Global Economic Collapse Is Now In Progress: U.S. GDP Revised Lower, FedEx, Capterpillar Reports Raise Red Flags, Europe May Have Just Run Out Its Luck, InvestmentNews Warns Bond Crash Dead Ahead, And Ben Bernanke States Cyprus Bank Levy Is Possible Here In The US!

No Surprises From FOMC – Statement Redline Comparison

• *FED SEES ECONOMY RETURNING TO MODERATE GROWTH AFTER Q4 PAUSE
• *FED CONTINUES TO SEE DOWNSIDE RISKS TO ECONOMIC OUTLOOK
• *FED MAINTAINS $85 BILLION MONTHLY PACE OF BOND BUYING
• *FED SAYS FISCAL POLICY HAS BECOME SOMEWHAT MORE RESTRICTIVE

Europe Is A Complete Disaster, And Its Luck May Have Just Run Out

What just happened in Cyprus has always been a risk.
…
Against the backdrop of bad theory and bad policies, Europe has engaged in a series of ad hoc rescues and bailouts that tamp down flareups where they occur.
And heretofore Europe has actually gotten lucky. All the big votes have gone Europe’s way.
Remember all those Greek austerity votes? They always passed by the skin of their teeth.
Remember the German Supreme Court decision on the legality of the bailouts? It went Europe’s way.
Remember when Slovenia was the center of attention, because it came close to not approving the expanded bailout plan? Slovenia eventually played ball.
And then of course the public elections always turned out okay. In Greece last summer, the conservative New Democracy party narrowly edged out the leftist SYRIZA party. Had SYRIZA won, it would have set up an epic clash, as SYRIZA was not going to go along with the austerity that was demanded by the outside.
It looks like Europe’s luck is running out.
In Italy last month, the election ended inconclusively. The center-left coalition failed to get enough votes (it seems) to form a government, and there might need to be new elections.
…

FedEx, Capterpillar reports raise red flags

Investors got a double-whammy Wednesday from FedEx and Caterpillar, underscoring why profit growth expectations for S&P 500 companies have been coming down ahead of April’s parade of first-quarter earnings reports.
FedEx /quotes/zigman/254280/quotes/nls/fdx FDX -6.87% and Caterpillar /quotes/zigman/221644/quotes/nls/cat CAT -1.51% both issued disappointing business updates, sending their shares lower as the broader U.S. stock market edged higher. The two, long considered proxies for economic demand world-wide, have been restructuring their businesses to adapt to current conditions.
Global Trade Bellwether FedEx Cuts Outlook, CapEx Forecast, Says May Ground Aircraft

DEUTSCHE BANK: Here’s Why The ECB May Not Rescue Cyprus

It’s probably incentivized to do the opposite.
Following the Cypriot parliament’s total rejection of the controversial bank bailout deal reached by EU finance ministers over the weekend, the ECB released a statement saying that it would provide liquidity to Cyprus ”within the existing rules.”

Emergency Liquidity Assistance is the ECB’s last recourse for euro zone banks that find themselves unable to raise funding in the open market through bond issuance.
However, as several pointed out following the statement, Cypriot banks probably don’t even qualify for ELA, which means the ECB may have really been saying something more along the lines of “don’t count on it.”
Deutsche Bank economist Gilles Moec explains in a note to clients.
“The provision of ELA funding is normally conditional on the receiving banks remaining intrinsically solvent,” says Moec. “With the prospect of a bank run starting immediately after the expiry of the bank holiday, this condition hardly holds.”
…

Here’s Where The Ugly Consequences Of Easy Monetary Policy Will First Appear

Here’s the chart Minack included demonstrating this potential problem.

Morgan Stanley

…

FED: THE UNEMPLOYMENT RATE IS GOING TO BE BETTER THAN WE THOUGHT

But GDP will be lower.
However, they also modestly revised lower their expectations for GDP.
Here’s a round up:

• Unemployment rate  2013: 7.3-7.5 percent, down from 7.4-7.7 percent 2014: 6.7-7.0 percent, down from 6.8-7.3 percent 2015: 6.0-6.5 percent, down from 6.0-6.6 percent
• GDP 2013: 2.3-2.8 percent, down from 2.3-3.0 percent 2014: 2.9-3.4 percent, down from 3.0-3.5 percent 2015: 2.9-3.7 percent, down from 3.0-3.7 percent

…

BERNANKE STATES CYPRUS STYLE DEPOSITOR HAIRCUTS POSSIBLE IN US IF EVENTS IN EUROPE BECOME CONTAGIOUS!

