Russian Oligarchs Wave Goodbye To Visa, Switch To Chinese Credit Card

So much for the “Russia is becoming increasingly isolated” meme that the West would like many to believe. As Russia continues to sign de-dollarization deals and trade agreements with its BRICS allies while pushing ahead with retaliatory actions against the US and Europe, it appears the ‘sanctioned’ friends of Putin are taking matters into their own hands. Billionaire oligarch Gennady Timchenko, among the first to be hit by travel bans and asset freezes by the US, has decided to tear up his Visa and Mastercard, shifting all his credit cards to China’s UnionPay, noting that “in some ways it is more secure than Visa – at least the Americans can’t reach it.”

 

The Western meme goes something like this…

Russia risks becoming a pariah state if it does not behave properly,” U.K. Foreign Secretary Philip Hammond said on Sky news this week.

However, after various deals with BRICS and Middle East nations, it appears Russia can find plenty of ‘friends’.

And now the sanctioned oligarchs and de-dollarizing… (via ITAR-TASS Google Translate)

Russian businessman Gennady Timchenko, because of the U.S. sanctions imposed against him in March 2014 after the annexation of the Crimea to the Russian Federation, has replaced by Visa and MasterCard for card payment system China Union Pay and wallet with cash.

 

Timchenko March 20 was included in the U.S. Treasury list of persons with whom the U.S. companies and citizens have the right to maintain the business relationship, including U.S. registered Visa and MasterCard.

 

Businessman said that stopped using these cards payment systems. “We’ll have to, as before, to carry a purse with cash,” – complained Timchenko, adding that also enjoys card Chinese Union Pay.

 

“As the sanctions imposed, it immediately issued,” – he said. “Excellent work! And accept card in many places. In some ways more secure than Visa. At least Americans will not reach” – said Timchenko.

 

Inclusion of a businessman in the U.S. sanctions list created trouble for the payments and for his wife. “Wife Gennady Timchenko had the surgery and could not even pay for it, because it was blocked accounts and cards,” – said Russian President Vladimir Putin on April 17 during his “straight line”, describing the incident as a violation of human rights.

 

Putin learned about this case, held after the announcement of sanctions meeting of the Russian Geographical Society, co-trustee of which is Timchenko. “Vladimir Putin asked how we feel ourselves to new realities. I said, well, all right, but there are nuances. And he told the story that President then mentioned,” – said the businessman.

*  *  *
While Obama hopes that pressure on the oligarchs will creat some civil strife for Putin, we worry that it will merely corner him into survival mode with signioficant repurcussions for the west.




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Suddenly, Wall Street Is Bailing On Housing

Among this week's most notable moves was the decompression of high-yield credit spreads to near 9 month wides (and continued outflows). What went notably-under-reported by the mainstream media, however, was an even bigger selloff in US mortgage bonds. While JPMorgan is unable to see "any fundamental reason" for the plunge in prices, the worrying indication from the magnitude of the drop relative to volumes is that liquidity has evaporated. As Bloomberg notes, with dealer inventories sold down (due to new regulations that make repo and agency securities unpalatable), they have no way to 'smooth' the selling when investors want to exit positions. Weakness of this magnitude when the 10Y gained only 2bps on the week is a big wake-up call that traders are looking for the exits from housing debt and the door is very narrow.

Bloomberg warns, prices of a new type of U.S. mortgage bonds are plunging this month, teaching investors a lesson on the risks to markets wrought by the growing constraints on Wall Street banks.

*  *  *

Here's why…

Thanks to the Fed, turnover and volume in Agencies has been crushed…

 

as turnover in most markets depends on repo (remember how important we explained repo was?)

 

because Fed/regulators have made agency/repo uneconomic…

 

Bloomberg explains,

Dealers have reduced their bond holdings in response to rules ranging from the international Basel III accord on banks’ capital to the U.S. Volcker Rule limiting their ability to make bets with their own money. An expansion of Finra’s Trace trade disclosures to more types of debt is also increasing risks and cutting into profits for market makers.

