HSBC: YIKES - Arab States Going Broke!

How many businesses can withstand a drop in revenues of 50% or more and expect to survive? Few,  if any! With oil prices being down by that percentage, expect many of the resource based countries to start defaulting on their debt and thereby crashing the global banking system along with the stock markets. It will cascade!

It was all a house of cards built on an exuberant credit bonanza fueled by unprecedented low loan rates that was doomed from the start. Now here comes the payback - and it won't be pretty.

All things revert to the mean - that's the first  law of common sense, just ask Soros!

 

Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says

Gulf Cooperation Council countries may struggle to refinance $94 billion of debt in the next two years as the region faces slowing growth, rising rates and rating downgrades, according to HSBC Holdings Plc.

Oil-rich GCC states have to refinance $52 billion of bonds and $42 billion of syndicated loans, mostly in the United Arab Emirates and Qatar, HSBC said in an e-mailed report. The countries also face a fiscal and current account deficit of $395 billion over the period, it said.

Expectations that these funding gaps "will be part financed through the sale of sovereign U.S. dollar debt will complicate efforts to refinance existing paper that matures over 2016 and 2017," Simon Williams, HSBC’s chief economist for the Middle East, said in the report. "With the Gulf acting as a single credit market, the refinancing challenge will likely be much more broadly felt" and "compounded by tightening regional liquidity, rising rates and recent downgrades," he said.

READ MORE

http://www.bloomberg.com/news/articles/2016-02-28/hsbc-sees-94-billion-gulf-arab-debt-crunch-amid-oil-slump

The Game Changed in Venezuela  

http://caracaschronicles.com/2014/02/20/the-game-changed/

People continue to be arrested merely for protesting, and a long established local Human Rights NGO makes an urgent plea for an investigation into widespread reports of torture of detainees. There are now dozens of serious human right abuses: National Guardsmen shooting tear gas canisters directly into residential buildings. We have videos of soldiers shooting civilians on the street.

Washington warns top banks to stay away from Russian bonds   

https://www.rt.com/business/333579-russia-us-eurobonds-sanctions/

Russia’s dollar-denominated 2023 bond now has a yield of 4.53 percent, sliding from 4.9 percent in September 2013 when Moscow raised $7 billion, data from the Financial Times showed.

According to the WSJ, some bank officials, including those at Citigroup, said they won’t participate. Goldman Sachs and J.P. Morgan Chase say they are still weighing their options.

Moody's Downgrades Brazil Sovereign Rating 

http://www.bloomberg.com/news/articles/2016-02-26/brazilian-banks-downgraded-by-moody-s-after-sovereign-debt-cut

 Itau Unibanco Holding SA, Banco do Brasil SA and Banco Bradesco SA were among more than two dozen financial firms in Brazil that had credit ratings cut by Moody’s Investors Service after it stripped the nation of an investment grade this week.

Ratings affected in the latest shakeup included baseline credit assessments and bank deposit and debt ratings, New York-based Moody’s said Thursday in a statement.

While the moves were prompted by the change in the sovereign rating, Brazilian banks’ creditworthiness “may also face downward pressure if Brazil’s very challenging operating environment results in a deterioration of their financial fundamentals, particularly profitability, asset quality and capitalization,” Moody’s said.

Brazil was cut two steps below investment grade, to Ba2, with a negative outlook, a sign the rating might go lower. The downgrade came one week after Standard & Poor’s reduced Brazil’s rating to BB, also two steps below investment grade with a negative outlook. The moves reflect Brazil’s worst recession in more than a century, a nationwide corruption scandal and declining demand from China for Brazilian commodities.

Why Singapore's Economy Is Heading For An Iceland-Style Meltdown

It has been just five years since the Global Financial Crisis, and the world – in brazen defiance of the lessons of 2008 – is already back to blowing massive bubbles and naively praising the countries that are benefiting from these “fool’s gold” economic booms. The Southeast Asian island nation of Singapore is currently inflating one of the most egregious examples of these post-2009 bubbles, and is displaying parallels to Iceland’s bubble that are causing me to believe that its boom will end in a similar (but not necessarily identical) manner.

READ MORE

http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/#346ffdb113cc

www.firstfinancialinsights.blogspot.com

We're Back! Sub-Prime Debt That Is!

Trends in sub-primes debt are a leading indicator of things to come.  Remember what happened the last time this market tanked. Not a good omen. 

When will we ever learn? 

