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Summary Of The Biggest Bail Out Ever: Even Keynes Is Spinning In His Grave
- Bank of England
- Bank Run
- Ben Bernanke
- BOE
- Bond
- Capital Markets
- Central Banks
- Credit Crisis
- European Central Bank
- Eurozone
- Federal Reserve
- Financial Accounting Standards Board
- fixed
- Germany
- Greece
- International Monetary Fund
- Italy
- Keynesian economics
- Monetary Policy
- Monetization
- Nielsen
- Portugal
- Risk Premium
- Sovereign Risk
- Sovereign Risk
- Sovereigns
- United Kingdom
Europe has now followed the Fed in its all in move to prevent the disintegration of the euro and of Europe. As we expected, the EU was leaking various rumors to gauge market interest, and as speculated earlier, the final cost ended up being just short of one trillion. Here are the key summaries:
- EU Crafts $962 billion show of force to halt crisis
- Full blown monetization: ECB will buy public and private bonds
- Fed reactivates swap lines with Bank of Canada, BOE, ECB, BOJ, and the SNB
In other words, total and unprecedented monetary lunacy, as every cental bank, under the orchestration of the Federal Reserve, will throw money at the problem until it goes away, which it won't. As we have long expected, Bernanke is now willing to sacrifice the dollar at any cost to prevent the euro unwind. This is nothing than a very short-term fix, whose half life will be shorter still than all previous ones.
The race to the currency devaluation bottom is now in its final lap. And gold is the only alternative to the now imminent collapse of the fiat system: the world had a chance to take writedowns on losses, punish those who took risk and failed, and refused to do so. There is now no risk left, but it only means that eventually all the risk will come back and lead all capital markets to zero. The result will be the end of Keynesian economics as we know it. Do not trade in this broken market, do not hold your money in a bank as they are all now one hour away from a terminal bank run - buy and hold real, FASB mark-to-myth independent assets.
Here is Goldman's take on the reaction:
In reaction to escalating pressures on Euro area government bond markets this past week, and their broader repercussions on financial stability, European policymakers have announced tonight an impressive set of new policy initiatives, as Erik Nielsen flagged earlier this evening as they began to emerge.
The centerpiece is a EUR 500bn conditional mutual financial support scheme for EU sovereign states, boosted by further assistance from the IMF. To put this number into perspective, consider that it is slightly higher than Italy’s 2007-09 average gross issuance of public debt and that it could cover Spain’s and Portugal’s combined gross borrowing requirements for two-three years. These conditional contingent liabilities tying EMU sovereigns will not appear under the Maastricht deficit and debt measures. They require no additional funding-raising, for now.
The fiscal agreement will be subject to closer scrutiny in the days ahead, when more details will be made available. In particular, the EUR 440bn of bilateral loans will be no doubt at the centre of more political discussions. But, together with the promise by euro area governments to ‘take all measures to meet their fiscal targets’, such display of fiscal ‘solidarity’ and the institution of a fast-track EMU/IMF funding backstop have been instrumental in convincing the ECB to step in, invoking a financial stability role. In the coming days, the ECB – presumably through the national central banks - will conduct ‘interventions’ in those ‘public and private’ markets of the euro area it deems ‘dysfunctional’ and therefore impairing the transmission of monetary policy.
We provide more details of the measures below, touching also on some of the issues still pending. Our overall take is positive. The Eurozone fiscal crisis spread beyond Greece to countries with much better fiscal profiles due to a lack of confidence, in turn amplifying debt roll-over risks and hurting domestic banks. Short of fiscal federalism, the mutual support plan launched tonight goes to the heart of the matter, and fortifies Eurozone institutions, endowing them more flexibility tools to deal with future crises.
But the true ‘circuit-breaker’ when the European markets open tomorrow will no doubt be the ECB’s unprecedented involvement in the secondary markets. Banking on the ‘best practices’ accumulated over the crisis, the ECB is not saying which securities it will buy, and in what size. This makes the ‘announcement effect’ even more powerful. The interventions will be over time sterilized (i.e., the cash injected will be mopped up), limiting the interference with monetary.
In terms of markets, there are clearly a few areas that are more directly linked to tonight’s announcements and others that have been caught in the general cross-fire. We would make the following broad observations.
