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The MF Global Trade Is Not Coming To (European) Town - Why The ECB's 3 Year LTRO Is The Latest Bailout Flop

Tyler Durden's picture


On Friday, as the Eurobond market was briefly soaring, we attributed the move to sentiment that was best captured by a note out of Morgan Stanley's govvie desk: "The carry trade is happening, there is no doubt about it. In SPGBs (45bps tighter t0) we estimate 15-20bn (incl 6bn auction) of buying from domestic mid sized banks and cajas THIS WEEK (500mm is usual 2way trading volume per day). We are seeing the same starting with Italian mid tier banks in BTPs today (35bps tighter t0). Also Ireland seems to be very well bid up to 2016 maturities (75bps tighter on day). While Huw and Laurence anticipated this in their research piece on the LTRO from yesterday, we certainly did not expect it to be this intense and front loaded, this is the strongest buying we have seen all year, it feels a lot like QE." In simple summary, what MS was hoping and praying (because if clients are buying, MS is selling) its clients would believe, is that European banks would promptly forget that Europe has trillions of rolling over financial corporate debt, and instead of focusing on generating the cash needed to pay down maturities if no buyer stepped up, banks would somehow re-lever, by buying up even more sovereign debt in hopes of catching a few bps of carry, and completely ignoring the "#1 issue at the heart of the Eurozone crisis"TM - the fundamental supply/demand paper maturity mismatch. Not to mention that any statement which needs the redundant "there is no doubt about it" is a 100% lie. It took the market about 3 hours to wake up from its zombified state and to do a 180, proceeding to rapidly sell off European debt following the realization that the Morgan Stanely thesis is nothing but a purely self-serving lie. The folks at Reuters IFR explain why MS completely botched this one up, and why Eurobanks are finally starting to wake up to the realization that the MF Global trade just may not be coming to town.

But first, some more from Morgan Stanley's attempt to urgently push clients into European paper:

Between now and 2012, the ECB's first 36 month tender allotment on December 21 will be a key event. We believe that the ECB's package of supportive measures significantly reduces the tail risk for euro area banks; and there could be a surprisingly large aggregate take-up at the December and February's tenders combined, which could put a significant dent in Spain's (and to a lesser extent Italy's) 2012 funding needs (see 3 yr LTRO: policy support just for banks or sovereigns too? , December 15).

While we wonder why the sudden urgency by MS to dump European paper before its fiscal year end (after all, like Jefferies, Morgan Stanley has repeatedly told everyone who cares to listen it has zero net European sovereign and bank exposure... As for gross, well that's a different story), we will leave that for another day. What is more relevant to the topic at hand is the refutation of the fundamental logic in the Morgan Stanley meme, which was incorrectly parroted by various C-grade media as a real deus ex, by IFR, as follows.

Banks are unlikely to come to the aid of debt-ridden eurozone countries, with many planning to ignore political pressure to use cheap money from the European Central Bank to fund purchases of sovereign bonds.


With eurozone governments needing to sell almost 80 billion euros of fresh debt in January alone and bond yields rising by the day, the stand-off between policymakers and banks could turn Europe's slow-burning debt crisis into a full-scale conflagration in the New Year. Burned by Greek losses, and under the scrutiny of shareholders, banks have slashed their exposure to weaker European sovereigns over recent months. Senior bankers say they will cut further, despite pressure to use newly available, longer-term ECB loans to buy government debt as part of an officially-sanctioned carry trade.

Here is the quote du jour which will be making the rounds around trading desks on Monday:

"When investors are constantly asking what you have on your books and the board is asking you to reduce your exposure, it doesn't really matter about the economics of the trade," said the treasurer of one of Europe's biggest banks. "Am I going to buy Italian bonds? No."

Bingo. And it gets worse, because when one of the biggest double downers, the head of UniCredit itself, a bank long known for dollar cost averaging in failed BTP bets, says Basta, it's time to get the hell out:

That view echoes comments from UniCredit chief executive Federico Ghizzoni, who this week told reporters at a banking conference that using ECB money to buy government debt "wouldn't be logical". The bank had traditionally been one of the biggest buyers of Italian government bonds, with almost 50 billion euros on its books.

So to all those who say the LTRO has magically been ushered as the European bailout mechanism, we counter with the following which promptly destroys any arguments to the contrary:

[R]ather than use money raised via the ECB to buy government bonds, bankers say that they are more likely to use the funds to pay off their own debts.


"I can't think for a moment why anyone would want to [buy eurozone government debt]," said the head of capital markets at one European bank that is also reducing its exposure to eurozone sovereign bonds. "Everyone is trying to protect capital. It's counter-intuitive. It would be digging a deeper hole for yourself." "Banks need this liquidity to get them through the wall of refinancing they are facing next year. That's where the money is going to go." Such attitudes will come as a major blow to European policymakers, who had been hoping banks would use ECB money to profit from the carry trade, helping governments in the process. "Each state can turn to its banks, which will have liquidity at their disposal," French President Nicolas Sarkozy said after last week's summit of leaders.

And there it is - despite hopes by the central planning authority that they always know what is best, the market has finally awoken to what we have long dubbed the #1 intractable mathematical problem in Europe - one of too much supply and not enough demand. This is, as we dubbed it, the European Death Spiral, although Debt Spiral works just as well - the issue is that there is €2.5 trillion in deleveraging coming due in the next few years, and by using an ECB facility to relever even further goes against the whole premise of said "deleveraging"

Everything else is smoke and mirrors.

And for those in doubt, we will get the answer one way or the other soon enough:

Bond sales in the New Year will be a big test of whether the strategy will work. In the first quarter alone, Italy plans to sell around 50 billion euros in fresh debt and Spain 21 billion euros. If Rome is unable to find buyers for its debt, that could jeopardise the payment of 28 billion euros of maturing debt on February 1 and a further 16 billion euros on March 1. Spain doesn't have any major redemptions in the first quarter.


"It's potentially going to be very very challenging," added one debt banker who is involved in the New Year sovereign debt sales.


"While steps are being taken, the crisis is far from over," added Mark Schofield, an analyst at Citigroup. "There is ample scope for rewidening as the market gets ahead of itself and as each bubble of optimism is pricked by reality. At the risk of sounding like a broken record, things will get worse before they get better."

Perhaps that explains why, now that its latest bluff has been called, Europe has fallen back to the trusty old standby: we have just learned that Euro ministers will hold debt crisis phone talks on Monday. And that, as everyone knows by now, is the cue to sell.


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Sun, 12/18/2011 - 13:27 | 1991697 Manthong
Manthong's picture

"debt crisis phone talks on Monday"

Why? I thought they lobbed an RPG bazooka into the ring fence to fix all that.

Sun, 12/18/2011 - 14:12 | 1991822 disabledvet
disabledvet's picture

Guess they got a financial "Irish car bomb" instead.

Sun, 12/18/2011 - 17:19 | 1992136 Hober Mallow
Hober Mallow's picture

Forget about China, they need help too!

China opens door to foreign investors


Sun, 12/18/2011 - 21:08 | 1992580 DeadFred
DeadFred's picture

Crisis phone talks lead to 3 PM rumors. They will need them. Cramer is quiet. Goldman is subdued. Not a lot of angst floating around the web about the week ahead. This equals a sell off in the works.

Mon, 12/19/2011 - 00:20 | 1993130 StychoKiller
StychoKiller's picture

And the love-fest for the $ continues...

