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A Tide In The Affairs Of Man

Tyler Durden's picture




 

Via Mark J. Grant, Author of Out of the Box,

 

There is a tide in the affairs of men, which, taken at the flood, leads on to fortune. We must take the current when it serves, or lose our ventures.”
 
                                           -William Shakespeare
 
There are two forthcoming dates which will set the direction and strength of the tide and certainly have a marked affect upon the ventures. They are this Sunday, May 6, when both the French and Greek populace will decide on who is running their government and then on May 31 when the Irish have their referendum. At the least one must be thankful that there are Democracies that are working and that no group of Generals or some thug is making the decisions. I did watch the one French Presidential debate this morning. It seemed rather like something out of Harry Potter where Professor Dumbeldore was ranting and raving with the Minister of Magic. If events go the way as predicted by the polls then we will have a Socialist President in France that will be followed in June by some right wing members of Parliament also being elected. Vive la France at the national level but a major thunderstorm coming for the European Union as Germany finds herself ever isolated from the demands of France, Spain, Portugal, Italy et al. Germany, in my view, is about to lose her position as the Dictator of the EU and there will be consequences which, I am certain, will cause moments of great angst in Berlin. Forthcoming I visualize many Socialist demands such as Eurobonds being made and Germany standing alone in the corner and refusing to fund which will make for all kinds of volatile markets.
 
“The Charges to the accused are as follows: that he did willingly, and in the full knowledge of the illegality of his actions, perform a Patronus Charm in the presence of a Muggle.”
 
                                                   -The Minister of Magic
 
The elections in Greece are of a different sort. You may as well throw up the cards into the wind and see which way it is blowing. In the end, though, I think it all comes down to money. The Greeks will bumble along while the EU foots the bill and the moment the spigot is turned off; Bye Bye Birdie. I can almost hear the screams and cries in Paris and Berlin as the Greeks return to the Drachma and default on their debts but it is either a continuing flow of cash or the end of Greece’s tenure I am afraid. The bigger crisis though, I fear, will be when Germany says no to funding some grand Socialist idea. The problem is the size of the economy. The German economy is 25% of the American economy and it is going to get down to a matter of capital and what Germany can afford without being downgraded and a European Union without a AAA rated Germany is a very different affair both for the EU’s debt structure and for the Euro. Therefore it will get down to push/shove, hide/seek and various other games of our childhood which will mark the Eurozone for the balance of the year. The tipping point may well be Spain as there just is not enough capital to rescue her and there is just no escaping the fact that Spain will need help.
 
Structured Finance
 
There are those institutions that stick up their noses at this segment of Capital Markets. I am not in this camp however and remind each of you that bonds that float off of LIBOR or bonds that float off of Inflation are certainly part of this group. There is a significant place in anyone’s portfolios for bonds that provide reliable options to fixed-coupon securities depending upon market conditions. I have long believed that legitimate “concerns” are what drives Structured Finance and that identifying those “concerns” and providing products to address them is the purpose of a healthy Structured Finance department.  Recently, at a conference sponsored by MTN-I, I chided my colleagues for non-performance and a lack of innovation and every lead bank has had a positive response. There will be a meeting in New York, on June 7, of almost all of the lead banks, which I will moderate, to deal with a number of issues and to try to provide some innovation to institutional clients. Consequently it would be useful if those of you that run portfolios would communicate with me and let me know what kinds of new products that you may find helpful. In my mind whatever could enhance yield would be one option and whatever could provide some protection as credit/risk yields rise while Treasuries may go in the opposite direction would be another. I encourage any of you to share your thoughts with me and I will communicate them to the entire group when we meet.
 
A Bumpy Ride
 
In June the Fed’s Operation Twist comes to an end. There is no new stimulus plan on the table in either America or in Europe now. In my opinion, there is none that is likely on either Continent. This means that the last four years of monetary easing and living off of that which has been printed is coming to an end. The consequences of this, historically, have been declines in the equity markets and declines in the value of risk/credit assets. I strongly advise you to take some profits now before the markets take them from you. Compression will give way to widening and there is no reward for being left holding the bag!

