Rosenberg: "Greece Is The Same Coalmine Canary As Thailand Was To LTCM And As New Century Was To Lehman"

Tyler Durden's picture

David Rosenberg is out with some very fitting analogies of the current sovereign crisis. If he is proven prescient, which we have no doubt he will, the Greek near-default will have massive repercussions to the entire developed world when all is said and done."In my opinion, Greece is the same canary in the coal mine that Thailand was for emerging Asia in 1997, which ultimately led to the Russian debt default and demise of LTCM; the same canary in the coal mine that New Century Financial in early 2007 proved to be in terms of being a leading indicator for the likes of Bear Stearns and Lehman. So, the most dangerous thing to do now is to view Greece as a one-off crisis that will be contained." Furthermore, as he makes all too clear, if a $1 trillion bailout can only buy 400 points in teh Dow, Europe, aside from all the other fundamentals which confirm the same, is doomed, and even the ever-optimistic market now realizes it. Lastly, should Europe pursue the required austerity measures, the hit to European GDP will be massive, and is certainly not being priced in European stocks, but certainly not in US stocks, whose primary export market is about to disappear.

From today's Breakfast with Dave.

Well, I think the turbulent global events of the past few weeks underscore the reason why I have maintained a cautious investment approach for the past year, notwithstanding the massive recovery in risk assets we saw from the March 2009 lows, which from my lens bore a huge resemblance to the bungee jump in the market back in 1930. In fact, at one point two weeks ago, at the highs, the stock market had already achieved, in barely more than a year, what took five years to accomplish in the 2002 to 2007 bull market, and at least that market wasn’t being fuelled by unprecedented government intervention in the economy and incursion into the capital markets.

The dramatic government stimulus was global in nature, and this was the primary prop behind the rally in equities over the past year and change, and the message coming out of Greece, and not just Greece but many other governments in the European Union and across the globe, is that governments are probing the outer limits of their deficit finance capacities. History does indeed show that it is quite common to see sovereign default risks follow on the heels of a global banking crisis, which was the story for 2007 and 2008; it took a respite in 2009 and we are now in a new chapter of this prolonged debt deleveraging story. These cycles of balance sheet repair, alternating between the private and public sector, typically lasts 6 to 7 years. We are barely into year three, and what is extremely important in this roller coaster ride is to focus on capital preservation strategies that minimize the volatility in the portfolio, which is one reason why I have favoured long-short income and equity strategies.

In my opinion, Greece is the same canary in the coal mine that Thailand was for emerging Asia in 1997, which ultimately led to the Russian debt default and demise of LTCM; the same canary in the coal mine that New Century Financial in early 2007 proved to be in terms of being a leading indicator for the likes of Bear Stearns and Lehman. So, the most dangerous thing to do now is to view Greece as a one-off crisis that will be contained. Even with this new and aggressive EU-IMF financing arrangement that has managed to trigger a wild short covering rally yesterday, the risks are still high that the contagion spreads to countries like Portugal, Spain, Italy and even the U.K., which has already received some warnings from the major rating agencies and is gripped with political gridlock in the aftermath of last week’s uncertain election results.

The problem of there being far too much debt on balance sheets globally has not gone away and in many cases has become worse, and the ability to service these debts especially in countries that have weak economic structures like Greece, Portugal and Spain has become seriously impaired. It remains to be seen how Greece and the other problem countries in the euro area will manage to cut their deficits without, at the same time, controlling their monetary policy and their currency, which of course we were able to do here in Canada during the 1990s but with the help of a 30% currency devaluation.

Speaking of Canada, the downdraft in our market and our dollar shows once again that we can be doing everything right, and in terms of fiscal policy we still look good on a relative basis. However, being a small open economy sensitive to commodity prices, this is one of those times where sudden shifts in global economic sentiment can hit us disproportionately.

