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Once Again, Here Is The Full Playbook

Tyler Durden's picture


Two weeks of utter confusion by most market participants out there, when the complete deja vu scenario is so very clear. To help out those banging their heads over what is happening, here, once again, is the full playbook as it was laid out here for eveyone to read and prepare, because it explained to the dot precisely what will happen, and has been happening since May 19. And yes, that 1000 bps on XO is still about 25% away... Do the math.

From "Dear Angela, Dear Francois, Dear Mario" - From Citi, With No Love At All". The relevant sections have been bolded. Please at least read those.

The big banks are getting restless. Nowhere is this more evident than in the latest just released letter from Citi's European Credit Strategy, literally a letter to Europe's trio of leading politicians, which follows hot on the heels of yet another recent Citigroup missive from Willem Buiter, which was largely ignored in the noise, yet which made it all too clear that when all else fails, it is the Chairman's sworn duty to paradrop money. Because if anyone, it is the banks that know that if things aren't fixed (they aren't), it is up to the central banks to do something to prevent the vigilantes from forcing the politicians hands, as they did in the summer and fall of 2011 (which will not provide a long-term fix, but at least allow bankers to hope that the next collapse won't take place before bonus season). As Citi says, "Until the gravity of the situation is made clear, until the self-reinforcing mechanisms that already seem to be in motion are understood, we don't see how the solutions, the answers, and the certainty that market craves can be brought to the table." Which simply means that things are about to get much, much worse as it will be up to the markets to bring the world to the edge of collapse once again, just so Europe, with the help of the Fed of course, once again is forced to get over the political bickering and prop up risk assets, in yet another iteration of "this time it's different", even though it isn't. Sure enough: "Our impression is that markets will need to act as the proverbial 'attack dog', forcing the issue on the political agenda. We can't escape the sense that it is probably politically easier to let the markets run loose for the time being to make it apparent that further intervention is needed. But 1000bp on Crossover is much closer than you imagine." In other words, Citi just gave the green light for the bottom to fall from the market just so Europe's increasingly impotent political elite does something, anything. Look for many more banks to sign off on the same letter.

From Citi:

Dear Angela, Dear Francois, Dear Mario

It seems that we are at a watershed once again. Judging by the movement we have seen in the credit market and in other risk assets over the last week, a chain of events that could lead to implosion has been unleashed, unless checked by policy action.

2012 started so well. The LTROs allayed market fears about a liquidity crisis in the European banking system and created additional demand for periphery sovereign debt during the first quarter.

However, we reckon it is now time to face the fact that the market does not believe Schäuble's firewall works. Most urgently, the market fears a Greek exit, or the reintroduction of capital controls to stem deposit outflows, might spark deposit flight from banks across a number of other countries. Playing down the importance of a Greek exit now is hardly reassuring, when Mario Draghi said the consequences for the Eurozone would be 'incalculable' only last December.

While the lack of an elected government in Greece complicates matters, the market sees a growing risk any new government will not be able to make the concessions demanded by the Troika quickly enough – or at all. Then what? If a hard line is to be taken on Greece, then we reckon the firewall must be reinforced at least with a pan-European deposit guarantee scheme of some form. The market knows that it is not easy to sell politically in Germany.

It doesn't help that the Spanish spread to Bunds has drifted to record levels again, while there is no clarity on where the funding necessary to  recapitalise the Spanish banking system will come from. It may be that LTRO-driven bank demand can sustain the auctions for now, but it seems likely to us that foreign investors will continue to pull out.

Add in the prospect of Moody's downgrading more banks across Europe and North America, the persistent negative bias in the economic data  relative to consensus, the upcoming Irish referendum, all the funding Italy still needs to do this year and the prospect of Portuguese PSI discussions in only a few months – and it is small wonder that market confidence is breaking down.

Through the LTROs and extremely low interest rates policymakers have ensured that financial markets are flush with cash. We don't recall a time where the liquidity situation and the technical position of the credit market has been much stronger than now. But that isn't enough. Quite simply, the uncertainty is killing any incentive to take risk. What goes in financial markets generally goes in the wider economy too. Companies are flush with cash, but we struggle to see them investing – especially in the countries where investment is sorely needed – while there is no visibility on the Euro project. Meanwhile, things grind to a halt.

We understand the political constraints key policymakers operate under. We know that many backbenchers and ECB board members are not fully onside. We can see in the election results and the opinion polls that a large part of the electorates are not onside either. There seems to be a dangerous perception in many places that enough has been done already.

However, don't be fooled by the apparent resilience of many corporate bonds (and equities). Aside from the sheer amount of cash funds have been left with, it is only the perception that the policy intervention will come eventually, triggering a very large short squeeze that is preventing more selling. Every day seems to bring headlines that challenge that perception. We could be close to the breaking point. Already in the last week there are clear signs in credit that the selloff is becoming more systemic. If you have come across our 'five phases of grief' framework – it appears we are moving straight from 'depression' back to 'anger'.