Sun, 12/18/2011 - 13:36 | 1991703 GeneMarchbanks
GeneMarchbanks's picture

'It took the market about 3 hours to wake up from its zombified state and to do a 180, proceeding to rapidly sell off European debt following the realization that the Morgan Stanely thesis is nothing but a purely self-serving lie.'

Boy, that is one dumb 'market' if I ever saw one...

'That view echoes comments from UniCredit chief executive Federico Ghizzoni, who this week told reporters at a banking conference that using ECB money to buy government debt "wouldn't be logical".'

Logic is so old fashioned.

Sun, 12/18/2011 - 13:40 | 1991730 mac768
mac768's picture

"Common sense is not common in this times...."

Sun, 12/18/2011 - 14:44 | 1991904 Schmuck Raker
Schmuck Raker's picture

"This is why we elect smart politicians..." - A Great Man

Sun, 12/18/2011 - 15:35 | 1991992 d_senti
d_senti's picture

Use a money printing fiat institution to give money to bankrupt institutions in the hope that they will invest in other bankrupt institutions so as to sustain a morally bankrupt institution and preserve the money printing institution's power to print money.

Banker logic has saved us once again!

Sun, 12/18/2011 - 17:14 | 1992128 disabledvet
disabledvet's picture

wait 'till you see what the government has in store for ya.

Sun, 12/18/2011 - 13:39 | 1991723 mac768
mac768's picture

100% sure, there is "no doubt (lie)" about the facts ...

short the MS

Sun, 12/18/2011 - 13:40 | 1991732 GeneMarchbanks
Sun, 12/18/2011 - 13:57 | 1991782 whatsinaname
whatsinaname's picture

so is the 2 month tax extension in the US going to delay the inevitable ?

And how desperate are US banks for some relief aka (the official) QE3 ?

Sun, 12/18/2011 - 14:14 | 1991828 disabledvet
disabledvet's picture

Which ones? The big ones with no money or the middle market dudes "raking in the dough."

Sun, 12/18/2011 - 13:39 | 1991727 ISEEIT
ISEEIT's picture

Governance in crisis?

In real people speak: The lies just aren't 'doing it' these days.


Sun, 12/18/2011 - 13:43 | 1991740 Irish66
Irish66's picture

Another bank must have fallen so we can only make phone calls. Travel is restricted due to budget crunch.


Sun, 12/18/2011 - 13:48 | 1991755 Manthong
Manthong's picture

Except if you are a technocrat.

Their T&E tab alone could probably bail out Greece.

Sun, 12/18/2011 - 14:43 | 1991902 MsCreant
MsCreant's picture

Imagine if we saw them huddled in small hotel rooms, eating cheap takeout, wearing the same suits they wore last week, being all Austere an stuff. Refusing entertainment, flying economy class, for the sake of the people. (I gotta stop it, I'm killing myself laughing here).

Sun, 12/18/2011 - 14:56 | 1991920 falak pema
falak pema's picture

Sounds like the good old days, when we were young and a glass of bojolais and a swirling skirt in a gust of wind was all you needed to feel on the right side of time line, like jumping toast on bed springs, huddled, befuddled by sweet symphony; not skullduggery deadened in corporate humdrum.

Sun, 12/18/2011 - 15:26 | 1991971 Manthong
Manthong's picture

Like back in the good old days..

Sun, 12/18/2011 - 15:32 | 1991985 falak pema
falak pema's picture

+1 enjoyed it.

Sun, 12/18/2011 - 13:45 | 1991747 PulauHantu29
PulauHantu29's picture

"House prices always go up" is what all this Eurzone BS Spin reminds me of.

Sun, 12/18/2011 - 13:48 | 1991757 GeneMarchbanks
GeneMarchbanks's picture

Not really though cause that still applies if you're in Vancouver...

Sun, 12/18/2011 - 17:28 | 1992147 gilliganis
gilliganis's picture

...or Australia


Sun, 12/18/2011 - 13:49 | 1991760 falak pema
falak pema's picture

"No, No, No, NON, NOOON", Says Noyer of Noyer and Noyeroia of Ze Bank of THE FRANCE. "We can do both deleveraging and releveraging. You don't understand the french language. When we invented the Knight Templars, our Saint Bernard said; to do God's work, he would be BOTH armed knight AND priest. And don't tell me its against canon law and what Jesus said..."render unto Caesar...". Saint Bernard said it was ok, so it's oK! Knight Templars can kill in Holy LAnd to do God's work and also be priest guarding the Holy Sepulcher."

Voila, its a thousand year old formula. Its older than the Coca Cola formula. And its like what Corzine learnt, when at Univ. of Chicago business school  he came and spent a summer picking grapes at Clos Vougeot. 

We taught him that re-hypothecation was NOT incompatible with de-hypothecation. You can do both. It all a question of flexibility of the wrist when you break ze financial egg, you do one way in springue...and ze other way in how to you say? ze fall? yes ze full foul fall. 

There, it is a special way of making ze grapes of Clos Vougeot, the grapes that never grow sour, how do you say, yes, ze grapes of wrath! voila!

Now go be a good boy and tell ze Ben from the Fed, we are pleased to buy his lousy dollar out of pure generosity. You know we must turn from time to time, how do you say? yes, ze other cheek! voila! Now you know the french way to make pommes frites.

Sun, 12/18/2011 - 14:18 | 1991838 disabledvet
disabledvet's picture

"as long as you're shoving other people's money in your own pocket it's all good."

Sun, 12/18/2011 - 14:28 | 1991869 falak pema
falak pema's picture

voila, you have ze flexible wrist...bravo!

Sun, 12/18/2011 - 14:48 | 1991907 Kayman
Kayman's picture

falak pema

Ah, oui, the French.

Non, monsieur, it is you who should be thanking me, for allowing you to save my life.

No greater example of French arrogance than DeGaulle.

Sun, 12/18/2011 - 14:54 | 1991913 earleflorida
earleflorida's picture

tis, not god's work, 'nor' hand, that serves up the cold dish?

quite hitherto,... too running the gambit [futility], ala, of centrifugal force on an infinite fulcrum plane, only to realize, that energy [$$$] consumed was all in vain, for gravity knows no other logic than the laws of the [financial] universe - inflexible to gaming any such system therein [?] - without total collapse within.

Sun, 12/18/2011 - 15:01 | 1991933 falak pema
falak pema's picture

You've perfectly described the feeling of neutrinos zipping along in the Hadron collidor underneath Geneva and France...wowieee, I feel I'm in that shute.

Sun, 12/18/2011 - 13:49 | 1991762 Rainman
Rainman's picture

Don't worry, someone whose first and last name starts with " B " will buy the bonds.  Hint : " We have many tools at our disposal ".

Sun, 12/18/2011 - 13:57 | 1991781 ISEEIT
ISEEIT's picture

Sure. But when? Timelines matter as much as do events.

Sun, 12/18/2011 - 14:00 | 1991789 Seasmoke
Seasmoke's picture


Sun, 12/18/2011 - 14:11 | 1991812 Rainman
Rainman's picture

You silly rabbit ! Ben and Barry are both entering their last year as members of High Command. Expect many mid-court three point shots from both of them !

Sun, 12/18/2011 - 14:45 | 1991906 MsCreant
MsCreant's picture

Tools, members, ya gotta stop.

Sun, 12/18/2011 - 15:03 | 1991937 gmrpeabody
gmrpeabody's picture

Looks like somebody is spiking the eggnog a bit early this season... too funny!

