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Things That Make You Go Hmmm...

Vision Quest

July 7, 2014

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Vision Quest








“In a time of deceit, telling the truth is a revolutionary act.”


THINGS THAT MAKE YOU GO HMMM... ....................................................3

The Lie That Started the First World War .........................................................15

Erste Predict Record Loss As Romania Adds to Hungary Woes ..................................16

[Chinese] Banks Start Using New Loan-to-Deposit Ratio on July 1 .............................18

The 70-Year Itch .......................................................................................20

Is Christine Lagarde the Most Dangerous Woman in the World? ................................21

Why Report to U.S. Congress Issues Warning about Chinese Internet Firms ..................23

Trading Blows ..........................................................................................25

Spain Says to Charge Tax of 0.03 Percent on Bank Deposits ....................................26

We Must End This Addiction to Debt as the Engine of Growth ..................................27

CHARTS THAT MAKE YOU GO HMMM... ..................................................30

WORDS THAT MAKE YOU GO HMMM... ...................................................33

AND FINALLY... .............................................................................34

Things That Make You Go Hmmm...

It started out as something of a pilgrimage... but we’ll get to that a little later.


One of the best things about writing Things That Make You Go Hmmm... is the number of incredibly bright people all around the world that I get to interact with on a regular basis.

The world is full of smart, engaged, experienced people from all walks of life — all of whom have stories to tell and wisdom to impart.

Perhaps nowhere is this more evident than in the world of finance.

Finance is something that touches the lives of literally every person on the planet in some way, shape, or form; and over the past few years, as the world has teetered on the brink of a meltdown — the like of which we haven’t seen in three generations — only to seemingly recover again in remarkably short order, the subject of finance has become more important than ever before, even as comprehending its myriad moving parts has become more troublesome.

As we’ve all tried to navigate our way through the post-GFC landscape, we’ve had to come to terms with a completely new world and to deal with some incredibly powerful outside forces which have influenced the marketplace in ways we could barely have conceived of just six short years ago.

Of course, there were many who saw 2008 coming a long way off and who profited handsomely from the events that transpired around the collapse of Lehman Bros. They took the actions that they saw as imperative — no matter how many people told them they were wrong.

Many of those same people have navigated the post-Lehman, central bank-led New World with equal skill.

But here’s the thing:

Hardly anybody has a clue who most of those people are.

In some cases, that’s just the way the folks in question want it to be; but many of these people are only too willing to share their wisdom should you (a) be able to find them and (b) shape your questions in such a way as to engage them.

Now, with that as background, let’s get back to that pilgrimage I mentioned at the beginning.

About three years ago, somebody sent me a piece of writing he thought I would like, with the strict warning that I wasn’t to forward it to anybody, quote from it, or make any reference to it in any way in my own writing. Period.

My friend was quite forceful about this and told me that he had never forwarded anything written by this particular author before, because the material was available only to a very small group of people, was extremely expensive to subscribe to, and the author was (quite rightly) fiercely protective of his work.

The only reason he had sent it to me was that it contained an article on a subject I had recently written about, and the author’s thoughts were very well-aligned with my own.

Obviously, my interest was piqued, and so I sat down to read the 60-odd-page, chart-filled literary magical mystery tour I had been sent.

It was one of the best things I’d ever read.

There was something about the way the author wrote — colloquially, but clearly, with great understanding of his subject — that enabled him to convey complex concepts effectively, and the quality and depth of his thinking resonated strongly with me.

I read the piece a few times and then began to wonder who this guy was — and, more importantly to me at that point, why I had never heard of him before.

My research into the mysterious author revealed just enough for me to understand that I SHOULD have heard of him, and the question as to why I was unfamiliar with his work turned 180 degrees — I became fascinated with the fact that our paths HADN’T crossed up to this point.

Interestingly, over the next few months I began hearing his name more often, and as I traveled around the world I occasionally happened to see copies of his work sitting on the odd desk — and it was always on the desks of seriously smart, highly engaged people. So, whenever I could, I snuck a look at his writing to see where his thought process was taking him.

Maybe it was my imagination, or maybe it was because I was now looking for it, but each time I heard his name or came across his work, I had the feeling that I’d stumbled upon some kind of bizarre, exclusive club into which I hadn’t been invited. And that feeling grew.

All I knew about the mysterious stranger was that he lived in a tiny fishing village on the Valencian Coast of Spain, that he had retired at a young age from running one of the world’s largest hedge funds (at the time, anyway), and that he was a truly brilliant and original thinker.

So I emailed him.

I had been invited to speak at a small gathering in Spain; and because my travels rarely included Europe, I figured I should at least make the effort to meet him while I was so close, and so I offered to drive out to his village and buy him dinner.

To my surprise and delight, he responded the same day, said he was familiar with my own writing, and very graciously accepted my offer to feed him.

A month later I found myself sitting at a beachside bar overlooking the Mediterranean Sea, having dinner with Raoul Pal and his colleague Remi Tétot.


For the past ten years, Raoul has been writing and publishing The Global Macro Investor from his home in the picturesque town of Javea. GMI is utterly brilliant.

As the evening wore on, the conversation flowed easily among the three of us as we realized that we all saw the world in the same way. Not only that, but we had some very definite ideas about how financial information reaches its audience — about the quality of that information and also about the platforms used to disseminate it.

That conversation, which continued into the early morning hours, was the genesis of a project I touched upon briefly in last week’s Things That Make You Go Hmmm...:

Real Vision Television.


Following last week’s mention of the project in these pages, I was inundated with emails asking for more details about what we’re doing; so even though we are several weeks away from launching, this week I thought I’d explain in more depth how Real Vision Television came to be, what it aims to achieve, who is involved in it, and how we plan to deliver it.

Let’s begin at the beginning.

Raoul and I shared a strong belief that the current state of financial television is abject.


Stifled by the need to fill 24 hours of programming and sell advertising space, the likes of CNBC have become less a source of insightful financial commentary and more an attempt to sell a vision of a financial utopia, aided and abetted by a seemingly never-ending stream of CEOs — who, naturally, explain why their company is doing brilliantly despite the weak economy — and commentators who have a natural bias towards the bullish and can’t help but shout down anyone who might dare offer a bearish vision of the status quo. (Yes, Maria, Charlie & Jim, I’m talking about you.)

Many of the guests who appear on the station simply don’t offer any REAL value to the viewer, and tuning into the ones who do is an arduous task which requires watching an awful lot of programming that is of no use.

Consequently, many people simply watch the screen with the volume muted until they see someone they want to hear from.

