The financial collapse of Europe has been delayed a few days.
The IMF has paid off the Greeks maybe.
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Chatoyant
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Getting Back to the Phantom Skill
I have not forgotten that I need to practice.
Free hand is not the only way.
It is a good way to make notes.
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Let the Pill Go Free
The pill remains part of women’s contraception needs, but its usefulness has been limited because it’s available only by prescription.The Republican Party goes ape over the thought of fewer poor.
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For the Battle-Scarred, Comfort at Leash’s End
The Puppies Behind Bars program, which uses prisoners to raise and train dogs, has placed 23 dogs with veterans with post-traumatic stress disorder.
A trickle where there should be a flood.Your dog, your choice. I will happily play beta to your alpha.Our dog, we choose.
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Patty
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Does IMF Stand for Impressive Macroeconomic Flexibility?
So the IMF is holding a meeting on rethinking macroeconomic policy (I was invited but couldn’t make the timing work.) And the Fund’s chief economist has already made it clear that he’s open to some serious revision of the prevailing paradigm.
posted by CalculatedRisk at Calculated Risk - 2 hours ago• From the Athens News: Eurogroup signs off on 8bn euro aid payment Eurozone finance ministers agreed on Tuesday to release an 8bn euro aid payment to Greece, part of an 110bn euro package of support agre...I followed the link:"The top story in theFinancial Times says it all: Businesses plan for possible end of euro
Here is a quote from someone at Volkswagen: “The conclusion is that overall the impact would not be so negative to our company, as we are mainly an exporter ..."
Export to whom?"Here is the post I was trying for:"
• From the Athens News: Eurogroup signs off on 8bn euro aid payment
Eurozone finance ministers agreed on Tuesday to release an 8bn euro aid payment to Greece, part of an 110bn euro package of support agreed with the government last year ...
It looks likeGreece will not default in December, but there is a huge hurdle in January when the private creditors are supposed to "voluntarily" agree to large haircuts.
• Surprise! The EFSF is insufficient.
From the WSJ: Euro Zone Sees Shortfall in Rescue Fund
Euro-zone finance ministers acknowledged on Tuesday that the bloc's bailout fund would have less capacity to help troubled nations than once hoped, and stepped up calls on the European Central
From the Financial Times: Fears of shortfall lead to moves to boost EFSFBank and the International Monetary Fund to come to their aid.
An analysis presented at a meeting of finance ministers here suggested the fund would be able to raise a maximum of €500 billion to €700 billion ($666 billion to $932 billion), far short of the €1 trillion or even €2 trillion that many had expected. ... ministers are exploring further measures to stem the crisis, which they hope to announce at a European summit on Dec. 8-9.
Eurozone finance ministers are weighing more radical options to strengthen their firewall against the sovereign debt crisis, after acknowledging that plans to expand the €440bn eurozone rescue fund could deliver as little as half the extra punch that was anticipated.
• European bond yields were mostly lower today after (from Bloomberg) Italy Pays More Than 7% at Auction of EU7.5 Billion of Bonds
Excerpt with permissionItaly was again forced to pay above the 7 percent threshold that led Greece, Portugal and Ireland to seek bailouts when it sold 7.5 billion euros ($10.1 billion) in bonds today, short of the maximum target for the auction.
The Italian 2 year yield was down to 7.1%, and the 10 year yield was at 7.24%.
The Spanish 2 year yield was down to 5.6%, and the 10 year yield was down to 6.39%.
The Belgian 10 year yield was down to 5.33%, and the French 10 year yield was down to 3.52%.
Note: There is a link below the first post for the table of European bond yields.
• Tim Duy has more: Another European "Solution" Coming?"
http://economistsview.typepad.com/timduy/2011/11/another-european-solution-coming.htmlShort version: NO!http://economistsview.typepad.com/timduy/2011/11/more-europessimism.html"More EuropessimismI hate to beat a dead horse, but the situation in Europe is dire, and two issues crossing my desk this afternoon only add to my angst. First, Karl Smith at Modeled Behavior sees that the ECB is losing all control of monetary policy:
Based on entirely different indicators this looks to be the point where the ECB’s control over Eurozone monetary policy began to come unmoored.
