Tag Archives: Keynesian Economics

Dec 17 2019

Italian Bank Still in Trouble


Armstrong Economics Blog/Banking Crisis

Posted Dec 17, 2019 by Martin Armstrong

Italy is again helping a troubled bank. The government approved an emergency ordinance to support the Volksbank Popolare di Bari on Sunday and provided grants of up to 900 million euros. Volksbank Popolare di Bari was founded in 1960 as a cooperative bank. However, funds from the Ministry of Finance will not go directly to the bank because of the no-bailout policy in Europe. Instead, the capital of the state development bank Banca del Mezzogiorno-Mediocredito Centrale (MCC) is to be increased and this combined with the deposit guarantee fund FITD. This new scheme is indirectly restructuring of the Volksbank Popolare di Bari.

In recent years, the Italian state has repeatedly had to bailout banks, including the Monte dei Paschi di Siena (MPS), which is the oldest bank in the world. Because of the long-standing economic downturn, the banks in Italy still have bad loans on the books because Europe refused to engage in a bailout as was the case in the United States. Instead, the ECB kept lowering rates in the hope that the banks would make up the losses. But the economy has never recovered beyond just superficial images. The bank’s losses have reached one billion euros. Prime Minister Giuseppe Conte reiterated on Sunday that everything will be done to protect savers and hold those responsible accountable, but those responsible are running the ECB.

Within the European Union, bank deposits up to 100,000 euros per customer are legally protected. In the case of Bari, however, according to press reports, there are around 70,000 small savers who have not invested their money in savings accounts but have invested in share certificates in the bank. These small shareholders could face total loss if the bank collapsed. This would also have serious social impacts in the Mezzogiorno region.

Obviously, our European readers should NOT own ANY bank stocks in Europe. Get out before you lose 100% in these bail-in actions.

Dec 17 2019

Central Banks Buying More Equities than Gold? Why?


Armstrong Economics Blog/Gold

Re-Posted Dec 17, 2019 by Martin Armstrong

QUESTION: Marty; It seems when Goldman Sachs makes a recommendation, it tends to be the kiss of death. They came out and said the stock market was going to crash at the end of 2017 just before it broke out. Now they are pitching gold but they have been the ones who controlled the warehouses. They are claiming the central banks are the buyers so that is an indication of a bull market. Any comments on Goldman’s analysis?

HC

ANSWER: Yes, it often seems to be the old trick that was played by the Salomon Brothers. Their analysts would be quoted widely touting to buy some bond and they were inevitably the sellers. Goldman said cash was king in November 2018, not stocks. Five of the top investors in 2018 all said the stock market would crash as reported in Money Magazine. Goldman was bearish if Trump won, as reported by the New York Times on October 31, 2016. Even Goldman Sachs told everyone to sell in 2019. This is the problem when you put out forecasts based upon fundamentals. They are just sophistry, for you can spin them any way you like. How many times have we heard a stock declines on positive news and the excuse is that the street was looking for better numbers.

Goldman Sachs’ new claim saying “gold’s strategic case still strong” pointing to central bank buying is highly questionable. It is a statement that seems to be a half-truth. Because the euro is paying a negative interest rate, the only way for central banks to diversify has been to buy gold and equities. Otherwise, all they have are dollars. There are people on the board at the European Central Bank proposing that they too begin to buy equities in Europe.

The amount of gold added to central bank portfolios was tiny in comparison to equities. They bought more than $1 trillion of equities in 2018. The central banks bought only about $57 billion of gold in the past 3 years. This story is very misleading. It makes it sound like gold is being bought because the banks know the dollar will crash. The truth is so far from the implications.

If you are going to pretend to make a forecast based upon fundamentals, then tell the FULL story and do not leave out the other parts

Dec 14 2019

Antifa Leftists Riot in London Following Massive Election Loss…


Re-Posted from The Conservative Tree House on December 13, 2019 by 

Following a major election victory for conservatives in the U.K. the Antifa-left start rioting in the streets again.  Proving once more that socialists do not accept election outcomes.

