Category Archives: Banking

Under “Basel III” Rules Gold Becomes Money Again

In 2018, central banks added nearly 23 million ounces of gold, up 74% from 2017. This is the highest annual purchase rate increase since 1971, and the second-highest rate in history. Russia was the biggest buyer. And not surprisingly, the lion’s share of gold is flowing into central banks of countries that are in the sights of America’s killing machine—the Military Industrial Complex that Eisenhower warned us about in 1958.

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The Bank for International Settlements (BIS), located in Basal, Switzerland, is often referred to as the central bankers’ bank. Related to this issue of central bank hoarding of gold is the fact that on March 29 the BIS will permit central banks to count the physical gold it holds (marked to market) as a reserve asset just the same as it allows cash and sovereign debt instruments to be counted.

There has been a long-term view that China and other nations dishoarding dollars in favor of gold have been quite happy about western banks trashing the gold price through the synthetic paper markets. But one has to wonder if that might not change, once physical gold is marked to market for the sake of enlarging bank balance sheets.

This also raises the question with regard to how much gold the U.S. actually holds as opposed to what it claims to hold. James Sinclair has always argued that the only way the world can overcome the debt that is strangling the global economy is to remonetize gold on the balance sheets of central banks at a price in many thousands of dollars higher. This would mean a major change in the global monetary system away from the dollar, as China has been pushing for the last decade or so.

If banks own and possess gold bullion, they can use that asset as equity and thus this will enable them to print more money. It may be no coincidence that as March 29th has been approaching banks around the world have been buying huge amounts of physical gold and taking delivery. For the first time in 50 years, central banks bought over 640 tons of gold bars last year, almost twice as much as in 2017 and the highest level raised since 1971, when President Nixon closed the gold window and forced the world onto a floating rate currency system.

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But as Chris Powell of GATA noted, that in itself is not news. The move toward making gold equal to cash and bonds was anticipated several years ago. However, what is news is the realization by a major Italian Newspaper, II Sole/24 Ore, that “synthetic gold,” or “paper gold,” has been used to suppress the price of gold, thus enabling countries and their central banks to continue to buy gold and build up their reserves at lower and lower prices as massive amounts of artificially-created “synthetic gold” triggers layer upon layer of artificially lower priced gold as unaware private investors panic out of their positions.

The paper concludes that,

“In recent years, but especially in 2018, a jump in the price of gold would have been the normal order of things. On the contrary, gold closed last year with a 7-percent downturn and a negative financial return. How do you explain this? While the central banks raided “real” gold bars behind the scenes, they pushed and coordinated the offer of hundreds of tons of “synthetic gold” on the London and New York exchanges, where 90 percent of the trading of metals takes place. The excess supply of gold derivatives obviously served to knock down the price of gold, forcing investors to liquidate positions to limit large losses accumulated on futures. Thus, the more gold futures prices fell, the more investors sold “synthetic gold,” triggering bearish spirals exploited by central banks to buy physical gold at ever-lower prices”.

The only way governments can manage the levels of debt that threaten the financial survival of the Western world is to inflate (debase) their currencies. The ability to count gold as a reserve from which banks can create monetary inflation is not only to allow gold to become a reserve on the balance sheet of banks but to have a much, much higher, gold price to build up equity in line with the massive debt in the system.

Source: ZeroHedge

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AOC: Wells Fargo ‘Involved’ In Caging Children; Thinks Banks Should Assume Borrowers’ Liabilities

More than two years after Wells Fargo & Co. erupted into scandals, Chief Executive Officer Tim Sloan returned to Capitol Hill to lay out his efforts to clean up the mess. The bank has apparently made little progress in winning over lawmakers.

However, all eyes were on Rep. Alexandria Ocasio-Cortez (D-NY) after she suggested Wells Fargo was “involved” in the caging of migrant children because the bank used to finance private prison companies CoreCivic and Geo Group during congressinal hearing.

