With Spanish 10Y yields hovering at a 'relatively' healthy 5%, having been driven inexorably lower on the promise of ECB assistance at some time in the future, the market has become increasingly unsure of just who it is that keeps bidding for this stuff. Well, wonder no longer. As the WSJ notes, Spain has been quietly tapping the country's richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds - with at least 90% of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt. Of course, this is nothing new, the US (and the Irish) have been using quasi-government entities to fund themselves in a mutually-destructive circle-jerk for years - the only difference being there are other buyers in the Treasury market, whereas in Spain the marginal buyer is critical to support the sinking ship. The Spanish defend the use of pension funds to buy bonds as sustainable as long as it can issue bonds - and yet the only way it can actually get the bonds off in the public markets is through using the pension fund assets. The pensioners sum it up perfectly "We are very worried about this, we just don't know who's going to pay for the pensions of those who are younger now," or those who are older we would add.
After all, it’s clear at this point that the entire EU financial system is essentially held together via duct tape by the ECB. And with Spain and Greece’s banking systems once again in dire need of capital I’m very concerned that the next round of the EU Crisis is fast approaching and EU leaders are trying to start the damage control in advance.
In part one of this two part series – Hey You – we examined how an invisible government of wealthy, power hungry men have utilized the propaganda techniques of Edward Bernays and lured the American people into a narcissistic, techno-gadget, debt based servitude. Over the last one hundred years they have created a totalitarian state built upon egotism, material goods, and fulfilling our desires through Wall Street peddled debt and mass consumerism. It has been an incredibly effective form of control that has convinced the masses to love their servitude. The lyrics to Pink Floyd's 'Mother' had both a literal and figurative meaning for Roger Waters. Having seen his Wall Tour performance this past summer at Citizens Bank Park with a diverse crowd of 40,000, ranging in age from senior citizens to teenagers, it seems this song has gained new meaning. He sang a duet with himself from 1980 projected on the Wall and when he sang the lyric, “Mother, should I trust the government?” the entire stadium responded in unison – NO!!! This revealed a truth that is not permitted to be discussed by the corporate mainstream media acting as a mouthpiece for the ruling class. A growing legion of citizens in this country does not trust the government. This is very perceptive on their part.
- U.S. Family of Mao’s General Assimilates, Votes for Obama (Bloomberg)
- Iron ore prices hit eight-month high (FT)... four months after plunging and crushing iron ore miners
- Obama seeks 60 Senate votes for cliff deal (MarketWatch)
- Need. Moar. InfinitQEeee: Japan PM adviser urges unlimited BOJ easing, higher price goal (Reuters)
- Yen Touches 16-Month Low Versus Euro Before Japan CPI (BBG)
- China consumers driving economic rebound (Reuters) - ot just year end window dressing to accompany the new Politburo
- Rajaratnam agrees to pay $1.5 million disgorgement in SEC case (Reuters)
- France should review 2013 deficit target with EU partners (Reuters)
- Monti-led poll alliance takes shape (FT)
- Bersani wants growth-oriented Europe (FT)
- Grand Bargain Shrinks as Congress Nearing U.S. Budget Deadline (BBG)
- Budget Talks Cloud Outlook (WSJ)
- Obama to cut vacation short to deal with fiscal crisis (Reuters)
- Stop-gap fix most likely outcome of "fiscal cliff" talks (Reuters)
- Aso Named Japan’s Next Finance Chief as Abe Primes Fiscal Pump (BBG)
- Aluminum Glut No Bar to Gains as Barclays Says Sell (BBG)
- Morsi signs controversial charter into law (FT)
- Children, many ill, would be victims of Russia ban on U.S. adoption (Reuters)
- Turkey Central Bank Unveils New Tool to Limit Bank Debt Risk (BBG)
- Refi Program Expansion Eyed (WSJ)
- India Joins Indonesia Facing Heightened Policy Dilemma (BBG)
To some, such as those few whose daily net worth is still a function of the policy vehicle formerly known as the 'market', it is a merry Christmas (at least until such time as the recoupling between central planning and reality once again inevitably occurs). To others, such as the 50 million (by now) Americans on food stamps, and billions of others around the world living in conditions of poverty, it is not so merry. But no matter one's current state of one's mind, there is always hope that the future will bring better days: after all that is what reflective holidays such as today are all about. We too hope that there is hope, if at the same time realizing that ever more of the promise of the future is packaged away in chunks of debt and securitized in order to fund an unsustainable present. We open up this open thread to readers to share their hopes and concerns about the present and the future.
