Archive - Jul 21, 2012
Failing to Break Up the Big Banks is Destroying America
Submitted by George Washington on 07/21/2012 23:15 -0500- 8.5%
- Alan Greenspan
- Bank of America
- Bank of America
- Bank of England
- Bank of International Settlements
- Bank of New York
- Ben Bernanke
- Ben Bernanke
- BIS
- CDS
- Central Banks
- Corruption
- Credit Default Swaps
- credit union
- Dean Baker
- default
- Fail
- Federal Reserve
- Federal Reserve Bank
- Federal Reserve Bank of New York
- Fisher
- Gambling
- Global Economy
- goldman sachs
- Goldman Sachs
- Great Depression
- Insider Trading
- Institutional Risk Analytics
- International Monetary Fund
- Israel
- Joseph Stiglitz
- Krugman
- Lehman
- LIBOR
- Main Street
- Marc Faber
- Market Share
- Matt Taibbi
- Mervyn King
- Milton Friedman
- Moral Hazard
- Morgan Stanley
- New York Fed
- New York Times
- Niall Ferguson
- Nomura
- None
- Nouriel
- Nouriel Roubini
- Obama Administration
- Paul Krugman
- Paul Volcker
- program trading
- Program Trading
- Prudential
- recovery
- Regional Banks
- Reuters
- Richard Alford
- Richard Fisher
- Risk Management
- Robert Reich
- Sheila Bair
- Simon Johnson
- Sovereign Debt
- Sovereigns
- Subprime Mortgages
- TARP
- Timothy Geithner
- Too Big To Fail
- Washington D.C.
- White House
Too Big Leads To Destruction of the Rule of Law
Adam Smith On Conceit, Central Planning, And Disorderly Society
Submitted by Tyler Durden on 07/21/2012 20:00 -0500
Perhaps it is worth a reminder that, while every effort by the Central-Banker-In-Chief and his political play-things to proclaim free-market omnipotence in stark contrast to the wholesale manipulation of any and every market and macro-economic lever possible, Adam Smith some 250 years ago pointed out the inevitable unintended consequences of such grand conceit. As the [central planner] seems to "imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board", the end result is that "society must be at all times in the highest degree of disorder."
Forget Corn, Is Soy Poised For Lift-Off?
Submitted by Tyler Durden on 07/21/2012 18:54 -0500
By now everyone is aware of the silver-like surge in corn prices over the past month, driven by the recognition that what is quickly becoming the most severe drought in US history is here to stay indefinitely longer as elusive rainfall remains just that. As can been seen on the chart below, corn prices have risen by 54% since mid-June. What may come as a surprise is that another critical commodity - Soybeans - has only risen by half as much, or just 28% in the past month. Why "only"? Because as the following two charts from Morgan Stanley show, the fundamental picture for soybeans may be just as bad if not worse as corn, which would mean there is far more price upside in soy in the coming days, especially if strategies based on prayer, for either central bank intervention or rain, remain unasnwered.
Economic Countdown To The Olympics 4: Would The Euro Be A Winning Team?
Submitted by Tyler Durden on 07/21/2012 18:06 -0500
With just a few days left until the pre-opening soccer games begin in the UK, we continue our five part series (Part 1, Part 2, Part 3) on the intersection between markets and the Olympics by considering whether an integrated Europe would have performed relatively better - i.e. would 2+2>4 - and what are the factors. Goldman's analysis of the pros and cons of 'integrating' their Olympic teams is extremely apropos the current deteriorating (yet desperately dreaming of improving) coordination of these 17 disparate nations. The answer, of course, is that there are some benefits from this medal 'integration' in specific cases but since German reunification, their medal performance has deteriorated - even in the team events where aggregating talent pools should have its greatest gains. In a 'zero-sum' context such as competing for Olympic medals, Germany's gains must come at the expense of other countries - and rather notably there are few French medal winners before or after an 'integration. Sounds familiar?
'Black Friday' Blame-Game Escalates As Spain Is Out Of Money In 40 Days
Submitted by Tyler Durden on 07/21/2012 16:06 -0500
With Valencia bust, Spanish bonds at all-time record spreads to bunds, and yields at euro-era record highs, Spain's access to public markets for more debt is as good as closed. What is most concerning however, as FAZ reports, is that "the money will last [only] until September", and "Spain has no 'Plan B". Yesterday's market meltdown - especially at the front-end of the Spanish curve - is now being dubbed 'Black Friday' and the desperation is clear among the Spanish elite. Jose Manuel Garcia-Margallo (JMGM) attacked the ECB for their inaction in the SMP (bond-buying program) as they do "nothing to stop the fire of the [Spanish] government debt" and when asked how he saw the future of the European Union, he replied that it could "not go on much longer." The riots protest rallies continue to gather pace as Black Friday saw the gravely concerned union-leaders (facing worrying austerity) calling for a second general strike (yeah - that will help) as they warn of a 'hot autumn'. It appears Spain has skipped 'worse' and gone from bad to worst as they work "to ensure that financial liabilities do not poison the national debt" - a little late we hesitate to point out.