Until the gravity of the situation is made clear, until the self-reinforcing mechanisms that already seem to be in motion are understood, we don't see how the solutions, the answers, and the certainty that market craves can be brought to the table. Our impression is that markets will need to act as the proverbial 'attack dog', forcing the issue on the political agenda. This would not be the first time that markets have had to bark to get a credible policy response. We can't escape the sense that it is probably politically easier to let the markets run loose for the time being to make it apparent that further intervention is needed. But 1000bp on Crossover is much closer than you imagine.

Moreover, every bark comes with a loss of credibility – a loss of faith in the institutional capacity of the European Union to address the fundamental imbalances. Reining in the market eventually may end up taking a bigger effort than policymakers are bargaining for.

The market needs to know what policymakers are committed to and it needs to see actions that validate those commitments. Inaction is just a carte blanche for investors to sit on the sidelines and wait for things to deteriorate further.

Yours sincerely,

Citi Credit Strategy


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Sun, 06/03/2012 - 19:04 | 2490138 zorba THE GREEK
zorba THE GREEK's picture

something has to break soon. There's too much that can go wrong.

Sun, 06/03/2012 - 19:10 | 2490143 Soul Train
Soul Train's picture

ES to shake down these next couple of weeks - hard meltdown. There are pent up high expectations for an instantaneous FED QE to save the day. What a set up. Any action must really be coordinated between global central banks. With all in chaos and unsetlled this month of June, we will see chaos rule in the equity markets.

Risk off Risk off Risk off.


Sun, 06/03/2012 - 19:23 | 2490174 ndotken
ndotken's picture

Citi is no different than GS or JPM ... they're all just looking for more flow.  I wouldn't trust any of those Wall St assholes ... they're lieing anytime their lips are moving ... or when their fingers are typing.  

Sun, 06/03/2012 - 19:35 | 2490199 The Big Ching-aso
The Big Ching-aso's picture



Millions preparing for...........

Market Halt.   Global Halt.   Going Galt.

Sun, 06/03/2012 - 21:57 | 2490539 Chief KnocAHoma
Chief KnocAHoma's picture

As soon as markets begin to whimper our jelly wimp in chief will do what ever he can to keep the peace. 

Understanding Obama:

Sun, 06/03/2012 - 23:34 | 2490732 rocker
rocker's picture

The question is will they allow the market to fall and those who are holding all the inventory to sell it.

On the last week of May Blackrock (BLK) did a SPO (Secondary Puplic Offering) of 26 million + shares at 160.00 a share.

Is it not a warning why the hell Blackrock needs 4 Billion + .   They are the largest holder of stocks, afterall.

Talking about things the make he go Hmmmmm.  This is simply the biggest fraud against their own shareholders too.  LMOA.

Sun, 06/03/2012 - 22:08 | 2490576 potlatch
potlatch's picture

why do you think there needs to be coordination b/w Fed and euro or other central banks?




I have been assuming for months now, this is simply about NATO pulling a fast one with a fake competitive currency designed to collapse.  NATO is Europe, and they will realize that when the tanks have to be rolled out.


Its a feature not a bug, I was under impression

Sun, 06/03/2012 - 19:18 | 2490163 quintago
quintago's picture

XO? I love extra oyster sauce.

Sun, 06/03/2012 - 19:23 | 2490175 bank guy in Brussels
bank guy in Brussels's picture

Re XO or 'Crossover': « ...1000 bps on XO is still about 25% away ... »

Background for those asking -

Article, 'Five facts about the iTraxx Crossover index'


Simple chart table ... iTraxx Europe Crossover current spread along with others ...

Sun, 06/03/2012 - 19:31 | 2490189 blindman
blindman's picture

thanks for the linkage.

Sun, 06/03/2012 - 20:05 | 2490279 LeonardoFibonacci
LeonardoFibonacci's picture

I prefer XO Cognac!

Sun, 06/03/2012 - 21:32 | 2490493 hedgeless_horseman
hedgeless_horseman's picture



VSOP pour moi.

Sun, 06/03/2012 - 20:55 | 2490418 philipat
philipat's picture

When the going gets tough. The French go on holiday?

Sun, 06/03/2012 - 22:10 | 2490582 potlatch
potlatch's picture

and this is a bad idea?  If it were possible, this would be a dandy time to be able to put out a "away for a few, be back later!" sign

Mon, 06/04/2012 - 00:26 | 2490830 FL_Conservative
FL_Conservative's picture

With Friday's commodity blast off, I wouldn't be surprised if Bernanke didn't let the June meeting come and go WITHOUT announcing any additional QE.....just to get commodities to correct BEFORE he were to sign off on QE etc etc etc.  I don't think he wants the market expecting it and he knows the political fallout that will come if he does it before the walls are coming down.   At least I'm hoping it will work that way.  I want to buy more gold and silver.

Sun, 06/03/2012 - 19:12 | 2490147 veyron
veyron's picture

Something tells me the bankers couldn't care about what Citi has to say ...