Even before this latest leg in the European financial crisis, China was already tightening monetary policy aggressively to lean against what appears to be a property bubble in various urban centers. One has to consider what the outlook is for the global economy in general, and near-term prospects for the resource sector in particular, when the Shanghai equity index is down more than 20% from the nearby highs; yet something else to add to the concern list.

Recall that we headed into this latest round of turmoil with the equity markets priced for a return to peak earnings as early as next year, bullish sentiment on the stock market and institutional investor cash ratios at levels we last saw in late 2007 when the market was just rolling off its highs, and measures of volatility at extremely low levels, the VIX index was a mere 15 as an example, a sign of widespread complacency. It is at times like that, when all the good news is priced in and then some, and the exact opposite of what was happening at the lows just over a year ago, that the markets are most susceptible to a pullback.

With the benefit of hindsight, it is clear that the time to start to wade into the risk asset pool was a year ago after a 60% plunge in equities. However, 80% later on the upside, it’s time to get more defensive and less cyclical with a keen eye towards taking advantage of this crisis if it presents opportunities in the equity market as the panic in the corporate bond market presented to us back in early 2009. I, for one, am looking forward to having my temptation level tested if this market heads back into undervalued or even fair-value terrain, which it only managed to achieve for a few months early last year.

While the coincident economic indicators, such as employment, have improved in recent months, many of the leading indicators have begun to roll over. In fact, these indicators are pointing towards a discernible slowing in economic and earnings growth in the second half of the year and into 2011 when we will see the stimulus shift to significant fiscal restraint in both Canada and the U.S., and the lagged impact of the Chinese policy tightening.

In addition, while the periphery of Europe received a financial lifeline package, the conditions for accessing the funds will require massive fiscal tightening and it will be interesting to see how countries like Spain, let alone Greece, can cut spending and raise taxes at a time when the unemployment rate is at a sky-high 20%. Remember, 20% of the global economy is going to be slowing down going forward, the question is by how much and this in turn will impact North American exports. On top of that, the equity and debt cost of capital, which had been on a declining path for much of the past year and has very supportive of risk appetite, is now going on the opposite path. This is not necessarily a double-dip recession scenario, but I would not rule it out.

What’s important from an investor standpoint is that the uncertainty surrounding the macro outlook is much wider now than it was before. Over the near term, there is still more downside but the main message is that one should be prepared to take advantage of the springtime selling by using cash and near-cash as part of a tactical asset allocation strategy because one of the best way to make money in this tumultuous environment is not to lose it, but to have it ready to put to use once things get really cheap.

At the same time, we are confronting a deflationary shock at a time when most measured rates of underlying inflation in most parts of the world, especially the U.S. are already extremely low, barely 1%, and in such an environment, having an income theme as a core component of the portfolio makes a whole lot of sense.

As for the GDP impact on Europe now that all the dirty laundry is out int he open, here is why it will get very ugly:

We did some in-depth analysis on how the economies of the “PIIGS” (Portugal, Italy, Ireland, Greece and Spain) countries (and the rest of Europe) would fare if deficit-to-GDP ratios were to revert back to the Maastricht criteria of 3%. The adjustment will be painful for Europe in general, slicing off about 1% GDP growth annually over the next three years, and very painful for the PIIGS specifically. If these countries’ fiscal ratios were return to 3%, Ireland would see four percentage points (ppts) shaved off nominal GDP annually over the next three years, Greece 3.5ppts, Spain 2.8ppts, Portugal 2.2ppts and 0.8ppt for Italy.

It would not be a picnic for the rest of Europe, where many countries were running deficits greater than 3% of GDP in 2009. We estimate that fiscal cuts will shave about 1.5ppts off France’s nominal growth, 1.0ppt for Belgium, and 0.8ppt for the Netherlands. Austria and Germany would only have to endure 0.2ppt and 0.1ppt lower GDP growth, respectively, to bring their ratios back in line with targets. Finland is the only country with a GDP deficit under 3% (using 2009 data). Note that the starting point for our analysis was 2009 — the adjustment could be more painful as deficit-to-GDP ratios look to have deteriorated further in 2010.

