Financial Crisis

[midas]

question for General Midas and Colonel Flying:

i am considering to enlist in the doom&gloom brigade and willing to start my career as a recruit. what are the procedures, do i need to submit any credentials, will the fact that we own agricultural land and physical gold count as positive?

p.s. is circumcision mandatory?

pps. i am not exactly joking. there's something brewing in Europe and sooner or later it will have global effects!

Well this is an incredibly historic occasion Admiral Naam!

speaking on behalf of flying I am sure he would equally honoured to welcome you

your credentials are more than adequate..........................the only procedure

is Alex Lah will set an examination paper for you Ha !! will you accept ?

But seriously for a moment .........you do seem concerned. So shouldn't we be equally concerned about US and Japan

for the same reasons ?

[lannarebirth]

pps. i am not exactly joking. there's something brewing in Europe and sooner or later it will have global effects!

Euro doubters have known this for a long time. The more aggressive of that lot have long since bankrupted themselves as more and more paper got hung on he back of this "monetary experiment". Would you be so kind as to give me a nudge when its time to buy DM's again? TIA

Edited May 6, 2010 by lannarebirth

[AlexLah]

I guess the bond holders could be a bit worried yes.

Phase one of the initial ritual involves the "Stress Test" dear Naam.

It involves an anal probe being inserted (a really big one) and for it to stop and to enter phase two would require the correct answer to the question: How does it feel to get shafted?

[flying]

question for General Midas and Colonel Flying:

i am considering to enlist in the doom&gloom brigade and willing to start my career as a recruit. what are the procedures, do i need to submit any credentials, will the fact that we own agricultural land and physical gold count as positive?

p.s. is circumcision mandatory?

pps. i am not exactly joking. there's something brewing in Europe and sooner or later it will have global effects!

Actually most (as you did )have it backwards ...... So called Doom & gloomers are just preppers. Prepping in case of a bigger problem is never a bad thing.

If you prep a bit & nothing happens.....So what?

If you had plenty of warning & did nothing.........??

As such your gold & land will serve you well should TSHTF

but as always the gold is for after & the land for during.

ps: Your right about Europe & dont think the USD will not also

The higher the USD goes the higher gold will fly. It is going to outperform all currencies as I have said before.

Edited May 6, 2010 by flying

[jcon]

Holy snark! JPY raped the EUR/USD. WOW.

[flying]

that little plunge below 10k DOW was interesting too.

Down only 500 or so now....hahah only

[flying]

Dow Plunges Amid Europe Lending Worries

[lannarebirth]

shall i buy a rope and shoot myself to escape anarchy? any youtube clips with good advice?

I have never seen this rope that can shoot? How do you know which end is the business end?

old tchermann joke

Somali Pirates Say They Are Subsidiary of Goldman Sachs

Could Make Prosecution Difficult, Experts Say

NORFOLK , VIRGINIA – Eleven indicted Somali pirates dropped a bombshell in a U.S. court today, revealing that their entire piracy operation is a subsidiary of banking giant Goldman Sachs.

There was an audible gasp in the courtroom when the leader of the pirates announced, "We are doing God's work. We work for Lloyd Blankfein."

The pirate, who said he earned a bonus of $48 million in dubloons last year, elaborated on the nature of the Somalis' work for Goldman, explaining that the pirates forcibly attacked ships that Goldman had already shorted.

"We were functioning as investment bankers, only every day was casual Friday," the pirate said.

The pirate acknowledged that they merged their operations with Goldman in late 2008 to take advantage of the more relaxed regulations governing bankers as opposed to pirates, "plus to get our share of the bailout money."

In the aftermath of the shocking revelations, government prosecutors were scrambling to see if they still had a case against the Somali pirates, who would now be treated as bankers in the eyes of the law.

"There are lots of laws that could bring these guys down if they were, in fact, pirates," one government source said. "But if they're bankers, our hands are tied."

