This page has been archived and commenting is disabled.

European Bailout Time Of Death: EFSF Cut In Half Due To "Market Conditions"

Tyler Durden's picture


If only we had known that the EFSF was nothing but the latest Chinese reverse merger IPO gimmick, dependent entirely on market conditions for its success, we probably would have sold even more euros to Thomas Stolper. Alas, despite all the pomp and circumstance of last month's European summit announcement when the 50% Greek debt haircut (which has a snowball's chance in hell of passing) was accompanied by vague promises of a 4-5x leveraging of the EFSF's €440 billion, it now appears that our original skepticism was well-founded. Because according to the latest news out of the FT, the EFSF won't get 4-5x leverage. Nope. It will, in fact be lucky if it can be doubled, which however kills the whole point as it needs to be well over €1 trillion to even exist. From the FT: "A plan to boost the firepower of the eurozone’s €440bn rescue fund could deliver as little as half what the bloc’s leaders had hoped for because of a sharp deterioration in market conditions over the past month, according to several senior eurozone government officials." Well what do you know. Next we will learn that when the EFSF denied it was an outright pyramid scheme, and was buying its own bonds, it was actually kidding. Either way, as it currently stands, there is no bailout in place for Europe whatsoever, as the ECB's demands for a fallback to the ECB are now moot. Furthermore, once the market realizes there is no even implicit backstop to the trillions in debt rollover over the next several years, it will dump sovereign bonds with even more gusto, pushing Europe into an even deeper funding crisis, which in turn will make bond repayment even more impossible, which will send prices even lower, and so on. There is a reason they call it a toxic debt spiral.

From the FT:

The dramatic spike in borrowing costs for Italy since the summit is likely to force the European Financial Stability Facility to sweeten the deal offered to investors, which will limit the number of bonds the insurance would cover.


Klaus Regling, head of the EFSF, earlier this month said that overcoming investor concerns with improved guarantees would mean the fund was likely to have only three to four times the firepower – an admission that underlined the challenge European leaders face in steadying sovereign debt markets.


But three senior eurozone officials said even this lower target may be difficult to reach, and expect the eventual firepower to be between two and three times the remaining buying capacity of the fund. “It is falling well short of its billing,” said one. Concerns over leverage will be a key item on the agenda of eurozone finance ministers meeting on Tuesday.


These officials are also pessimistic about the prospects of a second source of leverage, a co-investment vehicle designed to entice investors from emerging markets. One said the idea was given a such a tepid reception by China and Brazil that is may struggle to amass funds.

Time for another summit:

Leveraging the EFSF’s dwindling resources was the main element of a grand plan unveiled in October to create “firewalls” that stop fallout from Greece spreading to European banks and its largest economies, particularly Italy.


But the rise in Italian and Spanish borrowing costs to painfully high levels has underscored the severity of the crisis and reopened the debate over more radical alternatives to boost the clout of the rescue fund. An added worry is the risk of a possible French downgrade, which would significantly sap the strength of the EFSF, as the fund is built on guarantees from “AAA” rated countries.


Alternative options include fresh guarantees or injections of money, the use of the EFSF as a bank, or steps to bring forward the European Stability Mechanism, Europe’s permanent bail-out fund, so that it runs alongside the EFSF instead of immediately replacing it.


Given the highly volatile markets and uncertainty over future European Central Bank interventions, it is almost impossible to predict the value of bonds the EFSF will eventually be able to insure.

Of course, none of these "options" will have any credibility absent the arrival of the ECB cavalry, which as of today we know is going nowhere... fast.

As for the EFSF's failure, it was obvious the bailout mechanism was dead when its yield was trading at well below AAA levels, as first reported here two weeks ago.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 11/25/2011 - 00:21 | 1912122 phungus_mungus
phungus_mungus's picture

Is it over yet? 

Fri, 11/25/2011 - 00:30 | 1912137 Chris Jusset
Chris Jusset's picture

The fat lady has started to sing ...

Fri, 11/25/2011 - 00:46 | 1912153 WonderDawg
WonderDawg's picture

She's at least finishing the final rehearsal.

Fri, 11/25/2011 - 00:51 | 1912159 Ahmeexnal
Ahmeexnal's picture

Nobody with a lucid mind would consider investing in the eurozone. Even investing in Zimbabwean bonds is better. Zimbabweans are not lying deceiving thieves like the ECB.

Fri, 11/25/2011 - 01:36 | 1912203 Richard Chesler
Richard Chesler's picture

three senior eurozone officials

Curly, Larry, and Moe?


Fri, 11/25/2011 - 01:45 | 1912215 Chris Jusset
Chris Jusset's picture

"Curly, Larry, and Moe?"

Or perhaps Dumb, Dumber, and Dumbest

Fri, 11/25/2011 - 03:45 | 1912323 Harlequin001
Harlequin001's picture

Well it looks now like the Fed is completely fucked. When this money comes out of collapsing euro bonds and heads straight into commodities (because yields on US paper are far too low for soon-to-be-defaulted debt), it will head into commodities and bingo, big time inflation.

The Fed's only hope is for the gold market s to absorb this money and soar, so that food prices don't explode, otherwise we are all toast...

Except those that hold physical bullion, that is...

They just get incredibly rich...

Fri, 11/25/2011 - 04:10 | 1912343 Michael
Fri, 11/25/2011 - 07:37 | 1912434 disabledvet
disabledvet's picture

what money?

Fri, 11/25/2011 - 07:07 | 1912424 ThatThatcher
ThatThatcher's picture

I spent some time in Zimbabwe and I'm not sure I entirely agree with this. Though, the ECB wear suits which makes them more deceptive.......

Fri, 11/25/2011 - 02:47 | 1912210 The Big Ching-aso
The Big Ching-aso's picture


...while she's embellishing her vibrato with enormous German farts.


Fri, 11/25/2011 - 02:50 | 1912282 Popo
Popo's picture

Looks like Black Friday will be Blood Red.

Fri, 11/25/2011 - 05:09 | 1912290 The Big Ching-aso
The Big Ching-aso's picture



If we're witnessing history in the making I just hope making history doesn't kill us all.

