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A Shocking €1 Trillion LTRO On Deck? CLSA Explains Why Massive Quanto-Easing By The ECB May Be Coming Next Month

Tyler Durden's picture





 

It is a pure coincidence that following the previous report of stern condemnation of traditional ECB QE in the form of Large Scale Asset Purchases (LSAP) by the Bundesbank, we should follow it up with the latest analysis by Chris Wood of CLSA's famous Greed and Loathing newsletter, in which the noted skeptic does an about face on his existing short European financial trade and covers such exposure, while observing the much-discussed major shift in ECB liquidity provisioning as the catalyst. As he says, "the main reason to do [cover the Euro short fin trade] is the potential for a benign interlude provided by the ECB’s increasingly aggressive liquidity support for the European banking system." And while his trade reco may or may not be right (if we were betting people we would put our money on the latter), what is interesting is the basis for the material change in exposure which to Wood is explained simply by the dramatic shift in the ECB approach toward monetary generosity, courtesy of the arrival of ex-Goldmanite Mario Draghi. The basis is the first noted here massive surge in the European balance sheet (Figure 2) which while not engaging in prima facie monetization, has done so via indirect channels, in the form of an LTRO, which is basically a 1%, 3-year loan, but more importantly, a balance sheet expansion which while having failed to increase the velocity of money in any way (with all of the LTRO and then some now having been redeposited back at the ECB as reporter earlier), has at least fooled the market for the time being that any sub 3 Year debt is "safe" as seen by Figure 1.

And since it has worked once, in the eyes of central planners it should work again, until it fails. Which it naturally will, just like the first LTRO iteration from 2008. But first, it will be expanded to a very ludicrous level, which will lead to the one outcome that Germany wants more than any other - send the euro plunging (remember - the primary correlation of 2012 is the ratio of ECB to FED assets), at least until the Fed steps right back into the currency devaluation fray, which it likely will as soon as March. So just how large will the next LTRO be? "Market talk is focusing on an even bigger amount to be borrowed at the next 3-year longer-term refinancing operation (LTRO) due on 29 February. GREED & fear has heard guesstimates of up to €1tn!" That's right - it is possible that in its quanto monetary diarrhea (but at least it's not printing, so the Bundesbank will be delighted), the ECB is about to increase its balance sheet from €2.7 trillion to € €3.7 trillion, or a €1.7 trillion ($2.2 trillion) expansion in 8 months! And gold is where again?

Chris Wood explains:

By creating a massive incentive for European banks to buy their government’s debt issuance up to three years maturity, the new ECB leader Mario Draghi is clearly seeking to get control over the direction of Eurozone government bond yields. The dramatic decline in Eurozone bond yields up to three years suggests he is getting some traction (see Figure 1). It is also the case that absolute-return investors may be tempted to “front run” coming bond auctions if they think the ECB policy is working. On this point, market talk is focusing on an even bigger amount to be borrowed at the next 3-year longer-term refinancing operation (LTRO) due on 29 February. GREED & fear has heard guesstimates of up to €1tn!

The result is an exploding balance sheet controlled, of course, by an ex-Goldmanite, which can only be halted by Germany, but why when the EUR is crashing, keeping the German export economy vibrant.

True, the above upbeat mood can be undermined in a second by a word from Berlin indicating that Germany does not approve of Draghi’s only too evident easing intentions. It is also the case that criticism is already coming from Germany about the latest draft of the fiscal compact which contains a derisory lack of “teeth” in terms of actual measures to enforce good fiscal behaviour. Still Draghi’s responsibility is monetary policy not fiscal policy. And based on GREED & fear’s observations thus far, it is clear that former investment banker Draghi is a smooth if not slick operator who is adept at saying one thing and doing another. He will also understand that the goal of monetary easing will be undermined if it arouses German opposition. For that reason investors should assume for now that he will have the political skills to keep the Germans onside. Meanwhile, for the moment it is politically correct in Berlin to keep the banking system liquid via ECB extension of credit courtesy of dramatically relaxed collateral standards, even if it is not yet “PC” to monetise Eurozone government debt outright.

 

The resulting backdoor quanto easing in Eurozone is clear from the recent surge in the ECB’s balance sheet relative to the Fed’s. Thus, the ECB’s total assets have risen by 38% from €1.94tn on 1 July 2011 to €2.69tn on 6 January 2012. While the Fed’s total assets have risen by only 1% from US$2.87tn to US$2.9tn since July 2011 (see Figure 2).

 

Conclusions?

There are two investment conclusions to draw from this. First, investors should assume a continuing weakening in the euro. On this point, one of the key developments so far this year is a decoupling of the euro from risk currencies such as the Aussie dollar (see Figure 3). Second, the likelihood of a significant weakening in the euro creates the clear potential for European stock markets to outperform the S&P500 this year, given the benefits to European exporters of a weaker currency. Meanwhile, one reason GREED & fear is convinced the euro will head lower is based on the view that Draghi will be quite ready to cut rates to zero if inflation data in Europe can justify such easing. Right now the money markets are discounting only a 25bp cut this year.

Clearly, all of the above does not mean that Eurozone crisis is over. There are plenty of potential landmines, for example the continuing negotiation on the Greek debt restructuring. GREED & fear also still believes that market pressure will ultimately force a more concrete fiscal union as a quid pro quo for more outright monetisation. Still with the highly flexible Draghi at the helm, and with the usual want-to-be-bullish New Year sentiment, it is too risky to keep on the recommended hedge since the risk at this juncture is all of the gains made are wiped out by a violent bear market rally.

More importantly to fans of sound currency, the bottom line is that between the ECB (assuming it does proceed with a €1 trillion LTRO), and the Fed (assuming it does go ahead and launch a $600 billion minimum (and as much as $1 trillion) QE3 as every bank expects by June), the global balance sheet will have increased by nearly $3 trillion since July, even as gold has actually declined in price. And if anyone needs the final clue as to what is going on, an increase in the US debt ceiling to $16.4 trillion which is expected to pass imminently, would mean that by simple correlation a fair value for the yellow metal would be just under $2000 per ounce.

 

So going back to the first paragraph: "And gold is where again?"

 


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Mon, 01/16/2012 - 17:25 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

With Mario Draghi in charge of the mint

The EU will surely, surely print

Mon, 01/16/2012 - 17:28 | Link to Comment trav7777
trav7777's picture

icanhaz trillionz, bitchez?

