Rajoy To de Guindos: "Spain Is Not Uganda"

EURUSD Jumps Driving Global Risk-On (For Now)

As US equity futures open up 15pts or so, it seems EURUSD's initial 130pip spike from Friday's close merely jogged it back up to Friday's late day ramp close in equities (just above Thursday's highs for the major FX cross). Of course it was a see-saw weekend for Spain - they got all the money they wanted (and probably some ponies and unicorns) but only managed a tie against Italy in Euro 2012. Given the short-interest, as we noted in our widely read analysis of #Spailout yesterday (Item 5 here), it is little surprise that we are seeing EURUSD rally. EURUSD is still around 200 pips shy of its swap-spread-implied rate (which seems to be the common level to revert to after 'stress' liquidity hits the EUR and is then 'fixed'). We won't be surprised to see other risk assets levitate on this and while some traders will resist the urge to fade, we suspect that by the time Europe opens things will look a little different as Spanish sovereigns bondholders realize what just happened. The USD is weak against all the majors except JPY as risk-on carry trades hold it practically unch against the USD. Gold has opened modestly higher (in line with USD -0.8% weakness) but Silver is its high beta self +1.9%. Treasury futures are open (cash not yet) but imply a 10-12bps jump in yields for now! WTI just opened 2.3% higher at $86 (so much for that tax-break?)

Euro Zone Leaders Agree to Lend Spain Up to $125 Billion

Eric De Groot at Eric De Groot - 21 minutes ago

Liquidity will be provided to all because the world is not ready for a withdrawal of a euro zone member. Do you have systemic insurance? Headline: Euro Zone Leaders Agree to Lend Spain Up to $125 Billion Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion) to shore up its teetering banks and Madrid said it would specify precisely how much it... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

The Spanish Bank Bailout: A Complete Walk Thru From Deutsche Bank

Over the past 24 hours, Zero Hedge covered the various key provisions, and open questions, of the Spanish bank bailout. There is, however, much more when one digs into the details. Below, courtesy of Deutsche Bank's Gilles Moec is a far more nuanced analysis of what just happened, as well as a model looking at the future of the pro forma Spanish debt load with the now-priming ESM debt, which may very well hit 100% quite soon as we predicted earlier. Furthermore, since the following comprehensive walk-thru appeared in the DB literature on Friday, before the formal announcement, it is quite clear that none other than Deutsche Bank, whose "walk-thru" has been adhered to by the Spanish government and Europe to the dot, was instrumental in defining a "rescue" of Spain's banks, which had it contaged, would have impacted the biggest banking edifice in Europe by orders of magnitude: Deutsche Bank itself.

In The News Today

June 10, 2012, at 3:07 pm
by Jim Sinclair

Dear CIGAs,

$46 billion or whatever is necessary will be provided one way or another to Spain. The US Fed will participate in all the Euroland rescues.

OTC derivatives have broken the Western Financial system. Whatever is required here or in Euroland will be provide as "QE to infinity."

Do you recall the many GB and EU voices that condemned QE when Bernanke was papering the world? Have you noticed those voices have been quiet for months now?

Look at the last names of the writers below.

Spain to Accept Rescue From Europe for Its Ailing Banks By RAPHAEL MINDER, NICHOLAS KULISH and PAUL GEITNER
MADRID — Responding to increasingly urgent calls from across Europe and the United States, Spain on Saturday agreed to accept a bailout for its cash-starved banks as European finance ministers offered an aid package of up to $125 billion.
European leaders hope the promise of such a large package, made in an emergency conference call with Spain, will quell rising financial turmoil ahead of elections in Greece that they fear could further shake world markets.
The decision made Spain the fourth and largest European country to agree to accept emergency assistance as part of the continuing debt crisis. The aid offered by countries that use the euro was nearly three times the $46 billion in extra capital the International Monetary Fund said was the minimum that the wobbly Spanish banking sector needed to guard against a deepening of the country’s economic crisis.
On Sunday, Prime Minister Mariano Rajoy tried to deflect criticism for his government’s decision to seek assistance for Spain’s ailing bank. The winners, he said,  were “the credibility of the European project,  the future of the euro, the solidity of our financial system and the possibility that credit will flow again.”
But he warned  that Spain’s economic problems would worsen  this year despite the request. “This year is going to be a bad one,” Mr. Rajoy told reporters, according to The Associated Press.  More people, he said, could lose their jobs — one out of every four Spaniards is already unemployed.
More…

Jim Sinclair’s Commentary

"The key element is trust. That was true when money was a piece of metal that you could bite or bounce. Now that money is just a piece of paper, it’s even truer. Today’s money is nothing but trust.

