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Sovereign liquidity – Mike Whitney’s morning thoughts
Mike wrote to me earlier,
"Whoa! Have you seen this article? Sovereign liquidity, what lies beneath
"Am I misreading this or has Trichet pulled out the bazooka? My question: High ranking US officials from the Treasury flew to Spain yesterday. Do you/others think the Fed is on a euro bond spending spree to prevent a crash (because the Germans won't support EU--QE?) Never a dull moment, Mike"
Excerpt:
Here’s a perfect end to a week in which the ECB has apparently bashed peripheral bond markets into submission. Apparently.
Watch those bid-offer spreads.
We couldn’t quite believe this chart of the bid-offer spread on ten-year Spanish government bonds, made by Divyang Shah of IFR Markets, when we saw it. But it checks out, and is worrying (click to enlarge):
(Still not at the May 2010/Greek crisis nadir… yet.)
Source: Sovereign liquidity, what lies beneath, by Joseph Cotterill
http://ftalphaville.ft.com/blog/2010/12/03/426946/sovereign-liquidity-what-lies-beneath/
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It's sad--you're quibbling, freeting, because you got it wrong. You're dropping the ball because you're NOT GETTING IT. The fix is in for $70 trillion in bailouts. The question is, Why? And here--voila!--is the answer:
It's all hidden away in the secret, magic Table 4-A, which you will find by Googling the monthly labor report:
Department of Labor November employment
Table A-4. Employment status of the civilian population 25 years and over by educational attainment
And why, you are wondering, is this the only statistic power looks at? Because this is the official report of unemployment in the only social class which matters in America (read: the world): those with a Bachelors degree or higher.
They are only 1/3 of the labor force, but they get all the income, own all the houses, and cast all the votes. Euro and Chinese serfs slave for us--we like that.
The new policy is that there will no NO haircuits and NO defaults, only BAILOUTS, until the OFFICIAL unemployment rate in this class is 20%.
Now, of course, the official figure is a lie, right? Ok, double it. But it’s the OFFICIAL figure that matters to power.
And what is that official figure for November?
Merely 5.1%.
This is still an “all clear” to go full speed ahead with Mellonesque liquidation, i.e., looting via bailouts.
It will continue to be an “all clear” until the OFFICIAL figure is 20%. Not 19.9999999…%, but instead, EXACTLY 20%.
So now you know.
And if you think you’re so smarty smarty, just tell me the month and year the OFFICIAL figure in this class will hit the magic 20%. Don't blabber anything BEFORE that. Give the month and year FIRST, before you vent. This will prove that you are being dragged kicking and screaming into the real world.
The good lord giveth and then the good lord screweth all night and day.
2011 likely statistics. Thousands of debt laden college students take up armed robbing the 7 eleven and selling dime bags of POT well on their way to careers in selling hard drugs. The more technical people launch huge franchises of gizmos to rob steal and identity theft. Pay per view will be hacked to shit. Nobody will pay for cable or phone or interenet.
The government fears the educated unempoloyed because they can hurt the most. Period.
And I thought it was 20.000125%...oh well. You may be right about the number, and are certainly right that the central planners deifinitely have some silly little number they are looking at, as you say. The snag is, as always, in the real world, that avalanches are REAL difficult to stop once started...regardless of how far down the slope you draw the line where the wall of worry meets the cascading wall of snow.
http://www.census.com/prod/2006pubs/h150-05.pdf
DavidRicardo:
Obviously you are the one who needs to do some research.
Number of homes owned by those with no bachelors degree:
45.522 million
Number of homes owned by those with a bachelors degree or greater:
29.526 million
Download the data, search for 'Educational Attainment of the Householder', and add up the damn numbers.
Obviously you are the one who needs to do some research
Number of homes owned by those with no bachelors degree:
45.522 million
I MEAN HOMES, NOT SHACKS. WHAT'S THE VALUE OF ALL THOSE 'HOMES' PUT TOGETHER?
Number of homes owned by those with a bachelors degree or greater:
29.526 million
I MEAN HOMES, NOT SHACKS. WHAT'S THE VALUE OF ALL THOSE 'HOMES' PUT TOGETHER?
Download the data, search for 'Educational Attainment of the Householder', and add up the damn numbers.
DOWNLOAD THE DATA, AND ADD UP THE DAMN VALUE.
YOU THINK I DON'T KNOW FROM AMERICAN TRASH? DARLING, I'VE LIVED IN THIS DUMP OF A COUNTRY ALL MY LIFE.
I actually included those with associates degrees in with the $29 million, so of the 75 million owner occupied homes in this country, 50 million are owned by those with no Bachelors degree. Anyone who thinks 50 million of the 75 million occupant owned homes are shacks is a fool, and you've just been exposed as one.
David, those bailouts will continue until one of three things occur:
1) Investors lose confidence in bailouts
2) They attempt a bailout too big and the result is unsuccessful
3) The refuse to bailout an entity because it is not politically feasible at the given time aka Lehman Bros.
I put my money down on #3. #1 is always a possibility though.
1) Investors lose confidence in bailouts
THE INVESTORS ARE THE SAME PEOPLE MAKING THE BAILOUTS.
2) They attempt a bailout too big and the result is unsuccessful
THERE ARE NO FORCES WHICH COULD MAKE THE BAILOUT UNSUCCESSFUL--UNTIL, THAT IS, BLS BACHELORS IS 20%.
3) The refuse to bailout an entity because it is not politically feasible at the given time aka Lehman Bros.
WHAT ABOUT THE IDEA THAT IT IS POLITICALLY NECESSARY NOT TO BAIL OUT AN ENTITY. REMEMBER, ALL OUR 'CRISES' ARE PROVOKED AS A PART OF MELLONESQUE LIQUIDATION. I THINK OUR PLAYERS ARE FAR AHEAD OF YOU IN THEIR MACHINATIONS.
I've already told you, April 13, 2013.
I pulled the date right out of my ass JUST LIKE you pulled the $70 trillion out of yours......not to mention the EXACTLY 20%.
And you may actually be right! Why? Because the rate from October to November went up .5. If it keeps going up for the BA class at that rate, then by mid-April 2013 it will be at about 20%. So, spot on for you!
Now where did the $70 trillion come from? From the $1.8 quadrillion in bets floating around the world. Do the math.
"Somebody" is certainly buying EU debt. And "somebody" elses T's rate are skyrocketing and dollar weakening. These are all the hallmarks of transferrance of risk to the ultimate bagholder?
America, the ultimate backstop, has now been activated to hold the EU together. I have my doubts this will work out.
BTW - look at the data since US steped into the breach for EU two whole days ago...
Euro/dollar 1.29 to 1.34 (and rising)
oil $83.55 to $89.25 (and rising)
10yr US T 2.75 to 3.03 (and rising) while folks are beating feet to the short end of the curve w/ 2yr sitting hear weeks low
Don't seem to see the same increases for Germany...hmmm.
Perhaps we should refer to this as QE2.1???