Billionaire Eric Sprott – Entities Wiped Out Overnight As Western Central Banks Near Total Surrender
January 28, 2015
Today billionaire Eric Sprott warned King World News that as entities are being wiped out overnight, Western central banks are nearing the point of total surrender. This interview takes a trip down the rabbit hole of desperate central banks coming to the realization that it’s nearly game over.
Eric Sprott: “I find it very ironic that the most volatile asset class these days is currencies. This seems very strange with global stock markets just treading water here. Yet we have currencies that are flailing all over the place, including the euro, yen, ruble, and the Canadian dollar. It strikes me that we are living in a very bizarre financial world as the currency wars continue to rage with various governments and central banks.
Eric, I’ve always wondered, how do we deal with this one quadrillion dollars of derivatives? These are tied to various instruments, including currencies. We already saw what happened when the Swiss franc was revalued and companies went broke overnight.
Jim Sinclair’s Commentary
Russia and China are not buying gold as an investment but rather as a policy. A policy is a form of a plan.
That plan has to do with the reset.
Therefore this move up might be the last hurray for the greenback.
Iran, Russia to create ‘joint bank’ for trade in national currencies – ambassador
Published time: January 28, 2015 03:24
Iran and Russia are planning to switch their bilateral trade to national currencies for which the states will create a joint bank or a mutual account, Iran’s ambassador to Russia, Mehdi Sanaei, has announced.
“Both sides plan to create a joint bank, or joint account, so that payments may be made in rubles and rials and there is an agreement to create a working group [for this],” Ambassador Sanaei told Sputnik on Tuesday.
“In order to do this, meetings need to be held between the deputy heads of the Central Banks of Russia and Iran,” Sanaei said. “I hope this visit will happen soon.”
Sanaei added that bilateral relations “are actively developing” and that 2014 was “a very fruitful year” for both countries.
Noting high tariffs on the exports of Iranian goods to Russia, Sanaei said that Tehran expects to sign an initial agreement with the Eurasian Economic Union in 2015.
Jim Sinclair’s Commentary
Politics, you have to love it.
Damning report on banking collapse stalled until after UK election
Published time: January 27, 2015 15:41
The Financial Conduct Authority (FCA) has come under fire for delaying the release of a report into the crisis rescue of Halifax Bank of Scotland (HBOS) until after the general election in May.
Senior Labour politicians, bankers and financial regulators are expected to receive damning criticism for their role in the bank’s near-crash in 2008.
Originally scheduled for publication in April 2013, the deadline was pushed back to the end of 2013 last summer and is now unlikely to be published until September at the earliest.
Business Secretary Vince Cable attacked the delay, saying the employees who lost their jobs as a result of irresponsible management at HBOS deserve better.
This latest delay is believed to be caused by a procedure called “Maxwellisation,” named for 20th century British media mogul Robert Maxwell, whereby individuals facing criticism in an official report are allowed to respond before its publication.
German Bond Auction a Disaster – Little Bid
Posted on January 28, 2015 by Martin Armstrong
Greek elections have dealt a serious blow to the confidence behind the Euro. The press has been touting the “official” position put out by Brussels to stay in their good graces. But this policy has resulted in serious misleading of the institutions who buy bonds. These people are starting to get worried. What happens if the Euro collapses? Many are just starting to comprehend this could lead to a whole other level of the crisis – we call BIG BANG.
The results of the BundesBank’s EUR2 bn 8/46 tap are now out and it was a complete disaster. The possibility a poor result and another technical failure is just starting to sink in. The results really were real bomb. The BundesBank took up a stunning 53.1% of the offer making this the most for any German auction going back to the beginning of the Euro. The total bids were only EUR1.2 bn with an average yield of 1.07%, which was by far a record low, down from 1.77% in October last year. We warned that the trade may be sell the German/buy American.
Jim Sinclair’s Commentary
You can’t keep the bankers down. I think when buried, their coffins will need to nailed into the ground.
Subprime Bonds Are Back With Different Name Seven Years After U.S. Crisis
by Jody Shenn
6:35 PM MST
January 27, 2015
(Bloomberg) — The business of bundling riskier U.S. mortgages into bonds without government backing is gearing up for a comeback. Just don’t call it subprime.
