- The Last Days Of 'Normal Life' In America
Submitted by Michael Snyder via The End of The American Dream blog,
If you have got family and friends that you would like to visit before things start getting really crazy, you should do so within the next couple of months, because these are the last days of “normal life” in America. The website where I have posted this article is called “End of the American Dream“, but perhaps I should have entitled it “The End of America” because that is essentially what we are heading for. The debt-fueled prosperity that so many of us take for granted is about to come to a screeching halt, and we are about to enter the hardest times that any of us have ever known. And I am not just talking about economics either. Based on all of the intel and information that I have gathered, we are about to enter a “perfect storm” that is going to shake this country in just about every possible way that it can be shaken. So I hope that you will truly savor this summer – days like this will not come around again any time soon.
Have you ever known someone that lived a seemingly charmed life even though that individual made foolish decision after foolish decision?
In the end, reality almost always catches up with people like that.
And in so many ways, we have been living a charmed life as a nation even though we have been making incredibly foolish decisions for decades. We have cursed ourselves over and over again, and just about every form of evil that you can possibly imagine is exploding all around us. As a nation, we now stand for just about everything that is foul, disgusting and wicked, and the rest of the world is absolutely horrified by what has happened to us.
Once upon a time, we were one of the most loved nations on the entire planet.
Now we are one of the most hated.
The things that we have been doing to ourselves and to other countries are about to catch up with us in a major way. We thought that we were getting away with everything that we were doing, but that was never the case. When you do evil, there is always a price to pay.
Over the past few weeks, some very strange things have begun to happen. And in the months ahead, we are going to see some more unusual events. But to be honest, this is just the tip of the iceberg. For now, you are just going to have to trust me on this one.
If my tone sounds ominous, that is good, because that is precisely the mood that I am trying to convey. Right now, there are major things going on behind the scenes, and all of our comfortable little lives are about to get shaken up big time.
I have often written about the global elite and about how they like to go about doing things. Throughout history, they have always liked to create order out of chaos. In other words, they will often purposely create a crisis in order to push through things that they would not be able to accomplish during “normal” times.
I believe that we are about to enter one of those periods of time. The problems that we are about to experience are going to be used to justify radical “solutions” that will further the overall agenda of the elite. But because we will be in the middle of an “emergency”, a lot of people will choose to go along with those solutions.
Sadly, most people don’t understand how the world works because they are so consumed with other things. We live in a society that is absolutely addicted to entertainment. Just recently, I wrote about how the average American spends more than 10 hours a day plugged in to some form of media. If we are not watching television, we are listening to the radio, going to movies, playing video games, messing with our smartphones or spending endless hours on the Internet. And more than 90 percent of the “programming” that we are fed through these devices is produced by just 6 absolutely gigantic media corporations.
And who controls those gigantic media corporations?
The elite do.
And have you noticed how “the mainstream media” loves to divide us?
Today, Americans are more divided than ever it seems. Our news broadcasts endlessly fixate on “black vs. white”, “male vs. female”, “liberal vs. conservative”, “rich vs. poor”, etc, etc.
Americans are extremely angry and frustrated at this point, but most of our anger and frustration is directed at one another.
How can we ever hope to come up with any solutions for our nation if we spend so much time hating our fellow citizens?
But this is just how the elite like it.
They love to play divide and conquer. If we were united, we would be far more difficult to manipulate.
And even if we did find a way to come together, what values and principles would we use to rebuild this nation?
The truth is that most Americans deeply reject the values and principles that the founders of this country once held so dear.
Personally, I am very optimistic about the future. My wife and I believe that the greatest chapters of our lives are still ahead of us.
But am I optimistic about the future of the United States?
No, I am not.
Perhaps you are reading this and you have come to the conclusion that I am being irrationally negative. If so, you are probably spending way too much time plugged in to the “propaganda matrix” that I described above. The establishment wants you to believe that everything is going to be just fine and that the best days for this world are ahead.
If you think that I am wrong, I challenge you to bookmark this page. Then, after some time has passed, come back and revisit what I had to say today.
I believe that you will be quite shocked by how your perspective has changed.
The last half of this year (2015) is going to represent a major turning point, and we are moving into hard times unlike anything that America has ever seen before.
Unfortunately, most of the “sheeple” are going to be completely blindsided by what is coming. They just continue to follow their utterly clueless leaders down a path toward oblivion.
But the good news is that once the “shaking” starts, many of these “sheeple” will begin to wake up.
When that happens, who will those “sheeple” turn to for answers?
- What Assets Did Greece Just Hand Over To Europe: "Airports, Airplanes, Infrastructure And Most Certainly Banks"
The Simpsons had it right all along:
With the provocative and dramatic Greek “time out” language pulled from the final finmin and summit draft language, the two most humiliating aspects of the latest extend and pretend “deal” for the Greek people will be the return of the Troika’s (surely we can call it the Troika again as part of the Greek capitulation) IMF mission to Athens, and the escrowing of some €50 billion in Greek assets in a liquidation fund.
Granted said fund will not be domiciled in Luxembourg as was originally envisioned, but Europe will still have control and first refusal rights over what are technically Greek properties, in the process Athens handing over about 25% of Greek GDP (and sovereignty) over the Brussels.
What are these assets? For the answer we go to the horse’s mouth, Jeroen Dijsselbloem, who laid out the holdings of the proposed Greek privatization that would be sold off as follows: “it still is going to be an independent fund, valued at €50 billion which can be airplanes, airports, infrastructure and most certainly banks.”
Bloomberg quotes the Eurogroup finmin president:
They will be brought in with the target to privatize those in the coming years, but we will take our time for that.
We then hope for proceeds of EU50 billion, but that will be clear later.
The banks first have to be refinanced from this aid program, but after that I take it that they’re worth money and then we can sell them.
The proceedings are aimed at lowering Greece’s national debt.
In other words, Greece will be liquidated piecemeal to repay creditors. In even other words, the proceeds from the Third Greek Bailout will not only not reach the Greek people, but Greece will have to sell itself in pieces to top off the creditors’ funding needs.
Dijsselbloem concludes: “That is good for Greece, but also good for us. We are in the end the ones from whom the money is borrowed.”
It was not exactly clear why this would be good for Greece.
So for all those curious, here are some of the “assets” that already have, or soon will hit Ebay.
The only caveat: when (not if) Greece defaults again, and it is time to collect on Europe’s secured DIP loan (which is what the Third bailout really is) collateral because not even the French socialists can push for a fourth bailout, good luck trying to repossess Aegean islands or the Santorini ferry terminal.
Oh, and for those struck by a case of deja vu, the €50 billion privatization “plan” is nothing new: it was first proposed by the IMF in 2011. This is what happened next:
What does the IMF say now about this latest privatization proposal? “Not realistic.”
#EuroSummit has doubts over 50 bn€ privatization target. IMF don’t think it’s realistic. – EU source
— Jarno Hartikainen (@JarnoHa) July 12, 2015
Which may be a problem for Greek banks since as the summit deal envisions, half of the privatization “proceeds” will go to recapitalize Greece’s insolvent banks. Proceeds which the IMF projects will be about €2 billion until 2018!
This is a problem because with this implicit admission that the Greek financial sector will effectively never receive the needed funds to remain stable, any ELA increase by the ECB will be promptly used by Greek depositors to yank as much money as they can, awaiting the next weekly dose of monetary generosity from Mario Draghi, as both capital controls and the Greek bank run remain a permanent fixture of Greek daily life.
- US Army May Use Hollow Points In New Pistols In Violation Of International Protocol
A few months back, when “boots on the ground” trial balloons were floating around Washington, one argument made for sending so-called “forward spotters” to Iraq and possibly to Syria was that US airstrikes against ISIS needed to be made more efficient and more precise in order to minimize collateral damage.
As a reminder here’s an excerpt from a Bloomberg piece published on May 22:
Conducting precision airstrikes that avoid civilian casualties is more difficult without spotters using laser designators and other tools to guide them, particularly in and around cities, said a State Department official who spoke under ground rules requiring anonymity.
A U.S. airstrike in November against a different extremist group in Syria killed two children and wounded two adults, the Defense Department reported Thursday.
On Capitol Hill Thursday, retired General Jack Keane, a former vice chief of staff of the Army, said deploying JTACs, also called forward air controllers, could quickly shift the balance against Islamic State by making its fighters more vulnerable to U.S. and coalition air attacks.
“Seventy-five percent of the sorties we are currently running with our attack aircraft come back without dropping bombs, mostly because they cannot acquire the target or cannot properly identify the target,” he said. “Forward air controllers fix that problem.”
As we noted at the time, carefully worded trial balloons don’t get much better than that. You see, the problem is that we are accidentally killing innocent children on our bombing runs and that’s if we’re lucky enough to be able to drop any bombs at all which apparently we only do a quarter of the time, and the whole “problem” could be “fixed” by deploying a couple of “spotters” with laser pointers.
Interestingly, officials seem to pay quite a bit more attention to collateral damage when citing civilian casualties can serve as a means to an end – an end like invading Syria, a state which is ripe for ‘regime change.’
Conversely, when a drone strike vaporizes a ‘high value’ target from the stratosphere and a few innocents turn up in the smoldering wreckage, well, that’s just the cost of doing business if you’re the CIA.
