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How Bad is it Really Doc?
Analysts at UBS said authorities will not have taken the decision to restructure Dubai World lightly and that there are three potential explanations for the decision. Firstly, UBS said, Abu Dhabi's support for Dubai might be less generous than assumed. "Perhaps Abu Dhabi has forced Dubai to tackle the problem of excessive corporate debt 'in-house' first before extending more financial support," the broker said. A second possibility is that corporate-sector problems might be more severe than assumed, UBS said. Thirdly, Dubai's debt might be higher than the generally assumed $80 billion to $90 billion due to potential off-balance sheet liabilities, it added.1
- 1. Simon Kennedy, "UBS: Support for Dubai May Be Less Than Assumed," MarketWatch.
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"off-balance sheet liabilities, it added"
OMG. Dark pools in between the sand bars.
I thought those were sharks? :)
No the sheiks
volatility = opportunity
..
Exactly!
Maybe Marla does not recognize someone talking their book. UBS CDS's?
Thanks for being up, Marla :)
oh it is literally, really bad and much more so figuratively ... doncha just love the smell of Primary wave 3 (circle) in the morning !
A rolling dislocation of X+ (where X > 2.5%) across global financial markets is NOT merely another consolidation. From today's open, the ES (S&P Futures) JUST missed, by only .25 points from today's open ... from plotting a daily real body that would have bearishly engulfed the TWELVE previous daily real bodies ... while not registering bc of a measly .25, this MUST be mentioned/ observed. And about the only lipstick I can put on this pig right now is that the @ ES (continuous contract S&P future, current contract ESZ09, basis December) 514229 share (Fibo factorial) interval period held the real body of the hanging man plot closed 16:13 11/06 ... and also that the 11/09 opening exhaustion gap from 1165 has yet to give way ... outside of that and extremely low volume, there ain't much positive left to wax philosophic about.
We can get one more sharp upwards retest after everyone gets scared and gets shorty after the fact ... but once those critical lower real bodies mentioned above are punctured then it will most likely be but the very, very beginning of lights out for equities. As always, anything can happen and only we will all only know what lays immediately ahead once the charts tell us what they have to say. Both our personal opinions and technical reads (which we have been stating here pretty point blank for the past few weeks) is to get your hardhats ready bc after classic wave 2 behavior that has led institutional advisers and retail traders to become as bullish as they damn near ever have been dating back to 11/9/07 ... there are gonna be some dead shareholders falling all over the place soon enough. Equity topping processes of this magnitude take ample time in direct contrast to that of commodities, which end in parabolic fits of fear (ahem, sound familiar dead NYMEX traders? listen up gold/ silver diehards without any protection) and we have just been through this crap a year ago into July of '08, cmon people ... oil at $14x/ 170 futures ... rice shortages, hyperinflation coming soon, any of this ring a bell ?? Equity bottoms come in flashes (daily High Wave candlestick, 3/6/09, on the S&P 500) and this topping process has been in the works for over 2 months now, just running in place, slowly inching ahead as it became more and more structurally unstable. If closed right now , the ES daily would register as a High Wave candlestick pattern, signifying an important underlying change within the dynamic of price action; but there is a lot of time left in this shortened session for market markets to massage us back away from such an ominous plot that is only 519K contracts deep at 05:05. Back to trading, we'll post a basic update this evening.
Thanks Fibo, reading you helps me forget for a while about the infinidollar market pumpers who never sleep.
WTF! I am seeing some positive indexes just hours after sinking past 7 week lows???
BTW, what exactly do you mean by "listen up gold/ silver diehards without any protection". Maybe expecting a hard crash in gold?
One does not know what to do or think...
Thanks Fib.
...doncha just love the smell of Primary wave 3 (circle) in the morning !
are you calling P3?
thanks for the kind words deadhead & gatopeich ... too soon too confirm especially on such low volume but yes, this is the type of kickoff behavior that ya'd typically see; need a solid 2-4 full sessions to give even the slightest confirmation of it but yeah, we're leaning a bit anal-ytically. We'll put out a quick summary with updated charts after the bell and a much needed nap. and as always, thanks for taking the time to read our thoughts; they are just our humble opinions and as per Mark Douglas: 'anything can happen!!' been a vicious buy program of 20/40 second pulsed buy flashes 2 ticks underneath the bid for the last 2/3 hours working 'magic' underneath with the 1 min closes of the NYSE TICK here; a really, really despicable and beyond blatant show by a market maker's basic buy algo today, just really lame in operation. first valid sell here on the 2 minute right now confirmed 11:13 .. watch the 1 min ES ride the 13 and 55 EMAs up today ... 1/2 min ADX n DMI giving first valid sells in a while here last few minutes but there is still a large bid underneath being supported 2 tick below by an algo ... sellers just showing up right now. have a great day and a profitable session everyone !
thank you for responding Fib....enjoy your insights.
i have learned over many years that technicals often trump fundamentals!
