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by GoldCore
Today’s AM fix was USD 1,611.50, EUR 1,247.10 and GBP 1,064.12 per ounce. Silver is trading at $28.95/oz, €22.52/oz and £19.23/oz. Platinum is trading at $1,558.50/oz, palladium at $737.00/oz and rhodium at $1,250/oz. Gold rose $7.30 or 0.45% and closed yesterday at $1,612.60/oz. Silver rose to $29.10, and then finished down 0.03%. Cross Currency Table – (Bloomberg) Despite an increase in [...] The eurozone is on a path into a deep recession. As one of the largest and most advanced economies in the world, its centrality to a system of highly-interconnected global supply chains is taken for granted.
David Korowicz, a physicist and human-systems ecologist, recently authored a lengthy 78-page white paper titled: “Trade-Off: Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse.” It explores the increasing systemic risk brewing in the global financial and [...] Lorimer Wilson / Munknee.com Many people have been writing in to ask me, “why are you focusing on Europe so much? Who cares about Spain?” The short answer is that everyone should care about Spain. Spain could potentially take down the banking system in Europe, which would mean the U.S. facing a Financial Crisis at least on par with 2008. That is why Europe is a HUGE deal for everyone….We’re talking about systemic risk [...] by Matthew Boesler The eurozone is on a path into a deep recession. As one of the largest and most advanced economies in the world, its centrality to a system of highly-interconnected global supply chains is taken for granted. David Korowicz, a physicist and human-systems ecologist, recently authored a lengthy 78-page white paper titled: “Trade-Off: Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse.” It explores the increasing systemic risk brewing in the global financial [...] “The Knight Capital disaster, along with the many technical problems that have preceded it, should be taken as a sign of how much unseen technology risk has entered the financial system in recent years, Patterson says. Computer trading systems and exchanges have now gotten so complex that the the next Knight Capital may be a “Too Big To Fail” bank, which wakes up to find that a similar “glitch” has [...] By Ronald D. Orol, MarketWatch WASHINGTON (MarketWatch) — One day after former Citigroup Inc. CEO Sandy Weill said banks should be broken up to protect taxpayers, a current executive at the super-sized financial institution defended a new system for dissolving a large failing bank, arguing that taxpayers are not exposed. On Wednesday, Weill, often thought of as the father of too-big-to-fail banks, told CNBC that what “we should probably [...]
The New York Fed has introduced a framework to give banks the right to suspend account withdrawals at will to defend against financial panic. The shadow central planners have proposed new contigency plans to prevent the Great Depression style bank runs that are hitting Europe from spreading to America. Their solution is the creation of a framework that consists of “capital controls” which allow financial institutions that find themselves in hot water [...] by Phoenix Capital Research
For well over a year now, I’ve been stating that the Fed will not be able to engage in Quantitative Easing (QE) unless systemic risk hits (think another 2008). My reasons for this are as follows.
First off, the political consequences of hitting “print” (inflation) have made themselves evident toeveryone. Indeed, Bernanke was talking about this point as far back as May 2011. The below quote is from a Q&A session [...] by GoldCore
Today’s AM fix was USD 1,569.50, EUR 1,248.01, and GBP 1,006.09 per ounce. Silver is trading at $27.26/oz, €21.25/oz and £17.54/oz. Platinum is trading at $1,420.25/oz, palladium at $576.20/oz and rhodium at $1,190/oz. Gold fell $17.70 or 1.12% in New York yesterday and closed at $1,557.00/oz. Gold climbed over 1% overnight in Asia and maintained those gains in European [...] KWN On the heels of China and Brazil nearly doubling the IMF’s lending capacity to $456 billion, and with renewed fears of Europe becoming a systemic risk to the global financial system, today King World News interviewed John Mauldin, President of Millennium Wave Securities. Mauldin told KWN, “What we’re seeing is the real end game” and “it is coming to an end.” Here is what Mauldin had to say about the [...] by Tyler Durden
The significant rise in global systemic risk that occurred in 2008 remained until mid 2010 when it began to subside a little as Jackson Hole and QE2 seemed to allay fears somewhat. However, in the last year or so, BofA’s market fragility index has soared higher alarmingly signaling higher systemic risks than in the peak pre-Lehman era. This confirms the massively elevated signal for global systemic risk that credit markets [...] A week ago, Zero Hedge First Presented the now viral presentation by Raoul Pal titled “The End Game.” We dubbed the presentation scary because it was: in very frank terms it laid out the reality of the current absolutely unsustainable situation while pulling no punches. Yet some may have misread the underlying narrative: Pal did not predict armageddon. Far from it: he forecast the end of the current broken economic, monetary, and fiat [...] by Phoenix Capital Research
