• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

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Tue, 10/25/2011 - 10:57 | 1808236 Sudden Debt
Sudden Debt's picture

strange... Verhofstadt said yesterday that there won't be any credit event in the future whatsoever because we're just so well organised....


Tue, 10/25/2011 - 11:08 | 1808289 flacon
flacon's picture

 "Remember I said it standing here if you don’t remember anything else I said. Watch, we’re gonna have an international crisis, a generated crisis, to test the mettle of this guy.


Gird your loins, we’re gonna win with your help, God willing, we’re gonna win, but this is not gonna be an easy ride. This president, the next president, is gonna be left with the most significant task. It’s like cleaning the Augean stables, man. This is more than just, this is more than – think about it, literally, think about it – this is more than just a capital crisis, this is more than just markets. This is a systemic problem we have with this economy." ~ Joe Biden, October 2008

Tue, 10/25/2011 - 11:20 | 1808366 GOSPLAN HERO
GOSPLAN HERO's picture

Joe Biden went Full Retard before it was fashionable.

Tue, 10/25/2011 - 11:50 | 1808507 trav7777
trav7777's picture

nah; the dude spoke the truth.  People are so unaccustomed to hearing the truth that when it's spoken, it is so far disconnected from the mythic narrative that it sounds like full retard.

I am going to say it again:  in a growth economy, driven by power (not total reserves, RATE of production), when the rate of energy input begins to decrease, the entire edifice becomes imperiled as a fundamental institution.  Everything we try that does not address this fundamental problem will fail.

Imagine you were facing a situation where gravity was increasing and you were in the business of lifting things.  Would you expect monetary measures, cheapening of credit, pretend accounting, etc., to FIX this?  No...it's a fundamental problem of reality, which to be blunt is something that society has been sorely disconnected from for quite a long time.

Unabated Oil supply growth (and other energy before that) for 150 years has permitted silly and stupid fantasy shit like macroeconomics to be accepted as real.  The entire American Narrative is utter bullshit; our exceptionalism was driven by a climate of innovation built on the oil supply capable of supporting it.  Take away our oil growth, like in 1970, and then again in 2006 and we look utterly incompetent and inept.

Raygun made Saudi Arabia the 51st state in the early 80s.  It was either that or collapse.

Tue, 10/25/2011 - 11:37 | 1808447 disabledvet
disabledvet's picture

The catastrophe will start with Italy with Spain right behind. Our tell is the QE chatter. They see it coming and are concerned. We'll see if Super Mario has some tricks up his sleeve.

Tue, 10/25/2011 - 12:18 | 1808615 GottaBKiddn
GottaBKiddn's picture

Global currency devaluation looms.

Mon, 01/16/2012 - 09:53 | 2068421 adrin
adrin's picture

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Tue, 10/25/2011 - 10:57 | 1808242 John Law Lives
John Law Lives's picture

"CDS trigger event"

Sounds like that is the bottom line. Central Banks will print fiat currency to the point of starving poor people to death to prevent a "CDS trigger event"???

Tue, 10/25/2011 - 11:42 | 1808464 Odin
Odin's picture

Even if they begin printing, I really don't see a market collapse as avoidable at this point... We know now with absolute certainty that printing is a temporary solution... I mean seriously, what are they going to do just keep printing and printing until hyperinflation occurs and there is a full on global revolution?... I'd imagine the Fed at this point knows that the markets will have to seriously collapse before QE3 is accepted...

Tue, 10/25/2011 - 11:43 | 1808469 Ghordius
Ghordius's picture

in a nutshell: yes

this as long as the MegaBanks use the CDS and other derivatives constructs to tie each other with chains and explosives

BAN CDS (Again)

Tue, 10/25/2011 - 10:58 | 1808245 youngman
youngman's picture

They will try very very hard not to make it an event...because if it is...its over I think...Western worldwide banking is over....another Paulson weekend moment...squared...btw....gold and silver could go up $500 and 50 easy in a week...

Tue, 10/25/2011 - 10:58 | 1808248 apberusdisvet
apberusdisvet's picture


The 2% appreciation limit on gold by the banksters is on display right now; watch the manipulation in real time.

Tue, 10/25/2011 - 11:09 | 1808306 CClarity
CClarity's picture

Thinking the same thing.  The story is unfolding in the gold price. 

The netflix plunge will play out in many other assets.  Whoosh in specific names and countries and not all obvious, but the bubblier most likely.

Tue, 10/25/2011 - 10:59 | 1808250 GeneMarchbanks
GeneMarchbanks's picture

One question: how long before Italian youths are taking photos with Berlusconi's corpse?

Just sayin'

Tue, 10/25/2011 - 11:29 | 1808401 Falcon15
Falcon15's picture

Ancora, Mussolini? (trans. - Once again, Mussolini?)

