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The staggering incoherence of the election campaign only mirrors the shocking incapacity of the American public, from top to bottom, to process the tendings of our time. The chief tending is permanent worldwide economic contraction. Having hit the resource wall, especially of affordable oil, the global techno-industrial economy has sucked a valve in its engine.
For sure there are ways for human beings to inhabit this planet, perhaps in a civilized mode, but not at the gigantic scale of the current economic regime. The fate of this order has nothing to do with our wishes or preferences. It’s going down whether we like it or not because it was such a violent anomaly in world history and the salient question is: how do we manage our journey to a new disposition of things. Neither Trump or Clinton show that they have a clue about the situation.
The quandary I describe is often labeled the end of growth. The semantic impact of this phrase tends to paralyze even well-educated minds, most particularly the eminent econ professors, the Yale lawyers-turned-politicos, the Wall Street Journal editors, the corporate poobahs of the “C-Suites,” the hedge fund maverick-geniuses, and the bureaucratic errand boys (and girls) of Washington. In the absence of this “growth,” as defined by the employment and productivity statistics extruded like poisoned bratwursts from the sausage grinders of government agencies, this elite can see only the yawning abyss. The poverty of imagination among our elites is really something to behold.
As is usually the case with troubled, over-ripe societies, these elites have begun to resort to magic to prop up failing living arrangements. This is why the Federal Reserve, once an obscure institution deep in the background of normal life, has come downstage front and center, holding the rest of us literally spellbound with its incantations against the intractable ravages of debt deflation. (For a brilliant gloss on this phenomenon, read Ben Hunt’s essay “Magical thinking” at the Epsilon Theory website.)
One way out of this quandary would be to substitute the word “activity” for “growth.” A society of human beings can choose different activities that would produce different effects than the techno-industrial model of behavior. They can organize ten-acre farms instead of cell phone game app companies. They can do physical labor instead of watching television. They can build compact walkable towns instead of suburban wastelands (probably even out of the salvaged detritus of those wastelands). They can put on plays, concerts, sing-alongs, and puppet shows instead of Super Bowl halftime shows and Internet porn videos. They can make things of quality by hand instead of stamping out a million things guaranteed to fall apart next week. None of these alt-activities would be classifiable as “growth” in the current mode. In fact, they are consistent with the reality of contraction. And they could produce a workable and satisfying living arrangement.
The rackets and swindles unleashed in our futile quest to keep up appearances have disabled the financial operating system that the regime depends on. It’s all an illusion sustained by accounting fraud to conceal promises that won’t be kept. All the mighty efforts of central bank authorities to borrow “wealth” from the future in the form of “money” — to “paper over” the absence of growth — will not conceal the impossibility of paying that borrowed money back. The future’s revenge for these empty promises will be the disclosure that the supposed wealth is not really there — especially as represented in currencies, stock shares, bonds, and other ephemeral “instruments” designed to be storage vehicles for wealth. The stocks are not worth what they pretend. The bonds will never be paid off. The currencies will not store value. How did this happen? Slowly, then all at once.
We’re on a collision course with these stark realities. They are coinciding with the sickening vectors of national politics in a great wave of latent consequences built up by the sheer inertia of the scale at which we have been doing things. Trump, convinced of his own brilliance, knows nothing, and wears his incoherence like a medal of honor. Clinton literally personifies the horror of these coiled consequences waiting to spring — and the pretense that everything will continue to be okay with her in the White House (not). When these two gargoyle combatants meet in the debate arena a week from now, you will hear nothing about the journey we’re on to a different way of life.
But there is a clear synergy between the mismanagement of our money and the mismanagement of our politics. They have the ability to amplify each other’s disorders. The awful vibe from this depraved election might be enough to bring down markets and banks. The markets and banks are unstable enough to affect the election.
In history, elites commonly fail spectacularly. Ask yourself: how could these two ancient institutions, the Democratic and Republican parties, cough up such human hairballs? And having done so, do they deserve to continue to exist? And if they go up in a vapor, along with incomes and savings, what happens next?
Enter the generals.

Jens Nordvig, one of the hottest prognosticators in finance, will sell anyone his secret sauce for winning trades for $30,000 a year.

But if you want unfettered access to his best ideas and personal touch—the kind that the deep-pocketed hedge funds covet—be prepared to shell out about 20 times more.

That two-pronged approach to research, off-limits (at least officially) at Wall Street banks, captures one of the most striking shifts in finance today: the rise of a class system where entire businesses cater to only the highest-paying clients. Of course, haves and have-nots have long existed in the world of finance. But the widening gap within Wall Street itself, between what the privileged few and most others get, is creating a new financial elite—what amounts to the 1 percent of the 1 percent.

And if you’re not part of the 0.01 percent, the next best thing is to sell to it.

“Investors either get personalized advice from someone they really trust, or it’s the data tools, good robots—and the price of those two things are different,” the 42-year-old Dane explained from his WeWork office in Manhattan’s Flatiron district one recent afternoon.

For Nordvig, who left Nomura Holdings Inc. in January after five years as Wall Street’s top-ranked currency strategist, it meant leveraging that standing to build his firm, Exante Data, around a rarefied group of the brightest hedge-fund names— and the money they dole out.

Exante counts Key Square, founded by George Soros protege Scott Bessent, and Adam Levinson’s Graticule, a Singapore-based firm spun out of Fortress Investment Group, among its clients, according to conversations with investors and people familiar with the matter. Graticule didn’t reply to requests for comment.

Nordvig declined to identify specific firms, but says there are just “five to seven” large institutions, whose fees covered most of his startup costs. And by design, he isn’t accepting any new business. That’s because while Exante’s six employees are focused on its analytics rollout, Nordvig devotes the majority of his time advising his marquee customers.

He’s in touch with them on an almost daily basis and is just a phone call or instant message away—any time, 24/7. His research is tailor-made to suit each one’s needs and Nordvig says he’ll often spend hours at a time with a single firm debating macroeconomic policy and trade strategies.

In late July, Nordvig was up until midnight defending his high-stakes call to a hedge-fund client in Asia that the Bank of Japan would stand pat, rather than announce a new set of aggressive stimulus measures as everyone expected. (He dissuaded the firm from shorting the yen, which proved to be prescient as the Japanese currency surged following the non-event.)

“At banks, it’s mass production. It’s Target versus Hermès.”
So far, his backers like what they see.

“Jens is one of the great thinkers in the market,” said Key Square’s Bessent, who oversaw Soros’ personal fortune before starting his own billion-dollar macro fund this year. “Part of what we did was we got him to control his number of clients. At banks, it’s mass production. It’s Target versus Hermès.”

Nordvig isn’t shy about what he brings to the table. Prior to his years at Nomura, he spent almost a decade at Goldman Sachs Group Inc., where he rose to become co-head of global currency research and made his name with bold calls and savvy analysis. In between, he did a brief stint at Ray Dalio’s Bridgewater Associates. And Nordvig brushes off the perception among both admirers and critics that he can, at times, be just a bit too brazen in promoting himself. To him, it’s just part of the cutthroat nature of finance.

“I have a track record of being quite detail-oriented, precise in my analysis and also able to develop new frameworks for thinking about things, and at the same time being quite pragmatic,” he said. “I’ve set up the advisory business so that the people I deal with are some of the biggest macro investors in the world, and I know their interests fit with how I think.”

Whatever the case, there is little doubt the appetite for bespoke research like Nordvig’s is growing. Banks are slashing costs, cutting jobs and abandoning their ambitions to be all things to all customers in the face of a slew of regulations over issues like selective access and excessive risk-taking. An industry-wide slump in revenue since the financial crisis has also prompted bank executives to rethink the value of the commission-based model, where investment research is offered for free in return for trade orders.

Many firms have eliminated analysts as they scale back research spending—making personalized service and attention all the more valuable. Some like Citigroup Inc. and Morgan Stanley have drawn up preferred client lists with code names such as “Focus Five” and “supercore” for top clients.

“It’s a changing landscape,” said Matthew Feldmann, a consultant at Scepter Partners, a multi-family office, and a former money manager at Citadel and Brevan Howard. “People like Jens have found a niche area where all you need is a few wealthy individual customers.”

Perhaps just as important is the proliferation of automated trading strategies and machine-driven data mining, which has replaced many traditional roles that used to exist on Wall Street (not to mention made it harder for hedge funds to outperform as technology makes financial data almost ubiquitous).

Nordvig’s old job at Goldman Sachs exemplified that bygone era. As recently as 2007, he’d stand in the middle of the trading floor with mic in hand on the first Friday of every month, just before the 8:30 a.m. payrolls report. His task? Shout out his immediate take. If the U.S. added more jobs than expected, he’d cry “buy dollar-yen!” and within seconds, Goldman Sachs’s traders would hit the button on their keyboards to put in the order.

“We used to be able to make so much money by just being fast,” he said. Yet today, it’s all done by robots.

Amid the upheaval, Nordvig is confident his experience and smarts will ensure his high-priced advice remains in demand. But he’s not taking any chances.

After years of lackluster returns and faced with the biggest withdrawals since the financial crisis, hedge funds are looking for any edge they can find. These days, that often comes from the world of quantitative analysis. Even legendary names like Paul Tudor Jones, who made their fortunes the old-fashioned way, are hiring a bevy of programmers and mathematicians to build out more sophisticated, computer-driven strategies.

But not everybody has the research budgets to hire scores of Ph.D.s or pay for Nordvig’s white-glove service. That’s where the “data” in Exante Data comes in (Exante is derived from “ex ante,” Latin for “before the event”). Plenty of research superstars have decamped from Wall Street to set up boutique advisory firms, but Exante’s two-tier model is rare. Once the data business is fully up and running, Nordvig promises to give mere mortals on Wall Street the same type of data-mining tools once available only to the biggest quant shops.

Nordvig says he has one overriding advantage: he simply understands markets better.
Yet competition on the data front is heating up. Scores of startups are already scraping data and turning the information into actionable ideas. Goldman Sachs is the biggest investor in Kensho Technologies Inc., which analyzes historical trading patterns to predict how assets react to events like policy meetings and economic releases. An outfit called SpaceKnow Inc. uses satellite images of factories to gauge economic activity in export-oriented countries like China.