That’s why the euro crisis is so bizarre. The euro is, in theory, one of the world’s great currencies. And yet, as this crisis has demonstrated, nobody actually stands behind it. There is no lender of last resort. There is no "full faith and credit." There’s nobody on the other end of the promise."

This is the main reason you heard from President Obama, Chairman Bernanke and Geitner last week. This is why the Euro must not fail. This is why QE to infinity is certain. The crisis of fiat currency is here and now, not in the future.

Tear up your paper money By Jim Jubak
6/7/2012 5:36 PM ET
Modern currency is nothing without trust that governments that use it will back it. And if the once-strong euro can break, what is safe?
So what is it about money that the leaders of the eurozone don’t get?
Money has been around for a while, and it’s not terribly complicated.
The key element is trust. That was true when money was a piece of metal that you could bite or bounce. Now that money is just a piece of paper, it’s even truer. Today’s money is nothing but trust.
That’s why the euro crisis is so bizarre. The euro is, in theory, one of the world’s great currencies. And yet, as this crisis has demonstrated, nobody actually stands behind it. There is no lender of last resort. There is no "full faith and credit." There’s nobody on the other end of the promise.
And it’s as if the leaders of the eurozone wanted to go out of their way to prove it. They’ve taken us up to the velvet curtain and then themselves, with a self-satisfied smile, pulled it aside to show us that there is no Great Oz.
And in the process they’ve done major, and perhaps irretrievable, damage to their own currency and to the very idea of money in our time. If you can’t trust the euro, what paper can you trust?
More…





Jim Sinclair’s Commentary

Sir Richard the Good with comments from Dean Harry Schultz.

From Richard Russell NL:
June 7, 2012 — Yesterday, I wrote about the giant credit bubble that we have all "enjoyed" since the end of World War II back in 1945.
I can’t get the credit bubble out of my mind. I see it everywhere, on store signs, in bank windows, on TV, in flyers on windshields. It’s ubiquitous and drilled into the conscious and unconscious minds of almost everyone on earth.
The Asians are new to the credit boom (actually, the Chinese invented paper money). The Chinese know about revolution and confiscation and the loss of assets. As a result, the Chinese people today save 25% to 40% of their income — "just in case." The world’s merchandisers are now well aware of the Chinese saving habit, and sellers are moving into China as fast as they can in order to grab their share of China’s savings. China is now the economic engine of the world. Question — if a butterfly waves its wings in China, will that set off hurricanes around the world? Answer — probably.
I spend a lot of time wondering how the world is going to resolve the giant credit bubble problem. Right now, almost every living person, every state, every nation is a participant in the credit bubble. The world and its citizens have bought what they want, and more, on credit, and now it’s "payback" time. But nobody and no nation has enough money to pay off what they owe. Really? Then we’ll just print some more of the damn currency! Are the computers working, Charlie?
How will this monster credit bubble be resolved? And when? "This time it’s different" is a phrase that finally has meaning. You see, this time it really IS different.
We know that in the past governments have tried to solve their overspending problems with credit and fiat money. We know that none of the fiat money has ever survived. But what does that tell us about the current world, a world awash in fiat money?
It tells me that there’s a ghastly train wreck somewhere ahead. At some point, sanity will return to citizens of the world, and they’ll start to figure it all out. If fiat money is wealth, then how can any institution print wealth? First scepticism will rise regarding fiat money — then it will rise towards all fiat money.
Somewhere along the line there will have to be a moratorium, a world moratorium regarding money. In the end, people will only trust what they can hold in their clenched fists, or what they can own outright, such as land.  {uncle sez: I have long sed a bank holiday is coming. I like RR’s term moratorium for that stage. Banks closed for xxx days/wks, many not reopening}
Ultimately, the world always returns to what it knows and trusts. What it knows and trusts is gold. I think there will have to be new currencies that are convertible into gold. Printed paper money will be despised, and the whole fiat currency system will be denounced as a racket.
I think toward the end of the downfall of fiat money, there will be a frantic rush to accumulate gold. The great bull market in gold which has been building rather conservatively for over ten years — will suddenly come alive and turn speculative. Just as Americans have been basically disinterested in gold, psychology will reverse and turn white hot for the yellow metal.
Speculation in tangibles — I can see it in the rising speculative interest in works of art and in diamonds. There is a great speculative ocean bubbling beneath us.
Hundreds have turned into thousands, and thousands are now millions. Millions are translating into billions and now sovereign debt is figured in the trillions. There’s a rising tidal wave of money, and most of it is fiat money. But tangible wealth is already sneaking into the mix. It’s sneaking in, in the form of art pieces, collectibles, gold and diamonds. There’s a madness regarding wealth and it’s building into a crescendo.

