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BBC Does It Again: "In The Absence Of A Credible Plan We Will Have A Global Financial Meltdown In Two To Three Weeks" - IMF Advisor

Tyler Durden's picture





 

A week after the BBC exploded Alessio Rastani to the stage, it has just done it all over again. In an interview with IMF advisor Robert Shapiro, the bailout expert has pretty much said what, once again, is on everyone's mind: "If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system. We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world. This would be a crisis that would be in my view more serrious than the crisis in 2008.... What we don't know the state of credit default swaps held by banks against sovereign debt and against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the exposure of British banks is to the Ireland sovereign debt problems."

But no, Morgan Stanley does, or so they swear an unlimited number of times each day. And they say not to worry about anything because, you see, it is not like they have any upside in telling anyone the truth. Which is why for everyone hung up on the latest rumor of a plan about a plan about a plan spread by a newspaper whose very viability is tied in with that of the banks that pay for its advertising revenue, we have one thing to ask: "show us the actual plan please." Because it is easy to say "recapitalize" this, and "bad bank" that. In practice, it is next to impossible. So yes, ladies and gentlemen, enjoy this brief relief rally driven by the fact that China is offline for the week and that the persistent source of overnight selling on Chinese "hard/crash landing" concerns has been gone simply due to an extended national holiday. Well, that holiday is coming to an end.

By the way, Reuters, Shapiro is not a Yes Man -we'll spare you the ruminations.

h/t Scrataliano

 


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Thu, 10/06/2011 - 19:16 | Link to Comment James
James's picture

Classicalib - Here's a link explaining nickels

http://www.survivalblog.com/nickels.html

Fri, 10/07/2011 - 02:49 | Link to Comment ClassicalLib17
ClassicalLib17's picture

Thank you kindly, James.  CL

Fri, 10/07/2011 - 03:06 | Link to Comment saiybat
saiybat's picture

Forget nickels. You want a store of value for when shit hits the fan? Buy used guns and don't overpay. If shit doesn't hit the fan then you can sell them for what you paid plus inflation within a few years.

 

Food is looking real bullish too

Thu, 10/06/2011 - 20:04 | Link to Comment tmosley
tmosley's picture

He probably means war nickels, which had significant silver content.  1982 pennies are too bulky unless you just don't have the money to buy significant amounts of silver.

Thu, 10/06/2011 - 22:40 | Link to Comment jomama
jomama's picture

i think he means so he can give you a knuckle sandwich with them.  i'll be cheering him on!

Thu, 10/06/2011 - 16:44 | Link to Comment Cynical Sidney
Cynical Sidney's picture

i'd like to see a trigger event that make all derivative counterparties default;

somebody remind me how much money is in the derivative market again?

Thu, 10/06/2011 - 16:52 | Link to Comment Dingleberry
Dingleberry's picture

$100,000,000,000,000,000.37  (or thereabouts).......

Thu, 10/06/2011 - 17:21 | Link to Comment wombats
wombats's picture

Are you sure about the .37?  Do you have a source for that?  Couldn't it be closer to .66  or worse yet 666?

Thu, 10/06/2011 - 17:51 | Link to Comment agent default
agent default's picture

Is that silver or gold?  Please be clear when specifying fiat prices for PMs, in the very soon to come future.

Thu, 10/06/2011 - 16:53 | Link to Comment High Plains Drifter
High Plains Drifter's picture

http://3.bp.blogspot.com/-y0ZAR1qmG6c/Tocz64x8uJI/AAAAAAAASBQ/YrhGXgzuah...

top 25 holders as of june 2011 about 333 trillion.........

Thu, 10/06/2011 - 17:03 | Link to Comment knukles
knukles's picture

And what was it yesterday that somebody said there was a 32.333% chance of something going wrong?  Else everything was fine and dandy!

Thu, 10/06/2011 - 17:05 | Link to Comment High Plains Drifter
High Plains Drifter's picture

did you listen to kyle bass take david faber to school yesterday on cn bullshit?  he was not painting a very rosey picture either....

Thu, 10/06/2011 - 17:19 | Link to Comment knukles
knukles's picture

Tee hee heh...
Even the PermaBulls are having trouble.
Matter of fact, seems the whole fucking world is having second thoughts.
There's something drastically fucking wrong and everybody knows it... but cannot collectively put their finger thereupon.

"Careful, Alice.  That Rabbit Hole Gets Mighty Deep"©

Thu, 10/06/2011 - 17:23 | Link to Comment jesse livermoore
jesse livermoore's picture

i rece3ntly read an article coinflation.com that kyle bass bought a million dollars worth of nickels

Thu, 10/06/2011 - 18:00 | Link to Comment gmrpeabody
gmrpeabody's picture

Say what?

Thu, 10/06/2011 - 17:23 | Link to Comment jesse livermoore
jesse livermoore's picture

i rece3ntly read an article coinflation.com that kyle bass bought a million dollars worth of nickels

Thu, 10/06/2011 - 18:55 | Link to Comment knukles
knukles's picture

Come again?

