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Fund manager Singer: This is the No. 1 risk to investors today (hint: it’s not what you think)

From Bloomberg:

Threats to the electric grid are coming from everywhere: saboteurs, weather and, as silly as it sounds, from outer space. The danger is significant and growing, and business risk managers are taking it seriously.

The latest warning comes from Paul Singer’s Elliott Management Corp., a $24.8 billion hedge-fund firm based in New York. Singer warned investors, in a letter obtained by  News, of what he sees as the gravest threat: an electromagnetic pulse from the Sun that knocks out the grid for months or longer.

While Elliott’s letters to investors “are typically chock full of scary or depressing scenarios,” writes Singer, “there is one risk that is head-and-shoulders above all the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence.”

While it sounds like the stuff of Hollywood, the threat from the Sun is quite real. Just last week, NASA reported on a 2012 sunburst, known as a coronal mass ejection, with the potential to “knock modern civilization back to the 18th century.”

The miss was about as near as they come: If the pulse had traveled through the same region of space a week earlier, Earth would have been pummeled. Ground currents would have melted the copper in transformers, and the interconnections of the sprawling power lines would have spread the damage far and wide. “We would still be picking up the pieces” two years later, Daniel Baker of the University

Article source: http://thecrux.com/hedge-fund-manager-this-is-the-no-1-risk-to-the-u-s-economy-today/

This is the “bottom line” on the U.S. and EU sanctions on Russia

From Mike “Mish” Shedlock at Global Economic Trend Analysis:

M.A.D. Sanctions

Sanctions are a lose-lose-lose game. Consumers lose, businesses lose, countries lose. And the hypocrisy alone is appalling.

The EU wants sanctions to hurt Russia “more” than the EU.

Thus the EU let a French military sale to Russia go through, while blocking transactions and travel of Russians who had virtually nothing to do with this mess.

Knockout Blow?

For all their efforts, will the U.S. or EU accomplish anything with the sanctions on Russia?

Financial Times writer Christopher Granville has the answer in his take EU’s Sanctions on Russia Will Fail to be a Knockout Blow.

The main burden of the EU sanctions mooted by the commission would appear to fall on the UK.

The core measure targets debt and equity capital raising by the Russian state banks and bans European intermediaries from offering associated underwriting and advisory services, and the bulk of such business is done in the City of London.

Capital market funding is also a small portion of overall foreign funding of Russian banks (about 3.5 per cent as of March 2014), so an important detail about the EU sanctions package as regards both overall impact and burden sharing between the member states will be whether the prohibition on financing Russian banks will extend to ordinary lending. The international syndicated loan market for Russian borrowers is dominated by continental European banks. French banks have the largest exposure of $52.5bn.

This analysis presupposes that the

Article source: http://thecrux.com/this-is-the-bottom-line-on-the-u-s-and-eu-sanctions-on-russia/

Hedge fund manager: This is the No. 1 risk to investors today (Hint: It’s not what you think.)

From Bloomberg:

Threats to the electric grid are coming from everywhere: saboteurs, weather and, as silly as it sounds, from outer space. The danger is significant and growing, and business risk managers are taking it seriously.

The latest warning comes from Paul Singer’s Elliott Management Corp., a $24.8 billion hedge-fund firm based in New York. Singer warned investors, in a letter obtained by  News, of what he sees as the gravest threat: an electromagnetic pulse from the Sun that knocks out the grid for months or longer.

While Elliott’s letters to investors “are typically chock full of scary or depressing scenarios,” writes Singer, “there is one risk that is head-and-shoulders above all the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence.”

While it sounds like the stuff of Hollywood, the threat from the Sun is quite real. Just last week, NASA reported on a 2012 sunburst, known as a coronal mass ejection, with the potential to “knock modern civilization back to the 18th century.”

The miss was about as near as they come: If the pulse had traveled through the same region of space a week earlier, Earth would have been pummeled. Ground currents would have melted the copper in transformers, and the interconnections of the sprawling power lines would have spread the damage far and wide. “We would still be picking up the pieces” two years later, Daniel Baker of the University

Article source: http://thecrux.com/hedge-fund-manager-this-is-the-no-1-risk-to-the-u-s-economy-today/

Here’s the "bottom line" on Russian sanctions

From Mike “Mish” Shedlock at Global Economic Trend Analysis:

M.A.D. Sanctions

Sanctions are a lose-lose-lose game. Consumers lose, businesses lose, countries lose. And the hypocrisy alone is appalling.

The EU wants sanctions to hurt Russia “more” than the EU.

Thus the EU let a French military sale to Russia go through, while blocking transactions and travel of Russians who had virtually nothing to do with this mess.

Knockout Blow?

For all their efforts will the U.S. or EU accomplish anything with the sanctions on Russia?

Financial Times writer Christopher Granville has the answer in his take EU’s Sanctions on Russia Will Fail to be a Knockout Blow.

The main burden of the EU sanctions mooted by the commission would appear to fall on the UK.

The core measure targets debt and equity capital raising by the Russian state banks and bans European intermediaries from offering associated underwriting and advisory services, and the bulk of such business is done in the City of London.

Capital market funding is also a small portion of overall foreign funding of Russian banks (about 3.5 per cent as of March 2014), so an important detail about the EU sanctions package as regards both overall impact and burden sharing between the member states will be whether the prohibition on financing Russian banks will extend to ordinary lending. The international syndicated loan market for Russian borrowers is dominated by continental European banks. French banks have the largest exposure of $52.5bn.

