The Brexit Mess

The sky isn't falling, of course, nor do I think it will but with the UK having their rather significant vote a few days ago, it seems a good deal came out of it, both nationally, for them, as well as for the world. Herewith are a few headlines of examples from the weekend so far.

Britain Rattles Postwar Order and Its Place as Pillar of Stability

Pound takes a beating, markets in tailspin 

after British vote to exit E.U.

After 'Brexit,' 3 Centuries of Unity in Britain 

Are in Danger

Moody's cut UK's credit outlook to 'negative'

It would be bad enough if it only hurt the UK but then there are the damages it did on this side of the pond, of course.

Dow closes down 600 after Brexit surprise; financials post worst day since 2011

And then there are the world markets it hit:

Brexit panic wipes $2 trillion off world markets - 
as it happened

World stocks tumble as Britain votes 

for EU exit

World Markets Roiled by Brexit as Stocks, 

Pound Drop; Gold Soars

And not bad enough it hurt the UK--and its allies--quickly, it also gave its enemies cause for celebration:

Despite Russia's Somber Facade, Glimpses of Joy Over EU Referendum

There were some glimmers of hope, fortunately. On this first one, it seems millions of Brits want a "second shot", a second vote on this whole Brexit idea. They have misgivings about the turnout.

UK voters, 3 million of them, want another bite at the Brexit apple

On this one, lots of UK business leaders and investors think the populace will dismiss the idea outright:

Corporates and investors think voters will shun Brexit despite recent polls

So at this point, I and a lot of us are just hoping some good, somehow, comes of this vote they had. We shall see. It would be nice if they rethought it, had yet another election, and voted it down.

Hey, I can dream, can't I?

There is an old insult people used to throw around. It went like this--if you didn't like someone, for whatever reason, they would tell them "May you live in interesting times."

Between Donald Trump running for the Presidency and this Brexit vote, someone must have had it in for humanity about now.

The State of the Nation and World

Kim Jong Un and North Korea are threatening South Korea with attack.

China's economy is in freefall.

The Dow dropped nearly 1000 points the last 2 days.

The Mexican peso--in next door Mexico, of course--just hit a record low against the US dollar.

Wealth inequality in America is getting worse by the year with the already-wealthy getting richer and the middle and lower classes getting poorer.

Greece just nearly avoided a total bankruptcy of the nation.

Our infrastructure is falling apart.

Our Highway Fund needs funding from Congress.

All this and a lot more but Donald Trump and his disconnected, childish, really, musings on America and the world put him, somehow, somehow, "most popular" right now, number one in the polls of Republican candidates for president in next year's election.

This is no way to run a country.

Most Americans have no clue this weekend figures big in their lives

I imagine if most Americans--coast to coast--were interviewed this weekend, they would have no idea an election is going on in Greece this weekend.

Asked, too, if they thought it could or would have much impact on them or their lives in any way, I'd think most would give a resounding "no."

Quite the opposite is true.

Greece is voting Sunday (imagine that--voting on a weekend) on their leaders. The outcome will likely be huge for Greece, of course, but for all of Europe and European Union... and even for the US.

One government would have them stick with austerity so they can get the money they need from Germany, Angela Merkel and the rest of the EU.

The other would have them do away with what they see as the crushing austerity, walk away from the money and likely walk away from the EU itself.

Let there be no mistake, this weekend is huge for what takes place internationally for the next several months, if not years.

The thing is, though, too, no one can really predict the outcome of the vote, for sure, but of whatever happens, either. No one can really say, with any real authority, what "best path" there is for Greece, let alone the EU and the world.

It's been said--by more than once source, too--that if this doesn't go well, it will make the 2008 financial collapse pale by comparison.

Once again, Margo Channing's quote from "All About Eve" becomes all too relevant:

"Fasten your seatbelts, it's going to be a bumpy night!

