Belarus Hyperinflation Update: Food Runs Out As Friendly Foreigners Take Advantage Of The "Favorable" Exchange Rate Arb

Yesterday we had the first case study of what happens in a hyperinflation, when we noted that the local central bank had just hiked interest rates from 22% to 27%. Net result for the economy? Zero. Today is case study #2 where we learn what happens to an imploding economy which happens to be surrounded by friendly neighbors who just happen to find themselves in a massive arbitrage courtesy of a currency that is losing multiples of its value on a monthly if not daily basis. Per Bloomberg: "Belarus’s supermarkets are running out of meat as Russians take advantage of a currency crisis that a devaluation and the world’s highest borrowing costs have failed to stem. “All meat has gone to Russia,” Alexander Andreyevich, an 82-year-old former tractor-plant worker, said Aug. 25 in Minsk, the capital. “My relatives near the Russian border called me a few days ago and said the shops are empty."..."Private stall owners simply go and buy meat from state- owned vendors and sell it a couple of steps away for a hefty profit,"Deputy Agriculture and Food Minister Vasily Pavlovsky told reporters in Minsk Aug. 24. The government banned individuals in June from taking basic consumer goods such as home appliances, food and gasoline out of the country. Russians, buoyed by the removal of border checkpoints July 1 as part of a customs union, have circumvented the restrictions." Funny- if the locals had preserved their purchasing power by holding their money in gold, they would not find themselves in a position where those who still have a stable fiat exchange rate (for the time being) can literally steal products from under their noses for a paltry sum as sellers scramble to converts products into some currency before it is devalued even more tomorrow.

QE3 Levitation Day 3... Brings the DJIA To Positive For The Year, In Comic Contrast With The Rest Of The World

And so it continues, as it was outlined yesterday, and the day before. There is little to add here: 50 ES points in three days on substantially below average volume (red area chart), robots gunning for VWAP, and nothing but hollow expectations for QE3 despite the clear quandary for the Fed that absent a clear deflationary threat, read a plunge in stocks, it will be very difficult for Bernanke to sell easing to the dissenting votes. The important thing: unlike every other relevant market in the world (Belarus may be a notable exception), the DJIA is now green for the year. In the meantime bonds continue to ignore the whole move in stocks. Of course, if this is just a career protection rally for the end of the month, the reconnection of stocks with gravity tomorrow will be painful. Alternatively, gravity will be even more painful if the Fed does end up disappointing on September 21, which it may have no choice but to do if stocks price all of it in by then.

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Greek Bailout #3 Coming? Barroso Working On "New Greek Program"

Well the second Greek bailout lasted all of... 5 weeks. Time for Bailout #3?

• EC PRESIDENT BARROSO SAYS WORKING ON NEW GREEK PROGRAM
• BARROSO SAYS EC REVIEWING WITH ECB AND IMF GREEK FIN. ASSIST

In the meantime, we learn that while two broke Greek banks just merged to create a bigger broke bank, the country's 4th largest bank admitted to resorting to the last ditch liquidity program discussed on Zero Hedge a week ago.

Gold marking time

Trader Dan at Trader Dan's Market Views - 1 hour ago

Gold has been relatively quiet after the extreme volatility of recent days, a very welcome development. You can note the declining trend in volume as evidence of the more "tranquil" trading conditions. We are currently running into overhead selling resistance near $1850 with buyers either unwilling or unable to take it through this level without some sort of fresh news. Sellers meanwhile have been thwarted in any efforts to break prices significantly lower. The present posture is one of consolidation with some buying surfacing down near the $1800 level and further below towards $178... more » 

 

 

 

 

 

Lockhart Hints At More QE: "No Policy Option Can Be Ruled Out At The Moment" And "Slow Growth Bigger Problem Than Inflation"

Yesterday it was Evans saying explicitly it was QE3 or bust. Today it is Lockhart's turn to stop just short of reiterating what is now getting prices in every single day: "As you know, the FOMC stated after its last meeting the intention to keep the policy rate at near zero for two more years. Also, the current policy is to maintain the Fed's balance sheet scale for the foreseeable future. I support this position. Given the weak data we've seen recently and considering the rising concern about chronic slow growth or worse, I don't think any policy option can be ruled out at the moment. However, it is important that monetary policy not be seen as a panacea. The kinds of structural adjustments I've been discussing today take time, and I am acutely aware that pushing beyond what monetary policy can plausibly deliver runs the risk of creating new distortions and imbalances." He is aware, yet he will gladly vote for it when the time comes. And the time will come very soon because as he just said during his speech Q&A, "slow growth is now a bigger problem than inflation"... which as we showed yesterday is 4%, and "that we have a jobs crisis." Net net: one more dove doing what he does best - beg for more inkjet cartridges.

The "Shining" Example Of Obama's $787 Billion Fiscal Stimulus Act, Solar Energy Company Solyndra, Files For Bankruptcy

Yesterday Zero Hedge contributor Bruce Krasting had some very insightful and very prophetic words when he asked rhetorically if a "Government investment disaster in the works??" The company in question is (now former) massively subsidized solar energy company Solyndra. Solyndra filed for bankruptcy less than 24 hours after Bruce proposed that the company is nothing but a stimulus black hole. We congratulate him on his investigative efforts. Alas, being private, there was no way to short it and capitalize on this investigative coup de grace. And while there are no winners, there are plenty of losers? Who - why US taxpayers of course. Why? Because as some may recall, Solyndra is one of the "shining examples" of Obama's $787 billion American Recovery and Reinvestment Act. After all none other than president Obama said that Solyndra is "leading the way toward a brighter and more prosperous future.” He also cited it as a success story from the government’s $787 billion economic stimulus package." Alas Solyndra has now become a less than shining example of the complete catastrophe this latest exercise in pointless Keynesianism has been, all on the backs of US taxpayers. But don't worry, Obama is about to bring us a fresh new such fiscal stimulus catastrohpe any minute. This time it will be different.

Greece Itself Now Openly Ridicules Europe's Lies Of Greek "Stability"

Compare these two statements: first from Reuters- "Greece's debt has run out of control and government policies are failing to restore finances, an independent parliamentary committee of experts wrote in a report released on Wednesday." And second, from Bloomberg: "Greece’s debt is on a “durable declining path” and new projections will show that the second rescue program reduces net  liabilities, European Union Economic and Monetary Commissioner Olli Rehn said." Sorry Europe: your credibility, whatever was left of it, just ran out. When the indirect object of your bail out effort (the direct one being naturally your central bank and your various local banking oligarchy of course) says in your face that you are full of excrement, it is time to put a fork in it.

Remember The 15 Sigma Surge In Greek Financial Stocks This Week? Here Is An Update

Submitted by Tyler Durden on 08/31/2011 - 15:52
Remember the 15 sigma move (yes, the move was 15 standard deviations) in Greek financial stocks on the failed attempt by the country to create its very own TBTBF bank with some Petrodollar support? Here is a quick update of how that ended up.







China and Copper

Posted by: Michael Victory

Post date: 08/31/2011 - 12:57

Buying the dip. 

 

 

 

 

 

Slave Nation - Nature or Nurture?

Posted by : Cognitive Dissonance

Post date: 08/31/2011 - 14:20

What exactly do we have left after several decades of frenzied spending and mindless consumption? I’ll tell you what we have left. We have our rituals and dogma, and soon enough not much more.