Coffee And Cigarettes

With Greece taxing nearly 90% of the price on a pack of cigarettes, perhaps a far more reliable indicator of sovereign health (ironically) than rating agencies is just how much in sin tax a given country withholds. If that is the case, France really should be worried. Also: don't be surprised if the next sauna you go to has a Starbucks outlet.

20 Reasons Why America’s Next Bank Holiday Will Be a Nightmare

from SurvivalBlog.com:

The world is on now on the brink of a global credit crisis that could be far worse than the tumultuous events of 2008. The ongoing sovereign debt crisis in the southern reaches of the Eurozone indicate that bank runs in the region will continue, and that more bank closure “holidays” will be declared. Under a bank holiday, virtually all deposits could be frozen and irredeemable for days, weeks, or even months. The key question is: Will this crisis spread to the rest of Europe and then even to the United States? I urge SurvivalBlog readers–particularly those in Europe–to be proactive, to stay “ahead of the power curve.” While the Generally Dumb Public (GDP) wakes up some morning to hear news of a bank holiday, you will have long hence prepared yourself.
Digits Lost in the Ether–Redeemable Mañana?
Most people don’t realize that printed U.S. currency and minted coins amount to less than $800 billion, worldwide. That is just a small portion of the aggregate Money Zero Maturity (MZM) money supply that now exceeds $7 Trillion. So what is in your bank account is just electronic money, and there is absolutely no way that even a fraction of depositors could get physical cash to redeem the digits in their accounts. If there is a bank holiday declared, there will undoubtedly be severe restrictions on cash withdrawals when banks re-open. Given the precedent of the limits on withdrawals of a few institutions during the Savings and Loan crisis of the 1980s and 1990s, I predict that withdrawal restrictions could go on for many months.
Here are 20 Reasons why America’s next bank holiday will be a nightmare:
Read More @ survivalblog.com

 

Positioning For The Weekend: BofA's Risk Cheat-Sheet

With Greece preparing to go to the polls this weekend for the second time in a little over a month, BAML's credit strategy group addresses three potential outcomes of the election on a number of asset classes. While they do have concerns about all of the possible post-election scenarios they do not necessarily lead to an exit from the eurozone, at least not in the very short term, and some of them could even lead to an initial market rally that could temporarily strengthen the euro. Their analysis focuses on the near-term (four-week) market implications and assumes that neither Spain nor Italy will have a sovereign crisis during this time frame, though those concerns will likely persist. The three scenarios are: Base case (high probability): election result allows Greece to form a pro-EU government; limited European policy response; Bull case (low probability): election result means Greece does not form a pro-EU government; substantial ECB & European policy response; and Bear case (low to medium probability): election result means Greece does not form a pro-EU government; limited ECB/ European policy response. The one-month asset price response for rates, credit, equities, FX & commodities are detailed below.

This Could be the Go Time Weekend

from John Galt FLA:
First and foremost, this is just an advisory of what my personal plan of action will be over the next 120 hours and not a recommendation for anyone to repeat or engage in any of these actions, especially if they can not afford to do so. There is not guarantee that this is the weekend where the events in Europe and the Middle East create the ultimate storm of financial disruption which washes over the American seawall like a Tsunami of economic doom, but to watch the events of this week and thus far this morning and to do nothing to protect and prepare my family is foolishness.
The summary of events which are prompting my course of action:
1. Greek elections with a distinct possibility of results that plunge the nation into chaos and even civil war. The inherent instability there is already bleeding over throughout the Balkans as other nations in the region are suffering the spillover effects of the rapid economic contraction.
Read More @ JohnGaltFLA.com

From An Orderly EUR Decline To A Capital Flight Crisis In 4 Easy Steps

Lower growth expectations and higher risk premia on peripheral European assets have weighed heavily on the EUR since the sovereign crisis began in late 2009. But, as Goldman's FX anti-guru Thomas Stolper notes, we have not seen evidence of a net capital flight crisis out of the Euro area that would have led to disruptive EUR depreciation (yet). Much of the reasoning for the relative stability is the Target 2 system and the high degree of capital mobility in European capital markets which have enabled the rise in risk aversion to be expressed by internal flows (as well as repatriation). With this weekend's election (and retail FX brokers starting to panic), it is clear that the interruption of these internal channels may well lead to a disorderly capital flight and a full-fledged crisis in flows. Stolper outlines four potential catalysts to trigger this chaos (which is not his base-case 'muddle-through' scenario) as we already noted the huge divergence between implied vols and realized vols indicate the market is starting to price in more extreme scenarios and safe-havens (swissy) are bid.

