Archive - Aug 3, 2014

With regard this week’s market debacle, the question, of course, is whether this was simply a blip – yet another one-day BTFD opportunity – or the start of something bigger and worse. The answer, we think, depends on how the media Narrative surrounding the week takes shape over the next several days. Right now the media Narrative about the week is in complete disarray, because there was no obvious “reason” for the sell-off. Or rather, there were too many possible reasons, from bad earnings reports to the Argentina default to worries about a strong jobs number to Espirito Santo cracking up to new Russian sanctions to just a generic “we were overdue for this”. From a game theory perspective, this sort of seemingly out-of-the-blue sharp move had very little to do with anything that happened this week, but is a natural by-product of the Common Knowledge Game in action.

U.S. Busted Faking Satellite Photographs In Both Iraq Wars

Ten times a year, once a month except in August and October, a small group of well dressed men arrives in Basel, Switzerland.  Carrying elegant overnight bags and stylish brief cases, they discreetly check into the Euler Hotel, across from the railroad station. They come to this quiet city from places as disparate as Tokyo, Paris, Brasilia, London, and Washington, D.C., for the regular meeting of the most exclusive, secretive, and powerful supranational club in the world.

The gold price manipulation scheme will go down as the biggest financial market scandal in US history for numerous reasons. They include the destruction of the free market system in the United States.

• Portugal may use the Resolution Fund to recapitalize Banco Espirito Santo, Diario Economico reports, citing unidentified people linked to the process.
• Resolution Fund may inject more than €3 billion
• A “bad bank” may be created for the toxic assets of the credit portfolio
• Solution aims to rescue Banco Espirito Santo without spending taxpayers’ money, and is being prepared by the government and the Bank of Portugal
• From Aug. 4, Banco Espirito Santo will leave the stock market and will be 100% owned by the Resolution Fund, an entity created in 2012 and financed by Portuguese banks and by revenue from the special contribution that the banking sector pays the Portuguese state

When it comes to diplomacy, John Kerry may have rapidly become the biggest laughing joke in US State Department history, but that doesn't mean his exchanges weren't valuable to others. Others such as Israel, whose relations with the US have gone from worse to atrocious in recent months, and which as Spiegel just revealed, had eavesdropped on John Kerry on at least one occasion, during Mid-East peace negotiations. Israel would then use the information obtained from the calls during its own negotiations in the Mideast conflict. Further, Spiegel reports that at least one other intelligence service also listened in as Kerry mediated last year between Israel, the Palestinians and the Arab states. The German publications adds wryly that "revelations of the eavesdropping could further damage already tense relations between the US government and Israel" although with Netanyahu openly refusing Obama's demands about a Gaza ceasefire, one wonders just how much worse things between the two "allies" could get.