BofA Warns Upcoming "Desperate Measures" By Authorities Will Result In Another 2008 Market Collapse

Last week we had Citigroup warning that the market bottom is about to fall out, as the Fed is more than likely to disappoint already very lofty expectations (according to various estimates from both Goldman and the second Tier banks, i.e., all of them, the market has priced in roughly $500 billion in QE3 already). Today, Bank of America, which may or may not be with us much longer, has taken this desperate alarmism several notches further, and is warning that due to the gridlock in both the fiscal ("fiscal authorities have bombarded the markets with a quadraphonic message of hopelessness") and monetary ("the Fed is out of bullets anyway") stimulative pathways, the likely outcome of anything from DC will be nothig short of a disaster. To wit: "rather than a repeat of 2010, when the Fed saved the day with QE2, we think we are moving closer to a repeat of 2008, when major policy errors devastated the economy." For once we actually agree with Bank of America: "In our view, the pressure to “do something” is now far more likely to result in more desperate or radical measures, even if it is bad policy." Does this mean that we are looking at a TARP "vote down" market reaction this Friday if indeed the chairman disappoints? We will know for sure in about 100 hours, which just may be the longest 100 hours for bulls since the start of the artificial and solely QE inspired bear market levitation in March of 2009.

 

News Blankfein Hires Prominent Defense Attorney Send GS Stock Tumbling, Gold Futures Soaring OVer $1900

For a perfect ending to a schizophrenic day we go to Reuters which has just reported that Goldman's CEO has hired high profile defense attorney Reid Weingarten. The market is not waiting to find out the details, and GS stock is tumbling. What has alos happened is that gold futures punched through $1900 for the first time ever. $2000 is the next target, and will likely be taken out within the week.





The Squid: A Federally (Tax Payer) Insured Hedge Fund Paying Fat Bonuses That Can't Trade In Volatile Markets

Posted by : Reggie Middleton

Post date: 08/22/2011 - 11:51

Some investment and trading tidbits about the Squid that somehow have miracurously escaped both the pop media and sell side Wall Street... Hmmm.... 

 

 

 

 

 

 

Guest Post: More Insights Into Mass Psychology And Canada's Real Estate Obsession

Perhaps the most defining features of an asset bubble is a marked and persistent deviation from the underlying metrics that once determined fundamental value.  We know how real estate in Canada stacks up when compared to GDP, personal disposable income (cities and provinces), rents (cities and provinces), and inflation.  It's not pretty.  As with any real estate bubble, the overvaluation is most extreme in a handful of cities.  The regional data can be seen in the highlighted links.  Certainly not all areas of the country have experienced a massive divergence from underlying fundamentals, but it is extensive enough to concern us.

Guest Post: ECB And Spain And Follow Up From This Morning

 

BAC CDS is 30 wider, and back to 360.  Its stock is getting hurt.  How long before some renewed focus is applied to the other banks here.  Every day it seems that it is news about real estate that drags down BAC.  The residential problems are at the forefront, but there are problems with the commercial market as well.  Rating agencies, burned so badly before, may be reluctant to provide such generous ratings when deals need to be re-financed.  And in a country where commercial building continued for the past 3 years, but jobs haven't reappeared, how much pricing power is really there?  The CMBX are hitting one year lows (in price terms).  Since commercial real estate problems haven't been grabbing the headlines, I suspect there is more room to go on banks. In Europe, the banks are all under renewed pressure.  This is morphing into both a sovereign debt problem and now a senior bank debt problem.  Stories of some difficulties getting overnight funding abound.  Most stories are probably just rumours, but in this environment, they are believable.





Europe – “Sorry. That is a bad address”

Posted by: Bruce Krasting

Post date: 08/22/2011 - 14:16

What is a "Bad address? The answer: 

 

 

 

 

 

Europe's Debt Crisis Won't End Until Greece Defaults 

 

 

 

Politicizing the Fed? Blame Nixon, Not Perry 

 

 

 

  Big Money and the Economic Depression (Martin W. Armstrong) 




The Case Against Rating Agencies---Guard-Dogs for the Banks 

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