Video Explanation Of How The ESM Is Europe's Uber-TARP On Steroids

Three years ago, Congress balked at the mere thought of giving Hank Paulson's (so lovingly portrayed in Andrew Ross Sorkin's straight to HBO Too Big To Fail) proposed TARP, which came in an "exhaustive" 3 page term sheet with limited bailout powers however with virtually unlimited waivers and supervision, and voted it down leading to one of the biggest market collapses in history. Curiously, a more careful look through Europe's €500 billion (oddly enough almost the same size as America's $700 billion TARP) European Stability Mechanism or ESM, reveals that in preparing the terms and conditions of the ESM, Europe may have laid precisely the same Easter Egg that Paulson did with TARP, but failed. Because at its core, the ESM is like a TARP... on steroids. It is a potentially unlimited liquidity conduit (only contingent on how much cash Germany wants to allocate to it - which in turn means how much cash Germany is willing to let the ECB print), with no supervisory checks and balances embedded, and even worse with no explicit or implicit liability clauses - in essence it is a carte blanche for its owners to do as they see fit without any form of regulation. As the following brief but must watch video explains, the ESM "is an organization that can sue us, but is immune from any forms of prosecution and whose managers enjoy the same immunity; there are no independent reviewers and no existing laws apply; governments can not take action against it? Europe's national budgets in the hands of one single unelected intergovernmental organization? Is that the future of Europe? Is that the new EU? A Europe devoid of sovereign democracies?" Ironically even America's feeble and corrupt Congress stopped a version of TARP that demanded far less from the taxpaying citizens. Yet somehow, Europe has completely let this one slip by. Is it simply to continue the illusion of the insolvent Walfare State for a continent habituated by zombifying socialism, or is Europe by now just too afraid and too tired to say anything against its eurocrat class? One thing is certain: when the people voluntarily give up on democracy, out of sheer laziness or any other reason, the historical outcomes are always all too tragic.

Guest Post: Here’s The Good News: You’re Not Bank of America

It’s clear that the BRICS cannot be the engine room of global economic growth. Meanwhile, Europe is a complete basket case, and the euro is looking increasingly as though it will be consigned to the dustbin of history. Across the pond, the US is trying to put a brave face on its jobless recovery whilst kicking a $15 trillion debt bomb down the road. Anyone who steps back and looks at the big picture has -got- to recognize the absurdity of this situation. Now… here’s the good news: you and I have a huge advantage. Citi, Deutsche Bank, Unicredit, etc. are sitting on incalculable losses, unrealistic obligations, and worthless paper that will destroy their organizations. They’ve been accumulating these for years and have no way of avoiding the endgame. We do. We, on the other hand, are little guys. If you and I want to cut our exposure to these silly pieces of paper that governments pass off as currency, we can do that easily. We can easily do that by buying gold or productive land overseas. Bank of America, on the other hand, has to hold Tim Geithner’s dirty laundry.

The Dow fails to hold onto gains/Bank of America in danger of falling below 5.00 dollars/gold and silver withstand another raid

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 2 hours ago

Good evening Ladies and Gentlemen. The price of gold today held its position despite a raid by the bankers.  It finished at $1594.40 for a loss of $1.20.  The price of silver was under attack all day and it finished the comex session at$28.77 down 85 cents. The Dow finished the trading session down 100 points but all eyes are on Bank of America.  If this stock falls below 5.00 dollars then it is

 

 

 

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Gold Daily and Silver Weekly Charts - Raid on Silver, Gold's Turn at Resilience

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SP 500 and NDX Futures Daily Charts

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Monster Breakout of 2010 Already Forgotten

Eric De Groot at Eric De Groot - 6 hours ago

Those that compress the time shorter than 2015 could very well see dispair rather than potential. F-TV headlines have been working overtime to paint gold and gold shares as dead. Judging by the tone of the mailbox, repetition of the message and a general inability to refute surface arguments has only agumented the growing doubt that the gold train has broken down. How easily the monster... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

 

 

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Gold vs. The 200 Day Moving Average

Dave in Denver at The Golden Truth - 7 hours ago

Let's set the record straight. I really didn't want to spend time on a post today but I've been inundated with a lot of really reckless, ignorant research over the past few days about the "technicals" of the gold market. Lately there's been many many blogs and research reports which make the claim that once gold breaches its 200 dma to the downside, the party is over. But let's look at the 10-year track record of gold vs. its 200 dma, after all there's nothing like showing the hard data in all of its glorious golden truth: *(click on the chart to enlarge)* That chart pretty much... more » 

 

 

 

 