From Nakheel's info memo (XS0277553052)
pg. 36: “Investors should note, however, that the Government of Dubai does not guarantee any indebtedness or any other liability of Dubai World.” -Sweeeeet
Then there's this gem: "Dubai World is not required to, does not and has no current intention in the future to publish consolidated or non-consolidated audited financial statements under UAE "law.
Now I see why Barclays recommended going long this value play.
If you were Dubai World and looked around at all the lending banks and how they are backstopped by taxpayers....
Wouldn't you seek to restructure your debt and get a few US/UK taxpayers to pay for a few of your projects??
No worries, it's covered.
Oh and the way they are bouncing the futures back up, looks like GS and the PPT are back in force pumping the pumps, so it will be just a mere blip and Hopium will rule even stronger... oh look the market went up on the back of this news, so must be a bull market for definite
CNBC Worldwide has already been pumping this morning and I expect it to follow thru to the US.
They had a "analyst" on who was actually trying to make a case that Dubai defaulting was ultimately good for the world economy.
One of the hosts was also talking of the markets getting past the Dubai "news" and back to world economy fundamentals in a week.
The European markets are now mixed barely up or barely down and the dollar is pulling back from it's gains already.
The game goes on .......
Nationalize the banks.
They did the same thing in January 2008. The Societe Generale news was released when the US Markets were closed. When they did open the next day they jacked the futures up with our money. They're evil. The Satanic Federal Reserve is a Den of Filthy Thieves.
Agreed.
Satan has his hands deeply entrenched in those mortal beings that pray to money and not God.
Watching the "market" makes me wonder why so many suckers were born?
"Off balance sheet liabilities" - there's the rub.
Now when everyone was saying that those dastardly Chinese were reneging on the derivative contracts that had been honestly agreed with those nice western banks, I was thinking if people knew what the contracts were, they would side with the Chinese. If the various quasi-sovereign entities did one tenth of the crap I saw them being offered, the losses will be horrendous.
I suspect the Abu Dhabi's come in with the full intention of fixing the mess for the sake of their honor, but when they saw that all the lending banks had offered money in exchange for juicy derivatives, which were toxic as hell and very underwater, so they decided the behavior of the banks had been utterly dishonorable and they decided to get tough.
Seriously, the banks need to be taught a lesson - they have blown up the financial system and to date, they had been covered for their losses and then made more.
The first substantial collapse in the CRE bubble. After christmas watch for all the stores to close. Black friday is a cruel joke this year. Go buy a cheap LCD at walmart, and then in a month try to figure out how to feed, heat, or protect yourself with it.
All that money tied up in walgreens and Boston markets etc...
that no one shops at.
If they did one tenth of the crap I saw them being offered, the off balance losses will be horrendous. I suspect the Abu Dhabi authorities were stunned when they saw the deals that had been done as sweeteners to loan capacity so decided to throw a curve ball at the banks.
There may also be some credit contingent derivatives that they can walk away from now they have defaulted...
A Black-Swan-for-Brown-Turkey-on-Black-Friday?? It just can't be!
This snippet came from Financial Times in early 2007, we all know how long it took for things to unravel. How long will it take this time??
The Short View: Credit market shocks
By Tony Tassell
Published: February 13 2007 19:52 | Last updated: February 13 2007 19:52
Investors have long speculated about what might happen if turmoil erupted in the credit markets. Now they have one tiny test case to ponder.
In recent days, the cost of insuring against default on sub-prime US mortgages, via derivatives, has exploded, amid a spate of downbeat news from the sector. Indeed, the implied spread on the riskiest, BBB– rated tranche of the ABX index – an instrument which protects investors against default risk on sub-prime mortgage-backed securities – has doubled to around 1,000 basis points in just three weeks.