Thu, 10/06/2011 - 17:56 | Link to Comment Cynical Sidney
Cynical Sidney's picture

thanks drifter for the chart

333 trillion dollars of notional derivative contracts just from the top 25 banks, people need to realize that these are highly leveraged, speculative bets on the future of our economy. 333 trillion dollars is roughly 5 times the world's GDP, doesn't matter how many times we bail them out, there is simply not enough money in the world to satisfy their speculative bets. These bets completely distorts capital and equities markets and expose us to enormous counterparty risks; in addition, these bets leverages our mounting national debt and make it virtually impossible for us to meet our future obligations.  people might argue that the notional figure includes both short and long positions (double accounting), but please bear in mind that this is only the top 25 holders of derivative contracts and the overall size is much bigger.

shapiro told the truth about the risks in the market, but he doesn't tell you that the banksters are the ones who created all of these risks. banks can cook the books and keep getting bailouts however all the risks will not go away unless these speculative contracts are settled or unwound; until then they want us to continue to bail out the banks

Thu, 10/06/2011 - 18:00 | Link to Comment RickyBobby
RickyBobby's picture

You will get different answers everywhere. Approx. $15T notional CDS held by US banks. All these values are notional so not real VaR. Almost all this is held by TBTF and the backstop is bankrupt.

Thu, 10/06/2011 - 19:19 | Link to Comment Cynical Sidney
Cynical Sidney's picture

the end is near; i wouldn't not recommend buying cds as a protection. it'll be a 'black swan' event, one which the banksters set in motion.

my theory is that, during periods of economic down turn, it would benefit the middle class to increase reserve requirement to a 50% fractional reserve banking system, then use some bimetal money standard to back the dollar. should our creditors become aggrieved, we can indefinitely postpone the maturity on all sovereign debts.

get physical silver/gold, do not get worthless paper contracts, and hang on to your hat. in a black swan contagion event paper contracts are next to nothing, agreements will never be satisfied. on a side note, should you decide to bury a pot of gold in your backyard when no ones looking, make sure you disclose its location and gps coordinates in your will.

Thu, 10/06/2011 - 22:18 | Link to Comment jekyll island
jekyll island's picture

bimetal standard is too hard to implement because the variable ratio between the two metals can create price uncertainty.  Just pick one and go with it. 

Thu, 10/06/2011 - 18:37 | Link to Comment disabledvet
disabledvet's picture

Like I said..."a real copper penny." that should do it!

Thu, 10/06/2011 - 16:44 | Link to Comment Henry Chinaski
Henry Chinaski's picture

Not a problem.

An (Anonymous) internet terrorist attack on the (NYSE) financial system could resolve a global financial meltdown and kill free speech in one fell swoop. 

"Sorry folks, the distruction was so bad that the monetary system must be reset.  The internet will be locked down to protect you from further harm.  We will not sleep until the terrorists are brought to justice.  Goverment assistance will be provided to those in need."

Thu, 10/06/2011 - 16:57 | Link to Comment IQ 145
IQ 145's picture

I upticked you back to neutral. Your post shows originality and perfect cynicism; if not this year; maybe next year.

Thu, 10/06/2011 - 20:34 | Link to Comment Henry Chinaski
Henry Chinaski's picture

With an IQ of 145, maybe I could spell destruction....

Thu, 10/06/2011 - 20:37 | Link to Comment Henry Chinaski
Henry Chinaski's picture

The people with nothing to lose won't care.  The people with assets will have them confiscated, unless they can hire an army.  Back to normal.

Thu, 10/06/2011 - 17:07 | Link to Comment moldygoat
moldygoat's picture

I totally agree. What other end game is there for asbestos filled buildings quadrillions in derivatives. Reset is the only feasible course of action. Global government and global police will be there to save us, just in time. In order to rebuild they will probably confiscate PM's as well and tell us its for national global security. We are turning a big corner soon, 2012 is the conditioning scapegoat on the trail to cognitive dissonance. In the end, we all lose.

 

Thu, 10/06/2011 - 19:24 | Link to Comment saiybat
saiybat's picture

It always have been and always will be that a few will exploit the masses, enslave them, or outright kill them. There really is no hope and we are lucky enough to be born in a pivotal point in history. The west has unprecendeted amounts of elderly dependents and within a few decades with or without manipulation the system would have collapsed on itself. There's not enough working age people to support the growing elderly population and within a decade the old will be 50%+ of the population. Reproduction has been deliberately discouraged and has created this demographic mess. It's not going to be pretty and the elderly will be hit the hardest. If you have grand parents that live off a pension or social security then encourage them to stock up on food and medicine. They will need it. As for the rest of us capable of labor we will have a chance.

All of this that we're going through has happened before. You'll find that society will become more and more farcical and decadent right before the purge comes. Don't participate in demagoguery, don't look for heroes because there won't be any, and don't have any hope in politics, reform, or revolution.

Thu, 10/06/2011 - 20:25 | Link to Comment Stax Edwards
Stax Edwards's picture

Man up Pussy

Thu, 10/06/2011 - 20:34 | Link to Comment saiybat
saiybat's picture

Tell that to your grandma

Thu, 10/06/2011 - 20:45 | Link to Comment AmericanFUPAcabra
AmericanFUPAcabra's picture

My grandparents say the only thing that got them thru the depression was a tight knit community that bartered with eachother. Doctors were paid in food and services when families couldnt provide money. Fix a truck for a few chickens. They fell back on the oldest known business to man (next to prostitution) : Barter.

And the way things are shaping up here it looks like we are headed that way whether we want to accept it or not. People with an actual "skill" or "trade" will make it through. Desk clerks and pass the buck skim the cream suits wont have anyone to work for and no one to skim from. They will starve. 

Thu, 10/06/2011 - 20:08 | Link to Comment Absinthe Minded
Absinthe Minded's picture

Confiscate PM's over my dead body. I guarantee I'll take a few with me.

Thu, 10/06/2011 - 20:15 | Link to Comment New_Meat
New_Meat's picture

I've always been reminded of the "Men In Black" scene, where the Illegal Alien Invader says:

"Your proposal is Acceptable!"

