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Jeremiah 14:14-16 1599 Geneva Bible (GNV)

14 Then the Lord said unto me, The prophets prophesy lies in my name: I have not sent them, neither did I command them, neither spake I unto them, but they prophesy unto you a false vision, and divination, and vanity, and deceitfulness of their own heart.

15 Therefore thus saith the Lord, Concerning the prophets that prophesy in my Name, whom I have not sent, yet they say, Sword and famine shall not be in this land, by sword and famine shall those prophets be consumed.

16 And the people to whom these prophets do prophesy shall be cast out in the streets of Jerusalem, because of the famine, and the sword, and there shall be none to bury them: both they and their wives, and their sons, and their daughters: for I will pour their wickedness upon them.

"Why of course the people don't want war. Why should some poor slob on
a farm want to risk his life in a war when the best he can get out of
it is to come back to his farm in one piece? Naturally the common people
don't want war neither in Russia, nor in England, nor for that matter in
Germany. That is understood. But, after all, it is the leaders of the
country who determine the policy and it is always a simple matter to
drag the people along, whether it is a democracy, or a fascist
dictatorship, or a parliament, or a communist dictatorship. Voice or no
voice, the people can always be brought to the bidding of the leaders.
That is easy. All you have to do is tell them they are being attacked,
and denounce the peacemakers for lack of patriotism and exposing the
country to danger. It works the same in any country."


(1893-1946) Commander-in-Chief of the Luftwaffe, President of the Reichstag, Prime Minister of Prussia and, as Hitler's designated successor, the second man in the Third Reich. [Göring]

April 18, 1946

Nuremberg Diary (Farrar, Straus & Co 1947), by Gustave Gilbert (an Allied appointed psychologist), who visited daily with Goering and his cronies in their cells, afterwards making notes and ultimately writing the book about these conversations.

view:  full / summary

Acrid Smell of Burned Fingers Wafts through the Bond Market

Posted by George Freund on July 27, 2015 at 11:20 AM

by Wolf Richter July 26, 2015


Commodities had once again an ugly week. Copper hit the lowest level since June 2009. Gold dropped below $1,100 an ounce. Other metals dropped too. Agricultural commodities fell; corn plunged nearly 7% for the week. Crude oil swooned, with West Texas Intermediate dropping nearly 7% to $47.97 a barrel, a true debacle for energy junk-bond investors.


It was the kind of rout that bottom fishers a few months ago apparently didn’t think was possible.


For example, in March, coal miner Peabody Energy had issued 10% second-lien notes due 2022 at 97.5 cents on the dollar. Now, these junk bonds are trading at around 49 cents on the dollar, having lost half their value in four months, and 17% in July alone, according to S&P Capital IQ’s LCD HY Weekly. Yield-hungry fund managers that bought them at issuance and stuffed them into their bond funds that people hold in their retirement accounts should be sued for malpractice.

Other bonds too have gotten slaughtered in July.


Among the bonds: Cliffs Natural Resources down 27.6%, SandBridge down 30%, Murray Energy down 21.2%, and Linn Energy down 22.3%, according to Bloomberg.


For example, Linn Energy 6.25% notes due in 2019 were trading at 78 cents on the dollar at the beginning of July and at 58 on Friday, according to LCD. There was bloodshed beyond energy, such as AK Steel’s 7.625% notes due in 2021. They were trading at 62 cents on the dollar, down 22% from the beginning of July.


“The performance is a disappointment to investors who purchased about $40 billion of junk-rated bonds from energy companies this year, thinking that the worst of the slump was over,” Bloomberg noted.

But the worst of the slump is far from over.


The riskiest junk bonds, tracked by the BofA Merrill Lynch US High Yield CCC or Below Effective Yield Index, have been hit hard, with yields jumping from the ludicrous levels below 8% of last summer to 12.19% as of Thursday, the highest since July 2012:


Note the spike in yield during the “Taper Tantrum” in the summer of 2013 when the Fed discussed ending “QE Infinity.” After which bonds soared once again and yields descended to record lows, until the oil panic set in, as investors in the permanently cash-flow negative shale oil revolution were coming to grips with the plunging price of oil.


But in the spring, bottom fishers stepped in and jostled for position as energy companies sold them $40 billion in new bonds, including coal producer Peabody. Now a lot of people who touched these misbegotten bonds are scrutinizing their burned fingers.

But how much worse can it get?


Take a look at the recent past. In the chart below, note how yields can spike when the real selling starts and when liquidity suddenly evaporates, while hedge funds are waiting on the sidelines, with the smartest among them knowing that the first waves of buyers will get burned.


In fact, the “bloodletting” that has transpired so far is a series of barely perceptible squiggles compared to real bond sell-offs:

“It’s been a tough environment for issuers lately,” S&P Capital IQ’s LCD HY News Today summarized the high-yield market on Friday when Exterran Energy Solutions threw in the towel and withdrew its $400 million offering, while Builders FirstSource “was forced to” offer a higher rate and downsize its junk-bond offering in order to bamboozle fund managers into buying it.


This week, only $4.46 billion in junk bonds were sold by six issuers, nudging up the volume for the year to $194.34 billion, almost 3%behind last year’s pace. Sentiment, as LCD said, has “definitely soured for lower-rated offerings, and those tied in any way to commodities.”

In high-grade bonds, there has been a peculiar flavor…


A mad frenzy by companies to sell as much debt as possible while they still can, even as yields and spreads are rising and as prices are falling, before the junk-bond debacle spills over into high-grade bonds. LCD:


The high-grade primary market continues to be swamped with issuance, but the broader sector groaned under the weight of trailing supply and the increasingly aggressive fiscal policies of active issuers, including another spate of big-ticket benchmark deals backing M&A and share buybacks.

This week, $33.5 billion in high-grade corporate bonds were issued, including Intel’s $7 billion offering for its acquisition of Altera and United Health’s $10.5 billion offering for its acquisition of Catamaran.


The United Health deal was the 11th this year over $10 billion, all of which were plowed into M&A and share buybacks, rather than productive investments. In 2014, there were only three such deals, same as in 2013; in 2012, there was only one. That’s how mad this frenzy has become.

Total high-grade bond sales this year have soared 29% from the same period in 2014, itself a “record-smashing” year, and are up 44% from the same period in 2013, according to LCD. These are big desperate increases.


