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Guest Post: The Final Countdown

Tyler Durden's picture


Submitted by Tim Price, Director of Investment, PFP Wealth Management courtesy of Sovereign Man

The Final Countdown


“Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach.” Debt talks “have not produced a constructive response.”

- The Institute of International Finance, January 13, 2012


“The war situation has developed not necessarily to Japan’s advantage.”

- Japanese Emperor Hirohito after the atomic bombing of Hiroshima and Nagasaki, announcing Japan’s surrender to the Allies.


There is a terrible hubris at the heart of mankind. Like every other living thing on the planet we are products of nature, but we consider ourselves to be well above it. We are beset by regular reminders of our vulnerability, but quickly dismiss them off-handedly to a spiritual plane, calling them “acts of God” as if to show that we could never have prevented them.

In a significant essay for Foreign Affairs, “The Black Swan of Cairo,” Nassim Taleb shows how the efforts of our authorities to suppress volatility actually end up making the world less predictable and more dangerous.

“Although the stated intention of political leaders and economic policy makers is to stabilize the system by inhibiting fluctuations, the result tends to be the opposite. These artificially constrained systems become prone to “Black Swans” – that is, they become extremely vulnerable to large-scale events that lie far from the statistical norm and were largely unpredictable to a given set of observers.”

There is an analogy from the natural world. In the 1960s and 1970s, mid-western American states fell victim to scores of wildfires. Constant interventions by the US Forest Service appeared to have little positive impact – if anything, the problems seemed to worsen. Over time, foresters came to appreciate that fires were a normal and healthy element of the forest ecosystem.

By continually suppressing small fires, they were unwittingly creating the conditions for larger and less containable wildfires in the future. Naturally occurring fires are necessary to remove old forest cover, underbrush and debris. If they are suppressed, the inevitable fire to come has a far greater store of latent fuel at its disposal.

Economist Murray Rothbard jangled the sensibilities of the Keynesians when he wrote his classic study, “America’s Great Depression:”

“If government wishes to see a depression ended as quickly as possible, and the economy returned to normal prosperity, what course should it adopt? The first and clearest injunction is: don’t interfere with the market’s adjustment process. The more the government intervenes to delay the market’s adjustment, the longer and more gruelling the depression will be, and the more difficult will be the road to complete recovery.”

But politicians must be seen to be doing something – like encouraging the construction of a £33 billion white elephant rail link in the middle of an austerity recession.

Not interfering with the market’s adjustment process is simply allowing Schumpeterian “creative destruction” to operate, and cleanse the forest. But that process is anathema to well-compensated entrenched interests that suckle from the teat of the State. Banks, for example.

So while “laissez faire” would accelerate any banking crisis and shorten the resultant economic contraction, it would reveal the identity of too many naked swimmers when the tide retreats. Instead, courtesy of highly paid lobbyists, we get a long drawn out depression. The example of Japan’s zombie banks from the 1990s is still fresh, but ignored in the west.

Rothbard identified the ways in which government can hobble the adjustment process:

1. Prevent or delay liquidation. Lend money to shaky businesses, call on banks to lend further.

2. Inflate further. Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments which, in their turn, will have to be liquidated in some later depression. A government’s “easy money” policy prevents the market’s return to the necessary high interest rates.

3. Keep wage rates up.

4. Keep prices up.

5. Stimulate consumption and discourage saving. More saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved capital even further.

6. Subsidize unemployment. Any subsidization of unemployment (via unemployment “insurance”, relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.

An iatrogenic illness is one caused by the doctor himself. The economies of the west now face policy measures of the sort highlighted by Rothbard that are stated to be in our interests, but which are more likely to do harm to the patient and prolong the recession.

Taleb uses the example of the turkey before Thanksgiving. The turkey is fed for 1,000 days and every day seems to reaffirm the farmer’s generosity of spirit. Until the last day, when the turkey’s confidence and contentment is at its maximum. The “turkey problem” occurs when “a naïve analysis of stability is derived from the absence of past variations”.

To put it another way, the US property market cannot decline because it hasn?t declined in living memory. As Taleb puts it, as humans we inhabit two systems simultaneously: the linear and the complex.

The linear is predictable and permits the use of mathematical tools of high predictive value.

Complex systems,on the other hand, are marked by an absence of visible causal links between their elements, “masking a high degree of interdependence and extremely low predictability.” They also incorporate non-linear elements often called “tipping points.”

One reason for the severity of the financial crisis, and the losses incurred by banks, is that bankers and financial analysts were using linear tools in a non-linear, highly complex environment otherwise known as the financial markets.The models didn’t work.

The problem we face now as investors will end up being existential for some banking institutions and sovereigns. Our (uncontentious) core thesis is that throughout the west, more debt has been accumulated over the past four decades than can ever be paid back.

The question, effectively to be determined on a case-by-case basis, is whether bondholders are handed outright default (which looks increasingly like the case to come in Greece) or whether the authorities, in their understandable but misguided attempts to keep the show on the road, resort to a policy of inflation that could at some point easily spiral out of control.

As Rothbard wrote, “The longer the inflationary boom continues, the more painful and severe will be the necessary adjustment process… the boom cannot continue indefinitely, because eventually the public awakens to the governmental policy of permanent inflation, and flees from money into goods, making its purchases while [the currency] is worth more than it will be in future.”

“The result will be a ‘runaway’ or hyperinflation, so familiar to history, and particularly to the modern world. Hyperinflation, on any count, is far worse than any depression: it destroys the currency – the lifeblood of the economy; it ruins and shatters the middle class and all ‘fixed income groups;’ it wreaks havoc unbounded… To avoid such a calamity, then, credit expansion must stop sometime, and this will bring a depression into being.”

