Iceland

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Guest Post: Protect The Banks At All Costs





Welcome to the new America — where banks must be protected at all costs. Whether it’s a bailout or a trumped up charge to silence a protestor, if the banks want it, they get it. The district attorney in the case has dropped the charge of attempted robbery. However, a terroristic threat charge remains. Meanwhile, the economic evidence is mounting that countries that want to recover need to tell the banks to take a hike.

 
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Frontrunning: August 22





  • Merkel's Dilemma: Risk Euro Zone or Her Government (WSJ)... as first suggest by ZH 2 months ago, with only one resolution: referendum
  • Russia warns West over Syria after Obama threats (Reuters)
  • Consider keeping Bernanke, Romney adviser Glenn Hubbard says (Reuters)... Glenn Hubbard is the star of the movie Inside Job
  • Spain Deficit Goals at Risk as Cuts Consensus Fades (Bloomberg)
  • Czech Austerity Revolt Threatens Cabinet as Slump Bites (Bloomberg)
  • Greek cuts to be deeper than trailed (FT)
  • Akin rebuffs Romney, Republican calls to quit Senate race (Reuters)
  • Obama Leads Romney in Poll Showing Disdain for Congress (Bloomberg)
  • Greece needs more time to reform, PM Samaras tells paper (Reuters)
  • UK banks face scandal over toxic insurance products (Reuters)
  • Iceland Shelves Monetary Tightening as Krona Seen Appreciating (Bloomberg)
  • India Considers $35 Billion Debt Revamp After Biggest Blackout (Bloomberg)
 
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Olympic Calm Before Coming Financial Storm





It is important to note that markets were also unusually calm during the two weeks of the Chinese Olympics in 2008. The 2008 Summer Olympic Games took place slightly later in August than the London Olympics – starting August 8 and ending August 24. Only days after the ending of the Chinese Olympics came massive market volatility in September and then seven months of market turmoil.  Similarly to this Olympic year, in Olympic year 2008, gold traded sideways to down in a period of consolidation prior to further gains. Gold bottomed in September 2008 in euro and sterling terms.  Another brief bout of dollar strength saw gold bottom in November 2008 in dollar terms.  Besides the eurozone crisis (and the significant risk of the German Constitutional Court deciding on September 12th to reject the recently cobbled together alphabet soup response to the crisis (ESM etc etc) and significant instability in the Middle East, there is also the not inconsequential risk from the US Presidential campaign and the upcoming ‘fiscal cliff’.

 
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Guest Post: A Matter Of Trust - Part Two





Putting our trust and faith in a few unelected bureaucrats and bankers, who use their obscene wealth to buy off politicians in writing the laws and regulations to favor them has proven to be a death knell for our country. The captured main stream media proclaims these men to be heroes and saviors of the world, when they are truly the villains in this episode. These are the men who unleashed the frenzy of Wall Street greed and pillaging by repealing Glass Steagall, blocking Brooksley Born’s efforts to regulate derivatives, encouraging mortgage fraud, not enforcing existing regulations, and creating speculative bubbles through excessively low interest rates and making it known they would bailout recklessness. They have created an overly complex tangled financial system so they could peddle propaganda to the math challenged American public without fear of being caught in their web of lies. Big government, big banks and big legislation like Dodd/Frank and Obamacare are designed to benefit the few at the expense of the many. The system has been captured by a plutocracy of self-serving men. They don’t care about you or your children. We are only given 80 years, or so, on this earth and our purpose should be to sustain our economic and political system in a balanced way, so our children and their children have a chance at a decent life. Do you trust that is the purpose of those in power today? Should we trust the jackals and grifters who got us into this mess, to get us out?   

 
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Barclays Wins Euromoney's Best Global Debt, Best Investment Bank, And Best Global Flow House Of The Year Awards





Financial magazine Euromoney, which in addition to being a subscription-based publication appears to also rely on bank advertising, has just held its 2012 Awards for Excellence dinner event. And in the "you can't make this up" category we have Barclays winning the Best Global Debt House, Best Investment Bank, And Best Global Flow House Of The Year Awards. Specifically we learn that "the bank’s commitment to the US is exemplified by the addition of another global senior manager to the country – Tom Kalaris is now going to be splitting his time between New York and London as executive chairman of the Americas as well as overseeing wealth management. Jerry del Missier, who has overseen the corporate and investment bank through its Lehman integration and was recently appointed COO of the Barclays group, says the bank is well positioned. "We came out of the crisis in a stronger strategic position and that has allowed us to continue to win market share and build our franchise. Keep in mind that the US is the largest investment banking, wealth management, credit card and investment management market in the world, and in terms of fee share will remain the most dynamic economy in the world for many years. As a strong global, universal bank operating in a competitive environment that is undergoing significant retrenchment, we like our position." That said, with the Chairman, CEO and COO all now fired, just who was it who accepted the various award: the firm's LIBOR setting team? And if so, were they drinking Bollinger at the dinner?

 
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Icelandic Miracle or Mirage? Round 2





Debate between Krugman and the CFR rages on in round 2 on whether currency devaluation created the Icelandic Miracle or Mirage.  

 
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Waiting For Godot





In the next days Greece will present her magic tricks at court and while the Dukes and Barons cheer in the wings it will be up to the Red Queen, this would be the bearer of the Holstein emblem, to decide if the tricks performed are worth the cost. There is a very good chance of the hand wave of dismissal here and then the theatrical event of the season, “Off with their Heads,” will begin. Then the savant of Madrid will be allowed in to show his wares claiming they are all of silk but coarse wool is closer to the truth. The money, if it comes, will be provided by the EFSF by the way because the ESM is not yet in existence. Then the plan is to transfer the loan to the ESM which will be senior to the holders of the Spanish sovereign debt. So this morning you must rush out and by the debt of Spain. You love to be subjugated; you delight in the masochism of the whip. Losing money is what you live for and why you breathe. Oh no; this is not you? Well then; maybe better not.

