Author: admin

In our column last week we were warning you about Deutsche Bank’s problems and potential issues with its derivatives portfolio and its capital structure. The story continued to unfold in the past week and Deutsche Bank was pushed into a corner as more and more investors started to lose confidence in the bank. A plan to buy back $5.4B in debt in a desperate move to reassure the capital markets. In fact, Deutsche’s move is so desperate it will even start buying back debt that was issued less than six weeks ago.

Where did we see that before? Oh, yes, of course. Lehman Brothers. When the shit was hitting the fan, Lehman continued to buy (back) assets instead of keeping the cash in-house to have a financial buffer to counter any potential liquidity issue.

Well, the financial world definitely wasn’t assured by Deutsche Bank’s reassurances, and this effect was predominantly felt in the gold market as the gold price jumped to a multi-year high at in excess of $1264/oz. That’s very nice, but what’s even more interesting is the fact the buying pressure actually started on Thursday, right at the moment the Hong Kong Stock Exchange opened.

Source: kitco.com

This is very interesting as the Chinese buyers haven’t been willing to shown their eagerness to get their hands on gold, and a strong gold price appreciation during the Hong Kong trading hours was quite remarkable. We’re looking forward to see how the gold price will behave on Monday, as the US and Canadian exchanges will be closed. Will there be another coup coming from Asia?

Let’s have a look how strong the outbreak of the gold price was, and how the Hong Kong trading day played a pivotal role on Thursday.

Source: stockcharts.com

The moment the gold price broke through the 200 day moving average, all bets were off and several traders correctly recognized this could potentially be a real game changed. And indeed. Just 4 trading days after breaking through the 200MA, the gold price already touched the $1200oz-level, where it stayed at for approximately 3 days without being able to break through this symbolical level (yellow rectangle). Enter the scene: Hong Kong traders (orange arrow). In just one move they lifted the gold price above $1200/oz overnight, taking the Western traders by surprise, who quickly had to unwind their short positions, further strengthening the spike in the gold price to $1264/oz.

Source: Ibidem

Looking at the multi-year chart, it’s now pretty obvious the downtrend has been broken, and gold is now swiftly moving higher. Not only does this confirm the theoretical and technical pattern we saw after the 200MA was captured, there also seems to be some more room to run. The RSI, for instance, is still in the ‘safe’ zone, whilst the Money Flow Index (the yellow circle below the chart) also hasn’t reached alarming levels just yet.

Additionally, the gold/oil ratio has posted a new record as well. The previous record of 41 barrels of oil per ounce of gold was in 1892, but the eruption of the current crisis has now crushed that ‘record’. This is also a very important sign to prove the volatility of the markets is still exceptionally high. As gold and oil are moving in the opposite directions, the markets are indicating they are expecting to see more problems in the near future.

Source: Deutsche Bank via iii.co.uk

We remain unsure Janet Yellen and Mario Draghi are the right captains to save us from this rollercoaster called the ‘world economy’, and we hope you have started to protect yourself and your assets!

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Originally posted at The Daily Bell,

Stock markets suspect Federal Reserve has interest rate jitters … Hints that the Fed won't raise interest rates in March are proving to be good news for miners and oil producers' share prices The Federal Reserve's William Dudley said further strengthening in the dollar could have 'significant consequences' for the health of the US economy. – UK Guardian

Blame it on the dollar!

The Federal Reserve hiked a tiny bit and markets around the world plunged. This is the big story that implies the further loss of Fed credibility.

But there is an even bigger one that we'll discuss at the end of this article.

Let's continue with this Guardian analysis. The reporting is along the lines we would expect: We learn that market players have come to the logical conclusion that the Fed is not going to raise interest rates again any time soon.

Or even if they do "raise" them, they'll have a negligible impact on real rates.

On Thursday, large stocks moved up and reports circulated that Fed officials were continuing to have "second thoughts" about a series of rate hikes. Here, more from the Guardian:

William Dudley, a top Fed official, said on Wednesday that monetary conditions had tightened since December's quarter-point rise and rate setters would have to take note. Further strengthening in the dollar, added Dudley, could have "significant consequences" for the health of the US economy. Translation: the Fed probably won't raise in March.

The dollar then sold off yesterday, while commodity prices rose, especially the share prices of miners and oil and gas producers. It was quite a clever statement, helping move the dollar down and the market up.

Even more importantly, it began the process of Fed damage control. The Fed hike had not merely bashed stocks, it had buttressed the dollar.

A stronger dollar, Dudley says, may preclude further near-term rate hikes. Thus, the Fed, conveniently, doesn't have to acknowledge – directly, anyway – that further hikes are on hold because of damage done to equities.

That would be embarrassing!

