The First Great Depression: Blow By Blow, From The BIS, And How It Mirrors Our Ongoing Second Great Depression 

Submitted by Tyler Durden on 06/14/2011 17:00 -0400
After surviving the start of the Second Great Depression, and living in its first great bear market bounce/short squeeze, where now all the attention is focused on a collapsing Europe, many could be wondering how, if at all, it would have been different to have lived through the first Great Depression. Luckily, courtesy of the recent release of the BIS's full annual reports, history buffs can now replay, year by year, the events in world capital markets from 1931 onward. We have put particular emphasis on the dark days of the 1930s. Below we present the first several such years as seen from the perspective of the BIS. Note the endless similarities - in fact one could say the only difference between then and now is the lack of "liquidity providing" algos (soon, there will be an iPad app for that) to front run slow and stupid retail/pension/mutual fund money. Pay particular attention to the role of gold in the crisis period, the amusing reference to FDR's confiscation of gold in 1933, and how the mood of insecured optimism shifts to one of endless gloom, and ends, as everyone knows, with World War 2.

Bill Gross Warns QE3 Is Coming In The Form Of "Operation Twist" For The 2 Year 

Submitted by Tyler Durden on 06/14/2011 15:08 -0400

Bill Gross released a very troubling tweet earlier:

Why is it odd? Because as David Rosenberg predicted two weeks ago when he expected that Operation Twist could be coming back with the Fed "capping" the 10 Year, Bill Gross, who has Larry "Fed Expert Network" Meyer in his ear and thus knows better than most what is coming, is predicting some "Twisting" though not at the 10 Year mark, but at the very short end. This is very disturbing. Because as we suggested at the end of May, QE3 will in reality be Operation Twist 2...

Japanese "Consumers" Scramble To Spend... And Buy Cash Safes In Which To Hide Trillions In Cash 

Submitted by Tyler Durden on 06/14/2011 14:22 -0400

Japan's attempt to restimulate the economy through consumer spending (something that has so far failed in the US and everywhere else courtesy of a third consecutive year of global household sector deleveraging) appears to be going horribly wrong. Exhibit A: "Japanese safe maker Eiko Co. says sales jumped more than 40 percent after the March earthquake and tsunami, a sign that consumers will hoard more cash at home and restrain an economic rebound...“The television footage of the tsunami destroying everything in its path must have served as a warning for cash- rich people,” said Tsutomu Ishii, head of sales for the Tokyo- based company. “They have cash at home and they don’t want to leave it without any protection anymore."" If economic recovery is based on spending for cash hoarding devices that the BOJ has done an amazing job. Alas, we are fairly confident not even Keynes has a footnote in any of his theories suggesting that consumers buying up safes, mattresses, socks or other cash storage devices is in any way stimulative of GDP. Alas, the bottom line (and as we have been claiming since the beginning of May) is that the BOJ will have no choice but to step in yet again to take the place of Japan's consumers who are not only disenchanted with stock returns, but now have to worry about natural disasters. "Households aren’t ready to help the economy by spending" said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo.

The Fed Failed... But We've Yet to See Its ULTIMATE Failure

Posted by: Phoenix Capital Research

Post date: 06/14/2011 - 14:55

For the Fed the failure to address any of the underlying causes of the Financial Crisis has been a great success story. After all, all it had to do was pump the financial system full of more money (increasing the amount of leverage) and push for the suspension of accounting standards (so the crap debt is still there, but no longer is visible).

 

 

It's F.U.B.A.R

Eric De Groot 

A generation of Americans, long removed from the event, will view America's Great Recession as the Greater Great Depression. The true visionaries will have correctly called F.U.B.A.R long before its mainst...

 

 

 

 

Guest Post: What Are The Social Implications Of Economic Collapse? 

Submitted by Tyler Durden on 06/14/2011 13:29 -0400

For the last few days, we’ve been having an important discussion about the magnitude of the economic challenges in the west; if you didn’t read yesterday’s letter, I really encourage you to do so before proceeding because it’s important to understand why the west has truly passed the point of no return. Simply put, the United States and much of Europe are borrowing an extraordinary amount of money now just to pay interest on the money they’ve already borrowed. They cannot even self-fund their mandatory entitlement programs without going into the hole, and their options are limited.

 

 

 

 

Ridiculous Intraday EUR Rally Reverses As Luxembourg Finance Minister Says Greek Aid May Be Delayed Until July 

Submitted by Tyler Durden on 06/14/2011 16:33 -0400

All aboard the we'll make it up as we go along Titanic:

• AGREEMENT ON NEW GREEK AID MAY BE DELAYED TO JULY, FRIEDEN SAYS
• FRIEDEN SAYS CONDITIONS HAVE TO BE RESPECTED IN GREECE
• FRIEDEN SAYS NEED TO ENSURE NO CONTAGION EFFECT
• FRIEDEN SAYS SEVERAL GREEK OPTIONS STILL HAVE TO BE STUDIED
• FRIEDEN SAYS GREEK DEFAULT WOULD HAVE GREAT CONSEQUENCES
• FRIEDEN SAYS GREEK DEFAULT WOULD AFFECT `ALL OUR BANKS'
• FRIEDEN SAYS PRIVATE SECTOR INVOLVEMENT FOR GREECE `LIKELY'

Greek Ruling Party Members Rebel: Another MP To Vote Against Bailout So "He Can Safely Walk The Streets" 

Submitted by Tyler Durden on 06/14/2011 16:15 -0400

Earlier today, we reported about Kozani Alekos Athanasiadis, a member of parliament for the Greek ruling PASOK party, who  in a radio interview said that he would vote against the medium-term program. Next up is Giorgos Lianis who has just tendered his resignation as a member of Pasok's central committee, but is keeping his parliament seat and will continue to serve as an independent, leaving the ruling Pasok party with 155 MPs. Athens News reports: "Commenting on the public anger over the austerity measures on the Alter television channel late last year, Lianis had declared his intention to leave politics in order to be able to safely "walk the streets." It is uncler what the state of the other 155 or so PASOK members will be when walking the streets should they indeed proceed to go ahead and vote on the medium-term fiscal program, whose discussions begin tomorrow and which is expected to see a vote on June 28. Elsewhere both the Communist Party of Greece (KKE) and Radical Left Coalition (Syriza) announced that they will refrain from all Parliamentary procedures that concern the Mid-Term Fiscal Strategy, including participation in the competent committee and the Parliamentary plenary session. A statement issued underlined that "the anti-popular monstrosity is condemned and voted down because it serves the interests of plutocracy and levels off the rights of the workers and the people."

Watch Bernanke's Speech At The Committee For A Responsible Federal Budget [No, Really] Live 

Submitted by Tyler Durden on 06/14/2011 14:30 -0400

We know our readers are excited to watch a speech headlining the Chairsatan and moderated by Steve Liesman. Which is precisely what will happen at 2:30pm at the Committee for a Responsible Federal Budget ("bipartisan group of budget experts concerned about this nation's fiscal future."). You can watch the webcast live below. The full chairsatanic speech can be found here.

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