Sun, 12/18/2011 - 14:45 | 1991905 MsCreant
MsCreant's picture

So Ben and Barry are real tools. When do we dispose of them?

Sun, 12/18/2011 - 13:55 | 1991774 williambanzai7
williambanzai7's picture


Sun, 12/18/2011 - 13:59 | 1991785 GeneMarchbanks
GeneMarchbanks's picture

"Drivin' that train, high on cocaine"

Berlusconi was right about them traders...


Sun, 12/18/2011 - 13:56 | 1991778 ebworthen
ebworthen's picture

Bullish for Gold and Silver, and U.S. 10 Year at 1.5%

Sun, 12/18/2011 - 14:12 | 1991821 ISEEIT
ISEEIT's picture

Now THAT is a bubble to buy at the top! ( not, because when the rate gets that low, the game is already over, the bond will be for all intents and purposes worthless) May as well flip a coin though. The one thing this ponzi does well is maintaining instability. Gotta give them a big thumbs up on that one. A job being well done.

Clap, clap.

Sun, 12/18/2011 - 14:20 | 1991846 disabledvet
disabledvet's picture

"how is one to know whether an...irrational exuberance has taken hold?" Alan Greenspan.

Sun, 12/18/2011 - 14:43 | 1991903 economics1996
economics1996's picture

I like guns, ammo, food, water.

Sun, 12/18/2011 - 16:46 | 1992088 Dr Paul Krugman
Dr Paul Krugman's picture

I like Tchaikovsky, dry martinis, the beach, and soap.  But hey, I guess the apocolypse is right around the corner!

Sun, 12/18/2011 - 17:19 | 1992134 disabledvet
disabledvet's picture

I'm a fan of "The Lion in Winter" myself.

Sun, 12/18/2011 - 19:24 | 1992319 Duffminster
Duffminster's picture

If anyone believes that the involved hiearcy (the international network) will allow an unstoppable deflationary depression and a failure of hundreds of trillions in deratives through a massive default chain without first running all the printing presses 24x7 is not thinking clearly.

Depression and hyperdeflation are not politically viable either among those who seek to dominate or those who are currently dominated.   If nations default on their bonds, especially the US, the associated currenices will be completely worthless and nearly over night.

Running the printing presses will give more time for the international network and the super rich to get possession of as much gold and silver as possible while preventing an exponential spread of the Arab Sring and Occupy Everywhere to the point where the natives are showing up with more than protest signs.

Merkel and the Fed say a few remarks and then Draghi chimes in and all the sudden all the idiot funds think that they won't be running the printing press or it will slow.  No way.  Its already running 24x7 but, at least at the Fed, you haven't seen anything yet.  

The longer Ben waits, the more he will have to print later.  We are dealing with full on insolvency and the only possible politically viable solution is to turn up the burners at the press.

Its that or You'll Ron Paul or Newt Gingrich as President, the Fed being shut down, and when that happens, Wall Street will be mostly out of business in my opinion and it will set the stage for a new revolution that will make the Tea Party and Occupy look like a child's depiction of an innocent path to freedom.

Just a thought.


Sun, 12/18/2011 - 19:24 | 1992320 Duffminster
Duffminster's picture

If anyone believes that the involved hiearcy (the international network) will allow an unstoppable deflationary depression and a failure of hundreds of trillions in deratives through a massive default chain without first running all the printing presses 24x7 is not thinking clearly.

Depression and hyperdeflation are not politically viable either among those who seek to dominate or those who are currently dominated.   If nations default on their bonds, especially the US, the associated currenices will be completely worthless and nearly over night.

Running the printing presses will give more time for the international network and the super rich to get possession of as much gold and silver as possible while preventing an exponential spread of the Arab Sring and Occupy Everywhere to the point where the natives are showing up with more than protest signs.

Merkel and the Fed say a few remarks and then Draghi chimes in and all the sudden all the idiot funds think that they won't be running the printing press or it will slow.  No way.  Its already running 24x7 but, at least at the Fed, you haven't seen anything yet.  

The longer Ben waits, the more he will have to print later.  We are dealing with full on insolvency and the only possible politically viable solution is to turn up the burners at the press.

Its that or You'll Ron Paul or Newt Gingrich as President, the Fed being shut down, and when that happens, Wall Street will be mostly out of business in my opinion and it will set the stage for a new revolution that will make the Tea Party and Occupy look like a child's depiction of an innocent path to freedom.

Just a thought.


Sun, 12/18/2011 - 14:57 | 1991923 Duffminster
Duffminster's picture

I agree ebworthen but mainstream is only publishing the spin about the majority of economists conensus that gold will be down in Q1.  Good contrarian indicator?

Contrarian thinking indicates that when a boat load of Kensyian economists think that gold is going down, chances are its going up and the capitulation by the weak longs who have no conviction to the fundamentals, the purely hedge fund types like Paulson, Cramer, Gartner and the like) who appear to me to primarily use gold to try to generate speculative profits during periods of economic instability is an extremely healthy sign as increasing demand for actual physical gold as collateral for all the hypothecation and rehypothecation taking place is likely to be a primary catalyst to the markets. For those of us like me who see gold as honest money that keeps governments honest about how much they can spend, the long term value of gold is that it is actually real money.  Lease rates were dropped to next to nothing and central banks are liquidating like crazy with the likelyhood of a major bank being stealthly bailed last week by the Fed, I'd say it boils down to this: "in the end, he or she who has the physical gold firmly in their own vaults will be the victor." To me, it looks China knows this and much of the old world too.  Its just the desperate Central Banks using every trick (per the GATA playbook) to control perceptions but those who know the end game use every raid to accumulate more physical gold and silver in my opinion.  Any of top 20 billionaires in the world could single handidly purchase most of the available physical bullion in the world and given the degree of leverage that silver has on gold, I wouldn't doubt that more than a few are considering it.

There are a few great articles I read today that I think anyone serious about considering gold and silver for long term wealth preservation might also find informative. Here are the titles (you can easily find them through your favorite search engine. Mine is still Google).

15 Brilliant Insights From Hedge Fund Superstar Kyle Bass
"Charlatan Exposed: Negative Gold Lease Rates" - AUG Mentor
Pathogenesis of Central Bank Ruin - Gold Seek
"Citi Predicts Gold At $3400 In "The Next Two Years", Potential For Move As High As $6000"
Analyst Sees Strong Oil Prices, $2,000 Gold Ahead

My personal view of things are quite a bit different from those of this article. I think about this subject a lot.

Despite the jawboning by Ben at the Fed and Draghi at the ECB about no immediate easing, the fact remains that they are the current sovereign debt “market” if you can call it that.

It is a vacuous market and in an election year especially, with the prospect of having “End the Fed” candidates running the country in 2013 like Gingrich or Paul, the likelihood that more overt QE will not be catalyzed by the clear and present danger of a downgrade driven, bank failure catalyst, resulting in lower over all equities (and resulting lower quality rehypothecation collateral) is next to zero in my opinion.

The fact that the BRICs are seeing substantial GDP growth contraction, that austerity and completely un-repayable toxic debt backed currencies are under pressure and that the so called “super summit” in the EU basically resulted in a blank piece of paper that has changed Nothing, resulting in a contraction in EU growth and with negative real interest rates in the UK and US and likely elsewhere, gold remains the only money (not a fiat
Currency) and is not encumbered and backed only by toxic debt. As such, the Fed and ECB will have to apply shock and awe levels of QE just to keep the S&P from falling to 800 and putting Gingrich in office, which results in a deeply weakened Fed and likely a long range hyper deflationary depression and global social revolution and the end of Central and TBTF controlled governments.