Nordvig, in his typical cocksure manner, says he has one overriding advantage: he simply understands markets better.

In coming months, Exante will launch its first data product for the masses. According to Nordvig, his data scientists have come up with a complex algorithm that precisely estimates how much the yuan exchange rate is influenced by China’s buying or selling of dollars, on a daily basis.

There’s nothing publicly available that comes close to measuring intervention in such detail. But Nordvig says his algo succeeds because it can capture anomalies in yuan trading, like a sudden widening in bid-ask spreads, and then compare the data against freely-traded markets in big financial centers.

While the tool can’t yet gauge intervention in offshore yuan and currency forwards, his backtested results show it closely tracks less frequently released official figures. And knowing beforehand can make a huge difference. Case in point: In August 2015, the People’s Bank of China unexpectedly engineered a weakening of the yuan, which blindsided investors and sent financial markets worldwide into a tailspin.

“This is about knowing what topics are important to the clients you serve,” Nordvig said.

http://www.bloomberg.com/news/features/2016-09-15/wall-street-s-0-01-the-guru-who-only-talks-to-hedge-fund-elite

With a seismic overhaul of the $2.6 trillion money-market industry weeks away from kicking in, money managers are bracing for a last-minute exodus of as much as $300 billion from funds in regulators’ cross hairs.
Prime funds, which seek higher yields by buying securities like commercial paper, are at the center of the upheaval. Their assets have already plunged by almost $700 billion since the start of 2015, to $789 billion, Investment Company Institute data show. The outflow has rippled across financial markets, shattering demand for banks’ and other companies’ short-term debt and raising their funding costs.
The transformation of the money-fund industry, where investors turn to park cash, is a result of regulators’ efforts to make the financial system safer in the aftermath of the credit crisis. The key date is Oct. 14, when rules take effect mandating that institutional prime and tax-exempt funds end an over-30-year tradition of fixing shares at $1. Funds that hold only government debt will be able to maintain that level. Companies such as Federated Investors Inc. and Fidelity Investments, which have already reduced or altered prime offerings, are preparing in case investors yank more money as the new era approaches.
“All managers, like ourselves, are positioning around the uncertainty of the exact magnitude of the outflows,” said Peter Yi, director of short-term fixed income at Chicago-based Northern Trust Corp., which manages $906 billion.

$300 Billion

While Yi sees the additional outflow from prime-fund investors potentially reaching $200 billion in the next 30 days, TD Securities predicted in a Sept. 7 note that it may tally as much as $300 billion.
Yi is preparing by shortening his funds’ weighted average maturity and avoiding short-term debt that matures beyond September. He’s not alone. For the biggest institutional prime funds tracked by Crane Data LLC, the weighted average maturity of holdings fell to an unprecedented 10 days as of Sept. 12. It’s not just floating net-asset values that investors are avoiding. Prime funds can also impose restrictions such as redemption fees.
Amid the tumult, money-fund assets have held steady because most of the cash leaving prime and tax-exempt funds has streamed into less risky offerings focusing on Treasuries and other government-related debt, such as agency securities and repurchase agreements. These funds are exempt from the new rules, which the U.S. Securities and Exchange Commission issued in 2014.
A major repercussion of the flight from prime funds is that there’s less money flowing into commercial paper and certificates of deposit, which banks depend on for funding. As a result, banks’ unsecured lending rates, such as the dollar London interbank offered rate, have soared. Three-month Libor was about 0.85 percent Wednesday, close to the highest since 2009.
Libor may stabilize after mid-October because prime funds may begin to increase purchases of bank IOUs, although the risk of a Federal Reserve interest-rate hike by year-end will keep it elevated, said Seth Roman, who helps oversee five funds with a combined $3.2 billion at Pioneer Investments in Boston.
“You could picture a scenario where Libor ticks down a bit,” Roman said. But “you have to keep in mind that the Fed is in play still.”
Financial firms paying higher rates to attract investors to their IOUs will push three-month Libor to about 0.95 percent by the end of September, according to JPMorgan Chase & Co.
Although bank funding costs are rising, it isn’t a signal of financial strain as in 2008, said Jerome Schneider, head of short-term portfolio management at Newport Beach, California-based Pacific Investment Management Co., which oversees about $1.5 trillion. 
“This is not a credit stress event, it’s a credit repricing due to systemic and structural changes,” he said.
The market for commercial paper has shrunk about 50 percent from its $2.2 trillion peak in 2007, pushing financial firms to diversify funding sources -- choosing longer-term debt and loans in foreign currencies.
At least $269 billion in commercial paper and certificates of deposits held by prime funds will come due before Oct. 14 and most issuers of that debt will need to find financing outside the money-fund industry, JPMorgan predicts.
The hubbub in money markets has its roots in a crucial episode of the financial crisis -- the demise of the $62.5 billion Reserve Fund, which became just the second money fund to lose money, or “break the buck.” The event contributed to the global freeze in credit markets and pushed the Treasury Department to temporarily backstop almost all U.S. money funds.
With the Fed’s target rate still not far from zero, money-fund investors looking to pad returns may overcome their aversion to prime funds. Institutional prime funds’ seven-day yield was 0.24 percent as of Sept. 12, compared with 0.17 percent for government funds, according to Crane Data.
“You’ll see the prime-fund space continue to shrink until we hit mid-October,” said Tracy Hopkins, chief operating officer in New York at BNY Mellon Cash Investment Strategies, a division of Dreyfus Corp.
“After that,” she said, “I would not be surprised to see assets return, once customers get accustomed to the floating NAVs and want to earn incremental yield over government money-market funds.”

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What is Splitting Pennies all about?

Splitting Pennies - Understanding Forex is a book about our global financial system and its direct impact on every human being on this planet Earth.  Every day, our money is worth less and less.  Splitting Pennies explores why, through the prism of its mechanism; Forex.  Forex is the largest business in the world and the least understood.  This is not taught in school - start your journey, and just read.  Splitting Pennies displays practical examples of how many have profited in Forex, the history of Forex, and practical examples of strategies to use for your portfolio.  Readers of the book will know more than a Harvard MBA about Forex, and can consider themselves Sophisticated Forex Investors (SFI).  Complex topics such as currency swaps are broken down in digestible form, for the average investor or for financial professionals.  Splitting Pennies is a must read for those in investment banking, securities, fund management, accounting, banking & finance, and related fields.  But it’s written for the layman, the worker, the average investor – the student in us.




Seven public U.S. university endowments with assets of more than $1 billion including the University of California reported fiscal 2016 investment losses as lackluster economic growth and volatility drubbed markets.
College endowments are poised to take the worst slide in performance since the 2009 recession. Funds with more than $500 million lost a median 0.73 percent in the year through June 30, according to the Wilshire Trust Universe Comparison Service. The Wilshire data, from fund custodians, excludes fees while most schools report returns net of fees.
“It was a bit of a bloodbath,” as swings in the markets challenged stock pickers, Jagdeep Bachher, chief investment officer at the University of California system, said at an investment committee meeting on Sept. 9, according to a webcast of the meeting. “Last year was a bad year for active managers all around.”
Ohio State University and California had the largest declines through June 30 among the seven at 3.4 percent each while the University of Virginia fell 1.5 percent. It’s shaping up to be the worst year for endowment returns since 2009, when the richest schools had a loss of 21.8 percent, according to the Wilshire service. For fiscal 2016, a benchmark 60/40 portfolio of the Wilshire 5000 Total Stock Market Index for U.S. equities and the Wilshire Bond Index returned 4.5 percent.

Hedge Funds

The value of the University of California’s endowment rose 2.2 percent to $9.1 billion from the prior year due to inflows from shifting cash from short-term funds to the endowment and royalty payments, Bachher said. The investment losses were driven by poor returns from public equity fund managers and hedge funds, he said.
Market volatility was due to “central bank actions, slow-to-no growth worldwide, the oversupply of oil on a worldwide basis resulting in prices collapsing and the unexpected Brexit vote,” John Lane, chief investment officer at Ohio State’s endowment, said in an e-mail.
Virginia’s best-performing strategies -- private real estate and domestic buyouts -- couldn’t offset losses in its public and growth equity sectors and its resources portfolio, the school said. The fiscal 2016 investment loss follows gains of 7.7 percent and 19 percent in the previous two years, showing how even the best-performing funds are saddled with a new reality of low returns.
The University of Virginia Investment Management Co. is committed to its long-term philosophy, Lawrence Kochard, the chief investment officer, wrote in a report.

‘Significant’ Impact

“We expect a wide variety of investment challenges going forward and believe macro-level factors will continue to have a significant impact on markets,” Kochard wrote.
Kochard said the school is finding “pockets of opportunity” in areas such as non-U.S. equities.
“We also continue to observe an investment community fixated on global macro risks -- including a slowing Chinese economy, the implications of Brexit, the U.S. presidential election and central bank policies -- which provides a good environment in which our global public managers can identify mispriced securities,” Kochard wrote.
The fund has made changes to its asset allocation over time, according to the report. Public equities were increased in fiscal 2016 to 24.6 percent from 20.5 percent in 2012; and marketable alternatives and credit went to 14 percent from 9.3 percent. The management company decreased its allocation to resources to 4.5 percent from 7 percent, and real estate to 6.6 percent from 8.6 percent.
Despite the investment loss, the value of the long-term pool increased to $7.6 billion from $7.5 billion because of contributions in excess of distributions and investment losses.

