Posts Tagged ‘sovereign debt crisis’

The Sovereign Debt Crisis Is Never Going To End Until There Is A Major Global Financial Collapse

Courtesy of Michael Snyder of Economic Collapse 

In the past, there certainly have been governments that have gotten into trouble with debt, but what we are experiencing now is the first truly global sovereign debt crisis.  There has never been a time in recorded history when virtually all of the governments of the world were drowning in debt all at the same time. 

This sovereign debt crisis is never going to end until there is a major global financial collapse.  There simply is no way to unwind the colossal web of debt that we have constructed in an orderly fashion.  Right now the EU and the IMF have been making "emergency loans" to nations such as Greece, Ireland and Portugal, but that is only going to buy those countries a few additional months.  Giving more loans to nations that are already drowning in red ink may "kick the can down the road" for a little while but it isn’t going to solve anything.  Meanwhile, dozens more nations all over the globe are rapidly approaching a day of reckoning.

All of the bailouts that you are hearing about right now are simply delaying the pain.  The reality is that when the "emergency loans" for Greece stop, Greece is going to default.  Greece is toast.  The game is over for them.  You can stick a fork in Greece because it is done.

One of the big problems for Greece is that since it is part of the euro it can’t independently print more money.  If Greece cannot raise enough euros internally Greece must turn to outside assistance.

Unfortunately, at this point Greece has accumulated such a mammoth debt that it cannot possibly sustain it.  By the end of the year, it is projected that the national debt of Greece will soar to approximately 166% of GDP.

The financial collapse of Greece is inevitable.  If they keep using the euro they will collapse.  If they quit using the euro they will collapse.  When the rest of Europe decides that it is tired of propping Greece up the game will be over.

At this point very few people are interested in lending Greece more money.

As I wrote about yesterday, many of the nations around the world are only able to keep going because they are able to borrow huge amounts of money at low interest rates.

Well, nobody wants to lend money to…
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Rosenberg’s View For 2010 “A Return Of Volatility”

Courtesy of Tyler Durden

For those strapped for time, here is a comprehensive 4 minute Bloomberg TV interview with David Rosenberg which recaps some of the recent trends the Gluskin Sheff Strategist has been discussing, including the sovereign debt crisis, corporate earnings, and small business performance.

 

For those wishing to dig deeper into the observations, below is the key take home from today’s Breakfast with Dave (full piece here).

In several of my recent musings, I put forward the idea that economic, political and market trends are likely to continue the pattern of alternating direction from one year to the next. In other words, what worked in 2010 is not likely going to work in 2009 any more than what worked in 2008 did not work in 2009; in a nutshell, we are still on this post-bubble roller-coaster ride. If you go back to the initial bounce off the depressed bottom in the early 1930s, what we had for a decade off the bungee-jump was intense volatility. The same holds true for Japan in the early 1990s, and ever since. Considering the volatile, alternating character of the financial markets over the last three years there should be no need to back away from an overall cautious investment strategy that involves capital preservation and income generation, notwithstanding the sharp but inevitably fleeting market rallies that are typical in a post-bubble credit collapse.

From my lens, it now looks like the global economy is going to weaken after a few quarters of bounce-back that was caused principally by massive government intervention and stimulus. For illustrative purposes, we ran some simulations and found that absent the massive amount of monetary, fiscal and bailout stimulus last year, real GDP in the U.S. would have likely contracted as much as 4% in 2009 instead of the posted 2.4% decline; the third quarter would have contracted 1% (not gained 2.2%) and Q4 would have been down 1.5% (not the ripping 5.7% jump that is destined to be revised in any event).

