Forget The "Bazookas": Here Come The "Tomahawks" And "Howitzers" - An R-Rated Walk Thru The Greek Endgame
"So lets "run" through the mechanics of a Greek bank run. ... The
end is of course ECB printing, Eurobonds and every developed market
central bank dumping massive liquidity into the global financial
markets as systemic risks rise - QE, LTROs, Currency swaps, and every funding facility under the sun come into play. The path to this end game will be bumpy, but make no mistake, the
developed market central banks will dump so much fiat on the system to
cover the losses, that risk free real rates will plummet to levels so
negative that anyone left holding cash or cash equivalents will see
massive destruction of real wealth. We may have to push risk assets a bit lower from here, but the global central banks will be firing howitzers and tomahawks very shortly, not bazookas!"
05/21/2012 - 14:28
The Benefits Of A College Education
... Are what again? As the following graphic from IBD demonstrates,
for the first time in history, a majority of jobless workers over 25
have attended some college, and now outnumber those without a job who
simply have a high school diploma or less. But at least those in the
fomer category have tens of thousands of non-dischargeable debt to show
for it.
Europe finally awakes from its utopian dream … Let’s say this again, just in case a single sentient being on the planet has missed it: Germany cannot simply decide to bail Greece (or Spain, or Italy, etc) out of its debts. OK? However much Angela Merkel is nagged, berated, bullied and patronised by Barack Obama, David Cameron, or the BBC/Guardian axis that regard the preservation of the euro project as critical to their own interests, she cannot just revoke, in a unilateral act, the rules of German government or of the Bundesbank. Her persistent refusal to “take decisive action” of the kind that would suit the purposes of all those clamorous voices at the G8, is not “dithering”, as it is so often described. In fact, it is not (or not entirely) to be explained in any of the mildly contemptuous ways that her tormentors suggest. It does not arise from an unthinking, superstitious terror instilled in her by the Weimar nightmare of hyper-inflation. Nor is it a narrow-minded expression of the German hausfrau’s values of thrift and self-discipline. What Mrs Merkel is doing, quite appropriately, is defending the integrity of her national constitution, the economic principles on which her country’s economic success has been built, and the interests of her own electorate. – Janet Daley/UK Telegraph
Dominant Social Theme: It is time to go.
Free-Market Analysis: Someone in the mainstream press has finally written the evident and obvious truth about the Eurozone: Angela Merkel does not have it in her power simply to declare a new pan-European empire.
Read More @ TheDailyBell.com
by Jennifer Mann, St. Louis Today:
The Safe Deposit Company in Frontenac is being sued by a Nevada man
who says $260,000 worth of gold coins that he kept there disappeared.
Just when the gold coins went missing is a mystery. What is known is that Barry Thalden began leasing a safe deposit box at the company two decades ago, storing a mix of U.S. gold coins and ones from South Africa called Krugerrands.
In the lawsuit filed Wednesday in St. Louis County Circuit Court, Thalden claims he never terminated the lease or removed the coins from the lock box.
Read More @ stltoday.com
The Safe Deposit Company in Frontenac is being sued by a Nevada man
who says $260,000 worth of gold coins that he kept there disappeared.Just when the gold coins went missing is a mystery. What is known is that Barry Thalden began leasing a safe deposit box at the company two decades ago, storing a mix of U.S. gold coins and ones from South Africa called Krugerrands.
In the lawsuit filed Wednesday in St. Louis County Circuit Court, Thalden claims he never terminated the lease or removed the coins from the lock box.
Read More @ stltoday.com
The Heroic And Brave Mogambo (THABM)
Richard Daughty, a.k.a., 'The Mogambo Guru' at Mogambo Guru Report! - 1 hour ago
I woke up alone in the Mogambo Bad Mood Bunker (MBMB), drenched in sweat,
exhausted from tossing and turning all night, tormented by the same
horrific nightmare.
It's the age-old horror story where vast hordes of desperate, starving
people cannot afford to buy food because prices are so high and rising so
fast, all because their idiot central bankers are creating so much excess
money that the economy gets twisted by odious mal-investments and ruinous
inflation in prices into a cancerous economic grotesquerie, and then the
people had nothing to eat except dead people, and then they... more »
Whistling Pass the Proverbial Graveyard
Trader Dan at Trader Dan's Market Views - 2 hours ago
Remember when you were a little child and had to walk past a graveyard or
cemetery on the way home? The process was rather unnerving particularly if
it was in the evening. So along comes the advice of your seniors..."Just
strike up a pleasant tune and whistle it out loud. It will perk you up and
chase away any fears".
