Are The Historic Brown/Kaufman And Sanders Amendments About To Pass, Ending Wall Street's Hegemony?

In a historic development, we may be on the verge of the Senate passing amendments that will bite off the Wall Street hand that has fed the Senate, Congress and all politicians for decades. The Huffington Post reports that "Harry Reid will make sure that an amendment to break up megabanks and cap their size comes up for a vote, the Senate majority leader said. He added that he was leaning heavily toward voting for the amendment, cosponsored by Sens. Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del.). Reid will also support an amendment from Sen. Bernie Sanders (I-Vt.) that will authorize an audit of the Federal Reserve." In an ironic twist, the president may be the last party remaining to protecting Wall Street's interests, as democrats wholesale turn their back on their former masters. Should the critical Brown/Kaufman and Sanders amendments pass it will be game over not only for Goldman Sachs and the Federal Reserve, but to the entire financial oligarchic/kleptocratic status quo that has controlled this country for decades. The next inevitable logical progression is the passage of the McCain amendment which essentially returns Glass-Steagal. Should that happen, look for all fin stocks to trade at about 25% of their current levels.

The New New Normal? Futures Take Out 1,150, Carry Crumbles, Gold On Verge Of $1,200

Was this it for the bear market rally? The new new normal, same as the old normal: Risk and Carry off, Gold on...Meanwhile, the panic over at the Eccles building can be felt all the way in Europe.

Guest Post: ECB Recommends Tight Limits On Greek Cash Transactions

Listening to ECB President Jean-Claude Trichet who said default is not an option for Greece while the single currency attacked the $1.27 figure at the moment when he called it a safe store of value I cut my observations of the ECB council meeting here. Mr. Market seems to have a differing opinion. BTW, interest rates are on hold despite the latest uptick in inflation to 1.4%.

I stumbled upon this ECB legal document that runs to the contrary and strangely has found no media attention.

While promoting the Euro as a safe store of value the ECB opts for tight limits on cash transactions in Greece, limiting the role of cash Euros as a medium of exchange, one of the fundamental functions of a currency.

Stating the objective to limit tax evasion the ECB recommends that all business transactions above €3,000 and all consumer expenses above €1,500 Euros shall be paid for in all other forms than cash. - Toni Straka, The Prudent Investor

John Taylor: "Dead Man Walking...The Euro Is Finished"

Europe is dead. The European nations are the victors, and the way ahead will be one hell of a mess. Without taxing and borrowing power, there is no way to square the inter-euro trade balances between the countries except ‘internal devaluation,’ which means years of deflation and poverty for the voters – and protestors – of the deficit countries. Our pencil pushers and Excel experts have made lots of projections on the Greek situation and can find almost no possibility of success. The EU/IMF team projects Greek debt at 149% of GDP when this rescue ends, but their nominal GDP estimates are incredibly optimistic when salaries and jobs are cut dramatically. We see a 20% decline over the three years as a good outcome, the debt would stay the same, and the ratio goes to 186% of GDP. Almost like Japan, but foreigners own the Greek debt – no way! This rescue reminds us of Bob Rubin’s rescue of Russia in July 1998, which lasted about one month before the whole house of cards collapsed. We knew that one couldn’t work, and this one can’t either. It might take longer, but the euro is finished. Goodbye euro, hello drachma, peseta, lira, and the others. The world had hoped for more, none more than the Europeans themselves, but now we are all left to pick up the pieces. - John Taylor, ultra EURUSD bearish, and thus very rich, CIO of F/X Concepts, world's largest FX hedge fund.

European Corporate CDS Blowing Out Wider, Xover At 505, HiVol At 152 bps, Public Funding Crisis Becoming Private Again

The greatest fear of central banks, that the "isolated" sovereign contagion could spill right back into the private sector, is starting to be realized: now in Europe and soon in the US. Market News reports that high beta European CDS names and indices are all blowing out as fears of a funding/liquidity crisis are becoming prevalent. From MNI: "The CDS market has seen another session of sharp widening in many sectors, taking its cue from falling Eurozone peripheral government bond prices rather than stocks which are more stable today. Greece and other widening government bond spreads continue to drive sentiment, with the CDS market seeing underperformance in places, with high beta cyclicals, TMT and basic materials dragging the market wider." Corporate have so far been relatively spared from the deterioration in sovereign spreads, however if the risk perception in the public arena spills right back to the private sphere, then the entire private-to-public risk transfer episode will have been for nothing. And if corporate funding costs shoot higher, with no sovereigns to back them out (themselves in need of a bailout), well then our thesis that only Mars could possibly bail out the world's bankers will be all too real.

Guest Post: Lock And Load In Gold And Silver – Escaping From Plato’s Cave

We are in the third gold war since the Second World War – the US (and other western countries/institutions, notably the IMF) lost the first one in the late-1960s to the French and the second one in the late-1970s to the Arab nations. In the report, I’ve used declassified documents from the US State Department to show how on those occasions the US authorities believed they could
defy economic gravity right up until the moment when they were overtaken by events, how they falsified economic data to support the dollar and how they negotiated secret deals to stop other governments buying gold. Food for thought I think.