Street Talk - Deutsche Bank In BIG Trouble; Portfolio Cracking?

Is Deutsche Bank The Next Lehman?

Looking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened.  In hindsight there were a few early-warning signs,  but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.

There were few early indicators of Lehman’s plight.   Insiders however, were well aware:   In late 2007, Goldman Sachs placed a massive proprietary bet against Lehman which would be known internally as the “Big Short”.  (It’s a bet they would later profit from during the crisis).

In the summer 2007 subprime loans were beginning to perform poorly in the marketplace.  By August of 2007, the commercial paper market saw liquidity evaporating quickly and funding for all types of asset-backed securities was drying up.

But still — even in late 2007,  there was little public indication that Lehman was circling the drain.

Read More.

Street Talk

"Bonds Are Their Achilles Heel"

#Scarcity --Humanity's Final Chapter

“Oil depletion and climate change will create an entirely new context in which political struggles will be played out . Within that context, it is not just freedom, democracy and equality that are at stake, but the survival of billions of humans and of whole ecosystems”

Richard Heinberg, Powerdown

Scarcity 
Humanity's Final Chapter 
 First Financial Insights 

 Christopher O Clugston

FIRST FINANCIAL INSIGHTS: SCARCITY - Humanity's Final Chapter

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Scarcity   Humanity’s Final Chapter*      "Diminishing Returns"  

Here is another one of our top authors and books, whose post has been attracting a lot of international traffic over the past six months. So again, we will save you the inconvenience of searching the FFI site, and re post it here.

It is important for all of us to understand the state of this planet and where mainstream economic doctrine and the economic system it authored is taking humanity.Not only are we on the verge of running out of oil in forty to fifty years, but we also coincidentally face exhausting most other key minerals required for the consumer industrial complex.  A complex designed by naive thespians who practiced their dark art of economics in despairing satanic shadows. Will their "invisible hand" save of us from a certain fate? Or perhaps there is another Santa Claus in the wings to be brewed with the words of these crafty sorcerers?

Economists long ignored inconvenient physical and mathematically  realities along with the laws of the universe that creates the entropic behaviour, pointed out by Paul Chefurka, in Paradise Lost, that governs all species on all planets.There are no dispensations in physics. These concepts alone are more important to understand and apply than any other knowledge we have ever uncovered during our short planetary journey. 

So if Chris Clugston, Paul Chefurka and Richard Hienberg, along with all the other Peak Everything believers are right - then a very grim time awaits our species in a few short decades. So please take a little bit of time to think about the billions of our fellows, our grandchildren, or even our children, who will be literally left out in cold and in the dark. What should we say to them as they grimace with their lonely moments of fate -  moments that we hold  unquestionable responsibilities for.

Again, take a little time to put yourself in their shoes and imagine what they could face, when billions of people are left with an empty cupboard to find their way. It will be no Hollywood story - it will be their reality of blank stares.

What will the economists say then ? And us, what do we say?  Sorry?

Somehow, apologies can never be enough...

Dr Peter G Kinesa

November 11, 2013   

 “The loneliest moment in someone’s life is when they are watching their whole world fall apart and all they can do is stare blankly”

F. Scott Fitzgerald, The Great Gatsby 

   

The Marc Faber Blog Childish Remarks: "The FED Asset Purchase Disaster?"

The Marc Faber Blog : Childish Remarks -The Asset Purchase programme of the Fed has been a complete Disaster

Doctor Faber's conclusions are first premature and more than likely wrong. 

In fact, it will be difficult to measure how effective Fed policy has been or will be as history has yet to unfold. Had Uncle Ben not implemented this program, then interest rates no doubt would be much higher than they are today. There are a lot of very nervous long-bond holders who were obviously more than happy to pass their holdings back to the Fed. Everyone is living in fear of a sharp spike in the long rates that would absolutely clobber the principal market value of these bonds.

But QE is not just about keeping rates low, it is also a crafty way to hold asset values in place, including the equity market. This may actually be its main purpose. The last thing the Fed and Obama needs is to have huge bond losses realized and recorded by banks, portfolios, and other financial intermediaries.

Such losses would vacuum up all the liquidity in the repo, bond and money markets faster than Lehman's 2008 debacle, as well as knocking the proverbial crap out of their respective equity boxes. Think about it - this prevention is moping up about 40 billion (possibly more) monthly in marked-to-market accounting losses that would be caused by sharp rate  increases.

