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On Friday, we got confirmation of what everyone already knew: the Greek economy is still mired in recession. GDP contracted 0.6% in Q4 after shrinking 1.4% in Q3.

We also found out that Greek farmers have most assuredly not calmed down since they parked their tractors in the middle of the street blocking traffic late last month.

Why are the farmers mad, you ask? Well, they’re not particularly enamored with the idea of having their social security contributions tripled and their income tax doubled as part of PM Alexis Tsipras’ push to satisfy creditors in Brussels who, six months after the country’s third bailout program was agreed, aren’t satisfied with the pace of fiscal consolidation.

So what do you do when you’re an angry farmer from Crete hell bent on demonstrating just how frustrated you are with a government which just a little over a year ago, swept to power with promises to roll back austerity? You grab your shepherd’s crook and some tomatoes and you storm the Agriculture Ministry in Athens.

Below, find the dramatic footage of farmers gone wild.

Outside MinAgric at #farmers protest#Greece #asfalistiko http://pic.twitter.com/XFxUGHvFKV

— Savvas Karmaniolas (@SavvasKarma) February 12, 2016

MinAgric #Athens #Greece http://pic.twitter.com/Z1mIS6evI7

— Savvas Karmaniolas (@SavvasKarma) February 12, 2016

Hell hath no fury like a farmer taxed.

via Zero Hedge http://ift.tt/1V9ESCv Tyler Durden

Submitted by Patrick Buchanan via Buchanan.org,

The morning of the New Hampshire primary, Donald Trump, being interviewed on “Morning Joe,” said that he would welcome his “friend” Michael Bloomberg into the presidential race.

Which is probably the understatement of 2016.

The three-term mayor of New York and media mogul whose fortune is estimated at $39 billion, making him one of the richest men on earth, told the Financial Times on Monday he is considering a run.

Bloomberg had earlier confided he was worried about Hillary Clinton’s ability to turn back the challenge of Bernie Sanders, regards Trump’s rise with trepidation, and is appalled by the pedestrian character of the campaign rhetoric.

“I find the level of discourse and discussion distressingly banal and an insult to the voters,” said Bloomberg; the public deserves “a lot better.”

This haughty disdain calls to mind the late Adlai Stevenson. Yet, if Bloomberg runs, his electoral vote tally would likely make Adlai, by comparison, look like Richard Nixon on his 49-state romp in 1972.

Republicans should give Mayor Mike every encouragement to enter the race. For though he threatens to spend a billion dollars of his own money to buy the presidency, his name on the ballot as a third-party candidate could send the Democratic nominee straight down to Davy Jones’s locker.

With Bloomberg siphoning off millions of liberal votes, Democrats would not only lose red states they customarily write off, winning solid blue states would require a far steeper climb.

Third Party candidates have played crucial roles in presidential politics. Ex-President Theodore Roosevelt killed the re-election hopes of his successor President William Howard Taft in 1912, by running as the Bull Moose candidate and delivering the nation to Woodrow Wilson.

Strom Thurmond carried four Deep South states in 1948 and George Wallace carried five Deep South states in 1968. Both sought to throw the election into the U.S. House. Neither succeeded.

Ross Perot got 19 percent of the popular vote in 1992 and 8 percent in 1996. Though he did not carry a single state either time, as a candidate of the populist center-right, Perot peeled off a third of the votes George H. W. Bush had won in 1988 — to sink Bush in 1992.

Why would Bloomberg, who has great wealth and is willing to part with it, not be able to beat Trump, or another Republican nominee, if he plunged a billion dollars into his campaign?

Though he may be a pioneer in modern media and a man with a golden touch, Bloomberg is 74 years old this week, uncharismatic, and does not fill up a room the way the Donald does.

He lacks a common touch and is a social liberal, pro-abortion and pro-same-sex marriage.

Moreover, he is a compulsive nanny-stater who outlawed smoking in New York bars, restaurants and public places, prohibited the sale of cigarettes to anyone under 21, forbade trans-fats in restaurants, sodas larger than 16 ounces, chain restaurant menus without calorie counts, cellphones in school, non-fuel-efficient cabs, greenhouse gas emissions, and non-hurricane-proof buildings in coastal areas.

While not well-known nationally, Bloomberg is a zealot about tougher gun control laws and his candidacy would produce a deluge of contributions to the National Rifle Association. This obsession, along with his social views, would sink him in Red State America.

