The Wall Street Examiner http://wallstreetexaminer.com Busting the myths Sat, 25 Jun 2016 22:58:12 +0000 en-US hourly 1 Brexit At Tiffany’s: EU Banks Fall Back To February Levels (Not End Of The World) http://wallstreetexaminer.com/2016/06/brexit-tiffanys-eu-banks-fall-back-february-levels-not-end-world/ http://wallstreetexaminer.com/2016/06/brexit-tiffanys-eu-banks-fall-back-february-levels-not-end-world/#respond Sat, 25 Jun 2016 17:12:23 +0000 http://anthonybsanders.wordpress.com/?p=543 I made the mistake of reading the Washington Post this morning. To the WaPo, Brexit is like the film “Armageddon” with Bruce Willis and Ben Affleck. Now, it is only the Saturday (in the USA) after Brexit. The media focused on global doom and gloom in yesterday’s market. And global markets did fall. But let’s […]

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This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

I made the mistake of reading the Washington Post this morning. To the WaPo, Brexit is like the film “Armageddon” with Bruce Willis and Ben Affleck.

Now, it is only the Saturday (in the USA) after Brexit. The media focused on global doom and gloom in yesterday’s market. And global markets did fall.

But let’s look at European banks. Here is the price reaction of the Euro Stoxx bank price index after the Brexit vote was announced. Yes, the bank price index fell from 102.87 to 84.28 Euros. But it didn’t fell to zero as some would have you believe.

eubankbrexit

More importantly, European bank stock prices simply fell back to February 2016 levels.

brexitbamkdf

But, you might say, that is when the fear of Great Britain withdrawing from the European Union began.

Let’s face an unpleasant fact. European banks never really recovered from the financial crisis in 2007-2008. In fact, I had to highlight the BREXIT with a bright blue box so you can spot it since 2007.

ebhysteria

The comparisons of Brexit to “the worst thing I have ever seen” (Former Fed Chair Alan Greenspan) is just plain hysteria. And a tip of the hat to BNP Paribas who actually have a higher stock price today than during the financial crisis. Same for Barclays.

True, this week may see further stock price declines. But so far Brexit barely showed up on a long-term price chart.

The one thing Brexit did accomplish is what The Fed and ECB have tried to accomplish all along: push sovereign interest rates down. But will Yellen and Draghi push for a rate increase in the face of market-driven interest rate declines?

iust2qovd

Not likely. The implied probability of a Fed Funds hike is zero for the next two FOMC meetings and is only 1.9% for the November meeting.

wirp9

And the cruise-ship shaped Fed Funds path has suddenly morphed into a high-speed racing boat.

goodshipfollypopbrexit

So while the Brexit is creating mass hysteria (how dare the UK want independence from a central government in Brussels!), so far it is really like watching “Brexit at Tiffany’s”.  That is, not really a lot going on in bank stocks.

Caution: let’s see what this week brings, including the EU and David Cameroon trying to invalidate the British people.

Breakfast-at-Tiffanys-Wallpaper-Poster-Photo-4

 

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Weekly Commentary: Majority Mad as Hell http://wallstreetexaminer.com/2016/06/weekly-commentary-majority-mad-hell/ http://wallstreetexaminer.com/2016/06/weekly-commentary-majority-mad-hell/#respond Sat, 25 Jun 2016 06:04:00 +0000 http://wallstreetexaminer.com/?guid=d7e7e10a03243bf5768c28a265ff8725 Today, I see parallels between the Lehman failure and the UK people’s decision to leave the European Union.

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“In this unique exploration of the role of risk in our society, Peter Bernstein argues that the notion of bringing risk under control is one of the central ideas that distinguishes modern times from the distant past. Against the Gods chronicles the remarkable intellectual adventure that liberated humanity from oracles and soothsayers by means of the powerful tools of risk management that are available to us today.”

I found myself this week thinking deeply about the now classic (1998) “Against the Gods: The Remarkable Story of Risk.” The notion that new sophisticated approaches to risk management had diminished overall system risk was integral to the 1990’s U.S. boom period. Repeated policymaker resuscitation ensured that over time this already phenomenal Bubble morphed into a global Bubble of epic proportions. And right up until the Lehman Brothers collapse the consensus view held that policymakers had things well under control. Recall that the VIX sank just weeks prior to the so-called “worst financial crisis since the Great Depression.”

It’s no coincidence that near systemic financial collapse was preceded by manic devotion to the wonders of contemporary risk management. Today, I see parallels between the Lehman failure and the UK people’s decision to leave the European Union. Until the Lehman collapse, the strong consensus view held firm that policymakers would not tolerate financial crisis or severe economic downturn. By late in the cycle, this momentous market misperception had been embedded in prices for Trillions of securities, certainly including MBS, ABS and GSE debt. Importantly, as excesses turned increasingly outrageous (i.e. 2006’s $1TN of subprime CDOs) unwavering faith in the power of policy measures ensured ongoing rapid Credit expansion.

Moreover, unabated Credit growth (and attendant economic expansion and asset inflation) coupled with confidence in policymaker control ensured that inexpensive market risk “insurance” remained readily available. Going back to my initial CBBs, I took exception to the powerful interplay of securities-based finance, “activist” monetary management and booming derivatives and market risk “insurance.” The Fed’s interest-rate and liquidity backstops underpinned securities-based finance, ensuring resilient markets and economies. This safeguarded the supply of cheap market risk “insurance” – protection that was fundamental to ongoing risk-taking throughout the markets and real economy.

An increasingly systemic Bubble was built on an unsound foundation of misperceptions, including confidence that policy measures were readily available to ameliorate financial and economic instability. Panic ensued when the Lehman collapse illuminated the reality that there were powerful forces operating outside of policymaker command and control.