More Subprimes Borrowers Are Falling Behind on Their Auto Loans 

The delinquency rate reaches its highest level since 2010 

Rising delinquencies come as a warning sign that more loans may end up in default down the road, said John McElravey, an analyst at the bank. What may be most troubling, however, is that the default rate is already climbing, up to 12.3 percent in January from 11.3 the prior month. That is the highest rate since 2010, the data show.

http://www.bloomberg.com/news/articles/2016-02-23/more-subprime-borrowers-are-falling-behind-on-their-auto-loans

Venezuela's Descent Into World's Riskiest Sovereign Credit: Q&A

The country already tops measures of the world’s most miserable economy, with inflation of 181 percent last year, a currency that has collapsed on the black market to less than 1 percent of its official value and shortages of basic goods such as detergent and antibiotics. It’s a horrific turnaround for what was once one of the region’s most stable democracies, famous for its big cars, cheap gasoline and beauty queens

Battered Brazil Carmakers Say Worst Isn't Over as Job Cuts Loom

Halfway through a two-year recession that’s forecast to be the worst since at least 1901, Brazil finds itself stuck in a grinding cycle of job loss and falling consumer spending. National unemployment has climbed to 9 percent as retail sales tank and industrial production contracts for 22 straight months, government reports show.

.P. Morgan adds $500 million to reserves against bad oil loans in 2016

The move comes as crude-oil prices have fallen about 12% so far this year and have plunged 34% over the past 12 months, putting the finances of energy companies under pressure.

  Foreign Investors Dump Emerging Market Debt

“The currency volatility means investors are unwilling to stomach these bonds. And as growth slows in the countries and the bond yields go higher, the cost of servicing debt is getting more difficult for these countries.”

http://www.ft.com/intl/cms/s/0/d29a1416-d975-11e5-98fd-06d75973fe09.html#axzz41BoGtE3D

GOOD BYE: Economic Growth Mantra - HELLO: Life for Earth

THE GREAT TURNING

Joanna Macy

Joanna Macy: The Great Turning is a shift from the Industrial Growth Society to a life-sustaining civilization.

  

The Great Turning is a name for the essential adventure of our time: the shift from the Industrial Growth Society to a life-sustaining civilization.

The ecological and social crises we face are caused by an economic system dependent on accelerating growth. This self-destructing political economy sets its goals and measures its performance in terms of ever-increasing corporate profits—in other words by how fast materials can be extracted from Earth and turned into consumer products, weapons, and waste.

A revolution is under way because people are realizing that our needs can be met without destroying our world. We have the technical knowledge, the communication tools, and material resources to grow enough food, ensure clean air and water, and meet rational energy needs. Future generations, if there is a livable world for them, will look back at the epochal transition we are making to a life-sustaining society. And they may well call this the time of the Great Turning. It is happening now.

Whether or not it is recognized by corporate-controlled media, the Great Turning is a reality. Although we cannot know yet if it will take hold in time for humans and other complex life forms to survive, we can know that it is under way. And it is gaining momentum, through the actions of countless individuals and groups around the world. To see this as the larger context of our lives clears our vision and summons our courage.

The Three Dimensions of the Great Turning:

1. Actions to slow the damage to Earth and its beings

Perhaps the most visible dimension of the Great Turning, these activities include all the political, legislative, and legal work required to reduce the destruction, as well as direct actions—blockades, boycotts, civil disobedience, and other forms of refusal. A few examples:

• Documenting the ecological and health effects of the Industrial Growth Society;
• Lobbying or protesting against the World Trade Organization and the international trade agreements that endanger ecosystems and undermine social and economic justice;
• Blowing the whistle on illegal and unethical corporate practices;
• Blockading and conducting vigils at places of ecological destruction, such as old-growth forests under threat of clear-cutting or at nuclear dumping grounds.

Work of this kind buys time. It saves some lives, and some ecosystems, species, and cultures, as well as some of the gene pool, for the sustainable society to come. But it is insufficient to bring that society about.

Read More

Venezuela on collision course for default crisis

Venezuela is rapidly heading for a showdown between its socialist government and the centre-right opposition that is likely to end up with the crisis-ridden country defaulting on its debt.

http://www.ft.com/intl/cms/s/3/cf14a292-d40d-11e5-829b-8564e7528e54.html#axzz40LXLVW73

Danger signs flashing for global economy, years after crisis

Eight years after the financial crisis, the world is coming to grips with an unpleasant realization: serious weaknesses still plague the global economy, and emergency help may not be on the way.

http://www.chicagotribune.com/business/ct-global-economy-financial-crisis-20160216-story.html

High risk of bankruptcy for one-third of oil firms: Deloitte

The roughly 175 companies at risk of bankruptcy have more than $150 billion in debt, with the slipping value of secondary stock offerings and asset sales further hindering their ability to generate cash, Deloitte said in the report, released Tuesday.

http://www.reuters.com/article/us-usa-shale-bankruptcy-idUSKCN0VP0O6

China's Debt Surge Has Potential to Pressure Ratings, S&P Says

China’s debt-to-gross-domestic-product ratio climbed to 232 percent at the end of 2014, the highest since Bloomberg started compiling the data in 2004.

http://www.bloomberg.com/news/articles/2016-02-16/china-s-debt-surge-has-potential-to-pressure-ratings-s-p-says

No Doubt FED Is Manipulating Inflation Numbers, & More #News

Platinum Wealth Partners' Insights

Any serious investor who believes that the CPI numbers (etc.) created by governments everywhere are real and accurate is the sort of bigger fool everyone is looking for - to support  many ventures. Now, sooner or later, the markets are going to wake up to  this reality,inclusive of  China, to Greece to Brazil and  the USA, plus many more - and then watch the proverbial "you-know-what ' hit the fan.

