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Another Conspiracy Theory Becomes Fact: The Fed’s “Stealth Bailout” Of Foreign Banks Goes Mainstream
Back in June 2011, Zero Hedge first posted: “Exclusive: The Fed’s $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went“ which we followed up on various occasions, most notably with “How The Fed’s Latest QE Is Just Another European Bailout” and […]
Posted: October 1, 2014, 5:50 pm
Reports of Internet bugs like like Heartbleed and the recent shellshock are growing more frequent and the problems they pose are increasingly more dangerous. Why? For two reasons that aren’t going to change anytime soon. The Internet was never meant for this. We use the Internet for banking, business, education and national defense. These things […]
Posted: October 1, 2014, 5:17 pm
By Michael Snyder I know that headline sounds completely outrageous. But it is actually true. The U.S. government is borrowing about 8 trillion dollars a year, and you are about to see the hard numbers that prove this. When discussing the national debt, most people tend to only focus on the amount that it increases […]
Posted: October 1, 2014, 4:55 pm
Things are rapidly shifting from bad to worse for PIMCO. In a triple whammy this morning, Bloomberg reports the Total Return Fund ETF (managed previously by Bill Gross) has suffered $446 million outflows (or over 12.5% of assets) so far; Morningstar downgrades the fund from ‘gold’ to ‘bronze’ citing “uncertainty regarding outflows and the reshuffling […]
Posted: October 1, 2014, 4:51 pm
Just days after Ukraine began discussing capital controls, and Russian lawmakers passed a bill enabling asset freezes, it appears Russia has reached its limit.
- *RUSSIA SAID TO WEIGH CAPITAL CONTROLS IF NET OUTFLOWS INTENSIFY
The Ruble is plunging towards 40 to the USD (CB intervention levels), US equity futures gapped lower, and European stocks are sliding.
As Bloomberg reports,
Russia’s central bank is weighing the introduction of temporary capital controls if the flow of money out of the country intensifies, according to two officials with direct knowledge of the discussions.Such measures would be preventative and used only if net outflows rise significantly, the people said, who asked not to be identified because no decision has been made. They didn’t give a timeline or a level that may force such a move, saying they are looking at all possible scenarios.The discussions are the latest sign that U.S. and European sanctions are hurting Russia and rethink policies the central bank has sought to avoid. The Economy Ministry last week raised its estimate for this year’s outflows to $100 billion from $90 billion. Russia hasn’t had a net inflow of private capital since 2007, the year after lifted restrictions.Central bank Chairman Elvira Nabiullina, a former economic aide to President Vladimir Putin, said in an address to the government on Sept. 25 that “introducing capital controls doesn’t make sense.”Still, if trades restrictions -- such as the U.S. and EU sanctions and Russia’s retaliatory measures -- are prolonged and the tax burden rises, capital outflows will intensify. That will push the regulator to shift its focus more toward ensuring financial stability from fighting inflation and use various instruments “including non-standard” means, Nabiullina said.The central bank’s press service declined to comment. The Finance Ministry isn’t discussing such measures, Svetlana Nikitina, a spokeswoman, said by text message.
US equities gapped lower...
And the Ruble plunged...
- *RUBLE WEAKENS TO BOUNDARY OF RUSSIA CENTRAL BANK'S TRADING BAND
- *RUBLE WEAKENS TO LEVEL WHERE CENTRAL BANK SAYS WILL INTERVENE
Posted: September 30, 2014, 3:10 pm
China will start direct trading between the yuan and the euro tomorrow as the world’s second-largest economy seeks to spur global use of its currency.
The move will lower transaction costs and so make yuan and euros more attractive to conduct bilateral trade and investment, the People’s Bank of China said today in a statement on its website. HSBC Holdings Plc said separately it has received regulatory approval to be one of the first market makers when trading begins in China’s domestic market.
The euro will become the sixth major currency to be exchangeable directly for yuan in Shanghai, joining the U.S., Australian and New Zealand dollars, the British pound and the Japanese yen. The yuan ranked seventh for global payments in August and more than one-third of the world’s financial institutions have used it for transfers to China and Hong Kong, the Society for Worldwide International Financial Telecommunications said last week.
“It’s a fresh step forward in China’s yuan internationalization,” said Liu Dongliang, an analyst with China Merchants Bank Co. in Shenzhen. “However, the real impact on foreign exchange rates and companies may be limited as onshore trading volumes between yuan and non-dollars are still too small to gain real pricing power.”
Transactions exchanging yuan for dollars totaled 12.2 trillion yuan in the first half of 2014, dwarfing the 110.4 billion yuan worth of trades for euros and the 251.7 billion yuan for yen, the PBOC said in a monetary policy report last month.
China’s trade with European Union nations grew 12 percent from a year earlier to $404 billion in the first eight months of 2014, according to data from the Asian nation’s customs department. That compares with just $354 billion with the U.S. during the period.
French and German companies lead among countries outside of greater China in the use of the yuan, according to a July report by HSBC that was based on a survey of 1,304 businesses in 11 major economies that have ties with mainland China. Some 26 percent of French corporates and 23 percent of German companies were using the currency to settle trade, the highest proportions apart from mainland China, Hong Kong and Taiwan.
China appointed yuan clearing banks this year in Frankfurt, Paris and Luxembourg, and Germany’s financial capital as well as Paris were awarded quotas under the Renminbi Qualified Foreign Institutional Investor program to invest the currency raised offshore in China’s domestic capital markets.
“Given the appointments of renminbi clearing banks in Frankfurt and Paris, today’s announcement is largely expected,” Australia & New Zealand Banking Group Ltd.’s economists led by Liu Li-gang wrote in a research note today. The agreement marks a “significant milestone” in yuan internationalization as the euro is the only G3 currency that has not had direct conversion with the yuan, Liu said.
The European Central Bank is able to draw on a maximum 350 billion yuan ($57 billion) swap line from the People’s Bank of China under the terms of an agreement signed in October 2013. The PBOC can access 45 billion euros ($57 billion) under the terms of the currency swap.
Posted: September 29, 2014, 5:40 pm
Fukushima nuclear material reported in West Coast groundwater; It’s discharging into Pacific Ocean — Fallout also found in meat and fish from same area — “Routinely detected’ in plant life long after March 2011
Diablo Canyon Power Plant (DCPP) Units 1 and 2 Annual Radiological Environmental Operating Report, published April 30, 2014: Isotopic releases occurred in Japan and were carried by the jet stream to the west coast of the United States… [DCPP] periodically detected cesium (Cs-137) within market fish and cow meat due to deposition of Cs-137 from […]
Posted: September 29, 2014, 5:14 pm
By Saxo Bank’s Steen Jakobsen Surely not this old chestnut – again? ‘Interest on debt grows without rain’ – Yiddish proverb This proverb explains most of what goes on in policy circles these days. We are now watching Extend-and-Pretend, Episode VI: Promises for improvement amid ever growing debt levels. In brief, we’re still working with […]
Posted: September 29, 2014, 2:28 pm
London (AFP) – The British inventor of the World Wide Web warned on Saturday that the freedom of the internet is under threat by governments and corporations interested in controlling the web. Tim Berners-Lee, a computer scientist who invented the web 25 years ago, called for a bill of rights that would guarantee the independence […]
Posted: September 29, 2014, 2:22 pm
Last week, President Obama announced an ambitious — and expensive — plan that effectively placed the U.S. military at the forefront of the global fight against the worst Ebola outbreak in history. In an effort that could cost as much as $750 million in the next six months, he assigned up to 3,000 military personnel to West Africa to “combat and […]
Posted: September 28, 2014, 5:04 pm