Doomstead Diner Menu => Economics => Market Flambe => Topic started by: g on May 29, 2012, 04:56:33 PM

Title: Big Slide v2.0 Begins
Post by: g on May 29, 2012, 04:56:33 PM
Quote
Re Whether Inflation is a thing of the Past or not I won't predict, but check out the Elliot Wave on the S&P 500

Looks to me like we are on the right shoulder and skiing downhill in a big  hurry here.
Quote
 

No doubt about it S&P looks terrible. If I did not think the Fed was going  to step in I would be worried. I try to see the big picture. My feeling is you got your deflation and it happened so quick you missed it. We have been in crisis mode since it happened and this I feel is the result. The derivatives market collapsed and the banking system imploded and froze up in 2008. The fed got caught off guard and panicked. They started the greatest reflation ever seen by mankind from the terror caused by their glimpse of deflation. so far it has been somewhat successfull and still being formulated. The bull shit in Europe is a smoke screen to keep attention away from the real problem. Here is a brief report card on Helicopter Ben's work.   :icon_study:
Since early 2009, we predicted that the central banks of the world would engage in massive printing and stimulus in order to avoid the only other alternative, a global depression.  Over $20 trillion of stimulus was promised by the major countries.  Our TARP program was mostly used to recapitalize the global banking system; the primary stimulus in the last round came from China.


Let us take a look at what ensued starting with technology.  During the week of March 9th, 2009, Google bottomed at $289.  Today it trades at $603.  Apple bottomed out at $82.57.  Today, despite a 10-15% pullback from the recent high, it trades at $561.


Turning to oil, The key economic input, it traded as low as $33.55 per barrel during the week of February 9th of  2009.  Oil is now trading at roughly $90 per barrel for West Texas Intermediate crude.


Next up are gold and silver.  Gold hit a low of $801.50 during the week of January 12th 2009.  Gold is now trading at $1,547 in spite of all the hysteria spread by the U.S. media insisting gold is a ‘useless, volatile’ asset.  Silver hit bottom during the week of December 22nd, 2008 at $10.11.  It is now at $27.54, even after the savage attacks against the metal in beginning in May of last year.


Last, we have the mining companies.  The HUI is an Amex-sponsored index of mining companies.  It bottomed at 241.78 during the week of January 12th, 2009.  The index currently stands at 411.57 despite severely lagging the prices of the underlying metals that they produce.


It might be hard for strategists to defend the holdings in the short-term, but the fundamental strategy and the thinking behind it have worked spectacularly well since the bottoms in 2008-09. 


The volatility that we are experiencing is derived from several sources.  The first is that interest rates have been driven to zero and even negative in some cases.  Zero interest rates make all assets very volatile.

Quote from KWN Article
Title: Re: Re: Frostbite Falls Daily Rant
Post by: RE on May 29, 2012, 08:46:55 PM

Next up are gold and silver.  Gold hit a low of $801.50 during the week of January 12th 2009.  Gold is now trading at $1,547 in spite of all the hysteria spread by the U.S. media insisting gold is a ‘useless, volatile’ asset.  Silver hit bottom during the week of December 22nd, 2008 at $10.11.  It is now at $27.54, even after the savage attacks against the metal in beginning in May of last year.


You think the S&P looks bad?  Let's look at the chart for your personal favorite, Gold.

(http://hubertmoolman.files.wordpress.com/2012/01/gold-forecast-2012.jpg)

After topping out at a bit over $1900, Gold is now also seeing price declines, and this DESPITE what should be a massive run to "safety" out of the Euro.

2008 was a "scare", but Lehman is chump change compared to the deleveraging that goes down in the face of Spanish Bankruptcy, both of its Banks and of the Nation State itself.  This again pales in comparison to what occurs when the Euro as a whole collapses.

I agree that to date Helicopter Ben has done a pretty decent job with propping up the market prices of everything, including Gold.  However, his Helicopter isn't big enough to fly around all the Dollars necessary for covering all the margin calls when Spain goes Belly Up.  After that, he still has the crash of the Euro and then the WMD of Derivative collapse.

The charts indicate a delevering phase is beginning again here, and compared to what is coming down the pipe, 2008 was a cakewalk.

RE
Title: Re: Re: Frostbite Falls Daily Rant
Post by: RE on May 29, 2012, 09:09:43 PM
More grist for the Deflation Mill, from Reuters:

Brent stays below $107, heading for worst month in 2 years

Related News

U.S. gas futures down 2 percent midday, pre June expiry
Tue, May 29 2012

IMF says Saudi economy "buoyant" but growth to slow
Tue, May 29 2012

By Luke Pachymuthu

SINGAPORE | Tue May 29, 2012 10:41pm EDT
 
(Reuters) - Oil prices fell for a second straight session on Wednesday, with Brent staying under $107 per barrel, as risk aversion gripped markets after Spain's credit rating downgrade stoked fears of a worsening euro zone crisis denting demand outlook.
 
A shaky euro, which hit a near two-year low versus the dollar after Egan-Jones Ratings cut Spain's credit rating for the third time in less than a month, also dragged down oil prices. A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies. <USD/>

"There is definitely renewed concerns of a contagion in the euro zone with the debt crisis, there is real pressure now on Spain's banks, it's a crisis of confidence," said Ric Spooner, chief market analyst at CMC Markets.

Brent crude eased 35 cents to $106.33 per barrel by 0231 GMT, heading for the biggest monthly drop in two years, while U.S. crude fell 40 cents to $90.36.

U.S. crude was on track for a more than 13 percent drop this month, also the biggest monthly decline since May 2010, with a surge in domestic stockpiles weighing on prices.

Crude stocks at Cushing, Oklahoma storage hub, delivery point of the U.S. crude oil future contract, have risen to a record high of 46.8 million barrels. <EIA/S>

However, oil price losses may be checked by supply concerns as Iran's dispute with the West over Tehran's nuclear program remains unresolved and easing worries about a messy Greek exit from the euro zone after an opinion poll showed leads for Greece's pro-bailout conservatives.

EU leaders have warned Greece of the consequences of renouncing the bailout, saying they will pull the plug on funding - a move that would lead to rapid bankruptcy and an ignominious exit from the single currency.

"Honestly at the moment there doesn't seem to be an adequate contingency in dealing with Greece," Spooner said.

IRAN TENSIONS

A drop in oil prices was limited by concerns over rising tensions between Iran and the West after talks failed to resolve a dispute over the Islamic republic's nuclear program last week.

"Iran continues to remain a significant factor but for the moment with a short to medium term outlook the focus is on Europe and the demand side picture if the crisis continues to deteriorate," Spooner said.

Tehran is refusing to grant United Nations inspectors access to a facility at Parchin which is suspected of being used to develop nuclear weapons. Iran says its aims are entirely peaceful.

Iran has ramped up its production of low-enriched uranium, in the last five years and it could be used for at least five nuclear weapons if refined further, the U.S.-based Institute for Science and International Security (ISIS) said.
Title: Re: Re: Frostbite Falls Daily Rant
Post by: RE on May 29, 2012, 11:52:23 PM
Here's an MSM report just chock full of Good Newz for the markets tomorrow.  That Italian Bond Auction could be entertaining.

Spanish Bonds hitting 7%. Facepalm now down below $29.  Syrians massacring children. Flash Crash anyone?

http://www.youtube.com/v/WrxlVjZJawQ

RE
------------
Europe Shares Seen Dropping on Spain Worries
Published: Wednesday, 30 May 2012 | 1:19 AM ET Text Size By: Shai Ahmed
CNBC Associate Editor

The FTSE 100 [.FTSE  5391.14    34.80  ( 0.65%)   ] is expected to open lower by 27 points, the DAX [.GDAXI  6396.84  ---  UNCH  (0)   ] is seen lower by 10 points and the CAC [.FCHI  3084.70  ---  UNCH  (0)   ] is seen down by 18 points.

The Financial Times is reporting that the European Central Bank has blocked a Spanish plan to recapitalize Bankia, the troubled lender, by that would have indirectly tapped the ECB for funds. European officials told the paper that the ECB had told Spain that proper capital injection was needed for the bank and that its plans were in danger of breaching an ECB ban on “monetary financing.”

Spain’s borrowing costs have been the cause of intense concern in recent days as they near the crucial 7 percent level, a range that forced other countries to seek international financial aid.

In Greece, latest opinion polls for the upcoming elections, scheduled for June 17, show pro-bailout parties inching ahead of Syriza, the leftist anti-bailout party, but still too close to predict a decisive winner.

Euro zone debt worries are likely to see Italy’s borrowing costs edging higher Wednesday when the country tenders up to 6 billion euros ($7.5 billion) in five- and 10-year bonds at 10:00 a.m. BST (5:00 a.m. New York time).

The massacre of over 100 civilians in Houla, Syria, saw Western powers united in expressing their outrage at the Syrian government by expelling diplomats. The anger has been particularly pronounced because almost half those murdered were children. UN peace envoy Kofi Annan met with Syrian President Bashar Al-Assad, who has denied his regime’s involvement in the massacre, Tuesday to express his concerns.

Facebook [FB  28.84    -3.07  (-9.62%)   ] shares fell to a new low below $29 as investors fled the social network’s stock over concerns of an unrealistic valuation at its float and worries about its long-term viability. Facebook debuted on the market at $38 a share.
Title: Re: Re: Frostbite Falls Daily Rant
Post by: RE on May 30, 2012, 12:09:28 AM
From Zero Hedge (http://www.zerohedge.com/news/japanese-bond-curve-inverts-3y-cash-now-king)

RE

Japanese Bond Curve Inverts For First Time Ever As 3Y Cash Is Now King
Submitted by Tyler Durden on 05/30/2012 00:29 -0400

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/05-2/20120529_JGB1s3s.png)

BondCentral BanksEuropean Central BankYield Curve

For the first time ever, 3 year Japanese government bond (JGB) yields are trading below 1 year JGB yields as the world's inexorable desire to repatriate, delever, and seek safety while reaching for as much term yield as is still 'safe' come home to roost. With Swiss rates already grossly negative and German rates rapidly converging, the world's (d)evolution (since evolution conjures a rebirth into something better) is shifting investors out the yield curve as ZIRP is here to stay forever, wherever you look in so-called developed economies (who can print their own money). In the last 4-5 weeks, 3Y Japanese bond yields have dropped 6bps to around 10bps (pretty much the same as every other maturity inside of 3Y) as the entire yield curve gradually flattens pushing out investor's perception of 'cash' to longer- and longer-maturities. The inversion (i.e. 3 year rates below 1 year) is also interesting given its maturity coincides with the maturity of Europe's LTROs as perhaps some round-about funding mechanism to avoid EUR-USD basis swap detection is forcing money into the Japanese bond market. Of course the lower and lower rates are forced by this unintended consequence of Central Bank signaling, the further out investors will creep, accepting more and more duration, which given its generally monetized by the Central Bank ensures rates cannot rise since the jump in the cost of funds would destroy Japan's QE-driven economy. Be careful what you wish for US equity investors, as the Keynesian Endpoint is upon us (and perhaps, just perhaps that is why Central Banks of the world are checking to the Fed, the ECB is playing hardball, and the Fed remains on hold unless apocalypse occurs - which by the way is not an 8% retracement of a 30% straight line rally).

3Y JGBs trade below 1Y JGBs - leaving the short-end inverted...
Title: Re: Re: Frostbite Falls Daily Rant
Post by: g on May 30, 2012, 01:27:33 AM

Next up are gold and silver.  Gold hit a low of $801.50 during the week of January 12th 2009.  Gold is now trading at $1,547 in spite of all the hysteria spread by the U.S. media insisting gold is a ‘useless, volatile’ asset.  Silver hit bottom during the week of December 22nd, 2008 at $10.11.  It is now at $27.54, even after the savage attacks against the metal in beginning in May of last year.


You think the S&P looks bad?  Let's look at the chart for your personal favorite, Gold.

(http://hubertmoolman.files.wordpress.com/2012/01/gold-forecast-2012.jpg)

After topping out at a bit over $1900, Gold is now also seeing price declines, and this DESPITE what should be a massive run to "safety" out of the Euro.

2008 was a "scare", but Lehman is chump change compared to the deleveraging that goes down in the face of Spanish Bankruptcy, both of its Banks and of the Nation State itself.  This again pales in comparison to what occurs when the Euro as a whole collapses.

I agree that to date Helicopter Ben has done a pretty decent job with propping up the market prices of everything, including Gold.  However, his Helicopter isn't big enough to fly around all the Dollars necessary for covering all the margin calls when Spain goes Belly Up.  After that, he still has the crash of the Euro and then the WMD of Derivative collapse.

The charts indicate a delevering phase is beginning again here, and compared to what is coming down the pipe, 2008 was a cakewalk.

RE
RE, You have a deflation bias in your analysis ,so you view the chart frpm the top to it's last price.
I have an inflation bias, so I view the chart from the bottom to the last price.
Of course with the benefit of hindsight and history my bias has been the correct one so far.
The recent correction in the Dollar gold price has been mostly caused by the dim hiding in the dollar to escape the decline in the Euro. That makes as much sense as hiding in the closet when the house is on fire. Turning in pink toilet paper for green toilet paper.
Your deflation is a longshot possibility IMHO and will only happen from a unforeseen accident that prevents immediate response. In taking the deflation view you are fighting both the Fed and History, the latter being the more formidable opponent.      :icon_study:
Title: Re: Re: Frostbite Falls Daily Rant
Post by: g on May 30, 2012, 06:47:49 AM
 They are taking the sledge hammer to all of them. Dow Down 130 S&P 15.00 Oil 2 bucks, Gold 15, ditto for Europe & Asia. Looks like a bad one. :violent1:
Title: Re: Re: Frostbite Falls Daily Rant
Post by: RE on May 30, 2012, 01:47:55 PM
RE, You have a deflation bias in your analysis ,so you view the chart frpm the top to it's last price.
I have an inflation bias, so I view the chart from the bottom to the last price.
Of course with the benefit of hindsight and history my bias has been the correct one so far.
The recent correction in the Dollar gold price has been mostly caused by the dim hiding in the dollar to escape the decline in the Euro. That makes as much sense as hiding in the closet when the house is on fire. Turning in pink toilet paper for green toilet paper.
Your deflation is a longshot possibility IMHO and will only happen from a unforeseen accident that prevents immediate response. In taking the deflation view you are fighting both the Fed and History, the latter being the more formidable opponent.      :icon_study:

GO, my hypothesis is not that at some point you might get your HI in the Dollar.  It may happen.  I am pointing out that what we are looking at NOW is another round of what we saw in 2008, just this time even more pervasive.  Good Grief man, look at the CHARTS and stop holding on to your long term bias here.  As Europe implodes, the selling pressure on those markets is enormous, and that will force a lot of margin calls.  Assets will have to be liquidated, and that includes Gold.

Can/will Helicopter Ben step in to stop a market implosion that has its roots in $Trillions in bad Spanish and Italian debt?  I don't think even the Helicopter Man has that kind of Chutzpah.

The ECB and PBoC have already stated they aren't going to backstop with more monetary easing.  HB is not the only player in the CB game, he's just the one with the Biggest Bazooka.  He can't print in isolation though, it has to be a coordinated print between all the CBs or the inter-currency valuations go all out of tilt.

I really don't think they can stop a Euro implosion.  You just do not get more deflationary than that.  OK, when the dollar finally implodes, that would be more deflationary, but it's still a ways off.  After the Euro collapses, next down the Toilet is the Yen.

We are getting REAL CLOSE now to Flash Crash territory.

http://www.youtube.com/v/WrxlVjZJawQ

SHORT THE PHONE BOOK!

RE
Title: Re: Re: Frostbite Falls Daily Rant
Post by: RE on May 30, 2012, 09:39:04 PM
http://www.youtube.com/v/WrxlVjZJawQ

SHORT THE PHONE BOOK!

RE

(http://jobloss911.com/wp-content/uploads/2009/10/iStock_panic_small2.jpg)
Anybody take my advice?  Ross?  GO?  I think Ben Lichtenstein's call is going to be a regular feature for a while.  This is not a good week to quit drinking.  :wc:

(http://img.timeinc.net/time/daily/2008/0810/stock_1010.jpg)
Every day this smells a little more like Lehman.  Main difference in that case was that Da Fed could go in and pretty much directly backstop AIG, Fannie & Freddie et al to stop the contagion.  In this case, you have a cross border collapse going on which nobody wants to pick up the tab for.  It ain't just Greece anymore.  Spain is fully in the thick of it now and the Italian Bonds are approaching 6%.  Denmark has now been hit with major downgrades from Moodys and their Banks look to be in shambles.  Facepalm is DOWN with Bullet, well on its way to Penny Stock territory.  Facepalm isn't the only tech getting the shit kicked out of it either, RIM down 7%. Oil is getting HAMMERRED:

Quote
Crude Oil, Gasoline, Heating Oil Plunge: Commodities at Close
 
By Aaron Clark on May 30, 2012

The Standard & Poor’s GSCI gauge of 24 commodities fell 2.3 percent to 603.28 at 5 p.m. New York time. The UBS Bloomberg CMCI index of 26 raw materials decreased 1.5 percent to 1,448.983.

CRUDE OIL

Oil tumbled to a seven-month low on speculation that U.S. crude stockpiles climbed to the highest level since 1990 and as the euro weakened on concern that the debt crisis will overwhelm Spain.

Oil for July delivery fell $2.94 to $87.82 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 21. Prices have decreased 16 percent this month, heading for the biggest drop since December 2008.

Brent oil for July settlement declined $3.21, or 3 percent, to end the session at $103.47 a barrel on the London-based ICE Futures Europe exchange. It was the lowest close since Dec. 16.

OIL PRODUCTS

Gasoline fell to a four-month low as the dollar surged and Brent crude sank 3 percent, reducing the cost to make the fuel.

Gasoline for June delivery declined 4.83 cents, or 1.7 percent, to $2.8582 a gallon on the Nymex, the lowest settlement since Jan. 26. Futures have dropped 10 percent in May, trimming this year’s gain to 6.4 percent. The more actively traded July contract fell 2.1 percent to $2.7739.

June-delivery heating oil fell 6.9 cents, or 2.5 percent, to $2.7398 a gallon, the lowest intraday level since Oct. 4, and have tumbled 14 percent in May. The more actively traded July contract sank 2.5 percent to $2.7438.

This should be no surprise, since Eurotrash demand for Oil is set to CRATER here.  Along with the Greeks, take the Spics and the Ities off the road here folks.  Besides the fact the multitudes of UE don't have money to buy gas, the Eurotrash Banks have no CREDIT left to issue for it either.

USTs my personal favorite are pushing yields down so low now they are below anything recorded since the 60s, and might have only been lower directly post WWII.

Can the Helicopter Man stop the Cascade?  The PPT better get on the stick TOMORROW and buy up everything from Hong Kong to the City of London or the margin calls are gonna be coming over the dyke too fast for the laptop to handle. "Here they come to SELL 'EM AGAIN!".

(http://space4peace.org/images/money_burning.jpg)
Yup, I hear the air escaping from the Balloon now.  All those $trillions Helicopter Ben printed over the last 4 years?  On fire AGAIN.   I smell the SMOKE of the Greatest Bonfire of Paper Wealth in All of Recorded History.

KATY BAR THE DOOR!

RE



Quote
Europe worries stalk Wall Street; Dow loses 161

By DANIEL WAGNER

Stocks are closing sharply lower amid fear that Europe's debt crisis might fracture the financial system there.

Strong demand for safe investments Wednesday pushed the yield on the 10-year Treasury note to its lowest level since World War II.

Spain's borrowing costs spiked to the highest level since Spain joined the euro currency. Last week, the nation's fourth-largest lender said it needed nearly $24 billion in government aid.

Greece's future in the euro is uncertain ahead of elections next month.

The Dow closed down 161 points at 12,419. The S&P 500 index was down 19 at 1,313. The Nasdaq composite average was down 34 at 2,837.

About 13 stocks fell for every two that rose on the New York Stock Exchange. Trading volume was heavy at 3.47 billion shares.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Fearing a financial rupture in Europe, investors around the world fled from risk Wednesday. They punished stocks and the euro, and the yield on a benchmark U.S. bond hit its lowest point since World War II.

In the United States, where concerns about Europe have already wiped out most of this year's gains for stocks, major averages fell more than 1 percent. The Dow Jones industrial average was down as much as 184 points.

European stocks lost even more, and the euro dropped below $1.24, its lowest point since the summer of 2010.

"Everyone's just afraid that if Europe doesn't get its act together, there will be a big spillover in the U.S.," said Peter Tchir, manager of the hedge fund TF Market Advisors.

He said the uncertainty over Europe's future was reminiscent of the financial crisis in the fall of 2008, when it was briefly unclear whether banks would be bailed out and "we had these giant swings up and down."

The trigger Wednesday was Spain, where the banking system is under strain a week after its fourth-largest lender required $23.8 billion in government aid to cover souring real estate loans.

Wall Street, which woke up to increased anxiety over higher Spanish borrowing rates, was down from the opening bell.

In the final half-hour of trading, the Dow was down 163 points at 12,416. The Dow has had a miserable May, losing more than 6 percent, and is on track for its first losing month since September.

The Standard & Poor's 500 index lost 20 points to 1,312. The Nasdaq composite index fell 36 to 2,834.

Investors are increasingly worried that problems at the bank, Bankia, might recur at other Spanish banks. Many lent heavily during the nation's real estate bubble. Losses from the real estate crash might be too big for Spain's government to shoulder.

Spain has enacted harsh government spending cuts to bring its budget deficit within strict new European guidelines. But the country is in a recession and has 25 percent unemployment, and might need a bailout, like Greece, Ireland and Portugal.

On Wednesday, borrowing rates rose sharply for Spain and Italy, both seen as the next problem cases in a debt crisis that has rocked Europe for more than two years. Traders dumped bonds issued by those governments.

The yield on Spain's 10-year bonds, a key indicator of market confidence in a country's ability to pay down its debt, shot as high as 6.69 percent, the highest since the euro currency was launched in 2002.

Intense demand for low-risk, easily tradable securities led investors to buy U.S. government debt. The yield on the 10-year Treasury note to 1.62 percent, a big decline from 1.74 percent late Tuesday.

That appeared to be the lowest since 1945, said Bill O'Donnell, head of U.S. Treasury strategy at the Royal Bank of Scotland, citing data from the European Central Bank and other sources.

Federal Reserve daily records only go back to 1962, and those reflect a previous record of 1.70 percent, set May 17.

"There's just a massive flight to safe-haven assets today," O'Donnell said.

He characterized the rush into U.S. bonds by citing a well-known, unsavory analogy made by Richard Fisher, the head of the Federal Reserve's Dallas bank: "The U.S. is the prettiest horse in the glue factory."

Yields on German government bonds, also seen as safe, turned lower.

Concern about Europe lurked around every corner: The European Commission said consumer confidence fell sharply across the region last month. Spaniards withdrew money from their banks, spreading fear about that nation's ability to go on without bailouts. Spain's main stock index closed down 2.6 percent.

An opinion poll in Greece showed that the far-left Syriza party is gaining support ahead of key elections June 17. Syriza opposes the system of bailouts and sharp budget cuts that have kept Greece afloat but also gutted its economy.

If the party wins, Greece may be forced to exit the euro currency. The shock waves could reach nations that have received bailouts, like Portugal, and those that might need them, like Italy.

Until the Greek elections next month, things will be too uncertain for the market to sustain a meaningful rally, said David Kelly, chief market strategist at J.P. Morgan Funds.

If the bailouts continue and European governments start spending to spur growth, Kelly expects the market eventually to rise. If Syriza wins and Greece is expelled from the euro, he sees stormy waters for months to come.

Amid the tumult, Europe's executive branch called on the 17 countries that use the currency to create a "banking union" that can centrally oversee and, if needed, bail out national banks.

If Europe's financial crisis plunges it into a deep recession, global economic growth will likely falter, reducing demand for commodities and machines that power growth.

Fearing that outcome, traders pushed the stocks of heavy equipment maker Caterpillar and aluminum company Alcoa to among the biggest declines among the 30 companies that make up the Dow.

The euro fell as low as $1.2360, the lowest since the summer of 2010. Benchmark stock indexes closed down 2.2 percent in France, 1.8 percent in Italy and Germany.

When banks and big investors get frightened, they sell stocks or bonds and park the money in the safest government debt markets. They buy Japanese yen, German bonds and especially U.S. Treasurys.

It's no longer about turning a profit, said O'Donnell of RBS. That's why German government two-year notes are paying zero percent: People are simply handing their money over for safekeeping.

The U.S. Treasury market is still considered one of the safest places in the world to stash a billions in a hurry. At $11 trillion, no other market is as large, so there's always somebody ready to buy or sell them.

"When people just want to get their money back, there's not a lot of competition," O'Donnell said.

Food and energy commodities fell sharply. Crude oil lost more than $3 to below $88 a barrel. Crude has been falling steadily since the beginning of May, when it traded as high as $106 a barrel.

Kelly, of J. P. Morgan Funds, said investors should remember that the U.S. is on firmer economic footing than Europe, and make sure their portfolios could withstand either possible outcome.

"Things could be much better, or much worse, than the markets have priced in," Kelly said. "The only logical investment strategy is to be balanced -- to get to the middle of the boat."

Among U.S. stocks making moves:

-- Monsanto, the agricultural company, was one of the few big gainers in a sea of red. It jumped more than 3 percent after its CEO said this year's earnings will likely surge 25 percent, far more than Wall Street had been expecting. Sales were strong in its seed and chemicals business, including Roundup herbicides.

-- Research in Motion, maker of the BlackBerry, plunged 7 percent after the company said late Tuesday it had hired a team of bankers to help it weigh its options -- Wall Street jargon for a possible sale or reorganization. RIM's business has been crumbling as smartphone users move to iPhone and Android devices.

-- Whirlpool rose, reversing an earlier loss, after the Department of Commerce ruled that the South Korean government provided illegal subsidies to producers of clothes washers that sold their products in the U.S. The stock gained 1.5 percent to $63.73.


Europe worries stalk Wall Street; Dow loses 161

By DANIEL WAGNER

Stocks are closing sharply lower amid fear that Europe's debt crisis might fracture the financial system there.

Strong demand for safe investments Wednesday pushed the yield on the 10-year Treasury note to its lowest level since World War II.

Spain's borrowing costs spiked to the highest level since Spain joined the euro currency. Last week, the nation's fourth-largest lender said it needed nearly $24 billion in government aid.

Greece's future in the euro is uncertain ahead of elections next month.

The Dow closed down 161 points at 12,419. The S&P 500 index was down 19 at 1,313. The Nasdaq composite average was down 34 at 2,837.

About 13 stocks fell for every two that rose on the New York Stock Exchange. Trading volume was heavy at 3.47 billion shares.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Fearing a financial rupture in Europe, investors around the world fled from risk Wednesday. They punished stocks and the euro, and the yield on a benchmark U.S. bond hit its lowest point since World War II.

In the United States, where concerns about Europe have already wiped out most of this year's gains for stocks, major averages fell more than 1 percent. The Dow Jones industrial average was down as much as 184 points.

European stocks lost even more, and the euro dropped below $1.24, its lowest point since the summer of 2010.

"Everyone's just afraid that if Europe doesn't get its act together, there will be a big spillover in the U.S.," said Peter Tchir, manager of the hedge fund TF Market Advisors.

He said the uncertainty over Europe's future was reminiscent of the financial crisis in the fall of 2008, when it was briefly unclear whether banks would be bailed out and "we had these giant swings up and down."

The trigger Wednesday was Spain, where the banking system is under strain a week after its fourth-largest lender required $23.8 billion in government aid to cover souring real estate loans.

Wall Street, which woke up to increased anxiety over higher Spanish borrowing rates, was down from the opening bell.

In the final half-hour of trading, the Dow was down 163 points at 12,416. The Dow has had a miserable May, losing more than 6 percent, and is on track for its first losing month since September.

The Standard & Poor's 500 index lost 20 points to 1,312. The Nasdaq composite index fell 36 to 2,834.

Investors are increasingly worried that problems at the bank, Bankia, might recur at other Spanish banks. Many lent heavily during the nation's real estate bubble. Losses from the real estate crash might be too big for Spain's government to shoulder.

Spain has enacted harsh government spending cuts to bring its budget deficit within strict new European guidelines. But the country is in a recession and has 25 percent unemployment, and might need a bailout, like Greece, Ireland and Portugal.

On Wednesday, borrowing rates rose sharply for Spain and Italy, both seen as the next problem cases in a debt crisis that has rocked Europe for more than two years. Traders dumped bonds issued by those governments.

The yield on Spain's 10-year bonds, a key indicator of market confidence in a country's ability to pay down its debt, shot as high as 6.69 percent, the highest since the euro currency was launched in 2002.

Intense demand for low-risk, easily tradable securities led investors to buy U.S. government debt. The yield on the 10-year Treasury note to 1.62 percent, a big decline from 1.74 percent late Tuesday.

That appeared to be the lowest since 1945, said Bill O'Donnell, head of U.S. Treasury strategy at the Royal Bank of Scotland, citing data from the European Central Bank and other sources.

Federal Reserve daily records only go back to 1962, and those reflect a previous record of 1.70 percent, set May 17.

"There's just a massive flight to safe-haven assets today," O'Donnell said.

He characterized the rush into U.S. bonds by citing a well-known, unsavory analogy made by Richard Fisher, the head of the Federal Reserve's Dallas bank: "The U.S. is the prettiest horse in the glue factory."

Yields on German government bonds, also seen as safe, turned lower.

Concern about Europe lurked around every corner: The European Commission said consumer confidence fell sharply across the region last month. Spaniards withdrew money from their banks, spreading fear about that nation's ability to go on without bailouts. Spain's main stock index closed down 2.6 percent.

An opinion poll in Greece showed that the far-left Syriza party is gaining support ahead of key elections June 17. Syriza opposes the system of bailouts and sharp budget cuts that have kept Greece afloat but also gutted its economy.

If the party wins, Greece may be forced to exit the euro currency. The shock waves could reach nations that have received bailouts, like Portugal, and those that might need them, like Italy.

Until the Greek elections next month, things will be too uncertain for the market to sustain a meaningful rally, said David Kelly, chief market strategist at J.P. Morgan Funds.

If the bailouts continue and European governments start spending to spur growth, Kelly expects the market eventually to rise. If Syriza wins and Greece is expelled from the euro, he sees stormy waters for months to come.

Amid the tumult, Europe's executive branch called on the 17 countries that use the currency to create a "banking union" that can centrally oversee and, if needed, bail out national banks.

If Europe's financial crisis plunges it into a deep recession, global economic growth will likely falter, reducing demand for commodities and machines that power growth.

Fearing that outcome, traders pushed the stocks of heavy equipment maker Caterpillar and aluminum company Alcoa to among the biggest declines among the 30 companies that make up the Dow.

The euro fell as low as $1.2360, the lowest since the summer of 2010. Benchmark stock indexes closed down 2.2 percent in France, 1.8 percent in Italy and Germany.

When banks and big investors get frightened, they sell stocks or bonds and park the money in the safest government debt markets. They buy Japanese yen, German bonds and especially U.S. Treasurys.

It's no longer about turning a profit, said O'Donnell of RBS. That's why German government two-year notes are paying zero percent: People are simply handing their money over for safekeeping.

The U.S. Treasury market is still considered one of the safest places in the world to stash a billions in a hurry. At $11 trillion, no other market is as large, so there's always somebody ready to buy or sell them.

"When people just want to get their money back, there's not a lot of competition," O'Donnell said.

Food and energy commodities fell sharply. Crude oil lost more than $3 to below $88 a barrel. Crude has been falling steadily since the beginning of May, when it traded as high as $106 a barrel.

Kelly, of J. P. Morgan Funds, said investors should remember that the U.S. is on firmer economic footing than Europe, and make sure their portfolios could withstand either possible outcome.

"Things could be much better, or much worse, than the markets have priced in," Kelly said. "The only logical investment strategy is to be balanced -- to get to the middle of the boat."

Among U.S. stocks making moves:

-- Monsanto, the agricultural company, was one of the few big gainers in a sea of red. It jumped more than 3 percent after its CEO said this year's earnings will likely surge 25 percent, far more than Wall Street had been expecting. Sales were strong in its seed and chemicals business, including Roundup herbicides.

-- Research in Motion, maker of the BlackBerry, plunged 7 percent after the company said late Tuesday it had hired a team of bankers to help it weigh its options -- Wall Street jargon for a possible sale or reorganization. RIM's business has been crumbling as smartphone users move to iPhone and Android devices.

-- Whirlpool rose, reversing an earlier loss, after the Department of Commerce ruled that the South Korean government provided illegal subsidies to producers of clothes washers that sold their products in the U.S. The stock gained 1.5 percent to $63.73.
Title: Re: Re: Frostbite Falls Daily Rant
Post by: g on May 31, 2012, 03:27:15 AM
Anybody take my advice?  Ross?  GO?  I think Ben Lichtenstein's call is going to be a regular feature for a while.  This is not a good week to quit drinking.  :wc:

Things are most certainly reaching panic proportions. We risk the chance of a worldwide deflationary collapse, it may have already started. For this reason RE, my feeling is the Fed is shitting in their pants from fright and is in constant 24 hour around the clock consultation with all other major governments. I expect a world wide coordinated response to these current events. My feeling is it will be decisive, massive in its scope and will be designed to teach the shorts in the Euro and Sovereign Debt a lesson they will never forget. Your opinion is respected RE, it is one I am most familiar with, if I am wrong and they sit back and let the world end here, it will not be the first time my judgement was flawed. What worries me most about my prediction being in error is the idea I have that they may have miscalculated and waited too long to act. I have always claimed they are ass holes, and we both know they have only one tool in their box.
Bankster Money
Bankster Money
Title: Re: Big Slide v2.0 Begins
Post by: RE on May 31, 2012, 04:36:08 PM
I split off the chatter about the current Market Slide from the Daily Rant to this thread in Market Flambe.

Anyhow, more from Graham Summers on the ongoing Euro Collapse follows below.

RE

Spain Just Gave Us a Glimpse Into the True State of the EU Banking System
Submitted by Phoenix Capital Research on 05/31/2012 13:55 -0400


Borrowing CostsBudget DeficitdefaultEuropean Central BankNationalizationSovereign DefaultUnemploymentUnited Kingdom


 

The following is an excerpt from my most recent client letter.

 

In case you missed it, Spain just gave the entire world a glimpse of what’s happening “behind the scenes” in the financial system.

 

I am of course referring to the Bankia nationalization,  the largest bank nationalization in Spain’s history.

 

Bankia was formed in 2010 when the Spanish Government merged seven insolvent cajas  So it’s no surprise that Bankia was a trainwreck waiting to happen… at least to anyone with a working brain.

 

However, both the bank and the Spanish Government decided to maintain the charade that the bank was in great form right up until it collapsed (only one month ago Bankia was talking about paying its dividend).

 

On May 9th the Spanish Government stepped in to nationalize the bank. Its first step was to convert its (the Spanish Government’s) €4.5 billion worth of preferred shares to common shares, thereby taking a 45% stake in the bank.

 

Then Bankia announces €17 billion of new write-downs as well as €7 billion of mark-downs on investments, thereby rendering the bank insolvent. It also revised its 2011 results from a €309 million profit to a €3 billion LOSS.

 

The end result… Bankia just received a €19 billion Euro bailout, the largest in Spain’s history. That’s not the problem however. The REAL problem is that Spain itself is broke…

 

…so where is the €23.5bn for the Bankia rescue going to come from? The state's Fund for Orderly Bank Restructuring (FROB) is down to €5.3bn, and there are many other candidates for that soup kitchen.

 

Spain must somehow rustle up €20bn or more on the debt markets. This will push the budget deficit back into the danger zone, though Madrid will no doubt try to keep it off books – or seek backdoor funds from the ECB to cap borrowing costs. Nobody will be fooled…

 

The Centre for European Policy Studies in Brussels puts likely write-offs at €270bn. We could see Spain's public debt surge into triple digits in short order.

 

As I wrote in my column this morning, the Spanish economy is spiralling into debt-deflation. Monetary and fiscal policy are both excruciatingly tight for a country in this condition. The plan to slash the budget deficit from 8.9pc to 5.3pc this year in the middle of an accelerating contraction borders on lunacy.

 

You cannot do this to a society where unemployment is already running at 24.4pc. Either Europe puts a stop to this very quickly by mobilising the ECB to take all risk of a Spanish (or Italian) sovereign default off the table – and this requires fiscal union to back it up – or it must expect Spanish patriots to take matters into their own hands and start to restore national self-control outside EMU.

 

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100017477/spain-runs-out-of-money/ (http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100017477/spain-runs-out-of-money/)

 

In addition to this, Spain’s regional governments are seeking bailouts:

           

            Spain's Catalonia seeks government help to pay debt

 

Spain's wealthiest autonomous region, Catalonia, needs financing help from the central government because it is running out of options for refinancing debt this year, Catalan President Artur Mas said today.

 

"We don't care how they do it, but we need to make payments at the end of the month. Your economy can't recover if you can't pay your bills," Mas told a group of reporters from foreign media.

 

A spokesman for the Catalan government later emphasised that Mas was referring to payments that must be met routinely each month and not a specific deadline this month.

 

The debt burden of Spain's 17 highly devolved regions, and rising bad loans at the country's banks, are both at the heart of the euro zone debt crisis because investors are concerned they could strain finances so much that Spain, the currency bloc's fourth biggest economy, will need an international bailout.

 

Catalonia, which represents one fifth of the Spanish economy, has more than 13 billion euros in debt to refinance this year, as well as its deficit.

 

All of the regions together have 36 billion euros ($45 billion) to refinance this year, as well as an authorised deficit of 15 billion euros.

 

Last year many of the regions financed debt by falling months or even years behind in payments to providers such as street cleaners and hospital equipment suppliers.

 

http://www.buenosairesherald.com/article/101796/spains-catalonia-seeks-government-help-to-pay-debt (http://www.buenosairesherald.com/article/101796/spains-catalonia-seeks-government-help-to-pay-debt)

 

Thus, Spain has illustrated the true nature of the EU Crisis in just one week. Specifically…

 

1.Both governments and banks are lying about the real risks to their balance sheets (Bankia passed the EU’s stress tests).
2.We have reached the point at which Governments can no longer bailout their own failing banks as the Governments themselves are bankrupt (see Catalonia and Spain as a whole).
 

To recap… Spain has only €5 billion left in its own bailout fund… at a time when its largest bank needs €19 billion (at the least)… and its regional government have begun asking for bailouts too.

 

Oh, and the Spanish banking system needs to write off another €270 billion…  if Spain cannot cobble together €19 billion, where on earth will it get the money needed to support its collapsing banking system which is on the verge of having to write down hundreds of billions of Euros?

 

This is the state of affairs in Europe: bankrupt nations trying to bailout bankrupt banks or looking for bailouts from funds that are backed by other bankrupt nations.

 

What could go wrong?

 

On that note, Spain will take down the EU, guaranteed. I’ve been warning about this for months and everything is unraveling exactly as I forecast. So if you’re not preparing for an end to the EU in its current form as well as a European banking collapse, you need to get moving.

 

I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.

Title: Top Gold Bug is Depressed
Post by: RE on May 31, 2012, 04:50:55 PM
Here from a disappointed and frustrated top Gold Bug, Eric Sprott

RE

Eric Sprott: The Real Banking Crisis, Part II
&nbsp;

(http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg) (http://www.zerohedge.com/users/tyler-durden)
Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 05/31/2012 19:36 -0400





From Eric Sprott and David Baker of Sprott Asset Management (http://sprott.com/markets-at-a-glance/the-real-banking-crisis,-part-ii/)


The Real Banking Crisis, Part II


Here we go again. Back in July 2011 we wrote an article entitled "The Real Banking Crisis" (http://sprott.com/markets-at-a-glance/the-real-banking-crisis/) where we discussed the increasing instability of the Eurozone banks suffering from depositor bank runs. Since that time (and two LTRO infusions and numerous bailouts later), Eurozone banks, as represented by the Euro Stoxx Banks Index, have fallen more than 50% from their July 2011 levels and are now in the midst of yet another breakdown led by the abysmal situation currently unfolding in Greece and Spain.


EURO STOXX BANKS INDEX


(http://sprott.com/media/152811/EURO-STOXX-BANKS-chart.gif)


Source: Bloomberg


On Wednesday, May 16th, it was reported that Greek depositors withdrew as much as &euro;1.2 billion from their local Greek banks on the preceding Monday and Tuesday alone, representing 0.75% of total deposits.1 Reports suggest that as much as &euro;700 million was withdrawn the week before. Greek depositors have now withdrawn &euro;3 billion from their banking system since the country's elections on May 6th, seemingly emptying what was left of the liquidity remaining within the Greek banking system.2 According to Reuters, the Greek banks had already collectively borrowed &euro;73.4 billion from the ECB and &euro;54 billion from the Bank of Greece as of the end of January 2012 - which is equivalent to approximately 77% of the Greek banking system's &euro;165 billion in household and business deposits held at the end of March.3 The recent escalation in withdrawals has forced the Greek banks to draw on an &euro;18 billion emergency fund (released on May 28th), which if depleted, will leave the country with a cushion of a mere &euro;3 billion.4 It's now down to the wire. Greece is essentially &euro;21 billion away from a complete banking collapse, or alternatively, another large-scale bailout from the European Central Bank (ECB).


The way this is unfolding probably doesn't surprise anyone, but the time it has taken for the remaining Greek depositors to withdraw their money is certainly perplexing to us. Official records suggest that the Greek banks only lost a third of their deposits between January 2010 and March 2012, which begs the question of why the Greek banks have had to borrow so much capital from the ECB in the meantime.5 Nonetheless, we are finally past the tipping point where Greek depositors have had enough, and the past two weeks have perfectly illustrated how quickly a determined bank run can propel a country back into crisis mode. The numbers above suggest there really isn't much of a banking system left in Greece at all, and at this point no sane person or corporation would willingly continue to hold deposits within a Greek bank unless they had no other choice.


The fact remains that here we are, in May 2012, and Greece is right back in the exact same predicament it was in before its March 2012 bailout. Before the bailout, Greece had approximately &euro;368 billion of debt outstanding, and its government bond yields were trading above 35%.6 On March 9th, the authorities arranged for private investors to forgive more than &euro;100 billion of that debt, and launched a &euro;130 billion rescue package that prompted Nicolas Sarkozy to exclaim that the Greek debt crisis had finally been solved.7 Today, a mere two months later, Greece is back up to almost &euro;400 billion in total debt outstanding (more than it had pre-bailout), and its sovereign bond yields are back above 29%. It's as if the March bailout never happened&hellip; and if you remember, that lauded Greek bailout back in March represented the largest sovereign restructuring in history. It is now safe to assume that that record will be surpassed in short order. It's either that, or Greece is out of the Eurozone and back on the drachma - hence the renewed bank run among Greek depositors.


Meanwhile, in Spain, bank depositors have been pulling money out of the recently nationalized Bankia bank, which is the fourth largest bank in the country. Depositors reportedly withdrew &euro;1 billion during the week of May 7th alone, prompting shares of Bankia to fall 29% in one day.8 The Bankia run coincided with Moody's issuance of a sweeping downgrade of 16 Spanish banks, a move that was prompted over concerns related to the Spanish banks' &euro;300+ billion exposure to domestic real estate loans, half of which are believed to be delinquent.9 The Spanish authorities were quick to deny the Bankia run, with Fernando Jim&eacute;nez Latorre, secretary of state for the economy stating, "It is not true that there has been an exit of deposits at this time from Bankia&hellip; there is no concern about a possible flight of deposits, as there is no reason for it."10 Funny then that the Spanish government had to promptly launch a &euro;9 billion bailout for Bankia the following Wednesday, May 24th, an amount which has since increased to a total of &euro;19 billion to fund the ailing bank.11 Deny, deny some more&hellip; panic, inject capital - this is the typical government approach to bank runs, but the bailouts are happening faster now, and the numbers are getting larger.


The recent bank runs in Greece and Spain are part of a broader trend that has been building for months now. Foreign depositors in the peripheral EU countries are understandably nervous and have been steadily lowering their exposure to Eurozone sovereign debt. According to JPMorgan analysts, approximately &euro;200 billion of Italian government bonds and &euro;80 billion of Spanish bonds have been sold by foreign investors over the past nine months, representing more than 10% of each market.12 The same can be said for foreign deposits in those countries. Citi's credit strategist Matt King recently reported that, "in Greece, Ireland, and Portugal, foreign deposits have fallen by an average of 52%, and foreign government bond holdings by an average of 33%, from their peaks."13 Spain and Italy are not immune either, with Spain having suffered &euro;100 billion in outflows since the middle of last year (certainly more now), and Italy having lost &euro;230 billion, representing roughly 15% of its GDP.14


As we've stated before, no matter what happens in the Eurozone, the absolute worst case scenario for the authorities is a bank run. It terrifies all involved, because they can spiral out of control faster than governments can react to stop them, save for the most Draconian measures. They also prompt banks to liquidate whatever assets they can, revealing the truth about what their "assets" are actually worth. In this environment, no one wants to find out what the market will really pay for them. We're seeing this now in Spain, where according to Bloomberg, "Many Spanish banks are avoiding property sales so they don't have to "mark to market" valuations. Instead, they're giving developers new loans to pay debt coming due to prevent defaults."15 Sound familiar? We're now at the point where a bank run in one Eurozone country could quickly seize up the entire system - not just in Greece or Spain, but throughout the entire Eurozone and beyond. Greek and Spanish banks are just like all the others; they operate with leverage ratios averaging 25x their equity capital. They are all so overleveraged that it takes very little in deposit withdrawals to cause instantaneous liquidity issues. This is why we'll likely see another ECB-induced printing program announced (with a new abbreviation, hopefully) before a broader bank run can take root. The Eurozone authorities simply cannot risk the consequences of bank runs in countries like Spain, Portugal or Italy, which are far too big to bailout for the over-stretched ECB. It's not about Greece staying or leaving the European Union anymore, it's about the bailout ability of European banking system to survive the impact of massive money transfers.


Nothing is really being solved here, and everyone knows it. We're essentially in the same place we were when the crisis erupted back in 2010, only now there's more total debt outstanding. Bank of Canada Governor Mark Carney remarked in a December 2011 speech that "the global Minsky moment has arrived", and it's now plain for all to see.16 The "Minsky moment" refers to the work of Hyman Minsky, a deceased American economist who developed theories on how debt accumulation eventually leads to financial crises. You don't have to be an economist to understand the crux of Minsky's theories. As an economy grows it takes on increasing amounts of debt. The point eventually comes when the cost of servicing that debt can no longer be met by that economy's productive capacity - that's the Minsky Moment, and we're watching it play out all over the world today. When Greek bond yields spiked back in February 2012, bond investors looking at the country's &euro;368 billion of debt outstanding, its population of 11 million people, and its nominal GDP of $312 billion realized that it couldn't possibly work. There was no way Greece could pay the interest on its debt load. There was no way the bond market could keep pretending everything was ok, like it currently does with the UK, US and Japan&hellip; for now.


Greece clearly needs another large-scale bailout, and we think they'll get one. Greece's exit from the Eurozone represents a Lehman-like scenario to the global banking system - why wait to see what carnage it will unleash? It's always easier to print money, and printing another couple &euro;100 billion is nothing compared to the trillions that have been printed since last November. Where this will get tense, however, is when the market acknowledges the Minsky moment in a larger EU economy, like Spain or Italy. As we go to print, Spanish bond yields are now trading back above 6.5%, signaling the market's non-confidence in the country's ability to back-stop its own banking system. Spain has a population of 47 million, a GDP of roughly $1.3 trillion, national debt of roughly $1.1 trillion, debt owed to the ECB and various bailout funds totaling &euro;643 billion, and now, a banking system that also appears close to collapsing.17 Their Minsky Moment has already arrived, and it's simply a matter now of how the market will react to it, and how long it takes the ECB to come to Spain's rescue.


Without a doubt, the most counterintuitive aspect of the Greece/Eurozone debacle has been its impact on the price of gold. Gold is now back below $1600 for the third time since August 2011; each time has coincided with severe banking stress within Greece and the broader Eurozone. Some pundits have suggested that various European banks are selling gold to raise liquidity, and this would make sense if the Eurozone banks had gold to sell, but we cannot find any evidence of large physical sellers out of Europe. Also, ever since the unlimited US-dollar SWAP agreement was launched in November 2011, USD liquidity has not been the key issue in Europe - rising sovereign bond yields and deposit withdrawals have. On the contrary, the selling pressure in gold once again appears to be expressed primarily through the futures markets, which are highly levered and rarely involve any physical transactions involving actual bullion. The futures market sell-off also appears to be waning now, since the European banking crisis has provided central banks with a politically-palatable excuse to take action if it deteriorates any further.


The recent gold price has been particularly frustrating given the continuation of bullish demand trends out of China. China posted another record Hong Kong gold import number in March of 62.9 tonnes. Gold imports into China have now totaled 135.5 metric tonnes between January and March 2012, representing a 600% increase over the same period last year.18 We don't have to connect the dots here - China is stockpiling the precious metal while investors in the West scratch their heads wondering why the spot price is so low.


CHINA HONG KONG GOLD IMPORTS AND GOLD SPOT PRICE(http://sprott.com/media/152806/CHINA-HK-GOLD-chart.gif)
Source: UBS, Bloomberg


Non-G6 central banks have also continued to accumulate physical gold, with the latest reports revealing another 70 tonnes of gold purchases completed in March and April by the central banks of Philippines, Turkey, Mexico, Kazakhstan, Ukraine and Sri Lanka.19 We won't bore you with the exercise of annualizing those numbers and comparing them to the annual global mine supply, but suffice it to say that the fundamentals still remain firmly intact. It's now simply a matter of improving sentiment towards gold in the West, and if the current banking crisis in Europe gets any worse, or if we see another large-scale policy response, it will likely happen on its own accord.


Although the last eight months have not played out the way we would have expected for gold, they have played out the way we envisioned for the banks. The question now is how long this can go on for, and how long gold can remain under pressure in a banking crisis that has the potential to spread beyond Greece and Spain? So much now rests on the policy responses fashioned by the US Fed and ECB, and just as much also rests on what's left of European citizens' confidence in their local banking institutions. Neither of these things can be precisely measured or predicted, but we continue to firmly believe that depositors in Greece and Spain will choose gold over drachmas or pesetas if they have the foresight and are given the freedom to act accordingly. The number one reason we have always believed gold should be owned, and why we believe it will go higher, is people's growing distrust of the banking system - and we are now there. We will wait and see how the summer develops, and keep our attention firmly focused of the second phase of the bank run now spreading across southern Europe.&nbsp;
1Hope, Kerin and Wigglesworth, Robin (May 16, 2012) "Greek banks see steady deposits outflow". Financial Times. Retrieved May 22, 2012 from:
http://www.ft.com/intl/cms/s/0/3d588c2e-9f3c-11e1-a455-00144feabdc0.html#axzz1v3uDr3Vw (http://www.ft.com/intl/cms/s/0/3d588c2e-9f3c-11e1-a455-00144feabdc0.html#axzz1v3uDr3Vw)
2Smith, Helena and Treanor, Jill (May 16, 2012) "Greeks withdraw &euro;3bn in 10 days since election". The Guardian. Retrieved May 22, 2012 from:
http://www.guardian.co.uk/world/2012/may/16/greeks-withdraw-3bn-10-days (http://www.guardian.co.uk/world/2012/may/16/greeks-withdraw-3bn-10-days)
3Rueters (May 28, 2012) "Greece Pours $22.6 Billion Into Four Biggest Banks". Reuters. Retrived May 29, 2012 from:
http://www.cnbc.com/id/47591006 (http://www.cnbc.com/id/47591006)
4Paris, Costas and Paris, Jenny (May 22, 2012) "Former Greek PM Papademos: Risk of Greece Leaving Euro is Real". Dow Jones. Retirved on May 23, 2012 from:
http://www.dowjones.com/products/djfxtrader/articles/FormerGreekPMPapademosRiskOfGreeceLeavingEuroIsReal.asp (http://www.dowjones.com/products/djfxtrader/articles/FormerGreekPMPapademosRiskOfGreeceLeavingEuroIsReal.asp)
5Smith, Helena and Treanor, Jill (May 16, 2012) "Greeks withdraw &euro;3bn in 10 days since election". The Guardian. Retrieved May 22, 2012 from:
http://www.guardian.co.uk/world/2012/may/16/greeks-withdraw-3bn-10-days (http://www.guardian.co.uk/world/2012/may/16/greeks-withdraw-3bn-10-days)
6Becatoros, Elena and Steinhauser, Gabriele (March 9, 2012) "Greece secures biggest debt deal in history" Associated Press. Retrieved May 20, 2012 from:
http://news.yahoo.com/greece-secures-biggest-debt-deal-history-193537156.html (http://news.yahoo.com/greece-secures-biggest-debt-deal-history-193537156.html)
7Reuters (March 9, 2012) "Sarkozy says Greek problem solved". Reuters. Retrieved May 20, 2012
http://www.reuters.com/article/2012/03/09/us-eurozone-greece-sarkozy-idUSBRE8280QV20120309 (http://www.reuters.com/article/2012/03/09/us-eurozone-greece-sarkozy-idUSBRE8280QV20120309)
8Vigna, Paul (May 17, 2012) "Whatever You Do, Don't Say 'Bank Run'". Wall Street Journal. Retrieved May 22, 2012 from:
http://blogs.wsj.com/marketbeat/2012/05/17/whatever-you-do-dont-say-bank-run/ (http://blogs.wsj.com/marketbeat/2012/05/17/whatever-you-do-dont-say-bank-run/)
9Reuters (May 17, 2012) "Moody's cuts Spanish banks ratings". Reuters. Retrieved May 22, 2012 from: http://www.reuters.com/article/2012/05/17/idUSL1E8GHGOZ20120517 (http://www.reuters.com/article/2012/05/17/idUSL1E8GHGOZ20120517)
10Johnson, Miles (May 17, 2012) "Spain denies bank run reports". Financial Times. Retrived May 20, 2012 from:
http://www.ft.com/intl/cms/s/0/b6705296-a01c-11e1-94ba-00144feabdc0.html#axzz1vn7yKh26 (http://www.ft.com/intl/cms/s/0/b6705296-a01c-11e1-94ba-00144feabdc0.html#axzz1vn7yKh26)
11Giles, Ciaran and Woolls, Daniel (May 28, 2012) "Spanish PM adamant bank sector won't need European Union as Bankia shares plunge". The Associated Press. Retrieved on May 28, 2012 from: http://www.canadianbusiness.com/article/85633--bankia-bailout-plan-sends-shares-plunging-10-year-spanish-bond-yield-soaring (http://www.canadianbusiness.com/article/85633--bankia-bailout-plan-sends-shares-plunging-10-year-spanish-bond-yield-soaring)
12Milne, Richard (May 23, 2012) "Bond exodus on a par with eurozone bank run". Financial Times. Retrieved on May 24, 2012 from:
http://www.ft.com/intl/cms/s/0/8b954e82-a4db-11e1-9a94-00144feabdc0.html#axzz1vn7yKh26 (http://www.ft.com/intl/cms/s/0/8b954e82-a4db-11e1-9a94-00144feabdc0.html#axzz1vn7yKh26)
13Field, Richard (May 21, 2012) "Citi's Matt King on deposit flight likely to pick up speed in the EU". Trust Your Instincts Blog. Retrieved on May 24, 2012 from:
http://tyillc.blogspot.ca/2012/05/citis-matt-king-on-deposit-flight.html (http://tyillc.blogspot.ca/2012/05/citis-matt-king-on-deposit-flight.html)
14Milne, Richard (May 23, 2012) "Bond exodus on a par with eurozone bank run". Financial Times. Retrieved on May 24, 2012 from:
http://www.ft.com/intl/cms/s/0/8b954e82-a4db-11e1-9a94-00144feabdc0.html#axzz1vn7yKh26 (http://www.ft.com/intl/cms/s/0/8b954e82-a4db-11e1-9a94-00144feabdc0.html#axzz1vn7yKh26)
15Smyth, Sharon and Callanan, Neil (May 29, 2012) "Spain Delays And Prays That Zombies Repay Debt: Mortgages". Bloomberg. Retrieved on May 29, 2012 from:
http://www.bloomberg.com/news/2012-05-28/spain-delays-and-prays-that-zombies-repay-debt-mortgages.html?ftcamp=crm/email/2012529/nbe/AlphavilleLondon/product (http://www.bloomberg.com/news/2012-05-28/spain-delays-and-prays-that-zombies-repay-debt-mortgages.html?ftcamp=crm/email/2012529/nbe/AlphavilleLondon/product)
16Carney, Mark (December 12, 2011) "Growth in the Age of Deleveraging". Bank of Canada. Retrieved on May 20, 2012 from:
http://www.bankofcanada.ca/2011/12/speeches/growth-in-the-age-of-deleveraging/ (http://www.bankofcanada.ca/2011/12/speeches/growth-in-the-age-of-deleveraging/)
17Taylor, Anthony (April 19, 2012) "Spanish Debt as at April 19th 2012 vs GDP". British American Marketing. Retirved on May 20, 2012 from:
http://www.britishamericanmarketing.com/consultancy/globaleconomicnews/spainish-debt-as-at-april-19th-2012-vs-gdp-florida-investors-macro-financ-view/ (http://www.britishamericanmarketing.com/consultancy/globaleconomicnews/spainish-debt-as-at-april-19th-2012-vs-gdp-florida-investors-macro-financ-view/)
18Bloomberg News (May 8, 2012) "China's Gold Imports Jump As Country May Become Biggest User". Bloomberg. Retrieved on May 20, 2012 from:
http://www.bloomberg.com/news/2012-05-08/china-s-gold-imports-advance-as-country-may-become-biggest-user.html (http://www.bloomberg.com/news/2012-05-08/china-s-gold-imports-advance-as-country-may-become-biggest-user.html)
19Williams, Lawrence (May 25, 2012) "Central Banks boost gold holdings yet again". Mineweb. Retrieved on May 26, 2012 from:
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=152096&amp;sn=Detail&amp;pid=102055 (http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=152096&amp;sn=Detail&amp;pid=102055)

Title: Re: Re: Frostbite Falls Daily Rant
Post by: RE on May 31, 2012, 05:33:32 PM
Things are most certainly reaching panic proportions. We risk the chance of a worldwide deflationary collapse, it may have already started. For this reason RE, my feeling is the Fed is shitting in their pants from fright and is in constant 24 hour around the clock consultation with all other major governments. I expect a world wide coordinated response to these current events. My feeling is it will be decisive, massive in its scope and will be designed to teach the shorts in the Euro and Sovereign Debt a lesson they will never forget. Your opinion is respected RE, it is one I am most familiar with, if I am wrong and they sit back and let the world end here, it will not be the first time my judgement was flawed. What worries me most about my prediction being in error is the idea I have that they may have miscalculated and waited too long to act. I have always claimed they are ass holes, and we both know they have only one tool in their box.

It really looks to be getting into full swing here now.  The collapse in Spanish and now also Italian Debt is pretty much beyond the capacity of Helicopter Ben to handle on his own, and right now the ECB, PBoC or SNB do not appear ready to do a concerted action printing spree.

Bonus, we haven't even really got started on the Derivatives yet.  BOOM!

http://www.youtube.com/v/GydJiD7v76w

RE
Title: The End Game
Post by: RE on May 31, 2012, 06:02:42 PM
The End Game (http://www.scribd.com/doc/95493792/The-End-Game#key2bukmjiiyjtzns9qcorz)
The End Game
Right on cue, the scariest document ever re: derivatives.  Enjoy

Scribd link on the right  side here and no I cannot figure out how to get it to format differently here inside SMF.  Peter?
RE

The End Game (http://www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-scariest-presentation-ever)
Quote
Submitted by Tyler Durden on 05/31/2012 20:02 -0400


BondChinaETCFractional Reserve BankingGermanyGoldman Sachsgoldman sachsGross Domestic ProductJapanUnited Kingdom


If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn't. The founder of Global Macro Investor "previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe... Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes." It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen....

And we see a lot of those.

Consider this:

•We are here...
(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/05-2/Eye%20Hurricane.jpg)

•We don’t know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank…
•With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
•There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
•The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…
•Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
•From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
•And then do you think Japan and China would not be next?
•And then do you think the US would survive unscathed?
•That is the end of the fractional reserve banking system and of fiat money.
•It is the big RESET.
It continues:

•Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
•The whole bond market will be dead.
•Short selling on bonds - banned
•Short selling stocks – banned
•CDS – banned
•Short futures – banned
•Put options – banned
•All that is left is the Dollar and Gold
It only gets better. We use the term loosely:

•We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
•Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.
•After that…we put on our tin helmets and hide until the new system emerges
And the punchline

From a timing perspective, I think 2012 and 2013 will usher in the end.

Title: Re: Big Slide v2.0 Begins
Post by: g on May 31, 2012, 07:13:19 PM
"Right on cue, the scariest document ever re: derivatives.  Enjoy"

That sure wasn't any nursery rime. Nothing to argue about, right where we are headed if the dim that rule us don't move quickly and decisively. People are panicking now from the constant never ending BS and lack of coherent response. Oil cracking here and falling like a granite boulder is a sign of great stress and contraction in the system. It is the most accurate chart of the fragile condition we are in IMHO.           :icon_study:

sc
Title: Re: Big Slide v2.0 Begins
Post by: RE on May 31, 2012, 07:25:36 PM

That sure wasn't any nursery rime. Nothing to argue about, right where we are headed if the dim that rule us don't move quickly and decisively.

What kind of "quick and decisive" action are they supposed to take to stop this?  Do you WANT them to try to Print to Cover here?

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on May 31, 2012, 07:40:11 PM

That sure wasn't any nursery rime. Nothing to argue about, right where we are headed if the dim that rule us don't move quickly and decisively.

What kind of "quick and decisive" action are they supposed to take to stop this?  Do you WANT them to try to Print to Cover here?

RE
Definitely, the sooner the better. It would be just one item in my response however.
Title: Re: Big Slide v2.0 Begins
Post by: RE on May 31, 2012, 07:46:15 PM

That sure wasn't any nursery rime. Nothing to argue about, right where we are headed if the dim that rule us don't move quickly and decisively.

What kind of "quick and decisive" action are they supposed to take to stop this?  Do you WANT them to try to Print to Cover here?

RE
Definitely, the sooner the better. It would be just one item in my response however.

Good GOD!  ANOTHER fucking Hypocrite!

All you ever do is scream about how Printing is BAD and debases the currency, then you turn around and RECOMMEND PRINTING!

Your credibility is SHOT dude!  LOL.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on May 31, 2012, 08:10:28 PM
I do think printing is bad, I also made it clear that due to their misdeeds and prior actions like severing the link to gold it is the only option they have in their tool box. That is why I am a gold bug, fiat money can do nothing but print its way into extinction, or of course you can choose a decade of soup lines, chaos, deflation and severe austerity instead. Where you get this screaming names like Hypocrite! and crazy attitude tonight is beyond me. It all started when El G showed up. Peter explained his position politely and reasonably and you jumped all over him too. It was a most stressful day for me trading the markets all day and the currency markets this evening, they are a mad house. Going to bed early, am brain dead from the madness. Calm down RE you are seeing things that are not there. Busy Busy day for the worlds markets tomorrow for sure.    GO
Title: Re: Big Slide v2.0 Begins
Post by: RE on May 31, 2012, 08:52:32 PM
I do think printing is bad, I also made it clear that due to their misdeeds and prior actions like severing the link to gold it is the only option they have in their tool box. That is why I am a gold bug, fiat money can do nothing but print its way into extinction, or of course you can choose a decade of soup lines, chaos, deflation and severe austerity instead. Where you get this screaming names like Hypocrite! and crazy attitude tonight is beyond me.

(http://kopfkino.ko.funpic.de/Platoon%206.jpg)
OMFG.  This comes right out of the Vietnam "We had to destroy the village in order to Save it" school of thinking.  You think if Helicopter Ben Prints we WON'T get a decade of Soup Lines, Chaos, deflation and Severe Austerity?  Good God man, what happenned in Weimar Germany after the HI?  Destroying the currency through HI doesn't change the outcome, it just destroys the currency.

Our Illuminati Masters at the BIS DO have a choice here, and they can choose either route here.  In the Great Depression, they chose to Default Debt and  Deflate the Dollar.  You think they won' do that this time?  If they Deflate, they buy up any remaining assets for Penies on the Dollar, not that there are many worth buying of course.

IMHO, you HOPE for an HI here because you think that will make the value of your Gold Stash increase.  If they opt for Deflation, the Gold Card is Trumped.  You may get your wish, but it is by no means a guaranteed outcome.

(http://www.heute.at/storage/scl/bilder/news/welt/384496_m1msw456q75s1v7264_titanic2.jpg?version=1327049707)
Also IMHO, I do not think it is POSSIBLE to reflate this mess once the Sovereign Debt starts to go up in SMOKE, much less the Quadrillion in Derivatives.  You saw the same Charts I did in the End Game pdf I just put up.  Graph after Graph all shows the same Head and Shoulders pattern.  The Titanic is going DOWN here my friend, and right now, Deflation has the Upper Hand.

RE
Title: Re: Big Slide v2.0 Begins
Post by: Karpatok on May 31, 2012, 08:56:12 PM
     Maybe I am cutting off my nose to spite my face, and having never been through anything[likethis] before, Pardon me if I say "GET IT ON" you MFs ,"GET IT ON RIGHT NOW"  So "ARMAGEDON BITCHEZ" you damn well asked for it. Why are you still F ing around in it all anyway. You went on playing the great game and concurring with every bailout to be put on the shoulders of the innocent. I hope the naked emperor minus his putz is left hanging in a tree when the tide goes out. If what the guy in Valencia says is true then we'll really see Hercules at work and may the good guys win. A new day, a new system. And frankly, my dear, I don't give a damn.
Title: All for One, and One for ALL!
Post by: RE on June 01, 2012, 01:20:16 AM
     Maybe I am cutting off my nose to spite my face, and having never been through anything[likethis] before, Pardon me if I say "GET IT ON" you MFs ,"GET IT ON RIGHT NOW"  So "ARMAGEDON BITCHEZ" you damn well asked for it. Why are you still F ing around in it all anyway. You went on playing the great game and concurring with every bailout to be put on the shoulders of the innocent. I hope the naked emperor minus his putz is left hanging in a tree when the tide goes out. If what the guy in Valencia says is true then we'll really see Hercules at work and may the good guys win. A new day, a new system. And frankly, my dear, I don't give a damn.

Gotta agree KK, regardless the consequences, enough is enough already.  Time has nearly come here for both sides to Put Up or Shut Up.  The Conduits are close to cztastrophic failure now, and when they fail as they MUST, the FINAL Battle for ALL THE MARBLES will ensue.  May the best man win.  Good vs Evil.

(http://2.bp.blogspot.com/-nLj2LKBSSMA/TgWnSoC_6XI/AAAAAAAAAAU/pRSghSsai_s/s1600/three-musketeers-1993.jpg)
It is WRITTEN, the Meek Shall Inherit the Earth.  Take Heart, and be ready to Walk into the Valley in the Shadow of Death with the 600.  Or even 6B if that is what is necessary here.  The Meek SHALL Inherit the Earth.  Right AFTER the Meek get very, VERY Angry.  Whatever it takes, PLAY to WIN!  The continuation of the great experiment of Human Sentience on Earth depends on it.  If that holds no value to you, feel free to give it up now.  It holds value to me, and I will NOT give up this battle, so long as these keyboard fingers can write anyhow.  Best of luck to ALL my Friends out there ready to make the GOOD fight, in whatever way you think is right here.  We are all in this one together here now, One for All, All for One.  Musketeers, one and all.

Also, please remember NOT to bring a Sword to a Gunfight.  :icon_mrgreen:

RE
Title: Big Slide: Spain reveals €100bn capital flight
Post by: RE on June 01, 2012, 02:24:17 AM
Off the CNN Newzwire.

No problemo! Chump Change!  LOL.

Should do WONDERS for the market 2moro.

SHORT THE PHONE BOOK!

RE


Spain reveals €100bn capital flight
 
By Claire Jones and Patrick Jenkins in London and Miles Johnson in Madrid
 
June 1, 2012 -- Updated 0853 GMT (1653 HKT)
 
(http://i2.cdn.turner.com/cnn/dam/assets/120512100349-spain-protests-story-top.jpg)
Spain's 'indignants' protesters demonstrate at the Puerta del Sol square in Madrid on May 12, 2012.
 
STORY HIGHLIGHTS
 Almost €100 billion in capital has left Spain in the first three months of the year
Data appears to corroborate earlier assessments investors are selling Spanish assets
 The head of the ECB also lambasted Spain's handling of troubled lender Bankia
 
(Financial Times) -- Madrid was dealt a double blow on Thursday after it emerged that almost €100bn in capital had left the country in the first three months of the year and the head of the European Central Bank lambasted its handling of Bankia, the troubled Spanish lender.
 
Data published by Spain's central bank showed €97bn had been pulled out in the first quarter -- around a 10th of the country's GDP -- as concerns mounted over Madrid's ability to contain its twin economic and financial crises, which have forced government borrowing costs to euro-era highs.
 
The data appeared to corroborate earlier assessments from economists that foreign investors were selling Spanish assets, while Spanish banks were increasing their holdings of domestic bonds, helped by cash accessed through the ECB's three-year liquidity operations.
 
"My concern is that we haven't yet seen the most recent numbers, which could be far worse," said Raj Badiani, an economist at IHS Global Insight. "We are seeing a perfect storm."
 
Spain: Too big to fail, too big to bail
In a damning indictment of Spain's handling of the problems at Bankia, its third largest lender, ECB president Mario Draghi said national supervisors had repeatedly underestimated the amount a rescue would cost. He also cited the rescue of Dexia, the Franco-Belgian lender, as an example.

Is Spain too big to fail?
"There is a first assessment, then a second, a third, a fourth," Mr Draghi said. "This is the worst possible way of doing things. Everyone ends up doing the right thing, but at the highest cost."
 
Mr Draghi's comments come after Spain last week announced it would inject an additional €19bn of capital into Bankia. Madrid's biggest bank nationalisation will take the total amount of state aid pumped into Bankia to €23.5bn. In February, Spain said no more public money would be needed for its banks.
 
The comments are likely to be interpreted as a further criticism of the Bank of Spain. Its governor, Miguel Angel Fernández Ordóñez, is to step down a month early amid increasing political attacks at home over Spain's banking crisis.
 
In recent months people close to the central bank said the bank had been increasingly cut out of Madrid's banking clean-up as Mr Fernández Ordóñez became more politically isolated.
 
Mr Draghi said the lesson from Bankia was that the supervision of banks which presented a risk to the entire eurozone financial system should rest with a centralised authority, rather than national regulators.
 
Strengthening the European Banking Authority, currently a small regulatory body that relies on national regulators to interact with banks in each EU member country, could help advance the argument for pan-European bank bail-outs. That idea has been advocated by peripheral eurozone bankers and policymakers as a means to break the "feedback loop" between troubled sovereign finances and weak banks in need of state bail-outs.
 
Some European policymakers see a more powerful pan-EU banking supervisor as a vital pre-requisite for further mutualisation of European funding issues, including the potential opening up of the European Stability Mechanism as a bail-out equity investor in banks.
 
"The main argument against the ESM taking direct bank stakes is that currently it is up to national authorities to decide on the financing needs of their own troubled institutions," said one European official. "If a European entity is going to inject money into a bank it needs to have confidence in the numbers."
 
Mr Draghi's calls for more centralisation of supervision are likely to meet with resistance elsewhere.
 
Less than two years old, the EBA has a small staff and its efforts to run tough stress tests and force recapitalisation of weak banks have drawn public criticism and private resistance from a number of national regulators.
 
The criticism of national regulators is sure to raise hackles in the UK, where authorities have successfully rescued and recapitalised several banks, including Royal Bank of Scotland, one of the world's largest.
Title: Re: Big Slide v2.0 Begins
Post by: g on June 01, 2012, 04:44:04 AM
 Re Quote "OMFG.  This comes right out of the Vietnam "We had to destroy the village in order to Save it" school of thinking.  You think if Helicopter Ben Prints we WON'T get a decade of Soup Lines, Chaos, deflation and Severe Austerity?  Good God man, what happenned in Weimar Germany after the HI?  Destroying the currency through HI doesn't change the outcome, it just destroys the currency."

Please RE, you are turning into a drama queen. The same thing will happen that happened in the last massive intervention in 2008, Stocks and commodities will rally, the dollar will weaken. Apocalypse will have been postponed for another 12 months or more. You can be go back to discussing how the money was handed out unfairly, the banksters getting most of it. Besides our saviors are still alive, one of them is on CNBC right now spouting his never ending stream of BS.
imagesCAKF6XLS
imagesCAKF6XLS
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 01, 2012, 07:47:52 AM

Please RE, you are turning into a drama queen. The same thing will happen that happened in the last massive intervention in 2008, Stocks and commodities will rally, the dollar will weaken. Apocalypse will have been postponed for another 12 months or more. You can be go back to discussing how the money was handed out unfairly, the banksters getting most of it. Besides our saviors are still alive, one of them is on CNBC right now spouting his never ending stream of BS.

I am NOT "turning into a Drama Queen.  I've ALWAYS been a Drama Queen.

So, Mr. Moving Target, your NEW argument is not that we should return to the Gold Standard to Save the Village, but rather that the only way to Save the Village now is for CBs to print more Fiat currency.  Also that they can perfectly balance their printing for the next 12 years so we don't get an HI, but just a slight bit of price inflation while the stock market is kept floating.  Tell me, in the interim here what happens to the Eurotrash and the Chinese?  Are they also magically kept afloat by the perfect amount of flow from the F7 key on Helicopter Ben's keyboard?  How about J6P?  The new digi-dollars are going to provide enough to float the job market or at least provide enough SNAP cards to go round?