- Ned

Thu, 10/06/2011 - 16:44 | Link to Comment Spider
Spider's picture

2-3 weeks??? Come on who thinks that far ahead...

Thu, 10/06/2011 - 16:46 | Link to Comment CH1
CH1's picture

Honestly, I can't tell... they've gone longer than I would have thought. Nice, cause it gives me time to pick up a little more silver.

Thu, 10/06/2011 - 20:49 | Link to Comment AmericanFUPAcabra
AmericanFUPAcabra's picture

Forget what post but someone linked in the last day or 2 that the us mint sold some 740,000 silver eagles the other day- record breaker.

Thu, 10/06/2011 - 16:55 | Link to Comment HD
HD's picture

Steve Jobs does...oh wait.

Thu, 10/06/2011 - 16:44 | Link to Comment centerline
centerline's picture

Tanks in the Streets!  Run for your lives!

Thu, 10/06/2011 - 16:48 | Link to Comment mynhair
mynhair's picture

Hell no, snag one.  Offer up your neighbor's wife.

Thu, 10/06/2011 - 17:14 | Link to Comment iDealMeat
iDealMeat's picture

Offer up your neighbor's wife.

 

If my neighbor did that, I'd shoot him..  Then ask my wife if his widow can join us..

Then I'd take the tank..

who's side you on?

Thu, 10/06/2011 - 17:14 | Link to Comment mynhair
mynhair's picture

My neighbor is a Lib that never learned the art - of speaking in complete sentences.

Thu, 10/06/2011 - 17:18 | Link to Comment centerline
centerline's picture

Actually, I dont really need another woman.  But a TANK!  Now that is cool.  Sounds like a good trade.  LOL.

Thu, 10/06/2011 - 17:28 | Link to Comment Long-John-Silver
Long-John-Silver's picture

At 3 gallons to the mile make sure they deliver it where you will be using it.

Thu, 10/06/2011 - 18:45 | Link to Comment Incubus
Incubus's picture

good luck finding fuel for that shit. 

 

 

Thu, 10/06/2011 - 20:11 | Link to Comment Absinthe Minded
Absinthe Minded's picture

I'd prefer a 3 wheeler Schwinn with a basket full of RPG's.

Thu, 10/06/2011 - 21:12 | Link to Comment Milestones
Milestones's picture

Still like our handle and now tour vision and attitude.        Milestones

Thu, 10/06/2011 - 18:40 | Link to Comment disabledvet
disabledvet's picture

More like "Time Warner is on the air."

Thu, 10/06/2011 - 16:44 | Link to Comment tekhneek
tekhneek's picture

Followed by more rumors of a credible plan being completed by the IMF/ECB

...followed by a big-ass hot cup of reality.

Thu, 10/06/2011 - 16:47 | Link to Comment SheepDog-One
SheepDog-One's picture

Yep, daily horrible news, offset by another flurry of rumors about how its all fixed...just a fools game is all this rigged game is.

I cant wait for the morning when it all really does collapse big time, and everyone is wailing about how theyre stuck and how unfair it all is. Dance with the devil and party but dont come crying to me over your 3rd degree burns.

Thu, 10/06/2011 - 17:12 | Link to Comment knukles
knukles's picture

Stop it! Stop it!  I can't take this any more!
Everything is fixed, OK, neato-keeno, don't worry be happy, sunshine and butterflies, rainbow colored unicorn shits being called Skittles and eaten by small school children as processed healthy food, mercury in vaccines, chemical shit dumped in the air, aspartame is good for you, there is no radiation from Japan and cow farts are under control so if we just pay more taxes so the gubamint can run more efficiently then everyfuckingthing will be FiNe.

All this negativism is just a bunch of greedy poverty stricken people trying to talk the market down so that they have a chance to buy in cheeeeep.
Cheep I tell ya!  Cheep!
It's all a fucking plot to undermine the shorts and doomsayers.
Cheep, get em while they're hot!

Aaarrrrrrrrrrraaaaggggggggghhhhhhhhh!
Everything is fucking broken!

No wonder so many people do drugs and alcohol to escape from reality.

Thu, 10/06/2011 - 20:14 | Link to Comment Absinthe Minded
Absinthe Minded's picture

That sounds almost crazy enough to be reality.

Thu, 10/06/2011 - 21:08 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

In a world gone mad...

http://www.youtube.com/watch?v=cF5qwyO05JE

 

Thu, 10/06/2011 - 18:42 | Link to Comment disabledvet
disabledvet's picture

Who has a big ass?

Thu, 10/06/2011 - 19:29 | Link to Comment HedgeCock
HedgeCock's picture

If you know what's good for you, anybody but the wife.

Thu, 10/06/2011 - 16:45 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

Crisis, meltdown, collapse, Armageddon - heard it before so many times. On the abyss, the freaks always save their souls, at the cost of all the others. Boring world we live in.

Thu, 10/06/2011 - 16:48 | Link to Comment catacl1sm
catacl1sm's picture

Why are you here again?

Thu, 10/06/2011 - 16:50 | Link to Comment mynhair
mynhair's picture

Cuz he's bored, duh!

Thu, 10/06/2011 - 16:50 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

To downplay all the horrorstories.

Thu, 10/06/2011 - 16:54 | Link to Comment catacl1sm
catacl1sm's picture

To what end? Do you think you'll 'convert' some to your religion of 'everything is ok'? Shill.

