The complete train wreck that is Venezuela continues to find ways to one-up itself. Fresh off of the announcement that every Friday in the months of April and May would be designated as non-working holiday’s in order to save electricity, the Socialist utopia is now simply cutting it off for four hours a day.

As Bloomberg reports, Venezuela will be implementing electricity rationing that will cut supplies to every home in the country (surely not President Maduro’s) for four hours a day. After all, it is every citizens patriotic duty to partake in these energy saving measures (it is also their responsibility to deal with the effects of putting Maduro in office).

“We ask for the cooperation of all Venezuelans. It’s time to be patriotic and united to combat and minimize these climatic effects.” Electricity Minister Luis Motta Dominguez said

The measures won’t solve anything of course, and as analyst Miguel Lara points out “with some parts of the country already without electricity for six to eight hours a day, this only makes official what they had already been doing.”

As we reported earlier, the electricity issues stem from the water content (or lack thereof) of Venezuela’s Guri Dam, which supplies as much as 75% of electricity consumed in Caracas, and 40% nationwide. Water levels are at their lowest since 2003, and are 3 meters away from starting the collapse of the national electric system.

Out of all the things currently going wrong in Venezuela (hyperinflation, being bankrupt, having no food, having no electricity, etc), perhaps the most pressing matter is how the country will respond to the looming beer shortage.

via http://ift.tt/1SA89JC Tyler Durden

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

Part 3 of a series on Hamilton: “Hamilton’s Good for the Ten-Spot” and “Alexander Hamilton: Defender of Property Rights.”

 

If nothing else, Treasury Secretary Jack Lew’s decision to retain Alexander Hamilton’s image on the ten dollar bill shows that the Secretary can read and react to opinion polls. Hamilton was not only our 1st Treasury Secretary, but a distinguished one.

Just how great was he? A recent scholarly book by Robert E. Wright and David J. Cowen, Financial Founding Fathers: The Men Who Made America Rich, begins its pantheon of greats with a chapter on Alexander Hamilton. It is aptly titled “The Creator.”

After the Constitution was ratified and George Washington was elected President, the new federal government lacked credibility. Public finances hung like a threatening cloud over the government. Recall that paper money and debt were innovations of the colonial era, and that, once the Revolutionary War began, Americans used these innovations to the maximum. As a result, the United States was born in a sea of debt. A majority of the public favored a debt default. Alexander Hamilton, acting as Washington’s Secretary of the Treasury, was firmly against default. As a matter of principle, he argued that the sanctity of contracts was the foundation of all morality. And as a practical matter, Hamilton argued that good government depends on its ability to fulfill its promises.

Hamilton won the argument and set about digging the country out of its financial debacle. Among other things, Hamilton was – what would today be called – a first-class financial engineer. He established a federal sinking fund to finance the Revolutionary War debt. He also engineered a large debt swap in which the debts of individual states were assumed by the newly created federal government. By August 1791, federal bonds sold above par in Europe, and by 1795, all foreign debts had been paid off. Hamilton’s solution for America’s debt problem provided the country with a credibility and confidence shock.

So, for Hamilton, secure property rights and the sanctity of contracts were front and center.

via http://ift.tt/213ANmq Steve H. Hanke

Just as US equity futures were about to roll over following some very substantial misses yesterday by the likes of Google, Microsoft, Starbucks and a plunge in Visa shares, overnight who came to the markets’ rescue but the BOJ, when shortly after midnight Bloomberg reported that “according to people familiar with talks at the BOJ” which is the traditional keyword for a BOJ source testing out the market’s reaction, Japan’s central bank may “help” local banks to lend by offering a negative rate on some loans. This happens just months after the BOJ unleashed negative rates thereby “penalizing” banks who hold too much excess reserves. So just four months after the BOJ went nuclear on its own banks, now it has had a 180 degree change of heart.

The result was immediate: the Yen tumbled, USDJPY spiked and the Nikkei soared by 200 points in the blink of an eye.

More from BBG:

Such a discussion could happen in conjunction with any decision to make a deeper cut to the current negative rate on reserves, said the people, who asked not to be named as the matter is private. The BOJ’s Stimulating Bank Lending Facility, which now offers loans at zero percent interest, would be the most likely vehicle for this option, they said.

 

The officials said that adding this to the central bank’s arsenal could have a positive impact on the economy, but would also raise questions about giving subsidies to commercial lenders. Financial institutions, who already feel penalized by the existing negative rate, could face demands from borrowers to cut their lending margins further, said the people.

This coupled with rising speculation that the BOJ may announce that it will double the pace of its ETF purchases next week, was enough to send the USDJPY soaring by more than 130 pips, as right after the Bloomberg “market trial balloon” was released, USDJPY spike to 110, at which point it took out all the stops and is now trading about 110.50. Japanese bank shares promptly rallied on optimism the measure could be adopted, with the Nikkei closing up 1.2% on nothing but another rumor of central bank intervention.

However, the BOJ’s trial balloon has not been enough to push European (or global) stocks notably higher and in Europe stocks fell led by carmakers as emission probes loomed over Daimler AG and PSA Group, while Asian equities slid from a four-month high.

Daimler fell 5.3 percent, dragging a gauge of automakers to the biggest drop of the 19 industry groups on the gauge. The Mercedes-Benz maker was asked by the U.S. Department of Justice to investigate the certification process of its cars. It said a U.S. class action lawsuit alleging some of its cars violated emissions standards is “baseless.” Meanwhile PSA Peugeot Citroen fell 3.3 percent after the group’s premises in France were searched by government fraud investigators as part of a probe into vehicle emissions.