Pardon me if your arguments don't seem consistent and are just a teensy bit self-serving.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on June 01, 2012, 08:18:34 AM

Please RE, you are turning into a drama queen. The same thing will happen that happened in the last massive intervention in 2008, Stocks and commodities will rally, the dollar will weaken. Apocalypse will have been postponed for another 12 months or more. You can be go back to discussing how the money was handed out unfairly, the banksters getting most of it. Besides our saviors are still alive, one of them is on CNBC right now spouting his never ending stream of BS.

I am NOT "turning into a Drama Queen.  I've ALWAYS been a Drama Queen.

So, Mr. Moving Target, your NEW argument is not that we should return to the Gold Standard to Save the Village, but rather that the only way to Save the Village now is for CBs to print more Fiat currency.  Also that they can perfectly balance their printing for the next 12 years so we don't get an HI, but just a slight bit of price inflation while the stock market is kept floating.  Tell me, in the interim here what happens to the Eurotrash and the Chinese?  Are they also magically kept afloat by the perfect amount of flow from the F7 key on Helicopter Ben's keyboard?  How about J6P?  The new digi-dollars are going to provide enough to float the job market or at least provide enough SNAP cards to go round?

Pardon me if your arguments don't seem consistent and are just a teensy bit self-serving.

RE

No My argument is since they WILL NOT return to a gold standard, printing is the only current solution. You weren't paying attention. Your brainwashing on gold has been so thorough that you put blinders on when the four letter word is mentioned. GOLD is the solution. Honest Money of Integrity, History's Money. Banksters and you both ridicule gold, you are in with the wrong crowd RE. Wake Up!
Real Money
Real Money


Title: Re: Big Slide v2.0 Begins
Post by: RE on June 01, 2012, 02:02:22 PM

No My argument is since they WILL NOT return to a gold standard, printing is the only current solution.


No my friend, because as you stipulate, a return to the Gold Standard stops Money Printing.  What would be the POINT to going back to a Gold standard if it did not stop Money Printing, eh? You are arguing here you CAN'T stop money printing without causing Deflation, Austerity, Soup Lines etc for at least a Decade.

Logical Fallacy.

Bang you're DEAD.

(http://www.litb.com/bizcardz/Paladin.jpg)

RE
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on June 01, 2012, 04:02:01 PM
All this back and forth between RE and GO about gold is amusing to me.  Today's divergence between the the SPX and gold was also amusing.  It reinforced my belief that it will probably require a "derivatives event" or "something else" that really gets the margin calls going full steam ahead...after all, the price is a byproduct of rehypothecation, isn't it? - like almost everything else.

I happen to have a small interest in the shiny metal...it's a small percentage of my investments so I don't really give much of a flip.

Maybe a poll is in order?  I have no idea what the parameters should be for such a poll since it would probably need to have set conditions/dates due to the dependence on a "derivatives event" or something else that causes margin calls.  Might be fun though - just an idea.
 
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 01, 2012, 04:59:10 PM

Maybe a poll is in order?  I have no idea what the parameters should be for such a poll since it would probably need to have set conditions/dates due to the dependence on a "derivatives event" or something else that causes margin calls.  Might be fun though - just an idea.


GREATidea for a Poll to drop on this Thread Joe!  However, as you mention, setting up the Parameters for the Poll will take some noodling out.

Here are initial thoughs I have here on this

Poll Question:

How should the Central Banks and their Sovereign States best handle the current monetary system problems to best or most equitably resolve the debt overhang resultant from the Industrial Era?

Some possible choices I can think of right now:

Central Bankets should revert to a Gold Standard in order to stop endless Money Printing

CBs should try to Print in Concert at just a fast enough rate to Balance out Debt Collapse issuing new money to TBTF banks

CBs should try to Print in Concert at just a fast enough rate to Balance out Debt Collapse issuing new money to J6P through a National Subsistence Dole and/or Make Work Projects building Green Energy plants.

A Global Debt Jubilee should be declared wiping out ALL debts and each Nation should issue non-debt Currency

All Goobermint Workers should be Laid off and all uprofitable Biznesses and Banks with outstanding debt should be allowed to fail allowing the Free Market to resolve the problem.

Debtors should be sold off in Slavery to their Creditors or Exterminated

Wealthy People/Corporations should be Asset Stripped and their money/assets redistributed out to the population.

Gold/Silver currently held in CB and Private Vaults as Bars or Coins should be confiscated, re-Coined up and handed out to the Global Population to evenly distribute it and create a World Currency of these Coins.


Other possible choices are actively solicited here before I establish this Poll.  You can also suggest a different setup Question.

RE
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on June 01, 2012, 05:36:23 PM
RE,

Guess I threw a softball down the middle with the poll idea?   I like your poll much better than the one I had in mind.
 
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 01, 2012, 07:07:14 PM
RE,

Guess I threw a softball down the middle with the poll idea?   I like your poll much better than the one I had in mind.

Since I do not know what your concept was, not sure if what I put up was better or worse.  Wasn't a Softball, it was a good starter idea, so I ran with it some. I will wait a while to see if there are some other ideas to drop into the Poll or to reconfgure it in some way before actually setting it up in the thread here.  Making Polls well representative of all the choices possible in a situation like this is tough.  I would like more inpit before finalizing the Poll.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on June 02, 2012, 05:28:26 AM
Quote RE "No my friend, because as you stipulate, a return to the Gold Standard stops Money Printing.  What would be the POINT to going back to a Gold standard if it did not stop Money Printing, eh? You are arguing here you CAN'T stop money printing without causing Deflation, Austerity, Soup Lines etc for at least a Decade."

No RE, What I am saying is they are not proposing going back to the gold standard, therefore they must print to feed the fiat monster, if they do not deflation will result. Going back to gold would stop the printing since money would again have an intrinsic, real worth, and confidence in its stability, It would not cause a deflation as you erroneously think, I have addressed that fallacy in your view before. Gold is the anchor, the stabilizer, in an ocean of violent currents of unstable bankster created fiat. You attribute bad things to gold because of your thorough brainwashing.       :icon_study:
Gold Backed Real Money
Gold Backed Real Money


Title: Re: Big Slide v2.0 Begins
Post by: RE on June 02, 2012, 05:52:37 AM
Quote RE "No my friend, because as you stipulate, a return to the Gold Standard stops Money Printing.  What would be the POINT to going back to a Gold standard if it did not stop Money Printing, eh? You are arguing here you CAN'T stop money printing without causing Deflation, Austerity, Soup Lines etc for at least a Decade."

 Going back to gold would stop the printing since money would again have an intrinsic, real worth, and confidence in its stability, It would not cause a deflation as you erroneously think, I have addressed that fallacy in your view before.

No actually you never have addressed this with any reasonable argument that I recall, you simply posit it as axiomatic.  You say money printing is necessary to stop the deflation, you say Gold will stop money printing, thus it logically follows that if you stop money printing with Gold, you get deflation.  Even if the money has some real intrinsic value that you believe it does, there is still the inability to make more of it thus you get your deflation.  The money you have, aka Gold in this case may become worth more, but relative to the population and resources it would buy, there is still less to go round.  To demonstrate that run the program to Infinity.  If an Infinite number of people attempt to divide up a finite pile of money, each pile approaches Zero.  In this case you have complete deflation as there no longer is enough money around to run the economy, even if the little there is is worth a lot.

Anyhow, since you don't accept logic as an argument here and continue to posit unsupportable axioms, I'm done with this argument.  You are now a Zombie.  You are DEAD but you just don't know it.  You can't argue with Zombies, and if you hang around them too long they eat your brains.

New GO Avatar
(http://www.spookshop.com/v/vspfiles/photos/CA60461-2.jpg)

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on June 02, 2012, 06:25:42 AM
Quote JoeP  "Today's divergence between the the SPX and gold was also amusing."

Could not disagree more about that statement JoeP. Let me assure you that Gold does not move up over 60 dollars in a day while the world wide financial markets are collapsing in unison from panic and financial stress . It doesn't happen. You witnessed a historic day in the markets yesterday. A harbinger; an epic or cataclysmic financial event is imminent. The amount of money needed to move the gold price like that is mind boggling while the entire financial system is under the stress of margin calls, collapsing sovereign bonds, and a complete collapse in oil prices; it is most alarming. Who has that type of financial clout? Was it a person, group of people, a country, Illuminati, and WHY??  No answers here, only a thousand questions.   :icon_study: :icon_study: :icon_study: :Thinkingof_:
Title: F7 Print Button in Lock Up
Post by: RE on June 02, 2012, 06:35:27 AM
For those hoping for a rapid response from CBs to the gathering storm here, at least according to the MSM a massive coordinated Global Printfest does not seem in the cards, at least for next week. At the same time, without a massive intervention here, it is hard to see how the Spanish will survive through to the end of next week either.

Super Mario Dragon, head of the ECB is getting more strident in his calls for Eurobonds and a Transfer Union with full fiscal and monetary integration, with all the concomitant loss of National Sovereignty and elimination of Democratic political control that implies.  HUGE pressure now on the Krauts to pick up the Tab for the cascading debt Tsunami surrounding them, but of course in reality the Krauts can't afford to pick everybody's tab here either.

So, a EZ breakup now seems pretty inevitable, and as usual it is the timeline question which is the most tricky.  The Greeks are in such Dire Straits now that if they don't pull out and at least TRY issuing Drachma the only thing that will keep anything moving around that economy at all is Barter systems.  Same with the Spics, they have to try the Peseta route.

So it is time for a Thought Experiment here about exactly how such a fracture back into multiple currencies in Eurotrashland would be handled on an International Trade level, administered of course by the BIS in Switzerland.

They probably do have Legacy Software they used back in the day to track all these currencies, but of course also back then there was a market for the debt each of these countries sold as well.  The big problem here is that even with a Debt Jubilee of all the current MOUNTAINS of debt, there isn't a market for NEW debt either!  If you actually have some money, why would you lend it to anybody when there is no reasonable expectation you would ever be paid back for it?  The funniest one in this regard are the investors currently buying Kraut debt, who actually are PAYING the Krauts for the priviledge of holding their debt!  LOL.  This on the theory of course that it is better to only trickle away your money than to risk losing it all at once.  This situation is an anomaly however, and would not apply to any other nation in the EZ than Krautland once they move to separate currencies.

So then the question is, could these countries issue NON-DEBT money that would function to buy stuff at least inside their own borders?  Possibly and it would certainly be an interesting experiment, but even if they do that they will still need to try to earn some FOREX, namely Dollars right now that still will buy them some Oil.  Or they could try the Nazi trick of doing Direct barter of something they produce which an OPEC nation needs for their Oil, which generally speaking is mostly Food of course.

However, run that idea out in the case of Spain for instance.  They have good arable land there and can certainly grow more food than say the Iranians can on their patch of desert.  Even if the Spics have surplus food to barter with the Towel Heads though, can they grow ENOUGH to both feed their own population AND trade with the Iranians for enough Oil to run their Carz?  This of course returns us to the Choice Steve presents all the time on EU, is do you feed the Carz or feed the People?

So you say, "But the Nazis did it!  They produced Railroad Cars and got Raw materials from the Argentinians!"  Indeed they did, but of course at the time the Nazis had one of the few industrial apparati necessary for producing railroad cars AND there was a ton of excess Oil out there for them to do that with.  The Spics don't have industrial apparatus to build anything the Towel Heads want that the Chinese can't build cheaper.  So bartering Finished Goods with the Towel Heads won't work for the Spics.

On the Grand Scale across the EU this is pretty much true for everybody except the Krauts, who still do produce some finished goods the Towel Heads want.  However, since the price of their Oil is going up, it costs a lot more for the Krauts to produce the finished goods, so they have to raise the prices on them high enough to make some Value Added profit from burning said Oil.  As they raise those prices, the Towel Heads then cannot afford to buy the BMWs unless of course they divert some of their Oil revenue from buying Food to buying BMWs.  Again the choice is between feeding the Carz or feeding the Peoples.

When the market drops off the map for the BMWs, the Krauts of course also will be in the same situation as the Spics and everybody else in Eurotrashland.  They also will have only Food to trade for Oil. Once you take away the advantage in production that Industrialization powered by cheap energy has, just about everybody can produce inside their own society the finished goods that they need.  They don't NEED to trade for them.  Trade only results when various cultures all have surplus and so begin to produce non-essential items other people also in surplus covet for one reason or another.

In the situation we find ourselves in NOW, after years of resource depletion and expanding population overshoot is that in fact nobody really is in surplus anymore and the vast pool of stored thermodynamic energy to prduce so much suplus is petering out here.  Not disappearing overnight, but rapidly becoming to expensive to burn for the purpose of driving Carz around willy nilly or even making Iphones that nobody REALLY needs, they just WANT them. The monetary system implosion is just a representation of the fact that there is not surplus and there is not a future expectation of ROI by buying anybody's debt.  You won't be paid back, so why invest in anything or loan money to anyone?  If you HAVE money or control over resources, you keep them for yourself and try not to LOSE them or have them taken from you.  Both of which get more difficult all the time of course, both on the Micro level of the Individual and the Macro Level of the Nation State.  Far as the OPEC Nations are concerned, at this point their problem is that since Industrialized nations cannot afford to BUY their Oil from them anymore, now they are trying to STEAL it instead, using the Big Ass Military.  For the Individual, the issue is that since their is no Growth, instead of trying to sieve profit off a growing economy, those in control are STEALING the money through Taxation to bailout TBTF Banks, reneging on Pension Plan agreements and selling Trash for Cash like Facepalm to INCREDIBLY stupid Investors who just are ASKING to be bilked and deserve the fate they got for that stupidity.  Always a SUCKER out there of course.  I don't feel sorry for any of those people, but for the people who have Pension Plans they have no control over who Invested in such trash, I do feel sympathy.  Their money and their futures are being stolen from under them from gimmicks like this, and they have no control over that.  The money from doing these deals is being pocketed here by a few very BIG Thieves at the top, and it is time now to STOP this theft once and for all time, by whatever means is necessary to do so.

RE

Central Banks to hold fire... for now


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By Richard Hubbard

LONDON | Sat Jun 2, 2012 7:39am EDT
 
(Reuters) - The intensifying euro zone crisis and uncertain global growth outlook have raised hopes for a policy response from major central banks but, while it could be a close call, they are likely to resist pressure to act in the coming week.
 
The European Central Bank, the Bank of England and the Reserve Bank of Australia are all due to meet as data emerges on the euro zone's service sector, and the manufacturing and trade performances of the big German and U.S. economies.

The main focus will be Wednesday's ECB meeting, and whether dramatic selling of peripheral European government debt by investors in May and a flight into safe-haven U.S. Treasuries and German government bonds will prompt it to act.

One reason to doubt a major shift in policy is that, even after U.S. Treasury 10-year notes hit yields not seen in more than two centuries of record keeping, and investors began paying the German government for the right to hold its debt, the move across all markets may not warrant it.

"The stresses appear not yet to be big enough across all asset classes for the policymakers to react," said Richard Batty, global investment strategist at Standard Life Investments.

"It all seems to be playing out in investor's appetite for triple-A government bonds and for the dollar, but there doesn't seem to be the volatility or sharp falls in equity markets or other stresses in the system, such as the funding market."

In Europe, the spread between three-month Libor rates and overnight rates, seen as a measure of health of the banking system, has been stable throughout May - mainly due to the more than one trillion euros of cheap funds injected into the system by the ECB in December and February.

And while May was a bad month for equity markets everywhere and Spain and Italy in particular, the widely watched Dow Jones .DXY and S&P 500 .SPX indexes remain in positive territory for the year to date.

Those gains were under threat on Friday, however, as disappointing May U.S. jobs data sparked heavy selling, sending the MSCI world equity index .MIWD00000PUS back to where it started the year.

The VIX index .VIX, often referred to as the market's fear gauge stood at 25 points, in line with its levels of last December but well below the 48 points seen at the height of last year's market turmoil in August and September.

POLITICAL MOVES

A heavy calendar of events throughout June which could help determine how the euro zone crisis unfolds may also encourage Europe's key monetary policymakers to hold fire.

Greek elections are due on June 17, following a first round of French parliamentary elections on June 10. The heads of the G20 group of nations will hold a summit on June 18 and 19, while Europe's leaders gather at the end of the month to decide their next response to the crisis.

But pressure is growing for action from the ECB to calm acute nervousness about a potential Greek exit from the currency bloc, and fears that the cost to Spain of saving its fragile banks will mean the country itself has to be rescued.

"The ECB is currently the only institution that can credibly counter a collective loss of confidence on the scale we're now witnessing," said Nicholas Spiro, Managing Director at debt consultancy Spiro Sovereign Strategy.

Spanish bond yields have surged in the past week to near their highest level since the launch of the euro, raising questions about the country's ability to fund itself over the longer term without outside help.

Spain will provide a big test of investor sentiment when it auctions more government bonds on Thursday as its 10-year bond yields hover around 6.5 percent - close to the 7 percent level at which other indebted countries have been forced to seek aid.

The latest Reuters poll of economists found most still expected the ECB to resist pressure to cut interest rates before the end of next year, but that majority has shrunk from previous polls as gloomy economic data rolls in. Just 11 of the 73 respondents expected the bank to cut rates on June 6. <ECB/INT>

The Bank of England is also expected to resist calls to pump more money into the depressed UK economy when it meets on June 7, according to a separate Reuters poll, although it found there was an even chance the central bank would restart the printing presses at some point in future. POLL3

A slim majority of economists expect Australia's central bank to keep interest rates unchanged on Tuesday, but this is an even closer call as a growing number of banks, including the nation's top four, are calling for a cut. AURATE1

Meanwhile, the U.S. Federal Reserve Board's mid-month policy meeting and the end of its current easing policy, known as 'Operation Twist', could also bring changes.

"With dark clouds gathering over the global economy and the euro area crisis intensifying, the ‘Great Monetary Easing Part 2' looks set to accelerate again as many major central banks around the globe are gearing up for more action in the next month or two," said Manoj Pradhan of Morgan Stanley.
Title: Re: Big Slide v2.0 Begins
Post by: g on June 02, 2012, 06:57:56 AM
Quote RE "Anyhow, since you don't accept logic as an argument here and continue to posit unsupportable axioms, I'm done with this argument.  You are now a Zombie.  You are DEAD but you just don't know it.  You can't argue with Zombies, and if you hang around them too long they eat your brains."
You poor thing, what a brainwashing, you cannot even imagine a world without fiat anymore. One last time; the major argument for most proponents of a gold standard,including myself, is that gold money equals price stability, Not inflation, not deflation, but price STABILITY! The historical record is clear. You had mentioned you did nothing in college but drink beer and bang broads, but I never realized the extent of it until recently.

RE & Room Mate GO Studying
RE & Room Mate GO Studying
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 02, 2012, 07:37:32 AM
One last time; the major argument for most proponents of a gold standard,including myself, is that gold money equals price stability

HTF is the Price of Gold STABLE?  It has been going steadily UP in price for at least 80 years now.  That priced in Dollars of course, so let's look at it's relationship to what it Buys, measured against Oil and normalize it.

Here is the historical Price of Gold measured in Dollars

Year
Average
Price Year
Average
Price Year
Average
Price Year
Average
Price
1833-49* 18.93 1901 18.98 1953 34.84 2005 444.74
1850 18.93 1902 18.97 1954 35.04 2006 603.46
1851 18.93 1903 18.95 1955 35.03 2007 695.39
1852 18.93 1904 18.96 1956 34.99 2008 871.96
1853 18.93 1905 18.92 1957 34.95 2009 972.35
1854 18.93 1906 18.90 1958 35.10 2010 1,224.53
1855 18.93 1907 18.94 1959 35.10 2011 1,571.52
1856 18.93 1908 18.95 1960 35.27
1857 18.93 1909 18.96 1961 35.25
1858 18.93 1910 18.92 1962 35.23
1859 18.93 1911 18.92 1963 35.09
1860 18.93 1912 18.93 1964 35.10
1861 18.93 1913 18.92 1965 35.12
1862 18.93 1914 18.99 1966 35.13
1863 18.93 1915 18.99 1967 34.95
1864 18.93 1916 18.99 1968 39.31
1865 18.93 1917 18.99 1969 41.28
1866 18.93 1918 18.99 1970 36.02
1867 18.93 1919 19.95 1971 40.62
1868 18.93 1920 20.68 1972 58.42
1869 18.93 1921 20.58 1973 97.39
1870 18.93 1922 20.66 1974 154.00
1871 18.93 1923 21.32 1975 160.86
1872 18.94 1924 20.69 1976 124.74
1873 18.94 1925 20.64 1977 147.84
1874 18.94 1926 20.63 1978 193.40
1875 18.94 1927 20.64 1979 306.00
1876 18.94 1928 20.66 1980 615.00
1877 18.94 1929 20.63 1981 460.00
1878 18.94 1930 20.65 1982 376.00
1879 18.94 1931 17.06 1983 424.00
1880 18.94 1932 20.69 1984 361.00
1881 18.94 1933 26.33 1985 317.00
1882 18.94 1934 34.69 1986 368.00
1883 18.94 1935 34.84 1987 447.00
1884 18.94 1936 34.87 1988 437.00
1885 18.94 1937 34.79 1989 381.00
1886 18.94 1938 34.85 1990 383.51
1887 18.94 1939 34.42 1991 362.11
1888 18.94 1940 33.85 1992 343.82
1889 18.93 1941 33.85 1993 359.77
1890 18.94 1942 33.85 1994 384.00
1891 18.96 1943 33.85 1995** 383.79
1892 18.96 1944 33.85 1996 387.81
1893 18.96 1945 34.71 1997 331.02
1894 18.94 1946 34.71 1998 294.24
1895 18.93 1947 34.71 1999 278.98
1896 18.98 1948 34.71 2000 279.11
1897 18.98 1949 31.69 2001 271.04
1898 18.98 1950 34.72 2002 309.73
1899 18.94 1951 34.72 2003 363.38
1900 18.96 1952 34.60 2004 409.72

Now, here is an Oil Price Chart

December 30, 2005 $61.04
January 6, 2006 $64.21
January 13, 2006 $63.92
January 20, 2006 $68.48
January 27, 2006 $67.76
February 3, 2006 $65.37
February 10, 2006 $61.84
February 17, 2006 $59.88
February 24, 2006 $62.91
March 3, 2006 $63.67
March 10, 2006 $59.96
March 17, 2006 $62.80
March 24, 2006 $64.26
March 31, 2006 $66.35
April 7, 2006 $67.43
April 13, 2006 $69.45
April 20, 2006 $72.98
April 28, 2006 $71.58
May 5, 2006 $69.97
May 12, 2006 $71.93
May 19, 2006 $68.53
May 26, 2006 $71.29
June 2, 2006 $72.75
June 9, 2006 $71.64
June 16, 2006 $69.97
June 23, 2006 $70.78
June 29, 2006 $73.52
July 7, 2006 $73.86
July 14, 2006 $76.80
July 21, 2006 $74.57
July 28, 2006 $73.36
August 4, 2006 $74.77
August 11, 2006 $74.35
August 18, 2006 $71.14
August 25, 2006 $72.51
September 1, 2006 $69.19
September 8, 2006 $66.25
September 15, 2006 $63.33
September 22, 2006 $60.55
September 29, 2006 $62.91
October 6, 2006 $59.76
October 13, 2006 $58.57
October 20, 2006 $59.33
October 27, 2006 $60.75
November 3, 2006 $59.05
November 10, 2006 $59.59
November 17, 2006 $58.97
November 24, 2006 $59.24
December 1, 2006 $63.28
December 8, 2006 $62.03
December 15, 2006 $63.43
December 22, 2006 $62.41
December 29, 2006 $61.05
January 5, 2007 $56.31
January 12, 2007 $53.30
January 19, 2007 $51.99
January 26, 2007 $55.42
February 2, 2007 $59.02
February 9, 2007 $59.89
February 16, 2007 $59.39
February 23, 2007 $61.44
March 2, 2007 $61.64
March 9, 2007 $59.69
March 16, 2007 $57.11
March 23, 2007 $62.28
March 30, 2007 $65.87
April 6, 2007 $64.28
April 13, 2007 $63.63
April 20, 2007 $64.11
April 27, 2007 $66.46
May 4, 2007 $61.93
May 11, 2007 $62.37
May 18, 2007 $64.94
May 25, 2007 $65.20
June 1, 2007 $65.08
June 8, 2007 $64.76
June 15, 2007 $68.00
June 22, 2007 $69.14
June 29, 2007 $70.68
July 6, 2007 $72.81
July 13, 2007 $73.93
July 20, 2007 $75.79
July 27, 2007 $77.02
August 3, 2007 $75.48
August 10, 2007 $71.47
August 17, 2007 $71.98
August 24, 2007 $71.09
August 31, 2007 $74.04
September 7, 2007 $76.70
September 14, 2007 $79.10
September 21, 2007 $81.62
September 28, 2007 $81.66
October 5, 2007 $81.22
October 12, 2007 $83.69
October 19, 2007 $88.60
October 26, 2007 $91.86
November 2, 2007 $95.93
November 9, 2007 $96.32
November 16, 2007 $93.84
November 23, 2007 $98.18
November 30, 2007 $88.71
December 7, 2007 $88.28
December 14, 2007 $91.27
December 21, 2007 $93.31
December 28, 2007 $96.00
December 31, 2007 $95.98
January 4, 2008 $97.91
January 11, 2008 $92.69
January 18, 2008 $90.57
January 25, 2008 $90.71
February 1, 2008 $88.96
February 8, 2008 $91.77
February 15, 2008 $95.50
February 22, 2008 $98.81
February 29, 2008 $101.84
March 7, 2008 $105.15
March 14, 2008 $110.21
March 21, 2008 $101.84
March 28, 2008 $105.62
April 4, 2008 $106.23
April 11, 2008 $110.14
April 18, 2008 $116.69
April 25, 2008 $118.52
May 2, 2008 $116.32
May 9, 2008 $125.96
May 16, 2008 $126.29
May 23, 2008 $132.19
May 30, 2008 $127.35
June 6, 2008 $138.54
June 13, 2008 $134.86
June 20, 2008 $135.36 
June 27, 2008 $140.21
July 4, 2008 $145.29
July 11, 2008 $145.08
July 18, 2008 $128.88
July 25, 2008 $123.26
August 1, 2008 $125.10
August 8, 2008 $115.20
August 15, 2008 $113.77
August 22, 2008 $114.59
August 29, 2008 $115.46
September 5, 2008 $106.23
September 12, 2008 $101.18
September 19, 2008 $104.55
September 26, 2008 $106.89
October 3, 2008 $93.88
October 10, 2008 $77.70
October 17, 2008 $71.85
October 24, 2008 $64.15
October 31, 2008 $67.81
November 7, 2008 $61.04
November 14, 2008 $57.04
November 21, 2008 $49.93
November 28, 2008 $54.43
December 5, 2008 $40.81
December 12, 2008 $46.28
December 19, 2008 $42.36
December 26, 2008 $37.71
December 31, 2008 $44.60
January 2, 2009 $46.34
January 9, 2009 $40.83
January 16, 2009 $36.51
January 23, 2009 $46.47
January 30, 2009 $41.68
February 6, 2009 $40.17
February 13, 2009 $37.51
February 20, 2009 $40.03
February 27, 2009 $44.76
March 6, 2009 $45.52
March 13, 2009 $46.25
March 20, 2009 $52.07
March 27, 2009 $52.38
April 3, 2009 $52.51
April 10, 2009 $52.24
April 17, 2009 $50.33
April 24, 2009 $51.55
May 1, 2009 $53.20
May 8, 2009 $58.63
May 15, 2009 $56.34
May 22, 2009 $61.67
May 29, 2009 $66.31
June 5, 2009 $68.44
June 12, 2009 $72.04
June 19, 2009 $69.55
June 26, 2009 $69.16
July 3, 2009 $65.63
July 10, 2009 $59.89
July 17, 2009 $63.56
July 24, 2009 $68.05
July 31, 2009 $69.45
August 7, 2009 $70.93
August 14, 2009 $67.51
August 21, 2009 $73.89
August 28, 2009 $72.74
September 4, 2009 $68.02
September 11, 2009 $69.29
September 18, 2009 $72.04
September 25, 2009 $66.02
October 2, 2009 $69.95
October 9, 2009 $71.77
October 16, 2009 $78.53
October 23, 2009 $80.50
October 30, 2009 $77.00
November 6, 2009 $77.43
November 13, 2009 $76.35
November 20, 2009 $77.47
November 27, 2009 $76.05
December 4, 2009 $75.47
December 11, 2009 $69.87
December 18, 2009 $73.36
December 24, 2009 $78.05
December 31, 2009 $79.36
January 8, 2010 $82.75
January 15, 2010 $78.00
January 22, 2010 $74.54
January 29, 2010 $72.89
February 6, 2010 $71.19
 
February 12, 2010 $74.13
 
February 19, 2010 $79.81
 
February 26, 2010 $79.66
 
March 5, 2010 $81.50
 
March 12, 2010 $81.24
 
March 19, 2010 $80.68
 
March 26, 2010 $80.00
 
April 2, 2010 $84.87
 
April 9, 2010 $84.92
 
April 16, 2010 $83.24
 
April 23, 2010 $85.12
 
April 30, 2010 $86.15
 
May 7, 2010 $75.11
 
May 14, 2010 $71.61
 
May 21, 2010 $70.04
 
May 28, 2010 $73.97
 
June 4, 2010 $71.51
 
June 11, 2010 $73.78
 
June 18, 2010 $77.18
 
June 25, 2010 $78.86
 
July 2, 2010 $72.14
 
July 9, 2010 $76.09
 
July 16, 2010 $76.01
 
July 23, 2010 $78.98
 
July 30, 2010 $78.95
 
August 6, 2010 $80.70
 
August 13, 2010 $75.39
 
August 20, 2010 $73.82
 
August 27, 2010 $75.17
 
September 3, 2010 $74.60
 
September 10, 2010 $76.45
 
September 17, 2010 $73.66
 
September 24, 2010 $76.49
 
October 1, 2010 $81.58
 
October 8, 2010 $82.66
 
October 15, 2010 $81.25
 
October 22, 2010 $81.69
 
October 29, 2010 $81.43
 
November 5, 2010 $86.85
 
November 12, 2010 $84.88
 
November 19, 2010 $81.98
 
November 26, 2010 $83.76
 
December 3, 2010 $89.19
 
December 10, 2010 $87.79
 
December 17, 2010 $88.02
 
December 24, 2010 $91.51
 
December 31, 2010 $91.38
 
January 7, 2011 $88.03
 
January 14, 2011 $91.54
 
January 21, 2011 $89.11
 
January 28, 2011 $89.34
 
February 4, 2011 $89.03
 
February 11, 2011 $85.58
 
February 18, 2011 $86.20
 
February 25, 2011 $97.88
 
March 4, 2011 $104.42
 
March 11, 2011 $101.16
 
March 18, 2011 $101.07
 
March 25, 2011 $105.40
 
April 1, 2011 $107.94
 
April 8, 2011 $112.79
 
April 15, 2011 $109.66
 
April 22, 2011 $112.29
 
April 29, 2011 $113.93
 
May 6, 2011 $97.18
 
May 13, 2011 $99.65
 
May 20, 2011 $100.10
 
May 27, 2011 $100.59
 
June 3, 2011 $100.22
 
June 10, 2011 $99.29
 
June 17, 2011 $93.01
 
June 24, 2011 $91.16
 
July 1, 2011 $94.94
 
July 8, 2011 $96.20
 
July 15, 2011 $97.24
 
July 22, 2011 $99.87
 
July 29, 2011 $95.70
 
August 5, 2011 $86.88
 
August 12, 2011 $85.38
 
August 19, 2011 $82.26
 
August 26, 2011 $85.37
 
September 2, 2011 $86.45
 
September 9, 2011 $87.24
 
September 16, 2011 $87.96
 
September 23, 2011 $79.85
 
September 30, 2011 $79.20
 
October 7, 2011 $82.98
 
October 14, 2011 $86.80
 
October 21, 2011 $87.40
 
October 28, 2011 $93.32
 
November 4, 2011 $94.26
 
November 11, 2011 $98.99
 
November 18, 2011 $97.67
 
November 25, 2011 $96.77
 
December 2, 2011 $100.96
 
December 9, 2011 $99.41
 
December 16, 2011 $93.53
 
December 23, 2011 $99.68
 
December 30, 2011 $98.83
 
January 6, 2012 $101.56
 
January 13, 2012 $98.70
 
January 20, 2012 $98.33
 
January 27, 2012 $99.56
 
February 03, 2012 $97.84
 
February 10, 2012 $98.67
 
February 17, 2012 $103.24
 
February 24, 2012 $109.77
 
March 2, 2012 $106.70
 
March 9, 2012 $107.40
 
March 16, 2012 $107.06
 
March 23, 2012 $106.87
 
March 30, 2012 $103.02
 
April 6, 2012 $103.31
 
April 13, 2012 $102.83
 
April 20, 2012 $103.88
 
April 27, 2012 $104.93
 
May 4, 2012 $98.49
 
May 11, 2012 $96.13
 
May 18, 2012 $91.48
 
May 25, 2012 $90.86
 
June 1, 2012 $83.23
 
The Oil Price Chart only goes back to 2005, so let us start with that year.  Oil=$61, Gold=$445 Gold/Oil=7.295
Last data for both Oil and Gold in 2011   Oil=avg around $90, Gold=$1572  Gold/Oil=17.47

As is obvious here, the price of Gold measured in Oil is not stable AT ALL.  An Ounce of Gold buys more than TWICE what an Ounce of Gold bought in 2005!  it is not stable in Dollars, it is not stable measured against other resouces either because it is not increasing as rapidly in supply, duh.

Now, in the future here as Oil decreases in its availability also, it will likely start to move the other way against Gold, but regardless of the direction of movement, to claim there is price stability in Gold against anything you might buy with it is a canard.  Its relative price against anything else depends on supply and demand and its perceived value at any given time in the markets, not to mention manipulation that can be done all the time by large holders of either Gold or resources.

Gold is not increasing much in supply, and will even less so as Oil becomes less available to mine it with.  Its price measured in ANYTHING else won't remain stable, it will INCREASE in price as long as its perceived value remains high and the supply remains low, it will decrease in price if its perceived value drops and the supply increases through liquidations of central piles of the stuff.  This is Econ 1010 GO, and the NUMBERS all disprove your claim of price stability in Gold anyhow.  You better go eat some more brains, yours are fried.

RE
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 02, 2012, 08:02:13 AM
Quote JoeP  "Today's divergence between the the SPX and gold was also amusing."

Could not disagree more about that statement JoeP. Let me assure you that Gold does not move up over 60 dollars in a day while the world wide financial markets are collapsing in unison from panic and financial stress . It doesn't happen. You witnessed a historic day in the markets yesterday. A harbinger; an epic or cataclysmic financial event is imminent. The amount of money needed to move the gold price like that is mind boggling while the entire financial system is under the stress of margin calls, collapsing sovereign bonds, and a complete collapse in oil prices; it is most alarming. Who has that type of financial clout? Was it a person, group of people, a country, Illuminati, and WHY??  No answers here, only a thousand questions.

The answer here is of course Volatility in an unstable market.  Many assets are mispriced now due to market manipulations, so vast amounts of capital are moving between asets in the attempt to Hedge.  USTs, Kraut Bunds and Gold also are so far the beneficiaries of this movement, but they are not priced correctly EITHER because of the market manipulation.

Who is moving around such vast amounts of money/capital/debt?  Mostly the TBTF Banks I suspect, but also probably Shadow Banking of the Iluminati as well. You cannot predict on any given day where or how they will try to move the market, it is getting ever more volatile here. It will get moreso as more people/institutions start to PANIC so it is not a good time to be playing the markets if you have a weak stomach.  Price Swings are likely to be enormous here.  Its the Titanic half filled with water now being sloshed back and forth by the ocean and on its way down.

Duck and Cover baby, this sucker is going DOWN here now.

Here they come to Sell 'em AGAIN!

http://www.youtube.com/v/WrxlVjZJawQ

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on June 02, 2012, 08:39:44 AM
Quote RE "This is Econ 1010 GO, and the NUMBERS all disprove your claim of price stability in Gold anyhow.  You better go eat some more brains, yours are fried."

You just don't get it you are measuring prices in fiat, not gold. Think GOLD not fiat.

As to your remark about my brain being fried, it is a blatant LIE. Sure I smoked a few joints with my good friend Slick Willie at Oxford. You may have heard of him, crown prince of the Dem's and their ideals, also POTUS. We smoked but we never inhaled Honest!, just ask Slick Willie, he will vouch for me, he never told a lie in his life, we never never inhaled.
I Never Inhaled HONEST ask Slick Willie
I Never Inhaled HONEST ask Slick Willie
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 02, 2012, 12:13:49 PM

You just don't get it you are measuring prices in fiat, not gold. Think GOLD not fiat.


No I am not measuring the prices in Fiat, I am measuring it in how many barrels of OIL it buys.  I divided the fiat OUT to normalize it.  In 2005 a 1 Oz Gold Eagle bought 7.295 Barrels of Oil.  In 2011, same Gold Eagle bought 17.47 Barrels.  That is NOT stability.  If it was stable, it would have bought the same number of barrels.  Its relative worth always changes relative to supply and demand and perceived worth, not to mention of course market manipulation of both commodities by large holders of both.

Its never been stable.  In England in the 1600s when Gold went scarce, its value measured in Silver shot through the roof.  In Old West mining towns where Gold was plentiful but steaks were not, the value of Gold relative to a juicy T-Bone dropped like a rock.  No fiat involved here, measuring purchasing power. Its NOT stable.  Econ 101 dude, supply and demand.

Go smoke some more dope.

RE
Title: Re: Big Slide v2.0 Begins: Restore Gold Standard For Price Stability and Jobs
Post by: g on June 02, 2012, 01:43:15 PM
     Restore Gold Standard for price stability, employment
 
     By Charles W. Kadlek
There were no worldwide financial crises of major magnitude during the Bretton Woods era from 1947 to 1971. Lesson: Gold is a more efficient governor of monetary policy that the Federal Reserve.

When it last met, the Federal Open Market Committee (FOMC) signaled its desire to increase the rate of inflation by providing additional monetary stimulus. This policy is based on a false-and dangerous-premise: that manipulating the dollar's buying power will lead to higher employment and economic growth. But the experience of the past 40 years points to the opposite conclusion: that guaranteeing a stable value for the dollar by restoring dollar-gold convertibility would be the surest way for the Federal Reserve to achieve its dual mandate of maximum employment and price stability.

From 1947 through 1967, the year before the US began to weasel out of its commitment to dollar-gold convertibility, unemployment averaged only 4.7% and never rose above 7%. Real growth averaged 4% a year. Low unemployment and high growth coincided with low inflation. During the 21 years ending in 1967, consumer-price inflation averaged just 1.9% a year. Interest rates, too, were low and stable-the yield on triple-A corporate bonds averaged less than 4% and never rose above 6%.

What's happened since 1971, when President Nixon formally broke the link between the dollar and gold? Higher average unemployment, slower growth, greater instability and a decline in the economy's resilience. For the period 1971 through 2009, unemployment averaged 6.2%, a full 1.5 percentage points above the 1947-67 average, and real growth rates averaged less than 3%. We have since experienced the three worst recessions since the end of World War II, with the unemployment rate averaging 8.5% in 1975, 9.7% in 1982, and above 9.5% for the past 14 months. During these 39 years in which the Fed was free to manipulate the value of the dollar, the consumer-price index rose, on average, 4.4% a year. That means that a dollar today buys only about one-sixth of the consumer goods it purchased in 1971.

Interest rates, too, have been high and highly volatile, with the yield on triple-A corporate bonds averaging more than 8% and, until 2003, never falling below 6%. High and highly volatile interest rates are symptomatic of the monetary uncertainty that has reduced the economy's ability to recover from external shocks and led directly to one financial crisis after another. During these four decades of discretionary monetary policies, the world suffered no fewer than 10 major financial crises, beginning with the oil crisis of 1973 and culminating in the financial crisis of 2008-09, and now the sovereign debt crisis and potential currency war of 2010. There were no world-wide financial crises of similar magnitude between 1947 and 1971.

At the center of each of these crises were gyrating currency values-either on foreign-exchange markets or in terms of real goods and services. As the dollar's value gyrates it produces windfall profits and losses, feeding speculation and poor judgment. The housing bubble was fed in part by 40 years of experience with a dollar that lost purchasing power every year. Today, individual investors are piling into gold and other commodities in hopes of finding a safe haven from the FOMC's intention to decrease the buying power of the dollar and reduce the value of our savings.

And what of the seductive promise that a floating dollar would make American labor more competitive and improve the nation's trade balance? In 1967, one dollar could buy the equivalent of approximately 2.4 euros (based on the pre-euro German mark) and 362 yen. Over the succeeding 42 years, the dollar has been devalued by 72% against the euro and 75% against the yen. Yet net exports have fallen from a modest surplus in 1967 to a $390 billion deficit equivalent to 2.7% of GDP today.

The members of the FOMC, like their predecessors, are trying to do the best they can, but they are not really sure what it is that needs to be done. They have kept the federal-funds rate near zero for almost two years, but small businesses find it difficult to get loans and savers suffer from the lost income brought by artificially low interest rates. Now they're about to advocate higher inflation-i.e., less price stability-in hopes of spurring economic growth.

Economists and pundits may disagree on why the gold standard delivered such superior results compared to the recurrent crises, instability and overall inferior economic performance delivered by the current system. But the data are clear: A gold-based system delivers higher employment and more price stability. The time has come to begin the serious work of building a 21st-century gold standard for the benefit of American workers, investors and businesses.                                                                              :icon_study:
(Courtesy: Daily Reckoning, Australia)
Title: Re: Big Slide v2.0 Begins: Restore Gold Standard For Price Stability and Jobs
Post by: RE on June 02, 2012, 02:09:29 PM
     Restore Gold Standard for price stability, employment
 
     By Charles W. Kadlek


Pasting Goldbug Propaganda from Charlie doesn't cut the mustard here GO.  You actually have to respond to what I wrote.

Charlie writes:

Quote
From 1947 through 1967, the year before the US began to weasel out of its commitment to dollar-gold convertibility, unemployment averaged only 4.7% and never rose above 7%. Real growth averaged 4% a year. Low unemployment and high growth coincided with low inflation. During the 21 years ending in 1967, consumer-price inflation averaged just 1.9% a year. Interest rates, too, were low and stable-the yield on triple-A corporate bonds averaged less than 4% and never rose above 6%.

His thesis here in the article is that the growth and low unemployment of those years is all because of a Gold Standard.  He ignores the fact that this was the post-WWII years when the industrial infrastructure of Europe was in ruins and here in the FSofA we had our own source of Cheap Oil bubblin up from Jed Clampett's farm.

Going off Gold in 1971 wasn't the CAUSE of reduced productivity and increased unemployment, both were the RESULT of reaching local Peak Oil here in the FSofA around 1970 or so.  The only way to make it appear that growth was still occurring was to go into DEBT to buy Saudi Oil, and so long as the Saudis would accept Dollars for Oil that could be done until the Saudi Oil got too expensive and the Chinese were competing for it.

If we had stayed on the Gold standard in 1971, in order to buy Oil from the Saudis we would have emptied Fort Knox of Tungsten probably by 1980.  Our economy would have crashed back then instead of being extended and pretended out until now.  Actually came pretty close during the Oil Embargo in the late 70s.

Anyhow, I gotta stop arguing with Cut & Paste Zombies.  You can't change somebody's mind after they are already DEAD, even if they are still Walking.

Recent Gold Bug Protest in front of Da NY Fed
(http://www.ifc.com/wp-content/uploads/2010/09/09272010_Walking_Dead_fan_credits.jpg)

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on June 02, 2012, 03:02:39 PM
RE Quote"Pasting Goldbug Propaganda from Charlie doesn't cut the mustard here GO.  You actually have to respond to what I wrote."

As the gent said at TAE  RE you like to muddy the waters, if you could stay on topic perhaps I could help you. There was no peak oil problem forty years ago, it was an Arab oil boycott and the formation of OPEC that caused it, don't blame it on gold not being a restraint on inflation. You have to stop making up History to suit your arguments. I have been endlessly trying to explain to you that gold backing of money prevents excess printing of it's paper derivative and you have price stability on account of it. You wish to convolute, divert, nit pic and obfuscate that fact with tangents of BS and go off the topic. I never said to you that if we went back to gold that all prices of all things would be frozen forever on that day. You brought that nonsense and idiocy into the argument because you are unable to argue the topic and stay focused. If we had a drought while on the gold standard would corn and wheat go up yes, if we had a massive bumper crop would they go down, yes. What has that got to do with the argument for gold backed money. See what I mean,
ZOMBIE GO
ZOMBIE GO
you muddy the waters. :icon_study: :icon_study:
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 02, 2012, 03:47:04 PM
There was no peak oil problem forty years ago

There wasn't?  Have you ever LOOKED at the graph of US Oil Production?  Peaked in 1970, right before the Gold Window got shut.

(https://www.e-education.psu.edu/drupal6/files/egee120/lesson12/hubbert_prediction.gif)

Therafter, in order to supply oil to the US Industrial Machine, it had to be purchased in increasing amounts overseas on credit.

Bang, you're DEAD again.

RE
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on June 05, 2012, 06:04:11 AM
Market rumor: Pimco and JP Morgan halt vacations to prepare for economic crash  (http://www.examiner.com/article/market-rumor-pimco-and-jp-morgan-halt-vacations-to-prepare-for-economic-crash)

Todd Harrison tweet: Hearing (not confirmed) @PIMCO asked employees to cancel vacations to have "all hands on deck" for a Lehman-type tail event. Confirm?

 
Todd M. Schoenberger tweet: @todd_harrison @pimco I heard the same thing, but I also heard the same for "some" at JPM. Heard it today at a hedge fund luncheon.

 
Does this mean it’s time to get some tail?   ::)
 
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 05, 2012, 11:42:33 PM
Market rumor: Pimco and JP Morgan halt vacations to prepare for economic crash  (http://www.examiner.com/article/market-rumor-pimco-and-jp-morgan-halt-vacations-to-prepare-for-economic-crash)

Todd Harrison tweet: Hearing (not confirmed) @PIMCO asked employees to cancel vacations to have "all hands on deck" for a Lehman-type tail event. Confirm?

 
Todd M. Schoenberger tweet: @todd_harrison @pimco I heard the same thing, but I also heard the same for "some" at JPM. Heard it today at a hedge fund luncheon.

No doubt the Rumours are flying around now fast and furious.  The Greek Election really looks set to be a watershed event now, at least based on various Punditry I have read.  Even by funneling funny money directly to Greek Creditors now, tis becoming impossible to paper over a Greek default, which means Greek CDS must trip.  BOOM!

IMHO, the Political Will is rapidly being lost to further go down the Print to Cover route in Eurotrashland.  Various Pundits HERE in the FSofA  are encouraging Helicopter Ben to step in and Print to Cover for Spain, but this is such a hot Political Football I do not see how HB could pull it off, except through REALLY back door methodology, and if he did that in the face of overt Poltiical opposition, he sets himself up for Prosecution as the Fall Guy.

Ticking Time Bomb set to go off here pretty soon it seems.

"Here they come to Sell 'em AGAIN!"

When this sucker goes down, it's going to make Lehman look like Pee Wee Football.

(http://newspiritualpath.com/wp-content/uploads/2011/08/dollar-fire.jpg)
Can you IMAGINE it?  ALL the Bad Debt accumulated from 150 years or so of the Age of Oil all going up in SMOKE at the SAME time! The Greatest Bonfire of Paper Wealth in ALL of Recorded History!"

Coming Soon to a Theatre Near You.

RE
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 06, 2012, 01:58:26 AM
Can still access Forbes Pages for Free!

Here's Propaganda that wil REALLY make you choke!  Let's drive up the market on PURE RUMOUR!

With Interest rates bottoming at all time Lows for the TBTF, Da Fed can't go much lower here, so this Policy Tool is pretty inneffectual these days.

RE

The Federal Reserve is mulling over whether U.S. financial markets need a pick-me-up.

The Wall Street Journal‘s Jon Hilsenrath reports that lackluster U.S. job growth and increasing worries about Europe have put “back on the table the possibility of action to spur the recovery.” Known for breaking news on the Fed, Hilsenrath cites past speechesand interviews with officials who say the U.S. outlook has deteriorated enough for the Fed to start weighing its options. It’s both unclear what tool the Fed may use to prop up the crumbling recover and when official word will come on its decision. The Fed’s next meeting is June 19, but Fed policymakers may wait longer before making any decisions, as they try to find out why job growth shrunk from 227,000 new workers in February to just 69,000 in May. Before now, when economic data seemed promising, the Fed said it needed to see a breakdown before it would again consider new stimulus.

To be sure, this is just what investors hoped to hear since seeing the grim figures last Friday. The rally in gold—where the yellow metal went from near $1,590 an ounce to $1,116 an ounce—underscores investors’ belief that the weakening numbers will prompt Fed action. In a months-long fall this year, gold prices stopped behaving as usual, losing its shine as a safe-haven play. “That action by the Fed may weaken the dollar and add further fuel to gold prices is sustaining gold’s new behavior as a safe haven,” says Jeff Kleintop, LPL Financial’s chief market strategist.

Look for equities to tick up tomorrow. Another round of Fed stimulus would lift stocks, which have been hard hit lately. Higher stocks? Greater confidence in the market. Improved confidence? Perhaps more consumer spending. Increased consumer spending? Rising profits. It’s an ages-old cycle, one that the Fed has tried to send into a crazy spin, end over end, like some sort of aerial-acrobatics performance. Investors may receive additional insight into the Fed’s thinking tomorrow afternoon, upon the monthly release of the Beige Book, a collection of anecdotes and economic insights from across the Fed’s 12 districts.

For today, U.S. stocks climbed higher. The Nasdaq composite rose 0.7% to 2,778.11. While the S&P 500 gained 0.6% to 1,285.50, and the Dow Jones industrial average increased 0.2% to to 12,127.95.

Technology stocks led the Nasdaq higher. Oracle rose 1.9% to $26.70. Qualcomm went up 2.4% to $57.18. But Facebook sank 3.8%, falling to a new low, $25.87.

Financial stocks also performed well. JPMorgan Chase added 3.2% to $31.99, as Citigroup rose 3.8% to $25.75.

Reach Abram Brown at abrown@forbes.com. Or follow him @abebrown716.
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 09, 2012, 11:20:15 AM
Well the inevitable Spanish Bailout is here. The billion dollar question is how long does this hopium shot keep the patient (global economy) high and in a hopium stupor.

http://www.businessinsider.com/spanish-bailout-announcement-2012-6 (http://www.businessinsider.com/spanish-bailout-announcement-2012-6)

I guess we knew this was coming, it does seem like every Euro bailout last for less and less time with each cycle. I need a little more time to ready for the big show so I hope this will buy a year.
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 09, 2012, 11:38:12 AM
Well the inevitable Spanish Bailout is here. The billion dollar question is how long does this hopium shot keep the patient (global economy) high and in a hopium stupor.

http://www.businessinsider.com/spanish-bailout-announcement-2012-6 (http://www.businessinsider.com/spanish-bailout-announcement-2012-6)

I guess we knew this was coming, it does seem like every Euro bailout last for less and less time with each cycle. I need a little more time to ready for the big show so I hope this will buy a year.

My guess is it won't last too long at all, since €100B isn't 1/3 of what they need just to tread water, and besides that it's just going to recapitalize Banks that are in truth so far underwater €1T wouldn't bail them out.

The money is also going straight to the banks, no pass thru the Spic Goobermint.  This gives Da Goobermint plausible deniability and the liability doesn't show up directly on the books of Spain, but then who backs the bailout?  The Krauts really, and all they are doing is buying some time here.  Now that the Italians know they can stiff arm and refuse to bail out their banks, this would be the next target to go after.

This also does absolutely ZERO to fix the overall Spic economy, still deep in the toilet.  It can't lower the bond yields all that much if at all, so it doesn't improve Spain's ability to borrow more to run Da Goobermint on the Bond market.

This is strictly a move to prop up the Banks and to keep CDS from tripping.  It doesn't address any of the systemic underlying problems of impaired real estate and a collapsing job market for Spics.

There will likely be a dead cat bounce in the Euro from this, but it won't kep the cat in the air very long.

RE
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 09, 2012, 11:49:49 AM
OK, correction according to ZH the liability WILL show up on Spain's books, which makes this whole thing even mroe laughable.  Besides that, if Spain gets below market rates loans, every other PIIG in the Poke will want that also.

What NONSENSE!  Blowback coming soon to a Bank near you.

RE

Quote from: Tyler Durden
Live Webcast Of De Guindos Bank Bailout Announcement
Submitted by Tyler Durden on 06/09/2012 13:43 -0400

CramdownGreeceGross Domestic ProductSovereign Debt


Spain's economy minister Luis de Guindos will hold a press conference detailing the terms of the bank bailout shortly. It can be watched live, and without translation, at the link below. In summary, the Spanish bank bailout is apparently a loan targeting the FROB, and at rates better than the market. In other words, the cramdown of Spanish bondholders has officially begun.



Key highlights:

•GUINDOS SAYS SPAIN WILL SEEK EUROPEAN BAILOUT FOR ITS BANKS
•GUINDOS SAYS CONSULTANTS' REPORTS TO BE PUBLISHED IN JUNE
•GUINDOS SAYS FROB WILL RECEIVE THE FUNDS     
On the conditionality:

•DE GUINDOS SAYS AID CARRIES NO MACRO-ECONOMIC, FISCAL CONDITION
•GUINDOS SAYS BANKS GETTING AID WILL FACE CONDITIONS
•IMF ONLY HAS ADVISORY, SUPPORT ROLE FOR SPAIN, DE GUINDOS SAYS

And the important stuff:

•GUINDOS SAYS THIS IS NOT A `RESCUE'   
•AID IS A LOAN IN VERY FAVORABLE TERMS, DE GUINDOS SAYS
•GUINDOS SAYS TERMS MORE FAVORABLE THAN MARKET RATES   
And the most important stuff:

•GUINDOS SAYS FROB'S DEBT COUNTS AS PUBLIC DEBT
As noted above, the cramdown of Spanish bondholders has begun. Coupled with a Spanish sovereign debt/GDP which is about to soar even according to the most idiotic estimates which leave out all the contingent liabilities, we hope that, just as in the case of Greece, readers took our advice from January to heart and have put on the long Spanish UK-law bonds, short local-law bonds.

Because all hell is about to break loose in Spain once the initial short covering kneejerk reaction is over.
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 09, 2012, 12:19:22 PM
RE quote

“This also does absolutely ZERO to fix the overall Spic economy, still deep in the toilet.  It can't lower the bond yields all that much if at all, so it doesn't improve Spain's ability to borrow more to run Da Goobermint on the Bond market.”

Agreed, although it may get Spain a few percentage points chipped off for a VERY short amount of time on ten year bonds. Bond markets don’t appear to be quite as out of touch with reality as equities so you may be right and there will be no relief. I am a newbie to economics and still trying to get up to speed on understanding the global ponzi, but commenting helps the learning process.
“This is strictly a move to prop up the Banks and to keep CDS from tripping.  It doesn't address any of the systemic underlying problems of impaired real estate and a collapsing job market for Spics.”

Yes sir, the deflationary spiral of failing industrialism bought on by peak CHEAP oil and peak oil per capita (1979), cannot be stopped only delayed.  Here is Steve from VA laying the smack down over at The Oil Drum.

“All this biomass ... all this unconventional fuel ... has to be paid for by someone.
Only the smallest fraction of the fuel burning activities provides a direct return: the funds to pay for the fuels must come from elsewhere other than use. This means borrowing as non-fuel-use activities pay for themselves and little more.
Paying for non-remunerative activities with credit has left the world with trillions of unserviceable debts. Unconventional fuels are interesting but any price at this point is sure to leave them in the ground ... surrounded by increasing numbers of desperate, credit-strapped 'consumers'.
Okay, the debts can be canceled and we can start over. The very next day new debts in amounts equal to those forgiven would need to be taken on in order to subsidize the fuel waste.
Fuel waste, fuel waste, fuel waste ... it's not about getting more, it's what we do after we have it. This is where the problem is: not energy return on energy-invested but the return on consumption. There is none, a state of affairs that is not changing soon.
The outcome is credit collapse, taking place under everyone's nose in Europe. Starting soon in China, Japan, US, Brazil ... everywhere. Our toys are fun ... but they cannot pay their own way.”

I think a key point from what Steve said there was the debts could be canceled and you would have to borrow to infinity anyway to keep industrial civilization as we know it running. Triggering the global derivative markets would probably lead to such a reset of debt would it not? Or they would just end derivatives? Many liberal techno fantasy folks I know trumpet that solution but it seems it would destroy the supposed assets of the too big to fail banks.
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 09, 2012, 01:16:57 PM
I think a key point from what Steve said there was the debts could be canceled and you would have to borrow to infinity anyway to keep industrial civilization as we know it running. Triggering the global derivative markets would probably lead to such a reset of debt would it not? Or they would just end derivatives? Many liberal techno fantasy folks I know trumpet that solution but it seems it would destroy the supposed assets of the too big to fail banks.

In theory you could cancel out the derivatives market, but this would crash the biggest of the TBTF banks.  It would be massively deflationary, leaving only "real" assets on their books, but those assets are also all impaired.  Loan books that are not paying off, Collateralized Debt Obligations (CDOs) with no worthwhile collateral backing them up, etc.

Besides bringing down the main Global Banking system, same players control global trade of all kinds, and once they are outta biz you don't have a coherent means to keep this up, not on anywhere near current scale anyhow.  Who will issue Letters of Credit, based in what currency?  Gold?  Pfffft.  Even if Saudis accept Gold for Oil, anybody running an industrial economy will bankrupt themselves of that Gold using it to keep buying Oil for a while.  Once the Saudis HAVE all the Gold, then what do you buy their Oil with?

So you are left with the fundamental problem that once this monetary system crashes, rebooting a new one based on any worthwhile assets is pretty tough.  You can say the Land is the Asset, but for land to be an asset it actually has to be productive in some way.  A McMansion is not a productive asset of course.  Farms can be productive assets, but current Industrial Ag is not, it requires too much input of fossil fuel energy to be net productive.

A Perfectly run Permaculture Farm could be considered Productive, but basing a monetary system on that is quite the challenge unless you Nationalize this.  See, if each individual person runs their own Private Property Farm, its not a State Asset at all.  You can barter your produce with others, but there is no Money involved here in this.  Only once the State taxes your produce and creates a currency of some sort from that taxation can you have money flowing around the economy.

Anyhow, even if you do drop down to this level (which is basically the Feudal system), you have massively deflated Industrialization out of Biz as unaffordable, you have very little functioning Money around of any kind (and what there is probably is very local), and you are left with Feudally Run (by local Warlords no doubt) permaculture Farms which probably do not produce enough to handle the current local population's needs.  So lots of people go to the Great Beyond here in this process of contraction.

So of course our Global Masters are doing every last thing they can think of to keep the system propped up, because when (not if) the Global Banking system collapses it doesn't mean just a Monetary Reset here.  It means the real onset of Civilization Collapse and an Die Off in population of unprecedented proportions in all of Recorded History.

The Solution which will be undertaken to this problem is not a Monetary one, it is WAR.  When you no longer can afford to BUY the resource you need, you STEAL it.  So through War the attempt is already underway to steal the Oil remaining from the MENA countries to keep propping up the economies of the core Industrial Economies of Germany, China and the FSofA.  The Ruskies mostly have their own Oil and aren't directly involved, but their problem is they can't afford their OWN oil.  They have been contracting down since the collapse of the Soviet Union, population stats way down here over the last 20 years with more to go.

Its the War issue which makes the local collapse here in the FSofA so unpredictable.  A Military State such as Rome can persist for quite a while through conquest and theft.  However, the fact we are in the end going to go Mano-a-Mano or Nuke-a-Nuke with the Chinese for the last of the remaining Oil means in all probability the Big Ass Military will not last so long as it did in the Roman Collapse, which actually took Centuries to complete.  In this case it probably doesn't last 5 years, and in fact could be over in a matter of minutes.  Generaly speakig though, I think MAD will prevail and if Nukes are used, they will be mostly tactical ones, not ICBM MIRV equipped City Killers.

To conclude here in this digest of GUTOC, the sequence of events is pretty clear even if the Timeline for them still remains a bit murky.  Overall my predictions have been very accurate in terms of sequence since I got started on this, I predicted the Nation State BKs coming down the pipe in 2008 after Lehman collapsed.  The length of time TPTB have been able to extend this out continues to astound me, along with the endless creativity in accounting and the endless gullibility/acceptance of eating shit by the general public as well.  This will not last in perpetuity though, up at the Top it is coming apart at the seams now and fracture is imminent.  War looms on the Horizon.

RE
Title: Grand Unified Theory of Collapse: GUTOC
Post by: RE on June 09, 2012, 02:01:15 PM
I made my reply to Mark a Feature Post on the Blog

 Grand Unified Theory of Collapse: GUTOC (http://www.doomsteaddiner.net/blog/2012/06/09/grand-unified-theory-of-collapse-gutoc/)

RE
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 09, 2012, 02:29:28 PM
RE quote

“Its the War issue which makes the local collapse here in the FSofA so unpredictable.  A Military State such as Rome can persist for quite a while through conquest and theft.  However, the fact we are in the end going to go Mano-a-Mano or Nuke-a-Nuke with the Chinese for the last of the remaining Oil means in all probability the Big Ass Military will not last so long as it did in the Roman Collapse, which actually took Centuries to complete.  In this case it probably doesn't last 5 years, and in fact could be over in a matter of minutes.  Generaly speakig though, I think MAD will prevail and if Nukes are used, they will be mostly tactical ones, not ICBM MIRV equipped City Killers.”

I am afraid history points to you being right. My hope is that modern militaries require so much capitol to maintain, that they will prove overly complex and break down with the global economy.

“To conclude here in this digest of GUTOC, the sequence of events is pretty clear even if the Timeline for them still remains a bit murky.  Overall my predictions have been very accurate in terms of sequence since I got started on this, I predicted the Nation State BKs coming down the pipe in 2008 after Lehman collapsed.  The length of time TPTB have been able to extend this out continues to astound me, along with the endless creativity in accounting and the endless gullibility/acceptance of eating shit by the general public as well.  This will not last in perpetuity though, up at the Top it is coming apart at the seams now and fracture is imminent.  War looms on the Horizon.”

Your analysis of the situation in various comment sections led me to the dinner; I have to say I agree with it almost 100%. I to have been amazed by the ability of the powers that be to kick cans. I hope they can give it one last good kick, although I am desperate for the desecration of our earth mother by industrialism to end.
Title: Big Slide v2.0 Begins: Short the Italian Phone Book!
Post by: RE on June 09, 2012, 04:27:46 PM
Tyler Durden over on ZH below with a fairly comprehensive overview of the Spain BullshitOut.  Not a Bailout, its a BSO.  You should go over to ZH to see all the graphs, I'm not going to spend the time to reproduce them here.

Upshot here if you want to make a Killing?  Short the Italian Phone Book.  The Ities are next up to get HAMMERRED here.

(http://www.maremmaguide.com/image-files/yellow_pages_italy.jpg)

RE
Quote from: Tyler Durden
Spain IS Greece After All: Here Are The Main Outstanding Items Following The Spanish Bailout (http://www.zerohedge.com/news/spain-greece-after-all-here-are-main-outstanding-items)
Submitted by Tyler Durden on 06/09/2012 14:52 -0400

Bank RunBondBridgewaterCDSCreditorsEuropean Central BankEurozoneFederal Deposit Insurance CorporationGermanyGreeceGross Domestic ProductIrelandItalyNational DebtNationalizationPortugalSovereign DebtTARP


After two years of denials, we finally have the right answer: Spain IS Greece. Only much bigger (it is also the US, although while the US TARP was $700 billion or 5% of then GDP, the just announced Spanish tarp is 10% of Spanish GDP, so technically Spain is 2x the US). So now that the European bailout has moved from Greece, Ireland and Portugal on to the big one, Spain, here are the key outstanding questions.

 

1. Where will the money come from?

De Guindos, Schauble and the Eurogroup, all announced that the sole source of cash would be the ESM and/or the EFSF. The problem with this is that the ESM has yet to be ratified by Germany, whose parliament said previously it is sternly against allowing the ESM to fund a direct bank bailout, something which just happened. Thus, the successful German ESM ratification vote, whenever it comes, and which previously was taken for granted, now appears to be far more questionable.

Which leaves the EFSF. The problem with the EFSF is that there is about €200 billion in dry powder. And this includes the Spanish quota of €93 billion, which we can only assume is now officially scrapped.

Which brings us to a bigger question: now that Spain is officially to be bailed out, what happens next. And by that we mean of course the big one: Italy. Recall that as we posted in Brussels... We Have A Problem, once the contagion spreads again to Italy, and that country also needs a bailout, it is game over. From the world's biggest hedge fund Bridgewater:



In other words, it is very likely that the funding for the Spanish bailout will have yet to be procured. Who will provide cash which is virtually certain to disappear forever in the Spanish real-estate market mismarking vortex?


 

2. Where will the money go?

According to the de Guindos press conference, the bailout cash will go to the FROB, or the Fund for Orderly Bank Restructuring: as the name implies a sinking fund to fund insolvent banks. This is merely a liquidity vehicle to net out evaporating capital due to realistic marks of assets, or ongoing deposit flight. However, a far bigger concern is how will the FROB be treated from a sovereign debt perspective?

As was noted previously, the bailout will come in the form of a loan, which while at better terms than market, will still result in a material increase in Spanish debt/GDP. In other words, while the bailout itself may have been without sovereign conditions, it will still impair the country in the eyes of sovereign creditors. And just as important is the mention that the loan will have "better terms than market" - this implies added security compared to general Spanish obligations. Hence priming.

Recall the official breakdown of the complete Spanish debt, presented here courtesy of Mark Grant 2 months ago:

The Data

Spain’s GDP                                                $1.295 trillion

SPAIN’S NATIONAL DEBT

Admitted Sovereign Debt                                 $732 billion
Admitted Regional Debt                                   $183 billion
Admitted Bank Guaranteed Debt                     $103 billion
Admitted Other Sovereign Gtd. Debt               $ 72 billion
Total National Debt                                         $1.090 trillion

SPAIN’S EUROPEAN DEBT

Spain’s Liabilities at the ECB                           $332 billion
Spain’s Cost for the EU budget                       $ 20 billion
Spain’s Liabilities for the Stabilization Funds   $125 billion
Spain’s Liabilities for the Macro Fin. Ass. Fund $ 99 billion
Spain’s Guarantee of the EIB debt                  $ 67 billion
Spain’s Total European Debt                           $643 billion

-- --------------------------------------------------------------------

Spain’s National and European Debt                $1.733 trillion

Spain’s OFFICAL debt to GDP Ratio                     68.5%

Spain’s ACTUAL Debt to GDP Ratio                  133.8%

* * *

Now we have another €100 billion or so in admitted sovereign debt to add to the top of the list. In other words, total Spanish admitted debt will likely increase by up to 17% from $732 billion to $857, adding the $125 billion FROB "loan."

 

3. What happens to Spanish sovereign debt?

Perhaps the most important thing to note in the above analysis is that the FROB loan is effectively a priming DIP: think Troika loans to Greece, Ireland and Portugal.

In other words, Spanish bondholders just got their first taste of subordination!

Basically, first thing Monday the trade off will be: does the temporary improvement in bank solvency offset the fact that bonds just got primed, hinting at a future that in the case of Greece has resulted in the old Greek bonds trading an equivalent price of sub 10 cents on the dollar.

How long until Spanish bondholders get the hell out of Dodge, knowing quite well that their Spanish bond holdings will suffer the same fate as GGBs?

Our advice for those who need to have exposure, as we wrote 5 months ago: sell local-law, covenant-lite Spanish bonds, and buy their UK-law, covenant-protected cousins.

Then sit back and watch the spread explode.

 

4. Precedent

Naturally with Spain now officially biting the bullet, the only question remaining is: when is Italy going to drop next.

And ironically, what just happened, is that the Eurozone, with the tacit agreement of Germany, essentially gave insolvent banks a green light to short themselves into a full bailout.

How long until Italian banks get the hint, and proceed to short each other, or themselves, either with shares of stock or , better yet, through CDS which unlike in the sovereign case, can be held without an offsetting cash basis position. In other words: is it time for the Italian bank suicide trade?

Because only when they are on the verge of nationalization, will Italian banks be rescued. And remember: he who defects (or in this case drops the fastest), first, reaps the biggest benefits of the resultant action.

We also wonder how will Ireland feel knowing that it has to suffer under backbreaking austerity in exchange for Troika generosity, while Spain gets away scott free.

Finally, there is the question of how today's action will impact the Greek elections. As noted earlier today, today's precedent will likely serve as a huge boost to the popularity of Syriza. Oh yes, the Greek elections next Sunday. Remember those, and the whole Grexit thing?

 

5. Market reaction

The long-term reaction is obvious: this latest confirmation that Europe is a sinking ship has been predicted by many for years. As such, that European risk markets will continue sinking, and capital flows continue rushing to Germany, is a given. In the short run, however, courtesy of a new all time record high number of EUR shorts (at a record -214,418 net non-commercial contracts as of this past week) it is likely we may see an aggressive short covering squeeze.



This will send all risk higher as well. Of course, the really is to be faded aggressively as soon as the weak-hand shorts are capitulate and cover.

* * *

For those curious just what this mysterious FROB is, which simply stated is, or rather was, a woefully underfunded FDIC equivalent, and is now the Spanish banking system loophole, here is a succinct presentation:

 

* * *

Finally, for those wondering if today's action will halt the catalyst for the entire move, namely the furious bank run that Spain has been experiencing in the past month, we don't know. It likely all depends on how many Spiderman towels are in circulation and held in inventory by Spain's insolvent banks.
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 09, 2012, 04:45:45 PM

I am afraid history points to you being right. My hope is that modern militaries require so much capitol to maintain, that they will prove overly complex and break down with the global economy.


Sadly, the Big Ass Military is unlikely to collapse completely before at least one more solid round of mass destruction.

On the positive side for Appalachia, any Nukes which get dropped are unlikely to hit those mountains.

If you can, try to stay off of Aircraft Carriers cruising the Mediterannean, the Red Sea, the Gulf of Oman, the South China Sea and the Indian Ocean.  Sitting Ducks when the Chinese throw up their Fireworks.

(http://api.ning.com/files/qk63hB2Cdz2SatK406820I5xq77dYFxt8FBcvuI6gLhaDfRSP2YVfy26zDoMFClDvWlzrI7ydaxAvAwC-B3kPFZa7*dbsdXr/fireworks1.jpg?width=721)

RE
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 09, 2012, 04:54:05 PM
RE quote
“Tyler Durden over on ZH below with a fairly comprehensive overview of the Spain BullshitOut.  Not a Bailout, its a BSO.  You should go over to ZH to see all the graphs, I'm not going to spend the time to reproduce them here.”

Zero Hedge is my morning news paper!

ZH quote
“De Guindos, Schauble and the Eurogroup, all announced that the sole source of cash would be the ESM and/or the EFSF. The problem with this is that the ESM has yet to be ratified by Germany, whose parliament said previously it is sternly against allowing the ESM to fund a direct bank bailout, something which just happened. Thus, the successful German ESM ratification vote, whenever it comes, and which previously was taken for granted, now appears to be far more questionable.

Which leaves the EFSF. The problem with the EFSF is that there is about €200 billion in dry powder. And this includes the Spanish quota of €93 billion, which we can only assume is now officially scrapped.

Which brings us to a bigger question: now that Spain is officially to be bailed out, what happens next. And by that we mean of course the big one: Italy. Recall that as we posted in Brussels... We Have A Problem, once the contagion spreads again to Italy, and that country also needs a bailout, it is game over. From the world's biggest hedge fund Bridgewater:

In other words, it is very likely that the funding for the Spanish bailout will have yet to be procured. Who will provide cash which is virtually certain to disappear forever in the Spanish real-estate market mismarking vortex?”

As usual there the plan is full of holes. If the Euro banks go down, triggering the CDS, how long until things get crazy? As RE pointed out no big banks, no international letters of credit equals no global trade to keep industrial just in time civilization humming. It really looks like the end game is on the horizon now.

Swiss Hedge Fund manager Felix Zulauf says end game begins in late 2012. Listen to the thunder people!

http://www.dailymarkets.com/stock/2012/06/09/felix-zulauf-the-end-game-begins-late-2012/ (http://www.dailymarkets.com/stock/2012/06/09/felix-zulauf-the-end-game-begins-late-2012/)


Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 09, 2012, 05:12:47 PM
RE quotes

“Sadly, the Big Ass Military is unlikely to collapse completely before at least one more solid round of mass destruction.”
That is true and it seems the new party line for party A AND for Party B in the USA is the Neo-Con New American Century drivel. Throwing the rascals out changes nothing…

“If you can, try to stay off of Aircraft Carriers cruising the Mediterannean, the Red Sea, the Gulf of Oman, the South China Sea and the Indian Ocean.  Sitting Ducks when the Chinese throw up their Fireworks.”

Solid advice there, it is almost time to implement my plan I formed some years ago called “Operation Prepare to Hide”!
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 09, 2012, 05:23:17 PM

Swiss Hedge Fund manager Felix Zulauf says end game begins in late 2012. Listen to the thunder people!


Felix must have some Mayan blood in him.

(http://openbooksociety.com/wp-content/uploads/2011/03/2012-picture.jpg)

12/21/2012

Coming Soon to a Theatre Near You!

RE
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 09, 2012, 05:47:23 PM
More from ZH.

This was of course completely predictable, but for it to occur THIS fast is pretty remarkable.

You can't offer one debtor a Free Lunch and not offer the rest of the Debtors the same thing here.

