#Economy Lurched at Brink - South Africa

 This is another case where an overpopulated country with diminishing resources  per capita has fallen  onto perpetual hard times like Nauru.  It reflects the peak in global civilization and there are more coming as the resources per capita crisis grows unabated.

Tipping Point Looms for Despairing South Africa  

Not since Nelson Mandela walked out of Victor Verster prison 26 years ago have investors been gloomier about South Africa’s economy.

Money is pouring out at a record pace as inflows dwindle. The rand has plunged and unemployment is the highest among almost 40 developing nations tracked by Bloomberg. Drought is driving up food costs. Hanging in the balance is the investment-grade credit rating South Africa sweated to achieve in 2000, shortly after Mandela left office.

South Africans are paying the price not just for a collapse in commodities prices -- metals and mining contribute more than 50 percent of exports -- but for growing questions over whether President Jacob Zuma is up to the task. Stoking doubts were the antics at the finance ministry in December, when Zuma removed Nhlanhla Nene and replaced him with little-known lawmaker David van Rooyen. As bond yields soared and the rand crashed, he changed his mind four days later and installed Pravin Gordhan, Nene’s predecessor.

Read More

http://www.bloomberg.com/news/articles/2016-02-21/tipping-point-looms-for-south-africa-as-economy-s-despair-grows

Even Bank Bailout Architect Says Time To Break Up Banks  

The $700 bank bailout plan Kashkari helped author, known as the Troubled Asset Relief Program (TARP), stopped the Wall Street firms that caused the crisis from going bankrupt. A parallel process, undertaken by New York President Timothy Geithner along with the Treasury Department, pressured the Wall Street banks to merge and get even bigger in hopes that size would increase confidence in the financial system

What's in your food? Nobody really knows  

Why doesn’t government know what’s in your food? Because industry can declare on their own that added ingredients are safe. It’s all thanks to a loophole in a 57-year old law that allows food manufacturers to circumvent the approval process by regulators. This means companies can add substances to food without ever consulting the Food and Drug Administration about potential health risks.

Copper: The Next Metal Set To Rise After Gold?  

The grey moving average on the larger chart is the 60 day moving average, which is more important than the widely followed 50 DMA, and it shows signs of flattening, a very bullish signal, certainly if it will transition into a rising pattern.

 New Global Financial Cold War  

The United States has responded by changing the IMF rules. It said, ‘Wait a minute. It’s okay for the IMF to make loans to countries that don’t pay China and Russia or the BRICs, because we’re in a new Cold War. The IMF really is working for us.’ As long as the U.S. has veto power in the IMF, its delegate can veto any loan to a country that owes money to the United States that the United States doesn’t wish to support. But it has no objection for the IMF making loans to U.S. satellites such as Ukraine, that official debts to Russia.

http://www.nakedcapitalism.com/2016/02/michael-hudson-discusses-the-new-global-financial-cold-war.html

It Makes No Sense To Raise Fed Rates, & More News

Why The Fed Would Be Insane To Raise Rates: The Rising U.S. Dollar

The USD strengthening since last July is the core driver of the global recession.

The parlor game of the moment is laying odds on the Federal Reserve's decision to raise rates, leave rates unchanged, or (gasp!) hint at future stimulus. There are certainly a multitude of inputs to the Fed's decision, and a variety of potential consequences, but only one really matters: the effect on foreign exchange/currency markets.

It's not that difficult to understand the one dynamic that matters. If the Fed raise yields/interest rates in the U.S., that makes the U.S. currency, i.e. the U.S. dollar (USD), more attractive.

Higher yield = more attractive, especially when coupled with the liquid market for U.S. Treasuries and the relative safety of the dollar vis a vis other currencies issued by falling-into-recession nations and trading blocs.

A rare interview with the mathematician who cracked Wall Street 

Jim Simons was a mathematician and cryptographer who realized: the complex math he used to break codes could help explain patterns in the world of finance. Billions later, he’s working to support the next generation of math teachers and scholars. TED’s Chris Anderson sits down with Simons to talk about his extraordinary life in numbers.

Honda to test self-driving cars, manufacturers pledge auto-braking for the masses 

The AP reports that some driver advocates like the Center for Auto Safety were concerned that this pledge doesn’t do enough to get automatic breaking systems into cars. Those advocates would rather the government legally require cars to have automatic breaking systems, instead of rely on a voluntary promise to keep drivers safe. Another concern is that automatic braking systems are generally sold as add-ons to luxury vehicles, which would put them out of reach of most consumers

Big banks in $1.865 billion swaps price-fixing settlement 

Credit default swaps are contracts that let investors buy protection to hedge against the risk that corporate or sovereign debt issuers will not meet their payment obligations.

