Financial Crisis

[lannarebirth]

http://m.bbc.co.uk/n...siness-18858444

Nestl頣hief sights the "financialisation" of food markets as one of the major contributing factors sustaining higher prices and especially their greater volatility.

using grains to produce bio fuel is a crime!

Couldn't agree more. What next? Will they be making the water and air that sustains universal life just another market commodity as well?

[Naam]

http://m.bbc.co.uk/n...siness-18858444

Nestl頣hief sights the "financialisation" of food markets as one of the major contributing factors sustaining higher prices and especially their greater volatility.

using grains to produce bio fuel is a crime!

Couldn't agree more. What next? Will they be making the water and air that sustains universal life just another market commodity as well?

they would if they could and they will if they can. a friend of mine just returned from Cochabamba, Bolivia where his "ex" lives and told me an unbelievable story about "water".

read this!

http://en.wikipedia.org/wiki/2000_Cochabamba_protests

[waza]

http://m.bbc.co.uk/n...siness-18858444

Nestl頣hief sights the "financialisation" of food markets as one of the major contributing factors sustaining higher prices and especially their greater volatility.

using grains to produce bio fuel is a crime!

Couldn't agree more. What next? Will they be making the water and air that sustains universal life just another market commodity as well?

they would if they could and they will if they can. a friend of mine just returned from Cochabamba, Bolivia where his "ex" lives and told me an unbelievable story about "water".

read this!

http://en.wikipedia....abamba_protests

The same thing happened in Augusto Pinochet's Chile..........

The Chicago Boys (c. 1970s) were a group of young Chileaneconomists most of whom trained at the University of Chicago under Milton Friedman and Arnold Harberger, or at its affiliate in the economics department at the Catholic University of Chile. The training was the result of a "Chile Project" organised in the 1950s by the US State Department and funded by the Ford Foundation, which aimed at influencing Chilean economic thinking. The project was uneventful until the early 1970s. The Chicago Boys' ideas remaining on the fringes of Chilean economic and political thought, even after a 500-page plan based on the Chicago School's ideas called the El ladrillo was presented as part of Jorge Alessandri's call for alternative economic platforms for his 1970 presidential campaign. Alessandri rejected El ladrillo, but it was revisited after the 1973 Chilean coup d'état on 11 September 1973 brought Augusto Pinochet to power, and became the basis of the new regime's economic policy. Eight of the ten principal authors of "The Brick" were Chicago Boys.

http://en.wikipedia....ki/Chicago_Boys

These economic prinicple were adopted and implemented by Thatcher and Reagan which sowed the seeds for the GFC. Now its Bolivias turn.

Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician, and author who taught at theUniversity of Chicago for more than three decades. He was a recipient of the Nobel Memorial Prize in Economic Sciences, and is known for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy.^[1] As a leader of the Chicago school of economics, he influenced the research agenda of the economics profession........Friedman was an economic adviser to conservative President Ronald Reagan. ........During 1975, two years after the military coup that ended the government of Salvador Allende, the economy of Chile experienced a severe crisis. Friedman accepted the invitation of a private foundation to visit Chile and speak on principles of economic freedom. ............Friedman visited Iceland during the autumn of 1984, met with important Icelanders and gave a lecture at the University of Iceland on the "tyranny of the status quo." He participated in a lively television debate on August 31, 1984 with socialist intellectuals, including Ólafur Ragnar Grímsson, who later became the president of Iceland..................Although Friedman never visited Estonia, his book Free to Choose exercised a great influence on that nation's then 32-year-old prime minister, Mart Laar, who has claimed that it was the only book on economics he had read before taking office................Milton Friedman influenced the thinking of Alan Walters and Patrick Minford, two of Margaret Thatcher's main macroeconomic advisers. http://en.wikipedia.org/wiki/Milton_Friedman

Milton Friedman architect of the GFC amongst many other economic failures

Edited July 22, 2012 by waza

[yoshiwara]

One criticism against grain fuel is that it is subsidised and indirectly pushes up food prices as grain production is diverted.