I got the distinct impression that this is what occurred in today's S&P 500
futures pit. Oh I know what the "perma bulls" will tell us. "Equity prices
had gotten too cheap. The economy is not as bad as the stock markets are
indicating" and so on and so on. But the "whi... more »
G8 group hound Germany for Eurobond by ECB/Tax receipts for Greece tourism fall below 10 billion euros/China defaulting on iron ore shipments and thermal coal/
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 1 hour ago
Good
evening Ladies and Gentlemen:
Gold closed down by $3.20 to $1588.40 Silver fell by 39 cents to
$28.30.
In the access market right now:
gold 1592.40
silver: $28.47
Late Friday night, we learned that the CFTC's enforcement arm was
undergoing a probe on the trading practices of JPMorgan with respect to
its derivatives, something that is within the jurisdiction of the CFTC.
Bloomberg also
Something
different today. A dip was bought and kept a little momentum - aided
and abetted by some late-afternoon desperation EUR buying
correlation-help which dragged the Dow back over the magical 12,500
level. Stocks and high-yield credit bounced nicely
today - with the latter dragging the former higher from what we could
tell (on the back of reversion to fair-value in the ETF and credit
market) - as the rest of risk-assets were generally stable. AAPL
rotation (making yet another one of its 9-plus % drops-and-pops) helped
drag NASDAQ up while FB dragged the entire social media segment down.
Financials, while up as a sector, were ugly in the majors with JPM joining Citi and MS in the red YTD
now and BAC back to 4 month lows. Gold was unch and silver down as Oil
and Copper jumped (with the former testing $93 at the close).
Treasuries were practically unchanged from Friday's close but the
long-end rallied the most from its opening levels last night and the 2s10s30s curve was a significant risk-on driver. Stocks were on their own though when we look at Treasuries, the USD, and gold as it appears the credit compression arbs were enough to pull stocks up and AUD and EUR strength
into the close was interestingly aggressive - short-squeeze or does
someone know something? Heavy and large size volume into the close
suggests it was another ramp to provide exits - and credit indices needed to shed some 'cheapness'
- though we remember that Europe is due to open in 10 hours. VIX
tumbled over 3 vols but remains above 22% with the term-structure fo vol
still steep.
Over the weekend we presented a
very sophisticated, bottoms-up, trade-level analysis of the Facebook
IPO debacle courtesy of Nanex. Now that the $38 underwriter-supported
price has been breached with gusto, and absolutely anyone and everyone
who bought into the Facebook IPO and still holds the stock as of market close has suffered major losses, here is a far more simplified, grass-roots, animated Facebook post-mortem for the 'rest of us'... many of whom likely are nursing 10-20% losses in the span of 48 hours.
Click here to visit Trader Dan Norcini’s website…
Dear CIGAs,
The following article appeared today on Reuters which is well worth your read. In a move that illustrates the growing clout of China, approval was granted by the US Government for it to bid DIRECTLY through the auction system of the US Treasury, completely bypassing the PRIMARY DEALER BANKS.
My guess is that the Chinese were sick and tired of being front-run by these unscrupulous banks and issued a stern but quiet demand to either allow them to go this route, OR ELSE!
This further underscores the fact of the growing economic clout of China and just how utterly dependent our nation has become on its funding of our outrageous and downright contemptible indebtedness.
Exclusive: U.S. lets China bypass Wall Street for Treasury orders By Emily Flitter
http://www.reuters.com/article/2012/05/21/us-usa-treasuries-china-idUSBRE84K11720120521
NEW YORK | Mon May 21, 2012 3:35pm EDT
NEW YORK (Reuters) – China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
Link to full article on Trader Dan’s website…
Jim Sinclair’s Commentary
JPMorgan unit has $100bn of risky bonds By Sam Jones in London and Tracy Alloway and Tom Braithwaite in New York
The unit at the centre of JPMorgan Chase’s $2bn trading loss has built up positions totalling more than $100bn in asset-backed securities and structured products – the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives which led to the losses and have mired the bank in regulatory investigations and criticism.
