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It's Gangrene, Not Contagion

Tyler Durden's picture




 

From Peter Tchir of TF Market Advisors

It's possible that the problems in sovereign debt in Europe continue to get worse rather than better, because we are treating the wrong "disease".  Everyone has been talking about the risk of "contagion".  That makes me think of scientists working in pristine high tech labs searching for a cure, of technicians working on computer models, estimating spread patterns, and citizens walking around with face masks to stop the spread of the "disease". 

What we have is gangrene.  Doctors with leather aprons covered in blood and saws are the images that come to mind.  Whether it was a genteel Confederate soldier or a grizzled Roman legionnaire, there was only one treatment.  It was disfiguring and ugly, but effective.  We have waited so long that the choice is no longer above or below the elbow.  We have let it spread too long, things like EFSF have done nothing but let the disease spread.  It is now time to amputate (let defaults occur) and begin the real process of recovery.  It won't be easy, but it is better than continuing to ignore the real problem and avoiding taking the hard, painful, but necessary steps.

 

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Thu, 09/22/2011 - 07:15 | 1696129 Derpin USA
Derpin USA's picture

I for one welcome our hacksaw-wielding overlords.

Thu, 09/22/2011 - 07:20 | 1696140 kahunabear
kahunabear's picture

I for one am just glad the long bond is such a safe haven. Ha!

Thu, 09/22/2011 - 07:52 | 1696231 falak pema
falak pema's picture

Long bond Silver!...nice to catch up with you.

Thu, 09/22/2011 - 09:12 | 1696524 He_Who Carried ...
He_Who Carried The Sun's picture

Its spelled  Long John Silver!

Thu, 09/22/2011 - 07:59 | 1696259 HCSKnight
HCSKnight's picture

That's the rub now isn't it, who are those overlords?

Flat curve = zip carry trade $
Twist = $0 front running Fed's QE
Right minded politicians = pitch forked bankers

If one can't believe the US gov. Info, what fool would believe the China's #s?

WallStreet/banksters have a huge interest to go along with China's mobster lies (gov #s), are you really foolish enough to believe both?

And beloved old Europe, Socialism destroyed their spirit and gave birth to PIGletS, now the little pinko's, seeing the overlords with axe in hand, squeal in the streets.

Greece = Bear Sterns (sacrificed willingly in hopes of finding mercy)

Italy = Lehman, the overlords mercy made manifest destiny

Say goodbye to the sun girls, the only easy day was yesterday.

Thu, 09/22/2011 - 07:15 | 1696130 pendragon
pendragon's picture

a great analogy

Thu, 09/22/2011 - 07:31 | 1696167 Spirit Of Truth
Spirit Of Truth's picture

Actually....I think sepsis (systemic infection) might have been more analagous to the condition of the world's financial system.

Sepsis (/?s?ps?s/, from Gr. ?????: the state of putrefaction or decay) is a potentially deadly medical condition that is characterized by a whole-body inflammatory state (called a systemic inflammatory response syndrome or SIRS) and the presence of a known or suspectedinfection.[1][2] The body may develop this inflammatory response by the immune system to microbes in the bloodurinelungsskin, or other tissues. A lay term for sepsis is blood poisoning, also used to describe septicaemia. Severe sepsis is the systemic inflammatory response, plus infection, plus the presence of organ dysfunction.

JMHO.

Thu, 09/22/2011 - 07:17 | 1696132 GeneMarchbanks
GeneMarchbanks's picture

So civil unrest and the oligarchs all just move to Monaco with no questions asked?

Yeah, then we'll be 'healthy'

Thu, 09/22/2011 - 07:18 | 1696136 ambrosiac
ambrosiac's picture

 

 

Don't tell Gwyneth Paltrow.

Thu, 09/22/2011 - 07:18 | 1696137 bania
bania's picture

financial debridement, baby!

Thu, 09/22/2011 - 07:19 | 1696139 kito
kito's picture

I think we need to start a physical pm support group here. Im living in bizarro world where the dollar is valuable and pms are getting melted down.

Thu, 09/22/2011 - 07:22 | 1696145 Mitzibitzi
Mitzibitzi's picture

Not for too much longer, I suspect.

Thu, 09/22/2011 - 07:25 | 1696156 GeneMarchbanks
GeneMarchbanks's picture

Once again, I cannot stress this enough: BTFD!