It may be a new year, but we are beset by the same problems that have been recurring since the crisis began. In most cases, those problems have worsened. One of the few improvements has been in the recapitalisation of Anglo-Saxon banks, but continental European banks seem acutely vulnerable to the potential outcome of a disorderly sovereign default.

Since the problems are the same, so are our preferred solutions: a specific focus on only the most creditworthy sovereign and quasi-sovereign debt (where it offers a positive real return); a specific focus on only the most defensive and internationally diversified equities; genuinely uncorrelated investments; and exposure to objectively the highest quality currencies, namely precious metals.

Euro zone politicians and policy makers have had plenty of time to come to terms with the continent’s problems, and continue to show no willingness to grasp admittedly difficult nettles.

It is symptomatic of the balkanised and adversarial nature of politics in the euro zone (a unified body that exists in theory but barely in fact) that Christian Noyer, chairman of the French central bank, anticipated France’s credit downgrade by suggesting that Britain should be downgraded first.

As the Hildebrand scandal also revealed, most of Europe’s central bankers are not fit to sweep the streets. And still time is running out. Readers of a certain age will recall a late 1980s “big hair” rock anthem called “The Final Countdown.” It was released by essentially a one-hit wonder band.

Its name was Europe.


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Wed, 01/18/2012 - 14:30 | 2075108 duo
duo's picture

nothing ten trillion Euros and an equal amount of FRNs can't fix, right?

Wed, 01/18/2012 - 14:36 | 2075132 Rahm
Rahm's picture

11:58 tick tick.....

Wed, 01/18/2012 - 14:41 | 2075158 Chief KnocAHoma
Chief KnocAHoma's picture

But the FED was created to prevent these types of events by invecting and withdrawling liquidity.

Controller on the movie Apollo 13 - "This cann't be right. I'm reading a triple failure."

Wed, 01/18/2012 - 15:02 | 2075285 Badabing
Badabing's picture

Eliminate jobs, creating high unemployment, so no one asks for a raise.

Short the shit out of everything so as to keep prices in check.

Coordinate all international fiat printing without a reference point.

Fudge all indexes like CPI, GDP, Money supply dept………

Take the blue pill.

Wed, 01/18/2012 - 15:57 | 2075502 ratso
ratso's picture

So who is without hubris - you Tim Price, Schumpeter and Rothbard.  Of course, of course you are without hubris you must be the insightful geniuses who reall y understand what is going on.

So now we have it from you - all intervention is fruitless and destructive - thank you for that.

In summary Tim Price is saying THE SKY IS FALLING IN ECONO JARGON!

Wed, 01/18/2012 - 16:30 | 2075623 NotApplicable
NotApplicable's picture

You'd look a lot less like an idiot without that gun in your mouth.

Wed, 01/18/2012 - 20:01 | 2076367 FEDbuster
FEDbuster's picture

"Although there were a few people that were warning us about this, most economists and investment advisers didn't see this coming." CNBC anchor sometime in 2012

Thu, 01/19/2012 - 07:54 | 2077343 Harlequin001
Harlequin001's picture

How many big words can you fit in one pile of bullshit?

Gave up after the intro paragraph...

Wed, 01/18/2012 - 16:34 | 2075638 economics1996
economics1996's picture

Rothbard should be mandatory reading in every economic class in America.  If you have not done so read Rothbard’s history of banking and depression books.

Wed, 01/18/2012 - 17:44 | 2075881 Belarusian Bull
Belarusian Bull's picture

I couldn't agree more. Rothbard is brilliant.


Wed, 01/18/2012 - 16:37 | 2075650 akak
akak's picture

Europe 1986:  Hair band

Europe 2012:  Hair ball

Wed, 01/18/2012 - 16:25 | 2075603 economics1996
economics1996's picture

Badabing gets it.

Wed, 01/18/2012 - 15:03 | 2075287 JPM Hater001
JPM Hater001's picture

No.  The ESF was designed to fix this.  The Fed only deals directly with US monetary policy.  The ESF is run by the Treasury Secretary.

Thank you ZH for making me smarter every day.

Wed, 01/18/2012 - 15:34 | 2075433 Oracle of Kypseli
Oracle of Kypseli's picture

I have just revised my thesis of 30% Physical PM's to 70% cash to 50/50.

Wed, 01/18/2012 - 17:05 | 2075738 mick_richfield
mick_richfield's picture

Excellent.  You're halfway there.

Wed, 01/18/2012 - 17:09 | 2075753 Doña K
Doña K's picture

Com'on, give us the other half.....

Thu, 01/19/2012 - 05:13 | 2077264 RobertMugabe
RobertMugabe's picture

What sane person goes long 100% PM's? Why go long 100 % anything? For a group of people who talk about how they are so much more intelligent than the uneducated masses, aka the "sheeple", there are a lot of people on here who believe they are certain about uncertain events. Hubris is being completely exposed to gold and other PM's without sufficient hedges.

Thu, 01/19/2012 - 07:23 | 2077332 chaartist
chaartist's picture

80/20 works for me )

Wed, 01/18/2012 - 17:58 | 2075911 _ConanTheLibert...
_ConanTheLibertarian_'s picture

When I woke up in 2009 I quickly put half my money in precious metals (66% silver). I've had my doubts but no longer. I'll backup the truck after the market has tanked. GOLD = MONEY

BDI still plunching: Baltic Dry Index (BDI)    -48   926


Wed, 01/18/2012 - 21:12 | 2076548 New World Chaos
New World Chaos's picture

Ditto in all respects.  Thanks, ZH!

Wed, 01/18/2012 - 22:17 | 2076716 WmMcK
WmMcK's picture

I only invest a percentage of my available assets in PM's also -- the % I want to keep.

