Bill Gross Explains The European Ponzi

Not like it is news, but... Out of one pocket, into another, and in the mean time "things get better" as Gross explains below. That said, we hope Bill knows where Allianz of A&G fame (which just happens to be the closest comp to our own AIG) falls in the pecking order of the European house of cards.

Diamond Foods Fires CEO, CFO After Audit Committee Finds Books Have Been "Cooked" For The Past Two Years

First, small momo-favorite companies. Next: entire nations. Finally: the all-seeing, all-dancing central banks. Today, Diamond Foods just fired its CEO and CFO after the audit committee found its books have been cooked, only phrased more politically correct: "the Audit Committee has carefully reviewed the accounting treatment of certain payments to walnut growers. The Audit Committee has concluded that a "continuity" payment made to growers in August 2010 of approximately $20 million and a "momentum" payment made to growers in September 2011 of approximately $60 million were not accounted for in the correct periods, and the Audit Committee identified material weaknesses in the Company's internal control over financial reporting." Cue the class action lawsuits. When everything is said and done, the US investor will find that the Madoff M.O. of "doing business" has simply shifted to corporate America, where courtesy of non-GAAP BS one can report whatever the investing public wants to believe, until it all blows up. In other news, the now fired executives were stunned to discover they are not getting an extra bonus for cooking the books, last heard mumbling "double standard" under their breath. And if anyone wonders why despite the confirmed "bull market" in stocks (driven entirely by the nearly $1 trillion liquidity injection from the ECB in the past 6 months), investors just pulled $1.8 billion out of US mutual funds yet again, this is your answer.

Greece/S and P threatens USA with another downgrade/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 26 minutes ago

Good evening Ladies and Gentlemen: As promised gold and silver languished today with gold falling by $17.10 to $1729.30 Silver fell by 50 cents to $33.67.  It was quite clear that the bankers orchestrated their raid starting yesterday.  The signal was sent yesterday morning as gold/silver equity shares were pummeled despite the rising price of the metal.  The crooks covered many of their shorts

Collapse Confirmation News 2/7/2012

  more »

Gold Daily and Silver Weekly Charts

more »

 

SP 500 and NDX Futures Daily Charts

more »

 

 

JPMorgan Chase Caps Martin Luther King PR Campaign By Foreclosing on Civil Rights Activist

 

 

Are Government Unions Out Of Control? An Infographic

This week, Arizona legislators are voting on a package of bills that would be “Wisconsin on steroids” – banning collective bargaining, release time and automatic deduction of union dues from paychecks. The unions plan state capitol protests this week, so things are heating up and the story has already appeared in various national publications. Since union protests are planned for the capitol tomorrow it will likely involve a lot of drama and TV coverage. Yet like every issue there are pros and cons, and government unions are a very sensitive topic to be sure. While the TV coverage will certainly focus on the favorable side of unionization (after all, what is better for the economy than more people collecting paycheks.... even if these are ever diminishing paychecks) here is an infographic from the Goldwater Institute looking at the cost side of the equation.

Guest Post: Introducing The Government’s Newest Unpaid Spy: YOU

A few months ago, the Mayor of Newark, NJ announced a similar program designed to reward citizens for snitching on gun owners. According to the mayor, “We don’t even have to have a conviction,” for an informant to get paid a cool $1,000 cash. Rat out your neighbor, get paid. Simple. (As an aside, police in neighboring East Orange, NJ have rolled out a new pre-crime surveillance system. In the words of Police Chief William Robinson, “The police are observing you. The police are recording you. And the police are responding.” Big Brother is clearly watching.) In the financial system, there are droves of civilian agencies that have been coerced into becoming government spies. As we discussed a few weeks ago, everyone from bankers to brokers to gold dealers are obliged to submit ‘suspicious activity reports’ to the federal government. They even have minimum quotas. What’s more, these so-called “SARs” must remain top-secret. It’s a crime for your banker to inform you that you were the subject of a suspicious activity report. Yesterday, the Financial Crimes Enforcement Network (FinCEN), the federal agency which oversees the legions of unpaid government spies, added a few more businesses to the list. Now non-bank mortgage lenders and originators must ‘assist law enforcement’ by submitting suspicious activity reports.