Sun, 06/03/2012 - 19:12 | 2490148 Let them eat iPads
Let them eat iPads's picture

Futures are looking ugly.



Sun, 06/03/2012 - 19:16 | 2490160 razorthin
razorthin's picture

Agreed.  Dow -500 would be pretty.

Sun, 06/03/2012 - 19:19 | 2490166 Soul Train
Soul Train's picture

easy - a single day may bring

Sun, 06/03/2012 - 19:43 | 2490213 razorthin
razorthin's picture

I thoroughly enjoy the "equity futures" oxymoron.

Sun, 06/03/2012 - 20:02 | 2490268 The Big Ching-aso
The Big Ching-aso's picture




Full PlayBook.   Full FadeBook.   Full PrayBook.

Sun, 06/03/2012 - 19:14 | 2490155 midgetrannyporn
midgetrannyporn's picture

Extortionist swine.

Sun, 06/03/2012 - 19:15 | 2490158 Michael
Michael's picture

The GOP still wants to fight over the crumbs of taxpayer dollars that may be left after the fallout.

Police Assault Ron Paul Delegate at LAGOP Convention

Assaulted Ron Paul Chair Responds After Release From Hospital

Sun, 06/03/2012 - 19:26 | 2490180 CvlDobd
CvlDobd's picture

I got thrown out of a bar last night. I told two people I over heard talking about Obamney that they are one and the same. Another dude asked me to keep my opinion to myself so he could hear the show. I said "FUCK YOU! If you can't hear a live rock show, I'm not the problem. Tell the fucking pussies in the band to turn that shit up!" Then the owner told me to leave and my friend stood up for me and said he would watch over me. Then after that song ended I yelled out "LOUD NOISES!" Then the owner threw me out for good so I threw my beer against the wall (it was 2/3 empty) which was awesome. He then told the bouncer to not let me back in so I took off my wrist band, threw it at him and said I didn't want to get back in his shit bar.

It was pretty awesome. RON PAUL 2012!

Sun, 06/03/2012 - 19:30 | 2490187 Soul Train
Soul Train's picture

fight club rules.

Sun, 06/03/2012 - 19:33 | 2490190 CvlDobd
CvlDobd's picture

Shit, you got me.

Sun, 06/03/2012 - 21:39 | 2490514 entropos
entropos's picture

You threw your wrist band at him?!?!?!?!

Fight the power, white boy. Fight the power.  

Sun, 06/03/2012 - 22:08 | 2490575 Jena
Jena's picture

A bar with wrist bands?  Honey, there are better joints to get thrown out of.

Sun, 06/03/2012 - 22:14 | 2490593 CvlDobd
CvlDobd's picture

You got a better story from your weekend? I didn't think so.


There was a music fest going on downtown this weekend so there were wristbands all over for keeping out those underage kids.


I meant to say I tied a beer bottle to the wrist band and used it as one would a slingshot and slammed it into his head.

Sun, 06/03/2012 - 22:47 | 2490650 Jena
Jena's picture

Actually, I do.  But it's none of your business.


Lighten up, Francis.

Sun, 06/03/2012 - 22:55 | 2490665 CvlDobd
CvlDobd's picture

This is ZeroHedge. We're all anonymous twats here. Tell it sister.

Mon, 06/04/2012 - 00:25 | 2490829 Jena
Jena's picture

You make me chuckle, it's good.

Sun, 06/03/2012 - 22:58 | 2490674 Marginal Call
Marginal Call's picture

I got thrown onstage at a janes addiction concert once.  When I chest bumped Dave Navarro he went flying and his guitar unplugged.


I guess that's like wearing a bracelet to a lame show.

Sun, 06/03/2012 - 23:43 | 2490749 CvlDobd
CvlDobd's picture

No thats better

Sun, 06/03/2012 - 22:12 | 2490586 potlatch
potlatch's picture

"And then, our eyes locked in fierce alpha male combat, I poured out my redcup of Old Milwaukee on the floor.  "Just so you know I do not fuck around," you say, as the bar grows silent, and someone turns down Hootie even it is so tense man

Mon, 06/04/2012 - 01:08 | 2490862 FreeNewEnergy
FreeNewEnergy's picture

Hey, cvldobd, if you're trolling, I'm a sucker.

Nothing more poetic than getting kicked out of a bar when you're blasted because you can't stomach the current condition. Like, "No Exit" or even better, "Nausea." Satre rules. Sure.

Tel ya what. I'm gonna make another bloody mary, roll a few cigs, check out the rest of the comments and re-check the Asian markets.

I thought the can was kicked to the end of the road two to three weeks ago. I have an exact reference, but I'm too fcking stoned to bother looking it up, especially for your sorry ass. (Please note that I am able to employ the correct conjugations of your and you're - and, yes, I know that some smartass is going to come along and tell me that my use of "conjugation" is incorrect... have I mentioned that I've been drinking (if you haven't been, you're a fcking puke))

Anyhow, the end is nigh. Hang on to any real assets you have, as in not paper or promises, lock and load, get ready for TSHTF in 3...2...1...