Like the Fed we are holding back a few cards here, but in all likelihood, there is more to the Fed's QE policy actions than meets the eye - and Marc should be a little more careful with his remarks - they come across as premature and childish! 

And that's being kind.

Dr Peter G Kinesa 
August 28, 2013 

Marked to QE Market

Uncle Ben's Converted Losses 

                

PLATINUM WEALTH PARTNERS - BLOOMBERG, ALJAZEERA, PAUL KRUGMAN

PLATINUM WEALTH PARTNERS:

Week Ended July 21 2013

 DR. PETER G. KINESA'S 
INTERNATIONAL INSIGHTS

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The Marc Faber Blog: Somewhere down the line we will have a Massive Wealth Destruction

Just a short post noting that Marc's 50% prediction is in line with what we suggest is a possible valuation adjustment in our July 17th comments on Paul Krugman's Blog - Prophecies of Maestrodamus.

Not a hard one to figure out as it is really just "present value mathematics" whereby if long 30 year bond rates double, then their market value dips by 50%. Very straightforward mathematics that no amount of economic theory nor policy measures can override as it is simply a hard conceptual constraint. Mathematics cannot be persuaded, legislated nor negotiated with - and that should come as no surprise to anyone.

Down the line, looks to be a scary turbulent road ahead. 

We will post more comments from this blog later on.

PLATINUM WEALTH PARTNERS

July 21, 2013

What waits down the line?

By every account, all negotiations with mathematics have resulted in a win-lose situation. Some things are just absolute.

Dr Peter G Kinesa

July 21, 2013  

Bloomberg BusinessWeek - The Social Media Bubble is Quietly Deflating

Just a few months back, you may recall, along with Jim Rogers, we raised concerns about Facebook and generally the whole social media industry, referring to it as a generational fad and having difficulty seeing how a sustainable business model could be developed. Moreover, whether such tools or derivatives could find useful and profitable transitions into business markets. Guess what? Looks like the markets are tuning into Mr Rogers and ourselves as VC (Venture Capital) funding has plummeted to 2% this past quarter.

As one insider notes; what a business - "thinking about how to make people click ads"  And that pretty well sums up the industry's "Critical Success Factor" and how you build any sort of Sustainable Competitive Advantage around it, remains a puzzle.

Anyway we still believe that the big ticket, high margin objects just simply requires good ole face to face contact -  a little of that human touch!

INVESTORS INSIGHTS - February 18, 2013  

JIM ROGERS - Facebook is not an Investment, it's a Waste of TIME  

PLATINUM WEALTH PARTNERS

July 20, 2013

Not a Happy Camper

Comparing the social media frenzy to the dot-com bubble may not be such a good analogy, albeit in both cases you can observe that common sense gave way to a strange fear of missed opportunity combined with unrealistic expectations. The other common ground was that object business measures, standards and principles no longer applied . Market history repeated again.

And for some strange reason this won't be the last time. Humans? Go Figure?

Dr Peter G Kinesa

July 20, 2013  

Bloomberg - Spanish 10-Year Bonds Decline as Italian Yield Rises to 4.48%

In light of our market alert, regarding Portugal's Bonds, earlier this week, along with the growing concern for adverse circumstances in Europe, even more focus is now being given to European Bond Markets. Market activity in these markets may now have greater bearing on the global financial system than US treasuries. No kidding?

Similar to Japan, bond values and rates in the US appear to be hand-cuffed at low levels for some time. Moreover, enjoying the reserve currency status allows the US to gather the loose liquidity in the global system and harbour its flight and fright capital, thereby easing any upward rate pressures. Plus, an interest rate increase state-side would be absolutely devastating to the US economy at this juncture - and just pour gas on a stumbling economy's fires. 

Underlying the European bond markets are chronic diseases that  show no signs of abating - in fact there is growing evidence to the contrary. Like Japan and Middle East countries, Europe suffers from a physical economic overcapacity issue that cannot be resolved by abstructionist economic measures. Limited and declining physical economic inputs can only lead to one result - declining economic outputs. All of which is made worse as populations grow and per capita output consumption ratios thusly sink even further. Bad "Real" News!

