Thursday, November 3, 2011

Papandreou to Resign If He Wins Confidence Vote: Report

Greece's Papandreou has struck a deal with ministers to step down if they help him win a confidence vote on Friday, sources said.



Gold: The hedge against political stupidity

Eric De Groot at Eric De Groot - 8 minutes ago
Gold is far more than inflation/deflation hedge. Inflation and/or deflation are symptoms brought bout by the mismanagement of economy and society by centralized powers. Many choose to voice their concerns on Main Street through public assembly, while other, a very small portion of society, let the flow of capital do all of their talking. Headline: Gold: The hedge against political... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]



Greece Hasn't Made a Decision Yet on Bailout Referendum, Contrary to Finance Minster's Earlier Statement (Click for Market Reaction)



All Fixed In Greece? Not So Fast

That today democracy died in Greece is no surprise to anyone (see note from Greek reader below). What may be unexpected, however, is that despite expectations that any talk of a Referendum is over and done with, this is hardly the case. In essence, what G-Pap said in parliament today is that there will be no referendum if and only if there is an agreement from the main opposition party. Alas, as the following headlines from Reuters indicate, this now appears to be a non-starter.
But most importantly,
And so back to square one, as G-Pap's bluffing blows up in his face and any agreement is now contingent on his departure, something he has said will not happen.

Today's Joke Du Jour Comes From Italy's Biggest Bank, UniCredit

As we have been claiming for months now, Italian banks will have no choice but to raise capital to prevent their undercapitalized status from stirring the insolvent bank vigilantes and making them into the next MF, or Lehman, or pick your favorite bankrupt bank metaphor. Today we get confirmation of this, after Reuters reported that Italy's UniCredit will proceed with a €4 to €7 billion capital raise. So far so good. Where it gets somewhat entertaining is the disclosure of who it is that will be "advising" UniCredit on its capital raise. Per Reuters, "Mediobanca and Bank of America-Merrill Lynch are advising Italy's UniCredit on a capital increase seen in a range of between 4 billion and 7 billion euros, although no formal mandate has been given yet to form a consortium for the operation, sources close to the matter said on Thursday. The sources said a decision on the size of the capital hike depended on a series of factors, including whether UniCredit would be allowed to calculate convertible notes worth some 3 billion euros as core capital." Did they just say Mediobanca and Bank of America advising another bank on... a capital raise? Uh, pardon our ignorance, but shouldn't Mediobanca and Bank of America be focusing on their own capitalization first before advising someone else? Does this mean that Bernie Madoff has somehow magically made his way to the Treasury Borrowing Advisory Committee and is now advising Tim Geithner on how to raise debt? Or that Jon Corzine is running for US Attorney General? Frankly, nothing would surprise us any more... Presenting the YTD performance of all three banks.

Governments Are No Longer Representing The Interest Of The Communities

Admin at Marc Faber Blog - 9 minutes ago
*Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

CME Group attempting to clean up the MF Global mess

Trader Dan at Trader Dan's Market Views - 1 hour ago
Dow Jones is reporting this morning that a total of TEN firms have agreed to accept portions of MF Global's clientele. The firms are as follow: Dorman Trading LLC BNP Paribas RJ O'Brien & Associates Mizuho Securities USA Newedge FC Stone Rosenthal Collins Group Penson Financial Services ADM Investor Services Macquarie Futures USA 

HUI is continuing to outperform the broader equity markets

Trader Dan at Trader Dan's Market Views - 1 hour ago
The lower interest rate environment (the ECB cut rates and the Reserve Bank of Australia did likewise) is proving to be a boon for gold. That is helping pull silver higher even as it waffles back and forth between risk on and risk off trades. The end result is that a fairly good stream of buying is coming into the gold shares, many of which remain undervalued in the eyes of prospective buyers. The gains in the mining sector are outpacing the gains in the broader equity markets while on downside trips they are holding better. It would be a pleasant change if there were a growing grou... more » 

Just Another Day In Our (Corrupt) Paradise

Dave in Denver at The Golden Truth - 3 hours ago
*“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see money flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self sacrifice - you may know that your society is doomed.” (Francisco D'Anconia, "Atlas Shrugged")* I use that quote quite frequently... more » 

Setting Up The Weak Hands?

Eric De Groot at Eric De Groot - 3 hours ago
The talking heads will soon be selling seasonal strength in US equities. They will likely say ho-ho-ho equities are the way to go as seasonal strength, i.e. the Santa Claus rally approaches. Be careful of easy logic. Smart money knows that seasonality must coincide with accumulation. They know that seasonality under the veil of distribution is a bull trap. Are we seeing accumulation or... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

It's A Basic Fact Of Life That Many Things "Everybody Knows" Turn Out To Be Wrong

Admin at Jim Rogers Blog - 3 hours ago
Acknowledge the complexity of the world and resist the impression that you easily understand it. People are too quick to accept conventional wisdom, because it sounds basically true and it tends to be reinforced by both their peers and opinion leaders, many of whome have never looked at whether the facts support the received wisdom. It's a basic fact of life that many things "everybody knows" turn out to be wrong. *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fort... more » 

Will Meredith Whitney Be Proven Right In The End?

