Bank Failures in Portugal and Bulgaria
Do bank failures in Portugal and Bulgaria represent a systemic issue in the global banking system?
Update July 16, 2014: Portuguese Telecom Loses Portion of Merger Due to $1 billion non payment by Portuguese Bank
Update July 18, 2014: Second Largest Portuguese Bank Declares Bankruptcy
0:00 – 5:10 Introduction
QE worked! (according to the mainstream media)
5:10-7:40 Discussion of the efficacy of the Fed’s QE policy now that it seems it will end in October. Discussion of how journalists do not investigate the circumstances surrounding the Fed’s QE program and the tapering of it. They assume that demand for U.S. Treasuries is a given even though the facts indicate that China is no longer adding to its Treasury reserves.
As the Fed has tapered, “Belgium” has stepped up its purchases of U.S. Treasury bonds (T-Bonds). If there was already built in demand for U.S. Treasuries (there wasn’t as 60-90% of newly issued T-Bonds were bought by the Fed the past few years), then why did the Fed need to print $4 trillion to buy T-Bonds and mortgage backed securities?
Follow the Twitter conversation with Fortune columnist here:
— Christopher Matthews (@crobmatthews) July 11, 2014
Journalistic/Economic Twerking -The Eternal “Economic Recovery” Spin
7:40-8:40 discussion of no matter what the economic data it all leads to a media conclusion of a recovery; if the data is bad it is either dismissed or blamed on the weather or misinterpreted as evidence of a recovery. In contrast to the media, the Fed is not saying the economy is wonderful, but approaching “normal”.
Largest Portuguese Bank Defaults – Media: No Big Deal
8:40- 10:25 Discussion how the markets initially sold off on the news that the holding company of Portugal’s largest bank defaulted. The markets, however, soon recovered. The media immediately went in to damage control:
— Smaulgld (@Smaulgld) July 13, 2014
CNN Money Portugal bank crisis: 4 reasons to keep calm
CNN Money goes one step further and outlines why the Portuguese bank default is no reason to worry:
1. It’s a local problem;
2. Regulators are on the case;
3. Europe is getting its act together;
4. Portugal is in better shape
It’s local! We’ve heard the “containment” story before.
Regulators are on the case! Just like they were in the Bernie Madoff case or in the cases of gold and silver manipulation.
Fourth Largest Bulgarian Bank to Collapse
10:26:11:07 Discussion of the media’s treatment of the collapse of Bulgaria’s fourth largest bank.
They have identified the problem in Bulgaria as “fraud”. Again, nothing to worry about – as if fraud might not apply to other banks.
The Fragile Banking System
11:09-13:00 discussion of other issues facing the banking system- the $9 billion fine levied on Bank Paribas, the $7 billion fine on Citigroup. It seems the banking system is under severe strain and it will be hard for the Fed to say with a straight face when there is a melt down that it was “unexpected”. Speculation that sovereign funds and the Fed back stopped the stock markets after the announcement of the Portuguese bank default.
Fining the Too Big Too Fail Banks
13:00-16:00 Discussion of the treatment of the too big to fail banks and how they get off with fines which only go back to the Federal government. The size of the fine that Citibank has agreed to pay ($7 billion!) implies a tremendous amount of fraud – but no criminal charges.
If an individual had an enormous fine levied against him one would be safe to assume his behavior was criminal.
Trusting banking institutions given the seeming criminal behavior that they have alleged to be engaged in leading to multi billion dollar fines does not engender public/depositor trust.
Crime pays! Fines are a cost of the TBTF banks’ business.
Gallup Poll – Where Consumers Are Spending Their Money
16:00-17:00 discuss of a recent Gallup survey that shows consumers are spending more money on the necessities (groceries, gas, health insurance, utilities) and less on the things they want (clothing, consumer electronics, dining out, vacations). This poll tells us that there is no recovery.
Inflation: Bring the Noise!
17:00-19:27 In spite of rising inflation, Federal Reserve Chair Janet Yellen calls the inflation numbers “noisy”. Discussion of how consumers ARE noticing higher prices.
19:27-21:45 discussion of tepid consumer spending and it’s impact on the GDP.
Discussion how the media insists on using the stock market as a barometer for the health of the economy.
Insulting re inflation and jobs ( part time)- BUT the stock market is up 140% since Obama got into office
Today is President Obama's 2000th day in office. The stock market is up 142.1% since his inauguration: http://t.co/w1NAnZVY3O
— MarketWatch (@MarketWatch) July 12, 2014
Millennials and Home Ownership
21:45-24:47 Discussion of Zero Hedge story on millennials not buying in to home ownership.
Discussion whether a cultural shift took place after the financial crisis of 2008 regarding millennials attitudes towards home ownership. Discussion of how the media insists that millennials represent pent up demand.
24:47-33:00 Discussion of the advantages of home ownership. Investment vs. primary residence. Rent vs. buy.
Buying a home for the wrong reasons-price appreciation. Continued discussion whether a cultural shift took place after the financial crisis of 2008 regarding millennials attitudes towards home ownership.
32:15-39:20 discussion of how the dream homeownership and entrepreneurship have dwindled in the United States. Discussion of the reduction in the percentage of first time home buyers. Discussion of how QE “works” Discussion as to why the media is not asking WHO is buying the U.S. Treasuries out of Belgium. Banks vs Casinos.
Car Idle Analogy
40:25-45:00 Democrats will run on the stock market/ government benefits, Republicans on Bengahzi, IRS, VA Scandals. Discussion of the government’s role (or lack thereof) in creating jobs. Discussion of millennials and socialism. Discussion of production based economies vs demand based economies.
The Washington D.C. Metro Area Housing Market
45:00-50:43 discussion of the Washington DC Metro area housing market and the conditions that lead to low housing inventory. Discussion of how government intervention in the housing market leads to distortions that leads to more government intervention.
Discussion of the main stream media vs the alternative media.
Main stream media reporters get paid decent money.
50:43- credit tip of the week.
Economic & Journalistic Twerking – Bring the Noise!
Please visit the Smaulgld Store for a larger selection of recommended Kindles, books, music, movies and other items.
Or you can support Smaulgld.com by making purchases from our affiliates or by making all your Amazon purchases through the search widget below:
*DISCLOSURE: Smaulgld provides the content on this site free of charge. If you purchase items though the links on this site, Smaulgld LLC. will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.
The content provided here is for informational purposes only. Making investment decisions based on information published by Smaulgld (SG), or any Internet site, is not a good idea. Accordingly, users agree to hold SG, its owner and affiliates, harmless for all information presented on the site. SG presents no warranties. SG is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access SG, any linked content, or the reliance on any information on the site.
The information contained herein does not constitute legal, tax or investment advice and may be subject to correction, completion and amendment without notice. SG assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. SG disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result.