But yield spreads between high-grade corporate bonds and equivalent Treasuries have been rising, and corporate bond prices in relationship to Treasuries have been falling. The BofA Merrill Lynch US Corporate Option-Adjusted Spread reached 1.53% (up from just above 1% a year ago), matching the peak of the oil panic in January, the widest spread since October 2013, “as technical dynamics deteriorated.”


Treasury yields are still extraordinarily low, and the Fed still hasn’t raised interest rates yet, so the average yield across the corporate high-grade index, at 3.4%, is still extraordinarily low as well, and prices are still extraordinarily high. Hence the mad frenzy to issue new bonds.

To fund share buybacks and M&A


Over 50% of the issuance so far in July was for M&A (up from 17% in all of 2014), including our latest hero, Anthem’s $54 billion deal to acquire Cigna, which added, as LCD said, “to the seemingly endless refill of the pipeline for blockbuster M&A-driven debt offerings.”


But buyers of high-grade bonds are very gradually coming out from under the Fed’s ether made of ZIRP and QE, and they’re smelling the acrid stench of burned fingers wafting through the junk-bond market down the street. They all know: the fire starts at the riskiest margin and works inward. And they’re seeing, despite whatever denials they might have, that this process has begun, just when US corporations carry a far greater load of debt than ever before – thanks to the greatest credit bubble in history – while revenue growth is stalling.


Bond fund investors get hit the hardest: UBS, despite the well-known problems Puerto Rico has had for years, wasn’t shy about loading up its clients with Puerto Rico bond funds. Now the whole scheme is blowing up. Unleash the lawyers! Read… UBS’s Puerto Rico Bond Funds Implode, “Collateral Value” Drops to Zero, Investors Screwed

What the Heck Just Happened in the Global Markets?

Posted by George Freund on July 27, 2015 at 10:55 AM


by Wolf Richter July 25, 2015

It was the kind of day that shouldn’t have happened. Somebody dropped the ball at CNBC, or something.

Thursday evening, after three morose days in US stock markets, Amazon came out and said it made a profit! OK, a teeny-weeny profit of $92 million, a barely perceptible 0.4% of sales, a rounding error for other thriving companies’ with $23 billion at the top line. But for Amazon, the mere fact that there wasn’t a minus-sign in front of it, for once, was huge.

Its shares soared 22% after hours. The company’s valuation jumped by $40 billion. CNBC exploded with excitement. And Friday should have been a huge day for stocks.

But oh my!

From the first minute on, Amazon’s shares lost steam, drifted lower throughout the day and gave up half of their afterhours gain. The S&P 500 and the NASDAQ lost over 1%, the Dow almost 1%.

It topped off a bad week:

The Dow dropped 2.8%, its worst week since December 2014, broke its 200-day moving average, and is in the red for the year.

The Dow Transportation index fell 2.8%, its worst week since March, and hit a 9-month low, down 12% for the year.

The S&P 500 dropped 2.1%, its third worst week in 2015, and is up a mere 1% for the year.

The Nasdaq dropped 2.2%, its worst week since March.

The Russell 2000 swooned 3.1%, its worst week since October 2014

It didn’t help that Biotechs collapsed.

Biogen set the tone. It slashed its sales growth forecast for 2015 in half. Its multiple sclerosis drugs, its mainstay, are in trouble. Sales of Tecfidera, its main growth driver since its launch in 2013, ran smack-dab into reports linking it to brain infections. Sales of its injectable MS drug Tysabri and interferon-based MS drug Avonex both fell more than expected. And sales of Plegridy also disappointed. Shares of Biogen plunged 22%, wiping out $25 billion in stockholder wealth.

The Biotech ETF (XBI) dropped 3.6%. XOMA, which had already been eviscerated on Wednesday, dropped another 9.6% on Friday, to 94 cents, down about 80% for the week. A total of 25 biotechs in the index plunged over 5% on Friday.

Crude oil got hammered all week.

Particularly on Friday when WTI dropped to $47.97 a barrel, just weeks after $60 a barrel had been considered the new low going forward. Energy companies got slammed. Many of them are junk-rated, and their bonds sold off this week, dragging down the world’s largest junk-bond ETF (HYG) by 1.4%.


And just to show how fragile the newly bred IPOs are: Our California darling TrueCar, which went public last summer, lowered its outlook on Thursday afterhours and plunged 36% on Friday to $6.87 a share, down 24% from its IPO price of $9, and down 73% from its IPO-hype peak last year.

Here’s the misbegotten week for the S&P 500 index (chart by Doug Short at Advisor Perspectives):


So how badly did the S&P 500 get whacked?

In the overall scheme of things? Not much! This weekly chart by Doug Short shows that the index has dropped below its 10-week moving average (blue line), once again, but remains resolutely in the same very narrow range of the past five months:



And in the rest of the world?

Doug writes in his World Markets Weekend Update:

Seven of the eight indexes on our world watch list gave back part of their gains from the previous week. The one positive outlier was the manic-depressive Shanghai Composite, which advanced 2.87% over the past five sessions.

The government-mandated 12-session rally of the Shanghai Composite leaves it down “only” 21% from its crazy-bubble peak, after having crashed 32% by July 8.

The Western indexes fared the worst of our gang of eight. The UK’s FTSE 100 was the worst loser and a negative outlier in that its -2.88% decline more than eradicated its gain from the previous week.

This chart with an overlay of the eight indices so far in 2015 highlights Shanghai’s nicely defined bubble (top blue line):



This table by Doug Short summarizes the performance of these indices so far in 2015, sorted from high to low.


Note the column, “2015 Peak.” It shows the indices’ gains at their respective peaks this year. I want to direct your attention to number 2 on that list, the French CAC 40, up 18% year-to-date.


The irony is that the French don’t have much of an appetite for stocks. Their economy isn’t exactly booming either. This is foreign buying, mostly US hot money that has been pouring into the Eurozone to ride up Mario Draghi’s QE escalator.

Germany’s DAXK (price only, whereas the DAX includes dividends) went through the same procedure last year and early this year, front-running QE. In 2015, by April 10, in 100 calendar days, it had booked a gain of over 25%, only to give up half of it in the jagged swoon since.

The languid, range-bound stock market in the US over the past five months is treacherous; it’s not going to remain languid forever. It could break to the upside, for example if a Fed official spouts off some kind of craziness on CNBC or Bloomberg TV. Or it could break to the downside. Then, hopefully, all those sitting with their cursor hovering over the sell-button won’t click it all at once.