1. EMU peripheral sovereign spreads should tighten back, particularly at the front-end of yield curves. The move should be reinforced by the further tightening of fiscal policy in Spain and Portugal to be announced later this week, and the ongoing conservative fiscal stance in Italy. At the 2-yr maturity, Portugal closed on Friday at 550bp over Germany, Spain at 237bp and Italy at 181bp. Our relative preference goes at this juncture for Portugal, because of the higher risk premium. We think spreads should come back to the 250bp area, and quite possibly further. In Italy and Spain, spreads should halve (although we continue to think that Spain will trade weaker than Italy reflecting the two countries’ relative funding requirements). Meanwhile, German 2-yr benchmark bonds closed at 76bp through swaps. This spread is at least 20bp too high (it averaged 50bp up to March), considering that Germany’s contingent liabilities as a result of these actions have increased.
2. The impact all this should have on the level of rates is unclear. The ECB is in the near term injecting more liquidity, and this should keep rates low over the coming months. Sterilizations will presumably entail a steeper money market than currently is the case. Against the backdrop of falling risk premium and better growth numbers, as we expressed already in our Bond Snapshot last Friday, our inclination would be to fade the bond rally now. Among our recommended exposures is a trade to be long 10-yr UST vs. Bunds, for a target in the 40-50bp area.
3. On currencies, the impact on the trade-weighed EUR of a more restrictive fiscal policy and easy monetary stance is unclear. As the risk premium erodes, the currency may extend gains against the Dollar, returning towards our 1.35 3- and 6-mth forecasts (from Friday’s 1.27 close). Our main focus in coming days will be on several fundamentally sound opportunities that have been rocked by the generalized de-risking. Among these, at this stage we highlight PLN, TRY against the EUR, and MXN against the USD, which we added on Friday already as a tactical recommendation. Asian FX weakened last week on the increasing risk aversion, and should stage a come back. Earlier tonight, we recommended going long a basket of MYR, PHP and IDR against the JPY.
4. The story in equity space is similar: Given the higher co-variance between financial and sovereign risk, the main underperformer of late has been the European banking sector. In the near term, it will probably lead the market bounce. But tighter fiscal policy in the European periphery will in our view continue to weigh on the local financial institutions. Our interest goes more towards opportunities where we judge the macro underpinnings to be stronger. We have been recently stopped out of long positions in US consumer stocks, but that remains an area of interest, for example. And we have highlighted the merit of ‘core Europe’ (through the German DAX index), which we are likely to elaborate on in the coming days. Unlike during the credit crisis of 2008, these policy announcements take place against a much more favorable macro backdrop.
Turning to the measures, these involve:
On the fiscal side, the establishment of a ‘European stabilization mechanism’, under the legal umbrella of article 122.2 of the Maastricht Treaty. This envisages financial assistance from the Union to member states ‘seriously threatened with severe difficulties caused by exceptional occurrences beyond their control’. The overall ‘stabilization mechanism’, which overall will not require approval by the national parliaments, will revolve around three funding avenues, all operating on a conditional basis (meaning that the sovereign will have to agree to a fiscal adjustment plan to access the funds, ‘on terms and conditions similar to the IMF’s’).
To begin with, the EU Commission will set up and run a permanent ‘rapid-fire’ facility funded by the issuance of Eurobonds guaranteed by the single member states. The framework piggy-backs on the one used for the balance of payment support to non-EU countries, which is also run by the Commission. The new facility should be endowed with around EUR 60bn, and provide for the quick response that was lacking in the case of Greece. It is unclear whether the facility will be pre-funded. The balance-of-payment program is not, and the Commission taps markets upon need. Whether the guarantees will be ‘joint and several’, like is the case of existing EU Commission bonds, is also unclear. If so, the issuance may compete with existing EIB and KFW programs, which is less senior. We plan to flesh out some of these issues when more technical details are available.
Moreover, EMU member states have pledged up to an additional EUR 440bn in bilateral loans to support each other. As in the case of Greece, we think that they will be allocated along the same proportions as those holding for the ECB’s capital shares. The loans will be collected in an SPV ‘expiring after three years’. It is unclear whether non-EMU countries have signed up (the UK has not). The disbursement of the loans will require parliamentary approval.