Did you notice how the Fed came out and said the 'conditions are worsening' this morning? More pain coming, first PMs then USD

Thu, 09/22/2011 - 11:07 | 1697019 donsluck
donsluck's picture

I must concur, "buy" alarms are ringing, selloff is a panic.

Thu, 09/22/2011 - 07:53 | 1696234 Which is worse ...
Which is worse - bankers or terrorists's picture

Gosh...that could only occur where DEFAULT is imminent, isn't it? And hedge funds are melting away, creating a need to liquidate their PM holdings, correct?

Can't figure out why Southern Europe suddenly comes to mind.

Thu, 09/22/2011 - 08:45 | 1696401 tmosley
tmosley's picture

I have spoken at length about how this would happen, and it looks like we are approaching that point.  Volatility that approaches infinite with a strong downward bias as physical metal decouples from paper.  

I hold every expectation that paper silver (probably not paper gold) will hit zero before this is all over.  At that point, physical silver will have and will continue to explode in value in both nominal and real terms.  I am buying from here on.  No more selling for anything short of emergency.  The endgame is closer than ever.

Thu, 09/22/2011 - 12:01 | 1697002 Pegasus Muse
Pegasus Muse's picture

I suspect there's more than a few Indians and Chinese scurrying down to their local Gold Dealers thinking, "Thank you Bernank.  Not sure why the sell off is happening but I'm backing up the truck!" 

Funny how their efforts to manipulate price always comes back and bites the manipulators in the ass.

 

Thu, 09/22/2011 - 07:21 | 1696141 Squid-puppets a...
Squid-puppets a-go-go's picture

Here's another analogy:

Today's 'operation twist' caused the market to drop because it was like Bernanke, having expended his M16 'QE' ammunition, having dropped the machine gun and pulled out his last resort pistol against the oncoming army of zombie banks

'you always were an asshole, gorman'

 

Thu, 09/22/2011 - 07:23 | 1696142 lolmao500
lolmao500's picture

And Bernanke's plan will kill the banks. All of them. Which then will need more bailouts... which will create bigger deficits... but no worry, the interest on the debt is small!

America will be able to go to 200-300% of GDP in debts, no problems.

Thu, 09/22/2011 - 07:51 | 1696227 kahunabear
kahunabear's picture

If treasury rates ever rise significantly again I forsee spontaneous vaporization of the nation.

Thu, 09/22/2011 - 07:22 | 1696143 sangell
sangell's picture

But defaults cure nothing. We need to amputate entitlements and the armies of public sector parasites otherwise the debt mountains will rise again.

Thu, 09/22/2011 - 07:48 | 1696222 WonderDawg
WonderDawg's picture

Oh, that shit's coming. The next three years are going to change a lot of things about entitlements. Be patient.

Thu, 09/22/2011 - 11:11 | 1697045 donsluck
donsluck's picture

The reason they are called entitlements is because they are already payed for. Cutting SS for instance steals the money I payed in for 30+ years. At this stage, attacking the solvent retirement program is like the well funded pension raids of the '80s, which led to massive business failures and swaths of destitute retirees.

Thu, 09/22/2011 - 07:22 | 1696144 ZeroPower
ZeroPower's picture

Theres no bids in credit-land today. None. And anyone lucky enough to be long a hedge from previous days isn't selling, thereby not adding the usual liquidity of arbitrageurs who want to step down and collect their gains.

Ugly.

Thu, 09/22/2011 - 07:32 | 1696173 oogs66
oogs66's picture

and banks are holding onto their hedges because they want to have as many shorts on the books as possible for quarter end

Thu, 09/22/2011 - 07:22 | 1696146 LookingWithAmazement
LookingWithAmazement's picture

A default (gangrene) can have a contagious effect. First Greece, then Italy?

Thu, 09/22/2011 - 07:41 | 1696202 Ghordius
Ghordius's picture

With Greece, the discussion is still open where the bone-saw has to touch the skin, above or below the knee.

Italy is different, the doctors are still discussing about how to open the chest.

Thu, 09/22/2011 - 07:49 | 1696223 falak pema
falak pema's picture

Berlusconi of Italy is proving every day that his instrument is not gangrened and its very operational. So both he ans DSK can say... no need to saw off my dying appendix as its hot and steaming. The gangrene must be amongst those Banksta creeps who don't use their instruments except to levitate fake paper!

