The Fool's Game: Unravelling Europe's Epic Ponzi Pyramid Of Lies
Now in the curious world we live in today; this only came out in public as the answer to a question raised in the German Parliament. Some reflection on the nature of these guarantees, that the European Union had decided not to tell us about, causes me to think of them as “Ponzi Bonds.” These are the seeds of a great scheme that has been foisted upon us. Bonds of a feather that have flocked together and arrived with the black swans one quiet Wednesday afternoon. The quoted and much ballyhooed sovereign debt numbers are now known to be no longer accurate and hence the lack of credibility of the debt to GDP data for the European nations. Stated more simply; none of the data that we are given about sovereign debt in the European Union is the truth, none of it. According to Eurostat, as an example, the consolidated Spanish debt raises their debt to GDP by 12.3% as Eurostat also states, and I quote, that guaranteed debt in Europe “DO NOT FORM PART OF GOVERNMENT DEBT, BUT ARE A CONTINGENT LIABILITY.” In other words; not counted and so, my friends, none of the data pushed out by Europe about their sovereign debt or their GDP ratios has one whit of truth resident in the data.Terminated CBO Whistleblower Shares Her Full Story With Zero Hedge, Exposes Deep Conflicts At "Impartial" Budget Office
Yet another whistleblower has stepped up, this time one already known to the general public, and one that Zero Hedge covered just over a month ago:
we refer to the case of former CBO worker, Lan T. Pham, who, as the
WSJ described in early February, "alleges she was terminated [by the
CBO] after 2½ months for sharing pessimistic outlooks for the banking
and housing sectors in 2010" and who "alleges supervisors stifled opinions that contradicted economic fixes endorsed by some on Wall Street, including research from a Morgan Stanley economist who served as a CBO adviser." As we observed in February, "what is most troubling is if indeed the
CBO is nothing but merely another front for Wall Street to work its
propaganda magic on the administration. Because at the core of every
policy are numbers, usually with dollar signs in front of them, numbers
which have to make sense and have to be projected into the future, no
matter how grossly laughable the resultant hockeystick." As it turns
out, somewhat expectedly,
the WSJ version of events was incomplete. There is much more to this
very important story, one which has major implications over "impartial"
policy decisionmaking, and as a result, Ms. Pham has approached Zero Hedge to share her full story with the public. Will Hungary Be The Next Iceland? PM Orban: "Hungarians Will Not Live As Foreigners Dictate"
When it comes to being a NWO debt slave, one can accept their fate demurely and bent over, like a conditionally habituated dog electroshocked into perpetual submission just as the banker elites like it, with threats that the world would end the second one dared to change the status quo (see Greece), or one can do something about being a debt slave. Like Iceland. And then rapidly proceed to be the best performing economy in Europe. And reading some of the latest news out of Hungary, which has to count its lucky stars is not stuck in the inflexible nightmare that is the mercantilist Eurocurrency union, gives us hope that we may soon witness the next sovereign rebellion against the banker yoke. The WSJ reports: "Hungary's premier fired a new broadside in the country's running battle of wills with the European Union, saying that Hungarians should be free to make their own laws without interference from Brussels. Speaking to a large crowd of supporters celebrating the anniversary of a 19th-century Hungarian revolt against Austrian rule, Prime Minister Viktor Orban said: "Hungarians will not live as foreigners dictate." This has promptly generated the anticipated response from European unelected dictator Barroso, who minutes ago said that Hungary's Orban doesn't get democracy. Oh, we think we does. What he doesn't seem to get, or like, is existence in a banker-governed technocratic, klepto-fascist state, in which the peasantry is merely an intermediary vessel for asset confiscation by insolvent banks. Like Greece... which however already is the butt of all jokes of personal submission to a foreign oppressor, so there is no dignity in kicking a dog that is down.Source Links for Today’s Items:
Officials at Fitch indicated that the
UK’s outlook is negative and has a greater than 50% chance of losing its
AAA rating within 2 years. Like the U.S., the UK should have sadly
lost that some time ago. British Gilts have lost 2.6 percent as
compared to U.S. Treasuries loosing 1.7 percent this year.