In that context, we thought it was interesting that the US Army is considering using hollow point ammunition in their new standard issue handguns on the premise that doing so will reduce civilian casualties. Fragmenting ammunition does a lot more damage and thus has more “stopping power” than full metal jacket ammo, so one might reasonably suspect that the Army’s goal in giving every soldier a magazine full of hollow points is simply to increase the kill rate. Not so, says the Army – it’s all about preventing collateral damage. Here’s Army Times with more:
The Army is considering the use of expanding and fragmenting ammunition, such as hollow point bullets, to increase its next-generation handgun’s ability to stop an enemy.
After a recent legal review within the Pentagon, the Army can consider adopting “special purpose ammunition,” said Richard Jackson, special assistant to the Army Judge Advocate General for Law of War, according to an Army news release. This marks a departure from battlefield practices over a century old.
Jackson told Army Times that while this isn’t the first approved use of such bullets in the military, the stance represented “a significant re-interpretation of the legal standard” for ammunition. He also said a lot has changed since the initial movements against the round, especially with the increased prevalence of asymmetric warfare.
Most of the Army uses full metal jacket, or ball ammunition, in both handguns and rifles. These rounds are designed to hold together, increasing penetration and narrowing the tunnel of damaged tissue.
Expanding and fragmenting bullets can flatten or break apart, and are more likely to remain in the body of a target and transfer all of their energy to it. A wider swath of tissue is typically destroyed.
On the battlefield, the U.S. has generally observed the 1899 Hague Convention rule barring expanding and fragmenting rounds, despite the fact that it never has been signatory to that particular agreement, Russell said.
The U.S. reserved the right to use different ammunition where it saw a need. For example, Criminal Investigations Command and military police use hollow points — as do law enforcement agencies around the country — in part to minimize collateral damage of bullets passing through the target. Special Forces also uses expanding/fragmenting rounds in counter-terrorism missions.
“The use of this ammunition supports the international law principles of preventing excessive collateral effects and safeguarding civilian lives,” an Army statement said.
So the US never signed up for this ban on special purpose ammo and always reserved the right to use it “where it saw the need”, which apparently is now everywhere.
Note that the Hague Convention rule wasn’t something that was adopted for no reason. The ban on non standard rounds was put in place because, again quoting the Army Times, “the bullets caused unnecessary and therefore inhumane injury unrelated to stopping a combatant from continuing to fight.”
After reading the above, you might be tempted to think that this is yet another example of the US simply ignoring international protocol – and you’d be right. But don’t worry (and here’s the punchline), the Pentagon thought about it and as it turns out, the fragmenting ammunition rule doesn’t “make much sense”, so much like territorial sovereignty in the Middle East, the US Army is free to ignore it:
“There’s a myth that [expanding/fragmenting bullets] are prohibited in international armed conflict, but that doesn’t make any sense now” – Richard Jackson, special assistant to the Army Judge Advocate General for Law of War
- Donald Trump: A False Flag Candidate?
Submitted by Justin Raimondo via Antiwar.com,
That we have to take Donald Trump seriously confirms my longstanding prognosis that we’ve entered another dimension in which up is down, black is white, and reason is dethroned: in short, we’re living in BizarroWorld, and the landscape is not very inviting. Yet explore it I must, since the reality TV star and professional self-promoter is rising in the polls, and garnering an inordinate amount of media attention – and whether the latter is responsible for the former is something I’ll get into later, but for now let us focus on what practically no one else is paying much attention to, the Trumpian foreign policy.
Right off the bat, we run into trouble, however, since the signature sound-bites that characterize the Trump style don’t really qualify as anything close to a “policy.” Yet his various effusions on this topic do indeed translate into a mindset, which one might call blowhard-ism. And as much as it resembles the semi-coherent rantings of a drunk loudly pontificating in the dark recesses of some hotel bar at a Rotarians convention, it does reflect some “serious” trends to be found in the high-toned precincts of the foreign policy Establishment, not to mention among Trump’s fellow presidential aspirants in the GOP clown show.
On Iraq, The Donald makes much of his alleged opposition to the Iraq war – a position no one has documented to my satisfaction – but now that we’re back there, what’s Trump’s plan? "We shouldn’t have been there,” he opines, and yet “once we were there, we probably should have stayed.” While this may sound bafflingly counterintuitive, not to mention flat out contradictory, you have to remember two things: 1) In Bizarro World, contradictions do exist, A is B, and the sensible is the impossible, and 2) Similar things were said about the Vietnam war by politicians less obviously nutso than The Donald. As Murray Rothbard put it in a 1968 newspaper column he wrote for the Freedom Newspapers chain:
“A lot of people throughout the country are beginning to realize that getting into the Vietnam war was a disastrous mistake. In fact, hardly anyone makes so bold as to justify America’s entrance into, and generation of, that perpetual war. And so the last line of defense for the war’s proponents is: Well, maybe it was a mistake to get into the war, but now that we’re there, we’re committed, so we have to carry on.
“A curious argument. Usually, in life, if we find out that a course of action has been a mistake, we abandon that course and try something else. This is supposed to be the time-honored principle of ‘trial and error.’ Or if a business project or investment turns out to be an unprofitable venture, we abandon it and try investing elsewhere. Only in the Vietnam war do we suddenly find that, having launched a disaster, we are stuck with it forevermore and must continue to pour in blood and treasure until eternity.”
I’m editing a new collection of Rothbard’s work, entitled The Coming American Fascism and Other Essays, due out from the Ludwig von Mises Institute pretty soon, which is where I came upon this, and it got me to thinking: maybe it wasn’t the 9/11 terrorist attacks that tore a hole in the space-time continuum and blew us into Bizarro World – maybe it happened much earlier.
At any rate, The Donald’s bloviations about staying in Iraq are nothing new: the man is a veritable volcano of well-worn bromides which he keeps stored under his toupee and emits when the occasion calls for it. Which wouldn’t distinguish him from most other politicians except for the fact that Trump’s words might as well be coming out of the mouth of a twelve-year-old. For example, in spite of his alleged opposition to the Iraq war, in 2011 he told a reporter:
“I always heard that when we went into Iraq, we went in for the oil. I said, ‘Eh, that sounds smart.’"
Which is precisely what a somewhat disturbed adolescent is wont to do: grab someone else’s lunch money if he thinks he can get away with it. Elaborating on his larcenous plan in 2011, Trump averred:
“I very simply said that Iran is going to take over Iraq, and if that’s going to happen, we should just stay there and take the oil. They want the oil, and why should we? We de-neutered Iraq, Iran is going to walk in, take it over, take over the second largest oil fields in the world. That’s going to happen. That would mean that all of those soldiers that have died and been wounded and everything else would have died in vain – and I don’t want that to happen. I want their parents and their families to be proud.”
Just like the criminally-inclined parents of a juvenile delinquent would be proud of their son’s very first bank heist. As Rothbard was fond of saying: “Are we to be spared nothing?”
Trump’s foreign policy views belie his reputation as an unconventional politician who’s willing to say what others don’t dare even think to themselves. Indeed, he sounds like most of the other GOP presidential wannabes when it comes to the pending nuclear deal with Iran:
“Take a look at the deal [Obama’s] making with Iran. [If] he makes that deal, Israel maybe won’t exist very long. It’s a disaster. We have to protect Israel. And we won’t be using a man like Secretary Kerry that has absolutely no concept of negotiation, who’s making a horrible and laughable deal.”
Is Trump willing to go to war with Iran? He positively drools at the prospect:
“America’s primary goal with Iran must be to destroy its nuclear ambitions. Let me put them as plainly as I know how: Iran’s nuclear program must be stopped – by any and all means necessary. Period. We cannot allow this radical regime to acquire a nuclear weapon that they will either use or hand off to terrorists. Better now than later!”
And speaking of drooling, get this:
“Who else in public life has called for a preemptive strike on North Korea?”
I’m glad you asked. The answer is: Ashton Carter and William Perry, the former the current Secretary of Defense and the latter a former Secretary of Defense. In their jointly authored book, Carter and Perry claim then-President Bill Clinton was minutes away from authorizing just such a strike before Jimmy Carter called with the news that the North Koreans were willing to negotiate. And then there’s Rep. Peter King, another loudmouth New Yorker in the Trump mold, not to mention James Woolsey, Bill Clinton’s CIA Director, as well as this guy.
So you think Trump is crazy? He may well be, but he’s just reflecting the general lunacy that afflicts large portions of the political class in this country. Far from opposing the elites, Trump is merely echoing – often caricaturing – their looniest effusions.
Speaking of loony effusions, Bill Kristol has said that he’s sick of the “elite” media dissing Trump. Dan Quayle’s Brain got out his neocon playbook to declare he’s “anti-anti-Trump.” Which is interesting, since the last time a Republican anti-immigration, anti-free trade candidate arose, Kristol and his fellow neocons were in a lather of fear and loathing: that’s because Pat Buchanan was not only one of the dreaded “nativists,” he was also militantly anti-interventionist. Buchanan dared to call out Israel’s amen corner as the agitators for Gulf War I and its successor: for that, he was branded an “isolationist,” a label affixed to him also on account of his economic nostrums. Yet those same nostrums, when given a far cruder expression by Trump, evince a kind of admiration in the Grand Marshall of the laptop bombardiers. And the reason for this is Trump’s limning of the neocons’ penchant for unabashed militarism and grandiose imperialism: The Donald told a Phoenix audience over the weekend that “I’m the most militaristic person in this room.” And his prescription for what we ought to do to counter ISIS sounds like a Weekly Standard editorial:
“I say that you can defeat ISIS by taking their wealth. Take back the oil. Once you go over and take back that oil, they have nothing. You bomb the hell out of them, and then you encircle it, and then you go in. And you let Mobil go in, and you let our great oil companies go in. Once you take that oil, they have nothing left. I would hit them so hard. I would find you a proper general, I would find the Patton or MacArthur. I would hit them so hard your head would spin.”
