S&P Warning Of Imminent Greek Default Again, But Promises All Shall Be Well, Dallara Speaks

Just a week over the last time S&P said Greece would likely default any second, it reminds us once again why we should care.

• GREECE IN ALL LIKELIHOOD WOULD QUALIFY AS A DEFAULT: CHAMBERS
• S&P'S CHAMBERS SAYS IT'S NOT GIVEN THAT GREECE DEFAULT WOULD HAVE DOMINO EFFECT IN THE EURO ZONE

Perhaps just as irrelevant if notable is that S&P basically said just that back on May 9, 2011. As for Greece, it is a given that if the country proceeds with CACs it will default. Period. And yet that is just what will happen. However a far bigger question, as we touched on yesterday, is what happens next, when Portugal decides to follow the same framework of "deleveraging" only to find that courtesy of having strong creditor protection bonds it can't? Or when the Troika figures out that due to strong negative pledges, the country's balance sheet can not be primed and thus subordinated, and thus is ineligible for secured financing. And what happens when Europe realizes that Portugal is ineligible for saving in the conventional sense? Or Spain? and so forth.

The Honor of Ron Paul

by Joseph Sobran, Sobran.com:
I guess I’ve known Ron Paul for a quarter of a century now, and I don’t remember how we met. My first memory of him is a quiet dinner on Capitol Hill, during the Reagan years. He told me with dry humor of being the only member of Congress to vote against some bill Reagan wanted passed. For Ron it was a matter of principle, and he was under heavy pressure to change his vote.
What amused him was that the Democrats didn’t mind his voting against it; all the pressure came from his fellow Republicans, professed conservatives, who were embarrassed that anyone should actually stand up for their avowed principles when it was unpopular to do so.
That was Ron Paul for you. Still is. The whole country is getting to know him now, and the Republicans still want to get rid of him. The party’s hacks, led by Newt Gingrich, have even tried in vain to destroy him in his own Texas district.
Read More @ Sobran.com

Guest Post: How To Avoid Voting For A Globalist Puppet

Even with rigged electronic voting, media manipulation, and political co-option, I feel our efforts this year will resonate for many decades to come.  Whether we are able to take back social power for regular citizens is not as important as making them aware that they have allowed themselves to lose that power in the first place.  The elections of 2012, ultimately, should be treated as a vehicle for enlightenment, and this enlightenment begins when we are able to recognize the lies we live, and the men who sell them to us…

 

Net Asset Value of Certain Precious Metal Trusts and Funds

 

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Emerging Markets Outlook

Admin at Jim Rogers Blog - 2 hours ago

All emerging markets ran up a lot in 2009 and 2010 and that is why I started shorting them, mainly on price because most of them just went up too much. - *in Investment Week* *Related, iShares MSCI Emerging Markets Index ETF (EEM) * *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, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.*

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Bloomberg Video Interview, January 2012

Admin at Marc Faber Blog - 2 hours ago

Jan. 20 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks about the outlook for stocks versus bonds and his investment strategy. He speaks with Sara Eisen and Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg) *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

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Gold and Equities, Gold Wins This Cycle

Eric De Groot at Eric De Groot - 3 hours ago

Gold and global equities will move higher together. Those that have not succumb to short-term fear understand that this move will not be equal. Gold's surge relative US large cap stocks (equities) is not done. Chart 1 and 2 provide an indication of both duration and magnitude of the move yet to come in this cycle. Chart 1: U.S. Large Cap Stocks Capital Appreciation Index (LCSCAI); S&P 500 to... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Romney Supporters PAID to be Romney Supporters

NATO Back in Libya? ‘Worst Case Scenario Possible’

In Libya, at least five people have been killed and 20 others wounded, as supporters of former leader Muammar Gaddafi seized control of the town of Bani Walid, after clashes with a group loyal to the new government. Earlier, the National Transitional Council’s leader warned that the country was on the verge of civil war. The NTC has already been struggling with violent protests in its stronghold of Benghazi, which forced its second most senior official to resign. The demonstrators, many of whom helped overthrow the previous regime, are angered by the slow pace of reform and a lack of transparency in the handling of the country’s assets. Patrick Hayes, a reporter for the online magazine Spiked, says the worrying events in Libya are not surprising.

