Author: admin

As we reported one week ago, the latest Treasury International Capital report revealed something disturbing: not only had foreign central banks sold a record amount of US Treasurys in the past 12 months, some $346 billion worth…

 

… but America’s largest foreign creditor, China, sold a record $34 billion in US paper in the latest month, and bringing its total holdings to the lowest since 2012.

 

This led to an obvious question: is China dumping all of its foreign reserve holdings proportionately, or is Beijing strategically offloading its US paper, for financial, political reasons or otherwise, as it buys other foreign government bonds. The answer, at least according to the Nikkei, is the latter.

As the Japanese owner of the Financial Times reports, China is on a shopping spree, and has been “gobbling” up Japanese government bonds, adding that Beijing bought close to a net 9 trillion yen ($86.6 billion) worth of JGBs in the January-August period, more than tripling the amount from the same period last year. Incidentally that’s almost equivalent to the number of US Treasurys sold by China.

A simple explanation for the shift is that the People’s Bank of China has been reducing its holdings of U.S. Treasurys in anticipation of higher U.S. interest rates and shifting some of its money to JGBs, where higher rates – courtesy of 250% in debt/GDP – are largely guaranteed to never arrive. 

But more importantly, and this could explain the perplexing recent strength in the Yuan, this trend may be a reason behind the yen’s appreciation in foreign exchange markets in recent months.

According to Japan’s Ministry of Finance, China invested 8.9 trillion yen in Japanese securities in net terms between January and August. Buying started to exceed selling more often on a monthly basis in the second half of 2015. In April, net buying surpassed 3 trillion yen. Curiously, China is not buying the Japanese bonds for the “yield”, but rather for liquidity: most of the securities purchased by the PBOC are bonds with maturities of one year or less.

Judging by the latest TIC data, China’s selling of US paper is accelerating, which also suggests that just as China has been a factor pushing the Yuan higher, the dollar has been pressured lower by the ongoing Chinese liquidation. One wonders how much higher the USD will jump if and when China decides to halt its selling of US paper, and how much lower the Yuan will then tumble in response, leading to even faster capital outflows from China.

via http://ift.tt/2f6huvm Tyler Durden

Submitted by Federico Pieraccini via Strategic-Culture.org,

The most important event of the past 70 years is the change in the international order, from a US unipolar domination to a new multipolar reality. The fundamental question lies in understanding how this transition is taking place, its consequences and root causes

The transition in the international order, from a pre-WWI multipolar world to a post-WWII bipolar world, cost humanity a world war involving millions of deaths. The next stage, distinct from the conflicts between the USSR and the US, ended with the fall of the Berlin Wall in 1989, but without the tragedy of direct confrontation. This fundamental historical difference has its own intrinsic logic governing the relationship of forces between powers. The USSR was a country in decline, unable to continue its role on the international stage as the premier anti-hegemonic power.

The transition from a bipolar to a unipolar reality could have had nuclear consequences, but an agreement between the powers avoided this danger. The upshot was an unconditional surrender of the USSR, with catastrophic consequences in economic and cultural terms for the superpower to come to terms with, but at least without the explosion of a large-scale conflict.

With the end of the bipolar model, however, began what some historians declared to be the «end of history»: the transition from a multipolar world, to a bipolar world, to end in a unipolar world. From the point of view of Washington, the story ended with only one global power remaining, thereby granting the United States the power to decide matters for the whole world.

The scenario in which we live today, in terms of international law and the balance of forces, is almost unprecedented in history if looked at in the present context. It is true that the current transition from a unipolar to a multipolar reality is something similar to what has been seen in previous decades, with the transition from British hegemony in the late-nineteenth century to a multipolar situation in the period preceding the two world wars. Nevertheless, resorting to this historical analogy is difficult, given the relative absence of international rules compared to a century ago. Therefore it is difficult to use the earlier transition period to make assumptions about future trends.

The causes of change

The attitude of the US over the last 25 years has been focused completely on the achievement of global hegemony. The dream of having control over every event, in every corner of the world, has ironically led to accelerating the end of America’s unipolar moment. Of course the deep meaning of the word "control" can be expanded upon, examining the merits of the cultural, economic and military impositions that result from a constant quest for global domination.

The US has chosen an impassable road that is full of contradictions to justify their rise as a global power. In two decades we have witnessed the dismantling of all the key principles of the balance of power between Russia and the United States, necessitating the change in international relations from unipolar to multipolar. Similarly, the ratio of economic and military power between China and the United States has significantly worsened, culminating in the dangerous dispute over the South China Sea. The abandonment of the Kissinger doctrine governing relations with Beijing, and the failure of the Clinton reset with Moscow, have pushed two global powers, Russia and China, to forge an alliance that allows for a world where there are more powers on the international stage and not just Washington as the central focus of global relations.