Very, very scary - remember that the ECB is the last great hope. But it can't be effective if the European banking system collapses, which looks more likely each day. A signal that the related rush to cash is severe is that the ECB is no longer able to fully sterilize its asset purchases. Stories at the Wall Street Journal and the Financial Times. Recognize the risk that even when the ECB switches to quantitative easing, the resulting cash just sits unused in bank reserves. Sound familiar? Europe has liquidity trap written all over it.
At the crux of the problem seems to be the inability to arbitrage away differences in funding costs between institutions and countries because of malfunctioning in the European Repo market.
This malfunctioning appears to be down right mechanical with trades regularly not settling on time, collateral not being delivered, awkward interventions by local regulatory agencies and a host of other deep, deep problems.
A second point comes from Edward Harrison, who spots a story which claims France and Germany are looking to impose a strict zero (!) percent budget deficit target by 2016. Harrison's take:
Note that an adjustment to balanced budgets throughout the euro zone requires either an exactly equivalent offset in private sector savings down or in the export sector up . So implicitly, Germany and France are calling for a massive private sector dissaving or a large reduction in the external value of the euro area currency. I see this as a pipe dream. It tells you that bad things are definitely going to happen in Euroland.
This is my fear - that Germany and France continue to press ahead with the "austerity first" plan, with the ECB cheering them along. Unequivocally, this is not going to work. It hasn't worked yet, and there is zero reason to believe that it will in the future. All Europe is doing is setting itself up for greater speculative attacks as each new turn toward austerity pushes the deficit targets further out of reach.
We are setting the stage for a massive counter-example to the US reaction to its financial crisis. The US allowed the fiscal deficit to swell while force-feeding capital to the banking sector (not enough, but that is another story). Europe is pushing for massive fiscal austerity and, to prevent additional fiscal borrowing, pretending that the banks can survive via "liability management exercises." If you think the US would have been better off shrinking the deficit while letting the banking system collapse, it is time for you to go long on Europe.
For the rest of us, enjoy the policy-driven market upturns while they last."
http://www.economist.com/blogs/freeexchange/2011/11/euro-crisis-21 This one believes in the confidence fairy.
http://www.telegraph.co.uk/finance/financialcrisis/
Eurozone approves extension of EFSF: statement in full
Euro zone finance ministers agreed on Tuesday to increase the capacity of the European Financial Stability Facility (EFSF) bailout fund. Here is the full text of a statement from the EFSF:
30 Nov 2011| 6 CommentsEurozone agrees to explore ways to boost IMF firepower
Eurozone finance ministers agreed on Tuesday to explore ways of boosting the IMF's resources through bilateral loans so that the international lender can match the leveraged capabilities of the eurozone's bailout fund.
30 Nov 2011| 5 CommentsVillage stores to enjoy further 'holiday' from business rates
Small shops and businesses will be let off from paying business rates until April 2013, extending their holiday for a further six months.
30 Nov 2011| CommentSchauble admits bail-out fund won't halt crisis
Europe's "big bazooka" bail-out fund is not ready and won't stem the debt crisis that on Tuesday pounded Italy and the European Central Bank (ECB), admitted Wolfgang Schauble, Germany's finance minister.
29 Nov 2011| 240 CommentsConcern remains but 'Plan A-plus' welcomed
The UK economy will struggle to attract the vital new business investment it needs to grow next year, despite the Coalition embarking on a welcome "Plan A plus" to boost infrastructure spending and launch a credit-easing programme, business groups have warned.
29 Nov 2011| CommentThe funds are there but is the confidence?
Damage limitation was top of George Osborne's agenda on Tuesday. Any finance minister opening their mouth in this environment risks inserting their foot in said aperture, creating untold havoc.
29 Nov 2011| CommentLevy increase will hit HSBC hard
HSBC and Standard Chartered are likely to be hardest hit by the Government's decision to increase the bank levy for the third time in less than a year.
29 Nov 2011| 2 CommentsBut who will bell the cat?http://hat4uk.wordpress.com/AUTUMN STATEMENT SKETCH: Now I know why Americans call it The Fall.