Sovereigns Declare War on US Dollar

Iranian Crisis Evolving into Dollar Hegemony and Western Power Challenge
by Chris Blasi, GoldSeek.com:

Profoundly significant news came out of the Middle East on Monday January 23, 2012. The headline via DEBKAfile* reads:
India to Pay Gold Instead of Dollars for Iranian Oil. Oil and Gold Markets Stunned
Within the body of the report were gleaned these crucial items:
1. India has become the first buyer of Iranian oil to agree to settle purchases in gold.
2. China is expected to follow India’s move.
3. Approximately 40% of Iran’s total oil exports are consumed by India and China.
Read More @ GoldSeek.com

Portugal Reenters Bailout Radar As Traders Realize Greek "Rescue" Model Is Not Feasible Here

Remember when Europe was fixed, if only for a few weeks? Those were the times, too bad they are now officially over. EURUSD is back under 1.30 in thin volume because even as we "shockingly" find that, no, Greece did not have the "upper hand" since Greek bondholder negotiations just broke down (and that over the matter of a cash coupon delta between 3.5% and 4.0%, which implicitly means that from a bondholder IRR perspective, when taking a 15 cent EFSF Bill into consideration, the hedge fund community fully expects the country to be in default even post reorg in at about two years). But it is that "other" European country which was recently junked by S&P (causing the 10 year to soar to new records), that is now the focus point of (re)bailout concerns. Reuters reports: "The euro nudges down some 20 pips to $1.2995 in thin, illiquid trade with Tokyo dealers citing renwed fears Portugal may need a second bailout. Undermining the glow of Lisbon's achievements in reforming the country's labour market is the rapidly rising market concern that it is the next potential candidate to default in the euro zone after Greece -- a point that is fast becoming clear as Athens approaches the end of its debt restructuring talks." And here is the paradox: if Greece succeeds in persuading the ad hoc creditors to accept a 3.5% coupon, which it won't absent cramdown and CDS trigger, Portugal will immediately if not sooner proceed with the same steps. There is however, a problem. Unlike Greece, where the bulk, or over 90%, of the bonds are under Local Law, and thus have no bondholder protections (a fact about to be used by Greece to test the legal skills of asset managers who can retain the smartest lawyers in the world and generate par recoveries on their bonds in due course), in a generic Portuguese Euro Medium Term note Programme prospectus we find the following...

Talk of Economic Recovery Not Rooted in Reality

Talk of economic recovery is surfacing even in the Rick’s Picks forum, and so it’s probably a good time to consider why the very notion of a sustained recovery is factually unsupportable. It’s not hard to fathom why sightings of supposed economic green shoots have returned like kudzu in recent weeks. For one, Europe’s slow-motion collapse has been put on hold by an all-out effort by the central banks to suppress sovereign borrowing rates. This is being accomplished through “swaps” that allow the European Central Bank to exchange unlimited quantities of euros for Fed dollars for a nominal charge of 50 basis points. In effect, U.S.- style monetization is being surreptitiously applied to paper over Europe’s debt problem. For two, with the Fed artificially holding mortgage rates near all-time lows, home sales – although, significantly, not home prices – are staging a dead-cat bounce. And for three, the endless election campaign has provided comic distraction for a nation terminally fatigued by real news. The news media are undoubtedly relieved to be able to report the meaningless details of an endless campaign because it frees reporters and editors from having to tackle more challenging subjects. (Full disclosure: Your editor was a newspaper editor and reporter for seven years.)
Read More @ RickAckerman.com

With A 6 Month Delay, Pimco Catches Up To Zero Hedge

Deconstructing Gingrich

This is neither here nor there, but is, for all intents and purposes, the best take down of the utter and complete hypocrisy that now reigns supreme in the GOP primary process. Thank you Jon Stewart for doing the thinking that so many other Americans seem utterly incapable of any longer.

Chart Of The Day: The IMF's "Downside" Case For Europe And The World

This is the scariest chart out of the IMF's World Economic Outlook report released today. Naturally it was purely included in there to emphasize the IMF's Mutual Assured Destruction point that Europe has to immediately proceed with fiscal easing (something which Germany will not agree to until it is too late, if then), or else this is what happens. And since this is Europe, and no fiscal resolution will come (but many, many, many summits are in store before the world figures this out), this is precisely the sad reality in store for Europe, and thus for the US and China, as 2012 will be the first year since the Second Great Depression in which official statistics will represent a global economic contraction. As for Europe's 4% decline relative to baseline: good luck.