Lastly, it appears that even Rosie has had it with the unbearable hypocrisy of our "leaders."

Maybe it’s all about false pride. The need to counter-attack those who would dare to attack the Euro. How interesting was it to see the sharpness of the political rhetoric over the weekend from the European political elite. Please, fund our lifestyle, Mr. Market, but don’t hold us to our commitments:

“ ... a battle of the politicians against the markets. I am determined to win” (German Chancellor Angela Merkel).

“... unfounded off-the-wall suggestions and speculation” (EC President Jose Manuel Barroso).

“... confront speculators mercilessly ... know once and for all what lies in store for them” (French Present Nicolas Zarkozy).

It is a sad deflationary reality when a trillion dollars can only buy you 400 points on the Dow. What can the politicos do for an encore?

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LoneStarHog's picture

What can the politicos do for an encore?  Simple, put a damn gun in their mouths and pull the trigger, finally doing the entire world a great service!!!!!

Joe Davola's picture

I suspect somewhere on the internet the Bud Dwyer video exists.

Cognitive Dissonance's picture

Todd Harrison has been talking for the past few years about how the Fed's last bullet will be turned inward. The Fed and the politicos are all puppets manipulated by "higher" powers, so to speak.

Behind every successful politicians is not his or her spouse but TPTB.

AnonymousMonetarist's picture

Todd Harrison is a pretty cool fella.

Had a chance to meet him once, he's exactly the type of guy his 'writing' persona suggests he is.



Al Huxley's picture

Not to worry, I heard on Bloomberg this morning that the US recovery is taking on a life of its own, independent of the government money.  Apparently the median estimate of 61 economists was that US consumption would grow at a rate of 3%, so looks like everybody can just relax, ignore this little blip in the market and get back to the important business of consuming.

Mako's picture

I have been saying it since Bear Stearns, when there are millions at stake you have a problem, when 10s or 100s of billions are at stake the world has a problem

The Bear Stearn shareholders should have held their ground for $50 a share.  Greece currently holds all the cards, they should take the money and reverse all the measures they put in place last week.   There is no incentive for a country to cut, Greece-Spain-Portugal-Italy should ramp up spending.

What happened on Sunday is absolutely nothing, except they were able to trick people into thinking it was something.

Cursive's picture

Thailand?  LTCM?  New Century?  That's some bad canary company.

DeweyLeon's picture

Would this analogy then make the price of gold the gripping hand around the canary's throat?

SWRichmond's picture

...and as Iceland was to UK.

TwoJacks's picture

equity holders are going to read this and say, 'so what!', ltcm was a one-month event, so was the asain contagion. only the bear stearns problem turned out to be a big deal and that was because of housing in general. the buying will continue because the relentless bullish cheerleaders have a bigger army than zero hedge and other bearish sites.  shameful but true

Steaming_Wookie_Doo's picture

Forget 2012-- it's happening now.

trav7777's picture

Austerity measures????  WTF is that?

Austerity measures = paying the INTEREST.  To the bankers.  For the right to have money to use.

Money is a public utility and should be treated as thus.  Repudiate, one and all.  Unite against rent-seekers.

TaggartGalt's picture


Trav, what you point out is the crux of the matter!

Banking is a utility; banks should be nationalized.

Dread Pirate Roberts's picture

If you think investor-owned banks are bad, you should see banks owned by the government.  Be careful what you wish for.  Limit size and leverage and let the bad banks fail.  Separate investment banks.  Make them partnerships.  Bring transparency to the hedgies.  Not perfect, but the best we can do.

Psquared's picture

Outright money printing is the next stop. Otherwise the credit markets seize up. I am surprised that has not happened yet.

AnonymousMonetarist's picture

Do we blame the umbrella for the rain?

Do we blame the parka for the snow?

Do we blame the roof and the walls for the storm?

