Greek Colonization 102: Europe Calls For Reconstruction Commissioner In Athens

First they force now officially defaulted Greece to bailout European banks courtesy of a Greek funded Escrow package, then they make Greek pays for the privilege of having a job, then they send in German tax collectors, and finally they prepare to pilfer the gold. And simply because nobody is home, the colonization continues, with the formal take over of the country by a "Kommisar"

• JUNCKER CALLS FOR RECONSTRUCTION COMMISSIONER FOR ATHENS: WELT
• JUNCKER COMMENTS IN INTERVIEW WITH GERMANY'S DIE WELT

And since not even this colonial escalation will do much if anything to stir the locals, we can't even imagine what the next annexation steps will be.

Sheer Mirror Image Insanity: S&P Hits New Multi Year Highs As 10 Year Bond Slides Below 1.90%

There no longer are any words left to explain what is going on in this centrally planned market (technically "enantiomeric" may be a word, but nobody would get it). It is sheer and utter bipolar insanity, when the S&P can hit multi-year highs even as the 10 year drops below 1.90%, something which in the pre-New Normal would be completely impossible. We wish luck to anyone "trading" a market (read trading alongside Central Bank X, with momentum escalated courtesy of Algo Y, regulated by the SEC no less) which is now pricing in extreme deflation and inflation at the same time, or, simply said, much more QE from the Chairman, record EUR Brent be damned. Oh, and with crude (in USD) back on track to surpass $110, we can't wait for the Department of Truth to tell us how February consumer confidence is literally off the charts.





UK has Run Out of Money
http://www.telegraph.co.uk/news/politics/9107485/George-Osborne-UK-has-run-ou...

5 Reasons Iran Is NOT A Threat To The U.S.
http://www.infowars.com/5-reasons-iran-is-not-a-threat-to-the-u-s/

Here's The REAL Reason Gasoline Prices Have Been Surging In The US
http://www.businessinsider.com/heres-the-real-reason-gasoline-prices-have-bee...

There's Been A Major Swing In What People Are Scared Of In Just The Last 8 Days
http://articles.businessinsider.com/2012-02-25/markets/31098441_1_gasoline-pr...

U.S. National Debt Is 5000 Times Larger Than When The Federal Reserve Was Created
http://endoftheamericandream.com/archives/is-the-federal-reserve-doing-a-good...

U.S. Water Bills to Triple
http://washingtonexaminer.com/politics/washington-secrets/2012/02/more-bad-ne...

HAM in a Can
http://www.youtube.com/watch?v=bugxUCBQ9v4

UN Agency Seeks to Quell Fears over its plans for the Internet
http://www.foxnews.com/world/2012/02/27/un-agency-seeks-to-quell-fears-over-i...

Tavakoli: The Great MF Global Comedy Cover Up

more »

 

Concentration of Capital Leads Change

Eric De Groot at Eric De Groot - 2 hours ago

Trends are often pushed to extremes within the confines of cycles. These extremes are motivated by greed and fear. Greed buys until the sellers have been exhausted. Fear sells until no buyers remain. After 1914, capital fled outward from London until the trends based on greed became concentrated by late 1928. Capital concentrated in the 30 Dow Industrials over the S&P 500 (chart 1), and... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

 

There Is No Other Option To Keep The System Going

Admin at Marc Faber Blog - 3 hours ago

Government debt is rising everywhere. We have stimulus packages, we have central banks that will print money because there is no other option to keep the system going. - *in Money News* *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

Ireland Mentions "R" Word, EUR Plunges

Just as we scripted, the temptation to migrate from the status quo in Europe was just too high for the other peripherals and Ireland just gained first / next mover advantage by daring top mention the "R" word. As Bloomberg notes:

• *IRELAND TO HOLD VOTE ON EU FISCAL COMPACT, KENNY SAYS

We would imagine that Barroso and his pals are scrambling now that another 'Referendum' is on the cards (and we are checking what 'referendum' is in Portuguese) and while fascism in perpetuity has been priced into Euro, the possibility that democracy rears its ugly head has just sent the EURUSD tumbling.




Did You BTFD ?