It was a brilliant distraction…

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“Mr. Sloan, why was the bank involved in the caging of children and financing the caging of children to begin with?” the freshman House Democrat and economics major asked Wells Fargo CEO Timothy Sloan. 

“Uh, I don’t know how to answer that question because we weren’t,” Sloan replied. 

“Uh, so in finance — you, you were financing and involved in financing of debt of CoreCivic and Geo Group, correct?” she shot back. 

To which Sloan replied: “For a period of time, we were involved in financing one of the firms — we’re not anymore and the other. I’m not familiar with the specific assertion that you’re making, but we weren’t directly involved in that.”

“OK, so these companies run private detention facilities run by ICE, which is involved in caging children, but I’ll move on,” AOC retorted.

Of note, Wells Fargo was prominently featured in a November 2016 report along with nine other banks for lending CoreCivic and GEO Group $444 million and $450 million respectively during the Obama administration – the same period of time during which a a photo of caged children misattributed to the Trump administration was taken. 

Wells Fargo and other banks have decided to reevaluate their lending activities to private prisons amid controversy over the Trump administration’s immigration policies. 

Ultimate liability

AOC then shifted gears, asking Sloan if Wells Fargo should be involved in paying for environmental cleanup if a bank-financed oil project such as the Dakota Pipeline were to leak

“So hypothetically, if there was a leak from the Dakota Access Pipeline, why shouldn’t Wells Fargo pay for the cleanup of it, since it paid for the construction of the pipeline itself?” asked AOC – suggesting that the pipeline is “widely seen to be environmentally unstable.” 

Sloan looked a bit puzzled, replying: “Again the reason we were one of the 17 or 19 banks that financed that is because our team reviewed the environmental impact and we concluded that it was a risk that we were willing to take.” 

The responses to AOC’s line of questioning have been entertaining to say the least.  

Source: ZeroHedge

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Review/Summary of The Brains Behind AOC Alexandria Ocasio-Cortez

Bond Illiquidity, LIBOR and You

Summary
  • A letter to the Alternative Reference Rates Committee (ARRC) from the Secured Finance Industry Group (SFIG) put an end to the fiction that major financial institutions support SOFR.
  • Financial institutions are justly concerned that SOFR could fatally squeeze bank margins in a crisis.
  • Nevertheless, other proposed alternatives, such as the changes to LIBOR proposed by Intercontinental Exchange (ICE), do not fit the regulators’ requirement that the replacement be determined by liquid market transactions prices.
  • Regulators cannot introduce a new financial instrument. LIBOR’s replacement must be the result of private sector innovation.

(Kurt Dew) A recent Secured Finance Industry Group (SFIG) comment letter is SFIG’s response to a request for comment by the Alternative Reference Rates Committee (ARRC) – a Fed-appointed committee of bankers tasked to solve the LIBOR problem. The Fed’s ARRC creation was an embarrassingly transparent attempt by the regulators to co-opt industry objections to their LIBOR replacement. ARRC proposes to replace LIBOR by the Secured Overnight Financing Rate (SOFR) – a Fed-created version of the overnight repurchase agreement rate. The SFIG comment details the objections of financial institutions to SOFR. Importantly, SFIG serves as chair of ARRC. The critical comment letter is thus the final blow to the regulators’ failed effort to gain the appearance of financial institution support for SOFR.

However, more importantly, neither financial institutions nor their regulators have a clear plan to resolve the need to replace LIBOR. If replacing LIBOR were not such a critical matter, the Byzantine machinations of the bank regulators and financial institutions around SOFR would be amusing. However, the pricing of tens of trillions in debt instruments and hundreds of trillions in derivative instruments depends on a smooth transition to some reference rate other than LIBOR. I contend that this enormous magnitude is a low estimate of the financial market assets at risk due to poorly governed debt markets.

Financial markets’ failure to solve the LIBOR replacement problem is the result of a misunderstanding of the reasons for the LIBOR problem. Understanding of LIBOR suffers from journalistic misdirection, on one hand, and a misunderstanding of the root problem that the LIBOR brouhaha exemplifies, on the other.

