Friday, June 10, 2016

Banks confront negative interest rates with plans to store titanic bundles of money on-site

duck tales
(CORY DOCTOROW)  The world’s central banks, freaked out about huge leverage by financial institutions and borrowers and unwilling to engage in economic stimulus themselves, have been moving interest rates lower and lower, until now, many banks are offering negative interest rates, meaning that buying $100 worth of treasury bills today will return $99 in cash tomorrow — hoping that this will incentivize banks to issue enough loans to make up for politically impossible governmental fiscal stimulus.
Retail banks, who normally transfer much of their reserves into t-bills, are unwilling to lose money in the deal, and so they’re pondering the alternative: just literally piling up mountains of cash in their vaults, where at least they won’t have to pay for the privilege of loaning it to a government.
The logistics of storing millions in cash are formidable, from security and insurance to the fact that the European Central Bank has discontinued the €500 note, making the resulting piles of cash much, much bigger.
This isn’t just a story about the absurdity of vaults full of cash, though: record low interest rates are gutting the pensions of savers who thought they had enough for comfortable annuities but are discovering that interest rates are so low that annuities won’t even provide subsistence. This creates impossible dilemmas, like, “Do I just start living on my capital and hope I die before it runs out?” or “Do I rely on my working age children, who are themselves trying to save for sky-high property down payments and support their kids, to support me, too?”
Economists are way way late in the game acknowledging the need for more demand by calling for more fiscal spending.
But central banks ex the Fed act as if they can force business to take up the slack, as if banks can noodle them full of loans like geese and they will be forced to invest and hire as a result.
Second is that banks have to be leery of making any long-term loans now. Even though no end of ZIRP and negative interest rates is in sight, they know if the monetary authorities ever are in a position to increase interest rates, they will show losses on intermediate and long-term assets unless they have adjustable interest rates. And the losses will be biggest on the riskier loans, since credit spreads typically widen in a tightening cycle.
So it should come as no surprise that banks are starting to try to find ways to circumvent the central bankers’ nutty scheme. As we reported in March, some small Barvarian banks said earlier this year they were looking into keeping cash on premises rater than pay for parking deposits with the Bundesbank. Yesterday, Commerzbank saber-rattled that it might follow suit. . Japanese banks are also trying to slip the leash. From the Financial Times:

Saudi Arabia Banning Short Selling Against the Currency Peg

by Martin Armstrong
Saudi Arabia Flag
Saudi Arabia has banned financial products that amount to a short-position against the rial. The measure indicates high degree to which the peg is starting to come under attack. The government has announced a wave of layoffs in the public sector. This is an absolute first. The Middle East was considered beyond economics because of oil. Everything is changing.
We will see the same situation with respect to the Euro. If Britain does not leave the EU, it will stand in silence and what its financial standing in the world collapse. Brussels will adopt the same type of policies and just make it illegal to disagree with their policies.

It Begins, The Yuan Goes Global As China Grants US First Investment Quota

 Consumer credit slows in April, people are maxed out. Minimum wage hike hits many areas and employers start to reduce hours and layoff people. Hiring tumbles as companies put out more job openings. Student loans completely backfire, students are in more debt and have no jobs, this entire bubble is a disaster. Yuan goes global, China extends its hand to US and grants the US first investment quota.

Kill List: Smashing the 'B' in BRICS

The stakes could not be higher. Not only the future of the BRICS, but the future of a new multipolar world is in the balance. And it all hinges on what happens in Brazil in the next few months.

Let’s start with the Kafkaesque internal turmoil. The coup against President Dilma Rousseff remains an unrivalled media theatre/political tragicomedy gift that keeps on giving. It also doubles as a case of information war converted into a strategic tool of political control. 

A succession of appalling audio leaks has revealed that key sectors of the Brazilian military as well as selected Supreme Court justices have legitimized the coup against a President that has always protected the two-year-old Car Wash corruption investigation. Even Western mainstream media was forced to admit that Dilma did not steal anything but is being impeached by a bunch of thieves. Their agenda; to stifle the Car Wash investigation, which may eventually throw many of them in jail.
The leaks also unveiled a nasty internecine carnage between Brazilian comprador elites — peripheral and mainstream. Essentially the peripherals were used as lowly paperboys in Congress for the dirty work. But now they may be about to become road kill – along the illegitimate, unpopular, interim Michel Temer “government”, led by a bunch of corrupt-to-the-core PMDB politicians, the party that is heir to the sole opposition outfit tolerated during the 1960s-1980s military dictatorship.  
Meet the vassal chancellor
An insidious character in the current golpeachment scam is the interim Minister of Foreign Relations, senator Jose Serra of the PSDB party, the social democrats turned neoliberal enforcers. In the 2002 presidential election – which he lost to Lula — Serra had already tried to get rid of peripheral Brazilian oligarchies.
Yet now he’s incarnating another role — perfectly positioned not only to retrograde Brazilian foreign policy to some point around the 1964 military coup, but mostly as the Beltway’s point man inside the coup racket.
Exceptionalistan’s key ally in Brazil is the oligarchy in Sao Paulo, the wealthiest state and home to the financial capital of Latin America. This is Brazil’s A-list. It’s from their ranks that an eventual “national savior” may eventually spring up.   
Once the peripherals are history, then no holds would be barred to criminalize – and imprison – an array of leftist leaders, Lula included, as well as manufacture a fake election legitimized by a noxious Supreme Court justice, Gilmar Mendes, a PSDB stooge.
It all hinges on what happens in the next two months. The prosecutor general finally asked the Supreme Court to throw three top peripherals in jail; they are all accused of plotting to derail the Car Wash investigation — an extremely complex juridical-political-police network of myriad concentric/parallel circles.  

Meanwhile, the final judgment of Dilma’s impeachment at the Senate is bound to happen on August 16 – 11 days after the start of the Olympic Games. The coup plotters suffered a heavy blow as they were trying hard to accelerate the proceedings. As it stands, the outcome is uncertain; after the leaks, four to five senators are already wavering, as the leaks also implicate Temer personally. The “leader” of a zero-credibility, corruption-crammed scam, he’s among the targets of several corruption investigations and has just been banned from running to political office for the next 8 years.   The Brazilian mainstream media monopoly (five families) – popularly referred to as PIG, the Brazilian acronym for Pro-Coup Media Party – has changed its anti-left tune and is now also going after selected members of the Temer racket.
According to the constitution, if both the Presidency and Vice-Presidency are vacated in the last two years of a given term, it’s up to Congress to elect the new President.
This implies two possible scenarios. If Dilma is not impeached, it’s increasingly likely she will call for new presidential elections before the end of the year.
If she is impeached, the PIG will tolerate the stooge-crammed Temer interim racket until January 2017 at the most. The next step would be what Serra and about-to-be-jailed Senate leader Renan Calheiros are campaigning for; the end of direct presidential elections and the onset of Brazilian-style parliamentarianism.