Mon, 01/16/2012 - 17:40 | Link to Comment SheepDog-One
SheepDog-One's picture

Hell, lets just call it QUADRILLIONS and solve every problem in the world! What could possibly go wrong?

Mon, 01/16/2012 - 18:17 | Link to Comment Manthong
Manthong's picture

Yeah, a guy I know heard that a dude who has a friend over at the waffle joint says two bankers were talking something about "3 septillion yuros" going for some kind of fun or facility or something like that.

I think he said I shouldn't wear shorts or whatever and it would be good to get cold.

Didn't make any sense to me.

 

Mon, 01/16/2012 - 18:20 | Link to Comment nope-1004
nope-1004's picture

When I was a kid, $1Trillion was a lot of money.

Now?  meh...

 

Mon, 01/16/2012 - 18:43 | Link to Comment GOSPLAN HERO
GOSPLAN HERO's picture

Revelation 13:16 “And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads”

Revelation 13:17 “And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.” ONE WORLD CURRENCY, COMRADES.

Mon, 01/16/2012 - 20:07 | Link to Comment NewThor
NewThor's picture

My brain hurts and my heart is heavy

as I wait for Faithful and True,

down by the levy.

Mon, 01/16/2012 - 22:10 | Link to Comment Transformer
Transformer's picture

Drove my Chevy to the levy

But the levy was dry.

Tue, 01/17/2012 - 02:40 | Link to Comment jeff montanye
jeff montanye's picture

governments world wide are finding out that the levy has indeed gone dry.

the embankment is levee.  

Tue, 01/17/2012 - 09:18 | Link to Comment LoneCapitalist
LoneCapitalist's picture

When the levy breaks, momma you got to go. Oh well, Oh well, Oh well.

Mon, 01/16/2012 - 20:35 | Link to Comment Rodolfito
Rodolfito's picture

The assholes that are currently crashing the world economy, also wrote the bible in 800 AD, and they need us all to have been programmed to accept the RFID chip (the mark of the beast). I, for one, would rather die than accept their chip. So, I refuse all vaccines (because nano-RFIDs are in them - eg. swine flu vaccine), and when the outbreak of avian flu (H5N1) comes along, this year or next, they will wheel out the pre-prepared H5N1 vaccine / RFID chip combo. Once you have this chip, you are marked for life, trackable, controllable, etc. Only accept it if you can cope with the concomitant slavery.

Mon, 01/16/2012 - 22:16 | Link to Comment Transformer
Transformer's picture

Get your blood serum vit D levels checked, and begin a program of regular vit D supplement, to keep your levels up.  This fights flu and gives you 100-12,000 times the protection of flu shots (from peer reviewed papers on the subject).  If we have a killer flu outbreak, those with high D levels may be the majority of the survivors.  If you come down with a cold or flu, taking 35K units right away, and two more times at 12 hour intervals will usually knock it out quickly.

Mon, 01/16/2012 - 22:32 | Link to Comment smiler03
smiler03's picture

You are a fucking moron who deserves to die from your own lunatic advice. Go ahead and make my day.

Mon, 01/16/2012 - 23:58 | Link to Comment SilverRhino
SilverRhino's picture

Actually he is dead on. See studies from the 1918 flu pandemic. Vitamin D recipients had a much higher survival rate than non recipients.

Mon, 01/16/2012 - 22:05 | Link to Comment Wixard
Wixard's picture

Never ascribe to malice that which is adequately explained by incompetence -

 

Napoleon  

 

 

While It's entirely possible there's a secret society behind the scenes giving suspiscious minds nightmares, it's equally possible and more likily that it's simbly a bunch of idiots.

I think another fitting quote:

 

"Do you not know, my son, with what little understanding the world is ruled?"
--Pope Julius III

Tue, 01/17/2012 - 08:29 | Link to Comment A Dim View
A Dim View's picture

"Man will never be free until the last king is strangled with the entrails of the last priest."
- Denis Diderot (1713-1784)

 

says it all really...

Tue, 01/17/2012 - 15:12 | Link to Comment ebworthen
ebworthen's picture

And the new Kings are Bankers, and the new Priests are Politicians.

Mon, 01/16/2012 - 20:42 | Link to Comment Cadavre
Cadavre's picture

Back in the daze your humble narrator was checking out them dirtly little pamphlets in the Dad's bottom drawer and ran accross a really old Playboy with an ad for an upscale watch model #666!

What are those USD shorters going to do - ooooh noooo - the entire US market is a long EUR bet - I guess it will all equalize when the S&P (again) downgrades the land of the dazed home of the schweeeeee ...

Mon, 01/16/2012 - 20:46 | Link to Comment Obadiah
Obadiah's picture

The Mark is the "seal" IN your forehead  meaning In your Mind.  It wont be a physical Mark.  GS is much smarter than that.  I mean Satan is...

Mon, 01/16/2012 - 18:47 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

 

Fringe Blogger Bearing explores numbers like trillions (in US national debt) in his new article at his blog.  I look at what 3% inflation means over a longer period of time.  And also look at 11% per year growth in our national debt for a really ugly picture.

"Exponential Growth"

If you would like the link, please gmail me at my name and promise me you will behave.  I make ZH-ers do this runaround in an attempt to keep out robots and spammers (two of the latter have made it through the gates though).  How can 230 Zh-ers be wrong?

Mon, 01/16/2012 - 19:39 | Link to Comment s2man
s2man's picture

Why bother emailing?  A quick google shows DCRB's blog is http://robertmixblog.blogspot.com . Let the spam begin.

Mon, 01/16/2012 - 20:37 | Link to Comment ReactionToClose...
ReactionToClosedMinds's picture

Nice reasonably 'straight' blog

(I say straight since the current trend seems to advocate more and more outrageous views versus reasoned factually based discussion/analysis .... no one possesses ultimate wisdom ... last I knew we are all human subject to the weaknesses of our condition ....... I continue to expect that some day Paul Krugman will make a convincing point even though his batting average is abysmally low).

Regarding Marc Faber's 2011 Barron's investment picks down below 20%.  Go do a cumulative aggregation ..... Faber has had some monster years leaving his counterparts oftentimes in the dust.  Do not judge anybody by last year ...... these are very very different times we live in ... for all the reasons discussed here at ZH.  Ignore Faber at your own peril .... lately (the last 5 years) he has been more on target than almost anyone else .....