Finally, according to European sources, the IMF will contribute to the deal with an amount up to EUR 250bn, presumably providing assistance in the formulation of the fiscal restructuring plan, as has been the case for Greece. We would notice that the higher the amount pledged by the IMF, presumably the greater the influence of its main shareholders over the disbursement.
On the monetary side, the ECB has announced it will conduct interventions in the euro area public and private debt securities markets ‘to ensure depth and liquidity in those market segments which are dysfunctional’. The ECB plans to sterilize these purchases. Further, to support banks, the ECB will conduct 3-mth fixed rate tenders around the end of this month, when the first 1-yr LTRO expires, and a 6-mth operation this Wednesday. And finally, the ECB will reactivate together with other major central banks temporary but unlimited Dollar swap lines with the Federal Reserve.
Last, but not least:
- The first tranche of the joint EMU/IMF 110bn package for Greece will be disbursed in the coming days. Earlier today, the IMF Board has approved the EUR 30bn Stand-by arrangement with Greece. Both these news were widely expected.
- On May 12, the European Commission will present proposals on how to improve the governance of the Euro area, including ‘strengthening’ the Stability and Growth Pact (involving a discussion on the introduction of more effective sanctions). This is the natural and necessary complement to a system of fiscal relationships involving greater risk-sharing, and will be the focus of many discussions in the weeks and months to come.
Francesco U. Garzarelli
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or "It's the printing press stupid"
Us po-folk dont unnerstand all this sophisticated munney stuff. Yall want us to buy into your scams - get rid of the goddammed 80,000 page abomination called the Tax Code. Now. Ya'll print as much as you want - just send some our way - and Get rid of the goddammed taxes. Who needs it. We live in an age of prosperity and endless money - Trillion and Trillions - surely you dont need to send a f'ing govt thug to put a gun to my head to collect 95.57 that ya'll say I owe ya on account of the chickens I sold my neighbour in exchange for her - erm - favors.
Kinda get the feeling that'll be happening either officially or unofficially.
The Black Market: learn it, love it, live it.
Once again, the Greeks have cottoned onto something ahead of the rest of us...
(And the Russians before them!)
Even a candle burns brighter just before it dies out!!
Modify that message. Iam not interested in new taxes , old taxes , putrid stinking taxes. I want NO taxes. print 2 Trillion a year and eliminate taxes. If not explain in plain english why not.
At least the drug company warns you that your viagra fun may end in an erection that last four hours and you going blind while your looking for relief. The least these politicians could do is tell us that these bailouts will result in the tax man pulling wazoo's of deflated fiat currencies out our butt while they wisper sweet nothings in our ears.
Oh isn't that nice. Now all of Europe will have riots too!
Headbanger,
The Riots there, will be a picnic compared to the Party when it hit's the USA.
ESM hit limit up !! fucking fat finger :))
well surely this should at least bring Harry back out from under his bed for a few weeks more?
It's NOT more debt. It's MONETIZATION!!!
Can you pay down debt more easily with monetization?
YES WE CAN! (Gee, that sound's familiar.)
Just look at all the historical examples of currency devaluation.
Will you eventually get inflation with that? Correct. Will the middle class be worse off? Correct. Is monetization generally good for the society in question? NO. Does it reward the irresponsible? YES.
BUT IT'S HERE, AND IT'S NOT GOING AWAY!
Traders and investors need to adapt, it's as simple as that.
Citizens, on the other hand, should rise up in protest and continue trying to bring back the rule of law. But let's be clear, those are two VERY DIFFERENT THINGS.
Put on your thinking caps folks and get focused. Nothing at all is going to change this "round" of monetization. Forget it and adapt, and if you don't want to see it happen again, then start working to bring back the rule of law.
I had this argument years ago on TF.
I said they would print to avoid debt deflation because it is the ONLY WAY OUT.
I also said that it WILL NOT help the real economy because the shit on these accounting balance sheets IS NOT REAL. It's just numbers saying you owe something. Debt is an abstraction, a state of mind. And it all revolves around collective confidence.
THAT is the collapse of all of this, when absolute aggregate confidence goes out the window. Don't keep your wealth in FRNs during those days.
http://www.thegoldbrick.net/wp-content/uploads/2007/12/printing-press.jp...
what is that humming sound?