*BREAKING*
At this afternoon’s FOMC Press Conference, Fed Chairman Ben Bernanke just confirmed that Cyprus style depositor haircut wealth confiscation is possible here in the US “if the Cyprus event or another event in Europe were to become contagious and the people lose confidence in the US dollar”.
And there you have it.  The entire Cyprus fiasco is now officially on the table when the financial crisis escalates here in the US!! GOT PHYZZ??

At 3:18 PM EST Bernanke was asked: Would a seizure happen to US depositors as in Cyprus, if the economy gets worse?
Beranke’s response: Only if the Cyprus event or another event in Europe were to become contagious and the people lose confidence in the US dollar.

Surprising post suggests the U.S. dollar is no longer the best “safe haven” currency

Here is something that I’ve found myself getting into friendly arguments about lately. When money is scared and wants to come out of risk assets, what is the safest place? Where do they go? The easy answers are obviously the U.S. Dollar and U.S. Government bonds right? Some people might say gold. But the math says otherwise. If you look at just the numbers, the winner is by far, the Japanese Yen.
And I don’t know why that is the case. I get asked, “why”, all the time. Not really too worried about the answer. We’ll let the math do the work and answer the more important question of, “what?”
So when you look at negative correlations with U.S. Equities, the U.S. Dollar Index is actually a plus-0.58 for the month and plus-0.68 for the quarter. Sure it’s at -0.52 for the year, but nowhere near as high as what you might expect the safest haven to be.
Treasury bonds show a nice negative correlation, but again, surprisingly low coming in at just -0.74 for the month. While -0.91 for the quarter is nice and high, the -0.55 correlation with S&Ps for the year doesn’t convince me.
Gold has a zero correlation for the month, -0.68 for the quarter, and actually a positive 0.24 for the year. So gold isn’t the answer either.
Which brings me to the Japanese Yen…

Here’s How Fast The Economy Is Deteriorating In Britain!!! INEVITABLE’ U.K.  RATING MOVES BY FITCH, S&P!

Business Insider‏@businessinsider1 h Here’s How Fast The  Economy Is Deteriorating In Britain
UK Chancellor George  Osborne is unveiling the government’s budget.
As part of that, the government is also  revealing various economic assumptions for growth, employment, borrowing, and so  forth.
As you should know by now, things are deteriorating in the UK economy, which  has caused the pound to tank.
The remarkable part is the speed.
Back in December, growth for the country was expected to be 1.2%.
Today, just a few months later? Just 0.6%. Oof.
Read more: http://www.businessinsider.com/heres-how-fast-the-economy-is-deteriorating-in-britain-2013-3#ixzz2O6buLiIM
zerohedge‏@zerohedge34 min UK Government will provide an equity  loan worth up to 20% of the value of new build home worth up to £600,000 –  BBC
Bloomberg TV ‏@BloombergTV43 min BREAKING: U.K. chancellor to  increase country’s bank levy rate to 0.142%
Cyprus rushes to find Plan B to avoid bankruptcy
Britain’s Osborne turns to Bank of England to help growth

Which index is telling “Telling the Truth???”

from kimblechartingsolutions:

CLICK ON CHART TO ENLARGE
Anyone old enough to remember the game show “To Tell the Truth?”  Three people would to tell a story and only one was telling the truth. So who is telling the truth in the chart above?
Nasdaq Composite index is facing a 30-year Fibonacci level and the top of a 10-year channel, which could be break this resistance at any time.
The NDX 100 index is at its 50% Fib level of the dot.com crash and could be forming a bearish head & shoulders topping pattern.
Who is telling the truth?  The Nasdaq Composite pattern is so tight (Fib level/Channel resistance/bottom of a rising wedge) that I suspect we will know which index is telling the truth in the very near future.  With such a long-term situation at hand, I suspect the outcome will be very important!!!

