Showing posts with label world wide economic collapse. Show all posts
Showing posts with label world wide economic collapse. Show all posts

Thursday, May 10, 2012

UPDATE: JPMorgan (JPM) Falls After Surprise Call, Mark-to-Market Losses

Whoopsie.  Things just got wobbly for JP Morgan.  Street Insider.  Excerpts:

Shares of JPMorgan (NYSE: JPM) are under heavy pressure after-hours Thursday after announcing a surprise conference call and large surprise mark-to-market loss in its chief investment office and exposure to a possible credit downgrade.



Since March 31, 2012, the company said its CIO has had significant mark-to-market losses in its synthetic credit portfolio. JPMorgan said the portfolio has proven to be "riskier, more volatile and less effective as an economic hedge than the Firm previously believed."


The company said it now see a loss of $800 million in its CIO unit, versus an expected profit of up to $200 million. (A one billion dollar swing from projections!)  Although CEO Jamie Dimon said it could "easily get worse."

The company said the loss was driven by $2 billion trading loss in its synthetic credit portfolio.

Despite the loss, JPMorgan said at this time it still expects to earn $4 billion in the quarter.

My guess is this is just the first of many surprise calls and losses in store for many, many corporations, finance-related or not.  If JP Morgan cannot sustain, the worldwide economic repercussions will be significant and quick.  Could JP Morgan be that falling domino that starts the chain reaction crash? 

Saturday, February 25, 2012

Greece Is Just A Preview Of What's Coming For The Rest Of Us

From Chris Martensen at ZeroHedge:  Funfun! Excerpts:

All eyes are on Greece these days, with hopes the situation there can soon be resolved and the global recovery kicked into high gear.



Sadly, those hopes are misguided claims Ben Davies, CEO of Hinde Capital. In fact, he says, Greece's pain foreshadows the future awaiting the rest of the world.


It all comes down to simple math. Greece has increased its debts at a rate far faster than its income has grown. At some point, the debt became so large that the country could no longer service it.


What makes the rest of the PIIGS(Portugal, Italy, Ireland, Greece, and Spain) immune from a similar fate? Or Japan? Or the US? Or the OECD, in general?
Nothing.
And:
The cold hard fact Greece is facing is that it's now at the point where extraordinary losses need to be taken. The problem is, no one wants to take them. And all the sturm und drang being exhibited by Brussels, the ECB, sovereign debt holders, and other world leaders is nothing more than a frantic game of hot potato.



The one thing we can be confident of is that at some point, these losses will be taken. The market will eventually force it.


And the second thing we can predict is: we don't know what will happen when they are. There is so much complexity in the counterparty exposure to Greece debt - as well as the much larger derivative exposure tied to this debt - that anything between "not much" and "worldwide financial conflagration" could be possible.

Not specific, but scary, nonetheless..

Tuesday, January 17, 2012

Morgan Stanley Quantifies The Probability Of A Global "Muddle Through": 37%

Crap.  Zero Hedge.  Excerpts:

When it comes to attempts at predicting the future, it often appears that the most desirable outcome by everyone involved (particularly those from the status quo, which means financial institutions and media) is that of the "muddle through" which is some mythical condition in which nothing really happens, the global economy neither grows, nor implodes, and it broadly one of little excitement and volatility. While we fail to see how one can call the unprecedented market vol of the past 6 months anything even remotely resembling a muddle through, the recent quiet in the stock market, punctuated by a relentless low volume melt up has once again set market participants' minds at ease that in the absence of 30> VIX days, things may be back to "Goldilocks" days and the muddle through is once again within reach. So while the default fallback was assumed by most to be virtually assured, nobody had actually tried to map out the various outcome possibilities for the global economy. Until today..

The Point?

"A “muddle through” positioning is potentially dangerous: Our main message is that the muddle-through scenario might be the most plausible alternative, but its joint occurrence in the US and Europe is less likely than the result of a coin toss. Uncertainty is bad for multiples." Specifically - it is 37%

So, Economically, this is still The Lead Up..  Then things go boom!/Get bad..

Wednesday, September 28, 2011

Meanwhile, In Pre-Mayhem Greece..


FT Report That Greek Bailout Package On The Verge Of Collapse After Surge In Greek Funding Needs Sends Stocks, Euro Plunging From Highs  Tyler Durden for Zero Hedge.  Excerpts:

Wondering what just caused the market to slump? Take a wild guess. That's right - Greece. Minutes after Greece passed a vote in which it promised to promise to promise to consider collecting 1998-1999 taxes (even as all of its tax collectors are about to go on permanent strike), the FT was breaking news that while the Troika was "bailing out" Greece in the past years, the country was spending itself into an  even greater oblivion. As a result, the terms of the July 21 Second Greek Bailout will most certainly need to be renegotiated, with banks having to take even greater write downs on the bond exchange, and with far more capital having to be injected into the country.

The Downward Spiral tightens; speeds up.

Strikes and protests mount against austerity in Greece  World Socialist Web Site.  Found it on Rense.  Excerpts:

“Today, it is no longer safe for us to go onto the streets,” a politician of the Greek ruling party PASOK told the Frankfurter Rundschau. “We are the government and we are alone.”



