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There is a whole heap of material that has come through today - in addition to the continuous unravelling in Europe.
Jefferies Describes The Endgame: Europe Is Finished
14 September 2001
The most scathing report describing in exquisite detail the coming financial apocalypse in Europe comes not from some fringe blogger or soundbite striving politician, but from perpetual bulge bracket wannabe, Jefferies and specifically its chief market strategist David Zervos.
"The bottom line is that it looks like a Lehman like event is about to be unleashed on Europe WITHOUT an effective TARP like structure fully in place.
For article GO HERE
Wen Jiabao Says China Willing To Extend Help To Europe...For A Price
13 Septeber, 2011
When in doubt, recycle... In this case the rumor that China would bail out Europe is about to get second billing. From Bloomberg, quoting Wen Jiabao at the Dalian World Economic Forum:
• WEN SAYS CHINA WILL CONTINUE TO INCREASE INVESTMENT IN EUROPE
• WEN SAYS CHINA IS WILLING TO EXTEND HELP TO EUROPE
Granted, nothing new here, and it simply means that China will be happy to buy European assets at firesale prices and invest in 20%+ IRR projects, but the algos, which have not yet seen this news, are expected to kneejerk higher, regardless of how short the latest intervention halflife will be (recall that China already has sizable investment in Greece, Portugal, the EFSF and the EUR). Call it what it is - doubling down, all over again. That said, the bailout for Europe will not come free, and once that realization hits the market, this may have a completely opposite reaction that the one intended...
• WEN SAYS EU SHOULD RECOGNIZE CHINA'S MARKET ECONOMY STATUS
• WEN SAYS HOPES FOR BREAKTHROUGH AT CHINA-EU SUMMIT NEXT MONTH
Ah yes, quid pro quo Clarice. If Europe will be so kind to align itself with China in all future WTO escalations against the US, it will be much appreciated.
After all, there is nothing more a mercantilist country needs than a subservient import partner. Ergo, any vile ideas about duties, subsidies and/or tariffs?.... Yeah, those are gone. Permanently.
In other words, if Europe likes it status quo, it sure as hell better like being part of the Sino-Russian axis in the coming trade wars, which incidentally will define the next reserve currency in 2-3 years.
Said otherwise, China may not have won the currency wars (the first round), but it is well on its way to winning the trade war (round two).
We all know what round three is...
And some additional info from Xinhua:
Chinese Premier Wen Jiabao said on Wednesday that the nation's opening up to the outside world is a long-term commitment which covers all fields and is mutually beneficial.
"China's basic state policy of opening up will never change," Wen said in a keynote speech at the opening of the World Economic Forum annual meeting of "New Champions 2001", a three-day event held in the city of Dalian in northeast China's Liaoning Province.
"We will continue to get actively involved in economic globalization and work to build a fair and equitable international trading regime and financial system," he said.
"We will continue to improve foreign-related economic laws, regulations and policies so as to make China's investment environment in keeping with international standards, transparent and more business friendly," he said.
Drug-resistant TB spreading fast in Europe
When Anna Watterson lost more than 20 pounds and developed a cough she couldn't shake, she was afraid she'd caught some mysterious disease.
After repeated visits to the doctor and months of being sick in 2004, the London barrister was finally diagnosed with drug-resistant tuberculosis.
She isn't sure where she caught it — either traveling in India years before or living in northwest London, a tuberculosis hotspot — but experts say patients like Watterson are increasingly common across Europe.
"Nobody in Europe is 100 percent protected from drug-resistant tuberculosis," said Ogtay Gozalov, a medical officer at the World Health Organization. He described the disease's spread in Europe as "alarming" and said previous measures to contain the outbreak were inadequate.
On Tuesday, WHO released a new plan to fight the disease across Europe that aims to diagnose 85 percent of all patients and to treat at least 75 percent of them by the end of 2015. Only about 32 percent of patients with drug-resistant tuberculosis in Western Europe are properly treated; many stop taking their medicines before the treatment course is up, allowing the bug to develop resistance.
For article GO HERE
Median Male Worker Makes Less Now Than 43 Years Ago
13 September, 2011
While the fact that a record number of Americans are living in poverty should not surprise anyone at this point, what should surprise many is that according to Table P-5 of the Census report of (Lack of) Income, the median male is now worse on a gross, inflation adjusted basis, than he was in... 1968
While back then, the median income of male workers was $32,844, it has since risen declined to $32,137 as of 2010.
And there is your lesson in inflation 101 (which we assume is driven by the CPI, which likely means that the actual inflation adjusted income decline is far worse than what is even reported).
The only winner: women, whose median inflation adjusted income over the same period has increased by 188%.
That said, it is still at 65% of what the median male makes. So injustice all around. And now, it is time to be patriotic again and buy a Pontiac Aztek.