The failure of LIBOR is a market structure failure. However, the financial press bills LIBOR’s failure mistakenly as a failure of ethics among bankers. Recorded transcripts of telephone, email, and chat room conversations of small groups of traders provided the evidence of ethical weaknesses leading to attempted market manipulation that drove the post-Financial Crisis LIBOR embarrassment.

However, markets themselves typically are the best antidote to attempted market manipulation. The market solution to trader cabals formed to alter prices has always been a simple one. In a liquid market, larger market forces inevitably swamp organized efforts to manipulate prices. Cabals don’t work in a liquid market because the manipulators lose money.

The split over a LIBOR is an enormous opportunity.

Financial institutions have quite reasonably insisted on two key properties that SOFR lacks.

  • The LIBOR replacement should be forward-looking. That is, the rate should reflect the market’s opinion of overnight interest costs on average in the coming three months.
  • The LIBOR replacement should reflect the interest cost of private unsecured borrowers, instead of the lower interest costs of the Treasury.

Thus, coupled with the TBTF banks’ endorsement of the Intercontinental Exchange Inc. (ICE) candidate for a LIBOR replacement, the SFIG letter shows that ARRC’s SOFR proposal does not represent the banks and other financial institutions that are ARRC members. Worse, it raises a serious threat. If regulators seize on an index that might potentially bankrupt one or more major financial institutions during a financial crisis, those institutions do not plan to allow the Fed to pass the blame for this disastrous decision to them.

However, the banks (or a third party) will, I believe, have to do more than provide another bank-calculated index. The self-acknowledged problem with the ICE (TBTF endorsed) LIBOR replacement is that any index the procedure produces is the result of a transaction selection process by banks themselves. Thus, the ICE fix remains vulnerable to the same ethical vulnerabilities that LIBOR itself faced.

In short, any satisfactory LIBOR replacement must be a form of debt that doesn’t exist now. We could throw up our hands and use the hazardous SOFR, but this seems to be a negative way of looking at the situation.

This is an obvious opportunity to seize an enormous chunk of the financial markets in one fell swoop by addressing bond market illiquidity more generally. Moreover, it is an opportunity that anybody with the courage and the capital could pursue. The problem is one of creating a new debt market with a different structure. Such a new market would have no incumbent oligopolies and no reactionary regulators. Capital, a few hotshot IT professionals, and some people with skills of persuasion would be enough ammunition to get the job done. Island overwhelmed the incumbent stock exchanges with less.

Interestingly, in all likelihood, TBTF banks, incumbent exchanges, and regulators are at a disadvantage in the pursuit of a debt market innovation since they are married to old ways of generating revenues. An incumbent TBTF bank pursuing a new market structure, for example, would not find management friendly to ideas such as putting an end to collateral hypothecation in the repo market.

Why are we getting LIBOR wrong?

SFIG and the TBTF banks also concede that there is no existing instrument that meets the minimal standards required of a LIBOR replacement – the replacement should be a term (probably three-month, or six-month) unsecured debt instrument, traded in a liquid marketplace where recorded transaction prices are the result of the combined forces of supply and demand. SFIG’s comment letter to ARRC’s request to comment on SOFR points to a central quandary that neither SOFR nor its detractors have addressed. No financial instrument meets these criteria today.

Don’t blame the Fed. The Fed did everything imaginable to get industry support for repurchase agreements, the only existing liquid instrument where an honest broker (the Fed) records market transactions. Blame the markets themselves. Organized market participants are adopting the time-honored “See no evil; hear no evil; speak no evil.” approach. Once ARRC had endorsed SOFR, CME Group (CME) helpfully created a futures contract based on SOFR.

All that remained was for the markets to begin trading the SOFR-based instruments. However, that didn’t happen. CME volume in SOFR futures remains a small fraction of Eurodollar (LIBOR) futures volume. In itself, this is not a failing of the marketplace. It’s simply the market’s recognition that SOFR futures don’t provide adequate protection for their existing risks.

