Bob Janjuah: "Markets Are So Rigged By Policy Makers That I Have No Meaningful Insights To Offer"

I am staggered at how easily the concepts of Democracy and the Rule of Law – two of the pillars of the modern world – have been brushed aside in the interests of political expediency. This is not just a eurozone phenomenon but of course the removal of elected governments and the instalment of "insider" technocrats who simply serve the interests of the elite has become a specialisation in Europe. Many will think this kind of development is not a big deal and is instead may be what is needed. Personally I am absolutely certain that the kind of totalitarianism being pushed on us by our leaders will – if allowed to persist and fester – end with consequences which are way beyond anything the printing presses of our central banks could ever hope to contain. Communism failed badly. Why then are we arguably trying to resurrect a version of it, particularly in Europe? Are the banks so powerful that we are all beholden to them and the biggest nonsense of all – that defaults should never happen (unless said defaults are trivial or largely meaningless)?...– So, in terms of markets, be warned. My personal recommendation is to sit in Gold and non-financial high quality corporate credit and blue-chip big cap non-financial global equities. Bond and Currency markets are now so rigged by policy makers that I have no meaningful insights to offer, other than my bubble fears...The end of the bubble will be sign posted by either monetary anarchy creating major real economy inflation or by a deflationary credit collapse (if they run out of pumping "mandates"). The end game is incredibly binary in my view, but in between it is pretty much a random walk. Either way, "bonds are toast" in any secular timeframe (due either to huge inflationary pressures, or due to a deflationary credit collapse), which in turn means that asset bubbles in risky assets will get crushed on a secular basis.







Insider Documents Detail a March 23 Greek Default Plan
http://www.shtfplan.com/headline-news/breaking-report-insider-documents-detai...

Germany Drawing Up Plans for Greece to Leave the Euro
http://www.telegraph.co.uk/finance/financialcrisis/9091021/Germany-drawing-up...
http://www.telegraph.co.uk/finance/financialcrisis/9085062/Single-currencys-s...

Iran Stops Oil Sales to British, French Companies Thanks GriggsC123
http://www.reuters.com/article/2012/02/19/us-iran-oil-europe-idUSTRE81I07W201...

Sen. John McCain: Talking With The Taliban Is Ok With Me
http://www.nydailynews.com/news/sen-john-mccain-talking-taliban-article-1.102...

Maine Will Recount the Votes
http://www.youtube.com/watch?v=aZfaE_BSzuQ

$8,890 Gold, $517 Silver & Hyperinflation Update
http://kingworldnews.com

Colorado Looking at Gold, Silver Currency
http://www.heraldextra.com/news/state-and-regional/utah/colorado-looking-at-g...

 

Italy Cancels Vatican Tax Breaks, Orders Pope to Pay €600M-a-Year

The Doc at SilverDoctors - 9 minutes ago

*Italian P.M. Mario Monti has informed the Vatican that Italy will begin requiring the Catholic Church to pay property taxes on 100,000 properties, totaling between €600 million and €2.2 billion-a-year in new tax revenues for Italy based on estimates. * If Monti had real balls he would demand the Vatican pay the tax with a portion of their massive gold stores- that would generate some fireworks. Read more » more »

 

 

Silver Update 2/20/12 ECB Exit

The Doc at SilverDoctors - 40 minutes ago

[image: Thumbnail] *BrotherJohnF is back with another Silver Update: ECB Exit* Read more » more »

 

 

Paper Money Is Becoming Very Suspect Everywhere In The World

Admin at Jim Rogers Blog - 1 hour ago

Probably none of us are going to own any paper money at all ultimately, but that’s later in this decade, because paper money is becoming very suspect everywhere in the world. - *in Bloomberg* *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.*

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Computers Programmed To Be Smart Do Dumb Things

Eric De Groot at Eric De Groot - 1 hour ago

Hi Jerome, That chart was pulled from the commentary Investors 'Overly Bullish' On Nasdaq 100 Is Not Always A Harbinger Of Sharp Declines. I could very well substituted a few words to make it read Investors 'Overly Bearish' On Oil Is Not Always A Harbinger of Sharp Declines. The discussion was intended to suggest that computers programmed to be smart often do dumb things. Statistically... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

 

Oil and Gold Surge 1% on Open in Asia - Iran "Military Action Likely"

