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"Hitting The Fan" - IceCap Asset Management June Presentation

Tyler Durden's picture




 

From Keith Decker of IceCap Asset Management

If you are a human being, you should hold your self to certain standards, amongst which include-not lying. When you are the Prime Minister of a country, one would think, as an elected official, you should certainly adhere to the not lying principle. Now, if you are a human being, the prime minister of a country, AND the head of financial ministers for the Euro (2nd largest currency in the World), one would think and hope (keep your fingers crossed) that you would simply never ever lie. Not so for the dis-honourable Prime Minister of Luxembourg, Jean-Claude Juncker as he plainly stated that “when it becomes serious, you have to lie.” The European financial system is a “serious” mess. Greece is insolvent, Portugal and Ireland are not far behind. Spain is also clearly struggling as are certain Italian banks, meanwhile Belgium doesn’t even have a government. Mr.Juncker: here’s an idea–instead of lying, force the banks to accept losses on their bad investments in bonds from the just listed countries. Investors can use all of the information available in the World to make decisions, however when very powerful individuals resort to lying to keep things together you have to be concerned... Can Greece “grow” out of their problems? Acceleration in domestic growth is highly unlikely. The EU/ECB austerity medicine of higher taxes, lower wages and layoffs is guaranteed to reduce spending on everything. By default (pun intended), the only other option for Greece is to “export” its way to growth and prosperity. Now please excuse our ignorance, however we are not aware of (m)any Greek products or services that are of high value, needed all around the World and offered by no one else. Compounding the export challenge, is the inability of Greece to de-value their currency to make their exports cheaper. At the end of the day, it’s a “Heads Greece loses, Tails Greece still loses.” The only difference is how soon the “fan” comes back into play.

Full report (pdf)

IceCap Asset Management Limited Global Markets June 2011

 

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Sat, 06/25/2011 - 14:11 | 1401242 chartcruzer
chartcruzer's picture

There seem to be five factors wiggling into alignment this summer.

1) End of QE2 (note the affect)

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s206018187]&disp=P

2) General luquidity contraction as overheated economies (like China) are forced to fight inflation.  Note recent articles on ZH

3) Sovereign debt crisis (may be postponed a bit more)

4) Economic stimulus in the US winding down fast and the economy going soft fast.

5) State and local govs in the US facing huge budget shortfalls/debt loads/cuts.

No wonder we now have major long term sell signals on most equities/commodities markets

nyse

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s236022770]&disp=P

nasdaq

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s236022169]&disp=P

russell

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s236094855]&disp=P

commodities

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s232689475]&disp=P

precious metals

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s234896717]&disp=P

agriculture

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s225529000]&disp=P

base metals

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s225520737]&disp=P

maybe a shorter term bounce soon.   but that's probably it.  no new luquidity no rising markets.

what fun

 

Sat, 06/25/2011 - 15:53 | 1401421 spiral_eyes
spiral_eyes's picture


sorry to spam, but zh people, get in this chatroom and convince lulzsec to use their considerable internet firepower to break into goldman sachs/ jpm.

 

http://irc.lc/anonops/antisec/anonyops@@@

 

thank me later.

Sat, 06/25/2011 - 16:41 | 1401499 Ahmeexnal
Ahmeexnal's picture

lulzsec are nothing more than a bunch of script kiddies. get some skills.

make that "a bunch of ms word macro and windows xp script kiddies".

Sat, 06/25/2011 - 14:15 | 1401255 dbTX
dbTX's picture

"however we are not aware of (m)any Greek products of services that are of high value"

Greece exports more gazpacho and anal whores than any other country

Sat, 06/25/2011 - 16:06 | 1401454 omi
omi's picture

+1

Sat, 06/25/2011 - 14:19 | 1401263 G-R-U-N-T
G-R-U-N-T's picture

Nice report...Simple and to the point. Thanks Tyler.

Sat, 06/25/2011 - 14:19 | 1401264 BobRocket
BobRocket's picture

Looking at the chart, a minor bucket full will be hitting the fan sometime around september and a whole truckful will hit sometime late spring 2013

Sat, 06/25/2011 - 14:23 | 1401271 Id fight Gandhi
Id fight Gandhi's picture

Let's all buy gyros for dinner, do our part.