The failure of the foreign doctrine of the United States was a direct consequence of the arrogance and the utopia of being able to dominate the planet, seeking to extend indefinitely the unipolar moment and forging a worldwide system culturally and economically based on the will of Washington, reinforced by a power and military posture without precedent.

Consequences

Had Washington thought more carefully about the consequences of their actions, and thereby employed a more considered strategic vision, it would certainly have opted for different choices. As a demonstration of this, we note Washington’s attitude in the Middle East, the deciding ground for prospects of continued US global hegemony.

Much of Washington’s remaining capacity to influence global decisions is attributable to the dollar and the trading of goods such as oil in that currency. With the appearance of a world with more regional or global powers, it is easy to guess that the rise of the Iranian Republic has consequences for the whole of the Middle East region. The odds are evident that Tehran, culturally, economically and militarily, will be the first regional power. Washington has realized this and has decided to reach an agreement with the Islamic Republic in order to remain relevant in the region and not to be cut off from future agreements. Washington also seeks, in doing so, to counterbalance the situation with her most influential regional allies, Saudi Arabia and Qatar.

It is a strategy that in the Middle East has had a negative impact in the immediate present for Riyadh, Doha, and in some ways even Ankara, who have all opted for an autonomous and interventionist approach in the region without much consultation with Washington. Nevertheless, the choice to include Iran as a dialogue partner for the Middle East balance has allowed Washington to conserve the illusion that in the future it will maintain an important role in regional decisions. This is a decision that has created many problems with historic allies, but Washington hopes, with a view to the future, to have made an appropriate choice. This also explains why so many of the neoconservatives and liberals (the promoters of a prolonged unipolar doctrine, the cause of so many failures ) are clearly opposed to this agreement.

Washington and its establishment have opted for a cultural and economic confrontation with Moscow, possibly militarily with Beijing in the South China Sea, in the process impelling the emergence of a multipolar world in which more powers have the ability, by joining together, to resist the will of the greater global power. In fact, it is easier to frame the international balance in a multipolar model that is slowly becoming bipolar.

We consider that Russia and China (and to a lesser extent Iran) do not possess the military capability to successfully oppose American power in a conventional conflict on a grand scale. For this reason, it is easy to understand that shaping a multipolar international order perhaps remains quite optimistic at this time. It is similarly optimistic to maintain a unipolar world order that remains anchored in the illusions of the American elite.

Reality rather shows us a bipolar world, where the alternative pole to the US is represented by the union and alliances (cultural, economic and military) of Beijing, Moscow and Tehran. And their partnership has resulted in a change in the pattern of international relations. The cause of this union is to be found in the will of the US elites to prolong their unipolar moment. Instead of opting for an agreement with another global power (probably China) and seal the international stage in a realistic model with two poles, facing no real opposition, Washington has exacerbated the differences by pushing countries like Russia, China, Iran and India closer and closer together, forging what currently might be termed a temporary bipolar model of world order.

The certainty is that the future will turn fully into a multipolar model, and this obliges Washington to struggle in every way possible to remain relevant. To date, apart from nuclear agreements, every choice has been counterproductive and wrong. Will Washington’s elites ever learn, or will they eventually become irrelevant?

via http://ift.tt/2dVa9MJ Tyler Durden

Submitted by Ronan Manly, BullionStar.com

Eighteen months ago I wrote a short synopsis of a gold sales transaction by the central bank of El Salvador wherein it had sold 80% (about 5.5 tonnes) of its official gold reserves. The title of the post was “El Salvador’s gold reserves, the BIS, and the bullion banks“. If you thought, why the focus on the Banco Central de Reserva de El Salvador (BCR), it’s not a major player on the world gold market, you’d be correct, it’s not in its own right that important.

However, the point of the article was not to profile the gold transactions of a relatively obscure central bank in Central America, but to introduce the topic of central bank gold lending to LBMA bullion banks, and the use of short-term ‘gold deposits‘ offered by these bullion banks. The reason being is this is a very under-analysed topic and one which I will be devoting more time to in the future.  Gold loans by central banks to bullion banks are one of the most opaque areas of the global gold market. The fact that I’m using the central bank of El Salvador as the example is immaterial, it’s just convenient since the BCR happens to report the details of its gold lending operations, unlike most central banks.

A Quick Recap

At the end of September 2014, the BCR claimed to hold 223,113 ozs of gold (6.94 tonnes), of which 189,646 ozs (5.9 tonnes) was held in the form of “deposits of physical gold” with the Bank for International Settlements (BIS), and 33,467 ozs (1.04 tonnes) which was held as “time deposits” of gold (up to 31 days) with 2 commercial bullion banks, namelyBarclays Bank and the Bank of Nova Scotia.