Global Equities

Ohio State’s biggest loss came from its global equities portfolio. The state’s flagship public school’s 7.2 percent loss in the allocation dragged down a 10.8 percent gain in real assets, according to the school.
The University of Washington’s fund lost 1.6 percent. The drop was led by declines in its “capital appreciation” bucket, which includes a 20 percent asset allocation to emerging markets equity; 38 percent in stocks of developed markets; and 12 percent in private equity, according to the school.
The University of North Carolina at Chapel Hill’s endowment posted a 2 percent decline. The University of Iowa endowment’s investments fell 1.8 percent in fiscal 2016, with global equities leading the decline. The investment loss reflects the portion of the endowment managed by the foundation.
The University of Colorado’s investment fund, which is managed by Perella Weinberg Partners, lost 2.6 percent, according to the school. The value declined to $1.06 billion from $1.09 billion a year ago. About 43 percent of the fund’s holdings are in private capital, real assets and hedge funds, with 6 percent in cash and fixed income, according to a report.
While the annual returns were hurt by Brexit at the end of June, the fund was up almost 3 percent in July, Mike Pritchard, vice president and chief financial officer of the University of Colorado Foundation, said in an interview.
“This is a time for all universities to consider what does the future look like,” Pritchard said. “Endowments are long term. You want to meet the short-term needs -- scholarships, professorship chairs -- and you also want to sustain the long-term spending power. That’s the balance were all looking at right now.”

TRADE FOREX - RECOVER YOUR LOSSES FROM STOCKS

For years we have wondered why Wells Fargo, America's largest mortgage lender, is also Warren Buffett's favorite bank. Now we know why.
On Thursday, Wells Fargo was fined $185 million, (including a $100 million penalty from the Consumer Financial Protection Bureau, the largest penalty the agency has ever issued) for engaging in pervasive fraud over the years which included opening credit cards secretly without a customer’s consent, creating fake email accounts to sign up customers for online banking services, and forcing customers to accumulate late fees on accounts they never even knew they had. Regulators said such illegal sales practices had been going on since at least 2011.
In all, Wells opened 1.5 million bank accounts and "applied" for 565,000 credit cards that were not authorized by their customers.
Wells Fargo told to CNN that it had fired 5,300 employees related to the shady behavior over the last few years. The firings represent about 1% of its workforce and took place over several years.  The fired workers went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.
How Wells perpetrated fraud is that its employees moved funds from customers' existing accounts into newly-created accounts without their knowledge or consent, regulators say. The CFPB described this practice as "widespread" and led to customers being charged for insufficient funds or overdraft fees, because the money was not in their original accounts. Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. Many customers who had unauthorized credit cards opened in their names were hit by annual fees, interest charges and other fees.
According to the NYT, regulators said the bank’s employees had been motivated to open the unauthorized accounts by compensation policies that rewarded them for drumming up new business. Many current and former Wells employees told regulators they had felt extreme pressure to expand the number of new accounts at the bank.
And, since it is US government policy never to send a banker to prison, they thought that engaging in criminal behavior was not such a bad idea.
Federal banking regulators said the practices reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks.
"Today's action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences," said CFPB Director Richard Cordray. He added that “unchecked incentives can lead to serious consumer harm, and that is what happened here."
"Consumers must be able to trust their banks. They should never be taken advantage of," said Mike Feuer, the Los Angeles City Attorney who joined the settlement.
On its behalf Wells fargo issued a statement saying it “is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said in a statement adding that "at Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action."
As the NYT puts it, "this is an ugly moment for Wells Fargo, one of the few large American banks that have managed to produce consistent profit increases since the financial crisis." Now we know one of the reasons why.
As CNN redundantly adds, "the scope of the scandal is shocking."
And since nobody will go to prison, in a few months we will read another such "shocking scandal" perpetrated by another bailed-out bank.

Forty-eight percent of nonfinancial companies listed on U.S. stock exchanges remained exposed to volatility in foreign exchange rates, commodity prices and interest rates in 2012 because they did not hedge them, according to a new study by Chatham Financial.  The interest-rate and currency risk adviser studied a sample of 1,075 companies ranging from $500 million to $20 billion in revenue. The nearly half that did not use financial instruments to hedge their exposures demurred despite the threat the risks posed to both the balance sheets and reported earnings (see chart at bottom). “That was surprising, knowing the pressure senior management teams and treasury feel around identifying ways to reduce risk to factors within their control so business can focus on other areas,”Amol Dhargalkar, managing director for corporate advisory at Chatham, says.
Companies that do business outside of the USA have substantial forex exposure. This exposure can be an asset, if properly managed - but often it is a liability. Recently, the trend in corporate accounting has been to blame "currency headwinds" which can be a good excuse for up to $10 billion in losses. Did these executives ever hear about hedging?
So what does this data mean?  It means that half of Corporate America is speculating BIG in Forex.  Not hedging, when you have FX positions, is speculating.  For example, imagine you're a big US multinational like McDonalds (MCD).  McDonalds (MCD) is a great example because they are one of the companies that lives off their FX hedges.  Without FX hedging, it's questionable if MCD could survive, because more than 60% of their revenue comes from non-US Dollar (USD).  That means their revenue, without FX hedging, would be nearly an exact function of the FX markets (which is the case for these companies that don't hedge).  Companies that lose billions of dollars due to 'currency headwinds' - they are losing huge in Forex.  
Here's the irony.  Pension Funds and many institutions are reluctant to invest in Forex strategies because they are 'risky'.  But they invest in the stock of companies that lose billions in Forex!  And that's OK.  Well, everyone is losing, so why not us too.  Heck, I don't want to be singled out as the one state pension fund that's actually MAKING money for our retirees, that might cause me to get promoted, or lose my job.  
Why don't these companies hedge you ask?  Isn't it their fiduciary duty to their shareholders?  Here's one perspective from PWC:
When a publicly held company engaged in a multi-billion dollar investment in an overseas location
recently, the firm considered using a hedge — or swap — contract to reduce the risk that a big currency
swing would impact costs and financial results. The plan was sound financially. Yet, management had
concerns about the reaction of investors to this approach and decided to drop the hedging plan, says
Chris Rhodes, accounting advisory services partner at PricewaterhouseCoopers (PwC).  Why? Because the CFO determined that,
although the hedge would protect all the cash
spent in the foreign jurisdiction against currency
exposure, the cost of capital — in this case
borrowing in external markets — “would be
negatively impacted by the inability of some
analysts to understand the reporting issues
involved,” Rhodes explains. “The concern is that,
although many analysts would immediately grasp
the sophisticated currency-hedging procedures
that were key to the plan, others might not.”
So you see, according to this perspective, CFOs understand Forex, but they understand that others such as analysts don't understand, and think that there's a negative perception problem, to closing a big gaping hole in their FX exposure.
One year in the 90's, Intel Corporation made more money on their FX positions than they did selling processors.  Not all of Corporate America is completely stupid.  There are some savvy FX managers out there, that do a great job.  But for the other half, one has to wonder if FX volatility will finally drive these unhedged companies out of business.
Here's what you see on every street corner in Russia:
At least, some humans are prepared for potential financial catastrophe, even if it's as simple as FX volatility.
To learn more about Forex Hedging, checkout Splitting Pennies - your pocket guide designed to make you an instant Forex Genius!  Or checkout Fortress Capital Forex Hedging.

While the trading world was focused on the latest news involving Deutsche Bank, namely that the troubled German bank had beencontemplating a merger with Germany's other mega-bank, Commerzbank as part of a strategy to sell all or part of a key business to speed up its flagging overhaul, a more troubling report emerged in a German gold analysis website, according to which Deutsche Bank was unable to satisfy a gold delivery request when asked to do so by a client of Germany's Xetra-Gold service.
But first, what is Xetra-Gold?
According to its website, the publicly traded company "provides investors with an efficient instrument to participate in the performance of the gold market. Xetra-Gold’s combination of features – cost-efficient trading and the right for physical delivery of gold - makes it an attractive product."
Among its highlights, Xetra-Gold lists the following:
Cost-efficient trading: No mark-up fee, no transportation or insurance costs such as those incurred when purchasing physical gold. Only the standard transaction fees that are charged for on-exchange securities trading are payable at the time of acquisition. The spreads that apply to purchase and sale correspond to the standard conditions on the global market and are considerably lower than those for traditional gold-based financial products. Furthermore, management or administration fees relating to Xetra-Gold are not incurred. The investor pays the amount of custody fees which he/she has agreed upon with the depository bank.

Physically backed: The issuer uses the proceeds from the issue of Xetra-Gold to purchase gold. The physical gold is held in custody for the issuer in the Frankfurt vaults of Clearstream Banking AG, a wholly-owned subsidiary of Deutsche Börse AGIn order to facilitate the delivery of physical gold, the issuer holds a further limited amount of gold on an unallocated weight account with Umicore AG & Co. KG.

Transparent:  Xetra-Gold tracks the price of gold on a virtually 1:1 basis, and is always up to date.

Tradeable in euros per gram: While in the past, gold was mainly denominated in US dollars per troy ounce, you trade Xetra-Gold in euros per gram.

Stable/Constant holdings: The investor’s right to receive delivery of the certificated amount of gold is not reduced by management costs or other fees, unlike other investments in gold. 1,000 units of Xetra-Gold will still represent a kilogram of gold in 30 years' time.
The company makes the following promise:
Redemption for gold: Investors always have the possibility of demanding delivery of the securitised amount of gold per bearer note against the issuer. If the investor is not able to exercise this right due to legal restrictions effective for him/her, he/she can demand the cashing of Xetra-Gold from the issuer. In this case, a settlement fee of EUR 0.02 per Xetra-Gold bond will be charged.

Delivery of gold: If an investor asserts his/her right to the delivery of the certificated volume of gold from the issuer, the gold will be transported to the respective point of delivery by Umicore AG & Co. KG, which is responsible for all physical delivery processes. The issuer will also have delivery rights of gold from Umicore AG & Co. KG, as the gold leaf debtor. Investors can find information on delivery and the alternative payment claims that are relevant for investment and insurance companies in the PDF document entitled 'Information on the process for exercising Xetra-Gold'.
And yes, Deutsche Bank is involved, as the fund's Designated Sponsor.
In other words, Xetra-Gold is an Exchange-Traded Commodity which differentiates itself by "representing that every gram of gold purchase electronically is backed by the same amount of physical gold" and its principal bank is none other than Deutsche Bank.
And with Germans recently rushing to buy safes or find sound money alternatives in a country where the interest rate is negative, the ETC, it is not surprising that the population has flocked to its offering.
According to recent report by LeapRate, the gold held in custody by Deutsche Borse Commodities for the purpose of physically backing the Xetra-Gold bond has risen to a new record high of 90.67 tons, an increase of more than 50% since the beginning of the year. "For each Xetra-Gold bond, exactly one gram of gold is deposited in the central vaults for German securities in Frankfurt" the report parrots the company's website.
Among all exchange-traded commodities (ETCs) tradable on Xetra, Xetra-Gold is by far the most successful in terms of turnover. During the first seven months of the year, order book turnover on Xetra stood at approximately €1.5 billion. The assets managed by Xetra-Gold currently amount to €3.5 billion.