At the time, I believed that the 2008 crisis marked a momentous inflection point for “contemporary finance.” Serious flaws and misperceptions having been fully exposed, I expected a fundamental re-pricing of risk throughout the markets. I thought the days of cheap risk “insurance” were over. Going forward, if market participants desired to reduce risk they would have to liquidate holdings. And considering all the associated havoc, I expected the Federal Reserve and other regulators to adopt an aggressive oversight approach to derivatives generally.

The Bernanke Fed instead pulled out all stops to resuscitate “contemporary finance.” Zero rates and Trillions of QE were adopted with the specific objective of spurring financial market inflation. Indeed, rising securities market prices became the centerpiece of extraordinary measures to reflate the U.S. (and global) economy. Over time it became a case of “whatever it takes” to overcome bouts of market instability and sustain an increasingly unwieldy global Bubble.

Risk premiums and pricing for market “insurance” collapsed. Instead of lingering fear from the near-catastrophic 2008/2009 experience, greed reemerged more emboldened then ever. Clearly, it was assumed, policymakers learned from 2008 and would not tolerate another crisis. Especially after 2012, “Whatever it takes” on a global basis ensured policymakers had the capacity to control developments like never before. “Risk on” finale.

Markets were obviously over-confident going to Thursday’s UK referendum. It’s all understandable. As booming securities markets over the years turned increasingly powerful and dominating, markets held sway over central bankers, politicians and electorates alike. Who’s been willing to mess with bull markets and economic recovery? Of course, the average Brit was disgusted with so many aspects of European integration. But once in the voting booth they certainly wouldn’t risk a faltering currency, sinking stock market and attendant economic uncertainty. That would be nuts. Markets – including risk insurance – were priced as if it was largely business as usual: markets dictating government policies, while central bank measures dictate the markets. Yet for voters it was anything but business as usual. For the Majority, Mad as Hell…

(Inflationist) Theory held that central banks could effortlessly print “money” that would inflate both the markets and the general price level. Such a reflation would help grow out of previous debt problems, while spurring wealth creation and renewed prosperity. Yet predictable consequences include latent financial fragilities, economic maladjustment and destabilizing wealth redistributions and disparities. Responding to obvious shortcomings, central bankers were compelled to only ratchet up monetary inflation. The past few years of “whatever it takes” have been reckless, and it’s coming home to roost. It’s increasingly apparent that popular discontent has reached critical mass, and critical development are not under central bank control.

Sure, central bankers are as committed as ever to crisis management. Global liquidity swap lines will be wide open. There will market interventions and ongoing liquidity backstops. More QE is on the horizon. But the process has turned dysfunctional and the consequences of aggressive monetary inflation extraordinarily unpredictable. Economies have fragmented. Markets have fragmented. Societies have fragmented. Political unions are fragmenting. It’s that old dilemma that central bankers can create liquidity but it’s difficult – these days impossible? – to dictate where the “money” flows in such a fragmented world.

It’s a popular argument that banks are healthier (better capitalized) these days than back in 2008. As I’ve chronicled for awhile now, global stock prices support the view that banks today confront extraordinary risks. I would add that I believe global securities market vulnerabilities greatly exceed those of 2008. A hedge fund industry and ETF complex that have each swelled to $3.0 TN are on the list of market risks that have inflated significantly since 2008. From a more real economy perspective, risks unfolding in Europe, China, Asia and EM, more generally, greatly exceed those from 2008. Actually, one has to be a real optimist to see a bright future for European, Asian or EM banking systems.

Brexit comes at a terrible time for European banks and Europe’s securities markets more generally. To be sure, Friday trading put an exclamation mark on what was already bear market trading action. European bank stocks were down 14.5% Friday, increasing y-t-d losses to a nauseating 29%. UK banks were under intense selling pressure. Royal Bank of Scotland sank 27% in Friday’s chaotic session, while Barclays and Lloyds fell 20% and 23%. Elsewhere, Credit Suisse sank 16% during the session, with Deutsche Bank down 17% (down 35% y-t-d). Friday trading also saw Banco Santander fall 20%.

UK stocks opened Friday down about 8% but closed the session with losses of 3.2%. Spanish stocks sank 12.4% in wild trading, increasing y-t-d losses to 18.4%. Stocks in France sank 8.0%, pushing 2016 losses to 11.4%. Friday trading saw equities sink 5.7% in the Netherlands, 6.4% in Belgium%, 7.0% in Portugal, 13.4% in Greece and 7.0% in Austria.

Recalling the tumultuous 2011/12 period, Italy is again becoming a market concern. Ominously, Italian bank stocks sank 22.1% Friday, a crash that pushed 2016 declines to 52%. Friday trading saw the Italian stock market (MIB) sink 14.5%, increasing y-t-d declines to 34%. And with Italian 10-year bond yields up seven bps to a four-month high 1.62%, the spread to bund yields surged 14 bps this week to a two-year high 167 bps.

European periphery spreads widened significantly Friday. Spanish 10-year bond spreads (to bunds) widened 30 bps Friday to a one-year high, with Italian spreads 29 bps wider. Portuguese spreads widened 39 bps and Greek spreads surged 91 bps.

Panic buying saw 10-year U.S. Treasury yields drop 19 bps Friday to 1.56%, the “largest single-day drop in 5½ years.” UK yields sank 29 bps to a record low 1.08%. German yields dropped another 14 bps Friday to a record low negative 0.05%. Swiss bond yields fell 13 bps to a record low negative 0.56%. After trading almost $100 higher overnight, bullion finished Friday’s session up $59 (4.7%).

In Asia, the Japanese equities bear market gathered further momentum. With Friday losses of almost 8.0%, Japan’s Nikkei 225 sank another 4.2% this week to an eight-month low (increasing y-t-d losses to 21.4%). Japanese banks (TOPIX) were clobbered 8.0% during Friday’s session, boosting 2016 losses to 37%. The Shanghai Composite’s 1.1% decline increased y-t-d losses to 19.4%.

US stocks this week again outperformed most developed markets. The S&P500’s 3.6% Friday drop put the week’s decline at 1.6%. Not so bullishly, Friday trading saw the banks (BKX) drop 7.3% (down 13.1%) and the broker/dealers (XBD) sink 7.9% (down 16%).