Hedge fund Seer Capital Management, money manager Angel Oak Capital and Sydney-based bank Macquarie Group Ltd. are among firms buying up loans to borrowers who can’t qualify for conventional mortgages because of issues such as low credit scores, foreclosures or hard-to-document income. They each plan to pool the mortgages into securities of varying risk and sell some to investors this year. JPMorgan Chase & Co. analysts predict as much as $5 billion of deals could get done, while Nomura Holdings Inc. forecasts $1 billion to $2 billion.
Investment firms are looking to revive the market without repeating the mistakes that fueled the U.S. housing crisis last decade, which blew up the global economy. This time, they will retain the riskiest stakes in the deals, unlike how Wall Street banks and other issuers shifted most of the dangers before the crisis. Seer Capital and Angel Oak prefer the term “nonprime” for lending that flirts with practices that used to be employed for debt known as subprime or Alt-A.
While “subprime is a dirty word” these days, “what everyone is seeing is the credit box has shrunk so much that there’s a lot of good potential borrowers out there not being served,” said John Hsu, the head of capital markets at Angel Oak. The Atlanta-based firm expects to have enough loans for a deal next quarter in which it retains about 20 percent to 33 percent, he said.
Reopening this corner of the bond market may lower consumer costs and expand riskier lending, aiding the housing recovery. The most dangerous slices created from the securitization of loans are also the highest-yielding, offering companies from private-equity firms to real estate investment trusts a way to increase returns as global central banks suppress interest rates to foster economic growth.
Jim Sinclair’s Commentary
Fatca, like sanctions, will backfire hard and be very costly to the USA as economic power seeks other venues and currency resets.
Russian Banks Cancel US Contracts Over Demands to Reveal Taxpayers’ Data
20:54 28.01.2015(updated 21:33 28.01.2015)
Russian banks have canceled contracts with their US clients because of the Foreign Account Tax Compliance Act (FATCA), the law that requires foreign banks to share information on US citizen’s banking activities. If a bank does not comply, it may be subject to a fine.
NOVOSIBIRSK, January 28 (Sputnik) — Russian banks have been forced to cancel contracts with their US clients due to the Foreign Account Tax Compliance Act (FATCA), law that requires foreign banks to provide information on US citizens’ banking activities, a senior Russian official said Wednesday.
The FATCA, which became law in 2010, requires foreign banks to report information on some US clients. If a bank does not comply, it may be subject to a fine. Moscow and Washington were negotiating a FATCA deal acceptable for both sides until March 2014, when the United States suspended the talks over the Ukraine crisis. “We could not put our national security under risk in this case, this is why a rule was adopted, under which every credit services organization may cancel the contracts with its clients, the US residents, and avoid FATCA regulations this way,” Deputy Director of Russia’s Federal Financial Monitoring Service Pavel Livadny told journalists.
Is This Crisis About To Send The World Into Turmoil?
January 28, 2015
As the crude oil market continues to struggle and worries about Europe intensify, today one of the legends in the business sent King World News a warning about a developing crisis that could send Europe and the world into turmoil.
Portion of Art Cashin’s note today: Greek Markets In Turmoil – Things in Athens continue borderline chaotic. The Greek stock market is down the equivalent of 2500 Dow points since Friday. Here’s a nice synopsis from my friend Peter Boockvar over at the Lindsey Group:
Any thought of pragmatism from the newly elected Greek government is quickly being thrown out the window. But, when you elect Marxists, this I guess is what you get. Greek capital markets are under major stress again today as they are losing faith that the negotiated process from here on with debts and budgets will go smoothly.
The Athens stock market is down by another 8% and lower by 14% in just 3 days. Greek banks are down by 17-20% today alone. The 3 yr note yield is higher by 295 bps to 16.98% vs 10.1% as of Friday’s close. Greek 5 yr CDS is wider by 40 bps and has risen by 400 bps over the past three days. Alexis Tsipras held his first cabinet meeting today and pledged four priorities: 1)a return to dignity for the Greek people, 2)help the economy, 3)renegotiate Greek debt, 4)Get rid of corruption in government.
He also wants to bring back a higher minimum wage just when the Greek economy needs to get more competitive. He wants to hire more government workers just as they have too many and he wants to freeze plans for privatizations just as the private sector is most needed. With respect to what everyone is most focused on, debt renegotiations, Tsipras today said “we do not want an extreme catastrophic clash…we do not want to go to mutually assured destruction but we won’t continue being subservient.”
