Free Financial Markets Are A Hoax

Submitted by Dr. Paul Craig Roberts – Institute for Public Economy

There are no free financial markets in America, or for that matter anywhere in the Western word, and few, if any, free markets of any other kind. The financial markets are rigged by the big banks, the Federal Reserve, and the Treasury in the interests of the profits of the few big banks and the dollar’s exchange value, which is the basis of US power.

There is a contradiction between a strong currency on one hand and on the other hand massive money creation in order to sustain zero and negative interest rates on the massive debt levels. This inconsistency is revealed by rising gold and silver prices.

When gold hit $1,900 an ounce in 2011 the Federal Reserve realized that the precious metal market was going to limit its ability to provide enough liquidity to keep the thoughtlessly deregulated financial system afloat. The rapid deterioration of the dollar in terms of gold and silver would sooner or later spill over into the exchange value of the dollar in currency markets. Something had to be done to drive down and to cap the gold price.

The Fed’s solution was to take advantage of the fact that the prices of gold and silver are determined in the futures market where paper contracts representing gold and silver are traded, and not in markets where the physical metal is actually purchased by people who take possession of it. The Fed realized that uncovered short sales provided enormous leverage over the prices of the metals and that it would be profitable for the bullion banks, such as JPMorgan, Scotia, and HSBC, to short the market heavily and then cover their shorts at lower prices produced by selling as a result of triggering stop-loss orders and margin calls.

Dave Kranzler and I have shown on numerous occasions that the bullion banks and the Federal Reserve make profits and protect the dollar by suppressing the prices of gold and silver. They do this by illegally selling huge numbers of uncovered shorts in the futures market. This illegal operation is supported by the so-called “regulatory authorities” who steadfastly refuse to intervene.

It has just happened again. Dave Kranzler describes it in detail here:http://investmentresearchdynamics.com/bullish-news-for-precious-metals-and-goldsilver-get-paper-smashed/

If memory serves, Matt Taibbi explained a few years ago how Goldman Sachs got position limits removed from speculators, so that now speculators can dominate market forces.

Neoliberal economists in service to the financial sector have created a rationale for why interest rates can be negative in the face of massive debt and money creation and a slew of troubled financial instruments from corporate junk bonds to sovereign debt. The rational is that there is too much saving: The excess of savings over investment forces down interest rates. The negative interest rates will discourage people from saving and encourage them to spend, because the price of consumption in terms of foregone future income from saving is zero. It even pays to consume, because saving costs more than it earns.

Two Years Later: Gold Was Right About The ‘Dollar’ As Economists Should Have Been Far Less Giddy About It All

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

A little over two years ago, in the middle of April 2013, there was a gold crash that came seemingly out of nowhere. Worse, for gold investors anyway, that crash was repeated just a few months later. Where gold had stood just shy of $1,800 an ounce at the start of QE3, those cascades had brought the metal price down to just $1,200. For many, especially orthodox economists, it heralded the end of the “fear trade” and meant, unambiguously, that the recovery had finally at long last arrived.

As Felix Salmon wrote at Reuters in an article titled, The Fear Bubble Bursts:

As a result, the falling price of gold is more important than simply being an opportunity for schadenfreude around the likes of Glenn Beck or John Paulson or Zero Hedge…
The biggest problem in the markets right now is that they’re still far too risk-averse. Fear-based assets like gold, Treasury bonds, and cash are in high demand, while there isn’t enough money flowing through greed-based assets like stocks and bank loans and into the economy as a whole. Even if the stock market is expensive, the number of primary and secondary offerings remains low; similarly, banks are not expanding their loan books nearly fast enough…
My hope is that the price of gold will continue to fall, that goldbugs will look increasingly silly, and that as a result Americans with savings will conclude that the best thing to do with those savings is to put them to work in a productive manner, rather than self-defeatingly trying to protect what they have.