Currency trading has turned wildly unstable. Friday trading saw the Swedish krona drop 3.7% versus the dollar. Norway and Demark saw their currencies lose more than 2%, though these were modest declines compared to some key Eastern European EM currencies. Poland’s zloty sank 4.3% Friday, the Hungarian forint fell 3.5% and Czech koruna declined 2.4%. Friday trading saw the South African rand sink 4.6%. The Russian ruble fell 2.3% and the Turkish lira dropped 2.6%. Unsettled Friday action saw the Mexican peso trade to a record low, before ending the session down 3.8%. What’s unfolding south of the border?

Yet the real action was with the British pound and Japanese yen. The pound traded overnight at 1.324 to the dollar, a 30-year low – before cutting Friday’s losses to 8.1% at 136.79. And with the yen surging an alarmingly quick 5% versus the dollar, the pound was at one point down about 15% versus the yen.

Currency markets badly dislocated. And discontinuous markets are a major problem for those dynamically hedging derivative exposures as well as players that are leveraged. The pound’s abrupt fall was understandable considering the amount of hedging going into the referendum. But in the yen’s discontinuity I discern important confirmation of the thesis that there remains enormous amounts of leverage in short yen “carry trades” (short/borrow in yen to finance trades in higher-yielding currencies).

The impairment of the leveraged speculating community remains an important facet of the bursting Bubble thesis. There are surely casualties from Thursday night and Friday’s trading fiasco. And as hedge fund losses mount, the potential for major redemptions appears increasingly likely. We should expect de-risking/de-leveraging to intensify. And while central banks will continue to abundantly supply a liquidity backstop, I don’t believe such measures at this point will tame problematic volatility. Market correlations have run amuck. Hedging strategies are problematic. So risk exposures have to get smaller. Uncertainties have become too great.

June 24 – UK Daily Express (Jonathan Owen): “Five European countries may seek to follow Britain’s lead in leaving the EU in a Brexit domino effect, Germany has warned… Tensions are rising across the EU, with Denmark, France, Italy, the Netherlands, and Sweden all facing demands for referendums over Europe. In a statement, German Chancellor Angela Merkel said: ‘There is no point beating about the bush: today is a watershed for Europe, it is a watershed for the European unification process.’”

European integration is again under existential threat. And while disintegration will likely unfold over the coming years, a crisis of confidence in the markets could erupt at any point. Confidence in Europe’s banks is faltering badly. I believe faith in the ECB’s capacity to hold the banks and securities markets together is waning. How much leverage has accumulated throughout European periphery bond markets? And it is a harsh reality of Europe’s financial structure that de-risking/de-leveraging dynamics tend to see rising yields/widening spreads intensify market fears of bank impairment. Then bank worries further negatively impact sentiment in the markets and business community in a problematic vicious spiral.

The ECB could boost QE, but it recently did that. It could buy corporate debt, but it has started doing this already as well. Negative rates only worsen the banks’ predicament. And bankers facing such extraordinary uncertainties will extend Credit cautiously – in Europe, throughout EM and in securities finance. When the world worries about Europe’s financial structure and economic prospects, fears can quickly spread globally. I find myself worrying more about China. U.S. markets have remained resilient. On the one hand, our markets win by default. On the other, best I can tell there is no market in the world that remains so oblivious to a bevy of unfolding financial, market, economic and geopolitical risks. Central banks are losing control and I fear “contemporary finance” is again in the crosshairs.

Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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Why the Bitcoin Price Rise on Brexit News Matters http://wallstreetexaminer.com/2016/06/bitcoin-price-rise-brexit-news-matters/ http://wallstreetexaminer.com/2016/06/bitcoin-price-rise-brexit-news-matters/#respond Fri, 24 Jun 2016 20:11:36 +0000 http://moneymorning.com/?p=227874 The Bitcoin price got a healthy 8.8% pop from the shocking vote in Britain to leave the European Union, otherwise known as "Brexit."

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This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

As it became clear late yesterday and into Friday morning that Britain was indeed voting to leave the European Union, the Bitcoin price got a very clear boost.

In the six hours or so from when the results started to trickle in (about 7 p.m. EDT) until it was obvious that the Brexit had become a reality, the Bitcoin price spiked about 8.8%, jumping from about $625 to nearly $680. Today, the price of Bitcoinhas fallen back to about $650.

bitcoin priceThis roughly mirrored the surge in gold, which rose as much as 8% before retreating somewhat.

That the Bitcoin price behaved much like gold in response to the Brexit newsshould not be surprising, but that kind of correlation actually has been rare.

TradeBlock, a web-based cryptocurrency data provider, analyzed the one-year correlation of gold and Bitcoin at the end of January. TradeBlock found that Bitcoin had a pronounced inverse relationship with gold – not what you’d expect from two “safe-haven” investments.

The correlation coefficient was -0.70. Correlation coefficients are measured on a scale from 1.0 to -1.0, so -0.70 means that the price of gold and the price of Bitcoin mostly moved in opposite directions.

That’s probably because the financial world has been slow to accept Bitcoin as a safe haven in the tradition of precious metals like gold and silver. After all, Bitcoinhas only been around since 2009, while gold has served as a store of value for thousands of years.

But that’s been changing…

Why the Bitcoin Price Behaved More Like Gold This Time

The global financial community has come around to viewing Bitcoin as a transformational technology, and not so much a tech novelty, so the next logical step is for it to be thought of as a kind of “digital gold.”

“This is Bitcoin’s coming out party as a global safe-haven investment. Amazing,” tweeted Barry Silbert, founder and CEO of the Digital Currency Group and the creator of the Bitcoin Investment Trust.

This idea isn’t new to the Bitcoin community, but until now we haven’t really seen it manifest in the Bitcoin price.