Fri, 11/25/2011 - 07:40 | 1912438 spankfish
spankfish's picture

Thats calorically challenged women.  PC a must.

Fri, 11/25/2011 - 00:24 | 1912124 Never1
Never1's picture



Not sure If I should cry or laugh... my puts might be happy.. but if the whole thing collapses, then they'l be worth about as much as my calls.

Fri, 11/25/2011 - 00:24 | 1912127 phungus_mungus
phungus_mungus's picture


Fri, 11/25/2011 - 00:28 | 1912135 Chris Jusset
Chris Jusset's picture

Here comes the toxic debt spiral ...

Fri, 11/25/2011 - 01:26 | 1912196 TruthInSunshine
TruthInSunshine's picture

I wonder who gets to circle the drain this time around?

Fri, 11/25/2011 - 02:24 | 1912260 kito
kito's picture

Lots of circling for the system but that drain seems to be elusive

Fri, 11/25/2011 - 02:45 | 1912266 redpill
redpill's picture

If market conditions were good, they wouldn't need a pretend-economics "super fund" to begin with.

Reality is like a mentally unstable and vindictive girlfriend: you can ignore them for a time, but the longer you wait the worse it gets and eventually you'll wake up in the middle of the night only to see the crazy bitch staring at you with a pair of bloody scissors in one hand and what appears to be a loaded chili dog in the other as she recites lines from Breakfast at Tiffany's.

Don't fuck around with Reality, it ain't worth it!

Fri, 11/25/2011 - 04:38 | 1912361 Peter K
Peter K's picture

No wiser words have ever been uttered ;)

Fri, 11/25/2011 - 00:24 | 1912125 Western
Western's picture

It's too bad this isn't clearly bullish (currency printing) or bearish (currency collapse).

Fri, 11/25/2011 - 03:47 | 1912329 Harlequin001
Harlequin001's picture

Yep, a flashing neon sign should just about sort it...

Fri, 11/25/2011 - 06:40 | 1912417 pmcgoohan
pmcgoohan's picture

I dont know. Its seeming a lot simpler to me than it was.

The ECB/FEB wont print until there is a massive deflationary crash.

Then they will print like crazy and there will be a hyperinflationary boom.

Sell until QE announced (earliest next year), then buy.

Fri, 11/25/2011 - 00:25 | 1912128 XRAYD
XRAYD's picture

There are actually three problems here ....


1) They have no money


2) they lie, and ...


3) ... sorry, I can't.






Fri, 11/25/2011 - 01:48 | 1912221 Skid Marks
Skid Marks's picture

A psychiatrist should have a wonderful time with this mess.

Fri, 11/25/2011 - 01:55 | 1912230 chump666
chump666's picture

yeah they all would be in a psych ward on meds.


Fri, 11/25/2011 - 03:13 | 1912295 The Big Ching-aso
The Big Ching-aso's picture



I would certainly expect such a psych to prescribe staring at those casabas of yours as a therapeutic calming agent.

Fri, 11/25/2011 - 06:55 | 1912420 StychoKiller
StychoKiller's picture

Viva tanlines!!

Fri, 11/25/2011 - 07:45 | 1912441 spankfish
spankfish's picture

Nice headlights.

Fri, 11/25/2011 - 00:50 | 1912131 DormRoom
DormRoom's picture

It was a huge bluff, and they got called on it.  Now Merkel must choose: coordination or collapse.


Coordination implies decades of income inequalities among groups, and sovereigns.  BRICS will  lose big, if the West implementes laissez faire monetization.  Which is why the China-Russia axis is taking a firmer posture.  They know that  the West move on Syria is a play for the Strait of Hormuz, which if the West controlled, would be devasting for them. It seems the West  may want growth @ the BRICS expense.


Within nations, greater inequalities between the 99, and 1% will emerge.  And the West will tip towards a police state; pan-national gulag to control the mob, and channel their populace anger, towards war rage.


So the struggle between the 99 & 1% is mirrored in the new foreground struggle between the BRICs & Western Hegemony. 

Collapse--No one has a crystal ball for that, and that gives me a hard on.

In the meantime, the situaiton has turned into a human centipide.

Fri, 11/25/2011 - 00:52 | 1912166 XitSam
XitSam's picture

"They know that  the West move on Syria is a play for the Strait of Hormuz, ..."

Can you explain this for me?

Fri, 11/25/2011 - 01:17 | 1912182 DormRoom
DormRoom's picture

Israel will bomb Iran for the West, but before they do so, they need the West to sterilize Hezbollah & Hamas, because as soon as they bomb Iran, these two groups will launch thousands of rockets into Israel, and raid settlements.  So Isreal needs to cover its flank.

So the West will occupy Syria, and undermine Hezbollah & Hamas power structures, finances, and Iranian supply lines.  They will also have control of Syrian air space, and air craft carriers positioned ostensibly for the Syrian operation, but in reality prepare for the Isreal bombing raid, and Iranian retaliation.


The US & West will be pulled into the Israel-Iranian conflict by design.  The outlines of how aren't clear.

Once the West is drawn in to the Iranina conflict, Russia will immediately send troops to occupy Azerbaijan, and control the Baku oil fields.


China will posture her navy around Taiwan, and protect African supply lines.    And you have the set up for a new Ag.e




Fri, 11/25/2011 - 02:02 | 1912238 seek
seek's picture

The US & West will be pulled into the Israel-Iranian conflict by design.  The outlines of how aren't clear.

I think every war since Korea this has ultimately been done via false flag attacks or bogus intelligence, or both. So that part sadly is clear.

Awesome analysis, BTW.

Fri, 11/25/2011 - 02:08 | 1912245 Ahmeexnal
Ahmeexnal's picture


Israel knows you can't trust the west.

That's why Israel will not participate in any "kinetic military action".


