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Art Cashin's Take On Europe's Fiasco

Tyler Durden's picture


Art Cashin, the skeptical floor veteran, and always practical and easy-spoken observer of market moves and developments, shares his latest set of views on the happenings in Europe. Granted this is backward looking, as things in Europe change from one total mess to another in minutes, but still a good summary for new entrants into the utter chaos that is a EUR-driven market with 1.000 correlation to the European currency.

Political Posturing And Postponing On Two Continents - Tank Stocks - The European crisis appeared to spread to Italy as bond yields and CDS spreads virtually exploded. While Italian paper and Italian banks came under severe pressure, their problems may be as much related to politics as it is to any problems of liquidity or solvency.

There are concerns that the Italian government may be becoming more dysfunctional than normal just as a financial crisis threatens A key problem seems to be an increasingly acrimonious relationship between Premier Berlusconi and Finance Minister, Giulio Tremonti. Berlusconi recently said of Tremonti - “He’s not a team player, and thinks he’s a genius and that everybody else is a cretin”.

Tremonti is under severe press attacks for being the house guest of a close ally who was recently arrested on corruption charges.
Tremonti seems to think he’s too important to fail. He’s quoted as saying, “If I fall, then Italy falls. If Italy falls, then so falls the Euro. It is a chain”. Not very calming to markets.

The Italian mess and more political grandstanding in Washington had stocks open sharply lower and stay there all day. They never got to one knee for the mandatory eight count. The only saving grace in the carnage was that the S&P held exactly at its 50 day moving average (DMA).

Playing For Time In Europe - Watching the Kabuki dance staged by European leaders as the sovereign debt crisis turns worse daily, I am reminded of an anecdote about a disciple of the philosopher Heraclitus. Here’s my version of the anecdote from December 2002:

Let me try to walk through the concept another way. It concerns a fable about a disciple of Heraclitus.

Heraclitus, as you recall from sixth grade, was a Greek philosopher in the fifth or sixth century B.C. (okay, so my memory is a touch inexact). Heraclitus in his own way was the father of chaos theory. He said you could never step in the same river twice, since the water you first stepped in was swept away and the next step was into new and different water. He likened reality to a flame. It looks the same in form but is ever changing.

Anyway, this disciple of Heraclitus (whose name I've forgotten) was condemned to death for his teachings. He begged for his life and promised that if death were postponed, he would teach the king's horse how to fly within a year.

The king, naturally fascinated, complied.

A friend of the prisoner admonished him for conduct unbecoming of a philosopher. Why postpone the inevitable? Die with grace.

The ex-prisoner replied that before there was but one possibility. He would be executed. Now there were four possibilities. Within the year - the king could die - I could die - the horse could die.....or I could teach the damn horse to fly.

Like the disciple of Heraclitus, leadership in Euroland cannot find a solution and appears to be trying only to buy time and hoping horses learn to fly.

h/t London Dude Trader


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Tue, 07/12/2011 - 16:02 | 1449180 Sudden Debt
Sudden Debt's picture

First it's euro bashing time

Then It's US bashing time

Now it's euro bashing time again

All in 1 trading session. It's been fun today :)


Tue, 07/12/2011 - 16:24 | 1449271 camaro68ss
camaro68ss's picture

Race to the bottom BITCHEZ!

Tue, 07/12/2011 - 17:25 | 1449550 prophet
prophet's picture

Well, now meet me in the bottom,

Bring me my runnin shoes.

Well, now meet me in the bottom,

Bring me my runnin shoes.

When I jump out the window,

I won't have time to loose.

When you see me streakin by,

Please, don't be late.

When you see me streakin by,

Please, don't be late.

Well, when you see me movin,

You know my life is at stake.

Well, I hope you see me,

I come streakin by.

Well, I hope you'll see me when,

I come streakin by.

She got a bad old man,

You know, I'm too young to die.

Boy, I got to leave here.

