Secret Banking Cabal Emerges From AIG Shadows- Bloomberg News

[MarquisBlack]

Rofl

 

[SpasticGramps]

So it's quite apparent that normal financial rules do not apply anymore.

Greece continues be sucked into the black hole vortex of debt with the insolvent ECB and IMF (USA) bailing them out on the way.

Given that the Ponzi is running out of gas the ECB has decided to suspend rating requirements on Portuguese debt. Let's be real, those rating agencies are all a bunch of bullshit anyway. Monkeys with AAA rubber stamps.

Europe is chasing openly admitted insolvent paper with cash. This can only end fucking awesome. Best idea ever.

ECB Suspends Rating Requirement For Portuguese Collateral

A stunner in the JCT press conference, who just announced that the ECB is willing to accept any junk that comes its way. Specifically he said that the ECB has decided to suspend a rating requirement for Portuguese collateral, and that the ECB will shortly issue a press release on the matter. Obviously the bank is now making stuff up as it comes alone. He also added that the suspension will be maintained until further notice. Expect this move to affect Italian, SPanish and all other insolvent country debt shortly as it becomes all too clear that the ECB will do everything in its power to give out cash against insolvent paper. And now you know what Europe's QE looks like.

The race to the bottom is on like donkey kong.

 

[joeuser]

I haven't figured out yet WHY the stock market is STILL going up after POMO ended. Anyone have any ideas? I know they kept a few hundred billion of "just in case" money...maybe they're using it now to prevent the "end of POMO crash" that everyone...including me...were waiting for?

 

[The iD]

because they are still holding down CTRL+P. QE2-lite is in affect, they are still pillaging pension funds, taking taxpayer dollars to float Greece that pays the Bankers that pays the hedge funds, and because everyone is covering their shorts for the inevitable flash crash while sheep buy what Cramer tells them. all the books and figures are cooked. twice baked & double stuffed even. the US Gov is actively devaluing the USD to prop up the EUR, which in turn is imploding, which funnels money into equities, etc. when people should be selling and going risk off they are buying because of the MSM propaganda. stocks cheap? undersold? hahaha, rofl, maybe in upside-down loupy land that the majority of people inhabit.

FB IPO is waiting for after QE3 begins to get some freshly printed 1s and 0s. 100B$ valuation isnt unthinkable when a loaf of bread costs $15USD. at least then everyones house will be "worth" as much as it was in '05. yay, happy times are here again. nothing but blue skies...

DJI is testing the 12.6k level well. watch it break out after todays retracement one way or the other from here, but upside is limited (like, what, +300/+1300? i really cant see it hitting 14k again but who knows, 13k is more possible, imo). downside is well supported. look for poorer and poorer economic figures to be released, especially in jobs and housing as the former slides and the later double dips. corporations will be posting earnings that beat (if only barely in some cases) the (manipulated low) earnings predictions, which will likely pump the markets a little more. its that time of year after all.

the other indices are similar, just different integers and angles. this summer should be great to buy PMs once commodities start (continue) to tank. watch for the beginning of a disconnect between spot and paper prices (higher phyz, low paper), that will be an excellent time to be grabbing phyz.

anyone still playing w/ paper is crazy. up...down...it doesnt know where its going. bears and bulls are ripping their fur out. such bad data but levitating markets, theyre all freaked, its effin hilarious. lol, so, on that note, wide straddles or butterflys have been easy fukin' money for me. tap the top, tap the bottom, doubledown & do it all again. 30$ running swing in crude in 2wks? cha-ching.

in short: EUR/USD has been good measure lately. it is until it isnt. look out belooooow. stay frosty,

-iD

 

[wantaknow]

old news broken on alex jones years ago ....alex jones everyday ......stay informed

 

[SilverSurfer_OG]

old news broken on alex jones years ago ....alex jones everyday ......stay informed

Agreed. That man is on the money

 

[SpasticGramps]

I haven't figured out yet WHY the stock market is STILL going up after POMO ended. Anyone have any ideas? I know they kept a few hundred billion of "just in case" money...maybe they're using it now to prevent the "end of POMO crash" that everyone...including me...were waiting for?