Gold has not continued that wished-for collapse, but hasn’t risen much either. In fact, the price of gold remained above $1,300 for only short periods and hasn’t been near that level outside of the January 2015 “Swiss problem.” Most gold analysis views it in terms of not just the “fear bubble” but also a proxy for interest rates and monetary policy. There is already a problem with that latter interpretation, as the price of gold began to its decline almost the moment QE3 started. Economists think of gold investors in only these terms, as emotional and irrational Fed-haters.

In the broader economic context, then, the fact that gold was falling at the same time QE’s had commenced provided that hoped-for economic confirmation. Gold adherents were getting their “debasement” but that gold prices were sharply reacting in the “wrong” direction which could only mean, to the mainline economic view, that QE wasn’t just debasing the dollar it was actually working while doing so.

Writing just prior to the second gold “slam” in June 2013, Nouriel Roubini took his best shots at framing gold’s descent as a victory for Ben Bernanke:

Third, unlike other assets, gold does not provide any income. Whereas equities have dividends, bonds have coupons, and homes provide rents, gold is solely a play on capital appreciation. Now that the global economy is recovering, other assets—equities or even revived real estate—thus provide higher returns. Indeed, U.S. and global equities have vastly outperformed gold since the sharp rise in gold prices in early 2009.
Fourth, gold prices rose sharply when real (inflation-adjusted) interest rates became increasingly negative after successive rounds of quantitative easing. The time to buy gold is when the real returns on cash and bonds are negative and falling. But the more positive outlook about the U.S. and the global economy implies that over time the Federal Reserve and other central banks will exit from quantitative easing and zero policy rates, which means that real rates will rise, rather than fall. [emphasis added]

Roubini’s fourth point may be the most important, as it implies that there is a relationship between the Fed’s policies, especially QE’s, and the rate of inflation. However, recent history, especially in the two years since gold crashed, has proven that totally and fully incorrect. There has been no “inflation” much at all, and even to the point that the Fed’s preferred inflation target, the PCE deflator, has come in under the policy target of 2% for 35 straight months dating back to just before QE3 was rumored.

Memo To Blogger Ben – The TWC/Charter Deal Is A “Bubble” Starring You In The Face

Submitted by David Stockman – The Contra Corner Blog

Its Merger Monday again on this holiday adjusted Tuesday. So the announcement of another humungous debt-fueled M&A deal is right on schedule.

This time it involves the utterly pointless combination of two giant, quasi-monopoly cable companies—–Time-Warner Cable (TWC) and Charter (CHTR)—– that are already on their homeward journey to Joseph Schumpeter’s Walhalla of creative destruction. But not before da boyz in the casino have one last go at a positively lunatic speculation.

To wit, during the last 12 months, TWC and Charter have managed to generate a combined total of $4.6 billion in free cash flow (i.e. EBITDA less CapEx). At the moment the market is valuing their combined TEV at $116 billion. That computes to a free cash flow multiple of 25X!

But that’s not evidence of a bubble. No sir. Over the weekend Blogger Ben assured the world that the financial markets are neither exuberant nor irrational:

BERNANKE: NO LARGE MISPRICINGS IN U.S. SECURITIES, ASSET PRICES

That’s right, the TEV of Charter is $41 billion and today the market is valuing the take-out of TWC at $75 billion. Blogger Ben, do you really think that $4.6 billion of free cash flow in the dying cable industry is worth $116 billion?

Needless to say, Ben couldn’t possibly know. He has been superintending a world of falsified debt prices for so long that he would not recognize an honest cap rate if he saw one. In this case, scroll back 10 years when Ben was heralding the Great Moderation and you will see that TWC and Charter had combined debt of $24 billion.

As of last Friday that number had grown to $44 billion and with the announcement of today’s deal, which contemplates borrowing another $32 billion to pay stockholders $100/share in cash plus munificent deal fees, another huge dollop of debt will be added. So upon deal completion, the cable debt mountain at  the “New Charter” will total $76 billion.

Now lets see. In an honest free market, the risk free 10-year treasury rate would be at least 4%. That assumes 2% inflation, which in fact has been the case for the entirety of this century, and is the holy grail of Fed policy, anyway. Throw on a marginal tax rate above 40% and you still do not have much of an after- tax and after-inflation return.

