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Goldman's Sigma X Hints Who The Next Contagion Target Is

Tyler Durden's picture




 

Five months ago, when Italian yields were still tame in the 3% ballpark, and not 7% where they are today, we suggested that based on trading patterns and overall volume in Goldman's dark pool, Italy may be about to experience a "Greek episode." Days later we were proven right as Italian yields and spreads started their relentless move wider, with only those who had access to Sigma X being able to get an advance whiff of what was about to happen. Well today we are happy to report that the German diversion may have worked: the truth is that nobody appears to care about Germany. Instead what everyone does seem to care about, is the nation with the greatest combined debt (government, corporate and household) to GDP in the world. Yup. The UK.

As a reminder:

And here is who is most active today:

 

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Wed, 11/23/2011 - 16:15 | 1908087 jcaz
jcaz's picture

Wondered how long it would take to get around to The Island....

Wed, 11/23/2011 - 16:26 | 1908137 Decay is Constant
Decay is Constant's picture

Is it just me, or are things happening at a faster pace? 

Greece seemed to go on for years. 

Italy, once it started seemed to move more quickly.

France and Germany might take a bit longer since they are bigger dominoes with bigger inertia.

The UK, another big domino.

Perhaps snowball is a better analogy.  Bigger and bigger with more momentum.

Wed, 11/23/2011 - 16:39 | 1908208 jcaz
jcaz's picture

Yep, everyone thinks they can manage credit, until they can't-  like 2008, it just goes thermonuclear........

Wed, 11/23/2011 - 17:03 | 1908318 Oh regional Indian
Oh regional Indian's picture

The debt crisis and Fukushima have so much in common, it is not funny.

At every level imaginable. And the UK, rich richer, poor drunker. 24X7 pubs. Such a brilliant idea.

ORI

second-trailer/

Thu, 11/24/2011 - 05:29 | 1910064 ThatThatcher
ThatThatcher's picture

Erm pardon?

Wed, 11/23/2011 - 21:30 | 1909094 Buck Johnson
Buck Johnson's picture

Your correct, this snowball started a few years ago and then while it rolled down hill it picked up more snow making it bigger and speed with momentum which is causing this whole situation to come to ahead.  Remember back over a year ago Spain and Italy was quiet about them having any problems also and look at what the UK has been doing, quiet as a church mouse.  They have to be invested heavily in the mainland of Europe, they don't have enough people on the island to invest that much money and debt in.  This hammer is coming down and coming down hard and the UK is hiding until they can't hide anymore just like Spain and Italy and Belgium with Drexia (which is still in major trouble).

Thu, 11/24/2011 - 06:18 | 1910102 gojam
gojam's picture

I agree that the UK is deliberately keeping a low profile.

But don't forget the £275 billion's worth of QE since 2009. £75 billion only announced several weeks ago by the BoE.

The UK gov is portraying itself as a safe haven, yields on 10 years dipped below Germany earlier today but they are buying UK bonds on the secondary market which is the main reason why yields are low.

I suspect they, unlike the ECB and Eurozone, have the weapons to fend of problems atleast until after France has defaulted. Plus look at the Government debt, UK only really becomes exposed if others default and UK banks come into the firing line.

It's why I don't like the nationalistic blame game being played out everywhere because everybody is in the shit and everyone will go down, everybody is just playing for pride and history's judgement.

Thu, 11/24/2011 - 12:44 | 1910876 Quincy
Quincy's picture

BOE isn't buying enough gilts to keep yields as low as they are nor are they the reason why gilts are outperforming treasuries. Plenty of large institutional investors have been plowing money into gilts for solid reasons - UK controls its currency, somewhat functional political system (vs. US), began austerity more than a year ago, etc.

They pulled the same "Sigma X predicts the UK is next" in July or August.

Wed, 11/23/2011 - 16:58 | 1908299 Goldenballs
Goldenballs's picture

It takes years of being run by total dickheads to get in the position we are in.

Thu, 11/24/2011 - 01:40 | 1908965 philipat
philipat's picture

G. Brown Esq, never elected and, as Chanceller ("Treasury Secretary") sold off a large part of the UK's Gold reserves into the open market at historically low levels (The "Brown bottom") to create more entitlements.

 

Strangely, both Labour in the UK and the Democrats in the US (In summary, Socialists) still seem to believe that even more borrowing/spending is the answer to too much existing debt. This can't end well.

Wed, 11/23/2011 - 20:49 | 1908987 plantigrade
plantigrade's picture

centuries ?

Wed, 11/23/2011 - 23:37 | 1909351 covert
Wed, 11/23/2011 - 16:15 | 1908089 Tommy5454
Tommy5454's picture

I don't know how these wealth managers fail. No need for bonds, buy ES at 3pm, sell at 3:59.