A few questions for those of you with a finance background:
Part of the package involves the ECB buying the bonds of troubled EU nations. These operations are said to be sterilized. Is my understanding correct that this means that, in theory, the ECB will sell an equal and offsetting value of bonds on the market to remove liquidity, such that there is no increase in the money supply, hence being non-inflationary? If so, does history show that this works as well in practice as it does on paper (no pun intended).
And if so, then is this not a zero sum game; the total amount of debt in the system remains the same? And if so, is the perceived benefit to the bond buyers that they are buying the bonds of a central bank with a printing press to back up their bonds, instead of a EMU nation that doesn't have a printing press, and hence must either default or be bailed out if they run out of cash? And if so, will this cause the ECB bonds to be perceived in a similar way and stronger competitor to US T-bonds - a "safe" investment, since the ECB can now print, just like the Fed can? And could this strengthen perception of the Euro as a global reserve currency that, after this crisis dies down (if it does), could be the recipient of "flight to safety" flows during a time of crisis?
Comments anyone?
My background is accounting. What I see is the conversion of an unpayable liability from Greece's balance sheet to an uncollectible "asset" on an off balance sheet SPE on the central bank's books. If I were asked to give an opinion on the entities involved I would have to include a statement regarding my doubts about the entities' abilities to continue as a going concern.
Hmm.
I'm a reader of FOFOA/FOA/Another and I think there is a possibility that a ECB bond (Euro) could have a distinct advantage as opposed to a $FRN-denominated bond, in the long run.
Call me an optimist.
It is equivalent to the ECB writing credit protection on the troubled issuers. They assume the liability and collect a spread in compensation.
Frankly, it's good for the central bank to have the ability to influence member yields through open-market actions; the line from there to outright price-fixing, though, can get blurry. The politics of this may turn out to be quite interesting, since ECB open-market actions basically have a direct impact on member states' budgets through their interest expense.
The ECB cant issue bonds only the individual EU govs can issue paper so how does the ECB sterilise other than selling bonds it already has on its balance sheet? And if TARP et al is anything to go by that balance sheet is going to end up with debt no one will want to buy!
Reading Goldman's take they say that sterilisation will happen "over time" - sounds suspiciously like never to me...
The reaction of the market in Europe will be in the long term bonds.
Nobody will lend their money for long term , it will mainly concentrate in the short term just like US Treasuries.
46% of the US treasuries maturity rate was less than 1 year, Now we will see the same in Euro bonds.
It will be more and more difficult to refund their debts, We are coming to the end game. It may take some months, or a year but when central banks print money to buy their own bonds to reduce the rates the investors/speculators will use their cash to buy assets instead of accepting the artificial rates, then the inflation will kick in.
I just wrote both Senators in NC, demanding my master key to my newly owned Red Roof Inn suites. I plan to travel across the U.S. this summer, and why should I stay anywhere else but in the hotel chain Americans now own, thanks for Bennie B and his idiocy. I mean every American should be able to stay for free since we own it right? I want my master key to my suite and I am not paying anything for it, since we already paid for it.
I already wrote and called Hagan - she doesn't care - she's a bankster senator.
God Damn the central bankers
http://www.youtube.com/watch?v=rpoEmlxUPeQ&feature=related
The Central banks have UNLIMITED power to dictate the price of financial instruments in NOMINAL terms.
Understand that. Accept that. Make peace with that.
They control the money. For things that are purely monetary instruments like bonds, they can set the price.
They CANNOT, however, MAKE oil wells pump more past-peak, or people buy things, or helium production go back up. They cannot violate the laws in the REAL world.
And, most importantly, they cannot force you to trade an amount of REAL things for their jew confetti. This is what the Bavarians told the weimar banker clan prior to the great inflation in Germany.
Bonds CAN trade at par while a wheelbarrow of the notes buy a cup of coffee.
I see now what the endgame is going to be and it is ugly. The prisoners' dilemma pretty clearly now dictates that people hoard things in expectation of the worthlessness of paper. Grab what you can before it all cracks up.
Call it bailout fatigue, call it point of recognition, call it loss of confidence, but these measures HAVE NOT, WILL NOT, and most importantly, CANNOT reverse the course of events. They can only fix prices which are illusory.