Silver Passes 30% YTD As Catch 22 Economic "Updates" Becomes Blurry

The economic data keeps coming fast and furious, with Consumer Confidence just printing at a blistering 70.3 on expectations of 63.0, up from 61.5? Why? Because crude is approaching records and gas is $5? No - because the market is up of course on trillions in liquidity. So confidence is up because the market is higher, and the second the higher than expected confidence number prints, the market is higher on that alone. Catch 22 FTW, and it is not alone - every other confidence-based indicator in the past 3 months has beat! Because human beings, indoctrinated to only care about nominal gains, really are that dumb - something well known and appreciated by the central bankers. In other news, we joked before it printed that the Richmond Fed would come several standard deviations above the consensus. Sure enough, the actual print came at 20, naturally far higher than the average estimate of 14, and in fact above the highest estimate of 17. The good news: silver has just hit a 30% YTD return.

As ECB Finds Defaulted Bonds To Be Ineligible Collateral, Bundesbank Is Stuck Holding The Defaulted Greek Bag

Submitted by Tyler Durden on 02/28/2012 - 07:25 Bond Central Banks European Central Bank France Germany Greece ratings Reuters Yesterday following the S&P announcement of the Greek 'selective default', we had one simple question to the ECB:

Today we get the answer.

It Begins: ECB Calls For Bids In 3 Year LTRO

So it starts - the ECB has just announced its request for bids for the next all important 3 year (1092 Day) Discount Window, pardon, LTRO operation, which is fully priced in now (and following which the market will look toward the Fed for future easing - enter Bernanke and his Humphrey Hawkins testimony tomorrow), and which will create even more negative carry for Euro banks, as the insolvent hedge fund formerly known as the ECB lends out cash at 1% (in exchange for what can generously be described as used candy bar wrappers) and pays back 0.25% on the same cash redeposited back at the ECB. For the results of operation tune in at 11:15 am tomorrow local time or 5:15 Eastern. The only practical result of this operation will be the expansion of the ECB's deposit facility to the mid €700 billions. As for what the final size of the LTRO will be, just ask your hotdog vendor: he has as much guidance as anyone else. Regardless of the size outcome, one thing is certain - the banks that are found to use the ECB's Discount Window should prepare for major stock pain, as the market, devoid of easy targets, focuses on them next as the European stigma trade becomes the hedge fund divergence trade du jour. After all there is a reason why the Fed's Discount Window expansion lasted for all of 3 months, and ended up hurting the participating banks (ahem Dexia) more than any other Fed concoction during the early stages of the Depression.

A Behind The Scenes Glimpse Into The Magic Of The Market

While the discipline of behavioral finance is relatively new, the performing art of magic has long exploited many of the same principles about human nature and decision-making.   While much is made of the smoke-and-mirrors market we exist in, Nic Colas, of ConvergEx Group, reviews the 'Basics' of this ancient form of entertainment, courtesy of a recent Smithsonian magazine article by Teller (the quiet half of Penn & Teller), and draws some analogies to the modern world of investing and economic analysis.  The seven crossover points include pattern recognition, overconfidence, and the illusion of free choice. It seems to us that investors can benefit from reminding themselves that their own powers of perception are severely limited.   As Nic points out, if we can be regularly fooled by a Las Vegas magic act, then many of the same flaws in our thinking must be at play when we watch the screens at work.  We seek out patterns that don’t really exist.  We confuse choice with freedom. We grow emotional and limit our ability to process information.  Watching a show, this is amusing.  Making investment decisions, not so much.

No Housing Recovery - Case Shiller Shows 8th Consecutive Month Of House Price Declines

Little that can be added here. The December Case Shiller came, saw, and shut up all those who keep calling for a home price recovery. The Index printed at 136.71 on expectations of 137.11, with the prior revised to 138.24. The top 20 City composite was down -0.5% on expectations of a 0.35% drop. 18 out of 20 MSAs saw monthly declines in December over November, with just the worst of the worst - Miami and Phoenix - posting a dead cat bounce, rising 0.2% and 0.8% respectively. And granted the data is delayed, but the fact that we have now had 8 consecutive months of home price declines even with mortgage rates persistently at record lows, and the double dip in housing more than obvious, can we finally shut up about a housing bottom? Because as Case Shiller's David Blitzer says: "If anything it looks like we might have reentered a period of decline as we begin 2012.” QED

Goldman: Germany Is Now On The Hook By €1 Trillion (Or 40% Of GDP)

Earmuffs time for our German readers.


 

Durable Goods Big Miss -4%, Expected -1%, Biggest Sequential Drop Since January 2009

And so the transition to the QE3 "economic disappointment" regime begins. Because after the ECB is done with the LTRO it's over for global QEasing, and the Fed is next. Remember- Bernanke's semiannual testimony to Congress is tomorrow. Whatever will he say....