Mon, 06/04/2012 - 11:20 | 2492041 CvlDobd
CvlDobd's picture

Im not trolling and you aren't a sucker.

Jean-Paul was arrested for my namesake, Civil Disobedience. I like the dude.

Sun, 06/03/2012 - 19:17 | 2490162 caimen garou
caimen garou's picture

Math done

Sun, 06/03/2012 - 19:20 | 2490167 A Lunatic
A Lunatic's picture

Is it too late to fix this with a beer summit?

Sun, 06/03/2012 - 21:11 | 2490460 uno
uno's picture

or a trip to the choom wagon

Sun, 06/03/2012 - 21:34 | 2490501 Midas
Midas's picture

It's definitely a teachable moment.

Sun, 06/03/2012 - 22:14 | 2490592 potlatch
potlatch's picture

i vote for a choom summit too.  absolutelyu.  time for a choom summit.  are you kidding me?  Do you realize how baked you could get if you closed all the doors in the Oval Office? 


deep immersion indeed

Mon, 06/04/2012 - 07:00 | 2491067 neidermeyer
neidermeyer's picture

I'm going to have to order an "outdoor mix" of seeds from Canada ... when this all hits the fan nobody will be enforcing those laws and a few tall sticky plants will be a godsend.

Sun, 06/03/2012 - 19:24 | 2490176 blindman
blindman's picture

europe envy for a hank paulson moment.
is that a gun in his pocket or is he
just happy to take your money?
did h. paulson write that?
the technocrats have a lot of work to
do, programs to initiate etc. and of
course, there is no time or the crisis
may go to waste ! sheesh

Sun, 06/03/2012 - 19:24 | 2490177 sudzee
sudzee's picture

CB's too quiet. May be time to let nature take its course. Do it when everyone and his uncle expects the big print.

Sun, 06/03/2012 - 19:25 | 2490181 grid-b-gone
grid-b-gone's picture

Never waste a crisis, and if one is not close enough at hand, never shy away from letting one fester to eruption.

Sun, 06/03/2012 - 19:32 | 2490192 deflator
deflator's picture

  Bazookas have been fired, protect yourself bitchez.... BTFD!

Sun, 06/03/2012 - 19:32 | 2490194 slewie the pi-rat
slewie the pi-rat's picture

so what?

never seen a head-fake before?

Mon, 06/04/2012 - 01:23 | 2490867 FreeNewEnergy
FreeNewEnergy's picture

slewie, somehow I suspect you've been kicked in the head too often.

A few times a week is acceptable, but don't make a habit of it.



Mon, 06/04/2012 - 01:31 | 2490878 slewie the pi-rat
slewie the pi-rat's picture

why don't you go jerk off to somebody else?

somewhere else?

you add nothing.  ever. 

Mon, 06/04/2012 - 11:43 | 2492144 FreeNewEnergy
FreeNewEnergy's picture

Ah, yeah, and your comments are always insightful? meaningful?


Sun, 06/03/2012 - 19:35 | 2490198 monopoly
monopoly's picture

So, what we are saying here is unless we print, unless the inmates pour more fuel on the fire it will go out. But what they are not getting,(at least till after bonus time) is that this fire will turn into a holocaust so dire that it will take years to put it out. Why not take the pain now, as we should have in 08, 09, and pay the piper in full and maybe then "real green shoots". All these politicians, central bankers and Wall Street scum are doing is delaying the day of reckoning. THE GAME IS NOT CANCELLED!. PLAY ON.

Sun, 06/03/2012 - 19:35 | 2490200 The Alarmist
The Alarmist's picture

And here I thought XO was short-hand for love and kisses ....

Sun, 06/03/2012 - 19:36 | 2490201 monopoly
monopoly's picture

Excellent post Zero Hedge. Excellent!

Sun, 06/03/2012 - 19:37 | 2490204 gwar5
gwar5's picture

The chain letter sounded like a actionable threat -- "Attack dogs?"  I guess this is what happens when politicians ignore menacing phone calls at 3 a.m.  I don't know about the politicians, but PETA will not be amused.


Sun, 06/03/2012 - 19:38 | 2490207 Zombie Investor
Zombie Investor's picture

How pathetic is this:

[Leaks of a teleconference call on Wednesday reveal that France's François Hollande, Italy's Mario Monti and US president Barack Obama launched a three-pronged attack, pressing Ms Merkel to drop Germany's veto on the use of EU rescue funds for banks.

The trio repeated their demands three times with mounting tension. Each time she answered no, first in English, and then in German for precision, according to details obtained by Italy's La Repubblica.]

Obama begging Merkel to bailout the PIIGS to save his presidency.  I remember when Bush was telling the EU to accept Turkey as member and Chirac, rightly so, told him to stay out of the EU's business.  Someone needs to tell Obama to fuck off, the U.S is not a member of the EU.


