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Just Because There Is A "Will" There May Not Be A "Way"
From Peter Tchir of TF Market Advisors
Just Because There Is A "Will" There May Not Be A "Way"
The European headlines continue to roll in. As far as I can tell, they either hired someone to play devil's advocate, or for the first time since at least July they actually tried to translate some of their words into action.
They are running into legal roadblocks, death spiral scenarios, the reality that once they give the money to the PIIGS that the power reverts to the PIIGS, that everything is circular and self-referencing, that debt markets in the end can decouple from CDS markets, that Germany and France are going to see borrowing costs spike (even after the ECB rate cut), and that there are so many holes to plug - bank capital, bank bonds, PIIGS debt, Belgium debt, something about Dexia that no one even remembers, voters are against it, Greece isn't going to fool anyone, etc.
At 1075 a lot of pessimism was priced in. At 1225 a lot of optimism is priced in. Investor sentiment has turned bullish, conversations I have involve more bullish people than before, and RSI, although not dangerously overbought is not showing any evidence of oversold conditions.
On the other hand, we may get a rumor that Apple is working on an I-guarantee and then shorts set here will be crushed. Without that rumor, looking at Spanish and Italian and French bond yields and spreads is a bit scary, and German bond yields aren't inspiring confidence either. SOV CDS is definitely tighter, but with all the government efforts to push it to zero, I personally am not looking closely at SOV CDS as an indicator of anything.
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Marketwatch is saying Italian police have seized $246Million euro from Unicredit..and so it begins
was it real money, or that printed stuff?
It was a copy of a copy ...
some interesting factoids:
..and the Libyan connection...
hmmm something is fishy here....
Libya bailed out Itlay's Unicredit in late 2008 with their oil wealth. Then in 2011 Libya gets invaded, and Italy freezes Libya's assets. Throw out the Libyan bums, keep the money, steal the oil. Financial crisis averted?
US pulled the same bs with Gaddafi's investment managed by Goldman Sachs tanking 99% while GS probably took bets on the other side.
And US let Saudi prince invest in Citi bank before it collapsed too.
Not looting for Gaddafi, but western banks are pulling something out of a hat here.
My French brother-in-law has lived in Tripoli for the last five years where he was very high up in the construction business. He left town with just the t-shirt on his back, left a house full of furniture. Barely made it past five different armed checkpoints due to copious cash being passed out.
Anyway he says it's common knowledge that Gaddafi has tons of gold in shipping containers buried in secret spots around the desert. The people who buried it were shot.
Gaddafi was running around Africa convincing governments to start a pan-African currency backed by Libyan gold.
And yes there are around 20,000 Stinger missiles missing too.
makes sense. all oil producing countries want to trade oil away from US dollar. Iraq did and Saddam got killed. Iran is doing it and US is targetting them. Libya wanted Islamic Gold backed African central bank by 2020 and look where he is now.
The African Central Bank (ACB) is one of the three financial institutions of the African Union. Over time, it will take over responsibilities of the African Monetary Fund.
The creation of the ACB, to be completed by 2028, was first agreed upon in the 1991 Abuja Treaty. The 1999 Sirte Declaration called for a speeding up of this process with creation by 2020.[1]
When it is fully implemented via Pan-African Parliament legislation, the ACB will be the sole issuer of the African Single Currency, will become the banker of the African Government, will be the banker to Africa's private and public banking institutions, will regulate and supervise the African banking industry, and will set the official interest and exchange rates; in conjunction with the African Government's administration.
Wow falun bong: it almost looks like you know what you are talking about.
Almost.
Sell GMCR puts @ strike 80 that expire on Friday NOW or wait for later today or tomorrow?
I know robotrading starts at 3 PM, so maybe sell before that?
Opinions?
David Einhorn, is that you?
Nah I bought my puts before that dude totally copied my trading thesis and did a powerpoint presentation on it.
...where's that gold storage vault again?
Carrots and sticks not working anymore, maybe if free hookers were dangling from the carrots we could get some market boners.
So, does this mean to look at SOV CDS as an indicator of something?
the Relative Stength Indicator sez:
siesta time, BiCheZ!
green mountain coffee
mmMmmmm... Coffeeee....
Haven't even tested the 4 week ema at 68.65 yet...on the IWM...long above and short below imo
give me 2 trillion downticks for that, but what shall Merkozy et al say/do? The smallest grain of truth out of a high ranking politician's mouth would crash the world economy. I mean, the earlier the better - but the one who does / speaks the truth would be made responsible.
"At 1075 a lot of pessimism was priced in." Give me a break, this market can't price anything in. Oh yeah, it is about perception - as in, I think he looks good. Reality - he has pancreatic cancer. Overbought, oversold ---- overdone crap. Try paying your bills with perception. Reality sneaks up on one better than any Greek could ever do!