Nor is Bloomberg, despite three straight victories running for mayor, a great political athlete.

In his last race, as the Republican and Independent candidate, Bloomberg spent $102 million to defeat an underfunded Democrat comptroller, but managed to win only 51 percent of the vote.

If Clinton, or even Sanders, were at the top of the Democratic ticket in New York State, either would crush Bloomberg in his home town, especially with the GOP nominee, say Trump, siphoning off all of the Republican-conservative votes Bloomberg received to become mayor.

Now only would Bloomberg lose the Big Apple, his statewide vote would come mostly from the Democratic nominee, giving Republicans the best opportunity to carry the Empire State since Ronald Reagan coasted to re-election in 1984.

By spending a billion dollars, Bloomberg could blanket the nation with ads. But once Republican oppo research groups defined him for Middle America, perhaps 4 in 5 of his votes would come out of the basket upon which Democrats rely.

For example, as a Jewish-American, Bloomberg might do well in the Dade-Broward-Palm Beach County corridor, taking votes that Clinton or Sanders would need to carry Florida. Yet, where would Bloomberg get the rest of his votes to win the Sunshine State?

Clearly, Bloomberg is envious of the success of the Donald, since he descended on that escalator at Trump Towers on June 16.

The problem for Bloomberg is that, while this is the year of the outsider, with populist revolts breaking out in both parties, Sanders and Trump caught the lightning early, while he was restructuring his media empire. And, to be candid, Michael Bloomberg is no barn burner.

So all together now: “Run, Mike, Run!”

via Zero Hedge http://ift.tt/1R0a2uV Tyler Durden

In the aftermath of the BOJ’s stunning NIRP announcement in late January, virtually everyone had an opinion on what this move of sheer desperation means.

Actually scratch the “virtually” part: as we reported one week ago, none other than famous baseball slugger Jose Canseco opined when he tweeted that “Negative interest rates in Japan is blowing my mind”, rhetorically asking “Who is advising Japan? Forcing banks to lend all ¥ will not get 2% inflation. It creates loanees market with even lower rates. Dumb move” and slamming the BOJ: “Bank of Japan should call them willie wonka bonds “YOU GET NOTHING. yOU LOSE!””

A few short days later, Jose took a firm stance on JPM’s forecast that NIRP could go as low as -4.5% in Europe (as well as -3.45% in Japan and -1.3% in the US).

@zerohedge udder lunacy

— Jose Canseco (@JoseCanseco) February 10, 2016

Today, this latest and perhaps most popular entrant to financial twitter took on a topic that is even more sensitive, and divisive, to the financial arena: gold.

This is what he tweeted moments ago:

not a surprise but everyone should be in gold

— Jose Canseco (@JoseCanseco) February 12, 2016

$1500+ by Memorial dAY

— Jose Canseco (@JoseCanseco) February 12, 2016

Mock him? Sure go ahead, but with an opinion validated by such commentary…

With gold minus storage cost becoming greater than cash returns could be a long rally. what else is there, bitcoins? think about it

— Jose Canseco (@JoseCanseco) February 12, 2016

… it is clear that the famous baseball slugger has done far more homework than 90% of the anti-gold crowd.

His conclusion is one we, and incidentally JPM’s head quant Marko Kolanovic, wholeheartedly with:

Plus Psychology For Gold index growing with euro bank mess, nirP, falling oil, tanking stock markets, yellens slowdown hints.

— Jose Canseco (@JoseCanseco) February 12, 2016

Will Jose be right? And can this sport celebrity stir up “animal spirits” among the population and force a rush into physical gold ahead of NIRP’s arrival in the US?

We’ll find out, but for now, this is what Jose being right would look like.

via Zero Hedge http://ift.tt/1Qc6BOA Tyler Durden

Japanese stock markets have crashed 15% (the "most since Lehman") and USDJPY plunging (most since 1998) since Kuroda unleashed NIRP and are down 11% since QQE2 was unveiled to save the world from an absent Fed. So with NIRP and QE (and jawboning) now 'useless' for Japanese monetary policy, there is only one option left – Yentervention.

Suddenly it all stopped working..

 

As Central Banker faith falters…

 

Overnight saw some hints at this beginning to happen, as Bloomberg reports,

The BOJ made “rate-check” calls to some banks with implicit questions on whether they planned to buy more yen, Sassan Ghahramani, head of SGH Macro Advisors, wrote in a note Thursday. Checking rates is sometimes intended to send a signal to markets that intervention may be on the way.