The stimulus we experienced in 2009 is unlikely to be repeated in 2010 for a number of practical and political reasons. Scott Brown’s recent victory in the U.S. Senate race was a message for the government to go easy on the public purse, among other things like socialized health care. In addition, economic growth will be increasingly burdened by…
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Iceland downgraded to junk as it heeds 70% of the electorate on Icesave debt

Iceland downgraded to junk as it heeds 70% of the electorate on Icesave debt

Courtesy of Edward Harrison at Credit Writedowns

Iceland, Jokulsarlon Lagoon with icebergs

The latest piece of big news in the sovereign debt crisis comes, remarkably, from Iceland. The country collapsed into depression after its experiment as an open economy with a large banking sector went pear shaped.

After a debt-fuelled boom and a huge influx of hot money due to high interest rates, its currency and banks collapsed under a fleeing of foreign money and huge losses. The government nationalized the bank’s debt only to find the banks were too big to bail. The Icelanders rioted on the streets, a sovereign crisis ensued, and the government was toppled.

Iceland was rescued and it seemed all was well. They was even talk of fast-tracking Iceland into the EU. Then, suddenly, the population balked at the prospect of bailing out the banks. Now, the sovereign debt crisis is on again. At issue is Icesave, an Icelandic bank that operated in the UK and the Netherlands whose bust caused great hardship amongst British and Dutch savers who were attracted by high interest rates.

See the video below on why Fitch is now downgrading the country’s debt status to junk despite the lack of immediate liquidity concerns.

I think this is big news and have a number of sources on this story below. Watch the Dutch and British stories for signs of European tensions as this is where the affected Icesave savers reside. The FT headline says it all. Ambrose Evans-Pritchard’s commentary is the most comprehensive and balanced in my view. The Norwegian headline, on the other hand, is “Iceland not on the verge of collapse” in huge typeface. The fault lines are definitely opening in Europe. I will discuss this later on the latest story on Greece and the likelihood of EU help.

Sources

Reykjavik warned of political isolation – FT

Iceland can refuse debt servitude – FT

Iceland faces crisis after Icesave rejection – Reuters

Iceland leader vetoes bank repayments bill – BBC News

Iceland’s president blocks £2.3bn Icesave deal to compensate the UK – Telegraph

Angry Iceland defies the world – Ambrose Evans-Pritchard, Telegraph

Icelanders to vote on whether to repay UK over bank bailout – Guardian

Poll: Should
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Zero Hedge

USPS Starts Testing Self-Driving Trucks For Long Hauls

Courtesy of ZeroHedge. View original post here.

The US Postal Service (USPS) has awarded TuSimple, a global self-driving truck company, a contract to haul mail across the country with self-driving trucks, a move that could save the money-losing government agency millions of dollars per year if implemented, reported a TuSimple press release.

The two-week pilot started Tuesday will haul USPS trailers about 1,000 miles bet...



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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Phil's Favorites

Faster, more accurate diagnoses: Healthcare applications of AI research

 

Faster, more accurate diagnoses: Healthcare applications of AI research

As machine learning progresses, its applications include faster, more accurate medical diagnoses. Shutterstock

Courtesy of Seokbum Ko, University of Saskatchewan

When Google DeepMind’s AlphaGo shockingly defeated legendary Go player Lee Sedol in 2016, the terms artificial intelligence (AI), machine learning and deep learning were propelled into the technological mainstream.

BBC Newsnight: AlphaGo and the future of Artificial Intelligence.

AI is generally defined as the capacity for a compu...



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Insider Scoop

55 Biggest Movers From Yesterday

Courtesy of Benzinga.

Gainers
  • Obalon Therapeutics, Inc. (NASDAQ: OBLN) shares jumped 233.3 percent to close at $1.30 on Wednesday after the company reported expanded data from a large scale commercial use study that was presented at the Digestive Disease Week.
  • Ascent Capital Group, Inc. (NASDAQ: ASCMA) shares jumped 51.4 percent to close at $1.37 after the company announced a restructuring support agreement with Monitronics International.
  • Valeritas Holdings, Inc. (NASDAQ: VLRX) shares dippe...


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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

Reminder: We are available to chat with Members, comments are found below each post.

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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