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Monthly Archives: June 2014

S&P: China Over Takes U.S. as Coporations Borrow Over $14 Trillion

“The Chinese corporate bond market has overtaken the United States as the world’s biggest and is set to soak up a third of global company debt needs over the next five years, according to rating agency Standard & Poor’s, underscoring the growing risk China’s debt market is imposing on the global financial system.

Chinese corporate borrowers owed $14.2 trillion at the end of 2013 versus $13.1 trillion owed by U.S. corporations with the switch in rankings taking place a year earlier than it had expected, S&P said on Monday.

The Asia-Pacific region, led by China, is seen accounting for half of global corporate debt financing needs of $60 trillion over the five-year period to 2018 when the region will account for more than half the projected total debt outstanding of $72 trillion.

China, the world’s second-largest economy is currently financing a quarter to a third of its corporate debt through its shadow banking sector and this had global implications, S&P said.

“This means that as much as 10 percent of global corporate debt is exposed to the risk of a contraction in China’s informal banking sector,” the agency said, estimating this at $4 trillion to $5 trillion. “With China’s economy likely to grow at a nominal 10 percent per year over the next five years, this amount can only increase.”

Cash flows and leverage at Chinese corporations are the worst among global peers, having deteriorated from being the best in 2009, according to a corporate financial risk trend measure used by Standard & Poor’s….”

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Welcome to FOMC Week

“It’s FOMC week.

On Wednesday, the Fed will give its next policy update. Its widely expected to continuing its “tapering” of monthly asset purchases by $10 billion, which is the pace that it’s been going on.

The best preview is from economist Tim Duy, whose post you should read here.

But we wanted to pull out two of Tim’s charts, because they’re particularly important.

The first shows the trajectory of the unemployment rate vs. what economists estimate as the “natural” rate of unemployment, if the economy were operating at full capacity.




The next chart shows inflation against the Fed’s stated goals…..”

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Black Gold Expected to Top $116 or More on Iraq Tensions, Au Rises as Well

“Brent Crude was projected by Wall Street analysts to average as much as $116 a barrel by the end of the year. Now, with violence escalating in Iraq, how far the price will rise has become anyone’s guess.

The international benchmark surged above $114 on June 13 for the first time in nine months as militants routed the Iraqi army in the north and advanced toward Baghdad, threatening to ignite a civil war. The Islamic State in Iraq and the Levant, known as ISIL, has halted repairs to the pipeline from the Kirkuk oil field to the Mediterranean port of Ceyhan in Turkey.

The conflict threatens output in OPEC’s second-biggest crude producer. The Persian Gulf country is forecast to provide 60 percent of the group’s growth for the rest of this decade, the International Energy Agency said June 13. Global consumption will “increase sharply” in the last quarter of this year and OPEC will need to pump more oil to help meet the demand, according to forecasts from the Paris-based IEA.

“We’ve been waiting for the other shoe to drop in this tightly balanced market and now it’s happened,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said June 13 by phone. “There have been lurking risks but nobody was projecting how quickly things would turn worse.”

Photographer: Dan Kitwood/Getty Images

Families arrive at a Kurdish checkpoint next to a temporary displacement camp in Kalak,… Read More

Rising Prices

Brent for August settlement rose as much as 82 cents, or 0.7 percent, to $113.28 a barrel on the London-based ICE Futures Europe exchange today.

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Gold on the Rise

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Sandy Hook Redux: Obama Officials Confirm That it Was a Drill and No Children Died

” “I have a lot of sources in regards to as to what’s going on with the president and the administration and so on, and every one of my sources said it was a false flag”--Paul Preston

Paul Preston

Paul Preston

Sofia Smallstorm, who produced and directed the documentary, “Unraveling Sandy Hook”, which many regard as the best video study of the Sandy Hook event, recently interviewed a Los Angeles school expert, Paul Preston, about Sandy Hook and his knowledge of what had transpired.

Governor Malloy had held a press conference that day, explaining that he and the Lt. Governor had been “spoken to” that something like this might happen, which raised the question, what “something like this” did he mean? Had he been told a school shooting massacre would take place? or a drill that would be presented as a real event, which appears to be what took place?