Big US Banks to Be Required to Write 'Living Wills'
13 September, 2011
The nation’s biggest banks are getting a new homework assignment from Uncle Sam today.
The FDIC was set Tuesday morning to pass new rules requiring insured depository institutions with $50 billion or more in total assets to submit “living wills” describing how the institution would be wound down in an orderly fashion in the event of a crisis.
The new rules were a key part of the Dodd-Frank Wall Street reform legislation passed by Congress in 2010, and are meant to fix a gap regulators saw in the financial system in the 2008 crisis: the public didn’t know what the impact of bank failures would be on the entire financial system, and the banks weren’t prepared to deal with their own failures.
The FDIC proposed a deadline of July 1 2012 for all institutions with $250 billion or more in non-bank assets to file their first plans with the government. Those with between $100 and $250 billion would have until July 1, 2013 to file, and all the rest would be expected to file by Dec. 31, 2013.
FDIC officials briefing reporters on Tuesday morning emphasized that there will be two components to each institution’s living will — public and a private.
The public plan will be a guide for investors about how the institution could be wound down in an orderly fashion, and the confidential piece would be a report to regulators that would include trade secrets and details such as exposure to counterparties and other sensitive information decision makers would need in a crisis.
Institutions would be required to resubmit their plans annually with the government.
FDIC officials stressed that they wanted to work with the banks in crafting the plans, saying this will be an “iterative process” and that they wanted to be “in a dialogue” with the major financial institutions.
The FDIC said the plans will be required to demonstrate a way to resolve the bank and ensure that depositors receive access to their insured deposits within one business day of the institution’s failure, maximize the net present value return from the sale or disposition of its assets and minimize the amount of any loss to be realized by the institution’s creditors.
'Supercommittee' hears grim economic, budget outlook from CBO
13 September, 2011
WASHINGTON — Members of Congress' bipartisan deficit-cutting "supercommittee" tasked with finding $1.5 trillion in deficit reduction by Thanksgiving got a sobering assessment Tuesday of the daunting task ahead.
"The nation cannot continue to sustain the spending programs and policies of the past with the tax revenues it has been accustomed to paying," testified Douglas Elmendorf, director of the nonpartisan Congressional Budget Office. "Citizens will either have to pay more for their government, accept less in government services and benefits, or both."
For article GO HERE
Russia Sees Stalling Economy, Plunging Ruble With $60 a Barrel Oil Price
13 September, 2011
Oil at $60 a barrel may halt Russia’s two-year economic expansion next year, triggering a “substantial” devaluation of the ruble, the Economy Ministry said, according to a document obtained by Bloomberg.
Gross domestic product may shrink as much as 1.4 percent next year under a negative scenario that projects a “world recession” cutting the average price of Urals crude by almost a half from the current level, according to the report, submitted to the government for approval last week.
The price of Urals, the nation’s chief export oil blend, has averaged $109.35 this year and was at $114.23 yesterday.
A reliance on raw materials, which President Dmitry Medvedev called “humiliating” and “primitive,” has left the economy vulnerable to dropping global demand for its commodity exports. Russia’s sovereign rating, which was last raised by Moody’s Investors Service in 2008, is exposed to sudden changes in the price of oil, Fitch Ratings and Standard & Poor’s said as they kept the credit grade unchanged in the past two weeks.
For article GO HERE
Saudi Official: US Veto for Palestinian State Will Cost Saudi Alliance
A former Saudi intelligence chief spoke for the monarchy in an op-ed which promised grave consequences if US vetoes PA state
by John Glaser, September 12, 2011
The United States would lose Saudi Arabia as an ally if it blocks the Palestinian bid for statehood at the United Nations this month, according to a New York Times piece written by a senior Saudi official.
“Saudi Arabia would no longer be able to cooperate with America in the same way it historically has,” Prince Turki al-Faisal, the former Saudi intelligence chief, wrote in an opinion piece that was officially sanctioned by the monarchy. “Saudi leaders would be forced by domestic and regional pressures to adopt a far more independent and assertive foreign policy.”
The Obama administration has been firm in denouncing Palestinian attempts to generate support for its bid for statehood and has promised to veto the resolution at the Security Council this month.
If the US follows through on that promise, wrote al-Faisal, “Saudi Arabia would pursue other policies at odds with those of the United States, including opposing the government of Prime Minister Nuri al-Maliki in Iraq and refusing to open an embassy there despite American pressure to do so. The Saudi government might part ways with Washington in Afghanistan and Yemen as well.”
Prince Turki al-Faisal stressed that the starting point for peace must be a two-state solution based on the pre-1967 borders, something the US and Israel have slighted for decades, and still in the Obama administration.
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