U.S. could run off with other nations' gold, Rickards tells CNBC

 

ES Takes Out Lows On Heavy Volume

So much for that advice from Comcast's financial comedy and wealth destruction channel earlier today that buyers are stepping in...

Meanwhile In "This Is A Gamechanger" Italy...

Fiat (F IM) and Pirelli (PC IM) shares suspended for excessive losses. That is all.

Greece Bars All Short Selling For 2 Months

And..... the idiots are back in charge.

• GREEK SECURITIES REGULATOR BANS SHORT SELLING FROM AUG 9
  
• GREEK SECURITIES REGULATOR BANS SHORT SELLING FOR 2 MONTHS

No seriously, it will work this time. We promise.
Goodbye Greek stock market. For a case study of what happens check out Vietnam.





S&P To About Commence Cutting Corporates

Those who were hoping only government and government-related entities are about to be skewered by S&P, we have some unpleasant news: according to Reuters Insider: "Announcements should be expected this morning about effects to corporations from S&P’s downgrade of U.S. credit rating, David Beers, head of S&P’s sovereign ratings." This means financials, the corporate group most at risk to the US downgrade, are about to be shellacked. And, as we pointed out previously, a 2 notch downgrade in Morgan Stanley will result in a $1.4 billion margin call. We haven't done the math on the other TBTFs but something tells us Bank of America is in the same boat (and isn't it ironic if AIG also ends up seeing a collateral spring as a result of the US downgrade). Are we about to see the first (of many) truly unexpected consequence of the US downgrade? Stay tuned.

 

 

For The First Time, Return Of Gold Surpasses Stocks Since March 2009 Lows

Behold - the S&P priced in gold. The current print is below the March 2009 low which simply means that as of today the return for gold since the March 2009 lows is now higher than stocks. Expect this line to keep going lower now that everyone realizes the Fed has no other choices than to print, print, print, further destroying the incremental value of fiat and further cementing the value of non-dilutable instruments like gold.

 

 

Western Governments Will Embark On A New Round Of Quantitative Easing To Help Spur Their Moribund Economies

Admin at Jim Rogers Blog - 23 minutes ago

They'll try to disguise it. They'll call it cupcakes or who knows what. It'll cause a big rally in raw materials and commodities because more and more people will realize they are printing money, they are debasing the currency. - in Reuters *Related Tickers: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF), (NYSE:SDS) ProShares UltraShort QQQ (ETF) (NYSE:QID), iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM), ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF), (NYSE:TLT), United States Oil Fund LP (ETF) (NYSE:USO), SPDR Gol... more » 

S&P Downgrade Bloodbath Begins

Here we go as S&P starts going down the list of all US-related issuers

• Options Clearing Cut to AA+ From AAA by S&P, Outlook Negative - there goes no counterparty risk
  
• Natl Securities Clearing Cut to AA+ from AAA by S&P, Outlook Neg - there goes no clearing risk
• DTCC Cut to AA+ from AAA by S&P, Outlook Neg - there go all your stock certificates

Many, many, many more coming, not least of all will be 7,000 muni issuers. Watch those copulas ladies and gents. And for those at various CVA desks: our condolences. You are about to have a very, very ugly day.

Boys And Girls: It's Rule 48 Time

  

Investors Have Voted In The Bond Market

Eric De Groot at Eric De Groot - 46 minutes ago

The lack of a meaningful bond market reaction suggest a big yawn rather than praise for S&P's new found resolve in taking the lead. As Armstrong writes, in the end, the real damage of the S&P downgrade is merely highlighting the Sovereign Debt Crisis. Because USA is the reserve currency, it cannot be the first to fail for the rest of the world would go with it all at one... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]






Graham Summers’ Weekly Market Forecast (Crisis Edition)

Posted by: Phoenix Capital...

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

  However, the fact remains that the market is on Red Alert mode. The financial system is more leveraged than it was during the Tech Bubble. Mutual funds are more heavily invested in stocks than...

Using Options On Leveraged ETFs To Trade the US Debt Rating Downgrade

Posted by: Reggie Middleton

Post date: 08/08/2011 - 08:05

Actionable US Debt Downgrade Research & Opinion for Monday Morning - Monetizing the Situation

Date: January 10, 2011: Source: Jim Cramer; Title: "10 Reasons To Buy Bank Of America"

Submitted by Tyler Durden on 08/08/2011 - 09:51 Everyone who may have just heard the unprecedented rant by Jim Cramer bashing Bank of America, now that it is at its multi-year lows, may be a little confused. After all it was just on January 6, 2011, when Bank of America was at its multi year highs, that he released the following "report" titled "10 Reasons to Buy Bank of America." We all enjoy the laugh, but we ask Comcast? Is this is the comedian that CNBC wishes to destroy any remaining viewership it has and commit ratings suicide?

The Bear Market Party Welcomes Germany, Europe, Which Join China In The "20% Correction" Table

Last night it was the world growth dynamo (China), now it's Europe's growth dynamo (Germany): DAX (and STOXX) both enter bear market territory (20% correction) following the Shanghai Composite. The entire world is on its way to the 25% correction we said is inevitable before QE3 is started.

Morgan Stanley Discloses $8.5 Billion In Europe Exposure, 8 Trading Day Losses, Lists Impacts Of US Downgrade On Market And Its Business

Some very interesting data points were disclosed in Morgan Stanley's just released 10Q. First, we learn that in the last quarter, the company which had "blow out" earnings, at least compared to expectations and Goldman, actually was not much to write home about by typical Wall Street standards, with a whopping 8 days of trading losses in Q2. Considering that most Wall Street firms had quarters in a row with no daily trading losses, this is, sadly, quite disappointing. Next, and more important, is that MS has disclosed it has a rather substantial $5 billion in gross exposure to the PIIGS, as well as another $3.5 billion in funding exposure to Europe. Considering that most European banks had already offloaded their PIIGS exposure, at least we now know who they were offloading risk to. Lastly, from the risk factors we read that a US downgrade will likley not be beneficial to Morgan Stanley or the stock market, to wit: "[a downgrade] could disrupt payment systems, money markets, long-term or short-term fixed income markets, foreign exchange markets, commodities markets and equity markets and adversely affect the cost and availability of funding and certain impacts, such as increased spreads in money market and other short term rates, have been experienced already as the market anticipated the downgrade. In addition, it could adversely affect our credit ratings, as well as those of our clients and/or counterparties and could require us to post additional collateral on loans collateralized by U.S. Treasury securities."

Bank of America Defaults Risk Soars To Highest Since June 2009, Jumps By 10% Overnight

Last week, when discussing the ongoing collapse in the house of cards that Ken Lewis built and which Brian Moynihan is helping bring down, we asked readers if they "Got Bank Of America CDS?" both in general, and in the aftermath of the disclosure that "New York AG Says BAC's $8.5 Billion Settlement Is "Unfair and Misleading"." We hope the answer was yes for most, as BAC CDS just jumped to the highest since June 2009, hitting 235 bps after exploding by almost 10% overnight. And with the stock now trading with a $7 handle, we are very much concerned TARP 2 is coming soon, only this time BAC will be formally split up, for no other reason than to spin Countrywide off and most  likely see it end up with Fed funding. Wherein lies the rub: what will end up happening when BAC loses its TBTF status is that CDS referencing CFC will grind tighter to a spread pari with the US, while those referencing BAC (and/or MER) will initially tighten only to surge on the realization that BAC will have lost its government backstopped status (courtesy of the "conservatorship" of its most atrocious division).

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