A quick glance at the Larnaca runways, also known as the Russian (and perhaps even other, but that would impair the media narrative that "only Russian tax-evading oligarchs are evil") private jet parking lot, shows that things are as heated as ever, although maybe just a tad less heated. Channel 4's Faisal Islam observes that while there are 12 private jets on the tarmac, this is one less then ten days ago. When this number drop to zero, the Cypriot depression has officially begun.
First domestic fiscal policy, and now global monetary policy has become an utter circus:
- G7 OFFICIAL SAYS G7 STATEMENT WAS MISINTERPRETED, STATEMENT SIGNALED CONCERN ABOUT EXCESS MOVES IN JAPANESE YEN
- G-7 OFFICIAL: G-7 CONCERNED ABOUT UNILATERAL GUIDANCE ON YEN
- G7 OFFICIAL SAYS G7 IS CONCERNED ABOUT UNILATERAL GUIDANCE ON THE YEN, JAPAN WILL BE IN SPOTLIGHT AT G20 MEETING IN MOSCOW
We already mocked the G-7's original stupidity... and now they say it was not what they meant. Because what the G-7 clarification really means it that while the G-7 will supposedly "allow the market to set rates", the G-7 was not happy with how the market set rates following the G-7 statement. And... #Ref!
Regardless if the Fiscal Cliff is resolved tomorrow (impossible), on December 31 (unlikely), or in tandem with the debt ceiling hike some time in March 2013, after all the government fund buffers have been soaked dry as they were back in August 2011 (most likely), one thing is certain: America's wealthiest are about to see their taxes soar - that's more or less a given. The question is what happens then. Will, the wealthiest - those who have access to and can buy banking, incorporation, citizenship and legal services in any global jurisdiction in a world that has never been this decentralized and this , take it all quietly up until that point on the Laffer curve says they will commit mass suicide, or maybe, just maybe, because they don't feel like being force to pay uncle Sam even more than they currently do with the proceeds not used for something constructive like paying down debt, but instead to fund government corruption and inefficiency, they will pick up and leave without saying goodbye or even looking back, and in the process crush future US government tax revenues even more and send the deficit soaring more. "No risk in that", many will say - after all where can they go? Well, apparently many places. Because if the UK, where as the Telegraph reports a stunning two-thirds of domestic millionaires opted to leave the country than pay a "punitive" 50% tax, is any indication it is possible that the imminent tax hike on America's wealthiest is going to be one of the most destructive things that can happen to America's already unsustainable budget deficit.
- So much for that: Obama to fast track southern portion of Keystone XL Pipeline (1600 Report)
- French Police Say They Have Cornered Suspect in School Shooting (NYT); French shooting suspect had been arrested in Afghanistan (Reuters); Suspect in French shootings says he’ll surrender to end standoff (Globe & Mail), Toulouse suspect escaped from Kandahar jail in mass Taliban jailbreak in 2008 (BBC)
- Bernanke Says Europe Must Aid Banks Even as Strains Ease (Bloomberg)
- Monti faces clash with unions over reform (FT)
- UK budget to balance tax breaks with austerity (Reuters)
- Romney scores big win over Santorum in Illinois (Reuters)
- U.S. Exempts Japan, 10 EU Nations From Iran Oil Sanctions (Bloomberg)
- Bernanke Says Fed Failed to Meet Goals During Great Depression (Bloomberg)
- Revised tax deal reached on Swiss accounts (FT)
As the following update from the World Gold Council reminds us, at the end of October, Italy had 2,451.8 tonnes of gold, or roughly $140 billion dollars at today's price. We doubt we are the only ones keeping track of all this gold (most of it almost certainly 'safe and sound' about 150 feet deep under the infamous LIberty 33 location). We also doubt we are the only ones curious about its future, which we see as have five distinct possible outcomes: i) nothing; ii) it is currently being shipped quietly from The New York Fed to Italy for "general corporate purposes); iii) it has already been shipped and is currently being loaded up in Silvio's private jet; iv) the G-20 is already preparing to launch a formal demand that in order to remain in the Eurozone and to find the EFSF, which will be used to buy Italian bonds, Italy will have to do its patriotic duty and remit it to the ECB, an extortion attempt which was tried with Germany last week and which failed spectacularly; or v) it is being lent out to other countries who have long since sold their gold and continue to pretend they have some hard asset backing to the currencies issued by their own central banks. We hope to get an answer shortly.