But even if the market were a “life-time short” opportunity, I’d never short it. I’d leave that to braver souls. Read…. Why I Don’t Short Stocks or Bonds in this Crazy Environment Where Nearly All Assets Are Overpriced

Satanic statue unveiled in Detroit

Posted by George Freund on July 27, 2015 at 10:45 AM

Christians protest after the Satanic Temple unveils bronze Baphomet statue featuring a human body, goat’s head and wings.

By Reuters 11:44PM BST 26 Jul 2015

Several hundred people have attended a Mass at a US Catholic church to protest against an eight and a half-foot (2.6-metre)-tall bronze statue ofSatan that hundreds of people also lined up to see.

The Satanic Temple had said it would unveil the statue on Saturday at a Detroit location that only people with tickets would know about. Hundreds lined up on Saturday evening to get the tickets as Christian protesters rallied nearby.

The bronze Baphomet statue, featuring a human body, goat’s head and wings, was unveiled just before midnight to cheers of "Hail Satan". Statues of a boy and a girl in poses of adoration stand on either side.


Earlier on Saturday, The Detroit News said 200-250 people attended Mass at St. Joseph Church in a protest against the Satanic event.

The statue had been planned for the state Capitol in Oklahoma City until Oklahoma's Supreme Court banned all religious displays on Capitol grounds.

The Satanic Temple now says it wants to erect it outside Arkansas' statehouse, where a Ten Commandments monument also is planned.

Stratfor has 11 chilling predictions for what the world will look like a decade from now

Posted by George Freund on July 26, 2015 at 9:30 PM

Armin Rosen Jun. 16, 2015, 9:59 AM

The private intelligence firm Strategic Forecasting, or Stratfor, recently published its Decade Forecast in which it projects the next 10 years of global political and economic developments.

In many ways, Stratfor thinks the world of 10 years from now will be more dangerous place, with US power waning and other prominent countries experiencing a period of chaos and decline.

Russia will collapse ...

Russia will collapse ...
REUTERS/Sergei Karpukhin
"There will not be an uprising against Moscow, but Moscow's withering ability to support and control the Russian Federation will leave a vacuum," Stratfor warns. "What will exist in this vacuum will be the individual fragments of the Russian Federation."
Sanctions, declining oil prices, a plunging ruble, rising military expenses, and increasing internal discord will weaken the hold of Russia's central government over the world's largest country. Russia will not officially split into multiple countries, but Moscow's power may loosen to the point that Russia will effectively become a string of semi-autonomous regions that might not even get along with one another.

"We expect Moscow's authority to weaken substantially, leading to the formal and informal fragmentation of Russia" the report states, adding, "It is unlikely that the Russian Federation will survive in its current form."

... and the US will have to use its military to secure the country's nukes.

... and the US will have to use its military to secure the country's nukes.
Desmond Boylan/Reuters
A deactivated Soviet-era SS-4 medium-range nuclear-capable ballistic missile.
Russia's nuclear-weapons infrastructure is spread across a vast geographic area. If the political disintegration Stratfor predicts ever happens, it means that weapons, uranium stocks, and delivery systems could end up exposed in what will suddenly become the world's most dangerous power vacuum.

The breakout of Russia's nuclear weapons stockpile will be "the greatest crisis of the next decade," according to Stratfor.

And the US will have to figure out what to do about it, even if it means dispatching ground troops to secure loose weapons, materials, and delivery systems.

"Washington is the only power able to address the issue, but it will not be able to seize control of the vast numbers of sites militarily and guarantee that no missile is fired in the process," the Decade Forecast states. "The United States will either have to invent a military solution that is difficult to conceive of now, accept the threat of rogue launches, or try to create a stable and economically viable government in the regions involved to neutralize the missiles over time."

Germany is going to have problems ...

Germany is going to have problems ...
REUTERS/Michael Dalder
Germany has an export-dependent economy that has richly benefitted from the continent-wide trade liberalization ushered in by the European Union and the euro, but that just means the country has the most to lose from a worsening euro crisis and a resulting wave of euroscepticism.

The country's domestic consumption can't make up for this dip in Germany's export economy or for a projected decline in population. The result is Japan-style stagnation.

"We expect Germany to suffer severe economic reversals in the next decade," the Decade Forecast says.

... and Poland will be one of Europe's leaders.

... and Poland will be one of Europe's leaders.
PolandMFA / Flickr
Look a little to Germany's east, and things won't be quite so bad. "At the center of economic growth and increasing political influence will be Poland," the report says.

Poland's population won't decline as much as those of the other major European economies. The fact that it's the largest and most prosperous European state on Russia's western border will also thrust it into a position of regional leadership that the country could leverage into greater political and economic prestige.

And it only helps to have the kind of close, longstanding strategic partnership with the US that Poland enjoys.

There will be four Europes.

There will be four Europes.
Francois Lenoir/Reuters
It wasn't long ago that European unity seemed like an unstoppable historical force, with political and economic barriers between countries dissolving and regionalism and nationalism disappearing from the continent's politics.

In 10 years, that may all seem like a distant memory. The Decade Forecast talks about four Europes that will becoming increasingly estranged from one another: Western Europe, Eastern Europe, Scandinavia, and the British islands. They will still have to share the same neighborhood, but they won't be as closely connected as they were before.

"The European Union might survive in some sense, but European economic, political, and military relations will be governed primarily by bilateral or limited multilateral relationships that will be small in scope and not binding," the report says. "Some states might maintain a residual membership in a highly modified European Union, but this will not define Europe."

Turkey and the US will have to be close allies but for an unexpected reason.

Turkey and the US will have to be close allies but for an unexpected reason.
Umit Bektas/Reuters
Several Arab countries are in a state of free fall, and the Decade Forecast doesn't see the chaos ending anytime soon. The major beneficiary from all of this will be Turkey, a strong, relatively stable country whose borders stretch from the Black Sea all the way down to Syria and Iraq.

Turkey will be reluctant to intervene in conflicts on its borders but will inevitably have to, according to the forecast. As Ankara's strength and assertiveness increases relative to its neighbors, the country will become an indispensable US partner.

But Turkey will want something in return: a line of defense against a certain powerful and aggression-minded country on the other side of the Black Sea that has military bases in neighboring Armenia. Turkey will want the help of the US in keeping Moscow out of its backyard.