Fri, 11/25/2011 - 02:18 | 1912255 DormRoom
DormRoom's picture

'Element' has a better analysis.


read this thread:

Fri, 11/25/2011 - 03:16 | 1912270 Element
Element's picture

You're forgetting Russian warships in the Eastern Med near the Syrian coast. The US got wind they were coming so repositioned a carrier to cover Israel and Turkey and to observe ... yeah, ... the delivery of advanced Russian carrier-killer anti-ship missiles to Syria and also S300 SAMs long range air defence. ... good luck imposing a no-fly zone now, those will have Russian operators.

All while the Russians just went to a nuclear combat alert, close to a US Carrier ... this will be the #1 consideration for now.

Everyone is stepping on the other's toes and no one is saying "sorry", and everyone has their guard up just in case ... of ... well, ... let's say Hezbollah suddenly fired 200 rockets into Haifa and launched antiship missiles at an Israeli frigate, as an unidentified targeting UCAV shadowed a US Carrier.

There's plently of room for misunderstandings, and for each navy to demand and even take more elbow-room.

And where there are capital ships there are almost always SSNs and SSGNs nearby to cover them.




Fri, 11/25/2011 - 07:44 | 1912440 disabledvet
disabledvet's picture

i agree with this. and the similarity over here will be with Bank of America et al. The institutions will have to be wound down in an orderly fashion with all that that means. The private sector has gone all in on government inability to do such things...and they are about to lose.

Fri, 11/25/2011 - 00:26 | 1912132 mberry8870
mberry8870's picture

This is truly pathetic. Get it over with.

Fri, 11/25/2011 - 05:16 | 1912386 UP Forester
UP Forester's picture

OT, but you know what's truly pathetic?  The soon-to-be-unemployed folks from Steven J. Baum Law Firm.

Yes, the same fine folks that made fun of the people they made homeless on Halloween.


Fri, 11/25/2011 - 08:45 | 1912476 Miss Expectations
Miss Expectations's picture

They are closing due to "a series of missteps."  WOW, that's some tame description of fraud.

Fri, 11/25/2011 - 06:30 | 1912414 Ethics Gradient
Ethics Gradient's picture

I love the smell of socialism burning in the morning.

Fri, 11/25/2011 - 00:26 | 1912133 lolmao500
lolmao500's picture

The EFSF is evil and would crush Germany if it were ever set up, which the scum in power in Germany wants. Good thing it's cut.

And it just got a whole lot more dangerous in the middle-east.... especially with those RUSSIANS ADVISERS there...

Report: Russia Sent Syria Super-Advanced S-300 Missiles

A report Thursday said that Russia has supplied Syria with advanced S-300 missiles, and has sent advisers to help Syria run the system.

Fri, 11/25/2011 - 00:40 | 1912145 mt paul
mt paul's picture

sent them some hot radar systems

tech assistance also...


Fri, 11/25/2011 - 01:03 | 1912180 lolmao500
lolmao500's picture

Not only that but high tech anti-ship missiles too.

Soviet Era Ship Killers Slipped Into Syria

The Yakhont uses a liquid-fuel ramjet and travels 300 kilometers at speeds of over 2,000 kilometers an hour (using a high altitude cruise and a low-altitude approach; if it travels entirely at low altitude the range is cut to 120km). When the missile arrives in the area where the target is supposed to be, it turns on its radar and goes for the kill.

The Yakhont is a 8.9 meter (27.6 foot) long, three ton missile with a 300 kg (660 pound) warhead.

The SS-N-26 has a cruise speed of Mach 2.6 at high altitude or Mach 2.0 at low altitude. It has a minimum range of 50 km, and a maximum range of 300 km when cruising at high altitude and 120 km when at low altitude. It flies at low level during the terminal phase, between 5 and 15 m in altitude, and makes evasive maneuvers near to the target to defeat any defenses. It carries a 250 kg high explosive semi-armor piercing warhead.

Fri, 11/25/2011 - 01:58 | 1912232 topcallingtroll
topcallingtroll's picture

No problem.

We can fry its electronics.
We can laser it.
We can jam its radar
We can shoot it down with the new guns that shoot caseless ammo at 6 million rounds per second. Forgot the name of this kind of gun.

All of these technologies are fully operationalized and deployed.

I still dont understand why people think the united states is vulnerable militarily. Wishful thinking?

We will also have an operational hypersonic missile before anyone else. Just recently successfully tested.

Fri, 11/25/2011 - 02:27 | 1912264 q99x2
q99x2's picture

What if Russia's Mars Moon Probe is not what it was thought to be but instead a doomsday machine. It is now coincidentily keeping itself in perfect orbit all by itself.

Fri, 11/25/2011 - 04:08 | 1912342's picture

The US couldn't stop a dozen guys with utility knives.

Fri, 11/25/2011 - 04:56 | 1912371 blunderdog
blunderdog's picture

I still dont understand why people think the united states is vulnerable militarily. Wishful thinking?

Not wishful thinking.  Fucking recent experience.  If you look at our enormous successes over the past decade, it seems like maybe we're not really that SUPER at what we've been trying to do.  (Vulnerable in what sense?  No one's going to storm our beaches.)

Plus we sure did kick the shit outta Grenada...

Fri, 11/25/2011 - 07:29 | 1912432 DeltaDawn
DeltaDawn's picture

Soon we won't have the funds to fuel up that equipment or feed the troups.

Fri, 11/25/2011 - 00:46 | 1912151 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

so lemme get this straight, its Russia/syria/iran vs US/israel?

Fri, 11/25/2011 - 00:58 | 1912171 lolmao500
lolmao500's picture

Yep, while China takes on Vietnam, India, South China Sea or Taiwan if the nationalists win the election in January.

You thought 2011 was crazy? You ain't see nothing yet.

Fri, 11/25/2011 - 00:55 | 1912168 jeff montanye
jeff montanye's picture

this constant warring on islamic nations by israel and its u.s. and european lackeys is certainly working out well for israel.  now s-300 missiles to contend with the next time they go after hezbollah. 

Fri, 11/25/2011 - 01:44 | 1912217 Double down
Double down's picture

Hope they work better than their satelites

Fri, 11/25/2011 - 00:29 | 1912136 phungus_mungus
phungus_mungus's picture

German 10YR's are climbing... 

