ECB Stops Monetary Policy Operations To Some Greek Banks
Just as we predicted moments ago, and as Dutch Dagblad warned overnight:
- ECB STOPS MONETARY POLICY OPERATIONS TO SOME GREEK BANKS AS RECAPITALISATION NOT IN PLACE -CENBANK SOURCES
The beginning of the end? Or just more political posturing? In the meantime, EURUSD tumbles.
Did Draghi Just Give Greece The All-Clear To Leave?
ECB
President Draghi just admitted that while the ECB Governing Council
would like Greece to stay, there is a limit to what they will do to save
it and will do everything they can to preserve their 'pristine'
balance sheet - which sounds a lot to us like - 'we are not
lending/printing/supporting your financial system anymore as you are far
too big a risk (and are asset-stripped) and to be honest, it might be
better if you just left - since we have encumbered all your assets anyway'. As a reminder,
when thinking of Europe, the shorthand rule is: assets. And
specifically, the lack thereof. Why is the ECB scrambling to
collateralize every imaginable piece of trash that European banks can
procure at only some valuation it knows about? Simple - quality,
encumbrance and scarcity. When one understands that the heart of
Europe's problem is the rapid "vaporization" of all money good assets,
everything falls into place.Greece: Before And After
In
one of the most fascinating psychological shifts, there has been a
massive shift in the perspective of the Greek electorate since the
election two weeks ago. Almost as if the size of the actual votes for
Syriza, the far-left anti-bailout party, gave citizens 'permission' to
be angry and vote angry. The latest opinion polls, as per Credit Suisse,
show the center-right New Democracy party crashing from 108
seats to only 57 as Tsipras and his Syriza colleagues soar from 52 seats
to a hugely dominant 128 seats. Is it any wonder the market
is pricing GGBs at record lows and 'expecting' a Greek exit from the
Euro as imminent given the rhetoric this party has vociferously
discussed. On the bright side, the extreme right Golden Dawn party is
seen losing some of its share. As UBS notes, "expressions of frustration
in debtor countries have their analogue in creditor countries as well.
No one is happy with the status quo." Still, how Europe's political
leaders address voters' grievances will go a long way to determining
the fate of the Eurozone and, quite possibly, the course of European
history in the 21st century. Europe's politicians will undoubtedly prevaricate and deny. The troika will, with minor modifications, probably insist on 'staying the course'. Yet it seems to us that ignoring clear voter demands for change might well be Europe's worst choice.Rupee: Oversold In the Near Term
Admin at Marc Faber Blog - 12 minutes ago
Rupee seems to be oversold in the near term. - *earlier today on NDTV*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Follow the Money Not Intentions
Eric De Groot at Eric De Groot - 34 minutes ago
The recipients of free money are rarely those originally targeted by the
policy. That's how it works. As Jim often says QE will approach infinity
(because it must), redirection and abuses will become the norm rather than
the exception. Headline: Needy States Use Housing Aid Cash to Plug Budgets
Hundreds of millions of dollars meant to provide a little relief to the
nation’s struggling...
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content, and more! ]]
Stock Market Outlook
Admin at Jim Rogers Blog - 1 hour ago
Jim Rogers shares his bearish outlook on stocks with CNBC`s Maria Bartiromo.
Related: S&P 500 Index ETF (SPY), Dow Jones Industrials, Nasdaq 100 Index,
IShares Emerging Markets 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.*
If Someone Really Wants To Take Speculative Positions...