 
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Beggars Are Choosers As Greece Calls TROIKA's Bluff





Greece's newly confident coalition party has issued a list of zee-demands, via Bloomberg:

  • GREECE TO PRESS TROIKA ON NO JOB CUTS IN PUBLIC SECTOR
  • GREEK COALITION PARTIES WANT TO RETRACT CUT TO MINIMUM WAGE
  • GREECE TO PRESS TROIKA ON NO FURTHER WAGE CUTS FOR 2013-2014

And of course TROIKA will be happy to comply, in exchange for some of that shiny yellow stuff (as we noted here). Though we have a response already:

  • DE JAGER: THERE WILL BE NO SOFTENING OF CONDITIONS FOR GREECE
 
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Just What Is Mario Draghi Hiding? ECB Declines To Respond To Bloomberg FOIA Request On Greek-Goldman Swaps





Back in February 2010, in the aftermath of the discovery that none other than Goldman Sachs had facilitated for nearly a decade the masking of the true magnitude of non-Maastricht conforming Greek debt, Zero Hedge first identified the prospectus for a Goldman underwritten swap agreement securitization titled Titlos PLC. We titled the analysis "Is Titlos PLC The Downgrade Catalyst Trigger Which Will Destroy Greece?" because for all intents and purposes it was: at that time a rating agency downgrade of the country would lead to a chain of events which would make billions in assets ineligible for ECB collateral, forcing a massive margin call on the National Bank of Greece, which likely would have precipitated a Greek default there and then.  But that is irrelevant for the time being: what is relevant is Titlos itself, and what Bloomberg did after we posted the analysis. It appears that in following in the footsteps of Mark Pittman, Bloomberg sued the ECB under Freedom of Information rules requesting "access to two internal papers drafted for the central bank’s six-member Executive Board. They show how Greece used swaps to hide its borrowings, according to a March 3, 2010, note attached to the papers and obtained by Bloomberg News. The first document is entitled “The impact on government deficit and debt from off-market swaps: the Greek case.” The second reviews Titlos Plc, a securitization that allowed National Bank of Greece SA, the country’s biggest lender, to exchange swaps on Greek government debt for funding from the ECB, the Executive Board said in the cover note. The ECB's response: "The European Central Bank said it can’t release files showing how Greece may have used derivatives to hide its borrowings because disclosure could still inflame the crisis threatening the future of the single currency." Maybe. But what is far more likely is that the reason why the ECB, headed by none other than former Goldmanite Mario Draghi, is desperate to keep these documents secret is for another reason. A very simple reason:

Mario Draghi - 2002-2005:  Vice Chairman and Managing Director at Goldman Sachs International

 
Tyler Durden's picture

On Capital Controls





What are capital controls? Simply, capital controls are policies which restrict the free flow of capital into, out of, through, and within a nation’s borders. They can take a variety of forms, including:

  • Setting a fixed amount for bank withdrawals, or suspending them altogether
  • Forcing citizens or banks to hold government debt
  • Curtailing or suspending international bank transfers
  • Curtailing or suspending foreign exchange transactions
  • Criminalizing the purchase and ownership of precious metals
  • Fixing an official exchange rate and criminalizing market-based transactions

Establishing capital controls is one of the worst forms of theft that a government can impose. It traps people’s hard earned savings and their future income within a nation’s borders. This trapped pool of capital allows the government to transfer wealth from the people to their own coffers through excessive taxation or rampant inflation… both of which soon follow.

 
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"The Mourning After" - Argentina Is On The Greek Side, But Why Is The IMF Holding It Hostage?





The latest gambit used by the Eurocrats is that should Greece dare to not follow their sage advice, and leave the EMU, it will burn in hell for perpetuity, where famine and pestilence will join in making Greeks regret they ever dared to not listen to their Keynesian overlords. The only problem is that despite what econo-pundits everywhere claim, the Argentina case study (as well as the Iceland and the Southeast Asian) is a rather optimistic one of what Greece can expect to occur after it finally "just says no" to the biggest vanity experiment in European history. And as JPM's Michael Cembalest shows without any doubt, "there is a morning after." The far bigger problem is that there will be a "mourning after" for all those who are threatening Greece will hell and damnation right about now. Which brings us to a very critical question: why is the IMF not doing what it should be doing, and promising to assist the Greek decision, even if it means exiting the Euro. As JPM's Cembalest says "If the IMF did what it is supposed to do and lend into a devaluation/ structural adjustment (instead of financing a German and French bank rescue), Greece just might have a shot. Within the Euro, they don’t." Which begs the question: just how many pieces of silver did it take for the IMF to join the bandwagon of sell out and rehypothecate its soul, and charter, to the highest bidder?

 
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"I Ain't Gonna Work On Angie's Farm No More" - Bob Dylanopoulos





I am asked, from time-to-time, why I write about Europe with such frequency. The answer is quite simple; there is nothing more important, nothing that will have a greater impact upon the world’s financial system, nothing that will impact any and all markets more than what is transpiring on the Continent. It is a grand experiment gone bad, a Federalist’s dream floundering in the dust, a vision of Heaven that is being dragged through the narrow gates of Hades and there is no longer any painless way home if home is to be found at all. The notion that there is some sort of decoupling in the marketplace between America and Europe is an adage quoted by the village idiots for the fools listening in the town’s square; nothing more than that.

 
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