“Changes in investor psychology about safe havens, at the margin, will make an impact on the Bitcoin market,” said Darin Stanchfield, CEO of Bitcoin hardware wallet KeepKey. “This starts a feedback loop, where investors see how prior events affected the Bitcoin price and decide to seek some exposure to Bitcoin, which in turns drives up its price. We saw early signs of this back in 2013 during the fear of a U.S. government shutdown, and then again last summer during the Greek bailout referendum. Over time, perception becomes reality.”

For investors, this means Bitcoin has become one more alternative to traditional safe-haven assets such as gold, silver, and U.S. Treasuries.

Why Bitcoin Is an Excellent Safe Haven

Bitcoin is ideal protection from the destructive policies of central banks and fiat currencies that continue to lose value.

“People may be waking up to the realities of fiat currencies and debt economies,” said Ned Scott, CEO of Steemit, a social media platform built around the Steem cryptocurrency. “Centralized, debt-based economies and their currencies come with risks, such as bail-ins and bail-outs, that digital currencies protect consumers from.”

And as the Brexit vote has demonstrated, Bitcoin also offers protection from black swan events.

Of course, investors shouldn’t go overboard. Most experts recommend holdings in gold, for example, at about 5%, and certainly less than 10%.

If you choose to add Bitcoin to your portfolio, it should be no more than 5%. While it has many of the advantages of gold, Bitcoin is much more volatile, and so more risky.

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Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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Gold Surged After Brexit Vote But It May Not Last http://wallstreetexaminer.com/2016/06/gold-surged-brexit-vote-may-not-last/ http://wallstreetexaminer.com/2016/06/gold-surged-brexit-vote-may-not-last/#respond Fri, 24 Jun 2016 19:28:28 +0000 http://moneymorning.com/?p=227856 Gold rocketed past the significant $1,300 mark to its highest level in two years.

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The gold price today (Friday, June 24) rocketed past the $1,300 mark after the results of the Brexit vote sent global markets into a wild tailspin.

As of 1:35 p.m., gold prices were up 4.6% to $1,321.10. That puts the yellow metal on track for its largest one-day gain since February and its highest close since August 2014.

The results of the UK referendum are now clear – Britain has voted to leave the EU. And while the price of gold is benefiting the most from the controversial decision, markets around the world are in turmoil.

European markets all plunged on the news. The UK’s main stock index, the FTSE 100, fell 3.2% on the day, while Germany’s and France’s main indices were down 6.8% and 8%, respectively. Here in the United States, the Dow Jones Industrial Average is down 2.8%.

It’s clear the Brexit will be all everybody talks about in the coming weeks. Today, I’m going to discuss where we can expect gold prices to move in the wake of this massive frenzy.

First, here’s a recap of the gold price’s wild week…

Gold Price Today Soars Following Lackluster Week

The price of gold kicked this past week off with a session of volatility. On Monday, June 20, prices fell 0.1% to close at $1,290.

Gold’s headwinds blew even stronger the following day. The metal immediately dropped by nearly $20 to $1,271 when markets opened. Gold prices eventually closed at $1,268 and logged a loss of 1.7%.

Wednesday was more of the same, though less dramatic. Gold traded flat throughout the day and closed just 0.2% lower at $1,266.

For comparison, here’s how the U.S. Dollar Index (DXY) has been trading this week…

US-Dollar-Index

Notice how both the price of gold and the U.S. dollar declined on Wednesday. Remember, this kind of short-term behavior where both move in tandem is not typical.

This pointed toward an easing of fear regarding the likeliness of the Brexit vote producing a win for the “Leave” side.

Yesterday, the polls opened and British citizens voted on whether or not their country would leave the EU. During the day, gold prices trended lower and closed at $1,263.10 for a 0.2% loss. Again, this movement showed how investors were anticipating the country to remain in the bloc.

Then, the UK shocked the world with a Brexit, sending the gold price today to its highest level since 2014.

With today’s rally, investors want to know if gold prices will maintain these gains in the coming months.

Here’s my specific gold price target following the Brexit results…

Despite the Rise in the Gold Price Today, This Is Where It’s Headed

With the Brexit vote ending with the “Leave” side winning, I expected gold prices to see a surge. The metal’s safe-haven appeal during volatile market conditions send it on a massive rally whenever a geopolitical crisis happens.

But the gold buying will likely start to lose steam and back off within weeks.

I think the reality that it’s not actually the end of the world will finally be recognized and the trend of typical summer weakness in gold will return.

Despite all this fear, gold will settle back somewhat, and stocks will regain some ground they lost today. Reality will set in, and the markets will realize that Britain leaving the EU is not as big a deal as the “Remain” side wanted us to believe.

After all, Britain maintained its own currency – the pound sterling – even while being an EU member. That will not change.

Gold’s safe-haven quality let the metal rally as expected, and investors who followed our recommendations to stay long on gold had a decent trading day, all things considered.

I just think it’s a little overdone and we could well see it back below $1,300 as things settle down.

 

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Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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Brexit is Just What the Dr. Ordered http://wallstreetexaminer.com/2016/06/brexit-just-dr-ordered/ http://wallstreetexaminer.com/2016/06/brexit-just-dr-ordered/#respond Fri, 24 Jun 2016 18:53:30 +0000 http://wallstreetexaminer.com/?guid=53b2c05886aeb336a9660bd36b6c0273 This is a syndicated repost courtesy of Commentaries By Peter Schiff. To view original, click here. Reposted with permission. Janet Yellen should send a note of congratulations to Nigel Farage and Boris Johnson, the British politicians most responsible for pushing the Brexit campaign to a successful conclusion. While she’s at it she should also send…

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This is a syndicated repost courtesy of Commentaries By Peter Schiff. To view original, click here. Reposted with permission.