The Doc at SilverDoctors - 2 hours ago

Gold, in conjunction with oil, rose nearly 1% at the open in Asia prior to gradually giving up those gains as the Asian trading day progressed and as Europe opened. Gold’s gains were due to tension regarding Iran and higher oil prices - oil surged 1.2% at the open to $105.21 per barrel (NYMEX WTI). Support also came from further policy easing in China and concerns about the Greece debt crisis and the continuing risk of Euro zone contagion ahead of another meeting of euro zone officials later today. Read more » more »

 

 

US Housing Among Most Attractive Assets

Admin at Marc Faber Blog - 2 hours ago

If you look at the supply of homes, new construction, and you compare it to immigration into the United States, to the growth of the population, then these (southern) markets are very attractive from a longer term perspective. - *in CNBC* *Related, DR Horton (DHI), Lennar Corp (LEN), Toll Brothers (TOL), SPDR S&P Homebuilders ETF (XHB)* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* more »

 

 

Everybody’s Having A Wonderful Time Running The Printing Presses

Admin at Jim Rogers Blog - 3 hours ago

Everybody’s having a wonderful time running the printing presses. The way to protect yourself at a time like that, historically anyway, has been to own real assets. Those are my longs, and currencies. - *in Bloomberg* *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.* more »

 

 

Marc Faber: Total Economic Collapse, Death of the Dollar, Impovershment, WWIII

The Doc at SilverDoctors - 3 hours ago

*Marc Faber discusses imminent total economic collapse, the death of the US dollar, and the elite preparing to instigate WW III to hide the true causes of economic Armageddon from the public. * Read more » more »

 

 

Early Stage Mark-Up Phase For Copper

Eric De Groot at Eric De Groot - 3 hours ago

While some rush to classify today's negative divergence of copper (Dr. Copper) and stock prices as a troubling omen for the real economy, they likely missed the money flow setup in copper that triggered yet another mark-up phase in early 2012. Chart 1 reveals the early stages of this phase. Chart 1: Copper (JJC) And Copper Diffusion Index (DI) Chart 2 illustrates the money flow cross between... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

 

Tell A Lie Big Enough, Loud Enough And Long Enough And The Sheeple Will Believe

Eric De Groot at Eric De Groot - 3 hours ago

You will get a rude awakening come June this year as international dollar utilization sunders badly, setting a major unexpected down trend for the dollar and gold’s greatest ever ascent. A significant challenge to dollar hegemony could be felt as early as March 2012. For those scoring at home (an old American idiom used to describe fans numerically tracking the progress of the baseball game at... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Guest Post: Consequences To Expect If The U.S. Invades Iran

Let’s be honest, quite a few Americans love a good war, especially those Americans who have never had to bear witness to one first hand.  War is the ultimate tribally vicarious experience.  Anyone, even pudgy armchair generals with deep-seated feelings of personal inadequacy, can revel in the victories and actions of armies a half a world away as if they themselves stood on the front lines risking possible annihilation at the hands of dastardly cartoon-land “evil doers”.  They may have never done a single worthwhile thing in their lives, but at least they can bask in the perceived glory of their country’s military might.   This attitude of swollen ego through proxy is not limited to the “Right” side of the political spectrum as some might expect.  In fact, if the terrifyingly demented presidency of Barack Obama has proven anything so far, it is that elements of the “Left” are just as bloodthirsty as any NeoCon, and just as ready to blindly support the political supremacy of their “side” regardless of any broken promises, abandoned principles, or openly flaunted hypocrisies.  No matter how reasonable or irrefutable the arguments against a particular conflict are, there will ALWAYS be a certain percentage of the populace which ignores all logic and barrels forward to cheerlead violent actions which ultimately only benefit a select and elite few.

JPM Hikes Crude Price Forecast, Sees $120 WTI By Election Time

JPM brings some less than good news for the administration, which unless planning to propose another $500 billion or so gas price offsetting fiscal stimulus (which would bring total US debt to $17 trillion by the end of 2012) may find itself with the bulk of its electorate unable to drive to the voting booths come November. In a just revised crude forecast, JPM commodity analyst Larry Eagles, has hiked both his Crude and Brent expectations across the board, and now sees WTI going from $105 currently to a $120 by the end of the year, $4 higher than his prior forecast. Alas, since in another report from this morning titled "Return of Asset Reflation" JPM finally figures out what we have been saying for months, namely that the stealthy global central bank liquidity tsunami is finally spilling out of equity markets and into everything else, inflation is about to become a substantially topic in pre-election propaganda. As a reminder, when gold was at $1900 last summer, central banks had pumped about $2 trillion less into the markets. We expect the market to grasp this discrepancy shortly.