Of course, there are additional sub-plots, one courtesy of Goldman Sachs, as reported in the Australian Financial Review:

US Federal Reserve will lift rates higher than market thinks: Goldman Sachs' US economist Jan Hatzius predicts the US central bank will proceed with three interest rate hikes this year …

 

The US central bank will take some time to determine the effects of tighter financial market conditions, but will surprise markets by pushing interest rates higher than what they're presently pricing in, according to Goldman Sachs' highly regarded US chief economist,

This brings us to the even bigger story we already mentioned. That has to do with how Fed maneuvering has obscured a larger economic truth: The depression-like state of the US economy.

Central banks like the Fed not only create recessions and depressions; their constant interference in the marketplace makes it difficult for consumers and investors to discern the truth.

The truth is that the US's "recovering economy" is nothing of the sort. Some 40 million are on food stamps. Some 90 million have ceased even looking for formal employment.

Additionally, asset bubbles have appeared in auto and high-end housing sectors, among others.

Central banks are financial swindlers, monetary dissemblers. They undermine economies while pretending to "protect" them. The narratives swirling around central-bank moves are promulgated by the bought-and-paid-for mainstream media … and make it almost impossible for the average person to figure out what's really going on.

And what's that? The inevitable move toward greater globalization and authoritarian elite control.

Economies around the world are generally in a state of collapse. With the exception of the US, most central banks are printing as fast as they can. Perhaps the US will join with another bout of quantitative easing.

Even if it doesn't and Fed officials decide to hike again – or even a few more times – you can bet media attention will focus on the sterile paradigm of a tiny group of overweight men and women gathered in a comfortable conference room and deciding on the direction of a US$17 trillion economy.

Thus the real issues are always obscured:

• The warfare/welfare state to which monopoly money printing gives rise …
• The general destruction of the economy including entrepreneurs and farmers …
• The perversion of almost every civilized facility from universities to political assemblies to domestic corporations …

These signal the toll that arises from the deliberate debasement of money.

Central banks separately or in concert are malicious tools of wholesale cultural destruction. The constant nattering about the direction of interest rates and other "imaginative" tools increasingly employed only conceal the issues that should truly be examined and conveyed.

Like a bad soap opera, the same plump faces will appear over and over every day saying approximately the same things. The idea is to make sure that a handful of "special" individuals with the appropriate academic backgrounds can manage the world's entire, complex economy. They can't, of course.

The message we receive is that they can … and do.

Conclusion: 

Central bankers regularly lie to us to obscure the larger, ongoing globalization of finance. We're not supposed to notice what's going on behind the curtain. But we better start.

via Zero Hedge http://ift.tt/20T4HxC Tyler Durden

Nearly a year ago, Bank of Japan governor Haruhiko Kuroda described the unlikely inspiration behind Japan’s unprecedented monetary stimulus: Peter Pan.

I trust that many of you are familiar with the story of Peter Pan, in which it says, ‘the moment you doubt whether you can fly, you cease forever to be able to do it’. Yes, what we need is a positive attitude and conviction. Indeed, each time central banks have been confronted with a wide range of problems, they have overcome the problems by conceiving new solutions.

As VisualCapitalist's Jeff Desjardins notes, Kuroda’s optimism is desperately needed in a country that has now been officially “leapfrogged” by the four Asian Tigers in terms of Real GDP per capita (PPP). With over a decade of experimentation in extreme monetary policy under their belts, Japan has very little to show for it.

It would be fine if this story of economic malaise could be confined as a global outlier. However, recent circumstances have prodded the world’s central bankers to finally buy into the tale of Peter Pan.

The world is turning Japanese.

 

 

So Much Negativity

Negative interest rates were an economic pipe dream many decades ago, but the idea of “charging” interest to hold money is now becoming mainstream. Conventional wisdom was that depositors would just hoard cash rather than depositing at a cost, but now the people running central banks are beginning to believe that this fear is misplaced. Especially as society becomes more cashless, the inconvenience of withdrawing money to save a few bucks isn’t worth it.

Central banks in Switzerland, Sweden, Denmark, and Japan now all have negative interest rates. The ECB has also held their Deposit Facility Rate for overnight deposits in the negative since June 2014.

In recent weeks, the interest in this economic experiment has risen significantly. Sweden cut their rates deeper into negative territory, signalling to the rest of the world that there is nothing to fear. Meanwhile, both the Federal Reserve and the Bank of Canada have openly pondered the possibility of NIRP in their respective jurisdictions.

Misplaced Conviction?

Not everyone agrees with the central bankers in seeing the Peter Pan analogy to be a fitting representation.

We’d liken it more to a squad of musketeers running out of gunpowder, and turning desperately to their bayonets to win a decision. It doesn’t matter how much conviction and optimism the crew has in their bayonet skills – at the end of the day, it’s only going to add a few extra minutes of life into the inevitable battle against a much more powerful deflationary force.

In other words, “hope” isn’t a strategy that central bankers can use to any efficacy, and wishful thinking can only go so far. The market seems to agree, and it’s part of the reason that stocks have sold off this year. Even the “safe haven” gold trade is back, after being absent for much of the previous year.