Then layer on a 500 basis point risk premium for junk debt. While that’s consistent with historic loss rates in the high yield market, it actually does not even begin to account for the risk of loss that will occur when the 33-year bond bubble finally ends. Upon that unavoidable day of reckoning, the scores of zombie companies currently carrying upwards of $4 trillion of junk bonds and loans will be unable to “extend and pretend” when maturities come due massively after 2016. And that’s even before consideration of the fact that the cable industry is an economic dinosaur following in the footsteps of the yellow pages industry. The latter was also massively leveraged 15 years back—-before the whole sector went pear-shaped and ionized billions of junk debt.

In short, the free market debt yield on these newly betrothed dinosaurs would be upwards of 10%, meaning an annual interest bill of $7.6 billion at the indicated $76 billion of borrowings. But don’t ask how the New Charter would pay that interest tab with only $4.6 billion of free cash flow. Ben and Janet have already taken care of that particular inconvenience by herding yield starved “investors” into junk debt at rates 300-500 bps below an honest free market price.

And that’s not all the falsification of prices that you can put at their doorstep in the instant case. The New Charter is not even worth the indicated $76 billion of post-deal debt,  but then you must account for the equity value, too. At today’s close, that particular bubble weighed in at $40 billion.

Yes, the casino is so confident that the Fed will keep debt rates lower for longer and never let a stock market dip turn into a full fledged bust that it is essentially valuing worthless equity at nose bleed prices—-at least long enough for the fast money traders to cash-out their chips.

Indeed, why would any rational investor want to own the New Charter stock, even before it became the proud owner of $76 billion of debt. The fact is, during the last 10 years, the “Old Charter” never generated one dime of free cash flow.

That’s right. During the period 2004-2014 Charter generated  $11.8 billion of operating free cash flow, but consumed $12.7 billion in CapEx. Needless to say, that did not stop the free money carry traders in Ben’s casino from bidding up the stock price of a worthless company by 6X over the last five years alone.

CHTR data by YCharts

Is the Dollar’s Correction Already Over?

Submitted by Pater Tenebrarum  –  The Acting Man Blog

US Dollar – Positioning and Sentiment

Between the summer of 2014 and its recent peak in March this year, the US dollar index was a one-way street – a blow-off like move that mainly mirrored the equally relentless decline in the euro, which has been suffering from the ECB’s misguided ministrations. The euro has the by far largest weighting in the dollar index (nearly 58%). In the meantime, euro area money supply growth has begun to significantly exceed US domestic money supply growth (year-on-year growth in money TMS: euro area 12.4%, US dollar 7.5%) and interest rate differentials have turned in the dollar’s favor as well, so the revival of the dollar does make some sense from a fundamental perspective – only the size of the move has been a surprise. Recently the dollar has gone through its biggest correction since the rally began. Below we will take a look at a wide range of relevant positioning and sentiment data to illustrate where things now stand.

Image via Istock

The dollar index (DXY spot) daily. Given the size and relentlessness of the rally, it seems unlikely that the correction is already finished (this is to say, it is likely to become more complex and drawn out, even though the dollar is currently on a buy signal on the daily chart in terms of MACD and RSI). The declining 50 day moving average may provide resistance – click to enlarge.

It has been quite fascinating to watch moves in the major currencies in the past few years, which are rationalized with what are ultimately only marginal differences in central bank policies and economic performance. Given the thin reed of reasoning behind these moves, their size and persistence has been quite a surprise. However, if one looks at various positioning data, it soon becomes obvious that speculative activity in currencies has soared in recent years, and when a big herd charges, large moves are probably inevitable. A fascinating aspect of this is also that positioning and sentiment extremes have so far proved far less meaningful in foreign exchange markets than in the past – this is to say, they haven’t worked very well as contrary indicators in the short term.