Wed, 11/23/2011 - 16:33 | 1908188 dcb
dcb's picture

14:00 14:30 myself it's gross isn't it.

Wed, 11/23/2011 - 17:00 | 1908304 Tommy5454
Tommy5454's picture

Yea yours is better. 10 ES points down in less than ten minutes on no news. I'll take it but wow, I guess 3:59 is too late.

Wed, 11/23/2011 - 16:16 | 1908097 terryfuckwit
terryfuckwit's picture

bring it on

Wed, 11/23/2011 - 18:28 | 1908662 AUD
AUD's picture

The real question is - Will Sid the Sexist now have to sell his arse on the streets of London rather than just that time he got stuck in Bangkok with no money?

Wed, 11/23/2011 - 16:16 | 1908098 Joe Sixpack
Joe Sixpack's picture

What happens when you remove parasitical paper (i.e., derivatives, etc.) from being counted as GDP? US and UK as well as probably Germany will look even worse comparatively.

Wed, 11/23/2011 - 16:23 | 1908118 Azannoth
Azannoth's picture

You mean like Germany 'finding' 50B under the pillow?

Wed, 11/23/2011 - 16:52 | 1908263 JW n FL
JW n FL's picture

 

 

You mean Trillion.. not? billion.. right.

Wed, 11/23/2011 - 17:55 | 1908567 SilverIsKing
SilverIsKing's picture

55 Billion Euros

Wed, 11/23/2011 - 16:19 | 1908108 SwingForce
SwingForce's picture

Yes but they have recapped their banks, Germany & France have not. Kyle said so.

Wed, 11/23/2011 - 16:41 | 1908218 terryfuckwit
terryfuckwit's picture

yes and our banks are completely honest and transparent??

Wed, 11/23/2011 - 16:47 | 1908252 SwingForce
SwingForce's picture

No, its a relative thing.

Wed, 11/23/2011 - 16:58 | 1908298 terryfuckwit
terryfuckwit's picture

relative to the big lie that covers the smaler lies from all the lying bastards.. i will run with the sigma x pool being the lesser of todays conglomerate of world wide aldrige prior... fuck pig liar... banks and their political puppets

scuse language

Wed, 11/23/2011 - 19:01 | 1908768 richard in norway
richard in norway's picture

barclays has to rollover 68% of it debt next year, opps

Wed, 11/23/2011 - 16:20 | 1908110 Smartie37
Smartie37's picture

And coming round the turn, it Barclay's in front, with RBS coming on strong, with UniCredit now fading..........

and into the finish, up from the back of the pack it's......................................BAC !!!!!!!!!!!! 

What a race folks---------BAC went off at 45 - 1 !

Our next race starts in two days, with MS slotted as the favorite.......................

Wed, 11/23/2011 - 16:21 | 1908112 monopoly
monopoly's picture

Yes, was way to quiet in the land of the Queen and Duchess. We will need a bigger bowl of popcorn. This movie is going to last a lot longer than we thought.

Wed, 11/23/2011 - 16:22 | 1908117 mayhem_korner
mayhem_korner's picture

 

 

Sorry, can't help it, but the fish on the chart are hysterical.  There I said it.

"Pandemic" should be ringing through the airwaves again soon.  It's been a while...prolly since the Mexican pig flu.

Wed, 11/23/2011 - 16:23 | 1908126 Nate H
Nate H's picture

what is source of that graph? not charles hugh smith??

i dont trust those numbers.

in any case UK is not highest in the world, just highest on that graph (Ie. Ireland much higher, unless that is lumped into UK somehow)

but, main point is accurate, UK is f**ked

Wed, 11/23/2011 - 16:48 | 1908255 topcallingtroll
topcallingtroll's picture

According to bloomberg total debt per gdp was ranked as follows in 2007

Iceland
Ireland
Switzerland
UK

The united states was 16.

That is why we still have some wiggle room.

Wed, 11/23/2011 - 19:49 | 1908880 masterinchancery
masterinchancery's picture

But when you throw in entitlements and other vote buying obligations, the US surges to the front at something like 850% of GDP--US #1!

Wed, 11/23/2011 - 16:25 | 1908135 TruthInSunshine
TruthInSunshine's picture

PIIGS+France+UK (PIIGSFUK)

 

It's been front and center for those monitoring their Doppler whilst ignoring cnBSc & Bloomturd all along.

