Getting To Know Him..Dr. Dan Stolebarger

Spain Borrowing Costs Triple In One Month

Not much to add to Reuters summary of the overnight Spanish bill auction. The good news: the country that is not Uganda sold €3.08 billion compared to a range sought of €2-3 billion. The bad news: the price paid to sell this debt more than makes up for any optics that this was a good deal. "Spain's short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country's precarious finances as it struggles against recession and juggles with a debt crisis among its newly downgraded banks. The yield paid on a 3-month bill was 2.362 percent, up from just 0.846 percent a month ago. 

For six-month paper, it leapt to 3.237 percent from 1.737 percent in May... Spain sold 3.08 billion euros of its short-term debt on Tuesday, slightly above its target amount, even as the Treasury paid the highest rates to sell the paper since November and met with falling demand from the country's struggling banks. The Treasury sold 1.6 billion euros of a 3-month bill, and 1.48 billion euros of a 6 month bill, which together was just above the 2-3 billion euro target set. 

The Treasury has overshot its sales target in recent auctions, showing it still is capable of selling its debt even if has to rely on domestic banks to do so as international investors avoid Spanish debt." Here's a hint to whoever is pretending to be in charge of Spanish finances: selling more debt than the "max" just to show you still have bond market access (i.e., debt bought by just downgraded Spanish banks) while paying ridiculous interest on this "optical success" is about the dumbest thing a broke country can do. But who are we to judge. We will leave that to the bond market. Below we show the yield on the Spanish 10 Year, which in two days has retraced the entire move tighter in the past week.

Zero Hedge

Moody's downgrades $64 billion of U.S. muni debt

Moody's Investors Service on Friday cut ratings on $64 billion of municipal bonds, including debt owed by 1,675 local and state governments, because the obligations rely on 15 global banks the Wall Street credit agency sees as less steady.

Moody's on Thursday downgraded big banks such as Citigroup that provided "letters of credit, standby bond purchase agreements, and other liquidity facilities" backing $45 billion of tax-free debt.

Separately, Moody's said it was also reducing ratings on $19 billion of pre-paid natural gas bonds issued by 24 utilities in Tennessee, Kentucky, Texas and elsewhere because the downgraded banks support certain payment obligations on the bonds.

Moody's cut the credit ratings of 15 of the world's leading banks by one to three notches to reflect rising risks of losses they face in volatile capital markets.

Such ratings cuts typically hurt prices of outstanding bonds and raise interest rate costs for issuers, but they had little effect on Friday on muni bond prices.

The lion's share of the state and local government debt downgrades - 1,163 - hit obligations that were rated solely on the support provided by the downgraded banks.

The short-term ratings of 152 U.S. municipal obligations that were rated based on standby bond purchase agreements and other third party supports also were cut.

Also downgraded were short-term ratings of 137 series of tender option bonds that relied on third party facilities. Tender option bonds typically have floating rates and carry a promise that the holder can sell the security at certain times.

The long-term ratings of 40 series of tender option bonds were cut if their underlying asset was a custodial receipt whose rating depends on support from one of the 15 banks.

Some 223 public finance sector obligations supported by letters of credit were downgraded because their long-term ratings were based on a joint default analysis, Moody's said.

The agency said the downgrades of the two dozen issues of gas prepayment bonds, a form of debt public utilities use to lock in discounted supplies of fuel, were also knock-on actions from Thursday's rating cuts.

Citigroup, Goldman Sachs Group, Inc, Credit Agricole Corporate & Investment Bank, JPMorgan Chase, Morgan Stanley, Royal Bank of Canada and Societe Generale were among the banks downgraded, Moody's said.


Reuters

MSM Admits Alex Jones is Right! Banking Cartel Runs It All

IDF to deploy radar systems along Egyptian border

The IDF has decided to deploy radar systems along the border with Egypt to detect and warn of rocket attacks.

The radar systems will be similar to those that are deployed along Israel’s border with the Gaza Strip and Lebanon and are used to detect the launching of rockets into Israel and assist in determining their trajectory as well as the projected target.

The information produced by the radar is then transmitted to the Home Front Command – which is responsible for activating early warning systems like air sirens – to alert residents of the areas about to be hit.