Moody's Downgrades Five Dutch Banks By 1-2 Notches

While we await the Moody's downgrade of the Spanish banking system, which we can only attribute to a lack of outsourced Indian talent, since three banks are now rated higher than the sovereign, Moody's decided to give a little present to our Dutch readers by downgrading 5 of their biggest banks: Rabobank Nederland, (2 notches to A2) for ING Bank N.V., (2 notches to A2) for ABN AMRO Bank N.V. (2 notches to A2), and for LeasePlan Corporation N.V. (2 notches to Baa2). The long-term debt and deposit ratings for SNS Bank N.V. were downgraded by one notch to Baa2. And yes, this means that the US banks (looking at your Margin Stanley) are likely next.

Biderman: "The World Cannot Go Back To The Way It Was"

In browsing the last seven months of video commentary that Charles Biderman, of TrimTabs, has produced, he is clear on one thing, "nothing has changed". With an 'admittedly rigged' stock market now at the behest of global central banks and the slow-motion train-wreck in Europe seemingly approaching the end of its can-kicking-road, Biderman is frustrated by the inane financial media's perpetual belief that we are 'a grand plan' away from a return to the way the world was before the crisis began - "We are not!" Wages and salaries in the US continue to stagnate with a $100bn per month deficit as he is incredulous at the belief that we can go on printing $1.3 trillion to produce $250 billion in spending each year. The US economy will double-dip when the Fed's attempt at rigging the stock market and economy is no longer perceived as viable and as the paisley-wearing pontificater expects both inflation (inevitable with CB printing) and deflation (big banks, European and EM equities thanks to the interventionist policies of the global central banks), he suggests gold as a core holding.

Investors tout 'condemnation' for housing fix

Eric De Groot at Eric De Groot - 5 hours ago

Funny how condemnation through public power of eminent domain is considered a viable solution to the housing problem by the private sector when the transition of capital, power, and influence from the public to private sector is already underway. This logic is known as swimming against current of global capital flows (see chart). Not a good idea. Chart: Large Cap Total Return Index... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

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Gold withstands another attack/Spanish yields reach 7%/Italian 10 yr bonds hit 6.24%/Egan Jones downgrades France to BBB

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 6 hours ago

Good evening Ladies and Gentlemen: Gold closed up by $2.30 to $1620.40 despite the antics of our bankers who showed up at the comex opening of 9:30 and supplied massive amounts of non backed gold paper. However as of late we are seeing the physical market on fire the moment the bankers strike and it is this which is terrifying our bankers. The price of silver fell 54 cents to $28.40 as this

The European Scorecard: 2 Out Of 5

There are five problems that need to be resolved within the European crisis and Credit Suisse provides a scorecard for the progress towards these 'risk factors'. The key issues are: growth, peripheral current account balances, solvency of the insolvent, ring-fencing the insolvent, and mutualization of government debt; but what is more worrisome is that while they have raised the average score to 2.0 out of 5 (from 0.6 out of 5 in Nov' 2011), it has not budged now in four months. The lack of growth, fiscal tightening, continuing insolvency concerns and excess leverage in the private sector, and de minimus deleveraging in Spain, Greece, Portugal, and Ireland leaves the vicious circle of progress on the European scorecard much harder from here.

Compassion – Killer Of Society?