Fri, 11/25/2011 - 00:34 | 1912141 lolmao500
lolmao500's picture

That's bullish since it will make the bund spread drop...


Fri, 11/25/2011 - 00:33 | 1912140 williambanzai7
williambanzai7's picture

I'm long luxury hotel chains accommodating emergency Monty Merkozy summits.

Fri, 11/25/2011 - 01:03 | 1912181 Uncle Remus
Uncle Remus's picture

Is that a full Monty?

Fri, 11/25/2011 - 00:37 | 1912142 oldman
oldman's picture

Dear Tyler,

I posted this earlier, but no one responded to such a dumb question, but I am truly ignorant of these matters.

Hopefully, someone will give me a serious response   om

"Why not just confiscate all the gold and mines, watch the price soar and sell into it?

Or would it be easier just to nuke the debt and call it:

"every man for himself!"?

I'm not kidding about this but asking someone who seems serious enough to have a thought or two on the subject.

I really don't know why these are not as acceptable as war.

thanks              om"

Fri, 11/25/2011 - 00:50 | 1912157 Jeff Lebowski
Jeff Lebowski's picture

Let me tell you something, pendejo. You pull any of your crazy shit with us, you flash a piece out on the lanes, I'll take it away from you, stick it up your ass and pull the fucking trigger 'til it goes "click."

Fri, 11/25/2011 - 01:00 | 1912176 wisefool
wisefool's picture

+1. To old man, this is a quote from a very popular movie you may or may not have seen called "the big lebowski" and it is on point.

I do not own any gold. but the few people I know that have made passing reference to investing in gold, probably have the physical, but they never ourright say they do. in the USA confiscating gold would be nearly impossible. and not nessecarily met with physical resistance but crazy, crazy tricks and a shadow society forming over night of like minded folks.

In the 30s, it was a much different world. Lots more patriotism and faith in the government, cause there was less of a historical record availible and no real time independant news sources like ZH. I mean for goodness sakes, they actively targeted US citezens of german decent to buy war bonds in both wars. Either as a loyalty test or "They are talking about containment camps ...."

Basically you might get the miners through some EPA regulation, but they'd never ever get the privately held physical.

Fri, 11/25/2011 - 01:15 | 1912187 oldman
oldman's picture


Thanks for your response---I'm not so certain that people in the US are as tall as their words and I hope it doesn't come to this. It still seems not quite so important as nuclear war or any more of these endless wars, although, I am not suggesting any 'give up' of gold or miners by the same people who have been the laughingstock of so many in the US, and have been right on target backing conviction with action.

I'm just tired of my country bilking its ignorant citizenry of what is has and earns by constant mercantilist wars.

Thanks again     om

Fri, 11/25/2011 - 01:23 | 1912193 wisefool
wisefool's picture

sure. And you know probably more than I do. I just wanted to make sure the response you got had the proper context in that it was not directed at you. it was a very appropriate reference. +1 to the dude.

If I do get any gold before when/if TSHTF I assure you I will not use violence to defend it, I'll have far, far better, non-violent, legal, and funnier tactics, as will I hope other holders of physical.

Fri, 11/25/2011 - 01:54 | 1912229 oldman
oldman's picture


Thanks for a really nice ray of hope that there is a non-violent way out of this      om

Fri, 11/25/2011 - 02:09 | 1912246 wisefool
wisefool's picture

glad to do it. But for some pragmatism, if TSHTF in the USA, we have a problem that much of the rest of the world does not. 1% in prison, 4% on probation. Many individualists think they will beable to hold off the "legitimate" agressors, and the roving hordes of emo kids raging out of the suburbs looking for valuables and food.

When the wardens and their staffs head for their compounds its a matter of days before harden psychopathic criminals are loosed. TPTB have been lording this threat over us for some time now. not intended as snarc "Linday Lohan released from 2 year sentance 'cause the WOMENS correctional facilites are too full ...."

Fri, 11/25/2011 - 02:28 | 1912265 oldman
oldman's picture


Thanks again

As far as I am concerned, this is a calculated risk that is part of the machine's failure and better calculated in than overlooked.

The thing is that this feels like more that the 5% resistance of the 'forefathers', just from the unemployment numbers. The last time we were in this place our patrician president, FDR, was able to sidestep both sides, delaying this day that is coming for us with the 'commie'/'anti-commie' spider's web; this time the fucking machine is really dead.

Not certain how many have the courage to go into the streets, but there are more than enough with reason. This deal is going to explode one day----don't have any idea of timing, but I hope to see it in a non-violent manner.

My grandson likes to say: "You never know, Granpa, you just never know" and that' why I listen to 4 year-olds       om


Fri, 11/25/2011 - 01:15 | 1912188 Peter K
Peter K's picture

And and the 2nd Ammendment remedies would start to kick in. Just thought I'd mention it.....

Fri, 11/25/2011 - 01:37 | 1912204 RafterManFMJ
RafterManFMJ's picture



Molon Labe, Bitchez!!


Fri, 11/25/2011 - 02:53 | 1912286 The Big Ching-aso
The Big Ching-aso's picture


Walter, I love you, but sooner or later, you're going to have to realize the fact that you're a god damn moron. ...

Fri, 11/25/2011 - 02:56 | 1912289 caerus
caerus's picture

am i the only one around here who gives a shit about the rules?!?!

Fri, 11/25/2011 - 03:11 | 1912302 The Big Ching-aso
The Big Ching-aso's picture



Well, sometimes, it's a cathartic-

Fri, 11/25/2011 - 03:13 | 1912303 UP Forester
UP Forester's picture

Go work for the government.  Then you don't have to give a shit about anything or anyone.

Fri, 11/25/2011 - 03:20 | 1912309 caerus
caerus's picture

you want a toe? i can get you a toe, believe me...there are ways, don't wanna know about it, believe me...hell, i can get you a toe by 3 o'clock this afternoon... with nail polish....these fucking amateurs...