Link: http://finance.yahoo.com/blogs/daniel-gross/sunday-greece-elections-prove-lehman-brothers-moment-maybe-172918499.html

The situation in the EU

I came across what I thought is a very good, if simple, description of the European financial system and its problems right now: "Underfunded banks buys underfunded government bonds and underfunded governments guarantees underfunded banks.? It's one of those things that, again, is simple and that seems true but you certainly hope is not. Links: http://globaleconomicanalysis.blogspot.com/2012/02/capital-flight-from-italy-greece.html; http://www.marketwatch.com/story/10-myths-about-the-european-quagmire-2012-02-27?link=MW_story_popular; http://www.nytimes.com/2012/02/27/opinion/krugman-what-ails-europe.html?_r=1&partner=rssnyt&emc=rss

On the new year

From an article in the UK's Daily Mail: "Our world is poised on the edge of perhaps the most important 12 months for more than half a century. If our leaders provide the right leadership, then we may, perhaps, muddle through towards slow growth and gradual recovery. But if the European elite continue to inflict needless hardship on their people; if the markets continue to erode faith in the euro; and if Western politicians waste their time in petty bickering, then we could easily slip further towards discontent and disaster. The experience of 1932 provides a desperately valuable lesson. As a result of the decisions taken in those 12 short months, millions of people later lost their lives. Today, on the brink of a new year that could well prove the most frightening in living memory, we can only pray that our history takes a very different path." Here's hoping for the best in the new year. Link: http://www.dailymail.co.uk/news/article-2080534/Loss-faith-democracy-make-2012-frightening-year-ever.html#ixzz1iMBUAHHz

Quote of the day

“Europe has never been at greater risk of explosion than today.” --French President Nikolas Sarkozy, quoted this week in Brussels at the European Conference to save the Euro and so, by extension, the European economies and possibly, Europe and the international economy. Link: http://www.newyorker.com/online/blogs/newsdesk/2011/12/is-europe-exploding.html#ixzz1g4om2inj

If the Euro and Eurozone fail...

This out today in the news: US bank warns of eurozone breakup 'pandemonium' Citigroup economist and former central banker Willem Buiter warned Thursday that a fully blown breakup of the eurozone could spell a global depression with unemployment of 20 percent and economic pandemonium. Sketching a stark picture of the stakes facing European leaders as they gather in Brussels to discuss how to save the single currency, Buiter said a breakup would unlikely be planned, orderly or gradual. Buiter, a former Bank of England policy maker, predicted in a research note that a breakup would be "disruptive, destructive and without any winners." Basically, I think this is what he has in mind: Wish us all luck, ladies and gentlemen.

George Soros says what we all fear most

For anyone and everyone remotely following the EU, their debt and the Euro countries, with their financial messes, this George Soros quote sums it up for us, likely: "Global Financial System In 'Self-Reinforcing Process Of Disintegration.'" He says "Developed countries are falling into a 'deflationary debt trap,' in which consumer spending falls, products become more expensive, tax revenues drop, and sovereign debt grows..." and we fear he's right but hope--against hope?--he's wrong. Link: http://www.huffingtonpost.com/2011/12/05/george-soros-global-financial-system_n_1129210.html

Okay, now that Thanksgiving's over...

The markets today, Friday, even with their shortened trading day, because of Thanksgiving, are all--and I mean all--going to go very far South tomorrow and for two reasons. First, there's this: Fitch Downgrades Portugal to Junk Status LONDON — Fitch Ratings Thursday dropped its credit rating on Portugal into junk territory and warned further downgrades were possible, as a recession in the country is increasing challenges for the government to comply with its austerity plans. Second, there's this: German Bond Windfall May Be Ending With Euro Crisis BRUSSELS — Someone, somewhere, usually makes money from bad news. With Europe’s debt crisis, that — at least until this week — was Germany. A failed German bond auction Wednesday may have brought to an end one turbulent chapter in the history of the Continent’s debt crisis, during which Berlin remained insulated from much of the fallout. But since 2009, Germany and a handful of other countries, like the Netherlands, have benefited significantly from cheaper borrowing as investors diverted cash from riskier assets and the bonds of southern European countries to debt issued by the Continent’s fiscal hawks. So that money-making party is over, in Germany. That's certainly bad for them but it's bad for all of Europe, too, since it's Germany whose been depended on to "save" the EU and the Euro. It's rough over there and getting rougher yet. Oh, well, all we can do right now is to think happy thoughts, regardless and enjoy your long, relaxing weekend. Link: http://online.wsj.com/article/SB10001424052970204630904577057743033166600.html; http://www.nytimes.com/2011/11/25/business/global/german-bond-windfall-may-be-ending-with-euro-crisis.html?_r=1&pagewanted=print; http://www.pbs.org/newshour/businessdesk/2011/11/european-bond-scare-germany-ed.html