Wed, 01/18/2012 - 14:51 | 2075227 Gully Foyle
Gully Foyle's picture

I just read where all the nations of the world owe something like 52 trillion dollars.

Who the fuck is this money "owed" to? Aliens?

I just can't comprehend the idea there is some extra-dimensional entity loaning funds to our world.


Wed, 01/18/2012 - 15:14 | 2075348 Teamtc321
Teamtc321's picture

The majority to central bank's. Able to print central bank's hit "Ctrl + P" then loan to gubermint's, charge interest and rolled interest, also debt is rolled into central bank backed "bank's", that come with a gun to your head when debt is not repaid. 

The come yelling, Pay us our printed ponzi money bitcheeez or we take your food and water, our  ink purchase account is running low don't you know!!


Wed, 01/18/2012 - 19:33 | 2076287 Joemusashi
Joemusashi's picture

.. Alt + F4 coming soon.

Wed, 01/18/2012 - 15:22 | 2075368 gmrpeabody
gmrpeabody's picture

"Who the fuck is this money "owed" to? Aliens?"

Mostly each other.

Wed, 01/18/2012 - 16:44 | 2075662 akak
akak's picture

One gigantic financial circle jerk.

Then why do I, and everyone I know, feel buttraped? (to use a Denningerism)

Wed, 01/18/2012 - 17:06 | 2075742 TheSilverJournal
TheSilverJournal's picture

A ponzi is a scam which pays early investors out of the investments of later investors. In a sense, the world’s monetary system is one giant fiat ponzi scheme with the only question being when will the ponzi end, not if it will end.

The problem is growth is no longer able to keep up with the malinvestments caused by cheap money (0% rates + QE). Either cheaper money is increasingly provided in order to cover up the malinvestment (more QE, or purchasing of MBS, or printing money to purchase anything), or the malinvestments become exposed.

Allowing the malinvestments to become exposed is politically unfeasible, so cheaper money will be provided in order to keep the malinvestments hidden. In a sense, the new investor is the newly created currency..once the new currency stops or even slows, the ponzi fails, but keep the new currency coming in faster and faster and hyperinflation is the end result.

Wed, 01/18/2012 - 17:08 | 2075750 Ms. Erable
Ms. Erable's picture

Because you, me, him, and the resta those guys over there are being forced to pay debts incurred by people spending like drunken congresscritters.

Thu, 01/19/2012 - 08:44 | 2077383 Gavrikon
Gavrikon's picture

Turn around.  Examine that thing sticking in your ass.  Is it a Central Banker's or Politician's dick?  Then you have your answer.

Wed, 01/18/2012 - 15:21 | 2075373 Vendetta
Vendetta's picture

Aliens/bankers ... what's the diff?

Wed, 01/18/2012 - 17:09 | 2075754 Ms. Erable
Ms. Erable's picture

There's always the possibility that aliens could be benign.

Wed, 01/18/2012 - 17:56 | 2075940 Belarusian Bull
Belarusian Bull's picture

Aliens are not necessary hostile.

Wed, 01/18/2012 - 21:29 | 2076576 New World Chaos
New World Chaos's picture

If you listen to David Icke, no difference!

Someday, the NGO will show up saying we can't fix things ourselves and we need their benevolent guidance (plus some technological liquor for the natives).  They would end up owning the whole planet.  There will be others who offer wisdom but nothing else, and if we listen to them, we will be free.  Will we be wise enough to choose the right friends?  Hahahaha

Better hope the hippies show up first.

Wed, 01/18/2012 - 15:22 | 2075379 trebuchet
trebuchet's picture

owed to the banking system: they lend the money to govs and peeps who deposited the money so the banks lent sme more, and so they govs deposited that and borrowed some more and deposited that and the banks lent the new deposits..... 


LTRO just the latest twist on that one. 10 trillion? no problem... its breeding in the alien bank entity belly right now - 

the LTRO depositors arent the ones that borrowed it. 

which means 500bn got lent to banks who lent it to other banks who deposited it with ECB and used that collateral borrow more money to lend to other banks who gonna post that as collateral to borrow more money from the ECB in the next LTRO

The Euro is saved



Wed, 01/18/2012 - 15:27 | 2075401 Gully Foyle
Gully Foyle's picture


"owed to the banking system"

When did the banking system declare themselves a new country?


Wed, 01/18/2012 - 15:30 | 2075414 trebuchet
trebuchet's picture

they didnt the operate under licence from the govs that host them :)

but they do print money, 10 times more than the central banks, its called credit. 

Wed, 01/18/2012 - 15:55 | 2075507 Gully Foyle
Gully Foyle's picture


"but they do print money, 10 times more than the central banks, its called credit. "

So they are magicians creating nothing from nothing?

Wed, 01/18/2012 - 16:10 | 2075555 trebuchet
trebuchet's picture


its called the modern (fractional reserve) banking system

you take 10 cash put it into a bank the bank keeps 1 back in case you need some short term cash, lends 9 to somoene else, who deposits it in their bank account and that bank lends 8 to some else, etc .etc ..... 

look at banks loan/capital reserve ratios. 

and central govs print money coz they dont have to back it up with anything like a physical asset such as gold (which they used to do).  and then they release that money into the system by buying gov bonds. or simply change the rules on how much money banks can create by changing their "reserve requirements" that 1 they have to keep back out of every 10. 

lots of people here calling it a ponzi scheme..... 

but thats the system underpinning you giving up your hours of labour and turning those hours into the food and fuel and housing to feed your kids/partner/xbox




Wed, 01/18/2012 - 16:55 | 2075716 sherman roger
sherman roger's picture

The best book for explaining this with specificity, as well as other issues is "Money the greates hoax on earth" Merrill jenkins the man who wrote this was a genius and always strived for absolute accuracy. You can see his writings all over the web by yahooing his name. Highly recommended 5 stars

Wed, 01/18/2012 - 17:34 | 2075817 Kayman
Kayman's picture

"So they are magicians creating nothing from nothing?"