CNBC has, essentially, become a very primitive version of on-demand financial television — but with an awful lot of content definitely NOT in demand. To us, turning the volume up every now and then is not our idea of “on-demand.”

Waking up to these facts, viewers have been switching off in their droves — a phenomenon which runs counter to a well-established historical trend that normally sees an acceleration in viewership as euphoria drives markets to new highs:

(Zerohedge): While those in the financial industry who are forced to make profits by trading other people’s money (note: never their own) enjoy CNBC for the comedic content and the endless barrage of humorous propaganda (while getting their actionable info from Bloomberg and sellside soft-dollar services), the retail investor has traditionally relied on the Comcast channel for news updates, biased as they may be (remember: the Fed, ECB and BOJ are only micromanaging the global economy and injecting trillions because all is swell and self-sustainingly recovering and stuff) and trading recommendations.

At least that’s how it used to work. However, when one looks at the most recent CNBC ratings, something odd emerges: either the “retail investor” has found an alternative media outlet for getting their financial information during the day (or simply is tired of being lied to about some magical recovery that only affects 1% of the population) or said retail investor simply no longer exists despite all the endless propaganda to the contrary spewed by CNBC itself.


The reason? According to the latest Nielsen Media Research data, in the second quarter of 2014, CNBC business day viewership for all viewers just dropped to 162,000 — a new (and depressing for Comcast) low, on par with Q2 of 1997!

What Raoul and I realized was that, between us, we knew an extraordinary number of people who had brilliant insights into many different corners of the financial world but who, in many cases, remained completely unknown outside a handful of people in the investment industry.

These people were research analysts, fund managers, strategists, newsletter writers, technicians, traders, and everything in between; and, we felt, they would be happy to share their knowledge with an audience if we gave them one that was truly interested in what they had to say.

We figured there was an incredible amount of value locked away in the brains of the smartest financial minds we knew and that, somehow, right at the point when their wisdom was most needed by a world rattled by 2008 and still struggling to come to terms with the new landscape created and controlled by the central banks, the mainstream financial media had failed its audience.

So, rather than sit and complain, we decided right then and there (at 4 a.m. on Raoul’s deck) to try to do something about it.


Now, I’ll be the first to admit that in my life there have been an awful lot of things I have decided to do something about at 4 a.m.; but, unlike my brilliant idea for a phone which required a negative breath-test after midnight to unlock the number of a wife or girlfriend (the folks at Breathometer are missing a trick, if you ask me), or my masterful strategies which absolutely guaranteed England would win the World Cups of 1998, 2002, and 2010, this one remained at the front of my mind the next day.

Raoul’s, too.

So we drew up a long list of the smartest people we knew, and we began contacting them with a very simple proposition:

If we built an on-demand internet-based TV channel which concentrated solely on delivering financial insights to an audience made up exclusively of people seeking to educate themselves about the financial world and to make decisions that will improve their financial future, would they want to be a part of it?

The answer was an unequivocal “Yes.”

From household names to people who, though brilliant, could walk unrecognized across their own front yard, everyone we spoke to was eager to be involved and had their own ideas for both the kind of content we should produce and friends of their own who they thought would be of tremendous value to the audience.

Despite the terrible reputation the financial industry has cultivated in recent years, in our experience it also contains some of the most intelligent, engaging, thoughtful, and original people you’ll find anywhere on the planet.

Those are the people we want to bring to a wider audience — an audience that needs them now more than ever before.

However, we both realized that putting a bunch of video content on YouTube in another cookie-cutter platform was not going to do it. We instinctively knew that the platform we needed in order to be able to deliver our message effectively didn’t yet exist.

We needed a completely new and spectacular way to deliver the content we would create, a medium which would instantly differentiate the look and feel of our content from existing channels in the same way that its quality set it apart.

That was where Remi came in.

Remi is the rarest of creatures — a very likable Frenchman (I’m just kidding, Frenchies — je vous aime), with a razor-sharp brain, a tireless work ethic (I know, right?); and he just happens to be an accomplished web and graphic designer; so we set him the task of marshaling the creation of what we knew would be crucial to delivering the kind of viewer experience required for Real Vision Television to succeed: the world’s best video player. From scratch.

And, amazingly, he did it — but we’ll get to that in a minute.


The final piece of the puzzle was finding someone who could give this crazy idea of ours a form, a shape, and an identity. None of us had any experience in that world, but fortunately we knew a man who did, and that man was Damian Horner.

Damian, a slight 48-year-old man with a regional English accent and a collection of achingly trendy knitwear, is a multi-award-winning advertising executive who has been exhibited in the Tate Modern Gallery in London and named to Campaign magazine’s A-list of the 100 most influential people in media.

More importantly, he was a friend.

More importantly still, he would work for food.

The next eighteen months passed in a blur of late-night Skype sessions, online strategy meetings, cajoling, begging, and frequent returns to a well-worn drawing board; but slowly our vision began to take shape.

As I explained, that vision required a totally new and best-in-class video platform, and Remi delivered it.

We vizualized a totally new experience for our subscribers, and that meant reinventing television on the internet — creating a full-screen, high-definition platform that looked gorgeous on everything from a full-size smart TV to a tablet to a smartphone and that gave anybody using it the feeling that this was something different.

We wanted viewers to forget they were using the internet within moments of entering the world of Real Vision Television, so they could focus on the quality of the content. We feel we have reached that milestone with our video player, so here is your first look at Real Vision Television:


The video player is fully functional and performs beautifully. It defaults to full-screen, high-definition and provides an immersive experience from start to finish.

Content is organized in categories and is searchable by keywords, or you can scroll through the videos to see what takes your fancy.

Viewers can scrub through videos, jump backwards and forwards in 15-second increments, add and annotate bookmarks in order to mark specific soundbites they want to return to, and also add comments in a self-policing community which will weed out trolling and impose timeouts on anyone guilty of abusive posting.

The timer for each video counts backwards, and the control overlay disappears after a couple of seconds but reappears at the click of a mouse.


We have also designed a revolutionary “Heat Map,” which functions like a video word cloud, enabling viewers to instantaneously identify the content currently most in demand around the world, to ensure they stay informed at all times.


The Heat Map puts the most popular video at the front of a stack which can be scrolled through to find the videos a subscriber most wants to watch, and videos can be saved to a watchlist to view later on mobile devices, enabling viewers to watch the finest financial minds in the world at a time that suits them best.

Despite the amount of time and resources that have gone into developing the Real Vision Television platform, it is the content that will determine its value. Based on the feedback we have had so far from the contributors we have approached and from the guinea pigs viewers we have asked to watch early previews, we are really excited about what we will unleash upon the world in a few weeks.