Fri, 11/25/2011 - 03:30 | 1912314 The Big Ching-aso
The Big Ching-aso's picture



You know, Dude, I myself dabbled in pacifism once.   Not in 'Nam of course.

Fri, 11/25/2011 - 00:56 | 1912169 Barry Freed
Barry Freed's picture

The rich people who own all the debt run the world, why would they cancel it?

They'd much rather have endless war where you and every other working person dies horribly.

Fri, 11/25/2011 - 02:09 | 1912247 oldman
oldman's picture

Barry Freed,

They are not in control---they just spin a web of complete bullsit as fine as any spider.

These dudes are in complete panic because nothing they come up with gets their machine back on its feet.

I'll bet my last $1000 that if we pulled an 'illegal' national strike these bastards would be on their knees begging for 'working out our differences'.

Yeah, I know----but I'll go first, I'm an oldman

And yeah, but who is going to put gas in all those police tanks and cars when there is no electricty---think Fukishima and Cairo

This is coming. It is just a matter of how much more we will tolerate.

It does not have to end with total destruction nor will it-------the little people own the debt and it is owed by criminals and pschopaths that I have little concern for at this juncture

I'm going to keep on 'do-ing nothing'

Damn---all that out of you innocent and sincere reply----I apologize for my vehemence            om

Fri, 11/25/2011 - 01:01 | 1912178 drbower
drbower's picture

because all the western countries have already leased/swapped gold out a thousand different times over to controll the price.  you really think the u.s.a still has ownership of the published 8000+ metric tonnes it had in 1949 when the last audit occured?????   why do you think there hasn't been an audit since then?? google andrew Mcguire if you haven't already heard, the comex and the lbma have 100 oz. of paper trading every day that is only backed by 1 oz. of silver/gold.  Eric Sprott estimates that of every 1 billion oz. of silver traded on paper every day by the crimex, and there is estimated to only be 1 billion of .999 bullion above ground, already spoken for 100 different ways.  same for gold, except there's alot more of it to go 'round.

 by the way, nationalization of gold mines may occur, but for now is publically unaccaptable.  wait 'till the house o' cards comes down, and you know what the bankstas say(J.p. morgan) - always make good use of a crisis(in order to screw the public, while looking like you're helping)

Fri, 11/25/2011 - 01:44 | 1912218 oldman
oldman's picture


Thank you for this response; I certainly do not understand this aspect as well as most here at ZH.

Perhaps, I underestimate the resistance of the people of the US, but-----

1. no real resistance to killing other humans for so many reasons

2. no resistance to allowing their government to pay for the losses of the now bankrupt 'banks'

3. no resistance to accepting debt for the two items above in the name of how many generations resistance to the police state we live under

5. no resistance to continued tax abuse by any entity that can be named a 'tax authority' by the pols

6. no resistance to privatization of common assets and infrastructure that we have sweated to put into place over decades

drbower---i'm getting tired from the heavyness that is feel from just listing the few items above, and there are many more

You did not mention resistance at all, but in reading your response my question is: why there is no resistance?

I've gotten off track here from the complexity of the problem, it is overwhelming to say the least, but it is more apparent that the only way forward is to turn up the pressure to the point where the machine is recognized as a dead and futile way forward.

Thanks, again your input has deepened my understanding of the problem                   om


Fri, 11/25/2011 - 02:03 | 1912237 Never1
Never1's picture

Wave an Iphone 5 or some chick's tits in front of their face and 99% of the people really have no idea what's going on. (and that number sounds oddly ironic, to me) It's business as usual for most of the population... even for those who have retirement funds, savings and "assets" on the line. Very few people know that there is a potentially devastating financial crisis on the horizon. If they did know, the markets would tank immediately as everyone would sell.

What scares me the most is that this "levered" bailout fund was obviously relying on basically using the global markest to fund it.

Maybe I'm just reading between the lines here, but that's what I gathered. Crank the markets up.. sell into the strength and bail ourselves out.... leave the average joe retirement funds to hold the bag.

Might have had one too many beers at this point, but fuck these assholes and fuck their markets. I'm long gold, silver and LEAPS puts.

Fri, 11/25/2011 - 02:11 | 1912250 oldman
oldman's picture

Never 1,

Good do-nothing plan---I like it!                   om

Fri, 11/25/2011 - 07:12 | 1912426 Iconoclast
Iconoclast's picture

Good post, stay long on your beer obviously ;-)

Fri, 11/25/2011 - 04:55 | 1912370 cherry picker
cherry picker's picture


you hit the nail on the head

but to resist would make one out to look the fool as those who are brainwashed point fingers at the resistor and call them all sorts of things they are not and blacklist them, making them out to be wackos.

look at tea party and ows.

they are mostly people concerned but they are labeled as loiterers, waystrells and racists by the powers that be

they try and make ron paul to be a joke and elevate romney, perry, bachman and palin to the pedastel, which they ended up losing anyway as neither are the leaders anyone desires to have

this world will come apart in its present form soon enough and we will have to reformulate it, as we have so many times

i just hope the human race learns its lesson this time and let love and compassion rule instead of the allmighty nuke and that thing we call fiat

Mon, 11/28/2011 - 02:48 | 1912599 oldman
oldman's picture


Fri, 11/25/2011 - 00:41 | 1912146 UP Forester
UP Forester's picture

So, building a house of cards on top of sand spread over a swirling pool of toxic debt is a bad thing?

Damn, I'll have to re-submit my building plans, or kick in $500 to the county building inspector after this....

Fri, 11/25/2011 - 00:43 | 1912147 mt paul
mt paul's picture

do not nuke

the planet

you live on ...

Fri, 11/25/2011 - 00:46 | 1912150 GrinandBearit
GrinandBearit's picture

Just fucking crash already for crying out loud!... Get it over with!

Fri, 11/25/2011 - 01:29 | 1912199 Peter K
Peter K's picture

Slow down champ. This EURO fail needs to cause maximum pain and at the same time needs to be savoured. There is a bigger lesson that needs to be learned here. Maybe if.... the ECU didn't fall apart so quickly, and without any real costs to the transgressors, we would not have this present EUROabortion. This time, it needs to be different:)

Fri, 11/25/2011 - 00:48 | 1912156 traknologist
traknologist's picture

I'll be playing this as I crawl into my bunker.