 

Inventories of corporate securities and other debt without government backing at the biggest dealers fell to $56 billion in March 2013 from as much as $235 billion in 2007, according to the last Federal Reserve data before a change in calculations.

and so dealers have dramatically reduced inventory to cope with market movements…

 

Bloomberg adds,

As a few holders continued selling the Fannie Mae and Freddie Mac securities without an immediate emergence of investor demand, most of the dealers active in trading the debt “disappeared,” said Vishal Khanduja, a money manager at Bethesda, Maryland-based Calvert, which oversees about $13 billion.

 

Until recently, “everybody wanted to trade it: I think there were 10 to 12 dealers messaging me and looking to make markets,” Khanduja said in a telephone interview. “It’s partially indicative of the regulations’ impact on their balance sheets.”

None of this matters all the time the virtuous circle continues of billions in Fed money driving down spreads/rates across the board… but when investors get itchy fingers and decide to sell, this happens…

 

As Bloomberg reports,

the $8.2 billion of risk-sharing securities sold in the last year by government-controlled Fannie Mae and Freddie Mac can shift their losses from homeowner defaults to bond buyers. One slice of a deal issued in May traded at 95.7 cents on the dollar yesterday, down from 99.7 cents at the end of last month, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

A plunge like this in one specific mortgage bond as small doors and large crowds do not play well with one another.

*  *  *

As Bloomberg adds,

“It could be symbolic of what could happen more broadly in a real ‘risk-off’ environment,” Bill Murray, a New York-based money manager at $14 billion hedge-fund firm CQS, said in an interview.

There is little that the dealers can do if the selling continues on Monday as 'any' credit risk positions are unwound. The problem is that the Fed's dominance of the market and unintended consequences of controlling the repo/shadow-banking system have left bond markets more fragile than they have ever been.

 

Charts: FINRA and Citi's Matt King




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Internationalists Are Pushing The World Towards Globally Engineered Economic Warfare

Submitted by Brandon Smith via Alt-Market.com,

Over a year ago I published an essay entitled 'The Linchpin Lie: How Global Collapse Will Be Sold To The Masses'. This essay addressed efforts by the ever malicious Rand Corporation to create a false narrative surrounding the possibility of global collapse. Linchpin Theory, as it was named by it's originator and Rand Corp. employee, John Casti, is I believe the very future of propaganda. Every engineered crisis needs a clever cover story, and in Linchpin Theory, we are told that all human catastrophe is a mere natural product of the “overcomplexity” within various systems. Yes, there is no accounting of false flag geopolitics or elitist conspiracy, no acknowledgment of deliberately initiated chaos; such things do not exist in the world of “linchpins”. Rather, the Rand Corporation would have us believe that the world is a massive game of Jenga, and the supporting pieces just remove themselves from the teetering structure by magical and coincidental causality.

Today, the linchpin lie is now being carefully inserted into the mainstream narrative. I can't say I was shocked to hear Alan Greenspan use its basic premise when he recently stated that:

I have come to the conclusion that bubbles…are a function of human nature. We don’t have enough observations, but my tentative hypothesis to what we’re dealing with is that both a necessary and sufficient condition for the emergence of a bubble is a protracted period of stable economic activity at low inflation. So it is a very difficult policy problem. I do believe that central banks that believe they can quell bubbles are living in a state of unrealism.”

It is important that we understand what Greenspan is actually doing here. The former Fed chairman is asserting that economic bubbles like the derivatives bubble of 2008 are a “natural function”, like the seasons, and are out of the control of central bankers. The truth is that central bankers have never tried to “quell” economic bubbles, they have been deliberately creating them in order to position the global economy into a crisis which they can then exploit. Greenspan is not only diverting blame for all the past and future economic crashes central banks have engineered, he is also setting the propaganda stage for a great change in the dynamic of the central banking concept – what the IMF's Christine Lagarde calls the “global economic reset”.