Admin at Marc Faber Blog - 2 hours ago
If someone really wanted to take speculative positions, he should look to
quality non-financial stocks in countries such as Spain, Italy, France,
Greece, and so forth. - *in The Globe and Mail*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
If Greece Exits The Eurozone, Markets Will Rally
Admin at Marc Faber Blog - 2 hours ago
"Markets are down because of the economic slowdown in China; they will
rally if Greece exits the Eurozone" - *in NDTV* *Marc Faber is an
international investor known for his uncanny predictions of the stock
market and futures markets around the world.*
Greeks Withdraw Nearly $1 Billion From Local Banks
Eric De Groot at Eric De Groot - 3 hours ago
The market is demanding liquidity while policies and politician counter with austerity. The mismatch in expectations is eroding confidence both on a domestic and international scale. Headline: Greeks Withdraw Nearly $1 Billion From Local Banks Greek depositors withdrew 700 million euros ($900 million) from the nation's local banks recently, said President Karolos Papoulias, though the exact... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Today’s Items:
First…
European Leaders and Financial Markets Braced for Greece Exit from Euro
http://www.guardian.co.uk
European Leaders and Financial Markets Braced for Greece Exit from Euro
http://www.guardian.co.uk
Here we go folks, Greece has essentially
been handed its hat and coat and the door is being opened to exit.
Politicians, after two years have come to the conclusion that many in
the alternative media have already come to. There is no saving Greece,
or the Euro, in the present framework. With that said, thanks to other
nations like Spain, Italy and France, the EU is doomed.
Germany’s Bundesbank confirmed that the
German gold reserves are held overseas by the Federal Reserve. Well,
they can kiss that good-bye. Benji Bernanke probably sold that a long
time ago. After all, for him gold is a tradition; thus, if you have
physical gold, there is a good chance, you may have some of that German
gold Reserve.
All key indicators of China’s money
supply are flashing warning signs. What seems clear is that China’s
economy did not bottom out as expected in the first quarter and is in
deflation. China’s central bank, with others, could begin turning up the
presses to counteract the deflation with quantitative easing.
Only 63.6 percent of the U.S. working age
population is now in the labor force, the lowest level since December
1981. 342,000 workers had stopped looking for work in April. The number
of Americans of working age not in the labor force grew in April from
87,897,000 to 88,419,000. And the Recovery before the election
continues!
1. Increased demand from both countries and individual investors
2. The emergence of Chinese silver futures
3. Manipulation of silver will come to an end against the open market.
2. The emergence of Chinese silver futures
3. Manipulation of silver will come to an end against the open market.
1. Unclean or no water
2. Lack of food
3. Unreliable or no communications
4. forget about any extended traveling
5. Groups of non-preppers preying on the vulnerable.
All this, and more, for those who prefer to believe the fantasy of the mainstream media.
2. Lack of food
3. Unreliable or no communications
4. forget about any extended traveling
5. Groups of non-preppers preying on the vulnerable.
All this, and more, for those who prefer to believe the fantasy of the mainstream media.
Publicly funded pensions and Medicare are
two examples of unsustainable systems that will go away in the decade
ahead. Yes, promises were made from everyone from Washington to U.S.
cities; however, they were made in a vacuum, void of common sense, and
reality has seeping in. The only true retirement a person may have in
the very near future is the one they can put their hands on today…
Specifically, commodities like silver and gold; thus, keep stacking.
Rumor Time: Stocks, EUR Surge On Renewed LTRO 3 Speculation
Now that we have entered the summer phase of 2012 it is time to recall how the summer of 2011 ran: in a nutshell - unsubstantiated rumor emerges usually one involving central banks being "generous", sending stocks higher, rumor is then denied a few hours later, but the ramp persists. Sure enough, it has begun anew (because 2012 is 2011). Minutes ago we got the first such instance, where a European "think tank" came up with the brilliant conclusion that any minute now the ECB will be dragged back into the fray, announcing either LTRO 3 (because it will be different this time), or after 9 weeks of inactivity, the ECB's SMP program will resume buying plunging peripheral bonds. Any factual basis to this? Of course not. But once the algos pick up the headline and create buying momentum for the sake of buying momentum, it is all uphill from there. So just as the market was on the verge of turning red for the day, the "think tank" appeared. Prepare for many more such short covering instances, because there really is nothing else left in the status quo arsenal.
