Good Luck Finding a Place to Hide as Global Markets Crumble

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By Lisa Abramowicz. Investors tend to respond to impending doom by selling risky stuff and hiding out in safer assets — namely, bonds in places such as Germany and the U.S.

There’s a problem with that formula this time around: Traders aren’t so sure they can find anything that’s truly safe right now. So, instead of piling into sovereign debt of developed nations, traders are pulling their money out of those places as the Greek economy teeters on the brink of collapse, Puerto Rico talks about delaying some debt payments and China’s stock market suffers its biggest selloff since 1992.

Investors yanked $2.9 billion from European government bond funds last week, more than ever before, and pulled $699 million from short-term investment-grade U.S. bond funds, Bank of America Corp. and Wells Fargo & Co. data show. While these assets have traditionally been havens during rocky periods, they look less appealing now after more than six years of unprecedented monetary stimulus that pushed yields to record lows.

Why is that a problem? Well, the European Central Bank’s bond-purchasing program this year sent yields so low (negative, in fact) that investors revolted, selling German debt in the face of some signs of economic growth and causing unprecedented volatility. In the U.S., the economy has improved enough that the Federal Reserve is planning to raise interest rates this year from virtually zero, where they’ve been since 2008 . . .

And nations and companies around the world have taken on unprecedented amounts of debt, all with the hope of igniting some growth, with the results being rather tepid. (Read more from “Good Luck Finding a Place to Hide as Global Markets Crumble” HERE)


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US Financial Outlook Has “Worsened Dramatically”

By Bob Adelmann. In its just-released report “The 2015 Long-Term Budget Outlook,” the Congressional Budget Office stated bluntly:

The long-term outlook for the federal budget has worsened dramatically over the past several years, in the wake of the 2007-2009 recession and slow recovery…. If current law remained generally unchanged in the future … growing budget deficits … would push [the national] debt above its current high level.

It’s all about government spending that’s baked into the cake: the Baby Boomers retiring and asking the government to make good on its Social Security and Medicare promises and the rising costs of healthcare along with “an increasing number of recipients of exchange subsidies and Medicaid benefits attributable to the Affordable Care Act [which will] push up spending … if current laws … remain unchanged,” said the report.

The CBO created two avenues for politicians concerned about the matter to pursue: one, to keep the deficits from going any higher, and the other to bring them back down to historic levels. For the first, taxes would have to increase by $1,450 per person per year, starting immediately, or Social Security benefits would have to be cut by $2,400 per person per year, starting immediately . . .

The report considers the consequences of doing nothing: At some point investors in government bonds would become concerned about getting their money back and would demand higher interest rates to compensate for that risk. This would accelerate the deficits to new levels. As the report noted, “The larger the government’s debt, the greater the risk of a fiscal crisis.” (Read more from “US Financial Outlook Has “Worsened Dramatically”” HERE)

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Greece: How Did It Get Into This Mess?

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At first, the most ambitious attempt ever to create a new multinational currency all seemed to go so well. The predicted problems with banks and vending machines never materialized. The euro surpassed the dollar in value. The launch was hailed as a success.

And yet for Greece, it seems now to have all fallen flat. How did it happen? . . .

2001: Greece became the 12th — and last — country to join the eurozone before the launch of the euro at the beginning of 2002 . . .

But even then, warnings were sounded. The president of the European Central Bank, Wim Duisenberg, warned that Greece had much to do in terms of improving its economy and controlling inflation . . .

2010: In 2009, international investors, understandably spooked by the revelation that Greece’s previously announced debt and deficit figures were inaccurate, became worried about the country’s ability to pay its debts. (Read more from “Greece: How Did It Get Into This Mess?” HERE)

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Greece ‘No’ Vote Hits Euro to U.S. Futures Amid Flight to Safety

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By Emma O’Brien and Benjamin Purvis. Greek voters’ rejection of austerity coursed through financial markets Monday, as Asian stocks and U.S. index futures slipped with the euro and crude oil amid flight to the safest assets. Chinese index futures jumped after the country stepped up efforts to arrest an equity selloff.

