Russell Napier On The End Of Supply & Demand, Bank Nationalizations As An Upside Catalyst, And Relative East Vs West Value

Following up to his must read September 20 presentation from the CLSA economic forum titled "Darkness on the Edge of Town" in which the core topic was the upcoming cliff in the capacity of monetary intervention to impact the economy (something which apparently did not prevent the BOE or the ECB to announce further monetary easing in the subsequent weeks, and which in our opinion will have no impact on the Fed as it eventually sets off on its own merry LSAP path), is the following interview given to Bloomberg TV in which the strategist, previously known for his bold S&P at 400 prediction, in which he defines the new regime as one where supply and demand no longer matter, and all is determined by centrally planning governments across the developed world. The conclusion is that while as a result of failed government policies the developed world stagnates, and the market tumbles, as a result of "earnings not holding up and thus driving stocks lower", it is Asia where any potential growth remains, and as such investors should take their dollar holdings and dump them in India (for example). One last topic was the imminent nationalization of numerous European banks (over and above what happened with Dexia, and the follows up from earlier today, Greek Proton and Danish Max). In some ways, Napier put his finger on today's market pulse when he said that investors will paradoxically like a bank nationalization as it will remove uncertainty if only in the short-term. "It is a very negative long-term thing for Europe" he says, but adds that "speaking to investors at the CLSA economic forum they are so convinced the euro is going to collapse that when it doesn't collapse, the market will probably go up." That said he concludes, "this is a major structural turning point and a bad thing for return on capital in Europe." Oh well, who cares about a year, or a month, or even a week into the future. Career risk is here and it is right now, and one must do precisely whet everyone else does.

 

 

Support Slovakia's Decision To Just Say No To The EFSF

Worried that Slovakia's Freedom and Solidarity party, which now holds Europe, and the endless bailout bonanza by the gonads, will sell out ahead of tomorrow's critical vote which may end the bailout blowout once and for all if Slovakia does not vote the EFSF through? Here is your chance to support SaS leader Richard Sulik - whose recent must read interview with Der Spiegel has gone viral - send him an email at the following address: richard_sulik@nrsr.sk
Because, at the end of the day, no matter what your Ivy (or wannabe Ivy) League professor tells you, more debt does not fight debt.

 

 

Gold and Silver rise/Dexia bank nationalized

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 25 minutes ago

Good evening Ladies and Gentlemen: Today is a holiday in Canada and Columbus day in the USA so trading was very thin. The big news was the carving up of Dexia Bank in Belgium/France and a new plan by Sarkozy and Merkel to save the Euro and Greece which will come at the end of the month...another "plan to plan".  This will not work as the global financial scene will implode. Let us head over to

Dear Reader,

On May 14th, the National Inflation Association released its critically acclaimed documentary 'College Conspiracy', which exposed the U.S. college education system as the largest scam in American history. In a little over 4 months 'College Conspiracy' has received over 2.3 million views and during this time period there have been thousands of articles in the mainstream media discussing the facts that the NIA was first able to expose in the movie. If you haven't yet seen 'College Conspiracy' we highly recommend that you watch it immediately by going to: http://inflation.us/videos.html

At the end of this month, NIA will be releasing the most important economic documentary in world history. This movie will expose how the U.S. is poised to experience hyperinflation next year and how nothing can possibly be done to prevent it. The Hyper-inflationary Depression that is set to hit the U.S. in 2012 will be the most devastating and destructive financial crisis in world history and leave the U.S. as a third-world nation.

The destructive policies of both Obama and Bernanke have made the majority of American citizens dependent on unemployment checks, food stamps, and other government entitlement programs, just to survive. With prices of oil and other commodities dipping in recent weeks, Bernanke now believes that inflation is moderating and that he is now in the clear to print as many trillions of dollars as he deems necessary to get the economy growing again. Bernanke is about to cause the U.S. economy to overdose on excess liquidity. The hyperinflation that will arrive in 2012 will cause all American citizens to see the purchasing power of their incomes and savings disintegrate.

If you would like to be the first to see NIA's upcoming documentary about how hyperinflation will destroy the U.S. economy in 2012, sign-up today for the free NIA newsletter at http://inflation.us

Who Is 'Latour Trading' And How Dare They Upstage Goldman?

As long-term readers recall, the observation of Goldman's dominant presence in the NYSE's weekly program trading reports by Zero Hedge back in early 2009 was one of the key drivers that set in motion the backlash against algorithmic trading and HFT which back in 2009 was the pinnacle of fringe topics and has since become a daily talking point and market scapegoat du jour on days when stocks are down (but never up). It also drew attention to Goldman's prop trading division which Zero Hedge was the first and only vocal opponent of, and has since been demolished courtesy of the Volcker Rule, an event which both Moody's and Alliance Bernstein now say could cost the bank dearly in top and bottom line, yet which Goldman told us on the record "represents approximately 10% of this year’s reported net revenue." Guess it was more, huh... Yet the same NYSE weekly program trading update indicates that Goldman, up until now a monolith in NYSE program trading, has just lost its crown in that field as well. The new king. A firm called Latour Trading, which in the last week traded 484.6 million shares in principal strategies. Which begs the question: just how is this Latour Trading which dares to upstage the firm that does god's work on earth. Alas, their website has been less than forthright. Inquiring minds certainly want to know.