Real Vision will have presentations, trading tips, market analysis, technical analysis, interviews with some of the very brightest financial minds you’ve never heard of (as well as many you have), as well as special one-off programs looking at the issues uppermost in the collective conscious (China’s shadow-banking sector, Abenomics, and the Taper being three already in progress).

We will also have special insights offered by people who touch the world of finance only tangentially but who have so much to offer in terms of understanding the full mosaic — high-end art dealers who can explain what is REALLY going on with those infamous Russian and Chinese billionaires supposedly snapping up every rare piece of art that hits the auction blocks; real estate professionals with real information to counter the apocryphal stories about billions of dollars of living space lying empty at the heart of the world’s richest cities.


We will offer interviews with business authors, strategists, economists, bankers, brokers, and independent thinkers from the four corners of the globe.

We will also focus heavily on the next generation, with educational material from some of the world’s most legendary investors aimed specifically at economics students in universities all around the world, for whom the failures of traditional economic theory are an enormous (and growing) problem.

And here’s the important part.

All of this information will come to you unfiltered, unbiased, and unadulterated.

Raoul and I know there is a real need to bring truth back to finance and to bring finance back to an audience that needs a dose of reality now more than ever before.

In short, Real Vision is a revolution.

In an age of ever more pervasive groupthink, Real Vision is about freedom of thought, freedom of expression, and the freedom to entertain and weigh the merits of ideas you won’t find anywhere else. Only by revolutionizing the way you get your financial information can you hope to break free from the chains of mainstream media reporting and understand the new world within which every financial decision now has to be made.

Our goal is to better educate our viewers by stretching their minds and giving them the ability to broaden their own individual decision-making framework.

We want to make sure people understand the frailties of governments and central banks — indeed, the entire monetary system itself — in a world where those institutions are held up as either infallible or immutable. We want to help people understand financial opportunities in parts of the world and areas of finance where traditional channels won’t take their viewers because they are “too niche,” and we want to create a platform for important viewpoints which often get drowned out.


We want to give our viewers the ability to decide what information is important to them — not to have that choice made for them by programming directors with only a rudimentary understanding of the financial landscape.

So that’s Real Vision Television — but where do you come in?

Well, we are looking for people who want truth in their financial information and who want to come on this journey with us. Raoul, Remi, Damian, and I feel that this is just the start of an important revolution, and we want you to be a part of it alongside us.

Real Vision Television will be a subscription-based service; and when we launch, that subscription price will be set at just $200 per year for our initial subscribers. That subscription fee will give our viewers access to a collection of brilliant financial minds and the ability to hear their thoughts in a way never before possible — free of any filter whatsoever.

As our content library continues to grow, so will the value of a subscription; but based on what we have created so far with those who have already begun working with us, it’s clear that Real Vision will be immensely valuable, right from Launch Day.

If you are someone who is curious about and who cares about finance, and if you want to make better decisions about your financial future, then Real Vision Television is for you.

If you find yourself distrusting the financial information you are receiving from the media or the global banking community, then Real Vision Television is for you.

If you believe the future could take us down unexplored decentralized avenues — think bitcoin or a radically transformed gold market — which traditional media are reluctant to explore, you can count on Real Vision to give you the information and analysis you need to be able decide for yourself. No more being forced to rely on biased opinions from people who champion the status quo and refuse to open their minds enough to do the sometimes difficult job of understanding new concepts. Real Vision will bring the thought leaders in these areas to you and let you decide.

Above all, if you want freedom of information, freedom of thought, freedom of opinion, and freedom of expression, then join us on this journey.

Right now, there’s nothing for you to do but sign up and register your interest in Real Vision Television at Doing so won’t cost you a penny; and once you are registered, you will be kept in touch with all the developments as we move closer to our launch in several weeks’ time.

In the meantime, we will be releasing a series of short video clips exclusively to those who have registered, to give you a feel for what Real Vision is all about; so please sign up to make sure you are amongst the first to experience Real Vision Television.

Three years ago, this journey began with my being exposed, quite by chance, to some of the most brilliant financial insights I’d ever seen from someone I’d never heard of but who is now, I’m delighted to say, my business partner. Now, with the launch of Real Vision Television, Raoul, Remi, Damian and I want to make sure as many of you as possible are given the chance to make similar journeys, by bringing you the very best financial minds in the world through the world’s best video platform.

Get Real.


OK ... so after that impassioned call to arms, it’s time to settle back down again and outline what you’ll find in the remaining pages of this week’s Things That Make You Go Hmmm....

In keeping with the theme of this week’s edition, we begin, on the anniversary of WWI, with a look at the big media lie that began the war to end all wars. From there we stay in Austria to hear about the travails of Erste Bank, which this week unveiled a little problem to the world, in the shape of a potential $2 billion loss.

Meanwhile, Chinese banks begin to use new loan-to-deposit ratios; Chinese internet companies feature heavily in a US Congressional report; and Christine Lagarde is flagged as the most dangerous woman in the world by Martin Armstrong.

On the 70th anniversary of Bretton Woods, we take a look back at the lessons being ignored today, whilst two more current agreements — TTIP & TPP — hide potentially huge problems for the world.

Here in Spain, the government has just announced the outright theft of savings on a grand scale a retroactive tax on deposits.

Jeremy Warner explains why the West’s addiction to debt MUST stop, and Jesse Colombo sees a disaster coming — and has the charts to prove it.

Speaking of charts, Sober Look has some good ones on the scale of Japan’s QE experiment, and Zerohedge shows just why the Great Rotation may have ended almost before it began.

Paul Hodges on the Baby Boomers, Chris Martenson on the exponential function, and yours truly in conversation with Eric King on gold round things up for another week.

For those amongst you who may find themselves in San Antonio’s Hill Country in mid-September, I will be speaking at the Casey Fall Summit, which runs from September 19-21, alongside a stellar group of speakers including Jim Rickards, Doug Casey, Mike Shedlock, and my good friend David Tice, to name but a few. Early-bird pricing ($300 discount) ends on July 15th. If you are in the area, please drop by and say hi.

All that remains is for me to wish you adios from Spain!

Until Next Time...


The lie that started the First World War

This day 100 years ago dawned memorably bright over Sarajevo. After days of stormy rain, Sunday June 28,1914 began cloudless as Austria-Hungary, the imperial power that held dominion over the small Balkan province of Bosnia, prepared for a show of ostentatious pageantry in its capital.

