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Daily Digest 2/10 - Venezuela Faces Debt Test, Bad Loan Clean-Up Takes Toll On Earnings

Wednesday, February 10, 2016, 11:38 AM

Economy

Bad loan clean-up takes toll on state banks' earnings (India)

Indian banks, burdened by their highest stressed-assets ratio in 13 years, have been asked by the Reserve Bank of India (RBI) to treat some troubled accounts as non-performing even if actual default has yet to happen and make adequate provisions.

Investors flock to CDS amid fear over banks’ bonds

Global exchange traded funds that track the financial sector have recorded outflows of $3.2bn so far this quarter. That puts them on track for the worst quarterly outflow in six years, according to data from Markit, the research group.

Venezuela Faces Test on Debt

“The question is not if Venezuela will default, but when they will default,” said Russ Dallen, a partner at Latinvest Group Holdings, an investment bank.

Time is running out for these 29 companies

There are now 218 companies globally that are considered to be "weakest links," or those with the lowest credit ratings (B- or lower) that also have negative outlooks, says Standard & Poor's Ratings Services. That includes Chesapeake Energy (CHK), which Monday said it's looking for restructuring options - a warning that helped put the market on notice of mounting financial strain.

Fitch Sees High Default Probability for 10 Latin America Issuers

Companies in the region have $14 billion of payments to make in 2016 and $22 billion next year, up from $6 billion in 2015, the ratings company said in a Feb. 9 report. Downgrades will continue to outpace upgrades for the high-yield corporates, with 32 percent of issuers having either a negative outlook or negative watch on their rating. About 16 percent are already rated CCC or below.

Financial Credit Risk in Europe Increases to Highest Since 2013

Investors are increasingly concerned that weak earnings and a global market rout will make it harder for banks to pay the interest on their riskiest securities, or to buy them back as soon as they’d hoped. Deutsche Bank AG became the largest lender in at least four years to feel compelled to reassure investors and employees that it has enough funds to service that debt.

Moscow shared MH17 radar images, Dutch probe ignored evidence, Russia tells victims’ relatives (richcabot)

"I would like to emphasize that Russia is strongly committed to establishing the actual cause of the crash, and has consistently done everything in its power to help find out the truth, both throughout the course of the technical investigation and following its official completion," he said.

The Next Slick Patch In Front Of The Market: A Stampede Out Of ETFs (Aaron M.)

“It was a disaster. The company announced earnings, which were pretty much in line with what the market expected. But its forward guidance was down a little.

“Investors dropped it like a hot potato. The stock dropped by almost 50% – and investors lost about $11 billion – in 20 minutes of trading.”

Iran Signs Oil Deal With Total, Deal Done In Euros (PBD)

Deals signed just over a week ago when Iranian President Hassan Rouhani met his French counterpart, Francois Hollande, in Paris included some 20 agreements and a $25-billion accord under which Iran will purchase 73 long-haul and 45 medium-haul Airbus passenger planes to update its ageing fleet. Carmaker Peugeot—which was forced to pull out of Iran in 2012--also agreed to return to the Iranian market in a five-year deal worth $436 million.

Not-so-secret atomic tests: Why the photographic film industry knew what the American public didn’t (Chris M.)

Eastman Kodak investigated, and found something mighty peculiar: the corn husks from Indiana they were using as packing materials were contaminated with the radioactive isotope iodine-131 (I-131). Eastman Kodak at the time had some of the best researchers in the country on its team (the company even had its own nuclear reactor in the 1970s), and they discovered something that was not public knowledge: those farms in Indiana had been exposed to fallout from the 1945 Trinity Test in New Mexico -- the world's first atmospheric nuclear bomb explosions which ushered in the atomic age. Kodak kept this exposure silent.