In my opinion the downgrades by Fitch on eight global trading universal banks this evening is indicative of why jaw boning needs to be pro-QE and not
Anti-QE as a strong position on QE will keep the required collateral up in dollar valued terms where as the Merkel approach will only trigger a lowering of collateral quality in the global rehypothecation derivatives chain where counterparty solvency is questionable.

Anyway, just what I think.



Sun, 12/18/2011 - 16:56 | 1992108 Dr Paul Krugman
Dr Paul Krugman's picture

Traders who got their funds frozen in the MF Global debacle aren't going to turn into gold bugs just because of the bankrupcy.  They most likely will realize gold does not produce anything and is merely speculative, which you were correct about for Paulson etc.  This should be bearish for the price of gold.

Sun, 12/18/2011 - 17:23 | 1992141 disabledvet
disabledvet's picture

if gold can be stolen legally then whether it's worth billions is irrelevant. "it's no longer yours." needless to say the government does not care and as such "i'd be bailing on GLD" like it's the most worthless asset on the planet. the shocker has been the collapse in yields in the Treasury complex. this has nothing to do with the Fed's "twist" and may indeed show...yet again that "Ben Beranke has been a consistent optimist as it relates to recovery throughout the ordeal." A minor flaw of course in an otherwise perfect diamond.

Sun, 12/18/2011 - 17:28 | 1992148 Dr Paul Krugman
Dr Paul Krugman's picture

You bring attention to a fair point:  Bernanke and the Fed have performed well during the downturn in the economy.  He has the tools to play politics.  But my problem with this is we could have resolved all of this by now with bigger stimuluses.  Still, the Fed is performing quite well.

Sun, 12/18/2011 - 17:51 | 1992189 ebworthen
ebworthen's picture

Pretty good sarcasm there "Dr. Krugman".

Sun, 12/18/2011 - 17:59 | 1992199 Dr Paul Krugman
Dr Paul Krugman's picture

The Fed has maintained price stability with monetary policy while the U.S. Treasury sells USTs at a high price.  Times are good for the U.S. government.  No sarcasm.

But more could be done and I expect Bernanke to help the EU soon.  Having all Central Banks use the Fed's lending rate was a good start, and now action needs to happen.

Sun, 12/18/2011 - 18:09 | 1992217 ebworthen
ebworthen's picture

If the U.S. weren't $15 Trillion in debt and propping up insolvent European banks with shadow purchases - and individual rights to property and liberty had not been usurped - you might have a point.


Sun, 12/18/2011 - 20:38 | 1992438 Jendrzejczyk
Jendrzejczyk's picture

This would all be a fun Socratic debate if it weren't so real wouldn't it?

Sun, 12/18/2011 - 18:29 | 1992237 Questan1913
Questan1913's picture

"Pretty good sarcasm there Dr. Krugman". 

Except it's not sarcasm.

Sun, 12/18/2011 - 18:30 | 1992238 Papasmurf
Papasmurf's picture

He has performed miserably.  The crisis of confidence continues because massive fraud was not punished and continues unpunished.  Until financial crooks are jailed, the markets and economy will not recover.

Sun, 12/18/2011 - 14:02 | 1991791 Seasmoke
Seasmoke's picture

when things get really bad, ITS OK TO LIE

Sun, 12/18/2011 - 14:17 | 1991837 oogs66
oogs66's picture

They realized the trade will bring all the banks down !

Sun, 12/18/2011 - 14:24 | 1991860 Snakeeyes
Snakeeyes's picture


While our Treasury rates are low,, the YC slope isn;'t signaling reecession or even the case for more QE. That is, if you believe the yield curve. This is a scenario in bond markets that we have never seen before.  QE3? The Message From The Yield Curve is No – “But these aren’t normal times, Cato”


Sun, 12/18/2011 - 17:25 | 1992145 disabledvet
disabledvet's picture

if King Dollar suddenly spikes higher it's "good bye recovery" cuz the Fed could be forced to raise rates to "keep up with the sudden explosion in value creation from the energy super-state called the USA."

Sun, 12/18/2011 - 14:34 | 1991880 MsCreant
MsCreant's picture

Jessie and Denninger are carrying a story about MF Global trustees taking ALLOCATED gold out of vaults (customer owned gold, as in serial numbers assigned) to pay off MF Global debts. If true, there is no such thing as private property the way I know it, any more. Trust no one with your stuff folks.

Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global

Private Property Now Subject to Seizure

Sun, 12/18/2011 - 14:41 | 1991895 GeneMarchbanks
GeneMarchbanks's picture

'If true, there is no such thing as private property the way I know it, any more.'

Good news... there is such a 'thing' as private property. Bad news... it's all in your head.

'Trust no one with your stuff folks.'

Soon we'll know who owns what-correction- who owns who.

Sun, 12/18/2011 - 17:06 | 1992120 Market Efficien...
Market Efficiency Romantic's picture

it perfectly falls together now.

1) The FED behind closed doors informs its special forces aka JPM, HSBC et al (artificially supressing the true market price via monstrous short positions) that it will print like crazy in 2012 and that gold will probably skyrocket in dollar terms.

2) Glencore goes public (typical at-the-height-of-the-hype-IPO) to cash in before PM markets soon act completely unplausible and untradable. 

3) Exchanges increase commodity margins to take some leverage out of the market and in logical consequence devalue commodities somewhat. Fears of commodity price correction and old boys' forced liquidation further lower commodity prices.

4) Rating agencies make a first shot at MFG to weaken it, JPM quickly follows to execute the weakened dinosaur.

5) JPM as main creditor ensures that a trusted third person takes over the reigns at MFG as trustee. 

6) The trustee fights against the 99% of entities he is supposed to represent and makes sure JPM is served first and even provided assets of clients who are no longer specially protected but now become (junior) creditors. The payout is not soon to be worthless cash, it is exactly the PMs in which JPM has legendary short positions.

What a nice coincidence (for JPM aka the lucky .1% of those having a business relation with MFG)

If all goes well and nobody is hurt at JPM in the aftermath, they promise to give Obama a second chance, ehm term

Nice side effect, the banking elite has a scapegoat to divert the attention to. Sure, fraudulent bankers should go to prison is what they will shout, as Corzine walks the perp walk and the masses are satisfied and calmed.

Sun, 12/18/2011 - 17:27 | 1992146 disabledvet
disabledvet's picture

again "we have an ARMY of mind martians being deployed as i write."

Sun, 12/18/2011 - 17:43 | 1992150 ebworthen
ebworthen's picture

Good links MsCreant, thanks.

Yup, you don't own nothin' folks.

The Supine Court KELO decision was an obvious signal of the loss of property rights.

The usurpation of bondholder rights of GM and WaMu in the 2008 crisis, with property being given to J.P. Morgue and Co. was another harbinger.

I doubt money in FDIC accounts is safe in the event of an "emergency".

Sun, 12/18/2011 - 14:38 | 1991888 holdbuysell
holdbuysell's picture

This reminds me of the card game, 'Old Maid'.
Nobody wants the debt and everyone who has it is trying to get rid of it.