Ken Rogoff: Greece Should Be Given A "Sabbatical From The Euro" As Kicking The PIIGS Can Will Just Drag Germany Down

There is nothing new in this interview of Spiegel magazine with Ken Rogoff, but it is refreshing to listen to a person who has at least some standing in the arena of grand self-delusion (i.e., economics and capital markets), telling it like it is. While he rehashes all the old points, these bear reminding as the key one is what happens to Germany as the can kicking becomes a new default exercise in preserving bank "solvency" at the expense of the last stable economy: when asked if in 2015 the Eurozone will be the same, his response: "It may well be the case that all current members remain in the euro zone, and that Germany keeps on shouldering the ever-increasing debts of other countries. But the price of such a scenario is very high for all involved: southern Europe would become embroiled in permanent stagnation and the German economy would eventually be dragged down to a slower growth trajectory." So even though everyone knows that Europe is doomed in its current configuration, let's all just pretend things shall be well, and keep the even more doomed banks alive for a few more quarters? Is the loss of a banker bonus truly such a great catastrophe to society that countries have to remain in a state of perpetual misery until it all finally unwinds? Judging by today's market action the answer is yes.

Greek Headline Reality Check

Mainstream media is desperately scrambling to fill copy with stories of collaboration, rescue, heroism, sacrifice, and altruism among the European leaders. The dismal reality facing real people and real participants is quite different and as Peter Tchir points out "How many 'untruths' have become so accepted that they are now treated as facts or axioms". In an effort to get to the facts and reality, we disentangle Bloomberg's 'Greek Rescue' story and note the increasingly Orwellian nature of the events unfolding across the pond. But anyways, the machine is grinding along towards headlines of "rescue" where Greece will have been "saved" and "default will have been avoided" and it will be "great that banks and politicians worked to save Greece" in spite of the "lingering doubts that Greece will fulfill its obligations".

Euro FinMin Meeting Soundbites Du Hopium

Update: And finally for some reality from Dutch fin min De Jager: "We Cannot Approve Second Programme For Greece Until Greece Has Met All Its Obligation"... And now we know who Germany's "+1" will be when Greece becomes Southern Goldman Bavaria: "De Jager Says He’s in Favor of a Permanent Troika in Athens"
We would love to share some witty comments and jovial banter on this latest set of soundbites by Europe's effete bureaucrati on occasion of the latest and greatest Greek bailout, however having already done so on at least 10 times in the past, we have run out of things to say in this particular context and frankly we are bored with this topic. Which is precisely the Eurogroup's intention. Presenting "soundbites du jour, Greece edition N+1".

Beyond Greece: The Three Scenarios

As forecasts for peripheral macro data continue to deteriorate and core to strengthen modestly, there is little real comfort available from the European situation aside from the 800lb gorilla that all headlines are focused on today. Credit Suisse describes it as "a case of the outlook being less bad than expected, rather that it being better" and notes that post the Greek situation, despite the ongoing rally in the ever-thinning sovereign bond market, that risk premia (that were dangerously forgotten for the first decade of the Euro) will remain at elevated levels. CS sees three scenarios beyond Greece with even the best-case leaving questions of sustainability, trust, and continued negotiations yet the market's willingness to follow along the path of inevitably ruinous policies seems writ large with today's credit, equity, and FX strength.

Back To Surreality - Greek Tax Collectors Told They Need To Be 200% More Efficient

Let's put things back into perspective. Europe is lending money to Greece, which according to latest rumors will at least for the time being be in the form of the dreaded Escrow Account, which in turn means that the only recipients of bailout cash will be Greek creditors, whose claims will be senior to that of the government. In other words, it will be up to Greece, and specifically its own tax "collectors" to provide the actual funding needed to run the country as bailout or not bailout, Greek mandatory (forget discretionary) expenditures will not see one penny from Europe. As a reminder, the country is already €1 billion behind schedule in revenue collections which are down 7% Y/Y compared to an expectation of 9% rise. As a further reminder, the one defining characteristic of Greek tax collectors is that they are prone to striking. Virtually all the time. And that is assuming they even have the ink to print the required tax forms. Which last year they did not. So under what realistic assumptions are Greek tax collectors laboring in the current tax year? Why, nothing short of them having to be not 100%, but 200% more efficient. From Kathimerini: "Greece’s tax collectors were told over the weekend that they would have to do a much better job this year at gathering overdue taxes. How much better? Almost 200 percent." And this, unfortunately, is where the Greek bailout comes to a screeching halt, because while it is no secret that Greek "bailouts" do nothing for the country, but merely enforce ever more stringent austerity to mask the fact that all the cash is simply going from one banker pocket to another, it is the pandemic corruption embedded in generations of behavior that is at the root of all Greek evil. And there is no eradicating that. Now tomorrow, and not by 2020.