Particularly after Cyprus, we are seeing signs of desperate central bankers pulling out devious last stops to cure the terminal economic cancer. The markets in Greece, Spain, Italy, Ireland and Portugal are at the greatest risk of crashing global bond prices. They are "bonded" by a common concern with a staggering rippling potential affecting markets with traumatic head to toe  effects. 

Our main message here - this one ain't over yet; 'cause, "it ain't over, 'til its over"  

PLATINUM WEALTH PARTNERS

July 19, 2013

A Bonding Crisis - the future is yet to come...

While the rest of the world may think that the FED is the driver behind global rates, largely because of the US reserve currency status and its trading volumes - we are not so certain, and believe as Grandma use to say "the devil is in the details - at Lehman Bros?" And so when all hell breaks loose; something small and overlooked is often perpetrating the angst.

Of course, then there was Yogi's wisdom - a great "Bondplayer" too  

Dr. Peter G Kinesa

July 19, 2013

The New York Times 

The Prophecies of Maestrodamus

Paul Krugman

Comments:

"I know one thing; that I know nothing" Hmm. I think we could all learn from one of Socrates’ last thoughts - but you never know!

Still we could attribute much of our current mess to too many who believe they know - then later we find that even simple notions were somehow forgotten. Or a fog had set in. (- R. S. McNamara).

Despite what may be economic headlines today, Greenspan's legacy may be his contribution to our current low interest rate trap - that has lasted for much too long. Getting out of it could trigger a massive deflation of financial assets - causing an unprecedented ASSET VALUE WRITE-DOWN. Evaporating years of value in moments.

A mere 2% rise in rates, for example, could deflate financial assets by as much as 50% - wiping out the equity boxes of financial intermediaries and banks , while creating massive unfunded pension and insurance fund liabilities on the basis of marked to market accounting calculations. =ing HUGE liquidity CRUNCH.

Moreover, the total value of US federal debt could grow substantively with a mathematical pen stroke, which has little to do with deficits or economic theory and activity. And I don’t even want think about what could happen if rates should revert to levels over their historic mean; it would be devastating.

So it seems that the Maestro knew how get us into this trap, but did not know how to get us out of it - but then again "who knows?" And as far as we know, he's still on first...

INVESTORS' INSIGHTS

Juky 17, 2013

I don't know?

ALJAZEERA - (English) Worldwide PC sales keep sliding

Lenovo (China) Top PC Maker???

Bad news for everyone, except China as they take the leadership position in another market that has long been dominated by American makers for decades. Who do we blame this on? Management? Tablets? Consumers? Or China's low cost producer strategy for an industry where products are becoming commoditized, as it really does not take that much to do the reverse engineering. Again China is following a "national business strategy" much like Japan did from the 60's onwards in automotive and consumer electronics.

But the real issue is what good is the WTO? How does it ensure that everyone is on an equal playing field when labour, environmental, and health standards are barbaric is contrast to North America. Add to all that a fixed currency to the US dollar and this game becomes a one horse race.

But who loses big time? North American and European union and salaried workers. In fact, in America the real hourly wage, according to St Louis, FED statistics have not risen much since 1982! So, where are the unions???

Beyond all this meaning more doom and gloom for the ordinary American worker, here 's list of PC makers facing tougher times as this saturated market begins to consolidate. Smaller players will be forced to merge or simply fade away into the sunset - while margins face continued presures from commoditization.

TOP Five PC Makers
  41% (est) Market Share

Lenova
Hewlett Packard
Dell
Acer
Asus

INVESTORS' INSIGHTS

First Financial Insights

July 16, 2013 

Those were the days - "in our home towns... and they ain't coming back"

- Bruce Springstein

DETROIT Files for Bankruptcy - What Next?

DETROIT files for Bankruptcy - What Next? 

"I've got sunshine on a cloudy day; when it's cold outside I've got..."

"In a world obsessed with the crazy frivolities of celebrity, reality television, sporting events and royal births, the real important events affecting human conditions are lost in the noise of a dysfunctional media 

- we need to grow up fast"

First Financial Insights

July 20,2013  

While the news may come as a shock to some, this much anticipated event is just another cut in the demise of this once iconic American city. It was the industrial centre, a heart and soul of culture, a symbol of America and its "enterpride" that had worked to win wars and put the nation at the top of the global economic stage. Its primary automotive products changed, forever, the way we worked, lived and transported the essentials of commerce and livelihoods, from here to there. 