Wed, 11/23/2011 - 16:29 | 1908153 6_7_42
6_7_42's picture

lo-f'ing-l +100

Wed, 11/23/2011 - 17:31 | 1908456 peekcrackers
peekcrackers's picture

@endtheFed

+1 .. lmao

spell that in your spaghetti o's

 

Wed, 11/23/2011 - 21:16 | 1909058 ping
ping's picture

I'm waiting for it to spread to the Czech Republic, Estonia, Austria and Roumania. Then the crisis 'IS A PIG FUCKER'. 

Wed, 11/23/2011 - 17:01 | 1908277 GeneMarchbanks
GeneMarchbanks's picture

Yeah. Not to mention when you add America it's PIIGSFU.... nv

Wed, 11/23/2011 - 17:36 | 1908383 TruthInSunshine
TruthInSunshine's picture

Agreed.

But as some have said, the tallest midget in the room stands proudly (though I'm not sure who is the tallest midget, anymore - Chanos just got back from Hong Kong and said his personal observations only reconfirm his observations on a short China thesis).

*Disclaimer: Chanos is among the very select few people commenting on economic matters whose opinion I put any 'stock' into.

Fri, 11/25/2011 - 01:50 | 1912223 Learn more and ...
Learn more and know less's picture

Surely PIIGS + France + UK + US = PIIGS FUK US

Wed, 11/23/2011 - 16:27 | 1908146 Hopium Dealer
Hopium Dealer's picture

Jon Corzine is looking for work.

Wed, 11/23/2011 - 17:39 | 1908497 TruthInSunshine
TruthInSunshine's picture

Obama/Biden 2012 just commissioned the USS Corzine, and they're going to plaster it with campaign slogans and do a water tour on it in the spring.

Here's video of the recent ceremony:

USS John Corzine Commissioning

Wed, 11/23/2011 - 16:28 | 1908148 youngandhealthy
youngandhealthy's picture

When the shit hit the fan....!

This story is going to be extremly interesting to follow in the "international financial press".

Today in his "prime-time-column" in the FT Martin Wolf felt "obliged" to defend the strong Anglo-Saxon view of the "things of matter" in the financial world.

 

I bet this will not show-up anywhere soon until it is to late.

 

The combined EMU debt-to-GDP is around 75%....UK??? Ur guess 

Thu, 11/24/2011 - 05:49 | 1910091 Ghordius
Ghordius's picture

FT Martin Wolf is not the only one that will have to go overdrive.
At stake is the UK view of the single Nation/Currency/etc.
Good luck at devaluing alone...

Wed, 11/23/2011 - 16:29 | 1908158 GoodMorningMr.V...
GoodMorningMr.VanRumpoy...'s picture

Might expedite the plan to convince  the British Populous to join the Euro right before it collapses.

Right now the political class, Tony Blair, Brown, and even tory leaders, are out publicly claiming that the U.K. has no choice but to quickly  join the Euro are they will face economic catastrophe.

 

http://www.telegraph.co.uk/news/worldnews/europe/eu/8902450/Britain-will...

Wed, 11/23/2011 - 16:59 | 1908301 JW n FL
JW n FL's picture

 

 

++++++++++++++++++++++++++++++++

the 6 page memo last month, giving England Veto Power was interesting as well.

Thanks for Sharing!

Wed, 11/23/2011 - 16:29 | 1908161 oogs66
oogs66's picture

No wonder Cameron is begging for ECB printing

Wed, 11/23/2011 - 16:36 | 1908198 terryfuckwit
terryfuckwit's picture

British intelliance now enjoys a good relationship with IRA old enemies in Ireland... We are not going to recap the banks we are going to kneecap the banksters... 

Wed, 11/23/2011 - 16:30 | 1908167 Ellesmere
Ellesmere's picture

So how long before Sterling gets hammered ?

Wed, 11/23/2011 - 16:32 | 1908182 youngandhealthy
youngandhealthy's picture

minutes to days

Wed, 11/23/2011 - 18:03 | 1908594 Ethics Gradient
Ethics Gradient's picture

Where will all the money go? Do tell.

Wed, 11/23/2011 - 16:59 | 1908171 Kali
Kali's picture

http://www.moneynews.com/Economy/US-State-Revenue/2011/11/23/id/419006

States freaking cuz rose colored revenue forecasts were too low.  More cuts to State's budgets coming.  And the shit rolls downhill, especially for counties/cities dependent on State and Federal $$ largesse:

http://currycountyreporter.com/news/story.cfm?story_no=7943  another County ready to bite the dust.

Funny how governments are now fighting over unfunded mandates, who can tax, whose responsibility it is to provide services, etc. since they were the ones who passed all the laws about this crap anyway. 

The US is in as bad of shape as anywhere/anyone.  The Syria thing has me worried, they are running out of options to divert attention away from economic collapse.

Happy Thanksgiving everyone!

