Hague Says UK Treasury "Quietly" Preparing For "Contingencies On Euro"
Just a headline for now, but hardly a pleasant one for non Euroskeptics:- Hague tells UK Treasury preparing for contingencies on Euro.
- Preparations under way in a “quiet, assiduous way,” Hague tells CBI conference
Credit Suisse Goes For Broke: Predicts End Of Euro, Escalating Bank Runs On "Strongest European Banks"
Just
because Credit Suisse bankers are people too (even if 1% people, but
still people), and just because they know too damn well that "no ECB
intervention" means "no bonus", and very likely "no job", they go for
broke and join Deutsche Bank, JPM, RBS, and everyone else (but, again,
not Goldman), in predicting the end of Europe unless Draghi does his
rightful duty and remembers that without banker support he will also be
lining up at the jobless claims office very soon. Of course, being a
Goldman boy, Draghi will only do what Lloyd tells him to. Either way,
here is Credit Suisse's rejoinder to the global Mutual Assured
Destruction tragicomedy, which now makes Honk (as Lagarde calls him)
Paulson's overtures to congress seem like amateur hour. "We seem to have
entered the last days of the euro as we currently know it. That
doesn’t make a break-up very likely, but it does mean some
extraordinary things will almost certainly need to happen – probably by
mid-January – to prevent the progressive closure of all the
euro zone sovereign bond markets, potentially accompanied by escalating
runs on even the strongest banks. That may sound overdramatic, but it reflects the inexorable logic of investors
realizing that – as things currently stand – they simply cannot be
sure what exactly they are holding or buying in the euro zone sovereign
bond markets...One paradox is that pressure on Italian and Spanish
bond yields may get quite a lot worse even as their new governments
start to deliver reforms – 10-year yields spiking above 9% for a short
period is not something one could rule out. For that
matter, it’s quite possible that we will see French yields above 5%,
and even Bund yields rise during this critical fiscal union debate." Of course, the explicit message is: help us ECB-Wan Kenobi, you are our only hope. The implicit one is: do it, or we pull the trigger and blow it all up to hell.MF Global Trustee Says Commingling Shortfall May Be Double Previous Estimate, Could Reach "$1.2 Billion Or More"
The day after MF Global filed, we calculated that contrary to widely accepted media expectations that the client theft at MF Global was limited to "only" $600 million, the true client loss (and thus, MF Global executive felony) was in fact up to $1.5 billion. Sure enough, three weeks in the Trustee has come to see things in a comparable light. From Reuters: "The trustee liquidating MF Global Holdings Ltd'sbroker-dealer unit said on Monday that the apparent "shortfall" of customer funds may be larger than the futures brokerage had reported prior to its bankruptcy. "The trustee believes that even if he recovers everything that is at U.S. depositories, the apparent shortfall in what MF Global management should have segregated at U.S. depositories may be as much as $1.2 billion or more," the trustee, James Giddens, said in a statement. He added that the amount could change. Giddens also said he expects in early December to transfer 60 percent of what is in segregated customer accounts for U.S. futures positions, pending court approval. He said the transfer would require $1.3 billion to $1.6 billion to implement, exhausting much of the assets under the trustee's control. MF Global was run by former Goldman Sachs & Co chief and New Jersey governor Jon Corzine before its Chapter 11 filing on Oct. 31. The filing came after the New York-based company revealed that it made a $6.3 billion bet on European sovereign debt. Corzine resigned on Nov. 4." In other news, major Chicago-based exchanges are fine (no seriously: they got some very sweet preferential terms in the account transfer... to the detriment of former MF Global accounts). And it goes without saying that Corzine has not even been questioned yet.Margin Debt Soars By Most Since June 2007 Just In Time For November Market Rout
And
so the wave of beta chasers has once again be caught flat footed.
Following the 11% jump in the S&P, hedge funds, which are now down 2% YTD (more
on that shortly) and getting killed with redemption requests, it was
only natural that in focusing solely on performance and not on
fundamentals, that margin debt would increase. Sure enough, the NYSE has
reported that in October, margin debt jumped by $21 billion, the most since June 2007's $25 billion... just in time for the market rout. And as funds levered up yet again, net
worth, which nets out free credit cash accounts and cash balances in
margin accounts, plunged by $46 billion, the most since the Lehman
collapse which saw net worth implode by $184 billion. And just
as the market ramped for no reason in October, it has now already
retraced almost half the gains in the prior month. Oops.ES -2% As Volume Surges
Submitted by Tyler Durden on 11/21/2011 - 10:01 Bond Derisking Exchange Traded Fund Reality
Equity
and credit markets are in close sync as broad derisking is evident
everywhere. Energy, Materials, and Financials are the underperformers.
HYG, the high-yield bond ETF, is notably underperforming both equity
and high-yield credit spreads as its momentum-chasers exit fast and
professionals find it the easiest / most-liquid instrument for hedging.What's wrong with Europe? - Listen to my new hero Nigel Farage
This is my kind of leader!
http://www.youtube.com/watch?v=ULns-cSUeVs&feature=player_embedded
Gold nearing important technical support level
The $1680 level is an important chart area as it has served to function
both as overhead resistance and as downside support depending on the status
of the gold market at the time that price has neared this area. In today's
session, it is acting as a downside support level thus far holding price
from dropping further as the risk trades are once again taken back off.