Raw materials fell as steel futures slumped in China after exchanges announced measures to cool speculation and Goldman Sachs Group Inc. cut price outlooks metals and crops. “Our expectation is the oversupply in the iron ore market will return,” Christian Lelong, an analyst at Goldman Sachs, said on Thursday. “It’s going to be very hard to have strong enough demand growth in the Chinese steel sector to keep things in balance.”

Initially in the overnight session, commodities trimmed this week’s gains in steel reinforcement bars to soy beans and cotton that had stoked the outlook for inflation around the world. Carmakers are under renewed scrutiny after Volkswagen AG cheated on emissions tests. 

But the biggest driver was the major earnings disappointment out of Google and Microsoft on Thursday which dimmed the outlook
for earnings after results from American companies’ suggesting that the disappointing earnings season was not going to any “better” than had been earlier expected.

Caterpillar Inc., McDonald’s Corp., General Electric Co. and American Airlines Group Inc. are scheduled to report earnings on Friday. Analysts are projecting a 9.5 percent decline in first-quarter profit for S&P 500 members, compared with forecasts for flat growth at the start of the year.

Global market summary

• S&P 500 futures little changed at 2081
• Stoxx 600 down 0.7% to 347
• FTSE 100 down 1% to 6321
• DAX down 0.9% to 10339
• German 10Yr yield down 2bps to 0.22%
• Italian 10Yr yield down 1bp to 1.45%
• Spanish 10Yr yield down 2bps to 1.58%
• S&P GSCI Index down 0.2% to 347.6
• MSCI Asia Pacific down 0.4% to 134
• Nikkei 225 up 1.2% to 17572
• Hang Seng down 0.7% to 21467
• Shanghai Composite up 0.2% to 2959
• S&P/ASX 200 down 0.7% to 5236
• US 10-yr yield down less than 1bp to 1.85%
• Dollar Index up 0.25% to 94.84
• WTI Crude futures up 0.4% to $43.35
• Brent Futures up 0.2% to $44.61
• Gold spot down 0.2% to $1,246
• Silver spot up 0.9% to $17.15

Global Top News

• BOJ Officials Said to Eye Possible Negative Rate on Loan Program: BOJ may consider offering a negative rate on some loans
• Schlumberger Cuts More Jobs as CEO Sees Industry Cash Crisis: net income declined to $501 million from $975 million year ago
• Daimler Probes Diesel Emissions as Quarterly Profit Slumps: carmaker probes emissions at request of U.S. authorities
• Blackstone Said to Weigh Buyout of Canada’s Concordia Healthcare: Other bidders may also be interested in company
• Alphabet Profit and Sales Hit Speed Bump on Mobile Costs Traffic Acquisition Costs rise as more searches go mobile
• Microsoft’s Turnaround Skids as Software Sales Lag Behind Cloud: Nadella’s transition to cloud, subscriptions to take time
• Obama Praises EU in U.K. Op-Ed Aimed at Swaying Brexit Vote: U.S. president accused of hypocrisy by ‘Leave’ campaigners
• Starbucks Sales Trail Estimates as Growth Slows in Americas: co. reaffirms annual sales and store-addition targets
• Visa Alters Terms of Europe Deal and Warns of Delay; Shares Fall: purchase may not be completed until after June
• Valeant Is Seeking Perrigo’s Papa as New CEO, WSJ Reports: co. had been aiming to announce move as early as next week: WSJ
• Apple Says ITunes Movies, Book Services Closed Down in China: closings ordered by Chinese regulator, New York Times reports
• SunEdison Seeking Equity Partners for Operations in India: SunEdison won projects in India with record-low bids
• SecureWorks Prices IPO of 8 Mln Shares at $14.00/Shr: Shares to begin trading on NASDAQ today
• Uber Drivers’ $100 Million Deal May Set Pace for Gig Economy: biggest ride-share firm avoids risk of costly trial verdict; Companies reporting earnings today include GE, Honeywell, Caterpillar, McDonald’s

Looking at regional markets, Asia traded with a sombre tone following weak earnings releases in the US, coupled with profit taking seen in the region. Nikkei 225 (+1.2%) initially fell from 2-month highs as participants booked profits while large exporters have been pressured with Sony and Toshiba reeling on impairment losses and Mitsubishi Motors shares crashed to a record low on the fuel efficiency scandal, however the index rallied in late trade after reports the BoJ are said to be considering negative rates for its lending programs. ASX 200 (-0.7%) and Shanghai Comp (+0.2%) are lower amid weakness across the commodities complex, although the region’s bourses briefly attempted a recovery alongside a rebound in oil, which re-approaches USD 44/bbl and after China conducted a large net weekly liquidity injection of CNY 680b1n. 10yr JGBs are marginally higher amid cautious sentiment in Asia and the BoJ also in the market for around JPY 1.2trl in government debt, while yields in the super-long end were pressured with the 40yr yields printing fresh record lows.

Asian Top News

• Japan Stocks Jump on Report BOJ Considering Support for Banks: yen reverses Thursday’s gain to weaken after the report
• Sony Delays Annual Forecasts to Assess Earthquake Fallout: co. will disclose its outlook for the year in May instead
• As Global Stocks Rally, China’s Markets Send More Ominous Signal: Shanghai Composite is world’s worst performer this week
• From 1MDB Probe, Singapore Charges Former Banker With Laundering: Formal charges among the first to stem from 1MDB probe
• Singapore Raids Brokers; Exchange Reports Irregularities: MAS and CAD probe possible breaches of securities law
• Rajan Seen Getting Extension at India Central Bank in Survey: Rajan’s 3-yr term set to expire early Sept.
• Apple Says ITunes Movies, Book Services Closed Down in China: Closings ordered by Chinese regulator, New York Times reports

European equities have begun the final session of the week on the back foot, with major indices in the red. This follows on from the downside seen across the Atlantic in the US, while equity specific news did little to lift sentiment, with high profile Daimler among the worst performers this morning and Peugeot and Volkswagen also lower as the emissions saga continues to suffocate Co. shares. Despite the downside in equities, Bunds remain relatively unchanged on the day as the German benchmark continues to hover around the 162.50 level after the volatility seen yesterday due to the ECB meeting.