Edited May 6, 2010 by lannarebirth

[Naam]

"There are lots of laws that could bring these guys down if they were, in fact, pirates," one government source said. "But if they're bankers, our hands are tied."

priceless!

[Naam]

pps. i am not exactly joking. there's something brewing in Europe and sooner or later it will have global effects!

Euro doubters have known this for a long time. The more aggressive of that lot have long since bankrupted themselves as more and more paper got hung on he back of this "monetary experiment". Would you be so kind as to give me a nudge when its time to buy DM's again? TIA

having the good ol' Deutsche Mark again is one of my wet dreams. but unfortunately it will remain a dream... i think

[Naam]

But seriously for a moment .........you do seem concerned. So shouldn't we be equally concerned about US and Japan for the same reasons ?

i am indeed concerned Midas and when you look at the time of my postings you will realise that it was long before the sh*t hit the fan in NY, nothing was brewing in Europe except people were busy telling each other "Greece problem solved!" and my two bankers thought i was going bonkers when i gave them my sell, short and forex forward orders. i have not checked yet but i think the total volume beats my former record volume of october 1997. let's see what the lemmings in Europe will do today. it is extremely relaxing sitting on the fence and watch.

[flying]

let's see what the lemmings in Europe will do today. it is extremely relaxing sitting on the fence and watch.

Good Call & relaxing on the fence was a nice spot for the day

Europe....Germany Ratifies their end of this bailout today...or tomorrow depending where you are now.

Will it cause stability or turmoil?

[midas]

Holy snark! JPY raped the EUR/USD. WOW.

"But I don't want to go among mad people," Alice remarked.

"It's hard to predict when the bond market might collapse, but it would happen when the market judges that Japan's ability to finance its debt is not sustainable anymore."

"And when that happens, the yen will plummet and a capital flight from Japan's government bonds to foreign bonds will occur," he said.

http://www.google.com/hostednews/afp/artic...R84zQgvH_Idf_XQ

[BEENTHEREDONETHAT]

"The pirate, who said he earned a bonus of $48 million in dubloons last year, elaborated on the nature of the Somalis' work for Goldman, explaining that the pirates forcibly attacked ships that Goldman had already shorted."

Seems that it should be easy for gov't to check to see if GS had in fact shorted the pirated ships. If true they should string them up by their thumbs, or anything else sticking out.

[badge]

let's see what the lemmings in Europe will do today. it is extremely relaxing sitting on the fence and watch.

Do I recall correctly you announcing your purchase of some Venezuelan corp Bonds a few months ago? What other positions might you have in securities and capital markets?

[Naam]

let's see what the lemmings in Europe will do today. it is extremely relaxing sitting on the fence and watch.

Do I recall correctly you announcing your purchase of some Venezuelan corp Bonds a few months ago? What other positions might you have in securities and capital markets?

correct. bought PdVSA XS0294364103 mid dec 2009 @51 and sold @~62 after a few weeks but i still hold the Ven sovereign ISIN US922646AT10 which i bought a few days later. i also hold on to a few EUR denominated subs XS0237509293, XS0138973010, DE000A0KAAA7 and a EUR quasi sovereign XS0234088994. rest is all cash USD, THB, SGD, ZAR, AUD, TRY, BRL, INR. the lion share cash is of course USD plus a hefty forward EUR/USD.

[flying]

[jcon]

Letterman: "I gotta call a guy."

I don't know what to say about last night (US markets daytime). I could only think, "open <deleted>' outcry." Zero sum. Period. (well, maybe a few caveats )

It's like the evolution on online porn. First just a few sites (yes, ethernet was installed in my dormitory my freshman year for the first time). At that time, you could check out the porn and then get hammered and then GO OUT and get laid. Then some guys started skipping the going out part totally, and just jerked themselves as more porn evolved. Now, just 15 years later, computers are jerking each other off. Edit. No, now it's guys jerking off to computers jerking each other off. That's my take. Full circle or backwards-evolution? There will be a reversion to the mean - there always is....