Janet Yellen should send a note of congratulations to Nigel Farage and Boris Johnson, the British politicians most responsible for pushing the Brexit campaign to a successful conclusion. While she’s at it she should also send them some fruit baskets, flowers, Christmas cards, and a heartfelt “thank you.“ That’s because the successful Brexit vote, and the uncertainty and volatility it has introduced into the global markets, will provide the Federal Reserve with all the cover it could possibly want to hold off on rate increases in the United States without having to make the painful admission that domestic economic weakness remains the primary reason that it will continue to leave rates near zero.

For months the corner that the Fed has painted itself into has gotten smaller and smaller. It continues to say that rate hikes will be appropriate if the data suggests the economy is strong. Then its representatives continually cite (arguably bogus) statistics that suggest a strengthening economy, which cause many to speculate that rate hikes are indeed on the horizon. But then at the last minute the Fed conjures a temporary reason why it can’t raise rates “right now,” but stresses that they remain committed to doing so in the near future. But each time they conduct this pantomime, they lose credibility. Sadly, Fed officials are discovering that their supply of credibility is not infinite, even among those who would like to cut them a great deal of slack.

But the Brexit vote saves them from all this unpleasantness. Now when critics question the Fed’s unwillingness to deliver on the suggested rate hikes, given what they believe to be a strong economy, all the Fed needs to do is point to the “uncertainty” that will be in play now that the world’s fifth largest economy is disengaging from the European Union. And since this process is bound to be long, messy, and fraught with uncertainties (as there is no precedent for a country leaving the EU), this will be a handy excuse that the Fed will be able to rely on for years.

Brexit could also place severe strains and uncertainties on the global currency markets. The fear of financial losses could encourage investors to seek safe haven assets like gold and, at least for now, the U.S. dollar. Given that there is already much concern that the dollar is valued too highly against most currencies, and that this has created imbalances in the global economy, any surge in the dollar that results from Brexit may have to be fought by the Federal Reserve through lower interest rates and quantitative easing. This would rule out the potentially dollar-strengthening interest rate hikes that they supposedly planned on delivering. So as far as Janet Yellen is concerned, the British have given her the gift that keeps on giving.

On another level, the vote in the UK illustrates the fundamental inefficacy of the monetary and financial policies that have been implemented by the world’s dominant central banks and central bureaucracies. For years, global elites have been telling us that deficit spending, government regulation, and central bank stimulus is the best way to cure the global economy in the wake of the 2008 Financial Crisis. To prove these points, elite economists associated with the government, academia, and the financial sector have pointed to all kinds of metrics to show how their policies have been successful. But the man on the street perceives a very different reality. They know that their living standards have fallen, their cost of living has risen, and that their job prospects have deteriorated. They see a loss in confidence and economic stagnation when they are being assured the opposite.

This disconnect has fueled anti-establishment sentiment on both sides of the Atlantic. In the United States, it has given rise to the insurgent candidacies of both Donald Trump and Bernie Sanders. The unexpected successes of both reflect a deep distrust of the establishment. Such discontent would not be in play if the positive stories being told by the elites had made any resonance with rank and file voters.

The same holds true with the unexpected strength of the anti-EU voters in Britain. The “Remain” camp had the support of virtually all the elite members of the major UK political parties, the media, and the cultural world. In addition, foreign leaders, including President Obama in a state trip to England, harangued British voters with warnings of economic catastrophe if the British were to make the grave error of defying the advice of their “best” economists.

Given all this, poll numbers that suggested the vote could be close had been dismissed. The elites, as evidenced by recent drifts in currency and financial markets, had all but assumed that British voters would fall into line and vote to remain. Instead, the people revolted. After having been misled for so many years by the very elites who urged them to remain, the rank and file finally asserted themselves and voted with their feet.

British voters may not know what they will get with an independent Britain, but they knew that something was rotten, not just in Denmark, but all over the European Union. The same holds true in the United States. Until our leaders can paint more realistic pictures of where we are and where we are going, we should expect more “surprises” like the one we got yesterday.

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Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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Oil Prices After Brexit: Where the Market Is Headed Now http://wallstreetexaminer.com/2016/06/oil-prices-brexit-market-headed-now/ http://wallstreetexaminer.com/2016/06/oil-prices-brexit-market-headed-now/#respond Fri, 24 Jun 2016 18:40:30 +0000 http://moneymorning.com/?p=227844 Oil Prices After Brexit: Crude oil prices around the world are falling in the wake of the biggest event in British history.

The post Oil Prices After Brexit: Where the Market Is Headed Now was originally published at The Wall Street Examiner. Follow the money!

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This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

Both Brent and WTI crude oil prices are being hammered today after the UK shocked global markets by voting to leave the European Union.

oil prices after brexit

At 9 a.m. today, WTI crude oil prices were down 5% and trading at $47.64 per barrel. The U.S. benchmark took a sharp plunge in overnight trading as results of the UK referendum gradually poured in. Today marks the second day in more than a month that futures for August delivery have traded below $48.

Brent crude oil prices were slightly more volatile this morning. The global benchmark tumbled 5.1% to$48.96 per barrel. Futures for September delivery are now on track for a weekly loss of 4.5%.

Today’s losses stem from the Brexit vote, which Money Morning Global Energy Strategist Dr. Kent Moors calls “the biggest single event to jolt markets in decades.”

Here’s why the oil market is plunging today…

Why Oil Prices After Brexit Are in a Free Fall

Yesterday, British citizens went to the polls to answer one question: “Should the UK remain a member of the EU or leave the EU?” The official results show 52%chose to leave while 48% chose to stay. Now, Britain will begin the process of separating itself from the EU, which is expected to happen in 2018.

This historic move is roiling markets and currencies around the world as investors sell their positions in a panic…

According to FactSet Research Systems Inc. (NYSE: FDS), the STOXX 600 – the Eurozone’s benchmark index – fell 6.8%. The Dow Jones Industrial Average and S&P 500 are down 2.2% and 2.4%, respectively. And the British pound has fallen to its lowest level in 30 years.

