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Full Version: Wall Street Is Falling Off A Cliff, And The Bottom Is A Long Way Down
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This is probably the beginning of the end.


The sooner it all goes to hell, the sooner we can start rebuilding.

Alarm bells ring over negative interest rates

Financial Times–3 hours ago
As a result of low and sub-zero yielding sovereign debt in Japan and Europe, many investors are forced to buy riskier bonds with lower ratings, or longer-dated …
Negative bond yields cost investors $24bn annually

Financial Times–19 hours ago
As a result of low and even negative yielding sovereign debt, many investors are forced to buy riskier bonds with lower ratings, or longer-dated bonds. But that is …
Emerging markets face credit threat from ageing populations

Financial Times–6 hours ago
By 2050, S&P expects average debt in emerging markets to rise from 42 per cent … “investment-grade” sovereign ratings, according to S&P, putting pressure on …
Latin America’s Only Net Creditor About to Rejoin Mere Mortals
When Barack Obama took office in January 2009, the percentage of American who had jobs or were actively seeking jobs was 65.7%. That figure has plummeted like never before on Obama’s watch—to 62.8%.

This jobs metric—the labor force participation rate—is the real picture of America's economy. The preposterously low unemployment rate is achieved simply by refusing to count the vast majority of 94 million Americans who aren't in the labor force as "unemployed."

Under the far superior labor force participation rate, which is based on the entire working age population (rather than the two-thirds politicians show you), Obama is by far the worst thing that ever happened to Americans’ job prospects.

Instead of focusing on jobs, Obama allowed the Federal Reserve to run hog wild in an all-out effort to prop up bankrupt too-big-to-fail financial institutions, quadrupling the monetary base since 2009. All of that money went to Wall Street and its foreign counterpart banks.
Overconfident and lured by low interest rates and overoptimistic rosy-scenario rhetoric emanating from all sides, they do what the Fed and Wall-Street firms want them to do: they borrow even more money. Then reality sets in, and they buckle under this pile of debt.

The bankruptcy filings of Ultra Petroleum and Midstates Petroleum on Friday and Saturday brought oil & gas bankruptcies of companies rated by Fitch and other ratings agencies to 59.

These two companies piled $3.1 billion in defaulted junk bonds and another $1.5 billion in defaulted loans on top of the growing mountain of defaulted oil & gas debt.

With these two bankruptcies, Fitch Ratings raised its high-yield energy default rate to an all-time record of 13% and now projects that by the end of 2016, this default rate will jump to an even more glorious record of 20%.

But it’s not just oil and gas. And it’s not just companies whose bonds and loans are traded and are rated by Fitch and other ratings agencies. These are the larger outfits – big enough to have bondholders and big enough for the financial media to report.

But bankruptcies of all kinds and sizes and in a wide variety of sectors are now soaring.

Total US commercial bankruptcy filings in April rose 3% from March and soared 32% from a year ago, to 3,482, the American Bankruptcy Institute just reported. It was the sixth month in a row of year-over-year increases.
For the past 50 or so years, the quickest way for a sharp young sociopath to get rich has been to join an investment bank or hedge fund. The former were riding a “regulatory capture” gravy train that became ever-more-lucrative as new government agencies morphed into subsidiaries of Wall Street. Hedge funds, meanwhile, were surfing the wave of easy money that inevitably results from putting banks in charge of interest rates and government spending.

Said another way, when financial assets are being artificially inflated by excessive liquidity, it’s easy to make money by shuffling this ever-appreciating inventory back and forth, and to look very smart while doing so.

But those days are ending with a bang. Consider:
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