Greece, Spain, Portugal, Italy and others besides have fallen into the trap of bribing their electorates with promises that become ever more unsustainable. In each of these states, expectations have been created that cannot be met and that cannot now be undone. This is surely a recipe for social unrest. These will not be the only countries to succumb to failure. The national debt, the unaffordable long-term cost of social security, health care and a myriad other entitlements and the mounting evidence of the insolvent state point to the same outcome for the UK and the US. Failure is ensured; the more pressing question is, what happens next?

Another Worker Commits Suicide at Apple Factory

from news.yahoo.com:

A Foxconn worker fell to his death in China, the company which assembles products for Apple said Thursday, following a series of fatalities that sparked concern about conditions at its plants.
The 23-year-old, identified only by his surname Xie, fell from his rented apartment in the southwest Chinese city of Chengdu on Wednesday, according to a statement released by Hon Hai Precision Industry, Foxconn’s parent company.
It said the cause of the tragedy was not immediately clear and Chengdu police were still investigating.
Taiwan tech giant Foxconn, which assembles products for Apple, Sony and Nokia, has come under the spotlight after suicides and labour unrest at its Chinese plants since 2010.
At least 13 employees died in apparent suicides in 2010, followed by several others in 2011. Activists blamed tough working conditions, leading to calls for better treatment of the company’s staff.
Read More @ news.yahoo.com

In The News Today

June 14, 2012, at 7:06 pm
by Jim Sinclair 

Jim Sinclair’s Commentary

Rumor has it that these derivatives were primarily manufactured by the Squid so of course they will remain in the dark.

Are they still open? Who is winning on them? How much has been lost on them and by whom?

The files would inflame no market if the transactions had been closed, so one can assume they are wide open with profits and losses

ECB Tells Court Releasing Greek Swap Files Would Inflame Markets By Elisa Martinuzzi and Gabi Thesing – Jun 14, 2012 9:32 AM GMT-0300
The European Central Bank said it can’t release files showing how Greece may have used derivatives to hide its borrowings because disclosure could still inflame the crisis threatening the future of the single currency.
Bloomberg News is suing the ECB to provide the documents under European Union freedom-of-information rules. The papers may help show the role EU authorities played in allowing Greece to mask its deficit for almost a decade before the nation’s troubled finances necessitated a 240 billion-euro ($301 billion) bailout and the biggest debt restructuring in history.
Disclosing the files when Bloomberg News first sought them in 2010 would have “fueled negative perceptions about Greece’s ability to honor its debt,” ECB lawyer Marta Lopez Torres said at a hearing of the European Union’s General Court in Luxembourg today. “It’s the same now with Spain” which “isn’t able to borrow money,” she said. “Markets are reacting in very volatile ways. It’s affecting the euro economy.”
Greece may seek to leave the euro if parties opposed to the austerity measures imposed with the rescue win elections on June 17. Meanwhile, Spain’s 10-year borrowing costs jumped to a euro- era record today after the nation’s credit rating was cut to one step above junk by Moody’s Investors Service following Prime Minister Mariano Rajoy’s request for bank aid this week.
“Markets will perform better when they have transparency,” Timothy Pitt-Payne, lawyer for Bloomberg News, told the court. “The question is who knew what; and when did they know it?”
More…




Jim Sinclair’s Commentary

I thought this revelation was crystal clear from day one. Who do you think flushed Lehman at that infamous weekend meeting?

Federal Reserve Board Members Gave Their Own Banks $4 Trillion in Bailouts Thursday, June 14, 2012
Following the 2008 financial crisis, the Federal Reserve provided more than $4 trillion in near zero-interest loans and other help to banks and businesses whose executives also served as directors for the national bank.
At least 18 current and former Fed regional bank directors had a direct stake in the trillion-dollar bailout given to teetering institutions, according to a report produced by the Government Accountability Office, but released by Senator Bernie Sanders (I-Vermont).
“This report reveals the inherent conflicts of interest that exist at the Federal Reserve,” Sanders said in a prepared statement. “At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks.”
Sanders wants to end the potential conflicts of interest that come with having bank executives serving on the Fed’s boards. The senator introduced legislation in May that would prohibit banking industry and business executives from serving as directors of the Fed’s 12 regional banks.
To bolster his case, Sanders cited the example of Jamie Dimon, chief executive officer of JPMorgan Chase. A director of the Federal Reserve Bank of New York since 2007, Dimon was part of the Fed’s leadership when it approved $391 billion in emergency funds to JPMorgan Chase to help it through the Wall Street chaos.
More…