Those who complain about the size of the BBC license fee were given more damning evidence of cash-squandering today, when the Beeb’s Autumn Statement coverage involved the hiring of a helicopter. I’m all for the Helicopter View, but five seconds of George Osborne crossing an inner Palace of Westminster quadrangle didn’t really make for what you’d call added value. However, it was at least real – which is more than one could say for the rest of the Commons exchanges.Westminster fails to find a new leaf for the turning over of.
It says a lot about the state of Britain (and Channel Four’s sense of humour) that C4′s chosen weapon to drag people away from this spectacle was the archaic David Niven epic A matter of Life and Death. It is a classic movie – indeed, my Dutch chum Leo Jacobs’ favourite film of all time – but for me the sight of Bomber Command’s plucky resistance to the Nazis would’ve been too much irony on such an inauspicious day. So I stayed with Andrew Neill and friends to watch events unfolding.
Talking of the War, there was a famous comic monologue at its outset by the inimitable Robb Wilton, called The Day War Broke Out. It starts like this:
The day war broke out, my missus looked at me and she said, “What good are you?”
I said, “How d’y’ mean, what good am I?”
“Well,” she said, “you’re too old for the army, you couldn’t get into the navy and they wouldn’t have you in the Air Force, so what good are you?”
I am reminded of the routine every time I see Robert Peston on the telly. In the whole five years I’ve been listening to his words, he has but once surprised me – when he up and splashed the news about Cable saying he would “get Murdoch”. This turned out to be a tip he was given on a plate by another hack he lives close to in Muswell Hill.
As Osborne’s reality rearrangement got going today, Bobby tweeted away a few minutes behind the music, basically telling us what the Draper had already said. In fact, exactly what the Draper had said. We call Peston ‘John Lewis’ in our house, because he was Never Knowingly Underrated.
It would, in turn, be hard to underrate the folks writing the script for UK politics at the moment. Like Eastenders, Westminsters is so predictable – and the characters so two-dimensional – it is truly tedious to watch….a fact that seems to remain unknown to all the players, with the exception of Speaker Bercow. Little John interrupts at regular intervals to say things like “will be heard”, “not what the public expects of this house” and so forth; but what this odious man should be saying is “I John Bercow am going to interrupt now, in order to grab some TV coverage, and distract attention from the worrying height and insane publicity-obsession of my wife”.
The Tories proclaim, and Labour shakes its collective head – or in Ed Miliband’s case, his nose. The Labour Shadow stands up to put the other viewpoint, and the Tories laugh. Or in Theresa May’s case, smile. Mrs May’s smile too is predictable, the sort of smile one reserves for despicable but rich clients. There is something about Theresa that makes me wonder if she might one day get up and machine gun the entire Front Bench. The jury’s out on which one she might choose.
Osborne’s speech had been billed as The Statement George never Wanted to Make, but within three minutes it became The Drone Nobody wanted to Hear. The folks behind him didn’t want to be reminded that Plan A wasn’t working, the rows opposite didn’t want to have it convincingly explained that they were around 30-45% to blame for leaving only Plan A to work with, and the rest of us were bored as soon as the Chancellor said the dread word ‘unexpected’. He said it five times in those first three minutes. It’s not a record, but the needle is very badly stuck on it. Readers under 35, see Wikipedia under ‘Gramophone Records’. (US readers should opt for the ‘Phonograph’ alternative.)
On the whole, Unexpected right now is not good. “We’ve got this mother well and truly taped” would be better. Instead, George Osborne gave us specious nonsense about our low cost of borrowing, and how no new money would be required to stay on track. This was pure Gordon Brown, as within seconds the Chancellor said the deficit would be up by £112bn come 2015. Even more Gordonesque was, “The OBR has established that youth unemployment is down to lack of jobs”. It was a rare chance for the benches opposite to roar with laughter, but it does make one wonder if Osborne’s proof-reader might be the love-child of Mr Magoo and Jo Brand.
The only reason the UK is still afloat, it seems to me, is that we’re not actually attached to the Continent as such, and can thus pretend we’re a little bit of nothing terribly significant perched innocently on the Continental Shelf. A cormorant, perhaps, or a stray seal. You do get the feeling Osborne hopes that, if he stays away from all the EU summits – or says as little as possible – the markets will forget all about us. Not a chance, chummy: our turn will come. More than anything else, this certainty is what makes Autumn statements beyond academic.