What's the story on this posted on Denninger's site: http://www.secretofoz.com/ Author posits The Wizard of OZ story (Dot originally had silver slippers, it seems) was about monetary systems, following the gold-coated tungsten brick road, and debt enslavement
What i thought was also interesting was Amazon's purported ban of the book.
great name, Ned Zeppelin: it is a 3+ hour documentary on the ills of monetary systems/ fiat currency/ gold/ blah blah blah out just in time to scream hyperinflation when there is ZERO inflation so as to top tick gold/ silver et al. They are employing a quote from I believe Friedman and this latest Amazon ban of their film as a great marketing ploy. have yet to see it, just read this last night from one of the comment sections here on ZH.
The film's title and the 'Wizard of Oz' itself are each in explicit reference to Williams Jennings Bryan and his "cross of gold" speech from the 1896 DNC convention. This is humorous (as silver screams neg divergence and extreme non-confirmation of gold) because Bryan was THE proponent of the silver standard and THE enemy of the gold standard; he famously stumped across the country for about three years between the repeal of the Sherman Silver Act of 1893, which effectively crashed the silver markets, and his actual 'cross of gold' speech in 1896, which is a masterful oratory somewhere between the impassioned 'populism' of Karl Marx and the silver tongue of Marla Singer. If you haven't read it, please do; a true classic of Americana.
Interesting is right.
Now that Amazon has removed the video (Economic Edge has the history of what looks like a video ban), Nathan’s Economic Edge gives a link where Bill Still’s The Secret of Oz can be purchased for a “Special Introductory Price $17.95!” With this blurb:
The Secret of Oz is enjoying good success at film festivals around the world.
It won the Silver Sierra award at the Yosemite Film Festival and the Award of Merit at the Accolade Competition La Jolla, California. The film premiered on Oct. 2 at the Louisville International Film Festival, one of a handful of Oscar-qualifying film festivals. It was just made an Official Selection of the two big Orlando film festivals, INDIEFEST, and the Orlando Film Festival. These are big festivals that finally bring monetary reform into the national spotlight.
The yellow brick, the emerald city of Oz, even Dorothy’s silver slippers (changed to ruby slippers for the movie version) were powerful symbols of author L. Frank Baum’s belief that the people – not the big banks -- should control the quantity of a nation’s money.
The bottom line: No More National Debt. All our money is created out of debt. But nations don't have to borrow money from banks. Sovereign nations can create their own money -- debt free -- just as Abraham Lincoln did to win the Civil War. This is the secret that’s been hidden from us for over 100 years.
For anyone interested in more on the history of the Wizard of Oz, IMO The Web of Debt Blog about tells it all. Here’s an excerpt from Ellen Brown’s What’s the Wizard of Oz got to do with money reform?
“Frank Baum wrote his Wizard of Oz books at the turn of the century, when the money question was still a hotly debated issue. His Oz books were an allegory for our tyrannical money system. Example: In the 1890s, the private bankers did not yet own all the media sources. Therefore everyone was concerned with how money should be created. Should the government create it with full accountability to the people — or should private banks create it in secret? After the Jekyl Island meeting in 1910, the latter option won. World War I and the Great Depression sealed the private banks’ power. We have been enslaved ever since. (Those who think “enslaved” is an exaggeration do not understand the game.)
“William Jennings Bryan, the Populist candidate for President in 1896 and again in 1900, mounted the last serious challenge to the private bankers. In The Wonderful Wizard of Oz (1900) Frank Baum used the cowardly lion to represent William Jennings Bryan. In the 1900 book (not the 1939 movie) the Lion finally proves he is the King of Beasts by decapitating a giant spider that terrorizes everyone in the forest. The giant spider was the Morgan/Rockefeller banking cartel, which William Jennings Bryan opposed.
“The scarecrow represented farmers, who did not understand how the bankers were screwing them. The tin man represented industrial laborers who were desperate for lubricant (currency). Dorothy is the average American girl. The yellow brick road was the gold standard, which led to the Emerald City (Washington or, alternately, New York’s financial district). The wizard is the U.S. President, who in the book is terrified of the evil witches. The “wicked witch of the east” was the eastern financial establishment. The “wicked witch of the west” was the western bankers (at that time ensconced in Ohio). The “good witch of the north” was the people. The munchkins were the generally enslaved, who live in terror of the evil witches (the bankers). And so on..."
http://webofdebt.wordpress.com/2007/09/11/whats-the-wizard-of-oz-got-to-...