 

 

Wed, 11/23/2011 - 17:02 | 1908315 JW n FL
JW n FL's picture

 

 

Wall Street get 4 times more money than the U.S. Military.. The U.S. Military is running how many wars? But Wall Street get 4 TIMES MORE TAX DOLLARS!

WAKE UP!

Poor People.. Social Security.. Un-Employment Benefits..

If you take ALL! the social services of America.. and add them up.. it equals 7% - 8%.. in this economy.. so 3% - 5% in a strong economy.. of GDP.. We in America.. Regardless of what the Tax Rate is supposed to be.. can NOT! collect over 8% in taxes??

The Tax Loop Holes??

Never mind, You dumb fucking sheep dont want to know the truth! you want to re-enforce your own ignorance.. now go google something until you find someone who agrees with your ignorance.. dont pick up a calculator and figure out this shit for yourself.

 

Wed, 11/23/2011 - 17:13 | 1908356 Kali
Kali's picture

JW, I agree with you, chill bro.  If you read the State Revenue article, it is ironic that NY is one of the freaking, cuz of "reduced revenues from Wall Street".  Pop some corn, mix a drink, fire up a doobie, grab ur honey and have a nice T-day.  Aint nothin us peons can do about it for now.  Prepare for the worst, hope for the best.

Wed, 11/23/2011 - 16:32 | 1908176 terryfuckwit
terryfuckwit's picture

but we have heaps of gold don't we Gordon

Wed, 11/23/2011 - 16:33 | 1908181 Cyrano de Bivouac
Cyrano de Bivouac's picture

Duke of Wellington and Earl of Chichester -your comments please.

Wed, 11/23/2011 - 16:33 | 1908184 Eireann go Brach
Eireann go Brach's picture

This ain't bloody Awight mate, fuck the Queen and her tea and crumpets, us Brits are fucked like a one armed man hanging off a cliff with itchy balls!

Wed, 11/23/2011 - 18:26 | 1908652 d2thdr
d2thdr's picture

Awesome.

Thu, 11/24/2011 - 02:00 | 1909741 Kiwi Pete
Kiwi Pete's picture

I'd rather have the Queen and her corgies than Rumpey Pumpey. You guys better not join the Euro for all our sakes. 

Wed, 11/23/2011 - 16:33 | 1908185 Conrad Murray
Conrad Murray's picture

That debt to GDP picture is great.

 

Who lives in a deathspiral under the sea?
Sovereign Debtpants!

Wed, 11/23/2011 - 16:37 | 1908199 Dr. Engali
Dr. Engali's picture

And that is the reason why the German finance minister said that the Brits would have no choice but to join ht EU. Shit we look like pikers compared to them.

Wed, 11/23/2011 - 17:58 | 1908389 agent default
agent default's picture

Yeah, they will give up the option to print or any other monetary policy in order to join a dysfunctional currency that requires abdication of sovereignty to a committee of nobodies, pushed around by Germany. 

Hey Sauble, here is something Britain would rather do, a plan that will increase public spending, encourage investment in heavy industry and decrease unemployment, instead of joining the Euro: "Service" Dresden.

I've had it up to my neck with the krauts pretending they are Europe lately.  Their finances are not that much better form everybody else's, sometimes I get the feeling they just point at others to divert attention from their own mess. 

Keep pushing it.  At a certain point everybody will walk, reinstate tariffs and capital controls, and then, Germany will find itself locked out of the European markets.   And Germany will do what they do best.  Lose another war. 

 

Wed, 11/23/2011 - 18:09 | 1908615 reload
reload's picture

I LIKE your scenario

Unfortunately a small rise in mortgage rates/fall in house prices and it is game over for many UK households and banks.

Sterling is a massive sell.

We have been led to Market by our banks and now the politicians can haggle about the.price. Rely on them to absolutely fuck it up. Sickening and obvious for a while.

Wed, 11/23/2011 - 19:31 | 1908846 agent default
agent default's picture

The sterling may be a sell, many households may default, and rightly so if they lived beyond their means,  banks may collapse if they made stupid loans, and yes, there will be two to four years of absolute hell for Britain.  But that will be it.  Once the bad debt is  defaulted liquidated and flushed out of the system, you will have a healthy base from which to start the economy.  It has happened before, it will happen again.  What the Germans and the EU are proposing on the other hand, is infinite austerity coupled by bailouts so that the whole clusterfuck keeps going on and on to the point where you are no longer repaying your debt.  You have to live under debt serfdom forever to keep repaying the interest on the interest on the interest on the original loan.  This is what the Eurocrats and Germany have in mind, and they must be told to go to hell. When I see this new found German self confidence and arrogance, when their own house is also on fire it makes me mad.  I blame the US over this one.  They should have handed the whole thing over to Stalin and kept some of the East European countries out of his reach. Churchill must be spinning in his grave over this.