Thu, 10/06/2011 - 18:48 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

The facts will prove me right. After all, the US is not in default too, despite the many doomprophets like Bill Gross. The dollar even rises, now Bernanke says to lower his money press. Mind the True Finns, German regional elections, Dutch resistance in parliament, Finnish collateral and now Slovakian grumbling: it is or will all be over, the euro survives. We're still alive.

Thu, 10/06/2011 - 21:25 | Link to Comment tsx500
tsx500's picture

were u dropped on your head much as a baby ?

Thu, 10/06/2011 - 16:55 | Link to Comment Tyler Durden
Tyler Durden's picture

Here is a horror story for you:

Did you have money in Dexia stock a week ago? Yes? Well, you can't sell the stock because it is now halted virtually indefinitely. And when you can trade...that stock will be worthless.

If it was all your money, you are broke. Period. End of story.

Where besides Zero Hedge did you hear warnings about Dexia?

Thu, 10/06/2011 - 16:58 | Link to Comment catacl1sm
catacl1sm's picture

@Looking - BUUUUUURRRRNNNN!!!!!

Thu, 10/06/2011 - 17:00 | Link to Comment IQ 145
IQ 145's picture

Hurray !!

Thu, 10/06/2011 - 17:09 | Link to Comment Broomer
Broomer's picture

I saw this happening. I remember a couple of retirees in CNN International saying they lost everything because they invested everything in Lehman Brothers stocks.

Thu, 10/06/2011 - 17:11 | Link to Comment SpaDe
SpaDe's picture

This is one of the main reasons that drew me to this site. I find information here that is usually not on other sites.

Thu, 10/06/2011 - 20:23 | Link to Comment Element
Element's picture

But it's a self-fullfilling prophecy ... zh instigated vicious rumors killed Dexia ... and shunted innocent bankers out of their bonus slot ... just cruel!

/sarc

Thu, 10/06/2011 - 17:14 | Link to Comment knukles
knukles's picture

Well the very day (I believe) that trading was halted Goldman downgraded Dexia from hold to sell!

Gee that's swell Mr. Goldman!
Na nan an an naaaana

Thu, 10/06/2011 - 17:21 | Link to Comment Executioner
Executioner's picture

Not only Dexia, but all others (shearch them here at ZH). All of them will be worthless. Let's all sell short as if there is no tomorrow.

Thu, 10/06/2011 - 17:57 | Link to Comment tekhneek
tekhneek's picture

I will ignore the inner voice telling me to go long becuase of your comment and the underlying fundamentals.

Besides, you can't short them. Didn't you hear?

Thu, 10/06/2011 - 19:12 | Link to Comment Executioner
Executioner's picture

tekneek, Dexia is not the only bank tyler has been talking about. Of course I did not mean shorting Dexia, since it's already dead.

Thu, 10/06/2011 - 17:59 | Link to Comment agent default
agent default's picture

Short the whole system and go buy some PMs.  They cannot afford to let BOA, MS or any of the European garbage cans fail at this point, they will monetize one way or another.  Debt is a numerical problem, I owe you $100 here is $100, never mind what it's worth, as long as you balance your books.  That's the bottom line, ink or bust.

Thu, 10/06/2011 - 17:24 | Link to Comment PY-129-20
PY-129-20's picture

Yeah and if this does not creep you out. I want you to take a closer look, my friend. It turns out that there is more about this Dexia stuff. And Tyler didn't even mention it. I mean this is disgusting. Now think about those poor Belgian people and how stupid they must feel now. A bank named after a parasitoid...I mean...the horror! Now could someone please pass me the beer nuts? Thanks...

http://en.wikipedia.org/wiki/Dexia_%28fly%29

(nah)

Thu, 10/06/2011 - 17:54 | Link to Comment tekhneek
tekhneek's picture

Tyler, you see this?

06.10.11
Beginning of exclusive negotiations for the disposal of Dexia Banque Internationale a? Luxembourg
Dexia confirms having entered into exclusive negotiations with an international group of investors in which the State of Luxembourg will participate for the disposal of Dexia Banque Internationale a? Luxembourg.
The Board of Directors of the Dexia group will take a decision on a potential offer by the end of the exclusive period.
* Dexia is a listed company. This press release contains information subject to the legal provisions regarding the transparency of listed companies.

source: http://www.dexia.com/EN/journalist/press_releases/Documents/CP_%20201110...

Oh and just in case you haven't laughed: http://commodityzen.com/dexia.png

Pay attention to the slide. Nothing else is really relevant in that picture.

Thu, 10/06/2011 - 20:17 | Link to Comment saiybat
saiybat's picture

I love that phrase sustainable development. It's bureaucratese for corporate fascism.

Thu, 10/06/2011 - 18:05 | Link to Comment Freebird
Freebird's picture

Hey TD, any chance of a "silver about to severely crash" story....it would be mighty helpful LOL

Thu, 10/06/2011 - 18:44 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

Collapsing stock is not a total financial collapse. A further "solution" is underway:
http://www.project-syndicate.org/commentary/gros27/English

No collapse, of course.

Thu, 10/06/2011 - 19:27 | Link to Comment Big Ben
Big Ben's picture

Gros proposes that the EFSF be registered as a bank so that it can borrow money from the ECB to purchase government bonds from weak Euro countries. But the Germans would need to approve this. And they have strongly protested government bond purchases by the ECB on the grounds that monetizing government debt is likely to lead to inflation. In fact, two German members of the ECB board (Axel Weber and Jurgen Stark) resigned over the issue in September. Do you really believe that the Germans are going to permit this?