The man best positioned to be the national savior in this case is former president Fernando Henrique Cardoso – also former “Prince of Sociology” and a major star (during the 1960s and early 1970s) of the dependency theory, then metamorphosed into an avid neoliberal. Cardoso is a very close pal of both Bill Clinton and Tony Blair. The Beltway/Wall Street axis loves him. Cardoso would be “elected” mostly by the pack of Congress hyenas who got the Dilma impeachment rolling on April 17.   The hard node of golpeachment goes way beyond peripheral Brazilian elites. It is comprised of a political party (the PSDB); the Globo media empire; the Federal Police (very cozy with the FBI); the Public Ministry; most of the Supreme Court; and sectors of the military. Only the Beltway/Wall Street axis has the means and the necessary pull to regiment all these players – by hard cash, blackmail or promises of glory. 
And that ties in with key unanswered questions regarding the recent audio leaks. Who taped the conversations. Who leaked them. Why now. Who profits from a nation in total political/economic/juridical chaos, with virtually all institutions totally discredited. 
Neoliberalism or chaos
Those were the days when Washington could mastermind, with impunity, an old-fashioned military coup in its backyard – as in Brazil 1964. Or as in Chile during the original 9/11 – in 1973, as seen through crack Chilean film maker Patricio Guzman’s moving documentary about Salvador Allende.
History, predictably, now repeats itself as farce as the 2016 coup has turned Brazil – the 7th largest economy in the world and a key Global South player – into a Honduras or Paraguay (where recent US-supported coups were successful).  
I have shown how the coup in Brazil is an extremely sophisticated Hybrid War operation going way beyond unconventional warfare (UW); four generation warfare (4GW); color revolutions; and R2P (“responsibility to protect”), all the way to the summit of smart power; a political-financial-judicial-mainstream media soft coup unveiled in slow motion. This is the beauty of a coup when promoted by democratic institutions.  

Neoliberalism may have failed, as even the IMF research wing has concluded. But its rotten corpse still encumbers the whole planet. Neoliberalism is not only an economic model; it surreptitiously takes over the juridical realm as well. In another perverse facet of shock doctrine, neoliberalism cannot prevail without a juridical framework. When constitutional attributions are redirected to Congress that keeps the Executive under control while generating a culture of political corruption. Politics is subordinated to economics. Companies engage in campaign financing and buy politicians to be able to influence the political powers that be.
That’s how Washington works. And that’s also the key to understand the role of former leader of the Brazilian lower house Eduardo Cunha; he ran a campaign financing racket out of Congress itself, controlling dozens of politicians while profiting from proverbially fat state contracts.
The Three Stooges in what I called the Provisional Banana Scoundrel Republic are Cunha, Calheiros and Temer. Temer is a mere puppet while Cunha remains a sort of shadow Prime Minister, running the show. But not for long. He’s already been suspended as the speaker in Congress; he bagged millions of US dollars in kickbacks for those fat contracts and stashed the loot in secret Swiss accounts; now it’s a matter of time before the Supreme Court has the balls – it’s not a given — to throw him in the slammer.
NATO vs. BRICS, all across the spectrum
And that brings us once again to The Big Picture, as we proceed in parallel with an analysis by Rafael Bautista, the head of a decolonization study group in La Paz, Bolivia. He’s one of the best and brightest in South America who’s very much alert to the fact that whatever happens in Brazil in the next few months will drive the future not only of South America but the whole Global South.
Exceptionalistan’s project for Brazil is no less than the imposition of a remixed Monroe doctrine. The main target of a planned neoliberal restoration is to cut off South America from the BRICS – as in, essentially, the Russia-China strategic partnership.

It’s a short window of opportunity after all those years under the Bush-Obama continuum where Washington was obsessed with MENA (Middle East/Northern Africa), a.k.a. the Greater Middle East. Now South America is back in a starring role in the geopolitical (soft) war theatre. Getting rid of Dilma, Lula, the Workers’ Party, by all means available, is only the start.  It all comes back to the same, defining 21st century war; NATO against the BRICS; the Shanghai Cooperation Organization (SCO); and ultimately the Russia-China strategic partnership. Smashing the “B” in BRICS carries with it the bonus of smashing Mercosur (the South American common market); Unasur (the political Union of South American Nations); ALBA (the Bolivarian Alliance); and South American integration as a whole, compounded with integration with key emerging Global South players such as Iran.
The ongoing destabilization of “Syraq” fits the Empire of Chaos; when there’s no regional integration, the only other possibility is balkanization. And yet Russia graphically demonstrated to Beltway planners they cannot win a war in Syria while Iran demonstrated after the nuclear deal that it won’t become a Washington vassal. So the Empire of Chaos might as well secure its own backyard.
A new geopolitical framework had to be part of the package. That’s where the concept of “North America” fits in, backed by the Council on Foreign Relations and devised mostly by former Iraq surge superstar David Petraeus and former World Bank honcho Bob Zoellick, now with Goldman Sachs. Call it a mini who’s who of Exceptionalistan.
You won't see it enounced in public, but the Petraeus/Zoellick concept of “North America” presupposes regime changing and gobbling up Venezuela. The Caribbean is seen as a Mare Nostrum, an American lake. “North America” is in fact a strategic offensive.
It implies controlling the massive oil and water wealth of the Orinoco and the Amazonas, something that would forever guarantee Exceptionalistan’s preeminence south of the border.
The Caribbean is already a done deal; after all Washington controls CAFTA. South America is a tougher nut to crack, roughly polarized by what’s left of ALBA and the US-driven Pacific Alliance. With Brazil falling to a neoliberal restoration, it’s over as a promoter of regional integration. Mercosur would eventually be absorbed into the Pacific Alliance – especially with a man like Serra as Brazil’s top diplomat. So, politically, South America must be annulled at all costs.
What’s left for South America would be its aggregation — as marginal players, part of the US-driven Pacific Alliance — to those NATO on trade deals, the TPP and TTIP. The “pivot to Asia” – of which TPP is the trade arm — is the Obama doctrine’s push for containment of China, not only in Asia but also across Asia-Pacific. Thus it’s natural that China (Brazil’s number one trade partner) should also be contained in the hegemon’s backyard, South America.
From the Atlantic to the Pacific, and beyond
It’s never enough to stress the geo-economic importance of South America. The only way South America can be fully integrated to the multipolar world is by opening up to the Pacific, boosting its strategic connection with Asia, especially China. That’s where the Chinese push to invest in a massive high-speed rail project uniting the Brazilian Atlantic coast with Peru in the Pacific fits in. That’s South American interconnectivity in a nutshell. If Brazil is politically annulled, none of this will ever happen.

So every coup is now literally allowed in South America; indirect attacks to the Brazilian currency, the real; bribing local comprador elites with the backing of the global financial system; a concerted attempt at the implosion, simultaneously, of the top three economies: Brazil, Argentina and Venezuela. SOUTHCOM went so far as to produce a report on “Venezuela Freedom” earlier this year, signed by commander Kurt Tidd, which proposes a “strategy of tension”, complete with “encirclement” and “suffocation” techniques and allowing to mix street action with a “calculated” use of armed violence. Echoes of Chile 1973 do apply.    South America is now arguably the prime geopolitical space where Exceptionalistan is laying the bases to restore its unrivalled hegemony — as part of a multi-dimensional, geo-finance war against the BRICS bent on perpetuating the unipolar world.
All previous moves have lead to this geostrategy of imploding the BRICS and reducing South America to an appendix of North America.
Wikileaks revealed how the NSA spied on Petrobras. In 2008 Brazil came up with its own National Defense Strategy, focused on two key areas; the South Atlantic and the Amazon. This did not sit well with SOUTHCOM. Unasur should have developed it to a continental level, but they didn’t.
Lula decided to award to Petrobras the prime exploitation of the pre-salt deposits – the largest oil discovery of the 21st century. Dilma’s administration gave a firm push to the BRICS’s New Development Bank (based on the Brazilian BNDES) and also decided to accept Iranian payments bypassing the US dollar. Anyone involved in South-South trade bypassing the US dollar enters a kill list.

