Archive - Mar 8, 2012

What a difference 24 hours makes, or 48 for that matter. After an almost 2% decline on Tuesday on virtually no news, the market looks set to get all that back and more - all since about 10:30 yesterday - also on no real news. PSI results continue to come in. It looks like it will beat 75%. It seems that all banks and most regulated entities are voting in favor of PSI - as expected. It looks like Greece and the EU will discuss the results tomorrow. I expect CAC's to get done on Monday. It would be surprising, and controversial, if the don't use the CAC's and pay some holdouts at par. After Greece walks away from over $140 billion of debt, it will be hard for other countries to resist that temptation. Now that politicians realize they can make the banks do whatever they want, they will be tested to use that power.

"We are a hair's breadth or, more exactly, one recession away from a market panic on outright deflation -- a panic that will send the central banks into a printing frenzy that will make their balance sheet expansion so far seem like a warm-up act for the main show." Albert Edwards

All you need to read.

The European Central Bank's recent LTRO programs have effected a significant increase in the amount of encumbered assets -- those pledged as collateral in repo transactions, central bank funding operations, and covered bond issuance as lenders increasingly demand over-collateralized borrowing arrangements to protect against credit risk -- on balance sheets across the pan-European banking system.

The rally for what could be World War III is in full swing. The truth amounts to very little on the eve of war.  Iraq and the lies surrounding weapons of mass destruction proved this lesson almost a decade ago.  Unfortunately for the people of America, Israel, and Iran, the political class and power wielders of their respective governments refuse to learn.  Their desire is for more authority and prestige; no matter how many bodies it costs. With the administration now seeking to provide assistance to the opposition forces in Syria, intervention and war with Iran is only an eventuality at this point.

Does the ECB stop printing? No, because it can't.

Could housing prices be stabilizing?