Finally, one has to wonder about the provenance of the Trump phenomenon. Seemingly coming out of nowhere, it’s been attributed to a populist upsurge against the regnant elites, who are so out of touch with the people that they never saw what was coming. The media, we are told, are biased against Trump – this is one of The Donald’s chief complaints – and now The People are rising up against the Washington-New York know-it-alls with their “big words” and pretentious airs.
Yet this analysis is lacking in one key ingredient: the facts. For the reality is that the media, far from ignoring Trump, have lavished so much attention on him that he’s eating up coverage that would otherwise go to the rest of the crowded Republican field. And that may be a clue as to what’s really going on here….
The usual “mainstream” media tactics regarding a political outsider they hate is to ignore him or her: the example of Ron Paul should suffice to make this point. Indeed, Jon Stewart pointed this out in a memorable “Daily Show” segment, and it took Paul three runs for the White House to get their attention. Trump has suffered no such fate: quite the opposite, in fact. The Donald’s every demagogic pronouncement is faithfully recorded and broadcast far and wide. Over a hundred reporters crowded into his latest appearances in Las Vegas and Phoenix. Jeb Bush, for all the many millions stuffed into his campaign coffers, couldn’t buy that kind of exposure.
This gift to the Trump campaign is being celebrated by Democratic politicos and consultants as if it were manna from heaven. The Republican “brand,” they aver, is being sullied beyond redemption, and they’re watching this unanticipated and providential miracle from the peanut gallery with unalloyed glee.
And yet … just how unanticipated is it?
As San Francisco Chronicle columnist Debra Saunders points out, Trump is not really any kind of Republican, and, what’s more, his links to the Clintons are well-documented and close:
“In 1987, Trump registered as a Republican in New York. But in 1999, he registered with the Independence Party. In 2001, he registered as a Democrat. In 2009 he was back in with the GOP.
“Hillary Rodham Clinton sat in the front row at Trump’s 2005 wedding with Melania Knauss.
“According to Politico, Trump has donated more than $100,000 to the Clinton Foundation.
“In the 2006 cycle, Trump donated $5,000 to the Democratic Senatorial Campaign Committee, $20,000 to the Democratic Congressional Campaign Committee, but only $1,000 to the National Republican Senatorial Committee.
“When Trump flirted with running for president in 2012, CNN reported he had given $541,650 to federal Democratic candidates and committees since 1990 – more than the $429,450 he contributed to GOP candidates and committees.”
National Review‘s Jonah Goldberg rips the veil off Trump’s alleged nativism in a by turns anguished-and-amused plea to his fellow conservatives not to be taken in by The Donald’s act:
“You seem to think he’s an immigration hardliner, and he’s certainly pretending to be. But why can’t you see through it? He condemned Mitt Romney as an immigration hardliner in 2012 and favored comprehensive immigration reform. He told Bill O’Reilly he was in favor of a ‘path to citizenship’ for 30 million illegal immigrants:
“Trump: ‘You have to give them a path. You have 20 million, 30 million, nobody knows what it is. It used to be 11 million. Now, today I hear it’s 11, but I don’t think it’s 11. I actually heard you probably have 30 million. You have to give them a path, and you have to make it possible for them to succeed. You have to do that.’
“Question: Just how many rapists and drug dealers did Donald Trump want to give green cards to?”
Trump has been playing the media with his supposed presidential ambitions for years, but it was clear then that it was just The Donald doing what he does best – promoting himself. So why now has he suddenly turned “serious”? I give that word scare quotes because 1) Serious is not a word one associates with a clown, and 2) It’s not at all clear that, for all his megalomania, he really thinks he can win the White House. He may be a lunatic but he’s far from stupid.
And so the question jumps out at us: Why now?
Although I have no concrete proof of my theory, there’s plenty of circumstantial evidence. His ties to the Clintons, his past pronouncements which are in such blatant contradiction to his current fulminations, and the cries of joy from the Clintonian gallery and the media (or do I repeat myself) all point to a single conclusion: the Trump campaign is a Democratic wrecking operation aimed straight at the GOP’s base.
Donald Trump is a false-flag candidate. It’s all an act, one that benefits his good friend Hillary Clinton and the Democratic party that, until recently, counted the reality show star among its adherents. Indeed, Trump’s pronouncements – the open racism, the demagogic appeals, the faux-populist rhetoric – sound like something out of a Democratic political consultant’s imagination, a caricature of conservatism as performed by a master actor.
Now I realize this is a “conspiracy theory,” and, as we all know, there are no conspiracies in politics. In that noble profession, everything is completely aboveboard and on the level – right?
Like hell it is.
- Censored By Sanction? Barclays Freezes Accounts Of Russia's News Agency
The UK has frozen the bank account of Russia's Rossiya Segodnya news agency without any explanation. "To close the account of one of the world’s leading news agencies is censorship, the direct obstruction of journalists’ work," Dmitry Kiselyov, head of the news agency, exclaimed, asking "what kind of press freedom and democracy can Britain claim to have if it prevents one of the world's largest news agencies from working in the country?" As RT reports, while no official justification for the move has been offered, a source in the banking sector told the agency the Exchequer has put Dmitry Kiselyov on an anti-Russian sanctions list. With David Cameron in full tyrannical 1984-mode, this latest move is perhaps not entirely surprising (though we await the boomerang from Putin).
Last month, the EU drafted a plan to counter what it sees as “Russian disinformation activities” calling for “promotion of EU policies” in the post-Soviet space and the implementation of measures against Russian media.
The nine-page paper drafted by the EU Foreign Service specifically mentions RT, which according to the report broadcasts “fabrications and hate speech from their bureaus in EU cities.”
The Russian Foreign Ministry lashed out at the EU over the report, saying that the proposed plan is violating the right to freedom of expression and creating conditions of total discrimination against Russian media.
Barclay's bank froze a Rossiya Segodnya news agency account without explaining its reasons. The agency’s head Dmitry Kiselyov has called it “censorship.”
“To close the account of one of the world’s leading news agencies is censorship, the direct obstruction of journalists’ work,” Dmitry Kiselyov said. “What kind of press freedom and democracy can Britain claim to have if it prevents one of the world's largest news agencies from working in the country?”
No formal notification of the move or justification for it was immediately provided. A source in the banking sector told the agency the Exchequer has put Dmitry Kiselyov on an anti-Russian sanctions list, which could have led to the news agency’s account being frozen.
“This is illegal,” Rossiya Segodnya’s Editor-in-Chief Margarita Simonyan tweeted. “The sanctions imply that Kiselyov cannot travel to Europe and have personal bank accounts there. No sanctions were imposed on Rossiya Segodnya news agency.”
The sanctions list, which includes the head of Rossiya Segodnya news agency, was published on March 21. It characterizes Kiselyov as “central figure of the government propaganda supporting the deployment of Russian forces in Ukraine.”
Russia’s ambassador in the UK, Alexander Yakovenko, tweeted that the move is an example of using censorship against media that provides an alternative point of view.
* * *
Closure of @Rianru account by @Barclays without explanations an example of censorship against alternative media. pic.twitter.com/Ycyhmxgeue
— Alexander Yakovenko (@Amb_Yakovenko) July 13, 2015
One wonders when CNBC will have its account frozen for spewing constant propaganda?
- China Big Cap Stocks Continue Slide Despite Another Liquidity Injection; Margin Debt Rises For 2nd Day
"This has caused me a lot of heartache. It will take some time to recover," exclaims one disgruntled (and self-admitted greedy) Chinese investor who lost it all in the recent equity market demise. "It is forever a planned market, a planned economy," which as one China policy professor noted, means "the massive state intervention, especially preventing major shareholders from selling shares and going after short sellers, has damaged financial sector reform in profound and permanent ways." Having fallen over 4.5% from its highs into the close yesterday, the CSI-300 index and FTSE China A50 are both opening weaker as nearly 30% of securities remain halted and margin debt rises for the 2nd day in a row.
Following a major divergence in Chinese markets yesterday…
It seems high beta muppetry (ChiNext and Shenzhen) is being focused on for the save and the big cap SHCOMP and CSI-300 left more alone… which makes sense as Shenzhen is where the majority of halted stocks remain.
And the divergence continues today…
Some more liquidity injected…
- *PBOC TO INJECT 20B YUAN WITH 7-DAY REVERSE REPOS: TRADER
But it's not helping.
And today it is following through weaker…
- *CHINA'S CSI 300 STOCK-INDEX FUTURES FALL 1.2% TO 4,100
- *CHINA'S SHANGHAI COMPOSITE INDEX FALLS 1% TO 3,929.32 AT OPEN
And FTSE China A50 is reverting lower rapidly…
- *FTSE CHINA A50 INDEX FALLS 2%
And just as we warned earlier, they will never learn!!
- *SHANGHAI MARGIN DEBT REBOUNDS FOR SECOND DAY AFTER STOCK ROUT
And PBOC weakened the Yuan by the most in 2 weeks.
Charts: Bloomberg
- Miners Buried In Billions Of Debt After "Colossal Misjudgment Of Demand"
If one had to craft a narrative around the state of the global economic “recovery”, it might go something like this. Wildly optimistic assumptions about the sustainability of China’s torrid economic growth (and the voracious demand for raw materials which accompanied it), led to overbuilding and oversupply in the lead up to the crisis. In the aftermath of 2008, not only have multiple rounds of central bank money printing failed to provide a meaningful boost to aggregate demand, but global trade has also been hampered by China’s transition from an investment-led, smokestack economy to a model driven by consumption and services.