“What we’re seeing today is a bit of profit-taking on the gains we have seen in the past couple of weeks,” said Michael Hewson, a London-based market analyst at CMC Markets Plc. “I’m not convinced we will see it degenerate into a much deeper sell-off in the short to medium term. A lot of pressure that we are seeing in the auto sector is a result of what’s come out of Daimler this morning.”

We certainly wont see it degenerate: after all any time the market turns red, a central bank pops up.

European Top News

• Lloyds Said to Mull Deeper Job Cuts to Combat Low Interest Rates: co. could accelerate program or give fresh plan in summer
• ECB Independence Defended by Policy Makers After German Attacks: Draghi says blaming policy weakens its effectiveness
• Greece Eyes Path to Lifeline as Fiscal Resurrection in Doubt: finance chiefs gather in Amsterdam to assess bailout progress
• Volvo First-Quarter Earnings Fall on North America Truck Market: Volvo’s first-quarter operating profit fell 3%
• Credit Suisse Said to Study Novel Bond Sale to Offload Bank Risk: bank seeking to reduce risk from rogue trading, cybercrime

In currencies, the possibility of another negative interest-rate in Japan weakened the yen, which slumped 0.9 percent versus the dollar. The pound headed for its second weekly gain versus both the dollar and the euro as recent polls suggested a stronger chance of the U.K. voting to remain in the European Union in a June referendum. U.S. President Barack Obama weighed in with an op-ed praising the EU.

The lead driver has been USD/JPY. Gains have been largely based on the JPY perspective, where the run up to the BoJ meeting next week has been given an added ‘fillip’ as the central bank is said to be considering applying negative rates to its institutional lending program . USD/JPY rallied from sub 110.00 to 110.75, but in the options market, there has been strike buying for much higher levels.

The MSCI Emerging Markets Currency Index fell 0.4 percent, cutting its weekly gain to 0.4 percent. South Korea’s won led declines, losing 0.9 percent followed by a 0.5 percent drop in the Malaysian ringgit. Russia’s ruble rebounded 1.3 percent, after tumbling on Thursday as oil slid. For the week, the Colombian peso climbed 1.9 percent and South Africa’s rand increased 1.4 percent.

In commodities, oil prices have held on to the gains seen yesterday as investor sentiment remains at high levels, with a strong resistance level at USD 44.00/bbl. Gold sold off heavily after reaching the USD 1270/oz level after strength in the USD dampened sentiment. Elsewhere, copper prices were lower alongside yesterday’s commodity weakness, but are still on track for its best week in over a month, while Dalian iron ore continued on its recent ascent to print its highest level since September 2014.

On the economic calendar, the lone release of note will be the flash April manufacturing PMI print. Away from the data it’s all about earnings with a number of key reports due out. In total 11 S&P 500 corporates are scheduled to release their latest quarterlies including American Airlines, McDonald’s, General Electric and Caterpillar. Keep an eye on the latter in particular given its gauge as an indicator of global demand.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

• European equities trade lower as further emission scandals hamper Auto names and the FTSE falls victim to losses in materials names
• JPY is the main mover in FX markets after BoJ source reports suggesting the central bank will add negative rates to its institutional loan programme
• Looking ahead, highlights include US manufacturing PMI and Canadian CPI as well as comments from ECB’s Constancio and Mersch
• Treasuries mostly steady in overnight trading, European and Asian equity markets lower and oil little changed; economic data today offers U.S. manufacturing PMI.
• Chinese speculators have a new obsession: the commodities market. Trading in futures on everything from steel reinforcement bars and hot-rolled coils to cotton and polyvinyl chloride has soared this week, prompting exchanges to boost fees or issue warnings to investors
• China’s benchmark money-market rate climbed the most since June, reflecting tight cash conditions, even as the central bank injected the most funds in almost three months
• Having adopted a negative interest rate on some excess reserves to penalize financial institutions for leaving money idle, the Bank of Japan may consider helping them lend by offering a negative rate on some loans
• Policy makers rallied to defend the European Central Bank’s independence a day after President Mario Draghi hit back at German critics of his monetary strategy as German discontent over the ECB’s ultra-low interest rates erupted this month
• Lloyds Banking Group Plc is considering deeper cuts, beyond its target to eliminate 9,000 jobs by the end of next year, as the Bank of England keeps interest rates at a record low, hurting earnings
• Credit Suisse, seeking to free up capital while immersed in a costly overhaul, is pitching a plan to farm out some of its risk from potential losses on events like rogue trading and cybercrime, people with knowledge of the matter said
• President Barack Obama intervened in Britain’s increasingly bitter Brexit debate Friday, drawing allegations of hypocrisy from lawmakers campaigning for the U.K. to leave the European Union
• Greece faces a new budget confrontation with its international creditors amid fresh German warnings that its long-term success is far from assured and the International Monetary Fund raising questions about the latest economic data
• Representatives of more than 150 nations are due to gather in New York on Friday to sign the Paris climate accord which calls for voluntary reductions of fossil-fuel emissions in hopes of limiting global warming
• Sovereign 10Y bond yields mixed; European, Asian equity markets mostly lower; U.S. equity-index futures mixed. WTI crude oil, metals mostly higher

