On 17 September The Wall Street Journal published a fascinating article on “peak oil,” “There Will Be Oil,” written by Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, an energy research and consulting firm and deserved recipient of Pulitzer Prize for his 1991 book, The Prize: The Epic Quest for Oil, Money and Power. According to The Wall Street Journal, “There Will Be Oil” “is adapted from his new book, The Quest: Energy, Security and the Remaking of the Modern World.” The essay will doubtless have widespread influence amongst prosperous The Wall Street Journal readers, but in his glib dismissal of “peak oil” theory advocates, Yergin glosses or ignores a number of issues fundamental to the larger picture, for whatever reason, and these oversights should be considered in any evaluation of the piece and the peak oil “specter.”
Just so the Italian banks don't feel isolated and get more than their fair share of intraday limit down closes, here comes S&P, via Bloomberg:
- S&P Cuts Ratings on 15 Italian Banks After Italy Downgrade
- S&P cuts Intesa Sanpaolo ratings to A from A+; outlook negative
- S&P cuts Mediobanca ratings to A from A+; outlook negative
- UniCredit Spa Rating Outlook to Negative by S&P
- Findomestic Banca Cut to A From A+ by S&P
Judging by the market response, forget QE3: QE 3000 must be coming.
Well it seems the impending maturities of GGBs has forced the Greek's hands as they drag austerity measures into the here and now - and in dramatic manner.
*GREEK PENSION CUT FOR THOSE EARNING MORE THAN EU1,200 A MONTH
*GREECE TO REDUCE TAX-FREE THRESHOLD TO EU5,000 FROM EU8,000
*GREECE TO REDUCE PENSIONS BY 40% FOR THOSE UNDER 55
*GREECE TO CUT WAGES OF 30,000 STATE WORKERS THIS YEAR
*GREECE TO CUT PENSIONS OVER EU1,200 BY 20%: STATEMENT
UPDATE: Full Statement Attached
There goes Citi...
Buffett tells Obama how to tax the country and all he gets is this lousy shirt that says "I got double penetrated by Moody's on Central Planning day"
Time for another bath. This time metaphorical. And based on Moody's downgrade methodology, a Citi downgrade is imminent. "The downgrades result from a decrease in the probability that the US government would support the bank, if needed. Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions. However, it is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute. Moody's is therefore lowering the amount of support it incorporates into Bank of America's ratings to levels reflected prior to the crisis."
This week alone, longer-dated Treasury yields have dropped 15bps, as 30Y Treasury yields reach 2011 lows and all the way back to January 2009 levels. One can only hope that Bernanke doesn't disappoint...
With Just 2 Hours Left Until "The Announcement", Here Is A Complete Summary Of What Everyone On Wall Street ExpectsSubmitted by Tyler Durden on 09/21/2011 - 11:10
With just over 2 hours left until 2:15 pm, the time to place your bets (and if one trades with other people's money, bet big: after all we are sure to see a surge in "Rogue Traders" into this Fed announcement as many blow up once the embargo is lifted), is rapidly approaching. To help our readers out, here is a complete summary of what all the key Wall Street analysts believe will happen today. Handicap as you will.
A turbulent session in Europe ended on an ugly note as broad equity markets closed near their lows, credit spreads near their wides, and financials gave up all their rumor-driven gains. EURUSD, however, managed a spikey end to the day, popping its head back above 1.37 after trending generally weaker all day.
When all else fails, scapegoat, which in corporate America means fire your CEO. According to a headline from Bloomberg right now, HPQ (and soon many other companies) will follow Yahoo in dumping its CEO, Leo Apotheker. The result: a surge in the stock. Our question: will Leo draft his "WTF" letter from an iPad as well? Expect the Netflix board to "spin off" its CEO next.
I remain confused why the Private Sector Initiative isn't finished yet? Are [banks] worried their accountants or the markets would see through the ploy of a "par" bond exchange and not give them any benefit from that trick? Are the governments finally getting concerned that the EFSF should not pay banks par for 40% of their Greek holdings? The IIF proposal must have been structured by Robin Hood's evil twin - the one that steals from the poor and gives to the rich. The swap, that switches Greek exposure from banks to the EFSF ensures the banks lose less, but the people of Europe lose more directly. Nothing has been solved in Greece. Until Greece is fixed or defaults, the markets will remain manic/depressive. This proposal would shift some risk out of the banking system, which is good. But it puts it directly on the EFSF guarantors.
GATA's Chris Powell speaks: "The speaker following me, George Clooney, will be able to tell you what it's like to be handsome, talented, rich, and famous. I could tell you what it's like not to be. But instead the conference has asked me to talk about gold, which at least might make you rich, or help you preserve some of whatever you've got. This opportunity is full of risk, because the gold market long has been manipulated by Western central banks to restrain the gold price. The Western central banks are slowly losing control of the market but they are not giving up easily. Why do Western central banks manipulate the gold market? The gold market is manipulated because, despite Federal Reserve Chairman Ben Bernanke's insistence to Congress a few weeks ago that gold is not money, just "tradition," gold is indeed a currency that competes brutally with government-issued currencies and helps determine not only the value of those currencies but also interest rates and the value of government bonds...."
90 minutes after rumors of forced mergers and recaps and an easing of collateral requirements by the ECB, SocGen (among other French banks) has retraced more than 75% of the gains and senior financial credit spreads have weakened to their widest levels intraday. It certainly feels like any strength is being used to reduce exposure further - even as we wait for Bernanke's Bonanza this afternoon...
UPDATE: SocGen now trades lower than pre-rumor levels!!