The current central banking structure gives the illusion of separation and sovereignty. Most people who have not researched the nature of the international banking cartel believe that the Federal Reserve, for instance, is a separate national entity from the Central Bank of Russia, or the Central Bank of China. They believe that these institutions act of their own accord rather than in concert with each other. The reality is, there is no Federal Reserve. There is no Central Bank of Russia. There are no separate entities. There are no Western banks and there are no BRICS. All of these banking edifices are merely front organizations for global financiers, as Council on Foreign Relations insider (and friend to the Rockefellers) Carroll Quigley made clear in his book, Tragedy And Hope:

"It must not be felt that the heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up, and who were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks. "

A “global economic reset”, I suspect, will consist of a grand shift away from covert cooperation between central banks to an OPENLY centralized one world banking system, predicated on the concepts put forward by the IMF and led by the Bank of International Settlements, which has always been behind the scenes handing down commandments to the seemingly separate central banks of nations.

In order for this “reset” to be achieved, however, the establishment needs a historically monumental distraction. A distraction so confounding and terrifying that by the time the public has a chance to examine the situation rationally, the elites have already tightened the noose.

I have been warning ever since the beginning of the derivatives/debt collapse of 2007/2008 that the international financiers and globalists who created the artificially low interest rates and fiat lending bonanza would one day be required to fashion a considerably dangerous event in order to trigger the final collapse of the dollar based monetary system and replace it with a new currency (or basket of currencies), along with a new centralized financial authority.

This distracting event would have to rely on three very important strategies in order to succeed –

1) The use of what I call the “scattershot effect”; a swarm of smaller crises growing exponentially until it blurs together to create one dynamic calamity.

2) The use of multiple false paradigms in order to confuse the masses and pit them against one another in an absurd fight over fake and meaningless causes.

3) The use of deceptive benevolence on the part of the financial elite as they tap dance in to act as global “mediators”, ready to save the public from itself.

The end result would be a new brand of “world war” rather unique to history.

When most people imagine WWIII, they immediately envision images of nuclear bombs and mushroom clouds, however, I believe that when world war erupts, it may progress far differently from our cinematic assumptions. Regional conflicts are very likely, there is no doubt, but if one places himself in the shoes of the elites, one realizes that all out mechanized nuclear Armageddon is not really necessary to achieve the desired result of global governance.

Economic warfare alone could be extremely effective in initiating full spectrum fiscal implosion as well as mass starvation, mass panic, and mass desperation. All the signs lead me to believe that financial combat and 4th generation warfare will be used in the place of large armies and missiles.

The Scattershot Effect

Consider the sheer scope and number of crisis situations that have reached explosive proportions just in the past six months.

Syria continues to destabilize due to ISIS insurgents supported by the U.S., Saudi Arabia, and Israel; it is a horrifying storm which is now bleeding into other nations such as Iraq.

Iraq is on the verge of complete disintegration as the same western organized ISIS moves towards the outskirts of Baghdad.

Libya has imploded, with the American embassy evacuated, as well as the French and British, as various militias battle for supremacy.

The Ukraine crisis is nearing mutation into another beast entirely after the attack on Malaysian flight MH17. In just the past week, the EU has instituted sanctions against Russia, fighting has become even more fierce around Donetsk, Russia has been accused of firing artillery into Ukraine, and the U.S. now claims that Russia has violated the terms of the Intermediate Range Nuclear Forces treaty.

In the meantime, the Federal Reserve continues to taper QE3 while ignoring the unprecedented equities bubble they have birthed in the stock market, as well as refusing to answer the question as to who will actually buy U.S. Treasury debt if they do not? Our secret friend from Belgium? And what if this secret friend is, as I suspect, actually the IMF/BIS global loan shark duo? What then? Do we become yet another third world African-style debtor owing our very infrastructure to a financial bureaucracy on the other side of the world?