The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.
The bank has said its derivative activities were intended primarily to help balance risks on its overall balance sheet, but the revelation that it has built up other large, risky positions is likely to raise further questions about the CIO’s remit.
A spokesperson for JP Morgan declined to comment.
The CIO sprang into the spotlight with the revelation of more than $2bn in losses on the complex derivative trades, a turn of events that has triggered a Department of Justice investigation and angered US lawmakers.
More…
Jim Sinclair’s Commentary
Germany isolated as Latin Bloc calls the shots
The eurozone’s ‘Latin Bloc’ is in full revolt. The trio of French, Italian, and Spanish leaders – backed by world powers – are to push for a radical shift in Europe’s economic strategy at crucial summit on Wednesday. By Ambrose Evans-Pritchard, International business editor
7:05PM BST 21 May 2012
The package of measures includes an EMU-wide guarantee of bank deposits aimed at halting a slow bank run across southern Europe, as well as demands for full activation of the European Central Bank as a lender of last resort.
They will propose eurobonds to finance an infrastructure blitz, a sort of Marshall Plan to revive confidence even if long-term benefits will take years to feed through.
While the moves are couched in diplomatic language, the clear aim of French premier François Hollande, Italian premier Mario Monti, and Spanish premier Mariano Rajoy is to wrest control of the EU’s governing machinery from Germany.
Mr Monti said over the weekend that Mr Hollande’s "entry into the game" had changed Europe’s political dynamics. He has an ally "on the same wave-length".
This is clear already in a spat over the next chief of the Eurogroup, the powerful club of EMU finance ministers. Mr Hollande is balking at the coronation of German finance minister Wolfgang Schaeuble. "It is a litmus test. Hollande is flexing his muscles, showing that he is willing block the man seen as Europe’s symbol of austerity," said Mads Persson from Open Europe.
More..
Greg Hunter’s USAWatchdog.com
Dear CIGAs,
The meeting, this week, in Iraq to negotiate Iran’s nuclear program will decide whether or not the world will go to war. The meeting is between the East (Iran, China and Russia) and the West (U.S., UK, France and Germany). If the meeting goes well, war will be avoided. If the meeting goes badly, the world will be heading for war. If yesterday’s CNN interview with Iran’s Finance Minister, Shamseddin Hosseini, is any indication, the upcoming meeting will be a disaster. When asked if Iran would allow inspectors to scrutinize all its nuclear facilities, Hosseini said, “There are conversations and dialogues taking place currently, but there cannot be a hegemony and a double-standard in the treatment of member countries such as Iran. If these principles can be understood and applied with mutual respect, I think we will be in a much better place. If we don’t, we will witness an increase in international oil markets.” (Click here to see the complete CNN story.) In other words, he sidestepped the question and gave no indication total access by inspectors would be a possibility.
The Iranian’s have long maintained their nuclear program is for the peaceful production of energy, but the West thinks otherwise. After the G-8 meeting this weekend at Camp David, it was reported by Haaretz.com, “The G8 expressed “grave concern” about Iran’s nuclear program, which is suspected of being used to develop nuclear weapons, and called on Iran to “seize the opportunity” of the next round of meetings.” The elephant not in the room remains Israel who is most fearful of the Iranian nuclear program. After the last meeting in April when only another meeting was agreed upon, Prime Minister Benjamin Netanyahu was clearly annoyed. On Friday, his comments on the upcoming meeting in Iraq were less than optimistic when he said, “No evidence that Iran is serious about stopping its nuclear weapons program. They may try to go from meeting to meeting with empty promises. They may agree to something in principle but not implement it. They might even agree to implement something that does not materially derail their nuclear weapons program.” (Click here for the complete Haaretz.com story.)
