They only bubble up rarely, these scandals at the Federal Reserve System, but when they do, they’re doozies, involving huge amounts of money, massive conflicts of interest, all-out manipulation, collusion, favoritism, dizzying cronyism…. Over the 100 years the Fed has existed, it has done an excellent job in one of its other functions, maintaining the dollar, which has lost only 96% of its value—instead of 100%. Yet, it just doesn’t want to be audited.
Greece Prints Euros To Stay Afloat, The ECB Approves, The Bundesbank Nods, No One Wants To Get Blamed For Kicking Greece Out
by Wolf Richter • • 7 Comments
A lot of politicians in Germany and elsewhere issue zingers about a Greek exit from the Eurozone. Yet those with decision-making power play for time. They want someone else to do the job. Suddenly Greece is out of money again. Default date: August 20. A €3.2 billion bond matures. Europe is on vacation. It will be mayhem. And somebody will get blamed. But there’s one solution….
Top Euro Honcho Juncker: “Europeans are dwarfs”
by Wolf Richter • • 5 Comments
At first, Jean-Claude Juncker was just jabbering about Greece. No, he couldn’t categorically exclude its exit from the Eurozone, but it wouldn’t happen “before the end of autumn.” These words might have thrown the markets into vertigo-inducing tailspins a year ago. But now, the President of the Eurogroup wasn’t ruffling any feathers; and markets went up. That’s how far the debt crisis has advanced. But suddenly the dark floodgates opened, and deep pessimism flooded the airwaves.
The German Economy Caves, And Eurozone Bailouts Take On New Dimensions
by Wolf Richter • • 1 Comment
Last year, German exports rode to a new record, jobs were being created in massive numbers, real wages rose, housing and real estate boomed, the federal budget was nearly balanced, and consumers felt good and spent money. There were moments in 2012 that made people dream of a repeat performance—despite the havoc that the Eurozone debt crisis has been wreaking. But now, the German export machinery is shifting down with an ear-piercing screech.
Escalation of the Extortion Racket: Now It’s ‘The Dissolution Of Europe’ Not Just the Eurozone
by Wolf Richter • • Comments Off on Escalation of the Extortion Racket: Now It’s ‘The Dissolution Of Europe’ Not Just the Eurozone
It has been an onslaught. Eurozone heads of state, top politicians, unelected kingpins, and bureaucratic honchos threatened everyone in sight with the demise of the euro, or promised to do “everything” or “whatever it takes” to save it even if it violated treaties or the foundation of democracy. In between the lines, the mammoth costs of continuing the bailouts or of breaking everything up oozed to the surface. But it got even worse.
The Con Game Of Writing Up Assets: It’s Not Just The “London Whale”
by Wolf Richter • • 3 Comments
Normally we see the gory details only after a firm collapses, like Enron or Lehman, when vultures tear open its guts to fight over shriveled assets that had appeared fat and healthy on paper, and some of them had been written up repeatedly to create—which our accounting system encourages us to do—paper income. Other outfits get bailed out. JPMorgan among them. Yet, they still hollow out their balance sheets. And JPMorgan’s soon-to-be $7 billion trading loss shows how.
Is The Inexplicable American Consumer Rebelling?
by Wolf Richter • • Comments Off on Is The Inexplicable American Consumer Rebelling?
The strongest and toughest creatures out there that no one has been able to subdue yet, the inexplicable American consumers, are digging in their heels though the entire power structure has been pushing them relentlessly to buy more and more with money they don’t have, and borrow against future income they might never make, just so that GDP can edge up for another desperate quarter. But it’s been tough.
No Functional Miracle Weapons To Fight The Debt Crisis
by Wolf Richter • • 2 Comments
It must be infuriating for Mario Draghi, the hapless President of the European Central Bank, to see how masterfully the Fed and the Bank of Japan control their respective credit markets, how they manipulate them for the benefit of the banks, and how they’re allowing their governments to fund huge deficits at near zero cost. Draghi just doesn’t seem to be able to wrap his arms around it.
Is Germany Preparing for a Spanish Default?
by Wolf Richter • • 10 Comments
Hope persists that Germany would not only bail out Spain and the rest of the Eurozone but would also tolerate the Fed-ization of the European Central Bank. Even Treasury Secretary Tim Geithner was hounding German Finance Minister Wolfgang Schäuble, who was on vacation. Yet, Deutsche Bank, Germany’s de-facto vice-ministry of finance whose CEO serves as éminence grise behind elected officials, well, that venerable institution at the core of Germany Inc. appears to be closing the book on Spain.
The Coming Unholy Alliance in Natural Gas
by Wolf Richter • • Comments Off on The Coming Unholy Alliance in Natural Gas
Natural gas traded at $3.22 per million Btu at the Henry Hub on Monday, a seven-month high, and a jump of 69% from its April low. Breathtaking when you think that a few months ago, the doom-and-gloomers, who’d been right for a very long time, were predicting chillingly that the price would hit zero by the fall, when storage would be full and excess production would have to be flared. But the pains for the industry are far from over.