And what about the Baltic Dry Index, one of the few measures of global shipping demand that cannot be manipulated by outside money interests? Well, the BDI is back down to historic lows, falling 65% since January, signaling that the so-called “economic recovery” is not at all what it is cracked up to be.

Add to this the deluge of illegal immigration on the southern border, aided by the Obama Administration, as well as possible presidential impeachment and lawsuit proceedings, and you have a recipe for total chaos of the fiscal variety.

If the first six to seven months of 2014 have been this frenetic, how bad will the next six months be?

False Paradigms

We are all aware of the prevalence of the false Left/Right paradigm in American politics. Hopefully most people in the Liberty Movement understand, for example, that any impeachment or lawsuit proceedings against Barack Obama will be nothing more than a crafted circus designed to accomplish nothing – a con game to placate conservatives with useless top-down solutions while the country burns around their ears.

There are other false paradigms that are not so clear to some, though…

The false Israel/Hamas paradigm has certainly duped a particular subsection of Americans and even a few patriots, even though it is historical fact that the creation of Hamas itself was funded and supported by the Israeli government. Why do Israeli politicians put money and arms at the disposal of Muslim extremist groups like Hamas and ISIS, only to enter into brutal conflict with them later? Could it be that the Israeli government does not have the best interests of the Israeli people at heart? Could it be that Israel is being used by internationalists as a catalyst for chaos? It is vital that we question the intentions behind such contrary actions in the Middle East.

Why has the U.S. government (Democrats and Republicans), Saudi Arabia, and Israel put support behind the ISIS caliphate in Iraq after spending decades of time, billions in resources, and thousands of lives, attempting to overrun and dominate the region? Why are these governments creating enemies that will later try to harm us?

It is all about false paradigms; dividing the masses into numerous conflicting sides and pitting them against each other when they should be fighting against the elites.

The false East/West paradigm is perhaps the most dangerous lie facing free men today. It is a lie that may very well define our generation if not our century. I have outlined in multiple articles the substantial evidence that proves beyond a doubt that Russia and China are members of the globalist agenda, and that the tensions between our two hemispheres are completely fabricated.

The latest announcement of a BRICS bank to rival the IMF is yet another scheme to perpetuate the illusion that the elites of these nations are at odds. In fact, the BRICS conference mission statement makes it clear that developing nations have no intention of breaking from the IMF (and certainly not the BIS). Instead, the BRICS bank is meant to provide “leverage” to “force” the IMF to become more inclusive, and hand over more power and participation. Vladimir Putin had this to say at the latest summit:

In the BRICS case we see a whole set of coinciding strategic interests. First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank's decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this.”

Brazilian President Dilma Rousseff insisted that the BRICS were not seeking to distance themselves from the Washington-based International Monetary Fund:

"On the contrary, we wish to democratize it and make it as representative as possible…"

Putin and the BRICS commonly rail against the “unipolar” financial system revolving around the U.S. dollar, but in the end they are only controlled opposition, and their solution is to place even more power into the hands of the IMF (a supposedly U.S. government controlled institution), creating a truly unipolar world order.  If the U.S. loses its IMF veto status this year due to lack of allocated funds, and the BRICS dump the dollar as world reserve, this may very well happen.

As sanctions between Russia and the U.S. snowball, a perfect rationalization for a dollar decoupling will be created that very few people would have believed possible only a few years ago.  It is only a matter of time before fiscal warfare escalates to destructive levels. Russia will inevitably cut off gas exports to the EU, and the BRICS will inevitably drop the U.S. dollar as a world reserve standard.

