Archive - Apr 2013 - Blog entry

A concise summary of the week's crucial events. You know. Short. Concise. I think you get it. 

Since the Financial Crisis erupted in 2007, the US Federal Reserve has engaged in dozens of interventions/ bailouts to try and prop up the financial system. Now, I realize that everyone knows the Fed is “printing money.” However, when you look at the list of bailouts/ money pumps it’s absolutely staggering how much money the Fed has thrown around.

The big driver of market declines Friday was led by the Non-Farm Payrolls report. The jobs data was a dreadful miss which leads to the major “disconnect” we’ve been seeing between stock prices and overall economic data which we posted just last week. This is the nagging and confounding reality of the QE and ZIRP grand experiment for many investors.

Instead of Changing their Behavior to Prevent Another Crisis, the Powers-That-Be Double Down On the Strategies that Caused the Financial Crisis In the First Place

You have your fear which might become reality; and you have Godzilla, which IS reality.--Godzilla 1954

In an environment such as this, smart investors are allocating at least some of their capital to Gold and Silver bullion And whatever you do, don’t store it with anyone else. As Cyprus has just shown us, when the Crisis hits… you can’t get access to your money.

Inherited these kinds of problems from the prior generation and shuffling them to the next generation.

The savings of the people is going into the government bond. This is defined as the "risk free" asset, but can this really be true? What happens if it is not? This video shows the problem from a different perspective.

How many important (or worse yet, systemically important) banks can fail to disclose pertinent debt info before it becomes evident that the tax payer/depositor/regulators/stress tester realizes they don't know the Irish banking system's true condition? 

The CEO of Unicredit Federico Ghizzoni said yesterday that uninsured deposits could be used In future bank failures. He said that the savings which are not guaranteed by any protection or insurance could be used in the future to contribute to the rescue of banks who fail and that uninsured deposits could be used in future bank failures provided global policy makers agree on a common approach.

Thoughts on the BOJ, ECB and US jobs.

Today saw a massive short covering trade occur in the US Treasury market.  Is this a trade to fade??

The days are gone forever, when our enemies could blackmail us with FWMD.--Kim Jong Un

Witches Brew: Part 4 - Reality Bites

• The Specter of Things to Come

The road to ruin is on plain display and the playbook is easily seen at this juncture. Let’s take a look at how that playbook will unfold. Contrary to popular outrage of the SOLUTION being IMPOSED it is the correct one once the insured depositors where PROTECTED.  In this edition the elites suffered FIRST followed by the private sector depositors who foolishly believed false BALANCE sheets which were POLITICALLY CORRECT but PRACTICALLY incorrect fictions approved by fiduciarily (regulations and regulators allowed ONGOING insolvent operations rather than protect the public by ending and prohibiting them) challenged governments (work for the banks and crony capitalists not for the public at large).

The overtly inflationary policy stance of the FOMC is especially significant when you consider that Fed Chairman Ben Bernanke is no longer in control of monetary policy.