits have been in freefall, consumer spending has been in the toilet, GDP has been barely positive, and virtually every economic indicator has been falling. Valuations are now higher than at the 1929, 2000, and 2007 peaks. The median existing home price of $239,700 is 55% higher than the median price in 2012. At the peak of the housing bubble in 2005/2006 the median price to median wage ratio reached 9.5. In 2012 it had fallen to a reasonable level of 5.6. It currently stands at a bubble like level of 8.3.
The market meandered about for the next seven months going nowhere. It then suddenly dropped in January and February, falling 13% from its May 2015 high. This was unacceptable to central bankers around the globe who believe stock market gains are the only factor reflecting the health of our economic system. Maybe it’s because they are only beholden to bankers, oligarchs, corporate chieftains, corrupt politicians, and unaccountable bureaucrats. Central bankers from around the world have come to the rescue by buying stocks and providing unlimited liquidity to banks and corporations so they can buyback their own stocks. The result, is new record highs.

It has the feel of JP Morgan “rescuing” Bear Stearns and saving the world in early 2008. Smoke, mirrors, negative interest rates, debt creation, money printing and the artificial elevation of stock valuations by central bankers and their politician co-conspirators is not creating wealth. It is creating epic bubbles in stock markets, bond markets, home real estate markets, commercial real estate markets, and automobile markets. John Hussman chimes in with a reality based assessment of their reckless actions:
“Instead, central bankers seem to view elevated security valuations as “wealth.” The longer this fallacy persists, the worse the subsequent fallout will be. I have little doubt that future generations will look at the reckless arrogance of today’s central bankers no differently than we view speculators in the South Sea Bubble and the Dutch Tulip-mania. Unfortunately, there is no mechanism by which historically-informed pleas of “no, stop, don’t!” will penetrate their dogmatic conceit. Nor can we change the psychology of investors.”
Today is just a continuation of the bubble blowing policies of the Fed and their central banker cohorts at the ECB and BOJ. These policies are deranged, illogical, and always result in the destruction of real wealth. Promoting financial engineering, while destroying the incentive to save and invest in the real economy has gutted true investment in our country. This is why good paying jobs have disappeared and we are left with the gutted remains of decades of financialization and globalization. As Hussman points out, our real economy has died a long slow death, drowning in debt.
“One of the hallmarks of the bubble period since the late-1990’s is that the growth rate of real U.S. gross domestic investment has slowed to less than one-quarter of the rate it enjoyed in the preceding half-century. Yet because central banks have stomped on the accelerator at every turn, the quantity of outstanding debt has never been higher, and the combined value of corporate equities and debt (“enterprise value”) is now at the highest multiple of corporate gross value-added since the 2000 bubble extreme.”
Artificially boosting stock prices through convoluted liquidity schemes, devious machinations, backroom central banker deals, sending Bernanke to Japan, and helicopter money dropped on Wall Street only, has just exacerbated the wealth inequality permeating the world. The anger over this blatant pillaging by the .1% who rule the world is reflected in the chaos across Europe and the brewing civil war here in the U.S.
As Hussman notes, no wealth is being created because no productive investments are being made. Mega-corporations buying back hundreds of billions of their own stock to enrich their executives is not a productive wealth creating venture. We are in the midst of a sickening crisis created by appalling incentives, driven by sociopathic corporate and political leadership captured by their greedy desire for power wealth and control. The sickness is pervasive and terminal.
“In a healthy economy, savings are channeled to productive investment, and the new securities that are issued in the process are evidence of that transfer. In an unhealthy economy, and particularly one with very large wealth disparities, a large volume of securities may be created, but they are often simply a way of supporting debt-financed consumption. As a result, no productive investment occurs, and no national “wealth” is created. All that occurs is a wealth transfer from savers to dis-savers. Over the past 16 years, U.S. real gross domestic investment has crawled at a growth rate of just 1.0% annually, compared with a growth rate of 4.6% annually over the preceding half-century. There’s your trouble.”
A chart that caught my eye this week, along with dozens of other data points from the real world, reveals the phoniness of the stock market rally and the underlying weakness of this tottering edifice of debt. We are supposedly in the seventh year of an economic recovery. Corporate profits have been at record highs. Interest rates are at record low levels.
The Fed and the FASB have colluded to allow banks and commercial real estate companies to fake their financial statements and pretend their assets are worth more than they are and to pretend rental income from non-existent tenants in their malls and office buildings can cover their debt payments. And somehow delinquencies and charge-offs are soaring by levels seen during the height of the 2008/2009 financial crisis. It seems all those vacant mall storefronts and all those FOR LEASE signs in front of every other commercial building across America are finally coming home to roost.

