This page has been archived and commenting is disabled.
Nash Equilibrium Fail: Ireland Wants Senior Bondholder Haircuts
And so the great decade + old eurozone game theory project of Europe is about to come crashing down. Following Europe's decision to leave Ireland out in the cold, due to the country's ongoing unwillingness to pander with unilateral concessions to the global banking syndicate, the Emerald Isle has apparently decided to call the EU's bluff. Reuters reports: "Ireland's government wants to impose losses on some senior bondholders in Irish lenders to reduce the burden on taxpayers from a prolonged banking crisis, a senior minister said on Sunday...Analysts widely expect the government to impose losses on senior
bondholders in nationalized lenders Anglo Irish Bank and Irish
Nationwide because they have sold their deposits and are being wound
down. Hitting any unsecured unguaranteed senior bonds in Bank of
Ireland and Allied Irish Banks (AIB), which amount to over 11 billion
euros, would be more controversial." Yet most controversial would be the fact that the Eurozone is now unable to control its wayward son, which seems set on actually following the will of its people than that of the plutocrats. And just like Tunisia set a precedent to the MENA region with an act many thought was unthinkable, should Ireland follow through with this near-revolutionary act of a debt impairing chain-reaction, most other countries are set to follow suit, leading not only to the inevitable end of the one currency block, expected for so long by many euroskeptics, but yet another US taxpayer funded bailout, as was revealed on Thursday of last week, when we observed the upcoming "threat to the international monetary system" as predicted by the IMF.
More from Reuters:
Dublin wants to impose losses on banks' senior unsecured bonds not covered by a state guarantee, which currently amount to over 16 billion euros, as part of a new deal with the European Union, the European Central Bank (ECB) and the International Monetary Fund (IMF).
"A sustainable and comprehensive solution for Irish banking that involves recapitalization but also involves an element of burden-sharing ... That is certainly the outcome that the government is looking for," Simon Coveney, minister for agriculture, told state broadcaster RTE.
Under an EU-IMF bailout agreed late last year Ireland can impose losses on banks' junior debt, but the ECB is opposed to treating senior bondholders, which are ranked on a par with depositors, in the same fashion for fear of a contagion risk.
Ireland's new government, elected in February, has said the state cannot afford the current EU-IMF bailout deal and European finance ministers will decide on what sort of concessions they can offer Dublin in coming weeks.
They are awaiting the results of fresh stress tests on Ireland's banks, expected to show a capital hole of around 25 billion euros, on March 31 before deciding on any new deal.
This latest batch of bad news comes just in time for Merkel to suffer her latest political crushing defeat in today's Baden-Wuerttemberg election:
Chancellor Angela Merkel's party on Sunday faced a possible loss of power in a state that has been a conservative stronghold for six decades — as German voters appeared increasingly skeptical about her stance on nuclear plants.
Eight million Germans were voting in a closely watched race in the wealthy western state of Baden-Wuerttemberg, where recent polls suggest Merkel's Christian Democrats are poised to lose by a narrow margin in an election clouded by Japan's nuclear crisis. The issue could help the anti-nuclear opposition Greens win their first-ever state governorship.
The chancellor's abrupt about-face decision to order a temporary shut down of seven of the country's older reactors has raised doubts about her credibility in a country that remembers well Ukraine's 1986 Chernobyl disaster that spewed radiation across Europe.
The Baden-Wuerttemberg election is viewed as the most important of Germany's seven state ballots this year. The prosperous southwestern region around Stuttgart — home to carmakers Daimler AG, Porsche SE or software house SAP AG — is the only state where the same center-right coalition that governs Germany has to face state voters.
For Merkel's coalition partner, the Free Democrats, the stakes in the state are equally high. The party is fighting for its survival, with polls putting them around 5 percent — the minimum threshold to enter parliament.
We can't wait for the EURUSD reaction at 4 pm today on this double whammy of rather horrible eurocurrency news.
»
- 15798 reads
- Printer-friendly version
- Send to friend
- advertisements -
No counterparty risk based assets bitchez!
That's what I want to know ....the effect on gold & silver. To the moon because of fiat volatility or to the floor because of debt consolidation, reduction and repudiation.
fiat always fails, always. We now have first hand experience on the why...smart money will continue the move into PM's
This is to the new Irish leaders and the Irish people. My congratulations for showing off your brass bollocks.
You already threw out your landlords once before.
Time to do it again. Defauly default default. Start over and be lean and mean. The whole world is with you. Show Greece, Portugal and Spain how it's done.
Italy should be able to get out of it selling factory pre-rusted Fiats to the Americans.
