The asset bubbles the Fed’s money-printing and bond-buying binge has created are spectacular, the risk-taking on Wall Street with other people’s money a sight to behold. Big winners were mortgage Real Estate Investment Trusts – and those who got fat on extracting fees. But now the pendulum is swinging back, and the bloodletting has started.
All
Austrian Steelmaker Offshores Production To … Texas
by Wolf Richter • • Comments Off on Austrian Steelmaker Offshores Production To … Texas
Voestalpine, an Austrian steelmaker with 46,000 employees, saw its revenues decline by 4% last year. It blamed the “cooling down of the global economy,” and “dwindling momentum in Asia (especially China).” Now it’s under pressure to cut costs. Hence offshoring to cheap countries! China or Indonesia? Nope.
Blinded By Optimism, German Economy Now Below Stall Speed
by Wolf Richter • • Comments Off on Blinded By Optimism, German Economy Now Below Stall Speed
The financial crisis was brutal for Germany, but the recovery steep, and in 2011, the gloating started. They called it the German “success recipe,” a superior system that would keep the economy growing even amidst Eurozone debt-crisis mayhem. That optimism has endured, and stocks have hit new highs, but the economy has diverged sharply.
David Stockman: Bubble Finance Personified
by David Stockman • • Comments Off on David Stockman: Bubble Finance Personified
“The Fed should have been embarrassed by the M&A frenzy,” writes David Stockman. Tyco CEO Dennis Kozlowski, Wall Street’s favorite deal maker, put “the rest of the corporate deal junkies to shame.” But “the poster boy for Greenspan’s first stock market bubble and its sudden, violent demise was a wake-up call that was wholly ignored.”
(Broke) Italy “Would Love To” But Can’t Pay Its Bills This Year
by Wolf Richter • • Comments Off on (Broke) Italy “Would Love To” But Can’t Pay Its Bills This Year
In most countries, it would be an act of mind-bending chutzpah, or perhaps a display of political insanity, but in Italy it barely made ripples: for a government official, a minister no less, to declare that the country cannot pay its long overdue bills, and not for a month or two, but for the rest of this year! Due to “technical” problems.
Market Celebrates Egypt’s Coup, But It’s Not Over Yet
by Contributor • • Comments Off on Market Celebrates Egypt’s Coup, But It’s Not Over Yet
Contributed by Jen Alic of Oilprice.com: The situation in Egypt has not been tenable since the Muslim Brotherhood and President Morsi took over, post-revolution, but now that the military has stepped in, ousted Morsi, and placed him in detention, foreign investors are celebrating – on the logic that things couldn’t get any worse, only better.
David Stockman: The Greenspan Put And The Deformation Of M&A
by David Stockman • • Comments Off on David Stockman: The Greenspan Put And The Deformation Of M&A
“The Wall Street coddling monetary régime” that Greenspan institutionalized “deeply transformed M&A,” writes David Stockman. It turned a corporate business strategy into “an all-encompassing mechanism for speculative finance” that executives used to build “empires with apparent, if unsustainable, earnings growth” that ended in “spectacular crash landings.”
Beware, the Borderless Tax Man Cometh
by Don Quijones • • Comments Off on Beware, the Borderless Tax Man Cometh
Contributed by Don Quijones: The first four items the G-8 dealt with was the need for governments to share information to “fight the scourge of tax evasion.” If only their primary targets were multinationals, banks, and hedge funds that pay a pitiful fraction of the taxes they owe in the countries they operate. But they’re going after the little guy.
Goldman Sachs To The Fed: Taper But Don’t Tighten
by Wolf Richter • • Comments Off on Goldman Sachs To The Fed: Taper But Don’t Tighten
Tapering bond purchases gets real. New York Fed President William Dudley has spoken. He represents Goldman, where he was a managing director. Goldman owns part of the NY Fed and is one of its 21 “primary dealers.” But it doesn’t want the financial system to blow up. On the theory that you can milk a cow many times, but you can bleed it only once.
‘Total Surveillance’ Officially Brushed Off In Germany
by Wolf Richter • • Comments Off on ‘Total Surveillance’ Officially Brushed Off In Germany
Chancellor Merkel’s coalition is likely to emerge victoriously from the elections in September, unless a major debacle blows up. So no debacle is allowed to occur until after the election. But just then, new revelations about NSA spying blew up: turns out, all citizens anywhere can be under surveillance by any government, including their own, beyond control and oversight.