This faux economic recovery has been driven by debt, with much of it subprime. The shale oil scam was built on high yield debt and false promises. The Wall Street banks reported fake profits for years by relieving their loan loss reserves created in 2009. Now the table has turned.
The three largest banks in the US—Bank of America, JPMorgan Chase, and Wells Fargo—disclosed that the number of delinquent corporate loans increased by 67% in Q1.

•  JPMorgan’s delinquent corporate loans increased by 50% to $2.21 billion
•  Bank of America’s delinquent loans increased 32% to $1.6 billion
•  Wells Fargo’s delinquent loans increased by 64%, to $3.97 billion

The banking industry added $1.43 billion to the total money it has set aside to cover bad loans in Q4 2015, according to the FDIC. Making bad loans to deadbeats can make profits look spectacular in the short-term, but interest and principal can’t be paid with a cool business plan and a narrative. Cash flow is a necessary ingredient to servicing debt in the real world. The fun has just begun. Fitch Ratings just reported that the default rates for junk bonds rose to 3.9% this month, up from 2.1% in April 2015.
The “tremendous” auto recovery which drove sales (I use the term loosely since 31% of sales are actually leases and the rest are financed over an average of 67 months) from 10 million in 2010 to 18 million in 2015 has been completely driven by easy money provided to Wall Street. It’s amazing how many vehicles you can sell by doling out $350 billion in 0% loans and allowing “buyers” to finance 100% of the purchase.

When they started to run out of legitimate suckers who liked being perpetual debt slaves, they used the tried and true method that worked so well with housing in the mid-2000s – loaning money to losers who weren’t capable of repaying them. This Wall Street mindset is driven by the free money provided them by the Fed. You borrow from the Fed at 0%, lend it to deadbeats at 12% for 72 months so they can “buy” that $40,000 Cadillac Escalade and boost the economy. Over 20% of all auto loans are now being made to subprime (aka deadbeat) borrowers. Now the shit is hitting the fan belt.

Serious Delinquency Rates for Auto Loans by Term

	Risk Tier
Loan Term	Subprime	Prime	Super prime
49-60 months	22.4%	3.4%	0.4%
61-72 months	22.8%	5.0%	0.9%
73-84 months	30.7%	7.1%	1.8%

Financing 100% of overpriced automobiles, extending terms, pretending you will get repaid, and recording it as a sale is the corporate/banker method of creating wealth. Auto loan terms between 73 and 84 months  more than doubled between 2010 and 2015. One quarter of all loans originated in Q3 2015 were between 73 and 84 month terms, compared to just 10% in Q3 2010. The average new-car loan rose to $29,551 during the fourth quarter of 2015, up more than 4% over the past year, according to Experian, one of the three major credit-reporting agencies.
The chickens are coming home to roost for subprime auto lenders and investors, with Fitch Ratings warning delinquencies in subprime car loans had reached a high not seen since October 1996. The number of borrowers who were more than 60 days late on their car bills in February rose 11.6% from the same period a year ago, bringing the delinquency rate to a total 5.16%. Subprime lending always ends in tears. Wall Street is probably betting against these packages of subprime slime while simultaneously selling them to their muppet clients. History rhymes.
These subprime auto loans look positively AAA compared to the hundreds of billions in subprime student loans distributed like candy by Obama and his government minions to artificially lower the unemployment rate and again boost the economy. Student loan delinquencies are already skyrocketing before the $400 billion doled out in the last four years has come due. The official delinquency rate reported by the government of 11% is another falsehood.  The delinquency rate is really 17% when loans in deferment and forbearance — for which payments are postponed due to any reason — are included. The taxpayer will eventually foot the bill for at least $400 billion in losses.

