Archive - Dec 4, 2011

Lately, the Egan-Jones credit ratings agency has experienced a lot of bad publicity from the co-opted and conflicted media, especially those in which GE has a minority stake, for no other reason than being the only organization that is in some way a part of the status quo yet dares to constantly lash out at the lies behind the scenes and expose the fraud and corruption that permeates the modern Ponzi system. Frankly, we have had it with this propaganda. Confirming that when it comes to honesty and integrity, EJ may or may not be at the front of the pack, but they sure tried to warn other about the impending systemic collapse. Presented below is an interview conducted by Kate Welling with Sean Egan back on June 30, 2006, or the absolute peak of the credit bubble frenzy, in which everything Egan said: down to the most dire prediction, has occurred. Somehow we are confident people slighted, mocked and ridiculed him then as well. He was right then. He will be right again.

Perhaps it is time to point out the "trade of the day", which for some reason has seen no action yet since the Iran news has broken. Presenting the InTrade "USA and/or Israel to execute an overt Air Strike against Iran before midnight ET 30 Jun 2012" contract, which at last trade yesterday (no trades today yet), was seen trading at $24.3, or at about 24.3% implied probability. Following today's news, we would venture to guess that the upside/downside here is attractive to quite attractive.

That Commerzbank, effectively Germany most insolvent lender (after the bank that shall not be named because if it falls, so goes Europe) and the first international bank scrambling to demand Discount Window cash from the Fed not in 2008 but all the way back in 2007, is broke is no secret. The only question was when will the bank which is a pseudo-TBTF, be nationalized. According to Der Spiegel the time is rapidly approaching. Specifically, "Germany's government is preparing plans for a potential nationalization of Commerzbank AG, in case the Frankfurt-based lender isn't able to raise additionally needed capital, German magazine Der Spiegel reports Sunday, citing government sources. Germany will reactivate its bank bailout fund, SoFFin, to acquire additional shares in Commerzbank if the bank hasn't raised necessary capital by next summer, according to the report. Germany already took around a 25% stake in Commerzbank to keep it afloat during the financial crisis following its acquisition of Dresdner Bank. According to the report, it is assumed that the majority of new shares would fall to the government in the event of a capital increase for Commerzbank. Germany has ruled out taking over Commerzbank's Eurohypo public finance unit, which it is required to sell to fulfill a European Union restructuring mandate tied to its use of state aid, according to the report." And so the world's most undercapitalized banks as so often demonstrated by Zero Hedge continue dropping like domino. Below we recreate the most recent list of Tier 1 casualties (seen most recently when exposing Credit Agricole as one of Europe's most dire casualties of a USD funding shortage), or banks that have the lowest capitalization, and thus highest leverage ratios in the world. If we were betting people, we would say that Deutsche Bank (and Postbank), Credit Suisses and BNP may well be next...

We're being set up!

Washington D.C. is filled with souless hacks.  Such men and women reduce themselves to be nothing more than instruments of others. 

Here we go:

IRAN MILITARY DOWNS U.S. DRONE IN EASTERN PROVINCE -TV

IRAN SAYS ITS RESPONSE TO U.S. DRONE VIOLATION OF ITS AIRSPACE WILL BE CARRIED OUT OUTSIDE IRAN'S BORDERS- FARS AGENCY

Now, Gold is getting interesting...

In the following video Chris Martenson - economic analyst at chrismartenson.com and regular guest contributor to Zero Hedge, and James Turk, Director of the GoldMoney Foundation talk about the problems facing the eurozone as well as the global economy. Chris Martenson points out that the whole world simply has too much debt. This is why he believes that there won’t be a real solution to the euro crisis. The big question will rather be who will take losses on the debt, which can’t possibly be repaid. The lack of political leadership and unwillingness to accept reality is contributing to this crisis. Additionally, the monetary tools central banks have traditionally used to revive economies are starting to show less and less effect. In Martenson’s view, the financial sector has become way too large and interlinked across borders, so that a default by one country could bring down the whole financial systems, because credit default swaps would get triggered and could bring down the writers of those derivatives.