As Goldman put it in May, “there are no other markets large and/or dynamic enough to offset a slowdown in China in the foreseeable future, and we forecast trade volumes to stabilize in the period to 2018.” This has been bad news for commodities as the following chart makes abundantly clear:
It’s also bad news for the global mining industry which, as WSJ reports, borrowed “heavily” in anticipation of neverending Chinese demand. Here’s more:
As forecasts predicting endless growth in China’s appetite for raw materials became a matter of industry faith, mining companies borrowed extensively to build networks of pits, railway lines and port terminals. Megadeals abounded as a merger-and-acquisition frenzy took hold. Cheap borrowing costs, thanks to low global interest rates, fueled the splurge.
Now, as China’s hunger for resources ebbs and mining companies’ profits suffer amid falling commodity prices, those debts have become an albatross around the industry’s neck.
Amid a slump in Chinese share prices last week, metals such as copper and aluminum fell to near six-year lows. Iron ore at one point hit its weakest level for a decade.
“There’s been a colossal misjudgment of future demand,” said Dali Yang, professor of political science at the University of Chicago. “That long boom made it especially difficult for people to expect anything otherwise. Many bought the big story about urbanization, instead of thinking how things could go bad.”
The world’s largest mining companies by market value had accumulated nearly $200 billion in net debt by 2014, six times higher than a decade ago, according to consultancy EY, while their earnings only increased roughly two-and-a-half times. Large mining companies have written off roughly 90% of all the acquisitions they made since 2007, according to Citigroup Inc.
Even if top mining companies devoted all their earnings less investment spending to paying down debt, it would take up to a decade to clear the decks, according to a Wall Street Journal analysis of EY data.
Mining companies cut big project spending recently, but many still face the decision to reduce dividends to shareholders, or borrow more to keep funding high payouts, risking downgrades to their credit ratings that would drive up interest costs—even as they still need to spend to shore up aging mines. “Something has to give,” said EY’s global mining leader, Mike Elliott.
An old-fashioned gold-rush mentality underpinned the mining sector’s debt binge. The logic was simple. As China’s economy grew, and more Chinese people moved from villages to cities, the country would need ever-increasing amounts of metals—particularly the steelmaking ingredient iron ore—to build homes, office buildings and other infrastructure.
“Analysts are popularly criticized for ?thesis creep, the incremental mutation of a call’s drivers over time, such that it’s not really clear that the original call was just plain wrong,” said Morgan Stanley mining analyst Tom Price. “I suspect the same thing’s happened here with the Big Mining’s view on China’s iron ore.”
This serves as still more evidence of how central bank policy, ostensibly designed to stoke inflation and save the world from a brush with the deflationary boogeyman, has ironically served to perpetuate the global deflationary supply glut, a dynamic we’ve outlined on a number of occasions this year, but which found perhaps its most unequivocal expression in “When QE Leads To Deflation: A Look At The Confounding Global Supply Glut.” Here’s what we said in April:
Those who have access to easy money overproduce but unfortunately, they do not witness a comparable increase in demand from those to whom the direct benefits of ultra accommodative policies do not immediately accrue. Meanwhile, governments are reluctant to spend in the face of heavy debt burdens and increased scrutiny on fiscal policy in the wake of the European debt crisis while China, that all important source of voracious demand, is in the midst of executing the dreaded “hard landing.
Rock-bottom borrowing costs and easy access to capital markets made possible by accommodative central bank policies tempt insolvent producers to keep producing, contributing to their own demise by driving prices even lower, a vicious circle which creates Matt King’s dreaded “zombie companies”:
And finally, in an effort to connect all the dots, we’ll close with the following from Credit Suisse, who notes that another theme we’ve been keen to emphasize lately is in fact serving to exacerbate sluggish demand for the world’s commodities surplus:
Three years on from commodity price peaks and we are still searching for the floor in bulks pricing, let alone any recovery. This is not the usual bust after a mining boom, but the down-half of the supercycle. Rather than a couple of excess mines, the entire iron ore and coal sectors are geared towards growth that has gone missing. For the rest of the metals, with China’s demand drive cooling, we have to return to looking at global growth. Unfortunately, money supply is contracting, with governments running austerity budgets and corporates returning cash to investors. Commodity consumption cannot grow when investment is spurned.
- How The Greek Deal Almost Collapsed At 6am In The Morning
What began at Saturday’s Eurogroup meeting as a contentious exchange between EU finance ministers (who experessed their extreme consternation at the projected size of a Greek ESM package which was suddenly 43% larger than the figure from the Greek proposal thanks to a €25 billion provision for bank recapitalization) nearly ended in a Grexit, both figuratively and literally when, at 6am Monday morning Brussels time, Greek PM Alexis Tsipras headed for the door after discussions with Angela Merkel hit what both leaders deemed to be an intractable stalemate.
Or so the story goes.
For those who enjoy a good narrative, here are the details via FT:
The closest Greece has come to leaving the eurozone was at around 6am on Monday morning, just as dawn was breaking over Brussels.
Alexis Tsipras of Greece and Angela Merkel, the German chancellor, decided after 14 hours of anguished talks that they had reached a dead end. With no room for compromise, neither saw any reason to carry on. Grexit was the only realistic option.
As the two leaders made for the door it was Donald Tusk, the president of the European Council, who moved to prevent the fatigue and frustration from triggering a historic rupture for the eurozone.
“Sorry, but there is no way you are leaving this room,” the former Polish prime minister said.
The sticking point was the size and purpose of a privatisation fund to be backed by sequestered Greek assets. Ms Merkel wanted the €50bn of sales to be devoted to debt repayments; Mr Tsipras saw that as a national humiliation that would cede control of assets worth almost a third of Greek national income. His alternative was a smaller fund, whose proceeds would be reinvested in Greece.
A compromise was ultimately found after more than an hour discussing nearly a dozen different structures. It was to be the coda to a weekend that featured one of the most exhausting and fraught negotiations in a seemingly interminable crisis that has provided the EU’s sternest test.
Yes, a “compromise” was found, and one which has undoubtedly left the majority of Greeks wishing Tsipras had ignored Tusk and simply announced to the world that the drachma was about to make its not-so-triumphant return to the global FX markets because by sticking around, the PM who came to Brussels with a clear mandate to lead his country out of the euro “with his head held high” (to quote Nigel Farage) left without €50 billion in airports, planes, and infrastructure and more importantly, without the collective pride of the Greek people.
Thanks Donald Tusk.
- "Someone Has To Be Held Accountable", House Committee Presses Fed On Leaks
When last we checked in with Rep. Jeb Hensarling, the Chairman of the House Committee on Financial Services, he was in the process of learning a frustrating lesson about central bankers in the post-crisis world.
What Jeb might not have realized when he subpoenaed the Fed for information on how the September 2012 FOMC minutes managed to get leaked to Medley Global Advisors (just four months after Janet Yellen met with the firm) is that whatever pretension of accountability the position of Fed chair retained in the lead up to the crisis disappeared entirely when Ben Bernanke ‘saved the world’ from financial armageddon in 2008.
Since then, central bankers have become celebrities and like celebrities, are generally above the law, a fact Yellen probably thought she had made clear to Hensarling when she simply refused to cooperate with the subpoena.
As a reminder, here is the sequence of events (from the beginning):
On October 3, 2012, consulting firm Medley Global Advisors sent a newsletter to clients entitled “Fed: December Bound.”
The “special report” essentially constituted an early leak of the minutes from the FOMC’s September meeting.
Source: ProPublica
An internal investigation by then-Chairman Bernanke revealed that some members of the committee had met with the firm that year but the names were not disclosed. On April 15, Congress sent Yellen a letter requesting that the Fed furnish a list of names no later than April 22.
That deadline came and went with no response.
On May 4, the Fed acknowledged a DoJ and OIG criminal investigation into the leak, and in the same letter, Yellen admitted that indeed, she had met with the analyst who penned the newsletter at the center of the controversy.
Subsequently, The Committee on Financial Services subpoenaed the Fed for records related to the central bank’s review.
The Fed has declined to comply in full citing the ongoing criminal investigation. More specifically, Yellen says the OIG has advised the Fed that providing access to the information requested by congress would risk “jeopardizing the investigation.”
Well, Hensarling – bless his heart – isn’t giving up and will now interview “a number” of Fed staffers in connection with the leak according to WSJ. Here’s more:
A House panel has lined up “a number” of interviews with Federal Reserve staffers related to the possible leak of confidential information from a 2012 Fed policy meeting, the panel’s chairman said in an interview.
House Financial Services Committee Chairman Jeb Hensarling (R., Texas) said the Fed has no legal basis for refusing to comply fully with a subpoena from the committeeon the leak probe. He also argued the Fed has no grounds to invoke “executive privilege,” the authority claimed by the president or other executive branch agencies to avoid releasing certain information.
“They are violating the law at the moment,” Mr. Hensarling said.
Fed Chairwoman Janet Yellen has said turning over the information at this time could interfere with an ongoing criminal probe of the matter. She said the Fed intends to cooperate as soon as its inspector general, which is conducting the criminal probe with theJustice Department, indicates that doing so won’t compromise their investigation.
Ms. Yellen did, however, provide the names of Fed staffers who had contact with the policy information service firm that published the information.