Sun, 06/03/2012 - 21:04 | 2490446 Eireann go Brach
Eireann go Brach's picture

Obama believes that everyone should suffer so he can stay president!

Sun, 06/03/2012 - 22:01 | 2490553 Davalicious
Davalicious's picture

Obama believes that we should suffer for him

To have him in office is to suffer

Therefore we must have him in office


I think that is the logic O'bumbler is following.

Sun, 06/03/2012 - 21:51 | 2490533 sumo
sumo's picture

Merkel to Obama: "What part of 'Nein' don't you understand, braun Clown?"

Sun, 06/03/2012 - 22:20 | 2490609 potlatch
potlatch's picture

is there need for that?  or, did that actually give you an actual chuckle?  really?  sad, ya know.

Sun, 06/03/2012 - 22:42 | 2490645 sumo
sumo's picture

Now I'm chuckling.

Sun, 06/03/2012 - 23:33 | 2490729 potlatch
potlatch's picture

what are you wearing?

Mon, 06/04/2012 - 00:34 | 2490836 sumo
sumo's picture

Obama to Merkel: "Bitch, you better get with the Hopey Changey program. Don't come crying to me when TARGET2 rips you a new one, you dig?

Sun, 06/03/2012 - 22:19 | 2490606 potlatch
potlatch's picture

if you think Obama is "trying to save his presidency"  (and trust me, if you wish to substitute "Bush" in there, please do, I am helping you here) there is little hope for ability to understand the minor role electoral processes play in any real decision making at the national level.  Obama is executing a plan that has been in play since 2000.  It's Bush's plan.  Tell me how it isn't.


The NSC does not feel this is a good time for people to be "trying to save their presidency" trust me.  And I highly doubt Obama is such a stooge, that he is not completely on board whatever is in our pipeline.


This is not about Obama okthnxkbai

Mon, 06/04/2012 - 01:31 | 2490879 FreeNewEnergy
FreeNewEnergy's picture

Nice trolling today, eh, Zombie? How easily even the elite SH readers and commenters are fooled whenever the magic Oblahblah is mentioned.

Not buying your story without a link, dude. Tell that to der feurher, das Romney, muthafucka.

Look, just pull the levers on election day, you know, via remote. You've already won a brand new police state, WTF else do you want?

Mon, 06/04/2012 - 06:07 | 2491012 Zombie Investor
Zombie Investor's picture

"Not buying your story without a link, dude."


Sun, 06/03/2012 - 19:38 | 2490208 eddiebe
eddiebe's picture

Wolf! Wolf!! Wolf!!! no really I mean it this time Wolf! WOOOOOOLFF!!!

Sun, 06/03/2012 - 20:08 | 2490287 LeonardoFibonacci
LeonardoFibonacci's picture

Too late, he got you! ?%*&%!=/"1|#, guess what you dead!

Sun, 06/03/2012 - 20:36 | 2490362 tenpanhandle
tenpanhandle's picture

Aaaarrrgh!!  Aaarrgh!  aargh, snap, crackle, pop.................woof.....end of transmission.

Sun, 06/03/2012 - 19:44 | 2490221 Rynak
Rynak's picture

Summary: Bent over, or we'll crash you, also known as "do what we say, or the world will end!".

Sun, 06/03/2012 - 20:17 | 2490319 nmewn
nmewn's picture

IB's have been doing this for years...OMG!!!'s Armageddon!!!...I'm Jonesing!!! Give us our free heroin & syringes or we'll do something really really bad to you, we can't control ourselves!!!

Yeah, addicts can't even stand upright and yet hurl threats as they stumble around.

Piss on em, cold turkey style IMO.

But towards the end we know what happens, the politicos (the dealer an addict as well) will print one last lasts for only that day and then the bitchez finally dies the next...overdose.

Good riddance to both.

Sun, 06/03/2012 - 21:26 | 2490479 Rynak
Rynak's picture

Good rant. But let me add some modesty to it:

Of course, simply waiting for the ponzi to kill itself, will ultimatelly work out.... but at what possible cost?

Example #1: Even assuming a "clean" contained financial collapse (with "contained" i do not mean nicely controlled, so that it doesn't affect the real economy.... rather, i mean cotnained to "just" the economy and finacials, as opposed to going over into more permanently destructive means): Anyways. just waiting for the event to happen, does not allow any preparention... it puts one into the defensive possition of dealing with what "they" caused, with the remaining means decided by "them". This is why i am in favour of going into the offensive, and engaging in radical short term measures of preparation... unfortunatelly, with the current power structure in place, the chances of the "decisionmakers" doing this sufficiently, are low. Still, it is what IMO ideally should be done: Do not wait for the showdown - aggressively prepare, and then take the initiative.

