Albert Edwards: At 500% Net Liabilities To GDP, It Is Too Late To Prevent The Collapse Of The G-7; Greece Is Irrelevant, We Are All Now Insolvent

For Greece, with on and off balance sheet liabilities at over 800%, it's game over. For the Eurozone, with the same ratio at about 500%, it is also game over. For the US, at 500%+, it is, you guessed it (sorry Joseph Stiglitz), game over, but since we have the printers, it will simply take a little longer. Following up on yesterday's popular post on prevailing delusions as captured by Albert Edwards' colleague Dylan Grice, we present Albert's latest outlook. Please don't read this if you want to keep believing there is any hope left for the (developed) world.

Remember "That" Crisis? Dubai CDS Rises Above 600 bps For First Time Since November 2009, Up 40 bps On The Day

Rumor: Nakheel may be going into administration. And an even ghastlier rumor: we are about to see an announcement restrictring all sovereign CDS trading. Time to reevaluate that "Dubai is contained" thesis. Just sayin'... Got Dubai CDS, bitches? Keep them while the government tells you to sell.

Roubini, Malpass Discuss The Race To The Bottom In The Sovereign Arena As Pessimism Intensifies

Perspectives on the the sovereign crisis and bond markets from Roubini, Malpass and some other talking heads. The ever optimistic David Malpass sees no fear of a failed bond auction. Roubini on the other hand, and quite logically, compares the European peripheral crisis with what is happening in California and all the other bankrupt US states. To which Malpass changes the subject to gold and jumps on our bandwagon which sees gold, not the dollar, as the ultimate fiat currency alternative. To be fair Malpass does say: "Europe is actually further down the line to a debt crisis than we are, but we are getting there very fast right now... The Federal government will have to decide how much to bail out California. That creates a lot of social tensions." Ironically, Liesman nails it: "Isn't the difference between Greece and the U.S. that the U.S. has a printing press and Greece doesn't. At some point it is no longer any good for Greece to be part of a union where it can't have any control over its monetary policy." The tide is again turning: isn't it time for Roubini to turn just a little bearish?

Daily Highlights: 2.12.10

• Asian stocks rose on Friday, lifting the MSCI Asia Pacific Index to its first weekly gain in four.
• China inflation 'blip' masks price pressures from property, credit surge.
• China orders banks to set aside more deposits to cool the fastest-growing major economy.
• Euro declines for third day on concern Greece measures may not be enough.
• Eurozone economy grows by only 0.1 percent in 4Q 2009.
• Germany, others pledged “determined and coordinated action” to help Greece.

Guest Post: Will Obama Destroy Any Hope Of U.S. Energy Independence?

The U.S. consumes nearly three times the amount of oil that it produces domestically on a daily basis. How can this statistic get any worse, you might ask?

Imagine in 2010 the Obama administration persuades Congress to pass a budget that results in a reduction of domestic oil production by 10% - 20%, making the supply/demand imbalance even more lopsided. Foreign oil companies will gain a distinct advantage over American domestic operators as an unintended consequence of these proposals.

Sound farfetched? It’s closer to reality than you may think… If it comes to pass, it will likely be the biggest structural change in the U.S. domestic oil and gas industry in decades and have far-reaching implications for investors and for the entire country.

CME Increases Gold, Silver, Palladium Margins

The CME group announced that margins for metals futures contracts on the NYMEX and COMEX will rise beginning February 12 by approximately 25% across various classes. The initial margin for 100-ounce COMEX gold futures will increase to $6,747 from $5,403, while the maintenance margin will rise to $4,998 from $4,002. For 5000-ounce COMEX silver futures, initial margins will increaseslightly less: from $6,075 to $6,750 while the maintenance margin increases by $500 from $4,500 to $5,000. Margin increases will be largest for palladium, where initial margins will risefrom $2,363 to $3,713, coupled with a maintenance margin increase of $1,000 from $1,750 to $2,750. Additionally, as the full advisory indicates, the CME increase margins by various percentage for virtually all of its product groups.

PIMCO On The Euro, Greece, And Preferred Investments In Brazil, Poland And Russia

Pimco's Michael Gomez, who recently shared the floor with Hugh Hendry, Marc Faber and Nassim Taleb, and who was likely the key voice in Pimco's recent decision to accumulate German Bunds, shares insights on the euro, Greece and new investment opportunities. Based on this Bloomberg TV interview, it is likely that PIMCO will soon be accumulating a variety of Polish and Brazilian sovereign bonds, as well as corporate bonds in Brazil, Mexico and Russia, with an emphasis on the first. With tens of billions in dry powder, PIMCO will likely have an increasingly risky EM exposure as it departs from its traditional MBS/UST portfolio.