In September 2015, the German Federal Fiscal Court (Bundesfinanzhof) had ruled that after a minimum holding period, any profits from the sale or redemption of Xetra-Gold are not subject to the capital gains tax. From a fiscal point of view, the purchase, redemption or sale are thus to be treated equal to a direct purchase or sale of physical gold, such as in bullions or coins.
But what is most notable, is that, as noted above, Xetra-Gold investors are entitled to the delivery of the certified amount of physical gold at any time, and adds that "since the introduction of Xetra-Gold in 2007, investors have exercised this right 900 times, with a total of 4.5 tons of gold delivered."
However, something appears to have changed.
As Oliver Baron reports, those who ask for gold delivery at this moment, "could encounter difficulties." The reason is that according to Baron, a reader of GodmodeTrader "sought physical delivery of his holdings of Xetra-Gold. For this he approached, as instructed by the German Borse document, his principal bank, Deutsche Bank."
At that point then he encountered a big surprise: the Deutsche Bank account executive informed the investor that "the service", is no longer offered, namely exercising physical delivery at Xetra-Gold, for "reasons of business policy" and therefore the order form provided by Clearstream Banking AG for exercising Xetra-gold is no longer available.
Baron writes that since Deutsche Bank is no longer serving the physical exercising of delivery request of Xetra-Gold is remarkable, as Deutsche Bank is the "designated sponsor" as well as fiscal, principal and redemption agent of Xetra-Goldaccording to its prospectus, and as the explainer of how to exercise physical delivery also reveals. Even if one is a customer of another bank, Xetra-Gold should - at least on paper- guarantee delivery by way of Deutsche Bank, as the Deutsche Borse Commodities GmbH explains in its "process description for exercising units"
Step-by-step description of exercise

Together with a representative of his principal bank, the investor creates the transaction and sends it to the principal bank's custodian with the relevant process data described above. The custodian in turn instructs its custodian, stipulating all process-relevant data, until a bank which is a customer of Clearstream Banking is authorised.

The customer may use the attached exercise form to instruct the designated sponsor (here Deutsche Bank AG, Frankfurt) to deliver a specified number of gold bars to the point of delivery. The process is similar to that for the delivery of physical certificates.

The customer should send the original exercise form to the following address:

Deutsche Bank AG
"Ausübung Xetra-Gold" CIB-Global Banking
Trust & Securities Services 
Grosse Gallusstrasse 10 – 14 
60311 Frankfurt am Main 
Germany

To transfer the required amount of Xetra-Gold units to the blocked account of Deutsche Börse Commodities, the customer should also place an FoP instruction via CASCADE or File Transfer/SWIFT.

Delivery will be initiated if Deutsche Bank receives the securities and the application form by 10:00 CET. As a rule it takes one to two weeks to deliver retail gold bars and four days for London Good Delivery gold bars from date of ordering. As soon as the delivered gold arrives at the point of delivery, the Xetra-Gold® units are removed and recovered from the "Ausübungskonto DBCo" (DBCo exercise account).

Due to the provisions of the Money Laundering Act (Geldwäschegesetz) only the branch of a bank may be used as point of delivery. Investors expecting a large delivery of gold should contact their principal bank to discuss the transfer of the gold to the point of delivery.
The article goes on to note that it was not clear whether the exercise and physical delivery at other banks is actually still possible. Baron said that Deutsche Borse Commodities advised to transfer the Xetra-Gold shares in a cooperative/Raiffeisenbank since physical delivery is allegedly still possible here. The Deutsche Borse also announced that it is currently working on the "possibility of delivery regardless of bank branch." However, since this process was not described in the prospectus of Xetra-Gold, it would have to be legally tested, which could take considerable time.
The article's conclusion: anyone who wants to easily convert their Xetra-Gold holdings into physical gold - at least for clients of Deutsche Bank - can do so only by selling their shares, and then buying gold coins or bars directly elsewhere. Which leads the author to the logical question: what is the worth of the Xetra-Gold service, which certifies the right to redeem physical gold, if said delivery is no longer possible?
In other words, what was supposedly an ETC which promised physical delivery upon demand, is nothing more than yet another "paper only" play.
We, on the other hand, have a more focused question: is the inability to deliver physical gold an incipient issue with Xetra-Gold, or with the company's "designated sponor" Deutsche Bank, and if the latter is suddenly unable to satisfy even the smallest of delivery requests by retail clients, just how unprecedented is the global physical gold shortage?

(ANTIMEDIAHundreds of kilos of cocaine were found in a Coca-Cola plant in France last Friday, making the seizure of the drug one of the largest ever on French soil.
French officials say the cocaine was discovered in backpacks among a shipment of orange juice concentrate that originated in Costa Rica. The 370 kg of literal coke uncovered at the factory is reported to have a street value of €50 million Euros ($55m) and was referred to as a “very bad surprise” by a local prosecutor.
Authorities are currently unaware of who was behind the cocaine, but an investigation is now underway in Signes, a village in the south of France. Employees of the plant have already been ruled out as suspects.
“The first elements of the investigation have shown that employees are in no way involved,” according to Jean-Denis Malgras, the regional president of Coca-Cola.
Coca-Cola was originally called Pemberton’s French Wine Coca and contained a mixture of Peruvian coca leaves, kola nut, damiana, and cocaethylene (cocaine mixed with alcohol). Druggist John Stith Pemberton invented his French Wine Coca in Atlanta, Georgia, and it became very popular across the southeastern United States.
The Coca-Cola recipe was a closely guarded secret, but in 1891, an Atlanta newspaper reported what many had already suspected: Coca-Cola contained cocaine. Coke was forced to change its marketing strategy and began referring to their product as “refreshing,” rather than promoting any medicinal benefits. Coca-Cola began taking cocaine out of its soft drink in 1903 because of racially-promoted fears among white society.
According to the New York Times:
“Anyone with a nickel, black or white, could now drink the cocaine-infused beverage. Middle-class whites worried that soft drinks were contributing to what they saw as exploding cocaine use among African-Americans. Southern newspapers reported that ‘negro cocaine fiends’ were raping white women, the police powerless to stop them.”
Cocaine was eventually made illegal in the United States in 1914, but it wasn’t until 1929 that Coca-Cola perfected its formula. Before that year, the psychoactive components of the coca leaf could still be found in the soda in small amounts.
The Coca-Cola soft drink became completely cocaine-free in 1929, but coca leaf extract is still used to this day as an active ingredient in the internationally popular soda. The ecgonine alkaloid, which gives cocaine its accelerating effect on the brain, is extracted from the coca leaf before processing.
The Stepan Corporation, a New Jersey-based chemical processing company, performs the extraction on the coca leaves for Coca-Cola. Stepan has an arrangement with the DEA and is the only group allowed to import the coca leaf into the United States. One hundred and seventy-five thousand kilograms of coca leaves are imported into the United States each year by Stepan. That is a street value equivalent to roughly $21 billion of cocaine,according to the United Nations.
So what happens to the actual cocaine processed by Stepan? It is hauled away from the facility in armored trucks and then sold to Mallinckrodt, a pharmaceutical company whose United States headquarters are based in St. Louis, Missouri.
The coca leaf extract is referred to as Merchandise No. 5.

This article ($55 Million in Cocaine Was Just Discovered at a Coca-Cola Plant) is free and open source. You have permission to republish this article under a Creative Commons license with attribution to SM Gibson andtheAntiMedia.orgAnti-Media Radio airs weeknights at 11pm Eastern/8pm Pacific. If you spot a typo, emailedits@theantimedia.org.

After years of relentless decline in the Baltic Dry index...

... today the largest casualty finally emerged on Wednesday when South Korea's Hanjin Shipping, the country's largest shipping firm and the world's seventh-biggest container carrier, filed for court receivership after losing the support of its banksleaving its assets frozen as ports from China to Spain denied access to its vessels.
For those unfamiliar with the company, here is a brief overview from its website:
Hanjin Shipping is Korea's largest and one of the world’s top ten container carriers that operates some 70 liner and tramper services around the globe transporting over 100 million tons of cargo annuallyIts fleet consists of some 150 containerships and bulk carriers.