Remarkably, we now have confirmation from an unexpected source. Paul Preston had obtained information from officials in the U.S. Department of Education of the Barack Obama administration, who confirmed to him on the basis of their own personal knowledge that:

(1) it had been a drill;

(2) no children had been killed; and,

(3) it had been done to promote an anti-gun agenda.

Given his background of 41 years in the California public school system (from custodian to district superintendent) and having served as a teacher, coach, vice-principal and principal before retiring in 2012 as the superintendent of two charter schools, I thought what he had to say about Sandy Hook deserved widespread dissemination.

So when did a two-hour show on Revolution Radio, “False Flags (9/11, Sandy Hook and the Boston bombing)” on 30 May 2014, as the third segment, I included the second 30-minutes of Sofia’s interview with Paul Preston, which is archived on “The Real Deal” and can be heard here…”

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With Money Being So Cheap and Easy We Find $29.1Trillion in Market Investments, Held By….

“Another conspiracy “theory” becomes conspiracy “fact” as The FT reports a cluster of central banking investors has become major players on world equity markets.” The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which “could potentially contribute to overheated asset prices.” China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, according to officials, and we suspect the Fed is close behind (courtesy of more levered positions at Citadel), as the world’s banks try to diversify themselves and “counters the monopoly power of the dollar.” Which leaves us wondering where are the central bank 13Fs?

While most have assumed that this is likely, the recent exuberance in stocks….”

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Pope Francis Warns the Sham Economy is Near Collapse

“The global economic system is near collapse, according to Pope Francis.

An economy built on money-worship and war and scarred by yawning inequality andyouth unemployment cannot survive, the 77-year-old Roman Catholic leader suggested in a newly published interview.

“We are excluding an entire generation to sustain a system that is not good,” he toldLa Vanguardia’s Vatican reporter, Henrique Cymerman. (Read an English translation here.) “Our global economic system can’t take any more.”

The pontiff said he was especially concerned about youth unemployment, which hit 13.1 percent last year, according to a report by the International Labor Organization.

“The rate of unemployment is very worrisome to me, which in some countries is over 50 percent,” he said. “Someone told me that 75 million young Europeans under 25 years of age are unemployed. That is an atrocity.”

That 75 million is actually the total for the whole world, according to the ILO, but that is still too much youth unemployment.

Pope Francis denounced the influence of war and the military on the global economy in particular:

“We discard a whole generation to maintain an economic system that no longer endures, a system that to survive has to make war, as the big empires have always done,” he said….”

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Asset Forfeiture Coming to a Bank Near You

“Do you have a bank account that you don’t actively use or a safe deposit box that you have not checked on for a while?  If so, you might want to see if the government has grabbed your money.  This sounds absolutely crazy, but it is true.  All over the world, governments are shortening the time periods required before they can seize “dormant bank accounts” and “unclaimed property”.

For example, as you will read about below, just last year the government of Australia seized a whopping 360 million dollars from dormant bank accounts.  And this kind of thing is going on all over America as well.

In fact, all 50 states actually pay private contractors to locate bank accounts and unclaimed property that can be seized.  In some states, no effort will be made to contact you when your property is confiscated.  And in most states, the seized property permanently become the property of the state government after a certain waiting period has elapsed.  So please don’t put money or property into a bank somewhere and just let it sit there.  If you do, the government may come along and grab it right out from under your nose.

In this day and age, broke governments all over the globe are searching for “creative ways” to raise revenues…..”

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Cramer: Ring the Register as ‘Something Unexpected May be Imminent’

“Cramer has expressed concerns about the market for a while. He’s advocated watching developments as well as price action very closely. But now, he says, if you haven’t already, it’s time to act.

“If you have big profits, ring the register,” Cramer said. “If you’re already in cash, sit tight.”

Largely the “Mad Money” host is very worried about sudden developments out of Iraq, with militants seizing control of major cities, some of which are in important oil producing regions.

