Davos

"It takes a very unusual mind to undertake the analysis of the obvious."--Alfred North Whitehead

Easily the best news of the day:

GEITHNER SAYS OBAMA WOULDN'T ASK HIM TO STAY FOR A SECOND TERM - BBG

Oh well, life is tough. Surely that basement office at Goldman Sachs will have some daylight and a TruboTax manual to make post-administrative life bearable for Geithner.

The Davos theater, where the only thing that matters is to see and be seen, while wontonly spending someone else's money to hobnob with a status quo elite which is rapidly becoming irrelevant and obsolete, is opening. Watch the Annual Meeting 2012 opening webcast. Most importantly, the guest of honor, Angela Merkel, is here.

Even as the Euro-Dollar 3 Month basis swap has contracted to a nearly 6 month low at -75 bps, on residual hopes that the LTRO will do anything to fix Europe (it won't - just compare it to the €442 billion 1 year LTRO from June 2009 which worked until it didn't for the simple reason that Europe does does not have a liquidity problem), Europe has once again reemerged as a source of risk off (not least of all because the fulcrum security benefiting from the LTRO - the Italian 2 year BTP is for the first time in weeks wider by 17 bps). Why? The same reason as always: Greece, with a touch of Portugal. As BBG observes the positive sentiment in Asia earlier was retraced in the European session, with commodities, FX, equities lower, especially after ECB demurred from accepting losses on its Greek bond holdings. What that means is that as we patiently explained over the weekend, the imminent Greek default (just listen to Soros over in Davos spewing fire and brimstone on Europe for allowing the situation to get to a place where a Greek default is inevitable) will create so many subordinated junior tranches of Greek debt it will make one's head spin. But while the fate of Greece is all but sealed, and a CDS triggered virtually factored in (note: a Greek CDS trigger, in isolation, won't have much of an impact as repeated here before - in fact it will return some normalcy to the market as CDS will be a hedging vehicle once again over ISDA's corrupt trampled corpse), it is what happens to Portugal and its bonds that has the market gasping for air. Because as Zero Hedge pointed out first, a Greek default will be impossible to be enacted in Portugal in its currently envisioned format, as stupid as it may be. In fact, due to the pervasive and broad negative pledges in most medium-term Portuguese bonds, any priming Troika bailout is impossible without providing matching collateral for everyone else under UK indenture bonds!

• Fed Holds Off for Now on Bond Buys  (Hilsenrath)
• Bonds Show Return of Crisis Once ECB Loans Expire (Bloomberg)
• Greek Debt Talks Enter Third Day After ‘Substantial’ Discussions (Bloomberg)
• Sharp clashes at Republican debate ahead of vote (Reuters)
• Lagarde Joins Warning on Fiscal Cuts Before Davos (Bloomberg)
• Investors exit big-name funds as stars fail to shine (Reuters)
• Payday lenders plead case to consumer agency (Reuters) - the EFSF included?
• EU Toughens Fiscal Pact Bowing to ECB Objections, Draft Shows (Bloomberg)
• Minister Urges Japan to Use Strong Yen (FT)
• China Eyes Pension Fund Boost for Stock Market (Reuters)
• China Manufacturing Contraction Boosts Case for Easing: Economy (Bloomberg)

Welcome to 2011 Ponzi Man. The party is just getting started...

Many of you have asked me repeatedly when I would do this...

Sarky and Jamie in the ring...

DAVOS: 0600 [EUROPEAN BULL SH*T TIME]--East Coast USA: 12:00 AM [EASTERN SWINDLER TIME]

The event is “chasing successful people who want to be seen with other successful people. That’s the game.”

Forget the Isle of Man, Cayman Islands, Nauru, Liechtenstein, and like havens. The World Securities, Exchanges, and Financial Rules Commission is being planned by the Europeans and the Obama Administration. This is the theme of the World Economic Forum Annual Meeting in Davos.

First AIG with their million dollar, manicure and pedicure all-inclusive trips to the Pacific coast a few days after a $100 billion dollar rescue by taxpayers, and now David Paterson, governor of a virtually bankrupt NY State.

First AIG with their million dollar, manicure and pedicure all-inclusive trips to the Pacific coast a few days after a $100 billion dollar rescue by taxpayers, and now David Paterson, governor of a virtually bankrupt NY State.

First AIG with their million dollar, manicure and pedicure all-inclusive trips to the Pacific coast a few days after a $100 billion dollar rescue by taxpayers, and now David Paterson, governor of a virtually bankrupt NY State.