Aso declined to comment Friday on whether authorities have already intervened.

 

Japan hadn’t bought or sold currency to sway the yen’s price since a record intervention in 2011 helped stop its advance after reaching a post-World War II record.

Japan has spent the equivalent of between $8b and $117b in the past four episodes to check undue strength in the yen. The currency gained between 2% and 9% in the three months before interventions; the yen has strengthened 9.1% in the past 90 days. The BOJ has typically come into the market around 9-11am Tokyo time.

Oct. 31-Nov. 4, 2011
Yen strengthened to an all-time high of 75.35 on the first day of intervention
Then Finance Minister Jun Azumi said on Oct. 31 he ordered intervention at 10:25am Tokyo time, saying “speculative moves” of the currency failed to reflect Japan’s fundamentals
MOF sold 9.09t yen to buy $116.3b
Yen had risen 4.5% in the three months through Sept. 30; it weakened 3.1% through the intervention and gained 0.8% through the remainder of November

 

Aug. 4, 2011
MOF sold 4.51t yen to buy $57.2b
Yen rose to 76.30 per dollar on Aug. 1, the strongest since a previous record
Three days later, Japan intervened; then Finance Minister Yoshihiko Noda confirmed intervention at around 10am Tokyo time, saying decisive action was needed against speculative and disorderly currency moves
Yen had climbed 5.8% in the three months through end of July; it fell 2.3% on Aug. 4 and strengthened 2.9% in the remainder of August

 

March 18, 2011
MOF sold 692.5b yen to buy $8.6b
Yen soared to 76.25 per dollar on March 17, what was then a record, in the aftermath of a magnitude 9 earthquake that struck Japan six days earlier
Noda confirmed that intervention was conducted at 9am Tokyo time
Other G-7 members also sold yen in joint intervention, saying the step was in response to recent movements in yen associated with tragic events in Japan, and at the request of Japanese authorities

The current surge in Yen is the largest since 1998 and suggests intervention may be overdue…

“The yen is all about risk-uncertainty, which could encourage Japanese investors to pull out of overseas assets and retreat to the safety of home,” said Jeremy Stretch, head of foreign-exchange strategy at Canadian Imperial Bank of Commerce. “Of late, it’s been a case of capital preservation rather than return. The authorities have been making plenty of noises about this unwanted strength and I see 110 as a potential line in the sand for intervention.”

The only problem is – the last 3 mini Yenterventions failed miserably to spike USDJPY…

 

And traders doubt The BoJ's ability… 

“The stronger rhetoric and speculation about intervention or further monetary policy easing will likely create some volatility in the near term, but there’s going to be a lot of interest in selling the dollar if it goes back up against the yen,” Barclays’s Shinichiro Kadota, a foreign-exchange strategist in Tokyo, said by phone. “The market’s questioning the impact of and scope for further easing.”

Which is very clear from the size of bets on a stronger Yen…

 

“For intervention to turn around dollar-yen permanently, the BOJ would also need to ease domestic monetary policy further and — more importantly — the Fed to raise rates,” Mohi-uddin said. “Until the Fed is able or willing to raise rates further this year, dollar-yen is likely to trend lower, punctuated by any intervention Tokyo undertakes.”

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

Submitted by Stefan Gleason via Money Metals Exchange,

"The last duty of a central banker is to tell the public the truth."
– Alan Blinder, former Federal Reserve Board Vice Chairman

The Federal Reserve Board finds itself back in a quandary of its own making. When Fed chair Janet Yellen pushed through an interest rate hike this past December, she confidently cited an "economy performing well and expected to continue to do so."

The Fed set the stage for more rate hikes in 2016. But something went awry along the way – namely, the Fed's upbeat forecast.

Official pronouncements of optimism don't square with the economic realities now unfolding. Since the Fed's rate hike, warning signs of a looming recession have rapidly accumulated. Industrial production is slumping. Global bulk shipping rates are in the dumps. The number of people without full-time jobs is growing. Corporate earnings are weakening. The junk bond market is melting down, and the stock market appears to be following suit.

Most of these warning signs were flashing back when the Fed decided to hike. The stock market was still positively diverging from economic indicators, but now that the Dow Jones Industrials too is rolling over, the Fed is back-tracking on rate hikes.