They better start levering up that ESM Bailout Fund in a hurry here.  The cows are lining up at the trough.


Here They Come: Ireland Demands Renegotiation Of Its Bailout Terms To Match Spain

Submitted by Tyler Durden on 06/09/2012 - 19:33 European Union Eurozone Germany Greece International Monetary Fund Ireland Moral Hazard None

Well that didn't take long. The ink on the #Spailout is not dry yet (well technically there is no ink, because none of the actual details of the Spanish banking system rescue are even remotely known, and likely won't be because when it comes to answering where the money comes from there simply is no answer) and we already have an answer to one of our questions. Recall that mere hours ago we asked: "We also wonder how will Ireland feel knowing that it has to suffer under backbreaking austerity in exchange for Troika generosity, while Spain gets away scott free." We now know. From the AFP: "Ireland wants to renegotiate its rescue plan to benefit from the same treatment as Spain, which looks set to win a bailout for its banks without any broader economic reforms in return, European sources said on Saturday." And with Ireland on the renegotiation train, next comes Greece. Only with Greece the wheels for a bailout overhaul are already in motion and are called a "vote of Syriza on June 17." And remember how everyone was threatening the Greeks with the 10th circle of hell if they dare to renegotiate the memorandum? Well, Spain just showed that a condition-free bailout is an option. Which means Syriza will get all the votes it needs and then some with promises of a consequence free bailout renegotiation. In other words Syriza's Tsipras should send a bottle of the finest champagne to de Guindos - he just won him the election.
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 09, 2012, 07:03:22 PM
What were you saying about a big war RE? This does not look good to say the least; I am sure China is going to love this.

http://www.businessinsider.com/the-us-is-reopening-massive-philippine-military-bases-not-used-since-the-cold-war-2012-6 (http://www.businessinsider.com/the-us-is-reopening-massive-philippine-military-bases-not-used-since-the-cold-war-2012-6)
Title: Re: Big Slide v2.0 Begins
Post by: RE on June 10, 2012, 01:12:49 AM
What were you saying about a big war RE? This does not look good to say the least; I am sure China is going to love this.

http://www.businessinsider.com/the-us-is-reopening-massive-philippine-military-bases-not-used-since-the-cold-war-2012-6 (http://www.businessinsider.com/the-us-is-reopening-massive-philippine-military-bases-not-used-since-the-cold-war-2012-6)

The ACTION is definitely heating up in the South China Sea as well as around MENA, so the BAM needs to preposition military assets there as well now.  These are the 2 main Theatre of Operations shaping up now based on the military movements to date.  As opposed to WWII where the main  TOO was in Europe, this one appears to be pincering from North Africa across to China, with India/Pakistan positioned in the middle of the conflagration.

Because of the Himalayas, its unlikely the Chinese can roll tanks directly into India.  Those Mountain passes are targets for destruction early on.  So the Chinese are likely to focus their efforts IMHO on the rest of SE Asia and Oz.  They have to take control of the South China Sea for that to be possible.

If I was a Chiense Military Strategist, I would be prepositioning Cruise Missiles all throughout the jungles of Cambodia and Laos right now, and building many small transport ships to maneuver about down there once the Carrier Groups get taken out.  In fact, I would be outfitting many of them for Sail power and training Navigators with Sextants.  Once they send the carrier groups to the bottom of Davey Jones locker, they can use their Numbers to swarm over the region like Locusts.

Their main problem with this besides the possibility they get Nuked is that starvation will set in before they can move the troops out this way.

MENA is likely to get Glazed over pretty quick, its a Dead Zone at the end of this.  While the Chinese make the play for the rest of Asia and Oz, the Ruskies will probably roll tanks toward Germany.  Eurotrash likely folds to the Ruskies pretty quick. End result should be Trilateral arrangement between the Ruskies controlling most of Europe, the FSofA controlling North and South America and the Chinese controlling Asia and Oceania.  This setup can exist until the Oil is completely unavailable, at which time the BAMs of all 3 parties disintegrate and you get many internal Civil Wars occurring.

RE
Title: Big Slide v2.0 Begins: Stop the BULLSHITOUTS!
Post by: RE on June 10, 2012, 02:11:34 AM
(http://gallonchallenge.tripod.com/sitebuildercontent/sitebuilderpictures/.pond/puke.jpg.w300h225.jpg)
OK, so after a full day reading Bullshit about the Spic Bullshitout, I am once again at the toilet heaving the technicolor yawn.

I'm wondering how this one can even make it through the weekend and into the Monday market opening.

First off, the max talked about here is about €100B, but really the Spic Banks need at least €300B, and that is just to look solvent against assets that are totally mispriced.  Second, the €100B being talked about here is supposed to come from the ESM, but the krauts haven't even ratified that yet and the stipulation was it wasn't supposed to go to banks but to the Sovereigns anyhow.

Meanwhile, the Mics over on the Emerald Isle are ALREADY pissed that the Spics got a better deal here on some Free Money with few Austerity Strings attached, and the Greeks are heading into a New, NEW election where you know whoever wins will want to renegotiate their crappy deal also.

The Itie Bond Market is next set to get hit on like a ton of bricks, and without the Spics or the Ities able to contribute anything to the ESM, the Krauts and the Little Dutch Boys gotta pick up still more slack.  Are these folks really going to sign their taxpayers up for a few MORE €100B  to keep their Spic neighbors floating for another day?  One suspects Auntie Angela will have a tough time selling this to her Kraut Nieces and Nephews.

The Technocrats are making all sorts of Plans and Promises willy nilly here, but nothing backing it up whatsoever.  They keep manufacturing Thin air Money out of nothing to keep the Banksters Solvent while at the SAME time sucking ever more TP out of the real economy as millions lose their jobs.  How can this "Plan" even last the weekend here?  Its not a "Plan" its a SHAM.

Not that much different than all the Shams before itof course, except for the fact that there just is no CREDIBILITY left here!  Every time the Euro Clowns say they have "problem solved", it just gets WORSE and BIGGER!  Nobody in their right mind who is not shilling for some bank and who understands the first thing about economics can POSSIBLY believe the Eurotrash can dig themselves out from under here now.

Nevertheless, we get subjected to this continuing nonsense on a daily basis and the money sloshes back and forth in sinking Titanics everywhere. It is tiresome, and for a Blogger it gets tiring to write about the SAME stupidity over and over again for years going on end now.  For Blog READERS, its equally tiring also.  I mean really, if I read one more Tyler Durden "Buy GOLD!" post,  I won't just heave the technicolor yawn, my Head will EXPLODE Scanners style.

(http://www.lovefilm.de/lovefilm-de/images/products/screenshots/8/48978-1-large.jpg?section=gallery&sub-section=screenshots/8/48978-1-small.jpg)

PLEASE, let us just Get On with this here!  I am OUT of Patience!

RE
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 10, 2012, 08:54:08 AM
RE quote
“PLEASE, let us just Get On with this here!  I am OUT of Patience!”

Well there may be a few more tricks/lies up the sleeves of the global banking cabal. Remember when Greece initially defaulted they just suspend the derivative markets to rule if it was a “credit event” or not. Maybe they realized they were very close to undermining the whole damn derivatives market, but still made CDS holders on Greek Bonds take a haircut.

Spain was just getting locked out of global credit markets when the “bailout” solution, made from previous bailout solutions like some Frankenstein Zombie was planted in the papers to get the hoopleheads to buy bonds. I guess we will find out soon how much bounce this old dead cat has left in it.

I for one could use a little more time before things start going noticeably crazy. Just until say September; my uncle sells his old factory building in mid July, and that funds the doomstead. I am afraid the buyer will get wind of the underlying economic realities and balk at buying a soon to be worthless building. I almost feel guilty but I am just an overly pessimistic doomer; I am sure the dude will use the building to make a ton of money when economic growth roars back to life. Ben Bernanke has a PHD in economics and he is an expert in the great depression so any day GDP growth will soar to new heights.
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 10, 2012, 10:44:01 AM
La Revolucion?

From Zero Hedge, http://www.zerohedge.com/news/details-emerge-about-spains-cramming-down-bailout-loan (http://www.zerohedge.com/news/details-emerge-about-spains-cramming-down-bailout-loan)
El Pais continues:

“In return for subsidized rates, Spain will cede sovereignty over its financial system, but also lose tax sovereignty, contrary to what the Government said yesterday.”

This will cause some blow back, austerity will soon turn Spain into Greece if this dilapidated bailout even survives its infancy.
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on June 10, 2012, 04:57:19 PM
This isn't sunny news:

UK banks have £40bn of undeclared debts (http://www.thebureauinvestigates.com/2012/06/06/uk-banks-have-40bn-of-undeclared-debts/)

snip:
RBS is in worse shape with over £18bn losses stacked up which could obliterate more than 37% of the bank’s assets.

What a surprise.

$125 billion here - $40 billion there...
Title: España no es Uganda
Post by: RE on June 10, 2012, 05:20:03 PM

Somos la casa de los Conquistadores! El Cid! Don Quixote! Picasso!  Por Favor, necesitamos MAS DINERO!

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/06/Spain%20Uganda.jpg)

Rajoy is right of course, Uganda doesn't have a Housing market that looks like this

(http://financialpostbusiness.files.wordpress.com/2011/11/spainhousing_gtty.jpg?w=620)

It looks more like this

(http://images.travelpod.com/users/chowmander/2.1308748315.mounds-of-garbage-in-the-slums.jpg)

Difference?  The Ugandans have their place paid off here and people actually LIVE in the buildings.

Spain is not Uganda.  YET.  Give it a couple of years here.

RE


RE
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 10, 2012, 05:25:32 PM
Good find there Joe, here is my favorite part

“PIRC said it was ‘masking the true position [of the accounts] by including fictional assets and fictional profits.”

That to me describes industrial civilization since about 1972. GDP is growing so don’t mind the trillion dollar deficits; future growth is going to be so high when we have flying rocket ship cars in the year 2000 that deficits don’t matter.
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 11, 2012, 02:10:56 PM
Well it looks like the dead cat had practically zero bounce. The markets did not buy the bailout for one single day! I think the situation is getting close to really getting nasty. I think it is back to the drawing board on a bailout that was never even approved and they had better not miss on this one.

http://www.businessinsider.com/closing-bell-11-2012-6 (http://www.businessinsider.com/closing-bell-11-2012-6) 

 Italian 10 year bonds back in the 6% danger zone

http://in.reuters.com/article/2012/06/11/markets-bonds-euro-idINL5E8HB6YK20120611 (http://in.reuters.com/article/2012/06/11/markets-bonds-euro-idINL5E8HB6YK20120611) 

The great slide is picking up steam…
Title: Re: Big Slide v2.0 Begins
Post by: Surly1 on June 11, 2012, 02:33:26 PM

Spain was just getting locked out of global credit markets when the “bailout” solution, made from previous bailout solutions like some Frankenstein Zombie was planted in the papers to get the hoopleheads to buy bonds.

Hoopleheads. I laughed out loud.

Somewhere Al Swearingen is smiling.
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 11, 2012, 03:24:05 PM
http://www.youtube.com/v/fLDKFjJGorY
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 12, 2012, 03:24:01 PM
Spain now seems to be surging to the lead in the race for the Ponzi Cup, which will be given to the country whose financial system implodes first wrecking the global banking system, with their Ten Year bond yields surging to 6.829%.

http://www.businessinsider.com/spanish-debt-is-going-kablooey-2012-6 (http://www.businessinsider.com/spanish-debt-is-going-kablooey-2012-6) 
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on June 24, 2012, 08:13:02 PM
Well the Euro crisis is about solved; I guess it is about time to shut down the DD or shift the focus to investment opportunities in the coming techno-fascist utopia! I am long Monsanto!

Just for the record I only read business insider for a glimpse into the mind of the typical hooplehead investor. BI and similar rags let you know what properly conditioned Muppets are supposed to think.

http://www.businessinsider.com/progress-in-europe-2012-6 (http://www.businessinsider.com/progress-in-europe-2012-6)
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on July 14, 2012, 04:09:55 PM
These pictures look kinda deflateonesque to me:   :o

(http://www.hussmanfunds.com/wmc/wmc120709a.jpg)

(http://i49.tinypic.com/k0j2pk.png)
Title: Re: Big Slide v2.0 Begins
Post by: g on July 15, 2012, 04:52:02 AM
JoeP Quote "These pictures look kinda deflateonesque to me:   :o

True enough JoeP, It is the chart of the Federal Reserve's response to the data you present that looks quite inflationesque to me.     :icon_study:

Federal Reserve Balance Sheet Graph
Federal Reserve Balance Sheet Graph


Gold Ox
Gold Ox

Title: Re: Big Slide v2.0 Begins
Post by: agelbert on July 17, 2012, 10:45:15 AM
Nonstop in-your-face manipulation of the equity markets on behalf of the 1% parasites is now routine.

Quote
The Incredible Lightness Of Buy-Side


(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/07/20120717_vix4.png)
Volumehttp://www.zerohedge.com/news/incredible-lightness-buy-side-volume
Title: Re: Big Slide v2.0 Begins: Intel Warns Slowing Economy Will Dent Next Quarter
Post by: g on July 17, 2012, 10:35:35 PM
The world's largest maker of computer chips, Intel, says the weak economy will mean its next profits will miss forecasts.

The company's second-quarter net income was $2.83bn (£1.8bn, 2.3bn euros), 4.3% below that made in the second quarter of last year.

Operating expenses rose faster than its revenue, which rose 3.6% to $13.5bn.

Intel has also been buying back shares, an activity that helped keep earnings per share flat.

The company said it expects to make revenue of $13.8-$14.8bn in the third quarter with a mid-point of $14.3bn, below current analyst forecasts of $14.6bn.

Intel cut its revenue growth forecast for the whole of this year to between 3-5%, down from a previous forecast of "high single-digit growth".

The company makes chips for 80% of the world's personal computers (PCs) but has a far smaller presence in tablet computers like Apple's iPad, or in the fast-growing smartphone sector.

Tablet computer sales are rising far more quickly than those of PCs.

Intel's chief executive, Paul Otellini said in a statement: "As we enter the third quarter, our growth will be slower than we anticipated due to a more challenging macroeconomic environment."    :icon_study:
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on July 18, 2012, 03:46:16 PM
Sure, this guy is a hedge fund suit, but it doesn't mean I can't agree with his analysis:

Hendry – ‘Bad things are going to happen’
By Robert Cookson

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/06dac24c-cca6-11e1-9c96-00144feabdc0.html#ixzz21163bIuH (http://www.ft.com/cms/s/0/06dac24c-cca6-11e1-9c96-00144feabdc0.html#ixzz21163bIuH)


Hugh Hendry is lying low. The Glaswegian founder of $800m hedge fund Eclectica stepped out of the limelight last year after a series of feisty television appearances made him Britain’s best-known hedge fund manager.

In a debate on Newsnight in 2010 Mr Hendry told Joseph Stiglitz, the Nobel laureate economist, “Um, hello? Can I tell you about the real world?” And, after a pugnacious appearance on the BBC’s Question Time, he briefly became the most-talked about person on Twitter.

For the genteel, wealthy investors in his funds, it was all a bit too much. So Mr Hendry stopped all media appearances and concentrated on making money. His $460m flagship fund gained 12.1 per cent over 2011 and is up about 3 per cent so far this year. It has returned a compound annual growth rate of almost 10 per cent since inception in 2002, performing best during bear markets.

“What I found was that when I speak in person, and especially when it’s television and timing is so acute, it gives the impression that I am cavalier and, if you will, full of myself,” says Mr Hendry, speaking by phone from his office in Bayswater, central London.

“The danger when people look at that from a distance is that they try to align that with the guy that they’ve just given $50m or $75m to and it’s not the same person.”

In the interests of Eclectica, Mr Hendry says he put on hold his “one-man campaign” to convince a sceptical public that financial speculators play a beneficial role in a free-market economy.

He adds that Paul Taylor, who joined Eclectica as chief executive in January 2011, “came in with provisions that he would accept the role if I cut back on the media thing and made it more professional.”

But Mr Hendry has not fully retreated from public life. In May, he penned an article for the Financial Times in which he compared the state of the hedge fund industry to the “plight of the banana”. “Today the world eats predominately just one type of banana, the Cavendish,” he explained, “but it is being wiped out by a blight known as Tropical Race 4, which encourages the plant to kill itself.”

The month before, Mr Hendry sent investors his first letter since the winter of 2010. In it, he predicts “financial anarchy” and explains how his investment approach differs from his peers.

“I suspect that I am one of the few chief investment officers who does not maintain daily correspondence with investment bankers and their specialist hedge fund sales teams. Not one buddy, not one phone call, not one instant message. I am not seeking that kind of ‘edge’. Eclectica occupies an area outside the accepted belief system.”

So what does Mr Hendry believe?

At the Milken Institute conference in May, he told the audience that France was just a year away from nationalising its banks and that politicians had still not faced up to the scale of the global debt bubble that was now imploding.

“We have reached a profound point in economic history where the truth is unpalatable to the political class – and that truth is that the scale and magnitude of the problem is larger than their ability to respond – and it terrifies them.”

Three years after Mr Hendry posted videos on YouTube of his visits to Chinese ‘ghost’ towns, he remains pessimistic about the Middle Kingdom. He is shorting the equity of Chinese state-owned enterprises, balanced by a long position in a basket of Asian non-discretionary consumer stocks.

He is also using credit default swaps to bet against the debt of financially leveraged Japanese companies such as Toshiba, which he believes are particularly exposed to a Chinese slowdown.

Mr Hendry insists that his reputation as a “contrarian” investor is wrong, and that his approach is in fact to take advantage of the prevailing momentum in markets. “Our ideas are harshly disciplined by market trends. You will never see us pursue a homegrown idea when it is to the detriment of the prevailing trend.”

For example, he reckons US government bond yields, already at record lows, will continue to fall. And, although he professes not to be a contrarian, he is more optimistic about the US than many investors and is “long the debt-saddled west and short the vastly over-vaunted and over-owned” Bric quartet of Brazil, Russia, India and China.

He believes that financial markets are single-digit years away from a crash that will present investors with opportunities of a lifetime. “Bad things are going to happen and I still think the closest analogy is the 1930s.”

http://www.ft.com/intl/cms/s/0/06dac24c-cca6-11e1-9c96-00144feabdc0.html#axzz2115S7wpp (http://www.ft.com/intl/cms/s/0/06dac24c-cca6-11e1-9c96-00144feabdc0.html#axzz2115S7wpp)

Title: Re: Big Slide v2.0 Begins
Post by: JoeP on July 18, 2012, 03:54:38 PM
Great article from Brandon Smith on Alt-net:

Bad Economic Signs 2012

(http://www.alt-market.com/images/stories/parachutefire1.jpg)

In January of this year, I wrote an analytic financial piece entitled ‘Baltic Dry Index Signals Renewed Market Collapse’:

http://www.alt-market.com/articles/540-baltic-dry-index-signals-renewed-market-collapse (http://www.alt-market.com/articles/540-baltic-dry-index-signals-renewed-market-collapse)

In that article I discussed the record breaking low hit by the BDI and its implications for the global economy; namely, that it signaled a steep decline in true demand around the world for raw materials used in the manufacture of consumer goods, and that similar declines in the BDI’s past have almost always prophesized a crisis event in financial markets.  The mainstream media attempted to write off the implosion of the BDI as a fluke, tied to the “overproductions of cargo ships”, instead of a warning sign of deteriorating demand.  Of course, the past 6 months have proven that assertion to be entirely false.

Manufacturing has tumbled in the U.S., the EU, and Asia simultaneously as orders drop back to the dismal levels last seen in 2008-2009 after the credit crisis first took hold:

http://www.reuters.com/article/2012/06/01/us-global-economy-idUSBRE85008R20120601 (http://www.reuters.com/article/2012/06/01/us-global-economy-idUSBRE85008R20120601)

http://articles.latimes.com/2012/jul/03/news/us-manufacturing-down-20120703 (http://articles.latimes.com/2012/jul/03/news/us-manufacturing-down-20120703)

http://www.themanufacturer.com/articles/uk-production-falls-to-three-year-low-as-europe-crisis-worsens/ (http://www.themanufacturer.com/articles/uk-production-falls-to-three-year-low-as-europe-crisis-worsens/)

http://www.tokyotimes.com/2012/weak-demand-in-china-and-europe-hurts-japanese-exports/ (http://www.tokyotimes.com/2012/weak-demand-in-china-and-europe-hurts-japanese-exports/)

Despite the astonishing amount of manipulation that goes into our fiscal system by major banks, there are still a few fundamental rules to economics that never change.  The bottom line?  Demand around the world is derailing, hinting at a broad spectrum disintegration of public buying power.  Where demand goes, so goes the economy.

As I have pointed out in the past when explaining the importance of the BDI, crashes in the index are usually made visible on mainstreet around 8 months to a year after the event.  That is to say, the economies of multiple nations move into a widely felt crisis event around 8 to 12 months after the BDI crashes. 

There is a strange delayed reaction between the initial exposure of weakness in the financial system and the public’s realization of the truth, sort of like Wile E. Coyote dashing off a cliff in the cartoons only to continue running in mid-air above the abyss below.  It is a testament to the fact that beyond the math, there is an undeniable power of psychology in our economy.  The investment world naively believes it can fly, even with the weight of endless debt around its ankles, and for a very short time, that pure delirious oblivious belief sustains the markets.  Eventually, though, gravity always triumphs over fantasy…

In May, I also discussed the impending disaster in the EU in light of elections which would obviously lead to a clash (or engineered clash) between proponents of austerity and proponents of endless stimulus spending.  I suggested that this clash would trigger a possible remodeling or complete breakdown of the European Union in the near future:

http://www.alt-market.com/articles/765-economic-alert-if-youre-not-worri... (http://www.alt-market.com/articles/765-economic-alert-if-youre-not-worri...)
Today, I do not think that it would be outlandish to suggest (even to the casual market observer) that the EU has indeed been fractured, though the establishment still strives to maintain the façade. 

Spain and Italy have both requested bailouts from the ECB, finally exposing a problem which alternative analysts have been warning about for years.  While the mainstream media has been bicycle-kicking the long dead horse of Greece, the much more detrimental problems of the rest of the EU have been completely ignored.  Only now are investors beginning to understand that there is no such thing as a “Greek Contagion”; the whole of Europe has been quietly suffering through a debt malaise that surpasses the Greek issue.  Still, central banks pushed the idea that Greece was the gangrenous toe of the EU, claiming it had to be cured or amputated, or the infection would invade the entire body.  The truth is, Europe has been host to a systemic disease from the very beginning.  Greece is just a side-note. 

The UK has openly admitted that it has “returned” to recession.  Mass credit downgrades have been issued by S&P and Moody’s in primary EU economies, including France and Spain.  Italy’s credit rating has been cut only two notches above junk status and its bond sales have turned to Jell-O.  Spain has declared austerity cuts which include the confiscation of employee pension funds.  Does this sound like an economic body near “recovery”, as was the rhetoric spouted by the MSM a year ago, or, does it sound like the EU has gone off the deep end?

In the meantime, China continues to court their global trading partners with bilateral trade agreements designed to remove the dollar as the world reserve currency, and recent events appear to be hastening this process.  With American and European demand faltering, Chinese manufacturers are threatened with an even more severe export breakdown than they saw back in 2008, and so, it is only a matter of time before the BRIC and ASEAN economic blocs fully solidify their trade partnerships outside of the West, and away from the dollar. 

The year of 2012 has proven to be the most startling as far as financial news has been concerned.  Vastly more startling to me than 2008.  In 2008, the illusion of bank coherence and government action was carefully molded for the consumption of the masses.  The intimate connections between government and corporate fraud were glossed over with expert care.  There was an active and methodical effort to make us believe that the problems of 2008 were peripheral, and that the system at its foundation was sound.  This time around, the corruption has become utterly blatant and disturbingly nonchalant.  There is no attempt on the part of central and corporate banking interests anymore to hide the fact that the entire edifice is a cheap magic trick.  In fact, they now parade their distortions as if they are “helping” the country, instead of destroying it. 

When criminals are no longer concerned with hiding their crimes, it is time for the rest of us to start worrying.  That is to say, the current behavior of the establishment leads me to believe that a new phase in the crisis is about to arise.

Three recent events in particular (on top of all that has already happened this year) should be noted by those who wish to gauge the acceleration of financial hazard around the world:

Multiple Central Banks Issuing Policy Changes Simultaneously

Only a week ago, the supposedly independent and sovereign central banks of China, the UK, and the EU made multilateral policy changes including cutting interest rates to zero and reinstituting stimulus measure all within the SAME HOUR of each other:

http://www.reuters.com/article/2012/07/05/us-centralbanks-action-idUSBRE8640RN20120705 (http://www.reuters.com/article/2012/07/05/us-centralbanks-action-idUSBRE8640RN20120705)

This is a disturbing and open admission by central banks that they not only dominate the economic structure of their host countries, but they do so in a coordinated fashion.  In the past, central bankers have made a point to at least pretend that they do not work in tandem with each other and are not centralized around a global methodology or hierarchy.  Today, they do not seem to mind if the public is aware of how they really operate.

Some might argue that central banks of individual nations have cooperated in the past, and that this is nothing new.  Partly true.  Central banks have enacted policy initiatives in tandem with each other before, but usually only after absurd levels fanfare and summits galore.  The pageantry of G8’s and G20’s and Davos and any number of other global meetings were a fulcrum point which central banks used to buy political capital with sovereign populations.   They had planned to institute these multilateral economic actions anyway, but the pageantry and theater came first.  Today, private central banks are taking joint action without ANY public meetings, even fake meetings.       

I feel that this is the start of an expedited trend towards full centralization of sovereign economies, and that soon, central banks will act as if single broad spectrum global monetary policy measures and global economic governance are legal and “commonplace”. 

Trade Volume Collapsing

The S&P has now generated the worst market volume in over a decade.  Small market investors are fleeing in droves away from stocks, leaving only the big players to dominate the field:

http://www.bloomberg.com/news/2012-07-02/volatility-surging-in-s-p-500-with-volume-lowest-in-decade-1-.html (http://www.bloomberg.com/news/2012-07-02/volatility-surging-in-s-p-500-with-volume-lowest-in-decade-1-.html)

This extreme lack of volume will facilitate a return to volatility, and we are about to see the same kind of massive stock spikes and drops that we tasted three years ago.  I would like to point out that the Fed, almost religiously, waits until stock markets go into cardiac arrest before announcing new stimulus measures and quantitative easing.  They delay until the investment world begs for printing, and then, they give it to them, with a smile. 

The Libor (London Interbank Offered Rate) Scandal

Like the bankruptcy of Lehman Bros. that heralded the credit crisis, the Libor Scandal has the potential to rock the pillars of the banking world like nothing I have ever seen before.  The average person needs to understand three things about Libor:

1) The manipulation of loans and credit swaps through the Libor interest rate mechanism has allowed big banks to hide the true extend of their incredible debts since the 2008 derivatives implosion.  Some mainstream economists are actually calling this a “good thing”, because, according to them, the lie of Libor fooled investors into supporting the markets where they may not have otherwise if they had known the truth.  They say the lie “averted Armageddon”.  Frankly, this is idiotic.  Libor has saved nothing, and the lack of transparency and honesty from corporate banks has only postponed an inevitable calamity which will be even worse now because it was allowed to continue on for years longer than it should have.       

2) Barclays and other institutions have claimed that they “had to use Libor fraud”.  Why?  Because every other major bank used it!  Their argument is that they had to lie in order to remain competitive.  Even if you buy this rationalization, you have to acknowledge the deeper problem here:  Barclays is essentially pointing out that EVERY major bank uses Libor to hide the fact that they are in dire straights.  In 2012, the system has openly confessed its own insolvency.  You do not need a fortune telling gypsy to predict a major collapse for you; the banks have just told us exactly what is about to happen.

3) Finally, regulators and central banks on both sides of the ocean, from the U.S. to the UK, from the Federal Reserve to the Bank Of England, relent that they KNEW about the Libor fraud being conducted by numerous banks as early as 2008, but kept their mouths shut.  This shows not only that central banks have been complicit in financial criminal activities, but governments have played along as well.  This fits right in with what I have stated for years: 

The economic collapse could not possibly be a “random” event.  Its culmination requires the collusion of so many corporate and government entities that it would be foolish to call it anything other than conspiracy. 

So, what comes next?  According to the path which I predicted back in January, the economy is near a climax event.  Perhaps an announcement of QE3 leading to ugly dollar devaluation, perhaps another bankruptcy by a “too big to fail” conglomerate leading to a firestorm in stocks, or perhaps even the exit of certain countries from the EU.  Maybe all of this and more.  The point is, keep your eyes fixed on the financial sector as we move into fall and winter.  There is a bleak harvest on the horizon…

http://www.alt-market.com/articles/914-bad-economic-signs-2012 (http://www.alt-market.com/articles/914-bad-economic-signs-2012)
Title: Re: Big Slide v2.0 Begins
Post by: RE on July 18, 2012, 04:03:00 PM
Great article from Brandon Smith on Alt-net:

Brandon is one of our Cross Posting authors.  I'll drop this one on the Blog, I haven't featured one  of his recently.

RE
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on July 20, 2012, 05:30:28 PM
I'm travelling to Grosse Ile, Michigan tomorrow to visit relatives.  For giggles, I was thinking about driving thru the city of Detroit while I was there.  Well, the following article changed my mind...this is not a laughing matter.

Sign of the times (http://metrotimes.com/culture/sign-of-the-times-1.1344652)

snip:

"In his decade of inner-city life, he's amassed countless stories of social mayhem, snapshots of social collapse. Of hookers having sex on the children's playground he built next to his yard. Of looking out his window to see neighbors walking off with tools and extension cords in bright daylight. Of the neighborhood kid who's so well-connected he can get back just about any of your stolen things — for a price. Of tending to children shot by stray bullets while waiting for police and ambulances that sometimes don't arrive. Of the elderly woman across the street who won $6,000 in the lottery but was shot and killed the next night by a thief who wanted that ticket. Of that drive-by shooting that sent little kids running for their lives on a playground.

"There ain't no way you can fathom it," he says of his corner of the city. "There's no morals, ethics, standards. There's no connection between, basically, life that you see everywhere else."

Title: Re: Big Slide v2.0 Begins Major Crack in All Markets This Morning
Post by: g on July 23, 2012, 06:17:28 AM
Major smack down in all markets foreign and domestic

Dow looks down over 200

Oil down 3 bucks

Asia and Europe in free fall

Spain bans all short selling

10 yr treasury yield at new low

All grains and commodities down big across the board              :icon_study:
Title: Re: Big Slide v2.0 Begins - Why We're Screwed
Post by: JoeP on July 23, 2012, 06:50:53 AM
Looks like Randall Wray is pretty wound up.  Good "rant" from the University of Missouri - Kansas City professor (Minsky bred):

http://www.nakedcapitalism.com/2012/07/randy-wray-why-were-screwed.html (http://www.nakedcapitalism.com/2012/07/randy-wray-why-were-screwed.html)

Sorry for only posting the URL - I'm limited to a mobile device for a few days.
Title: Re: Big Slide v2.0 Begins
Post by: Jb on July 23, 2012, 07:20:20 AM
I enjoyed reading Wray's article this morning. The comments over at Naked Capitalism picked up a mistake or two but no strong rebuttals yet.
Title: Re: Big Slide v2.0 Begins
Post by: Surly1 on July 23, 2012, 07:56:12 AM
I'm travelling to Grosse Ile, Michigan tomorrow to visit relatives.  For giggles, I was thinking about driving thru the city of Detroit while I was there.  Well, the following article changed my mind...this is not a laughing matter.

Sign of the times (http://metrotimes.com/culture/sign-of-the-times-1.1344652)

snip:

"In his decade of inner-city life, he's amassed countless stories of social mayhem, snapshots of social collapse. Of hookers having sex on the children's playground he built next to his yard. Of looking out his window to see neighbors walking off with tools and extension cords in bright daylight. Of the neighborhood kid who's so well-connected he can get back just about any of your stolen things — for a price. Of tending to children shot by stray bullets while waiting for police and ambulances that sometimes don't arrive. Of the elderly woman across the street who won $6,000 in the lottery but was shot and killed the next night by a thief who wanted that ticket. Of that drive-by shooting that sent little kids running for their lives on a playground.

"There ain't no way you can fathom it," he says of his corner of the city. "There's no morals, ethics, standards. There's no connection between, basically, life that you see everywhere else."

JoeP, you are correct this is not a laughing matter.

Upon reading this, for some reason I thought of "Lord of the Flies."

We tend to take for granted the trappings of civilization, rule of law, etc., and tend to forget that all of us are about ten minutes away from reverting to our previously closely-held roles as savages.

For years our cities were generators of wealth, manufacturing centers, where the wealth creation process threw off a little something for the working class. Not the manufacturing is safely offshore, away from the unreasonable demands of the American worker for a living wage, and the predator capitalists have sucked away any wealth not otherwise attached. As far as the owners care, the working class can finish one another off fighting over the last rat.

I recently visited my old hometown, Pittsburgh. Some neighborhoods not as bad as Eight Mile, but the infrastructure deterioration is widespread, and appalling.
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on July 26, 2012, 07:53:31 PM
The CME lowers equity index margins over 20%, from ZH:

http://www.zerohedge.com/news/cherry-top-cme-lowers-equity-index-margins-over-20 (http://www.zerohedge.com/news/cherry-top-cme-lowers-equity-index-margins-over-20)

desperation.
Title: Re: Big Slide v2.0 Begins
Post by: g on July 27, 2012, 02:04:13 AM
The CME lowers equity index margins over 20%, from ZH:

http://www.zerohedge.com/news/cherry-top-cme-lowers-equity-index-margins-over-20 (http://www.zerohedge.com/news/cherry-top-cme-lowers-equity-index-margins-over-20)

desperation.

Desperation part of it yes.  They are part and parcel of the big rig that is being planned however and are following the plan commanded by their masters. Unless you wish to believe it mere coincidence and had nothing to do with the bonfire started today.

" It Will Be Enough! Believe Me" I believe you Mario. Buy Gold,Buy Silver.
                   
Bankster Money
Bankster Money
Title: Re: Big Slide v2.0 Begins : Shell 'Pulling Cash out of Europe on Eurozone Fears'
Post by: g on August 07, 2012, 08:40:30 PM
This looks like major trouble if it spreads!


Shell 'pulling cash out of Europe on eurozone fears'
Royal Dutch Shell is pulling some of its funds out of European banks over fears stirred by the eurozone's mounting debt crisis, according to reports.
Old Shell petrol pumps in Withypool, Devon, UK
It is believed Shell would rather deposit $15bn of cash in non-European assets, such as US Treasuries and US bank accounts Photo: Alamy

5:49AM BST 06 Aug 2012

Comments19 Comments

The company's chief financial officer, Simon Henry, told The Times that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region's peripheral nations.

"There's been a shift in our willingness to take credit risk in Europe. The crisis has impacted our willingness to afford credit," Mr Henry is quoted as saying.

Asked whether Shell regarded risk as different in Germany compared with some of the eurozone’s southern and heavily indebted members, he said: “We differentiate between different credit risk.”

Mr Henry is cited as saying that the Anglo-Dutch oil major would rather deposit $15bn of cash in non-European assets, such as US Treasuries and US bank accounts.

The firm is forced to keep some money in Europe to fund its operations, but is keeping the bulk of its reserve liquidity out of the eurozone to avoid growing macroeconomic risk, the report said.     :icon_study:

http://www.peakprosperity.com/dailydigest/79420/daily-digest-87-shell-pulling-cash-out-eurozone-ending-blackouts-one-solar-lamp-ti (http://www.peakprosperity.com/dailydigest/79420/daily-digest-87-shell-pulling-cash-out-eurozone-ending-blackouts-one-solar-lamp-ti)
Title: Re: Big Slide v2.0 Begins
Post by: g on October 19, 2012, 04:04:11 PM
Serious market crack today. Down over 200 Dow points with majority held tech stocks in a massive free fall, Apple, Google Etc.

Apple down 22.80

Google Down 13.25

NASDAQ down 67.00 over 2% one of the worst days on record.

OIL  down over 2 bucks a barell

Even Gold down 23.00 margin calls going out on tech stocks already

Could be the start of something big!   :-\     

 Two Charts of the largest caps out there, frightening action in a very short period of time     :emthdown:

Google
Google


Apple
Apple
Title: Re: Big Slide v2.0 Begins
Post by: monsta666 on October 19, 2012, 04:35:53 PM
Big drops and it is hard to see why the falls have been so dramatic. I do find more and more these days that the rises and falls in the stock market seem to follow no discernible pattern. It would seem there is a degree of market manipulation taking place. Despite the recent drop, gold is still performing strongly and this comes despite the repeated calls from MSM sources that the gold bubble has burst. The commodity is still trading at above $1700.  That is a high price in anyone's book. The spread between brent and crude oil is still large at $20 but prices for both are holding relatively steady. If things hold out then the 2012 oil prices will have roughly been the same as 2011. Volatility in oil prices has been higher as of late and I have seen numerous $2+ drops/rises this year. Such volatility seems to suggest that supplies are more tight and there is less spare capacity. Not a great sign going forward if true...

I do not think the next slide will come in 2012. First Obama will pull out all the stops to not let it happen during the election year plus China also perform their changeover this year. Nothing major will be allowed to happen until the political changeovers are sorted. After that we will probably see the shale gas market fail, maybe a war in Iran or a whole host of other things. The EU as desperate as it is, seems to have enough steam to muddle for two or three years before imploding. Once Spain gets in the same place as Greece is today then things will get real interesting there. What is easy to forget in the midst of these poor markets is that there is an open ended QE program operating in the States.
Title: Re: Big Slide v2.0 Begins
Post by: g on October 19, 2012, 05:03:48 PM
@ Reply Monsta 666, Agree with you 100% monsta accept for the fact I have found out through bitter experience that the market never lends itself to sane reasoned analysis these days. The rigging and violence of the moves have turned it into a gigantic Craps game with the dices loaded and the house skimming double the normal amount.

Then of course there are the nice boys around the table who are doing God's work in cahoots with the shooter and pit boss. A sad situation indeed.      :(
Title: Re: Big Slide v2.0 Begins
Post by: RE on October 19, 2012, 05:16:32 PM
Big drops and it is hard to see why the falls have been so dramatic.

Cracking HOPIUM.

The GOOGLE quaterly earning came in SOOOO LOOOOW that Hedge Funds started dumping, which then leads to margin calls everywhere else as longs get burned and can't find buyers at their target prices.

It will be interesting to see what the PPT will do next week, since Helicopter Ben already has shot his wad here.  He ALREADY promised to print infinite money, and you can't print more than infinity.  LOL.

If a real run for the Fire Exits goes down here, Obama-sama is finished for sure, so this may be timed to get him out of office and Rmoney in as POTUS.

RE
Title: Re: Big Slide v2.0 Begins
Post by: monsta666 on October 19, 2012, 05:32:25 PM
Then of course there are the nice boys around the table who are doing God's work in cahoots with the shooter and pit boss. A sad situation indeed.      :(

Too true, you just hope at some point they come clean about the truth and expose the lies these guys are promoting. But I am afraid that is wishful thinking...

The GOOGLE quaterly earning came in SOOOO LOOOOW that Hedge Funds started dumping, which then leads to margin calls everywhere else as longs get burned and can't find buyers at their target prices.

As big as Google is it is just one company. And it is not like Google filed for bankruptcy either; it just produced a poor quarterly statement. It seems a little extreme that the DOW Jones could drop 1.5% over such an event. Perhaps there is some kind of manipulation to dump then pump various stocks because if the market is reacting this dramatically to this one news then, in my opinion, it is an overreaction. Then again markets often behave irrationally so who knows... 

It will be interesting to see what the PPT will do next week, since Helicopter Ben already has shot his wad here.  He ALREADY promised to print infinite money, and you can't print more than infinity.  LOL.

He can print to infinity even faster! ;)
Title: Re: Big Slide v2.0 Begins
Post by: RE on October 19, 2012, 06:15:15 PM

As big as Google is it is just one company. And it is not like Google filed for bankruptcy either; it just produced a poor quarterly statement. It seems a little extreme that the DOW Jones could drop 1.5% over such an event.

(http://gifsoup.com/view4/3874024/wile-e-coyote-1-o.gif)
The Nature of Cascade Failure.  It's like an Avalanche that starts with one snowball rolling down the hill.  When you have this much instability, all it takes is one Domino to fall, then POW.  Google is just the Corporate name for Wile E. Coyote.

(http://www.colorado.edu/geography/class_homepages/geog_3251_sum08/02_loose_snow_avalanche.jpg)
Title: Ben Lichtenstein Day Coming?
Post by: RE on October 23, 2012, 03:52:11 PM

(http://gifsoup.com/view4/3874024/wile-e-coyote-1-o.gif)
Looks like we are at the Cliff Edge now.  Can-U-Spell FLASHCRASH?

http://www.youtube.com/v/WrxlVjZJawQ?feature=player_embedded

RE

Dow Skids Over 200, Led by DD; Apple Falls 3% (http://www.cnbc.com/id/49517669)
Published: Tuesday, 23 Oct 2012 | 4:59 PM ET
By: JeeYeon Park CNBC.com Writer

Stocks closed sharply lower across the board Tuesday, with the Dow logging its worst one-day drop since June, pressured by several disappointing quarterly results and amid renewed fears over Spain's weak economy.

After-Hours Buzz: FB, NFLX, SIRI & More
“The revenue line is getting hurt the worst—it shows how nimble and savvy companies are, but that’s not going to continue forever,” Art Cashin, director of floor operations at UBS Financial Services,  said of the latest quarterly results. “We’ve already broken through an important level at 1,418 to 1,421, the next level is 1,408 to 1,411 and then we challenge 1,400 itself.”


Major U.S. Indexes.DJIA13102.53-243.36-1.82%.NCOMP2990.46-26.50-0.88%0.SPX1413.11-20.71-1.44%0

The Dow Jones Industrial Average tumbled 243.36 points, or 1.82 percent, to end at 13,102.53. Most Dow components closed in negative territory, led by DuPont.

The S&P 500 dropped 20.71 points, or 1.44 percent, to finish at 1,413.11. The Nasdaq fell 26.50 points, or 0.88 percent, to close at 2,990.46.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, soared more than 10 percent to end near 19.

All key S&P sectors closed in the red, dragged by materials and energy.


RELATED LINKS
Current DateTime: 03:42:03 23 Oct 2012
LinksList Documentid: 49517479
Cramer: Bottom Line on Earnings‘Good Signs' in US: O’Neill'Full Steam Ahead’ on EU Stocks: HSBCBetting on Emerging Markets
Meanwhile, Apple [AAPL  613.3554    -20.6746  (-3.26%)   ] introduced a thinner and lighter version of its 13-inch Macbook Pro and a smaller version of its iPad called iPad Mini. But shares dropped near session lows after the company announced the 16 GB version of the mini will be priced at $329, higher than expectations.

“Whether it’s guidance or revenue growth, there’s been much disappointment over the earnings season,” said Art Hogan, managing director at Lazard Capital Markets. “The difference today is that we’re seeing more pressure from Europe, which has been dormant…add to that the ongoing ‘fiscal cliff’ worry, and we have a combination of things pushing us lower.”

Among earnings, DuPont [DD  45.25    -4.51  (-9.06%)   ] slumped sharply after the chemical company reported a profit that fell short of expectations and announced 1,500 layoffs in an aggressive cost-cutting move.



Fellow Dow component United Technologies [UTX  77.07    -0.76  (-0.98%)   ] reported a decline in third-quarter earnings and cut its sales forecast for the year, citing weak demand from airlines and an uncertain economy.

Also, 3M [MMM  88.73    -3.80  (-4.11%)   ] reported earnings that matched estimates, but revenue was lighter than expected, sending shares of the conglomerate lower.

So far, nearly 30 percent of S&P 500 companies have posted results, with only 37 percent of companies topping revenue estimates. The average company is missing expectations by 2 percent. Meanwhile, 57 percent of the earnings reports have come in above forecasts.

If all remaining companies report earnings in line with estimates, earnings will be down 2.5 percent from last year's third quarter.

Bucking the negative trend, United Parcel Services [UPS  73.73    2.17  ( 3.03%)   ] gained after the package-delivery company posted earnings that matched estimates.


RELATED LINKS
Current DateTime: 01:48:52 23 Oct 2012
LinksList Documentid: 46882148
Worries Over Earnings and Spain Hit European SharesUS Crude Settles Below $87 on Growth FearsGold Falls 1% on Global Economic WorriesPrices Gain on Worries Over Spain, Global GrowthEuro Falls on Fears Over Spain's Debt, Global Growth
Yahoo [YHOO  16.67    0.90  ( 5.71%)   ] rallied to hit a new 52-week high after the Internet company posted results that easily beat expectations on Monday with new Chief Executive Marissa Mayer at the helm.

RadioShack [RSH  2.57    0.18  ( 7.53%)   ] badly missed estimates due to weak margins in its smartphone business. Still, shares finished higher, recovering from a weak open.

Facebook [FB  19.50    0.179  ( 0.93%)   ] is scheduled to post results after the close. Analysts expect the social-networking giant to post earnings of 11 cents a share on revenue of $1.23 billion.

European shares closed sharply lower after a report that showed Spain's economy contracted at a 1.7 percent rate in the third quarter, faster than the second quarter's 1.3 percent contraction. In addition, Standard & Poor's downgraded five regions in Spain on Monday afternoon.

Monster Beverage [MNST  41.08    -4.65  (-10.17%)   ] plunged for a second day after the FDA said it is investigating reports of several people dying after consuming its energy drinks. In addition, Goldman Sachs removed the company from its "conviction buy" list.

The Federal Open Market Committee begins its two-day meeting, with the announcement due Wednesday afternoon. The Fed is expected to hold back on further stimulus measures in order to assess the impact of its third round of quantitative easing, launched last month. (Read More: Bernanke Probably Won't Stand for Third Term at Fed)

Treasury prices gained after the government auctioned $35 billion in 2-year notes at high yield of 0.295 percent and bid-to-cover of 4.02. The government is scheduled to auction 5-year and 7-year notes on Wednesday and Thursday, respectively.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

WEDNESDAY: Weekly mortgage apps, new home sales, FHFA home price index, oil inventories, 5-yr note auction, FOMC mtg announcement; Earnings from AT&T, Boeing, Bristol-Myers, Delta, Eli Lilly, Akamai, Symantec, Zynga
THURSDAY: Durable goods orders, jobless claims, Chicago Fed nat'l activity index, pending home sales, Kansas City Fed survey; Earnings from Altria, AstraZeneca, ConocoPhillips, P&G, Aetna, AutoNation, Credit Suisse, Dow Chemical, Pulte, Sprint, United Continental, Apple, Amazon.com, Coinstar
FRIDAY: GDP, consumer sentiment, Windows 8 released; Earnings from Comcast, Merck
Title: Re: Big Slide v2.0 Begins
Post by: Mark N on October 23, 2012, 06:34:19 PM
Well it looks like oil is going to get a little bit cheaper....
Title: Re: Big Slide v2.0 Begins
Post by: g on October 23, 2012, 07:08:30 PM
Well it looks like oil is going to get a little bit cheaper....

Yes, it usually gets pummeled with everything else when they get slammed real hard.

Would not bring any tears to my eyes with oil heat in my house and winter fast approaching.

How they got home heating oil to the same price as gasoline shows you how rigged the whole game is.

Would be real interesting to see what oil sold for if things got so bad they took every ones credit cards away.
Title: Re: Big Slide v2.0 Begins
Post by: g on October 24, 2012, 06:38:41 AM
Quote Richard Russell "(Monday), I said that I wouldn't put it past the Fed to buy Dow stocks near the close.  At one point yesterday, the Dow was down over 100 points.  It struck me as very strange to see the Dow drift back to minus 10 near the close, and then at the last minute the Dow turned plus by 2 points.  And this with NYSE breadth down.


Therefore, I cannot imagine a better time for the Fed to come in and buy Dow stocks or maybe buy the DIAs.  And no, I'm not getting paranoid.  It's getting so that I just don't believe anything that comes out of Washington anymore.


To put it mildly, with multi-billions of dollars involved in this crazy election, why wouldn't the Fed be manipulating the market?  The Fed has bought just about everything else, so why not the Dow?


The chart below brings the Dow up to date.  The Dow is now trading completely under its 50-day moving average. RSI and MACD are at about oversold, so it would not be surprising to see the Dow rally a bit from here.  :icon_study:   
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/24_Richard_Russell_-_The_Bear_Is_Angry_%26_Bernanke_Wants_Out.html (http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/24_Richard_Russell_-_The_Bear_Is_Angry_%26_Bernanke_Wants_Out.html)

                                             
KWN RR 62
KWN RR 62

Title: Re: Big Slide v2.0 Begins
Post by: g on November 07, 2012, 08:36:18 AM
11:30 AM EST   Great confidence move under way at Wall Street Dow Jones down 356.00 S&P down 38.22 !    :'(
Title: Re: Big Slide v2.0 Begins
Post by: Surly1 on November 07, 2012, 11:50:58 AM
Just BAU, GO. Another day at the office. The fiscal cliff is more of an issue than the fact that the Kenyan Anti-colonial Socialist Muslim got re-upped.

Stock market, election results: Stocks plunge after election; Europe woes deepen
(http://media2.abc15.com//photo/2012/11/07/nyse_20121107102952_320_240.JPG)

Posted: 10:31 AM
Last Updated: 2 hours and 16 minutes ago

    * By: Associated Press By: Associated Press

Investors are dumping stocks as they turn their focus to a world of problems now that the election is over -- tax increases and spending cuts that could stall the nation's recovery and a deepening recession in Europe.

The Dow Jones industrial average plunged 328 points to 12,916 at midday Wednesday. The Dow was on track for its worst decline in a year.

The Standard & Poor's 500 index lost 36 points to 1,391. The Nasdaq composite fell 78 points to 2,933.

Energy companies and banks took big losses. Both industries presumably would have faced lighter regulation if Mitt Romney had won.

Stocks seen as benefiting from President Barack Obama's decisive win rose. They included hospitals, free of the threat that Romney would have rolled back Obama's health care law.

Read more: http://www.abc15.com/dpp/news/national/sotck-market-election-results-stocks-plunge-after-election-europe-woes-deepen#ixzz2BZHjPEsi (http://www.abc15.com/dpp/news/national/sotck-market-election-results-stocks-plunge-after-election-europe-woes-deepen#ixzz2BZHjPEsi)
Title: Re: Big Slide v2.0 Begins
Post by: Snowleopard on November 07, 2012, 12:26:28 PM
Yes BAU.  And what usually happens is the Fed and its minions/masters (PPT & TBTF banksters) wait for selling to exhaust, and if it does,  they buy the Dow before the close.  If not, maybe tomorrow, we'll see.
Title: Re: Big Slide v2.0 Begins: Why Our Markets Are Going to Blow Up AGAIN
Post by: g on November 09, 2012, 01:28:06 AM
From Karl Denninger  A very revealing article IMHO.   :o  :'(


Why Our Markets Are Going to Blow Up AGAIN
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-11-05 16:24
by Karl Denninger
in Investing
Ignore this thread
Why Our Markets Are Going to Blow Up AGAIN
 

Read carefully for content folks:

    Rochdale Securities LLC, the brokerage that employs bank analyst Dick Bove, is in advanced talks to save the firm after unauthorized trades in Apple Inc. (AAPL) went sour, said two people with knowledge of the negotiations.

    ...

    Top Rochdale executives told potential investors that a trader bought $750 million to $1 billion in Apple shares last month without permission, the people said. The stock then dropped in value by a few million dollars and depleted the firm’s cushion against losses, the people said. Closely held Rochdale had $3.44 million of capital at the end of last year, according to a regulatory filing.

market-ticker.org/akcs-www?post=213555    :icon_study:

http://seekingalpha.com/article/981031-why-our-markets-are-going-to-blow-up-again?source=feed (http://seekingalpha.com/article/981031-why-our-markets-are-going-to-blow-up-again?source=feed)
Two Links to same article, one may not be operative.
Title: Re: Big Slide v2.0 Begins: Why Our Markets Are Going to Blow Up AGAIN
Post by: RE on November 09, 2012, 01:47:28 AM

    Rochdale Securities LLC, the brokerage that employs bank analyst Dick Bove, is in advanced talks to save the firm after unauthorized trades in Apple Inc. (AAPL) went sour, said two people with knowledge of the negotiations.

Can-U-Spell M-F-G?  LOL.

HTF can ANYBODY do "unauthorized" Borrowing of $750M-$1B to bet on Apples?  SOMEBODY has to authorize this!

Based on what is going on in Eurotrashland right now along with the looming "Fiscal Cliff" here, smart money is running for the Fire Exit, and DICK Bove & Co clearly were not smart enough to clear the exit in time.

I'm looking for a Ben Lichtenstein call any day now.

HERE THEY COME TO SELL 'EM AGAIN!

http://www.youtube.com/v/WrxlVjZJawQ?feature=player_embedded

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on November 09, 2012, 01:55:12 AM
Quote
HTF can ANYBODY do "unauthorized" Borrowing of $750M-$1B to bet on Apples?  SOMEBODY has to authorize this!

Of course RE, the swill are obviously gaming the system and copy catting Corzine, who has become a hero to the pile of dog shit that rig all markets with impunity.  Mary Shapiro, AKA Ms. Barney Fife , is watching over them.    :'(
Title: Re: Big Slide v2.0 Begins
Post by: RE on November 09, 2012, 02:08:53 AM
Of course RE, the swill are obviously gaming the system and copy catting Corzine, who has become a hero to the pile of dog shit that rig all markets with impunity.  Mary Shapiro, AKA Ms. Barney Fife , is watching over them.    :'(

(http://gifsoup.com/view4/3874024/wile-e-coyote-1-o.gif)
So it has always been of course.  The Illuminati with access to Unlimited Credit have ALWAYS been able to Game the Market and Pump & Dump as they see fit.  The "Market" has been a Rigged Game since its inception in the 16th Century. "Free Market Capitalism" is and always has been a complete FICTION.  It just doesn't get OBVIOUS until the Ponzi Collapses.  Then Gravity Takes over.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on November 09, 2012, 04:03:14 AM
Of course RE, the swill are obviously gaming the system and copy catting Corzine, who has become a hero to the pile of dog shit that rig all markets with impunity.  Mary Shapiro, AKA Ms. Barney Fife , is watching over them.    :'(

(http://gifsoup.com/view4/3874024/wile-e-coyote-1-o.gif)
So it has always been of course.  The Illuminati with access to Unlimited Credit have ALWAYS been able to Game the Market and Pump & Dump as they see fit.  The "Market" has been a Rigged Game since its inception in the 16th Century. "Free Market Capitalism" is and always has been a complete FICTION.  It just doesn't get OBVIOUS until the Ponzi Collapses.  Then Gravity Takes over.

RE

Most likely RE, When the Illumminati were plundering it looked and appeared honest to most due their mastery of the art of dicking.
That is hardly the case today. You don't dare place that ass hole kissing, Democratic poster boy. fund raiser for the puppet in chief Corzine in the class of Illuminati. He is but a grocery boy and could only have a wet dream about being one of them.
Title: Re: Big Slide v2.0 Begins
Post by: RE on November 09, 2012, 04:26:00 AM
Most likely RE, When the Illumminati were plundering it looked and appeared honest to most due their mastery of the art of dicking.
That is hardly the case today. You don't dare place that ass hole kissing, Democratic poster boy. fund raiser for the puppet in chief Corzine in the class of Illuminati. He is but a grocery boy and could only have a wet dream about being one of them.

I don't put Don Corzine or DICK Bove  in a class with the Illuminati, they are basically Water Boys.  The POINT I am trying to make is that "Free Market Capitalism" is and always has been complete MYTHOLOGY.  It never existed, nor can it exist in reality.  It is a FICTION that is promoted by the Illuminati to convince J6P that the Monetary system THEY run is "Fair and Honest".  All BULLSHIT, and if you buy into "Free Market Capitalism", you are a SUCKER AND A FOOL.  No such thing exists and no such thing EVER existed.  If you bought the idea, consider yourself a complete idiot.

RE

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on November 09, 2012, 04:41:07 AM
@ Reply RE,  True, but it had a better look and less of a smell when just the big boys were screwing everybody.

Today it has become just another every day business for anyone connected to the dung pile. You know what I mean, the rot on the tree is in plain view now and it stinks to high heaven.   
Title: Re: Big Slide v2.0 Begins
Post by: RE on November 09, 2012, 04:51:12 AM
@ Reply RE,  True, but it had a better look and less of a smell when just the big boys were screwing everybody.

Today it has become just another every day business for anyone connected to the dung pile. You know what I mean, the rot on the tree is in plain view now and it stinks to high heaven.

Actually, it is better now in this respect, because people are actually becoming AWARE how they are being SCREWED.  For a good 300 years here, people thought they were living under a fair and equitable system, which was complete and utter BULLSHIT.  In the fallout here, anyone who buys Capitalism as an equitable system needs to get a First Class Ticket to the Great Beyond. It is just BULLSHIT.  I will PERSONALLY issue the ticket for Karl Denninger.  :icon_mrgreen:

RE
Title: Re: Big Slide v2.0 Begins: Why Do I Think...................................
Post by: g on November 09, 2012, 05:17:31 AM
  Quote RE  "Actually, it is better now in this respect, because people are actually becoming AWARE how they are being SCREWED.  For a good 300 years here, people thought they were living under a fair and equitable system, which was complete and utter BULLSHIT.  In the fallout here, anyone who buys Capitalism as an equitable system needs to get a First Class Ticket to the Great Beyond. It is just BULLSHIT.  I will PERSONALLY issue the ticket for Karl Denninger."  :icon_mrgreen:

RE,  Why do I think Ozzie & Harriet wasn't your favorite TV show??   :D ;D : :laugh:  :exp-grin: :icon_mrgreen:

 :LolLolLolLol: :roll2:
Title: Re: Big Slide v2.0 Begins
Post by: monsta666 on November 09, 2012, 05:47:22 AM
In the fallout here, anyone who buys Capitalism as an equitable system needs to get a First Class Ticket to the Great Beyond. It is just BULLSHIT.  I will PERSONALLY issue the ticket for Karl Denninger.  :icon_mrgreen:
In effect you are saying the vast majority of people especially in the US will need a ticket to the great beyond for despite there being a greater awareness of how unfair the system is the vast majority of people still strongly believe the captialist system is fair. In fact all these fallouts are just the product of Obama and co. and not the failure of capitalism.
Title: Re: Big Slide v2.0 Begins: Why Do I Think...................................
Post by: RE on November 09, 2012, 05:51:23 AM
RE,  Why do I think Ozzie & Harriet wasn't your favorite TV show??   :D ;D : :laugh:  :exp-grin: :icon_mrgreen:
:LolLolLolLol: :roll2:

Ozzie & Harriet Very LOW on my list, probably the only one LOWER is Leave it to Beaver.  :icon_mrgreen:

Topping the list would be "It Takes a Thief"
(http://2.bp.blogspot.com/_CTdohY39Brg/SrewAZ3H3GI/AAAAAAAAAhA/awsNJAIZXx0/s400/key_art_it_takes_a_thief.jpg)

and "Twilight Zone".
(http://thefilmstage.com/wp-content/uploads/2011/06/Rod-Serling-picture.jpg)

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on November 09, 2012, 05:56:38 AM
Did you forget Mr Paladin   :o    ;D :exp-grin:

                             
HGWT19
HGWT19
Title: Re: Big Slide v2.0 Begins
Post by: RE on November 09, 2012, 06:02:20 AM
In effect you are saying the vast majority of people especially in the US will need a ticket to the great beyond for despite there being a greater awareness of how unfair the system is the vast majority of people still strongly believe the captialist system is fair. In fact all these fallouts are just the product of Obama and co. and not the failure of capitalism.

I have NEVER made any secret of the fact that

1) I think anyone who BELIEVES in Capitalism needs a First Class Ticket to the Great Beyond

&

2) A LOT of people gotta DIE here

Under this rubric, it would be a WISE idea to give up on Capitalism as a worthwhile paradigm to pursue.  If *I* ever get elected as Chief Justice and Lord High Executioner, anybody who holds onto these beliefs is in a WORLD OF SHIT!  LOL.

RE
Title: Re: Big Slide v2.0 Begins
Post by: RE on November 09, 2012, 06:13:49 AM
Did you forget Mr Paladin   :o    ;D :exp-grin:

Ya Have Gun, Will Travel too.  :icon_mrgreen:

(http://gifsoup.com/view/245806/palladin-o.gif)

Not to mention The Rifleman.

PA!  He MEANS it!

(http://gifsoup.com/view6/2281558/rifleman-o.gif)


RE
Title: Re: Big Slide v2.0 Begins
Post by: Petty Tyrant on November 09, 2012, 07:10:44 AM
"Actually, it is better now in this respect, because people are actually becoming AWARE how they are being SCREWED.  For a good 300 years here, people thought they were living under a fair and equitable system, which was complete and utter BULLSHIT.  "

You give the sheeple way too much credit there, they just re-elected the farmer who has loaded them onto the truck to the slaughter.
Title: Re: Big Slide v2.0 Begins
Post by: Snowleopard on November 09, 2012, 09:28:31 AM
"Actually, it is better now in this respect, because people are actually becoming AWARE how they are being SCREWED.  For a good 300 years here, people thought they were living under a fair and equitable system, which was complete and utter BULLSHIT.  "

You give the sheeple way too much credit there, they just re-elected the farmer who has loaded them onto the truck to the slaughter.

Individual investors are exiting the markets in significant numbers.  Impossible to determine exactly how many are leaving due to financial necessity or in fear of a large crash, versus in awareness that markets are rigged and/or fraudulent; but, considering comments in the market blogosphere, it appears likely that up to half of this exit move is due to awarness.

Individual investors (especially those who actively trade their own accounts) tend to be more aware than average sheeple and are a small percentage of general population.  Even if they ALL woke up it would not effect national elections all that much. 

Elections could be viewed as another rigged/fraudulent market.  Certianly that applies to the major parties, and likely to many of the minors.  Considering voter participation rate, there is little measurable awarness of this yet.  Likely you are correct, and the majority is still fast asleep.   Or possibly voting is a bad habit that is hard for most to kick??

As for the election itself, there did not seem to be disagreement over loading sheeple for slaughter.  It was more about admitting it is happening, which flock goes first, how fast the slaughter proceeds, and which slaughterhouse gets the majority of the profit.
Title: Re: Big Slide v2.0 Begins
Post by: g on December 21, 2012, 05:23:01 AM
Looks like a Flash Crash on Wall St this morning.   S&P Futures down the limit!   

Something going on that warrants attention!
Title: Re: Big Slide v2.0 Begins: Bull Market in U.S. Equities to End in 2013, UBS Says
Post by: g on January 09, 2013, 05:31:20 AM
The bull market in U.S. equities that began in 2009 may end this year, followed by a drop of as much as 30 percent in the Standard & Poor’s 500 Index by next year, according to technical analysts at UBS AG.

The S&P 500 may gain 7.4 percent to as high as 1,570 forming a top for the 116 percent rally from March 2009 in late summer this year, Michael Riesner and Marc Mueller in Zurich wrote in a report yesterday. A “cyclical” bear market will then follow, with the gauge dropping as low as 1,100 by 2014, they added. The measure fell 0.3 percent to 1,461.89 yesterday.  :o :o ::) ::)
www.bloomberg.com/news/2013-01-08/bull-market-in-u-s-equities-to-end-in-2013-ubs-says.html (http://www.bloomberg.com/news/2013-01-08/bull-market-in-u-s-equities-to-end-in-2013-ubs-says.html)    :icon_study:
Title: Re: Big Slide v2.0 Begins: Celente: The 2013 Financial Collapse
Post by: g on January 18, 2013, 05:20:32 PM
THE 2013 Financial Collapse Will Be One For The Ages

Today top trends forecaster Gerald Celente told King World News the Western world is heading into a massive financial collapse in 2013.  Celente also provided KWN exclusively with a small portion of a frightening new piece from the former Assistant Treasury Secretary under Ronald Reagan, which is contained in the interview below. 

So far the “euro crisis” promoted by the US and Western media has protected the US dollar by sending euro holders fleeing into dollars, and the Federal Reserve’s purchase of the banks’ bad bets has kept economic Armageddon at bay.  However, the Federal Reserve cannot forever create new dollars with which to purchase the banks’ bad bets and with which to finance the huge annual operating deficits of the US government without undermining confidence in the dollar.


Sooner or later the world is going to abandon the US dollar as the currency in which international accounts are settled. With this drop in the demand for the dollar, its price or exchange rate will fall, and import prices will rise. As the US is now an import-dependent country, from that day on, Americans who walk into Walmart will think they have walked into Neiman Marcus.”

When asked about Germany repatriating their gold, Celente responded, “Well, I have to tell you that following the (mainstream media) news covering it in the (United) States, you would think this was, ‘Oh my God, how could they (Germany) be doing it (taking gold out of the US), and whether or not it’s a conspiracy theory and there is really no gold in the vaults (of the Fed)?


I mean this is really basic intelligence.  Why would anybody want somebody else to be holding their money when they could hold it themselves?  I mean they do have banks (and vaults) in Germany last time I looked.  What’s the gold doing everywhere else?


They are making a big deal about repatriating (some) gold by 2020.  I tell you, I don’t believe the gold is there.  I believe they are saying there is a lot of more gold out in the system (of central banks) than there actually is.  So here is my feeling, Eric, there is not a lot of gold out there (in Western central bank vaults), and they can’t account for it.  The gold isn’t there to back the money, and they want to keep this quiet.”


http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/18_Celente__The_2013_Financial_Collapse_Will_Be_One_For_The_Ages.html (http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/18_Celente__The_2013_Financial_Collapse_Will_Be_One_For_The_Ages.html)           :icon_study:




Title: Re: Big Slide v2.0 Begins: 5 Dangers Set to Trip a 100-year Bear Market
Post by: g on February 20, 2013, 06:12:36 PM
Dr. Dooms warn of a 2008 repeat at the very least

By Paul B. Farrell, MarketWatch

SAN LUIS OBISPO, Calif. (MarketWatch) — He’s known for his prediction of a “100-year bear market. “One thing I’ve repeated consistently,” Robert Prechter, author of “At The Crest of the Wave” and “The New Science of Socionomics,” told me years ago, “is that the great bear market will take the DJIA at least below 1,000 and likely to below 400. Precedents for this severe a decline are the English stock prices in 1720-1722 and American stock prices in 1929-1932.”
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Yes, Prechter’s a permabear, But his success as a forecaster dates back to 1978 when he predicted a “raging bull market of the 1980s.” Nobody believed him back then either. Later he was called “Guru of the Decade” by the Financial News Network. The title “Dr. Boom” would have fit too.

But today Prechter is remembered more for his later doomsday predictions. No wonder it’s hard to believe any updates after all these years, especially with the DJIA closing in on its all-time record of 14,164 set in October 2007 before the crash. Nor with CNBC reporting that “after a 13% gain for the S&P in 2012, strategists remain bullish on equities.”

Harder still in a world where Wall Street and global stock markets are dominated by traders who think in milliseconds, million of investors focus on closing prices and CEOs can’t see past quarterly earnings.

In Prechter’s favor, however, is the fact that on an inflation-adjusted basis, America may already be sliding imperceptibly into a 100-year bear. After all, with two market crashes, two huge economic recessions, two costly wars and trillions in debt, Wall Street has indeed fallen behind the 30%-plus inflation rate since the new millennium began.

Moreover, early in 2013 Prechter’s Elliott Wave team said that “if a decline is ahead, it could be much more severe than the one in 2007-09.” Another collapse from 14,164 to 6,440 may be the one that sinks us into a painful bear market, whether a few years or a hundred.
Many other Dr. Dooms predict new 2008 crash, long bear market

Today, Prechter is in great company, one of many other well-known “Dr. Dooms” who have long-term visions, in a myopic world. You’ll see Prechter alongside such other great “Dr. Dooms” as Hong Kong’s Marc Faber ... celebrity economist Nouriel Roubini ... Nobel economist Joseph Stiglitz, author of “Freefall” ... $100 billion money manager Jeremy Grantham, who says our GDP is “On the Road to Zero Growth” ... Forbes columnist Gary Shilling, who sees the S&P dropping 45% to 800... historian Niall Ferguson, author of “Colossus: The Rise and Fall of The American Empire” ... hedge fund genius Nassim Taleb, author of “Black Swan” ... former IMF chief economist Simon Johnson, co-author of “White House Burning” and “Doomsday Cycle” ... billionaire trader George Soros, who just made a billion shorting the yen ... economists Carmen Reinhart and Kenneth Rogoff, whose classic “This Time is Different: Eight Centuries of Financial Folly” says it all ... anthropologist Jared Diamond whose “Collapse” warns us that throughout history civilizations fail because leaders fail to plan and act in time ... and other “Dr.Dooms” we’re tracking.
Robert Prechter

So yes, Prechter and his Dow 400 and 100-year bear-market predictions are in good company. And we even have to include Pimco’s Mohamed El-Erian, who manages a $2 trillion portfolio along with “Bond King” Bill Gross. El-Erian recently warned investors about the “New Normal: Low Growth, Few Jobs.”

America, and other developed countries around the world, are in danger of a global economic collapse, a forecast solidified in a recent National Bureau of Economic Research study by Richard Gordon: “Is U.S. Economic Growth Over?”

Gordon says yes: America’s hopes for 3%-plus growth is dead. Listen closely to why Gordon is a Dr. Doom: For five centuries before the 18th century, the per-capita growth rate was only 0.2% annually. Then during the Industrial Revolution, it “shot up” to 2.5% till 1930 amid endless innovations: Steam engine. Railroads. Electricity. More.

But “it’s been downhill since 1950,” with growth averaging 2.1%: “On this trajectory, the American economy will be back where it started by 2100,” with annual growth of just 0.2%. Why? Too little real innovation.

What really distinguishes these Dr.Dooms is their long-term vision. The others are Wall Street’s insiders. They focus on short-term profits, daily closing prices, quarterly earnings, year-end bonuses. The long term is irrelevant. Public consequences, irrelevant. Global resources impact, irrelevant. Environment, irrelevant. Free-market capitalism in action.
Dr. Doom Nouriel Roubini warns: ‘Prepare for a Perfect Storm’

Neuroscience studies tell us investors have a bullish bias. It’s in our DNA, locked in the brain. Wall Street does too, hence 93% “buy” recommendations. We tracked the damage done to the market for four years leading up to the 2008 crash. Watched the warnings ignored. And repeating since. The collective warnings of all these Dr. Dooms is falling on deaf ears. The investors listen to news media that reinforce a bull bias, like CNBC: S&P’s 13% gain in 2012 that’s got “strategists bullish on equities.”

ZeroHedge recently had the best visual of what’s ahead: “A final parabolic spike up To 1,575 S&P followed by up to 50% market crash.” Yes, we’re on a hyped-up roller-coaster ride, trapped in our naivete, ignorance, denial, riding the parabola up, then shocked awake on a speedy drop, repeating 2008.

Except this time, with all the anger about Treasury and Fed debt, banks won’t get bailed out and a new Glass-Steagall is coming.

Here’s a quick review the macroeconomic dangers Dr. Doom Nouriel Roubini saw in his late January warning on Slate.com: “Prepare for a Perfect Storm.” Our world is a game of dominos, any one of which could put in motion a global economic, market and monetary collapse. Listen:
1. America: We’re still at the edge of a fiscal cliff and markets suffering

“Sooner or later, another ugly fight will take place on the debt ceiling ... Markets may become spooked by another fiscal cliffhanger,” with “a significant amount of drag, about 1.4% of GDP, on an economy that has grown at barely a 2% rate” in recent quarters.
2. Euro zone: Stagnation, recession, austerity, credit crunch continue

Roubini warns: “The monetary union’s fundamental problems have not been resolved. Together with political uncertainty, they will re-emerge with full force ... large and potentially unsustainable stocks of private and public debt remain.” Plus, “aging populations and low productivity growth” will be “eroded in the absence of more aggressive structural reforms to boost competitiveness.”
3. China: Bust in real estate, infrastructure, industry will accelerate

Chinese are relying “on another round of monetary, fiscal, and credit stimulus to prop up an unbalanced and unsustainable growth model based on excessive exports and fixed investment, high saving, and low consumption.” Their new leaders are conservative and “consumption as a share of GDP will not rise fast enough ... So the risk of a hard landing” is rising rapidly.
4. Emerging markets: State capitalism is decelerating growth

Dr. Doom says the BRICs (Brazil, Russia, India, and China) are now experiencing declining growth: Their “state capitalism ... is the heart of the problem.” He doubts they’ll “embrace reforms aimed at boosting the private sector’s role in economic growth.”
5. Global geopolitical risks: Oil importers face negative economic growth

“Arab Spring is turning into an Arab Winter.” The Middle East to “Afghanistan and Pakistan is socially, economically, and politically unstable ... with Israel refusing “to accept a nuclear-armed Iran ... the drums of actual war will beat harder. The fear premium in oil markets” will “increase oil prices by 20%, leading to negative growth” for all “advanced economies and emerging markets that are net oil importers.”

Yes, Roubini hedges his bet: “While the chance of a perfect storm ... is low,” he warns: Any one of these five trends “alone would be enough to stall the global economy and tip it into recession” as “the downside risks to the global economy are gathering force” in 2013.

Jared Diamond put all the warnings in context in his classic, “Collapse: How Societies Choose to Fail of Succeed.” “One of the disturbing facts of history is that so many civilizations collapse. Few people, however, least of all our politicians, realize that a primary cause of the collapse of those societies has been the destruction of the natural resources on which they depend. Fewer still appreciate that many of those civilizations share a sharp curve of decline. Indeed, a society’s demise may begin only a decade or two after it reaches its peak population, wealth and power.”