Uhh... yes.  Fractional Reserve banking is indeed magic. They put in nothing (a line item conjured up on a balance sheet by a central bank or one of its members), and you pay them something called interest.

Both sides of the Fed's balance sheet are liabilities, promises to pay.  Although they call one side "assets".

I can recommend a course in Money and Banking if you would like.

P.S. It requires a "license" to join the Fractional Reserve club, but the club is full for the moment.

Wed, 01/18/2012 - 16:20 | 2075592 Ghordius
Ghordius's picture

+10'000 billions "When did the banking system declare themselves a new country?"

They are multinational corporation (in the case of banks with regional cartels which have the sovereign power of issuing currency).

Every one of them is a country.

And advise governments with their lobbyists, provides them with consultants, aids them with mercenary troops, swaps leaders with them.

Now, if they were national, then they would have some shared interests with you, but their internationality, well, makes them not-really-of-your-country.

Wed, 01/18/2012 - 16:32 | 2075628 GeneMarchbanks
GeneMarchbanks's picture

The proper prefix you're looking for is trans, as in transnational. A corporation is 'beyond' borders while their objective is quite universal: profit. The entire idea is a perfectly coordinated way to evade responsibility, like something out of the Kantian theory of radical evil.

Wed, 01/18/2012 - 17:49 | 2075904 EnglishMajor
EnglishMajor's picture

Yes, and the military-industrial complex is merely one of the bank's most profitable subsidiaries, and as it happens, the most useful since it can be used to enforce the reserve status of a currency with very large, GDP-boosting bombs.

Wed, 01/18/2012 - 17:42 | 2075874 Milestones
Milestones's picture

About 4000 years ago when a tribe in a desert started, in  unision, a con called lending and interst.

The first axiom of business: Nothing happens until someone sells something.

Our desert folks were the first to figure that out.           Milestones

Wed, 01/18/2012 - 15:39 | 2075457 Motley Fool
Motley Fool's picture

Think unfunded liabilities. Promises for social security etc.

Wed, 01/18/2012 - 15:55 | 2075506 malek
malek's picture

Who the fuck is this money "owed" to? Aliens?

In some way and form always to the taxpayers (i.e. citizens) or beneficiaries (retirees etc.) of other countries

Wed, 01/18/2012 - 16:09 | 2075553 Abitdodgie
Abitdodgie's picture

Rothchild his personal worth is around 500 trillion

Wed, 01/18/2012 - 16:46 | 2075678 Chief KnocAHoma
Chief KnocAHoma's picture

I'm just not sure I believe that. I still have two gold pieces that he doesn't own...yet.

Wed, 01/18/2012 - 17:44 | 2075825 Oracle of Kypseli
Oracle of Kypseli's picture

500 trillion what?

The whole island of Manhattan including the structures is worth 1 trillion USD. Does he then own 500 cities of similar value?

All the silver and all the gold in the world is less than 9 trillion. Maybe he owns derivatives. Let me see him collect. 

Wed, 01/18/2012 - 17:49 | 2075903 Oracle of Kypseli
Oracle of Kypseli's picture

That reminds me that O'Bummer, spends 1.5 times a Manhattan island's worth per year attempting to lower the unemploynment. 

Wed, 01/18/2012 - 18:16 | 2075980 spdrdr
spdrdr's picture

I have 500 Trillion Zimbabwe dollars in front of me right now.  Am I wealthy or what!


Wed, 01/18/2012 - 20:21 | 2076420 FEDbuster
FEDbuster's picture

Congrats!  You are a Zimbabwe multi-trillionaire, so am I.  Soon we will all have Zimbabwe like net worth's, but it still won't buy you a cup of coffee no matter what name they put on the paper (Euros, Dollars, etc...).  They are just zeros on pieces of paper.

Thu, 01/19/2012 - 16:35 | 2079134 malek
malek's picture

You're right, I am also effectively a quadrillionaire!

Wed, 01/18/2012 - 16:17 | 2075574 KickIce
KickIce's picture

Who the fuck is this money "owed" to? Aliens?

That's the worst spelling of Rothschild I've ever seen.  :)

Wed, 01/18/2012 - 16:56 | 2075719 one man wolf pack
one man wolf pack's picture

The Shadow banking system.  People think Bill Gates or that Mexican Slim whatever are the richest men in the world.  They aren't

Wed, 01/18/2012 - 20:11 | 2076396 Dave Thomas
Dave Thomas's picture

They keep reiterating the fact that every human / family owes X amount of dollars to pay off the national debt.

Americans, families, countrymen didn't create this debt. It's not mine, or my familys nor my neighbors. This is all a ruse to keep you pliant like you have skin in the game.

I turn my back on these "debts", I never had a hand in creating them. I will ignore such hogwash and handwringing, and in the meantime keep stacking.

It's not yours! Carry on!

Wed, 01/18/2012 - 14:57 | 2075260 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Ca-a-rRi-IEEE, CarahRIEEEE Things they change my-y--yFr-rie-end..Wh-o-oa C--


Damnit. Wrong Song.


I love the irony of the band's name, Europe, don't you?

Wed, 01/18/2012 - 20:06 | 2076381 margaris
margaris's picture

Yes, I also checked the lyrics looking for hidden messages, but there aren't any...

ok something about

"we are heading for venus..

and still we stand tall...

maybe they've seen us

and welcome us all"...


There is another scary reference  in the movie 2010, the sequel to 2001  a space odyssey.

