Daily Digest

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Daily Digest 2/29 - The Eurozone Is Doomed, Inside The GOP Implosion

Monday, February 29, 2016, 11:04 AM

Economy

Mervyn King: the eurozone is doomed (jdargis)

“It will lead to not only an economic but [also] a political crisis,” he says. “Monetary union has created a conflict between a centralised elite on the one hand, and the forces of democracy at the national level on the other. This is extraordinarily dangerous.”

Mind 1826 On The S&P 500: Next Stop Is 1736 According To Chartist Tom DeMark (Aaron M.)

If any of those S&P 500 triggers occur, the benchmark index will decline at least 8.2 percent from Monday’s close to 1,786, a level last seen in February 2014, according to DeMark. Should the market top correspond with what he referred to as “bad news,” the S&P 500 could see deeper selling down to 1,736, an 11 percent decline. DeMark sees the ongoing market rally as temporary relief as investors exit short positions.

The stealthy, Eric Schmidt-backed startup that’s working to put Hillary Clinton in the White House (CleanEnergyFan)

The Groundwork, according to Democratic campaign operatives and technologists, is part of efforts by Schmidt—the executive chairman of Google parent-company Alphabet—to ensure that Clinton has the engineering talent needed to win the election. And it is one of a series of quiet investments by Schmidt that recognize how modern political campaigns are run, with data analytics and digital outreach as vital ingredients that allow candidates to find, court, and turn out critical voter blocs.

Financial Precipice à la 1929? (Aaron M.)

There is a huge laundry list of leading economic indicators I could point you to for visualizing the sick economy, but perhaps the king of all leading indicators is the price of oil. It has absolutely cratered in the past year and a half. It’s gone from well over $100 per barrel to now hovering around $30 and flirting with the idea of going lower, a 70%+ decline. Now why would oil drop in price so dramatically? Is it because the Saudi’s are trying to drive the American shale industry out of business? No, it’s much simpler than that. People simply don’t need as much oil because they aren’t producing enough goods because there aren’t enough people willing to buy those goods. When demand dries up, sellers are forced to lower prices to entice buyers to keep buying.

Douglas Rushkoff’s vision for a new, better world (jdargis)

Today, the equivalent of those bankers are shareholders. They expect not just interest, but tremendous returns on their initial investments. They witnessed the success of Facebook and Google and want those sorts of returns, too. So they put money into a company like Twitter, and then expect to earn back 100 or 1,000 times on their original investment. The fact that Twitter makes 500 million dollars a quarter is considered an abject failure by the investors. And so Twitter must look for some way to “pivot”—that is, change from a super successful company that lets people send 140-character messages, into something else.

Make Wall Street Your Personal ATM (Tiffany D.)

Acting as a pseudo “insurance salesman,” we collect instant premiums from investors that are insuring portfolio positions, by selling them out-of-the-money put options, or the right to sell us a stock at a price (or strike) much lower than the stock’s current valuation. Investors use put options to protect open positions in their portfolio. When they purchase put options, they are essentially limiting their losses in the event of a correction or crash in the stock — a hazard in the stock market.

Silver Prices in Five Years? (GE Christenson)

Scenario Three – deflation and hyperinflation: Deflationary forces temporarily crash the financial system (signs are visible in 2016-Q1), and eventually central bankers and governments inflate currencies, possibly to hyperinflationary levels in their heavy-handed reaction. In this scenario silver prices will go into the stratosphere – perhaps $150, or $1,500, or $15,000 per ounce. The ultimate silver price in a hyperinflationary scenario is unpredictable since hyperinflationary forces feed upon themselves and destroy purchasing power unpredictably. Gold reached nearly 100 trillion Weimar Marks per ounce in 1923. Gold, if currently priced in 1945 (pre-devaluation) Argentina pesos would be over 10,000 trillion 1945 pesos. Hyperinflation is an ugly, destructive, and unpredictable process.