This.

because they are still holding down CTRL+P. QE2-lite is in affect, they are still pillaging pension funds, taking taxpayer dollars to float Greece that pays the Bankers that pays the hedge funds, and because everyone is covering their shorts for the inevitable flash crash while sheep buy what Cramer tells them. all the books and figures are cooked. twice baked & double stuffed even. the US Gov is actively devaluing the USD to prop up the EUR, which in turn is imploding, which funnels money into equities, etc. when people should be selling and going risk off they are buying because of the MSM propaganda. stocks cheap? undersold? hahaha, rofl, maybe in upside-down loupy land that the majority of people inhabit.

Irrational exuberance, cognitive dissonance, and wishful thinking.

Did everyone see the jobs report this Friday? 18,000 lol and let me tell you the "economist" and "experts" stunned! Totally stunning. Nobody could have seen this. Nobody. QE3 to infinity is the bag.

More on irrational exuberance.

Guest Post: The Sharpest Rally Since 1644

The Sharpest Rally Since 1644

The recent stock market rally's manic force is deeply suspect.

According to my research, last week's stock market rally was the sharpest such surge since 1644, just before the Ming Dynasty collapsed and Europe was decimated by an epidemic of plague. Perhaps that is coincidence, perhaps not. The Status Quo always tries to brighten the outlook just before things fall apart, and nothing cheers flagging spirits more than a sudden rise in wealth.

The rally in barley in Babylon during the last week of December 1748 BCE was almost as robust, a peculiar coincidence given the next sharpest rally on record was the rebound in Dutch tulip bulb contracts which also occurred in the month of December, 1636.

Shares in the South Seas Company recovered much of their initial losses in a similar rebound in London, September, 1720, a welcome respite for all the investors who were about to be wiped out by the 80% decline in share value when that bubble popped.

More recently, condos in Florida saw a sharp uptick of sales and prices fetched in August, 2007, just before that market collapsed in a great heap.

You see the pattern: the sharper the rally, the closer the market is to the bubble's end-game. The South Seas Company is the closest analog financially to today's Fed-goosed stock rally; massive insider profiteering and official intervention pushed share prices up, fueling a frenzy of buying and forecasts of rising profits forever. In another eerie parallel, the South Seas Company's entire raison d'etre was to offload government debt onto a proxy entity to evade the perception that government debt was out of control. (Funding various wars tends to do that to national debt.)

Does anyone seriously believe this rally is based on fundamental strengths in the U.S. and global economy? Uh, sure. Let's be honest, the whole thing reeks of massive goosing by proxies with the goal being perception management. If the stock market is rising, wealth is increasing and the economy is healthy. Or so goes the marketing pitch.

With the end of QE2 and endlessly rising government deficit-spending stimulus in sight, the market sagged. No wonder; without the hot air supplied by the Fed and $1.6 trillion deficit borrowed and blown annually, what the heck is going to keep the Central Planning "recovery" inflating?

Nothing. Where does that leave The Powers That Be? Horribly exposed to the chill wind of reality. And what's the easiest way to engineer a perception that all is well? A massive stock market rally that forces everyone who bet against the Fed to cover their bets, a rally so sharp and powerful that it triggers every technical "buy" on the planet: Advance-decline line: BUY! Rising moving averages: BUY! Dow Theory: BUY! etc.--except for volume, which is declining, insider buying, which is as usual swamped by insider selling, and a few other indicators that the players can't control.

Doesn't it strike you as a bit too perfect? The central bank ceases officially propping up of risk assets to the tune of $100 billion a month, and in the normal course of events it would be natural for doubts about the future to weigh on risk assets. Instead, they all go nuts in a straight line up. Interesting, to say the least.

The entire ramp in corporate profits was a see-saw result of the Fed trashing the U.S. dollar. Dollar goes down, profits earned abroad in non-dollar currencies go up. Simple. But unfortunately for the Fed and global Corporate America, the dollar, despite the Fed's numerous arrows in its back, is still alive and is heading for its see-saw date with the euro, a.k.a. the DXY. If the euro implodes--and what exactly is holding it up other than empty promises and ECB duct tape?--then the dollar will necessarily rise, regardless of other conditions.

