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Tuesday, 30 June 2015

What A Mess, Greece, China, Bonds, Brazil, Water ...? & More



Prime Minister Alexis Tsipras, who blindsided creditors by calling a referendum on the austerity cuts in the aid package proposed by the creditors, appeared on television on Sunday night to announce capital controls to prevent banks from collapsing.
Their imposition capped a dramatic weekend for Greece that has pushed the country towards a likely default on 1.6 billion euros ($1.77 billion) of International Monetary Fund loans on Tuesday and closer to an exit from the euro currency bloc.

















Cheap, easy credit has created moral hazard and nurtured magical thinking throughout the global economy.* *According to polls, the majority of Greek citizens want the benefits of membership in the euro/EU and the end of EU-imposed austerity.* The idea that these are mutually exclusive doesn't seem to register. *This is the discreet charm of magical thinking:* it promises an escape from the difficulties of hard choices, tough trade-offs, the disruption of vested interests and most painfully, the breakdown of the debt machine that has enabled the distribution of swag to virtually every... 






Many Italian banks fail to start trading Monday


MILAN--Several Italian banks failed to start trading on Monday as fears over a Greek debt default induced many investors to shed peripheral stocks, including Italian, with banks suffering the most.
Sales orders on Italian stocks, in particular financial stocks, piled up before the market opening. At the start, the sales orders were so numerous that the system couldn't manage to process them, something that often happens when specific news causes a sell-off on a stock.






Japan industrial output falls more than forecast


TOKYO--Japanese industrial production fell 2.2% in May from the previous month, the Ministry of Economy, Trade and Industry said Monday, as slowing exports took the wind out of the sails of Japan's manufacturing industry.
The fall was larger than a decline of 0.8% expected by economists surveyed by The Wall Street Journal and the Nikkei.
The sluggish output figures for May came after data on consumption, inflation and employment showed Friday that the economy is growing in fits and starts after a recession last year.






Yes, the clock’s ticking louder, louder, warns the Economist, “only a matter of time before the next recession strikes.” Unfortunately, the “rich world is not ready.” America’s not prepared. You are not ready.
Get it? America’s 95 million investors are at huge risk. Remember the $10 trillion losses in the crash and recession of 2007-2009? The $8 trillion lost after the dot-com technology crash and recession of 2000-2003? This is the third big recession of the century. Yes, America will lose trillions again.
Especially with dead-ahead predictions like Mark Cook’s 4,000-point Dow correction. And Jeremy Grantham’s warning of a 50% crash around election time, with negative stock returns through the first term of the next president, beyond 2020. Starting soon.







 As Brazilian Bond Issuance Sinks 80%   

The damage inflicted by Brazil’s unprecedented bribery scandal is leaving deep scars in the country’s overseas bond market.
Foreign debt sales from the country have plunged 80 percent to just $7.5 billion this year as Petroleo Brasileiro SA -- the state-controlled oil producer at the center of a graft probe -- scales back offerings and borrowing costs remain high. The decline in issuances is the biggest since 2009.
The collapse is also being exacerbated by an economy heading for its biggest contraction in a quarter century. That’s left companies with little desire to raise funds to finance investment or expand. Petrobras itself, which sold $13.6 billion in the first half last year, has issued $2.5 billion in 2015 and announced Monday that it was slashing investment plans through 2019 by 37 percent.





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