We The Sheeplez- The Coming Economic Collapse.."A Nation Of Sheep Ruled By Wolves" Thomas Jefferson

Sunday, September 18, 2011

European Sovereign Debt - Can't We All Just 'Net' Along?

It is seemingly clearer and clearer that with the current structure and membership, the Euro does not work. The market seems to be driving the change in the direction of membership changes (via restructurings and temporary devaluations - e.g. GRE CDS and W.I. Drachma) while the euro-zone-'management' seem prone to structural changes (i.e. EFSF umbrella, Euro-bonds, and fiscal union). While the cost of either approach is likely extremely high, some research from early Summer by ESCP Europe suggests a non-trivial approach that reduces aggregate debt for the European sovereign complex by almost 64% is possible. The solution:- bi- & tri-lateral netting, and free-trading.
The bottom line for us that while breaking up the Euro will be extremely expensive and potentially dramatically destabilizing from more than a simple market-perspective (as monetary-union disruptions have historically tended to end in civil hostility), this study provides a simple way to see how a fiscally-joined and central Treasury-based system 'could' come out stronger. However, the path to that 'potential' strength will be littered with the bodies of financial and non-financial equity holders, senior- & sub-debtholders, CDS traders, and FX jockeys thanks to risk-free rate re-adjustments, subordination, ringfencings, forced recapitalizations, and implicit austerity.

The UBShank Redemption Update: No EURCHF Was Harmed In The Scapegoating Of UBS' $2.3 Billion Loss On A 31 Year Old Trader

For those wondering just how UBS is planning on scapegoating its horrible quarterly loss on one, single, solitary trader, here is the update, and contrary to rumors and speculation, no EURCHF trades were harmed in the creation of this farce. To wit: "The loss resulted from unauthorized speculative trading in various S&P 500, DAX, and EuroStoxx index futures over the last three months. The positions taken were within the normal business flow of a large global equity trading house as part of a properly hedged portfolio. However, the true magnitude of the risk exposure was distorted because the positions had been offset in our systems with fictitious, forward-settling, cash ETF positions, allegedly executed by the trader. These fictitious trades concealed the fact that the index futures trades violated UBS's risk limits." Basically this is nothing but Kerviel 102, only this time with the added benefit of it being a non-recurring item to pretend that UBS will actually have had a profit instead of a loss in the quarter. We wonder just what the deposit account "offset" in an offshore Cayman account for Kabuki Owed Lo (obviously an anagram of the beneficiary) will be when he gets out of prison in 18-24 months?

Paul holds hearing on legalizing competition in currencies

Poverty In America: A Special Report

Posted by: ilene

Post date: 09/18/2011 - 02:32

Let's take a closer look at poverty in America....

Headline Fear Hides Gold's Bullish Money Flows

Eric De Groot at Eric De Groot - 1 hour ago

Connected interests (commercial traders) have not only covered their short position but also increased their long positions dramatically since early August. Commercial traders' longs positions as a percentage of open interest has increases from 29.8% to 35.2% over the past six weeks. This trend and reading, second highest of 2011, set a bullish tone for gold despite growing fears induced by the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Asset Allocation: Real Estate, Gold, Stocks & Cash

Admin at Marc Faber Blog - 3 hours ago

I have 25 per cent in real estate and real estate-related equities here in Asia, 25 per cent in gold, 25 per cent in stocks and 25 per cent in cash. - *in Business Standard* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

Solyndra Solar Failed By Poor Cost Structure, Not China

Posted by : EconMatters

Post date: 09/18/2011 - 03:26

The U.S. government simply made a bad 'speculative' investment decision on behalf of the American public, based on questionable due diligence process and circumstances, but China has nothing to do...

Nelson Hultberg on the Debut of SPOiLER, His New Political Party and How Ron Paul Could Win the Presidency

Sunday, September 18, 2011 – with Anthony Wile

Nelson Hultberg The Daily Bell is pleased to present an exclusive interview with Nelson Hultberg (left).
Introduction: Nelson Hultberg is a freelance writer in Dallas, Texas and the Executive Director of Americans for a Free Republic. His articles have appeared in such publications as The Dallas Morning News, the San Antonio Express-News, The American Conservative, Insight, The Freeman, and Liberty, as well as numerous Internet sites. He is the author of Why We Must Abolish The Income Tax And The IRS (1997) and has just written a new book titled, The Conservative Revolution: Why We Must Form a Third Political Party to Win It. In addition, he has a major work on political philosophy, The Golden Mean: The Case for Libertarian Politics and Conservative Values, that is to be released in this coming year.
A brief synopsis:
Daily Bell: Why isn't the Libertarian party doing better?
Nelson Hultberg: Because it marginalizes itself. It does this because it attempts to instantly implement an ideal vision of how society should be constructed through the political process. Libertarians ignore the fact that politics is a game of incrementalism, that it is not an arena in which an "ideal society" can suddenly be voted into place. Because they try to do this, they are perceived by the public as not living in the real world.
For example, whenever they are asked what tax policy they advocate for the country, Libertarian Party members reply that the income tax should be totally abolished and government should be stripped down to a minimal state funded solely by tariffs. Now this is a wonderful "ideal" that could perhaps be achieved in 70-80 years. But it's not a credible political platform to be gained through a political campaign today. Libertarian Party members are blind to the damage this does to their image in the minds of the voters. As a result, they are marginalized as utopian. They end up getting at best 1% of the vote every year and remain obscure fringe voices.
Daily Bell: Does Ron Paul have a chance to win the presidency?
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