The decision to deploy the radar systems along the border comes amid concern that terror groups operating in Sinai will escalate their rocket attacks against Israel. The IDF believes that groups based in Gaza are operating freely in Sinai and in some cases even activate local Beduin to carry out attacks on their behalf.

Earlier this month, two 122- mm. Katyusha rockets were fired from Sinai and landed near Mitzpe Ramon and Uvda.

In April, a Grad-model Katyusha struck Eilat.

Israel has called on the Egyptian government to increase its efforts to regain control over Sinai and to root out terror groups which operate there. However, predictions are that this will not happen, particularly following the announcement on Sunday that Mohamed Morsy of the Muslim Brotherhood was elected president.

“The more significant problem is what’s happening in Sinai, where terror bases are being established and we expect the Egyptians to restore their sovereignty there,” IDF Chief of Staff Lt.-Gen. Benny Gantz said last Tuesday.

Under the current setup within the military, the Israel Air Force is responsible for operating the radars and detecting incoming aerial threats like missiles, and the Home Front Command is responsible for activating early warning systems like air raid sirens.

The two branches currently operate individual commandand- control centers in the Kirya military headquarters in Tel Aviv but there are plans to combine the two as part of an effort to increase coordination and shorten the time it takes from detection until sirens are sounded.

Jerusalem Post

Tropical Storm Debby breaks record with early debut

An unusually early spate of tropical storms has been keeping forecasters busy this year, and now Tropical Storm Debby, the fourth named storm of the Atlantic hurricane season, has set a record – this season marks the first time in more than 150 years that so many storms have showed up so early. “This is first time we’ve had four tropical storms develop in the Atlantic basin before July 1,” said Dennis Feltgen, a meteorologist and spokesman for the National Hurricane Center in Miami, Fla. U.S. records for tropical storms and hurricanes stretch back to 1851, Feltgen told OurAmazingPlanet. 

And although Tropical Storm Debby has broken the century-and-a-half-long record, there is certainly a chance that four storms may have formed this early in the past, yet escaped notice simply because forecasters didn’t have the tools to see them. “We figure that back in the day there could have been several storms per season that could have been missed,” Feltgen said. “We didn’t have satellites.” Forecasters relied largely on ship reports and on firsthand observations when a storm hit land.

Where is Debby going? Forecast models show Debby making landfall along the northern Florida Gulf Coast later this week. Dubbed “Debby Downer” in some local media reports, it could dump more than a foot (30 cm) of rain in some areas of the state, with isolated amounts of more than two feet in north Florida, the hurricane center said. Flash flood warnings were in effect for many areas, including some where streets were already under water, and emergency management officials cautioned that inland flooding was associated with more than half the deaths from tropical cyclones in the United States over the last 30 years.

The Extinction Protocol

Putin: Don't rush to strike Iran

President Vladimir Putin expressed his reservations over the prospect of a military strike in Iran, urging Israel Monday to learn from negative US experience in Afghanistan and Iraq.

Putin's comments were made in a meeting with Shimon Peres in Jerusalem, after Israel's president asked the visiting leader to speak out on the Iran issue.

"Look at what happened to the Americans in Afghanistan and in Iraq. I told Obama the same thing," the visiting president said in a meeting with his Israeli counterpart, cautioning against hasty military action. "There is no need to do things too quickly; one should not act without thinking first."

"Iraq has a pro-Iranian regime after everything that has happened there. These things should be thought out ahead of time before doing something one will regret later," he said. "One should not act prematurely."

'Russia wants peace for Israel'

Earlier in the evening, Putin said that his country "has a national interest in guaranteeing peace and tranquility for Israel."

The Russian president noted that the former Soviet Union supported the State of Israel's establishment, adding that his talks earlier Monday with Prime Minister Benjamin Netanyahu were constructive and pertained to the need to boost strategic ties between the two countries.


Friendly visit (Photo: Gil Yohanan)

Speaking at a state dinner held for his Russian counterpart, Peres expressed his hope that Putin would contribute to the achievement of peace in the region, making note of his "warm attitude" towards the Jewish state.

Peres added that "the Iranian people are not our enemy. Israel does threaten their existence. It is Iran's current regime that indentifies itself as an enemy of Israel and a threat to its existence."