With 4 regional headquarters in the U.S., Europe, Asia and South East & West Asia, approximately 5,000 global staffs as well as container terminals in world’s major ports contribute to Hanjin Shipping’s world-class logistics network around the world.
As Reuters reports, banks led by state-run Korea Development Bank withdrew backing for the world's seventh-largest container carrier on Tuesday, saying a funding plan by its parent group was inadequate to tackle debt that stood at 5.6 trillion won ($5 billion) at the end of 2015.
Suk Tai-soo, president and chief executive officer of Hanjin Shipping Co, arrives
at a court in Seoul, South Korea, August 31, 2016.
South Korea's biggest shipping firm, announced the filing for receivership and a request to the court to freeze its assets, which the Seoul Central District Court planned to grant, a judge told Reuters.
As part of the company's insolvency process, the court will now decide whether Hanjin Shipping should remain as a going concern or be dissolved, a process that usually takes one or two months but is expected to be accelerated in Hanjin's case, the judge said.A bankruptcy for Hanjin Shipping would be the largest ever for a container shipper in terms of capacity, according to consultancy Alphaliner, exceeding the 1986 collapse of United States Lines.
Coming as no surprise to anyone who has followed the persistent decline in worldside trade, global shipping firms have been swamped by overcapacity and sluggish demand, with Hanjin booking a net loss of 473 billion won in the first half of the year. 
South Korea's ailing shipbuilders and shipping firms, which for decades were engines of its export-driven economy, are in the midst of a wrenching restructuring. According to Reuters, KDB's decision to stop backing Hanjin Shipping shows the government is taking a tougher stance with troubled corporate groups.
The fallout from the country's unprecedented bankruptcy invoked a statement from South Korea's Finance Minister Yoo Il-ho, who said that "the government will swiftly push forth corporate restructuring following the rule that companies must figure out how to survive and find competitiveness on their own while taking responsibility."
To be sure, this decision is a fresh breath of air in a world in which mega-corprations across the globe have become "too big to fail" by default, and in many cases anticipate a government bail-out.
According to South Korea's Financial Services Commission, Hyundai Merchant Marine, the country's second-largest shipping line, will look to acquire its rival's healthy assets, including profit-making vessels, overseas business networks and key personnel,  A Hyundai Merchant Marine spokesman told Reuters nothing had been decided about the potential acquisition of Hanjin assets and that the firm will hold talks with KDB. Hyundai Merchant Marine is also in the process of a voluntary debt restructuring.
The question now is whether as a result of the bankruptcy process there will be an unexpected failure in the global supply-chain:South Korea's oceans ministry estimates a two- to three-month delay in the shipping of some Korean goods that were to be transported by Hanjin Shipping, and plans to announce in September cargo-handling measures which could include Hyundai Merchant Marine taking over some routes, a ministry spokesman said on Wednesday.
Making matters worse, Reuters adds that KDB's move to pull the plug was already having an impact on Hanjin's operations, with the company's various shipping assets already frozenPorts including those in Shanghai and Xiamen in China, Valencia, Spain, and Savannah in the U.S. state of Georgia had blocked access to Hanjin ships on concerns they would not be able to pay fees, a company spokeswoman told Reuters.
Another vessel, the Hanjin Rome, was seized in Singapore late on Monday by a creditor, according to court information. "Now Hanjin must do everything it can to protect its clients' cargoes and make sure they are not delayed to their destination, by filing injunctions to block seizures in all the countries where its ships are located," said Bongiee Joh, managing director of the Korea Shipowners' Association.
Finally, while jarring Hanjin's bankrtupcy was inevitable: shipping industry economics have deteriorated. Charter rates for medium-sized container ships have dropped from around $26,000 a day in 2010 to $13,000 per day now.  Container rates from Shanghai to the U.S west coast have more than halved since then, from around $2,000 per 40-foot container in January 2010 to $596 per 40-foot box last week, data from the Shanghai Shipping Exchange shows.
Shares in Hanjin Shipping have been suspended after plunging 24% on Tuesday.
The global implications from the bankruptcy are unknown: if, as expected, the company's ships remain "frozen" and inaccessible for weeks if not months, the impact on global supply chains will be devastating, potentially resulting in a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. The good news is that both economists and corporations around the globe, both those impacted and others, will now have yet another excuse on which to blame the "unexpected" slowdown in both profits and economic growth in the third quarter.

"The state within a state is hiding mostly in plain sight.

The pressure to conform to an authority figure or peer group can cause people to behave in shocking ways.

It is not too much to say that Wall Street may be the ultimate owner of the Deep State and its strategies, if for no other reason than that it has the money to reward government operatives with a second career that is lucrative beyond the dreams of avarice - certainly beyond the dreams of a salaried government employee.

The corridor between Manhattan and Washington is a well-trodden highway for the personalities we have all gotten to know in the period since the massive deregulation of Wall Street."

-Mike Lofgren

As we noted previouslythe deep state seems to have grown, strengthened and tightened its grip.  Can a lack of real money restrain or starve it?  I once thought so, and maybe I still do.  But it doesn’t use real money, but rather debt and creative financing to get that next new car, er, war and intervention and domestic spending program.  Ultimately it’s not sustainable, and just as unaffordable cars are junked, stripped, repossessed, and crunched up, so will go the way of the physical assets of the warfare–welfare state.
Because inflated salariesinflated stock prices and inflated ruling-class personalities are month to month, these should evaporate more quickly, over a debris field once known as some of richest counties in the United States.  Can I imagine the shabbiest of trailer parks in the dismal swamp, where high rises and government basilicas and abbeys once stood?  I’d certainly like to.  But I’ll settle for well-kept, privately owned house trailers, filled with people actually producing some small value for society, and minding their own business.
Can a lack of public support reduce the deep state, or impact it?  Well, it would seem that this is a non-factor, except for the strange history we have had and are witnessing again today, with the odd successful popular and populist-leaning politician and their related movements.  In my lifetime, only popular figures and their movements get assassinated mysteriously, with odd polka dot dresses, MKULTRA suggestions, threats against their family by their competitors (I’m thinking Perot, but one mustn’t be limited to that case), and always with concordant pressures on the sociopolitical seams in the country, i.e riots and police/military activations.  The bad dealings toward, and genuine fear of, Bernie Sanders within the Democratic Party’s wing of the deep state is matched or exceeded only by the genuine terror of Trump among the Republican deep state wing.   This reaction to something or some person that so many in the country find engaging and appealing — an outsider who speaks to the growing political and economic dissatisfaction of a poorer, more indebted, and more regulated population – is heart-warming, to be sure.  It is a sign that whether or not we do, the deep state thinks things might change.  Thank you, Bernie and especially Donald, for revealing this much!  And the “republicanization” of the Libertarian Party is also a bright indicator blinking out the potential of deep state movement and compromise in the pursuit of “stability.”
Finally, what of those pinpricks of light, the honest assessments of the real death trail and consumption pit that the deep state has delivered?  Well, it is growing and broadening.  Wikileaks and Snowden are considered assets now to any and all competitors to the US deep state, from within and from abroad – the Pandora’s box, assisted by technology, can’t be closed now. The independent media has matured to the point of criticizing and debating itself/each other, as well as focusing harsh light on the establishment media.  Instead of left and right mainstream media, we increasingly recognize state media, and delightedly observe its own struggle to survive in the face of a growing nervousness of the deep state it assists on command.
Maybe we will one day soon be able to debate how deep the deep state really is, or whether it was all just a dressed up, meth’ed up, and eff’ed up a sector of society that deserves a bit of jail time, some counseling, and a new start.  Maybe some job training that goes beyond the printing of license plates.  But given the destruction and mass murder committed daily in the name of this state, and the environmental disasters it has created around the world for the future generations, perhaps we will be no more merciful to these proprietors of the American empire as they have been to their victims. The ruling class deeply fears our judgment, and in this dynamic lies the cure.
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The mainstream press is accusing Russia of being behind the release of information on the NSA's dirty hacking tools.
Washington’s Blog asked the highest-level NSA whistleblower in history, William Binney – the NSA executive who created the agency’s mass surveillance program for digital information, who served as the senior technical director within the agency, who managed six thousand NSA employees, the 36-year NSA veteran widely regarded as a “legend” within the agency and the NSA’s best-ever analyst and code-breaker, who mapped out the Soviet command-and-control structure before anyone else knew how, and so predicted Soviet invasions before they happened (“in the 1970s, he decrypted the Soviet Union’s command system, which provided the US and its allies with real-time surveillance of all Soviet troop movements and Russian atomic weapons”) – what he thinks of such claims.
Binney told us:
The probability is that an insider provided the data.

I say this because the NSA net is a closed net that is continuously encrypted.  Which would mean, that if someone wanted to hack into the NSA network they would not only have to know weaknesses in the network/firewalls/tables and passwords but also be able to penetrate the encryption.

So, my bet is that it is an insider.  In my opinion, if the Russians had these files, they would use them not leak them or any part of them to the world.
Similarly, former NSA employee, producer for ABC’s World News Tonight, and long-time reporter on the NSA James Bamfordnotes:
If Russia had stolen the hacking tools, it would be senseless to publicize the theft, let alone put them up for sale. It would be like a safecracker stealing the combination to a bank vault and putting it on Facebook. Once revealed, companies and governments would patch their firewalls, just as the bank would change its combination.

A more logical explanation could also be insider theft. If that’s the case, it’s one more reason to question the usefulness of an agency that secretly collects private information on millions of Americans but can’t keep its most valuable data from being stolen, or as it appears in this case, being used against us.

***

The reasons given for laying the blame on Russia appear less convincing, however. “This is probably some Russian mind game, down to the bogus accent,” James A. Lewis, a computer expert at the Center for Strategic and International Studies, a Washington think tank, told the New York Times. Why the Russians would engage in such a mind game, he never explained.

Rather than the NSA hacking tools being snatched as a result of a sophisticated cyber operation by Russia or some other nation, it seems more likely that an employee stole them. Experts who have analyzed the files suspect that they date to October 2013, five months after Edward Snowden left his contractor position with the NSA and fled to Hong Kong carrying flash drives containing hundreds of thousands of pages of NSA documents.
So, if Snowden could not have stolen the hacking tools, there are indications that after he departed in May 2013, someone else did, possibly someone assigned to the agency’s highly sensitive Tailored Access Operations.

In December 2013, another highly secret NSA document quietly became public. It was a top secret TAO catalog of NSA hacking tools. Known as the Advanced Network Technology (ANT) catalog, it consisted of 50 pages of extensive pictures, diagrams and descriptions of tools for every kind of hack, mostly targeted at devices manufactured by U.S. companies, including Apple, Cisco, Dell and many others.

Like the hacking tools, the catalog used similar codenames.

***

In 2014, I spent three days in Moscow with Snowden for a magazine assignment and a PBS documentary. During our on-the-record conversations, he would not talk about the ANT catalog, perhaps not wanting to bring attention to another possible NSA whistleblower.

I was, however, given unrestricted access to his cache of documents. These included both the entire British, or GCHQ, files and the entire NSA files.

