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Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter Another Lehman Brothers kerfuffle has erupted, this time in Germany, in broad daylight. With a stunning amount: up to €800 million ($1.04 billion) in fees for the insolvency administrator. It blows away the prior German record of €70 million paid to the insolvency administrator of Arcandor AG, the parent of department store and mail-order retailer KarstadtQuelle. Hedge funds, which have massively bought up claims of the original Lehman creditors, are raising a [...] by Charles Hugh Smith from Of Two Minds Hedging Against Capital Controls: Opening an Account Overseas As financial insecurity and instability rise, hedging becomes increasingly important as a means of capital preservation. One potential hedge is diversifying one’s liquid capital by holding some cash in a “safe haven” foreign bank account. Two signs that fear and instability have reached critical mass are capital flight and capital controls. Capital flight is people and enterprises moving [...] KWN Today four-decade veteran John Hathaway told King World News, “People have talked about gold manipulation … There is tremendous corruption in the banking system, and I think the banks are now essentially agents of the state, more than they ever have been.” The prolific manager of the Tocqueville Gold Fund also warned, “… people are concerned that their liquid assets are not safe,” and “… there is enough in the system, right now, to justify [...] IRS data suggests that, globally, U.S. nonfinancial companies hold at least three times more cash and other liquid assets than the Federal Reserve reports, idle money that could be creating jobs, funding dividends or even paying a stiff federal penalty tax for hoarding corporate cash. The Fed’s latest Flow of Funds report showed that U.S. nonfinancial companies held $1.7 trillion in liquid assets at the end of March. But newly released [...] Banks and traders must prepare for a devastating market seizure as governments grapple with the escalating economic crisis in Europe, a Bank of England policymaker has warned. Cheap and ready access to the liquid assets that oil the financial markets are under threat from both state-imposed capital controls and flagging confidence in the euro, Robert Jenkins, a member of the Bank’s Financial Policy Committee, told the Global Alternative Investment Management conference [...] Michael #1 Lloyd’s of London is publicly admitting that it is rapidly making preparations for a collapse of the eurozone. #2 According to the New York Times, top global law firms are advising their clients to withdraw all cash and all other liquid assets from Greece…. So their advice is blunt: Remove cash and other liquid assets from Greece and prepare to take a short-term hit on any other investments. “My personal view is that it is [...] by ZH For today’s dose of sobering cold water we go to the Bank of International Settlements, best known for being the FX bid (and gold offer) of last resort, whose Quantitative impact study results published by the Basel Committee has some very bad news for long-term bank viability: “The Committee also assessed the estimated impact of the liquidity standards. Assuming banks were to make no changes to their liquidity risk profile or [...] From The Big Picture: … It is a notorious truth that western companies are hoarding cash. They are not hiring or investing as they should. They are not doing their bit – and cash-strapped governments are getting restive. The official response could take various forms, starting with taxation. Unless, of course, companies resume spending off their own bat. But that looks increasingly unlikely. The reasons lie partly in the one-off shock of [...] As of late, regulators and financial theorists have been scratching their heads over a conundrum. Over the past decades, scores of financial theories and pricing models have been built on the assumption of a mythical risk-free asset. That asset was supposed to be government bonds—supposedly the safest bet around. And upon those theories were built not only trading strategies, but also, and more dangerously, banking regulations. The Basel Accords, which govern global central [...] He’s done it before, and he’s doing it again. Donald Trump arrives for Regis Philbin’s farewell episode of “Live! with Regis and Kelly,” in New York, Nov. 18, 2011. (AP Photo/Charles Sykes) In his new book, “Time to Get Tough,”Donald Trump lashes into PresidentBarack Obama and threatens to run against him next year if the Republicans don’t nominate a strong candidate. Beating the drum even louder, Mr. Trumpdetails his net worth—which he puts [...] from a canadian econ blog: The world wants more US government debt. The US Treasury should