Iceland

An explanation of why the UK is currently in a Recruitment Bubble

Psychopaths flew financial weapons of mass destruction (derivatives) into the twin towers of our economy, the housing market and the stock market.  Ten trillion dollars of wealth imploded in a cloud of dust. Ninety-nine percent of the economic experts – financial planners, economists, economic professors, brokers, and investors – missed the largest bubble in history as well as the systemic risk that the bubble posed. The National Board of Economic Research (NBER) (who is responsible for declaring a recession) was 9 months late calling the worst recession since the Great Depression.

Every economy is planned. This traditionally has been the function of government. Relinquishing this role under the slogan of “free markets” leaves it in the hands of banks.

Let the banks implode in bankruptcy, clear the worthless "assets" of debt from the books, and let the market price currencies and everything else. The only other choice is debt-serfdom. All the other schemes and proposals are simply variations of one single fantasy: that the feckless leadership can fool the repricing genie with parlor tricks. They can't. Everybody with any understanding of the situation knows that the debt bubble has already burst, an risk and debt cannot be repriced back to fantasy levels. That repricing has already occurred, and cannot be revoked or shoved back in the bottle. The Great European Debt Bubble has already burst, and so now it boils down to a simple choice: debt serfom or open rebellion against the banks that profited so handsomely from the euro-fantasy. There is no middle ground, as the debt cannot be repaid, not now and not in the future. It cannot be reshuffled, masked, or hidden; it can only be renounced. It's your choice, Europe; choose wisely. If you want a model for sanity and growth, look to Iceland. They renounced their unpayable debts and debt-serfdom, and let the market reprice their currency, debt and risk. The nightmare is past for them; they chose wisely. Now it's your turn to choose. The debt-serfdom will fall to you, not the banks or your Elites.

Bill Gross continues with his rational Keynes bashing with the following statement from his latest monthly piece just released: "What has become obvious in the last few years is that debt-driven growth is a flawed business model when financial markets and society no longer have an appetite for it. In addition to initial conditions of debt to gross domestic product and related metrics, the ability of a sovereign to snatch more than its fair share of growth from an anorexic global economy has become the defining condition of creditworthiness – and very few nations are equal to the challenge." In addition he also meaks it all too clear why the sudden reappearance of the Federal states of German-funded Europe proposal is a dead end: "On the fiscal side the EU’s solution has been to “clean up your act,” throw out the scoundrels and scofflaws (eight governments have fallen) and balance your budgets. Such a process, however, almost necessarily involves several years of recessionary growth and deflationary wage pressures on labor markets in the offending countries." Gross picturesque analogies never fail to amuse (maybe not the French though): "The ultimate vote of the working men and women in these countries will always hang over the markets like a Damocles sword or perhaps a French/German guillotine. If the axe falls, then bond defaults may follow no matter what current policies may promise in the short term." That's right. He went there. As for his conclusion, he is spot on: "Investors and investment markets will likely be supported or even heartened by recent days’ policy proposals. The problem of Euroland is twofold however. First of all, they will remain a dysfunctional family no matter what the outcome. You can’t tell a German much, and while they can issue what appear to be constructive orders and solutions to the southern peripherals, there is little doubt that none of them will “like it very much.”....Secondly, and perhaps more importantly however, investors should recognize that Euroland’s problems are global and secular in nature, reflecting worldwide delevering and growth dynamics that began in 2008." And that's it folks: Europe will never submit to a federalist union controlled by Germany. And even if it does, it is not just Europe that is broken. It is the entire world.  Speaking of broken marriages, we wonder just how many CDS Gross is long parent risk-soaring Allianz?

If the capital markets are riddled with fraud, why not just invest in Zimbabwe, instead?  Bribes are cheaper there ...

The Eurocalypse has unfolded EXACTLY as I foretold exactly 2 years ago, with nearly each and every quarterly update along the way coming to fruition within a year. With that much accuracy, preceded with the same from RRE, CRE and US banking crash, you'd think someone over in Europe would have called me over to sort things out???