We’ve been borrowing from the future for the last 16 years because real economic growth was killed by Greenspan, Bernanke, Yellen and the rest of the Fed yahoos. The stock market has returned 60% since the 2007 peak, three times the growth in corporate profits and GDP. The all-time highs in the stock market have been driven by the $3.4 trillion increase in the Fed’s balance sheet, hundreds of billions in stock buybacks, PE expansion, and ZIRP. The valuation of the median stock is now the highest in history.

For all I know the stock market could continue to rip higher. Madness knows no bounds. The general public is not involved in this madness. They were wiped out twice in the space of eight years. Wall Street and their media mouthpieces have been unable to lure the average Joe back into the casino because the average Joe has been impoverished by Fed policies designed to benefit the .1%. The Wall Street lemming herd has gone mad, but I’m not sure they will recover their senses before they burn the entire demented financial system to the ground. But enjoy the all-time highs while they last.
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” ? Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

Italy’s banking sector is looking increasingly vulnerable and analysts are starting to fear that the euro zone’s third largest economy could “go under,” warning of the potential for bank runs, credit rating downgrades and the threat to the wider European banking system.

We have reports from readers in Italy that ATM machines are being emptied. A run on banks is beginning in Italy.

https://www.armstrongeconomics.com/world-news/sovereign-debt-crisis/banking-panic-in-italy/

Bank runs, bailouts and downgrades? What Italy’s future could look like

Italy’s banking sector is looking increasingly vulnerable and analysts are starting to fear that the euro zone’s third largest economy could “go under,” warning of the potential for bank runs, credit rating downgrades and the threat to the wider European banking system.
“Italy could be a bigger threat to euro zone stability than Brexit,” Andrew Edwards, chief executive of London spread better ETX Capital said in a note on Tuesday. “The nation has a creaking banking sector that could undo all the European Central Bank‘s efforts to save the euro if not handled correctly.”
“Unlike other countries, Italy did not carry out a full spring clean of its banks post-Lehmans and there is trouble brewing with the country’s banks holding 360 billion euros ($400 billion) in non-performing loans (NPLs) – a third of all the euro zone’s bad debt and about a fifth of all consumer loans in Italy,” Edwards noted, highlighting the extent of Italy’s banking vulnerabilities.

http://www.cnbc.com/2016/07/06/bank-runs-bailouts-and-downgrades-what-italys-future-could-look-like.html

While Central Banks Have Gone All In, Delinquency Rates Rising. Is A New Banking Crisis imminent?

Technically Speaking: Breakout Or Market Meltup? – Lance Roberts
While Central Banks have gone all in, including the BOJ with additional QE measures of $100 billion, to bail out financial markets and banks following the “Brexit” referendum, it could backfire badly if the US dollar rises from foreign inflows. As shown below, a stronger dollar will provide another headwind to already weak earnings and oil prices in the months ahead which could put a damper on the expected year-end “hockey stick” recovery currently expected. 
https://realinvestmentadvice.com/technically-speaking-breakout-or-market-meltup/
Delinquency Rates Rising – Is A New Banking Crisis imminent?

The delinquency rate on loans is key in understanding banking. It answers one question: what percentage of loans is overdue for payment? The delinquency rate is by far the most useful indicator for “credit stress.” It seems, however, as if delinquency no longer counts. Few are paying attention to the quick and sudden rise of the delinquency rate. What does it tell us and is a new banking crisis imminent?

