All The Latest On Spain's Banking Disaster

"Spanish banks are once again stoking the fires of euro worries.

Three headlines in the last 24 hours have renewed focus on the deterioration of the country's fiscal position:

• Downgrades of 11 Spanish banks—and negative ratings watch actions on five more—by ratings agency Standard & Poor's have highlighted connections between the banking sector and the Spanish government (which saw its long-term credit rating slashed last week).
• Further, data published by the Spanish National Statistics Institute today showed that the domestic economy had contracted at a rate of 0.3 percent in the first quarter, or 0.4 percent from a year ago.
• The Financial Times reports that Spanish officials are in talks to funnel banks' toxic assets into a publicly supported "bad bank" in order to avoid the need for external bailout funds. This is the latest in a series of recent reports citing Spanish officials that suggest a bad bank is in the works..."

at http://www.businessinsider.com/the-latest-on-spains-banking-disaster-2012-4#ixzz1tY7wEEU4

This Is The Technological Breakthrough That's Making People Wildly Bullish On America

"This weekend, we told the story of three bears who are all bullish on America for one reason: Domestic oil and natural gas.

In particular, Hugh Hendry fund manager for Scottish group Eclectica Asset Management, cited "the momentous nature of recent advances in shale oil and gas extraction."

So what are these great breakthroughs?

As it turns out, the three great advances in shale resource extraction occurred more than a decade ago, according to Dan Steward, a geologist with Republic Energy and a former Vice President of Mitchell Energy.

The first was horizontal well drilling, which infinitely expanded the potential uses of fracking (which has actually been around since the 1920s). Here's an animation showing exactly what that looks like:..."

at http://www.businessinsider.com/this-technological-innovation-is-why-people-are-wildly-bullish-on-america-2012-4#ixzz1tY7UGwwt

China Just Invested $8 Billion In South Sudan

"China is continuing its massive investment project in Africa with an $8 billion injection of funds into Africa's newest country, the South Sudan.

South Sudanese Information Minister Barnaba Benjamin made the announcement at the weekend, Al Jazeera reports, with the huge loan earmarked for road, hydropower, infrastructure and agriculture projects..."

at http://www.businessinsider.com/china-south-sudan-oil-2012-4#ixzz1tY6nPElx

Goldman Sachs Asked Its Biggest Clients About The Fate Of The Dollar

"In his latest Viewpoints note, Jim O'Neill shared some results of a recent survey that Goldman Sachs Asset Management conducted with its clients.

GSAM, which has $714 billion in assets under management, serves some of the largest, most powerful entities in the world.

Here were some of the results:

1. I believe the world can grow faster over the next 10 years than it has over the past 10 years. 50
pct of those who responded (about half responded) said Yes; 40 pct, No. I joked that I would try to persuade some of the No’s during the day.

2. How likely is it that Africa will be a significant force in the global economy by the end of this
decade? 51 pct Yes; 32 pct No.

3. Could the US dollar ever be replaced as the dominant international reserve currency? 64 pct
answered Yes; 28 pct, No."

at http://www.businessinsider.com/goldman-sachs-survey-clients-dollar-2012-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29#ixzz1tY43vgeI

RETAIL SALES, PMI REPORTS SHOW WEAKENING EUROZONE ECONOMIES

"CNBC: – Carrefour, Europe’s biggest retailer, said it would focus on cutting prices to lure back consumers as it braced for another tough year as cash-strapped shoppers reduced spending.

The French group, posting a 0.1 percent drop in underlying first-quarter sales, said it was hit by continued weakness in its core French hypermarkets and in austerity-hit Southern Europe, where shoppers cut back on purchases of discretionary non-food items.

This problem is not unique to Carrefour. The Eurozone is experiencing a sharp contraction in the retail sector.

BBC: – Retail sales in the three largest eurozone economies – Germany, France and Italy – have fallen to their second lowest level on record, a survey says.

The purchasing managers’ index (PMI) for the three countries, compiled by research firm Markit, fell to 41.3 in April, down from 49.1 in March and the weakest reading since November 2008.

A reading below 50 indicates shrinking activity.

The chart below shows the Retail Purchasing Managers Index (Retail PMI) for the Eurozone, a leading indicator for the official retail sales numbers..."

Eurozone Retail PMI (source: Markit Partners)

at http://pragcap.com/retail-sales-pmi-reports-show-weakening-eurozone-economies

MANUFACTURING INDICES TURN SHARPLY LOWER….

"Here’s a round-up of some of the recent manufacturing surveys in the USA.  On the whole they’ve been much weaker than expected:

Dallas Fed Business Activity Index: -3.4, down from 10.8 last month.

