Farage On Barroso: "He's A Deluded Communist Idiot"

Commenting on the incredible circle-jerk that Europe (sovereign-to-banking-system) has become, the outspoken UKIP MEP Nigel Farage exclaimed to FOX Business in this best-ever-rant clip that "The whole thing is a giant Ponzi scheme, isn't it?" Goaded somewhat by the interviewer's questions citing Barroso's intimation that the US is to blame for Europe's problems, Farage opines that "Barroso is a deluded idiot" and a communist who supported Chairman Mao. The contagion effect from the US financial crisis did have impacts on Europe, there is no doubt, but as the frustrated Farage notes: the reason the Euro is in the state it is in is that they put together a completely artificial currency with countries that never fitted together on top of which was added a regulatory cost burden through excess regulation on the environment and employment legislation that is driving parts of Europe towards being a third world country; "America, you are not to blame". The clip goes on to discuss the circular bailout fantasy, the taxpayer burden leading to a democratic revolution, and at the end of the day "this whole thing is going bust" as the likable libertarian notes that European leaders believe that "well-educated bureaucrats know better than we the poor peasants how best our lives should be led" which is the same path that led to the economic and social crash-and-burn in the Soviet Union.

Nigel Farage: “Listen! The Whole Thing’s a Giant Ponzi Scheme!”

from europarl:

3 Minutes Ahead Of The FOMC, Equities Remain QE-Prone As Commodities And Treasuries Lose Faith

After QE-based disconnects last week (Gold rallying with stocks and USD weakness as Treasury yields drop), the last day or so has seen these relationships fading fast. Gold and Treasuries have resynced at a much less sanguine on QE level and the USD is gaining modestly leaving stocks by far the most 'hope-full' asset class for now. WTI crude is back below $82 also - hardly a NEW QE indication of conviction. The major financials continue to push higher though the sector overall just limped back to unch on the day. With ES dropping back to overnight lows, we suspect the realization is gradually reaching the smart, sexy stock traders that their exuberance has removed the punchbowl once again.

You’re Wrong If You Think This Financial Insanity Can Go On Forever

by James Kunstler Kunstler.com via, Business Insider:
The storyline behind the convulsions shaking the money centers of the world is such a hopeless labyrinth of mathematical metaphysics because abstraction unto infinity is the last refuge of those seeking to evade reality. This is why individual human beings faced with terrible choices go crazy, and it is true of societies and nations, too.
Reality is so boringly concrete. The facts just sit there implacably like dull cement bollards in a roadway, waiting for impact with objects in motion. These facts are as follows: The world is dead broke. (By “world” I mean those places where the electricity is on more than it is off.) The world spent all of its future capital to stage an orgy of blow-out development and then the future arrived and there was no money to run everything.
To make matters worse, there are massive interest payments due on all that money misspent. Nobody has the means to pay the interest. All the activity around this fact is an Olympiad of money games that amount to musical chairs and hot potato, signifying that 1) there is not enough to go around, and 2) somebody has to end up stuck with a problem.
Read More @ Business Insider.com

Europe's New, New Math

The focus of the markets these days is driven by the headlines that are pumped out by the European Union. Hope is promised, the next big summit to fix all issues is touted, Germany is going to come around any day is offered up as Ms. Merkel denies any such thing and “muddling through” holds up prices as the by-word of belief  as the blinders of the great propaganda machine direct everyone’s attention away from what is most important. As one example of this is some firewall, no matter what size, that does not do one thing to address the core issues of Italy and Spain which both have too much debt and too many other liabilities in a time of recession where contingent liabilities become outright liabilities and hidden in a vast variety of ways. These firewalls accomplish nothing except to dissuade investors from being involved and their capitalization weakens the finances of the countries providing the capital, whether counted or not, and ends up weakening the balance sheets of the core countries of Europe as we roll from promises and guarantees to moments when real money must be put up. If you stand far enough back you can visualize what is going on; “look at our firewall and do not pay attention to the countries which are having severe economic declines” and so the head fake continues until it cannot any longer as the bills overcome the ability of a nation to pay them.

