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Citigroup Chief Economist Thinks Only “Helicopter Money” Can Save The World Now
Citigroup Chief Economist Thinks Only “Helicopter Money” Can Save The World Now
Having recently explained (in great detail) why QE4 (and 5, 6 & 7) were inevitable (despite the protestations of all central planners, except for perhaps Kocharlakota – who never met an economy he didn’t want to throw free money at), we found it fascinating that no lessor purveyor of the status quo’s view of the world – Citigroup’s chief economist Willem Buiter – that a global recession is imminent and nothing but a major blast of fiscal spending financed by outright “helicopter” money from the central banks will avert the deepening crisis.Faced with China’s ‘Quantitative Tightening’, the economist who proclaimed “gold is a 6000-year old bubble”and cash should be banned, concludes ominously, “everybody will be adversely affected.”
China has bungled its attempt to slow the economy gently and is sliding into “imminent recession”, threatening to take the world with it over coming months, Citigroup has warned. As The Telegraph’s Ambrose Evans-Pritchard reports, Willem Buiter, the bank’s chief economist, said the country needs a major blast of fiscal spending financed by outright “helicopter” money from the bank to avert a deepening crisis.
Speaking on a panel at the Council of Foreign Relations in New York, Mr Buiter said the dollar will “go through the roof” if the US Federal Reserve lifts interest rates this year, compounding the crisis for emerging markets.“So why it matters is that the competence of the Chinese authorities as managers of the macro economy is really in question – the messing around with monetary policy, the hinting on doing things on the fiscal side through the policy banks. But I think the only thing that is likely to stop China from going into, I think, recession – which is, you know, 4 percent growth on the official data, the mendacious official data, for a year or so – is a large consumption-oriented fiscal stimulus, funded through the central government and preferably monetized by the People’s Bank of China.
…click on the above link to read the rest of the article…
Citi Predicts Greek Hyperinflation Breaks Out In Two Years
Citi Predicts Greek Hyperinflation Breaks Out In Two Years
Earlier, we showed that according to Citigroup (among many) for Greece to have any hope of surviving, it needs a masive debt haircut: the bigger, the better, with Citi tossing out numbers as high as €130 billion. Still, even if Greece does get debt relief, as long as it remains in the Eurozone, its economy has nothing but hell to look forward to.
Here is how Citi previews the next few years:
From an economic and financial sector angle, the success or failure of a third programme will depend on i) the strength of a possible economic recovery in coming quarters, following an overhaul of the Greek banking system, and on ii) whether debt re-profiling discussions look likely and take place as envisaged. On the first item, the degree of fiscal austerity and outright reforms to be implemented in a short period of time is likely to result in a prolongation of economic recession in coming quarters. And we need to factor in the economic costs from the (very likely) persistence of stringent capital controls and the lack of liquidity in the economy. We recently updated our real GDP growth forecasts and now expect the Greek economy to contract by at least 2.4% YY in 2015 (compared with -0.2% YY projected in June), with the economy likely to remain in recession at least until Q1 2016. Such a poor performance in terms of economic activity would mean a higher risk that Greek economic and fiscal performance would undershoot its programme targets, which could likely challenge its membership in the Eurozone. In addition, debt re-profiling is likely to be deferred, conditional and tranched, and is unlikely to boost the government’s fiscal space for public spending increases or tax cuts. Failure by the Greek authorities to lift capital controls in a meaningful way and a further increase in unemployment (we forecast that the jobless rate will rise from 27% in 2015 to 29% in 2016) could also increase social tensions, in our view.
…click on the above link to read the rest of the article…
Obama Administration Finds New Way to Let Criminal Banks Avoid Consequences
Obama Administration Finds New Way to Let Criminal Banks Avoid Consequences
Three top Democrats are accusing the Department of Housing and Urban Development of quietly removing a key clause in its requirements for taxpayer-guaranteed mortgage insurance in order to spare two banks recently convicted of federal crimes from being frozen out of the lucrative market.
HUD’s action is the latest in a series of steps by federal agencies to eliminate real-world consequences for serial financial felons, even as the Obama administration has touted its efforts to hold banks accountable.
In this sense, the guilty plea has become as meaningless to banks as their other ways of resolving criminal charges: out-of-court settlements, or deferred prosecution agreements. “Too Big to Fail” has morphed into “Too Big to Jail” — and then again, into “Bank Lives Matter.”