Europe will collapse before the end of the year and very likely before the end of the summer. When this Crisis hits it will be worse than 2008. And the world Central Banks will not be able to control the damage. What makes this time different? Several items: 1) The Crisis coming from Europe will be far, far larger in scope than anything the Fed has dealt with before. 2) The Fed [...] hbr.org Although its heyday as the world’s most advanced civilization has long since passed, Greece once again has the potential to influence the rest of the world. Unfortunately, its most famous export, democracy, has been replaced with a far less desirable commodity—debt. That Greece with a population of a mere 11 million and a GDP of $300 billion (only 2% of the Eurozone economies) can create systemic risk for the world [...] via WSJ: 368%: The jump since 2007 in the measure of consumer credit held by the government comprised primarily of student loans. If a student loan bubble were to pop, the government, not private banks, would be the one standing around with gum in its hair. Issuance of student loans has soared in recent years, hitting $867 billion at the end of 2011, according toan analysis from theFederal Reserve Bank of New York, more than [...] By Greg Hunter’s USAWatchdog.com The $2 billion loss of JP Morgan in derivatives trading is signaling, once again, the enormous risks big banks take with taxpayer backing. All U.S. banks are covered by the FDIC, and if a loss is big enough, it could threaten the financial system just as it did in 2008. JP Morgan has $70 trillion in total derivative exposure. The entire world has a little more than $700 [...] Only two weeks ago, we noted that the 30 most systemically important financial institutions in the world were seeing risk surging to 3-month highs. Today has seen that eclipsed dramatically as the credit risk of these entities soars to the year’s worst levels jumping 22% in the last two weeks alone. At 264bps, we are now close to the 3/9/09 peak crisis levels (of 274bps) and pushing up to the Q4 [...] From Azizonomics: “J.P Morgan Chief Executive Officer Jamie Dimon said the firm suffered a $2 billion trading loss after an ‘egregious’ failure in a unit managing risks, jeopardizing Wall Street banks’ efforts to loosen a federal ban on bets with their own money. The firm’s chief investment office, run by Ina Drew, 55, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter [...] by Tyler Durden
The implications of a nation leaving the Euro (and its contagion effects) are becoming clearer but are by no means discounted by the market. The risk of an interruption in the Greek adjustment program has increased significantly – and as Goldman notes – is the most likely eventual outcome for Greece and fears of the missed interest payment in June continue to concern many. The tough decision and dilemma for [...] by Zh
Three weeks ago we discussed the ultimate-doomsday presentation of the state of Spain which best summarized the macro-concerns facing the nation and its banks. Since then the market, and now the ratings agencies, have fully digested that meal of dysphoric data and pushed Spanish sovereign and bank bond spreads back to levels seen before the LTRO’s short-lived munificence transfixed global investors. However, the world moves on and while most are focused directly [...] April 26, 2012 by Goldguru The Daily Reckoning The paper dollar is now the single most important source of systemic risk to the financial system, the world economy, and the security of the American people. That is the lesson of the past 100 years that Federal Reserve Chairman Ben Bernanke did not teach during hisfour Lectures at George Washington University’s Graduate School of Business. Instead, he celebrated the importance of the extraordinary powers he and his fellow governors have to [...] kingworldnews.com With renewed fears of Europe becoming a systemic risk to the global banking system, today King World News interviewed John Mauldin, President of Millennium Wave Securities. Mauldin spoke candidly with KWN about the crisis, how much has been printed and what to expect going forward: “$7 or $8 trillion (in printing) is probably where we are, but whatever the number is, it’s significant. Will Europe have to print a great deal [...] “This is turning into a disaster for the EU periphery,” says RBS’ Andrew Roberts, who notes Spanish and Italian banks are “deeply underwater” on their LTRO-enabled purchases of sovereign debt. “What the LTRO has done is concentrate systemic risk even further,” argues Guy Mandy from Nomura. “If everything goes wrong, it could go wrong in a hurry.”
via Telegraph: Credit experts say the Spanish and Italian banks are trapped with large losses on sovereign [...] …yep, he’s right. Back from Paris We are back from Paris. The head is filled with new info. For the publicly available portion of the conference, see the GIC website, www.interdependence.org. The remaining comments will be my personal “takeaways” from both public and private conversations. By Chatham House Rule and Jackson Hole Rule, these words are attributable only to me. All errors are mine. 1. In my view, the situation in Portugal is [...] From Nomi Prins, former Managing Director at Goldman Sachs and aithor of It Takes A Pillage My Statement Regarding Greg Smith’s Goldman Resignation Today, I have received dozens of media requests and hundreds of emails regarding former Goldman Sachs executive, Greg Smith’s gutsy, and internationally resonating, public resignation. I applaud Smith’s decision to bring the nature of Goldman’s profit-making strategies to the forefront of the global population’s discourse, as so many others have been doing through [...] From FT: With the €530bn lent to banks through its latest three-year longer-term refinancing operation, the size of the European Central Bank’s balance sheet has increased to unprecedented levels, raising a number of concerns. Not all are justified. The main concern is that sooner or later the increase in central bank money will lead to inflation. However, there is no empirical evidence – across countries and over time – that the size [...] 1) Draghi Says Europe Should Rely Less on Assessments of Ratings Companies “European Central Bank President Mario Draghi said while investors had largely priced in the euro-area sovereign downgrades from Standard & Poor’s, there should be less reliance on their ratings. “It seems to a great extent markets have anticipated these ratings changes and priced them in,” Draghi said today at the European Parliament in Strasbourg. “We should learn to do without ratings, [...] |
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It’s Not Over Yet For JPM
IG9 10Y spreads re-surged today and were very choppy into the close as they broke back above 155bps (at 155.5/157.5bps now) for the first time since Mid-December with a 31% rip in the last two weeks. This fits perfectly with our ongoing thesis of this being a tail-risk hedge (not a simple ‘spread’ as other ignorant commentators presume) whose risk management has exploded in their face. While the skew (the [...]