There were more initiatives to sweeten the cyanide pill – all of which were needed because our banks aren’t fulfilling their accepted economic role – after which George moved on to the renewal of the A380 outside Bristol, and the idea of another lane on the A14 in Suffolk. Just when I thought he might make reference to Mr & Mrs Nerd’s new kitchen extension in Chesterfield, Osborne sat down. It was time for the Morley Mauler to reply.
Ed Balls told us we had to be clear. The Government strategy was in tatters. It just wasn’t working. It was in disarray. The Man opposite was out of touch. He didn’t get it. We weren’t all in this together at all. The only departure from wooden cliche was when Ed said that Plan A was “flailing”, and the Chancellor would now have to “borrow more borrowing”. These pronouncements held my attention by making me laugh, an outcome that struck me as entirely inappropriate given the disaster under discussion.
I’d like to feel sorry for Edward Balls MP, but I don’t. I don’t feel sorry for any of these third-rate extras in history, but I feel particularly unsorry for Mr Balls. It might be because he manages to make Robert Peston seem creative, it might be because his top lip sweats like Hitler’s did, and it might conceivably be because – when you strip away the polemic drivel – he has absolutely no alternative policy of any credibility either here or abroad with which to bash the Draper. But I suspect it’s mainly because, were he ever to take the ultimate reins of power, Britain would be a bankrupt concentration camp within five years. When it comes to lack of respect for freedom of speech, Ed Balls is every bit as much a threat as Boris Johnson and Harriet Harman.
Hattie was seated to Ed’s left during the debate, and I wonder if I was the only one who noticed that she talked to herself non-stop throughout the proceedings. This may be partly due to the fact that she’s something of a Billie No-Mates these days; but perhaps there is also a hint in there of the descent into madness. If you can bear to watch the BBC IPlayer rerun, I suggest you focus on the omnidirectional nature of her comments. She looks for all the world like the sort of tertiary unfortunate that Thatcher’s lot used to consign to Care in the Community. It is relatively easy for the privileged elite to remain this side of the asylum walls: Stalin achieved it by killing the psychiatrists, Gadaffi by levelling the asylums. I’m agog with anticipation as to how Harriet Harman will manage the process if and when her time comes.
——————————————So there it was: an Autumnal Statement, followed by a Wintry response. Yet they are – all of these featherweights – nothing but dead leaves being blown about by the random breezes of global economics, and the rapacious wheezes of investment banking. Soon to come is the nuclear hurricane of EU fallout. It will flatten everything here, sweeping a great deal of the UK’s political structures in directions as yet unknown. Five years from now, we may well look back on today’s tableau, and weep with nostalgia.
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Danielle Mattoon
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Reporter to Cross the Nation on 2 Wheels — Again
“NYTimes writer off to repeat x-country bike trip he took 18 years ago. Stay tuned! - http://nyti.ms/nTSWFs”http://topics.nytimes.com/top/features/travel/series/on_wheels_america_at_10_mph/index.html?ref=travel'93. Enjoy the trip. I am here until asked by you.I don't see an exit before the new year.
http://query.nytimes.com/search/sitesearch?query=Bruce+Weber&date_select=full&srchst=csehttp://query.nytimes.com/gst/fullpage.html?res=9D07E4D9173BF930A15753C1A9679D8B63&ref=bruceweberhttp://intransit.blogs.nytimes.com/2011/10/24/crossing-the-finish-line/?ref=bruceweber
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Kelsy
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Does IMF Stand for Impressive Macroeconomic Flexibility?
So the IMF is holding a meeting on rethinking macroeconomic policy (I was invited but couldn’t make the timing work.) And the Fund’s chief economist has already made it clear that he’s open to some serious revision of the prevailing paradigm.
