Glencore Collapse Could Be Even Worse Than Feared

Editor’s Note: We’re sharing this update on Glencore’s collapse with you because it’s shaping up to be even worse than Michael originally thought. Glencore still poses a “Lehman Brothers”-level risk to the global economy – but it’s now clear the world’s biggest commodities trader is on the hook for hundreds of billions in “shadow debt” that it simply refuses to address. This crisis is one small step away from upending our financial system, so here’s what you need to know…

A lot of powerful voices have joined me in warning about the potential threat that Glencore Plc. (LON: GLEN) poses to global financial markets. Bank of America, for instance, has published a report on the true size of the fallout. As you’ll see in a moment, it’s staggering.

But since we talked about Glencore late last month, something insane has happened: The stock has gone up.

But not for any good reason. The company has not righted the ship. The surge is only due to short-sellers covering their positions. Continue reading

Will The ECB Finally Use The Greek “Nuclear Option” This Wednesdsay?

This was not supposed to happen: by now the Greek insolvency “can” should have been kicked, and the Greek government, realizing the money has run out for both the government and the banking system, should have folded to Troika demands, and allow the Troika money to return repaying obligations to the Troika in exchange for more spending cuts.

Instead, the “game theoretical” approach of bluffing until the end, and beyond, has put both countries in a corner from which neither knows how to escape, and with the “final deal deadline” passing this weekend we now have quotes such as this from the EU:

  • OVERTVELDT: GIVING IN TO GREECE WOULD UNDERMINE EU CREDIBILITY

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Greece orders raid on government coffers as cash dwindles

Government issues a decree forcing all state bodies to transfer funds to the central bank

The Greek government has ordered a mandatory transfer of cash reserves from state-owned enterprises to its central bank, in a desperate bid to gather enough cash to remain solvent.

Citing “extremely urgent and unforeseen needs”, the government issued the decree which will also apply to local government authorities. Continue reading