Confidence DOES NOT spring from the quoted prices of sovereign or Central Bank financial instruments. This is the fucking problem with bankers and economists - they think that it DOES spring therefrom. REAL costs and real standards of living are from whence it comes and these are increasing and decreasing, respectively.
What will probably bring things to "an end" is a fall in the House of Saud where the new leaders refuse us the same as the Bavarians did and using the same verbiage. As they go, so goes OPEC. Yes, this will mean war. We are foreseeing this and it is why we have an entire NationBase in the middle of the region.
All paperbulls NEED to bear this in mind: if we were to lose our hegemony in the Middle East due to revolution or some other circumstance, the dollar, absent its "petro" support, would collapse virtually overnight.
Yes, refusal to transact in dollars would "fuck the world," but don't assume some new despot in Riyadh would either care or be so perspicacious to get this.
Isn't the jew confetti also used in cooking Christian babies. It absorbs the blood for the matzohs.
You go girl!
"jew" confetti? not the right word, surely?
i thought the Jewish liked their real money over paper every time?
That is what Bavarian producers called Weimarks when they refused to accept them. It's not my phrase. Documented fact.
The PR problem for the Tribe during the last financial catastrophe their members caused turned into a 6M person bodycount.
Given the preposterous dominance of the Tribe in finance, almost to the point of monoethnicity, a wider islamic revolution in the bastions of the petrodollar would be absolutely fatal. The original embargo was over the YK war.
Come on tyler, Im waiting for you to comfort us and tell us how this latest Bailout is so wrong and how the market is going to crash. So far, The market loves this. Please show some Charts that Gen. Patton once used, Show us some Mathamatical formulas, DO SOMETHING!!
Come on tyler, Im waiting for you to comfort us and tell us how COCAINE is so wrong and how OUR BODY is going to crash. So far, MY BRAIN loves this.
We need to lighten the load on the life-raft, correct? I have a nominee...
the headline should read: In the race to monetary perdition, Europe just took a commanding lead over the U.S. --"Dass dumme Amerikaner!"
Rapid fire commission my ass. I have something that has rapid fire for you worthless central bankers. Line them up boys, no need for cigarettes and blindfolds.
My 0.02 Fiatscos worth (and dropping fast):
-After brief moment of relief, political strife accentuates in Euroland. Battle lines have been drawn: North vs South, Core vs Periph, Med vs Goth, Islands vs Cont. Worse, supranational class tensions are going to the front burner and could superimpose on generational tensions. A classic.
-US quick fix impact lasted about a year before signs of sputtering emerged. Will not even take that long in Europe, macro conditions are too strained.
-I think the Euro bailout INcreases the chance of a US QE2 or even STIM2 by the process of desensitization. They're doing it, won't look so bad for us if we do it.
Any thoughts?
This is kind of shaping up as a open on the high kind of day. Unless a few shorts have patience, the open print might set the bar. More and more people seem to realize this is all nonsense, but they're just trying to make a quick buck playing the Bernanke buy. While they might have bought the scam a year ago, they now know that this is merely a matter of time before last Thursday reappears and the entire market bid disappears. When the music stops, there will be nowhere to hide.
2 questions:
Will they still use wheelbarrows to carry the bread money, or something cool made by Apple?
Why is any currency a reserve currency, if none are backed by gold/hard assets?
Thanks 4 playing.
Jianngx,
Two Words...........
Bretton Woods.
Oil is priced in USD.
I've never been to a hyperinflation before... I hope I'm dressed properly.
Check out the latest trend in shaggy burlap.
Dress to fit in...
Can't post the picture, but this look will work:
http://thegrumpyowl.files.wordpress.com/2009/03/mr-t1.jpg
Just remember not to be as fashionably late as our academic, political & financial elite to the party.
Easy money will beget more easy money. US will need more soon.
Up up and away, my beautiful, my beautiful buffoons!
An Absolute shot of classic!
Big assed hat, no freaking cattle.
But my giant belt-buckle is the envy of all the other rancheros, podner.
And they're standing in some really deep and concentrated "barnyard acid".
The PONZI masters got scared shitless last week when the DOW dropped 1,000 points in 15 minutes. How can they keep selling while you are pulling out? The EU bailout is orchestrated to pump more money into the scheme and to keep the party going. The long term results are irrelevant.
Keep the party alive:
http://www.youtube.com/watch?v=KTocFlDMHXo
This situation is so far past ridiculous you can't even get a bus back to ridiculous.
