WALL ST Now Panicky Over #Greek Default Risk

Greek default? Wall Street Says Don't Risk It!!!

NEW YORK — Top executives on Wall Street and senior policymakers in Washington are warning their European counterparts not to let Greece default and leave the Eurozone, fearing the market reaction at a time of sluggish growth in the U.S. and instability in the global economy.

Some say they are not as freaked out as they were in 2012 about the prospect of always-in-crisis Greece getting kicked out of the Eurozone, which could happen if a deal isn’t reached quickly. Some would even like to let the Greeks go and move on with life. But then people mention Lehman Brothers. And the Russian default. And even an assassination in Sarajevo in 1914. And theoretical discussion of how better prepared the world is for a Greek exit quickly turns into fevered rumination on how it still might spark global financial Armageddon. Read More.

Greeks Seem To Be A Bit Unnerved TOO!

Platinum Wealth Partners - Top Investors Edge

It is understandable that Wall St is on edge because the global financial system is so interconnected - a proverbial house of cards. But the problem child does not show any signs of change and could quickly tumble the Eurozone; thereby trigger a roaring ripple around the globe.
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In the end, Wall Street is not the only one suffering from anxiety attacks.


International Offices
April 28, 2015

Credit Bubble - Banking Collapse Possible

Is This What A Credit Bubble Looks Like?


 April 21, 2014 by ffwiley

There’s been some buzz recently about a pick-up in business lending. The six largest banks increased business loans at an average annual rate of 8.5% in the first quarter, according to a Wall Street Journal report last week. Other first quarter data reported by the Fed shows commercial and industrial loans jumping 12% from last year. Charles Schwab’s chief strategist went so far as to call a chart depicting the Fed’s broader lending data “the most important chart in the world.” 

Unlike some pundits, though, we’re not convinced that a surge in business credit is such a good thing. We don’t doubt that more lending to small businesses, in particular, might do some good if it doesn’t go too far. Lending to large corporations, on the other hand, is a different story. Corporations are already borrowing at a pace that’s only before been seen near cyclical peaks:

Read More

 Is it a crisis? 

Marc Faber - Can't Trust Numbers

Marc Faber : Governments Statistics Not Reliable 

Marc Faber... we had a colossal credit bubble in China and that this credit bubble is now being gradually deflated and will bring about problems in the real estate market and among some major players in the commodity markets as well. So overall, if I look at export figures from China, and they are very closely correlated to overall economic growth, then there is a huge discrepancy between what China reports and what China’s trading partners are reporting.

So if you look at the figures of China, exports are still growing. If you look at the trade figures China exports to Taiwan, so China records exports of so and so much. The Taiwan report imports from China at a much lower level. So which figures are more reliable? I think the figures of the trading partners of China are more reliable. And they would suggest that growth has slown down considerably.

Governments will always publish the statistics that they wish to show irrespective whether that is in China or in other

countries. Governments control basically the statistical offices, so they can show whatever they want. As Stalin said, it’s not important who votes but who counts the votes. And the government counts the statistics.

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MARKET ALERT - China in Trouble - Bonds Default!

 

Default of a Chinese Bond:

Isolated event or the beginning of something bigger?

It finally happened. A Chinese domestic bond has defaulted. It was the first default since the Chinese central bank (PBOC) started regulating the market in 1997. The unlucky company was Shanghai Chaori Solar Energy Science and Technology (Chaori). The major question though is this a sign of healthy maturing market or the beginning of a major problem?

If you had to choose allow a bond to default, Chaori was certainly a prime candidate. First it is small. It has only 1,500 employees. Second it is a private company, not a large state owned firm. Third, it is in the struggling solar industry with substantial over capacity. Fourth, its issues were well known. Some sort of default was expected. Trading in the bonds was suspended last June. At that time they were trading at only 50% of their face value. The total issue is $160 million and the missed payment was only $15 million.

China’s premier Li Kequiang warned that Chaori was not the last. He said on 12^th March last week that future defaults of financial products are “unavoidable”. He pointed out that allowing defaults was a natural part of the financial deregulation process. There is also the issue of moral hazard, which the authorities are trying to address. In essence if you don’t allow companies to default, the markets assumes that they will never take place. With the certainty that companies cannot go under, investors will continue to pour money into risky assets.

(Read More)

   What Me Worry?

 

Our bets are that this is just the beginning, as it was long 

overdue. There are so many cracks in the portfolio that it can 

only get worse. Recently we observed the fall in copper price, a BIG signal that the real economy is suffering. As  goes China - so goes the global economy. Put this at the top of your watchlist - as the walls come tumbling down

Platinum Wealth Partners

March 19, 2014