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Cisco’s Gloomy Forecast Shows NSA Effect Is Starting To Hit Home

Gigaom

Cisco(s csco) has shocked financial analysts — who were expecting healthy growth — by predicting a 10 percent sales slump during the current quarter. There are a variety of reasons for this, but the standout one is the backlash in emerging markets against the activities of the U.S. signals intelligence agency, the NSA.

This shouldn’t have come as a surprise. Communications infrastructure is absolutely central to the surveillance scandal, and that’s Cisco’s business. An American networking firm was never going to come out of this mess well – and the whole infrastructure business is in a state of upheaval anyway — but the figures are sobering nonetheless.

In the last quarter, on which Cisco was reporting on Wednesday, the company saw a sudden 21 percent revenue drop in its top 5 emerging markets: 25 percent down in Brazil, 18 percent down in India, Mexico and China, and 30 percent down…

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Who’s Debt Are You? – Latest Statistics

There’s been some buzz in the markets lately, concerning the health of America’s sovereign debt. The nation owes other countries about USD 5,7 trillion, and about 3 trillion is due this year. Investors are worried that the US won’t be able to borrow much more, at least not to the same low price,  and that big buyers of US Treasuries, like China and Russia, may start dumping their bonds to put USA in a financial squeeze. Well, I wouldn’t worry too much. You see, most countries who are lending money to the American government are receiving huge loans from US banks. The next victim of the debt crisis is probably not USA, nor the EU.

“Claims on advanced economies contracted by $342 billion between end-December 2012 and end-March 2013, mostly due to reduced claims on banks and related offices. This marked the sixth consecutive quarterly decline in interbank positions on advanced economies and brought the cumulative reduction since end-September 2011 to $1.9 trillion. In contrast, claims on borrowers in emerging economies increased by $265 billion between end-December 2012 and end-March 2013.”

Bank of International Settlements – BIS
vkontakte
The Bank of International Settlements (BIS) recently realised new data and statistics on global debt, an interesting oversight on who-owes-who in a world ridden by fear of economic collapse and social unrest. The numbers reveal a picture slightly different from what most people see.
F.ex: European countries owe foreign nations twice as much as the United Nations owe others. And there seem to be several groups of nations, connected through the same banks, but for some reason it is not the countries with the largest debt who are in most trouble.
We already know the US numbers, and the Americans owe most of the money to themselves, anyway… (Federal Reserve, that is.). The 5,7 trillion debt to foreign countries is a relatively small sum compared to the grand total of about 14 trillion.
Elsewhere, the sovereign debt, with all its derivatives, represent a much higher risk.
Europe’s Fab Four
Consolidated foreign claims of 24 reporting banks – immediate borrower basis.
United Kingdom – USD 3,2 trillion.
Germany – USD 1,8 trillion.
France – USD 1,6 trillion
 Netherlands – USD 1,9 trillion.
european-debt
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And who do they borrow from?
United Kingdom:
  1. Other EU bank: 1,5 trillion.
  2. France: 200.200 million.
  3. Australia: 121.577 million.
  4. Canada: 102.963 million.
Germany:
  1. Other EU banks: 1,1 trillion.
  2. France: 198.000 million.
  3. Austria: 37,914 million.
  4. Canada: 23.838 million.
France:
  1. Other EU banks: 714,235 million.
  2. Canada: 24,612 million.
  3. Belgium: 23,536 million.
  4. Austria: 13,442 million.
Netherlands:
  1. Other EU banks: 577,427 million.
  2. France: 156,857 million.
  3. Belgium: 22,746 million.
  4. Canada: 13,722 million.
man-saw-his-fortune-sink-under-a-massive-pile-of-debt
And who have most money outstanding?
  1. United Kingdom – USD 2,6 trillion.
  2. Germany – USD 1,5 trillion.
  3. France – USD 1,2 trillion.
  4. Netherlands – USD 0,8 trillion.
Is there a pattern here?….somewhere?
The BIS writes:

“The latest international banking statistics show diverging trends in credit to advanced economies and emerging markets. Claims on advanced economies contracted by $342 billion between end-December 2012 and end-March 2013, mostly due to reduced claims on banks and related offices. This marked the sixth consecutive quarterly decline in interbank positions on advanced economies and brought the cumulative reduction since end-September 2011 to $1.9 trillion. In contrast, claims on borrowers in emerging economies increased by $265 billion between end-December 2012 and end-March 2013. The expansion was driven mostly by credit to emerging economies in Asia, especially China. In recent years, BIS reporting banks’ exposure to Asian credit risk has increased even more rapidly than their lending to Asian borrowers because lending has been accompanied by a reduction in net credit risk transfers out of the region.”

That means we now have a USD 30 trillion (+) debt bubble in transit between different parts of the world! (At the same time the richest people in the world has more than 20 trillion stacked away in places like Claman Island to avoid taxes.).