…

^{A clear danger sign: delinquency rates on commercial and industrial loans are creeping up. Source: St Louis Fed}

^{In dollar terms the shift is even more pronounced. This is of course the result of our staggering debt levels, which are not apparent in the relative numbers. Source: St Louis Fed}

^{In line with increasing loan delinquencies, charge-off rates on commercial and industrial loans are picking up as well (charge-off rates tend to lag somewhat). Source: St Louis Fed}

Even if we are on the verge of a new banking crisis, the headline number will never tell us so.
https://mises.org/blog/delinquency-rates-rising-new-crisis-approaching
Former FDIC Chair Sheila Bair expects more pain ahead for US banks
“I think it’s been ill-advised to rely on monetary policy, but that still appears to be the only game in town.”

http://www.cnbc.com/2016/07/11/former-fdic-chair-sheila-bair-expects-more-pain-ahead-for-us-banks.html
Gerald Celente-Panic Of 2016 At The Doorstep

Published on Jul 10, 2016

At the beginning of this year, Gerald Celente, the publisher of the Trends Journal, put out a magazine cover that predicted the “Panic of 2016.” How close are we to the “panic”? Celente says, “We are at the doorstep, and it’s ready to go. Look at gold prices. Look at how they have been going up. They are up 28% year to date. I ask people, would you buy a bond where you know you are going to get less back than what you paid for it in 10 years? Or, do you think gold prices will be higher in 10 years than they are now? That’s why you are seeing gold as the safe haven.”

Join Greg Hunter as he goes One-on-One with Gerald Celente, publisher of The Trends Journal.
All links can be found here:  http://usawatchdog.com/separate-laws-…

Ireland exposes the flaws of using GDP as an economic measure

by Shaun Richards
Firstly let me welcome you all to what is already being called MayDay in the UK as it will see our second female Prime Minister. However as I noted yesterday there has been quite an event in the world of economic measurement that has occurred across the Irish Sea and it is something which has taken place in spite of all the “improvements” that were made with the ESA 10 changes. Indeed more than a few of you may be wondering if someone has been indulging rather too liberally in one of the boosts to GDP (Gross Domestic Product) that it brought namely the addition of illegal drugs such as cocaine.
The Financial Times summarised it thus.

That is the highest level of growth for decades and far outstrips the original estimate of Irish economic activity last year, which the official Central Statistics Office had put at 7.8 per cent. A growth rate of more than 26 per cent is nearly three times the highest level recorded during Ireland’s Celtic Tiger boom years in the early 2000s.

To be precise the annual rate of growth was revised upwards to 26.3% with the first quarter of 2015 being the main culprit as it recorded economic growth of 21%. It was only on the 22nd of last month that I pointed out that the Irish economy was doing well so here is the comparison with what we were previously told.

Preliminary estimates indicate that GDP in volume terms increased by 7.8 per cent for the year 2015.  GNP showed an increase of 5.7 per cent in 2015 over 2014.

As you can see 26.3% is the new 7.8%! This of course was quite a rate of economic growth in itself. Also we should not move on without considering the point that this is treble the rate of growth claimed in the Celtic Tiger boom which of course ended in a painful bust.

There is another consequence of all this and let me explain with something else from the 22nd of June.

In 2015 GDP was 203.5 billion Euros and GNP (Gross National Product) was 171.9 billion Euros.

I was using this to explain a problem I will return to in a moment. But you will get my point if I tell you that the new revised 2015 GDP is 243.9 billion Euros and the new 2015 GNP is 194 billion Euros. So they are 20% higher and 13% higher respectively! Let us just remind ourselves that this is for the year just gone and consider the scale of this when sometimes changes in GDP growth rates as small as 0.1% are debated and indeed forecast.
The gap between GDP and GNP
This has been a regular topic on here concerning Ireland.

The difference is that a lot of businesses in Ireland are non-domiciled there and send the money home. They want to take advantage of the low corporation tax rate and other benefits but do not consider it to be home. As you can see it is a big deal.

The difference is that the “big deal” as I called it has just got a lot bigger. The gap was previously reported as 31.6 billion Euros and is now 49.9 billion Euros. But this is only part of the story as GNP rose by 18.7% itself in 2015.
An Inflation Problem
We are regularly told that there is no inflation in the Euro area and consumer inflation in Ireland has been close to zero for some time. Thus you will not be surprised to note my eyes alighted on these inflation measures. The deflator for GDP rose by 4.9% in 2015 and the deflator for GNP rose by 4.5%. So if Ireland had its own monetary policy and used the widest inflation measure of all for monetary policy then it certainly would not have an official deposit rate of -0.4%!
Care is needed as consumer inflation is a significant part of the GDP deflator (24% in the UK for example) but is far from all of it. The catch is that as I look elsewhere I see few signs of the difference. For example we know that there is some services inflation around but if we look it falls well short of what we are told.