Tue, 10/25/2011 - 12:05 | 1808560 Bunga Bunga
Bunga Bunga's picture

Berlusconi government collapsing. Right wing coalition partner Lega Nord against pension reforms. They want new parliament elections. Without "reforms" Italy can't tap bailout funds. So either Italy or Berlusconi is toast.


Tue, 10/25/2011 - 12:22 | 1808633 GeneMarchbanks
GeneMarchbanks's picture

'So either Italy or Berlusconi is toast.'

So... what you're saying is Italy is toast?

Tue, 10/25/2011 - 10:59 | 1808252 Sequitur
Sequitur's picture

If I'm a bank and I bought CDS, I say, screw the voluntary haircut. Pay me my CDS insurance.

Tue, 10/25/2011 - 11:00 | 1808259 SheepDog-One
SheepDog-One's picture

I wonder what the CDS insurance will pay off in...Italian hookers?

Tue, 10/25/2011 - 11:06 | 1808295 Lord Welligton
Lord Welligton's picture


And the only reason you wouldn't push for it is because of political/monetary institution pressure.

You might be AOK.

But others may be close to outright bankruptcy.

So you might be negotiating for a back-door settlement.

Tue, 10/25/2011 - 11:19 | 1808360 dracos_ghost
dracos_ghost's picture

Except, now that Glass-Steagal is gone, the CDS buyer-seller are the same animal (different set of books) and instead of distributing risk throughout the market, it has amplified it.

Tue, 10/25/2011 - 10:59 | 1808253 SheepDog-One
SheepDog-One's picture

60% haircut CDS trigger event....BULLISH dammit!!

Tue, 10/25/2011 - 11:02 | 1808269 dracos_ghost
dracos_ghost's picture

60% Greek haircut WAY TOO LOW. 90% more like it just to get into the Italian danger zone...



Tue, 10/25/2011 - 11:02 | 1808273 dasein211
dasein211's picture

du hast
du hast mich
du hast mich gefragt
du hast mich gefragt, und ich hab nichts gesagt Willst du bis der Tod euch scheidet
treu ihr sein für alle Tage Nein Willst du bis zum Tod, der scheide
sie lieben auch in schlechten Tagen Nein You
you hate *
you hate me
you hate me to say
you hate me to say
you hate me to say, i did not obey Do you want, until death seperates you,
to be faithful to her for all days Never Do you want, until death
Eu theme song

Tue, 10/25/2011 - 11:13 | 1808328 skam
skam's picture

"Du hast mich" does not mean "you hate me".  It means "you have me".

Tue, 10/25/2011 - 11:03 | 1808280 NDXTrader
NDXTrader's picture

And yet the Euro caught a bid at down 35 pips. Shorts are playing against central banks/Euro repatriation here. I learned a lot trading in 2008 that has helped me lately. If you are short you are fighting against a cornered and desperate opponent...they are fighting for their privileged life, their kids private schools, their wives' memberships in the right clubs. their 21 yo mistress they pay rent for, the BMW lease, everything. Once I lost a ton of money in '08 I realized that you are fighting a dangerous, wounded rat.

Tue, 10/25/2011 - 11:06 | 1808294 SheepDog-One
SheepDog-One's picture

Its all polishing brass on the Titanic, its going down.

Tue, 10/25/2011 - 11:10 | 1808308 jcaz
jcaz's picture

Well, yeah.... Shorting is a tool, not a way of life-  use the tool when it works, ditch it when it doesn't-  that's why it's called trading....  Can't turn a short into an investment, physically impossible.

Tue, 10/25/2011 - 11:05 | 1808288 Tsar Pointless
Tsar Pointless's picture

Would somebody PLEASE turn off that damn fan? All of that smelly brown stuff is getting in the way of my sports highlights viewing!

We're a whole lot closer to the "Wile E. Coyote" moment than I think anybody realizes. One day, we'll wake up (perhaps), and everything will have come to a complete stop.

That's the way I've always seen this "second part" of the ecomomic crisis playing out. and that's the way it's lining up to play out.

Tue, 10/25/2011 - 11:08 | 1808299 SheepDog-One
SheepDog-One's picture

Thats what will happen one of these mornings....all the 'traders' will get up and turn on their computers to see what futures are doing and get a banner that simply says 'World markets are suspended until further notice, all your accounts are belongs to us'.

Tue, 10/25/2011 - 12:29 | 1808676 GottaBKiddn
GottaBKiddn's picture

That "Stop" will be the "over the falls" moment when everything falls into the hands of those who designed these very events.

Tue, 10/25/2011 - 11:05 | 1808291 machineh
machineh's picture

If I were in Greece, I'd be cashing out my deposits today ANYWAY.