Fore I get caught in there.


Howlin' Wolf - Meet Me In The Bottom

That tune is one of my all time favorite rifs.

Tue, 07/12/2011 - 16:03 | 1449189 gorillaonyourback
gorillaonyourback's picture

now thats funny

Tue, 07/12/2011 - 16:07 | 1449216 SWRichmond
SWRichmond's picture

It's a perfect story.

Tue, 07/12/2011 - 16:24 | 1449265 Translational Lift
Translational Lift's picture

Nope.....Their trying to get PIIGS to fly  ;>)

Tue, 07/12/2011 - 19:33 | 1449873 thatthingcanfly
thatthingcanfly's picture

It's "They're." Jarhead.

Wed, 07/13/2011 - 03:19 | 1450780 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

Dude, it's bad enough I got to take a math test to post. Now I have to watch my spelling and grammar?

Tue, 07/12/2011 - 16:05 | 1449204 au_bayitch
au_bayitch's picture

Pigs will fly before the banksters are done sucking the life from the working class dogs.

Tue, 07/12/2011 - 16:07 | 1449217 4xCompass
4xCompass's picture

Brilliant! back to the bottle Art.

Tue, 07/12/2011 - 16:12 | 1449232 kito
kito's picture


Tue, 07/12/2011 - 23:50 | 1450462 snowball777
snowball777's picture


Tue, 07/12/2011 - 16:12 | 1449234 cougar_w
cougar_w's picture

Sounds like a riff on the "running away from a bear" idea.

You don't have to be faster than the bear to get away from  a bear, you only have to be faster than one other person who is also running from the bear.

Tue, 07/12/2011 - 16:13 | 1449236 francis_sawyer
francis_sawyer's picture

Well that solves the question...

Art Cashin... Alive or dead?... Answer: still alive...

Now... about Bin laden




Tue, 07/12/2011 - 16:14 | 1449239 williambanzai7
williambanzai7's picture

In Europe horses do fly all the time, to Finance Minister meetings.

Tue, 07/12/2011 - 16:16 | 1449244 Sudden Debt
Sudden Debt's picture

A unicorn isn't just a horse.

so you know...

Tue, 07/12/2011 - 16:47 | 1449395 Use of Weapons
Use of Weapons's picture

...and unicorns don't have wings.


so you know...


[You were aiming for Pegasos, but got way-laid by a gay underground scene meme; better due diligence!]


Tue, 07/12/2011 - 16:55 | 1449433 Sudden Debt
Sudden Debt's picture


Tue, 07/12/2011 - 17:13 | 1449507 Use of Weapons
Use of Weapons's picture

A lifetime is a child playing, playing checkers; the kingdom belongs to a child.



Night Dad!

Tue, 07/12/2011 - 19:24 | 1449846 thatthingcanfly
thatthingcanfly's picture

Nice to see there's another Iian Banks fan on ZH.

Tue, 07/12/2011 - 16:28 | 1449291 Crisismode
Crisismode's picture

Actually, it's just the Horses Asses that fly to the meetings.

Tue, 07/12/2011 - 23:54 | 1450468 snowball777
snowball777's picture


Tue, 07/12/2011 - 16:34 | 1449316 THE DORK OF CORK
THE DORK OF CORK's picture

There's a long tradition of Horse discourse in European poltical circles.


Tue, 07/12/2011 - 16:18 | 1449243 Dr. Engali
Dr. Engali's picture

Art's a genius. One of the few who ever makes any sense.

Tue, 07/12/2011 - 16:17 | 1449247 msnrochny
msnrochny's picture

Teach Horses to fly, and we have a fun story.  Teach Sheep to fly, and we'll have a revolution.

Tue, 07/12/2011 - 16:22 | 1449262 goldnguns
goldnguns's picture

The only real solution is stock the wine cellar, add a couple cases of Bambay gin, and tell the wife "honey, the trip to Italy is cancelled due to cross spectrum non-functionality and utter raving lunacy". Glad I didn't buy that little Tuscan villa in Pieve Santo a few years back.

