Greece headed into ‘out of control bankruptcy’ – govt. salaries and pensions soon to go unpaid

by Mike Adams, Natural News:
The financial crisis in Greece is reaching an explosive tipping point, with the youth unemployment rate now exceeding a startling 50 percent and the government itself announcing it will be forced to stop paying salaries and pensions by June:
“We will be in wild bankruptcy, out-of-control bankruptcy,” said Theodoros Pangalos, the deputy prime minister of Greece. “The state will not be able to pay salaries and pensions. We have got until June before we run out of money.” (http://www.telegraph.co.uk/finance/financialcrisis/9262068/Greece-wil…)
The prime minister is further concerned his country could collapse into fascism. “You know how it happened in Germany — it started with the Jews, then the Communists, then everybody — it could happen here.”
Read More @ NaturalNews.com


 

Has JPMorgan Already Unwound Its Losing Trade?

On Thursday night, after it became clear that JPM has lost at least $2 billion on what is most likely an IG9 Index skew (Index less Intrinsics) trade gone horribly wrong, we first predicted (and promptly piggybacked on by other various financial blogs) that based on various factors, there is about $3 billion more in the pain trade coming in JPM's general direction, once IG9 blows out to catch up to a fair value not supported by JPM(artingale's) infinitely backstopped prop desk. Sure enough, by closing on Friday, IG9 (and the entire IG curve), had blown out wider, by a whopping 10 basis points: one of the biggest intraday moves in nearly a year. In P&L terms, by close of Friday, all else equal, JPM had lost another $2-3 billion on the same trade it had lost over $2 billion since the beginning of April. We expect to hear confirmation of this shortly. Which however brings another question: has JPM closed out its losing trade, or is the entire move in the index (and to a far less extent in the intrinsics) due to hedge funds who have piggybacked on the "crush JPM" trade? The truth is we don't know, and until we get the latest weekly DTCC data on CDS notional outstanding we won't know. However, our gut feeling is that it would have been virtually impossible for JPM to lift every single offer in unwinding a $100+ billion notional position without sending the entire IG curve multiples wider. Which is why keep a close eye on the IG9 10 Year skew - this is where, as ZH first noted, the action is. If the skew soars, it is likely that the runaway train will keep going and going, until JPM issues a formal announcement that the firm is fully out of the trade, together with a final tally of its losses, which will probably be double the currently loss as of Thursday. At which point IG9/18 will see an epic ripfest as those short risk will scramble to cover.  

 

The "Fail-Whale" Fallout Begins: Three JPM Execs To Leave Prop-Trading, Pardon, Hedging Bank

In a development that would make Dostoevsky turn in his grave, we learn that the first three casualites of Fail-Whalegate have been identified.

What Was Not Said During Jamie Dimon's Media PR Campaign

Today's Meet The Press PR damage control campaign orchestrated on behalf of Jamie Dimon by the fawning press was just another attempt at redirection, in which a faux contrite Jamie Dimon promises that as a result of being '100% wrong' about his prior "Tempest in a Teapot" description of the Bruno Iksil debacle, he has learned his lesson, and in tried and true American fashion deserves a second chance. The rest was filler. What was not said is that the entire business model of the modern US banking edifice, where due to the Net Interest Margin limitations imposed by ZIRP, is one of prop trading as being a glorified hedge fund is the only way the banks can generate a rate of return above their cost of capital. What was also not said was the glaring lies by Blythe Masters from a month ago who swore up and down to CNBC that JPM does not engage in prop trading. What was also not said is that contrary to "conventional wisdom" where a few prop traders have been sacked (most likely due to not taking enough risk) prop trading is alive and well across Wall Street, even if it has been largely rebranded as 'flow trading' - just as the high freaks are scrambling to come up with a new name for HFT because that will make all the difference. What was also not said, nor discussed, is why anyone would trust or invest in these money center banks when their balance sheets are so opaque, even their CEOs flip flop within a month of what is really happening, with accounting standards so poor, that nobody can figure out what they are investing in, and why Mark-to-Market is still halted (Aren't banks finally quote unquote healthy?). Finally, the most important thing not said, was Glass-Steagall, the one law whose overturning allowed the commingling of deposits and hedge fund activity courtesy of Gramm-Leach-Bliley, hilarious called the Financial Services Modernization Act of 1999. If America is to have even a remote hope of returning to normalcy, Glass-Steagall has to be reinstated. Which is why nobody brought it up on MTP: neither the anchor who is accountable to an organization which needs the status quo for advertising revenues, nor the hungry for TV exposure senator, nor the DCF-expert access journalist. Nobody.

