Game Over For The European Ponzi Scheme? Monetizing Pan-European Sophisticated Ignorance Via US Options, Part 1 

Posted by : Reggie Middleton

Post date: 08/04/2011 - 11:42

Game over, everything sold off, gold soaring... system is imploding... USSR 1989, EURO 2012, and i think we might well add US & Japan to the list as well. Volatility more valuable then nearly...

ES Drops To November 2010 Swing Levels; Next Support 1155, After That: Jackson Hole 2

For months we have been warning that the only thing that can allow QE3 to proceed is a 25% drop in the S&P. Of course, algos and their idiot Ph.D. creators would force the robots to gobble up every drop due to beyond inane mean reversion and BTFD triggers. Well, today that realization is finally dawning (as hundreds of 19 year old quants suddenly find themselves out of a job). As the chart below shows, however, the market still has a long way to go to the downside, so for all those buying here and the market will promptly soar on hopes QE3, disappointment seems guaranteed. In the meantime technicals still rule, with the ES now at November 2010 swing highs, which will likely be taken out soon, and will tumble to the December swing lows, just above 1150, after which it is rough sailing down to the 1000 level of Jackson Hole at which point the market will be begging for QE3. Of course, all this assumes that Bank of America does not blow up in the meantime, as everyone has been warning. With its CDS 18 bps wide to just under 200 bps today, unlike Ben Bernanke, we certainly can not promise that.

 

 

Margin Calls Force Start Of Gold Liquidation

As expected, the massive global rout is shifting to the best performing asset: gold, which courtesy of pervasive repo desk margin calls (which are merely trying to preserve capital for their TBTF holding companies) is seeing liquidations to satisfy collateral margin requirements. It will be interesting if the only real dip worth buying will see buyers come out of the woodwork or if gold will proceed to plunge alongside everything else.

 

 

News Just Keeps Getting Worse: Spain To Cancel August 18 Auction As Bundesbank President Says Opposes ECB Bond Buying

The newsflow just keeps getting worse. Via Dow Jones we have learned that Spain, not Italy, has decided to pull its August 18 auction and will instead launch its 5 year auction on September 1. Once again, Zero Hedge being just a little prescient with our 7 am commentary that we "look for Spain to follow Italy in a self-imposed bond market exile." And in far worse news, we now get a schism within the European banking authority itself after Bloomberg reported that the Bundesbank's Weidmann is said to be opposed the resumption of ECB bond buying, at least two bouts of which already took place earlier, most likely in Italian and Portuguese bonds. "Weidmann was not the only Governing Council member against the move, according to an official speaking on condition of anonymity because the ECB policy meeting is not public. Bundesbank spokeswoman declined to comment." The last thing that that the market needs to see now is uncertainty. That the market will see idiocy is a given, but at least keep the idiocy constant. That someone may be a voice of reason only sends shudders of terror through the spine of billions of vacuum tubes around the world which have no idea how to predict the future at this point.

 

 

 

Gunman Spotted On Virginia Tech Campus

While the central planning cartel is slowly losing all control, there is a very disturbing development at the Virginia Tech campus, site of another previous tragic development, where another gunman has been spotted. The situation is developing rapidly and here is the latest update from WSLS.com

 

ES Plummets To Fresh 2011 Low, Next Support In Middle 1100s On Global Risk Capitulation

Complete capitulation in the market, accentuated by feedback from one of our Italian PM sources, whose comment on the Italian market says enough: "UTTER PANIC - DEGROSSING ACROSS THE BOARD. DELEVERAGING. RISK MANAGERS IN CONTROL." Which is why bouncing cat dip buying may commence shortly. In the meantime, the Swiss Stock market just entered bear market territory after dropping 20% from the February high.

Liffe Next Exchange To Break, Suspends Bond, Index And Swaps Products

The collapse in the global Ponzi scheme is intensifying. Liffe down next, even as the FTSE MIB has reopened, only to plummet to 5% down for the day with Unicredit and Intesa halted yet again. We expect Italy may not reopen tomorrow.

Short-Term Yields Going Negative As BoNY Announces It Will Charge 13 bps Fee On Deposits

The stunner in this morning's newsflow (the long, long overdue market collapse which is a much needed catalyst for QE3 should not surprise anyone), comes out of the WSJ which has just reported that the Bank of New York has informed institutional clients it will begin charging a fee of 13 bps on deposits in excess of 110% of the client's monthly average. This is nothing short of outright terrorism to get everyone out of cash and into fiat-based ponzi products. Such as Short Term Bills. Indeed, as was reported earlier the 3 Month bill just hit zero. But you ain't seen nothing yet. As Credit Suisse strategist Ira Jersey reports, courtesy of Bloomberg,  "If this is true then we’re likely to see short-end interest rates actually go negative. By what degree depends on who else follows and how much money is involved." Cue unpredictable consequences of a totally broken bond market. What happens next will likely make the market dislocations following Lehman like a breezy walk in the park.







France and Germany: One more bailout away from fiscal crisis

Posted by: ilene

Post date: 08/04/2011 - 01:09

The easy way out of turning to bigger, more solvent governments for bailouts has run its course. 

Why Gold and Silver Prices Will More than Double Again Even From Current "Expensive" Levels

Posted by : smartknowledgeu

Post date: 08/04/2011 - 07:34

Those that are familiar with my writings about gold and silver for the last six years know that I have said gold was cheap at $500, $600, $700, $800, $1000 and $1,200 a troy ounce and know that I... 

S&P Touches Correction Territory, Plunges 10 Percent From Intraday High in May (click here)

Central Banks to Drive Gold to $3,000?

A "new stage" in the global currency wars may have started last night
"Expect much more intervention in the future..." 

Wall Street warns Tim Geithner: The dollar's reserve status is in serious jeopardy
"The idea of a reserve currency is that it is built on strength, not that it is the 'best among poor choices...'" 











The Federal Reserve could soon make one of the biggest mistakes in history
"We desperately need to face reality..." 

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