The Latest In The Broken Market Chronicles: Explaining Last Friday's Ridiculous Market Action

On October 7, 2011 beginning at 12:03:39.950, a massive surge of quotes in SPY, IWM, DIA and other market index ETFs, along with many symbols in the Dow Jones Industrial Average, caused an overload in CQS that lasted several seconds. This, in spite of a 25% increase in CQS capacity just 3 days earlier to a whopping 1.25 million quotes/second. During this event, Nasdaq quotes into CQS became delayed at least 800 milliseconds (800,000 microseconds). Other exchange quotes feeding into CQS also became delayed. We found many symbols with trade executions that appeared several hundred milliseconds before the quotes that could have produced them. How does one ensure trade-through price protection if the price being protected hasn't even occurred yet?  Given the evidence from this event, we have to conclude that Reg NMS must have been secretly rescinded: at least the part that talks about trade through price protection, the NBBO (why is it still being computed?), and the importance of keeping the feed affordable.

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 10/10/11

Submitted by RANSquawk Video on 10/10/2011 - 16:23 ETC RANSquawk

Airbus Parent Warns French Banks Having Further Liquidity Issues

A few weeks ago it was Siemens pulling money out of French banks, then it was the Chinese, now it is EADS' (Airbus parent European Aeronautic Defence & Space) turn to warn about French bank liquidity. From Dow Jones: "French banks are experiencing difficulties providing financing for aircraft purchases by airlines, a market that is largely dominated by dollar transactions, Louis Gallois, chief executive of European Aeronautic Defence & Space Co. (EAD.FR, EADSY), said Monday. "French banks clearly have problems financing aircraft purchases," he said, speaking on the sidelines of an event to launch a new French think-tank to promote the French industry. Mr. Gallois's comments come as French banks have indicated that they were planning to cut back on dollar financing, as raising dollars has become increasingly difficult." Not like any of this will come as news to anyone who does not get their news from the mainstream media, but it is something different to see it in practice. Net result: we now finally see why companies are hoarding so much cash on their books - in lieu of an insolvent banking system, they are all becoming their own vendor and customer financing providers! Luckily, a government subsidized EADS is not as insolvent as its peer banks: "EADS is cash rich, and is not faced with any problem when it comes to buying parts in dollars, he said. "We aren't experiencing any dollar shortage," he said, adding that "we know how to deal with it."

So You Think Today's Columbus Day No Volume Squeeze Is Bad...

No, it isn't 2008. It is a pale imitation. At least based on the Columbus Day (yes, bonds were closed then too) rally back in 2008 when the S&P soared by a ginormous 11%. Obviously what happened next was a roughly 40% plunge in stocks over the next several months. Suggesting the same could happen again would be preposterous: after all everyone knows Mars is willing and ready to bail out the world when the time come now that every single central bank is dodecatuple all in on preserving the status quo. Not for nothing, but even Greece recently ran out of ink...





Jim Sinclair’s Commentary

“We face a worldwide banking meltdown."

Jim Sinclair’s Commentary

The tip of a Lehman type iceberg.

Dexia collapse puts European banks in crosshairs Eric Reguly
Published Sunday, Oct. 09, 2011 10:38AM EDT

The weakness of the European banking system came into focus over the weekend as the governments of France and Belgium agreed on a breakup plan for Dexia SA, a lender that had sailed through industry-wide stress tests three months ago only to become the first banking victim of the debt crisis.

The plan to save the Franco-Belgian lender came as French President Nicolas Sarkozy and German Chancellor Angela Merkel met in Berlin to try to hammer out a plan to recapitalize the European Union banks damaged by the crisis. Ms. Merkel said EU leaders would do “everything possible” to ensure the banks have adequate capital.

EU banks have been hurt by waning economic growth and the plummeting values of their sovereign bond holdings. Many banks have been downgraded by ratings agencies and have lost a third to half their market capitalization in the last half-year.

While Ms. Merkel and Mr. Sarkozy professed to be in “total” agreement on the need to bolster the banks’ capital, the lack of details on Sunday suggested that the leaders of Europe’s two biggest economies had yet to reach common ground on the funding method. In a note published before the meeting, economists at ING Bank said, “This time around, it looks trickier to come up with a single straightforward message as there is an increasing awareness that there is no silver bullet to solve the sovereign debt crisis.”

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Jim’s Mailbox

October 10, 2011, at 1:31 pm
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

Peanut Butter Prices Are Rising By 24 to 40 Percent  
CIGA Eric

It doesn’t take much to turn demonstration into riot.

Headline: Peanut Butter Prices Are Rising By 24 to 40 Percent
You can now add peanut butter, a long-time recession staple food item, to the list of things that "the 99 percent" may no longer be able to afford. Thanks to droughts, the price of peanut butter has gone up from $450 a ton to $1,150 a ton in just one year and now peanut butter makers are about to pass on the increased costs to consumers.
The Wall Street Journal reports that wholesale prices for Jif are going up 30 percent beginning in November. Peter Pan will increase its prices by as much as 24 percent in a couple of weeks. Skippy prices are already 30 to 35 percent higher now than they were a year ago, and Kraft Foods Inc., which launched Planters peanut butter in June, is raising its prices by 40 percent on October 31.
Source: clevelandleader.com
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