At 1075 a lot of pessimism was priced in. At 1225 a lot of optimism is priced in.
Ah.....well, yes, Pete. The cyclical beast within you. And, sure, life will all too likely continue to be cyclical for awhile, given human nature and all, which is that doing something like printing money is better than doing nothing. Which is naturally how the can gets kicked, Pete. But there is no long-term cyclicality in the can being kicked Pete, or in the possibility of wide-scale sovereign defaults, because one or the other is naturally going to happen.
But did you forget already, Pete: The fear that was put into your warped little heart when you went long, than covered in a single day, on those 'oversold" conditions around 1080? Did you forget why you had so much fear in your twisted little soul? It's because you knew Pete, and you still know somewhere deep down inside of your programmed functioning, that we are somewhere "on a short enough timeline where the survival rate for everything is zero." And that especially means cyclicality, Pete. It means somewhere not too far down the road it will be all too clear, even to those that have had it beaten into them that life is a cyclical pendulum that, nope, we are heading straight toward the eye of the storm of the great structural crises.
Well, yes....indeed, Pete, We are already there. It's only when the sheeple wake up to this idea or when we have a bond auction go bidless or we have the Chinese sell TSY's en masse that "oversold" conditions simply don't exist on the way to zero. And that is why the next time the market gets jack-hammered, like a shot to the nuts, Pete, that you will still be shitting your pants when you go all-in on those oversold conditions. Because will the march to zero be it that time? Or will you be spared? The truth is, Pete, you will not know and neither will I.
Which is why I naturally say good luck to that one, Pete. I'll be wishing you well from my fortified compound, armed, ready, and dangerous as alwyas.
Best wishes,
Your Friend.
NEWSFLASH:
Generalisimo Fondo Europeo de Estabilidad Financiera is still dead.
What?
You mean that if a man was falling after jumping off the Empire State Building, he might not land softly even if the "consequences of inaction are 'unthinkable'"? =)
Where there is a will there are relatives
timber, bitchez!
It's almost impossible to find a way when none of the parties is being honest with each other. The French govt knows its banks have problems, but probably not the full extent. The Italians have been playing "oscuro" for so long, they know no other way. Austria, well, they don't like foreigners prying into their affairs, etc etc.
It is impossible to fix something unless you know what is the extent of the damage. Everyone's praying Merkel will sanction money printing, and a hell of a lot of it, but the constitution, the courts, the opposition all are against it and there's pretty much nothing else you can do to break the pessimism..
Finnish opposition raising hell over the EFSF, Prime Minister Katainen says "oops, there might have been a small, tiny, little mistake but all is well, all is well.
From Helsingin Sanomat (Google translate):
Finnish guarantee liability may swell to doubleFinnish guarantee liability crisis in the euro area countries, the financing may be substantially higher than those presented by the government 14 billion euros.
At the end of September, the Parliament adopted the law guarantees the maximum amount is recorded EUR 14 billion in nominal debt. Nominal value means the amount of the loan, excluding interest expenses.
"The decision to guarantee the liability was nominal, but it also covers the EFSF borrowing costs or interest rates. Guarantees the maximum amount is ultimately a political decision of the Member States. Finland guarantees the parliament to decide," said Treasury Secretary Martin Hetemäki .
Hetemäki admits that the guarantee is responsibility of the content is poorly written in the Board's proposal justification.
He stresses, however, that the parliament approved the law guarantee liability is correct.
Grounds of the bill argued that the Interim Financial Stability Facility (EFSF) interest on the new framework agreement would be excluded from the guarantee.
Interest rates of the guarantee amount will depend on prevailing interest rates.
EFSF's funding paid an interest rate of 3.5 percent of Finland's guarantee liability would be 30-year loans, 28.7 billion euros.
If a loan period of 15 years, the guarantee liability at the same interest rate level would be 21.4 billion euros.
The euro countries in crisis countries do not grant a loan, but to ensure the EFSF financial markets for loans. EFSF in turn, indicates a crisis loan to countries in financial distress.
Guarantees will be realized, if any EFSF funded by the state of the euro fails to repay its debts, or sink into insolvency.
http://www.hs.fi/talous/Suomen+takausvastuu+voi+paisua+kaksinkertaiseksi...
And from Iltalehti (Google translate):
Ministry of Finance Finland guarantee liabilities are doubledThe Ministry of Finance considers it highly unlikely that Finland's guarantee liability crisis, the euro could rise significantly.
Helsingin Sanomat reported on Wednesday that Finland's guarantee liability to extinguish the crisis in the euro might grow up to double the public has said about 14 billion.
Treasury Secretary Martin said Hetemäki STT, the magazine that the calculations are based on unrealistic assumptions, which in practice can not be realized.