Rising CO2 in the ocean will make fish ‘intoxicated,’ scientists predict (richcabot)

Their study, published in Nature, found that in some oceanic regions, the annual fluctuations in CO2 concentration will increase tenfold by the end of the century if CO2 output by humans continues at its predicted rate. As a result, fish in the Southern, Pacific and north Atlantic oceans are expected to increasingly suffer from a phenomenon called “hypercapnia,” a build-up of CO2 in the blood which occurs when the concentration of carbon dioxide in the ocean is higher than 650 parts per million.

Gold & Silver

Click to read the PM Daily Market Commentary: 2/9/16

Provided daily by the Peak Prosperity Gold & Silver Group

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21 Comments

cmartenson's picture
cmartenson
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Maddening…immoral…and/or Criminal?

Where do you think this falls on the above spectrum?

While the Children in Flint Were Given Poisoned Water to Drink, General Motors Was Given a Special Hookup to the Clean Water

Feb 10, 2016

A few months after Gov. Snyder removed Flint from the clean fresh water we had been drinking for decades, the brass from General Motors went to him and complained that the Flint River water was causing their car parts to corrode when being washed on the assembly line.

The governor was appalled to hear that GM property was being damaged, so he jumped through a number of hoops and quietly spent $440,000 to hook GM back up to the Lake Huron water, while keeping the rest of Flint on the Flint River water.

Which means that while the children in Flint were drinking lead-filled water, there was one -- and only one -- address in Flint that got clean water: the GM factory.

Something is very very wrong with some people...

Doug's picture
Doug
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GM

Wasn't the old expression "What's good for GM is good for America"?

davefairtex's picture
davefairtex
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Posts: 5465
consequence

Consequence for being such a poor decisionmaker is - you get to drink Flint water for the next year.  You, and your whole family.  "To encourage the others."  In fact, let's put everyone who signed off on the decision on a daily diet of Flint water.

Now someone just needs to appoint me Supreme Leader....or just officer in charge of Official Consequences Enforcement.

VeganDB12's picture
VeganDB12
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psychopath (in my educated opinion)

An impeachment would be a good start. Is this guy still in charge?  

The adults have been poisoned too let's not forget. Awful. 

thc0655's picture
thc0655
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Risking a catastrophe

In my state we have a law called "risking a catastrophe" to cover stuff like this.  I wish I had jurisdiction.  I'd go arrest somebody today. Instead I continue to grind my teeth. crying

DennisC's picture
DennisC
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Do it for the Children

More money well-spent on higher education and administration?  One "sound-bite" from the article:

The report said that the administration was planning to cull struggling freshmen from the institution as part of an effort to improve retention numbers — a big factor in rankings published in outlets like U.S. News & World Report — and that the university’s president, Simon Newman, had used disturbing language to sell the idea to a skeptical professor last fall.

“This is hard for you because you think of the students as cuddly bunnies, but you can’t,” Mr. Newman is quoted as saying. “You just have to drown the bunnies.”

He added, “Put a Glock to their heads."

The rest of the story here: www.nytimes.com/2016/02/11/us/mount-st-marys-university-firings.html

 

Time2help's picture
Time2help
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cmartenson's picture
cmartenson
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Corruption Everywhere

The idea of ‘corruption’ is not just a legal definition for me, but a far more expansive to include the idea of something being done with underhanded and/or self-aggrandizing intent.

Here’s a definition:

cor·rup·tion

kəˈrəpSH(ə)n/

noun

1.dishonest or fraudulent conduct by those in power, typically involving bribery.

"the journalist who wants to expose corruption in high places"

 

2. the process by which something, typically a word or expression, is changed from its original use or meaning to one that is regarded as erroneous or debased.

synonyms: alteration, bastardization, debasement, adulteration  e.g.  "these figures have been subject to corruption"

I think definition #2 applies here:

Corrupt journalism doesn’t pay. Nor does abetting it. 

Feb 9, 2016

Former Atlantic contributing editor Marc Ambinder is showing appropriate contrition for having participating in some dubious journalistic practices back in July 2009. As exposed by some Freedom Of Information Act documents secured by J.K. Trotter of Gawker, Ambinder was pursuing a copy of the speech that then- Secretary of State Hillary Clinton was to make at the Council on Foreign Relations.