The vitriolic response from the British socialists resembles an almost identical response following the 2016 election victory of President Trump.  Same groups, same political ideology, same behavior, same violence, rage and expressed anger.

The inability of the progressive left to accept the outcome of an election is identical in both the U.K and the U.S.  Calling Boris Johnson a racist and attempting to delegitimize the election outcome has a ring of familiarity for Americans.

The decades of their united globalist efforts to tear at the very fabric of nationalism is being eliminated. The radical socialists have nothing to lose; the media is sympathetic to their objectives; their desperate need for a collectivist society is visible within their apoplexy.  They are afraid of the individual accountability that comes with freedom, and they’re damn sure displaying it.

Do not look away.

Andy Ngo

✔@MrAndyNgo

Antifa are rioting in London in response to the election results giving Conservatives a huge electoral win. It’s like what I saw in Portland in November 2016.

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Dec 13 2019

The British Election – Socialists Lose Big Time


Armstrong Economics Blog/BRITAIN

Re-Posted Dec 13, 2019 by Martin Armstrong

Conservatives are now in full control of Parliament, and Britain took one major step closer to leaving the European Union. The socialist Jeremy Corbyn said he would not lead the Labour Party in another election. All the hype about socialism and how they have been so vocal has resulted in what our computer has been projecting – not this time. There has been a shift extremely left in many elections including those in the United States. But for all the noise, yelling, and screaming, socialism is dying.

The British election was called because the opponents of BREXIT did everything in their power to obstruct the democratic result of the referendum to leave the EU. They had the audacity to claim the people were too stupid and did not understand what they were voting for because the politicians have continued to want to surrender British sovereignty to Brussels while for some they would lose their pensions.

While the election began as a second referendum on BREXIT when the polls showed that the Conservative Party of Prime Minister Boris Johnson was well ahead of Labour, the Labour Party did what politicians are great at – tried to change the subject. The Labour Party, led by Jeremy Corbyn, turned the election away from BREXIT, which he knew he would lose, and transformed it to the claim that the Conservatives would sell Britain’s National Health Service to Americans. That was really absurd since the U.S. government cannot deal with Obamacare yet they were going to take over Britain’s failing health system?

The significance of this election is demonstrating the rising frustration with governments. As they say, it is better to deal with the devil you know and in that case, it is British Parliament. The British people have no right whatsoever to vote on the policies coming from Brussels. The British government loses every time in any dispute with Brussels. It has been simply a relationship that has never enjoyed mutual respect.

 

Dec 13 2019

Wakey Wakey – Exit Polls Show Landslide Conservative Boris Johnson Win in U.K. Elections – Open Discussion Thread….


Re-Posted from The Conservative Tree House on December 12, 2019 by 

A “landslide”, a complete “wipe-out”, a “massive victory” appears looming for Boris Johnson and the conservative party in the U.K. if exit polls are accurate.

These blowout results guarantee a faster Brexit from the European Union and the leftist labor party in the U.K. has been crushed.  Conservatives look to have picked up 50 seats and Labor has lost 71 seats; the Scottish National Party (SNP) has picked up 20.

The “Remainers” in the U.K. have been decimated, and the voters who want to “Leave” the EU have fueled a massive victory for Boris Johnson.  Liberal heads are blown-out, bigly.

(Via Daily Mail) Boris Johnson hailed his new blue-collar Tory army tonight as it emerged he is on track to secure a staggering landslide in the election battle – with Labour’s ‘red wall’ of Brexit-backing strongholds imploding.

A dramatic exit poll shows voters handing the Tories a massive 368 seats, with Labour languishing on 191 – down 71 on 2017 and the worst performance in modern history.

The bombshell numbers would give a huge Commons majority of 86, the biggest since Margaret Thatcher’s triumph in 1987, and are equivalent to a 10-point lead in the popular vote. (more)

This result also has massive ramifications for a U.S-U.K trade deal; and subsequently major leverage for the U.S. (independently) and a U.S. – U.K. alliance in future trade negotiations against the European Union.