Have subscribed to Barron's since late 1980s.  Without question, Zulauf, Faber and Hickey have been ahead of the curve consistently.  That is why they have credibility.  I was saddened to see Archie McAliister had passed away ... he was very good in the insurance sector.  Gabellli is a classic stock-picker and Meryl Witmer I've come to respect as a good picker also.  Abby is essentially  a 'shill' ... and I do not mean that as derisively as it sounds ....  but she is paid by GS to promulgate a line for a variety of internal functions & purposes ..... As long as you recognize that there should be no issue with her.  She is professional and was wonder woman in early 1990s ... so she gets my attention.

Scott Black is ok and you cannot ignore Gross as he (Pimco) and Larry Fink et al at Blackrock are major factors in the Treasury market. 

Abelson, I've increasingly come to dismiss ....... for too many reasons & some that are probably personal.

 

Santoli, Kopin Tan, Gene Epstein (their economist) and the options column (David Sears I think) keep me subscribed now.

 

Disclosures:

 

Long time WSJ Onliner (think charter)

IBD Weekend and online ( a must in any structural bull market ... seriously there is a ton of excellent unique info & data)

DecisionPoint subscriber .... excellent without question for pure technical analysis

Aden Sisters ..... have followed them for 15 years and they are excellent on the st, intermed & especially lt trends

The Economist .... used to be fantastic 25+ years ago (FT and Economist were both more purely finance/economics periodicals in a very hard-nosed old British way .... but to me since the 1990s The Economist as well as Fin Times seem to have targeted the New Democrats (see Clinton) as their natural audience versus WSJ/IBD readers and classic Euro-elites (the Euro is the 'answer' crowd) ... so they are a shade more tolerable than NYTimes (which still has some of the best true journalists working there still in an increasingly editorialized 'news' presentation).  Both are as 'wordy' without  really saying much but their style & analysis seems a little tighter  than typical  NYTimes pieces in my personal opinion.

Sy Harding's StreetSmart Report ..... good marks for intermediate timing in a simple clear way ... but am still undedcided ... maybe this year and next will  determine more clearly the value or not

 

ZeroHedge .... among the best of the blogs and any news site for edgy but highly relevant information..... it has it's ideological predisposition as well .... but much of that revolves around a broader discussion of what 'reality' really is ... versus what the 'overlords' portray to the masses in main stream media.

 

 

Mon, 01/16/2012 - 21:10 | Link to Comment francis_sawyer
francis_sawyer's picture

what 'reality' really is...

---

What 'reality' REALLY is, is that a fiat monetary regime based on fractional reserve banking has NO HOPE... NONE... ...of surviving indefinitely in a world that is arguably packed to the gills with population growth that requires an exponential growth calculus on a planet of finite resources... Have a nice day!

Mon, 01/16/2012 - 20:44 | Link to Comment Cadavre
Cadavre's picture

20% inflation is the new 3% inflation ...

Mon, 01/16/2012 - 19:33 | Link to Comment Bill D. Cat
Bill D. Cat's picture

Whoa , look at all those space bucks .

-Randy marsh .

Mon, 01/16/2012 - 17:29 | Link to Comment vast-dom
vast-dom's picture

This may clobber short positions in short term. We have abandoned all notions of funduhmentals and sound economics -- the only remaining question is how long this vaporizing hopium illusion can last¿

Mon, 01/16/2012 - 18:27 | Link to Comment LongBalls
LongBalls's picture

I've learned my lesson. The only short I make is by pulling my money out of the market to go long more beans!

Mon, 01/16/2012 - 18:27 | Link to Comment LongBalls
LongBalls's picture

I've learned my lesson. The only short I make is by pulling my money out of the market to go long more beans!

 

Yes....It was worth repeating.

Mon, 01/16/2012 - 19:33 | Link to Comment Ancona
Ancona's picture

The hopium will last until the screen in the bong gets clogged up. Until then......party on Garth!

Mon, 01/16/2012 - 17:32 | Link to Comment francis_sawyer
francis_sawyer's picture

Draghi wants to be like Woodrow Wilson and get his mug on the 100,000 Euro note...

http://1.bp.blogspot.com/_1Z5_frqW26w/SxKhKOjwyWI/AAAAAAAAJFY/33chR1-RdJE/s1600/US100000dollarsbillobverse.jpg

Tue, 01/17/2012 - 02:06 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

It says "One hundred thousand dollars in gold payable to bearer on demand."

Sounds like a gold standard doesn't it?

It's not.

They can change how much gold $100,000 worth is.  Overnight.  Without telling the public.

If a note doesn't say "X.XX oz of gold .999 pure", it's not a gold standard.

Mon, 01/16/2012 - 18:05 | Link to Comment francis_sawyer
francis_sawyer's picture

Don't call me "Shirley"

Mon, 01/16/2012 - 18:40 | Link to Comment Elwood P Suggins
Elwood P Suggins's picture

 

 

 

The ECB's getting quite bold

Or so the market is told

A trillion they say

May be on the way

And then what'll happen to gold

 

Mon, 01/16/2012 - 18:48 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Whoooooooooosh!

Mon, 01/16/2012 - 20:47 | Link to Comment BW
BW's picture

Speed up the presses.

Mon, 01/16/2012 - 21:05 | Link to Comment Zero Govt
Zero Govt's picture

Draghi prints, prints, prints ...not to save Euro bwankers, but sovereign debt (ie. Goldmans massive derivative and Govt debt exposure)

Goldmans 'Apostles of Destruction' are in poll position to destroy and lay waste to Europe as well as America 

should earn Blankfein a nice bonus

Mon, 01/16/2012 - 23:14 | Link to Comment ToNYC
ToNYC's picture

Capitaine Reynaud and Pentangeli say it was the PPT the whole time!

Mon, 01/16/2012 - 17:26 | Link to Comment SheepDog-One
SheepDog-One's picture

The Full Retard ceiling has been rocketed thru, put it all into gold.

Mon, 01/16/2012 - 17:30 | Link to Comment Sudden Debt
Sudden Debt's picture

WRONG!!
Here in europe we don't have a ceiling. THE SKY IS THE LIMIT!!

Mon, 01/16/2012 - 17:32 | Link to Comment SheepDog-One
SheepDog-One's picture

Well, so you think.

Mon, 01/16/2012 - 17:37 | Link to Comment Sudden Debt
Sudden Debt's picture

AHA!!. Got you again!!

WE DON'T THINK!! .... Hhmmmmm.... That sounded cooler in my head....

Mon, 01/16/2012 - 18:21 | Link to Comment nope-1004
nope-1004's picture

Arrow up, jus cuz.

lol.

Mon, 01/16/2012 - 18:50 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I gave you both one.  Same reason.