So why do leaders fail us? Diamond says they’re “focused only on issues likely to blow up in the next 90 days,” lacking the will “to make bold, courageous, anticipatory decisions.” Thus short-term thinking and the failure to plan sets the stage for a rapid “sharp curve of decline” ... into a Great Recession 2, Dow 400 and a 100-year bear market.

 http://www.marketwatch.com/Story/story/print?guid=6871C374-7B84-11E2-B0BC-002128040CF6 (http://www.marketwatch.com/Story/story/print?guid=6871C374-7B84-11E2-B0BC-002128040CF6)   :( :icon_study:
Title: Re: Big Slide v2.0 Begins
Post by: Petty Tyrant on February 20, 2013, 08:00:23 PM
Good article GO,
I often complain at how some people will not listen even though your reasons are sound, and that is because their reactions are emotionally based. Eg I might overhear certain family members on the phone talking about me saying "he is absolutely CONVINCED the economy will collapse...." without mentioning any of the reasons I have given, why I might be right or wrong.

Anyway I have had a builder working at home recently, he has 7 Indian psychiatrists on his books and now im his 8th. Because I have steps and hesclearly struggling with them, Myself and son have carried everything up the stairs for him. I told him my plans of going to live on a farm and become self sufficient, and asked why and explained my reasons, the economy is collapsing etc. The next time he asked me again the "why?", as he had forgotten. Then yesterday after he had finished in the evening I offered him a beer and remarked 'BHP today reported a 50% drop in profit over the last 6 months', and his reply surprised me:

"Yes everything is contracting like you were saying (even though in this city everything is just fine for now), and its all due to the way money is created by the federal reserve which creates debt, the recovery from the GFC in 2008 is all printed money not economic real growth that adds to the debt, sooner or later a limit is going to be reached. " So basically he already knew well enough, but had never really thought about it until a seed was planted.

Title: Re: Big Slide v2.0 Begins
Post by: g on February 20, 2013, 08:17:18 PM
Good article GO,
I often complain at how some people will not listen even though your reasons are sound, and that is because their reactions are emotionally based. Eg I might overhear certain family members on the phone talking about me saying "he is absolutely CONVINCED the economy will collapse...." without mentioning any of the reasons I have given, why I might be right or wrong.

Anyway I have had a builder working at home recently, he has 7 Indian psychiatrists on his books and now im his 8th. Because I have steps and hesclearly struggling with them, Myself and son have carried everything up the stairs for him. I told him my plans of going to live on a farm and become self sufficient, and asked why and explained my reasons, the economy is collapsing etc. The next time he asked me again the "why?", as he had forgotten. Then yesterday after he had finished in the evening I offered him a beer and remarked 'BHP today reported a 50% drop in profit over the last 6 months', and his reply surprised me:

"Yes everything is contracting like you were saying (even though in this city everything is just fine for now), and its all due to the way money is created by the federal reserve which creates debt, the recovery from the GFC in 2008 is all printed money not economic real growth that adds to the debt, sooner or later a limit is going to be reached. " So basically he already knew well enough, but had never really thought about it until a seed was planted.

True Unc, many sense that something is drastically wrong, yet go about their daily business of surviving; it is much like that feeling of horror I have lately that something is terribly amiss. It has me all wired up, I can feel it, but must continue my daily rituals and chores as if nothing is going on. 
Title: Thunderclouds on the Horizon for the Blue Sky Index
Post by: RE on August 06, 2013, 01:49:56 AM
From Zero Hedge.

RE

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08/20130805_bluesky.jpg)

"Blue-Sky" Index Is Flashing Red (http://www.zerohedge.com/news/2013-08-05/blue-sky-index-flashing-red)

Submitted by Tyler Durden on 08/05/2013 21:22 -0400

Nobody may wish to believe it, but, Diapason Commodities' Sean Corrigan warns, it just might be that the US economy has seen its best for this phase of the cycle. Where does that leave assets? Arguably overpriced and overbought, he believes. The VIX has swooped to a low only once briefly undercut since before the last New Era started to lose its luster in early 2007. As a result, Corrigan's "Blue Sky" index - the OEX divided by the VIX, being an inverse representation of what people perceive to be the worth of buying price protection - has jumped to the upper third of the ninety?ninth percentile of the past quarter-century's distribution; an anoxia?inducing plane only briefly exceeded just as the first rumblings of the forthcoming doom started to afflict the Boom in the March of 2007.
Title: Re: Thunderclouds on the Horizon for the Blue Sky Index
Post by: WHD on August 06, 2013, 08:11:59 AM
From Zero Hedge.

RE

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08/20130805_bluesky.jpg)

"Blue-Sky" Index Is Flashing Red (http://www.zerohedge.com/news/2013-08-05/blue-sky-index-flashing-red)

Submitted by Tyler Durden on 08/05/2013 21:22 -0400

Nobody may wish to believe it, but, Diapason Commodities' Sean Corrigan warns, it just might be that the US economy has seen its best for this phase of the cycle. Where does that leave assets? Arguably overpriced and overbought, he believes. The VIX has swooped to a low only once briefly undercut since before the last New Era started to lose its luster in early 2007. As a result, Corrigan's "Blue Sky" index - the OEX divided by the VIX, being an inverse representation of what people perceive to be the worth of buying price protection - has jumped to the upper third of the ninety?ninth percentile of the past quarter-century's distribution; an anoxia?inducing plane only briefly exceeded just as the first rumblings of the forthcoming doom started to afflict the Boom in the March of 2007.

If I take that graph to it's logical extent, we have a ways to go before we peak. maybe. Either way, the crash will be spectacular.  :exp-evil:
Title: Re: Big Slide v2.0 Begins
Post by: Eddie on August 06, 2013, 09:11:38 AM
Marty Armstrong is still calling for a top in the US markets in late 2015.  That would make some sense to me, just looking at the way those things usually fall in the presidential election cycle. Of course, the instability of the whole system is so high now it could unravel with just about any good Black Swan event that might get the ball rolling.
Title: Re: Thunderclouds on the Horizon for the Blue Sky Index
Post by: jdwheeler42 on August 06, 2013, 06:49:36 PM
From Zero Hedge.

RE

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08/20130805_bluesky.jpg)

"Blue-Sky" Index Is Flashing Red (http://www.zerohedge.com/news/2013-08-05/blue-sky-index-flashing-red)

Submitted by Tyler Durden on 08/05/2013 21:22 -0400

Nobody may wish to believe it, but, Diapason Commodities' Sean Corrigan warns, it just might be that the US economy has seen its best for this phase of the cycle. Where does that leave assets? Arguably overpriced and overbought, he believes. The VIX has swooped to a low only once briefly undercut since before the last New Era started to lose its luster in early 2007. As a result, Corrigan's "Blue Sky" index - the OEX divided by the VIX, being an inverse representation of what people perceive to be the worth of buying price protection - has jumped to the upper third of the ninety?ninth percentile of the past quarter-century's distribution; an anoxia?inducing plane only briefly exceeded just as the first rumblings of the forthcoming doom started to afflict the Boom in the March of 2007.

If I take that graph to it's logical extent, we have a ways to go before we peak. maybe. Either way, the crash will be spectacular.  :exp-evil:
Let me give you Wheeler's First Law of Technical Analysis:

YOU CAN ONLY SEE MARKET PEAK AND BOTTOMS IN THE REAR VIEW MIRROR.

Trying to time the absolute peak or bottom is a fool's game.  I disagree with Tyler, that is flashing yellow, maybe orange.

Look at the local peaks and bottoms going from the green to the red.  Both the highs and the lows keep getting higher.  Now look at the trend from the red to the green.  Both the highs and the lows keep getting lower.

Have we past the point where it switches from going up to going down?  I don't know, but from what I see in the rear view mirror, the highs are still getting higher.  Maybe we just past the point of inflection, maybe we have a long way to go.  It'll be clear after we start going down.

Looking for lower highs and lower lows would have gotten you out of the market around 2000 and 2007 and looking for higher highs and higher lows would have gotten you back in around 2003 and 2009.  Not the absolute maximum profits, but still decent returns.  As they say, bears make money, bulls make money, pigs get slaughtered.

Title: Re: Thunderclouds on the Horizon for the Blue Sky Index
Post by: RE on August 06, 2013, 08:10:29 PM

Let me give you Wheeler's First Law of Technical Analysis:

YOU CAN ONLY SEE MARKET PEAK AND BOTTOMS IN THE REAR VIEW MIRROR.

Trying to time the absolute peak or bottom is a fool's game.  I disagree with Tyler, that is flashing yellow, maybe orange.

Kunstler called for a Bloodbath in September in his last article.  Of course he does that every year.  LOL.

I'm going with Elvis' Triangle of Doom and will say end of 2014 for the bottom to fall out.

RE
Title: Gold Bugs go LONG on Glue Sniffing!
Post by: RE on September 05, 2013, 01:19:41 AM
This would be a good time for Gold Bugs to START Sniffing Glue.  :icon_mrgreen:

http://www.youtube.com/v/7WAwuSK36Gw?feature=player_detailpage

RE

JPY Tests 100.00 For First Time In 6 Weeks; US Treasury Curve Collapses To Flattest In 13 Months; Gold/Silver Slammed (http://www.zerohedge.com/news/2013-09-05/jpy-tests-10000-first-time-6-weeks-us-treasury-curve-collapses-flattest-13-months)
         
 (http://www.zerohedge.com/sites/default/files/pictures/picture-5.jpg) (http://www.zerohedge.com/users/tyler-durden)
   
Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 09/05/2013 01:36 -0400
UPDATE 2: And there go the precious metals... with their ubiquitous 'opening' slamdown...
(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC6_0.png) (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC6.png)
 
UPDATE 1: US Treasuries are now rallying urgently back from the edge as European markets awake (and the EUR slammed)... what else would one expect on ECB/BoE day?
 
The exuberance of the US day-session has flopped into the evening and Asian stocks, buoyed by a plunging JPY and the carry-mob is on a charge once again. USDJPY just broke back over 100.00 for the first time since July 25th managing to lift the Nikkei almost 1000 points since Friday's close. Most Asian stocks are higher (India  2.6%) but FX is more varied with the Rupiah, Baht, and Ringgit lower still as the Rupee strengthens modestly (as forwards compress too). The USD is bid against the majors with EUR cracking lower. The tale of the night though is US Treasuries which have slammed higher in yield once again. The spread between 5Y Treasuries and 30Y has plunged over 30bps in the last month and now hovers just above 200bps - its lowest in 13 months. This bear-flattening (belly and short-end is underperforming notably overnight) has driven the market's implied 10Y rate for year-end over 3% for the first time since July 2011. The entire forward curve of the Treasury complex is repricing higher in rates as 'absolute' NIM expectations drop.
 
JPY has been dropping rapidly recently with USDJPY up 300 pips in the last few days..
(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC4_0.png) (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC4.png)
 
Which managed to 'fund' almost 1000 Nikkei 225 points since Friday's close...
(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC3_0.png) (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC3.png)
 
Still think financials are all about the NIM? think again... here is 3m forward 10Y rates vs XLF... jumping over 3% as the front-end underperforms...
(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC1_0.png) (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC1.png)
 
But its not just the forward curve, the spread between longer-dated and mid-dated Treasuries has collapsed...
(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC2_0.png) (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC2.png)
 
So there we have it, McCain's moar war has fixed Asia, broken bonds, and ramped the USD...
 
And remember its ECB/BoE day in Europe... and the EUR is trading like penny stock... as European markets open and push Treasury yields back lower once again...
(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC5_0.png) (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/08-2/20130904_APAC5.png)
Title: Re: Big Slide v2.0 Begins
Post by: g on January 24, 2014, 07:12:42 PM
The global stock markets got severely clobbered this week.

Dow was down over 300 today and close to 200 day before.

Could be the start of something big. It is being blamed on bad earnings being reported, which is true, but I have a feeling there are other hidden problems festering we are not privy too. Just a hunch, but it warrants close watching.   :dontknow:

                                                                     
index
index
                                                               
                                                           
Title: Re: Big Slide v2.0 Begins
Post by: g on April 11, 2014, 06:43:39 AM
Not mentioned much on the forum the past week is the vicious stock market decline. Stock have been in a free fall and certain areas such as Biotech and NASDAQ in particular have been decimated.

Market crashes like this from out of nowhere are always frightening, this one is starting to look like it might be the start of a big one. Who knows, just wanted to mention and call attention to it.  :-\
Title: Re: Big Slide v2.0 Begins
Post by: jdwheeler42 on April 11, 2014, 07:56:07 AM
Thanks for bringing this to our attention.  I've definitely been missing you're eye on the financial world.

I'm not too worried about this particular drop snowballing because it is so "out of nowhere"... the market isn't jittery enough to start a panic, as indicated by the VIX chart:

(http://www.cboe.com/publish/micrositecharts/VIX_SP500_Index.jpg)

However, to turn a phrase on it's head, this isn't the beginning, but it may be the beginning of the beginning.  In other words, this might be what set investors on edge so that the next one starts a panic.  I wouldn't bet the farm on it, though.

And to fill in the missing data for this year:
(http://www.cboe.idmanagedsolutions.com/charts/new/advanced/advanced.chart?ID_NOTATION=8941863&TIME_SPAN=5Y&TYPE=mountain&RESOLUTION=W&AXIS_SCALE=&ID_BENCH1=SPDR&ID_BENCH2=&ID_BENCH3=&IND_1=&AVG1=&IND_2=&DIVIDEND=0&SPLITS=0)
Title: Re: Big Slide v2.0 Begins
Post by: g on April 11, 2014, 08:10:10 AM
Quote
However, to turn a phrase on it's head, this isn't the beginning, but it may be the beginning of the beginning.  In other words, this might be what set investors on edge so that the next one starts a panic.  I wouldn't bet the farm on it, though.

I hear you JD. Actually we are on the same wave length, but after the 2007-8 debacle I have become extra cautious and a bit paranoid as well. I will never ever be fully invested after that debacle and have increased the cash portion of my assets permanently and considerably as a result of it. I found out the meaning of the saying "Confidence is Suspicion Sleeping" and will never forget it again.
Title: Re: Big Slide v2.0 Begins
Post by: g on April 11, 2014, 11:53:22 AM
Market down another 150 as I write, after two failed rally attempts. Not a pretty picture and starting to look a bit spooky.

Relief rally had better come soon, early next week hopefully.  :-\
Title: Re: Big Slide v2.0 Begins
Post by: monsta666 on April 11, 2014, 04:40:40 PM
Market down another 150 as I write, after two failed rally attempts. Not a pretty picture and starting to look a bit spooky.

Relief rally had better come soon, early next week hopefully.  :-\

Stocks have gone nowhere basically this year as the drops have been as big the gains. On the whole I think the stock market is vastly overvalued especially if you take it from a price to earnings ratio which is often in the region of 20 to 1. In other words people bet the market will be good for many years to come which we all know is preposterous. In any case you might want to look at Chris Martenson's latest article on the The Screaming Fundamentals For Owning Gold (http://media.peakprosperity.com/images/TCMD-gold-report.jpg) it offers good food for thought. I am not a fan on gold investment but it is always a good habit to hear views that do not gel with you especially if those views are well constructed.
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on April 11, 2014, 05:06:29 PM
Monsta, I have the highest rated anti-virus software money can buy on my unit.  Kaspersky. Look it up.  I didn't get infected - maybe that's why? So is your advice to other diners to just pay up and get the best?

Why is It so fucking difficult for Haniel to make a god damn appearance at the dd and answer the questions directed to him?
Title: Re: Big Slide v2.0 Begins
Post by: Karpatok on April 11, 2014, 05:17:14 PM
  VERY GOOD QUESTION!     SEE PRECEDING
Title: Re: Big Slide v2.0 Begins
Post by: monsta666 on April 11, 2014, 05:18:35 PM
Monsta, I have the highest rated anti-virus software money can buy on my unit.  Kaspersky. Look it up.  I didn't get infected - maybe that's why? So is your advice to other diners to just pay up and get the best?

I also have Kaspersky so I know what it is. If you notice I never actually said you had to have the best anti-virus software around. I didn't even suggest you had to pay to overcome problems. I simply said to keep your anti-virus up-to-date which I did NOT do at the time. If you follow the measures I suggested then you will be free of problems 99.9% of the time. Off course if you are online long enough that 0.1% becomes significant.

Any how when the test was done Haniel said there was nothing and since my infection was not so bad I don't think was a pressing issue to keep probing. It would be nice to hear Haniel's take on this matter as he would know more but seeing as everyone is clean and there has been no subsequent episodes then I think this case is closed. If there are future episodes however please, please report them to me as soon as possible and I will try my best to get Haniel and RE to delve into the matter.
Title: Re: Big Slide v2.0 Begins
Post by: g on July 10, 2014, 06:25:16 AM
Looks like a real bad day for stock investors world wide.

Asia, Europe, US all look to take monster nose dives at opening.  :rain:
Title: Re: Big Slide v2.0 Begins
Post by: MKing on July 10, 2014, 09:24:42 AM

No doubt about it S&P looks terrible.

GO, when you wrote this, the S&P was 1408 in May, 2012.

June, 2014 it was 1960

Have you EVER thought that the S&P wasn't terrible?

Title: Re: Big Slide v2.0 Begins
Post by: g on July 12, 2014, 07:21:29 AM

No doubt about it S&P looks terrible.

GO, when you wrote this, the S&P was 1408 in May, 2012.

June, 2014 it was 1960

Have you EVER thought that the S&P wasn't terrible?

Hi MKing, I have had a large percentage of my assets in the stock market since I was a kid, around 50 or so odd years shall we say. I am an inflationist as I have tried repeatedly  to explain to you; and if there is anything I would rather own as much as gold and silver in inflationary times it is common stocks in good solid companies with the ability to raise prices on their goods to compensate for that currency depreciation, as well as dividends. I am not a trader but a long term investor and never sell a stock I have a profit in without very strong reasons; and have never taken a dividend as yet, I reinvest them in DRIPS to this day. The only time I sell something is when I am forced out through them becoming wall paper such as all my prior solar investments, or my Vegas casino stocks which I owned for decades but felt the water situation and constant new building was a definite path to calamity soon.

Your sarcastic remark comes my way no doubt for your dislike of gold and gold bugs because you were conned into buying some at the wrong time by con men that told you gold was an investment for something bad to happen. It is not.

You claim you are a scientist and great objective thinker who can't be bothered with opinions of bloggers, but that hard facts are your tools in trade. Let me give you one a first grader can grasp and see if you can deduce anything from it?

When Nixon removed the Gold dollar fix the average price of gold for that year was Forty dollars an oz. The stock market as measured by the Dow traded between 800 an 950 or abouts for the same year.

Gold subsequently rose about 50 times in value at its peak since then, and the Dow about 18 or twenty times. Does that register anything in your brilliant scientific objective mind about your theory of gold being a hedge against calamity and a crashing stock market, or can you see the idea is just blogger bull shit, opinion backed by nothing as you like to say?

Since you opened the door and asked me a personal question about my finances can I ask you one. I want to make it clear before I do that my question comes about at my dismay from your coming up with a quote of mine a few years stale about the look of the stock market at a given point of time. It bothered me that you would search back into my posts to find something so petty and meaningless to demean my overall financial views and make me seem incompetent, or one who knows of not what he is speaking. Let me also make it clear  that you have the perfect right to do so, if anyone is deserving of criticism and questioning, I certainly belong on the list.

I have always defended the rights of trolls such as yourself to speak and project your views because I do believe in free speech and  learning for the ideas of others, no matter how different from mine or offensive I find them. Another reason is that one mans art work is another mans cartoon. Jason Pollock the famed artist comes to mind, I wouldn't hang his works in my bathroom, while others much better educated in the art world than myself consider him  a grand master.

Yet there is something really strange and evil about you fucking trolls, you delight in mayhem, hurting and belittling people, even the ones who try and defend your vile behavior. Pain and Napalm, as well as hurt feelings and verbal wars turn you crazy sick bastards into smiling and satisfied smirking faces of a job well done. You all have that glee and crazed delight when mayhem appears. You  go to great length to create it at every opportunity and leave no stone unturned in your desire to bring it about.

When normal people have arguments that spiral into napalm and ill feelings they usually feel remorse afterwards, ashamed at losing their tempers, and wish it had not happened, but you trolls only wish it was more violent and lasted longer and more people would have gotten involved. And then there is that delight you get from it all, like sexual satisfaction you are so sick.

Have thought about you scuzzballs often and have always wondered why? The closest thing I can come to it in the real world, meaning non internet, are these sickos called Sparkies that hang around fire stations. Whenever the siren goes off they get a crazed happy look on their face and follow the fire engines to the fire where they stand and stare in pure awe and enjoyment. They say if there are people jumping out of windows and screaming from being burned to death they have orgasms of sheer pleasure as they watch with that crazed shiny eyed grin.

Just doesn't add up, what is it about you sick miserable  bastards that make you delight in misery and mayhem and cause you to be always starting Fires ??

                                                            (http://wallpaper.pickywallpapers.com/ipad2/jack-nicholson-as-a-joker.jpg)

                    Troll MKing After Reading GO Reply


Title: Re: Big Slide v2.0 Begins
Post by: Karpatok on July 12, 2014, 06:26:39 PM
  So GO, you are finally wising up, my friend, to the absolute lack of fellow feeling in a person whose right to free speech you have several times defended. And when we were all banished to the anti diner and I was finally fed to the gills with the continuing of using the anti diner as a complaint blog about the Diner and never moving on to a serious discussion of anything else, you emphasized privately to me that I should respect MKing and allow for his differing views, even though I found him extra ordinarily callous and totally devoid of any sensitivity in regard to any living beings or the planet itself. In addition, I completely agree with RE that MKing is nothing but a braggart and windbag, never really taking a stand or backing up his snide remarks with anything. I call him the GASBAG. I apologized to him privately in a PM once for having said that he measured himself by the size of his paycheck, but really, I still stand by that. He is so typical of countless American men, and now I suppose many women also, in a very mercenary culture lacking any intellectual, artistic or spiritual values. The very reasons that I have always despised the majority cultural views in America and wished that I had been born somewhere else. Now I am feeling even more so and I know that I am not alone in this. BTW, I have never believed in the politics of "cultivating" people because they might be the enemy of my enemies. I am just too GD naive or stupid for that. So as I have said before, "Be careful who you hang out with, what goes around comes around". MKing has had plenty of chances to show seriousness and decency but the sad fact is he is an empty vessel of nothingness. In short, a GASBAG, full of his own gas. He is obviously running on empty because why else would he have hung around here for so long with no motive other than to obviscate. He is not really worth taking seriously at all and certainly isn't worth the image of the Joker. You gave him too much credit before in a positive way and now you've gone to the opposite extreme in the negative. As Hannah Arendt pointed out long ago, this kind of evil is very very BANAL. VERY ORDINARY. As Surly said, we should all stop replying to him, or paying attention to him at all. The truth is that inside of himself he feels himself to be a nothing, and everything he tries to express just expresses that nothingness because he is EMPTY.
Title: Re: Big Slide v2.0 Begins
Post by: RE on July 12, 2014, 09:11:27 PM
It appears Prof. Moriarty has finally given up after having about 4 out of 5 of his posts sent to the DN&F Bin.

He only enjoys posting if he can belittle other people and brag about himself.  When you take that away, there just isn't much he writes about.  Once in a while he'll pitch out some factoid from geology to prove he is an insider, but mainly he is just a shill for fracking.  Whether he believes his own bullshit or not, this is how he earns his fat paycheck, so he lobbies constantly that this is perfectly safe, we've been doing it for years etc.  The other tactic is to shift the blame onto J6P for buying the stuff, when he knows perfectly well it's about impossible to live inside the industrial culture and not buy it, at least by proxy.  Even if you take public transportation, the buses burn diesel and the subways use electricity from Nuke Plants.

The biggest load of shit is all his claims of being Mr. Green because he drives an EV.  The electric power to charge up these things comes 99% from the grid.  Charging up a full size EV automobile with Solar Cells is possible with a large enough array, but then in addition to the $40K for the vehicle you have another $40K for the array, not to mention a roof large enough to install it on or plenty of property.

There is no way even if you could pitch all the ICE automobiles off the highway tomorrow and replace them with EVs that the grid could support the increased load, and further no way that an increasingly impoverished population could afford the vehicles and their own charging arrays for them.

He doesn't acknowledge the exponential debt problem, or the fact that the Energy Industry itself is the leader in multiplying up the debt, a few $Trillion$ worth in the last few years.  His company by itself has over $5B in debt floating, that's where his paycheck comes from.  Long as they can keep rolling it over they are fine, but it's already become apparent that this is yet another bubble of irredeemable debt that won't get paid back.  Of course when they go Belly Up, the managers of this company won't pay back the debt, it will go on the public debt with everything else.

Anyhow, I'll be surprised if he posts up again, and even if he does it will be just more of the same DN&F material.  So that Era is over too here on the Diner.

RE
Title: Re: Big Slide v2.0 Begins
Post by: MKing on July 13, 2014, 04:46:50 PM
When Nixon removed the Gold dollar fix the average price of gold for that year was Forty dollars an oz. The stock market as measured by the Dow traded between 800 an 950 or abouts for the same year.

Gold subsequently rose about 50 times in value at its peak since then, and the Dow about 18 or twenty times. Does that register anything in your brilliant scientific objective mind about your theory of gold being a hedge against calamity and a crashing stock market, or can you see the idea is just blogger bull shit, opinion backed by nothing as you like to say?

We have discussed my entrance into the gold market, and stock market in general, before. Because the results you expressed above are time dependent, those us who entered the game at a different time, achieved different results.

As I have stated before, I have zero beef with really any investment strategy, but my experience with the value of gold, versus what has happened in the markets, is not yours, and I have profited far more handsomely from one, than the other.

Quote from: Golden Oxen
Since you opened the door and asked me a personal question about my finances can I ask you one. I want to make it clear before I do that my question comes about at my dismay from your coming up with a quote of mine a few years stale about the look of the stock market at a given point of time. It bothered me that you would search back into my posts to find something so petty and meaningless to demean my overall financial views and make me seem incompetent, or one who knows of not what he is speaking. Let me also make it clear  that you have the perfect right to do so, if anyone is deserving of criticism and questioning, I certainly belong on the list.

Not demeaning GO. Just an example of what appeared to be unidirectional thinking…hence the question. You see, that is perhaps the most valuable lesson I learned from gold. It isn't the only game in town, and there is as much value in betting against the herd, as with it.

Quote from: Golden Oxen
Yet there is something really strange and evil about you fucking trolls, you delight in mayhem, hurting and belittling people, even the ones who try and defend your vile behavior. Pain and Napalm, as well as hurt feelings and verbal wars turn you crazy sick bastards into smiling and satisfied smirking faces of a job well done. You all have that glee and crazed delight when mayhem appears. You  go to great length to create it at every opportunity and leave no stone unturned in your desire to bring it about.

What an interesting opinion GO. And not surprisingly, compared to the opinions of yours edited out before they see the light of day, this one was certainly permitted by TPTB. And you think I am the one reveling in chaos?  :icon_scratch:

Quote from: Golden Oxen
Have thought about you scuzzballs often and have always wondered why? The closest thing I can come to it in the real world, meaning non internet, are these sickos called Sparkies that hang around fire stations. Whenever the siren goes off they get a crazed happy look on their face and follow the fire engines to the fire where they stand and stare in pure awe and enjoyment. They say if there are people jumping out of windows and screaming from being burned to death they have orgasms of sheer pleasure as they watch with that crazed shiny eyed grin.

That does sound pretty sick GO. But I'm not a Sparkie.

Quote from: Golden Oxen
Just doesn't add up, what is it about you sick miserable  bastards that make you delight in misery and mayhem and cause you to be always starting Fires ??

Balance…perhaps? For as many times as I poke, and prod, and examine the dredges and sewers of the internet, I put far more state of the art scientific thought and analysis to paper. A bit dry of a day job sometimes. Whereas here? Here I am free to explore the power of ideas, seeing how each Myers-Briggs type reacts to them, how TPTB react, their dedication to the cause, the quality and intellectual capability of the sycophants….you might not see it GO but the world is data, data on systems, and a person is a system. They can be predicted, they have habits, common traits, the data capable of being derived from these kinds of conversations is wonderful.

For example, the question I asked…why so sensitive? Usually that is indicative of some deep down recognition that not all is right with something…whereas I was just using it to point out that you have been pessimistic before…and obviously….it didn't go so well. The reaction offered from just NOTICING it is quite…provocative. It says as much as RE DOESN'T say, or says in PMs but then pretends otherwise in forum posts. Not that I have any interest in your particular Myers-Briggs category, you don't fit the zealot profile I am far more interested in.

Anyway, you see, in meatspace, among those who really know their stuff, these kinds of conversations don't happen. Open your mouth and not even know the facts? Well…there is a reason some are professionals, and others blog. At the end of the day, in the meetings where bloggers aren't qualified to carry coffee into the room, Briggs-Myers doesn't even matter, but doing PhD dissertation quality work on the fly does. And there is no time to have fun testing folks to see if their ideas have a natural bias so common and easy to find among zealots. Takes some of the fun out of it, it becomes all work work work.  :icon_sunny:
Title: Re: Big Slide v2.0 Begins
Post by: RE on July 13, 2014, 05:14:00 PM

For example, the question I asked…why so sensitive? Usually that is indicative of some deep down recognition that not all is right with something…whereas I was just using it to point out that you have been pessimistic before…and obviously….it didn't go so well. The reaction offered from just NOTICING it is quite…provocative. It says as much as RE DOESN'T say, or says in PMs but then pretends otherwise in forum posts. Not that I have any interest in your particular Myers-Briggs category, you don't fit the zealot profile I am far more interested in.

Anyway, you see, in meatspace, among those who really know their stuff, these kinds of conversations don't happen. Open your mouth and not even know the facts? Well…there is a reason some are professionals, and others blog. At the end of the day, in the meetings where bloggers aren't qualified to carry coffee into the room, Briggs-Myers doesn't even matter, but doing PhD dissertation quality work on the fly does. And there is no time to have fun testing folks to see if their ideas have a natural bias so common and easy to find among zealots. Takes some of the fun out of it, it becomes all work work work.  :icon_sunny:

He's BACK!

(http://markosun.files.wordpress.com/2011/06/poltergeist.jpg)

I toyed with sending this to DN&F mainly because of these last couple of paragraphs, however I chose instead to publish it to further elucidate the ego trip of Prof. Moriarty.

First off he intimates that I send out PMs and pretend otherwise in my posting, which is a crock of shit.  I think I sent him exactly one PM in all the time he has been a member, 2 at the most.  Mainly I told him to either put a lid on it or put up or shut up as far as his vast production of Peer Reviewed papers is concerned.

Next, he once again makes his sneering belittling of "bloggers" versus "professionals" like himself. If he was truly "professional", he would drop on links to his work so the Diners could review it and discuss it openly.  His Profession here is TROLLING.

To cap the whole thing off, he purports to be doing some kind of Psychological examination into the mindset of bloggers, I guess because at the Energy Industry Trade School he went to he took Psych 101 in addition to Econ 101 and is expert in this field also.

Anyhow, I dropped this one on for the further entertainment of the Diners, as Moriarty makes ever more clear his insanity.

RE
Title: Re: Big Slide v2.0 Begins
Post by: agelbert on July 13, 2014, 05:49:12 PM
AMAZING! MKing, the unidimensional, monomaniacal zealous defender of all dirty energy comes out of his Colorado hidy hole to do some MORE Orwellian Mindfuck!

Well, I suppose I should celebrate his consistency... He absolutely disdains mine.  (http://www.imgion.com/images/01/Angry-animated-smiley.jpg) 

You are going to lose your ASS on fossil fuel investments, Mining King. One half a BILLION people in Western Civilization now have their DIVEST FROM FOSSIL FUELS marching orders. But TAKE MY ADVICE, PLEASE! Ignore those whako Christians wanting to divest ON MORAL grounds from fossil fuels in 345 denominations amounting to over 500 million "suckers". Buy the DIP! Yeah, the "dip" may look like the GRAND CANYON but you've done the "math" and fossil fuels and nukes are CHEAPER and MORE PROFITABLE, aren't they? Dollar cost average for ALL YOU ARE WORTH. Mortgage the house. Sell the Volt. Fossil fuel Stocks are a HUGE buying opportunity!  (http://www.pic4ever.com/images/funny.gif)

The indictments can wait a while.  ;) You see. the for dividends on utility "profits" for the past CENTURY are ALL on the books, MKing. YOU can't HIDE them. When the bill is due for decommissioning the nukes, we are coming after you AND your descendants. So get your 357 magnum out and threaten me with it. It won't do you a damned bit of good.  :icon_mrgreen:

Have a nice day, Mr. HAS BEEN.  :icon_sunny:

MKing enjoying his Fossil Fuels and Nuclear Power Portfolio --->  (http://www.freesmileys.org/emoticons/emoticon-object-070.gif)     (http://www.pic4ever.com/images/245.gif)



Title: Re: Big Slide v2.0 Begins
Post by: g on July 14, 2014, 07:03:33 AM


.

Quote
Anyway, you see, in meatspace, among those who really know their stuff, these kinds of conversations don't happen. Open your mouth and not even know the facts? Well…there is a reason some are professionals, and others blog. At the end of the day, in the meetings where bloggers aren't qualified to carry coffee into the room, Briggs-Myers doesn't even matter, but doing PhD dissertation quality work on the fly does. And there is no time to have fun testing folks to see if their ideas have a natural bias so common and easy to find among zealots. Takes some of the fun out of it, it becomes all work work work.  :icon_sunny:


You change topic.

You talk in riddles and questions.

You play Mickey the Dunce to change the conversation when you cannot answer directly.

You present stale quotes out of context and true meaning as your means of astute scientific logic, as you call it, to try and demean people who are making a sincere effort to contribute in their own way.

 You can never point out someone's errors or mistakes as just that, but try and discredit all their work by the ones they make. Your constant derision of people the caliber of JHK and Mr. Bardi or Mr Hall are just a few examples.

It is pointless to try and have a discussion with you on account of this attitude, because you are just not sincere. As K says you are empty, and just friggin around having some sort of sick fun.

Your postings usually always end with self masturbation at you wisdom and knowledge and duty to point out how it is lacking in others.

The question remains, "Why is a person of your seeming good fortune and intelligence presenting yourself to others in such a distasteful, jeering, immature grade school bully and taunter manner?

Please don't bother to answer it on my account, your obtuse riddle ridden nonsense is no longer of any interest to me; spare me the obfuscations and self masturbation session. It was a statement framed as a question only to point out you never did answer my simple question of why you delight in mayhem and deriding people's efforts who have good intentions, even if their views have errors?


Title: Re: Big Slide v2.0 Begins
Post by: agelbert on July 14, 2014, 04:19:30 PM
Golden Opportunity said  to MKing
.

You change topic.

You talk in riddles and questions.

You play Mickey the Dunce to change the conversation when you cannot answer directly.

You present stale quotes out of context and true meaning as your means of astute scientific logic, as you call it, to try and demean people who are making a sincere effort to contribute in their own way.

 You can never point out someone's errors or mistakes as just that, but try and discredit all their work by the ones they make. Your constant derision of people the caliber of JHK and Mr. Bardi or Mr Hall are just a few examples.

It is pointless to try and have a discussion with you on account of this attitude, because you are just not sincere. As K says you are empty, and just friggin around having some sort of sick fun.

Your postings usually always end with self masturbation at you wisdom and knowledge and duty to point out how it is lacking in others.

The question remains, "Why is a person of your seeming good fortune and intelligence presenting yourself to others in such a distasteful, jeering, immature grade school bully and taunter manner?

Please don't bother to answer it on my account, your obtuse riddle ridden nonsense is no longer of any interest to me; spare me the obfuscations and self masturbation session. It was a statement framed as a question only to point out you never did answer my simple question of why you delight in mayhem and deriding people's efforts who have good intentions, even if their views have errors?

BRILLIANT! (http://www.pic4ever.com/images/47b20s0.gif)(http://www.pic4ever.com/images/128fs318181.gif)(http://www.desismileys.com/smileys/desismileys_0293.gif) (http://www.clker.com/cliparts/c/8/f/8/11949865511933397169thumbs_up_nathan_eady_01.svg.hi.png) 

You are GREAT when you speak from the heart, GO! Well done!  (http://www.pic4ever.com/images/19.gif)

K's got his number too!  :emthup: I hope she doesn't change her position just because I agree with her! LOL! Surly and I eat at the same "piggy" trough!  :icon_mrgreen:


Title: Re: Big Slide v2.0 Begins
Post by: Karpatok on July 14, 2014, 04:25:12 PM
 I've signed any and all of your petitions, AG. What do you want from me?
Title: Re: Big Slide v2.0 Begins
Post by: agelbert on July 14, 2014, 08:04:02 PM
K said,
Quote
I've signed any and all of your petitions, AG. What do you want from me?

Well, since you signed, to THANK YOU!  :emthup: :icon_sunny:  (http://www.createaforum.com/gallery/renewablerevolution/3-210614215943.gif)

Title: Re: Big Slide v2.0 Begins
Post by: Karpatok on July 14, 2014, 08:32:18 PM
  Thanks for your thanks, kind Sir, The Cause Is JUST!
Title: Re: Big Slide v2.0 Begins
Post by: MKing on July 15, 2014, 04:31:57 PM
You change topic.

Perhaps we, the two of us, haven't not made the topic clear enough for either of us to say this?

Quote from: Golden Oxen
You talk in riddles and questions.

I run thought experiments and lay out learning opportunities at every turn. I expect people who do not understand to ask, when they don't. I do not expect that my perspective is the same as others. Why should they be? We have learned two different lessons from gold, there is no dishonor for either of us to understand this FACT.

Quote from: Golden Oxen
You play Mickey the Dunce to change the conversation when you cannot answer directly.

Cannot? I reserve the right to remain silent should I wish. I reserve the right to not fight strawmen, or acknowledge logical fallacies, or repeat myself when faced with those who cannot read.

All reasonable rules during civil discourse, don't you think?

Quote from: Golden Oxen
You present stale quotes out of context and true meaning as your means of astute scientific logic, as you call it, to try and demean people who are making a sincere effort to contribute in their own way.

The quote was not stale. But was extremely telling, nicht wahr?

Quote from: Golden Oxen
You can never point out someone's errors or mistakes as just that, but try and discredit all their work by the ones they make. Your constant derision of people the caliber of JHK and Mr. Bardi or Mr Hall are just a few examples.

I live in a world where "caliber" is determined by results. I do not confuse "results" with folks who write things I agree with...versus providing said results. Mr. "Y2K will rock your world!", "let me demonstrate what I don't know about peak oil" or "all drilling in the US will stop by the year 2000" have a tough time meeting that criteria.

Unless of course Y2K rocked your world, or you believe all drilling in the US stopped by the year 2000 because of net energy issues? :icon_sunny: :icon_sunny:

Quote from: Golden Oxen
Your postings usually always end with self masturbation at you wisdom and knowledge and duty to point out how it is lacking in others.

Choose actual folks of caliber and we can discuss. You choose poorly on the last 3...try harder.

Quote from: Golden Oxen
The question remains, "Why is a person of your seeming good fortune and intelligence presenting yourself to others in such a distasteful, jeering, immature grade school bully and taunter manner?

I answered this once already. Perhaps it was erased in the standard purging of information?

Quote from: Golden Oxen
Please don't bother to answer it on my account, your obtuse riddle ridden nonsense is no longer of any interest to me; spare me the obfuscations and self masturbation session. It was a statement framed as a question only to point out you never did answer my simple question of why you delight in mayhem and deriding people's efforts who have good intentions, even if their views have errors?

If you don't want an answer, than why did you ask in the first place? :icon_scratch: :icon_scratch:

Worse yet..when given an answer...why do you ignore it?  :icon_scratch: :icon_scratch:
Title: Re: Big Slide v2.0 Begins
Post by: RE on July 15, 2014, 04:55:27 PM
You change topic.

Perhaps we, the two of us, haven't not made the topic clear enough for either of us to say this?

Quote from: Golden Oxen
You talk in riddles and questions.

I run thought experiments and lay out learning opportunities at every turn. I expect people who do not understand to ask, when they don't. I do not expect that my perspective is the same as others. Why should they be? We have learned two different lessons from gold, there is no dishonor for either of us to understand this FACT.

Quote from: Golden Oxen
You play Mickey the Dunce to change the conversation when you cannot answer directly.

Cannot? I reserve the right to remain silent should I wish. I reserve the right to not fight strawmen, or acknowledge logical fallacies, or repeat myself when faced with those who cannot read.

All reasonable rules during civil discourse, don't you think?

Quote from: Golden Oxen
You present stale quotes out of context and true meaning as your means of astute scientific logic, as you call it, to try and demean people who are making a sincere effort to contribute in their own way.

The quote was not stale. But was extremely telling, nicht wahr?

Quote from: Golden Oxen
You can never point out someone's errors or mistakes as just that, but try and discredit all their work by the ones they make. Your constant derision of people the caliber of JHK and Mr. Bardi or Mr Hall are just a few examples.

I live in a world where "caliber" is determined by results. I do not confuse "results" with folks who write things I agree with...versus providing said results. Mr. "Y2K will rock your world!", "let me demonstrate what I don't know about peak oil" or "all drilling in the US will stop by the year 2000" have a tough time meeting that criteria.

Unless of course Y2K rocked your world, or you believe all drilling in the US stopped by the year 2000 because of net energy issues? :icon_sunny: :icon_sunny:

Quote from: Golden Oxen
Your postings usually always end with self masturbation at you wisdom and knowledge and duty to point out how it is lacking in others.

Choose actual folks of caliber and we can discuss. You choose poorly on the last 3...try harder.

Quote from: Golden Oxen
The question remains, "Why is a person of your seeming good fortune and intelligence presenting yourself to others in such a distasteful, jeering, immature grade school bully and taunter manner?

I answered this once already. Perhaps it was erased in the standard purging of information?

Quote from: Golden Oxen
Please don't bother to answer it on my account, your obtuse riddle ridden nonsense is no longer of any interest to me; spare me the obfuscations and self masturbation session. It was a statement framed as a question only to point out you never did answer my simple question of why you delight in mayhem and deriding people's efforts who have good intentions, even if their views have errors?

If you don't want an answer, than why did you ask in the first place? :icon_scratch: :icon_scratch:

Worse yet..when given an answer...why do you ignore it?  :icon_scratch: :icon_scratch:

Another one of those, "should I publish or send to DNF" quandaries.

Is there any information of value in here?  None I can find.

More complaints about getting pitched to DNF, more bragging about the stratospheric world of "caliber" being determined by "results" he inhabits, unlike the rest of us lowly Homo Stupidus folks.

The really fascinating part of this is that Moriarty has even managed to demonstrate to the folks he dragged with with him that he is a complete jackass who basically says nothing of value.  I don't have to napalm this jerk myself anymore, GO and KK do that for me.

He seems completely unable to grasp that he undermines his own message by being a complete jackass all the time.  ::)

(http://bofh69.files.wordpress.com/2012/10/stupid.jpg)

RE
Title: Wile E Coyote Day
Post by: RE on July 31, 2014, 03:11:35 PM
(http://www.cizgifilmizlesen.com/uploads/img/L/road-runner-ve-tilki.jpg)

Dow down 300
WTI down to $98

"Markets In Turmoil" Russell 2000 Plunges Most In Over 2 Years, Dow Down For 2014

Tyler Durden's picture





 

The deer is back...

 

Stocks finally snapped and caught down to high-yield credit's warnings. The worst day for the Dow in 6 months, smashing through its 50- and 100-day moving-average. The Russell 2000 was worst on the day to end July down over 6% - its worst month since May 2012. The S&P's had almost its worst day in 6 months. Trannies dropped 3.4% on the week - the worst in 11 months. Stocks closed at the day's lows.

 

NOT OFF THE LOWS...

The week

 

All major US equity indices close lower in July... The Russell 2000's worst month since May 2012

 

The Year... Dow Red, Russell -3.6%

 

Was Yellen right after all?

 

Stocks finally caught down to credit's warnings...

 

Dow's worst day in 6 months...

 

 

Builders are worst but Discretionary and Staples are now red YTD...

 

Amid all the carnage in stocks, Treasury yields closed +/-1bps (long-end higher in yield, short-end lower)...

 

The USD was flat...

 

Commodity markets were clubbed as we suspect EU closing margin calls (and then US margin calls) hit them... WTI dropped below $98!!

 

 

Year-to-date, gold and bonds continue to lead, HY lags...

 

While talking heads were anxious to explain how there was no panic... the moves in commodities had the smell of margin calls to them as equities demanded more cover...

 

So to sum up - carnage in stocks... USD flat, bonds flat... Oil monkey-hammered and PMs dumped.

Charts: Bloomberg

Bonus Chart: "Sell In May" worked after all...

5
 
 
 

Title: Frackers Get HAMMERED!
Post by: RE on October 09, 2014, 02:42:38 PM
A JOYFUL, JOYFUL DAY!

:multiplespotting: :ernaehrung004: :wav:

I am bathing in SCHAUDENFREUDE.  :icon_mrgreen:

RE

Energy Stocks Are Crashing As WTI Plunges Under $85

Tyler Durden's picture

 

Just yesterday evening, the exuberance was palpable (in stocks)... today, with WTI collapsing (under $85) to 18-month lows, Energy stocks are being monkey-hammered across the board (S&P Energy sector -4% from yesterday highs)...

 

As oil prices collapse...

 

and the curve flattens drastically...

 

So Energy stocks are in freefall...

 

But but but the Shale Revolution!!??

 

Quick grab the cost curve charts...

Title: Re: Frackers Get HAMMERED!
Post by: RE on October 09, 2014, 02:50:09 PM
CALL ALAN!

HERE THEY COME TO SELL 'EM AGAIN
!   :icon_mrgreen: :icon_mrgreen: :icon_mrgreen:

http://www.youtube.com/v/WrxlVjZJawQ?feature=player_embedded

RE
Title: Re: Wile E Coyote Day
Post by: MKing on October 09, 2014, 04:52:28 PM
"Markets In Turmoil\" Russell 2000 Plunges Most In Over 2 Years, Dow Down For 2014</h1>

Not enough. We need more. LOTS MORE!!

Give us 10,000.

GIve us 6000.

PLEASE!!!!! We need the herd running so hard, and so fast, that they don't even stop to THINK about slowing down…so come on people!!! Sell! Sell! Sell!! You are sheeple, so you just do what sheeple do!

(http://amal.net/wp-content/uploads/2014/01/hazard-poison-radioactive.jpg)
Title: Re: Wile E Coyote Day
Post by: RE on October 09, 2014, 05:41:09 PM
You are sheeple, so you just do what sheeple do!

You are insane.  Seek Professional Help.

Sheeple don't own stocks.  Only Pigmen and Institutional Investors own stocks.  ::)

(http://doodledujour.com/files/posts/1028/cuckoo-for-cocoa-puffs.jpg)

RE
Title: Re: Wile E Coyote Day
Post by: RE on October 09, 2014, 06:21:38 PM
Macho Graphics of Oil Firefighters get DNFed.  :icon_sunny:

(http://www.doomsteaddiner.net/blog/wp-content/uploads/2013/08/trash.gif)

RE
Title: Re: Wile E Coyote Day
Post by: jdwheeler42 on October 09, 2014, 09:06:26 PM
"Markets In Turmoil\" Russell 2000 Plunges Most In Over 2 Years, Dow Down For 2014</h1>

Not enough. We need more. LOTS MORE!!

Give us 10,000.

GIve us 6000.
Indeed... we need the Dow to equal the price of one ounce of gold.

THAT is when the REAL (i.e. inflation-adjusted) bear markets end.
Title: Satan's Fat Finger Deep 666's the Markets
Post by: RE on October 09, 2014, 10:57:05 PM
Pure coinkidink of course.  Nothing to see here, Please Move Along...  :evil4: :evil4: :evil4:

RE

Did Today's "Satan Signal" In S&P Futures Give The 'All-Clear' For Selling To Begin?

Tyler Durden's picture



 

Even Bob Pisani knows by now that the European Close seems to create a trend-reversal moment intraday that few machines (and even fewer humans) are willing to fight. Whether this is remnants of short-term cycles found due to POMO or just a drop in liquidity is unclear; but what is clear, it happens, and all too regularly... except today. After a notably weak start to the day, the machines were just getting revved up for the 1130ET reversal to kick in and lift the market back to VWAP when a curious thing happened... "someone" canceled-and-replaced orders for 666 contracts 26 times in the 1130ET to 1200ET period... and selling accelerated lower, no reversal, to close at the lows on heavy volume.

 

 

Thanks to the incredibly detailed work of Nanex's Eric Hunsader, we can see the 'secret' signal that only the HFTs would have been capable of seeing...

For a sense of how out of place this was, here is the quote size histogram for that period:

 

We are sure this is nothing... just pure coincidence that on the 4th most active trading day in history and on following a huge surge day in stocks not trusted by any other asset class, someone would send 26 separate times in a few minutes orders for 666 contracts.

Only a tin-foil-hat-wearing digital dickweed would see anything odd about that: for everyone else this is merely yet another market anomaly that is best left unmentioned.

*  *  *

Oh, one more thing, this all happened just after VIX 'fat-fingered' spike down and VXX volume surged, launching today's selloff.

Title: Re: Big Slide v2.0 Begins
Post by: agelbert on October 09, 2014, 11:02:18 PM
   (http://www.createaforum.com/gallery/renewablerevolution/3-200714183543.bmp)
Title: Re: Big Slide v2.0 Begins
Post by: g on October 10, 2014, 04:32:30 AM
Quote
Sheeple don't own stocks.  Only Pigmen and Institutional Investors own stocks.  ::)

Hi RE, While I realize you were trying to convey a message the the wealthy own a large part of the nations wealth, this statement is not factual.

The little guy does own stocks, millions upon millions of them through 401K's, Pension Plans, Esops, Mutual funds, Etf's etc.

The poor family people that saw their nest egg for retirement destroyed by the last great market crash was a true tragedy, and it will happen again. They are the hapless victims of these Wall Street bastards and hedge fund manipulators.

May I pose my point with just a brief question?

What is a worse tragedy; a big fat Porky Pig going from 100 million to 50 million on paper, or some poor bastard that slaved all his life in a laborious job to accumulate 100 grand in a 401k to supplement his social security check and give him a small protective stash against inflation and medical expenses the elderly always mange to accrue, dwindle to forty or 50 grand in a big market break? May I also point out that taxes have to be paid on that meager sum when they are withdrawn from the plan.

Clearly the pig, in my view, is pissed off and defers buying a new Rolls for a year or two, while the little guy has been effectively wiped out.

In the America of today a stock market crash hurts most groups of folks, and as usual the poorest the hardest.
Title: Re: Big Slide v2.0 Begins
Post by: RE on October 10, 2014, 04:46:13 AM
Quote
Sheeple don't own stocks.  Only Pigmen and Institutional Investors own stocks.  ::)

Hi RE, While I realize you were trying to convey a message the the wealthy own a large part of the nations wealth, this statement is not factual.

GO, in point of fact around 50% of the population has ZERO stock holdings of any sort, even in Pension Funds and so forth because most people at the lower end do not work in companies that offer pensions of any sort. Walmart, etc.

Above that line, the next 30% may have some stock market exposure because their Pension Fund is invested in stocks, but these folks have absolutely ZERO say in how the money is invested.  That includes all your Public Union Pension Funds like Calpers which are run by still more Pigmen on the take.

Then consider all the recent college graduates who still don't have good jobs.  You think any of them have any stocks?  Why don't you go ask the stock boy at your grocery store how many stocks he owns, or the cashier?  Ask the Taxi Driver, ask the Starbucks Barrista.  None of these folks own stocks.

A Stock Market crash will affect people of your age who have taken savings and dropped it in on the Ponzi.  It does not affect people not invested in it directly, which really is most people.  It will only affect them because the economy will crash around it, not because they lose their savings.  Most people simply do not have savings.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on October 10, 2014, 04:56:11 AM
RE, I hear you but that 30% you mention is close to 50 million citizens. While you may consider their participation in the market meager compared to the rich piggies, it is, you fail to realize that that tiny slice of the pie is all they have.

It is all about relative importance and size of the stash. May I again make my point in  a slightly different manner, 50 grand  most likely represents the life's savings of the 30% as you call them, while being mere chump change to a Porky.
Title: Re: Big Slide v2.0 Begins
Post by: RE on October 10, 2014, 05:06:31 AM
RE, I hear you but that 30% you mention is close to 50 million citizens. While you may consider their participation in the market meager compared to the rich piggies, it is, you fail to realize that that tiny slice of the pie is all they have.

It is all about relative importance and size of the stash. May I again make my point in  a slightly different manner, 50 grand  most likely represents the life's savings of the 30% as you call them, while being mere chump change to a Porky.

If you do happen to be amongst the segment of the populations with a Nest Egg in the $50K range, and say got an 80% drop oin the markets taking it down to $10K, obviously you are in a worse position than a Pigman with $500M who sees his Nest Egg cut to $100M.  Average J6P saver is hurt much worse than the UBER RICH in this typical collapse scenario.

However, this is not a typical collapse scenario as I see it.  i believe over time  here the paper wealth represented by stocks and bonds will go to precisely ZERO. At which point it makes no difference if you have $50K or $50M in stocks, because they all are worth ZERO.  Think Confederate Dollars.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on October 10, 2014, 05:15:35 AM
Quote
Think Confederate Dollars.

RE

I do, CONSTANTLY.  :icon_mrgreen:

                                                     
It's all Toilet Paper, Confederate Money
It's all Toilet Paper, Confederate Money

Title: Re: Big Slide v2.0 Begins
Post by: RE on October 10, 2014, 05:22:03 AM

I do, CONSTANTLY.  :icon_mrgreen:

I know you do.  The point here is that all Stocks and Bonds are Fiat, they hold no more intrinsic value than the dollar does.

Far as Gold goes, it holds value based on a belief system of Gold Bugs.  In the kind of crash I forsee, it is only marginally better than the Fiat.

Only time will tell though if I got it pegged right.  So far so good though.

RE
Title: A Bad Week to Stop Sniffing Glue for Frackers & Pigmen
Post by: RE on October 10, 2014, 08:10:27 PM
http://www.youtube.com/v/VmW-ScmGRMA?feature=player_detailpage

RE

Dow Turns Negative For 2014: Stocks Suffer Worst Week In 3 Years

Tyler Durden's picture



 

Quite a day...

Dow Transports -6.9% - worst week in over 3 years - closed under 200DMA

Dow -2.6% on the week - given up all its gain year-to-date

Nasdaq -4.4% on the week - worst week in 30 months

S&P cash trades down to its 200DMA

VIX 40% on the week to 21 - 2nd biggest week in over 4 years, highest close in over 8 months

Treasury yields close at 2014 lows, down 10bps (30Y) to 17bps (5Y) but the modest steepening still leaves 2s30s under 260bps, flattest since 2012.

30Y Yields hit a 3.02% handle - 17 month lows; 10Y yields back under 2.30% - 16 month lows

The USDollar rallied for the 2nd day but ended the week -0.8% - the first losing week in 12 weeks and worst week in 6 months. USDJPY sold off the most in 14 months this week.

Gold 2.7 - best week in 6 months; Silver 2.9% - best week in 4 months

WTI Crude plunged 4.6% - worst week in 9 months; 2-week collapse 8.5% is biggest sicne June 2012.

*  *  *

But the fundamentals are still in tact?

*  *  *

Dow 16,576 12/31/13 close - Year-to-date, things are getting ugly fast..

 

Dow closed below its 200DMA

 

S&P closes at 200DMA

 

And S&P 500 futures kept free-falling after the cash close...

 

And off the post-FOMC highs...

 

On the week

 

VIX's 2nd biggest week in over 4 years...

 

VIX on the week...

 

and VIX on the day - with another fat finger...

 

Financial stocks are tumbling back down to credit...

 

Once again stocks tried to escape the bond reality (6 times today) but failed every time...

 

Treasuries rallied today ending the week notably lower in yield but steeper...

 

The USDollar rallied for the 2nd day but the 0.9% drop on the week is the worst in 6 months... This week's USDJPy drop was the biggest in 14 months

 

Oil slipped 4.25% but copper, gold, and silver all rose...

 

High yield credit spreads are at one-year highs... with IG credit up-in-quality trades continuing...

 

And stocks have a long way to fall in the short- and medium-term to catch down to credit reality

 

Title: Big Slide v2.0 Begins: Futures look Ugly this Week
Post by: RE on October 13, 2014, 01:17:56 AM
Looks like it will be a real challenge this week for the PPT to keep the markets levitating.  Aussie Stock market is busted also, and major liquidity crunch over in Eurotrashland.

RE

Futures Slide, Take Out August Lows, Russell 2000 Almost 1000

Tyler Durden's picture





 

Whether it is the lack of any favorable news out of China (in fact, quite the contrary), which the BTFDers on Friday were praying for, or the worsening of the global Ebola pandemic with not only a second confirmed case hitting Texas but panicky reports of Ebola infections from Boston all the way to Los Angeles, or simply the lack of any words of encouragement from the Fed, the Friday rout has continued into the early Sunday night trading, and as of moments ago, the December E-mini future dropped to 1880.5...

 

... taking out the August lows, and sliding to levels last seen in May.

The selloff for now appear mostly driven by yet another carry currency unwind, with USDJPY sell stops triggered in morning trade, according to an interbank FX dealer based in Sydney, cited by Bloomberg. The other carry pairs aren't doing much better either.

The good news: the S&P still has about 70 points to drop for the S&P500 to go red for the year, a luxury the Dow Jones does not have, as it is sliding ever deeper into the red for 2014.

But the most dramatic plunge continues to be in the Russell 2000 which just can't find any support, is back to mid-2013 levels, and at this rate will be renamed the Russell 1000 by early morning:

And whereas previously this kind of market Risk Off drubbing would be a perfect storm to send gold higher, for now the yellow metal is sitting very much unchanged from the Friday close. That will change soon, as either margin driven liquidations will force even more GLD paper selling, or finally the flight to safety will override the relentless commercial/central bank/BIS rigging of paper gold and send the price in any FX terms surging.

4.88889
 
 
 

Title: Big Slide v2.0 Begins: COMETH THE BLOODBATH
Post by: RE on October 15, 2014, 05:51:50 AM
THE MARKETS HAVE CONTRACTED EBOLA.  They are Bleeding out the Eyeballs this morning.

KATY BAR THE DOOR & BRING ON BEN LICHTENSTEIN!!!!

http://www.youtube.com/v/WrxlVjZJawQ?feature=player_embedded

RE

US, European Stocks Collapse As Oil Tests $80 Handle, 10Y Hits 2.15%

Tyler Durden's picture



 

Blood in the leveraged momo streets. Nikkei was crushed overenight as USDJPY could not hold 107. European stock indices are tumbling led by weakness in Spain, Portugal, and Italy. The peripheral bond markets are also getting crushed (spreads wider by 15-20bps). This has bled over into US equities with Nasdaq leading the way lower. Treasury yields are collapsing (10Y tests below 2.15%). The USD is modestly lower but oil is continuing to collapse testing the $80 handle for WTI.

 

What the bond markets have been warning...

 

Nikkei and USDJPY sliding...

 

European stocks and bonds ugly...

 

And US equities testing multi-month lows across the board...

 

WTI tests into the $80 handle - crushing the Shale dreams for many...

 

As rates retrace over half the 2012-13 tantrum sell off...

 


Title: Big Slide v2.0 Begins: Greeks Get Greeked
Post by: RE on October 15, 2014, 06:01:31 AM
This one is looking like the REAL THING now...

Amazing COINKIDINK it occurs just when I made the move to the New Digs... :icon_scratch:

Greeks have hit the wall at Thermopylae.

RE

Greece Is Crashing

Tyler Durden's picture





 

As we explained in detail yesterday, between governments hopes to exit the bailout program early (in order to save their election) - which the market does not like the idea of - and fears over the reality of OMT, Greek markets are tumbling. Greek stocks are down over 9% - the biggest plunge in 6 years and bond yields are surging... it appears the market is demanding Draghi get back to work as the "whatever it takes" gains have been halved (Greek stocks -35% from March 2014 highs).

 

Greek stocks are down 8% and have retraced at least 50% of the "whatever it takes" gains...

 

And bond yields are surging...

Title: Re: Big Slide v2.0 Begins
Post by: g on October 15, 2014, 06:43:02 AM
Real carnage on wall Street today. Dow down 350 no typo 350 and has been only open a short while. Gold holding well up 7 dollars as I write, up around 50 from it's lows when the  carnage began a few weeks ago.

While predicting the stock market is a futile task, especially with central bank rigging, this decline is getting most worrisome to my mind. The all time record amount of margin debt is most troubling to me. :'(
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on October 15, 2014, 06:44:44 AM
The move today looks most extreme in bonds to me...Look at the change in the US 10yr treasury yield.
Title: Re: Big Slide v2.0 Begins
Post by: g on October 15, 2014, 06:46:56 AM
10 year yields below 2 % on US Treasuries. No doubt a big flight into perceived safety.

Gold rally strongly now up over 12 dollars, no doubt a flight to safety as well, could be a historic day coming up.   :o
Title: Re: Big Slide v2.0 Begins
Post by: Surly1 on October 15, 2014, 07:38:25 AM
10 year yields below 2 % on US Treasuries. No doubt a big flight into perceived safety.

Gold rally strongly now up over 12 dollars, no doubt a flight to safety as well, could be a historic day coming up.   :o

Am at work, reading the top ten posts. You and JoeP have got me to turn on my TV in the office, which is an extreme rarity. As RE posted, Do the markets have Ebola?

As to the real course of the disease... I view the MSM as the propaganda arm of TPTB, to learn what the government wants us to believe. Since we are clearly not willing to do the one thing that has been demonstrated to work-- quarantine-- I have to believe that TBTP want the diease to run its course.

Did anyone post this yesterday-- that in Atlanta, the county threatened to disconnect Emory (where three Ebola patients are being treated) from sewer lines if Ebola wastes went down the drain. The company that hauled medical trash to the incinerator refused to take anything used on an Ebola patient unless it was sterilized first.

http://www.nytimes.com/2014/10/14/us/questions-rise-on-preparations-at-hospitals-to-deal-with-ebola.html?_r=0 (http://www.nytimes.com/2014/10/14/us/questions-rise-on-preparations-at-hospitals-to-deal-with-ebola.html?_r=0)
Title: Re: Big Slide v2.0 Begins
Post by: g on October 15, 2014, 10:25:08 AM
Markets in free fall as I write. Dow down over 400 as rally attempt fails, gold up 11 bucks and ten year yield below 2%.

Could be a historic day for markets.
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on October 15, 2014, 12:55:31 PM
Markets in free fall as I write. Dow down over 400 as rally attempt fails, gold up 11 bucks and ten year yield below 2%.

Could be a historic day for markets.

Yellen to the rescue -

http://www.zerohedge.com/news/2014-10-15/fed-hits-rumor-panic-button-sources-confirm-yellens-confidence-us-recovery (http://www.zerohedge.com/news/2014-10-15/fed-hits-rumor-panic-button-sources-confirm-yellens-confidence-us-recovery)
 
Title: Big Slide v2.0 Begins: BLACK WEDNESDAY
Post by: RE on October 15, 2014, 05:03:17 PM
In October, of course.

Who couldanode?

Elvis.  First Triangle of Doom article on Economic Undertow in 2012.

(http://www.economic-undertow.com/wp-content/uploads/2014/10/Triangle-of-Doom-100714.png)

RE

Liquidation-nado: Stocks Crash-And-Thrash As Bonds Pump-And-Dump

Tyler Durden's picture



 

The headlines... (from the most extreme levels)

And then - thanks to massive HFT order/cancels, squeeze of 'shorts' as long-short funds liquidated, and a well-placed random headline proclaiming Yellen confident - we ripped back green as if none of it ever mattered... (ignoring WMT guiding notably lower and Putin's nuclear sabre rattling)

BUT... thanks to missed earnings and guidance, all the major indices dropped 1% after hours...

 

*  *  *

Today, summarized in pictures

*  *  *

Title: Re: Big Slide v2.0 Begins
Post by: Ka on October 15, 2014, 07:18:16 PM
Well, today's drops were still in the 1% range, so it won't go down as Black Wednesday. But it sure does look like the beginning of the end. And why do I suspect it will be spun as Ebola's fault -- ignoring the debt pile, the Triangle of Doom, regulatory capture, etc., etc.

And just for good measure, I've got Hurricane Ana headed my way -- due Saturday.
Title: Re: Big Slide v2.0 Begins
Post by: g on October 15, 2014, 09:26:45 PM
Well, today's drops were still in the 1% range, so it won't go down as Black Wednesday. But it sure does look like the beginning of the end. And why do I suspect it will be spun as Ebola's fault -- ignoring the debt pile, the Triangle of Doom, regulatory capture, etc., etc.

And just for good measure, I've got Hurricane Ana headed my way -- due Saturday.

Hi Ka, an amazing coincidence. Have spent over an hour on the phone this evening discussing this very act of deception and scapegoating by TPTB with a close friend. The nerve of them trying to pin this developing horror, which started months ago with the crash of the Euro and violent drop in the oil price on Ebola.

You can expect the total mismanagement of the economy to be blamed on this virus, and the controlled puppet MSM to trumpet it as well.

"The Market Has Caught EBOLA," is the new catch phrase for the dim.  :'( :'(

It is too disgraceful and sad to comment on further, it's so depressing to see the scoundrels hide behind a virus to take the spotlight off of their behavior.

As for your comment about the market closing still in the 1% range and nor qualifying for Black Wednesday status, very true. That "Goosing" of the market, done no doubt by the Fed at the close, was viewed with much skepticism by serious market participants. As a keen minute by minute  observer of the markets for many decades let me assure you from experience that today was a most unusual day and a harbinger of great stress and problems within the system. The immediate crash of 350 points at the opening, the plunge protection team induced rally, and then subsequent re crash to over 400 points before the last manipulative action at the close were very bad omens indeed. One misstep here, if it hasn't already happened, could cause an epic crash and panic for sure. The obscene amount of margin debt, as well as the yield on the 10 yr plunging to under 2% today are very troubling background music to ponder this evening.

Good luck on the hurricane, hunker down and stay well Ka.
 
Title: Re: Big Slide v2.0 Begins
Post by: RE on October 15, 2014, 11:19:06 PM
Well, today's drops were still in the 1% range, so it won't go down as Black Wednesday. But it sure does look like the beginning of the end. And why do I suspect it will be spun as Ebola's fault -- ignoring the debt pile, the Triangle of Doom, regulatory capture, etc., etc.

And just for good measure, I've got Hurricane Ana headed my way -- due Saturday.

True, today's drop doesn't qualify as a full blown single day crash, however as a continuation from last week we're already in "correction" territory, and the fact the PPT seems unable to stop the slide so far indicates to me we have a ways more to go here.

With WTI now at $80, the pressure really has to be on the debt held by the energy companies.  All it will take for a full on run is for a medium to large size company to go belly up and the Dyke will break IMHO.

Rest of the week should be entertaining.  Futures don't look good for tomorrow once again.  Methinks there are a lot of Panicked Pigmen out there tonight.

Good luck with Ana.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on October 15, 2014, 11:40:10 PM
Quote
Methinks there are a lot of Panicked Pigmen out there tonight.

Perhaps, but most likely little Piggies, not the Big Porkies.

It is my experience that they are usually hedged, have sold options against their positions to generate additional income, have constant insurance positions with puts on the S&P etc. Many hope for crashes so they may score with big purchases at what they perceive to be cheap prices after a landslide, MKing has constantly alluded to his wish for another crash so he may score again.

This of course has nothing to do with the fact the market is on the ropes, my only thought is the big pigs are probably sleeping well.

The hot shots gambling with thin margins, and highly leveraged hedge fund mad men playing with other people's money, OPM is what they call it, are a different matter entirely.  In my opinion that is where the nail biting and problem is at this current market juncture.

Who knows, we have witnessed many of these hooks in the market before that just seem to end as fast as they begin, and they all set off the alarm bells loudly. This one does appear quite spooky however, not making light of it by any means. :-\
Title: BLOODBATH II- Can U Say "Black Thursday"
Post by: RE on October 16, 2014, 03:44:36 AM
We are set up for a HORROR SHOW today.  Stay glued to your Bloomberg Terminal, this one is not to be missed.

Shorts and Hedging will not save a full on Margin Call on the Energy players.  Nowhere to run, nowhere to hide.

RE

Everything Breaks Again: Futures Tumble; Peripheral Yields Soar, Greek Bonds Crater

Tyler Durden's picture



 

Yesterday afternoon's "recovery" has come and gone, because just like that, in a matter of minutes, stuff just broke once again courtsy of a USDJPY which has been a one way liquidation street since hitting 106.30 just before Europe open to 105.6 as of this writing:

This comes after futures actually being green for the session earlier in the day. The catalyst this time, however, is not some US fund liquidating or repositioning, but all Europe:

Only this time Europe is once again broken with periphery yields exploding, after Spain earlier failed to sell the maximum target of €3.5 billion in bonds, instead unloading only €3.2 billion, and leading to this:

And the punchline, as usual, is Greece, whose 10 Year is now wider by over 1% on the session(!), to just about 9%.

One-handed golf clap to all those who used other people's money to buy those Greek 5 Year bonds a few months ago.

In short, Europe is a sea of red, only unlike before when the bid for safety was peripheral bonds, this time the puking is also sending the periphery crashing, something we last saw just before Draghi's "whatever it takes" speech, which means that the market has finally called the ECB's bluff and demands that after 2 years of jawboning, that the ECB actually put the printer where its mouth is. Good luck with that.

Let's not forget that oil is also still sliding and we have yet to see some major macro fund liquidate as a result of commodity margin calls. The wait will hardly be too long at this point.

Oh, and we forgot to mention that today Dallas well announce State of Disaster (aka martial law lite) and activate an emergency plan over its third Ebola case. So all those BTFD, best of luck to you too.

Bulletin Headline Summary

FIXED INCOME

After yesterday's sell-off in US equities abated ahead of the Wall Street close, European equities opened on firmer footing - albeit this was very short-lived. Greek woes swirled further, as the Greek 10yr yield jumped above 8.5% for the first time in 8 months on continued speculation that Greece's early IMF bailout exit will be less-than smooth. The resulting market turmoil in Greece rubbed off on today's Spanish bond auction, as the Spanish Treasury failed to sell their targeted EUR 3.5bln in 2024 and 2028 debt. The SP/GE 10yr government bond yield has widened in response, wider by 22bps today as the Spanish 10yr yield climbs above 2.3%.

The Euribor curve continues to bear-flatten after the ECB confirmed they are yet to make a decision on Greece's collateral requirements at the ECB, despite discussing doing so as earlier reports suggested the ECB could accept poorer quality collateral in order to access liquidity.

EQUITIES

Greek equities have fallen sharply, dragging both Italian and Spanish stocks with it, as a number of Italian banks are stopped out of trade - limit down. Furthermore, lacklustre corporate earnings updates from Nestle and Roche as well as AbbVie turning against Shire dropped blue-chip stocks across the continent.

Corporate earnings updates today include Goldman Sachs, Google, Philip Morris International and Schlumberger all due today.

FX

A resumed decline in industrial metals (Chinese iron ore futures fell 4% overnight) has knocked commodity-based currencies, with CAD, AUD and NZD all underperforming. EUR/USD saw some mild upside after Eurozone Core CPI was revised higher to 0.8% vs. Exp. 0.7%, allowing the pair to reclaim the 1.2800 level ahead of the US crossover. Alongside the downside in European equity futures, the JPY has benefited further, gaining no solace from comments out of BoJ’s Kuroda overnight – who reiterated the Bank of Japan will continue with QQE until their price target is reached.

COMMODITIES

WTI and Brent crude futures again trade softer, with WTI crude briefly breaking below USD 80/bbl. Energy prices failed to find support in positive Chinese data, which overnight showed Foreign Direct Investment rising 1.9% vs. Exp. -14.0%. Furthermore, Yesterday’s API inventories showed a significant build of 10200K vs. Prev. 5100K. The Kuwaiti Oil Co. additionally appeared unphased by the recent slide in oil, as the CEO reaffirmed that the Co. are to raise production further.

* * *

Jim Reid's dramatic summary concludes the overnight recap

Where do we start this morning? Its tempting to get back under the duvet after a 24 hours like the last one, especially as after a year of renovations, my central heating is still not working properly. Anyway I grew up in a house without central heating so I'm made of sterner stuff. As a starter I think its fair to say that after the US opened yesterday it was not wise to be long Greek government bonds and short US Treasuries. In 10 years the former rose 82bps on the day and the latter fell an incredible 34bps at the lows. It was the worst day for Greek Government bonds since July 23rd 2012 (more on this later) and had the US intra-day move stuck, it would have been the biggest yield move on a % basis relative to the starting yield in history.

However it didn't stick and the story of the day for US treasuries was one of a sharp post retail sales rally, then a flash rally, then a flash crash and then a slow but steady sell-off. At 7am NY time 10 years were sitting calmly at around 2.20% before rallying hard to 2.05% by 9am (post weak retail sales) and then 2% at 9.34am. At 9:38am though they hit 1.86%!!! They then reversed back to around 2.04% 15 minutes later before selling off to 2.14% at the close (currently lower this morning at 2.08%). A wild trip that suggests a large liquidation, capitulation or huge technical trading level breached. In markets that have a lower structural liquidity than pre-crisis these things can happen but something big in positioning must have happened yesterday.

With all this going on one wonders what probabilities you'd get that the Fed actually does QE again before it raises rates. I'm sure if you'd have suggested this a month ago many would have thought that there was more chance of Elvis being found living a relaxing retirement on the moon. As a minimum markets have now priced out a 2015 rate hike from the Fed which seems a sensible response. Our US rate strategist Dominic Konstam hosted a call last night and in it he suggested that a minimum pre-condition for stability was for the Fed to validate the re-pricing of the interest rate curve. Or in other words if they stick close to the message of the dots then to paraphrase Dominic it would be a disaster for risk assets. So we perhaps need to hear more dovish comments from the Fed along the lines of Fischer's remarks at the IMF over the weekend and others like Williams back on Tuesday.