"Let my people be and my chili pepper stays spicy even in devalued euros" says Moses of Rome. Go get those banksta shills and leave the Athenians to eat dolmades.

BTW : you sound less bored and more awake today!

Thu, 09/22/2011 - 07:24 | 1696150 RemiG2010
RemiG2010's picture

Thanks God it's not a syphilis.

Thu, 09/22/2011 - 07:25 | 1696152 LookingWithAmazement
LookingWithAmazement's picture

But I don't believe in defaults. Greece is being saved, political will to support is still there, moreover because so much money is given to Greece. Germany and other countries will agree all packages, so let's move on. No Armageddon. You know.

Thu, 09/22/2011 - 07:44 | 1696208 Ghordius
Ghordius's picture

No Armageddon? Are you kidding?

The Dollar has to rise, Gold and Silver have to be bashed, and all this at least until the end of the month. After that, all the realistic "No Armageddon" news can be trotted out again, for a while.

Thu, 09/22/2011 - 07:25 | 1696154 DrunkenMonkey
DrunkenMonkey's picture

400bn euros vs 15 trn dollars ? You first, Uncle Sam.

We'll start printing before we default, just like the US did when they realized they were holding a busted flush

Thu, 09/22/2011 - 07:27 | 1696157 RemiG2010
RemiG2010's picture

Ladies first!

Thu, 09/22/2011 - 07:31 | 1696168 DrunkenMonkey
DrunkenMonkey's picture

Hairy Greek ladies look a lot like men .. :)

Thu, 09/22/2011 - 07:32 | 1696160 Smithovsky
Smithovsky's picture

When swine flu broke out 2 years ago, some countries ordered all their PIIGS to be slaughtered.  Maybe it's time for Europe to do the same.  

This is not gangrene, this is a nasty mutation of the swine flu.  

Thu, 09/22/2011 - 07:33 | 1696178 Soul Train
Soul Train's picture

Tyler, you are 100% right. It is time to let the chips fall.

Banks and all the rest - they must bankrupt to pay the price for their poor judgement.

Party is over and Kool Aid all gone.

Thu, 09/22/2011 - 07:40 | 1696199 GeneMarchbanks
GeneMarchbanks's picture

Peter Tchir not Tyler. Awareness, people, awareness...

Thu, 09/22/2011 - 07:33 | 1696179 saiybat
saiybat's picture

You've got to bloodlet the black biles of the humours is imbalanced. There needs to be more yellow bile. Consume the whole of the mandrakeat the sign of day of Taurus. Once humours are balanced the debts will be remedied with the help of the plague doctors.

Thu, 09/22/2011 - 07:34 | 1696180 mynhair
mynhair's picture

Kaputulation!

Thu, 09/22/2011 - 07:34 | 1696181 The4thStooge
The4thStooge's picture

Does this have anything to do with the burning sensation the Bernank feels when he tries to piss dollars all over the world?

Thu, 09/22/2011 - 07:38 | 1696194 Element
Element's picture

Blow torch the bastard off.

Thu, 09/22/2011 - 07:39 | 1696195 ghengis86
ghengis86's picture

Smells like almonds

Thu, 09/22/2011 - 07:49 | 1696226 Quinvarius
Quinvarius's picture

<gobble gobble>

Tastes like...ack!

Thu, 09/22/2011 - 08:08 | 1696279 spanish inquisition
spanish inquisition's picture

Hopi Blue Kachina time?

Thu, 09/22/2011 - 07:44 | 1696211 HD
HD's picture

Agreed.  Simple and well said.

Thu, 09/22/2011 - 07:48 | 1696218 Quinvarius
Quinvarius's picture

Is the head dead yet?

Thu, 09/22/2011 - 08:01 | 1696261 Manthong
Manthong's picture

Schadenfreud face on.. let the amputating begin.

Thu, 09/22/2011 - 08:09 | 1696282 RunningMan
RunningMan's picture

I see less cooperation not more, and that means trouble. Europe told Geithner to f* off in no uncertain terms. GOP told Bernanke no more money printing. SNB peg. Germany pulling members from the ECB.  This is not the playbook of a team that is acting in concert to affect any winning outcome. On the contrary, we are seeing disarray, and that means there has to be a meaningful evidence that more monetary shenanigans won't buy them another three years before they get together and take action. 

