November 4th, 2011
Ah the old "destroying the universe" ploy.
Fall Of The House Of Money: Artemis Capital On How €entral Banking Took Over Capital Markets... And The WorldSubmitted by Tyler Durden on 11/04/2011 15:36 -0400
One of the long-term recurring themes both here and in other more objective media, has been the encroaching domination of the central planning regime, or monetary authorities, read central banks, in the domain of capital markets and overall broad sovereignty, to the point where there is neither technical nor fundamental analysis left, but merely the question of where is the next batch of excess liquidity going to come from. Welcome to the death throes of the fiat system. Artemis Capital has released an extended must read presentation that summarizes just how global changes in trade, currency exchange, global monetary excess liquidity in recent decades, and especially in the coming future, will increasingly determine and define risk, and more troubling, the centuries old anarchism of state sovereignty. Anarchism, because as Europe has demonstrated so very well, in the current world the only real actors are the central banks. And with each passing day they become ever more powerful players in the global capital markets arena, as confirmed by correlations that rise every higher, approaching 1.000 across all asset classes. Anyone wondering why the only fulcrum variable for the future of risk will be FX exchange rates, and why any and all wars in the future will be primarily in binary "currency" format, we urge a careful reading of the attached slideshow by Artemis Capital titled "Fall of the House Of Money: Changes in Global Trade and Currency Exchange."
Jefferies Releases Yet Another Set Of Numbers On Its European Exposure That Differ From 24 Hours AgoSubmitted by Tyler Durden on 11/04/2011 14:19 -0400
Jefferies is out with its third consecutive promise it has done nothing wrong, issuing a press release in which it says "Jefferies has no meaningful credit risk in respect of the sovereign debt of these nations, and an insignificant risk related to interest rate movements" and hopes to slay the dragon of doubt once and for all. Furthermore as CEO Dick Handler adds, "Later today, after the markets are closed in Europe and we have completed our inventory control accounting, we will post on our web-site our day-end, CUSIP-level holdings in the securities of these countries. We care for our clients, shareholders, bondholders and employees and want to allay any concern that may have arisen. As was the case yesterday, the facts about our sovereign debt exposure and other matters are straightforward and easily understood. We encourage all market participants and interested parties to review our public filings that contain extensive disclosure of the nature, extent and financing of our assets. Our firm stands on a solid foundation of over $8.5 billion of long-term capital and we look forward to continued success." We congratulate this espousal of transparency and clairty. We are also 100% certain that Jefferies will be so kind to disclose not only the Cusips but the maturities and tenors of all synthetic products. It will of course also publicly highlight the dates of all transactions: the last thing the public will want to think is that Jefferies took advantage of the grace period of the past 2 days to neutralize its cash book sufficiently. Because one can't help but be curious what the reason for the material difference between the numbers posted as of yesterday and those posted today is, or rather, when the offsetting buys and sells took place.
Update: JPMORGAN SAYS IT DOESN'T HAVE MF GLOBAL MISSING MONEY. Ok, now we need to check with JT Marlin
Last week we heard of glitches which resulted in Germany finding $55.5 billion in missing "debt" and a €3.6 billion error in Irish debt. It was only a matter of time before MF Global also uncovered a "glitch"
- MF ACCOUNT WITH $658.8M IN CLIENT FUNDS SAID TO BE AT JPMORGAN
- MF GLOBAL'S MISSING CLIENT FUNDS SAID TO BE LOCATED AT JPMORGAN
Ignore the fact that MF admitted it had commingled and abused client funds. After all, the big boys take care of their own. And what is $660 million to JPM? Here's what - less than the taxpayer money profit the bank makes on one POMO.
Since nothing else matters in this market except for what lie Europe's leaders can come up with to mask for a few more hours that they are all insolvent and helpless, a statement validated by today's two ECB interventions in the BTP market which achieved absolutely nothing, and resulted in a close in the Italian 10 Year at just over 89, an all time low, despite the Cannes meeting which naturally was a total flop, below we present the key events in Europe for the remainder of November. Unfortunately traders are unable to leave early today even as the market has effectively closed as one has to wait for the Greek confidence vote which is now expected to pass in favor of G-Pap and lead to his resignation and the creation of a coalition government by Monday, although one can't help but be skeptical just how this particular plan will get messed up in the next 48 hours.
The MF Global probe begins. Here are the broad scope details from Bloomberg
- Trustee liquidating MF Global brokerage has started a probe into the company’s failure after getting a judge’s go-ahead. To protect books and records, forensic accountants are “securing” offices in NYC, Chicago, trustee James Giddens said in a statement today.