This has been well known and fleshed out for quite a while.
The whole story is a populist allegory.
The wizard of "Oz"
What do we measure PM's in?
Ounces, or .oz
The emerald city=green= Washington DC (some say Wall Street)
Scarecrow=US farmers
Lion = WJ Bryan
Tin-Man=Labor of the Northeast Industries
Munchkins= Sheeple
Wicked Witches = Bankers
I've always found this very interesting. Especially since everyone just thinks it's a fanciful children's story.
He claims the solution to the debt problem is to stop issuing debt, print up enough money to pay of existing debts and then go full reserve. And inflation won't be an issue for this solution either.
http://economicedge.blogspot.com/2009/11/still-report.html
Europe regains composure
Bear Trap?
bull trap?
bull crap?
Good morning Sandstorm....
http://www.youtube.com/watch?v=eobfR27Ti-w
+10, moral up!
US market go down? especially as Far East collapses... not a hope in hell, god is on the case
Why am I getting the sense that this is another spook campaign from Wall Street crooks? This looks like another golden opportunity to shake out weak investors so investment banks make more money. In a week or even less, this will all blow over. It's another classic Wall Street shakedown. Keep buying the dips.
Agreed. Somebody taught an HFT how to draw heads and shoulders and other tricks. Now they're driving us like a herd of meek cattle.
+100
From one classic look to another. I still prefer your mask tho
downgrades should follow, so the lack of will tell you the shills are working holidays.
What if you threw a crisis and no one came?
For starters, as of right now, there has been no credit event - maturity is on 12/14. Maybe the sheikh will cough up the dough. Maybe he is greenmailing abu dabi - they sure invested a lot. Second, a negotiated resettlement, maybe with an equity kicker, is a very real possibility. Third, this is not a new problem, but a manifestation of an old problem, namely the real estate was way overpriced in 2006-7.
It doen't necessarily have to be wall street shakedown. It could be just a knee jerk reaction to a possible default that few saw coming.
(However, a lot of financial armagedon is nigh types are likely to be upset.)
PPT to the rescue, at us close today they will have taken the dollar down, and stock markets end the day in the green.
This just stupid
Japan must be getting really really fed up with this strong dollar policy
there is no such thing in the financial world as "off balance"...
I hope to see a very good buying opertunity the next 4 weeks in banks :)
turn that effin banner with noise off!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
stop whining, and do it yourself.
https://addons.mozilla.org/en-US/firefox/addon/1865
Let me guess. Six months from now we will find that Goldman Sachs was shorting the hell out of Abu Dhabi debt and that AIG was selling them protection.
i cant believe it. gold...down? oil...down?? stocks...down???
it cant be!!
everyone who has been denying the dollar carry being the major part of gold/silver/commodities move in the last months now has exact proof that it is the case.
oh, but european investor confidence is at pre-lehman levels, so thats pretty awesome.
This problem had been around since 2008, Abu Dhabi bailed Dubai out and told the banksters off and warned the ECB and Fed to get their banks to behave or ADIA would start dumping their holdings of US and European shares. That kept the gentle banksters quiet for a year. Lately someone among the creditors apparently played hardball, perhaps those nasty folks needed cash urgently as they expect problems in 2010. I doubt this episode would last longer than the weekend without some "good news" before next Monday morning. Bottom line, buy the dip folks!
PS: futures already up smartly, this is sickening!
Poetry.
Who is watching the FED and Treasury for another secret bailout backed by you know who... The American Taxpayers.
Isn't deregulated predatory capitalism grand?
You Bet Your Life - Dubai and Derivative Explosion
http://inpoints.blogspot.com/2009/11/you-bet-your-life-dubai-and-derivat...
I seem to remember that an amendment to one of the financial reform acts in the House allowed bankers more control of setting accounting rules. Does anyone else remember? If so what the heck was it?
Time to demand that the amendment is stricken?
Bureau of Lies, Inc.:
"Initial claims for state unemployment benefits slid to a seasonally adjusted 466,000 in the week ended Nov. 21, from a revised 501,000 in the prior week, the Labor Department said. "
"Seasonal adjustments turned a smaller-than-anticipated unadjusted rise in claims into a drop, a Labor Department economist said."