Art Cashin On Ostrich Rallies, ATM Lines And MOC Bluffs
You saw it all unfold here blow by blow yesterday. Now Art Cashin gives the post-mortem.Ira Sohn 1 Year Post-Mortem: Absolutely Abysmal
Today begins the 17th annual pilgrimage of hedge-funders near and far to the Ira Sohn conference, where some of the "best and brightest" share their top picks with everyone else in an attempt to generate a buying (or shorting) frenzy and more hedge fund hotel traps. Sadly, this is what to many passes for alpha these days. Yet does the Ira Sohn conference actually lead to any outperformance? Well, Absolute Return has compiled the 1 year return of the recommended investments from last year's conference. The results are absolutely abysmal. Which makes us wonder if the time of groupthink has peaked, and instead the time to fade absolutely everything to come out of such conferences, where analysts pretend to do homework by piggybacking on others' often times very, very wrong research, and which confuse beta expansion with alpha, has come.Global Systemic Risk Soars To 5 Month Highs
Only
two weeks ago, we noted that the 30 most systemically important
financial institutions in the world were seeing risk surging to 3-month
highs. Today has seen that eclipsed dramatically as the credit risk of these entities soars to the year's worst levels jumping 22% in the last two weeks alone.
At 264bps, we are now close to the 3/9/09 peak crisis levels (of
274bps) and pushing up to the Q4 2011 peaks over 300bps as every region
is deteriorating systemically - with the US and Europe worst (US below
previous peak levels but Europe at record wides), Asia accelerating
wider, and even the Aussie banks now losing it. While markets
are staging a mini-recovery this morning, financials are not really
participating as this index of global systemic risk has now retraced all
of the LTRO benefits.Mark Grant On Europe's Plan B, Greek Bank Runs, and Why We Need New Sunglasses
If
indications become reality then we are faced with a leftist government
in Greece that will either renegotiate a new bailout agreement with
Europe or it will head back to the Drachma or be forced there by the
refusal of European Union to provide any additional funds. In Spain we
are faced with bare bones arithmetic where the country cannot bailout
its Regional debt and its back debt because they do not have the
capital to do either; much less both. Both countries can flop
about for a brief period of time but the conclusions are unavoidable we
are afraid and so a very unpleasant landscape awaits us in the coming
days. We have warned about all of this for quite some time and
we have hammered upon it in recent days as equities, credit/risk
assets, the Euro have all declined in value as I had predicted. There may well be a bounce or two along the way but we continue to maintain that dark days lie ahead
based not only upon fundamentals but based upon a union in Europe that
has been deceptive in presentation and deceitful in practice.Housing Starts Beat, Permits Miss; Both Crawl Along Record Bottom
Following
several months of permits rising even as starts flatlined, today we
get the opposite, as forward looking construction came weaker than
expected, with permits printing at 715K on expectations of 730K, while
starts coming ahead at 717K on expectations of 685K. Completions soared
as backlogs caught up with inventory started and under construction.
Really, that's all one can say about these two series, who long-term
charts can be seen below. What can one say but crawling at the bottom,
and increasing modestly courtesy of trillions in fiscal and monetary
stimulus, and as of recently full-blown mortgage debt forgiveness
courtesy of this country's desperate administration to get some
traction in at least one metric of economic improvement.Dart 1: Greece 0; And Just Desserts For Lemming PSI Participants
Two
months ago, to much fanfare, Greece and the IIF announced what a
smashing success the forced cram down that was the Greek PSI (memories
of GM and Chrysler should be flooding back here) was. The thinking went
that Greece avoided bankruptcy, co-opted lemming creditors avoided
pursuing what is rightfully theirs in exchange for a 75% haircut, hold
out hedge funds would be blown out of the water for daring to not go
with the herd of 96.6%, but most importantly, Europe was saved!
Today, Europe is no longer saved, and all those hedge funds that
folded like cheap lawn chairs in agreeing to Europe's extortion are
getting annihilated, because as the chart below shows, the NEW Greek
bonds have now seen their dollar price cut in half since the PSI. Which means that total looses on original Greek debt, for those who did agree to the PSI's arm-twisisting terms are now about 90%.