 

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Thu, 05/03/2012 - 09:13 | 2393444 fonzannoon
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This means that the last four years of monetary easing and living off of that which has been printed is coming to an end. The consequences of this, historically, have been declines in the equity markets and declines in the value of risk/credit assets.

I thought Friday humor was on Friday

Thu, 05/03/2012 - 10:10 | 2393535 hedgeless_horseman
hedgeless_horseman's picture

 

 

I am certain, will cause moments of great angst in Berlin.

I finally finished reading They Thought They Were Free.  Now that German reunification has occured, and the EU and EMU are a reality, the last four chapters are both inspiring and haunting, especially considering the above. 

 

PS: 

Eurobonds cometh.  The German guilt of WW2 is still strong enough to override any German angst or distant recollection of Weimar inflation.  It is Germany's actions, and especially Russia's reactions, to the inevitable outcome of EuroBonds and a socialized Europe that worries me.  However, we should still have quite a while to kick the gas cannister down the road before the shooting starts.

Thu, 05/03/2012 - 10:20 | 2393648 Gromit
Gromit's picture

Yes it is a great book.

I was taught at school that Germans succumbed to some sort of communal madness due to some defect of German character.

The book explains how Nazi Germany was a product of failed political and economic policy, through the words of ordinary Germans.

 

 

Thu, 05/03/2012 - 12:42 | 2394196 malek
malek's picture

Was that an American school?

You might also want to read Stanley Milgram: Obedience to Authority ("The Milgram Experiment") then.

Thu, 05/03/2012 - 09:15 | 2393449 LawsofPhysics
LawsofPhysics's picture

A step closer to the end, about time.  Moving forward life will get hard for everyone so you need to remember only one thing ;"Unit, Corp, God, Country".  Unit-the people you surround yourself with, Corp-your immediate community, God-losely translated as your faith, Country-the last thing you should worry about as this will be the last place any assistance will come from.  

Surround yourself with honest hard-working people now.  It will be important moving forward, stay long black markets and underground economies.

Thu, 05/03/2012 - 09:19 | 2393459 ebworthen
ebworthen's picture

Green Mountain Coffee crashing hard, must be close to time for QE3.

Mixing Shakespeare with a quote from what's her name pained me, but I forgive you.

Thu, 05/03/2012 - 09:23 | 2393460 GeneMarchbanks
GeneMarchbanks's picture

It's as if Grant and Brusca are competeing for who can write a more demented piece. Even though this was truly insipid plus riddled with generalizations, the edge is still with Brusca.

Thu, 05/03/2012 - 09:25 | 2393462 falak pema
falak pema's picture

here is a good chart to ponder on :

The Future Of Europe In One Huge Chart - Business Insider

Sunday election results in two countries will give us an indication, between "staggering on" or OTHER scenarios.

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

 

"On such a full sea are we now afloat"....yes, in a sea of fiat debt...its not a sea of life force but of death force, like being on the Raft of Medusa! 

Thu, 05/03/2012 - 09:21 | 2393463 BobPaulson
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Is the American definition of "socialist" different than the one the rest of the world uses?

Thu, 05/03/2012 - 09:31 | 2393490 ebworthen
ebworthen's picture

Our socialists own more AAPL stock and wear flip-flops.

Thu, 05/03/2012 - 09:46 | 2393518 hedgeless_horseman
hedgeless_horseman's picture

 

 

An American Socialist is a banker, and his congressman, when the bank is losing money and needs a bailout.

An American Capitalist is a banker, and his congressman, when the bank is making money and needs a tax cut.

Thu, 05/03/2012 - 09:58 | 2393567 Optimusprime
Optimusprime's picture

Classic!  Well said.

Thu, 05/03/2012 - 10:18 | 2393633 BobPaulson
BobPaulson's picture

I'm quoting that one. Nice.

It's just that the rest of the world refers to socialists as people whose political beliefs espouse some degree of taxation/confiscation of property to support collective government programs. I hear it used here a lot to describe the banking oligarchs, perhaps because in the US saying the word "socialist" is like saying "baby killer" or "godless commie", but I don't think it helps others who go by the dictionary definition.