The following table and all similar tables below are taken from the BCR’s ‘Statement of Assets backing the Liquidity Reserve’, or ‘Estado de Los Activos Que Respaldan la Reserva de Liquidez’, which it publishes every 3 months.

BCR gold position as of 30 September 2014

In November 2014, the BCR executed a small sale of 5007 ozs of its gold from its quantity held with the BIS, leaving a holding of 218,106 ozs (6.784 tonnes) as of 31 December 2014, comprising 184,639 ozs held in “deposits of physical gold” with the BIS, and 33,467 ozs of “time deposits” (of between 2 and 14 days duration) with 2 bullion banks, namely BNP Paribas and the Bank of Nova Scotia. Notice that as of the end of 2014, BNP Paribas was now holding one of the time deposits of gold, and that Barclays was not listed.

BCR gold position as of 31 December 2014

Notice also in the above table the tiny residual time deposit gold holding attributed to Standard Chartered Bank Plc. Rewind for a moment to 30 June 2014. At the end of June 2014, the BCR’s gold deposits were placed with 3 LBMA bullion banks, namely, Barclays, Bank of Nova Scotia, and Standard Chartered.

This is the way short-term gold deposit transactions work. A central bank places the short-term gold deposit with one of a small number of bullion banks, most likely at the Bank of England, and when the deposit expires after e.g. 1 month, the central bank places the deposit again, but not necessarily with the same bullion bank. The deposit rates on offer (by the bullion banks) and the placements by the central banks are communicated over a combination of Bloomberg terminals, or by phone and then the transactions are settled by Swift messages. More about the actual mechanics of this process in a future article.

BCR gold position as of 30 June 2014

 

BCR sold its gold at the BIS, put the rest on deposit

In March 2015, the BCR sold 174,000 ozs (5.412 tonnes ) of gold, which left El Salvador with 44,000 ozs. When I wrote about this transaction 18 months ago I had speculated that:

“Since the Salvadoreans had 189,646 ozs on deposit with the BIS and needed to sell 179,000 ozs, the gold sold was most definitely sold to the BIS or to another party with the BIS acting as agent.

It would not make sense to sell some or all of the time deposits that are out with the bullion banks such as Barclays and Scotia, since a large chunk of the BCR gold at the BIS would have to be sold also. It would be far easier to just deal with one set of transactions at the BIS. 

The above would leave the time deposits of 33,467 ozs (and accrued interest) out with the bullion banks, rolling over each month as usual. The other roughly 11,000 ozs that the BCR held with the BIS could be left with the BIS,or else this too could be put out on deposit with the bullion banks.”

This speculation turns out to have been correct. By 31 March 2015, the BCR held 10,639 ozs of gold “deposits of physical gold” with the BIS, and the same 33,467 ozs of “time deposits“, but this time split evenly between BNP Paribas and Barclays. The entire 174,000 ozs of gold sold came from the “deposits of physical gold” that El Salvador held with the BIS.

BCR gold position as of 30 March 2015

By 30 June 2015, the central bank of El Salvador had moved its remaining 10,639 ozs of “deposits of physical gold” from the BIS, and placed it into “time deposits” with bullion banks, with the entire 44,106 ozs being evenly split across Bank of Nova Scotia, BNP Parias and Standard Chartered, each holding 14,702 ozs.

BCR gold position as of 30 June 2015

Over the 12 months from end of June 2014 to 30 June 2015, a combination of at least 4 LBMA bullion banks, namely,Barclays, Bank of Nova Scotia, Standard Chartered and BNP Paribas were holding short-term gold deposits on behalf of the central bank of El Salvador. I say at least 4 banks, because there could have been more. The snapshots every 3 months only reveal which banks held gold deposits on those dates, not the full list of deposits that could have been placed and matured over each 3 month period.

These time deposits are essentially obligations by the bullion bank in question to repay the central bank that amount of gold. The original gold which was first deposited into the LBMA system could have been sold, lent or otherwise encumbered. It has become a credit in the LBMA unallocated gold system. Ultimately it needs to be paid back to the central bank by whichever bullion bank holds the deposit when the central bank decides that it no longer wants to roll its short-term deposits. This is why the anology of pass the parcel is a suitable one.

Looking at the more recent 3 monthly snapshots from September 2015 to June 2016, the same 4 LBMA bullion bank names were still holding the BCR’s gold deposits, namely Bank of Nova Scotia, Barclays, Standard Chartered and BNP Paribas.