Sat, 06/25/2011 - 14:24 | 1401273 Dre4dwolf
Dre4dwolf's picture

 

"however we are not aware of (m)any Greek products of services that are of high value"

 

Greece is a tourist location, they base their economy on tourism, it only makes sense that when they joined the Euro that tourism would fall, forcing many tourist resorts and locations to be sold to the bankers for pennies on the dollar to pay for debt that was impossible to pay off.

 

The banks stole the public credit of the Greek people, and lent them back their own credit and charged interest, you cannot pay back something with something that doesn't exist.

Money doesn't even exist anymore, there is no such thing, money is the stuff of fairy tales and make-believe.


Sat, 06/25/2011 - 18:24 | 1401635 traderjoe
traderjoe's picture

+1

Sat, 06/25/2011 - 14:21 | 1401278 Atomizer
Atomizer's picture

What a glamorous photo of an iceberg. If you look closely, you can see the ship on the horizon.

Sat, 06/25/2011 - 17:27 | 1401548 Confucious 222
Confucious 222's picture

No, it's another less glamorous iceberg.

Sat, 06/25/2011 - 14:41 | 1401302 tim73
tim73's picture

"Now please excuse our ignorance, however we are not aware of (m)any Greek products or services that are of high value, needed all around the World and offered by no one else."

I am not aware any products from Florida or Alabama or Wisconsin or Kansas that are of high value, needed all around the World and offered by no one else. Still they are staying inside dollar zone...42 states are as fucked up as Greece fiscalwise.

 

Sat, 06/25/2011 - 17:58 | 1401594 mynhair
mynhair's picture

Shows how ignorant you are - FL supplies the bestest ex-pat NYjoos like Blabbermouth Schultz!

Sat, 06/25/2011 - 14:44 | 1401304 Corn1945
Corn1945's picture

There is too much debt in the system right now. The attempts to restart the credit creation machine have failed with the only uptake being student loans. Too few people are paying attention to this.

Sat, 06/25/2011 - 15:13 | 1401359 slewie the pi-rat
slewie the pi-rat's picture

oh, LOOK!  your time stamp and your comment # both add up to the same! 

Sat, 06/25/2011 - 17:16 | 1401532 Johrny Bravo
Johrny Bravo's picture

Weird indeed, that you even noticed this. And quite meaningless...

Sat, 06/25/2011 - 18:00 | 1401606 css1971
css1971's picture

One of the big problems with data mining.

Sat, 06/25/2011 - 18:38 | 1401658 slewie the pi-rat
slewie the pi-rat's picture

see?  now we have even more people paying attention! 

Sat, 06/25/2011 - 14:46 | 1401308 Eireann go Brach
Eireann go Brach's picture

JC Mc Junk is a punk and smells like a skunk!

Sat, 06/25/2011 - 15:09 | 1401353 slewie the pi-rat
slewie the pi-rat's picture

how soon the fan?
we are like a bunch of six-year-olds waiting for Xmas!
greek epics, BiCheZ!
the storytellers have handed down the myth of the greek default, unaltered, since before recorded history.
now, go wash up. it's time to eat.

Sat, 06/25/2011 - 15:54 | 1401431 ISEEIT
ISEEIT's picture

Can we please just get this shit over with already? I'm tired of holding short at 1.40 & 1.41. The Euro is SOOO like a girlfriend that gets naked but won't f$$k.

The AUD has been fun though. Up she goes and then like a charm.. Down she goes.

Who the f@#k are the bulls with those two?? I get it that they must make money off the fun but what retard takes that sorta gamble. Dumb question I guess because there are always two sides of a trade. Seriously perplexing to me though.

Sat, 06/25/2011 - 16:00 | 1401436 agrotera
agrotera's picture

Without integrity, one's (an individual or a nation) currency has no value. 

Sat, 06/25/2011 - 16:10 | 1401453 SWRichmond
SWRichmond's picture

Can Greece “grow” out of their problems?

"Growth" is now a euphemism for "inflation."

Sat, 06/25/2011 - 17:31 | 1401570 rocker
rocker's picture

And to Bernankee, The Economy is the Stock Market.

Sun, 06/26/2011 - 00:45 | 1402311 Karl Danneskjold
Karl Danneskjold's picture

no way...

Sun, 06/26/2011 - 16:17 | 1403517 WonderDawg
WonderDawg's picture

Greece can't inflate out of their problem because they don't print their own money. They are truly fucked. They have two options: 1. Default now, or 2. Take on more debt and default later.