Kansas City Manufacturing Index: 3, down from 9 last month.

Richmond Fed Index: 14, up from 7 last month.

Empire State Index: 6.56, down from 20.21 last month.

Philly Fed Survey: 8.5, down from 12.5 last month.

Chicago PMI: 56.2, down from 62.2 last month.

Interestingly, the consensus is calling for a flat ISM report despite broad weakness in recent regional reports.  Last month’s ISM report came in at 53.4 and the consensus is calling for 53 tomorrow.  If the regional surveys are telling us anything it’s likely that there’s downside risk in tomorrow’s report.  And if so, we’ll likely get more chatter about QE3 in June…."

at http://pragcap.com/manufacturing-indices-turn-sharply-lower

There Is No Solution, Only Catastrophic Outcomes

"With continued volatility in global markets, 40 year veteran, Robert Fitzwilson wrote this exclusive piece for King World News.  Fitzwilson is founder of The Portola Group, one of the premier boutique firms in the United States.  Here are Fitzwilson’s observations:  “In the minds of most people, the first reactions to the crisis of late 2008 were programs such as TARP, to stabilize the financial system, as it had gone into figurative cardiac arrest.  QE1 began in March of 2009, to get the world economy back on a recovery track.  QE2 then followed along with Operation Twist.  The debate now is to whether or not we will see QE3.”

Robert Fitzwilson continues:

“We must admit that the actions taken became necessary.  Our preferred path would have been to bolster Main Street, not Wall Street, followed by tens of thousands of prosecutions, but that was not the direction chosen.  Wall Street and the international banking system were resuscitated while Main Street languished.

Talking about whether we will see QE3 or not, distracts from the fact that all of what has transpired since late 2008 has been quantitative easing...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/29_There_Is_No_Solution,_Only_Catastrophic_Outcomes.html

Barron - The World Will See More QE, Inflation & Revolution

"With continued volatility in global markets, including gold and silver, today King World News interviewed one of the legends in the gold world, Keith Barron.  Barron consults with major gold companies around the world, as well as major brokerage houses, and he is also responsible for one of the largest gold discoveries in the last quarter century.  Here is what Barron had to say about what is taking place in Europe:  “Spain is in a tremendous amount of trouble right now.  They have had a lot of their major banks downgraded.  The country’s debt has been downgraded, yet again, and there is tremendous opposition amongst the populace regarding austerity measures.”

Keith Barron continues:

“The unemployment rate is now almost one in four people, it’s just over 24%.  If this place was in South America, they would be verging on revolution right now.  They would be pulling down statues, breaking windows and setting fire to cars.  Maybe that’s coming.

Greece is certainly not out of the woods.  We know that Portugal is in big trouble too.  The fear is that things are going to start spreading to Italy, that’s the big shoe to drop.

“But you know these anti-austerity protests, if they are going to clean these things up and go for growth, as a lot of the politicians have been claiming, then it’s going to be inflationary.  Down the road this will be very, very good for precious metals.

I think you are going to see the European Central Bank throwing money at the various crises, in Europe, that are continuing to unfold.  (Also,) I do think QE3 is coming before the US elections.  I think there is continued bad news coming both in GDP output and in employment figures for the US, and they are going to throw money at this.

So this is all very inflationary and it is very bullish for gold.  I would not at all be surprised to see another huge bounce in the gold price, like we saw last August.  Traditionally and typically these things don’t happen in the summer, but certainly we had a huge surge in price last August..."

at   http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/30_Barron_-_The_World_Will_See_More_QE,_Inflation_%26_Revolution.html

Likely diplomatic friction between the US and China

"A Chinese dissident and blind human rights lawyer, Mr Chen Guangcheng, who has been held under house arrest for the past 19 months, is under US protection. A serious diplomatic crisis ahead of Mrs Clinton’s visit to China is inevitable. She has, in the past, publicly stated that she was “alarmed” at Mr Chen’s house arrest. Recently, the disgraced Mr Bo’s henchman, Mr Wang Lijun who sought refuge with the US, was returned to the Chinese authorities – this is going to be difficult and very different..."


at http://www.ritholtz.com/blog/2012/04/likely-diplomatic-friction-between-the-us-and-china/

Gold Bull's Long Term Trendline - The Indispensable Chart

"Although they cannot resist its inevitable climb because of the changes in the global monetary system and the ongoing currency wars, the Western central banks wish the increase in the price of gold to remain 'orderly.'