As of 30 September 2015 – Bank of Nova Scotia, Barclays and BNP Paribas, evenly split between the 3 of them.

BCR gold position as of 30 September 2015

On 31 December 2015 – Bank of Nova Scotia, BNP Paribas, and Standard Chartered, evenly split between the 3 of them.

BCR gold position as of 30 December 2015

On 30 March 2016 – Bank of Nova Scotia and BNP Paribas, evenly split between the 2 of them.

BCR gold position as of 30 March 2016

On 30 June 2016, the BCR gold deposits were held by Bank of Nova Scotia and BNP Paribas, evenly spilt between the 2. The 30 June 2016 file on the BCR website doesn’t open correctly so this data was taken from the Google cache of the file.

IMF Reporting standards

Finally, let’s take a quick look at what monetary gold and gold deposits actually are, as defined by the International Monetary Fund (IMF).

“Monetary gold is gold owned by the authorities and held as a reserve asset.  Monetary Gold is a reserve asset for which there is no outstanding financial liability”, IMF Balance of Payments Manual (BPM)

In April 2006, Hidetoshi Takeda, of the IMF Statistics Department published a short opinion paper on the ‘Treatment of Gold Swaps and Gold Deposits (loans)‘ on behalf of the Reserve Assets Technical Expert Group (RESTEG) of the IMF Committee on Balance of Payments (BoP) Statistics. The paper was called “Issues Paper (RESTEG) #11“. In the Issues paper, Takeda states:

“monetary authority make  gold deposits ‘to have their bullion physically deposited with a bullion bank, which may use the gold for trading purpose in world gold markets‘”

“‘The ownership of the gold effectively remains with the monetary authorities, which earn interest on the deposits, and the gold is returned to the monetary authorities on maturity of the deposits'”

 ” Balance of Payments Manual, fifth Edition (BPM5) is silent on the treatment of gold deposits/loans. However, the Guidelines states that, “To qualify as reserve assets, gold deposits must be available upon demand to the monetary authorities” 

You can see from the above that once the gold balance that is represented by the gold deposit is under the control of a bullion bank as a unallocated balance, then it becomes an asset of the bullion bank and can be used in subsequent bullion bank transactions, such as being lent again,  or used to support its trading book, etc.

The big question is whether the gold as represented by the gold deposit is available on demand by the central bank which lent it. For ‘available on demand’ think using an ATM or walking into your local bank and withdrawing some cash from your account. It’s as simple as that.

Takeda said:

“Regarding the statistical treatment of gold deposits/loans, keeping the status quo is suggested. That is, if the deposited/loaned gold is available upon demand to the monetary authorities, it can be included in reserve assets as monetary gold. However, if the gold is not available upon demand, it should be removed from reserve assets“

Takeda’s paper also covers the topic of “Double counting of gold from outright sales of gold acquired through gold swaps or gold deposits/loans” where he says logically:

“double counting of gold can occur when a bullion bank sells outright gold acquired through gold deposits/loans from… monetary authorities”

If the gold sold is not removed from the central bank’s balance sheet, it could:

“pose a problem when international statistical standards allow swapped/deposited gold to remain in the reserve assets of the gold provider.”

Given that nothing has changed in the IMF’s reporting standards since 2006, i.e. the IMF did not take on board Takeda’s recommendations on gold loan accounting treatment, and given that all central banks still report gold as one line item of “gold and gold receivables”, then you can see how these gold deposits that are being continually rolled over by central banks using a small number of LBMA bullion banks based in London a) are being double counted if the gold involved has been sold, b) only represent claims by a central bank on a bullion bank, and c) allow bullion banks to increase their unallocated balances which can then be used in myriad leveraged and hypothecated ‘gold’ trading transactions

If you think 4 LBMA bullion banks passing a parcel of central bank gold claims around between them is excessive, wait until you see 28 bullion banks doing the same thing! Coming soon in a future article.

This article originally appeared on BullionStar.com – Bullion Banks pass the parcel on El Salvador’s gold reserves

 

 

via http://ift.tt/2e97o8g BullionStar

The following shocking clip of George Soros mumbling through an interview in August with a Bloomberg reporter shows him admitting that:

“it’s all going to lead to a landslide victory for Donald Trump… in the popular vote…. not in the electoral vote because they’re paid political elements/announcers will have a big role and so the electoral vote will be closer…”

Was it a slip of the tongue by a boasting billionaire to a pretty blonde television reporter? We will never know what he was stumbling to say, but from the words he did mumble, it is clear that the deep state is very much in play and knows exactly how they have planned this to end.

*  *  *

As Bill Still notes, what word is he trying to pull up? I think he starts to say “paid political elements”.