Whether the subsidy is dropped or not in the face of cheap natural gas remains to be seen.

[flying]

The Renewable Energy Disaster

Edited July 22, 2012 by flying

[Naam]

The Renewable Energy Disaster

good report! unfortunately containing the fairy tale of Rossi's "e-cat"

[flying]

The Renewable Energy Disaster

good report! unfortunately containing the fairy tale of Rossi's "e-cat"

I am not up to date on that but remember first seeing info about it here when someone posted it.

As to the whole search for fossil fuel replacement....I cannot help but feel like they are blindly charging forward

in search of it when they should instead stop. Go back to square one & look for alternative forms of propulsion.

Instead of continuing to search for food for the beast that drained us.....

I often thought the same when I use to watch NASA launches.

It just seemed barbaric that they blast their way into space.

I guess I thought (even as a kid) that we as a race would be much further along by 2012

Edited July 23, 2012 by flying

[yoshiwara]

I often thought the same when I use to watch NASA launches.

It just seemed barbaric that they blast their way into space.

I guess I thought (even as a kid) that we as a race would be much further along by 2012

I thought gold bugs were more into the Capricorn 3 Theory. Maybe it was a fake Space-age fuel conservation conspiracy.

[ajarnpot]

grains to fuel makes perfect sense, particularly if the price of oil increases more. Double whammy, solving energy problems and overpopulation all in one go?

No need for birth control just sell your grain to the highest bidder

[flying]

I thought gold bugs were more into the Capricorn 3 Theory. Maybe it was a fake Space-age fuel conservation conspiracy.

Not sure what gold bugs are into....I don't know any

[churchill]

Greece should pay wages in drachmas: German MP

http://www.reuters.c...E86M07J20120723

seems increasingly on the cards that Greece will leave .. so next Italy or Spain .. If we have seen some flows from the south to the north expect a flood ...and out of the Euro ...to what ...????

It seems the house of cards is starting to fall ....

Spain is clutching at straws ...... Monopoly .....

Linda Yueh ‏@lindayueh

Guindos: #Spain banks selling assets to bad bank may get stake in vehicle or state-backed bonds issued by the bad bank as payment or cash

Edited July 23, 2012 by churchill

[churchill]

Are Big Banks Criminal Enterprises?

http://www.washingtonsblog.com/2012/07/big-banks-are-criminal-enterprises.html

[Naam]

Are Big Banks Criminal Enterprises?

http://www.washingto...nterprises.html

of course they are!

[Naam]

seems increasingly on the cards that Greece will leave .. so next Italy or Spain .. If we have seen some flows from the south to the north expect a flood ...and out of the Euro ...to what ...????

Gold? Unobtainium? Waziristan Rupee? Quadlithium? Amero? Islamic gold-pressed Latinum Dinar? Flaxseed Oil?

[Naam]

BN 07/23 12:32 *SPAIN'S SHORT SELLING BAN COULD BE EXTENDED BEYOND 3 MONTHS

BN 07/23 12:32 *SPAIN'S SHORT SELLING BAN INCLUDES DERIVATIVES, OTC INSTRUMENTS

BN 07/23 12:31 *SPAIN BANS SHORT SELLING ON ALL STOCKS FOR THREE MONTHS

BN 07/23 12:29 *SPAIN STOCK MARKET REGULATOR BANS SHORT SELLING FOR 3 MONTHS

BN 07/23 12:29 *SPAIN STOCK MARKET REGULATOR BANS SHORT SELLING

[Naam]

I thought gold bugs were more into the Capricorn 3 Theory. Maybe it was a fake Space-age fuel conservation conspiracy.

Not sure what gold bugs are into....I don't know any

[flying]

I thought gold bugs were more into the Capricorn 3 Theory. Maybe it was a fake Space-age fuel conservation conspiracy.

Not sure what gold bugs are into....I don't know any

I was hoping they would look more like this....