At the end of the movie the aliens convert jupiter into a new star, so all of jupiters moons become habitable worlds. Its a present for us humans, and a WARNING:

All these worlds are yours, except Europa. Attempt no landing there

Wed, 01/18/2012 - 15:00 | 2075274 VanillAnalyst
VanillAnalyst's picture

These aren't the droids you're looking for.

Move along.........



Wed, 01/18/2012 - 15:07 | 2075307 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Its a TRAP!! Sorry the refernce got the better of me.

Wed, 01/18/2012 - 15:00 | 2075279 BLOTTO
BLOTTO's picture

Pssssttttt... The plan is - their is no plan.

Thats the plan.

Wed, 01/18/2012 - 17:15 | 2075776 Ruffcut
Ruffcut's picture

Who gives a shit. "final Countdown". Ever day closer to the end day is in countdown mode. If evil is winning so bad, well, it becomes everybody's fault and we will get our ass whipped, and good. Just do what needs to be done.

TPTB fail at leadership for the benefit of society. This shit, alerts the brain on to more ideas for "making the best of it" and/or fear.

There some natural occurances, like an aging demo, the premise ofr (artificial) growth, to name a dozen. Plus, it doesn't help that banks have been in such a rape and pilliage moment.

I've done the final countdown, but lost count. Fuck it.

Wed, 01/18/2012 - 17:19 | 2075787 Banksters
Banksters's picture

That 'music' makes me want to stab both ears with paring knifes.  Damn, I feel dirty.

Wed, 01/18/2012 - 14:30 | 2075111 redpill
redpill's picture

Read this one this AM in my e-mail, excellent summary.  Rothbard's clearly stated points are so obviously correct it's a wonder anyone actually pays attention to Paul Krugman.

Wed, 01/18/2012 - 14:33 | 2075124 kralizec
kralizec's picture

Paul who?


Wed, 01/18/2012 - 14:37 | 2075139 redpill
redpill's picture

He's this leftist Keynesian version of Rush Limbaugh with a phony Nobel prize who wants Uranus to invade ouranus.


Wed, 01/18/2012 - 15:16 | 2075357 kralizec
kralizec's picture

I don't want anybody in myanus!

Wed, 01/18/2012 - 15:26 | 2075392 gmrpeabody
gmrpeabody's picture

I believe he was thinking  an invasion of hisanus.

Wed, 01/18/2012 - 17:55 | 2075935 Things that go bump
Things that go bump's picture

My doctor advises against that.

Wed, 01/18/2012 - 16:35 | 2075643 NotApplicable
NotApplicable's picture

Sadly, Boobus Americanus (and similar species) will reply, "Murray who?"

The three people that don't? "Oh, it's that crazy anarchist guy!"

I wonder what the cops would think if I showed up at a voting site wearing my Rothbard "Enemy of the State" T-shirt?

Wed, 01/18/2012 - 22:58 | 2076806 UP Forester
UP Forester's picture

They'd say "Hey!  That doesn't look like Will Smith!"

Wed, 01/18/2012 - 17:34 | 2075153 Shocker
Shocker's picture

Its definitely a good summary. We been talking about Europe and others defaults for months now. What is always true is, it can be delayed and postpone, but without any real changes it will always end up the same way...

Just waiting to see, when the euro goes away or a default what that's going to mean to the world markets and what are the after affects.

We are in some interesting times.


Wed, 01/18/2012 - 14:32 | 2075117 Big Swinging Richard
Big Swinging Richard's picture

I'll take 80s big hair glam rock over the crap they play on the radio now. 

Wed, 01/18/2012 - 14:55 | 2075248 Gully Foyle
Gully Foyle's picture

Big Swinging Richard

"I'll take 80s big hair glam rock over the crap they play on the radio now. "

JESUS FUCK DUDE! Listen I'll try to talk you down. First call in the old lady and have her hide your weapons. If you have any meds, except Meth I't will only make you crazier, take them,take them all, borrow some dope from the neighbor kid or drive to a Black neighborhood and find a liquor store.

Once you feel it all kicking in go to Pirate Bay and search for GRATEFUL DEAD.....

Wed, 01/18/2012 - 15:23 | 2075383 Calmyourself
Calmyourself's picture

BSR, take his advice you will need every bit of that booze, dope probably including thorazine to actually enjoy the Grateful Dead...

Wed, 01/18/2012 - 15:33 | 2075429 Big Swinging Richard
Big Swinging Richard's picture

Let me list the names of the hot acts today: Lady Gaga (Madonna wannabe), Katy Perry (nice assets, but no talent), and anything rap related.  At least the bands then knew they had no talent and used drugs and hairspray to cover it up.  I'm not suggesting the talent was better, just less pretentious.  Give me Motley Crue and a bottle of Jim Beam!

Wed, 01/18/2012 - 15:47 | 2075482 Dick Gazinia
Dick Gazinia's picture

I really wanna stick my thumb in Katy Perry's butt.

But thats just me.

Wed, 01/18/2012 - 17:48 | 2075900 orangedrinkandchips
orangedrinkandchips's picture

Not so much Katy...but HER ANTI-CHRIST FATHER....he hates em all....spics, mics, spooks, gooks, jews...atleast he is consistent! (and as Mel Brooks's not funny until EVERYONE is offended...)



Wed, 01/18/2012 - 16:07 | 2075544 czarangelus
czarangelus's picture

Dead Prez, Immortal Technique, Tool / A Perfect Circle / Puscifer

Lots of good music is still being produced.

Wed, 01/18/2012 - 16:42 | 2075630 Ahmeexnal
Ahmeexnal's picture

Lots of good music is still being produced.

You are not even qualified to know what music is. Justin Bieber fanboys like you should be treated to a  woolding til yer eyes pop outta yer head and yer skulls crack open.

Wed, 01/18/2012 - 18:34 | 2076072 Calmyourself
Calmyourself's picture

TOOL  +1,000  See you all in Arizona bay..