Foreign demand for U.S. Treasury debt
rose 0.9% to a record high in January. China, the largest buyer of
Treasury debt, increased its holdings for the first time in six months
to $1.16 trillion. Investors and other countries actually believe U.S.
government debt is considered one of the safest investments. Despite
the fact that S&P lowered the Treasury debt from AAA to AA+.
The U.S. and Britain, in a bilateral agreement, have decided to release strategic oil stocks.
The public reason is so that it does not derail their economic growth. The real reason is politics. Obama and Cameron cannot continue to lead when their respective economies are in ICU. At any rate, the nations security will be sacrificed for politics as the dollar continues its collapse.
The public reason is so that it does not derail their economic growth. The real reason is politics. Obama and Cameron cannot continue to lead when their respective economies are in ICU. At any rate, the nations security will be sacrificed for politics as the dollar continues its collapse.
Some hedge funds are throwing in the
towel. At the end of 2011, 67% of hedge funds were below their
high-water marks where they can get paid. The looses being seen are just
to big to overcome. As these hedge fund managers get more desperate,
they will be making bolder bets with their clients money.
Pierre Lassonde believes that the Chinese
could initiate the last phase, or mania phase, of the gold bull market.
Today over 50% of all of the gold sold on a yearly basis is sold in
two countries, China and India. In reviewing what happened in the
1970′s, it would not be a surprise to see the price of gold go up at a
rate of 20% in a day or two. Of course, with paper manipulation, do not
be surprised with another so-called unforeseen sell-off Sunday evening.
More than five years after real estate
prices began to tumble, Americans are finally starting to get property
tax breaks on their devalued homes. In 2011, property taxes increased
1.2 percent… Adjusted for inflation, tax collections actually declined
0.9%. But there are laws that limit the amount of decrease and where
are the local governments now going to get money from? Well, first of
all there is 17 cent New in town tax. Then there is the 45 cents row
boat under the wharf tax and the one dollar, leaving your junk around
the wharf , tax.
What if an alien came down to earth and
wanted to know about government. This sort of humorous video
illustrates on how an average person would explain government.
Please take a look at Favian4Liberty’s
video about how senior leaders in the U.S. government have become the
domestic enemy of the U.S. Constitution.
Finally, Please prepare now for the escalating economic and social unrest. Good Day
America Doesn’t Have Any Money Saved For A Rainy Day
Admin at Jim Rogers Blog - 2 hours ago
China has a lot of money saved for a rainy day and when it rains they’re
going to spend. America doesn’t have any money saved for a rainy day. And
when it rains we’re going to try to borrow it or print it, neither of which
is good for America or for the world. - *in BI*
*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.*
Equities: I Am Very Cautious
Admin at Marc Faber Blog - 2 hours ago
Right now, for the next one or two months, I don't think that stocks will
go up a lot. I personally think they will correct.
But long term, I still like Asia. My concern is if the Chinese economy
slows down meaningfully that we could have economic weakness spreading
around Asia as well, as well as in countries that supply commodities to
China, like Australia, Brazil, Argentina, and so forth.
Right now, say for the next two months, I'm very cautious.* - in a recent
interview with oilprice.com*
Related, iShares Russell 2000 Index ETF (IWM)
*Marc Faber is an international investor kn... more »
U.S.: No Deal to Release Oil Reserves
Eric De Groot at Eric De Groot - 3 hours ago
At least not until money is properly positioned. Chart: Crude Oil (WTI) and
Crude Oil Diffusion Index (DI) Headline: U.S.: No Deal to Release Oil
Reserves The Obama administration hasn't reached an agreement with the U.K.
to release crude oil from its emergency reserves and a report suggesting
otherwise was inaccurate, White House spokesman Jay Carney said Wednesday.
U.S. crude...
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content, and more! ]]
Market Says Trouble Ahead, But Don't Expect Anyone To Listen
Eric De Groot at Eric De Groot - 3 hours ago
Shorting the stock, bank, or any sector of a liquidity driven market is a
dangerous proposition. Oversold, an overused and highly ambiguous technical
term often used to imply a short term trend inflection, no longer applies
to the banking sector. The banking sector was “oversold” in 2009 and 2011
(see chart 1). In all fairness, “oversold” has a nasty habit lingering
despite our emotional...