Papademos Says Outstanding Issues Remain, EURUSD Slides

Another day, another delay, and still nothing is done.

• GREEK PREMIER SAYS OUTSTANDING ISSUE NEEDS FURTHER WORK
• GREEK PREMIER SAYS DISCUSSION TO CONTINUE ON OUTSTANDING ISSUE
• PAPDEMOS SAYS AIMS TO CONCLUDE LOAN TALKS AHEAD OF THURSDAY'S EUROGROUP MEETING

And on the off chance that Greece, gasp, does not actually get something done by the deadline, it means that at tomorrow's meeting the only topic of discussion will be the calorie content in the taxpayer funded pastries. In the meantime, some semblance of reality is creeping back into the EURUSD.

Greek Meeting Ends Without Conclusion: LAOS Head Refuses To Sign Deal

Bloomberg reports that at almost 1 am local time, the Greek government meeting has broken up, and the head of LAOS is speaking, and by the looks of things, is not going along with the program:

• KARATZAFERIS SAYS HE DID NOT HAVE ENOUGH TIME TO STUDY MEASURES
• KARATZAFERIS SAYS HE NEEDS LEGAL ASSURANCES ON MEASURES
• KARATZAFERIS SAYS HE MIGHT CONTINUE TO SUPPORT THE GOVERNMENT DESPITE NOT AGREEING TO DEAL
• KARATZAFERIS SAYS HE MADE HIS POSITIONS CLEAR EARLY IN MEETING
• KARATZAFERIS SAYS HE APPRECIATES THE PREMIER'S EFFORTS
• KARATZAFERIS SUPPORTED ND LEADER ON ISSUE OF PENSIONS

Translation: no deal. And, dum dum dum, another headlines says that the Troika is now back in Papademos' office. The suspense builds.

Epic Collapse For Phil Falcone Whose Harbinger Is Forced To Pay 15% Interest On Secured Loan

And so the legend of the once invincible "hedge fund titan" Phil Falcone, often the target of mockery and ridicule on the pages of Zero Hedge, ends, after his now irrelevant hedge fund which peaked in the tens of billions back in 2006/2007 is forced to borrow a secured loan from Jefferies at a 15% rate. The reason - the firm's all in gamble in satellite communication company LightSquared, which is also pretty much finished following today's announcement by airline carriers who said that LightSquared would "ruin US aviation." That, and pretty much everything else that Falcone invested in in the past 5 years. Check and mate. This also answers our question from August 2010 "Is Phil Falcone's Mega Bet On [LightSquared] Going To Be His Last?" It is.

Guest Post: Consumer Credit And The American Conundrum

Rising consumer credit means more consumption which leads to stronger economic growth.  Let me explain.  Individuals go to work to produce a good or service for which they are paid a finite amount of money for.  With that income they pay taxes which leaves them with discretionary income from which to live on.  Pay the rent, utilities, insurance and healthcare, food, clothes and put gas in the car and that pretty much consumes the majority of the paycheck.  Today, the situation is quite different and a harbinger of potentially bigger problems ahead.  The consumer is no longer turning to credit to leverage UP consumption - they are turning to credit to maintain their current living needs. Take a look at the chart of personal consumption expenditures (PCE) versus total consumer credit.  Notice in the past year as consumer credit rose you saw an increase in PCE.  In the last two months consumer credit has exploded higher but there has been virtually NO increase in PCE levels on a month over month basis.  Retail sales during the Christmas shopping season we disappointing and this was even with a large decrease in gasoline prices. This situation becomes even more apparent when we begin to look at the longer term trends of real disposable incomes, consumer credit and personal saving rates.

Summary Of Greek Reform "Pledges"

At this point everyone is so habituated to worthless updates from Greece that we are shocked Bloomberg even noticed. Either way, here is latest Greek headline tape bomb, via BBG, which looks at a leaked Troika draft report obtained by Bloomberg.

