Review Of Europe In 2010, And The 2011 Continental Outlook From The Rosy Prism Of Erik Nielsen; Is A New European Brady Plan Coming?Submitted by Tyler Durden on 12/19/2010 13:33 -0400
Reading Goldman's economic thoughts as recently as 1 month ago used to be insightful, and in many ways educational (this included its trading recommendations as well: after all, as the saying goes, someone who bats 0.000 - with perfect consistency - is just as valuable as someone who does 1.000). Unfortunately, ever since the firm, buckling under the demands of someone or something, or merely as an expression of its latest counter-agenda, flipped by 180 degrees, we are sad to say that it is nothing less than a complete chore to go through what is now an endless stream of Kool Aid, which while at least trying to be somewhat objective previously, is now like sitting through a Third Reich propaganda movie circa 1940. Which is why we scanned Erik Nielsen's latest "thoughts" on what happened in Europe in 2010 and what he expects to happen in 2011 with only a cursory focus. We present them here for those who care to know what the greater fools will be influenced by (to a little or greater extent). The key topics covered are: "Some thoughts on 2010, what we got right and what we got wrong; Will early 2011 be as bad as everyone seems to expect?; Reiterating my views on rescue or no rescue for Spain and Portugal; And the two key conditions for the longer term." The only really interesting observation is Nielsen's take on the European Plan B should all other measures fail: a Brady type of debt buyback. To wit: "The only real suggestion I have seen so far on this issue was the suggestions by the ECB’s Bini Smaghi, who pointed to a Brady style buyback of debt in the secondary market using loans from the official sector. I like that. As some of you know, I worked on the Brady plan at the World Bank years back, and this venue worked well in several cases." The bottom line is that even according to Nielsen, Europe has to become increasing more entrenched as not only a monetary but also fiscal union, with perpetual backstops at every stop. And since the dollar funding shortfall in the world amounts to over $6 trillion per last year's BIS analysis, said backstop will ultimately have to be funded by the Fed (with the respective consequences to the dollar as the Fed is engaged in printing nearly double digit trillion amounts of US currency). That said, Nielsen is certainly right about one thing: there will be some "amazingly interesting" events in 2011...
Buried Deep Within The Files That The Federal Reserve Released On Thier MBS Purchase Program, We Found TARP 2.0!!! More Taxpayer Money To The Banks!Submitted by Reggie Middleton on 12/16/2010 14:15 -0400
I bet that either you, or someone that you may know, weren't privvy to the TARP 2.0 tax payer funded bailout right under your noses, and the government released the evidence buried in one of over a dozen spreadsheets featuring over 70,000 transactions, with the incriminating one featuring over 340,000 cells and over 10,000 transactions. We at BoomBustBlog suppose they thought no one would be good enough at Excel to ferret it out, or maybe they believed we were all just numb over hearing a trillion here, a trillion there. You know, after a while it starts to add up to real money.
A recap of the most important events in equities, corporates, rates, vol and FX.
Bank Exposure To Bad Hedges and Counterpary Risk Is Still Quite Relevant: A 10% Decline in Derivatives Books Can Cut up to 50%+ Out Of Bank’s EquitySubmitted by Reggie Middleton on 12/03/2010 11:35 -0400
Yes, I know the banks are hedged, and that means the are all safe right. We can just ask Ambac, MBIA, Countrywide, Merrill Lynch, AIG, Lehman Brothers and Bear Stearns investors - to start with...
What is the Fallout of the Ambac Bankruptcy on the Investment Banking Industry? Robo-signing Conspiracy Theory Grows Some BallsSubmitted by Reggie Middleton on 11/15/2010 15:20 -0400
The fallout from Ambac's bankruptcy is not necessarily what many may think. The robo-signing plaintiffs and associated lawsuits will now get to see what happens when the spurned money of the big boys joins the fray!
