Last Minute Summit Mutiny Threatens The Future Of The Euro; And Why A Wholesale S&P Downgrade Of Europe Will Be Devastating

A day when everything that could go wrong for the euro and eurozone has just gotten worse. Hours away from the completion of the summit, whose failure will unleash a nuclear bomb of serial downgrades by S&P (let along expose frauds such as Sarkozy and Olli Rehn who claim, yet again, that the world will end a solution is found), The Telegraph writes that the summit is already in tatters after a rebellion and threats by Finland, Holland and Ireland are poised to scuttle the summit. Louise Armistead reports that 'Finland’s grand committee said decisions made by the ESM – the eurozone’s permanent bail-out fund set for launch in 2012 – had to remain unanimous, and not changed to the “qualified majority” that French president Nicolas Sarkozy and German chancellor Angela Merkel have agreed. The Finns are backed by the Netherlands, which fears proposals to withdraw veto powers from the ESM is an erosion of democracy and would make it vulnerable to funding bail-outs without recourse. Meanwhile, the Irish want to block plans for the “convergence and harmonisation” of the eurozone’s “corporate tax base”. The rebellion is a serious threat to German and French plans to sign treaty changes today along the lines laid out in their joint letter on Wednesday. In it, the leaders said they hoped all 27 European Union countries would sign.' And since this is the only option to bypass a popular vote, the mere thought of which would destroy the Eurozone in a flash, and since Finland and Holland are two of the core funders of the ESM (RIP EFSF), it means that the Greek scheme of playing chicken with the Eurozone, has now been adopted by everyone else in the core. In the meantime, time for the Euro is running out with less than 24 hours left until midnight on Friday, and absent a complete consensus, the summit is as good as dead, something we expected a week ago and were heckled for by Bloomberg TV. Good luck Europe - use those 24 hours wisely.

 

 

Oath Keepers Receive Tip of National Guard Unit Stand-Down, Refusing to Answer Questionnaire Asking if They Would Use Lethal Force Against the American People

from OathKeepers.org:
The below tip was posted on the official Oath Keepers Facebook Page by user “Pat Lowe.” We are in the process of verifying this tip, so it is as of yet unconfirmed, but we wanted you to be aware of it (it certainly would be good news for a change!). We will post and send out updates as we confirm and verify.

Message on Oath Keepers Facebook Page:
http://www.facebook.com/groups/163945586998396
Paul Lowe

I hope you enjoy this great news as I did when I was told.

Paul Lowe

OUTSTANDING!! I just left my neighbors house. Devon is with the National Guard for this area. He just got home from a EDRE (emergency deployment readiness exercise) at the armory. He said that during the exercise 3 companies of infantry were polled by questionare about the drill and it’s purpose. One of the questions was, will you as a member of the Nat. Guard use lethal force against the American public if ordered to do so? One of the men stepped forward and refused to take the poll and explained that it was a moral judgement on his part and that he could not do so. He then placed his weapon on the ground and fell in behind the formation. Devon said it was like a waterfall, Every member layed their weapons on the deck and fell in beside the one lone specialist. This included ALL NCO’s, STAFF NCO’s and SENIOR NCO’s.