Services prices in Quarter 1 2016, as measured by the experimental SPPI, were on average 1.5% higher in the year when compared with the same period last year.

Actually services inflation was a fair bit higher early in 2014.
There was a burst of inflation in the output price index for manufacturing early in 2015 as the annual rate rose to 9.5% but by the end of the year this had faded. But we have a problem as you see output is recorded as much higher and it seems to have done so accompanied by higher prices! If only we could all do that…….
Ch-ch-changes
This came in the world of net trade so let me take you back to where we thought we were only a few short months ago.

Import growth during the year of 16.4 per cent outpaced that of exports at 13.8 per cent.

I pointed out back then that Ireland was doing its bit for world and European trade. However that story has expired also and been replaced by a new version.

On the expenditure side of the accounts exports grew by 34.4% between 2014 and 2015 (Table 6, at constant prices). Imports increased also, by 21.7%, over the same period.

So as you can see there was an exports surge and in fact rather than helping demand in other nations Ireland in fact has increased its own current account surplus. So export led growth for it but not so good for its trading partners as we observe yet another large change.

The revised current account surplus for 2015 was €26,157m, an increase of €22,954m on 2014.

The current account surplus is now on its way to 15% of GDP. So is it Ireland that has used a lower exchange rate to boost its exports in the same way as Germany? That point is a little tongue in cheek but there is a point to it.
Manufacturing
I did point out that there was a potential issue with prices being higher whilst output also surges. As the surge in prices was taking place then quarterly exports of merchandise trade rose from 30.1 billion Euros to 46.5 billion Euros. Apart from the obvious question of how this happened without the official statisticians noticing there is a lot which requires investigation here. The national accounts do provide a clue of sorts.

Industry (including building) advanced by 87.3% ( in 2015)

That happened without anybody noticing it for quite a while.
Comment
Let me now bring in some of the factors which have been at play here. A lot of aircraft leasing activity takes place in Ireland. This has been booked as an increase in assets and therefore GDP. An explanation has been provided by Colm McCarthy on the Irish Economy website.

There are roughly 750 commercial passenger aircraft on the Irish register for April 2016. The number actually based at Irish airports and serving Irish traffic is only about 100. Ryanair registers all its 340 aircraft here but only 10% are based at Irish airports.

There is debate over the numbers but not the principle. Also it appears that factors such as the patents of international firms have been booked in Ireland and counted in GDP. Did I say firms as this from the Central Statistics Office might mean one firm?!

As a consequence of the overall scale of these additions, elements of the results that would previously been published are now suppressed to protect the confidentiality of the contributing companies, in accordance with the Statistics Act 1993.

Even the Governor of the Central Bank of Ireland is concerned by this according to the Irish Times.

The Irish Times has learned Prof Lane met the CSO on Monday and made known his concerns that the GDP growth figures do not accurately reflect economic activity in Ireland.

Please do not misunderstand me I think that the Irish economy is growing as there are other measures such as the rise in employment. But the sad part is that we now have very little idea of at what rate! Rather ironically Ireland will be paying more to the European Union because of all of this and because of money it may never see. At least the rate of growth for net national income was a more subdued 6.5%. But it is time to hear from Marvin Gaye one more time.

Oh, what’s going on?
What’s going on?
Ya, what’s going on?
Ah, what’s going on?

Meanwhile I did point out on the 22nd of June that other measures pose questions as to the whole narrative.

Ireland and Luxemburg showing a very large difference between these two measures of household welfare. Using the AIC measure, Irish households are closer to Italian than Danish levels of welfare.

As the television series Soap used to tell us “Confused? You soon will be!”
Oh and as Claus Vistesen points out

Bonkers … it will likely lead to an upward revision of EZ GDP growth of 0.3pp in 2015. That’s 1.9% then, punchy

Cargo Volume At Chinese Ports Falls To 7-Year Low

More bad news for the world economy as China watches port volume fall to a 7 year low according to this WSJ report.