The market peaked at $58 trillion in 2007, according to the Bank for International Settlements, but shrank to $16 trillion seven years later as investors better understood its risks

Sovereign Debt for Territory: A new Global Elite Swap Strategy 

One often wonders why governments indebt themselves for so much more than they can ever hope to pay… Here, Western economists, bankers, traders, Ivy League academics and professors, Nobel laureates and the mainstream media have a quick and monolithic reply: because all nations need “investment and investors” if they wish to build highways, power plants, schools, airports, hospitals, raise armies, service infrastructures and a long list of et ceteras, economic and national activities are all about.

The Real Cost of Filling Up: Gasoline prices by country 

This ranking sorts 61 countries by price, earnings needed to buy a gallon, and annual income spent on fuel.

As a Boom Fades, Brazilians Wonder How It All Went Wrong

BRASÍLIA — The president of Brazil should have been ecstatic. She had just won re-election after an intense campaign in which she fiercely defended her role in making Brazil, for a few fleeting years, a rising star on the global stage.

But in the days after her victory last October, President Dilma Rousseff was worried, confronted in private deliberations with her closest advisers by signs that Brazil’s triumphs were at risk of coming undone.

“We went too far,” Aloízio Mercadante, Ms. Rousseff’s chief of staff, acknowledged publicly this month, describing the sense of alarm as the dust settled after the election and Ms. Rousseff and her aides grappled with the weaknesses in Brazil’s economy.

A Passing Thought...

Chinese Investors Going NUTS, Marc Faber Sees 40% Stock Drop & More

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Turmoil in China’s Stock Markets Takes a 

Psychic Toll

(From The New York Times)

In some cities, students have dropped out of university, unable to give up their habit of tracking their investments, according to local news media. Wealthy investors have sought counseling, struggling to come to terms with the enormity of their losses after stock prices plunged. In response, doctors are advising traders to take up new hobbies and spend more time with family and friends. Some medical experts say high-risk groups, such as the elderly, the physically infirm and emotionally unstable, should consider withdrawing from the markets altogether.

Marc Faber : The U.S. Stock Market could "easily" drop up to 40 percent

Why US stocks could drop up to 40%

The U.S. stock market could "easily" drop 20 percent to 40 percent, closely followed contrarian Marc Faber said Wednesday—citing a host of factors including the growing list of companies trading below their 200-day moving average. In recent days, "there were [also] more declining than advancing stocks, and the list of 12-month new lows was very high on Friday," the publisher of The Gloom, Boom & Doom Report told CNBC's "Squawk Box." 

The World is Defenseless Against the Next Financial Crisis

The world will be unable to fight the next global financial crash as central banks have used up their ammunition trying to tackle the last crises, the Bank of International Settlements has warned. The so-called central bank of central banks launched a scathing critique of global monetary policy in its annual report, claiming that central banks have backed themselves into a corner after repeatedly cutting interest rates to shore up their economies. These low rates have fuelled economic booms, encouraging excessive risk taking. Booms have then turned to busts, which policymakers have responded to with even lower rates.  

China Destroyed Its Stock Market in Order to Save It

The enormously invasive measures Beijing used to stem trading losses may have damaged the Shanghai and Shenzhen exchanges for years to come.

China's real estate, credit and investment bubble risks global recession

China is the number one threat to the global economy, analysts say, with an over-inflated "triple bubble" threatening to drag global gross domestic product below 2 per cent. 

Are Big Banks Using Derivatives To Suppress Bullion Prices?

The bullion banks sell uncovered shorts on the gold futures market to drive down an otherwise rising price of gold. By dumping so many uncovered short contracts an artificial increase in “paper gold” is created, and this increase in supply drives down the price. 

More Leading Headlines

1.         New Chicago school leaders to tackle fiscal woes
   
   
   
   
            What does Wayne County's fiscal crisis mean for the rest of the state? 
           
             Bond Liquidity Vacuum Spurs Europe’s Investors to Shrink Trades
           
            Fed's Fischer says U.S. inflation still too low   
   
   
2.    Bank of Canada seen pushing on a string with rate cuts
3. 
   
4. Shadow Lenders Are Pushing IntoRisky Real Estate Deals

Top Weekly Ideas and Insights

An Inconvenient Truth:

What Happens When The Fossil Energy Age Ends?