IMF Cuts Global Forecast, Sees European Recession, Warns Of 4% Economic Crunch If No Euroarea Action

The latest IMF Global Financial Stability Report is out and it is not pretty. The IMF now sees:

• 2012 world growth outlook cut to 3.3% from 4.0%, 2013 growth revised lower to 3.9% from 4.5%
• 2012 US growth of 1.8%, 2013 at 2.2%
• 2012 UK growth of 0.6%, down from 1.6%
• 2012 China growth of 8.2%, down from 9.0%
• Eurozone to enter "mild" recession, whatever that is, with -0.5% economic growth, to grow again in 2013 by 0.8%. Unclear just how with all the deleveraging...

IMF also adds that without action, the debt crisis may force a 4% Euro-area contraction, in line with what the World Bank, controlled by a former Goldmanite, said. Lastly, the IMF says that Europe needs a larger firewall and bank deleveraging limits. Well there is always that €X trillion February 29 LTRO.

Italy Police Busts Fitch Milan Office

The USS Europa Discorida story just gets more and more surreal.

• ITALY PROSECUTORS WIDEN RATINGS AGENCY PROBE TO FITCH, UNDER INVESTIGATION FOR MARKET ABUSE, INSIDER TRADING - INVESTIGATIVE SOURCE
• ITALY FINANCE POLICE SEARCHING FITCH OFFICE IN MILAN, ANSA SAYS

S&P maybe? Sure. But piss off the French rating agency? As if anyone even trades in collusion with the completely unmoving announcements by the most irrelevant of the NRSROs? This is just the definition of irrational Italian scapegoating which will do nothing to help Italy-French relations, but at least it will provide "justification" for Fitch's evil downgrade when it comes - after all it was obviously in retaliation for the Italian police just doing its job. Finally, how long would an Egan-Jones office in Milan stand before it was burned to the ground: 1 week? 1 day? 1 hour?

Japan Gold Buying on TOCOM Again Supports

from GoldCore:
Gold’s London AM fix this morning was USD 1,669.00, GBP 1,072.69, and EUR 1,282.17 per ounce.
Yesterday’s AM fix was USD 1,675.00, GBP 1,076.55, and EUR 1,294.94 per ounce.
Gold started out lower in Asia this morning as the euro faltered on news that European finance ministers rejected an offer by Greece’s private creditors to help restructure its debts, but gains on Tokyo futures exchanges and an increase of demand in India cushioned the fall.
Investors are waiting on the outcome of a 2 day Federal Reserve meeting which ends on Wednesday. Here they are following any signs that interest rates will remain low, as that could put pressure on the U.S. dollar.
Read More @ GoldCore.com

Obama Puppetmaster Warren Buffett Biggest Winner From Keystone Pipeline Rejection

Just when one thinks American crony capitalism couldn't hit new lows, here comes Warren Buffett and his personal puppet, the president, proving everyone wrong once more. Because if one thinks there is no (s)quid pro quo for all that "sage" advice that Buffett has been giving to Obama on extracting as much wealth as possible from future wealthy Americans (before they decide they have had enough with this crony shit and leave the country for good), one would be fatally wrong. As it turns out, it is not just natural resources and aquifer purity that Obama had in mind when sealing the fate of the Keystone XL pipeline. No - it appears there were far more relevant numerial metrics that determined Obama's decisions. Such as the bottom line number of Buffett's Burlington Northern, which according to Bloomberg, is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit. '“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul." And quite delighted to reap the windfalls of unfounded populist fears she forgot to add. Because while the whole "carbon-credit" multi-trillion top line expansion scheme for Goldman under the pretense of actually caring for the environment may have collapsed, it is not preventing others from trying and succeeding where even Goldman has failed.