Loyal citizens came out in their thousands, lining the route into the city centre that was to be used for a rare official visit by a top member of the Habsburg royal house, Archduke Franz Ferdinand, second only in imperial protocol to the venerable, mutton-chopped emperor himself, Franz Joseph. Witnesses remember the morning sun being fierce as the crowds gathered, eight deep in places, many of them waving the yellow imperial standard of Austria-Hungary with its double-headed black eagle, some shouting ‘’Long Live the Archduke’’ as the Gräf & Stift limousine drove sedately by. An imperial 21-gun salute, from the fortress high in the hills that ring Sarajevo, sent out puffs of smoke, vivid white against the blue summer sky.

But the crowd was seeded with six would-be assassins united in their loathing of Austria-Hungary. By the time the sun set, what happened in Sarajevo would plunge the world into the darkness of global war for the first time.

The details were well recorded: how the first attacker lost his nerve as the cortege passed, how the next attacker threw a grenade that struck the limousine but did not harm the Archduke, how the royal party nevertheless continued with the visit, how three would-be assassins melted away into the crowd and how one, a 19-year-old peasant, stood his ground.

Gavrilo Princip was his name and he took up station at the street corner where the royal vehicle was scheduled to turn right, according to the route flagged up for days in local newspapers, off the wide riverside boulevard that gives Sarajevo its spine, before taking the Archduke to visit a museum.

What might be called the devil’s luck then enters the story as the decision had been taken after the grenade attack for the Archduke’s car not to turn right but to continue down the boulevard. All the senior members of the royal party were informed. But nobody told the driver.

When the driver made the turn, an imperial officer on board with the Archduke and his wife, Sophie ordered: ‘’Stop.’’ The driver braked immediately, presenting the assassin with his targets right in front of him in a now stationary car, the canvas roof folded helpfully back because of the sunny conditions.

Princip needed to take only half a step forward before he aimed his 9mm, semi-automatic Browning pistol and fired what amounted to the starting gun for modern history. The killing of the Archduke and his wife was the trigger for the First World War. What happened next is a bone well worried by historians. But the details of who Princip was, his motivation, his actions and his support network have been mired ever since in political bias, ethnic rivalry and sloppy homework.

We have been told that: Princip jumped on the running board of the Archduke’s limousine to take his shot, the Archduke’s wife was pregnant when she died, the shooting happened on the anniversary of their marriage, the car did not have a reverse gear, the Archduke caught the grenade thrown earlier and tossed it away safely, and Princip stopped to eat a last sandwich at the café on the corner before emerging to take his shot. It’s all myth....

*** UK Daily Telegraph / link

Erste Predict Record Loss as Romania Adds to Hungary Woes

Erste Group Bank AG (EBS), the Austrian bank earning most of its income in eastern Europe, plunged as a bad-debt clean-up forced by Romanian regulators and fee refunds in Hungary will cause a record loss this year.

Erste, which owns the second-largest Hungarian and the biggest Romanian bank, will post as much as a 1.6 billion-euro ($2.2 billion) loss this year as bad-loan provisions will rise 40 percent more than forecast earlier and trigger additional writedowns, it said in a statement yesterday. The shares fell 16 percent to 19.52 euros in Vienna as of 3:37 p.m., the lowest level in almost a year.

“This is a clearly bad surprise as it comes in addition to the already ‘badly surprising’ warning issued by the group at the beginning of this year,” Natixis Securities SAS analyst Steven Gould said in a note to clients. “These announcements hurt the management’s credibility going forward.”

Erste, the third-biggest bank in eastern Europe after UniCredit SpA (UCG) and Raiffeisen Bank International AG (RBI), invested in the former communist bloc in the past decade, seeking higher growth and profit than available in its domestic market. That bet turned sour in Hungary and Romania after 2009 when the economic downturn caused borrowers to miss repayments.

The provisions are caused by new rules due to be approved by Parliament in Hungary today, forcing banks to refund “unfair” loan fees, and by the Romanian central bank’s push for faster bad-debt reduction amid the European Central Bank’s bank health check, Vienna-based Erste said. Writedowns on goodwill and deferred tax assets, triggered by the loan-loss provisions, may reach as much as 1 billion euros.

“By taking these measures, we have done everything in our power to avoid one-off effects from 2015 onward,” Chief Executive Officer Andreas Treichl said in the statement. “We are convinced that these measures will also help us pass the asset-quality review and stress test comfortably.”

The loss won’t hit Erste’s regulatory capital to the full extent, and the bank’s common equity Tier 1 ratio will reach about 10 percent by the end of the year without raising fresh capital, Erste said. That’s because goodwill, brand value and other intangible assets of its Romanian unit that Erste is writing down aren’t part of the regulatory capital.

The bank expects a return to profit and a return on tangible equity of 8 percent to 10 percent next year, Erste said. This equals net income of 700 million euros to 900 million euros, according to Francesca Tondi, an analyst at Morgan Stanley. The new guidance will “result in near-term pressure for the stock and potentially cap its upside for some time,” she said in a note.

Hungary contributed to Erste’s loss with a new law forcing banks to repay some loan costs to customers. The law, approved by Parliament in Budapest today, will require banks to refund certain expenses on as much as 6.5 trillion forint ($28 billion) of loans going back as far as 10 years.

Hungary’s mostly western-owned banks have lost billions of euros since 2008 because of foreign-currency mortgages and loans they gave to households. The Hungarian forint’s plunge led to soaring repayments and defaults on mostly Swiss-franc denominated credit, which became widespread last decade as clients sought lower interest rates.

The central bank estimates the law will cost banks as much as $4 billion, dwarfing losses of about $1.7 billion that Prime Minister Viktor Orban imposed three years ago. Erste trails OTP Bank Nyrt in total assets in the country neighboring Austria, where KBC Groep NV (KBC), Bayerische Landesbank, Raiffeisen and Intesa Sanpaolo are also among the top 10 lenders.

“The market is severely complacent and arguably underestimating some of the disruptive impact the proposed path will have on the banks in the short to medium run,” said Peter Attard Montalto, a London-based economist at Nomura International Plc.

Provisions will soar by even more in Romania, the Black Sea country of 20 million where Erste bought Banca Comerciala Romana SA for 3.75 billion euros in 2005, six times its book value at the time. They are caused by the central bank’s pressure on banks to clean up their balance sheets as part of the ECB’s bank health check, Erste said.

The Romanian measures will cause bad-debt charges to fall to 1 percent to 1.5 percent of gross loans next year, from more than 4 percent in the first quarter. The stock of bad loans will decline by 800 million euros, or 25 percent, this year.

Treichl, the longest-serving CEO of a major European bank, told Austrian radio in an interview that he didn’t rue having invested in Hungary and Romania and thought he was still the right head for the company.

“Yes, we’re having problems in some countries,” he told the Oe1 radio station. “But there will be times again when our shareholders will be glad that we’re in Hungary and Romania.”