WHY STOCKS WILL CRASH IN TWO CHARTS

Submitted by Jim Quinn  –  The Burning Platform

“Things always become obvious after the fact” – Nassim Nicholas Taleb

“Facts do not cease to exist because they are ignored.”  – Aldous Huxley

The S&P 500 currently stands at 2,126, fractionally below its all-time high. It is now 300% above the 2009 low and 34% above the 2008 and 2001 previous highs. Most people believe this is the new normal. They are comfortably numb in their ignorance of facts, reality, the truth, and the inevitability of a bleak future. When the herd is convinced progress and never ending gains are the norm, the apparent stability and normality always degenerates into instability and extreme anxiety. As many honest analysts have proven, with unequivocal facts and proven valuation measurements, the stock market is as overvalued as it was in 1929, 2000, and 2007.

Facts haven’t mattered, as belief in the infallibility and omniscience of Federal Reserve bankers, has convinced “professionals” to program their high frequency trading supercomputers to buy the all-time high. If central bankers were really omniscient and low interest rates guaranteed endless stock market gains, then why did the stock market crash in 2000 and 2008? The Federal Reserve’s monetary policies created the bubbles in 2000, 2007 and today. There was no particular event which caused the crashes in 2000 and 2008. Extreme overvaluation, created by warped Federal Reserve monetary policies and corrupt Washington D.C. fiscal policies, is what made the previous bubbles burst and will lead the current bubble to rupture.

Benjamin Graham and John Maynard Keynes understood how irrational markets could be over the short term, but eventually they would reach fair value:

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” – Graham

“The market can stay irrational longer than you can stay solvent.” – Keynes

Graham’s quote reflects the difference between hope and reality. This explains the ridiculous overvaluation of Amazon, Shake Shack, Twitter, Linkedin, Tesla, Google, and the other high flying new paradigm stocks. Story stocks soar because the herd believes the stories peddled by Wall Street and company executives. Five of these six stocks don’t have a PE ratio because you need earnings to calculate a PE ratio. In the long run the market will weigh the value these companies based upon profits and cashflow. It is the same story for the market as a whole. There is no question who is to blame for what now amounts to a three headed hydra of bubbles poised to burst.

The Federal Reserve has simultaneously blown bubbles in the stock, bond, and real estate markets by keeping interest rates at 0% for the last six years, three rounds of QE money printing that created $3.6 trillion out of thin air to prop up the insolvent Wall Street banks, and unending jawboning about inflation being too low as real middle class wages stagnate at 1989 levels. There isn’t a question about whether the bubbles exist, only about how much bigger they will become before bursting again. As John Hussman points out, the financial stability of the world will be endangered when the bubbles burst this time.

Washington Protects Its Lies With More Lies

Submitted by Dr. Paul Craig Roberts – Institute for Public Economy

My distrust has deepened of Seymour Hersh’s retelling of the Obama regime’s extra-judicial murder of Osama bin Laden by operating illegally inside a sovereign country.http://www.paulcraigroberts.org/2015/05/11/seymour-hersh-succumbs-disinformation-paul-craig-roberts/ That Hersh’s story, which is of very little inherent interest, received such a large amount of attention, is almost proof of orchestration in order to substantiate the Obama regime’s claim to have killed a person who had been dead for a decade.

Americans are gullible, and thought does not come easily to them, but if they try hard enough they must wonder why it would be necessary for the government to concoct a totally false account of the deed if Washington kills an alleged terrorist. Why not just give the true story? Why does the true story have to come out years later from anonymous sources leaked to Hersh?

I can tell you for a fact that if SEALs had encountered bin Laden in Abbottabad, they would have used stun grenades and tear gas to take him alive. Bin Laden would have been paraded before the media, and a jubilant White House would have had a much photographed celebration pinning medals on the SEALs who captured him.

Instead, we have a murder without a body, which under law classifies as no murder, and a story that was changed several times by the White House itself within 48 hours of the alleged raid and has now been rewritten again by disinformation planted on Hersh.