Sat, 06/25/2011 - 16:17 | 1401460 apberusdisvet
apberusdisvet's picture

You are obviously sure that lulzec is just not another psyops deal or false flag attack?  And what did Wikileaks really accomplish?  I'm still waiting for the info that will take down BAC.  Put your faith in freeing your own mind from distractions so that you can connect the dots in an unfiltered way.

Sat, 06/25/2011 - 16:51 | 1401478 macholatte
macholatte's picture

fantasy land.....

 ......one would think and hope (keep your fingers crossed) that you would simply never ever lie.

the cold truth

“when it becomes serious, you have to lie.”

 

All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.
George Orwell

Washington, DC is to lying what Wisconsin is to cheese.
Dennis Miller

What we have to do, what at any rate it is our duty to do, is to revive the old art of Lying.
Oscar Wilde

Sat, 06/25/2011 - 17:08 | 1401525 scatterbrains
scatterbrains's picture

lots of goolish freakishness in the time/price/wave/harmonics with a bit of numerology mixed in. Keep an eye on 11/11/11...

http://commontool.blogspot.com/

 

Sat, 06/25/2011 - 18:16 | 1401626 slewie the pi-rat
slewie the pi-rat's picture

the armistice that ended WWI was signed 11/11/18 @ 11 AM.

YouTube - Elvis Presley, Buddy Holly, Carl Perkins & Johnny Cash

some fan shot this in a H.S. in lubbock, TX, in 1955.  i'm pretty sure the music is an overdub.  hhahaha.  peace

Sat, 06/25/2011 - 17:31 | 1401558 upWising
upWising's picture

Let's elevate the tone here and say

"When the fæces hit the whirling blades."

or perhaps a "Structured Leveraged Incontinence Management Exercise."

It smells so much better.

Sat, 06/25/2011 - 17:28 | 1401564 dcb
dcb's picture

He he is one of the beter one's. he admots to telling lies. We have the bernank, who lies every time he opens his mouth and doesn't get called on it.

Sat, 06/25/2011 - 17:58 | 1401593 carbonmutant
carbonmutant's picture

See now this is why I read Zerohedge.

I learned that "When you are the Prime Minister of a country, one would think, as an elected official, you should certainly adhere to the not lying principle"

I always thought Lying was a prerequisite...

 

Sat, 06/25/2011 - 17:59 | 1401604 mynhair
mynhair's picture

"President" wasn't mentioned.  That's where the prerequisite comes in.

Go SPR!  Up in flames....

Sat, 06/25/2011 - 18:02 | 1401602 css1971
css1971's picture

Hmm... The period looks like 2012 peak rather than this year.

That'd mean another boom -> ~14,000 on the Dow, ~1600 on the S&P and 6,600 on the FTSE this year before the slide.

 

Sat, 06/25/2011 - 18:36 | 1401652 snowball777
snowball777's picture

Hmm...you seem to be in a room with insufficient ventilation and too much airplane glue.

Sat, 06/25/2011 - 19:03 | 1401686 Yen Cross
Yen Cross's picture

 Trippple tops and decending bottoms. ouch!

Sat, 06/25/2011 - 19:05 | 1401689 mynhair
mynhair's picture

Is that like crossing the T in naval speak?

Sat, 06/25/2011 - 19:17 | 1401697 Yen Cross
Yen Cross's picture

 it's like pisssed off ED; ness.  Nice work mynH.   I always appreciate the satire`.

Sun, 06/26/2011 - 09:40 | 1402689 flacorps
flacorps's picture

Focardi & Rossini will manufacture in Greece. That should help a lot.

Sun, 06/26/2011 - 13:25 | 1403169 Bartanist
Bartanist's picture

We all deal with this in American/Western business and culture ... it is a cultural axiom. I will once again relate the quote from the Zorro movie. "A gentleman is someone who says one thing and thinks another".

People love lies and they love to be lied to. The vast majority of people do not want to face the truth about themeselves, their lives, their world, etc. The most charming people have a talent for telling wonderful little lies.

Maybe people would be strong enough to face the truth if they were forced to do so (lets say if everyone was able to read the the minds of others), but in our world, people never need to grow up and become whole human beings because they never need to exit the womb of comfortable lies.

It is no wonder that those who rise highest in our societies are those who are most adept at reading people and then telling them what they want to hear. They are able to juggle multiple false relationships with many others comparably skilled at lying. They each understand each other, with no need to ever be truthful.

However, only by acknowleding and confronting the truth can we develop hope that we can conquer the obstacles that face us... and if we know what we need to achieve and have hope, we can get there.

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