Fri, 11/25/2011 - 00:51 | 1912158 lizzy36
lizzy36's picture

Spain and Italy have to refi EUR750B next year.

Who the fuck is going to be the buyer. WHO?

Fingers crossed Bernanke gets involved. Because that will make the Fed the ONLY issue for the 2012 elections.

It's beginning to look a lot like christmas......

Fri, 11/25/2011 - 00:54 | 1912167 Ahmeexnal
Ahmeexnal's picture

Spain and Italy have to refi EUR750B next year.

Who the fuck is going to be the buyer. WHO?


The eurozone tooth fairy?

Fri, 11/25/2011 - 01:21 | 1912192 Peter K
Peter K's picture

And the eurozone tooth fairy is having a hard time propping up even one single asset class these days. GS taking it's toys and leaving the Euro FX sandbox is a good case in point.

Fri, 11/25/2011 - 07:02 | 1912358 Al Gorerhythm
Al Gorerhythm's picture

There are going to be a lot of teeth being pulled to recap this bitch. I picture Europe, somewhere in the future, bent over with its last rotten tooth tied to the door knob, hoping there really is a tooth fairy. 

Fri, 11/25/2011 - 08:05 | 1912448 spankfish
spankfish's picture

The eurozone tooth fairy riding a Skittle shiting unicorn.

Fri, 11/25/2011 - 01:42 | 1912216 wisefool
wisefool's picture

I harp on the same things. but you are right. this will make the Fed the #1 issue. I expect the MSM to find some way to get Ron Paul out of the debates. He is far too dangerous now. Many people are starting to remember back to Ross Perot, and lesser extent Nader. And thinking "hrrrrmm maybe these "weirdos" arent so weird after all?"

How is Romney going to explain that the fed already gave 200B+ "to various central banks" and that they have to give $1T more. Then people will ask, where do they get it? Ohh they print it? thats okay then... But .. they can only print based on the combination of both the government going deeper in debt and at the same time making people pay taxes .... Candidate Romney ... what is your effective tax rate? ....

Ron Paul 2012 or 4 more years. It is literally in the bank at this point...

Fri, 11/25/2011 - 01:54 | 1912228 chindit13
chindit13's picture

Since this year is last year's next year, I'm wondering who is going to buy---or even hold---non-German sovereign debt over the end of year reporting period?  Is there anyone who hopes to be gainfully employed in '12 who wants to show investors he's been holding Italian, Spanish or Belgian flotsam and jetsam?  I can imagine a selling crescendo as end-of-year settlement dates approach.

Fri, 11/25/2011 - 08:12 | 1912452 spankfish
spankfish's picture

Im sure the wink wink nudge nudge boys have already designed another MF Global to hood wink the non sovereign German investors.  Suckers born every minute.

Fri, 11/25/2011 - 08:22 | 1912455 youngman
youngman's picture

If I was an idividual investor and had money in some fund, Hedge, or Money Market account...I would hop my guys had sold out 6 months ago...that they were that smart to get out ahead of the trama...that they had the brains to see this coming down the road...yeah right...I am in gold and silver...

Fri, 11/25/2011 - 00:57 | 1912170 chump666
chump666's picture

Goodbye Greece.

Fri, 11/25/2011 - 00:58 | 1912173 topcallingtroll
topcallingtroll's picture

When you google zero hedge why does it say "dont.follow this link or you will be banned?"

I used to see this rarely. Today I have seen it each time I google zero hedge.

Fri, 11/25/2011 - 01:21 | 1912191 Richard Whitney
Richard Whitney's picture

Huh? Maybe your browser has been hijacked.

Fri, 11/25/2011 - 00:58 | 1912174 Barry Freed
Barry Freed's picture

Before you buy, make sure to find out if these bonds are 2-ply.

Fri, 11/25/2011 - 01:00 | 1912175 Georgesblog
Georgesblog's picture

At least somebody bumped into reality in the dark.  There is no way that lining up more debt to throw at this problem is going to work. The EFSF was dead on launch.  Better late than never on pushing the abort button. Pushing this bailout would just dig a deeper hole. You'll thank them, later.


Fri, 11/25/2011 - 01:04 | 1912183 ruffian
ruffian's picture

Why all this drivel.....EFSF this, ECB that............IT'S THE FED'S WORLD !!!! they will do all the heavy lifting (uh printing) the FED will bailout every individual, town, county, city, state, country, corporation, bondholder on the planet !!!! FED'S WORLD !!! GET IT KIDS !!!

Fri, 11/25/2011 - 05:59 | 1912402 Treason Season
Treason Season's picture

+ +


Planet Federal Reserve

Fri, 11/25/2011 - 10:46 | 1912753 justtotaketheedgeoff
justtotaketheedgeoff's picture


"It's the Fed's world after all. It's the Fed's world after all. It's the Fed's world after all. It's the Fed's f-ed world!"

Fri, 11/25/2011 - 01:05 | 1912184 Mark123
Mark123's picture

I would never have guessed Germany would have a failed auction.  Now this dooms day announcement.

So, when is the announcement that ECB is going all in on QE?


Fri, 11/25/2011 - 01:07 | 1912185 topcallingtroll
topcallingtroll's picture

The german plan is out now!!! Latest rumor.

Germany will agree to jointly issued eurobonds for countries that comply with issuance criteria.

Budget deficit less than 3%
Market liberalization and opening of restricted trades and professions
Passage of new EUrozone rules allowing bankruptcy and expulsion from eurozone.

And you heard it hear first. Details are being worked out, but it may take months to announce. This is the new plan or at least the new rumor

Fri, 11/25/2011 - 01:16 | 1912190 wisefool
wisefool's picture

So basically eurozone part Deux? This time it's for real?

