Archive - Mar 23, 2010

At 10:00 AM Tim Geithner will take the podium to pretend he has some clue of how to reform the GSEs (which is funny, because he doesn't). Those who want to watch Geithner live and commercial free can do so here. As we posted yesterday, here is a copy of Tim Geithner's prepared remarks.

In the latest stellar analysis by Dylan Grice, the SocGen analyst discusses the reasons for not only owning gold (and
there really isn't a more profound one than taking a trip to the Marriner Eccles building and checking out what goes on in the first subbasement) but, more importantly to many, selling it. His summary view on owning Au⁷⁹: "The reason I own gold is because I'm worried about the long-term solvency of developed market governments." We all know developed markets are now insolvent and merely exist due to the continued debasement of fiat paper. Period. As to when to sell: "Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability. Until it does, the temptation to inflate will remain, as will economists with spurious mathematical rationalisations as to why such inflation will make everything OK . Until it does, the outlook will remain favorable for gold. But eventually, majority opinion will accept the painful contractionary medicine because it will have to. That will be the time to sell gold." Courtesy of universal denial of our current predicament, we still have a long, long time before acceptance sets in.

Title of today's episode in the never ending soap opera: The Taking Of Stalingrad...er, Santorini - the Propaganda behind the scenes. From Goldman's Erik Nielsen (not his title - you see he would be fired for a joke as off-color as that).

A (comprehensive) recap of news items scarcely seen in the mainstream media and relevant BoomBustBlog research from the past 7 days.

• We couldn't agree more: Op-Ed from Greece: One surefire way for Greece to succeed in borrowing money at a lower
  rate of interest is to prohibit, for a good long time, any statements
  by Greek, as well as by European, officials regarding the Greek
  economic crisis (Kathimerini)
• Euro Declines on Speculation Europe Won’t Agree on Greece Aid (Bloomberg)
• Greek tragicomedy part deux/zwei: In a bizarre twist
  to the Greek debt crisis, France and Germany are pressing Greece to buy
  their gunboats and warplanes, even as they urge it to cut public
  spending and curb its deficit. (Reuters)
  
• U.K. to Expel Israeli Diplomat Over Dubai Passports, Sky Says (Bloomberg)
• Yuan may be less undervalued than it appears (Reuters)... amen
• States are the canary in the fiscal coal mine (RCM)
• Health-Care Cost Lies Make Us Sing the Blues (Bloomberg)

• Penalties for amounts outstanding in tax cases to double in the United Kingdom - (Double oh... oh fuck). [the wall street journal]
• Sir David A. King FRS claims world oil reserves overstated by a third.  (Cut OPEC a break would you? Everything was inflated in the 1980s- even the hair). [the telegraph]
• Franc will get a severe multi currency spanking if it doesn't cool it. (Gekko/Hildebrand: "Dilute the son of a bitch.") [schweizerische nationalbank / wall street journal] 

As we expected yesterday, when we pointed out that the CHF has hit a 10 year high against the euro, the Swiss National Bank confirmed that it was likely one step away from curbing "excessive appreciation" of its currency. SNB president Phillip Hildebrand said that “we can’t fully rule out deflation threats in the case of
renewed external shocks,” Hildebrand, who took over the helm of
the SNB in January, said at an event in St. Gallen, Switzerland,
today. “An excessive appreciation of the franc against the euro
would for example be such a shock.” Well, the appreciation can't really go much higher, as "the franc appreciated for an eighth day today and was 0.2
percent stronger at 1.4323 per euro as of 12:40 p.m. in Zurich.
It reached 1.4309 yesterday, the highest since the euro’s debut
in 1999." In the meantime, those buying straddles on the CHF is multiplying, with the expectation of repeating a little piece of Soros history.

• Asia stocks, copper rise on region's improving economic outlook; Yen falls.
• China may see March trade deficit, bolstering Yuan resistance.
• Dollar climbs versus Euro as concerns over Greece aid spurs safety demand.
• Greek impasse deepens as Trichet rejects loan subsidy.
• Greek crisis may provoke Fed-ECB split as Euro slides.
• Health bill will squeeze industry profits but holds promise for long-term gains.
• U.K. inflation slows to 3%, drops more than Economists forecast.
• Sales of existing US homes probably fell in February for a third month: survey.

RANsquawk 23rd March Morning Briefing - Stocks, Bonds, FX etc.

A snapshot of the 23rd March Morning Briefing covering Stocks, Bonds, FX etc.

In today’s financial world, a real life, real-time economic World Series of Poker is being played out before our very eyes between the Central Banks of the world’s largest economies. As opposed to the annual Las Vegas World Series of Poker tournament, the buy in at the Central Bank World Series of Poker table is exponentially steeper, in the range of trillions of dollars, yen, and Euros that have been used to monetize the world’s debt, and the stakes are default of sovereign debt and the accompanying collapse of that domestic fiat currency.