President Obama said on Thursday that he was watching the rapid developments with “a lot of concern,” and that the United States stood ready to provide increased help to the Iraqi government, though he did not specify what kind.

“So what will it be? Airstrikes? Drones? Soldiers? Boots back on the ground in Iraq? That’s uncertainty writ large. And if the market hates anything it’s uncertainty,” said Jim Cramer.

These developments change the game….”

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BoE Warns Rate Hikes May Come Sooner Than Expected

“Yesterday, the head of the Bank of England did something very funny: Right as the World Cup was kicking off, he issued the warning that people have been waiting for for years. He said that rate hikes might come sooner than expected.

Of course, like any good central banker, Mark Carney talked about how no decisions have been made and how everything is “data dependent” but the language he use definitely caught people by surprise.

In a note to clients last night, Citi FX guru Steven Englander explained why investors might extrapolate Carney’s comments to the US as well. Basically, just a month ago, Carney was sticking to dovish language (like his counterparts in the US). Then the UK got another month of strong economic data (like the US). And in the past, the BOE has been ahead of the curve in terms of policy, with the US close behind. So you can’t blame investors who now might worry similar language could come from the Fed at a moment’s notice.

Here’s Englander’s take:

[It is] possible that the shift in the BoE stance may also be affecting how investors are viewing the likely evolution of Fed monetary policy. The worry may be that just as UK forward guidance proved to be less guiding than investors had earlier thought, the Fed may turn around, and use the same language….”

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MKUltra & Public Opinion

[youtube://http://www.youtube.com/watch?v=RYnp2mkFNlE#t=267 450 300]

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The Answer to Mass Shootings Exposed and Why Our Guns Should Remain in the Hands of the People


“Fear is the Parent of Cruelty” ~ James Anthony Froude

“….When people perceive that they are prevented from receiving just rewards their frustration is likely to turn to agression.

A 1941 study where toys were placed, but children could not touch them resulted in destructive and agressive behaviors when they were finally allowed to play with the toys.

In the hands of polticians and demagogues, frustration agression can be a potent  way of placing  displaced agression onto scapegoats…” From the Documentary Human Resources

So all these school shootings and displaced agression is a direct result of how our society is run and the world we live in. Marketing contributes to the frustration of not being able to obtain objects of materialism. Many people work hard all their lives and have nothing to show for it. Thus there is subconscious frustration building within all of us.

The  Santa Barbara shooter Elliot Rodger displays in his manifesto exactly what theorists and experiments show to be the case. He was completely frustrated with not being able to have relationships with women.

Jerad and Amanda Miller who recently went on their Las Vegas Rampage on the surface show frustraion about the world we live in by stating in their social media outlets that too much money is being spent on useless things like war, banksters, etc. instead of feeding, housing, and creating jobs for people who could improve thier lives.

I’ll bet if you look into any mass shooting case we will find aspects of the Frustration Agression Hypothesis.

So i say again do not take away the guns of the people, but change the root causes that make some people crack and go off on a rampage. Solve the problem of over medicating our kids with dangerous psychotropic drugs.



“Frustration–aggression hypothesis is a theory of aggression proposed by John Dollard, Neal E. Miller et al. in 1939,[1] and further developed by Miller, Roger Barker et al. in 1941[2] and Leonard Berkowitz in 1969.[3] The theory says that aggression is the result of blocking, or frustrating, a person’s efforts to attain a goal.[4] 

The frustration–aggression hypothesis, otherwise known as the frustration–aggression–displacement theory, attempts to explain why people scapegoat.[5] It attempts to give an explanation as to the cause of violence.[6] The theory, developed by John Dollard and colleagues, says that frustration causes aggression, but when the source of the frustration cannot be challenged, the aggression gets displaced onto an innocent target.