“We do have transcribed interviews with a number of witnesses that are lined up, but we haven’t quite seen eye-to-eye on the production of documents,” Mr. Hensarling said, adding that he is trying “to be respectful” and work with the central bank.
Asked if the committee may move to hold the Fed chairwoman in contempt—the next step in the process—Mr. Hensarling declined to say.
“We want the chair to tell the truth,” he said. “Somebody has to be held accountable.”
We sincerely wish Hensarling the very best of luck in this endeavor but we can’t say we are particularly optimistic about his chances.
Yellen will give her semi-annual Humphrey-Hawkins testimony to Congress on Wednesday and Thursday this week. Perhaps some brave soul will interrupt the litany of liftoff dialogue with some tough questions about transparency and accountability.
Then again, judging from the response WSJ’s Pedro da Costa got when he dared to question Yellen about the leaks, we doubt she’ll be very forthcoming if pressed.
* * *
Artist’s impression of the honorable Chairwoman if questioned about the leak:
- This Weekend's Greece Negotiations Explained In 60 Seconds (By Darth Vader)
“Sources” say this is how it all went down…
Because sometimes you just have to laugh… or you’ll cry yourself to sleep again.
h/t @ShoutingBoy
- Will Chinese Farmers Never Learn?
A 30-40% decline in indices and still it appears the average Chinese person thinks “making money trading stocks is easier than farmwork.” As the following chart shows, a thundering herd of margin calls, panicing policy makers, and media frenzy has done nothing to dampen renewed gambling fever in what is now the most speculative nation in the world as margin-financing as a percent of trading volumes has exploded once again in the last few days…
Margin’s back baby!!! You can’t keep a bad market down…
Source: @WeiDuCNA
BTFCrash… or CTFFKnife?
- David Einhorn Says Varoufakis "Must Not Be Familiar With The Tyler Durden School Of Negotiation"
Today everyone has chimed in to opine on what was, without doubt, the most historic weekend in European history: one in which we saw the Eurozone’s true face when, despite not have a legal right to do so, Germany almost unilaterally expelled “temporarily” one of its core members. Now, it’s David Einhorn’s turn.
* * *
Last year, it appeared that Greece had finally turned the corner after years of suffering through imposed austerity and the resultant 25% collapse in GDP. Much like the Seahawks’ ill-fated decision to pass the ball at the end of Superbowl XLIX, instead of giving it to monster running back Marshawn Lynch, Greece snatched defeat from the jaws of victory by electing the populist anti-austerity, pro-debt-writedown, Syriza coalition.
Puerto Rico’s governor recently said of its own debt, “This is not about politics; it’s about math.” The math for Greece is easy: austerity hasn’t improved the economy and its debts are unsustainable. Knowing this, Syriza no longer wanted to play the “extend and pretend” game. Further, Greece’s recently resigned finance minister Yanis Varoufakis believed they wouldn’t have to. Mr. Varoufakis, who kept reminding everyone that he is a professor of game theory, believed that the European leaders would prefer to make concessions now rather than manage the disruption of a Greek default. He must not be familiar with the Tyler Durden school of negotiation: the first rule of using game theory is you do not talk about using game theory. What’s more obvious is that Syriza didn’t understand what the game is.
This is not about math; it’s about politics. Consider that the main difference between Greece and France is that France is a big fan of extend and pretend. And as long as France says it will pay, its bonds might yield just a bit more than Germany’s. Though Greece has a superficially unmanageable ratio of debt to GDP, the debt had been restructured so that there is little debt service burden for the next several years. Politically, European leaders prefer to leave the future problems in the future. Syriza’s refusal to play along is a problem not just for bondholders but also for those holding seats of power. The European leaders fear that if Syriza can claim even a moral victory, it will inspire other European countries to oust their current leaders in favor of populist governments who campaign on the promise of debt repudiation.
Though Mario Draghi promised he would do whatever it takes to save the euro, that doesn’t include lifting a finger to assist Greece financially or in any way signal that the ECB has Greece’s back. Just days prior to the January elections, Mr. Draghi announced that the ECB would exclude Greece from quantitative easing for at least six months. Doing whatever it takes is proving to be a conditional promise, as denying Greece access to the capital markets is a key tenet of the European strategy to pressure Syriza.
For anyone still missing the joke, Bank of Japan Governor Haruhiko Kuroda summarized the view of the global central planners when he said, “ trust that many of you are familiar with the story of Peter Pan, in which it says, ‘the moment you doubt whether you can fly, you cease forever to be able to do it.’ Yes, what we need is a positive attitude and conviction.” Perception supplants reality. The moment leaders (or markets) start making it about the math, gravity comes into play.
The result is that Europe is unwilling to allow Syriza a face-saving compromise, even if that means Greece collapses and the rest of Europe suffers. At this writing, Syriza has capitulated by proposing a deal which leaves Greece with even more austerity than when negotiations began and no actual debt forgiveness. This might not be enough, as the grand goal of the European negotiators appears to be to discourage other countries from electing populists.
- Germany Just Killed Its Golden Goose
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Personally, like most of you, I always thought Germany, besides all its other talents, good or bad, was a nation of solid calculus and accounting. Gründlichkeit. And that they knew a thing or two about psychology. But I stand corrected.
The Germans just made their biggest mistake in a long time (how about some 75 years) over the weekend. Now, when all you have to bring to a conversation slash negotiation is bullying and strong arming and brute force, that should perhaps not be overly surprising. But it’s a behemoth failure all by itself regardless.
First though, I want to switch to what Yanis Varoufakis told the New Statesman in an interview published today, because it’s crucial to what happened this weekend. Varoufakis talks about how he was pushing for a plan to introduce an alternative currency in Greece rather than giving in to the Troika. But Tsipras refused. And Yanis understands why:
“Varoufakis could not guarantee that a Grexit would work …
…[he] knows Tsipras has an obligation to “not let this country become a failed state”.
What this means is that Tsipras was told by the Troika behind closed doors, to put it crudely: “we’re going to kill your people”. He was made an offer he couldn’t refuse. And Tsipras could never take that upon himself, even though the deals now proposed will perhaps be worse in the medium to long term, even though it may cost him his career.
Criticism of the man is easy, but it all comes from people never put in that position. Varoufakis understands, and sort of hints he might have had second thoughts too if he were ever put in that position.
There’s not much that separates Schäuble and the EU from the five families that rule (used to rule?!) New York City. If you need proof of that, come to Athens and check out the devastated parts of the city. Germany and the Troika are as ruthless as the mob. Or, rather, they’re worse.
My point is, their attitude and antics will backfire. You can’t run a political and/or monetary union that way. And only fools would try.
The structure of the EU itself guarantees that Germany will always come out on top. But they can only stay on top by being lenient and above all fair, by letting the other countries share some of the loot.
To know how this works, watch Marlon Brando, as Don Corleone, talk to the heads of the five families in the Godfather. You need to know what to do to, as he puts it, “keep the peace”. He’s accepted as the top leader precisely because the other capos understand he knows how.
The Germans have shown that they don’t know this. And therefore, here comes a prediction, it’ll be all downhill from here for them. Germany’s period of -relative- economic strength effectively ended this weekend. The flaws in its economy will now be exposed, and the cracks will begin to show. If you want to be the godfather, the very first requirement is you need to be seen as fair. Or you will have no trust. And without trust you have nothing. It is not difficult.
Germany will never get a deal like the EU has been for them, again. It was the best deal ever. And now they blew it, and they have no-one to blame but themselves. And really, the Godfather metaphor is a very apt one, in more ways than one. Schäuble could never be the capo di tutti capi, no-one would ever trust him in that role. Because he’s not a fair man. But he still tries to play the role. Big mistake.
The people here in Greece are being forced to pay for years for something they were never a part of, and that they never profited from. The profits all went to a corrupt elite. And if there’s one thing Don Corleone could tell you, it’s that that’s a bad business model. Because it leads to war, to people being killed, to unrest, and all of that is bad for business.
I must admit, I thought the Germans were smarter than this. They’re not. That much is overly obvious now. No matter what happens next, deal or no deal on Greece, and that’s by no means a given yet, don’t let the headlines fool you, no matter what happens, Germany loses.
It’s not just about Greece, it’s about the whole EU. The Troika thinks that by scaring the living daylights out of the periphery, its power will increase. They even think it’ll work with France. Good luck with that. They’ll be facing Marine Le Pen soon, and Podemos, and M5S, and these antics will not work on them.
I guess the main thing here is that Don Corleone was not a psychopath or sociopath, and that’s more than you can say for Schäuble and Dijsselbloem and Juncker and their ilk. These people simply lack the social skills to lead any organization, because all they understand is power and force, and that is simply not enough. While brute force may look attractive and decisive and all, in the end it will be their undoing.
I’m sure the vast majority of them have seen the Godfather films, but they’ve just never understood what they depict; they don’t have the skillset for it.
Germany just killed its golden goose. And boy, is that ever stupid. They could have had -again, relative, we’re in a recession- peace and prosperity, and they’re blowing it all away.
Tsipras for obvious reasons cannot talk about the threats he’s been receiving, but he did give up some hints early this morning:
• “We took the responsibility for the decision to avert the most extreme plans by conservative circles in Europe..”
• “I promise you that as hard as we fought here, we will now fight at home, to finish the oligarchy which brought us to this state.”
• “We resisted demands for the transfer of state assets abroad and averted a banking collapse which had been meticulously planned.”
• “… decision to avert the most extreme plans by most extreme circles in Europe”
The Italians and Spanish and French have noted every word of this, and more. Europe as it is, is already over. Everything from here on in is a mere death rattle.
