Frontrunning: August 30

Tyler Durden's picture

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mantrid's picture

More frontrunning

It's not exactly the Bernank trick with a chopper but after announcing expected 2% inflation in eurozone Trichet seems to have started liquidity injections nowhere else than in Maastricht - where the (in)famous convergence criteria were once set only to be bluntly ignored by everyone.

Sudden Debt's picture

There is something very funny happening in Europe.

Every European country has a hughe inflation index this year and suddenly food prices have dropped bigtime causing the inflation to drop.

Nothing spectacular...


The weather was a bitch in Europe this summer. Fruits and vegetables had one of the worst crops ever!


And here comes the fun part:

You would think that the farmes would be bleeding financially BUT the EU subsidizes them and cover all their losses!

SO: The index may be down, but the cost still goes to the taxpayer.

And in the store, you'll only see a 5% drop in prices.

I guess they'll try everthing now to make inflation go lower before the end of the year before wages are adjusted to inflation.


anynonmous's picture

The real effects of debt

Change in Household debt as a percentage of GDP by Country



At moderate levels, debt improves welfare and can enhance growth. But high levels can be damaging. When does the level of debt go from good to bad? We address this question using a new dataset that includes the level of government, non-financial corporate and household debt in 18 OECD countries from 1980 to 2010. Our results support the view that, beyond a certain level, debt is bad for growth. For government debt, the threshold is in the range of 80 to 100% of GDP. The immediate implication is that countries with high debt must act quickly and decisively to address their fiscal problems. The longer-term lesson is that, to build the fiscal buffer required to address extraordinary events, governments should keep debt well below the estimated thresholds. Up to a point, corporate and household debt can be good for growth. But when corporate debt goes beyond 90% of GDP, our results suggest that it becomes a drag on growth. And for household debt, we report a threshold around 85% of GDP, although the impact is very imprecisely estimated.


sudzee's picture

OT: Holding Liberty dollars? This from Coin World.

Federal officials now say that Liberty Dollars may be subject to seizure as "contraband."

The U.S. Attorney's Office that prosecuted NORFED founder Bernard von NotHaus states that individuals owning Liberty Dollars could have them confiscated, even if they are just holding them in their collection or displaying them for educational purposes, a reversal of earlier comments from the same office. In addition, a U.S. Secret Service official stated that while he could not offer a formal ruling, he suggested that Secret Service agents would be duty-bound to confiscate the medallions once marketed as an alternative currency before the arrest and conviction of von NotHaus on federal charges, including counterfeiting.

Concerns about the possible confiscation of the medallions led ANA officials to reject a collector's request to exhibit his collection of Liberty Dollars during the recently concluded ANA World's Fair of Money.

disabledvet's picture

Market has been front running Fed for two years. U missed the soaring value of treasuries? Sorry to hear that. More to come? You all are the ones saying QE is guaranteed.

shacai's picture

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