Archive - Jul 10, 2010
The Financial Con Of The Decade Explained So Simply Even A Congressman Will Get It
Submitted by Tyler Durden on 07/10/2010 21:13 -0500Sometimes, when chasing the bouncing ball of fraud and corruption on a daily basis, it is easy to lose sight of the forest for the millions of trees (all of which have a 150% LTV fourth-lien on them, underwritten by Goldman Sachs, which is short the shrubbery tranche). Luckily, Charles Hugh Smith, of oftwominds.com has taken the time to put it all into such simple and compelling terms, even corrupt North Carolina congressmen will not have the chance to plead stupidity after reading this.
Will Public Austerity Cause Private Sector Paralysis?
Submitted by Tyler Durden on 07/10/2010 20:58 -0500As the whole world prepares for years of austerity, now that virtually everyone is aware that sovereign debt levels are unsustainable and the drive to push public sector deficits down has reached a crescendo, one question remains open: what will happen to the private sector deleveraging commenced the world over in the aftermath of the Lehman bankruptcy. Goldman's Jan Hatzius takes a look at this question, and reaches some very unpleasant conclusions. Looking at the closed system of the financial balances of the private sector, the public sector and the rest of the world (i.e., private balance + public balance = current account balance), in which the push for deleveraging in the private sector, the rush to ramp up exports, and the imminent Age of Austerity all signal an upcoming unprecedented "demand shortfall for the economy as a whole", Hatzius concludes gloomily that "given the forces of retrenchment and balance sheet repair, the risks to the growth of aggregate demand?as well as risk-free interest rates?over the medium term are tilted to the downside. Policymakers can provide some relief, but realistically will find it hard to neutralize the headwinds altogether" The economist also looks at what realist fiscal and monetary rabbits are left in the hat of the administration/Fed, and realizes that there is little that can be done to prevent what he dubs a "slowdown" and what everyone else whose bonus isn't tied in with perpetual growth assumptions, a new wave of the Second Great Depression.
A Key Piece in the Oil Leak Story: Two Sections of Drill Pipe Lodged in the Blowout Preventer
Submitted by George Washington on 07/10/2010 16:43 -0500A little-known fact which is key to the entire oil spill story ...
Government Trying to Sweep Size of Oil Spill Under the Rug, Just As It Has Tried to Sweep the Economic Crisis, 9/11 and All Other Crises Under the Rug
Submitted by George Washington on 07/10/2010 16:21 -0500Cover it up boys, so no one knows how badly we scr*w!d up...
Head Of Largest Private Portuguese Bank Forced To Deny Bankruptcy Rumors
Submitted by Tyler Durden on 07/10/2010 16:02 -0500Another day, another executive forced to refute rumors of his organization's imminent bankruptcy, fueling further speculation that observations of fire may soon follow those of smoke. The head of Portugese Banco Comercial Portugues, the largest private bank in Portugal, Carlos Santos Ferreira, sent an email to his employees saying that text messages by "unscrupulous authors" "claiming the bank is on the verge of bankruptcy, are merely attempting to "undermine the confidence" of the bank and are groundless, and have been reported to the Portguese version of the SEC. Amusingly, Ferreira noted that ordinarily he does not comment on "rumors and hearsay, because this will give them credibility." As Portguese banks have been shut out of the interbank funding market for months, and rely exclusively on the ECB, we can see why the CEO of the BCP may be a little concerned about people being abnormally truthy these days.
No Garden-Variety Public Pension Crisis?
Submitted by Leo Kolivakis on 07/10/2010 13:04 -0500"The short story is that a 2019 go-broke date for New Jersey pensions seems very reasonable."
Guest Post: Is The Fed Funding The Treasury Through The Banks?
Submitted by Tyler Durden on 07/10/2010 11:44 -0500Recent data from the Fed's balance sheet indicates that even with the Fed no longer printing money directly since March, a dramatic reduction in bank Excess Reserves to the tune of $200 billion over the past 2 months has provided the same net benefit in liquifying the markets. And since none of this money is making its way to end consumers and small business borrowers, it is more than realistic to speculate that banks are merely using the formerly "excess" cash to purchase treasuries, thereby continuing the Treasury purchasing infinite Ponzi loop.
Weekly Chartology
Submitted by Tyler Durden on 07/10/2010 10:54 -0500All the charts that's fit to print, with Goldman's traditional upward bias. David Kostin looks forward: "next week 23 companies in the S&P 500 will report 2Q earnings, led by Alcoa, CSX, and Novellus on Monday and followed by bellwethers INTC, MAR, JPM, GOOG, BAC, C, and GE (see calendar page 3). Earnings revisions and sector performance have disconnected with positive revisions associated with more negative returns since the market peak. S&P 500 rallied 5% in the past few days off the YTD low."
A 3 minute historic overview of Google: The Most Powerful Company in the World?
Submitted by Reggie Middleton on 07/10/2010 10:52 -0500A 3 minute historic overview of Google: The Most Powerful Company in the World?
Tesla: Sell the Sizzle, Then Buy the Steak
Submitted by madhedgefundtrader on 07/10/2010 07:41 -0500The market valued Tesla Motors at an impressive $3.3 billion, with virtually the entire auto industry and its pet analysts pissing all over the deal from the greatest height possible. Applies IPO comes to mind. What happens when Obama’s massive electric car subsidies disappear? Oh, and Elon, don’t tell a divorce court that you’re broke a week before the market values your holdings in TSLA at $2 billion. Will Tesla will be joining the Tucker, the DeLorean, and the Pontiac in the dustbin of history.(TSLA)