Thu, 11/24/2011 - 06:30 | 1910136 reload
reload's picture

Lets hope your scenario plays out, it gives the chance for better times ahead, and proper allocation of capital to productive enterprise.

Unfortunately I think our political class if far more likely to do the wrong thing. I.e they will use the next part of the financial colapse to sell the UK into European austerity slavery. The profligate will think they are being rescued - but they wont be, and the thrifty and productive will face further destruction of savings and ever higher taxation and regulation.

A deal will be done behind closed doors at the time of maximum fear. There will be no debate, no consultation and no vote. Cammeron will then adress the nation with a `we r all in this together, there was no alternative` type speach.

More governance and less democracy is the end game. Hello permanently reduced living standards for vast the majority. Cleansing default will be resisted at ALL costs by bankers and politicians, anybody who thinks different has not been paying attention.

Wed, 11/23/2011 - 16:39 | 1908212 Socrate
Socrate's picture

So here's why Alcatel-Lucent is giving so much blood during the last two days at the CAC40.

Wed, 11/23/2011 - 16:43 | 1908229 slewie the pi-rat
slewie the pi-rat's picture

they have kissed lagarde's ass and agreed to a new IMF austerity program in order to be eligible for emergency credit lines:

nomo royal weddings!

hmmm...that little love fest with the moQ didn't BK britain, france, italy, and perhaps a few of the other "winners" too, did it, BiCheZ?

Wed, 11/23/2011 - 16:45 | 1908239 Steroid
Steroid's picture

Why does US government debt show only 80%?

Just the federal debt, without the extra liabilities, is over 100%!

Wed, 11/23/2011 - 16:57 | 1908279 youngandhealthy
youngandhealthy's picture

becasue it is an anglo-saxon "investment-banksters" chart.....the Banksters wants to be bailed-out by the ECB (and BOE for that matter) because of their gross exposures (forgett about the CDS shit)

Wed, 11/23/2011 - 17:11 | 1908348 alien-IQ
alien-IQ's picture

because anyone who dares to print the truth regarding the US debt gets renditioned to Gitmo for an "enhanced" course in US economics.

Wed, 11/23/2011 - 16:59 | 1908303 Sean Fernyhough
Sean Fernyhough's picture

The breakdown of the business debt in the UK is revealing: http://econ.st/st1Fgk

People here haven't quite got desparate enough yet in this country although the boy David is beginning to crack:

 

http://www.businessweek.com/news/2011-11-21/cameron-says-reducing-debt-is-proving-harder-than-envisaged.html

Wed, 11/23/2011 - 17:26 | 1908427 Reptil
Reptil's picture

parity with the UK pound? that'd be the day!

Wed, 11/23/2011 - 17:39 | 1908500 Youri Carma
Youri Carma's picture

ohh britannia, britannia? rules no wave, britons always shall be slaves http://www.youtube.com/watch?v=8B2vz0nHwDw

Wed, 11/23/2011 - 17:43 | 1908520 terryfuckwit
terryfuckwit's picture

oh no i think i am going to vomit... I can see clearly the "were all in it together" speech from Cameron. Thing were much worse than the previous government explained..bla bla bla special measures...but sorry we are still unable to let TBTF FAIL....but you can take it on the chin mr brit for me and my fuck pig banker cronies

Wed, 11/23/2011 - 18:34 | 1908671 NuYawkFrankie
NuYawkFrankie's picture

I hear ya loud & clear F-wit  - that Cameroon's one of the slimiest, greasiest lookin sob's - apart from Blair, Brown.... ahhh fuggedaboutit! LOL!!! 

Hey you forgot the eternal refrain of the permanently-being-screwed Brits: Mustn't complain 'spose

LOL!!!

 

Wed, 11/23/2011 - 21:14 | 1909053 smiler03
smiler03's picture

We moan ALL the time, it is our national obsession. It is for a good reason that our Australian offspring call us WHINGING POMS!

