Eurocalypse Cometh! Principal Haircuts, Serial Bailouts, ECB Insolvent! Disruptive Sound Of Dominoes In Background Going “Click, Clack”! Fundamental Investing Is Back!

Posted by: Reggie Middleton

Post date: 06/10/2011 - 11:00

The near 100% equity run up at the height of the correction was easily seen by my and my staff, but I severely underestimated the breadth and depth of this synthetically contrived, central bank centrally planned, bear market rally (which is essentially what has been called a "recovery" of late). 

 

 

 

 

Real metal will beat paper at banks, Eric Sprott tells King World News

 

 

 

 

Is Greece Preparing To Give Europe The Finger? 

Submitted by Tyler Durden on 06/10/2011 11:58 -0400

From Greek website Capital: "George Papandreou said that reforms on the political system or the public administration need the voting of Greek people through referendums. Furthermore, he stated that “the road will be difficult but we must endure the pain”, adding that he is determined to proceed with all the necessary changes to make the country’s debt sustainable." 

 

 

 

 

According To The Fed, In Q1 US "Households" Sold $1.1 Trillion Annualized In Treasurys To The Federal Reserve 

Submitted by Tyler Durden on 06/10/2011 11:35 -0400

Either we have just gotten yet another confirmation of just how worthless the Flow of Funds "household" plug category is, or there is something very, very wrong with conventional wisdom. According to a detailed breakdown of the Z.1 from Goldman Sachs the biggest seller of US Treasurys to the Fed in Q1, at an annualized rate of $1.1 trillion, were... US Households. We have to wonder how this news makes even remote sense when confronted with the ongoing dumping of stocks by retail investors. On the other hand, if indeed the Fed is correct then the entire paradigm of retail jumping into the safety of US paper may have to be reevaluated. And not only that, but if this activity has continued into Q2, it may present even greater risks for the Fed's unwind of QE2: should households persist in their Treasury dispositions with only dealers left to pick up the pieces, Gross' thesis may be proven right much faster than we expected, Fed Treasury puts notwithstanding.

Guest Post: The Bankruptcy Of Corporate America 

Submitted by Tyler Durden on 06/10/2011 12:26 -0400

Corporate America is profoundly bankrupt. Not in a financial sense, of course; the Federal Reserve's slow destruction of the U.S. dollar has boosted corporate profits most handsomely as the majority of their earnings and profits are obtained overseas; when stated in dollars, those outsized profits swell even higher. No, the bankruptcy of Corporate America is not found on the bottom line; it is measured by altogether more profound metrics than mere money. Corporate America is bankrupt on levels which are difficult to describe; morally and spiritually bankrupt, not just in the pathologies that guide corporate goals and behaviors, but in the Potemkin shell of free enterprise they present to the world in ceaseless propaganda, and in the manner in which they have cut America loose from their corporate souls. Corporate America only resides in America because it controls the machinery of governance and regulation here for pathetically modest investments in lobbying and campaign contributions. It would be impossible to replace the global Empire that protects and nurtures it, and so Corporate America maintains its headquarters in America, the better to shape policy and skim gargantuan profits from the Empire and its Central State in Washington. The return on investment for lobbying and campaign contributions is simply unmatchable anywhere else; it is without doubt the highest return on investment on the planet. And the risk-return is immensely favorable; there is simply no risk that the Empire or the Central State will ever go against the "best interests" of its corporate partners. 

 

 

 

 

Meet The Squatters: Here Are The Millions Of Americans Who Live Mortgage-Free For Up To 5 Years And Counting 

Submitted by Tyler Durden on 06/10/2011 13:14 -0400

The topic of Americans living mortgage-free in foreclosed homes on which banks do not have proper titles is nothing new - in fact we are surprised that there isn't a robosignature app for that...yet. Neither is the fact that this ongoing reverse capital transfer provides as much as $50 billion in "rental" income for those same squatters. And while the ethical arguments for strategically defaulting on one's mortgage can get very heated on both sides, one thing is certain: the ongoing foreclosure crisis is creating a new subclass of "entitled" people, who certainly enjoy living on the back of the banks, while not paying one cent, and not vacating the premises. According to a new article by CNNMoney, some of the excesses observed within this latest demonstration of unearned entitlement are truly staggering. To wit: "Charles and Jill Segal have not made a mortgage payment in nearly five years -- but they continue to live in their five-bedroom West Palm Beach, Fla. home....Lynn, from St. Petersburg, Fla., has been living without paying for three years....In Thousand Oaks, Calif., an actor has missed 30 payments, and still, he has not lost his home...." In other words, what were once isolated incidents are becoming an epidemic, and like it or not, are creating a massive capital shortfall in bank balance sheets (after all "assets" are supposed to generate cash in most cases), which will likely involve yet another broad taxpayer bailout of these same banks that now have no recourse to do much if anything to evict these same squatters who instead of paying their mortgage (or rent), prefer to purchase trinkets and gizmos. "Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years."