Wed, 01/18/2012 - 17:50 | 2075906 orangedrinkandchips
orangedrinkandchips's picture

Lady Gag is really Todd Lundgren from the 70s.....check it out...seriously...talented but fugly.

Wed, 01/18/2012 - 18:23 | 2076022 akak
akak's picture

What a coincidence --- I can remember a singer-songwriter named Todd Rundgren from back in the 70s and 80s.

You aren't Chinese, by chance, are you?

Wed, 01/18/2012 - 23:00 | 2076810 UP Forester
UP Forester's picture


Thu, 01/19/2012 - 08:50 | 2077390 Gavrikon
Gavrikon's picture

Herro it's me!

Wed, 01/18/2012 - 17:51 | 2075909 orangedrinkandchips
orangedrinkandchips's picture

"dont go away mad....JUST GO AWAY!"

Wed, 01/18/2012 - 17:45 | 2075888 orangedrinkandchips
orangedrinkandchips's picture

Honestly, who doest get a chill listening to this great have to admit...even after a few

Secondly, as if this shit on the radio wasnt bad enough....THE NAMES OF THESE "ARTISTS" are hilarious....


lil$$shaw etc....floor ida, cali...fornia, pit bull, german name it...



Wed, 01/18/2012 - 14:33 | 2075123 A Lunatic
A Lunatic's picture

When we get to the final final countdown let me know.

Wed, 01/18/2012 - 14:41 | 2075156 francis_sawyer
francis_sawyer's picture

When we morph from Europe (Final Countdown) to Cars (Let's Go)... Ring me...

my number is 867-5309

Wed, 01/18/2012 - 14:43 | 2075183 krispkritter
krispkritter's picture

Jenny? Is that you?

Wed, 01/18/2012 - 14:56 | 2075255 Manthong
Manthong's picture

There will have to be a meeting, then a press conference to announce the next meeting to determine which ten single digit numbers they will use for the last 10 ticks of the countdown.   

Wed, 01/18/2012 - 16:21 | 2075589 KickIce
KickIce's picture

No press conferences, just bank holidays.

Wed, 01/18/2012 - 16:57 | 2075723 zerozulu
zerozulu's picture

I checked this number. It belongs to some debt collection agency.

Wed, 01/18/2012 - 14:35 | 2075127 roccman
roccman's picture

Title Change:


The Great Kill Off

Wed, 01/18/2012 - 14:39 | 2075141 Cognitive Dissonance
Cognitive Dissonance's picture

Both evolution and devolution occurs in leaps and bounds and not as a smooth linear movement. For humans, that means one step forward, then two giants leaps back.

Time to leap back to the future.

Wed, 01/18/2012 - 14:50 | 2075219 DaveyJones
DaveyJones's picture

it's like a fault line with a lot more fault

Wed, 01/18/2012 - 15:04 | 2075291 Silver Dreamer
Silver Dreamer's picture

Speaking of fault lines, Mineral, VA has had a couple small quakes again today.  I'm of course wondering how long it will be before we get another 5.8 one...  It wouldn't have to be much worse to do some serious damage after all.  The last thing I thought I had to worry about in Virginia was earthquakes too!

Wed, 01/18/2012 - 16:38 | 2075648 NotApplicable
NotApplicable's picture

Frak you too?

Wed, 01/18/2012 - 16:57 | 2075727 Silver Dreamer
Silver Dreamer's picture

haha  I do not believe that's a source of the quakes.  We have no frakking in the region from what I understand.  Lake Anna's nuclear reactor was shut down for a couple months because of the last one.  It was of course not designed for even a 5 let alone higher quake.

Wed, 01/18/2012 - 17:11 | 2075764 Calmyourself
Calmyourself's picture

Fracking 99% occurs between 5-10k feet, that is damn shallow for an earthquake..

Wed, 01/18/2012 - 17:12 | 2075765 mick_richfield
mick_richfield's picture

"Fault line" sounds so derogatory.

In this enlightened age, shouldn't we have No Fault Plate Tectonics?

Wed, 01/18/2012 - 15:08 | 2075314 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Hey CD.


It occurred to me we're some of the "oldest" here.



Wed, 01/18/2012 - 16:16 | 2075573 Cognitive Dissonance
Cognitive Dissonance's picture

We are Zero Hedge old pharts. :)

Wed, 01/18/2012 - 17:51 | 2075915 tired1
tired1's picture

You have me beat by one week.

Wed, 01/18/2012 - 18:34 | 2076069 Shell Game
Shell Game's picture

What a nice little reunion, I brought the tater salad.

Wed, 01/18/2012 - 14:40 | 2075155 Gringo Viejo
Gringo Viejo's picture

Alea iacta est.

Wed, 01/18/2012 - 15:11 | 2075332 kralizec
kralizec's picture

"A soothsayer bids you beware the ides of March." - Brutus, Julius Caesar Act 1 scene 2

Wed, 01/18/2012 - 16:00 | 2075525 Dick Gazinia
Dick Gazinia's picture

If we are starting a pool on what date the Greek Default happens, I got dibs in "The Ides of March" or March 15 to you heathans.

Wed, 01/18/2012 - 17:15 | 2075777 mick_richfield
mick_richfield's picture

Sentio aliquos togatos contra me conspirare.

Wed, 01/18/2012 - 15:07 | 2075164 Eally Ucked
Eally Ucked's picture

Somebody finally has to realise that investors are really us with our pension plans, 401K, and mutual funds. Governments know that, they trying to find a way of minimal damage, and they're always wrong. Who are those mithical investors who should get haircut on investments? Banks and mostly you my friend.


Wed, 01/18/2012 - 14:42 | 2075166 Timmay
Timmay's picture

No worries as long as Carbon Credits are priced in US dollars.