The Fed's next move could be to cut rather than raise rates – perhaps even pushing them into negative territory as central banks in Europe and Japan have done.

The Fed Has a Remarkable Track Record of Failed Forecasts

Federal Reserve policymakers can be counted on to react to market developments, because that's all they can do. Time and again, they have shown that their forecasting models don't work. The Fed doesn't actually prevent financial crises from occurring. It just comes in after the fact to try to clean up the mess its loose money policies helped create – the 2008 financial crisis being the latest example.

Fed officials won't admit publicly that they're just making it up as they go. But that's the reality. As James Rickards explained in an interview with Mike Gleason, "I've spoken to Fed governors, I've spoken to Regional Reserve presidents, I've spoken to a lot of senior officials at the Federal Reserve, and insiders there. They don't know what they're doing. They won't say it publicly but they do say it privately."

If Fed officials admitted that they couldn't outsmart the market or forecast the economy, that they don't know anything beyond what's in latest edition of the Wall Street Journal, then they'd be admitting there is no reason for them to be in charge of setting interest rates or managing the money supply.

The Fed's Rarely Admitted Mission Is Psychological Manipulation

But as alluded by the unguarded comment of Alan Blinder quoted above, incompetence is not the only problem with the Federal Reserve System. Although that would be bad enough.

As much as anything, the Fed is a disinformation and propaganda machine.

A primary goal is to manipulate the public and the markets, and spewing false information is justified by a larger objective. It's all part of "managing inflation expectations" and jawboning to prop up the market. Central bankers know that perception can become reality, at least in the short run.

Of course, the whole public justification for the creation of the Federal Reserve system in 1913 was that enlightened policymakers would tame the animal spirits that drove economic booms and busts. What a farce that turned out to be.

The Fed went on to give us the Great Depression, a great stagflation in the 1970s, one asset bubble after another (commodities, stocks, housing, etc.), after another. The central bank always reinflates the system rather than allow deflation to cleanse it out completely. So the bubbles rotate from one asset class to another in perpetuity. Before the creation of the Fed, major asset bubbles were a once in a generation event. Now they are the norm.

The Fed Has Unequivocally Failed in Maintaining "Price Stability"

One of the Federal Reserve's core mandates is "price stability." Yet the Fed's pursuit of stable price levels has translated into a 97% loss in the purchasing power of the U.S. dollar since 1913.

The decline in the value of the dollar accelerated beginning in 1971 – as did the frequency and severity of asset bubbles. That's no coincidence. In 1971, President Richard Nixon revoked international gold redeemability, rendering the U.S. dollar a pure fiat currency.

"We had a gold standard from the 1790s right through the 1970s, a hundred and eighty years, and it worked very well. We had the most phenomenal growth of any country in the history of the world," said Steve Forbes in a recent Money Metals podcast. "Since then we've had more financial crises, more dangerous banking crises, lower economic growth, and we see the stagnation that we have today."

Negative Interest Rates and Helicopter Money Drops Are Next

How will Fed officials respond to the present stagnation if it morphs into something worse? Probably as before, with the only tool left in their toolkit: the printing press.

If 0% interest rates prove ineffectual, then they can push rates into negative territory. If negative rates don't nominally lift financial markets and economic indicators, they can always try helicopter drops (or the digital equivalent).

Or they could try the sound money approach.

They could re-link the currency to gold, allow the value of the dollar hold a constant purchasing power over time, and stand aside while markets determine interest rates and asset valuations. The major hurdle to transitioning toward sound money within the Federal Reserve System is that central bankers would have to admit markets know better than they do.

It's not in the nature or the institutional interests of people like Janet Yellen – an Obama-appointed leftist – to announce that their services aren't needed. So the path forward for monetary reformers may be to work outside the system.

Toward that end, we are helping to expose the Fed to the general public. We aim to educate the people about precious metals as real, alternative money. The more individuals who adopt their own personal gold standards, the less relevant the Fed will become.

via Zero Hedge http://ift.tt/1Qc6BOy Tyler Durden

For those who follow the monthly consumer credit report released by the Fed there was nothing surprising in today’s release of the latest Household Debt and Credit Report by the New York Fed. It reports that total household debt rose to $12.12 trillion in Q4, up from $11.83 trillion a year ago…

 

…mostly as a result of soaring student and auto debt, both trends we have observed on various occasions in the recent and not so recent past.

