The Eight Hundred Pound Greek Gorilla Enters The Room

I hold up my hand, “One moment please” as I introduce you to the 800 pound Greek Gorilla that is about to enter the room. Allow me to now present to you the “OTHER” Greek debt that is outstanding and will have to be accounted for as the country defaults. Detailed below are some of the “OTHER” sovereign obligations of the Greek government which have now been submitted to the ISDA and I list some of them below. You will note that there are bank bonds, Hellenic Railway bonds, Urban Transportation bonds et al that are guaranteed by Greece. You will also note that there are bonds tied to Inflation, Floating Rate Notes, Asset-Backed securities and a whole mélange of other structured products with a Greek sovereign guarantee. What we all thought was fact is now clearly fiction and default will now bring “Acceleration” one could reasonably bet in all kinds of these securitizations and in all kinds of currencies.  This could come from the ratings agencies placing Greece in “Default” or it could come from the CDS contracts being triggered depending upon each indenture and you will also note that a great many of these off balance sheet securitizations are governed by English Law and not Greek Law. You may also wish to consider the fallout to the banking system as the lead managers of all of these deals could find themselves behind the eight ball as various clauses trigger and as the holders of these securitizations line up at the judicial bench [ZH note: there is a reason why Allen & Overy is getting paid $1500 an hour to indemnify ISDA with a plethora of exculpation clauses - they know what is coming] The ISDN numbers are on all of these securities and the lead managers may be found on Bloomberg or other sources as well as the holders of the debt.  The curtain just lifted and the show is about to get way too interesting!

The Greek €107 Billion Contingent Liability Gorilla Exposed

Here is $107 billion of OTHER debt; guaranteed debt that does not appear to be included anywhere in the official Greek sovereign debt figures. Contingent liabilities that are not counted any longer perhaps as the accepted manner of doing business now in Europe. Most of these issuances are governed under British law with “Default” clauses and “Negative Covenant” clauses. Greece defaults on €105 billion Euros and adds new debt, the IMF/EU loans, of 130 billion Euros and we are told that Greece is better off today than yesterday. What drivel! With the addition of the new IMF/EU loans of $172 billion and the revelation of the guaranteed debt at $107 billion Greece now has $279 billion of new and hidden debts.  All of the meandering, all of the charades, all of the red nail polish applied will, in the end I forecast, not be able to hide the reality that the barking dog is a greasy Pig.  

China Posts Biggest Trade Deficit Since 1989 As Crude Imports Surge: Is China Recycling Export Dollars Solely Into Oil?

In addition to all the US election year propaganda and delayed after effects of central banks injecting nearly $3 trillion in liquidity to juice up the US stock market, something far more notable yet underreported has happened in 2012: the world stopped exporting. Observe the following sequence of very recent headlines: "Japan trade deficit hits record", "Australia Records First Trade Deficit in 11 Months on 8% Plunge in Exports", "Brazil Posts First Monthly Trade Deficit in 12 Months " then of course this: "[US] Trade deficit hits 3-year record imbalance", and finally, as of late last night, we get the following stunning headline: "China Has Biggest Trade Shortfall Since 1989 on Europe Turmoil." Here we must apologize, but blaming the highest trade deficit in 23 years for a country that needs a trade surplus to exist, on the Chinese Lunar new year, which accidentally happens every year, is more than a little naive. Because as the charts below indicate, while exports did in fact tumble in a seasonal pattern as they do every February although more than expected, February imports of $146 billion not only did not drop, but posted a 19% increase compared to January, and soared 40% compared to a year prior. Why? Perhaps the second consecutive record high in monthly crude imports has something to do with it. Which in turn when considering the huge selloff of US Treasury paper by China in the last few months, indicates that the world's fastest growing economy no longer has an interest in taking its export dollars and using them to fund purchases of US paper, but is in fact converting US fiat into real, hard goods. Such as crude (for all those curious where the marginal demand is coming from that is). And most likely gold. But we will only learn about the gold hoarding well after the fact, when China is prepared to see the price of the metal soar as it did in 2009.

Guest Post: Time to Accumulate Gold and Silver?

...most investors fall into one of two categories: those that hold an abundance of gold and silver (which tends to be physical forms only), and those with little or none. While both groups need to diversify, I'm a little more concerned about the second group. Here's why. Regardless of what you think will happen over the remainder of this decade, one thing seems virtually certain: the value of paper money will be affected, perhaps dramatically. Even if the economy slips into deflation, the deflation wouldn't last long. A panicked Fed would print to the max and set off a wild rise in prices. This is why we're convinced currency dilution will not only continue but accelerate. Let's take a look at what's happened so far with the value of our currency vs. gold, after accounting for the loss in purchasing power.
 



Greece Is Trying To Convince Portugal To Make F.I.R.E. Hot!!!

Posted by: Reggie Middleton

Post date: 03/10/2012 - 09:11

As Portugal gets jealous of Greece's ability to just not pay bills, insurance portfolios will suffer greatly as the FIRE sector burns! The first domino has fallen, yet the MSM is taking this as a non...