"Turkey will continue to need US involvement for political and military reasons," the report says.
"The United States will oblige, but there will be a price: participation in the containment of Russia. The United States does not expect Turkey to assume a war-fighting role and does not intend one for itself. It does, however, want a degree of cooperation in managing the Black Sea."

China will face one huge problem.

China will face one huge problem.
China may have a rough decade ahead as economic growth slows, leading to widespread discontent toward the ruling Communist Party. But the party will not liberalize, which means its only viable option for controlling the gathering chaos while remaining in power will be to increase internal oppression.

Beijing also faces another, perhaps even bigger problem: China's growth hasn't been geographically distributed very evenly. Coastal cities are thriving, but China's interior has less access to international markets and is comparatively much poorer. That problem will only get worse as China continues to urbanize.

"The expectation that the interior — beyond parts of the more urbanized Yangtze River Delta — will grow as rapidly as the coast is being dashed," the report says. And the growing rift between China's coast and its interior could presage even deeper, more ominous splits.

As the report notes, regional fissures have been a persistent driver of political chaos throughout China's history, and there is an unlikely but "still conceivable outcome in which political interests along the coast rebel against Beijing's policy of transferring wealth to the interior to contain political unrest."

Japan will be Asia's rising naval power.

Japan will be Asia's rising naval power.
Japan has a maritime tradition going back centuries, and as an island nation it is pretty dependent on imports. China is building a state-of-the-art navy of its own, and it may become even more aggressive in controlling shipping routes in the East China Sea, South China Sea, and Indian Ocean that Japan depends upon.

Japan will have no option but to project power into the region to counter China and protect its supply routes. With US power waning, it will have to do this on its own.

"Right now [Japan] depends on the United States to guarantee access," the forecast states. "But given that we are forecasting more cautious US involvement in foreign ventures and that the United States is not dependent on imports, the reliability of the United States is in question. Therefore, the Japanese will increase their naval power in the coming years."

The South China Sea islands won't start a war — but there's a catch.

The South China Sea islands won't start a war — but there's a catch.
Asia Maritime Transparency Initiative
The regional powers will decide that South China Sea island disputes aren't worth a major military escalation, but they will still be a symptom of a hazardous power dynamic.

"Fighting over the minor islands producing low-cost and unprofitable energy will not be the primary issue in the region," the report predicts. "Rather, an old three-player game will emerge. Russia, the declining power, will increasingly lose the ability to protect its maritime interests. The Chinese and the Japanese will both be interested in acquiring these and in preventing each other from having them."
Dangerous great-power dynamics are returning to East Asia, even if it may not result in armed conflict in the South China and East China seas.

There will be 16 mini-Chinas.

There will be 16 mini-Chinas.
Reuters/Bernardo Montoya
China's economy will slow down, and growth in its production capacity will flatline. That's actually good news for a handful of countries. The entry-level manufacturing jobs that China used to gobble up will migrate to 16 emerging economies with a combined population of 1.15 billion.

So while China's growth will stall, leading to unforeseeable political and economic consequences, Mexico, Nicaragua, the Dominican Republic, Peru, Ethiopia, Uganda, Kenya, Tanzania, Bangladesh, Myanmar, Sri Lanka, Laos, Vietnam, Cambodia, the Philippines, and Indonesia could see improving economic fortunes over the next decade as more manufacturing jobs arrive.

US power will decline.

US power will decline.
Tom Pennington / Getty
With the world becoming an even more disorderly and unpredictable place over the next 10 years, the US will respond by being increasingly judicious about how it picks its challenges rather than taking an active leadership role in solving the world's problems.

A growing economy, surging domestic energy production, declining exports, and the safety of being in the most stable corner of the world will give the US the luxury of being able to insulate itself against the world's crises. While this more restrained US role in global affairs will make the world an even less predictable place, it's a reality that other countries will just have to deal with.

"The United States will continue to be the major economic, political, and military power in the world but will be less engaged than in the past," the forecast says. "It will be a disorderly world, with a changing of the guard in many regions. The one constant will be the continued and maturing power of the United States — a power that will be much less visible and that will be utilized far less in the next decade." 


Posted by George Freund on July 25, 2015 at 2:30 PM

Squire K. (Skip) Wells (left) killed in the Chattanooga Marine recruiting scandal. Larry L. Wells killed in action

Aug 6th, 2004: Killed in an attack in Najaf.

The Washington Post reported the death. He was from Mount Hermon, LA and belonged to the 11th Marine Expeditionary Unit.

Notice the lazy left eye, the nature of the upper aspects of the ears, and the nature of the nostrils, the exceedingly tiny one on the right and the slightly larger one on the left. Notice also the nature of the mouth and the chin, as well as the long upper lip. Did he die at all? Has this all been a fake from the beginning? One issue is certain, which is the fact that he did not die at the recruiting center and, furthermore, the 2015 dead man is precisely the same as the 2004 corpse.

More fakes and falsifiers confirmed, smiling and smirking over a corpse:

Moreover, he was a real person and surely was a Marine but not a living one as of 2015. The family was paid and/or facilitated to participate in this scam. The corporal’s memory was used as a means to give legitimacy for the arch-hoax. If there be any doubt to this, see the following images, the one on the left screen being attributed to the July 2015-murdered Marine, the one on the left published as the Marine’s death in 2004:


Who is the father showing now? It seems that this is a different image all together. None of the relatives show even the slightest degree of emotion regarding the supposed deaths of these men. Clearly, by no means could they have died in the least at the time as proposed.

UBS's Puerto Rico Bond Funds Implode, 'Collateral Value' Drops to Zero, Investors Screwed

Posted by George Freund on July 24, 2015 at 11:10 AM



by Wolf Richter July 24, 2015


“We believe that the probability of default is approaching 100 percent, and that losses given default are substantial,” Moody’s wrote on Wednesday about Puerto Rico’s $72 billion in bonds that were stuffed into numerous conservative-sounding bond funds spread across America’s retirement portfolios.


“Bondholder recoveries will be lowest on securities lacking explicit contractual or other legal protections,” the report went on, according to Bloomberg. About $26 billion in bonds fall into this category, issued by entities such as the Government Development Bank, Highways and Transportation Authority, Infrastructure Finance Authority, and Municipal Finance Authority. Investors in these bonds might recover only 35 cents on the dollar.


Recovery rates for bonds with stronger investor protections, such as general obligation bonds, would likely range from 65% to 80%, Moody’s said.