In Europe, the term "Liberal" usually refers to New World Order types who support the "liberalization" of trade and finances (European Union Types) and the slow replacement of sovereign democracies with bureaucracies.

One way the neoconservative (named because they pretend to be conservative but aren't into conserving anything whatsoever) banking cartels and oligarchs are able to run the place is by keeping alive the false dichotomy of right and left so that the masses are distracted while they carry out their business of owning and controlling everything.

Thu, 05/03/2012 - 09:29 | 2393464 Quinvarius
Quinvarius's picture

This is how you know the market is about to go straight up again.  How can anyone honestly think the bankers can be forced to sell anything at a loss when they get free 0% money all day and all night.  They don't even have to mark to market their holdings that are underwater.  We are still going to get hyper inflation, despite the occasional downtick in the market.  Pieces like this annoy me as much as elliot wavers trying to call tops.  Look at reality.  The tide has changed because the rules have changed.  The only way to short anything is to be long gold.

Thu, 05/03/2012 - 09:22 | 2393465 Shizzmoney
Shizzmoney's picture

Wait.....Greece has elections?

Thu, 05/03/2012 - 10:07 | 2393595 Monedas
Monedas's picture

Tax Bill !

Thu, 05/03/2012 - 09:23 | 2393468 Gully Foyle
Gully Foyle's picture

GOD FUCKING LORD! I am so goddamned tired of the similes and metaphors people are hard pressed to come up merely to claim the end is nigh!

Let it fucking end so these writers can put the Thesaurus down.

 

Thu, 05/03/2012 - 09:23 | 2393472 youngman
youngman's picture

I don´t think Twist is over...nor LTRO´s are done with....they are going to print ...different names maybe..but trillions printed...Japan...Britain....USA...EU....all will print...above the table..below the table..offshore...they think they are saving the world...

Thu, 05/03/2012 - 09:29 | 2393486 Centurion9.41
Centurion9.41's picture

Youngman, everyone knows this.  The question is when and flow. 

Keep up the good work.

Btw, did I see you as an extra; http://youtu.be/krwywj_gIjk

Regards

Thu, 05/03/2012 - 09:36 | 2393500 i-dog
i-dog's picture

 

"they think they are saving the world"

The world will not be saved by the developed world printing more money. That's obviously unsustainable for the next generations.

The world will only be saved when the developed world applies its mind and its capital (what's left of it!) to a new paradigm of creating value that can be exported to those low labour-cost countries that are producing all the "stuff" for western consumers.

It's time to get rid of the failed central planners and get started on a new wave of entrepreneurial creation.

Thu, 05/03/2012 - 09:25 | 2393475 SheepDog-One
SheepDog-One's picture

So now Germany's 'rating' matters, when all other ratings downgrades dont amount to anything? And the end is neigh...yeay....but not today....certainly not today.

Thu, 05/03/2012 - 09:27 | 2393479 Centurion9.41
Centurion9.41's picture

Why are there so many Sheeple?   Stereotypes just don't happen.

>> The essayist William Deresiewicz talks about the endless series of hoops that students have to jump through now if they hope to get into the right colleges: “Classes, standardized tests, extracurriculars in school, extracurriculars outside of school. Test prep courses, admissions coaches, private tutors.” What you get at the end, he says, are “great kids who [have] been trained to be world-class hoop jumpers.”2 They are, as one member of the generation observes, “excellent sheep.” <<

[fm The Hedgehog Review  @ http://tinyurl.com/8xr5rzh; no opinion on the piece or the journal it came from.  Stumbled upon the site via First Things.]

 

 

 

Thu, 05/03/2012 - 09:34 | 2393495 Monedas
Monedas's picture

Socialism    sans    Sheeple   =     Non   Sequitur       Comedas   Monedas   1929      Comedy Jihad Socialist Stealth Against Wealth

Thu, 05/03/2012 - 11:21 | 2393859 Vince Clortho
Vince Clortho's picture

Not to disagree with your comment, but to add to it ... the creation of the "sheeple" was planned long ago and this plan has been unfolding for generations.  The primary ingredient is a relentless stream of progaganda telling the targets what to think and what to believe.  This thought control project overwhelms children in their formative years and continues throughout their lives.