And so it is..." 

at http://jessescrossroadscafe.blogspot.com/2012/04/gold-long-term-trendline.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29

"Flying Piano" Costs Pentagon $1.5 Trillion

"The Pentagon is about to waste $1.5 trillion, 38% of entire defense budget for a "virtual flying piano". That may sound preposterous, and it is. Unfortunately, it is also true.

Foreign Policy Magazine discusses the sad saga of The Jet That Ate the Pentagon."

 This month, we learned that the Pentagon has increased the price tag for the F-35 by another $289 million -- just the latest in a long string of cost increases -- and that the program is expected to account for a whopping 38 percent of Pentagon procurement for defense programs, assuming its cost will grow no more.

How bad is it? A review of the F-35's cost, schedule, and performance -- three essential measures of any Pentagon program -- shows the problems are fundamental and still growing.

at  http://globaleconomicanalysis.blogspot.com/2012/04/flying-piano-costs-pentagon-15-trillion.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

Eurozone Retail Sales Plunge at Strongest Pace Since Late-2008; German Retail Sales Plunge Into Contraction; French Retail Sales Plunge at Record Pace; Record Job Losses, Record Retail Plunge in Italy

"The word of the day is plunge. Retail sales fell like a rock in Germany and fell at a record pace in France. Jobs and retail sales plunged at a record pace in Italy, and in general, did a nose-dive across the entire Eurozone

German Retail Sales Plunge Into Contraction

Please Consider the Markit Germany Retail PMI® Report."

 Fastest drop in retail sales since April 2010 as year-and-a-half run of growth comes to an end.

Key points:

• Retail PMI falls sharply in April
• Steepest decline in margins for two years...
• ...despite wholesale price inflation hitting 15-month low

at  http://globaleconomicanalysis.blogspot.com/2012/04/eurozone-retail-sales-plunge-at.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

GDP Miss Far Bigger Than Announced; Real GDP is 0% Using More Reasonable Deflator

"The Advance Estimate for Q1 GDP came in at 2.2%, down from 3.0% in the previous quarter, and below most mainstream media estimates of 2.5%.

However, my friend BC notes ....

The GDP deflator is reported to have averaged 1.2% annualized in the past 2 qtrs. Had the trend rate from '11 persisted, the deflator would have subtracted 2.6% annualized from real GDP, resulting in a 2-qtr. growth of real GDP of 0%. 

ECRI's Achuthan would appear correct that a recession were imminent instead of looking like a dummy.

Rick Davis at the Consumer Metric Institutes makes a similar calculation."

 In their "advanced" estimate of the first quarter 2012 GDP, the Bureau of Economic Analysis (BEA) found that the annualized rate of U.S. domestic economic growth was 2.20%, down more than three-quarters of a percent from the fourth quarter of 2011. The vast bulk of the downturn was in commercial activities, with both fixed investments and inventories lowering the headline number substantially. Consumer spending on both goods and services improved slightly, and the ongoing contraction in governmental spending moderated somewhat. The BEA's bottom-line "real final sales" improved about a half-percent to an annualized growth rate of 1.61% -- hardly robust and certainly not the kind of numbers we would expect to see nearly three years into a recovery.

at  http://globaleconomicanalysis.blogspot.com/2012/04/gdp-miss-far-bigger-than-announced-real.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

Bill Black: Our System Is So Flawed That Fraud Is Mathematically Guaranteed

"Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America's top experts on financial fraud. And he laments that the US has descended into a type of crony capitalism that makes continued fraud a virtual certainty - while increasingly neutering the safeguards intended to prevent and punish such abuse.

In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system. 

A warning: there's much revealed in this interview to make your blood boil. For example: the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcements actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained.

Flash forward to the 2008 credit crisis, in which just the related household sector losses alone were over 70x greater than those seen during the entire S&L debacle. So how many criminal referrals did the same agency, the Office of Threat Supervision, make?

Zero..."

at http://www.zerohedge.com/news/bill-black-our-system-so-flawed-fraud-mathematically-guaranteed

Roubini : GDP Growth in Q1 Disappointing

"Nouriel Roubini : " Q1 GDP growth disappointing &, after 2 quarters of outsized inventory increases, a Q2 payback may occur. Final demand still up a poor 1.6% " says Nouriel Roubini in a twitter message today " For how long can consumption grow much faster than income and households run down their savings as income growth in Q1 was very mediocre? " " For how long can consumption grow at a 2.9% rate when real disposable income is growing only 0.4%? Not long as you can't keep cutting savings" he added in another message."


at http://nourielroubini.blogspot.com/2012/04/roubini-gdp-growth-in-q1-disappointing.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NourielRoubiniBlog+%28Nouriel+Roubini+Blog%29