Many critique assets such as gold, which is up 15% year-to-date, because it does not pay a dividend or interest.

This may be true, but at least gold does not “charge” interest, as bankers across the world are beginning to ponder.

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

Submitted by Claire Bernish via TheAntiMedia.org,

On the same day Syrian President Bashar al-Assad claimed his fighters would retake the entire country “without hesitation,”unnamed American defense officials revealed to the Daily Beast that the same Iraqi militias who were previously fighting ISIL alongside the U.S. are now actively collaborating with Russian and Iranian forces to “crush” American-backed rebels in Aleppo. According to the report:

“At least three Shia militias involved in successful battles against ISIS in Iraq — the Badr Brigade, Kata’ib Hezbollah, and the League of the Righteous — have acknowledged taking casualties in fighting in south and southeast Aleppo province. U.S. defense officials confirmed to The Daily Beast that they believe ‘at least one’ unit of the Badr Brigade is fighting in southern Aleppo alongside other Iraqi militia groups. Those groups are backed by Russian airpower and Iranian troops — and all of whom are bolstering President Bashar al-Assad’s Syrian Arab Army.”

Telling of the complex quagmire, the report indicates the same Shia militias fighting with the U.S. to maintain its installed government in Iraq are battling against the U.S.-backed forces – including those armed by the CIA – by bolstering Russian and Iranian efforts to bring control of the Syrian city back to Assad.

Of course, Saudi Arabia recently entered the Syrian theater under the premise of fighting ISIL, though as Saudi Foreign Minister Adel al-Jubeir reiterated on Friday, according to Al-Jazeera, “Unless and until there is a change in Syria, Daesh [IS, ISIS, ISIL] will not be defeated in Syria.” Reinforcing, to a degree, the U.S. stated purpose in Syria of deposing Assad, he added,“When Assad goes, the fertile environment which Daesh operates in Syria will be removed.”

As part of a tentative agreement among the major players in the Syrian imbroglio, including the U.S., Saudi Arabia, Russia, and Iran, there will be a cessation of hostilities which was set to begin yesterday – though that arrangement excludes ISIL and Jabhat al-Nusra, and shortly after negotiations, Russian airstrikes reportedly continued in Homs in earnest.

As Phillip Smyth of the University of Maryland, who studies Shia militias, said, “It is clear Iran is routing as many fighters as possible to Syria, particularly on the Aleppo front,” reported the Daily Beast.

Though murky politics and shifting or seeming contradictory alliances persist in Syria, it’s clear the conflict is intensifying. On Thursday, Assad said such a mix of regional fighters indicates “the solution will take a long time and will incur a heavy price.”

*  *  *

Whoever "loses" in this incestuous battle, it is clear that the military-industrial complex just "won."

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

“Change” you just can’t believe…

 

 

Source: Investors.com

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

via Zero Hedge http://ift.tt/1R20hwc williambanzai7

As we documented last autumn in “Syria Showdown: Russia, Iran Rally Forces, US Rearms Rebels As ‘Promised’ Battle For Aleppo Begins,” Syria’s largest city has been among the hardest hit of the country’s urban centers over the course of the last five years.

Newsweek documented the destruction in a series of stark and profoundly indelible images in 2012, perhaps the most striking of which was this:

Recapturing the city is critical to restoring Bashar al-Assad’s grip on power.

If Aleppo is liberated, the rebellion will be all but crushed. The Alawite government would once again control the country’s urban backbone in the west and, more importantly from a big picture perspective, Iran would have scored a major victory in the effort to preserve the Shiite crescent not to mention its supply lines to Hezbollah.

Likewise, a victory at Aleppo would invalidate US claims that Vladimir Putin was destined to get Moscow into a “quagmire” in Syria and the Russians would score a major geopolitical coup by effectively replacing the US as Mid-East superpower puppet master.

As for the Gulf monarchies, the demise of the Sunni insurgency in Syria would be a bitter blow. The effort to roll back Iranian influence would be forever remembered as an abject failure and Tehran would score sectarian bragging rights over Riyadh just as international sanctions are lifted and Iran ramps up crude production.

So important is the battle for the city that Quds commander Qassem Soleimani himself supervised the initial stages of the push north from Latakia before disappearing into thin air in November only to resurface two days ago at a rally celebrating the Islamic Revolution. 

Now that the eyes of the world are on Aleppo which may well go down in history as the site where World War III began, we thought it an opportune time to bring you the following before and after images which depict what life was like in the city under the “brutal dictatorship” of Bashar al-Assad and what life is like now that the US has exported democracy to Syria.

Autocracy:

Democracy:

Autocracy:

Democracy:

Autocracy:

Democracy:

Autocracy:

Democracy:

Autocracy: 

Democracy:

“Yes we can”… destroy the entire Middle East…

h/t: @BBassem7 and @lika__333

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