Gasoline jumps 10 to 12 cents per gallon today

The European Union declared they're going to strongly support the banks and financial system over there so the Dow and markets zoom up by nearly 300 points. Following that, oil per barrel zooms up in price, due to speculators. The result? You and I pay 10 to 12 more cents per gallon today at the pump. Ah, progress. We need to stop oil speculation, folks. It's not good for the country, let alone the world. It used to be illegal. It needs to be again. Links: http://news.yahoo.com/stocks-jump-european-pledge-help-banks-134246596.html; http://finance.yahoo.com/news/Oil-prices-above-85-for-first-apf-972074541.html?x=0&sec=topStories&pos=4&asset=&ccode=

Quote of the day

"Italy's government debt is five times the size of Greece's and concerns about Italy's ability to meet its obligations could grow if Greece defaults." --Landon Thomas, Jr., The New York Times. Link to original story: http://www.nytimes.com/2011/09/20/business/global/as-greece-struggles-the-world-imagines-a-default.html.

Something to keep in mind as the economy seems to get worse

Riots in Greece and across Europe. Can it happen here? Food for thought: "If inequality continues to increase relentlessly, it seems likely that major social disruptions are inevitable. What people should keep in mind is that the U.S. has the weakest social safety net of any advanced country." --"Martin Ford, Founder, Silicon Valley-based software development firm. Links: http://www.huffingtonpost.com/martin-ford/could-we-have-civil-unres_b_906478.html; http://www.ritholtz.com/blog/2011/07/raging-inequality-may-cause-unrest-and-violence/

"Great Depression" just around the corner? (updated at bottom)

If this guy's data and assumptions are correct, it looks really bad for Europe's economy, at minimum, but I fear and expect for the US and the world:

May 23 2011: Right. Italy. Serious.

If you don't have the patience for all of it, go down to what a Greek default would spell for them and Europe.

What happens when Greece defaults

He's not saying "if Greece defaults", but "when..."

Yikes.

Scary and getting scarier.

The sky might well be falling.

Chinese Rating Agency Downgrades UK Sovereign Debt

Roller coaster ride ahead?

If this guy knows what he's talking about, we could be in for one wild, financial roller coaster ride:

May 23 2011: Right. Italy. Serious.

Guest post: "You can't handle the truth!"