Perhaps he means that there will be massive paid political advertisements? Or could he be talking about his voting machines rigging the elections? Incidentally, according to a Daily Caller story from last week: “Smartmatic, a U.K.-based voting technology company with deep ties to George Soros, has provided voting technology in 16 states including battleground zones like Arizona, Colorado, Florida, Michigan, Nevada, Pennsylvania and Virginia. Other jurisdictions affected are California, District of Columbia, Illinois, Louisiana, Missouri, New Jersey, Oregon, Washington and Wisconsin.”

 

Or is he talking about outright bribery of the voting members of the electoral college itself?

 

According to Archives.gov: “There is no Constitutional provision or Federal law that requires Electors to vote according to the results of the popular vote in their states. Some states, however, require Electors to cast their votes according to the popular vote.  The U.S. Supreme Court has held that the Constitution does not require that Electors be completely free to act as they choose and therefore, political parties may extract pledges from electors to vote for the parties’ nominees… The Supreme Court has not specifically ruled on the question of whether pledges and penalties for failure to vote as pledged may be enforced under the Constitution. No Elector has ever been prosecuted for failing to vote as pledged.”

 

In fact, only 29 states require Electors to vote for the winner of the popular vote. But fortunately several are critical swing states, including: Colorado, Florida, Michigan, Nevada, North Carolina, Ohio, Utah, Virginia and Wisconsin.

 

According to Archives.gov: “Over the years, however, despite legal oversight, a number of electors have violated their state’s law binding them to their pledged vote. However, these violators often only face being charged with a misdemeanor or a small fine, usually $1,000.”

Lastly, Soros then says a very remarkable thing, that he and his associates are a small minority of extremists:

“we are a small minority of extremists and we are moving it in that direction, I don’t think Donald Trump has any chance of being elected [but Hillary Clinton is a ‘done deal’?] yes.”

An admission of the deep state’s actions? You decide…

As Bill Still details in the following brief clip, Soros’ strange momentarily disturbing admission would confirm two things:

1. the widespread rigging of the polls in the United States
2. the widespread collusion amongst the MSM in keeping this quiet.

Filmed by Bloomberg at the World Economic Forum on August 31st …

h/t Bill Still

via http://ift.tt/2dGPnlu Tyler Durden

While the rest of the world is devolving into proxy, or even outright warfare, one nation is profiting handsomely. Germany’s ammunition exports skyrocketed in the first half of 2016, a leaked report has revealed according to Germany’s Deutsche Welle. And ironically Turkey, a country whose political relationship with Germany has deteriorated sharply over the past year – if only for popular consumption – and is currently suppressing its political opposition, has moved up the list of the country’s best customers.

As DW reports, the German government has allowed the country’s gun-makers to sell even more ammunition around the world in the first half of 2016, according to an arms export report leaked to the DPA news agency and due to be discussed in a cabinet meeting on Wednesday. The sales of small arms themselves have fallen slightly, from 12.4 million euros ($13.5 million) to 11.6 million euros, but the approved ammunition sales rose from 27 million euros to 283.8 million euros.

This broke down into 275 million euros worth of sales to EU, NATO, and NATO-allied countries (Australia, New Zealand, Japan, and Switzerland) as well as some 5.4 million euros to Iraq. The three biggest single customers were France, Poland, and Iraq, where Germany is supporting the Kurdish fighters in their battle against “Islamic State.”

Think of it as a razor-razorblade model, just far more deadly.

Sebastian Schulte, defence analyst and Germany correspondent for military magazine “Jane’s Defense Weekly,” said the increase in ammunition was not particularly surprising, given the intensification of the battles in Syria and northern Iraq. “The coalition is at the gates of Mosul, they’re going through a lot of ammunition, and Germany has decided to support the coalition – notably the Kurds,” he told DW. “You can go through several barrels of ammo for a machine gun in a day. That is quite normal.” 

Not only that, Germany is probably also sending a lot of ammunition to Turkey, he speculates: “And as you know, Turkey is also highly involved both in Syria and in anti-IS operations.” As Schulte explained, Germany’s assault rifle ammunition is designed to be used in several different guns across NATO armies – though not in older guns like the Soviet-designed Kalashnikov or the 1960s era German machine gun, the G3.

What Schulte did not comment on is that it almost appears that German’s interests are alligned with those of the US, to perpetuate a state of warfare in Syria and Iraq. After all, while weapons purchases ultimately plateau, the need for ammunition if virtually infinite.

* * *

The arms export report also revealed that Turkey has become a better weapons customer in the last few years: moving up from 25th place to 8th place since the beginning of the refugee crisis. Two-thirds of these sales came in plane parts, unmanned drones, and other military equipment. South Korea is also buying more from Germany, thanks to escalating tension with its northern neighbor, and has bought 205 million euros worth of military equipment, including military ships, submarine and helicopter parts, missiles and missile defense systems.