Perhaps the release of book titles allegedly found in bin Laden’s alleged residence in Abbottabad is part of the explanation. Who can imagine the “terror mastermind” sitting around reading what the presstitute London Telegraph calls bin Laden’s library of conspiracy theories about 9/11 and Washington’s foreign and economic policies? http://www.telegraph.co.uk/news/worldnews/al-qaeda/11619270/Osama-bin-Ladens-bookshelf-featured-conspiracy-theories-about-his-terror-plots.html

Mario Draghi’s Slippery Downward Slope

  Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

Harris&Ewing F.W. Grand store, Washington, DC 1925

Mario Draghi made another huge faux pas Thursday, but it looks like the entire world press has become immune to them, because it happens all the time, because they don’t realize what it means, and because they have a message if not a mission to sell. But still, none of these things makes it alright. Nor does Draghi’s denying it was a faux pas to begin with.

And while that’s very worrisome, ‘the public’ appear to be as numbed and dumbed down to this as the media themselves are -largely due to ’cause and effect’, no doubt-. We saw an account of a North Korean defector yesterday lamenting that her country doesn’t have a functioning press, and we thought: get in line.

It’s one thing for the Bank of England to research the effects of a Brexit. It’s even inevitable that a central bank should do this, but both the process and the outcome would always have to remain under wraps. Why it was ‘accidentally’ emailed to the Guardian is hard to gauge, but it’s not a big news event that such a study takes place. The contents may yet turn out to be, but that doesn’t look all that likely.

The reason the study should remain secret is, of course, that a Brexit is a political decision, and a country’s central bank can not be party to such decisions.

It’s therefore quite another thing for ECB head Mario Draghi to speak in public about reforms inside the eurozone. Draghi can perhaps vent his opinion behind closed doors, for instance in talks with politicians in European nations, but any and all eurozone reforms remain exclusively political decisions, even if they are economic reforms, and therefore Draghi must stay away from the topic, certainly in public. Far away.

There has to be a very clear line between central banks and governments. The latter should never be able to influence the former, because it would risk making economic policy serve only short term interests (until the next election). Likewise the former should stay out of the latter’s decisions, because that would tend to make political processes skewed disproportionally towards finance and the economy, at the potential cost of other interests in a society.

This may sound idealistic and out of sync with the present day reality, but if it does, that does not bode well. It’s dangerous to play fast and loose with the founding principles of individual countries, and perhaps even more with those of unions of sovereign nations.

Obviously, in the same vein it’s fully out of line for German FinMin Schäuble to express his opinion on whether or not Greece should hold a referendum on euro membership, or any referendum for that matter. Ye olde Wolfgang is tasked with Germany’s financial politics, not Greece’s, and being a minister for one of 28 EU members doesn’t give him the liberty to express such opinions. Because all EU nations are sovereign nations, and no foreign politicians have any say in other nations’ domestic politics.

It really is that simple, no matter how much of this brinkmanship has already passed under the bridge. Even Angela Merkel, though she’s Germany’s political leader, must refrain from comments on internal Greek political affairs. She must also, if members of her cabinet make comments like Schäuble’s, tell them to never do that again, or else. It’s simply the way the EU was constructed. There is no grey area there.

John Nash RIP: “Beautiful Mind” Game Theory May Lead to Gold Standard

Submitted by Mark O’Byrne  –  GoldCore

– ‘Beautiful Mind’ Nobel winner Nash dies in tragic crash
– Nash was subject of movie “A Beautiful Mind” with Russell Crowe
– Nash was renowned mathematician who developed game theory
– Game theory suggests that world may be forced back onto a gold standard
– Debased dollar vulnerable to bitcoin, crypto-currencies, silver and gold
– Gold standard could cause a price reset at $10,000

The death of mathematician John Nash on Sunday was met with a degree of sympathy and publicity seldom enjoyed by mathematicians whose contribution to society is usually a quiet, unappreciated one, behind the scenes. The 86 year old was killed with his wife in a tragic taxi accident in New Jersey.