I don't know the answer, but I think it has it's roots in online porn (SEC?) .......

And now I realize that my trader potty-mouth has returned. And now maybe I realize why prices for seats on the CBOE had gone up 10-fold in 10 years - maybe. I don't regret much in life - but if I could still have that seat on the exchange..... all I can say is somebody blew out huge. And that's fine, in a zero-sum world, but that doesn't seem to be the world in which we live in anymore....

Edit: seem to have a problem editing (can't see any 'reply' 'add reply' 'edit' buttons, etc.... Safari Leopard)

Edited May 7, 2010 by jcon

[jcon]

^^^ serious editing problem, sorry.

The rest of the edit was: "Double Edit: can't reply to any messages in my PM inbox, so here you go RJT if you're reading this... Halo, HK. And lanna, nice to see your dog back in your avatar "

[manarak]

now holding only CHF, AUD and CAD.

The EC will have to pay for 20 years.

They can't let Greece go bankrupt or go out of the EURO, because either way, the EURO countries are holding a big bunch of Greek debt in EURO (and Portuguese debt and Spanish debt...).

So there is no other choice than to subsidize southern Europe.

All EURO countries are already heavily indebted, and will have to raise taxes.

And they didn't even begin to take action on the pension and healthcare problems that will come in the next 25 years, starting 2013.

Greek deficit alone is 50 Billion EUR a year, add Portugal and Spain, add pensions (another 50 Billion per year and per country) and add healthcare (mainly geriatric care), that's another 30 Billion...

Some bankers spoke about 600 billion EUR that are needed, I believe they are still way off base. We are looking at a minimum of 300 Billion PER YEAR...

For Germany, the smartest thing would indeed be to reintroduce the Deutsche Mark.

Edited May 7, 2010 by manarak

[hawthorne]

over a year later and the outlook seems much worse especially in Europe. The US actually seems to be able to weather the storm and Asia looks the best.

[12DrinkMore]

TEXT-Greek PM statement on activating EU/IMF aid

""Yesterday, we learned of the real deficit figures. It reminded us of all the mistakes ... that we inherited from the previous government.

We inherited a boat ready to sink; a country without credibility; a country that had lost the respect of its friends and its partners; an economy exposed to the mercy and the appetite of the speculators.

From day one, we have rolled up our sleeves and begun the difficult work to change this gloomy situation.

Yep, start by blaming it on the "Others".

We prepared a plan with difficult and painful measures, but we regained our credibility.

After a marathon, we were vindicated in arriving at the powerful decision by the EU to support the country with a landmark mechanism.

We were hoping that such a decision would be enough to calm down markets in order to give us the possibility to borrow with lower rates."

Nobody believes a SINGLE word the Greeks utter. They are a bunch of total liars and deceivers, and have been for thousands of years.

"Do not trust the horse, Trojans. Whatever it is, I fear the Greeks even when they bring gifts."

Why is the Greek problem such a massive problem? Once again it is because the dam_n banks have been queuing up to buy sub-prime debt from the PIGS. So how much are they, or rather we, in for?

http://finance.yahoo.com/banking-budgeting...set=&ccode=

Overall, French banks have the greatest exposure to Greek debt among European lenders, according to the Bank for International Settlements (BIS) -- $78.8 billion of the $193.1 billion of total claims European banks have on Greece. Credit Agricole and Societe Generale are among individual European banks most exposed to Greece's financial crisis.

France's banking sector has the second-largest exposure to Portugal and Spain debt loads, after Germany, according to the BIS.

European banks have more at-risk assets in Portugal and Spain than in Greece. European lenders are holding Portugal debt issues of $240.5 billion -- including $47.4 billion by German banks and $44.9 billion by French firms, according to BIS figures from the end of 2009 quoted in a Bloomberg report.