- How High Frequency Traders Broke, And Manipulated, The Treasury Market On October 15, 2014
We were amused to read some interpretations of today’s long-awaited joint-staff report (prepared by the Treasury, Fed, SEC and CFTC) attempting to “explain” the flash smash in Treasury prices on October 15, 2014 when as a reminder, Treasury prices exploded and yields plunged just around 9:34 am from a level of 2.20% to just over 1.95%…
… which did everything in their power to deflect attention from High Frequency Trading.
Case in point: the WSJ, which earlier today said that “U.S. officials concluded there was ““no single cause” of the unprecedented volatility that hit U.S. Treasury markets Oct. 15, 2014, citing instead broad changes in the structure of Treasury markets, including the growing role of high-speed trading.”
To an extent the WSJ is right: the report does everything in its power to obfuscate and shift the blame away from the true culprit: “For such significant volatility and a large round-trip in prices to occur in so short a time, with no obvious catalyst, is unprecedented in the recent history of the Treasury market,” the report said of the events on October 15.
To push the official position, the WSJ adds that “the staff examined nonpublic trading data before, during, and after a 12-minute window during the morning of October 15 in which the yield on a key U.S. Treasury note plummeted, then quickly rebounded. They concluded there was “no obvious catalyst” in the news that morning.”
That is correct: the plunge came out of nowhere, with no catalyst at all – something market watchers see every day in equities, commodities and FX – and if it had all the telltale signs of an HFT momentum-ignition stop hunting spasm gone horribly wrong, it is because that was precisely what it was.
Which is why the WSJ promptly trotted out some of the most washed out and discredited experts it could find: such as Irene Aldridge.
Irene Aldridge, a markets expert at ABLE Alpha Trading Ltd., who sits on a subcommittee addressing high-frequency trading at the Commodity Futures Trading Commission, said her firm found “a spike in abnormal market activity” on October 15.
She said she didn’t see much evidence that high frequency trading firms were chiefly to blame for the spike, and instead pointed to a wide array of macroeconomic forces and large cross-border trading activity that occurred that day and in the days prior.
The fact that Irene Aldridge who once upon a time, long before HFT started strategically crashing every single market in which they were introduced courtesy of Getco, Virtu and Citadel, appeared with Jon Stewart’s “cash cow” to “explain” HFT…
… is less troubling than the fact that she actually sits on a CFTC HFT subcommittee because she is perceived to be an expert.
In any event, while the WSJ did everything it could to defend HFT, Bloomberg apparently was unaware that it had to pick its words carefully and do all in its power to defend Citadel’s (the NY Fed’s preferred arms-length trading venue) market manipulation in every asset class, and ahead of the report’s release said that “U.S. officials have concluded that high-frequency trading contributed to the Treasury market’s wild ride last October, a finding that will probably add to regulatory scrutiny of the industry.”
Further proof that Bloomberg’s Ian Katz did not get the memo that while the joint-staff report identified HFTs as the culprit behind the Oct. 15 “anomaly”, such an assessment was not to be made publicly was the next paragraph:
While a soon-to-be-published government report won’t point to just one cause, it will cite speed traders as playing a key role, according to a person with direct knowledge of the study. Treasury yields plunged the most in five years on Oct. 15, 2014, before recovering, fueling a months-long debate over whether something has fundamentally changed in a $12.7 trillion market that most investors consider a safe haven.
* * *
While Fed officials concede Dodd-Frank has probably had some effect on price swings, they’ve joined Lew in flagging high-frequency trading as an important factor.
The strategy typically involves using ultra-fast technology and placing computer servers close to exchanges to react to market data as quickly as possible. Such trading has drawn increased attention from regulators since the May 2010 flash crash, when $1 trillion of value was briefly erased from U.S. stocks.
“Their trading patterns are different,” Fed Governor Lael Brainard said last week at an event in Washington. “As they take a preponderance of the trading activity in some markets, that no doubt also may change the patterns of liquidity resilience.”
So back to the report which indeed tries to distance itself from HFT as the primary culprit of the yield crash at 9:34 am, by saying “While no single cause is apparent in the data, the analysis thus far does point to a number of findings which, in aggregate, help explain the conditions that likely contributed to the volatility.”
And an amusing sideline: after back in 2009 Zero Hedge was one of the first to use the term High-Frequency Trader, or HFT, a monicker which since stuck and has become a popular pejorative to explain away all broken markets and microstructure manipulation, the report first and foremost does what every good report seeking to defend the object it is accusing, does: change the name. Sure enough, gone is “HFT“, and instead the report uses “PTF” or “Principal trading firms” instead, which is clear enough: since HFTs trade for their own account, we are happy with this new name, which unfortunately for the Modern Markets Initiative lobby which surely spent a lot of money to get HFT changed to PTF, will not stick.
So any time readers encounter PTF, just think HFT.
What are the report’s main findings:
- An analysis of transactions shows that, on average, the types of firms participating in trading on October 15 did so in similar proportions to other days in the sample data. Principal trading firms (PTFs) represented more than half of traded volume, followed by bank-dealers. Both bank-dealers and PTFs continued to transact during the event window, and the share of PTF trading increased significantly.
- The trading volume of PTFs and bank-dealers in the cash and futures markets is highly concentrated in the most active firms. In the cash market, for instance, the 10 most active PTFs conducted more than 90 percent of the trading activity of all PTFs on October 15, while the 10 most active bank-dealers accounted for nearly 80 percent of the trading activity of all banks. The concentration findings were generally similar for the futures market.
- A review of position changes shows sizable changes in net positions by different types of participants following the retail sales data release. However, during the event window, only modest changes in net positions occurred, suggesting that changes in global risk sentiment and associated investor positions may help to explain a portion of the price movements during the day, but do not appear to explain the round-trip in prices during the event window itself.
- During the event window, an imbalance between the volume of buyer-initiated trades and the volume of seller-initiated trades is observed, with more buyer-initiated trades as prices rise in the first part of the window, and more seller-initiated trades as prices fall in the second part of the event window. Such imbalances are common during periods of significant directional market moves. Both bank-dealers and PTFs initiate these liquidity-removing trades, though PTFs account for the largest share. At the same time, strong evidence suggests that PTFs, as a group, also remained engaged as liquidity providers throughout the event window, implying that more than one type of PTF strategy was at work.
- Several large transactions—though not unusual in size relative to other sample days— occurred between the retail sales release and the start of the event window. Some coincided with a significant reduction in market bid and offer depth—both during this interval and at the start of the event window itself. But during the event window, the analysis does not suggest a direct causal relationship between the volatility and one or more large transactions, orders, or substantial position change.
- The significant reduction in market depth following the retail sales data release appears to be the result of both the high volume of transactions and bank-dealers and PTFs changing their participation in the cash and futures order books. During the event window, bank-dealers tended to widen their bid-ask spreads, and for a period of time provided no, or very few, offers in the order book in the cash Treasury market. At the same time, PTFs tended to reduce the quantity of orders they supplied, and account for the largest share of the order book reduction, but maintained tight bid-ask spreads. Both sets of actions prompted the visible depth in the cash and futures order books to decline at the top price levels.
- The time required by the futures exchange to process incoming orders, or “latency,” increased just prior to the start of the event window. This latency was associated with a significant increase in message traffic—in this case elevated due to order cancellations. Transaction data also show a higher incidence of “self-trading” during the event window. For the purpose of this report, self-trading is defined as a transaction in which the same entity takes both sides of the trade so that no change in beneficial ownership results. Although self-trading represented a non-trivial portion of volume, this activity also appears on days other than October 15 in the sample. Any causal connection between the unusually high level of cancellations or the self-trading and the event window at this time remains unknown.
Which brings us to the report’s conclusion:
In sum, record trade volumes, a decline in order book depth, changes in order flow and liquidity provision, and notable and unusual market activity together provide important insight into the factors that may have contributed to the heightened volatility, decreased liquidity, and round-trip in prices on October 15.
In short: a lots of words to show just one chart which is the only one that mattered.
What does this chart show? Recall from the top chart that the peak of the chaotic yield plunge (and price surge) took place at precisely 9:34 (and 3 second). Here is the official explanation of what the chart shows:
Figure 3.29 shows the message rate and latency build-up within a single second around 9:34 ET at millisecond resolution, illustrating how a peak message rate of around 40 messages per millisecond results in a gradual slowing down of the response time of the matching engine. Once the messaging rate fell, trading platform latency quickly returned to previous low levels. While the message cancellations observed very near the beginning of the event window were not a direct cause of price movements at the time given their distance from the market price, the associated latency would have affected the trading speeds of other market participants by increasing the time lag between initial order entry and possible execution on the platform. As some market participants monitor latency and include it as a variable in their trading strategies, sudden changes in latency would cause them to adjust their behavior.
Still unclear: here’s more. “Given the finite capacity of any matching engine to simultaneously process messages and execute matches between buyers and sellers, extremely high message rates appeared to cause trading platform latency to temporarily jump higher.”
This is what happened: a massive burst of quote stuffing (seen with absolute clarity on Figure 3.29 above) in the form of a surge in message, resulted in a burst of accumulated order latency, which in turn was the catalyst to send the price soaring from 129 to over 130 in the span of 5 minutes, and then sliding back down again once the quote stuffing effect was eliminated.
Seem familiar? This is precisely what we, in collaboration with Nanex, said was the reason for the Flash Crash of May 2010 – not some scapegoat Indian trading out of his parent’s basement in a London suburb, but either a malicious, premeditated rogue algo or else a freak algorithm whose programmers lost all control over. For those who have forgotten, we urge re-reading: “How HFT Quote Stuffing Caused The Market Crash Of May 6, And Threatens To Destroy The Entire Market At Any Moment.”