The U.S. relationship to the EU is also currently being presented as dubious, and this is not by accident. Failing relations between America and Germany are yet more theater for the masses to chew on. Western allies have been spying on each other for decades, but somehow the exposure of CIA activities in Germany is shocking news? The NY Fed suddenly attacks Deutsche Bank, seeking expanded monitoring and regulation? Germany's business interests are highly damaged by U.S. sanctions against Russia? It would seem as though someone is trying to create an artificial divide between elements of the EU and the U.S.

I believe that the narrative is being prepared for a faked financial breakup between the U.S. and many of its former allies, isolating the U.S., and destroying the dollar, but to what end? To answer that question, we must ask WHO ultimately benefits from these actions?

The Rise Of The Hero Bankers

In June of last year, the Bank of International Settlements, the central bank of central banks whose history began with the financial support of the Third Reich, released a statement warning that “easy money” from central banks was creating a dangerous bubble in stock markets around the world.

The IMF too has been pushing warnings of stock bubble collapse into the mainstream.

In June of this year, the BIS, a normally obscure and secretive organization, released another statement pronouncing that government had been led into a “false sense of security” by easy monetary policy and low interest rates, making the world economy perpetually unstable.

For an organization so covert and occult, the BIS sure has become rather candid lately. Frankly, I agree with everything they have said. However, I do not agree with the hypocrisy of the BIS, which dominates the decisions of all of its member banks, publicly criticizing policies which it most likely scripted itself. Why would the BIS suddenly denounce fiscal methods it used to promote? Because the BIS is setting itself up as the great prognosticator of a collapse that IT HELPED ENGINEER.

After the great financial war has subsided, and the people are suitably poverty stricken and desperate, it will be institutions like the BIS and IMF that swoop in to “save the day”. Their offer will be to consolidate economic control into the hands of an elite group of bankers “not affiliated” with any particular nation state, thereby insulating them from "political concerns". The argument will be that national sovereignty is a bane on the back of humanity. They will claim that the catastrophe will continue until we “simplify” and streamline our economic and political systems. They will present themselves as the heroes of the age; the ones who predicted the crisis would occur, and the ones who had a solution ready to save the day (after sufficient death and destruction, of course).

As long as people remain obsessed with false paradigms and faux enemies, the establishment's goal of complete centralized dominance will be predictably attainable. If we change our focus to the internationalists as the true danger instead of playing their game by their rules, then things will become far more interesting…




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Robby Soave Talking Police Reform, Amash, Education, and More on the Tyler Nixon Show

I will be on the Tyler Nixon Show on WGMD 92.7 this Saturday at
12:10 p.m. ET. We will discuss a bunch of different
topics
near and dear to the hearts of Reason readers including
police brutality, education reform, and the Justin Amash
Congressional race.

Reason’s Nick Gillespie was on the show last month. You can
listen to that episode here.

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The Illustrated Guide To 20 Years Of Latin American Debt Crises

As the Argentina farce rolls on, it is worth noting that this is nothing new. As Bloomberg Briefs shows below, Latin American nations have been serial defaulters for the last 20 years.

Click image for large legible version

 

Source: Bloomberg Briefs




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Guest Post: The EU's Anti-Austerity Hypocrites

Authored by Steve Hanke of The Johns Hopkins University in Baltimore,

The European Union (EU) is still in the midst of an economic slump. Many members of the political class in Brussels claim that fiscal austerity is to blame. But, this diagnosis is wrong.

The EU’s problem is one of monetary, not fiscal, austerity. Money matters. Just look at the accompanying chart. Private credit in the Eurozone has been shrinking since March 2012.

Never mind. The EU fiscal austerity bandwagon keeps rolling on with Matteo Renzi, Italian Prime Minister and current President of the EU, holding the reigns. Indeed, Renzi recently went so far as to form an anti-austerity coalition with France and Spain. According to the coalition, its members simply cannot impose further spending cuts. They assert that their budgets have been cut to the bone. This claim is ludicrous.