Also I could be persuaded to Silver

[churchill]

Now I see it .. Isn't that your shiny badge Naam ..Nice design

[Naam]

• Spain remains the epicenter of Europe’s woes - the big underlying

problem is the market perception of the federal balance sheet in Madrid, which

has expanded EU100B to capitalize banks and might have to advance even further

to help regional governments. Valencia became the first regional Spanish gov’t

to formally request aid Friday but reports this weekend suggest 6 others may

seek assistance also (http://goo.gl/dTC3K). Spain’s economy minister is ruling

out a full-scale bailout for the country but given the present level of yields,

a full liquidity assistance package may be inevitable, esp. if Moody’s

downgrades the country (something JPMorgan’s P Wadhwa has written about in the

past http://goo.gl/ocYXX).

[Naam]

• Greece - While Spain is receiving most of the attention in Europe,

followed closely by Italy, Greece isn’t helping the situation any. According to

reports over the weekend, the IMF is preparing to withdraw its financial support

for Greece as the fund increasingly has lost confidence in the country being

able to bring its debt/GDP ratio down to 120% (separately, Merkel apparently

won’t ask the German parliament for more Greek aid). While the Valencia aid

request was the big Fri headline from Europe, lost amid the Spanish focus was

the news that the ECB had again decided to halt the acceptance of Greek gov’t

bonds as collateral (per a local Greek newspaper: “we should be under no

illusions; this is how a Greek eurozone exit would occur…If the ECB, for

whatever reason, decides to permanently cut off Greek banks from funding, the

country’s financial system will collapse and Athens will have to start printing

money, drachmas in this case” http://goo.gl/rWB7A). Greek 10yr yields are up

nearly 100bp this morning (to ~26%).

[Naam]

• Asia wasn’t spared from the European weakness – the Shanghai Comp

declined 1.26% and hit fresh multi-year lows (>3.5yrs) while the Hang Seng

declined nearly 3% (there wasn’t anything too specific out of Asia overnight and

it seems like the market was responding mostly to European woes and the

implications the crisis will have for global growth going forward).

[Naam]

Morning Levels (as of 6:50amET)

• SP futures are dwn 14-15 points.

• Asia: Japan -1.86%; China -1.26%; Hong Kong -2.99%; India -1.67%;

Australia -1.67%

• Europe: EuroStoxx 50 -2.14%; FTSE -1.57%, DAX -1.57%, CAC –1.91%,

Italy -4.34%, Spain -4.27%

• USD (DXY) up 0.23%, EUR down 0.32%, GBP down 0.58%, Yen up 0.44%, AUD

down 0.88%

• Gold down 0.83% at $1,571.30

• Silver down 1.30% to $26.95

• Copper down 2.80% to $355.15

• WTI Crude down 2.97% to $89.10

• Natural Gas down 1.14% to $3.04

• Corn down 3.11% at $7.71/bu

• Wheat down 3.37% to $9.11/bu

• Treasuries 2s yields are up ~0.8bps at 0.210%, 10yr yields are down

~5.1bps at 1.406% , and 30yr yields are down ~5.7bps at 2.488%

[Naam]

here's the reason why i started to reduce my cash quota by carefully adding

some "worthless fiat paper assets" paid for by "worthless fiat paper dollars"

which were generated by "worthless fiat paper assets":

• ECB: ECB Board Member Benoit Coeure said on Friday that reducing the

deposit rate below 0% is a potential option; Coeure said, “It's true that we are

hitting a psychological limit at zero. And it's unclear whether markets can

function at negative interest rates. Some of them can.” [Reuters]