There are many examples of this. If a man is disrespected and humiliated at his work, but cannot respond to this for fear of losing his job, he may go home and take his anger and frustration out on his family. This theory is also used to explain riots and revolutions. Both are caused by poorer and more deprived sections of society who may express their bottled up frustration and anger through violence.[6]

According to Yale Group, frustration is the “condition which exists when a goal-response suffers interference,” while aggression is defined as “an act whose goal-response is injury to an organism (or organism surrogate).” However, aggression is not always the response to frustration. Rather a substitute response is displayed when aggressive response is not the strongest on the hierarchy. Furthermore, this theory raises the question if aggression is innate.[7]

However, this theory has some problems.  First, there is little empirical support for it, even though researchers have studied it for more than sixty years.[5]  Another issue is that this theory suggests frustrated, prejudiced individuals should act more aggressively towards outgroups they are prejudiced against, but studies have shown that they are more aggressive towards everyone.[5] The theory also has limitations, for example it cannot say why some outgroups are chosen to be scapegoats and why others are not.


Full Definition and Theory

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On the Matter of Iraq, Black Gold, and the Markets

“NEW YORK (MarketWatch) — Oil futures are surging as al-Qaeda-affiliated militants continue to sweep across northern Iraq. Financial markets are taking the news largely in stride but investors should be on alert. Here’s a rundown of what it all could mean:

What is happening?

Iraq is on the brink of civil war after Kurdish forces took control of Kirkuk, a provincial capital city and oil-production hub in northern Iraq.

The move by Kurdish forces comes after Sunni militants took nearby Mosul, Iraq’s second-largest city, earlier this week. They’ve threatened Baghdad and have vowed to march on two cities held sacred by Shiite Muslims. Western parts of Kirkuk province are reportedly still under the control of other militants from an al Qaeda offshoot called the Islamic State of Iraq and Al-Sham, or ISIS. The militants have vowed to advance on Karbala and Najaf, two cities revered by Shiite Muslims, who make up 60% of Iraq’s population and dominate the Iraqi government.

Why is Iraq important?

Iraq is the world’s eighth-largest producer of oil and ranks No. 2 in the Organization of the Petroleum Exporting Countries, or OPEC, behind Saudi Arabia. Production has been on the comeback trail since the height of the Iraq war. Production hit 3.6 million barrels a day in February, its highest level in more than 30 years. Production has since fallen back, slipping to 3.3 million barrels a day in May, analysts say.

Iraq’s production growth has been a welcome development for oil consumers as Libya struggles to come back online amid persistent violence and turmoil. But the fighting casts big doubts over the government’s aim to boost output to 4 million barrels a day by the end of this year and to 7 million barrels a day by 2016, note economists at Capital Economics.

A sustained surge in oil prices would be unwelcome as the global economy struggles to build some momentum.

“Although the situation is some distance from the oil fields, the reality is that a $20 a barrel spike in crude prices could well prove sufficient to derail the global economic recovery. Ultimately with markets so toppy and repeatedly looking for a reason to sell, this could all make a lot of sense,” said Joao Monteiro, an analyst at Valutrades in London.

What’s the threat?

The underlying fear in the oil market is that the fighting will spread to Iraq’s main oil-producing areas in the south. Meanwhile, Iraq’s biggest refinery at Baijii in the north remains under government control , Iraqi oil minister Abdul Kareem Luaibi said Thursday, according to Reuters. Luaibi said Iraqi crude exports from its southern terminal at Basra were running at an average of 2.6 million to 2.7 million barrels a day on Wednesday.

Capital Economics

What does it mean for oil markets?….”

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Trannies Start to Tumble on Higher Volume, Looking More Like the Recent Tech and Bio Tech Selloff

Volume is well above average pro rata as US equity markets are stumbling notably this morning. Was retail sales’ miss the final straw that broke the hope back? Or was it China’s CNY vol, failed auction, warehouse probe, or Japan’s dismal data and misery, or Iraq’s reignition, or Ukraine, or Q1 GDP downgrades, or earnings outlook downward revisions, or flows? Since Mario Draghi promised the world and made everyone believe that’s what he gave them, US equity markets have rolled over hard today and Dow Transports are now notably in the red….”

Full article and charts

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Food Matters

[youtube://http://www.youtube.com/watch?v=mKTORFmMycQ 450 300] [youtube://http://www.youtube.com/watch?v=RQkQXyiynYs 450 300]

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