The MSCI Asia Pacific Index lost 1 percent by 10:10 a.m. in Tokyo, with Japanese and Korean gauges falling more than 1 percent. Standard & Poor’s 500 Index futures slid 1.2 percent. The euro was down 0.6 percent versus the dollar, paring an earlier drop of as much as 1.3 percent as high-yielding currencies declined while the yen advanced. Treasuries and Asian bonds jumped with credit risk. U.S. oil tumbled 3 percent. FTSE China A50 Index futures rallied 6.3 percent.

Greeks defied opinion polls predicting a tight race, with more than 60 percent voting to reject austerity measures required to win another bailout package. The result means Greece’s exit from the currency union is now the base-case scenario, JPMorgan Chase & Co. said, with European leaders calling for a summit. China suspended initial public offerings and brokerages pledged to buy shares in weekend measures aimed at halting the steepest plunge in local stocks since 1992.

“It’s definitely risk off, markets don’t like uncertainty,” Kumar Palghat, managing director of Kapstream Capital Ltd., which oversees the equivalent of about $6.9 billion in Sydney, said in a Bloomberg TV interview. “The question from the market is, is this going to continue or are they going to come up with a solution? China is more important to Asia than Greece is, but remember we live in a globalized world, so what happens in Greece affects other countries and other regions as well” . . .

With all of the vote counted, support for the “no” camp was at 61 percent, while 39 percent voted “yes” to the demands, according results on the Greek Interior Ministry website. A poll commissioned by Bloomberg had 43 percent voting “no” and 42.5 percent intending to accept creditors’ conditions. The survey had a three percentage-point margin of error. (Read more from “Greece ‘No’ Vote Hits Euro to U.S. Futures Amid Flight to Safety” HERE)


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Sugar, Flour, Rice: Panicked Greeks Stock up on Essentials

By Pauline Froissart. Greeks were hoarding cash and food Saturday amid mounting fears the economy could collapse, cracking open their wallets only to stock up on essentials and stripping supermarket shelves in the process.

Mothers, elderly men and university students were spotted pushing heavily overloaded trolleys or coming out of shops weighed down by bags of food, with essentials such as sugar, flour and pasta top of the list.

In the well-off area of Glyfada in Athens residents appeared to have panicked, thrusting everything from vast rolls of toilet paper to multiple packs of lentils into their carts.

“Most people are buying food now because they fear the worst,” said Andreas Koutras, a 51-year old who works in finance, referring to a referendum Sunday on Greece’s bailout which could seal its financial fate.

AFP photographs showed rows upon rows of empty shelves in supermarkets and shoppers said they were taking no chances, snapping up canned milk, chocolate and rice — anything non-perishable that could be stored. (Read more from this story HERE)

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Rockets Land in Israel, Egypt’s ISIS Affiliate Claims Responsibility

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Militants in Egypt’s Sinai peninsula fired rockets into southern Israel on Friday in an incident that caused no casualties but appeared to be linked to fighting between Islamist insurgents and Egyptian security forces.

Islamic State’s Egypt affiliate, Sinai Province, said in a statement posted on Twitter by supporters that it had launched three Grad rockets toward “occupied Palestine”. Reuters could not immediately verify the authenticity of the statement.

An Israeli military source earlier said the rockets had been fired from Sinai, which borders Israel, the Gaza Strip and the Suez Canal.

Israeli police said they had so far found remnants of two rockets in an open area. No damage or casualties were reported.

It was possible the launch was linked to the fighting in Sinai, the military source said, where militants of the Sinai Province group launched their biggest assault in years against Egyptian security forces on Wednesday. (Read more from “Rockets Land in Israel, Egypt’s IS Affiliate Claims Responsibility” HERE)

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Iran Nuclear Talks in Endgame, Negotiators Push World Toward Apocalypse

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By John Irish and Louis Charbonneau. A year and half of nuclear talks between Iran and major powers were creeping toward the finish line on Friday as negotiators wrestled with sticking points including questions about Tehran’s past atomic research.