'Just The Facts' On The JPM 'Whale' Unwind Rumor

Believing 'people familiar with the matter', extending rumors of large trades, and extrapolating DTCC (the CDS data repository) data has apparently caused a number of mainstream media reporters to believe that the JPMorgan 'Whale Trade' has been 60-75% unwound. The assertion appears to be based on two things: 1) a rumor from a Credit Suisse desk of heavy volumes in the last few days; and 2) DTCC data showing open trades falling. While we restate that no-one knows what the trade was, we offer three retorts to these assertions: 1) there is nothing in DTCC data that suggests any recent change in trend (or dramatic shift in net or gross notionals); 2) the aggregate nature of DTCC data offers little insight into the actual changes (whether they be unwinds or opposing positions); and 3) today is single-name CDS and index credit option expiration which means the few days leading up to this will ALWAYS have heavy volume - especially at the end of a very dramatic quarter such as the one we have just witnessed. The bottom-line is that the 'price' changes in IG9, HY9, and IG18 do not suggest any 'recent' change in the unwind scale and while we would expect that JPM has been unwinding (at least the hedge of the hedge), no-one knows how much and given the market's awareness of the position, IG9 would dramatically underperform its whale-driven rally move (which it has not yet). Anything else is speculation - though it is clear that IG9 tranche notionals suggest the original tail-risk position remains on the books.

Finland Throw A Wrench In Europe's Rumormill

Because if left unchecked Europe will likely talk the algos trading the market with flashing read headlines to 36,000, here comes Findland to put some things in order

• FINNISH PM KATAINEN REJECTS PROPOSAL TO USE ESM AND EFSF MONEY TO BUY GOVT BONDS

Yes, the same Finland who ten days ago made it perfectly clear that the EFSF is also subordinating, when they demanded collateral from Spanish banks courtesy of negative pledge language.

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China's Sinopec Looking To Buy Billions In Chesapeake Assets

Remember "What Is The Upside In Chesapeake?" from 3 weeks ago, where we said, "one thing is certain: the company has lots of good assets, as well as quite a few legacy liabilities, combined with an industry environment that is as bad as it has ever been. And sure enough, in betting that the environment might actually improve for a change, there are quite a few big firms which may be happy to onboard the assets and the liabilities, knowing they wouldn't impair the right side of their balance sheet, while acquiring some good real estate and substantial reserves on the left, at a valuation that is the cheapest in the industry. Because in finance, once central planning is (finally) stripped away, valuation is all that matters." Today we read in the FT: "Sinopec, the Chinese oil and gas group, is considering bidding for billions of dollars worth of assets owned by Chesapeake Energy, the US gas producer. Fu Chengyu, head of Sinopec, was in Oklahoma in the US this week in connection with the company’s due diligence on the Chesapeake assets, according to people familiar with the move."

Democracy And Rule Of Law Are Dead

Dave in Denver at The Golden Truth - 1 hour ago

*Democracy has failed when Rule of Law is replaced by Rule of Men. In the case of the U.S., Rule of Law has been replaced by Rule of the Teleprompter. By the way, anyone besides me wonder who is responsible for writing the script read by Obama on the Teleprompter? Is it Eric A. Blair, aka George Orwell? * Don't even bother voting in November. Why bother? It does not matter which candidate or which party is in office. Obama's extraordinary election was fueled primarily by a massive backlash against the destruction of the Constitution and implementation of totalitarian policies... more » 

 

The Problem Is That Money Isn't Going Any Place

Eric De Groot at Eric De Groot - 1 hour ago

Kessler: the problem is that money isn't going any place. that money is basically sitting in banks and we don't have what he call velocity, meaning someone's out rowing it and spending it. you have a consumer leading this recession, not just here, but in Europe. Kessler's assertion that money isn't going any place, i.e. the velocity of money (turnover) and/or borrowing has been... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Obama Asserts Executive Privilege Over Fast And Furious Fiasco

If there was any confusion whether Obama is in fact Bush, or maybe even Nixon, this has now been squashed. From Fox:
President Obama has granted an 11th-hour request by Attorney General Eric Holder to exert executive privilege over Fast and Furious documents, a last-minute maneuver that appears unlikely to head off a contempt vote against Holder by Republicans in the House. The House Oversight and Government Reform Committee is expected to forge ahead with its meeting on the contempt resolution anyway.
Holder, whose guilt is implicitly proven by this action, is now likely absolved of everything as the TOTUS has effectively onboarded all of his "balance sheet risk." And why not. The Fed does it for everyone else every day.

Greece Has A Prime Minister

Congrats Greece: you are no longer Belgium, even if the new leader is the same as the old leader

• GREEK NEW DEMOCRACY LEADER SAMARAS SWORN IN AS PRIME MINISTER

Now: we eagerly await the list of Greek bailout renegotiation "conditions" to Germany.