The old saying was "what's good for General Motors is good for America," signifying just how critical this industry and city had once been to the nation's economy. Many questions and words will be written regarding the whys, hows and whats of the industry's turn of fortune and the city's plight. Some could point to globalization, poor management, foreign competition, social decay or a host of other reasons and combinations thereof. Still what is clear is, despite the best minds, efforts and resources: it happened! - creating even bigger concerns - How many more Detroits are there? Is this just the beginning? What next?

As for sure, sound and stable economies cannot be linked to only soft, intangible and abstract industries, such as social media and entertainment - hot air can only be exchanged for so much, and particularly, as the scarcity of key economic raw materials begins to play a larger hand in global economic activity.

Perhaps, it is also time to wake-up and have a close look at how global competitors run their economies to create their sustainable comparative advantage. Apparently, they have relied less on the ideals of free enterprise and apply "National Business Strategy" to set the actions, programs and goals for their endeavours, which in some cases, results in de facto slave labour conditions. Leading us to believe that free trade - is really an oxymoron. Free for whom?

So there is certainly much more analysis that needs to be done -including what and why levels of government and management failed to address this problem in the early stages. It is a situation that did not just occur overnight, but was apparent to many and allowed to fester for many years. And how many more cities are waiting in the wings?

So we will continue to monitor the events here, and also what appears to be an emerging trend nationally, More importantly we stress, this is a global economic disease that has spread to European countries such as Cyprus, Portugal and Greece, along with nations in the Middle East who are at the forefront of social  and political upheaval.

Is the abstructionist's economy finally falling into the grips of a finite planet's physical constraints. The logical conclusion is yes. So - What Next???

Dr Peter G Kinesa
July 20, 2013

What can make me feel this way...?

ACTS OF GOD...Climate Graphs

These graphs at the very least are disturbing - at worst, they paint a dismal picture of the prospects for the human condition and related species in the years ahead. Can we say that they reflect a direct relationship to our industrialization, pollution, unbridled growth policies and overpopulation of the planet in the last 250 year? No we don't believe that the evidence can distinguish between acts of man or God. The planet does go through swings in climate as evidenced by geological and other forms of scientific evidence - so we may argue that this is just the normal cycles of nature playing havoc with the grand designs of human policy and activity. 

On the other hand, there are just too many correlations that lead one to believe that nature is not just acting on its own accord. We probably have something to do with the trends. Trends that need to be counter acted in some way, before it's too late, regardless of weather (sic) they result from acts of man or God or both. In any case, it will require the acts of man to stabilize or reverse these trends, otherwise the circumstances of the planet will not support the life forms of its current inhabitants. 

We fear however, that the line to buy the inconvenient truths will remain short, as it fights with the inertia of years of economic growth, devolpment and a supporting cast of fairy tales. So be it!

Dr Peter G Kinesa
July 20, 2013

MAN, GOD, or ...

PLATINUM WEALTH PARTNERS - Financial Times, The Guardian, Jim Rogers

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Week Ended July 14, 2013

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INTERNATIONAL INSIGHTS

"PLATINUM WEALTH PARTNERS"

VISIT OUR WEBSITE 

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MARKET ALERT

Europe shifts back into the spotlight this week, as Euro bond yields could soar higher and then reverberating around the globe as jittery traders push the button. Bond Vigilante's may be in for an early Christmas Bonus - long before the.summer is over. It is unlikely that equity markets can protect themselves if the bonds decide to take cover. Safety first, and every man for himself.

First Financial Insights
July 12, 2013

Financial Times - Portugal's Bonds Soar 7.9% -  MORE Euro Troubles  

Just add another country to the list of European nations that are seeking "national salvation" as 10 year bonds rose to 7.9% this past Friday, settling back to 7.27% - up 53 basis points. Again the neo-classical economists have no solutions and no plan, other than to print money and provide bail-outs. Nor do they even remotely understand that the underlying issues stem from physical economic constraints - too many people and too few resources. So the economic cancer that came to the forefront in Greece, is masticating around the continent, remember Cyprus just a few short months ago . 

Here's the real problem - as Europe falls apart and bond yields move to 10% and higher in these "thinly traded markets," the fears will begin to take hold and grip the global markets as well. At the same time, the European economies are also starting to slip into one of the profoundest depressions ever to be experienced, as asset prices deflate and consumer disposal spending is over-burdened with huge increases in debt service costs. A One - Two body blow.

