European finance and world news

10-9-18     

  Europeans and Japanese pay to hold cash or own 10-year German government bonds, which means that every pension fund and insurer will fold in a finite time horizon. They responded by exporting more, saving more, and buying American assets that still pay a positive, if low, real yield….Germany and Japan have negative real interest rates, so their investors buy American bonds at positive real interest rates.  But Germans and Japanese have to pay out Euros and yen, not dollars.  They go to their banks to swap dollar income into local-currency income.  The banks borrow dollars in the United States, sell them in the forward market and receive Euros and yen.

  European banks are running out of borrowing capacity.  After five years of negative short-term rates, their profitability is low, their stock prices are falling and their credit is deteriorating.  They can no longer borrow the dollars required to construct the hedges that local investors need.

  Foreign exchange derivatives form the biggest mountain of obligations in the world financial system….The Federal Reserve is tightening liquidity in the US, and in a volatile market European banks might not be able to roll over nearly $11 trillion of short-term obligations--and might default….

  The credit-worthiness of some of Europe’s largest banks has deteriorated.  In the case of Deutsche Bank the cost of hedging against bond defaults over the next five years has doubled since the Italian crisis erupted in May.

  As the credit of European banks deteriorates, US regulators require American banks who lend to them to put up more reserves against their exposure.  That raises the cost of refinancing the $12 trillion or so of European bank borrowings from American banks, and it probably has led to a reduction in credit lines.  European banks, in return, have to charge exorbitant rates to customers for hedging.  http://www.atimes.com/article/has-the-derivatives-volcano-already-begun-to-erupt/

………………………………………………...................................................

10-10-2018  Baghdad (IraqiNews.com)    Several Iraqi intelligence reports claimed that Islamic State chief Abu Bakr al-Baghdadi issued an order to kill hundreds of his followers, including leading figures, in Iraq and Syria over their disloyalty to the group.   https://www.iraqinews.com/iraq-war/is-chief-baghdadi-orders-320-followers-to-be-killed-for-disloyalty-reports/

……………….........................................…

10-9-18    Veterans of the People’s Liberation Army staged a massive protest this weekend in the eastern Chinese city of Pingdu against police beatings of former soldiers. Police beat some of the protesters during the demonstration, even though they were elderly.  https://www.breitbart.com/national-security/2018/10/09/elderly-chinese-army-veterans-protest-police-beatings/

……………………….......................................................

Shimaa Qasim Abdulrahman, Miss Iraq 2015, has fled to Jordan from Iraq, after extremist threat….This news came just a week after

Tara Fares, an Iraqi beauty queen and social media model was shot. The 22-year-old was shot three times by an assassin who approached her car, in Baghdad.   https://beautypageants.indiatimes.com/Muslim-beauty-queen-flees-country-amidst-death-threats/eventshow/66147592.cms

……………………………………………..................................

10-3-18      Uruguayan deputy 

Graciela Bianchi said on Wednesday that " there is concrete information, names of leaders of 

Hezbollah that certify that (the prosecutor Alberto) Nisman was murdered ."  The legislator 

warned that a terrorist cell operates in Uruguay, after operating in Argentina during the 

 Néstor and Cristina Kirchner governments.  " We have the addresses and it is classified 

information that the US embassy gave us; it is a fact of reality that we are processing with Graciela Ocaña," Bianchi said at the Infobae consultation.  According to a parallel investigation led by 

both legislators, leaders of the terrorist organization based in Argentina operated in the Triple Frontier

but at the end of 2015 they moved to Uruguay.  On the activity of Hezbollah, the former head of  National Coordination for Combat of Money Laundering and Terrorism, Juan Felix Marteau, detailed in an interview with this media how the Barakat Clan operated     https://translate.google.com/translate?hl=en&sl=es&u=https://www.infobae.com/politica/2018/10/03/una-diputada-de-uruguay-aseguro-que-una-celula-de-hezbollah-asesino-al-fiscal-alberto-nisman/&prev=search

....................................................................................................

-Matthew Hedges and wife, Daniela    10-11-18   A British student has been held in solitary confinement in the United Arab Emirates for five months after being accused of spying.  Matthew Hedges, 31, was seized at Dubai airport in May as he tried to leave the country after a research trip for his PhD at Durham University. He was taken to Abu Dhabi, the UAE’s federal capital, and held incommunicado for weeks, allowed only a single phone call to his mother. He has since had two visits from Foreign Office officials and one visit from his wife, Daniela Tejada, whom he has also spoken to by phone.  He was brought to the UAE’s state security court for a hearing yesterday.  https://www.thetimes.co.uk/edition/news/uae-holds-durham-student-matthew-hedges-in-solitary-over-spying-claim-zhnln38tl 

.........