Jim Sinclair’s Commentary

Maybe on behalf of humanitarian principles we should now bomb Egypt, again reinstating the no fly zone…

Free elections, what BS. Does anybody really believe this MSM/MOPE?

Egypt Justice Ministry authorizes civilian arrests by military
The decision, published in the official gazette, would remain in effect until a new constitution is in place, but the process of writing a constitution has hit snags. By Maggie Michael  / June 13, 2012
Egypt’s Justice Ministry on Wednesday gave the country’s military police and intelligence agents the right to arrest civilians over wide range of suspected crimes, including "resisting authorities," sparking charges that the country’s military rulers want to extend their grip on power even after handing over to civilians.
The decision comes during heightened tensions in Egypt, three days before a highly polarized presidential runoff election and a day before rulings by the country’s highest court that could dissolve the Islamist-dominated parliament and even cancel the Saturday-Sunday presidential vote.
The decision, published in the official gazette, would remain in effect until a new constitution is in place. The process of writing a constitution has hit snags. On Tuesday the Islamist-dominated parliament voted on an assembly to draft the document, but liberals boycotted the session. An earlier attempt to name the body collapsed because of opposition from liberals. Both times they charged that Islamists were unfairly dominating the procedure.
Military analysts said the military arrest powers were a temporary measure intended to fill a security vacuum resulting from last year’s uprising, when the police force collapsed and disappeared from the streets during the first days of the mass protests.
More…




Jim Sinclair’s Commentary

QE to infinity is as sure as death and taxes. Right now the Administration might wonder if the Fed plans to sink them.

U.S. Foreclosure Activity Increases 9 Percent in May According to RealtyTrac® U.S. Foreclosure Market Report
Overall Foreclosure Activity Exceeds 200,000 for First Time in Three Months; Foreclosure Starts Increase Annually for First Time Since January 2010 June 14, 2012 00:01 ET
IRVINE, CA–(Marketwire – Jun 14, 2012) – RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for May 2012, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 205,990 U.S. properties in May, an increase of 9 percent from April but still down 4 percent from May 2011. The report also shows one in every 639 U.S. housing units with a foreclosure filing during the month.
"U.S. foreclosure activity has now decreased on a year-over-basis for 20 straight months including May, but the jump in May foreclosure starts shows that it’s going to be a bumpy ride down to the bottom of this foreclosure cycle," said Brandon Moore, CEO of RealtyTrac. "Based on the rise in pre-foreclosure sales we’ve seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward. While pre-foreclosure sales have less of a negative impact on home values than bank-owned sales, they still represent a discounted sale where a distressed homeowner is losing his or her home.
"Disposing of distressed homes by pre-foreclosure sale can also benefit lenders and servicers because pre-foreclosure homes sell at a higher average price point than bank-owned homes," Moore continued. "Our first quarter foreclosure sales report showed that the average price of a pre-foreclosure home was more than $27,000 higher than the average price of a bank-owned home — which quickly adds up given that there have been an average of 1.6 million nationwide foreclosure starts per year for the past five years.
"More banks are now recognizing that treating the problem of delinquent mortgages with short sales rather than bank repossessions can help them minimize their losses and also avoid taking on more REOs, which they then have to manage, maintain and market for sale."…
More…

Economic Collapse & Capital Controls Assured

from Fabian4Liberty:

International Treaty Negotiated In Secret – Hidden Even from Congressmen Who Oversee Treaties – Threatens to Destroy National Sovereignty