Iran is in talks with the United States and five other powers – Britain, China, France, Germany and Russia – on an agreement to curtail its nuclear program in exchange for relief from economic sanctions.

“We are coming to the end,” said a senior Western diplomat, who added there was no plan to carry on for long past next Tuesday. “Either we get an agreement or we don’t.”

Iranian Foreign Minister Mohammad Javad Zarif said a deal was close.

“We are ready to strike a balanced and good deal and open new horizons to address important common challenges,” he said in a statement broadcast on YouTube, referring to the rise of Islamist militancy. (Read more from “Iran Nuclear Talks in Endgame, Negotiators Push on Sticking Points” HERE)

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U.S. Stockpiles Powerful Bunker-Buster Bombs in Case Iran Nuclear Talks Fail

By W.J. Hennigan. As diplomats rush to reach an agreement to curb Iran’s nuclear program, the U.S. military is stockpiling conventional bombs so powerful that strategists say they could cripple Tehran’s most heavily fortified nuclear complexes, including one deep underground.

The bunker-busting bombs are America’s most destructive munitions short of atomic weapons. At 15 tons, each is 5 tons heavier than any other bomb in the U.S. arsenal.

In development for more than a decade, the latest iteration of the MOP — massive ordnance penetrator — was successfully tested on a deeply buried target this year at the White Sands Missile Range in New Mexico. The test followed upgrades to the bomb’s guidance system and electronics to stop jammers from sending it off course.

U.S. officials say the huge bombs, which have never been used in combat, are a crucial element in the White House deterrent strategy and contingency planning should diplomacy go awry and Iran seek to develop a nuclear bomb.

Obama has made it clear that he has no desire to order an attack, warning that U.S. airstrikes on Iran’s air defense network and nuclear facilities would spark a destabilizing new war in the Middle East, and would only delay Iran by several years should it choose to build a bomb. (Read more from this story HERE)

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Greeks Take to the Streets for Dueling Rallies That Reflect a Divided Nation

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By Griff Witte and Michael Birnbaum. Dueling rallies of tens of thousands of people apiece took over central Athens on Friday evening, with demonstrators making their final push before a referendum on Sunday that has passionately divided this flailing nation between those terrified Greece will lose its place in Europe and others determined to transform the continent at all costs.

With Greece’s 19th-century Olympic stadium as a backdrop, “yes” supporters shouted their contempt for the government and demanded an end to the brinkmanship that has characterized the country’s relationship with Europe for the past five months.

Across town, in the shadow of the neo­classical Parliament building, those siding with Greece’s leaders in urging a “no” vote on European bailout proposals swayed to the tunes of revolutionary anthems and pledged not to bend to creditors’ “blackmail.”

“Here in the place where democracy was born,” Prime Minister Alexis Tsipras told an energized crowd that stretched for blocks in every direction, “we will start to rebuild European democracy.”

But beneath the bravado was an emerging recognition within Greece’s radical leftist government that regardless of how Sunday’s referendum turns out, the country may be on the verge of defeat in its epic standoff with European heavyweights over the terms of the country’s bailouts. (Read more from “Greeks Take to the Streets for Dueling Rallies That Reflect a Divided Nation” HERE)


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Greek Bank Closures May Deplete Supermarket Shelves

By Martinne Geller and Lefteris Karagiannopoulos. A halt to international payments from Greek bank accounts is hurting Greek businesses and their foreign partners and threatening supplies of vital goods like food and clothing into the debt-crippled country.

With banks closed, people limited to withdrawing 60 euros ($66.62) per day and Greece’s future in the euro possibly hinging on a referendum on Sunday, Greek shoppers have been stocking up on essentials like sugar, flour, pasta, rice, beans, canned and paper goods.