And when the dollar rises, Corporate America's ever-rising profits hit the reef and sink. It's really that simple.

The stench of official desperation is in the air. The release of oil reserves, the stunning rally on threadbare "good news," the touting of absurdly trivial increases in consumer debt--it rose by $5 billion in a $14 trillion economy, oh happy day, we're saved!--it's all so transparently designed to manage perceptions, because perceptions are what drive the "animal spirits" of borrowing and spending.

It's nice that luxury auto sales have skyrocketed to new highs--good going, guys. Wealth is back, baby, and everything's fantastic.

But soaring luxury auto sales might not create the perception the handlers intended. Note to Fed, Treasury, White House, Congress, mainstream financial media: you need to get out more. Goosing the stock market works for "your people," just like that last big rally in 1644 gave a warm and fuzzy feeling to the Ming Dynasty insiders. But it didn't move the needle on the real economy or dissolve the perception that the whole rotten edifice was crumbling.

 

[Madrus Rose]

The paint wasn't even dry on ending the POMO they then did the equivilent of QE2 when they surprised the commodities market with that SPR release of 60mil barrels from the reserves . Of course that was temp setback for oil prices that crept right back up since that was only a 20day supply by the 85mil barrels the world uses every month. Still a form of QE3 none the less , since instead of printing money they started printing Oil .

(Also the Saudi's will always pick up the slack no matter what OPEC publicly states , they have a large bone to pick with Iran & undermining them by continuing supplys as needed was always a given.)

Just beause its earnings season and many companies noticeably didn't warn that will again post some big revenues we have the same run ups that happened back in April/May and they were foaming at the mouth to window dress at the end of June right into the Holiday weekend . Just as Oil corrected & commodities fell into mid-june that's when they decided to make their play bouncing it right off the 200ma & ran it back all the way knowing earnings season would provide enough buzz & headline it did last time out . You didn't want to fight that big move up last mo but those employment #'s were what they bid it up into , minor disaster there .

Market could have just continued going into breakout mode if not for those but look at it as a gift for better shorting as like before in May there was the best shorting opps to come around in so long , though the market ran to 1370 almost everything was getting sold into . They need at all costs to keep up the appearance of a recovery , retail #'s & SSS came in deceptivly strong in June for all the deep discounts stores were giving but at what costs to their bottom lines ?

On the pro side they had going in their favor and still the biggest Casino in town

•-- The lag effect of monetary and fiscal stimulus, including QE2 and the massive rebuilding that's just getting underway in Japan. "That is a real 'contagion' that's going to buy infrastructure products from the U.S.," he says.

•-- Banks have "enormous reserves" and are starting to lend, he says, citing 7 consecutive months of increased consumer credit. Meanwhile, consumer bankruptcies are falling and average credit scores are at the highest level in four years.

•-- Record levels of share buybacks, which increase corporate earnings per share, "which means the multiple of the market comes down from current levels."

•-- Cheap valuations for mega-cap stocks such as Conoco-Phillips, Microsoft and Apple. and who would short this market against these massive steamrollers that are going to keep on…generating income?

 

[Madrus Rose]

Economic Rebound “Not Happening” in 2011: Achuthan ECRI
http://finance.yahoo.com/blogs/breakout/economic-rebound-not-happening-2011-achuthan-163124592.html

As the financial world emitted a collective groan when the June jobs data crossed the wires this morning, Lakshman Achuthan was calm, unmoved and not surprised. In fact, the co-founder of the Economic Cycle Research Institute says he's seen it coming for months.

"The economy is down-shifting...you can see in the jobs number that the sand is shifting," he says.

As a self-described business cycle expert, Achutan's analysis of data and leading indicators "is able to see through the noise" and allows him to make macro calls on the growth cycle. In fact just two months ago on our sister program The Daily Ticker he said "clearly, unambiguously we will see a global industrial slowdown this summer."

With so much riding on - and priced into - an economic and earnings rebound in the second-half of the year, Achutan not only pours water on that, but ups the ante by saying he cannot rule out slumping into another recession in 2012. "You have a 4/10ths rise in the unemployment rate over the last 3 months. That doesn't happen in an economy that is reviving or firming or gaining steam," he explains.