Example #2: The thing about fiat is, that the numbers actually aren't worth shit, and can anytime in theory be made whatever you want, if only the measures are drastic enough. For example, if the EUR or even the DOLLAR becomes unsustainable, you can just switch to another new version of fiat. After all, at this point, balance sheets dont mean shit. All it is by now, is "we claim this is worth X, backed by our supposed..... power over belief". In that case, you can claim anything... add zeroes, remove zeroes, who gives a fuck, it is all just "i claim it to be so and enforce it with violence". This runs contrary to the "hyperinflation will reset everything"-assumption of a lot of people around here.... virtual reality to ZH: When all connection to reality has been broken, we can claim whatever shit we want. Yes, this in the long run will result in an economic breakdown far beyond of what NOW is considered the "doomsday scenario"... but do we want to go there?

And this brings me to scenario #3: Thermonuclear war anyone? We're not merely talking anymore about people possibly killing each other with sticks or guns or conventional bombs (and by the way, with current nuclear power design, you dont even need ICBMs for a thermonuclear war - you can just bomb reactors with conventional missiles and achieve the same, which is why IMO all the talk about WMDs is LOL... at this point, the only thing that matters is missile and vehicle range, not the payload-type). Do we want to just sit idly by, and potentially allow this scenario to happen, instead of developing plans to sidestep it?

Sun, 06/03/2012 - 21:59 | 2490547 Money 4 Nothing
Money 4 Nothing's picture

From what I gathered, he.. Soeros said 1 year ago that there will be an "controlled yet organised dismantelment of the market" or something to that effect about 1 year ago. A gradual decline of global markets if you will.

Sun, 06/03/2012 - 22:15 | 2490598 Rynak
Rynak's picture

So according to what soros (supposedly) wants, that would be scenario #2: Overpower reality temporarily with plain force. There is no truth, there only is the simulacrum.

Well, at least that sounds more "recoverable" than option #3... unless it then leads to just this.

Sun, 06/03/2012 - 22:34 | 2490631 nmewn
nmewn's picture

"...virtual reality to ZH: When all connection to reality has been broken, we can claim whatever shit we want. Yes, this in the long run will result in an economic breakdown far beyond of what NOW is considered the "doomsday scenario"... but do we want to go there?"

Yes, I do.

I want truth first and foremost, always. I'm not (knowing what we know) going to start a new business, hire new employees, invest in anything based on a lie.

It's as simple as that.

I withdraw (as is my right) to participate in a sham that ultimately harms the unknowing.

Sun, 06/03/2012 - 22:59 | 2490676 Rynak
Rynak's picture

Umm, so, you'll willfully sit back while the suicide bomber (aka TBTF) loads up, even if he may take you out together with him?

Well, yeah, you'll get your "truth".... as for me, i'd rather survive to see this truth, or at least the next generation.

Mon, 06/04/2012 - 06:29 | 2491026 nmewn
nmewn's picture

The suicide bomber (TBTF) has accomplices. We both know that and who they are. Without that support network in place the bomber can't do what he does. It takes time to weed them all out...the Summers, the Rubins, the Rumpoys etal.

We'll be just fine...have no fear.

Mon, 06/04/2012 - 01:39 | 2490889 FreeNewEnergy
FreeNewEnergy's picture

I'll take door #2, Monty.

Really, would somebody please bitch-slap Rynak just for mentioning #3... and then acting like a complete pussy. As if he can't survive thermo-nuclear holocaust. What a wuss.

I piss all over ICBMs and their multiple warheads. Bring it, bitchez!

Sun, 06/03/2012 - 19:45 | 2490224 monopoly
monopoly's picture

And Obama blames Europe for the weak jobs report. And the administration blames Congress for their lack of progress for the slowing economy. And Obama blames Bush for what he inherited. 

Notice how it is NEVER Obama's fault. Always something or someone else. Reminds me of a 7 year old kid who is never wrong. And this is the leader of the "free world". Not endorsing Mitt here, just advising what a pathetic excuse for a President.

Sun, 06/03/2012 - 20:56 | 2490422 Money 4 Nothing
Money 4 Nothing's picture

Blame Bush for Obama... Gotta shift blame to someone...

Sun, 06/03/2012 - 21:54 | 2490536 zebrasquid
zebrasquid's picture


Sun, 06/03/2012 - 21:54 | 2490538 DanDaley
DanDaley's picture

"Notice how it is NEVER Obama's fault. Always something or someone else."

It's called external locus of control..."my problems (or issues, if you're a p-c/progressive/liberal/fascist) were caused by someone/anyone other than me!"  You see this commonly in high-school students and adult failures at life.

Mon, 06/04/2012 - 01:42 | 2490891 FreeNewEnergy
FreeNewEnergy's picture

Excuse me, Mr. monopoly, sir, but aren't you supposed to be attending to Mr. Romney's testicles?

Sun, 06/03/2012 - 19:50 | 2490240 KingdomKum
KingdomKum's picture

We few, we happy few, we band of silver holders  .  .  .  

Sun, 06/03/2012 - 19:55 | 2490250 grid-b-gone
grid-b-gone's picture

The downside risk of letting markets "run loose for the time being" is that, after several years of propping up, you now risk the unintended consequence of revealing where an honest market would settle.

