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European Banks Now Feverishly Betting Against Euro, As Bailout Fails, Gold Surges
Thought experiment: You are the head FX trader at French megabank Croc Monsieur & Cie. (HFT: CMC) For the past 5 years, your bonus has been getting paid primarily in company stock. In the last two weeks you have seen the stock of your firm plunge as the markets have finally realized that those idiots in the Fixed Income desk have loaded up to the gills with PIIGS debt which is now worth 60 cents on the dollar at best. And to top things off, the euro has plunged to multi year lows killing any chance of buying that New York Pied A Terre which seemed so cheap when the EURUSD was 1.50 a few months ago. So what do you do? Well, you short the living daylights out of the EUR, knowing full well that the EU, the IMF and the ECB will not let Europe crash. You sell, you sell on margin and then you sell some more, trying to get EURUSD all they way down to 1.20, to 1.10, even to parity if possible, to make it all that more believable that the end of Europe is coming. And, lo and behold, on May 9 your plan succeeds: Europe agrees to bail your bonus out, by flushing $1 trillion under the pretext the money will be used to stabilize the periphery and the euro. Immediately the stock of CMC, and thus the value of your accrued bonus (several million worth), surges by a record 20% in one day. So you think: "How can I get an even greater bonus appreciation? Why - I will short the euro again. At this point I know that between myself and the other FX desks at all the other French and German banks we can easily take the euro down to 1.20 if not much lower. After all we are only trading against the very central banks that are keeping us alive. And when that happens Europe will have to print another trillion, then ten trillion, then one hundred trillion, all the while the stock portion of my accrued bonus surges. Brilliant." Brilliant indeed - Zero Hedge has received confirmation that several of the largest French banks are now actively shorting the euro to take advantage of globalized moral hazard, which with every ensuing bailout does nothing but make the bonuses of French FX traders surge. In other words, the very banks that Europe is bailing out are betting more and more aggressively with each passing day against Europe's own survival! Even George Soros has shed a tear of pride in how beautifully his initial plan to take on the BOE has mutated for the Bailout Generation.
And overnight, the traders from the imaginary CMC, and other all too real French banks (and now US hedge funds), are succeeding, as the last traces of this weekend's $1 trillion bailout are long forgotten: futures are plunging, Asia is collapsing, the EURUSD is probing a 1.26 handle and we see it easily going back down to 1.25, even as gold surges.
We anticipate another record bailout to be announced by Europe within the month as Europe now has no other choice. And each subsequent bailout will only lead European banks to bet even more aggressively against the survival of Europe, which destroys more and more European taxpayer capital. Welcome to Global Moral Hazard.
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Silver is getting ready to have a rodium moment..
hmm whats up with that, JPM short covering?
I might just have to roll in my pile of silver today if this keeps up.
I betting on it doubling :P
Instant Karma is correct indeed. "better get your act together and join the human race." Do you folks even know what a school board meeting is? Oh, that's right. That's "someone else money so we should spend that, too." As Rahm's sign says, "GFY."
Instant karma is a prick head CIA profiler. She's not interested having you "join the human race" only in getting you coralled into your sheep pen.
H1,
He picks up Gideon's Bible
It's open at page one
It says God, he stole the handle
And the train it won't stop going
No way to slow down
No way to slow down
No way to slow down
I'm about to have a Silvergasm.....
Amazing. $1T doesn't even buy you a full day. I suspect the world is going to look rather different by Friday.
Hmm, noticing a conspicuous absence of the can't eat gold posts...
And MB's, "canned ham, bitchez".
Sun, shine on me!
MB and his canned ham lines, those were pretty funny.
The absence of MB and Harry makes the day twice as glorious.
You would think the Eurocrates would have watched and learned from the behavior of the big U.S. banks and implemented measures to prevent themselves from being abused by the very banks they are trying to save. Greed before country. Always has been, always will be.
For banksters interest. Last public garroting was in 1897. Bringing down countries for personal greed would have qualified many of you.
We can only hope and pray.
Time to relax and watch the next big thing - California.
Greece To Place Request For First Tranche Of EU/IMF 110 Bln Euros Aid Today." The race to the bottom begins. Hell....I think I'll stop by and ask for 10BB (I hope my fat finger didn't get in the way)...that should keep me for a couple of months...nice to know
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Greece To Place Request For First Tranche Of EU/IMF 110 Bln Euros Aid Today." The race to the bottom begins. Hell....I think I'll stop by and ask for 10BB (I hope my fat finger didn't get in the way)...that should keep me for a couple of months...nice to knowccnp security practice exam
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we are like children in kindergarten. Why is the big bad wolf trying to eat little red riding hood? He is such a bad wolf. We're scarred. The children never analyze why the the wolf sounds like mr. janitor and the LRRH sounds like Mrs. Teacher. And/or why the wolf and lrrh need those strings to mowe are like children in kindergarten. Why is the big bad wolf trying to eat little red riding hood? He is such a bad wolf. We're scarred. The children never analyze why the the wolf sounds like mr. janitor and the LRRH sounds like Mrs. Teacher. And/or why the wolf and lrrh need those strings to moControl Arm
In other words, the very banks that Europe is bailing out are betting more and more aggressively with each passing day against Europe's own survival! Even George Soros has shed a tear of pride in how beautifully his initial plan to take on the BOE has mutated for the Bailout Generation. testking HP0-D08
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In other words, the very banks that Europe is bailing out are betting more and more aggressively with each passing day against Europe's own survival! Even George Soros db2 exam questions
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The absolute funniest part of this whole thing is watching the pols scramble to try to manage the economy, which is, of course, impossible. What is revealing about it is this: they still have their heads stuck firmly in the old paradigm, the one they grew up with, inculcated in them by Greenspan, that the Fed has always got their backs, that the system can go on forever based on lies and borrowed money /scbcd braindumps/scmad braindumps/VCP-410 dumps/640-802 dumps/SY0-301 dumps/350-030 dumps/000-118 dumps/000-977 dumps/1Y0-A19 dumps/E22-275 dumps
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IMF and the ECB will not let Europe crash. You sell, you sell on margin and then you sell some more, trying to get EURUSD all they way down to 1.20, to 1.10, even to parity if possible, to make it all that more believable that the end of Europe is coming. And, lo and behold, on May 9 your plan succeeds.
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