ECB Getting Angry That People Can See Right Through Central Bank Lies

Today's hilarious commentary comes from the ECB's own Jurgen Stark, whose blood pressure has obviously peaked and at this point it is just a matter of the realization that ECB (and other Central bank lies) no longer work filtering through to reality.

• ECB'S STARK SAY NOT CENTRAL BANK'S JOB TO FUND DEFICITS (but, but, MMT says debt, and hence central bank monetization thereof, does not fund deficits. Heck, MMT says monetization does not exist...hmm)
  
• ECB'S STARK: UNRESPONSIBLE TO CALL ECB A `BAD BANK' (right: the correct word is "overdue")
  
• ECB'S STARK: ECB HASN'T TAKE ON AS BIG RISKS AS OTHER CEN BANKS (right: the risk the ECB has taken does not even fit on the same axis compared to other banks)
  
• ECB'S STARK SAYS NOT CENTRAL BANK JOB TO LOWER RATES FOR DEBT
• ECB'S STARK SAYS ECB BOND BUYS DON'T CREATE INFLATION RISKS
• ECB'S STARK: BANKS USING PSI HAVE FULL GUARANTEE OF NO LOSS

And the kicker

• ECB'S STARK: ALL DEVELOPED ECONOMIES HAVE PUB FINANCE PROBLEMS- said otherwise, it's everyone else's fault 

An Example Of HFT "Liquidity": $10 Bid Ask Spread On A $14 Stock

There are daily lies by the HFT defenders that all little innocuous HFT does is provide substantial liquidity for capital markets. Then there is reality. Courtesy of this latest catch by Nanex, we have now witnessed a $10 bid/ask spread (!) on a $14 stock. And with that we can cross out the assumption that HFT is i) beneficial for stocks and ii) tightens bid/ask spreads.

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Guest Macro Commentary: Is Germany Playing Chicken With Ben Bernanke?

Note to the future participants of Bretton Woods III – fiat currencies can only be floated with extremely tight and transparent banking laws, nothing like what we have today and this includes central banks. And if you decide to go down the gold standard path, same thing applies, transparency and low leverage are keys to long-term stability. Banks should operate like utilities with tremendous amounts of transparency, low levels of leverage and huge limitations on market size; read: granularity. How we are stumbling around today with the same banks that almost crashed in 2008 with even greater market shares and low-visibility accounting is beyond my understanding. Read the quote above to understand why the status quo is so eager to defeat anything that would reign in these black holes. It was as true then as it is today.

Guest Post: So Where In The World Is Safe?

The funny thing about the boiling frog is that every day, the pot gets a little bit warmer. First they start by fondling 5-year old girls at the airports, then it’s train stations. Train stations become bus stations, bus stations become shopping malls, etc. This erosion of civil liberty and economic opportunity is a slippery slope, and only YOU know your breaking point. Having a plan ensures that, when you reach your breaking point and/or social upheaval hits, you’ll at least know exactly where to go and what to do when you get there. This is not a decision you’ll want to make while packing your suitcase.

European Banks Now At Or Below Short Selling Ban Levels

When we first commented on our expectations about the "efficacy" of the short selling ban instituted last Thursday, we said: "There are those who say the upcoming short selling ban in all stocks in Italy and France, which according to CNBC will take place as soon as after the close today, or in one hour, will be beneficial to stocks. Then there are facts." And the facts are that one short week after the ban, European banks are already unchanged compared to the day of the ban and in France they are now negative! What next: selling is illegal or "Speculation" is a felony? We expect to find out soon...

Here Is Who Is Getting Creamed On Today's Hewlett Packard Bloodbath... And Why It Just Is Not Paulson's Year

A quick look at the top 40 holders of HPQ stock, which has tumbled 20% today (as ZH predicted yesterday), shows that i) it will be a very unpleasant weekend for a lot of people but ii) none more so than Paulson & Co, which was already down 33% or something YTD in Advantage Plus and which is eating another $141 million loss today alone. If there was any doubt that the once legendary hedge fund has become the punching bag of 2011, this should eliminate it all. Which is not to say we feel bad for JP: with billions in his checking account, we doubt he will lose much sleep over what is increasingly appearing like an inevitable unwind of the fund. We do feel bad however for holders of paper gold, as the day of the gold share class unwind draws nearer by the day. And with 31.5 million GLD shares for a total of $5.5 billion, the unwind will be, for lack of a better word, epic. The only question is when.

Interactive Brokers Warns Gold Margin Hike Imminent, CME Next?

The first shot was just fired in today's battle with daily record gold prices. IB always tends to be a few minutes ahead of the CME. And following last week's 22% margin hike in gold, we are confident the CME will do everything in its power to pull a "silver" on gold. Are we about to experience a barrage of margin hikes in gold? Stay tuned and find out.

Complete Cap Structure And Org Chart Breakdown Of Top 50 Leveraged Credits

And now for something different. For all our fixed income/credit-focused readers we have two things to say. The first: if you were in High Yield in the past month, our condolences. The second is: if you survived the past month, here is the definitive breakdown of the 50 largest credits in the US with the all important and often times oh so expensive capital structure diagrams. So next time your PM asks you which HoldCo is the parent od what OpCo debt, there will be no excuses.

The Spread Between "Schrodinger's Goose" - Merrill, And Bank Of America Soars To 2009 Highs

Following the recent surge in blue light special asset dispositions courtesy of Bank of America's precarious liquidity conditions, many have speculated that the bank will be forced to sell none other than Schrodinger's Goose: Merrill Lynch, which is at the same time both dead (pre bailout) and golden (due to some legacy reputation it has as a fabled Wall Street firm, now mostly based on intangible value). Nowhere else is this more evident than in the CDS spread between the two entities. After trading at close to convergence for about a year, the CDS levels between the two entities have seen a dramatic dispersion in recent days, soaring to over 50 bps (BAC CDS at 340, ML at 394). This is the widest the spread has been since early 2009 when the world was ending and everyone was buying whatever CDS they could get their hands on. The only comparable widening was in May 2010 when Europe blew up for the first time. So what should one do here? A divergence trade would mean that BAC is going to deteriorate so much it will have no choice but to dump Merrill, an outcome which will likely see both spreads blow out to 2008 wides, only to be followed by the need to nationalize CFC which will likely mean a collapse in Countrywide Home Loans spread (as we hypothesized two weeks ago). As if that was not confusing enough, the likely future of standalone BAC CDS post this event will likely be a tightening as the bank spins off its most toxic division, but then widens as the realization that America's biggest depository is no longer TBTF and spin offs are imminent. That... or the divergence collapses as the BAC blow out continues while investors speculate that upon its sale Merrill will have less risk than its old parent. In either case, keep an eye on this spread as it could be the canary in the coalmine for what BAC management plans to do w/r/t the Schrodinger Goose, CFC, and overall future business as a going concern expectations.

Bank of America's Dead Drop To Rick Perry: "We Will Help You Out"

Should we be surprised, frightened, disgusted or simply say "we knew it", that in the informal mixer just after Texas Governor and Republican presidential candidate Rick Perry spoke at a Politics and Eggs breakfast in Bedford, New Hampshire, an unknown gentlemen approaches a casual Perry like an Ian Flemming character, and proceeds to dead drop the following: "Bank of America... We will help you out"... and silently moves on. At least we know now who is funding what, and whose interests potential future president Perry will be paid to defend.