Wed, 01/18/2012 - 14:42 | 2075170 Meremortal
Meremortal's picture

I'm prepared for everything. But the wait is going to be much longer than people realize, much longer.

Wed, 01/18/2012 - 15:06 | 2075303 Hansel
Hansel's picture

Some people have been waiting much longer than you realize.

Wed, 01/18/2012 - 16:39 | 2075659 NotApplicable
NotApplicable's picture

Hence Knustler's "Long Emergency."

Wed, 01/18/2012 - 14:42 | 2075171 Whalley World
Whalley World's picture

This reminds me of Prof. Fekete's article which discusses natural and economic resonance akin to the Tacoma bridge which blew apart in a windstorm, great article pointing in the same direction.

Wed, 01/18/2012 - 15:10 | 2075330 Buckaroo Banzai
Buckaroo Banzai's picture

Everybody who visits Zerohedge should become familiar with Antal Fekete's body of work. His examination and analysis of Real Bills Doctrine is truly vital to developing an understanding of how the global economy has gone off the rails since 1914.

Wed, 01/18/2012 - 15:29 | 2075411 gmrpeabody
gmrpeabody's picture

Does he pay you?

Wed, 01/18/2012 - 15:35 | 2075441 Buckaroo Banzai
Buckaroo Banzai's picture

LOL, he can't afford me.

Wed, 01/18/2012 - 15:37 | 2075447 Buckaroo Banzai
Buckaroo Banzai's picture

Start here if you are interested:

Wed, 01/18/2012 - 14:44 | 2075182 williambanzai7
williambanzai7's picture

Read this article on "hybrid decoupling" and then consider that this is now playing out for the first time in the sovereign debt arena. Basically, negotiating the debt holders holding swaps can be counterintuitive simply because the bondholders with protection would like to collect on the swaps.

So we are entering a whole new ballgame.

Wed, 01/18/2012 - 14:53 | 2075240 Tyler Durden
Tyler Durden's picture

From: The Rise Of Activist Sovereign Hedge Funds, The "Subordination" Spectre, And The Real "Coercive" Restructuring Threat

As a reminder, it was again back in June we predicted that "the key phrase (or two) in the proposed package: "Voluntary" and "Collective Action Clauses"." Why? Because what this does is unleash the prospect of yet another word, which is about to become one of the most overused in the dilettante financial journalist's lingo: "subordination" or the tranching of an existing equal class of bonds (pari passu) into two distinct subsets, trading at different prices, and possessing different investor protections (we use the term very loosely) with the result being an even greater demand destruction for sovereign paper.

Incidentally this is precisely the reason why we predicted the second Greek bailout would be dead back in June of last year (proven right) as it underscores a very specific dynamic in bond trading, and thus demand, which apparently nobody in Europe grasped at the time, except for the hedge funds who now control the entire process and can demand anything to keep the Eurozone from falling apart. Unfortunately, it is now likely too late - with everyone finally figuring out what subordination means, and the S&P making it the highlight of their downgrade FAQ, the fear of future subordination alone is why demand for peripherals will likely plunge even more, paradoxically allowing activist funds to build up even bigger blocking stakes at cheaper price, throwing Europe into a toxic loop where courtesy of its stupidity it will now have to pay fund managers, the same ones it vilified, billions and billions, so they don't pull the plug on Europe.

Wed, 01/18/2012 - 14:59 | 2075272 Cognitive Dissonance
Cognitive Dissonance's picture

".....paradoxically allowing activist funds to build up even bigger blocking stakes at cheaper price, throwing Europe into a toxic loop where courtesy of its stupidity it will now have to pay fund managers, the same ones it vilified, billions and billions, so they don't pull the plug on Europe."

This time you mean. I suspect this merry-go-round has many miles to go before it sleeps with the fishes.

Wed, 01/18/2012 - 16:14 | 2075567 pakled
pakled's picture

With full respect CD...

In the past few weeks/months I have heard/read more and more along the lines of "this time" in the context of folks getting used to the idea that no matter the crisis, the system will limp by, and not fully blow up quite yet. That is certainly my conditioning.

I take that trend as a huge warning sign.... if you get my [contrarion] drift.

Wed, 01/18/2012 - 16:18 | 2075580 Cognitive Dissonance
Cognitive Dissonance's picture

I said it had miles to go before it sleeps. I didn't say what condition it would be in while it spins itself towards destruction.

Wed, 01/18/2012 - 16:42 | 2075671 NotApplicable
NotApplicable's picture

It's also a totally relative perspective, based upon one's proximity to the margin.

Each day presents us all with the same question: Survivor, or victim?

Wed, 01/18/2012 - 19:57 | 2076356 pakled
pakled's picture

Indeed you did. And to be clear, not disagreeing with your post. It just got me to thinking about a mindset that may well be in place before the whole system sinks in the quicksand. Around the time that a majority conclude its a long ways off.... it may not be.

Thu, 01/19/2012 - 01:48 | 2077131 StychoKiller
StychoKiller's picture

Spinning objects exhibit a phenomena known as rotational inertia (i.e., the Gyroscope effect).  Bad things happen when navigational gyroscopes become gimbal-locked.

Wed, 01/18/2012 - 15:06 | 2075300 DosZap
DosZap's picture


it will now have to pay fund managers, the same ones it vilified, billions and billions, so they don't pull the plug on Europe.

Have a far easier way to solve this form of Blackmail.

Take the plug away, and hang all the bstds.

Since there is NO Rule Of Law any longer, we should also just take care of the problems with due diligence post haste.

Wed, 01/18/2012 - 15:14 | 2075342 LawsofPhysics
LawsofPhysics's picture

Wait for it, it is coming, the real battles will now be focused on trade, specifically trading those essential commodities.  The trade wars have only just begun, could be lots of time here, but one should always recognize how quickly things get ugly when essential goods and services can not be delivered.