Well if one is an advocate and sycophant of the ex-theory, randomwalking, a pristine and inviolate thesis that has been disproven this last century to the tune of a gazillion-squared, I guess one does indict the forenamed suspects for their obvious culpability.

In the WSJ, lead right section C, the pablum narrative to end all pablum narratives, the silliest, most inane, and flat-out stupid article that these eyes have witnessed in a long long time.

'Did a Big Bet Help Trigger 'Black Swan' Stock Swoon' is the title.. the randomwalkers' version of 'And how long sir have you beaten your wife?'

Universa Investments, a fund that bets to win on discontinuous market movements, where Nicholas Taleb is an advisor, and Benoit Mandelbrot is considered to be a visionary (a sentiment also shared by your humble blogger)... is being blamed for the 'flash crash'!

You have to be f&%$*&g kiddin' me!

The article details how Universa made a big bet, a whoppin' $7.5 million for 50,000 options, that would have paid off about $4 billion should the S&P 500 stock index fall to 800 in June. Admitting that the trade was not 'out of character' for the fund and that 'on any other day' the option contracts 'might have briefly hurt stock prices' the Wall Street Journal then lays out in a breathless array, conclusive evidence, in an attempt to brand Universa as the most likely culprit in a crash that all credible models insist should have never happened.

'The trade may have played a key role', 'traders on the other side of the transaction' led to 'selling to offset some of the risk', then, as the market fell 'those declines are likely to have forced even more hedging ' creating a 'tsunami', a 'tidal wave of selling into a market already on the edge' and 'a blast of orders' causing exchanges to be 'clogged', and causing individual stocks to 'collapse'.

'The working theory among traders and others (others??) involved in the exchange meltdown is that the "Black Swan" -linked fund may have contributed to a Black Swan moment, a rare, unforeseen event that can have devastating consequences.'

Pay no attention folks that the working theory that all our blessed mathematical models are based on emphatically states that the rare and unforeseen can be foreseen to never occur.

And so if it pleases the court (of public opinion) we shall cast the accused into the waters and if she floats she is clearly a witch... may God have mercy on her soul.

Or one can make another argument. Hours before the panic began, selling volume was unusually heavy. The selling of stocks was at its highest since the day the market reopened after the Sept 11 terror attacks. The Universa trade along with likely dozen of other trades across the market, led to a cascade of selling in the futures markets. As the trading volume soared, data systems across the stock market began to get clogged. With the high frequency funds either selling or pulling out of the market, Wall Street brokerage firms pulling back and the NYSE stock exchange temporarily halting trading on some stocks, offers to buy stocks vanished from underneath the market.

'Universa alone couldn't have caused the market meltdown", said Mark Spitznagel, Universa's founder. "We had reached a critical point in the market, and it was poised to collapse.'

Well that's a very convincing counter-argument but here's the thing... I am quoting from the same article.

Edward R. Murrow is convulsing in his tomb.

So why wasn't the headline 'Ex-theory fails again. Universa profits from discontinous market movement'?

Well aside from the obvious reason, one might note from reading between the lines that Barclays most certainly falls under the auspices of the aforementioned 'others' and in part, or perhaps in whole, the enabler for this hatchet job. Universa placed their order on Barclays trading desks, Barclays was selling hard, and a market data feed at Barclays that delivers data on "buy" and "sell" orders went down, although a backup data system purportedly went 'immediately online'. Although Barclays disingenuously 'declined to comment' for the article, their head of electronic trading is cited once and the bank is named seven other times in this missive, suggesting someone over there was squawking and deflecting.

The sentence in this trash worth considering is the brief citation to Taleb's fame referencing his thesis that 'unlikely events in the financial markets are far more likely than most investors believe.'

If quantum theory is correct there is an alternate plane of reality where their Wall Street Journal would expand upon this assertion in the following manner.