But few are as good or steady clients of Germany as the biggest sponsor state of terrorism around the globe, Saudi Arabia which remains Germany’s third-biggest buyer, increasing its purchases from 179 million euros in the first half of 2015 to 484 million euros, while the United Arab Emirates almost doubled its purchases from Germany from 46 million euros to 85 million euros.

In top spot, somewhat surprisingly, and the best individual customer in the first half of 2016, was Algeria buying 1.04 billion euros of German military equipment, closely followed by the US, who bought 914 million euros’ worth.

Meanwhile, Germany’s faux pacifism has once again been exposed. Vice Chancellor Sigmar Gabriel, who as economy minister is responsible for Germany’s arms sales, has promised to reduce Germany’s exports of small arms, which are by far the biggest cause of deaths in conflicts around the round the world.

Alas, it was easier said than done. At the start of July, it was revealed that the value of Germany’s total arms sales had doubled from 2014 to 2015 (from 3.97 billion euros to 7.86 billion euros) – something that the Social Democratic Party leader blamed on a few major individual sales that had been agreed before his tenure. But Germany’s anti-arms activists would not accept this excuse, saying that the German government always has the power to cancel deals.

Tuesday’s report appears to show Gabriel breaking his promise again, angering the Left party’s arms export spokesman Jan van Aken: “We need clear legal bans, and first and foremost an immediate ban on small arms exports,” he told DPA. The Green party’s Agnieszka Brugger was equally outraged by the latest figures, tweeting: “The government is throwing its own strict export guidelines in the garbage bin. No sense of responsibility!”

Yes, well, while outraged and disguasted German pacificst tweet, the German weapons industry is set to enjoy another blockbuster year thanks to what has been an unprecedented  outbreak of conflict and near-war around the globe. Which should help least answer the first and foremost question any time a conflict breaks out anywhere: qui bono. And since demand for weapons and ammo transcends such trivial limitations and FX exchange rates, once German arms makers have hooked enough foreign “clients”, even a spike in the Euro – should the ECB eventually taper its QE – would not result in a notable loss in future revenue.

via http://ift.tt/2eQd3RA Tyler Durden

Authored by David Wong, originally posted at Cracked.com,

"But Trump is objectively a piece of shit!" you say. "He insults people, he objectifies women, and cheats whenever possible! And he's not an everyman; he's a smarmy, arrogant billionaire!"

Wait, are you talking about Donald Trump, or this guy:

You've never rooted for somebody like that? Someone powerful who gives your enemies the insults they deserve? Somebody with big fun appetites who screws up just enough to make them relatable? Like Dr. House or Walter White? Or any of the several million renegade cop characters who can break all the rules because they get shit done? Who only get shit done because they don't care about the rules?

"But those are fictional characters!" Okay, what about all those millionaire left-leaning talk show hosts? You think they keep their insults classy? Tune into any bit about Chris Christie and start counting down the seconds until the fat joke. Google David Letterman's sex scandals. But it's okay, because they're on our side, and everybody wants an asshole on their team — a spiked bat to smash their enemies with. That's all Trump is. The howls of elite outrage are like the sounds of bombs landing on the enemy's fortress. The louder the better.

Already some of you have gotten angry, feeling this gut-level revulsion at any attempt to excuse or even understand these people. After all, they're hardly people, right? Aren't they just a mass of ignorant, rageful, crude, cursing, spitting subhumans?

Gee, I hope not. I have to hug a bunch of them at Thanksgiving. And when I do, it will be with the knowledge that if I hadn't moved away, I'd be on the other side of the fence, leaving nasty comments on this article the alternate universe version of me wrote.

It feels good to dismiss people, to mock them, to write them off as deplorables. But you might as well take time to try to understand them, because I'm telling you, they'll still be around long after Trump is gone.

via http://ift.tt/2f5HM0S Tyler Durden

With over-subscribed new issuance the new normal in this 'reach for any yield' world, perhaps the rapid demise of Mozambique will remind some greater fools that 'high' yields are high for a reason.

As we warned 4 months ago, Mozambique has a broad swath of problems within its governing councils.  Back in December of 2005, Management Systems International based out of Washington issued a report titled CORRUPTION ASSESSMENT: MOZAMBIQUE which said point blank: "The scale and scope of corruption in Mozambique are cause for alarm".

