by Charles Hugh-Smith
Commodities could rise even as global demand sags.
The conventional wisdom of the moment is that a weakening global economy will push the cost of commodities such as oil down as demand stagnates. This makes perfect sense in terms of physical supply and demand, but this ignores the consequences of financial demandand capital flows.
The Mechanism That Holds Chinese Banks Together Is Falling Apart
China’s seven day repo rose to a record high of 10.77% in Shanghai, the highest since March 2003, according to Bloomberg*.
Meanwhile, the one-day rate hit a record 12.85%. And Zerohedge reported that overnight repo hit 25%.
The liquidity squeeze in China first began ahead
McDonald’s Asia Brings Down April Comparable Store Sales
Here’s the regional breakdown:
U.S. up 0.7% (Est. down 0.05%) Europe down 2.4% (Est. down 1.01%) Asia/Pacific, Middle East and Africa (APMEA) down 2.9% (Est. down 1.44%)
“In April, APMEA’s comparable sales declined 2.9%, reflecting the impact of Avian influenza, primarily in China, and softer results in
What “Dr. Doom” Marc Faber is thinking now
“I do not trust the banking system…”
First, I am discussing capital flows and the general belief among some economists that trade and current account deficits do not matter because the money flows back in the form of investments in equities, bonds, real estate, direct investments, and
Sucker Alert? Insider Selling Surges After Dow 14,000
Insiders have been pulling out of stocks just as small investors are getting in.
Selling by corporate executives has surged recently as the Dow Jones Industrial Average hit 14,000 and retail investors flooded into stocks. The amount of insider selling has usually preceded market selloffs.
One week ago, when we reported the news that the Bundesbank had secretly pulled two thirds of its gold from London we said the following:
… Germany has done nothing wrong! It simply demanded a reclamation of what is rightfully Germany’s to demand.
And here is the crux of the issue: in a globalized system, in which
The Chinese government has called on key agencies including the central bank to come up with plans to deal with the potential economic risks of a Greek withdrawal from the euro zone, three sources with knowledge of the matter told Reuters on Monday. The sources said the plans may include measures to keep the yuan
Based on a swap-spread-based model, EURUSD should trade around 1.30, but based on GDP-weighted sovereign credit risk EURUSD should trade around 1.00; so who is right and what are the factors that supporting the Euro at higher levels than many would assume (given the rising probability of a Euro-zone #fail and the 0.82 lows from 2000). UBS addresses four
Bank of Korea Governor Kim Choong Soo urged major central banks to plan an orderly withdrawal of excess liquidity and said that further easing may hurt emerging economies and the global economic recovery.
Extra loosening “could do more harm than good when the financial markets are already flooded with cheap liquidity but remain
Bob Chapman International Forecaster Thursday, April 12, 2012
It was 13 months ago we disclosed that the administration passed a stimulus bill known as the $17.5 billion “Hiring Incentives Act” to restore employment. It required that foreign banks not only withhold 30% of all outgoing capital flows, and disclosure of the full details of transactions
Mac Slavo SHTFplan.com
It’s over folks. According to some analysts recent price swings indicate that the gold and silver run-up will soon be coming to an end.
Sharp falls in the gold price have prompted some bears or pessimists to predict it will plunge below $1,000 (£625) an ounce.
Goldcore priced bullion at $1,721
European CEOs Move Cash to Germany In Case of Euro Breakup
By Manuel Baigorri and Richard Weiss
Dec. 9 (Bloomberg) — Grupo Gowex, a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at
by Charles Hugh Smith from Of Two Minds
Why The European Union Is Doomed
The structural flaw at the heart of the E.U. dooms it and the euro to either dissolution or radical tranformation. To understand the structural flaw which dooms the European Union, we need to start with the Union’s fundamental financial characteristics.
by Pam Heaven , financial post
Hereâ€™s something even one of Bay Streetâ€™s best-known bears can be bullish about. David Rosenberg, chief economist of Gluskin Sheff + Associates, listed in his morning note Wednesday 15 reasons to love the loonie (He couldnâ€™t stop at 10).
So letâ€™s hear it for Canadaâ€™s currency: 1. Better
As the mainstream media finally made a big story out of capital flows after ignoring the topic with impunity for 33 straight weeks (of $90 billion worth of outflows), the question many ask themselves is whether last week’s minimal inflow into domestic equity funds is indicative of a shift in risk sentiment, and