There is nothing to cut in Italy? Get real. Senior civil servants are being paid over 12 times the national average salary. As for France and Spain, their civil servants are “well paid,” too. It’s time for the public to stop listening to the EU’s anti-austerity hypocrites and start looking at the numbers.




via Zero Hedge http://ift.tt/1sbaVnU Tyler Durden

Guest Post: The EU’s Anti-Austerity Hypocrites

Authored by Steve Hanke of The Johns Hopkins University in Baltimore,

The European Union (EU) is still in the midst of an economic slump. Many members of the political class in Brussels claim that fiscal austerity is to blame. But, this diagnosis is wrong.

The EU’s problem is one of monetary, not fiscal, austerity. Money matters. Just look at the accompanying chart. Private credit in the Eurozone has been shrinking since March 2012.

Never mind. The EU fiscal austerity bandwagon keeps rolling on with Matteo Renzi, Italian Prime Minister and current President of the EU, holding the reigns. Indeed, Renzi recently went so far as to form an anti-austerity coalition with France and Spain. According to the coalition, its members simply cannot impose further spending cuts. They assert that their budgets have been cut to the bone. This claim is ludicrous.

There is nothing to cut in Italy? Get real. Senior civil servants are being paid over 12 times the national average salary. As for France and Spain, their civil servants are “well paid,” too. It’s time for the public to stop listening to the EU’s anti-austerity hypocrites and start looking at the numbers.




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Turkey Shuns US (Again); Loads 5th Tanker Of $100 Million Iraqi-Kurdish Oil

Having publicly shunned President Obama, it appears Turkish Prime Minister Erdogan has no problem upsetting the status quo. As Reuters reports, the fifth cargo of crude oil from Iraqi Kurdistan was loading at Turkey’s Mediterranean port of Ceyhan on Thursday and was scheduled to set sail on Friday, Turkish energy officials said. Baghdad is unhappy – missing out on the oil revenues. We are sure US is unhappy – oil being sold out of its control. And OPEC may be getting upset as it appears an ‘anonymous’ buyer is more than willing to buy the oil from the ‘not sovereign status’ seller militia at a healthy discount. De-petrodollarization?

 

As Reuters reports,

The cargo was the first loading of Iraqi Kurdish oil from Ceyhan in over a month, as the central government in Baghdad, locked in a bitter dispute with the Kurds over oil exports, moved to block the unloading of Kurdish oil-laden vessels in foreign ports.

 

The Suezmax tanker Kamari arrived at the port late on Wednesday, a shipping source said. It will be carrying one million barrels of crude oil.

 

“Initially there was no programme for loading today. Then we received a tanker and started to load swiftly,” one Turkish official said, adding that he had no knowledge of the buyer.

 

So far, most of the buyers of Kurdish oil remain annonymous while as the intensifying legal and political struggle with Baghdad could deter potential buyers, analysts say.

 

Arguing all oil sales outside its control are illegal, Baghdad this week tried to get a Texas court to seize 1 million barrels of oil aboard the United Kalavrvta tanker, which has been anchored off the port of Galveston since the weekend.

 

But after a U.S. judge on Tuesday said she lacked jurisdiction given the ship’s distance from the shore, the Kurdistan Regional Government (KRG) hit back at Baghdad, filing a letter with the Texas court arguing its sales are allowed under the Iraqi constitution.

 

Arbil has begun selling its oil via a new pipeline through Turkey in May, but so far has only successfully sold and delivered one tanker filled with oil from the line.

 

Unable to export its oil on a routine basis, Iraqi Kurdistan was forced to halt pumping in its oil pipeline via Turkey, as the storage tanks at Ceyhan have been backed up and at capacity.

 

Baghdad has cut the KRG’s budget since the start of the year over the oil sales dispute, heaping pressure on the semi-autonomous enclave of 5 million that has enjoyed relative stability since the 2003 U.S.-led invasion.

*  *  *

Just add it to the list of geopolitical hot spots… we smell sanctions (on a NATO ally?)




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