Eric Sprott - Global Shocks Coming, Investors Need to Prepare

"Today billionaire Eric Sprott told King World News that Europeans have now lost confidence in both the banking system and the sovereigns.  Sprott, who is Chairman of Sprott Asset Management, also warned the global economy is now rolling over and investors need to be prepared.  Here is what Sprott had to say about the situation:  “The Ponzi scheme in the financial world continues.  Month after month there is a new technique for trying to prevent the dominos from falling.  We see that people are doing the logical thing, they are taking money out of the banking system.”


at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/27_Eric_Sprott_-_Global_Shocks_Coming,_Investors_Need_to_Prepare.html

John Williams - The “Recovery” Faked By Phony Gov. Numbers

"John Williams, of Shadowstats, stated in his latest commentary, “The recovery is an illusion.”  There are two graphs in this piece from Williams, which show highly manipulated and phony government GDP reporting versus the inflation corrected real GDP.  The difference between the two graphs is a shocking revelation of government propaganda at its best.  Here is what Williams had to say:  “The illusion of an economic recovery continued with today’s (April 27th) headline report of 2.2% growth in first-quarter gross domestic product (GDP) ... Official reporting now shows that GDP activity has moved successively higher ... Yet, no other major economic series has confirmed that pattern.  If the GDP data were meaningful, that circumstance would be nearly impossible.”


at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/27_John_Williams_-_The_Recovery_Faked_By_Phony_Gov._Numbers.html

Gold Will Win Money War

"It was recently reported that countries like China and India are going to buy Iranian oil with gold.  Jim Sinclair of JSMineset.com said this week,“The implications of China paying for Iranian oil in gold is the most important event in the modern history of gold.”  He also said that gold could go to “$3,000 per ounce” as nations around the world revert back to gold as the only form of payment “free of liability.” (Click here to read Jim’s complete post.)  There is nothing short of an epic battle quietly going on between real money (gold) and paper money (the U.S. dollar).  In the end, the real thing will win out.  Today, Jim Willie of GoldenJackass.com explores the battle lines and explains the global money war.  Please enjoy.

———————————————————–

US Dollar VS Gold: Epic Money Battle

By: Jim Willie, Guest Writer for USAWatchdog.com

The so-called Global Financial Crisis is a term so widely used that it has earned its own acronym of GFC. When first seen, it seemed like girl friend club or some such, since many friends use GF loosely to refer to sweethearts. The GFC is falsely named, since it is more accurately described as a global monetary war with the USGovt vigorously defending its franchise in the USDollar for crude oil and trade settlement, and for bank reserves management. Take either away, and the other departs quickly, leaving the United States vulnerable to a quick ticket to the Third World marred by price inflation and supply shortage, even isolation in ring fences. On its own devices, the US is in as bad shape as the worst of the PIGS nations. The USGovt debt is above 100% of GDP finally. The annual deficit of $1.5 trillion could not be financed in normal methods. So the USFed is the adopted buyer of last resort, purchasing over 80% of new and recycled US debt issuance. The Interest Rate Swap tool acts like a hydraulic howitzer, in pushing down the long-term interest rates by creating false artificial demand. Without the IRSwap contract, a Morgan Stanley specialty, the US interest rates would be 6% to 7% just like Spain and Italy. The USTreasury Bond is not a safe haven, but rather a place where Weimar printing press operations persist, where decisions like SWIFT code rules are enforced like a illicit weapon, where billboards are painted to attract embattled investors of impaired toxic sovereign bonds from Southern Europe to retreat to the supposed safe haven of USTBonds..."

at http://usawatchdog.com/gold-will-win-money-war/

Roubini : The Eurozone is Double-Dipping

"Nouriel Roubini : "The Eurozone is obviously double-dipping and its recession is getting much worse; it is time for the ECB to act aggressively via formal QE." - in a twitter message"


at http://nourielroubini.blogspot.com/2012/04/roubini-eurozone-is-double-dipping.html

Greyerz - Bankrupt Nations Desperate to Save Financial System

"Today Egon von Greyerz told King World News that bankrupt nations are now printing money in a desperate effort to sustain the current global financial system.  Egon von Greyerz is founder and managing partner at Matterhorn Asset Management out of Switzerland.  Von Greyerz also reiterated that tens of trillions of dollars still need to be printed.  Here is what Greyerz had to say about the situation:  “There is so much happening in the world now.  We’ve had another package here, just under 400 billion euros (for the IMF).  This is an absolute drop in the ocean.  Spain needs many times that (amount).  I’ve talked about trillions and maybe even tens of trillions (that need to be printed going forward).”