The Economic Collapse For Dummies
Submitted by Tyler Durden on 07/21/2012 14:49 -0500
If last week's 74-page all-encompassing thesis on "how 'everything' is interconnected and headed for 'complete systemic disintegration'" is a little too much, here is a 10 minute clip that ties together all the loose ends of the reality bubbling just beneath the veneer of hope that so many call our markets. A spectacular gathering of all things bearish that provides everything you wanted to know about the inevitability of a major economic collapse but were afraid to ask: a little too doom and gloomish perhaps, but sadly that does not make it improbable, especially in the current environment where the central planners keep doing the same over and over, hoping that just once "this time will be different." From demographic trends, over-leveraging, corporate profit extremes, deflationary impacts, and hyperinflationary reflexivity- there's a little here for everyone on a warm Saturday afternoon.
Guest Post: Mystery Solved - The Fed Indicts And Absolves Itself
Submitted by Tyler Durden on 07/21/2012 13:40 -0500There is no mystery to the “headwinds” that continue to plague and mystify monetary policymakers. The global economy is not pulled into re-recession by some unseen magical force, conspiring against the good-natured efforts of central bankers. Instead, the very thing central banks aspire to is the exact poison that alludes their attention. Conventional economics will continue to believe and empirically “prove” that the theory of the neutrality of money is valid, giving them, in their minds, unrestricted ability to intervene and manipulate over any short-term period (though it is getting harder to argue that these emergency measures are “short-term” nearly five years into their continued existence). The occurrence of panic in 2008 and the unresolved and unremoved barriers to recovery in the years since, however, fully attest to nonneutrality, an ongoing form of empirical proof that their models will never be able to refute. And we are all condemned by it.
He Who Deleverages Best: Presenting The 'Credit Intensity' Of Europe's GDP Growth
Submitted by Tyler Durden on 07/21/2012 13:06 -0500
To evaluate the impact of private sector deleveraging on economic growth/GDP in the context of a rapidly releveraging sovereign, we present the following analysis from Citi which observes various European countries and analyzes the "credit intensity" of GDP growth, or in other words which country has preserved, or even grown its GDP even as its private sector has seen substantial deleveraging. The results are interesting and may present a framework for evaluation the winners and losers in Europe in the era of "great sovereign leveraging", permitting a reverse engineering of the success stories, and applying their lessons to the losers.
Presenting The 10 Most Spectacular Financial Speculations Of The Past 300 Years
Submitted by Tyler Durden on 07/21/2012 10:13 -0500
Sometimes it seems like the investment community operates on the assumption that the world started in 1929 – or at least that the financial booms, busts and speculators preceding the 1920s are irrelevant to the modern investor. We think this is misguided. Just consider that this common worldview ignores an age where speculators lived in sprawling mansions on Fifth Avenue (as opposed to apartments in the same place measuring about 1/100th the size)! We imagine that there’s a lot to learn from looking at the past 300 years as opposed to the past 80. With this in mind; here we present what we believe to be the best trades of all time...
Guest Post: Why Is The Fed Not Printing Like Crazy?
Submitted by Tyler Durden on 07/21/2012 10:10 -0500I am fairly certain the answer to why Bernanke isn’t increasing inflation when his former self and former colleagues say he should be is actually nothing to do with domestic politics, and everything to do with international politics. Most of the pro-Fed blogosphere seems to live in denial of the fact that America is massively in debt to external creditors — all of whom are frustrated at getting near-zero yields (they can’t just flip bonds to the Fed balance sheet like the hedge funds) — and their views matter, very simply because the reality of China and other creditors ceasing to buy debt would be untenable. Why else would the Treasury have thrown a carrot by upgrading the Chinese government to primary dealer status (the first such deal in history), cutting Wall Street’s bond flippers out of the deal?
The Abysmal Earnings Season Explained In Two Charts
Submitted by Tyler Durden on 07/21/2012 09:55 -0500The following two charts show just why any hopes that corporate earnings can mask the US economic deterioration this year, as they did in 2011 (probably the first and only way in which 2012 is not a carbon copy of 2011 so far), should be promptly dashed.
Who Is Funding The Presidential Race? A List Of The Uber-Wealthy Behind The PACs
Submitted by Tyler Durden on 07/21/2012 09:29 -0500
Corporations may or may not be people, but money has always talked, and the wealthy certainly do have a lot of excess cash lying around which they would rather prefer spending in hopes of generating the highest IRR possible by influencing the outcome of the presidential race. Below is a look of the uber-rich who have contributed at least $1 million to the major PACs as disclosed to the Federal Election Commission.
THe EURO FaMiLY...
Submitted by williambanzai7 on 07/21/2012 04:24 -0500They're creepy and they're kooky...





