Category Archives: banking

French Yellow Vest Protesters Urge Supporters To Spark Bank Run With Mass Withdrawals, by Tyler Durden

You won’t see much in the mainstream media about the Yellow Vests’ planned bank runs, but it may be the most important aspect of their protests. From Tyler Durden at zerohedge.com:

Activists from the Gilets Jaunes (Yellow Vest) movement have vandalized nearly 60% of France’s country-wide speed camera network, according to Interior Minister Christophe Castaner, who said that the wilful damage was a threat to road safety and endangered lives, according to the BBC.

The BBC’s Hugh Schofield, in Paris, said evidence of the vandalism is visible to anyone driving around France, with radar cameras covered in paint or black tape to stop them working. But the extent of the damage – now believed to affect more than half of all 3,200 speed cameras in the country’s network – was unknown until Mr. Castaner’statement on Thursday.
He said the devices had been “neutralised, attacked, or destroyed” by members of the protest movement. –BBC

Speed limits in France have become a hot-button topic, after the Macron government lowered the limit on many roads from 90 km/h (55 mph) to 80 km/h (50 mph) early last year.

Yellow Vest protesters upset over an increase in fuel taxes have also complained about the rising costs of commuting for those who can’t afford to live near urban centers where they work – citing speed cameras and toll roads in their complaints.

Bank run?

While the Yellow Vest movement has been taking to the streets for violent clashes with French police, activists from the movement are now recommending that French protesters empty their bank accounts to spark a bank run – in a move which one protester, Maxime Nicolle, called a “tax collector’s referendum.”

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The Eurozone Is in a Danger Zone, by Alasdair Macleod

ECB liquidity has kept the European economy and European government bond markets afloat. What happens when the ECB tightens the spigot? From Alasdair Macleod at mises.org:

It is easy to conclude the EU, and the Eurozone in particular, is a financial and systemic time-bomb waiting to happen. Most commentary has focused on problems that are routinely patched over, such as Greece, Italy, or the impending rescue of Deutsche Bank. This is a mistake. The European Central Bank and the EU machine are adept in dealing with issues of this sort, mostly by brazening them out, while buying everything off. As Mario Draghi famously said, “whatever it takes.”

There is a precondition for this legerdemain to work. Money must continue to flow into the financial system faster than the demand for it expands, because the maintenance of asset values is the key. And the ECB has done just that, with negative deposit rates and its €2.5 trillion asset purchase program. But that program ends this month, making it the likely turning point, whereby it all starts to go wrong.

Most of the ECB’s money has been spent on government bonds for a secondary reason, and that is to ensure Eurozone governments remain in the euro system. Profligate politicians in the Mediterranean nations are soon disabused of their desires to return to their old currencies. Just imagine the interest rates the Italians would have to pay in lira on their €2.85 trillion of government debt, given a private sector GDP tax base of only €840 billion, just one third of that government debt.

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The Fed IS the Ugly Truth, by Raúl Ilargi Meijer

The back and forth and massive publicity given to what the Federal Reserve obscures a central question: should the Fed even exist? From Raúl Ilargi Meijer at theautomaticearth.com:

This Fed thing just keeps going on, and it needs to stop. There is nothing in the discussion about the Federal Reserve these days that has any value other than it provides even more proof that the Fed has killed off the most essential elements of what once made the US economy function. All markets, stocks, bonds, housing markets, all price discovery, all murdered. No heartbeat. Pining for the fjords.

And instead of addressing that, and I’m not even talking about addressing fixing what is wrong, all I see is neverending stuff about Jay Powell using, or not using, terms such as “patient” or “accommodative”. Like any of it means anything coming from him and his ilk. Other than for making ‘investors’ a quick buck. Like a quick buck could ever trump the survival of entire market systems.

People discussing whether Jay Powell is doing a good job all miss the point. Because Powell should not be doing that job in the first place. The Fed should not have the power to manipulate the US economy anywhere near as much as it does. Because that power is perverting America like nothing else, and the US economy will never recover as long as the Fed holds that power. Is that clear enough? Do we understand that at least?

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The Federal Reserve Is A Suicide Bomber With A Deeper Agenda, by Brandon Smith

How can the Federal Reserve “save” the economy if it’s hell-bent on destroying the economy? From Brandon Smith at alt-market.com:

Central bankers are sociopathic in nature and sociopathic people tend to behave like robots. When one understands the motivations of central bankers, or at the very least what their goals are, their actions become rather predictable. The question is, what truly motivates these people?