Just great….

b791

The Asians now owe other countries – mostly European – close to USD 2 trillion, with China‘s debt closing in on USD 600,000 million.

The rest is as follows:

South Korea: 309,363 million,

India: 304,920 million.

Chinese Taipei: 161,404

Malaysia: 155,500 million

Thailand: 102,299 million

Indonesia:  100,770 million.

Apocalypse

NOTE:

Statistics at end-March 2013 are preliminary and subject to change.

Data are available on the BIS website, via the BIS WebStats query tool, or in a single PDF indetailed annex tables. Developments in the latest data are highlighted in the Statistical release.

Revised data and an analysis of recent trends will be released in conjunction with the forthcoming BIS Quarterly Review, to be published on 16 September 2013. Data at end-June 2013 will be released no later than 23 October 2013.

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Putin Got Obama Hanging By the Balls

Financially speaking, of course. But no wonder Russia’s president Vladimir Putin hardly bothered to comment on the almost hysterical Barack Obama the other night, calling him a “jackass” and a “dick”.  America owes Russia 138 billion dollar. Together with his good buddy and neighbour,  Xi Jinping of China, the two trade partners now control about 1,5 trillion dollar, or 25%,  of all US debt. That means they almost control the United States of America.

“The end of “easy money” in the US is going to fundamentally influence the global economy.”

Aleksey Kudrin

 

G20SUMMIT

I think I know what kinda feelings that made US president, Barack Obama, go nuts over Russia’s president, Vladimir Putin at the opening day of the G20 meeting in St. Petersburg. Imagine; visiting your bank, where you’ve been a loyal on-time-paying customer for 20 years, just to make sure that your credit cards will be renewed when they expires at end of the year: “We’re very sorry, but your application is denied due to changes in our credit rating practices” Jackass! Let me talk to the dick in charge!

I’m not sure, but it seems like a plausible explanation.

Mr. Obama comes to St. Petersburg to gain support for his plan to launch a military attack on Syria. Instead the other state leaders starts nagging him about all the money he have borrowed on behalf of the American people and how he plans to come up with the 3 trillion dollar needed to renew existing loans due this year.

China urges the United States to be “mindful of the spill over effects” of the planned tapering of the country’s monetary stimulus , Zhu Guangyao, China’s vice finance minister said during a meeting with Russian President Vladimir Putin at the G20 summit. The US should “work to contribute to the stability of the global financial markets, and the steady recovery of the global economy,” Zhu added.

Talking exclusively to Russia Today, Russia’s former finance minister Aleksey Kudrin says the end of “easy money” in the US “is going to fundamentally influence the global economy”. However, though the tapering could be extremely painful right now, countries around the world need to reconcile the thought that such money injections could be just temporary, Kudrin says.

“Now we are witnessing an attempt to win time to reform the economy, to consolidate budgets, to cut expenses, to increase taxes, to overhaul social welfare, to stimulate some of the industries. … At a certain point this additional stimulus will have to be gone and the economy will have to function on its own,” he says.

“Will it (the global economy) be able to? Which countries won’t cope with the situation? We still don’t know. So, we’ll have to adapt to this new kind of situation. This is going to be a challenge”, Kudrin concludes.

A challenge, indeed.  What Mr. Kurdin is saying implisit is that some countries will NOT make it.

And here comes the scary part:

Vladimir-PutinAt the moment, America owes other nations 5,6 trillion dollar, according to the  US Treasuruy.

As it turns out, Russia and China holds about 25% of it. Imagine that! Imagine what may happen if they should decide to dump the whole load at the market, followed by a few other nervous investors.

That’s right. Disaster. But what does that really mean in this context?

Thanks to The Economic Collapse Blog, here’s a brief summary:

These are a few consequences of rising bond yields on 10 year US Treasuries.

  • It will cost the federal government more to borrow money.
  • It will cost state and local governments more to borrow money.
  • As bond yields go up, bond values go down.  In the end, rising bond yields could end up costing bond investors trillions of dollars.
  • Rising bond yields will cause mortgage rates to skyrocket.  In fact, we are already starting to see this happen.  This week the average rate on a 30 year mortgage hit 4.57 percent.
  • Higher interest rates will mean a slowdown in economic activity at a time when we definitely cannot afford it.
  • As economic activity slows down, that will be very bad for stocks.  When the next great stock market crash happens (and it is coming), equity investors could end up losing trillions of dollars of wealth.
  • Of course the biggest threat of all is the 441 trillion dollar interest rate derivatives time bomb that is sitting out there.  Rapidly rising interest rates could potentially bring down several of our “too big to fail” banks in rapid succession and throw us into the greatest financial crisis the nation has ever seen.

Are you starting to get the picture?

 

This is one of those articles that makes you go hmm…

Full Story&Documentation @ The Economic Collapse Blog

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