Archive - Jun 2012 - Blog entry

...and after all of those fancy acronoyms (ECB, EFSF, EU, ESM, ASS, BS, etc.), Italy is essentially just one big Greece. No, I'm not oversimplifying, just look at the bank bailout bailing out the insolvent country circular arguments!

All you need to know.

A land grab shrouded in a banking takeover, wrapped in a financial crisis "rescue." As always, insiders get first dibs.  (And, yes, there is an MF Global connection.)

Giddens ought to approach the bankruptcy judge and suggest that they both apply to Judge Rakoff for the appointment of a receiver in the MF Global bankruptcy. 

As Many Have Predicted for Years

News & headlines from the day

Rampant overproduction, channel stuffing, and an inventory glut: the China auto bubble is hissing.

I know, totally unrelated two topics. 

Neither of them got it right...

One minute you have it, the next minute you don't. Nowadays you never know if the money you have in Europe is really yours or not. From instantaneous debt subordination to capital (flight) controls, things are starting to look ugly!

Spain marks the fourth bailout during this Euro Zone debt crisis saga, after Ireland, Portugal and Greece, and may need more aid, while Italy is looking good to be the fifth bailout candidate

With that in mind, I sincerely doubt €100 billion is going to solve Spain’s problems. The whole bailout reeks of desperation. And it likely will have political and financial implications that will quickly render the benefits of this move moot. Of course, when you’re facing systemic collapse, you don’t have time to debate implications and consequences. But I highly doubt that this move will do much to address Spain’s true problems.

Over-collateralization rates for Spanish covered bonds goes into the stratosphere -- 200-300% -- a grim indication of loss given default.

All you need to read and some more.

It would be nicer to have seen greater extremes in bearish sentiment at the bottom as this leads to stronger future returns.