The Economic Collapse For Dummies

If last week's 74-page all-encompassing thesis on "how 'everything' is interconnected and headed for 'complete systemic disintegration'" is a little too much, here is a 10 minute clip that ties together all the loose ends of the reality bubbling just beneath the veneer of hope that so many call our markets. A spectacular gathering of all things bearish that provides everything you wanted to know about the inevitability of a major economic collapse but were afraid to ask: a little too doom and gloomish perhaps, but sadly that does not make it improbable, especially in the current environment where the central planners keep doing the same over and over, hoping that just once "this time will be different." From demographic trends, over-leveraging, corporate profit extremes, deflationary impacts, and hyperinflationary reflexivity- there's a little here for everyone on a warm Saturday afternoon.

'Black Friday' Blame-Game Escalates As Spain Is Out Of Money In 40 Days

With Valencia bust, Spanish bonds at all-time record spreads to bunds, and yields at euro-era record highs, Spain's access to public markets for more debt is as good as closed. What is most concerning however, as FAZ reports, is that "the money will last [only] until September", and "Spain has no 'Plan B". Yesterday's market meltdown - especially at the front-end of the Spanish curve - is now being dubbed 'Black Friday' and the desperation is clear among the Spanish elite. Jose Manuel Garcia-Margallo (JMGM) attacked the ECB for their inaction in the SMP (bond-buying program) as they do "nothing to stop the fire of the [Spanish] government debt" and when asked how he saw the future of the European Union, he replied that it could "not go on much longer." The riots protest rallies continue to gather pace as Black Friday saw the gravely concerned union-leaders (facing worrying austerity) calling for a second general strike (yeah - that will help) as they warn of a 'hot autumn'. It appears Spain has skipped 'worse' and gone from bad to worst as they work "to ensure that financial liabilities do not poison the national debt" - a little late we hesitate to point out.

Mystery Solved - The Fed Indicts And Absolves Itself

There is no mystery to the “headwinds” that continue to plague and mystify monetary policymakers.  The global economy is not pulled into re-recession by some unseen magical force, conspiring against the good-natured efforts of central bankers.  Instead, the very thing central banks aspire to is the exact poison that alludes their attention.  Conventional economics will continue to believe and empirically “prove” that the theory of the neutrality of money is valid, giving them, in their minds, unrestricted ability to intervene and manipulate over any short-term period (though it is getting harder to argue that these emergency measures are “short-term” nearly five years into their continued existence).  The occurrence of panic in 2008 and the unresolved and unremoved barriers to recovery in the years since, however, fully attest to nonneutrality, an ongoing form of empirical proof that their models will never be able to refute.  And we are all condemned by it.

He Who Deleverages Best: Presenting The 'Credit Intensity' Of Europe's GDP Growth

To evaluate the impact of private sector deleveraging on economic growth/GDP in the context of a rapidly releveraging sovereign, we present the following analysis from Citi which observes various European countries and analyzes the "credit intensity" of GDP growth, or in other words which country has preserved, or even grown its GDP even as its private sector has seen substantial deleveraging. The results are interesting and may present a framework for evaluation the winners and losers in Europe in the era of "great sovereign leveraging", permitting a reverse engineering of the success stories, and applying their lessons to the losers.

Presenting The 10 Most Spectacular Financial Speculations Of The Past 300 Years

Sometimes it seems like the investment community operates on the assumption that the world started in 1929 – or at least that the financial booms, busts and speculators preceding the 1920s are irrelevant to the modern investor. We think this is misguided. Just consider that this common worldview ignores an age where speculators lived in sprawling mansions on Fifth Avenue (as opposed to apartments in the same place measuring about 1/100th the size)! We imagine that there’s a lot to learn from looking at the past 300 years as opposed to the past 80. With this in mind; here we present what we believe to be the best trades of all time...

Why Is The Fed Not Printing Like Crazy?

I am fairly certain the answer to why Bernanke isn’t increasing inflation when his former self and former colleagues say he should be is actually nothing to do with domestic politics, and everything to do with international politics. Most of the pro-Fed blogosphere seems to live in denial of the fact that America is massively in debt to external creditors — all of whom are frustrated at getting near-zero yields (they can’t just flip bonds to the Fed balance sheet like the hedge funds) — and their views matter, very simply because the reality of China and other creditors ceasing to buy debt would be untenable. Why else would the Treasury have thrown a carrot by upgrading the Chinese government to primary dealer status (the first such deal in history), cutting Wall Street’s bond flippers out of the deal?

The Abysmal Earnings Season Explained In Two Charts

The following two charts show just why any hopes that corporate earnings can mask the US economic deterioration this year, as they did in 2011 (probably the first and only way in which 2012 is not a carbon copy of 2011 so far), should be promptly dashed.

Who Is Funding The Presidential Race? A List Of The Uber-Wealthy Behind The PACs

Corporations may or may not be people, but money has always talked, and the wealthy certainly do have a lot of excess cash lying around which they would rather prefer spending in hopes of generating the highest IRR possible by influencing the outcome of the presidential race. Below is a look of the uber-rich who have contributed at least $1 million to the major PACs as disclosed to the Federal Election Commission.

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Trader Dan on the King World News Markets and Metals Wrap

Trader Dan at Trader Dan's Market Views - 4 hours ago

Please click on the following link to listen in to my regular weekly radio interview with Eric King on the KWN Weekly Markets and Metals Wrap. *http://tinyurl.com/cj2or58*

 

Oil and Canadian Dollar Money Flows Hint Coordinated Liquidity Injection Near

Eric De Groot at Eric De Groot - 7 hours ago

The invisible hand is concentrating its long positions in oil and the Canadian dollar, a commodity-based currency with substantial oil reserves, as the global economy weakens and debt crisis worsens. Diffusion index readings above 60% represent significant inflows or accumulation (chart 1 and 2) Accumulation of oil and Canadian dollar as the global economy slows at the margin is... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

 

Valencia, Spain asks for a bailout/Egan Jones lowers credit rating of Spain to CC plus/Spanish 10 yr bond yield rises to 7.27%/Spanish Ibex falls close to 6%

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 8 hours ago

Good morning Ladies and Gentlemen: Gold closed the week up $1.00 by to $1585.00.  Silver after being whacked early, regained its composure and actually finished up on the day by 4 cents to $27.35.  The big news of the day came from Spain where it's 3rd largest city  asked for funds as it was basically broke.  The Spanish Ibex immediately proceeded to fall close to 6% and the Spanish 10 yr bond

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