http://goo.gl/9C7xR

• The ECB can do more – a negative deposit rate, combined w/political

policy clarity, could go a long way towards knocking peripheral yields lower –

JPMorgan (G Fuzesi) wrote Friday about how the ECB would likely follow the

example of Denmark’s central bank and bring the deposit facility rate into

negative territory (in addition to cutting the headline policy rate further,

likely down to 50bp). “A negative deposit rate would lead to a ‘search for

yield’. E.g. core banks would suddenly have to pay the ECB €2 billion or so per

year on their excess reserves. In response, each individual bank may try to get

rid of its excess reserves by purchasing positively yielding assets or by making

loans. The excess reserves would not decline in aggregate, but they would

circulate more quickly, with asset prices getting pushed up in the process. Even

the zero deposit rate has had a big impact so far on shorter-term government

bonds in France, Belgium, etc. And if Euro area politicians reduce the huge

uncertainties facing the periphery, these reserves may even find their way back

to the periphery, allowing peripheral banks to finally reduce their reliance on

the ECB” (http://goo.gl/3fasF).

[ajarnpot]

http://www.bbc.co.uk/news/business-18963810

What does lossing AAA rating mean?

oh I know, German economy is in same boat as France ..................

[Naam]

What does lossing AAA rating mean?

as long as Germany can refinance its bonds with these rates "lossing"

its triple A rating is like a lukewarm fart of Moody's during a hurricane.

3-Month 0.000 08/15/2012 100.01 / 0.00 0.000 / 0.000 07/23

6-Month 0.000 01/09/2013 100.04 / -0.01 0.000 / 0.000 07/23

1-Year 0.000 07/24/2013 100.03 / 0.02 0.000 / 0.000 07/23

2-Year 0.000 06/13/2014 100.13 / -0.06 0.000 / 0.000 07/23

3-Year 2.250 04/10/2015 106.16 / -0.02 0.000 / -0.002 07/23

4-Year 2.750 04/08/2016 109.87 / 0.08 0.000 / -0.002 07/23

5-Year 0.500 04/07/2017 101.06 / 0.27 0.000 / 0.000 07/23

6-Year 4.250 07/04/2018 122.10 / 0.47 0.000 / -0.002 07/23

7-Year 3.500 07/04/2019 119.25 / 0.65 0.000 / -0.001 07/23

8-Year 3.000 07/04/2020 116.60 / 0.83 0.000 / -0.001 07/23

9-Year 3.250 07/04/2021 119.22 / 0.99 0.000 / -0.001 07/23

10-Year 1.750 07/04/2022 105.37 / 1.17 0.000 / 0.000 07/23

15-Year 6.500 07/04/2027 163.76 / 1.66 0.000 / -0.001 07/23

20-Year 4.750 07/04/2034 149.82 / 1.95 0.000 / 0.000 07/23

30-Year 2.500 07/04/2044 109.93 / 2.08 0.000 / 0.000 07/23

http://www.bloomberg...-bonds/germany/

[lannarebirth]

What does lossing AAA rating mean?

as long as Germany can refinance its bonds with these rates "lossing"

its triple A rating is like a lukewarm fart of Moody's during a hurricane.