The 2002 movie “A Beautiful Mind” with Russell Crowe popularised the story of his work on game theory – a mathematical study of how decisions are made – and his life with schizophrenia. He developed what became known as the ‘Nash Equilibrium’ for which he won the Nobel Prize for Economics in 1994.

Game theory, according to Wikipedia, is the study of strategic decision making. Specifically, it is “the study of mathematical models of conflict and cooperation between intelligent rational decision-makers.”

The most famous scene from “A Beautiful Mind” shows him applying his nascent theory in a social setting. While he and his college friends sit in a bar drinking a group of girls enter, one of whom is a particularly stunning blonde woman. As the young men prepare to descend upon the girls in an attempt to win the favour of the blonde girl, Nash devises a strategy.

The blonde girl is obviously very used to male attention and it probably earns her the jealous resentment of her friends and so the scenario of a group of young men vying for her attention is not likely to lead to a favorable outcome.

Instead, Nash suggests that his friends focus their attentions on the other girls – ignoring the blonde. The other girls thereby enjoy some male attention perhaps amplified by the satisfaction that the beauty is being left on the shelf. The humbling experience then brings the blonde into the range of the young men whereas, had she received their initial attentions she would likely have been unobtainable.

Pray For Graccident—–It Will Trigger The Demise Of The ECB And The World’s Toxic Regime Of Keynesian Central Banking

Submitted by David Stockman – The Contra Corner Blog

It is not surprising that in a few short months Yanis Varoufakis has proven himself to be a thoroughgoing Keynesian statist. After all, what would you expect from an economics PhD who co-authored books with Jamie Galbraith? The latter never saw an economic malady that could not be cured with bigger deficits, prodigious printing press “stimulus” and ever more intrusive state intervention and redistribution.

In what is apparently a last desperate game theory ploy, however, Varoufakis has done his countrymen, Europe and the world a favor. By informing his Brussels paymasters that they must continue to subsidize his bankrupt Greek state because it is the only way to preserve the European Project and vouchsafe the Euro, the Greek Finance minister blurted out the truth of the matter, albeit perhaps not intentionally:

“It would be a disaster for everyone involved, it would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end for the common currency project in Europe,” he said.

“Whatever some analysts are saying about firewalls, these firewalls won’t last long once you put and infuse into people’s minds, into investors’ minds, that the eurozone is not indivisible,” he added.

He sure got that right. People who believe in democracy and economic liberty anywhere in the world should pray for a Graccident. During the next several weeks, when $1.8 billion in IMF loans come due that Greece cannot possibly pay, there will occur a glorious moment of irony for Syriza.

If it holds firm to its leftwing statist agenda and takes Greek democracy back from the clutches of the EU/IMF apparatchiks, Syriza will strike a blow for democracy and capitalism in one great historic go-round. That is to say, defiance of the Germans and the troika would amount to a modern monetary Marathon; it would trigger a thundering collapse of the ECB and the cancerous superstate regime built upon it in Frankfurt and Brussels—–and, along with it, cast a mortal blow upon the worldwide Keynesian central banking regime, too.

The hour comes none to soon. In a few short years under Draghi and in the context of Europe’s fiscal and economic enfeeblement, the ECB has been transformed into a hideous reverse Robin Hood machine. So doing, it has gifted financial gamblers and front-runners with hundreds of billions of ill-gotten gains in the euro debt markets.

In the days shortly before Draghi issued his “whatever it takes” ukase, for example, the Italian 10-year bond was trading at 7.1%. So speculators who bought it then have made a cool 350% gain if they were old-fashioned enough to actually buy the bonds with cash. And they are laughing all the way to their estates in the South of France if their friendly prime broker had arranged to hock these deadbeat Italian bonds in the repo market even before payment was due. In that case, Mario’s front-runners are in the 1000% club and just plain giddy.