I'll have you know the Fiat 500 is one fine auto. It's fun to drive. We've enjoyed the hell out it. Germans like 'em too. http://www.motortrend.com/roadtests/hatchbacks/112_0907_2009_fiat_500_abarth_review/photo_01.html
Go pick on a Mini Cooper, a Kaa or Smart Car. Don't be bad mouthing my Fiat!
1979, Fix It Again Tony, 2000 Spider here... Love it with passion like a work of art...
Thanks for the easy math question.....
Mine was factory pre-rusted. Mind you that was sometime ago. I also owned an Autobianchi made by Fiat. Rust all over popping the paint out in 18 months or so.
Hulk, I think the smart money has already jumped ship. We must be dealing with semi-enlightened money now. It is getting difficult to afford. I wonder how long until it is impossible?
Indeed, fiat always fails…temptation being what it is and human beings being what they are.
As for smart money fleeing into PMs, if that’s true (and I don’t doubt that it is), then it begs the question, out of what are they fleeing? Whatever they are fleeing, the assets being sold are the ones that will be deflating—a process BB and his bankster cronies are desperately trying to thwart.
So the Nash reference in the article's title is quite apt; in that, should Ireland become the first (or second if one counts Iceland), to defect from par payment, the debt deflation tsunami will, in all likelihood, become ustoppable.
If the smartest money with the deepest pockets have moved into PM's then dosn't game theory infer that they are now looking for ways to crash the fiat system and make their PM investments all the more valuable ?
Feels like a tug of war between two giants at this juncture...
How does EUR/USD play out is what I'm curious about.
Does Ben eat the European shit-sandwich, or does Brussels?
What I don't get in this whole ridiculous "crisis" is why bondholder haircuts are off limits - when bankrupting the entire government is just fine.
I understand that the default chains are a real problem but it has been 3 years since this situation has gone critical - by now the central banks should have a better picture of how to unwind these bonds as painlessly as possible.
About GOD DAM TIME. I just hope England follows down the same route.
Can't wait to see how my short positions and Vix calls open up monday. Happy days.
Then again, the dow will probably open up 100 points. Lack of common sense at the moment is at a record high.
OK, say that Ireland imposes haircuts on senior bond holders, cant the ECB simply buy the bonds from the Irish Banks? Basically what the FED did over here, cash for MBS trash. So long as central banks have power to issue currency, it matters not who makes the laws.
Abracadabra, Presto Chango...
Your trash is now CASH!!!
Lend it wisely.
at the moment, I can't imagine why they would not do this. Nothing placates the masses like free notional money. The spectre of alternate currency just won't die for some reason.
IMF will do it - clearly this is what they started preparing for last week.
And by IMF, I mean Ben. Added bonus, he can be one additional layer removed from scrutiny and oversight.
The ECB has run out of road. €130bn of road.
So, they get the ICB (Irish Central Bank) to lend €50bn.
Now the ICB never had that money (not did the ECB).
So the Irish banks have, say, €200bn of Central Bank money that never existed before the crisis.
And the head of the ICB says that it is "manageable".
I think he's a gobshite.
Guess this means S&P futures will be up 100+ by morning, right? Can't wait until the BTFD robots have their "Harry Mudd" moment.
That's what I was thinking while reading this....just another irrational excuse for a rally.
Headline: Investors "shrug off" Irish situation....... yadda yadda BS.
http://www.youtube.com/watch?v=I5QwKEwo4Bc
hahahaha...nice link
Yup. Endgame is good fodder, but it only begins with ending the bankers. This just takes us one step closer in the awareness of sheeple-ville.
it appears that the natural laws of hard money are raising their ugly heads.
But, but Leo said things would be fine just the other day...
behind every curve head up his arse Leo, that Leo?
channeling Yahoo verbatim. attribution? or is that just Reuters?
Reuters reports: "....
bond holder haircuts? now we are back to square one, no?
I've got a machete I can lend them for them, there haircut. Cuts square and true
It seems that also these dumfucks Schwaben as the aboriginies of Baden-Wuertemberg are called had enough of this corrupt little asshat Mappus.
This gangster has sold out this land.
Die fucker and take Merkel thisd pig with you.
Sadly if this happens the followers will be the same shithats with another label.
Same as in the USA.
Im goin to vomit a bit.
Begorrah,de boys might just be wakin' up in the Emerald oil...me bullion will be shoining!
"German Chancellor Angela Merkel's coalition is set to lose the key state of Baden-Wuerttemberg after six decades in power, exit polls suggest." - http://www.bbc.co.uk/news/world-europe-12876083
"Angie, Angie, when will those clouds all disappear?
Angie, Angie, where will it lead us from here?
With no loving in our souls and no money in our coats
You can't say we're satisfied
But Angie, Angie, you can't say we never tried..."