So he emailed renowned Clinton advocate and spokesperson Philippe Reines.

The back-and-forth confirms anyone’s worst suspicions about access journalism. The transaction went like this:

  • Ambinder asks for a copy of the speech;
  • Reines says he’ll send it, with conditions;
  • Ambinder writes back, “ok”;
  • Reines lays out the conditions:

1) You in your own voice describe them as “muscular” 2) You note that a look at the CFR seating plan shows that all the envoys — from Holbrooke to Mitchell to Ross — will be arrayed in front of her, which in your own clever way you can say certainly not a coincidence and meant to convey something 3) You don’t say you were blackmailed!

  • Ambinder writes, “got it.”

The story, it turns out, rated Clinton’s speech “muscular” and indeed made reference to the seating thing: “The staging gives a clue to its purpose: seated in front of Clinton, subordinate to Clinton, in the first row, will be three potentially rival power centers: envoys Richard Holbrooke and George Mitchell, and National Security Council senior director Dennis Ross,” wrote Ambinder, completing his compliance with Reines’s conditions.

In a series of remarks to Gawker, Ambinder lamented making the deal. “It made me uncomfortable then, and it makes me uncomfortable today,” said Ambinder.

And here’s the image up on the original Gawker article.

(Source

No it doesn’t surprise me in the least to discover that a journalist dirtied himself by corrupting his practice in order to curry favor with one of Hillary’s gate keepers. She has a notoriously thin skin and needs to be pampered at all times, personally and in print.

But I will vigorously dispute the attempt by the Washington Post journalist to frame this by saying that the other journalist in question was “showing appropriate contrition” .

C’mon.

The guy only fessed up AFTER Gawker went through an entire FOIA process to uncover the whole sordid affair. “Appropriate contrition” happens all on its own when a person has a legitimate change of heart.

I reject that attempt to characterize the contrition as appropriate and, further, have now slipped journalist #2 into the exact same untrustworthy bucket as journalist #1.

I wonder if Journalist #1 made the specific request of journalist #2 to include the phrase “appropriate contrition” in order to speak with him?

If the MSM wants to begin regaining my trust it's going to have to do better than fessing up to a small transgression pried from its unwilling fingers.

sand_puppy's picture
sand_puppy
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Before purchasing your T-shirt

Remember that RED Meme is RED Meme thinking whether it is under a Muslim, Jewish or Christian banner.

There is some evidence that Faction A is working to get Faction B to fight with Faction C.  That way "B" and "C" will destroy each other leaving "A" as the victor.  Such a deception is just "fighting smarter, not harder."

Between 1992 and 1994, a parody of intellectual debate was acted in the press, opposing, on one side, Francis Fukuyama and his prophecy of the “End of History”— meaning “the universalization of Western liberal democracy as the final form of human government”— and, on the other side, Samuel Huntington and his vision of the “Clash of Civilizations.” The 9/ 11 attacks made Huntington look like a visionary, and allowed [arch-neocon] Bernard Lewis to hammer the message in his What Went Wrong? The Clash between Islam and Modernity in the Middle East (2003). Fukuyama and Huntington are both members of the Trilateral Commission (as is Brzezinski); Fukuyama is also a member of PNAC. (Source: Kindle Locations 1968)

The Moral Developmental Level:  Might makes right

The morality of the RED Meme is that "might makes right."  (If I have the power to take it from you then it rightfully belongs to me because I am the more powerful person.)  In the 1000 BC era, this "might" was typically brawn, a powerful sword arm and the ruthlessness to lead an army.  Not so anymore.

A corollary to "might makes right" in the intellectual realm is that "my greater cleverness entitles me to be the rightful victor."  Less flattering phraseology might be: 

"If I am clever enough to rig the system and you are stupid enough to not catch on, then I am the rightful victor."

So when the Mossad's motto is:  "By deception we wage war,"  we have to watch very closely for deceptions and traps.

Similarly in the financial realm: 

If you are stupid enough to permit a cartel of private bankers to control your money supply then you deserve to lose every cent.