 

 

Jim’s Mailbox

June 10, 2012, at 3:02 pm
by Jim Sinclair

Euro Zone Leaders Agree to Lend Spain Up to $125 Billion CIGA Eric
Liquidity will be provided to all because the world is not ready for a withdrawal of a euro zone member. Do you have systemic insurance?
Headline: Euro Zone Leaders Agree to Lend Spain Up to $125 Billion
Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion) to shore up its teetering banks and Madrid said it would specify precisely how much it needs once independent audits report in just over a week. After a 2 1/2 hour conference call of the 17 European finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts. "The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euros in total," a Eurogroup statement said.
Source: cnbc.com
More…



Jim,
Just shake it a little! It’ll rise to the top.
CIGA H. Keith

Metals react with VOLATILITY on QE3 Speculation (David Morgan/Butler On Business)‬

from silverguru:

A Dysfunctional Nation

By: John Mauldin, Millennium Wave Advisors, Gold Seek:
dysfunctional [dɪsˈfʌŋkʃənəl] adj
1. (Medicine) Med (of an organ or part) not functioning normally
2. (especially of a family) characterized by a breakdown of normal or beneficial relationships between members of the group
European leaders launched the euro project in the last century as an experiment to see whether political hope could become economic reality. What they have done is create one of the most dysfunctional economic systems in history. And the distortions inherent in that system are now playing out in an increasingly dysfunctional social order. Today we look at some rather disturbing recent events and wonder about the actual costs of that experiment. What type of “therapy” will be needed to treat the dysfunctional family that Europe has become? And maybe I’ll throw in a “fun” item to finish with, so let’s get started.
A Dysfunctional Nation
Michael Lewis has documented quite tellingly in Boomerang the dysfunctional country that is Greece – how citizens avoid taxes, how over 600 categories of workers can retire at the age of 50 with full pensions, and how fraud and corruption are endemic. Other stories have surfaced about how few doctors report more than 10,000 euros of income and how few professionals pay their property taxes.
Read More @ GoldSeek.com

Punts & Clones: Fed up with Euro, Irish town cashes in old currency

from RussiaToday:

Robert Oulds on the Collapse of Today’s EU and Why He Hopes It Happens

from Anthony Wile, The Daily Bell:
The Daily Bell is pleased to present this exclusive interview with Robert Oulds (left).
Introduction:  Mr. Oulds is the Director of the London-based Bruges Group, and an international political analyst who has made a specialty of analyzing and opposing the European Union and its political propaganda. Still a young man, Robert not only holds the position of the director of the Bruges Group, he also became a Conservative Councillor in Chiswick for the Chiswick-Homefields ward in May 2002 after discovering how Labour “ripped Chiswick off.” Oulds himself describes the Bruges Group as a “leading Eurosceptic cross-party think-tank aiming to reform the European Union and end the drive towards the single European State.” He is also the Lead Member for Education in the London Borough of Hounslow and Standard-Bearer and Treasurer for the Chiswick Branch of the Royal British Legion.
Daily Bell: For readers who don’t know, give us some background on yourself and the Bruges Group.
Robert Oulds: The Bruges Group is a think tank and our President is the former Prime Minister Baroness Margaret Thatcher. We were founded following the then Prime Ministers Bruges Speech to the College of Europe in Bruges. The Group was founded to turn her ideas into a political reality. We originally made the case against the centralization of the European Union and for a Europe of democratic and deregulated nation states. We still have our positive vision for an alternative relationship between European states but see that Britain and other countries are now better off out of the unreformable European Union.
Read More @ TheDailyBell.com