supply it. — This fascinating story came out during the psychodrama of the US debt ceiling: U.S. Treasury debt prices soared on Friday on fears a U.S. default could trigger a shortage of Treasuries and even push the world’s largest economy back into recession. On the face of it, this makes no [...] By Claus Vistesen The Calafia Beach Pundit raises an interesting question in relation to the recent surge in the US money supply, which he suggests might be a reflection of a scramble for USD assets. More specifically, the argument would seem to be that a silent run on European banks is in the works as money is moved into perceived safe USD liquid assets. As this chart of [...] by Charles Hugh Smith from Of Two Minds Global Grand Policy Failure: Liquidity Traps and Financial Black Holes “We are all Keynesians now,” indeed. Keynesian policies have pushed the global economy into a financial black hole. What we are experiencing is Grand Policy Failure on a global scale, a failure best understood by examining liquidity traps and the Keynesian plummet into Financial Black Holes. What is a liquidity trap? Here’s Wikipedia’s definition: The [...] by ZH We have long been warning that by fat the biggest risk to the Greek banking system is not whether or not its retains its access to the ECB funding window (it will, probably even in the case of a Greek bankruptcy through covert pathways), but domestic confidence in the financial institutions as expressed by deposits, or rather, the lack thereof. Today, as part of [...] Early this morning, Muddy Waters sent out the following email: The Globe & Mail, one of Canada’s largest newspapers, has published a lengthy investigative piece on Sino-Forest’s holdings in Yunnan. The article corroborates Muddy Waters’ research showing that TRE has massively overstated its Yunnan timber holdings. http://www.theglobeandmail.com/globe-investor/key-partner-casts-doubt-on-sino-forest-claim/article2066110/ Muddy Waters is still short Sino-Forest. Bottom line: a small 2-person operation outsmarted a $35 billion hedge fund courtesy of the [...] From Gold Core Eurozone Central Banks Net Buyers of Gold in 2011 for First Time Since Inception of Euro – Global Central Bank Gold Demand Increases by 43% So Far in 2011 Gold is higher in Euros but mixed in other currencies this morning as the euro continues to weaken on sovereign debt and contagion risk. The euro has fallen against all currencies in recent days [...] Some thoughts by David Schawel at Economic Musings who follows up on our observations from a week earlier regarding the possibility for a major Treasury collateral scramble if and when Basel III is ever implemented, and the implications for US Treasury demand. Could Basel III Create A Floor For Sovereign Debt Prices? The evolution of regulatory reform in the banking industry has been well publicized since the onset [...] Ron French, Detroit News staff writer A Michigan man who won $2 million in a state lottery game continues to collect food stamps 11 months after striking it rich. And there’s nothing the state can do about it, at least for now. Leroy Fick, 59, of Auburn won $2 million in the state lottery TV show “Make Me Rich!” last June. But the state’s Department of Human Services determined he was [...] by elfish 83% of all U.S. stocks are in the hands of 1% of the people. • 83% of all U.S. stocks are in the hands of 1% of the people. by James Its been decades since we’ve had a government of, by, and for the people. And since that phrase from the Declaration of Independence served as a charter for the Constitution, I would submit that the people of this country are no longer obligated to recognize the current government as legitimate. If you agree, pass this along. 83 percent of all U.S. stocks are in the hands of 1 percent of [...] by Michael • 83 percent of all U.S. stocks are in the hands of 1 percent of the people. by Lisa 3 percent of all U.S. stocks are in the hands of 1 percent of the people. by stanrich For 25 years wages have not risen in the US while inflation continued and consumers bridged the gap with credit. Now the credit window has slammed shut but the Fed is still stuck in an outmoded model of targeting a 2% per year inflation rate because they are afraid of deflation. Notice how their measure of inflation excludes food and energy prices [...] by AndyInGeorgia No wonder why job growth is so slow. We have been brainwashed for too long by politicians, lobbyists and some large corporations. We need to revert back to managed trade that puts our interests first. Here are the statistics to prove it: • 83 percent of all U.S. stocks are in the hands of 1 percent of the people. by Jess 3 percent of all U.S. stocks are in the hands of 1 percent of the people. |
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