Hillary Clinton is the presidential candidate of Wall Street, the Pentagon, the industrial-military complex and the neocons. She is the Goddess of War – and in a Bush-Obama-Clinton continuum she will go to war against any player in the Global South that dares to defy Exceptionalistan. So the die is cast. We will know for sure by the time there’s a new US President — and arguably a new, unelected Brazilian President — in early 2017. The geostrategic game though remains the same; Brazil must fall so BRICS-led integration must fall, and Exceptionalistan may concentrate all its firepower in an all-out confrontation against Russia-China. 
The views expressed in this article are solely those of the author and do not necessarily reflect the official position of Sputnik.

Oklahoma Police Can Seize Your Entire Bank Account on a Traffic Stop Without Any Charges

Oklahoma Highway Patrol

The one state that has gone complete anti-democratic is Oklahoma. It is wise not to travel in that state at all. Oklahoma should be on a no-fly zone. Now, Oklahoma police can outright seize everything you have from debit cards to bank accounts on a traffic stop without any criminal charges being filed. If some policeman thinks you’re doing something illegal, your life is over. Without money, you cannot hire a lawyer and they can just rob everything you have on a whim.
The Oklahoma Highway Patrol has introduced a device called Electronic Recovery and Access to Data (ERAM) that allows police officers to seize money in your bank account or on prepaid cards. State police began using 16 of these machines last month, and now the police have become literal highway robbers. This makes the traffic cops in Russia, who you can bribe to go away if they pull you over for a speeding ticket, as a far more civilized arrangement. Here, they can rob you of everything.
Let’s say a state trooper suspects or just thinks you may have money tied to any sort of crime. He can now scan any cards you have and seize the money in your wallet. He does not have to charge you with a crime. There is no right to remain silent, for he is not charging you. He is after all your money because the governments is broke.
Oklahoma Highway Patrol Lt. John Vincent said, “We’re gonna look for if there’s a difference in your story. If there’s some way that we can prove that you’re falsifying information to us about your business.” So all he has to do is “believe” you lied about anything and he has the right to take everything you have. They justify this by claiming it is not about seizing money. Of course not. It is criminal prosecution but there is no crime. Forget innocent until proven guilty. That will not apply. They pretend the money committed the crime – not you.
This is simply nullifying the Constitution. You have absolutely ZERO rights. He can rob you of everything and leave you with not even enough money for gas. The police have become the criminals. This is precisely how Rome fell. When they could not pay the army, they began sacking their own cities. This is exactly what the police are doing now and there is nobody to defend us against this new criminal organization.
Just stay out of Oklahoma at all costs. If other states follow, you better migrate to another country and fast. Look for a country not based on common law (English countries). This will destroy the freedom to travel for broke police have become highway criminals with guns.

Rob Kirby: Something We've Never Seen Before In Recorded History

The establishment, globalist, elite, 1%, 0.01%
whatever you wish to call them seem to be on a one-way ride straight
into the abyss. The global financial systems and global economies all
seem to be moving in the same direction at the same time – down the
tubes. Of course if you listen to the mainstream media they will be
happy to tell you, over and over, about how awesome everything is and
how well you are doing. Just keep your eyes on the stock market and you
too will know they are being sincere and have your best interest at
heart. Anyone with a brain knows nothing could be further from the
Rob Kirby, Kirby Analytics, who, in my opinion, has one of the best
minds around sat down to discuss the state of our world. His work is
second to none as he crunches the numbers, interacts with some of the
wealthiest people to be found and Rob also interacts with governments.
Rob has a full spectrum view of what is happening in our financial and
economic world.

James Turk – We Just Witnessed A Huge Wakeup Call For The World

James Turk continues:  “The shocker was how few jobs were created in
May. Though signs of a weakening economy have been evident for months,
Wall Street is finally starting to get the message that a recession is
imminent, if in fact one hasn’t already begun. Consequently, the Federal
Reserve is not going to raise interest rates in June, nor do I think
will it raise interest rates anytime this year.

As I have been saying for years, the federal government cannot afford
to pay a fair rate of interest because its debt load is so high. Higher
interest rates would worsen the federal budget deficits. So the Fed
will keep interest rates low to lessen the federal government’s debt
burden. Nor will the Fed raise rates as the presidential election
approaches, particularly with the economy weakening.

McDonald's says bigger fonts cooked up improved profits

Do you want better legibility with that? It sounds cheesy but bigger writing sells more fries


Burger baron McDonalds has attributed stronger financial performance to, in part, enlarging the point size of the fonts it uses on the chits sent to its chefs and customers.
McDonalds has had a rotten few years on the financial front, as customers desert it for healthier, newer or more interesting fast food options. Attempts to turn things around by diversifying the menu only made franchisees mad, as documented by one who quit citing the complexity of being required to offer a more varied menu.
But the company's most quarterly results for Q1 2016 offered the pleasant surprise, with all-day breakfast and the new McPick driving sales up 5.4 per cent compared to Q1 2015.
In the company's earnings call, CEO Stephen J. Easterbrook detailed myriad process improvements that have been made to make individual outlets more efficient and therefore make it more fun to buy food at McDonalds.
Those include “the font size on the printers, the receipts.” They've been enlarged so “it's easier to spot the special requests, for example, or the special orders.”
Bigger type has made it easier for staff to read each order, making them more accurate and in turn making customers more satisfied because they get exactly what they asked for.
Make mine a Deluxe Burger, the single-decker Big Mac that died some time in the early 1980s, along with my childish hopes and dreams. ®

Credit bubble reflates. PE firms back at it. Investors go blind.

