Archive - Nov 2011 - Blog entry

For years I have warned of the impending European collapse. Now, as it is happening, we still have banks getting away with nonsensical 60% writedowns on essentially worthless debt. LGD > 100+% - You ain't seen the worst of it, not by a long shot!

More silly stuff from D.C.

All you need to read.

Italian borrowing costs reached breaking point on Wednesday after Prime Minister Silvio Berlusconi's promise to resign failed to raise optimism about the country's ability to deliver on long-promised economic reforms.

Italian 10-year bond yields shot above the 7 percent level that is widely deemed unsustainable, reflecting investors' concerns that they may not get their money back, a fear that also showed up in a jump in the cost of insuring against Italian debt default.

We have lots of news to cover here today so: PUT YOUR COFFEE AWAY NOW!

An Athenian view.

BNP Paribas SA and Commerzbank AG (CBK) are unloading sovereign bonds at a loss, leading European lenders in a government-debt flight that threatens to exacerbate the region’s crisis.

BNP Paribas, France’s biggest bank, booked a loss of 812 million euros ($1 billion) in the past four months from reducing its holdings of European sovereign debt, while Commerzbank took losses as it cut its Greek, Irish, Italian, Portuguese and Spanish bonds by 22 percent to 13 billion euros this year.

No country is economically more dependent on the euro than export powerhouse Germany. But now that the euro extravaganza slammed into a mountain of debt, Germany finds itself at war—with itself.

This is a tough market to trade in, and I don’t want to get chopped around or do any heavy lifting.

Tyler is pretty sharp. He busted Morgan Stanley more than once. Reminds me of this tall handsome brother busting that big French bank playing hide the Sovereign Sausage...

"To the extent that a political judgment is made that particular circumstances require government support of the mortgage market, that support should be provided openly by a full-fledged government agency."

The SNB is trashing the CHF again. Gold is the only winner.

Welcome to Post-Information Age Investing!

Europe has now gone from a relatively small problem (Greece) to a HUGE problem (Italy). Greece is the 11^th largest economy in Europe. Worldwide exposure to Greece's debt is roughly $280 billion. In contrast, Italy is the third largest economy in Europe and the third largest bond market in the WORLD. Global exposure to Italy’s debt is north of $800 billion. It’s already taken down one firm (MF Global), others are coming too.