Bernanke: "We Have No Idea How Much Money We're Giving The Banks"

Bernanke on the benefits of being too big to fail.
"It's hard to calculate exactly how big of a subsidy we're giving the banks.  And I certainly never meant to imply to Senator Warren that the issue is solved and gone.  It is not solved and gone.  I agree with her 100 percent.  Too big to fail is still a major problem."
Highlight clip from yesterday's press conference.

--
Here's the Bloomberg story that Bernanke mentions:

Taxpayers Are GIVING Big Banks $83 Billion A Year!

More video from Bernanke's press conference:

BERNANKE: "Bank Account Seizure Unlikely In U.S."

WARREN: 'How Many Billions Have To Be Laundered For Drug Lords Before We Consider Shutting Down A Bank?'

Elizabeth Warren is still waiting for an answer.
During Senate testimony Liz Warren asks how much drug-laundered money it takes before banking regulators consider shutting down a bank.  Hilarity ensues. And no one ever answers the question.
Witnesses were:

1. David Cohen, Sec. for Terrorism and Financial Intelligence, U.S. Treasury
2. Thomas Curry, Comptroller, Office of the Comptroller of the Currency
3. Jerome H. Powell, Governor, Federal Reserve System

---
Transcript
WARREN: As Senator Reed just pointed out, the United States government takes money laundering very seriously for a very good reason.
Now in December, HSBC admitted to money laundering. To laundering $881 million that we know of for Mexican and Colombian drug cartels. And also admitted to violating our sanctions for Iran, Libya, Cuba, Burma, the Sudan. And they didn't do it just one time. It wasn't like a mistake. They did it over and over and over again across a period of years. And they were caught doing it. Warned not to do it. And kept right on doing it. And evidently making profits doing it.
Now HSBC paid a fine, but no one individual went to trial. No individual was banned from banking. And there was no hearing to consider shutting down HSBC's activities here in the United States. So what I'd like is, you're the experts on money laundering. I'd like your opinion. What does it take? How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this? Mr. Cohen, can we start with you?
COHEN: Certainly Senator. No question the activity that was the subject of the enforcement action against HSBC was egregious.
WARREN: But let me just move you along here on the point Mr. Cohen. My question is, given that this is what you did, what does it take to get you to move towards even a hearing? Even considering shutting down banking operations for money laundering?
COHEN: Senator, we at the Treasury Department under OFAC and (ph) authority, we don't have the authority to shut down a financial institution.
WARREN: I understand that. I'm asking, in your opinion, you are the ones who are supposed to be the experts on money laundering. You work with everyone else, including the Department of Justice. In your opinion, how many billions of dollars do you have to launder for drug lords, before somebody says, we're shutting you down?
WARREN: And I'm asking, what does it take, even to say, here's where the line is. We're going to draw a line here, and if you cross that line, you're at risk for having your bank closed?
COHEN: But I'm not going to get into some hypothetical line drawing exercise.
WARREN: Well it's somewhere beyond $881 million of drug money.
COHEN: Well Senator the actions, and I'm sure the regulators can address this issue. The actions that we took in the HSBC case, we thought were appropriate in that instance.
WARREN: So what you're saying to me is you are responsible for these banks, and again, I read your testimony and you talk about the importance of vigorous enforcement here. But you're telling me you have no view when it's appropriate to consider even a hearing to raise the question of whether or not these banks should have to close their operations when they engage in money laundering for drug cartels?
WARREN: I understand that I'm over my time.  And I'll just say here, if you're caught with an ounce of cocaine, the chances are good you're going to go to jail.  If it happens repeatedly you may go to jail for the rest of your life.  But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night.  Every single individual associated with this.  I just, I think that's fundamentally wrong.
"How would you explain this to your neighbor?" Sen. Jeff Merkley (D-Ore.) asked, noting that the fine slapped on HSBC amounted to about one percent of its profits over 10 years. "Does that really send a message?"

Update - HSBC Faces NEW Charges Of Money Laundering


Photo by William Banzai7...

ECB: Cyprus Bank Funding to Be Cut Unless Bailout Reached

The European Union gave Cyprus until Monday to raise the billions of euros it needs to clinch an international bailout or face the collapse of its financial system and likely exit from the euro currency zone.