As the British pound crashes, European investors are flocking to the U.S. dollar as a safe-haven investment. This has sent the U.S. Dollar Index (DXY) up 2.4% to its highest level since early June. The rising dollar crushed oil prices today since a strong dollar makes dollar-denominated goods like oil more expensive to foreign currency users.

The Brexit is also sending shockwaves through the global political sphere. British Prime Minister David Cameron – who was the face of the “Remain” camp – announced he will resign by October. Meanwhile, Donald Trump visited Scotland today and praised Britain’s decision to leave the EU.

Moors – a 40-year veteran of the oil industry who’s advised several high-level government energy agencies – says the Brexit is a huge act of political suicide. The move will not only have a lasting negative impact on Britain but also on Europe’s status as a global economic force.

But crude oil prices will not see that same fate, and there’s one reason why they’ll survive Europe’s current implosion…

Oil Prices After Brexit: One Reason Why They’ll See Long-Term Gains

Investors should expect to see more oil price volatility in the near term as the British pound adjusts to the new environment.

You see, international investors don’t know what Britain will do next. Since 45% of its exports go to other EU members, Britain’s economy could be stuck between a rock and a hard place as the country tries to mend relations with the bloc to keep its export revenue afloat.

That uncertainty means the UK’s benchmark FTSE index and British pound could remain volatile in the coming months. As we’re seeing today, any sharp decline in the pound means a sharp rise in the dollar, which typically sends crude oil prices lower.

“The pound will linger and have an adverse impact on Brent crude oil prices,” Moors said on June 24 after the Brexit vote. “Since most futures contracts are denominated in dollars, the exchange problems will also affect WTI crude oil prices.”

But oil prices will rebound following the Brexit for one simple reason – balancing supply and demand.

Supply has steadily declined over the last two years and will continue to do so thanks to the falling rig count. According to Baker Hughes Inc. (NYSE: BHI), the number of active U.S. oil rigs has fallen from a peak of roughly 1,600 in 2014 to 337.

Despite the single-digit rises in the count over the last three weeks, most companies can’t afford to keep their rigs online. With crude oil costing under $48 a barrel, these producers can’t turn a profit from drilling wells that cost anywhere from $500,000 to $3 million. Most firms can only cover the operational and maintenance costs of these wells when the WTI crude oil price is near $70.

This will urge producers to use old wells that are already in place and offer less output. That can only lead to a gradual drop-off in supply until prices reach about $65, which would justify an increase in production activity.

Meanwhile, demand will steadily rise this year and next. The U.S. Energy Information Administration (EIA) reported global annual oil consumption is expected to rise 1.5% to 95.26 million barrels a day this year. For 2017, it’s projected to reach 96.73 million.

These two market forces – along with the balance between “paper” and “wet” barrels of oil – will bring prices higher this year. In fact, Moors predicts WTI crude oil prices to hit $58-$60 this year, while Brent is set to hit $62-$65.

 

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The post Oil Prices After Brexit: Where the Market Is Headed Now appeared first on Money Morning – We Make Investing Profitable.

Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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Bravo Brexit! http://wallstreetexaminer.com/2016/06/bravo-brexit/ http://wallstreetexaminer.com/2016/06/bravo-brexit/#respond Fri, 24 Jun 2016 18:26:35 +0000 http://davidstockmanscontracorner.com/?p=110232 At long last the tyranny of the global financial elite has been slammed good and hard. You can count on them to attempt another central bank based shock and awe campaign to halt and reverse the current sell-off, but it won’t be credible, sustainable or maybe even possible. The central banks and their compatriots at the EC, IMF,…

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This is a syndicated repost courtesy of David Stockman's Contra Corner » Stockman’s Corner. To view original, click here. Reposted with permission.

At long last the tyranny of the global financial elite has been slammed good and hard. You can count on them to attempt another central bank based shock and awe campaign to halt and reverse the current sell-off, but it won’t be credible, sustainable or maybe even possible.

The central banks and their compatriots at the EC, IMF, White House/Treasury, OECD, G-7 and the rest of the Bubble Finance apparatus have well and truly over-played their hand. They have created a tissue of financial lies; an affront to the very laws of markets, sound money and capitalist prosperity.

So there will be payback, clawback and traumatic deflation of the bubbles. Plenty of it, as far as the eye can see.

On the immediate matter of Brexit, the British people have rejected the arrogant rule of the EU superstate and the tyranny of its unelected courts, commissions and bureaucratic overlords.

As Donald Trump was quick to point out, they have taken back their country. He urges that Americans do the same, and he might just persuade them.

But whether Trumpism captures the White House or not, it is virtually certain that Brexit is a contagious political disease. In response to today’s history-shaking event, determined campaigns for Frexit, Spexit, NExit, Grexit, Italxit, Hungexit and more centrifugal political emissions will next follow.

Smaller government—–at least in geography—–is being given another chance. And that’s a very good thing because more localized democracy everywhere and always is inimical to the rule of centralized financial elites.

The combustible material for more referendums and defections from the EU is certainly available in surging populist parties of both the left and the right throughout the continent. In fact, the next hammer blow to the Brussels/German dictatorship will surely happen in Spain’s general election do-over on Sunday (the December elections resulted in paralysis and no government).

When the polls close, the repudiation of the corrupt, hypocritical lapdog government of Prime Minister Rajoy will surely be complete. And properly so; he was just another statist in conservative garb who reformed nothing, left the Spanish economy buried in debt and gave false witness to the notion that the Brussels bureaucrats are the saviors of Europe.

So the common people of Europe may be doubly blessed this week with the exit of both David Cameron and Mariano Rajoy. Good riddance to both.Spain's Mariano Rajoy and Britain's David Cameron in September 2015

At the same time, the anti-Brussels parties of both the left (Podemos) and the right (Ciudadanos) are certain to make further gains. But even then, the Spanish government will remain splintered and paralyzed, leaving no government strong enough or willing enough to execute Brussels’s inevitable dictates in the event that drastically over-valued Spanish bond market goes into a tailspin and requires another EU intervention.