Wolf Richter,
“Leveraged loans” that banks extend to junk-rated over-leveraged companies are too risky to keep on their books. They sell them to institutional investors. Or they slice and dice them and repackage them into Collateralized Loan Obligations (CLOs) and sell those to institutional investors. Leveraged loans trade like securities. But the SEC, which regulates securities, considers them loans and doesn’t regulate them. No one regulates them.
The Fed has been jawboning banks into backing off for two years. Banks can get stuck with leveraged loans. They did during the Financial Crisis, which helped sink the banks.
During the credit upheaval that started last summer, leveraged loans ran into trouble. And issuance of the riskiest type of leveraged loans came to a halt.
As so often, there’s a private-equity angle to it. Companies owned by PE firms borrow money from the bank in order to pay a “special dividend.” It’s a favorite form of asset stripping. This way, if the company goes bankrupt (we’ll get to an example in a moment), the PE firm and other owners got a big chunk of profit out beforehand.
Dividend-backing loans are particularly risky because the proceeds are not invested in productive activities that would generate cash flow and allow the company to service the loan. The money just disappears, the debt stays.
These dividend deals are the litmus test for a hot credit market. They die when reason begins to ripple through the credit market, when lenders tighten the screws and look askance at deals that hollow out an issuer’s balance sheet.
But they thrive when investors and banks go on a frenetic search for yield, when balance-sheet risks that had been clearly visible a moment ago suddenly dissolve into ambient air, when, in other words, investors have such an appetite for loan paper that they will eat anything.
This is now happening once again.
Back in July last year, nearly $11 billion in leveraged loans to pay dividends were issued. Then the credit market spiraled down. In August, less than $2 billion were issued. Activity petered out, and almost none were issued between December and March.
But by that time, central banks had begun to panic. The Fed flip-flopped about rate increases. The Bank of Japan entered negative-interest-rate absurdity. The ECB promised new and even crazier goodies…. And voila!
By April, $2.5 billion in dividend-backing leveraged loans were issued. And in May $7.6 billion, the most since July last year, and up 40% from May a year ago!
“A serious comeback,” as LCD put it in its report. “Investor appetite in the U.S. leveraged loan market was on full display last month.” And this is what the sudden resurgence looks like:
In practice, a leveraged loan to fund a “special dividend” can turn out like this: San Diego-based Millennium Health, the biggest drug-testing lab in the US and owned by its executives and private-equity firm TA Associates, issued a leveraged loan of $1.8 billion in April 2014. It was during the peak of the credit bubble. JPMorgan syndicated it. The pieces were gobbled up by Oppenheimer Funds, Fidelity Investments, Franklin Resources, and other institutional investors. Millennium used $195 million of the proceeds to pay off debt that TA Associates held and $1.297 billion to fund a “special dividend” to its owners, including its executives and TA Associates.
Then it got very messy. By June 24, 2015, the loan was trading at 41 cents on the dollar. On November 10, the company filed for bankruptcy, “after settling federal claims that it improperly billed the government for running urine tests on dead people and checking senior citizens for angel dust,” as Bloombergput it at the time.
And in January 2016, as the company emerged from bankruptcy, the San Diego Tribune added this about the deal the judge had approved:
It also contained an unusual provision that shielded the former owners of the company – including founder James Slattery and some of his family members, former directors and executives, and the private equity firm TA Associates – from any future lawsuits stemming from a $1.8 billion loan the company got in 2014.
About $1.2 billion of the loan was used to pay a “special dividend” to TA Associates and Slattery, court papers say. Slattery, through a holding company and various family trusts, got 55 percent of the money, more than $600 million.
The company restructured. Creditors (including retail investors with loan mutual funds) took a licking. But the recipients of the “special dividend” were able to keep the money. That’s why PE firms love “special dividends” funded by these leveraged loans. And that’s why they’re a sign that investors, driven to near-insanity by central bank policies, have once again closed their eyes to risks in order to make a tiny buck.

Weak sales prices continue to squeeze business margins in 2016 as labor costs surge

Interesting chart via UBS

Deutsche Bank's Shocking ECB Rant: Warns Of Social Unrest And Another Great Depression

In early February, in a post titled "A Wounded Deutsche Bank Lashes Out At Central Bankers: Stop Easing, You Are Crushing Us", we showed just how vast the feud between Europe's biggest - and ever more troubled commercial bank - and the ECB had become. As DB's Parag Thatte lamented then, "ECB rhetoric suggests additional easing measures forthcoming in March. While a fundamental tenet of these measures, in particular negative rates, has been to push investors out the risk spectrum, we remind that arguably the impact has been exactly the opposite." And while the DB analyst has been correct, and now NIRP is widely accepted as a major mistake, the ECB proceeded to not only ease even more just one month after this first DB lament, but in what may have been a direct affront to DB, launched the monetization of corporate bonds, something which as we documented earlier today has now led to the complete disconnect between bonds and underlying fundamentals.
It was also led to daily record low yields for government bonds around the globe.
Last but not least, it has pushed the stock price of Deutsche Bank to levels not seen since the financial crisis as DB suddenly finds itself unable to make money in an NIRP environment.
Which brings us to today, when overnight DB's chief economist David Folkerts-Landau released a scathing report titled "The ECB must change", one which blows DB's February lament out of the water, and in which DB accuses the ECB of putting not only its future at risk, but the future of the entire Eurozone, with its destructive policies.
A quick read of the executive summary of this epic rant reveals just how shockingly bad relations between Germany's biggest bank and the former Goldman partner have now become.
Over the past century central banks have become the guardians of our economic and financial security. The Bundesbank and Federal Reserve are respected for achieving monetary stability, often in the face of political opposition. But central bankers can also lose the plot, usually by following the economic dogma of the day. When they do, their mistakes can be catastrophic.

Today the behaviour of the European Central Bank suggests that it too has gone awry. After seven years of ever-looser monetary policy there is increasing evidence that following the current dogma, broad-based quantitative easing and negative interest rates, risks the long-term stability of the eurozone.

Already it is clear that lower and lower interest rates and ever larger purchases are confronting the law of decreasing returns. What is more, the ECB has lost credibility within markets and more worryingly among the public.

But the ECB’s response is to push policy to further extremes. This causes mis-allocations in the real economy that become increasingly hard to reverse without even greater pain. Savers lose, while stock and apartment owners rejoice.

Worse, by appointing itself the eurozone’s “whatever it takes” saviour of last resort, the ECB has allowed politicians to sit on their hands with regard to growth-enhancing reforms and necessary fiscal consolidation.

Thereby ECB policy is threatening the European project as a whole for the sake of short-term financial stability. The longer policy prevents the necessary catharsis, the more it contributes to the growth of populist or extremist politics.

Our models suggest that in its fight against the spectres of deflation and unanchored inflation expectations the ECB’s monetary policy has already become too loose. Hence, we believe the ECB should start to prepare a reversal of its policy stance. The expected increase in headline inflation to above one per cent in the first quarter of 2017 should provide the opportunity for signalling a change.

A returning to market-based pricing of sovereign risk will incentivise governments to begin growth-friendly reforms and to tackle fiscal stability. Flagging the move should dampen adverse reactions in financial markets.

We believe that normalising rates would be seen as a positive signal by consumers and corporate investors. The longer the ECB persists with unconventional monetary policy, the greater the damage to the European project will be.
And just in case readers don't have a sense of what "great damage" from a central bank looks like, DB is happy to provide the imagery: think Weimar hyperinflation and even another Great Depression.
Central bankers make big mistakes too

In the 1920s the Reichsbank thought it could have 2,000 printing presses running day and night to finance government spending without creating inflation. Around the same time the Federal Reserve allowed more than a third of US deposits to be destroyed via bank failures, in the belief that banking crises where self-correcting. The Great Depression followed.

That was a hundred years ago but mistakes keep happening despite all the supposed improvements to central banking, from independence to better data and more sophisticated theoretical and econometric models. The so-called Jackson Hole consensus before the latest financial crisis tolerated credit growth moving out of sync with the real economy in many areas of the world. The prevailing dogma at the time was that traditional measures of inflation were low and those bubbles in asset markets shouldn’t really exist. 

The popular dogma shared among central bankers today is that a lack of demand is the source of all evil causing sub-par inflation. Once such a conclusion has been reached, evidence becomes abundant. This is a phenomenon known as confirmation bias in behavioural economics. Other explanations for low inflation today are brushed aside.