Inside the GOP Implosion and the War to Stop Trump (jdargis)

This crystallized for me after the last GOP debate when Trump told Chris Cuomo in a post-debate interview that the IRS might be coming after him because he's a "strong Christian." Set aside for the moment how this unchurched libertine was able to rebrand himself as a "strong Christian." What about the preposterous claim that he is being persecuted by the IRS because he is a devout member of the country's dominant religion? Republicans simply aren't in any position to criticize this ludicrous claim because they have spent years telling their voters that this sort of thing happens all the time - to Christians, conservatives, everyone the liberals at the IRS hate. And this, of course, is just one example of hate and nonsense debt coming due. Shift gears now and they're "RINOs."

Gold & Silver

Click to read the PM Daily Market Commentary: 2/26/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

9 Comments

saxplayer00o1's picture
saxplayer00o1
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Posts: 4064
Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says

Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says

Bloomberg - ‎Feb 28, 2016‎
This includes financial and corporate debt, as well as sovereign debt, mainly in the U.A.E., Bahrain and Qatar, it said. HSBC is confident that the funding gaps will be covered and expects a "raft" of foreign sovereign bond issuance to fund budget ...
 

Every German Bond Yield Through Eight Years Is at a Record Low

Bloomberg-3 hours ago
European bond bulls who drove benchmark German debt yields through eight years to record lows were vindicated after data showed euro-area consumer ...
 
 

China central bank cuts reserve requirement ratio by 0.5 percentage points

CNBC - ‎5 hours ago‎
China's central bank, the People's Bank of China, has cut further the reserve requirement ratio, the amount of cash the country's banks have to hold, in an attempt to calm investor jitters over the world's second largest economy. The PBOC cut the ratio ...

China expects to lay off 1.8 million workers in coal, steel sectors

Reuters-2 hours ago
The central government will allocate 100 billion yuan ($15.27 billion) over ... There are many issues to be dealt with, including how to pay debt as well as layoffs.

Swedish Economy Steams Ahead on Record Central Bank Stimulus

Bloomberg - ‎7 hours ago‎
The nation's central bank has cut interest rates deep below zero and unleashed a bond purchase program to provide further stimulus as it struggles to meet its 2 percent inflation target. Efforts to accommodate a record-wave of immigrants from war torn ...
 

Everything You Need to Know About Negative Rates

Wall Street Journal - ‎16 hours ago‎
The Bank of Japan, the European Central Bank and several smaller European authorities have ventured into the once-uncharted territory of negative interest rates. But what are negative rates, and how do they come about? Here are some questions and ...

Central Banks Have Lost Confidence of Markets: Holland

Bloomberg-3 hours ago
Michael Holland, chairman at Holland & Company, and Shannon O'Neil, senior fellow at Council on Foreign Relations, talk about the market implications of ...

India to Inject $3.65 Billion of Capital Into State-Run Lenders

Bloomberg-5 hours ago
Rising bad debts and inadequate risk buffers at India's state-run banks have been ... Government-controlled lenders will require infusions of 1.8 trillion rupees in ...

Spring Breakers Stuck in Illinois as Colleges in Cash Flow Hell

Bloomberg - ‎3 hours ago‎
The eight public universities in the state that Moody's rates, which have a combined $3.2 billion of debt, all have negative outlooks, indicating their rankings may be cut. On Feb. 24, the company downgraded Eastern Illinois University, Northern ...

As Detroit Starts to Mend, Its Schools Lurch Toward Fiscal Crisis

New York Times-6 hours ago
He pointed to the deindustrialization of Detroit, the explosion of charter schools — more than half of Detroit's schoolchildren attend one — and unfunded pension ...

Poll: Only 15 percent say they have benefited from ObamaCare

The Hill-39 minutes ago
And while the majority of adults said they believed their healthcare costs were “reasonable,” many said those costs were becoming less affordable over time.