Overall, European exposure to Spanish debt stands at $832.3 billion

Jesus, why on earth have these banks been lending the PIGS all this cash? But this is clearly not bailing out the Greeks, who, IMO, should be left to bake in their own Mousaka. But we are now, once again, bailing out the "too big to fail" UK, German and French financial idiots. It is about time these bastards were severed at the knees and necks.

http://www.theatlantic.com/magazine/archiv...uiet-coup/7364/

Explains it all.

I am once again getting very angry about this banking bullshit. I have been very angry about the Greeks, but no, this anger was misplaced. It is the banks who deserve my unabated anger and hatred. After all, they made the decision to finance the Greeks' profligacy, even though it has been known for centuries that the Greeks are incapable of controlling their spending. I don't even see how government regulation could have prevented this inside the Euro region. No, the banks are bringing us down to the bottom, but at the same time awarding themselves massive bonuses for "a job well done".

[12DrinkMore]

now holding only CHF, AUD and CAD.

Unfortunately it is the policy of the Swiss National Bank to not let the CHF get out of line with the EUR. And presumably, being the sole issuer of CHF, they are in the position of selling CHF against the EUR for some time to come.

The EC will have to pay for 20 years.

They can't let Greece go bankrupt or go out of the EURO, because either way, the EURO countries are holding a big bunch of Greek debt in EURO (and Portuguese debt and Spanish debt...).

So there is no other choice than to subsidize southern Europe.

All EURO countries are already heavily indebted, and will have to raise taxes.

And they didn't even begin to take action on the pension and healthcare problems that will come in the next 25 years, starting 2013.

Greek deficit alone is 50 Billion EUR a year, add Portugal and Spain, add pensions (another 50 Billion per year and per country) and add healthcare (mainly geriatric care), that's another 30 Billion...

Some bankers spoke about 600 billion EUR that are needed, I believe they are still way off base. We are looking at a minimum of 300 Billion PER YEAR...

For Germany, the smartest thing would indeed be to reintroduce the Deutsche Mark.

Even that will not work anymore. The banks and Euro-politicians have ensured that the whole system is so interlinked that it would be easier to reconstruct a scrambled egg and make it hatch. If the Germans reintroduced the DM it would immediately appreciate against the EUR. The debt owed to the German banks would still be in the devaluing EUR, I doubt whether they could contractually convert to DM and demand repayment in DM, which would hurt the southern Euro-Winos even more and start a flurry of defaults.

It is now one hel_l of a tangled web that has been woven.

Edited May 7, 2010 by 12DrinkMore

[12DrinkMore]

GDP/Debt to GDP

So how is this supposed to work?

The two main financial national indicators that we keep seeing are the GDP, supposedly a measure of the economic productivity of a country, and the national debt, which gives the financial gurus sweaty bums when the ratio increases above some 10%.

Right, so the word on the street is "AUSTERITY". Now, with over 50% of the UK GDP created by government spending, what will happen if they manage to make a huge effort and cut 10% off the public service costs. BLAP! That would surely mean a drop of 5% of the GDP, sending the markets into turmoil, and at the same time increasing the national debt to GDP ratio by another couple of percent, causing even more turmoil and brown underpants. I still find it difficult to understand why, after the last couple of years of basically contraction in manufacture, we have not seen a corresponding drop in GDP. Although increased national debt has certainly contributed to holding up the statistics.

Maybe it is time to revise what the health indicators of a nation should be?

[Gambles]

pps. i am not exactly joking. there's something brewing in Europe and sooner or later it will have global effects!

Euro doubters have known this for a long time. The more aggressive of that lot have long since bankrupted themselves as more and more paper got hung on he back of this "monetary experiment". Would you be so kind as to give me a nudge when its time to buy DM's again? TIA

having the good ol' Deutsche Mark again is one of my wet dreams. but unfortunately it will remain a dream... i think

maybe.............or then again it could be your worst nightmare..... (ok second worst after the Euro)

[Gambles]

now holding only CHF, AUD and CAD.