But going through this archive using a sophisticated digital search tool, I could not find a single reference to the ANT catalog. This confirmed for me that it had likely been released by a second leaker. And if that person could have downloaded and removed the catalog of hacking tools, it’s also likely he or she could have also downloaded and removed the digital tools now being leaked.
And Motherboard reports:
“My colleagues and I are fairly certain that this was no hack, or group for that matter,” the former NSA employee told Motherboard. “This ‘Shadow Brokers’ character is one guy, an insider employee.”

The source, who asked to remain anonymous, said that it’d be much easier for an insider to obtain the data that The Shadow Brokers put online rather than someone else, even Russia, remotely stealing it. He argued that “naming convention of the file directories, as well as some of the scripts in the dump are only accessible internally,” and that “there is no reason” for those files to be on a server someone could hack. He claimed that these sorts of files are on a physically separated network that doesn’t touch the internet; an air-gap.

***

“We are 99.9 percent sure that Russia has nothing to do with this and even though all this speculation is more sensational in the media, the insider theory should not be dismissed,” the source added. “We think it is the most plausible.”

***

Another former NSA source, who was contacted independently and spoke on condition of anonymity, said that “it’s plausible” that the leakers are actually a disgruntled insider, claiming that it’s easier to walk out of the NSA with a USB drive or a CD than hack its servers.

Michael Adams, an information security expert who served more than two decades in the US Special Operations Command, agreed that it’s a viable theory.

“It’s Snowden junior,” Adams told Motherboard. “Except he doesn’t want to end up in virtual prison in Russia. He’s smart enough to rip off shit, but also smart enough to be unidentifiable.”
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Well, it finally happened.  Mark your calendars for the year 2016 as 'the year' a real One World Currency has been announced.  But don't worry - as we explain in Splitting Pennies - Understanding Forex - MONEY DOESN'T EXIST.
How is it possible, you say - when we haven't heard about it in the news?  Let's start with the 'lead' story on this breaking event:
UBS, Deutsche Bank, Santander and BNY Mellon have partnered up to create a new digital currency to facilitate intra-bank settlements, the FT reports. The cryptocurrency will use blockchain technology underpinning the Bitcoin.
Why is this different than any other Bitcoin startup - there sure have been many.  Because these are the banks that control the global currency market, also known as AKA 'the cartel' according to court documents.  
Checkout some of the stories leading up into this climatic moment:
So why does any of this matter?  Central Banking policy has run the global economy into the ground.  Central Banks OWN $25 Trillion of Financial Assets.  $13 Trillion worth of Government Bonds in the world have NEGATIVE YIELDS.  The financial system as it is now, is on the path for implosion. 
Settlement Coin apparently is targeting 'back office settlement' to reduce costs which are about $80 Billion per year.  But why then does RT compare it with SDRs:
If implemented, the new cryptocurrency would be the first to be used officially between major financial institutions. The concept resembles the IMF’s Special Drawing Right (SDR), introduced in 1964. Based on a basket of currencies (the US dollar, euro, the Japanese yen, pound sterling and the soon to be joined Chinese yuan this October), it is used to supplement the IMF’s member countries’ official reserve. As of March 2016, 204.1 billion SDRs equivalent to about $285 billion had been created and allocated to countries.
Has the world gone mad, and people don't understand the difference between "Blockchain" and "Bitcoin" and "Cryptocurrency" and "US Dollars" ?  We have to note here, RT needs to hire some "Forex Experts" to consult with their authors on this topic.
To clarify, the big banks are working on multiple blockchain projects, as well - most of them have filed patents for their own crypto currencies, most notably, Citi: 
Citi Research released a 56-page report on bitcoin saying that it is not going to disrupt banks or credit card networks. It says there will be increased transaction costs for bitcoin to provide increased volume. As for the use of bitcoin in remittance payments, it says bitcoin’s advantage dissipates when the “last mile” cost of converting to fiat currency is considered. The report notes the growth of bitcoin mobile apps in developing countries but sees regulations rising that put them in question. It claims existing payment systems are generally efficient. The report also talks about Ripple and Ethereum as well as government-backed digital currencies. There is also an extensive summary of bitcoin’s legal status in different countries.
Once implemented, these banks have the means to quickly connect this new cryptocurrency "Settlement Coin" to their existing global network, as well as adding their own proprietary currencies such as "CitiCoin."
It will take some time before the cryptocurrency is even released, and still probably years before it's widely accepted.  What makes this week's announcement unique is that, for the first time the banks publicly announced they are making a new digital 'crypto currency' that isn't issued by a central bank, that can be implemented by them across and without borders, which is a perfect fit for a replacement of the US Dollar and other fiat currencies when they completely run out of QE steam.
But here's the real clincher, exposing this as a real One World Currency:
One of those resources is the real-time gross settlement (RTGS) system used by central banks (it's typically reserved for high-value transactions that need to be settled instantly), and the other is central bank-issued cash.  Using the Utility Settlement Coin (USC) unveiled today, the five-member consortium that has sprung up around the project aims to help central banks open-up access to these tools to more customers. If successful, USC has the potential to create entirely new business models built on instant settling and easy cash transfers.  In interview, Robert Sams, founder of London-based Clearmatics, said his firm initially worked with UBS to build the network, and that BNY Mellon, Deutsche Bank, ICAP and Santander are only just the first of many future members.  "Cash is a leg to almost every trade," said Sams, who previously worked for nine years as a derivatives trader with Sanctum FI, also in London. "In order to get most of the benefits of a distributed ledger in settlement, there has to be cash on a distributed ledger rail."  How transactions might be processed, and who will own the nodes, has also not been shared. But what we do know based on a statement from the company is that Clearmatics described the USC as "a series of cash assets" for currencies, including US dollars, euros, British pounds and Swiss francs.
For those who understand that it's monetary policy driving the value of currencies down, not supply and demand, there's no need to read between the lines - they spell it all out real simple.
For a quick primer for those who don't know, the Federal Reserve is the sole issuer of US Currency (not the US Mint, who prints notes and coins.)  The Federal Reserve is a private institution, owned by the banks.  It was previously thought that, the idea of a one world currency was preposterous, because, how would all countries agree on having a single central bank?  But here's the workaround - the Forex banks have a monopoly on the global monetary system.  So by forcing their central bank partners to use "Settlement Coin" in order to save on hefty settlement fees (and it will solve the problem of the recent SWIFT hacks as well - part of the plan??? )
A few scenarios here - one, the banks knew that if they didn't do it, some new players might do it.  Two, this plan was hatched long ago by some clandestine CIA op, starting with the release of Bitcoin, leading into the global one world cryptocurrency, all sponsored by Illuminati.  Three, central banks have legitimate concerns about security (such as because of recent hacks) and have no real way out of QE, they can't stop it and they can't continue it.  This is a parallel financial system in which assets can be transferred over to.
To learn more about Forex, checkout Splitting Pennies - the pocket guide to make you an instant Forex genius!  If you're a non-US citizen or Pension Fund looking for a real Forex investment with a proven track record, checkout Magic FX Strategy.  