Sens. Sherrod Brown and Elizabeth Warren and Rep. Maxine Waters fired off a letter to HUD on Tuesday, saying they believe that the timing of the change was designed to clear the way for two banks recently convicted of federal crimes — JPMorgan Chase and Citigroup — to continue to make Federal Housing Administration-insured loans. Last year, JPMorgan Chase wrote $1.67 billion in FHA loans, and Citi wrote $342 million, according to data from the Congressional Research Service.
On May 20 of this year, JPMorgan Chase and Citigroup both entered a guilty pleaon one felony count of conspiring to rig foreign currency exchange trades, the largest market on the globe.
Five days earlier, on May 15, HUD slipped a notice into the Federal Register, seeking to alter its standard loan-level certification form, known as HUD-92900-A. This form must be filled out for lenders to receive FHA insurance, which reimburses them if the homeowner falls into foreclosure.
…click on the above link to read the rest of the article…
Greek debt crisis: ‘Something awful’ this way comes
Greek debt crisis: ‘Something awful’ this way comes
The next “final” twist in the exhausting Greek drama is upon us, and it’s looking like “something awful” is about to befall the country’s banking system, Citigroup analysts said yesterday.
A deal was on the table Friday, but the ECB’s move over the weekend to freeze emergency loans for Greek banks has led to capital controls and, in turn, has increased the odds of a Greek exit from the euro zone. For investors, it means a battered euro, wrecked equities and maybe, just maybe, a more reluctant Fed when it comes to ramping up interest rates.
So far, the U.S. stock market is starting this holiday-shortened week with a sound thrashing. It was even worse in Asia, where the Shanghai CompositeSHCOMP, -3.34% broke lower into bear-market territory despite a surprise interest-rate cut over the weekend. Technology, in particular, was slammed.
While the butterfly wings in Greece seem, at least to some degree, to be rattling markets all over the world, one hedge funder and blogger is hardly sweating the Hellenic end game.
“There’s a lot we can’t know. But there’s also a lot we do know, and pretty much all of it has changed for the better,” Mark Dow, author of Behavioral Macro, wrote. “When I look at Grexit, I see a world in much better fundamental position to avoid the cascading systemic contagion we (rightly) feared as recently as a year ago. Now is the time to do what the system could not handle in 2010: get Greece off the toxic medication and onto a path of growth and dignity.”
Key market gauges
Dow YMU5, -1.01% and S&P ESU5, -1.03% futures are down about 1%. EuropeSXXP, -2.06% is also faltering in the early going while Asia ADOW, -1.86% closed with deep cuts after an abysmal stretch last week. The euro EURUSD, -0.3761% is moving lower, as expected. Gold US:GCM5 was higher, but oil CLU5, -1.12% fell into the red.
…click on the above link to read the rest of the article…
Martin Armstrong Reports on a Secret Meeting in London to Ban Cash
Martin Armstrong Reports on a Secret Meeting in London to Ban Cash
At this point, anyone paying even the slightest bit of attention to the central planning economic totalitarians running the fraudulent global financial system is aware of the blatant push in the media to acclimate the masses to accepting a “cashless society.”
In the mind of an economic tyrant, banning cash represents the holy grail. Forcing the plebs onto a system of digital fiat currency transactions offers total control via a seamless tracking of all transactions in the economy, and the ability to block payments if an uppity citizen dares get out of line.
While we’ve all seen the idiotic arguments for banning cash, i.e., it will allow central planners to more efficiently centrally plan economies into the ground, Martin Armstrong is reporting on a secret meeting in London with the aim of getting rid of any economic privacy that remains by ending cash.
From Armstrong Economics:
I find it extremely perplexing that I have been the only one to report that there is a secret meeting in London where Kenneth Rogoff of Harvard University and Willem Butler the chief economist at Citigroup will address the central banks and advocate the elimination of all cash to bring to fruition the day when you cannot buy or sell anything without government approval. When I Googled the issue to see who has picked it up yet, to my surprise Armstrong Economics comes up first. Others are quoting me, and I even find it spreading as the Central Bank of Nigeria, but I have yet to find reports on the meeting taking place in London when my sources are direct.
Other newspapers who have covered my European tour have stated that the “crash” of which I speak is the typical stock market rather than in government. What is concerning me is the silence on this meeting where there are more and more reports about a cashless society would be better.