Sun, 12/18/2011 - 14:43 | 1991900 ISEEIT
ISEEIT's picture

It's not about economics. Politics trump economics. It is about the current power structure and their (in) ability to remove key dominoes.

We are watching an absurd, discusting, perverted, assine failure of the dominate model.

The lies of yesterday have created the reality of today.

The bill has come due, the can has hit the wall.

And we have yesteryears baffoons at the helm?

So the same asshats that delivered us to this dark place now stand naked, claiming to offer 'hope & change'?


Sun, 12/18/2011 - 17:03 | 1992119 Dr Paul Krugman
Dr Paul Krugman's picture

Politics does trump economics in the short run, but the dominate model does show how firms can perform to help achieve economic growth.  When politics has gotten in the way is when there has not been enough done to get out of this depression.  There has been too much debate and not enough action.

Sun, 12/18/2011 - 17:28 | 1992151 Market Efficien...
Market Efficiency Romantic's picture

Last time, when quick action was taken, the effects on the real economy were not so convinving. Sure, the liquidity freeze was broken up, but the bazooka spending did not channel and multiply into the real economy. On behalf of those burdened with the debt of the action, it may seem rather expensive. Further, we have seen the disciplinary effects of government/central bank spending. It makes the structural situation even worse. 

Sure, the situation requires political action and political redesigning of economic guidelines. But the amounts required to silence the Euro crisis are by no means justified by growth expectations of the real economy. Fossil energy is dying (with wind and solar slowly replacing it, similarly powerful as energy source but not equally valuable as an ingredient of most products we consume) and increasingly short-termed societal thinking is hampering technological innovation (e.g. exit plans and mee-too strategies at VC firms, regulation, rigor before relevance and shortened PhD cycles in science).

So, the expectactions (originating from the flawed constant growth paradigm in economics) to justify deficit spending are just not given. The only thing it does is extend the lost game into overtime by shifting what is left from the majority to the elite. That way, the ruling body experiences growth a little longer than the rest of us. 

Think about it this way: As with most other species, shortly before extinction, when no further resources are left to consume, canibalism emerges and with lots of cruelty secures the survival of the species just another nano second in historical perspective.

Sun, 12/18/2011 - 17:44 | 1992168 Dr Paul Krugman
Dr Paul Krugman's picture

Well this is exactly my point:  By funding technology and firms in various sectors we will increase production and growth. 

Any firm can participate.  I am not sure where you get the whole "elite" thing from.  Small businesses are the backbone of the U.S., and they need loans just as much as 3M, etc, and when the economy is stimulated the businesses are able to meet payroll and add workers, because there is added growth in the system.

And technology will increase production, and increase resources, just like it always has, if that be for food production, or anything else.

Sun, 12/18/2011 - 18:00 | 1992204 Market Efficien...
Market Efficiency Romantic's picture

The traditional channel of providing SMEs with credit has proven to be disfunctional, though. It will be even more disfunctional in a deleveraging cycle. To banks, paying down their own debt or providing debt to less regulated emerging economies is more lucrative than lending to US SMEs.

Structural lending increase to SMEs would need to come directly from the FED to the SMEs and to achieve real innovation to the sources of incubation, the idea stage at universities. 

Just broadly propped up SMEs keep the system running, but such measures will be ineffective as they provide wrong incentives to offer more unneeded services until killed by the market.

If I look at the true innovation potential of the US economy, I get the sense too much of those flawed incentives are already in the system, slowly being eaten up by cheaper foreign competitors. Only true innovation is sustainable, for SMEs and the society as a whole.

BTW, the 'elite' thing appears pretty obvious. State-aided incentives for excessive risk-taking (n-x-leverage), further incentives for creating asynchronous risk structures, all paid for by the rest. Add effective taxation and most importantly differentiate between the real effects of inflation on the rich, the evaporating middle class and the poor; The cost of living for the rich is a fraction of the income, so inflation does not hurt, the cost of living for the poor is close to 100% and inflation is killing.

Sun, 12/18/2011 - 18:16 | 1992223 Market Efficien...
Market Efficiency Romantic's picture

In more economic terms, broad lending leads to growth, as you mention. It increases production, but it does not necessarily affect the sustainable driver of growth - technological innovation. Without true innovation, production lowers again as you stop continuous lending.

Broad lending facilities work like subsidies and are not subject to selection by the superior market mechanism. The ineffectiveness of a subsidy only transcribes into sustainable debt instead of sustainable growth.


Sun, 12/18/2011 - 18:29 | 1992236 Market Efficien...
Market Efficiency Romantic's picture

You cannot truely ignore how broken the system is and doubt the 'elite' thing?! The official and nicely spun version of the zero-IR-policy is, we kickstart the system. Effective market rates for SMEs and individuals are far from zero-IR. So, while the public may believe it is the targeted recipient of cheap credit, the only ones benefitting are the gatekeeper entities between the FED and the rest, banks. 

With a needed deleveraging cycle, credit spreads will even widen. 

So, how exactly do you think it would work to provide companies with credit, if that was assumed to be beneficiary to society.

Sun, 12/18/2011 - 19:14 | 1992291 falak pema
falak pema's picture

By using a Nobel's avatar does it make you more intelligent and truly Nobel class?  Or are you real like the Mona Lisa?

There is a guy here called IQ 145, he predicted at beginning during the Fuku crisis, that reactor core melt was impossible with this PW(?) technology... I think that Jody Foster, Madonna and Sharon Stone are touted as high IQ people. But it shows in their personalities. Just saying... we have some brilliant avatars here. But we never know who is behind the mask.

So tell me how we can get all that gold stashed in Paraguay back into the market; or is that irrelevant?

And those 25 T stashed by multi corporates and Oligarchs in tax havens. Unless of course its irrelevant as well to the current crisis. And does the melt down in Eurozone, City and WS have a Keyensian solution, simple formula like saying Eureka?

Maybe we should use a new model where private bank  debt is nationalised and then fed to local population to hold in form of government bonds. Instead of selling them on ponzi manipulated, illiquid market comprising of US PDs/HFs. Then Reset and two tier Euro zone etc. etc. etc. And regulate the market, prohibiting naked derivative plays, Tobin taxing, deleveraging debt and unwinding shadow banking while we invest using the supposedly lost and stashed Koumintang's ancient gold horded  in hidden places. While we are at it, why not bring all guns to bear on the problem including the hidden guns of the Bretton Woods cabal! (Its tongue in cheek as unverified rumour).

That would make the job so much easier for the Nobels...!


Sun, 12/18/2011 - 21:13 | 1992498 Jendrzejczyk
Jendrzejczyk's picture

I'm a small businessman and "you" are doing NOTHING to help me.

The economy sucks so bad that I have to lay workers off. Guess what my unemployment insurance rates are now for the employees I have left.

Guess what the interest rates on my credit cards are now that CONgress has "protected" me from the big bad banks.

Guess how much my health insurance premiums have risen since the government "fixed" healthcare.

I don't want you to "help" me anymore.

Just get the FUCK out of my life.

Sun, 12/18/2011 - 17:59 | 1992200 ISEEIT
ISEEIT's picture

Okay dear Dr.

I'm bored and so will take the bait.

Bürgerliche Maulfürze.

You elitist fucktards truly do need to go to hell. Do not pass go, do not collect $200 in worthless crap federal reserve notes.

Just F.O. & D.


