Armstrong Economics Blog/Central Banks
Re-Posted Jul 30, 2019 by Martin Armstrong
When the GAO report came out on the Quantitative Easing by the Federal Reserve, it uncovered a secret $16 trillion feeding tube from the Fed structured as revolving, low-cost loans to any bank (foreign or domestic) teetering on the edge. Amazingly, the audit showed the Fed started the loans in December 2007 – long before the public knew there was a dangerous financial crisis – and it lasted until at least July 2010.
In addition to the publicly known support to Bear Stearns from the New York Fed, the GAO audit revealed that the Federal Reserve provided another $853 billion in secret loans to Bear Stearns; $851 billion from its Primary Dealer Credit Facility and $2 billion from its Term Securities Lending Facility. It wasn’t until May 31, 2008, when JPMorgan Chase closed its deal with Bear Stearns. However, the GAO reported that Bear Stearns “was consistently the largest PDCF borrower until June 2008.” The Fed shows that Bear Stearns continued to receive funds until June 23, 2008.
Then by April 2010, that is when Greece had to ask the IMF for a bailout. What is amazing is how no banker was ever charged for the toxic financial waste they created while trading against their own clients.
Brussels to Build a Berlin Wall in Ireland in the event of a Hard BREXIT
Armstrong Economics Blog/BRITAIN
Re-Posted Jul 30, 2019 by Martin Armstrong
COMMENT: You are quite correct Mr. Armstrong. Prime minister Boris Johnson spoke that “no deal” Brexit looks like a surety and the FTSE 100 skyrocketed and the pound took a beating against ALL mostly traded pairs. Indices (excepting for a few) are going to the moon!!
J.F
REPLY: There are actually suggestions in Brussels I have received a few calls from reliable sources that a hard BREXIT means that Brussels wants to build their version of the Berlin Wall to separate Ireland all for taxes to prevent the free flow of commerce between the Irish people. All of this because of the insanity of their demands on trade. Britain will be so much better off with a hard BREXIT.
In 2018, UK exports to the EU were £289 billion (46% of all UK exports). UK imports from the EU were £345 billion (54% of all UK imports). The share of UK exports accounted for by the EU has generally fallen over time from 55% in 2006 to 43% in 2016, though this increased slightly to 44% in 2017 and 46% in 2018. The numbers are very clear. The UK buys more from the EU than the EU buys from the UK.
A hard BREXIT will allow Britain to enter free trade deals with Asia and the USA which are the more than 50% of its trade balance sheet. The decline in the pound will make British exports even more salable overseas.
Yikes – Two Somali Refugees Arrested for Conspiring to Provide Material Support to ISIS…
July 29, 2019
This is disturbing. Two Somali refugees in the U.S. have been arrested for conspiring to provide material support to ISIS.
(VIA DOJ) John Demers, Assistant Attorney General for National Security, Michael Bailey, the United States Attorney for the District of Arizona, Michael McGarrity, Assistant Director of the FBI’s Counterterrorism Division, and Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office, announced that on July 26, Ahmed Mahad Mohamed and Abdi Yemani Hussein, were arrested for conspiring to provide material support and resources to ISIS, a designated foreign terrorist organization.
According to the criminal complaint, the defendants had been in communication with an FBI undercover employee whom they believed was a supporter of ISIS ideology.
These communications revealed the defendants’ desire to travel overseas in order to fight on behalf of ISIS or to conduct an attack within the United States if they were unable to travel.
Ultimately, the defendants purchased airline tickets to travel to Egypt, with the intention to travel on to Sinai and join ISIS. FBI agents arrested Mohamed and Hussein after they checked in for their flight at the Tucson International Airport in Arizona.
According to court documents, both defendants came to the United States as refugees from Somalia. At the time of their arrest, Mohamed had obtained lawful permanent resident status and Hussein remained a refugee. (read more)
The Greatest Fear for Brussels about BREXIT
Armstrong Economics Blog/BRITAIN
Re-Posted Jul 29, 2019 by Martin Armstrong
The entire feud between Britain and Brussels has been over the border in Ireland between north and south. Brussels fears that there will be a free-flow of goods which will circumvent their taxes. The election of Borris Johnson has created a giant nightmare for Brussels. Trump and Johnson will enter a free trade agreement. A hard BREXIT will be the best thing for Britain for it will be free to cut its own trade dealers with the US, China, Japan, and the rest of the non-EU world.
The restrictions on trade imposed by Brussels are impossible to manage because all 28 members have a say in any trade deal. This is why the deal with the USA took so long to start with and it became unworkable. Trump offered a free trade deal and France was the one screaming the loudest. Germany cannot cut a deal with the USA because of France and neither could Britain.
A hard BREXIT will change the trade landscape in Europe which will put pressure on Brussels. The more they try to punish Britain, the more they will isolate the European economy for pure power.
Are Some Property Funds Being Suspended in London?