But those recovery rates, as dire as they seem, only apply if you own the bonds outright. If you own those bonds in a bond fund, the scenario may look much, much worse, according to what UBS just did.


Turns out, some of these bonds were underwritten by UBS and stuffed with other Puerto Rico bonds into its own Puerto Rico closed-end bond funds and sold to its own unsuspecting clients. These funds aren’t traded; UBS sets the value.


And UBS, despite the well-known problems Puerto Rico has been having for years, wasn’t shy about loading up its clients up with these bonds, apparently, according to Reuters:


Many UBS brokers had misgivings about the funds even as UBS’ Puerto Rico chairman was pushing them to sell the bonds, according to a voice recording, reported by Reuters in February.

And then there was leverage, as recommended by UBS brokers because UBS profits even more, not only in selling the bond funds but also in lending the money:


Many of those investors bought even more fund shares with money they borrowed through credit lines from another UBS unit, after several UBS brokers may have improperly advised them to do so, according to a $5.2 million settlement between UBS and Puerto Rico’s financial regulator in 2014.

Since the collapse of Puerto Rico bonds, the funds have become “legal headaches for the firm,” as Reuters put it, with the FBI “investigating allegations about UBS’ sales practices that touted the funds’ high yields and tax advantages.”


OK, looks like these funds have become a sordid business. But as unlikely as it may seem, they just now got even more sordid:


UBS sent out a letter to its clients on July 13, and at least one of those incensed recipients must have leaked a copy to Reuters. In this letter, UBS said that it “will also reduce to zero the collateral value assigned to all Puerto Rico closed-end funds shares.”


To zero!


Clients were warned that they can no longer use these funds as collateral for loans, even those loans they used to buy these funds with in the first place.


That’s how risky UBS thinks these bond funds are. But UBS sets the value of these funds, and for now, they still have “value,” at least on its website, according to Reuters: “For example, one of the riskiest funds was worth $3.46 per share as of Thursday….


By having the collateral value of their bond funds cut to zero, these clients are looking at a potentially grim situation:


Jeffrey Sonn, a lawyer in Florida, who represents some of the investors, told Reuters that UBS might liquidate the assets of clients who used these Puerto Rico bond funds as collateral for loans and might even take legal actions against them if they fail to produce additional collateral to replace the funds.

This would nicely top off the sordidness of all this, given how much money these clients have already lost on these bond funds. Consequences?


Lisa Bragança, a lawyer for Stoltmann Law Offices in Chicago which represents some of the investors, said the admission that the collateral value of these funds is now zero could bring on more investor arbitration claims against UBS, on top of the hundreds that have already been filed.


“This is a real pickle for UBS to say the collateral value assigned to the closed-end fund shares is zero,” Bragança said.


By doing so, UBS is effectively admitting that it sold a bad product and that the funds are too risky for the firm itself, let alone average investors, lawyers said.

So the lawyers are going to get rich. UBS clients might eventually recover a small portion of their original investment and weep over the rest. And UBS will simply brush off the outcome as another “charge from legal settlements,” one more in many, and exclude it from its adjusted, pro-forma, non-GAAP, ex-items EPS number, which is all that matters to the hype mongers that analysts have become. And life goes on.


It all boils down to finding the perfect wealth transfer method. JP Morgan did. Read… “Leveraged Loan” Time Bomb Goes Off

Commodities Collapsed Just Before The Last Stock Market Crash - So Guess What Is Happening Right Now?

Posted by George Freund on July 23, 2015 at 3:45 PM

By Michael Snyder, on July 22nd, 2015

If we were going to see a stock market crash in the United States in the fall of 2015 (to use a hypothetical example), we would expect to see commodity prices begin to crash a few months ahead of time. This is precisely what happened just before the great financial crisis of 2008, and we are watching the exact same thing happen again right now. On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months. When global economic activity slows down, demand for raw materials sinks and prices drop. So important global commodities such as copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key “leading indicators” that can tell us a lot about where things are heading next. And what they are telling us right now is that we are rapidly approaching a global economic meltdown.

If the global economy was actually healthy and expanding, the demand for commodities would be increasing and that would tend to drive prices up. But instead, prices continue to go down.

The Bloomberg Commodity Index just hit a brand new 13-year low. That means that global commodity prices are already lower than they were during the worst moments of the last financial crisis…

The commodities rout that’s pushed prices to a 13-year lowpulled some of the biggest mining and energy companies below levels seen during the financial crisis.

The FTSE 350 Mining Index plunged as much as 4.9 percent to the lowest since 2009 on Wednesday, with BHP Billiton Ltd. and Anglo American Plc leading declines. Gold and copper are near the lowest in at least five years, while crude oil retreated to $50 a barrel.

“This commodity bear market is like a train wreck in slow motion,” said Andy Pfaff, the chief investment officer for commodities at MitonOptimal in Cape Town. “It has a lot of momentum and doesn’t come to a sudden stop.”

Commodity prices have not been this low since April 2002. According to Bloomberg, some of the commodities being hit the hardest include soybean oil, copper, zinc and gasoline. And this commodity crash is already having a dramatic impact on some of the biggest commodity-producing nations on the globe. Just consider what Gerald Celente recently told Eric King…

We now see that the Australian dollar is at a six-year low against the U.S. dollar. What are Australia’s biggest exports? How about iron-ore and other metals.

If we look at Canada, their currency is also now at a six-year low vs the U.S. dollar. Well, Canada is a big oil exporter, particularly some tar sands oil, which is expensive to produce.

We also now have the Brazilian real at a 10-year low vs the U.S. dollar. Why? Because it’s a natural resource rich country and they don’t have a strong market to sell their natural resources to.

Meanwhile, the Indian rupee is at a 17-year low vs the U.S. dollar. This is because manufacturing is slowing down and there is less development. If the Americans aren’t buying, the Indians, the Chinese, the Vietnamese — they’re not making things.

All of this is so, so similar to what we experienced in the run up to the financial crisis of 2008. Just a couple of days ago, I talked about how the U.S. dollar got really strong just prior to the last stock market crash. The same patterns keep playing out over and over, and yet most in the mainstream media refuse to see what is happening.

Something else that happened just a few months before the last stock market crash was a collapse of the junk bond market.

Guess what?

That is starting to happen again too. Just check out this chart.

I know that I must sound like a broken record. But I think that it is extremely important to document these things. When the next financial collapse takes place, virtually everyone in the mainstream media will be talking about what a “surprise” it is.