BIbi: Israel, Russia agree on Iran

Israel and Russia agree that Iranian nuclear weapons would constitute grave danger for the Jewish state and for the whole world, PM Netanyahu said earlier Monday following his meeting with Putin.

"I believe that we should be doing two things now: Boosting the sanctions (on Iran) and also boosting the demands," Netanyahu said.


Putin and Netanyahu (Photo: Marc Israel Sellem)

The Russian president said the two leaders "spoke in detail about the Syria issue and about the Iranian nuclear program."

"I would like to stress again that the negotiations were detailed and very effective," he said. "I'm convinced that the cooperation between Russia and Israel will develop later as well, and this matter certainly meets the demands and interests of both states, in the region and in the world at large."

'Friendly ties'

Speaking to the media after meeting PM Netanyahu, Putin thanked Israel's leadership for inviting him to visit.

"My visit here reinforced the assumption that we have friendly relations, and these are not just friendly relations," Putin said. "This is a solid basis for building dialogue and partnership."


Putin greeted by PM's wife (Photo: Amos Ben Gershom, GPO)

Earlier Monday, President Peres greeted Putin in a dedication ceremony for a memorial to the Red Army’s victory over Nazi Germany in Netanya. Peres said he is certain that Russia, which fought fascism, will not tolerate similar threats, "not an Iranian threat and not bloodshed in Syria."


Signal to Egypt

During Monday's press conference, Netanyahu also addressed regional realities, referring to the Islamist victory in Egypt's presidential elections.

The PM said that Israel "appreciates the democratic process in Egypt" and respects the Egyptian election results.

"We look forward to working together with the new administration on the basis of the peace agreement between us," Netanyahu said. "I believe peace is important for Israel. I believe peace is important for Egypt."

Meanwhile, President Putin addressed the Israeli-Palestinian conflict, asserting that "against the backdrop of events in the Middle East, it is important to resolve longtime conflicts."

"We urge all sides to renew negotiations; this is the only way to resolve the problem," the Russian president said.

Ynet

Massive explosion in UK

Mohammed Morsi - "Our Capital Shall Be Jerusalem, Allah Willing"

Supreme Court Makes German Parliament the Most Powerful in Europe

The German Parliament needs to be involved at an earlier stage of European Union negotiations, the German Constitutional Court ruled June 19, meaning the German Parliament will be more involved in treaty negotiations than any other national parliament. The ruling gives Germany a greater say in EU decisions and makes it harder for German Chancellor Angela Merkel to make tough concessions to Europe.

Even before the ruling, Mrs. Merkel’s situation was difficult. EU nations would criticize every deal she offered as being too stingy. Then her M.P.s would criticize them for being overly generous. So far, she’s just about managed to persuade both parties to accept the deals.

Now her life will get much harder. When negotiating treaties, the German Constitution requires “the government to inform lawmakers comprehensively and at the earliest possible time,” said the court. “The information must enable parliament to early and effectively influence the government’s decision-making.”

Rather than being forced to accept a fait accompli, parliament will be able to restrict what concessions the chancellor can offer right from the start. Persuading Germany to accept euro bonds, for example, just got a whole lot harder.

Under the German Constitution, parliament must participate in all matters relating to EU integration. The government argued that recent bailout negotiations are not covered by this provision, as the new bailout funds aren’t EU institutions. The court disagreed, saying “EU matters do include such treaties if they add to, or are particularly close to, the law of the EU.”

The ruling is similar to a 2009 decision where the court said that parliament must approve all German military deployments, even if they are under the aegis of the EU. The ruling effectively gave parliament veto power over the EU’s military deployments. “Through this ‘trick’ of the German Constitutional Court, Germany must give the ‘go’ on any deployment of any EU battle group,” wrote Trumpet columnist Ron Fraser at the time.

This new ruling may have a similar effect, giving the German Parliament an effective veto over EU integration. The desires of Germany will certainly be given much greater consideration in future negotiations. All other national parliaments of EU states will only be able to accept or reject the final deal—often under heavy pressure. Only the German Parliament will be involved in the writing of new treaties right from the start.