Screw the summit, I want liquidity I can hold in my hot, hairy little palms, and spend across the border if necessary!

Tue, 10/25/2011 - 11:57 | 1808536 trav7777
trav7777's picture

Argentina and Brazil have already shown what happens in situations such as these, when deflation takes hold and can't be stopped.

Greece is a case of DEFLATION and people are scared to death of losing everything that they have.  And the "only way out" is seen as printing and re-drachmafying.  Think about that.

The system cannot be sustained when everyone is heading for the exits, so they LOCK the doors and then they devalue.  If stampedes out are permitted, the sovereign itself goes kaput and NOBODY WANTS TO HOLD notes of a sovereign going kaput.

Iceland deflated and the krona did not become more worthful.  The same was true of every EM country that bubbled and crashed.  Was a case of mass stampedes OUT of local debt, and then the realization that you needed to get out of local currency as well.  People cash out of positions and then they cash out of cash.

Tue, 10/25/2011 - 11:09 | 1808303 Lord Welligton
Lord Welligton's picture

A 60% "haircut" on Greek debt, given that the ECB and IMF want to remain exempt, might only offer a 30% real cut in the stock of debt.

Completely unsustainable.

The ongoing deficit remains.

Who will fund that?

Tue, 10/25/2011 - 11:09 | 1808305 machineh
machineh's picture

Next rumor:


Tue, 10/25/2011 - 11:10 | 1808309 Hero Protagonist
Hero Protagonist's picture

Until US debt service is greater than tax revenues there will always be Uncle Sam's deep pocket  for all to steal from.

Tue, 10/25/2011 - 11:21 | 1808372 Falcon15
Falcon15's picture

I do not know where you get your information from, but it already has. Total US Debt is $54,548,789,321,051 and counting (not inclusive of unfunded liabilities of $116,108,119,074,586.00 and counting). Total US Tax revenue is: $2,289,729,211.00 and increasing much slower than debt/unfunded liabilities. Source: USDebtclock.org. The US reach has exceeded it's grasp. Oh, sure, The Bernakio and his insane Fed Posse can print to infinity, but that is a WHOLE different can of worms, with a big red label called "Hyperinflation". Can you say Zimbabwe? The US is broke as a joke.

Tue, 10/25/2011 - 11:37 | 1808442 SheepDog-One
SheepDog-One's picture

We're 100% debt/GDP, right now....and anyone who still believes we have a $15 trillion GDP has got to have bananas for brains!

Tue, 10/25/2011 - 11:52 | 1808517 Hero Protagonist
Hero Protagonist's picture

Debt Service (e.g. the amount of interest paid on the debt) and Debt are two different things.  

Tue, 10/25/2011 - 12:50 | 1808807 GottaBKiddn
GottaBKiddn's picture

Being broke never stopped the Zimbabwe presses.

Tue, 10/25/2011 - 11:11 | 1808322 Johnny Lawrence
Johnny Lawrence's picture

I'm still amazed that the banks will be taking any losses at all, nevermind 60%.

Tue, 10/25/2011 - 11:15 | 1808336 SheepDog-One
SheepDog-One's picture

Step right up banksters for your 60% crew cut at the guillotine! We guarantee the CLOSEST shave, or your CDS back!

Tue, 10/25/2011 - 11:26 | 1808398 snowball777
snowball777's picture

You're right, we should check in on the SHVC (the shave and a haircut index).

2 bits == 112.75 grains == .235 toz == $7.58


Tue, 10/25/2011 - 11:15 | 1808338 Zero Debt
Zero Debt's picture

They have given up on the nuclear option. Now only the thermonuclear option left.

Tue, 10/25/2011 - 11:16 | 1808341 lizzy36
lizzy36's picture

Why are they holding this summit tomorrow?

There is no agreement to agree because terms still NOT agreeable.

And they are NEVER going to be agreeable.

But hope is a strategy right?

Tue, 10/25/2011 - 11:26 | 1808396 machineh
machineh's picture

It's to set a definite date to convene again to ratify a plan to make a plan.

And then to produce a report.

Any questions?

Tue, 10/25/2011 - 11:17 | 1808353 apu123
apu123's picture

"LIES"man also stated that he had a source higher up in the EU that told him the lower level guy who said the meeting was canceled was wrong.  It is still on according to LIESman.  You would think collapse in the Eurozone would make him happy, then there would be QE3 with LSAP.  What joke, every time bad news comes out LIESman gets out his turd polish and goes to work.

Tue, 10/25/2011 - 11:21 | 1808371 snowball777
snowball777's picture

Anyone know the status of these bonds vis a vis any collective action clauses?

i.e. can vultures demand full payment and refuse to participate in debt exchange or other solutions? (soon to be ruled impossible by ESM...tick tock)


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