But for those that have been paying attention, it won’t be much of a “surprise” at all.

When the stock market does crash, how far might it fall?

During a recent appearance on CNBC, Marc Faber suggested that it could declineby up to 40 percent…

The U.S. stock market could “easily” drop 20 percent to 40 percent, closely followed contrarian Marc Faber said Wednesday—citing a host of factors including the growing list of companies trading below their 200-day moving average.

In recent days, “there were [also] more declining than advancing stocks, and the list of 12-month new lows was very high on Friday,” the publisher of The Gloom, Boom & Doom Report told CNBC’s “Squawk Box.”

“It shows you a lot of stocks are already declining.”

Others, including myself, believe that what we are going to experience is going to be even worse than that.

We live in such a fast-paced world, and most of us don’t have the patience to wait for long-term trends to play out.

If the stock market is not crashing today, to most people that means that everything must be fine.

But once it has crashed, everyone is going to be complaining that they weren’t warned in advance about what was coming and everyone will be complaining that nobody ever fixed the things that caused the exact same problems the last time around.

Personally, I am trying very hard to make sure that nobody can accuse me of not sounding the alarm about the storm that is on the horizon.

The world has never been in more debt, our “too big to fail” banks have never been more reckless, and global financial markets have never been more primed for a collapse.

Amazingly, there are still a lot of “experts” out there that insist that everything is going to be okay somehow.

Of course many of those exact same “experts” were telling us the same thing just before the stock market crashed in 2008 too.

A great financial shaking has already begun around the world, and it will hit U.S. financial markets very soon.

I hope that you are getting ready while you still can.

4 Things That Are Happening Today That Indicate That A Deflationary Financial Collapse Is Imminent

Posted by George Freund on July 23, 2015 at 3:20 PM

By Michael Snyder, on July 20th, 2015

When financial markets crash, they do not do so in a vacuum. There are always patterns, signs and indicators that tell us that something is about to happen. In this article, I am going to share with you four patterns that are happening right now that also happened just prior to the great financial crisis of 2008. These four signs are very strong evidence that a deflationary financial collapse is right around the corner. Instead of the hyperinflationary crisis that so many have warned about, what we are about to experience is a collapse in asset prices, a massive credit crunch and a brief period of absolutely crippling deflation. The response by national governments and global central banks to this horrific financial crisis will cause tremendous inflation down the road, but that comes later. What comes first is a crisis that will initially look a lot like 2008, but will ultimately prove to be much worse. The following are 4 things that are happening right now that indicate that a deflationary financial collapse is imminent…

#1 Commodities Are Crashing

In mid-2008, just before the U.S. stock market crashed in the fall, commodities started crashing hard. Well, now it is happening again. In fact, the Bloomberg Commodity Index just hit a 13 year low, which means that it is already lower than it was at any point during the last financial crisis…


#2 Oil Is Crashing

On Monday, the price of oil dipped back below $50 a barrel. This has surprised many analysts, because a lot of them thought that the price of oil would start to rebound by now.

In early 2014, the price of a barrel of oil was sitting above $100 a barrel and the future of the industry looked very bright. Since that time, the price of oil has fallen by more than 50 percent.

There is only one other time in all of history when the price of oil has fallen by more than $50 a barrel in such a short period of time. That was in 2008, just before the great financial crisis that erupted later that year. In the chart posted below, you can see how similar that last oil crash was to what we are experiencing right now…


#3 Gold Is Crashing

Most people don’t remember that the price of gold took a very serious tumble in the run up to the financial crisis of 2008. In early 2008, the price of gold almost reached $1000 an ounce, but by October it had fallen to nearly $700 an ounce. Of course once the stock market finally crashed it ultimately propelled gold to unprecedented heights, but what we are concerned about for this article is what happens before a crisis arrives.

Just like in 2008, the price of gold has been hit hard in recent months. And on Monday, the price of gold absolutely got slammed. The following comes from USA Today…

The yellow metal has tumbled to a five-year low amid a combination of diminishing investor fears related to foreign headwinds in Greece and China, and stronger growth in the U.S. which is leading to a stronger dollar and coming interest rate hikes from the Federal Reserve. Investors have been dumping shares of gold-related investments as other bearish signs, such as less demand from China and the breaking of key price support levels, add up.

Earlier today, an ounce of gold fell below $1,100 an ounce to $1,080, its lowest level since February 2010. Gold peaked around $1,900 an ounce back in 2011.

For years, I have been telling people that we were going to see wild swings in the prices of gold and silver.

And to be honest, the party is just getting started. Personally, I particularly love silver for the long-term. But you have got to be able to handle the roller coaster ride if you are going to get into precious metals. It is not for the faint of heart.

#4 The U.S. Dollar Index Is Surging

Before the U.S. stock market crashed in the fall of 2008, the U.S. dollar went on a very impressive run. This is something that you can see in the chart posted below. Now, the U.S. dollar is experiencing a similar rise. For a while there it looked like the rally might fizzle out, but in recent days the dollar has started to skyrocket once again. That may sound like good news to most Americans, but the truth is that a strong dollar is highly deflationary for the global financial system as a whole for a variety of reasons. So just like in 2008, this is not the kind of chart that we should want to see…

If a 2008-style financial crisis was imminent, these are the kinds of things that we would expect to see happen. And of course these are not the only signs that are pointing to big problems in our immediate future. For example, the last time there was a major stock market crash in China, it came just before the great U.S. stock market crash in the fall of 2008. This is something that I covered in my previous article entitled “Guess What Happened The Last Time The Chinese Stock Market Crashed Like This?”

As an attorney, I was trained to follow the evidence and to only come to conclusions that were warranted by the facts. And right now, it seems abundantly clear that things are lining up in textbook fashion for another major financial crisis.

But even though what is happening right in front of our eyes is so similar to what happened back in 2008, most people do not see it.

And the reason why they do not see it is because they do not want to see it.

Just like with most things in life, most people end up believing exactly what they want to believe.

Yes, there is a segment of the population that are actually honest truth seekers. If you have felt drawn to this website, you are probably one of them. But overall, most people in our society are far more concerned with making themselves happy than they are about pursuing the truth.

So even though the signs are obvious, most people will never see what is coming in advance.

I hope that does not happen to you.