As DB's Jim Reid summarizes, "it is fair to say that newsflow over the next 72 hours will be fairly thin before we head into a tense final few business days of the year." It is also fair to say, that the usual tricks of the new normal trade, such as the EUR and risk ramp as Europe walks in around 3 am, precisely what happened once again overnight to lift futures "off the lows", will continue working until it doesn't. In the meantime, the market is still convinced that some compromise will appear miraculously in the 2 trading sessions remaining until the end of the year, and a recession will be avoided even as talks now appear set to continue as far down as late March when the debt ceiling expiration, not cliff, will become the primary driving power for a resolution. That said, expect to start hearing rumors of a US downgrade by a major rating agency as soon as today: because the agenda is known all too well.
Leaving the highly sensitive topic of "gun-control" aside for the time being, one can't help but wonder if it isn't time that the US government, seemingly hell-bent on regulating virtually everything in its quest to prove (to itself?) that America's population can no longer be trusted with making any responsible decisions on it own (and in the process becoming even bigger), shouldn't be more focused on "fat-control" instead. Why? Because while guns may or may not kill people, the bottom line is that of the 32K or so death attributed to firearms, roughly 20K, or two thirds were suicides, meaning firearm-based homicides were 11,015 in 2010. Putting this number in perspective, every year some 935,000 Americans suffer a heart attack, and 600,000 people die from some form heart disease: 1 in every 4 deaths. Net result to society: the cost of coronary heart disease borne by everyone is $108.9 billion each year. And of all proximal factors contributing to heart disease, obesity and overweight is the main one. But of course one can't make a media spectacle out of 600,000 hospital wards where people quietly pass away, in many cases due to a lifetime of ill decisions relating primarily to food consumption. In fact, some estimate that obesity now accounts for one fifth of the total US health-care bill (the part of the budget which no amount of tax increase can offset). Which is why if the topic of gun-control has managed to promptly tear the country into two (or three, or more), just wait until fat-control (far more than the recent tepid overtures into this field such as Bloomberg's NYC sugary soda ban) rears its ugly head and sends the already polarized (and weaponized) US society into a state of agitated hyperflux.
Iraq quadrupled its gold holdings to 31.07 tonnes over the course of three months between August and October, data from the International Monetary Fund showed on yesterday. The IMF's monthly statistics report showed the country's holdings increased by some 23.9 tonnes in August to 29.7 tonnes. That was followed by a 2.3-tonne rise in September to 32.09 tonnes and then a cut of 1.02 tonnes in October to 31.07 tonnes. There was no data for November. It is Iraq's first major move in years to bolster its gold reserves. More recently, Brazil raised its gold holdings by 14.68 tonnes, or 28 percent, in November, bringing its bullion reserves to 67.19 tonnes. The addition comes on the heels of an even bigger increase in October when the South American country added 17.17 tonnes to its reserves. In September, it increased holdings by 2 tonnes. Meanwhile Turkey cut its gold holdings last month by 5.84 tonnes to 314 tonnes from October. The country allows commercial banks to use gold as collateral for loans, and changes to its balance sheet are often connected to such activity.