The other (and bigger) problem is clearly in Europe. Before we get to Greece the further collapse in 5yr5yr breakevens suggest a market running out of confidence in the ECB's ability to be able to do enough to arrest deflation. In the pdf today we show the history of this. Before mid-August we had only fleetingly traded below 2% in the 10 year history we have. It did manage to go back above 2% again in early September but since September 9th we've been back below 2% with the move accelerating over the last week. We closed at around 1.75% yesterday having hit 1.70% intra-day. This is a key gauge that Draghi looks at although he did downplay it a little in the last ECB meeting. However whichever variable he looks at this morning its fair to say that he will see a market that is not confident the ECB can deliver anywhere near enough to turn things around.

More days like yesterday will surely produce a policy response soon though. If it were to prompt a fiscal break through in Europe then the market would really like that.

Onto Greece and markets struggled yesterday on the back of ongoing political issues in the country. The Athex closed down -6.3%, its worst day since 29th October 2012, although at one point it was down more than 10%, making it the biggest intra-day drop in six years. At the same time Greek 10Y debt closed the day 82bps wider, its biggest one day widening since 23rd July 2012. Greek assets have been struggling recently as its current embattled government has looked ever more likely to collapse before their official mandate expires in 2016, even as the Prime Minister Antonio Samaras has decided Greece will end its IMF bailout programme in December, 15 months early. The anti-bailout Syriza party has seen its polling lead grow ever larger over the current dominant governing party, New Democracy. The latest poll, conducted between October 9-13 by GPO, put Syriza in a 6.5% lead over New Democracy. A general election will take place if the governing parties New Democracy and Pasok fail to secure 180 votes in parliament - the minimum needed to elect a new head of state in February as the incumbent is set to retire. The Greek PM told the Cabinet yesterday that he still expects elections in 2016 as scheduled and remains committed to his current reform programme. Almost irrespective of the final outcome of current political worries it seems they could well remain unresolved well into Q1 next year with the February vote on Greece’s new head of state the most obvious catalyst for change on the horizon.

Moving on to other parts of the European market it was also a historic day to some degree. The 10yr German Bund and French OAT yields fell around 7-8bps to fresh lows of 0.75% and 1.13%, respectively. European equities endured a difficult day with the Stoxx600, DAX, CAC, IBEX, and FTSEMIB down -3.2%, -2.9%, -3.6%, -3.6% and -4.4%, respectively. It was the 7th consecutive down day for the Stoxx600 and it was also the biggest loss for Italian markets since February 2013. On the other side of the Atlantic, the official close of S&P 500 (-0.81%) also failed to tell the whole picture. The index saw a 2.9% peak-totrough intraday move yesterday which at one point actually erased all of its YTD gains. The VIX index closed at a near 29-month high of 26.25 (crossed 31 during intraday). Interestingly Energy (+0.43%) stocks posted modest gains despite the further drift lower in oil prices. Brent fell 1.5% to test the lows of US$83/bbl into the close and there seems to be little good news going on for the commodity right now. US Financials (-2.0%) were the biggest drag to the market in what was the worst day for US bank stocks in nearly 2 years as low rates raised fears of margin concerns.

Indeed there wasn’t much good news anywhere for markets yesterday. Ebola concerns are also gaining more media focus in the US after second nurse Amber Joy Vinson was tested positive for Ebola in Dallas after nursing a Liberian patient. This raised renewed concerns about the protocols for containing the outbreak and has prompted US officials to call for more aggressive monitoring of incidents where the virus could potentially spread. Data flow failed to offer much relief either. The Fed’s Beige Book reported modest-to-moderate growth conditions but the NY Fed survey fell by 21.3pts in October (second biggest monthly fall in recorded history) whilst Retail sales print were also disappointing (-0.3% mom v -0.1% expected). PPI was also softer than expected which is broadly in line with the trend of prices we are seeing globally.

Asian markets are not surprisingly following the weaker lead from US yesterday. Chinese equities are the only major equity markets trading firmer on the day probably helped by data showing that aggregate credit growth rose to a 3 month high in September. Power consumption in China rose 2.7% yoy in September, which although is an improvement from the negative 1.5% print in August, it is still the second worst reading in the last 18 months. Away from China, bourses in Tokyo, Sydney, Seoul and Hong Kong are down -2.2%, -0.4%, -0.3% and -0.5%, respectively as we go to print. The Nikkei is now at around a 6-month low. The Dollar is weaker against key currencies. Asian credit spreads drifted wider given the broader risk off tone. Bank of China’s US$6.5bn AT1 printed overnight and is now quoted higher at 100.40/100.65 after having dipped below par at the open.

Looking at the data docket ahead we have initial jobless claims, industrial production, NAHB housing market index, and the Philly Fed in the US. Data will still be important but with the current disconnect between what’s priced in and the Fed’s dot plot, we will be increasingly sensitive to any Fed communication in the weeks and months to come. The next key event will be the 2 day FOMC meeting concluding on the 29 October (no press conference scheduled) but well ahead of that we have four Fed speakers today. Fed’s Plosser (1pm UKT) will speak on the economic outlook and will take questions from reporters. Fed’s Lockhart (2pm UKT) will speak on workforce development at a university conference co-sponsored by the Atlanta and Kansas Fed. Kocherlakota’s speech today is “Clarifying the Objectives of Monetary Policy” (3pm UKT) and finally Fed’s Bullard (5.45pm UKT) will speak on US demographics (Q&A available). After all this the focus will be on Yellen as she speaks to a Boston Fed conference on “Inequality of Economic Opportunity” tomorrow so stay tuned for that.

Let's see what the next 24 hours brings!!

Title: Re: Big Slide v2.0 Begins
Post by: Surly1 on October 16, 2014, 04:19:02 AM
OK, GO, what's your over/under for today? What's your crystal ball say?

(Also, "the markets have Ebola" may be a lazy headline, but the timing makes it irresistible, does it not? And financial markets have always hated uncertainty, and Ebola represents nothing if not uncertainty...)
Title: Big Slide v2.0 Begins: GOD of Oil Trading?
Post by: RE on October 16, 2014, 04:41:14 AM
Do you folks recall that in September the GOD of Oil Trading Andy Hall went ALL IN on $150/Barrel Crude?

http://www.zerohedge.com/news/2014-09-03/god-crude-oil-trading-goes-all-crude-150-bet (http://www.zerohedge.com/news/2014-09-03/god-crude-oil-trading-goes-all-crude-150-bet)

Can U IMAGINE the problems Andy is having unloading those Futures Contracts today?????

You can't hedge positions that big. He trades on margin like everyone else.  He HAS to liquidate.  Forced liquidation in an illiquid market is a DEATH SENTENCE.

Watch out for Falling Stockbrokers.  If this continues, it will be Raining Pigmen.  :icon_sunny:

http://www.youtube.com/v/l5aZJBLAu1E?feature=player_detailpage

Check the DOW at Just About Half Past Ten EST time tomorrow morning.  I'll bet it's RAINING PIGMEN.  :icon_sunny:

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on October 16, 2014, 04:55:11 AM
OK, GO, what's your over/under for today? What's your crystal ball say?

(Also, "the markets have Ebola" may be a lazy headline, but the timing makes it irresistible, does it not? And financial markets have always hated uncertainty, and Ebola represents nothing if not uncertainty...)

Hi Surly, I have no crystal ball for the daily results of a rigged game. My honest opinion is that left to it's own devices the market wishes to go down, that seems obvious to me. What the Fed can and do to prop it up, or if they can at this point is another matter, and I am clueless as to their current intentions.

The Ebola situation is serious, but there is always something for them to use as a scapegoat for creating the debt ridden disgrace of a financial predicament we are in. They have no character and cannot accept responsibility for their ineptitude.

It's either a drought, OPEC and oil prices to high, swine flu, a hurricane that hits the east coast, military conflict in the middle east, ISIS, Bengazi, anything happening at the time to pin the blame on for their buffoonery and meddling with the economy and markets.

The current drop underway, in my opinion has little to do with Ebola and much to do with the Fed trying to tip toe away from monetary easing, the blatant lies about the great recovery, housing recovery as well, falsified job figures, sub prime auto loans, the Euro crash, Greek bonds at 9% again, gold price manipulations,  are all coming home to roost.

I can only tell you positively that I am scared shit less thinking of what can happen here, and sure hope it doesn't.  :-\

Title: WTI BREAKS THE $80/Barrel BARRIER!!!!
Post by: RE on October 16, 2014, 05:01:12 AM
Quote
The 10-year Treasury yield dropped 12 basis points to 2.01 percent at 7:30 a.m. in New York. The Stoxx Europe 600 Index fell 2 percent and Standard & Poor’s 500 Index futures declined 1.1 percent. West Texas Intermediate crude slid as much as 2.5 percent to $79.78. The yield on 10-year Greek bonds jumped 109 basis points and Spain’s yield increased 20 basis points. The dollar gained 0.7 percent to $1.2747 per euro.

They are Heaving the Technicolor Yawn in the Fracking World today!  :icon_sunny:

(http://www.reactiongifs.us/wp-content/uploads/2013/02/family_guy_barfing.gif)

SHAUDENFREUDE is better than SEX!  :icon_mrgreen:

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on October 16, 2014, 05:08:54 AM
Quote
Do you folks recall that in September the GOD of Oil Trading Andy Hall went ALL IN on $150/Barrel Crude

I certainly do RE and he can't be a happy camper presently.

Let's both you and I be aware however, that if these frackers don't go belly up here from the debt loads they are carrying and constant need for fresh dough, something is wrong with our theories as well.

To be honest I expected a major bankruptcy by now or certainly soon, any ideas?

They just gotta be bleeding red ink me thinks. :icon_scratch:
Title: Re: Big Slide v2.0 Begins
Post by: RE on October 16, 2014, 05:22:43 AM
Quote
Do you folks recall that in September the GOD of Oil Trading Andy Hall went ALL IN on $150/Barrel Crude

I certainly do RE and he can't be a happy camper presently.

Let's both you and I be aware however, that if these frackers don't go belly up here from the debt loads they are carrying and constant need for fresh dough, something is wrong with our theories as well.

To be honest I expected a major bankruptcy by now or certainly soon, any ideas?

They just gotta be bleeding red ink me thinks. :icon_scratch:

Backdoor Liquidity Financing from Da Fed discount window is a possibility for the largest players, but that is Unsecured Lending and as Steve often points out renders the CB insolvent.  Besides that, it is blatantly illegal and anyone who authorizes it puts their neck on the Chopping Block.

I can't see how Da Fed could finance the medium size drillers and not get caught at the game, but these folks have borrowed up enough while the money flowed easy to carry them my guess 6 months.  So maybe they keep it contained this long, but that IMHO is best case scenario.

Da Fed is hamstrung here, they cannot QE in perpetuity and maintain the monetary system.  That is the limiting factor Hyperinflationistas did not understand when figuring QE eternity  If you want to HAVE a monetary system, you can't loan out on bogus collateral forever.

I see a major Deflationary Event erupting here.  At least those are the Signs on the Subway Wall at the moment.

http://www.youtube.com/v/dTCNwgzM2rQ?feature=player_detailpage

RE
Title: Re: Big Slide v2.0 Begins: GOD of Oil Trading?
Post by: JoeP on October 16, 2014, 05:26:39 AM
Do you folks recall that in September the GOD of Oil Trading Andy Hall went ALL IN on $150/Barrel Crude?

Frequently, what these "Gods" say they are doing is the opposite of what they are actually doing.  :icon_mrgreen:
Title: Re: Big Slide v2.0 Begins: GOD of Oil Trading?
Post by: RE on October 16, 2014, 05:39:26 AM
Do you folks recall that in September the GOD of Oil Trading Andy Hall went ALL IN on $150/Barrel Crude?

Frequently, what these "Gods" say they are doing is the opposite of what they are actually doing.  :icon_mrgreen:

That is true, but it does not affect the overall market dynamic and the total loss of value.  Already the losses are in the $Trillion$ category.

You do understand you Cannot Make Something from Nothing Principle I trust?  Overal value collapse means that betting shorts cannot payoff either, the money is not there to pay them with, it evaporates in the value loss.

Andy Hall likely has plenty sequestered off shore, I doubt he personally will be hurting anytime too soon.  However, his Hedge Fund is in the deep doo-doo.

RE
Title: Think HyperInflation is Bad? Wait till you get a load of HyperDeflation
Post by: RE on October 16, 2014, 05:50:50 AM

8 European Countries In Outright Deflation As Inflation Expectations Crash To Record Low

Tyler Durden's picture



 

Forward inflation expectations for Europe have collapsed to all-time record lows (based on 5Y forward implied 5Y inflation) as the market grows increasingly impatient at Draghi's dragging his "whatever it takes" feet on pulling the sovereign QE trigger.

 

With 8 European nations now in outright deflation, the growing political pressure on the ECB to actually "do" something is, however, equal and opposite to Germany's (read Buba's) insistence that member states have some fiscal discipline (oh and the fact that OMT may just be exactly what we always said it was - illegal and a mirage).

 

With France shunning Brussels laws directly, and Italy flouting the "hookers-and-blow" GDP adjustment to improve its debt-to-gdp ratios, is it any wonder that Germany sticks to its anti-hyperinflationary, fiscally responsible guns... But then again, as we have seen again and again with the failed European Union, beggars can be choosers as politicians are unwilling to give up their perks in favor of helping the people that voted for them (or didn't in some cases).

Title: Re: Big Slide v2.0 Begins
Post by: g on October 16, 2014, 05:52:42 AM
 
Quote
That is the limiting factor Hyperinflationistas did not understand when figuring QE eternity  If you want to HAVE a monetary system, you can't loan out on bogus collateral forever.

Not So, many of us realize it quite well. Gold Bugs especially.

This is where we might hear talk of all sorts of monetary madness.

Negative interest rates.

Time for a New Currency.

Debt Moratoriums and stretched out payments.

A new international SDR currency for paper printers to toy with.

A world currency with on omnipotent central bank or  OZ behind the curtain.

Making cash illegal.

Then of course there is the Famous Helicopter Ben Bernanke prescription for this type of problem. Forget interest rates and pumping credit into the banking system. Just print up tons of currency and drop it on their heads via helicopter.
Don't laugh, that crazy bastard was serious, and he was the head of The US Federal Reserve.  :laugh: :exp-grin: ::)

All sorts of lunacy can be expected here if things get out of control.  :icon_scratch:

                                     (http://mjcdn.motherjones.com/preset_51/yellen_630.png)   :exp-grin: :exp-laugh: ::)
                                                     


Title: Re: Big Slide v2.0 Begins
Post by: RE on October 16, 2014, 05:58:54 AM
All sorts of lunacy can be expected here if things get out of control.  :icon_scratch:
                                                   

True.  Some Lunatics might even try to use Gold Coins as Money.  ::)  LOL.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on October 16, 2014, 06:05:08 AM
Having visited a vast number of financial sites and blogs that I frequent, a panic mentality is clearly developing in my humble view. The vibes I am getting are everyone wants to get out now and ask questions later, the usual bulls appear quite timid.

We will soon find out, markets open soon and so far not looking very good going by the futures.
Title: Re: Big Slide v2.0 Begins
Post by: g on October 16, 2014, 06:13:05 AM
All sorts of lunacy can be expected here if things get out of control.  :icon_scratch:
                                                   

True.  Some Lunatics might even try to use Gold Coins as Money.  ::)  LOL.

RE

I thought you knew RE, Gold coins are money, they trade throughout the world daily every second. People who are suspicious of this fools paradise created by credit based fiat money seek refuge in the world's only real currency. It's been that way for thousands of years.

                                                 
1 oz Gold Ox
1 oz Gold Ox
Title: Re: Big Slide v2.0 Begins
Post by: g on October 16, 2014, 08:31:30 AM
Stocks Pare Losses as Fed’s Bullard Comments on QE Delay

 U.S. stocks pared losses after St. Louis Federal Reserve Bank President James Bullard said the central bank should consider delaying the end of its bond purchase program to halt the decline in inflation expectations.

The Standard & Poor’s 500 Index (SPX) slid 0.2 percent to 1,858.55 as of 10.50 a.m. in New York. The index had fallen 1.5 percent earlier as quarterly results from Netflix Inc. and EBay Inc. (EBAY) disappointed investors. The Dow Jones Industrial Average lost 29.29 points, or 0.2 percent, to 16,112.45.

“The Bullard comments were a short-term shot of adrenaline,” Chad Morganlander, a money manager at St. Louis-based Stifel Nicolaus & Co., which oversees about $160 billion, said in a telephone interview. “The overall markets are hooked on QE and liquidity being withdrawn.”

www.msn.com/en-us/money/topstocks/stocks-pare-losses-as-fed (http://www.msn.com/en-us/money/topstocks/stocks-pare-losses-as-fed)’s-bullard-comments-on-qe-delay/ar-BB9oyG6  :icon_study:
Title: Re: Big Slide v2.0 Begins
Post by: Surly1 on October 16, 2014, 09:48:55 AM
OK, GO, what's your over/under for today? What's your crystal ball say?

(Also, "the markets have Ebola" may be a lazy headline, but the timing makes it irresistible, does it not? And financial markets have always hated uncertainty, and Ebola represents nothing if not uncertainty...)

Hi Surly, I have no crystal ball for the daily results of a rigged game. My honest opinion is that left to it's own devices the market wishes to go down, that seems obvious to me. What the Fed can and do to prop it up, or if they can at this point is another matter, and I am clueless as to their current intentions.

The Ebola situation is serious, but there is always something for them to use as a scapegoat for creating the debt ridden disgrace of a financial predicament we are in. They have no character and cannot accept responsibility for their ineptitude.

It's either a drought, OPEC and oil prices to high, swine flu, a hurricane that hits the east coast, military conflict in the middle east, ISIS, Bengazi, anything happening at the time to pin the blame on for their buffoonery and meddling with the economy and markets.

The current drop underway, in my opinion has little to do with Ebola and much to do with the Fed trying to tip toe away from monetary easing, the blatant lies about the great recovery, housing recovery as well, falsified job figures, sub prime auto loans, the Euro crash, Greek bonds at 9% again, gold price manipulations,  are all coming home to roost.

I can only tell you positively that I am scared shit less thinking of what can happen here, and sure hope it doesn't.  :-\

Checking back in at lunchtime to see what's what here on the Forum. A fair and decent answer, GO. I note that the solons of the House are conducting Ebola theatre with hearings. Put me down as deeply reassured... our best minds, like Ted Cruz and Louis Gohmert, are on the case.

Quote from: GO
The current drop underway, in my opinion has little to do with Ebola and much to do with the Fed trying to tip toe away from monetary easing, the blatant lies about the great recovery, housing recovery as well, falsified job figures, sub prime auto loans, the Euro crash, Greek bonds at 9% again, gold price manipulations,  are all coming home to roost.

You are, of course, right. Add to the above the fracking Ponzi as noted elsewhere recently, and discussed by Steve Ludlum and Tom Lewis Right Here On Our Stage.

Apparently airline stocks are being crushed at midday. Little surprise there. Dow down -.3, NASDAQ off -.43, S&P 500 down -.2 at 12:46PM EDT. A lot of sideways skittering. Oddly enough, Apple is down in advace of some "big event" and the Apple online stores are temporarily closed...

Maybe time to watch Greece again.

Back to the salt mines.
Title: Re: Big Slide v2.0 Begins
Post by: g on October 16, 2014, 09:57:48 AM
Quote
You are, of course, right. Add to the above the fracking Ponzi as noted elsewhere recently, and discussed by Steve Ludlum and Tom Lewis Right Here On Our Stage.

True Surly, as well as the student loan mess I forgot and there are no doubt many others like the tapped out debt ridden consumer.

A lot of reasons for stocks to go down but very few for them to go up. Wall mart has also announced forget the Christmas season, retail in a big funk.  :-\

Title: Re: Big Slide v2.0 Begins
Post by: Eddie on October 16, 2014, 10:25:52 AM
True.  Some Lunatics might even try to use Gold Coins as Money.  ::)  LOL.


Please send any barbaric gold or silver relics you found cleaning out your cabin (postage paid) to my office and I'll take them off your hands so you won't be burdened with having to move them again.
Title: Re: Big Slide v2.0 Begins
Post by: JoeP on October 16, 2014, 03:19:40 PM
From Inconceivable (http://www.zerohedge.com/news/2014-10-16/inconceivable):

SPX Key Support Levels
SPX Key Support Levels
Title: Re: Big Slide v2.0 Begins
Post by: RE on October 16, 2014, 04:19:13 PM
(http://onemansblog.com/wp-content/uploads/2009/05/inconceivable.jpg)

RE
Title: 3 Things to Think About
Post by: RE on October 17, 2014, 12:52:27 AM
There are a few more than 3, but if your Doom Thinking Time is limited, these are good ones to start with.  Moar "INCONCEIVABLE!" in this article.  ::)

RE

3 Things Worth Thinking About

Tyler Durden's picture



 

Submitted by Lance Roberts of STA Wealth Management,

Deflation

The recent market contraction should not be as much of a surprise as it has been.  First, the markets were long overdue for a correction after an extremely long and unbroken run. Secondly, as I have addressed several times previously, the collapse in global inflationary pressures, along with economic growth, was an issue that would rapidly “wash up” on domestic shores.  To wit:

“I would most likely bet on the latter as the deflationary pressures that are rising in Japan and the Eurozone flow back into the domestic economy over the next couple of quarters.”

The chart below, which shows oil prices, interest rates and the 10-year breakeven inflation rate, are all stating that those deflationary pressures have come home to roost.

Oil-InterestRates-Inflation-101614

The collapse in oil prices is the effect of the drag in global demand combined with the recent surge in the U.S dollar.

Here is the “GOOD NEWS.” 

The collapse in oil prices, combined with a strong dollar, will provide consumers with roughly a $40 billion tax credit going into the winter. This should help provide some support to the domestic economy in the short-term provided there are no other offsetting factors such as a resurgence of the “polar vortex’s” that sapped economic growth last year. 

Retail sales makeup about 40% of the personal consumption expenditures which comprises almost 70% of the quarterly GDP calculation.  Retail sales have slowed recently as the bulk of American’s is living paycheck-to-paycheck.  This is shown in the chart below of “control purchases” that reflects what households are buying.  (Note: Historically, control purchases below 4% annualized have been associated with very weak economic growth.)

Retail-Sales-ControlPurchases-101614

Therefore, there may be some pickup in retail sales in the months ahead which may provide a temporary buoy during the global economic storm.

 

Houston, We Have A Problem

I live in Houston, which as many already know, has enjoyed on of the biggest economic “booms” in history as oil production has had a major impact on the wealth and prosperity of the city. 

However, as I have warned in the past, it is important to remember that all things are going in cycles and that the current expansion was unlikely to last forever.  The reason, I said this then, and still believe it now, is two-fold.

First, the development of the “shale oil” production over the last five years has caused oil inventories to surge at a time when demand for petroleum products in on the decline as shown below.

Oil-Consumption-Supply-101614

The obvious ramification of this is a “supply glut” which leads to a collapse in oil prices.  The collapse in prices leads to production “shut ins,” loss of revenue, employee reductions, and many other negative economic consequences for a city dependent on the production of oil.

Secondly, I have also discussed that the “fracking miracle” may not be all that it is believed to be due to fast production decline rates and massive amounts of leverage. Just recently Yves Smith posted an article discussing this very issue stating:

“The oil and gas sector is capital intensive. Drillers have borrowed phenomenal amounts of money, which was nearly free and grew on trees, to acquire leases and drill wells and install processing equipment and infrastructure. Even as debt was piling up, the terrific decline rates of fracked wells forced drillers to drill new wells just keep up with dropping production from old wells, and drill even more wells to show some kind of growth. One heck of a treadmill. Funded in part by junk debt.

 

Junk bond issuance has been soaring as the Fed repressed interest rates and caused yield-hungry investors to close their eyes and take on risks, any risks, just to get a teeny-weeny bit of extra yield. Demand for junk debt soared and pushed down yields further. And even within this rip-roaring market for junk bonds, according to Bloomberg, the proportion issued by oil and gas companies jumped from 9.7% at the end of 2007 to 15% now, an all-time record.”

While I am not suggesting that the Houston economy is set to collapse, I know many individuals that are heavily leveraged into the “energy” sector believing that things will “only continue to go up.” This is tremendously risky and anyone who lived in Houston during the 80’s will assure you they don’t.

 

Freaking Out

The long awaited correction has finally begun.  It should come as no surprise considering the markets have been in the longest near vertical run in the history of the market.  However, the question for investors is “what do I do now?”

The answer from the mainstream “bulls” is simply to do nothing.  After being caught heavily flatfooted with daily cheerleading of the markets, their only answer currently is to do nothing. After all “it’s not about timing the market but time ‘IN’ the market that matters.” Right?

Such a statement is a cop-out for the lack of an actual portfolio/risk management discipline of any sort.  However, as discussed earlier this week, the current correction was not only anticipated, but should also not be taken lightly.

A big concern at the moment is the conclusion of the Federal Reserve’s ongoing liquidity intervention program which has been the driver behind the markets unbridled advance since its inception in 2012.  The same thing occurred in 2011, which led to a topping process as QE2 was coming to an end. 

SP500-2011-2014-101614

While no two periods are ever the same what is important is the current defense of 1850 level on the S&P 500 so far.  A rally from this level, which fails to attain a new high, suggests that the market will complete an important topping process in the months ahead.

The markets are currently on very important “sell signals,” but also “grossly oversold” on a short-term basis.  This setup suggests that investors should be patient and await a rally back to resistance to reduce equity risk in portfolios for the time being.

SP500-MarketUpdate-101614

(Subscribe for free email delivery of this weekend’s newsletter for portfolio model adjustments and suggested allocations)

“The point is that there are many risks investors should not ignore. Making up losses is much harder than reinvesting stored capital once a clearer picture emerges. While the current belief that a correction of magnitude in the markets is "inconceivable," I am not sure that word means what they think it means.”

Caution is advised.

Title: SEC accuses high frequency trading firm of manipulating closing price of thousan
Post by: g on October 17, 2014, 03:28:40 AM
SEC accuses high frequency trading firm of manipulating closing price of thousands of stocks  :exp-angry: :exp-angry:

The Securities Exchange Commission on Thursday charged a New York-based trading firm of manipulating the closing price of thousands of Nasdaq-listed stocks from June to December 2009.

The investigation found that Athena Capital Research used an algorithm to engage in a practice known as "marking the close," in which stocks are bought or sold near the end of the trading day to impact their closing price, a release said.

"The massive volumes of Athena's last-second trades allowed Athena to overwhelm the market's available liquidity and artificially push the market price—and therefore the closing price—in Athena's favor. Athena was acutely aware of the price impact of its algorithmic trading, calling it 'owning the game' in internal e-mails," the SEC wrote in a release.

Link to entire disgusting article below

  www.cnbc.com/id/102090905 (http://www.cnbc.com/id/102090905)   :icon_study:
Title: WTI Drops Below $80
Post by: RE on November 03, 2014, 03:45:08 PM

WTI Tumbles To 29-Month Lows After Saudi Price Cut

Tyler Durden's picture



 

After initially jerking higher after Saudi Arabia released its new 'lower-prices-for-the-US' strategy, it appears the market began to realize that in fact - as we warned - Saudi Arabia may be willing to accept prices "lower for longer." WTI futures are trading below $78.50 - the lowest since June 2012 (and its dragging Trannies lower today)...

 

 

As Bloomberg reports, confirming our note over the weekend,

 
 

Saudi Arabia, the world’s biggest oil exporter, is telling the market it won’t cut output to lift crude back to $100 a barrel and that prices must fall further before it does so, according to consultant FACTS Global Energy.

 

Swelling supplies from non-OPEC producers drove Brent crude into a bear market on Oct. 8 amid waning demand from China, the world’s second-largest importer. The Organization of Petroleum Exporting Countries meets Nov. 27 to consider changing its production target in the face of the highest U.S. crude output in almost 30 years.

 

“Production of shale oil in the U.S. will not be hit as hard as the Saudis think” by the price decline, FGE Chairman Fereidun Fesharaki said at a conference today in Doha, Qatar. Producers in the U.S. “can withstand a lot of pressure” by reining in their operating costs before they curb investment in new wells and production, he said.

5
 
 
 

Title: WTI Down Below $75!
Post by: RE on November 13, 2014, 03:41:45 PM
How Low Can it Go?

RE

Oilpocalypse Now Sends Small Caps To Worst Day In 3 Weeks (http://www.zerohedge.com/news/2014-11-13/oilpocalypse-now-sends-small-caps-worst-day-3-weeks)

Submitted by Tyler Durden on 11/13/2014 16:06 -0500

WTI Crude plunged another 3.75% to as low as $74.06 today - the lowest since Sept 2010 and dropping at the fastest rate of collapse since Lehman. Airlines popped and Energy stocks dropped 2.7% (now worst sector of the year) but Small Caps were the worst performing major index of the day (turning first around 1030ET and dropping most in over 3 weeks). The S&P tested back into the red for the week but was VWAP-rescued twice. AAPL once again bid saved the Nasdaq. Treasury yields slid lower all day (down 2-3bps across the complex) but remain up 4-5bps on the week. The USD weakened very marginally (still up 0.25% on the week) led by EUR strength. Gold and silver were flat but copper tumbled back below $300 - its lowest close in a month (near lowest close since Jul 2010). HY Credit diverged bearishly this afternoon as stocks ramped to VWAP. VIX rose for the 3rd day in a row, back over 14. Dow record close, Russell biggest drop in 3 weeks.
Title: Re: Big Slide v2.0 Begins
Post by: agelbert on November 13, 2014, 06:26:15 PM
Frackers =  (http://www.pic4ever.com/images/www_MyEmoticons_com__smokelots.gif)  (http://www.freesmileys.org/smileys/smiley-scared002.gif)


 :emthup: :emthup: :emthup: :icon_sunny:

If the BiG Oil Honchos think this is the 1980s again and they are going to destroy renewable energy by tanking the oil price, they are going to be VERY disappointed.  :icon_mrgreen: There is NO FUCKING WAY that fossil fuels are going to recover from the annual encroachment of renewable energy on the energy demand "turf" of fossil and nuclear dirty fuels.

Fossil fuel DEMAND DESTRUCTION AIN'T GOIN' AWAY just because they push the price down. That's what they DO NOT GET. Oh, but they will..  :emthup: :emthup: :emthup: :icon_sunny: (http://www.createaforum.com/gallery/renewablerevolution/3-280614160021.gif)


(http://images.sodahead.com/polls/003730383/3816438968_29Oil_Subsidies_xlarge.jpeg)





.
Title: Bye, Bye, Miss Baltic Dry...
Post by: RE on December 09, 2014, 12:39:20 AM
How LOW can this one go?

http://www.youtube.com/v/hEcjgJSqSRU?feature=player_detailpage

RE

Baltic Dry Plunges Back Below $1000 - Lowest December Since 2008

Tyler Durden's picture



 

Just a few short months ago, investors were "buy buy buy"-ing the fact that The Baltic Dry Index had resurged off multi-year lows 'proving' China's renaissance and that world economic growth will re-approach Nirvana. Simply put, with collapsing commodity prices (iron ore for instance) and massive fleets of credit-driven mal-investment-based vessels, it should surprise no one that the shipping index just plunged back below 1000, now at its lowest for this time of year since 2008. Furthermore, the seasonal bounce always seen in Q3 was among the weakest ever. But apart from that, buy stocks...

 

Nothing like the normal seasonal bounce in Baltic Dry this year...

 

leaving it at the lowest for December since 2008...

*  *  *

Quite a recovery...

Charts: Bloomberg

Title: Short the Phone Book Day!
Post by: RE on December 17, 2014, 04:31:52 AM
For anyone still messing with stocks & bonds, today would be a good day to Short the Phone Book.

Short every energy company listed.  A few may do OK, but they are gonna get HAMMERED in aggregate.  This is a no lose trade.
'
Also short Turkish and Norwegian Bonds.  More Hammering coming there.

You can make a killing on this.

Disclosure: Don't take my advice on any of this, I'm really clueless.  LOL.

RE
Title: MARKETS GO BERZERK!
Post by: RE on December 19, 2014, 12:17:40 AM
It's getting WILD out there now in Algo-Land!

Just gonna include the latest report from China, but the same shit is going on here too.

Short Form: The Folks running the Laptops are going ALL IN, betting the Farm with borrowed money in the one place still going UP, the Stock Market, in the most incredible Lemming MOMO behavior of ALL TIME.

When this sucker BLOWS, it will be something to behold indeed.

RE

Frenzied Chinese Stock Buyers Soak Up So Much Liquidity, Central Bank Forced To Intervene, Prevent Seizure (http://www.zerohedge.com/news/2014-12-18/frenzied-chinese-stock-buyers-soak-so-much-liquidity-central-bank-forced-intervene-p)

Submitted by Tyler Durden on 12/18/2014 22:18 -0500

    Capital Markets
    China
    Citadel
    Citigroup
    fixed
    Hong Kong
    Market Crash
    Money On The Sidelines
    Money Supply
    SPY
    Yuan

While today's rabid explosion in the S&P500, coupled with a literal break in the NY Fed/Citadel market boosting algo which went haywire in the last moments of trading and pushed the S&P up to 2130 in milliseconds via Kevin Henry's preferred SPY ETF, may be the stuff of market manipulating legends, nothing compares to the far more berserk situation China finds itself in, where a 50% surge in the Shanghai Composite over the past few months - not on improving fundamentals but just the opposite, hopes of massive liquidity injections to halt China's economic hard landing - has found the PBOC scrambling to find a way to, politely, burst the stock market bubble without causing too much pain.

This is because as reported overnight, China's seven-day repurchase rate, a gauge of interbank funding availability in the banking system, surged 139 basis points, to a 10-month high of 5.28% in Shanghai, the biggest since Jan. 20. The reason for the sudden cash crunch, according to Bloomberg, is that subscriptions for the biggest new share sales of the year lock up funds. Twelve initial public offerings from today through Dec. 25 will draw orders of as much as 3 trillion yuan ($483 billion), Shenyin & Wanguo Securities Co. estimated. In other words, the scramble to allocate capital into China's surest way of making money, IPOs, has led to a drying out of general liquidity in the entire market.

This in turn forced the PBOC to intervene and inject short-term money loans to commercial lenders in order to prevent the kind of interbank liquidity lock up that emerged in China in June 2013 in the aftermath of the first Taper Tantrum (and which before all is said and done, will likely take place again) and which sent global capital markets around the globe reeling before China resumed its massive liquidity injections which are at the heart of China's debt-fuelled bubble in the first place.

From Bloomberg: “The IPOs are affecting the market, leading to cautious sentiment with fewer institutions willing to lend,” said Li Haitao, a Shanghai-based analyst at China Guangfa Bank Co. “Quite a few traders found it very difficult to meet their funding needs yesterday.”

Why? Because everyone wants to get rich quick so badly, they are risking collapsing the entire market.

    Lenders paid 4.65 percent for 60 billion yuan of three-month treasury deposits auctioned today by the PBOC, the most they’ve paid since January for such funds. The central bank also rolled over this week at least some of the 500 billion yuan of three-month loans granted to lenders in September, a government official said yesterday, declining to be identified as the details haven’t been made public.

“Banks have to prepare for quarter-end regulatory checks, including loan-to-deposit requirements, and hoard cash to meet year-end demand,” said Wang Ming, chief operations officer at Shanghai Yaozhi Asset Management LLP, which oversees 2 billion yuan of fixed-income investments. “With all these factors affecting the market, it’s no surprise it’s suffering more than during previous IPOs.”

    The cost of one-year interest-rate swaps, the fixed payment to receive the floating seven-day repo rate, rose five basis points to 3.38 percent, data compiled by Bloomberg show.

     

    The yield on China’s sovereign bonds due September 2024 fell two basis points to 3.78 percent, according to data from the National Interbank Funding Center. It’s increased 27 basis points this month.

     

    The PBOC is expected to cut lenders’ reserve requirements before the Lunar New Year holiday in February to top up the money supply as the prospect of U.S. interest-rate increases draws cash from China, according to Ding Shuang, senior China Economist at Citigroup Inc. in Hong Kong.

And since the Chinese stock market is surging ever higher on momentum-driven euphoria, China which wants to if not burst its bubble than certainly tame it as it is already having adverse impacts on cross-asset classes, the last thing regulators want to do is risk a full blown slam in equities, which are now so far above their fair value, a Chinese market correction correction could have dramatic consequences on all other aspects of China's bubble economy.

They better decide quick just how they will do this, becauase as Bloomberg also reported moments ago:

    CHINA 7-DAY REPO RATE TOUCHES 5.81%, HIGHEST SINCE JAN.

Ironic, and very much reflexive: with all the "money on the sidelines" is being soaked up in the stock market, there is nothing left to keep the rest of the facade operating efficiently, which ultimately assures a stock market crash.

Perhaps even in a time of pervasive central-planning, a Princeton economist can only pull the rubber band so far before it finally snaps.
Title: Big Slide: Hoser Housing to Hit Hard Hammer
Post by: RE on January 03, 2015, 12:03:30 AM
This is what is commonly referred to as "Blowback".  ::)

TAKE OFF, Eh?

http://www.youtube.com/v/X-ZvAVcBIrQ?feature=player_detailpagehttp://www.youtube.com/v/ot70G4wSQi0?feature=player_detailpage

RE

Guest Post: Oil & The Looming Canadian Housing Bubble Crash

Tyler Durden's picture



 

Via Dr.Housing Bubble blog,

As the year comes to a close, it is useful to put things into perspective.  Sure, California has a love affair with real estate and we go through our traditional booms and busts.  $700,000 crap shacks now litter the landscape but there are fewer and fewer lemmings taking the plunge.  In Canada there was no correction.  In fact, households continue to go into deep debt to purchase real estate.  The argument goes that mortgage standards are much tighter in Canada so therefore, they are much more enlightened when it comes to financing homes.  People forget that the bulk of the 7,000,000 foreclosures in the US came in the form of standard loans.  Garbage loans imploded in more dramatic fashion but people lost their homes because the economy shifted.  At that point, it merely meant covering the monthly nut.  We were housing dependent and that market contracted aggressively.  Canada is housing and oil dependent.  And oil just got a big kick to the shins.

In Canadian debt we trust

There was an inflexion point for US markets when household debt surpassed household income.  People kept saying it was a liquidity crisis initially but it was truly a solvency crisis.  People took on too much debt and were walking on a financial tightrope.  In the US, this peaked above 120 percent.  Canada is well on its way above 160 percent:

Canada-US-debt

 

Basically Canadians are deeper in debt relative to their income.  And a large part of this debt is housing related.  A large part of the economy is also tied to oil and as you may know, oil just took a massive cut:

oil

 

It was interesting to hear that we would never see oil drop below $100 a barrel.  Oil is now trading at $52.84 a barrel.  Similar arguments were made about US housing never having one negative year-over-year price drop until we did.

Large part of Canada’s oil is costly to extract

A large portion of Canada’s oil is costly to extract.  With oil sands for example oil would need to be at $80 a barrel to make a profit:

Oil sands

I doubt people want to run money losing operations for a long period of time.  So it is no surprise that oil rigs are closing:

Oil & Gas rig count

Fewer jobs and less money.  And for a large part of the Canadian economy, much of this money has been flowing into housing.  In Canada, there seems to be a cult belief that housing simply will not correct.  They are full on drinking the good old tasting real estate Kool-Aid.  In the US, we already lived that correction and understand that yes, housing does go through booms and busts especially when debt is used to supplement a lack of income growth.  As the debt to income chart shows, many US households were forced to deleverage via foreclosures and bankruptcies.

Home prices out of sync

Home prices are fully out of sync with incomes.  Take a look at this rise in home values:

Canadian housing

Canada has enjoyed many years of the global commodities boom and now finds itself contending with a market full of debt and inflated housing values.  Short of oil rising back up to $80 a barrel and higher Canada is likely going to face some short-term pain.  The housing market is due for a correction.  Those of us in California realize that booms and busts can occur all of a sudden but the events leading up to this are largely foreseeable.

I’m sure many in Canada assume that home values will simply continue to go up and just because banks check incomes doesn’t mean squat.  As the above data shows, households are already deep in the quicksand of massive debt.  It is all dandy when everything is going up including oil.  When oil gets smashed as it did, it came on quickly.  Canada has their versions of $700,000 crap shacks usually in the form of condos.  Hey, at least with a crap shack you don’t have to share a common wall.  When you look at the Canadian housing market it makes the US look like a frugal uncle.

Title: Re: Big Slide v2.0 Begins
Post by: Petty Tyrant on January 04, 2015, 12:37:05 AM
No mention of chinese investment there, thats how prices get sustained so high above J6P's price range, chinese bidding and buying sight unseen. This article only mentions half the double whammy if they started selling out at the same time. Im calling a 40-50% crash coming if the chinese abandon ship.
Title: US stock indexes declined sharply on Monday, as plunging oil prices worry inve
Post by: g on January 05, 2015, 01:25:35 PM
Leading US stock indexes declined sharply on Monday, as plunging oil prices worried investors.

The Dow Jones fell 377.22 points, or 1.9%, to 17,495 in afternoon trading.

The broader S&P 500 index shed 40.52 points, or 2%, at 2,017, and the tech-heavy Nasdaq slipped 85.09 points or 1.8% to 4,641.

The US oil price fell below $50 per barrel for the first time since April 2009.

Known as West Texas Intermediate crude, it fell 5.39% to $49.85 a barrel, below the symbolic threshold.

The benchmark Brent crude oil price also fell significantly, dropping 6.24% to $52.90 per barrel.

Oil firms Exxon Mobil and Chevron saw their shares fall as a result.

Shares in Exxon were down over 2.5% by the afternoon, and Chevron's had declined by more than 3.5%.

Industrial machinery giant Caterpillar also saw its share price slip by more than 5% as investors worried about the firm's exposure to the energy sector.

 http://www.bbc.co.uk/news/business-30687243#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa (http://www.bbc.co.uk/news/business-30687243#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa)    ::)
Title: Re: US stock indexes declined sharply on Monday, as plunging oil prices worry inve
Post by: MKing on January 05, 2015, 05:20:16 PM
The US oil price fell below $50 per barrel for the first time since April 2009.

Known as West Texas Intermediate crude, it fell 5.39% to $49.85 a barrel, below the symbolic threshold.

Oh but this is just today's price. How long can it STAY under $50? The longer it can…the tighter the vise. Keep it under $50 ($30 would be REALLY wild) until June? Oh my NOW we can talk…because by then the repercussions would REALLY be digging into the meat as opposed to just trimming fat.

Who I feel bad for are the students graduating school with $$ in their eyes for those jobs they figured they would be heading out to in May and June, hitting the rigs and board rooms of the big players in North Dakota and Texas. In booms the schools build up expectations, of both employment and $$. And once you pass by a full seasons worth of these folks, their value to the oil field just drops like a rock. Some will continue in school to get masters degrees, others will combine their oil field centric degree with MBAs and whatnot. But they are the ones I feel sorry for, being a victim of timing just sucks.

Title: Re: Big Slide v2.0 Begins
Post by: g on January 06, 2015, 08:46:29 AM
Market turns 100 point rally into 140 point loss as measured by the Dow

Oil plunging again down 2 bucks after feeble rally attempt last night.

Gold up 8 bucks. 

Doesn't sound to good for sure.

 :o ::)
Title: Re: Big Slide v2.0 Begins
Post by: Eddie on January 06, 2015, 08:56:41 AM
Some will continue in school to get masters degrees, others will combine their oil field centric degree with MBAs and whatnot. But they are the ones I feel sorry for, being a victim of timing just sucks.


Yep.
Title: Down Goes Copper
Post by: RE on January 14, 2015, 02:10:43 AM
Liquidation time!

RE

Copper Halted After Crashing 8% On LME, Sends AUD Plunging, Futures Dip Under 2000

Tyler Durden's picture



 

Today's prime time event hasn't even arrived, that would be the European Court of Justice (ECJ) delivering its final opinion on the legality of the ECB’s previously announced OMT program, in less than an hour, and already the fireworks have begun, most notably out of Asia where after yesterday's epic commodity drubbing many were caught with their pants down and margin calls up, and what followed was a classic liquidation puke, when Copper prices crashed over 8% on the LME, to fresh 5 year lows and below USD 5,500/T in London.

This plunge prompted Shanghai futures to hit a daily-trading limit, while copper COMEX also dropped to a five and a half year low. According to traders, the sell-off was sparked by stop-loss selling as the World Bank downgraded global growth and amid expectations of increasing supply. Adding gasoline, so to say, to the excess capacity fire, Goldman said risks to copper prices are heavily skewed to downside and a Q1 rise in LME and SHFE inventory is to weigh on prices. Oh, and before you blame the selloff on another OPEC-driven supply glut, here is the real culprit according to Goldman:

Yes: it is, sadly for the apologists, all about China, whose credit creation dynamo has all but run dry. Worse, with copper the primary funding metal of its shadow banking system (read The Bronze Swan Arrives: Is The End Of Copper Financing China's "Lehman Event"? and Bronze Swan Lands: Goldman Explains How The China Commodity Unwind Will Happen) things in China are about to get very interesting.

Here is a blow by blow of the copper crash from RanSquawk:

 
 

The sharp move lower in copper was initially attributed to stop-loss selling and a surge in trading volumes.

  • The World Bank then cut its 2015 Global growth forecast to 3% from 3.4% sending prices further lower.
  • In response, Goldman Sachs said risks to copper prices are heavily skewed to downside and a Q1 rise in LME and SHFE inventory is to weigh on prices.
  • In tandem with the copper weakness, commodity-related currencies including NZD, AUD and CAD came under selling pressure, notably against JPY.
  • Of note, yesterday BNP Paribas cut 2015 copper forecast to USD 6,175 from USD 6,500 per tonne.  Elsewhere, Deutsche Bank head of commodity research said short positions in copper are now at multi-year highs in the face of oil weakness.
  • The negative sentiment also comes ahead recent heightened expectations of increasing copper supply. Yesterday,  Peru (world's third largest copper producer) finance minister Segura sees very strong copper output on new mines, output to rise through 2018

This also comes after LME Warehouse Stock Movements showed copper stockpiles rise 2.1% to highest since May.

The copper crash has also impacted adversely all commodity currencies, and NZD, CAD but mostly AUD all fell against all major peers. Here is the AUDJPY tumbling to the lowest since October.

The flight from, well, all commodities was also evident in JPY crosses after the USD/JPY tumbled below 117, the lowest since December 17, dragging the E-mini lower with it.

And now we sit back and see if Draghi's "whatever it takes" OMT has been deemed illegal, or, instead, if the ECJ finds it legal and begins a full blown political war with Germany.

Title: Caesar Goes Bankrupt!
Post by: RE on January 15, 2015, 01:10:07 AM
You know things are getting rough when the Gambling Biz is in trouble.

It should be obvious why they are collapsing.  The Gamblers are running out of Money to Gamble with! If they can't afford the gas to GET to Vegas, how can they lose the rest of their money at the Casino?  LOL.

LOTTO sales also down about 15%.  J6P can't even afford a Lotto Ticket these days!

Add this one to the Water Woes in Vegas, and you got another Perfect Storm there.

RE

Caesars Files For Bankruptcy (http://www.zerohedge.com/news/2015-01-15/caesars-files-bankruptcy)

Submitted by Tyler Durden on 01/15/2015 03:42 -0500

    Creditors
    Gambling
    Illinois
    Las Vegas
    Oaktree
    Real Estate

Et tu, Caesars?

In what has been the most anticipated bankruptcy case in the past several years, hours ago Caesars Entertainment put its main operating unit under Chapter 11 bankruptcy protection in Northern Illinois bankruptcy court (case 15-01153) even as a splinter group of dissident creditors including Appaloosa and Oaktree, holders of about $41 million of Caesars debt and which allege the company has siphoned off billions in value from creditors, put the company into involuntary bankruptcy in Delaware bankruptcy court on January 12. As a reminder, Caesars was one of the sterling LBOs of the last credit bubble, when in 2008 Apollo and TPG decided to take the company private. The problem, as is always the case: too much debt, especially when combined with a broken business model, as Caesars has lost money every year since 2009.

While the Voluntary Bankruptcy Petition, see below, lists some three pages of operating units and affiliate debtors, it preserves the equity interests of the financial sponsors by keeping the parent Caesars Entertainment, out of bankruptcy.

As the petition also shows, the operating unit, which filed with more than 100 affiliates, listed about $12.4 billion in assets and $19.9 billion in liabilities. The Affidavit, to be filed shortly, will be a very riveting read on the real state of the Las Vegas gambling industry.

The bankruptcy caps a long and contentious litigation between the various groups of creditors. As Bloomberg reports, last year, a trustee for holders of so-called second-lien notes sued the company and top management last year, accusing them of plundering the operating unit of its most valuable properties. The dissident creditors accused Apollo and TPG of trying to create a “good Caesars” to hold the valuable properties and a “bad Caesars” to owe most of the debt.

    The conflict came to a head earlier this week, when some of those creditors asked the Wilmington, Delaware, bankruptcy court to put the unit into Chapter 11 and hire an examiner to review the asset moves.

     

    Typically, when two bankruptcies for the same company are sought in different jurisdictions, the judge in the case that was filed first determines where they will be heard. Creditors in the involuntary bankruptcy had asked the judge in Delaware to bar any action in a rival case.

     

    Caesars said in a court filing in Delaware yesterday that the creditors are trying “to wreak havoc on the orderly process the debtors, their professionals, and the many consenting stakeholders have been preparing for months.”

     

    U.S. Bankruptcy Judge Kevin Gross in Wilmington has said he would consider a request to prevent any court action in a second case after it’s filed. The creditors today asked Gross to halt the proceedings in Chicago.

What's next for the debt-ridden casino operator? Under the consensual creditors' proposal, Caesars Entertainment Operating Co. would become a real estate trust with two divisions, one to hold property and one to manage casinos. The new company would have about $8.6 billion in debt. "The Caesars’ parent, in turn, would give senior creditors a stake in the new companies, according to negotiation details released in December. A judge would have to approve the arrangement."

The plan has received support from more than 80 percent of so-called first-lien noteholders, Caesars said in a statement today. Randall S. Eisenberg of AlixPartners was named chief restructuring officer of the operating unit, according to the statement.

The good news for an entirely different set of habitual gamblers, namely those eager to try their luck in the Caesars casino today, arguably a less rigged venue than the US equity market, it will be business as usual: "The properties across the entire Caesars Entertainment network are open and will operate without interruption,” Gary Loveman, Caesars chairman, said in the statement.

Full bankruptcy petition below.
Title: THE SHIT HITS THE FAN!
Post by: RE on January 16, 2015, 02:38:42 AM
With the capitulation by the Swissie Banksters, we are now officially in a full on SHTF scenario.

Market volatility tomorrow is going to be outrageous.

Break out the Popcorn.

 :happy1:

RE
Title: Re: Big Slide v2.0 Begins
Post by: Randy C on January 16, 2015, 10:15:24 AM
   Bruce Krasting's take on the events in Switzerland....

This will likely be an exciting weekend.  And, I may see another offer soon.....  :icon_sunny:

http://brucekrasting.com/end-cb-power-snb-folds/?utm_source=rss&utm_medium=rss&utm_campaign=end-cb-power-snb-folds (http://brucekrasting.com/end-cb-power-snb-folds/?utm_source=rss&utm_medium=rss&utm_campaign=end-cb-power-snb-folds)

Posted to The Automatic Earth blog for 16 January 2015

.
Thursday, January 15, 2015
End of CB Power – SNB Folds

 

I wrote about the Swiss National Bank being forced to abandon its currency peg to the Euro on 12/3/14, 12/8/14 and 1/11/15. That said, I’m blown away that this has happened today.

 

Thomas Jordan, the head of the SNB has repeated said that the Franc peg would last forever, and that he would be willing to intervene in “Unlimited Amounts” in support of the peg. Jordan has folded on his promise like a cheap suit in the rain. When push came to shove, Jordan failed to deliver.

The Swiss economy will rapidly fall into recession as a result of the SNB move. The Swiss stock market has been blasted, the currency is now nearly 20% higher than it was a day before. Someone will have to fall on the sword, the arrows are pointing at Jordan.

The dust has not settled on this development as of this morning. I will stick my neck out and say that the failure to hold the minimum rate will result in a one time loss for the SNB of close to $100B. That’s a huge amount of money. It comes to 20% of the Swiss GDP! If this type of loss were incurred by the US Fed it would result in a loss in excess of $2 Trillion!

In the coming days and weeks there will be more fallout from the SNB disaster. There will be reports of big losses and gains from today’s events. But that is a side show to the real story. We have just witnesses the collapse of a promise by a major central bank.

The Fed, Bank of Japan, ECB, SNB and other Central Banks have repeatedly made the same promises over the past half decade:

 

Don’t worry! We are here. We will do anything it takes to achieve the stability we desire. We are stronger than the markets. We can overwhelm all forces. We will never let go – just trust us!

 

I never believed in these promises, but the vast majority of those who are active in financial markets did. The entire world has signed onto the notion that Central Banks are all powerful. We now have evidence that they are not.

Anyone who continues to believes in the All Powerful CB after today is a fool. Those who believed in Jordan’s promises now have red ink on their hands – lots of it!

The next central bank that will come into the market’s cross hairs is the ECB. Mario Draghi has made promises that he would “Do anything – in any amount”.  Like I said, you would be a fool to continue to believe in that promise as of this morning.

We’ve just taken a huge leap into chaos. The linchpin of the capital markets has been the trust in the CBs. The market’s anchors have now been tossed overboard.
Title: Re: THE SHIT HITS THE FAN!
Post by: MKing on January 16, 2015, 10:49:48 AM
With the capitulation by the Swissie Banksters, we are now officially in a full on SHTF scenario.

Market volatility tomorrow is going to be outrageous.

Break out the Popcorn.

 :happy1:

RE

Down a smudge at the opening, up about 80 right now, nothing bizarre, certainly nothing that can be described as outrageous.



(http://anappleaday.net.au/wp-content/uploads/2014/04/mountain-molehill.gif)
Title: Re: THE SHIT HITS THE FAN! Swiss Central Bank Capitualtion Black Swan Event
Post by: g on January 17, 2015, 07:35:36 AM
With the capitulation by the Swissie Banksters, we are now officially in a full on SHTF scenario.

Market volatility tomorrow is going to be outrageous.

Break out the Popcorn.

 :happy1:

RE

Down a smudge at the opening, up about 80 right now, nothing bizarre, certainly nothing that can be described as outrageous.



(http://anappleaday.net.au/wp-content/uploads/2014/04/mountain-molehill.gif)

MKing may I disagree with your assessment of the Swiss Central Bank move.

RE is correct in pointing out it's significance in my view, my only criticism of his calling it to our attention is that he was not forceful enough in his presentation of this most  significant event.

I am going to offer up an article by someone who has some real expertise in these matters Mr David Stockman and hope the Diner forum will appreciate it's import as a financial event.
In Praise Of Price Discovery—–The Market Is Off Its Lithium

By David Stockman

This morning’s market is more erratic than Claire Danes off her lithium. Gold is soaring, the euro’s plunging, US treasury yields are in free fall, junk bonds are faltering, copper is bouncing, oil has rolled over, the Russell 2000 momos are getting mauled, the swissie has shot the moon, the Dow is knee-jerking down, correlations are failing……and the robo traders are flat-out lost.

All praise the god of price discovery!

For six years financial markets have been drugged into zombiedom by maniacal central bankers who have violated every known rule of sound money and financial market honesty. In expanding their collective balance sheets from $5 trillion to $16 trillion over the past decade, for instance, they have midwifed a planet-wide fiscal fraud. Politicians have been enabled to spend and borrow like never before because central banks have swapped trillions of public debt for electronic cash confected from nothing.

Likewise, never have carry traders and gamblers been so egregiously pleasured by the state. After 73 straight months of ZIRP they are still pinching themselves, wondering if such stupendous largesse is real. They have bought anything with a yield and everything with prospect of gain, financed it for nothing and collected the arb—–while being swaddled in the Fed’s guarantee that it would never surprise them or perturb their trades with unannounced money market rate changes.

And so they wallowed in their windfalls, proclaiming their own genius. Does a pompous dandy like Bill Ackman end up purchasing an absurdly priced $90 million Manhattan condo just “for fun” because markets operate on the level? Do his petulant brawls with other grand “activist” speculators like Carl Icahn mark investment genius or the machinery of honest capitalism at work?

No they don’t. There is absolutely nothing honest, productive or fair about the central bank dominated casinos which have morphed out of what used to be legitimate money and capital markets.
  :'( :'(
Indeed, all the requisites of stability, efficiency and honest price discovery have been destroyed by the monetary central planners. The short sellers have been eradicated. Downside insurance against a broad market swoon has become dirt cheap. Momo traders have thereby been enabled to earn unconscionable returns because their carry costs have been negligible and their hedging expenses nearly nothing.

Accordingly, the chart below of the S&P500 since the March 2009 bottom does not represent a market at all; it traces the central bank enabled casino in full bloom, the buy-the-dips mania in overdrive.



Behind this vast deformation was, ultimately, a simple proposition. Namely, that central banks were omnipotent, efficacious, purposive and reliable; that everywhere and always they had the “backs” of the gamblers and speculators; and that, above all, the central bank “put” was money good.

Today all that changed. In a word, the Swiss Central Bank was on the verge of printing itself into oblivion. It had to stop pegging the CHF at 120 before the madman Draghi turned on the ECB printing presses and submerged the SNB’s vaults in a deluge of wasting euros that would have soon reached the tops of the Alps.

Here’s what it had come to. In about 84 months, the SNB’s balance sheet had expanded by 5X. It now stands at nearly 100% of GDP, towering far above even the lunatic monetary emissions of the BOJ.

Had the SNB not finally blinked, the Swiss economy would have been obliterated in a orgy of export sector malinvestment, virulent domestic speculation and incendiary asset-inflation. At length, even Swiss mountainside real estate would have become too expensive for cows and ski lodges alike.



What happened today is that the SNB confessed it was lying, faking, making it up by the seat of its pants. So doing, it unleashed financial hell.

Scroll down the Swiss stock exchange lists and find exporters, miners, industrials and techs down by 10-20% in a single day. Is it possible that some of these “names” had been in the portfolios of leveraged momo traders who are now getting heavy margin calls? The Lonza Group life science company, for example, had been up 4X from its 2012 low and traded at 30X. So when today it lost 18% of its CHF value in a heartbeat, it was not just widows and orphans funds which were licking their wounds.


So too the army of carry traders who funded their speculations with zero cost CHF. They were ionized in a nanosecond because they were effectively “short” the swissie. But why not? They believed SNB Chairman Thomas Jordan’s incessantly repeated promise that the 120 peg would never, ever be removed—–and most especially not in the dead of night, without warning.

And at least the professional speculators in the CHF should have known better. Now comes the millions of everyday central and eastern European householders who took out ultra-low interest mortgages denominated in CHF. They too should have read the fine print, but why bother in a world of central bank omnipotence?

Needless to say, Thomas Jordan is not the last central banker who has turned out to be a liar. He’s merely the first—-with Mario Draghi already on deck. When he fails to deliver on “whatever it takes”, and that is a near certainty now, they will not even want him back in Italy to assume the ceremonial post of President.

Can it be that dozens of Italian banks, which loaded up on Italian government debt when ECB front-running speculators drove yields into the sub-basement, will now be reawakened to the process of price discovery?

Most assuredly they will. It was only Draghi’s seat of the pants lying that made the following picture possible. In an honest financial world, the debt of a ungovernable country on a fast track to bankruptcy could not possibly have experienced the stupendous rally of the last 30 months shown below.
So let the price discovery begin. The global petroleum complex is already there. So is iron ore, copper and the most of the central bank bloated world of industrial commodities. The EM currencies are not far behind. Nor is the $9 trillion of vastly over-valued off-shore debt that was denominated in dollars and sold to yield hungry speculators.

Take a trip to Istanbul. Ask how the skyline of construction cranes will find the dollars to pay off the debt they have poured into still empty towers.

For that matter, can the Japanese monetary madhouse be far behind? Have not even the Shanghai market punters figured out that China’s $26 trillion tower of debt is already swaying precariously in the global financial winds?

Yes, the Swiss National Bank did ring the bell. Slowly at first, and then with a rush, the casino players will learn that the central banks have been lying all along. Then the lost art of “price discovery” will have its way.

 
Link to article with it's charts for those interested in further study.

http://davidstockmanscontracorhttp://davidstockmanscontracorner.com/in-praise-of-price-discovery-the-market-is-off-its-lithium/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Saturday+9+AMner.com/in-praise-of-price-discovery-the-market-is-off-its-lithium/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Saturday+9+AM (http://davidstockmanscontracorhttp://davidstockmanscontracorner.com/in-praise-of-price-discovery-the-market-is-off-its-lithium/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Saturday+9+AMner.com/in-praise-of-price-discovery-the-market-is-off-its-lithium/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Saturday+9+AM)    :icon_study: :icon_study: :icon_study: :icon_study: :icon_study: :icon_study: :icon_study: :Thinkingof_:    :-\ :-\

P.S. The addition of the black swan event to RE's original Title was my work and not Mr Stockmans title.
Title: Re: THE SHIT HITS THE FAN! Swiss Central Bank Capitualtion Black Swan Event
Post by: g on January 17, 2015, 09:12:31 AM
These are the ass holes the Fed is providing free money too.

And our beloved congress, with arm twisting from the turd in the White House just put the American taxpayer at risk again for these scuzzy imbeciles.


It's Not Just 'Retail': Head Of European FX Sales Out After Citi Admits Massive Loss
By Tyler Durden
Created 01/16/2015 - 12:48

All morning, mainstream media has been down-playing the insolvency of various retail-focused FX brokers using words like "contained" and even suggesting retail 'moms-and-pops' should not be allowed to trade FX. Now, we get more news from a non-retail institution:

    *CITIGROUP SAID TO LOSE MORE THAN $150 MLN ON CURRENCY MOVES

So should Citi be banned from FX trading too? It appears so - Citi's head of European FX sales is 'said to leave' the company.

    *CITIGROUP HEAD OF EUROPEAN INVESTOR SALES, FX, SAID TO LEAVE

As Bloomberg reports,

    Citigroup Inc., the world’s biggest currencies dealer, lost more than $150 million after the Swiss central bank decided to let the franc trade freely against the euro, according to a person briefed on the matter.

     

    The losses occurred on the New York-based bank’s trading desks and aren’t tied to its relationships with FXCM Inc. and other retail trading platforms, said the person, who asked for anonymity because the information hasn’t been disclosed publicly.

     

    ...

     

    Citigroup Inc.’s head of European investor sales, foreign exchange and local markets, Alex Jackson, left the firm this week, a person with knowledge of the matter said.

     

    His departure isn’t related to investigations into the rigging of the foreign-exchange market, according to the person, who asked not to be identified because the move isn’t public.

*  *  *

See what happens when you can't rig the market?

http://www.zerohedge.com/news/2015-01-16/its-not-just-retail-head-european-fx-sales-out-after-citi-admits-massive-loss (http://www.zerohedge.com/news/2015-01-16/its-not-just-retail-head-european-fx-sales-out-after-citi-admits-massive-loss)  :icon_study:
Title: Re: THE SHIT HITS THE FAN!
Post by: jdwheeler42 on January 17, 2015, 09:59:11 AM
With the capitulation by the Swissie Banksters, we are now officially in a full on SHTF scenario.

Market volatility tomorrow is going to be outrageous.

Break out the Popcorn.

 :happy1:
Down a smudge at the opening, up about 80 right now, nothing bizarre, certainly nothing that can be described as outrageous.
A friend of colleague just happened to choose to close his FX account just as this was happening.  He lost about $7000 out of $18000.

A case of some mighty bad timing.
Title: Re: THE SHIT HITS THE FAN! Swiss Central Bank Capitualtion Black Swan Event
Post by: MKing on January 17, 2015, 03:17:20 PM

Down a smudge at the opening, up about 80 right now, nothing bizarre, certainly nothing that can be described as outrageous.

(http://anappleaday.net.au/wp-content/uploads/2014/04/mountain-molehill.gif)

MKing may I disagree with your assessment of the Swiss Central Bank move.

My assessment was of the claim that TSHTF was what was in store, predicted for happening in that very day.

I don't assume the Swiss doing whatever it is they want to do to mitigate risk or maximize value or prepare for whatever their economists on the payroll think is coming  (as opposed to those that aren't good enough to be paid) will have the effects claimed in the timeframe claims.

Quote from: Golden Oxen
RE is correct in pointing out it's significance in my view, my only criticism of his calling it to our attention is that he was not forceful enough in his presentation of this most  significant event.

Except it didn't cause the consequence claimed in the timeframe claimed. Lets face it GO, you have been worried, scared, concerned, and looking for the other shoe to drop on the entire run up to the current highs in the market, and have gotten cranky with me when I've pointed out how you consistently do this over the past year or two.

So you think the we need MORE forceful claims of TSHTF and volatility in the same day they DON'T happen? Cool. Maybe was the Swiss did was important…just not important enough to cause the issues claimed for the day…but maybe they are important over the coming days. Fine.

Can you explain to a financial laymen such as myself why you think RE should have rung the alarm bell even MORE for a intra-day non-event that apparently the market and rest of the world decided wasn't worth the drama…but you do?

What YOU think…I went through your voluminous cut and paste and it didn't cover why this thing was supposed to cause even more near term side effect than RE claimed…versus the pretty much nothing that was the reality.
Title: Re: THE SHIT HITS THE FAN! Swiss Central Bank Capitualtion Black Swan Event
Post by: RE on January 17, 2015, 08:35:50 PM

What YOU think…I went through your voluminous cut and paste and it didn't cover why this thing was supposed to cause even more near term side effect than RE claimed…versus the pretty much nothing that was the reality.

It obviously was pretty serious reality for FXCM, Excel and all their clients.  ::)

Besides that, the list of people besides me who think this is a game changing event include:

David Stockman
Bruce Krasting
Graham Summers
Raul "Ilargi" Miller
Wolf Richter
The Tyler Durdens

and many more I am sure, I just got back online though so I haven't had time to surf out much.

However, I did find yet another Macro Hedge Fund blew up with $1B in losses.  This is not Chump Change, even these days.

RE

Everest Macro Hedge Fund Blows Up After Nearly $1 BIllion In Swiss Franc Losses (http://www.zerohedge.com/news/2015-01-17/everest-macro-hedge-fund-blows-after-nearly-1-billion-swiss-franc-losses)

Submitted by Tyler Durden on 01/17/2015 16:28 -0500

    Central Banks
    default
    Mexico
    Swiss Franc
    Swiss National Bank
 

Yesterday, when we got the first news of huge P&L losses at various publicly-traded banks not to mention the collapse of several retail brokers culminating with the bailout of FXCM by Jefferies, we reminded that seconds after the SNB shocker, we tweeted what was quite obvious to anyone who realized that speculators were most short the CHF since the summer of 2013:

We also added that "We have yet to find out just which hedge funds were blown up yesterday", for the simple reason that unlike public banks who have an obligation to reveal news, especially bad, to their shareholders, hedge funds PMs hope to avoid the LP firing squad until the last second. Alas, there is only so long that the day of reckoning can be delayed.

One such fund is the Everest Capital Global macro fund, which went from just shy of a billion to zero in milliseconds as a result of a near wipe out due to a massive CHF-short position. Bloomberg reports:

    Marko Dimitrijevic, the hedge fund manager who survived at least five emerging market debt crises, is closing his largest hedge fund after losing virtually all its money this week when the Swiss National Bank unexpectedly let the franc trade freely against the euro, according to a person familiar with the firm.

     

    Everest Capital’s Global Fund had about $830 million in assets as of the end of December, according to a client report. The Miami-based firm, which specializes in emerging markets, still manages seven funds with about $2.2 billion in assets. The global fund, the firm’s oldest, was betting the Swiss franc would decline, said the person, who asked not to be named because the information is private.

     

    Everest grew to $2.7 billion by the start of 1998 after navigating crises in Mexico and Southeast Asia. Russia’s default and currency devaluation proved trickier and assets fell by half amid losses. He revived the firm and a decade later Everest managed $3 billion. Then the global financial crisis hit, and assets shrunk by $1 billion.

     

    Last year, the main fund rose 14.1 percent, driven by Chinese equities and bets against currencies, including a wager that the Swiss franc would fall after citizens rejected a referendum that would require the central bank to hold at least 20 percent of its assets in gold, the investor report said.

In other words, Dimitrijevic survived the vagaries of extremely volatile markets for over 15 years, and even flourished, yet all it took to destroy him was one decision by a conference room full of central-planners who were confident they knew better than the market for the second time in 3.5 years. Ironic.

One thing is certain: it is not just the former Yugoslav who feels as if he has fallen off the top of Everest this weekend, many other funds are too. Here is who else has been named so far according to the WSJ:

    Other hedge funds that have suffered amid the Swiss turmoil, according to people familiar with the situation, are Discovery Capital Management LLC, a South Norwalk, Conn. firm that manages $14.7 billion, and Comac Capital LLP, which oversees $1.2 billion in London.

Expect to learn of more casualties from the historic move in the coming days, and certainly once other banks follow in the footsteps of the Swiss central bank, and like the Pied Piper, lead all those "sophisticated investors" who were merely frontrunning and trading alongside central banks on massive leverage pretending they were generating alpha, right off the edge of the cliff.
Title: Re: Big Slide v2.0 Begins
Post by: Petty Tyrant on January 17, 2015, 08:57:53 PM
I dont get whats the big deal about this. Fatcats with swiss bank accounts get fatter, whats new. I once bought a ladies swiss watch only because the deal was u could get one half price if u bought some other thing, which I was doing because as a doomer i wanted something without batteries in case i couldnt get any in future. But swiss watches cost at least twice as much as they should anyway, 50% off is only bringing it down to what its really worth, so I dont think it will make any difference to them based on the usual buyers if they get a bit more expensive now. Their pocket knives also are expensive and chinese copies are way cheaper, USA makes the best knives and at better prices than swiss. Tourism and skiers to the alps might drop a bit because if cost, but overall HTF does it affect us?
Title: Re: Big Slide v2.0 Begins
Post by: RE on January 17, 2015, 09:38:48 PM
Tourism and skiers to the alps might drop a bit because if cost, but overall HTF does it affect us?

Financial CONTAGION UB.

Rant Coming tonight.

RE
Title: Re: Big Slide v2.0 Begins
Post by: g on January 18, 2015, 06:14:43 AM
Quote
My assessment was of the claim that TSHTF was what was in store, predicted for happening in that very day.

I don't assume the Swiss doing whatever it is they want to do to mitigate risk or maximize value or prepare for whatever their economists on the payroll think is coming  (as opposed to those that aren't good enough to be paid) will have the effects claimed in the timeframe claims.

Yes MKing, you have stated your view quite clearly that you think it is a molehill, much like the oil price collapse.

You did get a 30% rise in the currency of Switzerland, and a 10 percent drop in it's stock market in very short order.  I continue to believe that is significant for the markets first day assessment, as well as a futher sharp decline in the alrady crashing Euro.


Quote
Except it didn't cause the consequence claimed in the timeframe claimed. Lets face it GO, you have been worried, scared, concerned, and looking for the other shoe to drop on the entire run up to the current highs in the market, and have gotten cranky with me when I've pointed out how you consistently do this over the past year or two.

That is an out an out lie and defamation of my views, stated obviously to piss me off. I have repeatedly told you that I have been long the stock market for fifty years now without interruption. Have never taken a dividend, instead reinvest them, and continue to do so this very day. You may have mistaken my ire and various diatribes against the financial goings on as wishing the market to go down. You would be incorrect. My problem is with the corruption in the system, and the wealth grabbing tactics of the crooks who have rigged the game at our expense.

May I point out that you are the Cranky one and cry baby. You sold out years ago by your own admission. You recently stated you were drooling at some bearish comments contemplating how you could get back in at rock bottom prices. You are what we call in the market a Sold Out Bull, a dum dum that got out way to early and prays for a crash so he may get back in. Your desire to play fuck diddle and aggravate has caused you to forget that it was you, not me, that missed the big bull run.

Quote
Maybe was the Swiss did was important…just not important enough to cause the issues claimed for the day…but maybe they are important over the coming days. Fine.

Correct. The Federal Reserve Board of the US embarked on a program at the last stock market bottom to bring back the market from the dead with the most massive monetary stimulus in history.  It took took about a half dozen years to get the market back to it's highs.

Quote
Can you explain to a financial laymen such as myself why you think RE should have rung the alarm bell even MORE for a intra-day non-event that apparently the market and rest of the world decided wasn't worth the drama…but you do?

For you MKing, That has become my proprietary information. You repeated statements about free information being worth nothing, especially when directed against me and the distinguished authors I have tried to present to be helpful. For a one time consulting fee of 10,000 dollars and an additional 1000 dollar a year renewal fee, I will provide you with such information. And believe me, you could really use my services. Ask the Swiss bankers to enlighten you for free.

Quote
What YOU think…I went through your voluminous cut and paste and it didn't cover why this thing was supposed to cause even more near term side effect than RE claimed…versus the pretty much nothing that was the reality.

I can't help you with a reading comprehension problem but I am surprised at your inability to comprehend. Perhaps just another one of your needling actions.

Although, as I pointed out earlier, and as have many others, finance is your weak field. May I take it further now that your lack of knowledge outside of the oil industry is becoming more apparent. You are what you  accused Russia of being "A ONE TRICK PONY" what a coincidence Oil binds you to ponies together.