That dog won't hunt.

Thu, 10/06/2011 - 18:47 | Link to Comment unununium
unununium's picture

Thanks also go to Mark Pittman who sued the Fed and found out how much trouble Dexia was in.

 

Thu, 10/06/2011 - 19:19 | Link to Comment lynnybee
lynnybee's picture

......... luv ZEROHEDGE / admire TYLER / smartest person ever / priviledge to read his website .     thank you, dear sir.

Thu, 10/06/2011 - 22:27 | Link to Comment lano1106
lano1106's picture

it is really sad for small investors.

 

How about big investors? Is it known who will lose the most out of this?

Fri, 10/07/2011 - 04:53 | Link to Comment Archduke
Archduke's picture

I don't have a troy ounce of pity for the shareholders.  That's a risk they took voluntarily, and it was up to them to do(due) their dilligence.

The real problem is depositor and custodian funds.  Dexia holds pension and retirement funds front the various caisse de depots and credit local,

and is custodian to a myriad of funds traded by all the big french, belgian, europeaan, and north american banks through RBC Dexia.

 

 

Thu, 10/06/2011 - 17:56 | Link to Comment Dixie Rect
Dixie Rect's picture

Still long Worldcom?

Thu, 10/06/2011 - 18:24 | Link to Comment bmwm395
bmwm395's picture

hey I can't find my LU

 

Thu, 10/06/2011 - 16:48 | Link to Comment centerline
centerline's picture

Boring mostly, with sudden and mostly unexpected moments of terror!  Realistically, it seems to me more akin to phase transition points for lack of a better term.  We are just building energy (and containing reality) to such a degree that either a new reality is formed (the plan) or we experience an explosive blow-back event (the inevitable).

 

 

Thu, 10/06/2011 - 16:52 | Link to Comment SheepDog-One
SheepDog-One's picture

And training the real sheeple, the 401K/Pension fund brigades, to be calm and expect their funds to be recovered quickly....cant have them getting too nervous and selling.

Thu, 10/06/2011 - 16:56 | Link to Comment catacl1sm
catacl1sm's picture

Hedgies wouldn't like the competition. When I tell people the game is rigged and to get out of their 401k's they look at me like I have two heads. Oh well, as long as they don't come knocking on my door when the grocery store shelves are empty. All they'll get to eat is 30-06.

Thu, 10/06/2011 - 17:04 | Link to Comment centerline
centerline's picture

The private and public pensions funds dont stand a chance.  The only reason those big, juicy steaks haven't been carved up served with a nice merlot is because it would cause the sheeple to panic, munis would implode, etc.  It is sort of like the trip wire on the financial booby trap.  Those steaks are on the grill though.  

Thu, 10/06/2011 - 17:11 | Link to Comment catacl1sm
catacl1sm's picture

The flattend UST curve is going to kill them too (pensions). They rely on those for guaranteed returns. Essentially, its a game of help the banks at the expense of the fixed income retired.

They can't hide pension losses forever. I don't think it will matter too much though, Greece will bring shit down long before the sheeple discovered that their pensions are insolvent and no more checks are coming, but they'll be able to blame on the Greeks now.

Thu, 10/06/2011 - 17:16 | Link to Comment centerline
centerline's picture

No doubt.  It is going to push the yield starved into riskier and riskier places.  Lambs to the slaughter.  

Thu, 10/06/2011 - 17:29 | Link to Comment catacl1sm
catacl1sm's picture

Isn't that the plan?

Thu, 10/06/2011 - 18:11 | Link to Comment Lord Welligton
Lord Welligton's picture

Nice analogy.

Thu, 10/06/2011 - 17:02 | Link to Comment SheepDog-One
SheepDog-One's picture

Not boring if you owned Dexia stock, youre now sitting at -0-. Same for many other stocks...these 'market' melt ups are just the show on the curtain, whats going on behind the curtain is far different.

Thu, 10/06/2011 - 18:00 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

Soon enough your handle will be ShittingMyPantsWithAmazement.

 

 

Thu, 10/06/2011 - 18:45 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

You are a fun new guest at the party.

Thu, 10/06/2011 - 16:46 | Link to Comment Parth
Parth's picture

Lets take a philosophical view of this on Steve Jobs passing away he did remind us of an important fact "death is the greatest invention, it makes way for the new". So let the world collapse go to war and burn. It will renew then. Isn't eastern spiritual thinking great? Karma is a bit#h but part of the wheel of life and death and rebirth!

Thu, 10/06/2011 - 16:48 | Link to Comment Parth
Parth's picture

And oh if we take the Western philosophical approach we will get Santa Claus this Christmas to bail the banks. Now if you believe that.......

Thu, 10/06/2011 - 18:25 | Link to Comment Spastica Rex
Spastica Rex's picture

Santa is a thinly disguised SATAN for children. Just rearrange the letters -- see?

Thu, 10/06/2011 - 20:08 | Link to Comment HedgeCock
HedgeCock's picture

That's why he needs to be eliminated.

http://www.youtube.com/watch?v=9AbwKfeKx9E

Thu, 10/06/2011 - 17:06 | Link to Comment centerline
centerline's picture

Or as George Carlin said (paraphasing of course)... we are here to make plastic. When the world has enough plastic, Mother Nature will get rid of us and some other creature will have it's chance to rule the Earth.

Thu, 10/06/2011 - 17:14 | Link to Comment 11b40
11b40's picture

Yeah.  Too bad we didn't take that path in 2008 and let a big chunk of the financial industry make way for 'renewal'.