Armstrong Economics Blog/Real Estate
Re-Posted Jul 25, 2019 by Martin Armstrong
The collapse in property values in London has created a crisis in property funds. M&G Investments blocked withdrawals from its UK property fund as it seeks to distance itself from the troubled manager. Back on June 3, 2019, the asset manager wrote to clients of the M&G UK Property fund to inform them it had placed a temporary restriction on customers from taking out their money for up to six months. Restrictions were also placed on certain withdrawals from the Prudential UK Property fund, which feeds into the M&G fund affected about 65% of customers in the fund. Both funds were only available for long-term institutional investors such as pension funds and the total under management was around £636m in assets while the Prudential Fund had about £50m.
The real estate funds are going to be the worst since they tend to be illiquid.
Black Vests Storm Paris
Armstrong Economics Blog/France
Re-Posted Jul 24, 2019 by Martin Armstrong
The Black Vests are rising up in France. This group is composed of undocumented Africans who are in France and demanding to stay. Hundreds of these undocumented migrants stormed the Panthéon in Paris and demanded the right to remain in France. They are primarily from West Africa and managed to get in pretending to be refugees from Syria. They call themselves the “black vests,” which is a reference to the yellow vest protest movement that spread through much of France earlier this year.
Boris Johnson Wins Britain Right on Target
Armstrong Economics Blog/BRITAIN
Re-Posted Jul 24, 2019 by Martin Armstrong
Boris Johnson has been elected as the new Prime Minister of Britain and he has promised to take Britain out of the European Union “come what may.” Jeremy Corbyn says Labour will table a motion of no confidence, designed to force Boris Johnson from office “at a time of (their) choosing,” adding “it will be an interesting surprise for all of you.” That is the main concern that if Labor gets a hold of the government, Britain will see a massive exit of capital and Corbyn will single handedly destroy the British economy, which has been the concern behind in the decline in the pound sterling.
Boris Johnson beat Jeremy Hunt in the battle for the leadership of Britain’s governing Conservative Party winning 66% of the vote. Although the Conservatives’ working majority in Parliament is very small, it appears to be enough to ensure that Mr. Johnson will succeed Mrs. May as prime minister and Labor will not be able to stop that at this point in time.
What is very interesting is that our computer gave us two targets — May and July 2019. Prime Minister Theresa May said she would step down as leader of the Conservative Party and then as prime minister after repeatedly failing to get her Brexit plan through Parliament on May 24th, 2019. The next target was July, and here we have Boris Johnson elected. Now we are looking at October and December going into year-end.
Europe’s Debt: America’s Crisis – Full Video
Boris Johnson Wins Party Vote Becomes Newest British Prime Minister…
Boris Johnson has succeeded in beating his nearest rival Jeremy Hunt for leadership of the conservative party in the U.K. thereby becoming the next Prime Minister. One of the priority challenges for Prime Minister Johnson will be navigating a successful Brexit.
A full three years after the British electorate voted to leave the European Union, the elites in Britain have continued to stymie the referendum in their effort to remain attached to the communal values of the collective society. Thus gave rapid rise, recently, to the Brexit Party as a national force led by Nigel Farage. It’s the UK version of ‘deplorables’ vs ‘elites’.
The British Parliament is filled with elected members who stand in opposition to the majority of the British citizenry. It is amid this professionally political and elitist disconnect that Boris Johnson must now attempt to deliver Brexit, while the purchased politicians of both institutional parties will oppose his effort. [Sound familiar?]
London (AFP) – Boris Johnson won the race to become Britain’s next prime minister on Tuesday, heading straight into a confrontation over Brexit with Brussels and parliament, as well as a tense diplomatic stand-off with Iran.
The former London mayor easily beat his rival, Foreign Secretary Jeremy Hunt, in a vote of grassroots members of the governing Conservative Party.
He is expected to be confirmed as prime minister on Wednesday when Theresa May formally tenders her resignation to Queen Elizabeth II.
US President Donald Trump was the first world leader to offer his congratulations, saying: “He will be great!”
It is a triumph for a man who has always coveted the premiership. But Johnson, known for his jokes and bluster, is taking over at a time of immense political upheaval.
Three years after the referendum vote to leave the European Union, Britain remains a member amid continued wrangling in a divided parliament on how to proceed.
– ‘We’ll get Brexit done’ –
Johnson led the referendum “Leave” campaign and — after May delayed Brexit twice — insists the latest deadline must be met, with or without a divorce agreement with the EU.
“We’re going to get Brexit done on October 31,” he declared in a speech to party members in London, after winning 66 percent of almost 140,000 votes cast. (read more)
Here is Johnson’s victory speech. [Prompted, just hit play]
France & the New Digital Tax
Armstrong Economics Blog/The Hunt for Taxes
Re-Posted Jul 22, 2019 by Martin Armstrong
The French GAFA tax in an acronym for Google, Apple, Facebook and Amazon which the French government has just passed. They are imposing a 3% tax on all business in France. The US has promised retaliation. This is part of the entire problem the world faces with trade. A lot of people talk about trade wars, but they live in the past. There is something far more serious at stake and that is the digital world and how governments are hungry for taxes to the point that they are threatening the viability of the world economy going forward.
Centinel2012 