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Economic Outlook

ECB Losing Control

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Posted by Martin Armstrong - Armstrong Economics

on Thursday, 07 April 2016 07:53

Riots-4-7-2016

In Naples, riots against Renzi resulted in clashes between police and demonstrators. On Wednesday, Italy’s government had to address the plight of Italian banks which now seems to be significant as both houses of parliament blessed in a crisis meeting, voted to create a state fund for bad loans from. Resistance to Renzi’s idea was very limited. In Naples there were serious riots against it. In reality, Italy’s government has survived a vote of confidence in this decree involving a bank rescue. The Senate rushed together late on Wednesday afternoon. In the House of Lords, the vote was 171 for the plans, 105 against. This is now all about state guarantees for banks that could collapse under the weight of bad loans and that day is coming rapidly as all the QE efforts of the ECB do nothing to reverse the crisis in banking or the economy. Nonetheless, the House of Representatives had already passed the decree while Prime Minister Matteo Renzi had only a very thin majority in the Senate. The crisis appears to force the measure through demonstrating how bad the banks really are in Italy.

The new plan envisages that banks can bundle their bad loans into new financial products, and then sell them. But who will buy them? On Tuesday it was announced that the government plans to fund the money houses buy the bad loans. The decree also provides for the formation of a holding company to merge the 371 small credit unions. Therefore, it is placing the bad loans outside the banking system. The EU rules for bail-ins are breaking down. Each country is beginning to ignore Brussels and proceed in their own manner demonstrating that the ECB is really losing control.

Meanwhile, the ECB Chief Economist Peter Praet spoke at a conference in Frankfurt on Thursday. Effectively, the message was that the ECB is ready and willing to do “whatever is needed” to return inflation to target. Instead of looking at the current negative interest rate policy, they continue to see the solution to just be more of the same. Obviously, as banks continue to implode in Europe and smart capital flees to the USA, the ECB is incapable to reversing the trend. The cycle will play out and the look very bleak at least into 2018 for Europe.



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Economic Outlook

The Panama Papers - The Hunt For Taxes

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Posted by Martin Armstrong - Armstrong Economics

on Tuesday, 05 April 2016 12:46

Mossack-Fonseca-logoThis is the biggest document leak in history and it is exposing world leaders and their secretive, offshore financial dealings. Some 11.5 million documents have been leaked from the Panama-based law firm Mossack Fonseca, which has offices in 35 countries. This leak has exposed a trove of confidential financial dealings by the elites and spans to aides of Russian President Vladimir Putin all the way to relatives of Chinese President Xi Jinping. Naturally, the press likes to focus on Putin. There is much more hidden behind the press curtain.

....read more HERE



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Economic Outlook

Q1 Ends With A Bang, What’s Next?

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Posted by Lance Roberts - The Real Investment ReportReport

on Monday, 04 April 2016 09:32

A good bit has happened over the last couple of weeks. The S&P 500 staged a sharp recovery from February closing lows due to repeated Central Bank actions during the month as well as an expected reflex rally fueled by short-covering. On a short term basis, the technical backdrop has improved markedly, but was it enough to change the longer-term trend of the markets from bearish back to bullish. This is the topic we will directly tackle this week.

While allocations have been very conservative since last May, avoiding the ensuing volatile declines last summer and the start of this year, I have repeatedly stated that interventions by Central Banks could nullify the “bear case” in the short-term.  

Let’s start with a short-term (daily) view and update the previous observations.

SP500-MarketUpdate-040116-2

 

....read more HERE



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Economic Outlook

Real Motive Behind Warming Scare

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Posted by Investors Business Daily

on Monday, 04 April 2016 07:18

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It is such a big issue, and so expensive it pays to ask what is it all about, and what effect on the markets and economy can you expect. Starting off with a quote - Money Talks Editor:

In the words of former United Nations climate official Ottmar Edenhofer:

“One has to free oneself from the illusion that international climate policy is environmental policy. This has almost nothing to do with the environmental policy anymore, with problems such as deforestation or the ozone hole,” said Edenhofer, who co-chaired the U.N.’s Intergovernmental Panel on Climate Change working group on Mitigation of Climate Change from 2008 to 2015.

So what is the goal of environmental policy?

“We redistribute de facto the world’s wealth by climate policy,” said Edenhofer.

Another Climate Alarmist Admits Real Motive Behind Warming Scare

Fraud: While the global warming alarmists have done a good job of spreading fright, they haven’t been so good at hiding their real motivation. Yet another one has slipped up and revealed the catalyst driving the climate scare.



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Economic Outlook

Canadian Banking Regulators Sound the Alarm

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Posted by Nathan McDonald

on Thursday, 24 March 2016 08:58

UnknownThe shouts of warning are finally starting to come out from official bodies. Since the collapse of the oil and gas market, we have been writing about the fact that we haven't seen the worst yet. 

As I have previously written, Canada and Russia are two countries that have been absolutely devastated by the crashing oil markets. The oil and gas crash has racked the Canadian economy and resulted in massive layoffs in the industry and those that support it. Yet the ripple effect has yet to take full effect and the corresponding regulatory bodies are just starting to take notice. 

The Canadian banking sector, along with the Commodities sector, constitutes a massive part of the Canadian economy. Therefore, it is not surprising to learn that the former is now controlled by the latter and in a major way. 



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Economic Outlook

Chang and Eng - The US and Canada

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Posted by Jeff Thomas via Sprott Money

on Thursday, 24 March 2016 08:48

40885Chang and Eng were the first internationally known "Siamese twins", as a result of their having been exhibited worldwide. Although each had a complete body, they were joined together at the sternum.

In 1870, Chang suffered a stroke and his health deteriorated over the next four years. In 1874, at age sixty-two, he developed bronchitis and died. His brother Eng realised immediately that his continued attachment to his brother meant that he was next. Although he was separated from his twin in an emergency operation, Eng died hours later. He left the problem too long and paid with his life.

Just as with Siamese twins, it's a risky proposition for one country to have too much dependency on another. If a visitor to Uruguay were to visit a supermarket and examine the origin of the products by reading labels, he would find that Uruguay produces 90% of the food it consumes. In Cuba, however, we read the labels on packaging and see that the great majority of packaged foods comes from Mexico. This suggests that, should food production diminish in Mexico, or should there be political turmoil or shipping problems, Cuba could face significant problems in feeding its people.



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Economic Outlook

Explosions at Brussels airport and metro station kill at least 34

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Posted by Business Insider

on Tuesday, 22 March 2016 06:51

 

  • Death toll climbs to at least 34 in attacks on Brussels airport and metro station.
  • Dozens injured in what prosecutors say was a suicide bombing.
  • All public transport shut down in Brussels.
  • Authorities launch massive police operation.
  • Belgian prosecutors confirm the explosions were terrorist attacks.
  • Belgium raised its terror alert to its highest level.

Screen Shot 2016-03-22 at 6.44.38 AM

 

....read more HERE

 



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