US Event Calendar

• 9:45am: Markit US Manufacturing PMI, April P, est. 52 (prior 51.5)

DB’s Jim Reid concludes the overnight wrap

Turning to markets this morning, it’s looking like the bulk of bourses in Asia are set to end the week softer. The Hang Seng (-0.95%) has seen the steepest fall this morning, while the Shanghai Comp (-0.59%), Kospi (-0.47%) and ASX (-0.42%) are all in the red and following the lead from the US yesterday. The Nikkei (+0.91%) has quickly more than reversed losses in the last 20 minutes or so with Bloomberg headlines coming through suggesting that the BoJ is to possibly support banks. Oil has recouped about half of yesterday’s decline, while base metals are a little more mixed. Iron ore futures are also up, while yesterday we saw the commodity rally another 9%, taking the WTD gain to nearly 21% with the commodity trading now above $70/tn and to the highest since January last year.
The early data this morning meanwhile was out of Japan where the flash manufacturing PMI for April was reported as declining a disappointing 1.1pts to 48.0 (vs. 49.5 expected). As we’ll see in the day ahead the other global flash PMIs are today’s highlight. In China the MNI business indicator for this month was reported as rising 0.6pts to 50.5, the first reading above 50 since January.
US equity index futures are also in the red this morning which is partly reflecting some earnings reports out after the close last night. Google’s parent company Alphabet posted earnings well below expectations last night (EPS of $7.50 vs. $7.96 expected) after a big fall in online advertising (or cost per click). It’s worth noting that unlike the banks, street earnings expectations for Alphabet have been relatively consistent all year. Meanwhile Microsoft also came out with slightly disappointing earnings of its own, marginally missing analyst expectations. The end result was for Alphabet shares to trade as much as 7% lower in extended trading, while Microsoft slid 5% also after the closing bell.

Prior to this markets had also reacted negatively to Verizon’s latest quarterly report which weighed on the rest of the telecoms sector. Despite earnings matching expectations for Q1, it was the weak read-through to the next quarter as a result of the ongoing worker strike. We are starting to see critical mass in earnings season now with 119 S&P 500 companies having reported. The early going is positive with an impressive 82% exceeding earnings expectations and 59% exceeding revenue estimates. As we’ve highlighted though the benchmark is clearly a lot lower for this reporting period having seen expectations revised down in recent weeks. We’ll be taking a closer look at this trend next week following some of the bigger reports today.

With regards to the macro, all in all yesterday’s economic data was a bit of a mixed bag. On the positive side, the latest initial jobless claims print showed claims fell another 6k last week to 247k (vs. 265k expected) and marking a new fresh low since 1973. It’s hard to imagine anything other than a positive read-through to the April payrolls number. On the flipside, the Philly Fed manufacturing survey was disappointing after falling 14pts to -1.6 (vs. +9.0 expected). That puts the index back near where it was in January and February this year after last month’s spike higher. Meanwhile the Conference Board’s leading indicator rose slightly less than expected last month at +0.2% mom (vs. +0.4% expected). Finally the FHFA house price index printed in line for February at +0.4% mom.

Over in Europe and away from the ECB focus, retail sales data out of the UK disappointed in March. Excluding auto fuel, sales were down a sharper than expected -1.6% mom (vs. -0.3% expected) while including fuel sales were also down heavily (-1.3% mom vs. -0.1% expected). Meanwhile, in the afternoon we saw a modest improvement in the Euro area consumer confidence reading to -9.3 for this month, an improvement of 0.4pts.

Looking at the day ahead, this morning in Europe the big focus will be on the release of the flash April manufacturing, services and composite PMI’s for the Euro area, Germany and France which are expected to point towards a very modest improvement. Over in the US this afternoon the lone release of note will be the flash April manufacturing PMI print. Away from the data it’s all about earnings with a number of key reports due out. In total 11 S&P 500 corporates are scheduled to release their latest quarterlies including American Airlines, McDonald’s, General Electric and Caterpillar. Keep an eye on the latter in particular given its gauge as an indicator of global demand.

via http://ift.tt/1VpoXTY Tyler Durden

 

 

 

Craig Hemke: Silver & Gold – DB Turns State’s Evidence, The Flood Gates Are Now Open!

Posted with permission and written by Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)

 

 

The tinfoil hatters have once again prevailed. What has been called theory turns to fact, once again. It seems the people, citizen journalist, market analyst and financial advisors, that actually do the necessary research and present an alternative view are being vindicated on an almost daily basis. All of the naysayers will now have to put down the kool-aid and take another look at what is being reported on the internet. While there are equal amounts of garbage to offset the truly great information, isn’t it the same with mainstream media? Is there any difference in what we see on TeeVee or hear on the radio – equal parts garbage balanced with great information?

With the revelation of Duetsche Bank (DB) admitting, in a court of law, their bank has been manipulating both silver and gold markets for several years. This is one of the biggest stories of our life time and the mainstream media is completely mute on this subject. It goes right to the heart of the opening paragraph. Why would the mainstream media be completely silent on this topic?

Craig Hemke, TFMetals Report, has been following, analyzing and reporting on these rigged markets for close to a decade. His tireless efforts and painstaking determination has shown time and again the blatant criminality in the precious metals markets. While he has learned their movements, and put this information to work for himself, and the Turdites, to turn a handsome profit, it does not take away from the criminality.

Oh, and as you will hear, this was recorded on Friday April 15, 2016 Craig said the “flood gate of lawsuits was now open” for class-action lawsuits and on Saturday April 16, 2016 it was confirmed with not one, but two different lawsuits. You think these law firms have been waiting for this to happen or were they able to get everything together in less than 24 hours?