Bill Buckler On The Incompatibility Of Money And The Modern Financial System; A Look At The Upcoming Great Unwind Now That All 'Talk' Has FailedSubmitted by Tyler Durden on 11/14/2010 15:35 -0400
In the past few weeks, there have been tomes of disjointed literature written on why the final days of the modern financial system may be approaching. Disjointed, as it goes against everything that existing economists believe in, and thus are forced to forget all they have learned from Ive League professor-written textbooks and start from scratch, i.e., acknowledge their religion has been flawed all along. Bill Buckler (author of the Privateer newsletter), who has seen this for ages, shares some of the most comprehensive views on the upcoming great financial unwind, first analyzing the case study of the aftermath of Volcker's 1979 Belgrade meeting, which was everything that Bernanke's "easy way out" QE choice was not. Buckler then analyzes the broken fabric of financial reality, and explains why at its very core, money is incompatible with everything that modern finance stands for. Lastly, Buckler looks at the aftermath of the failed G20 meetings, and concludes that: "Now that the LAST hope of an international agreement to solve an insoluble problem has been lost, it is just a matter of time before talk is followed by action." We may in fact see the first "action" today if, as some rumors are swirling Portugal or Greece may escalate to the "next level" of bailout action.
The 3rd Quarter in Review, and More Importantly How the Shadow Inventory System in the US is Disguising the Equivalent of a Dozen Ambac Bankruptcies!Submitted by Reggie Middleton on 11/10/2010 12:53 -0400
We may be forced to start taking real fundamentals into consideration, battling the Fed and QE. Shadow inventory will push heavily in the favor of fundamentals - or to put it more plainly, beware the return of reality!
Banks, Monolines, and Ratings Agencies As The Three Card Monte (Wall)Street Hustlers! Its a Sucker’s Bet, Who’s Going to Fall for it in QE2?Submitted by Reggie Middleton on 11/09/2010 13:31 -0400
Banks, insurers and ratings agencies conspired to move junk assets that were guaranteed to implode - and implode they have. They were (Wall)Street hustling, 3 Card Monte style, but what most are dismissing is that the ponzi/hustle collapse has yet to truly happen!
Can any of the tens of thousands of people working on Wall Street or in the bowels of the Federal Reserve, Treasury, Pentagon, etc. truthfully claim they "didn't know it was wrong" to mislead the citizenry, the soldiers, the investors and the buyers of their fraud? On the contrary, every one of those tens of thousands of worker bees and managers knows full well the institution they toil for is doing evil simply by hiding the truth of its operations. The entire status quo of the American Empire is built on lies. Now the dependence on lies, fraud and misrepresentaion is complete; Wall Street and the Empire itself would fall if the truth were finally revealed and properly identified as evil.
The Inevitable Has Come To Pass and Those That Insured Guaranteed Blowups Are Being Blown Up - Finally!Submitted by Reggie Middleton on 11/01/2010 09:47 -0400
Ambac was the walking dead 3 years ago, but nobody wanted to admit it. Well, as they skirt with bankruptcy today, the same story applies to the big US banks, and again nobody wants to admit it. What are the chances you will be reading a bankruptcy blog post like this one about the big banks in a year or two?
Wall Street responds to my missive on the potential of concentrated derivatives risk blowing up the banking system. Traders, salesman and financial engineers chimed in, and made some cogent points. Of course, I must rebut. It is the actual rebuttals that are probably more stinging than the original article - particularly the one concerning hedge funds. Please read on and feel free to chime in. Don't forget to bring the "Fiery Sword of Truth!"
A Step by Step Guide to Exactly How Much Derivatives Risk Each of the 5 Big Banks Actually Have, and How It Could All Go Boom!Submitted by Reggie Middleton on 10/25/2010 14:13 -0400
Blogs, Banks, Derivatives Risk and the Fiery Sword of Truth: This One Has It All - Even a step by step guide to the TRUTH!
I bet you won't see too many of these point's in your favorite broker's analyst reports!!!
Zero Hedge has been approached by an individual who participated directly in the various aspects of what is now broadly known as Fraudclosure. The below narrative recounts his experience in the due diligence process of selecting loans for the MBS pipeline. And far more than just legalese "technicalities" or a broad abrogation of property rights, as he points out there is a far more palpable issue for all those who hold Mortgage Backed Securities or other pool aggregations of mortgage loans: "we have no idea what is in those packages." This coming from the person who helped pick, diligence and sort through the various loans...
This is the introductory article for my JP Morgan quarterly opinion, which asks questions that will probably piss off management but I haven't heard anyone else ask them. I will be presenting views on this topic on CNBC's Squawk on the Street tomorrow (Monday) morning. I urge all to tune in.