Archive - Feb 19, 2011
Is Bernanke To Blame For The Rising Global Revolutionary Wave?
Submitted by Tyler Durden on 02/19/2011 21:04 -0500A topic which we anticipated last summer, and which has come to shocking and rapid fruition ever since the beginning of the year with the self-immolation of a Tunisian protester, resulting in a tsunami of violent revolutionary uprisings across the developing world, has been the question of whether and to what degree Bernanke's monetary policies are responsible for what is becoming an indirect wave of suppressionary genocide (today alone, between Libya, Yemen and Bahrain over 500 people have been killed). And while Zero Hedge is far less ambivalent about the underlying cause of the surge in anger (in most of the affected countries, the bulk of their population has to spend well over half of its income on food and energy), and when people who already have nothing, see whatever little they have left taken away as well, they see no downside in violent revolution, there are some more moderate views. Below we present one, courtesy of reader Chindit13.
Meet The Objects Tunisia's Ben Ali Did Not Have Time To Steal
Submitted by Tyler Durden on 02/19/2011 20:50 -0500
Even as Ben Ali was fleeing his country, his presidential palace continued to be a hoard of all the items he had "borrowed" over the decades. As Al Arabiya reports, "Tunisia's ousted president stashed diamonds, gold and wads of cash in secret spots around his palace in the impoverished country's capital, according to video shown by state television on Saturday." The clip below shows the objects Ali was in too much of a hurry to pick up. Among these: wall safes full of cotton fiat, necklaces and other trinkets. Alas: not a single bar of silver or gold anywhere. It seems the dictator may have lacked in PR skills, but he sure knew what to pick when fleeing the country.
Sure It’s Legal… But Is It RIGHT?
Submitted by Phoenix Capital Research on 02/19/2011 19:11 -0500Ever since the Financial system started imploding in July 2007, I’ve heard countless folks talk about liquidity, bull markets, bear markets, the dollar, bailouts, etc. But there’s one thing I’ve heard virtually NO ONE talk about. That is:MORALITY or ETHICS.
Is Gold Crash Proof This Time Around?
Submitted by Phoenix Capital Research on 02/19/2011 19:05 -0500The first thing that needs to be said is that IF we have another systemic meltdown like that of Autumn 2008, Gold will likely go down along with everything else. There are simply too many big players (hedge funds, investment banks, etc) with heavy exposure to Gold who would be forced to liquidate their positions during a systemic collapse.
Bernanke's REAL Legacy: Helping Goldman Sachs Fleece Us All
Submitted by Phoenix Capital Research on 02/19/2011 17:48 -0500I’ve watched with first amusement, then disgust, and ultimately outrage as various pundits proclaimed Bernanke’s efforts “saved the financial system” or helped the US “weather the storm.” Bernanke did NO such thing. You could train a chimpanzee to hit the “print money” button at the Fed every-time the Fed phone rings with a Wall Street number and get the same results.
Video Of Boy Shot By Sniper As Libyan Violence Hits Critical Level
Submitted by Tyler Durden on 02/19/2011 16:21 -0500
We were concerned that the video posted earlier of the slaughter of unarmed protesters in Bahrain would be too graphic. Alas, not even a few short hours later, we have received another video, this one far worse, of a Libyan boy shot in broad daylight by a sniper. Those who want to see the dire consequences of what the overflow of global discontent looks like, in no small part driven by Federal Reserve monetary policies which as the World Bank indicated have just made another 44 million people fall in the "extreme poverty" level, can do so here. It really is time to start keeping track of all the victims of Bernanke's monetary policies. At the rate things are going, within a few years Bernie Bernanke will have to defend himself (and his policies) before a tribunal.
Guest Post: Rising Food Prices Push Up Inflation Significantly
Submitted by Tyler Durden on 02/19/2011 16:08 -0500A recently released report by the World Bank’s Food Price Watch confirms that rising agricultural products are sharply pushing up global food prices in lower-income nations (see “World food price uncertainty presents social risks,” in AsiaNews, 4 February 2011), especially among the poorest (where the poverty line is defined as US$ 1.25 per person per day). The WB’s global food price (GFP) index increased by 15 per cent between October 2010 and January 2011, 29 per cent above its level a year earlier. The global prices of wheat, maize, sugar and edible oils especially saw sharp increases. According to the WB estimates, an additional 44 million people fell into poverty. For some Asian nations, the price of wheat rose considerably: Kyrgyzstan (54 per cent), Bangladesh (45 per cent), Tajikistan (37 per cent), Mongolia (33 per cent), Sri Lanka (31 per cent), Azerbaijan (24 per cent), Afghanistan (19 per cent), Sudan (16 per cent), and Pakistan (16 per cent).