An even tougher round of sanctions will kick in in July, and the U.S. Senate is preparing a fresh round of new sanctions. According to Iran’s Finance Minister, Shamseddin Hosseini, the current sanctions are not working, and new ones could backfire in the Western world’s face as Europe is in a worsening debt crisis. Additional sanctions will put upward pressure on oil prices, and that will sink already troubled Western economies. Hosseini quoted recent comments by the International Monetary Fund when he said, “. . . as a result of these sanctions, oil prices will perhaps reach and hover around $160 per barrel.” If there is an all-out attack, then $160 per barrel will look downright cheap. Many think Israel cannot attack without the help of the United States. Others think no attack could possibly come until after the November presidential election because spiking oil prices would kill the economy and President Obama’s bid for reelection. What if those assumptions don’t hold up?
More…
Please support our efforts to keep you informed...
I'm PayPal Verified
Stocks Bounced As Financials, Socials Trounced
Something
different today. A dip was bought and kept a little momentum - aided
and abetted by some late-afternoon desperation EUR buying
correlation-help which dragged the Dow back over the magical 12,500
level. Stocks and high-yield credit bounced nicely
today - with the latter dragging the former higher from what we could
tell (on the back of reversion to fair-value in the ETF and credit
market) - as the rest of risk-assets were generally stable. AAPL
rotation (making yet another one of its 9-plus % drops-and-pops) helped
drag NASDAQ up while FB dragged the entire social media segment down.
Financials, while up as a sector, were ugly in the majors with JPM joining Citi and MS in the red YTD
now and BAC back to 4 month lows. Gold was unch and silver down as Oil
and Copper jumped (with the former testing $93 at the close).
Treasuries were practically unchanged from Friday's close but the
long-end rallied the most from its opening levels last night and the 2s10s30s curve was a significant risk-on driver. Stocks were on their own though when we look at Treasuries, the USD, and gold as it appears the credit compression arbs were enough to pull stocks up and AUD and EUR strength
into the close was interestingly aggressive - short-squeeze or does
someone know something? Heavy and large size volume into the close
suggests it was another ramp to provide exits - and credit indices needed to shed some 'cheapness'
- though we remember that Europe is due to open in 10 hours. VIX
tumbled over 3 vols but remains above 22% with the term-structure fo vol
still steep. Facebook IPO Post-Mortem For Dummies
Over the weekend we presented a
very sophisticated, bottoms-up, trade-level analysis of the Facebook
IPO debacle courtesy of Nanex. Now that the $38 underwriter-supported
price has been breached with gusto, and absolutely anyone and everyone
who bought into the Facebook IPO and still holds the stock as of market close has suffered major losses, here is a far more simplified, grass-roots, animated Facebook post-mortem for the 'rest of us'... many of whom likely are nursing 10-20% losses in the span of 48 hours.Click here to visit Trader Dan Norcini’s website…
Dear CIGAs,
The following article appeared today on Reuters which is well worth your read. In a move that illustrates the growing clout of China, approval was granted by the US Government for it to bid DIRECTLY through the auction system of the US Treasury, completely bypassing the PRIMARY DEALER BANKS.
My guess is that the Chinese were sick and tired of being front-run by these unscrupulous banks and issued a stern but quiet demand to either allow them to go this route, OR ELSE!
This further underscores the fact of the growing economic clout of China and just how utterly dependent our nation has become on its funding of our outrageous and downright contemptible indebtedness.
Exclusive: U.S. lets China bypass Wall Street for Treasury orders By Emily Flitter
http://www.reuters.com/article/2012/05/21/us-usa-treasuries-china-idUSBRE84K11720120521
NEW YORK | Mon May 21, 2012 3:35pm EDT
NEW YORK (Reuters) – China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury’s first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
Link to full article on Trader Dan’s website…
Jim Sinclair’s Commentary
The huge pile of fraudulent junk called OTC derivatives guarantees QE to infinity, which is debt monetization on steroids.
JPMorgan unit has $100bn of risky bonds By Sam Jones in London and Tracy Alloway and Tom Braithwaite in New York
The unit at the centre of JPMorgan Chase’s $2bn trading loss has built up positions totalling more than $100bn in asset-backed securities and structured products – the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives which led to the losses and have mired the bank in regulatory investigations and criticism.
The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.
The bank has said its derivative activities were intended primarily to help balance risks on its overall balance sheet, but the revelation that it has built up other large, risky positions is likely to raise further questions about the CIO’s remit.
A spokesperson for JP Morgan declined to comment.
The CIO sprang into the spotlight with the revelation of more than $2bn in losses on the complex derivative trades, a turn of events that has triggered a Department of Justice investigation and angered US lawmakers.