2. I can not wait to see the non-euro immigrant with a solid PhD apply for new conditional license. It will be like the scene in fightclub with the korean kiwimart owner in reverse  (I know your name, I know where you live If you DO become a ___profession__X_, you will be dead in one year)

3. snarc: Donald Trump elected honorary emperor of all PIIGS countries. takes bankrupcy firm on semiannual "European Vacations"

Fri, 11/25/2011 - 06:21 | 1912235 chindit13
chindit13's picture

I think that is a reasonable rumor as far as rumors go.  Merkel might be able to get it through.  Of course, top tier members will cheat just as they did on Maastricht, but other than an IMF bailout, this is about the only can left to kick.  Two Tiered EU.  Class-B EUR notes, perhaps with images of Zeus, Leprechauns, or nudes of Silvio Berlusconi's teenybopper girlfriends.

Who says fiat can't be fun?

Fri, 11/25/2011 - 01:29 | 1912197 RobotTrader
RobotTrader's picture

USDX and Treasuries about to go completely parabolic?

What happened to the promised "QE to Infinity"?

Fri, 11/25/2011 - 01:30 | 1912201 Steel_Preacher
Steel_Preacher's picture

Cleaning the ARs and listening to --->

Fri, 11/25/2011 - 01:31 | 1912202 RobotTrader
RobotTrader's picture

Maybe Merkel is talking down the markets on purpose?

Only to unleash a statement later?

Fri, 11/25/2011 - 01:39 | 1912207 lizzy36
lizzy36's picture

My guess is Merkel want countries like Greece and Portugal gone from the Eurozone and the EURO.

I don't know what you do with Spain.

I assume she wants to use her resources to save Italy and France, and make remake the rest of the EU with much tighter economic intergration (read subserviant to Germany).

Fri, 11/25/2011 - 02:44 | 1912275 Manthong
Manthong's picture

Foist it on us.

Heck, the reconquista is just about complete and Spanish just about the official language here anyways.

AND, our Muslims probably want a right of return to Cordoba.

Fri, 11/25/2011 - 08:18 | 1912454 spankfish
spankfish's picture

I guess somebody should say La Raza bitchez.

Fri, 11/25/2011 - 01:39 | 1912208 navy62802
navy62802's picture

It's all a charade. The Eurozone is going to fail. The only question is when. ESFS, ECB, IMF, we can throw out plenty of 3 and 4 letter institutions which should, based on conventional logic, bail out the European nations. But in the end, no one has the cash. Not even the US. Thus, the post-WWII system falls on its face, as it was always destined to. The global economic system which has grown out of post-WWII Europe is failing, and the entire world will bear the consequences.

Fri, 11/25/2011 - 02:15 | 1912254 topcallingtroll
topcallingtroll's picture

The problems ocurred when the dollar was severed from gold by nixon.
After that there was no way to address imbalances against countries with fixed exchange rates that were unfairly low. Demand could be pylled forward to infinity....almost.

Most of us are choking on junk. Our houses and storage sheds filled to the rafters. There are millions of new and used cars in excess of true demand.

You can find everything you need at garage sales and second hand stores. Barely worn fine italian suites for fifty bucks, kitchen items, clothes, furnishings, everything.

What if people decide to keep their cars ten years and repair them instead?

We could live off ebay, craigslist, second hand stores, and garage sales for five to ten years before the excess supply was used up.

I have always kept my cars ten or more years. What happens when everyone does it?

Fri, 11/25/2011 - 02:36 | 1912271 navy62802
navy62802's picture

What you're talking about is the market struggling to find true value. But our world is so inflationary that the value of everyday goods is priced far beyond true value. And the fear is that the market will eventually find the true value one way or another. The entire fraud that we have today is built upon a fraud spanning at least a couple of decades. Asset values have been artificially inflated due to lax lending standards. And there is no political will to help deflate them. There is only one end and that end is fiat monetary devaluation.

Fri, 11/25/2011 - 05:06 | 1912379 blunderdog
blunderdog's picture

I heard a story about a rich tourist passing through town and almost spending $100 and fixing it all.

Fri, 11/25/2011 - 01:47 | 1912220 caerus
caerus's picture

ES price action says it doesn't support and 1100 is toast

Fri, 11/25/2011 - 02:03 | 1912239 chump666
chump666's picture

Be careful...half day rally BS.  That the case, good to find short positions. 

Fri, 11/25/2011 - 02:25 | 1912262 caerus
caerus's picture

yeah i expect a thin trade but i've been short for a while now...if i lose...i lose

Fri, 11/25/2011 - 02:07 | 1912242 boyplunger
boyplunger's picture

slide bitchez!

Fri, 11/25/2011 - 02:22 | 1912258 Caviar Emptor
Caviar Emptor's picture

Flash: In response to latest Vietnam data we are long Dong, silver

Fri, 11/25/2011 - 02:37 | 1912272 JohnG
JohnG's picture

Maybe OT...been away..

Why the fucke are commods trading right now?????  Mkts are supposed to be closed???


Anybody here???

Fri, 11/25/2011 - 02:41 | 1912274 JohnG
JohnG's picture

Getting live bid/asks on metals, currencies, NDX futs?? WTF?

Fri, 11/25/2011 - 02:41 | 1912276 caerus
caerus's picture

CME Globex® Thanksgiving Holiday Schedule

CME Group Equity Products

Wednesday, Nov 23

1515 CT – Regular CME Globex close for trade date Wednesday, Nov 23

1530 CT – Regular CME Globex open for trade date Friday, Nov 25

Note: Day/Session orders entered after 1530 CT on Wednesday are for trade date Friday, Nov 25 and will continue working until Friday’s close at 1215 CT

Thursday, Nov 24

1030 CT – Trading halt Order entry, modification and cancellation allowed

1700 CT – Halted products resume trading

Friday, Nov 25

1215 CT – Early CME Globex close for trade date Friday, Nov 25

Fri, 11/25/2011 - 02:50 | 1912280 JohnG
JohnG's picture



Friday, Nov 25

1215 CT – Early CME Globex close for trade date Friday, Nov 25


Currently 1:48 CDT still getting quotes?


Time to go back to meth?  Already been through school, to goldman, to rehab.  Not fucking again, tell me it isn't so?