• TROIKA DRAFT GREEK ACCORD SAYS 2012 GDP TO SHRINK AS MUCH AS 5% - so make that 15%-25% realistically
• GREECE TO CUT MEDICINE SPENDING TO 1.5% OF GDP FROM 1.9% OF GDP - why not just "cull" 15-20% of the population?
• GREECE PLEDGES TO MERGE ALL AUXILIARY PENSION FUNDS -  one problem - following the default, there will be no pension funds left.
• GREECE TO PLEDGE 20% CUT IN MINIMUM WAGE IN TROIKA DRAFT - and Greek citizens pledge to never work again.
• TROIKA DRAFT GREEK ACCORD RENEWS PLEDGE TO CUT 150,000 EMPLOYEE - or the US equivalent of nearly 5 million workers...

But the winner is:

• TROIKA DRAFT GREEK ACCORD SEES RETURN TO GROWTH IN 2013 - OMFG.... no, did they just... HILARIOUS

(Broke) Monkey See, (Broke) Monkey Do

Irish Finance Minister saying that whatever the ECB does with Greece would be of interest to Ireland. So if ECB forgives Greek debt (directly or through EFSF), Ireland is going to want the same deal. Portugal won't be far behind. And why stop at ECB and not go for PSI as well?

$24 Billion 10 Year USTs Sold In Unremarkable Auction

The Treasury just sold $24 billion 10 Years in a completely unremarkable bond auction, which was virtually a carbon copy of the January sale of 10 Year, except with a slight drop in the Bid To Cover, which declined from 3.29 to 3.05, and an increase in the yield from 1.90% to 2.02%. All the other metrics were essentially the same as a month earlier: Directs at 17.9% vs 17.4% prior, Indirects 38.9% vs 38.4% before, and Dealers at 43.3% vs 44.4% before. And now, heartened by this successful sale, the Fed itself is in the market selling $8.00-$8.75 billion in 1.5 year bonds. In other words, bonds for everyone - it is a repo market ponzified debt issuance bonanza!

New York Fed Is Back To Transacting Opaquely, Sells AIG Holdings To Goldman

The last time the Fed tried to dump Maiden Lane 2 assets via a public auction in a BWIC manner, it nearly crashed the credit market. This time, the FRBNY, headed by one ex-Goldman Sachs alum Bill Dudley, has decided to go back to its shady, opaque ways, and transact in private, with no clear indication of the actual bidding process or transaction terms, and sell $6.2 billion in Maiden Lane 2 "assets" to, wait for it, Goldman Sachs, the same firm that would benefit in the first place if AIG's assets imploded (remember all those CDS it held on AIG which supposedly prevented it from losing money if AIG went bankrupt?). One wonders: does Goldman have a put option on the ML2 portfolio if the market experiences a sudden and totally impossible downtick some day? But all is well - we have assurance from the Fed that the sale happened in a "competitive process." Luckily, that takes care of any appearance of impropriety.

What Are We Going To Do If The Number Of American Adults That Can’t Take Care Of Themselves Continues To Set New Records?

from End of The American Dream:

Today, the number of American adults that can’t take care of themselves is at an all-time record high. So what are we going to do if the number of people dependent on the government keeps going up? Some folks like to point out that most Americans that have recently become dependent on the government would rather be working, but because of a lack of jobs they have gotten into a position where they cannot take care of themselves anymore. Some other folks like to point out that the number of Americans that abuse the system and that enjoy being dependent on the government is steadily increasing. Sadly, both of those positions are true. It is a fact that the percentage of working age Americans that actually have jobs has declined dramatically over the past several years because of a lack of jobs. It is also a fact that a growing percentage of Americans believe that it is the job of the government to take care of them from the cradle to the grave. What people need to understand is that the government is the problem and not the solution. We desperately need more jobs in this country, but the federal government has been absolutely killing job growth, it has been creating a culture of government dependency, and it has been going into gigantic amounts of debt trying to take care of so many people. So what are we going to do if the number of American adults that can’t take care of themselves continues to set new records year after year?
Read More @ EndOfTheAmericanDream.com