Wed, 11/23/2011 - 18:01 | 1908589 hooligan2009
hooligan2009's picture

this is all getting a bit tired..most of the debt listed as business and bank debt of the UK is not actually british debt and certainly doesn't reflect assets. on another hand you have the british listed as being the third largest holders of us treasuries, when of course they aren't that either. this is a reflection of britain as an offshore banking centre. the debts aren't british, neither are the assets. london is responsible for some whacking great number of that debt and the assets, none of which are british, but are foreign. the number of british debt oriented institutions in london is in single figures, but there are hundreds of "foreign" financial insitututions. even so called british stalwarts like barclays bank are run by americans and owned by royal families in the middle east. hsbc is listed in bermuda, not london. the largest life insurers are owned by index tracking equity funds and that leaves pretty well double O, triple O fuck all blank owned by the british. they sold out in the big bang of pre-October 1987

Wed, 11/23/2011 - 18:10 | 1908605 hooligan2009
hooligan2009's picture

and us debt at 80% of GDP is about three years out of date..its 100% now..and excludes fraudie and funny (oops there i go again) freddy and fannie..their 4 trillion is another 25% of GDP on its own..so i think the concept is great, but hell who can tell if you value the government debt at market value..or better still if it was allowed to find its own market value, what the hell it would be worth in "real" dollars, yen, sdrs or ounces of gold

Wed, 11/23/2011 - 18:57 | 1908750 koperniuk666
koperniuk666's picture

@hooligan

agreed. The Bank sector debt is backed overseas assets. The government debt doesnt need too much funding in next cple years. The weak spot is the huge consumer debt. The solvent (consumer) parties have been deleveraging rapidly over last cple years - while the poor mark time and pay rates of between 50 and 2000pc (REALLY - as seen on TV).These guys probably cant pay it back and so they are gonna get whacked. (whats new?)

so - if this 'move' gets any traction look forward to a fall in sterling which will, if modest, be good for UK. Also, UK is a very big target remember and there are still a couple of smaller, 'profitable' countries to pick off - Hungary anyone? 

On balance - Government borrowing figures were pretty good this month and, like the man says what do you buy with all those GBP you sold??

And anyone for raise in interest rates? 

Thu, 11/24/2011 - 07:51 | 1910214 pmcgoohan
pmcgoohan's picture

The elephant in the room here is housing.

1.242 trillion secured on dwellings in the UK.

I'm assuming those loans are almost entirely from British banks/building socs.

http://www.bankofengland.co.uk/statistics/li/current/index.htm#tables

A fall of 30% in house prices would wipe out 372 billion. Yes I know- it couldnt happen in the US either.

That is why Merv is going all in supporting the UK housing market. He's not protecting the average UK household, he's protecting the banking system.

So no- not all of these assets are foreign and neither is the debt. 

In fact, what we are seeing is a large amount of British assets (London houses) speculatively owned by wealthy Euro cash buyers who will be pulling out even as I type now that the EUR is tanking.

London fell by 40% in the 90s property crash.

Thu, 11/24/2011 - 09:15 | 1910301 koperniuk666
koperniuk666's picture

@mcgoohan

Bang on about property debt.  The usual way to sort uk property bubbles has always been by inflation because uk households will not take a nominal loss on their houses.  . osborne has been trying to get inflation going but has so far failed ( and will continue to fail because govt deficit spending/ QE is being matched by deleveraging - hence output gap is broadly unchanged).

UK households park their money in housing because of the tax system - high taxes on work and investment  versus tax free profit  on residential property.

any attempt to revise the system will probably fail because if, as a consequence, nominal prices fall ( essential) the cameron government will be out of power in a flash. 

But i dont agree about london - its not part of the UK  - its a safe haven parking zone for capital - at the top end. This will only tank if the world ends ( not out of the question!!)

 

Thu, 11/24/2011 - 12:48 | 1910888 Quincy
Quincy's picture

Pulling out???

Not in my experience. Have been trying to buy a flat in Westminster and the eurozone buyers with cash in hand have been using prime London property as their mattress and I'm SOL.

London property is a different market now as compared to the 90s. More international buyers that have been supporting the market. Outside of London it's an entirely different story ...

Fri, 11/25/2011 - 09:11 | 1912530 pmcgoohan
pmcgoohan's picture

I feel your pain. Im sitting on my deposit money at the moment.

But the fact that the market is so speculative is why I think it is so weak.

They aren't living in these homes. When a different investment starts looking more attractive, they'll pull out in an instant, at just the same time that domestic demand is crumbling.

Thats why I think that when prices do start falling in London, they'll overshoot. But yes, we're not there yet.

Wed, 11/23/2011 - 18:27 | 1908660 foxenburg
foxenburg's picture

What I never see reported is the balance of assets to liabilities. UK might owe a lot, but might be owed more. Businesses might owe a lot but might own real estate, etc that far outvalues what they owe. It's all meaningless without the whole picture.

Wed, 11/23/2011 - 18:40 | 1908711 Ag1761
Ag1761's picture

We shall become a land of self determination once again, we will build our navy strong and our troops will defend the beaches with valour. Our women will grow potatoes and our men will shag sheep and we will burn coal again for 1000 years. Our furnaces will again glow hot, we shall invent and once again establish order and respect throughout this failing Empire.Where others have failed we shall succeed.

or,

Take as much physical as you can get and get on the last fucking flight to NZ.