According to the German edition of the FT, G-Pap is once again using the R-card (that would be resigning-cum-retiring) - the last time he did this was back in early July when he had to persuade the government to vote for the July 21 Greek bailout #2. He was bluffing then. He is likely bluffing now, although if he isn't, it means game over for Greece and probably for the European dream, not to mention united currency. From FT: "[G-Pap] has been trying for months to keep his country from bankruptcy - Tens of thousands of Greeks are against the austerity policies of the government on the barricades. No wonder the prime minister is thinking of throwing the rocks." Since this is google translation, we assume "throwing rocks" is loosely translated as getting the f#*$ out of Dodge while the getting is good, while the private jet still has fuel and while the gold is still in the cargo hold.
Grains are probably going up, leading to higher liquor prices ... and wealthy people who have a taste for sake or shochu would probably pay top dollar for "clean", pre-Fukushima beverages ...
A stunning report from Reuters on how the crisis has transformed one of the world's most populous cities: "Areas of Tokyo usually packed with office workers crammed into sushi restaurants and noodle shops were eerily quiet. Many schools were closed. Companies allowed workers to stay home. Long queues formed at airports. As Japanese authorities struggled to avert disaster at an earthquake-battered nuclear complex 240 km (150 miles) to the north, parts of Tokyo resembled a ghost town."
In addition to "stagflation" which we announced in January would be the word of the year, we now have a new contender in the running for what may soon be the most popular word for the next 10 months: "escalation." To wit: in addition to everything happening in MENA, escalation has now struck right in our own back yard, after Wisconsin governor Walker announced he would fire 1500 state workers unless democrats, who have been fled and are hiding in Illinois to avoid a critical vote on collective bargaining, return to the state. Reuters take on this word: "The threat of layoffs increased the stakes in a bitter battle between Wisconsin Republicans and Democrats, a fight being watched around the nation as other states like Ohio and Indiana weigh rolling back public employee union power as part of budget-cutting efforts." Of course, 'escalation' could go hand in hand with 'broke' which is the third and last "word of the year" contender: "Earlier this week, Walker declared the state
"broke" when he unveiled his proposed two-year $59.2 billion budget for
fiscal 2012-2013, which eliminates more than 21,000 positions and cuts
funding to education, cities and counties." Whether this will result in so far peaceful protests turning violent as "austerity" which was the word of 2010 comes to the shores of the US is for now unknown.
Following the departure of Gadaffi's private jet pilot, Odd Birger Johansen, who quietly left the country two days ago, the latest to flee the sinking ship is none other than the dictator's favorite Ukrainian nurse Galyna Kolotnytska, who has taken her leave from Tripoli permanently. The approximately 38 year old nurse was first exposed in WikiLeaks cables which Zero Hedge referenced previously here. The fact that Galyna was so close to the dictator and was a potential "love interest" apparently in no way increased her resolve to pull an Eva Braun and join Gaddafi when he finally realizes the end is nigh. And while Gaddafi will be able to do without sponge baths for a day or two, it may prove to replace the pilot of a jet already supposedly loaded up with gold and ready to go, on such short notice.
Is Brian Moynihan The Latest Entrant In The 10(b)-5 Fraud Club After Misrepresenting Foreclosure Halt Charges?Submitted by Tyler Durden on 02/25/2011 19:43 -0400
While reading Bank of America's 631 page 10K (oh yes, someone will read it cover to cover), the first thing we spotted was the followingL "On February 24, 2011, the company and Brian T. Moynihan, President and Chief Executive Officer, entered into a non−exclusive aircraft time sharing agreement (the “Agreement”), which will permit Mr. Moynihan to lease the company’s aircraft for his use." And just why did Mr. Moynihan not simply get a NetJets timeshare lease instead we wonder? We are confident that the terms of the arrangement will be promptly made public for everyone interested to remove any doubt there is any preferential behind the scenes dealing in allowing the former GC to fly anywhere he chooses on a taxpayer's dime (speaking of, BofA, how is that TLGP repayment coming? Ahead of schedule? Behind?). But far more important than the CEO's private jet arrangements, is the following blurb hidden deep inside the bowels of the paperweight:"our agreements with the GSEs and their first mortgage seller/servicer guides provide for timelines to resolve delinquent loans through workout efforts or liquidation, if necessary. In the fourth quarter of 2010, we recorded an expense of $230 million for compensatory fees that we expect to be assessed by the GSEs as a result of foreclosure delays." Keep that statement in mind as we wonder out loud whether or not the CEO actively lied to investors during the company's November 2010 financials conference, not to mention the bank's Q3 conference call.
