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Tyler Durden's picture

The Ugly Truth For Northern Europeans





As Europe's exuberance from the LTROs fades (with Italian banks now negative YTD, Sovereigns wider than LTRO2 levels, and financials desparately divided by the LTRO Stigma) Jefferies David Zervos uncovers the sad reality that faces peripheral creditors and Northern Europeans - as we noted a month ago here. The 'success' of the LTRO monetization scheme (as opposed to EFSF/ESM transfer dabacles) is what enabled the Greek restructuring, and as Zervos notes, the losses that the big boys (Spain and Italy) need to take will not be taken via a haircut but a monetization as the number 1 rule is we must always assume that losses will be taken in a way that protects the large northern banks, northern jobs and most importantly Northern politicians. If the loss realization is not managed correctly (and losses there will be), then the ugly truth will escape but the North's large-scale vendor-financing scheme with the periphery will have to continue - even in the knoweldge that the debt will never get paid back.

The income and savings of Northern workers must be ploughed (directly or indirectly) into the rest-of-Europe or the entire structure becomes insolvent and the breaking of that social contract (that they will be looked after when they are old) will inevitably lead to revolt and nasty nationalist political forces being unleashed. The hope to avoid this is the 'wealth illusion' as the workers of the north can never be allowed to realize they have only 50% of their worth in reality. Ireland will be next on the loss-realization-monetization path but as we move from relatively small and containable sovereigns to the big-boys, the idea that Spain and Italy will roll over and accept a decade of austerity in exchange for a haircut is pure folly. These countries hold too much clout in the Eurozone and their threat of exit is a material threat to the northern jobs and hence northern politicians. The only way the northern politicians will be able to save face when it comes to Spain and Italy is through massive monetary policy accommodation. Inflation will rebalance Europe; but let's hope that the process of restating northern wealth and wage rates does not lead to revolt in the northern streets. The politicians will need to carefully execute this trade.

 
Tyler Durden's picture

Frontrunning: March 23, 2012





  • More HFT Posturing: SEC Probes Rapid Trading (WSJ)
  • Fed’s Bullard Says Monetary Policy May Be at Turning Point (Bloomberg)
  • Hilsenrath: Fed Hosts Global Gathering on Easy Money (WSJ)
  • Dublin ‘hopeful’ ECB will approve bond deal (FT)
  • EU Proposes a Beefed-Up Permanent Bailout Fund (WSJ)
  • Portugal Town Halls Face Default Amid $12 Billion Debt (Bloomberg)
  • Hidden Fund Fees Means U.K. Investors Pay Double US Rates (Bloomberg)
  • Europe Weighs Trade Probes Amid Beijing Threats (WSJ)
  • Bank of Japan Stimulus Row Fueled by Kono’s Nomination (Bloomberg)
 
Tyler Durden's picture

Guest Post: The Predatory State of California, Part 2





Everyone who believes the government is "here to help disadvantaged people" needs to wake up and ask what kind of government we have when due process has been replaced with "legal" looting. R.T. reported the income in question on his 2006 Federal and Arizona tax return. Wouldn't common sense, not to mention common law, suggest that the state of California should be required to ask the citizen who now resided in another state if the income in question had been reported in that state? How about notifying the citizen of the state's claim and his/her rights to present facts relating to the state's claim? There was no due process. How can this be legal in a nation that is nominally governed by rule of law? First the state steals the $1,343 and authorizes its parasitic predatory bag-"person" Wells Fargo Bank to steal another $100 for handling the state's theft. A week or two later the citizen is notified of the theft as a fait accompli. Now the onus is on the law-abiding citizen to attempt to reclaim his own money from a distant, all-powerful Kafkaesque state agency. How can this be legal in a nation supposedly operating under rule of law? Let's be very clear about what happens here in America on a daily basis...

 
Tyler Durden's picture

Obama Advisor, And Goldman Sachs Client, Gene Sperling Filibusters CNBC With "Shared Sacrifice" Speech In Response To Ryan Budget





Earlier we shared some perspectives on the just released Ryan 2013 budget. Shortly thereafter it was the turn of Obama aide and National Economic Council director Gene Sperling to give his spin. In what can only be characterized as an epic filibuster of none other than CNBC, Sperling spoke in length, literally, about shared sacrifice, about how math fails to matter in a new normal (and nominal) world, how trillions and trilions in underfunded welfare benefits (which even Goldman sees as untenable) are really just a matter of perspective, but mostly about how net tax revenues running below debt issuance (as reported here yesterday) are 'viable.' We leave our readers to make up their own minds. We just want to add the following highlights from a Bloomberg October 2009 article, which just may provide some more color on where and what Mr. Sperling's true allegienaces are.