Uh. Hello. A rise is a drop. Up is down. Left is right. Get it straight.
"We've been teaching those climate 'experts' a thing or two about manipulating numbers, as I am sure you've heard in the news. It couldn't be easier. The secret is that if the data doesn't support your message, for god's sake don't print that, just 'adjust' the data, then repeat your message once or twice again to make sure the media gets the story straight, " the Labor Department economist said. "Just remember to talk s-l-o-w-l-y because these media types, and the public in general, aren't too bright and they might get it wrong if you don't repeat yourself. For instance, if you get a question about the 'adjustments,' use big words like 'methodology' and 'birth-death models' and I guarantee the interview will end quickly. Really, a five year old can do it, " concluded the economist.
WOW ... the buy volume on the 3min es12-09 .....
The British wiped out 7,000 plus safety deposity boxes in London last month. This is mainly Iranian money as is the dubai debt. The iranians have been withdrawing ferociously for 2 years now. There are always repercussions.172
This government is so pathetic. Look at them pump it up with our money. All to try to get the market positive so they'll spend more this weekend. They are looking increasingly desperate. Look at them pump the bank stocks. Nationalize those bottomless pits.
Anybody buying after sovereign default risk just got added to the table is mentally insane. They may turn out to be about as bright as those buying at the end 2007 because the FED would cut rates.
The end game is sovereign defaults & currency crises.
It may not happen today as it's a holiday of sorts, but there must a real chance people close books for the end of the year, and that will like mean risk assets are sold and dollars bought.
agreed, anybody buying this "dip" deserves to be a bag holder
Gordon Brown thinks the Dubai situation is "containable". But then again he sold the queens gold for less than $300.
Next to Ben Stein, a "good" indicator
Gordon Brown doesn't know his arse from his elbow. remember, he was the guy that took credit for 'ending boom and bust'...
Well I guess doesn't matter what anybody thinks anymore. Dow to close up today!
I never thought I would see the day, where the first default ever on an Islamic bond is upon us, and people rushed to buy stocks. Just staggering. Perhaps the UK should default too, if the going is this good lol!
News just released, world to end in 4 hours...
Dow soars 500,000 points
Well if it ends up today, it proves there is banksters are backstopped by the peoples money as much as it takes and they can never lose
It's starting to have the smell of another setup to me. No doubt 85 Broad et al have trousered the cash.
All far east falls like a stone and the US surges back up? This has a huge stench to it, and after today if it closed up I am not going to bother with markets any more because the US is completely rigged
Fourthly, Abu Dhabi may also have its own financial problems.
ha ha ha
no
Pump Gold, Dump Gold, Buy Dollars
If it ends up today, I'll spit on the face of anyone that claims financial markets
--are not manipulated
--are forward-looking
--have anything to with fundamentals of the economy
--are useful in the first place.
I will use all these charts from yesterday and today in next week's lectures as examples of sickening robbery..
remember to supply context with your arguments too. (i.e. extended long weekend, distractions galore, super-low volume easily manipulated, etc.)
*Fed now has Art Cashin on "speed dial."
*JPM, BAC consider yanking credit lines to Dubai. Definitely request more capital to be used as collateral. (As per corporate standard operating procedures and "process".)
*Dubai goes to Citi for credit lines. Pandit says fuck it, no problem. We are backed by the US taxpayer. Issues credit lines with lower interest and less collateral than JPM or BAC require. Proceeds to send email to internal employees to try and unload more MBS to the Fed to "cover ass" on balance sheet and cash flow statement. Allows him to say he is trying his best in these turbulent and uncertain times to meet capital requirements and still "capture business". Then relaxes with family and gets drunk today. Could give a shit about anyone.
* Dubai now back by US taxpayer.
*GS considers implications to commercial paper and any security with ties to dubai and trades accordingly.
What is commercial paper doing today?
Dubai has some $12 billion in debt to pay off next year and they can't even make $3 billion. Most of their $80 billion is coming due in the next three years. Abu Dhabi and the Arab Monetary Fund would go broke trying to bail them out without some serious debt reduction. It seems unlikely they would ask for this measure unless they already talked about a bailout. So it seems a logical conclusion that there will be no bailout. Most likely investors are not selling as bad because they anticipate one. If none comes then Monday could be very bad. Let's not even get into the potential disaster arising should Dubai not get their stay of debt payments and default.