Should this critical level fail to stem the decline in gold, price will
fall into the next band of support which is near and just above the $1640
level, a level that also coincides with the rising 150 day exponential
movi... more »
You Heard It Here First:
MF Global trustee: $1.2 billion missingI reported back when this story
first broke about three weeks ago that I had heard from Street "chatter"
that the missing amount of customer money was at least double the $600
million being reported. Now the Truth is leaking out:
*the apparent shortfall in what MF Global management should have segregated
at US depositories may be as much as $1.2 billion or more," the trustee
said in a statement*
Here's the latest: LINK
I can't emphasize this enough: * If you have brokerage and commodity
accounts at big Wall Street firms that are also owned b... more »
D-Wave Analysis Continued
The D-wave analysis (and chart) establishes the window of opportunity for
time and price in gold; COT money flow analysis confirms it. Waiting for a
second, maybe third spike in the Concentration Index. Gold London P.M Fixed
and Concentration Index (CI): 1 = Bullish Setup, -1 = Bearish Setup Fred
makes some observations, Hi Eric, Thanks for posting the chart. Just my
20cents. Just a back...
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content, and more! ]]
China`s Inflation: The Truth Is Somewhere Between 12 Percent And 15 Percent
Don’t believe China’s consumer price index stands only at 5 percent. The
truth is somewhere between 12 percent and 15 percent...
The real-estate bubble is so evident that Chinese property shares are very
weak as the volume of real-estate transactions goes down and prices fall. -
*in Taipei Times*
*Tickers, iShares FTSE/Xinhua China 25 Index ETF (FXI), PowerShares Gld Drg
Haltr USX China ETF (PGJ)*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
CNBC Video Interview
*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.*
Jefferies Is Back In Self-Preservation Mode, Releases Yet Another Defensive Press Release As Stock Tumbles
Just out from Jefferies which reports that it has lowered its Gross exposure to PIIGS by another 50% (down 75% in total), which we wonder: why, if Gross is not Net? Just ask Morgan Stanley.- JEFFERIES RESPONDS TO `RUMORS, HALF-TRUTHS AND OUTRIGHT LIES'
- JEFFERIES CITES `INTENTIONAL MISREADING OF OUR PUBLIC FILINGS'
- JEFFERIES REPURCHASED $50M OF 2012 BONDS IN `PAST FEW WEEKS'
One thing is certain: this is not the last promise from Jefferies that all is well.Last week, a representative of a hedge fund, who we understand has been spreading false rumors about Jefferies, sent us a letter with a series of questions that for the most part show what we must presume is an intentional misreading of our public filings to try to support these rumors. All these folks seem to be trying to take advantage of the MF Global bankruptcy and the volatile market environment with a view to harming Jefferies and all of us, presumably for personal gain. With the facts and truth on our side, we have responded to all this directly and completely. Fortunately, those who take the time to understand and truly analyze the facts are reaching the right conclusion. While it may be necessary for us to continue to respond to these ill-conceived attacks, we fortunately can do so on a firm foundation and with confidence in our funding and business model.
How ZIRP and SNAC Made It Easier To Short Credit
Debt
Much
has been made of "unintended consequences" of various policies. Even
ZIRP is gaining more attention. ZIRP punishes savers. ZIRP
forces bond managers to move out in duration or down in credit quality
to get enough income to provide some semblance of a return after fees.
ZIRP may be encouraging people to wait on home purchases as they don't
think interest rates or mortgages will rise anytime soon. ZIRP has
played a role in the credit crisis as well. As has the SNAC protocol
for CDS (which enabled - among other things - a fixed and lower running
cost in CDS contracts) when combined with ZIRP means there is minimal carrying cost on the amount of up front premium paid in the case of credit shorts.Guest Post: Europe Needs Debt Relief And Structural Reforms, Not Hyperinflation
The current governments in place in Italy and Greece are puppets of the banking system, making sure that countries do not default and pay as much interest for as long as possible by implementing short term austerity measures. This is not the type of technocratic government these countries need. They need a technocratic government that sees that the current debt burden is unsustainable and cannot be serviced, acknowledging that defaults are necessary. They should seize this opportunity to change the financial system and implement structural reforms, while exercising their powers to facilitate orderly defaults for both governments and household debt. This way countries will be able to start from a situation where there is breathing room to implement much needed structural reforms throughout society.Bank Of Spain Nationalizes Banco De Valencia
Some headlines from Spain, confirming that the buck did not end with Dexia, and that another bank which accounted for 0.74% of total Spanish assets has just folded. For now it is just the smaller ones. Soon, it will be the bigger ones.S&P 500 Gaps Down As 50DMA Taken Out
Volume
is further picking up as Financials move to the worst spot (down over
3%). ES is down 2.5% and has just taken out the 50DMA as the Dow is
down over 300pts. HYG remains a significant underperformer but equities
look like they are playing catch up finally to credit markets -
short-term target 1166 for S&P 500 given current HY levels.EURUSD Soars On No News: ECB Now Intervening In FX?
Out of nowhere, and based on no news whatsoever, the EURUSD just jumped by 40+ pips in what appears to have been one trade. There is no news to justify this move, as the only possibly related headline to come out was that the Greek finance minister sees parliament vote on the new EUR 130bln aid deal in January. This is neither news, nor is it bullish. In addition, we have information now that Intesa has now been halted on the Italian market due to excessive (downward naturally) volatility. Which begs the question: has the ECB decided it has had enough of bond monetizations and is now actively engaged in FX warfare against the Fed, or are French banks now massively dumping USD assets and buying EUR with the proceeds with indescriminate abandon, as was reported first previously here.
Guest Post: Super Complacency Means Printing Will Commence Post-Election
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