More…
Jim Sinclair’s Commentary
Hollande as a game changer, and QE to infinity on the horizon.
Germany isolated as Latin Bloc calls the shots
The eurozone’s ‘Latin Bloc’ is in full revolt. The trio of French, Italian, and Spanish leaders – backed by world powers – are to push for a radical shift in Europe’s economic strategy at crucial summit on Wednesday. By Ambrose Evans-Pritchard, International business editor
7:05PM BST 21 May 2012
The package of measures includes an EMU-wide guarantee of bank deposits aimed at halting a slow bank run across southern Europe, as well as demands for full activation of the European Central Bank as a lender of last resort.
They will propose eurobonds to finance an infrastructure blitz, a sort of Marshall Plan to revive confidence even if long-term benefits will take years to feed through.
While the moves are couched in diplomatic language, the clear aim of French premier François Hollande, Italian premier Mario Monti, and Spanish premier Mariano Rajoy is to wrest control of the EU’s governing machinery from Germany.
Mr Monti said over the weekend that Mr Hollande’s "entry into the game" had changed Europe’s political dynamics. He has an ally "on the same wave-length".
This is clear already in a spat over the next chief of the Eurogroup, the powerful club of EMU finance ministers. Mr Hollande is balking at the coronation of German finance minister Wolfgang Schaeuble. "It is a litmus test. Hollande is flexing his muscles, showing that he is willing block the man seen as Europe’s symbol of austerity," said Mads Persson from Open Europe.
More..
Greg Hunter’s USAWatchdog.com
Dear CIGAs,
The meeting, this week, in Iraq to negotiate Iran’s nuclear program will decide whether or not the world will go to war. The meeting is between the East (Iran, China and Russia) and the West (U.S., UK, France and Germany). If the meeting goes well, war will be avoided. If the meeting goes badly, the world will be heading for war. If yesterday’s CNN interview with Iran’s Finance Minister, Shamseddin Hosseini, is any indication, the upcoming meeting will be a disaster. When asked if Iran would allow inspectors to scrutinize all its nuclear facilities, Hosseini said, “There are conversations and dialogues taking place currently, but there cannot be a hegemony and a double-standard in the treatment of member countries such as Iran. If these principles can be understood and applied with mutual respect, I think we will be in a much better place. If we don’t, we will witness an increase in international oil markets.” (Click here to see the complete CNN story.) In other words, he sidestepped the question and gave no indication total access by inspectors would be a possibility.
The Iranian’s have long maintained their nuclear program is for the peaceful production of energy, but the West thinks otherwise. After the G-8 meeting this weekend at Camp David, it was reported by Haaretz.com, “The G8 expressed “grave concern” about Iran’s nuclear program, which is suspected of being used to develop nuclear weapons, and called on Iran to “seize the opportunity” of the next round of meetings.” The elephant not in the room remains Israel who is most fearful of the Iranian nuclear program. After the last meeting in April when only another meeting was agreed upon, Prime Minister Benjamin Netanyahu was clearly annoyed. On Friday, his comments on the upcoming meeting in Iraq were less than optimistic when he said, “No evidence that Iran is serious about stopping its nuclear weapons program. They may try to go from meeting to meeting with empty promises. They may agree to something in principle but not implement it. They might even agree to implement something that does not materially derail their nuclear weapons program.” (Click here for the complete Haaretz.com story.)
An even tougher round of sanctions will kick in in July, and the U.S. Senate is preparing a fresh round of new sanctions. According to Iran’s Finance Minister, Shamseddin Hosseini, the current sanctions are not working, and new ones could backfire in the Western world’s face as Europe is in a worsening debt crisis. Additional sanctions will put upward pressure on oil prices, and that will sink already troubled Western economies. Hosseini quoted recent comments by the International Monetary Fund when he said, “. . . as a result of these sanctions, oil prices will perhaps reach and hover around $160 per barrel.” If there is an all-out attack, then $160 per barrel will look downright cheap. Many think Israel cannot attack without the help of the United States. Others think no attack could possibly come until after the November presidential election because spiking oil prices would kill the economy and President Obama’s bid for reelection. What if those assumptions don’t hold up?
More…
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