People who are convinced they possess the only correct analytical approach to a problem are labelled hedgehogs in the book Superforecasting by PhilipTetlock. Hedgehogs perceive all incoming information through their one seemingly correct lens, making them blind to alternative interpretations.

In the case of the world’s central bankers, strongly held views are then reinforced by group-think. It is no surprise therefore that ECB president Mario Draghi defends his policy by saying that all other major central banks are doing the same –which by the way does not hold for negative rates. And of course, if a problem persists – such as inflation undershooting yet again – this can only be due to further demand shortcomings rather than other factors such as an oil price shock.

A united front, not to mention unparalleled access to data, means central bankers are hugely respected, or at least rarely accused. But criticisms of current policy is growing, particularly in Germany. Finance Minister Wolfgang Schäuble allegedly blames it for half the AfD’s success in recent elections. Two months ago parliamentary groups attacked the ECB for its zero/negative rate policy and suggested Berlin intervenes – in effect questioning the ECB’s independence.

Such a chorus shows that monetary policy lurching to extremes has consequences far beyond the realm of financial markets and the real economy. It is dangerous for central banks not to consider these wider consequences, especially since it might be argued that they lack the mandate to wield such influence on societies and individual citizens.
DB then points out the biggest logical fallacy of any monetary stimulus: by doing "whatever it takes", or "getting to work", central bankers merely remove the burden on politicians to do their job. Instead, everything becomes a function of monetary policy and thus, the stock market. No wonder then that every time Obama speak, his first boast is how high the stock market is. However, the good days won't last.
The benefits from ever-looser policy are diminishing while the litany of distortions, perversions and disincentives grows by the day. Savers are punished and speculators rewarded. Bad companies survive while good companies are too scared to invest. Moreover, governments no longer fear that failure to reform their economies or reduce debt will raise the cost of borrowing. In fact, total indebtedness in the eurozone has been rising, with the reformed and re-interpreted Stability and Growth Pact as toothless as ever. Risk-spreads have all but disappeared fromgovernment bond markets. Badly needed labour, banking, political, educational and governance reforms have been slowed or abandoned.

Another problem is that games of largess and moral hazard are hard to quit. The ECB has become the henchman of ever more demanding markets, with investors already braying for another extension of quantitative easing by September. There is also evidence that current policy reduces the pressure on banks to increase capital and to clean up non-performing loans (NPLs) and thereby keeping unprofitable companies in business.
Incidentally when DB says investors, it means firms such as Goldman Sachs, Mario Draghi's former employer. Back to DB, which proceeds to excoriate the negative aspects of the ECB's policies:
While the ECB is right in saying that it is not running out of ammunition – in purely technical terms the recent debate about “helicopter money” suggests as much – it is on shakier ground arguing that policy has worked as intended....  For example, ultra-cheap loans are providing life support for companies which would not be viable under more normal conditions. This has lead to over-capacity – not to mention disinflation – across many industries in Europe, with revenues falling compared with assets. Last year 40 per cent of companies had no top-line growth. It is ironic therefore that many think productivity can be kick-started via even lower rates.

Another clear negative is that savers have no income certainty over the longer-term, given that it has become virtually impossible to achieve real returns on interest bearing assets. Moreover, survey evidence suggests that consumer thinking has been seriously shocked by negative rates. Rather than rejoicing at free money, most see the move as a sign of distress rates – soggy spending data would support this view. Germans, meanwhile, think the central bank is encouraging indebtedness and profligacy instead of thrift and stability.

Indeed, more institutions are beginning to voice their concerns. At its annual press conference, Bafin, Germany’s financial watchdog, warned that low interest rates were a “seeping poison” for financial institutions dependent on interest rates and is concerned some pensions funds might fail to provide guaranteed benefits. BaFin reckons about half of Germany’s banks have a heightened exposure to interest changes and may therefore have to hold more capital. Bundesbank board member Andreas Dombret warned that banks may have to increase charges to their clients.

Yet another place to look if you question ECB policy is Japan. Its central bank introduced negative interest rates in January and they have been poorly received by financial institutions as well as households and corporations. This has been attributed to the surplus in Japan’s private sector and the preference among households for deposits, bonds and principal-guaranteed products. An increase in projected benefit obligations (PBO) due to the decline in the discount rate also hasn’t helped. The negative impact on Japanese financial institutions is clearer still, in the form of higher holding costs on their central bank current account deposits, narrower lending margins and constraints on credit creation. Ominously for Europe, these repercussions are the result of the simultaneous implementation of quantitative easing and negative rates. And this concurrent policy is also damaging to the Bank of Japan’s own finances.

* * *

Longer-term the negative consequence of ultra-low rates and sovereign bond backstops comes from a lack of economic reform. It was not meant to be this way. Immediately after the crisis the implicit deal was that politicians would reduce public debt levels and implement the necessary reforms while the ECB provided them with the necessary time and monetary tailwind.

Some ex-central bankers argue that early on a pattern evolved where governments did not deliver on their tasks so that the ECB, as the life-saver of last resort, was forced to step in ever more aggressively. But it is equally plausible, although impossible to prove, that politicians delayed making hard choices knowing that the ECB would “do whatever it takes”, as it eventually said explicitly. With the risks associated with failure to reform their economies or reduce debt removed, courtesy of the self-appointed purchaser-of-last-resort of sovereign debt, elected politicians have not needed any encouragement to cater to national interests. In fact, six years after the onset of the European crisis total indebtedness in the eurozone keeps rising.
And now the conclusion to this epic rant:
The ECB has – probably with very good intentions – manoeuvred itself into a position where market expectations are having an increasing influence on its policy. This is in part the result of the central bank’s tendency to raise market expectations ahead of policy decisions, thereby putting pressure on council members to deliver.

With its “whatever it takes” stance the ECB has removed incentives for governments to reform and has distorted the market-based pricing of government bond yields. Politicians are also stuck because unpopular reforms would probably see them replaced by more national and euro-sceptic politicians, which poses an even bigger risk for the eurozone.

ECB president Mario Draghi has repeatedly said he cannot make the fulfilment of his job description dependent on whether other agents (that is, politicians) fulfil theirs. But real world is what it is – ignoring the wider consequences of monetary policy led to last crisis.