- M. Jagger/K. Richards
http://www.sing365.com/music/lyric.nsf/angie-lyrics-the-rolling-stones/3fa18305ae83b1d34825689a001afdda
I'd be happy if Angie just went with the clouds and disappeared.
They might want to keep Angie now that she's figured out the game.
If bondholders are "on par" with depositors, then they were receiving the same interest rate on their money, right? I know, dumb question..
Imagine....gasp....what will happen when senior bond holders, are forced to take a haircut, and the world doesn't implode. Perhaps, this will lead to.....shudder.....risk starting to be properly priced (a girl can dream) and an element of TBTF, starting to recede.
Alas one will believe this outcome when she sees it. Because as we all know, once this gate is open, once the MAD thesis is debunked, the citizens of states where austerity is being imposed, are going to start DEMANDING that banks/senior bondholder start sharing the pain.
Summer of 1968, redux in 2011?
Oh! Impossible! in that case, you know, 9 trillion jobs would get lost (just in Europe - worldwide many more!) plus no pensions for nobody, the usual government blabla when sb. tries to restrain banks/big investors.
Well stated lizzy, but at what cost does this level of risk price in?
Mutually Assured Derivatives? JBETF (Just Big Enough...)?
If you think senior bondholders getting scalped is funny, wait until it's the señor bondholders in Floyd's chair.
http://www.youtube.com/watch?v=Tk4i7OKWSJw
http://www.youtube.com/watch?v=uMLNOLpS4k8
Much as I agree with the sentiment... We have both in the UK and EU, a lender of last resort which removes the need to price risk.
Standard bankruptcy procedure, it is a no brainer that this must happen at some point. Admittedly it is a much more complex problem than e.g. the S&L crisis in the 1980's - but behind the scenes every government in the world should have been preparing for this.
I will be heartbroken if the euro fails, its a peach to trade.
there will be other 'peaches' to trade
while the so-called 'Eurosceptics' in Britain like MEP Danial Hannan and Old Tory Norman Tebbit are having a field day knocking the Euro and EU both forget the problems of the undemocratic EU are the same problems of Govt everywhere. Similarly they knock the Euro but Sterling is no better having actually lost chunks against the Euro since its inception which gives the lie to Tebbits insistence a currency needs a central bank not 16
Westminster stinks as much as Brussels which stinks as much as Washington and Berlin and the same goes for any currency with a centralised control structure as Hannans and Tebbits beloved Sterling will shortly find out
But at least Irish politicians are shaving a little off the blocks of treason and Keynsianism with these latest (small) moves. Great from these 'Professional' politicians who when they went full-time and were paid professional wages many moons ago was supposed to bring in a new better age of Govt (proved to be BS as usual)
The age of 'professional' politicians has brought us to bankruptcy in every country, truly brilliant! ...and none of them will vote for Christmas (ie. an end to Govt) or to free the currency to the free market ... this Irish move is a baby step, there's a long, long way to go yet
Shave and a haircut...
2 gigabits.
...as adjusted for "no" inflation.
The state of Baden-Württemberg was formed in 1952, and held by the FDP for one year, until the elections of 1953, when the CDU won control which they have retained ever since. They won 44% of the votes in the last election in 2006.
According to exit polls, the Green Party looks set to win 25% of the votes compared to the 11% they won last time.
Big changes are afoot in the heart of Europe, with even the traditionally conservative and affluent growing tired of the extend and pretend. I speak with many people in Germany and the mood, especially towards Portugal, is there is no point pretending they can pay their debts any more, and now might be as good a time as any to stop the lunacy. The boys at the Fed aren't going to be happy...
Funny you mention mood. It seems the collective global mood has swung to the negative. It's been turning for a while now, but it appears to be accelerating. The banksters can only play their games until the collective mood is so pessimistic that a critical mass of the population feels the current situation is hopeless, then there will be civil unrest and true demand for change. Many parts of the world have reached that point, and it's spreading like a nasty rumor. The US is still percolating, but things are clearly heating up. At some point, there will be a loss of confidence in the market (or in the central banks' ability to prop up the ridiculous rally), and I wouldn't want to be long on anything when that happens.
We have to be close to that point, don't we? Don't we?
What I sense among the Germans is a growing realization that the "wealth" have gone and it is only an illusion. What I mean is they either accept haircuts and crystallize losses, or they have the wealth diluted via inflation, which makes activity going forward far harder owing to the increased cost of everything that matters. The "experts", tell us the system is complicated and fragile, so to take the losses leads to a far worse outcome. The problem is the "experts" are all protecting their paymasters in the banking system and are becoming discredited. We need a workable resolution that doesn't merely defer the crisis until a later date when the private banking syndicate has managed to transfer all the risk to the public sector. It will be nasty and painful but it will mean the losses are borne by those who made the bad investments, not those who said I want nothing to do with this lunacy.