The EC will have to pay for 20 years.

They can't let Greece go bankrupt or go out of the EURO, because either way, the EURO countries are holding a big bunch of Greek debt in EURO (and Portuguese debt and Spanish debt...).

So there is no other choice than to subsidize southern Europe.

All EURO countries are already heavily indebted, and will have to raise taxes.

And they didn't even begin to take action on the pension and healthcare problems that will come in the next 25 years, starting 2013.

Greek deficit alone is 50 Billion EUR a year, add Portugal and Spain, add pensions (another 50 Billion per year and per country) and add healthcare (mainly geriatric care), that's another 30 Billion...

Some bankers spoke about 600 billion EUR that are needed, I believe they are still way off base. We are looking at a minimum of 300 Billion PER YEAR...

For Germany, the smartest thing would indeed be to reintroduce the Deutsche Mark.

it could be the smartest or it could just be the dumbest

It may actually be that France is in the better fiscal shape

[Gambles]

TEXT-Greek PM statement on activating EU/IMF aid

""Yesterday, we learned of the real deficit figures. It reminded us of all the mistakes ... that we inherited from the previous government.

We inherited a boat ready to sink; a country without credibility; a country that had lost the respect of its friends and its partners; an economy exposed to the mercy and the appetite of the speculators.

From day one, we have rolled up our sleeves and begun the difficult work to change this gloomy situation.

Yep, start by blaming it on the "Others".

We prepared a plan with difficult and painful measures, but we regained our credibility.

After a marathon, we were vindicated in arriving at the powerful decision by the EU to support the country with a landmark mechanism.

We were hoping that such a decision would be enough to calm down markets in order to give us the possibility to borrow with lower rates."

Nobody believes a SINGLE word the Greeks utter. They are a bunch of total liars and deceivers, and have been for thousands of years.

"Do not trust the horse, Trojans. Whatever it is, I fear the Greeks even when they bring gifts."

Why is the Greek problem such a massive problem? Once again it is because the dam_n banks have been queuing up to buy sub-prime debt from the PIGS. So how much are they, or rather we, in for?

http://finance.yahoo.com/banking-budgeting...set=&ccode=

Overall, French banks have the greatest exposure to Greek debt among European lenders, according to the Bank for International Settlements (BIS) -- $78.8 billion of the $193.1 billion of total claims European banks have on Greece. Credit Agricole and Societe Generale are among individual European banks most exposed to Greece's financial crisis.

France's banking sector has the second-largest exposure to Portugal and Spain debt loads, after Germany, according to the BIS.

European banks have more at-risk assets in Portugal and Spain than in Greece. European lenders are holding Portugal debt issues of $240.5 billion -- including $47.4 billion by German banks and $44.9 billion by French firms, according to BIS figures from the end of 2009 quoted in a Bloomberg report.

Overall, European exposure to Spanish debt stands at $832.3 billion

Jesus, why on earth have these banks been lending the PIGS all this cash? But this is clearly not bailing out the Greeks, who, IMO, should be left to bake in their own Mousaka. But we are now, once again, bailing out the "too big to fail" UK, German and French financial idiots. It is about time these bastards were severed at the knees and necks.

http://www.theatlantic.com/magazine/archiv...uiet-coup/7364/

Explains it all.

I am once again getting very angry about this banking bullshit. I have been very angry about the Greeks, but no, this anger was misplaced. It is the banks who deserve my unabated anger and hatred. After all, they made the decision to finance the Greeks' profligacy, even though it has been known for centuries that the Greeks are incapable of controlling their spending. I don't even see how government regulation could have prevented this inside the Euro region. No, the banks are bringing us down to the bottom, but at the same time awarding themselves massive bonuses for "a job well done".

and of course much of municipal France & Germany ( www.bloomberg.com/apps/news?pid=20601109&sid=a30KHZKX1WJo ) and not forgetting Italy....

http://www.zerohedge.com/article/step-asid...-to-pigas-life/

[Gambles]

Even that will not work anymore. The banks and Euro-politicians have ensured that the whole system is so interlinked that it would be easier to reconstruct a scrambled egg and make it hatch. If the Germans reintroduced the DM it would immediately appreciate against the EUR. The debt owed to the German banks would still be in the devaluing EUR, I doubt whether they could contractually convert to DM and demand repayment in DM, which would hurt the southern Euro-Winos even more and start a flurry of defaults.