There is more in the report (a notable discussion focuses on why housing credit has stagnated as much as it has with the Fed seemingly unable to grasp that the bulk of housing purchases in the US in recent years have been by offshore oligarchs using all cash transactions to park money in US luxury housing), but what is the topic of this post is another finding by the Fed, namely that Americans in their 50s, 60s and 70s – the Baby Boom generation – are carrying unprecedented amounts of debt, a shift which according to the WSJ “reflects both the aging of the baby boomer generation and their greater likelihood of retaining mortgage, auto and student debt at much later ages than previous generations.”

Debt held by Americans aged 50-80 increased by 59% from 2003 to 2015 https://t.co/EVx3ojT9OH http://pic.twitter.com/vqHUSiIwmE

— New York Fed News (@NYFed_News) February 12, 2016

Incidentally, those debt “retention” are entirely thanks to the Fed which has only itself to thank for: with deposits yielding nothing, an entire generation of Americans 50 and older has been fored to resort increasingly to more and more debt, until this happens:

What this chart shows is that while per capita debt at age 30 fell by 12%; per capita debt at age 65 grew by 48%!

Worse, as the chart below show, while aggregate debt of Gen-Xers has admirably declined by 12% in the past 12 years, the aggregate debt of the average Baby Boomer has soared by an unprecedented 169%!

The biggest shocker: an 886% increase in student loan debt of Americans aged 65 and older.

Some more details from the WSJ: the average 65-year-old borrower has 47% more mortgage debt and 29% more auto debt than 65-year-olds had in 2003.

Some more observations:

Just over a decade ago, student debt was unheard of among 65-year-olds. Today it is a growing debt category, though it remains smaller for them than autos, credit cards and mortgages. On top of that, there are far more people in this age group than a decade ago.

 

The result: U.S. household debt is vastly different than it was before the financial crisis, when many younger households had taken on large debts they could no longer afford when the bottom fell out of the economy.

 

The shift represents a “reallocation of debt from young [people], with historically weak repayment, to retirement-aged consumers, with historically strong repayment,” according to New York Fed economist Meta Brown in a presentation of the findings.

Why is this a problem in a world in which cash flow is increasingly scarce? “Older borrowers have historically been less likely to default on loans and have typically been successful at shrinking their debt balances. But greater borrowing among this age group could become alarming if evidence mounted that large numbers of people were entering retirement with debts they couldn’t manage. So far, that doesn’t appear to be the case. Most of the households with debt also have higher credit scores and more assets than in the past.”

Assets mostly in the form of equities and bonds, however, those assets will need to be liquidated one way or another to repay what is a record debt load as the Baby Boomer generation grows even old and ever more in debt.

For now, however, the debt repayment cliff has not been hit as banks allow creditors to roll over existing obligations. This means that while debt among the elderly is at record levels, the percentage of this debt that is in some stage of delinquency has been steadily dropping. The NY Fed founds that only 2.2% of mortgage debt was in delinquency, the lowest since early 2007. Credit card delinquencies also declined, while auto loan and student loan delinquencies were unchanged.

“The household sector looks much better positioned today than in 2008 to absorb shocks and continue to contribute to the economic expansion,” said New York Fed President William Dudley in prepared remarks.

Actually, the most debt-sensitive part of the household sector, the Baby Boomers, has never been more vulnerable, and only low rates have allowed this generation to ignore the elephant in the room; with the Fed now hiking rates, this will change drastically in the coming years.

There was some good news in the report: by contrast the overall debt balances of most young borrowers haven’t grown or have declined. The average 30-year-old borrower has nearly three times as much student debt as in 2003. But these borrowers have so much less home, credit card and auto debt that their overall debt balances are lower.

Which also explains why not only are Millennials locked out of purchasing homes, but have become the “renting generation”, one where everything is based on the principle of a “sharing economy”, where little to no actual asset purchases are required, and where a la carte renting of goods and services for instant needs has become the new norm.

Indeed, as NY Fed economist Meta Brown admits, this shift for young borrowers could have “consequences in terms of both foregone economic growth and young consumers’ welfare.” Sadly, with few well-paying jobs for Millennials available, and with little ability to build up an asset or savings base, these trends will continue until they too hit a plateau of unsustainability.

* * *

The full NY Fed report is below (pdf link)

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