Whichever case, it was quote stuffing that single-handedly destabilized the market, first in stocks in May 2010 and then in Treasurys in October 2014.
Confirming that it was all PTFs, pardon HFTs, is a chart showing the burst in volume by firm/order type which not surprisingly was all HFT…
… coupled with the collapse in market depth as HFT added tons of volume and eliminated all the market debt, also known as liquidity.
As it turns out HFTs not only don’t add liquidity, they actively eliminate it! How ironic that this is precisely the opposite of what the HFT lobby claims it does. And this time it is not some tinfoil hat allegation: it is documented in a Fed, Treasury, SEC, CFTC paper.
Furthermore, it wasn’t just quote-stuffing with order message blasts, it is also a surge in order cancelations and self-trading – all telltale signs of rogue HFT algos.
Analysis of transaction and order book data during the event window revealed two notable patterns in activity on October 15, high levels of cancellations and self-trading, but whether this activity contributed to the rapid price movements is unknown.
The cancellation activity witnessed in the invisible futures order book also resulted in a highly volatile total order book depth (including visible and invisible orders) in the futures market (Figure 3.30). In the futures market, the portion of the order book that is not visible to market participants (that portion that rests at levels outside the top 10 best bid and offer price levels) can represent anywhere from 50 to 90 percent of total market depth—witnessed both on October 15 and the control days.
Ok cancellations we have covered extensively in the pastt but self-trading, as in the HFT firms “buys” and “sells” from itself? Why yes:
A second notable aspect of trading on October 15 was the heightened level of self-trading during portions of the event window. Self-trading, for the purpose of this report, is defined as a transaction in which the same entity takes both sides of the trade so that no change in beneficial ownership results. Self-trades appeared in both cash and futures market data at varying levels across firms and time periods.28 In the cash market for 10-year Treasury securities, for example, self-trading represents 5.6 percent of the total activity on control days, and 4.2 percent on October 15 (Table 3.9).
How is this possible, or better, legal? Simple: this is precisely what HFT is all about – creating the illusion of activity to force out real orders and frontrun them.
The bulk of self-trading in cash and futures markets was observed among PTFs, perhaps due to the fact that such firms can run multiple separate trading algorithms simultaneously. For instance, one of these algorithms could specialize in placing buy or sell limit orders at the top of the order book while another could specialize in initiating trades given specific conditions in that market, potentially leading one algorithm to end up being matched with another algorithm from the same firm. In addition to PTFs, the cash data also showed a very small amount of selftrading by bank-dealers and hedge funds, some of which are also known to trade algorithmically.
Sure enough, in addition to everything else noted previously, self-trading was a dominant feature during the flash smash period:
During the event window, the data showed that the share of overall transactions resulting from self-trading was substantially higher than average. At the 10-year maturity, it reached 14.9 percent and 11.5 percent for cash and futures, respectively, during the move up in prices in the event window (Figure 3.31). During the retracement, when the price moved back down rapidly, the share of self-trading declined to 1.2 percent and 4.8 percent in cash and futures, respectively. Moreover, the concentration of self-trading volume among PTFs was very high in both markets during the event window. Another aspect of self-trading flows during the event window was its directional nature (Figures 3.32 and 3.33). For example, between 9:33 and 9:39 ET, the cumulative net aggressive buyer- minus seller-initiated self-trade volume increased by around $160 million in the cash 10-year note, accounting for close to one-fifth of the total imbalance between buyer and seller initiated trades observed over that time interval
So… say you want to sent the price of a security, whether cash or derivative, soaring, what do you do? Why you just buy and sell from yourself at a furious pace, lifting the bid ask ever higher to draw out any organic, hidden order flow. And one you have achieved your goal, or fail to draw out momentum piggy backers, or halt self-trading and the price tumbles back to pre-manipulation levels.
And there you have it: this is precisely how HFTs, pardon, PTFs, caused the bond market shock of October 15. But don’t worry, according to both the report, the WSJ, and Irene Aldridge, there was not “one single cause.”
* * *
All of this is known to our readers: we have covered virtually every aspect of fragmented, broken markets and price manipulation via HFT algorithms for over six years. We are delighted to see the biggest market regulators and supervisors admit, if tacitly, that our “conspiracy theories” have been right all along.
But what is surpising is that unlike the SEC’s Flash Crash report which was a travesty and blamed the crash on Waddell and Reed, to be followed by another travesty of a report, one which has sent an innocent trader behind bars, this time HFT is explicitly, if not deliberately, singled out.
Which in our opintion sets the stage. The stage for what? Why blaming the upcoming market crash on HFTs, of course. As Bloomberg commented, these findings “will probably add to regulatory scrutiny of the industry.”
The reality is that regulators know very well what is really going on in the markets, and now that HFTs have been exposed as the catalyst for the bond market crash, when the inevitable stock market crash – a crash that will be the result far more of the ruinous decisions of central planners around the globe – it will be the HFTs, pardon, PTFs that will be the first to blame, while the central bankers do their best to quietly slip out to a non-extradition country.
Just look at China: the government is so terrified of losing control over its own stock market bubble and the potential for violent, social conflict that would result, that it will throw everything at the market to support it. In the US, the regulators are already one step ahead: they know a crash is inevitable, and the only thing they need is the scapegoat to blame it on when it all comes crashing down.
Nameless, faceless algos would be just the perfect scapegoat.
h/t Eric Hunsader
Source: Joint Staff Report: The U.S. Treasury Market on October 15, 2014
- Is the Dollar Signaling Another 2008-Type Autumn is Coming?
At this point the Greek crisis is beyond farcical; you couldn’t make up a more absurd plot if you tried.
Greece’s Prime Minister Alexis Tsipras allowed Greece to default on a debt payment to the IMF in order to give the Greek people the opportunity to vote on whether or not to accept a particular EU offer.
Last week, the Greek people overwhelmingly voted against the offer. Tsipras then went to the EU to seek a compromise… only to be told that EU leaders were fed up and wanted Greece out of the Euro. So Tsipras agreed to a deal that is much worse for Greece.
The whole deal has blown up in his face. And it’s going to consolidate Germany’s control of the EU. Instead of shifting power away from Germany by introducing the threat of “default” to negotiations, this deal added a new weapon the Germany’s arsenal: the threat of Euro expulsion.
The threat has worked. Greece must fork over €50 billion in assets in exchange for the deal. By assets, I mean “airports, infrastructure, and most certainly banks.”
This represents an incredible 27% of Greek GDP. Greece, in essence, is handing over a quarter of its economy to Germany control. So much for any notion of borders, independence, or even sovereignty. Greece is now, for all extensive purposes, something of a German colony.
Greece also has to submit to six months of capital controls.
Interestingly, stocks are moving higher on the news… but so is the US Dollar. This is likely due to the fact that while Greece will remain in the Euro, Greek banks remains completely insolvent. Also, why anyone would want to move capital into an economy or currency in which confiscation of assets, capital controls, and the like are allowed is beyond me.
Remember, stocks are the “dumb” money. The currency markets are ALWAYS ahead of them. So the US Dollar’s strength is indicative that “all is not fixed” in Euroland.
Indeed, the Dollar has just broken out of a falling wedge pattern. This is a BULLISH development.
The whole thing feels a bit like the summer of 2008 all over. Once again, the global economy is weakening, a significant crisis has erupted, and temporary solutions to said crisis are being hailed as a success.
And then, as now, the US Dollar’s strength was the first sign that all was NOT well, the crisis was nowhere near over, and that big trouble was stirring in the financial system.
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- US Automakers Worst Nightmare: Chinese Auto Inventories Explode In May
A week ago we exposed the massive number of cars piling up in GM's parking lots in China. A few days later, we note that Chinese auto sales have collapsed at the fastest rate in 3 years and an increasing number of new orders are being cancelled as the stock market crashes. But the triple whammy for US auto manufacturers – who have incessantly pitched China as their growth engine – is news from Huaxia Times that China's import car dealers saw inventory days reach a mind-blowing 143 days in May. For context, the normal average has been 24-36 days. Once again it appears the serial extrapolators at the automakers, excited by the serial extrapolators at the big banks have excitedly mal-invested right at the turn.
Car Sales tumbling…as The Wall Street Journal reports,
China sold 1.51 million passenger vehicles last month, down 3.4% from a year earlier, the China Association of Automobile Manufacturers said Friday. That compares with a 1.2% year-over-year rise recorded in May and a 3.7% increase in April.
The performance was the worst since February 2013 when car sales fell 8.3% on-year during the weeklong Lunar New Year Holiday when car showrooms are closed. Stripping out the holiday factor, the last time China’s car market posted a decline was in September 2012, when a territorial dispute between Beijing and Tokyo over a group of uninhabited islands in the East China Sea hit demand for Japanese cars.
… also cut its growth forecast for China’s automobile market in 2015 to 3% from the previous 7%.
“2015 will be an off-year for the Chinese car market,” said Dong Yang, a vice president for the auto manufacturers’ association. He said the slowdown was caused by a confluence of factors including the cooling economy, increasing restrictions on car ownership to combat congestion and pollution and stock market volatility.
“Neither a bull market nor bear market does good to car sales. Our surveys of dealers show that visiting volumes to car showrooms dropped sharply in the first-half,” said Mr. Dong.
…
“The painful market adjustment currently under way is far from over,” he said.