Egon von Greyerz continues:  

“So they (the IMF) raised 400 billion from various nations, but where is the money coming from?  The majority is coming from Europe and the EU.  (They are) all bankrupt.  They have no funds.  They have to print money.  Japan, which has the biggest debt to GDP ratio of most industrialized nations, they are a major contributor of about 60 billion.  So it’s ridiculous.  Here is the bankrupt helping the bankrupt.

The massive problems that the world is experiencing started with the US subprime market collapsing.  That has not been resolved yet.  Nowhere have we seen a change in the direction of the US economy, which is down...."

athttp://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/26_Greyerz_-_Bankrupt_Nations_Desperate_to_Save_Financial_System.html

A Crisis in Full Flight

"For a while, it looked as if the European Central Bank’s €1 trillion credit program to pump liquidity into Europe’s banking system had calmed global financial markets. But now interest rates for Italian and Spanish government bonds are on the rise again, closing in on about 6%..."


at http://www.project-syndicate.org/commentary/a-crisis-in-full-flight

22 Red Flags That Indicate That Very Serious Doom Is Coming For Global Financial Markets

"The following are 22 red flags that indicate that very serious doom is coming for global financial markets....

#1 According to CNN, the level of selling by insiders at corporations listed on the S&P 500 is the highest that it has been in almost a decade.  Do those insiders know something that the rest of us do not?

#2 Home prices in the United States have fallen for six months in a row and are now down 35 percent from the peak of the housing market.  The last time that home prices in the U.S. were this low was back in 2002.

#3 It is now being projected that the Greek economy will shrink by another 5 percent this year.

#4 Despite wave after wave of austerity measures, Greece is still going to have a budget deficit equivalent to about 7 percent of GDP in 2012.

#5 Interest rates on Italian and Spanish sovereign debt are rapidly rising.  The following is from a recent RTE article...."

at http://theeconomiccollapseblog.com/archives/22-red-flags-that-indicate-that-very-serious-doom-is-coming-for-global-financial-markets

Latest Posts: I Am Not Alone! Here are Quotes From 17 Others on Coming Global Financial Collapse John Hathaway: Financial Repression to Continue Even Under the Most Optimistic Scenarios Save 1+ Hours! Read Campbell's Synopsis of, and Comments on, the IMF's 2012 World Economic Outlook Wednesday, April 25th, 2012 | Posted by Editor I Am Not Alone! Here are Quotes From 17 Others on Coming Global Financial Collapse

"Here is a list from Economic Collapse that shows how the stage is becoming crowded with others holding similar outlooks:

#1. Credit Suisse’s Fixed Income Research unit: “We seem to have entered the last days of the euro as we currently know it. That doesn’t make a break-up very likely, but it does mean some extraordinary things will almost certainly need to happen…to prevent the progressive closure of all the euro zone sovereign bond markets, potentially accompanied by escalating runs on even the strongest banks.”

#2. Willem Buiter, chief economist at Citigroup: “Time is running out fast. I think we have maybe a few months — it could be weeks, it could be days — before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it.”

#3. Jim Reid of Deutsche Bank: “If you don’t think Merkel’s tone will change then our investment advice is to dig a hole in the ground and hide.”

#4. David Rosenberg, a senior economist at Gluskin Sheff in Toronto: “Lenders are finding it difficult to finance their day-to-day operations with short-term funding. This is a lot like 2008 but with more twists.”

#5. Christian Stracke, the head of credit research for Pimco: “This is just a repeat of what we saw in 2008, when everyone wanted to see toxic assets off the banks’ balance sheets”

#6. Paul Krugman of the New York Times: “At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira. Next stop, France.”

#7. Paul Hickey of Bespoke Investment Group: “More and more, we are hearing anecdotal comments from individual and professionals that this is the most difficult environment they have ever experienced as the market is like a fish flopping around after being taken out of the water.”

at http://www.munknee.com/2012/04/i-am-not-alone-here-are-quotes-from-17-others-on-coming-global-financial-collapse/

Richard Russell - After the Calm Comes the Storm

"With continued volatility in global markets, the Godfather of newsletter writers, Richard Russell, had some very interesting charts and warnings in his latest commentaries.  Here is what Russell had to say:  “I show the VIX below, often referred to as ‘the fear index.’  The VIX tends to rise as investors' fears rise regarding coming events in the market.  Note the long decline of the VIX during 2010 as investors were increasingly complacent.  Then in March the VIX shot up as the stock market crumbled.  Again in July the VIX surged to over 47 as the market sank into a vicious bear market. ”


at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/4/25_Richard_Russell_-_After_the_Calm_Comes_the_Storm.html