*snort*
UR. Duuuude. Glad to see you. We are all just standing around watching Europe and the Gulf burn. Nothing much. How you doing?
So, this bailout will contain the end of the world, delaying it until 2012, just to make the Mayans look smart?
My hope is that, when the US completes 24 months in a row (2 years) with U3 unemployment above 9%, the media will stop to talk about "recovery".
PT Barnum himself might have trouble selling the recovery.
"We're running out of suckers, Tim! What now?"
"Put on a green suit and sell some "Green Bonds" Ben!"
This is surely designed to let the bankers slip out the back door; problem is they are so greedy they can't resist hanging around and borrowing up even more.
Dooomed, Cap'n Mainwaring, dooomed I say.
The world biggest pump & dump is taking place.
Exactly. The biggest dump in the history of the world. A trillion dollar laxative, slugged down, certain to produce a great, big, steaming pile on the dining table.
This was a pretty good call:
-Quantitative Easing will be announced over the weekend by the ECB.
-The FED opens swap lines with the ECB and the Bank of England (again)This weekend
-Stock Market is up x00 points points on Monday
http://thepoliticalonion.blogspot.com/2010/05/few-predictions.html
I wonder if the US, as Europe has so bravely done, will use its vast intelligence resources to put the jackboot on the throat of evil $USD speculators, who willfully, deliberately destroy the purchasing power of the bulk of US citizens for mere profit?
Oh, I forget: two legs bad, four legs good. Never mind...
2 years ago this would've been an easy 800 Dow points, especially on the tail of last week. Today it's having trouble holding 400. Looks like a real half-assed effort to me. Thank God it was just a fat finger trade and not a panic or anything.
Try and short this upcoming rally and you'll be wiser .. but a whole lot poorer.
This liquidity measure is blowing Soros and friends to bits and pieces.
Soros almost killed the BoE and the Pound years ago.
Soros was not party to the liquidity information and there's pain in Soros house, there's max pain.
Couldn't happen to a nicer guy.
The euro has already given up two handles of gains; can the equity market be far behind?
DXY pinging 84. They're gonna have to find a way to keep that beach ball submerged somehow.
Heard this from EU sources.
The EU states will gradually clean the balance sheets and reevaluate all infrastructure assets that states own based on current budgets. In other words, the German autobahn for example which has been built and rebuilt and expanded decades ago is worth alot more than the balance sheets suggest.
In short, this is a currency reset without the pain of actually cancelling debt and rolling out a new currency.
In 10 years time all prices and incomes in Europe will have doubled from where they're at today.
Party on.
They won. Now EUR is the same junk as USD, and USD is again a little bit less junk (being world's reserve currency) in the new normal. Now watch at the prices of commodities.
The rich are getting richer, and the poor are losing even that they have.
I have refrained from posting here, but basically you were all wrong! The "imminent collapse of the fiat system"?!? Give me a break. This will never happen, we are not going back to bartering and gold, so everyone take a deep breath and stop seeing dark doom everywhere. The sun is still shining, especially in the solar sector.:)
Oil to $100 by summer.
I'd even consider your solars now.
What else?
@leo
So you're saying we are all Wylie Coyote now?
Leo you ignorant slut!
I would suggest that you temporarily having refrained from posting here was the most valuable thing you could have done for the readership of ZeroHedge.
While we may not be witnessing your strawman of the "imminent collapse of fiat currency", we are CERTAINLY presented with the eventual collapse of fiat currency. Or is it different this time, and is the historically discredited fraud of fiat currency now "forever"? Please give us a reasoned argument as to why the reform of monetary corruption and perversion will "never happen" --- and combined with your obvious disdain towards the idea, should never happen.
History is literally littered with examples of fools who proclaimed "Never!" in the face of the onrushing tide of inevitability.
Leo, you are a blind and clueless bastard, and have no legitimacy nor value posting your pro-establishment tripe on this website. But you might want to apply for a position on CNBC, where your inclination to pander to, and apologize for, corrupt authority would serve you well.
In summary, Leo, for the integrity and sanity of ZeroHedge, please take your "mainstream" financial analyses and Keynesian bullshit and shove them up your already bankster-lubricated ass.