The German Council of Economic Experts argues that a comprehensive evaluation of all consequences of monetary decisions is a prerequisite for a competent monetary policy. Today the balance of consequences points to areversal in ECB policy.
Why does all of this sound familiar? Oh yes, because we have been warning about all of this since the day the Fed launched QE, and we warned that there is no way such unorthodox policy ends well. Seven years later the chief economist of Europe's biggest bank admits we were spot on. We expect many more strategists and economist to make comparable admissions, if they don't already behind closed doors.
On the other hand, "groupthink" as DB calls it, surrounding Draghi and the central planners is impenetrable, and sadly all of this will be ignored. Which is why the only real way this final bubble is resolved, is when it bursts. Which is also something we have said long ago: instead of fighting the central banks, just let them achieve their goals as fast as possible.
Ultimately, it is now too late to change anything anyway, plus the economic, finacnial and social collapse will inevitably come, whether in one month or a decade. The best that those who are paying attention can do is prepare. As for everyone else... they can find comfort in their echo chambers which ignore the reality that their actions create.
That unpleasant truth aside, we find that the now official super heavyweight contest between Deutsche Bank and the ECB may be far more entertaining than even that between Hillary and Trump. Luckily popcorn is still plentiful and cheap. For now. 
Source: Deutsche Bank

Goldman Crushes Democrat's Dreams: Shows Obamacare Has Cost "A Few Hundred Thousand Jobs"

We suspect Lloyd Blankfein will be receiving a call from The White House (or Treasury) very soon as Goldman Sachs' economists did the unthinkable in the age of political correctness - while investigating the state of under-employment in America, the smartest people in the room found that ObamaCare has led to a rise in involuntary part-time employment, estimating that "a few hundred thousand workers" have been forced to cut hours and has "created disincentives for full-time employment."
Goldman's Jan Hatzius explains that they find mixed evidence to support the theory that the employer mandate under the Affordable Care Act (ACA) has contributed to the elevated level of involuntary part-time work.
Our estimates of the effect by industry do show signs of an effect, particularly among the sectors that had the greatest gaps in required health insurance coverage prior to implementation of the mandate, but the relationship is weak.

It is possible that the level of involuntary part-time workers could be a few hundred thousand higher than it would be otherwise as a result of the mandate, which is a small share of the 6.4 million workers employed part-time involuntarily, but potentially a much larger share of the “underemployment gap”.
Their research into the relative slack in the labor force notes that...
The share of workers who would like to work full-time but are only able to find part-time work for economic reasons has declined much more slowly than the unemployment rate, raising the possibility that structural factors could be keeping the involuntary part-time rate elevated (Exhibit 1). If true, this would suggest that there is currently even less slack remaining in the labor market than we have assumed.

One potential explanation of the structural rise in the ratio of share of part-time to full-time employment is the employer mandate in the Affordable Care Act (ACA).

In principle, the ACA should increase part-time employment as a share of total employment, from both the demand and supply side.

  • On the demand side, some employers that do not offer health insurance coverage for full-time employees may seek to avoid penalties by relying on part-time labor instead.
  • On the supply side, the ACA potentially creates disincentives for full-time employment, as it increases the implicit tax on marginal low- and middle- income earnings by reducing subsidies as incomes rise. It also loosens the link between employment and health insurance coverage - coverage can now be purchased more easily away from one’s employer - which may allow some who previously worked full-time for the offered health benefits to now work part-time instead. However, these supply-side effects should not be contributing to the elevated level of involuntary part-time work.
As Goldman concludes...
Overall we believe that the evidence suggests that the ACA has at least modestly elevated involuntary part-time employment.

While the effect is hard to quantify given the apparently loose relationship just noted, we would estimate that a few hundred thousand workers might be working part-time involuntarily as a result of the ACA. We reach this estimate by multiplying the difference between the actual and estimated involuntary part-time workers in the five sectors most affected by the ACA mandate by total employment in those sectors. We can reach a similar estimate by dividing the sectors into two groups weighted equally by total employment, and subtracting the difference between actual and estimated involuntary part-time employment in the less-affected group by the difference in the more affected group. These admittedly rough measures fall in the middle of the few academic studies on the topic, and suggest that while the effect of the ACA employer mandate is small compared to the total number of the 6.4 million workers employed part-time for economic reasons, it could constitute a more significant share of the estimated remaining “underemployment gap.”
There goes Blankfein's invite to Hillary's inauguration.

Soros Returns To Trading With "Big, Bearish" Bets On Economic Turmoil

One month ago, we were stunned to report that none other than billionaire Carl Icahn had taken the net exposure of his hedge fund, Icahn Enterprises, from a modest net 25% short - his recent negative bias on the market was hardly a secret - to a practically apocalyptic, 149% net short which is about as close to betting on a market crash as one could get. 

Then last month, billionaire trader Stanley Druckenmiller warned that “the bull market is exhausting itself” and in a presentation titled "The Endgame", he explained why he too is dumping equities and buying gold.
It turns out Icahn and Druck weren't the only iconic traders betting on a market crash.
In a stunning one-two revelation, the WSJ reports that after a nearly decade-long hiatus, not only has George Soros returned to trading, "lured by opportunities to profit from what he sees as coming economic troubles", but that he has personally directed "a series of big, bearish investments", meant to profit from the coming economic turmoil .

The last time Soros became closely involved in his firm’s trading: 2007, "when he became worried about housing and placed bearish wagers." Over the next two years the bets netted more than $1 billion of gains.
According to the WSJ's Greg Zuckerman, Soros Fund Management, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors view gold as a haven during times of turmoil.
The move is rather shocking for the 85 year old, who earned fame with a bet against the British pound in 1992, a trade that led to $1 billon of profits. In recent years the billionaire has focused on public policy and philanthropy. He is also a large contributor to the super PAC backing presumptive Democratic nominee Hillary Clinton and has donated to other groups supporting Democrats.
It appears he was also bored.
While Soros has always closely monitored his firm’s investments, as he got older he would delegate more and more, with many of his proteges moving on to start their own hedge funds, Trump's fundraiser Steven Mnuchin being just one example. As a result, in recent years, he hasn’t done as much investing of his own. That however has now changed and as the WSJ notes, recently Soros has been spending more time in the office directing trades. He has also been in more frequent contact with the executives, the people said.
According to the WSJ, Soros is stepping into a void at his firm. Last year, Scott Bessent, who served as Soros’s top investor and has a background in macro investing, or anticipating macroeconomic moves around the globe, left the firm to start his own hedge fund. Soros has invested $2 billion with Mr. Bessent’s firm, Key Square Group. Later in 2015, Mr. Soros tapped Ted Burdick as his chief investment officer. Mr. Burdick has a background in distressed debt, arbitrage and other types of trading, rather than macro investing, Mr. Soros’s lifelong specialty.
Which is why Soros felt comfortable stepping back in, and - as it turns out - it was to begin building a major bearish position. "Soros’s recent hands-on approach reflects a gloomier outlook than many. His worldview darkened over the past six months as economic and political issues in China, Europe and elsewhere have become more intractable. While the U.S. stock market has inched back toward records after troubles early this year and Chinese markets have stabilized, Mr. Soros said he remains skeptical of the Chinese economy, which is slowing."
While we documented Soro's pessimism about China earlier in the year, it appears to have only gotten worse, and as Soros said, "the fallout from any unwinding of Chinese investments likely will have global implications."
“China continues to suffer from capital flight and has been depleting its foreign currency reserves while other Asian countries have been accumulating foreign currency,” Soros said in an email. “China is facing internal conflict within its political leadership, and over the coming year this will complicate its ability to deal with financial issues.”
China will hardly be amused, and will promptly seek to muzzle any media outlets reporting Soros' renewed pessimism toward China's "recovery." It will hardly help its situation.
It's not just China. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU. “If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said. Still, Mr. Soros said recent strength in the British pound is a sign that a vote to exit the EU is less likely. “I’m confident that as we get closer to the Brexit vote, the ‘remain’ camp is getting stronger,” Mr. Soros said. “Markets are not always right, but in this case I agree with them.”
Finally, there is the US. Soros also adopted bearish derivative positions that serve as wagers against U.S. stocks. It isn’t clear when those positions were placed and at what levels during the first quarter, but the S&P 500 index has climbed 3% since the beginning of the second period, suggesting Mr. Soros could be facing losses on some of those moves. Unless, of course, the puts are longer-dated and the market does in fact proceed to crash.
Overall, the Soros fund is up a bit this year, in line with most macro hedge funds, according to people close to the matter. The investments by the firm were previously disclosed in filings, but it wasn’t clear how involved Mr. Soros was in the decisions spurring the moves.
* * *
The WSJ concludes by pointing out that the last time Soros became closely involved in his firm’s trading: 2007, when he became worried about housing and placed bearish wagers over two years that netted more than $1 billion of gains. And now, a very bearish Soros is back again.