Given that the next stimulus or round of intervention would be implemented before the honest market bottom is revealed, investors will know the true market lies somewhere below the current short-term correction that has been forming for weeks.

This action (or temporary non-intervention) makes the next propping action more expensive because investors will sell into the move as the still-unknown honest bottom will be revealed as somewhere below the short-term bottom being formed now.

This, plus weakening global GDP, ensures the next correction will be built on higher debt/GDP ratios and a lower level of worldwide commerce, making an even lower market pull-back more likely. 

Lower highs followed by lower lows establishes the trend.  

Sun, 06/03/2012 - 20:01 | 2490265 nmewn
nmewn's picture

So, the Timid Timmy's and the Beneficent Ben's of the world are finally allowing prices to reach their natural spite of their solemn vow to fight it tooth & nail...which they can't long term.

Was there ever any doubt of what the outcome of printing money (and giving it to I-Banks) would be? was dead money at issue...our best & brightest said print/counterfeit to offset balance sheets, stellar

But a strange thing happened on the way to the morgue, the body (the debt) didn't disappear, it still hasn't, it wasn't written off and no autopsy has been done. Drive around and look at the for sale/lease signs on unoccupied houses and store fronts.

Turn it back on you fucktards (clink clink clink) theres no other sound like it and I have my eye on a few things for later in life ;-)

Sun, 06/03/2012 - 23:38 | 2490740 potlatch
potlatch's picture

what position would you say a modest property owner without household or business debt is in these days?


The maths look peaceful

Sun, 06/03/2012 - 20:04 | 2490274 LeonardoFibonacci
LeonardoFibonacci's picture

No problem, Rockefeller & Rothschild will save the world, They belong to the powers that be!  The question is will they be safe when the masses come for "a pound of flesh" at their castle doorsteps.

Sun, 06/03/2012 - 20:11 | 2490292 Tuffmug
Tuffmug's picture

And the EU finance ministers are busy planning which five star restaurants to frequent at the June summit

Sun, 06/03/2012 - 20:53 | 2490408 Non Passaran
Non Passaran's picture

Mens sana in corpore sano.
Quality nutrition is essential to making sound policy decisions!

Sun, 06/03/2012 - 20:12 | 2490297 Money 4 Nothing
Money 4 Nothing's picture

Polishing the Brass on the Titanic come to mind. But.. what do I know?

Sun, 06/03/2012 - 20:20 | 2490322 q99x2
q99x2's picture

If it ain't broke don't fix it. Why waste a maintenance fee. Accidents do happen. Citi is broken. To fix them would be to repudiate their debts and dissolve them. Economies would run a lot better without Citi, GS, JPM, Wells Fargo and BofA. Get rid of that trash and get rid of the crimminals that run them. Fraud only goes so far.

Rockefeller & Rothschild to be liquidated due to debt holdings.

Sun, 06/03/2012 - 20:25 | 2490333 GernB
GernB's picture

I think some underlying assumptions in the letter are just wrong. Markets did not recover in 2011 because the market had more confidence in leaders, it recovered because more money was dumped into the market and more money chasing securities drove the prices up. Once the upward trend had been established then the propaganda machine could sell the " market recovrey myth."

Corporations are hanging onto cash because they are terrified to invest in a rigged game that rallies on every central bank rumor and tanks on every bit of bad news. Corporations know the game is rigged and they are holding onto cash bracing for the next centrally botched disaster. Only the investment world is clamoring for more QE and not to bring stabiity, but so they can ride the inevitabe rally. Anyone with a brain knows the next intervention is not going to bring a sustainabe recoveery any more than the last three did.

Sun, 06/03/2012 - 20:54 | 2490414 Budd aka Sidewinder
Budd aka Sidewinder's picture

You can't play kick the can anymore when the can is a 55 gallon drum loaded with gunpowder.

Sun, 06/03/2012 - 23:41 | 2490743 potlatch
potlatch's picture

or lube

Sun, 06/03/2012 - 21:22 | 2490474 Boilermaker
Boilermaker's picture

I see the air brakes were applied on the futures plunge dead ass nuts at Dow 12,000.

Now they'll defend that retarded and insignificant 'psychological' barrier? Yea, that's a great fucking plan. The few retail idiots still in this POS really care about that.

Sun, 06/03/2012 - 21:52 | 2490532 cosmictrainwreck
cosmictrainwreck's picture

yeah, I saw that...was wondering where they'd put in the STOP. At the first BRAKES ON Dow actually jumped to "only" -76. And I guess it's the magic 1260 on SP. Can't wait to see next 10-12 hours......

Sun, 06/03/2012 - 21:53 | 2490537 Boilermaker
Boilermaker's picture

They will astonish and amaze. That's the only guarantee in this shit fest.

Sun, 06/03/2012 - 22:03 | 2490558 cosmictrainwreck
cosmictrainwreck's picture


Sun, 06/03/2012 - 22:23 | 2490611 CvlDobd
CvlDobd's picture

I for one, am surprised.