The People will NOT be satisfied until the pain is evenly and fairly distributed whtehr you are in Wisconsin or in Ireland...or in Bahrain or in Syria....imho.
Isn't that the unofficial definition of socialism?
Equal misery for all.
One last (one can hope) gasp for a very tired, disingenuous, corporatist argument?
Not a fan of crony capitalism either. The problem with a welfare state is that it must be large. Any large government grows corrupt and is filled with cronyism.
Socialism is just the path the progressives have chosen to bankrupt and destroy the western nations.
Whatever, it is un-fixable . It is near impossible to get more votes with a message of personal responsibility, when the other side is selling, "Hey, y'all, free shit!!!"
I'm reading _When Money Dies_ about Weinmar Republic. It seems clear that we are headed down the same direction. Instead of Germany we have the World, and instead of France we have Bond Holders who are demanding their promised returns for their MBS's. The only way to pay these off is with QE in the US and I think soon QE in the european banks. Of course, to keep these bond holders in the lifestyle in which they are accustomed, it will require constant printing of new dollars because the world economy is now so complex and socialized that the drag is greater than the productive elements in it. So the more we print to bail out, the more inflation will grab hold and the greater still the drag.
Am I wrong?
No, you are not wrong - great book, isn't it. What strikes me as parallels is the way big business thinks it's fantastic and everyone who plays in the stock market merely counts their numerical gains, without appreciating how debased the currency is becoming
There's a great paragraph at the end of the introduction.
"This is I believe a moral tale. It goes far to prove the revolutionary axiom that if you wish to destroy a nation you must first corrupt its currency. Thus must sound money be the first bastion of a society's defence."
The current argument is a sound banking system is more important than a sound currency, and I believe this to be a deliberate lie propagated in the interests of self-preservation.
+10
Might I suggest TPTB would, if they condescended to actually argue rather than coerce, say that the APPEARANCE of a sound banking system in the eyes of the sheeple is the most important thing. Whether it's sound, they don't care, because they can make it sound by counterfeiting enough new fiatscos to do the job, or so they would say.
"The current argument is a sound banking system is more important than a sound currency, and I believe this to be a deliberate lie propagated in the interests of self-preservation."
Isn't the one a means : sound banking system.
The other the objective : a sound currency.
Not that a sound banking system be a sufficient condition to a sound currency, but a necessary prerequisite.
you're probably not wrong. That's the bad news. The good news is that you are reading ZH. Because of what you've read here, you are either holding physical PM or considering that vehicle. It's not to late to get prepared for this potential fiat hurricane. silver @ $50 is up 30% or so from where we are today. If the ECB starts impaired asset purchases, get into PM fast and buy yourself a t-shirt.
http://www.amazon.com/Its-Like-Donkey-Kong-T-Shirt/dp/B001M57DD4
I've been on the fence about whether I should increase my physical PM holdings. I understand that the proliferation of fiat worldwide should cause PMs to do well - maybe spectacularly. On the other hand, they got crushed in 2008 - early 2009.
So do you take the position that the dollar won't benefit from a crash, as it did in 2008, because in a crash the flight to safety will be primarily to PMs and perhaps Swiss franc, etc? The days of the dollar as a safe haven are over and PMs would do well under either a severe inflationary or deflationary scenario?
Yes, PMs crashed in 2008 . . . . and yet, where are those very same PMs today?
You may see a correction again, but this time the dip buyers will be all over that opportunity, and the snapback to new highs will be much quicker this time.
So dip buyers are a new phenomenon? That's fucking hilariousl Dip buyers weren't around in 2008, huh? Just because it's new to you, doesn't mean it's new to everyone.
That paper money in your wallet is going to ZERO. Don't worry about a dip in PM's. If you buy and hold physical silver, you win. Period.
Care to put a time frame on paper money going to zero, JLee? I mean, that's kind of important, right? Because if the dollar is not doomed (it's not, yet, for many reasons), and PM's take a correction in a debt deflation scenario, wouldn't it be smarter to hold on to your paper for now?
I love all the metalheads who say "buy now buy now buy now" without looking at history any further back than a year or two. Timing is the key. Anyone who makes these claims without stating a time frame is about as useful as tits on a bull.
perfectly described, world wide weinmar, WWW...
There is a dynamic that many people miss when comparing our present day situation with 1920s Germany. They had just lost a war. The World was a more equal place amongst the leading powers and therefore more unstable. Think about the US MIC and who else in the World right now can seriously threaten that. Hence the dollar reserve status or hegemony. ALl linked to oil. Germany , Argentina , Zimbabwe : all very different to present day US.