Billion Dollar Lawsuits Filed Following Deutsche Bank’s Admission Of Gold, Silver Rigging

Overnight, two class action lawsuits seeking $1 billion in damages on behalf of Canadian gold and silver investors were launched in the Ontario Superior Court of Justice.

 

I spoke with Craig about the situation with DB and the implications for the markets and our world. 

 

 

 

 

Please email with any questions about this article or precious metals HERE

 

 

Craig Hemke: Silver & Gold – DB Turns State’s Evidence, The Flood Gates Are Now Open!

Posted with permission and written by Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)

 

 

Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.

 

 

via http://ift.tt/1WgRqKK Sprott Money

You know the British establishment is in full panic mode when not only do they allow President Obama to visit the nation just a month after throwing Cameron “distracted by other things” and his European neighbors under the bus over the collapse of Libya, but, despite 100 members of Parliament signing a letter telling Obama “not to interfere” with Britain’s domestic affairs, The Telegraph prints an Op-Ed in which the lame-duck president lords it over the British citizenry with a veiled threat that should they “his friends” leave Europe, the “special relationship” could be in jeopardy as “now is a time for friends and allies to stick together.”

Just a month ago, Time.com noted that almost 70 years to the day since Winston Churchill immortalized the term in his historic ‘Sinews of Peace’ address, the “special relationship” between the U.K. and U.S. is looking strained once again.

President Barack Obama threw the diplomatic equivalent of shade at British Prime Minister David Cameron in an interview in The Atlantic published this week. In his conversation with Jeffrey Goldberg, Obama laid the blame for the collapse of Libya in the aftermath of dictator Muammar Gaddafi’s downfall primarily at Europe’s door, saying he had expected his allies to do more to stabilize the situation. Cameron, he said, was “distracted by a range of other things.”

 

The White House hastily put out a statement pronouncing the U.S-U.K. relationship just as special as it had ever been, but the damage was done. The British chattering classes wailed and gnashed their teeth, as they are wont to do whenever the transatlantic bond is called into question.

So now, a month later, on his way back from The Middle-East, President Obama’s apology tour stopped off in Britain today (accompanied by the Op-Ed below) despite more than 100 members of Parliament signing a letter telling Obama “not to interfere” with Britain’s domestic affairs…

The letter states: “With so much at stake, it is imperative that the question of exiting the European Union is not one answered by foreign politicians or outside interests, but rather by the British people who must ultimately live with change or the status quo.

 

The British politicians declare: “issues of national sovereignty must be decided exclusively by the people of the United Kingdom”.

 

They state: “even a passive diplomatic recommendation in the matter of our national decision will receive the opposite of the intended effect.”

 

“The referendum vote is an act of democracy in its most direct form, and the question of whether or not to leave the EU is a rare political topic that is not owned by any one political party. This is a chance for the British people to choose the path of their country. Interfering in our debate over national sovereignty would be an unfortunate milestone at the end of your term as President.”

Furthemore, almost 35,000 Brits have signed a petition to prevent Obama from speaking in Westminster on the Referendum:

And even Obama admitted:

“I realize that there’s been considerable speculation — and some controversy — about the timing of my visit. And I confess: I do want to wish Her Majesty a happy birthday in person.

 

But also I understand that there’s a spirited campaign under way here. My country is going through much the same. And ultimately, the question of whether or not the UK remains a part of the EU is a matter for British voters to decide for yourselves.”

But still he had to say his piece… And so here it is, in all its glory, via The Telegraph, with a few ZeroHedge-ian annotations (in patriotic blood red)to help the casual reader chew through it all…

In 1939, President Franklin D Roosevelt offered a toast to King George VI in the White House. “I am persuaded that the greatest single contribution our two countries have been enabled to make to civilisation, and to the welfare of peoples throughout the world,” he said, “is the example we have jointly set by our manner of conducting relations between our two nations.” [ZH: Indeed The US and Britain have achieved a lot together… but what has that got to do with us being part of EU?]

 

Nearly 80 years later, the United Kingdom remains a friend and ally to the United States like no other. Our special relationship was forged as we spilt blood together on the battlefield. [ZH: So we are blood brothers – Brits and Yanks – but if The Brits leave The EU, then what?]It was fortified as we built and sustained the architecture for advancing stability and prosperity in Europe, and our democratic values around the globe. From the ashes of war, those who came before us had the foresight to create the international institutions and initiatives to sustain a prosperous peace: the United Nations and Nato; Bretton Woods, the Marshall Plan, and the European Union. Their efforts provided a foundation for democracy, open markets, and the rule of law, while underwriting more than seven decades of relative peace and prosperity in Europe.

 

Today, we face tests to this order – terrorism and aggression; migration and economic headwinds [ZH: Indeed, all largely things that either emanated from US actions or from European ignorance]– challenges that can only be met if the United States and the United Kingdom can rely on one another, on our special relationship, and on the partnerships that lead to progress.

 

During my visit to London, Prime Minister Cameron and I will take on the full array of these challenges. We must be resolute and adaptive in our efforts to prevent terrorist attacks against our people, and to continue the progress we are making to roll back the threat posed by Islamic State (Isil) until it is destroyed. We must work to resolve political conflicts in the Middle East – from Yemen to Syria to Libya – so that there is a prospect for increased stability. We must continue to invest in Nato – so that we can meet our overseas commitments from Afghanistan to the Aegean, and reassure allies who are rightly concerned about Russian aggression. [ZH: a ha – so perhaps just a little concern that one crack in the ‘Union’ of Europe and the whole proxy war via NATO argument blows up in America’s neocon face?]And we must continue to promote global growth, so that our young people can achieve greater opportunity and prosperity. [ZH: yeah, that makes sense because all the actions of these nations combined governments and unelected money-fixers has led to dismal living conditions for much of Europe’s youth, devaluation of their currency – and thus living standards, and in some cases death.]