*** bloomberg / link

[Chinese] Banks Start Using New Loan-To-Deposit Ratio on July 1

Starting July 1 banks in China are using a new method of calculating the loan-to-deposit ratio, a change that the regulator and analysts say will allow for more loans to be extended.

The China Banking Regulatory Commission (CBRC) announced on June 30 the new set of rules for figuring the ratio, which is capped by law at 75 percent, meaning that banks cannot lend out more than three-quarters of the deposits they accept.

A CBRC official has said the regulator will consider adjusting the way the ratio is calculated to allow for more lending. That includes broadening the range of deposits to include “relatively stable” funds.

The new rules differ from the old ones in both loan and deposit calculations, the announcement shows.

Six types of loans can now be excluded from the formula. They include loans linked to the central bank’s re-lending program and proceeds from the sales of a special financial bond that raises money to support small and micro businesses. Loans made using money raised from bonds that investors cannot redeem for at least one year are also excluded under the new rules.

These loans all have clear and stable sources of funding and thus do not need to be matched with general deposits, the regulator said.

Two sources of funds have been added to the deposits side. One is the planned large-sum certificates of deposits (CDs) that can be issued to both companies and individuals. A foreign-invested bank can also count the amount of yuan deposits made by its foreign parent bank as long as the deposit’s maturity is longer than one year.

Moreover, the 75-percent cap on the ratio now applies to only yuan-denominated loans and deposits. Previously, foreign loans and deposits were also included.

This means banks will not face penalties even when their forex and yuan loan-to-deposit ratio exceeds 75 percent, experts say.

Quantitative tests have shown that the changes can allow banks to have more liquidity for making loans to fuel economic growth, a CBRC official with knowledge of the matter said.

The regulator has said the banking industry’s average loan-to-deposit ratio as of March 31 was below 70 percent, but the figures for some bigger banks were much higher.

The new calculation rules can help ease the pressure on banks of meeting the requirement, and would also encourage a lender to issue more bonds and CDs, which are relatively stable and conducive to stabilizing liquidity risk, a banker familiar with the situation said.

Excluding foreign currency-denominated loans will effectively reduce the current level of the ratio by about 2.5 percentage points, E Yongjian, an analyst with the Bank of Communications’ financial research center, said based on a rough calculation using data from the central bank.

The data shows that foreign exchange deposits and loans accounted for about 3 and 6 percent of the total, and on average, banks lent out 50 percent more forex than they took in and the rest had to be made up by converting yuan into the foreign currency, he said.

Experts have discussed what types of funds can be used to calculate deposits in the ratio. Before the new rules set in, it equated to the sum of a bank’s outstanding loans, including general loans, trade finance loans and discounted bills, divided by the bank’s deposits, including individual and corporate deposits and wealth management products whose repayments are guaranteed by the bank.

Deposits from financial institutions except insurance companies were not counted toward the balance of deposits....

*** caixin / link

The 70-year itch

AMERICA learned the benefits of economic co-operation the hard way. Its failure to create institutions to help steer the world economy after the first world war exacerbated the Great Depression and paved the way for the next conflagration.

That is why, at a small resort in New Hampshire as the second world war was drawing to a close, America and its allies sketched out a rough management plan for the world economy and created some institutions to safeguard it (see Buttonwood). Despite some flaws, the Bretton Woods agreements, signed 70 years ago this month, helped usher in a long and relatively peaceful period of economic growth.

Yet today’s pre-eminent powers seem to have forgotten this lesson. America and Europe have failed to strengthen and reform the offspring of Bretton Woods, the IMF and the World Bank; they have been sluggish in providing a bigger role for China in these institutions (it still has less voting power than the Benelux countries). Meanwhile, China, like America a century ago, flexes its muscles close to home but outsources global leadership to others. The combination could lead to another dangerous, rudderless spell for the world economy.

Parts of the Bretton Woods system have proved more durable than others: its capital controls and fixed exchange rates had largely gone by the end of the 1970s. But the whole edifice now looks rickety. Countries moan over destabilising capital flows while global trade talks remain in near-stasis. Barack Obama sensibly promoted a plan to give the IMF more resources and increase the clout of fast-growing developing countries within it. Yet Congress now refuses to support the agreed reforms. Meanwhile both America and Europe have pursued ambitious trade deals with each other and non-Chinese Asia. And again Congress has in effect blocked those efforts too, before the deals have even been struck.

China has taken the hint. Its interest in the World Bank and IMF, always half-hearted, is waning. Instead, China’s leaders are working to build a separate system. At a summit later this month the leaders of Brazil, Russia, India, China and South Africa are expected to agree to create a $50 billion “BRICS” development bank and consider a BRICS contingency fund modelled on the IMF. China also plans to create an Asian infrastructure bank that will rival the Asian Development Bank, a regional lender dominated by Japan (see article).

Like the West’s regional trade deals, China’s institution-building looks benign in isolation. Why not invest in underdeveloped countries? Yet its flurry of initiatives, which conspicuously excludes rich countries, may signal a strategic shift. Rather than take more responsibility within the existing system, China seems to be creating a rival one.

If John Maynard Keynes were alive, he would sigh not just at the risks in all this economic nationalism but also the huge missed opportunity. Freer trade through multilateral deals would help the world economy and reduce the allure of mercantilist policies that invite retaliation.

Or imagine what would happen if the West and China worked together to liberalise the latter’s capital account: China’s financial markets would become less distorted, while the emergence of the yuan as a global reserve currency would ease Western fears about their currencies’ overvaluation. Perhaps it is time to send another group of dignitaries to New Hampshire.

*** economist / link

Is Christine Lagarde The Most Dangerous Woman In The World?

I have gone on record that the most dangerous organization is the now French led IMF with Christine Lagarde at the helm, which has presented a concept report that debt cuts for over-indebted states are uncompromising and are to be performed more effectively in the future by defaulting on retirement accounts held in life insurance, mutual funds and other types of pension schemes, or arbitrarily extending debt perpetually so you cannot redeem. Yes you read correctly, the new IMF paper is described in great detail exactly how to now allow the private sector, which has invested in government bonds, to be expropriated to pay for the national debts of the socialist governments.

I have been warning that there is an idea that has been running around behind the curtain that the national debt of the USA could be settled by usurping all pension funds in the country. Here is a remarkable blueprint that throws all previous considerations concerning the purchase of government bonds over the cliff. The IMF working paper from December 2013 states boldly:

“The distinction between external debt and domestic debt can be quite important. Domestic debt issued in domestic currency typically offers a far wider range of partial default options than does foreign currency—denominated external debt. Financial repression has already been mentioned; governments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand.”

id/Page 8 (IMF-Sovereign-Debt-Crisis)

Already in October 2013, the International Monetary Fund (IMF), suggested the Euro Crisis should be handled by raising taxes. The IMF lobbied for a property tax in Europe that should be imposed where there are no such taxes. The IMF has advocated for a general “debt tax” in the amount of 10 percent for each household in the Eurozone, which also has only modest savings.