It is now one hel_l of a tangled web that has been woven.

I share your concerns

The Euro has become The Hotel California of the currency world

[Gambles]

GDP/Debt to GDP

So how is this supposed to work?

The two main financial national indicators that we keep seeing are the GDP, supposedly a measure of the economic productivity of a country, and the national debt, which gives the financial gurus sweaty bums when the ratio increases above some 10%.

Right, so the word on the street is "AUSTERITY". Now, with over 50% of the UK GDP created by government spending, what will happen if they manage to make a huge effort and cut 10% off the public service costs. BLAP! That would surely mean a drop of 5% of the GDP, sending the markets into turmoil, and at the same time increasing the national debt to GDP ratio by another couple of percent, causing even more turmoil and brown underpants. I still find it difficult to understand why, after the last couple of years of basically contraction in manufacture, we have not seen a corresponding drop in GDP. Although increased national debt has certainly contributed to holding up the statistics.

Maybe it is time to revise what the health indicators of a nation should be?

well if no-one tells the truth, does it even matter what criteria they're fudging?

the measure of 10% of annual fiscal deficit is ultimately unsustainable

the reason that GDP has rebounded is because of the stimulus - this has mainly benefitted services especially banking and so hasn't impacted the real economy or manufacturing data

Cop this - http://www.wimp.com/budgetcuts

[Gambles]

Please find below the latest update from MBMG International.

A new book by former US Comptroller General, David Walker, makes some shocking claims and revelations:

“The recession and attendant financial shock appear to be easing as I write this. But in Washington, financial imprudence is part of the fabric of government. You can see that in a single document that gets updated every year: the US budget. In Washington, they speak of our ‘fiscal exposure’ - the sum of all the benefits, programs, debt payments, and other expenses that will cost us big bucks in the future whether or not we want to cut spending. The term I've used for all of that is our ‘federal financial hole.’ In the first eight years of this century it has grown from $20.4 trillion to $56.4 trillion - a 176 percent increase.

Maybe you have a few bills - mortgage payment, auto loan, cable TV, phone - deducted automatically from your checking account. How would you feel if those expenses had risen 176 percent in eight years while your income remained steady?

The hole is getting deeper because we are doing little to bring our income into line with our spending. And until now I haven't even talked about the interest payments on our federal debt. Suppose our government fails to increase federal revenues above the current rate. Based on the GAO's latest long-range alternative budget simulation, within about twelve years, our interest payments will become the largest single expenditure in the federal budget. By 2040, all of our federal tax revenues will add up to enough to cover only our two biggest expenses: interest on our debt and Medicare and Medicaid. Everything else - Social Security, defense, education, road building, you name it - will fail to be funded.

As you know, benefits payments are the biggest chunk of the government's massive obligation. Since the 1960s, the growth of these mandatory payments has overtaken what we spend on defense as a share of our national output - and what we spend on everything else in our federal budget, from law enforcement to border protection, children's programs to national parks, highways to foreign aid.

Although defence spending has declined dramatically as a percentage of the overall federal budget over the past forty years, we have actually increased total defense spending. In recent years, we have added resources to fight terrorism abroad. That means that other discretionary programs are much more susceptible to cutting. These include education, research, transportation, infrastructure, and other programmes that, if properly designed and effectively executed, can promote economic growth and development.”

Sobering thoughts in just one page – imagine the effect of the entire book.