Timeline For Greece Following Today's FinMin Meeting

Today's FinMin meeting in Brussels is supposed to be "the one", as Greece's fate is finally decided, and Belgian caterers are forced to apply to the EFSF for a bailout (or maybe China will roll them up?) as prospects for further local summits, meetings, shindigs, tete-a-tetes, teleconferences and what nots are severely curtailed. Maybe - maybe not. We will reserve judgment until the end of the day, because, as shocking as it may sound, Europe is not the best when it comes to making decisions on short notice. Or any decisions for that matter. Especially ones which leave Greece in the same predicament as before, and when the country will certainly need more bailouts down the road, because "cutting" debt down to only 129% of GDP does leave some things lacking. In the meantime, assuming everything goes according to status quo plan, here is a timeline and breakdown of events in the aftermath of today's meeting.

Frontrunning: February 20

• Germany FinMin: More Talks Needed On 2nd Greece Bailout Plan (MarketNews)
• You stand up to the bankers, you win - Icelandic Anger Bringing Record Debt Relief in Best Crisis Recovery Story (Bloomberg)
• Iranian ships reach Syria, China warns of civil war (Reuters)
• Men's suit bubble pops? Zegna CEO Says China Sales Slowing (WSJ)
• German presidency row shakes Merkel's coalition (Reuters)
• Greece must default if it wants democracy (FT)
• Decision day for second Greek bailout despite financing gaps (Reuters)
• So true fair value is a 30% discount to "market" price? Board of Wynn Resorts Forcibly Buys Out Founder (WSJ)
• Spain Sinks Deeper Into Periphery on Debt Rise (Bloomberg)
• Walmart raises stake in China e-commerce group (FT)
• Iron Lady Merkel Bucks German Street on Greek Aid (Bloomberg)

The Week In Review And Key Global Macro Events In The Coming Week

The week ahead is fairly light on big ticket data releases, but what is released will provide more evidence of the strength of global activity. The most important of these will be the flash PMIs for China and the Euro area and the German IFO reading . There is no consensus expectation for the China print, however the Euro area indices are both expected to rise slightly, as is the German IFO. In terms of cyclical hard data, Taiwan export orders and IP for Singapore and Taiwan, Euro area industrial orders and trade data from Japan and Thailand will be notable. Admittedly the data from Asia is likely to be complicated by Chinese New Year which fell in the third week of January, and presumably this is why the consensus expects such a sharp drop in Taiwan IP, however the data are still worth watching for indications of the strength in global activity. Generally, consensus expectations for these prints are not particularly encouraging and any 'beats' would be a positive surprise. It goes without saying that ongoing negotiations towards signing off on Greece's second package will also remain on the radar screen. As we write, Reuters has posted suggestions that the debt swap will be open by March 8 and complete by March 11.

As WTI Passes $105, Guardian Says Iran "Military Action Likely", Would Send Crude Soaring

Between the Chinese 'surprise' RRR and the Iran export halt to UK and France (and escalating tensions), Oil prices are off to the races this evening. WTI front-month futures have just broken $105 (now up more than 10% in the last two weeks), the highest levels in over nine months and just 8% shy of the 5/2/11 post-recession peak just under $115. Brent (priced in EUR) remains off last week's intraday highs (as EUR strengthens) but still above the pre-recession peak but in USD it traded just shy of $121 - well above last week's peak. Of course, this will be heralded as a sign of demand pressure from a 'growing' global economy rather than the margin-compressing, implicit-taxation, consumer-spending-crushing supply constraint for Europe and the US that it will become in the not too distant future. As we post, The Guardian is noting that US officials are commenting that "Sanctions are all we've got to throw at the problem. If they fail then it's hard to see how we don't move to the 'in extremis' option." The impact of any escalation from here is gravely concerning with PIMCO's $140 minimum and SocGen's $150-and-beyond Brent prices rapidly coming into focus - and for those pinning their hopes on the Saudis coming to the rescue (and fill the Iranian output gap), perhaps the news that our Middle-East 'allies' cut both production and exports in December will stymie any euphoria.

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