 

…

 

That said, when President Roosevelt toasted to our special relationship that night, he also remarked that we are friends who have no fear of each other. So I will say, with the candour of a friend, that the outcome of your decision is a matter of deep interest to the United States. The tens of thousands of Americans who rest in Europe’s cemeteries are a silent testament to just how intertwined our prosperity and security truly are. [ZH: Can’t help but feel like you just played the “we died for you, you ungratful bastards” card] And the path you choose now will echo in the prospects of today’s generation of Americans as well.

 

As citizens of the United Kingdom take stock of their relationship with the EU, you should be proud that the EU has helped spread British values and practices – democracy, the rule of law, open markets [ZH: Seriously – where to start – democracy – aside from The EU’s clear efforts to counter any sovereign’s actual self-determination, rule of law – ask the Greeks or the Germans how that rule of law is helping the refugee crisis.. and ask the Eu citizenry if they feel safer now? And finally Open Markets – well for one cross-border trade is collapsing as Schengen explodes, but the capital markets of mainland Europe have become a manipulated joke with mario Draghi as the puppetmaster]– across the continent and to its periphery. The European Union doesn’t moderate British influence – it magnifies it. A strong Europe is not a threat to Britain’s global leadership; it enhances Britain’s global leadership. The United States sees how your powerful voice in Europe ensures that Europe takes a strong stance in the world, and keeps the EU open, outward looking, and closely linked to its allies on the other side of the Atlantic. So the US and the world need your outsized influence to continue – including within Europe.

 

In this complicated, connected world, the challenges facing the EU – migration, economic inequality, the threats of terrorism and climate change – are the same challenges facing the United States and other nations. [ZH: All largely blowback from America’s actions and will certainly remain whether in or out of The EU]And in today’s world, even as we all cherish our sovereignty, the nations who wield their influence most effectively are the nations that do it through the collective action that today’s challenges demand. [ZH: Wait what! Did you just say that the best way to maintain your own sovereignty is to relinquish it for the greater good?]

 

When we negotiated the historic deal to verifiably prevent Iran from developing a nuclear weapon, it was collective action, working together with the permanent members of the UN Security Council and Germany, that got the job done. And the EU’s seat at the table magnified the United Kingdom’s voice. [ZH: And what a deal! But that smells like another veiled threat – leave The EU and lose “your seat at the table”]

 

When the climate agreement in Paris needed a push, it was the European Union, fortified by the United Kingdom, that ultimately helped make that agreement possible.

 

When it comes to creating jobs, trade, and economic growth in line with our values, the UK has benefited from its membership in the EU – inside a single market that provides enormous opportunities for the British people. And the Transatlantic Trade and Investment Partnership with the EU will advance our values and our interests, and establish the high-standard, pro-worker rules for trade and commerce in the 21st century economy. [ZH: So all the trade deals will be torn up if The Brits say ‘up yours’ to Brussels? Just how special is this relationship?]

 

This kind of cooperation – from intelligence sharing and counterterrorism to forging agreements to create jobs and economic growth – will be far more effective if it extends across Europe. Now is a time for friends and allies to stick together. [ZH: Quick question – does that mean that UK will be cutoff from “intelligence sharing and counterterrorism to forging agreements to create jobs and economic growth” should the citizenry exercise their democratic right to maintain control of their sovereignty? Because if not – then why even bring it up?]

 

Together, the United States, the United Kingdom, and the European Union have turned centuries of war in Europe into decades of peace, and worked as one to make this world a safer, better place. [ZH: Except you mean, of course, for the terrorism plague spreading across the world, the refugee crisis that your wars have created, and the soaring military spending throughout the world?]What a remarkable legacy that is. And what a remarkable legacy we will leave when, together, we meet the challenges of this young century as well.

So there it is – In as passive-aggressive a manner as is possible – Stay in the European Union or all that “special relationship”, security, economic trade, military assistance, and banking goodwill ‘might’ just disappear… and we note, maybe the whole loss of sovereignty to Brussels, dragging them into various wars (of your own making), economic and social unrest due to a refugee crisis created by American neocons, and echoing costs of a banking crisis is a small price to pay.

Vote No To Brexit, Vote Yes To Undemocratic Superstate!

We leave it to two outspoken British MPs to have the final word…

Kate Hoey MP said of the warning: “We felt it is important the President of the United States is aware that feelings will run high in the UK if he chooses to make an intervention. We have chosen to respectfully request he recognises matters of sovereignty are best left to the citizens directly affected. We would certainly never think of visiting the United States and telling the US public how to vote in an election or the amendment of their constitution.”

 

Peter Bone MP said: “Whatever the President perceives the interests of the US to be it would be better for the relationship between our countries and his reputation with the British people if he kept his counsel to himself.”

We cannot wait to see what Nigel Farage has to say on this one.

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Wolf Richter   www.wolfstreet.com

Another retailer is heading for bankruptcy. This time Aeropostale, with 800 teen-clothing stores, after three years in a row of losses. It’s “preparing to reorganize under a Chapter 11 bankruptcy, and could file as soon as this month, according to people familiar with the matter,” Bloomberg reported today.

Upon Bloomberg’s propitious report, Aeropostale shares plunged 28% to 15 cents. It has been a penny stock since last September. The New York Stock Exchange, which had threatened the company with delisting, removed the stock before 2 p.m. today, and trading of the shares has been suspended.

Bloomberg:

Aeropostale is trying to work out a loan to finance its operations during the bankruptcy process, according to the people. A deal to avert a filing or find a buyer also could still emerge, they said.