It is stunning to me to watch human behavior during this time of crisis these past three years. I consider myself a realist, and me even observing this state of affairs is unwelcome to many who prefer to believe (1) it is not that bad and (2) someone will take care of us. Different from gangrene, which is visible, the symptoms here have been swept under the rug, making denial so much easier. Politicians see a thriving DC economy, bankers saw a booming i-bank period until recently, road workers see continued road repair (some unneccesary!), unemployed got 99 weeks of benefits (now exhausting finally). When you put a patch on something, but don't fix the problem, you get temporary relief.

Now the choice is patch again, or fix, even if the fix is amputation. And if it is amputation, can we predict how the organism functions afterwards?

Thu, 09/22/2011 - 08:19 | 1696314 Reptil
Reptil's picture

Well put.

Ehmm the amputated economy and financial system will look different (less bloated, and less potent), but it'll smell better.

We're all on a crossroads, since a planned economy with a semblance of free trade (corporatism) has run it's course. I STILL believe this grinding collapse was all planned.

 

Thu, 09/22/2011 - 08:31 | 1696340 RunningMan
RunningMan's picture

Agree about the crossroads - but I'm still unsure of the idea of a master plan for the grinding collapse. Many on ZH suggest it has all been planned, but I increasingly suspect this was inevitable because of the flaws of human nature - a short term incentive system, coupled with decision makers acting on the wrong metrics (re-election/votes and $ versus long term sustainability). When someone in power (a world leader, a banker, a business owner) is making money and "succeeding", even if everyone else is not, they want the system to go on at any cost.

Thu, 09/22/2011 - 08:47 | 1696405 Reptil
Reptil's picture

Of course.
But the stage was set for corruption in systemic form when Glass-Seagal was revoced.
After the Exxon Valdez the present "system" of CDS was put into place. No one can tell me that they didn't know what they were doing. I think they counted on human nature; greed, loss of ethical consideration.

Also in the collapse of 2008, the measures taken were not to "fix the problem". We're IMO still in that very same collapse. They knew it was never going to work. It was a ridiculous plan.

Thu, 09/22/2011 - 09:55 | 1696713 RunningMan
RunningMan's picture

Reminds me of the mafia skit from Monty Python.

http://www.youtube.com/watch?v=cNZKUozrBl4

Would be ashame if your markets were to drop precipitously, or say, Greece defaults.  Wouldn't want a bank to be done over. I can offer you protection, for, say, $1 TN...

Thu, 09/22/2011 - 08:13 | 1696294 I Am Not a Copp...
I Am Not a Copper Top's picture

Nice Aliens Reference!

Thu, 09/22/2011 - 08:14 | 1696297 freethinker4now
freethinker4now's picture

Use a big ass axe. Not quite as clean a cut. But much quicker

Thu, 09/22/2011 - 08:15 | 1696302 VyseLegendaire
VyseLegendaire's picture

Its not gangrene.  Its Bubonic Gangrene. Or something.

Thu, 09/22/2011 - 08:24 | 1696318 Reptil
Reptil's picture

EHEC! (which is made up of several different strains of e-coli, with some bubonic plague DNA thrown in for good measure)

http://images2.wikia.nocookie.net/memoryalpha/en/images/thumb/1/18/Vidii...

Thu, 09/22/2011 - 09:04 | 1696479 FranSix
FranSix's picture

You mean flesh-eating disease.

Thu, 09/22/2011 - 08:31 | 1696335 spanish inquisition
spanish inquisition's picture

Have to check recent patents from Merck for vaccines to plagues that don't exist to see what will shortly be released from government labs.

Thu, 09/22/2011 - 08:32 | 1696346 FranSix
FranSix's picture

Hang Seng getting killed.

Thu, 09/22/2011 - 08:38 | 1696370 BrocilyBeef
BrocilyBeef's picture

I want sub-$35 silver!

Blythe, are you man enough?!

Thu, 09/22/2011 - 09:27 | 1696594 pazmaker
pazmaker's picture

I'm buying at sub $37 silver...which means this morning ..........if not buying local   gainsville coins has better prices then apmex but takes longer to ship.

Thu, 09/22/2011 - 09:01 | 1696471 caerus
caerus's picture

rot i say...

Thu, 09/22/2011 - 09:12 | 1696520 Stuck on Zero
Stuck on Zero's picture

It's gangrene all right.  That's why there are so many flies and maggots on Wall Street.

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