Sun, 06/03/2012 - 21:55 | 2490541 zebrasquid
zebrasquid's picture

Re: Obama:

He only wanted to be the Celebrity-In-Chief  -- all this heavy lifting stuff - nobody told him about that.  
And all this Buck Stops Here stuff, not for him, he's too special. 

Maybe he'll quit and let Hillary have a run at it?


Sun, 06/03/2012 - 22:21 | 2490610 Go Tribe
Go Tribe's picture

Yeah, I would think that if anyone has a lockdown strategy for the currency, it would be our military. Could definitely imagine a military dollar imposed. Backed by the full faith and credit of a bunch of guns and zillions of rounds of ammo. Trumps gold every time.

Sun, 06/03/2012 - 23:50 | 2490750 potlatch
potlatch's picture

shhs.  that ruins the "fiat is worthless" argument the kewl kidz here favor.  they don't like the fact we really can blow the fuck up anything we goddam decide to, and that maybe, just maybe, all that tonnage of military hardward is part of the "market" too.  shhhs.  no one likes to talk about it.  its rude.


no wonder too.  its the ultimate leverage. and no one here can get in on it, unless they want to put skin in the game at the corporeal level.  what some see as a tipping point, most likely would just be a military phase, most likely via a crisis with Iran.


But that's  This is zerohedge.  I guess at the end of the day, NATOhedge just makes me have real nightmares, not just $ ones.

Sun, 06/03/2012 - 22:49 | 2490652 Mary Wilbur
Mary Wilbur's picture

So what exactly is supposed to happen if crossover occurs?

Sun, 06/03/2012 - 23:02 | 2490680 El Hosel
El Hosel's picture

"The Markets?"! WTF?... there ain't no markets anymore.

 Intervention,manipulation,QE,stimulous, bailouts, fixes, are all substitutes for Markets. We can't have / handle "Markets" anymore because they require price discovery. The whole game now is to print trillions of dollars so as to prevent Markets from doing what  Markets do. Print money and reinforce the illusion, tell the story, kick the can, buy more time.

Sun, 06/03/2012 - 23:58 | 2490777 jcmjr
jcmjr's picture

CNBC broke into regular Sunday evening programming with Kramer and crew to discuss "Market Tummalt". Kramer recommended gold, how funny is that!!

Mon, 06/04/2012 - 00:55 | 2490854 Cosimo de Medici
Cosimo de Medici's picture

Germany has agreed to tell everyone else in the EU how to run their countries, but will allow these countries to do it on their own dime.  The periphery has agreed to take Germany's money in exchange for retaining domestic sovereignty.

SOLVED.  That was easy.

Mon, 06/04/2012 - 01:28 | 2490873 hedgehog9999
hedgehog9999's picture



Buy Booze, Toilet paper, small gold coins,cans, razors and everything that will keep its value as the SHTF over the next 6 months!

Mon, 06/04/2012 - 06:31 | 2491033 PR Guy
PR Guy's picture



Razors? WHy the hell would I want a razor if I don't have a job once it all blows up? Shit - I only shave to keep 'the man' happy and keep paying me. As for toilet paper, if it does all blow up and everything goes tits up, I will gladly wipe my ass with next doors kids - they're annoying  little bastards.

Nope, when all this blows up I'm turning into a ZZ Topper and when I want to blow my nose I'll say: "Pass me one of those banker-chiefs will ya?" and then snot all over a banker.

Mon, 06/04/2012 - 06:33 | 2491036 PR Guy
PR Guy's picture

Sorry. I forgot to say "bitchez"

Mon, 06/04/2012 - 01:36 | 2490882 AurorusBorealus
AurorusBorealus's picture

Dear Ben Bernank,

I need money and a lot of it or else I will make sure that the whole world suffers.  Send the check now or there will be hell to pay.



Does this make me a terrorist or a banker?



Mon, 06/04/2012 - 01:49 | 2490898 FreeNewEnergy
FreeNewEnergy's picture

I sure sniffed a hell of a time to stop picking my nose.

Something like that.

Mon, 06/04/2012 - 03:19 | 2490942 Lore
Lore's picture

"Moreover, every bark comes with a loss of credibility – a loss of faith in the institutional capacity of the European Union to address the fundamental imbalances. Reining in the market eventually may end up taking a bigger effort than policymakers are bargaining for. The market needs to know what policymakers are committed to and it needs to see actions that validate those commitments. Inaction is just a carte blanche for investors to sit on the sidelines and wait for things to deteriorate further."

Herein lies the rub. If they did the responsible thing early on, and simply stood back, there would be no plea for crisis management now. The one lesson that we should all take away from this after the dust finally, finally settles is that more government begets more government, and believe it or not, that's bad.

Mon, 06/04/2012 - 06:40 | 2491042 cnhedge3
cnhedge3's picture

On Spain’s banking recap and capital flight

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