America:  The Grim Truth

Americans, I have some bad news for you:
You have the worst quality of life in the developed world - by a wide margin.
If you had any idea of how people really lived in Western Europe, Australia, New Zealand, Canada and many parts of Asia, you'd be rioting in the streets calling for a better life. In fact, the average Australian or Singaporean taxi driver has a much better standard of living than the typical American white-collar worker.
I know this because I am an American, and I escaped from the prison you call home.
I have lived all around the world, in wealthy countries and poor ones, and there is only one country I would never consider living in again: The United States of America. The mere thought of it fills me with dread.
Consider this: you are the only people in the developed world without a single-payer health system. Everyone in Western Europe, Japan, Canada, Australia, Singapore and New Zealand has a single-payer system. If they get sick, they can devote all their energies to getting well. If you get sick, you have to battle two things at once: your illness and the fear of financial ruin. Millions of Americans go bankrupt every year due to medical bills, and tens of thousands die each year because they have no insurance or insufficient insurance. And don't believe for a second that rot about America having the world's best medical care or the shortest waiting lists: I've been to hospitals in Australia, New Zealand, Europe, Singapore, and Thailand, and every one was better than the "good" hospital I used to go to back home. The waits were shorter, the facilities more comfortable, and the doctors just as good.
This is ironic, because you need a good health system more than anyone else in the world. Why? Because your lifestyle is almost designed to make you sick.
Let's start with your diet: Much of the beef you eat has been exposed to fecal matter in processing. Your chicken is contaminated with salmonella. Your stock animals and poultry are pumped full of growth hormones and antibiotics. In most other countries, the government would act to protect consumers from this sort of thing; in the United States, the government is bought off by industry to prevent any effective regulations or inspections. In a few years, the majority of all the produce for sale in the United States will be from genetically modified crops, thanks to the cozy relationship between Monsanto Corporation and the United States government. Worse still, due to the vast quantities of high-fructose corn syrup Americans consume, fully one-third of children born in the United States today will be diagnosed with Type 2 diabetes at some point in their lives.
Of course, it's not just the food that's killing you, it's the drugs. If you show any sign of life when you're young, they'll put you on Ritalin. Then, when you get old enough to take a good look around, you'll get depressed, so they'll give you Prozac. If you're a man, this will render you chemically impotent, so you'll need Viagra to get it up. Meanwhile, your steady diet of trans-fat-laden food is guaranteed to give you high cholesterol, so you'll get a prescription for Lipitor. Finally, at the end of the day, you'll lay awake at night worrying about losing your health plan, so you'll need Lunesta to go to sleep.
With a diet guaranteed to make you sick and a health system designed to make sure you stay that way, what you really need is a long vacation somewhere. Unfortunately, you probably can't take one. I'll let you in on little secret: if you go to the beaches of Thailand, the mountains of Nepal, or the coral reefs of Australia, you'll probably be the only American in sight. And you'll be surrounded crowds of happy Germans, French, Italians, Israelis, Scandinavians and wealthy Asians. Why? Because they're paid well enough to afford to visit these places AND they can take vacations long enough to do so. Even if you could scrape together enough money to go to one of these incredible places, by the time you recovered from your jetlag, it would be time to get on a plane and rush back to your job.
If you think I'm making this up, check the stats on average annual vacation days by country:
Finland: 44
Italy: 42
France: 39
Germany: 35
UK: 25
Japan: 18
USA: 12
The fact is, they work you like dogs in the United States. This should come as no surprise: the United States never got away from the plantation/sweat shop labor model and any real labor movement was brutally suppressed. Unless you happen to be a member of the ownership class, your options are pretty much limited to barely surviving on service-sector wages or playing musical chairs for a spot in a cubicle (a spot that will be outsourced to India next week anyway). The very best you can hope for is to get a professional degree and then milk the system for a slice of the middle-class pie. And even those who claw their way into the middle class are but one illness or job loss away from poverty. Your jobs aren't secure. Your company has no loyalty to you. They'll play you off against your coworkers for as long as it suits them, then they'll get rid of you.
Of course, you don't have any choice in the matter: the system is designed this way. In most countries in the developed world, higher education is either free or heavily subsidized; in the United States, a university degree can set you back over US$100,000. Thus, you enter the working world with a crushing debt. Forget about taking a year off to travel the world and find yourself - you've got to start working or watch your credit rating plummet.
If you're "lucky," you might even land a job good enough to qualify you for a home loan. And then you'll spend half your working life just paying the interest on the loan - welcome to the world of American debt slavery. America has the illusion of great wealth because there's a lot of "stuff" around, but who really owns it? In real terms, the average American is poorer than the poorest ghetto dweller in Manila, because at least they have no debts. If they want to pack up and leave, they can; if you want to leave, you can't, because you've got debts to pay.
