Another Late Day Dumpfest Ends Worst Thanksgiving Week Ever For Stocks

UPDATE1: Oil is rallying (at $97) back towards the day's highs as EUR is back near the week's lows (1.3220).
UPDATE2: Major Financials dropped after hours (MS -0.15% on the day)
Stocks plunged at the close for the third day in a row to cap the worst Thanksgiving week ever. US equities seemed in a world of their own for much of the day - especially financials - as all the hope and rumors faded and clearly a large number wanted to be flat or short into the weekend. Across a broad basket of risk assets (CONTEXT), today's equity rally and selloff was pure emotional overshoot and correction as we closed back at reality. What has been most notable this week - particularly the last day or so, has been the sell-off in Treasuries. The concerns that European entities are repatriating anything and everything should be very worrisome and the volume into the ES close suggests that fear is growing. As Peter Tchir noted, it is increasingly evident that the only logical conclusion is that we are further away from a solution or agreement in Europe than we have been in a long time.

Venezuela Gets First Shipment Of Physical Gold Today

Back in August, the news that Venezuela ruler Hugo Chavez had decided to repatirate his gold from London vaults made headlines and was one of the key catalysts sending gold to its all time highs north of $1900/oz. Since then the story died down with no updates. Until today: Bloomberg has reported that Venezuela will receive the first shipment of gold reserves being repatriated from U.S., Canadian and European banks today. "Chavez, speaking on state television, said that the bars will be escorted to vaults in Venezuela s central bank by the military after arriving by air to the South American country. The gold that was over there in England will soon be arriving,  said Chavez.  The opposition says that I'll put the gold in the presidential palace or give it away to Cuba or something. This gold is going back to where it should have never left -- to the Central Bank of Venezuela. Chavez, a former paratrooper and self-professed socialist, in August ordered the central bank to repatriate $11 billion of gold as a safeguard against volatility in financial markets." Will Chavez demonstrate phenomenal foresight having collected his gold just months ahead of Europe falling into the abyss of a toxic debt spiral or were his worries unfounded? It remains to be seen. However, he will probably sleep sounder knowing that his gold is no longer in the vaults of the LBMA, HSBC, or several hundred feet under the New York Fed. That is, of course, if the "presidential palace or Cuba or something" ends up having real 999 gold, and not just several blocks of Tungsten with a pretty plating on top.

Just A Holiday Reminder - Black Friday Is Utterly Meaningless

You know the economy and stock market are in deep trouble when the Mainstream Media elevates one essentially meaningless metric to "The One Meaningful Statistic" and then trumpets it slavishly. One such meaningless metric is Black Friday. The Media has glommed onto Black Friday for a number of flawed reasons, number one being the MSM's ceaseless drive to reduce all complex problems down to something that can be expressed in a sound-bite voiceover and a video clip of a crowded mall. The MSM loves binaries: two parties, two final contestants, and if Black Friday is "good," i.e. sales exceed last year's consumerist bacchanal, then the economy is "healthy." Any weakening of the consumer's lemming-like drive to buy, buy, buy means the economy is "weak." This is of course absolutely backward: consumers buying shiploads of poor-quality crap made overseas means the economy is still on the slippery slope to implosion, as debt is being used to fund consumption while capital formation (savings) remains pathetic. Since most of the crap (and it is crap--most Americans have either forgotten what actual quality is or they have never experienced it) is made overseas, the "boost" to the economy generated by rampant charge-card consumption flows to only one slice of the the U.S. economy: corporate profits.




Richard Koo - Europe in a Balance Sheet Recession - Time for QE

Posted by: South of Wall Street

Post date: 11/25/2011 - 09:56

Richard Koo thinks Europe needs to announce QE 

 

 

 

 

News That Matters

Though CME Group Guarantees, There Are No Guarantees: Gerald Celente

The Trends Journal has uncovered critical information that – in light of the MF Global bankruptcy – casts doubt on the fitness of CME Group to serve as a trustworthy derivatives and commodities exchange, and on the credibility of its Executive Chairman, Terence Duffy.

Not only has the scandalous MF Global bankruptcy (the eighth-largest in US history) wreaked financial havoc on thousands of individuals, it has single-handedly destroyed faith in the commodity markets. CME's reputation as the financial Rock of Gibraltar, upon which the commodity markets are anchored, has now been undermined. By its recent actions, CME's claim of being committed to guaranteeing the transactions undertaken by its members has been called into question.

 The link is here.

Europe's Debt Crisis: Can gold save the eurozone?

With no end to the eurozone debt crisis in sight, there has also been no end to the stream of possible solutions. The latest involves using gold as collateral.

With eurozone central banks holding some 64% of the world's gold reserves, they'd have the heft to back that up.

And there is some precedent, though that was largely during the pre-euro era. So it is unclear what legal hurdles might need to be overcome to satisfy all 17 euro-area nations.

But assuming those challenges could be addressed, experts see it as a real win-win possibility.

the link is here.

Andrew Bailey: 'UK banks must brace themselves for euro break-up'

Andrew Bailey, deputy head of the Prudential Business Unit at the Financial Services Authority (FSA), noted that British banks are not heavily exposed to the eurozone, but said they must prepare for some countries to exit the single currency – or a complete break up.

"We cannot be, and are not, complacent on this front," Mr. Bailey said. "As you would expect, as supervisors we are very keen to see the banks plan for any disorderly consequence of the euro area crisis.

"Good risk management means planning for unlikely but severe scenarios and this means that we must not ignore the prospect of a disorderly departure of some countries from the eurozone.

 the link is here.

Death of a currency as eurogeddon approaches

The defining moment was the fiasco over Wednesday's bund auction, reinforced on Thursday by the spectacle of German sovereign bond yields rising above those of the UK.

If you are tempted to think this another vote of confidence by international investors in the UK, don't. It's actually got virtually nothing to do with us. Nor in truth does it have much to do with the idea that Germany will eventually get saddled with liability for periphery nation debts, thereby undermining its own creditworthiness.

But there comes a point in every crisis where the consensus suddenly shatters. That's what has just occurred, and with good reason. In recent days, it has become plain as a pike staff that the lady's [German Chancellor Merkel] not for turning.

the link is here.

Bank of America Swaps Soar to Record

The cost to protect Bank of America Corp. debt surged to a record and a benchmark gauge of U.S. corporate credit risk climbed to a seven-week high as Europe's sovereign fiscal crisis intensified.

The Markit CDX North America Investment Grade Index of credit default swaps, which investors use to hedge against losses on company debt or to speculate on creditworthiness, added 5.9 basis points to a mid-price of 146.4 at 4:57 p.m. in New York, the highest since Oct. 4, according to Markit Group Ltd.

The contagion is obviously spreading to the U.S. now...and it won't be long before the world's entire financial system is infected. There is no way out of this except via the printing press, or its electronic equivalent.

The link is here.

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