 

Good luck and BTFD before the arse falls out the pound.

Wed, 11/23/2011 - 21:20 | 1909071 smiler03
smiler03's picture

LOL!

It was even funnier when I misread navy as gravy :)

Wed, 11/23/2011 - 18:51 | 1908736 jmc8888
jmc8888's picture

Aww the Queen will be hard pressed to strut out the imperialist goodies for the world to fawn over inbetween sports at the Olympics. Everyone revel and fawn at what imperialism can bring to your culture. Just avert ones eyes and forget the strife and consequence that is hidden underneath.   Instead expect to see some stuff here  www.ebay.co.uk/.

Good luck to the U.K. public, they aren't to blame.  It's their Queen's fucktard monetary(ism) ideology (a figurehead for monetarism) that she shit out all over the world that's innudating the world with crap.   We're all playing her game.  Until we're not. 

The question is, are we not because we break free, with Glass-Steagall (and here in the U.S. we must impeach Obama or it won't ever get done) or are we not playing because the nukes start flying?

I mean, it's not everyday that the 'softer' Russian, is saying stuff like this.  It's not like the monetary masters aren't trying to strongarm the 'east'.

http://www.telegraph.co.uk/news/worldnews/europe/russia/8910909/Dmitry-M...

But then again, just remember, the goal for the queen IS nuclear war, so keep her propagandists at arm's length regarding any of this Syria, Iran, or other shit.  When the goal is to have 500-1000 million people or less on the planet, every idiot option is 'on the table'.  Because to such an ideology, you either get what you want, or you get what you want.   Control the world, or destroy it.  Either way is good to these psychos.

There was never a cold war.  It was just a faux conflict brought to us by our monetary masters.  Communism in Russia is gone, but here we are again closing in on an endgame.  Because the banksters and their figurehead push it this way. 

When the imperial monetarism is gone, we'll find out there was never a real need for anyone to feel threatened.  It was all just a game.  Everyone put in danger, for the benefit of the very few. 

One which we are still in danger of, because, the fascist imperialists don't want to lose.   They're up to their old tricks again....and again it is pathetically implemented.  Must be the inbreeding.  As for Obama,  he's just stupid.  Republicans? Same.  Except for Ron who is just half stupid....he's no Keynesian...but is an Austrian sophistry economist.

Anways, the monetary masters are fucked harder than Lisa Sparxxx during her 919 man gangbang.   But it's the 99 percent they want to bend over and anally beat that record.

Wed, 11/23/2011 - 19:06 | 1908783 TheJokingJollyRoger
TheJokingJollyRoger's picture

Are we having fun yet?

Wed, 11/23/2011 - 19:24 | 1908832 Ted Baker
Ted Baker's picture

THE WHOLE WORLD IS FXXXXD UP AND THE US IS ALSO BROKEN THANKS TO PEOPLE LIKE PERRY WHO WANT TO RUN FOR PRESIDENT AND DOESN'T KNOW THE MAFIA AGENCIES IN WASHINGTON..WHAT A JOKE! PLANE STUPID LIKE MOST AMERICANS

Wed, 11/23/2011 - 20:04 | 1908911 Quincy
Quincy's picture

Perhaps but Britain has a MUCH longer avg. maturity so less debt to rollover. Also the BOE is monetizing. Gilts will continue to remain strong while eurozone is in crisis-sell eurozone bonds, yes, but where're you going to put the cash? It's out of the euro but in the eurozone, got control of the printing presses (which are running), and long maturities ... It'll continue to get safe haven flows from EU.

Wed, 11/23/2011 - 20:18 | 1908933 Quincy
Quincy's picture

Also where does this 68% of total outstanding debt to be rolled over in 2012 for BARC come from????

Wed, 11/23/2011 - 20:57 | 1909006 sockcutter moto...
sockcutter motorforker's picture

total coincidence, im sure. goldman always tries to give the best deals

Wed, 11/23/2011 - 21:01 | 1909018 Use of Weapons
Use of Weapons's picture

Last time I tried to post this, the entire basis hub got nuked, then again:

Alcatel is sitting on a rail network #1 automated driving of French rail, and #2 has posted:

Paris, November 4, 2011

Profitable progress in Alcatel-Lucent’s transformation - Additional actions to further streamline cost structure - Full-year guidance updated in a more challenging environment

Key numbers for the third quarter 2011

Revenues of Euro 3,797 million, down 0.7% year-over-year at constant currency and down 6.8% year-over-year on a reported basis

• Adjusted2 gross profit of Euro 1,380 million or 36.3% of revenues

• Adjusted2 operating income1 of Euro 173 million or 4.6% of revenues

Reported net profit of Euro 194 million or Euro 0.08 per share

• Operating cash flow3 of Euro (35) million

Net (debt)/cash of Euro (620) million as of September 30, 2011

 

There's a lot more to dig out, especially around China. This is an AT&T of Europe, without the messy public domain.