- This is signal, the rest is noise: Russia's Putin set for stand-off with EU on Syria, energy (Reuters)
- Boehner's Budget 'Plan B' Collapses (WSJ)
- Boehner has few options in "fiscal cliff" mess (Reuters)
- Maya "end of days" fever reaches climax in Mexico (Reuters)
- Monti Praised by Merkel Favored Less by Taxed Italians (BusinessWeek)
- China probes Yum Brands' KFC over safety of chicken productsa (Reuters)
- Looting in Aregentina: 400 Border Guard officials deployed to Bariloche over looting (BAH)
- Regulatory 'Whale' Hunt Advances - Comptroller Expected to Take Formal Action Regarding JPM's Trading Fiasco (WSJ) - but no punishment
- U.K. Banks Seen Sacrificing Lending to Meet BOE Demand (Bloomberg)
- US banks face rise in bad loans cover (FT)
- Daily Gun Slaughter in U.S. Obscured by Newtown Rampage (BBG)
- China Restricts Bond Sales by Risker Companies (BBG)
The world makes less sense every day. Little children are randomly slaughtered in their schoolrooms. Corrupt, bought off politicians pander to the lowest common denominator as their votes are only dependent upon who contributed the most to their election campaigns, which never end. Delusional, materialistic, egocentric, math challenged consumers (formerly known as citizens) live for today, enslave themselves in debt, vote themselves more entitlements, and care not for future generations. The alienation and isolation created by our sprawling, automobile dependent, technology obsessed, government controlled, debt financed society has spread like a cancerous tumor, slowly killing our country. The oligarchs will not give up without a fight. Their realization that the Brave New World method of controlling the masses has run its course has convinced them to shift their methods towards Orwell’s 1984 tactics.
- New Calls for Gun Limits (WSJ)
- Funerals begin for Newtown victims as schools confront tragedy (Reuters)
- Introducing The Stock Trader of the Future (WSJ)
- Feds knocking on 72 Cummings Ave door any minute now? SAC E-Mails Show Steve Cohen Consulted on Key Dell Trade (BBG)
- China Signals Tolerance of Slower Growth After Meeting (BBG)
- Huge mandate for Japan's LDP may be less than meets the eye (Reuters)
- UBS Said to Face $1.6 Billion Libor Penalty This Week (BBG) - shareholders pay, and nobody goest to jail
- Treasury Plan Would Cut Rates on Some Mortgages in Bonds (BBG)
- Egypt opposition calls for protests against basic law (Reuters)
- Euro Crisis Will Linger, Merkel Tells Summit (WSJ)
- Economic slowdown throughout euro zone a worry for ECB: Liikanen (Reuters)
“The Government Has Bought Into the Notion that Too Big to Fail Is Too Big to Jail”
Update: The focus now shifts to the mother, the first casualty of her son's murderous rampage, who was a "big, big gun fan" as the NYT explains, and who went target shooting with her children, one of whom had Asperger's.
As we reported last night, buried inside the NYT biopic of Newtown shooter Adam Lanza was arguably one of the most important missing pieces in the story, at least so far, which could provide clues into partially explaining yesterday's tragic loss of young life, namely that the 20 year old man suffered from Asperger Syndrome, a high-functioning form of autism (two conditions which are being merged in the upcoming update of the Diagnostic and Statistical Manual (DSM-5) manual of mental disorders), which has been traditionally associated with social communication difficulties, including flat affect, and one which in some clinical studies has been shown to have a causal link to violence. In other words, in addition to the surge in the debate over national gun control and access limitations (ignoring that the perpetrator of the biggest school mass murder in US history - the Bath School disaster - used openly purchased dynamite and no guns, also ignoring that in the US there are roughly 300 million firearms), perhaps there should also be a broad discussion as to the risks of social misadoption of children with autism and other social and behavioral disorders.
- Obama, Boehner hold "frank" meeting amid "fiscal cliff" frustration (Reuters)
- Rice Ends Bid Amid Criticism (WSJ)
- EU summit delays crucial decisions (FT)
- EU moves to cap bank bonuses at 2 times annual salary (CBC)
- Europe Wins a Battle, but Not Yet the War (WSJ)
- Banks Spurn Europe Bond Rush Amid Central Bank Loan Largesse (BBG)
- German-French Sparring Over Euro Caps 2012 Crisis Fight (BBG)
- Fed begins stress tests on bank liquidity (FT)
- Draghi’s rallying cry for new EU powers (FT)
- EU Seeks Plan to Handle Failing Banks Amid Cost Concerns (BBG)
- Berlusconi says Monti has strong EU backing (FT)
- Abe Set for Japan Victory Faces 7-Month Window to Keep Hold (BBG)
- Japan's Abe would try to keep China ties calm-lawmakers (Reuters)