Randomwalkin's not pinin'! It's passed on! This theory is no more! It has ceased to be! It's expired and gone to meet 'is maker! 'It's a stiff! Bereft of life, it rests in peace! If you hadn't nailed it to the masses it'd be pushing up the daisies! It's metabolic processes are now 'istory! It's off the twig! It's kicked the bucket, it's shuffled off 'is mortal coil, run down the curtain and joined the bleedin' choir invisible!! THIS IS AN EX-THEORY!!'

Natural law is based upon a "fractioning" of a larger structure into smaller structures that have not only the features of the larger structure but if scaled up will look identical to the larger structure. Mandelbrot showed this scalability by graphing long-term financial data that appeared to be discontinuous on logarithmic paper revealing a fractal relationship in markets.

Per Benoit: 'Price changes are not independent of each other.My heresy is a different, fractal kind of statistical relationship, a "long memory." Why this should be is not certain; but one can speculate. Whatever the explanation, we can confirm the phenomenon exists- and it contradicts the random-walk model. Contrary to orthodoxy, price changes are very far from following the bell curve. Such theory predicts that index swings of more than 7 percent should come once every 300,000 years; in fact, the twentieth century saw forty-eight such days.(Over 50 now!) Truly, a calamitous era that insists on flaunting all predictions. Or perhaps, our assumptions are wrong.'

Mandelbrot discerned that markets exhibit a wild trait of abrupt change or discontinuity. This hierarchy of turbulence, a pattern that scales up and down with time, he describes as the Noah Effect - catastrophic, but transient. This Noah Effect is seen in the market's discontinuity : this is the pillar of fractal geometry.

The market's second wild trait - almost-cycles- he describes as prefigured in the story of the prophetic dreams of Joseph, a biblical tale of pattern recognition or long-term dependence. The Joseph effect is the influence of a long-term memory through which the past continues to influence the present.

Per Benoit: ' But how exactly do these two effects- Noah and Joseph, dependence and discontinuity - interact in markets? Answer: At least one market mechanism I identified naturally leads to the other. Suppose, for instance, that you have an "almost-trend" emerging in a stock price: a few weeks, say, in which a stock price rises seven days out of ten. The pattern must eventually break up, of course; otherwise, it would be a real trend that you could bet on continuing a few weeks, and hope to make some real money. But when the "almost-trend" finally does break, it can do so rapidly. A sudden lurch downward, perhaps. A discontinuity. Or, in the terms of the Biblical metaphor, a Noah Effect produced by Joseph-style dependence.

For some real-world examples, think about investment bubbles. They seem calamitous -but they happen all the time. Conventional economics tells us they are aberrations, "irrational" deviations from the norm, caused by a rapacious speculator, mass greed, or some other unpleasant factor. But under certain circumstances they can be entirely rational and flow from the entwined effects of long-term dependence and discontinuity.

The distribution of price changes in a financial market scales. Given that event X has happened, what are the odds that Y will happen next? With financial prices, scaling means that the odds of a massive price movement given a large one are akin to those of a large movement given a merely sizable one. Such is the confusion of scaling. It makes decisions difficult, prediction perilous, and bubbles a certainty.'

Salinger's picture

do you have a link to the above essay?

CD's picture

The WSJ article that 'explains it all':

I especially liked the nonchalant reasoning given for the instantaneous snapback after the dive.

Cognitive Dissonance's picture

Thirty one paragraphs explaining the drop. One paragraph to explain the rapid recovery. Proof from the world's financial newspaper of record that markets should only go up. And that when they do go up, for any reason explained or unexplained, it's not news.

Move along, nothing to see here.

Cognitive Dissonance's picture

".....the pablum narrative to end all pablum narratives, the silliest, most inane, and flat-out stupid article that these eyes have witnessed in a long long time."

As usual, a quality presentation by AM.

Your weary eyes will be seeing this type of MSM denial of reality more often as the crazy train pulls further into the station. Any reality has two choices. Be cognizant of all other realities or be in total denial of all other realities. Our realty has chosen/is practicing the latter path as its basis of support and it's becoming very unstable.