Jim Sinclair’s Commentary
Major corporations rig the economic data figures and they get a pass. A kid boosts a car and gets blown away. Something is wrong with that equation.
Fired Before Hired: How Corporations Rigged The Job Market And Killed The American Dream
Submitted by Tyler Durden on 01/28/2015 18:04 -0500
The latest corporate scam is to blame workers for the high unemployment rate. They say there is a skills gap. Even President Obama is in on the joke. In his most recent State of the Union address, Obama called for Congress to make community college free. Because nothing will get you a job more than an associate’s degree from your local college.
The real skills gap is the other way around: too many skills for the low-wage menial jobs that pervade the labor market. The person who makes your coffee or your Big Mac might be able to design the next major bridge or write for The New York Times. Instead of high school kids cooking up your lunch, true professionals are behind the counter, and the future of the country is behind it too. The longer they stay there, the odds increase that America will take a permanent backseat in global power. In one short century, we have gone from superpower to super size me, a plutocracy, a nation that wasted its most valuable resource: the energy and innovation of its own people.
As you send your resume for the latest job ad, do you ever feel like the labor market is rigged against you? The job boards have turned into such black holes that we need Stephen Hawking to come work out the equations for us. You send your resume in, and it disappears.
In 2012, Eric Auld, an unemployed 26-year-old with a master’s degree in English, decided to find out what was on the other side of the black hole. He created a fake job ad as an experiment:
Administrative Assistant needed for busy Midtown office. Hours are Monday through Friday, nine to five. Job duties include: filing, copying, answering phones, sending e-mails, greeting clients, scheduling appointments. Previous experience in an office setting preferred, but will train the right candidate. This is a full-time position with health benefits. Please e-mail résumé if interested. Compensation: $12-$13 per hour.
Greek Credit Risk Spikes, Default Probability Tops 70%
Submitted by Tyler Durden on 01/28/2015 10:14 -0500
Greek default risk has surged in recent days and today as it becomes clear what Syriza expects from Europe, short-term CDS are at post-crisis highs with 5Y CDS implying a 76% probability of default (based on standard recovery assumptions – which may be a little high in this case). Given the domestic bank dominance in the buying of domestic government debt,Greek banks are getting hammered as everyone’s favorite hedge fund trade is an utter bloodbath. Greek stocks overall are down and GGBs are tumbling once again – back at 16 month lows (given back all the ECBQE hope bounce). Perhaps not surprising moves, given new Greek Finance Minister Yanis Varoufakis reality-exposing comments yesterday, “the problem with the bailout is that it wasn’t really a bailout… it was an extend and pretend, it was a vicious cycle, a debt-deflationary trap, which destroyed our social economy.”
Greek Default Risk is spiking…
And Greek bonds are tracking that risk…
Jim Sinclair’s Commentary
No ticket = no shirt.
Ukraine still fails to pay gas bills in full — Gazprom
January 28, 12:30 UTC+3
VIENNA, January 28. /TASS/. Ukraine is still not paying gas bills in full, Gazprom Deputy CEO Alexander Medvedev said at the European gas conference in Vienna on Wednesday.
“Ukraine is still not paying bills in full in accordance with its contractual obligations,” he said.
Russian Prime Minister Dmitry Medvedev said on January 20 that Russia would honor its obligations in gas cooperation with Ukraine only if Kiev repaid its debts for natural gas supplies.
The premier instructed the Gazprom head to seek Kiev’s repayment of its gas debt currently at $2.440 billion and approved Gazprom’s corresponding letter for Ukraine’s Naftogaz national energy company.
“We proceed from the fact that these accords (with Ukraine on gas supplies) can be normally fulfilled only if the existing debt is repaid,” the premier said at a meeting with Gazprom CEO Alexey Miller and Energy Minister Alexander Novak.
Ukraine repaid $3.1 billion worth of gas debts before Gazprom restarted gas supplies to the ex-Soviet republic as part of a winter package agreed between Moscow and Kiev with the EU’s mediation in Brussels late last year, the Gazprom CEO said earlier. “But this is only a part of the debt,” he said.