http://www.guardian.co.uk/business/debt-crisisMost recent
- 29 Nov 2011: Fears of the debt crisis spreading, forcing the collapse of the euro and plunging the global economy into recession 38 comments
- 29 Nov 2011: Robert Skidelsky: Without growth and income, eliminating the deficit will happen not in 2017 but in never-never land 63 comments
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29 Nov 2011: Mark Weisbrot: If the ECB and European authorities stick with their suicidal doctrine of austerity, then the Federal Reserve must intervene
29 comments - 29 Nov 2011: Mario Monti must do more to tackle tax evasion stop Italy's liquidity problems damaging other eurozone countries, says report
- 29 Nov 2011: Chancellor concedes that the UK risks falling into recession in coming months and that the economy will barely grow next year
82 comments -
29 Nov 2011: Chancellor to move to reassure markets by declaring he is still on course to eliminate structural budget deficit
254 comments - 28 Nov 2011: Attempts to boost EFSF five-fold scuppered by high bond yields and disappointing interest from China and other cash-rich Asian governments
- 28 Nov 2011: Chief economist Pier Carlo Padoan scolds hesitancy of European leaders in grave warning on global economic health
- 28 Nov 2011: Response: Voters still know their own minds, but globalisation could change everything, says Richard Nobbs 78 comments
- 28 Nov 2011: Moody's warned this morning there is a risk of 'multiple defaults' by euro area countries, as the International Monetary Fund denies holding rescue talks with Italy
302 commentshttp://www.zerohedge.com/With Bank Of America On The Verge Of Breaching $5.00, Our Question Of The Day Is...
Submitted by Tyler Durden on 11/29/2011 - 14:13 BAC Bank of America Bank of America ... how many of the top 50 holders presented below, will be forced to sell once we get a 4 handle?
Europe's Grand Plan - 3 Strikes And You're All In
Submitted by Tyler Durden on 11/29/2011 - 13:46 European Central Bank Fail Greece The "Grand Plan" on October 27th had 3 prongs - IIF-led PSI for Greece, Bank Recaps, and the levered EFSF. They have failed on each of their major initiatives, but now the market is comfortable that they will get ECB to "print" and that some form of "policy changes" will be fast tracked. Virtually all the analysis ends with print and treaties and we will be fine. We doubt that we get those yet, and we remain dubious that they will work and won't unleash new and bigger problems.
He's Baaaaaaaaaaack
Submitted by Tyler Durden on 11/29/2011 - 13:32 Italy The Man. The Myth. The Womanizing Legend.
- BERLUSCONI SAYS HE WON'T LEAVE ITALY IN THE HANDS OF THE `LEFT'
Goldman's Sigma X Spot On Once Again: Predicts Imminent UK Contagion
Submitted by Tyler Durden on 11/29/2011 - 13:12 Bond Budget Deficit Fitch France Germany Gilts Gross Domestic Product Italy Lloyds ratings RBS Sigma X Sigma X Sovereigns Twitter United Kingdom VigilantesLast Wednesday we put up the following blurb: "Five months ago, when Italian yields were still tame in the 3% ballpark, and not 7% where they are today, we suggested that based on trading patterns and overall volume in Goldman's dark pool, Italy may be about to experience a "Greek episode." Days later we were proven right as Italian yields and spreads started their relentless move wider, with only those who had access to Sigma X being able to get an advance whiff of what was about to happen. Well today we are happy to report that the German diversion may have worked: the truth is that nobody appears to care about Germany. Instead what everyone does seem to care about, is the nation with the greatest combined debt (government, corporate and household) to GDP in the world. Yup. The UK." Following that, a quick Twitter update from this morning indicated something was again going on with the UK from the perspective of the world's most connected insiders: "UK's LLOYDS and RBS top of most active on Sigma X this morning." Sure enough, here's Fitch with what may well be a precursor to the bond vigilantes finally focusing their attention on the last, latest and greatest AAA credit.