Don't Let Wisconsin Divide Us ... Conservatives and Liberals AGREE About the Important Things
Submitted by George Washington on 02/19/2011 15:58 -0500Don't fall for the old divide-and-conquer trick ...
JuSTiCe iS NoT FoR aLL
Submitted by williambanzai7 on 02/19/2011 15:47 -0500Anyone read today's Moz news?
Tired (And Broke) From All The "QE Is Just An Asset Swap" Rhetoric? Then Read This
Submitted by Tyler Durden on 02/19/2011 15:34 -0500
If you, like us, are tired of all the textbook pundits claiming over and over again that QE is nothing but an asset swap (odd how asset swaps get food prices to hit all time highs, not to mention M2, and to reverse what has formerly been a trillion dollar annualized drop in shadow banking - must be that latest outbreak of disinflation...), we urge you to read the following essay from Sean Corrigan. The Diapason Securities strategist as usual manages to cut through the academic drivel and hit at the core of the issue. The conclusion: "money does not have to be borrowed into existence, it can be
spent into existence by the state for so long as that money's recipients
show a willingness to accept it as a medium of exchange - and that is
exactly what we have at work here...the government spends money it does not have into existence and
disburses it through its welfare/patronage network; the associated debt
is then taken up by a monetary institution (not least, the Fed itself,
whether by its earlier process of debt substitution on private sector
balance sheets when it was buying MBS, or in its current, direct uptake
of Treasuries at the NYFRB) and the non-bank sector ends up with increased holdings of new MONEY as a result... The Fed has successfully placed a great deal of new
money in the hands of those same banks' customers and this is patently
exerting its expected influence on the prices of a whole range of
non-money goods and assets, in a typically differentiated,
Cantillon-effect fashion. How anyone can deny this is truly a mystery!" Indeed.
Graphic Video Of Army Shooting At Peaceful Bahrain Protestors
Submitted by Tyler Durden on 02/19/2011 14:27 -0500
As more videos such as this make the mainstream, we are concerned that not only are the days of the current Bahrain regime numbered (which also implies the future of the US Navy's 5th fleet is uncertain), but that Saudi Arabia, which has supposedly volunteered to get involved in restoring "peace" to its small neighbor, is getting ever more nervous. We continue to be amazed at how effectively the Bernanke Put is working to mask the true level of geopolitical instability. If and when the crowd realizes that Bernanke, who has proven his efficiency at printing dollar signs on pieces of cotton, may be slightly less adept at doing the same with barrels of oil, the outcome will be amusing.
World Bank's Zoellick Calls For Overhaul Of Monetary System, Says Yuan Should Get Prominent Role
Submitted by Tyler Durden on 02/19/2011 13:54 -0500World Bank's Robert Zoellick, who has recently been on a truth-telling roll, suggesting a return to the gold standard, and also highlighting that surging food prices have suddenly pushed 44 million to extreme hunger around the world raising the likelihood for many more revolutions, penned an oped in yesterday's FT, sharing his vision for a "monetary regime for a multipolar world" in which, not surprisingly he warned that the current monetary system is perilous, and that China's Yuan should be added to the SDR, as well as other currencies "over time." This is yet another dig at the dollar's status as a reserve currency, yet without China taking proactive steps to indicate its interest at becoming the new de facto world currency, the status quo may be stuck with the greenback. Essentially, China is waiting until the right moment emerges, a time when it has stockpiled enough resources, when it can, unilaterally, or in collaboration with Russia and potentially a post-EUR Europe, make an announcement that the Yuan is the new reserve currency, backed by a basket of commodities. This is precisely the step-change that Zoellick is trying to avoid: "A framework to manage a monetary system in transition may be less headline-grabbing than sudden regime change, but it is a lot more realistic. Modernising the management of international monetary affairs could prove an important contribution to future growth. The time of powerful kings is long gone. But today’s leaders still have the chance to stamp their mark on the monetary framework of tomorrow." Unfortunately, the possibility of a gradual transition in which the US willingly cedes ever increasingly more of its reserve status is unthinkable: after all the bulk of the Fed's disastrous policy is dictated that no matter what the Chair does, the world has no choice but to continue using dollars. Which will work until it doesn't (and with total US debt at almost 100% of GDP, the "doesn't" part is approaching.