Mozambique's head of state Joaquim Chissano left office in February 2005 after 15 years.  His replacement, Armando Guebza, that same year opened Mozambique's coastline to international companies seeking to search for resources.  Between 2005 and 2006 three firms were able to capture rights to explore the coast, Anadarko, Italy's Eni, and Petronas.  Some 75 trillion cubic feet of natural gas was discovered and this set of a a blitz into Mozambique as international banks, corporations, and organizations flooded the area.  This opened a breeding ground for corruption and unregulated financing, specifically the controversial Tuna Bond that was supposed to be used to support regional fishing and was instead used for military expenditures and to purchase some 40 boats that remain anchored to this day.

Since then, the New Metical has crashed hyperinflation-like to record lows against the dollar…

 

In June, The IMF blamed "undisclosed loans" for Mozambique's sudden surge to 86% Debt/GDP ratio. 

"Mozambique's economic growth will likely slow to 4.5 percent in 2016 from 6.6 percent the previous year due to rapidly rising inflation and growing government debt, the International Monetary Fund said on Friday. The leader of a Fund team that visited the southern African country, Michel Lazare, said the discovery of more than $1 billion of previously undisclosed government debt would increase pressure on the economy."

Which seemed to spark dip-buying in the bonds…until today (as Bloomberg reports)

Mozambique is in “debt distress,” according to the International Monetary Fund’s criteria, and plans to start talks with creditors in coming days.

 

The southern African nation has appointed Lazard Freres SAS and White & Case to “engage in a constructive dialogue with creditors,” it said in a presentation to investors dated Oct. 25 and posted on the Finance Ministry’s website. The government aims to achieve ‘debt sustainability’ with the agreement of creditors before starting talks about an International Monetary Fund loan, it said.

The yield on Mozambique’s $727 million of Eurobonds due 2023 jumped 554 basis points to 20.78 percent by 5:22 p.m. in Maputo, the highest on record.

The country’s debt ratio will reach 112.6 percent of GDP this year after $1.4 billion in previously undisclosed loans were uncovered in April, the IMF said in a report posted to its website today. Government already this year restructured over $800 million in loans it received for a fleet of tuna fishing vessels, repackaging the debt as a $727 million of Eurobonds.

Any new restructuring will be complicated by the existence of about $1.2 billion in loans Credit Suisse and VTB secretly made to other Mozambican state-owned companies and then resold to other investors. It is unclear how holders of the loans would be treated compared with bondholders. As WSJ reports,

Several creditors who financed the borrowings to the state-owned businesses said they are considering litigation. They spoke on condition of anonymity because they weren't authorized to talk to the press.

In their crosshairs isn’t just Mozambique, but also Credit Suisse and VTB, the two banks that arranged the loans and are currently being investigated by authorities in the U.K. and Switzerland over their conduct.

Both banks deny wrongdoing, as does the Mozambican government, which blames its troubles on the delays in bringing its vast gas reserves online because of low global energy prices.

Mozambique full investor presentation…

via http://ift.tt/2et1jXl Tyler Durden

Submitted by James Holbrooks via TheAntiMedia.org,

As fighting resumes in Aleppo following a brief ceasefire – and as Russia’s largest naval fleet to sail since the Cold War steams down the English Channel on its way to the western coast of Syria – it’s important, in times when most of the focus is being drawn to one point, to step back and look at the whole board.

Yes, what’s happening in Aleppo is a tragedy. Civilians, women, and children are being blasted out of existence as two superpowers back opposing sides in a proxy war for regional dominance. Yes, as the Russian fleet nears the Mediterranean Sea, tensions will undoubtedly escalate for a number of nations with ties to the Syrian conflict.

But President Vladimir Putin’s moves regarding Aleppo are far from his only ones worth noting of late.

Take Turkey, for instance. Last week, Underground Reporter posited the idea that Turkey, due to its deteriorating relations with the United States and its strengthening cooperation with Russia, has, in effect, become the military wild card in the Middle East. Cited as evidence of deepening Russian-Turkish ties was the fact that the two countries have just signed a deal to build a pipeline from Turkey to Ukraine, which would then supply natural gas to Europe.

Turkey, which is north of Syria, shares much of its southern and all of its eastern border with the Mediterranean Sea. A good portion of Syria’s western border also runs into the Mediterranean, and it’s in those waters where Russian vessels, already hovering there, await the arrival of the aircraft carrier-led fleet now pushing through the English Channel.

All this fits nicely into a narrative that only focuses on what’s happening in Aleppo. But one need only glance at a map to see, using nothing but the eyes and common sense, just how much more is actually taking place right now.

In mid-October, it was reported that, for the first time ever, Russia and Egypt would conduct joint military drills. This followed news that Russia will sell attack helicopters to the North African nation and invest billions in Egyptian infrastructure. These items, along with the fact that Egypt is eager to be re-granted Russian tourism rights for its citizens after recent bad blood between the countries, lead one to the logical conclusion that Egypt has every incentive to cooperate with Russia going forward.

