“Bail-In”
Era for Europe’s Banking Crisis Begins - (www.wolfstreet.com) Many
Banco Popular investors wiped out. Taxpayers off the hook. What it means for
Italy. Banco Popular, until today Spain’s sixth biggest bank, is no more. Its
assets, including a massive portfolio of small-business clients, now belong to
Banco Santander, Spain’s biggest bank. The global giant now has 17 million
customers in Spain, a country of just 45 million people. The price was €1. Spain’s
Ministry of the Economy revealed that by 3 pm Tuesday, Popular was no
longer able to contain the deposit outflow. “It had exhausted all its lines of
liquidity, both ordinary and extraordinary.” It had run out of collateral to
cover any further lines of emergency liquidity. This apparently triggered the
intervention by the ECB’s Single Resolution Board (SRB), which decided on
Tuesday that the bank “was failing or likely to fail” and would have to be
wound down, unless a buyer could be found. Banco Popular’s shareholders, who’d
been repeatedly suckered into handing Popular fresh funds in numerous capital
expansions, will be wiped out. Holders of Popular’s riskiest bonds, its AT1
bonds and AT2 bonds, or CoCo bonds, also got wiped out. These bonds had already plunged in recent weeks. But the bank’s
senior bondholders and depositors were spared.
Trump’s
America Is Facing a $13 Trillion Consumer Debt Hangover - (www.bloomberg.com) After
bingeing on credit for a half decade, U.S. consumers may finally be
feeling the hangover. Americans faced with lackluster income growth have
been financing more of their spending with debt instead. There are early signs
that loan burdens are growing unsustainably large for borrowers with lower
incomes. Household borrowings have surged to a record $12.73 trillion, and the percentage
of debt that is overdue has risen for two consecutive quarters. And with
economic optimism having lifted borrowing rates since the election and the
Federal Reserve expected to hike further, it’s getting more expensive for
borrowers to refinance. Some companies are growing worried about their
customers. Public Storage said in April that more of its self-storage
customers now seem to be under stress. Credit card lenders including Synchrony
Financial and Capital One Financial Corp. are setting aside more money to cover
bad loans. Consumer product makers including Nestle SA posted slower sales growth
last quarter, particularly in the U.S.
They
Killed Bitcoin 129 Times; Each Time, It Came Back Even Stronger - (www.caseyresearch.com) From
2009–13, bitcoin rallied from a fraction of a penny to over $1,100… and then
spectacularly crashed 85% to $185. It looked like a classic “pump and dump” to
me. That’s why I ignored it. But then something very interesting happened. Instead
of collapsing back to pennies, bitcoin found support in the $200 range. Even
after the bubble popped, bitcoin was still worth billions. This intrigued me
because true Ponzi schemes have zero value when they crash. The fact that
bitcoin was still attracting buyers even after the onslaught of negative news…
an 85% price crash… and universal scorn… said something to me. It said that
maybe this asset had real value. At the very least, it told me that more
investigation was needed.
Household
Net Worth Hits A Record $95 Trillion... There Is Just One Catch - (www.zerohedge.com) In the
first quarter of 2017, total US household net worth rose by $2.3 trillion,
reaching a record $94.8 trillion as the stock market soared and home prices
posted modest improvements. And while it would be great news if wealth across
all of America had indeed risen as much as the Fed claims, the reality is
that there is a big catch... And while it would be great news if wealth across America had indeed risen as much as the chart above shows, the
reality is that there is a big catch: as shown previously, virtually all of the net worth,
and associated increase thereof, has only benefited a handful of the wealthiest
Americans. In other words, roughly three-quarter of the $2.4
trillion increase in assets went to benefit just 10% of the population, who
also account for roughly 76% of America's financial net worth, Even
worse, when looking at how wealth distribution changed from 1989 to 2013, a
clear picture emerges. Over the period from 1989 through 2013, family wealth grew at significantly different rates for different
segments of the U.S. population. In 2013, for example: The wealth of
families at the 90th percentile of the distribution was 54 percent greater than
the wealth at the 90th percentile in 1989, after adjusting for changes in
prices.
Money
Markets "Easing" Despite Impotent Fed Policy (BLOWUP IMMINENT?) - (www.alhambrapartners.com) ZeroHedge
reports this morning on some (more) interior confusion by economists at one of
the big banks. The Fed has "raised rates" and yet according to their
calculations, all their calculations, financial conditions are for them
paradoxically easier. ... Through no action or direction of the Fed, the global
"dollar" conditions after February 11, 2016, have been relatively
better. The confusion more recently stems from the same set of flawed premises;
it was widely believed that the tighter "dollar" conditions of the
"rising dollar" period, though "unexpected", were due to
the end of QE and then the first "rate hike." They weren't; the
global "dollar" pays little or no mind to monetary policy.
U.S.
Stocks Fall With Dollar as Treasuries Rise: Markets Wrap - (www.bloomberg.com)
How Financial Vulnerability Helped to Curb Global Productivity - (www.bloomberg.com)
U.S. Job Openings Hit Record High in April, Topping 6 Million - (www.bloomberg.com)
U.S. CEO Sentiment at Three-Year High Is Good Omen for Economy - (www.bloomberg.com)
How Financial Vulnerability Helped to Curb Global Productivity - (www.bloomberg.com)
U.S. Job Openings Hit Record High in April, Topping 6 Million - (www.bloomberg.com)
U.S. CEO Sentiment at Three-Year High Is Good Omen for Economy - (www.bloomberg.com)
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