Greek Police Threaten IMF Arrests Due To "Austerity Demands"
As
the headlines from Europe become more and more realistic (and
ironically more and more Onion-worthy), Reuters notes one of the more
interesting examples of just how the Greek people are feeling. The
Federation of Greek Police have accused EU/IMF officials, in a
formal letter, of "...blackmail, covertly abolishing or eroding
democracy and national sovereignty". While violence erupts
among the largely unemployed youth, the supposedly 'grown-up and
responsible' segment of the Greek society, which for now at least appears not to be on strike,
is recognizing the wholesale destruction of their society (as 22% cuts
in minimum wage for instance are thrust upon them). The Greek police,
who have stood against the protesters and done their jobs facing
threats and anger, are seemingly expressing solidarity with the
antagonists as they call out ECB, European Commission, and IMF leaders
for their destructive policies. At what point do the police throw down their riot shields and follow the Greek people into their 'Bastille'?Rioters clash with Greek police at Athens protest
Eric De Groot at Eric De Groot - 21 minutes ago
Austerity over liquidity, a policy that benefits the creditors and the
invisible hand over the populous, carries social consequences. This problem
of conflicting interests has yet to be settled and will likley worsen in
the coming months. Headline: Rioters clash with Greek police at Athens
protest ATHENS, Greece (AP) -- Greek riot police have fired tear gas to
disperse rioters throwing petrol...
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content, and more! ]]
Remember the pomp and circumstance with which Venizelos showed up in Brussels yesterday carrying a two paragraph statement from
Lucas Papademos in hand, saying Greece promises it has agreed to agree
to make idiotic "pledges"? Well, as was largely suspected by cynical
old us, even that "deal" has lasted not even a whopping 24 hours.
- GREECE'S KARATZAFERIS SAYS CAN'T VOTE FOR TROIKA ACCORD AS IS - BBG
- GREEK FAR-RIGHT PARTY LEADER SAYS ELECTIONS WOULD NOT PROVIDE A SOLUTION NOW, WOULD NEED MORE TIME
- Greeek far right party leader says asks for reshuffle of Papademos technocrat gov
Greek Meeting Ends Without Conclusion
http://www.zerohedge.com/news/greek-meeting-ends-laos-head-refuses-sign-deal
10 Things That Every American Should Know About The Federal Reserve
http://theeconomiccollapseblog.com/archives/10-things-that-every-american-sho...
Quarterly Loss Hits $3.3B at Postal Service
http://hosted.ap.org/dynamic/stories/U/US_POSTAL_PROBLEMS
GOP Strategist: Ron Paul Will Be on GOP Ticket
http://www.youtube.com/watch?v=StQr-dlxaBM
http://www.wnd.com/2012/02/20-of-republicans-leaning-to-obama/
Washington Footing the Cell Phone Bill for Millions of Low Income Americans
http://news.yahoo.com/washington-footing-cell-phone-bill-millions-low-income-...
Banks, States Reach $26 billion Foreclosure Deal
http://www.marketwatch.com/story/banks-states-reach-26-billion-settlement-201...
Do You Really Have What it Takes? Adaptability?
http://modernsurvivalblog.com/survival-skills/do-you-really-have-what-it-take...
The Wall Street Conspiracy: Ascent of the Psychopaths and the Culture of Death
How Societies And Civilizations Typically End
Admin at Marc Faber Blog - 3 hours ago
Near the end of a society or civilization, they typically become very
corrupt. Either the government runs the businesses or the businesses run
the government. - *in KWN*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
To Lend Money To The Most Indebted Nation In The World Is Incomprehensible To Me
Admin at Jim Rogers Blog - 3 hours ago
US T-bills are at historic lows. To lend money to the most indebted nation
in the world is incomprehensible to me. This is a bubble. - *in Investment
Week*
*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.*
Historical Stock Valuations, Think Critically Then Act
Eric De Groot at Eric De Groot - 4 hours ago
Be wary of long-term conclusions based on short-term and incomplete observations. The headline/suggestion that stocks are least loved since 80’s is not inaccurate but also deceptive. The chart 1 illustrates stock’s historical valuation based on dividend yields*. The S&P 500’s dividend yield, roughly 2% which is below its long-term historical norm (dotted black line) doesn’t come close to... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Why Is Gasoline Consumption Tanking?