Sun, 12/18/2011 - 18:57 | 1992267 MsCreant
MsCreant's picture

If I were Tyler or Marla, I might be tempted to march out an effigy sock puppet to draw the ire of the posters, just for fun, and to see what happens to certain arguments as they are presented. 

I have been tempted to have fun and let one of em really have it but then the rest of the club might think I'm really fighting. 

Hey, Krugman, How did it feel to win the Nobel? How did it feel when Obama got it too? 

When you put it like that, can't you see why he would have to fight tooth and nail to uphold the institutional order, no matter how absurd it is to do so? To do otherwise is to admit your life's work is a sham!

Sun, 12/18/2011 - 20:57 | 1992528 Jendrzejczyk
Jendrzejczyk's picture

Did I just get punked again Missy?

Sun, 12/18/2011 - 22:25 | 1992680 MsCreant
MsCreant's picture

Venting is good. So is telling the truth. Those fuckers don't know what pain is or they could not do what they are doing. That is why we call the banksta/pol class, sociopaths. They are not connected to the body social. That body will reject them like any body should reject a disease or parasite. Time to pump up a fever. But first, the body has to, in its way, understand what is happening and how to cure it. DNA splits off into individual RNA which go around the body leaving messages about various jobs that need to get done. I think that is the stage we are still at. 

Venting is good. Getting punked is theraputic. ;-)

Sun, 12/18/2011 - 14:56 | 1991908 Monetative Easing
Monetative Easing's picture

There is no way capital and funding starved banks are going to put on a carry trade in this environment with the massive supply coming. 

The problem with QE in this instance is that the issuers (GIIPS or PIIGS or whatever they are called these days) are facing solvency issues. 

The US did QE with treasuries and MBS, which have a full taxing, spending and printing capabilities supporting them.  Its obvious that the risk of owning these securities is monetization, however investors will assured of getting their principal back at maturity, even if its in the form of worthless fiat.    That is not the case here - unless or until the EU issues joint-and-several eurobonds or the ECB buys debt outright.

There is no doubt that this will happen as investor confidence will not return until someone with deep pockets (i.e. the ECB) steps up.  The risk is that by they time they do this, the damage is done with several bank failures and an EMU that is in total disarray.  The political cracks in the EU are already showing amongst Germany, France, the UK and several of the smaller haves and have-nots.  This will worsen in fairly short order so unless they relent on Eurobonds or the ECB blinks there will be no incentives for banks to take the risk.   They may already be dead but as we have seen they can stumble around for a long time, zombie style as long as they don't dig themselves deeper.


Sun, 12/18/2011 - 14:50 | 1991911 TraderMark
TraderMark's picture

Here is a gem - unless you look at central bank footnotes you'd never know German central bank has lent ECB 500B Euros.  The collateral is junk Club Med bonds.  Wonder if the German people realize this is happening

Sun, 12/18/2011 - 17:09 | 1992123 PontifexMaximus
PontifexMaximus's picture

This is an old story. Funny that, rather beängstigend, that no one has come across it yet. I'm looking forward seeing the BuBa being able to dump all that stuff to the IMF via funding of said, in order to avoid counterparty risk such as Greek National Bank et al.

Sun, 12/18/2011 - 17:30 | 1992157 disabledvet
disabledvet's picture

Indeed.."at some point they will realize even that wasn't enough to save a single German Bank" as well.

Sun, 12/18/2011 - 17:45 | 1992183 Market Efficien...
Market Efficiency Romantic's picture

That's because the Bundesbank does not care about the collateral, it cares about the ECB owing it. Silent takeover would be a better term. If the equity voting rights don't guarantee the CEO follows your strategy proposal, become a major creditor. The Bundesbank just circumvents the political resistance by the majority on the ECB bord, representing the broke remainder of Europe.

Sun, 12/18/2011 - 15:09 | 1991947 GerritB
GerritB's picture

The Dutch finance minister said they still need to work out some details how much everyone needs to pay to the IMF. Thats prob why they are meeting.

Sun, 12/18/2011 - 17:31 | 1992159 disabledvet
disabledvet's picture

they need to pay the IMF first? how does that work? that doesn't sound like a bailout to me.

Sun, 12/18/2011 - 15:10 | 1991949 Caviar Emptor
Caviar Emptor's picture

MF Global: the curtain was pulled back and the world once again was forced to behold the absolute shocking insanity of unfettered banksterism in the raw: MF global was essentially engaging in a make-it-up-as-you-go-along money-orgy where the line between money and empty promises is mighty close to the line. In that existential angst moment it was clear that the world's financial system is held up by thread, old scotch tape and spit. 

I think we're only in the denial phase of the reaction. But that will change. We who read ZH are ahead of the rest. But once again the world is being confronted with a stark realization and the sick feeling of an accident waiting to happen. And you can be sure that accident is on the way. 

During the ensuing months the focus will be on where in the fracking world is your money safe. By safe I mean realistically accessible on demand in its native form without discount or strings. When taking a closer look people will not like what they see. 

Sun, 12/18/2011 - 17:34 | 1992163 disabledvet
disabledvet's picture

these are the sell side phuckers who phuck the buy side "caviar." literally "destroying Wall Street because you never liked those people." HELL TO PAY.

Sun, 12/18/2011 - 15:52 | 1992008 Atomizer
Atomizer's picture

I wonder how the powerful elite's feel when the lemmings realize they're going to get ass raped again? The creation of another terrorist threat to feed the elite welfare state is a model only the blogosphere can laugh down on.

WB7: Depict a unemployed individual rounding up monies vs. too big to fail fleecing monies thru taxpayer intervention. One will go to jail. The other will steal taxpayers monies to preserve employment figures & funnel more debt on corporate books to maintain the status quo.


Sun, 12/18/2011 - 17:35 | 1992166 disabledvet
disabledvet's picture

they're not "too big to fail" if they fail. Hmmm. I wonder what how well they've been grooming their soon to be very needy relationship with the government is going?

Sun, 12/18/2011 - 16:14 | 1992040 steveo
steveo's picture

Great article find, showing Barry's wife's seperate travel nearly doubling cost s of "vacation" to over $4M on the taxpayers back.

Vacation?  You are the fn president, get to fn work.

Sun, 12/18/2011 - 16:04 | 1992014 youngandhealthy
youngandhealthy's picture

MF Corzine is a crook. He used clients money illegaly and should immediatley go to jail.


1) Not started yet so Tyler is out on thin ice

2) 2 yr Italian Bonds with 6.5% v.s. ECB 1.5% funding cost is a no brainer and now also with no default-risk is a no brainer.

Pair that with extended colaterals (loans, MBS...) and we have a European version of QE. Whatever you will name it.

Tyler is good, but here he is running like a puppet of the US investement banks strategy and thesis.

Tyler this one will work because 4% carry is to a big of a temptation for Euro banks as well as others.

Sun, 12/18/2011 - 16:06 | 1992029 Global Hunter
Global Hunter's picture

So global banks are going to borrow more from central banks to buy the debt of grossly indebted Euro nations for the 5% carry while the rest of the economy (outside of banking and government) falls further and further into recession and depression.  

The central banks in this case the ECB takes more and more crap collateral like MBS and loans out at 1.5% "funding cost" as you call it.

I wonder what that MBS is marked at in the banks and central banks books...I digress, what was your point again?

Sun, 12/18/2011 - 16:21 | 1992045 youngandhealthy
youngandhealthy's picture

Global hunter...that has allready been done  on a (much more) massive scale in the United states of America than the ECB without any attempts to steralize it.