P.S. Uncle Bob, a serious poster, has posted a question much like yours on the SNB move. You lucked out, Bob is on my free info list.

Listen carefully, yank your head out of your rectum for this one, or don't bother to read it because it's free.


Title: Re: Big Slide v2.0 Begins
Post by: MKing on January 18, 2015, 08:00:21 PM
May I point out that you are the Cranky one and cry baby. You sold out years ago by your own admission.

While yes, I might be cranky and a cry baby, I don't know what you mean by "sold out". Are you talking about my mistake in thinking that gold would work as a hedge against inflation (as opposed to market investment that did better) and now being forced to give it to my children as an example of a failed experiment, or "sold out" of the market in general, or is this a comment on my morals?

Quote from: Golden Oxen
You recently stated you were drooling at some bearish comments contemplating how you could get back in at rock bottom prices.

I have used the Baron Von Rothschild quote before…yes. And utilized the technique as well…yes. You have an objection to making money in down markets as compared to up markets?

Quote from: GOlden Oxen
You are what we call in the market a Sold Out Bull, a dum dum that got out way to early and prays for a crash so he may get back in.

I never got out. I jumped in hard post 2008…and while I have inquired as to whether or not others think it is opportune to get out as of late…I have not yet. Well…not much yet. However, I do have some reserve, and if the market crashed tomorrow, and I stayed in…I would dump that reserve right back in. So sure…I wouldn't mind another massive money making opportunity (you appear to refer to these as "crashes" but that mischaracterizes the opportunity).

Quote from: Golden Oxen
Your desire to play fuck diddle and aggravate has caused you to forget that it was you, not me, that missed the big bull run.

I didn't miss the bull run. I just wouldn't mind ANOTHER one…and if that is now…well…then lets get the ball ROLLING already!!

Quote from: Golden Oxen
Quote
Can you explain to a financial laymen such as myself why you think RE should have rung the alarm bell even MORE for a intra-day non-event that apparently the market and rest of the world decided wasn't worth the drama…but you do?

For you MKing, That has become my proprietary information. You repeated statements about free information being worth nothing, especially when directed against me and the distinguished authors I have tried to present to be helpful. For a one time consulting fee of 10,000 dollars and an additional 1000 dollar a year renewal fee, I will provide you with such information. And believe me, you could really use my services. Ask the Swiss bankers to enlighten you for free.

I'm not a Swiss banker. And while I appreciate your offer, I have no need of your advice as it pertains to investing. I will stick with what has worked for me over the past few decades, but thanks for your kind offer.

Quote from: Golden Oxen
Quote
What YOU think…I went through your voluminous cut and paste and it didn't cover why this thing was supposed to cause even more near term side effect than RE claimed…versus the pretty much nothing that was the reality.

Although, as I pointed out earlier, and as have many others, finance is your weak field.

Truer words were never spoken. Although I don't consider this topic finance, but investing. Strikes me as two different things.

Quote from: GOlden Oxen
May I take it further now that your lack of knowledge outside of the oil industry is becoming more apparent.

Well, this certainly might be true as well. I am somewhat of a focused individual, and my professional work has been quite engrossing. Although what little I have learned outside my professional experience is that buying low and selling high is quite a bit better a strategy than the other way around.

Quote from: GOlden Oxen
You are what you  accused Russia of being "A ONE TRICK PONY" what a coincidence Oil binds you to ponies together.

Well, all of us have at least a LITTLE experience outside our professions, otherwise we couldn't function in the real world. And while my investing experience and advice is  simplistic and incomplete in terms of the in-depth knowledge required, it has been quite tidy in its profitability. Better to be lucky that smart I guess!!

Title: Re: Big Slide v2.0 Begins
Post by: g on January 19, 2015, 05:03:07 AM
Quote
Better to be lucky that smart I guess!!

For sure MKing, at least in financial matters. Being born in the Royal Family, or being and heiress like Paris Hilton, sure seems to put some at an advantage over others where money is concrened.  :laugh:

I would love to respond to the rest of your reply but I just can't handle your techniques of changing intent, riddles, answering questions or statements by asking new ones on unrelated topics. Sure you know what I mean. Whenever you wish to discuss these matters in a serious vein I hope to be here and will reply in like manner.
Title: Re: Big Slide v2.0 Begins
Post by: g on January 19, 2015, 05:55:07 AM
I dont get whats the big deal about this. Fatcats with swiss bank accounts get fatter, whats new. I once bought a ladies swiss watch only because the deal was u could get one half price if u bought some other thing, which I was doing because as a doomer i wanted something without batteries in case i couldnt get any in future. But swiss watches cost at least twice as much as they should anyway, 50% off is only bringing it down to what its really worth, so I dont think it will make any difference to them based on the usual buyers if they get a bit more expensive now. Their pocket knives also are expensive and chinese copies are way cheaper, USA makes the best knives and at better prices than swiss. Tourism and skiers to the alps might drop a bit because if cost, but overall HTF does it affect us?

Hi Unc, You sure echo my feelings about concern for Swiss exporters of luxury goods. Who gives a shit about companies selling 20 thousand dollar diamond watches, and five thousand dollar leather handbags to the worlds wealthy, certainly not me.

While your observations on what it means in this manner are correct, you are missing the bigger picture of what Mr Stockman is trying to convey and what I believe is true as well.

RE has already presented the fallout side of this move, and it is bad enough and cause for great concern, both now and looking forward. My only problem with his analysis is that it does not emphasize confidence, which is what Stockman was referring too.

The gist of Mr Stockman's concern, as well as my own goes along the lines of confidence. We are of the opinion that the world's current financial situation is akin to a Giant Con Game run by central bankers, most in cahoots with one another. Most people including the Wall St and hedge fund crowd, as well as the general population think these people control the world's economy and stock markets and their pronouncements and policies are to watched, obeyed, acted upon as if Zeus came out of the sky and pronounced them. Some of us think we know better, think they are psychos drunk on their power to create what the dim consider money out of thin air, as well as rig interest rates, stock and commodity markets, and lie to their worshipers. We think that market forces will some day assert themselves and expose these financial masters of the world for what the really are, corrupt con artists.

The SNB capitulation was just that, not as MKing and others others imply, a studied move by some smart men. It was Forced upon them by the market, their imbecilic policy of tying their currency to a failing one the Euro was no longer possible. Their inability to keep the game going, after promising everyone they would continue to do so as recently as a few weeks before exposed VULNERABILITY.

The questions arising from such a unusual cave in by the Swiss opens up so many cans of worms and fears that it might well have been as Mr Stockman states "The Ringing Of The Bell" that of the great fiat con game ending.

Let me list a few confidence shattering things that come about from this to try and show how it may have been a move that sets off a chain of events that could result in financial mayhem.

Did they cave in because the know something we don't?

Is the problem with Greece insolvable and the people fleeing to the Swiss franc so overpowering that it broke them?

Do they surmise the end of the Euro shortly and decided to cut their massive losses short, as to continue buying Euro's would bankrupt the country, should it dissolve?

Did they see gigantic movements of capital in their banking system, as you pointed out Unc it is one of the world's most prominent, that horrified them as to it's implications?

Through their banking system and it's vast tentacles did they catch the dreaded wind of a major European bank collapse, Deutsche Bank comes to mind?

Of course this is a miniscule list of what could be going on, the possibilities are mind boggling as to Why the Swiss Emperor was forced to hurt his industry and markets and appear before the world stark naked bare ass.

Confidence is suspicion sleeping.

                                                         (http://www.hambastagi.org/new/images/stories/emperor_has_no_clothes.jpg)
Title: Bank of Canada Throws in the Towel on ‘Recovery’ Mem
Post by: g on January 21, 2015, 03:01:53 PM

Bank of Canada Throws in the Towel on ‘Recovery’ Meme

Another day, another central bank ‘shocks’ currency markets. Today it was the BOC’s turn, as Mr Poloz admitted Canada’s economy is tanking with the price of oil. Cutting the overnight rate by a token .25% to .75, the Canadian dollar index (FXC) is down just over 1.6% to a low last seen in the March 2009 depths of the great recession. The BOC did not mince words: while lower energy costs are good for some consumers, they are unequivocally bad for Canada. See: Bank of Canada ‘shocks’ market with rate cut. [4]

    “The bank warned that lower oil prices would take a sizeable bite out of economic growth in 2015, delay a return to full capacity and hurt business investment – a trend that has already triggered mass layoffs and production cuts in Alberta’s oil patch.

    But the effects could spread further, threatening financial stability as a result of possible losses to jobs and incomes, according to the central bank.

    “The oil price shock increases both downside risks to the inflation profile and financial stability risks,” the bank acknowledged. “The Bank’s policy action is intended to provide insurance against these risks.”

And all of this financial doom is predicated on the BOC’s still optimistic assumption of WTIC at $60 a barrel…a full 20% higher than the current level around $48, and 50% higher than WTIC’s potential $30 secular support range.

Although the mean reversion in oil prices was entirely probable, Canadian households and companies who have taken on record debt the past 5 foolish years, will take all of these adjustments very hard.

http://feedproxy.google.com/~r/fso/~3/JQKH_uioW7Q/bank-canada-throws-towel-recovery-meme (http://feedproxy.google.com/~r/fso/~3/JQKH_uioW7Q/bank-canada-throws-towel-recovery-meme)   :icon_study:
Title: Re: Big Slide v2.0 Begins Canadian Dollar Past Week
Post by: g on January 21, 2015, 03:13:15 PM

                                                   
canvsdllr
canvsdllr
Title: It's the CARRY TRADE, Stupid!
Post by: RE on January 23, 2015, 11:28:05 PM

The $9 Trillion US Dollar Carry Trade is Blowing Up

Phoenix Capital Research's picture



 

The US Dollar rally, combined with the ECB’s policies are at risk of blowing up a $9 trillion carry trade.

 

When the Fed cut interest rates to zero in 2008, it flooded the system with US Dollars. The US Dollar is the reserve currency of the world. NO matter what country you’re in (with few exceptions) you can borrow in US Dollars.

 

And if you can borrow in US Dollars at 0.25%... and put that money into anything yielding more… you could make a killing.

 

A hedge fund in Hong Kong could borrow $100 million, pay just $250,000 in interest and plow that money into Brazilian Reals which yielded 11%... locking in a $9.75 million return.

 

This was the strictly financial side of things. On the economics side, Governments both sovereign and local borrowed in US Dollars around the globe to fund various infrastructure and municipal projects.

 

Simply put, the US Government was practically giving money away and the world took notice, borrowing Dollars at a record pace. Today, the global carry trade (meaning money borrowed in US Dollars and invested in other assets) stands at over $9 TRILLION (larger than the economy of France and Brazil combined).

 

This worked while the US Dollar was holding steady. But in the summer of last year (2014), the US Dollar began to breakout of a multi-year wedge pattern:

 

 

Why does this matter?

 

Because the minute the US Dollar began to rally aggressively, the global US Dollar carry trade began to blow up. It is not coincidental that oil commodities, and emerging market stocks took a dive almost immediately after this process began.

 

 

 

This process is not over, not by a long shot. As anyone who invested during the Peso crisis or Asian crisis can tell you, when carry trades blow up, the volatility can be EXTREME.

 

The market drop in October was just the start. Once the US Dollar rally really begins picking up steam, we could very well see a crash.

Title: Fed-nado Crushes Stocks And Crude; Long Yields Hit Record Low
Post by: RE on January 28, 2015, 02:35:39 PM
(https://apparelbythetrend.com/wp-content/uploads/2013/06/its-on-like-donkey-kong.jpg)

RE

 

Fed-nado Crushes Stocks And Crude; Long Yields Hit Record Low

Tyler Durden's picture



 

How Treasury Shorts felt this afternoon...

 

What hungry stock market cheerleaders heard from The Fed...

 

Two words - Thanks Janet...

 

all dumping after a quick kneejerk hjigher post-FOMC

 

Dow dropped 400 points off the overnight highs!!

 

And S&P crushed 55 points from post-AAPL highs...

 

The S&P finished "not" off the lows...

 

S&P and Dow break below their 100DMA - we're gfonna need a Fed Speaker stat!

 

On the week, stocks are ugly.. withg Nasdaq leading the selloff

 

Which leaves everthing red year-to-date...

 

and Dow and S&P down since the end of QE3

 

The USDollar gained post FOMC but remains lower on the week...

 

Commodities had been weaker into the FOMC statement but gold outperformed post..

 

A lot of turmoiling today...

Crude was smashed to new cycle lows (after record supply, big build, and Fed)

 

Kiwi was monkey-hammered... (and has been since SNB as carry trades are unwound)

 

Treasury Yields collapsed 

 

to new record 30Y yield lows...

 

And finally, because a day like that would not be complete without it...

Title: Re: Big Slide v2.0 Begins
Post by: agelbert on January 28, 2015, 04:20:37 PM
(http://static.uglyhedgehog.com/upload/2012/8/14/1344970546338-awesome_mc_ht_smiley.gif)                (http://thumbs.dreamstime.com/z/chinese-emoticon-22648577.jpg)                        (http://www.freesmileys.org/emoticons/emoticon-object-098.gif)


Wall Street is

(https://excellentnotion.files.wordpress.com/2014/11/elvis-toast.jpg)


Title: Shades of Credit Anstalt!
Post by: RE on February 11, 2015, 11:19:55 PM
Austrian Bank?!?!?

Smells like Credit Anstalt Deja Vu all over again.

Quote from: Wiki
History

In 1820, Salomon Mayer von Rothschild (1774-1855) established a first bank in Vienna, then the capital of the Austrian Empire. In the course of early industrialisation, the Rothschild bank financed large development projects, such as the building of the Emperor Ferdinand Northern Railway to the Moravian mining regions. Rothschild also acted as generous lender to Austrian state chancellor Prince Klemens von Metternich and granted copious credits to the Bohemian and Hungarian aristocracy.
Austria-Hungary
Former Creditanstalt headquarters, Vienna

The Creditanstalt itself was founded in 1855 by Salomon Mayer's son Anselm von Rothschild as K. k. priv. Österreichische Credit-Anstalt für Handel und Gewerbe (approximately translated as: Imperial royal privileged Austrian Credit-Institute for Commerce and Industry). Being very successful, it soon became the largest bank of Austria-Hungary.

Anselm's son Albert Salomon von Rothschild assumed the direction of the Credit-Anstalt in 1872, succeeded by Louis Nathaniel von Rothschild in 1911. In 1912, the new headquarters in Vienna's Innere Stadt central district opened in a lavishly decorated Neoclassical building, which is still preserved to the present.
First Republic

The business situation dramatically changed with Austria's defeat in the First World War and the dissolution of the Austro-Hungarian monarchy and empire. In the late 1920s, a principal debtor, the Steyr-Werke AG faced financial difficulties, with bad loans leading to a drain on finances. In October 1929, the Austrian Schober government compelled the allegedly well-financed Credit-Anstalt to assume liabilities, which together with the simultaneous Wall Street Crash led to the financial imbalance of the then-largest Austrian credit provider.

Creditanstalt had to declare bankruptcy on 11 May 1931. This event resulted in a global financial crisis and ultimately the bank failures of the Great Depression.[2]:2–3 [3][4] Chancellor Otto Ender had the CA ultimately rescued by distributing the enormous share of costs between the Republic, the National Bank of Austria and the Rothschild family. Nationalization plans advanced by the Social Democrats were rejected. However, the institute was de facto state-owned after Chancellor Engelbert Dollfuß in 1934 ordered the merger of the institute with the Wiener Bankverein, thus changing its name to Creditanstalt-Bankverein. The Creditanstalt bankruptcy and its impact in producing a major global banking crisis provided a major propaganda opportunity for Adolf Hitler and the Nazi Party: it allowed them to further blame Jews for German and international economic and social troubles [1].

Getting Spookier by the minute.

RE

Austria's 3rd Largest Bank Goes Full Bear Stearns: CEO Blames "Short Sellers" For Firm's Demise

Tyler Durden's picture



 

You know it's bad when... you start blaming speculators. Very reminiscent of the "it's not us, we have a solid balance sheet, it's the short selling speculators" bullshit in the days before and after the stock crashes of American Insurance Group, Bear Stearns, Lehman Brothers and Merrill Lynch; mere days after his bank's bonds crashed, the CEO of Raiffeissen Bank (Austria's 3rd largest) has stated (unequivocally) that "panic was created artificially," blaming short-sellers for his bank's demise.

RBI CEO Svelda tells DiePresse.com,

"This panic was created artificially to a certain degree.

 

25 percent of our free float was shorted. As some have speculated neatly on falling prices and our share beaten down properly.

 

And the whole thing because of an initial loss of 493 million euros?"

Yep all short-sellers...

 

Nothing to do with worries about Swiss Franc mortgages... As Bloomberg reports, Raiffeisen had a total of 4.3 billion euros of Swiss franc loans outstanding as of September 2014, according to estimates by Moody’s Investors Service.

The largest part of these are in Poland, where the franc has appreciated 17 percent against the zloty since Jan. 14, threatening to push up defaults on the bank’s 2.9 billion euros of mortgages in the Swiss currency.

 

“There’s a lot of people worried about the bank’s Swiss-franc mortgages in eastern Europe,” said Gregory Turnbull Schwartz, who helps oversee the equivalent of about $82 billion at Kames Capital in Edinburgh and doesn’t hold Raiffeisen bonds.

 

Raiffeisen said Jan. 15 that it can’t yet forecast the effects of the appreciation of the franc on its asset quality.

 

The bank “will certainly take one measure or the other in the near future,” Chief Executive Officer Karl Sevelda told reporters on the sidelines of the Euromoney CEE conference in Vienna today. He declined to elaborate. Franc loans in eastern Europe are “not a big problem,” he said.

And just forget about the fundamentals...

The plunge appears focused on the potential capital shortfalls and talk of the bank selling its Russian unit - both have been denied... (as Reuters reports),

Raiffeisen Bank International has no desire to exit the Russian market, Chief Executive Karl Sevelda told a newspaper in response to market rumours it could sell its lucrative Russian business.

 

The Austrian lender has "absolutely no intention to sell our Russian bank", he told Der Standard in a report printed on Tuesday. A bank spokeswoman confirmed his remarks.

 

He was responding to Russian media reports that Raiffeisen was in talks with Alfa Bank about a potential sale. Sevelda dismissed these "unfounded rumours" and said Raiffeisen had "absolutely no contact" with Alfa Group.

 

Raiffeisen, which is conducting a strategic review of its portfolio, said this month losses for 2014 could surpass 500 million euros ($561.5 million) if it had to write down goodwill in Russia, its single most profitable market.

 

The spokeswoman also confirmed the paper's report that Chief Financial Officer Martin Gruell had denied market talk Raiffeisen may need to raise capital. It raised about 2.8 billion euros a year ago via a rights issue.

*  *  *

Title: Re: Shades of Credit Anstalt!
Post by: RE on March 03, 2015, 10:02:19 PM
Austrian Bank?!?!?

Smells like Credit Anstalt Deja Vu all over again.

The Austrian banking fiasco is spiraling upward.  It looks likely to BK the entire Carinthia Region.  This one could beat the Grexit for setting off a systemic banking crisis.

Quote
The biggest bondholders are Deutsche Bank’s DWS Investment, Pimco, Kepler-Fonds and BlackRock. The World Bank also owns €150bn of Hypo debt.

This isn't Chump Change even by today's standards.   That represents a lot of rehypothecated assets given how levered up all these banks are.  Add in the CDS Derivatives, it's definitely enough to set off s systemic shock wave.

RE

Eurozone faces first regional bankruptcy as debt debacle stalks Austria's Carinthia

Fitch has stripped Austria of its AAA rating, adding that 'within a short space of time the debt dynamics of Austria have deteriorated significantly'

     
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young families skiing, in the background Dachstein Mountain, Reiteralm, Styria, Alps, Austria
The 550,000-strong province on the Slovene border must fend for itself as losses spin out of control Photo: Alamy
 

The Alpine region of Carinthia faces probable bankruptcy after Austria’s central government refused to vouch for debts left by a disastrous banking expansion in eastern Europe and the Balkans.

It would be the first sub-sovereign default in Europe since the Lehman Brothers crisis, comparable in some respects to the bankruptcy of California's Orange County in 1994 or the city of Detroit in 2013.

Austria’s finance minister, Jörg Schelling, said Vienna would not cover €10.2bn (£7.4bn) in bond guarantees issued by the Carinthian authorities for the failed lender Hypo Alpe Adria, or for the "Heta" resolution fund that succeeded it. This leaves the 550,000-strong province on the Slovene border to fend for itself as losses spin out of control.

“The government won’t waste another euro of taxpayer money on Heta,” he said, insisting that there must be an end to moral hazard. The Hypo affair has alredy cost taxpayers €5.5bn. The Austrian state has said it will cover €1bn of its own guarantees “on the nail” but nothing more.

Sources in Vienna suggested that even senior bondholders are likely to face a 50pc writedown, becoming the first victims of the eurozone’s tough new “bail-in” rules for creditors. These rules are already in force in Germany and Austria, and will be mandatory everywhere next year.

“We are at a very delicate phase when Europe’s banking system switches from a bail-out regime into a much tougher bail-in regime, and Austria has just thrown this into sharp relief,” said sovereign bond strategist Nicholas Spiro. The biggest bondholders are Deutsche Bank’s DWS Investment, Pimco, Kepler-Fonds and BlackRock. The World Bank also owns €150bn of Hypo debt.

Austria’s banking regulators surprised markets by intervening over the weekend to wind down Heta and suspend debt payments until 2016 after discovering a further shortfall in capital of €7.6bn. The surge in the Swiss franc in January after the collapse of Switzerland’s currency floor against the euro appears to have been the last straw, setting off another wave of likely losses from eastern European mortgages denominated in francs.

“This is getting bigger and bigger,” said Marc Ostwald from Monument. “They kept kicking the can down the road but it is finally catching up with them, and Heta won’t be the last. There is a whiff of the Irish situation in this story. Carinthia stood as guarantor for debts that it could not possibly cover,” he said. There are many regions that could slide into difficulties, including Belgium's Wallonia, or the Italian region of Sicily.

The Hypo bonds were underwritten in the boom years before the Lehman crisis by Austria’s populist leader Jorg Haider, then governor of Carinthia, leaving it to a subsequent social democrat team in Klagenfurt to sort out the mess.

Carinthia’s governor, Peter Kaiser, said his government is not liable for the debts unless Heta is definitively declared bankrupt – as opposed to just a moratorium - and vowed to defend his region in the courts. He warned that Carinthia would face a “dramatic situation” if bankruptcy does in fact go ahead, as widely expected.

Austria has not suffered any immediate fallout from Heta’s latest woes. It was able to sell five-year bonds on Tuesday at yields below zero for the first time ever as investors scramble to amass EMU sovereign debt before the European Central Bank launches quantitative easing next week. The ECB aims to buy €60bn of bonds each month, but there is already a chronic shortage of assets available on the market.

The IMF says Austria is lagging on reforms

This "QE-effect" masks the underlying reality that Austria is no longer a blue-chip borrower. Fitch stripped the country of its AAA rating last month, cutting it one notch to AA+. “Within a short space of time the debt dynamics of Austria have deteriorated significantly,” it said.

The agency said the debt ratio was likely to peak at 89pc of GDP this year – 15 percentage points higher than expected just 18 months ago – due to the lingering effects of the banking crisis and weak growth in nominal GDP. The various bank bail-outs have cost 11pc of GDP, twice as bad as Britain’s travails.

Fitch warned that Austrian bank exposure to Russia, Ukraine and the rest of eastern Europe is €194bn, or 59pc of the country’s GDP, though part of this is acting as a conduit for investors in western Europe.

William Jackson, from Capital Economics, said Austrian banks face a double squeeze as borrowers in Hungary and the Balkans struggle with both deep property slumps and a slide in their local currencies. “These foreign currency debts are a slow-burn issue. The non-performing loans emerge over time,” he said.

The International Monetary Fund said in its latest healthcheck on Austria that three large banks – Raiffeisen, Erste and Volksbanken – are vulnerable to any shocks. “Risks remain elevated. Bank profitability suffers from rising non-performing loans, risk costs and write-offs,” it said.

The IMF said Austria’s reforms have largely stalled. The country has one of the highest barriers to services in Europe, the worst subsidies at 3.75pc of GDP, the highest tax share on labour at 58pc, a high rate of early retirement, and high state spending at 52pc of GDP, compared with 45pc in Germany.

While Austria remains a rich and successful country, it is slithering towards the bottom of the reform league. France looks less sluggish by comparison, and Greece looks almost Thatcherite.

Title: D-Day: 6 Days & Counting for Bond Market Dislocation
Post by: RE on March 10, 2015, 11:55:28 PM
EconMatters from ZH has SNAPPED!

He's predicting TEOTWAWKI in 6 DAYS!

He might be right, but he's definitely putting his credibility on the line with that timeline.

RE

Six Days Until Bond Market Crash Begins

 

Submitted by EconMatters on 03/10/2015 17:17 -0400

By EconMatters

 
  

Run for the Exits

Today early in the morning,  realizing this was going to be a robust selloff in equities, the ‘smart money’, i.e., the big banks, investments banks, hedge funds and the like, ran to the old staple of buying bonds hand over fist with little regard for the yield they are getting paid for stepping in front of the freight train of rate rises coming down the tracks.

 


FOMC Meeting & Press Conference

 

Just six days away from the most important FOMC meeting in the last seven years, and another 300k employment report in the rear view mirror, this looks like an excellent place to hide for nervous investors who have far more money than they have grains of common sense. Newsflash for these investors, yes markets are over-valued, and you need to get out of Apple, and about 100 other high flying overpriced momentum stocks, but you can`t hide out in bonds this time.  That party is over, and next Wednesday`s FOMC meeting is going to make this point abundantly clear.


Read More >> The Bond Market Has Reached Tulip Bubble Proportions


Cash is King

 

 

There is no place to hide except cash.  You should have thought about that before you gorged yourself on ZIRP to the point where you have pushed stocks and bonds to unsupportable price levels, and you keep begging for the Fed to stall just another six months, so you can continue to buy more stocks and bonds. Well you have done an excellent job hoodwinking the Fed to wait until June, you should thank your lucky stars you have done such a good job manipulating the Federal Reserve; but just like the boy crying wolf, this strategy loses its effectiveness over time.


Red More >> Cushing and Gulf Coast Storage Filling Up Fast 


Throwing another temper tantrum right before another important FOMC meeting hoping that Janet Yellen will be alarmed by these Pre-FOMC Selloffs to put off another six months the inevitable rate hike, this blackmail strategy has run its course.  The Fed is forced to finally start the Rate Hiking Cycle after 7 plus years of Recession era Fed policies by an overheating labor market.

 

Denial is a Powerful Drug

 

 

You knew this day was going to come, but most of you are still in denial.  What the heck were you buying 10-year bonds with a 1.6% yield five months before a rate hike?? You only have yourself to blame for the 65 basis point backup in yields on that disaster of an “Investment”. But really what were you thinking here??  That is the problem when the Fed has incentivized such poor investment decisions and poor allocation of capital to useful, growth oriented projects over the past 7 plus years of ZIRP that these ‘investors’ don`t think at all, they have become behaviorally trained ZIRP Crack Addicts!

 

But the Dollar is Strong, our Currency is holding too much of a store of its value

 

 


They can cry over the strong dollar, have a couple of 300 point Dow Selloffs, scare monger over Europe or Emerging Market currencies, but the fact is that the due date has come on your stupidity. You bought all this crap, and now you have to sell it! Well too freaking bad, boo hoo, you shouldn`t have bought so many worthless stocks and bonds at unsustainable levels in the first place.  Well the Fed cannot save you from your stupidity forever, and that day of reckoning has finally come, rates are going to rise in the United States of America!

 

Read More >> The Fed Waited Too Long: Here Comes Inflation

 

 

D-DAY for Bondholders

 

Six more days and counting until all those hiding out in Bonds will start to realize that the Fed Funds Rate is going to be higher than their precious yield play of the worthless paper that they are holding onto for dear life.  Like a junkie in a state of denial with their crack pipe and there's no more ZIRP to save them from their poor investment decisions. You play with fire long enough, and eventually you get burned!

 

 


I have no sympathy for anybody who buys bonds at these levels, this isn`t sound investing, this is just pure stupidity.  The last six weeks we are witnessing just the first stages of this stupidity play out in the bond market. This backup in yields is just getting started here in the United States, the storm is really going to get dark once 10-year yields break above the 2.38% resistance level.  The stops alone are going to move yields to 2.7% on the 10-Year.  Then the fun is just getting started for all those stuck on the wrong side of this trade. In two years the Fed Funds Rate itself will be 3%, where do they think that leaves 10-Year Yields?

Read More >> The Swiss 10-Year Bond Illustrates Central Banks` Flawed Monetary Policy


 

So Many Stuck little Sheep Bond Holders

 

The positioning for this inevitability is as poor as I have seen in any market.  The carnage in the bond market is just going to be gruesome, the denial is so strong, the lack of historical perspective of what normal bond yields look like, and what a normalized economy represents where savers actually get paid to save money in a CD or checking account. The fact that the Fed has so de-sensitized investors to what a normalized rate economy and healthy functioning financial system looks like is probably one of the biggest drawbacks of ZIRP Methodology.

 

 

The Federal Reserve, and now the European Union have set the stage for the biggest collapse in bond markets that will make the sub-prime financial crisis look like a cakewalk.  This is what is really going on in markets, investors who bought too many expensive stocks trying to get out before the FOMC Meeting next Wednesday.  But you aren`t going to be able to hide out in Bonds this time, better find another alternative because the clock is ticking on that trade as we speak!

Title: Crispin Odey Shorts the Phone Book
Post by: RE on March 11, 2015, 03:07:28 PM
Crispin will soon have $Billions$ more worthless assets!

One wonders how the people taking the other side of the trade will pay off?

RE

"We Have Front-Row Seats To An Imminent Market Shock", Hedge Fund Billionaire Warns (http://www.zerohedge.com/news/2015-03-11/we-have-grandstand-seats-imminent-market-shock-hedge-fund-billionaire-warns)

Submitted by Tyler Durden on 03/11/2015 17:30 -0400
 

Having previously noted that "this is the best shorting opportunity since 2007-9," Billionaire hedge fund manager Cripsin Odey warns that (just as Goldman has noted) the global economy is h"eaded for recession and central banks will not be able to able to come to the rescue because they have exhausted the arsenal of policy weapons." No matter what happens, he chides, the market shrugs it off as they are "kind of relying on central banks pulling a rabbit out of a hat." They will not, "Central banks are not all singing and all dancing," and cannot avoid the consequences of what they are doing, concluding, "you and I have got grandstand seats here [to an imminent market shock]," and investors are about to "find out just how illiquid it really is out there."

One of the world's leading hedge fund managers has warned that global economies are headed for recession and central banks will not be able to able to come to the rescue because they have exhausted the arsenal of policy weapons. As The Sydney Morning Herald reports,

    Mr Odey is best known for his big macroeconomic calls, including foreseeing the 2008 global credit crisis; piling into insurers in the wake of September 2001 attacks; and picking the recent oil price rout. He famously paid himself £28 million in 2008 after shorting credit crisis casualties, including British lender Bradford & Bingley. Mr Odey's fund returned 54.8 per cent that year.

     

    "The market's reaction to all of this is leave it to the professionals, leave it to those great guys, the central bankers, because they saved the day in 2009," he said. "These guys are kind of relying on central banks pulling a rabbit out of a hat."

     

    The risk is that this time, monetary policy may be ineffective: "We need the crisis to reformulate policy. Central banks are not all singing and all dancing, they cannot basically avoid the natural consequences of what we are doing."

     

    An inadequate supply-side response to the plunge in commodity prices as the resources industry declines to reduce production was in effect stimulating supply into falling demand.

     

    "The trouble is today the players, whether they are the miners or the oil companies or the Saudis or anybody else, they are not doing the right things. This is the first time in my career where economics 101 doesn't work at all."

     

    But it was also true that the world has not had a major recession for 25 years and thanks to frequent interventions, "there is a sensation we don't have a business cycle". Stocks are enjoying a six-year bull market but he also hinted at liquidity issues bubbling under the surface.

     

    "I just think that you and I have got grandstand seats here [to an imminent market shock] and my point is having found myself in the second quarter of last year selling a lot of equities and starting to go short, I found out just how illiquid it all was. You never actually see it until people try and get out of these things."

     

    It was unclear to Mr Odey what central banks could do to prevent a crash.

     

    "I find it intriguing that we are so dependent on these central banks who are expected to do great things and yet what can they do? They start with interest rates pretty well at zero."

     

    He believes the US Federal Reserve will be motivated to begin the tightening cycle.

     

    "You're going to be very tempted to raise interest rates simply because you want to normalise," he said. "There is a sense in which these guys are longing to try and stop some of this activity taking place as well as getting the situation back to some kind of normalcy.

     

    "My view is hey look, if they do raise interest rates, I don't even need it to happen but I do think that will put a bit of pressure on the sharemarket as well... Everything points to it being a bubble. You can never know the height of a bubble but by the time it gets to here you haven't got much time."

     

    Mr Odey's fund in Australia is called Odey International Fund (OIF) and employs the same investment strategy as his flagship global long/short hedge fund, which has a 22-year track record and has returned approximately 14 per cent per annum net of all fees. OIF has returned 22.9 per cent since inception on July 29, 2014.

     

    Odey Asset Management is identifying short opportunities amid the fervour of the six-year rally and huge currency fluctuations are factoring in to the fund's positions.

     

    "For me, what I find very interesting is given the risk of recession, how is it the West stockmarket can be hitting all-time highs? History tends to be not very generous in this regard. If you get a recession in a low inflation environment it tends to impact the ratings of stocks dramatically."

     

    It was akin to "watching the markets take drunken bow after drunken bow".

     

    "It's amazing that nobody else is on the same page."

*  *  *

As he previously concluded, we are in the first stage of this downturn. It is too early to see what will happen – a change of this magnitude means the darkness and mist is very great. We will make some mistakes but with our thinking we won’t make the major mistakes. The problem is where you stand – I am amazed to see so many are fully invested given that equities are already fighting the downtrend.

So, where am I placing my money?
 

    Firstly, I think equity markets will get devastated. Unannounced business cycles ensured Japan’s stock market rating fell by two thirds over 20 years.
    Equities are priced for perfection, pushed up by SWF and high yield investors looking for higher yields and better covenants than high yield bonds.
    Commodity-related sectors look unappealing and dangerous.
    International consumer companies look overexposed to EMs.
    Fund management companies look overexposed to the wrong assets, especially EMs.
    Volatility is rising. Not every trade will work.
    Australia is still to see rates down to 0.5% at the short end, 1.5% at the long end, down from 2.5% currently.
    Currency trading is still to make the money. It made money last year as it was where the ‘tyres hit the road’ – equities are just the residual.
    Equity markets will struggle to understand the quarterly translation and transaction effects of these currency moves on corporate profits, starting with Q1 2015.

We have seen though some strange things, with economics 101 turned on its head. We’ve seen that falling prices produce more supply, as the biggest producers see that they can take market share and use the opportunity by reducing average costs through excess production. We’ve seen that in the oil, minerals and iron ore industries. We have also seen in the last couple of years that as bond yields fall, governments are able to issue more debt.

But this time round the problem we have as well is that politics will start to rear its head and we are left to deal with politicians who are increasingly critical of the capitalist system’s ability to allocate capital and provide for society.

For me the shorting opportunity looks as great as it was in 07/09.
Title: Re: Shades of Credit Anstalt!
Post by: RE on March 15, 2015, 09:39:43 PM
Austrian Bank?!?!?

Smells like Credit Anstalt Deja Vu all over again.

The Austrian Black Swan Claims Its First Foreign Casualty: German Duesselhyp Collapses, To Be Bailed Out (http://www.zerohedge.com/news/2015-03-15/austrian-black-swan-claims-its-first-foreign-casualty-german-duesselhyp-collapses-be)

Submitted by Tyler Durden on 03/15/2015 16:53 -0400

    Bad Bank
    Black Swan
    Eurozone
    Failure Fridays
    Fitch
    Germany
    ratings
    Reuters
    Unemployment
 

Precisely one week ago in "A Black Swan Lands In Southern Austria: The Ripple Effects Of "Mini-Greece Going Off In The Heartland Of Europe", when analyzing the consequences of the collapse of Austria's bad bank, we noted perhaps the biggest paradox of Europe's emergency preparedness response to the Greek collapse and imminent expulsion from the Eurozone: namely that the biggest threat to German banks was no longer in some Mediterranean nation, but in its very own back yard. To wit:

    Irony #2, and the biggest one of all: while German banks had spent the past 3 years preparing for the inevitable Grexit and offloading all their exposure to the now insolvent Greek state, it was a waterfall chain of events which started in Germany's own "back yard", courtesy of auditors who decided it was unnecessary to mark losses to market until it was far too late, and the immediate outcome is that one ninth of until recently Aaa/AAA-rated Austria is now also insolvent. And that is just the beginning.

     

    One can only imagine how many such other "0% risk-weighted" Pandora boxes lie in wait across what are otherwise considered Europe's safest banks, provinces and nations.

Indeed, it was just the beginning, and moments ago we got confirmation that the next domino has tipped over, following a Reuters report that Germany's deposit protection fund will take over the property lender Duesseldorfer Hypothekenbank AG (DuesselHyp), which has "run into problems" due to its exposure to Austrian lender Hypo Alpe Adria's "bad bank" Heta.

And while in the US FDIC Failure Fridays works like a well-greased machine, Germany has yet to get the hang of the whole "save the bad news for Friday after market close" thing and has for now has stopped on "Shocker Sundays."

Then again, this being Europe, denial persists even after the moment of failure, and according to Reuters, "the German banking association BdB, which runs the fund, is, however, not planning to wind down the bank, but wants to continue its operations."

    "The deposit protection fund is granting a guarantee for the Heta bonds to eliminate the immediate risks. The goal is a complete takeover of Duesseldorfer Hypothekenbank," the BdB said in a statement on Sunday.

We described the consequences from the Heta fallout in minute detail last week, but for those who missed it, here are the Cliff notes:

    Regulators this month took control of Heta and imposed a debt moratorium until May 2016 after an outside audit found writedown needs that blew a hole of up to 7.6 billion euros in its balance sheet. This leaves holders of Heta debt in limbo and facing the prospect of losses.

     

    Heta could still be declared insolvent despite plans to wind it down, the Austrian regulator FMA has said, a move that could hit German banks harder than many of their Austrian rivals.

     

    After regulators took control of Heta, the ratings agency Fitch said last week that DuesselHyp was in urgent need of capital support.

     

    In its 2013 annual report, DuesselHyp said it had 348 million euros ($365 million) in Hypo Alpe Adria debt.

So a partial impairment on $365 million in debt is enough to send a German bank, which according to its latest interim financial report, had €10.9 billion in assets, into full out insolvency? As if the ECB's farcical stress tests needed any further validation they are nothing but the worst possible joke on Europe's depositors Goldman's head of the ECB could have conceived.

As for the biggest winner from today's surprise announcement, London-based Attestor which until this moment was supposed to buy the German bank. Talk about saved by the "bank failure"... and due diligence.

    The planned takeover by the BdB also means that a planned sale of DuesselHyp to group of international buyers led by London-based Attestor is no longer being considered, a source familiar with the situation said.

One can almost see why. As for the guy who looked at DuesselHyp's balance sheet and "wisely" concluded it is worth X, good luck finding a job. Don't worry though, many more "analysts" at other banks will be joining you in the unemployment line as more European banks admit they are insolvent when a world that is "priced to perfection" is revealed to have been anything but.

Because if a 1.5% write down in the assets of a supposedly well-capitalized German bank can lead to almost overnight insolvency, one can almost imagine what will happen when the Austrian black swan wave reaches Europe's actually "undercapitalized" banks...
Title: Zero Hedge Top Day EVAH for Doom Newz!
Post by: RE on March 18, 2015, 08:26:24 AM
Check out this fucking list of storiez!  Total fucking INSANITY!  This is just the front page too!  Greece, China, VIX, you got it ALL here!

This is getting REALLY GOOD!

RE

ECB Prepares For Grexit, Anticipates 95% Loss On Greek Debt

Dear Greek readers: the writing is now on the wall, and it is in very clear 48-point, double bold, and underlined font: when the ECB "leaks" that it is modelling a Grexit, something Draghi lied about over and over in 2012 and directly in our face too, take it seriously, because it is time to start planning about what happens on "the day after." And incidentally to all those curious what the fair value of peripheral European bonds is excluding ECB backstops, the ECB has a handy back of the envelope calculation: a 95% loss.


 
Tyler Durden's picture

Surprise: Tech Company Valuations Are Completely Made Up

We thought private tech company valuations looked ridiculous, but as the VC world will patiently explain to you, things like cash flow and operating costs actually don't matter, and "valuation" doesn't mean what you thought it meant. 


 
Tyler Durden's picture

WTI Slumps As Cushing Inventory & Production Hit New Record High

Following last night's massive 10.5mm barrel build (according to API), this morning's DOE inventories data was highly anticipated (with an expectation of just over 5 million barrels). It did not disappoint... printing at 9.622 million barrel inventory build, this is now the fastest inventory build on record... with record total inventory and record Supplies at Cushing. Storage concerns are growing. But, despite the collapse in rig counts, high-grading and cash-flow deparation remains as crude production also hit a new record high.


 
Tyler Durden's picture

WTI Nears $41 Handle After Saudi Comments

WTI is now down over $2 from the massive API inventory build last nihgt and is testing down to a $41 handle. The latest leg is not halped by Saudi officials' comments that it "will not interfere with the oil market," and that "the oil market will fix itself," as they continue the line taken at the last OPEC meeting and pressure US Shale even further.


 
Tyler Durden's picture

VIX Just Flash-Crashed

We suspect any second now, one (or all) of the exchanges will break as VIX just flash-crashed from 16 to 13.69...


 
Tyler Durden's picture

Grexit Contagion Resumes After IMF Slams "Most Unhelpful Client Ever"

Draghi, we have a problem. Despite the omnipotent buying power of the all-knowing ECB, peripheral European bond spreads are blowing out again (and stocks dropping) as Grexit fears start to spread contagiously across the continent. As Greece's cash crunch looms ever closer (with capital controls looming) and bulls "throw in the towel" on the "nuts" Greeks, the IMF has come out and rubbed Mediterranean salt into that wound by telling the Eurogroup that Greece is the most unhelpful country the organization has dealt with in its 70-year history. As Bloomberg reports, in a short and bad-tempered conference call on Tuesday, officials from the 'Troika' complained that Greek officials aren’t adhering to a bailout extension deal leaving Dijsselbloem hinting at Cypriot templates for Greece.


 
Tyler Durden's picture

Crash Landing: China Home Prices Plunge At Fastest Pace On Record, Surpass Post-Lehman Collapse

Less than three weeks ago, when the PBOC proceeded with its latest "surprise" rate cut, we showed a chart that should scare everyone who is hoping that China will avoid a hard-landing would prefer would never have been revealed: the annual collapse in Chinese home prices is now so sharp and so widespread, that it has surpassed the housing collapse in the aftermath of the Lehman collapse." Overnight things went from bad to worse, when China's National Bureau of Statistics reported that contrary to hopes for a modest rebound, China's average new home prices fell at the fastest pace on record in February from a year earlier.


 
Tyler Durden's picture

Sweden Slides Further Into NIRP: Cuts To -0.25%; Expands QE

Ahead of The Fed's 'impatience' today, and amid a tumbling EUR, the oldest central bank in the world has decided it is time to go further into the illustrious ranks of NIRP/QE'ers:

*RIKSBANK CUTS KEY RATE TO -0.25%, TO BUY GOVT BONDS FOR SK30 BLN

So as opposed to Denamrk's roundabout QE, Sweden just jumps in and monetizes that debt direct by expanding their QE program and shifts from small NIRP to bigger NIRP. All this while suggesting the labor market is strengthening and inflation has bottomed out. The reaction - SEK is plunging and OMX surges.


 
Tyler Durden's picture

Unequivocally Good? Canadian Wholesale Trade Sales Crash By Most Since Jan 2009

No US data today but we thought this worth sharing from 'up north'. As BoC comes to grips with non-economic tar sands, Canada's Wholesale Trade Sales collapsed 3.1% MoM in January - the biggest drop since January 2009 (and second biggest in a decade).  Low oil prices are unequivocally good though remember...


 
Tyler Durden's picture

Stocks Down, Dollar Down, Crude Down, Bond Yields Down, Fed Impatient

Well that escalated quickly. What gains were achieved yesterday in equity markets (or v-shaped recoveries) have been dismissed this morning as stocks test Tuesday's lows tumbling as Europe got into swing and Greek fears surged (along with peripheral bond spreads).  Treasury yields are pushing on lower past 5Y maturity (10Y approaching 2% again) but 2Y higher, as the dollar limps lower. WTI Crude remains in the low $42s after last night's API inventory build. All in all, it appears markets are starting to be resigned to the impatient Fed's actions today.

Title: Re: Big Slide v2.0 Begins
Post by: azozeo on March 18, 2015, 12:27:05 PM
Is it time to load up the wagon & head for the hills ?
Title: Re: Big Slide v2.0 Begins
Post by: MKing on March 18, 2015, 07:11:43 PM
Is it time to load up the wagon & head for the hills ?

Smell the fear can you? Now if we can just get the market in the US to react with EXACTLY that thought in mind.
Title: Re: Big Slide v2.0 Begins - US Imports Collapse Most Since Lehman
Post by: g on April 04, 2015, 04:30:17 AM
By Tyler Durden
Created 04/02/2015 - 09:04

     
   US Imports Collapse Most Since Lehman

  Anyone scratching their head how it is possible that in an environment of a soaring dollar the US trade balance just tumbled, and printed its smallest monthly deficit since 2009, here is the answer: in January, US imports (with the delta entirely in the goods, not services, column) plunged from $232 billion to $222 billion, a whopping $10.2 billion or 4.4% drop, and the biggest monthly decline in US imports since the peak of the financial crisis in the aftermath of the Lehman collapse.

The irony: since exports also dropped but did not plunge quite as rapidly, this disturbing number will actually be a boost to US Q1 GDP, which as reported recently, is now tracking at 0.0% with the Atlanta Fed.

                                      (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/US%20imports%20February.jpg)

  And now time for a question: with US and Chinese imports both plunging, just who is Europe "exporting" all of those surplus goods and services to?  :icon_study: :icon_scratch: :icon_scratch:

  http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/US%20imports%20February.jpg (http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/03/US%20imports%20February.jpg) :icon_study:
Title: Re: Big Slide v2.0 Begins - US Imports Collapse Most Since Lehman
Post by: jdwheeler42 on April 04, 2015, 04:49:48 AM
By Tyler Durden
Created 04/02/2015 - 09:04

     
   US Imports Collapse Most Since Lehman

  Anyone scratching their head how it is possible that in an environment of a soaring dollar the US trade balance just tumbled, and printed its smallest monthly deficit since 2009, here is the answer: in January, US imports (with the delta entirely in the goods, not services, column) plunged from $232 billion to $222 billion, a whopping $10.2 billion or 4.4% drop, and the biggest monthly decline in US imports since the peak of the financial crisis in the aftermath of the Lehman collapse.
Makes perfect sense when you look at it with demand destruction being the driving force, and the soaring dollar being a consequence.  Fewer imports -> fewer dollars leaving the US -> less supply of dollars internationally -> higher price for dollars.
Title: Re: Big Slide v2.0 Begins - US Imports Collapse Most Since Lehman
Post by: Surly1 on April 04, 2015, 04:56:11 AM
By Tyler Durden
Created 04/02/2015 - 09:04

     
   US Imports Collapse Most Since Lehman

  Anyone scratching their head how it is possible that in an environment of a soaring dollar the US trade balance just tumbled, and printed its smallest monthly deficit since 2009, here is the answer: in January, US imports (with the delta entirely in the goods, not services, column) plunged from $232 billion to $222 billion, a whopping $10.2 billion or 4.4% drop, and the biggest monthly decline in US imports since the peak of the financial crisis in the aftermath of the Lehman collapse.
Makes perfect sense when you look at it with demand destruction being the driving force, and the soaring dollar being a consequence.  Fewer imports -> fewer dollars leaving the US -> less supply of dollars internationally -> higher price for dollars.

My first thought went to demand destruction as well.  Also to the thought that J6P  is pretty thoroughly tapped out, and most people are working hard to reduce their personal debt loads.

Yet the $64,000 question remains:
Quote
With US and Chinese imports both plunging, just who is Europe "exporting" all of those surplus goods and services to?
Title: Re: Big Slide v2.0 Begins - US Imports Collapse Most Since Lehman
Post by: g on April 04, 2015, 05:20:07 AM
By Tyler Durden
Created 04/02/2015 - 09:04

     
   US Imports Collapse Most Since Lehman

  Anyone scratching their head how it is possible that in an environment of a soaring dollar the US trade balance just tumbled, and printed its smallest monthly deficit since 2009, here is the answer: in January, US imports (with the delta entirely in the goods, not services, column) plunged from $232 billion to $222 billion, a whopping $10.2 billion or 4.4% drop, and the biggest monthly decline in US imports since the peak of the financial crisis in the aftermath of the Lehman collapse.
Makes perfect sense when you look at it with demand destruction being the driving force, and the soaring dollar being a consequence.  Fewer imports -> fewer dollars leaving the US -> less supply of dollars internationally -> higher price for dollars.

My first thought went to demand destruction as well.  Also to the thought that J6P  is pretty thoroughly tapped out, and most people are working hard to reduce their personal debt loads.

Yet the $64,000 question remains:
Quote
With US and Chinese imports both plunging, just who is Europe "exporting" all of those surplus goods and services to?

It's difficult to pinpoint with all the figure that are outright lies, and the violence in currency swings. One thing is certain though, Joe six is in a world of pain, the poor bastard has to take out a mortgage now of 7 years or more just to buy a car to get to his job if he has one. And we all know gents where the pigs sent the good jobs too.

How can there not be some big trouble around the corner, just from that alone?  :icon_scratch: :icon_scratch:
Title: Revolving Debt Crashes Most In Four Years, As Student, Car Loans Go Exponential
Post by: g on April 07, 2015, 04:50:36 PM
Revolving Debt Crashes Most In Four Years, As Student, Car Loans Go Exponential; Bank Lending Freezes
By Tyler Durden


  There was only bad news in the just released [4]Fed consumer credit report for the month of February.

First, the "good credit", the one that consumer should load up on when they feel comfortable about the future, i.e., credit card, or revolving debt, continued its recent plunge, and in February crashed by $3.7 billion, following January's $1 billion plunge. This was the worst month for revolving credit since December 2010 and explains perfectly why the consumer has literally gone into hibernation - it has nothing to do with the weather, and everything to do with the unwillingness to "charge" purchases, which in turn is a clear glimpse into how the US consumer sees their financial and economic future.

This plunge, however, was more than offset by a surge in "bad" credit, the type that even Obama wants to do away with, namely non-revolving credit, mostly student and to a lesser extent auto credit. In February, this debt funded almost exclusively by the US government, soared by $19.2 billion, the highest monthly notional since July 2011!
But all of the above was largely to be expected: it merely accelerated the unsustainable trends we have grown to love and expect from the centrally-planned economy.

What was by far the worst data, however, was when one drills down into the source of credit. It will surprise nobody to learn that for one more month, the source of debt to the US consumer was Uncle Sam himself. However, what is a big, red flag is the complete collapse in depository institutions lending: the $18.8 billion drop in bank lending was a shock to all, follows the $15.2 billion drop last month, and is the single biggest monthly drop since January 2011.


Link to article with many of the boring charts we are all used to seeing to graph the points made; omitted for brevity.

 http://www.zerohedge.com/news/2015-04-07/revolving-debt-crashes-most-four-years-student-car-loans-go-exponential-bank-lending (http://www.zerohedge.com/news/2015-04-07/revolving-debt-crashes-most-four-years-student-car-loans-go-exponential-bank-lending) :icon_study:
Title: Violent bond moves signal tectonic shifts in global markets
Post by: RE on May 13, 2015, 01:21:38 AM
If Ambrose is writing about it in the MSM, the Bond Market dislocation is getting closer.

RE

http://www.telegraph.co.uk/finance/economics/11590314/Violents-bond-moves-signal-tectonic-shifts-in-global-markets.html (http://www.telegraph.co.uk/finance/economics/11590314/Violents-bond-moves-signal-tectonic-shifts-in-global-markets.html)

Violent bond moves signal tectonic shifts in global markets

'It is absolute pandemonium in the fixed income markets. Everybody has been trying to get out at the same time but the door is getting smaller,' says RBS

     
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A trader looks up at a chart on his computer screen while working on the floor of the New York Stock Exchange in New York
The sharp moves have been exacerbated by a lack of liquidity as traditional dealers withdraw from the market to comply with stricter rules Photo: Reuters
 

A wave of turmoil is sweeping through sovereign bond markets, setting off the most dramatic gyrations seen in recent years and threatening to spill over into over-heated equity markets.

Yields on German 10-year Bunds spiked violently by almost 20 basis points to 0.78pc in early trading on Thursday as funds scrambled to unwind the so-called “QE trade” in Europe, with powerful ripple effects reaching Japan, Australia, Brazil and even US Treasuries.

“It is absolute pandemonium in the fixed income markets,” said Andrew Roberts, head of European credit at RBS. “Everybody has been trying to get out of long-duration positions at the same time but the door is getting smaller.”

German yields fell back just as fast to 0.58pc later, as bargain-hunters came back into the European debt markets, but are still unrecognisable from the historic lows of 0.07pc two weeks ago.

Ructions of this magnitude are extremely rare in government bond markets. Investors are nursing almost half a trillion dollars in paper losses in two weeks, a staggering sum in what is supposed to be a rock-solid repository for institutional investors.

 

The Great Bunds Sell-Off
0%0.2%0.4%0.6%0.8%1%1.2%Yield10/11/201407/05/2015
Powered by Factmint

French, Italian, Spanish and Portuguese bonds have all sold off sharply over the past two weeks, obliterating the gains in yield compression since the European Central Bank unveiled a bond purchase programme of €60bn a month in January.

“Anything over-populated is being cleared out. People got too exuberant and they’re coming back to reality,” said David Bloom, currency chief at HSBC.

Peter Schaffrik, at RBC Capital Markets, said rising yields can be a healthy development if the global economy is picking up speed. It is a different matter if they suddenly jump at a time of sluggish growth and disappointing figures in the US.

“It is potentially dangerous. What worries me is that we don’t have a good macro-economic back-drop driving yields higher. We don’t see a reflationary recovery,” he said.

Real interest rates in Italy are rising fast

Investors already face a changed world from early April, when deflation was still on everybody’s lips and Mexico was able to sell €1.5bn of 100-year bonds at a rate of 4.2pc.

The worm turned two weeks later when bond king Bill Gross, at Janus Capital, declared that Bunds had become unhinged and were the “short of a lifetime”, quickly followed by warnings from Berkshire Hathaway’s Warren Buffett that bonds were “very overvalued”.

The sharp moves have been exacerbated by a lack of liquidity as traditional dealers withdraw from the market to comply with stricter rules. The Institute of International Finance said this week that thin liquidity had become the top issue in talks with central banks and regulators. It said the new rules amounted to a “dramatic revolution” that had re-engineered the global financial system and pushed risk out into the shadows, storing up outcomes that are likely to be “pretty painful and certainly unknowable”.

Global bourses have so far shrugged off the bond market crash but this may be untenable over time and there are already signs of jitters as the spring rally runs out of steam. Equity prices and bond yields tend to feed off each other, though the relationship is not always mechanical and there can be lags.

Janet Yellen, chair of the US Federal Reserve, issued an implicit warning that Wall Street has got ahead of itself and may be vulnerable to monetary tightening. Markets have priced in a far slower pace of rate rises over the next 18 months than the Fed itself.

“Equity market valuations at this point are generally quite high. They are not so high when you compare the returns on equities to the returns on safe assets like bonds, which are also very low. But the potential dangers are there,” she said.

Confusion now reigns in financial markets. Brent oil prices have surged by more than 30pc since January to $67 a barrel and copper has risen in lockstep, normally a sign that the global economy is coming back to life and that inflation will follow in short order. The broad M3 money supply has been growing at a brisk rate on both sides of the Atlantic, reaching an annual rate of 7pc in the eurozone over the past six months.

Yet closely-tracked indicators for inflation expectations - such as the “5/year 5/year forward rate” - remain depressed, especially in Europe. “There is no global reflation story. If I were able to find it I’d be doing cartwheels down the dealing floor but it is not there,” said Mr Bloom at HSBC.

Investors piled into EMU sovereign debt late last year and in early 2015 in the belief that the ECB’s bond blitz would soak up the available supply, leading to a scarcity. Bunds became the favourite trade as the German government prepared a budget surplus of 0.5pc of GDP this year, eliminating roughly €18bn of existing bonds.

This degenerated into a momentum trade. German yields continued dropping below zero as far out as eight years maturity, even as the deflation scare abated and Europe began to eke out modest growth. “We are seeing the unwinding of an enormous bull rally in the bond markets,” said Anthony O’Brien, at Morgan Stanley.

“There was some complacency and a lot of lazy longs and bond prices have tumbled, but we don’t think this is enough to snuff out recovery."

Barclays said the moves in the Bund market threaten to repeat events in Japan in 2003, when 10-year Japanese yields rose 110 basis points in six months after touching unprecedented lows on deflation fears. Investors were left nursing paper losses of 8pc, but the shock was not enough to derail economic recovery.

Mr Roberts, at RBS, said the bond rout is likely to short-circuit once it becomes clear that the world economy is not out of the woods and that China’s leaders will continue to engineer a deliberate slowdown.

All the forces that combined to fuel the eurozone recovery are already slowing or in reverse. “Oil is up, the euro is up, rates are going up in Germany and the core, and spreads in the periphery are rising. This is absolutely terrible for the eurozone,” he said.

“There is going to be a monumental trade getting back into Bunds. All we are waiting for is a technical trigger,” he said.

Title: FREE FINANCIAL MARKETS ARE A HOAX!!!!
Post by: RE on May 29, 2015, 05:05:32 AM
REALLY?

I am SHOCKED!  :o  SHOCKED I TELL YOU!

RE

Free Financial Markets Are A Hoax (http://www.globalresearch.ca/free-financial-markets-are-a-hoax/5451963)

By Dr. Paul Craig Roberts
Global Research, May 27, 2015
PaulCraigRoberts.org
Theme: Global Economy

There are no free financial markets in America, or for that matter anywhere in the Western word, and few, if any, free markets of any other kind. The financial markets are rigged by the big banks, the Federal Reserve, and the Treasury in the interests of the profits of the few big banks and the dollar’s exchange value, which is the basis of US power.

There is a contradiction between a strong currency on one hand and on the other hand massive money creation in order to sustain zero and negative interest rates on the massive debt levels. This inconsistency is revealed by rising gold and silver prices.

When gold hit $1,900 an ounce in 2011 the Federal Reserve realized that the precious metal market was going to limit its ability to provide enough liquidity to keep the thoughtlessly deregulated financial system afloat. The rapid deterioration of the dollar in terms of gold and silver would sooner or later spill over into the exchange value of the dollar in currency markets. Something had to be done to drive down and to cap the gold price.

The Fed’s solution was to take advantage of the fact that the prices of gold and silver are determined in the futures market where paper contracts representing gold and silver are traded, and not in markets where the physical metal is actually purchased by people who take possession of it. The Fed realized that uncovered short sales provided enormous leverage over the prices of the metals and that it would be profitable for the bullion banks, such as JPMorgan, Scotia, and HSBC, to short the market heavily and then cover their shorts at lower prices produced by selling as a result of triggering stop-loss orders and margin calls.

Dave Kranzler and I have shown on numerous occasions that the bullion banks and the Federal Reserve make profits and protect the dollar by suppressing the prices of gold and silver. They do this by illegally selling huge numbers of uncovered shorts in the futures market. This illegal operation is supported by the so-called “regulatory authorities” who steadfastly refuse to intervene.

It has just happened again. Dave Kranzler describes it in detail here:

http://investmentresearchdynamics.com/bullish-news-for-precious-metals-and-goldsilver-get-paper-smashed/ (http://investmentresearchdynamics.com/bullish-news-for-precious-metals-and-goldsilver-get-paper-smashed/)

If memory serves, Matt Taibbi explained a few years ago how Goldman Sachs got position limits removed from speculators, so that now speculators can dominate market forces.

Neoliberal economists in service to the financial sector have created a rationale for why interest rates can be negative in the face of massive debt and money creation and a slew of troubled financial instruments from corporate junk bonds to sovereign debt. The rational is that there is too much saving: The excess of savings over investment forces down interest rates. The negative interest rates will discourage people from saving and encourage them to spend, because the price of consumption in terms of foregone future income from saving is zero. It even pays to consume, because saving costs more than it earns.

Economists argue this even though the Federal Reserve reported that a majority of Americans are so low on savings that they cannot raise $400 without selling personal possessions.

That economists would concoct such an absurd explanation for negative interest rates, an explanation obviously contradicted by empirical evidence, shows that economists are now prostitutes just like the media. The economists are lying in support of a Federal Reserve policy that benefits a handful of mega-banks at the expense of the rest of the world.

The absence of integrity in Western institutions and politicized professions is proof that Western civilization has declined into total decadence just as Jacques Barzun said.

It is amazing that there still are some Russians and some Chinese who want to be part of the sordid decadence that is the Western world.

It is just as amazing that Americans and Europeans are so trapped in The Matrix that they have no inkling that their future has been destroyed.
Title: Re: Free Financial Markets are a Hoax
Post by: Eddie on May 29, 2015, 08:05:50 AM
I was waiting to see if they would do something along these lines again, since metals were poised for take-off. The question in my mind now, is will they try to really crush the price, or just keep it in this $1200 range? I would guess the latter.
Title: Re: D-Day: 6 Days & Counting for Bond Market Dislocation
Post by: MKing on May 29, 2015, 01:02:42 PM
EconMatters from ZH has SNAPPED!

He's predicting TEOTWAWKI in 6 DAYS!

He might be right, but he's definitely putting his credibility on the line with that timeline.

RE

he might be right, if that itself isn't funny. So…here we all are….still…..gee…he MIGHT be right? How about we stop assigning credit where credit isn't due, otherwise we end up just as discredited as the author of the original work.
Title: Is Deutsche Bank The Next Lehman?
Post by: RE on June 12, 2015, 10:59:40 AM
Lehman is what turned me from a "normal" person into a Kollapsnik.  :o

Looks like Deutchbank will finish the job here.

RE

http://www.zerohedge.com/news/2015-06-12/deutsche-bank-next-lehman (http://www.zerohedge.com/news/2015-06-12/deutsche-bank-next-lehman)

Is Deutsche Bank The Next Lehman?

Tyler Durden's picture



 

Submitted by NotQuant.com

Looking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened.  In hindsight there were a few early-warning signs,  but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.

MI-CB391_PECK_G_20140218184730

First, for purposes of drawing a parallel, let’s re-cap the events of 2007-2008:

There were few early indicators of Lehman’s plight.   Insiders however, were well aware:   In late 2007, Goldman Sachs placed a massive proprietary bet against Lehman which would be known internally as the “Big Short”.  (It’s a bet that would later profit from during the crisis).

In the summer 2007 subprime loans were beginning to perform poorly in the marketplace.  By August of 2007, the commercial paper market saw liquidity evaporating quickly and funding for all types of asset-backed security was drying up.

But still — even in late 2007,  there was little public indication that Lehman was circling the drain.

Probably the first public indication that things were heading downhill for Lehman wasn’t until June 9th, 2008,  when Fitch Ratings cut Lehman’s rating to AA-minus, outlook negative.   (ironically, 7 years to the day before S&P would cut DB)

The “negative outlook” indicates that another further downgrade is likely.   In this particular case, it was the understatement of all time.

A mere 3 months later, in the course of just one week,  Lehman would announce a major loss and file for bankruptcy.

article-2203390-1504DEE9000005DC-669_634x346

And the rest is history.

 

Could this happen to Deutsche Bank?

First, we must state the obvious:  If Deutsche Bank is the next Lehman, we will not know until events are moving at an uncontrollable and accelerating speed.   The nature of all fractional-reserve banks — who are by definition bankrupt at all times – is to project an aura of stability until that illusion has already begun to implode.

By the time we are aware of a crisis – if one is in the offing — it will already be a roaring blaze by the time it is known publicly.   It is by now well-established that truth is the first casualty of all banking crises.  There will be little in the way of early warnings.   To that end, we begin connecting the dots:

Here’s a re-cap of what’s happened at Deutsche Bank over the past 15 months:

And that’s where we are now.  How bad is it?  We don’t know because we won’t be permitted to know.  But these are not the moves of a healthy company.

deutsche_ceos2

Jürgen Fitschen will step down May 2016. Jain will step down at the end of this month.

 

How exposed is Deutsche Bank?

The trouble for Deutsche Bank is that it’s conventional retail banking operations are not a significant profit center.  To maintain margins, Deutsche Bank has been forced into riskier asset classes than it’s peers.

Deutsche Bank is sitting on more than $75 Trillion in derivatives bets — an amount that is twenty times greater than German GDP.    Their derivatives exposure dwarfs even JP Morgan’s exposure – by a staggering $5 trillion.

With that kind of exposure, relatively small moves can precipitate catastrophic losses.   Again, we must note that Greece just missed it’s payment to the IMF – and further defaults are most certainly not beyond the realm of possibility.

 

Not good.

Not good.

And if the dominos were not adequately stacked already, there is one final domino which perfects the setup.

Meet Tom Humphrey.  He heads up Deutsche Bank’s Investment Banking operations on Wall Street.

He was also head of fixed income at Lehman.

Prior history.

Prior history.

History never repeats.   But it does rhyme.    In market terms, it tends to rhyme just about every 7 years.

* * *

For more read the Zero Hedge piece from April 2014: The Elephant In The Room: Deutsche Bank's $75 Trillion In Derivatives Is 20 Times Greater Than German GDP

Title: Re: Big Slide v2.0 Begins
Post by: Eddie on June 12, 2015, 11:34:59 AM
Meet Tom Humphrey.  He heads up Deutsche Bank’s Investment Banking operations on Wall Street.He was also head of fixed income at Lehman.

I'm sure he learned some important lessons that will make all the difference this time.

Right?
Title: A Derivatives Bomb Exploded Within The Last Two Weeks
Post by: RE on June 12, 2015, 07:48:37 PM
Steve pulled up this link and dropped it on his Twitter site.

If accurate, things should be perking up soon.

RE

http://investmentresearchdynamics.com/a-derivatives-bomb-exploded-within-the-last-two-weeks/ (http://investmentresearchdynamics.com/a-derivatives-bomb-exploded-within-the-last-two-weeks/)

A Derivatives Bomb Exploded Within The Last Two Weeks

I’ve never seen so many sophisticated Wall Street’ers this scared in my entire career.  – This comment comes from a very well-connected Wall Street/DC insider and is in reference to how illiquid the bond markets have become

Something deep and dark has transpired behind the Orwellian “curtain”  used by the elitists to hide the inner workings of the financial markets, especially with regard to big bank balance sheets and OTC derivatives.  What’s happening right now reminds of the movie “Jurassic Park.”  You can hear and feel the monster coming but you can’t see it yet and you don’t know it will pop up in your face or how big it is.

It was the sudden firing of Deutche Bank’s co-CEOs this past weekend – The Brown Stuff Is About To Hit The Fan – that prompted me to spend more time analyzing a sequence of events which indicate to me some sort of derivatives position, possibly at Deutsche Bank, has exploded.  In addition, the stock and bond markets have been emitting some curious signals which reflect that fact that something happened in the global economic and financial system.

Let’s look at some charts first (click on any chart to enlarge).  The first graph below shows a 1-yr plot Dow Jones Transportation Average vs. the S&P 500:

DJTvsSPX

As you can see, the DJ Transports and the S&P 500 were tightly correlated until the end of April 2015. The Transports hit an all-time high on October 25, 2014, which is about when the Fed formally ended its QE program.  The DJT began to underperform the S&P 500 at the end of April.  Since then it began to diverge quite negatively from the S&P 500.   The DJ Transports are largely made up of trucking, railroad and delivery services stocks.  This sector of the market reflects the heart-beat of economic activity, especially as it relates to consumer spending in the United States.  The Transports are down 9.4% from its all-time high.  I wrote about the collapsing U.S. economy a week ago:   LINK  The behavior of the Dow Jones Transports is the market’s confirmation that the U.S. economy is contracting.

A collapsing global economic system will exert an unanticipated and extreme amount of stress on highly leveraged financial systems.  This stress is “magnified” by the enormous amount of derivatives which are connected to the disastrous amount of global debt.

An even more curious chart is the relationship between the yield on the 10yr Treasury bond and the DJ Transports:

DJT_TNX

As you can see, the yield on the 10yr Treasury bond has been trending higher since the beginning of February while the DJ Transports has been trending lower.  Notice a problem?   In a “clean” market – i.e. a market free from Central Bank and Government interventions, interest rates and the DJ Transports should be positively correlated.  If the economy is contracting, as reflected by the direction in the DJ Transports, the yield on the 10yr Treasury should be declining – not rising.  You can see that when the DJ Transports ran up to an all-time high, the 10yr yield spiked up, reflecting the markets perception that the U.S. economy might be strengthening.

It does not make sense that the 10-yr Treasury yield is moving higher – quite rapidly – while the DJ Transports are tanking – quite rapidly.  In the first week of June, the yield on the 10yr Treasury bond spiked up from 2.09 to 2.40, a 14.8% move.  This is a big move for yields in just 5 trading days, especially in the context of a rapidly weakening economy.   Worst case, 10yr yields should have remained flat.

I believe the illogical movement in 10yr Treasury yields reflects the fact the Fed is losing control of its tight grip on the bond market and longer term interest rates. Note that German bunds have also experienced a similar spike up in interest rates and volatilty.  In the context of my view that there was a derivatives accident somewhere in the global banking system in the last two weeks, it could well have been an OTC interest rate swap bomb that detonated. 

As of the latest OCC quarterly report on bank derivatives activity (Q4 2014), JP Morgan held $63.7 trillion notional amount of derivatives, $40 trillion of which were various interest rate derivatives.  If you look at the ratio of interest rate derivatives to total holdings for the top 4 U.S. banks, they all own roughly same proportion of interest rate derivatives as percent of total holdings.   Deutsche Bank is reported to have about a  $73 trillion derivatives book. If we assume that ratio of interest rate derivatives is likely similar to JP Morgan’s, it means that DB’s potential derivatives exposure to interest rates is around $46 trillion.  I will elaborate on this below.

But first, one more graph related to interest rates:

10yrTreasuryPrice

This graph shows the price of the 10yr Treasury bond futures contract going back to May 2014.  Interestingly, the price of the 10yr moved abruptly higher after the Fed ended QE. This is the opposite of what many of us would have expected.  It wasn’t until early February that 10yr bond price began to decline (yields move higher).  As you can see on the right side of the graph above, the 10yr bond price plunged below the blue uptrend line. The 10yr bond price also crashed through its 200 day moving average – an ominous technical signal.  Both of these events happened within the last week.

Again, I believe that this action in the bond market is pointing to the fact that the Fed is losing control of the markets. I also believe that the catalyst for this loss of control is a big derivatives accident of some sort in the last two weeks.

Another clear indication that something has melted down “behind the scenes” recently is an ominous market call by self-made hedge fund billionaire Paul Singer, founder and CEO of Elliott Management.  In his latest letter to investors, released the last week of May, he stated that the best trade in a generation is to short “long term claims on paper money.”

A savvy investor like Paul Singer would not make a public market call like that unless 1)  he had already positioned his fund accordingly  2)  he had some sort of insight about what was happening “behind the scenes” either first-hand or from insiders who were in a position to give him information and 3) he was 99% certain that his insight and information was correct.  In other words, it highly likely Singer had already made huge position bets for his fund and his own money which would capitalize on a systemic disruption of some sort (Elliott Management was one of the hedge funds with which I dealt when I traded junk bonds in the 1990’s. I knew them to be methodical and always looking for inside information).

Finally, I believe that whatever type of financial explosion occurred is related to the sudden firing of Deutsche Bank’s co-CEOs, Anshu Jain and Jurgen Fitschen.  Fitschen is the equivalent of corporate executive abortion.  He’s under investigation for tax evasion and on trial for giving false testimony in a long-running legal battle related to the collapse of the Kirch media conglomerate, one of Germany’s biggest media empires.  It’s incredulous to me that he wasn’t fired a long time ago.  It tells us just how recklessly this bank is managed by the Board of Directors.  It also suggests a grand failure by German bank regulators.

It’s the firing of Jain that caught my interest.  In a management shake-up a little over two weeks ago, Jain was given more power by the Board and shareholders.   So why was Jain suddenly and unexpectedly fired less than three weeks after having been given more control over the bank?

As I wrote yesterday, Jain’s raison d’etre was to build Deutsche Bank into the world’s largest derivatives dealer.  On May 26, it was announced that Deutsche Bank had reached a settlement with the SEC for improperly valuing its its risk exposure to its Leveraged Super Senior trades book of business (credit derivatives).   This in and of itself was not the cause of the Bank’s reversal on Jain.  But  I can guarantee that this is just the tip of the iceberg with regard to fraud and risk exposure connected to Deutsche Bank’s derivatives business under Jain’s stewardship. We found out in 2008 that bank CEOs and CFOs not only lie to each other and their employees, they also lie to regulators.

I referenced Deutsche Bank above in connection to big bank interest rate derivatives exposure.  I believe that the high volatility in the global fixed income markets has triggered some kind of derivatives blow-up at Deutsche Bank.   While the smoking gun points to some kind of interest rate-related derivatives melt-down, it could also have been related to Greece sovereign debt credit default swaps or energy-related derivatives.