Egypt, in case you’re not looking at that map, is directly across the Mediterranean Sea from Turkey.

This means when the Russian fleet reaches the Mediterranean — whether the intent is to park in those waters and bombard Aleppo, as some believe, or merely to project Russian might to the world, as others suggest — it will be flanked by friendlies on three sides. Turkey to the north, Syrian to the east, and Egypt to the south.

This is not a bad position to be in if you’re looking to build a natural gas pipeline from Turkey to Ukraine. Turkey, incidentally, shares its northern border with the Black Sea, which in turn shares its southern border with Ukraine. And the Black Sea, as those who’ve followed the Ukrainian situation in recent years well know, is swarming with Russian warships.

So, in the bigger picture — assuming Turkey will eventually fully embrace the Russian sphere and that Egypt, as it’s highly incentivized to do, embraces its new role as a Russian satellite — Putin has protected himself quite deftly from those in the West who’ll inevitably, no matter what the fleet does once it arrives, accuse Putin of aggression.

Turkey and Egypt are both formerly staunch U.S. allies, after all, and there’s been no official severing of ties, or even hints of such, with those nations. So Putin, thanks largely to the West’s own hegemonic maneuvering, has a lot of room to operate in terms of deals and cooperation — both militarily and economically.

In any case, the facts present a narrative — albeit a theoretical one — that isn’t being discussed. Putin, as we speak, may be implementing the first phases of an effort to secure a nice straight shot from Turkey to Ukraine for the long-desired Turkish Stream pipeline.

via http://ift.tt/2eON3oJ Tyler Durden

Earlier this month we reported, using TrimTabs data, that perhaps as a result of ballooning corporate debt the value of stock buyback announcements from U.S. companies had slowed to its lowest level in nearly five years, dropping to a fresh nine quarter low, with TrimTabs adding that this potentially joepardized one of the main drivers of the rising stock market. The company calculated that buybacks rebounded to $59.9 billion in September from a 3½-year low of $21.5 billion in August, but two-thirds of last month’s volume was due to a single buyback by Microsoft.  The 39 buybacks rolled out last month was the lowest number in a month since January 2011.

Then, in a new report released today, TrimTabs analyzed buying patterns by corporate insiders and found insider buying was “almost non-existent in October.” Looking at Form 4 filings with the Securities and Exchange Commission, TrimTabs reveals that insider buying has dropped to just $110 million in October through Friday, October 21. This was the lowest monthly total going back to 2011.

“The best-informed market participants seem unenthusiastic about U.S. stocks at current prices,” said David Santschi, chief executive officer at TrimTabs.  “Insider buying is running at the slowest pace for October in the past five years.”

In a research note, TrimTabs explained that the weakness in buying is not just seasonal.  On the first 15 trading days of October, insider buying was $390 million in 2012, $360 million in 2013, $540 million in 2014, and $260 million in 2015.

TrimTabs added that as insider buying slumps, U.S. companies are also committing less cash to repurchase shares.  Stock buyback announcements fell to a nine-quarter low of $115.0 billion in the third quarter, and they would have been much lower without a single $40 billion buyback for Microsoft.  Buybacks have totaled just $8.2 billion this month through Friday, October 21.

“The pullback in buying by both insiders and companies isn’t an encouraging sign for U.S. equities,” said Santschi.  “Corporate America seems to be battening down the hatches.”

Incidentally, the TrimTabs report confirms what Bank of America also reporter earlier today in its weekly institutional buying, or rather selling report, namely that in the last week, BofAML “clients were net sellers of US equities for the second week (-$0.4bn vs. -$0.9bn the prior week). Institutional clients continued to lead the selling, and have now sold US stocks for the last 20 weeks. Hedge funds were also net sellers following two weeks of buying. But private clients bought stocks for the third week, after selling stocks most weeks since February.”

Despite selling stocks for most of this year, our private clients are actually more overweight equities than they were in 2007 (likely a function of performance and lack of rebalancing).

Meanwhile, BofA noted that while buybacks by corporate clients did accelerate to their highest level in six weeks, they are tracking well below their typical run-rate for the first three weeks of October, and year-to-date are tracking their lowest since 2012, confirming the TrimTabs findings.

In other words, both corporations and insiders have dramatically cut back on their stock purchases, while most smart money clients continue to sell.

Which leads us to a now traditional question: if the buying is the slowest in years, and insiders are selling, how are stocks holding up where they are?

 

via http://ift.tt/2eE7rt5 Tyler Durden

Via The Daily Bell

via http://ift.tt/2fdAsiU TDB