The politcal side of matter in the US is not a yota better than the euopean one with the two "chambers" in the US not even able to extend current budget with more than 2 months at the time. Democratic deficit in the US is as big as it is in the EU.

FEd has (if I dont remeber wrong) extended their balance sheet with more than $1TN of MBSs since 2009. ECB has currently bought $250Bn of Sovs so far.

All this is reflected in the EUR/USD. If it were as bad as you imply in the EU....shit the exchange rate would probably be more like 0.75 to the Dollar than the current 1.30

This is why the carry trade will work. Its a relative game.



Sun, 12/18/2011 - 17:38 | 1992170 disabledvet
disabledvet's picture

you're assuming this is going to happen. it is not going to happen. Germany will not allow it.

Sun, 12/18/2011 - 18:22 | 1992229 youngandhealthy
youngandhealthy's picture

It will happen on your homework!

Sun, 12/18/2011 - 16:02 | 1992022 crooklyncat
crooklyncat's picture


This lawsuit was filed the other day and IT EXPLAINS EVERYTHING!!!!!! PLEASE READ AND SPREAD FAR AND WIDE.



Sun, 12/18/2011 - 17:40 | 1992176 disabledvet
disabledvet's picture

the Mind Martians have been alerted to your presence. Beware!

Sun, 12/18/2011 - 18:31 | 1992235 falak pema
falak pema's picture

crooklyncat : Some read, Is this now a public lawsuit that will be picked up by MSM? I get this message from this DW blog. Wow, this beats the fellowship of the RIng in dark malignancy, I don't know if this is a huge scam or if its reality. Anyway this guy Fulford relates an incredible tale.

Sun, 12/18/2011 - 19:20 | 1992310 GMadScientist
GMadScientist's picture

Guess you picked the wrong week to stop sniffin' glue...

Sun, 12/18/2011 - 19:57 | 1992344 Goldilocks
Goldilocks's picture

Crap. Theater of the absurd.

Kerry Cassidy: I’ve seen the future & you’re going to be fine. (bless her heart)

As far as I’m concerned, David Wilcock outed himself as a spook (or an idiot – giving him the benefit of doubt). (&) By backing that David shit, Kerry Cassidy’s reputation took a nose dive too. Benjamin Fulford managed to save face though (more or less).

That whole story (David Wilcock’s version of it) is so full of shit… it baffles the imagination. Too much!!!

There are certain truths within that context, but for the most part, what David says & writes makes me want to puke.

I'm not thrilled giving these links (not ZH material), but if ya’ll are interested in some drama…
(in order that they should(?) be listened to)(Strange Universe with Dr Sean David Morton, was a descent show)


Benjamin Fulford on Strange Universe Radio with Sean David Morton - December 15th_ 2011 – YouTube

P.S. There appears to be a valid lawsuit (huge) in question here (that could be ZH material), distorted by David Wilcock, clarified by Dr Sean David Morton & Benjamin Fulford.

Sun, 12/18/2011 - 20:14 | 1992397 falak pema
falak pema's picture

Goldilocks : 

I'm listening NOW  to the Fulford interview of DEC 15 with David Morton, right now. It confirms the gist of a major historical financial deal and a top level US government conspiracy involving the Bush Administration. Incredible. In Fulford's live voice...

This is something out of a film....Oliver Stone type stuff.

Mon, 12/19/2011 - 22:25 | 1992413 Goldilocks
Goldilocks's picture

...War of the Worlds?

“In Fulford's live voice...”…ha, with even more intrigue. ;-)

Sun, 12/18/2011 - 16:10 | 1992036 sabra1
sabra1's picture

From Jesse’s Cafe: The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt. In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation.

Sun, 12/18/2011 - 16:11 | 1992037 mrdenis
mrdenis's picture

Another kick in the balls by Corzine ...In New Jersey he signed into law  irreversible  toll hikes the second of which is 50%toll hike starting Jan 1 the first one was 20% then 50% and the last one will be 30% ...

Sun, 12/18/2011 - 16:11 | 1992039 I am Jobe
I am Jobe's picture

I need of another Davos  . why not. Fuck , how many times will these guys give each other handjobs and nothing happens.

Sun, 12/18/2011 - 16:18 | 1992048 Eanach1
Eanach1's picture

Can anyone please explain this posting in simple, plain language for me. What are the implications here for Ireland? Thanks, would genuinely appreciate your help!

Sun, 12/18/2011 - 16:18 | 1992049 steveo
steveo's picture
Indian Chistmas

I just sent a present to my homeland, my domicile area.

To my brother, and I labelled it "Indian Christmas" since he can only keep it for a few months.    A fantastic telescope.

Celestron C8 SGT XLT

Then I politically incorrect.   Those poor Indians.    Indeed.    When you are robbed and then you have some "life saving" gifts granted back to you with conditions...indeed....there can be nothing worse.     The Indians, the Hawaiians.    They are screwed as a people, screwed because they are accepting these "gifts"  as their "birth-right".

Better to know that  a gift is only temporary, and not your "right".   Living on the Dole is terrible, it destroys your life spirit, a slave to gifts.

Viewing the heavens is an important way to realize there is something bigger than ourselves.   Try it, I have to wait a few months, since I Indian'd away my own Christmas present.

Wow, I ought to stick to ranting about Wall Street!

Here is a Video that shows some close by astronomy items viewed with my scope.

BTW, If I get 2400 kliks on adz I can pay for the telescope.  LOL


Sun, 12/18/2011 - 17:50 | 1992190 steveo
steveo's picture

Just testing the reply mechanism

Sun, 12/18/2011 - 16:19 | 1992052 I am Jobe
I am Jobe's picture

The Labor Market in the Great Recession: an Update

More papers and crap . WTF, fix the fucking problem.

Sun, 12/18/2011 - 16:25 | 1992055 RobotTrader
RobotTrader's picture

Yep, Davos is right around the corner.


More 5 star resorts, exotic hookers, and card playing for TPTB at an exclusive location, with media coverage as if they were movies stars or rock stars.

Nothing ever changes.

Sun, 12/18/2011 - 16:33 | 1992068 GeneMarchbanks
GeneMarchbanks's picture

That is Davos? Clearly you're in. So Robo, what's it like to be part of the in crowd?

Sun, 12/18/2011 - 17:33 | 1992162 ebworthen
ebworthen's picture

Wonder if the person(s) who mailed the bomb to the German bank chief will be there?

Sun, 12/18/2011 - 17:45 | 1992185 disabledvet
disabledvet's picture

I just got the invite and CAN'T WAIT.

Sun, 12/18/2011 - 16:36 | 1992073 slewie the pi-rat
slewie the pi-rat's picture

the irony is almost as short-lived as the rumorZ!

behind a lot of this boisterous bankstering bullshitskie is the regulatory weighing of sovereign debt and (of course the politics around it) for the purposes of assigning capital ratios for the banks aka "balance sheet leverage" and the rudish awakening of europeons that sovereign debt may not, necessarily, = risk-free, leading (stay w/ me here!) to prudent demands for banksters to increase their capital and reserves, resulting in banksters telling the sovereigns they can keester their fuking debt up their own asses!

here'z a link that goes into it Sovereign Debt And the Basel Rules: Clearing Up The Confusion - Seeking Alpha

here, we begin to get a sense of what downgrades can do to an already liquidity-free environment aka "the iceman cometh", BiCheZ!