World Trade Drops Most Since Financial Crisis

Posted by George Freund on July 23, 2015 at 8:20 AM


by Wolf Richter • July 22, 2015


Maybe we shouldn’t take our daily corporate samples too seriously. Maybe they don’t adequately represent the global economy. So IBM’s revenues last quarter plunged 13% from a year ago. It blamed China and the dollar, among other culprits. But IBM’s revenues have dropped for 13 quarters in a row. It’s a normal IBM condition and not a reflection of the global economy.


A whole slew of other tech companies chimed in with either disappointing revenues or disappointing outlooks, or both, each blaming a variety of issues, among them China and the dollar. Chip maker Qualcomm just reported a 14% plunge in its quarterly revenues. It’s having trouble in the smartphone market and will lay off a bunch of people. But maybe they’re just running into tougher competitors, rather than a lousy global economy. And the PC business, which is cratering, is dragging down all those involved. That’s structural and has little to do with the state of the global economy.


Then there’s industrial giant United Technology which reported that its revenues last quarter dropped 5%. Today Caterpillar reported that global machine sales plunged 15% in June compared to a year ago, after having dropped 12% in May and 11% in April, In Asia, machine sales plunged 19%, in Latin America 50%. And in booming North America? Down 5%, after having been up for the prior two months.


So CAT is facing Japanese, Chinese, and German competitors. It’s having to slug it out with them in China precisely when China is slowing. So it may be just CAT that’s having a hard time.

But don’t look at energy. Energy is getting clobbered….


So maybe we’re cherry-picking negative data. There are companies with actual revenue increases and positive outlooks, like Equifax, the credit bureau, which just reported a 10% jump in revenues (14% “in local currency,” as it says). Consumer borrowing is king, and Equifax expedites the process.


So what the heck is going on?


Turns out, global trade during the quarter and during the first five months of the year experienced the sharpest drop-off since the Financial Crisis.


The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released its latest Merchandise World Trade Monitor, which covers global import and export volumes. It was dreary.


World trade shrank 1.2% in May from the previous month. The index fell to 135.1, the lowest level since July 2014, having dropped nearly every month so far this year. It’s down 4.7 points from its peak in December, the sharpest and longest decline since the Financial Crisis.


This chart, going back to January 2012, shows the very crummy state of the global economy, expressed in global trade:


To smoothen out the volatility of these sorts of monthly numbers – though there hasn’t been much volatility this year, it’s been just down – the CPB offers a measure of trade volume “momentum,” which it defines as “the change in the three months average up to the report month relative to the average of the preceding three months.”


That trade momentum measure slumped 1.3% in May, after having dropped 1.2% in April. It now amounts to the most negative “momentum” since the Financial Crisis.


The report explains: “Import and export momentum were close to zero in advanced economies, while both numbers were below 2% in emerging economies.” The chart from CBP, going back to 2010:

This isn’t stagnation or sluggish growth. This is the steepest and longest decline in world trade since the Financial Crisis. Unless a miracle happened in June, and miracles are becoming exceedingly scarce in this sector, world trade will have experienced its first back-to-back quarterly contraction since 2009.


Both of the measures above track import and export volumes. As volumes have been skidding, new shipping capacity has been bursting on the scene in what has become a brutal fight for market share [read… Container Carriers Wage Price War to Form Global Shipping Oligopoly].


Hence pricing per unit, in US dollars, has plunged 14% since May 2014, and nearly 20% since the peak in March 2011. For the months of March, April, and May, the unit price index has hit levels not seen since mid-2009.


World trade isn’t down for just one month, or just one region. It wasn’t bad weather or an election somewhere or whatever. The swoon has now lasted five months. In addition, the CPB decorated its report with sharp downward revisions of the prior months. And it isn’t limited to just one region. The report explains:


The decline was widespread, import and export volumes decreasing in most regions and countries, both advanced and emerging. Import and export growth turned heavily negative in Japan. Among emerging economies, Central and Eastern Europe was one of the worst performers.

Given these trends, the crummy performance of our heavily internationalized revenue-challenged corporate heroes is starting to make sense: it’s tough out there.


But not just in the rest of the world. At first we thought it might have been a blip, a short-term thing. Read… Americans’ Economic Confidence Gets Whacked

Fukushima: "The Ocean Is Broken"

Posted by George Freund on July 22, 2015 at 4:30 PM


"The Ocean Is Broken" by Greg Ray


"It was the silence that made this voyage different from all of those before it. Not the absence of sound, exactly. The wind still whipped the sails and whistled in the rigging. The waves sloshed against the fibreglass hull. And there were plenty of other noises: muffled thuds and bumps and scrapes as the boat knocked against pieces of debris. What was missing were the cries of seabirds that surrounded the boat on previous voyages across the same seas. The birds were missing because the fish were missing. 'It felt as if the ocean itself was dead,' says Ivan Macfadyen.


Ten years earlier, when Newcastle yachtsman Ivan Macfadyen sailed from Melbourne to Osaka, all he'd had to do was throw out a baited line to catch a fish. ''There was not one of the 28 days on that portion of the trip when we didn't catch a good-sized fish to cook up and eat with some rice,'' Macfadyen recalls. But this time, only two fish were caught on the long sea voyage.There were no fish, no birds, in fact there was hardly a sign of life. ''In years gone by I'd gotten used to all the birds and their noises,'' Macfadyen says. ''They'd be following the boat, sometimes resting on the mast before taking off again. You'd see flocks of them wheeling over the surface of the sea in the distance, feeding on pilchards.''


But in March and April this year, only silence and desolation surrounded his boat, Funnel Web, as it plied across a haunted ocean. North of the equator, above Papua New Guinea, the ocean-racers saw a big fishing boat working a reef in the distance. ''All day it was there, trawling back and forth. It was a big ship. Like a mother ship,'' he says. And all night it worked too, under bright floodlights. In the morning, Macfadyen was woken by his crewman calling out, urgently, that the ship had launched a speedboat. ''Obviously I was worried. We were unarmed and pirates are a real worry in those waters. I thought, if these guys had weapons, then we were in deep trouble.''


But they weren't pirates, in the conventional sense, at least. The speedboat came alongside and the Melanesian men aboard offered gifts of fruit and jars of jam and preserves. ''And they gave us five big sugar-bags full of fish,'' Macfadyen says. ''They were good, big fish, of all kinds. Some were fresh but others had obviously been in the sun for a while. We told them there was no way we could possibly use all those fish. There were just two of us, with no real place to store or keep them. They just shrugged and told us to tip them overboard. They told us that this was just a small fraction of a day's by-catch. That they were only interested in tuna and everything else was rubbish. It was all killed, all dumped. They just trawled that reef day and night and stripped it of every living thing.''