The cost of oil has declined sharply from mid-2008, yet consumption has tanked from 54.8 MGD in July 2008 to 42.4 MGD in July 2011. That's a hefty 21% decline. What other plausible explanation is there for the decline from 42.4 MGD in July 2011 to 30.9 MGD in November 2011 other than a dramatic decline in discretionary driving? That 27% drop in a few months in unprecedented, except in times of war or sharp economic contraction, i.e. recession. If we stipulate that vehicles and fuel consumption are essential proxies for the U.S. economy, then we can expect a steep decline in economic activity to register in other metrics within the next few months. Such a sharp drop would of course be "unexpected" given the positive employment data of the past few months. But as the data above shows, employment isn't tightly correlated to gasoline consumption: gasoline consumption reflects recession and growth. In other words, look out below.
Europe Ends Week On Ugly Note
We
have been warning of the bearish divergence in European credit markets
all week and today saw that trend continue as the best-performers of
the year-to-date become the biggest losers on the week. Financials and high-yield (crossover) credit have dramatically underperformed
this week (with XOver +50bps touching 600bps once again) as credit
overall trades considerably wider than before the NFP-print jump.
Investment grade is wider but diverging a little today as decompression
trades are laid back out and up-in-quality trades are reconsidered -
and away from financials which have seen their senior unsecured credit spreads jump from under 190bps to almost 220bps on the week.
Broad equity markets in Europe also saw their worst week of the year
but are lagging the credit sell-off for now and sit (for context) right
around the pre-NFP jump levels. Sovereigns were mixed on the week with
the last couple of days seeing notable deterioration. Spanish spreads
are +33bps, Italian spreads are -9bps on the week but are 25-30bps off
their tights but it appears Portugal was the darling of the ECB this
week as it managed an impressive 100bps compression (10Y now almost
500bps off its wides on 1/30) but this impressive tightening only gets
the peripheral nation back to 1050bps (and mid-January levels - still
triple the level of risk of a year ago).The New Youth Normal - Your Parents' Basement
Recent
times have been particularly hard on young adults. As we look around
the world at Europe and the Middle-East, it is all too often the youth
that are leading the social unrest as they again and again are the
hardest hit by the global deleveraging (and admittedly most socially
connected). The US is not insulated from this (though perhaps more
Xanax-subdued) as youth unemployment is around 20% (with 16-19 year-olds
around 25%). As Pew Research Center notes though, that fully 55% of those aged 18-24 (and 4% of 25-34 year olds) say young adults are having the toughest time in today's economy.
The day-to-day realities of economic hard times are somewhat shocking
for a country supposedly so far up the developed spectrum as roughly a
quarter of adults aged 18 to 34 (24%) say that, due to economic
conditions, they have moved back in with their parents in recent years
after living on their own. In the 25 to 29 age range a shocking 34% have moved back home with mom and pop (hardly likely to help with the huge shadow housing inventory overhang we discussed yesterday)
Finding a job, saving for the future, paying for college, and buying a
home are seen as dramatically harder for today's young adults compared
to their parent's generation while Facebook saves the day as staying
in touch with friends/family is the only stand out aspect of life that
is 'easier' for today's youth. As these increasingly disenfranchised
young adults make some of life's biggest transitions (or not as the
case seems to be), we wonder just how long it will be before Al-Jazeera
is reporting on the Yankee-Spring and showing video of young hoody-wearing Americans throwing their 'Vans' at 80 inch plasma TVs; or maybe the BLS will decide to redefine basement-dwelling (or rioting) as a full-time job.The Shorts Have Left The Building
Following the market's "sudden" realization in December that the ECB had been quietly pumping $800 billion, or more than the entire QE2, into the market (sterilized? yeah right - when one lends out cash in exchange for worthless crap nobody else wants, and certainly not the Bundesbank, it is not sterilized), it became all too clear that the market's response in 2012 would be a deja vu of 2011, if only for a while. Sure enough 2012 has been a tic-for-tic transposition of the market move in 2011. The only question is how far it would go, before, like back in 2011 again, it rolled over. To get a sense of one of the best indicators of an overextended rally, we go to the NYSE whose short interest update confirms that the rally, at least based on ongoing short squeeze dynamics (which as we said in mid-January has been the best strategy for a bizarro market) is now over. Sure enough, according to the latest data, short interest has collapsed from a multi-year high in September of 16 billion shorts, which coincided with the market lows, to essentially the lowest print seen in the past 4 years at 12.5 billion shares, a level which has not been breached once in the New Normal phase of market central planning. In other words, those who look at short interest and covering as a market inflection point, the time has come to take advantage of the short mauling, and bet on the market rolling over. That said, all it takes is for a central bank chairman somewhere to sneeze the wrong way, and this best laid plan will promptly collapse.