Read More @ OathKeepers.org

Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else

Reposting by popular demand, and because everyone has to understand the embedded risks in this market, courtesy of the shadow banking system.
In an oddly prescient turn of events, yesterday we penned a post titled "Has The Imploding European Shadow Banking System Forced The Bundesbank To Prepare For Plan B?" in which we explained how it was not only the repo market, but the far broader and massively unregulated shadow banking system in Europe that was becoming thoroughly unhinged, and was manifesting itself in a complete "lock up in interbank liquidity" and which, we speculated, is pressuring the Bundesbank, which is well aware of what is going on behind the scenes, to slowly back away from what will soon be an "apocalyptic" event (not our words... read on). Why was this prescient? Because today, Reuters' Christopher Elias has written the logical follow up analysis to our post, in which he explains in layman's terms not only how but why the lock up has occurred and will get far more acute, but also why the MF Global bankruptcy, much more than merely a one-off instance of "repo-to-maturity" of sovereign bonds gone horribly wrong is a symptom of two things: i) the lax London-based unregulated and unsupervised system which has allowed such unprecedented, leveraged monsters as AIG, Lehman and now as it turns out MF Global, to flourish until they end up imploding and threatening the world's entire financial system, and ii) an implicit construct embedded within the shadow banking model which permitted the heaping of leverage upon leverage upon leverage, probably more so than any structured finance product in the past (up to and including synthetic CDO cubeds), and certainly on par with the AIG cataclysm which saw $2.7 trillion of CDS notional sold with virtually zero margin. Simply said: when one truly digs in, MF Global exposes the 2011 equivalent of the 2008 AIG: virtually unlimited leverage via the shadow banking system, in which there are practically no hard assets backing the infinite layers of debt created above, and which when finally unwound, will create a cataclysmic collapse of all financial institutions, where every bank is daisy-chained to each other courtesy of multiple layers of "hypothecation, and re-hypothecation." In fact, it is a link so sinister it touches every corner of modern finance up to and including such supposedly "stable" institutions as Jefferies, which as it turns out has spent weeks defending itself, however against all the wrong things,  and Canadian banks, which as it also turns out, defended themselves against Zero Hedge allegations they may well be the next shoes to drop, as being strong and vibrant (and in fact just announced soaring profits and bonuses), yet which have all the same if not far greater risk factors as MF Global. Yet nobody has called them out on it. Until now.

Bourses around the world fall/gold and silver hit with another raid/A must read commentary on the shadow banking industry/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 21 minutes ago

Dear Ladies and Gentlemen: Markets around the globe sputtered today into the raid as it seems that no agreement to the Euro crisis is at hand. Zero hedge comments on the shadow banking system which has now ground to a halt. The headquarters for the shadow banking system is London England which allows one to hypothecate customer funds and re-hypothecate this over and over again.  When the daisy

In A Broken System, You Must Be Your Own Central Bank, Sinclair Tells King World News

December 8, 2011, at 3:42 pm
by Jim Sinclair 

Dear CIGAs,

Eric King of King World News was kind enough to interview me today about the growing fears about the stability of our financial system.
To listen to the interview click here to visit King World News…

 

 

Jim’s Mailbox

December 8, 2011, at 3:40 pm
by Jim Sinclair 

Dear Jim,

As previously discussed today, I have completed the transaction to have my shares in certificate form. It took about 45 minutes at one of the top 5 banks in Canada. I was charged a small fee, as I requested different denominations so to speak. For example if I held 15000 shares of company ABC I requested that I receive 5 certificates with a face value of 3000 shares each for a total of 15000 shares. This will allow me to re-deposit some or all the shares as my personal situation dictates in the future. I can avoid having to re-deposit all shares only to liquidate [sell] a portion.
For your support and aid in these insane markets my family and I owe you a great debt of gratitude.  I will sleep easier tonight.

Thank you!
CIGA Giacomo

Dear Giacomo,

You need only deliver your paper shares to your broker anywhere in the world with a signed stock power attached and the sale will take place on the same day. The delay would be a phone call to the transfer agent to ask if your shares have been lost or a stop put on them.
One thing that is very important – do not lose your shares!

All the best,
Giacomo ( Italian for Jim)

 

Jawboning: Don`t Fail To Recognize It

December 8, 2011, at 2:41 pm
by Jim Sinclair 

Dear CIGAs,

The ECB has reasonable funds available to it that, if used in the Euro bond market, would have some impact on containing rates.
Gold rises to $1762.50 , just below the $1764 angel. The new President of the European Central Bank says yes we have the money, but no we are not going to use it. Gold goes straight down into the first area of support at $1709- $1710 where it battles all afternoon.
Bloomberg releases an article saying that concerted central bank activity to control the price of gold was utilized today. Long scalpers barf out their positions based on the above jawboning MOPE. Gold ranges $100 so far today.

1. Now with a clear head, the ECB has the money and will be forced to use it or watch their best bond markets look like "Day After," and "Mad Max."

2. Central banks have been throwing blocks at the gold price ever since $248 without much success.

3. The Federal Reserve has made dollars available at cheap swap rates to the ECB. To think that is not a step in monetization because it will be used to buy non-dollar bonds is so glib that it communicated ignorance, not understanding. Systemic monetization has the same impact an insular monetization; it just uses other hands to do it.

Gold is headed in the $2000s. The low in the accordion chop has been established in the drop toward $1530. It does not matter if gold launches from $1710 or $1650, what matter is that it will.

