"Dexia's Funeral Will Be Announced On Sunday" As "Weakest Link" Slovakia Prepares To Bury The Euro

A few days ago we mocked the market's naive belief that a loose union of 17 different countries and hundreds of separate political organizations, each torn by thousands of unique interests and lobby groups, can all agree unanimously in the pursuit of the common monetary (read: banker) good, over that of their own people. Yet that did not stop stocks from enacting the second weekly massive short covering squeeze, in 3 weeks, purely on hype, rumors, innuendo and lies. And just like the last time the market soared by nearly double digits in a few short days, only to plunge when hopes of a quick resolution were mercilessly dashed, Monday has all the makings of another epic risk off day. Because while all it takes is a rumor (of a plan for a plan) to start a squeeze, we are about to get some very nasty actual events which will demand immediate and forceful intervention by the powers that be, something which Europe (and the US) has proven is virtually impossible. The events in question are, as Reuters reports, that i) "Dexia's Funeral Will Be Announced On Sunday" and, as Bloomberg reports, that ii) Slovakia’s ruling Freedom and Solidarity party won’t back the overhaul of the European bailout mechanism after Prime Minister Iveta Radicova rejected the party’s conditions for approval, a lawmaker said. Said otherwise, bonds are currently thanking their lucky stars the bond market is closed because not only will Europe have to deal with the headline risk that the weakest link in Europe, the tiny country of Slovakia, can scuttle the entire second Greek rescue operation, and thus, lead to the expulsion of Greece from the eurozone following its bankruptcy, but this will have to take place as Europe fights the stem the contagion resulting from the collapse and nationalization of the first Greek bank, which nobody, nobody, could have foreseen.





The Unfolding Economic Disaster

Posted by: Phoenix Capital...

Post date: 10/08/2011 - 13:58

It is now clear the US economy has broken down in a BIG way. Indeed, no less than Ben “green shoots” Bernanke has stated that the recovery is “close to faltering.” This, coming from a cheerleader...

Precious Metals continue Range Bound - Ditto for the HUI

Trader Dan at Trader Dan's Market Views - 4 hours ago

Both silver and gold continue putting in wide-ranging price swings on a day to day basis providing plenty in the way of volatility but when the dust is settling at the end of the week, neither metal can escape its range bound trade. What we are witnessing on the price charts is merely the pictorial form of uncertainty that currently is reigning over the minds of traders/investors. The long term bullish trends for both metals remains intact but short term fears over further risk aversion trades and hedge fund long liquidation in the commodity sector is preventing both the bull camp a... more » 

 

 

 

 

 

Fund Blamed For Gold Sell Off, Salida Capital, Tumbles 37% In September, 49% YTD

Last week, a fund rumored to be on deathwatch, was Toronto-based, gold and energy-focused hedge fund Salida Capital (whose gold exposure, in addition to Paulson's, were both factors in the rapid drop in the price of gold last week, following concerns that it was being liquidated in the open market - for more on Salida's gold exposure, read the attached letter). The fund promptly came out and refuted said rumors, however upon review of its monthly P&L, we are somewhat skeptical about its survival chances, even if, in principle, we agree with the fund's investment philosophy. The reason for our skepticism is that Salida was down a whopping 37.2% in September, and 49.4% YTD, a collapse which only compares to that of Paulson's Advantage Plus, and demonstrates vividly just how much of a misnomer the name "hedge" can be when applied to members of the asset management industry. What is worse, however, is that the reason attributed for this epic collapse is amateur hour 101, and any LPs should be far more concerned by the explanation provided for this underperformance than the actual underperformance itself.




Harvey Organ, Saturday, Oct 8, 2011

I will update as soon as available. will be late tonight or early Sunday morning.

In The News Today

October 8, 2011, at 10:57 am
by Jim Sinclair 

 

 

Jim Sinclair’s Commentary

Globalism has its downside. This is quite true.

Major U.S. Banks At Risk If European Debt Crisis Spreads
If European politicians are unable to contain their sovereign debt problems, Wall Street could be on the brink of another financial crisis, according to economists.
Although U.S. banks have limited their direct exposure to Greece, they have loaned hundreds of billions of dollars to European banks and governments that may not be able to pay them back, according to the Bank for International Settlements. If some European governments and banks are forced to default on at least part of their debt, American banks could lose a significant amount of money on that account alone.
The resulting panic from investors could compound the losses. Short-term borrowing costs would spike, bank stock prices would plummet and investors could demand their money from banks, several economists say. In a repeat of the liquidity crisis of 2008, some U.S. banks could run out of the money necessary to fund their day-to-day operations.
"We’ve seen this already," said Jay Bryson, global economist at Wells Fargo Securities. "Some sort of financial crisis in Europe would be enough to finally push the United States economy back into a recession."
Some predict that a European financial crisis would spread quickly to U.S. shores. The pain would not come directly from government defaults; U.S. banks have loaned just $36.2 billion to the five European governments that are in danger of defaulting: Greece, Ireland, Portugal, Spain and Italy. But U.S. banks have also loaned $60.6 billion to banks in those five countries, and $275.8 billion to banks in Germany and France, according to data from the Bank for International Settlements.
A string of sovereign debt defaults would endanger the survival of major European banks, including those in France and Germany, which hold a large amount of troubled sovereign debt on their books, some economists note. According to Bryson, French banks’ exposure to the five European countries that are in danger of defaulting amounts to 25 percent of France’s gross domestic product, and the exposure of German banks to those countries is worth 15 percent of Germany’s total output.
More…

 

 

Jim’s Mailbox

October 8, 2011, at 10:54 am
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

Census: Housing bust worst since Great Depression  
CIGA Eric

The housing bust will get worse before it gets better.
U.S. Median Home Price (MHP) And MHP to Gold Ratio 



Headline: Census: Housing bust worst since Great Depression
New census figures show homeownership over the past decade saw the biggest drop since the Great Depression.
The analysis released Thursday by the Census Bureau found the homeownership rate fell to 65.1 percent in 2010, from 66.2 percent in 2000. That drop-off of 1.1 percentage points after the housing bust is the largest since 1940, when the rate plummeted more than 4 percentage points over a 10-year period, to 43.6 percent.
Analysts say the notion of homeownership as the "American dream" may be changing. Many economists believe the U.S. will never return to its mid-decade peak, in which roughly 70 percent of occupied households were owned by their residents.
Source: businessweek.com
More…





Peter Schiff: U.S. Dollar is the Monetary Titanic










Americans have no choice but to get more frugal




Why We Are Just Half-Way Through The Global Economic Crisis








The Metals Trade: Why I’m Still Really Bullish On Silver




Leaders Push World to Depression




Underwater Mortgages Could Sink US Without a Trace




Banksters Expect Global Meltdown Within 12 Months




Bank of America Website Still Having Problems.




A Job is Becoming a Dim Memory for Many Unemployed




Oil Above $82 on Positive News For Europe Banks




30-Year Mortgage Below 4% For First Time Ever

 

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