The Constitutional Court already has a veto over EU integration. On June 21, the court asked the German president to delay signing the latest EU treaties—the new bailout fund and the fiscal pact—into law, saying the government pushed the legislation through parliament too quickly. The treaties haven’t yet been approved, but Chancellor Merkel wanted them signed into law by July 1.

This is just the latest Constitutional Court intervention in EU integration. When has the court of any other nation interfered with European integration?

Trumpet editor in chief Gerald Flurry warned in 2010: “Judicially, Germany is the only nation boasting a high court, the German Constitutional Court, whose power exceeds that of the European Court of Justice! The powers of the latter trump all judicial powers of the individual high courts of the other EU member nations” (emphasis his).

The June 21 ruling is just more proof of this. And the most powerful court in Europe has also made Germany’s parliament the most powerful parliament in Europe, at least when it comes to treaty negotiation. Could it get any more obvious who is controlling the EU?

The ruling shores up German control over EU integration. Progress can only be made on German terms. The golden rule—he who has the gold rules—already gave Germany most of the power in these negotiations. The court ruling makes this clearer and sends a message to the eurozone: Unless Germany gets the concessions it wants, there will be no bailout. It’s not just a case of convincing the German chancellor, but the German Constitutional Court and parliament as well.

Faced with massive unemployment and social unrest, the eurozone will have no choice but to accept Germany’s terms. •
The Trumpet

US and Israel to hold largest ever joint military exercise

Israel and the US are set to hold their largest ever joint military exercise in October, featuring thousands of soldiers and advanced anti-missile defense systems, and simulating simultaneous fire from Iran and Syria.

News of the drill comes amid ongoing violence in Syria, and with Israel and the US closely discussing the means to thwart Iran’s nuclear drive. The commander of the 3rd Air Force, Lt.-Gen.Craig A. Franklin, on a recent visit to Israel, established a planning committee with representatives of the IDF to coordinate the details of the exercise, the Maariv Hebrew daily reported Monday. Some 3,000 US soldiers are to participate, alongside thousands of Israeli troops.

The drill will simulate missiles being fired at Israel from Iran and Syria simultaneously, with potentially tens, if not hundreds, of rockets mid-air at the same time. Israel will test its upgraded Arrow 2 defense system, while the US will deploy the Aegis Ballistic Missile Defense System andPAC-3 Patriot air defense platforms.

According to Maariv, some military analysts have nicknamed the exercise a “dress rehearsal” for a potential military conflict, noting that it will send a clear message to Iran at a time during which the impact of international sanctions, or lack thereof, will be clearer.

News of the drill comes shortly after talks between world powers and Iran regarding Tehran’s nuclear program broke up without progress in Moscow.

Times of Israel

The USA Biggest Economic Problem

What is the biggest economic problem that the United States is facing?  Very simply, our biggest problem is that we have way too much debt.  Over the past 30 years, household debt, corporate debt and government debt have all grown much faster than our GDP has.  But no nation on earth has ever been able to expand debt much faster than national output indefinitely.  All debt bubbles eventually burst.  Right now, we are living in the greatest debt bubble in the history of the world.  All of this debt has fueled a "false prosperity" which has enabled many Americans to live like kings and queens.  But no nation (or household) can pile on more debt forever.  At some point the weight of the debt becomes just too great.  It is amazing that the United States has been able to pile up as much debt as it has.  Over the years, many authors have predicted that U.S. government finances would collapse long before the U.S. national debt ever got to this level.  So the mountain of debt that we have accumulated is quite an "achievement" if you want to look at it that way.  But the clock is ticking on this debt bubble and when it collapses we will say "bye bye" to our vastly inflated standard of living and we will discover that we have destroyed the economy for all future generations of Americans.

Household Debt

Sometimes a picture is worth a thousand words.  When most Americans think of the "debt problem" in this country, they think of the debt of the federal government.

But that is not the only debt bubble that we are facing.

Thirty years ago, household debt in the United States was approaching the 2 trillion dollar mark.  Today, it is sitting at about 13 trillion dollars....

We have been trained to pay for everything with debt.

We pay for our homes with debt, and mortgage debt as a percentage of GDP has more than tripled since 1955.

We pay for our cars with debt, and at this point about 70 percent of all auto purchases in the United States involve an auto loan.

We pay for higher education with debt, and the total amount of student loan debt in America recently surpassed the one trillion dollar mark.