Most people don't even understand the concept of what an outlier really is, let alone ever consider the possibility that our entire way of life, our very existence as human beings here and now, is so far outside the norm with regard to "nature" and the "natural" world that it's continuation defies the laws of the universe. And as you quoted above, once the trend breaks, it breaks rather quickly.

Before you pass from this reality AM consider setting up the paperwork to allow the donation of your wonderful brain to science for further study. I like how you think and I would like to see how you're wired. I just hope they don't lose your gray matter like they did Einsteins. :>)

AnonymousMonetarist's picture

Mandelbrot was (and is) an economic Einstein no doubt...

stickyfingers's picture

Key words or phrases in MSM: 'different this time', 'well contained', or 'you just don't get it'.

AnAnonymous's picture

Reminded me of Troma classics "Class of nuke'em high"

There is no danger, governor. We have the situation well in hand.


Divided States of America's picture

What a friggin joke this country is. We have states with deficit yet we are bailing out foreign countries (via IMF). Shouldnt we be solving out our own problems first before we help our neighbors? I guess the rich socialistic F%CK$ are helping out each other first, whether they are in another country. And we powerless middle class keep taking it up the ass.

snowball777's picture

Depends how profligate your neighbors in the US happen to be.

Hulk's picture

States are next. Ca equivalent to Greece, Austerity not in the vocabulary. Simply stunning to watch Ca....

Salinger's picture

From the NY Times

Debt Aid Package for Europe Took Nudge From Washington

PARIS — President Obama had just flown into Hampton, Va., Sunday morning to deliver a commencement address. But before he donned his silky academic robes, he was on the phone with Chancellor Angela Merkel of Germany, offering urgent advice — and some not so subtle prodding — that Europe needed to try something big.

(I still find it too coincidental that the German Finance Minister took ill just as the emergency Ecofin meeting was beginning)

AnAnonymous's picture

Causality maybe? The man might have endured a prolonged period of stress and thus might have grown more vulnerable to diseases.

A quote from the article:

In the process, the European Union, under crisis conditions, moved fitfully toward more centralization, toward a French vision of an economic government for the region. It is a role not totally unlike the one that the federal government in the United States played during the early stages of the financial crisis in 2008.



Ripped Chunk's picture

Deeper coal mine, no?  Much deeper I think.

Sisyphus's picture


Okay, I will say it before someone else does:


  • Who listens to him anymore...
  • Rosenberg has missed the entire rally from...
  • A broken clock is right twice....
  • That dude is a widow maker...
  • If you traded based on his missives, you would have ....
  • He is so fat that ...
  • We are in a bull market of a life time and he is a perma bear who...
  • 9 out 10 people on this website do not trade for a living. So you all suck and are christened as nincompoops.


snowball777's picture

First to fall over when the atmosphere
is less than perfect

Your sensibilities are shaken by the slightest defect
You live you life like a canary in a coalmine
You get so dizzy even walking in a straight line

You say you want to spend the winter in Firenza
You're so afraid to catch a dose of influenza
You live your life like a canary in a coalmine
You get so dizzy even walking in a straight line

Canary in a coalmine

Now if I tell you that you suffer from delusions
You pay your analyst to reach the same conclusions

You live your life like a canary in a coalmine
You get so dizzy even walking in a straight line

Canary in a coalmine

Oedipussy's picture

thx for that

when I was a teen, listening to this song by the Police, I thought it said "Canary in a Coma"

it's funny to think of it like that today as well

this was a good essay by Rosenberg

chancee's picture

I can't believe no one has made more of the news that the European bailout was practically forced upon the European Union by the Obama administration.  Not only did they basically twist their arm to have it done by the end of the weekend, they pushed for the 'shock and awe' approach (1 trillion).


To me this only highlights the fact that the Administration will stop at nothing to keep our stuck pig of a stock market elevated.  All so the mid-terms aren't a disaster, and all so Obama can get re-elected.  It's one thing to destroy the integrity of our own markets... but to now selfishly destroy markets and countries overseas, all at the behest of a misguided Fed Chairman and obsessed President?  Not good.

