October 9th, 2011
Do I have a lot of confidence in this outlook? Uh… no.
Dire numbers prove that running up deficits and printing trillions can't create a healthy economy. Yet, inexplicably, it's what the status-quo media continue to propagate.
Once Again, Because It Will Never Get Old, Here Are The Safest European Banks According To The Second Euro Stress TestSubmitted by Tyler Durden on 10/09/2011 22:40 -0400
The futures are soaring on the latest round of promises from Europe that all shall be well, and after all why would anyone ever doubt anything coming out of Europe. Why, here are the safest Europan banks according to the second Euro stress test completed just 3 short months ago. But this time really is different...
Some time ago we suggested that in lieu of actual practicable solutions (and a promise to recapitalize several trillion worth of insolvent banks absent some magic money printing tree or gold coin defecating unicorn, is so stupid only the market ramping vacuum tube algos can believe, if only for a few hours), the only thing left for Europe's leaders is to baffle absolutely everyone with relentless bullshit. Judging by the following Bloomberg news screencapture, they have now succeeded.
A world insolvency crisis, a Thermidorian reaction in Egypt, a hard landing in China, the first non-PIIGS nationalized bank... The world is on fire yet despite all of the above (or rather due to) what is the topic of one of the most commented articles on Bloomberg over the past week? Why how to hide one's gold. Bloomberg's Ben Steverman writes: "If you’re looking for a safe place to put your investments, Chad Venzke has a suggestion: Dig a hole in the ground four feet deep, pack gold and silver in a piece of plastic PVC pipe, seal it, and bury it. Venzke is hardly the only investor who wants his precious metals nearby at all times. A pound of gold worth about $24,000 can easily fit in a pocket; how to protect it is a decision that carries expensive consequences. Do-it-yourself investors who don't trust banks must find creative storage options, whether burying gold in the yard, submerging it in a koi pond, stashing it behind air-conditioning ducts, or placing it under carpets." Indeed, as Venezuela is about to reclaim possession of its tons of gold from UK vaults, even as the Dutch central bank proudly admit to hiding its own gold in precisely the same venues that are no longer good enough even for Chavez, the topic of where one should hide their physical is rapidly becoming a very incendiary. One thing is certain: among the hard core "physical" community, the idea of storing it in the same banking system that would be insolvent once the fiat status quo collapses, is verboten anathema. So what are the options?
Key Market Events In The Coming Week: More Promises, Headlines And Rumors; And A Very Critical Vote In SlovakiaSubmitted by Tyler Durden on 10/09/2011 21:39 -0400
Key this week will be the final missing EFSF votes, in particular Slovakia. The latest headlines over the weekend suggest the governing coalition has still not found a compromise and will meet on Monday again. The votes of 22 MPs for the SaS party in the 150-member Slovakian government are now the main stumbling block to bringing the effective EFSF lending capacity to EUR440bn and to increase the EFSF’s flexibility. The parliamentary EFSF vote is scheduled for Tuesday. On Monday, the second-to-last vote on the EFSF will be held in Malta. Still linked to the Eurozone crisis, President Sarkozy and Chancellor Merkel agreed over the weekend on the need for bank recapitalisations and the need to find a “durable” solution for Greece. There has also been talk about a “vision” for the Eurozone and a promise for a plan by the November 3 G20 summit. Markets will likely focus on any additional details regarding the bank recapitalisation plan. Of course, Greek issues will remain important as well, in particular after Troika officials have been quoted in the media as criticizing the Greek Government’s determination to implement structural reforms. The results from the Italian bond auction on Thursday may increase the pressure on the Italian government to undertake more growth-enhancing structural reforms, as again demanded over the weekend from the next ECB President Draghi.
Conservatives and liberals are both right ... Just looking at different sides of the same coin.
S&P futures just opened mildly positive in line with the recovery in EURUSD from its Sunday afternoon lows (having broken below 1.335). As we post, Gold has opened very noisily but remains a little higher than Friday's close at around 1642. It seems the apparent no news from Dexia (which is clearly terrible news) is yet to be considered by reality but as we noted on Friday, the fact that Treasuries are closed suggests reactions may be a little unexpected with no immediate safe haven to flood to. JPY crosses are slightly higher sustaining the very small bid under ES for now as it tracks a small range around 1157-8. Very early runs in credit land show a small compression in Main and further senior-sub decompression in financials.
Goldman knows a thing or two about European equilibria (and the lack thereof): after all, it was its "bleeding financial innovation edge" currency swaps that allowed perpetual fiscal transgressors such as Greece (and who knows who else) to be allowed into the Eurozone in the first place despite never meeting the required Maastricht criteria of 3% deficit/GDP in the first place. Which is why we are happy to bring to our readers not only the latest in peak amusement in the form a podcast from GSAM head Jim O'Neill, but GSAM's "European Game Of Life" where in flowchart form, the Squid summarizes the various good/bad equilibria outcomes for Europe that lead to either Happiness or Misery. Frankly, we fail to see how any country in the European periphery, and soon, core, does not belong in the bottom left. But we are confident that Goldman will tell us, even as it hatches yet another scheme with its top clients on how to short the countries that paid Goldman the big bux for the pig lipstick a few short years ago...
In the last 12 months, the numbers of distinct users on Hulu.com (in the United States) have outpaced the metered Nielson ratings of all FOUR television networks combined.
Bankers have made and sold trillions of dollars worth of loans that they knew, or should have known, could not be repaid. That’s fraud. It must be prosecuted.
The Latest Dexia News: Nothing Set Yet, Despite $4 Billion Proposed Purchase Of "Good Bank" By Government, 60% Of Belgium Bad BankSubmitted by Tyler Durden on 10/09/2011 14:27 -0400
The latest from Bloomberg on the story that just won't quit: "Belgium received approval from France to buy as much as 100 percent of Dexia SA (DEXB)’s Belgian consumer bank as part of proposals to dismantle the French-Belgian lender, three people with knowledge of the talks said. [read: Good Bank is fully nationalized; only Dexia's approval is now needed, and that has not come yet...] The price of the Belgian bank is under discussion at a meeting of Dexia’s board of directors in Brussels, and an agreement on that transaction may be announced as soon as tonight, said the people, who declined to be identified because the talks are private."
"Planning To Plan" - Merkozy Reach Yet Another "Agreement", Adding "It Is Too Early To Enter Into Details"Submitted by Tyler Durden on 10/09/2011 13:07 -0400
No, the day is not August 7, 2011 when we had the first joint Merkozy statement attempting to prevent the latest and greatest round of the global financial crisis with nothing but pure rhetoric, in which however the word Dexia was strangely missing. The day is October 9, and yet we get another statement from the two, this time far more desperate. From Reuters: "We are very conscious that France and Germany have a particular responsibility for stabilizing the euro," Sarkozy said at a joint news conference with Chancellor Angela Merkel in Berlin. "We need to deliver a response that is sustainable and comprehensive. We have decided to provide this response by the end of the month because Europe must solve its problems by the G20 summit in Cannes." And the kicker: Merkozy "suggested that their proposals would include a plan for recapitalizing European banks, accelerating economic coordination in the euro zone and dealing with Greece's debt problems." In other words fix absolutely everything. But the punchline remains the same as always: Sarzkoy "added saying it was too early to enter into details." Ah yes, those ever elusive details, which nobody can ever provide, because, THEY SIMPLY DON'T EXIST, at least not in a universe in which 2 + 2 is still 4.
When a pure momentum stock lost its mementum.....
Don't say fraud, Don't say steal; It was destiny, it was God's will...