How big is the LIBOR problem?

No matter how dire you believe the LIBOR problem to be, the underlying problem of debt market illiquidity that the LIBOR problem reveals is many times bigger. A LIBOR fix only resolves the issue of illiquidity in the short-term end of the market for unsecured debt.

LIBOR became important to society when it began to appear as a factor in the cost of mortgages, municipal debt, and credit card debt. In other words, LIBOR is different from the interest cost of a corporate bond because of LIBOR’s visibility. However, of course, all bank debt, no matter how obscure, is a factor in the cost of consumer borrowing.

An exchange trading liquid tailor-made debt issues that capture the primary price risks associated with debt issuance at all maturities would have a massive beneficial effect on the cost of financing. This market would generate transactions comparable to the combined volume of the stock exchanges, assuming turnover in the two markets to be comparable.

What flaw in market structure creates the LIBOR/debt market liquidity problem? In the markets for corporate liabilities, the issuer is concerned about the market appeal of the terms upon which debt is sold only once – the issue date. After that, any action the corporation might take that benefits its stockholders at the expense of its debtholders faces a single low hurdle – is it legal? Investors are wise to devote more time and attention to debt acquisition than to share acquisition.

If bondholders could devise an instrument that liberates its holder from the negative effects on debt valuation of the decision-making power of a single issuer, it would be interesting to see what effect that would have on the position within corporate politics of debtholders relative to stockholders. One could imagine the popularity of this buyer-friendly instrument growing relative to the popularity of the current issuer-centric debt issues. As this form of debt grows as a share of the market for debt, the management of this debt would become gatekeepers for bond market liquidity. They might gradually induce issuers to write more buyer-friendly forms of debt.

The legal obligation of corporate management to consider the interest of stockholders when these interests conflict with the interests of debtholders is writ in stone. Nevertheless, there is no legal barrier to investors – the final constituency for all corporate obligations – using their influence to discriminate among debt issues. If debtholders confront stockholders with a positive payoff to pleasing debtholders, there might be multiple systemic improvements. The value of buyer-friendly debt would rise relative to issuer-friendly issues, driving down its interest cost and resulting in capital gains to both debt and shareholders. The result would be an altogether safer financial system as a whole.

Source: by Kurt Dew, Think Twice Finance | Seeking Alpha

U.S. Mint Runs Out Of Silver Eagle Bullion Coins… 2nd Time In Six Months

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(Kitco News) The silver market is seeing a turn in fortunes as demand for physical bullion picks up, with the U.S. Mint selling out of 2018 and 2019 American Eagle silver coins.

The mint issued a statement late Thursday saying they had run out of last year’s and this year’s dated one-ounce coins. “Market fluctuations have resulted in a temporary sellout of 2018 and 2019 silver bullion. Production at the Mint’s West Point facility continues and when sales resume, silver bullion will be offered under allocation,” the mint said.

Year to date the U.S. Mint has sold more than six million coins, the best start since 2017. The surge in sales comes after a dismal 2018 which saw the lowest coin sales in 11.

According to some analysts, silver is attracting renewed investor attention as both precious metals and base metals trade near multi-month highs.

Following in gold’s footsteps, silver prices saw some selling pressure Thursday as momentum traders took profits as the market was trading near a nine-month high earlier in the week. Spot silver futures on Kitco.com last traded at $15.77 an ounce, relatively unchanged on the day.

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However, analysts have noted that despite Thursday’s selling pressure, technical momentum points to further upside.

“The silver bulls still have the overall near-term technical advantage. Prices are in a three-month-old price uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $16.20 an ounce,”said Jim Wyckoff, senior technical analyst at Kitco.com.

Andrew Hecht, creator of the Weekly Hecht report, said that investors have been quietly accumulating silver since the start of the year with open interest has risen 25%.

“Silver is the kind of metal that sits hidden in the brush like a wild beast waiting for an opportunity to pounce,” he said in a report Thursday.