Wed, 01/18/2012 - 15:25 | 2075397 Vendetta
Vendetta's picture

Trade -   baltic dry index -  See something disturbing?

Wed, 01/18/2012 - 16:43 | 2075670 LawsofPhysics
LawsofPhysics's picture

Yeah, and also noticed that speaking the truth gets you junked on ZH too.

Wed, 01/18/2012 - 21:41 | 2076622 ucsbcanuck
ucsbcanuck's picture

Thanks for all the chart porn - especially interesting was the decoupling of the BDI from Cu and S&P500. Will this recoupling occur soon?

Thu, 01/19/2012 - 01:56 | 2077142 StychoKiller
StychoKiller's picture

No worries, the leader of the Trade Federation, Viceroy Gunray will soon have this straightened out...

Wed, 01/18/2012 - 15:10 | 2075326 GeneMarchbanks
GeneMarchbanks's picture

If, by some off chance, it plays out exactly this way and at some point the €-crats come to realize they are no longer in 'control',  the unintended consequences will be such that Germany might consider it the end of the (monetary) experiment.

Wed, 01/18/2012 - 15:42 | 2075463 trebuchet
trebuchet's picture

nothing wrong with subordination.

except when its upside down.  like client dpeosits in MF global "subordinated" to JPMorgan payouts from MF global. 


When things like that happen, subordination is fraud. 

and this time the fruadsters getting taken are the banks coz the ECB isnot going to be subordinated.

so they are gonna throw their toys out of the pram and jack up every sov;s interest rate. 




Wed, 01/18/2012 - 16:43 | 2075675 NotApplicable
NotApplicable's picture

That's bizarre. You speak as if words had meaning.

Wed, 01/18/2012 - 17:21 | 2075794 orangedrinkandchips
orangedrinkandchips's picture lost with this legal bullshit but how I understand it and help me here T-bone is that Grease (is the word....) is going to alter the conract which will NOT trigger the CDSs as they should since it is a default anyway you look at they ask the infamous question..."what is the definition of "is"?? lol and work out a deal so CDS holders get fucked...

Secondly, the subordination part and tranching....Im thinking it's taking a high trance (lower yeild, less risk compared to lower tranches) or any tranche of the endless Grease bonds and tranching them more!!!!!!!! Breaking down a tranche into more tranches....oooh-kay!

Ok...if that is correct (and please help my understanding if you will) do they choose who gets what part of the new tranches? Shambo for it ?? I am thinking it's whoever has the decency to give them a reach-around....

im at a loss (and other bag holders are with me...) at understanding why, how etc....



Wed, 01/18/2012 - 15:34 | 2075438 pain_and_soros
pain_and_soros's picture

"the bondholders with protection would like to collect on the swaps."

I'll drink to that...pass me some of that Credit Default Schnapps!!

Wed, 01/18/2012 - 14:46 | 2075195 tamboo
Wed, 01/18/2012 - 14:46 | 2075199 Sandmann
Sandmann's picture

In 1998 we had a dry-run for this mess when Long-Term Capital Management thought it had mastered the Beta but ignored the Alpha. Nothing was learned from this debacle, just as nothing was learned from the mastermind of Securitisation "Monkey Brains" Patterson at Penn Square Bank in Oklahoma. This genius brought the great Continental Illinois to its knees and required Volcker to save the US banking system. The fact that this was 1982 and LTCM 1998 and Great Depression Mk III was 2007 suggests a Death Wish on the part of Anglo-American Finance

Wed, 01/18/2012 - 16:04 | 2075535 Buckaroo Banzai
Buckaroo Banzai's picture

Au Contraire, much was learned from this debacle. It was learned that Hedge Fund managers could become billionaires on their way to losing their clients' entire investment.

When losing gigantic amounts of money becomes insanely profitable, you can bet it will happen over and over again!

Thu, 01/19/2012 - 01:59 | 2077147 StychoKiller
StychoKiller's picture

Which is precisely WHY immoral playas should NOT be allowed to profit from "Moral Hazards!"

Wed, 01/18/2012 - 14:46 | 2075200 GeneMarchbanks
GeneMarchbanks's picture

This article was all over the shop. Taleb, hyper-inflation, Eurozone all sprinkled with commentary from the 'Austrians'. One wonders if these dudes now just simply write to one-up each other in some weird literary fetish among financiers or out of plain old despair?

Wed, 01/18/2012 - 14:47 | 2075203 SAT 800
SAT 800's picture

Just noticed on a Market Watch Article; "India raises import duties on Gold and Silver to cool demand"---(apprx. quote). This I consider very significant; as it indicates the declaration of the beginnings of capital control; part of the end game strategy for failing economies.

Wed, 01/18/2012 - 14:58 | 2075263 DosZap
DosZap's picture

SAT 800

Just noticed on a Market Watch Article; "India raises import duties on Gold and Silver to cool demand"---(apprx. quote).

 Read the same article, and yes they did, but it has not even affected the continued purchases, not even a minor slowdown.

Wed, 01/18/2012 - 14:47 | 2075209 847328_3527
847328_3527's picture




“It is therefore natural that in a thoughtful age, when men are busy investigating  present problems and curious in studying the past, convinced that no effect is without cause, the story of Rome should engage attention.”


WE Heitland, The Roman Fate, 1922

Wed, 01/18/2012 - 15:10 | 2075317 Kayman
Kayman's picture

Rome didn't have the ability to conjure up money at the click of a mouse.

A 3% Fed rate would quickly sort the wheat from the chaff.  If banks and hedge funds had to pay for people's savings, a real economy might have a chance.

Meanwhile these guys aren't genius', they are simply part of the con.

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