All this begs the question: Why would anyone put up with this? Ask any American and you'll get the same answer: because America is the freest country on earth. If you believe this, I've got some more bad news for you: America is actually among the least free countries on earth. Your piss is tested, your emails and phone calls are monitored, your medical records are gathered, and you are never more than one stray comment away from writhing on the ground with two Taser prongs in your ass.
And that's just physical freedom. Mentally, you are truly imprisoned. You don't even know the degree to which you are tormented by fears of medical bankruptcy, job loss, homelessness and violent crime because you've never lived in a country where there is no need to worry about such things.
But it goes much deeper than mere surveillance and anxiety. The fact is, you are not free because your country has been taken over and occupied by another government. Fully 70% of your tax dollars go to the Pentagon, and the Pentagon is the real government of the United States. You are required under pain of death to pay taxes to this occupying government. If you're from the less fortunate classes, you are also required to serve and die in their endless wars, or send your sons and daughters to do so. You have no choice in the matter: there is a socio-economic draft system in the United States that provides a steady stream of cannon fodder for the military.
If you call a life of surveillance, anxiety and ceaseless toil in the service of a government you didn't elect "freedom," then you and I have a very different idea of what that word means.
If there was some chance that the country could be changed, there might be reason for hope. But can you honestly look around and conclude that anything is going to change? Where would the change come from? The people? Take a good look at your compatriots: the working class in the United States has been brutally propagandized by jackals like Rush Limbaugh, Bill O'Reilly and Sean Hannity. Members of the working class have been taught to lick the boots of their masters and then bend over for another kick in the ass. They've got these people so well trained that they'll take up arms against the other half of the working class as soon as their masters give the word.
If the people cannot make a change, how about the media? Not a chance. From Fox News to the New York Times, the mass media in the United States is nothing but the public relations wing of the corporatocracy, primarily the military industrial complex. At least the citizens of the former Soviet Union knew that their news was bullshit. In America, you grow up thinking you've got a free media, which makes the propaganda doubly effective. If you don't think American media is mere corporate propaganda, ask yourself the following question: have you ever heard a major American news outlet suggest that the country could fund a single-payer health system by cutting military spending?
If change can't come from the people or the media, the only other potential source of change would be the politicians. Unfortunately, the American political process is among the most corrupt in the world. In every country on earth, one expects politicians to take bribes from the rich. But this generally happens in secret, behind the closed doors of their elite clubs. In the United States, this sort of political corruption is done in broad daylight, as part of legal, accepted, standard operating procedure. In the United States, they merely call these bribes campaign donations, political action committees and lobbyists. One can no more expect the politicians to change this system than one can expect a man to take an axe and chop his own legs out from underneath him.
No, the United States of America is not going to change for the better. The only change will be for the worse. And when I say worse, I mean much worse. As we speak, the economic system that sustained the country during the post-war years is collapsing. The United States maxed out its "credit card" sometime in 2008 and now its lenders, starting with China, are in the process of laying the foundations for a new monetary system to replace the Anglo-American "petro-dollar" system. As soon as there is a viable alternative to the US dollar, the greenback will sink like a stone.
While the United States was running up crushing levels of debt, it was also busy shipping its manufacturing jobs and white-collar jobs overseas, and letting its infrastructure fall to pieces. Meanwhile, Asian and European countries were investing in education, infrastructure and raw materials. Even if the United States tried to rebuild a real economy (as opposed to a service/financial economy) do you think American workers would ever be able to compete with the workers of China or Europe? Have you ever seen a Japanese or German factory? Have you ever met a Singaporean or Chinese worker?
There are only two possible futures facing the United States, and neither one is pretty. The best case is a slow but orderly decline - essentially a continuation of what's been happening for the last two decades. Wages will drop, unemployment will rise, Medicare and Social Security benefits will be slashed, the currency will decline in value, and the disparity of wealth will spiral out of control until the United States starts to resemble Mexico or the Philippines - tiny islands of wealth surrounded by great poverty (the country is already halfway there).