Mon, 01/16/2012 - 18:24 | Link to Comment silverserfer
silverserfer's picture

"we dont think we use our PASSION"

Mon, 01/16/2012 - 17:39 | Link to Comment constitutionalist
constitutionalist's picture

And if you're talking about a debt ceiling in the US I cant find that one either...Its half way through the first month of the year and we're broke, so no debt ceiling. 20 trillion here we come...(by Febuary) 

Mon, 01/16/2012 - 18:00 | Link to Comment francis_sawyer
francis_sawyer's picture

What we really REALLY need is a "Super-Duper Double Secret Committee" of appointed czars, so that they can spend 3 months seeing of they can squeeze out a coupla hundred thousand in budget restraints to keep us under the ceiling... 6 oughta do... We'll pay them each a million dollar bonus for their efforts...

Mon, 01/16/2012 - 20:07 | Link to Comment Chupacabra-322
Chupacabra-322's picture

Austin Powers - 100 billion dollars

http://www.youtube.com/watch?v=jTmXHvGZiSY

Mon, 01/16/2012 - 17:29 | Link to Comment 847328_3527
847328_3527's picture

Get those suckers printing!

http://macromon.files.wordpress.com/2010/11/euro-printing-press.jpg

 

What's that sloshing around out there?

"...the global balance sheet will have increased by nearly $3 trillion since July...."

Mon, 01/16/2012 - 17:50 | Link to Comment ihedgemyhedges
ihedgemyhedges's picture

AWESOME!!  I get to answer two questions in the same post:

TD asks: "And where is gold again?" Answer: Wherever TPTB think it is manageable.

847328_3527 asks: "What's that sloshing around out there?"  Answer: Kim Kardashian's ass.  I hear ratings are down and she's having to work harder..............

Mon, 01/16/2012 - 18:02 | Link to Comment francis_sawyer
francis_sawyer's picture

"And where is gold again?" Answer:.."

Probably mostly in a vault in NYC, but definitely NOT in Germany...

There...fixed it

Mon, 01/16/2012 - 19:43 | Link to Comment s2man
s2man's picture

The gold is in my... Oh, you almost fooled me into telling you where it is. ;-)

Mon, 01/16/2012 - 20:25 | Link to Comment francis_sawyer
francis_sawyer's picture

You had me scared there for a minute... I thought you were just about to tell me that you had it all stored in your two Olympic sized swimming pools & that the Annunaki were coming along to pick it up on December 21st...

Then we'd REALLY be in FIAT hell...

Mon, 01/16/2012 - 20:47 | Link to Comment Rodolfito
Rodolfito's picture

Yes, the annunaki need it to monoatomise it, to increase their brain processing power ... fuck, so that's what all the fuss is about. Of course, it wouldn't be the Rothschilds stockpiling all the world's gold in their subterranean vaults for the last 500 years, while advising the public to dump it (see Jacob Rothschild last October), while suppressing the price (other Rothschilds).

This is Frasier Crane, wishing the annunaki good mental health.

Mon, 01/16/2012 - 20:58 | Link to Comment francis_sawyer
francis_sawyer's picture

Well as far as I'm concerned, the Rothschilds can come pry mine out of my cold dead monoatomized skull (if I could only remember where I put it)...

Mon, 01/16/2012 - 23:19 | Link to Comment ToNYC
ToNYC's picture

The gold don't need to be there, uncle berkshire left scads of CDS in its wake that more than cover the show piece.. Trust me, he didn't really want to take the metal and actually is hating on it right now.

Mon, 01/16/2012 - 17:34 | Link to Comment Sudden Debt
Sudden Debt's picture

Yeeeaaahhhhh!!.!

Saved again!!

THE BAR IS BACK OPEN!!
FREE TEQUILLA SHOTS FOR EVERYBODY!!!!

And let's do the Merkel Dance!!.
http://www.youtube.com/watch?v=sv-0XjrBVT0&sns=em

Yihaaaaaaaaaaaaa!.!!

Mon, 01/16/2012 - 17:35 | Link to Comment SheepDog-One
SheepDog-One's picture

Yea well....remember this guys conclusion of an impending $2.2 trillion LTRO is not 'hard news', its simply based upon the idea that they did it before and it failed so now theyre totaly screwed and therefore they have to do it again...personaly Im not betting a dime on it myself.

This is just counter-balance to todays real bad news.

Mon, 01/16/2012 - 17:40 | Link to Comment Sudden Debt
Sudden Debt's picture

http://www.youtube.com/watch?v=nGeKSiCQkPw&sns=em

Why worry... This is so funny!!

Mon, 01/16/2012 - 17:45 | Link to Comment Ratscam
Ratscam's picture

Black Rock owns 10 to 30% of all DAX traded companies.
Why doesnt this surprise me?
http://www.theintelligence.de/index.php/wirtschaft/finanzen/3859-ein-ges...

now the question is who owns Black Rock?

Mon, 01/16/2012 - 18:31 | Link to Comment silverserfer
silverserfer's picture

Wall St just needs to come out of the closet and get some flashy lights, circ de soleil shows and delicious free buffets and they will get more investors back. At least then instead of just throwing their $ away they will get some entertainment value from visiting the HOTTEST CASINO IN MANHATTAN BABY!!

Mon, 01/16/2012 - 18:57 | Link to Comment Dave Thomas
Dave Thomas's picture

It'd be easier just to move Wall Street to Vegas, think of all the shovel ready jobs that'd make. Then you could fill all that languishing real estate volume with douchy financial types. Then when the whole thing goes tits up, just turn off the water and electricity to the place. It's a win-win.

 

Mon, 01/16/2012 - 17:30 | Link to Comment BandGap
BandGap's picture

Worrisome that the Fed and the ECB are in publicly open lockstep.  All to save the ship. 

Mon, 01/16/2012 - 17:38 | Link to Comment Rainman
Rainman's picture

....and for his next act, Bernank is forced to monkeyhammer his own homemade fiat

Mon, 01/16/2012 - 21:14 | Link to Comment Zero Govt
Zero Govt's picture

we thought blowing bubbles for 40 years was bad enough ...and coming to an end

Nope, they're only just getting started

still a Central Banks $3 Trillion pales next to Blankfein & Dimons $700 Trillion in derivatives... when it comes to blowjobs nobody blows em like these NY porn stars

Mon, 01/16/2012 - 17:31 | Link to Comment GoldmanSux
GoldmanSux's picture

Draghi basically said today last months LTRO was for banks to rollover their maturing bonds this month and next. The funds for next months LTRO can more freely be used to buy sovereigns. No one gives a crap what the Bundesbank says.

