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The Punch Line: "Crash Test - Bracing For Breakup"
And now it is time for our favorite monthly chart-only newsletter, The PunchLine by Abe Gulkowitz, who unlike the momentum chasing crowd which has an attention span measured in inverse significant digits, and has a brokerage account (but endless monopoly money) that is even smaller courtesy of always being on the receiving end of a market which actually needs commission payments on both sides of those candle charts, sees well behind the headlines designed to sucker in the feeble minded twitter-traders, and presents it all with gorgeous, chartific clarity. And the only thing better than the insight of his hand-picked charts is the focus of his narrative, which speaks volumes without actually speaking volumes: "European banks are dumping government debt, deposits are draining from south European banks and a looming recession is aggravating the pain, fuelling doubts about the survival of the single currency in the European zone. Between the bookends of economic data points, rating agency actions, and political developments - - market gyrations are seriously affected by policy directions. A key consideration for any 2012 forecast is the impact of public policy on risk premiums and business confidence. Persistent fears of major policy missteps could come to a head at any time regarding the U.S. fiscal nightmare and Europe’s responses to the sovereign and banking crisis. One now needs to believe that the policy environment – both in the US and Europe – could serve as significant headwinds to growth in 2012."
He continues:
Out of respect for the power of policymakers ahead of another EU summit, market sentiment has shifted wildly on the crucial developments in Europe along with the continued chatter of EU leaders. Indeed, investors actually responded rather favourably to Italy’s recent bond auction results. They got the money. Despite paying yields well above the precarious 7% threshold, the auction placed close to 7.5 bln euros in 3 and 10-year bonds at yields of 7.89% and 7.56%, respectively. With all the scare emanating out of Europe and elsewhere, the U.S. ends up looking good again. But even with some better data recently in the U.S., many have become more concerned about the sustainability of the recovery next year. This is true for corporations, but even the Federal Reserve is now considering scenarios that would have been unthinkable even earlier this year. The global economic recovery is looking more like it is running out of steam, leaving the EU stuck in a constrained growth path. Tighter financial conditions, the growing threat of rapid bank deleveraging and the protracted policy makers’ bickering are likely to result in a weaker 2010-12 recovery path in the EU, and the risk of many other regions following suit. While solid growth in big emerging economies would provide a supportive boost, there is already evidence that slumping global trade could drag down even Chinese output. Many now project world trade growth to slow to only 4.8 per cent in 2012 from a likely 6.7 per cent this year.
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El-Arian: “ (the new liquidity policy) “it lowers the cost of emergency financing and it increases the scope of emergency financing”.
Um… emergency financing?...
Apparently, it doesn’t seem to remove the emergency, it just makes is easier to borrow more money during the emergency. And unless I read this wrong, too much borrowed money IS the emergency.
He also uses the term “breakage”.
I didn’t hear the term “FIX” anywhere.
http://media.bloomberg.com/bb/avfile/News/Surveillance/vSo3xdfIVMYc.mp3
No it doens't address the emergency at all, this was a hail mary pass to buy the global economy enough time (10 days) for the EU to get its house in order... which we all know is a pipe dream, will never happen.
So basically this has bought us a few more days before the shit storm makes landfall.
Shitstorm cometh.
I would say tomorrow already there wil be signs of "shitstorm." I am not saying exactly what, but it is already scheduled into the economci calendar, waiting to hit the fan.
OT: These are the tiny slices of civil dissonance that make me perk up and believe we have a chance:
A 103-year-old woman and her 83-year-old daughter got a last-minute eviction reprieve when sheriff's deputies and movers decided they couldn’t uproot the women from their longtime Atlanta home.
http://usnews.msnbc.msn.com/_news/2011/11/30/9122056-deputies-refuse-to-evict-103-year-old-woman
The out of work employees of Steven J. Baum would gladly step in and help move this 104 year old woman to the curb. They loved their work.
Hello all,
I highly recommend that you all watch these videos. This is the most revealing knowledge that I have injested since reading John Perkins book "Confessions of an Economic Hit Man".
Exchange Stabilization Fund
http://www.youtube.com/watch?v=2ssrcD5GdPQ
http://www.youtube.com/watch?v=ImuVUab6WW0
http://www.youtube.com/watch?v=8Qsll_5-FXc
http://www.youtube.com/watch?v=iK-741ISz94
http://www.youtube.com/watch?v=lQf-u2nCVSw
holy shit..
some interesting thoughts in those vids
The storm needs a name for posterity, how about "El Feco" ?
Give it a sovereign Italian ring... "Tempesta d'Defecazione".
You know what a shit barometer is, Bubbs?
Measures the shit pressure in the air.