Cargo volumes through China’s ports grew at the slowest pace in seven years in the first half of 2016, according to an industry report that showed the country’s trade slump hitting its biggest gateways.
China port container volumes rose 2.5% in the January-June period from a year ago, research group Alphaliner said in a report this week, and the ports of Shanghai and Shenzhen—China’s two biggest sites for imports and exports—both saw container traffic decline 1%.
“Overall container volumes at Chinese ports are growing at the slowest pace since 2009,” Alphaliner said in its weekly newsletter on shipping industry trends. Chinese ports registered a 4.6% drop in volumes that year.
The sluggish business at China’s main gateways comes as the country’s trade downturn is accelerating. The China General Administration of Customs reported Wednesday that China’s exports, which have long been a central piece of the global economy, declined 4.8% in May while imports fell 8.4%.

Truck plows into crowd, killing at least 84 in Nice, France

Scene of chaos at Bastille Day celebration

Reuters

French police and forensic officers investigate the bullet-ridden truck that ran down scores of people Thursday night in Nice, France.

NICE, France — A truck driver barreled for more than a mile through Bastille Day revelers thronging the famed seaside promenade here Thursday, killing scores of people and sending a terror-scarred nation reeling again.
The driver slammed the massive vehicle, which an official said was loaded with explosives and weapons, into a crowd packed with families that had come to see the celebratory fireworks, leaving bodies in his wake.
At least 84 people were killed and 18 critically wounded, a French official said.

President François Hollande said in an early-morning televised address that the attack had “undeniable traits of terrorism.”

Truck driver kills dozens in Nice, France

(0:58) A truck driver plowed through a crowd gathered on a coastal promenade at a Bastille Day celebration on Thursday in Nice, France, killing several dozens of people and sending hundreds fleeing from the scene. Photo: Getty Images
“France has been struck on its national day — July 14, a symbol of freedom — because human rights are denied by fanatics and France is of course their target,” Hollande said.
Witnesses said the driver steered the truck into the crowd deliberately, maintaining speed as he ripped through the revelers. The rampage ended in a hail of police bullets that killed the driver, bringing the truck to a halt, officials said.
“We thought he lost control. We all shouted: ‘Stop! Stop!’” said Nader Shafa’ai, an Egyptian tourist, who captured the mayhem on his video camera as the truck came careering through the crowd. “Then it was clear it wasn’t an accident.”
The footage Mr. Shafa’ai shot shows French police as they surrounded the white truck and fired rounds at the driver. The footage also shows scores of bodies under and behind the truck.
“I filmed it because I was in shock,” Shafa’ai said.

Reuters

French soldiers and police secure the area Thursday in Nice, France.

Christian Estrosi, the president of the region, said the truck driver fired shots in the crowd as he drove. Police searching the truck found it was loaded with arms and grenades, he said.
Images on French TV showed a cargo truck windshield pocked with bullet holes.

Citigroup Has More Derivatives than 4,701 U.S. Banks Combined; After Blowing Itself Up With Derivatives in 2008

Derivatives at Bank Holding Companies, March 31, 2016 (OCC Report)

