Berlin Conference 2.0: Russia To Bail Out Hyperinflationary Belarus As Colonization Scramble Heats Up

Submitted by Tyler Durden on 06/04/2011 13:01 -0400

Who said that only Germany is allowed to annex Greece (and soon Ireland and Portugal)? (and if Der Spiegel has anything to say about it, again, Bailout #2 is far from certain... more on that shortly). In a surprising move, Russia has decided to remind everyone just how irrelevant the IMF is now that Russia and China run the "sovereign rescue" show, and that it too can play the imperialist game just as well as the Troica. Following the recent hyperdevaluation of the Belarus Ruble as discussed on Zero Hedge, and the country's collapse into a hyperinflationary hell, Reuters has just reported that Putin, that "White Knight" of former USSR imperialist dominance, has decided to "bailout" Belarus. From Reuters: "Cash-strapped Belarus will receive a three-year $3 billion loan from a Russia-led regional bailout fund as it seeks to stabilize its economy, Prime Minister Vladimir Putin's spokesman Dmitry Peskov said on Saturday. The former Soviet republic on Friday unveiled a series of measures to end the crisis, including a vow to cut its budget deficit in half, after its currency lost 36 percent of its value in May and inflation reached 20.2 percent." It is unclear just how many billions in funds will need to be derived from forced "privatization" of Belarus assets for the benefit of the old KGB guard, or what the interest rate on the rescue loans will be. What is more than clear is that as more and more countries fall into the toxic debt spiral, their neighbors who actually have capital and/or natural resources (ergo the irrelevance of the IMF), will "bail them out" only to remind the world that colonization is what it has always been truly about. Berlin Conference ver 2.0 -  here we come.

Spiegel Reports Greek Bailout #2 To Surpass €100 Billion

Submitted by Tyler Durden on 06/04/2011 13:45 -0400

It's the weekend, which means another Spiegel hit piece over the solvency and stability of the Eurozone is overdue. Sure enough, the publication comes through admirably with "New Greek aid to cost more than one hundred billion euros." As a reminder, until as recently as 24 hours ago it was expected that the bailout would be at most €80 billion, with half coming from Greek privatization efforts. Naturally, this means that even more money will be transferred from taxpayer pockets to bank capital deficiency accounts. Next up: Greek bailouts 3, 4, 5, by which point Goldman will have hopefully achieved its life long ambition of opening a Goldman Sachs-branded ATM at the main entrance to the Acropolis, which GS will have LBOed using discount window capital.

Weekly Chartology, Or What To Do When You Are Dead Wrong And Every Economic Release Disappoints Relative To Consensus

Submitted by Tyler Durden on 06/04/2011 10:59 -0400

Goldman's David Kostin is out with his latest chartpack which is as always chock full of pretty pictures, and the usual set of Monday morning quarterbacked recommendations. Just as it was Zero Hedge who first called Goldman's BS out in December of 2010 on their economic "fundamental shift" resurgence call, so it was ZH again first who suggested the QE Unwind compression trade, "Utilities and Consumer Staples as the long led in a compression trade, while shorting Industrials and Consumer Discretionary." Sure enough here comes Goldman observing "The rotation away from Cyclicals (Financials, Industrials, Materials) and into Defensive sectors (Health Care, Utilities, Consumer Staples, Telecom) continues to follow closely the historical trading pattern typically exhibited when the ISM index is declining from a peak back to 50" following a week in which  "every US economic data release disappointed relative to consensus expectations. ISM manufacturing index (53.5 actual vs. median consensus expectation of 57.1), consumer confidence (60.8 vs. 66.6), nonfarm payrolls (54,000 vs. 165,000), and unemployment rate (9.1% vs. 8.9%) all posted negative surprises and pushed the cumulative 22-day rolling US MAP (macro data assessment) score to its lowest level since  the beginning of our data in 2001. Domestic vehicle sales (9.2 million vs. 9.7) and home prices as measured by S&P/Case-Shiller index also disappointed." Perhaps it is time to launch the REDI Zero soft dollar machine: if Goldman makes billions and is dead wrong all the time, we would be trillioniares...So naturally, here's Goldman, pitching the high "Sharpe Ratio" basket, or back to defensives. Of course, anyone who listened to use almost three weeks ago already has this on.