Regards,
Jim

Rosenberg On The 8 Areas Of Behavioral Change In 2012

It seems the market's psychology has shifted, in its wonderfully temperamental and instantaneous manner, once again as the last great hope of Thomas Lee and his cohorts is removed. What better time than for David Rosenberg, of Gluskin Sheff, in his inimitable way, to introduce his outlook for 2012 in the form of eight behavioral changes that he expects to overwhelm market psychology in the coming months. Political, financial, and economic transitions for the US, Europe, and China respectively will dominate the coming year and as Rosie points out, the ability to recognize change at the margin (such as basis traders in European sovereigns) is going to be critical in 2012. The shift from one of cyclical extrapolation to secular change is always a hard one to navigate and tactical asset allocation will become foremost in most people's minds over longer-term strategic considerations. The global economy will be forced to endure the mother of all deleveraging cycles as we move through 2012 and capital preservation and income must dominate investment strategy as Rosie's 8 themes play out.

The Misery Continues: Complete November Hedge Fund Performance

Presenting complete hedge fund performance for the month of November and Year to Date. By the looks of things, this will be a year which will not only remain in infamy for hedge fund performance (now that we are just 15 trading days away from the end), but one where about a third of hedge fund will almost certainly be redeemed into extinction.

Hitler Hears About The Collapse Of The Eurozone

It was only a matter of time... Needless to say, this is obviously so wrong on so many levels, but what can you do. At this point the endgame is in play so at least we can all laugh about it.

 

 

Fourth Time Is The Charm: Texas Instruments Slashes Outlook... Again

Just in case anyone thought Texas Instruments was joking the first, second, or even third time previously, here is the company to cement that the feces have really hit the fan, as it has been warning for almost a year contrary to what bleary eyed optimists wanted to believe.

In a scheduled update to its business outlook for the fourth quarter of 2011, Texas Instruments Incorporated (TI) (NYSE: TXN - News) today narrowed and lowered its expected ranges for revenue and earnings per share (EPS).  The reductions are due to broadly lower demand across a wide range of markets, customers and products, except for Wireless applications processors.

The company currently expects its financial results to be within the following ranges:

• Revenue:  $3.19 – 3.33 billion compared with the prior range of $3.26 – 3.54 billion
• EPS:  $0.21 – 0.25 compared with the prior range of $0.28 – 0.36.

  more »

HUI range constricting

Trader Dan at Trader Dan's Market Views - 1 hour ago

The mining sector, as evidenced by the HUI, remains mired within its now more-than-a-year long trading range which is bounded on the top by the 600 level and supported on the bottom by the 500 level. Going back into November of 2010, all rallies have eventually failed to hold for long above the top of this range. There were only two weeks in which the index was able to pull off that accomplishment but it then failed and failed very large at that. It collapsed over 85 points in a single week which dropped the index back down to the bottom of the range. This needs to be kept in mind... more » 

 

Not a Clue: What Happened to the MF Global Customers' $1.2 Billion?

 

 

15 More Days Left For Santa Claus Rally

S&P futures fell 3.25% from high (early Draghi) to low (close) on the worst close to close drop in over two weeks as the S&P 500 lost its YTD gains, down almost 2% now. Financials were the clear laggards with the majors crushed. Broad risk assets were in negative mode all day from the moment Draghi slapped traders into reality and lead ES lower and lower. Some late day rumor-denial did little - aside from try and fail to ramp ES back to VWAP - but wherever you look there is blood. Commodities crashed lower - now down 2-3% on the week - but most of the commodity and FX weakness had peaked as Europe closed, and we note that Gold is outperforming other commodities on the week now. It was equities that slowly but surely on a decent volume day in futures (given the roll) leaked lower and lower - now clinging precariously to the edge of the 11/30 4% overnight rampfest levels. Stocks underperformed credit on the day but all ended at the lows/wides as TSYs closed at their low yields of the last 10 days. It seems the implied correlation-VIX divergence signal was flagging caution correctly once again.

Snapshot Of Pure Lunacy

This is a snapshot of pure market lunacy.

• Rumor on: 3:25 pm: ESM FUND TO BE GIVEN A BANKING LICENSE ACCORDING TO A DRAFT - RTRS

Not even 20 minutes minutes later:

• Rumor off: 15:45pm: GERMANY REJECTS DRAFT MEASURES INCLUDING BANKING LICENSE FOR ESM

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