The bad loan (“non-performing loan” (NPL)) crisis in Europe is well known and many have been calling for this issue to be addressed. In Italy, the bad loan crisis has reached 21% of GDP. While NPLs dropped to 4.8% of all loans in the EU as a whole during the first quarter of 2017, they remained well above 40% in Greece and Cyprus, at 18.5% in Portugal, and 14.8% in Italy according to the European Banking Authority.

Now comes the bureaucrats with zero experience to save the day – or is that to create a financial pandemic in the EU? The EU Commission (EUC)  along with the European Central Bank (ECB), want to ensure that banks promptly sell real estate, stocks, bonds and other assets that serve to collateralize loans according to their Mid-term Review of the Capital Markets Union Action Plan.  Member States are required to adopt laws that facilitate the central directive. At this time, any bank cannot just sell a property that secures a loan. The problem is, all loans, whether secured or not, are valued the same.

Once again, all we have is the ECU and ECB desperately trying to prevent a banking crisis as loans in default rise. However, this project is totally incomprehensible for now a well-secured loan which does not pose any particular credit risk in traditional banking can find its collateral sold.

…..continue reading HERE

…..also from Martin:

Year-end For Asia

The hackers studied their cyberattack target for months — the central bank of Bangladesh.

First, they used their cyberskills to steal the institution’s top-secret international money transfer code.

Now they could request large wires of bank funds — electronic transmissions of money across international lines — and never draw suspicion. After that, they sent out four transfer requests, using fake names of charitable organizations.

In the early weeks of 2016, they successfully stole more than $80 million!

Only a typo kept them from taking even more — on the fifth transfer request, one of the hackers misspelled the made-up “Shalika Foundation” as fandation, raising questions and bringing an end to the digital heist. The hackers were never found.

What if another group of cyber bad guys went after the banking system again?

A Sheltered Harbor From Cyberattacks

Suppose hackers didn’t steal money but simply denied banks’ access to their stored digital cash or their customers’ account records?

It’s the stuff of bankers’ nightmares — and the reason behind an industry nonprofit project called the Sheltered Harbor initiative.

The idea is that banks regularly copy their account data, encrypt it and securely store it with other member banks. That way, if a cyberattack disrupts operations in one bank, it could always turn to others in the Sheltered Harbor initiative to retrieve its data.

Sheltered Harbor got started in late 2016 with about three dozen top U.S. banks, credit unions, brokerage houses and other financial institutions. The goal is to enroll the majority of the financial industry into the system in the next few years.

It also demonstrates the persistent threat of data breaches and the rising role that cybersecurity companies play in protecting banks and other corporations from hackers.

A great way to play the trend is with the First Trust Nasdaq CEA Cybersecurity ETF (Nasdaq: CIBR). Since I started writing about cybersecurity in August, the exchange-traded fund is up 10%. Since early 2016, the ETF has gained more than 60% in value.

The idea behind Sheltered Harbor is that banks regularly copy their account data, encrypt it and securely store it with other member banks for protection.

The sector is due to take in an estimated $1 trillion in spending between now and 2021.

As Sheltered Harbor and innumerable hacking incidents in recent years show, even the largest, most important computer systems in the world can be breached by a determined group of hackers.

Kind regards,

Jeff L. Yastine

A Monthly Outlook on the Global Financial Markets

1. Prior market tops (1987, 2000, 2007, etc.) allowed asset managers to partially “insure” their risk assets by purchasing Treasuries that could appreciate in price as the Fed lowered policy rates. Today, that “insurance” is limited with interest rates so low. Risk assets, therefore, have a less “insurable” left tail that should be priced into higher risk premiums. Should a crisis arise because of policy mistakes, geopolitical crises, or other currently unforeseen risks, the ability to protect principal will be impaired relative to history. That in turn argues for a more cautious and easier Fed than otherwise assumed.

Economists prior to Keynes viewed “modeled” as well as “real time” economies as self-balancing, but subject to imbalances from external shocks like oil prices. Rarely did theory incorporate finance and credit as one of those potential earthquakes. It took Hyman Minsky to change how economists view the world by introducing the concept of financial stability that leads to leverage and ultimate instability. He alerted economists to the fact that an economy is a delicate balance between production and finance. Both must be balanced internally and then the interplay between them balanced as well.

….continue reading 2-5 HERE

Anyone who has travelled extensively for business knows how much fun it isn’t. Weather delays, hotels and restaurant food are just part of the “joys.” So why do it? Pardon the pun, but in my case, it’s all part of the bigger journey.