And that’s the next leg of the Brexit storm. To wit, sovereign bond prices throughout Europe have been lifted artificially skyward by the financial snake-charmers of Brussels and the ECB. The massive rally in Spain’s 10-year bond after Draghi’s “whatever it takes” ukase was not due to Spain becoming more credit worthy or the fact that its unemployment rate has dropped from 26% to a mere 20%.

The whole plunge of yields from 7% to a low of 1% about a year ago was due to a front-runners’ stampede. That is, the fast money crowd was buying on repo what the ECB promised to take off their hands at ever higher prices in due course. They were shooting the proverbial ducks in a barrel.

But as global “risk-off” gathers worldwide momentum, look-out below. There will be no incremental bid from Frankfurt for a flood of carry trade unwinds. That’s because the ECB will soon be embroiled in an existential crisis as the centrifugal forces unleashed by Brexit tear apart the fragile consensus on which Draghi’s lunatic monetary experiments depended.

Spain Government Bond 10Y

Moreover, Spain is by no means unique. Italy’s 5-Star movement, which just came from winning 9 out of 10 mayoral contests including Rome, will surely now be energized mightily. Its Northern League ally has already called for a referendum on exiting the euro.

Needless to say, Italy’s fiscal circumstance is far more dire than even Spain’s. The likelihood that its10-year bonds are money good at last week’s 135 basis points of yield are between slim and none. Either the threat of an exit or a 5-Star/populist coalition government would send the front-runners who scarfed up Italy’s bonds running for the hills.

Since Italy owes upward of $2 trillion on it government accounts alone, its bond market is an explosion waiting to happen. And that means its bedraggled banks are, too.

That’s because one feature of the Draghi Ponzi was that national banks in the peripheral nations started buying up their own country’s rapidly appreciating sovereign debt  hand-over-fist. Italy’s banks own upwards of $400 billion of Italian government debt.

That’s the one and same Italian government that cannot possibly cope with its existing 135% debt to GDP ratio. And that’s also before the populists take power and are forced to bailout the country’s already insolvent banking system. The latter will suffer from a shock of capital and depositor flight after the current government falls(soon), and Prime Minister Renzi joins Cameron and Rajoy at some establishment rehab center for the deposed.

Italy Government Bond 10Y

During the last financial crisis our elite rulers cried financial “contagion”, and from the resulting panic by the politicians,  the current regime of massive bailouts and relentless money pumping was confected. The effect of was to bailout the gamblers from the Greenspan/Bernanke housing and credit bubble, and then to shower unspeakable windfalls on the 1% as they reflated an even more monumental bubble during the regime of QE, ZIRP and NIRP.

But now they are going to be on the receiving end of an even more virulent and far-reaching political contagion. This time populist and insurgent politicians are not going to roll-over for the rule of unelected central bankers and the international financial apparatchiks of the IMF and related institutions.

In that context, it can be said that the Eurozone and ECB are finished. Good riddance!

And when the monstrosity that Draghi created implodes into every nook and cranny of the bloated and radically mispriced financial system that resulted, central bankers everywhere will be on the run.

Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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Why the Fed Is Embracing This “Fintech Tsunami” http://wallstreetexaminer.com/2016/06/fed-embracing-fintech-tsunami/ http://wallstreetexaminer.com/2016/06/fed-embracing-fintech-tsunami/#respond Fri, 24 Jun 2016 17:49:07 +0000 http://moneymorning.com/?p=227832 Blockchain and Bitcoin are gaining popularity, threatening banks and financial systems the world over.

The post Why the Fed Is Embracing This “Fintech Tsunami” was originally published at The Wall Street Examiner. Follow the money!

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This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

A couple of weeks ago, I told you about how the fintech disruptor known as blockchain was already changing the world.

Blockchain and Bitcoin, a cryptocurrency blockchain derivative, are leading-edge fintech disruptors that actually threaten the existence of banks and central banks everywhere.

Even the all-powerful U.S. Federal Reserve.

That’s why it’s strange that the Fed is now embracing Bitcoin and blockchain, two direct threats to the banks and financial systems it lords over.

On the surface it doesn’t make any sense.

But if you dig down just a bit, it makes perfect sense. It’s not that they want to embrace the very thing that could bring them down – they have to. Their survival is at stake.

The Fed is being forced to advocate on behalf of two frontal assaults – two world-altering disruptors – to preserve their existence, their control over the American economy, and their global influence.

Here’s what’s happening…

Blockchain Technology Is Pushing the Fed to the Brink

fintech

In the old world, a custodian that controls a country’s money, which is what the Federal Reserve System is and does, that yields absolute power over the supply of cash and credit, controls interest rates and economic growth, has to have everything flow through a central ledger. That’s how they maintain control.

But in the new world of decentralized digitally shared databases existing in the cloud, there is no singular custodian, no central ledger, no economic central planner.

That’s what blockchain is, that’s what Bitcoin is, and that’s where the future lies.

As you know, blockchain is a distributed database across lots of separate computers.

It starts somewhere, from a “block,” like a block of gold, or a contract.

Then, as pieces of gold are chipped off the block, or as terms in a contract are triggered, digital records are created noting each “transaction.”

Everyone who has access to the database in the cloud, where transactions are recorded, can see every past and future link in the chain of transactions. Each new transaction on another computer extends the chain of transactions.

That’s blockchain.

Bitcoin is a cryptocurrency on a blockchain. The creator of Bitcoin made a program that embedded bitcoins within its code. People use computers designed to “mine” the code that yields bitcoins, of which there are only a limited number, according to Bitcoin’s creator, in order to chip off those bitcoins from the master program code where they reside.

Some people and merchants accept bitcoins as payment for goods and services in lieu of cash or credit, which makes Bitcoin a type of currency, or cryptocurrency.

Every transaction made with Bitcoin is recorded on the decentralized blockchain ledger.

The value of a bitcoin in dollar terms is a function of the market price of what buyers and sellers of bitcoins buy and sell them for.