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content, and more! ]]
The Next Crisis
Admin at Jim Rogers Blog - 15 hours ago
It's only a matter of time before the next crisis comes. Maybe by the end
of this year, probably by the end of next year. -* in a recent interview*
*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.*
Tavakoli: An Anecdotal Peek at the Mispricing of Counter Party and Derivatives Risk
ince Morgan Stanley CEO Thinks Greg Smith's Op-Ed Was "Unfair", Here Are Some Questions
Where does one even possibly start with this: from the WSJ: "Morgan Stanley’s CEO James Gorman this morning criticized an op-ed written by a former Goldman Sachs Group employee, saying “I didn’t think it was fair.” Gorman, at a breakfast sponsored by Fortune Magazine in New York, said that he told the operating committee of his New York firm, not to try to take advantage of the criticisms of Goldman in the op-ed, which described a toxic culture in which profits come before client service."...“I don’t really care what one employee said,” said Gorman, who became CEO of Morgan Stanley at the beginning of 2010. “At any point, someone is unhappy… To pick a random employee, I don’t think it’s fair. I don’t think its balanced.” That's funny - Gorman is only the second CEO after Jamie Dimon to "not take advantage of the criticisms" and we wonder why? Could it have something to do with the fact that every single bank is in the same position, and both Dimon and Gorman know very they are both just one disgruntled employee away from having the truth about their own sinking ships exposed to the world? Could it also be that both of them also realize that with Wall Street compensation packages now effectively downshifted for good, that the incidence of precisely such "whistleblowing" Op-Eds will soar astronomically? Finally, could Mr. Gorman perhaps comment on the allegations of yet another whistleblower who emerged right here on Zero Hedge, who alleges that it was none other than Morgan Stanley who influenced the CBO in its "conclusions" over the implications of the robosigning scandal? We would be delighted in posting Mr. Gorman's view. Alternatively, we would be just as delighted in posting the views of his employees, whether happy or unhappy. Or at least those employees who are not fired in retribution for emailing Zero Hedge... wink wink Morgan Stanely - and now you know that we know that you know that we know.Guest Post: Lost Principles And Social Destruction
As I look out past the near horizon of this time, and this nation, I see considerable potential for a revitalization of that which is best in humanity. I see a population that strives for independence. I see a return to the entrepreneurial spirit of discovery. I see unhindered freedom of thought and action feeding a fire of creativity that inspires us to unimaginable heights. I see new expression given license not just by the masses, but by structures of a government which truly follows the will of the common man, and not the will of an elite few. I see America breathing full, eyes wide open and alive. However, this potential future would have to come at a considerable cost. America has so strayed from its founding roots that it now hungers; starving for lack of nutrients from its natural soil. As with all other catastrophic societies of the past, we have been manipulated and conned into overlooking and over-rationalizing astonishing injustice and in some cases, unmitigated evil. I frankly don’t know what else to call it. There are some acts of malevolence that go beyond human weakness and inadequacy and reach into realms of calculation that are so cold, so soulless, there is simply no other way to describe them. These actions and attitudes tend to run rampant in dying nations but are rarely singled out and criticized by those in the midst of the great fall. Each begins with the loss of particular principles and inherent morals that are normally prized under more healthy circumstances, but are despised in times of chaos and uncertainty.