Thu, 10/06/2011 - 16:46 | Link to Comment High Plains Drifter
High Plains Drifter's picture

look out below tonight and tomorrow on precious metals. such news is bound to cause them to fall like a rock...........

Thu, 10/06/2011 - 21:21 | Link to Comment zorba THE GREEK
zorba THE GREEK's picture

I hope so, I just got a windfall and I'm looking for a good place to get in.

Thu, 10/06/2011 - 16:47 | Link to Comment qussl3
qussl3's picture

The ECB basically guaranteed unlimited liquidity for its banks for the next 12mths, how the heck are we going to get a banking crisis?

Pair that with the swap lines kicking in mid month, we probably wont even see a dollar spike.

Assuming the ECB takes PIIGS bonds, how this does blow up in the next 12 mths?

Or am i completely misunderstanding the LTROs?

Thu, 10/06/2011 - 16:50 | Link to Comment catacl1sm
catacl1sm's picture

unlimited liquidity = unlimited printing = unlimited inflation = loss of faith in Euro = hyperinflation

Thu, 10/06/2011 - 16:54 | Link to Comment qussl3
qussl3's picture

Hyperinflation doesnt happen without velocity.

Liquidity stays stuck on balance sheets now, unless it finds its way out as credit and into the commodities, i dont see how hyperinflation is a possibility.

It's not as if the Greeks are printing EURs and spending it willy nilly.

This liquidity is just a juice to keep the insolvents from grinding to a halt.

Thu, 10/06/2011 - 17:03 | Link to Comment SheepDog-One
SheepDog-One's picture

Who has the money to pay for hyperinflation? Its all contained in a pressure cooker right now....pressure increasing every minute.

Thu, 10/06/2011 - 17:03 | Link to Comment catacl1sm
catacl1sm's picture

True, but hyperinflation is also a psychologically driven event. The very act of having to 'recapitalize' banks at tax-payer expense could very well drive people to remove cash from banks, further driving liquidity requirements of the banks, and forcing people to find something to store their money in. In Weimar this become everyday items, whether they needed them or not. At least they could barter with ordinary items while value of the paper was lost every minute.

 

Greece can't print EURs. I believe the ECB is the only entity that can do that. As pointed out before, Greece is in a death spiral.

Look at Argentina circa 1990 for a more recent example.

Thu, 10/06/2011 - 17:19 | Link to Comment qussl3
qussl3's picture

Exactly, noone but the ECB can print and right now any EURs they print in exchange for collateral is likely put back on deposit with the ECB itself, evidence the spike in deposits with the ECB.

The banks may know its all BS, but they sure as hell arent going to go buy gold with the cash instead, cos that's as good as breaking ranks and panicking.

With regard to people spending their way to hyperinflation, unless europeans are MUCH richer nominally than i'm aware of, its pretty much impossible for bread to hit 100k EUR anytime soon.

People may think the EUR is BS, but i dont think we'll have hyperinflation, instead we might see what is happening in Greece, community based hybrid barter or local currencies like the peseta making a comeback.

The EUR may be illegitimized by people recognizing BS accounting, but unless they have the nominal EUR to spend, no hyperinflation.

Thu, 10/06/2011 - 22:33 | Link to Comment lano1106
lano1106's picture

interesting.

 

Fractionnal banking system works like leveraging. It is fun one way and painful the other way around!

 

Fri, 10/07/2011 - 00:17 | Link to Comment FeralSerf
FeralSerf's picture

How can they remove their cash from the banks if there isn't currency available?  They can only buy other financial assets like stocks and bonds (or gold and silver which is becoming increasingly unavailable).

Argentina had currency, both their own toilet paper pesos and also a lot of USDs floating around so it's not a good example.

Thu, 10/06/2011 - 16:52 | Link to Comment centerline
centerline's picture

IMO, the guarantee is conjecture. The mechanism for unlimited liquidity is still MIA. The moment they actually shake their money maker, everything (except bonds) will explode to the upside.

Thu, 10/06/2011 - 17:02 | Link to Comment qussl3
qussl3's picture

Assuming i understand the LTROs correctly, cant the banks just offload ALL PIIGS debt to the ECB for the next 12-13mths?

Doesnt this effectively transfer the risk of default onto the ECB?

Or is the real risk all the CDS?

Perhaps MS is the new AIG?

Thu, 10/06/2011 - 17:08 | Link to Comment catacl1sm
catacl1sm's picture

Its both! Just like in the US in 2008. Banks failed and then AIG couldn't make good on the CDS's.

I don't think Germany will allow the ECB to take all of the risk. The more EURs that ECB has to create (or get from sovereign nations) hurts the tax payers and businesses in the EZ. Germans do NOT want their currency further debased.

Besides, even offloading the banks' current Greek Bonds does nothing for Greece. It still needs buyers for it's bonds to fund it's government, or more cash from ECB, IMF, etc...

Thu, 10/06/2011 - 17:55 | Link to Comment Translational Lift
Translational Lift's picture

Just like in the US in 2008. Banks failed and then AIG couldn't make good on the CDS's.

Yea....then the Gubmnt (us) bailed out the Ponzi scheme known as AIG/GSucks.............

Thu, 10/06/2011 - 17:12 | Link to Comment centerline
centerline's picture

From what I know, the mechanism(s) that would allow the actual transfer of those debts to the ECB simply does not exist because there is no way a mutual agreement will be struck.  And, all attempts thus far to create workarounds have failed for the same reasons.