Shelves remain full for now as retailers have inventories in storage. But capital controls put in place after Greece defaulted on a loan to international creditors have essentially frozen companies’ cash flows and credit.

This has severely hampered production and shipping, meaning that goods are in finite supply. With this week’s rush to supermarkets, shortages could be around the corner although budget limits are providing some cushion.

“At this stage there is no problem of shortages. There is sufficient stock in our warehouses and we renew it frequently,” said Melina Varoutsikou, spokeswoman for Sklavenitis, one of Greece’s largest supermarket chains. (Read more from this story HERE)

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Obama Administration Spied on German Media as Well as Its Government

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An investigation by the German parliament is raising questions on whether the Obama administration not only spied on journalists in that country, but interfered in the exercise of the free press under the guise of U.S. national security.

On Thursday, Germany’s intelligence coordinator, Günter Heiss, testified before a parliamentary investigative committee of the German parliament, the Bundestag, focused on the activities of the U.S. National Security Agency’s spying on Germany and the knowledge and/or role of German intelligence, the Bundesnachrichtendienst or BND.

That the NSA was spying on German officials is not new, though it continues to upset free press advocates and those with memories of repressive governments both Communist and Nazi. That the NSA was spying on German Chancellor Angela Merkel’s cell phone was first reported by German magazine Der Spiegel in 2013 with information gleaned from the stolen then leaked files of Edward Snowden.

On Thursday, WikiLeaks released more information, presumably from that surveillance, with Merkel said “professed to be at a loss” over the Greek financial crisis, and information suggesting that the NSA was spying on German ministers in addition to Merkel. U.S. ambassador to Germany, John Emerson, was summoned to meet with the Chancellery chief of staff Peter Altmaier to discuss the news . . .

CNN has learned that in early Summer 2011, the CIA station chief in Berlin (also representing the NSA at the U.S. Embassy) met with Heiss, and his assistant, Guido Müller. The CIA station chief urged the two men to take action against Heiss’ deputy, Hans-Josef Vorbeck, whom he said was leaking classified information to journalists. (Read more from “Obama Administration Spied on German Media as Well as Its Government” HERE)

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Cruz: ‘Sad’ US Will Have Embassy in Havana Before Embassy in Jerusalem

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By Ian Hanchett. Republican presidential candidate and Texas Senator Sen. Ted Cruz (R-TX) denounced the US opening an embassy in Cuba wondering “How sad is it that under the Obama administration the United States is going to have an embassy in Havana before we have an embassy in Jerusalem?” on Wednesday’s “Hugh Hewitt Show.”

Cruz said, “I think this is a serious mistake. It’s a manifestation of the pattern of weakness and appeasement towards our enemies that has characterized the Obama-Clinton foreign policy. It’s the same pattern that occurred — that is occurring with regard to Russia, with regard to Iran, and it’s a very dangerous pattern. How sad is it that under the Obama administration the United States is going to have an embassy in Havana before we have an embassy in Jerusalem, that this administration will be friendlier to a Communist dictator who hates America and seeks to undermine our nation, than it is willing to stand with our close friend and ally, the nation of Israel? I think it’s wrong.”

Cruz continued, “The very first truth-teller featured in the book is a gentleman named Guillermo Farinas. He was a Cuban dissident. He used to be a member of Castro’s army. He was a Communist. In fact, his nickname was El Coco. And he describes how he went to the Soviet Union and somehow got his hand on a copy of George Orwell’s ‘Animal Farm.’ And it touched him powerfully, and he became a dissident, and he became a critic. He’s been imprisoned, he’s had hunger strikes. And Guillermo, and also another Cuban dissident named Elizardo Sanchez, both came to the United States about a year ago. I interviewed both of them for about a half hour in Spanish. We put out the video interview, but it was interesting, both of them predicted what the Obama administration has done. And both of them said that the Castros are following Putinissimo is what they called it, basically the philosophy of Putin, of appearing to liberalize, while in fact strengthening the repression. What Obama’s doing is sending billions of dollars that will only make the Castros stronger, oppressing, torturing, murdering their people, and also spreading terrorism throughout Latin America.” (Read more from “Cruz: ‘Sad’ US Will Have Embassy in Havana Before Embassy in Jerusalem” HERE)


