Dec 182014

snb_2783022bZero Hedge: “Everyone thought that any major monetary policy surprises and/or capital controls today would come from Putin during his annual press conference. Boy were they wrong: just after 2 am Eastern, none other than the Swiss National Bank joined the ranks of the ECB in scrambling to stem the wave of capital flight, not to mention the cost of money, when it announced it too would start charging customers for the privilege of holding cash in its banks, when it revealed a negative, -0.25% interest rate on sight deposits: a step which according to the SNB was critical in maintaining the 1.20 EURCHF floor.

From the SNB:

  The Swiss National Bank (SNB) is imposing an interest rate of –0.25% on sight deposit account balances at the SNB, with the aim of taking the three-month Libor into negative territory. It is thus expanding the target range for the three-month Libor to –0.75% to 0.25% and extending it to its usual width of 1 percentage point. Negative interest will be levied on balances exceeding a given exemption threshold.Zero Hedge: “Everyone thought that any major monetary policy surprises and/or capital controls today would come from Putin

Opinion: This is really not complicated. Think of the US Federal Reserve (Fed) and the European Central Bank (ECB) as a bank for banks.

Bank of America, Deutsche Bank, Barclays, J.P. Morgan, and other large banks use the Fed and the ECB much as we use a bank. They store large amounts of money, called reserves, at central banks and when they need loans they can borrow directly from them.

In a normal world, banks pay depositors an interest rate and then loan these funds out to businesses and consumers at a higher interest rate for a profit. The bank’s goal is to earn a “spread”, which is the difference between the small business loan revenue of 5% and their cost to depositors of 1%. In this example, the bank would earn a spread of 4% on the total loan value (5% – 1% = 4%).

In addition, the Swiss have inched negative rates to avoid hot money flowing in from other EU nations which would drastically appreciate their currency and cause a severe disruption in exports.

The Fed has maintained a Zero Interest Rate Policy (ZIRP) for over five years in order to help repair our economy from the damage caused by the financial crisis. The goal of ZIRP was to keep interest rates so low that companies would be enticed to borrow super cheap money to hire workers and grow their businesses.

So if you are confused as to why banks find it necessary to take such drastic measures with all the positive economic news being reported, it is because the global economy, especially the EU, Russia, and China are actually incredibly weak.

And that is why the US dollar is strong; the cleanest’ shirt in the dirty laundry bag.

From a Biblical view, the Rider on the Black Horse (Revelation 6:5-6) bringing economic collapse is in view. But remember Revelation 6, the beginning of the 7 year tribulation period, comes after Revelation 4:1, the rapture.

(Thanks to Vason for editing and adding to this post)

Dec 132014

CNS News: “The federal debt has increased by $3.8 trillion in the 3.8 years that have passed since House Speaker John Boehner cut his first spending deal with Senate Democrats and President Obama.

That works out to $32,938.38 for every household in the United States—including those taking federal welfare benefits—and $42,783.20 for every full-time year-round private-sector worker in the United States.”

Opinion:  What is becoming obvious is that big government progressives come in all flavors. How foolish to believe that anything would change.


Let the good times roll, like the bill will never come due.

Dec 082014


Hedge: “Who says macroprudential regulation doesn’t work: according to the BIS, notional amounts of outstanding OTC derivatives contracts fell by 3% to “only” $691 trillion at end-June 2014. This is also roughly equal to the total derivative notional outstanding just before the Lehman collapse, when global central banks volunteered taxpayers to pump a few trillion in capital to meet global variation margin calls. Clearly the system, in the immortal words of Jim Cramer, is “fine.”

Opinion: Let’s start with a definition:

In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often called the “underlying.” Derivatives can be used for a number of purposes – including insuring against price movements (hedging), increasing exposure to price movements for speculation, or getting access to otherwise hard to trade assets or markets.

If that made no sense – don’t worry – you’re in good company. After a career in the financial industry, I don’t understand it either and any one who tells you they do is either lying or a computer.

There are 6 main classes of investments: stocks, bonds, commodities, real estate, collectibles and cash. A derivative is a play on one of those asset classes with an almost infinite amount of what ifs.

They are invented by financial whiz-kids using computer programs and sold to institutions and unsuspecting retail investors as safe and predictable. They are neither.

It seems logical to assume that the financial collapse brought by the Rider on the Black Horse (Revelation 6:7-8) will be connected to a collapse in the unfathomable 691 trillion derivatives market, because if anything that big blows up it must be apocalyptic.

But since I don’t really understand it, and will not be here to see it, there is not much point in worrying about it.



Dec 032014
5 Complete Lies About America's New $18 Trillion Debt Level

Zero Hedge: “On October 22, 1981, the government of the United States of America accumulated an astounding $1 TRILLION in debt. At that point, it had taken the country 74,984 days (more than 205 years) to accumulate its first trillion in debt. It would take less than five years to accumulate its second trillion. And

Dec 022014
Total US Debt Rises Over $18 Trillion; Up 70% Under Barack Obama

Zero Hedge: “Last week, total US debt was a meager $17,963,753,617,957.26. Two days later, as updated today, on Black Friday, total outstanding US public debt just hit a new historic level which probably would be better associated with a red color: as of the last work day of November, total US public debt just surpassed

Nov 172014
Japan in Recession

Business Insider: “Japan’s economy shrank an annualised 1.6 percent in July-September, confounding expectations for a modest rebound after a severe contraction in the previous quarter and solidifying the view premier Shinzo Abe will delay a second sales tax hike next year. Abe has said Monday’s GDP data would be key to his decision on whether to

Nov 032014
QE Added $9 Trillion In "Equity Wealth" Or 32% Of The Current S&P500 Level

Zero Hedge: Earlier (Last) week the Fed’s QE3 ended… and less than 48 hours later the Bank of Japan boosted its own bond (and stock) monetization program. The good news is that by now it is clear to everyone, including CNBC, that the world is so addicted to some form of global central bank liquidity injection that

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