Hollow Banks, Deadbeat Debtors, and the Chinese Burn


February 05, 2016

Did This Just Trigger the Beginning of Another Depression?

… In place of our regular daily market commentary, we’re sharing an interview with longtime friend and master income investor Tom Dyson. …

editor of The Palm Beach Letter, one of the world’s most respected investment advisories. …

Casey Research: Okay, so Creditanstalt triggered the Great Depression. Could a similar “chain reaction” of this sort happen today? If so, what might that look like? Walk through a few scenarios…

Tom: Yes, absolutely. We saw that chain reaction again in 2008. First, New Century Financial went bankrupt. Then, some other mortgage bond funds went down. Then, Bear Stearns went. Then, Lehman. Then, AIG. And then, the entire system… until the Fed saved it. …

Now, China’s markets are crashing. …

Read More

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Is It Time To Panic About Deutsche Bank?

Back in April 2013, we showed for the first time something few were aware of, namely that “At $72.8 Trillion, The Bank With The Biggest Derivative Exposure In The World” was not JPMorgan as some had expected, but Germany’s banking behemoth, Deutsche bank. … culminating ten days ago with the bank’s “titanic”, and record, €7 billion loss, surpassing the bank’s troubles even during the depths of the Global Financial Crisis. …

And then there is the huge black hole that is China … “Major European banks… are significantly exposed to China and if there is significant deleveraging the impact will no doubt be global.”

Banks such as HSBC, such as Deutsche Bank. …

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Glencore credit rating downgraded by S&P on an up day for miners

by James Chessell
Feb 5 2016

… S&P announced on Thursday that Glencore credit rating had been cut to the lowest investment grade. Glencore shares were not unduly affected because the move follows a similar decision by Moody’s in December to downgrade its Glencore rating to brink of junk. …

Read more: http://www.afr.com/markets/glencore-credit-rating-downgraded-by-sp-on-an-up-day-for-miners-20160204-gmm6r6#ixzz3zICBLdXl

Follow us: @FinancialReview on Twitter | financialreview on Facebook

(Here is why the Glencore downgrade is important: Planning for Glencore Toast)

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The Number Everyone’s Been Waiting For: Chinese Reserves Plunge By $100BN – What Does It Mean For Markets?

As we previewed on Thursday, the biggest event of the week (was) the January update of China’s FX reserves, which the PBOC released last night. The number came out at $3.2309 trillion, down $99.5 billion from the prior month, and $8 billion less than the December outflow of $107.6 billion. …

Recently, an important question that has emerged is for how much longer can China sustain its FX intervention before tapping out and letting the hedge funds win with their short Yuan bets once total reserves drop below the critical redline of approximately $2.7 trillion as calculated by the IMF – the answer is between 5 months and 10 months assuming monthly reserve burn rates of $130BN to $60BN … a bridge we will cross some time in the summer of 2016. …

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About icliks

Biding my time in central ms ... yours too, if ur reading this.
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