Complete Summary Of Next Week's Global Events And Manic Bond Issuance

Now that Europe is all the rage again, below we again summarize the key Euro-centric events through the end of the month, as well as all the sovereign bond auctions to look forward to (we use the term loosely). Finally, the squid summarizes the key events in the past week as well as the expected global catalysts in the next several days. Somehow we get the impression it will be all about the unexpected developments in the next 168 hours, especially with Spain, Italy, France and Germany coming front and center with a boatload of bond issuance as soon as 9 hours from now...

Mogambo Editorial Genius (MEG)

Richard Daughty, a.k.a., 'The Mogambo Guru' at Mogambo Guru Report! - 3 hours ago

As one of the unfortunate few who can only imagine success in anything, and envy it in others, I am, of course, extremely jealous of Ron Paul, presidential candidate, Austrian-school economist, physician and all-around nice guy among, I assume, other laudatory attributes of which I am personally unaware, making me all the more jealous and spiteful. My latest grievance with Ron Paul is that he recently had an essay published in the prestigious Financial Times. It was placed at the tippy-top of the op-ed section, and was titled "Our central bankers are intellectually bankrupt." No... more » 

 

The 21st Century Will Be The Century Of Asia

Admin at Jim Rogers Blog - 7 hours ago

Well, the 20th century was the century of the U.S. The 19th century was the century of the U.K. The 21st century will be the century of Asia, and it’s becoming more and more evident. And especially of China. I wanted my children to grow up knowing Asia and speaking Mandarin. I think the best skills that I can give two girls born in 2003 and 2008 is to know Asia and to know Mandarin. So there we are. I couldn’t do it in New York. I tried. I tried doing it in New York. But it was not possible. So there we are. - *in a recent video interview* Jim Rogers is an author, financial commen... more » 

Can Banking Regulation Prevent Stupidity?

Anyone who worked in finance in the decade before Glass-Steagall was repealed knows that prior to Gramm-Leach-Bliley the megabanks just took their hyper-leveraged activities offshore (primarily to London where no such regulations existed). The big problem (at least in my mind) with Glass-Steagall is that it didn’t prevent the financial-industrial complex from gaining the power to loophole and lobby Glass-Steagall out of existence, and incorporate a new regime of hyper-leverage, convoluted shadow banking intermediation, and a multi-quadrillion-dollar derivatives web (and more importantly a taxpayer-funded safety net for when it all goes wrong: heads I win, tails you lose). I fear that the only answer to the dastardly combination of hyper-risk and huge bailouts is to let the junkies eat dirt the next time the system comes crashing down. You can’t keep bailing out hyper-fragile systems and expect them to just fix themselves. The answer to stupidity is not the moral hazard of bailouts, it is the educational lesson of failure. You screw up, you take more care next time. If you’re bailed out, you just don’t care. Corzine affirms it; Iksil affrims it; Adoboli affirms it. And there will be more names. Which chump is next?

A Crazy Idea That Might Just Work: Greece's New Currency, The U.S. Dollar

Here is the 3-point plan:

1. Renounce all debts denominated in the euro, i.e. a 100% writedown.
2. Accept the U.S. dollar as the national currency of Greece.
3. Engage in a transparent national dialog and reach a consensus about taxation and the role of the state in the Greek society and economy.

We might add a fourth point: renounce scams and kicking problems down the road rather than addressing them directly, sweeping dysfunction under the rug, etc.

Spiegel Calls It: Akropolis Adieu!

It took Europe two years to go from Acropolis Now to Akropolis Adieu.