- FITCH: UK GOVT MAY BE MOST INDEBTED OF AAA SOVEREIGNS EX U.S. -BBG
- FITCH: NEW UK FISCAL VIEWS 'SIGNIFICANT DETERIORATION' VS MARCH - BBG
- And the punchline: "the capacity of UK public finances to absorb adverse economic and financial shocks that would result in yet higher public debt while retaining its 'AAA' status has largely been exhausted"
John Taylor: "The Euro Is In A Death Struggle"
Submitted by Tyler Durden on 11/29/2011 - 13:02 Ben Bernanke European Central Bank Greece Japan Portugal Toyota YenFX Concepts' John Taylor has not had a good year. A month ago, talking to Bloomberg he admitted that "What’s really frustrating is that we’re supposed to do well in a lousy world market,” said John Taylor, the founder of New York-based FX Concepts LLC, the world’s largest currency hedge fund. Taylor said in an Oct. 19 interview in London that he has lost 12 percent this year and assets under management fell to $5 billion from as much as $8 billion. "We’re doing very badly." Naturally that is to be expected: after his banner year last year, and doing what is logical in 2011, it is not surprising that he did not anticipate the level of central bank involvement, and the resulting surge of the EURUSD in the past month. Either way, he very bearish stance on the EUR will soon be vindicated. In a brand news interview with Bloomberg he says that the the Euro has entered a "death struggle" and that it is "really worse than I could have dreamed it being." Logically, to every seller there is a buyer. To wit: "What’s stupid is that the ECB is holding it up. Why are they holding up the euro? One of the problems, besides the ECB, is the banks are shrinking, and the banks are selling all of their offshore assets and bringing them back to Europe. That means in fact there is a persistent buyer of euros and it’s their own financial institutions." All this, and more in the full interview below with transcript.
Two Fed Members Speak, Contradict Each Other
Submitted by Tyler Durden on 11/29/2011 - 12:41 Dennis Lockhart European Central Bank Janet Yellen John Williams It is not only Europe who has perfected the art of baffling everyone with intolerable and relentless bullshit. Fed members have it down pat too. Case in point, just presented prepared remarks by Fed uber-dove and vice chair Janet Yellen and hawk and Atlanta Fed president (who becomes eligible to vote in 2012) Dennis Lockhart. Here are the money quotes via Bloomberg:
- YELLEN SAYS `SCOPE REMAINS' FOR ADDITIONAL FED EASING
- YELLEN SEES `STRONG CASE' FOR POLICIES TO BOOST U.S. HOUSING
- FED'S LOCKHART `SKEPTICAL' MORE BOND-BUYING WILL HELP ECONOMY
- LOCKHART SAYS ASSET PURCHASES NOT A `POTENT POLICY OPTION'
Pimco's 4 "Iran Invasion" Oil Price Scenarios: From $140 To "Doomsday"
Submitted by Tyler Durden on 11/29/2011 - 12:05 Abu Dhabi China Crude Crude Oil Global Economy International Energy Agency Iran Iraq Israel Kuwait Monetary Policy Natural Gas OPEC PIMCO Recession Risk Premium Saudi Arabia Pimco's Greg Sharenow has released a white paper on what the Newport Beach company believes are the 4 possible outcomes should Iranian nuclear facilities be struck as increasingly more believe will happen given enough time. The conclusion is sensible enough "Whenever the global economy is in a fragile state, as it is today, geopolitical concerns such as the possibility of a strike on Iran’s nuclear facilities become much more exaggerated. Although we cannot (and will not) predict whether an attack is imminent, or even likely, our experience and research tells us that any major disruption in the supply of oil from Iran could have either subtle or profound global repercussions – especially as excess capacity is virtually exhausted and we doubt that other OPEC nations would be able to compensate for a reduction in Iranian oil production." As for those looking for numbers associated with the 4 scenarios presented by PIMCO here they are: "i) Scenario 1: Exports minimally effected. Concerns would drive initial price response; Oil could spike initially to $130 to $140 per barrel and then settle in a higher range, around $120 to $125; ii) Scenario 2: Iranian exports cut off for one month. In this case, we would expect prices could reach previous all-time highs of $145/bbl or even higher depending on issues with shipping; iii) Scenario 3: Iranian exports are lost for half a year. We think oil prices could probably rally and average $150 for the six months, with notable spikes above that level; iv) Scenario 4: Greater loss of production from around the region, either through subsequent Iranian response or due to lack of ability to move oil through Straits of Hormuz. This is the Armageddon scenario in which oil prices could soar, significantly constraining global growth. Forecasting prices in the prior scenarios is dangerous enough. So, we won’t even begin to forecast a cap or target price in this final Doomsday scenario." Needless to say, even the modest Scenario 1 is enough to collapse global economic growth by several percentage points to the point where not even coordinated global printing will do much.