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Cruz Bashes Obama on Cuba Embassy Opening; Calls It ‘a Slap in the Face’ to Israel

By Latino Fox News. Texas Sen. Ted Cruz lashed out Wednesday at President Barack Obama’s decision to reopen the U.S. embassy in Cuba, calling the move a “slap in the face” to Israel.

The Republican presidential candidate said that Obama’s move was “unacceptable and a slap in the face of a close ally,” The Hill reported.

“The United States will have an embassy in Havana before one in Jerusalem,” he added.

The embassy agreement marks the biggest tangible step toward normalizing relations since the surprise announcement in December that the U.S. and Cuba were restarting diplomatic ties. The posts in Washington and Havana are scheduled to open July 20, Cuba’s Foreign Ministry said.

Cruz, a Cuban-American himself, has repeatedly tried to have the U.S. embassy in Israel moved from Tel Aviv to Jerusalem and, along with Florida Sen. Marco Rubio, has backed legislation to do away with a national security waiver that allows the administration to bypass a 1995 law to relocate the embassy to Jerusalem. (Read more from this story HERE)

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IMF Warns of Huge Financial Hole as Greek Vote Looms

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By David Chance. The International Monetary Fund delivered a stark warning on Thursday of the huge financial hole facing Greece as angry and uncertain voters prepare for a referendum that could decide their country’s future in Europe.

Days after Greece defaulted on part of its IMF debt, the Fund, part of the lenders’ “troika” behind successive international bailouts, said Greece needed an extra 50 billion euros over the next three years, including 36 billion from its European partners, to stay afloat. It also needed significant debt relief.

The assessment, in a preliminary draft of the Fund’s latest debt sustainability report, underlines the scale of the problems facing Athens, whatever the result of Sunday’s referendum on the bailout offered by creditors last month.

Prime Minister Alexis Tsipras’ rejection of what he terms the “blackmail” of EU and IMF creditors demanding spending cuts and tax hikes has so angered Greece’s partners that there is no hope of reconciliation before Sunday.

With banks closed for a fourth day and capital controls in place, the future of the left-wing government hangs on the result, given the angry mood of voters in Greece, torn between resentment of the lenders and scorn for their own politicians. (Read more from “IMF Warns of Huge Financial Hole as Greek Vote Looms” HERE)

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‘Yes’ Camp Takes Slim Lead in Greek Bailout Referendum Poll

By Lefteris Karagiannopoulos and George Georgiopoulos. Supporters of Greece’s bailout terms have taken a wafer-thin lead over the “No” vote backed by the leftist government, 48 hours before a referendum that may determine the country’s future in the euro zone, a poll showed.

The opinion poll by the respected ALCO institute, published in the Ethnos newspaper on Friday, put the “Yes” camp on 44.8 percent against 43.4 percent for the No” vote. But the lead was within the pollster’s 3.1 percentage point margin of error, with 11.8 percent saying they are still undecided.

With banks shuttered all week, cash withdrawals rationed and commerce seizing up, the vote could decide whether Greece gets another last-ditch financial rescue in exchange for more harsh austerity measures or plunges deeper into economic crisis.

It could also determine whether Greece becomes the first country to crash out of the 19-nation European single currency area, membership of which is meant to be irrevocable.

The survey found that 74 percent of Greeks want to stay in the euro, while just 15 percent want to return to a national currency, with 11 percent undecided. (Read more from this story HERE)

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Economic Exodus Means Two-Thirds of Puerto Ricans May Soon Live in US

By Alan Yuhas. Facing a crisis of monumental proportions at home, tens of thousands of people are fleeing a Caribbean island in search of a better life in the United States only to find hardship and struggle on American shores. Their stories sound like those of millions of migrants – poverty at home, where the economy lies in tatters – but they differ from millions of others: they’re already American.