This analysis presupposes that the

Article source: http://thecrux.com/this-is-the-bottom-line-on-the-u-s-and-eu-sanctions-on-russia/

Silver Prices Down Early This Week and Won’t Budge in Morning Trading

Silver prices are down slightly to open the week, but have barely budged this morning (Tuesday) as foreign policy tensions heighten over Russian sanctions and clashes in the Gaza Strip.

New York Spot silver was trading at $20.56 an ounce by 5:15 p.m. EDT yesterday (Monday), when silver trading halts temporarily until picking back up at 6 p.m. That price was a $0.16 decline from Friday’s close. Comex silver for September delivery was also down $0.07 from Friday at the close of markets yesterday.

silver prices

iShares Silver Trust (NYSE Arca: SLV), an ETF that tracks the performance of silver and holds physical silver bullion in London and New York, was down $0.06 at yesterday’s close.

At 9:30 a.m. EDT Tuesday, spot silver was up slightly to $20.62, and was trading as high as $20.73 at 4:20 a.m. EDT, but as of 10 a.m. was back to $20.56.

This slight and momentary uptick comes after Israeli Prime Minister Benjamin Netanyahu signaled that tensions were going to escalate in Israel’s clashes with Hamas in the Gaza Strip. This was after U.S. Secretary of State John Kerry went on a six-day diplomatic mission that only yielded a fragile humanitarian ceasefire that broke down after 12 hours on Saturday. This is after three weeks of fighting in Gaza.

Also, the U.S. and the European Union have made clear

Article source: http://moneymorning.com/2014/07/29/silver-prices-down-early-this-week-and-wont-budge-in-morning-trading/

Gold And Silver – Use “Magic” Of Gold/Silver Ratio To Greatly Increase Your …


– Posted Sunday, 27 July 2014 | | Disqus

By Michael Noonan

The magic of compound interest is well known.  What is lesser known is the magic of the gold/silver ratio, not as a measure as it is mostly viewed, but as an application for increasing ones holdings substantially, over time.  What is so great here is that no magic is involved, rather simply utilizing the market to more than double your holdings.

So-called Gold Bugs are considered ardent supporters of the PM [Precious Metal]. Silver stackers are just as avid. Then there are those willing to buy either or both. The chart below is the gold/silver ratio going back 15 years, and this is a hindsight analysis brought forth to the present tense for future consideration that can greatly increase net holdings at almost no cost, those being transaction costs from a dealer.

Consider three investors: 1. a gold-only buyer who loves gold.  2. a silver-only buyer who loves stacking.  3. A buyer of either or both and who wants to maximize what he [she] owns.  [Transaction costs are not considered, and some rounding off may occur].

Buyer 1 bought 20 oz of gold in 1995 for $380 the ounce, or $7,600.  Buyer 2 bought 1,000 oz of silver at $4.30 the ounce, or $4,300.  Buyer 3 bought 20 oz of gold because the gold ratio favored holding gold, at the time.  Buyers 1 and 2 safely stored their PM, relying on over 5,000 years of history that could increase

Article source: http://news.goldseek.com/GoldSeek/1406475617.php

This country could default TODAY. Here’s what happens next.

From Bloomberg:

By defaulting [today], Argentina may trigger bondholder claims of as much as $29 billion — equal to all its foreign-currency reserves.

If the overdue interest on Argentina’s dollar-denominated securities due 2033 isn’t paid by July 30, provisions in bond indentures known as cross-default clauses would allow the nation’s other debt holders to also demand their money back immediately. The amount corresponds to Argentina’s debt issued in foreign currencies and governed by international laws.

U.S. District Court Judge Thomas Griesa blocked Argentina’s attempt last month to transfer the $539 million in interest after the nation didn’t set aside money for holdout creditors, who won a ruling that entitled them to full repayment of obligations that Argentina repudiated in 2001. While Citigroup Inc. says there’s little chance investors will invoke the pay-back clauses in coming weeks, potential claims are large enough to exhaust the country’s reserves.

“It would mean that Argentina is in default on most all of its debt and presumably everybody would be in the same boat,” Anna Gelpern, a fellow at the Peterson Institute for International Economics and a law professor at Georgetown University, said in a telephone interview.

[Today] is the last day Argentina has to avoid its second default in 13 years by making the interest payment to holders of $13 billion in bonds before a 30-day grace period expires.

Cross Default

A delegation of Argentine officials led by Finance Secretary Pablo Lopez arrived at a meeting with court-appointed mediator Daniel Pollack at

Article source: http://thecrux.com/this-country-could-default-today-heres-what-could-happen-next/

A BIG breakout you haven’t heard about in the mainstream media

From Jeff Clark, editor, SA Short Report: 

Chinese stocks are breaking out… But you won’t see it mentioned in the mainstream press.

The Shanghai Stock Exchange Composite Index (the “SSEC”) – China’s version of the Dow Jones Industrial Average – rallied last Thursday… and broke a five-year consolidating-triangle pattern to the upside. This suggests Chinese stocks are about to rally.

And early investors could make double-digit gains over the next few months…

Take a look at this long-term chart of the SSEC…

The SSEC has been stuck in a bear market for the past six years. It’s down more than 60% from its peak in 2007. But on Thursday, the index broke out of a five-year consolidating-triangle pattern.

This is such a long, drawn-out pattern that you can barely see the breakout on the eight-year chart. But there’s no mistaking it on the one-year chart…

 

This is a BIG DEAL. This is when new bull markets begin. And as I told you in May, the last time the SSEC emerged from a pattern like this, it rallied 500% in a year and a half.

I’m not looking for those types of gains this time around. But at the very least, the SSEC should be able to hit some of the overhead resistance lines on the long-term chart.

The first target is at about 2,500. If the SSEC can rally above that first resistance level, the next

Article source: http://thecrux.com/this-major-market-is-breaking-out-now/