Buried in the Bank of Japan’s Financial System Report is a gorgeous whitewash doozie: if interest rates rise by 1 percentage point, it would cause ¥8 trillion ($82 billion) in losses across the banking system. Banks would be able to digest it. The system is safe. But then the report tallied up the losses of a 3 percentage point rise.
France Clamors for Currency War, Bundesbank Warns Of Housing Bubble
by Wolf Richter • • Comments Off on France Clamors for Currency War, Bundesbank Warns Of Housing Bubble
The euro, its dexterous management, the “whatever-it-takes” guarantees by ECB President Draghi, the trillions being shifted around to prop up banks and governments – all these efforts to keep the Eurozone duct-taped together have hit countries differently. Including France and Germany. They’re shooting at each other now, and hitting the ECB.
Texas Instruments CFO Admits: Stock Market Is Overpriced
by Wolf Richter • • Comments Off on Texas Instruments CFO Admits: Stock Market Is Overpriced
Stocks balloon, we’re incessantly told, because revenues are rising due to great products, ingenious strategies, or brilliant marketing; and because earnings are rising due to, well, if not rising revenues, then cost cutting, moving production overseas, squeezing suppliers…. But what if revenues sag and earnings plunge, not for a bad-hair quarter, but for years, and the stock still balloons?
Exponential Increase of US Gross National Debt 1972-2013 (Chart)
by Wolf Richter • • Comments Off on Exponential Increase of US Gross National Debt 1972-2013 (Chart)
Why I’m So Worried About Japan’s Ballooning Trade Deficit
by Wolf Richter • • Comments Off on Why I’m So Worried About Japan’s Ballooning Trade Deficit
Trade is one of the critical elements in Abenomics. Devaluing the yen would boost exports and cut imports. The resulting trade surplus would goose the economy. But the opposite is happening. And it isn’t happening in small increments, with ups and downs, but rapidly and relentlessly. It’s not energy imports. They actually dropped! It’s a fundamental shift.
Another Heap Of Wall-Street Hype and BS
by Wolf Richter • • Comments Off on Another Heap Of Wall-Street Hype and BS
Earnings estimates for Q3 have been crashing for a year. On October 1, 2012, our brilliant Wall Street analysts estimated that they’d leap 15.9%. As of Friday, these brilliant analysts have chopped their forecasts for the same brilliant quarter down to a measly growth of 2.1%. Stagnation! Now they’re hyping how companies are beating these crummy forecasts!
David Stockman: Blackstone Double Dip
by Wolf Richter • • Comments Off on David Stockman: Blackstone Double Dip
The Wall Street machinery was back in business thanks to the Fed’s policies, David Stockman writes. When Extended Stay America exited bankruptcy, its new owner was, well, Blackstone – which had done the LBO. To underscore that speculators had returned to the scene of the strangulation, as it were, its partner in the deal was John Paulson’s hedge fund.
Delirious Construction And Property Bubbles Prop Up China GDP (And Buy Social Stability For Now)
by Wolf Richter • • Comments Off on Delirious Construction And Property Bubbles Prop Up China GDP (And Buy Social Stability For Now)
China’s economy grew barely above the government-decreed minimum of 7.5%. Deep frustrations simmer beneath the surface and can explode at any time. To maintain social stability, the government douses the land with money. Growth at any cost. But the results are majestic property and construction bubbles – and they can’t be inflated forever.
Stockholders Got Plundered In IBM’s Hocus-Pocus Machine
by Wolf Richter • • Comments Off on Stockholders Got Plundered In IBM’s Hocus-Pocus Machine
I’m not picking on IBM. I’m almost sure they have some decent products. So they had a crummy quarter – the sixth quarter in a row of sales declines. And their hardware sales in China have collapsed since Snowden’s revelations about the NSA and its collaboration with American tech companies. But in one area, IBM excels: its hocus-pocus machine.
NSA Revelations Kill IBM Hardware Sales in China
by Wolf Richter • • Comments Off on NSA Revelations Kill IBM Hardware Sales in China
The first shot was fired on Monday. Teradata, which sells analytics tools for Big Data, warned that revenues plunged 21% in Asia. Wednesday, it was IBM’s turn to confess: hardware sales in China had collapsed. Every word was colored by Snowden’s revelations about NSA’s collaboration with American tech companies, from startups to mastodons like IBM.