Whither Crude
As
Brent and WTI prices ebb and flow from local and global fundamentals
and risk premia, Morgan Stanley notes that to be bullish from here, one
would need to believe a supply disruption is coming. Considering
conflict with Iran, sustained Middle East tensions, and the potential
for sustained supply disruption their flowchart of price expectations
notes that prices follow inventories and that as price rises, fundamentals will weaken (as without an OPEC production cut, inventories would balloon by 2Q12) and therefore to maintain current prices across the curve, supply risk premia must continue to grow. They raise their estimate for 2012 average Brent price to $105/bbl
from $100/bbl which leaves them bearish given the forward curve priced
around $115/bbl, as their base case adjusts to a belief that Middle
East tensions persist but a conflict with Iran does not occur as they
address QE3 expectations and EM inflation/hard landing concerns.China January Oil Imports Rise To Record
Say what you will about the tenets of Chinese economic slowdown assumptions and what not (despite inflation obviously continuing to be a rather pesky issue), at least its steadfast determination to have the world's largest crude oil stockpile is an ethos. At 23.4k metric tons of imports in January, China just imported the most crude in its history, despite the traditionally slow period around the Chinese new year. The trendline is unmissable - at this rate China will become the world's largest importer of Crude in a few short years, surpassing the US easily with its 28K metric tons of imports in a couple of years. Oh, and anyone who thinks that China will volunteer to lose Iran as a primary source of crude imports as its oil is "liberated" by Western powers as the country is obviously en route to having the world's largest crude stockpile (as to why this may be the case, read here), we have a bridge to Isfahan to sell you.
Prequel To The Main Event: Video Of Greek Warm Up Scuffles With Police
While
the bulk of today's Syntagma Square drama will come at a later hour,
once the cabinet convenes at around 6 pm (or likely much later because
as of this point there is no agreement on the Troika deal which kills
it as per Troika demands), or maybe even tomorrow, we have already seen
a prequel of what to expect courtesy of the now traditional exchange
of Molotov cocktails and tear gas between Greek protesters and riot
police. From Bloomberg:
"Greek police used tear gas against masked protesters in central
Athens after they attacked police and stores at the end of a march
against austerity measures. Greek unions held their second strike in a
week against the proposed measures as Finance Minister Evangelos
Venizelos pressed lawmakers to yield to conditions for a bailout,
saying a refusal would open the way for the country’s exit from the
euro. Nicole Itano reports on Bloomberg Television's "InsideTrack."Frontrunning: February 10
- Eurozone dismisses Greek budget deal (FT)
- Germany Says Greece Missing Debt Targets in Aid Rebuff (Bloomberg)
- Germans concerned over Draghi liquidity offer (FT)
- Azumi Says Japan Won’t Be Shy About Unilateral Intervention (Bloomberg)
- Schaeuble Signals Germany Is Flexible on Revising Terms of Portuguese Aid (Bloomberg) - food euphemism for "next on the bailout wagon"
- Venizelos Tells Greek Lawmakers to Back Budget Cuts or Risk Exiting Euro (Bloomberg)
- Putin May Dissolve Ruling Party After Vote (Bloomberg)
- HK Bubble pops? Hong Kong Sells Tuen Mun Site to Kerry for HK$2.7 Billion, Government Says (Bloomberg)
- Gross Buys Treasuries as Buffett Says Bonds Are ‘Dangerous’ (Bloomberg)
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