And yes its a great book.
What's Dublin street slang for 'I'd like to pay my debt by allowing you to suck my balls'?
Bollocks to you?
I will have a go...
Away to fuck with ye. Go on, get the fuck out of here. And while you are at it, you can lick the back of my balls. Ya English loving bastards!
Ah, yes. I can almost see the Irish eyes a smilin'.
deleted
The only thing these bankers understand is fraud and force, so when the fraud is completely exposed, they'll turn to force. This won't be like an episode of Murder She Wrote, where Jessica solves they case and they all stand around at the end recounting how she did it, with the culprit say "Oh, Jessica, you got me. Well I guess I'd better come with the sherrif.". No, they play for keeps.
That's why, as much as I'd like to see the shenannigans with the markets, the silver and gold, and all the rest exposed, these bankers will simply resort to calling in favors from the politicians. That means simply ignoring or changing the rules again. They mean to keep this game going right up until the end. This will end in violence or all out war. It's the only logical conclusion. The rule of law has failed globally. What else is there?
.
Sadly, Dr. P, you are right.
However, it would be well for the banksters to remember that force and violence are double-edged blades. They can just as easily cut the wielder to ribbons. That is why the answer for those opposed to the banksters' shenanigans is not to counter their violence w/still more violence (as good as that might feel at the moment--and I am not implying, Dr P, that you advocated that...just a general observation); rather, the answer as I see it is simply to stop playing their game insofar as one is able.
For example, use cash where possible. Yes, I know FRNs (or euros, etc.) are a bankster tool too, but there's less vig, or rake off on each transaction as against, say, a credit card transaction. And speaking of credit cards, when/if you receive a solicitation in the mail, send back the application (blank of course) in the postpaid envelope. Yes, I realize that by itself it's not much, but still they'll have to pay 30 or 40 cents per BRM letter received, and pay staff to open, process, and dispose of the blank paper you sent.
These are just 2 simple and small examples in themselves. Other posters on ZH have listed other things one can do to reduce one's financial footprint, and to reduce the take of the banksters.
The key though, as I see it, is non-violence plus small changes multiplied. It's the only way I can see of us making it out of this thing w/our humanity in tact...
The battle of Pork Chop Hill!
It was only a matter of time before the Irish woke up and realized that losing sovereignty to the continent was going to occur. I am sure being the only colony within Europe is fresh in their minds. F*ck the banksters!
Message to the Portugese, Greece and Spanish dudes: YOU HAVE A GO!
ENGAGE OPERATION BARBERSHOP!!
I guess that will have to do...Operation Barbarossa was already taken... shit, but it rolls off the tongue so nicely.
The Portuguese problem is government debt and spending. You are not suggesting the socialists refuse to pay the money they spent on their friends, are you?
So, moral hazard comes full circle...
aren't there some civilians that need to be protected in Dublin now?? SHould we be seeing a few bombers over the golf courses?
Yes Mr. Barber, TAKE OFF THE SCALP BUT GO EASY ON THE SIDES THERE!!
BETTER TAKE OUT MR. VISA AND ORDER SOME MORE PM'S THIS SUNDAY!! THEY ARE GOING TO ROCKET TOMORROW!!
I'm waiting for the typical smash on options expiration monday, then I hope to jump on the bottom and ride it up. one of these days the smash won't come, JPM will fail.
In October this year we'll see people burning Euro's to stay warm.
I've got solar panels, I'll be fine :)
And the Japanese radiation will give us all that glowing feeling by that time!
I hear one investment banker can last for up to three hours.
yes but they smell real bad once their fat asses start to melt.
Ireland is following Iceland's lead, telling the banksters "it's your problem". Last I checked, Iceland seems to be doing just fine:
http://www.icenews.is/index.php/2011/03/27/icelandic-krona-exchange-rates-reflect-recovery-of-national-economy/
The Irish government has some nerve! Interesting that they are willing to bait the EU in this way. Who will win? I think the Irish. The Europeans are more bark than bite and that is why Ireland is calling their bluff.
I see retirement accounts getting raided or required to invest in government bonds as the next step in kicking the can down the road.
The US trial balloon for this effort was quickly ID'd. Put a nice acronym around it and use words that instill a feeling of protection, playing into the hearts of everyone who got destroyed in the 401K sector. GRA's or "Guaranteed Retirement Accounts". AKA Government shit out of money, need some stat!
http://abcnews.go.com/Business/PersonalFinance/story?id=6122417&page=1
Keep an eye out for olde Teresa Ghilarducci.
Does anyone know why some of the "losses on banks' senior unsecured bonds (is) not covered by a state guarantee" and why other senior unsecured bonds were not given a state guarantee? Who were the people in the government that (presumably) authorized these "guarantees", and why? If the bankers guaranteed them without authorization by the government, why aren't they being prosecuted?