FBI Director: I Have to Check to See If Obama Has the Right to Assassinate Americans On U.S. Soil 

Posted by: George Washington

Post date: 03/09/2012 - 12:31

Yes, Obama Claims Power to Kill Americans on U.S. Soil

 

 

So, What’s Next Step Towards The Eurocalypse?

Okay, as I have been warning since the first quarter of 2010, Greece has defaulted. What I mean by default is that Greece did not honor the payment terms of its debtor agreements. I really don’t care what this or that association decides to call it, if you bought Greek bonds you ain’t getting the money that Greece promised when they promised they will give it to you. Just to add something official sounding to it, Fitch has declared it so, Fitch Downgrades Greece From C To Restricted Default. Of course, if you are on BoomBustBlog of following me, your probably smarter than to take these guys words for anything even remotely resembling predictive since they declared default status about three hours before Greece actually made it official they would default – plenty of time for interested parties to do something about it, no? Reference Rating Agencies vs Reggie Middleton, Part 3 and What Is More Valuable, The Opinion Of A Major Rating Agency Or The Opinion Of A Blog? Go Ahead, I DARE You To Answer!
Read More @ BoomBustBlog.com

 

Reality Check

by James Howard Kunstler, Kunstler.com:
America is starting to remind me of Bette Davis in the horror movie classic What Ever Happened to Baby Jane? America is losing its grip on reality. America is acting like an elderly strumpet in too much pancake makeup performing a song-and-dance on the beach while its kinfolk lie dying in the sand.
History is taking us in a certain direction and we don’t want to hear about it. We’ve got our hands clapped over our ears and we’re shouting “Kittens and puppies! Kittens and puppies!” Here are some of the things that we’re confused about:
Read More @ Kunstler.com

 

 

Bill Black: US Promotes Flawed Economic Dogma that Encourages Fraud and Needlessly Perpetuates a Pattern of Recurring and Intensifying Financial Crises

[Ed. Note: Follow the link, and scroll to the bottom for the full audio of the interview.]
by Bonnie Faulkner, CapitalismWithoutFailure.com:

Bonnie Faulkner interviews former bank regulator, William K. Black. There is more to this 1-hour interview than what is contained in these notes. Audio of the interview is available following this text.
On banks’ traditional role as middleman: Some banks do very useful things for the world. According to economic theory, banks act as a middleman. Banks take savings, accumulate money, make loans to companies to invest productively… Middlemen serve a very useful purpose, but should not be very big and should not make a lot of money… based on the efficiency principal.
On what has happened to our elite financial institutions: In the world we live in, finance has become the dog instead of the tail. In the USA, 30% to 40% of all profits in business come from the financial sector. They have become a parasite… They weaken the economy. Overall, finance has lost its way – in an immensely destructive way. Why is it that our most elite institutions are our worst institutions? Why are our most elite institutions the ones that time after time violate the law and cause recurrent intensifying crises?
Read More (and Listen to the Interview) @ CapitalismWithoutFailure.com

 

 

No More QE? Bill Gross Isn’t Buying It, As Total Return Fund MBS Holdings Surge To New All Time High

from ZeroHedge:
The Fed may be using the WSJ to spread rumors of sterilized QE, but Bill Gross ain’t buying. According ot the latest update from the world’s largest bond fund, the firm lowered its holdings of cash and synthetic Treasury exposure to 38% of total from 41% (even as AUM increased from $250.5 billion to $251.8 billion), while hiking MBS to 52% of AUM: not the highest relative exposure ever, but at $131 billion in Mortgage Backed Debt, certainly the highest in absolute terms. Margin cash declined slightly from $87.7 to $78.1 billion, but one thing that appears to have increased even more is Gross’ conviction that QE 3, or to borrow a recent euphemism, THE NEW QE, is coming and it will be all about mortgage backed debt. Of secondary note is that after extending the effective duration of its holdings to an all time high 7.58 years in October 2011, the fund has rapidly cut duration and was at 5.68 at last check as holding in the 1-3 year bucket saw a substantial jump: indicating the ramp up in short duration MBS paper.
See the Charts @ ZeroHedge.com

 

 

Keiser Report: Hackers & Pirates – True GDP Boosters

In this episode, Max Keiser and co-host, Stacy Herbert, discuss hackers and pirates as true GDP boosters and independent artists being censored by the financial industry. In the second half of the show, Max talks to independent journalist Teri Buhl about a crowd-funded investigation into swinging and scamming in the hedge fund capital of the world, New Canaan, Connecticut.

