Emergency meetings, Banker summits, Crashing European Banks

The currant activity conforms to what can be expected in the face of a pending dire financial event. Any other explanation could be handled in the normal course of business. So what has now become dire?

We have some speculations here but they do not quite cut it.  I think that we may be dealing with a substantial call on the banking system that they cannot realistically meet.  This could well be the Chinese liquidation of US dollar financial assets.

The Chinese are  now facing a massive financial liquidity crisis that you have barely heard of and quite naturally they are reaching to release financial assets back to China. to shore up their own system.  The Ponzi scheme has obviously ended.  The entire asset side of the Chinese banking system may simply be non performing and the fall off in trade is now strangling dollar income pushing dollar asset liquidation.  The shoe has finally dropped.

This will be the greatest readjustment since we cleaned up the petrodollar imbalance back in the 1970's and it can be seriously messy.

This is not about Chinese power ( mostly performance art anyway ) so much as about Chinese weakness and their failure to broaden their economic base in the last decade.  I am sorry to say this but all hell is likely to break loose in China.  This is dire.

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What in the World is Going on with Banks this Week? Emergency meetings, banker summits, crashing European banks.......

Written by David Haggith - The Great Recession Blog

http://www.zerohedge.com/news/2016-04-12/what-world-going-banks-week-emergency-meetings-banker-summits-crashing-european-bank

Just about every major banker and finance minister in the world is meeting in Washington, D.C., this week, following two rushed, secretive meetings of the Federal Reserve and another instantaneous and rare meeting between the Fed Chair and the president of the United States. These and other emergency bank meetings around the world cause one to wonder what is going down. Let’s start with a bullet list of the week’s big-bank events:

The Federal Reserve Board of Governors just held an “expedited special meeting” on Monday in closed-door session. 

The White House made an immediate announcement that the president was going to meet with Fed Chair Janet Yellen right after Monday’s special meeting and that Vice President Biden would be joining them. 

The Federal Reserve very shortly posted an announcement of another expedited closed-door meeting for Tuesday for the specific purpose of “bank supervision.” 

A G-20 meeting of finance ministers and central-bank heads starts in Washington, D.C., on Tuesday, too, and continues through Wednesday. 

Then on Thursday the World Bank and the International Monetary Fund meet in Washington. 

The Federal Reserve Bank of Atlanta just revised US GDP growth for the first quarter to the precipice of recession at 0.1%. 

US banks are expected this coming week to report their worst quarter financially since the start of the Great Recession. 

The press stated that the German government will sue the European Central Bank if it launches a more aggressive and populist form of quantitative easing, often called “helicopter money.” 

The European Union’s new “bail-in” procedures for failing banks were employed for the first time with Austrian bank Heta Asset Resolution AG. 

Italy’s minister of finance called an emergency meeting of Italian bankers to engage “last resort” measures for dealing with 360-billion euros of bad loans in banks that have only 50 billion in capital. 

President Obama’s meeting with Fed Chair Yellen

It is rare for presidents to meet with the chair of the Federal Reserve. The last time President Obama met with Janet Yellen was in November of 2014, a year and a half ago. It is even more rare for the vice president of the United States to join them. In fact, I’ve heard but haven’t verified that it has never happened in a suddenly called meeting with the Fed before.

For security reasons, the president and vice president don’t regularly attend the same events. There are, of course, many planning sessions or emergency meetings where they do get together, but not with the head of the Federal Reserve. Emergency meetings where the VP is included in the planning session would include situations related to dire national security in case the VP winds up having to take over.

(George Bush and Dick Cheney were exceptional to the point that everyone commented on how often the VP was included in meetings with the president, but I always figured that was because George Bush couldn’t think and speak without Cheney acting as the ventriloquist.)

In fact the meeting with the prez and vice prez is so rare that the White House is bending over backwards to assure the entire nation that the president is not meeting with Yellen to try to influence the Fed, which is required to act independently of politics (so they say).

According to the White House, President Obama is meeting with the Fed chair and Biden to discuss the nation’s “longer-term economic outlook,” even though Yellen just told the entire nation that the economy was strong and had arrived nearly back at “full health.” The president says they will be “comparing notes.” Do their notes about the nation’s outlook disagree?

White House spokesman Josh Earnest said both Obama and Yellen are focused on ways to expand economic opportunities for the U.S. middle class. He called the meeting an opportunity for the two to “trade notes” while emphasizing that Yellen makes decisions about monetary policy independently. 

Either such meetings are, indeed, extremely rare, or the White House doth protest to much because they spent more time emphasize what the president was not going to do than what he was going to do in assuring us he will not try to influence Yellen.

“The president has been pleased with the way that she has fulfilled what is a critically important job,” Earnest said. He added that Obama has “the utmost respect for the independent nature of her role.”

Earnest also said that, “even in a confidential setting” Obama would not “have a conversation that would undermine” the Fed’s ability to make “critical financial decisions independently.”

If such meetings with the Fed are so rare they require careful explanation, why the sudden call of the meeting, oddly timed between two specially called, emergency meetings of the Fed — or, at least, “expedited” meetings of the Fed. It can’t just be that the president wants to plan what he will be saying at this week’s G-20 conference, if he’s to speak there. That kind of planning would happen in advance because one knows the conference is coming. One striking peculiarity of the presidents meeting with the Fed is that it appeared to have been called immediately after the Fed announced Monday’s “expedited” meeting of the Board of Governors.

We are in an election cycle, and I already speculated in my last article that, with the anti-establishment, Fed-hating candidates, Sanders and Trump doing so well in their bids for the presidency we could be sure the Administration would be doing all it can along with the Fed to put some accelerant on this economy and forestall the recession that I believe we have already begun.

A recession would prove Trump and Sander right in their statements about a coming recession or the failed actions of the Fed and Wall Street to bring true recovery. So, the Fed and the President have every reason to work together to make sure such an announcement never happens. That could be what “comparing notes” on the economy’s future means — how do we assure the economy doesn’t fall apart in the next few months before the election since we have that common interest?

That would explanation why the White House is saying, in advance of any accusations, that the president isn’t trying to influence the Fed. They want to get ahead of the story. Of course, it could just be that they recognize such rare meetings will lead to the kind of speculation I’m now doing.