So Why do we all sit and exclaim our disgust from our keyboards.....
This is so insane it is like putting 13 year olds in charge of nuclear plants. Where are our leaders!!
http://4.bp.blogspot.com/_YCUctN8x4Sw/SSeyf7k3xnI/AAAAAAAABqc/raqe-q5E2W...
Too good not to share
hat tip: naked capitalism
http://www.angrybearblog.com/2010/05/friction-non-socratic-dialogue.html...
Confused here.
If Keynes failed and Reganomics failed, what is left? Going to Sue Lowden chicken trading route?
Confused here.
If Keynes failed and Reganomics failed, what is left? Going to Sue Lowden chicken trading route?
Punish the people because the bankers bought crap, just great. Seems these banker types always win. This can't be good for mankind.
Expected... politicians following the path of least resistence. Why should anyone be suprised?
More debt does not fix the problem of too much debt. Like putting gasoline on the fire.
Your leaders are just buying time and hoping for the best...kicking the can down the road.
My god help us...........
Didn't you read the Bible? God is short this material existence of ours. And he never has to worry about margin calls!
Why stop at a trillion euros? At this point, why don't they just loan themselves 500 trillion, or a gazillion? Why not just make up some childhood faux-number and at least be honest about it all -- that we're rapidly approaching that point where fiat paper's sole value is measured only by how good it is for getting a fire going.
And while they're in fantasy land, why not just promise everyone a magic pony or a unicorn?
haha nice move EU!!!
Bearing in mind that 15% of the Euro reserve is gold and that the Euro countries have together taken over 10,000 ounces from Uncle Sams coffers before the gold window closed, it would seem that all the Euro has to do is survive is last a day longer than the dollar...and then see it's gold reserves revalued as the dollar implodes...
275 billion from the IMF hahahahahahaha and the IMF has this cash??!! WTF !!??!! WHERE??!!
Oh, I get it, that sort of paper gold "cash" (you know the sort, its that "give us a million and we will give you some paper that says you bought some gold, but we will look your gold for you" sort of deal...
Or is the IMF just giving us some of your newly printed greenbacks??!!!!
hahah what a joke.
Maybe the leaders should visit fofoa and read his last missive...
http://fofoa.blogspot.com/
Anyone seen CDS on the UK today? Up or down?
Surprising source, but great article here...
http://blogmaverick.com/2010/05/09/what-business-is-wall-street-in/
Here's your bailout...
http://www.google.com/finance?q=EPA:GLE
French banks up 25%
I guess this song would be appropriate...
Everybody's looking for a meaning
Everybody's doing their own thing
And nobody's solving the problem
Ain't nobody helping each other
Some people give into fear
Some people give into hunger
Some of us live for the future
And some of us wonder...
Lyrics: Lisa Stansfield "People hold on"
How about instead:
Anarchy for the UK!
It comin someday, maybe!
Lyric: Johnny Lydon
“Gold Is Money, and Nothing Else.“
- JP Morgan, testifying under oath to Congress before the Pujo Commission, 1913
"Banking was conceived in iniquity and born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take away that power, and all the great fortunes like mine will disappear — as they ought to in order to make this a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, then let them continue to create deposits.”
-Sir Josiah Stamp (1880-1941), one time governor of the Bank of England, in his Commencement Address at the University of Texas in 1927. Reportedly he was the second wealthiest individual in Britain.
Mobilis In Mobili -Nemo
Eulogy for the EU
There is peace over the mountains.
Soon, there shall be peace over you.
Schiller
Ruh-roh. The Euro is making a run at 1.28.........
And here comes the gap fill...Volume on the SPY is pretty pathetic, only 16% above 50 day moving average at 1:05EDT...
I'm sure one trillion USD once seemed like an impossibly large number. But if you look at the names of large numbers list on wikipedia you'll see that we have plenty of growing room. Coming soon is the long list of trillionaires. Everyone will be a billionaire. My grandma used to tell us of how she and her brother would walk to the corner store and buy a loaf of bread and two ice cream cones for a nickel. FIVE CENTS! We are going to be fine. Business as usual... http://en.wikipedia.org/wiki/Names_of_large_numbers
Euro up 35bps after a $1T bail out. sweet baby jesus!