Eurobonds Are On The Way: Watch Your Wallets

 

Real Reason for Prosecutions of Bodog.com and Megaupload?

by Anthony Wile, The Daily Bell:
With the attacks on Internet websites Megaupload and Bodog we find what we call the Internet Reformation is providing us with a good look at the evolving face of Western-style civil and criminal justice.
Kim Dotcom, the founder of Megaupload, a file-sharing facility, and Calvin Ayre, the founder of ‘Net gambling operation Bodog, have both been indicted by US federal prosecutors.
There are other prosecutions on the way, apparently, that are even more tenuous than the ones leveled at Megaupload and Bodog. But no doubt they will be pushed forward as well.
The attack on Bodog is sad for me personally as I know Calvin Ayre and have admired him as a courageous entrepreneur – someone who has created new business models using the power of the ‘Net.
Read More @ TheDailyBell.com

 

See Something, Say Nothing

by David Galland, CaseyResearch.com:
Dear Readers,
One of the more noxious platitudes foisted upon the public by our increasingly Orwellian government is “See Something, Say Something.”
This saying, of course, differs in no material way from the sort of propaganda utilized in all the fascist states that have come before.
While this notion of spying on fellow citizens hasn’t yet resulted in the active enlistment of a Stasi-like network of sharp-eyed matrons and meddlesome old coots embedded in apartment buildings and on each city block to dutifully report goings-on to the authorities “for national security,” can that be far behind?
But that’s not what has gotten sand under my saddle this week. No, what has irked me to the point of distraction – not to mention triggering some angry mutterings as I stomp around the house – could be considered the exact opposite of that trite trope.
Read More @ CaseyResearch.com

 

 

2012 Grain Outlook

from TFMetalsReport.com:
A few days ago, I commissioned our resident grain trading expert, “Art Lomax”, to write up a guest post that includes some basics about the grains as well as some of his personal opinions regarding the upcoming season. Thankfully, he obliged.
2012 Grain Outlook
by Art Lomax
So what’s the skinny on the grain markets for 2012? There appears to be a widespread concern that there will be an expansion of corn acres and production beyond demand leading to a big increase in corn ending stocks, and at the same time leaving a tighter bean situation with too small an acre base. And with wheat, another historically large global crop on the horizon for 2012. The wheat market seems to be trying to trace out a bottom, corn is transitioning to be the weak sister of the complex, and soybeans becoming the leader, especially with recent production problems in South America now placing a little more bullish sensitivity to US planted acres and early season new crop development in the US.
Read More @ TFMetalsReport.com

 

 

Obama Plans More Middle East Wars

by Stephen Lendman:

Cheerled by America’s major media scoundrels, war looks increasingly likely. Syria and Iran both are targeted.
Imagine the potential catastrophic consequences, especially if nuclear weapons are used. They were before. Why not now. The prospect’s chilling.
In his Der Ring des Nibelungen operas (the Ring), Richard Wagner portrayed his apocalyptic version musically. Gotterdammerung (Twilight of the Gods) prophesied the end of the world.
Einstein suggested it, saying he didn’t know what WW III weapons would be used, “but World War IV will be fought with sticks and stones.”
Around the same time, Bertrand Russell warned:
Read More @ SJLendman.Blogspot.com

 

 

The Fed Gets Creative

by Alasdair Macleod, GoldMoney.com:
According to a story in Wednesday’s Wall Street Journal, the US Federal Reserve is considering buying long-term Treasury and mortgage bonds in return for deposits held at the Fed. There has been no comment from the Fed and the story might have been no more than a trial balloon, in which case Bernanke and Co may be considering skewing the yield curve so that long-term bonds are less attractive than the time-preferences set by the market.
The deal the Fed appears to be thinking of is a reverse-repurchase agreement (a reverse repo), whereby it buys long-maturity bonds financed by credit drawn from the commercial banks. The important monetary distinction is that unused bank credit funds the deal, not hard cash. The Fed can always set the terms so that it is an attractive proposition for its counterparties. This being the case, upward pressure on short-term rates will be minimal while the Fed can manage long-term rates lower. And by buying bonds with long maturities, asset prices generally benefit which is why stocks rose on the story.
Read More @ GoldMoney.com

 

 

With Greek Deal Fiat Currency System Lives Another Day

from WealthCycles:

Today’s eurozone agreement to give Greece its second bailout of €130 billion was just another instance of political leaders and the financial establishing yet again kicking the proverbial can down the road.
The announcement had little effect on markets—investors had already priced in Greece ruin months ago, and no one really believes this bailout will be Greek’s last. More new paper will inevitably be needed to fend off future defaults, and there is still the very real possibility that Greece will be forced to leave the euro. The only suspense involved in today’s announcement was whether Greece would succeed in persuading private holders of its debt to write off part of what Greece owed them—a condition of the bailout. In order to obtain the bailout—without which Greece would have defaulted on a huge chunk of its debt anyway later this month—Greece will trade its private lenders the bonds they currently held (paper IOUs representing Greek government debt) for new bonds that are worth less and pay less interest, or yields.
Read More @ WealthCycles.com

COMEX Commercial Traders Strongly Reduce Gold Shorts

from GotGoldReport.com:

HOUSTON — As we expected, traders classed by the Commodity Futures Trading Commission (CFTC) as “commercial” in the combined commitments of traders report for COMEX gold futures (the legacy COT report), covered or offset a very large amount of their net short positioning according to data supplied by the CFTC. The COT report was released today (Friday) at 15:30 ET for large trader positioning as of the close on Tuesday, March 6.
According to the CFTC COMEX commercial traders reduced their combined collective net short positioning (LCNS) for gold futures by 45,143 contracts or 18.4% to show 200,208 contracts net short. Gold declined $109.85 or 6.2% for the Tuesday to Tuesday period.
Read More @ GotGoldReport.com

 

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