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Market Talk
Late headlines yesterday from the IMF spooked early trade in Europe, which saw support for core debt markets. But this “will they, won’t they” (or should I say, “can they, can’t they”) approach has long been a tiresome excuse for dealers and is another reason why liquidity is so poor.
The 10yr Tsy/Bund spread remains below 150bp. Peripherals lost ground to core as we head into the weekend with BTP’s and GGB’s taking the brunt of the punishment.
The Greek stock market is down 6% and the Turkish Lira is closing the week weaker on the day (losing 0.6%).
Risk appetite remains thin on the ground, and secondary bond liquidity is still a problem. A common complaint among fund managers is when you want to sell, no one will bid (rather take an order); then when you wish to buy, you have to wait for new issues (which results in them launching too expensive)! Then the secondary markets dries within a couple of weeks.
Emerging Market bonds seem to have the most focus as far media is concerned, but I would have thought High Yield liquidity must be suffering more so! At least there are local banks for EM debt, SWF’s and index players that care but for HY liquidity is crucial! Definitely an area worthy of focused attention.
–Ashley Warren, CEO, PEI
Government & God – Obama Threatens the Vatican
Anyone who thinks government respects religion had better stop watching sports and drinking too much. There is a whole different reality waiting for you. Obama threatened to shutdown the Catholic Church from receiving any money out of the USA, or sending any money to the USA unless it complied with FATCA. Obama, showing his true colors, has no respect for religion. The Vatican has been forced to comply with U.S. tax authorities, demonstrating that Obama is hunting every piece of loose change he can find (See Agreement: FATCA-Agreement-Holy-See-6-10-2015).
Why did Napoleon crown himself? Because Napoleon imprisoned the Pope until he too signed over all papal lands to the new French Government. The French even issued assignats, which consisted of paper money backed by lands and property confiscated from the Catholic Church. Just follow the money and you will see that politicians are atheists. They have to be. It was Marx who called religion the opium of the masses.
When Henry the VIII was broke, he too confiscated all the lands of the Catholic Church and created the Church of England all for money. “Fidei defensor” is the Latin title for “Defender of the Faith” which has been one of the subsidiary titles of the English and later British monarchs since it was granted on October 11, 1521 by Pope Leo X to King Henry VIII of England. They still kept the title, even after confiscating all property of the Catholic Church to refill the depleted treasury.
To this day, Elizabeth II, in her capacity as queen of the United Kingdom, is still styled, “Elizabeth the Second, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland and of Her other Realms and Territories Queen, Head of the Commonwealth, Defender of the Faith”.
To this day, Gresham Law based on bad money driving good money out of circulation, was an observation of the Great Debasement of the coinage of Henry VIII, prior to him confiscating the property of the Catholic Church because he was dead broke.
Private Money
Private money has ALWAYS emerged during periods of crisis. The Feuchtwanger Cent was a “German silver” private token coin. German silver is a term for a white appearing metal we use today which is a copper alloy with nickel and often zinc. The usual formulation is 60% copper, 20% nickel, and 20% zinc giving the impression of silver. Lewis Feuchtwanger circulated these tokens during the 1830–40s in the USA. The denominations were one and three cent varieties.
The tokens were originally created as patterns to demonstrate a new type of metal for coinage, however when these proposals failed, they were temporarily used by the public during depression which followed the collapse in the banking sector after the Panic of 1837.
When Andrew Jackson shutdown the Second Bank of the United States, ending central banking, that begun the age of Wildcat Banking with every bank issuing their own money. That led to the collapse in banking and people began hoarding coins. In 1837, to alleviate the need for small change during the Hard Times, Feuchtwanger’s tokens were proposed to Congress as cheaper to mint than silver.
Andrew Jackson unleashed the Sovereign Debt Crisis of the 1840s as states issued debt to try to bail out banks and then defaulted. The period led to civil unrest and killing immigrants on the street of Philadelphia, as people blamed the Irish for taking their jobs and causing rising unemployment.
The period was especially rough for the economic recession following the dissolution of the Second Bank of the United States, known for massive hoarding of small change. Much of the small change circulating at this time vanished between 1837 to 1844. Hard Time tokens began to circulate as a substitute for official money, which was composed of clunky copper half-cents and cents privately produced or various cuts and whole silver coins of foreign origin. The variety is rich for the era as there are many political statements, such as not one cent for tribute (taxes).
In fact, it would not be until 1857 that Congress would enact into law that legal currency be coin of United States Mint origin because there was so much private coinage in circulation.
Those interested in the coinage can buy a catalogue on the period with a wealth of illustrations. It is by far a most interesting example of how money can be created by the private sector against government.
History repeats BECAUSE human nature never changes throughout the successive generations. There is nothing ever new under the sun.
Cops Shutdown Girl’s Lemonade Stand for No Permit
The Texas sisters Andria, 8, and Zoey Green, 7, wanted to raise about $100 to take their dad to Splash Kingdom as a Father’s Day present, so they set up a traditional neighborhood lemonade stand. After they made about $25 profit, the nasty insane Overton police showed up and shut the lemonade stand down because the Green sisters did not have a “Peddler’s Permit,” which comes with a $150 fee. The police have simply become the destroyers of society and no longer protect the society – they have transformed into IRS agents with guns and wheels, and far too many are ignorant of what role they now play in society.
In the true spirit of resistance, the girls reopened, giving out free lemonade with tips being optional. That screwed the police. There is the future of society fighting back against those who are destroying all our freedoms.
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