Dylan Grice Explains When To Sell Gold
Following the latest temporary swoon in gold, the PM naysayers have once again crawled out of the woodwork, like a well tuned Swiss watch (made of 24K gold of course). Of course, they all crawl right back into their hole never to be heard of again until the next temporary drop and so on ad inf. Naturally, the latest incursion of "weak hand" gold longs is screaming bloody murder because the paper representation of the value of their hard, non-dilutable, physical gold is being slammed for one reason or another. Ironically, these same people tend to forget that the primary driver behind the value of gold is not for it to be replaced from paper into paper at some point in the future, but to provide the basis for a solid currency following the reset of a terminally unstable system, unstable precisely due to its reliance on infinitely dilutable currency, and as such any cheaper entry point is to be applauded. Yet it seems it is time for a refresh. Luckily, SocGen's Dylan Grice has coined just that with a brief explanation of "when to sell gold" which while having a modestly different view on the intrinsic value of gold, should provide some comfort to those for whom gold is not a speculative vehicle, but a true buy and hold investment for the future. And in this day and age of exponentially growing central bank balance sheets (chart), this should be everyone but the die hard CNBC fanatics. In brief: "Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability. Until it does, the temptation to inflate will remain, as will economists with spurious mathematical rationalisations as to why such inflation will make everything OK. Until it does, the outlook will remain favorable for gold. But eventually, majority opinion will accept the painful contractionary medicine because it will have to. That will be the time to sell gold."India Doubles Customs Duty on Gold Bullion, Central Banks buy on Dip
Gold traded lower on Friday, moving towards a third straight week of losses on the backdrop of a recovering US economy, which prompted investors to put their money in other vehicles, while India’s plan to double the import duty on gold bullion erased some early gains. On news that Finance Minister Pranab Mukherjee proposed to double the 4% customs duty on gold from April 2012, physical dealers saw some panic buying from India, the world’s largest gold consumer. In January, India raised the gold import duty 90% and doubled the tax on silver as the government is struggling with a growing fiscal deficit and looked to increase revenues. Growing subsidies for fuel and food have left the government struggling to meet its budget target. Indian investors, who are the largest consumer group of gold in the world, rushed to buy gold in advance of the government’s plan to increase the 4% customs tax in April 2012. The resulting gains where then eroded by stronger then expected US economic growth numbers.
The Schrodinger economy continues to chug along, with another economic data point miss to follow the blistering beats of the various regional Fed indices: Industrial production was unchanged in February after having risen 0.4 percent in January. Expectations were for a 0.4% increase relative to the pre-revision 0.0% change. Instead we got a slow down in expansion. From the Fed: "Previously, industrial production was reported to have been unchanged in January. Manufacturing output moved up 0.3 percent in February. Within manufacturing, the index for motor vehicles and parts fell 1.1 percent after jumping 8.6 percent in January, but the index for manufacturing excluding motor vehicles and parts increased 0.4 percent in February. Production at mines fell 1.2 percent, while the output of utilities was unchanged. At 96.2 percent of its 2007 average, total industrial production for February was 4.0 percent above its year-earlier level." In other words, instead of growing in February as previously expected, the economy will now have grown in January. Also Capacity utilization for total industry edged down to 78.7 percent, a rate 1.2 percentage points above its level from a year earlier but 1.6 percentage points below its long-run (1972--2011) average. This was the first decline in utilization since April 2011.
The Schrodinger Inflation: Ignore All Time High March Gas Prices, BLS Tells You Inflation Is Lower Than Expected
Just
spent a record high amount at the gas pump for this time of year? The
BLS says you didn't, and after all when it comes to reality, the BLS
has a right of first refusal. The just printed headline CPI came at
0.4%, just in line with expectations of 0.4%, while core CPI of 0.2%,
missed expectations of 0.3%. That's right: not only is inflation
meaningless, it is less than expected, leading to surge higher in
stocks, bonds and the EURUSD. As for those items which are once again
soaring in prices such as food and gas? Luckily, those can be
hedonically adjusted by everyone to virtually zero. (wait? You still pay
your mortgage or rent? Sucker!) Remember: the iPad is deflationary.Just Add Minotaur - The Greek Balance Sheet Labyrinth In All Its Insane Glory
Want to keep the minotaur perpetually lost? Forget the labyrinth: just let him loose in the epic disaster that is the Greek post-PSI balance sheet. Because anyone who still harbors quaint notions of pari passu sovereign debt is about to get an epileptic fit. As the BNP chart below shows, following the "successful" completion of the PSI, where we expect quite a few billion in UK-law holdouts to present a substantial headache to Greece as noted yesterday, the country will have not one, not two, not even three distinct debt classes of debt, but a whopping seven! Yup - one country, seven tranches of debt, in order of seniority: 1) EU-IMF Loans; 2) EFSF Loans; 3) SMP GGBs; 4) New GGBs; 5) T-Bills; 6) Old GGBs and 7) Other loans. So when that dealer sells you sovereign bonds from now on, we suggest getting some color on tranching, subordination, ranking, priority, security, guarantee, collateral, and in general everything else that is now forever gone in a post-pari passu world. And this is certainly not just Greece. With all of Europe undergoing the same stealthy "unsecured" debt-to-taxpayer higher lien restructuring, the same will happen in Portugal, Ireland, Spain, Italy, and eventually every other country, as the only real source of cash to keep the European once dream now nightmare alive are taxpayers, who directly have to fund out of pocket any hope of a residual welfare state... which incidentally at a hundred trillion or more in unfunded liabilities, is far more insolvent than Greece ever could be.