How euro money printing is going to drive up gold and silver prices

By: Peter Cooper, Arabian Money:
Those investors panicking now and selling their gold and silver will feel as sick as dogs when they see what happens next to prices. For after a bleak patch lasting at most a couple of months the eurozone authorities will start their money printing presses rolling and hey what is the one money that they can never print?
We saw the start of the European Central Bank’s money printing with the announcement of the $1.3 trillion LTRO program last Christmas. It worked and rallied markets for a few months, rather less than QE2 from the Fed. And that is the dynamic of money printing.
Read More @ arabianmoney.net

  

 

Why Is The Obama Administration Allowing The Chinese Government To Buy Up U.S. Oil And Gas Deposits Worth Billions Of Dollars?

from The American Dream:
If we are trying to become independent of foreign oil, then why is the Obama administration allowing the Chinese government to buy up U.S. oil and gas deposits worth billions of dollars?  This makes absolutely no sense whatsoever.  The United States desperately needs to maintain control over its own domestic energy resources so that we can end our addiction to foreign oil.  As I have written about previously, the United States actually has plenty of oil.  If we would simply use the resources that we already have, we would never have to import a single drop of foreign oil.  But instead, we continue to be the largest importer of oil on the planet and we are allowing China to rapidly buy up oil and gas deposits inside the United States.  This is fundamentally wrong and it is a serious threat to our national security.  But apparently everything is for sale in the United States today, and that includes our precious energy resources.
The Chinese government is using two giant corporations to buy up these energy resources.
Read More @ EndOfTheAmericanDream.com

Richard Russell – The Next Sure Thing

from KingWorldNews:
With continued volatility in global markets, the Godfather of newsletter writers, Richard Russell, warned his readers to “be out of all stocks.” Here is what Russell had to say: “Between the years 2007 and 2009, we experienced the first part of a vicious bear market. The violence and rapidity of the losses in that bear market were shocking to most people. In fact, I’d say that the retail public was so shocked and wounded by the 2007 to 2009 bear market that they have stayed out of the stock market ever since.”
Richard Russell continues @ KingWorldNews.com

Gold Miners, Junior Gold Miners, & the Metals and Mining ETF’s

Scott Pluschau:
Since I posted earlier today some commentary on global “Exchange Traded Funds”, I thought it would also be a good time to share analysis on the Gold Miners ETF.  I often get asked questions on mining stocks since I frequently post on the precious metals futures.  This prior blog post of mine on the gold miners ETF is definitely worth a review here:  http://scottpluschau.blogspot.com/2012/01/gold-miners-are-showing-threatening.html
In that post I discuss in detail the current pattern that was developing in GDX “prior” to the breakdown.  What I mentioned then was that GDX was building a pattern that could lead to a continuation or a reversal in trend, and that the breakout could be a strong signal. 
Read More @ http://scottpluschau.blogspot.com

SEC Tells JP Morgan Enforcement Action Coming over Bear’s Mortgage Backed Securities Violations

by Teri Buhl, Teri Buhl
Fallout from JP Morgan trading losses, which led to rater Fitch downgrading their debt yesterday, aren’t the only financial worries the banking behemoth is facing. Nestled in that shocking 10-Q filed Thursday is an admission that their regulator, the Securities and Exchange Commission, thinks some of the details that lead to the explosive Ambac mortgage security fraud suit against the naughty stepchild of JPM, Bear Stearns/EMC, are worthy of an enforcement action. Yep- the SEC is giving or finally gave them a Wells Notice, which means according to their 10-Q (and their 10-K) in January 2012 the SEC’s investigation into the sins of Bear’s Mortgage team run by Tom Morano, Jeff Verschleiser, Mike Nierenberg and the subsequent cover up by JPM was worthy of a civil suit along with some penalties.
JPM’s 10-Q states “In January 2012, the Firm was advised by SEC staff that they are considering recommending to the Commission that civil or administrative actions be pursued arising out of two separate investigations they have been conducting… In both investigations, the Firm has submitted responses to the proposed actions.”
Read More @ TeriBuhl.com

How You Can Profit From the Market’s Next Big Collapse

by Marin Katusa, Casey Research:

Natural gas has become a victim of its own success. The incredible technological successes of the last decade enabled producers to book massive volumes of natural gas resources… and increase output significantly.
The result: supply overwhelmed demand, and natural gas prices tanked. This has already crushed natural gas producers… But it’s going to get worse.
Read More @ CaseyResearch.com

LISTEN NOW – Gold, Major Markets, What to Expect this Summer & More – Michael Pento

from KingWorldNews:
Michael Pento: President of Pento Portfolio Strategies – Michael is a well-established specialist in the “Austrian School” of economics. A regular on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications. Prior to starting Pento Portfolio Strategies and joining Agora Financial, Mr. Pento served as a senior economist and VP of the managed products division of another well known financial firm. Michael has also created ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.
LISTEN NOW @ KingWorldNews.com

