Archive - Jul 3, 2012 - Blog entry

"The United States is the only country with a known birthday."--James G Blaine

“The patience of the public has been exhausted”

Libor Manipulation Is Only One of MANY Types of Fraud Committed by the Big Banks

Debate between Krugman and the CFR rages on in round 2 on whether currency devaluation created the Icelandic Miracle or Mirage.  

The Fed, by buying Treasuries is making insolvent banks even more insolvent. It is a short-term gain (liquidity) for a long-term disaster: banks need as much collateral as they can get their hands on right now. And with Treasuries rallying (raising the value of the banks' assets) any aggressive Fed program to take Treasuries out of the system would be a MAJOR step towards another solvency Crisis a la 2008.

Local Governments Which Entered Into Interest Rate Swaps Got Scalped

Closing in unconvinced ROn mode. European equities taking their final lead from US peers. Peripherals pushing just the last basis points tighter. Note that these curves are finally steepening through renewed short end strength with both 2-3 YRS area down 20bp on the day. On the other hand, Core EGBs have not been driven into the wall, as one could have expected in full ROn modus. German 2 / 5 / 10s about unchanged from Friday.

Tug of war between wary optimists and tired pessimists? Glass half full or empty? Dusty diamonds, anyone?

Not a highly inspirational day to write about. Reduced volatility and very range-bound. Lack of real news flow. Action more in the financial people press, as it stands. And in EUR New Issues, as borrowers have come to learn that windows of opportunity, when seeing one, should be used. Knowing, too, that new issues will grind to an end probably as of the end of next week. Hence, EUR 7.5bn senior bank debt served in 2 days. Ce qui est pris n’est plus à prendre…

Anna was best known as co-author with Milton Friedman of A Monetary

History of the United States, 1867-1960 (1963). She also was the staff

director of the United States Gold Commission, 1981-1982. 

It truly appears as if European authorities have pretended so long that they have actually forgotten (if they ever knew) the difference between money printing and true economic progress. The results of such will not look good...

Raise your hand if you think we are getting the full story here...