Treaty Threatens Global Government … Run by Giant Corporations
from Washington’s Blog:
The normally-reserved Yves Smith asks whether Obama should be impeached over it.
Democratic Senator Wyden – the head of the committee which is supposed to oversee it – is so furious about the lack of access that he has introduced legislation to force disclosure.
Republican House Oversight Committee Chairman Darrell Issa is so upset by it that he has leaked a document on his website to show what’s going on.
What is everyone so furious about?
An international treaty being negotiated in secret which would not only crack down on Internet privacy much more than SOPA or ACTA, but would actually destroy the sovereignty of the U.S. and all other signatories.
It is called the Trans-Pacific Partnership (TPP).
Read More @ WashingtonsBlog.com

Document Reveals Draconian Details of Obama’s Secret Globalist Trade Pact

by Kurt Nimmo, Info Wars:
Democrats who plan to vote for Obama in November should be aware that the president is poised to sell the country down the river to transnational corporations.
A newly leaked document posted on the Public Citizen website spells out the Obama administration’s “trade objectives” under the Trans-Pacific Partnership, including a plan to allow transnational corporations to skirt American banking, investment, environmental and labor laws. The laws would still apply to corporations based in the United States.
Transnational mega-corporations would be permitted to appeal American laws to a globalist international tribunal. If Congress over-rules the decisions of the tribunal the United States would face punitive trade sanctions.
Read More @ InfoWars.com

Gold Daily and Silver Weekly Charts – Rough Waters Ahead

from Jesse’s Café Américain:
“All this wiggle-waggle of the gold price below or around $1600 is simply the result of official efforts to delay the appearance of $2,000+ gold.
That is the big event ahead, whose appearance will have deep psychological impact on markets, because the establishment of $2000+ gold will reinforce the idea that gold has still much higher to go.”
Hugo Salinas-Price
Tomorrow is stock option expiration, an important quad witch expiry as well.
The FOMC meets next week, and the Greek people have an important election on Sunday that may have some impact on their stance towards an austerity deal.
Today Egan-Jones downgraded France to BBB+ with outlook negative.
There should be no doubt in anyone’s mind that the Anglo-American banking cartel is deeply interested in acquiring key European assets on the cheap. This will not stop until the means of executing their trading gambits are removed.
This is a new and more brutal phase of the currency war.
Read More @ Jesse’s Café Américain:

Black is White, Hedges are Bets, and Your Money is Mine

by Zues Yiamouyiannis, Of Two Minds:
Once again we turn to frequent contributor Zeus Yiamouyiannis for a sharp analysis
of why our “profits are private, losses are public” crony-capitalism is self-destructing
and what is needed to move forward to
a sustainable, adaptable, wealth-generating capitalism.
As we witness the riotous dissolution of corrupted capitalism, we need not wait for the
history books to identify the mile markers of self-destruction. If we are to rebuild
capitalism, even as it is tearing itself down, then we will need to become street-smart
detectives in analyzing the current economic murder-suicide in progress.
Every fall has its tell-tale confirmations and corrupt capitalism is no exception.
There arrive key points where a system’s own contradictions become so evident and
self-damaging, where motive, means, and opportunity become so clear, that one can mount
an informed, effective counter-offensive.
Two notable recent contradictions have surfaced in the ongoing debacle called big banking.
1) Hedges for big banks have evolved into gambling vehicles that increase risk rather than
reduce risk.
Read More @ OfTwoMinds.com

Why Physical Silver Demand is Heading Higher

By Alasdair Macleod, Resource Investor:
The silver price is depressed compared with its historical relationship to gold, one ounce being worth about 55 of silver, against the historical rate of 15 or 16. The reason, perhaps, has to do with silver’s demonetization and its role as an industrial metal. However, with global supply from mines and recycling running at about one billion ounces and demand at only a hundred million less, it does not take much investment demand to create a severe shortage.
For now, pricing is managed for industrial use, and industry has a vested interest in keeping the price low. For clues of future prices, we need to look at market data, and the graph below shows the aggregate positions of two groups of users extracted from disaggregated futures’ data going back to September 2009.
Read More @ ResourceInvestor.com

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