HFT Stock Manipulation Caught On Tape

Submitted by Tyler Durden on 06/04/2011 11:54 -0400

It doesn't get any more blatant than this. Once again, courtesy of Nanex we present to our incompetent regulators prima facie evidence of what is outright tape painting via what is an apparent HFT algo trying either to front run an order, to test for the presence of other predatory algos, and in general to take advantage of Reg NMS only protecting displayed liquidity over non-displayed (a topic we discussed two years ago). In the example below, which shows unique trades in the stock of XEL.PR.G, in the span of 30 seconds, 430 shares are bought up on the way up from $90.5 to $102.25, and then sold off once again in another 10 seconds, hitting all bids as soon as they appeared. Now this is not some HFT-darling which trades millions of shares per day (and sees blasts of tens of millions of quote stuffing packets in hours) and thus will likely be ignored by the general population... until it does hit some stock that people do care about. Naturally the implication is that, as Nanex points out, if all stocks traded/quoted at this frequency, even the the SEC could figure this out in a few weeks, after assembling a multi-discipilanary team of course. Is it any wonder that virtually nobody trades on open exchanges anymore (yes, most trading, or what's left of it has shifted to Sigma X and other dark pools) where the only survival tactic for such legacy monsters as the NYSE and Nasdaq is to laterally buy up as many of their peers as they can now that organic growth no longer exists: gotta love a world in which there are 83 different ATS venues, all of which permit some permutation of millions of stock manipulation strategies.

For your weekend reading pleasure...

Guest Post: On The Ethics Of Mortgage Loan Default

Submitted by Tyler Durden on 06/04/2011 12:39 -0400

Is it ethical for the American homeowner whose mortgage has been securitized to default, even If they are not financially distressed? First, consider it is unlikely that marketable, fee simple, insurable title can be obtained as a result of fulfilling the obligations of the related promissory note. On the contrary the titles to some 60 million homes in America are badly clouded. Secondly, encouraging investment in an asset class that has been artificially inflated, then deliberately destroying the price of the asset, as part of a separate profit making scheme is unethical, and any agreement based on this type of fraud is grounds to consider the original debt instrument used in the agreement null and void. Fortunately these grounds are unnecessary, as increasingly US courts are ruling that these mortgages are already invalid for numerous other reasons.

The REAL Flight to Quality Trade (It Ain’t Dollars)

Posted by: Phoenix Capital Research

Post date: 06/04/2011 - 12:26

While the whole world seems to have turned against Gold in the last month, I’d like to note that this latest pullback in the precious metals’ space has given us an extraordinary opportunity to load up on premium quality inflation hedges at bargain basement prices. It’s also told us the following...

For your weekend reading pleasure...

1] Pushing for a return to the gold standard - L.A. Times

2] If India and Pakistan Come to Nuclear Blows, Blame U.S. - Bloomberg

3] U.S. wealthy exit Swiss bank accounts: study - Chicago Tribune

4] Questioned by Paul, Fed denies any interest in gold - GATA

5] Ron Paul dismisses speaker's debt cut demand - Bloomberg/GATA

6] ?Seasonal Gold Price Trends Favor Summer Purchases - USAGold

7] $8,000 gold & $400 silver - James Turk

8] The Road to Hyperinflation - James Turk

9] Libyan rebels broke despite pile of gold - AP/Yahoo

10] The counter-revolution club - Asia Times

11] The U.S. Postal Service Nears Collapse - Bloomberg/Businessweek

12] Interview with Chris Whalen - King World News

13] Interview with Jim Rickards - King World News