While I’m fairly certain that all the evidence points to Deutsche Bank as the source of what I believe is a derivatives accident that has occurred in the last two weeks, don’t forget that the majority of banks and hedge funds globally are linked directly or indirectly through the “magic” of OTC derivatives and counter-party default risk.  We saw this “natural” law of derivatives risk in action in 2008 and recently when a small German bank blew up from its exposure to an Austrian bank which choked to death of Greece-connected credit default swaps.

There’s other signals which I didn’t cover, like the fact that the S&P 500 is has dropped 2.5% in the last 10 trading days since hitting an all-time high May 21.  In addition, the US dollar index has plunged 170 basis points in the last six trading days.  This is a huge move for a currency in such a short time period.  Having said that, regardless of which bank and what “flavor” of derivative may have blown up, I believe that something big and hidden melted down in global financial system during the last two weeks.

This could be the start of the big financial markets inferno that many of us have been expecting for quite some time.

My best advice for anyone who wants to protect themselves financially is to get as much money OUT of the system as you can.  It’s up to you whether or not you convert your cash into physical gold and silver, but I think at this point only an idiot would leave his money in the system and denominated in paper dollars.

Title: The Wile E. Coyote Moment ARRIVES!
Post by: RE on June 25, 2015, 01:33:39 AM
This isn't a "SLIDE", it's a CLIFF.  And we just fell off.

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/06/20150624_Nailed%20it.jpg)

Looks like we passed the "Wiley E. Coyote Moment".

(http://www.mansharamani.com/wp-content/uploads/wile-e-coyote-falling-off-cliff.jpg)

RE
Title: I Want to LEEVE in Amerika OVAH for Puerto Rico
Post by: RE on June 29, 2015, 06:58:32 AM
Another one bites the dust this weekend.  :o

Bye Bye, Puerto Rico.

http://www.youtube.com/v/Qy6wo2wpT2k

RE

Puerto Rico Bonds Are Collapsing (http://www.zerohedge.com/news/2015-06-29/puerto-rico-bonds-are-collapsing)

Submitted by Tyler Durden on 06/29/2015 09:11 -0400

    Bond Creditors default Greece Puerto Rico Ukraine

With all eyes focused on Greek ATM lines, collapsing Chinese ponzi schemes, and European bank implosions, one could be forgiven for forgetting about another crisis occurring closer to home. As we detailed here, Puerto Rico is now "in a death spiral" and PR bonds are collapsing this morning...

"Surprise"

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/06-overflow/20150629_PR_0.jpg)

Puerto Rico's debt is nearly half that of California for a population one-tenth the size... (via WSJ)

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/06-overflow/20150629_PR1.jpg)

As we explained previously,

What happens next is unclear: "Puerto Rico, as a commonwealth, does not have the option of bankruptcy. A default on its debts would most likely leave the island, its creditors and its residents in a legal and financial limbo that, like the debt crisis in Greece, could take years to sort out."

So without the "luxury" of default, what is PR to do? Why petition to be allowed to file Chapter 9 naturally: after all everyone is doing it.


    In Washington, the García Padilla administration has been pushing for a bill that would allow the island’s public corporations, like its electrical power authority and water agency, to declare bankruptcy. Of Puerto Rico’s $72 billion in bonds, roughly $25 billion were issued by the public corporations.


    Some officials and advisers say Congress needs to go further and permit Puerto Rico’s central government to file for bankruptcy — or risk chaos.

     
    “There are way too many creditors and way too many kinds of debt,” Mr. Rhodes said in an interview. “They need Chapter 9 for the whole commonwealth.”

García Padilla said that his government could not continue to borrow money to address budget deficits while asking its residents, already struggling with high rates of poverty and crime, to shoulder most of the burden through tax increases and pension cuts. Where have we heard that before...


    He said creditors must now “share the sacrifices” that he has imposed on the island’s residents.


    “If they don’t come to the table, it will be bad for them,” said Mr. García Padilla, who plans to speak about the fiscal crisis in a televised address to Puerto Rico residents on Monday evening. “What will happen is that our economy will get into a worse situation and we’ll have less money to pay them. They will be shooting themselves in the foot.”

And the punchline:

    “My administration is doing everything not to default,” Mr. García Padilla said. “But we have to make the economy grow,” he added. “If not, we will be in a death spiral.”

And this one: any deal with hedge funds, who are desperate to inject more capital in PR so they can avoid writing down their bond exposure in case of a default, "would only postpone Puerto Rico’s inevitable reckoning. “It will kick the can,” Mr. García Padilla said. “I am not kicking the can.”

We wonder how long before Tsipras, who earlier was quoting FDR, steals this line too.

And speaking of Prexit, how long before Puerto Rico exits the Dollarzone... and will there be a Preferendum first or will the governor, in his can kick-less stampede, just make a unilateral decision to join Greece, Ukraine, Venezuela and countless other soon to be broke countries in the twilight zone of Keynesian sovereign failures?
Title: Re: Big Slide v2.0 Begins
Post by: g on July 13, 2015, 01:21:18 PM
 :icon_scratch: :icon_scratch: :dontknow:


                                      (http://www.jsmineset.com/wp-content/uploads/2015/07/clip_image0012.jpg)
Title: Re: Big Slide v2.0 Begins
Post by: RE on July 13, 2015, 01:39:21 PM
:icon_scratch: :icon_scratch: :dontknow:


                                      (http://www.jsmineset.com/wp-content/uploads/2015/07/clip_image0012.jpg)

VANCOUVER! VANCOUVER! THIS IS IT!

(http://www.lawyersgunsmoneyblog.com/wp-content/uploads/2014/05/738-567-mt-st-helens.jpg)

Of course, PANICKING now won't do anymore good than for David Johnston, although you probably have a little more time to enjoy the panicking than he did.

RE
Title: The Tide Has Turned And These Charts Predict The Next Stop
Post by: RE on August 02, 2015, 05:58:10 PM
Countdown to Crash...T-Minus 10 and counting...

RE

http://www.zerohedge.com/news/2015-08-02/tide-has-turned-and-these-charts-predict-next-stop (http://www.zerohedge.com/news/2015-08-02/tide-has-turned-and-these-charts-predict-next-stop)

The Tide Has Turned And These Charts Predict The Next Stop

Tyler Durden's picture



 

Submitted by Thad Beversdorf via FirstRebuttal.com,

What we saw with the latest GDP reports is something truly remarkable.  A market that was explicitly told the past 4 years of economic growth had been overstated simply shrugged off the news.  That is, absolutely no price recalibration took place.  This really evidences beyond any doubt that there is no relationship between the economy and the market.  It further evidences the Fed’s increased proficiency in directly guiding the market.

Now I know this is not shocking to many of us.  But to watch the market’s blatant irreverence toward a report that, with the flip of a switch, removed 12% of the presumed economic growth from the past 4 years did strike me as remarkable.  It shows that the printing of economic indicators is nothing but theater.  There is absolutely no rational market explanation that the market traded flat to up on the day when current GDP missed estimates  and the past 4 years of growth was adjusted downward, all in the midst of one of the worst seasons for YoY deteriorating corporate revenues/earnings.

But more realistically what it suggests is the only player left in the market is the ‘buyer of last resort’, i.e. the Fed and its minion entities.  Certainly nobody wants to aggressively short the market in the face of a clear long only strategy by the Fed, but just as certainly no major money managers are longing this market.  Volume has simply dried up.

I’ve been writing for almost a year now about the economic cannibalism that has been feeding earnings growth.  I have discussed this concept with a dire warning that feeding earnings expansion through operational contraction is a short lived meal.  And well we are now seeing the indications that the growth through contraction has now hit its inevitable end.  Have a look at the following chart which is really the only chart one needs to study at this point.  The chart depicts S&P 500 adjusted earnings per share (blue line), S&P Price level (green line), S&P 500 Revs per share (red line) and US Productivity of Total Industry (olive line).

Screen Shot 2015-07-27 at 2.03.09 PM

I have normalized the parametres back to the early 1990’s so that we can better understand the absurdity of what’s been taking place.  Now there is a tremendous amount of information we can pull out of this chart so stay with me here.

The initial observation is that the past 25 years has been a series of large bubbles and subsequent busts, at least in both the price level and adjusted eps of the S&P.  Focusing on the price level we see the normalized index having two similar peaks and now into a third peak quite substantially higher than the previous two.  The first two peaks top out around 400 on the index and each subsequent reset price was down around 220.  Now one might expect that the sources of these two very similar bubbles were thus the same.  But one would be wrong.

Notice in the first bubble that adjusted EPS topped out around 275 whereas in the second bubble they reached 450.  We often hear that because of this phenomenon equities were far more overvalued in the tech bubble than in the credit bubble.  While the conclusion is correct it creates a strawman analogy for this third and current bubble.  Specifically, that because current price to earnings is similar to that of the credit bubble that equities are fairly priced or at least relative to the tech bubble.  But this argument is a strawman fallacy.

The tech bubble was a bubble of massive direct capital allocation stupidity. The credit bubble was a bubble of massive indirect capital allocation stupidity.  What I mean by that is the tech bubble was created by absurd capital injections directly into the secondary market (bypassing earnings), driving stock valuations to the moon.  The credit bubble was done via flooding consumers with debt which was used to prop up personal consumption which led to growth in revenues, earnings and thus stock valuations.  You can see a large increase of revenues per share between 2001 and 2007.  Now revenue growth is supposed to lead earnings growth which in turn pushes up stock valuations.  However, when revenue growth is driven by debt consumption it is temporary.  And we all learned that cold, hard fact in 2008.

But so the argument that EPS is the figure one needs to pay attention to really misses the actual driving force which is revenue based earnings growth.  The above chart depicts that while EPS has been rising significantly for the past 7 years, revenues have been absolutely flat.  And so what we have is earnings growth pushing stock valuations massively higher but without the consumer onboard.  Very different from the credit bubble.  How does this happen?

Well again, stock valuations are being pushed  higher through another temporary effect.  EPS growth is coming by way of operational contraction and financial engineering – meaning dividend payouts and share buybacks. This is evident in the following chart of just this latest bubble that depicts growth in stock valuations relative to growth in revenue per share, which have (notably) declined since Aug 08 (the base period).

Screen Shot 2015-07-20 at 3.58.53 PM

Now EPS growth from anything other than earned consumption, meaning consumption from income rather than debt can only be temporary.  (One arguable exception would be if EPS growth came from productivity, however, we see in this first chart that productivity is flat and so not the driver of EPS growth.)  And if the EPS growth is temporary it follows that the stock valuations that have grown on the back of EPS growth too is temporary.  What we are about to find and already are seeing the signs of with major technical supports breaking down is that stock valuations will reset to match each firm’s operational propensity for earnings growth (i.e. each firm’s expected sustainable future free cash flow).  We saw this inevitable result in each of the last two major bubbles.

Interestingly if we look at the macrocosm of the capital mix between earnings and incomes what we find since moving to a pure fiat based currency in 1971 is that while incomes are very steady as a percentage of gross domestic income (GDI), profits have been more volatile.  And since the large positive inflection point of money printing in 1993, corporate profits as a percentage of GDI have gone berserk.  For investors it is imperative to understand what happens to stock valuations when profits’ share of GDI collapses.  In the following chart I have normalized, back to 1971, income and profits’ respective shares of GDI.

Screen Shot 2015-07-27 at 12.23.34 PM

You can see income has steadily declined as a percentage of GDI while profits’ share has bounced around.  But we can see that starting in the mid 1990’s profits’ share of GDI has seen massively growing bubbles and busts.  This is a direct result of the temporary earnings growth scenarios discussed above.   That is, rather than implementing policies that create steady long term income and earnings growth the Fed and the government have been creating policies that act as bandages.  And so while we cover up the infection for short periods, eventually the infection not only reappears but spreads resulting in a continuously worsening problem for which ever more extreme bandages need to be used to cover up the problems.

Today there is an even bigger problem in that the world has been riding China’s coat tails of growth so to speak. But looking at the following chart what we find is a huge dislocation between China’s growth machine (i.e. industrial production) and the valuation of world equity markets.  The dislocation really began around the time the Fed implemented Operation Twist at the end of 2011, which fed directly into QE3.

Screen Shot 2015-07-27 at 8.02.53 AM

We can see a similar indicator of industrial growth decelerating by looking at collapsing materials prices which began to deteriorate around the same time that the above dislocation started in late 2011.

Screen Shot 2015-07-21 at 12.05.40 PM

Screen Shot 2015-07-27 at 6.37.23 AM

Despite now hearing fewer and fewer industry ‘pros’ shouting their euphoric calls for 20 year bulls we still get a constant barrage of delusional analyses.  We continue to hear about a strong job market when the opposite is true.  U6 (i.e. the truest official unemployment figure) remains well into the double digits.  As reported today by MarketWatch, labour cost index is at its lowest growth rate since 1982 and the U.S. has gained only an average of 208,000 jobs a month this year, down from 260,000 in 2014, a 20% decline YoY.  Those are the real facts and those are in the face of the lowest labour participation rate since the 1970’s and the highest number of people on government subsidy programs on record.

In short, the last 20 years has been nothing but bad policies attempting to cover up the results of previous bad policies creating a need for more extreme policies to cover up more extreme resulting fundamental problems.  This is clearly depicted in the data.  The end result is that global growth has deteriorated steadily now for the past 6 years to its lowest long term trend line in modern history, now below 2%.

Screen Shot 2015-07-11 at 8.21.32 AM

Like the chicken and the egg, economic output and incomes are inherently intertwined.

Screen Shot 2015-04-02 at 1.45.50 PM

Be prepared for the now imminent equity valuation reset.  It is true the Fed now has the ability to manipulate the market well beyond anything we’ve ever seen before.  However, it is also still true that when the bursting bubble achieves full momentum the Fed will be helpless to stop it.   While the Fed feels increasingly omnipotent they will once again learn, that while natural laws can be bent, they cannot be broken.

Title: Re: The Tide Has Turned And These Charts Predict The Next Stop
Post by: MKing on August 02, 2015, 09:01:16 PM
Countdown to Crash...T-Minus 10 and counting...

RE

Then again, maybe not, particularly in the US, last bastion of free market based economics.

All those folks collapsing so fast they keep buying yet more cars…no worries about fuel scarcity in this gang! what do they know that we don't? Maybe they can actually read EIA and IEA reports and whatnot?

http://www.usatoday.com/story/money/cars/2015/08/02/auto-sales-rolling/31014343/ (http://www.usatoday.com/story/money/cars/2015/08/02/auto-sales-rolling/31014343/)
Title: Trainwreck? US Freight Carloads Collapse, Flash Recession Warning
Post by: RE on August 10, 2015, 11:17:48 PM
FSoA Economy not looking much better...

RE

http://www.zerohedge.com/news/2015-08-10/trainwreck-us-freight-carloads-collapse-flash-recession-warning (http://www.zerohedge.com/news/2015-08-10/trainwreck-us-freight-carloads-collapse-flash-recession-warning)
Title: Re: Trainwreck? US Freight Carloads Collapse, Flash Recession Warning
Post by: MKing on August 11, 2015, 05:30:52 AM
FSoA Economy not looking much better...

RE

http://www.zerohedge.com/news/2015-08-10/trainwreck-us-freight-carloads-collapse-flash-recession-warning (http://www.zerohedge.com/news/2015-08-10/trainwreck-us-freight-carloads-collapse-flash-recession-warning)

Railroads not being able to substitute loads because less oil needs shipped is hardly a recession in the making. It is more to the good actually, as fewer railcars of oil drops the chances of one exploding in a town, car sales are still up, markets aren't objecting to Chinese business coming their way because China isn't very good at managing their own economy, dollar generally stronger because of it, employment doing what it is supposed to do…yep….nothing out of the ordinary here yet.
Title: Riskiest End of the Junk Bond Market Just Blew Up
Post by: RE on August 16, 2015, 12:27:39 AM
Bond Collapse anyone?

RE

http://wolfstreet.com/2015/08/15/riskiest-end-of-junk-bond-market-just-blew-up-ccc-rated-yields-spike/ (http://wolfstreet.com/2015/08/15/riskiest-end-of-junk-bond-market-just-blew-up-ccc-rated-yields-spike/)

You wouldn’t know by looking at the US Treasury market, which remained relatively sanguine this week, with only a little panic buying on Tuesday. So 10-year Treasuries ended the week near where they’d started it. But at the other end of the spectrum, the riskiest portion of the junk bond market just blew up spectacularly.

There were a lot of culprits to catch the blame. At the top of the list was the devaluation of the Chinese yuan. It caught the corporate bond markets by surprise, though it shouldn’t have, injected all kinds of stress into them, and drove up bond spreads, with investors demanding a higher yields for riskier bonds. It hit the riskiest segment of the junk bond market with a sledge hammer.

Given the precarious state of the current credit bubble and the pandemic nervousness about it, bond investors were rattled by the moves of the People’s Bank of China. In prior crises, such as the 1997 Asian financial crisis and the 2008-2009 Global Financial Crisis, the PBOC had maintained a fixed exchange rate with the dollar. It didn’t devalue, as other countries were doing, to get out of the crisis. The yuan was seen as stabilizing the markets. Now the yuan is seen as destabilizing the markets.

It didn’t help that the Fed’s cacophony has been pointing at a September rate hike. It would be the first ever in the careers of millennials working on Wall Street. It would bring to an end the 30-year bull market in bonds. Even most middle-aged money managers have not yet experienced the alternative, other than a few short-lived dips and panics. On a visceral level, they simply can’t believe rates can ever rise over the long term. To them, rates can only go down.

And oil prices plunged to six-and-a-half year lows, taking out the low set earlier this year, instead of bouncing off it. West Texas Intermediate ended the week at $42.18 a barrel. But in Canada, the benchmark blend Western Canada Select hit a catastrophic C$29.79 a barrel.

WCS always trades at a discount to WTI. But as some refineries were shut down for scheduled maintenance, a BP refinery in Whiting, Indiana, that can process Canadian heavy crude, was also shut down for “unscheduled repair work.” Getting the refinery up and running at full capacity again could take several weeks. Meanwhile, the crude, with no other place to go, goes into storage.

This scenario was punctuated by a cascade of bankruptcies that eviscerated unsecured bond holders, and not all of them were energy-related. In Delaware alone, there were 20 Chapter 11 filings this week, including the prepacked bankruptcy of Hercules Offshore and a gaggle of related companies. Risk, which the Fed had so ingeniously removed from the equation, is suddenly rearing its ugly head again.

How suddenly? This chart of yields at the riskiest end of the junk bond market – bonds rated CCC and below – shows what happened. These bonds have been selling off over the past 12 months, with exception of the sucker rally earlier this year, and their yields more than doubled from less than 7.9% in June a year ago to 16.2% by Thursday evening. And Thursday was a massacre:

US-junk-bonds-CCC-2011_2015_8-Yuan-rout

On Thursday, yields jumped 2.6 percentage points, from 13.58% to 16.18%, as these junk bonds plunged. Those kinds of single-day vertigo-inducing sell-offs are rare in normal times, and there haven’t been any since the Financial Crisis.

Junk-rated companies that confronted this spooked market during the week to issue new bonds “faced challenging conditions, as China’s yuan devaluation sent shockwaves across global markets and oil prices continued to fall,” S&P Capital IQ reported in its LCD High Yield Weekly. And the bane of all bond issuers: some of them had to offer “healthy concessions” to find buyers for their bonds.

Concessions! Investors are opening their eyes, and they’re demanding to be compensated at least a tiny bit for the enormous risks they’re taking at that spectrum of the market.

And in the secondary market, where junk bonds are traded, energy bonds got whacked again, in line with the ongoing oil price fiasco. “The damage was widespread, with some names trading 2-5 points lower,” LCD High Yield Weekly reported, and “the rough week in the commodities space weighed heavily on the broader market.”

Among the beaten down junk bonds were Chesapeake’s $1.1 billion of 5.75% notes due 2023. On July 21, last time I wrote about them, they’d just hit a new all-time low of 84.88 cents on the dollar. This week, they were reportedly pegged at 72 cents on the dollar. It seems, bond-fund managers are finally waking up from their Fed-induced torpor, and they’re suddenly seeing with horror what they’ve plowed their clients’ money into, and some of them are trying to get out while they still can.

China is also hitting global companies that generate a big part of their profits from their sales in the former growth miracle. Such as GM. But now elements are coagulating into a toxic mix. Read… China Mess, Yuan Devaluation Spread to the US
Title: Mass Layoffs Worldwide as Corporate Mergers near New Record
Post by: RE on August 17, 2015, 12:59:06 AM
http://www.globalresearch.ca/bankruptcy-and-economic-stagnation-mass-layoffs-worldwide-as-corporate-mergers-near-new-record/5469467 (http://www.globalresearch.ca/bankruptcy-and-economic-stagnation-mass-layoffs-worldwide-as-corporate-mergers-near-new-record/5469467)

Major transnational corporations, including Kraft, Motorola, Lenovo, Tyson and HTC have announced mass layoffs in recent days amid a boom in mergers and acquisitions, which are on track to hit a record this year.

Processed foods maker Kraft Heinz Co said Wednesday that it would cut 2,500 jobs in North America, amounting to 5 percent of its global workforce. The announcement is the result of last month’s $49 billion merger between Kraft and H.J. Heinz Co, in a deal orchestrated by Warren Buffett’s Berkshire Hathaway.

The announced layoffs will include 700 at the company’s headquarters in Northfield, Illinois, near Chicago. Thousands more layoffs are expected as a result of the deal, as the company said it was “confident” that it would meet its estimated cost savings from the merger of $1.5 billion through 2017.

On Thursday, Chinese computer maker Lenovo announced 3,200 layoffs, or 5 percent of its global workforce. The layoffs will be concentrated in the company’s Motorola Mobility subsidiary, which this week announced an initial round of 500 layoffs in its Chicago-area headquarters. Another three hundred employees will lose their jobs with the closure of the company’s facility in Plantation, Florida. Lenovo purchased Motorola Mobility from Google in 2014.

Also Thursday, Smartphone maker HTC announced that it would slash 2,250 jobs, or 15 percent of its global workforce, by the end of the year. The company is seeking to cut costs by 35 percent.

These layoffs follow last month’s announcement by Microsoft that it would eliminate 7,800 positions, mostly from its Nokia mobile phone division that it acquired in 2013. Only weeks later, San Diego-based semiconductor company Qualcomm Incorporated announced 4,700 layoffs.

Mass layoffs in the food processing and technology sector come amid an ongoing jobs bloodbath in the global energy sector. On Friday, Samson Resources Corp, a Tulsa, Oklahoma-based oil and gas producer, filed for bankruptcy, threatening over a thousand jobs. The bankruptcy follows the firm’s purchase in 2011 by private equity firm KKR & Co.

Earlier this month, Alpha Natural Resources, America’s second-largest coal producer, filed for bankruptcy, endangering the jobs of the company’s 8,000 employees. Oil consulting firm Swift Worldwide Resources reported in June that over 150,000 energy sector jobs have been lost globally since the beginning of the downturn in oil prices last year.

Samson’s bankruptcy filing followed the announcement by multinational oil giant Royal Dutch Shell that it would eliminate 6,500 positions this year, as well as the announcement by British-based mining conglomerate Anglo American, the world’s fifth largest mining company, that it would slash 53,000 jobs.

The latest round of mass layoffs is closely related to the global boom in mergers and acquisitions. Under conditions of slowing global economic growth, together with record amounts of cash sitting on corporate balance sheets, Wall Street is using mergers and acquisitions to put additional pressure on US and global corporations to cut costs and restore profitability on the backs of employees.

Global mergers and acquisitions are close to hitting a record high this year, according to Thomson Reuters data. With a quarter of the year still to go, the value of deals hit $2.9 trillion, just shy of the $3 trillion figure for 2007, immediately before the 2008 financial crisis. In the United States, mergers have hit $1.4 trillion in 2015, up by 62 percent from a year ago.

On Monday, Warren Buffett’s Berkshire Hathaway announced the biggest corporate takeover so far this year: the $37 billion purchase of Precision Castparts, an aerospace and defense metal fabricator with nearly 30,000 employees.

The growing rate of mergers and acquisitions is made possible by the continual infusion of cheap money from global central banks, which have pumped trillions of dollars into the global financial system through years of quantitative easing and zero-interest-rate policies.

Mergers activity has soared even as real economic growth has slowed. According to predictions by the International Monetary Fund, 2015 is set to be the slowest year for economic growth since 2009. The already gloomy growth outlook for the year was made worse Friday with the release of economic data for the Eurozone showing that the region’s economy grew only 0.3 percent in the second quarter; significantly lower than had been predicted by analysts.

This followed Friday’s release of negative economic figures for China, which showed that the country’s exports plunged by 8.3 percent in July. China’s poor exports performance likely contributed to its central bank’s decision to devalue the yuan this week, a move that roiled the global financial system.

The global boom in mergers and acquisitions, far from expanding economic output and growth, has as its aim the enrichment of shareholders through layoffs and wage cuts. The end result of this vicious cycle of economic stagnation and parasitism is the further enrichment of the financial oligarchy at the expense of the working class.
Copyright © Andre Damon, World Socialist Web Site, 2015
Title: Wall Street is Running out of Time… and Money
Post by: RE on August 20, 2015, 12:31:04 AM
Watch out for Falling Pigmen!

RE

http://wolfstreet.com/2015/08/19/wall-street-is-running-out-of-time-and-money/ (http://wolfstreet.com/2015/08/19/wall-street-is-running-out-of-time-and-money/)
Title: Re: Is Deutsche Bank The Next Lehman?
Post by: Petty Tyrant on August 20, 2015, 01:12:13 AM
Lehman is what turned me from a "normal" person zombie into a


FTFY
Title: Carnage: Worst Week For Stocks In 4 Years, VIX Soars Most Ever
Post by: RE on August 21, 2015, 07:06:18 PM
Looks like the PPT ran out of rabbits to pull out of the hat today.

Great Weekend for the Big Vidcast!  :icon_sunny:

RE

http://www.zerohedge.com/news/2015-08-21/carnage-worst-week-stocks-4-years-vix-soars-most-ever (http://www.zerohedge.com/news/2015-08-21/carnage-worst-week-stocks-4-years-vix-soars-most-ever)

http://www.theguardian.com/business/2015/aug/21/us-markets-china-slump-global-sell-off (http://www.theguardian.com/business/2015/aug/21/us-markets-china-slump-global-sell-off)
Title: Making Sense Of The Sudden Market Plunge
Post by: RE on August 22, 2015, 03:24:59 AM
Nothing new here for Diners, but Chris is catching up.

RE

http://www.peakprosperity.com/blog/94051/making-sense-sudden-market-plunge (http://www.peakprosperity.com/blog/94051/making-sense-sudden-market-plunge)

Making Sense Of The Sudden Market Plunge

Are you prepared for further turmoil?
Friday, August 21, 2015, 10:13 PM

The global deflationary wave we have been tracking since last fall is picking up steam.  This is the natural and unavoidable aftereffect of a global liquidity bubble brought to you courtesy of the world’s main central banks.  What goes up must come down -- and that's especially true for the world's many poorly-constructed financial bubbles, built out of nothing more than gauzy narratives and inflated with hopium.

What this means is that the traditional summer lull in financial markets has turned August into an unusually active and interesting month. August, it appears, is the new October.

Markets are quite possibly in crash mode right now, although events are unfolding so quickly – currency spikes, equity sell offs, emerging market routs and dislocations, and commodity declines -  that it’s hard to tell for sure.  However, that’s usually the case right before and during big market declines.

Before you read any further, you probably should be made aware that, at Peak Prosperity, our market outlook has been one of extreme caution for several years.  We never bought into so-called "recovery" because much of it was purely statistical in nature, and had to rely on heavily distorted and tortured 'statistics' to be believed.  Okay, lies is probably a more accurate term in many cases.

Further, most of the gains in financial assets engineered by the central banks were false and destined to burst because they were based on bubble psychology, not actual returns.

Which bubbles you ask?  There are almost too many to track. But here are the main ones:

What’s the one thing that binds all of these bubbles together?  Central bank money printing.

Passing The Baton

Operating in collusion, the world's major central banks passed the liquidity baton back and forth between them, first from the US to Japan, then from Japan to Europe, then back to the US, then over to Europe again where it now resides.  Seemingly endless rounds of QE that didn’t always do what they were supposed to do, and plenty of things they were not intended to do.

The purpose of printing up trillions and trillions of dollars (supposedly) was to create economic growth, drive down unemployment, and stoke moderate inflation.  On those fronts, the results have been dismal, horrible, and ineffective, respectively.

However, the results weren’t all dismal.  Big banks reaped windfall profits while heaping record bonuses on themselves for being at the front of the Fed’s feeding trough. The über-wealthy enjoyed the largest increase in wealth gains in recorded history, and governments were able to borrow more and more money at cheaper and cheaper rates allowing them to deficit spend at extreme levels.

But all of that partying at the top is going to have huge costs for ‘the little people’ when the bill comes due.  And it always comes due.  Money printing is fake wealth; it causes bubbles, and when bubbles burst there’s only one question that has to be answered: Who’s going to eat the losses?

The poor populace of Greece is just now discovering that it collectively is responsible for paying for the mistakes of a small number of French and German banks, aided by the collusion of Goldman Sachs, in hiding the true state of Greek debt-to-GDP using sophisticated off-balance sheet derivative shenanigans. As a direct result, the people of Greece are in the process of losing their airports, ports, and electrical distribution and phone networks to ‘private investors’ -- mainly foreigners harvesting the last cash-generating assets the Greeks have left to their names.

Broken Markets

As we’ve detailed repeatedly, our “markets” no longer resemble markets.  They are so distorted, both by central bank policy and technologically-driven cheating, that they no longer really qualify as legitimate markets.  Therefore we’ve taken to putting double quote marks around the word “”market”” often when we use it.  That’s how bad they’ve become.

Where normal markets are a place for legitimate price discovery, todays “”markets”” are a place where computers battle each other over scraps in the blink of an eye, ‘investors’ hinge their decisions based on what the Fed might or might not do next, and rationalizations are trotted out by the media for why inexplicable market price movements make sense.

Instead, we view the “”markets”” as increasingly the playgrounds of, by and for the gigantic market-controlling firms whose technology and market information have created one of the most lopsided playing fields in our lifetimes.

Signs of these distortions abound. One completely odd chart is this one, showing that the average trading range of the Dow (ytd) was the lowest in history as of last week (before this week’s market turmoil hit).  And that was despite Greece, China, QE, Japan, oil’s slump, Ukraine, Syria, Iran and all of the other ample market-disturbing news:

(Source)

Based on the above chart, you’d think that 2015 up through mid-August was the most serene year of the last 120 years.  Of course, it's been anything but serene.

The explanation for this locked-in trading range is a combination of ultra-low trading volume and the rise of the machines.  There have been times recently when practically 100% of market volume was just machines playing against each other…no actual investors (i.e, humans) were involved. 

As long as there was ample liquidity, then the machines were content to just play ping pong with the “”market””. Which they did, crossing the S&P 500 over the 2,100 line 13 times before the recent sell-off took hold.

But that’s not the most concerning part about having broken markets.  The most concerning thing centers on the fact that things that should never, ever happen in true markets are happening in todays “”markets”” all the time.

One measure of this is how many standard deviations (std dev) an event is away from the mean. For example, if the price of a financial asset moves an average of 1% per year, with a std dev of 0.25 %, then it would be slightly unusual for it to 2%, or 3%.  However it would be highly unusual if it moved as much as 6% or 7%.

Statistics tells us that something that 3 std dev movements are very unlikely, having only a 0.1% chance of happening.  By the time we get to 6 std devs, the chance is so small that what we’re measuring should only happen about once every 1.3 billion years. At 7 std dev, the chance jumps up to once every 3 billion years. 

Why take it to such a ridiculous level? Because those sorts of events are happening all the time in our “”markets”” now. And that should be deeply concerning to everyone, as it was to Jamie Dimon, CEO of JP Morgan:

'Once-in-3-Billion-Year' Jump in Bonds Was a Warning Shot, Dimon Says

Apr 8, 2015

JPMorgan Chase & Co. head Jamie Dimon said last year’s volatility in U.S. Treasuries is a “warning shot” to investors and that the next financial crisis could be exacerbated by a shortage of the securities.

The Oct. 15 gyration, when Treasury yields fluctuated by almost 0.4 percentage point, was an “unprecedented move” that would have serious consequences in a stressed environment, Dimon, the New York-based bank’s chairman and chief executive officer, said in a letter Wednesday to shareholders. Treasuries are supposed to be among the most stable securities.

Dimon, 59, cited the incident as he waded into a debate about whether bank regulations implemented after the 2008 financial crisis exacerbate price declines by limiting the ability of Wall Street banks to make markets. It’s just a matter of time until some political, economic or market event triggers another financial crisis, he said, without predicting one is imminent.

The Treasuries move was “an event that is supposed to happen only once in every 3 billion years or so,” Dimon wrote. A future crisis could be worsened because there “is a greatly reduced supply of Treasuries to go around.”

(Source)

While Mr. Dimon used the event to suggest that bank regulations were somehow to blame, that explanation is self-serving and disingenuous.  He'd use any excuse to try and blame bank regulations; that’s his job, I guess.

Instead what happened was that our “”market”” structure is so distorted by computer trading algorithms, with volume so heavily distorted by their lighting-fast reflexes, that one of those ‘once in 3-billion years events’ resulted.

This simply wouldn't have happened if humans were still the ones dong the trading, but they aren't. All the colored jackets have been hung up at the CME, and human market makers on the floor of the NYSE are rapidly slipping away into the sunset as algorithms now run the show.

The good news about computers is that they allow our trading to be faster and cheaper, presumably with better price discovery.  The bad news is that nobody really understands how the whole connected universe of them interact and that, from time to time, they go nuts.

As Mr. Dimon hinted, they have the chance of taking the next financial downturn and converting it into a certified financial meltdown

How common are these ‘billion year events’?

They happen all the time now. Here’s a short list:

(Source)

All of this leads us to conclude that the chance of a very serious, market-busting accident is not only possible, but that the probability approaches 100% over even relatively short time horizons. 

The deflation we’ve been warning about is now at the door. And one of our big concerns is that we’ve got “”markets”” instead of markets, which means that something could break our financial system as we know and love it.

From The Outside In

One of our main operating models at Peak Prosperity is that when trouble starts it always begins at the edges and moves from the outside in.

This is true whether you are looking at people in a society (food banks see a spike in demand well before expensive houses decline in price), stocks in a sector (the weakest companies decline first), bonds (junk debt yields spike first), or across the globe where weaker countries get in trouble first.

What we’re seeing today is an especially fast moving set of ‘outside in’ indicators that are cropping up so fast it’s difficult to keep track of them all.  Here are the biggest ones.

Currency Declines

The recent declines in emerging market (EM) currencies is a huge red flag.  This combined chart of EM foreign exchange shows the escalating declines of late.

(Source)

Since last Monday, here’s the ugly truth:

Many of these countries have been using precious foreign reserves to try and stem the rapid declines of their currencies, but I fear they will all run out of ammo before the carnage is over.

What’s happening here is the reverse part of the liquidity flood that the western central banks unleashed.  The virtuous part of this cycle sees investors borrow money cheaply in Europe, the US or Japan, and then park in in EM countries, usually by buying sovereign bonds, or investing in local companies (especially those making a bundle off of the commodity boom that was happening).

So on the virtuous side, a major currency was borrowed, and then used to buy whatever local EM currency was involved (which drove up the value of that currency), and then local assets were bought which either drove up the stock market or drove down bond yields (which move as in inverse to price).

The virtuous part of the cycle is loved by local businesses and politicians.  Everything works great.  The currency is stable to rising, bond yields are falling, stocks are rising, and everyone is generally happy.

However when the worm turns, and it always does, the back side of this cycle, the vicious part, really hurts and that’s what we’re now seeing.

The investors decide that enough is enough, and so they sell the local bonds and equities they bought, driving both down in price (so falling stock markets and rising yields), and then sell the local currency in exchange for dollars or yen or euros, whichever were borrowed in the first place.

And thus we see falling EM currencies.

To put this in context, many of the above listed currencies are now trading at levels either not seen since the Asian currency crisis of 1997, or at levels never before seen at all.  The poor Mexican peso is one of the involved currencies, which has fallen by 12% just this year, and almost made it to 17 to the dollar early this morning (16.9950).  Battering the peso is also the low price of oil which is absolutely on track to destroy the Mexican federal budget next year.

Stock Market Declines

In concert with the currency unwinds we are seeing deep distress in the peripheral stock markets.  There are now more than 20 that are in ‘bear country’ meaning they’ve suffered declines of 20% or more from their peaks.

Here are a few select ones, with Brazil being in the worst shape:

All of these signs reinforce the idea that the great central back liquidity tsunami has reversed course and is about to create a lot of damage and suck a lot of debris out to sea.

The Commodity Rout

A lot of EM countries are commodity exporters.  They sell their minerals trees and rocks to the rest of the world, by which we mean to China first and foremost.

Commodities are not just doing badly in terms of price, they are absolutely being crushed, now down some 50% over the past four years.

(Source)

Commodities tells a number of things besides the extent of EM economic happiness or pain – they tells us whether the world economy is growing or shrinking.  Right now they are saying “shrinking” which is confirmed by all of the recent Chinese import, export and manufacturing data, along with the dismal results coming out of Japan (in recession), Europe and the US.

Conclusion Part I

As we’ve been warning for a long time, you cannot print your way to prosperity, you can only delay the inevitable by trading time for elevation.   Now, instead of finding ourselves saddled with $155 trillion of global debt as we did in 2008, we’re entering this next crisis with $200 trillion on the books and interest rates already stuck at zero.  We are 30 feet up the ladder instead of 10 and it’s a long way down.

What tools do the central banks really have left to fight the forces of deflation which are now romping across the financial landscape from the outside in?

If the computers hiccup and give us some institution smashing or market busting 8 sigma move what will the authorities do?  Shut down the markets?  It’s a possibility, and one for which you should be prepared.

Where are we headed with all this?  Hopefully not the way of Venezuela which is now so embroiled in a hyperinflationary disaster that stores are stripped clean of basic supplies, social unrest grows, and creative street vendors are now selling empanadas wrapped in 2 bolivar notes because they are, literally, far cheaper than napkins.  Cleaner?  Maybe not so much.  I wouldn’t want to eat off of currency.

(Source)

But make no mistake, the eventual outcome to all this is captured brilliantly in this quote by Ludwig Von Mises, the Austrian economist:

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

The credit expansion happened between 1980 and 2008, there was a warning shot which was soundly ignored by ignorant central bankers, and now we have more, not less, debt with which to contend.

Venezuela has already entered the ‘total catastrophe’ stage for its currency, but Japan will follow along, as will everyone eventually who lives in a country that finds itself unable to voluntarily abandon the sweet relief of booms enabled by credit creation.

Title: Re: Big Slide v2.0 Begins
Post by: agelbert on August 22, 2015, 02:24:30 PM
I believe prudent folks should take a gander at the year 2008 market stats. That year and this one track uncomfortably (depending on your point of view  ;D) well.

The Stock Market In 2015 Is Starting To Look Remarkably Similar To The Stock Market In 2008

http://theeconomiccollapseblog.com/archives/the-stock-market-in-2015-is-starting-to-look-remarkably-similar-to-the-stock-market-in-2008 (http://theeconomiccollapseblog.com/archives/the-stock-market-in-2015-is-starting-to-look-remarkably-similar-to-the-stock-market-in-2008)

(http://www.createaforum.com/gallery/renewablerevolution/3-311013200859.png)
Title: Re: Big Slide v2.0 Begins
Post by: MKing on August 22, 2015, 03:43:49 PM
I believe prudent folks should take a gander at the year 2008 market stats. That year and this one track uncomfortably (depending on your point of view  ;D) well.

The Stock Market In 2015 Is Starting To Look Remarkably Similar To The Stock Market In 2008


We shall see if we get to that wonderful of a buying opportunity. It will take some time to determine if we have reached the appropriate level of sheeple hysteria.

(http://www.contrarianadvisors.com/wp-content/uploads/buy-when-theres-blood-in-the-streets-baron-rothchild1.png)
Title: Black Monday
Post by: Guest on August 26, 2015, 02:04:05 AM


gc2smOff the keyboard of Michael Snyder



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Published on The Economic Collapse on August 24, 2015






Discuss this article at the Market Flambe Table inside the Diner



The First Time EVER The Dow Has Dropped By More Than 500 Points On Two Consecutive Days



New York City Empire State Building - Public DomainOn Monday, the Dow Jones Industrial Average plummeted 588 points. It was the 8th worst single day stock market crash in U.S. history, and it was the first time that the Dow has ever fallen by more than 500 points on two consecutive days. But the amazing thing is that the Dow actually performed better than almost every other major global stock market on Monday.  In the U.S., the S&P 500 and the Nasdaq both did worse than the Dow. In Europe, almost every major index performed significantly worse than the Dow.  Over in Asia, Japanese stocks were down 895 points, and Chinese stocks experienced the biggest decline of all (a whopping 8.46 percent). On June 25th, I was not kidding around when I issued a “red alert” for the last six months of 2015. I had never issued a formal alert for any other period of time, and I specifically stated that “a major financial collapse is imminent“. But you know what? As the weeks and months roll along, things will eventually be even worse than what any of the experts (including myself) have been projecting. The global financial system is now unraveling, and you better pack a lunch because this is going to be one very long horror show.



Our world has not seen a day quite like Monday in a very, very long time. Let’s start our discussion where the carnage began…



Asian Markets



For weeks, the Chinese government has been taking unprecedented steps to try to stop Chinese stocks from crashing, but nothing has worked. As most Americans slept on Sunday night, the markets in China absolutely imploded




As Europe and North America slept on Sunday night, Chinese markets went through the floor — the Shanghai Composite index of stocks fell by 8.49%, the biggest single-day collapse since 2007.



It wasn’t alone. Hong Kong’s Hang Seng fell 5.17%, and Japan’s Nikkei fell 4.61%. Stocks in Taiwan, the Philippines, Singapore, and Thailand also tumbled.




Things would have been even worse in China if trading had not been stopped in most stocks. Trading was suspended for an astounding 2,200 stocks once they hit their 10 percent decline limits.



Overall, the Shanghai Composite Index is now down close to 40 percent from the peak of the market, and the truth is that Chinese stocks are still massively overvalued when compared to the rest of the world.



That means that they could very easily fall a lot farther.



European Markets



The selling momentum in Asia carried over into Europe once the European markets opened. On a percentage basis, all of the major indexes on the continent declined even more than the Dow did




In Europe, the bloodbath from Friday continued unabated. The German Dax plunged 4.7%, the French CAC 40 5.4%, UK’s FTSE 100 dropped 4.7%. Euro Stoxx 600, which covers the largest European companies, was down 5.3%.



But wait… Europe is where the omnipotent ECB and other central banks have imposed negative deposit rates. The ECB is engaged in a massive ‘whatever it takes” QE program to inflate stock markets. But it’s not working. Omnipotence stops functioning once people stop believing in it.




U.S. Markets



Even before U.S. markets opened on Monday morning, the New York Stock Exchange was already warning that trading would be halted if things got too far out hand, and it almost happened




The thousands of companies listed by the New York Stock Exchange and Nasdaq Stock Market will pause for 15 minutes if the Standard & Poor’s 500 Index plunges 7 percent before 3:25 p.m. New York time. The benchmark got close earlier, falling as much as 5.3 percent.




There were other circuit breakers in place for later in the day if too much panic selling ensued, but fortunately none of those were triggered either. Here is more from Bloomberg




Another circuit breaker kicks in if the S&P 500 extends its losses to 13 percent before 3:25 p.m. If the plunge reaches 20 percent at any point during today’s session, the entire stock market will shut for the rest of the day.




When the U.S. markets did open, the Dow plunged 1,089 points during the opening minutes of trading. If the Dow would have stayed at that level, it would have been the worst single day stock market crash in U.S. history by a wide margin.



Instead, by the end of the day it only turned out to be the 8th worst day ever.



And in case you are wondering, yes, investors are losing a staggering amount of money. According to MarketWatch, the total amount of money lost is now starting to approach 2 trillion dollars




As of March 31, households and nonprofits held $24.1 trillion in stocks. That’s both directly, and through mutual funds, pension funds and the like. That also includes the holdings of U.S.-based hedge funds, though you’d have to think that most hedge funds are held by households.



Using the Dow Jones Total Stock Market index DWCF, -4.21% through midmorning trade, that number had dropped to $22.32 trillion.



In other words, a cool $1.8 trillion has been lost between now and the first quarter — and overwhelmingly, those losses occurred in the last few days.




Unfortunately, U.S. stock prices are still nowhere near where they should be. If they were to actually reflect economic reality, they would have to fall a lot, lot lower.



For example, there is usually a very strong correlation between commodity prices and the S&P 500, but in recent times we have seen a very large divergence take place. Just check out the chart in this article. At this point the S&P 500 would have to fall another 30 to 40 percent or commodities would have to rise 30 or 40 percent in order to close the gap. I think that the following bit of commentary sums up where we are quite nicely




“Markets are afraid of further economic weakness in China, further pain in global commodity markets and uncertain about Fed and PBoC policy — what they will do and what the impact will be,” Societe Generale’s Kit Juckes wrote on Monday. “The divergence between global commodity prices and equities is not a new theme but the danger now is that they begin to re-correlate – as they did when the dotcom bubble burst in 2000 and what had previously been an emerging market crisis became a US recession.”




And commodities were absolutely hammered once again on Monday.



For instance, the price of U.S. oil actually fell below 38 dollars a barrel at one point.



What we are watching unfold is incredible.



Of course the mainstream media is bringing on lots of clueless experts that are talking about what a wonderful “buying opportunity” this is. Even though those of us that saw this coming have been giving a detailed play by play account of the unfolding crisis for months, the talking heads on television still seem as oblivious as ever.



What is happening right now just doesn’t seem to make any sense to the “experts” that most people listen to. I love this headline from an article that Business Insider posted on Monday: “None of the theories for the Black Monday market crash add up“. Yes, if you are willingly blind to the long-term economic and financial trends which are destroying us, I guess these market crashes wouldn’t make sense.



And if stocks go up tomorrow (which they probably should), all of those same “experts” will be proclaiming that the “correction” is over and that everything is now fine.



But don’t be fooled by that. Just because stocks go up on any particular day does not mean that everything is fine. We are in the midst of a financial meltdown that is truly global in scope. This is going to take time to fully play out, and there will be good days and there will be bad days.  The three largest single day increases for the Dow were right in the middle of the financial crisis of 2008. So one very good day for stocks is not going to change the long-term analysis one bit.



It isn’t complicated. Those that follow my writing regularly know that I have repeatedly explained how things were setting up in textbook fashion for another global financial crisis, and now one is unfolding right in front of our eyes.



At this point, everyone should be able to very clearly see what is happening, and yet most are still blind.



Why is that?


Title: Morgan Stanley issues 'full house' buy alert for stocks
Post by: RE on September 04, 2015, 06:34:51 AM
hahahahahahahahahahaha!  :icon_mrgreen:

RE

http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html (http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html)

Morgan Stanley issues 'full house' buy alert for stocks

All five of the bank's key timing indicators are flashing a green light for the first time since early 2009, suggesting the worst may be over for global equities
Title: Re: Morgan Stanley issues 'full house' buy alert for stocks
Post by: jdwheeler42 on September 04, 2015, 07:32:02 AM
hahahahahahahahahahaha!  :icon_mrgreen:

RE

http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html (http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html)

Morgan Stanley issues 'full house' buy alert for stocks

All five of the bank's key timing indicators are flashing a green light for the first time since early 2009, suggesting the worst may be over for global equities
Hey, the timing seems perfect for a sucker's rally...
Title: Re: Big Slide v2.0 Begins
Post by: Eddie on September 04, 2015, 08:14:07 AM
Back up the truck. After the Fed raises the discount rate a quarter point, I'm sure the markets will soar.
Title: Re: Morgan Stanley issues 'full house' buy alert for stocks
Post by: azozeo on September 04, 2015, 11:30:57 AM
hahahahahahahahahahaha!  :icon_mrgreen:

RE

http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html (http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html)

Morgan Stanley issues 'full house' buy alert for stocks

All five of the bank's key timing indicators are flashing a green light for the first time since early 2009, suggesting the worst may be over for global equities



Will all the central banksters PAAAALEEEEESE put down the crack pipe !  :icon_scratch:
Title: Re: Big Slide v2.0 Begins
Post by: azozeo on September 04, 2015, 11:35:35 AM
http://www.youtube.com/v/pPGz6aDi8dc&fs=1
Title: Re: Morgan Stanley issues 'full house' buy alert for stocks
Post by: Surly1 on September 04, 2015, 02:17:32 PM
hahahahahahahahahahaha!  :icon_mrgreen:

RE

http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html (http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html)

Morgan Stanley issues 'full house' buy alert for stocks

All five of the bank's key timing indicators are flashing a green light for the first time since early 2009, suggesting the worst may be over for global equities



Will all the central banksters PAAAALEEEEESE put down the crack pipe !  :icon_scratch:

Glass pipes for everyone today. Check this out:
http://www.telegraph.co.uk/finance/economics/11845194/Nouriel-Roubini-dismisses-China-scare-as-false-alarm-stuns-with-optimism.html (http://www.telegraph.co.uk/finance/economics/11845194/Nouriel-Roubini-dismisses-China-scare-as-false-alarm-stuns-with-optimism.html)
(https://jeromiewilliamsdotcom.files.wordpress.com/2013/11/rob-ford-crack.jpg)
Title: Don't Worry, Be Happy!
Post by: RE on September 04, 2015, 02:40:06 PM
hahahahahahahahahahaha!  :icon_mrgreen:

RE

http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html (http://www.telegraph.co.uk/finance/11837853/morgan-stanley-capitulation-MSCI-Europe-equities-China-bank-stocks-1998-bonds.html)

Morgan Stanley issues 'full house' buy alert for stocks

All five of the bank's key timing indicators are flashing a green light for the first time since early 2009, suggesting the worst may be over for global equities



Will all the central banksters PAAAALEEEEESE put down the crack pipe !  :icon_scratch:

Glass pipes for everyone today. Check this out:
http://www.telegraph.co.uk/finance/economics/11845194/Nouriel-Roubini-dismisses-China-scare-as-false-alarm-stuns-with-optimism.html (http://www.telegraph.co.uk/finance/economics/11845194/Nouriel-Roubini-dismisses-China-scare-as-false-alarm-stuns-with-optimism.html)
(https://jeromiewilliamsdotcom.files.wordpress.com/2013/11/rob-ford-crack.jpg)

http://www.youtube.com/v/d-diB65scQU

RE
Title: Glencore Starts Process to Sell Some Assets in Chile and Australia
Post by: RE on October 12, 2015, 01:29:23 AM
http://www.bloomberg.com/news/articles/2015-10-12/glencore-to-sell-copper-mines-in-chile-australia-to-curb-debt (http://www.bloomberg.com/news/articles/2015-10-12/glencore-to-sell-copper-mines-in-chile-australia-to-curb-debt)

Glencore Starts Process to Sell Some Assets in Chile and Australia

    Swiss company offers Cobar and Lomas Bayas mines for disposal
    Divestments would add to $10 billion debt-reduction program

Glencore Plc is in talks to sell two mid-sized copper mines in Australia and Chile after approaches from buyers, adding to a $10 billion debt-cutting plan announced last month.

The trading-cum-mining group may divest the Cobar mine in Australia’s New South Wales together with a metallurgical plant that produces about 50,000 metric tons of copper-in-concentrate a year, Glencore said Monday in a statement. It’s also offering the Lomas Bayas open-pit operation in Chile’s Atacama desert, which produces about 75,000 tons of refined copper a year.

“The sale process is in response to Glencore receiving a number of unsolicited expressions of interest for these mines,” the Baar, Switzerland-based company said. “This will allow potential buyers to bid to purchase either one or both of the mines and may or may not result in a sale.”

The disposals would add to a debt-cutting program announced by Chief Executive Officer Ivan Glasenberg in early September. That plan includes selling $2.5 billion of new stock, asset sales, spending cuts and suspending the dividend -- in total reducing debt from $30 billion nearer to $20 billion. The company has said it intends to raise at least $2 billion from the sale of a minority stake in its agricultural assets and precious-metals streaming transactions.
Stock swings

The uncertainty that’s roiled metal markets has seen Glencore’s shares in London swing wildly in the past few weeks. Its stock plunged 29 percent on Sept. 28 to a record low on concern weak prices threatened its ability to repay debt. In the two weeks since, the shares have almost doubled. Glencore halted trading in Hong Kong Monday pending the announcement.

The potential copper-mine sales come as the price of the red metal hovers near its lowest since the global financial crisis. Copper for delivery in three months on the London Metal Exchange is trading just above $5,000 a ton, about half the $10,190 record set in 2011.

“Copper isn’t performing well, yet in fact that’s actually adding to its appeal as it’s probably now at the bottom of its price cycle,” Gavin Wendt, senior resource analyst at Mine Life Pty in Sydney, said by phone. ”It’s understandable that people are out there and looking to acquire copper assets at this moment.”

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.
Read this next

    It's Glencore Versus Goldman in Metals as Miners Cut Production
    Why Glencore's Longtime Lenders Haven't Walked Away
    Glencore Shares Halted Pending Detail on Asset Sales Plan

Title: More Glencore
Post by: RE on October 12, 2015, 07:51:29 AM
http://www.zerohedge.com/news/2015-10-12/glencore-production-cuts-backfire-after-worlds-second-largest-miner-vows-fill-glenco (http://www.zerohedge.com/news/2015-10-12/glencore-production-cuts-backfire-after-worlds-second-largest-miner-vows-fill-glenco)

Glencore Production Cuts Backfire After World's Second Largest Miner Vows To Fill The Glencore Void

Submitted by Tyler Durden on 10/12/2015 09:45 -0400

    Australia Bond China Copper Crude Deutsche Bank Fail Glencore Market Share Monetary Policy Saudi Arabia
 

First Glencore cut its coal production. Then a month ago as part of its "doomsday" deleveraging plan, the troubled Swiss miner-cum-trader announced drastic production cuts and major layoffs in its copper mining business, which would be reduced by 400,000 tons as a result of mine closures in Zambia and DR Congo. Then late last week the company surprised many when it once again slashed its zinc production by a third (while laying off 1,600 workers in Australia), in the process reducing global zinc output by 500,000 metric tons.

The logic, in theory, behind the move was simple enough. As DB summarized it, "$1650 for zinc is fundamentally too low and some of the capacity makes no cash at these levels - Solution: Shut it down until the price normalizes. While most market observers see the zinc market already in deficit, the dwindling price says otherwise and Glencore's move should bring forward the crunch point with a resulting positive impact on the metal price."

Additionally, DB provided a beautiful model of how said zinc production cut for Glencore - expected to be completed over the next 6 months - would look like, as well as the ensuing production ramp-up in 2017, "as the zinc price recovers."

 

On Friday the market, too, was delighted by this announcement, and led not only to a rally in price of Glencore stock but also unleashed the biggest surge in the price of zinc, which soared by over 10%, the biggest intraday move in history.

 

There was just one problem, and we laid it out in our response to the market reaction to Glencore's latest production cut - all it would take is for just one company to defect from this attempt to reestablish the "game theory" equilibrium, for the whole plan to fail.

    "with sales a function of price and volume, and with Glencore aggressively cutting volumes, it is hoping the price increase will (more than) offset the drop in volumes. Which is a big gamble as other cash-strapped miners step up their own production, in the process boosting supply and once again slamming the price of zinc (and copper) lower."

     

    It remains to be seen where the equilibrium price levels off after all these production cutbacks, although if the copper and zinc markets are anything like oil, it is certain that any volume reductions by Glencore will be promptly taken advantage of by Glencore's competitors, because in a global deleveraging and commodity supercycle repricing, he who cooperates while others defect, always loses the game theory.

This was once again spot on, because while Glencore's theory is admirable, it is what happens in practice that matters.

And what happened is that just as expected, overnight the world's second biggest mining company, Rio Tinto, warned that it will not cut copper production, saying it would be illogical to hold back output and leave space in the market for higher-cost rivals.

And just like that Glencore's assumption that others in the space will act rationally, and "cooperate" with the attempt by Glencore to impose a new game theoretical equilibrium by reducing supply, and thus boosting prices, has crashed and burned.

According to the FT, Jean-Sebastien Jacques, head of copper and coal at Rio, said the Anglo-Australian mining group would not reduce output even though current prices of the industrial metal did not reflect “fundamentals”.

    His comments come just days after rival commodities group Glencore said it would slash its zinc output by a third after the price of the industrial metal fell to a five-year low on concerns about slowing economic growth in China.

     

    Rio and its peer BHP Billiton have been ramping up production of their main commodities during the current price rout, betting that their low-cost assets will enable them to survive and maintain market share while higher-cost producers go bust.

     

    While copper prices have been slumping, Rio has been spending billions of dollars expanding output at its giant copper project in Mongolia, and is preparing a second underground phase of the mine.

Furthermore, just as we said that the crude paradigm of the past year is now dominant, so it has spread to all other commodities: a world where diversified miners are hoping they can take out the high-cost marginal producers by keeping the price painfully low through production below cost. The CEO confirmed this:

    “Why should I make cuts?” Mr Jacques said, in an interview ahead of LME Week, the biggest annual gathering of the metals and mining industry.

     

    “If you have marginal assets and marginal projects and you have a pretty weak balance sheet I think you may be in trouble pretty soon,” he said.

Which in turn brings up monetary policy, because just like Saudi Arabia has been hoping high cost US shale producers would have long since burned out by now, they keep finding gullible junk bond investors who fund them at below-cost prices, if only to clip at least one hefty double digit coupon before the company defaults (because at the end of the day, the year-end bonus paid out from other people's money, is all that matters in the ZIRP world).

So about that pretty Deutsche Bank zinc production chart shown above... well, scrap it because while it will be absolutely correct about the drop (unless Glencore renegs on its production cut plan just days after announcing it) there will be no rebound, unless Glencore wants to suffer even greater costs and negative cash flows associated with unmothballing stalled operations at prices that remain vastly uneconomical and loss-making.

Jacques also spoke to Bloomberg, reiterating his philosophy on boosting production at below-cost prices:

    The metal is “not trading on fundamentals,” Rio Copper & Coal Chief Executive Officer Jean-Sébastien Jacques said in an interview in London. “There is lots of short-selling in copper and we’ve seen the pick up in terms of short-selling in copper on the back of what happened in China a few months ago.”

     

    “It can be a very dangerous game in the medium and long term,” he said. “You don’t want to have a short position when the market moves into a deficit. From an industry standpoint, the sooner we move back into a deficit situation the better it is because currently there is a lot of noise in the system.”

Of course, with Rio Tinto set to boost production to take up the production generously given up by Glencore, the moment when the system shifts to equlibrium has been indefinitely delayed.

Worse, once Glencore realizes that its olive branch has been rejected, the miner will have no choice but to turn those machine back on, and proceed to regain all the market share it has lost because it, like the gullible longs, believes theory and practice are the same.

As for Glencore, the market is starting to realize the big picture, and the stock was down 4% as of this moment, its biggest drop in two weeks, and back to the level of the September equity follow on offering.
Title: Re: Big Slide v2.0 Begins
Post by: MKing on October 12, 2015, 11:01:40 AM
Glad to see the basics of supply and demand are working just as the economists figure it will. And just as surprising that folks apparently keep forgetting it, to their detriment.
Title: Junk Bond Blues
Post by: RE on November 19, 2015, 04:18:42 PM
Comprehensive article from PT

RE

http://www.acting-man.com/?p=41426 (http://www.acting-man.com/?p=41426)

     

 

 

While the Stock Market is Partying …

There are seemingly always “good reasons” why troubles in a sector of the credit markets are supposed to be ignored – or so people are telling us, every single time. Readers may recall how the developing problems in the sub-prime sector of the mortgage credit market were greeted by officials and countless market observers in the beginning in 2007.

 

oil rigPhoto credit: Getty Images

 

 

At first it was assumed that the most highly rated tranches of complex structured products would be immune, as the riskier equity tranches would serve as a sufficient buffer for credit losses. When that turned out to be wishful thinking, it was argued that the problem would remain “well contained” anyway. After all, sub-prime only represented a small part of the overall mortgage credit market. It could not possibly affect the entire market. This is precisely the attitude in evidence with respect to corporate debt at the moment.

 

1-HYG weeklyA weekly chart of high yield ETF HYG (unadjusted price only chart) – click to enlarge.

 

The argument as far as we’re aware goes something like this: there are only problems with high yield debt in the energy and commodity sectors. This cannot possibly affect the entire corporate credit market. We should perhaps point out that in spite of this sectoral concentration, problems have recently begun to emerge in other industries as well (a list of recent victims can be found at Wolfstreet).

The argument also ignores the interconnectedness of the credit markets. Once investors begin to lose sufficiently large amounts of money in one sector, the more exposed ones among them (i.e., those using leverage, a practice that gains in popularity the lower yields go, as otherwise no decent returns can be achieved), will start selling what they can, regardless of its relative merits. This will in turn eventually make refinancing conditions more difficult for all sorts of industries.

It also overlooks that energy and commodities-related debt is simply huge and the losses are really beginning to pile up by now. The junk bond market has grown by leaps and bounds during the echo bubble, so a lot of money has become trapped in it. Many low-rated borrowers need to continually refinance their debt, otherwise they will simply fold. Once liquidity for refinancing dries up – and this is what growing losses in a big market segment will inexorably lead to – it will be game over.

 

2-Merill Master II and CCC and belowMerrill Lynch high yield Master Index II effective yield (black line) and the yield on the CCC and lower segment (lowest rated credit/ red line). The worst rated bonds have been in relentless free-fall since the 2014 low in yields, with a move from 7.94% at the low to 14.71% today. Note bene, this has happened with administered interest rates stuck at zero over the entire time period! The better rated junk yielded 5.16% at the 2014 low, and yields 8% as of today, adding more that 280 basis points in bad juju since then. These yields are comparable to the woeful situation in 2011, when the euro area debt crisis was nearing its peak – click to enlarge.

 

It has turned out in hindsight that when we wrote in detail about the unsound boom in corporate debt last year, the price bubble in junk bonds had actually peaked a mere five trading days earlier. Nevertheless, debt issuance in both junk bonds and leveraged loans subsequently continued at a brisk pace for more than a year or so – this has only begun to change in recent months. The reason is that the losses are now indeed becoming rather concerning. In a recent note on the spike in default rates in the commodities space, Fitch remarks by way of summary:

 

Energy Default Rate Heads to 6%; Arch Filing Would Push Metals/Mining Over 14%. November already has added five defaults from the energy and metals/mining sectors.

The energy trailing 12-month (TTM) default rate finished October at 5.3%, the highest point since a 9.7% peak in 1999, while the exploration & production subgroup TTM rate hit 9%.

The metals/mining October TTM rate stands at 9.5% while the coal subsector jumped to 27%.

A potential filing for Arch Coal Inc. would propel the metals/mining TTM rate above 14% and the coal subsector to 40%.

The October TTM rate not including energy, metals/mining and Caesars Entertainment Operating Co. is 0.7%.

Energy and metals/mining experienced no new high yield bond issuance in October, the first time this happened since August 2011.

 

As you can see from the above, excluding all the bad stuff, things still look fine, but the bad stuff looks really bad. Someone is eating big losses, that much is certain. The fact that the rest of the corporate debt universe hasn’t been affected yet is where the “it’s well contained” idea comes from, but the only relevant question is really whether it will remain contained. The data say it won’t. The corporate credit bubble has become too large, while the cash flows supporting it are beginning to crater.

 

3-Corporate net debtA chart recently published by Societe Generale’s research department: until 2012, the massive growth in corporate net debt was still supported by commensurate growth in EBITDA (earnings before interest, taxes, depreciation and amortization). In the meantime a sizable gap has opened between the two – debt has continued to grow, but the income that supports it has begun to head in the opposite direction – click to enlarge.

 

Defaults Poised to Surge

Not surprisingly, the credit rating agencies are beginning to increasingly express concern over these developments. A recent report by Moody’s notes under the heading “The Credit Cycle Wanes”:

 

The US corporate credit cycle now fades. Thus far, the US high-yield credit rating revisions of 2015’s final quarter hint of the fewest upgrades relative to downgrades since 2009’s recessionary second quarter.

To date, the US high-yield credit rating changes of 2015’s fourth quarter show 57 downgrades far exceeding 18 upgrades. In addition, the accompanying revisions of investment-grade ratings include 11 downgrades and only one upgrade.

The final quarter of 2015 is shaping up to be the second straight quarter of substantially fewer high-yield rating upgrades relative to downgrades. A convincing negative trend may be emerging.

As long as high-yield downgrades well outnumber upgrades, any extended narrowing by the high-yield bond spread is suspect. For example, first-half 2007’s narrowing by the high-yield spread amid a distinctive upturn by net high-yield downgrades would prove to be a big mistake.”

 

(emphasis added)

In short, if there should be a short term rally in junk, use it to get the hell out of Dodge while you still can.

 

4-Expected default ratesExpected default rates of high yield borrowers tend to lead credit spreads – click to enlarge.

 

Accordingly, expected default rates are now increasing as well, and have reached levels that were last seen in 2009. As Moody’s notes in this context:

 

“The average expected default frequency (EDF) metric of US/Canadian non-investment-grade issuer is a forward looking indicator of the default rate. Recently, the high-yield EDF metric approximated 5.6%, which topped each of its previous monthly readings going back to the 6.4% of August 2009.

Given the surge in the number of downgrades, plunging upgrades, and the likelihood of significantly more defaults, the recent composite high-yield bond spread of 595 bp is unlikely to soon approach its 424 bp average of the two-years-ended June 2015. If anything, Q3-2015’s decidedly sub-par showings by business sales and operating profits warn of wider, instead of thinner, spreads.”

 

This confirms something we warned about when the market peaked in the summer of 2014. As we wrote at the time under the heading “The Expected Default Rates Trap”:

 

“[W]e want to briefly comment on the one data point that probably contributes more than any other to investor complacency: the expected 12 month default rate. All credit agencies put this expected rate at a new low for the move in 2014, not unreasonably arguing that because companies have issued so much debt, they are currently flush with cash and can postpone their refinancing plans if necessary.

[…]

Only in the 2001-2003 post technology bubble recession was a higher proportion of HY debt employed for refinancing purposes. Obviously, with demand for HY debt extremely high, even bad credits have little problem refinancing their debt. In other words, we are observing a feedback loop here: on the one hand, investors are emboldened by low default rates to keep refinancing HY borrowers, on the other hand it is precisely because they keep refinancing them that default rates remain so low.

As long as enough new money is provided the show can go on, but obviously, this is highly dependent on investor confidence. The question is therefore, when is investor confidence at its most vulnerable? Ironically, this is precisely when it is at its highest. When spreads and volatility are extremely low, they indicate a high point in confidence. This implies however that confidence can no longer improve further. Once things are “as good as they ever get”, there is just one way left for them to go: they can only get worse.”

 

Well, they sure have gotten worse. In the time period 2009 to 2013, between 53% and 64% of all high yield debt issuance proceeds globally were used for refinancing purposes. It doesn’t take a big leap of the imagination to see that problems could arise if investors should begin to balk. Indeed, the recent surge in defaults and default expectations has been marked by issuance in the most vulnerable segments of the corporate bond market grinding to a halt (see the Fitch comment above: HY issuance by energy and metals and mining companies in October stood at zero – the dip buyers are finally taking a break).

Moody’s notes that banks are pulling back concurrently and are busy tightening their lending standards with respect to commercial and industrial (C&I) borrowers. While the agency is uncertain of the precise cause-effect vector at work, this is how credit booms usually end: lenders begin to become nervous about their exposure and stop extending credit to dubious borrowers. Tightening lending standards tend to lead HY spreads as the chart below illustrates:

 

5-Bank credit supplyBank credit supply to business is tightening – HY spreads historically tend to follow suit – click to enlarge.

 

What is so remarkable about all this is that it has happened before the Federal Reserve has hiked rates even once from their current zero to 25 bp corridor (in practice, the effective FF rate has been oscillating between 7 and 14 basis points).

This is highly unusual and indicates that the end of QE3 must indeed, as we have always argued, be regarded as a significant tightening of monetary policy.

Thus the often heard refrain that the “taper” did not mean a tightening of policy was and remains misguided. Once an economy is hooked on an ever accelerating expansion of money and credit, any slowdown of said expansion will eventually trip the boom up. We also have confirmation of a tightening monetary backdrop from the narrow money supply aggregate M1, the annualized growth rate of which has been immersed in a relentless downtrend since peaking at nearly 25% in 2011. We expect that this trend will turn out to be a a leading indicator for the recently stagnant (but still high at around 8.3% y/y) growth rate in the broad true money supply TMS-2.

 

6-M1Annualized growth of narrow money M1 – click to enlarge.

 

Stock Market Fantasies

The stock market is traditionally the last market to get the memo – this is the case at present as well. As mentioned above, there is no shortage of rationalizations when segments of the credit markets come under pressure, and there is no shortage of rationalizations with respect to the stock market’s increasingly deteriorating internals either. This time it’s different!

Who cares if only a handful of big cap stocks is holding up the indexes? They deserve to trade at triple digit P/Es! Nothing can go wrong! Anyone who has observed the markets for a bit longer than today’s 20-something hotshot traders has heard it all before – several times. The sharp deterioration in credit-land is however one of the starkest warnings for risk assets yet.

Given that the Fed – focused as it is on lagging economic indicators – seems bent on hiking its administered rates shortly, one wonders how an actual rate hike cycle is going to affect the situation. Our hunch is that it won’t make things easier for assorted credit and liquidity junkies. On the other hand, one can probably be fairly certain that it won’t actually become a “cycle”. More likely it will end up a version of the BoJ’s repeated attempts over the years to hike rates, i.e., it will ultimately go nowhere.

In the meantime, the ratio of junk bond prices to equity prices has trended relentlessly downward, something that can be observed with unwavering regularity ahead of major market peaks. After all, the “it’s different this time” notion is holding sway every time – and it has a tendency to sound increasingly delusional the longer the stock market remains superficially strong.

 

7-JNK and JNK-SPX ratioThe price of junk bond ETF JNK (unadjusted) and the JNK-SPX ratio – stock market participants once again assume that credit market deterioration cannot harm them. This costly error is seemingly made every time – click to enlarge.

 

Conclusion

This isn’t going to end well, if history is any guide. Meanwhile, the foundation of the economy continues to look rotten (the newest round of Fed surveys has begun with another bomb and other manufacturing-related data continue to disappoint as well). It is no consolation that the service sector’s performance is still holding up better. Fo instance, a lot of spending related to health care has increased sharply. This is simply consumption, the price of which has moreover been distorted by government intervention. These artificially inflated activities aren’t going to create any wealth.

In addition, the misguided view that “manufacturing is just not important to the economy”, continues to hold sway as well. This is based on the misleading representation of actual economic activity in GDP. Gross output is telling the real story as we often point out. It should also be noted that every boom ends with capital goods and other higher stage industries affected first and the most. This is simply the nature of the credit-driven boom-bust cycle. Ignore the signs at your peril.

 

Charts by: StockCharts, Société Générale, Moody’s, St. Louis Federal Reserve Research

Title: Re: Junk Bond Blues
Post by: jdwheeler42 on November 19, 2015, 09:35:56 PM
We also have confirmation of a tightening monetary backdrop from the narrow money supply aggregate M1, the annualized growth rate of which has been immersed in a relentless downtrend since peaking at nearly 25% in 2011. We expect that this trend will turn out to be a a leading indicator for the recently stagnant (but still high at around 8.3% y/y) growth rate in the broad true money supply TMS-2.</p>
<p> </p>
<p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2015/11/6-M1.png" target="_blank">(http://www.acting-man.com/blog/media/2015/11/6-M1-1024x505.png)[/url]Annualized growth of narrow money M1
How very interesting, considering that the price of gold also peaked in 2011.  That chart sure does resemble the price of gold to me, although charts can be easily manipulated.  What would be really interesting would be the results of calculating the correlation between the two.
Title: Financial Markets Crashed, Including the Dollar. What Happened?
Post by: RE on December 09, 2015, 04:47:40 AM
http://www.globalresearch.ca/financial-markets-crashed-including-the-dollar-what-happened/5494296 (http://www.globalresearch.ca/financial-markets-crashed-including-the-dollar-what-happened/5494296)

Financial Markets Crashed, Including the Dollar. What Happened?

(http://www.globalresearch.ca/wp-content/uploads/2015/08/money-black-hole.jpg)
So what exactly happened last Thursday?  The markets (including the dollar) crashed …and this was not supposed to happen?

It’s actually quite easy to understand if you see what they did was “only a test” …   Do you understand what I mean when I say a “test”? 

I will explain shortly but first, the Fed came out with piggybacked governors talking about a rate hike.  Hilarious on the face of it if you just look at the U.S. economic implosion going on.

But let’s assume this is reality, the Fed really wants to hike rates (they do not “want to”,  they HAVE to).  For the sake of saving face and retaining any credibility they absolutely MUST raise interest rates after seven years …how do they do this?

Please read this piece by E.D. Skyrm,  just a .25% rate raise in rates will require the equivalent of up to $800 billion of collateral necessitated to being pulled.  Did you get that?  $800 billion???  A huge number and enough to tank the whole system …unless someone is willing to replace it.


For starters you must understand if the Fed does tighten and collateral is withdrawn from the system, because everything is now so levered …”collateral” from somewhere else must be added. That “somewhere” was supposed to be Europe.  Mario Draghi tried to push the EU governing council into further QE, in essence the German hawks refused and instead want to let some air out of the current bubbles.  Europe was supposed to carry the baton of QE, they instead dropped it. 