U.S. Faces Downgrade If No Plan: Chambers

by John Detrixhe, Bloomberg.com:
The U.S., lacking a plan to contain $1 trillion deficits, faces the prospect of another rating cut in six to 24 months depending on the outcome of November elections, according to John Chambers of Standard & Poor’s.
America has had an AA+ rating with a negative outlook since Aug. 5 when the New York-based unit of McGraw-Hill Cos. stripped the nation of its AAA ranking for the first time, citing the government’s failure to agree on a path to reduce deficits. The U.S. has a one-in-three chance of another downgrade, Chamber said today during an S&P sponsored Webcast.
“What the U.S. needs is not so much a short-term fiscal tightening, but it has to have a credible medium-term fiscal plan,” said Chambers, managing director of sovereign ratings. “That is going to have to say something about entitlements, and that is probably going to have to say something about revenues.”
Read More @ Bloomberg.com

Dan Norcini: Continued Dollar Selling to Keep a Firm Bid for Gold

from King World News:
With continued volatility in global markets, today King World News interviewed legendary Jim Sinclair’s chartist Dan Norcini. When asked about the chaotic, whipsaw trading action in the markets, Norcini stated, “Yesterday was the Bernanke rally in the commodity markets. It was all about Bernanke reinforcing the view that the global economy, but particularly the US economy, is in such a condition that it’s going to require a very low interest rate environment for at least the next 18 months and possibly out to the year 2014.”
Dan Norcini continues: Read More @ KingWorldNews.com

Next Major Leg Up in Precious Metals, $60 SILVER THIS YEAR!

Globalist Campaign Calls for Abolishment of Constitution

by Kurt Nimmo and Alex Jones, InfoWars.com:
The global elite will not rest until they have revoked the Constitution, the Bill of Rights, and the Declaration of Independence. Over the last few years, they have engaged in a concerted attack on our founding documents and time-honored ideals. On Tuesday, the New York Times continued this trend with an article on the front page of its print edition.
Entitled ‘We the People’ Lose Appeal With People Around the World, the article by Adam Liptak argues that the Constitution is outdated, inflexible and no longer trendy. It cites an article published in June in The New York University Law Review that explains how America’s Constitution is “losing its appeal as a model for constitutional drafters elsewhere” as statists, bureaucrats and autocrats turn to examples presented by more malleable documents such as the Canadian Charter of Rights and Freedoms and those produced by India, South Africa, New Zealand and the United Nations.
The problem, Liptak notes, is that “rights guaranteed by the American Constitution are parsimonious by international standards, and they are frozen in amber.” In other words, the “problem” with the Constitution and the Declaration of Independence is that the rights enumerated there are not open for interpretation and cannot be changed by government.
Read More @ InfoWars.com

John Hathaway: People Are Right to be Scared & Gold is a Necessity

from King World News:
With gold and silver consolidating recent gains, today four decade veteran John Hathaway told King World News that many of his clients are scared because of what is happening in the economy and the global financial system. Hathaway is the prolific manager of the Tocqueville Gold Fund and he has achieved a 5-star rating from Morningstar. Here is what Hathaway had to say: “People are scared on a number of different fronts. It’s economic, the fact that the economy is basically going nowhere. The policies of the administration. We have no solution to the fiscal issues in site. You know people are right to be scared. The direction of public policy in this country is dreadful.”
John Hathaway continues: Read More @ KingWorldNews.com

Atlantic Misleads With ‘Short History of Money’?

from The Daily Bell:
A Short History of American Money, From Fur to Fiat … What do animal pelts, tobacco, fake wampum, gold, and cotton-paper bank notes have in common? At one point or another, they’ve all stood for the same thing: U.S. currency. … The greenback is stable because the U.S. economy is huge and the United States is a terrific republic–OK. But it’s also stable because everyone else’s well-being depends on it, and on belief in its stability. That may be changing, though. As for paper money itself, the end of the gold standard meant that cash had become a total abstraction. Its value now comes from fiat, government mandate. It’s a Latin word meaning let there be. In God we better trust. – The Atlantic / David Wolman
Dominant Social Theme: Money is that certain thing … Well, we dunno exactly what it is, but here’s a HISTORY of it.
Free-Market Analysis: Here’s how we figure this article “went down” …
“Hi, David, you’re a contributing editor at Wired, a former Fulbright journalism fellow and a winner of the 2011 Oregon Arts Commission individual artists fellowship. You’re a real bright guy and we’re interested in a book on money. Why don’t you write it?”
Read More @ TheDailyBell.com

 

Please consider making a small donation, to help cover some of the labor and costs to run this blog.

Thank You

I'm PayPal Verified