Mon, 01/16/2012 - 18:19 | Link to Comment DavidPierre
DavidPierre's picture

 Kiting Cheques

Most people are familiar with this colloquialism, as it is an expression which is frequently encountered along-side another, ever more present Western colloquialism: “deadbeat”.

 Deadbeats kite cheques – it’s as natural to them as breathing. They write one bad cheque to supposedly “cover” another one. And as long as people are foolish enough to accept cheques from a deadbeat, the deadbeat can continue to delay his own bankruptcy.

Since Western economies went off of the gold standard and began a new era of permanent deficits, all Western economies have been “cheque-kiting economies”.

The only way in which all of these economies have been able to delay their own bankruptcy is by “kiting” ever larger cheques.

Politicians and banksters have been totally transparent: they are kiting these cheques to themselves... “create money”... at which point they take all of this funny-money and go around buying-up assets to drive up prices, and supposedly generate economic growth through what they absurdly call a “wealth effect”.

The deadbeat mentality of bankster and politician alike clearly on display. Only the most ignorant or shameless deadbeat could actually assert that you can “create wealth” by kiting cheques. Rather, all that can be created by kiting cheques are Ponzi-schemes: pumping up a particular asset or market with bogus flows of “money”.

Once Europe’s cheque-kiting Ponzi-schemes have finished imploding, the USSA is next.

This form of economic fascism (popularized by the demonic Milton Friedman) has consistently destroyed economies around the world for 40 years.

Mon, 01/16/2012 - 18:34 | Link to Comment silverserfer
silverserfer's picture

Unless you are able to accumulate most of the worlds tangible assets with said cheque kiting. If you can get away with it for 100 years you can accumulate quite a bit of gold, land,  and military might.

Mon, 01/16/2012 - 20:06 | Link to Comment jekyll island
jekyll island's picture

Correct.  Gubmint gets money laundered by central banks, banking cartel gets fees and priviledges created by their relationship with Gubmint which they use to mint their own money.  All of this is paid for by inflation, which is presented by the MSM as something as natural as breathing.  Damn, I should have been a banker.  

Tue, 01/17/2012 - 00:31 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...well said David. Perfect and simple enough for most voters to understand, like; people ignorant enough to cast their vote for the two party contempt, (whoops!) >>not<< for the likeness of Paul, because of their lack of knowledge.  

http://bible.cc/hosea/4-6.htm

...funny how it works, when the revelation of the fulfillment of the law of mercy sustaining and confirming life liberty freedom and independence is rejected because the people lack the knowledge to recognise The Truth at hand enough to confirm it with their vote, people find themselves unemployed bankrupt and homeless long before the prison guard, police and politician are overcome by the body and blood of Mercy. 

Mon, 01/16/2012 - 17:33 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

Today French auction succeeded big time. #WhatFundingCrisis?

Mon, 01/16/2012 - 18:00 | Link to Comment Al Huxley
Al Huxley's picture

Yeah, just keep telling yourself that. For the past 2 months its been abnormally warm - 'what winter?' 25 below today, oh yeah, THAT winter. Applying your perspective would have had me frozen to death wearing shorts and a T-shirt.

Mon, 01/16/2012 - 18:33 | Link to Comment falak pema
falak pema's picture

Moody sunk the S&P dunk. That's the way the notational cookie crumbles. 

Mon, 01/16/2012 - 20:07 | Link to Comment jekyll island
jekyll island's picture

Yeah, I've been sniffing around Greek 1 year bonds at 150%.  Seems like a good deal.  

Mon, 01/16/2012 - 21:14 | Link to Comment nmewn
nmewn's picture

Now thats some dry humor right there.

Clearly someone is trying to corner the market in olive oil...lol.

Mon, 01/16/2012 - 17:36 | Link to Comment 847328_3527
847328_3527's picture

Ship Veered Off Course So Waiter Could Wave to Family

 

Last words..."Hi Mom!....."

Kurplunck!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

"The father of the ship's head waiter told Reuters that his son had telephoned him before the accident to say the crew would salute him by blowing the ship's whistle as they passed by the island of Giglio, where both the waiter, Antonello Tievoli, and his 82-year-old father Giuseppe live."

 

http://overheadbin.msnbc.msn.com/_news/2012/01/16/10164356-captains-favo... 

 



Mon, 01/16/2012 - 17:50 | Link to Comment Rodolfito
Rodolfito's picture

That's the nicest motive ever that caused a ship to sink. God help the poor captain.

Mon, 01/16/2012 - 17:35 | Link to Comment Gene Parmesan
Gene Parmesan's picture

Yeah, this will work. No doubt. I mean, what could possibly go wrong?

Mon, 01/16/2012 - 17:38 | Link to Comment SheepDog-One
SheepDog-One's picture

SURE! Hell why didnt we think of this YEARS ago! I mean, just think of all the wars and suffering and death of millions when the answer was so obvious- Just PRINT as much money as you feel like and VOILA all problems are immediately cured!

Mon, 01/16/2012 - 20:09 | Link to Comment jekyll island
jekyll island's picture

Uhhh, we did.  Go back and look at the Continental dollar used during the US Revolution.  There is a very good reason all the founding fathers of the US were against central banks.  

Mon, 01/16/2012 - 17:38 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Just tell me this:

When can I retrieve my "DAX 10,000" hat from my hurt locker?

I see the EFSF was downgraded today, yet the DAX finished up over one-percent today.

Shocking? What could possibly be shocking at this point in the game?

It would be shocking if Central Banks didn't throw trillions of dollars to their criminal friends in high places.

Doing such is not shocking. It's standard operating procedure.

Mon, 01/16/2012 - 18:12 | Link to Comment chump666
chump666's picture

Stocks WILL NOT go into orbit.  The ECB is printing like no bank in history has done.  They have broken every mandate that a central bank is supposed to abide by, these guys are re-writing the rule book...daily.  Their bond buying program is so extensive, so broad, it's insane.  Germany will put their foot down at some point.

You simply can't have oil go bid on a weak EUR (being hedged like gold) and expect operational costs of companies to be cheap.  Inflation will chew into everything, credit/real interest lines, operation costs, wages etc etc etc.  Europe's private sector will be in a world of hurt therefor effecting profits.  Mostly German companies.  Merkel better wake up, throw that French idiot into the Rhine and start to plan in kicking out ALL of the PIIGS.  Take the 6mths of pain and reset the EU/EZ.  Otherwise Europe is 100% doomed, you might as well put bets on a war about to take place, maybe some Eastern European and even western European countries cross boarder skirmish, terrorist acts, riots, turmoil...total chaos.