Wherever we go we pay with plastic.

If you want a heated cat bed and a cute little cat sweater for your little kitty just put it on your Visa or Mastercard.

Amazingly, consumer debt in America has risen by a whopping 1700% since 1971, and if you can believe it, 46% of all Americans carry a credit card balance from month to month.

We are absolutely addicted to debt and we do not know how to stop.

State And Local Government Debt

Our state and local governments are also addicted to debt.

30 years ago, state and local government debt was approaching the 400 million dollar mark.  Today, state and local government debt is hovering around the 3trillion dollar mark....

In the United States today, we don't just have one "government debt problem" - the truth is that we have hundreds of them.  All over the country, state and local governments are facing bankruptcy because of too much debt.

For example, according to Fox News the city of Stockton, California is right on the verge of declaring bankruptcy.  In fact, an announcement could come as early as this week....

Stockton, Calif., is set to declare bankruptcy as early as this week, according to local officials, a move that would make it one of the largest U.S. cities ever to file for reorganization. 

On Monday, a state-required mediation with creditors to find a fiscal solution is scheduled to expire. Stockton's City Council is then slated to meet Tuesday to decide whether to adopt a budget for operating in bankruptcy, a move widely considered the last step before the city formally submits a Chapter 9 petition to federal bankruptcy court. 

Federal Government Debt

Of course the biggest offender of all is the federal government.  30 years ago, Ronald Reagan was running around proclaiming what a nightmare it was that the U.S. national debt was reaching the one trillion dollar mark.

Well, now we are about to blast through the 16 trillion dollar mark with no end in sight....

Running up debt at a much faster rate than our GDP is rising is a recipe for national financial suicide.  Our politicians continue to steal about 150 million dollars an hourfrom future generations and everybody just acts like this is perfectly normal.

We are going down the same path that Greece, Portugal, Italy, Ireland and Spainhave gone.

In fact, we already have more government debt per capita than all of those nations do.

Both political parties have been doing this to us, and it just keeps getting worse and worse.

Incredibly, the national debt has grown more under Obama in less than 4 years than it did under George W. Bush during his entire 8 year term.

Since Barack Obama entered the White House, we have accumulated more thanfive trillion dollars of additional debt.

We are on the road to national financial oblivion, and most Americans don't seem to care.

Debt From Sea To Shining Sea

Now let's add up all the debt in the country.  When you total up all household debt, business debt and government debt, it comes to more than 300% of our GDP....

In fact, if current trends continue we will hit 400% of GDP before too long.

As you can see from the chart, there was a little "hiccup" during the last recession, but now the debt bubble is growing again.

So how high can it go before the entire system collapses?

Total credit market debt owed is roughly 10 times larger than it was about 30 years ago.

How in the world did we accumulate 10 times more debt in just 30 years?

If we do that again in the next 30 years, our total debt will be more than 500 trillion dollars in the 2040s.

Unfortunately, that is the way that debt spirals work.  They either have to keep expanding or they collapse.

So will the U.S. debt spiral continue to expand?

Or will we soon see a collapse?

Sadly, this exact same thing is happening all over the world.  The government debt to GDP ratio in Japan (the third largest economy in the world) blew past the 200% mark quite a while ago, and almost every country in the EU is absolutely drowning in debt.

The world has never faced anything quite like this.  There is way, way too much debt in the world, but the only way we can continue to enjoy this level of prosperity under the current system is to pile up a lot more debt.

The western world is like a debt addict in a deep state of denial.  Some debt addicts end up with dozens of credit card accounts.  They will keep opening more accounts as long as someone will let them.  Most debt addicts actually believe that they will be able to get out of the hole at some point, but most never do.

Most Americans still believe that we are experiencing "temporary" economic problems that will eventually go away.  Most Americans still believe that even greater prosperity is still ahead.

Sadly, what the mainstream media and the two major political parties are telling them is a bunch of lies.

We have enjoyed the greatest prosperity that we will ever see in the United States, and when the debt bubble bursts there is going to be an immense amount of pain.

That is a very painful truth, but it is better to come to grips with it now than be blindsided by it later.

Economic Collapse

Greek finance minister Vassilis Rapanos resigns after illness......

