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

Sunday, October 2, 2011

Meltdown Part 3: "Paying The Price"

We continue the Meltdown series by presenting part three out of four: Paying the Price, which looks at how the victims of the 2008 financial crash fight back. A protesting singer in Iceland brings down the government; in France a union leader oversees the kidnapping of his bosses; and thousands of families are made homeless in California.

Credit Dislocated, Again

We have discussed the dynamics of the credit-equity-vol relationship for many months in the hope that it broadens investment horizons and opens traders' eyes to a bigger picture of global risk appetite. Following (and understanding) the debt-equity relationship has proved, in general, a very useful instrument in an investor's toolkit and Barclay's Capital this week points to just how dislocated European credits are relative to stocks (having underperformed) and while we may not be quite as exuberant as them in the call to add credit exposure here (as we see more structural than cyclical concerns ahead), we cannot argue that on a relative-value basis. However, arguments for significant re-allocation from bonds to stocks simply do not make sense (from both valuation and risk perspectives) - no matter how many times Pisani tells us so.

You Don`t Need The Federal Reserve To Tell You Something Is Wrong

Admin at Marc Faber Blog - 51 minutes ago

"You don`t need the Federal Reserve to tell you something is wrong." - *in Reuters* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

The Next Recession In The U.S. Will Be A Lot Worse

Admin at Jim Rogers Blog - 1 hour ago

You know, the American economy has had an economic slow down every four to six years since the beginning of time. So we’re overdue at the end of 2011/2012/2013. I don’t know when it will come but I know it will come. It always has. And when the next slow down comes Americans are in serious trouble. America shot all its bullets. We can’t quadruple our debt again. You know, if you take in all the off balance sheet guarantees and assets, we have a huge debt problem facing us. And if we try to do that again the market is not going to let us. Likewise, we cannot press staggering amounts... more »

100% Debt Discharge Decision In Greece Sets Troubling Precedent For Local Banks

A very disturbing precedent, for the already frayed domestic financial system, was set in Greece over the past few days, where as the linked story from On-News.gr explains, an unemplyed Greek woman who owed a little over 26,000 euros to two banks, Eurobank and National, received a full debt discharge on her outstanding loans. As the blog logical concludes, this decision will probably be adhered to in thousands of similar cases. Furthermore, it should be noted the woman had a perfect payment record for 18 years, and only fell behind when she lost her job. Imagine the sheer panic that would ensue if a comparable legal decision vis-a-vis ordinary consumer debt were to occur in the US - that would be a supreme court resolution for the ages. In the meantime in Greece, a one-two punch arrives: deposits being drained and moved overseas, and bad loans being outright erased from the balance sheet by court order. At least both sides of the balance sheet are declining so there will be no way for banks to fudge their capitalization and make it seem that loan writedowns are actually a beneficial thing for book equity.