Which is what just about all collapsing retailers are valiantly trying to do. And often to no avail.

In March, Aeropostale had already announced that it would “evaluate strategic alternatives.” It hired Stifel Financial Corp. to work on a sale or restructuring. According to Bloomberg, it’s also working with law firm Weil Gotshal & Manges LLP and FTI Consulting, “people familiar with the matter said last week.”

As in so many cases, there is a private equity angle. PE firm Sycamore Partners owns a large state in Aeropostale and is its main lender. But they have been embroiled in a feud. Sycamore also owns Aeropostale’s key clothing supplier, MGF.

In 2013, when Sycamore acquired its stake in Aeropostale and lent if $150 million, it obtained two seats on the board and set up the supply deal with MGF. Bloomberg:

At the time, Sycamore was seen as possible savior for the troubled chain. Some investors expected the investment firm to eventually acquire the rest of Aeropostale, helping redeem a stock that has been declining since 2010.

But that didn’t work out. These hopeful investors lost their shirts. Sycamore’s two directors left Aeropostale’s board. In March, Aeropostale said that MGF has stopped delivering merchandise in violation of the terms of its agreement, leaving the retailer short on merchandise. MGF, as Bloomberg put it, said “it was merely seeking protection from Aeropostale.”

There are numerous other 1990s and 2000s brands that didn’t quite make the transition in the relentlessly tough US retail environment of squeezed consumers, fickle and picky teens, smart women, shoppo-phobic men, inscrutable millennials, and a brutal shift to online sales.

And now their bankruptcies are hailing down on the US economy with increasing intensity. Here are a few standouts in 2016 and 2015. Note the PE firms behind many of them:

April 16, 2016: Vestis Retail Group, the operator of sporting goods retailers Eastern Mountain Sports (camping, hiking, skiing, adventure sports), Bob’s Stores (family clothing and shoes), and Sport Chalet (general sporting goods), filed for Chapter 11 bankruptcy. It will close all 56 stores and stop online sales.

In the filing, it blamed the going-out-of-business sales at “certain Sports Authority locations,” plus the weather, which had been too warm, and trouble with switching to a new software platform. It’s owned by private equity firm Versa Capital Management LLC.

April 7, 2016: Pacific Sunwear of California, clothing retailer with nearly 600 stores and derailed ambitions of skate-and-surf cool, filed for Chapter 11 bankruptcy. PE firm Golden Gate Capital, a lender to the company, agreed to convert over 65% of its loan into equity of the reorganized company and add another $20 million in financing. Wells Fargo agreed to provide $100 million of debtor-in-possession financing.

March 2, 2016: Sports Authority filed for Chapter 11 bankruptcy. It said it would close 140 of its 450 stores, including all stores in Texas. In 2006, it had been taken over in a leveraged buyout by a group of PE firms led by Leonard Green & Partners [Another Private-Equity LBO Queen Bites the Dust].

February 2, 2016: Hancock Fabrics filed for Chapter 11 bankruptcy, for the second time. It closed 70 of its retail sewing and crafting stores. Its inventories are being liquidated with going-out-of-business sales at the remaining 185 stores.

January 16, 2015: Wet Seal, teen fashion retailer, filed for Chapter 11 bankruptcy.

October 2015: American Apparel filed for Chapter 11 bankruptcy, after years of all sorts of sordid turmoil – and losses since 2009.

In 2014, hedge fund Standard General entered into a deal with the company’s “controversial” founder and former CEO Dov Charney. The deal raised his stake to 43% but gave the hedge fund a big block of the shares as collateral. The hedge fund and some other investors also own a big part of American Apparel bonds and thus control the bankruptcy negotiations. The hedge fund expects to emerge owning about a quarter of the restructured company’s debt and about 5% of its new equity.

September, 2015: Quiksilver, surfwear retailer, filed for Chapter 11 bankruptcy. In January, 2016, it emerged from bankruptcy and is now controlled by PE firm Oaktree Capital.

June, 2015: Anna’s Linens filed for Chapter 11 bankruptcy.

April 2015: Frederick’s of Hollywood filed for Chapter 11 bankruptcy

February 2015: RadioShack filed for Chapter 11 bankruptcy. In May 2015, Standard General took control of it in a bankruptcy auction.

February 2015: Cache Inc., women’s dress and formal-wear retailer, filed for Chapter 11 bankruptcy.

January 2015: Body Central Corp, women’s clothing retailer, after announcing it was exploring a Chapter 11 bankruptcy, ended up not filing, but closed its 265 stores under a Florida process called “an assignment for the benefit of creditors.”

These are the ugly skid marks of the “end of the credit cycle,” as it’s called, an era when defaults and bankruptcies suddenly re-materialize, and when investors get to eat big losses in what they thought were conservative investments.

In March, total commercial bankruptcy filings by corporations of all sizes and other business entities jumped 25% from a year ago to a total of 3,351, with the two biggest culprits being energy and, well, retail. Read…  US Commercial Bankruptcies Suddenly Soar

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Submitted by Mac Slavo via SHTFPlan.com,

Are children safe in public schools?

If the answer seems pretty obvious, it is confirmation that society has definitely gone to extremes that would not have been recognizable in past decades of American history.

Now Denver-area schools are becoming the first to guard their student populations with military-style semiautomatic rifles, and things certainly appear to be escalating.

via NBC News/AP:

A suburban Denver school district is arming its security staff with military-style semiautomatic rifles in case of a school shooting or other violent attack, a move that appears unprecedented even as more schools arm employees in response to mass violence elsewhere.

 

The guards, who are not law enforcement officers, already carry handguns.