At this moment, the headlines coming out of Greece are confusing and contradictory.  It isn't clear whether or not there will be a referendum or a vote of no confidence.  There may be a new leader, there may not be.  All we can do is wait for the next headline.  In the end I think there will be a referendum. You can't put the genie back in the bottle.  If a referendum is cancelled now, how will the people of Greece react? Maybe the No Eurozone plan won't be so compelling, but if people start taking a serious look at how it would work, it might not be so bad, and don't forget, the Eurozone plan isn't that great.  At some point, the citizens of the country need to make the decisions.  Electing politicians that can then be corrupted by Merkozy is not a long term solution. 

So, the European joke has come full circle. Indebted nations borrow more money to bail out other indebted nations who ask insolvent banks to cut a 50% off deal on the loans that were given to them, but the insolvent banks will then have to raise capital which the will of course borrow from the over-indebted nations whom they just gave money to. Get it? Problem solved - BTMFD!!!

Maybe the moment we should be trying to avoid is the one that allows weak institutions to exist. The weak institutions do not provide loans because they are too afraid of losses since they mainly survive by the good grace (and money) from governments at central banks. That is bad enough, but they crowd out new money. Who is going to go after markets where even a sleepy BAC could briefly wake up and crush you before you ever got started. I have heard of some interesting companies out there trying to provide loans to those who need them, but they can’t get any traction. Too Big To Fail aren’t too sleepy to allow potential competitors to grow. Stocks can rally. Lehman Moment can be said 500 times today. Every politician can worry about the impact of triggering CDS. Every banker can claim the world would end if they are made to pay for their bad decisions. In the end, Iceland and Ireland both improved only AFTER they let banks fail. The US, for all the talk about Lehman, is only doing worse than that since it decided banks couldn’t be allowed to fail.

The freedom to choose the form of money we can use in our daily lives is inseparable from the ability to live one’s life as a free man and a free woman. Monetary freedom is inseparable from all other inalienable freedoms we possess in this life. What we have today is monetary enslavement. In 1792, Alexander Hamilton equated essential freedoms with the preservation of the purchasing power of all money and passed into law a Coinage Act that punished anyone that deliberately debased the value of coins with death. In 2011, the citizens of Utah give us The Utah Monetary Declaration. If we wish to stand in solidarity with our brothers and sisters around the world in restoring our essential freedoms, the first pro-active step every citizen in this world must take is to research and learn why the debasement of monetary value is a direct attack on the freedoms of every citizen of every district, every province and every state in every country in the world.

We continue the Meltdown series by presenting part three out of four: Paying the Price, which looks at how the victims of the 2008 financial crash fight back. A protesting singer in Iceland brings down the government; in France a union leader oversees the kidnapping of his bosses; and thousands of families are made homeless in California.

There are few things more cringe-inducing than a government-subsidized bank CEO spouting self-serving, entitlement-laden idiocy to the world just because he and his bank might be subject to some extra constraints. That hasn’t stopped JPM Chase CEO Jamie Dimon from acting like a spoiled, sociopathic brat while characterizing proposed Basel III capital requirements and regulations as ‘anti-American’ at every opportunity. They are not ‘anti-American’ but globally risk-mitigating in a time of widespread economic Depression, a point lost in the haze of Dimon’s megalomania....Here’s what’s really anti-American – big banks receiving extreme federal assistance while the rest of the country is crushed, loan refinancing and other foreclosure reducing negotiations are anemic, and both private and public sectors can’t finance enough job growth to alter our horrific unemployment or poverty situation.

Update: Italy Hasn’t Asked for Any Help From China, Deputy Min Says... Yeah. Full Retard

Wondering why stocks are soaring and the EURUSD is above 1.37 again? Why, nothing short of the latest rumor, this time that Russia will bail out Europe. Bloomberg reports that Russia may use its international reserves to buy common euro-area bonds if European policy makers back joint debt issuance, Reuters reported, citing an interview with Finance Minister Alexei Kudrin... Sorry, we just report them. Time for the trader diary to get its latest update. The only problem we see with this strategy of rolling daily bailouts is that after China and Russia, who would be far smarter to participate in a stalking horse bid of European assets than to invest general unsecured pre-petition claims, there will be nobody left to "rescue" Europe: after all who else is out there? Zimbabwe? Japan? Argentina? Iceland? We doubt even the 80286's will buy that...

All you need to read.