In turn, the spin doctors and other Pinocchios will be fully employed in very secure long-term activities as they seek to baffle the feeble-minded towards ratification and consumption. So yes, Eric Sprott is right.- so Is Noam Chomsky; so was John Steinbeck..

Never forget Arthur Anderson, Enron , China the Fed. and all the rest. For as always, remember this utter wisdom -  figures lie, only because liars figure. 

Beware, and good luck!

August 31, 2015

Eric Sprott Was Right, Inflation Is Rising

Eric showed the above table in his presentation. It shows that the true level of inflation, a persistent increase in prices, has been sitting around 10% since 2011. Indeed, a far worse picture than what the US Federal Reserve paints. The Fed argues that prices have been rising below 2% for the past four years. That said, the Fed doesn’t include food, petrol and taxes in its inflation index. This is similar to the Reserve Bank of Australia’s inflation calculation.

But then who needs petrol and food, right?

So it’s not surprising that Jim Rickard’s, over at Strategic Intelligence, argues that there’s no worse forecaster in the world than the US Fed.

You may have noticed each year that Australian healthcare companies raise their premiums by roughly 6%. Well, costs are also rising over in the US.

I’ve been speaking to many US citizens up here at the conference. The word on the street is that Obamacare is one of the worst policies of all time. It’s legally forced those who can’t afford health care to buy; at the same time, hiking insurance premiums for those who require modest healthcare.

And it’s only going to get worse…

Optimistic About Inflation, Stanley 

Fischer Suggests

 That Fed Will Stick to Plan on Rates

The Fed’s preferred measure of inflation shows that prices rose 0.3 percent during the 12 months ending in July, well below the 2 percent annual pace the Fed considers healthy. A narrower measure excluding food and oil prices, which the Fed regards as more predictive, increased 1.2 percent over that same period.

Printing Money Goes Haywire in Venezuela 

Venezuela seems to be hovering on the edge of tipping into hyperinflation. Or perhaps it has already fallen into the abyss. Given the paucity of official data -- the none-too-believable official figures were last published in February -- it's a little hard to tell.

China Construction Bank Posts Zero Profit Growth on Weak Economy 

Industrial overcapacity, a build-up of corporate debt and a $5 trillion stock-market slump are making it harder for Premier Li Keqiang to prevent a deeper economic slowdown. The combined earnings of China’s five biggest banks are projected to rise 2 percent this year, the least since at least 2004, according to analysts’ estimates compiled by Bloomberg.

The Coddling of the American Mind 

There’s a saying common in education circles: Don’t teach students what to think; teach them how to think. The idea goes back at least as far as Socrates. Today, what we call the Socratic method is a way of teaching that fosters critical thinking, in part by encouraging students to question their own unexamined beliefs, as well as the received wisdom of those around them. Such questioning sometimes leads to discomfort, and even to anger, on the way to understanding.

Bond Market Explosion Not Stoppable: Craig Hemke 

What I really worry about is that transition from one financial scheme to the next is never done peacefully. The hegemon that has the printing press, that has the reserve currency, they don’t just sit back and say we’ve had our time in the sun. Now it’s your turn. No, they fight as hard as they can to protect and defend that. That’s my biggest concern.

Lies You Will Hear As The

 Economic Collapse 

Progresses

It is undeniable; the final collapse triggers are upon us, triggers alternative economists have been warning about since the initial implosion of 2008. In the years since the derivatives disaster, there has been no end to the absurd and ludicrous propaganda coming out of mainstream financial outlets and as the situation in markets becomes worse, the propaganda will only increase. This might seem counter-intuitive to many. You would think that the more obvious the economic collapse becomes, the more alternative analysts will be vindicated and the more awake and aware the average person will be. Not necessarily...

 

In fact, the mainstream spin machine is going into high speed the more negative data is exposed and absorbed into the markets. If you know your history, then you know that this is a common tactic by the establishment elite to string the public along with false hopes so that they do not prepare or take alternative measures while the system crumbles around their ears. At the onset of the Great Depression the same strategies were used. Consider if you've heard similar quotes to these in the mainstream news over the past couple months:

A Passing Thought...