Tue, 07/12/2011 - 16:30 | 1449295 Crisismode
Crisismode's picture

You'll be able to pick it up for a few pieces of gold in a few years time.

Tue, 07/12/2011 - 16:23 | 1449266 Gold Man-Sacks
Gold Man-Sacks's picture

I haven't seen this guy, or Alan Valdez, on CNBC in months.  I guess they weren't day-trader, cowboysish enough.

Tue, 07/12/2011 - 16:25 | 1449274 CompassionateFascist
CompassionateFascist's picture

Zero sez "no soc sec chex unless I get another 2.5 trillion in credit". Getting better by the minute.

Tue, 07/12/2011 - 16:26 | 1449280 Oquities
Oquities's picture

as a young broker in the 80s i admired elder statesmen of the brokerage industry at the local level in Detroit.  i salute Mr Cashin as one of their kind,an anachronistic delight, the "customer's man," the wise guide.  Mr Cashin, if you go away tomorrow, know that i have appreciated you for years!

Tue, 07/12/2011 - 16:45 | 1449385 SwingForce
SwingForce's picture

Yes, he was the Paine Webber man-on-the-floor when there were still men on the floor, floor brokers and the like. How things have changed.

Tue, 07/12/2011 - 16:26 | 1449283 kaiten
kaiten's picture

Funny how everyone loves moaning about Europe these days. So let´s look at figures. Eurozone aggregate budget deficit(projection for this year): below 5%. UK/US/Japan all have projections for budget deficit(for this year) around 10%, twice as much as eurozone. Now, tell me someting about hypocrisy. 

Tue, 07/12/2011 - 16:33 | 1449306 Crisismode
Crisismode's picture

Hypocrisy is not limited to any country, nationality, race, or creed. It's a deeply-ingrained human trait.

Tue, 07/12/2011 - 16:39 | 1449338 kaiten
kaiten's picture

Well, thanks for your information. I´ll remmeber that! :)

Tue, 07/12/2011 - 16:39 | 1449337 Black Forest
Black Forest's picture

There is no Eurozone. That "zone" is an artificial patchwork.


Tue, 07/12/2011 - 16:44 | 1449376 kaiten
kaiten's picture

So the UK/US is so scared of an artificial patchwork? Even better.

Tue, 07/12/2011 - 16:50 | 1449406 Black Forest
Black Forest's picture

So the UK/US is so scared of an artificial patchwork?

That's the funny thing about it.

Tue, 07/12/2011 - 17:02 | 1449467 kaiten
kaiten's picture

It´s more revealing than funny, actually. Revealing of UK/US "strength" and self-confidence.

Tue, 07/12/2011 - 16:54 | 1449424 Oquities
Oquities's picture

i think that the ability to create your own currency trumps debt-to-GDP.  the other countries you mentioned have that distinction from the Eurozone.

Tue, 07/12/2011 - 16:58 | 1449446 walküre
walküre's picture

There was a time when the US was able to force the world at gunpoint to swallow that USD reserve currency medicine or else.

That time has passed.

Tue, 07/12/2011 - 17:09 | 1449488 Oquities
Oquities's picture

nevertheless, Japan, UK and US can print (for now), unlike Greece, Italy, etc.

Tue, 07/12/2011 - 17:09 | 1449492 kaiten
kaiten's picture

The ability to create own currency, aka debasing the currency(let´s call it the real name), is an advantage? Funny you say this. I dont know about any country devalue-ing itself into richness. Sure enough african and latin american countries tried many times, but so far failed. Perhaps US/UK will be more lucky in this regard. We´ll see ....

Tue, 07/12/2011 - 17:19 | 1449527 Oquities
Oquities's picture

didn't say it was an advantage.  it is, however, a reality.