When I first entered the financial services industry in September 1994, I quickly came to understand that there is no financial decision which is ever purely financial. Financial strategies and products, market action with all of its complexities; these are external trappings and tools and challenges. These are the “how” and “what” parts of the package that a great wealth management professional delivers to their clients.

But “how” and “what” pale in comparison to the eternal “Why?” of investing. Why even bother to save instead of spending it on something fun, lavish or frivolous? Unfortunately, the vast majority of folks do choose this path, and we have a retirement funding shortfall in North America that will slam us all like a massive tsunami – a completely preventable tragedy.

If you’re reading this, you’re likely one of those who have chosen to think ahead, live on less income than your employment generates and you’re trying to grow and protect the assets you didn’t fritter away on other stuff. So why have you chosen this path of deferred gratification instead of instant pleasure, unlike most other folks?

Is it the desire to self-determine, to be autonomous and independent of government handouts provided by debt financing that will cripple future generations? Is it so you can finally stop working at a job you may or may not love? Is it so you can finally let go of the worry associated with growing older and becoming less able to work endless hours? Is it just for yourself, or are there other people who also depend on your savings and investing decisions? Is it a spouse, or kids or grandchildren or perhaps a charitable cause that you believe in deeply?

In my experience, the “why” of investing is inextricably linked to “who”…as in “Who do you love?” Basically, money is love; it’s the life energy we haven’t spent. The way we choose to handle our money speaks volumes about the people we love. Are we unselfish and disciplined, or do we give into fear and anger easily? Do we hold on too tightly and obsess about it, or do we feel secure in our relationship with money? And as we mature in other areas of life, so too do we change our approach to investing. Our priorities change, sometimes gradually, sometimes dramatically…but change is inevitable.

Have you reached the tipping point where managing your own portfolio is more burden than benefit? And perhaps most importantly, who is your money for after you’re gone? Who are those people whose lives you’d like to help make better with some of your love, in the form of money you managed not to spend? These are amongst the most critical questions and themes that we all need to contemplate and reach clarity on. The sooner you do it, the easier it is, and the greater affects you can have on those you love.

So why do I travel to see clients on Vancouver Island, the Lower Mainland and Alberta cities and towns outside of Calgary? It’s simple, really: to meet and understand and connect with the people whose money it is, and whenever possible to also meet the people that the money will eventually be for; to see and feel where and how people have chosen to live, and why…so I can really understand them beyond what’s on paper. In the end, it’s people and our connections with them that enrich our lives and our world.

If you’re looking for a decidedly human approach to managing your financial wealth, please visit our site. There’s lot of great content you can view for free, and you can decide if we’re the kind of people you’d to have helping you make the most of your nest egg…for those you love.

http://integratedwealthmanagement.ca/

Cheers,

Andrew H. Ruhland, CFP, CIM

Founder, Integrated Wealth Management

I have lain in wait before writing this stark a warning on Bitcoin, because if you “cry wolf” too often with something like this, you are simply written off as a fool within days if it carries on up and up. It could yet do so, but now we are seeing really extreme manifestations of mania suggesting that the top is at hand, and if not we are very close to it. 

Bitcoin has gone more vertical than the vertical face of Half Dome in Yosemite National Park in recent weeks, and those of us with memories of past manias and crashes know exactly what that means. Any old timers amongst you remember shrewd but mercenary upper class types tipping the family silver into the furnace to flog it off at inflated prices in 1979 – 1980 during the terminal spike in silver? Over the past few weeks we have seen Bitcoin boutiques opening in South Korea and heard stories about people mortgaging their houses to buy Bitcoin and borrowing to the hilt, and pundits “playing to the gallery” by proclaiming astronomic prices for Bitcoin in the future, although wait a minute, they’re already astronomic. The more ludicrously high their predictions the more their acolytes love them for it. The next thing you know they’ll be bringing Carlton Sheets out of retirement to do infomercials for aspiring get rich quick Millennials whose ultimate ambition is become wealthy without doing any work so they can spend even more time fiddling with their Smartphones, and there couldn’t be any more serious warning than that. 

Anyway, the pattern on the Bitcoin charts has all the hallmarks of a final terminal blowoff that will be followed by a catastrophic wipeout and probably soon, and when that happens you don’t want to be anywhere near it, either that or short. The inexperienced get rich quick merchants who have been flocking in droves to Bitcoin in recent weeks will be vaporized.

…..also: It’s Official: Bitcoin Surpasses “Tulip Mania”, Is Now The Biggest Bubble In World History

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.