I believe according to the evidence that the central banks are motivated by ideological zealotry with the core purpose of total global centralization of economic and political power into the hands of a select group of elitists. This agenda is really just a modern “reboot” of feudalism or totalitarianism. They sometimes refer to the plan in public as the “new world order,” or the “global economic reset.” I often refer to the encompassing ideology as “globalism” for the sake of expediency.

To attain this goal, central bankers must influence mass psychology using traumatic events. Fear opens doors to centralization of power. This is simply a fact of social behavior and history. The more afraid a population is, the more willing they will be to give up freedoms in exchange for safety and security. Therefore, the most effective weapon at the disposal of the globalists and their central banking counterparts is engineered economic crisis — a weapon that can, if allowed, destroy entire civilizations almost as fast as a nuclear war, while still keeping most of the expensive infrastructure intact.

Beyond that, economic crisis is also a weapon that can influence a population to embrace even greater enslavement while viewing their slave masters as saviors rather than villains.

Despite what many people assume, central bankers are not driven by a desire for profit. They print their own capital, they hardly need to make a profit. Central bankers are also not driven by a desire to keep the current system afloat. They have demonstrated time and time again their habit of deliberately sabotaging the system through the use of inflationary bubbles followed by fiscal tightening into weak economic conditions. The U.S. economy today is just as expendable as any other economy the banks have destroyed in the past. It is not special.

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Reasons for 2019 Optimism, by Karen Kwiatkowski

People are finally figuring out what governments are all about, and that’s cause for optimism. From Karen Kwiatkowski at lewrockwell.com:

Not to state the obvious, but some really wonderful things are happening.  Of course, they always are, but I’m referring to the specific category of state decline and the rise of real liberty. Although an arguably perverse practice, to truly understand the state, we should analyze and assess the varied excreta produced by the state’s parasympathetic nervous system.

Of all the ways of understanding the “deep state,” this system, responsible for the tears, sweat, noctural emissions and diarrhea of the complex network comprising the state organism, is one of the best and most revealing.

The modern American is no longer shocked at national discussions and routine public examinations of bum wiping, sexual activities of all types, and the odiferous human body and what to do about it.  Boobus Americanus is downright fascinated by the subject and seeks ever more detail.  This fact alone bodes well for the ongoing examination of the very demented US body politic and is Reason Number 1 for optimism going into 2019.

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$1.3 Trillion “Leveraged Loan” Boom Comes Unglued, by Wolf Richter

Leveraged loans are closely related to junk bonds, and its not a good sign when either market is coming “unglued.” From Wolf Richter at wolfstreet.com:

The Fed has warned about them, and investors fear a run-on-the-fund. 

The $1.3 trillion “leveraged loan” boom is coming unglued: Not because the junk-rated, highly leveraged, cash-flow-negative companies that issued these loans are massively defaulting – they’re not yet – but because investors are fleeing these instruments that had been super-hot for years, until October. They’re fleeing from loan mutual funds that hold these loans because they want to grab the “first-mover advantage” in an illiquid market; they want to be the first out the door before they get caught in a run-on-the-fund – with potentially catastrophic consequences for their cherished money.

These investors yanked a net of $3 billion out of US loan mutual funds and $300 million out of exchange-traded loan funds during the week ended December 19, in total $3.3 billion, the biggest outflow on record, according to Lipper. In the prior week, investors had yanked out $2.5 billion, which at the time had also been a record. It was the fifth week in a row of net outflows exceeding $1 billion, also a record.

Since the week ended October 31, the week all this started, the net outflow has reached $11.3 billion.

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Deutsche Bank Death Spiral Hits Historic Low. European Banks Follow, by Wolf Richter

The unremitting downtrend in European bank stocks is not a good sign for the global economy or financial markets. From Wolf Richter at wolfstreet.com:

Bottom fishers were taken out the back and shot.

It just doesn’t let up with Deutsche Bank — or with European banks in general. A new day, a new scandal, a new historic low in the share price that has been in a death-spiral for over 10 years. Deutsche Bank shares plunged 7% today in Frankfurt, to a new historic low of €7.00, after briefly threatening to close at an ignominious €6.99. Its market cap is now down to just €14 billion. The stock has plunged 56% so far this year:

The European Commission — the executive branch of the EU — after nearly three years of investigating this, announced today that is suspects four unnamed banks of colluding to manipulate the vast market for US-dollar-denominated government-backed bonds between 2009 and 2015.

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