Unable to pay its $73bn debt, Puerto Rico has begun rationing water, closing schools and watching its healthcare system collapse and 45% of its people living in poverty. Emigration to the mainland has accelerated in recent years, activists say, and data shows that from 2003 to 2013 there was a population swing of more than 1.5 million people.

“This new wave of immigration can be compared with the immigration in the 1930s and 40s,” said Edgardo González, coordinator of the Defenders of Puerto Rico, an activist group. The Great Depression and second world war spurred the so-called “Great Migration”, when tens of thousands of Puerto Ricans moved to New York every year for nearly two decades.

Now most Puerto Ricans are arriving in central Florida, González said, but many cannot find jobs or even housing. “Some might stay with family for a few weeks, but for those who don’t have family, people end up homeless because of the lack of services,” he said.

“People end up living in hotels, living in cars or on the street. Then you have people who are homeless with kids, who get in trouble with the law, and you have to get into it with childcare and welfare services.” (Read more from this story HERE)

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Volcanic Activity, Earthquake Fears Increasing Worldwide

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Photo Credit: APBy The Japan Times. Authorities on Tuesday raised the volcano alert for Mount Hakone in Kanagawa Prefecture, restricting access to the area after a small eruption at the popular tourist site.

The Meteorological Agency said it confirmed volcanic ash was emitted from the area, which has been venting unusual amounts of steam in recent months.

The agency said the ash deposits indicate that a small eruption occurred between Monday evening and Tuesday.

Mount Hakone, about 80 km south of Tokyo, last erupted between the late 12th century and 13th century, according to experts.

Volcanic activity in the area began intensifying in late April but recently showed signs of subsiding. (Read more from “Volcanic Activity, Earthquake Fears Increasing Worldwide” HERE)

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62: Indonesia Raises Alert as Mt Raung Volcano Erupts

By Channel News Asia. Indonesian authorities on Monday (Jun 29) raised the alert level after Mount Raung in East Java erupted, causing ash to land in surrounding villages.

The eruption at Mount Raung on Sunday evening was heard 20 kilometres away, and ash fall was seen in villages about 10 kilometres away from the summit. Aircraft pilots also reported seeing large amounts of ash at a height of 3,500 metres.

Authorities cordoned off a two-kilometre radius around the volcano, and raised the alert level to “Siaga”, the second highest level. (Read more from this story HERE)

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Fear of Volcano Eruption in Ukhrul, as Fire Gushes From the Ground

By Nagaland Post. A continuous flow of smoke and ashes from a swamp at a place near Old Wahong village of Manipur’s Ukhrul district has left villagers fearing of natural calamity in the form of volcanic eruption any time, a daily reported Tuesday.

Villagers said that smoke radius of about two feet along with ashes have been seen gushing out from the earth’s surface at Shitru area, since last two weeks.

Shitru is located a place border Manipur, Nagaland and Myanmar.

Villagers and onlookers feared volcanic eruption at the area in a short time. (Read more from this story HERE)
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Los Angeles Grows Even More Nervous About the ‘Big One’

By Yahoo News. When hi-tech movies are then replicated in life – we see it as a positive step forwards.

However, no-one wants to see disaster movies repeated in real-life, but it looks like LA may be on the verge of getting the ‘San Andreas’ treatment.

Geologists from UC Santa Barbara have found helium leaking from the Newport-Inglewood fault in central Los Angeles increasing the potential damage of an earthquake on the mega city.

This discovery comes after the US Geological Survey warned that the city is building up to a ‘big one’ in the next 30 years with chances of a magnitude 8 earthquake hitting the mega-city increasing from 4.7 to 7 per cent. (Read more from this story HERE)

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