Art Cashin's No Frills Preview Of The FOMC

The always pragmatic Art Cashin summarizes today's 12:30pm FOMC announcement. In summary: "look for the Fed to dangle a big carrot - some semi-specific course of action that would be put in place if the labor markets continue to worsen. Net/net, he needs to keep the door wide open and maybe outline certain milestone “triggers” that will allow the Fed to act later in an election year without being accused of being overtly political." Said otherwise, the happy ending will likely be deferred one more time. The market may not be very happy.

Germany Lashes Out, Accuses US Of Hypocrisy

There are those (such as the entire world) who have in recent months ganged up on Germany, see "In The Case Of The World Vs Merkel, The Broke Prosecution Proposes Eurobonds Lite", and are now openly demanding that the German population shoulder even more of the broke continent's bailout costs, and not only that but implicitly foot the lowering of the French retirement age from 62 to 60. Nowhere is there any discussion of how Germany should go about achieving this: by raising its own retirement age to 100 maybe? Nor is there any discussion that Germany is now very actively engaged in bailing out Europe one day at a time to the tune of €2 billion each 24 hours via TARGET 2. Well, it was only a matter of time before Germany, having long kept radio silence, lashed out at its accusers. Spiegel summarizes: "Merkel was certainly in the hot seat, once again, as many nations pressed her to do more for the euro -- at a time when many Germans feel their country has already done too much." And finally the instigator of it all, TurboTaxCheat Tim Geithner, gets exposed: "It is rather hypocritical when the Americans and the British, whose own mountains of debt have reached a high point, try to lecture the Europeans. One number is sufficient to reveal what a bad tactic this is. At a time when the budget deficits of the US and Great Britain are about 8 percent, the euro-zone members have almost managed to bring their deficits as a whole down to 3 percent." And they are spot on: Europe may be going through a painful time but at least it is doing something to address its problems. America continues to rely on one simple, and very much transitory thing: reserve status. Newsflash: reserve status ends. And when it does: run.

Higher gold, silver and interest rates to result from the euro crisis

by Peter Cooper, Silver Seek:
When there is a crisis of confidence in a currency then it is the precious metals that gain. Visit any city in Germany or Austria this summer and there is a gold shop in a prominent location.
They have not quite replaced the banks yet. But the message is there for anybody with eyes to see. It is noticeable too that this is not just a phenomenon in the peripheral eurozone but in its teutonic heart.
Spanish interest rates
Then again you certainly are getting good rates on your money in Spain and Italy these days, let alone Greece. Spanish bond yields have passed the danger point of seven per cent.
This is what happens when debtors become scarred about not getting repaid. Interest rates go up. No matter than the ECB has set official rates at a record low.
Read More @ Silver Seek

Economic collapse in Greece is finally sinking into the consciousness of its citizens

by J. D. Heyes, Natural News:
Greek citizens may have narrowly avoided an economic catastrophe following a vote this week to remain with the euro, the fact that their country is slipping further towards a financial abyss is becoming more ingrained in their psyche.
On Sunday voters narrowly elected a center-right New Democracy Party to take the reins of power in a country that, besieged by debt and teetering on the brink of insolvency, is literally in chaos. For months now, Greece has only managed to exist, not thrive, as successive bailouts of its government by the European Central Bank (led mostly by German efforts and money) have kept Athens from tumbling headlong over an economic cliff that, frankly, its leaders should have seen coming years ago.
Even now the bailouts – once gratefully considered a lifeline – are now being panned by vast numbers of Greek leaders and citizens who abhor the fact that the money is flowing with so many strings attached. Mindful of Greece’s expensive social benefits packages for government workers and citizens alike, those who are forking over euros by the billions have only done so by insisting Athens accept some of the most restrictive austerity measures ever imposed on a government.
Read More @ NaturalNews.com

Fed Meeting, European Crisis & An Inflationary Death Spiral

from KingWorldNews:
Today Michael Pento had some strong words regarding the Fed meeting, Europe’s crisis and what to expect going forward. Here is what Pento had to say to KWN about what is taking place: “The idea now is that the Fed has to come to the rescue because we see the unemployment rate has started to reverse course. We saw the averages were recently falling apart. We also saw the European debt crisis metastasizing itself across the entire globe.”
“So people are now clamoring for another round of QE from the Fed and another round of the LTRO from Mario Draghi. But we have to face the fact the two rounds of the LTRO did absolutely nothing to rescue the economy in Europe. If you look at Spanish yields, they hit an all-time record high this week. So Europe continues to fall apart.
Michael Pento continues @ KingWorldNews.com

You Have Not Known Pain Until You’ve Tried To Limit The Borrowing Costs of Spain!!!

by Reggie Middleton, BoomBustBlog.com:
The MSM reports Spanish Short-Term Debt Costs Reach Alarm Levels:

Spain paid a euro era record price to sell short-term debt on Tuesday, pushing it closer to becoming the biggest euro zone country to be shut out of credit markets. The soaring borrowing costs highlight the shortcomings of a June 9 euro zone deal to lend Spain up to 100 billion euros ($126 billion) for its banks.