By Pam Martens and Russ Martens: July 14, 2016
According to the Federal Deposit Insurance Corporation (FDIC), as of March 31, 2016, there were 6,122 FDIC insured financial institutions in the United States. Of those 6,122 commercial banks and savings associations, 4,701 did not hold any derivatives. To put that another way, 77 percent of all U.S. banks found zero reason to engage in high-risk derivative trading.
Citigroup, however, the bank that spectacularly blew itself up with toxic derivatives and subprime debt in 2008, became a 99-cent stock during the crisis, and received the largest taxpayer bailout in U.S. financial history despite being insolvent at the time, today holds more derivatives than 4,701 other banks combined which are backstopped by the taxpayer.
The total notional amount of derivatives sitting at Citigroup’s bank holding company is $55.6 trillion according to the March 31, 2016 report from the Office of the Comptroller of the Currency (OCC), one of the regulators of national banks. (See chart above.) Out of Citigroup’s total notional (face amount) exposure of $55.6 trillion in derivatives, $52 trillion of that is sitting at its insured depository institution, Citibank, which is still decidedly too-big-to-fail and would require a taxpayer bailout again in a collapse.
If you add in four other mega Wall Street banks (JPMorgan Chase, Goldman Sachs, Bank of America and Morgan Stanley) to Citigroup’s haul in derivatives, there is a staggering $231.4 trillion in derivatives or 93 percent of all derivatives in the entire FDIC banking universe of 6,122 banks and savings associations.
Didn’t the Obama administration tell the public that allowing these Frankenbanks to continue to gamble in derivatives while putting the U.S. economy and taxpayers at risk was going to end under his Dodd-Frank financial reform legislation passed in 2010? How could there have been meaningful reform of Wall Street if Citigroup and these other four banks are still holding a loaded gun to the taxpayers’ head?
Under the “Push-Out Rule” (Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), insured banks were not going to be allowed to hold these derivatives when the rule was fully implemented in July 2015. The mega banks would have to “push-out” the derivatives to their uninsured affiliates so that the taxpayer wasn’t on the hook for future losses or bank implosions. But in December 2014, Citigroup was able to slip language into the must-pass spending bill that effectively repealed this critical Dodd-Frank provision and President Obama signed the bill into law.
According to OCC data, prior to Citigroup’s massive bailout in 2008, it held $41.3 trillion in notional derivatives as of March 31, 2008. Instead of regulators forcing the unruly bank to pare back its exposures, its tally today of $55.6 trillion shows it has been allowed to grow its derivative risks by 35 percent.
According to the General Accountability Office, this is how much Citigroup needed to remain afloat the last time it blew itself up: On October 28, 2008, Citigroup received $25 billion in Troubled Asset Relief Program (TARP) funds. Less than a month later, it was teetering again and received another $20 billion. But its capital moorings were so shaky that it simultaneously needed another $306 billion in government asset guarantees. And all of this disclosed money spigot came on top of the Federal Reserve secretly funneling to Citigroup over $2 trillion in cumulative loans over more than two years at interest rates frequently below 1 percent.
The official report on the financial crisis of 2008 from the Financial Crisis Inquiry Commission explained the interconnected nature of the derivatives crisis as follows:

“Large derivatives positions, and the resulting counterparty credit and operational risks, were concentrated in a very few firms. Among U.S. bank holding companies, the following institutions held enormous OTC derivatives positions as of June 30, 2008: $94.5 trillion in notional amount for JP Morgan, $37.7 trillion for Bank of America, $35.8 trillion for Citigroup, $4.1trillion for Wachovia, and $3.9 trillion for HSBC. Goldman Sachs and Morgan Stanley, which began to report their holdings only after they became bank holding companies in 2008, held $45.9 and $37 trillion, respectively, in notional amount of OTC derivatives in the first quarter of 2009. In 2008, the current and potential exposure to derivatives at the top five U.S. bank holding companies was on average three times greater than the capital they had on hand to meet regulatory requirements. The risk was even higher at the investment banks. Goldman Sachs, just after it changed its charter, had derivatives exposure more than 10 times capital. These concentrations of positions in the hands of the largest bank holding companies and investment banks posed risks for the financial system because of their interconnections with other financial institutions.”

The counterparties to this mass gluttony in derivatives by the mega Wall Street banks included the two government sponsored enterprises, Fannie Mae and Freddie Mac, and the large insurer, AIG.
In May of this year we reported that the U.S. government is still quietly paying out billions of dollars to Wall Street banks for derivatives held by Fannie Mae and Freddie Mac, companies the government was forced to place into conservatorship because of their massive losses during the 2008 crisis. In April of this year we reported the following about AIG’s derivative losses during the crisis:

“AIG received a taxpayer backstop of $185 billion and had to be taken over by the Federal government. But the bailout of AIG was in reality a backdoor bailout of the biggest Wall Street banks and their foreign big bank kin who had used AIG as a counterparty on their casino-like derivative bets and for securities loans that AIG could not make good on.