…click on the above link to read the rest of the article…
Why The Powers That Be Are Pushing A Cashless Society
Why The Powers That Be Are Pushing A Cashless Society
We Can’t Rein In the Banks If We Can’t Pull Our Money Out of Them
Martin Armstrong summarizes the headway being made to ban cash, and argues that the goal of those pushing a cashless society is to prevent bank runs … and increase their control:
The central banks are … planning drastic restrictions on cash itself. They see moving to electronic money will first eliminate the underground economy, but secondly, they believe it will even prevent a banking crisis. This idea of eliminating cash was first floated as the normal trial balloon to see how the people take it. It was first launched by Kenneth Rogoff of Harvard University and Willem Buiter, the chief economist at Citigroup. Their claims have been widely hailed and their papers are now the foundation for the new age of Economic Totalitarianism that confronts us. Rogoff and Buiter have laid the ground work for the end of much of our freedom and will one day will be considered the new Marx with hindsight. They sit in their lofty offices but do not have real world practical experience beyond theory. Considerations of their arguments have shown how governments can seize all economic power are destroy cash in the process eliminating all rights. Physical paper money provides the check against negative interest rates for if they become too great, people will simply withdraw their funds and hoard cash. Furthermore, paper currency allows for bank runs. Eliminate paper currency and what you end up with is the elimination of the ability to demand to withdraw funds from a bank.
…click on the above link to read the rest of the article…
Another Shill for Statism and Central Planning Demands a Cash Ban
Another Shill for Statism and Central Planning Demands a Cash Ban
Citigroup’s Chief Economist Joins the Cash Ban Bandwagon
We have discussed the views of Citigroup’s chief economist Willem Buiter previously in these pages (see “A Dose of Buiternomics” for details), on occasion of his coming out as a supporter of assorted monetary cranks, such as Silvio Gesell, to name one. Not to put too fine a point to it, Buiter is a monetary crank too.
Buiter is always shilling for more central bank intervention, and it seems no plan can ever be too silly or too extreme for him. In fact, he seems to have made the propagation of utterly crazy ideas his trademark.
Buiter has now joined one of his famous colleagues, Kenneth Rogoff, another intellectual enamored with central planning, in clamoring for a cash ban (for our discussion of Rogoff, see “Meet Kenneth Rogoff, Unreconstructed Statist”). Both Buiter and Rogoff want to make it impossible for citizens to escape the latest depredations of central bankers, such as the imposition of negative interest rates. This is to be done by forcing them to keep their money in accounts at fractionally reserved banks.
“The world’s central banks have a problem. When economic conditions worsen, they react by reducing interest rates in order to stimulate the economy. But, as has happened across the world in recent years, there comes a point where those central banks run out of room to cut — they can bring interest rates to zero, but reducing them further below that is fraught with problems, the biggest of which is cash in the economy.
…click on the above link to read the rest of the article…
Crony States of America – Wall Street Firms are Trying to Hide Payoffs Made to Employees Entering Government
Crony States of America – Wall Street Firms are Trying to Hide Payoffs Made to Employees Entering Government
“There is a lot of work ahead for the management to recover its reputation.”
– John Whitehead, Ex-Goldman Sachs Chairman, in a 2010 Wall Street Journal interview
Goldman Sachs may need to work on its image. This year, the firm beat recall-riddled General Motors along with Koch Industries and BP for the dubious distinction of worst corporate reputation, according to a new poll. Market research firm Harris Poll on Wednesday, Feb. 4, published its 16th annual ranking of the 100 most visible companies in the U.S., sorted by how positively the general public viewed them, and Goldman landed at the bottom.
– From the Bloomberg article: America’s Most Loved and Most Hated Companies
Citigroup is one of three Wall Street banks attempting to keep hidden their practice of paying executives multimillion-dollar awards for entering government service. In letters delivered to the Securities and Exchange Commission (SEC) over the last month, Citi,Goldman Sachs and Morgan Stanley seek exemption from a shareholder proposal, filed by the AFL-CIO labor coalition, which would force them to identify all executives eligible for these financial rewards, and the specific dollar amounts at stake. Critics argue these “golden parachutes” ensure more financial insiders in policy positions and favorable treatment toward Wall Street.
…click on the above link to read the rest of the article…
Citi, Goldman, ICAP And Others Preparing For Grexit, Again
Citi, Goldman, ICAP And Others Preparing For Grexit, Again
Every couple of years the same identical European drill repeats itself: 1) Greece makes loud noises as it approaches an election, 2) Europe says it couldn’t care what the outcome is and that Greece should stay in the Euro but if it exits it won’t be a disaster, 3) the ECB reminds everyone of the lie that it is not preparing for Plan B (it is) despite holding on to over €100 billion in “credibility-crushing” Greek bonds, 4) panicking Greek banks say the deposit outflow situation is completely under control (adding that “The Bank of Greece along with the European Central Bank are monitoring closely the developments and intervene whenever this is necessary,” which is code word for far more familiar, five-letter word), and meanwhile 5) all non-Greek banks quietly start preparing for the worst case scenario.