In stark twin warnings on Thursday, the European Central Bank said it would cut off liquidity to Cypriot banks and a senior EU official made clear to Reuters that the bloc was ready to see the bankrupt island banished from the euro in the belief it could then contain damage to the wider European economy.

The ECB ultimatum came as the island's leaders struggled to craft a "Plan B" to raise the 5.8-billion euro contribution demanded by the EU in return for a 10-billion euro ($13 billion) bailout from the EU and International Monetary Fund; angry Cypriot lawmakers threw out a tax on deposits as "bank robbery."

The government said party leaders had agreed to create a "solidarity fund" that would bundle state assets as the basis for an emergency bond issue, but parliament speaker Yiannakis Omirou insisted a revised levy on larger bank deposits, many of them held by Russians, was not on the table.

The European Central Bank, which has kept Cyprus's banks operating with a liquidity lifeline, said the government had until Monday to get a deal in place, or funds would be cut off.

"Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF program is in place that would ensure the solvency of the concerned banks," it said.

In Brussels, a senior European Union official told Reuters that would mean Cyprus's biggest banks would be wound up, wiping out the large deposits it has sought to protect, and probably forcing the country to abandon the euro.

"If the financial sector collapses, then they simply have to face a very significant devaluation and faced with that situation, they would have no other way but to start having their own currency," the EU official said.

Cyprus's banking system, where massive Russian deposits give Moscow a distinct interest, has been brought close to collapse by its exposure to Greece, the epicenter of the eurozone debt crisis. But until this week, the expectation in Brussels and on financial markets had been that the appointment of a new Cypriot government in February would smooth the path to a bailout deal.

Cyprus's central bank governor said he expected to clinch a financial support package by Monday. He did not say how.

The government has ordered banks to stay closed until Tuesday. The stock exchange also suspended trading for the rest of the week. Monday is a public holiday in Cyprus.

There were long queues at some bank branches in the capital Nicosia as staff replenished cash machines, which have continued to operate while banks have been closed since last week.

In Moscow, Cypriot Finance Minister Michael Sarris said he was discussing possible Russian investments in the island's banks and energy resources to reduce its debt burden, as well as an extension of an existing 2.5-billion-euro Russian loan.

Russian citizens have billions of euros to lose in the island's outsized, teetering banking sector.

"The banks are the ultimate objective in any support we get, so it'll either be a direct support to the banks or the support that we get through other sectors will be channeled to the banks," Sarris told Reuters during a second day of talks with his Russian counterpart, Anton Siluanov.

He said Cyprus had no plans to borrow more money from Russia and add to its debt mountain. The Russian Finance Ministry had said on Monday that Nicosia sought an extra 5-billion-euro loan.

LIMITED OPTIONS

The chairman of eurozone finance ministers, Dutchman Jeroen Dijsselbloem, told the European Parliament in Brussels that Moscow had informed the EU it had no intention of plowing more money into Cyprus beyond the existing loan.

"Any other options, to go further, another loan or an investment in the banks, the Russians let us know that they are not willing to do that," he said. "Of course, the Cypriot government is now talking to the Russian government on whether more can be done; I don't know the outcome of that yet."

Dijsselbloem said new loans from Russia would in any case not solve the country's debt problem, and that a revised levy on larger bank deposits was still a possibility.

"I'm not sure that this package is completely gone and failed, because I don't see many alternatives," he said.

Senior eurozone officials acknowledged in a confidential conference call on Wednesday that they were "in a mess" and discussed imposing capital controls to insulate the currency area from a possible collapse of the small Cypriot economy.

Cyprus itself refused to take part in the call, minutes of which were seen by Reuters. Several participants described its absence as troubling and reflecting the wider confusion surrounding the island's predicament.

EU officials believe at least some of the 5.8 billion they are demanding should come from the 68 billion euros ($88 billion) in Cypriot banks, 38 billion of which are in large deposits of more than 100,000 euros, mainly from Russians and other foreigners. State guarantees would normally apply to deposits below 100,000 euros.

Hitting small savers caused visceral outrage, and the Cypriot government fears that foisting too big a burden on large depositors would wreck the offshore financial industry that forms much of the country's economy.