Just desserts. But what happened to those other few who followed our
advice, bought UK-law bonds, and told the group to shove it? Here's
what...Daily US Opening News And Market Re-Cap: May 16
European equities are seen lower across the board with the exception of the CAC-40 index as markets remain nervous towards the prospect of a second wave of Greek general elections. The outperformance of the CAC-40 follows the news from oil major Total, who have stemmed the gas leak from their Elgin well successfully after conducting intervention. As such, Total are seen higher by over 2%, strongly above the Oil & Gas sector. The Bank of England have released their latest projections for the UK economy, revising lower their growth forecasts and higher their near-term inflation expectations, alongside analyst forecasts. The BoE have stuck to their long-term predictions that there will be a slow but steady return to recovery, but reiterated that major downside risks exist from Europe. Governor King’s subsequent press conference has shown him to remain somewhat dovish, commenting that an increase in downside risks would prompt the bank to commit to further actions, leaving the door to a boost in asset purchases open. The forecast revisions prompted a sharp move lower in GBP/USD, falling around 75 pips and Gilt futures moving 55 ticks to the upside after the opening comments. At the midpoint of the session, GBP/USD remains in negative territory despite seeing support before the inflation report after better than expected UK jobless claims data.Soros, PIMCO, Paulson, Texas Teacher Retirement Fund Buy Gold in Q1
Billionaire investor George Soros significantly
increased his shares in the SPDR Gold Trust in the first quarter. Soros
Fund Management nearly quadrupled its investment in the largest
exchange-traded gold fund (GLD) to 319,550 shares - compared with 85,450
shares at the end of the fourth quarter. John Paulson maintained his
large stake, the ETF’s largest stake and other large and respected
institutional buyers were PIMCO and the Teacher Retirement System of
Texas. Paulson, 56, who became a billionaire in 2007 by betting against
the U.S. subprime mortgage market, told clients in February that gold
is a good long term investment, serving as protection against currency
debasement, rising inflation and a possible breakup of the euro. Eric
Mindich’s Eton Park Capital also bought 739,117 shares in the SPDR
Gold Trust during the first quarter. The New York-based fund held no
shares of the exchange-traded product as of December 31. Overall
holdings in the SPDR Trust rose just over 8% in the first quarter, after
a 2% gain in Q4 2011.
Frontrunning: May 16
- Facebook's selling shareholders can't wait to get out of company, increase offering by 25% (Bloomberg)
- Boehner Draws Line in Sand on Debt (WSJ)
- Romney Attacks Obama Over Recovery Citing U.S. Debt Load (Bloomberg)
- BHP chairman says commodity markets to cool further (Reuters)
- Merkel’s First Hollande Meeting Yields Growth Signal for Greece (Bloomberg)
- Greek President Told Banks Anxious as Deposits Pulled (Bloomberg)
- EU to push for binding investor pay votes (FT)
- Martin Wolf: Era of a diminished superpower (FT)
- China’s Hong Kong Home-Buying Influx Wanes, Midland Says (Bloomberg)
- U.N. and Iran agree to keep talking on nuclear (Reuters)
- US nears deal to reopen Afghan supply route (FT)
Overnight Sentiment: More Of The Same
Overnight: just more of the same, as markets collapsed, first in Asia, then in Europe, on ever more concerns what a Greek exit would do to Europe. The most important story of the night was a report in Dutch Dagblad claiming that ECB has turned off the tap for Greek bank liquidity: "At the end of January, Greek banks had received EUR73 billion in liquidity support from the ECB, but this amount has dropped by more than 50% now, according to the newspaper. The ECB is cutting back support because Greece has been holding off on recapitalizing its banking system, despite receiving EUR25 billion in funds for that purpose, the paper says." Whether this move is to force Greece to blink (even more) by making the previously reported bank run even more acute, or just general European stupidity, is unclear but it is certain to make the funding stresses across all of Europe far more acute. The news sent all peripheral bond yields soaring, and the EURUSD tumbling to under 1.27 briefly.Unless donations increase dramatically($10.00 this year)...
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