So far this time around, we had everything but step “5”. We do now.
According to the WSJ, “banks and other financial institutions in Europe are stress-testing their internal systems and dusting off two-year-old contingency plans for the possibility Greece could leave the region’s monetary union after a key election later this month. Among the firms running through drills are Citigroup Inc., Goldman Sachs Group Inc. and brokerage ICAP PLC, according to people familiar with the matter.”
And soon enough Bloomberg, because who can possibly forget the mysterious appearance of the “XGD Crncy” in June of 2012, only to disappear moments later after a few hurried phone calls from Frankfurt…
…click on the above link to read the rest of the article…
Only War, Inflation And Financial Collapse Can End The Global “Plutonomy”, According To Citi | Zero Hedge
The last time the market was as euphoric and as complacent as it is now, was in the happy go lucky days of 2006 when every day stocks surged without a care in the world, when Lehman bankers were looking to a comfortable retirement after cashing out their stock (then trading north of $70), when the only question was which mega M&A and supermega LBO will hit next, and when the then-brand new Fed chairman Ben Bernanke said there is nothing to worry about because subprime was contained and because home prices in the US just can not possibly drop. Not surprisingly, late 2006 was also when Citigroup held its first and only Plutonomy symposium: a joyous celebration of the 0.001%, or as Citi called them, “The Uber-rich, the plutonomists who are likely to see net worth-income ratios surge, driving luxury consumption”, adding “Time to re-commit to plutonomy stocks – Binge on Bling. Equity multiples appear too low, the profit share of GDP is high and likely going higher, stocks look likely to beat housing, and we are bullish on equities.”
Wait what? Was there really a time 8 years before the French economist Piketty bashed (and made millions in the process) class and wealth inequality, when one of the world’s soon to be most insolvent banks had a symposium in which the bank pulled a page right out of pre-revolutionary France and celebrated the world’s mega rich?
Yes, and that’s not all.
Wall Street Moves to Put Taxpayers on the Hook for Derivatives Trades | Liberty Blitzkrieg
Wall Street Moves to Put Taxpayers on the Hook for Derivatives Trades | Liberty Blitzkrieg.
Wall Street has for some time attempted to put taxpayers on the hook for its derivatives trades. I highlighted this a year ago in the post: Citigroup Written Legislation Moves Through the House of Representatives. Here’s an excerpt:
Five years after the Wall Street coup of 2008, it appears the U.S. House of Representatives is as bought and paid for as ever. We heard about the Citigroup crafted legislation currently being pushed through Congress back in May when Mother Jones reported on it. Fortunately, they included the following image in their article:
Unsurprisingly, the main backer of the bill is notorious Wall Street lackey Jim Himes (D-Conn.), a former Goldman Sachs employee who has discovered lobbyist payoffs can be just as lucrative as a career in financial services. The last time Mr. Himes made an appearance on these pages was in March 2013 in my piece: Congress Moves to DEREGULATE Wall Street.
…click on the above link to read the rest of the article…
Citi: “The Limits Of Investors’ Faith That Central Banks Can Push Up Asset Prices, Are Increasingly On Display” | Zero Hedge
Some interesting insights by Citi’s Matt King recapping last week’s Citigroup credit conference.
… [D]espite one panellist’s suggestion that “perhaps corporate bonds were never meant to be a liquid asset class in the first place”, and universal admissions that when you buy a bond these days you have to be prepared to hold it, there were other signs that at least some degree of secondary trading remains alive and well. The well attended sessions held by both our IG and HY analysts are not merely a sign that investors are paranoid about stepping on the next corporate landmine; it also suggests investors’ desire for alpha from traditional single-name trading is as keen as ever.
Interest in other ways to pick up yield was not quite as intense, to judge from attendance at the structured credit stream. Perhaps people are just frustrated that the ECB is hoovering up all the interesting ABS – or maybe on the synthetic side they perceive that, given the annual doubling in option volumes – all the opportunities have been exploited already…
… [I]t is hard to think that concerns about defaults in the US HY energy sector will go away any time soon – even if we think that some of the statistics we have heard being bandied about lately (“40% defaults in two years with oil at $65”) pay insufficient respect to companies’ ability to rein in capex and other expenses. On the political front, Tina Fordham raised the question as to whether markets are overestimating the ability of liquidity to override the secular shift in geopolitical risk, given the way nationalism is increasingly being used as a tool to counter growing resentment at rising inequality.
…click on the above link to read the rest of the article…