3-Month 0.000 08/15/2012 100.01 / 0.00 0.000 / 0.000 07/23

6-Month 0.000 01/09/2013 100.04 / -0.01 0.000 / 0.000 07/23

1-Year 0.000 07/24/2013 100.03 / 0.02 0.000 / 0.000 07/23

2-Year 0.000 06/13/2014 100.13 / -0.06 0.000 / 0.000 07/23

3-Year 2.250 04/10/2015 106.16 / -0.02 0.000 / -0.002 07/23

4-Year 2.750 04/08/2016 109.87 / 0.08 0.000 / -0.002 07/23

5-Year 0.500 04/07/2017 101.06 / 0.27 0.000 / 0.000 07/23

6-Year 4.250 07/04/2018 122.10 / 0.47 0.000 / -0.002 07/23

7-Year 3.500 07/04/2019 119.25 / 0.65 0.000 / -0.001 07/23

8-Year 3.000 07/04/2020 116.60 / 0.83 0.000 / -0.001 07/23

9-Year 3.250 07/04/2021 119.22 / 0.99 0.000 / -0.001 07/23

10-Year 1.750 07/04/2022 105.37 / 1.17 0.000 / 0.000 07/23

15-Year 6.500 07/04/2027 163.76 / 1.66 0.000 / -0.001 07/23

20-Year 4.750 07/04/2034 149.82 / 1.95 0.000 / 0.000 07/23

30-Year 2.500 07/04/2044 109.93 / 2.08 0.000 / 0.000 07/23

http://www.bloomberg...-bonds/germany/

“The average low in interest rates in these cases occurred almost fourteen years after their respective panic years with an average of 2% … Amazingly, twenty years after each of these panic years, long-term yields were still very depressed, with the average yield of just 2.5%. Thus, all these episodes, including Japan’s, produced highly similar and long lasting interest rate patterns… The relevant point to take from this analysis is that U.S. economic conditions beginning in 2008 were caused by the same conditions that existed in these above mentioned panic years. Therefore, history suggests that over-indebtedness and its resultant slowing of economic activity supports the proposition that a prolonged move to very depressed levels of long-term government yields is probable.”

http://www.hoisingtonmgt.com/pdf/HIM2012Q2NP.pdf

[waza]

What does lossing AAA rating mean?

as long as Germany can refinance its bonds with these rates "lossing"

its triple A rating is like a lukewarm fart of Moody's during a hurricane.

3-Month 0.000 08/15/2012 100.01 / 0.00 0.000 / 0.000 07/23

6-Month 0.000 01/09/2013 100.04 / -0.01 0.000 / 0.000 07/23

1-Year 0.000 07/24/2013 100.03 / 0.02 0.000 / 0.000 07/23

2-Year 0.000 06/13/2014 100.13 / -0.06 0.000 / 0.000 07/23

3-Year 2.250 04/10/2015 106.16 / -0.02 0.000 / -0.002 07/23

4-Year 2.750 04/08/2016 109.87 / 0.08 0.000 / -0.002 07/23

5-Year 0.500 04/07/2017 101.06 / 0.27 0.000 / 0.000 07/23

6-Year 4.250 07/04/2018 122.10 / 0.47 0.000 / -0.002 07/23

7-Year 3.500 07/04/2019 119.25 / 0.65 0.000 / -0.001 07/23

8-Year 3.000 07/04/2020 116.60 / 0.83 0.000 / -0.001 07/23

9-Year 3.250 07/04/2021 119.22 / 0.99 0.000 / -0.001 07/23

10-Year 1.750 07/04/2022 105.37 / 1.17 0.000 / 0.000 07/23

15-Year 6.500 07/04/2027 163.76 / 1.66 0.000 / -0.001 07/23

20-Year 4.750 07/04/2034 149.82 / 1.95 0.000 / 0.000 07/23

30-Year 2.500 07/04/2044 109.93 / 2.08 0.000 / 0.000 07/23

http://www.bloomberg...-bonds/germany/

Its a confidence thing

[lannarebirth]

http://m.bbc.co.uk/n...siness-18858444

Nestl頣hief sights the "financialisation" of food markets as one of the major contributing factors sustaining higher prices and especially their greater volatility.

using grains to produce bio fuel is a crime!

Couldn't agree more. What next? Will they be making the water and air that sustains universal life just another market commodity as well?

Corn limit down today. You think the speculators are playing with food?

[Naam]

Corn limit down today. You think the speculators are playing with food?

i don't follow commodities on a daily basis but i'm bloody well convinced they are playing with anything that promises profit.

[yoshiwara]

http://www.bbc.co.uk...siness-18963810

What does lossing AAA rating mean?

oh I know, German economy is in same boat as France ..................

Some investment institutions are constrained to only invest in AAA financial instruments, so the removal of AAA status from a sovereign entity should push interest rates up.

Now since German Bunds have been pushing into negative territory you might say they don't bloody care. Same with the US. Keep an eye out though for whether all the 3 main rating agencies apply a downgrade. There is more than 3 BTW. The risk on the senior sovereigns is whether at some point the bond vigilantes do a bolt (as in Usain)