UK Buying Gold Bullion On BREXIT “Nerves”

Gold bullion is seeing increased sales in the UK on BREXIT “nerves” according to Reuters today:
“Demand for bullion bars and coins is rising, with men and women of all ages buying up the safe-haven metal in case of a British exit from the European Union.

Mark O’Byrne, director of Dublin-based gold dealer Goldcore, said the price bounce had already driven a significant demand increase this year, with broader geopolitical concerns also feeding into the rise.
“In the coming weeks, we’re expecting to be busy,” he said. “The recent polls (on Brexit) are going to create more jitters… that should lead to quite robust demand as we run into polling day.”
Sales have picked up since the latest polls suggested that the ‘leave’ campaign is gaining support, with online polls by ICM and YouGov showing at the weekend it had taken a 4-5 percentage point lead ahead of the June 23 referendum.
Those looking to hedge against Brexit risk with gold can choose from a range of small investment products, from 1 gram bars for less than 50 pounds to kilobars priced at more than 28,000 pounds, bought over the counter or online.
Interest in gold has surged this year largely due to a reappraisal of the pace of U.S. interest rate rises, making it hard to pinpoint the impact of concerns about Brexit on prices
The biggest quarterly rally in nearly 30 years at the beginning of the year marked a turnaround in a three-year price slide for gold.
Sterling-denominated gold rose back above 900 pounds an ounce in March and remains up 18 percent this year.
A ‘leave’ vote would likely push it higher still. A Reuters poll of forex strategists indicated last week that the pound would sink 9 percent against the dollar if Britain quit the EU, boosting the price of gold in sterling terms.”
Read full article here

Recent Market Updates
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis
– Silver Price To Surge 800% on Global Industrial and Technological Demand

– BREXIT Gold Diversification As Vote Fuels Market Uncertainty
– Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– Gold Should Rise Above $1,900/oz -“Get In Now!”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold

Gold Prices (LBMA AM)
09 June: USD 1,258.35, EUR 1,107.98 and GBP 870.53 per ounce
08 June: USD 1,252.40, EUR 1,101.61 and GBP 851.65 per ounce
07 June: USD 1,241.10, EUR 1,091.42 and GBP 851.02 per ounce
06 June: USD 1,240.55, EUR 1,092.67 and GBP 859.08 per ounce
03 June: USD 1,211.00, EUR 1,086.63 and GBP 839.34 per ounce
02 June: USD 1,215.50, EUR 1,085.32 and GBP 842.10 per ounce
Silver Prices (LBMA)
09 June: USD 17.05, EUR 15.03 and GBP 11.79 per ounce
08 June: USD 16.75, EUR 14.73 and GBP 11.50 per ounce
07 June: USD 16.31, EUR 14.36 and GBP 11.18 per ounce
06 June: USD 16.40, EUR 14.46 and GBP 11.39 per ounce
03 June: USD 16.10, EUR 14.45 and GBP 11.17 per ounce
02 June: USD 15.98, EUR 14.27 and GBP 11.07 per ounce
Mark O'Byrne
Executive Director

Refugees PISSED After Not Being Woken Up For Ramadan. Their INSANE Reaction Says It All

Düsseldorf’s major international trade fair grounds were set ablaze Tuesday. The fire was deliberately made by Arab migrants angry because of an incident concerning Ramadan. Reports say the conflict was between the German staff and security guards, who were mainly Iranian, and the Arab residents.

According to testimonies, the Iranians, who were employed by Germany to take care of the migrants, “deliberately” did not wake the Arabs up in time for their Ramadan breakfast. This followed a long string of disputes between the two groups.
Just a few weeks before this incident, a migrant angry with the living conditions set his mattress afire in protest.
Migrants were witnessed proudly recording the fire on their cell phones. According to the migrants, the blaze was started because “we just want to get out of here.”

Dusseldorf on fire
280 migrants were reported as evacuated from the site, which is directly next to Düsseldorf’s international airport. 30 migrants were treated for inhaling smoke, and one firefighter of the 70 who came out to put out the blaze was taken to the hospital due to heat exhaustion.
Initially, two migrants were arrested with starting the fire, but the number was later changed to six. The arrested men come from Morocco, Algeria, Syria, and Iraq.

EU vote registration deadline extended

Polling station 
The deadline for registering to vote in the EU referendum has been extended, the government has said.
Cabinet Office minister Matt Hancock said the government would legislate to extend the cut-off until midnight on Thursday.
It follows a computer glitch which left some people unable to sign up before the original midnight Tuesday deadline.
The Electoral Commission urged people to sign up until the end of Thursday in order to vote on 23 June.
The glitch, blamed on record demand, lasted from 22:15 BST on Tuesday until after the midnight cut-off.
Users reported a page displaying the message "504 Gateway Time-out" instead of the online registration form.
There had been calls from both sides of the EU debate for the deadline to be extended, although the move was criticised by some Conservative MPs.
A last-minute surge in demand was blamed for the technical problems.
According to the government's data website, 525,000 people applied to register to vote during the day - 170,000 were aged 25 to 34, 132,000 under the age of 25 and 100,000 aged 35 to 44.
It also shows that the peak users came at 22:15 BST when 50,711 people were using the service at the same time. There were 26,000 people on the site at 23:55 BST and 20,416 people using the site at 12:01 BST, just after the deadline.


The government's data site does not record whether these users were successful or not in attempting to register to vote. It is also not clear whether these figures include those who got an error message.

Analysis by Iain Watson, BBC political correspondent

Cock-up or conspiracy? Some Brexiteers see an extension of the voting registration deadline as both.
Sir Gerald Howarth has said potential voters had "months and months" to register so the deadline shouldn't be shifted but many of his colleagues are biting their tongues for fear of looking anti democratic.
A two-day extension in registration to compensate for a two hour failure in the website is seen as suspicious.
Off the record, one senior Conservative said: "We all know what they are up to - there will be a big social media push by Remain to get young people to register tomorrow."
More than 300,000 of the 525,000 who applied to register yesterday were under 34 - and that age group, polling suggests, is more likely to back EU membership. Another Conservative fulminated: "They wouldn't have done this at a general election" and one of his colleagues opined: "If the age profile was the other way round we wouldn't be doing this."
The atmosphere between the Remain and Leave camps is already combustible but if there's a close result, the row may even explode into a formal challenge.