Further, Achutan says "It's a growth rate slowdown and that's what the market really cares about. Recessions and recoveries, that's old news."

So assume for a minute that Achutan is right (again) and that the growth rate just stumbles along at 1-2%, jobs growth doesn't materialize and the various Purchasing Managers Indexes stall. Achutan says that will have a devastating effect on earnings and stocks. "Profit growth is pro-cyclical, meaning it can't disconnect from the economy" he explains, adding that "you'll have profits. But if you're interested in if they're getting better or worse, it's going to be really tough for them to get better on a sustained basis in a growth rate cycle slowdown."

"I'd be surprised if the market really took off on a sustained basis against what the growth rate of the economy is," he says. "It's not transitory."

What do you think? Is this still just a "soft patch" or something more sinister?

 

[SpasticGramps]

I love how the are calling this a "soft patch." That's some pretty impressive Neo-Keynesian Princeton economic jargon garbage.

Soft patch like quick sand, but I'm not worried about the real economy withering on a vine while the last pennies are stolen by the banking elite. After all, the pain is just going to be "transitory." I just close my eyes and keep repeating that Uncle Ben is "100% sure this is going to work."

 

[SpasticGramps]

Putin is calling Master Ben a "hooligan". How dare he?!

Vladimir Putin Calls Bernanke A Hooligan, Angry At American Money Printing

Who would have thought that Ron Paul's ideological ally in his quest to take down the Chairsatan would be none other than the Russian dictator-in-waiting (or rather, in actuality), Vladimir Putin. In a speech before the of economic experts at the Russian Academy of Sciences, the Russian prime minister had the following to say: "Thank God, or unfortunately, we do not print a reserve currency but what are they doing? They are behaving like hooligans, switching on the printing press and tossing them around the whole world, forgetting their main obligations." What appears to have angered the former KGB spy is the end of QE2. According to RIAN: "Putin's comments came in the wake of the completion of the US' quantitative easing (QE) 2 program on June 30, in which the Federal Reserve bought $600 billion worth of its Treasury bonds. The Fed's first round of QE, which ended in March last year, amounted to less than half the size of QE2." We can't wait to hear what expletive Putin will usher once Bernanke launches QE3.

What are the next steps: "The Russian authorities have said they would like to see a basket of currencies including the ruble replacing the dollar as the main reserve currency, although most analysts have said a more realistic target for Russia would be if the ruble became a regional reserve currency for the CIS." Too bad most analysts are right 9 out of -7 times. And last time we checked Russia was the largest oil producer in the world, which means it can do pretty much whatever it wants. Which, assuming Russia forms a 21st century axis with China and Germany, as many have suggested, means that while analysts can downplay the impact of what Russian ambitions in the monetary arena mean, pretty soon the only reserve currency in the world will be the one backed not with Tomahawk missiles or printing presses, but actual, hard assets.

 

[SpasticGramps]

Another reason I believe the market didn't sell off this time after the end of QE2 is that everyone and their mom knows that the real economy is total shit and the only thing left to do is print money into oblivion until the music finally stops. Given that I think the markets were already pricing in QE3. For good reason too.

Ben opened his mouth today and the dollar tanked as usual sending ALL other asset classes higher. It was rallying strong until Fitch came out and downgraded Greece to CCC outlook negative given that the bailout package has fallen apart.

Anyway, Ben is conditioning the sheep for QE3 to infinity and beyond. Dow 50,000 baby! You won't be able to buy anything with your money, but it's a cool nominal number you can look at on your quarterly statement right before you crumple it up and try to eat it because bread is $20 a loaf at the grocery store and it would cost you $50 to get there because gas is going to be so high. Too bad so sad for the already starving and revolting third world countries. They don't call him Uncle Benocide Bernanke for no reason.

Fed weighing further easing, Bernanke says

WASHINGTON (MarketWatch) — Just two weeks after completing a second extraordinary effort to juice the moribund U.S. economy, the Federal Reserve is contemplating more “untested” steps, the head of the central bank said Wednesday.