EURUSD
Target 1.367.
http://99ercharts.blogspot.com/2011/03/eurusd_26.html
http://www.zerohedge.com/forum/99er-charts-0
Which means the dollar index rises in response to Euro falling and PM's priced in dollars fall. Just in time for PM options to expire and physical to be delivered before the end of the month. Blythe must have sucked a lot of cock to make this happen. BTFD!!
So I just went deep -EUR/USD.
So much info/disinfo being floated the last 72 hours. I stick with TD for now that the $$ is going down, but I'm willing to play a short float up for the $$ while the Euro is getting properly fucked. That's what they get for being such obvious fucking clowns.
So fucking amusing that the $$ dominates any other fiat for now.
This (hopefully) will be fun!
FUCKING: A perverse term used to disparage.
Pull an Iceland and let all the banksters go bust. I wish they would put them in the stocks in a public square and let us have a go at them. I would piss in their faces and force them to drink my piss. Hell I might even take a #2 and grind it into their faces. Then I would take a dull rusty jacknife and carve off pieces of their faces to feed to my dog.
so, you work for Citi??
Dude, get a grip.
Well of course he'd have to get a grip. Do you think they would just stand there and let him do that?
The "stocks" in question: https://secure.wikimedia.org/wikipedia/en/wiki/File:RenfairePillory.jpg
Seems a perfectly reasonable and measured response, given the current situation... where do I sign up?
Have you ever thought of working for a collection agency? I think they'd open up a spot for ya.
(duplicate deleted)
+ 1 I like your style
Why don't you just cut off their nuts and feed them to a pack of wild dogs, and then make them eat dogshit? That seems to be a more appropriate punishment.
woot i look forward to holidaying in the new ireland and drinking some 0.50c pints of guinness.
The Irish are not pissed enough just yet; some one needs to have a false flag war and bomb the Guiness Brewery leaving an old SS insignia at the scene; then watch the fireworks!
Fantastic, well done Ireland at last listening to the people and not the banksters.
Several banks attacked with paint and stones on the 500,000 march in the UK yesterday
This is actually great news. Let the EUR fall. EU export will further improve. And Trichet's helicopters can remain grounded.
Euro will not fall because of Ireland. Merkel will piss back on them for pissing on the German banks. The real domino is Spain. That leads to Italy/France. Lets see if the US HF have the cojones to take on that one...Benocide doesn't help if the USD slides too far it makes the climb back all the more difficult.... Carry trade has its limits...over leveraged derivative dumps can cut both ways if Benocide changes sides suddenly like he did on the recent Yen spike...the HF took a beating then...
Where does it end and where does it begin
Not to cause offense or anything, but What The Fuck? "near-revolutionary"? It's exactly what is supposed to happen. It's why stocks & bonds give higher returns. They are higher risk. What should have happened the first time is that the bondholders should have taken a haircut. Depositors too for that matter.
The alternative is free money. It's welfare for banks. Socialisation of the risks, failures and utter, utter incompetence of the "elite" masters of the universe. The fucking sanctimonious hypocrites need a haircut with a chainsaw.
Ayyye. An' not jes th' ha-ir un ther heads, be gosh.
A word from the Irish street:
http://www.youtube.com/watch?v=koY6kXhQDQo
Reporter: "What's the story?"
Irish man: "Do you really want to know?"
Oh, yeah...
Every banker on the planet should see this... gets better every time I see it!
well they need to rape the rating agencies for every penny they have, not that it will get the bond holders all their money back , but all along the chain people and companies need to be fucked over good. for actually allowing it all to happen.
Mr. Murphy: Top o' the morning, Mrs. Clancy.
Mrs. Clancy: Top o' the morning to you Mr Murphy. and where are you rushing to this fine day? You seem upset. Come in now and have a nice cup of tea.
Mr. Murphy: No time for tea, Mrs Clancy. I need to give the Irish bondholders in Germany and France a haircut.
Mrs. Clancy: Oh really now. What makes you think you can cut the hair of a bondholder.
Mr. Murphy: Well, I think cutting the bondholders hair will be easy with this chain-saw. Argh! Hi di-diddly-idle-um, diddly-doodle-idle-um,diddly-doo-ri-diddlum-deh.
Mrs. Clancy: Well now, I won't be keeping you. Don't forget to trim the bondholders ear hair and nose hair.
Mr. Murphy: Consider it done, Mrs Clancy.
deleted
....so have a good drown,as you go down,all alone,dragged down by the stone.......
A piece of advise to the senior bondholder who are gonna be haircuted: jump you fuckers!
