Things That Make You Go Hmmm.... Such As Basel I...II...III... And Onward

From Grant Williams: "Basel III attempts to force encourage banks to hold larger percentages of government bonds on their balance sheets in order to shore up their capital bases and to provide a riskless safety net should they run into liquidity problems. Thus far, holdings of Italian debt - with its 20% risk-weighting - have bankrupted MF Global in the space of a week (no 30-day cushion there, then) while the ECB SMP program has spent billions of euros accumulating 20% risk-weighted assets rapidly-declining assets that everybody else wants to sell high-grade Italian (and, latterly, Spanish) government bonds in a desper- ate attempt to stop the very assets that banks have been pushed into holding from bringing down the whole edifice. The absurdity of the situation is striking. After 2008, the world’s major governments (in their infinite collective wisdom) transferred the most toxic assets, that threatened to bring down their countries’ banking systems to their own balance sheets rather than suffer the sharp pain of bankruptcies throughout the global financial sector and the inevitable pain that would follow. Now, barely three short years after Lehman Brothers’ demise, central banks - their balance sheets hor- ribly disfigured by the fiendish experiments they have been conducting on monetary policy (charts, below) - have themselves become monstrous figures; distorted and twisted into barely-recognisable approximations of the institutions we have come to recognise over the decades as the guardians of monetary propriety. Bankenstein’s Monsters... And so we go back to Basel III."

Guest Post: MF Global - A Fractal In A Frying Pan

Gerald Celente, in an interview with Russia Today, claims he cannot access his PM trading account or get answers to his inquiries. It turns out Lind-Waldock, who he originally had the account with, was subsequently bought out by the now bankrupting MF Global. Understandably distraught, Celente asserts, “They took my money out of my account, six figures, and they have it. They closed out two of my positions, and I cannot get any answers, and I can’t get my money.” Celente got many of us thinking—“If a guy like him can be refused access to his money, then who is safe?” Some argue he should not have been buying “paper gold.” Celente states that he was buying PM futures and taking delivery. “Max Keiser” the “Silver Bears” “Turd Fergusen” and more, have encouraged us to buy silver and “Bust the Comex.” Many of us here on Zero Hedge have fantasized in the comments section about someone wealthy enough to lay a few billion on the Comex for PMs and then stand for delivery. Celente, it is arguable, was doing this not only for himself but perhaps for Joe and Josephine Average who do not have the ammunition to fight this fight. But as I got to thinking, I realized all of the above misses a valuable take away lesson. It is not simply the case that MF Global is a “first domino to fall” or a “canary in the coal mine” or a “harbinger of collapse.” MF Global is a fractal in a frying pan.





Spanish Voters Set to Throw Out Socialists in Election

Spaniards are expected to throw out the Socialists they blame for a disastrous economic situation in an election on Sunday and to vote in a center-right party. October Euro Deal Was 'Confidence Trick That Failed'

KWN Weekly Metals Wrap

November 19, 2011, at 3:24 pm
by Dan Norcini Post

Dear CIGAs,

Please click the link below to listen to this week’s metals wrap up from King World News, featuring our very own Trader Dan Norcini.
Click here to listen to the weekly metals wrap up…

Could gold-backed bonds be the answer to the eurozone crisis?

the link is here.

 

 

 

ECB Bank Chief Rejects Calls to Rescue Euro Zone

In his first speech as president of the European Central Bank, Mario Draghi complained on Friday that Europe’s political leaders had been too slow to carry out their own plans to address the debt crisis.

And despite ever louder calls for central bank intervention, Mr. Draghi offered no hope he would come to any country’s rescue by pumping money into the financial markets.

Mr. Draghi, who took office at the beginning of the month, implicitly rejected calls for the central bank to use its enormous resources to stop the upward creep of borrowing costs for Spain and Italy, which threatens their solvency and by extension the European and global economies.

 The link is here.

Germany seeks to stop U.K. vote on EU: report

The link is here.

 

 

 

Sniffles in Spain: Euro-Zone Contagion Has Madrid Deeply Worried

link to this one is here.

 

 

 

Debt Crisis Contagion: The Euro Zone's Deadly Domino Effect

The link is here.

 

 

 

Jim Rickards Times Two

and the link to that is here.

The U.S. Mint had another sales report. It wasn't much, but for gold, it was the biggest sales day so far this month. They reported selling 4,000 ounces of gold eagles, along with 2,500 one-ounce 24K gold buffaloes...and 25,000 silver eagles. Month-to-date the mint has sold 17,500 ounces of gold eagles...4,000 one-ounce 24K gold buffaloes...but only 844,000 silver eagles.

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