"Spectacular Developments" In Austria: Bail-In Arrives After €7.6 Billion Bad Bank Capital Hole "Discovered"Submitted by Tyler Durden on 03/01/2015 12:59 -0500
Slowly, all the lies of the "recovery", all the skeletons in the closet, and all the bodies swept under the rug are emerging. Moments ago, Austrian ORF reported that there have been "spectacular developments" in the case of the Hypo Alpe Adria bad bank, also known as the Heta Asset Resolution, where an outside audit of Heta's balance sheet exposed a capital hole of up to 7.6 billion euros ($8.51 billion) which the government was not prepared to fill, the Austrian Financial Market Authority said. The punchline: "The finance ministry noted that creditors can be forced to contribute to the costs of winding down Heta - or "bailed in" - under new European legislation that Austria adopted this year so that taxpayers do not have to shoulder the entire burden."
"The Fed is out of control," exclaims David Stockman - perhaps best known for architecting Reagan's economic turnaround known as 'Morning in America' - adding that "people don't want to hear the reality and the truth that we're facing." Policymakers are "taking our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that's been built up and created by the American people over decades and decades." The Fed, Stockman concludes, "is a rogue institution," and their actions have led us to "one of the scariest moments in our history... it's a festering time-bomb and we're not sure when it will explode."
The US dollar firmed at the end of last week. Does this mean the bull market has resumed after the consolidatig its gains in February?
With the "Great Greek Tragedy" now behind the markets, for the time being, all eyes have turned towards the Nasdaq's triumphant march back to 5000. (The graphics department at CNBC have been working overtime on banners and bugs for when it happens....watch for them.) For now, it is all about the hopes of a cyclical upturn in the Eurozone economy supported by the ECB's QE program starting next month. Market participants have been bidding up stocks globally in anticipation that the ECB's program will pick up where the Fed left off, and the flood of liquidity will find its way back into asset prices
- Greece warns may default on IMF loan next week - Greek bank runs continue and deposits flee - The truth can be a scary thing sometimes … especially for those who put their head in the sand and ignore it ...
- Invade Syria already, we know you will: Islamic State in Syria abducts at least 150 Christians (Reuters)
- Greece Struggles to Get Citizens to Pay Their Taxes (WSJ)
- Doubts Shadow Deal to Extend Greek Bailout (WSJ)
- In surprise result, Chicago's Mayor Emanuel faces election run-off (Reuters)
- Obama vetoes Keystone pipeline bill (Reuters)
- Another sign of the top: Cushman & Wakefield Going Up for Sale (WSJ)
- Lure of Wall Street Cash Said to Skew Credit Ratings (BBG) ... and threat of DOJ lawsuits also
- Oil rises to $59 as Saudis say demand growing (Reuters)
"For me the shorting opportunity looks as great as it was in 07/09, if only because people are still looking at what is hap-pening and believe that each event is an individual, isolated event. Whether it’s the oil price fall or the Swiss franc move, they’re seen as exceptions. ... we used all our monetary firepower to avoid the first downturn in 2007-09, so we are really at a dangerous point to try to counter the effects of a slowing China, falling commodities and EM incomes, and the ultimate First World effects. This down cycle is likely to be remembered in a hundred years . Sadly this down cycle will cause a great deal of damage, precisely because it will happen despite the efforts of the central banks to thwart it."
Outlook for the US dollar and other markets in the week ahead.
Here's a plan where the drachma will be more desirable than the euro after Greece defaults on anything euro denominated and backs its redeemable drachma with fractional gold. Upon default euros drop, drachma pops!
When Everybody Thinks They're Right, They're Almost Guaranteed to be Wrong! I Think This Is The Biggest Bubble In World HistorySubmitted by Reggie Middleton on 02/19/2015 09:31 -0500
But guess what? It's really, really, really different this time! In this one short post, there's more than enough indisputable evidence of a bubble than anyone can justifiably ignore.
Is the SNB buying Euros to keep the mirage alive that Grexit is "managable"? EURCHF is up dramatically in the last 2 days, retracing 60% of the Swiss Franc's valuation surge against the USD...
- Greece to submit loan request to euro zone, Germany resists (Reuters)
- Ukrainian forces start to quit besieged town (Reuters)
- Bank of Japan maintains policy, no surprises (FT)
- China Considering Mergers Among Its Big State Oil Companies (WSJ)
- Soros Shifts to Europe, Asia as Investors Cut U.S. Equities (BBG)
- Putin tells Kiev to let troops surrender as Ukraine ceasefire unravels (Reuters)
- Venezuela Squanders Its Oil Wealth (BBG)
- Swiss prosecutor raids HSBC office, opens criminal inquiry (Reuters)
Technical outlook in the week ahead for the dollar, 10-year yields, oil and S&P 500.
Gold and government bonds now cost about the same to own, but governments actively trying to lower the value of their bonds and bank accounts while gold is rising wherever trouble erupts. The logical conclusion is that if gold and cash both cost the same to own, then maybe gold — which has held its value over millennia while every previous fiat currency has evaporated — is the better bet.