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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Derpin USA's picture

I for one welcome our hacksaw-wielding overlords.

kahunabear's picture

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

falak pema's picture

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

He_Who Carried The Sun's picture

Its spelled  Long John Silver!

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.

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.


GeneMarchbanks's picture

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

Yeah, then we'll be 'healthy'

ambrosiac's picture



Don't tell Gwyneth Paltrow.

bania's picture

financial debridement, baby!

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.

Mitzibitzi's picture

Not for too much longer, I suspect.

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

donsluck's picture

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

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.

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.

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.


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'


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.

kahunabear's picture

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

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.

WonderDawg's picture

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

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.

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.


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

LookingWithAmazement's picture

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

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.

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!

RemiG2010's picture

Thanks God it's not a syphilis.

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.

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.

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

DrunkenMonkey's picture

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

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.  

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.

GeneMarchbanks's picture

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

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.

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?

Element's picture

Blow torch the bastard off.

ghengis86's picture

Smells like almonds

Quinvarius's picture

<gobble gobble>

Tastes like...ack!

HD's picture

Agreed.  Simple and well said.

Quinvarius's picture

Is the head dead yet?

Manthong's picture

Schadenfreud face on.. let the amputating begin.

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?

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.


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.