Federal Reserve Chairman Ben Bernanke says the central bank is examining several untested means to stimulate growth if conditions deteriorate, even though the central bank believes the temporary shocks holding down economic activity will pass.

At the end of June, the Fed completed a plan to buy $600 billion of Treasury bonds in what markets have dubbed QE2.

“The possibility remains that the recent weakness may prove more persistent than expected and that deflationary risks might reemerge, implying additional policy support,” Bernanke told the House Financial Services Committee, in the first of two days of testimony about the economy and monetary policy.

The announcement caught markets by surprise, and stocks SPX +1.06% immediately jumped and the dollar DXY -1.09% slumped after the Bernanke comments. U.S. stocks gained about 26% and the dollar fell 7% during QE2. See earlier analysis of QE2.

The announcement caught markets by surprise

Nobody could have seen this coming. Nobody.

 

[Dislexus]

The only answer is a constitutional amendment simply stating the obvious: People are born, not incorporated.

Take away corporate personhood, and you have sprung a small leak that one day erodes the entire dam of power.

 

[SpasticGramps]

Poor Germans. They just got left holding the bag.

The Fatal Flaw In Europe's Second "Bazooka" Bailout: 82 Million Soon To Be Very Angry Germans, Or How Euro Bailout #2 Could Cost Up To 56% Of German GDP

A funny thing happened in Euro spreads today. While the bonds of all PIIGS countries surged higher in price (and plunged in yield) upon the announcement of the second Big Bang bailout, the reaction in core Eurozone credit was hardly as exuberant, and in fact spreads of the two core European countries pushed wider by the end of the day, and over the last week. Why? After all the elimination of peripheral risk should have been seen as favorable for everyone involved, most certainly for those who had been seen as supporting the ever more rickety house of European cards. Well, no. Basically what happened today was a two part deal: the i) funding of future debt for countries that are currently locked out of the market (all the PIIGS and possibly core countries soon) or in other words the "liquidity mechanism" which is being satisfied by the EFSF "TARP-like" expansion, and ii) the roll-over mechanism for existing holders of debt which "allows" them to "voluntarily" transfer existing obligations into a "fresh start" Greece which can then emerge promptly from the Selective Default state that is coming from Moody's and S&P any second, and supposedly allow the country to access markets as a non-bankrupt country.

For all intents and purposes the second can be ignored, because as has been made clear over the past few days, and as will be demonstrated below, the actual rollover from non-Peripheral banks will be de minimis, the bulk of impaired debt being held by banks in the host countries as is, and used as collateral with the ECB in the form of par instruments for cash.

Now the second part of the mechanism was never an issue further demonstrated by the plunge in net notional in Greek CDS as core banks no longer needed to hedge exposure and instead opted to divest their holdings. This is merely a red herring that attempts to confuse the issues associated with the first, and far more important concept: the nuances of the EFSF and its imminent expansion. And expand it will have to, because in reality what is happening is that the net debt of the countries will end up growing even more over time for one simple reason: this is not a restructuring of existing debt from the perspective of the host country! Simply said Greek debt will continue growing as a percentage of its GDP, meaning it, and Ireland, and Portugal, and soon thereafter Italy and Spain will be forced to borrow exclusively from the EFSF. Therein lies the rub. In a just released report by Bernstein, which has actually done the math on the required contributions to the EFSF by the core countries, the bottom line is that for an enlarged EFSF (which is what its blank check expansion today provided) to be effective, it will need to cover Italy and Belgium. As AB says, "its firepower would have to rise to €1.45trn backed by a total of €1.7trn guarantees." And here is where the whole premise breaks down, if not from a financial standpoint, then certainly from a political one: "As the guarantees of the periphery including Italy are worthless, the Guarantee Germany would have to provide rises to €790bn or 32% of GDP." That's right: by not monetizing European debt on its books, the ECB has effectively left Germany holding the bag to the entire European bailout via the blank check SPV. The cost if things go wrong: a third of the country economic output, and the worst case scenario: a depression the likes of which Germany has not seen since the 1920-30s. Oh, and if France gets downgraded, Germany's pro rata share of funding the EFSF jumps to a mindboggling €1.385 trillion, or 56% of German GDP!

History is repeating itself as we speak. We just never learn.