• Headline Durable Goods plunges from +3.2 to -4% on expectations of -1%
• More painfully, Durable goods non-defense ex aircraft down a whopping -4.5% on Exp of -1.3%, down from +3.4%.

Visually, this is the lowest Durable Goods number since January 2009

So Greece 'Defaults' And Europe Moves On...

So far there are no dramatic consequences of the Greek default.  The ECB did say they couldn’t accept it as collateral, but national central banks (including Greece’s somehow solvent NCB) can, so no real change.  We will likely get a Credit Event prior to March 20th once CAC’s are used to get the deal fully done.  Will the market respond much to that?  Probably not, though there is a higher risk of unforeseen consequences from that, than there was from the S&P downgrade. It just strikes us that Europe wasted a year or more, and has created a less stable system than it had before. Tomorrow’s LTRO is definitely interesting.  It seems like every outcome is now bullish – big take up is bullish because of the “carry” trade.  Low take up is bullish because “banks are okay”. Any weak bank looking to borrow from the LTRO to buy sovereign debt would be insane to buy bonds longer than 3 years and take the roll risk, but on the other hand, the weakest and most insolvent, got there by doing insane things in the first place.

Bill Gross On Football As Investing, And Why Everyone Now Plays Defense

Bill Gross' monthly letters are always a fresh source of jovial imagery, although the bond king may have outdone himself in his latest monthly letter which collapses the principles of investing onto the football field: "My point about pigskin offense and defense is the perfect metaphor for the world of investing as well. Offensively minded risk takers in the markets have historically been the ones who have dominated the headlines and won the hearts of that beautiful gal (or handsome guy).... Canton, however, has an approximately equal number of defensive in addition to offensively positioned inductees, so there must be a universally acknowledged role for both sides of the scrimmage line. What fan can forget Mean Joe Greene, Deion Sanders or Mike Ditka? The old, now politically incorrect showtune laments that “you gotta be a football hero, to fall in love with a beautiful girl,” but football and any of life’s heroes can play on either side of the line, it seems." And it only gets better. While at its heart Gross' latest is merely yet another lamentation against the confines of the financially suppressive regime that arises from ZIRP and ends with what many expect is a whimper (when in reality they all forget to factor in the facility of hitting the CTRL+P keys as many times as necessary), the flourish of abandon this time around is palpable. We would not be surprised to soon see Gross hang up his offensive (and defensive) jersey, and sit back and enjoy the coming lunacy from a distance (but hopefully not before he allocates just a little to the Ron Paul SuperPAC).

Daily US Opening News And Market Re-Cap: February 28

Stocks advanced as market participants looked forward to tomorrow’s 3yr LTRO by the ECB where the street expects EU banks to borrow around EUR 400-500bln. All ten sectors traded in positive territory for much of the session, however less than impressive demand for the latest Italian government paper saw equity indices lose some of the upside traction. Of note, the ECB allotted EUR 29.469bln in 7-day operation, as well as EUR 134bln for 1-day in bridge to 3yr loans. In other new, although Portugal's finance minister announced the country has passed its 3rd bailout review by the EU/IMF, this did not stop S&P's Kraemer saying that if there is a probability of default, it is higher in Portugal than in any other Euro-Zone country. 

Chatham House: Gold Standard Impractical But Gold Hedge Against Declining Values of Key Fiat Currencies

While the gold standard may no longer exist, nations and international organizations still have 30,877 metric tons of bullion reserves, valued at about $1.77 trillion. The dollar has been the world’s reserve currency since the U.S. and allies agreed at the 1944 Bretton Woods conference to peg it to a rate of $35 per ounce of gold. It remained the most- traded legal tender after global currencies began freely floating in the early 1970s. The greenback dropped 12 percent against a basket of six major currencies since March 2009. The U.K. suspended the gold standard in 1931, Chatham House said. “Greater discipline on financial markets might have been helpful in inhibiting the reckless banking and excessive debt accumulation of the past decade,” the task force said. “However, with the onset of the global crisis, had gold had a more formal role to play, the rigidity it imposes might also have been a handicap when a more flexible policy response was required.” “For gold to play a more formal role in the international monetary system, it would be imperative for it neither to hamper the system’s performance nor to create unacceptable constraints on national economic policies,” the task force said.  Gold may “continue playing a significant role in the international monetary system, serving as a valuable hedge and safe haven, particularly in times when tail risks predominate.”




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