 

[…]

 

The move raised new questions about how far school officials should go in arming employees, a practice that has become standard in the aftermath of the 2012 Sandy Hook Elementary School shootings.

One can only hope that these weapons would stop a shooter before they could hurt anyone, but there isn’t any guarantee.

Active shooters, mass killings and militarized police and security now haunt the halls where education and learning is supposed to be taking place. More children than ever before are on pharmaceutical medications, despite the known links to suicide and homicide. Between Common Core and politically-correct policies, these institutions are teaching that up-is-down, and down-is-up like never before.

One school in Florida even punished a 16-year old student for wrestling a gunman threatening other students to the ground and preventing a shooting. Active shooter and martial law drills have become commonplace, and many of them have been unannounced, causing terror and panic in students and teachers.

While most schools remain “gun-free zones” and have been reluctant to allow teachers to be armed in the case of the worst incidents, many have readily invested in armed security, surveillance technology and counter-terrorism approaches to “safety” in schools.

The result has been a heightened atmosphere that is increasingly paranoid, and ready to treat anyone and everyone as potential suspects – including children:

Ken Trump, a school safety consultant in Cleveland, said the Douglas County case may mark the first time a district has equipped its in-house security officers with semiautomatic rifles.

 

“Taking this step certainly ratchets up a notch the whole idea, the question of what’s reasonable, what’s necessary in terms of arming officers,” Trump said.

But are they being protected from potential violence, or indoctrinated in a police state society where even children are under sharp suspicion, and misbehavior is criminalized? Can we see down the road as to whether this is likely to tend towards more freedom, or less? More armed citizens is positive, but more guns only in the hands of police, but private and public, may prove not be.

Regardless, it is a precedent for the growing police state society that expects individuals to conform to the masses, and obey authorities at all costs. Michael Snyder argued that public schools are purposely preparing students to live in such a society:

Our children are the future of America, and our public schools are systematically training them to become accustomed to living in a “Big Brother” police state. All across the United States today, public schools have essentially become “prison grids” that are run by control freaks that are absolutely obsessed with micromanaging the lives of their students down to the smallest detail. As you will read about below, students all over the country are now being monitored by RFID microchips, their lunches are being inspected on a daily basis by school administrators, and the social media accounts of students are being constantly monitored even when they are at home.

 

[…] One thing that was unheard of back when I was in high school was “active shooter drills”. They are being held in school districts all over the nation today, and they often involve the firing of blanks and the use of fake blood.

In typical fashion, Snyder goes on to make a long list of bizarre school practices that will make your head spin, and are, frankly, teaching the future members of society how to become helpless slaves.

Everyone can see that there is a problem, but nobody seems to know the way to fix it.

There is a fine line somewhere in there…

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Hundreds of school children in East China’s Jiangsu Province have fallen mysteriously ill, suffering from nose bleeds, itching, rashes, coughing, and other complicated symptoms, whose cause has not been determined.

CRI reports that some of the parents alleged that they noticed irritant smells at the school. They suspect that the smell comes from chemical factories near the school, which they believe are the main causes of their children’s symptoms.

This is the second week in a row where students were found to be suffering from the same symptoms in the same province.

As a result, local authorities have mandated that five chemical factories near the school suspend operations. Meanwhile, the school insists on continuing all school activities as usual.

 

Mckinsey estimated in a 2013 study that China would drive roughly 60% of global chemical market demand growth from 2011 to 2020. As firms scramble to get chemical plants up and running in China, it appears that “safety” was conveniently brushed aside and is now leading to dramatic consequences for all those in the vicinity .

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Authored by Eric Zuesse,

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Back on September 2, 2015 when bitcoin was trading at $230, we laid out the simplest and most fundamental reason why, irrelevant of one’s ideological persuasion with “alternative” or digital currency – bitcoin would soar.

it was earlier this summer when the digital currency, which can bypass capital controls and national borders with the click of a button, surged on Grexit concerns and fears a Drachma return would crush the savings of an entire nation. Since then, BTC has dropped (in no small part as a result of the previously documented “forking” with Bitcoin XT), however if a few hundred million Chinese decide that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decide to invest even a tiny fraction of the $22 trillion in Chinese deposits in bitcoin (whose total market cap at last check was just over $3 billion), sit back and watch as we witness the second coming of the bitcoin bubble, one which could make the previous all time highs in the digital currency, seems like a low print.

For now only a small fraction of the eligible potential Chinese bitcoin users have emerged. Even so, bitcoin is now double the price where it was when we wrote the above forecast.

But what if just like every other market, fundamentals only matter to a certain extent, and what is far more important is the algos scanning for patterns and creating self-fulfilling chartist prophecies.

In other words, what if the Bitcoin technicals are far more important? Then we may be about to see a major breakout to the upside. As Dan Eskola writes, “a large move in bitcoin” is imminent.

He explains why:

A “Bullish Pennant” is a buy indicator. It exists here since the price action in October 2015 was bullish. Since then the prices have stabilized somewhat but have not sold off or broke out higher. Bitcoin prices are searching for direction.

The long term chart also shows some common characteristics.

Fundamental analysis is great, technical analysis is easy. The following fundamental bullish factors indicate that the prices for Bitcoin are headed higher.

1. A finite number of Bitcoin will be mined.
2. Central bankers are convinced inflation targeting is the correct policy action to promote price stability.
3. Capital controls in struggling economies are creating new users of Bitcoin.
4. Easier to transfer than Gold, the traditional inflation hedge.
5. ETF $COIN seeking regulatory approval will expand market awareness and offer another vehicle for investors.

I believe the market participants that price Bitcoin use technical analysis because it is easy and fundamental analysis is difficult. I believe that Bitcoin prices will move higher for the rest of 2016.

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