Our “Storm Warning” for the Year Ahead …

Submitted by William Bonner, Chairman – Bonner & Partners

Our “Storm Warning” for the Year Ahead …


Ils viennent jusque dans vos bras / They’re coming right into your arms

Égorger vos fils, vos compagnes! / To cut the throats of your sons, your women!

Aux armes, citoyens / To arms, citizens

Formez vos bataillons / Form your battalions

Marchons, marchons! / Let’s march, let’s march!

Qu’un sang impur / Let an impure blood

Abreuve nos sillons! / Soak our fields!

– “La Marseillaise”


Choppy Waters

PARIS – And so the old year ended…


closerie des LilacsLa Closerie has been around for some time – and it seems it has always been popular.


The Closerie des Lilacs brasserie was packed. Every table was taken. On the corner of the Boulevard de Montparnasse and the Boulevard Saint-Michel, this was one of Hemingway’s favorite restaurants. It is now popular with tourists as well as locals.

Coming in, we heard familiar American accents behind us, but almost everyone else appeared to be native to the city. It was bright, the way brasseries are supposed to be…

“The way things are supposed to be” is our beat at the Diary. The way they really are is beyond us. Far too complex. Infinitely nuanced. Mind-blowingly intricate.

“Is,” as President Clinton noted, is too high a standard. “Ought to be” is the best we can do. Only the gods can know what is really going on. All we can do is to observe certain superficial patterns and rules – like waves on the surface of a deep sea – and wonder how they might slap against our little bark. Continue reading

The Rule Of Law No Longer Exists In Western Civilization

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

My work documenting how the law was lost began about a quarter of a century ago. A close friend and distinguished attorney, Dean Booth, first brought to my attention the erosion of the legal principles on which rests the rule of law in the United States. My columns on the subject got the attention of an educational institution that invited me to give a lecture on the subject. Subsequently, I was invited to give a lecture on “How The Law Was Lost” at the Benjamin Cardozo School of Law in New York City.

The work coalesced into a book, The Tyranny Of Good Intentions, coauthored with my research associate, Lawrence M. Stratton, published in 2000, with an expanded edition published in 2008. We were able to demonstrate that Sir Thomas More’s warning about prosecutors and courts disregarding law in order to more easily convict undesirables and criminals has had the result of turning law away from being a shield of the people and making it into a weapon in the hands of government. That is what we witness in the saga of the Hammonds, long-time ranchers in the Harney Basin of Oregon.

With the intervention of Ammon Bundy, another rancher who suffered illegal persecution by the Bureau of Land Management but stood them off with help from armed militia, and his supporters, the BLM’s decades long persecution of the innocent Hammonds might have come to a crisis before you read this.

Bundy and militiamen, whose count varies from 15 to 150 in the presstitute media, have seized an Oregon office of the BLM as American liberty’s protest against the frame-up of the Hammonds on false charges. As I write the Oregon National Guard and FBI are on the way.

The militiamen have said that they are prepared to die for principles, and the rule of law is one of them. Of course, the presstitute media is making the militiamen into the lawbreakers—and even calling them terrorists—and not the federal government’s illegal prosecution of the Hammonds, whose crime was their refusal to sell their ranch to the government to be included in the Masher National Wildlife Refuge.

If there are only 15 militiamen, there is a good chance that they will all be killed, but if there are 150 armed militiamen prepared for a shootout, the outcome could be different. Continue reading

Brave New World of Bank Bail-Ins As Of January 1st

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

In September 1979, the Federal Reserve Bank of St. Louis published a paper that attempted to clarify the monetary and economic characteristics of repurchase agreements. The name itself offers little but further confusion as prior to the 1990’s repos could be classified as either collateralized loans or actual sales and purchases depending on individual circumstances. In some cases, the two counterparties on a repo might simultaneously structure each of their end of the transaction as the opposite condition; consistency was a matter of idiosyncrasy. The Federal Reserve itself used such flexibility in originally conducting open market operations, as the Fed holds absolutely no statutory authority to engage in collateralized lending of this kind, but does hold legal standing with which to buy and sell government bonds.

In 1961, the Federal Reserve voted to reauthorize, or rather reaffirm what it believed existing authorization, of the FOMC to engage in repurchase agreements with non-bank securities dealers at less than the Discount Rate. In the Fed’s 48th Annual Report, it is noted that Governor J.L. Robertson dissented from that vote in further expressing, “the opinion that repurchase agreements were in fact not purchases of securities in the open market, such as the Reserve Banks were authorized by law to enter into, but instead were loans to dealers at fixed interest rates that were not related to the yield on the securities.” That made them, to Governor Robertson at least, dubious monetary instruments and Open Market policy. Continue reading

Brave New World of Bank Bail-Ins As Of January 1st

Submitted by Mark O’Byrne  –  GoldCore

On January 1st, 2016, the new bail-in regime became law putting at risk the deposits of savers and companies in the EU.

EU countries join the UK, the U.S., Canada, Australia and New Zealand in having plans for bail-ins in the event of banks and other large financial institutions getting into difficulty. It is now the case that in the event of bank failure, personal andcorporate deposits could be confiscated.

The bail-in architecture was seen in the Cyprus bank bail-ins that were seen in 2003. Then, deposits of over €100,000 were confiscated in “haircuts” in order to bail out banks in Cyprus.  Now the exact same principles that were used in Cyprus – which we were told was unique and a one off – are going to apply to all of Europe. Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth


• The $289 Billion Wipeout That Blindsided US Bulls (BBG)
• A Stock Market Crash Of 50%+ Would Not Be A Surprise (BI)
• Bank of America Thinks The Probability Of A Chinese Crisis Is 100% (ZH)
• China Injects $20 Billion Into Markets, Hints At Curbs On Share Sales (Reuters)
• China Said to Intervene in Stock Market After $590 Billion Rout (BBG)
• China Rail Freight Down 10.5% In 2015, Biggest Ever Annual Fall (Reuters)
• China Could ‘Spook’ Global Markets Again in 2016: IMF Chief Economist (BBG)
• Supermines Add to Supply Glut of Metals (WSJ)
• Debt Payments Set To Balloon For Detroit Public Schools (DN)
• New Year Brings Financial Headache For Millions Of British Families (Guardian)
• Brazil Heads for Worst Recession Since 1901 (BBG)
• Volkswagen Faces Billions In Fines As US Sues In Emissions Scandal (Reuters)
• Portugal’s Bank Bail-In Sets a Dangerous Precedent (BBG)
• Russia Stands Up To Western Threats, Pivots To East (Xinhua)
• Will US Fall For Saudi’s Provocation In Killing Of Shia Cleric? (Reuters)
• Pretend to the Bitter End (Jim Kunstler)
• Fortress Scandinavia Sinks Into Blame Game Over Refugee Crisis (BBG)
• Bodies Of Four Migrants Found In Eastern Aegean (Kath.)
• Nine Drowned Refugees Wash Up On Turkish Beach (AP)