People are blind. They think this is authorization to go get the rich. They are going after everyone for the “rich” are tiny players in the game. People do not want to hear that. They want to think the rich can pay the bills for everyone else. That is not practical and even Julius Caesar recognized that they may be a small group, but they are the engine of the economy that creates jobs. It would have been popular for him to wipe out all the rich who he was against.

But in the end, he had to solve the debt crisis by simply retroactively attribut[ing] all interest to capital in order to solve the debt crisis that led to the first civil war.

There is no discussion whatsoever of reforming the system. They are merely planning to default on savers expropriating their savings, but continue to borrow forever. Nobody is even bothering to look at the structure that simply cannot work.

The money people have saved the IMF maintains should be used for debt service by sheer force. To reduce the enormous national debt, they maintain that government has the right to directly usurp the savings of citizens. Whether saving money, securities or real estate, about ten percent could be expropriated. This is the IMF view.

Because the government debt of the euro countries has increased a total of well over 90 percent of gross domestic product, they suggest that the people should sacrifice their savings for the benefit of the state. Socialism is no longer to help the poor against the rich, but to help the government against the people. The definition has changed.

In January 2014, the Bundesbank joined the IMF project focusing on a “wealth tax”. In its monthly report they had announced: “In the exceptional situation of an imminent state bankruptcy a one-time capital levy could but cheaper cut than the then still relevant options” if higher taxes or drastic limitations of government spending did not meet or could not be implemented.

In the latest June 2014 working paper of the IMF, they have set forth yet another scheme — extending maturity. So you bought a 2 year note? Well, the IMF possible solution would be to simply extend the maturity. Your 2 year note now become[s a] 20 year bond. They do not default, you just can never redeem.

Possible remedy. The preliminary ideas in this paper would introduce greater flexibility into the 2002 framework by providing the Fund with a broader range of potential policy responses in the context of sovereign debt distress, while addressing the concerns that motivated the 2002 framework. Specifically, in circumstances where a member has lost market access and debt is considered sustainable, but not with high probability, the Fund would be able to provide exceptional access on the basis of a debt operation that involves an extension of maturities (normally without any reduction of principal or interest). Such a “reprofiling” operation, coupled with the implementation of a credible adjustment program, would be designed to improve the prospect of securing sustainability and regaining market access, without having to meet the criterion of restoring debt sustainability with high probability.


Now the June 2014 report has a new, far-reaching proposal. This shows how lawyers think in technical definitions of words. There is no actual default if they extend the maturity. You could buy 30-day paper in the middle of a crisis and suddenly find under the IMF that 30 day note is converted to 30 year bond at the same rate.

The huge national debts could be reduced also according to the IMF by just expropriating all private pension funds. The vast amount of people are watching TV shows, sports, or something other than government and they know that.

The press will not report the real risk for that is boring news. Hence, where his occupational pensions exist, you can suddenly wake up and find your future is now applied as a contribution to government — thank you for your patriotism. They have successfully convinced the evil is the rich so pay attention to them and you will miss the political hand in your back pocket.

What investor can really judge what is hidden in his fund when the government is denying democratic processes and control[ling] the press?...

*** martin armstrong (via zerohedge) / LINK

Why Report to U.S. Congress Issues Warning about Chinese Internet Firms

A U.S. congressional commission recently published a report that has been the topic of much discussion in China.

The report was published by the U.S.-China Economic and Security Review Commission, whose website says its job is to report on the national security implications of Sino-U.S. economic ties.

The commission recently issued a report warning investors about the risk of investing in U.S-listed Chinese Internet companies, and the timing of its release is noteworthy because e-commerce giant Alibaba Group Holding Ltd. is about to go public on the New York Stock Exchange, a listing that some expect to be the largest in U.S. history.

News articles on Chinese websites covering the report view it through the lens of how Alibaba’s planned IPO will be affected. Some analysts said the huge scale of Alibaba’s stock offering prompted the commission to highlight risks that many other Chinese companies present, but go unnoticed by the U.S. public.

One analyst said the report was motivated by U.S. e-commerce companies feeling threatened by Alibaba, which is making inroads in the United States.

Here’s a look at what the report says about the risks associated with Alibaba Group and other companies and what it means.

The report to the U.S. Congress, dated June 18, warns investors about the risk of putting their money in U.S.-listed Chinese Internet companies. It used Alibaba Group and Sina Corp.’s Weibo, China’s version of Twitter, to demonstrate the perils their obscure corporate structures present. Investors have been lured to such firms despite the risk because of high returns, the report says.

It concludes that the problems were fundamentally caused by China’s overly restricted financial markets and the government’s requirement that Internet companies be majority owned by Chinese nationals. It also says U.S. investors are not adequately protected because rule of law in China is underdeveloped.

The report focuses on the use of variable interest entity (VIE), an arrangement commonly used by Chinese Net companies to work around domestic policy restrictions and list overseas.

A typical VIE structure involves an overseas-incorporated entity that controls a domestic business not through equity ownership but an array of agreements. Foreign investors invest in the overseas holding company because they are often barred from directly holding shares in the business the domestic firm is in.

The report says the VIE structure is a “complex and highly risky scheme of legal arrangements” designed for Chinese companies to circumvent domestic regulations restricting foreign share ownership in certain industries that the government considers important.

Investors should be wary of the structure because it is fragile, the report says. The contracts, which are key to protecting investor interests in the VIE arrangement, exist between the Chinese subsidiary of the foreign holding company and the firm that controls the main operations in China. Both parties are covered by Chinese law only, so the agreements between them are binding and enforceable only to the extent that Chinese courts are willing to uphold them.

This is a cause for concern particularly because “rule of law remains rudimentary” in China, the report says. Also, the Chinese government has been ambiguous in its attitude toward the VIE structure, creating more uncertainty.

The report also urges U.S. investors to beware of the risk of Chinese Net companies engaging in corrupt practices. For example, employees of Chinese Net enterprises have been caught taking bribes to help companies avoid bad publicity.

Listing in the United States brings the companies under the jurisdiction of the U.S. Foreign Corrupt Practices Act, and means they can be held accountable and punished even for acts of graft that take place outside the United States.