He added that he thinks silver has the potential to push to $21 an ounce in 2019. However, he said that the first level of significant resistance he is watching is at $17.35 an ounce.

Source: by Neils Christensen | Kitco

Modern Monetary Theory Explained

Over the past few months MMT, or Modern Monetary Theory, has exploded onto the financial scene. And not withstanding the Orwellian Newspeak that is encompassed in its title, MMT is simply Keynesian money printing on steroids.

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Japan of course is the poster child for Modern Monetary Theory, as they have been expanding their monetary base for more than two decades without having to experience the normal repercussions of inflation and economic decline.  And because so many modern day academics and ‘economists’ have swallowed hook, line, and sinker Japan’s ‘success’, this theory is now being touted as the way for government’s to provide unlimited benefits to all their citizens. Is it any wonder economic advisers to Democratic Political candidates are all pushing for free everything?

But of course what is missed in all of this is the fact that as of today, all credit begins at the Federal Reserve, and is loaned or sold to the banks FIRST before it is distributed to the government, small businesses, or to consumers.  Thus like in Japan, where the central bank has to use its monetary credit expansion to buy market assets rather than provide liquidity to its real economy in order to avoid inflation, so too would MMT do what is occurring now already following 6-8 years of central bank stimulus.

It would make those who receive the money FIRST… which are the 1%ers, even richer while indebting those who receive it afterwards.

Since central banks began QE (2008):

National Debt on Dec. 31, 2008:  11.5 trillion
National Debt as of today:  22 trillion

Corporate Debt on Dec. 31, 2008:  2.5 trillion
Corporate Debt as of today:  9 trillion

Consumer Debt on Dec. 31, 2008:  2.69 trillion
Consumer Debt as of today:  3.979 trillion

Now, let’s look at how much the 1% has grown their wealth in that same period.

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As you can see, the amount of wealth acquired by the top 1% moved exponentially over the past decade when the central banks began their QE programs of monetary expansion.

Of course many Socialists will say that THEIR programs would sufficiently put the new money almost ‘directly’ into the pockets of the people.  But all one has to do is look at the longstanding Food Stamp or (EBT) program and how the money is actually issued first to JP Morgan (who gets its cut), and after that it is distributed piece meal to the masses.

The reality is, when money is created through a fiat system of CREDIT rather than from a resource backed one like Gold or Silver, those who get access to that money first will always increase their wealth while those who are allowed to access it after will either break even, or as in the case of governments, corporations, and consumers, lose ground via debt and real inflation. 

So when individuals on bubblevision or who wear titles in the halls of academia try to sell you a bill of goods that TODAY is different, and that that they can provide everyone everything because nations are allowed to print as much money as they want at will, simply provide them those pesky little things called ‘facts and evidence’ and tell them that Americans don’t want to be like Venezuela and Zimbabwe when it all comes tumbling down.

Source: Shotgun Economics

“They’re Running Out Of Options” – U.S. Farm Bankruptcies Surge To 10-Year High As Trade War Bites

The Farm Belt helped cement President Trump’s historic electoral triumph over Hillary Clinton. But even before Trump started his trade war with China nearly one year ago, Trump’s protectionist bent has added to the collective woes of farmers, who were already struggling with low prices for corn, soy beans and other agricultural commodities.

China’s decision to purchase millions of soybeans (after orders ground to halt late last year following another round of tariffs) offered some relief to soybean producers who were teetering on the brink even with President Trump’s farm bailout money in hand. But even if negotiations result in a lasting agreement, it might not be enough to save hundreds of American family farms from collapsing into bankruptcy, as the Wall Street Journal pointed out in a story published Wednesday.

https://www.zerohedge.com/s3/files/inline-images/Screen%20Shot%202019-02-06%20at%204.26.01%20PM.png?itok=yL2oJsJ4According to a WSJ analysis of federal data, the number of farmers filing for bankruptcy has climbed to its highest level in a decade…

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…driven by a lasting slump in agricultural commodity prices due in large part to the rise of rival producers like Brazil and Russia.

Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bankruptcies in 2018 compared with 2008. In the Eighth Circuit, which includes states from North Dakota to Arkansas, bankruptcies swelled 96%. The 10th Circuit, which covers Kansas and other states, last year had 59% more bankruptcies than a decade earlier.

And Trump’s trade wars – not just with China, but more broadly – aren’t helping.

Trade disputes under the Trump administration with major buyers of U.S. farm goods, such as China and Mexico, have further roiled agricultural markets and pressured farmers’ incomes. Prices for soybeans and hogs plummeted after those countries retaliated against U.S. steel and aluminum tariffs by imposing duties on U.S. products like oilseeds and pork, slashing shipments to big buyers.

Low milk prices are driving dairy farmers out of business in a market that’s also struggling with retaliatory tariffs on U.S. cheese from Mexico and China. Tariffs on U.S. pork have helped contribute to a record buildup in U.S. meat supplies, leading to lower prices for beef and chicken.

Because of this, the level of farm debt is approaching levels last seen in the 1980s.

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The stress on American farmers is also affecting agribusinesses giants like Archer Daniels Midland, Bunge and Cargill, who are feeling the heat even as lower crop prices translate into less-expensive raw materials for the commodity buyers.

What’s worse is that even after working side jobs to try and make ends meet, some farmers are still winding up more than $1 million in debt.

Mr. Duensing has managed to keep farming, hiring himself out to plant crops for other farmers for extra income and borrowing from an investment group at an interest rate twice as high as offered by traditional lenders. Despite selling some land and equipment, Mr. Duensing remains more than $1 million in debt.

“I’ve been through several dips in 40 years,” said Mr. Duensing. “This one here is gonna kick my butt.”

Even more shocking than the number of bankruptcies, the number of farms that continue to operate while losing money has risen to more than half of all farms, even as the level of productivity has never been higher.

More than half of U.S. farm households lost money farming in recent years, according to the USDA, which estimated that median farm income for U.S. farm households was negative $1,548 in 2018. Farm incomes have slid despite record productivity on American farms, because oversupply drives down commodity prices.

And bankers who lend to farms warn that there will likely be more bankruptcies to come as more producers “are running out of options.”

Agricultural lenders, bankruptcy attorneys and farm advisers warn further bankruptcies are in the offing as more farmers shed assets and get deeper in debt, and banks deny the funds needed to plant a crop this spring.

“We are seeing producers who are running out of options,” said Tim Koch, senior vice president at Omaha, Neb.-based Farm Credit Services of America, which lends to farmers and ranchers in Iowa, Nebraska, South Dakota and Wyoming.

Perhaps the only silver lining – if you can even call it that – is that bankruptcy lawyers in states where farms are prevalent are doing their best business in years.

Mounting stress in the Farm Belt has meant big, if somber, business for the region’s bankruptcy attorneys. In Wichita, Kan., the firm of bankruptcy attorney David Prelle Eron filed 10 farm bankruptcies in 2018, the most it has ever handled in one year. Wade Pittman, a bankruptcy attorney based in Madison, Wis., said his firm filed about 20 farm bankruptcies last year, ahead of past years, and he said he expects the numbers to continue to rise as milk prices remain stagnant.

Joe Peiffer, a Cedar Rapids, Iowa-based attorney, said his office is the busiest—and most profitable—it has ever been. Just before Christmas, he sent letters to eight farmers declining to represent them because he didn’t have sufficient staff to handle their cases promptly. He is doubling his office space and interviewing new attorneys to join the firm.

One factor driving bankruptcies is tighter lending standards, said Mr. Peiffer, including at agricultural banks, which are under pressure from regulators to exercise greater caution over their farm-loan portfolios.

“I’m dealing with people on century farms who may be losing them,” said Mr. Peiffer, whose own father sold his farm in the late 1980s.

One anecdote featured in the story recalls the rash of suicides among NYC cab drivers, who have struggled to pay the hefty loans attached to their taxi medallions thanks to the rise of Uber, Lyft and other ride sharing apps.