- "Significant’’ numbers of brokerage accounts being transferred
- Individual accounts will probably be transferred next week
- Giddens, team will work weekend on bulk transfers
As readers will recall, it was only 2 years after the Lehman filing, did Anton Valukas discover such critical mainstays of modern banking fraud as Repo 105. Alas, we do not hold much hope here, at least in the beginning, and certainly not before the FBI is involved.
The latest Wall Street development on the Hopium Continuum...THE GOLDEN TURD BALL!
It’s understandable that people are angry and demanding change. Guy Fawkes and his co-conspirators thought they could change the system through violence. They were wrong. And even if violent revolution does create change, it usually works out poorly. Russia got Lenin and Stalin after their revolution, France got Robespierre’s Reign of Terror… followed by Napoleon’s military dictatorship. Others are deluded into thinking they can change the system in the voting booth… and with one year to go until the 2012 showdown, there are certainly a lot of people pinning their hopes on this idea. Most forget how surprised they are when, in election after election, their guy turns out to be just as bad as the old guy. George Carlin once said, “When I hear a person talking about political solutions, I know I am not listening to a serious person.” He was right. Politics creates problems, not solutions. Truthfully, elections are simply clever parlor tricks anyhow, designed to make people think they are in control. They’re not. The only thing we can actually control is what we do ourselves. Governments are like primitive cannibals feasting on a great treasure trove of sheeple. You can’t force them out, and you can’t vote them out. But you can sure as hell starve them out. When enough people pick up and leave, essentially voting with their feet, it accelerates the system crash. This is the only way to truly change the system.
Did HSBC not get the memo: the collusive attempt to pass debit card fees has failed. We jest of course, but in the footsteps of Bank of America which experienced a mini online bank run some weeks ago, this would at least explain what the Mail Online has dubbed a "worldwide meltdown" in which online banking, ATMs and debit cards appear have been blocked, and no customer access is available. From the British publication: "Thousands of HSBC customers faced the ultimate embarrassment of having their cards declined this afternoon as the bank suffered a 'worldwide meltdown'. Fourty seven countries have potentially been affected in the world's second largest bank. Cards were rejected at tills, cash machines read that withdrawal limits for today had been reached, and the card enquiries phoneline was also down. Unsurprisingly there was pandemonium in HSBC branches up and down the country as people rushed to find out why their cards had rejected." Sure enough, a few hours after this started we get this: "HSBC SAYS AWARE OF `SOME PROBLEMS' ON ITS BANKING NETWORKS" Supposedly what is a "worldwide meltdown" to some is "some problems" to others. Perhaps the bank's ad execs can use that theme for its next Hegelian ad.
Former Bundesbank President Weber Warns Germany Will Be On The European Bail Out Hook For Up To 314% Of Its GDPSubmitted by Tyler Durden on 11/04/2011 11:52 -0400
Anyone wondering why Axel Weber was passed over when picking the next ECB head in exchange for Goldman plant Mario Draghi, only needs to read a piece from Sueddeutsche Zeitung in which the former German central bank head, and future UBS head, confirms he actually does math. As has been said on Zero Hedge since back in July 21, when we actually did the math and realized the EFSF will not work as it will leave Germany footing the bill for all of Europe, Weber in essence said precisely that... but did not stop there. As quoted by Bloomberg, "Former Bundesbank President Axel Weber said the plan to leverage the European Financial Stability Facility increases the likelihood that tax payers have to step in, Sueddeutsche Zeitung reported. Germany’s public debt would rise to 135 percent of gross domestic product if Italy and Spain were to tap the EFSF financial backstop, the newspaper cited Weber as saying in a speech in Frankfurt. As the sole guarantor to the EFSF, Germany could end up with a debt of 314 percent of GDP in an extreme case, Weber said." This in turn brings us back to our own conclusion from 5 months ago: "What happens when an already mortally wounded in the polls Angela Merkel finds herself in the next general election and experiences an epic electoral loss? We will find out very, very shortly." We are happy that finally the Germans are realizing that the opportunity cost to propping up their export sector (the Euro, hence a "weak" DEM) can potentially be the bankruptcy of their country. We wonder how long until someone bypasses that despotic regime in Greece and actually proposes a referendum in Germany, asking the people if they are truly willing to subsidize their corporations in exchange for drowning in debt for millennia? America has already done this and, trust us, it is not pleasant.
Police provocateurs ... or just knuckleheads?
UPDATE: GRPN trades with a $25 handle
Groupon opens at a market cap of about $18 billion. We won't even pretend to know what the magical forward EPS for that valuation is. But no, the real bubble is in gold... The only question we have is whether GRPN will drop below its IPO price in a matters of days or hours. Oh, and where and when can we buy puts, of course.
Starting to feel lost in what is an interminable and constant barrage of rumors, lies, insinuations, speculation, and just broadly, headlines? Fear not: here is Reuters with what may be the most useful invention of the EMU collapse era: the intraday visual headline tracker.