Archive - Jan 23, 2011
Bruised, but not defeated, the bankers knew that in order to get their plan put into action they needed support from the very TOP of the US Government: the President of the United States. Consequently, they engaged in one of the most sophisticated lobbying efforts in history, backing all THREE candidates (Taft, Wilson, and Roosevelt) in the 1912 election.
Al-Jazeera Releases "The Palestine Papers": Thousands Of Documents Detailing A Decade Of Secret Israeli Palestinian NegotiationsSubmitted by Tyler Durden on 01/23/2011 17:00 -0500
Al-Jazeera has released thousands of previously classified documents which due to their content will likely bring the already sensitive situation in the Middle East to a boil once again. While the document progenitor could well be Wikileaks, the TV network refuses to disclose the source: "Because of the sensitive nature of these documents, Al Jazeera will not reveal the source(s) or detail how they came into our possession. We have taken great care over an extended period of time to assure ourselves of their authenticity." As for what is contained: "The material is voluminous and detailed; it provides an unprecedented look inside the continuing negotiations involving high-level American, Israeli, and Palestinian Authority officials." Apparently, the disclosure is so sensitive that the ISP of the Palestinian authority has just blocked the Aljazeera site containing the early releases. We look forward to reading the documents as they are released between January 23 and 26. Judging by the prompt retaliation they will be worth the read: according to the Palestinian Authority, Al-Jazeera has just declared was on Palestinians, which intuitively makes little sense.
"Bond Recoveries Or Chocolate": Ivory Coast Issues Ultimatum With Cocoa Export Ban, As Chocolate Prices Set To Surge MondaySubmitted by Tyler Durden on 01/23/2011 14:43 -0500
When a week ago we observed the Onionesque reality of life in the Ivory Coast, where deposed president Gbagbo is threatening to wipe out bondholders of $2.3 billion in debt (Corporate Ticker: NUTZ) unless he becomes formally recognized, we made the following bold prediction: "we are sure that Blythe Masters and her team were recently in
Yamoussoukro discussing the most effective way to corner the cocoa
market (paper Cocoa ETF?), thus getting the price of the sweet powder up
by a few trillion percent (in exchange for a nice 25% of all upside
going to Jamie Dimon's firm of course)." Sure enough, when it comes to our track record of macabre predictions we continue to be near 100%. The FT has just reported that Alassane Ouattara, Laurent Gbagbo's opponent in the presidential election (and the man formally acknowledged by the UN as the country's president) has just imposed a one-month export ban of cocoa, ostensibly in an attempt to oust Laurent Gbagbo. In other words, the international community has to choose: bond recoveries or chocolate. That said, we are certain that it is none other than noted commodity market cornering expert JPM that can claim league table advisory credit for what according to the FT will be a 10% jump in the price of cocoa on opening Monday. The immediate retaliation by Gbagbo will most certainly be to force a technical default on the country's bonds which are already in their grace period, and start a localized mini liquidity (and solvency) crisis in Africa... As if the developed world did not have enough of those as is. And in the meantime, we sense a great disturbance in the inflationary Force, as if millions of fatty voices suddenly cried out in terror, and were suddenly silenced: prepare for the next round of food inflation worldwide.
In lieu of a credible macroeconomic data reporting infrastructure in America, increasingly more people are forced to resort to secondary trend indicators, most of which have zero economic "credibility" within the mainstream, yet which provide just as good a perspective of what may be happening behind the scenes in this once great country. A good example was a recent Gallup poll, which contrary to all expectations based on a now completley irrelvant and thoroughly discredited ADP number, which led some br(j)okers such as the Barclays Insane Predictions Team to speculate a 580,000 NFP number was in the books, indicated that the jobless situation barely improved in December. Sure enough, this was promptly confirmed by the January 7 NFP number. And so, in looking for a variety of other "off the grid" economic indicators we read a recent report by Nicholas Colas, which proves to us that we are not the only 'nerdy' entity out there increasingly searching for metrics that have some rooting in reality, and not in the FASB-BLS-Census Bureau joint ventured never-never land. And while we recreate the key points from the report, the one item that should be highlighted is that, as we have suspected for a while, the social undertow of fear, skepticism and anger is coming to a boil, as Google queries of the "Buy A Gun" search querry have just hit an all time high. How much of this is due to the recent events from Tucson, AZ is unclear. What is clear is that the trend is most certainly not your friend (unless you are of course the CEO of Smith and Wesson).
"Print is the sharpest and strongest weapon of our party."--Joseph Stalin
Since the Fed has now purchased $320 billion in Treasurys since QE Lite (more than in all of QE1 combined) and $244 billion since QE 2, and the latest, but certainly not last, round of quantitative easing is more than a third done, it is once again time to provide a summary recap of what the Fed has purchased to date, as well as an advance frontrunning preview of both Monday's immediate POMO as well as of all POMO operations in the near future. Also, since the Fed no longer even cares about the optics of direct monetization as we disclosed first last week when we pointed out that Sack-Frost had monetized half of the Primary Dealer takedown from the just completed 3 year auction, the game is obviously starting to get quite dirty, and the FRBNY boys are fully convinced they can do whatever they want with impunity. Obviously, with all of a subservient puppet Congress bought off, they are absolutely right.
They might just do this.....
It has been a while since we had one of those "before Asia opens" kind of Sundays. Today just may be one. BBC has just reported that the Irish Green party has pulled out of the ruling coalition with Fianna Fail which is "expected to bring forward the general election from 11 March." In other words suddenly the entire Irish "rescue", taken for granted for over a month, will have to be reexamined, once the new ruling party, which will certainly be from the current opposition reevaluates the terms. Elections are now expected to come some time in mid-February. Look for peripheral bond spreads to go whooosh tomorrow.
Numbers may be rigged or "smoothed out", but can't fool the regular Chinese Joe's and smart money. I believe if China stays on its current "prudent course", the real consumer inflation could hit double digit by early next year.