 EXISTENTIAL REALITY 

End Of Fossil Energy or Archaic Fabrications?

China's Markets In Tailspin, A Tale of Two Deals, & More

China growth beats 

forecasts but stocks dive again

China's economy grew an annual 7 percent in the second quarter, beating analys' forecasts, though its volatile stock markets took a sharp dive in a reminder of the threats to Beijing's efforts to direct the economy out of a slowdown.

Policymakers had already unleashed a series of measures to pull stocks out of a 30 percent nosedive and appeared to have succeeded last week, but Wednesday's tumble could reawaken concerns over the government's ability to manage the economy.

The day began on a positive note with the growth figures and monthly activity data that also beat expectations across the board, with factory output hitting a five-month high, following reports of increased bank lending on Tuesday.

As the National Bureau of Statistics released the upbeat figures, it described the stock markets as key to economic stability. As if on cue, the key indexes, already down in morning trade, fell more than 4 percent in the afternoon.

The CSI300 index eventually ended down 3.5 percent, while the Shanghai Composite Index lost 3 percent.

"Investors liquidated their positions as the GDP data failed to impress," said Steven Leung, a director at UOB Kay Hian in Hong Kong.

Greek MPs pass austerity bill as Athens police clash with protesters

Alexis Tsipras drives through tax increases and pensions shakeup amid angry splits in his Syriza party

Five years into the worst crisis to hit their country in decades, Greek MPs voted by a large majority in the early hours of Thursday morning to accept draconian austerity as the price of further bailout funds but at great personal cost to prime minister Alexis Tsipras. 

In a vote that saw tensions soar in and outside parliament, the embattled leader’s radical leftist Syriza party suffered huge losses as 40 MPs revolted against the measures. A total of 229 lawmakers voted in favour of the internationally mandated measures, 64 against and six abstained.

Iranians take to Tehran streets to hail nuclear deal

Iranians poured onto the streets of capital Tehran after the Ramadan fast ended at sundown on Tuesday.

Iranians poured onto the streets of the capital Tehran, after the Ramadan fast ended at sundown on Tuesday to celebrate the historic nuclear deal agreed with world powers in Vienna.

Supporters of President Hassan Rouhani and his top negotiator, Foreign Minister Javad Zarif, waved Iranian flags from their cars, while drivers honked their car horns.

At least three thousand people also gathered along Valiasr Street near the Tajrish district of northern Tehran, singing celebratory songs while dancing and flashing victory signs.  

With the signing of the agreement, people who attended the celebration said they are hopeful that the country's economy and the lives of ordinary citizens would improve. 

Once sanctions are lifted in the coming months, Tehran will gain access to $100-bn in frozen assets, while opening the country for trade.

On Wednesday, Rouhani hailed the agreement as a political victory for his country, saying the agreement meant that Iran would no longer be regarded as an international threat.

Too Much Debt + Too Little Cash = Most Distressed Pain Since ’08

The pool of distressed U.S. corporate bonds, typically those yielding more than 10 percentage points above benchmarks, has swelled to $127 billion, from the low last year of $43.7 billion, Bank of America Merrill Lynch index data show. This month alone, Peabody Energy’s $4.8 billion of bonds have fallen 14.9 percent, while Cliffs Natural Resources’s $2.5 billion of notes have declined 14.6 percent.

Italy's public debt reaches new record high

Italy's public debt has risen to a new record of 2.2 trillion euros ($2.4 trillion), up by 23.4 billion euros in May. The figure published by the central bank on Tuesday brought recriminations by opposition politicians against Finance Minister Pier Carlo Padoan for not bringing down the debt load, which had even at lower levels threatened a sovereign debt crisis.

China May Tip World Into Recession: Morgan Stanley

That is the prediction from Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, who says a continuation of China’s slowdown in the next years may drag global economic growth below 2 percent, a threshold he views as equivalent to a world recession.

More Leading Headlines

1. Japan's Central Bank Trims Growth Forecast

1. White House Cuts Growth Forecast for 2015, 2016

1. Russian Industry Drops for Fifth Month, Longest Slump Since 2009

1. Moody's: UK consumer debt boom leaves borrowers vulnerable to economic shocks\

1. Chinese economic growth based on 'money created from thin air'

1. Bank of Canada cuts main interest rate to 0.50%

Top Weekly Ideas and Insights

An Inconvenient Truth:

What Happens If Global Warming Continues?

 EXISTENTIAL REALITY 

Methane Bomb 

or Archaic 

Fabrications?