Widespread popular anger against the government in Greece has only intensified following the latest round of austerity measures. Incidents abound of politicians of both the social democratic PASOK and the conservative opposition New Democracy (ND) being pelted with eggs and on occasion stones when they show themselves in public. Angry crowds have repeatedly besieged the homes of politicians and chanted “thieves, thieves” and “Give the money back!”


According to surveys conducted by Eurobarometer, 82 percent of Greeks have lost confidence in the government and 83 percent distrust the parliament. Sixty-seven percent no longer trust the European Union. Other polls show that PASOK would today win just 15.5 percent of the vote in a new election.

It's all hanging by only several threads..  The Big Question remains:  How big the shock waves will be, and how hard those impacts will be felt.  Globally, of course.

Saturday, September 3, 2011

Big Doin's Afoot..


Turkey says it is expelling the Israeli ambassador and cutting military ties with Israel over the country’s refusal to apologize for last year’s deadly raid on a Gaza-bound flotilla.
And:
Davutoglu also said Turkey was suspending all military agreements signed between the former allies, saying “it is time Israel pays a price.”

This is not a positive turn of events.

New evidence of a massive oil slick near Deepwater Horizon site   Story and video from Raw Story.  Excerpts:

A California nonprofit organization dedicated to the protection and preservation of wildlife has discovered what seems to be a massive oil slick in the Gulf of Mexico near the area of the original Deepwater Horizon spill.


In a flight over the Gulf Tuesday, OnWingsOfCare.org founder and pilot Dr. Bonny Schumaker spotted an oil slick that stretched for nearly 10 miles.


Last week, two Louisiana State University men took a boat into the Gulf and returned with video evidence of large blooms of crude oil swelling up to the water’s surface where the doomed oil rig once hovered.

BP had firmly denied that the well is continuing to leak.


“None of this is true,” they said in a statement.

New Data Supports Previous Fairewinds Analysis, as Contamination Spreads in Japan and Worldwide  The latest video from Arnie Gundersen.  From accompanying article:

Newly released neutron data from three University of California San Diego scientists confirms Fairewinds' April analysis that the nuclear core at Fukushima Daiichi turned on and off after TEPCO claimed its reactors had been shutdown. This periodic nuclear chain reaction (inadvertent criticality) continued to contaminate the surrounding environment and upper atmosphere with large doses of radioactivity.

In a second area of concern, Fairewinds disagrees the NRC's latest report claiming that all Fukushima spent fuel pools had no problems following the earthquake. In a new revelation, the NRC claims that the plutonium found more than 1 mile offsite actually came from inside the nuclear reactors. If such a statement were true, it indicates that the nuclear power plant containments failed and were breached with debris landing far from the power plants themselves.
..
Third, the burning of radioactive materials (building materials, trees, lawn grass, rice straw) by the Japanese government will cause radioactive Cesium to spread even further into areas within Japan that have been previously clean, and across the Pacific Ocean to North America.

Burning contaminated materials.  What could possibly go wrong?  Fukushima:  37 degrees North Latitude.  Southern Missouri:  36 degrees North Latitude.  Being globally down wind from Fukushima is awesome.

The Imminent Failure Of The Eurozone Excerpts from Zero Hedge.

Japan, and the E.U. are declining. That is, about one-sixth of the world's population is losing ground. These big economies are the ones that lead the rest of the world, including China. Countries like China, India, and Brazil, depend on the health of the big economies to keep buying their products and commodities so they can grow and generate wealth for their citizens.



What is especially concerning is the blow-up that is about to happen in Europe. It is not something that is happening "over there." In a world that is so interconnected financially and by trade, a sinking Europe is everyone's concern.

Their problems are much the same as ours with a twist. Their governments and central banks have also pursued reckless monetary and fiscal policies and now, effect is following cause. They have more or less followed the same policies as has the U.S., much to the same end. They spent large, engaged in Keynesian fiscal stimulus in a bailout attempt, ran up huge debts and deficits, and their economies are in decline.

The twist is the European Monetary Union (EMU), known as the eurozone. It is as if here in the U.S. there was no federal government and each state was truly sovereign, but there was a Federal Reserve Bank. Some states spend more than others, funding deficits by borrowing huge sums to support programs their citizens wanted. The profligate states want the Fed to buy their debt and float them loans created out of thin air, or otherwise they will go belly up and they will take down many states' banks. The responsible states know they will be stuck with the bill.


Goldman Sachs is doing it again. Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse. On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients. The general public was not intended to see this report. Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details.



It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering. In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse and that there are large numbers of financial institutions in Europe that are on the verge of collapse. If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention.

There is a tremendous amount of fear in the global financial community right now. As I wrote about the other day, the financial world is about to hit the panic button. Things could start falling apart at any time. Most of these big banks will not admit how bad things are publicly, but privately there is a whole lot of freaking out going on.

I don't know about anyone else, but all this Big Picture Doom is actually having the opposite effect.  The closer we get to whatever will ultimately happen, the calmer I get.  Strange, but much much emotionally lighter, that's for sure..  Have a great weekend.