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good to have you back, this column is my favorite part of zero hedge, I was worried you had stopped, thanks for everything
Is it me or is the 2 year Treasury yield lower now than it was when market was lower a few hours ago? Who is buying equities, the tooth fairy??
A short guy: Lord Blankfein
The usual suspects. We cannot have a stockmarket crash in the run up to Christmas after all.
Exactly, anyone thinking that after printing trillions to support the markets, the Fed is going to give up now, is terribly naive.
Here's a thought i've had concerning Dubai.
Step 1, private default: ZH recently ran a piece about the hidden stimulus of home owner squatters, or people living in foreclosure in-process homes.
Step 2, commercial default: Mish commenter, LaGirl, told a banker story yesterday and CRE owners intentionally defaulting on loans.
"I just had Thanksgiving dinner with my brother in law, a commercial loan officer / vice president (all the loan officers are vice presidents) working for a small to mid size bank in Glendale, Ca. He says he and the other employees are just waiting for the FDIC to come in and shut them down, they all know it's just a matter of time. He is over fifty and realizes that his career is over, he will never get another job doing what he does again."
"He is personally trying to collect on many of the loans he originated. Many are apartment buildings in AZ or UT or various retail or hotel properties, some in the NW or the south, but even though a lot of those properties are generating cash flow, the borrowers won't pay a dime toward their mortgages, they figure they'll wait and deal with the FDIC directly once they take over."
"His only comfort at this point is there are lots of other banks that are similarly situated, so maybe it will take some time before the FDIC gets to them."
Step 3, Sovereign default; Dubai threatens default. Do you see where i'm going with this? A conspiracy of defaults of sovereign debt holds the world, and particularly the US, hostage. Moral hazard becomes unhinged as every debtor greedily awaits Ben's choppers. It's not a pretty thought. Just think, amongst sovereign debtors, Dubai has gotten in line first for the international 'Black Friday' coming to a country near you. No wonder Canada's housing boom has still not busted.
I prefer the lastest commentary from Jim Sinclair--He truly gets it unlike even some of the "smartest guys in the room":
Posted: Nov 27 2009 By: Jim Sinclair Post Edited: November 27, 2009 at 2:10 pm
Filed under: General Editorial
What is the essence of the Dubai request for debt payment delay (a technical default)?
1. Will an implied Dubai Federal Guarantee of the debt of state owned corporations be honored in Dubai and elsewhere?
2. How many more financial problems are there out there hidden in plain view in the West as well as the Middle East?
3. Will the Middle East see to the bailouts of its own problems or is there a stampede of camel trains into the desert, devoid of cell phones and Mercedes?
4. Will this event cause other developing market country debt to default in a domino effect?
In terms of gold this event is further proof that paper and promises are NOT the stuff money is made of anymore.
Those that will come out of the woodwork to call a top in the gold price have little experience in what a top looks like in gold. Let me assure you the action of today contained zero evidence of a top.
The USA has become a giant FDIC and will have to finance in strange ways (QE) to meet its obligation prior to June of 2011.
Other than transitory technical factors there is nothing whatsoever positive in a collapse anywhere for the US dollar. When the snow falls here on the east coast of the USA the dollar will come under more pressure and fall much further.
The major immediate financial problem, hidden in plain view, is that 2009 financial entity earnings are CASHLESS. They are more than 75% due to the permission of FASB (Financial Audit Standard Board) who sold their souls to the financial sector to again mark up toxic paper to values self determine by the financial institution. The profits of their trading is toxic paper mark up accounting.
The inviting conclusion is the over the top greed in plain view by financial institutions is their own knowledge of the cashless nature of their earning and the fact that the junk is marked up now as much as one can do without either starting a riot or doing time. Therefore the earning prosperity is behind them, nothing is fixed and that makes this year the last opportunity for a long time to cash in for themselves.
Dubai has reminded us that there has been NO cure to the systemic financial problems of the West and those like Dubai that not only tried to mimic the West, but overdo them in a garish manner.
You can be sure that the US Fed and the ECB are chasing the sheiks into the desert today like Lawrence of Arabia in an attempt to get them to pay up and support their own problem. That means more international QE, as the Fed is not in the mood to tank a $12 trillion dollar bailout operation over an $80 to $110 billion dollar failure of a stupid and garish real estate project in Dubai. This concept would contain the domino effect, putting it off until later in 2011.
The dollar will not reverse out of the bear market it is in, nor will gold top here and now. In fact the bear market in the US dollar and the bull market in gold is not only alive and well but in terms of price, young.
Enjoy your weekend and stop looking at the markets!
See. We are moving towards a cashless society. Cashless profits, Cashless balance sheets, Cashless transactions of cash.
That's the plan. When the USD is scuttled it will be replaced by a credit card, not by another paper currency.
The re-positioning of the clearing house.
It's one way for the taxing authorities to totally eliminate black money. Meaning uber profitability for them. How else can we pay for this debt?
"Morpheus informs Neo that the year is not 1999, but estimated to be closer to 2199, and that humanity is fighting a war against intelligent machines created in the early 21st century."
Sorry had this installed in my subconcious.
Nov. 27 (Bloomberg) -- Dubai’s debt woes may worsen to become a “major sovereign default” that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.
“One cannot rule out -- as a tail risk -- a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.
A default would lead to a “sudden stop of capital flows into emerging markets” and be a “major step back” in the recovery from the global financial crisis, they wrote.
thanks for the chart Andy...definitely food for thought. thought the Japanese Finance Minister's words on currencies was rather telling yesterday (if you didn't see Bruce's column, it's clearly worth the read).
You are enormously overdue for an article and I demand one or two over the weekend!
In addition to the usual suspects, perhaps some discussion on Japan, yen, the tanking Nikkei, etc.
Hitler Gets a Margin Call:
That was so funny i had tears in my eyes from laughing so hard. You might want to check this one out too:
Hitler misses the bull market:
awesome! I liked that one even better!
Thanks for the update Nic and thanks for the good laugh NRGTDR ... just don't get caught holding the bag on your preferreds.
Here's to Nic and Tyler - Thanks!!!!!
Also to the US: Holders of the AAA Super Senior Tranche. Phuck Dubai!
Thanks for the update! One needs some intelligent input after watching those crazy pumps in action for the day...
I find this interesting or at least funny: (if graph doesn't show just click link)
The S&P Square Wave which has been going on for the last 15 days. Keeps gaping up n down between 1090 and 1110 every 2~3 days, and floating in the meanwhiles. Very consistent, swear!
I'm no chart magician, still I have an (naive) hypothesis: the pumpers can't/won't pump it higher, so HTFs have orders to keep the 1100 level for a while, and the square wave is their machine-natural way (or the result of heavy pre-opening future fixing).
The markets are in very confused state.. I see that square wave you are talking about. The % of stocks below there 40 day moving average continues to get weaker.
We are seeing the underpinnings of the market being pulled out one at a time like Jenga.
There are some charts here at http://redliontrader.com worth looking at.
Any thoughts on TBT at this point?
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