Tue, 07/12/2011 - 16:54 | 1449431 walküre
walküre's picture

Another open secret is that Europeans aren't leveraged 1000x and one step away from filing bankruptcy like so many Americans still are.

25% of home "owners" are upside down on their mortgage?

Almost 15% of the population on food stamps to survive?

Debt ceiling breached again and again?

Unaffordable military experiments and other useless expenditures spanning the globe?


Tue, 07/12/2011 - 20:22 | 1449976 PhattyBuoy
PhattyBuoy's picture

Surely a signal to expand my small business ...

Tue, 07/12/2011 - 23:57 | 1450476 snowball777
snowball777's picture

Nice pea under the shell attempt.

How's their inflation?

And their GDP?

Alright then.

Tue, 07/12/2011 - 16:30 | 1449286 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

FTSE about to do a 50DMA and 200DMA death cross for the first time in a year.... ooooh, permission to soil ones self sir.

Tue, 07/12/2011 - 16:30 | 1449294 Careless Whisper
Careless Whisper's picture

Art is awesome.

Tue, 07/12/2011 - 16:46 | 1449390 Sambo
Sambo's picture

Unfortunately or fortunately there is only one outcome. On a long enough timeline the survival rate for any system is zero.

Tue, 07/12/2011 - 16:48 | 1449403 MiningJunkie
MiningJunkie's picture

We need more Art Cashin's...

Tue, 07/12/2011 - 17:05 | 1449478 CustomersMan
CustomersMan's picture


      I had a new customer one-time, who called me to open a margin account and Buy on margin several thousand shares of Western Airlines.


Upon questioning him, under Rule 405, I was surprised at his impatience with my questions. Of course he hadn't put up any money yet.


I asked him what compelled him to Buy in such a hurry.


He then told me he worked in a uniform company that had just shipped out uniforms to Western Air, there was nothing wrong with the work. The problem was they had just come back with a request from the company to place a Delta insignia above Western Airlines.


And the rest is history, money was made, no insider rules applied, and we all went home happier. How I long for the good ol' days, a true story from the trenches. I have hundreds more. That was back in the 80's

Tue, 07/12/2011 - 17:14 | 1449514 Oquities
Oquities's picture

i once bot when the customer said sell.  three months later she called and said "what happened" essentially.  i took a several thousand dollar hit that month making it right because i knew she was right.  guys like Art Cashin were "lookig over my shoulder" making me do right.

Tue, 07/12/2011 - 17:09 | 1449489 midnight
midnight's picture

The Europe fiasco is a desperate attack coming from the US that is struggling to stay afloat. Calling people lazy PIIGS or untermensch, feeling that in the global economy you are not being raped alone can make you feel warm and fuzzy, but you are a RETARD if you put your money on the line, shorts, CDS, whatever.



Tue, 07/12/2011 - 17:39 | 1449591 NOTaREALmerican
NOTaREALmerican's picture


Horse is a horse, of course of course,

but no-one can talk to a horse, of course,

that is, of course, unless the horse is the famous Mr Ed.



Tue, 07/12/2011 - 21:12 | 1450109 Sunshine n Lollipops
Sunshine n Lollipops's picture

Oh, Wilbrrr-r-r-r-r!

Tue, 07/12/2011 - 20:13 | 1449969 Buck Johnson
Buck Johnson's picture

"The ex-prisoner replied that before there was but one possibility. He would be executed. Now there were four possibilities. Within the year - the king could die - I could die - the horse could die.....or I could teach the damn horse to fly.", spot on they are prying that if they buy enough time that everything will work out and it's not doing that.

Tue, 07/12/2011 - 20:49 | 1450055 turfmac
turfmac's picture


Tue, 07/12/2011 - 23:47 | 1450458 snowball777
snowball777's picture

“He’s not a team player, and thinks he’s a genius and that everybody else is a cretin”

Only when he's around you, ya hairy bunga-tard.

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