James Bond, Buffett’s Martian, and Europe’s New Gold Standard
by Adrian Ash
Wednesday, 24 October 2012
Europe’s huge gold reserves are currently more useless than Bond-villain Auric Goldfinger could wish…
LET’S SAY you owe the world €2 trillion, but you also hold the world’s 4th largest hoard of physical gold.
Sounds like a no-brainer, right? Use Italy’s gold to pay Italy’s debt.
Trouble is, Rome’s gold would be worth only a drop in the bucket – [...]
The acute global economic crisis today is the direct result of the continued wilful obstruction and overriding of the normal checks and balances that should operate within a capitalistic system of commerce. This interference has been perpretated by powerful banks and governments acting in collusion, for reasons of profit and power. At every instance in recent years when it looked like the economy was slipping into a necessary recession they [...]
Back in March, on the back of the last gasp of yet another central bank-induced sugar high (in this case mostly LTRO 1+2), as well as economic data skewed by record warmth, a plethora of housing bottom callers (we would call them analysts but they are anything but) emerged from their hibernation and did what they do like clockwork every year: called a housing in bottom. Sadly, now that the [...]
We start today’s story of the day by pointing out that Deutsche Bank – easily Europe’s most critical financial institution – reported results that were far worse than expected, following a decline in equity and debt trading revenues of 23% and 8%, but primarily due to Europe simply “not being fixed yet” despite what its various politicians tell us. And if DB is still impaired, then something else will have [...]
On a day when Lagarde happily trots out statement after statement that the IMF has another bucketful of promises to solve the world’s excess debt problems with its own debtors providing more of the wealth-creating debt in ever-increasing circles of ridiculous indebtedness, we may have found the perfect antidote. Perhaps, given the weakness in European sovereign markets this week, bond market investors have already watched the following presentation. Explaining in simple terms [...]
As we pointed out about a month ago, in “While You Were Sleeping, Central Banks Flooded The World In Liquidity” as the world was focused on headlines whether or not the Fed would step up as it always does when the market is sliding, and unleash the monetary floodgates, it was not Ben Bernanke, but eveyrone else that hit CTRL+P and took the place of the Fed, of note the primary central banking peers [...]
Last month, the world’s biggest hedge fund, Bridgewater, issued a fascinating analysis of deleveraging case studies through the history of the world, grouped by final outcome (good, bad and ugly). As Dalio’s analysts note: “the differences between deleveragings depend on the amounts and paces of 1) debt reduction, 2) austerity, 3) transferring wealth from the haves to the have-nots, and 4) debt monetization. Each one of these four paths reduces [...]
Back in January 2010, when in complete disgust of the farce that the market has become, and where fundamentals were completely trumped by central bank intervention, we said, that “Zero Hedge long ago gave up discussing corporate fundamentals due to our long-held tenet that currently the only relevant pieces of financial information are contained in the Fed’s H.4.1, H.3 statements.” This capitulation in light of the advent of the Central Planner of [...]
If anyone is tired of the daily European soap opera with surrealistic tragicomic overtones, they can simply shift their gaze to the 8th largest economy in the world: the insolvent state of California, whose controller just told legislators has just over a month worth of cash left. From the Sacramento Bee: “California will run out of cash by early March if the state does not take swift action to find [...]
Via Lew Spellman of the Spellman Report
How Monetization Happens: Being at the Helm When the Ship Goes Down
The consequences of excess debt are now facing the leaders of Europe head on, and a monumental decision must be made whether explicitly or implicitly. Excess debt leads to a long chain of D words:Deleveraging in an attempt to retire debt results in a depressed economy and declining asset prices. The depressed economy breeds private debt defaults that [...]
Not looking for a rerun of Lisbon Treaty changes
Changes intended to target chronic debt offenders
Lawsuits must be possible against EU debt offenders
Too little regulation led to crisis
Reiterates backing for financial transaction tax, Germany will do ‘everything’ to push EU plan on tax
Merkel Says Will Also Look at Regulation of Hedge Funds
Says German short-selling ban was successful
When all else fails: use diversion, scapegoat the one you hope to bail you [...]
Denial. Denial is safe. Comforting. Religiously and relentlessly abused by politicians who don’t want nor can face reality. A word synonymous with “muddle through.” Ah yes, that “muddle through” which so many C-grade economists and pundits believe is the long-term status quo for the US and the world just because it worked for Japan for the past three decades, or, said otherwise, “just because.” [...]
1. Eleven years ago we experienced the strongest secular bull market in U.S. history covering the period from 1982 to 2000 (interrupted only by the 1987 crash). This secular bull market ended with the most outrageous valuations in history. In fact, the P/E and px to cash flow and every other metric you wish to use were more than double the prior peaks over [...]
(Reuters) – Three numbers should suffice to give Chinese economic policymakers a sleepless night: 65.4 million, $28.7 billion and $2.45 trillion.
In order, they are the estimate by a government researcher of how many apartments stand vacant in China, many of them bought as speculative investments; the country’s trade surplus in July; and the international reserves the central bank has accumulated by buying dollars to hold down the yuan.
Together, they encapsulate [...]