“It was eventually revealed that major Wall Street banks, foreign banks and hedge funds received more than half of AIG’s bailout money ($93.2 billion). Public pressure eventually forced AIG to release a chart of these payments, but the chart showed just a narrow window of disbursements from September to December 2008.  How vast the full total of payments were to the big banks is yet to see the light of day.”

The banking crisis and economic collapse in 2008 was the largest financial disaster in the United States since the Great Depression. To understand that the Obama administration and the U.S. Congress have not only failed to rein in the risks of a recurrence but have actually allowed the risks to dramatically grow, is an indictment of our entire political system and a siren call for the political revolution that Senator Bernie Sanders has now surrendered to the Clinton Wing of the Democratic Party — otherwise known as the Wall Street Banksters.
Related Article:
Interconnected Banks Pose Greatest Threat to U.S. Financial System

Dr. Lacy Hunt: Yes, The Economy Is Actually That Bad

by Robert Johnson
Debt. It’s good, it’s bad, there’s too much of it, the government keeps piling on more of it. What’s the deal?
You may have none, you may have too much, but one thing is certain, debt is a major driving force behind the world economy. Both in our personal lives and in the lives of immense corporations struggling to hold on in an ever-changing economy. Make no mistake, debt patterns will continue to shape all of our financial landscapes.
Given this unavoidable fact of life, when we had the chance to sit down with Dr. Lacy Hunt of Hoisington Investment Management to discuss his upcoming appearance at our Irrational Economic Summit in October, debt is where we began.

U.S. consumers have racked up almost $1 trillion in credit card debt, despite some saying this is a great sign, that this means consumers are optimistic and will buoy the economy, Dr. Hunt does not agree.

He immediately points out that debt is a two-edged sword and that if additional indebtedness doesn’t work to create income to pay down interest and principle, it is a no-win deal.
See, when you agree to spend borrowed money today, you’re leveraging that against your future income. That means that the dollars you’ll earn tomorrow are already spent and will not be there to use in the future for anything else. Seems obvious, right?
Of course, this is not a problem if you expect your income to increase as time marches along and your payments become due. But how many people in America are facing an increase in personal income when the standard of living hasn’t changed one iota in 20 years? Not many.
Unfortunately, this is not on the forefront of most people’s thoughts when they go to buy something like a new car. Dr. Hunt points out that new car sales are buoying portions of the economy, but that credit-lending standards have slipped, much like they did for mortgages prior to the housing crisis in 2008 (Harry has been talking about the auto sector soon getting turned on its head for months!).

To illustrate this, Dr. Hunt points out that the average automobile loan has gone from six years to eight in order to allow less qualified buyers to purchase more expensive cars than they might otherwise have been able to afford.
This allows buyers to make smaller payments over a longer term, but also exposes them to the risk of missing any one of those 96 monthly payments.
But what about student debt? That has always been one way to invest in ourselves, and our children, and foster new revenue streams to pay down interest and principal. Dr. Hunt has bad news on that front, as well.
From Dr. Hunt’s interview with Rodney Johnson:
Unfortunately, the economy is performing so poorly that a lot of our college graduates are coming out and they’re having to settle for jobs that are not much better than what they would’ve received if they had gone directly into the labor force from high school.
Even classically “good debt” like a college education has become a non-performing investment. That’s scary because Dr. Hunt also points out that this deluge of debt, and our eagerness both as a country and as consumers to incur the “wrong type of debt” is killing growth.
This debt is slowing GDP growth and the growth of our personal incomes and investments. “That’s why”, Dr. Hunt points out, “the standard of living is unchanged from where it was 20 years ago.”
These are some cold, hard facts from one of the premier investment adviser’s in the country. It’s tough to read and painful to understand, but it’s true. And ideally, we’re in the business of truth and understanding the challenges facing all investors.
If you’re up for more of it, stay tuned because we’ll be bringing you excerpts from interviews with all our upcoming Irrational Economic Summit speakers in the weeks leading up the October event.
Thanks and play safe,

 
Robert Johnson
Editorial Director, Dent Research