The Central Planners have been grooming their flock in the U.S. for over 100 years, and much longer than that in Europe. But nowhere is the media more dominant than in the U.S.

It will take some effort, but it is time for the "sleeping" flock in America to wake up. 

Thu, 05/03/2012 - 13:06 | 2394298 Centurion9.41
Centurion9.41's picture

Vince,

"Central Planners have been grooming their flock in the U.S. for over 100 years"

Really, they must be some old bastards!

Not disagreeing with where you're going, re central planning.  However, the problem is ideology not people.  So I try to stay away from people/group type names when talking long term macro issues.  E.g. Keyensianism as opposed to Central Planners.

Hopefully when the sleeping flock awakes, it's the 1770's man and not the sheeple baying for the Nanny's bottle...

 

Thu, 05/03/2012 - 09:28 | 2393483 Monedas
Monedas's picture

The French to elect Socialist President who promises to give 75% tax "Haircut By Guillotine" to the "Rich" ?      Monedas   1929    Shit Brained Socialists - Deja Vu All Over Again

Thu, 05/03/2012 - 09:41 | 2393506 Monedas
Monedas's picture

The Euro-Zeros look at Socialists differently !   They admire them....we despise them !     Monedas    1929    Vote for me....I steal for you !  

Thu, 05/03/2012 - 09:46 | 2393516 Monedas
Monedas's picture

Do the Indignant Socialists still gather around the Guillotine ?   Monedas   1929   Comedy Jihad Young Muslims In Paris

Thu, 05/03/2012 - 10:00 | 2393545 Monedas
Monedas's picture

Socialists steal for you and got your back to be indignant when your welfare check is late !     Comedas   1929    Comedy Jihad  Indignant Indigents    PS:   Pardon my rant !

Thu, 05/03/2012 - 09:54 | 2393553 ThirdWorldDude
ThirdWorldDude's picture

Gravity is a bitch after all...

Thu, 05/03/2012 - 10:38 | 2393712 Centurion9.41
Centurion9.41's picture

Socialists in control of France?  Seriously, what's the difference between a Socialist and the Keynesian Cabal? [Those Keynesian purists who want to claim Keynes never supported high debt, please spare us the whine.  It is for practical purposes meaningless what the leader thought when his disciples have claimed and acted otherwise.]

So it's really going to be German vs the whole financial cabal.  Not France & Club Med vs Germany.

Besides, we have Israel activating 6 divisions reserves and notifying another dozen or so to get up to speed on the practice range.

Looks like it could be a different kind of Man-Made Global Warming in the offing.

Thu, 05/03/2012 - 10:40 | 2393718 icanhasbailout
icanhasbailout's picture

At the least one must be thankful that there are Democracies that are working and that no group of Generals or some thug is making the decisions.

 

That is a line unlikely to be written by any man familiar with the details of how votes are counted in modern "democracies", other than the salesman for the machines used.

 

 

Thu, 05/03/2012 - 13:00 | 2394278 W10321303
W10321303's picture

Murdoch to endorse Austrian school, er ummm, Goebbels School, I mean I mean Austrian school of corporate/state life....Up the plutocrats!

is "not a fit person" to run a major international media company because of how News Corp. handled its phone-hacking scandal. The Parliamentary Select Committee on Culture, Media and Sport said Murdoch and his son, James, showed "willful blindness" about the scale of phone hacking at the News of the World tabloid. The panel’s finding has prompted a U.S. watchdog group, Citizens for Responsibility and Ethics in Washington, to call on the Federal Communications Commission to revoke News Corp.'s 27 Fox broadcast licenses in the United States. We speak with David Leigh, investigations editor at The Guardian, the news outlet that first exposed the phone-hacking practices taking place within the Murdoch media empire. Leigh says the British panel's findings could threaten Murdoch’s media presence across the Atlantic: "People are now beginning to say, ’Doesn’t this bleed over into the man who runs Fox News and has all those TV outlets in the U.S.?’ If he’s not fit and proper person in Britain, he’s not a fit and proper person in the U.S., either." [includes rush transcript]

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