Tuesday, October 11, 2011

Marc Faber To America: "Listen You Lazy Bugger, You Need To Tighten Your Belts, You Need To Work More For Lower Salaries"

Once again, the latest fire and brimstone sermon by Marc Faber is absolutely spot on, starting and ending with his "policy" recommendation for what the US needs: "I will tell you what the US needs.  The US needs a Lee Kwan Yew who stands in front of the US  and tells them, listen you lazy bugger, now you have to tighten your belts, you have to save more, work more for lower salaries and only through that will we get out of the current dilemma that essentially prevents the economy from growing." No money printing, no extensive protests, no excuses. Of course, this would have to accompany a global overhaul of the system, something Zero Hedge has been advocating since day one, as it is impossible to reform this broken system from within: "The problem i have with the investment universe is that i find it difficult to envision how the US and western Europe can return to healthy sustainable growth without a complete purge of the financial system and some type of catalyst. Something that restores some measure of social cohesion among people;  it could be hyperinflation, a complete credit market collapse, widespread sovereign defaults, civil strife, major military confrontation.”   Alas, in that he is also correct, and as we said back in early 2010, when the current episode of extend and pretend ends and the can kicking exercise finally fails, next up is war.

We're Fast Approaching the Lehman Event in Europe (Greek Default)
Phoenix Capital...
10/11/2011 - 11:15
  Sarkozy and Merkel continue to make "plans" for what to do... The reality is all they're doing is playing for time while they prepare for a Greek default. Indeed, German officials recently...

Hank Williams Jr  Fires Back...


The Latest Incarnation Of The European CDO Cubed Bailout "Swiss Army Knife": A Multi-Trillion Insurance Policy

A few weeks ago Steve Liesman ramped stocks higher for the day after he released a subsequently disproven rumor that the EFSF would become a CDO square, recycling private investments into sovereign debt. Well that rumor is now dead and buried, so it is time for the next one involving that uber multi-functional Swiss Army Knife which is the EFSF, and apparently has an infinite+1 number of applications, none of which involve actual cash funding. The source of this latest brilliant idea is Pimco parent, Allianz, which has trillions in fixed income exposure all over the world, so it is no wonder it is pushing hard for the world's taxpayers to bail it out. Only instead of a recycling cash, this time the EFSF will become Fed-Lite, "insuring" trillions in debt.

We Had Short Covering in 2008 Too... It Didn't Stop the Collapse Then...
Phoenix Capital...
10/11/2011 - 11:05
The "powers that be" have lost control of the markets. Both the IMF and the Bank of England have warned we are facing a financial meltdown of historic proportions and possibly the worst ever in...

PrimeX Update: It's On Like Donkey Kong

On Friday, Zero Hedge broke the story of the "next ABX", in the form of PrimeX, or the game of jumbo prime whack-a-mole. It appears that was indeed the beginning. Here is today's update from Morgan Stanley in a market which had gone suspiciouly silent since our post, and has now gotten quite vocal again with a vengeance. From MS: "On a day where most macro indices point to bullish sentiment, PRIMEX is getting clobbered again.  Last week, it felt like px action was driven by dealers hedging cash inventory/unwinding index longs, with retail providing a bit of a short-covering bid.  Today, however, it seems that the short-covering bid has gone silent, and the marginal buyer can't be located under his desk."

Italy Votes, IMF Gives, And EFSF Yields Increase

Italy rejected the budget today. I can't imagine that it is because the opposition wanted more austerity. That must make the Slovakians even more eager to provide the EFSF with money to buy Italian bonds. The IMF has declared that they went to Greece (because they had purchased non-refundable tickets) but are going to give our money to Greece even though none of the alleged criteria were met. How long are countries going to let IMF control their money so whimsically? Since EFSF will likely be approved, I wanted to see what the Eurozone was going to do with all that "cheap" money. As you can see clearly from the graph, French bond spreads are widening relative to Germany, and EFSF spreads are widening slightly faster than that.

Join Jeff Gundlach In A Discussion Of Whether "Risky Assets Are Cheap Enough"

Today, at 1:15pm Pacific Time (4:15 EDT), the head of DoubleLine Funds, Jeff Gundlach will hold an open discussion and webcast on the question of whether risky assets are cheap enough. Among the headline topics will be what the most efficient portfolio allocation for the current market going forward is (for those who missed the efficient frontier including real assets, gold appears to have been the best performer over the September 2008-September 2011 with a comfortable margin especially over equities, period much to the chagrin of various naysayers).Anyone can join the webcast at the following link; phone lines will also be made available at (877) 407-1869 or for international calls (201) 689-8044. Full webcast presentation of the webcast presented below.



Roubini Selling RGE, CNBC Reports

It seems that everyone's favorite Dr.Doom is selling his consultancy after only several years of operation, David Faber reports. The consultancy, according to confidential sales materials, will generate $11MM in revenue and $2MM of losses. The bulk of clients of the 85 person shop, Faber reports, is corporations, not actual investors, making the buyside wonder "who incremental clients will be." We wonder just how any potential buyer will be able to lock up Roubini for several years, without whose presence RGE will have questionable going concern value. We wish @Nouriel the best of luck in his sales process, whose successful conclusion (or otherwise) probably means that Roubini will end up as a blogger and paid panelist.

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