Mon, 01/16/2012 - 21:26 | Link to Comment SDRII
SDRII's picture

Keep your eye on the Balkans. KFOR been engaging protestors for months over Serb protests/trade. Russians backing the Serbs in Kosovo. Recent border shooting in Moldavia with Russian holdover troops in breakaway enclave. Maybe the Croatian vote as partial catalyst.

Mon, 01/16/2012 - 21:35 | Link to Comment chump666
chump666's picture

Saw those reports.  Thanks for the update.

Mon, 01/16/2012 - 17:42 | Link to Comment thechainrule
thechainrule's picture

Time to load up on UPRO. 

Mon, 01/16/2012 - 17:43 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

Inflation is never a problem.

Just make more money to pay for it.

Problem solves itself, ergo, no problem.

Mon, 01/16/2012 - 20:40 | Link to Comment chump666
chump666's picture

Huge problem. Leads to resources scarcity/price increases etc.  Arab uprising had everything to do with food costs/inflation last spring.  The central banks are now a danger to society.  That Italian madman will 100% be squeezed by the Germans coming months.

You can't print for ever, you hit the endgame. Which is chaos.  They have no idea how to cope with that, they follow bizarre deterministic economic theory (Keynesian)...very serious what going on in Europe.  The ECB is out of control.

Mon, 01/16/2012 - 17:44 | Link to Comment kindape
kindape's picture

after reading this, the conclusion about 'and where is gold' was so ironic as to be laughable.  we are nearing end of era where financial wealth - paper or gold - accurately serves as marker for real things - productive land, machinery, skills, resource inputs etc. That one can visualize the end of money yet still think that more money (or gold in this case) is needed, strikes me as missing forest for the trees.

Mon, 01/16/2012 - 17:50 | Link to Comment SheepDog-One
SheepDog-One's picture

It makes no sense...either do 1 thing or the other.

Mon, 01/16/2012 - 18:50 | Link to Comment candyman
candyman's picture

Ill take the trees, their byproducts are cheaper than gold i.e. firewood, paper (for more bills), shelter, clothing, furniture...etc.  

Mon, 01/16/2012 - 17:46 | Link to Comment jmcadg
jmcadg's picture

Too late for my Feb Gold Options. Bollocks!

Mon, 01/16/2012 - 18:15 | Link to Comment SheepDog-One
SheepDog-One's picture

'Greedy market pigs murmurings around the free money slop trough about the phantom LTRO fantasy rumor reported to be as high as $2.2 trillion expected!' 

LOL yea right, fake story, may as well be discussing unicorns shitting 1 kilo gold bars.

Everyone can believe it I dont.

Mon, 01/16/2012 - 17:49 | Link to Comment westerman
westerman's picture

We will never see QE again. We will see millions of money creating schemes but none will be called QE regardless if they are more or less the same.

Mon, 01/16/2012 - 17:50 | Link to Comment chump666
chump666's picture

and oil goes bid.  Germans and French love that high oil price.

The ECB is rogue central bank by every definition. They have become insane. 

Europe is basket-case.

Mon, 01/16/2012 - 17:51 | Link to Comment SheepDog-One
SheepDog-One's picture

Yep, but hey all anyone cares about is if 'futures are green'...all that matters in the world anymore.

Mon, 01/16/2012 - 18:35 | Link to Comment chump666
chump666's picture

We won't see new highs. You got to leverage hard to make money in this market.  everything is tight/narrow ranges.  If anything perfect environment for a rogue trade somewhere...anywhere.  Low volumes, tight ranges, nervous trades, profit downgrades etc 

Mon, 01/16/2012 - 18:38 | Link to Comment SheepDog-One
SheepDog-One's picture

5,000 gallons per second, thru a needle.

Mon, 01/16/2012 - 17:50 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

I give it two years ... then you'll start seeing $500 & $1000 US bills in circulation.  You'll need one or the other to buy dinner or fill your tank by that point :~)

Mon, 01/16/2012 - 18:03 | Link to Comment toothpicker
toothpicker's picture

And there wont be any real gold/silver for sale

Mon, 01/16/2012 - 18:16 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

That's easy to fix.

Make gold/silver illegal.  Simple stroke of the pen yo!

And ... yes ... I can fix any problem.  Name it, I'll fix it.

Mon, 01/16/2012 - 19:15 | Link to Comment francis_sawyer
francis_sawyer's picture

And ... yes ... I can fix any problem.  Name it, I'll fix it.

"Obomney"...

Tue, 01/17/2012 - 03:30 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

Simple fix there ...

Constitutional Amendment that simply states:

Failure of any Congress or President to do the following shall be barred from holding any elected office in any capacity for the remainder of their life and will further be ineligible to receive any pension, retirement or benefits of any kind:

  • Maintain less than 4% unemployment
  • Annual increase in GDP of 5% or greater
  • Increase the US Money supply by greater than 1%
  • Allow the US Deficit to grow past 20% of GDP

PROBLEM SOLVED FOREVER!

OH ... and OUTLAW LOBBYISTS OF ANY KIND IN THE UNITED STATES.

Mon, 01/16/2012 - 21:02 | Link to Comment ljag
ljag's picture

Uh, they made weed illegal yet millions smoke it daily. Wassup w/dat?

Mon, 01/16/2012 - 21:05 | Link to Comment Dr.Vannostrand
Dr.Vannostrand's picture

That's transitory!

Mon, 01/16/2012 - 18:17 | Link to Comment traderjoe
traderjoe's picture

No, their ultimate goal is a cashless society, even better chipped slaves. They want to make currency more and more difficult to use.

Mon, 01/16/2012 - 18:25 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

Simple solution.  Make currency illegal.  Problem solved.

Mon, 01/16/2012 - 18:29 | Link to Comment GOSPLAN HERO
GOSPLAN HERO's picture

Read Revelations, comrade.

Mon, 01/16/2012 - 18:47 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

As politics has educated us again and again ...

Ignorance is bliss.

Besides ... since when did religion have anything to do with politics and finance?  A multi-decade attack under the misguided mantra of "separation of church and state" has seen to that.

Ergo, apply any solution that sounds like it will work.  No matter how ridiculous :~)

BTW, I get what your saying and it may be on its way, seems like a ridiculous ending via good sounding solutions!