Alibaba has a bad track record both in terms of using the VIE structure and its employees being involved in corruption scandals. It is going public in New York using a VIE structure. To mitigate investor concerns, Alibaba said in its prospectus that it will make the foreign-owned part of its business hold most of its assets aside from those including licenses that must be held by a Chinese entity.

The firm’s co-founder, Jack Ma, caused an uproar in 2011 when he ignored the objections of foreign shareholders and severed the VIE link between Alibaba and Alipay, an extremely popular e-payment tool in the country. Ma said he did so to ensure Alipay can get its payment license. The incident served as a reminder of how little influence foreign shareholders have over the management of a VIE.

Alibaba was also embroiled in a scandal in 2012, when Yan Limin, former general manager of Alibaba’s group-buying business, was arrested for taking bribes in exchange for doling out favors. He was sentenced to seven years in prison. Several other Alibaba employees were found guilty of similar crimes.

The document says that “If U.S. investors continue to buy into such Chinese VIE schemes and the system collapses, the scenario could be akin to the 2001-2011 Chinese reverse-merger debacle that cost U.S. investors an estimated US$ 18 billion.”...

*** caixin / link

Trading blows

Two sets of sharply different international negotiations are currently under way that will have a major influence on global policymaking for decades to come.

At the United Nations, the Open Working Group tasked with drafting a set of targets and objectives for poverty eradication and sustainable development has recently published its zero draft.

Meanwhile in Brussels and Washington, closed-door negotiations are gathering pace in an effort to finalize two massive regional trade and investment agreements. The Transatlantic Trade and Investment Partnership (TTIP — also known as ‘TAFTA’) between the United States and the EU, and the Trans-Pacific Partnership (TPP) between the US, Canada and 11 other Asian and South American countries are being hailed as the ‘gold-standard’ for future regional trade deals.

The implications of, and indeed the connection between, these two processes may be lost on your average Northern citizen. But for communities on the front line of conflicts to protect natural resources from short-term corporate profiteering in the global South, they couldn’t be clearer.

Take El Salvador. In recent years, the tiny Central American nation, already suffering from severe groundwater contamination and water shortages, has seen two visions of national development going head to head. On the one hand, in the spirit of sustainability and democracy, communities in the region of Cabañas have mobilized to pressure their government not to allow a proposed cyanide-leach gold mining project that threatens their freshwater sources. On the other, a Canadian mining corporation, backed by some local interest groups, has been hellbent on extracting gold from the mountains.

The good news for the communities of Cabañas is that their government listened to its citizens and imposed a moratorium on heavy metal mining — a policy reiterated by the recently elected new government. The bad news is that the corporation involved, Pacific Rim, recently taken over by Oceana Gold from Australia, was able to counterattack with a $300 million lawsuit.

The El Salvador case is just one of hundreds of such ‘investor-state’ cases launched by corporations in recent years. Originally intended as a last resort for foreign investors in cases of expropriation of assets in countries with weak judiciaries, the investor-state dispute settlement (ISDS) system has become the weapon of choice for corporations in conflicts over issues from public health to energy policy to control over public water systems.

Using obscure investment chapters of trade agreements and bilateral investment treaties corporations can bypass national court systems and sue governments in closed-door arbitration tribunals.

Lawyers in the tribunals work on a for-profit basis with no accountability to any democratic system, and corporations can sue not only to recover what they have invested in a country when a regulatory change occurs, but also for what they expected to earn in to the future.

For the people of El Salvador, $300 million would be a devastating setback to national finances.

And regardless of the final outcome, the government will now spend several million dollars defending the case (fees not refunded to defendants even if they win). In a country where 35 per cent of the population lives below the poverty line, money that could be spent on teachers or doctors will now end up in the pockets of corporate lawyers, mostly from the EU and the US.

The resulting ‘chilling effect’ on future policymaking — for fear of additional ISDS cases — is arguably one of the most insidious effects of the system.

The TPP and TTIP trade deals mentioned above are attempting to expand this system on a much broader scale.

Although the European Commission has been pressured into carrying out a consultation on the investment chapter of the TTIP, the consultation does not provide space for a conversation on the structural flaws inherent in the current investment rules regime, or on alternatives to it.

And these big regional deals are just the tip of the iceberg....

*** new interNationalist / LINK

Spain says to charge tax of 0.03 percent on bank deposits

Spain on Friday said it would introduce a blanket taxation rate of 0.03 percent on all bank account deposits, in a move aimed at harmonising regional tax regimes and generating revenues for the country’s cash-strapped autonomous communities.

The regulation, which could bring around 400 million euros ($546 million) to the state coffers based on total deposits worth 1.4 trillion euros, had been tipped as a possible sweetener for the regions days after tough deficit limits for this year and next were set by the central government.

Deputy Prime Minister Soraya Saenz de Santamaria announced the move at a news conference following a weekly cabinet meeting.

Spain is aiming for an end-of-year deficit of 5.5 percent after ending 2013 with a deficit of 6.6 percent of gross domestic product, just short of its 6.5 percent target. The regions have been set a deficit limit of 1 percent of GDP.

The government had last year fixed a zero percent tax rate on deposits across the 17 autonomous communities to prevent some of them charging their own rates, but never ruled out raising the taxation level.

The country has one of the lowest tax takes in the European Union after a burst property bubble crippled the construction sector, one of the largest contributors to government coffers.

Madrid passed in June a blueprint for tax reform which aims to cut income and corporate taxes to stimulate consumer demand and investment in the midst of a nascent economic recovery....

*** reuters / LINK

We must end this addiction to debt as the engine of growth

Growth is back — after a fashion — but debt levels are rising again, productivity growth in advanced economies is close to post-war lows, capital spending is becalmed, and in Britain, inroads into deep fiscal and current account deficits are proceeding only at glacial pace. Is this a sustainable economic model?

The answer from the venerable Basel-based Bank for International Settlements is a definitive no. “As history reminds us, there is little appetite for taking the long-term view”, the BIS thunders in its latest annual report.

“Few are ready to curb financial booms that make everyone feel illusively richer. Or to hold back on quick fixes for output slowdowns, even if such measures threaten to add fuel to unsustainable financial booms. Or to address balance sheet problems head-on during a bust when seemingly easier policies are on offer. The temptation to go for shortcuts is simply too strong, even if these shortcuts lead nowhere in the end”.

As you can see, the BIS has lost none of none of its penchant for dampening any suggestion of better times to come with another bucket load of gloom. The BIS is, if you like, the conscience of markets, bankers and policymakers, so pessimism and proselytising come naturally. It is the BIS’s job to warn of developing economic risks, however clement the conditions outside seem to be.