I bring this up because the "Clash of Civilizations" is a core myth that this group is nurturing to bring the more newly developing GREEN / YELLOW Meme social order down.  Lets not fall for that.  OK?

phecksel's picture
phecksel
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Meanwhile, At GM's

Meanwhile, At GM's Engineering Headquarters, a contract employee with a firearm saves a GM employee who was being stabbed to death.  He apparently has already been fired for violating GM's policy.

http://www.wxyz.com/news/stabbing-reported-at-general-motors-technical-c...

 

Time2help's picture
Time2help
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Agreed

Complete agreement here sand_puppy. But just because I may hold a perspective similar to yours on the topic does not mean that a percentage of the population won't see it in Red meme perspective.

Which is what the sales figures suggest.

cmartenson's picture
cmartenson
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Sometimes, the media gets it right...

In the interest of balance, I should point out that sometimes I am in complete agreement with the media as they really get something right.

Like this time:

I'm no military expert, but my instincts say they got this right...

:)

Mark Cochrane's picture
Mark Cochrane
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At the risk of giving up state secrets....

I can confirm from first hand experience that the US too has, in the past, used seas, oceans and other waters to conceal the presence of its submarines...

ezlxq1949's picture
ezlxq1949
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Posts: 226
A perceptive media

I'm so grateful to that journalist — I must confess that that possibility had completely escaped me.

Such devious, corrupt cunning on the part of China! Is there no end to it?

Time2help's picture
Time2help
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Posts: 2840
Cut that out Mark
Mark Cochrane wrote:

I can confirm from first hand experience that the US too has, in the past, used seas, oceans and other waters to conceal the presence of its submarines...

Loose lips sink ships. Oh wait...

Arthur Robey's picture
Arthur Robey
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Amateurs all.

We need an experts opinion on the matter.

Where's Dogs?

sand_puppy's picture
sand_puppy
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Posts: 1930
Phillips 66 will PAY YOU $2.50/bbl to take crude from them

Apparently the Cushing facility is experiencing major surplus.  They will PAY $2.50 / barrel to have crude oil taken away from the storage facility in OK.

(If I am understanding this correctly...)

davefairtex's picture
davefairtex
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Posts: 5465
cash roll

SP-

The headline is a bit confusing.  Here is the important bit:

The so-called cash roll, which allows traders to roll long positions forward, typically trades in the three days following the expiry of the prompt futures contract. The trading period for February-March contracts concluded almost three weeks ago.

Basically, the refinery owned some long oil futures contracts expiring this month.  Normally, they'd have to accept delivery of said oil, fork over the $26,720 for each 1000 barrels of oil, and presumably put it somewhere.  Instead they chose to pay $2.50 per barrel (or $2500 per contract) to turn the "February contract" into a "March contract."

Put another way: "if you could just deliver this oil to me next month instead of this month, I'll pay you $2500 right now."

This is distinct from them being the proud owners of a big tank full of oil that they asked someone else to cart away, for which service they were willing to pay $2.50 per barrel.  "Please just make this oil go away."  That didn't happen.

The oil market has been in "contango" (March oil is cheaper than April oil) since 2014.    Right now the contango is $2.50.  That is, CL March 2016 is trading at 26.72, and CL April 2016 is trading at 29.22.  This market structure says, "oil is oversupplied now - but may not be so oversupplied by the time next month rolls around."

 

Time2help's picture
Time2help
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Posts: 2840
Zerohedge

The impression I am left with is that (a) the Hedge is seeing significantly higher traffic volumes that usual (resulting in a DOS for some of us) or (b) site access is being limited/throttled. (a) seems more likely, but I wouldn't put (b) past the current circus either.

Time2help's picture
Time2help
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Posts: 2840
More blathering

Yellen: No Known Restriction Preventing Negative Rate (Yahoo Finance)

Edit: Bonus

Time2help's picture
Time2help
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Joined: Jun 9 2011
Posts: 2840

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