While it is extremely difficult to think of a reason that would justify such wanton redistribution to financial gamblers, the ECB rationale is so astoundingly threadbare as to be laughable. In a word, Draghi and his minions claims that Europe’s economic torpor stems from too little inflation and too little borrowing by private households and businesses. Hence, they have no choice except to drastically falsify prices in Europe’s entire $20 trillion bond market in order to rekindle 2% inflation and get economic growth off the flat line.

Oh, puleeze. The Eurozone economies have had no problem whatsoever in generating an ample quotient of inflation ever since the inception of the single currency—-as if that had anything to do with the growth of real production and wealth anyway.

“Hello Dictator” – Leader of Socialist Superstate Project Meets Magyar Renegade

Submitted by Pater Tenebrarum  –  The Acting Man Blog

Orban Comes Riding Into Town

For many years Hungarian president Viktor Orban has been a thorn in the side of the EU for his, let us say, idiosyncratic insistence to ignore its diktats at every opportunity. This is not to say that we are particularly fond of Orban’s policies or political style, although the mere fact that he goes on the nerves of the bureaucrats in Brussels is of course a major plus.

In one respect Orban proved especially irksome to the ruling classes in Brussels and the rest of Europe: he interfered in the formal “independence” of Hungary’s central bank, and he actually made the banks pay up for the mortgage lending disaster. The latter move was clearly populist and has the obvious drawback of giving people the impression that they bear no personal responsibility for their actions. On the other hand, the banks did make it appear to their customers that taking out Swiss franc denominated mortgage and consumer loans was a virtually risk-free affair, and many financially not overly sophisticated people fell into the trap thus laid for them. Consider the following sub-prime mortgage loan ad Austria’s Raiffeisenbank ran in Hungary in 2007:

We don’t care about your income! NINJA loans, Hungarian style.

Orban rightly concluded that taking on the banks was going to be a vote winner for him. Not surprisingly, a vociferous campaign denouncing him as a tinpot dictator was launched almost immediately. So even though we don’t particularly like Orban and his policies – and Hungary’s extreme nationalism on the coattails of which he is riding – the fact that the Western press descended on him like a pack of vultures should trigger everybody’sSpidey-sense.

Viktor Orban, wearing his Brussels frown

Photo credit: AFP

It should be pointed out though that Orban has in fact instituted numerous more than just dubious policies (as is mentioned below, he has inter alia limited press freedom and curbed the independence of the judiciary. It seems possible that the eurocrats are actually envious). Orban went to the EU summit in Riga this week, in the process providing us with something to write about.

The Daily Debt Rattle

  Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

• We Must Protect Our Children From Austerity (Guardian)
• Greek Hospitals Out Of Painkillers, Scissors And Sheets Due To Austerity (RT)
• The Key To A Greek Economic Revival Has To Be An End To Austerity (Münchau)
• Austerity Is the Only Deal-Breaker (Yanis Varoufakis)
• Greece Is All But Bankrupt (NY Times)
• The World Is Drowning In Debt, Warns Goldman Sachs (Telegraph)
• Investors Are Playing A ‘Greater Fool’ Game (George Magnus)
• Weak Productivity Turns Into A Problem Of Global Proportions (FT)
• Greece, the EU and the IMF Are Dancing With Death (Coppola)
• Greek PM Convenes Emergency Meeting Of His Bailout Team (Guardian)
• Greece’s Governing Left Divided Over Debt Terms (WSJ)
• IMF’s Blanchard Says Greek Budget Proposals Will Not Provide (Reuters)
• Germany And France Agree Closer Eurozone Ties Without Treaty Change (Guardian)
• UK’s Cameron Tells EC President That Europe Must Change (Reuters)
• Banks as Felons, or Criminality Lite (NY Times)
• China Warned Over ‘Insane’ Plans For New Nuclear Power Plants (Guardian)
• Yesterday’s Tomorrowland (Jim Kunstler)
• Flawed Science Triggers U-Turn On Cholesterol Fears (Daily Mail)
• EU Dropped Pesticide Laws Due To US Pressure Over TTIP (Guardian)

Much more here: Debt Rattle May 26 2015 – TheAutomaticEarth.com