Darrell Crapp, the fifth-generation owner of a hog and cattle farm in Lancaster, Wis., returned to his home one day with a queasy feeling in his stomach, only to find his wife unconscious on their bathroom floor. She had swallowed a handful of pills. She survived, but Crapp attributed the incident to financial stressors as their farm teetered on the brink of bankruptcy.

It was a Sunday in April 2017 when a queasy feeling in Darrell Crapp’s stomach sent him rushing home. He found his wife, Diana, lying crumpled on the floor of their Lancaster, Wis., bathroom. She had swallowed a handful of pills.

Overwhelmed with debt and with little prospect of turning a profit that year, the Crapps knew BMO Harris Bank NA wouldn’t lend them money to plant. The bank had frozen the farm’s checking account.

Mrs. Crapp managed the fifth-generation corn, cattle and hog farm’s books. She had stayed up nights drafting dozens of budgets to try to stave off disaster, including 30-day, 60-day and 90-day budgets.

“It was too much for her,” Mr. Crapp, 63, said of his wife, who survived the incident.

Crapp Farms filed for chapter 11 bankruptcy the next month, with a total debt of $36 million.

After filing for bankruptcy, the last of Crapp’s land, a 197-acre patch that was homesteaded by his ancestors in the 1860s, will be auctioned off in the near future.

And after all that, Crapp may still need to declare Chapter 12 bankruptcy, a personal bankruptcy provision available to farmers and fishermen, to wipe his remaining debts.

“We haven’t won very many battles,” said Mr. Crapp. “The bank pretty much owns us.”

Unfortunately for American farmers hoping to reclaim the market share they’ve lost during the trade war with China, even if Trump can strike a trade deal with the Chinese that mandates purchases of US agricultural products – which the Chinese have already pledged to do – there’s still another wrinkle: Japan recently signed a revamped version of the TPP that will offer preferential treatment to Australia, New Zealand and other rivals to American farmers, potentially sealing off another market from US agricultural products.

Source: ZeroHedge

Wells Fargo Experiences 2nd Major Systems Outage In Six Days: Websites, apps, ATMs offline

Wells Fargo is experiencing a system outage that is disrupting access to the firm’s website, mobile apps, ATMs and debit and credit cards.

Wells Fargo customers took to Twitter Thursday morning to report their frustration about their transactions being declined and being unable to withdraw money from their accounts or check their balances online.

The Wells Fargo Advisors website appears to still be up and running. However, investors are unable to check their brokerage accounts via the Wells Fargo mobile app.

InvestmentNews reached out to Wells Fargo to ask whether advisers’ internal systems are similarly impacted and what is causing the system outage.

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“Wells Fargo Advisors is aware of the issue and technical teams are working to resolve the issue as quickly as possible,” spokeswoman Jackie Knolhoff wrote in an email.

At 9:06 a.m. EST, Wells Fargo tweeted an apology to customers. An hour later, the company followed with a tweet saying, “We’re experiencing a systems issue that is causing intermittent outages, and we’re working to restore services as soon as possible. We apologize for the inconvenience.”

TradePMR, a custodian that recently partnered with Wells Fargo on its growing RIA channel, said connectivity to First Clearing, Wells Fargo’s subsidiary for RIA services, is not affected.

“Advisers using TradePMR’s technology have not experienced any service issues,” said Robb Baldwin, founder and CEO of TradePMR, adding that his platform is completely separate from Wells Fargo Advisor technology. “It is business as usual for our advisers.”

Regional news outlet KULR 8 reported that the outage could be tied to a fire at a Wells Fargo server farm in Shoreview, Minn. The Shoreview fire department later clarified on Twitter that the server farm’s fire suppression system was triggered by dust from construction. It is unclear whether or not this is responsible for the entire system outage.

This is the second time in a week the firm experienced a digital disruption. A similar disruption occurred last Friday.

InvestmentNews will update this article as the story progresses.

Source: by Ryan W. Neal | Investment News