Mon, 01/16/2012 - 18:45 | Link to Comment traderjoe
traderjoe's picture

Can you give me the abridged version (i.e. your point?)?

Mon, 01/16/2012 - 18:53 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

Revelation, (often dubbed "Revelations" in contrast to the singular in the original Koine) or the Apocalypse

i.e., this is Apocalyptic behavior, what the central banks are doing.

Mon, 01/16/2012 - 19:18 | Link to Comment kekekekekekeke
kekekekekekeke's picture

tell me more...

Mon, 01/16/2012 - 17:55 | Link to Comment The Swedish Chef
The Swedish Chef's picture

In light of the last debt celining hike by the Keynesian-In-Command that chart at the end looks really nice. Would you kind Americans please indebt yourselves some more? Of course you will, silly me...

Mon, 01/16/2012 - 17:55 | Link to Comment TradingJoe
TradingJoe's picture

Markets will be limit up tomorrow on this "news"! S&P is pushing FEDsters & ECBlers into printing by lowering "ratings", where the furck were they when it really was necessary to have A RATING!?!?

And now THIS...germans say Nein but ECB will say YES?!?! I am ALL IN SHORT..for now...:)) may have to cover for a few hours and then you know....!!

AM ALL OUT AND FOCUSING ON SOMETHING MORE IMPORTANT!!!

Mon, 01/16/2012 - 18:27 | Link to Comment SheepDog-One
SheepDog-One's picture

I long ago gave up chasing pennies in front of supercharged steamrollers....screw all this. 

Mon, 01/16/2012 - 17:56 | Link to Comment maxw3st
maxw3st's picture

3 bank Draghi swings into high gear.

Mon, 01/16/2012 - 18:04 | Link to Comment grid-b-gone
grid-b-gone's picture

Printing must be like drowning. It takes a few times before that final, desperate underwater breath is inhaled.

The intervening, above-sea level panicked breaths bring instant relief. Like any human drive, repeating that desire for instant relief becomes a no-brainer, even for the most logical and educated of our species. Culture or historical period matter not at all.

If DNA advancements since the human rights movement had not been convincing enough, how fitting that the ECB, on this U.S. holiday, should remind us just how much we are alike. 

We keep hearing how we are not like Japan. Weimar and Zimbabwe do not apply. Those were troublesome pre-Keynes events. We have more and better tools today. I grant you, we have the tools.

This time is different. Breathe.

Mon, 01/16/2012 - 18:29 | Link to Comment SheepDog-One
SheepDog-One's picture

Right on. World economy/financial system in the death throws of denial. 

Mon, 01/16/2012 - 19:03 | Link to Comment Calmyourself
Calmyourself's picture

One drowning man standing on the shoulders of another for his few last breaths before sinking..

  Unfortunately I have heard this all before..  This system will not crash until they want it to crash and I don't care if one year Greek garbage is paying 4075%, until the PTB are ready for the transition or the hunger really sets in nothing changes.  If I have learned anything since 2008 it is the amount of control the CB's actually have and it is very frightening.

Mon, 01/16/2012 - 19:33 | Link to Comment SheepDog-One
SheepDog-One's picture

Could be tomorrow, could be 12 months off, no one knows but the whole thing will go down one of these days.

Mon, 01/16/2012 - 19:35 | Link to Comment SheepDog-One
SheepDog-One's picture

OH and BTW this is exactly the scenario 'crazy people' like me were describing back 10 years ago and no one believed a small group of unaccountable people held total control over everything.

Mon, 01/16/2012 - 20:17 | Link to Comment Hulk
Hulk's picture

If you were crazy ten years ago, you must be full tilt bozo by now !!!

Mon, 01/16/2012 - 20:35 | Link to Comment francis_sawyer
francis_sawyer's picture

It turned him into a sheepDog (but he got better)...

Mon, 01/16/2012 - 20:37 | Link to Comment Calmyourself
Calmyourself's picture

I damn well believe you now, in fact the number of things I have  been forced to consider lately is simply astounding.

Mon, 01/16/2012 - 21:16 | Link to Comment ljag
ljag's picture

Wrong! It will collapse when the truly desperate get hungry enough. Spend some time in your local hood (after dark, if you dare) where folks are openly armed and shoot/kill at their whim (cops won't EVEN come close to these places as they are not just fair game but prized for the technology they usualy wear/use. You all have been sitting in front of your monitor for waaaaaaaaay too long if you don't believe this is real. In the end, might does in fact make right.......eh?

Mon, 01/16/2012 - 23:01 | Link to Comment Calmyourself
Calmyourself's picture

Which is why in my post above I SPECIFICALLY reference hunger as I have many times in the past as the one true catalyst that cannot be ignored; a growling belly.

Mon, 01/16/2012 - 18:06 | Link to Comment Pretorian
Pretorian's picture

Chines inflation will smoke. export plunge, imports sky rocketing. Merkel will sell BMW.s at rate od eur.usd 0.8 even Portugal will become super normal over nigh lol.

Mon, 01/16/2012 - 18:05 | Link to Comment Reese Bobby
Reese Bobby's picture

"...massive surge in the European balance sheet (Figure 2) which while not engaging in prima facie monetization, has done so via indirect channels, in the form of an LTRO, which is basically a 1%, 3-year loan, but more importantly, a balance sheet expansion which while having failed to increase the velocity of money in any way..."

 

As opposed to all the money velocity QE has achieved in the U.S.  Call a spade, a spade already.

Mon, 01/16/2012 - 18:31 | Link to Comment Tyler Durden
Tyler Durden's picture

Where was there any implication US money velocity has increased?

Mon, 01/16/2012 - 18:37 | Link to Comment SheepDog-One
SheepDog-One's picture

Well, feel free to step in front of that hose to judge the flow, I'm not.

Mon, 01/16/2012 - 18:46 | Link to Comment Reese Bobby
Reese Bobby's picture

“It is a pure coincidence that following the previous report of stern condemnation of traditional ECB QE in the form of Large Scale Asset Purchases (LSAP) by the Bundesbank, we should follow it up with the latest analysis by Chris Wood of CLSA's famous Greed and Loathing newsletter, in which the noted skeptic does an about face on his existing short European financial trade and covers such exposure, while observing the much-discussed major shift in ECB liquidity provisioning as the catalyst.”

ZH closed the previous report  with this statement, “And yet the market still continues to be convinced that the ECB will print in the conventional sense, ‘just because’.”