Sun, 12/18/2011 - 17:47 | 1992187 disabledvet
disabledvet's picture

spot on. "this is The Big One."

Sun, 12/18/2011 - 16:49 | 1992097 jmcadg
jmcadg's picture

Has anyone explained how Soros (low life fuck monkey) was able to pick up the European bond trades at reduces prices AFTER MF Global went into bankruptcy. A reduction I believe that equates to something similar to the outstanding $1.2 billion?????

Also the wired transactions that were recalled BEFORE the bankruptcy that went back to JPM accounts and then ooops vanished?????

Why do I still feel slightly sorry for Corzine???? I know, I know, he's scum, but I have this overriding feeling that he was fucked in the ass by Dimon. 

I know this is somewhat stating the obvious, but for me Dimon is enemy No.1, with that weasel Blankfein just behind him.

Anyone with any sense will heed Ann Barnhardt's advice here.

And if you add this:

and this:

That pretty much sums up this shitty mess and gives you a clear indication what to do.

Good luck all this week!

Sun, 12/18/2011 - 16:53 | 1992100 GeneMarchbanks
GeneMarchbanks's picture

'Has anyone explained how Soros (low life fuck monkey) was able to pick up the European bond trades at reduces prices AFTER MF Global went into bankruptcy. A reduction I believe that equates to something similar to the outstanding $1.2 billion?????'

This article tries:

Sounds a bit oversimplified if you ask me. All legal.

Sun, 12/18/2011 - 19:02 | 1992275 Scalaris
Scalaris's picture

Jesus fuckng christ I've just read the article.

How is what Soros did not illegal since MF Global’s clients should not have been the defacto counterparty in the first place?

Was there any provision of consent under any terms of agreement approval?

And most importantly, how come Corzine overleveraged MF Global's capital to the extent that no buffer for margin calls to be met was left, before maturity?  

Sun, 12/18/2011 - 17:24 | 1992142 MsCreant
MsCreant's picture

The Silver Rush at MF Global

Investors are furious that they can't get back the gold and silver they stashed with the failed brokerage.
Sun, 12/18/2011 - 18:50 | 1992261 GMadScientist
GMadScientist's picture

And I'm giddy that people so foolish are furious.

Sun, 12/18/2011 - 19:00 | 1992271 MsCreant
MsCreant's picture

I used to defend them, and from time to time, I probably still will, but yeah, anyone who is letting "them" hold anything at this point JUST ISN'T PAYING FUCKING ATTENTION!

Sun, 12/18/2011 - 20:10 | 1992402 GMadScientist
GMadScientist's picture

I have some sympthy...savers shouldn't be punished, but the writing was on the wall in technicolor for a loooonnng time before they got burned.

Sun, 12/18/2011 - 20:52 | 1992496 slewie the pi-rat
slewie the pi-rat's picture

^+^ you wascawwy wadicaw!


Sun, 12/18/2011 - 21:10 | 1992589 nmewn
nmewn's picture

Send lawyers, guns & money, TSHTF.

"The two are seeking class-action status for everyone who got company stock as a benefit of working for MF Global after May 2010.

Jacob Zamansky, an attorney representing the two employees, said Corzine and the company's board breached their fiduciary duty to their employees and "destroyed" their retirement savings." 

Sun, 12/18/2011 - 21:22 | 1992613 Jendrzejczyk
Jendrzejczyk's picture

It warms the heart just a little to read that. Thanks.

Sun, 12/18/2011 - 22:33 | 1992701 MsCreant
MsCreant's picture

They might actually be out of control, eating each other. I like that better than a conspiracy. I want them TO GO DOWN!!! For reals.

Sun, 12/18/2011 - 17:40 | 1992177 michaelsmith_9
michaelsmith_9's picture

The volatility should continue in the markets as the debt problems around the world go unresolved.  Our bias for the SPX is higher this week, but postions should be watched closely due to pre-holiday market conditions.  Here is a Market Newsletter update with several wave potential wave counts for the SPX this week.

Sun, 12/18/2011 - 18:18 | 1992225 Atomizer
Atomizer's picture



Does this mean Obama will give a new peasantry speech & compare himself to President Truman?

Obama compares himself to Abraham Lincoln 

Not to forget:

·         FDR

·         LBJ

·         TR (Theodore Roosevelt) 

The list goes on.. 

Edward Bernays could be his next comparison.

Sun, 12/18/2011 - 18:27 | 1992234 Caviar Emptor
Caviar Emptor's picture

I compare myself with Grover Cleveland

Sun, 12/18/2011 - 18:23 | 1992232 chump666
chump666's picture

Hellish week ahead.

Sun, 12/18/2011 - 18:30 | 1992239 jmcadg
jmcadg's picture

How exactly does keeping stimulus 'money' within the elite help create jobs. 

This is a fundamental problem. How much of the $15 trillion has ACTUALLY gone to create jobs.

Where has it gone - to repair bank balance sheets after their unbridled gambling. To prop up companies that were/are not productive. To continue to allow massive manipulation of a wholly broken system.

Come on Dr Krugman, you can do better than that - can't you?

Sun, 12/18/2011 - 19:33 | 1992340 Atomizer
Atomizer's picture

How exactly does keeping stimulus 'money' within the elite help create jobs.

Again, when the elite has run out of money... their welfare state is funded thru new laws and taxation which keeps new revenue funds flowing to supplement their binge spending.

Hence, our Ponzi will always convert by maintaining a 2-5% growth return to sell the public on new infrasture developments. At the end of the day, we pocket all profits for these government public works programs. Our taxpayer employed peons sell the plan to the masses. We fleece the taxpayers' pockets and give them whatever new infrastructure they desire under the order of Democracy.

This is how it works folks. Change is needed. Obama is not in the cards.

Sun, 12/18/2011 - 18:33 | 1992243 Ponzified Plebe
Ponzified Plebe's picture

Didn't Kyle Bass have some fairly telling info on unfunded Greek interest payments due on Dec. 19th? Does anyone have any word on what has or has not happened here. If they aren't funded I would assume tomorrow will be a very interesting day indeed.

Sun, 12/18/2011 - 18:39 | 1992249 Caviar Emptor
Caviar Emptor's picture

The global debt pyramid is crumbling like a sand castle. In 2008 some economies were still in boom mode. But not anymore. So the game of kiting more debt, printing money, and hiding defaults is nearing the end as it becomes clear that a negative cycle is setting in

Sun, 12/18/2011 - 18:49 | 1992257 chump666
chump666's picture

HFTs just went bonkers on the AUD.  Tight. 

Sun, 12/18/2011 - 23:16 | 1992863 steve from virginia
steve from virginia's picture


It could have been ECB printing. It turned out to be an Internet rumor. Oh well ...

The idea had that whiff of Geithner to it: QE at a remove. The banks would have the risk: the ECB would have been pushing on a string. The EU banks don't have the same relationship to the ECB as do primary dealers to the Fed. There was/is nothing to keep the Eurobanks from handing over those bad assets they cannot sell to the ECB for some of that 1% cash ... and not buying PIIGS paper.

I'm surprised Merkel or Bundesbank didn't shoot it down ...

Tue, 12/20/2011 - 01:01 | 1996739 ThrivingAdmistC...
ThrivingAdmistCollapse's picture

I feel that the Euro is going to collapse sooner rather than later.  All of this papering over by the ECB is just so much extra window dressing at this point.

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