Tyler, actually the full size of the package is 750B Euros according to Der Spiegel
Euro now down in the 1.278 zone against the USD and 119.08 against the yen....well that pop was short lived...
wonder when the market will notice.....
I stumbled on this site a few months back and was instantly hooked. I've enjoyed reading what you have to say because your honest and witty (like me but with financial sense). I was content with admiring you from afar until I wanted to ask a question, so I took the entrance exam last week and got my user name today. Now I REALLY need to ask...... am I to buy rare coins or bullion, silver or gold, or all of the above?
spellcheck : )
Welcome, Lucky. Like you, I read for a while and joined recently. Too much fun not to. Humor is the last asset no one can hedge. As to your metals question, I bought some gold coins (just for the weight) about 1.5 years ago. Now, I'm looking at getting some silver rounds today by a local dealer. My question, on top of yours would be:
what's the END GAME of owning metal? Some seem to buy it for a capital gain, to turn back into dollars or another asset at a later date. SOME think it's end game currency, period, to be used in all transactions. If that's the case, what good is an ounce gold coin for small future transactions? I'm looking for trading increments below 1/4 ounce today of gold and ounces of silver. I'll ask my dealer today unless someone here has advice. But, I'd think you can't go about with onces of gold buying food, but you could with .10 or .05 ounces as the price rises, etc...
Welcome, nice to have you here.
As to your question; YES; there is another 2 trillion $ in the swap lines. Buy gold, i dunno about silver, never owned any.
Hi! Glad you decided to join in. My view on the gold/silver debate is generic (bullion) gold coinage, especially U. S. Mint issued coinage. The American Gold or Silver Eagle is legal tender and will never be demonetized nor seized. Other forms of gold carry that possibility no matter how remote others may see it as happening. The first silver I'd buy is "junk" silver: U. S. silver coinage pre-1965. Always buy physical metal, not in any "paper" form such as ETFs. You can take a look back at some previous ZH topics to find good discussions on where/how to buy and how to store your goodies. I come from the topic as a coin dealer and an active metals acquirer. Been in the business since about 1991 and buying metals for my own wealth preservation since 1999.
Buy both gold and silver one ounce coins. You don't need to buy "rare" coins but I would recommend sticking to government issue coins like the Canadian maple leaf or the US eagles.
They always tend to have a higher buy back option when you want to sell than second rate mints or commemorative coins. I really like going for aesthetics because that is what most people look for in a coin other than what its base metal is. A beautiful coin that is well taken care of will always be worth more than a stamped slab of metal that is in circulated condition.
So just keep that in mind.
As an Astronomer by hobby only, this looks like a dying star.... first Red Giant and fits of distemper, then white dwarf.
in the red giant.
Germany is sending the Mark to their neighbors as they did exactly eighty years ago today. The mark they sent then was the Mark III, better know as the PzKpfw III.
ESTIMATES ON SWAPS?
Anyone have any estimates or explanation of the risks we assume with these swaps to ECB, UK, Canada, Japan? I'm trying to get a better understanding of how they function and the risks involved. I assume the real risk is inability to pay them back, the terms, etc..
Seems to me like the FED is conducting foreign policy too.
http://www.bloomberg.com/apps/news?pid=20601087&sid=amiI5qIW8gDI
if floating rates of defined duration then yes major risk
if fixed rates of defined duration then no risk [swap just gets reversed]
if fixed rates of undefined duration then no risk [eventually swap gets reversed]
if floating rates of undefined duration -------> run to the fucking hills and stay there
with regards to the endgame for PMs, i subscribe to this general plan, wait until the Dow to Gold ratio gets back towards 1-1 again, then swap it in for real estate.
http://goldversuspaper.blogspot.com/2010/05/paperbugs-dont-understand-ho...
as with all plans,who knows what might happen between then and now, but whaetver it is, at least you know the one thing than cant happen is your "wealth" vanish into a paper or electronic meltdown.
That is a good plan, also if you have silver wait for 15/1 ratio or so to swap silver for gold.
But yeah I wouldn't suggest ever trading cash for gold or silver. Just trade it in for the things you ultimately want like a house etc.
This represents one small step for mankind and one huge step towards A New World Order.
Interesting DOW chart and will upload a new EURO chart shortly:
http://www.zerohedge.com/forum/latest-market-outlook-0
http://stockmarket618.wordpress.com
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