Europe

Authored by Simon Black via SovereignMan.com,

What’s money worth if interest rates are negative?

Interest rates, after all, are the “price” of money.

When we borrow money from a bank and pay interest on the loan, it means that the money we’re borrowing has value. That –capital- has value.

Negative interest rates, on the other hand, suggest that capital is totally worthless.

This isn’t a philosophical exercise. These are the times we’re living in.

One day after DoubleLine chief Jeff Gundlach told Bloomberg TV that it is time for investors to head for the exits as his highest conviction trade is "volatility is about to go up", and that he is reducing his positions in junk bonds, EM debt and other lower-quality investments on fears investor sentiment may roll over (explaining later to CNBC that he expects to make no less than 400% on his S&P puts) today two other money-managing titans - T.Rowe Price and Pimco - both issued similar warnings to investors, urging investors to start taking profits.

Authored by Daniel Lacalle via The Mises Institute,

The Bank of International Settlements (BIS) has warned again of the collateral damages of extremely loose monetary policy. One of the biggest threats is the rise of “zombie companies.” Since the “recovery” started, zombie firms have increased from 7.5% to 10.5%. In Europe, BofA estimates that about 9% of the largest companies could be categorized as “walking dead.”

On this day 10 years ago, money markets started to seize up, requiring heavily-coordinated central bank action that launched an extraordinary period of central bank activity that is still in full swing today.

In the latest car-ramming terrorist attack in France, at least six French soldiers were injured, three of them seriously, after being rammed by what was described as a black BMW in a Paris suburb, French Armed forces confirmed, adding that the police were searching for the driver in what prosecutors are treating as the latest act of terrorism.

???? Incident à Levallois Perret : intervention de #Police en cours. Un véhicule est recherché

— Préfecture de police (@prefpolice) August 9, 2017