* * *
Auto Inventories exploding…
Huaxia Times: China's import car dealers saw inventory days reach 143 days in May vs. normal average at 24-36 days.
— Patrick Chovanec (@prchovanec) July 13, 2015
But, as we previously noted, it appears there just is no more room to stuff inventories in its Shenyang, Lianing province parking lots (as China has become the new car graveyard over the last 3 years)
But it's not just China… inventories are surging in America too…
Judging by the massive volume of cars 'parked' in GM's Shenyang Liaoning lots, it is clear that automakers learned nothing from the last "if we build it, they will come" channel-stuffing inventory surging dysphoria that, among other things, led to their last bankruptcy… if only Chinese buyers would take up the credit terms like Americans.
- Cashtration: As Goes Greece, So Goes The World
Submitted by Jeff Thomas via Doug Casey's International Man blog,
Recently, we’ve witnessed the bank holiday in Greece, the limitation as to how much the Greek people can withdraw from their accounts each day.
Not surprisingly, the mainstream press have focused on images such as the one above – a queue at an ATM – and discussed the difficulty of the Greek people in trying to run their lives on the €50-€60 that they’re allowed to withdraw each day.
The press then comment poignantly that “Something needs to be done.” The implication is that “someone”, either the banks or the government, need to find a way to deliver these people more money, so that they can continue to function economically.
Of course, the problem, and the very reason for the bank holiday in the first place, is that the money simply doesn’t exist.
For many years, governments have been attempting to expand the economy by encouraging debt. Governments (most notably the EU and US) have borrowed far more than they ever have in history, to the point that they’re now facing insolvency.
Further, the average citizen has been programmed to think that he can get ahead through increased debt. As a result, personal debt has risen to an unprecedented level.
But in order for someone to borrow, someone must offer to lend, and, of course, the banks have been the lenders. Banks typically make their profits by taking in deposits, then loaning out that money to others, making their profits on the interest.
This is a system that began in Europe hundreds of years ago and, although it has repeatedly resulted in disaster, continues to be the standard by which banks operate.
Theoretically, it’s a workable idea.
The banks maintain, say, 10% of the deposits in order to service daily transactions by depositors, and they loan out the rest. As long as depositors do not lose faith in the system and arrive in droves to take out their deposits, the system continues to work.
But today, when a bank provides a loan, it doesn’t hand over stacks of paper bills to the borrower. It simply processes a credit to his account. This allows the bank to offer far more loans and far larger loans.
If a bank holds, say, $10 million in deposits, it could conceivably offer $100 million in loans. That money, of course, does not exist, except as an electronic credit, but it allows the bankers to increase their profits tenfold.
Quite a temptation.
And it’s a temptation that has, at this point, become the norm in much of the world. What we’re witnessing is the greatest credit bubble/debt bubble that mankind has ever seen. What we’re seeing in Greece is not merely a country of socialistically inclined people behaving very foolishly. We’re seeing a small pin pricking a very large balloon.
(Editor's Note: Doug Casey recently wrote a very relevant article on this topic. Click here to read Unsound Banking: Why Most of the World’s Banks Are Headed for Collapse.)
As Goes Greece, So Goes the World
The tedious drama that we’ve been observing in Greece in recent years is far from over. Greek debt is tied to EU debt. EU debt is tied to world debt. The coming debacle may unfold in this manner:
- Greeks try to adjust to subsistence living, on what little the banks allow them daily.
- They make no payments on their own debt, as even mere subsistence is difficult.
- Companies do the same, as they’re having a hard time just paying wages and other overheads and can’t afford to pay interest on their loans.
- Greek banks continue to provide depositors with an “allowance”, whilst their income source (interest on loans) dries up.
- Banks become insolvent and cease paying “allowances” altogether. (And remember, this is the depositors’ own money that will be denied them.)
But, as stated above, Greece is not alone. Other EU countries that are on a similar precipice will be similarly affected. Each country, each “domino”, will fall more quickly than the one before it, as its people, having observed the pattern in other countries, lose faith in the system.
Meanwhile, governments will side with the banks, giving them free rein to do whatever they wish to save themselves, at the expense of depositors. Cashtration has begun in Greece but will spread to every country where banks have overstepped the mark and gone on a loan-provision spree in recent decades.
Further, a country such as Canada, which has not been so cavalier as the EU and US, is so inextricably linked with the US through banking and commerce, it will find itself equally impacted, even though they themselves tried to take a more responsible approach to loans.
In the midst of this, the populations of all affected countries will cry out for their governments to “Do something!”
Governments will respond by trying to cover their own responsibility in this debacle, as they have, for decades, been, not only the enablers of the bank debt spree, but have additionally run the governments themselves into debt beyond what can be repaid.
There will be no “solution”, as such. There will be an economic collapse and a Greater Depression.
At this point the reader may say to himself, “So, that’s it; we’re all toast. If this analysis is correct, there’s no hope for anybody.”
Not so. For anyone who has ever been a guest at a really great party, where the food and wine were seemingly endless and the mood infectiously jubilant, the outside world seemed not to exist. At a great party, the world outside appears unimportant.
Still, there are those who were either not invited, or chose not to go. They continued their lives soberly. In the aftermath of the party, they watch as the hung-over revellers leave. Although they may look upon the partygoers with disdain, they get on with their lives, relatively unaffected.
It’s the same with an “economic party”. Not everyone attends. Which is to say that there are presently countries where it is, and has always been, difficult to get a loan, either to buy a car or house, or to start a business.
Presently, these countries are looked upon as “backward”, as they are not charging ahead, as the more “prosperous” countries are. However, in the aftermath of The Great Economic Party, these countries will continue, relatively unaffected.
It’s left to the reader to determine to what degree his own country is involved in the party and to what degree his country will be impacted as the balloon pops. His assessment will suggest to what degree he will personally be “cashtrated”: forced by emergency conditions to be placed on an “allowance” by his bank and, eventually, to have that allowance end altogether as funds run out.
Sorry to say, it’s likely that the great majority who live in such jurisdictions will, as suggested above, be “toast”.
But there will be some who observe Greece and realize that the condition will spread and that there will be no solution by governments. They will take advantage of the brief time available and internationalise themselves as much as they are able.
It’s not the end, except for those who choose to remain at the party too long.
- The (Amended) Founding Principles Of The European Union
Presented with no comment…
Source: @g_mastropavlos
- Greece Just Lost Control Of Its Banks, And Why Deposit Haircuts Are Imminent
Yes, Greek banks may have been insolvent – something that was clear since the first bailout of 2010 – but at least the Greek state had control over them: as such it could have mandated mergers, recapitalizations, liquidity injections, even depositor bail-ins (perhaps the harshest lesson for the ordinary Greek population as a result of this latest crisis is that deposits are not “cash in the bank” but liabilities of insolvent financial organizations).
Starting on Wednesday that will no longer be the case.
Because while Greek banks will maintain their capital controls for months and withdrawals will be limited to €60 or less for months (the ECB is well aware that any boost to the ELA will result in a promptly surge in deposit outflows until the new ELA ceiling is reached, and so on ad inf) the one key change on Wednesday when the Tsipras government, whose coalition no longer has a majority in parliament and will have to rely on opposition votes, votes through the humiliating Greek “pre-deal” to unlock negotiations for the promised €86 billion in bailouts (which will be used almost entirely to repay the Troika) is that it will hand over the keys of Greek banks to the ECB.
Here is Reuters with this little known fact:
One of the preconditions imposed on Greece for a deal is that it signs into law European rules that would put euro zone authorities at the ECB and in Brussels, rather than Athens, in charge of identifying and closing or breaking up sick banks.
This in turn could lead to a shake-up of the sector that could see some banks close, with losses pushed onto bondholders and possibly even large depositors. In such circumstances, there would be little that Athens could do to prevent this.
One European official had told Reuters that the number of big banks in the country could be reduced from four – National Bank, Piraeus, Eurobank and Alpha – to as little as two.
Keep in mind the primary leverage the ECB had over the Greek government was the hint that if only Greece agrees to the terms, the European Central Bank just may be nice enough to ease ELA haircuts and eventually boost the ELA ceiling to allow the phasing out of capital controls and permit Greeks access to their savings.
This will not happen.
Unfortunatley, the moment the Greek government votes through the “deal” required by Summit document SN 4070/15, the Greek government will not only hand over sovereignty to €50 billion of Greece’s choicest assets to some escrowed fund controlled by Belgium and designed to liquidate Greek assets to repay the Troika, it will also give up all control of the nation’s €120 billion or so in leftover personal and corporate deposits, also known as unsecured liabilities.
And since the banks are undercapitalized by at least €25 billion, and realistically over €60 billion, if one takes into account NPLs which at 50% are a very optimistic estimate for a country in depression for 6 consecutive years, the first decision the ECB will do once it realizes the sorry state of financial affairs in Greece is to do precisely what the government could have done but did not have the guts when it still had control: overnight it will out about 50% of Greek depositors.
In other words, Greece is about to hand over the keys to the only thing that is forcing it to hand over the keys.
Unfortunately for Greece, there will be absolutely nothing its government can do to avoid this because on Wednesday, the Greek government will vote to hand over its sovereignty to Europe for, sadly, absolutely nothing in return.
Our only question, one we first asked in April, is whether as part of the deal, the 112.5 tons of official Greek gold will also be handed over to Frankfurt, Berlin or Brussels. Recall back in 2012:
Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal.
Since this bailout has the most draconian terms yet, we wonder just what the fate of Greek gold will be?
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