Haircut?
Just lop off the head and be done with it... you listening Jamie... Lloyd?
Those two should be going to jail for a very long time,especially the bald one!!!
EUR/USD printing 60 pips lower in early New Zealand trading couple this with hawkish Fed comments and you have the makings of a dollar rally. Remains to be seen wht happens with PM's but come on do you think JP Morgue and Blythe are going to lose? The herd is too strong on the dollar fall and you all should know that "markets" find equilibrium.
Totally agree, since there are no bears on gold/silver except Blythe, bulls crowd can expect a bloodbath. It's too good to be missed. The bitch will have her day.
Ladies and gentleman's in red corner heavy weight champion Blyyyyyyythe Maaaaassters.
She will go the way of Mika Tyson witha tatoo of the dollar on her face.
Ireland, Yes. When will we have the guts to puke our banksters out and toss them on the garbage heap where they belong with Mr. Paulson, aka GS. on top.
Do not care which direction the dollar takes later, not worried about the price of gold this month or next for I strongly feel it will be much higher in 2011, 2012, 2013, etc.
Have no idea which direction, short term the market is going so will stay out. And, add to miners on dips and sell a % on rips if fortunate. Just have no desire to gamble when the Inmates along with the Head Inmate with the beard are in charge.
Just keep chanting, Obama, The Bernank, Geithner, The Morgue and Giant Squid along with "banksters" and tell me you are going to sell your gold, silver and miners.
I think Not.
Bernanke ,King , Trichet and whatever Japanese screw up has the job of running their CB right now , cant print fast enough to stop the inevitable deflation in asset prices. Of course , they can hyper-print and hyperinflate overnight , but i dont think these people are suicidal. This is an ongoing rear-guard action. It always has been.
Its going to be fun to watch as the critical mass of the investment community work this out.
"what do you mean , im not going back par on my investment!!"
The knock on effects will be widescale margin selling that will dwarf qe 3, 4 , 5 through 10. We dont have the demographics or cheap oil to do anything to prevent it. The dye was cast well before Bernanke took the joystick.
You gotta love the Irish they have their priorities straight - Always live downhill from the pub making the stumble home much easier.
Only the goats and the women live uphill...
"The knock on effects will be widescale margin selling that will dwarf qe 3, 4 , 5 through 10. We dont have the demographics or cheap oil to do anything to prevent it." I'm interested in what you are saying, I'm not real good at reading between the lines. Can you clarify what scenario you envision? How do margin calls relate to QE 3 through 10. Are you implying that stock market drops triggered by margin calls will trigger each new round of QE? How demograpics or cheap oil play in the scenario? I'm just trying to learn.
Hi tom , in a nutshell , i believe a repeat of the 2008 liquidations caused by fear of a global unwind in derivative contracts and debt defaults is likely. QE is just a means to put the brakes on any unwind , making it more orderly you could say. Similar to Japan post bubble.
Japans ageing population were also happy to forego capital gains for guaranteed income in retirement. They fund the Japanase govns budget deficit in the same way i see Americans funding the US in the near future. The advantage Japan had was a successful export market that had demand from a growing World and globalization. Think about the low cost of oil and how we could transport goods around the World cheaply in the 90s and early 2000s. Globalization , along with credit , imho peaked in 2007-8. The oscillating decline in global gdp will be inversely linked to the ever higher price of oil , with each tipping point taking the World into forced margin-selling to create cash flow to fund interest obligations. Every time this happens , there will be more that default , like a game of last man standing. These are deflationary waves.
The optimists point to being able to "inflate away our debts" but for that dynamic to happen we need to grow. Really grow , not the fake illusionary growth the govns are fostering right now. Real growth requires population growth and a growth in money supply. It also requires manageable input costs , ie commodities.
In the West , this is not happening , and in the developing World , high inflation and a system too corrupt and imbalanced to take over from the West , means the global growth engine is dead.
Western governments are heavily reliant on immigration and money printing to keep nominal GDP positive. The problem is , commodity inflation is starting to hinder that ability to grow when you realize we are a 70% driven consumer economy this is critical. We are caught between a rock and a hard place. A reordering of the economy is likely but in the short to medium term this again will cause deflationary shocks as consumer disappear from the economy.
And going back to your question on margin selling (to make cash flow to fund obligations) : yes , each wave down in the market will be met with money printing until eventually the wave of defaults is so large , the system is allowed to reset. Each dollar of debt the US govn print , results in 18c of GDP. Somewhere on the web is a very interesting chart about how we have passed the ability to create real growth due to the magnitude of outstanding debt. This debt is simply going to be defaulted on however. At that point , once the bas assets have been marked to zero , the system can then organically grow again (but the whole concept of peak oil is going to be very influential in that process)
Subprime borrowers were the start of the private sector default waterfall.