- The calculations assume that 14 billion lent before the permanent stability mechanism to be introduced and that the entire loan would be for thirty years. That does not in practice change was not even take.
Mäki points out that the temporary stability of an instrument EFSF will be short-lived, and that a permanent mechanism is likely to move as early as next summer.
- The following loans and their interest rates go for a permanent mechanism. These loans and their interest payments are no longer covered by the guarantee.
Opposition to a cold ride
Centre Party Mari Kiviniemi wrote in his blog on Wednesday, is very concerned about the government's ability to manage things Finland in the EU. He kysyikin, pimittääkö government löperön line, real prices whether or not the ministers understand the decisions adopted.
- When the government presented to Parliament on the law EFSF swelling, entries on the final price tag was very ambiguous and even erroneous. The center of Representatives when prompted by the size of the entire amount of the guarantee, the government responded to the ceiling of 14 billion. Now, the truth is revealed.
Constitutional Committee Chairman John Koskinen (SDP), said the plenary session on Wednesday that the issue will be explored in the coming days.
SDP MP Tarja Filatov, in turn, commented on the situation on Facebook.
- Constitutional Affairs Committee submitted a memorandum clearly states: "EFSF to provide the funding guarantee does not cover the interest expense." So at least the argument that the Parliament has not been told, are false, Filatov said.
True Finns MP and Constitutional Committee member, Vesa-Matti Saarakkala again questioned in a statement that the process might have been violated the Constitution, because the decisions are made ??is not known for its size.
STT is reached Wednesday evening, Minister Jutta Urpilaista (SDP) of this foreign trip.
http://www.iltalehti.fi/uutiset/2011101914603180_uu.shtml
From Taloussanomat (Google translate):
Katainen YLE: Responsible for the guarantee, "happened to blunder"Prime Minister Jyrki Katainen admits that the Finnish EFSF stabilization fund for guarantees made by not properly justified. The law is not wrong, but at the Prime Minister's reasoning is that "by the technical blunder," says YLE news.
Finland guarantees the real responsibility for the temporary crisis fund (EFSF) was born of uncertainty.
Parliament passed a law in September, in which Finland's share of EFSF was raised to a maximum of EUR 14 billion. Enimmäistakaus is based on the debt at face value. Finnish computational guarantee liability may be doubled for more than 28 billion if calculated on the EFSF borrowing rates.
- Nominal value of 14 billion is the authority. So the responsibility is not a guarantee, but empowered, and it has been decided. On top of this just normal procedure, according to the interest rate, which currently does anyone know when it is not known in general, needs the power to use, Katainen told YLE news .
Katainen according to the law guarantee liability is correct, but the bill will guarantee interest on the grounds outside.
This legislative package, the problem is at the reasons which have occurred in the preparation of a technical blunder, which may be totally wrong impression, but fortunately the articles are correct.
Issue brought up today, Helsingin Sanomat. Economic Times said the same thing two weeks ago.
http://www.taloussanomat.fi/kotimaa/2011/10/19/katainen-ylelle-takausvas...
I'm fucking terrifed to short anything. How can you short this bullshit ass market?? I guess you have to hope for good news cause bad news seems to ramp it. It's to the point you can't even trade an idea because the outcome could result in the opposite move. I give up. I'll just keep buying gold and silver and keep the IRA contributions in cash to get the tax benefit. Fuck you Ben Bernanke, I'm not playing your game anymore and I hope you get hit by a fucking car.
The Global Economy idea was really a suicide pact. The next decade will be a race to see who can abrogate free trade treaties and agreements the fastest.
If everbody jumps off a buliding at the same time, everbody dies. If you jump a little slower, you might get lucky and land on a couple of dead bodies to break your fall. This is what passes for financial planning in govermental circles.
Did I mention we're all fucked?
death spiral scenario is one of the best acts you'll ever see. Don't blink or you'll miss it.
Interesting that the briefing document on the EFSF is only available in English rather as the EU Constitution from D'Estaing was only available in French and then only as amendments. German MdBs must be getting anxious having been stiffed in September and voting for a pig only to find it has become an elephant and the briefing documents have whole sections of detail missing. Rather like an Ermaechtigungsgesetz (Enabling Act) so beloved of Post War "democrats" circumventing parliamentary accountability. Now we have Barnier proposing to ban Rating Agencies from publishing assessments of EU countries - presumably US Courts will be ordered to enforce EU Law by Wall Street attorneys protecting Goldman bonuses ! Can't be long now before we get a) Capital Controls b) Import Controls c) States of Emergency since we've had d) Dirty Float/Devaluation e) Destruction of Savings f) Hyperinflation by Installment g) Floating Banks on a Sea of Liquidity since 1999 and having them impose a Credit Squeeze on the real economy since 2007