The article referencing Obama's tactics in this matter were discussed in the NYT yesterday. 

snowball777's picture trillion each business day for 26 weeks straight is...$130T.

JW n FL's picture

Obama? the Liberal Commie? and the Fed? Noooooooooo! how could they? Obama is a Commie and the Fed is, well the Fed.


What did it look like when they where togther? was it crazy, crazy? or what?


come on spill.. dish. what was it like when the Fed was with the Commie?




Mitchman's picture

My recollection is that the "shock amnd awe" nomenclature came from the second Iraq war and that in that war, the "shock and awe" campaign didn't "shock and awe" anyone.  So it is not surprising to see the same result the second time it was tried by essentially the same bunch of government hacks.

Robert J Moran's picture

"I see Dead Canaries"!

John McCloy's picture

Who said we are so passed ridiculous we cannot even get back to it with a bus? I am thinking the Spaceball 1 on ludicrous speed could not return us from this insanity. There comes a point where you cannot undo the debt created. It is as if they are purposely trying to become more systemically connected to force more Too Big Too Fail interconnection. We have definitively gone plaid.

JW n FL's picture

The idiots screwing us, treat us better than the mob would, FACT BITCHES!!!! and I offer as the most simple of truths, if the lights go out... you will give me your Gold and fucking all of it... or I will enjoy getting it out of you.


                      I love to hear the polite crowd talking about what will in fact happen if your Austerity measures are implemented. The un-winding of all of that debt that is backstopped by Federal dollars… the end, and I am all for it. You may call me King James… in the event that the lights go out… you in your house with your Remington(s) will never suffer such a fate… my your daughter looks tasty… you can take your wife with you, into the shallow grave…


                       All of the would be, wanna fucking be… intellectuals who can in fact frame a proper sentence and use spell check, often… discussing whether or not pulling the Federal backstops out of the Market Place, AUSTERITY will end badly… my favorite dumbass quote “ we can survive without Citi… we did before they got here… we will after they are gone!” Yayyyyy! Fucking mental midgets with spell check who belong to a book club hashing out reality.


                      I hope that you get your way, I hope Austerity measures are brought to bare… but know this, your soft underbellies will be in fact some of the first fed upon. Buy Gold Bitches!!!! I need more than I have and I am happy when the lights go out to confiscate yours for my own purposes! Lie to yourselves and tell yourselves you are safe. Tell yourselves that when the lights go out all will be well. Marshal Law? I hope your ties to the military community are better than average. Plainly, if you get your way… and Austerity measures are implemented the lights would go out… or more accurately the common fibers that allow for your protection now would be hurriedly severed, and if not me… then someone else would get you… BOO!


                     Does JP Morgan do God’s work buy controlling the prices of precious metals as it relates to the value of our Dollar? Yes! Sir!


                     When the Fed opens the International Swaps window will the Fed in fact be buying the currencies at their bottom or close there too? How long will Europe? be working for the Fed? To pay off simply the gains made in which ever PIIGS country you would like to talk about… once their currencies bounce… would we not own their hard work for free… damn exchange rates!

hp12c's picture

The law of diminishing returns: $1T=400 point pop

williambanzai7's picture


It is a good time to break out Minsky's Financial Instability Hypothesis and poner whether we have reached the "sovereign Minsky moment" (S&M).


Cognitive Dissonance's picture

It looks like the only thing the Euro is good for these days is it's strategic placement to cover up nipples. But is her's (nipple, not the Euro) a little high or is it me? Maybe I just don't know what "perky" is anymore. I must be getting old. 

sunnyside's picture

Everyone in the room who actually believes that Greece or any other European countries will actually implement and follow the required austerity measures please raise your hand.  Anyone?

sushi's picture

Question: If the ECB soaks up all the bad debt as collateral for further funding.


At the end of this tortous process the EU breaks apart into independent sovereign states.


Who is left holding the bag on all the assets held by bad bank ECB?