This could be the snowball that plunges the bond markets into a long bear-cycle. Expect the turmoil in Europe, to test the nerves of jittery bond traders in Asia and North America this week. And this could also trigger long over due downside actions in the equity markets around the world next week.

Seems like there is no where to run; no where to hide.For now.

INVESTORS INSIGHTS

First Financial Insights

July 11, 2013

Who will pull the trigger?

The Marc Faber Blog : Crude Oil is one of the very few Commodities that look attractive

What is it about these guys? One day, Dr.Kinesa, says oil could go to $500 a barrel because the finite physical constraints are going to cause economic problems, resulting in social disruptions, political turmoil and then geo-political upheaval . What can we say? We read the same articles or fools seldom differ...

Platinum Wealth Partners

First Financial Insights

July 11, 2013

Great Minds Think Alike

A few years back a Canadian economist - Jeff Rubin boldly predicted that oil could reach $200 a barrel sending shock waves through-out the financial world. This tells us a number of things: markets have short horizons, human cognition is flawed, and most folks simply do not understand that exponential mathematics and physics impose hard non-negotiable constraints. We do!

Dr Peter G Kinesa

July 11, 2013

THE JIM ROGERS BLOG - Rogers: More Money has been lost in GOLD Mining Shares than any other industry in America 

We agree for the most part, except JIM you forgot one important aspect of mining, that is many mines are polymetallic, so they extract many other minerals including gold in their process. Should gold gravitate to zero, these mines will treat it as a by-product, and thus only assign the incremental costs associated with the ore or even  possibly leave it unprocessed for a period of time. If gold is a by-product then the full weight of production costs will not be attributed.So even at $50 an ounce, some miners may still be able to produce it on a break-even cash basis  because the cost assignments are arbitrary.

Anyway we are happy you enoyed our article - "Gold is a Psychotic Placebo - NOT AN INVESTMENT." And by the way, we confirm that old story about gold mines - 99% of all stock mining ventures end up being worthless. And yes, it will be very hard for these sociopaths to attract capital in the future. That's one good thing for the greater cause - our future generations!

Platinum Wealth Partners

First Financial Insights

July 10, 2013

Faber and Rogers are still building physical gold positions regardless of what is happening - the US dollar is still a powerful medium that can be exchanged for real objects. Moreover, there are strong resource-based currencies offering a greater lon-term mineral diversification. It is still just too easy to get blind-sided by an object that depends upon the bouncing emotional neurons of the collective masses who do not even know how they will think one day to the next. Too buggy for us, when there are just so many better other places to garner safety,income and growth in global purchasing power terms.

Dr Peter G Kinesa
July 10, 2013  

Somewhere Under A Rainbow

The Guardian - SuperFreakonomics is SuperFreakingWrong

The Guardian - SuperFreakonomics is SuperFreakingWrong

 Business Media Protecting our Planet

This article brings out a number of salient points regarding the information propaganda game being played with climate change by the nefarious business press. Never, however, do Canadians forget that "the medium is the massage" - because media has the subtle profound power to define realities that don't actually exist. The list of outright lies built on misinformation with its brutal consequences are endless. Therefore, investors should, as a rule, have little faith in the objectivity of the mainstream business press that is sadly run by so many hidden agendas.  

Climate change as pointed out in this article is being panned or suppressed with the passion of an addict who denies their affliction. The usual media suspects are mentioned, along with other crazies, who are promoting hair-brained schemes* to remedy irreversible damages already facing the bio-sphere. More false PROFITS! 

*(Remember Get Smart? Let's Bring Down the Cone of Silence)

To invest effectively, the planet's hard physical constraints must be considered in any decisions we make. Denial or ignorance could be very costly. Is climate change that serious? The best way to answer the question is with the question: Why is, Mayor Bloomberg, spending $30 Billion on a seawall for New York City? 

That's a serious - REAL Business Agenda...

Platinum Wealth Partners

First Financial Insights

July 9, 2013 

Climate Change - could be bad for Business? 

Reading between  the lines, modern journalism has turned into a propaganda machine. The questions foremost in our minds: is for whom and why? And so, our democracies evaporate and freedoms disappear without a single vote being cast,  nor a voice raised in anger nor a pitchfork held in defiance.  So invisible.

In the end - IKE was Right!

Dr Peter G Kinesa

July 9, 2013