That’s the same way the value of a euro, or a pound sterling, or a yen is valued in dollar terms. It’s what buyers and sellers exchanging one currency for another are willing to exchange them for.

That’s Bitcoin.

But Bitcoin isn’t the only cryptocurrency. There are others, and there’s no limit to how many cryptocurrencies there could be, just like there are lots of different sovereign currencies.

And that’s where the problem starts for the Fed – they’re not making or controlling any of the new money or cryptocurrencies.

New Cryptocurrencies Are Coming – and the Fed Is Scared

However, some countries are looking at creating new cryptocurrencies on a blockchain.

China is considering it and may be the first sovereign nation to issue a new digital currency through a blockchain. The United Kingdom is considering it, as are the Netherlands and Barbados.

Now imagine if China, with the second-largest economy in the world, with the biggest population on the planet, became the first nation to issue a digitalblockchain cryptocurrency that was 100% transparent, couldn’t be counterfeited, didn’t cost anything to “print,” and would become increasingly impossible to hack the more it was used across millions and millions of computers.

It just might become the world’s “reserve currency” preferred by everyone for transactions everywhere.

That got the Federal Reserve interested in blockchain and cryptocurrencies for sure.

In fact, the Fed’s now trying to take a lead position as an advocate of blockchain.

The Chamber of Digital Commerce (a trade association representing blockchain) held a three-day confab at the Fed’s Washington offices from June 1 to June 3 this year, entitled “Finance in Flux: The Technical Transformation of the Financial Sector.”

The Federal Reserve co-hosted the event, which was closed to the public, along with the IMF and World Bank.

More than 90 central bankers attended the event where Fed Chair Janet Yellen pressed her counterparts to learn everything they could about financial innovations, specifically emphasizing decentralized ledgers, blockchain, and remarkably, Bitcoin.

What’s really happening, in a “if you can’t beat ’em, don’t just join them, but lead them” approach, is the Fed knows if it doesn’t get control over fast-moving fintech disruptors, it will itself become obsolete as fintech disruptors “disintermediate” banks… and eventually central banks.

Taking Cover from a Fintech Tsunami

Corporations are delving into blockchain to establish “smart contracts,” while decentralized Bitcoin-like cryptocurrencies are coming to market with no connection to any bank or any central bank, or even any regulatory bodies.

New fintech disruptors, essentially bank disintermediators, are even being vetted by the OCC, the Office of the Comptroller of the Currency, which wants to expand its legal authority to offer “limited-purpose” charters to fintech lenders.

The OCC wants to be able to grant national charters to disruptors so they don’t have to get state banking licenses in every state they want to do business in, which – because they’re Internet-based lenders – means banking without borders.

What the Fed sees is a tsunami coming its way.

By embracing the future of blockchain and cryptocurrencies, the Fed ultimately wants to be the source of any global cryptocurrency it originates and manages as closely as it can, so it doesn’t end up being a relic of the old world.

When the most powerful institution on the face of the earth is afraid of what it can’t stop, you can be sure these fintech disruptors will be breaking old institutions and minting brand-new trillion-dollar opportunities.

So, stay tuned right here, because some new opportunities in fintech are just about to go public, and we’re going all in on some of them to cash in on the future.

 

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

Disclaimer: © 2016 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.

 

The post Why the Fed Is Embracing This “Fintech Tsunami” appeared first on Money Morning – We Make Investing Profitable.

Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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US Treasury 10Y Yield Falls To Lowest Since 09/04/2012 On Brexit (12 Euro Countries Have Negative 5Y Yields) http://wallstreetexaminer.com/2016/06/us-treasury-10y-yield-falls-lowest-since-09042012-brexit-12-euro-countries-negative-5y-yields/ http://wallstreetexaminer.com/2016/06/us-treasury-10y-yield-falls-lowest-since-09042012-brexit-12-euro-countries-negative-5y-yields/#respond Fri, 24 Jun 2016 16:42:54 +0000 http://anthonybsanders.wordpress.com/?p=536 Mortgage bankers should be happy. The US Treasury 10 year yield fell today to its lowest level since September 4, 2012. The 30 year fixed-rate ,mortgage rate should fall as well.

The post US Treasury 10Y Yield Falls To Lowest Since 09/04/2012 On Brexit (12 Euro Countries Have Negative 5Y Yields) was originally published at The Wall Street Examiner. Follow the money!

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This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

Mortgage bankers should be happy. The US Treasury 10 year yield fell today to its lowest level since September 4, 2012. The 30 year fixed-rate ,mortgage rate should fall as well.

iust2qovd

Meanwhile, in Europe, 12 countries now have negative 5 year sovereign yields. Well, 11 countries and The European Financial Stability Facility (EFSF).

emea5

So, how much lower will The Fed and the ECB try to push rates? We are already in the danger zone.

Here is a video of Fed Chair Janet Yellen and ECB President  Mario Draghi fighting it out for who can create the biggest asset bubbles while not helping their respective areas middle-class.

Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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Gold BREXOUT http://wallstreetexaminer.com/2016/06/gold-brexout/ http://wallstreetexaminer.com/2016/06/gold-brexout/#respond Fri, 24 Jun 2016 13:30:46 +0000 http://wallstreetexaminer.com/?p=299223 Gold has broken out of a broadening pattern on news of the BREXIT. It must hold certain levels to maintain this breakout. This is a bulletin to update Monday’s weekly report. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition Precious Metals Pro Report risk free for 90…

The post Gold BREXOUT was originally published at The Wall Street Examiner. Follow the money!

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Gold has broken out of a broadening pattern on news of the BREXIT. It must hold certain levels to maintain this breakout. This is a bulletin to update Monday’s weekly report.

Click here to download complete report in pdf format (Professional Edition Subscribers).

Try the Professional Edition Precious Metals Pro Report risk free for 90 days. Click here for more information or join now!

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The post Gold BREXOUT was originally published at The Wall Street Examiner. Follow the money!

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