The charts tell the story here. THe indices broke down out of a head and shoulders and went straight into a classic broadening formation, signalling a crash dead ahead. It's a good bet that today will look like opportunity lost soon enough for those who covered.
<img src="http://www.flickr.com/photos/57106744@N06/6433538107/" />
http://books.google.com/books?id=WjuKiLTy9aYC&pg=PA31&lpg=PA31&dq=broade...
This is becoming a classic crash scenario. This game is about to end.
breaking up is a hard thing to do
Anybody who uses the emergency financing will get shorted ruthlessly by all the other banks. That is another problem. El-Erian has never had to deal with such situations, being employed by Harvard Endowment and Pimco.
Exactly. These people only know the bull market in the demographic they reside. The ivory tower they live in was done by the largest social welfare state extension, I would even guess by now larger than the USSR had ever been.
ZH missed two interesting news pieces today:
1.) Getco bought BACs MM business.
2.) Blankfein might get deposed from his CEO position as a result of insider trading now being investigated in relation to Raj.
Actually the only important piece of news we missed today is the following:
EU monetary chief sees 10 days to rescue euro zone
The euro zone is entering a critical 10-day phase that could go a long way to dictating its future, the currency bloc's economic and monetary affairs chief said on Wednesday.
Following is a breakdown of the key events up to and including a December 9 European Union summit that is increasingly seen by investors as possibly the last chance to avert a breakdown of the single currency area.
For a graphic on how markets have reacted to key European policy meetings this year, click: r.reuters.com/van64s
THURSDAY, DEC. 1
- French President Nicolas Sarkozy will make a speech presenting proposals for closer fiscal integration among euro zone members.
- Spain will tender up to 3.75 billion euros of bonds at auction while France, also now under the market cosh, is aiming to sell up to 4.5 billion euros of paper, this after Italy was forced to pay nearly 8 percent to borrow for three years this week.
- European Central Bank President Mario Draghi to present that ECB's annual report to the European Parliament.
FRIDAY, DEC. 2
- Chancellor Angela Merkel is expected to make a speech outlining Germany's vision for fiscal integration, a day after Sarkozy did the same.
- Sarkozy will meet British Prime Minister David Cameron with the key issue being Britain's willingness, or lack of it, to allow a process of EU treaty change to forge closer euro zone integration in return for the chance to repatriate some powers to London. Treaty change requires unanimous support.
MONDAY DEC. 5
- New Italian Prime Minister Mario Monti is expected to set out his debt-cutting measures in Rome, having been told by Brussels that he would have to take extra measures beyond an austerity plan already adopted to meet its balanced budget promise in 2013.
WEDNESDAY, DEC. 7
- Centre-right EU leaders meet in Marseille for two days. Merkel, Sarkozy and incoming Spanish premier Mariano Rajoy will be there on Thursday as will top EU officials Herman Van Rompuy and Jose Manuel Barroso. Rajoy, not due to be sworn in until later in December, may outline some of his economic plans.
- The Greek parliament is expected to vote on its 2012 austerity budget, a crucial part of its bailout terms. Once passed, it will herald the return of the troika - comprising representatives of the European Commission, the European Central Bank and the IMF - to Athens the following week.
- Germany will auction around five billion euros of five-year debt. Last week it suffered a near failure with the authorities having to pick up about 40 percent of the paper that investors would not buy.
THURSDAY, DEC. 8
- Last ECB policy meeting of the year. A Reuters poll of economists forecast a 60 percent chance of a rate cut to 1.0 percent and a big majority said they expect the central bank to announce new long-term liquidity tenders to help keep banks afloat. The poll gave a 40 percent chance of the ECB stepping up bond purchases with freshly printed money within six months, something it has opposed so far though it may eventually have to conclude that the biggest threat lies in recession, a credit crunch and the risk of deflation rather than inflation.
- EU leaders gather in the evening in Brussels for a working dinner prior to Friday's summit.
FRIDAY, DEC. 9
- EU leaders' summit in Brussels. The focus will be squarely on new rules to tighten fiscal integration. The question is whether that will be done via time-consuming treaty change which would need to be ratified by all 27 EU members or whether a shorter cut, involving the single currency group pressing ahead alone, will be pursued. The optimistic view is that embarking on that process will calm financial markets but that is indeed optimistic. Dramatic measures involving the ECB breaking its rules by radically increasing its bond-buying support are unlikely at this point but there will surely be discussions about a way to get the IMF more involved, probably with money paid over by euro zone central banks. Analysts say a summit that falls short could lead to a harsh market reaction that could force a rapid reappraisal by policymakers, some of whom have already identified January as a potential crunch point.
Thanks Tyler, all of that is certainly more important. The twe I pointed out, I just called them "interesting."