Guest Post: EU Finance Ministers Push Through ESM Treaty in Fishy Fly-by-Night Move

 RED ALERT TO EVERYBODY INTERESTED IN THE ESM: THERE IS NO CURRENT VERSION OF THE ESM TREATY AVAILABLE!!!
Europe's most important treaty on the European Stability Mechanism (ESM), which will lead the EU into a financial dictatorship, has been pushed through by EU finance ministers late Monday evening. But the latest version of the ESM cannot be found on English and German EU websites. A link on consilium EU only leads to a 'file not found' message and the German EU website "Europa von A - Z" does not mention the ESM at all. This reminds one of the secrecy around the Federal Reserve Act, that was pushed through in 1912. Is the EU Commission now playing the same fishy game 100 years later? Significant changes have been made, a few media reported. The capital of the ESM will now be only €80 billion instead of the €700 billion proposed in the only available draft version from July 2011 (see treaty text below). The finance ministers also agreed to bring the ESM into existence one year earlier by July 2012, putting national governments under immense pressure to ratify the ESM treaty without sufficient public discussion.

Fear Index Shows That Gold is Undervalued

by James Turk, GoldMoney.com:
The year 2011 ended on a very weak note for the price of gold, which tested support near the lowest levels since August as the precious metal slid below $1,550. This movement even drove the GoldMoney Fear Index below 3% as US M3 continued to rise, surpassing $14.4 Trillion. The downward path of gold since the September highs immediately prompted cries that the “bubble was bursting” from every corner of the financial press.
They could not be more wrong.
Neither a rising price, nor anecdotal reports of increased buying are in any way proper evidence of a bubble. If we ignore the chatter and actually look at empirical data, it is quite easy to recognise a speculative bubble or mania. That is to say, an irrational and unsustainable overvaluation of an asset regardless of fundamentals, reinforced by the belief that it will continue to rise indefinitely. We have a number of very vivid examples in living memory: the dotcom bubble, the housing bubble, and history provides many more examples, John Law’s Mississippi Bubble being the classic example.
A strict definition of a speculative bubble will therefore have two basic parts to it:
Read More @ GoldMoney.com

It’s Treason to Disagree

by Jeffrey Tucker, Whiskey and Gun Powder:
A horrifying aspect of modern life is how nearly daily threats to fundamental freedoms and human rights nearly require that citizens become politically aware and active.
Here we are struggling to put food on the table, cultivate a civilized private life, support things we care about, manage our households, and otherwise meet all the challenges of modern life, and then some jerk politician pushes some dangerous legislation that poses an all-out attack on everything we take for granted.
One of those things we take for granted is the freedom to disagree with the government and its policies.
Consider now the Enemy Expatriation Act now being pushed by Republican Charles Dent of Pennsylvania and Democrat Joe Leiberman of Connecticut. This act adds to existing law that makes it a crime to support materially governments with which the U.S. is at war.
Read More @ WhiskeyAndGunPowder.com

Frontrunning: January 24

• Fears Mount That Portugal Will Need a Second Bailout (WSJ)
• EU to Have No Deadline for End of Greek Talks (Bloomberg)
• Japan economy predicted to shrink in 2011 (AFP)
• Japan’s Fiscal Pressure Intensifies as Tax-Boost Plan Insufficent: Economy (Bloomberg)
• Berlin ready to see stronger ‘firewall’ (FT)
• Obama Speech to Embrace U.S. Manufacturing Rebirth, Energy for Job Growth (Bloomberg)
• EU Hits Iran With Oil Ban, Bank Asset Freeze in Bid to Halt Nuclear Plan (Bloomberg)
• China's Oil Imports from Iran Jump (WSJ)
• Croatians vote Yes to join EU (FT)
• Japan’s $130 Billion Fund Unused in Biggest M&A Year in More Than Decade (Bloomberg)
• Buffett Blames Congress for Romney’s 15% Rate (Bloomberg)

PetroPlus, Largest European Refiner By Capacity, Files Bankruptcy

Back on December 30, we noted that a little known name in the US, but very well known in Europe, PetroPlus is having significant solvency issues as banks froze a $1 billion revolver. Less than a month later the situation has proceeded to the next evolutionary step, as Europe's largest refiner by capacity has announced it will file for bankruptcy protection. And while operations should not be impacted, the fact that this comes just as Europe imposes an oil embargo on Iran, virtually guarantees that the continent's gasoline prices, already among the highest in the world are likely to set off even higher, paradoxically even as end-market demand is at lows. The bankruptcy will also guarantee that European initial jobless claims will plunge, especially if the BLS opens a Brussels office and applies its own very unique brand of "logic" to Europe.

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