Gallup Finds Unemployment Rises For Fourth Week In A Row, Cautions On BLS Data

Gallup, which unlike the BLS, does not fudge, Birth/Die, or seasonally adjust its data, has just released its most recent u(n)employment data. And it's not pretty: for all those hoping that the Labor Participation Rate fudge that managed to stun the world a few weeks ago with a major drop in the November jobless rate, don't hold your breath. Gallup which constantly pools 30,000 people on a weekly basis, has found that for the past 4 weeks, both underemployment and unemployment have risen for 4 weeks in a row. And while the number of US workers "working part time and wanting full-time work" one of the traditional short cuts to boosting US jobs has risen to almost a 2 year high, it is the Job Creation Index in December which plunged in the last week, confirming that the Initial Claims data out of the BLS has been spurious and is likely to revert back over 400k on short notice. In summary, here is how Gallup debunks the BLS' propganda: "The sharp drop in the government-reported unemployment rate for November and the sharp drop in jobless claims during the most recent reporting week have combined to create the perception that the job market may be improving. Economists are wondering whether this means the economy is stronger than previously estimated. Political observers are wondering how fast and how far the unemployment rate needs to fall to significantly improve the president's re-election prospects. In contrast, Gallup's data suggest little improvement in the jobs situation. December unemployment is up slightly on an unadjusted basis. In fact, the government is likely to report essentially no change in the unemployment rate when it issues its report on December unemployment in the first week of 2012. Of course, this assumes that the labor force doesn't continue to shrink at so rapid a pace that it drives down the unemployment rate, as it did last month. Gallup's most recent weekly job creation numbers also suggest little improvement in the jobs situation. As a result, it may be wise to exercise caution in interpreting the drop in the government's most recent jobless claims numbers." Or, less diplomatically, the BLS is lying like a drunken sailor just as the economy is about to turn. And if BAC continues languishing under $5, it will turn very hard.
 

 

 

 

BAC Breaks 4 Handle, Drags Entire Market Down

As definitive evidence just how fucked up this entire market is, here is what happens to the ES the second the infinite BAC Bid at $5.00 finally gets taken out. This is the ESH2. That's right - the entire market moved tens billions in market cap because the Plunge Protection Team just failed at protecting the "precious" $5.00 level.

Europe Is Now Officially Bazooko's Circus - Italy To Provide €23.5 Billion In IMF Cash To Bailout Italy

The EU was already embarrassed into releasing a press release that it could procure €150 billion in Eurozone contributions to the IMF rescue, now that the UK is out of the picture and the December 9 Eurosummit agreed upon total of €200 billion including non-Eurozone contributors (mostly the UK with €30.9 billion) has been "adjusted." Now we find that the rabbit hole goes even deeper into Bazooko's Circus because according to a just released update, of the remaining meager €150 billion in funding, Germany will be responsible for €41.5 bn, France at €31.4 billion, and Italy will need to provide €23.5 billion. To, you know, bailout Italy. #Ref!

Bank Of America: "Santa Is Not Coming", Sees 50% Chance Of Drop To 950

Forget the Santa rally, and pack up on parachutes. That is the advice of Bank of America's chief technician Mary Ann Bartels who in a note today writes: "Test of the October lows is underway – Santa is not coming - Last week the S&P 500 fell below its 50-day moving average which is the new level to watch – 1228. A failure to move above and hold the 50-day moving average confirms to us that we have already begun to enter the phase of testing the October lows near 1100-1074. This pattern is becoming eerily similar to 2008 into 2009. A base building process has been underway since August but we have maintained the belief that the lows still need to be tested and undercuts to 985- 935 are possible (50% probability) as part of this process. We expect a new cyclical bull market to emerge near 2Q12. Time and patience are needed." Which is to be expected: after all Bank of America, which is about to have a $4 handle once the Maginot Fortress of a near infinite number of bids at $5.00 is soaked up, will be the first to go the way of the dodo unless the market cracks and the Fed has political cover for QE3. Which is precisely what we have been saying for a year - namely that the market has to stop discounting (events such as QE3, 4 and so on) and allow itself to plunge in order to unleash all these favorable outcomes. And yet it refuses to as someone always start lifting the offer on every big dip in following with the now suicidal (for many banks) practices of BTFD. Oh well, when you have 24 year olds like this kid, who somehow made top billing in Forbes 30 under 30, defining market structure, we are long past overdue for the mother of all market crashes.

Bill Gross Insinuates The ECB's Upcoming LTRO Is Merely A Shell Game

 

 

 

 

A Quick And Dirty Look At Japan's Nearly ¥1 Quadrillion In Debt

Scouring through the news screens, we nearly fell of the proverbial chair after reading the following Bloomberg headline paraphrasing a Nikkei report: "Japan May Buy Chinese Govt Bonds, Nikkei Says....Japan is seeking to diversify forex funds and strengthen economic cooperation with China by helping make yuan more international. Japan may purchase a total of $10b worth in stages." Naturally, there are two interpretations: the ugly one is that Japan, the 3rd largest holder of US debt after the Fed and China, is considering gradually abandoning the dollar or, as the term is better known in polite circles "diversifying." The second one, and the far more amusing one, is that Japan will somehow bail out China by providing the much needed credit money that will translate into GDP (at a sub 100% ratio of course, because as is well known by now the world has reached the stage where one unit of debt generates less than one unit of incremental growth). The reason why this is amusing is because as the chart below shows, Japan's debt is now a hair's width below ¥ 1.... quadrillion. And yes, ignore the fact that the demographic squeeze in Japan is already forcing households to proceeds to monetize the largely domestically held debt. So, we wonder, where will the JGB debt curve go next in the deflationary basketcase that is Japan? As for where it has been, see below.

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