Last week CNBC Asked, “So Why Are Spanish Bond Yields Falling?”. I Asked The Better Question, “Why Are Spanish Banks Considered Solvent?” That’s because by now everybody knows that the bank’s problems are the sovereign’s problems and vice versa. Reference Dead Bank Deja Vu? How The Sovereigns Killed Their Banks & Why Nobody Realizes They’re Dead..

They also illustrate how Europe’s problems run much deeper than Greece, brought back from the brink of default in Sunday’s parliamentary election. 

Spain, the euro zone’s fourth largest economy, had to pay 5.07 percent to sell 12-month Treasury bills and 5.11 percent to sell 18-month paper – an increase of about 200 basis points on the last auction for the same maturities a month ago.

Read More @ BoomBustBlog.com

Flirtin’ with Disaster

By Rich Yamarone, The Market Oracle:
I’m travelin’ down the road and I’m flirtin’ with disaster I’ve got the pedal to the floor and my life is running faster I’m outta money outta hope it looks like self destruction Well how much more can we take with all of this corruption
Molly Hatchet
The U.S. economy is flirting with disaster. Traditionally policy makers adopt a monetary-fiscal policy mix that is targeted to the ailing economy; unfortunately for the U.S. those policies today are either impotent or contractionary.
Recently released economic data confirm the end of the strong patch; the lack of real disposable personal income has resulted in a slump in the primary driver of aggregate demand, consumer spending. In what seems like an annual event, economists are once again returning to their models for downward revisions to GDP growth estimates. Anecdotes contained in the Bloomberg Orange Book have identified all of the current underlying influences in the economy including a paradigm shift in the retail sector and the temporarily positive economic consequences of a warmer than historical spring. Both of these factors imply deteriorating activity.
Read More @ TheMarketOracle.co.uk

Will Congress Aggravate Silver Manipulation?

by Michelle Smith, Silver Investing News:
In 2008, the US Commodity Futures Trading Commission (CFTC⁵) began investigating silver manipulation. That investigation is still underway⁶ and manipulation continues to plague the market. Members of the silver community have grown increasingly cynical about the CFTC’s ability and willingness to reign in manipulative practices, and US lawmakers’ decisions regarding the CFTC’s responsibilities and funding are raising the question of whether it is reasonable to expect improvement.
In the past, the CFTC’s job was to oversee the commodities markets, ensuring that they were transparent and free of fraud and manipulation. Many believe the agency has executed these tasks poorly as silver price manipulation is considered ongoing and obvious.
Now, in the era of Dodd-Frank, lawmakers have decided that the CFTC should also oversee the swaps market.
Read More @ SilverInvestingNews.com

An Icy Saga Is Emblematic of Oil Price’s Inevitable Climb

By Marin Katusa, Chief Energy Investment Strategist, Casey Research:
If anyone needs more proof that diminishing supplies of easy oil are forcing the world’s oil majors to venture into ever-riskier, more complicated, and more expensive areas in their search for new reserves, look no further than Royal Dutch Shell’s (NYSE:RDS.A) pending voyage into the Arctic.
Shell is about to set sail on a mission that has been eight years and more than $4 billion in the making… and all that is before first well is even spudded. Environmental wrangling, legal battles, regulatory changes, and technological developments have all played a role in the saga to date. But persistence pays: Shell now has two drilling rigs ready to go and is just waiting for the receding ice to expose its targets.
When Shell’s drills penetrate those targets, they might tap into a vast wealth of oil. Alaska’s outer continental shelf is thought to host billions of barrels of recoverable oil and trillions of cubic feet of natural gas. Those hydrocarbons, however, will not be easy to access
Read More @ CaseyResearch.com