As its era of global dominance ends, the United States needs to take the lead in realigning the global power architecture.
Five basic verities regarding the emerging redistribution of global political power and the violent political awakening in the Middle East are signaling the coming of a new global realignment.
The first of these verities is that the United States is still the world’s politically, economically, and militarily most powerful entity but, given complex geopolitical shifts in regional balances, it is no longer the globally imperial power. But neither is any other major power.
The second verity is that Russia is experiencing the latest convulsive phase of its imperial devolution. A painful process, Russia is not fatally precluded – if it acts wisely – from becoming eventually a leading European nation-state. However, currently it is pointlessly alienating some of its former subjects in the Islamic southwest of its once extensive empire, as well as Ukraine, Belarus, and Georgia, not to mention the Baltic States.
The third verity is that China is rising steadily, if more slowly as of late, as America’s eventual coequal and likely rival; but for the time being it is careful not to pose an outright challenge to America. Militarily, it seems to be seeking a breakthrough in a new generation of weapons while patiently enhancing its still very limited naval power.
The fourth verity is that Europe is not now and is not likely to become a global power. But it can play a constructive role in taking the lead in regard to transnational threats to global wellbeing and even human survival. Additionally, Europe is politically and culturally aligned with and supportive of core U.S. interests in the Middle East, and European steadfastness within NATO is essential to an eventually constructive resolution of the Russia-Ukraine crisis.
The fifth verity is that the currently violent political awakening among post-colonial Muslims is, in part, a belated reaction to their occasionally brutal suppression mostly by European powers. It fuses a delayed but deeply felt sense of injustice with a religious motivation that is unifying large numbers of Muslims against the outside world; but at the same time, because of historic sectarian schisms within Islam that have nothing to do with the West, the recent welling up of historical grievances is also divisive within Islam.
Taken together as a unified framework, these five verities tell us that the United States must take the lead in realigning the global power architecture in such a way that the violence erupting within and occasionally projected beyond the Muslim world—and in the future possibly from other parts of what used to be called the Third World—can be contained without destroying the global order. We can sketch this new architecture by elaborating briefly each of the five foregoing verities.
First, America can only be effective in dealing with the current Middle Eastern violence if it forges a coalition that involves, in varying degrees, also Russia and China. To enable such a coalition to take shape, Russia must first be discouraged from its reliance on the unilateral use of force against its own neighbors—notably Ukraine, Georgia, the Baltic States—and China should be disabused of the idea that selfish passivity in the face of the rising regional crisis in the Middle East will prove to be politically and economically rewarding to its ambitions in the global arena. These shortsighted policy impulses need to be channeled into a more farsighted vision.
Second, Russia is becoming for the first time in its history a truly national state, a development that is as momentous as it is generally overlooked. The Czarist Empire, with its multinational but largely politically passive population, came to an end with World War I and the Bolshevik creation of an allegedly voluntary union of national republics (the USSR), with power resting effectively in Russian hands, took its place. The collapse of the Soviet Union at the end of 1991 led to the sudden emergence of a predominantly Russian state as its successor, and to the transformation of the former Soviet Union’s non-Russian “republics” into formally independent states. These states are now consolidating their independence, and both the West and China—in different areas and different ways—are exploiting that new reality to Russia’s disadvantage. In the meantime, Russia’s own future depends on its ability to become a major and influential nation-state that is part of a unifying Europe. Not to do so could have dramatically negative consequences for Russia’s ability to withstand growing territorial-demographic pressure from China, which is increasingly inclined as its power grows to recall the “unequal” treaties Moscow imposed on Beijing in times past.
Third, China’s dramatic economic success requires enduring patience and the country’s awareness that political haste will make for social waste. The best political prospect for China in the near future is to become America’s principal partner in containing global chaos of the sort that is spreading outward (including to the northeast) from the Middle East. If it is not contained, it will contaminate Russia’s southern and eastern territories as well as the western portions of China. Closer relations between China and the new republics in Central Asia, the post-British Muslim states in Southwest Asia (notably Pakistan) and especially with Iran (given its strategic assets and economic significance), are the natural targets of Chinese regional geopolitical outreach. But they should also be targets of global Sino-American accommodation.
Fourth, tolerable stability will not return to the Middle East as long as local armed military formations can calculate that they can be simultaneously the beneficiaries of a territorial realignment while selectively abetting extreme violence. Their ability to act in a savage manner can only be contained by increasingly effective—but also selective—pressure derived from a base of U.S.-Russian-Chinese cooperation that, in turn, enhances the prospects for the responsible use of force by the region’s more established states (namely, Iran, Turkey, Israel, and Egypt). The latter should also be the recipients of more selective European support. Under normal circumstances, Saudi Arabia would be a significant player on that list, but the current inclination of the Saudi government still to foster Wahhabi fanaticism, even while engaged in ambitious domestic modernization efforts, raises grave doubts regarding Saudi Arabia’s ability to play a regionally significant constructive role.
Fifth, special attention should be focused on the non-Western world’s newly politically aroused masses. Long-repressed political memories are fueling in large part the sudden and very explosive awakening energized by Islamic extremists in the Middle East, but what is happening in the Middle East today may be just the beginning of a wider phenomenon to come out of Africa, Asia, and even among the pre-colonial peoples of the Western Hemisphere in the years ahead.
Periodic massacres of their not-so-distant ancestors by colonists and associated wealth-seekers largely from western Europe (countries that today are, still tentatively at least, most open to multiethnic cohabitation) resulted within the past two or so centuries in the slaughter of colonized peoples on a scale comparable to Nazi World War II crimes: literally involving hundreds of thousands and even millions of victims. Political self-assertion enhanced by delayed outrage and grief is a powerful force that is now surfacing, thirsting for revenge, not just in the Muslim Middle East but also very likely beyond.
Much of the data cannot be precisely established, but taken collectively, they are shocking. Let just a few examples suffice. In the 16th century, due largely to disease brought by Spanish explorers, the population of the native Aztec Empire in present-day Mexico declined from 25 million to approximately one million. Similarly, in North America, an estimated 90 percent of the native population died within the first five years of contact with European settlers, due primarily to diseases. In the 19th century, various wars and forced resettlements killed an additional 100,000. In India from 1857-1867, the British are suspected of killing up to one million civilians in reprisals stemming from the Indian Rebellion of 1857. The British East India Company’s use of Indian agriculture to grow opium then essentially forced on China resulted in the premature deaths of millions, not including the directly inflicted Chinese casualties of the First and Second Opium Wars. In the Congo, which was the personal holding of Belgian King Leopold II, 10-15 million people were killed between 1890 and 1910. In Vietnam, recent estimates suggest that between one and three million civilians were killed from 1955 to 1975.
As to the Muslim world in Russia’s Caucasus, from 1864 and 1867, 90 percent of the local Circassian population was forcibly relocated and between 300,000 and 1.5 million either starved to death or were killed. Between 1916 and 1918, tens of thousands of Muslims were killed when 300,000 Turkic Muslims were forced by Russian authorities through the mountains of Central Asia and into China. In Indonesia, between 1835 and 1840, the Dutch occupiers killed an estimated 300,000 civilians. In Algeria, following a 15-year civil war from 1830-1845, French brutality, famine, and disease killed 1.5 million Algerians, nearly half the population. In neighboring Libya, the Italians forced Cyrenaicans into concentration camps, where an estimated 80,000 to 500,000 died between 1927 and 1934.
More recently, in Afghanistan between 1979 and 1989 the Soviet Union is estimated to have killed around one million civilians; two decades later, the United States has killed 26,000 civilians during its 15-year war in Afghanistan. In Iraq, 165,000 civilians have been killed by the United States and its allies in the past 13 years. (The disparity between the reported number of deaths inflicted by European colonizers compared with the United States and its allies in Iraq and Afghanistan may be due in part to the technological advances that have resulted in the more productive use of force and in part as well to a shift in the world’s normative climate.) Just as shocking as the scale of these atrocities is how quickly the West forgot about them.
In today’s postcolonial world, a new historical narrative is emerging. A profound resentment against the West and its colonial legacy in Muslim countries and beyond is being used to justify their sense of deprivation and denial of self-dignity. A stark example of the experience and attitudes of colonial peoples is well summarized by the Senegalese poet David Diop in “Vultures”:
In those days,When civilization kicked us in the faceThe vultures built in the shadow of their talonsThe blood stained monument of tutelage…
Given all this, a long and painful road toward an initially limited regional accommodation is the only viable option for the United States, Russia, China, and the pertinent Middle Eastern entities. For the United States, that will require patient persistence in forging cooperative relationships with some new partners (particularly Russia and China) as well as joint efforts with more established and historically rooted Muslim states (Turkey, Iran, Egypt, and Saudi Arabia if it can detach its foreign policy from Wahhabi extremism) in shaping a wider framework of regional stability. Our European allies, previously dominant in the region, can still be helpful in that regard.
A comprehensive U.S. pullout from the Muslim world favored by domestic isolationists, could give rise to new wars (for example, Israel vs. Iran, Saudi Arabia vs. Iran, a major Egyptian intervention in Libya) and would generate an even deeper crisis of confidence in America’s globally stabilizing role. In different but dramatically unpredictable ways, Russia and China could be the geopolitical beneficiaries of such a development even as global order itself becomes the more immediate geopolitical casualty. Last but not least, in such circumstances a divided and fearful Europe would see its current member states searching for patrons and competing with one another in alternative but separate arrangements among the more powerful trio.
Aconstructive U.S. policy must be patiently guided by a long-range vision. It must seek outcomes that promote the gradual realization in Russia (probably post-Putin) that its only place as an influential world power is ultimately within Europe. China’s increasing role in the Middle East should reflect the reciprocal American and Chinese realization that a growing U.S.-PRC partnership in coping with the Middle Eastern crisis is an historically significant test of their ability to shape and enhance together wider global stability.
The alternative to a constructive vision, and especially the quest for a one-sided militarily and ideologically imposed outcome, can only result in prolonged and self-destructive futility. For America, that could entail enduring conflict, fatigue, and conceivably even a demoralizing withdrawal to its pre-20th century isolationism. For Russia, it could mean major defeat, increasing the likelihood of subordination in some fashion to Chinese predominance. For China, it could portend war not only with the United States but also, perhaps separately, with either Japan or India or with both. And, in any case, a prolonged phase of sustained ethnic, quasi-religious wars pursued through the Middle East with self-righteous fanaticism would generate escalating bloodshed within and outside the region, and growing cruelty everywhere.
The fact is that there has never been a truly “dominant” global power until the emergence of America on the world scene. Imperial Great Britain came close to becoming one, but World War I and later World War II not only bankrupted it but also prompted the emergence of rival regional powers. The decisive new global reality was the appearance on the world scene of America as simultaneously the richest and militarily the most powerful player. During the latter part of the 20thcentury no other power even came close.
That era is now ending. While no state is likely in the near future to match America’s economic-financial superiority, new weapons systems could suddenly endow some countries with the means to commit suicide in a joint tit-for-tat embrace with the United States, or even to prevail. Without going into speculative detail, the sudden acquisition by some state of the capacity to render America militarily inferior would spell the end of America’s global role. The result would most probably be global chaos. And that is why it behooves the United States to fashion a policy in which at least one of the two potentially threatening states becomes a partner in the quest for regional and then wider global stability, and thus in containing the least predictable but potentially the most likely rival to overreach. Currently, the more likely to overreach is Russia, but in the longer run it could be China.
Since the next twenty years may well be the last phase of the more traditional and familiar political alignments with which we have grown comfortable, the response needs to be shaped now. During the rest of this century, humanity will also have to be increasingly preoccupied with survival as such on account of a confluence of environmental challenges. Those challenges can only be addressed responsibly and effectively in a setting of increased international accommodation. And that accommodation has to be based on a strategic vision that recognizes the urgent need for a new geopolitical framework.
*The author acknowledges the helpful contribution of his research assistant Paul Wasserman, and the scholarship on the subject of colonial brutality by Adam Hochschild, Richard Pierce, William Polk, and the Watson Institute at Brown University, among others.
Zbigniew Brzezinski is a counselor at the Center for Strategic and International Studies and was the National Security Advisor to President Jimmy Carter from 1977-81. He is the author, most recently, of Strategic Vision: America and the Crisis of Global Power.