Mr Hancock, who said he was "delighted" at the "huge voter registration levels", told MPs the number of applications per hour had reached record level.
He said 214,000 applications per hour had been received at peak time, compared with 74,000 ahead of last year's general election.
MPs will debate the extension on Thursday, Commons leader Chris Grayling said.
Conservative MP Sir Gerald Howarth said people had had "months and months" to register to vote and it was "their fault" if they had left it until the last minute.
His party colleague Ian Liddell-Grainger said the extension to the deadline amounted to "gerrymandering" and another Tory, Andrew Bridgen, said it set a "very dangerous precedent".
Earlier, during an urgent statement in the Commons, Conservative MP and Leave campaigner Bernard Jenkin said it might be legal to extend the deadline for a few hours, but said "any idea of rewriting the rules in a substantial way would be complete madness and make this country look like an absolute shambles" with a risk of a legal challenge to the referendum result.

Voter registration graphic

Opposition parties had expressed anger at the events and called for an extension to the deadline, with Lib Dem leader and pro-Remain campaigner Tim Farron saying it was a "shambles" that could affect the referendum result.
The justice secretary, leading Leave campaigner Michael Gove, said: "In my heart is a desire to ensure that everyone possible can be given the vote.
"The more people who vote the better. This is a lifetime-defining decision. I would like to see everyone who possibly can and who is entitled to vote play a part in this."
People who voted in last months' UK-wide elections have no need to re-register for the EU referendum. Postal votes are unaffected.

Record Snow and Crop Losses Across the Northern Hemisphere April-May 2016

 Late spring 2016 has indeed been strange and full of record snow events across three continents along with massive crop losses in Europe of the fruit and wine vineyards due to cold and frost.
This is a long version of four videos compiled to give you a full picture of the situation. Links for each news story are in the original videos linked below.
Record Snow Across USA and it’s Almost Summer…
China Snowstorms and a Blizzard Three Weeks Before Summer…
Northern Hemisphere Crop Losses Spring 2016: Cherry 80%, Apricot 60%, Wheat 6% and More…
Austrian Vineyards 13% Frost Damage Losses Countrywide 2016…

High retail inventories are weakening import volumes, according to report

shipping containrers
(WASHINGTON)  Import cargo volume at the nation’s major retail container ports is expected to be mostly down through the summer but should see a significant uptick just before the winter holiday season, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.
“The unusual patterns seen last year in the aftermath of the West Coast ports slowdown are continuing to make valid year-over-year comparisons difficult,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Retailers are balancing imports with existing inventories but consumers can expect to see plenty of merchandise on the shelves for both back-to-school and the holidays.”
Ports covered by Global Port Tracker handled 1.44 million Twenty-Foot Equivalent Units in April, the latest month for which after-the-fact numbers are available. That was up 9.1 percent from March but down 4.6 percent in April 2015. One TEU is one 20-foot-long cargo container or its equivalent.
May was estimated at 1.54 million TEU, down 4.2 percent from the same month last year. June is forecast to also be 1.54 million TEU, down 1.9 percent from last year; July at 1.62 million TEU, up 0.2 percent; August at 1.63 million TEU, down 3 percent; September at 1.57 million TEU, down 3.5 percent, and October at 1.61 million TEU, up 3.4 percent.
The first half of 2016 is expected to total 8.9 million TEU, up 0.3 percent from the same period in 2015. Total volume for 2015 was 18.2 million TEU, up 5.4 percent from 2014.
“Our port models are projecting weak imports in volume terms, not to be confused with the dollar value,” Hackett Associates Founder Ben Hackett said. “Inventories remain very high, pointing to an overstocked situation that will depress the volume of imports in the coming peak season. Unless inventories drop through further increased consumer spending, import growth will remain sparse.”

Retail Armageddon Hits U.S. Economy With 930 Stores Closing This Year

Photo Credit Mike Mozart Flickr
Photo Credit Mike Mozart Flickr
(Daniel B. Kline)  With some retailers, including Sports Authority (450 stores) and Sports Chalet, closing all of their stores, and others, like Aeropostale, teetering on the edge of heading into the great strip mall in the sky, this has been a difficult year for brick-and-mortar retailers.
The damage, however, is not limited to the chains that are closing up shop entirely. A number of others — including some iconic names — are getting smaller, closing stores as a way to shrink into, if not profitability, at least lower losses.
It’s a tough time for America’s shopping centers, with it looking like those temporary pop-up Halloween stores will have their pick of prime locations this year. Blame the Internet in many cases, changing consumer demands in others, bad management in a few, and a combination of all of the above in many cases.
Here’s a look at some of the retailers that have either already begun closing locations or plan to do so this year.
Ralph Lauren (NYSE:RL) plans to cut 8% of its workforce while closing more than 50 stores, according to the company. It also plans to trim its management structure from an average of nine layers down to six. CEO Stefan Larsson, who joined the company from Old Navy, where he led a successful turnaround, also plans to cut the amount of time it takes the brand’s clothes to go from idea to stores.
Macy’s (NYSE:M) plans to close 40 stores and eliminate as many as 4,500 jobs, a process that has already started and will continue through the summerCEO Terry J. Lundgren said the moves were needed due to the company’s “disappointing 2015 sales and earnings performance.” The chain does plan to open five new Macy’s locations in 2016 as well as 50 additional Macy’s Backstage off-price stores.
 Barnes & Noble (NYSE:BKS) may be the only happy news on this list as the bookseller has actually decided to close fewer stores in 2016 than it has in any year since 2000. The chain will shutter only eight locations, down from the 13 it had originally planned to lose this year, Fortune reported. The change comes because while most retailers have seen sales slow at physical stores, Barnes & Noble has actually lost online sales volume while its retail locations have been a relative strength.
Sears (NASDAQ:SHLD) has struggled with both its namesake brand and its low-price Kmart locations and announced in April that it plans to close unprofitable locations this summer. The company has already begun the process of closing 68 Kmart and 10 Sears stores.
“The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability,” said CEO Edward S. Lampert in the press release. “We’re focusing on our best members, our best categories and our best stores as we work to accelerate our transformation.”
Office Depot (NASDAQ:ODP) entered 2016 expecting to no longer exist by the end of the year as it had planned to merge with Staples (NASDAQ:SPLS). That deal was nixed by federal regulators and now the chain must find a way forward. Part of its ongoing strategy involves closing stores and it had already shut down nine as of its fiscal first quarter and plans to close a total of 50 locations in 2016.
Staples has also been steadily shrinking and it closed 73 stores in 2015 with plans to shut down another 50 this year, according to its Q4 earnings release.  Those closures are expected to continue even though the Office Depot merger has been called off.
Wal-Mart (NYSE:WMT) has been stepping up its digital sales efforts while it has been making strategic decisions to close stores. The company announced in January that it plans to close all of its 102 Wal-Mart Express stores as well as 52 full-size U.S. locations.
“Actively managing our portfolio of assets is essential to maintaining a healthy business,” said CEO Doug McMillon in the press release. “Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future. It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.”
Gap (NYSE:GPS) has faced some of the same retail headwinds that have plagued Ralph Lauren. That has led the company to a major pullback of some of its international efforts. For example, it pulled the Old Navy brand out of Japan entirely, closing over 50 stores. The company’s North American operations have not been hurt as dramatically as some of its international ones, but the retailer did close 14 stores across its Gap, Old Navy, and Banana Republic brands in  its fiscal Q1. More closures are expected in the U.S. in 2016, but the company has not set a specific number.