This gives the central banks’ banker the characteristics of a stopped clock. Much of the time, it is going to be wrong, with the natural exuberance and animal spirits of markets oblivious to its warnings. Twice a day, however, it is going to be right, as indeed it was about the financial crisis, when it came closer than any to predicting the maelstrom to come.

And now its warning lights are flashing red once again — about the disconnect between buoyant financial markets and underlying economic realities, about a recovery which is too dependent on debt and unconventional monetary stimulus, about the depressing lack of productivity growth, about companies that prefer to downsize and buyback their own shares to investing in the future, about developing asset bubbles and the risk they pose to financial stability, and about the cowardly propensity of policymakers to take the easy option, rather than the tough decisions necessary to create a durable recovery.

Is the BIS right to be playing the Prophet of Doom once more? This might seem something of a cop out, but the answer is both yes and no. Take the UK economy. Barring accidents, the UK probably has at least another two years of above trend growth left in it, and with a bit of luck, rather more.


Goldman Sachs reports that its proprietary current activity indicator points to annualised growth right now of 3.5 per cent. The investment bank has also broken with the consensus to predict 3 per cent growth next year, with unemployment falling to 6 per cent next year and 5.8 per cent the year after — or a level generally considered to be synonymous with “full employment”.

Little more than a year ago, such suggestions would have been dismissed as delusional, but much of today’s survey evidence seems to back them up. Business optimism is at its highest level in 22 years, according to a survey of 1,500 businesses by Lloyds Bank. Perhaps it is the likes of the BIS who are out of step with underlying realities.

Unfortunately, the UK may be something of a special case; the international picture doesn’t look nearly so reassuring.

Some of the best evidence for this more downbeat view comes from the latest Standard & Poor’s “global corporate capital expenditure survey”, which glumly observes that despite a corporate sector awash with cash — an astonishing $4.5 trillion of it for the top 2000 capex spenders alone — a recovery in global business investment spending “still appears some way off”.

*** jeremy Warner, the telegraph / link

Charts That Make You Go Hmmm...


“Following the bull market pattern of the past five years, the U.S. stock market continues to climb to new highs while shaking off all reasons for pessimism as well as the warnings of skeptics. Stock market bulls are becoming increasingly brazen as they drive the market to nosebleed heights, which is convincing a greater number of people into believing in the economic recovery. Unfortunately, the public is being fooled because the U.S. stock market and economy is experiencing another classic central bank-driven bubble that will end in a calamity, erasing trillions of dollars of wealth.

As you will see from the charts in this article, there is so much proof that the bull market is actually a dangerous speculative bubble that it is simply undeniable. Despite what the cold, hard facts show, legions of pundits, economists, and investors are coming out of the woodwork to deny the existence of what is one of the most obvious bubbles in history. This widespread denial is what happens when emotions trump logic and reasoning.”

So says Jesse Colombo as he assembles 22 more charts like this one to tell his rather compelling story of an impending market crash.

*** Jesse Colombo / link


“Many investors seem unaware of just how large Japan’s QE program has been relative to that of other central banks. While the Fed, the ECB, and the BOE have roughly converged to the same level (as a proportion of their GDP), the Bank of Japan’s balance sheet is more than double that of its counterparts abroad.

“The official goal of course is to stimulate credit growth to the private sector by lowering longer term rates and boosting excess reserves in the banking system. The 10-year Japanese government bonds now yield 0.57% and the reserves have indeed spiked.

“But while we’ve seen small improvements in bank lending, credit growth in Japan remains tepid.

“The primary reason for this trend has to do with the lack of demand for credit. Both households and companies are loathe to take on debt. One can’t blame them of course — taking on fixed liabilities with looming risks of deflation is dangerous (imagine watching your assets depreciate, while liabilities remain fixed.) And as we saw in the US (see chart), other than during periods of frozen credit markets, quantitative easing has not been shown to be very effective in stimulating credit expansion.”

*** soberlook / link

“We’re going to need another meme... the great pretense of the great rotation as ‘investors’ dump bonds and buy stocks with both hands and feet as they realize growth has reached escape velocity and its time to BTFATH... has failed. As the following chart from JPMorgan shows, the brief period of net flows to stocks over bonds has ended. If a rally like this can’t get the animal spirits flowing in anyone but the C-Suite of your local share-buyback-ing corporation, when will it?”

*** zerohedge / link


Source: Zerohedge

Words That Make You Go Hmmm...



Chris Martenson takes six minutes out of your day to explain the importance of exponential growth in today’s world, and it’s worthwhile taking that time to hear what he has to say.


This gentleman is Paul Hodges, and chances are you’ve never heard of him. Paul recently co-authored Boom, Gloom and the New Normal: How the Ageing Western BabyBoomers are Changing Chemical Demand Patterns, Again, in which he looks at important demographic issues in a world where demography is rapidly becoming one of the most important (but least understood) sciences.

Fascinating stuff.




Me again, I’m afraid.

Last week I got the chance to chat with Eric King about a subject dear to both our hearts — gold and silver — and specifically the recent strength in the metals and whether this is finally the end of the slide in prices that has been causing consternation amongst the precious metals community for the last two years


and finally...



Now THIS is cool!

Take a DJ Phantom 2 Drone and a GoPro Hero 3 camera, throw in a fireworks display and you end up with some seriously amazing footage.

Like the man says, watch it in HD if you can... Fireworks as you’ve never seen them before. Guaranteed.






Grant Williams

Grant Williams is the portfolio manager of the Vulpes Precious Metals Fund and strategy advisor to Vulpes Investment Management in Singapore — a hedge fund running over $280 million of largely partners’ capital across multiple strategies.

The high level of capital committed by the Vulpes partners ensures the strongest possible alignment between the firm and its investors.

Grant has 28 years of experience in finance on the Asian, Australian, European, and US markets and has held senior positions at several international investment houses.

Grant has been writing Things That Make You Go Hmmm... since 2009.

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A walk around the fringes of finance


By Grant Williams

07 July 2014


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Bill Geer

July 8, 4:34 a.m.

With respect to the coming and greatly anticipated REAL VISION TELEVISION concept, I have but one suggestion, or request:  please consider that many of your intended viewers are hearing impaired.  I, for one, even though I have quality hearing-aids, find that most all of my video-viewing from my computer lacks sufficient sound quality for complete comprehension.  For example on your newsletters which carry video interviews, I’m normally missing most of the audio - very frustrating.  Unlike television programs (and TV sets) that now routinely have close-caption capabilities, computer videos have yet to address the needs of the hearing-impaired.  I will most likely initially subscribe, but if I am unable to understand what is being said will have to discontinue and miss out on valuable insights.