 
Tyler Durden's picture

Frontrunning: March 20





  • BHP Billiton sees China iron ore demand flattening (Reuters)
  • Australia Passes 30% Tax on Iron-Ore, Coal Mining Profits (Bloomberg)
  • State Capitalism in China Will Fade: Zhang (Bloomberg)
  • Venizelos quits to start election campaign (FT)
  • Fed’s Dudley Says U.S. Isn’t ‘Out of the Woods’ (Bloomberg)
  • China Is Leading Foreign Investor in Germany (WSJ)
  • Fed undecided on more easing: Dudley (Reuters)
  • Martin Wolf: What is the real rate of interest telling us? (FT)
 
EconMatters's picture

Goldman's God Problem on Executive Pay





While SEC's rejection of a proposal by a group of religious institutions shareholders requiring an independent examination of Goldman's executive pay could be interpreted as a victory, it doesn't make the issue go away for Goldman 

 
Tyler Durden's picture

From The Archives - Bunker Hunt And 'Silver Thursday'





Back in May of last year, just after the now historic silver slamdown of "Silver Sunday" on May 1, 2011, when the metal imploded by nearly 20% in the span of seconds, a move that some considered 'normal', primarily the CFTC, we presented the extended biopic of the infamous "Silverfinger": Bunker Hunt, who attempted to corner the silver market, and succeeded, if only briefly (and they say Playboy has no good articles). Today, courtesy of Grant Williams, we have dredged up the following clip from the archives, which is a 10 minute overview of just how there is really nothing new ever in the silver market, bringing up memories of Silver Thursday, March 27, 1980, and raising questions whether last year the move in precious metals was not due to the same attempt to corner the silver and gold markets as happened 30 years prior. A far more important question perhaps is how was it that tried a redux of the Hunt brothers (and Warren Buffett of course), and when will someone take their place next?

 
Tyler Durden's picture

Guest Post: We [Don’t] Take Care of Our Own





“Wherever this flag’s flown we [don’t] take care of our own” No, Americans, singularly among people of the so-called First World, don’t take care of their own. Half of America is in poverty, and few among the other half care or much give a damn about the situation, resorting to blaming it all on a lamentably greedy “one-percent.” They prefer not to look in the mirror, naked… knowing full well how ugly they look in their obesity, exhibiting both, layers of fat and lack of cojones.... Sergeant Bales, assuming he is found to be the only soldier involved in the recent massacre in Afghanistan, will not be paying for the horrific incident, whether innocent or guilty of such a crime; such determination in military justice likely to take many years. The Pentagon’s convenient refracting transparency will make sure that such is the case. That brings us to the question of who the criminals are. Well, the criminals can be seen when we look ourselves in the mirror: the criminals are simply us. Not the President, nor Congress, nor the bemedaled pit-bulls staffing the Pentagon… they are simply the hangmen we choose to carry our criminal acts. The criminals are us who allow ourselves to be governed by a warmongering, elitist gang serving special interests and not the people, the commons. If we lack the conscience and compassion to take care of our own, should anyone expect us to take care of others… walk around the world imparting social justice? Yes, Boss, we are, unfortunately, ignoring the words in your song at our own peril.

 
testosteronepit's picture

Inflation Even in the Cost of Corruption





There's a lot of it even in Germany, but it finally has a way of measuring it

 
Tyler Durden's picture

Guest Post: Lost Principles And Social Destruction





As I look out past the near horizon of this time, and this nation, I see considerable potential for a revitalization of that which is best in humanity.  I see a population that strives for independence.  I see a return to the entrepreneurial spirit of discovery.  I see unhindered freedom of thought and action feeding a fire of creativity that inspires us to unimaginable heights.  I see new expression given license not just by the masses, but by structures of a government which truly follows the will of the common man, and not the will of an elite few.  I see America breathing full, eyes wide open and alive. However, this potential future would have to come at a considerable cost. America has so strayed from its founding roots that it now hungers; starving for lack of nutrients from its natural soil.  As with all other catastrophic societies of the past, we have been manipulated and conned into overlooking and over-rationalizing astonishing injustice and in some cases, unmitigated evil.  I frankly don’t know what else to call it.  There are some acts of malevolence that go beyond human weakness and inadequacy and reach into realms of calculation that are so cold, so soulless, there is simply no other way to describe them.  These actions and attitudes tend to run rampant in dying nations but are rarely singled out and criticized by those in the midst of the great fall.  Each begins with the loss of particular principles and inherent morals that are normally prized under more healthy circumstances, but are despised in times of chaos and uncertainty.

 
Tyler Durden's picture

Fed's Twitter Arrival uZIRPed By Hecklers, And Real Time Fed Twitter Tracker





If the Fed thought it could boldly go where hundreds of millions have gone before (in a vain attempt to be cool, hip and relevant - Twitter of course - with the @FederalReserve handle naturally), all in a quest for faux transparency and openness, which nobody who is even remotely familiar with the Fed's actions is buying, without getting a few heckles in the process, it was wrong. Unfortunately, as the currency debasement race has simply taken a short breather ahead of a presidential election and a possible regional war with wide-ranging commodity price implications, before it resumes into the frantic final lap, the below sample is merely a modest appetizer of what is yet to come.

 
Tyler Durden's picture

Guest Post: The IPCC May Have Outlived its Usefulness - An Interview with Judith Curry





As the global warming debate increases in its intensity we find both sides deeply entrenched, hurling accusations and lies at one another in an attempt to gain the upper hand. This divide within the scientific community has left the public wondering who can be trusted to provide them with accurate information and answers. The IPCC, the onetime unquestioned champion of climate change, has had its credibility questioned over the years, firstly with the climategate scandal, then with a number of high profile resignations, and now with the new “Gleickgate” scandal (1) (2) – One has to wonder where climate science goes from here?

 
Bruce Krasting's picture

Bernanke Leaks, Spoils the Punch





It was only sugar water anyway. 

 
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