 

Take a long hard look at that chart: ignore the banks, because everyone knows the problems: focus on the telecommunications & media. Ask yourself why those would be being traded.

Wed, 11/23/2011 - 21:29 | 1909093 Bull_Colapse
Bull_Colapse's picture

but debt is money so this is bullish for the uk. Sarc

Thu, 11/24/2011 - 04:13 | 1909978 Grand Supercycle
Grand Supercycle's picture

USD selling pressure continues and the prospect of an equity xmas rally and EURUSD bullish spike returns.

http://stockmarket618.wordpress.com

Thu, 11/24/2011 - 07:01 | 1910162 GoldbugVariation
GoldbugVariation's picture

I don't believe those UK business and bank debt figures.  What is being counted as a "UK" business or bank here?  Does this include foreign companies which have their corporate debt or stock listed on the London markets?  Does it include foreign companies with sterling denominated borrowing?  How about multinational corporations headquartered in the UK which have borrowings in the UK parent company but GDP-generating activities in their subsidiaries worldwide.  How about hedge funds with leverage?  All these things are in much higher proportions (relative to GDP) in the UK than most other countries due to importance of London as a world financial centre, so the chart would not really be a good like-for-like comparison.

Also does household debt include mortgages?  Because in the UK, property ownership is a far higher % than in most euro-area countries, therefore mortgage debt is high.  But, unlike the US, property owners do not generally have underwater mortgages - sure there's some trouble in the frothy 'buy to let, buy off plan' market hangover from the boom years but that's a small percentage of the overall market and generally confined to wealthy investors who have other assets.

I live in the UK and there is simply no sense of crisis here.  Employment is high, property prices are high and rising, people are confident.  Taxes rose 2 years ago in anticipation of the downturn and generally there's a sense that the UK government has a firm grip on public finances - there's some grumbling about high taxes, and some industrial action by public sector workers who are facing things like pay and pension freezes, and students who will have to pay tuition charges in future, but nothing too serious.  A large proportion of retirement provisions in the UK are funded pensions - i.e. there are privately held assets to fund the pension, unlike euro-area countries where the big hump of future retirees are unfunded and will depend on future public funds.  Generally the sense is that the UK will be a good place from which to weather the coming storm.

Thu, 11/24/2011 - 07:29 | 1910191 twotraps
twotraps's picture

GoldBugVariation, good morning.  Makes sense.  Its hard to say for sure since the world is absolutely punch drunk with negative headlines.  Worse...normal mkt functions are not in full force, making it doubly hard to take action.  20 yrs ago, 1/10th of the negative headlines would have sent all mkts reeling.......

Thu, 11/24/2011 - 07:31 | 1910192 Non-Zero
Non-Zero's picture

In Reply to GoldBugVariation -

 

I'm not sure where in the UK you live, but where are you getting your figures for "property prices are high and rising" from? Your arse? They are flat at best in nominal terms, and falling in real terms.

Re: Student Loans - the new fee and repayment system is a horrendous tax on future earnings. If I had children, I would urge them to work and study part time and not go to University.

Re: Mortgages - almost every person I know is underwater on their mortgage (I'm early 30s, so my circle of friends tended to buy at or near the peak, admittedly).

Re: "No sense of crisis" - I agree to an extent, but it's only due to ignorance and a lag on the SHTF here.

Thu, 11/24/2011 - 12:33 | 1910831 Quincy
Quincy's picture

London

High-end property is doing fine, thank you. Plenty of eurozone cash buyers seeking a safe haven. Asian buying as well but for different reasons.

By student loans I presume you mean the university fees fiasco. Up until now taxpayers have heavily subsidized university education for decades. The public finances are now in dire straits and the gov't at least can recognize that the system of university education is unsustainable - since when did heavily subsidized university education irrespective of merit become a right like health care? The demographics are also a problem. Subsidized university education may have worked generations ago when people went to university in far fewer numbers but not now when nearly everyone wants to go. 

Mortgages. No tears from me. Shouldn't have taken on all of that debt to buy real estate at vastly inflated prices.

Thu, 11/24/2011 - 07:22 | 1910185 Non-Zero
Non-Zero's picture

Re: That chart - Yay, the UK wins at something for once!

 

Oh, wait, higher numbers are bad, right?

 

;-)

Thu, 11/24/2011 - 19:25 | 1911776 marshalmace
marshalmace's picture

Just wondering which tool or where the second screet shot coming from? is that some professional trading platform?

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