We noted, in September, that corporate bond downgrades were outpacing upgrades very notably and today we get the other side of that with Moody's noting that in Q3, Muni downgrades outweighed upgrades by the most since the financial crisis began. At 5.3 to 1, the third quarter of 2011 had the highest downgrade-to-upgrade ratio of any quarter for the U.S. public finance sector since the onset of the financial crisis in 2008.
"A rapid deterioration in credit metrics led to a higher-than-average 14 multi-notch downgrades."

Europe Closes With Equities Outperforming Credit And Financials Weakest

While attempting to assign news/rumor to each dip and rip in today's market is a waste, we note that while markets ended considerably higher (from both yesterday's close and intraday lows), there was some less-than-compelling evidence that traders remain unconvinced. Another referendum-on / referendum-off day saw equities very notably outperform credit markets, it was investment grade credit that outperformed as financial credit lagged the rest of the market. Combine that with the strength in gold and perhaps there was a little more safe-haven demand than a rip-snorting 40pt rally in ES would suggest. The EUR action dominated FX markets (as JPY stagnated) as vol was aggressively bid up around the open (much more so in macro protection than micro) but has ebbed lower as the day has worn on. US equities remain notably expensive relative to broad risk assets, especially noteworthy given the convergence to 'fair-value' overnight from an expensive close last night.

Final Tally - Outgoing Freddie CEO Gets $4 Million Bonus To Receive $21 Billion In Bailouts After Massive Q3 Loss

When last week we reported about the scandal of outgoing Freddie Mac CEO Ed Haldeman receiving at least $3.9 million as a reward for his two year tenure at the top of the insolvent and nationalized housing entity, we said: "As the chart below demonstrates, the total "draws" received under Haldeman's tenure amounts to $14.5 billion. This excludes the Q3 number which will be made clear next week. Something tells us with this abrupt departure, the number may be higher to quite higher than expected." As usual: when in doubt, be cynical, and be skeptical, and you will be right. Today, Freddie just reported that its Q3 draw, or required quarterly bailout amount from the Treasury, was $6 billion: the highest since Q1 2010, as a result of a massive loss of $4.4 billion. This means that during his tenure which ended just after the completin of Q3, Freddie has been "rewarded" with $20.5 billion in taxpayer capital merely to keep the zombie entity in operation! And for this, Ed gets $4 milliom. And this is why people in America are very, very pissed.


Guest Post: New International Report Shreds Japan's Carefully Constructed Fukushima Scenario

Japan’s six reactor Fukushima Daichi nuclear complex has inadvertently become the world’s bell-weather poster child for the inherent risks of nuclear power ever since the 11 March Tohoku offshore earthquake, measuring 9.0 on the Richter scale, triggered a devastating tsunami that effectively destroyed the complex. Ever since, specialists have wrangled about how damaging the consequences of the earthquake and subsequent tsunami actually were, not only for the facility but the rest of the world. The Fukushima Daichi complex was one of the 25 largest nuclear power stations in the world and the Fukushima I reactor was the first GE designed nuclear plant to be constructed and run entirely by the Tokyo Electric Power Company, or TEPCO. Needless to say, in the aftermath of the disaster, both TEPCO and the Japanese government were at pains to minimize the disaster’s consequences, hardly surprising given the country’s densely populated regions. But now, an independent study has effectively demolished TEPCO and the Japanese government’s carefully constructed minimalist scenario. Mainichi news agency reported that France’s l’Institut de Radioprotection et de Surete Nucleaire (Institute for Radiological Protection and Nuclear Safety, or IRSN) has issued a recent report stating that the amount of radioactive cesium-137 that entered the Pacific after 11 March was probably nearly 30 times the amount stated by Tokyo Electric Power Co. in May.

Here Comes The Politicization Of MF Global: Former Goldmanite Gensler Says MF Failure Example Of "Freedom To Fail"

We find it supremely ironic that one former Goldmanite, in this case the CFTC's Gary Gensler, takes credit (doing the people's work this time?) for allowing the failure of what is now a documented criminal enterprise, MF Global, run by another former Goldmanite, Jon Corzine, and claiming this was nothing less than an example of "Freedom To Fail". The NYT quotes Gensler: "This was an example of a financial institution having the freedom to fail,” he said in response to questioning from Senator Carl Levin, the Michigan Democrat who chairs the Permanent Subcommittee on Investigations. “I don’t think there’s any taxpayer money behind this.”" No, Gary, there is just client money behind this. Anywhere between $700 million and $1.5 billion. Money that was stolen, and had MF global been bailed out, you, the CFTC and the US Government would have been complicit in a prima facie felony. So please - no need for the pathetic pandering to the lowest common denominator that only years of Goldman tenure can hone to this level of perfection. The only question is whether the CFTC, together with that other corrupt regulator which oddly enough is not yet run by a third Goldman alum, has the "freedom to jail."

Awful Deals
Bruce Krasting
11/03/2011 - 11:31
I've done some awful deals. At one point or another everyone on Wall Street has. Morgan Stanley is bringing us one tonight 

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