Sources Inside Bilderberg Spill Cabal’s Secret Plans

by Paul Joseph Watson, Infowars:
Alex Jones has developed two sources within the Bilderberg Group who have confirmed that the secretive cabal is meeting at the Westfields Marriott Washington Dulles hotel in Chantilly, Virginia from May 31st to June 3rd, with further revelations about Bilderberg’s 2012 agenda to follow.
Jones said he was “contacted by somebody inside Bilderberg” two years ago and that he also developed another source intimately connected to the organization within the last week.

Read More @ Infowars.com




Jim Sinclair’s Commentary

Wall Street owns Washington.

How Wall Street Killed Financial Reform
It’s bad enough that the banks strangled the Dodd-Frank law. Even worse is the way they did it – with a big assist from Congress and the White House. by: Matt Taibbi
Two years ago, when he signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, President Barack Obama bragged that he’d dealt a crushing blow to the extravagant financial corruption that had caused the global economic crash in 2008. "These reforms represent the strongest consumer financial protections in history," the president told an adoring crowd in downtown D.C. on July 21st, 2010. "In history."
This was supposed to be the big one. At 2,300 pages, the new law ostensibly rewrote the rules for Wall Street. It was going to put an end to predatory lending in the mortgage markets, crack down on hidden fees and penalties in credit contracts, and create a powerful new Consumer Financial Protection Bureau to safeguard ordinary consumers. Big banks would be banned from gambling with taxpayer money, and a new set of rules would limit speculators from making the kind of crazy-ass bets that cause wild spikes in the price of food and energy. There would be no more AIGs, and the world would never again face a financial apocalypse when a bank like Lehman Brothers went bankrupt.
Most importantly, even if any of that fiendish crap ever did happen again, Dodd-Frank guaranteed we wouldn’t be expected to pay for it. "The American people will never again be asked to foot the bill for Wall Street’s mistakes," Obama promised. "There will be no more taxpayer-funded bailouts. Period."
Two years later, Dodd-Frank is groaning on its deathbed. The giant reform bill turned out to be like the fish reeled in by Hemingway’s Old Man – no sooner caught than set upon by sharks that strip it to nothing long before it ever reaches the shore. In a furious below-the-radar effort at gutting the law – roundly despised by Washington’s Wall Street paymasters – a troop of water-carrying Eric Cantor Republicans are speeding nine separate bills through the House, all designed to roll back the few genuinely toothy portions left in Dodd-Frank. With the Quislingian covert assistance of Democrats, both in Congress and in the White House, those bills could pass through the House and the Senate with little or no debate, with simple floor votes – by a process usually reserved for things like the renaming of post offices or a nonbinding resolution celebrating Amelia Earhart’s birthday.
More…




Jim Sinclair’s Commentary

MSM would have your focus constantly on Euroland and never look back towards the USA.

California Deficit Swells to $16 Billion, Governor Says By Michael B. Marois – May 12, 2012 3:49 PM ET
California’s budget deficit has swelled to $16 billion after tax collections trailed projections amid the tepid economic recovery, Governor Jerry Brown said in a comment on his Twitter post.
The shortfall has widened from the $9.2 billion Brown estimated in January, after lawmakers resisted the Democrat’s call for cost cuts, the federal government blocked other reductions and April income-tax revenue missed budget forecasts by $2 billion. On May 14, he’s set to unveil a revised spending plan and to say how he would erase the gap.
Brown, 74, set out an initial budget in January with $92.6 billion in spending for fiscal 2013, which begins in July. That plan stripped more than $4 billion from health and welfare programs while relying on higher income and sales taxes. The levy increases will go before voters in November. If rejected, schools will lose $4.8 billion midway through the year.
“We are still recovering from the worst recession since the 1930s,” Brown said in a YouTube video cited on his Twitter post. “Tax receipts are coming lower than expected and the federal government and the courts have blocked us from making billions of necessary budget reductions. The result is that we are now facing a $16 billion deficit.”
Brown this week submitted more than 1.5 million signatures to place the tax measure on the ballot. It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.
More…

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