Greece's finance minister, Vassilis Rapanos, resigned on Monday after being ill in hospital for several days. The prime minister's office said that Mr Rapanos had sent a letter of resignation to the prime minister, Antonis Samaras, who had accepted it.

The country's new coalition government, comprising Democractic Left, Pasok and New Democracy, was formed last week following months of political turmoil and two inconclusive elections.

But since then, the government has been beset by medical troubles, with the new prime minister, Anotnis Samaras, undergoing surgery at the weekend to repair a damaged retina. He was discharged on Monday, but will have to stay at home for several days.

Mr Rapanos was rushed to hospital on Friday, before he could be sworn in, complaining of severe abdominal pain, dizziness and nausea. It is thought he will be discharged on Tuesday.

The health problems afflicting key members of Greece's cabinet has dampened expectations of any significant action emerging from this week's European Union summit.

The Telegraph

Moody's downgrades 28 Spanish banks

As we anticipate moody's send several Spain Banks deeper into junk status


All of Spain’s major banks were hit with cuts of one to four notches – worse than expected and sending several deeper into junk status.

The move followed Moody’s decision this month to slash the sovereign rating from A3 to Baa3, but also reflected the mounting risk of real estate losses, the agency said.

Comparing Spain’s property crisis to Ireland’s, where values have fallen almost twice as much, Moody’s said: “The banks’ exposures to commercial real estate will likely cause higher losses, which might increase the likelihood that these banks will require external support.”

Rival rating agency Standard & Poor's said this month that house prices in Spain could fall another 25pc before the market levels out.

Bankia, which is already due to receive €23.5bn in state aid, was downgraded to junk by Moody's, while Banco Bilbao Vizcaya Argentaria (BBVA), Spain's second largest bank, was cut by three notches to just above junk.

Banco Santander, the parent bank of Santander UK, also saw its rating cut by two notches, to Baa2.

The Telegraph

US deploys 4 minesweepers to Iranian Hormuz oil shipping lane

EU unveils its vision for the future of monetary union

It includes the creation of a European treasury, which would have powers over national budgets.

European Commission President Jose Manuel Barroso said it was "a defining moment for European integration".

The document, released ahead of Thursday's EU summit, said greater fiscal union could lead to common debt being issued by eurozone countries.

There would also be banking union, with a single European banking regulator and a unified deposit guarantee scheme.

The document was released by European Council President Herman Van Rompuy and was drawn up with the presidents of the European Commission, the Eurogroup and the European Central Bank.

Mr Van Rompuy said it was "not meant to be a final blueprint", but that he expected "to reach a common understanding amongst us on the way forward" at Thursday and Friday's summit.

Mr Barroso said the guiding principle was that "greater solidarity and greater responsibility must go hand in hand".

Proposals in the report included:
Limits on the amount of debt individual countries can take on
Annual national budgets can be vetoed if they are likely to mean a country exceeding its debt limits
The eurozone borrowing money collectively "could be explored"
A European treasury office to be set up to control a central budget and keep an eye on national ones
A single European banking regulator and a common scheme guaranteeing bank deposits
Common policies on employment regulations and levels of taxation
Joint decision-making with national parliaments to give it "democratic legitimacy".
Earlier, German Finance Minister Wolfgang Schaeuble also called for there to be a European finance minister, with the power to veto national budgets as well as an elected president of Europe.

French, German, Spanish and Italian finance ministers are meeting on Tuesday to discuss closer union.

French Finance Minister Pierre Moscovici has said Thursday's EU summit should, "lay the groundwork for the second phase of the euro".Joint borrowing Continue reading the main story
Many governments outside the eurozone have called on it to issue eurobonds, which would be a way to allow countries that are currently unable to borrow money commercially to borrow at low interest rates.

But some countries, especially Germany, have resisted this step unless there is much closer fiscal union.

The reason for that is that eurobonds would have much the same effect as the original introduction of the euro, which is that they would allow many governments access to cheaper loans.

There is therefore concern that without European control over budgets, some countries would again take on unsustainable levels of debt.

One of the big changes under the new proposals is that while in the past eurozone members had to keep their budget deficits below a certain level, a European treasury will now be able to force them to make changes to their budgets to keep their deficits down.

BBC