http://www.zerohedge.com/Chris Martenson Lecture On Why The Next 20 Years Will Be Marked By The Collapse Of The Exponential Function
Submitted by Tyler Durden on 11/29/2011 - 22:12 Chris Martenson Gross Domestic Product UraniumIn this video Chris Martenson, economic analyst at chrismartenson.com and author of ‘The Crash Course’, explains why he thinks that the coming 20 years are going to look completely unlike the last 20 years. In his presentation he focuses on the so-called three “Es”: Economy, Energy and Environment. He argues that at this point in time it is no longer possible to view either one of those topics separately from one another. Martenson explains how exponential growth works and why it is so scary that our economy is based on it. In an example he illustrates how unimaginably fast things speed up towards the end of an exponential curve. He shows that an exponential chart can be found in every one of the three “E’s” for instance in GDP growth, oil production, water use or species extinction. Due to the natural limitations on resources, Martenson comes to the conclusion that we are facing a serious energy crisis.
Commodity Inflation And Spare Capacity: Food For Thought
Submitted by Tyler Durden on 11/29/2011 - 23:50 BLS Bureau of Labor Statistics Personal Consumption Stagflation UnemploymentThe '-flations' are as much part of the commonplace parlance for every sell-side strategist, talking-head, and gold-bug as dividend-stock, quality balance sheet, and long-time-horizon is for long-only managers. Whether deflation, stagflation, inflation, disinflation, or reflation, they all have their moments of sublime glory. Bank of America's Economics team have found some extremely timely 'inflation' signs in the food industry, where it is becoming, somewhat incredibly in this age of supposed frugality and deleveraging, cheaper to eat-out than to cook-at-home. This price disequilibrium has seen consumers respond accordingly; spending on food away from home has picked up while spending on food at home has slowed and also very notably households spending the marginal unit of 'time' working as opposed to 'eating' as economic frailties continue.
About Those "Record" Black Friday Sales...
Submitted by Tyler Durden on 11/29/2011 - 22:33 Apple Black Friday Yup. The rumors were all true: record sales... on negative margins. Because it is not difficult to dump product when you are, well, dumping.
Presenting John Paulson's Mea Culpa For Worst Year Ever
Submitted by Tyler Durden on 11/29/2011 - 21:50 13F Alan Greenspan Bank of America Bank of America John Paulson It is a bad day for people named Paulson. We are not sure if John Paulson, who has not updated the HSBC hedge fund performance tracker through November although was quite happy to do so in October when the market could only rip higher, is more apologetic in his latest letter for the fact that his sold gold holdings to buy even more Bank of America stock, which as everyone knows is about to have a 4 handle, or because somehow his gold fund has managed to return just 1%, even as the shiny object itself has a solid 20% YTD return. Frankly we don't care; LPs in the fund, however, should... although as Paulson has repeatedly stated he has barely seen any redemption requests despite his abysmal performance, so at the end of the day it appears that everyone has gotten what they want. The bulk of the attached Paulson Q3 letter, procured courtesy of ValueWalk, says nothing of note, except to regurgitate some repeatedly stated facts about gold stocks being cheap, and to note that Martin Feldstein has joined the fund as an advisor side by side such "luminaries" as Alan Greenspan, Ed Altman and Chris Thornberg. What is notable, is that Paulson has presented investors with a company matrix of five large banks (their identities are quite simply once one looks at the fund's most recent 13F) which he believes will generates ludicrous potential returns. The last time he did this was for Bank of America. Our advice: short these with leverage.
As Final EFSF Details Emerge, German FinMin Says Bail Out Fund Won't Halt Crisis
Submitted by Tyler Durden on 11/29/2011 - 17:55 Bond fixed Greece Ireland PortugalSome (non-news!) final details are coming out from Europe this evening on the EFSF structure, size, and funding. We provided a framework for understanding the entity this morning, along with some views on just how successful it would (or would not) be. EFSF CEO Regling stated that various approaches will be used simultaneously, providing the entity with more funding flexibility, which is odd since in the next breath he notes the decision to tap the short-dated debt markets in December (seems with all that flexibility you might want to go a little further out). The current lending capacity is EUR 440bn, and they expect a 20-30% partial protection approach meaning they could theoretically leverage around EUR 250bn by around 3-4x. What is most ironic is German FinMin Schaeuble's comments, via The Telegraph, that "although Europe desperately needed a fund "capable of action", plans for the EFSF were too "intricate and complex" for investors to understand", further noting that the fund won't stem the debt crisis.