Suppression by the State

By Dan Denning, Daily Reckoning.com.au:
The Rossis didn’t make it! The Blue Panda has failed!
In today’s Daily Reckoning we learn the fate of our intrepid Italians, fleeing to Switzerland with a box of loot in the boot.
It’s a case of life imitating the Australian Wealth Gameplan. Reuter’s reports that an Italian grocer and his daughter were arrested at the Swiss-Italian border after attempting to smuggle 50 kilos worth of 18-carat gold bars out of Italy. The $2.5 million worth of gold was found in a hidden compartment under one car’s seats. Authorities said the man was acting suspiciously and would not say where the gold came from.
This is a real-life version of a fictional event we staged a few months ago to illustrate what happens when capital controls are put in place as money dies. When people lose confidence in money, they take what they can and run. Our story involved a small Italian family by the name of Rossi.
Read More @ DailyReckoning.com.au

Gold pays no interest, has no use and no fundamental value – really?

by Dominic Frisby, Money Week:
I know I’m supposed to be taking the summer off, but comments on Twitter from Alan Beattie, international economy editor of the Financial Times, raised hackles and lured me from my bunker.
Beattie declares that there is “no fundamental valuation model” for gold; that “it pays no interest” and that therefore it’s “intrinsically speculative”. Really?
These are common arguments we hear from the gold-has-no-use brigade. I want to address them.
First, gold pays no interest. True. But then, nor does cash – unless you lend it to people. The world needs to realise that by putting cash in the bank you are lending it. Gold can pay interest – if you lend it out. And lots of people do (though for what purpose I cannot say).
Read More @ MoneyWeek.com

Dimon Plays Humpty Dumpty to Congress

“When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master— that’s all.”
-Lewis Carroll, Alice in Wonderland
by Yves Smith, Naked Capitalism:
The House Financial Services Committee hearings on the losses in JP Morgan’s Chief Investment Office were an improvement over the Senate version, in that there was comparatively little fawning over Jamie Dimon and more earnest, even if not very successful, efforts to pry information from him (one wonders whether the fact that Chuck Schumer has been hitting Wall Street up for superPac donations was a contributing factor). Even some Republicans got a bit stroopy with him, including the Representative from Bank of America, Patrick McHenry.
But to anyone who knows bupkis about finance, the striking thing was how many times Dimon gave sloppy to downright dishonest answers. And they didn’t have the feel of the kind of careful word parsing that Goldman execs did when under Congressional hot lights in 2010, of people who’ve been scripted and rehearsed to give very narrow answers and duck anything that will put them on rocky ground.
Read More @ NakedCapitalism.com

Puppet Romney: Bilderberg Pick Rubio Being “Vetted” For VP

Florida Senator is elite’s preferred choice
by Paul Joseph Watson, Infowars:
Republican presidential candidate Mitt Romney has admitted that Florida Senator Marco Rubio is being “vetted” as a potential running mate following speculation that Rubio was a preferred choice for the secretive Bilderberg Group, which has played a role in selecting VP candidates in the past.
“Marco Rubio is being thoroughly vetted as part of our process,” Romney told reporters during a campaign stop in Holland, Mich., dismissing an ABC News report which claimed the Senator was out of the running.

“There was a story that originated today apparently at ABC based upon reports of supposedly outside unnamed advisers of mine. I can’t imagine who such people are,” Romney said. “But I can tell you this: They know nothing about the vice presidential selection or evaluation process. There are only two people in this country who know who are being vetted and who are not, and that’s Beth Myers and myself.”

As we reported back in April, Rubio, who is currently second favorite behind Rob Portman to take the VP slot, was first mooted as a likely choice for Bilderberg by veteran Washington Post columnist Al Kamen.

Read More @ Infowars.com

Will Russian And Chinese Military Forces On Syrian Soil Prevent Obama From Bombing Syria?

from The American Dream:
Everyone knows that the Obama administration has been steadily gearing up for a military campaign against Syria.  Everyone also knows that Russia and China do not want to see this happen.  Now Russia and China are sending military forces to Syria.  It is being reported that Russia, China, Iran and Syria will be conducting the “Middle East’s largest ever military exercise” next month.  Apparently tens of thousands of troops will be involved.  This will be the first time that the Russians and the Chinese have jointly deployed large numbers of troops in Syria.  Will this show of military power be enough to prevent Barack Obama from bombing Syria?  Or will Obama go ahead anyway and risk ruining relations with the Russians and the Chinese?  Tensions are rising in the Middle East and the region is a powder keg that could erupt at any time.  If someone makes the wrong move we could end up with World War III.
A number of sources have reported that the Obama administration has been contemplating a military campaign in Syria similar to what happened in Libya.  The U.S. would institute a no-fly zone, bomb the Syrian government and the Syrian military, and provide heavy military hardware for the rebel forces on the ground.
Read More @ EndOfTheAmericanDream.com

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