Daily US Opening News And Market Re-Cap: March 16
Ahead of the US open, markets are exhibiting some modest risk appetite, with all major European bourses trading higher, and financials outperforming all other sectors. There has been little in the way of key data from Europe, however we have seen the Eurozone Trade Balance coming in alongside expectations in the seasonally adjusted reading. Bund futures continue to move lower in recent trade as US participants come into the market, with the 10-year German yield crossing the 2% level to the upside, trading at a level not seen since the 10th February. Bunds may also have experienced some pressure following the release of a research note from a major US bank recommending rotation trade with the selling of bonds and the buying of equities. USD/JPY is seen trading higher ahead of the US open following the overnight release of some relatively dovish BoJ minutes, with commentary suggesting further easing in Japan in the future. Taking a look at the energy complex, The IEA have commented on yesterday’s speculation concerning the use of the US’ Special Petroleum Reserve, stating that they have not received any contact regarding any emergency oil release. As such, WTI and Brent crude futures are seen higher; however they have seen some selling off in recent trade.Overnight Bizarro Futures Levitation Driven By Spanish Balance Sheet Deterioration
A snoozer of an overnight trading session for now, with Asia rising modestly, Europe green and the now priced in futures levitation as US traders walk in. Nothing material to report, except the usual - the European leverage reality continues to deteriorate: as has been long discussed the taxpayer cost to rescue Greece keeps rising, and the latest and revised figure of the bailout is €172.6 billion, €43 billion than previously thought by some (as we have pointed out from the beginning the true cost of the bailout will hit €210 billion). We will shortly point out the total disaster that the Greek balance sheet is with 7 classes of debt outstanding post the OSI. More disturbing is the "austerity" report out of Spain, where we just learned that total public debt has hit €735 billion at the end of 2011, with regions debt at €140.1 billion, which means that public debt rose to 68.5% of GDP, from 61.2% a year prior. As Peter Tchir says: "We are still in no one cares mode, but the exposure the core has to the periphery is growing by the day. Germany's exposure is growing because of Target 2, and Spain and Italy are busy guaranteeing the debt of their banks. On the surface, all is calm. Below the surface it is messier than ever. They are doing everything possible to keep that mess covered because if it rises to the surface, it will be harder to control than ever before." As a reminder, this is precisely what happened in early 2011... and early 2010. You can only keep trillions of underwater debt under the rug for so long.Frontrunning: March 16
- Tapping oil from the SPR may be trickier than ever (Reuters)
- Why Quantitative Easing Is The Only Game in Town: Martin Wolf (FT)
- Lacker Says Fed May Need to Raise Target Interest Rate in 2013 (Bloomberg)
- Japan Debt-Financing Concern Clouds BOJ’s Bond Buying (Bloomberg) No worries - US will just buy Japan's bonds
- IMF Approves €28bn Loan to Greece (FT)
- Banks Want Fed to Iron Out 'Maiden' (WSJ)
- China 'Wealth Exodus' Underestimated (China Daily)
- Geithner Calls For Reforms to Boost Growth (FT)
- China Adds Treasuries For First Time Since July on Europe Woes (Bloomberg)
- Osborne Weighs 50p Tax Rate Cut To 45p (FT)
From One Ex-Goldmanite To Another: Nomi Prins Statement On Greg Smith's Resignation
I applaud Smith's decision to bring the nature of Goldman's profit-making strategies to the forefront of the global population's discourse, as so many others have been doing through books, investigative journalism, and the Occupy movements over the past decade since my book, Other People's Money, was written after I resigned from Goldman. It would be great if Smith's illuminations would serve as the turning point around which serious examination and re-regulation of the banking system framework would transpire.Please consider making a small donation, to help cover some of the labor and costs to run this blog.
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