Global finance officials promise to shore up sagging growth

Topeka Capital Journal - ‎12 hours ago‎
He said some can afford stimulus while others where debt is high have to move faster on structural economic reforms. Companies and investors were looking to the ... It said another downgrade is likely in April. The G-20 statement acknowledged that ...
Tall's picture
Tall
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A Farming Guide to the Political Season

I find that as the years go by, the rhetoric of conservatism and liberalism mean less and less to the life we live. Rhetoric aside, no candidate or party speaks for the rural farms or communities. Left or right the language is of the city: eternal growth and happy days (past, present, or future).

As a farmer I know a couple of truths. First, that the manure I sling has real value. Second, that growth is a part of a larger cycle and is never eternally sustained; that the wheel turns and winter always follows spring, summer, and fall.  

http://www.wingedelmfarm.com/blog/2016/02/28/a-farming-guide-to-the-poli...

thc0655's picture
thc0655
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Missing the forest for the trees

Exactly Tall!  Sometimes a moron (like Peter Sellers' character is this movie Being There) is the only one who seems to grasp the most elementary truths.  (If you haven't seen the whole movie, I strongly recommend it as we teeter here on the edge of the abyss.)

Time2help's picture
Time2help
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Watch Five Years of Oil Drilling Collapse in Seconds (Bloomberg)

http://www.bloomberg.com/graphics/2016-oil-rigs/

sand_puppy's picture
sand_puppy
Status: Diamond Member (Online)
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Posts: 1758
Japan 10 year bonds go NEGATIVE

(Source)

One guy summarized:  I will gladly pay you today if you'll pay me back less in 10 years.

Precious metals looks better and better.

thc0655's picture
thc0655
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Posts: 1513
It's no big deal

No one buys those JGBs except their central bank, and with newly printed digital money.  It'll be ok.

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Jim H
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Posts: 2379
THC...

Give yourself a pat on the back.  Ten years ago none of us would have known what the heck your sentence even means.  Now most of us not only understand the words.. we get the joke too.  Well said.   

   

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2766
Vote for Pedro

Broadspectrum's picture
Broadspectrum
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Joined: Mar 14 2009
Posts: 88
All of Them But One

 

Haven't you heard?  Bernie Sanders is all about REVOLUTION.
 
Revolution is all around you,  The seeds have been sown.  What is growing is a movement that has got the Establishment running scarred.  And they should be.  Here's what the MSM is not telling you.  
 
Iowa was a virtual tie, and it would have went to Bernie except for 6 coin tosses that went Clinton's way.  Go figure.  Wow, 6 for 6 on coin tosses.  Anyone want to bet on those odds happening again?  Ha ha. 
 
Sanders won every demographic in NH, most notably the youth vote (1st and 2nd timers), except for the older, affluent voter.  After NV Sanders was behind by only one delegate in the delegate count.  In SC he was trounced.  Yet he won segments of that electorate too, again younger voters. 
 
In February Sanders has raised almost $43,000,000 as of this writing, from over 1.4 million real persons.  That's simply incredible.  But will the MSM be reporting that?
 
Congressperson Alan Grayson, who is running for Marco Rubio's Senate seat and is a Super-delagate held a vote on whom he should support.  He appealed to Democrats across the nation to tell him for whom he should vote, as a Super-delegate at the Democratic National Convention. The response has was absolutely overwhelming.  Almost 400,000 Democrats voted at GraysonPrimary.com. More than the number who voted in the South Carolina primary. More than the number who voted in the New Hampshire primary and the Nevada caucus combined.  The results: Sanders 86%, Clinton 14%. More than just a landslide. An earthquake.
 
When other candidates from previous elections challenged the establishment's preferred candidate the amount of money that they raised was always a talking point as to why they weren't viable candidates because they didn't have the money.  So Sanders has proved that he can raise enormous amounts of money from just ordinary folks, millions of us.  And the 400,000 that voted on Grayson's web-site, who are they?  Sure they are from all over the nation but that tells you something too that MSM won't be telling you.
 
So, today is Super Tuesday.  Eleven states and a territory will be voting today  when most of you will be reading this.  If you are voting today or in the days and weeks to come, be bold, be brave, be real...VOTE FOR BERNIE! 

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