Iceland was the start of the sovereign wave.
equity_momo -Thank you for the explanation, from which I learned a lot. Thanks, teacher, I can see clearly now!
I hope there are some Irish posters here. I cannot begin to advise how proud I am of the citizens of that country if they follow through and blow the bastards out of the hole. Nothing would make me happier then to have the Irish say "Fire in the Hole". We here in America are a bunch of candy ass wimps with no backbone or guts. I pray that will change moving forward.
Makes me sick to read about this country, our politicians, who are mostly worthless and the continued destruction of our middle class.
And still not one, NOT ONE of the Banksters, Wall Street "Professionals" or Govt. employees indicted, and incarcerated. NOT FREAKING ONE!!!
I disagree. I think if our Nazi govt. even mentions confiscating our IRA or other accounts, then, you will see the "March of Millions" and gun shops sell out. NO, even we spineless swine have our limits. That would cause violence. Do not think that will happen, although they are that stupid to attempt it.
Swine when did the clueless masses watching AI and DWTS switch from sheeple to swine?
Some of you do not get it. What makes you think we are the ones buying all this gold. As the Euro disintegrates, ya think Europeans might say, "I don't want the dollar, Swiss Franc way to expensive, I will buy some gold and silver. This is truly a global economy as regards the purchase of gold. Oh yeah, India, China, Russia, right, dumb to keep increasing their gold holdings. MEA, yup, local currency there just fne.
Japan, they learned from Bernank to print and since they are so advanced they can print faster than us. Think they want our dollars.
Lets see how much gold drops on the open and how soon before it stabilizes. And no gold bears, last time I checked, 2 investors outside of ZH owned gold, one other has physical and I bet you 90% of the population does not even know how to buy physical. No bears, Ha. That is a good one. Give me a $50.00 drop and the next order gets executed from my gold dealer.
"Hawkish comments from the fed"..LOLOLOL
What do you expect them to say. Now, you want them to tell the truth and how the economy is really moving forward. They may not announce QE3 right away but I promise they will not stop monetizing our debt for even a day. If they do, I bet the DOW drops 1,000 pts. in 2 days.
The economy getting better, self sustaining. Man, I want what they are smoking.
Have a question for the proponents of only holding physical PM's. Tell me what is wrong with leveraging PM's on the spot market. Are you not capturing the price move of PM's the same way as a physical holder, albeit with more volatility and risk given the leverage. Seems to me if leverage 500 ounces of silver on the spot market at $35 and the price rises to $175 I make a profit of 70 K in fiat. Which if at that time we still have a market I buy 400 ounces of silver. If I can't buy 400 ounces of silver at that time we don't have a market and everybody is fucked. 400 ounces of physical would cost me 14,000 at $35 and my increase in value at $175 would be 56,000 which is the same value as buying a leveraged spot contract. Please someone tell me that I'm wrong.
This may be another Bear Sterns moment. Unmasking the true nature of money and unwinding the derivatives it is tied to, is going to deliver a tumultuous blow to stability in this time. The money changers and royal lackeys are either about to be exposed or a major war is going to be engineered to cover it.
Blythe needs to cover her shorts at a lower price so she can BTFD sheeple. The excuse will be Ireland and everyone had to sell to cover margin calls in other markets.
EUR/USD gaps down to 1.4045 on open.
The continuing saga of micro imperatives exerting .. hehe
Riskless risk - THE oxymoron of the age .. running right behind are sophisticated investor and free markets
Time to return to spring break
Now T-Pap and that Portugal guy know what to do. Hint: screw the banksters.
Besides when some morons lent Greece a few juicy billions who has the problem? Hint: banksters. Don't be a pussy T-Pap, screw them all!
/ES
Update.
http://99ercharts.blogspot.com/2011/03/es_27.html
no comment yet
It is high time the too big to fail institutions and investors realise that stupid and risky investments made by them will not be gauranteed by the taxpayers only because the rule makers and politicians are working for the benefit of the rich.
The taxpayer funded bailouts for banks lead to lower standard of living for all the citizens of a country except for the beneficiaries of the bail outs. The poor people in any country live hand to mouth and do not contribute to tax revenues. The others who earn their living by small businesses or salaries pay taxes at a much higher rate than the rich individuals or big businesses. This is due to the loopholes in the taxation system which enable them to declare maximum profits in countries which have the least tax rates. So effectively in the long run the governments route the money collected as taxes from the middle class of people to the banks so that the bankers can enjoy enormous bonuses. We are in times of privatizing the profits and socializing losses for those who are well connected to the governments and the law makers.
http://www.marketoracle.co.uk/Article24581.html