Classified Cables On Gaddafi's 38 Year Old "Voluptuous Blonde" Ukrainian Concubine/Nurse, And "Other Eccentricities"Submitted by Tyler Durden on 02/22/2011 19:04 -0400
Following today's rambling hour + long filibuster on TV, suddenly many Americans, most of whom had never heard of Gaddafi, suddenly either have a definitive opinion of his persona, or are quite curious by it. Alas, since he appears to have little to no presence in the US yellow press, we are forced to resort to Wikileaks cable 09TRIPOLI771 "A GLIMPSE INTO LIBYAN LEADER QADHAFI’S ECCENTRICITIES" where in addition to all the things one would expect to find in such a cable, we learn of a peculiar love interest involving the Libyan dictator: namely a "voluptuous blonde" Ukraninian, who is supposedly his personal nurse, but more importantly, concubine. So for the gossip crowd here goes: "Qadhafi relies heavily on his long-time Ukrainian nurse, Galyna XXXXXXXXXXXX, who has been described as a “voluptuous blonde.” Of the rumored staff of four Ukrainian nurses that cater to the Leader’s health and well-being, XXXXXXXXXXXX emphasized to multiple Emboffs that Qadhafi cannot travel without XXXXXXXXXXXX, as she alone “knows his routine.” When XXXXXXXXXXXX’s late visa application resulted in her Security Advisory Opinion being received on the day Qadhafi’s party planned to travel to the U.S., the Libyan Government sent a private jet to ferry her from Libya to Portugal to meet up with the Leader during his rest-stop. Some embassy contacts have claimed that Qadhafi and the 38 year-old XXXXXXXXXXXX have a romantic relationship. While he did not comment on such rumors, a XXXXXXXXXXXX recently confirmed that the Ukrainian nurses “travel everywhere with the Leader.”
Hosni Mubarak sure is learning from the best criminals in the world.... Fast. Well over two years after Hank Paulson told Congress that the world would end unless he was given unlimited power to give the banks however much money the needed, Egypt's despotic president has done exactly the same, and in an interview with ABC's Christiane Amanpour, "said he's fed up with being president and would like to leave office
now, but cannot, he says, for fear that the country would sink into
chaos." And there you have it: the same mutual assured destruction strategy used by bankster and by despotic tyrant alike. One wonders - is there really any difference between the two.
Parliamentary pensions, a lavish Bastille Day garden party and ministers’ Cuban cigars are to be sacrificed in the name of economic recovery as the French government seeks to show that ministers are sharing the pain of their austerity drive.
Just because Goldman refuses to get it, and wishes to inflict even more pain on itself with more and more public appearances, here is Lloyd on Charlie Rose last night. More of the same: "We did well because we had the disciplined hedging [on housing]."Paraphrase: "Thank you Paulson for letting us steal your idea and have our prop book go $10 billion short two months before HSBC and New Century went tits up. Also thank you for reminding us to short hundreds of millions worth of Bear stock." Also, the amount of money put into Goldman by the government was not important for us. Ok Lloyd, please refund all the $2 billion in CDS profits you made by shorting AIG immediately. And again Lloyd blatantly misrepresents the truth, by saying that doing away with prop trading would only cost the firm 10% of the firm's revenue (so why the massive fight against the Volcker rule?). Forget all this market maker, liquidity provider generic fallback bs and mumbo jumbo. How about some disclosure on just how you classify prop trading Lloyd? Because something tells us that at least 50% of your flow and correlation desk is purely Prop (and certainly serves to bolster prop profits instead of putting clients "first" as we have disclosed about 10 times in the past week alone), as the 901 pages in Goldman discovery make only all too obvious (we will post on that soon). Hey Lloyd, here's an idea - how about instituting P&L stop limits on all your OTC FICC prop trades just like RBS? Oh yes, we'll go there... and in much more detail. Soon.