Thu, 10/06/2011 - 17:18 | Link to Comment 11b40
11b40's picture

Maybe my info is incorrect, but I thought the ECB lacked the ability to print unlimited amounts of Euro's, unlike our FED.  Are they not more accountable to the member countries?

Thu, 10/06/2011 - 17:25 | Link to Comment qussl3
qussl3's picture

Makes sense LTROs are just a swap after all no?

If your collateral blows up, i guess your still on the hook.

ECB QE would be a completely different kettle of fish.

The rally seems even more ill advised now.

Thu, 10/06/2011 - 19:27 | Link to Comment anyways
anyways's picture

what u have is a bunch of sovereign junk bonds, nobody can ever pay back. Only this giant hole is guaranteed by the ECB and the FED. The worldwide ponzi is close to collaps.

Thu, 10/06/2011 - 16:48 | Link to Comment jmcadg
jmcadg's picture

Let's make it a week or two!

Thu, 10/06/2011 - 16:49 | Link to Comment nyse
nyse's picture

Hoax. (j/k)

Thu, 10/06/2011 - 16:59 | Link to Comment SheepDog-One
SheepDog-One's picture

He's just trying to get attention for his book I bet. 

Thu, 10/06/2011 - 17:01 | Link to Comment nyse
nyse's picture

+1 Exactly!!!

Thu, 10/06/2011 - 17:43 | Link to Comment Citxmech
Citxmech's picture

Because everyone talks their book by making a prediction that could make them look ridiculous in a couple of weeks.

Thu, 10/06/2011 - 16:49 | Link to Comment evolutionx
evolutionx's picture

European Central Bank commits suicide

 

"Our central bank is committing suicide. On the one hand they are helping banks with billions and billions. They are buying junk bonds, billions and billions. I mean, where does this lead to? It is one of the last nails in the coffin of our central bank."

 

http://www.mmnews.de/index.php/english-news/8633-european-central-bank-commits-suicide

Thu, 10/06/2011 - 19:10 | Link to Comment DosZap
DosZap's picture

evolutionx

To hades w/em'.

Cry me a RIVER.

Any CLUE how many Trillions WE have given the EU banks?....................yeah, OUR FED has given US Taxpayer dollars in the trillions to THEM.

Americans paying for failing EU Bnaks..........tell me what Article of the Const that is allowed, also, the Congress was never informed.

Thu, 10/06/2011 - 16:50 | Link to Comment ReallySparky
ReallySparky's picture

It is just surreal how calming they all were talking about the possible penind implosion.  Seems as if the lady has been reading ZH, "the plan of a plan". HA.

Thu, 10/06/2011 - 16:50 | Link to Comment jmcadg
jmcadg's picture

When are we gonna get those City Slickers jumping out of the windows. Will it be televised?

Thu, 10/06/2011 - 16:50 | Link to Comment RobotTrader
RobotTrader's picture

 

 

NFP is pretty much a "dead pan lock" on the Gold Cartel bombing the PM's prior to the market open tomorrow.

That is why nobody was buying gold stocks today despite the decent-sized move in GLD.

Can't blame them, it happens over and over again like clockwork.

Just like the XAU, which now has over 8 years achieved a 100% track record of staging massive breakdowns after a breakout.

Tough sector.   You are better off trading long in a TPTB-sanctioned, Fed-sponsored sectors like retail stocks.

Thu, 10/06/2011 - 16:53 | Link to Comment SheepDog-One
SheepDog-One's picture

Hey how's your 'all-in long here at DOW 12,700 for this big rally' call doing?

Thu, 10/06/2011 - 17:04 | Link to Comment RobotTrader
RobotTrader's picture

Dude, you obviously haven't been reading.

I exited all my longs on that big break under 11,900 when the CRB index broke away.

Sold everything.

Thu, 10/06/2011 - 17:08 | Link to Comment SheepDog-One
SheepDog-One's picture

OH, ok.

Thu, 10/06/2011 - 17:19 | Link to Comment kito
kito's picture

hey sheepie, its great being anonymous!!! you can fictionalize anything!!!! me, i bought every internet stock in 97 and got out in 99 right before the bust!! i made 50,000 pct return on qualcomm alone!!! then i moved into housing, bought a bunch of knockdowns, fixed those bad boys up, and flipped them for 300 pct profit!! oh, and i bought gold when it was 100 bucks an ounce, and silver when it was 2 bucks an ounce. and now i just got in on the bond market before it exploded to the upside. IM THE SMARTEST, MOST AGILE TRADER AROUND!! I SENSE TRENDS A MILE AWAY--IM A FUCKING BLOODHOUND!!!

LOL!!!!!!

Thu, 10/06/2011 - 18:28 | Link to Comment Spastica Rex
Spastica Rex's picture

I'm skeptical...

Thu, 10/06/2011 - 22:45 | Link to Comment Esso
Esso's picture

Thanks, Kito, that needed to be said. I've been wanting to do it, but I'm just not much of a typist. Beautiful.

Fri, 10/07/2011 - 00:21 | Link to Comment FeralSerf
FeralSerf's picture

Why are you wasting time posting here instead of enjoying your billions?

Thu, 10/06/2011 - 17:20 | Link to Comment Pancho Villa
Pancho Villa's picture

You mean you aren't even tempted by the "generational lows" in MS that you mentioned yesterday? I mean, with a 57 P/E, that stock is SO cheap. Recession: already discounted. Euro-collapse: completely hedged. Clearly the moon is just the first stop for MS.

Thu, 10/06/2011 - 17:34 | Link to Comment akak
akak's picture

In the alternate universe, infinitely-malleable past of RobotLemmingWorld, all purchases are made at the exact market lows, and all sales at the exact market highs.  See how that works?