Did I misunderstand you?

I believe the ECB is printing in the conventional sense with the blessing of the Germans.

 

Mon, 01/16/2012 - 18:53 | Link to Comment Tyler Durden
Tyler Durden's picture

Market believes LSAP -aka conventional printing - is coming despite Bundesbank denials. Yet it is ultimately getting what it wants in indirect pathways now, in a way that keep everyone happy: investors and the Germans. And the ultimate pathway is that of the Fed also getting involved.

Mon, 01/16/2012 - 19:03 | Link to Comment Reese Bobby
Reese Bobby's picture

I agree with what you say except LTRO is the same as QE to me.  The "loans" can't be repaid.  Robert Prince of Bridgewater summed it up nicely.  Thanks.

Mon, 01/16/2012 - 19:10 | Link to Comment Goldilocks
Goldilocks's picture

Figuratively...

Like... Repo Men (2010) ???

Mon, 01/16/2012 - 22:59 | Link to Comment Cadavre
Cadavre's picture

If there wasn't a repo window how would flagship corporations ever pay their stock dividends.

Got this feeling in my bunion the the ECB counterfeiting will be underlain with FED counterfeiting. When the US gets it's next downgrade, FED counterfeiting will be underlain by ECB counterfeiting, and so on.

Pete and Repeat were in a boat on a lake. Pete jumped in.

  Q: Who is in the boat?

  A: Repeat.

      Pete and Repeat were in a boat on a lake. Pete jumped in.

         Q: Who is in the boat?

         A: Repeat.

            Pete and Repeat were in a boat ...

And on and on and on and on ... infinity.    

Is there a market for USD / EUR Origami art?

Mon, 01/16/2012 - 18:11 | Link to Comment yogibear
yogibear's picture

ECB is taking Bernanke's advice and doing the Zimbabwe plan. People should be getting out of dollars and Euros. Bernanke has no intentions on maintaing  the value of the US dollar. 

As Bernanke and the Federal Reserve print oil and other commodities really ramp.

Mon, 01/16/2012 - 18:09 | Link to Comment Rob Jones
Rob Jones's picture

If Euro governments find that there is unlimited demand for their 3 year debt, courtesy of LTRO and the ECB, then why would they need to implement austerity? They could just finance all of their spending with debt 3 years or less.

Let the good times roll!

Mon, 01/16/2012 - 18:31 | Link to Comment SheepDog-One
SheepDog-One's picture

ECB should just print $15 quadrillion....imagine the party that would create!

Mon, 01/16/2012 - 18:43 | Link to Comment Rob Jones
Rob Jones's picture

I wouldn't underestimate them!

Problem is, I suspect that only bankers and crony capitalists will be getting invitations that party.

Mon, 01/16/2012 - 18:10 | Link to Comment fonzannoon
fonzannoon's picture

Buy Siemens?

Mon, 01/16/2012 - 18:16 | Link to Comment sabra1
sabra1's picture

why buy? just wank the crank, and it's free! 

Mon, 01/16/2012 - 18:54 | Link to Comment Calmyourself
Calmyourself's picture

Hell, it's got to be better than moochelle.. hahaha

Mon, 01/16/2012 - 18:13 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

Hey, didn't a vast majority of US homeowners refund their own debt with new mortgages for a period of years? 

How's that working out for THEM?

But then again, they got cut off from the printing press action, so I suppose "official" refunding is in no danger there ...

Mon, 01/16/2012 - 18:29 | Link to Comment MachoMan
MachoMan's picture

Insofar as monthly payments, probably great...  the refi probably paid for itself in less than a year... 

but as far as value of the underlying property (and thus the unrealized loss), probably not so hot...

all else equal, they can probably better withstand the biflationary environment with lower payments...  too bad the refi gig is dead...  although, I know of at least a few Wells Fargo mortgagors who got free refis at lower rates...  (wells fargo actually wrote them and begged them to refi)...  kind of a no brainer...  although, if you would have been able to get out of the prior mortgage due to fraud/chicanery, then you shot yourself in the foot (possibly).  As long as folks actually have to save up a few grand to do a refi or to have 80% ltv, then they're fucked...

kick the can

Mon, 01/16/2012 - 18:38 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

I'm taling about 100%+ LTV.  Pepole were getting 125% or more LTV on homes with no income. 

Ring a bell with current "official policy" of CB's?

Contrary to popular belief, cans were invented for kicking.

Until some moron said, "hey, we can store stuff in these" ...

Mon, 01/16/2012 - 18:15 | Link to Comment DarAdder
DarAdder's picture

The logical fallacy:
Quantitative Easing is printing money.
The ECB is not performing QE.
therefore
The ECB is not printing money.

Compare:
Football is sport.
John does not play football.
therefore
John does not do sport.

The ECB is lending unlimited funds to the banks in exchange for toilet-paper collateral. The banks are induced to spend the money on Eurozone government bonds. The banks will lodge the bonds with the ECB to get more Euros, and in this way lever up wildly on a juicy carry trade just like the good old days.

Of course the ECB is printing money!

With US dollars, pound sterling, Swiss franc, yen and now Euro being printed, expect equities and PMs to rise.

 

Mon, 01/16/2012 - 18:20 | Link to Comment SheepDog-One
SheepDog-One's picture

Equities stay about the same, as they have for the last 15 years... oil food and PM's will continue to rise. IF this is even done like this ONE guy GUESSES will take place....its not a done deal yet at all.

Mon, 01/16/2012 - 18:28 | Link to Comment ItsNotYouItsMe
ItsNotYouItsMe's picture

Brilliant! 

Let me try ...

  1. The CB's can save us
  2. I have a heartbeat
  3. Therefore, I like the colors

Kinda like that?

Mon, 01/16/2012 - 18:18 | Link to Comment Amish Hacker
Amish Hacker's picture

And gold is where? Just waiting for another stair-step in the pending debt limit increase, if that chart of the last 20 years is any indication.

 

Mon, 01/16/2012 - 18:23 | Link to Comment SheepDog-One
SheepDog-One's picture

This guy says this added huge monetization would put gold at '$2,000 fair value'?

That statement alone tells me this guy is off base....gold should already be at least $1,000 above where it is today after the last 4 years of already insane central bank mad monetization.

'Gold $2,000 fair value' yea my ass.

Mon, 01/16/2012 - 19:00 | Link to Comment balz
balz's picture

Gold fair value should be above 10,000$ considering the moneraty expansion of the last decades.

But don't worry: it'll get there, in today's dollar value.

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