More soldiers die from suicide than combat

by J.D. Hayes, Natural News:
Another extremely sad revelation following a decade of war – new Pentagon statistics are showing that the military is losing an average of one soldier per day not to combat in Afghanistan, but to suicide.
As of this writing, according to an Associated Press investigation, there have been 154 suicides for active-duty troops in 2012 – nearly one per day of the year so far.
Besides a surging suicide rate, the military is also experiencing higher incidences of sexual assault, domestic violence, alcohol and drug abuse and other forms of misbehavior.
Analysts say these figures are reflective of an over-burdened military that is reeling from multiple deployments over the past 10 years, mostly to Iraq and Afghanistan
Read More @ NaturalNews.com

Ron Paul, Rand Paul Fallout TRUTH

from Fabian4Liberty:

I have heard it all, in this video I cover what I believe is the truth about what is taking place. Rand Paul has just endorsed a hard core globalist, and has flushed down the toilet 20 plus years of his fathers work. This Liberty movement does not need a leader, however it does need vocal messengers. Ron Paul was that man, to a certain extent I thought Rand Paul was like that.

Secret audio demanding $500,000 from Sharon Palmer released by mystery blogger

by Mike Adams, Natural News:
A mystery blogger has just posted a secret audio file that appears to show Aajonus Vonderplanitz demanding $500,000 from Sharon Palmer (Health Family Farms) and asking for all the assets from Rawesome Foods (James Stewart), including the name “Rawesome.” Aajonus Vonderplanitz is that same individual NaturalNews recently exposed as having acquired a phony PhD from a diploma mill (http://www.naturalnews.com/036076_Aajonus_Vonderplanitz_doctorate_nut…) and being one of the two people behind the effort to disparage the reputations of both Sharon Palmer and James Stewart by publicizing shoddy lab tests which, upon further review, couldn’t even be linked to Sharon Palmer’s chicken (http://www.naturalnews.com/036064_Sharon_Palmer_Healthy_Family_Farms_…).

NaturalNews has confirmed that Vonderplanitz met with the Ventura County District Attorney’s prosecutor Chris Harman. We have also confirmed this is his voice on the recording.
Read More @ NaturalNews.com

Warning: Possible NATO-FSA False Flag Attack in Syria

Unconfirmed reports warn of possible plot to deploy chemical weapons, then blame Syrian government.
by Tony Cartalucci, Activist Post
RT has warned of a possible plot being fomented by Syrian rebels inside NATO member Turkey. The plot involves Syrian rebels deploying chemical weapons obtained in Libya against Syrian civilians, then blaming the Syrian government for the mass casualty event. This of course would provide the West the “casus belli” it has been searching for to circumvent the UN Security Council and implement its long-planned campaign of regime change.
The Means
Libya’s arsenal had fallen into the hands of sectarian extremists with NATO assistance last year in the culmination of efforts to overthrow the government there. Since then, Libya’s militants led by commanders of Al Qaeda’s Libyan Islamic Fighting Group (LIFG) have armed sectarian extremists across the Arab World, from as far West as Mali, to as far East as Syria.
Read More @ Activist Post

With Paul Out of the Picture, The Era of the Individual Commences: The Establishment Should Be More Scared Than Before

from Silver Vigilante:
High impact developments over the past week have left the Ron Paul Campaign sputtering.  Its supporters are confused and frustrated after Ron Paul asked his supporters to be respectful at the Republican National Convention in Tampa, Fl and Rand Paul came out in support of Mitt Romney.  It’s a Paul acquittal of the establishment. Rand’s endorsement of Romney prompted Sean of SGT Report to write the following:
Maybe Rand will get the VP slot under Romney and somehow I’ll feel just a little better. Rand says his Dad is “still his first choice”, but here’s the stark reality as I see it: At this moment for all practical purposes, Rand Paul’s endorsement of Mitt Romney marks the end of the organized battle for liberty in the United States, through the existing (completely corrupt) system.
I agree with Sean. The organized battle for liberty is over through the existing system. But, in my opinion, the battle for liberty is far from over.   Personally, I believe it can be a positive that the Paul Dynasty is out of the way. Now, it is truly time for the individual to organize itself against tyranny and totalitarianism. Of course, Ron Paul has been a big help, but it is now time to move on.
Read More @ Silver Vigilante



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