Does the "shorter cut" involve Panzers and the Luftwaffe?
December 09th.....the next last chance to save the Euro.
11-30-2011, Last chance to buy metals at a good price? How about beans?
Yabby, a totally unscientific observation on my part that just happened to stick in my head that I hope will be helpful. On a recent grocery store visit, I noticed that the price of dried bean's was roughly twice of what I had paid on my last purchase of same ( four month's ago). I have no idea of what this might mean.
How is deflation a concern at this point??? Why would deflation happen?
Got Mish?
Top 10 ...
http://www.youtube.com/watch?v=Gk-CI8WD4zc&feature=related
aren't they beautiful?
TUESDAY, DEC. 20
- Los Angeles and Los Alamos leveled as 500,000 invade west coast, Obama seeks resolution to Greek Crisis after golf tour in Antartica.
/lol/
Blankfein will not get deposed. Rajat Gupta will take it in the ass, but Blankfein will survive as he is doing God's work.
Go Gauchos?
God sells shitty CDO'os?? Talk about mysterious ways!
http://www.nj.com/news/index.ssf/2011/11/number_of_nj_residents_on_food....
Number of N.J. residents receiving food stamps doubled in last four years
http://www.post-gazette.com/pg/11333/1193300-147-0.stm
Flying to Philadelphia? Unbuckle the purse
US Airways, sole carrier starting in January, hikes fare from $118 to $698
http://www.examiner.com/law-enforcement-in-national/obama-cover-up-court...
Court records of border patrol agent murder sealed
The Obama Administration has suddenly and without warning sealed court records containing alarming details of how Mexican drug smugglers murdered a U.S. Border patrol agent with a gun connected to a federal government snafu that allowed firearms to be smuggled into Mexico, according to a top non-partisan organization that investigates government corruption and fraud.
Your David Rosenberg/Gluskin Scheff fix:
Part 1
http://watch.bnn.ca/#clip577279
Part 2
http://watch.bnn.ca/#clip577280
Part 3
http://watch.bnn.ca/#clip577281
So what's the half life of this? So the Fed gave a hopeless drug addict a black American Express card and told them to clean up their act...seems like a solid plan right?
More printing and debt is good for at least another 6 months. Ray Dalio's prediction seems to be right on track...
Fuck the FED!
All that is bullish for America. (except for the whole banking system going down thingee, but don't worry, the FED can supply the banks with unlimited money)
Hang these psycho bastards. I'm sick of this shit.
Well, try to look at it from the bankers' point of view. Their wives are already bitching that the Christmas bonus just ain't enough! Drastic action required!
This was all Goldman coordinated... No one mentione that Criminal Sachs stopped out their Buy china call just a day ago and after 5% loss, and that is after calling it a buy just few days before that to place their block, and that is just when they stopped out their buy EUR call.
buy china buy eur just to fuck everyone over?
Those lowlifes make it look like they can't find their own dick with both hands.
The only difference between now and 2008 is the storm that is either coming or already here is being prepared for instead of coming out of nowhere. Central Banks can only print so much. Inflation or should I say Hyperinflation is a bitch. Fuck are they thinking. Big woop-e-doo, central banks are offering a lower interest rate on there swap lines. Equities are acting like that is going to save the world when actually the fed doing this is a signal that shit is hitting the fan fast.
this is from Gary Dorsch Sirchartsalot.com it all hinges on getting Barry back in the WH.
The EU is going to announce a break up soon and a new currency will be created. Thats why all the central banks will need to be able to access each other's currency at a low rate because a new currency will buy other country's currncy in order to establish its value and rate of exchange. This will tighten liquidity further and cause a lot of printing.
I think this is a possibility. Total head-fake to all the bulltastic pump-and-dumpers out there.
Of course I lost my ass today but I still think being short is safer than being long this market.
Do any one of you bastards work for the Fed or the squid? Just call me and let me know when its finally time to place my array of 3x and 2x shorts in the 403B. Will Ya?
Re the Gluskin interview referenced above:
Your David Rosenberg/Gluskin Scheff fix:
Part 1
http://watch.bnn.ca/#clip577279
Which French bank was aboout to fall over today? Any solid info comrads pls and thanks?
Look back over reggie's posts - I'm sure he already nailed it.
bnp paribas, was the frontrunner
Isn't all this just window dressing until either the Fed or ECB agrees to expand their balance sheet (i.e. print money)? Or is this what just happened?
I feel like that picture of a deer in the headlights. Do I go long and get my face ripped off, or do I go short and get my face ripped off, or do I stay in cash and have my face slowly ripped off.
Dude, No offense, but your avitar needs a little face ripped off.