Q4 Hedge Fund Hotel Update: Apple Is Now Held By A Record 195 Hedge Funds
Submitted by Tyler Durden on 02/19/2011 13:19 -0500The one company that will, without a shadow of a doubt, blow up the entire market should it finally reverse its trend of near exponential growth in recent months, and which has recently started indicating some (very) modest pricing weakness, is now held by more hedge funds than ever before. According to the just released Hedge Fund tracker from Goldman Sachs, Apple is now owned by 195 hedge funds, compared to 190 in Q3 as previously reported, and 181 before that. The world's biggest hedge fund hotel is filled to the brim. These fast money, marginal price determining buyers (and, yes, sellers) now hold 4% of the $332 billion equity cap. And with a solid 12% YTD return in the name, not to mention a negligible 1% short interest of market cap, the time to move on to greener pastures may be approaching. For now, all funds are docile and very well behaved participants in the game theory "don't sell" prisoner's dilemma. Yet with every dollar upside we are getting closer the first imminent defection. And a stock which can crash 10% on the merest hint of the passage of its founder, a stock which in turn accounts for 20% of the Nasdaq, and thus is a driver the ES and the global stock market, means that the continued meltup of the global stock market continues to rest on the shoulders of a sick man. That our regulators allow this is criminal and beyond reproach. But that's ok: it's all because of their prohibitively low budget. After all, how many bangbus subscriptions can $1 billion annual budget really buy?
Banks Responsible For Sudden European Liquidity Crunch Identified
Submitted by Tyler Durden on 02/19/2011 12:31 -0500There goes another "fat finger" red herring. On Thursday and Friday, when we noted that borrowing under the ECB's Marginal Lending Facility has spiked from roughly €1 billion to €16 billion for two days in a row, we mocked the MSM explanation that this was merely the result of a fat finger, or at worst a faulty recalendarization of a term-MRO borrowing activity for an overnight one (at the exponentially higher rate of 1.75%). As expected, and as we predicted, this was indeed a case of bank gone wrong. Or two. The FT reports that "Anglo Irish Bank and the Irish Nationwide Building Society, Ireland’s two most troubled lenders, were behind a spike in overnight borrowings this week from the European Central Bank, according to people familiar with the transactions." And while we now know who the guilty parties are, the explanation once again leave much to be desired. It is no surprise that all European banks are exclusively reliant on the ECB for funding, which as previously indicated confirms that the Euribor market is a relic of the past since nobody approaches other banks for capital - everyone goes straight to uncle Jean Claude... And in doing so pledges any and all collateral, even if it means running an outright ponzi scheme. "Both banks have become heavily reliant on the ECB’s liquidity funding over the past 2 years, as they have been unable to roll over maturing bond debt and have seen an outflow of deposits." Yet instead of acknowledging that this action is merely a liquidity crunch, the FT's explanation is that the surge in borrowing has to do with the ability to unwind collateral on a moment's notice as a function of the banks' restructuring, instead of having it locked up for a week under the MRO. We are not sure if this "explanation" is just as, or more, laughable than the fat finger one.
When Is The Market Going To Reverse?
Submitted by RobotTrader on 02/19/2011 12:06 -0500Another week, another POMO-induced meltup. Bill Fleckenstein must be having nightmares, as the insane non-stop bottlerocket moves in many big name stocks is being repeated again. My condolences to the "pro traders" and "technical experts" like Tom O'Brien, David White, and Larry Pesavento over at TFNN.com who have been bearish on the market for the last 6 months. Meanwhile, the Monster Energy swilling 19-year old motion chasers without MBA's or any sort of CMT credentials are killing it. How far is this thing going to go?