Among the other options, nationalizing pension funds of semi-public companies could yield between 2 billion and 3 billion euros. Issuing bonds linked to future natural gas revenue is problematic because pumping any gas is years away.

"BULL IN A CHINA SHOP"

Doubts about the fate of the small nation of just 1.1 million people has shaken confidence in the single-currency eurozone and raised geopolitical tension between the EU and Russia.

Russian Prime Minister Dmitry Medvedev, who meets a European Commission delegation in Moscow on Thursday, said the bloc had behaved "like a bull in a china shop". He likened EU proposals, which would force Russian customers to contribute to the rescue of Cypriot banks, to Soviet-era expropriations.

Tuesday's parliamentary vote marked a stunning rejection of the kind of strict austerity accepted over the past three years by crisis-hit Greece, Portugal, Ireland, Spain and Italy.

European officials maintained the pressure on Nicosia.

"I cannot rule out a Cyprus insolvency," Austrian Finance Minister Maria Fekter said in an interview with the newspaper Oesterreich. "A euro exit would not achieve anything. Cyprus must act now."

With Cypriot Energy Minister George Lakkotrypis also in Moscow, officially for a tourism exhibition, speculation was rife that access to untapped offshore gas reserves could be on the table as part of a deal for Russian aid.

Cyprus is a haven for billions of euros squirreled abroad by Russian businesses and individuals - one of the reasons why Germany and other northern eurozone states are reluctant to bail it out without a contribution from bank depositors.

The proposed levy on deposits would have taken nearly 10 percent from accounts over 100,000 euros. Smaller accounts would also have been hit, although the government proposed softening the blow to spare savers with less than 20,000 euros.

Cypriots were enraged at the proposal to tax accounts with less than 100,000 euros, which are meant to be protected by state guarantees across the European Union.

Marinos Panaretou, a 36-year-old retail manager, said he had been withdrawing the maximum 500 euros every day since Saturday, when news broke of the proposed levy.

"People feel safer if we have cash on us because you don't know what you're going to wake up to," he said. "Quite simply, you don't know what's going to happen tomorrow."

European officials say the Cypriot government could have protected small savers if it imposed a higher tax on big deposits, but it refused to do so to protect the rich foreign clients of its offshore banking business.

© 2013 Thomson/Reuters. All rights reserved.

Read Latest Breaking News from Newsmax.com http://www.moneynews.com/FinanceNews/ECB-Cyprus-Europe-Bailout/2013/03/21/id/495635?s=al&promo_code=12E06-1#ixzz2OFX1bnVD
Urgent: Should Obamacare Be Repealed? Vote Here Now!

100 trillion dollar banknote from Zimbabwe, on sale for 90 cents

In 2008 I mentioned that a one hundred billion dollar banknote was being auctioned on eBay with a high bid of AU$87.

Today, you can buy a one hundred trillion dollar banknote on Amazon for US$0.90 (plus $4.94 shipping).

Luxembourg is the ‘Death Star’ of tax havens

Business digest: But the UK and its territories 'are among the worst offenders' in a new tax haven blacklist

LAST UPDATED AT 11:08 ON Tue 4 Oct 2011

EFFORTS to tackle the global tax haven system over the last few years have been almost completely ineffective, according to a new financial secrecy index compiled by the Tax Justice Network which describes Luxembourg as tax haven 'death star' and accuses the UK of being one of the worst offenders.
Luxembourg comes third - but is described as the "Death Star" of financial secrecy in Europe "because of its leading role, in close political partnership with Switzerland and Austria, in fighting against information-sharing schemes in Europe".
As for the UK, the campaign group said that although the City of London only comes 13th on the list, if it were combined with Britain's overseas territories and dependencies - such as Jersey, Bermuda and the Cayman Islands - it would be number one.
By country, Switzerland is ranked first because "it remains a major, active impediment to global financial transparency", says the report. The Cayman Islands come second.
The TNJ criticised existing tax haven agreements for being too weak, and argued that they were a "catalyst for financial crises by attracting huge sums of destabilising capital into offshore markets".
Read a full report at the Guardian.

Cyprus