Mario Draghi tried to fix it on Friday with his “whatever it takes” statement.  I see a problem with this and it has to do with collateral, or the lack of.  You see, Europe is experiencing the same limits the Fed ran into during its last round of QE, not enough unencumbered collateral left to purchase.  Another way to say this would be …”there is just not enough debt outstanding”.  I know it sounds crazy because the underlying financial and economic problems have arisen BECAUSE there is too much debt …but, there is not enough to accommodate the needs for more QE.

What happened on Thursday was a “test of wills” between the Fed and the Bundesbank, the Fed clearly lost even though Friday was a giant reversal from Thursday.  I say this because Mario Draghi can say whatever he likes, his mouth will not create the collateral necessary to substitute for any tightening by the Fed.  He can say what he pleases but the governing council of the EU (run by hawkish Germans) will not reach for the QE baton.  Mr. Draghi can now only jawbone and try to mold appearances.

So where does this leave the Fed and their quarter point rate increase?  I would say they have already seen the future and … IT WAS THURSDAY!  If they decide to hike rates and the EU does not pick up the collateral slack, I believe we will not see the markets stay open for more than a week or so.  I say this because in essence the Fed will be issuing a margin call into a system already lacking for liquidity.  As I’ve said before, they originally treated a “solvency” problem with more liquidity and it has now morphed into a far bigger solvency problem.  Only this time as liquidity is also lacking, they do not have the tools (collateral) to create the needed additional liquidity.

The Fed has truly painted themselves into a corner of their own making.  I am shocked they have been so vocal and vehement they were going to raise rates.  Did they not have a deal already in place with the ECB or were they double crossed?  On the one hand if they do not hike rates, their credibility is toast.  On the other hand if they do raise rates they will smoke the financial markets faster than you can call your broker with a sell order.  I can only think the Fed somehow believed they had a deal with the ECB?  Even the BIS has warned the Fed about raising rates, is the Fed just not listening to the rest of the world?  Whether they see it or not, they have created a currency crisis with the dollar being the central character.   

The way I see this, the U.S. now has very big problems on the credibility front.  You can add to the above monetary fix we are in with a multitude of other U.S. “pictures” just not adding up.  U.S. “policy” is now being found out geopolitically thanks to Mr. Putin dropping a few “truth bombs”.  The domestic economy is already in recession and Christmas (the politically correct term is now “holiday”) sales will be a disaster.

“Truth” is beginning to slip out from behind several different curtains.  I hate to say it but a giant false flag will have to come out very soon in order to keep cover and divert attention from the truth.  I do not see any other options left, the reality MUST remain hidden or attention diverted, …or the unravelling comes.

Standing watch,

Bill Holter, Holter-Sinclair collaboration, Comments welcome  bholter@hotmail.com
Title: Anglo's Shadow Hangs Over Glencore Investor Day as Shorts Circle
Post by: RE on December 09, 2015, 06:18:48 AM
http://www.bloomberg.com/news/articles/2015-12-09/anglo-s-shadow-hangs-over-glencore-investor-day-as-shorts-circle (http://www.bloomberg.com/news/articles/2015-12-09/anglo-s-shadow-hangs-over-glencore-investor-day-as-shorts-circle)

Anglo's Shadow Hangs Over Glencore Investor Day as Shorts Circle



    Commodity rout, Glencore's debt burden luring short interest
    Shorting ahead of investor day a risky call, says analyst

Short sellers sensed something was amiss at Anglo American Plc this month, pushing bearish bets against the miner to a record high on the eve of yesterday’s investor meeting. It paid off when the stock plunged 12 percent after announcing a dividend cut.

Are they on to something at Glencore Plc too? Short interest has been rising ahead of the Swiss company’s shareholder day tomorrow, climbing to a two-year high of 5.3 percent of shares outstanding, according to Markit Ltd.

A multitude of concerns could be driving the bets. Combined with a 27 percent plunge in copper this year, Glencore’s debt burden is putting pressure on Chief Executive Officer Ivan Glasenberg to deliver on a $10 billion debt-cutting plan. At the meeting, executives are expected discuss measures to achieve that goal.

“It’s the interaction between the low commodity-price environment and the debt on the balance sheet,” said Tyler Broda, an analyst at RBC Capital Markets in London. “It definitely adds to the challenges facing management at the moment because the overall environment remains negative.”

(http://assets.bwbx.io/images/iOCbdbwnhYL0/v2/-1x-1.png)

Broda isn’t a bear. He suggests buying Glencore shares before tomorrow’s meeting in anticipation of asset sales and operational improvements. Still, he says, weak commodity prices will continue to cloud the longer term.

Shorts are probably using Glencore as a proxy to play the slump in copper and coal prices, says Marc Elliott, the mining analyst at Investec Plc whose bearish research spurred a record drop in the shares in September. Still, any good news out of tomorrow’s meeting and those bets might go the wrong way.

“Typically, they present a good story on their investor updates,” Elliott said in an interview. “Going short ahead of the investor day is quite a risky call.”

Compared to peers with high short interest, Glencore’s isn’t that high. That might be because getting hold of stock to short can be difficult -- five of the company’s eight largest shareholders are directors. Wm Morrison Supermarkets Plc and J Sainsbury Plc are the most shorted companies in Britain’s FTSE 100 Index, with more than 17 percent of shares outstanding.

Representatives for Glencore and Anglo American declined to comment on the short interest.

Anglo’s announcement yesterday that it would halt its dividend payout came during a particularly gloomy day for commodity markets. Disappointing economic reports out of China sparked renewed worries about a global slowdown in demand, sending the Bloomberg Commodity Index, down 24 percent this year, to its lowest level since 1998.

(http://assets.bwbx.io/images/iP2TSy62I2fI/v3/-1x-1.jpg)

Glencore’s debt is adding to price slump woes. It’s the biggest in the industry at $30 billion, and it’s also among the most expensive to insure in Europe, according to data from S&P Capital IQ. Anglo’s debt -- at about $12 billion -- is the next riskiest to insure.

“It’s the usual suspects, you go for anybody that’s leveraged,” said Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, referring to short sellers. “You look at the balance sheets and go: Glencore, Anglo American, boom, boom, job done.”

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.
Title: Re: Financial Markets Crashed, Including the Dollar. What Happened?
Post by: Eddie on December 09, 2015, 07:23:00 AM
http://www.globalresearch.ca/financial-markets-crashed-including-the-dollar-what-happened/5494296 (http://www.globalresearch.ca/financial-markets-crashed-including-the-dollar-what-happened/5494296)

Financial Markets Crashed, Including the Dollar. What Happened?

(http://www.globalresearch.ca/wp-content/uploads/2015/08/money-black-hole.jpg)
So what exactly happened last Thursday?  The markets (including the dollar) crashed …and this was not supposed to happen?

The term crash is overused in the parlance of market-speak. The bubble has to pop sometime, but whether a half point rise in interest rates will set off a tsunami of deleveraging, I'm not so sure.

I just have to shake my head sometimes. For nearly seven years we've heard how ZIRP is destroying the retirement savings of the elderly and causing a destructive carry trade that contributes to the widening income inequality throughout the world. To correct that, interest rates must rise.

Will it bring down the whole house of cards? I have no idea.

It’s actually quite easy to understand if you see what they did was “only a test” …   Do you understand what I mean when I say a “test”? 

I will explain shortly but first, the Fed came out with piggybacked governors talking about a rate hike.  Hilarious on the face of it if you just look at the U.S. economic implosion going on.

But let’s assume this is reality, the Fed really wants to hike rates (they do not “want to”,  they HAVE to).  For the sake of saving face and retaining any credibility they absolutely MUST raise interest rates after seven years …how do they do this?

Please read this piece by E.D. Skyrm,  just a .25% rate raise in rates will require the equivalent of up to $800 billion of collateral necessitated to being pulled.  Did you get that?  $800 billion???  A huge number and enough to tank the whole system …unless someone is willing to replace it.


For starters you must understand if the Fed does tighten and collateral is withdrawn from the system, because everything is now so levered …”collateral” from somewhere else must be added. That “somewhere” was supposed to be Europe.  Mario Draghi tried to push the EU governing council into further QE, in essence the German hawks refused and instead want to let some air out of the current bubbles.  Europe was supposed to carry the baton of QE, they instead dropped it. 

Mario Draghi tried to fix it on Friday with his “whatever it takes” statement.  I see a problem with this and it has to do with collateral, or the lack of.  You see, Europe is experiencing the same limits the Fed ran into during its last round of QE, not enough unencumbered collateral left to purchase.  Another way to say this would be …”there is just not enough debt outstanding”.  I know it sounds crazy because the underlying financial and economic problems have arisen BECAUSE there is too much debt …but, there is not enough to accommodate the needs for more QE.

What happened on Thursday was a “test of wills” between the Fed and the Bundesbank, the Fed clearly lost even though Friday was a giant reversal from Thursday.  I say this because Mario Draghi can say whatever he likes, his mouth will not create the collateral necessary to substitute for any tightening by the Fed.  He can say what he pleases but the governing council of the EU (run by hawkish Germans) will not reach for the QE baton.  Mr. Draghi can now only jawbone and try to mold appearances.

So where does this leave the Fed and their quarter point rate increase?  I would say they have already seen the future and … IT WAS THURSDAY!  If they decide to hike rates and the EU does not pick up the collateral slack, I believe we will not see the markets stay open for more than a week or so.  I say this because in essence the Fed will be issuing a margin call into a system already lacking for liquidity.  As I’ve said before, they originally treated a “solvency” problem with more liquidity and it has now morphed into a far bigger solvency problem.  Only this time as liquidity is also lacking, they do not have the tools (collateral) to create the needed additional liquidity.

The Fed has truly painted themselves into a corner of their own making.  I am shocked they have been so vocal and vehement they were going to raise rates.  Did they not have a deal already in place with the ECB or were they double crossed?  On the one hand if they do not hike rates, their credibility is toast.  On the other hand if they do raise rates they will smoke the financial markets faster than you can call your broker with a sell order.  I can only think the Fed somehow believed they had a deal with the ECB?  Even the BIS has warned the Fed about raising rates, is the Fed just not listening to the rest of the world?  Whether they see it or not, they have created a currency crisis with the dollar being the central character.   

The way I see this, the U.S. now has very big problems on the credibility front.  You can add to the above monetary fix we are in with a multitude of other U.S. “pictures” just not adding up.  U.S. “policy” is now being found out geopolitically thanks to Mr. Putin dropping a few “truth bombs”.  The domestic economy is already in recession and Christmas (the politically correct term is now “holiday”) sales will be a disaster.

“Truth” is beginning to slip out from behind several different curtains.  I hate to say it but a giant false flag will have to come out very soon in order to keep cover and divert attention from the truth.  I do not see any other options left, the reality MUST remain hidden or attention diverted, …or the unravelling comes.

Standing watch,

Bill Holter, Holter-Sinclair collaboration, Comments welcome  bholter@hotmail.com
Title: Bear Stearns Deja Vu all over again
Post by: RE on December 12, 2015, 03:18:33 PM
(https://nicholasdunlap.files.wordpress.com/2015/10/quote-yogi-berra-its-like-deja-vu-all-over-again-42447.png)

Here we go again...

RE

http://www.zerohedge.com/news/2015-12-12/eerie-echo-2007-it-really-bear-stearns-all-over-again (http://www.zerohedge.com/news/2015-12-12/eerie-echo-2007-it-really-bear-stearns-all-over-again)

The Eerie Echo Of 2007: It Really Is Bear Stearns, All Over Again

Submitted by Tyler Durden on 12/12/2015 11:19 -0500

    AIG B+ Bear Stearns Bond Collateralized Debt Obligations default Detroit High Yield Lehman Lehman Brothers Merrill Merrill Lynch Puerto Rico Real estate

While there are numerous and often conflicting opinions about the underlying causes that lead up to the Great Financial Crisis, most agree that the proximal catalyst which finally exposed all the overvalued, illiquid "cockroaches" and confirmed that subprime "is not contained" in the process unleashing the chain of events that culminated with the collapse of Bear, Lehman and AIG, was the failure of one of Bear Stearn's credit-focused hedge funds in the early summer of 2007.

Here is how the conventional wisdom recalls this development:

    On June 22, 2007, Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund, while negotiating with other banks to loan money against collateral to another fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund. CEO James Cayne and other senior executives worried about the damage to the company's reputation. The funds were invested in thinly traded collateralized debt obligations (CDOs). Merrill Lynch seized $850 million worth of the underlying collateral but only was able to auction $100 million of them. The incident sparked concern of contagion as Bear Stearns might be forced to liquidate its CDOs, prompting a mark-down of similar assets in other portfolios. Richard A. Marin, a senior executive at Bear Stearns Asset Management responsible for the two hedge funds, was replaced on June 29 by Jeffrey B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.

The rest is history.

We bring up this part of ancient financial history, because while looking at Stone Lion Capital Partners - the first hedge fund that gated investors as reported last night (Third Avenue's likewise gating high yield  fund was technically a mutual fund) - something curious emerged.

Here are the founders of Stone Lion Capital: Alan Mintz and Gregory Hanley. Those names sounded awfully familiar... and then we remembered why:

    Alan Jay Mintz, CPA, a co-founder of Stone Lion Capital was Co-Head of the Distressed Debt and High Yield trading group at Bear Stearns
    Gregory Augustine Hanley, a co-founder of Stone Lion Capital was Co-Head of the Distressed Debt and High Yield trading group at Bear Stearns

In fact, the co-founder of the now-gated Stone Capital Alan Mintz, is perhaps best known for his infamous locker room showdown with Bear 's CEO Alan Schwartz. The WSJ recalls this 2008 incident vividly:

    Twelve hours after agreeing to sell Bear Stearns Cos. for $2 a share, Alan Schwartz wearily made his way to the company gym for a much-needed workout. It was 6:45 a.m., March 17, and Bear Stearns's chief executive had slept little since hammering out the ugly details of his fire-sale deal with J.P. Morgan Chase & Co.

     

    When Mr. Schwartz, already dressed in his business suit, trudged into the locker room, Alan Mintz, still in his sweaty gym clothes, made a beeline for the boss.

     

    "How could this happen to 14,000 employees?" demanded the 46-year-old senior trader, thrusting his face uncomfortably close to Mr. Schwartz's. "Look in my eyes, and tell me how this happened!"

     

    Two and a half months later, Mr. Schwartz still isn't quite sure. To Mr. Mintz and others, he has blamed a market tsunami he didn't see coming. He told a Senate committee last month: "I just simply have not been able to come up with anything, even with the benefit of hindsight, that would have made a difference."

Seven years later, the former Bear Stearns distressed/high yield trading head Alan Mintz' own investors will be looking into his eyes and asking "how it happened" that their monthly performance reports, which were showing just a modest loss, were in fact grossly misrepresenting the underlying performance, and more importantly, liquidity (ahem Bear Stearns High-Grade Structured Credit Fund), of the hedge fund.

As for Alan's partner, Greg Hanley, what we do know is that reason why he rushed to start Stone Capital alongside Mintz, (initially with Tudor's support), is that there would be no place for him at JPM. From 2008:

    Bear Stearns' leveraged finance division - which includes high-yield bonds, leveraged loans and distressed debt - is expected to contribute as few as two senior salesmen to JPMorgan out of an estimated 75 executives who reported to Greg Hanley, head of the division, according to people who worked in it. Hanley, who did not return calls to his mobile phone, is also not planning to join JPMorgan.

Instead Hanley, alongside Mintz, exited the rubble of the insolvent Bear Stearns and joined Tudor to create Stone Lion, which ultimately became an independent entity with $2 billion in AUM.

And now, in a supreme twist of irony, Bear Stearns is back - maybe not the firm itself - but the people who were in charge of its distressed and junk bond trading group, and just like the summer of 2007, it is an ex "Bear"-run hedge fund that was the first to gate, just as the credit cycle is turning and the default cycle has begun, as we explained last week, just one day before everyone's attention finally focused on junk debt with Third Avenue's gating.

* * *

So much about the past, now what about the future, because while we know that the avalanche of redemptions is only just starting, a more pressing question is what was Stone Capital invested in, how will its "gating" impact the market, and what is the most immediate contagion pathway.

For the answer, keep your eyes open on Puerto Rico, where Stone Capital was a rather aggressive hedge fund investor in in the past year. Here is the Caribbean Business with its profile of a hedge fund that "raised $500 million to invest in Puerto Rico"

    A prominent New York-based hedge fund has raised around $500 million to invest in opportunities in Puerto Rico, according to CARIBBEAN BUSINESS sources. The $2 billion Stone Lion Capital Partners LLP has created the fund to invest in "credit structures, loan portfolios, alternate financing and private assets," according to official documents obtained by CARIBBEAN BUSINESS.

     

    "Stone Lion is one of the few hedge funds with a mandate to invest in Puerto Rico. Its team saw an opportunity, given the depreciation in asset prices and the lack of liquidity on the island. The fund is a source of capital that could partner with Puerto Rico's public and private sectors," said one source, who attended recent presentations made by the fund.

     

    Reached by telephone, Stone Lion officials declined to comment on the fund. However, Stone Lion representatives unveiled their plans in meetings with lawmakers, government officials and local financial executives over the past month, the sources said. Participants in the meetings included Government Development Bank officials, prominent lawmakers, private bank officials as well as Puerto Rico Electric Power Authority (Prepa) and Aqueduct & Sewer Authority (Prasa) officials.

     

    Besides participating in government- bond deals, Stone Lion is also analyzing alternatives to provide financing to Prepa and Prasa as well as private companies on the island, the sources said. The hedge fund is in discussions with a commercial bank regarding the potential purchase of a troubled loan portfolio and is analyzing the possible purchase of real estate, they added.

     

    Stone Lion is a member of the Ad Hoc Group of hedge funds that publicly back the Puerto Rico government's fiscal efforts, which entail making the public corporations self-sufficient and shoring up central government finances. There are 20 members with more than $240 billion combined under management and holding about $4.2 billion of Puerto Rico securities. Other members include Brigade Capital Management, Fir Tree Partners, Monarch Alternative Capital LP and Perry Capital LLC.

     

    Besides the Puerto Rico fund, Stone Lion runs an $835 million Opportunistic Credit Hedge Fund and a $625 million Liquidation Focused Fund.

     

    Stone Lion was founded in 2008 by Alan Mintz and Gregory Hanley, who have more than 20 years' experience in credit investing, and previously served as global heads of the distressed credit and research groups at Bear Stearns & Co. The firm has vast experience in debt reorganizations and has worked on both the Detroit and Jefferson County, Ala., bankruptcies, the biggest in the U.S. municipal-debt market so far. It also has experience dealing with bond insurers, with some of Puerto Rico's outstanding debt insured.

     

    Looks like the experience was only "vast" as long as the market was going higher. The second the bottom fell off, however, and the former Bear Stearns professionals pulled a, well... Bear Stearns.

However, we reserve judgment to declare that the second coming of Bear Stearns has truly come until we hear some iteration of this:
Title: Bank of Canada Crushes Loonie, Creates Mother of All Shorts
Post by: RE on December 12, 2015, 07:09:36 PM
Hosers are getting Hammered.

(https://i.ytimg.com/vi/hCG2aJJK4XM/maxresdefault.jpg)

RE

http://wolfstreet.com/2015/12/12/bank-of-canada-crushes-loonie-dollar-creates-mother-of-all-shorts/ (http://wolfstreet.com/2015/12/12/bank-of-canada-crushes-loonie-dollar-creates-mother-of-all-shorts/)

Bank of Canada Crushes Loonie, Creates Mother of All Shorts
by Wolf Richter • December 12, 2015

(http://wolfstreet.com/wp-content/uploads/2015/12/Canada-CAD-USD-2009_2015-12.png)

Clear winners: rich Chinese who buy homes in Canada.

The Canadian dollar swooned 1% against the US dollar on Friday, to US$0.7270, after having gotten hammered for the past six of seven trading days. It’s down 5% in December so far, 15.5% year-to-date, and 31% from its post-Financial Crisis peak of $1.06 in April 2011. It hit the lowest level since June 2004.

It got clobbered by the commodities rout, given their importance to the Canadian economy, the multi-year decline in the prices of metals, minerals, and natural gas, and then starting in mid-2014, the devastating plunge of the price of oil.

That the Fed has tapered QE out of existence last year and has been waffling and flip-flopping about rate hikes ever since made the until then beaten-down US dollar, at the time the most despised currency in the universe, less despicable – at the expense of the loonie.

Those factors would have been enough to knock down the loonie. But it wasn’t enough, not for the ambitious Bank of Canada Governor Stephen Poloz. The man’s got a plan.

He is in an all-out currency war. He’s out to crush the loonie beyond what other forces are already accomplishing. He’s out to pulverize it, and no one knows how far he’ll go, or where he’ll stop, or if he’ll ever stop. He has single-handedly created the short of a lifetime.

It should spook every Canadian with income and assets denominated in Canadian dollars and Canadians wanting to buy a home in their country (we’ll get to that bitter irony in a moment).

Poloz has been in office since June 2013, and this is what he has accomplished so far:

Canada-CAD-USD-2009_2015-12

One reason for pulverizing the Canadian dollar is to boost revenues and earnings of exporters. They get to translate their foreign-currency revenues into Canadian dollars on their financial statements. And analysts love that. It doesn’t matter how the bigger numbers got there, whether by inflation or devaluation, as long as they’re bigger.

And Canadian stocks could use some help. Despite the destruction of the loonie, the Toronto Stock Exchange index TSX has plunged 18% since its peak in June 2014 and is now back where it had been in September 2013.




So Poloz is trying to get Canadian workers to be able to compete with workers in Mexico and China and Bangladesh, and with those beaten-down wages in the US.

Alas, the Mexican peso too has gotten crushed. But ironically, the Bank of Mexico is spinning in circles to halt the decline. It’s selling its limited dollar reserves and buying pesos to prop up its currency, even as Canadians watch helplessly as their own currency descends into banana-republic status – something the US dollar used to excel at when the Fed was on its path of total dollar destruction.

Poloz has cut the Canadian benchmark rate twice this year, including a surprise cut in January that whacked the loonie. When he saw that the loonie hadn’t plunged far enough, he defended his rate cuts by predicting that Q1 numbers would be “atrocious,” which whacked the loonie. When it was revealed that GDP shrank 0.6% annualized in Q1, it whacked the loonie.

In April, he defended the use of the word “atrocious,” explaining, “It’s certainly not our intent to surprise or to frighten people.” He’d simply “wanted markets to understand that we already believed that the quarter was going to look quite poor….” It whacked the loonie.

In July, he explained that the “global economic developments have been quite disappointing,” that they led “to a significant downgrade” for Canada’s economy, and that the collapse in oil prices was eating into the economy at the worst possible moment, when it was undergoing a “significant and complex adjustment.” It whacked the loonie.

He keeps up the good work. He’s just never satisfied with it – always tries to perfect it, like a meticulous artist.

On December 8, Poloz warned out of the blue, with no one having even considered it, that the Bank of Canada was considering negative interest rates.

During the Financial Crisis, the Bank of Canada had maintained that a positive 0.25% would be the lowest possible rate; otherwise, certain corners of the financial markets, such as money markets, might collapse. But not anymore.

“The bank is now confident that Canadian financial markets could also function in a negative interest rate environment,” he said. He stressed that the bank had no intention at the moment to do so. But “it’s prudent to be prepared for every eventuality.” The loonie had already gotten whacked the day before in anticipation. And upon his words, it got whacked again.

But that still wasn’t enough. On Thursday, indefatigably, he told the new government to crank up deficit spending: “As Keynes noted as he watched the Great Depression unfold, fiscal policy tends to be a more powerful tool than monetary policy in such extreme circumstances,” he said, adding, “The effectiveness of monetary policy has its limits once interest rates reach very low levels….”

The next day, the loonie got whacked 1%.

These are just examples. Poloz does this all the time. Unlike the Bank of Japan and the ECB, which also face economic challenges, the Bank of Canada is able to destroy its currency without having to resort to mega-QE. It destroys it verbally. The oil price collapse helps, but it’s still true art.

But pulverizing the loonie so consistently, predictably, and forcefully – while it makes for the mother of all shorts – has some side effects, and perhaps that’s part of the plan too. It makes it cheaper for Chinese investors, whose currency has risen in near-lockstep with the “strong dollar,” to buy Canadian assets, such as government bonds – and real estate in one of the most glaring housing bubbles on earth.

Home prices jumped 9.3% in Toronto and 9.8% in Vancouver year-over-year in November, according to the Teranet-National Bank House Price Index, but only for Canadian buyers who earn their keep in Canadian dollars. For Chinese buyers who obtain their wealth, by hook or crook, in yuan, prices dropped as the loonie plunged 12.5% against the yuan over the 12-month period.

Poloz’ efforts make it cheaper for Chinese buyers to buy a Canadian home, while they make it more expensive for Canadian buyers. And by flooding into the smallish Canadian market and buying on the cheap with their yuan-based wealth, Chinese buyers are driving up costs even further for Canadian buyers.

And when Canadians finally can’t buy anymore, when the housing bubble begins to hiss hot air, maybe that’s when Poloz will get serious about negative interest rates, driving down the loonie even further and making Canadian real estate even cheaper for Chinese buyers, who then flood in and push up prices, thus moving these homes even further out of reach for most Canadians, all in order to boost earnings per share of some exporters.

“It’s hard to be bullish about the global economy,” reported the National Bank of Canada. Read…  World Trips Over the Explosive Dollar
Title: Re: Bank of Canada Crushes Loonie, Creates Mother of All Shorts
Post by: g on December 13, 2015, 02:49:21 AM

The path of all fiats throughout all of history.

                       
                                     (http://www.goldeneaglecoin.com/resource/productimages/2015-1oz-gold-bass-coin-obv.jpg)
Title: Big Slide v2.0 Begins: MARKET GONE NUTS! SOMETHING HAS BROKEN!
Post by: RE on December 14, 2015, 09:06:38 AM
Ruh Roh!
(https://fairyprincessdiaries.files.wordpress.com/2014/04/scoobydoo3z.jpg)

RE

http://www.zerohedge.com/news/2015-12-14/market-has-just-gone-nuts (http://www.zerohedge.com/news/2015-12-14/market-has-just-gone-nuts)
The Market Has Just Gone Nuts

Submitted by Tyler Durden on 12/14/2015 10:19 -0500

    Citadel Monetary Policy Volatility

Presented with little comment, aside to ask: "where are the liquidity-providers?"

Extremely heavy volume... and wild swings

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_ES_0.jpg)

Zoomed in the moves actually occurred over a 5 minute span... (via @NanexLLC )

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_ES2_0.jpg)


And it appears all about algos playing The VIX ETFs... (though we already know that VIX manipulation runs the entire market)

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_chaois_0.jpg)


420 Point roundtrip in The Dow in under 9 minutes...

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_ES1_0.jpg)

As HYG hit Friday's lows...

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_hyg1_0.jpg)

And all of this is happening right on cue following JPMorgan's Marko Kolanovic warnings of "massive stop losses" ahead..

Not surprisingly, the biggest potential selloff catalyst is the Fed itself and specifically the Dec. 16 FOMC announcement, which the Fed is desperate to guide as being "priced in" by the market, but considering the Fed's track record with getting any forecast right, concerns are starting to grow. "As for near-term risks—we believe the most imminent market catalyst will be the December Fed meeting in which we are likely to see the first rate hike of the cycle."

* * *

So far so good, but to a market which has traded mostly on technicals and program buying (and selling) in recent months, there is something far more troubling than just what the Fed will announce:

    This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market.

What does this mean? Considering that the bulk of the puts have been layered by the program traders themselves, including CTA trend-followers, and since the vol surface of the market will be well-known to everyone in advance, there is a very high probability the implied "stop loss" level will be triggered, and the market could trade to a level equivalent to the strike price, somewhere in the 1,800 area, or nearly 200 points below current levels.

Which would be a tragedy for the Fed: after all, nothing is more important to Yellen, Draghi et al, than affirmative market signaling - pointing to the (surging) market's reaction and saying "look, we did the right thing", just as Draghi did on Friday when he explicitly talked the market higher in the aftermath of the ECB's disastrous announcement.

The irony will be if, regardless of what the Fed does, the subsequent move is driven not by the market's read through of monetary policy but by the "pin" in this massive $1.1 trillion option expiry, the biggest in many years, one which if recent market action is an indicator, suggests the stop loss strike level will be taken out in the process setting the "psychological" stage for market participants who will look at the drop in the market, and equate it with a vote of no confidence in what the Fed is doing, potentially forcing the Fed to backtrack in less than 2 days!

Whether this happens remains to be seen, and we are confident the Fed's "arm's length" market-moving JV partner, Citadel, is currently scrambling to prevent any imminent selloff. However, considering Kolanovic' track record of hinting at key risk inflection risk, it is quite likely that whatever the ultimate closing price on December 16 and, more importantly, December 18, volatility may very soon have an "August 24" type event.

*  *  *

Something has broken.
Title: Re: Big Slide v2.0 Begins
Post by: agelbert on December 14, 2015, 01:09:57 PM
Something has been broken for about a century. It takes a while, but the REAL "real world" ALWAYS prevails.


(http://www.freesmileys.org/emoticons/emoticon-object-106.gif)
 (http://i.imgur.com/siGMkUI.gif)
Renewable Energy Kitty! 
Title: This Is How The Credit Collapse Spreads To Stocks
Post by: RE on December 14, 2015, 01:30:21 PM
We're accelerating rapidly here.  This looks like a watershed week in collapse!  :icon_sunny:

RE

http://www.zerohedge.com/news/2015-12-14/why-collapse-credit-matters-equity-investors (http://www.zerohedge.com/news/2015-12-14/why-collapse-credit-matters-equity-investors)

This Is How The Credit Collapse Spreads To Stocks

Submitted by Tyler Durden on 12/14/2015 15:50 -0500

    Bond goldman sachs Goldman Sachs Investment Grade Reality

"Yeah but it's junk credit... who cares! I am invested in solid megacaps and even solider FANGs - what can go wrong?"

The biggest buyer of stocks in 2016, will be, according to Goldman Sachs, the same as it was in 2015 - corporate management teams buying back their own stock in near record quantities. But there is a problem with this thesis... the cost of funding these epic buybacks is surging, making the un-economic actions of the CFO (if very economical for their own bank accounts as they sell record amounts of their own personal stock to their company) even more irrational.

Here is Goldman's David Kostin explaining who the biggest buyer of stocks is (and will be) - as a reminder, it's not "mom(o) and pop".

    We expect corporations will continue to be the largest source of demand for stocks, with net purchases by US companies totaling $450 billion, equal to about 2% of public equity cap. We forecast equity inflows from equity-related ETFs ($225 billion), equity mutual funds ($200 billion), life insurance ($50 billion), and foreign investors ($25 billion). We forecast net outflows from households ($25 billion) and pensions ($150 billion).

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/12/gs%20buybacks%203.jpg)

 

Well, the cost of funding that carnival of financial engineering and artifice (just ask Nordstrom, Macy's, IBM and so on) is soaring, as high-yield decompression pukes over into investment grade markets, spiking the cost of funding and crushing the 'economic feasibility' of debt-funded shareholder-friendliness:

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_lqd2.jpg)
Charts: Bloomberg

And, in case you thought "well, cost of funding has only gone up 30-40bps in IG, they can handle that," you are wrong! To all those who claim US corporate balance sheets are in great shape - they are not! Leverage is at record highs and interest coverage near record lows for the IG universe. And judging by today's collapse in Investment Grade bond prices, the market just woke up to this reality.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_lqd3_0.jpg (http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151214_lqd3_0.jpg)

Simply put, the Fed's policies enabled massive releveraging and now corporations are stuck with few options to escape a vicious circle - which by the way, is why it's called the credit 'cycle'.

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/IG%20lverage%20and%20coverage_0.jpg)

And this is why the contagion to IG matters:  the biggest buyer of stocks of the last few years is about to priced away as its (cheap debt) funding dries up, removing the biggest pillar of delusion from current equity valuations.
Title: Re: Big Slide v2.0 Begins
Post by: agelbert on December 14, 2015, 03:47:24 PM
"... removing the biggest pillar of delusion from current equity valuations."

:partytime2:





Title: Market Instability: The Financial System is Teetering on Leverage
Post by: RE on December 14, 2015, 03:55:51 PM
http://www.globalresearch.ca/more-market-instability-the-highly-leveraged-nature-of-our-financial-system-is-teetering/5495655 (http://www.globalresearch.ca/more-market-instability-the-highly-leveraged-nature-of-our-financial-system-is-teetering/5495655)

More Market Instability? The Highly Leveraged Nature of our Financial System is Teetering

By Bill Holter
Global Research, December 14, 2015

This week shapes up as one which could go down in the history books! Markets last week were tumultuous from weak equities, illiquid credit markets, FOREX markets in disarray and commodities hitting the skids …yet the Federal Reserve is intent on hiking rates? Have they taken this position because the markets are strong? Or because the economy …anywhere on the planet is overheating?

Before looking at “this week”, I have seen it said by many, “the Fed must raise rates to have any credibility left”. This is true to an extent but there is one core reason and one of their own making. You see, the fake data and outright lies have been coming out of Washington in such regularity and magnitude the Fed has been painted into a corner. They either raise rates “because things are so good” or they don’t …as a sign things aren’t so good. It has been for this reason I have had an eye out looking for some manufactured (false flag) event that takes the Fed off the hook. Time is getting short prior to Wednesday’s meeting and announcement …but there still is time.

It is quite interesting how China has devalued their yuan this past week prior to the Fed meeting.

They also announced they will monitor the Yuan’s value versus global currencies rather than just versus the dollar, in essence “de pegging” against the dollar. The weak yuan has been blamed for much of the past weeks volatility and weaknesses in financial markets. A rate hike by the Fed will only double down on the weakness. Also of interest in China are the numerous “disappearances”. For weeks there have been important individuals in the financial industry who have just disappeared. The latest fear was China’s equivalent of Warren Buffett had been disappeared.

http://www.wsj.com/articles/fosun-listed-units-halted-amid-questions-about-founders-whereabouts-1449798047 (http://www.wsj.com/articles/fosun-listed-units-halted-amid-questions-about-founders-whereabouts-1449798047)

It turns out he is being held and assisting “investigations”. In the words of Warren Buffett himself, we only find out who was swimming naked when the tide goes out!

On the geopolitical front, the burner turned up this past week and has become much more complicated. First, the IMF basically said Ukraine does not need to pay Russia for the $3 billion equivalent they borrowed two years ago. The IMF will only enforce “dollar debt” …so no more rule of law if not using dollars? Russia then announced they will begin their own oil market for trade and will be an alternative to West Texas and North Sea Brent …NOT in dollars. Please understand this type of action has in the past resulted in the deposing and ultimate death of both Saddam Hussein and Qaddafi.

In Syria, it has now become a literal rainbow of colors in their sky with the latest planes being British. There is risk of a mishap with so many different nations in the sky at one time. Russia and NATO member Turkey also continue Russian Missile Destroyer “Fires Warning Shots” To Avoid Collision With Turkish Vessel to posture while Mr. Putin ordered their forces to “destroy any targets that threaten Russian military in Syria”

http://tass.ru/en/defense/843243 (http://tass.ru/en/defense/843243) . Needless to say, the stakes are being raised and often.

We also have seen much higher stress in the credit markets as liquidity is evaporating. Junk bonds have been decimated as Zero Hedge reports The Coincidences Are Just Too Eerie: This Is The Last Time CCC Yields Were Here And Rising was the Fridaybefore Lehman blew up in 2008. Traders are now in fear of ANY liquidations as there is simply no depth on the bid side of the credit market. A perfect sign in fact was a second hedge fund announcing a halt to redemptions. Telling someone “they can’t get out” will only prod others who still can …to get out while they can! As a side note, Glencore CDS now puts the odds of a default over 5 years at better than a coin flip! Lastly, we are now half way through December and COMEX is still shy about two and a half tons of gold standing for delivery.

I apologize for the “dryness” and the amount of links in the above as I really do not like to write this way. It was necessary to point out many of the “possibilities” leading up to the Fed’s meeting on Wednesday. I was corrected by a reader for the use of “black swan” in a previous article because this term should be used for “unseen” or surprise events. No matter where you look there are reasons to be very “bearish on the world”. Whether it be equities, credit, derivatives, or nearly anywhere geographically, the risk versus reward is highly skewed toward digging a hole and covering yourself with a rock! …And these are the known risks!

I am not sure what the Fed will do on Wednesday. I am however sure if they do raise rates the volatility will increase and financial markets will probably not like it one bit. One must wonder what they will do should the equity markets drop a quick five or ten percent? Do they immediately reverse and lower rates? How credible is that? Liquidity is such that no matter what the Fed does, the highly levered nature of our financial system is teetering on “reverse” where it will eat itself up. This while a vast multiple of known detonators stand ready to unleash the financial dogs of hell.

We have created the most leveraged financial system in all of history. Liquidity is drying up and the question of “if” has been replaced with “when”. The odds of markets “closing” have risen dramatically. Stress, both geopolitically and financially can no longer be hidden in plain sight. Should the Fed raise rates, I believe markets far and wide will convulse into an unscheduled “holiday”. Yet we listen to the cheers for a rate hike? Even George Orwell would be shocked!
Title: Re: This Is How The Credit Collapse Spreads To Stocks
Post by: MKing on December 14, 2015, 04:25:36 PM
We're accelerating rapidly here.  This looks like a watershed week in collapse!  :icon_sunny:

RE


Currently the DJIA higher than it was during the last claimed collapse in August. Or the claimed global contagion from Greece. Or the claimed ebola nonsense. Or the world glowing because of Fukushima. So we are all still waiting, and not holding out breath yet, but I would be happy to see that market collapse, having pulled out in August, and now waiting for a REAL change in the numbers rather than just the smoke and mirrors, now you see it because some blogger claimed it collapse.

Title: Chesapeake Bonds Plummet To 27 Cents Of Par
Post by: RE on December 14, 2015, 07:06:46 PM
http://www.zerohedge.com/news/2015-12-14/chesapeake-bonds-plummet-27-cents-par-after-company-hires-restructuring-advisor (http://www.zerohedge.com/news/2015-12-14/chesapeake-bonds-plummet-27-cents-par-after-company-hires-restructuring-advisor)

Chesapeake Bonds Plummet To 27 Cents Of Par After Company Hires Restructuring Advisor

Submitted by Tyler Durden on 12/14/2015 20:18 -0500

    Carl Icahn Chesapeake Energy Credit Line Creditors Evercore High Yield Nat Gas None

After numerous false starts and months of hollow hopes for the stakeholders of beleaguered gas producer Chesapeake Energy, including an activist stake built up by none other than Carl Icahn which was the source of much transitory joy, various notional reducing debt exchanges, and speculation of asset sales, the time is coming when the inevitable debt-for-equity restructuring, one which could wipe away most or all of the existing $2.6 billion equity tranche (down from $11 billion a year ago) is on the table.

According to the WSJ, Chesapeake has hired restructuring advisor Evercore "to shore up its balance sheet as commodity prices extend their decline." This means that Evercore will seek to further slash its debt, almost certainly be equitizing a substantial portion of it, and handing it over as equity in the new company to CHK's bondholders.

And while many saw the restructuring, and potential prepackaged bankruptcy, coming from a mile away, what precipitated it was the plunge in the company's liquidity as a result of the ongoing collapse in commodity prices. Just earlier today, nat gas hit the lowest price in 13 years, which meant that after ending 2014 with $4.1 billion in cash, the company is down to just $1.8 billion in cash, or about 1-2 quarter of liquidity at the current cash burn rate.

But while CHK's stock has imploded, falling 79% this year to around $4.09 per share or a $2.7 billion market cap, the real story is in the company's bonds.

Chesapeake’s $1.3 billion in bonds due in 2020 bearing 6.625% interest recently traded at 29 cents on the dollar, down from 47 cents late last month, according to MarketAxess.

Worse, the company's 2023 bonds which were trading at par as recently as late May, just rumbled to a record low 27 cents on the dollar.

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/12/20151214_CHK_0.jpg)

What is troubling is that Chesapeake has already taken steps to reduce its debt load, and is offering to exchange bonds at a discount for up to $1.5 billion of new debt, while offering a partial priming and a stronger claim on the company’s assets. As the WSJ adds, the proposed swap follows a deal Chesapeake cut with its banks earlier this year that allowed it to issue the new high-ranking debt. In return, Chesapeake agreed to secure its $4 billion credit line with a top-ranking claim on its assets.

In other words, what Chesapeake is doing is using and abusing the goodwill of its creditors, both secured and unsecured, to extract every last penny from them while promising the sun and the moon to both groups.

This is hardly new: "Dozens of money-losing oil-and-gas companies have issued new debt this year, sometimes swapping it for discounted bonds, in an effort to ride out the slump in prices. SandRidge Energy Inc., Midstates Petroleum Co. and Halcon Resources Corp. all have done such deals this year."

However, in the aftermath of the most recent implosion in the high yield space, of which Chesapeake is a proud member, we expect that the banks, realizing at this point they are only throwing good money after bad will slam the issuance (and voluntary refi) window shut, forcing the company to burn the last of its cash which at current commodity prices should be gone by the summer of 2016, at which point it will have no choice but to file for bankruptcy. The only question is whether it will be a prepackaged consensual affair or a free-fall Chapter 11.

Our only question is whether Carl Icahn will be as generous with lending Chesapeake the Debtoi In Possession loan it will need, as he was in building up his 11% "BTFD" equity stake.
Title: Re: Chesapeake Bonds Plummet To 27 Cents Of Par
Post by: MKing on December 14, 2015, 09:06:43 PM
http://www.zerohedge.com/news/2015-12-14/chesapeake-bonds-plummet-27-cents-par-after-company-hires-restructuring-advisor (http://www.zerohedge.com/news/2015-12-14/chesapeake-bonds-plummet-27-cents-par-after-company-hires-restructuring-advisor)

Chesapeake Bonds Plummet To 27 Cents Of Par After Company Hires Restructuring Advisor


Come ON already, buying companies for pennies on the dollar is what some folks specialize in, LETS GET IT ON!!!!!

(https://hystar.files.wordpress.com/2010/07/wold-sheep-clothing2.jpg)
Title: Brazil gets JUNKED!
Post by: RE on December 16, 2015, 08:55:59 AM
The 2016 Summer Olympics should be a hoot.  ::)

Brazil is not Greece.  A LOT of people hold Brazilian bonds as collateral.  Petrobras also in the toilet.  Capital Ratios are toppling as we speak.

RE

http://www.zerohedge.com/news/2015-12-16/brazil-stocks-currency-tumble-after-fitch-downgrade-junk (http://www.zerohedge.com/news/2015-12-16/brazil-stocks-currency-tumble-after-fitch-downgrade-junk)

Brazil Stocks, Currency Tumble After Fitch Downgrade To Junk

(http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/12/CSBrazil4_0.png)
Title: Big Slide v2.0 Begins: BLACK FRIDAY
Post by: RE on January 15, 2016, 04:37:28 PM
Looking more and more like Da Fed has capitulated here.  CBs do not seem do be able to levitate the market in 2016, anywhere.  HUGE downdraft here already, and there is likely quite a ways to go on this deflation.

Look out below.  :o

(http://vignette2.wikia.nocookie.net/looneytunes/images/f/ff/Wile-E-Coyotes-Gravity-Lessons-1440x900-Wallpaper-ToonsWallpapers.com-.jpg/revision/latest?cb=20141130151949)

RE

http://www.zerohedge.com/news/2016-01-15/black-friday (http://www.zerohedge.com/news/2016-01-15/black-friday)

Black Friday

Tyler Durden's picture





 

Unleash hell...

And this...

Worst Start To A Year... Ever!

 

It's ugly in 'Murica...

 

Of course - it's not just US, China has collapsed this year...(Worst start to a year ever)

Japan was a shitshow..

 

And Europe is in a bear market having erased all of the Q€ gains... (Worst start to a year ever)

 

The day in stocks...

  • *S&P 500 FALLS 2.2% TO LOWEST LEVEL SINCE AUG. 25

But that level was heavily defended...

 

 

The week in stocks... worst 3-week drop in S&P, Dow, Trannies, Small Caps, and Nasdaq since Aug 2011

 

2016 in stocks...

 

Since The Fed rate-hike in stocks...

 

Since The Fed across asset-classes...

 

Since the end of QE3 in stocks...

 

It's a bloodbath in FANGs and Biotechs...

 

FANTAsy stocks are really ugly year-to-date (cap-weighted FANGs are down 12% YTD, Biotechs -17%)

 

Surprise - Equity markets catch down to on balance volume...

 

Financials bloodbathery fell to catch down to credit...

 

On the week, credit remains the leader...

 

But credit signals more pain to come... in stocks...

 

Especially in the most credit-sensitive small caps...

 

And VIX...

 

With Energy credit risk at its highest on record...

Carnage Continues, Energy Yields Set Record High

(Bloomberg) -- WTI oil has dropped to a new 12y low, falling below $30/bbl, triggering a broad sell-off across asset classes, with equities dropping 2.6%, HY ETFs falling 1.6% (lowest levels since 9/09), HYCDX slipping 1.1% and cash bonds falling across sectors led by oil companies in the Energy sector.

 

The BofAML U.S. HY Energy index YTW set a new historical high last night closing at 17.43%, surpassing the 17.048% close on 12/5/2008 during the height of the financial crisis

 

As of Wednesday’s close, the BofAML U.S. HY Energy index option adjusted spread to Tsys closed at +1,501, eclipsing the previous wide level seen at the height of the crisis of +1,494 on 12/5/2008

 

Energy bonds were roiled led by Sanchez Energy which plummeted 32% intraday followed by EP Energy (-15%), Whiting Petroleum (-13%), and Oasis Petroleum (-11%)

 

As Energy, Materials, and Financials lead the collapse in stocks since The Fed rate-hike...

 

Treasury yields collapsed this week (with the curve flat)...

 

And the USD Index gave up some of its gains to end the week up 0.3%... USDJPY dropped 0.25% on the week

Commodities were a mess with Gold and silver best (unch to modestly lower) while copper and crude were clubbed...

 

Crude closed below $30 for the first time since September 2003...

 

Charts: Bloomberg

Bonus Chart: Rate-Hike Odds have plunged...

Bonus Bonus Chart: Value is collapsing and Momentum remains high post-QE3 - we suspect that will revert... (h/t @groditi)

Title: Re: Big Slide v2.0 Begins
Post by: agelbert on January 15, 2016, 05:53:59 PM
Yep.

The 401k of the average American has lost about $7,000 since the year began. Just imagine how much the big pocketed Wall Street greedballs lost...

 
(http://pm1.narvii.com/5869/6a64193d6770c3afd17406c78686c0eda32ded1c_hq.jpg)

For those who dislike my rubbing it in, I wish to remind you that I WARNED YOU, not just about fossil fuels, but as to the stock market fed funny money fake valuations as well.   (http://www.pic4ever.com/images/301.gif)  So don't blame me if you didn't take my advice to get out while the getting was good. El que no oye consejo, no llega a viejo.

Quote
A graphic from SEPTEMBER of 2015 by Agelbert:

 
(http://www.createaforum.com/gallery/renewablerevolution/3-280915144116.png)

January 13, 2016, SLB stock price: Schlumberger Limited. NYSE: SLB - Jan 13 2:47 PM EST 63.92




NYSE: SLB - Jan 15 7:52 PM EST 63.03

Title: Re: Big Slide v2.0 Begins
Post by: RE on January 15, 2016, 06:05:17 PM
Quote
A graphic from SEPTEMBER of 2015 by Agelbert:

 
(http://www.createaforum.com/gallery/renewablerevolution/3-280915144116.png)


Nice graphic there AG!

RE
Title: Re: Big Slide v2.0 Begins
Post by: agelbert on January 15, 2016, 06:12:11 PM
Quote
A graphic from SEPTEMBER of 2015 by Agelbert:

 
(http://www.createaforum.com/gallery/renewablerevolution/3-280915144116.png)


Nice graphic there AG!

RE

Glad you like it!  :emthup: :icon_sunny:
Title: Re: Big Slide v2.0 Begins
Post by: MKing on January 15, 2016, 06:18:22 PM

For those who dislike my rubbing it in, I wish to remind you that I WARNED YOU, not just about fossil fuels, but as to the stock market fed funny money fake valuations as well.   (http://www.pic4ever.com/images/301.gif)  So don't blame me if you didn't take my advice to get out while the getting was good.

Advice is easy, I put my money where my mouth is, I got out back in August, remember? It has taken more than 4 months for the market to get to a point where I, betting on doom, am now ahead of the market. 16,500 was my exit point I believe.

Back then we had a conversation because among all the talking head bloggers who won't for a second volunteer when they bet, or how much, while blathering on as though their free advice is worth any more than was paid for it.

So far, I'm a little ahead of the game, and like the valuation of a companies reserve base, I require more before going back in, tip of the spear. When is it time to pile back in GO? 14,000? 12,000? Think we can get a real <10,000 going?

I mean, low fuel prices for upcoming road trips, if the economy tanks it will be happy days for business travel again, even if only for a little while, my most recent analysis for Appalachian producers identified at least one 9 figure target, the prices are destroying cash flows for the stripper well producers, it isn't just a happy hunting ground, it is like...nirvana! hunting grounds!
Title: Re: Big Slide v2.0 Begins
Post by: g on January 15, 2016, 06:22:31 PM
Quote
The 401k of the average American has lost about $7,000 since the year began. Just imagine how much the big pocketed Wall Street greedballs lost...

Perhaps AG, but not a given.  Many in this group are quite sophisticated in these matters, excel in hedging, write calls against long positions and engage in all sorts of advanced techniques or portfolio insurance.

There are also gigantic pool and manipulation operations being run by these filth, and the top boys mentioned call the shots. Unfortunately a bear market can enrich these gents faster and more easily than a bull market. Stocks always fall faster than they go up as a general rule. Bear raiding a stock is one of their specialties.

My experience has taught me that the piggies eat well on both sides of the market, and it's the smaller guy that gets all the poorer in a bear.

Naturally there are always exceptions, there is always a piggy that gets too fat and lazy and screws up from sloth and gluttony at the trough.

Something awful true about the old saying," The Rich get Richer and the Poor Poorer"


                                             
Blankfien
Blankfien

                                                          Say's He Does God's Work.
Title: Re: Big Slide v2.0 Begins
Post by: RE on January 15, 2016, 06:40:22 PM
Something awful true about the old saying," The Rich get Richer and the Poor Poorer"

EVERYBODY KNOWS
http://www.youtube.com/v/XTc3hIEPTyo

A very few people know or understand Mean Reversion.  What goes round, comes round.  Just ask Marie Antoinette and Nicholas & Alexandra Romanoff.

http://www.youtube.com/v/lo5BBHtn4tM

RE
Title: Re: Big Slide v2.0 Begins
Post by: Eddie on January 15, 2016, 06:51:11 PM
I think we've slipped into a bear market, but the pressure  has to be for a bear rally now, to squeeze the shorts for a month or so.

A continuation of equities to go down, down, down, for another, say 2-3 weeks even, would make me think that the situation is truly more than a normal bear market, and that the rich market  manipulators have truly been beaten, and that we're slipping into the Great Depression II.

So, far, my gut say the Fed is happy with a correction in an overheated market, that they won't lift a finger until stocks are maybe 30% off the highs, but that at some point they'll start a more aggressive round of  money printing. So far the S&P is only off the highs by 11%.


Title: Re: Big Slide v2.0 Begins
Post by: Eddie on January 15, 2016, 07:01:28 PM
As of today the 1 CAD equals .69 USD.

Today I learned a new word, Canuckistan. Working people in the frozen north are hurting bad right now, as they lose their commodity based jobs and food prices skyrocket.
Title: Re: Big Slide v2.0 Begins
Post by: RE on January 15, 2016, 07:13:19 PM
As of today the 1 CAD equals .69 USD.

Today I learned a new word, Canuckistan. Working people in the frozen north are hurting bad right now, as they lose their commodity based jobs and food prices skyrocket.

The Hosers are getting Hosed.  ::)

TAKE OFF!

http://www.youtube.com/v/ot70G4wSQi0

RE
Title: Re: Big Slide v2.0 Begins
Post by: agelbert on January 15, 2016, 07:40:17 PM

For those who dislike my rubbing it in, I wish to remind you that I WARNED YOU, not just about fossil fuels, but as to the stock market fed funny money fake valuations as well.   (http://www.pic4ever.com/images/301.gif)  So don't blame me if you didn't take my advice to get out while the getting was good.

Advice is easy, I put my money where my mouth is, I got out back in August, remember? It has taken more than 4 months for the market to get to a point where I, betting on doom, am now ahead of the market. 16,500 was my exit point I believe.

Back then we had a conversation because among all the talking head bloggers who won't for a second volunteer when they bet, or how much, while blathering on as though their free advice is worth any more than was paid for it.

So far, I'm a little ahead of the game, and like the valuation of a companies reserve base, I require more before going back in, tip of the spear. When is it time to pile back in GO? 14,000? 12,000? Think we can get a real <10,000 going?

I mean, low fuel prices for upcoming road trips, if the economy tanks it will be happy days for business travel again, even if only for a little while, my most recent analysis for Appalachian producers identified at least one 9 figure target, the prices are destroying cash flows for the stripper well producers, it isn't just a happy hunting ground, it is like...nirvana! hunting grounds!

Listen closely. My advice was delivered to you and everyone else LONG before September of 2015. You know that. I have posted on it. You were abusive, sneering and mocking in stating, as far back as November of 2014, that you would not even consider taking advice from someone like me. I may not meet your standards of excellence and erudition, but that does not mean that your failure to listen to CFS isn't your fault. It is. If you want to make an argument that a person must be "credentialed" before you listen to what they say, then you should live in library. 

You lost your ASS on SLB (and maybe CAM too!) by ignoring my advice. MOST of the descent happened BEFORE you "got out" (a dubious claim since you do not provide evidence of that here).

AND, I DO put my money where my mouth is. THAT IS, I have always been up front about the FACT that I DO NOT OWN STOCKS! What part of that do you wish to twist, mock and deride in your typical empathy deficit disordered modus operandi now?

As far as the "reliability" of your advice here OR in your petroleum industry field, see below:

  (http://www.createaforum.com/gallery/renewablerevolution/3-130116135729.gif)

As I told GO the other day, YOU are not here to help anybody with financial advice and you are PROUD of that!

Your purpose continues to be to convince all of us that, when the environmental shit your pals have profited from hits the fan, "Fragmentation of Agency" in laying the blame EQUALLY on we-the-people and your beloved polluting fossil fuel pig industry will be the order of the day. (http://2.bp.blogspot.com/_9HT4xZyDmh4/TOHhxzA0wLI/AAAAAAAAEUk/oeHDS2cfxWQ/s200/Smiley_Angel_Wings_Halo.jpg)   (http://www.createaforum.com/gallery/renewablerevolution/3-051113192052.png)


I admit your are pretty good at muddling the issue and creating convenient scape goats. It's part of the MO of an excellent Game Theorist.

You might even get away with it if enough people swallow it. After all, you represent a "business model" that has profited from making suckers out of people while you polluted the shit out the biosphere for over a century.

So, it must be admitted that you, and those you represent, are quite good at pulling the wool over people's eyes. Congratulations (from other game theorists) are in order.  :evil4:

That said, I hasten add that you are somewhat nuanced in your predation. I think you "limit" your Game Theory predatory practices to competitor humans (and animals that get in your way). That is, I am sure you have quite a bit of altruistic behavior reserved for your family, friends and pets. :emthup:

But beyond that, you disdain, deride and eschew altruism as a weakness to be abhorred by "apex predators" like you.

I may be wrong, but I do believe that you are an accomplished Game Theorist. The advocates of that theory in your beloved "real world" (Wall Street/M.I.C./Polluters' R' US) have degraded our democracy and our biosphere, but they have made a lot of money...

So I guess that makes it all worthwhile to you and your fellow Game Theorists.

But ya know, when the bill for all this shit gets REALLY in our faces, I sincerely hope, since YOU and your fossil fuel industry pals WILL NOT accept the responsibility for causing the environmental damage, that the rest of us who give a fuck about future generations can handle it.

Have a nice day.

Title: Re: Big Slide v2.0 Begins
Post by: MKing on January 15, 2016, 07:43:40 PM
As of today the 1 CAD equals .69 USD.

Today I learned a new word, Canuckistan. Working people in the frozen north are hurting bad right now, as they lose their commodity based jobs and food prices skyrocket.

I spent my time working near the Arctic circle when the looney was worth about that much. The country wasn't all that bad at that exchange rate, I doubt that yet one more country feeling the consequences of the resource curse, particularly one as developed as Canada, is going down the tubes because of it. The usual economic dislocation..? Sure. But as usual, there wouldn't be any cool stuff to fantasize over if we were all quants, right?
Title: Re: Big Slide v2.0 Begins
Post by: g on January 16, 2016, 06:12:13 AM
As of today the 1 CAD equals .69 USD.

Today I learned a new word, Canuckistan. Working people in the frozen north are hurting bad right now, as they lose their commodity based jobs and food prices skyrocket.

I spent my time working near the Arctic circle when the looney was worth about that much. The country wasn't all that bad at that exchange rate, I doubt that yet one more country feeling the consequences of the resource curse, particularly one as developed as Canada, is going down the tubes because of it. The usual economic dislocation..? Sure. But as usual, there wouldn't be any cool stuff to fantasize over if we were all quants, right?

The rest of the world should be as fortunate as Canada, what a majestic country.

The current exchange value of the looney means little in the big picture of this beautiful country, likewise Argentina, and Australia, two more natural beauties rich in resources and natural wonder, currently being marginalized by banksters with their fiat currency trading scams.

True Bargains are rare in this world, and those with a long term horizon would do well to consider assets in these countries IMO. Canada would be my first choice as I, like MKing remember the prior period of favorable Looney exchange rates, there were fantastic bargains around at the time.
Title: Re: Big Slide v2.0 Begins
Post by: g on January 16, 2016, 06:49:48 AM
Quote
When is it time to pile back in GO? 14,000? 12,000? Think we can get a real <10,000 going?

Hi MKing, MY honest feeling is the markets have been totally corrupted and are rigged, so I no longer give specific investment advice to the public, except to buy Gold and Silver at regular intervals with excess fiat at your disposal for savings outside of the bankster credit fiat system. A cost averaging approach.

With regards to a couple of gents shooting the bull in a tavern over a couple of friendly beers however, my retort would be. " Think the Worst, You Shan't be Disappointed "

My gut feeling is also that Mr Stockman is on target, and one would do well to at least listen carefully to his advice.

My problem with not being more specific is that under the current fiat regime we find ourselves in, the Fed can step in at any time and act, as Eddie alluded too in his post. I do think their credibility has probably been damaged however, which is why I present David Stockman.

You see, without Gold, we are in a fantasy land of paper dreams and manipulations, the madness and stupidity of which cannot be imagined by the sane.      :icon_scratch:

 "Newton (the grand architect of the gold standard)... replied:  'Gentlemen, in applied mathematics, you must describe your unit."


                                                          (http://3.bp.blogspot.com/_fmJOEaFs4cI/TTDofEdEdjI/AAAAAAAAAEo/iQhIRL5k8fE/s1600/gold%2B1%2Bounce.jpg)

Title: Re: Big Slide v2.0 Begins
Post by: MKing on January 16, 2016, 09:14:29 AM
The rest of the world should be as fortunate as Canada, what a majestic country.

Yup. It is pretty nice.

Quote from: Golden Oxen
True Bargains are rare in this world, and those with a long term horizon would do well to consider assets in these countries IMO. Canada would be my first choice as I, like MKing remember the prior period of favorable Looney exchange rates, there were fantastic bargains around at the time.

Yeah, but even back then it wasn't a cheap place to live. Gasoline was more expensive, housing, health care was free, but the locals I trained complained about the taxes, which were pretty severe, to pay for the largess otherwise available.

I've been up and down the Cassiar and Alcan a couple times now, I could see retiring to a little B&B somewhere along the route.
Title: Wealth Redistribution Illustrated: Stealing from the Poor to Give to the Rich
Post by: RE on January 20, 2016, 12:14:48 PM
Best chart to date illustrating the transfer of wealth since 2008.  Crossover point came in 2011.

RE

(http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/11-overflow/20151115_low2.jpg)

http://www.zerohedge.com/news/2016-01-20/harry-reid-urges-calm-despite-stock-market-drop (http://www.zerohedge.com/news/2016-01-20/harry-reid-urges-calm-despite-stock-market-drop)
 
Harry Reid Urges "Calm" Despite Stock Market Drop
Title: Congratulations to GO!
Post by: agelbert on January 20, 2016, 03:37:16 PM
I just dropped by to congratulate GO. Despite my disagreements with his choice of politics, I celebrate the fact that, unlike a certain fossil fueler here  ;), he firmly believes in NOT subsidizing the past, but instead INVESTING in the FUTURE.    (http://www.createaforum.com/gallery/renewablerevolution/3-080515182559.png)


As you all know, or should know, I don't own stocks. GO, however, DOES. And GO began investing in Solarcity some time ago.  :emthup: :icon_sunny:

Today, despite more cratering in the market in general and FOSSIL FUEL STOCKS IN PARTICULAR  (http://www.freesmileys.org/emoticons/emoticon-object-098.gif) (http://www.pic4ever.com/images/4fvfcja.gif), GO's WISDOM and FORESIGHT was amply rewarded. (http://www.freesmileys.org/emoticons/emoticon-object-062.gif)


WELL DONE. Golden Oxen!
(http://www.freesmileys.org/emoticons/tuzki-bunnys/tuzki-bunny-emoticon-036.gif)

SolarCity Corp NASDAQ: SCTY - Jan 20 6:21 PM EST

33.82 Price increase 2.73 (8.78%)

Fossil fuelers: EAT your heart out! (http://www.pic4ever.com/images/5yjbztv.gif)

Title: Asia...We've Got a Problem
Post by: RE on February 12, 2016, 01:04:16 AM
(https://blogs.manageengine.com/wp-content/uploads/2015/05/Houston-we-have-got-Problem.jpg)

RE

http://www.reuters.com/article/global-markets-idUSKCN0VL044 (http://www.reuters.com/article/global-markets-idUSKCN0VL044)

Asian shares slip as bank fears add to global gloom
TOKYO | By Hideyuki Sano

(http://s4.reutersmedia.net/resources/r/?m=02&d=20160212&t=2&i=1116857747&w=644&fh=&fw=&ll=&pl=&sq=&r=LYNXNPEC1B02T)
People are reflected in a display showing market indices outside a brokerage in Tokyo, Japan, February 10, 2016. REUTERS/Thomas Peter

Asian shares fell for a sixth straight session on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdowns in China and other emerging markets.

The prices of yen, gold and liquid government bonds of favoured countries soared as investors rushed to traditional safe-haven assets.

"The markets are clearly starting to price in a sharp slowdown in the world economy and even a recession in the United States," said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.

"I do not expect a collapse or major financial crisis like the Lehman crisis but it will take some before market sentiment will improve," he added.

MSCI's index of Asia-Pacific shares outside Japan fell 0.8 percent.

Japan's Nikkei fell 5.4 percent to a 15-month low and posted a weekly loss of 11.1 percent, its biggest since October 2008, as this week's sudden spike in the yen took most investors by surprise.

"It is hard to find a bottom for stocks when the yen is strengthening this much. It is hard to become bullish on the market in the near future," said Masaki Uchida, executive director of equity investment at JPMorgan Asset Management.

"But the valuation of some (Japanese) bank shares is extremely cheap. So for long-term investors, it could be a good level to buy," he added.

European shares are expected to rebound, however, after big falls earlier this week, with spread-betters expecting Britain's FTSE to rise 2.0 percent and German's DAX and France's CAC to gain 1.3 percent.

The FTSEurofirst 300 index of top European shares sank 3.7 percent to its lowest level in 2-1/2 years.

Financial shares led losses in Australia and Hong Kong, falling 1.6 percent and 1.8 percent though their declines are still modest compared to peers in Europe and the US.

"We have been hit by a steady spate of bad news since the year began and I think the markets will remain in a state of flux in the near term until we see global bank shares stabilising," said Francois Perrin, portfolio manager for East Capital Asia in Hong Kong.

MSCI's broadest gauge of stock markets fell 0.6 percent in Asia on Friday, hitting a fresh low since June 2013.

It has fallen fell more than 20 percent below its record high last May, confirming global stocks are in a bear market.

On Wall Street, the U.S. benchmark S&P 500 fell 1.23 percent to 1,829.08, its lowest close in almost two years and down 10.5 percent for the year.

Financial counters led the losses globally as disappointing earnings from Societe Generale added to the gloomy mood brought on by poor results from Deutsche Bank last month.

Banks in Europe ended 6.3 percent lower, while the S&P financial index dropped 3 percent.

Stress in the financial sector is stoking worries that funding conditions for some companies may tighten, even as many of the world's central banks pump in funds through unorthodox measures.

A funding crunch could be a death knell for some firms, especially those in the energy sector which have struggled to make ends meet as oil trades at around a quarter of its value just a few years ago.

In a worrying sign that Europe's debt problems could reappear, the Portuguese 10-year bond yield surged above 4 percent for the first time since 2014.

That is a clear departure from last year when investors, hunting for yield, were buying up debt from Portugal and other indebted countries.

In contrast, investors are now flocking to more liquid, and higher-rated bonds.

The 10-year U.S. Treasuries yield fell to as low as 1.530 percent, a low last seen in August 2012, which is just before the Fed started its third round of quantitative easing. It stood at 1.657 percent in early Asian trade.

Federal funds rate futures almost completely priced out the chance of a rate hike.

As the dollar's relative yield advantage erodes further, the strengthening yen touched 110.985 to the dollar on Thursday, rising almost 10 percent from its six-week low on Jan. 29, when the Bank of Japan introduced negative interest rates.

The currency last stood at 112.10 yen, hardly showing any reaction after Japanese Finance Minister Taro Aso stepped up his verbal intervention on Friday, saying he would take appropriate action as needed.

The euro also attracted some safe-haven flows to trade at $1.1304, having hit a near four-month high of $1.1377 on Thursday.

Gold surged to one-year high of $1,262.90 per ounce on Thursday, rising over four percent in its biggest daily percentage gain since September 2013. It last stood at $1,237.5.

U.S. crude futures rose to $27.44 per barrel, up 4.7 percent from late U.S. levels, helped by comments from an OPEC energy minister sparking hopes of a coordinated production cut.

The futures contract on Thursday hit a near 13-year low of $26.05 on Thursday. [O/R]

International benchmark Brent futures rose 4.5 percent to $31.40.

(Additional Reporting by Hideyuki Sano; Editing by Eric Meijer and Kim Coghill)
Title: Stock market panic risks new financial crisis
Post by: RE on February 12, 2016, 12:43:27 PM
http://www.wsws.org/en/articles/2016/02/12/econ-f12.html (http://www.wsws.org/en/articles/2016/02/12/econ-f12.html)

Stock market panic risks new financial crisis
By Andre Damon
12 February 2016

Global stock markets formally entered a bear market Wednesday, as the MSCI All-Country World Index fell by 1.3 percent, with the index down 20 percent from its high last May. Yesterday, after further losses in Asia, European markets closed down, with the German DAX falling by nearly 5 percent, the Spanish IBEX down by nearly 5 percent, and the US DOW off by 250 points.

The selloff accelerated in early trading Friday, with the Japanese Nikkei falling by more than 5 percent at the opening bell.

The stock sell-off both reflected and helped catalyze a broader crisis of confidence in financial markets, amid a rapid deceleration of the global economy, a sell-off in emerging market debt, a downward spiral in commodities prices, and the seeming perplexity of central banks as to how to deal with a renewed outbreak of panic eight years after the 2008 financial crisis.

The global selloff continued in the US after congressional testimony by Federal Reserve chairwoman Janet Yellen, who made no explicit statement that the Federal Reserve would change its plans to continue raising the benchmark federal funds rate over the next year.

Yellen did, however, say that the Federal Reserve would not rule out cutting interest rates below zero if economic conditions continued to deteriorate. If this were to happen, the Fed would follow the Bank of Japan, which late last month announced a surprise interest rate cut, and Sweden, which Thursday cut its benchmark interest rate further into negative territory.

These moves, coupled with a generalized flight to safety, have led to a massive jump in the proportion of bonds with a negative yield. According to figures from JPMorgan, the share of government bonds with a negative yield, once only considered a theoretical possibility, have reached 25 percent. All told, negatively-yielding assets have hit $5.5 trillion worldwide.

The deepening sell-off, and the seeming inability of central banks to formulate any coherent response to the panic, have triggered a general crisis of confidence, not only in the health of the financial system, but in the ability of central banks and governments to offset the crisis through radically expansionary monetary policy: their panacea for every economic ill since 2008.

A Citigroup executive summed up the sentiment in a comment to Reuters: “One of the new themes in markets is that (quantitative easing) has damaged the banks and that therefore it exacerbates the risk-off environment.”

In other words, the panicked sell-off expresses growing fears in financial markets that the vast quantities of cash pumped into the financial system since 2008 have done nothing to improve its underlying health, and may have sown the seeds for a crash on an even greater scale.

This time, however, with central banks having expended so much of their “ammunition” on seeking to keep financial assets afloat for years, there are increasing fears that they will be powerless to respond to a new financial panic.

In particular, the explosive growth in negative-yielding financial assets means that banks, whose core business involves borrowing long-term and lending short-term, will be put under even further financial stress if central banks continue to lower interest rates.

These fears have hammered the banking sector. The S&P 500 financials index has dropped by 18 percent since the start of the year, making banking by far the worst-affected sector, facing an even more rapid selloff rate than that of the beleaguered energy and transport industries.

And that is saying something. The energy and materials sectors have seen share value declines of over 31 percent over the past year, with “companies going Chapter 11 or trading at 50 cents on the dollar,” one portfolio manager told Bloomberg.

Meanwhile the global shipping and transport sector is facing business conditions that, in the words of Nils Andersen, the CEO of Maersk, the largest transportation company in the world, are “worse than in 2008.” The company’s share value, which was down by more than 50 percent in the past year, fell a further 8 percent Wednesday.

Meanwhile the prospects that US economic growth would somehow offset the slump in global output receded further this week, as US corporations posted sharply reduced earnings and outlooks. Earnings for S&P 500 companies fell 4.5 percent in the fourth quarter, and are expected to fall 6.3 percent this quarter. “The general feeling is that the U.S. economy is nearing a peak and there is not much left as far as trends to be talked about,” one hedge fund manager told Reuters.

The fall-off in real economic activity can be expected to further dampen oil prices, which have hit 13-year lows of $27 per barrel, and has triggered a further round of sell-offs in commodity related stocks, with “investors ... liquidating because they need the cash,” as one chief investment officer told Reuters.

Eight years since the 2008 financial crash, it is clear that the capitalist governments and central banks have been unable to address any of its underlying causes. Instead, they have poured cash into financial markets, triggering a feedback loop of speculation and parasitism in the form of mergers and consolidations, which have sharply cut back production and led to mass layoffs.

The end result has been only a further acceleration of the growth of social inequality, with the fantastic enrichment of the parasitic financial oligarchy financed by the wholesale destruction of productive activity and the vast impoverishment of the working class.

In other words, the conditions that gave rise to the 2008 financial crisis have been reproduced once again in even sharper form, and risk a similar outcome.
Title: Global Economic Crisis Imminent - Signs of the 2016 Crash (RT Video)
Post by: RE on February 14, 2016, 10:50:04 PM
From January and things are a lot worse now.

RE

Title: Bert Dohman Capital Research: "It's time to PANIC!"
Post by: RE on February 20, 2016, 04:00:11 PM
You can never Panic too soon.

RE

http://www.financialsense.com/contributors/bert-dohmen/uber-bearish-stock-market (http://www.financialsense.com/contributors/bert-dohmen/uber-bearish-stock-market)

Bert Dohmen Is Uber-Bearish and Here's Why
FS Staff02/11/2016   


Bert Dohmen, founder of Dohmen Capital Research, is uber-bearish and believes that it is time for investors to panic (before everyone else does) given a potential collapse of the stock market greater than what we saw in 2008.

Here's what he had to say on Thursday's podcast:

"Over a year ago we said that we are now in a transition year from a bull market to a bear market and from a growing economy to a recession—and this could be a very deep recession... now we see that we are finally there and more and more people are starting to realize it. But I raise the question here, 'Is it too late to panic?' Because...the advice given by so many analysts is 'Don't panic, don't sell, don't panic.' And I say, 'Yes, panic!' And it's not too late to panic. Panicking at the right time can save you a lot of money...

I predict in this bear market you will see the majority of stocks—majority meaning over 50% of the stocks—selling at $5 or less. Okay, just put that into your portfolio and see if you should be selling some stocks...

We here other analysts say, 'Oh, this is nothing like 2008' and I agree with that, but I say that because I think it's going to be much worse. 2008 was really a crisis triggered by the subprime mortgage market and the confetti that the Wall Street firms distributed around the world. They took those subprime mortgages, put them into pools, they sold participations in these pools, in these CDOs...they got a triple-AAA rating on all this garbage and sold it around the world and then they started defaulting. That caused ripples throughout the financial system and a global financial crisis, okay; but it was basically a mortgage crisis—that's how it started.

Now, look at what we have currently. We have every major economic zone in the world in financial trouble. You have Japan with a debt-to-GDP ratio of 280%. You have China at 300% debt-to-GDP. China has over $34 trillion of debt and the banking system is flooded with bad loans. The best estimate—and this was two years ago I wrote a book called The Coming China Crisis—and I said the best estimate is that they have $11 trillion of bad loans in the banking system. $11 trillion is the annual GDP of China—this is huge!

You have Europe, you have Latin America in trouble, you have Russia in big trouble, you have Saudi Arabia even thinking about doing an IPO on their big oil company in order to make up for the shortfall of oil revenues. You have every major economic zone in the world in big, big trouble including the US and that is why I say this crisis has the potential of becoming much, much worse than the last one."

Given your outlook, how long do you think this will take to unfold?

"Well, from 1929 to the bott