But maybe the most damning statement comes from the architects of the fund themselves, Regling and Juncker, who said that it is "not possible to give one number on EFSF leveraging" and that the "EFSF firepower will be less than EUR1 trillion ". Case closed.
Standard And Poors Reviews 37 Global Banks, Downgrades Bulk - Full List Attached
Submitted by Tyler Durden on 11/29/2011 - 16:37 After Hours AIG American International Group Bank of America Bank of America CDS Counterparties MF Global ratings Standard And Poors Bank of America now precisely at $5.00 following an after hours downgrade from A to A-. We note that BofA's CDS widened 10bps today while MER CDS widened 18bps and notably wider (we haven't seen runs post downgrade) and we wonder how this will impact the firm's huge derivative book which was recently moved to the Bank's higher rated, and deposit backed unit for its better rating support. In fact, following such a drastic action, it is quite likely that derivatives units across the board will see counterparties scrambling to demand a far greater cash cushion for fears of the same downgrade waterfalls that took down AIG and MF Global.
Financials Stumble Amid Average Volume Range Day
Submitted by Tyler Durden on 11/29/2011 - 16:33 BAC Bank of America Bank of America Copper Equity Markets Exchange Traded Fund Iran Morgan Stanley Price Action Reality
UPDATE: The S&P downgrade after-hours of the major financials is dragging ES lower and more in line with medium-term CONTEXT. BAC lost $5 momentarily.
Bank Of America and Morgan Stanley closed today down around 7% from the 0931ET tick yesterday with BofA managing to defend the $5 Maginot Line once again - though closing almost at their lows. Tech and Financials were the worst sectors of the day (and the only sectors with negative performance) as Energy outperformed dragged by a war-premium-driven Oil price that crossed $100 intraday but ended just shy of it (up 2.5% from its intraday lows). After some early vol, FX markets trod water post the European close, practically unchanged on the day (and DXY -0.7% on the week) as equity markets once again outperformed credit in their illusory manner (though IG and HY did rally some on the day). Correlations continue to deteriorate across a broad basket of risk assets as TSY yields oscillated up and then down and then up into the close but it was Oil and AUDJPY's trend up that supported ES more than anything today.
http://www.bbc.co.uk/news/business/
29 November 2011 Last updated at 22:56 ETEurozone may miss bailout target
Plans to expand the eurozone's debt rescue fund to about 1tn euros look unlikely to be achieved, but the extra bailout money will still be "substantial".
- OECD warns of European recession
- What's the matter with Spain?
- What's the matter with Italy?
- Is the euro about to capsize?
Australia ends Samsung Galaxy ban
Samsung wins a major battle in its tussle with Apple after an Australian court overturns a ban on the sale of its Galaxy tab.
Facebook agrees to tighten privacy controls as part of a settlement with the US regulator, the Federal Trade Commission.Facebook settles privacy inquiry
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Dow Jones 15 min delayvaluechange%11555.63+32.62+0.28Top winner and loser Home Depot Inc. 38.96+1.66+4.45Bank of America Corp. 5.08-0.17-3.24Nasdaq 15 min delayvaluechange%2515.51-11.83-0.47Top winner and loser Central European Distribution Corp. 4.39+0.99+29.12Avanir Pharmaceuticl 2.29-0.26-10.20S&P 500 15 min delayvaluechange%1195.19+2.64+0.22Top winner and loser Best Buy Co. Inc. 27.86+1.37+5.17Corning Inc. 13.19-1.59-10.76
Market reportsvaluechange%5385.13+2.02+0.04
London
FTSE 100 15 min delayvaluechange%5337.00+24.24+0.46Top winner and loser Randgold Resources Ltd. 6600.00p+360.00+5.77Lloyds Banking Group 23.18p-0.50-2.09Dax 15 min delayvaluechange%5799.91+54.58+0.95Top winner and loser Commerzbank AG 1.33+0.02+1.53E.On AG 17.58-0.26-1.50Up to two million set for UK strike
Up to two million public sector workers in the UK prepare to strike from midnight, in what is set to be the biggest walkout for a generation.
- Strikes: How will I be affected?
- Labour MPs to cross picket line
- Schools closed in pensions strike
- Strike 'won't hurt urgent care'
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