--edit 00:49 CDT long trip home.

Fri, 11/25/2011 - 02:51 | 1912284 caerus
caerus's picture

lol np...up late drinking and watching quotes myself...happy thanksgiving!

Fri, 11/25/2011 - 02:55 | 1912287 JohnG
JohnG's picture

You too my friend.  Waitress liberal with the wine on the flight home, glass never got empty.

Fri, 11/25/2011 - 03:39 | 1912319 Setarcos
Setarcos's picture

I assume that you live in the US and are on holiday because of "Thanksgiving" - whatever the fuck that means, except for being thankful that the natives got eliminated.

In any case it might surprize you to have it TOLD to you that the rest of the world does not go on holiday in tandem with whatever applies in the US, e.g. Sunday is not widely regarded as a "day off" and, even if it was, different time zones mean that it is already Monday whilst you are still sound asleep in your Sunday.

Bitches don't it, but thems the facts.






Fri, 11/25/2011 - 06:35 | 1912416 JohnG
JohnG's picture

That was completely uncalled for.

Fri, 11/25/2011 - 07:04 | 1912423 nmewn
nmewn's picture

"I assume that you live in the US and are on holiday because of "Thanksgiving" - whatever the fuck that means, except for being thankful that the natives got eliminated."

The "natives" were doing a pretty good job of eliminating each other already...but its also true the Europeans sped up that process. Maybe they needed more room for all the African slaves they were importing ;-)

Fri, 11/25/2011 - 10:56 | 1912783 justtotaketheedgeoff
justtotaketheedgeoff's picture

Thanksgiving is a day of giving thanks to God for having a bountiful harvest. The Pilgrims and the native Americans shared a meal together in the 1600's so that the Pilgrims could thank the natives for saving their sorry butts from starvation. If they hadn't taken pity on the pathetically unprepared English settlers, many more of them would have died.  Well, at least, that's what I learned in school many years ago.  Oh and I think it was smallpox that was responsible for the decimation of the native population. It was a new disease in the New World and there was no immunity.  I could be wrong though.

Fri, 11/25/2011 - 03:13 | 1912304 SunBlaster
SunBlaster's picture

So they make a projection of selling 1trillion worth of bonds. When noone buys them they say that new projection is 440billion!?!?

So when noone buys that what's new number gonna be!

Fri, 11/25/2011 - 08:24 | 1912456 spankfish
spankfish's picture

+1 for the gif.

Fri, 11/25/2011 - 03:20 | 1912308 Setarcos
Setarcos's picture

Situation simplified.

Governments fear popularity decline, if pet programmes like military spending are seen to be directly paid for with taxes.

Simple solution: borrow from the Fed/private banks.

Painless right?  Not quite!

Banks charge compounding interest ... and who pays that interest?  Well tax payers of course, the only source of income for governments ... except for loans from banks.

So banks rule governments and buy compliant politicians, who then bend over backwards to keep the whole Ponzi scheme running, i.e. of endless growth and ever-more borrowers to fuel a 'growth' based in shrinking resources.

If you have a suspicion that the world is mad and that banksters are the maddest of all, then you might be correct.

Fri, 11/25/2011 - 03:37 | 1912317 RobotTrader
RobotTrader's picture

metals getting hammered again

Fri, 11/25/2011 - 05:13 | 1912383 Zero Govt
Zero Govt's picture

not quite as much as you do on ZH

whatdya think Gold will be 1st week of January Robby Robot, higher or lower?

Fri, 11/25/2011 - 04:02 | 1912337 Temporalist
Temporalist's picture
China to launch interbank trading of AUD, CAD against yuan


Fri, 11/25/2011 - 04:13 | 1912347 Element
Element's picture

hmm... just in time to watch both deflate

Fri, 11/25/2011 - 07:31 | 1912433 sabra1
sabra1's picture

canadian real estate not in a bubble, our nickels are emblazed with the mighty beaver, and, canadiantire money has never been devalued!

Fri, 11/25/2011 - 04:15 | 1912349 Temporalist
Temporalist's picture
Silvio Berlusconi fails to obtain High Court order relating to corruption trial


Fri, 11/25/2011 - 04:22 | 1912353 Element
Element's picture

Bible quote of the day:


14:28  For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have [sufficient] to finish [it]?

14:29 Lest haply, after he hath laid the foundation, and is not able to finish [it], all that behold [it] begin to mock him,

14:30 Saying, This man began to build, and was not able to finish.


"Given the highly volatile markets and uncertainty over future European Central Bank interventions, it is almost impossible to predict the value of bonds the EFSF will eventually be able to insure."

Fri, 11/25/2011 - 04:57 | 1912372 Zero Govt
Zero Govt's picture

the EFSF denied it was an outright pyramid scheme, andwas buying its own bonds

This'll put Europe on a more stable footing... looking solid guys, looking good

Fri, 11/25/2011 - 07:51 | 1912446 nmewn
nmewn's picture

(First drunk Keynesian on the bar stool) Wouldn't it be really cool if we could issue our own money to pay for this bar tab?...hiccup!

(Second drunk Keynesian) It be even cooler if we called the bar tab an asset and charged the bartender interest for our drinks.

Fri, 11/25/2011 - 05:02 | 1912375 Georgesblog
Georgesblog's picture

Friday, Nov. 25th, 2011 - Now that I've revived from my Thanksgiving nap, I have questions. How many people will lose their jobs between nowand the end of the year? How many families with children will be living in homeless shelters? Now that I think of it, living in tents might be good practice for the OWS protesters. They may have to get used to it. What will this Black Friday bring?

Fri, 11/25/2011 - 05:07 | 1912380 cherry picker
cherry picker's picture

As the end nears, when food becomes scarce and water is full of radiation, survivors of the greatest war will look toward the heavens and cry "why?"

A booming voice responds from up there, "Why not?"

Fri, 11/25/2011 - 05:13 | 1912384 Kina
Kina's picture

Everything that is paper getting hammered. Race between paper gold and AUD.

Do NOT follow this link or you will be banned from the site!