It was one fishing boat among countless others working unseen beyond the horizon, many doing exactly the same thing. Little wonder the the sea was dead.The next leg of the Australian's voyage was from Osaka to San Francisco and, for much of the trip, desolation was tinged with fear.


''After we left Japan it felt as if the ocean itself was dead,'' Macfadyen says. ''We saw one whale, sort of rolling helplessly on the surface with what looked like a big tumor on its head. I've done a lot of miles on the ocean in my life and I'm used to seeing turtles, dolphins, sharks and big flurries of feeding birds. But this time, for 3000 nautical miles, there was nothing alive to be seen.''


But garbage was everywhere. ''Part of it was the aftermath of the tsunami that hit Japan a couple of years ago. The wave came in over the land, picked up an unbelievable load of stuff and carried it out to sea. And it's still out there, everywhere you look,'' Macfadyen says.


His brother Glenn, who boarded at Hawaii for the run into the US, marvelled at the ''thousands on thousands'' of yellow plastic buoys. The huge tangles of synthetic rope, fishing lines and nets. Pieces of polystyrene foam by the million. And slicks of oil and petrol, everywhere. Countless hundreds of wooden power poles are out there, snapped off by the killer wave and still trailing wires in the middle of the sea.


On other voyages, when their boat was becalmed, the Macfadyens would just crank the motor and chug off. Not this time. ''In a lot of places we couldn't start our motor for fear of entangling the propeller in the mass of pieces of rope and cable. That's an unheard of situation out in the ocean,'' Ivan Macfadyen recalls. ''If we did motor we couldn't do it at night, only in the daytime with a lookout on the bow, watching for rubbish. In the waters above Hawaii, you could see right down into the depths. I could see that the debris isn't just on the surface, it's all the way down. And it's all sizes, from a soft-drink bottle to pieces the size of a big car or truck. We saw a factory chimney sticking out of the water. ''We were weaving around these pieces of debris. It was like sailing through a garbage tip.''


There was little escape. Below decks, the hull amplified the sound of flotsam and junk scraping the length of the boat. The pair lived in constant fear of hitting something really big and going down. Plastic was everywhere, bottles, bags, chairs, toys. Something in the water off Japan reacted with the yacht's distinctive shiny yellow paint and turned it dull.


Ivan Macfadyen is still coming to terms with the horror of the voyage. ''The ocean is broken,'' he says.


However, much of the world has little idea of the vastness of the problem and Macfadyen is looking at ways of alerting governments and organizations to the disaster that floats offshore. He intends approaching the organizers of Australia's major ocean races, trying to enlist yachties into an international scheme that uses volunteer yachtsmen to monitor debris and marine life. Macfadyen signed up to a similar scheme while in the US, responding to an approach by US academics who asked yachties to fill in daily survey forms and collect samples for radiation testing - a significant concern after the tsunami and nuclear power station failure in Japan.


''I asked them why don't we push for a fleet to go and clean up the mess,'' Macfadyen says. ''They said they'd calculated that the environmental damage from burning the fuel to do that job would be worse than just leaving the debris there.''



Gov’t Official: Chilling Report from Pacific Ocean: “Silence On The seas”; “Quite literally, There Isn’t Any Fish”


Senator Penelope Wright, Parliament of Australia, Mar 5, 2015: “Like many others, I read an article in 2013 by Ivan Macfadyen called ‘The ocean is broken‘. It was published in The Sydney Morning Herald. He is an experienced sailor, so he had the ability to compare his experience then with other trips. It was chilling. It was heartbreaking really. He had noticed changes in the last years. Basically, he was confronted by the silence that he heard, the silence on the seas, and he realized that this was attributable to the fact that they saw very, very few birds. They also caught very few fish… two fish.”


Interview with Ivan Macfadyen, Talk Radio Europe, May 24, 2015 (at 14:30 in): “The reality was, if I would have had no spare dry food on the boat — relying on fish this time around — we would have starved to death, because, quite literally, there isn’t any fish. There’s vast tracks where they’re just all gone. Where you could fish reliably, they’re just not there. I used to fish here on exactly the same course, at exactly the same time of year, the same ocean, on the same course, into the same place — and I could catch fish everyday, and for some reason now 10 years later they’re all gone.”

Though not discussed in the above interview, Macfadyen has attributed his statement “The ocean is broken” to the impact of Fukushima:


Host: What about sea birds and all of that?


Macfadyen: As you get closer up to Japan they’re all gone, they’re not there anymore. Everything’s all gone, it’s just like sailing in a dead sea… there’s nothing…


Host: After Japan you headed to America, did you see any impact from Fukushima?


Macfadyen: It’s dead. That’s where I coined the phrase, ‘The ocean’s broken’ – because, for thousands of miles, there’s nothing. No birds, no fish, no sharks, no dolphins, no turtles… they’re not there… all those beautiful creatures, they’re just all gone. We’d seen a whale, round about probably 1,000 miles off Japan, just lying on the surface with like a big tumor just behind its head. It looked like it was going to die. It didn’t try to get away, it didn’t flap its tail, it didn’t do anything. It had such a profound effect on me. Just talking about it makes me feel like I want to cry.


Prof. Yukari Takamura, Nagoya Univ., Aug 25, 2014: On March 11 2011 there was an extremely severe nuclear accident at the Fukushima Daiichi nuclear power plant. According to the report of the French government it is estimated that 27.1 thousand terabecquerels of radioactive cesium-137 had leaked into the ocean by July 2011, causing significant marine pollution. Even in July 2013, TEPCO announced that contaminated ground water in the area of Fukushima Daiichi NPP had been leaked into the plant port. There is ongoing concern that some of the radioactive material may be bio-accumulating in fish and marine animals. An enormous amount of radioactive substances were emitted into the environment. Some research demonstrates the existence of a potential ecological risk, particularly for reproduction. The knowledge about a long-term radiological risk to the ecosystem is still very limited. Environmental monitoring and increased knowledge is a key that will allow us to evaluate the ecological impact. The 1996 Protocol to Amend the Vienna Convention on Civil Liability for Nuclear Damage covers some damage to the environment by including recovery for the costs of measures of reinstatement of impaired environment, as well as for loss of income derived from an economic interest in any use or enjoyment of the environment."


Watch Sen. Wright’s speech here.