Wednesday, October 26, 2011

Open Europe Summarizes What To Expect From Today's European Summit

One of the premier Euroskeptic think tanks chimes in with, as expected, a rather bleak outlook on what to expect from today's Summit which is just now starting: "The hope for a “comprehensive plan” to save the eurozone, as originally touted by the eurozone leaders, looks to be a lost cause. The best outcome we can hope for today looks to be a broad political agreement, with technical details left to be sorted at a later date. Given previous experiences with technical changes (notably the second Greek bailout package and the Finnish collateral deal) it is definitely possible that the deal could be watered down, for example with investors being offered greater guarantees over their involvement in the second Greek bailout or with the bank recapitalisation actually turning out to be less stringent than expected....No matter what the details look like, the insurance plan is fundamentally flawed, given that guarantees may not be viable when they are most needed and 20% wouldn’t be enough to calm markets any way... there’s massive irony here, as Europe is now falling back on massively complex ‘Anglo-Saxon’ financial instruments to help save the eurozone. Putting these at the heart of an already complex, diverse and flawed monetary union is far from desirable.

Banks Get Bailouts, They Don't Give Them

That the IMF believed banks would ever take a proper write down - reduce what they expect to be paid - is comical because the IIF proposal from the start was made to sound like a write-down even though it never was one. So now, as a massive bailout is about to be announced and the fear of a Credit Event at the EU and IMF is at epic proportions, the banks expect they will get taken care of. Sadly it is probably good for bank share prices short term if they win but the regulatory animosity may grow and the occupy movement will get a more recent and specific event to focus on. Since by now the EU should know where every single sovereign CDS trade is (because they must have asked the banks for that level of disclosure by now) they can go ahead and allow a good old fashioned default and kill some weak institutions and rebuild the system with healthier banks.

Germany is Already Printing Money… Deutsche Marks!!!
Phoenix Capital...
10/26/2011 - 11:15
Dr Pippa Malmgren is a former economic advisor to George W. Bush and a former advisor to Deutsche Bank. According to Malmgren, Germany has already ordered the printing of Deutsche Marks in...

Argentina Orders Oil, Gas, Mining Firms To Repatriate Export Sales

Eric De Groot at Eric De Groot - 1 hour ago
Capital flows are impeded by centralized policies always redirect. Any centralize policy that diverts capital flows from its domestic economy is certain to carry unintended consequences that ensures its future failure. Myopic policy choices invariably sacrifice long-term economic goals for short term political gain. That means past political speeches, choices, policies, etc. with subtle... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

NYSE Accumulation or Distribution?

Eric De Groot at Eric De Groot - 1 hour ago

Head and shoulder patterns tend to be symmetrical. The right shoulder formation must test support on lighter volume for the pattern to be reclassified as accumulation rather than distribution. If the 1x1 Gann line, a measure of equilibrium between supply and demand, is broken to the downside it suggests that the next lower angle will become support. This would be the 2x1. Price’s hold above... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

USDJPY Pain continues!
10/26/2011 - 09:34
Today USDJPY hit an all time low against the dollar trading at 75.71! Despite warnings from the BOJ that it would take "decisive action" to limit JPY strength, continued uncertainty out of Europe as... 

Guest Post: Obama's Re-Fi Plan: The Perfection Of Debt-Serfdom

President Obama is taking credit for a new government plan to "save homeowners." That is of course pure propaganda to mask the plan's true goal: the perfection of debt-serfdom. The basic thrust of the plan is straightforward: encourage "underwater" homeowners whose mortgages exceed the value of their homes to re-finance at lower rates. The stated incentive (i.e. the PR pitch) is to lower homeowners' monthly payments via lower interest rates. This is the Federal Reserve's entire game plan in a nutshell: don't write off any debt, as that would reveal the banking sector's insolvency, but play extend-and-pretend with crushing debtloads by lowering the cost of servicing the debt. The key purpose of this "plan" is to leave the principle owed to banks on their books at full value while ensnaring the hapless debt-serf (the "homeowner") into permanent servitude to the banks. If the net worth of your home is a negative number, then what exactly do you own? You have the right to occupy the shelter, and you own the debt. So how is this any different from a lease? There is no equity, and no equity being built: there is a monthly payment in return for the right to occupy the dwelling.

Has The US Been Living In A 'Field-Of-Dreams' Since Mar09?

While the immensity of both fiscal and monetary stimulus in the US has been exponentially covered by any and all with some suggesting too much and some suggesting too little, we remain somewhat nonplussed by the disconnects we see from what seem 'sensible' and intuitive relationships of days gone by. We noted yesterday the retail sales vs confidence/sentiment disconnects continue to amaze but today's piece-de-resistance is the Inventory-to-Shipments ratio which continues to rise back towards Mar09 peak levels as GDP growth disconnects entirely. The 'if-we-build-it' mentality seems to have created nothing in terms of real demand and as we noted earlier this morning, absolute inventories continue to rise rapidly. Given, the empirical relationship between Inventories-to-Shipments and GDP growth, we would expect significantly weak economic performance (but we guess government-sponsored student lending or GM channel stuffing will continue to create the illusion of growth required for equity managers to pump)

Whitney Tilson Explains Why He Went Long Netflix, Says He "Hasn't Lost His Mind", Cites Business Insider To "Defend" Thesis

And now the "letter" we have all been waiting for...


Presenting Whitney Tilson's Performance Since Inception Relative To The S&P

Pardon our ignorance, but shouldn't a value-focused hedge fund that has been in operation for 7 years, and has nearly daily TV and media exposure, outperform the S&P net of fees. Actually, scratch that, shouldn't any hedge fund still in existence, outperform the S&P?

For those who don't expect something for nothing...

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