Equally likely is a sudden collapse, perhaps brought about by a rapid flight from the US dollar by creditor nations like China, Japan, Korea and the OPEC nations. A related possibility would be a default by the United States government on its vast debt. One look at the financial balance sheet of the US government should convince you how likely this is: governmental spending is skyrocketing and tax receipts are plummeting - something has to give. If either of these scenarios plays out, the resulting depression will make the present recession look like a walk in the park.
Whether the collapse is gradual or gut-wrenchingly sudden, the results will be chaos, civil strife and fascism. Let's face it: the United States is like the former Yugoslavia - a collection of mutually antagonistic cultures united in name only. You've got your own version of the Taliban: right-wing Christian fundamentalists who actively loathe the idea of secular Constitutional government. You've got a vast intellectual underclass that has spent the last few decades soaking up Fox News and talk radio propaganda, eager to blame the collapse on Democrats, gays and immigrants. You've got a ruthless ownership class that will use all the means at its disposal to protect its wealth from the starving masses.
On top of all that you've got vast factory farms, sprawling suburbs and a truck-based shipping system, all of it entirely dependent on oil that is about to become completely unaffordable. And you've got guns. Lots of guns. In short: the United States is about to become a very unwholesome place to be.
Right now, the government is building fences and walls along its northern and southern borders. Right now, the government is working on a national ID system (soon to be fitted with biometric features). Right now, the government is building a surveillance state so extensive that they will be able to follow your every move, online, in the street and across borders. If you think this is just to protect you from "terrorists," then you're sadly mistaken. Once the shit really hits the fan, do you really think you'll just be able to jump into the old station wagon, drive across the Canadian border and spend the rest of your days fishing and drinking Molson? No, the government is going to lock the place down. They don't want their tax base escaping. They don't want their "recruits" escaping. They don't want YOU escaping.
I am not writing this to scare you. I write this to you as a friend. If you are able to read and understand what I've written here, then you are a member of a small minority in the United States. You are a minority in a country that has no place for you.
So what should you do?
You should leave the United States of America.
If you're young, you've got plenty of choices: you can teach English in the Middle East, Asia or Europe. Or you can go to university or graduate school abroad and start building skills that will qualify you for a work visa. If you've already got some real work skills, you can apply to emigrate to any number of countries as a skilled immigrant. If you are older and you've got some savings, you can retire to a place like Costa Rica or the Philippines. If you can't qualify for a work, student or retirement visa, don't let that stop you - travel on a tourist visa to a country that appeals to you and talk to the expats you meet there. Whatever you do, go speak to an immigration lawyer as soon as you can. Find out exactly how to get on a path that will lead to permanent residence and eventually citizenship in the country of your choice.
You will not be alone. There are millions of Americans just like me living outside the United States. Living lives much more fulfilling, peaceful, free and abundant than we ever could have attained back home. Some of us happened upon these lives by accident - we tried a year abroad and found that we liked it - others made a conscious decision to pack up and leave for good. You'll find us in Canada, all over Europe, in many parts of Asia, in Australia and New Zealand, and in most other countries of the globe. Do we miss our friends and family? Yes. Do we occasionally miss aspects of our former country? Yes. Do we plan on ever living again in the United States? Never. And those of us with permanent residence or citizenship can sponsor family members from back home for long-term visas in our adopted countries.
In closing, I want to remind you of something: unless you are an American Indian or a descendant of slaves, at some point your ancestors chose to leave their homeland in search of a better life. They weren't traitors and they weren't bad people, they just wanted a better life for themselves and their families. Isn't it time that you continue their journey?

Food for thought, eh?

Link to original post: 
http://www.sott.net/articles/show/206251-America-The-Grim-Truth

A big Friday

So oil is down to $115.00/barrel today, the Dow is up, the dollar is up against the Euro and the British Pound--since they didn't raise their interest rates--and the Olympics starts today in Japan.

A big news day, to be sure.

The question for the banks--and the American people--is, will we witness and have to finance another bank failure in the next 24 hours? Will the FDIC have to march into yet another bank this evening and close it up because it's "upside down", financially.

Hopefully not, certainly.

If they don't have to, it would be nice to break the 3-week straight we've had on these things.

Hopefully it's a quiet, uneventful evening and weekend.

Enjoy, y'all.

Dollar vs. Euro

You should watch this YouTube video on the US Dollar vs. the Euro. It has some pretty incredible statistics and information in it:

http://www.youtube.com/watch?v=3RhnHo3RDfg&feature=related


Keep in mind, it's in his best interest to give the information the way he is because he's selling the idea to the people in the room of buying gold and silver but he still has some pretty incredible statistics.

Food for thought.