Thu, 10/06/2011 - 19:40 | Link to Comment Bay of Pigs
Bay of Pigs's picture

The XAU didn't breakout Robo. HUI did, but the XAU didn't confirm. Get your facts straight.

Oh that's right, you never do.

Thu, 10/06/2011 - 17:16 | Link to Comment GrinandBearit
GrinandBearit's picture

In regards to Robot: 

You think that moron makes any trades? -lol.  All ridiculous hindsight and junk posts.  He does the same thing on the bear forum.  He really junked up that forum... just a bunch of idiotic opinions and antagonistic PM bashing.  No intelligent posts whatsoever.

 

Thu, 10/06/2011 - 17:06 | Link to Comment mynhair
mynhair's picture

Goodness, on the other thread you said we should be grateful for the ramp because:

 

You guys should be cheering, since the gold stocks are being dragged up kicking and screaming as "investors" are piling into the worst sectors to make a fast buck:  Solars, banks, gold stocks.

Thu, 10/06/2011 - 17:18 | Link to Comment GrinandBearit
GrinandBearit's picture

STFU.  You don't trade.

Thu, 10/06/2011 - 17:49 | Link to Comment Citxmech
Citxmech's picture

So far these PM raids have only been able to knock the price back to the top levels a few months earlier (big deal).  Last time we had a real route was back when Au went from 1k/oz to 800/oz.  That dip lasted for quite a while.  Once it went back above 1k/oz. Au never looked back.  The manipulations downward have been less and less sucessful ever since.

The key to PMs as insurance: 

Step 1.  Buy early;

Step 2. Buy all you can afford;

Step 3. Hold

Thu, 10/06/2011 - 19:18 | Link to Comment DosZap
DosZap's picture

Citimex,

?????? HUh?

1k to 800.00.......................

Try the one 3-4 wks ago, 1540's from 1910.00ish,  now 1650.00,and still down over $250.00 from nom  high.

Thu, 10/06/2011 - 16:50 | Link to Comment Wakanda
Wakanda's picture

11 days until Black Monday II

Thu, 10/06/2011 - 17:08 | Link to Comment iDealMeat
iDealMeat's picture

What's going down on the 17th?  or,  shouldn't it be Black Monday the IV ?

from wiki:

Black Monday is a term used to refer to certain events which occur on a Monday. It has been used in the following cases:

  • Black Monday, Dublin, 1209 – when a group of 500 recently arrived settlers from Bristol were massacred by warriors of the Gaelic O'Byrne clan. The group had left the safety of the walled city of Dublin to celebrate Easter Monday near a wood at Ranelagh, when they were attacked without warning. Although now a relatively obscure event in history, it was commemorated by a mustering of the Mayor, Sheriffs and soldiers on the day as a challenge to the native tribes for centuries afterwards. [1]
  • Black Monday, 14 April 1360 – the army of Edward III during the Hundred Years' War was struck by hailstorms, lightning and panic, causing considerable loss of life on Easter Monday.
  • Black Monday, 27 February 1865 – a "sirocco" wind brought sandstorms to Melbourne, Australia affecting Sandhurst and Castlemaine.
  • Black Monday, 8 February 1886 – when a major protest over unemployment led to a riot in Pall Mall, London.
  • Black Monday, December 10, 1894 – when both banks of Newfoundland, Britain’s oldest colony, had closed their doors, thus rendering that colony’s main medium of exchange worthless.
  • Black Monday, 28 October 1929 – a day in the Wall Street Crash of 1929, which also saw major stock market upheaval.
  • Black Monday, 27 May 1935 – US Supreme Court Justices overturned multiple Acts including National Industrial Recovery Act.
  • Black Monday, September 19, 1977 – when Youngstown Sheet and Tube Company, one of America's largest regional steel-manufacturing firms, announced that it would shut down most of its operations in the vicinity of Youngstown, Ohio, placing 5,000 people out of work. This development presaged the collapse of that community's industrial economy, from which it still hasn't recovered (as of 2010).
  • Black Monday, 27 November 1978 - when former San Francisco Supervisor Dan White assassinated Mayor George Moscone and openly gay Supervisor Harvey Milk.
  • Black Monday, Malta, 15 October 1979 – the offices of The Times of Malta were set on fire during a political rally. It was also on this day that supporters of the Malta Labour Party broke into the house of Dr. Edward Fenech Adami.
  • Black Monday, 19 October 1987 – the largest one-day percentage decline in recorded stock market history.
  • Black Monday, or Al Aqsa Massacre, 8 October 1990
  • The day following the final Sunday of the American National Football League season (Week 17) in which coaches and administration are fired or resign their position.[2][3][4] The term is also attributed to the day following the annual NFL Draft where players' contracts may be terminated once new players are added to a roster.[5]
  • The Monday of Match Week when United States 4th year medical students find out if but not where they matched to a residency position through the National Resident Matching Program.
  • Events described by both the Late-2000s recession and the Late-2000s financial crisis
Thu, 10/06/2011 - 17:30 | Link to Comment redpill
redpill's picture

 

"

 

  • Black Monday, every Monday at the White House since January 20, 2009

 

"

 

Racist!!!!

Thu, 10/06/2011 - 18:35 | Link to Comment DosZap
DosZap's picture

redpill,

Could have read;

  • Mulatto Monday, every Monday at the White House since January 20, 2009
  •  

  • And be PC.
  • Do NOT follow this link or you will be banned from the site!