UBS, Deutsche Bank, Santander and BNY Mellon have partnered up to create a new digital currency to facilitate intra-bank settlements, the FT reports. The cryptocurrency will use blockchain technology underpinning the Bitcoin.
The banks are working with London-based blockchain startup Clearmatics, and the official launch is expected in 2018, according to the media.
“Today trading between banks and institutions is difficult, time-consuming and costly, which is why we all have big back offices. This is about streamlining it and making it more efficient,” Julio Faura, head of R&D and innovation at Santander told the FT.
All four banks are members of the 50-strong R3 consortium of financial institutions exploring ways of blockchain usage in the financial system.
“You need a form of digital cash on the distributed ledger in order to get maximum benefit from these technologies. What that allows us to do is to take away the time these processes take, such as waiting for payment to arrive. That frees up capital trapped during the process,” said Hyder Jaffrey, head of financial technology innovation at UBS.
According to a report by a consulting firm Oliver Wyman, the world spends up to $80 billion every year to clear and settle trades.
This post sponsored by LIQUID CLAIMS

With 85% of Wall Street telling Citi they expect a "dovish hike signal" from Yellen tomorrow, which means a polite request for another BTFD opportunity, even if as BofA says "expectations for a dovish Fed are coinciding with macro strength in the US (most obviously in housing & consumer spending) as well as highest level of wage inflation since Jan’10"...
... here is a quick reminder of where we currently stand from BofA's Michael Hartnett, from a brief note titled The Liquidity Supernova & the "Keynesian Put."
* * *
Risk assets are now supported by the new ”Keynesian Put”, the expectation that fiscal measures will be deployed to combat any renewed weakness in the economy/markets (independently of any larger political projects). But asset prices remain primarily supported by excess monetary abundance across the world:
  1. There have been 667 interest rate cuts by global central banks since Lehman;
  2. G7 central bank governors Yellen, Kuroda, Draghi, Carney & Poloz have been in their current posts for a collective 17 years, yet only one (Yellen in Dec’15) has actually hiked interest rates during this time;
  3. Central banks own $25tn of financial assets (a sum larger than GDP of US + Japan, and up $12tn since Lehman);
  4. There are currently $12.3tn of negative yielding global bonds (28% of total);
  5. There is currently $8tn of negative yielding sovereign debt (54% of total).
Do not expect any unwind of this $25 trillion in risk asset support to be unwound any time soon, or perhaps ever, or else...
The Crab Nebula supernova

YOUR POCKET GUIDE TO BE A FOREX GENIUS - SPLITTING PENNIES


A year-old technology firm wants to simplify currency markets by streamlining the way trading data is stored using blockchain-based technology.
Cobalt DL, a London-based firm created last year by former Traiana Inc. Chief Executive Officer Andy Coyne, announced Wednesday that it began beta testing on a distributed ledger network, which the firm hopes can cut post-trade costs and provide a singular database for foreign-exchange transactions. Set to launch in 2017, the network will create a single record for each trade.
“The execution in the FX markets over the last 10 years has really accelerated,” Coyne said. “If you’re not simplifying, if you’re not taking the opportunity to recreate the whole shared trade system, I think you’re missing an opportunity.”
The platform, according to a statement, is expected to save “billions of dollars” for market participants by avoiding things like charges for ticketing, staffing and licensing. Currently, many are burdened by having to maintain multiple systems and layers to maintain records, Coyne said.
The network will use blockchain concepts like encryption and digital signatures to create the unified system. Blockchain, the software that powers bitcoin, is a type of distributed database that’s being touted as a way to upend the financial industry.
Cobalt already has eight “leading institutional FX participants” signed on to use the system. The firm declined to specify the firms. The announcement comes 18 months after Coyne left Traiana, which was owned by ICAP Plc, an independent brokerage firm that provides a similar system.

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Deposit bail-in risks are slowly being realised in Ireland, after it emerged overnight that FBD, one of Ireland's largest insurance companies, have been moving cash out of Irish bank deposits and into bonds.
Revelations regarding deposit bail-in risks came in the wake of warnings of a new property crash centred on the housing market in Ireland. The former deputy governor of the Central Bank warned in an op-ed in a leading international financial publication, Project Syndicate, that Ireland is at risk of another housing market crash.
Insurer FBD has moved over €150 million out of the Irish banking system and into corporate and sovereign bonds over the past year. The move was prompted by low returns offered by bank deposits and the risks that deposit bail-in rules could see deposits confiscated.
FBD chief executive Fiona Muldoon told the Irish Independent that the "extremely low returns offered on term deposits by banks, coupled with fears that new bail-in rules introduced this year by the European Union could expose bank bondholders and depositors to bailing out a failed lender, meant it has shifted investments away from banks."
The new deposit bail-in mechanism is designed to protect banks and is touted as a way to prevent taxpayers being liable for bailing out collapsed lenders. It is believed that it leaves bank bondholders and deposit customers with more than €100,000 on deposit at risk of footing the bill.
There is a belief that bail-ins only relate to “the wealthy” and "rich" depositors as they will be imposed on those with deposits greater than national deposit guarantees. These deposit “guarantees” are generally the ‘big round’, arbitrary number of say €100,000, $250,000 and £75,000. These are not particularly large amounts and could amount to the entire life savings of a pensioner, a family or indeed it could be the entire capital of a small to medium size business enterprise.
An example of this is the UK where the deposit guarantee was arbitrarily, suddenly and with little fanfare quietly reduced from £100,000 to £75,000 just last year in July 2015.
Thus, it is important to note that the arbitrary round number in the various government deposit guarantees can be, and probably will be, reduced to a lower number – say the new round number of €50,000, £50,000 and $50,000 -  depending on the severity of the next banking crash.
In the event of bail-ins, governments and banks are likely to seek to impose deeper haircuts on creditors including depositors in order to bail-out and protect the failing banking system.
FBD's deposits with Irish banks were reduced from €451 million to €305 million in recent months. FBD made a €3.1m loss in the first half of the year.
As reported by the Irish Independent:
"As they mature, and as the bank bail-in rules come into play, it's no longer the case that for corporate investors depositing at a bank is risk free," she added.
"To be honest, the return is abysmal now. We've gone back to a more typical investment portfolio for an insurance company."
"You have to be paid for the risk you take," she added. "You might entertain the bail-in risk if you were being properly paid. But if you've a bank trying to charge you for leaving your money with them, you're not inclined to take any risk at all."
The recent bank stress tests showed that Irish banks are the most vulnerable in the EU in the event of another financial crisis.
Meanwhile, the risk of another property crash centred on the housing market has been warned of by a respected economist. Stefan Gerlach, who left the Central Bank of Ireland earlier this year to become Chief Economist at BSI Bank in Zurich, asked:
"Having endured the collapse of its housing market less than a decade ago, Ireland has lately been experiencing a blistering recovery in prices, which already have risen in Dublin by some 50% from the trough in 2010, is Ireland setting itself up for another devastating crash?”
Among the concerns he expresses in an article titled 'The Return of Ireland’s Housing Bubble' for the global finance think-tank Project Syndicate is that the Central Bank here is coming under undue pressure from the construction industry and politicians to relax the loan to value and loan to income ratios on mortgage lending it introduced last year.
He warns that while housing bubbles are easy to spot, there are a number of conflicts of interest that make it hard to take action as the market gets out of control as reported by Newstalk:
"The obvious question is why nobody stepped in before it was too late. The answer is simple: while the bubbles are inflating, many people benefit. With the construction sector thriving, unemployment falling, and banks lending freely, people are happy – and politicians like it that way."
"Many in Ireland might find that conclusion overly pessimistic. Maybe they are simply hoping that, this time, the luck of the Irish will hold. Perhaps it will, and this time really is different. But there isn’t much evidence of that," he concludes.
The 'Bail-in regime' is one of the greatest financial risks to investors, savers and indeed companies internationally today. Yet it remains the most poorly covered financial risk and is largely ignored by financial advisers, brokers and not surprisingly governments and banks.
The growing financial risk in all western countries has not been properly analysed. In a world already beset with huge deflationary pressures and still insolvent banks, the bail-in regime and confiscating deposits, especially from job creating companies, would be extremely deflationary and would likely contribute to severe recessions.
This is something we warned of when we first conducted our extensive research on the developing global bail-in regimes after the Cyprus bail-ins in 2013. Diversification of deposits remains vital and one important way to protect against a bail-in is owning physical gold. Taking delivery of gold coins and bars and owning bullion in allocated and segregated storage in the safest vaults in the world is a prudent way to protect against the deposit bail-in regime.
Gold and Silver Bullion - News and Commentary
Gold Prices (LBMA AM)
15Aug: USD 1,339.20, GBP 1,037.21 & EUR 1,198.85 per ounce
12Aug: USD 1,336.70, GBP 1,032.60 & EUR 1,199.02 per ounce
11Aug: USD 1,344.55, GBP 1,037.05 & EUR 1,206.06 per ounce
10Aug: USD 1,351.85, GBP 1,035.11 & EUR 1,209.23 per ounce
09Aug: USD 1,332.90, GBP 1,025.80 & EUR 1,201.74 per ounce
08Aug: USD 1,330.00, GBP 1,019.84 & EUR 1,198.86 per ounce
05Aug: USD 1,362.60, GBP 1,036.39 & EUR 1,222.53 per ounce
Silver Prices (LBMA)
15Aug: USD 19.90, GBP 15.40 & EUR 17.81 per ounce
12Aug: USD 19.87, GBP 15.33 & EUR 17.81 per ounce
11Aug: USD 20.21, GBP 15.56 & EUR 18.13 per ounce
10Aug: USD 20.34, GBP 15.55 & EUR 18.19 per ounce
09Aug: USD 19.70, GBP 15.18 & EUR 17.77 per ounce
08Aug: USD 19.66, GBP 15.04 & EUR 17.74 per ounce
05Aug: USD 20.22, GBP 15.36 & EUR 18.14 per ounce

Recent Market Updates
- Money "Madness" Negative Interest Rates Sees Gold Buying Surge
- Gold Investment Demand Reaches Record In First Half 2016 On “Perfect Storm”
- Peak Gold – Did Gold Production Peak in 2015?
- Financial Times: “Victory For Gold Bulls Is Only Just Beginning”
- Irish Banks Most Vulnerable In Stress Tests – Banking Contagion In EU Cometh
- Gold In Sterling 2.2% Higher After Bank Of England Cuts To 0.25% and Expands QE
- Silver Kangaroo Coins – Sales Surge To Over 10 Million
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- Marc Faber: Invest 25% Of Investment Portfolios In Gold Bullion
- “Could Not Invent A More Bullish Story For Gold Bullion”
- Gold In Bull Market – “Every Reason For It To Continue” – Frisby In Money 
- Is Gold Set To Hit $1,500 Per Ounce?
- Why Italy’s bank crisis could be a ‘ticking time bomb’

http://www.zerohedge.com/news/2016-08-15/deposit-bail-warning-ireland-bail-risk-uk-very-high

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